p. 61My Dear Mr. Blatchford,
I may repeat myself a little in this letter. You have set me the example. I suppose you think it wise to hammer away at some points, so that they may go home, like the prophets of old, with their “precept upon precept, line upon line, here a little, and there a little.” Well, I hope I may not weary you in replying accordingly.
You have a deal to say against cheapness in your twelfth letter. You find it hard work to disprove that it is a benefit. The universal instinct of mankind is against you. The contention of the political economists commends itself to general common-sense, when they say that a competition that keeps down prices must be a benefit to all classes of the community, since all classes are better off in paying low prices than in paying high prices. Your great complaint is that cheap goods mean cheap labour, and therefore low wages. Your great remedy is to make all labour dear: to pay high wages instead of low wages.
Mr. Blatchford, we would all like to see wages raised: but there might not be in it—there could not be in it—the advantages you expect. If you make labour dear, you make everything else dear as well, for labour is the principal cost of everything. And if you make everything else dear, where is the benefit of raising the wages? If 40/- of doubled wages would go no further than 20/- at the present rate, because of the doubling of the price of everything, where would be the benefit of doubling the wages? Working men get more money in the United States than they do in England; but they are no better off, because things that are cheap in England are dear in the States.
Raising wages by force of law would not work beneficially unless you could control other things that you cannot control. p. 62 Things are obliged to be left to rectify themselves, which they do in the main. Competition has many good points: its bad ones work to a level. A man can only compete so far. He cannot go below the point where profit ceases. If he does, he himself will cease in course of time. As a business man he must stop, and prices return to a normal figure. Things right themselves in the long run, breaking some bones meanwhile. It is a rough process, but no other is practicable.
They recognise this in Germany, where the State has been invited to do the buying and selling of corn, so as to keep prices up for the benefit of agriculture. The Emperor, though anxious to befriend the farmers, sees that while keeping up the price of corn, he would keep down the buying power of the people, and work mischief in other directions.
You see the difficulty yourself; you say, “It is no use the workers forcing up their wages unless they can at the same time prevent the landlord and the capitalist from raising rent and interest.” And you might have added, “and unless they can prevent tradesmen raising the price of goods.” Well, and how are you going to prevent this? Your plan is a monopoly. You look at the working of the salt monopoly, or of the oil monopoly, and you say, “A monopoly can raise prices.” Yes, Mr. Blatchford, but you do not admire monopolies. You have to admit they do not work well all round. While they raise the price of the commodity they have to sell, they also raise their own profits. They do not raise wages, as you have to lament. Why is this? It is because men are governed more by self-interest than by good-will to their neighbours. You cannot deny this. This being the case, how can you make sure that a Socialist monopoly would work for the benefit of the people? Will there be no self-interest in a Socialist Republic? Why, it is the one constant present element in all human combinations.
What you say you want is the thing you cannot get. You seem to be conscious of the uncertainty in the matter, that though a monopoly of capitalists will not serve a useful purpose, it may be possible to find some kind of monopoly that will. This is putting it very gingerly. The ground cannot be very solid when you think it wise to tread so very gently. No: it is not solid at all. You are walking over a bog with a very thin sun-baked crust which is certain to break through and let you in.
p. 63 You say you “want a monopoly which will raise wages and keep down rent and interest:” Where are you going to get such a monopoly? “Why, a State monopoly, of course,” you answer. But, Mr. Blatchford, a State monopoly would be worked by State monopolists: and do you imagine that self-interest would have no part in their determinations? If there are to be rents, if there is going to be interest—which of course you cannot dispense with, even in a Socialist state,—it must be to somebody’s interest that these should be high rather than low: and do you think you could succeed in excluding their interest from the working of the machinery?
Supposing you got officials of the most incorruptible integrity, how are they going to keep down rent and interest while raising the price of labour? Rent, interest, and wages, are all like separate branches of the same stream: they will find the same level. You could not prevent it. Consider. If you raise the price of labour, you increase the cost of building, and therefore the rent of houses. The same increase would increase the value of money, and therefore the rate of interest.
You could not artificially regulate these things unless you had an irresistible despotism, with infallibility. Socialism would give us despotism with fallibility, which would be worse than the present system of fallibility with freedom.
In carrying out your argument, you make a false distinction between producers and non-producers. You limit the notion of production to the actual labour of the hands. I have spoken of this before, but you bring it up again. You suppose the case of two cultivators on an estate, keeping both themselves and a third person,—the landlord,—with the corn they raise, and you credit them with the entire process of production; whereas production requires other things besides the labour of the hands. It requires land and skill. Labour could not produce corn without these. Now, if a man supply land and skill, he contributes to the production of the corn, though he perform no labour in the field. A man of your keen penetration ought to see this.
It is no answer to say the landlord did not make the land. He has control of it, as somebody must in any case. You would give somebody else control, may be: but the fact is for the time being, the landlord has control. And practical men must look at practical “facts,” and not go moon-gazing. Having control, and using that p. 64 control to supply the land and the direction needful for raising corn, he is as much one of the producers as the cultivators who do the ploughing and harrowing.
Even the actual cultivator of the soil cannot use his hands profitably without the knowledge in his brain to guide his hands. Is not that knowledge as much a “factor” in the process of his labour as the contraction of the muscles that lift the spade? And now suppose he has not the necessary knowledge. Suppose the man who handles the spade does not know how to use it so as to produce food; and another man does know, and supplies the knowledge to him: does not the second man contribute as much to the production of the food as the first? Undoubtedly. It cannot be denied. Mind and muscle have equal parts in the process.
The principle would apply in various other ways. The ideas imparted by the second man relate not only to the depth of the digging, and the degree of closeness with which the planting was to be done, but might extend to the easiest way of doing the digging. He might invent a machine to do the work, and provide the money to make the machine: also possibly he might pay the wages of the labourers while the crop was growing, and when, if somebody did not pay the wages, the labourer would be dead before the crop was ready.
All these are ingredients in the process of production. And to call the man who contributes them a “non-producer” or “an idle capitalist” is not to speak with the sense or the candour that we seem justified in expecting from a pen that can write such a book as Merrie England. It is the kind of logic you would expect from a platform ranter and not from the scientific student of the calm facts of political economy. The contributor of any part of the process of production is entitled to his share in the result, as shown by your own delightful illustration of the monkeys.
When, therefore, you talk of a State monopoly ensuring to the worker the enjoyment of the wealth he produces, you talk inconsistently with the elementary facts of the case: that is if you mean, as I suspect you mean, securing all the wealth to the men who labour with their hands, and giving none to those who supply brains. But even if you didn’t mean this: but meant only securing to the labouring man his share of the wealth he produces, your p. 65 language would not be much more to the point. How is a monopolist government to decide in the first place—not to talk of “securing”—what is a working man’s share of the wealth he helps to produce? You have admirably illustrated the difficulty in the case of your own cleverly-written book. The same difficulty besets every form of human industry. No man can say how much he is indebted to neighbours and ancestors for the particular gift by which he is able to create wealth. His indebtedness could not be assessed upon ordinary principles. It would have to be done by arbitrary authority.
Pause a little, Mr. Blatchford. The fallacy that awards all the results of production to those who only use their hands, will be very pleasing to working men: but it may lead them into a quagmire of want and misery from which all the fine writing in the world won’t so easily bring them out. I am glad to see you don’t propose any attempt to carry your ideas into effect by force. I am glad you are willing to wait the conversion of Parliament and the public. I hope you and all your sympathizers will long remain of this mind. It will meanwhile be the duty of the friends of order and religion to try to the utmost of their powers to hinder public conversion to Socialism. I am afraid that even if you converted the public to Socialism, and the public elected a Socialist Parliament, we should not have a Socialist Republic without a deal of trouble. The interests involved are so vast and the passions engaged are so deep that it is not likely the minority would peaceably acquiesce. It is much more likely we should have civil war, and money you know goes a long way in war. I fancy things won’t come to this. I fancy the national conversion to Socialism is a much longer way off than you imagine. Let us hope the delay will be long enough to prevent such a calamity by allowing wiser thoughts to get the upper hand.
Your perhaps somewhat stupid and, therefore, hesitating friend,
JOHN SMITH.