PART II
The State of Peace
Chapter I
The Collective Guarantee of the Security of Nations
A permanent State of Peace among all civilised nations may be assured by substituting their collective guarantee of external security for the present system, by which each State is its own guarantor. The cost of this superannuated system is enormous and constantly rising, while its total inability to guarantee the weak against the strong furnishes convincing proof that the moment cannot be long deferred before this momentous change forces its own acceptance. Taught by an identical need, primitive society long ago learned how to establish a collective assurance of the security of the individual horde, clan, or tribe. Man, in isolation, had expended the greater part of his time in obtaining subsistence and defending himself from attack. He had, therefore, bought those services at the highest price, but association at once reduced their cost. The collective guarantee continued to demand considerable exertions on the part of each associate, but there was a clear saving both of time and effort, and the resultant security was incomparably greater than anything yet obtained by individual exertion.
A mutual assurance of this kind succeeded on one condition. The individual must cede the right of judgment to the association, in all cases where interest or temper brought him into conflict with a fellow-member; and the verdict must be executed by State agency alone. Whether directly exercised, or delegated to an executive acting in nomine Societatis, the judgment of the community replaced that of the individual. The judgment was always enforced by an irresistible power, while a code of laws—the necessary consequent of the change—defined the rights of each associate, and established the penalties for breach, or attempted breach, of these rights. The severity of penalties was graduated according to the gravity of the offence committed or the degree of damage caused by the attempt.
However imperfect collective justice was, and still is, it has always, and in all cases, proved superior to the individual system. Experience attests the absolute incapacity of man for equitable judgment, when his own interests are at stake. Interest or passion paralyses the capacity for right judgment, and leads men to maintain the most unfounded pretensions. Such a judge executes his own verdict, and no matter how far it is the fruit of blind impulse, instinct, or appetite, nor how obviously all right may be upon the other side, its execution is solely a matter of relative personal strength. While each man is a law unto himself judgment is invariably subordinated to interest and its execution to the rule that "right is might."
National differences are subject to identical influences. Each nation claims to be in the right, and if a sense of justice compels any members of the State to admit that there is reason in the claims of an adversary, the multitude blinded by passion, or the politician lusting after popularity, forthwith denounces them as traitors. When such differences are put to the arbitrament of war, individuals, on either side, condemning the injustice of a judgment passed under the influence of passion or interest, must either join in a struggle which their hearts condemn, or dare—and few have the courage—to disown their country rather than be parties to an unjust act. And finally, between nations as between individuals, the victory is to the strong without regard to abstract right.
In face of the fact that the cost of such autonomy increases every day, is it profitable that each nation shall remain judge, and executor of judgment, in causes affecting its own interests? Improved communications and the enormously extended area of security, have multiplied international interests and with them occasions of conflict. Undreamed-of improvements in the processes and machinery of production have, on the other hand, increased the returns of productive industry, and with them the ability to support a continually growing outlay upon destructive armaments. With augmented opportunity for differences with adversaries whose power was always growing, compelled to have recourse to arms whenever they supposed, rightly or wrongly, that justice was on their side, nations have been allowed no alternative but to incessantly renew and enlarge the apparatus for supporting their judgments. The army and navy have, without doubt, offered careers to certain sections within the nation, and these have encouraged their development for purely selfish reasons. But the multitude, on whom the burden of maintenance falls, has no opportunity of enforcing moderation; armaments are the guarantee of their security. No nation willingly condemns itself, in case of a conflict, to lying at the mercy of its foe for lack of the means of defence, and whatever the injustice or degree of the injury to which it is exposed; neither will it willingly contemplate the fact that, if a war arise, the battle must be fought with insufficient or superannuated arms, and with no better hope than to defer the hour of surrender. If it be only for honour's sake, it must defend its rights, and it will place this interest before every other. Civilised nations have, thus, been driven to increase their powers for destruction concurrently with, and even to a higher degree than, their progress in production. And in Europe, where international interests are peculiarly complex, and each nation stands shoulder to shoulder with its rivals, the peoples are now bowed beneath the load of armed peace.
It may be argued that they have at least preserved the right to judge their own cause and to execute that verdict. But this right—daily bought more dearly—is now only partially existent, and, even in that degree, is enjoyed by none but the strongest. The minor States of Europe expend, proportionately, quite as much as the larger, but, if their right of autonomous judgment has survived, not even themselves will suggest that they are free to attempt its execution. What has been called the Concert of Europe—an association of all the greater States—has arrogated to itself not only the right of hindering or arresting such attempts, but even of modifying or entirely reversing their terms.
This association of the Great Powers, with its self-constituted claims to a right of intervention between independent sovereign States with the avowed purpose of preventing them from executing their individual judgments, has naturally justified its action by some pretension. The pretension is one of a right superior to that of any individual State—the right of civilisation to interdict any act injurious to the community. Such a claim emphasises a new factor in the growing solidarity of interests brought about by industrial progress, and an extended international market. While external economic and financial relations were of no great importance, and the effects of war largely local, neutrals scarcely felt the reaction consequent on a struggle, and this tie remained dormant. But the situation altered so soon as the innumerable connections of a world-commerce sprang into existence The smallest modern war affects neutral interests as certainly as those of the actual belligerents. From this right, inevitable under the circumstances, sprang the right of neutral powers to intervene and compel the reference of disputes to a less violent arbitrament. Great States exercised it upon such of their neighbours as were too weak to resent the interference. The right of every independent State to judge its own cause, and execute its own judgment, was destroyed or limited in this way, and the smaller State was, in point of right, placed in an inferior position to that of its more powerful neighbour.
The smaller States were, naturally, not slow to feel the indignity, but possessed small ability to revolt. An appeal to their prescriptive right to use the judgment of battle entailed injury to all nations. Those nations had their own right to prevent this injury, and to claim indemnity in case of its commission. Debarred from individual exercise of their right of sovereignty, the smaller States may justifiably demand a share in the collective right which the greater States have arrogated to themselves, and to be admitted to the Concert of Europe in the position to which their relative size entitles them.
It is not difficult to forecast the probable results of such a step, and the step will be realised so soon as the burden of a continued State of War, and the crushing costs of the armaments which it entails, shall have become too intolerable.
Whether the tie were one of compulsion or founded on a voluntary basis, an association of all the States of Europe, with the States of other quarters of the globe, must command superior powers to those of any member of the confederacy. Such a confederacy could compel any member to submit all quarrels to some form of systematic arbitration, and the verdicts of such a tribunal would be sanctioned by irresistible force. Disarmament would then follow as inevitably as the feudal lords abolished their private armies when confronted with an Emperor, chief, or King invested with the exercise of sovereign power and controlling the entire forces of the nation. Each State would reduce its armaments to the exact point necessary to enable it to fulfil their remaining purpose—to fulfil the duties of a guarantor of the common security against attack by peoples still outside civilisation. The proportion of these nations is so small that the force necessary for this task could be reduced within limits similar to those of the apparatus maintaining the internal security of States, since the right of individual justice has been superseded by a system of State-justice vested in an authority emanating from the national entity.
The savings to be effected by a cessation of a State of War will be apparent, however cursory has been our glance at the consequences which it entails—the grinding costs under which nations labour, and the losses, directly or indirectly, originated by it. But this economy in blood and treasure will be no more than an incident of the benefits accompanying the advent of a State of Peace. A new cycle of progress will be opened, the era of a new and better life for humanity.
Part II
Chapter II
The Free Constitution of Nationality
The first, and by no means least, advance which will follow the establishment of a State of Peace will be free constitution of nationality.
All history attests that it was force, and in no sense a voluntary agreement of both parties, which erected the associations called political States; and at this point it may be useful to recapitulate what we have already said on the subject. The strongest members of the species, usually hordes subsisting by the chase and pillage, seized the territories occupied by weaker members. The conquerors effected a partition of these lands, and compelled the inhabitants to work for their benefit, whether by reducing the conquered population to a state of slavery or by leaving them in possession of the land, but subject to a system of serfdom or of simple subjection. The origins of a political State were a commercial speculation in agriculture or industry, and profits naturally depended upon the administrative capacity of their owner, the industry and productive aptitudes of the subject population, the fertility of the soil, and other similar conditions. Taken as forced labour, or as imposts in kind or in money, these profits constituted the owners' revenue, and were, as such, subject to no limitation but that of the entire nett production of which the labours of the slaves, serfs, or subjects were capable. On the one side these labours supported the proprietors of the enterprise—to-day we should call them shareholders—and, on the other, they paid for the defence and aggrandisement of the collective domain.
Every association which carries on an industrial business must devise an administrative system to direct its various services. The State was no exception to this rule. Like all other businesses, the State acknowledged no end but interest, and it identified this with the conservation and enlargement of its profits. But profits can only be increased in two ways. The yield of imposts, whether of labour, of kind, or in money, may be increased; or the area of production may be enlarged. The latter method was preferred by the associations which owned political "businesses," for the former required capacities for good government of which they were seldom possessed. But, since a community can only extend its domain at the cost of a neighbour, war naturally ensued, and while those communities which excelled in war enlarged their territory and their holdings in subjects, they increased their income at the same time. A merchant or manufacturer cares nothing for the race, language, or individual customs of his customers, and the States had no more regard for those of the persons who lived in the territories which they acquired. Their sole motive was interest, and all their actions were exclusively directed to obtaining those territories of which the conquest and maintenance seemed the most easy, and which promised the highest possibilities for lucrative exploitation. Entire populations, opposed in race, in language, and in customs, were thus drawn, whether they would or no, into the domain of the victorious association, to leave it only in accordance with the arbitrament of a new war, or according to family dispositions when a single house chanced to acquire complete sovereign control within the State.
To-day we consider such a method of constituting a nation, a nationality, or a "country," to be barbarous. But, in view of the diversity and inequality of the various species of the human race, and the conditions under which they originally existed, this method was not only the sole possible means, but it was also the sole effective method of preserving the more feeble varieties from extermination. If the strong had never found that it was more profitable to subject the weak—for the purpose of living permanently on the exploitation of their productive abilities—than to rob and massacre, as the Turcoman and Bedouin recently did; if they had not, for this reason, been interested in the survival of those races which were incapable of securing their own protection, civilisation could never have come to pass. It was the discovery that to protect the weak and to prey upon his industry offered higher profits than a systematic career of raiding which first established, and then perfected, the arts of industrial production. High, excessive even, as was the price at which the producer bought his security from the associations of strong men who appropriated him as slave, serf, or subject, there was still an exchange of benefits, and he also made a profit on the transaction.
This appropriation of the weak by the strong was absolute, and usefully so, since it induced the proprietor to spare no effort in protecting his property. His rights as owner naturally extended to cession and exchange, however repugnant a change of masters might be to the feelings of "human property." Yet the change seldom affected status to any appreciable extent. Whether from indifference, or in the hope of attaching a new subject, conquerors voluntarily respected local institutions, and rarely attempted to place restrictions on the use of the indigenous language. They were content—and it was, indeed, the one thing needful to themselves—to collect the imposts, in money or in kind, which had been exacted by their predecessors. These taxes were seldom increased; occasionally, at all events for a time, they were reduced.
The modern conqueror is less liberal than his prototype in these respects, and it is a curious consideration that this retrogression in the treatment of conquered peoples has followed the extension to the same peoples of the rights enjoyed by their masters. The new Theory of Sovereignty places in the hands of the nation those rights of property in, and exploitation of, the State, which were heretofore a perquisite of the oligarchies, erected by "conquest" and led by a "house." But, by virtue of the same theory, the nation has been declared "one and indivisible," so that the subjects, become sovereign, are no more free to sever their connection than before. Contrariwise, the nation is inseparable from the subjects, whom it may not sell or exchange; and if, under the compulsion of superior force, a nation is compelled to cede them, it is under immutable obligation to attempt their recovery on the first possible occasion.
From this theory of sovereignty have been derived two deductions which are, naturally, in absolute opposition. The first maintains that a population which has emerged from a state of subjection, and has acquired "ownership" of itself, cannot be separated from one nation and annexed to another without its own consent. This option was given to the Belgians when the armies of the Republic had conquered their territory, and it was also granted to the people of Savoy and Nice on their cession to France as a return for her services to the cause of Italian unity. The second, and contradictory, deduction—issuing this time from the theory of national indivisibility—refuses any right of secession from the State, and this refusal has been sanctioned by rigorous penalties, as if the right of accession to a State did not include the liberty of a withdrawal. The United States interpreted the modern theory of sovereignty thus. The English Colonies voluntarily incorporated themselves in the Union, but when the Southern States desired to withdraw the Northern States compelled them to remain in it by force of arms. In point of fact, the liberty enjoyed by populations voluntarily annexed or united is limited to a right of changing the form of their subjection. They were subject to an oligarchy, personified in a more or less absolute king; they are now the subjects of a nation, whose mouthpiece is a constitutional or republican government. The individual subject enjoys the compensation of a share in the national sovereignty, but the degree, as may be imagined, is not large. In France it is one in thirty-eight million parts.
It may be disputed whether this infinitesimal share in the sovereign power is sufficient guarantee of individual rights, and even of the rights of particular groups. Government, more or less correctly invested with this delegated power, has imposed a uniform system upon the whole of the national domain. Under pretext of strengthening nationality by unifying it, no regard has been had to the diversity of the populations in the various regions, but the real reason for this procedure was the wish to assure and facilitate, the exercise of sovereign rights.
In its most essential dispositions, at least, the old theory of sovereignty still maintains in such States as Germany and Russia. Even the meagre appearance of choice accorded under the new theory of sovereignty to populations which are annexed is denied to those which come into the relation with these States. Russia ignored the wishes of Poland when it annexed that country, and Germany appropriated Alsace-Lorraine with no inquiry as to their willingness to exchange French for German nationality. But, on the other hand, these governments of the old régime have found it profitable to borrow the practices of unification and assimilation initiated by their more advanced brethren. Populations annexed by them are deprived of their legislative and fiscal systems, and even of the national tongue. They are assimilated by the imposition of institutions which they dislike, and a language of which they are ignorant, while the conqueror never pauses to consider whether these despotic and brutal proceedings may not have a reverse effect to that which is intended, through the exasperation and repugnance which they induce, to assimilation and unification. And yet these means of State-aggrandisement and national expansion, however offensive to those populations which are compelled, under the most grievous penalties, to transfer their love and faith from one nation to another, are still justified by the continuance of the State of War.
While that state continues nations must develop their powers of production and destruction to the greatest possible extent, or prepare to be engulfed at the next outbreak of war. They can enlarge those powers by either of two methods—territorial expansion or an augmentation of internal wealth and population. Territorial extensions are subject to this further rule, that the costs of acquisition and maintenance, incurred on account of the new territory, must not exceed the nett increase of revenue secured by the successful undertaking. Simple self-interest compels States to conquer more territory and to forbid secessions, for secession, besides entailing loss of land and income, may add those identical losses to the assets of a rival power. If Russia withdraws from Poland that country may join Prussia in a war against herself, and an independent Ireland might become the base of operations and supply for the invasion of England.
The State of War is in absolute opposition to the right of free choice of nationality, of accession or secession. France solemnly proclaimed both rights. She permitted Belgium, Savoy, and Nice to exercise the former, but fenced their decisions with the most stringent guarantees. She denied all choice to Madagascar, Cochin-China, and the Arabs, and refuses to permit so much as a thought of withdrawal to territory that has once been subject to her flag. French territory, whether so for a long period or as a result of recent conquest, remains French unless lost by the fortunes of war.
A collective guarantee of peace would destroy this subservience to the State of War—a bondage which has appeared peculiarly intolerable since the case of Alsace-Lorraine. Such a guarantee would protect all States from aggression. Large or small, their integrity would be supported by a power superior to that of the most powerful partner, while every constituent part of a State would be free to vary its nationality at will or convenience. Secession could not menace the security of the remainder of a State, and could not therefore be opposed. The governing classes might not welcome the exercise of a right which curtailed their sphere of power, or, in the case of a composite nation, menaced their ability to favour numerically superior sections at the cost of the less numerous. But such actions could no longer be justified by a plea that they served the predominant interest of national security, and public opinion would cease to support the claim.
The advent of a State of Peace will synchronise with a disappearance of internal troubles, caused by differences of race, custom, and language. Constituted voluntarily, and according to natural affinities, composed of sympathetic or homogeneous units under a system adapted to all idiosyncracies, nations will acquire the highest moral and material development of which they are capable. While the unity of States is maintained by force alone, sectional favouritism breeds divisions and hatreds. They will disappear when a community of interest and action, founded on a common choice of, and common love for, a fatherland freely chosen, is established as the sole and sufficient basis of nationality.
Part II
Chapter III
Free Constitution of Governments and Their Natural Functions
We have seen that political sovereignty grew out of the right of property. Warlike societies seized a territory and its inhabitants for the purpose of founding a political State. The conquerors, become owners, used the lives and property of subjects according to their absolute will. To maintain States against the pressure of political and armed competition it was necessary to concentrate the rights of sovereignty. They became hereditary in the family of a chief, who might justifiably have used the words of Louis XIV., "l'Etat c'est moi!" This chief might grant his subjects certain rights, such as the rights of labour, exchange, and testamentary disposition; also certain guarantees of property and liberty. But permissions of this kind were entirely voluntary; he retained his owner's right of resumption. Moreover, he maintained absolute claims on life, liberty, and property to be used as, and whenever, required for the maintenance and welfare of the State. This supreme power—an attribute of sovereignty—has passed to the modern State, whose citizens delegate its exercise to government. Its original justification was the destruction, or dispossession, with which political and warlike competition continually menaced the proprietary association in each State. Conquest, to-day, implies little more than a nominal change of allegiance, and the damages which it inflicts are rather moral than material. But the right survives, though in a contracted form, and it will continue to exist while the nations are compelled to rely upon war as their sole guarantee against aggression, or the sole means of enforcing what each claims to be justice in cases of dispute.
But if security and rights are no longer weakened because a collective guarantee replaces the guarantee which each nation provided for itself, as the national assurance of protection has replaced the system of individual self-defence, the position is at once reversed, war ceases, and with it all need for that unlimited right of requisition over life, liberty, and property, which is the inevitable attribute of a government charged with maintaining national liberties during a State of War. Under the new order, the charges and services which the requirements of national security demand of the individual, will cease to be uncertain or contingent. They will become capable of valuation and a permanent assessment since they are:—
1. That every citizen shares in a guarantee of the civilised community against barbarian hordes or nations in an inferior state of civilisation, and outside the collective guarantee. But the extraordinary advances in the industries of production and destruction have given civilisation so great a prepotency that risks of this class are insignificant, and 100,000 men can easily maintain the frontiers of the civilised world against all attacks.
2. That every citizen helps to maintain a collective force, which shall be strong enough to execute the verdicts of international justice upon States refusing obedience, or attempting forcibly to maintain a personal estimate of right. A collective guarantee of the peace of nations entails absolute surrender, by each guarantor, of the rights of individual judgment and individual execution of judgment. This surrender was long since imposed upon all subjects of a State, as the sole basis of social security, and it is universally observed except by the criminal and the duellist. Criminals break this obligation in blind obedience to the dictates of cupidity, or those other passions which are only capable of satisfaction at the expense of another. Duellists justify their default by denying the sufficiency of a collective justice in the case of certain personal offences. Society is usually content to ignore the duellist while carefully abstaining from any recognition of a claim which is in direct negation to its own; but it pursues the criminal so unceasingly that a numerically inconsiderable force of police is able to guarantee—though more or less imperfectly—individual life and property.
Civilised States could not be treated as criminals, but the instinct for war and a false idea of national honour might place nations in the relative position of duellists. The collective guarantee would intervene, at such a time, to enforce their renunciation of the right of personal justice, and to affirm the State of Peace. Every interposition of this kind would be a new demonstration of the irresistible power of the collective sanction, and the strongest member of the association must soon recognise its relative impotence. Then the guarantors may disband their contingent of armed forces, for public opinion will suffice to sanction the decrees of international justice. The guarantee of internal peace and external security will then only require an insignificant and constantly diminishing contribution from the members of the confederated States.
The primacy of national interest over all other claims ceases, at this point, to demand an absolute right of requisition over individual life, property, and liberty, so that it is possible to ascertain the exact and inviolable relation of individual and governmental rights. And we shall see that this adjustment will be fixed and determined by the nature of the public services and the conditions of their production.
Public services are the natural attributes of government, and are of two classes—general and local. General services are within the sphere of government proper; local services belong to provincial and local administrations.
The first duty of government is to ensure internal and external security to nation and citizen alike. Services proper to it differ essentially from those of the private association for they are naturally collective. Armies secure an entire nation from external aggression, and a police force exists for the equal benefit of all who inhabit the district which it serves. It is therefore no less necessary than just that all consumers of these naturally collective services should contribute to their cost in proportion to the service rendered and the benefit received. The failure of one consumer to bear his quota of the costs of such production reacts on the entire community, who are compelled to bear a proportion of his defalcations over and above their own contribution.
It seems almost superfluous to insist on the essential minority of naturally collective services. A police force serves every inhabitant of the districts in which it acts, but the mere establishment of a bakery does not appease their hunger. Bread, with all other victual, clothes, &c., are articles of naturally individual consumption; social security is an article of naturally collective consumption.
The substitution of a collective guarantee of peace for the individual action of each State must, consequently, restrict the number of functions, which are the natural and essential duty of government, to:— A share in the common defensive apparatus protecting the association from external aggression;
A share in the machinery which guarantees internal peace within the association;
The provision of internal security within its own State, and the further performance of those services which are naturally and essentially collective.
Part II
Chapter IV
Free Constitution of Governments and Their Natural Functions (continued)
We have now to examine the methods and conditions by, and under, which governments maintain international peace and establish internal security. As soon as nations emerge from their subservience to the State of War, and their constituent parts are free to form new groups or to erect autonomous States, the dangers of revolution and civil war, which are the fruit of compulsory union between heterogeneous and incompatible elements, will disappear together with the motives and pretexts previously used to justify appeals for external intervention. The "States Association" will only have to consider disputes and dissensions occurring between members, and it will refer these to tribunals maintained for the purpose. These tribunals will apply the same legal rules which govern the trial of actions and causes between individual litigants, and their verdicts will be enforced by the collective sanction of the association. Associated States will thus obtain external security by the best possible means, and at the least possible cost, while each will secure internal security under analogous conditions, and by a collateral system.
In order to be able to guarantee full security of person and property to the consumer, or—in case of damage suffered—a compensation in proportion to his loss, it is necessary that:—
(1) the producer impose certain penalties on those who commit offences against the person, or appropriate the property of others, and the consumer must agree to submit to these penalties, whenever he does a wrong to person or property;
(2) the producer impose upon the consumer certain restrictions, designed to facilitate discovery of the authors of delicts;
(3) the producer levy a regular contribution covering his costs of production plus the natural profit of his industry, each assessment to be graduated according to the consumer's position, the particular occupation in which he is engaged, and the extent, nature, and value, of his property.
It should be added that the consumer renounces his right of judging his own causes, and of executing his own judgments.
The production of internal security, therefore, necessitates a body of law—a code—specifying and defining wrongs against the person and property, with the penalties proper to each, and, further, other laws specifying the obligations and charges, which are no less necessary to enable their effective repression.
The execution of the laws, and the conditions accompanying the production of those services which are indispensable to the preservation of all society, further necessitate:—
(1) the institution of a judicial system, primarily adapted to a systematic discovery of the presumptive authors of delicts or crimes against the person or property, of determining guilt and innocence, and, in the case of those proved guilty, of executing the penalties set out in the code; secondly, it must adjudicate upon actions and causes;
(2) the institution of a police service entrusted with the discovery and pursuit of the authors of delicts and crimes, and, in the second place, with executing the repressive penalties.
These are the constituent parts of an organisation producing internal security, and the conditions necessary to its effective action. A form of this essential organisation is found among the lowest races, but it remains notoriously imperfect even among the most civilised and most highly advanced States. Nor is a cause far to seek while the State of War continues to impose its conditions upon governments, the producers of security.
Invested with the exercise of the sovereign power attaching to the association which owned a conquered territory and its inhabitants, government owed this appropriated population no service—whether of affording security or otherwise—any more than a stock-owner owes a service to his sheep or cattle. Yet there was one difference between sheep or cattle and such a population. Whether appropriated by right of conquest, by hereditary devolution of territorial property, exchange, or purchase, such a population might rise against its masters. Plots might also grow up within the State, aimed at the deposition of the government of the proprietary association. Personal security, which it never distinguished from that of the State, commanded this government to make a first duty of precautions against this double peril. The initial step in this direction placed the judiciary and police system in dependence upon government, their first assigned duties being to repress attempts upon its supremacy, to discover the intrigues of rivals, and to supervise the actions, even the words, of malcontent subjects. The second measure of self-protection was to forbid the formation, without governmental sanction, of any association capable of serving as a dissentient or revolutionary centre, to retain control over authorised associations by setting a term to their duration, and to reserve a right of dissolution in every case. But, however constantly and largely preoccupied with personal security, government was compelled to afford some guarantees to individual life and property, since they are the foundation of all industrial progress, and revenue depends upon industry. That these duties were never more than a secondary care, more especially where a government's tenure of power was unstable, can be proved—if proof be needed—by the far greater severity of penalties guaranteeing the persons of those in power and of their agents, when compared with sanctions of the life and property of a citizen.
Fundamental changes might have been expected where the nations ceased to be owned by an association or a sovereign house. Governments, instituted or accepted by a nation—now self-owned—owed their nation those services for which it undertook the necessary charges and obligations. The government was, further, under obligation to increase the efficiency, and to reduce the cost, of those services. But a persistent State of War still compelled governments to value the security of the nation above that of the individual. The States continued to make advances in the industries of production and destruction, and, as each was a possible future combatant, the cost of national security rose continually. Under the new system, also, competition for the sovereign power was increased, and, while possession became more and more precarious, eager competitors were less scrupulous in the choice of means to attain it. Government, increasingly occupied with the problems of self-protection, relegated the protection of the subject to a still more secondary position. Finally, men who obtained power, or maintained it, by strictly legal means, were incessantly compelled to enlarge what may be termed the "political salaries fund," that is to say, the number of officials, and consequently the functions of the State. Ever occupied with the problem of national security, still more with the maintenance of their own power, further charged with a multiplicity of incongruous functions, modern governments can with difficulty fulfil their task. This is the real explanation of the grossly inadequate performance of their first duty—protection of the life and property of the individual.
But if a State of Peace were to succeed the State of War, if a collective guarantee secured the external security of nations; if, in consequence, nationality were the subject of free choice, and the sphere of governments limited to their natural attributions, competition would influence the production of this most essential service with results which must, to-day, appear chimerical. The first question to be solved on that day will be: "Is it more profitable for nations to produce their own security, or to contract for its production with a 'firm,' or company, possessing the necessary resources for, and the technical skill essential to, production of this kind?" Experience has long since demonstrated the economical inferiority of production by a monopolist governmental department. It is therefore probable that nations will prefer to contract, whether through agents or otherwise, with the "firm," or company, offering the most advantageous conditions for, and the most certain guarantees of, the supply of this article, which is one of naturally collective consumption.
Theoretically, at least, these conditions will only differ in one point from those of the present system, but this point is essential. The assurer must indemnify the assured—if attacked in life or property—in proportion to the damages suffered, without regard to the issue of any attempted recovery against the actual authors of the wrong.
Nor will such a system of indemnification be altogether new, since existing laws recognise a right to indemnity where a man has suffered in a riot. Civilised States assert the same principle in their claims for an indemnity to one of their subjects who has been inured, or to his family if he has been murdered, in the territory of an inferior power, or a power reputed inferior, although they are careful to refuse similar claims against themselves. The importance of this principle will be apparent when we consider how supremely effective it must be in inducing governments to perfect their machinery for discovering and repressing attacks on individual life and property.
The conditions regulating the cost of security must differ in every country according to the prevalent standards of morality and civilisation, and similar differences in the obstacles to repressing crime. The assurer and the body of the assured will be jointly interested in maintaining an impartial and enlightened judiciary for adjudicating on crimes and delicts. Adam Smith has long since shown how competition solves this problem, and there can be little doubt that competition between fully independent judicial "companies" will hereafter repeat the same solution.
Part II
Chapter V
Free Constitution of Governments and Their Natural Functions (continued)
Governments, possessed, under the old system, of an unlimited power over the goods and persons of the subject, were naturally tempted to abuse this power for their own immediate advantage, or for that of the political and warlike society whose mandate they held. These motives might lead them to make large increases in the charges and obligations of the subject masses, but never to annex those industries which supported that body and consequently themselves. This was a natural consequence of the self-imposed limitation which confined the oligarchical owners of the State to the functions of government, military or civil. Their body had no motive for appropriating industrial occupations, at that period of human development both reputedly and actually inferior, but influenced government solely for the purpose of inducing armed acquisition of new territories and new subjects, consequently of increasing its peculiar spheres of activity. Hence governments of the old order seldom trespassed on the domain of private enterprise. If they did reserve a monopoly in certain classes of production—in the mintage of money, the manufacture of salt or tobacco—it was from purely fiscal considerations. Even these monopolies were not exercised directly, but farmed, with most other taxes, experience showing that a "farm" gave better returns than direct governmental monopolies.
The advance of production and trade consequent on extended security has changed this by erecting a numerous and powerful middle class, which claims a share in government, and has even obtained paramount influence in the more advanced States. The rivals for political office are chiefly recruited among the members of this class, and it has been observed that such of the old proprietary oligarchies as maintain a preponderance in their States, and continue to supply a majority in the personnel of the political, military, and administrative services, tend to a similar modification of interests, and to identify their cause with that of this middle class. The reason for this revolution is that progress which has reduced the emoluments of the proprietary class by enlarging the costs of war, reducing its frequency, and curtailing its profits. This loss compelled the class to seek compensation by increasing the returns derivable from landed property, and by undertaking functions hitherto despised. Political parties, containing members of both classes, could only obtain, and maintain, power by serving the actual or supposed interests of their constituents. The landed and industrial vote was purchased by protection and subvention—bounties—or by the provision of civil and military offices for such of its younger members as lacked the necessary character or energy to create a position for themselves. This is the explanation of those enormous and ever-increasing burdens with which militaryism, policy, and protection overwhelm the masses whose labour provides their cost.
If we now attempt to estimate the burden occasioned by the degree to which government has abused its unlimited power over individual life and property for the benefit of those classes on which it depends, an analysis of the budgets of most civilised States yields the startling fact that the two services of the army and the public debt absorb two-thirds of the entire revenue. A State of War does, doubtless, necessitate individual insurance against external aggressions, but the consequent premium seems altogether disproportionate to the risks assured. There can be small doubt that the enormous strength of European armies is due to the advantageous careers offered by the service to sons of influential aristocratic and middle-class families, or that the majority of the wars which have wasted the world for no good purpose during the past century were not undertaken at the mandate of the masses. Yet, willing or unwilling, it is they who furnish the necessary blood and treasure. Nor is this the only account. Society is heavily taxed in the increased costs which follow governmental appropriation of products and services naturally belonging to the sphere of private enterprise, such as posts, telephones, telegraphs, and railways. Add to this the price of a policy protecting the rents of the landed interest or the dividends of the investor and business element, and it is a fair calculation that the governmental bill of costs, direct and indirect, absorbs at least half the income of those masses who depend upon the wage of daily toil. The serf owed his lord three days' labour in seven; modern governments, and their privileged dependents, require an equivalent amount, but the value of the services rendered in return is barely equal to the labour of one half-day.
Each step in the eternal march of international rivalry increases pressure upon every part of the world's markets, and with it the urgent need of setting a term to the resultant rise in costs. Nations must either succumb and perish, or there must be a general agreement to replace the present system of expansion by one which will reduce the attributions of the State. Government must confine itself to the naturally collective functions of providing external and internal security. These services, the sphere of government proper, connect with those which attach to provincial and local systems. Like the central government, and impelled by identical considerations, local administration continually enlarges its attributes by trespass on the domain of private enterprise, and local budgets add their burdens to that of the State. These administrations do not possess unlimited rights over the goods and persons of the individual, but, with no precise definition of powers, their claims are solely, and never more than partially, restrained by the veto of the central system which maintains them in various degrees of dependence. This veto is not put in motion until a central government considers that its rights have been actually infringed, and what may be called "local autonomy" is the latitude enjoyed by local administrations in limiting the freedom, and taxing the property, of the individual. The actual duties thus appertaining to local systems are by no means numerous. They include little more than a small number of naturally collective services, building and maintaining sewers, paving, lighting, scavenging, &c. Police systems are, properly, a part of the central machine. Yet, minor as are these local services, it cannot be doubted that, in common with the great departmental undertakings of the central government, they could be better and more economically performed by the employment of a private, specialised agency.
Part II
Chapter VI
Subjection and Sovereignty of the Individual
We have seen that subjection of the weak by the strong is an inseparable consequence of the State of War, since only the stimulus of proprietary right can change the strong man's interest in his weaker competitors from that of a spoiler and destroyer to one of protection. Thanks to many moral and material advances, and a whole series of transitions, the servant, serf, or slave became his own proprietor. But, although freed from the domination of a master, he remained member of a community or nation, and consequently subject to the power erected by this community or nation for its better preservation from the risks of destruction or subjection, which are consequences of a State of War. This power was, for these purposes, invested with an unlimited right of disposition over the lives and goods of all members—a subjection effectively negativing the sovereignty of the individual. However seriously he might be declared sovereign master of himself, his goods and life, the individual was still controlled by a power invested with rights which took precedence of his own. Hence, emerging from bondage to become member of a reputedly free nation, he soon began to devise means of defence against abuse on the part of those who controlled this right. Agents, bearing his mandate, proved incapable of restraining that abuse. Then the nations rose against the proprietary oligarchies in the State, seized this right, and entrusted its exercise to officers of their own. But all in vain. Abuses reappeared, and not only in States maintaining the old system of an hereditary chief, who monopolises the sovereign powers of the oligarchy of which he is head. They appeared, also, in those States where the governmental right of unrestricted disposition over the life and property of citizens was entrusted to the direct agents of those citizens. The sole possible remedy—to curtail this subjection with its priority of claims over those of the sovereignty of the individual, is incompatible with a State of War. The abuse must continue with the continuance of that state, since the power charged with ensuring nations against unlimited risks must itself be invested with a correspondingly unlimited right of disposition over the lives and property of all citizens.
But the situation changes at once when we substitute a State of Peace for the State of War, and sanction the liberty of each State by the collective guarantee of the association. The coercive power of such a guarantee might not suffice to end all wars, but it must reduce risks of aggression within bounds assurable at a nominal premium. Nor could it, any longer, justify that absolute subjection of the sovereignty of the individual, which is inseparable from present conditions. A State of Peace would reduce this subjection to the single obligation of a minimum premium, payable on behalf of the collective assurance of the nations, and continually reducible until abolished by the extension of civilisation.
The sovereignty of the individual will—to conclude—be the basis of the political system of the future community. This sovereignty no longer belongs to the associated owners of a territory and its inhabitants, slave or subject; nor to an idealised entity inheriting from the political establishment of its predecessor, and invested with his unrestricted claims upon the life and property of the individual. It will belong to the individual himself, no more a subject but proper master and sovereign of his person, free to labour, to exchange the products of his labour; to lend, give, devise, do all things as his will directs him. He will dispose, as he pleases, of the forces and materials which minister to his physical, intellectual, and moral needs. But the very nature of certain of these needs—so essential is security to the human race—cannot be satisfied by individual action. Individual consumers of security must therefore associate to produce this service in an efficient and economical manner. Their association will treat, through agents and in market overt, with an undertaker—be it a "firm" or "company"—possessing the capital and knowledge necessary for the production of this service of assurance. Like any other system of insurance, that of individual life, liberty, and property, is subject to two conditions. The first condition is one of price; a premium must be paid, equal in amount to the costs of production plus a profit. The second condition is technical. The party ensured must submit to such obligations as are indispensable to producing the service assured. These conditions are matter for bargain between agents of the associated consumers and those of the company undertaking risks of the particular class, and a contract, terminable as it may suit the parties to agree, will embody the conditions when arranged.
Similar contracts will supply other naturally collective needs, such as communications, public health, &c. A small association in need of these services will make a direct contract with the undertakers of the service desired; large associations will contract through their elected representatives. In these several cases the individual exercises his sovereignty collectively, whether through representatives or by direct treaty. But he will minister to the majority of his needs by direct personal effort.
The duty of representatives (agents) is to conclude a contract, and the conclusion of that contract exhausts their mandate. They may, notwithstanding, be called upon to oversee the execution of such contracts, or to modify their terms should experience discover faults or lacunæ in their form, or should new facts involve some change in the conditions under which their mandatories live. Associated consumers of collective services may, also, find reason to execute a permanent delegation. But supervision of the clauses in a contract may be sufficiently guaranteed by the action of the public press, or other free association specifically formed for that purpose; or the clauses may not stand in need of modification. Official representatives of the consumers would be unnecessary in this case, and the nation can economise by dealing direct.
It appears probable that all naturally collective services will be produced by an association (company) having the usual business organisation and system. A manager will be charged with executing the decisions of the Board of Directors, or of the General Meetings, to which he will render public account for his actions. This will be the economic solution of the problems of establishing and maintaining the services of a State, when the collective guarantee of the nations assures a State of Peace.
Part II
Chapter VII
Impost and Contribution
The real difference between impost and contribution can only be appreciated by remembering how political States were first constituted. Founded by communities of strong men, these communities were compelled to defend their possession, interested in its aggrandizement, and obliged to supply government with the forces and resources necessary to assure safety, and to effect such expansion as might be possible. The resources were a military force, the material instruments of warfare, and means of subsistence. Every member of the associated body of proprietors contributed to these in proportion to the share of territory and subjects received by him at the partition of the fruits of conquest—an allotment regulated by the value of the recipient's services at that time. This was a "contribution," and involved concurrent obligations, or a reciprocal contract, between the association personified in its government, and each particular contributory—each associate. The association furnished its contributories with security and other services needed by them; they repaid the association by providing it with the means of producing those services, and these means were usually paid in the form of "impost." Every partner in the common domain owed certain personal services in time of war, and was also responsible for a contingent of men and means drawn from the subject population of his lordship. The lords taxed this population at will, and were under no obligation in respect of the products and services thus required. If an owner busied himself with the support of, or care for, his slaves; if he protected or assisted his serfs or subjects, these actions were dictated by the same considerations which induced men to feed, or care for, flocks and herds. But there never was any relation or proportion between the imposts, taken by owners in the form of compulsory labour, or—under a more advanced economic system—in the shape of levies of produce or money, and the services which they rendered in return.
The forces and resources furnishing the expenses of States were thus drawn, as to one part, from the personal services of those who shared the common domain; as to the other, from levies of labour, produce, or money, extorted from the slaves, serfs, or subjects of those owners. These levies constituted the revenue of the owners, and, as such, were partly devoted to the support of themselves and the government of their particular domain, partly to the payment of their contribution to the general funds of the State.
Time, and political and military competition, gradually emancipated the slaves, serfs, or subjects, of these seigneurial estates. They became owners of themselves, and of such real or personal estate as a greater or less number of them had been able to amass by labour and thrift. Hitherto the lord had levied imposts without incurring any counter obligation or obeying any other restraints than self-interest, the point at which his chattels might be moved to make open resistance, or the absolute nett limit of their productive capacity. This impost should, now, have been replaced by one partly consisting of rent upon such land and other realty as remained the lord's own property, partly of a contribution analogous to that which the members of the proprietary community paid to the government of their State. This latter contribution should have had the like justification of an exchange of mutual services, and should have been similarly adjusted to the share in the total benefits provided by the social power through its representative government enjoyed by each contributor. But instead of this, contribution, failing to replace impost, was absorbed by it. When a hereditary chief, whether king or emperor, concentrated the rights of sovereignty within his own hands, most of the imposts which the lords had hitherto levied upon their subjects passed with them. Taxes upon the sale of real estate, customs and transport dues, the salt monopoly and that of mintage, were transferred in this way. As a compensation for this reduction in their revenues, the head of the State relieved the lords of the obligations and charges embodying their contribution to the maintenance and aggrandizement of the common domain. This was none the less a retrograde movement in that contribution, implying mutual services, disappeared before impost, established by authority of the king as, heretofore, by that of the lord. In certain countries, notably England, subjects had indeed obtained a right of consent, but this change did not occur in France and the other Continental monarchies. There the peers of a house, whose head had become king, mere reduced to the status of subjects, and were, as such, taxable at his will. They were doubtless exempt from certain imposts levied by them on their ancient subjects in the form of direct taxes upon the person; but indirect taxes upon goods fell upon them with the rest of the community.
One of the firstfruits of the French Revolution was, as we know, the abolition of this system. The Declaration of the Rights of Man lays down that "every contribution is established for the general good, and should fall upon all classes in accordance with their several abilities." This clause marks a return to the system of contribution of impost; contribution now falls upon all classes alike. To have made this repudiation effective, the imposts of the old system—imposts entailing no corresponding services—should have been abolished, and replaced by a system of contributions, each attached to a particular service. The chiefs of the Revolution easily achieved the first part of this reform, but were incapable of realising the second. They contented themselves with providing the resources, required by the service of the State and the additional burdens of war, from the confiscated goods of the Church and the nobility, and by issues of paper-money. Early exhaustion of these temporary expedients left them face to face with the problem of a permanent settlement. But while the State of War continued to demand even greater expenditure than under the old order—such expenditure as was, indeed, unlimited, or limited only by the taxable capacity of the nation—it was impossible to enforce a system of contributions paid directly by every individual and each attached to some particular service, the burden and benefits of which should be equally calculable.
If the old imposts were not re-established in their entirety, the new forms did but embody nominal modifications, and were by no means always for the better. Any alleviation of burdens at this period, also, is due not to an actual reduction in taxation, but to the extraordinary advances in the productivity of almost every industry which followed the application of new machinery and new processes. Taxes rose rather than diminished, for the regular increase in the cost of war and a policy of protection now added taxation in the interest of influential classes to the legitimate requirements of the State. It might even be maintained that taxation was apportioned less and less according to the strict dictates of justice, since the continued growth of military expenditure was followed by a disproportionate rise in those indirect taxes which are unapparent as compared with direct visible imposts. Expenditure also advanced far more rapidly than revenue, and nearly every civilised State was compelled to meet its deficits by borrowing. But loans, generally employed in war or in preparation for war, increase budgets without rendering any service to the productive capacity of nations. Thus the service of the national debt of France absorbs a practical third of the entire revenue, so do public charges increase at the same time that the sources of supply are enfeebled.
Citizens of constitutional States have obtained a right of consent to public expenditure, and to the taxes which furnish it, but the right has proved sterile. Their representatives have never checked the progressive rise in taxation and expenditure which has occurred in every State, those advances—as may be proved beyond any dispute—having been no less, but often much more rapid, in the States which do possess constitutions. And this process must continue indefinitely for just so long as governments, charged with guaranteeing national security, maintain their right of unlimited requisition upon the life, liberty, and property of the individual. But set a term to this State of War, assure the security of civilisation by a collective guarantee; let the cost of this insurance to the individual be reduced until it corresponds with the now almost infinitesimal risk; let the premium to be paid against this risk be as easily determined as that in any other class of assurance; and the unlimited right of requisition, based on an unlimited risk, will lose its only justification.
Then, in place of imposts, founded upon this right, enforced on the slave by his master, on the subject by his lord, by the nation upon the individual, and controlled, to-day, by parties having an immediate interest in continually raising the expenses of government—imposts bearing no relation to the services which they are supposed to remunerate, and limited only by the taxable capacity of the taxed; there will arise a system of contributions, each attached to its own naturally collective service. The amount of these contributions will be fixed by contract between the associated consumers and the companies, or firms, producing the service required at a figure which competition will reduce to its lowest point. The impost of to-day devours an ever-increasing proportion of the revenues of the individual; the demands of contribution will be restricted to a minimum, and a minimum which is continually decreasing as each advance in security reduces the costs of production.
Part II
Chapter VIII
Production of Articles of Naturally Individual Consumption
Under this new order the national association, freely constituted, contracts with a firm or company to ensure its internal and external security; provincial and other local associations continue the analogy, contracting for the performance of naturally collective, though local, services. The particular contributions required under these contracts are levied directly upon all associates living within the localities served, and their payment relieves the contributors of all further obligations or services.
The individual, meanwhile, remains free to produce personally, or to procure by means of exchange, those far more numerous products and services which are the natural subjects for individual consumption. It seems scarcely necessary to insist on the manner in which individual production disappears as each step on the road of progress increases the economics obtainable by the specialisation and division of labour. These principles find their natural expression in determining the practical formation of commercial undertakings, which again multiply concurrently with the growth of markets, compete with each other, and consequently—always supposing that no natural or artificial obstacles intervene—tend to secure progressive economies in the cost of production. When a system of contribution displaces that of imposts, many artificial obstacles, inseparable from the collection of the latter, will disappear. These obstacles exist whether imposts are collected for the purposes of the State, province, community, or even of particular privileged individuals, and are little less noxious than the imposts themselves. (Imposts levied for the benefit of a certain class constitute a protectionist tariff.) Natural obstacles are already passing away before extended security and the multiplication and perfection of every kind of communication.
The most important and most fruitful of all the revolutions which came to pass during the nineteenth century, was the enlargement of markets and consequent extension of competition. A continuation of this process, with the accompanying unrestricted application of the competitive principle to its extreme limits of pressure and intensity, must reduce the costs of production to a minimum in every industry which is not fated to disappear. All industry will, then, be established and operated in the strictest attainable conformity with the law of the Economy of Power. It must employ the most perfect machinery and most skilled labour, but it must also adopt the most economical and most suitable organisation which can be devised. Modern industry is hampered at all these points by obstacles retarding, and acting as a drag upon, production, and the costs of all such disabilities are borne by the consumer of the product, or service, produced.
On markets, naturally restricted by the absence or imperfection of the means of communication and the guarantees of security, the multiplication and development of industrial undertakings have been hindered from the earliest times. The forces and resources of a family, often of a single individual, have sufficed to found a business, and even to carry it on. These businesses, or "firms"—as they were named on attaining any real importance —were directed by a proprietor possessed of the necessary capital. In certain cases he borrowed this capital at a fixed rate of interest, or on guaranteeing a certain share in prospective profits. The actual worker or labourer was usually remunerated according to a fixed, assured, and prepaid rate known as "wages." Private enterprises of this kind differed in no way from political associations or houses, in so far as the continuation or failure of both depended upon the more or less perfect conformity of their constitution and conduct to the law of the Economy of Power. Most industrial undertakings have been hitherto established on this basis. Competition has extended markets and improved machinery until this system proves inadequate to the needs of the more advanced industries. It is doomed to disappear, certainly to fill a quite secondary and progressively diminishing place in the mighty organism of Production. Private firms are already vanishing to make room for associations or companies, and we shall shortly see why this new system is destined to replace the former.
This readjustment would have been achieved long since but for the idea which prevailed, rightly or wrongly, that large agglomerations of powers or resources were a menace to the political establishment. "No State within the State" was a maxim of government, and governments continue to intervene in the matter of combinations, although the maxim has fallen into desuetude. In no single State is the constitution and organisation of associations entirely free. Laws of Association, limiting individual freedom in this respect, are universal, and co-operation of this kind is further burdened by protective and fiscal ordinances protecting the private house against the society or company by taxing income in the form of dividends, but exempting income in the shape of profits.
The action of governments in regulating and protecting associations for the purpose of production has hampered the formation of companies possessing greater powers and resources than those of the individual firm.
National and municipal administrations have first hindered the formation of such companies by imposing these onerous conditions, and then, for lack of the same companies, they have themselves undertaken to produce services lying outside their proper sphere. Producer and consumer consequently suffer together. Similar intervention postponed, where it did not prevent, the transformation of the firm into a company, partly by protecting the former, partly by laws and statutes impeding the formation of the latter. We have already remarked the great imperfections in the company system—imperfections often neutralising, if they do not outweight its undoubted advantages over the firm. Had the formation of either been equally free, competition would have long since perfected the company, and its indubitable economic superiority have become manifest.
But, once cease to obstruct markets by the artificial barriers of the customs—a system nullifying the reduction in the natural barriers of space now affected by improved means of of communication; grant absolute freedom in the formation and organisation of companies; and the company will become the usual, as one may say that it will be the necessary, form of almost every branch of industrial enterprise. It will be the usual form because of its ability to collect the necessary capital at less cost than is possible to a private firm; it will be the necessary form because it will solve the problem of balancing production and consumption on a market which has become practically unlimited in area.
Part II
Chapter IX
Equilibrium of Production and Consumption
Articles of naturally individual consumption can be produced directly—by the same persons who need them, or indirectly—as when an individual produces one article in order to exchange it for another of which he is in need. The law of the Economy of Power is daily tending to make the latter process more and more general. One or more industries specialise in the production of every article of consumption, and as each field of industry is shared by several rivals their products or services compete in the markets. The consumer, needing these products, purchases them with products or services of undertakings in which his own capital or labour co-operates; or he obtains them with a sum of money, an equivalent which is exchangeable for almost every product or service.
Every advance that substitutes indirect for direct production diminishes the sum of the effort and time necessary to produce a given product, and therefore enables mankind to satisfy a greater number of needs in a more complete manner. No sooner has man satisfied the primary needs, common to all animal creation than he begins to minister to those desires which distinguish him from the lower animals. But, although the final basis of civilisation, indirect production sets up a twofold problem upon the solution of which depends the well-being, even the existence, of mankind. Production must balance consumption, and the product must be shared among all those who take part in its production—the producers.
Although direct production also encounters the first part of this problem, it solves it with little difficulty. Man produces because production satisfies many needs—the need of clothing, of food and lodgment, of his moral and intellectual aspirations. These needs compete for satisfaction, and—as in every other kind of competition—the strongest conquer, those which procure the highest degree of pleasure, or obviate the greater pain. Not until these are satisfied does the individual devote his remaining powers and time to the fulfilment of others, chosen in the order of their intensity, the degree and vigour of their several demands. The intelligent and provident, however, refuse to follow blind desire; they calculate, and yield to each such satisfaction as seems fit, regulate consumption, and adapt production to its demands. Such calculations may go astray. Too great obedience to the promptings of the moment, and lack of forethought, may expose a man to future sufferings no less acute than his present joys. It is also easy to miscalculate the amounts of production, or the quantity of products obtainable in exchange for a given expenditure of effort and time. A return which exceeds, or is less than, that expected causes an equivalent error in the relation of the product to the need which it is intended to fill. Overproduction reduces the capacity for satisfaction in proportion to the decreasing intensity of the desire and its final extinction; underproduction increases the intensity of desire in proportion to the insufficiency of the product to satisfy it. This diminution, or increase, in the power of satisfaction, or—stated economically—in the utility of the product, is not simply proportionate to the relation between supply and demand. Its effects are progressive, increased supply reducing demand, and conversely. In the one case it determines a restriction of supply, in the other of demand, until an equilibrium is restored between the supply of the product and the demand of the need.
Under the system of direct production each individual knows his own needs, and the quantities which he estimates sufficient for their satisfaction. He, therefore, experiences no difficulty in regulating his production, but such regulation appears impossible when we first examine the system of indirect production. It does, however, operate with marvellous precision, owing to the regulative power of competition when free to act without hindrance from natural or artificial obstructions. No individual, under this system, undertakes the complete satisfaction of all his needs, but devotes himself—alone or conjointly with others—to the production of some article that supplies a particular need. Those who need this article compete for its possession, offering another product in exchange, or else an equivalent amount of that which is exchangeable for most other products—money.
Every producer, therefore, carries his wares to market where he meets those who desire them, and are prepared to give something in exchange—in the usual case, money. Their desire to purchase constitutes the demand for his wares, and, since his object is to obtain the greatest possible sum of money in return for a given quantity of goods, the seller's object is to restrict supply below the level of demand, never quite to satisfy demand. But since the exchange value of products varies according to the relative proportions of supply and demand, the seller now obtains a sum of money which is more than the actual equivalent of his costs of production—a profit, that is to say, on a constantly ascending scale.
But competition steps in at this moment, and reduces profits to the exact point necessary to determine production of the article in question. An industry no sooner begins to yield higher returns than the cost of production plus a profit—and such a profit is generally held to be included in the costs of production—a surplus dividend, as we may say, than competition causes an irresistible influx of capital and labour, production is forced up, and the exchange value of the product, as expressed in terms of price, falls forthwith. It does not fall solely because of the increased quantities on offer, but also on account of the lower power, now possessed by the product, of satisfying the needs which determined its creation. Price cannot, however, fall below the cost of production, unless in a temporary and accidental manner, for, as soon as the product ceases to command this necessary minimum, the productive forces engaged in an industry seek other and more remunerative fields. Here, failing complete reestablishment, they perish, production is curtailed, and prices begin to rise. When, on the contrary, price rises above the costs of production, competition immediately induces the reverse movement. This action of competition constitutes an economic law of gravity, which is continually bringing price back to the central point of the cost of production, and the further price wanders in either direction the more active is this law.
The first result of this action of the competitive principle is that consumers reap the benefit of every improvement in production. Nor is this more than justice, since progress does not result from the efforts of the moment as applied to any one industry, but is developed from generation to generation and throughout the entire field of industry. Next, when indirect production succeeds direct production, competition continues to assert its power as a regulator. The individual producer, working for himself, regulates production according to the measure of his needs; and—if he governs these in place of submitting to their dictation—in proportion to the demand that he considers useful. If he finds that his production exceeds, or is less than, his need, he corrects the discrepancy for the purpose of equalising the sum of his enjoyment, or of the suffering avoided, with the sum of the efforts, or pain, entailed by the act of production. Competition maintains the like useful order in the realm of indirect production, approximating supply and demand to a point of equilibrium which follows the aggregate efforts and suffering entailed by the act of production.
But competition cannot fulfil this duty if hampered by obstacles, natural or artificial, nor yet in an unenlightened society. The economic history of any civilised people clearly shows that the action of competition develops according to the measure of the emancipation of labour, and the removal of such limitations as curtail an open market. At a time when the worker was the property of an association of strong men, interested, as owners, in assuring him that security which he was unable to obtain for himself, his products belonged to the lord or master of his person. But, when the master or lord discovered that it was advantageous to free himself from the obligation of supporting his slaves or serfs by giving them the right to work for themselves and to exchange their several products, always reserving a claim upon some portion of their produce, this concession resulted in the erection of monopolies. Men who were granted the right to produce a certain article and to exchange it, proceeded to claim the absolute control of their specific industry. Corporations were formed within each lordship, primarily to secure the producer against exactions by lords claiming increased royalties on the fruits of their production, or bartering new concessions against a payment of money; secondarily to defend their monopoly of the markets within a lordship from external competition; and, finally, to regulate production, and so fix the prices of their products as to secure the highest possible rates of profit. Then custom or law intervened to protect the consumer, and a limit was laid down above which it was not lawful to raise prices, a maximum price. We have already shown how custom and law were able to effect this result in those trades and industries the nature of which made it possible to regulate production, but was elsewhere ineffectual.
Industry and, in a certain degree, commerce, have now obtained liberty. Most industries and professions are open to all possessors of the necessary aptitudes and resources, without any limitation on the number of those who engage in them. With the exception of restrictions and prohibitions designed to handicap the foreign producer, markets are equally free to all comers. Market prices are regulated by free competition, or—as we should rather say—by competition freed from the trammels once imposed by restriction on the number of competitors, the rules of monopolist corporations, or laws and customs ordaining a maximum price.
This sketch depicts the present position, but many causes conspire to curtail the full power of competition, and to limit that regulative action which is its peculiar sphere. For despite the extended markets opened to most products by better security and improved communications, the barriers of the custom-house still divide the vast world-market. Competition, acting on a field thus parcelled and divided, loses part of its power as a stimulant to progress, while its exactitude and efficiency as an agent regulating production are even more impaired. Thanks to protective tariffs, syndicates, continuing the ancient system of corporations, limit production at will and maintain prices on a higher scale than would be possible under a system of free competition. Nor are these tariffs stable, but their continual and irregular changes create perpetual disturbance. A sudden rise in rates curtails supply by eliminating foreign offers; prices follow, and the protected home-producer reaps inflated returns, until inevitable transfers of labour and capital reinforce (the home) supply, generally in an excessive degree. At other times tariff reductions flood the markets with imported goods, prices fall suddenly, and the lower price forthwith causes a restriction in supply. Competition is continually bringing price back to, or near, the level of the cost of production, but its regulative action is, in this way, as continually hampered.
Nor are these the only obstacles to its success. Man has not succeeded in regulating the productiveness of all industries. Agriculture is affected by every variation in the weather and all sorts of epidemic blights, but perfection of that branch of commerce which is called speculation might doubtless palliate this variability of the harvests. If the surplus of one season were withheld from the markets, there would neither be an immediate glut and consequent collapse of prices, nor would the failure of future seasons entail enhanced prices and insufficient supply. But, with imperfect means of storage and preservation, the insufficiency of, and too high rates on, capital—subject as this is to the continual drain of unproductive governmental expenditure—with the great existing antipathy to speculation, the regulative action of competition upon agricultural products is hindered by time, as it is harassed by the custom-house in the case of other industries.
Finally, and over and above these natural and artificial obstacles, we must remember our insufficient knowledge of the world's markets. When markets were limited to the territory of a lordship, a county, or a province, demand was practically stable, easily estimated, and production as readily adjustable. But such knowledge has become increasingly difficult with every enlargement of areas. The need for it no doubt creates and multiplies channels of information; harvest figures and estimates, statements of the visible stocks of corn, cotton, wool, sugar, &c., are flashed from one corner of the world to every other. But even if this system embraced every known article of production, and was perfected to the last conceivable degree, the controllers of production would still be insufficiently instructed as to every local shortage or surplus. That information can only be obtained by absolute knowledge of the average profit in every branch of production, and such information is unobtainable until impersonal organisations monopolise the entire production of the world. The very nature of such institutions would compel them to issue regular statements of the results in every branch of their undertakings.
We have now outlined a whole series of imperfections in the existing systems of production and distribution. Each of these imperfections has its remedy, but until all those remedies have become accomplished fact, the action of competition as a regulative principle must remain uncertain. We shall see that this uncertainty entails disturbances hurtful, as a general rule, to the majority of society, and affecting the production, the distribution, even the consumption, of wealth. But, under a system of untrammelled liberty, these causes of disturbance will gradually cease hindering industry and commerce, production and consumption will achieve a final equilibrium, and the point of that equilibrium will be the average cost of production plus the cost of bringing the product to those who desire to consume it.
Part II
Chapter X
Distribution of Products and the Share of Capital in the Proceeds of Production
We have seen how competition tends to reduce the price of all articles, necessary for humor consumption, to a point approximating to the test of production. With absolute freedom in this regard, the consumer should be able to obtain any given article for a sum equal to the expenditure involved in reconstituting the material, and the productive agencies, employed, and in maintaining them continuously at his service. We must now inquire into the manner in which products are shared between the two essential factors in production—Capital and Labour.
The socialist maintains that capital monopolises a lion's share of these products, but the most cursory review of the conditions of modern industry will demonstrate why capital takes this greater share, and how the incessant progress induced by competition tends to reduce its amount.
All industrial enterprises depend on a certain combination of the agents of production, land, buildings, tools, machines, raw materials, food reserves; also upon human material, directors and workers. The former of these are generically styled capital, the latter labour. Capital may be applied to an undertaking in the form of money, in which case the producer uses it to procure the materials that he needs; or it may be applied, directly, in the form of these materials. But, under present industrial conditions, the products of an undertaking are usually received in the form of money, and it is in this shape that they are divided between capital and labour.
Capital is the product of thrift. An economical and provident man does not expend all his income upon the desires of the moment, but reserves and accumulates a portion either to satisfy future needs, educate his children, support his old age, and provide against the innumerable chances and accidents of life; or to increase his income by enabling him to take part in some industrial enterprise. He may keep his capital unemployed and available for future needs, use it to enlarge his own business by increasing his machinery or labour, or invest it in another business for a contingent return. He may also loan it to others who need it for no matter what purpose, but undertake to supply him with a fixed return—with interest. A man is persuaded to part with capital in the two last cases, first because he looks for a return sufficicnt to indemnify himself for the privation that he may suffer should his capital be unavailable in case of one of those eventualities which determined its original accumulation; and, secondly, to recoup the risks of investment plus a margin, however small, sufficient to induce him to part with it rather than hoard it in idleness. Such are the essential conditions of the remuneration of capital. Competition approximates the current rate of returns on capital in direct use towards this figure, whether the saver himself employs his capital in actual undertakings, or uses it indirectly under an arrangement for sharing profits or on loan. When the current rate falls below this scale, or necessary, rate, capital is withdrawn or offered in less quantities, since the compensation is inadequate to the privation, or the risk is insufficiently covered. When the rate-current passes the necessary rate, capital is attracted, or the amounts on offer are increased. These two contrary movements are accelerated according to the degree of variation, until they cause it to disappear.
The share of capital in the proceeds of industry cannot, for this reason, be diminished until progress has achieved a permanent reduction in the necessary rate by diminishing possible privations and possible risks. A general fall in the rate of interest has been apparent during the last fifty years, and has been attributed to increased production of capital, and a progressive increase in the habit of thrift. But if the supply of capital has increased, demand has not failed to do likewise. The true reason for this fall in the rate of remuneration on capital—the rate of interest—is to be found in that progress which has caused a larger proportion of the capital lent or employed on profit-sharing terms, to become readily realisable. This has reduced the inconvenience incurred in parting with its actual possession, and consequently the amount of the requisite compensation. Thanks to the possibility of instantaneously realising personal estate, the privation—very real in less advanced industrial communities—resulting from inability to recover or convert capital in actual employment, has vanished. No doubt the capitalist who has invested money in personal estate runs a certain risk of loss in the case of a forced realisation, but he may also be able to sell at a premium, and this possibility counterbalances the contrary risk. Doubtless, also, capital is by no means all invested in personal estate, but the proportion so placed increases every day, and the result of a state of competition is always to reduce the current rate on services and products to the lowest minimum necessary rate. Between the returns on real and personal estate, there tends to grow up an average return, and every increase in the proportion of money invested in realisable property tends to reduce the rate of this average return. When all capital has become capable of immediate realisation, the considerations determining this average rate will cease to include the idea of compensation for possible inability to realise.
This factor in determining the necessary rate of return on capital is tending to disappear, but that which constitutes the premium on risks is by no means in similar case. It is, indeed, so far from diminishing that one might almost maintain that it has risen during recent years. The risks to which capital is exposed are divisible into two categories—particular and general. Particular risks arise from the more or less speculative element which enters into all industrial undertakings, and the great liability of the prices, which their products command, to be influenced by all kind of considerations. They vary with the nature of each industry, the mining industry, particularly gold-mining, being notoriously speculative. Agricultural profits are, again, affected by every change of weather. But the rates of return on industrial undertakings tend regularly to approximate to the risks of loss, and the returns derivable from any one industry approximate to the average profit in all, provided, only, that all are equally open to capital and labour. Competition, again, is always seeking out the most profitable industries and is, therefore, always tending to reduce the rates of return to a common level.
General risks attach in varying degrees to every industry in the country of their origin, and a species of sympathy even extends their influence beyond it. They are the result of wars, of changes in the assessment and rates of imposts, especially of the customs-tariff, and from whatever cause they spring every new tie cementing the comity of nations, improved means of communication, enlarged markets, extends the area of their influence. Every industry is likewise subject to risks arising from imperfect organisation, or the errors of judgment, or wilful misconduct, of its managers. General and particular risks alike also fall on that part of the capital engaged in production which bears the liabilities and takes its remuneration in the form of profits or dividends. That portion of capital which takes its remuneration in the form of interest, and that labour which is remunerated by wages, are only affected indirectly and when an undertaking is on the point of disaster.
The capital responsible for liabilities—in common language, the business capital—bears the risks of loss, and assures the auxiliary capital and wage-earning labour against these risks. But no assurance is worth more than its assurer, and it may, and does, happen that the undertaking meets with such losses that the business capital not only fails to pay the interest on the borrowed capital, but that even this borrowed capital is wholly or partially lost.
Borrowed capital is, likewise, capable of division under two heads, corresponding to the manner in which it is employed. It is either invested in particular undertakings, being sometimes more or less realisable and sometimes fixed, or it is loaned to governments and absolutely realisable at will. Such loans are assured by the borrower, no less than those borrowed by particular industries. Their material guarantee is such part of the national income as is collected from imposts, and this may, in the last resort, be equal to the nett annual production of the national activities—granted always that the people are willing to bear this crushing burden. Its moral guarantee is the rectitude of the governments concerned and their promptitude in meeting engagements. The guarantee of the English National Debt, for example, may be called absolute, and the rate of interest in that country may be said to have fallen to the actual minimum of remuneration, with no allowance for assurance against risks. Other countries pay interest at higher rates, which vary more or less according to this risk-assurance.
If the deprivation, which constitutes the first element in the necessary remuneration of capital, is disappearing, thanks to progressive extension of the degree in which capital is realisable, we have seen that risks, and the premium of assurance against them, are by no means following in the same direction. This premium, which includes the assurer's necessary profit, will finally constitute the sole costs of obtaining the use of capital. The rate will fall as each advance—resulting from competition and imposed by the pressure of that principle—diminishes the general and particular risks of industry. Nor is it purely Utopian to dream of a time when these risks will be so reduced that the cost of obtaining capital will be practically nil, or certainly limited to the minimum rate necessary to induce a man to lend his money rather than retain it unemployed—and such idleness, it must be remembered, involves liability for the cost of storage.
But the cost of production is only an imaginary point round which competition groups the price-current and price-actual of a product or a service. To make the price-current coincide with the costs of production, with, properly speaking, the natural or necessary price, competition must be absolutely free, and capital must be able to move, without fear of either natural or artificial obstacles, to any part of the immense world's market where the demand is greatest and the supply least. Moreover, there must be complete, or the best obtainable, knowledge of the varying needs of this market. Considerable progress has been made in these respects during the last century, and this progress will continue more and more rapidly as production accumulates in the hands of associations with realisable capital. The modern Stock Exchange List informs capitalists of the current values of most realisable securities. Foreign values are still fenced with limitations issuing from the old spirit of monopoly; but such hindrances must disappear, or become less effective, as the investing agencies—the Banks—multiply, and obtain greater liberty and more power. Nor is the time so far distant when the universal money market will be an open book, and obstacles to the circulation of capital be removed by improved communications, and the cessation of protectionist regulations. An equilibrium will then be established between the supply of, and the demand for, capital, at the minimum rate of returns—a rate little above zero.
Part II
Chapter XI
Distribution of Products and the Share of Labour in the Proceeds of Production
Labour, like capital, has a necessary rate of remuneration towards which it gravitates under the impulse of competition—the rate-current for service. The first element in this rate is the sum of the cost of producing this agent of production—costs of upbringing, education, &c. These costs must be made good if the labour of successive generations is to be continuously available for the service of production. The cost of maintaining the worker has next to be added, and the rates of both costs vary with the nature of the work to be performed. The second element is the rate of remuneration required to induce the possessor of productive forces to devote those services to the cause of production. But if this inducement is indispensable in the case of workers possessing enough resources to be able to exist without labour, it is not so for the majority of mankind which depends upon the product of labour for the bare necessaries of existence. Only those individuals who possess an independent subsistence, or such resources as allow of their awaiting, or choosing, the opportunity or manner of their labour, can command a premium over and above the necessary wage of production.
We now face a problem whose importance has never been sufficiently insisted upon. The same agencies which reduce the necessary payment for capital, increase the necessary payment for labour. This effect of the progressive transformation of industry can be observed in the two grand natural categories, dividing labour as applied to production. These are the labour of those who direct the hierarchy of officials and the many varieties of salaried employés, and the actual labour of the workman. As every extension of markets and improvement in machinery increases the scale of industrial enterprises, the functions of the worker—the man who directs, no less than the actual labourer—demand a greater amount of intellectual and moral ability, and a less equipment of physical faculties or powers.
The conduct of a large undertaking requires more intelligence and character than a small one; there is greater responsibility on every member of the directing hierarchy, every error and every misconduct entails more considerable penalties or losses. This law applies equally to the mere workman. The consequences of a mistake on the part of an engine-driver or a points-man may be far more serious to life and property than a similar error by the driver of a coach. The labourer in charge of several mechanical processes in a textile factory uses less physical force than an old-time hand-spinner or weaver, but his mind is subject to a far greater strain. He is continually concentrating his attention upon the action of his machines, and the more rapid their motion the greater the call on his intelligence. Where the workman is less capable of proper attention, the speed of his machine must be reduced, and the cost of production correspondingly advanced. Finally, every lapse on the part of an overseer of machinery entails a loss proportionate to the scale of the operation or the power of the machinery with which he is occupied.
Every improvement in the quality of labour entails increased costs of production, and the common argument that a higher standard of life has caused the higher wages which prevail to-day is therefore stating an effect as the cause. The rate of remuneration rises in countries where improved machinery of production requires a superior class of labour to that which sufficed under the old order.Hence a gradual rise to the necessary rate of remuneration, and consequently a higher standard of life among the labouring classes. The standard of life will continue to rise and will reach its highest point when the machinery used for purposes of production achieves the highest attainable degree of efficiency and economy. Then, also, the gulf which now separates the worker who directs from the worker who merely toils will be lessened and the differences between the two classes of labour will be reduced, even in some degree abolished. For this difference has existed on account of the disparity between the powers of brain required by the director and the purely physical powers of the labourer.
The cost of production, which includes the necessary interest or profit, is merely a theoretical point towards which competition impels the actual and current price of labour, no less than that of all other kinds of merchandise. But the case of labour presents a peculiar obstacle to this action of the competitive principle, one that affects no other kind of merchandise, or only in a very minor degree. This is the inequality between the position and resources of the employer and his man, the seller and purchaser of labour. At the time when the worker became owner of his own labour there were few cases in which his command of time and space were not far inferior to that of which the employer disposed. The employer could afford to wait for his labour, but the labourer could not wait for employment. He was also, for lack of information and resources, to mention no more of the obstacles which impeded his movements, compelled to seek his wages in a more restricted market than was commanded by the employer's demand. Moreover, laws forbidding remedial association on the part of the workers augmented and affirmed this inferior position. Thus enabled to increase the hours of work and reduce wages at will, the employer too often paid far less than the necessary rate, and a continuance of the system must have reduced the productive faculties of the worker until their final extinction involved both classes in common ruin. But developments supervened until this disparity in the command of time and space as between the two classes tends to disappear and the current and necessary price of labour to coincide.
Labour has gained this better position by association and by establishing a common fund which enables the individual to wait, to gain time—a device of obvious value, even if it has led to abuses. The offer of labour, on account of the inferior command of time which it possessed, has been less extended than the demand for it. Restated in terms, the supply has exceeded demand by the sum of this variation. The formation of campaign-funds reduces this variation, and, if sufficiently ample, these funds may even remove it altogether. The labourer's command of time and space remains inferior, but since this no longer enables the employer to tamper with the proper rates of remuneration wages depend on the actual relation of supply and demand, of the number of workers seeking employment and the number of men that the employers seek to hire. Over-supply inevitably reduces wages and a deficient supply as inevitably raises them; neither process will take place for any other reason than a real rearrangement of the relative proportions of these two factors.
Competition provides the remedy on either side. A glut or failure in supply is remedied in the labour market by the same means which regulate all other markets. Rising wages immediately induce an influx from other quarters, and a fall diverts the surplus into new channels. Both effects proceed by geometrical progression, the labour market differing from others, in this respect, only in the greater need for absolute mobility within it. Under present conditions the capital and produce markets are hampered by such restriction, but the freedom of labour is even less assured since, besides natural obstacles of distance and racial prejudice, it encounters the artificial obstacles of protection and prohibition, inspired by the spirit of monopoly, and finally our ignorance of the real state of the markets. The ordinary action of competition is, however, already working towards the removal of all these disabilities, co-ordinating the command of time and space possessed by either side, and so assuring the final possession by the inferior of his just share in the proceeds of production.
From the point at which we have now arrived in our consideration of the stimulating and regulative action of competition we may begin to form an idea of the future organisation of society under a State of Peace and Liberty. Peace will be be assured by the collective guarantee of civilisation; vast systems of intercommunication, already in process of construction, will girdle the earth with a coat as of chain-mail; restrictions upon the liberty of labour, on association and exchange, will be removed. Production will then be free to organise, subject only to a liability for the charges necessary to assure individual liberty and property, and nothing will stand in the way of the creation and development of organisations ensuring the proper distribution of products and a right partition between the various agents of production. In place of the present limited markets for products, capital and labour, three general markets will be formed:—
| A Universal Market for Products. |
| A Universal Market for Capital. |
| A Universal Market for Labour. |
In these three free markets, subject to no regulative agency but competition, production and consumption, supply and demand, will find their proper equilibrium at the level of that price which constitutes the necessary rate.
We have seen how improved machinery and industrial processes diminish the necessary rate on products and capital, but increase it on labour. Progress, on the other hand, reduces the proportion of labour to capital engaged in any industry, so that, whatever the rise in the necessary rate on labour, there is an economy in the costs of production. One question, however, still demands solution. Granting that it is possible to exactly adjust the supply of capital and production to the demand of consumption, can labour be similarly controlled? This question restated may read thus—"Is it possible to adjust the production of labourers to the demand of the employer?"
Part II
Chapter XII
The Problem of Population
We may take it as a truism that population is limited by the means of subsistence. Means of subsistence consist, in the first place, of those employments which furnish—in whatever guise—profits, interests, dividends, appointments, the entire income of the world; secondly, of the annual sum available for the maintenance of those members of society who possess no means, or insufficient means, of subsistence, and who consequently depend more or less on public or private charity.
When population outgrows the means of subsistence derivable from these two sources the surplus is infallibly condemned to perish, and Malthus has shown that Nature is not slow to enforce her sentence. Sexual appetite is, however, so urgent that abstention and restraint are the sole guarantees against this disaster, and it is essential for the multitude, in any society, to individually regulate their exercise of these powers according to the means of subsistence possessed by the community.
Among the older societies, indeed up to very recent times, this necessary regulation was a matter of compulsion—at all events as regards a majority of the people. Communities still in the savage state, or belonging to an inferior type of humanity, secured their end by the barbarous customs of infanticide and the putting to death of those who had become too aged to care for themselves. Next, in more advanced societies, but where the bulk of the people were still in a state of servitude or serfdom, masters carefully regulated the procreation of serfs or slaves, adjusting it to the opportunities for their employment. Corporate and local regulations replaced these systems among the commercial and industrial communities where the middle and lower classes had emerged from servitude or serfdom and obtained the right of more or less complete self-government. In the sovereign oligarchies and so-called free classes which controlled the government of States the fear of losing caste and the supposed shameful nature of marriages "below one's rank" continued in the same direction, nor is it admissible to ignore the effects of prostitution, whether upon them or their inferiors. So effective, indeed, were these direct and subsidiary agencies that the progeny of the upper class was frequently insufficient to fulfil all its functions, and was consequently compelled to reinforce its numbers by admitting members from a lower social stratum or even from outside the borders of the State.
Systematic state-restriction upon population has disappeared from almost all civilised societies. Every man in every class is free to beget children at will, and such checks as exist depend upon the individual. But the classes, lately emancipated or only partially instructed, incapable of restraining their appetites, have multiplied out of all proportion to their means of subsistence. Whether their livelihood be insecure, expanding under the influence of industrial progress, restricted by artificial obstacles, taxation or protection, these communities procreate in blind obedience to the dictates of appetite. Imprudent development of public charities, particularly in England, has still further added to the numbers of the most numerous class. Abnormal enlargement of the ranks of labour results, supply outruns demand, and the worker is at the mercy of the employer. Wages fall and the hours of labour are increased, with the inevitable concomitants of heavy infant mortality and a generally reduced expectation of life among the lowest classes. These results, or, in the characteristic phrase of Malthus, "repressive obstacles," tend to maintain equilibrium between the supply of labour and the means of subsistence. The middle and upper classes have meanwhile pushed restriction to excess, and, prostitution furthering the consequences, they have, in nearly every country, survived only by the continual admission of recruits and the infusion of new blood from lower strata of the population.
Such rough-and-ready agents maintain an approximate equilibrium between population and the means of subsistence, but their action has involved a decline in the quality of the people. The lower classes suffered from excessive hours of labour, inadequate wages, too early employment of children whose pitiful earnings must supplement those of the parents, neglect, improper care of health, vicious abuses of the fiscal system, and—last, but by no means least—alcoholic excess. The decadence of the upper classes is almost solely due to a marriage system, which forms their connections according to fortune and convention rather than physical and intellectual affinity. All classes pay heavy toll to the widespread habit of prostitution with its inevitable adjunct of disease.
But individual characteristics are the chief factor in the power of any society, and physical and moral vigour decide the battle of competition far more certainly than fruitful soil or perfect machinery. When a State of War placed the very existence of the proprietary association in the State in dependence upon the warlike qualities of the individual, institutions and customs were all directed to its preservation. Marriages, menacing purity of blood or the qualities required of a soldier and ruler, were forbidden, and education was solely directed to the fortification and development of those qualities. But a State of Peace, involving incessant competition between the nations possessing or disputing the world's markets, brings other considerations into the forefront. Success no longer depends on the fitness of a single class, but upon the physical and moral qualities of the entire people. Competition under the new order may proceed by less brutal and less violent methods, but societies, lagging in the race, will still become decadent and perish. The removal of each obstacle to the natural and irresistible advance of international progress will therefore entail a correspondingly careful adjustment of means, in order that power may not be lost through excess or lack of population, or through deficiency in its quality. The adjustment of population to the means of subsistence, and the physical and moral perfection of man, will then appear even more important than now; more important to the survival and progress of a nation, indeed, than any increase of its machinery or weapons.
We have already attempted—in our book entitled Viriculture—to show how the society of the future will adjust population to subsistence, to the opportunities of employment for labour and capital, and to point out by the use of all available knowledge, how the physical and moral welfare of the race may be best assured. We shall here confine our considerations to a question frequently argued, but argued with an ignorance of economic law which has permitted the most foolish solutions. This question is the future population of our globe.
Population is limited by the means of subsistence, and these means depend more and more upon the number of employments furnished by the immense field of industrial production. These employments supply members of civilised communities with the means of purchasing the material supports of life and no rational attempt to resolve the problem of future population can, therefore, be made without some knowledge of the potential development of productive employments. Industrial progress must, in fact, be the sole basis of such a forecast.
Industrial progress has two opposite effects. It tends to displace physical by mechanical power in every branch of productive industry; in other words, it increases the proportion of the material to that of the personal factor. A given quantity of products or services is produced at the cost of less labour, and the quality of the product is also improved. A thousand railwaymen, engineers, mechanics, stokers, &c., transport with ease more material than a million porters could move; or a thousand spinners and weavers by mechanical process manufacture stuffs which an incomparably larger number of handworkers could not produce in a lifetime. It is even no dream to prophesy that science will one day so perfect our knowledge of agriculture that a hundred thousand men—ploughmen, reapers, sowers, &c.—will harvest a quantity of corn which a million labourers could not so much as sow. Granting, therefore, that the scale of every industry has reached its limits, each improvement in machinery or methods means so much less room for human labour, and so many less opportunities for earning a livelihood; the process must continue until industry has achieved its highest possible development, and the population of the globe will suffer a continual and corresponding restriction.
But the same progress which reduces the labour involved in producing a given product also decreases the value of this product, places it within reach of a larger number of consumers, and therefore increases the demand for it. This increase follows that of the capacity of the consumer, and this, in turn, results from:—
(1) The improved quality of labour and a consequent rise in the rate of its remuneration, therefore an increased capacity for consuming every kind of product.
(2) A fall in the necessary price inducing a corresponding fall in the price-current, which again increases the consuming capacity of all other producers, and this whether their savings on the purchase price of this particular article are devoted to buying a greater quantity of it or to purchasing other articles. Every improvement which increases the productivity of an industry enlarges the output obtainable at the same cost of production, and this increase partly benefits the actual producer, partly the general consumer. The extra return to the producer, and the enlarged capacity of the general consumer, naturally enlarge the scale of production, therefore the number of persons to whom the industry gives employment. Industrial progress, then, diminishes the number of persons employed according to the reduction which it effects in the sum of human power necessary for production, but it also increases the number of persons employed by the measure of the additional capacity for consumption which follows a lower cost of production. We must now compare the relative restriction and expansion of employment, and therefore of population, which are the consequences of this double movement.
We can only conjecture the economy of human power which progress is to hereafter achieve, or what expansion in the number of employments will accompany the greater capacity for consumption resulting from those economies. The economy of labour—even when we include that which is expended in producing labour-saving machinery, has already effected a saving of 90 per cent. in the costs of production of certain industries, but the capacity for consumption of the immense majority of those engaged in productive occupations is extremely low, so low that it call often barely satisfy the first needs of life, not seldom quite fails to do so. We know, on the other hand, that increased productivity can so reduce prices, and so increase wages, as to multiply consumption ten times. Thus the demand of a middle-class Englishman is ten, even twenty, times as effective as that of an Egyptian fellah or an Indian coolie—can, that is to say, command ten and twenty times the amount of labour. It only remains to grant that the potential consumption of any human being is equivalent to the amount necessary to replace the physical and moral forces consumed in productive efforts, and it is clear that consumption will exert the maximum demand when production has been developed to the highest possible extent.
Whether the increased human powers required by the growing demand of consumption will more than balance the economy of labour achieved by improved industrial methods, time must show. We can only assume that they will balance, and that the future population of our globe will not be more, if it be not less, than at the present time. But we may affirm that the capacity for consumption and the capacity of production will advance in the same measure as man's capacity for progress, and that the race of to-morrow may, humanly speaking, be no less superior to that of to-day than the latter is superior to its prototype of prehistoric ages.
Part II
Chapter XIII
Consumption
Our consideration of the natural laws which govern the production and distribution of the materials of life has now led us to the following conclusions:—
Competition first acts in co-operation with the Law of the Economy of Power to promote progress. Every producer is incessantly compelled to increase his powers of production, whether by reducing his expenditure of Power, or—which is the same thing—by creating a greater quantity of products by the same expenditure; failing to respond, he is distanced in the race for existence, starved, and perishes.
Competition next co-operates with the Law of Value to regulate the production and distribution of the materials of life. By means identical with those of the physical Law of Gravitation, it now establishes an equilibrium between supply and demand at the level of price necessary to induce production, and regulates the distribution of products between the agents of production, capital and labour, on terms which ensure their reconstitution and permanent co-operation in the act of production.
Production and distribution are naturally related to consumption. Products are produced and shared with a view to consumption, to their employment, that is, in the reconstruction and multiplication of the material, and the physical and moral forces, which constitute the human species. Between this material and these forces products and services are distributed, and the division can be advantageous or disadvantageous according to the manner in which it either ministers to the conservation and augmentation of vitality, or injures them. It is, therefore, necessary to regulate distribution.
It is to be borne in mind that there are two species of consumption—the collective and the individual. Collective consumption is essentially a matter of obligation; individual consumption depends on the exercise of free will. Collective consumption consumes those governmental services implied by the terms internal and external security, and those local services of sewage, highways, lighting, &c., which are the proper sphere of provincial or sectional administration. The collective character of these services renders their consumption obligatory, but governments and local administrations have undertaken further services, which are the proper subjects for voluntary individual consumption, and, whether wholly or in part, the cost of these services is defrayed by obligatory taxes and imposts. Imposts were established under the old order in virtue of the proprietary rights of the master over his slave, the lord over his serf, or the king over his subject; and they were attached to the discretionary power conferred by these rights. The collector fixed their number and amount according to his own wishes; he owed no services in return, and the sole limitation to his power was the possibility of resistance by those who paid. The new system, both in fact and in theory, transformed impost into a payment for services. But the survival of the State of War implies an unlimited risk, justifying the retention by government of an equally unlimited right to tax those who consume the security which it provides, and constitutional and parliamentary organisations, erected as checks upon the exercise of this right, not only fail to so restrain it, but sometimes even favour it. Hence the proportion of individual income, levied for the benefit of the State no less than for that of its protégés, is now equal to, if it do not exceed, the authorised exactions under the earlier system.
The Society of To-morrow, under a State of Peace and in an era of assured liberty of government, will be able to reduce this part of obligatory consumption by at least nine-tenths; but, however great the proportion of income available for the free use of the individual, this consumption should certainly be regulated likewise. The old system rigidly regulated the consumption of classes in subjection. The rules established in his personal interest by the master, lord, or chief of the State, were aimed at the conservation and profitable augmentation of his property—slaves, serfs, or subjects—and were enforced by material and spiritual penalties, the latter being enacted by the religious authority associated with the secular State. The majority of these rules were beneficial to the individual, and he continued to observe them after his enfranchisement. It does not, however, require a very careful examination of the way in which the free individual regulates his consumption, especially since the removal of earlier religious restrictions, to perceive that such regulation has deteriorated rather than advanced, and that it is now no less defective than that practised by the collective government. A particular point, more especially observable among that numerical majority which was probably emancipated too soon, is the improvident drain for present expenditure upon what should be reserved in case of future need, and as a fund of assurance against the chances and changes of human existence. Deficient self-control is also answerable for a far too great satisfaction of disorderly or vicious desires.
We need not dwell on the harmful effects which follow this insufficient, and defective, self-government on the part of the consumer. Besides himself, the individual damages the society of which he is a member, and likewise all other societies in relation with his own. The man who, with no thought for the morrow, expends his entire income on the satisfaction of immediate needs or desires, takes no toll of present earnings on account of future loss or accident, particularly the supreme accident of old age; who, yet more, injures his productive faculties by debauchery and drink; vows himself and his dependents to a life of suffering and misery. To increase his income is rather harmful than beneficial, since it merely increases opportunities for indulgence in those vices which degrade and enfeeble his nature.
The injurious effects of bad self-government by individuals damage society by diminishing the productive capacity of its members and its industry, and these ill-effects are perpetuated throughout the world in a decline in the general capacity for consumption. The consumer, even of the lowest rank, is, however, attaining to a higher degree of self-government, as is shown by the immense recent increase in savings-bank deposits—particularly in England and the United States—and the extraordinary increase in the number of insurances effected by workmen. Nevertheless, even the most advanced industrial communities show far too many members unable to entirely support themselves, and subsisting, in whole or in part, at the expense of those who have successfully resolved this vital problem, in most cases, only with considerable effort.
It has long been needful to help these unfortunates—victims, too often, of incapacity on the part of the collective government, no less than of their own personal deficiencies. Private charity found the task beyond its control as soon as the change from the old order put an end to the obligatory guardianship of the master or owner. Public charity had then to step in. Under various names and in various forms, it established a poor-tax and a public fund of relief. Institutions for the relief of the indigent were established, hospitals and refuges multiplied. Misery was thus relieved, but its prime cause—improvidence—aggravated. However insufficient public and private charity may be, they inevitably discourage providence. Their mere existence is equivalent to a suggestion that the individual need not rely solely on himself for a solution of the problem of existence, but may look to others to make good deficits that are too often the fruit of vice and idleness. Nor is this their only evil effect. Socialism teaches that society is obliged to assist its members; to satisfy the needs for which they are, themselves, unable to provide.
This gospel of the socialists—that society is responsible for the misery and suffering of the individual, has led to the so-called socialistic legislation, which begins with protective enactments and passes on to measures of assurance. Having limited the legal hours of female and child labour in the manufacturing industries, it proceeded to similar regulation of the hours of adult male workers. Government next undertook to insure the labourer against accident, illness, and old age, these burdens being chiefly borne by industrial and allied undertakings. That the State should stand guardian to beings incapable of self-protection, and whose natural guardians, oblivious of duty, merely contend for an opportunity of exploiting their growing powers, is doubtless justifiable, however arbitrary and doubtfully efficacious the system may be proved. But this consideration does not hold equally good for laws of assurance. These laws are inevitably subject to the defect of applying to entire classes, while—whatever the capacity of the individual—he is subject to the law, obliged to suffer its enactments, and robbed of the right of choosing a method more applicable to his particular case. They also circumscribe the development of an industry, compelling it to bear a burden which increases the costs of production. But there is a still greater objection. Socialism pretends that society is compelled to guarantee the life and well-being of the individual, but it ignores the inevitable consequence—that government, having this duty to perform, must be invested with the means—a sovereign power over the life and all possessions of that individual. If government is under an obligation to forthwith reduce social misery, the members of society should invest it with authority to regulate their consumption and reproduction, as the master regulated that of his slaves. The panacea for all evils, the last step on the road of progress, would thus be nothing else than a return to the first and barbarous stage of slavery.
No one can affirm that the Society of the Future will not be afflicted with a certain number of persons incapable of usefully governing their lives, and regulating their consumption, without injury to themselves or others. A guardianship, supplementing the insufficiency of their governing faculties, and aiding the growth of those faculties by an appropriate system of training, might be necessary. But we believe that such a guardianship has already proved by no means incompatible with that age of liberty towards which mankind is moving. Parents have always been the recognised guardians of "minor" children, with the sole proviso that a more of less arbitrary date has been fixed for emancipation on the ground of their "coming of age." But minority is not limited to those of tender years, and there is no logical reason for rejecting a right possessed by the parent of a child, and by government over those members of society which are incapable of self-government. No reason justifies a refusal to place men, notoriously incapable of supporting all those obligations which attach to a state of complete liberty, under such control as is fitting for one whose faculties of control are so imperfect. Those who are conscious of such lacunæ in their sense of responsibility know the amount of liberty justified by their state.
The possible organisation of a system of guardianship of individuals lacking the power of self-government, in whatever degree, has been discussed elsewhere. Such a system will conduce to progress, but progress will be still better secured by measures extending the sphere of individual self-government, and enlarging the liberty of consumption to the same extent as production already enjoys.
Part II
Chapter XIV
The Expansion of Civilisation
The nations of the civilised world began to seek means of expansion during the fifteenth century, and the process has never been more active than at the present time. The white man has subjugated the greater part of the globe. America and Australia are occupied, Africa is in process of partition, and the greater part of Asia is already in a state of dependence. Thanks to the overwhelming power of their armaments and capital, the white races meet with little real opposition, and may style themselves masters of the world.
Yet the white man's methods of conquest and domination differ in few essentials from those of the barbarian who once invaded civilisation. The barbarian massacred and pillaged, and only when pillage ceased to be as remunerative as heretofore, did he turn to a permanent occupation of conquered territories and a regular exploitation of subject populations. When civilisation became the stronger power it used the same methods upon the barbarian and other backward races. Spain and Portugal led, and their rivals and successors—Holland, England, France—have been content to follow. With the fewest possible exceptions colonial systems, resulting from extra-European conquest and discovery, were devised for the sole purpose of exploiting foreign lands for the exclusive benefit of the political and military oligarchies ruling the homeland, or commercial and industrial corporations to which, in return for a monetary consideration, those oligarchies were content to cede the right of colonial trade, and the monopoly of importing colonial produce. The insatiable cupidity and bloody cruelty of the Spanish conquistadors has become a byword of history. Their advent in the West Indies, Mexico, and Peru, was marked by an orgy of massacre and pillage, and nothing but exhaustion of the gold, silver, and other movable treasures of those countries, turned the thoughts of these men towards partitioning the land, and exploiting the mineral and other resources of the country, not excepting the human cattle—their inhabitants. The vast colonial territories of Spain afforded ample scope for a fruitful activity on the part of its governing classes, soldiers, civil officials, holders of concessions, who exploited their lands by Indian labour, and later—when the native had perished under the lash—by the labour of imported African slaves. A few industrial and commercial monopolists secured rapid fortune by their control of colonial markets, but the Spanish nation obtained no return for the enormous expense of maintaining its empire. Desirously coveted by the oligarchical governors of other States, these colonies required a costly garrison and navy, and were an incessant cause of war. Those wars necessitated increased taxation, harassed industry at home, multiplied the numbers of the unemployed, and reduced the masses to a state of covetousness and misery. By its temporary enrichment of a few families, and their enrichment was only temporary since general impoverishment of the nation soon overwhelmed them with the rest, the vicious colonial system of Spain was the chief cause of that country's ruin.
Nor, if we regard it from the point of view of general national interests, has the system of conquest and exploitation been of real benefit to any country. The governing oligarchies, aristocrat or bourgeois, in England, France, or Holland, may have benefited from colonial possessions, but they are a burden on the generality which must pay for endless wars, and suffer the artificially enhanced prices of colonial products protected in the home market. And, after all this, the colonies cast loose from their mother countries. In the Spanish colonies the war of emancipation was initiated by native aspirants to civil and military employ, who sought to displace officials imported from home; the leaders in the English colonies were colonists—landed proprietors, merchants, and artisans—claiming the right of their relatives in the mother country to be subjected to no taxation of which they had not themselves approved. Thus to the expenses already incurred in colonial conquest and defence there was now added the cost of combating these revolts. The War of American Independence, to mention no other, doubled the National Debt of England, and loaded French finance with a burden which was a prime cause of the premature explosion of the French Revolution. A balance sheet of a "Colonial Undertakings" account, between the close of the fifteenth and opening of the nineteenth century, would discover a singular inclination towards the debit side. And if it be asserted that expansion of trade and industry, due to colonisation, has been an active cause of progress, the assertion is true, but it remains that the same progress could have been secured at less cost and by far less barbarous methods.
After a period of comparative rest, civilised nations have again begun to seek after expansion; but so far from novel are the means employed that, while conquered nations suffer no loss than in former times, those which expand do so at a greatly enhanced cost. Under the old system, governments seeking to conquer or exploit nations outside the civilised pale, were accustomed to entrust part of the task—and often a very large part—to specially organised companies. They still delegate governmental rights to semi-political, semi-mercantile companies, but it is seldom indeed that they delegate the task of conquering and administering actual new colonies. The colonial expansion of to-day pretends to foster industry and commerce generally, but its true purpose is to satisfy the demands of particular, and politically influential, classes whose support is essential to the governments concerned. This class, the active element in the electorate, is greedy of public employment, and salaried officialdom belongs almost entirely to its ranks. These men live on the budget, whether they be civil or military officials, great merchants or manufacturers, and their agents, in search of markets protected from foreign competition. The enormously increased costs of a modern war between civilised peoples, and the difficulty of procuring new territory by this means, have forced the governing classes to go outside the boundaries of civilisation in search of employment for their surplus officials, and protected markets for their merchants. The benefits thus secured by certain classes are as nothing compared to the costs imposed on the nation at large. Taking the single example of the French colonies, these possessions cost the mother country a sum practically equal to the value of her exports to the same places, so that it is no exaggeration to assert that colonisation is the most costly and least remunerative of all enterprises undertaken by the State.
Although the colonies of England cost her less and yield a greater return, there can be little doubt that the balance on their account is still on the wrong side. Colonial Office estimates may be relatively inconsiderable, but the Navy and Army votes increase every day, and are largely necessitated by the obligation of England to protect her empire, and to be prepared for the numerous quarrels which are inseparable from a policy of expansion. The English taxpayer supports a destructive apparatus little short of colossal, and little more than a fraction of which would suffice to protect the United Kingdom proper. Impost plays no small part in meeting the cost of that armament, and it must not be forgotten that impost increases public revenue at the expense of a corresponding diminution in private income plus the cost of collection, while, by increasing the cost of general production, it also renders the producer less able to compete with his foreign rivals. Competition daily becomes more acute in the field of industry no less than between nation and nation, and while colonial expansion augments the burden of naval and military establishments, it also enfeebles British industry, and renders the nation decadent.
Nor will the effects of this policy appear less disastrous when examined from the standpoint of the nations thus subjected to their civilised brethren. In no single case has the conquest and exploitation of territory inhabited by barbarians, or people on a lower plane of civilisation, brought any moral or material benefit to the victims. Destruction seems inseparable from conquests of this nature—destruction in the act of conquest, but still more from the vices and sickness introduced by the conqueror; destruction of natural wealth through a greedy and improvident system of exploitation which fells the tree to pluck the fruit of a single season.
But a substitution of a State of Peace for the State of War immediately gives a preponderant influence to that majority of the people which is vowed to productive labour. This class finds little use in expending blood and treasure on an empty pursuit of conquest, only profitable to a minority of civil and military officials and certain privileged merchants. While necessity, consequent on the pressure of universal competition, compels it to decrease its costs of production to a minimum, it is cheaper to delegate the acquisition and exploitation of countries, still without the civilised pale, to free "Colonising Companies," whose action in extending civilisation will be no less rapid, more sure, and much more economical.
The present system by which the government of a State undertakes these functions and the taxpayers support the cost, appropriates all profits to the governing class in the mother country. The interest of the conquered State and its now subject population is wholly subordinated, and invariably sacrificed, to that of the conqueror and master. Substitute the agency of companies, constituted without limitation as to the period of their duration, and with no restrictions on the choice of personnel or method and—the enterprise being at their proper risk and peril—they will take good care that the wealth of countries, hitherto occupied by backward or decadent races, is exploited on the most scientific lines. Such companies will have every interest in developing the productive faculties of their subjects, and will be entirely ready to ameliorate their moral and material condition. Civilisation will thus be extended without recourse to the present barbarous and costly processes of conquest.
Part II
Chapter XV
Summary and Conclusion
Although man shares many of his faculties with the rest of animal creation, he only possesses others, or enjoys them in a greater degree. This advantage, coupled with an organism peculiarly adapted to the practical application of any faculty, completes the endowment by which he was enabled to rise superior to all rivals, and to achieve civilisation. Man is the subject of our investigations, and it is unnecessary to discuss whether his superiority is due to one final act of creation, or whether it is no more than the product of a lengthy process of evolution, triumphant issue of an Intelligence clothed in material form. For present purposes, we need investigate nothing more than—"What was the environment in which this being was placed, and what is the scope of his activities?"
Man is an organism composed of matter and vital forces, and failure to nourish these forces entails waste and ultimate destruction. The consequence of this need—the need of sustenance or consumable material—implies the corresponding necessity of production. The environment in which mankind has been placed also contains a destructive principle entailing the need for security, or a means of assuring safety. Proof of this twofold need is to be found in the suffering which follows any loss of vitality.
Man suffers whenever he experiences a sense of these needs, but each satisfaction of their demands is accompanied by a feeling of pleasure. They can be satisfied by two kinds of labour—labour productive of materials which minister to vitality; destructive labour, or such actions as eliminate beings and things which menace it. But labour, of whichever class, involves an investment of vital force, consequently a pain. Man will not, therefore, labour unless his action procures, or assures, an amount of vitality superior to his expenditure, or unless the amount of pleasure derived, or suffering avoided, is greater than the liability incurred. It is this margin of gain, commonly known as "interest," which provides the stimulus of human, no less than of all other, action.
This hope of a margin of gain is the first part of the stimulus exerted by interest. The man who has become a producer immediately wishes to satisfy his need of sustenance, or security, at the least outlay of labour; or—stated from the other side—the producer endeavours to secure a constantly increasing return for the same outlay. But even this impulse would not, taken alone, suffice to impel man to perfect his means of production or destruction. Every such advance implies effort, a supplementary outlay of vital force with its accompaniment of pain. Nothing but increased effort or pain will induce a man to agree to this additional outlay, and the complementary stimulus, which is the essential condition of all progress, is found in the competition for mere life. Competition for life, for the means of sustenance, began when the multiplication of humanity outran the means of natural subsistence. In the ensuing struggle with rival species or varieties the physically strong became victors, and survived at the expense of the physically weaker. But physical strength is by no means the sole criterion of ability, and the weak were immediately impelled to make every effort to remedy their physical deficiencies by the invention of new methods, improved arms, or tools. Competition became the motive of progress, for the one depended upon the other, and the penalty of remaining stationary, still more of retrogression, was total lack of subsistence, a maximum suffering.
The action of the competitive principle upon the early stages of human existence has been traced in this book. Man, face to face with species of superior strength and endowed with more efficient natural weapons, learned to co-operate and to combine. Natural weapons were supplemented with artificial, weaker individuals destroyed that the stronger might obtain a more plentiful supply of food, and when it was finally discovered that more profit was to be gained by enslaving the weak and systematically exploiting their productive capacities, instead of spoiling and destroying, this discovery opened a new and fruitful era of progress, for it involved the formation of political States.
The struggle for existence was now transferred to a new plane. The proprietary association in these enterprises—the political States—competed with such communities as continued to live by the chase and war; finally, State opposed State. The proprietary association in each State subsisted on the nett product of its subject populations, and as this was taken, whether wholly or in part, in the form of forced labour, imposts, or payments in kind, the master naturally desired to enlarge his possessions in order to increase his income. The stronger State did this at the expense of the weaker, and the era of destructive competition—of the State of War—was thus continued on a new and larger scale, victory inclining as before to the side which disposed of the largest forces, the greatest sum of destructive ability. A State is, however, a complex unit. It needs a government—an organisation suited to the conservation and development of its forces, and able to concentrate and control their action; an army—a body capable of attaining the greatest possible powers of destruction; also a population, sufficiently industrious and economical to furnish the means of supporting, and applying, the destructive apparatus of the army. The scale of these advances increases with every development of the army, and every advance, under whatever head, in the various powers of rival States.
States, which were able to perfect these various elements to the highest pitch, proved conquerors in the State of War, acquired a decisive superiority over the barbarians whose inroads they ceased to fear, and became masters of the world. This result entailed yet another, unimagined by any one of the competitors, and no less than the secure establishment of civilisation. War, here, ceases to be the producer of security and loses all justification; its use vanishes and it becomes harmful.
The fact that war has become useless is not, however, sufficient to secure its cessation. It is useless because it ceases to minister to the general and permanent benefit of the species, but it will not cease until it also becomes unprofitable, till it is so far from procuring benefit to those who practise it, that to go to war is synonymous with embracing a loss.
A consideration of modern wars from this aspect produces two opposite replies. Every State includes a governing class and a governed class. The former is interested in the immediate multiplication of employments open to its members, whether these be harmful or useful to the State, and also desires to remunerate these officials at the best possible rate. But the majority of the nation, the governed class, pays for the officials, and its only desire is to support the least necessary number. A State of War, implying an unlimited power of disposition over the lives and goods of the majority, allows the governing class to increase State employments at will—that is, to increase its own sphere of employment. A considerable portion of this sphere is found in the destructive apparatus of the civilised State—an organism which grows with every advance in the power of the rivals. In time of peace the army supports a hierarchy of professional soldiers, whose career is highly esteemed, and is assured if not particularly remunerative. In time of war the soldier obtains an additional remuneration, more glory, and an increased hope of professional advancement, and these advantages more than compensate the risks which he is compelled to undergo. In this way a State of War continues to be profitable both to the governing class as a whole, and to those officials who administer and officer the army. Moreover, every industrial improvement increases this profit, for the enormous late increase in the wealth which nations derive from this source necessitates enlarged armaments, but also permits the imposition of heavier imposts.
But while the State of War has become more and more profitable to the class interested in the public services, it has become more burdensome and more injurious to the infinite majority which only consumes those services. In time of tranquillity it supports the burden of the armed peace, and the abuse, by the governing class, of the unlimited power of taxation necessitated by the State of War, intended to supply the means of national defence, but perverted to the profit of government and its dependents. The case of the governed is even worse in time of war. Whatever the issue of the struggle, and receiving none of the compensation afforded in previous ages, when a war ensured its safety from attack by the barbarian, it supports an immediate increase in the taxes, and a future and semi-permanent increase in the interest on loans, those inseparable accidents of modern war, and also the indirect losses which accompany the disorganisation of trade—injuries whose effects become more far-reaching with every extension in the time and area covered by modern commercial relations.
The human balance sheet under a State of War thus favours the governor at the expense of the governed, nor can the most cursory glance at the budgets of civilisation—especially if directed to their provisions for the service of National Debts—fail to perceive to which quarter, and in how large a degree, that balance inclines. This, in itself, affords no guarantee that the State of War is nearing an end, for the governing class, under present conditions, disposes of a far more formidable power than that immense, but, as we may call it, amorphous strength, which is dormant in the masses. They, as no one may deny, have often risen against governments extorting too high a price for their services, or threatening to overwhelm them with intolerable burdens, but the success of such movements seldom results in more than a change of masters, and the new governing class has usually been larger and of inferior quality. The result of these revolutions has been what it always must be—augmented burdens and a recrudescence of the State of War.
Nevertheless, this State of War must come to its inevitable conclusion. It continuously and, one may say, automatically drains the resources of the governed, and, since it is these resources which support the governing class, that class must eventually find itself face to face with the end. The same influences that maintain the State of War, though long since effete, will then close it, and humanity will enter a new and better period of existence, the period of Peace and Liberty. We have already attempted to sketch the political and economic organisation which will follow, built upon understanding of the motive forces and natural laws which govern human action. The difference between this organisation and the socialistic programme is singularly essential—it will observe, while theirs denies, these laws.
One question remains before we can conclude—the question of the respective parts played by natural laws and the law of human liberty in effecting this immense achievement. And, finally, we should also inquire the end for which this work has been carried out—a work which has raised mankind, moving him ever further and further from his first state of animalism, his equality with the beasts that perish.
Natural laws have played the higher part, for they have been the determinants of that progress which is summed up in the single word—Civilisation. Stage by stage, they have compelled man to advance under penalty of decadence and destruction. The different communities, together forming the human race, have been driven forward by successive applications of the principle of competition for an existence, to invent and apply forms and methods of government, of destruction and production. The forms and methods succeeded each other in response to new demands, and each was the most perfect devisable by the age in which it appeared. That they should be the best possible, the most efficient and most powerful—should, that is to say, conform in the highest possible degree to the Law of the Economy of Power, needs no insistence. That it was so does not, however, deny any part to the free action of mankind. Such action is subject to physical and economic laws. Man may or may not build in accordance with the law of gravity, but disobedience to that law involves the early dissolution of his buildings. Similarly, his actions may or may not conform to economic laws, but societies failing to respond to the calls of competition, wasting their forces, individually or collectively, instead of preserving and developing them, must fall into decline, and give place to nations which have lived in obedience to economic demands. These conditions have ruled the past, and they must rule the future, but the evolution of the species has tended to a continual advance in the results of individual action, whether upon the particular society of which the individual is a member or upon humanity as a whole. This was not so in the beginning. The intelligence and will of a directing minority were then everything. They led or gave laws, and a passive multitude followed without thought, and without attempting to use its potential power of control. A like system too often prevails at this day. But when the obligations imposed by a State of War have once ceased to exist, when the sphere of collective government has been reduced to its natural limits, and individual action has obtained perfect freedom, the influence of individuals upon the destinies of society and the race will rapidly increase. But this increase will entail fuller knowledge, and far more rigorous observance, of the laws which society breaks to perish.
And now—to what purpose has the mighty edifice of Civilisation been reared? Laws, never made by man, have compelled a continual enlargement of his powers over things natural. Happiness is not that end, for if progress has reduced the suffering and increased the pleasures of the race, no one can maintain that increased pleasure has been the reward of those who have actually achieved advances, nor deny that the present has too often suffered in hope of a future good. Less suffering and more pleasure may be accidents of progress, but they are not its end and purpose. Nor can we define that purpose more clearly than by saying that it is the enlargement of human powers to fit men for a future of which they have no knowledge.
Titles (by Subject) 
