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But it requires also that _all_
the industries and economic activities of the country should be
considered the business of the nation, that the industrial functions of
the government should be extended, and that, even from the business
point of view, the chief purpose of government should be to supervise
economic development.

To bring about the maximum of efficiency in production would require, in
Mr. Webb's opinion and that of the overwhelming majority of reformers
everywhere, a vast extension of government activities, including not
only the nationalization and municipalization of many industries and
services, but also that the individual workman or citizen be dealt with
as the chief business asset of the nation and that wholesale public
expenditures be entered into to develop his value. Mr. Webb does not
think that this policy is necessarily Socialistic, for, as he very
wisely remarks, "the necessary basis of society, whether the
superstructure be collectivist or individualist, is the same."

Mr. Wells in his "New Worlds for Old" also claims that the new policy of
having the State do everything that can promote industrial efficiency
(which, unlike Mr. Webb, he persists in calling Socialism) is to the
interest of the business man.

"And does the honest and capable business man stand to lose or gain
by the coming of such a Socialist government?" he asks. "I submit
that on the whole he stands to gain....

"Under Socialist government such as is quite possible in England at
the present time:--

"He will be restricted from methods of production and sale that are
socially mischievous.

"He will pay higher wages.

"He will pay a large proportion of his rent-rate outgoings to the
State and Municipality, and less to the landlord. Ultimately he
will pay it all to the State or Municipality, and as a voter help
to determine how it shall be spent, and the landlord will become a
government stockholder. Practically he will get his rent returned
to him in public service.

"He will speedily begin to get better-educated, better-fed, and
better-trained workers, so that he will get money value for the
higher wages he pays.

"He will get a regular, safe, cheap supply of power and material.
He will get cheaper and more efficient internal and external

"He will be under an organized scientific State, which will
naturally pursue a vigorous scientific collective policy in support
of the national trade.

"He will be less of an adventurer and more of a citizen."[13]

Mr. Churchill while denying any sympathy for Socialism, as both he and
the majority of Socialists understand it, frankly avows himself a
collectivist. "The whole tendency of civilization," he says, "is towards
the multiplication of the collective functions of society. The ever
growing complications of civilizations create for us new services which
have to be undertaken by the State, and create for us an expansion of
the existing services. There is a growing feeling, which I entirely
share, against allowing those services which are in the nature of
monopolies to pass into private hands. [Mr. Churchill has expressed the
regret that the railways are not in the hands of the State.] There is a
pretty steady determination, which I am convinced will become effective
in the present Parliament to intercept _all_ future unearned increment,
which may arise from the increase in the speculative value of the
land."[14] (Italics mine.)

Mr. Churchill's declared intention ultimately "to intercept _all_ future
unearned increment" of the land is certainly a tremendous step towards
collectivism, as it would ultimately involve the nationalization of
perhaps a third of the total wealth of society. With railways and
monopolies of all kinds also in government hands, a very large part of
the industrial capital of the country would be owned by the State, and,
though all agricultural capital, and therefore the larger part of the
total, remained in private hands, we are certainly justified in calling
such a state of society _capitalist collectivism_.

But not one of the elements of this collectivism is a novelty. Railroads
are owned by governments in most countries, and monopolies often are.
The partial appropriation of the "unearned increment" is by no means
new, since a similar policy is being adopted in Germany at the present
moment, and is favored not by the radicals alone, but by the most
conservative forces in the country; namely, the party of landed Prussian
nobility. Count Posadovsky, a former minister, has written a pamphlet in
which he urges that the State should buy up the land in and about the
cities, and also that it should fix a definite limit beyond which land
values must not rise. Nearly all the chief cities of Prussia, more than
a hundred, are enforcing such a tax in a moderate form, and the
conservatives in the Reichstag proposed that the national government
should be given a right to tax in the same field. Their bill was
enacted, and, in the second half of 1911, the German government, it was
estimated, would raise over $3,000,000 by this tax, and in 1912 it is
expected to give $5,000,000. This tax, which is collected when land
changes hands by sale or exchanges, rises gradually to 30 per cent when
the increase has been 290 per cent or more. Of course this scale is
likely to be still further raised and to be made more steep as the tax
becomes more and more popular.

Mr. Churchill's defense of the new policy of the British government is
as significant as the new laws it has enacted:--

"You may say that unearned increment of the land," he says, "is on
all-fours with the profit gathered by one of those American
speculators who engineer a corner in corn, or meat, or cotton, or
some other vital commodity, and that _the unearned increment in
land is reaped by the land monopolist in exact proportion, not to
the service but to the disservice done_. It is monopoly which is
the keynote; and where monopoly prevails, the greater the injury to
society the greater the reward of the monopolist will be....

"Every form of enterprise, every step in material progress, is only
undertaken after the land monopolist has skimmed the cream off for
himself, and every where to-day the man, or the public body, who
wishes to put land to its highest use is forced to pay a
preliminary fine in land values to the man who is putting it to an
inferior use, and in some cases to no use at all.... _If there is a
rise in wages, rents are able to move forward because the workers
can afford to pay a little more_. If the opening of a new railway
or a new tramway, or the institution of an improved service of
workmen's trains, or the lowering of fares, or a new invention, or
any other public convenience affords a benefit to the workers in
any particular district, it becomes easier for them to live, and
therefore the landlord and the ground landlord, one on top of the
other, are able to charge them more for the privilege of living
there." (Italics mine.)[15]

But we cannot believe that the government of Great Britain, which draws
so much of its support from the wealthy free trade merchants and
manufacturers has been persuaded to adopt this new principle so much by
the argument that a land rent weighs on the working classes, though it
is true that the manufacturer may have to pay for this in higher _money_
wages, as it has by that other argument of Mr. Churchill's that it
weighs directly on business.

"The manufacturer proposing to start a new industry," he says,
"proposing to erect a great factory offering employment to
thousands of hands, is made to pay such a price for his land that
the purchase price hangs around the neck of his whole business,
hampering his competitive power in every market, clogging far more
than any foreign tariff in his export competition; and the land
values strike down through the _profits of the manufacturer_ on to
the wages of the workman. The railway company wishing to build a
new line finds that the price of land which yesterday was only
rated at its agricultural value has risen to a prohibitive figure
the moment it was known that the new line was projected; and either
the railway is not built, or, if it is, it is built only on terms
which largely transfer to the landowner _the profits which are due
to shareholders_ and the privileges which should have accrued to
the traveling public." (My italics.)[16]

No doubt Mr. Churchill's failure to mention shippers was inadvertent.

It was a practical application of these business principles and chiefly
in the interest of the employers, manufacturers, investors, and
shippers, that the State decided, as a first step, to take 20 per cent
of all the increase in land values from the present date and to levy an
annual tax of one fifth of one per cent on all land held for
speculation, _i.e._ used neither for agricultural nor for industrial nor
building purposes.

The collectivist policy, that governments should undertake to reorganize
industry and to develop the industrial efficiency of the population, is
a relatively new one, however, and where non-Socialist Liberals and
Radicals are adopting it, they do so as a rule with apologies. For while
such reforms can be considered as investments which in the long run
repay not only the community as a whole, but also the business
interests, they involve a considerable initial cost, even beyond what
can be raised by the gradual expropriation of city land rents, and the
question at once arises as to who is to pay the rest of the bill. The
supporter of the new reforms answers that the business interests should
do so, since the development of industry, which is the object of this
expenditure, is more profitable to them than to other classes. While Mr.
Churchill declares that Liberalism attacks landlordism and monopoly
only, and not capital itself, as Socialism does, he is at great pains to
show that the cost of the elaborate program of social reform is borne
not by monopolist alone, but by that larger section of the business
interests vaguely known as those possessing "Special Privileges." In
distributing the new taxes in the House of Commons, the question to be
asked of each class of wealth is, he says, "By what process was it got?"
and a distinction is to be made, not between monopoly and competitive
business, but "between wealth which is the fruit of productive
enterprise and industry or of individual skill, and wealth which
represents the capture by individuals of socially created values."[17]

"A special burden," says Mr.

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Keywords: collectivism, manufacturer, efficiency, collectivist, railway, country, increase, ultimately, italics, capital
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