NATIONALIZATION CHAPTER VI OF PUBLIC UTILITIES AND THE FOUNDATION OF GREAT FORTUNES New Zealand.—Australia.—Great Fortunes In a lecture, delivered on December 15, 1910, before the Fabian Society, G. Bernard Shaw gives the following definition of Socialism: "A state of society in which the income of the country shall be divided equally among the inhabitants without regard to their character, their industry or any other consideration except the fact that they are human beings." The partisans of public ownership hold that the realization of such a conception would be a step toward the millennium. They cheerfully declare that New Zealand contains neither paupers nor millionaires. Now, among the New Zealanders who have recently died, Jacob Joseph left a fortune of £300,000 ($1,461,000); that of Archdeacon Williams amounted to £420,000 ($2,045,400); that of the Hon. W. W. Johnston to about £500,000 ($2,435,000). According to an estimate, based on a comparison of inheritances, Le Rossignol and Stewart calculate that one-half of one per cent. of all the fam ilies, each family being reckoned as having five members, possesses 33 per cent. of the total wealth of New Zealand. And, despite the growing tax upon land, and the division of great estates, this inequality is increasing.1 In Australia the wealth is very unequally distributed. In New South Wales 1,000 individuals, representing 0.40 per cent. of the population, possess £130,000,000 ($633,000,000), or, in other words, an average to each individual of £130,000 ($633,000), while the sum of their total fortunes amounts to 35 per cent. of the whole private wealth of the state. In 1904-1905 the half of all the private property of the state belonged to 3,000 people at most.2 Able men make great fortunes in these countries as other able men have made them in Turkey and in Russia. 543. 1 State Socialism in New Zealand, page 299. 2 The Official Year Book of New South Wales, 1904-1905, page CHAPTER VII DISINTEGRATING CHARACTER OF PUBLIC 1. Individuals Are Industrious and Economical; Administrative and Political Groups Are Wasteful and Extravagant.-Public Ownership Means a Topsy-Turvy World.-Changing Human Nature. 2. Contradictions Inherent in Public Operation.-Tax-Payers and Consumers.-Customs Duties in Switzerland.— Payment in Kind and the Raising of Salaries.-Depressing Effect of Public Operation.-Public Operation One Factor in the Problem of Unemployment. 3. Claude Mullins and Municipal Operation.-The Electors of To-day Are the Candidates of To-morrow.-Public Administrators the Slaves of the Employees Whom They ought to Control.-Emphasis Not on Service, but on Political Effect. 4 Monarchical Conceptions of the Socialists.-Transformation of a Republican State into a Beneficent King.— Delusion of M. Fournière.—The Necessity of the Subordination of the Individual According to Philip Snowdon. 5. The Budget a Socialist Curb.-But the Socialists Consider Taxation an Instrument of Confiscation.-Sidney Webb on the Housing of Workmen and Ownership of the Soil. 6. Crisis of Parliamentarianism.-Necessity of Concentrating the Action of the State upon Fundamentals.-Security at Home and Abroad.-The Interference of Government in the Economic Activity of the Nation Means Disintegration of the State. 7. Resistance. Declarations of the Swiss Federal Council. -M. Brouilhet and Public Opinion in France. 8. Conclusions. 1. Individuals are industrious, productive and economical; administrative and political groups, both national and municipal, are wasteful and run the taxpayers into debt. The ingenious casuist turns this statement about and says: "In the future, municipalities and states will produce and economize while individuals who have worked will rest. He who has produced shall consume; he who has economized will no longer need to take that trouble." A truly topsy-turvy world that would be! However, to the objections to which such a conception gives rise the reply is invariably: "A Socialist society will change human nature.” If past experiments are mentioned, your Socialist replies: "Those experiments have been tried in a capitalist society and consequently do not count." In general those who are advocating most vehemently the nationalization and municipalization of all public utilities treat the officials who direct and govern them, whoever they may be, with the utmost scorn. If the Socialist could only put himself and his fellows in the high places of the government there would be nothing left to wish for. 2. Yet certain difficulties are insurmountable, even to a Socialist. When a political group exploits a utility, if there is any profit arising from the enterprise, it is made at the expense of the consumer; or, if there is any advantage in it for the consumer, the taxpayers pay the piper. In either case the minority is favored at the expense of the majority. In fact, every government operation ends in contradictions, similar to the one pointed out by M. Favarger 1 apropos of the Swiss railways: "Through its customs duties the Federal Council raises the cost of living; then, in order to make it possible for government officials to support the heavier burden, it raises their salaries." I have pointed out the depressing effect produced on industry at large by any threat of government or municipal operation. Private effort finds the struggle difficult, if not impossible, against competitors who may not only bring politics to bear, but who may even make use of the courts upon occasion. For no one is naturally predisposed to invest capital in an undertaking from which he may be driven out at any moment by government or municipal competition. Consequently every threat of socialization or municipalization is followed by loss of energy in establishing or carrying on business, as well as by tightness in the money market. Then these, in their turn, become important factors in the problem of unemployment. 3. Claude W. Mullins, in his article upon "The Municipal Activity of London," 2 sheds great light on the disturbing character of municipal trading opera tions. 1 1 Journal des Économistes, December, 1910. |