STATE SOCIALISM AND THE NATIONALISATION OF THE LAND.*

New Zealand Herald, Volume XXI, Issue 6966, 15 March 1884, Page 9 (Supplement)

STATE SOCIALISM AND THE NATIONALISATION OF THE LAND.*

Usder the form of a pamphlet bearing the above title, Mr. Fawcett has published, in . advance what will be an inserted chapter in the forthcoming new edition of his wellknown " Manual of Political Economy." He has been moved to do this by the publication and extensive circulation of such books as Mr. Wallace's "Land Nationalisation" and Mr. Henry George's "Progress and Poverty," books savouring of that form of. Socialism which looks mainly to the inters ference of the State for the improvement,of: the condition of the people, and which in Germany is connected with tho name of Lasealle. Whatever so distinguished an economist as Mr. Fawcett may advance upon , such subjects deserves attention ; . nor will the condemnation which, in the main,.he passes upon the various propo&ls discussed lose weight from the consideration, that; as a statesman and a Minister, he has given; ample proof of his sincere attachment to liberal principles, and that he is'certainly not the man to be scared by a mere bugbear, such as to many the word "Socialism" is.. The problems discussed being all of more or leas practical interest to the people of. the Australasian colonies, we shall endeavour to, give a brief analysis of Mr. Fawcett's;views, with tho object of drawing attention:to the pamphlet itself. The proposal which has furnished ,the: pamphlet with the second part of its title, tbat, namely, of the nationalisation of'land; is first reviewed. If it is to be carried; out, cither, we are told, private .owners: mu3t be dispossessed without adequate compensation or they must be bought outatthe, market value of their property. To seize the laud without giving any compensation at all to owners who have perhaps acquired their rights by actual purchase aodlcorc&inly have been practically guarateed by the State in the possession of them, however acquired; : would be both unjust and, as destroying.that confidence in the sanctity of the rights of property which is essential to the''develop-! ineut of states, impolitic. To continue to . them for a certain number of years, the. pre- ■ sent rent as a terminable annuity would be merely to alleviate and thinly disguise the spoliation. Norwill the working classes, if they ' are wise, suppose that it is only the wealthy who would suffer. The working man who, by investing his savings in a building Bociety; has become the owner of the house in.wbich, he lives would find the land on which, it: stands taken from him. If, on the other hand* full compensation is to be paid; the.. State will be under the necessity of raising* ; sum equal in Great Britain to three times, : the amount of the National Debt ;and this immense sum would be raised uuder unfavourable conditions, since the floating of so , vast a loan could not but depress thorcredit of the State. The interest on it must be obtained either wholly by the exaction, of rent or partially by this and partially: by an increase of general taxation. It the former*, the land being let by public competition, the occupier will be no better off than before ; for . it is a fallacy to suppose that the State.can afford to be less rigorous in the exaction of rant than private owners. If the latter, not onlywill the class of those fortunate enough, to!, become occupiers have unjustly shifted a. portion of its burdens on to. the shoulders'of the general public, but a door will have been, opened to jobbery and injustice in the selection of the individuals to be benefited and in. the allotment of the land, which, of ' course;, varies in value, amongst these. Next we have an examination of J. S. Mill's famous theory that the (so-called) "unearned increment" should be absorbed by the State. If so, fairness would'require . that what the Duke of Argyll, if we ber rightly, in a letter to the Times, called the "unearned decrement," should ' be made good to private owners. In the case of .every other form of investment the investor takes alike the chances of an "unearned'increv ment" and those of an equally unearned: decrement. Why then should the investor, in land be required to take all the risks of loss without any of the chances of gain ? Attention should rather, Mr. Fawcett thinks, . be directed to the removal of all ' artificial restrictions which limit the amount of land coming into the market, such as the laws'of, primogeniture, settlement and entail; and a costly system of conveyancing. Thus far we have followed Mr. Fawcett in discussing the proposal as applied to countries which, like Great Britain, have been in a settled condition from time immemorial. In the case of young countries, which are still free to do sb they will with the land, or. at least a large portion of it, he thinks that, the State will do well to retain an interest in the shape of an incommutable ad valorem land tax, say one-tenth or one-twentieth of : the actual value ; which would, of course, be ■ re-assesaed from time to time. .By : this. means the State would receive a share of tho. "unearned increment." The case of India is quoted. In that vast country the State owns almost all the land'and draws-from it,' in the shape of land tax, a sum almost equal < to the product of all the Imperial taxes. ■ In : . one portion of the country, indeed, namely, that part of Bengal which was affected by the ""permanent settlement" made by Cornwalli,i in 1753, the rights of proprietor- , ship have been surrendered to a class, the zemindars or tax lolleotcrs, and the result has be .n to benefit, not the occupiers, but I the members of the favoured class. I Having thus dealt with the various forms of land nationalisation, Mr. Fawcett passes c- to the proposal to throw upon the State the'construction of railways and large publio works in general. If such works afford a fair prospect of reasonable profit, they will, in countries in which private capital abounds, * State Socialism and the Nationalisation of the Land. By the lU. Eon. Henry Fawcett, II.P. London; Macmillau and Co.

be carried out by private enterprise.' If not, there is no reason to suppose that the State will be able to work them more remuneratively. .. The loss, then, will be met by taxation, the machinery for the collection of which .will be .costly, whilst it-will also )es«en the ..amount of money .-available for employment in commerce..;. In ;espe-. cial "is the - theory, so . largely,, put ■in practice , in .France, that it is the duty; of the State .to -undertake public works in order to.provide work for,, the unemployed, with its attendant evil of the unnatural aggregation in particular districts of work-, men,, who, on> the completion of the work which .drew them - together, remain, unemployed and ready to.embark in revolutionary, schemes, condemned. Mr. Fawcett, howdoes not. touch: upon the.case.of. a young country in which: private capital is, for the time, being, insufficient for the accomplish'meht ;of works, necessary, for the development of tho land and likely to be ultimately, though, perhaps not immediately,, remunerative.'

Co-operation is, in the judgment of Mr, Fawcett- most valuable, but nothing would be,.more fatal to than encouragement ; to reliance on State aid :in time of djffic.ulty ;. Bince this would afford ,a. temptation, to'the. neglect of the ordinary rules of commercial prudence. ■■, A favourite: scheme' with some politicians is that the State should help small farmers, by means of loans,- to become proprietors of the soil which, theiy cultivate.- But, it the security is good, private capital will do all that is needed ; if. not, loss must ensue, and this loss must be made. good, by the taxpayers in general. Nor could the assistance of the State be given only to those desirous of acquiring land - the townsman would justly claim that the State, which had laid increased: taxation upon him to assist the agriculturist in becoming the owner of a farm, should, in like mannier,. assist himto acquire a house. And i't may -.bes- regarded as certain that in times of depression the many small debtors of the State would enter upon, political agitation, with, the view of obtaining the remission of, their debts.

■ Proposals for national.: insurance find 1 :ho greater favour. If the funds are to be raised by the compulsory payments of all, the system will* assuredly, provoke hostility, whilßt.it will be difficult or impossible tovge.t their contributions from the unemployed and those who, though, employed, are earning only a bare subaisteuee. Thrift, too, and the ordinary methods of making provision for the future will bo discouraged. If a special tax is to be levied from the employer, the burden will nevertheless ultimately fall upon the .employed. For, first, the employer may reduce the rate of wages. Secondly, he may raise the price of his commodities, and, since the working class, from its numbers, provides by far the greater part of the custom,, this claßS.will'hav.e to bear the greater part of the increase of cost'. But if, thirdly,, neither are wages lowered nor prices, raised, the business of manufacturers will become less profitable and, therefore, will attract less capital;; and thus there will be in the end lens employment.

The interference of the State or of municipalities in the provision of dwellings for the poorer classes should, says Mr. Fawcett, be limited to what is nefceseary upon sanitary grounds. Any attempt to keep rents below the rate at which they would be fixed by competition in the open market would result in benefiting the favoured few at the expense of those not fortunate enough to secure the privilege of becoming occupiers of the buildings erected. Indeed, in the ease: of these, the very evil which was to be cured wpuld be aggravated, since the increased' pressure of rates and taxes would diminish the portion of earnings available for rent.. Rather should the working classes be encouraged to help themselves by means of building societies.

' State Sayings Banks are pronounced' to: 'have: effected unmixed good ; but mischief would result should the State undertake to fay higher interest upon deposits than it could properly afford, at the expense: of the community ; and. a departure from sound: principles once made, the rivalry of political parties for popular favour might lead to. an indefinite extension of the mischief.

After pointing out the necessity of safeguards in establishing or maintaining ,ppor laws;, which, though undoubtedly based upon Socialistic principles, are not to be .condemned on. that account merely, 2vlr. Fawcett proceeds to deal with the question of tho interference of the State in education. As this subject is ono of eapecial interest to New. Zealand just now we will give his remarks in full, after reminding our readers of one or two facts as to the system at prcsnnt in force in England, to which he alluded. In that country, whilst voluntary agencies, such as denominational schools, are recognised, that; of the State may be invoked whenever a majority of the inhabitants of any district determines to elect a school board. These boards correspond, roughly with our school committees, but there is no Board of Education, between these and the central authority, the committee of the Privy Council for Education. Education is by law compulsory, and, in all districts which have Board schools, paid visiting officers are employed to brm 1/ i !!' iiding parents before the magistrates. Iu r.t-aa schools a fee, fixed by the Board according to the circumstances of tho majority of tho population of the district, but limited by la,w to hinepence a week and in praotice rarely approaching that amount, is lovied for every child ; but arrangements are made for the payment of this fee out of the proceeds of the rates iii cases in which the parent or guardian can prove his inability to pay it. Further; a. large portion of the sum voted for education goes to provide encouragement to the teaching, and study of special subjects beyond the range of elementary education proper, in the shape of payments to teachers whose pupils pass the examinations of the Science and 'Arc Department or the examinations in specific subjects held by inspectors* and prizes, medals, certificates, etc., for the successful pupils.

These are Mr. Fawcntt's words:—"Proposals are also frequently brought forward to widen tho application of the principle involved in poor-law relief. Thus there are ■ many who urge that as some of the poor find: it difficult to pay for the education of their children, free education should be given at the public expense to all who choose to avail themselves of it. Amongst the pleas that are urged, in favour of this proposal, it is said that as the money which, free education would, require would be contributed by the taxpayers and ratepayers of the country, parents would; still pay for the education of their children, although in an indirect way. Precisely the same argument would justify such, an extension of the. present poor-law system as would, cause maintenance at the public expense not to bo confined, as.it is now, to the destitute; the right of enjoying it might also be conferred upon, all who' choso to avail themselves of it. It is also sometimes argued that a system of compulsory education.. has. been introduced because it is in the interest of the State that the community should be properly educated, and that therefore, as the arrangement is carried out in the interests of the State, it is only fair: that: tho. State should bear- the. .ex-, pense. But if this principle is accepted the responsibilities of the State, might be indefinitely increased. It is to tho national ■advantage that the people should lie well fed, well clothed and well houßod ; therefore it might be proposed that the feeding, clothing, and housing of tho people should be undertaken by the State; It is, moreover, .to be remarked that . the chief justification for tho interference between parent and child, involved .itt compulsoryeducation, is to. be sought in the fact that parents who ..incur the responsibility of bringing children into the, world ought to provide then* with education, and that if this, duty is negleotcd the State interposes as the protector of. the child., It. no doubt may be said that a very large part of the expense of popular education is now defrayed by grants either from Imperial or local . taxation, and that ,as consequently: so great an advance has been made towards free education, no harm could result from its complete introduction. In our opinion, however, great care ought to be'taken to preserve some ; recognition of the individual responsibility which eve- 7 parent owes to his childron in reference to education, 1 and instead of entirely sweeping away this responsibility, the., people . should,, be rattier" encouraged to regard the pnsent system or ly &b a temporary arrangement, and that as they advanced,' the> portion of .the charge for the education of their children which can now be shifted upon' others should, instead of being inoreaied, be gradually diminished."