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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. Churchill, "is to be laid upon certain
forms of wealth which are clearly social in their origin and have not at
any point been derived from a useful or productive process on the part
of their possessors."[18] And since all income "derived from dividends,
rent, or interest," is, according to Mr. Churchill, unearned increment,
it is evident that nearly every business, all being beneficiaries, ought
to share the burden of the new reforms.[19] At the same time he hastens
to reassure his wealthy supporters, especially among merchants and
shippers, on grounds explained below by Mr. Lloyd George that the new
taxes will not rise faster than the new profits they will bring in, that
they "will not appreciably affect, have not appreciably affected, the
comfort, the status, or even the style of living of any class in the
United Kingdom."[20]

Mr. Lloyd George in proposing the so-called Socialistic Budget of 1910
reminded the representatives of the propertied interests [he might have
added "in proportion to their wealth"] that the State, in which they all
owned a share, should not be looked upon so narrowly as a capitalistic
enterprise. They could afford to allow the State to wait longer for its

"A State can and ought to take a longer and a wider view of its
investments," said Mr. Lloyd George, "than individuals. The
resettlement of deserted and impoverished parts of its own
territories may not bring to its coffers a direct return which
would reimburse it fully for its expenditure; but the indirect
enrichment of its resources more than compensate it for any
apparent and immediate loss. The individual can rarely afford to
wait; a State can; the individual must judge of the success of his
enterprise by the testimony given for it by his bank book; a State
keeps many ledgers, not all in ink, and when we wish to judge of
the advantage derived by a country from a costly experiment, we
must examine all those books before we venture to pronounce

"We want to do more in the way of developing the resources of our
own country....

"The State can help by instruction, by experiment, by
organization, by direction, and even, in certain cases which are
outside the legitimate sphere of individual enterprise, by
incurring direct responsibility. I doubt whether there is a great
industrial country in the world which spends less money on work
directly connected with the development of its resources than we
do. Take, if you like, and purely as an illustration, one industry
alone,--agriculture,--of all industries the most important for the
permanent well-being of any land. Examine the budgets of foreign
lands,--we have the advantage in other directions,--but examine and
compare them with our own, and Honorable Members will be rather
ashamed at the contrasts between the wise and lavish generosity of
countries much poorer than ours and the short-sighted and niggardly
parsimony with which we dole out small sums of money for the
encouragement of agriculture in our country....

"We are not getting out of the land anything like what it is
capable of endowing us with. Of the enormous quantity of
agricultural and dairy produce, and fruit, and the timber imported
into this country, a considerable portion could be raised on our
own lands."[21]

The proposed industrial advance is to be secured largely at the expense
of capital, but for its ultimate profit. The capitalists are to pay the
initial cost. Mr. Lloyd George is very careful to remind them that even
if the present income tax were doubled, five years of the phenomenal yet
steady growth of the income of the rich and well-to-do who pay this tax,
would leave them as well off as they were before. He proposes to leave
the total capital in private hands intact on the pretext that it is
needed as "an available reserve for national emergencies." And as an
evidence of this he refused to increase the existing rate of inheritance
tax levied against the very largest estates (15 per cent on estates of
more than 3,000,000). Though up to this point he graduated this tax
more steeply than before, and nothing could be more widely popular than
a special attack on such colossal estates, Mr. Lloyd George draws the
line at 15 per cent, on the ground that a large part of the income from
such estates goes into investments, and more confiscatory legislation
might seriously affect the normal increase of the capital and "the
available reserves of taxation" of the country.[22]

Mr. Lloyd George does not fail to guarantee to capital as a whole,
"honest capital," that it will suffer no loss from his reforms. "I am
not one of those who advocate confiscation," he said several years ago,
"and at any rate as far as I am concerned _honest_ capital, capital put
in honest industries for the development of the industry, the trade,
the commerce, of this country will have nothing to fear from any
proposal I shall ever be responsible for submitting to the Parliament of
this realm." (My italics.)[23]

Mr. Lloyd George is well justified, then, in ridiculing the idea that he
is waging war against industry or property or trying to destroy riches.
He not only disproves this accusation by pointing to the capitalist
character of his collectivist program, but boasts that the richest men
in the House of Commons are on the Liberal side, together with hundreds
of thousands of the men who are building up trade and business.

And the attitude of the Radicals of the present British government is
the same as that of capitalist collectivists elsewhere. However certain
vested interests may suffer, there is nowhere any tendency to weaken
capitalism as a whole. Capitalism is to be the chief beneficiary of the
new movement.

There are many differences of opinion, however, as to the _ultimate_
effect of the collectivist program. In Great Britain, which gives us our
best illustration, there are Liberals who claim that it is Socialistic
and others who deny that it has anything to do with Socialism;
Conservatives who accept part of the program, and others who reject the
whole as being Socialistic; Socialists, who claim that their ideas have
been incorporated in the last two Budgets, and other Socialists who deny
that either had anything in common with their principles.

While it is certain that the present policy of the British government is
by no means directed against the power or interests of the capitalist
class as a whole, and in no way resembles that of the Socialists, were
not Socialist arguments used to support the government's position, and
may not these lead towards a Socialist policy?

Certainly some of the principles laid down seem at first sight to have
been Socialistic enough. For example, when Mr. Churchill said that
incomes from dividends, rent, and interest are unearned, or when Mr.
Lloyd George cried out: "Who is responsible for the scheme of things
whereby one man is engaged through life in grinding labor to win a bare
and precarious subsistence for himself, and when, at the end of his
days, he claims at the hands of the community he served, a poor pension
of eight pence a day, he can only get it through a revolution, and
another man who does not toil receives every hour of the day, every
hour of the night, whilst he slumbers, more than his poor neighbor
receives in a whole year of toil? Where did the table of that law come
from? Whose fingers inscribed it?"[24]

Lord Rosebery has pointed to the extremely radical nature of Mr. Lloyd
George's arguments. The representatives of the Government had urged, he
said, that the land should be taxed without mercy:--

"(1) because its existence is not due to the owner;

"(2) because it is limited in quantity;

"(3) because it owes nothing of its value to anything the owner
does or spends;

"(4) because it is absolutely necessary for existence and

Lord Rosebery says, justly, that all these propositions except the last
apply to many other forms of property than land, as, for instance, to
government bonds, and that it certainly would be Socialism to attempt to
confiscate these by taxation.

Lord Rosebery's task would have become even easier later, when Mr. Lloyd
George enlarged his attack on the landlords definitely into an attack
against the idle upper classes, who with their dependents he reckoned at
two million persons. He accused this class of constituting an
intolerable burden on the community, said that its existence was the
symptom of the disease of society, and that only bold remedies could
help. The whole class of inactive capitalists he viewed as a load both
on the non-capitalist, wage-earning, salaried and professional classes,
and on the active capitalists. Mr. Lloyd George argues with his
capitalist supporters that capitalism will be all the stronger when
freed from its parasites. But Lord Rosebery could answer that the active
could no more be distinguished from the passive capitalists than
landowners from bondholders.

An article in the world's leading Socialist newspaper, _Vorwaerts_, of
Berlin, shows that many Socialists even regarded these speeches as

"The Radical wing of the British Liberals," it said, "is leading
the attack with ideal recklessness and lust of battle.

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Keywords: rosebery, existence, present, socialist, derived, capitalism, examine, before, resources, honest
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