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Churchill's remedy for the evils of "State Socialism" is
more "State Socialism"--and undoubtedly there is an inevitable trend in
that direction. But the government railway strikes of France, Austria,
Italy, Hungary, and other countries ought to show him that his remedy,
advantageous as it may be from many standpoints, is scarcely to be
considered even as a first step towards the solution of the labor
problem. As long as capitalists continue to control government, "State
Socialism," on the contrary, makes the strike more necessary, more
decisive, and invaluable, not only to employees, but to every class that
suffers from the government or the economic system it supports.

The most representative of American Socialists, Eugene V. Debs, has
given us an excellent characterization of this movement as it appears to
most Socialists.


"Successful leaders are wise enough to follow the people. For
instance, the following paragraph is to the point:--

"'Ultimately I believe that this control of corporations should
undoubtedly, directly or indirectly, extend to dealing with all
questions connected with their treatment of their employees,
including the wages, the hours of labor, and the like.'

"And what Socialist made himself ridiculous by such a foolish
utterance? No Socialist at all; only a paragraph from his latest
article on the trusts by Theodore Roosevelt. Five years ago, or
when he was still in office and had the power, he would not have
dared to make that statement. But he finds it politically safe and
expedient to make it now. It is not at all a radical statement. On
the contrary, it is simply the echo of E. H. Gary, that is to say,
John Pierpont Morgan, president of all the trusts.

"Mr. Roosevelt now proposes that Bismarck attempted in Germany
forty years ago to thwart the Socialist movement, and that is State
Socialism, so called, which is in fact the most despotic and
degrading form of capitalism.

"President Roosevelt, who is popularly supposed to be hostile to
the trusts, is in truth their best friend. He would have the
government, the capitalist government, of course, practically
operate the trusts and turn the profits over to their idle owners.
This would mean release from responsibility and immunity of
prosecution for the trust owners, _while at the same time the
government would have to serve as strikebreaker for the trust
owners_, and the armed forces of the government would be employed
to keep the working class in subjection.

"If this were possible, it would mark the halfway ground between
industrial despotism and industrial democracy. But it is not
possible, at least it is possible only temporarily, long enough to
demonstrate its failure. The expanding industrial forces now
transforming society, realigning political parties, and reshaping
the government itself cannot be fettered in any such artificial
arrangement as Mr. Roosevelt proposes. These forces, with the
rising and awakening working class in alliance with them, will
sweep all such barriers from the track of evolution until finally
they can find full expression in industrial freedom and social
democracy.

"In this scheme of State Socialism, or rather State capitalism, Mr.
Roosevelt fails to inform us how the idle owners of the trusts are
to function except as profit absorbers and parasites. In that
capacity they can certainly be dispensed with entirely and that is
precisely what will happen when the evolution now in progress
culminates in the reorganization of society."[77] (My italics.)


[72] Victor S. Clark, "The Labour Movement in Australasia."

[73] In her "American Socialism of the Present Day" (p. 185), Miss
Hughan has quoted me (see the _New York Call_ of December 12, 1909), as
classing the abolition of the injunction as one of the revolutionary
demands never to be satisfied until the triumph of Socialism. As a means
to check the growth of the power of the unions, this method of arbitrary
government by judges has never been resorted to except in the United
States. It is evident, then, that this statement was only meant for
America. It should also have been qualified so as to apply solely to the
America of to-day. For as other methods of checking the unions exist in
other countries, it is obvious that they could be substituted in this
country for the injunction, a proposition in entire accord with all I
have written on the subject--though unfortunately not stated in this
brief journalistic expression. I have now come to the belief, on the
grounds given in the text, not only that a new method of fighting the
unions (namely, compulsory arbitration) _can_ be substituted for the
injunction, but that this _will_ be done within a very few years.

[74] Professor Le Rossignol and Mr. William D. Stewart, "Compulsory
Arbitration in New Zealand," in the _Quarterly Journal of Economics_.
Reprinted in their book, "State Socialism in New Zealand."

N. B. The reader who is interested is referred to the whole of both
these volumes. There is little matter in either that does not have a
direct bearing on our subject, and they have been utilized throughout
this and the following chapter.

FOOTNOTES:

[75] _The Coming Nation_, Sept. 2, 1911.

[76] The _Saturday Evening Post_, Nov. 25, 1911.

[77] The _New York Times_, Nov. 25, 1911.




CHAPTER VI

AGRARIAN "STATE SOCIALISM" IN AUSTRALASIA


Australia and New Zealand are commonly taken as the most advanced of all
countries in government ownership, labor reforms, and "State Socialism."
Indeed they are often pictured as almost ideally governed, and the
credulity with which such pictures are received shows the widespread
popularity of "State Socialism."

The central principle of the Australian and New Zealand reforms is,
however, not government ownership or compulsory arbitration, as commonly
supposed, but a land policy. By means of a progressive or graduated land
tax it is hoped to break up all large estates and to establish a large
number of small proprietors. When it was said to Mr. Fisher, the new
"Labour Party" Premier of Australia, that this policy was not Socialism,
he replied laconically, "It is my kind of Socialism."[78]

The "State Socialism" of Australia and New Zealand is fundamentally
agrarian; its real basis is a modernized effort to establish a nation of
small farm owners and to promote their welfare.

Next in importance and closely connected with the policy of gradually
bringing about the division of the land among small proprietors, is the
policy of the government ownership of monopolies. Already New Zealand is
in the banking business, and the Australian Labour Party proposes a
national bank for Australia. National life and fire insurance are
instituted in New Zealand; the same measures are proposed for Australia.
Already many railroads are nationally owned, and it is proposed that
others be nationalized. Already extensive irrigation projects have been
undertaken; it is proposed that the policy should be carried out on a
wider scale. But the Australian Labour Party is not fanatical upon this
form of "State Socialism." It does not argue, like the British
Independent Labour Party, that the civilization of a community can be
measured by the extent of collective ownership, for Australasia's
experience has already shown the immediate and practical limits of this
kind of a movement. New Zealand is already burdened with a very large
national debt; Australia proposes that its debt shall be increased only
for the purpose of building commercially profitable railways or
irrigation schemes, etc., and not in any case for the purpose of
national defense or for other investments not immediately remunerative.

The national debt, aside from that based on profit-making governmental
undertakings, like railways, is to be reduced, and nationalization of
other monopolies is not to be undertaken until new measures of taxation
have become effective. These are a graduated land tax and an extension
of the graduated income and inheritance taxes.[79]

The program concludes with vigorous measures for national defense.
Australia is to own her navy (supported not by loans, but by taxation),
and is to be as independent as practicable of Great Britain. She feels a
need for military defense, but she does not propose to have a military
caste, however small; the whole people is to be made military, the
Labour Party stands for a citizen defense force and not for a
professional army. Finally, Australia is to be kept for the white race,
especially for British and other peoples that the present inhabitants
consider desirable.

There remains that part of the program which has attracted the most
attention, namely, the labor reforms: workingmen's insurance, an
eight-hour day, and an increase of the powers of the compulsory
arbitration courts. Already in fixing wages it has been necessary for
the court to decide what is a fair profit to the employers, so profits
are already to some degree being regulated. It has been found that
prices and the cost of living are rising still more rapidly than wages;
it is proposed that prices should also be regulated by withdrawing the
protection of the customs tariff from those industries that charge an
unduly high price.

I have mentioned the labor element of the program last, for the
Australian Labour Party is a democratic rather than merely a labor
movement. The Worker's Union, and the Sheep Shearer's Society of the
Eastern States, enrolled from the first all classes of ranch employees,
and "even common country storekeepers and small farmers."[80] Some of
the miners' organizations have been built on similarly broad lines, and
these two unions constitute the backbone of the Labour Party. The
original program of the New South Wales Labour Electoral League, which
formed the nucleus of the Labour Party in 1891, proposed to bring
together "all electors in favor of democratic and progressive
legislation," and was nearly as broad as the present program; that is to
say, it was by no means confined to labor reforms.

But are there any other features in the Australian situation, besides
the dominating importance of the land question, that rob this program of
its significance for the rest of the world?



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