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What would have been comparative luxury a hundred years ago it
is our duty to view as nothing less than a degrading and life-destroying
poverty to-day.

Opportunity is not becoming equal. The tendency is in the opposite
direction, and not all the reforms of "State Socialism" promise to
counteract it. The _citizen owes it to society_ to ask of every
proposed program of change, "Will it, within a reasonable period, bring
equality of opportunity?" To rest satisfied with less--a so-called
tendency of certain reforms in the right _direction_ may be wholly
illusory--is not only to abandon one's rights and those of one's
children, but to rob society of the only possible assurance of the
maximum of progress.

FOOTNOTES:

[83] Henry George, "Progress and Poverty," Vol. II, p. 515.

[84] John Mitchell, "Organized Labor" (Preface).

[85] John A. Hobson, "The Crisis of Liberalism," p. 100.

[86] For this and later quotations from Dr. Eliot in this chapter, see
his little book entitled "More Money for the Public Schools."

[87] See article by Dr. Eliot in the _School Review_, April, 1909.

[88] "Knowledge and Education," the _Independent_, 1910.

[89] Dexter, "History of Education in the United States," p. 173.




CHAPTER VIII

THE "FIRST STEP" TOWARDS SOCIALISM


"State Socialism" as I have described it will doubtless continue to be
the guiding policy of governments during a large part, if not all, of
the present generation. Capitalism, in this new collectivist form, must
bring about extremely deep-seated and far-reaching changes in society.
And every step that it takes in the nationalization of industry and the
appropriation of land rent would also be a step in Socialism, _provided_
the rents and profits so turned into the coffers of the State were not
used entirely for the benefit either of industry or of the community as
a whole, as it is now constituted, but were reserved in part _for the
special benefit of the less wealthy, less educated, and less
advantageously placed, so as gradually to equalize income, influence,
and opportunity_.

But what, as matter of fact, are the ways in which the new revenues are
likely to be used before the Socialists are either actually or
practically in control of the government? First of all, they will be
used for the further development of industry itself and of schemes which
aid industry, as by affording cheaper credit, cheaper transportation,
cheaper lumber, cheaper coal, etc., which will chiefly benefit the
manufacturers, since all these raw materials and services are so much
more largely used in industry than in private consumption.

Secondly, the new sources of government revenue will be used to relieve
certain older forms of taxation. The very moderately graduated income
and inheritance taxes which are now common, small capitalists have
tolerated principally on the ground that the State is in absolute need
of them for essential expenses. We may soon expect a period when the
present rapid expansion of this form of taxation as well as other direct
taxes on industry, building, corporations, etc., will be checked
somewhat by the new revenues obtained from the profits of government
enterprises and the taxation of ground values. Indirect taxation of the
consuming public in general, through tariffs and internal revenue taxes,
will also be materially lightened. As soon as new and larger sources of
income are created, the cry of the consumers for relief will be louder
than ever, and since a large part of consumption is that of the
capitalists in manufacture, the cry will be heard. This will mean lower
prices. But in the long run salaries and wages accommodate themselves to
prices, so that this reform, beneficial as it may be, cannot be accepted
as meaning, for the masses, more than a merely temporary relief. A third
form of tax reduction would be the special exemption of the poorer
classes from even the smallest direct taxation. But as employers and
wage boards, in fixing wages, will take this reduction into account, as
well as the lower prices and rents, such exemptions will effect no great
or lasting change in the division of the national income between
capitalists and receivers of salaries and wages.

A third way in which the new and vastly increased incomes of the
national and local governments can be expended is the communistic way,
as in developing commercial and technical education, in protecting the
public health, in building model tenements, in decreasing the cost of
traveling for health or business, and in promoting all measures that are
likely to increase industrial efficiency and profits without too great
cost.

A fourth way in which the new revenue may be expended, before the
Socialists are in actual or practical control, would be in somewhat
increasing the wages and somewhat shortening the hours of the State and
municipal employees, who will soon constitute a very large proportion of
the community. Here again it is impossible to expect any but a Socialist
government to go very far. As I have shown, it is to be questioned
whether any capitalistic administration, however advanced, would
increase real wages (wages measured by their purchasing power), except
in so far as the higher wages will result in a corresponding or greater
increase in efficiency, and so in the profits made from labor. And the
same law applies to most other governmental (or private) expenditures on
behalf of labor, whether in shortened hours, insurance, improved
conditions, or any other form.

The very essence of capitalist collectivism is that the share of the
total profits which goes to the ruling class should not be decreased,
and if possible should be augmented. In spite of material improvements
the economic gulf between the classes, during the period it dominates,
will either remain as it is, or become wider and deeper than before. On
the ground of the health and ultimate working efficiency of the present
and future generation, hours may be considerably shortened, and the
labor of women and children considerably curtailed. Insurance against
death, old age, sickness, and accident will doubtless be taken over by
the government. Mothers who are unable to take care of their children
will probably be pensioned, as now proposed in France, and many children
will be publicly fed in school, as in a number of the British and
Continental places. The most complete code of labor legislation is
practically assured; for, as government ownership extends, the State
will become to some extent the model employer.

A quarter of a century ago, especially in Great Britain and the United
States, but also in other countries, the method of allaying discontent
was to distract public attention from politics altogether by stimulating
the chase after private wealth. But as private wealth is more and more
difficult to attain, this policy is rapidly replaced by the very
opposite tactics, to keep the people absorbed in the political chase
after the material benefits of economic reform. For this purpose every
effort is being used to stimulate political interest, to popularize the
measures of the new State capitalism, to foster public movements in
their behalf, and finally to grant the reforms, not as a new form of
capitalism, but as "concessions to public opinion." At present it is
only the most powerful of the large capitalists and the most radical of
the small that have fully adapted themselves to the new policies. But
this will cause no serious delay, for among policies, as elsewhere, the
fittest are surely destined to survive.

Ten years ago it would have been held as highly improbable that we would
enter into such a collectivist period in half a century. Already a large
part of the present generation expect to see it in their lifetime. And
the constantly accelerated developments of recent years justify the
belief of many that we may find ourselves far advanced in "State
Socialism" before another decade has passed.

The question that must now be answered by the statesman as opposed to
the mere politician, by the publicist as opposed to the mere journalist,
is, not how soon the program of "State Socialism" will be put into
effect, but what is going to be the attitude of the masses towards it. A
movement exists that is already expressing and organizing their
discontent with capitalism in whatever form. It promises to fill this
function still more fully and vigorously in proportion as collectivist
capitalism develops. I refer to the international revolutionary movement
that finds its chief expression in the federated Socialist parties. The
majority of the best-known spokesmen of this movement agree that social
reform is advancing; yet most of them say, with Kautsky, that control of
the capitalists over industry and government is advancing even more
rapidly, partly by means of these very reforms, so that the
_Machtverhaeltnisse_, or distribution of political and economic power
between the various social classes, is even becoming less favorable to
the masses than it was before. The one thing they feel is that no such
capitalist society will ever be willing to ameliorate the condition of
the non-capitalists to such a degree that the latter will get an
increasing _proportion_ of the products of industry or of the benefits
of legislation, or an increased influence over government. The
capitalists will never do anything to disturb radically the existing
balance of power.

While Socialists have not always conceded that the capitalists will
themselves undertake, without compulsion, large measures of political
democracy and social reform,--even of the capitalistic variety,--nearly
all of the most influential are now coming to base their whole policy on
this now very evident tendency, and some have done so for many years
past. For instance, it has been clear to many from the time of Karl Marx
that it would be necessary for capitalist society itself to nationalize
or municipalize businesses that become monopolized, without any
reference to Socialism or the Socialists.

"These private monopolies have become unbearable," says Kautsky, "not
simply for the wage workers, but for all classes of society who do not
share in their ownership," and he adds that it is only the weakness of
the bourgeois (the smaller capitalist) as opposed to capital (the large
capitalist) that hinders him from taking effective action.



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