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It cannot be denied that
there are. In the first place, it is only this recent social reform
movement that has begun to put New Zealand and Australia under real
democratic government, and this democratization is scarcely yet
complete, since the constitutions of some of the separate Australian
States and Tasmania contain extremely undemocratic elements; while the
federal government is dominated by a Supreme Court, as in the United
States. Consequently it is only a few years in some of the States since
such elementary democratic institutions as free schools were instituted.
It is evident, on the other hand, that countries establishing democratic
or semidemocratic institutions under the conditions prevailing in the
world as late as 1890, when the great change took place in New Zealand,
or during the decade, 1900-1910, when the political overturn gave
Australia to the Labour Party, should be more advanced than France,
Germany, Great Britain, or the United States, where the latest great
overturn in the democratic direction occurred in each instance a
generation or more ago.

So also Australia and New Zealand which, on the one hand, are still
suffering from the disadvantage of having lived until recently under a
system of large landed estates, on the other hand have the advantage of
dealing with the land question in a period when the governments of these
new countries are becoming rich enough, through their own enterprises,
to exist independently of land sales, and when farmers are more willing
to increase the power of their governments, both in order to protect
themselves from the encroachments of capital and of labor, and directly
to advance the interests of agriculture. The campaign to break up the
large estates has kept the farmers engrossed in politics, and this has
occurred in a period when industrial organization has made possible a
whole program of "Constructive State Socialism." By taking up this
program the farmers and those who wished to become farmers have at once
looked to their own interests and secured the political support of other
small capitalists and even of a large part of the workingmen.

But working against the nationalization of the unearned increment,
against the policy of leasing instead of selling the public land,
central features of every advanced "State Socialist" policy, is the fact
that the small farmers, daily becoming more numerous, hope that they
might themselves reap this increment through private ownership. In no
national legislation is it proposed to tax away this increment in
_agricultural_ land, which preponderates both in New Zealand and
Australia. But, while in other countries the agricultural population is
decreasing relatively to the whole, in New Zealand the settlement of the
country by the small farmers has hitherto led it to increase, and the
new legislation in Australia must soon have the same result. So, in
spite of the favorable auspices, it seems that the climax of the "State
Socialism," the transformation of the small farmer into a tenant of the
State is not yet to be undertaken, either in the shape of land
nationalization or in the taxing away of unearned increment. And while
the Australian Labour Party as an organization favors nationalization, a
large part of those who vote for this party do not, and its leaders have
felt that to have advocated nationalization hitherto would have meant
that they would have failed to gain control of the government. And in
proportion as the new land tax creates new farmers, the prospects will
be worse than they are to-day.

The existing land laws of New Zealand are extremely moderate steps in
the direction of nationalization. In 1907, after the best land had been
taken up, a system of 66-year leases was introduced, but only as a
voluntary alternative to purchase. After 1908 the annual purchases of
large estates were divided into small lots and leased for terms of 33
years, but this applies only to a relatively small amount of land. It
was only in 1907 that the graduated land tax began to be enforced in a
way automatically to break up the large estates as it had been expected
to do, and it was only in 1910 that the new and more heavily graduated
scale went into effect. And finally it was only in 1907 that large
landowners were forbidden to purchase, even indirectly, government land.
It has taken all these years even to discourage large estates
effectively, to say nothing of nationalization.

"Some writers have predicted that the appetite for reform by
taxation will grow, and that the taxation will be increased and the
exemptions diminished until all the rent will be taken and the land
practically confiscated, according to the proposals of Henry
George. But the landless man, when he becomes a landholder, ceases
to be a single taxer, and is strongly opposed to Socialism. The
land legislation of New Zealand, although apparently Socialistic,
is producing results directly opposed to Socialism by converting a
lot of dissatisfied people into stanch upholders of private
ownership of land and other forms of private property. The small
farmers, then, are breaking away from their former allies, the
working people of the towns, who now find themselves in the
minority, but who are increasing in numbers and who will demand,
sooner or later, a large share in the product of industry as the
price of loyalty to the capitalistic system."[81]

Without land nationalization the process of nationalizing industry
cannot be expected to proceed faster than it pays for itself--for we
cannot reckon as part of the national profits the increased land values
national enterprises bring about. Nor will capitalist collectivism at
this stage proceed even this fast. Not only do the small taxpayers
oppose the government going into debt, but as taxpayers they are
responsible for all deficiencies, and they want only such governmental
enterprises as both produce a surplus and a sufficient one to pay the
deficits of the nonproductive departments of government. To-day only
about one fifth of the taxpayers pay either land or inheritance taxes.
But the increasing military expenditures and the greater difficulty of
securing large sums by indirect taxation will increase this proportion.
It is likely, then, that State enterprises which, under private
capitalism, were used recklessly as aids to land speculation will now be
required, as in Germany and other continental countries, to produce a
surplus to relieve taxpayers. Private capitalism used the State for
promoting the private interests of its directors, State capitalism uses
it to produce profits for its shareholders, the small farmers, as
taxpayers, or in the form of profits distributed among them as
consumers. Only as the government begins to take a considerable share of
that increased value in land which nearly every public undertaking
brings about, will _all_ wisely managed government enterprises produce
such profits.

The advance of "State Socialism," though it has several other aspects,
can be roughly measured by the number of government enterprises and
employees. The railways, telegraphs, and the few government-owned mines
of New Zealand, have been calculated to employ about one eighth of the
population, a greater proportion than in America or Great Britain, but
scarcely greater than in Germany or France--and not a very great stride
even towards "State Socialism." And it seems likely that the present
proportion in New Zealand will remain for some time where it is.
Government banking, steamships, bakeries, and the government monopoly of
the sale of liquor and tobacco might not prove immediately profitable,
and are less heard of than formerly.

Where "State Socialism" has proceeded such a little distance, the
material benefits it promises to labor (though in a lesser proportion
than to other classes) have not yet accrued. "It must be admitted,"
write Le Rossignol and Stewart, "that the benefits of land reform and
other Liberal legislation have accrued chiefly to the owners of land and
other forms of property, and the condition of the landless and
propertyless wage earners has not been much improved." Indeed, the
condition of the workers is little, if any, better than in America. Mr.
Clark writes: "The general welfare of the working classes in Australasia
does not differ widely from that in the United States. The hours of work
are fewer in most occupations, but the wage per hour is less than in
America. The cost of living is about the same in both countries. There
appears to be as much poverty in the cities of New Zealand as in the
cities of the same size in the United States, and as many people of
large wealth." It is no doubt true, as these writers say, that, of the
people classed as propertyless, "many are young, industrious, and
well-paid wage earners; who, if they have health and good luck may yet
acquire a competency" in this as in any other new country. Yet it is
only to those who "have saved something," _i.e._ to property holders,
that the State really lends a helping hand.

Even when New Zealand becomes an industrial country, the writers quoted
calculate that "it should be possible for the party of property to
attach to itself the more efficient among the working class, by giving
them high wages, short hours, pleasant conditions of labor,
opportunities for promotion, a chance to acquire property, insurance
benefits, and _greater_ advantages of every kind than they could gain
under any form of Socialism. If this can be done, the Socialists will be
in a hopeless minority."

Here we have in a few words the universal labor policy of "State
Socialism." Labor reforms are to be given to the working class first, to
encourage in them as long as possible the hope to rise; second, when
this is no longer effective, to make the upper layers contented, and
finally to "increase industrial efficiency," as these same writers
say--but at no time to put the workers on a level with the
property-owning classes.

Indeed, it is impossible to do more on a national scale, as these
writers point out, for both capital and labor are international.

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Keywords: benefits, capitalism, policy, system, themselves, reform, cannot, taxation, increased, possible
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