[Continued.]

The manner in which industrial corporations and political rings own American city governments for their own emolument at the cost of the public requires no enlargement here. Like the brigands and pirates of former times they swoop down upon the unwitting and defenceless people, not with pistol and dagger, but by the more insidious and no less dangerous methods of political manipulation and legal imposition in the guise of majority rule. They contaminate everything they touch; incapacity marks every act, dishonesty all their dealings. No city, large or small, escapes. Philadelphia has its gas ring and jobbery in all departments, creating a state of chronic scandal; New York its boodlers and Tammany rings; Chicago, perpetual corruption and rascality in its government and administration; Boston has its West End Railroad Company, which not only makes puppets of those in power and buys the silence of the press, but is commonly said to have in its pay the whole State legislature. Every city presents no less conclusive testimony. Mr. Joseph Chamberlain recently proved in the Forum that the best governed (?) city in the States, Boston, requires five times as much money to run the government as a city of equal size, Birmingham, in England, and at the same time fails to give anywhere near as much return in efficiency and services to the citizens. Yet English municipal organizations are no less open to objection, either on principle or on practical achievement, than their American counterparts. Before the advocates of municipalization and nationalization can make out a claim for serious attention to their schemes, they must furnish evidence to rebut the almost overwhelming testimony which demonstrates the utter failure, moral and industrial, of all existing manifestations of practical authoritative Socialism. In default, their demands are unworthy of notice and their proposed reforms abortive. It is not, however, the theories of these schools alone which have to be disproved; the principles they uphold have entered largely into practical politics, and there exists a body of opinion, to all appearance on the increase, which sees nothing but good for the people in the indefinite expansion of the principle of compulsory collectivism. Thus we may observe continuous efforts to show that every time a new function is assumed by the authorities, as the supplying of light in cities, a cheapening of the commodity to the people is effected. Prices of the municipal product are compared with those of private companies, and sometimes the latter are shown to be higher. But it is nearly always forgotten that private corporations carrying on such operations do so in accordance with franchises obtained from the authorities which choke off competition and virtually create the closest of monopolies. Where exclusive rights exist, the benefits of free industry need not be looked for; the choice in such cases lies between a private and a public monopoly, either of which is a direct infringement on individual liberty and clearly unjust.

An erroneous assumption underlies this desire for enlarging public or common property and organization of labor. It is assumed that the profits accruing to private enterprise, to the capitalists, out of business which might be run socialistically, would in the latter circumstance go directly into the collectivist treasury and be used for the general good. Of what do such profits consist? Chiefly interest; yet the collectivists are willing that the authorities take over these functions and pay interest for the necessary capital. True, they imagine that interest would speedily be abolished by some legal enactment or popular plebiscite. But no sound conception of economic principles will admit the efficacy of such methods. Nevertheless, this desire is a tacit admission that the elimination of interest is an essential feature of economic reform, while it must always be insisted that no merely political method can permanently secure this desirable result.

The other factors usually included in profits arising either out of risk, superior facilities, or skill in management could not by any possibility be transferred to the collective authority. With the substitution of industrial Socialism for voluntary enterprise they would simply cease to exist. The source which created them being destroyed, society would be just so much the poorer. And the evidence is against the belief that collectivism would enrich the community, by its ability to manage and administer property and enterprise, beyond what competitive effort has proved itself capable of doing. In short, the advocates of the collectivist movement overlook the fact that the earnings of industrial enterprise above the current rate of interest are properly returns for services rendered, and should not be confounded with the unearned increment of either interest or rent. An exception to this must be mentioned. In the case of a monopoly a tax may be exacted which, though called profit, is neither interest nor payment for services, but simply an unjust abuse of power. The United States government, when its shuts out all competitors and charges a rate for letters beyond the cost of that branch of the service and uses the accruing profit to make good the deficit caused by its unsound management of the newspaper and periodical branch, is a pertinent example. We could add also the English post-office and telegraph service, upon which the government raises a large income in the name of profits, but which is truly a tax on the people, and the English municipal authorities, who realize big profits on the gas monopoly which they use in improvements, whose principal effects are to enhance the value of real estate and increase rents. Unofficial capitalistic monopolies by legislative aid not infrequently do the same thing.

Therefore the one possible benefit which collectivism might be expected to accomplish,—namely, the saving to the producers of that portion of profits which is interest proper,—it offers no promise of effecting. And it has just been shown that the remaining portions would not be saved. Hence we arrive at the conclusion that the claim made on behalf of Socialism to return to the producers the profits now received by the capitalist class without foundation. The analysis in this chapter harmonizes with the preceding by showing that collective ownership of property and compulsory industrial organization offer no advantages over private property and capitalism. So that, judging only by expediency, by the observed results and the possible benefits, collectivism as a solution of the social problem cannot be entertained.

Wm. Bailie.