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And the analogy between Socialists and doctors holds good in this further particular. Any ordinary doctor, when he visits a sick person, is bound to exhibit himself in two distinct characters. Before he can exhibit himself as a healer, he must exhibit himself as a discoverer of the nature of the disease which he is invoked to heal. Treatment must be preceded by diagnosis. In the same way Socialists, before they can have any ground for recommending that their patient—the body politic-should be submitted to some treatment of a totally novel kind, are bound to begin, and, as a matter of fact, they do begin, with an elaborate exposition of what they take the patient's condition to be-of the nature and extent of the maladies from which, in their view, he is suffering ; of their origin, of their development thus far; and of the course which they will necessarily run unless there be a prompt application of the remedies which the Socialist advocates.
In dealing, then, with Socialism as related to practical politics, I shall aim at considering it under each of these aspects separately, and we will take it in the present article as identified with a characteristic diagnosis or estimate of the economic conditions of this country as they actually are to-day, of their origin, of their development thus far, and of future development as it must be unless the existing economic system of the whole modern world be subverted.
THE HISTORY, ACCORDING TO SOCIALISTS, OF THE RICH, THE
MIDDLE, AND THE POORER CLASSES, SINCE THE BEGINNING
The socialistic diagnosis of society under the modern economic system in all progressive countries, and in this country in particular, may be compared partly to charts purporting to represent conditions at this or that special time, partly to a moving diorama purporting to show the manner in which conditions have changed between a date which we may roughly identify as the beginning of the nineteenth century, and the present day—the period which Socialists distinguish from all others as that which has witnessed the consummation of Capitalism in its modern form.
The distinctive character of the socialistic diagnosis of society is best shown by its representation of the alleged course of social changes. This may be briefly summed up in the general assertion that, under the modern economic system which has been dominant in this country since the opening years of the nineteenth century at all events, a system under which wealth has increased as it never increased before, the whole of the increment has been monopolised by a relatively small class, whilst the rest
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of the community have not only not gained anything, but have in an economic sense been going from bad to worse. Some Socialists make this assertion in more qualified terms than others; but they are all unanimous in respect to its general tenour: and we need not trouble ourselves now to consider any minor differences ; for the first broad fact which I shall endeavour to make plain is that this general representation of a society going from bad to worse, with the exception of one small class, is not merely an exaggeration of facts to a greater or less extent, but is an absolute and direct inversion of them.
In order to show that this criticism is no mere figure of speech, let me call the reader's attention to certain of the main details into which such a representation of the social movement resolves itself. For this purpose we will appeal to two writers, who, of all the exponents of Socialism, are incomparably the most conspicuous for their abilities, and who have, through their works, exerted the widest influence. The writers to whom I refer are Karl Marx and Henry George.
The diagnosis of the social movement, as made by Karl Marx about forty-five years ago, has been epitomised and reiterated by Socialists throughout our own country, Europe, and America in the following well-known words : Under the system of modern Capitalism, whilst the rich have been growing and are continuing to grow richer, the poor have been growing, and must continue to grow, poorer; and the middle classes, or persons of moderate means, are concurrently being crushed out.'
Henry George, who became famous through his work, Progress and Poverty, about fifteen years later, reaffirmed all these propositions, not on the authority of Marx (with whose writings he had no acquaintance), but as the result of his own observations, and added to them yet another, which he made peculiarly his own. He identified the 'rich' of the modern world, whose riches are alone increasing, not with the capitalists but with the private owners of land ; and his doctrine was that, in any progressive country, no matter how fast the products of labour, of ability, and of capital were increasing the rent of land must necessarily increase still faster, so that, not only all, but actually more than all, of the increment due to the efficiency of the population at large flows into the landlords' pockets, and ' poverty accompanies progress.'
Now here we have a series of propositions which, if they have any meaning at all, relate to specific facts of industrial and statistical history. They relate, moreover, to a limited and clearly defined period, which to-day comprises a hundred or a hundred and ten years; and farther, though Marx was a German and Henry George an American, they both declared that their doctrines, whilst applicable to all countries in which modern Capitalism has
developed itself, are illustrated most completely by the history of Great Britain—the country in which that system first attained predominance, and has exhibited its natural consequences on the largest and most startling scale.
If, therefore, these propositions are true at all, they must be pre-eminently true as applied to the history of Great Britain from the dawn of the nineteenth century up to the present time.
Such being the case, abundant evidence exists which enables us to submit them to the test of actual facts. We will deal, then, with these propositions separately, and in the following order :
(1) That the increasing wealth of the rich during the course of the nineteenth century has been accompanied by a 'crushing out of the middle classes,' or a diminution in the number of moderate incomes.
(2) That in this country, during the same period, the rent of land has increased more rapidly than income from all other sources, whether these be manual labour, or commercial and manufacturing enterprise.
(3) That, whilst during the period in question the rich have been growing richer, the poorer classes in this country have been constantly growing poorer.
III THE ALLEGED 'CRUSHING OUT' OF PERSONS OF MODERATE
MEANS In order to discuss this question with anything approaching precision, we must affix some definite meaning to the term ' moderate incomes.' It is enough here to say that, whatever the term 'moderate' may include or not include, moderate incomes, as spoken of in the present connexion, will certainly include all such as range from the assessment limit—that is to say, from 1501. or 1601.-up to 4001. a year. Now it so happens that a portion of the assessed income-namely, the earnings of persons,' private firms, and business and official employés, comprised in Schedules D and E, are individually enumerated in the Returns from year to year, where they are classified in accordance with their amount. I will not here enter on any series of elaborate statistics, I will confine myself to a few dates, and certain outstanding figures connected with them.
Let us begin, then, with the year 1800, and consider how affairs stood then. At that time, as we know from a variety of evidence connected with imposition and levying of the first and the second income-tax, the aggregate of incomes in Great Britain exceeding 601. a year hardly amounted to a total of more than 100,000,0001., of which 30,000,0001. was the rental of agricultural land. Let us now turn to the year 1909 and consider the aggre
gate of incomes, ranging pot from 601. but from 1601. to 4001., which go to one section of the middle class alone-namely, the official and business employés assessed under Schedules D and E. This, exclusive of all income from property, amounted in round figures to not less than 90,000,0001.-or to nearly as much as the total of all the incomes in Great Britain from 601. a' year upwards in the year 1800, and exceeded by 23 per cent. the total of all such incomes as were then derived from anything but the ownership of agricultural land.
Let us next take the year 1850—about fifteen years previous to the publication of the celebrated work in which Marx elaborated the proposition that moderate incomes were disappearing—and the year 1880, a date fifteen years later. Between these two dates the population of this country had risen from 26,000,000 to 35,000,000—an increase of 34 per cent. If moderate incomes were really being crushed out, they must at all events have increased more slowly than the number of the population as a whole. But if we consult the income-tax returns, what do we actually find? We find that, whereas the population as a whole had increased by about one-third, the number of incomes between 1501.--1601. and 4001. had trebled itself, having risen from 177,000 to 330,000.
But a simpler kind of evidence bearing on the same question, and telling the same story, is perhaps that provided by the official returns which relate not to the number of persons paying tax on moderate incomes, but to the number of and value of houses. In these returns all the dwelling-houses in Great Britain are, according to their annual values, divided into a series of groups, and the yearly increase in the number of each class of house is shown. Now the annual value of a house gives us, as a general rule (though, of course, there are various exceptions), a very fair indication of the means of the family occupying it; house-rent, in the case of the middling classes, at all events, being taken to represent on an average from one-eighth to one-tenth of the family income. Thus, houses worth 201. and 401. a year will broadly represent incomes between 1601. and 4001., houses worth between 401. and 801. will similarly represent incomes between 4001. and 8001. ; whilst houses worth more than 801. a year will represent incomes of 8001. and upwards. Thus, the yearly increase in the number of houses of each class will provide us with an index, substantially if not absolutely accurate, of the increase in the number of the incomes which lie within the corresponding limits.
Let us consider, then, what has been happening since the year 1898, as shown in last year's Report of the Commissioners of Inland Revenue.
Of houses worth more than 801. a year—the houses of families having incomes of 8001. a year and upwards—the number built annually, during this period, has not averaged more than 1000.
Of houses worth between 801. a year and 401., the number built annually has averaged as much as 10,000.
Of houses worth between 401. a year and 201.—corresponding to incomes between 1601. a year and 4001.-the number built annually has averaged about 27,000.
These figures, representing the conditions of our own day, speak sufficiently for themselves. They show us that persons possessing moderate incomes—incomes ranging from 1601. to 8001. a year-instead of being crushed out, are exhibiting a numeri
a cal increase which is thirty-seven times as great as that of the whole body of the rich and the comparatively rich together; while if these last figures be taken with those which I quoted previously, they show us that the classes which, for more than forty years, Socialists have declared to be dwindling and disappearing before our eyes, are the precise classes whose increase forms one of the principal features by which the present is distinguished from all former times.
Here we have one example of what I meant when I said that socialistic diagnoses of society are not merely distortions of the truth, but are fundamental and absolute inversions of it.
From this example we will now pass on to another-that provided by Henry George, not as a theorist, but as a professed exponent of facts.
The whole of George's reasoning, which in many respects is