it was compulsory that these notes were good in payment of rates. Is there any question as to their being acceptable? The plan is so simple and so safe that at first it seems amazing it should have been so long out of employment." "Of course gold will drain off abroad-if the foreigners don't follow in our footsteps at once. If the demonetised gold is withdrawn-well, we can have a new currency by nationalising the railways and paying the shareholders ' in current coin (which means in unconvertible notes), "not in redeemable, interest-bearing bonds. So long as solid wealth rests behind our issue, our financial policy is sound. Of course, the railway and other shareholders will want fresh investments; they won't find them, because no man will pay interest to usurers when he can monetise his credit at the mere cost of banking and exchange. They must therefore spend it, and the currency will never be restricted henceforward. And this national ownership of exchange can be operated to compel every monopolist to sell his monopoly to the nation." 2 This insane project is called by the writer, "A scientific way to Socialism." 3 Surely science is the most abused word in modern language. The creation of money by unlimited issues of paper secured by the national possessions was tried on the grandest scale at the French Revolution. The "assignats" were secured on the national domains, and their security seemed absolute to the revolutionaries. The great Mirabeau had stated on September 27, 1790: "Our assignats are not ordinary paper money. They are a new creation for which there is no precedent. What constitutes the value of metal money? Its intrinsic value. Now I ask you: Does paper which represents the foremost of the possessions of a nation such as France not possess 1 How to Finance Municipal Enterprises, pp. 3-5. 3 Ibid. 1 all the characteristics of intrinsic and generally accepted value which metal money possesses?" The "assignats speedily fell to a discount, although dealing in them at a discount was made punishable with twenty years' imprisonment with hard labour,2 and they fell ultimately to waste-paper value. A pair of boots worth thirty francs in gold cost 10,000 francs in paper. On paper all were immensely rich. Yet the masses were starving. Unfortunately people cannot live by consuming unlimited quantities of credit notes. They can become prosperous neither by robbing the rich nor by calling a shilling a sovereign, but only by producing more. Greater wealth means simply increased consumption, and increased consumption, unless based on increased production, can only be effected by intrenching upon and diminishing the national capital, the national reserve store of food, clothing, tools, &c., and thus causing widespread misery and starvation. 1 Nouvelle Biographie Générale, vol. xxxv. p. 39. 2 Roscher, System, p. 227. CHAPTER XXI SOME SOCIALIST VIEWS ON FREE TRADE AND PROTECTION In his thoughtful book on Socialism, Mr. Ramsay Macdonald, M.P., the Socialist leader, attributes the rise of the Socialist movement in great Britain to various causes, one of which is "the reaction against Manchesterism." 1 Socialists, generally speaking, are opposed to Free Trade. Neither the moderate nor the revolutionary sections of British Socialism have a good word to say for it. The Socialist leaders, looking at the question of Free Trade and Protection from the worker's point of view, have arrived with Lecky at the conclusion that the whole Liberal Free Trade agitation is one of the greatest political impostures which the world has witnessed,' a view which, by the by, was also expressed by Bismarck. " 3 Socialists are not under any illusion as to the causes which led to the introduction of Free Trade into Great Britain, and they sneer at the humanitarian cant with which its promoters successfully surrounded it. One of the leading Socialist books states with regard to this point: "Protection was no longer needed by the manufacturers, who had supremacy in the world-market, unlimited access to raw material, and a long start of the rest of the world in the development of machinery and ' Macdonald, Socialism, p. 16. 2 Lecky, History of the Eighteenth Century, quoted in Fabian Essays in Socialism, p. 81. Ellis Barker, Modern Germany, p. 531 in industrial organisation. The landlord class, on the other hand, was absolutely dependent on Protection. The triumph of Free Trade therefore signifies economically the decay of the old landlord class pure and simple, and the victory of capitalism. The capitalist class was originally no fonder of Free Trade than the landlords. It destroyed in its own interest the woollen manufacture in Ireland, and it would have throttled the trade of the colonies had it not been for the successful resistance of Massachusetts and Virginia. It was Protectionist so long as it suited its purpose to be so. But when cheap raw material was needed for its looms, and cheap bread for its workers; when it feared no foreign competitor, and had established itself securely in India, in North America, in the Pacific; then it demanded Free Trade."1 "Protection at home was needless to manufacturers who beat all their foreign rivals, and whose very existence was staked on the expansion of their exports. Protection at home was of advantage to none but to the producers of articles of food and other raw materials, to the agricultural interest, which, under the then existing circumstances in England, meant the receivers of rent, the landed aristocracy." "2 The Free Trade manufacturers, who were chiefly interested in cheapness of production, cared little what became of the workers. "The individualist devotees of laisser faire used to teach us that when restrictions were removed, free competition would settle everything. Prices would go down, and fill the consumer' with joy unspeakable; the fittest would survive, and as for the rest-it was not very clear what would become of them, and it really didn't matter." 3 The doctrines and the boasts of the Free Traders 1 Fabian Essays in Socialism, pp. 80, 81. 2 F. Engels in Marx, Discourse on Free Trade, p. 5. are usually treated by the Socialists with contempt. "Cobdenites ascribe every known or imagined improvement in commerce, and the condition of the masses, to Free Trade. Things are better than they were fifty years ago: Free Trade was adopted fifty years ago. Ergo-there you are. There is not a word about the development of railways and steamships, about improved machinery, about telegraphs, the cheap post and telephones, about education and better facilities of travel." The unsoundness of the fundamental doctrine of Free Trade, "Buy in the cheapest and sell in the dearest market," has frequently been exposed by Socialists. Mr. Blatchford, for instance, in a book of his of which more than a million copies have been sold gives prominence to Cobden's pronouncement in the House of Commons in which he expounded the celebrated maxim: Buy in the cheapest and sell in the dearest market: "To buy in the cheapest market and sell in the dearest, what is the meaning of the maxim? It means that you take the article which you have in the greatest abundance and with it obtain from others that of which they have the most to spare; so giving to mankind the means of enjoying the fullest abundance of earth's goods." Mr. Blatchford then comments upon Cobden's doctrine as follows: "Let us reduce these fine phrases to figures. Suppose America can sell us wheat at 30s. a quarter, and suppose ours costs 32s. 6d. a quarter. That is a gain of th in the cost of wheat. We get a loaf for 3d. instead of having to pay 34d. That is all the fine phrases mean. What do we lose? We lose the beauty and health of our factory towns; we lose annually some twenty thousand lives in Lancashire alone; we are in constant danger of great strikes; we are reduced to the meanest shifts and the most violent acts of piracy and slaughter 1 Blatchford, God and My Neighbour, p. 154. 2 Blatchford, Merrie England, p. 33. |