by "murdering liberty" but by fighting the armies of the French Revolution and of Napoleon I. Besides, the defence against the French Revolution and Napoleon was not a "crime," but a necessary duty. Furthermore, the holders of the National Debt are not "blackmailers" but industrious, useful, and thrifty citizens, or the children and descendants of industrious, useful, and thrifty citizens.

About one-half of the National Debt is held by thrifty wage-earners, as all the money deposited in the savings banks, and most of the savings deposited with friendly societies, &c., is invested in Consols, and as a very large part of the assets of the industrial and other insurance societies consists of Government Stocks. Property being theft, and thrift being akin to it, the thrifty workman whose savings are invested in Consols has apparently no right to complain of being robbed of his savings by the Socialists.

Some Socialist agitators have the audacity to tell the thrifty worker that he will not suffer, but benefit, by the confiscation of his savings. "Opponents try to scare this man against Socialism by the fear of losing his interest. Granting for a moment he would do so, would he not gain by the general abolition of interest, &c., which would double his wage in common with that of all workers?" —The worker is to be indemnified for his positive and certain loss in property through the confiscation of his savings, or at the least of the interest paid on them, by a problematical rise in general wages which would benefit the unthrifty quite as much as the thrifty. But if the promised doubling of wages should not take place, what will happen? The Socialist agitators will explain that they are sorry to have made a mistake, whilst the thriftless are squandering the property of the thrifty.

1 Wealth Makers and Wealth Takers, p. 1.

According to the Socialist teachings, the capitalist is a perfectly useless being in the national household. "Does he himself want to work: to do something useful? Far from it. His money works for him; his money makes money, as the saying is." Most capitalists-and I think the large majority of wage-earners are capitalists to some extent are engaged in useful productive work of hand or brain. However, the capitalist of the Socialist imagination, the wealthy man who lives without any work, who studies the money market and Stock Exchange quotations, and who is occupied solely in investing and reinvesting his money to the best advantage, is an extremely useful member of society. It is of the utmost consequence to all workers, and to the whole nation, that the national capital should grow, that mines, railways, ships, machinery, houses, &c., should multiply and be constantly improved. Now the thrifty, not the wasteful, preserve and increase the national capital. Wise and cautious capitalists in enriching themselves will enrich the nation. Careless ones will lose their money and impoverish the nation. The wealth of France has, to a very large extent, been created by cautious and far-seeing rentiers, and thus France has become the banker among nations.

Socialists teach that the wealth of the few causes the poverty of the many; that therefore the private capitalist should be destroyed. Why, then, are the workers most prosperous in those countries which possess the wealthiest capitalists, such as France and the United States, and why are they poorest in countries, such as Turkey and Servia, where wealthy capitalists do not exist? And may not the destruction of the capitalists reduce Great Britain to the level of Turkey and Servia?

1 Sorge, Socialism and the Worker, p. 10.

CHAPTER X

SOCIALIST VIEWS AND PROPOSALS REGARDING TAXATION AND THE NATIONAL BUDGET

To Socialists taxation is chiefly a means for impoverishing the rich and the well-to-do. It is their object to transfer by taxation the wealth from the few to the many, as they believe that the impoverishment of the rich will mean the enrichment of the poor. Therefore they do not aim at economy in national and local expenditure. On the contrary, they wish to spend as much as possible. As money is to be obtained solely from the rich, "An increase in national taxation has no terrors for Socialists."! Every increase in expenditure is greeted by them with joy, and wastefulness in national and local undertakings is rather encouraged than condemned. "Socialists look to the Budget as a means not only of raising revenue to meet unavoidable expenditure, but as an instrument for redressing inequalities in the distribution of wealth." Let us first look into the financial views of the Socialists, and then into their positive proposals.

"The purpose of Socialism is to transfer land and industrial capital to the people. There are two ways in which, simultaneously, this object may be carried out. The one way is by the municipal and national appropriation-with such compensation to the existing owners as the community may think fit to give-of the land and industrial concerns. The second method is by taxation.

Taxation bas its special sphere of usefulness in helping the community to secure some part of its own by diverting into the national purse portions of the rent, interest, and profit which now go to keep an idle class in luxury at the expense of the industrious poor."1

"The existence of a rich class, whose riches are the cause of the poverty of the masses, is the justification for the Socialist demand that the cost of bettering the condition of the people must be met by the taxation of the rich. The Socialist's ideas of taxation may be briefly summarised as follows: (1) Both local and national taxation should aim primarily at securing for the communal benefit all unearned' or 'social' increment of wealth. (2) Taxation should aim deliberately at preventing the retention of large incomes and great fortunes in private hands, recognising that the few cannot be rich. without making the many poor. (3) Taxation should be in proportion to ability to pay and to protection and benefit conferred by the State. (4) No taxation should be imposed which encroaches upon the individual's means to satisfy his physical needs." 2

"To the Socialist taxation is the chief means by which he may recover from the propertied classes some portion of the plunder which their economic strength and social position have enabled them to extract from the workers; to him, national and municipal expenditure is the spending for common purposes of an ever-increasing proportion of the national income. The degree of civilisation which a State has reached may almost be measured by the proportion of the national income which is spent collectively instead of individually. To the Socialist the best of Governments is that which spends the most. The only possible policy is deliberately to tax the rich, especially those who live on wealth which 'Snowden, The Socialist's Budget, p. 2. 2 Ib'd. pp. 7, 8. M

they do not earn; for thus, and thus only, can we reduce the burthen upon the poor.""

The Fabian Society suggests the following reform of national taxation: "In English politics successful ends must have moderate beginnings. Such a beginning might be an income-tax of 2s. 6d. in the pound. Unearned incomes above 5,000l. a year would pay 2s. 6d. in the pound, below 5,000l. a year 1s. 8d. in the pound. The estate duty might be handled upon similar principles. Estates between 500,000l. and 1,000,000l. would be charged twelve and a half per cent. instead of seven and a half, and estates exceeding 1,000,000l. fifteen per cent. instead of eight." 2 The Fabian Society does not disguise its aim in proposing the foregoing: "These suggestions are doubtless confiscatory, and that is why they should recommend themselves to a Labour party. But even so, the confiscation is of a timorous and a slow-footed sort. The average British millionaire dies worth about 2,770,000l., on which the death duty would be 415,500l., leaving the agreeable nest-egg of 2,254,500l. to the heirs. Even if we assume that the inheritance passes to one person only, so as to be subject to the highest rate of duty, it would not be until five more lives had passed that it would be reduced to a pitiful million. The most patient Labour party might not unreasonably demand something a trifle trifle more revolutionary than this." "3

According to the above proposals the income-tax would return 47,600,000l. per annum. This sum seems

far too moderate to most Socialist writers. Councillor Glyde, for instance, gives in a widely read pamphlet elaborate tables in which the produce of a graduated incometax is carefully calculated. The Fabian Society would make "a moderate beginning" by taxing large incomes 2s. 6d. in the pound. Councillor Glyde would begin Socialism and Labour Policy, p. 4. 2 Ibid. pp. 4, 5. 3 Ibid. p. 5.

1