8thly. It robs society by innumerable for the daily accidents of our commercial system, political events, and any kind of disturbance, must usher in a day when the trader, having incurred obligations beyond his means, is no longer able to meet them; his failure, whether fraudulent or not, must be a severe blow to his creditors. The bankruptcy of some entails that of others, so that bankruptcies follow one upon another, causing widespread ruin. And it is always the producer and the consumer who suffer; for commerce, considered as a whole, does not produce wealth, and invests very little in proportion to the wealth which passes through its hands. How many are the manufactures crushed by these blows! how many fertile sources of wealth dried up by these devices, with all their disastrous consequences!
7thly. It robs society by shameless and unlimited —usury absolutely appalling. The trader carries on operations with fictitious capital, much higher in amount that his real capital. A trader with a capital of twelve hundred pounds will carry on operations, by means of bills and credit, on a scale of four, eight, or twelve thousand pounds. Thus he draws from capital usurious interest, out of all proportion with the capital he actually owns.
The produce of the world could not attain anything approaching to its present amount, nor support anything approaching to the present number of its inhabitants, except upon two conditions: abundant and costly machinery, buildings, and other instruments of production; and the power of undertaking long operations and waiting a considerable time for their fruits. In other words, there must be a large accumulation of capital, both fixed in the implements and buildings, and circulating, that is, employed in maintaining the labourers and their families during the time which elapses before the productive operations are completed and the products come in. This necessity depends on physical laws, and is inherent in the condition of human life; but these requisites of production, the capital, fixed and circulating, of the country (to which has to be added the land, and all that is contained in it), may either be the collective property of those who use it, or may belong to individuals; and the question is, which of these arrangements is most conducive to human happiness. What is characteristic of Socialism is the joint ownership by all the members of the community of the instruments and means of production; which carries with it the consequence that the division of the produce among the body of owners must be a public act, performed according to rules laid down by the community. Socialism by no means excludes private ownership of articles of consumption; the exclusive right of each to his or her share of the produce when received, either to enjoy, to give, or to exchange it. The land, for example, might be wholly the property of the community for agricultural and other productive purposes, and might be cultivated on their joint account, and yet the dwelling assigned to each individual or family as part of their remuneration might be as exclusively theirs, while they continued to fulfil their share of the common labours, as any one’s house now is; and not the dwelling only, but any ornamental ground which the circumstances of the association allowed to be attached to the house for purposes of enjoyment. The distinctive feature of Socialism is not that all things are in common, but that production is only carried on upon the common account, and that the instruments of production are held as common property. The then of Socialism, on the scale of Mr. Owen’s or M. Fourier’s villages, admits of no dispute. The attempt to manage the whole production of a nation by one central organization is a totally different matter; but a mixed agricultural and manufacturing association of from two thousand to four thousand inhabitants under any tolerable circumstances of soil and climate would be easier to manage than many a joint stock company. The question to be considered is, whether this joint management is likely to be as efficient and successful as the managements of private industry by private capital. And this question has to be considered in a double aspect; the efficiency of the directing mind, or minds, and that of the simple workpeople. And in order to state this question in its simplest form, we will suppose the form of Socialism to be simple Communism, equal division of the produce among all the sharers, or, according to M. Louis Blanc’s still higher standard of justice, apportionment of it according to difference of need, but without making any difference of reward according to the nature of the duty nor according to the supposed merits or services of the individual. There are other forms of Socialism, particularly Fourierism, which do, on considerations of justice or expediency, allow differences of remuneration for different kinds or degrees of service to the community; but the consideration of these may be for the present postponed.
The difference between the motive powers in the economy of society under private property and under Communism would be greatest in the case of the directing minds. Under the present system, the direction being entirely in the hands of the person or persons who own (or are personally responsible for) the capital, the whole benefit of the difference between the best administration and the worst under which the business can continue to be carried on accrues to the person or persons who control the administration: they reap the whole profit of good management except so far as their self-interest or liberality induce them to share it with their subordinates; and they suffer the whole detriment of mismanagement except so far as this may cripple their subsequent power of employing labour. This strong personal motive to do their very best and utmost for the efficiency and economy of the operations, would not exist under Communism; as the managers would only receive out of the produce the same equal dividend as the other members of the association. What would remain would be the interest common to all in so managing affairs as to make the dividend as large as possible; the incentives of public spirit, of conscience, and of the honour and credit of the managers. The force of these motives, especially when combined, is great. But it varies greatly in different persons, and is much greater for some purposes than for others. The verdict of experience, in the imperfect degree of moral cultivation which mankind have yet reached, is that the motive of conscience and that of credit and reputation, even when they are of some strength, are, in the majority of cases, much stronger as restraining than as impelling forces—are more to be depended on for preventing wrong, than for calling forth the fullest energies in the pursuit of ordinary occupations. In the case of most men the only inducement which has been found sufficiently constant and unflagging to overcome the ever-present influence of indolence and love of ease, and induce men to apply themselves unrelaxingly to work for the most part in itself dull and unexciting, is the prospect of bettering their own economic condition and that of their family; and the closer the connection of every increase of exertion with a corresponding increase of its fruits, the more powerful is this motive. To suppose the contrary would be to imply that with men as they now are, duty and honour are more powerful principles of action than personal interest, not solely as to special acts and forbearances respecting which those sentiments have been exceptionally cultivated, but in the regulation of their whole lives; which no one, I suppose, will affirm. It may be said that this inferior efficacy of public and social feelings is not inevitable—is the result of imperfect education. This I am quite ready to admit, and also that there are even now many individual exceptions to the general infirmity. But before these exceptions can grow into a majority, or even into a very large minority, much time will be required. The education of human beings is one of the most difficult of all arts, and this is one of the points in which it has hitherto been least successful; moreover improvements in general education are necessarily very gradual, because the future generation is educated by the present, and the imperfections of the teachers set an invincible limit to the degree in which they can train their pupils to be better than themselves. We must therefore expect, unless we are operating upon a select portion of the population, that personal interest will for a long time be a more effective stimulus to the most vigorous and careful conduct of the industrial business of society than motives of a higher character. It will be said that at present the greed of personal gain by its very excess counteracts its own end by the stimulus it gives to reckless and often dishonest risks. This it does, and under Communism that source of evil would generally be absent. It is probable, indeed, that enterprise either of a bad or of a good kind would be a deficient element, and that business in general would fall very much under the dominion of routine; the rather, as the performance of duty in such communities has to be enforced by external sanctions, the more nearly each person’s duty can be reduced to fixed rules, the easier it is to hold him to its performance. A circumstance which increases the probability of this result is the limited power which the managers would have of independent action. They would of course hold their authority from the choice of the community, by whom their function might at any time be withdrawn from them; and this would make it necessary for them, even if not so required by the constitution of the community, to obtain the general consent of the body before making any change in the established mode of carrying on the concern. The difficulty of persuading a numerous body to make a change in their accustomed mode of working, of which change the trouble is often great, and the risk more obvious to their minds than the advantage, would have a great tendency to keep things in their accustomed track. Against this it has to be set, that choice by the persons who are directly interested in the success of the work, and who have practical knowledge and opportunities of judgment, might be expected on the average to produce managers of greater skill than the chances of birth, which now so often determine who shall be the owner of the capital. This may be true; and though it may be replied that the capitalist by inheritance can also, like the community, appoint a manager more capable than himself, this would only place him on the same level of advantage as the community, not on a higher level. But it must be said on the other side that under the Communist system the persons most qualified for the management would be likely very often to hang back from undertaking it. At present the manager, even if he be a hired servant, has a very much larger remuneration than the other persons concerned in the business; and there are open to his ambition higher social positions to which his function of manager is a stepping-stone. On the Communist system none of these advantages would be possessed by him; he could obtain only the same dividend out of the produce of the community’s labour as any other member of it; he would no longer have the chance of raising himself from a receiver of wages into the class of capitalists; and while he could be in no way better off than any other labourer, his responsibilities and anxieties would be so much greater that a large proportion of mankind would be likely to prefer the less onerous position. This difficulty was foreseen by Plato as an objection to the system proposed in his Republic of community of goods among a governing class; and the motive on which he relied for inducing the fit persons to take on themselves, in the absence of all the ordinary inducements, the cares and labours of government, was the fear of being governed by worse men. This, in truth, is the motive which would have to be in the main depended upon; the persons most competent to the management would be prompted to undertake the office to prevent it from falling into less competent hands. And the motive would probably be effectual at times when there was an impression that by incompetent management the affairs of the community were going to ruin, or even only decidedly deteriorating. But this motive could not, as a rule, expect to be called into action by the less stringent inducement of merely promoting improvement; unless in the case of inventors or schemers eager to try some device from which they hoped for great and immediate fruits; and persons of this kind are very often unfitted by over-sanguine temper and imperfect judgment for the general conduct of affairs, while even when fitted for it they are precisely the kind of persons against whom the average man is apt to entertain a prejudice, and they would often be unable to overcome the preliminary difficulty of persuading the community both to adopt their project and to accept them as managers. Communistic management would thus be, in all probability, less favourable than private management to that striking out of new paths and making immediate sacrifices for distant and uncertain advantages, which, though seldom unattended with risk, is generally indispensable to great improvements in the economic condition of mankind, and even to keeping up the existing state in the face of a continual increase of the number of mouths to be fed.
The peculiarities, however, of the revolutionary form of Socialism will be most conveniently examined after the considerations common to both the forms have been duly weighed.
Some further observations require to be made on educational endowments, which are in some respects a peculiar case. Of these it cannot be said, in the present day at least, that they provide what, but for them, would not be provided at all. Education there would still be, and the real question is one of quality. Neither, again, has the argument, so important in other cases, of the protection due to uncustomary opinions, more than a limited application here. A very small minority is able to support a private school suitable to its requirements; and it might even seem that minorities are never in so much danger of being left out, as in the case of endowed institutions for education, which are usually more or less bound to opinions widely prevalent, and which, when the time has come for bringing them under the control of the State, fall into the power of the majority. This danger is very serious, when State institutions, or endowments under State superintendence, have a monopoly of education, or when those who are there educated have, as they have usually had, legal preferences or advantages over other people. But if endowed institutions, originally of a national character, or which have become so by the expiration of the term of inviolability, are open to all alike; and open in the only true sense, that is, with full liberty to refuse one part of the teaching while accepting another part; minorities would enjoy all the benefits that the endowments could give, while retaining the full power of providing, at their own cost, any education which they may consider preferable.
Because an endowment is a public nuisance when there is nobody to prevent its funds from being jobbed away for the gain of irresponsible administrators; because it may become worse than useless if irrevocably tied up to a destination fixed by somebody who died five hundred years ago; we ought not on that account to forget that endowments protected against malversation, and secured to their original purpose for no more than two or three generations, would be a precious safeguard for uncustomary modes of thought and practice, against the repression, sometimes amounting to suppression, to which they are even more exposed as society in other respects grows more civilised. The fifty or hundred years of inviolability which I claim for them, would often suffice, if the opinion or practice is good, to change it from an uncustomary to a customary one, leaving the endowment fairly disposable for another use. Even when the idea embodied in the endowment is not an improvement, those who think it so are entitled to the opportunity of bringing it to a practical test. The presence of such attempts to promote the general well-being by means diverging from the common standard, keeps discussion alive, and obliges the prevailing opinions and customs to seek support from their own merits, and not from a blind acceptance of existing facts.
There are many things which free-trade does passably. There are none which it does absolutely well; for competition is as rife in the career of fraudulent pretence as in that of real excellence. Free-trade is not upheld, by any one who knows human life, from any very lofty estimate of its worth, but because the evils of exclusive privilege are still greater, and what is worse, more incorrigible. But the capacity of free-trade to produce even the humblest article of a sufficient degree of goodness, depends on three conditions: First, the consumer must have the means of paying for it; secondly, he must care sufficiently for it; thirdly, he must be a sufficient judge of it. All three conditions are signally wanting in the case of national education. The first case, that of inability to pay, now, happily, requires only a passing notice. That those who are too poor to pay for elementary instruction, should have it paid for by others for them, has, after a battle of above half a century, taken its place in opinion among admitted national necessities. But the concession of this is the concession of all the rest, at least in principle; for, if those whom poverty disables from obtaining instruction by themselves ought to be helped to it by others, either because it is the interest or the duty of those others to take care that they have it, why not also those in whose case the obstacle is not the poverty, but the ignorance or selfishness of parents? With respect to the other two requisites—that the customer should care for the commodity, and that he should be able to judge of it—the tale is soon told. As a general rule, subject to exceptions, the wishes of parents in regard to the instruction of their children are determined by two considerations. First, what will bring in a direct pecuniary profit. Of this they think themselves judges, though most of them judge even of this very incompetently, being unable to see how any studies, except the direct practice of a business, can conduce to business success. Of other kinds of instruction they neither are, nor consider themselves to be, judges; and on these their rule of action is that by which they are guided in most other things of which they are personally ignorant—the custom of their class of society. If we desire, therefore, that the education of those who are above poverty, but who are not, for their own bane and that of others, predestined to idleness, should have any better guide than an extremely narrow conception of the exigencies of a business life, we must apply ourselves to the other of the two levers by which those we seek to act upon can be moved; we must introduce a better custom. It must be made the fashion to receive a really good education. But how can this fashion be set except by offering models of good education in schools and colleges within easy reach of all parts of the country? And who is able to do this but such as can afford to postpone all considerations of pecuniary profit, and consider only the quality of the education; either because, like the English Universities, they are certain of sufficient customers, or because they have the means of waiting many years till the time comes which shall show that the pupils they have trained are more than ordinarily fitted for all the uses of life? The funds for doing this can only be derived from taxation or from endowments; which of the two is preferable? Independently of the pecuniary question, schools and universities governed by the State are liable to a multitude of objections which those that are merely watched, and, in case of need, controlled by it, are wholly free from; especially that most fatal one of tending to be all alike; to form the same unvarying habits of mind and turn of character.
It would be both unfair and unreasonable to impute to Mr. Fitch, as a settled conviction, the doctrine here incidentally thrown out—a doctrine breathing the very spirit, and expressed in almost the words, of the apologies made in the over-centralised governments of the Continent for not permitting any one to perform the smallest act connected with public interests without the leave of the Government. But when such a maxim finds its way to the public under such auspices, it is time to enter a protest in behalf of those “private persons” whose power of public usefulness Mr. Fitch estimates so lightly, but whose liberty of making themselves useful in their own way, without requiring the consent of any public authority, has mainly contributed to make England the free country she is; and whose well-directed public spirit is covering America with the very institutions which her state of society most needs, and was least likely in any other manner to get—institutions for the careful cultivation of the higher studies. Whether endowments for educational purposes are a good or an evil is a fair question for argument, and shall be argued presently. But the reason by which Mr. Fitch supports his doctrine—namely, that as education and the relief of the poor require organization and fixed principles, no tampering with them by private persons should be allowed—would avail equally against allowing any private person to set up and support a school, or to expend money in his lifetime on any plan for the benefit of the poor. Such doctrines lead straight to making education and beneficence an absolute monopoly in the hands of, at the best, a parliamentary majority; that is, of an executive government making itself habitually the organ of the prevalent opinion in the country, but liable to spasmodic fits of interference by the country’s more direct representatives. It is hardly necessary to say that Mr. Fitch cannot intend this; but it is those who do not intend a bad principle, but only a particular consequence of it, that usually do the work of naturalising the principle, and making it one of the moving forces in society and government.