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It is
conducting the agitation in language which in Germany is
customarily used only by a 'red revolutionist.' If the German
Junker (landlord conservative) were to read these speeches, he
would swear that they were delivered by the Social Democrats of the
reddest dye, so ferociously do they contrast between the rich and
the poor. They appeal to the passion of the people; they exploit
social distinctions in the manner best calculated to fire popular
anger against the Lords.

"In the heart of battle the Liberals are employing language which
at other times they would have considered twice. Their words will
some day be assuredly turned against them, when more than the mere
Budget or the existence of the Lords is at stake. When the
Liberals, allied with the conservative enemy of to-day, are
fighting the working classes, the Socialists will recall this
language as proof that the Liberals themselves recognize the
injustice of the existing order.

"Mr. Lloyd George made such a speech at Newcastle that the seeds he
is planting may first bring forth Liberal fruit, but there can be
no doubt that Socialism will eventually reap the harvest. His
arguments must arouse the workingmen, and when they have accustomed
themselves to look at things from this standpoint it is certain
that once standing before the safes of the industrial capitalists
they will never close their eyes."

It is perhaps true that the Socialists will at some future day reap the
harvest from Mr. Lloyd George's and Mr. Churchill's campaigns, though a
careful analysis of the expressions of these statesmen will show that
they have said nothing and done nothing in contradiction to their
State-capitalistic or "State Socialist" standpoint.

There is no doubt that the principle of the new taxes and the new
expenditure these statesmen are introducing is radical, and that it
marks a great stride towards a collectivist form of capitalism. Let us
assume that development continues along the lines of their present
policies. In a very few years the increased expenditure on social reform
will be greater than the increased expenditure on army and navy, and the
increase of direct and graduated taxes that fall on the upper classes
will be greater than that of the indirect taxes that fall on the masses.
We will assume even that military expenditure and indirect taxes on
articles the working people consume will begin some day to decrease,
while graduated taxes directed against the very wealthy and social
reform expenditures rise until they quite overshadow them. There is
every reason to believe that the social reformers of the British and
other governments hope for such an outcome and expect it. This would be
in no way inconsistent with their policy of subordinating everything, to
use one of their expressions, to "that trade and commerce which
constitutes the source of our wealth."

For the collectivist expenditures, intended to increase the national
product through governmental enterprises for the promotion of industry,
and for raising the industrial efficiency of the workers, would be
introduced gradually, and would soon be accompanied by results which
would show that they paid financially. And finally, even if railways and
monopolies were nationalized and their profits as well as _all_ the
future rise in land value went to the State to be used for these
purposes, as Mr. Churchill hopes, and even if a method could be found by
which a large part of the income of the idle rich would be confiscated
without touching the active capital of the merchant and manufacturer,
the position of the latter classes, through this policy, might become
still more superior relatively to that of the masses than it is at
present. The industrial capitalists might even control a larger share of
the national income and exercise a still more powerful influence over
the State than they do to-day.

The classes that the more or less collectivist budgets of 1910 and 1911
actually do favor, those whose economic and political power they
actually do increase, are the small and middle-sized capitalists and
even the larger capitalists other than landlords and monopolists. The
great mass of income taxpayers, business men, farmers, and the
professional classes with incomes from about £200 to £3000 ($1000 to
$15,000) are given every encouragement, while those with somewhat larger
incomes are only slightly discriminated against on the surface, in the
incidence of the taxes, and not at all when we inquire into the ways in
which the taxes are being expended. Certainly nothing is being done that
will "appreciably affect the status or style of living of any class in
the United Kingdom," or that will check materially the enormous rise of
this "upper middle" class both in wealth and numbers--for the income tax
payers have doubled their income in a little more than a decade, until
it has reached the total of more than a billion pounds a year. And
surely no tendency could be more diametrically opposed to a Socialism
whose purpose it is to improve the _relative_ position of the "lower
middle" and working classes.

While the new reform programs of the various parties are in general
agreement in all countries, in that they are all collectivist, and favor
as a rule the same social classes, there is much controversy as to
names, whether they shall be called Socialistic or merely radical or
progressive. The question is really immaterial.

"Capital, divested of its perversions, would be natural Socialism,"
says one of Henry George's most prominent disciples.[26] Whether the
proposed reforming is done with a purified and strengthened capitalism
in view, or in the name of "natural Socialism" or "State Socialism," the
program itself is in every practical aspect the same.

If a contrast formerly appeared to exist between "Individualist" and
"State Socialist" reformers, it was never more than a contrast in
theory, quickly dispelled when the time for action arrived. The
individualist radical would have the State do as little as possible, but
still is compelled to resort to an increase of its powers at every turn;
the "State Socialist" would have the State do as much as practicable,
but would still retain State action within the rigid limits imposed by
the need of gaining capitalist support and the desire for immediate
political success. In economic policy the Individualist is for checking
the excess of monopoly and special privilege in order to allow "equal
opportunity" or a free development to whatever competition or "natural
Capitalism" remains, while the "State Socialist" is more concerned with
protecting and promoting the natural checking of the excesses of
competitive capitalism and private property that comes with "natural
monopoly" and its regulation by government. The "State Socialist,"
however critical he is towards competition, recognizes that the first
practical possibility of putting an end to its excesses comes when
monopoly is already established, and when it is relatively easy for the
State to step in to nationalize or municipalize; the Individualist
reformer who wishes to preserve competition where practicable, at the
same time recognizes that it is impossible to do so where monopolies
have become firmly rooted in certain industries, and he also at this
point proposes nationalization, municipalization, or thoroughgoing
governmental control.

Henry George himself recognizes that "State Socialism," which he called
simply "Socialism," and the "natural Capitalism" he advocated, far from
being contradictory, were complementary and interdependent. Mr. Louis
Post says:--

"Even in the economic chapters of 'Progress and Poverty' its author
saw the possibility of society's approaching the 'ideal of
Jeffersonian Democracy, the promised land of Herbert Spencer, the
abolition of government. But of government only as a directing and
repressive power.' At the same time and in the same degree of
approach, he regarded it as possible for society also to realize
the dream of Socialism."[27]

The following passage leaves no doubt that Mr. Post is correct, and at
the same time shows in the clearest way how the two policies of reform
were interwoven in Henry George's mind:--

"Government could take up itself the transmission of messages by
telegraph, as well as by mail, of building and operating railroads,
as well as of the opening and maintaining common roads. With the
present functions so simplified and reduced, functions such as
these could be assumed without danger or strain, and would be under
the supervision of public attention, which is now distracted. There
would be a great and increasing surplus revenue from the taxation
of land values for material progress, which would go on with great
accelerated rapidity, would tend constantly to increase rent. This
revenue arising from the common property would be applied to the
common benefit, as were the revenues of Sparta. We might not
establish public tables--they would be unnecessary, but we could
establish public baths, museums, libraries, gardens, lecture rooms,
music and dancing halls, theaters, universities, technical schools,
shooting galleries, playgrounds, gymnasiums, etc. Heat, light, and
motive power, as well as water, might be conducted through our
streets at public expense; our roads be lined with fruit trees;
discoveries and inventors rewarded, scientific investigation
supported; in a thousand ways the public revenues made to foster
efforts for the public benefit. _We should reach the ideal of the
Socialist_, but not through government repression. _Government
would change its character, and would become the administration of
a great coöperative society. It would become merely the agency by
which the common property was administered for the common
benefit_." (Italics mine.)[28]

But the "State Socialist" and the Individualist reformer, who are often
combined in one person, as in the case of Henry George, differ sharply
from Socialists of the Socialist movement in aiming at a society, which,
however widely government action is to be extended, is after all to
remain a society of small capitalists.

Professor Edward A.

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Keywords: monopoly, competition, working, socialists, policy, action, george's, nothing, radical, industrial
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