THE FETTERS ON INTERNATIONAL TRADE

 ————

Hot Bricks at Geneva

BY HARTLEY WITHERS,

 THE DISTINGUISHED ECONOMIST.

An article on International Finance by one of Britain's Greatest Experts on financial and commercial matters, published by special arrangement.

It is now some years since the late Dr. Walter Leaf expressed the opinion that Europe was heading for economic suicide owing to the tariff policy which has been prevalent there since the War. As a scholar and a banker Dr. Leaf was one accustomed to weigh his words carefully, and he made this statement in his capacity as Chairman of the International Chamber of Commerce in order to call the attention of public opinion to what he believed to be the probable consequences of the policies which the Governments of the various countries of Europe were pursuing.

 Not long after there appeared the famous "Bankers' manifesto" which was unhappily so described since it was signed by a large number of distinguished gentlemen who were not bankers, but were prominent in industry and commerce. It stated that there can be "no recovery in Europe until politicians in all territories old and new realise that trade is not war, but a process of exchange, that in time of peace our neighbours are our customers, and that their prosperity is a condition of our own well being. If we check their dealings, their power to pay their debts diminishes and their power to purchase our goods is reduced. Restricted imports involve restricted exports and no nation can afford to lose its export trade. Dependent as we all are upon imports and exports, and upon the processes of international exchange, we cannot view without grave concern a policy which means the impoverishment of Europe."

 Since then, as we all remember, there was a great economic conference at Geneva which talked very eloquently round the subject of the hindrances to trade which are imposed in greater or lesser degree by all the leading Governments of the civilised world, in a mistaken endeavour to increase the prosperity of their countries by restricting their commercial activities. At the same time, the Council of the League of Nations set up a consultative Committee of the International Economic Organisation of the League to follow the application of the Economic Conference recommendations, and it held its first meeting in the week beginning on the 14th May. The chief purpose of this first session was to examine the work which had already been accomplished in carrying out the recommendations of the Economic Conference. Its counsels were assisted by a memorandum in the form of a "Green Book" drawn up for its guidance by the Economic Organisation of the League summarising the actions which had already been taken to put into practical effect the measures recommended by the Conference. As quoted by 'The Times" of 14th May, it began its summing up of the general situation by saying: "The tariffs actually in force at the present date appear to be on the whole higher than those in force when the Economic Conference met in May 1927." 

 At first sight it would, therefore, appear that the practical effect of Dr. Leaf's warning, the Bankers' manifesto, and the Economic Conference of last year, has been rather less than nothing, and this is, in fact, the conclusion that most people will be inclined to draw from the facts so bluntly stated in the Green Book. It goes on, however, to comfort us by saying that in May 1927 a number of new tariffs were under consideration by various Governments and Parliaments, which were much higher than the tariffs hitherto in force, and that the tariffs actually adopted are, on the whole, considerably lower than those then proposed.

 It thus appears that such is the craving of human nature to restrict its own trade activities by keeping out foreign goods, that the tariffs which were heading Europe for economic suicide, and have, in spite of the Economic Conference been made rather more efficient since it sat, would, if it had not been for the impression produced by the Conference, have been higher still. If this is all the comfort that can be administered to those who want to see the prosperity of Europe, which is so important to the prosperity of all the world, not only restored to its former level but carried up to the much more elevated heights it is capable of reaching, the outlook for European recovery does not appear to be particularly promising; and the discussions at the meeting of the Economic Committee, in so far as they were summarised by the inevitably abbreviated telegrams sent from Geneva, give rather the impression not of a determined effort to face a serious problem, but of the delicate hesitation of a number of tenderfooted cats trying to walk over a floor of hot bricks.

 It is satisfactory to note that the English representatives distinguished themselves by plain and serious speaking. Sir Arthur Balfour, while admitting that the results of attempts to remove trade barriers were rather disappointing and that a good number of increases in tariffs had taken place since May 1927, thought that the suggestion of a tariff holiday was not enough. It was not, in his opinion, sufficient merely to stabilise the present level of tariffs. The fact that, in order to produce greater prosperity it is essential to lower tariffs, does not seem to be sufficient argument for refusing to entertain the suggestion that at least their further raising should be stopped for the time being but Sir Arthur, in his desire to avoid too general and ambitious methods, suggested that it might be possible, instead of dealing with tariffs as a whole, to sub-divide them into their constituent industries and to try to reduce tariffs industry by industry. This ingenious suggestion appeared to meet with general approval, Mr. Pugh another English representative, was more outspoken in expressing his disappointment at the way in which the various Governments had treated the various resolutions of the Economic Conference, saying they had only paid lip service to it, and Mr.. Walter Layton, the Editor of the "Economist", proposed a series of resolutions, one of which embodied a request that the upward movement of tariffs should cease so as to give a favourable atmosphere for the discussion of reduction. This apparently was asking for too much. M. Serruys, who throughout had adopted an attitude of great caution, stated that Mr, Layton's proposal attempted to go too fast and too far, maintaining that the Economic Committee of the League could not order Governments not to touch their tariffs pending their deliberations.

M. Loucheur, who has held high political office in France, went so far as to contend that the only effect of reducing tariff barriers would be to transfer unemployment from one country to another, thus apparently questioning the whole purpose for which the Economic Conference had been appointed. His line of argument is one, however, which is commonly followed by less distinguished exponents of international trade problems. It leaves out of consideration the important fact that goods cannot be imported into any country unless some equivalent in value is exported in order to pay for them. If we imagine the example of a country which we will call Ruritania, which has built up a textile industry behind a high tariff wall with the result that all its inhabitants pay much higher prices for a bad article, and that the export trade of Ruritania is restricted because the textiles which used to come in from abroad are now manufactured at home—if Ruritania then reduces its tariff on textiles, manufacturers of the countries which can make them cheaper and better, will come in, all the Ruritania consumers of textiles will get better articles more cheaply, and the Ruritania exporters of commodities which Ruritania is especially well qualified to produce, will find a freer market for their products. So far from transferring unemployment from one country to another, the reduction of tariffs would at the same time give the consumer a reasonable chance of getting good articles such as he used to enjoy before the War. But as long as false patriotism blinds us with the delusion that it is wrong to buy foreign goods there is little hope for real prosperity in international trade.

Papuan Courier (Port Moresby, Papua New Guinea), 3 August 1928

http://nla.gov.au/nla.news-article251065157

A PESSIMISTIC OUTLOOK

 "Democracy in Crisis," by Harold J. Laski London: Allen and Unwin Ltd) 11/3

The critical position of democratic government is Professor Laski's theme. In the United States, he points out, banking, power, oil, transport, coal—all the essential services upon which the public welfare depends,—are vested interests in private hands; in Poland, Hungary, Rumania, and Jugoslavia the pretence of Parliamentary democracy has been abandoned; in Japan a military oligarchy is in charge; Spain has revived a Parliamentary regime, "but who can call it stable?" The South American republics continue their unenviable record of casual revolution; China is the prey of bandits; and Turkey and Persia have changed from dictatorships on the Eastern to dictatorships on the Western model. Only the British Dominions, Holland, Belgium, and the Scandinavian countries remain, with Switzerland, at all firmly wedded to a Parliamentary system; but the economic position of Australia makes the persistence of parliamentarainism a matter upon which doubt is permissible. In explanation of his contention about Australia, Professor Laski says :—" A country mortgaged to absentee creditors cannot easily maintain a high standard of life for the masses and continue to pay the interest on its debt abroad. If it defaults upon the debt its international position becomes dubious; if it meets its obligations a high standard of life becomes inaccessible to all save a small wealthy class. Is it likely that universal suffrage will produce the conditions upon which the security of capitalism depends?" For all the evils that are afflicting the world Professor Laski blames Capitalist democracy and the disturbing effect of the war. Certainty has been replaced by pessimism. The Western way of life is in the melting pot. The ancient East, so long content with a passive aquiescence in the ascendancy of the West, has issued a challenge to those who seek to preserve the conditions of tutelage. Professor Laski makes this ominous addition to this gloomy summary :— 

"The search by the intelligentsia for new canons of behaviour is like nothing so much as the last period of the ancient French regime." Obsessed by his own conception of what is happening, Professor Laski looks for the remedies. The first that he finds is the realisation that the central fact of the age is economic international independence. We should, he advises, try to discover the formulæ of an international society. The sovereign national state should be abrogated and there should be international control of currency, tariffs, migration, foreign investment and conditions of labour. "We are dominated," he declares "by a communal psychology, which thinks essentially in terms of the national state; can we rapidly transfer our thinking to the new plane that an international society implies?" Speaking of Great Britain in particular, he discusses the wisdom of transferring "a capitalist into an egalitarian democracy," and he predicts that the attempt will be made when the Labour party obtains an electoral majority in Parliament with consequences that he himself does not contemplate with equanimity.

Argus (Melbourne, Vic.), 8 July 1933 http://nla.gov.au/nla.news-article4747508

"NO CLEAR DIRECTION."

 Professor Laski Discusses Roosevelt.

CONTEMPORARY America is a bewildering spectacle; I returned to England after five weeks with a sense that here, in comparison, were stability of purpose and direction of effort! It is true that the new American Government is the best since the end of the war.

It has courage, it has initiative, and, in an important degrees, it has good will. But one cannot avoid the sense, as one watches it at work, that it is overwhelmed by the complexity of its task; that it has no clear direction in which it is seeking to move; and, not least important, that the stage of evolution the American economic system has reached is unlikely to permit it the luxury of the wholesale economic reconstruction America so patently requires (says Professor Laski in the London "Herald").

What is being decided in America? Essentially, I think, the present phase is the end of the struggle between the little man and the great combination for the control of the sources of productive power. As yet, in a European sense, there is no Labor movement in America; the trade unions, with, but one notable exception, lack any serious political sense of the technique required for the defence of the wage-earning classes.

Political Issues.

The major political issues are, therefore, what they were in Great Britain when Liberals and Conservatives dominated the scene. The policies pursued by the Democrats do not think of issues in terms of the nation's mastery of its life.

They conceive of the achievement of an equilibrium in which the independence of the small owner-merchant, farmer, manufacturer, or what not, is secured.

But this is a futile attempt to arrest a technological evolution in which the small producer is bound to go to the wall. Mr. Roosevelt is seeking to protect him by a policy of regulating capitalism.

At the moment, he has a free hand simply because the Republicans are so discredited. But his effort depends upon a rapid recovery of prosperity. If that does not come, he will lose his hold of Congress at the next election, and, with it, his initiative in legislation.

In that event his last year of office will be barren; and he will hand over to the Republicans—who stand essentially for big business—a highly centralised political machine more apt to the development of industrial feudalism than the world has seen in modern times.

Workers' Outlook.

The American working man will, under those circumstances, be proletarianised under conditions which will make the task of organisation more arduous and more bitter than it has been anywhere since the industrial revolution.

What I felt in America was that the whirlwind of depression had come so quickly that no Government could bridge the gap between the historic psychology of its electorate and the measure required for reconstruction. That is why, I think, the Presidential policy will be regulation, where the facts require socialisation.

Roosevelt Doomed.

That is why I believe that, despite his profound desire to help "the forgotten man," President Roosevelt is doomed to defeat; he is trying to do with the American economic order things its environment does not make possible.

And this is why I come back to England with a profound sense that our outlook is a more hopeful one. For though the experimental temper of Washington is incomparably better than the reactionary do-nothingism of our own Government, here, at least, the lines of division in policy are clear.

The British people have given their Government as wide a mandate for private enterprise as it has ever received; it is terribly and convincingly clear that it has no notion how to make use of it.

The alternative in this country is not, as in the United States, a policy of limited control. The alternative is a clear policy of wide, and rapid socialisation for which the  psychology of the people is being increasingly prepared.

If there is no European catastrophe, if, further, we can count upon respect for constitutional principles, the next years in England ought to give the Labor Party the most creative opportunity in its history.

Compare that situation with the American position. There are 15 million unemployed who with their dependents probably constitute a population greater in number than the whole of our people.

Great schemes must develop, like unemployment insurance, of social welfare, for which the necessary Civil Service will have to be improvised. Control of banking, hours of labor, property-rights, will have to be invented; and these experiments will have to run the gamut of a Supreme Court which is nothing so much as the final defender of economic privilege. That is not all.

States And Federation

The relation of the States to the Federal Government is largely archaic; yet it will be astonishingly difficult to secure its radical amendment. The temper of the people is ardent for change, but it is still set in an overwhelmingly individualist environment. Labor is badly organised and politically unconscious.

 There is no well-developed co-operative movement. The whole social life of America, in a word, is still planned upon the assumption that it is the fabled land of opportunity. And only the actual vision of America can make the observer realise the volume of reconstruction, psychological and institutional, which the new environment requires.

I did not feel that the American Government has either the power or the institutions essential to the task it confronts. It is still, as a Government, largely thinking in terms that the conditions have made obsolete.

It is a "Liberal" Government at a time when the recipe of Liberalism has no applicability to the issues before us.

Inflation?

It may do something by inflation to relieve the terrible pressure of mortgages and debt-interests. It may ease the tariff-barriers which have so woefully handicapped international trade.

It may establish a sounder banking system and offer a greater security to the investor. It may promote schemes of social welfare on the lines of the legislation fostered by the Liberal Government of 1906. But even supposing that it achieves all these things, it will still have left the effective economic power of the community in the hands of the few.

It will still not have been able to plan an America in which there is even an approximation to an equal claim on the common good.

It is no doubt true that the motives of Mr. Roosevelt and his colleagues reveal a far more liberal and creative temper than those of the "National" Government. 

No Organised Workers

But what is lacking in America is a seriously organised and self-conscious working class which sees the problems of power and is prepared to think in those terms. Until that epoch arrives in the United States I find it hard to see how any progressive movement can have behind it the driving force which brings success.

There may be sporadic improvement. There may be well-meant effort to anticipate and stem working-class discontent before it assumes unmanageable proportions. But there will be no decisive attack on the central citadel of power.

In Great Britain it is toward that decisive attack that we are marching. There is no need, Heaven knows, to anticipate that the task will be other than a very difficult one; the British Labor Movement is learning slowly, but, I think, steadily the lessons of 1931.

But at least the character of the alternatives is with us one that is increasingly obvious. To retain the present social order means to retain the present drift and misery and inability to plan in a wholesale way.

A government of the Left in these next years means experiment with the vital foundations of the national life. We have reached a stage in our evolution where that experiment is the alternative to disaster. And it is because a government of the Left may still be the choice of the British people that I find here a prospect of hope not yet discernible on the American horizon.

http://nla.gov.au/nla.news-article185468576

SOCIALISM LOOKS AT UNIVERSITY

 SUBVERSION BY SUBSIDISED PEDANTRY

— PROFESSORS AND PLANNED ECONOMY

(By SOLOMON BRIGG.)

 (No, 24.)

IN previous articles we have been examining the technique of Capitalism facing this the major crisis of its existence. In turn we have analysed the Fascist experiment, the position of the Press, certain phases of financial control, and the insidious attempt to undermine responsible working-class organisation by suborning responsible working-class executives.

 One of the most recent phases of declining capitalism has been its growing consciousness that an enlightened democracy represents the most serious challenge to the continuance of its exploitation of the masses. In America, Theodore Dreiser, Sherwood Anderson, Upton Sinclair and John Dos Passos have brought to literature a recognition of the social necessities of the times, and ripped away the conventional hypocrisy cloaking the vices of a materialistic age.

 In England, Bernard Shaw with his mordant pen has in the "Apple Cart" and similar works, shown the true significance of the social struggle, Harold Laski has remorselessly analysed the political concepts from London University; G. H. D. Cole has advocated Fabianism from the shelter of Oxford; whilst in literature J. Middleton Murry, the late D. H. Lawrence and more recently Aldous Huxley have shown that the intellectuals of the period all realise its deficiencies due to the failure of capitalism to assess true social values.

 Aldous Huxley in "Brave New Worlds" is seen by John Strachey as sending the "long, delicate, probing fingers of his analysis into every corner of capitalist society. Go where you like, 'do what you will,' you will never escape from the smell of ordure and decay." 

That the Australian Government censored this volume from the gifted pen of England's most brilliant young literary giant is thus seen in its true perspective. His Utopia is a repugnant one, machine conceived and machine built, and its automata may well be accepted as the most devastating destructive criticism of the machine age yet essayed in literature. But authority is even more restive under satire than the philippics of its avowed opponents.

 Effective Contribution

 In England the London University has been long a meeting place for intellectuals and social theorists, free to promulgate their views, however dangerous from the point of view of the established order. Such freedom of thought was rightly regarded as the most effective contribution to intellectual democracy achieved in any part of the world. Laski in his recent work, "Democracy in Crisis," felt himself free to pursue his analysis even as far as a consideration of the possible reactions of the Crown itself, and Middleton Murry in the "Adelphi" is free to consider the application of revolutionary Communism to Britain without calling down the wrath of the authorities.

 Professor Albert Einstein, the world's greatest physicist, found sanctuary from the excesses of Nazi-ism in a Chair at Oxford University, and no one questioned his political views prior to his appointment, although everyone recognised that they were not in harmony with present-day Capitalism. Nevertheless, when he appeared in the gallery of the Lords during a debate on the Semitic question, members of that House, models of Conservative propriety, broke the traditions of ages by rising in their places to applaud his appearance.

 Professor Soddy, Professor of Physics at Oxford, feels himself free to advocate radical monetary theories, and even officials of the British Treasury itself, like Mr. R. G. Hawtrey and Dr. Wm. Shaw, are free to enter the field of monetary controversy, expounding heterodox views on occasions in direct opposition  to those of their own department.

 Mr. J. M. Keynes, in his "Essays in Persuasion," finds that "the Economic Problem,  as one may call it for short, the problem of want and poverty, and the economic struggle between classes and nations, is nothing but a frightful muddle, a transitory and unnecessary muddle," but if he held the views of Marx he would still be free to practise his profession at Cambridge without restraint. So Marx himself, after conflicts in Prussia and expulsion from Paris, found sanctuary in London, and "Das Kapital'" represents the fruits of his research in the British Museum and London libraries.

 This led, no doubt, to his observation that Britain was the only country in which he had been that could achieve the emancipation of the working classes without recourse to violence but could, in fact, achieve it by utilising the constitutional processes at hand.

 All of which leads up to an examination of the position of the intellectuals in Australia, and the attitude adopted by the University administrators to freedom of thought and discussion. The noble conception of the University presented by Cardinal Newman has lost much of its lustre during recent years. As the economic struggle has intensified, Capitalism has realised the necessity of regimenting every agency to assist it in its fight.

 Politically-minded

 So the University as Australia knows it has become politically-minded in the very narrow sense of the term, and we have witnessed of late developments which show that it no longer can be regarded as an institution of scholarship and research, but rather as a very pliant instrument for the cultivation of a ''correct attitude." It is, indeed, significant that professors of history, and economics in particular, who have shown a disposition to examine facts from a detached intellectual standpoint and convey their judgement judicially and honestly to their students, have invariably been frozen out. In the realm of history, obviously, the man who essays a true economic interpretation of the principal phases of historic development and the motives actuating the leading figures engaged, may be regarded as a "social menace" by those desirous of maintaining the present system.

 If he exposes the cant teachings of the schools regarding the many "fights for freedom" and shows how Imperialism meant the exploitation of helpless colored races, how unscrupulous employers were protected by an equally unscrupulous State when exploiting the workers, particularly the women and children, he is immediately out of court— and incidentally out of a job. Obviously the results of such teaching will be quickly apparent in a new attitude in the schools, and instead of the vicious sentimentalism and gross misrepresentations of facts now posturing in the guise of history, the children who are not destined to reach the higher stages of the educational regime will be informed of the truth regarding the mistakes of the past.

 How many are conversant with the terrible story of the transportation of the early industrialists, who had the temerity to advocate some relief from the sufferings of their fellows? The history professor who deals with even the objective data of the Five Years' Plan is regarded as a dangerous influence, although in every other country in the world this experiment is being studied in order to ascertain the benefits of a planned economy, and already its principles have been adopted in a modified form in the tottering citadels of Capitalism itself.

 Banks' Briefs.

 But when we turn to Economics, the position is even more desperate. Indeed, in many of our public institutions we find occupants of teaching positions who are at the same time obviously in receipt of briefs from private banks and large trusts. How they reconcile their dual positions it is impossible to say, as in a crisis like the present they are called upon to interpret the functions of the institutions they are sponsoring, and analyse for their students the effects of the policy being pursued by the financial institutions.

 If they consent to become paid propagandists in a quasi-private capacity, how may they avoid becoming partisans in the lecture hall? But their position becomes altogether intolerable when called upon in their public capacity to act in the advisory capacity as monetary technicians to the State in defining relief measures. As the private banking institutions occupy the keystone of the present monetary arch their views are impossible of acceptance as the unbiassed judgment of independent experts.

 The Chicago economic professor, charged with being the presiding genius behind one of the most lucrative "rackets" in that exotic centre of the modern technique of speedy expropriation, is, if guilty, merely pursuing the present liberal tendencies of his profession to their logical conclusion. The threadbare plaint of the University pedant that he is removed from the worldly taints of commercialism is every day proving a mockery and sham.

 So the lecture hall has become the forum for the political and commercial aspirations of its dons. If it is intellectually and politically dangerous for a University teacher to examine in a controversial manner the teachings and practices of Communism it must be equally intellectually and politically dangerous for another professor to openly espouse the revolutionary philosophy of Fascism, or advocate the destruction of the existing Parliamentary instrument.

 Labor believes that it should be the function of the University teacher to examine untrammelled every modern political, social and economic phenomenon as it arises, without the interference of any group of muddling administrative penguins. The first duty of every teacher must be that he thoroughly examines all the data available, forms his independent judgment, and is then free to indicate his views. Otherwise he must submit all the objective facts in a dispassionate manner pro. and con., and leave his students to formulate their own opinions. Either method properly handled gives to posterity a chance, but there must be no suppression of material facts, as so often happens at present for the sole reason that such do not happen to coincide with the views of the teacher.

Labor however, must be determined that the channels of true education shall not be polluted by capitalistic subversion, by making the various University faculties merely a convenient method of subsidising propaganda to be disseminated there-from through every aspect of public life. Hitler in his expulsion of the University professors because of their refusal to embrace Nazi-ism or because of their religious beliefs, Jewish or Roman Catholic, has revealed the ultimate results of such a policy. 

Repugnant

 Similarly in Russia the historic pronouncement that the intellectuals of the old regime would provide a satisfactory "manure" is repugnant to our ideals of intellectual freedom. The Universities must remain sanctuaries for free and independent research and erudition, and, with the growing reliance upon technicians for guidance in a planned economy, it is more urgently necessary than ever before that they should remain such.

 Unfortunately Labor administrators in the past have often failed to appreciate the necessity of policing these important avenues by failing to secure adequate representation of working class thought on the administrative executives of these institutions. In the future development of our country this must be regarded as one of the most urgent tasks, and no excuse accepted for failing to carry out the declared will of the Movement in this connection. 

 The true conception of the position of the University teacher should be that he is equal in status with our present conception of the position of a Supreme Court Judge. His remuneration must be sufficient to enable him to devote his time entirely to his duties; and, being thus economically independent, a condition of his employment must be that he cannot accept retainers from outside institutions. He is indeed a servant of society and he should be at all times prepared to give his services to solving the problems confronting the State.

 Apart from these conditions, he must be free to advance any views which his studies inform him to be intellectually and socially correct. By adopting these principles, the University might be restored to its former position of honor in the community.

Labor Daily (Sydney, NSW), August 1933 http://nla.gov.au/nla.news-article236575880

"The Goose Step"

 Study of Education

In America.

In "The Goose-Step," Upton Sinclair has performed another service for the working-class propagandist. In "The Profits of Religion" he revealed the controlling economic forces in the American churches; in "The Brass Check" he vividly portrayed the stranglehold upon society, which the power of money exerts through its press; in "The Goose-Step" he presents a vivid analysis and description of the same forces at work in the realm of higher education.

His main thesis is that "our educational system is an instrument of special privilege." In this conclusion there is nothing new. It is at least obvious that the money-masters who dominate the economic, political, and social life of the modern capitalist State have a direct interest in determining the character of that higher education which exists upon their bounty. "Do you really think," he asks, "that the masters of the money trust, having bought up the last newspaper and the last popular magazine, would overlook your schools and colleges? If so, you are exactly the kind of foolish person they count upon you to be!"

Sinclair spares no pains to substantiate and make clear by specific instances the truth of his general thesis. He spent a full year studying American education; he read exhaustively upon the subject; travelled over the United States from coast to coast, interviewed over a thousand educators, students, parents, and administrators, and, having turned this mass of information over in his mind, he presented a case which is complete in every detail, startling even to those who know what to expect, vivid as a first-hand record. Its only defects are the dreary intellectual atmosphere revealed, and the almost monotonous reiteration of the vested interests controlling these institutions, and the petty suppressions and victimisations of which they are guilty—for neither of which features of the book we can in any way hold the author responsible. He merely describes what he finds.

Despicable Espionage.

The book is a wholesale indictment of American education under capitalist control. From Harvard, the University of Lee Higginson. and Leland Stanford founded by the Railway King, to Oregon, the University of the Lumber Trust. Chicago, the University of Standard Oil, the University of Automobiles, and the Western Colleges of the Smelter Trust, the same method of the interlocking directorates secures the same direct control by vested interests, with the same objects, and the same results as in Columbia, the University of the House of Morgan.

"To avoid misunderstanding." he sums up "let me state that I have not been able to find a single one of the great American Universities which is truly liberal or truly free." Professors and lecturers are carefully watched—in many cases there exist despicable systems of espionage. Those who come under the suspicion of the authorities are sacked, kept down or miserably forced to resign. Sometimes dismissal comes without explanation, like a "bolt from the blue," in others it is preceded by a personal interview, a close examination into religious beliefs and political opinions, a warning, an appeal for submission or a threat. Says Professor Charles Beard, joint author with James Harvey Robinson of text-books on modern European history; which show an appreciation of economic determinism and of modern industrial problems: "The status of a professor in Columbia is lower than that of a manual laborer." Says Harold J. Laski, who was forced to resign from Harvard by bitter personal attacks and who found a haven in the London School of Economics, where less attention was given to his political views: "The results of the American atmosphere are quite clear: (1) Many men deliberately adopt reactionary views to secure promotion; (2) many more never express opinions lest the penalty be exacted; (3) those who do are penalised when the chance of promotion comes." Some resist, like Professor Scott Nearing, who was dismissed from Pennsylvania for alleged blasphemy because he would not suppress his interest in the local abuse of child labor. The majority are broken and remain chained to the machine. They march in time to the "goose step" which is imposed upon them.

Lecturers are not free to express their views; students are not encouraged to think. What should be a stream of enlightenment is poisoned at its source. Anything modern in literature, history or social science is taboo. Sinclair recalls his embarrassment when, on leaving Columbia, he discovered that someone living had written a work of genius. "The students are living in a state of mind precisely as if the last 150 years had never happened to anybody." "Class ignorance, class fear and class repression are written over the modern curricula at Harvard, as at all other American universities." "More money is appropriated, more buildings erected, more students come piling in, but the soul of the place is dead."

Efficient Wage Slavery.

The final product of the system, concludes Sinclair, is dulness. There is obviously no place for truth and a vital interest in modern thought in a capitalist educational institution. This fact is not peculiar to America.

The value of this book is that here a competent investigator has taken what is probably the most complete development of the most direct control of education by the capitalist plutocracy, held it up for detailed examination, as it were, under a microscope, and enabled us to see what such control means.

The same conditions of ultimate capitalist control govern education in Australia. Here it is perhaps less direct and obvious, but the same atmosphere, the same limitations, the same resulting dulness all prevail, since capitalism requires of its educational system, for the most part, only efficiently trained wage-slaves, and its controllers fear the challenge of free discussion and enlightened education.

Daily Standard (Brisbane, Qld.),  January 1924 http://nla.gov.au/nla.news-article178974539

State Socialism is being evolved.

 IT is a favorite figure of speech to describe the present state of Europe as a vast military camp, in which so many millions of men, continually under arms, are merely awaiting the signal to slaughter each other wholesale and drown the civilisation of the Old World in a sea of blood. This Turneresque "symphony in black and red" has done yeoman's duty throughout the press for a good many years, yet the sanguinary cataclysm still keeps off and the camp simile with its contingent horrors is becoming just a trifle stale. If, however, we read the signs of the times aright, it should seem that a greater peril than even war is menacing European society, and that the millions of disciplined murderers and plunderers are themselves standing over a volcanic abyss, which may at any moment yawn to engulf them all.

For weeks past the principal items reported by telegraphic agents refer to wide spread manifestations of a revolutionary character, together with other symptoms sufficiently discomposing to that class of cabinet philosophers who hug themselves in the comforting belief that the existing order of society, as developed under the various phrases of modern civilization, is the best possible — for themselves. Strikes of colliers, iron founders, and other workmen, on a scale, and with a concerted unanimity of organization hitherto unwitnessed on the continent, have simultaneously paralysed industry in centres so numerous and so remote from each other as to argue the existence of some deeper moving cause than the old grievance of low wages to the laborer and disproportionate profit to the capitalist. In Belgium, in Westphalia, in Silesia the workmen have turned out by hundreds of thousands, and although by the joint influence of substantial concessions from the masters and threats of military intervention on the part of the authorities the men have very generally returned to their respective occupations, the spirit of discontent yet smoulders, ready to break out again under the stress of a bad harvest or a severe winter. In Northern Italy, where the rural population have for years past developed special forms of disease due to exposure and deficient nutrition, the crushing imposts rendered necessary by the insane determination of Italian statesmen to prop up the young kingdom with a forest of ironclads, has led to a rebellion of the unprotected peasants, which breaks out afresh as fast as it is put down. Strikes and Jacqueries are not of course novel phenomena ; but besides the magnitude of the numbers and interests involved on the present occasion, they are marked with special peculiarities, rarely, if ever, observed before, the occurrence of which may be of service in diagnosing the evil and discovering the remedy. One of these symptoms is the sympathy with which the demands and aims of the operatives on strike are generally viewed by the burgher or middle class; another, the obvious unwillingness of the governments to proceed to extremities for the purpose of restoring order. Both these tendencies are so unlike what has been seen on other occasions, so inconsistent with the usual intolerant and arbitrary temper of the "classes" referred to, that the latter must on some ground or other have come to regard their present position as severely imperilled, if not actually untenable.

 The converse of strikes, the combinations of labor to raise wages, are those combinations of capital to raise prices, which go under the name of "corners" or "rings." They are one of the lefthanded blessings that the old world owes to the new, where they were the direct fruit of the vast accumulations of capital in unrighteous hands that followed the War of Secession. It was in the years immediately succeeding that great national convulsion that the power of the purse, developed out of the hideous frauds and corruption incidental to the great army contracts, first made itself felt as a vast and often mischievous social factor. "Rings" batten on the oppression of the working classes and the blackmailing of the whole body of consumers ; and it is therefore not strange that with their appearance in the United States other correlated social phenomena, previously unfrequent or unknown, became common. The great strikes in the coal and iron districts of Pennsylvania and Ohio were a direct result of the concentration of the vast profits of railway carriage in a few hands, and the consequent screwing up of railway freights, which form so serious an item in the cost of foundry goods, to a figure that would let neither the ironmasters nor their men to subsist. Co-operation among the aggrieved sections of the people has since done much to tone down the outrageous exactions to which the American nation has been subjected by its self-made millionaires ; but the great strikes have left a painful memento of the stressful period that gave them birth, in the evolution of a previously unrecognised social entity, the "tramp." This unclassed being, who has since acquired fixed professional characteristics, and whose presence threatens to become a permanent evil, is to America the equivalent of the mass of inveterate pauperism that underlies European society. 

Now what do these facts tend to? Clearly, the remodelling of civilized society on a social, or more strictly a socialist, basis. Rings as well as strikes and co-operative associations are socialistic in their tendency, for although the aim of the first is to limit production and concentrate distribution for the benefit of a few, of the second to enhance the cost of production for the benefit of the producers, and of the third to promote a healthy balance or supply and demand for the mutual benefit of a limited circle of producers and consumers, they all three in their several ways are helping to work out the practical problems that must be solved before socialism can emerge from the realm of theory into that of practical reality. Some of these problems, for instance that of the possibility of controlling by any code of fixed rules the capricious and haphazard interaction of the many complex forces that determine such apparently simple processes as production and consumption, are already in course of partial solution, and this result is due in no small degree to the experience gained and the administrative machinery perfected by monopolists in the pursuit of their nefarious ends. By the tribute which their admirable organisation enables these vultures to exact from the muddled millions on whom they prey, a clear proof is afforded of the possibility of regulating, for the benefit of all, those wider social relations that centre in the state. The standing objection to every socialistic scheme has been the denial of such a possibility ; and since, for want of evidence, that objection has hitherto been deemed unanswerable, socialism, as an economic creed, has always fared badly at the hands of political writers. At the present day, some of the bolder speculations of socialist writers are being quietly translated into practice by statesmen representing the most diverse schools of political thought ; and even semi-absolutist governments like that of the German Empire, where "social democrats," as a political party, are persecuted with a relentless severity that will be satisfied with nothing short of extermination, State Socialism is being evolved in a variety of unfamiliar but possibly useful forms. Whether we like it or not, it is evident on all hands that the framework of a wholly novel disposition of social conditions is being pieced together, bit by bit, and that it will depend on the lessons in moral endurance and mutual forbearance that have been learned during the past eighteen centuries, whether the change, when it does come, shall be peaceful, or whether it is to burst on the world in a tempest of fire and blood.

Maryborough Chronicle, Wide Bay and Burnett Advertiser (Qld. ),  1889,http://nla.gov.au/nla.news-article146667720

The Gospel of Wealth.

 ———<>———

We publish to-day, by the special request of Mr Gladstone (says the Pall Mall Budget, of July 18), a remarkable article by Mr Andrew Carnegie, the well-known Pittsburgh ironmaster and millionaire, which appeared in the North American Review. The article had attracted the notice of Mr Gladstone, who has spoken in the highest terms with regard to it, and strongly urged its publication in this country. Mr Gladstone writes : — I have asked Mr Lloyd Bryce (North American Review) kindly to allow the republication in this country of the extremely interesting article on " Wealth,” by Mr Andrew Carnegie, which has just appeared in America ”

 THE PROBLEM OF THE ADMINISTRATION OF WEALTH.

 The problem of our age is the proper administration of wealth, so that the ties of brotherhood may still bind together the rich and poor in harmonious relationship. The conditions of human life have not only been changed, but revolutionised, within the past few hundred years. In former days there was little difference between the dwelling, dress, food, and environment of the chief and those of his retainers. The Indians are to-day where civilised man then was. When visiting the Sioux; I was led to the wigwam of the chief. It was just like the others in external appearance, and even within the difference was trifling between it and those of the poorest of his braves. The contrast between the palace of the millionaire and the cottage of the laborer with us to day measures the change which has come with civilisation. This change, however, is not to be deplored, but welcomed as highly beneficial. It is well, nay, essential, for the progress of the race, that the houses of some should be homes for all that is highest and best in literature and the arts, and for all the refinements of civilisation, rather than that none should be so. Much better this great irregularity than universal squalor. Without wealth there can be no Mæcenas. The “good old times" were not good old times. Neither master nor servant was as well situated then as to-day. A relapse to old conditions would be disastrous to both —not the least so to him who serves and would sweep away civilisation with it. But whether the change be for good or ill it is upon us, beyond our power to alter, and therefore to be accepted and made the best of. It is a waste of time to criticise the inevitable.

 THE CHANGE, AND THE PRICE WE PAY FOR IT. 

It is easy to see how the change has come. One illustration will serve for almost every phase of the cause. In the manufacture of products we have the whole story. It applies to all combinations of human industry, as stimulated nod enlarged by the inventions of this scientific age. Formerly articles were manufactured at the domestic hearth or in small shops which formed part of the household. The master and his apprentices worked side by side, the latter living with the master, and therefore subject to the same conditions. When these apprentices rose to be masters, there was little or no change is their mode of life, and they, in turn, educated in the same routine succeeding apprentices. There was, substantially, social, equality, and even political equality for those engaged in industrial pursuits had then little or no political voice in the State.

 THE PRICE WE PAY IS VERY GREAT.

 But the inevitable result of such a mode of manufacture was crude articles at high prices. To-day the world obtains commodities of excellent quality at prices which even the generation preceding this would have deemed incredible. In the commercial world similar causes have produced similar results, and the race is benefited thereby. The poor enjoy what the rich could not before afford. What were the luxuries have become the necessaries of life. The laborer has now more comforts than the farmer had a few generations ago. The farmer has more luxuries than the landlord had, and is more richly clad and better housed. The landlord has books and pictures rarer, and appointments more artistic, than the King could then obtain. The price we pay for this salutary change is, no doubt, great. We assemble thousands of operatives in the factory, in the mine, and in the counting house, of whom the employer can know little or nothing, and to whom the employer is little better than a myth. All intercourse with them is at an end. Rigid castes are formed, and, as usual, mutual ignorance breeds mutual distrust. Each caste is without sympathy for the other, and ready to credit anything disparaging in regard to it. Under the law of competition, the employer of thousands is forced into the strictest economies, among which the rates paid to labor figure prominently, and often there is friction between the employer and the employed, between capital and labor, between rich and poor. Human society loses homogeneity. 

THE MAN IS MORE IMPORTANT THAN THE MONEY.

 The price which society pays for the law of competition, like the price it pays for cheap comforts and luxuries, is also great; but the advantages of this law are also greater still, for it is to this law that we owe our wonderful material development, which brings improved conditions in its train. But, whether the law be benign or not, we must say of it, as we say of the change in the conditions of men to which we have referred: It is here; we cannot evade it; no substitutes for it have been found; and while the law may be sometimes hard for the individual, it is best for the race, because it ensures the survival of the fittest in every department. We accept and welcome, therefore, as conditions to which we must accommodate ourselves, great inequality of environment, the concentration of business, industrial and commercial, in the hands of a few, and the law of competition between these, as being not only beneficial, but essential for the future progress of the race. Having accepted these, it follows that there must be great scope for the exercise of special ability in the merchant and in the manufacturer who has to conduct affairs upon a great scale. That this talent for organisation and management is rare among men is proved by the fact that it invariably secures for its possessor enormous rewards, no matter where or under what laws or conditions. The experienced in affairs always rate the man whose services can be obtained as a partner as not only the first consideration, but such as to render the question of his capital scarcely worth considering, for such men soon create capital; while, without the special talent required, capital soon takes wings. Such men become interested in firms or corporations using millions; and estimating only simple interest to be made upon the capital invested, it is inevitable that their income must exceed their expenditures, and that they must accumulate wealth. Nor is there any middle ground which such men can occupy, because the great manufacturing or commercial concern which does not earn at least interest upon its capital soon becomes bankrupt. It must either go forward or fall behind ; to stand still is impossible. It is a condition essential for its successful operation that it should be thus far profitable, and even that, in addition to interest on capital, it should make profit. It is a law, as certain as any of the others named, that men possessed of this peculiar talent for affairs, under the free play of economic forces, must, of necessity, soon be in receipt of more revenue than can be judiciously expended upon themselves and this law is as beneficial for the race as the others.

 OUR DUTY IS TO DO WHAT IS PRACTICABLE NOW.

Objections to the foundations upon which society is based are not in order, because the condition of the race is better with these than it, has been with any others which have been tried. Of the effect of any new substitutes proposed, we cannot be sure. The Socialist or Anarchist who seeks to overturn present conditions is to be regarded as attacking the foundation upon which civilisation itself rests, for civilisation took its start from the day that the capable, industrious workman said to his incompetent and lazy fellow, " If thou dost not sow, thou shalt not reap," and thus ended primitive Communism by separating the drones from the bees. One who studies this subject will soon be brought face to face with the conclusion that upon the sacredness of property civilisation itself depends—the right of the laborer to his hundred dollars in the savings bank, and equally the right of the millionaire to his millions. To those who propose to substitute Communism for the intense Individualism the answer therefore is : The race has tried that. All progress from that barbarous day to the present time has resulted from its displacement. Not evil, but good, has come to the race from the accumulation of wealth by those who have the ability and energy that produce it. But even if we admit for a moment that it might be better for the race to discard its present foundation, Individualism—that is a nobler ideal that man should labor, not for himself alone, but in and for a brotherhood of his fellows, and share with them all in common, realising Swedenborg's idea of Heaven, where, as he says, the angels derive their happiness, not from laboring for self, but for each other—even admit all this, and a sufficient answer is, That is not evolution, but revolution. It necessitates the changing of human nature itself a work of æons, even if it were good to change it, which we cannot now. It is not practicable in our day or in our age. Even if desirable theoretically, it belongs to another and long-succeeding sociological stratum. Our duty is with what is practicable now; with the next step possible in our day and generation. It is criminal to waste our energies in endeavoring to uproot, when all we can profitably or possibly accomplish is to bend the universal tree of humanity a little in the direction most favorable to the production of good fruit under existing circumstances. We might as well urge the destruction of the highest existing type of man because he failed to reach our ideal as to favor the destruction of individualism, private property, the law of accumulation of wealth, and the law of competition; for these are the highest results of human experience, the soil in which society so far has produced the best fruit. Unequally or unjustly, perhaps, these laws sometimes operate, and perfect as they appear to the idealist, they are, nevertheless, like the highest type of man, the best and most valuable of all that humanity has yet accomplished.

 [TO BE CONTINUED ]

Tasmanian News (Hobart, Tas.), 26 August 1889 http://nla.gov.au/nla.news-article172872416

Mr. ANDREW CARNEGIE has contributed the " Gospel of Wealth " to a London journal. He is effusively described as a " well-known Pittsburg ironmaster and millionaire." He is, in fact, an adventurous Scotsman who has made a fortune in America in one of the districts where it has been proved by tho Atlantic Monthly that the wages are paid on an extremely low scale, lower even than prevails in England. We certainly do not find fault with him for making the most of the country of his adoption, any more than we should blame him because of the land of his nativity. But Mr.ANDREW CARNEGIE, having now become an ironmaster and a millionaire, is inclined to lecture the whole world, and to tell every son of ADAM, rich or poor, exactly what he ought to do in his particular station. The wealthy are to learn their duties from him, and the poor are supposed to stand agape at the benefits he condescends to offer them. Mr. ANDREW CARNEGIE is a man of wealth, and he poses before the world as if he were giving a donation to a Caledonian society and expecting the applause of the members. We have no doubt that the human race will rejoice in his patronage. But he once made a vain attempt to show Great Britain what her policy ought to be, and the effort was altogether in vain. We have some fears that the society of mankind may be equally perverse and stiff-necked.

A citizen of the United States, Mr. ANDREW CARNEGIE believes in advertising, and he has contrived to get the marvellous announcement that his opinions are published " at the special " request of Mr. GLADSTONE." His views, suddenly blazoned forth upon the world under such auspices, certainly demand attention ; and we can hardly do more than state them briefly. Mr. ANDREW CARNEGIE believes that there was a time in English history when the master and the workman stood together in the same social and political scale. If any students should think otherwise, if they should imagine that the master had a despotic power over his apprentices even to the extent of flogging them, then we may assume that he has missed Mr. ANDREW CARNEGIE'S idea of the development of society. But we are certainly surprised to hear that this ideal condition of an equality between master and workman was utterly bad. Manufacturing, it seems, was badly done, and the prices were excessive. We forbear, of course, to refer to the splendid work that came from the British looms even before the introduction of steam, or to the silver work that was one of the glories of the older industrial London, or to many other things that might be noticed. We can only follow Mr. CARNEGIE in his breath-less progress to the unequal condition of the nineteenth century. At the present time we learn with gratitude that the best work is done at the cheapest possible rate, a statement that reminds us of a "selling-off advertisement." But unfortunately the equality between master and workman has disappeared. Society has to pay a very high price for the cheap articles that it enjoys. Men and women are grouped together into factories, and the old relationship between the employer and his work-people has disappeared. It seems, so far as we can gather, that Mr. CARNEGIE is not personally acquainted with all his workmen, and that to many of them the employer is a " mere myth," a man whom they never see, and whom they cannot know. The master makes a profit, and the men make their wages, and there is no bond between them. On the one side the successful Mr. CARNEGIE finds, what many industrial pioneers have never found, that wealth accumulates in the hands of the employer. On the other side, he wishes to give his patronage to the wage earners.

Having got so far, we should naturally imagine that the " ironmaster and millionaire " of Pittsburg would seek to cultivate the acquaintance of all his workmen. This, however, is only the device, we may suppose, of aristocrats, who invite their subordinates to Christmas dinners and other festivities. At any rate, it is far from the millionaire's thoughts. He has decided to settle the whole disputes between capital and labour in one brief article. And in the pursuit of knowledge regarding human society we must follow his ideas. He has discovered that society has progressed from socialism to individualism, the meaning of which we take to be that it has advanced from the tribal to the American millionaire system. He has discovered further that even in America, the land of large fortunes and a stringent law of inheritance, too much may be made of individualism. He feels it to be his duty, therefore, in the interest of a struggling humanity, to reconcile these two things. From Mr. ANDREW CARNEGIE'S point of view the solution is very easy. There ought, of course, to be the fullest scope for individual effort and for money-making on the part of every citizen. It would be a total mistake to distribute wealth among the masses in small sums in the shape of increased labour or cheaper products. The average man could not put the money to the same beneficial uses as Mr. ANDREW CARNEGIE, who is helping on the development of humanity. On this point we confess that his arguments are convincing. He cites the example of Cooper's Institute, and asks triumphantly whether the donor could have done the same amount of good if he had spent his money among the poor in his lifetime. He refers with equal gusto to Tildon's Library, and asks whether the same benefit would have accrued to the community if the giver had distributed his wealth in small sums. He tells us that money used in charity is generally badly spent, and that we should only help those who help themselves. On the whole, we come to the very comfortable doctrine, which we should support on other grounds, that the man who has the faculty of accumulating money should be allowed to do so, because in order to accumulate he must know how to employ it in profitable industries. So far we might sympathise with Mr. ANDREW CARNEGIE'S triumph in his own arguments. There is no necessity for distributing any man's accumulated wealth. On the contrary, it is probably employed to the better advantage of the whole community than if it were broken up.

But now Mr. ANDREW CARNEGIE branches off into his theory. The man who makes money should be left undisturbed, but his family should not inherit more than a competency, whatever that may mean. The "almighty dollar " is a blessing if you live for it and accumulate it ; it is a curse if you inherit it. This is the new gospel of wealth. Increase the death duties, the probate duties, according to Mr. ANDREW CARNEGIE, and society will be at peace, and the millionaire and the pauper, the economist and the socialist, will dine together. It is difficult to say what society may do, but we venture to say that Mr. ANDREW CARNEGIE'S vulgar and arrogant self-complacency is no solution of any difficulty whatever.

Argus (Melbourne, Vic. ), 31 August 1889 http://nla.gov.au/nla.news-article6275267

A NEW VIEW OF DANGEROUS CLASSES.

 [San Francisco Bulletin ]

Mr. Howard Crosby, of New York, in a recent article in the North American Review, has brought forward an old view of a certain dangerous class in a new light. He points out the fact that we have been for a long time in the habit of looking for national disaster from the lower strata of society—from the ignorance and vices of the masses. There can be no doubt that most of the disorders which threaten the prosperity of great cities may be traced to these classes. Mob violence always begins in the lower strata. That was strikingly true in New York, more strikingly true in Paris, and less so in San Francisco, because the evils complained of in this city were not as apparent as in those older cities. But the writer points out that it is a superficial view which ascribes all the tumults and disorders which culminate in mobs and revolutions to what is called the vicious or non-property-holding classes. It has been the fearful oppression of the rich, greedy and voluptuous, which have made the working classes mere beasts of burden, which has brought on reaction and revolution.

The coarse vice which prevails in the lowest classes can be perilous to the State at large only as it is turned into insurrectionary channels by the gross injustice of the higher classes. This coarse vice may indeed do local harm, it may generate thieves, burglars, and murderers, and it certainly will do this, but the ordinary machinery of government is sufficient to keep these developments in check. The motives which lead to the local crimes are not those which produce revolutions. They are simply personal greed or enmity. These local crimes can seldom move a multitude, or, if they do, the movement takes the shape of a temporary riot. The lowest classes are in themselves the dangerous classes only so far as this. The greater danger — the danger compared with which all this local disorder is as nothing, the danger which threatens the uprooting of society, the demolition of civil institutions, the destruction of liberty and the desolation of all—is that which comes from the rich and powerful classes in the community. What we have to fear is the encroachment of these influential elements upon the rights of the people, until, under a sense of oppression, the people, who are naturally timid and slow to act in organisation, are forced into united resistance, which necessarily (from the constitution of the masses) becomes destructive to civilisation and social well-being. Mere demagogues, even with socialistic or nihilistic ravings, are of no avail with the masses, unless a real grievance of a formidable sort supports them. Herr Most is only ludicrous in America, but in Russia he would be a firebrand to a magazine. It should be our aim, amid our liberties, to prevent our country from becoming a Russia.

The writer goes on to show that the form in which the greatest danger is now threatened is a vast money power. The vast accumulation of money by means of mines and railroads has brought into dangerous prominence a great number of unscrupulous oligarchs, who are able to trample under foot all competition and all considerations of individual honesty and all attempts at honest legislation. The men who wield this power control Legislatures and often control courts. This is done in no ostentatious way. These men have their paid servants. They are everywhere. They sometimes sit upon the benches of courts. They are elected to Legislature, and in various ways they serve the masters who have created them. Dishonesty, which in a narrow sphere would send the individual thief to the penitentiary, works no evil to men who by combinations put up or put down the stocks to the extent of millions of dollars, and in that way rob the poorer stockholders of their small accumulations.

Besides the moral desolation caused by this aggregation of wealth in a few hands, the political safety of the country is especially endangered. The making and maintaining this concentered wealth demands a system of plunder and oppression of the poorer classes and of the public generally. Prices are made, not through the natural laws of demand and supply, but by "corners" and conspiracies. Fair competition, which is the life of trade, is utterly crushed by the giant foot of this money-swollen monster. A few monopolise the entire trade of any given article, by reason of their money power, remorselessly destroying any one who dare even to glean in the field they have made their own by robbery. The word "robbery" is not a misnomer, for the money has been forced from unwilling hands by immoral, though sometimes legal, means. A widow, having the care of a family of small children, puts her money in railway stock. She is advised to do so by a director in the railway. It is the widow's all. Soon afterwards this director, and a few with him, seeing the importance of their road and its capabilities, determine to secure a controlling interest in the stock for themselves, thus both increasing their investment in a profitable concern, and at the same time obtaining a power to do what they please with the road thereafter, as occasion may demand. Accordingly, their first step is to run the stock down. This they accomplish by paying agents to go to places where the stock is owned, and, by brief articles in the local newspapers, to insinuate that the road is shaky. Every little fact against the road is exaggerated. If a dividend had been passed in order to make an important improvement, this omission of a dividend is ascribed to the road's approaching bankruptcy. By these means the public are soon led to believe that the road is financially a failure. Our poor widow holds on to her stock, until from par it drops to 25. She is then thoroughly frightened. She hears many now say, " Sell out your stock or you'll lose all. So she sells her stock and loses three-quarters of her property, which even before was only enough to keep her and hers in the ordinary comforts of life.

The writer cites the instance of a college professor getting a meagre salary, holding a mortgage of 10,000 dol., by which holding his income is eked out. He pays 2 1/2 per cent, a year personal tax on this mortgage (250 dol.), receiving as interest only 3 1/2 per cent. (350 dol.) His neighbour, with 3,000,000 or more, does not pay a cent. of personal property tax, although he is the owner of more than fifty mortgages. There have recently been a number of striking illustrations of the rebellion of powerful corporations against the Government in the refusal to pay the taxes which have been assessed against them, and generally on pleas which the private individual did not think it right or expedient to make. But for a conservative man Dr. Crosby's hints savour of the commune or something akin to it.

But this state of things cannot always continue. The sense of oppression on the part of the people at large becomes deeper and stronger. They begin to learn that their reform leaders are brought up by the money power, and that the so-called reforms are but tubs thrown to the whale. They see that only violent measures can relieve them, and a common feeling of revenge unites them. Now comes the catastrophe. At the first stroke they find themselves a power, and when men first discover their power they are reckless how they use it. They carry destruction on every side. They revel in slaughter. They waste property. They burn dwellings. They overturn all institutions. They paralyse trade. They annihilate society. The tyranny of the moneyed units has accomplished what nothing but tyranny can accomplish — the united action of a heterogeneous and naturally unorganised populace. It has raised a spirit of evil which it cannot allay. It has unchained the tiger and whetted his appetite for blood. Those must not be considered as exaggerated prophecies. History shows that we are sober in our statements. The community cannot be plundered for ever ; combinations of capitalists and legislators to rob the poor for the benefit of the rich eventually meet with counter combinations which will not confine themselves to robbery. This is human nature as well as history. The present peril of our country is exactly here. The dangerous classes among us are those who are engaged in amassing colossal fortune — the giants who tread ordinary men under their heel, and care not how much the people suffer. They are absorbed by their own greatness, lifted by their wealth out of all sympathy with the mass of mankind, and live as if the world belonged to them. The cries of want and sorrow are unheeded by them, the appeals of charity and benevolence are spurned, the demand for co-operation in works for the public weal is slighted—while all their millions are poured into the channels of their own selfishness. In monarchical countries, so long as the people can find a living they will endure the oppression ; but in a republic like ours the time of account will come sooner. Here the people will not wait until they are ruined. They have some notions of rights, and some forethought of impending evil, and they will anticipate their own crisis by making a crisis for others.

The remedy which the writer advocates is that the dangerous classes must be rendered harmless by righteous laws, righteously administered. He holds, further, that there must be a limit to individual wealth, for the safety of the people. But here again our conservative writer is approaching dangerous ground. What is the limit ? The man who has acquired a hundred millions has done it by virtue of conditions which he has helped to impose, which have made a great many poor men. But is not the danger of stripping such a man, or of limiting his wealth to a moderate sum, nearly as great as the danger of a few extremely rich and unscrupulous men who in a few years by natural decay, will disappear from the community ?

Mercury (Hobart, Tas. : 1860 - 1954), Saturday 16 June 1883, page 2

IN LIGHT OF MODERN ECONOMIC KNOWLEDGE

 CONSIDERATION OF MANCHESTERIAN PRINCIPLES

NEED FOR MODIFICATION OF UNRESTRICTED FREEDOM

IN COMMERCE.

 To a large attendance of Economics Class (No. 1) of the "Workers' Educational Association Mr. Herbert Heaton. M.A., M.Com., delivered the tenth lecture of the course last night. The lecturer said :—

Before proceeding farther with our study of modern economic movements, it is necessary to survey the chief economic and social doctrines which have dominated men's minds during the last hundred years. To a certain extent individuals and governments act under the guidance of some theory. The conduct of men and the policies of statesmen usually have behind them a philosophy of life and statecraft. Often that philosophy is implicit, vague, and inconsistent; nay, more, it is frequently shelved when some strong claim of self-interest, some popular passion, or some urgent public evil calls for action in a completely opposite direction. The Anglo-Saxon race in particular makes principle its servant rather than its master, and although professing a certain faith, will act in direct contradiction to the fundamental tenets of that faith. For instance, during the first 50 years of last century the prevailing British philosophy was individualism; the State must not interfere with economic conditions. And yet, in view of the crying evils of factory employment, successive governments were compelled to disregard their political creed, and place restrictions on the work of women and young persons. In 1846 England abolished the corn laws, and deprived agriculture of any State support; that was individualism. Two years before women and children had been forbidden to work in coal mines; in 1850 they were forbidden to work in factories for more than 10 hours a day; that was the very reverse of individualism. Similarly in the United States the theory was laid down after the civil war that negroes should enjoy the same political rights as whites. But in practice this would have meant negro rule in some States, and therefore various devices were invented by which the blacks were virtually disfranchised. In war time nations subscribe to certain principles; but the sheer pressure of circumstances frequently compels them to put their principles into their pockets. Politics, in short, tend to be opportunist, meeting difficulties as they arise; but nevertheless, the voice of the philosopher makes itself heard at times; political parties adopt a certain point of view, dictated possibly by the interests of the leading personalities, and so, speaking broadly, we may say that the legislation of an epoch is based on some underlying principle.

—Liberty versus Authority.—

The two great alternative philosophies are those which centre on liberty and authority. The former seeks the wellbeing of mankind by allowing the individual the greatest possible amount of freedom. Legislation is to clear away obstacles rather than impose restraints. Interference, prohibitions, regulations, all are to be reduced to a minimum, and men left free to create their own conditions. The advocates of non-intervention declare that men know what is good for them far better than does the State; they maintain that State regulation checks enterprise, and hinders rather than helps progress. Therefore let governments keep their hands off economic and social life, and all will be well. Such an attitude assumes that the individual is capable of seeing and securing his best advantage; it presupposes a harmony between men in society; it estimates at a very low mark the intelligence of the statesman. It thinks of man and the State as antagonists, with the State a possible oppressor.

Opposed to this theory is that which demands for the State large powers of control. Those who urge this doctrine admit that a man may see the line of greatest advantage for himself, but his actions may be to the detriment of the State. They point out that many, by reason of some disability, are unable to act as they would wish, and may be trampled down by the strong. Individualism is a splendid doctrine for the strong and wealthy, but cold comfort for the weak and poor. Further, they declare that the State must think in terms of the State, and act in such a way as to foster development along the lines which are best for society as a whole. This in practice means the prohibition of certain activities which are harmful to the life, morals, or strength of the community (liquor control, public health); the protection of the weak, and the curbing of the unscrupulous strong (factory and land legislation, Plimsoll line, old-age pensions, &c.); the undertaking of works which are essential to national character and progress (education, roads, &c.); and the encouragement of industrial and agricultural development in a direction calculated to produce national strength and economic independence (tariffs, bounties, &c.). The theory may go so far as to demand that the State shall enter the field of production, and become the owner of the means whereby wealth is produced, distributed, and exchanged. Such a doctrine thinks of man and the State working in harmony; but it has no illusions as to the perfection of human character, and while acting as a guide, the State must also check man's evil, anti-social impulses, and foster his best interests as a member of society.

These two rival philosophies have alternately dominated men's minds during the ages. At times the latter has been uppermost, and been responsible for the erection of a substantial edifice of government authority. This in time has become oppressive, for the State often fails to see that conditions are changing, and insists on regulating to the point of excess. Hence, on the eve of a new era, authority tends to hinder the adoption of new ideas or devices: more progressive men therefore take up the opposite creed, denounce the State as an oppressor, and seek to overthrow its power. Hence comes a reaction, precipitated generally by some big revolution in politics or industry, and the elaborate structure of State control is destroyed. Liberty becomes king, and legislation removes barriers instead of erecting them. But in course of time liberty proves itself as oppressive as did its predecessor; injustices spring up, the weak are trodden underfoot, while the strong reap an abundant harvest. Therefore the cry arises for more State control, for regulation, for protection of the poor. Once more the State awakes to a sense of new responsibilities, and begins to build up a system of social and economic legislation. This continues for a period, until men realise once more that the new order is far from perfect, having created almost as many problems as it solved. Thus arises a feeling of revolt against the State omnipotence, and again there is a trend towards liberty. And so the world goes on, alternating between these two extremes.

Many illustrations might be given to support the above general statement. For instance, the Australian trade union movement during the seventies and eighties refused to touch politics, preferring to rely on purely industrial methods, i.e., the strike, and collective bargaining on a voluntary basis. But before 1890 there were many who urged the entry into the political area, and the apparent failure of strikes in 1890-3 brought a reaction in favor of political work and government regulation of wages. After 20 years of such policy, there is in many quarters a growing sense of dissatisfaction with the elaborateness and expense of the wage-fixing machine, and the results of its working, and this may lead eventually to a reversion to more direct methods of settling industrial disputes. But the best instance is provided in the changes in British Government policy between 1760 and to-day. At the former date economic life was highly regulated on every hand. A mass of legislation had been accumulated to control a certain economic order—that described in the first lecture. But voices were already being raised in criticism and when the industrial revolution came along, creating a completely new industrial system, the old laws were useless and obstructive. Hence, under the stress of new methods and vigorous criticism, the laws of over two centuries were consigned to the scrapheap, and for a time liberty prevailed. But liberty brought forth tares as well as wheat; in fact, the proportion of tares was so excessive that when men began to examine the crop they recognised the need for a radical change in government policy. Once more the State began its big work. Factory and wages laws, protective tariffs, public health provisions, education, taxation of wealth, &c., all came in time, and some States, under the influence of the new Socialist writers, set out on the path of government ownership.. But here again, 50 years of vigorous State policy have resulted in discontent. The new heaven fails to come to earth, and just before the war there was a visible reaction against the State's power, with a growing belief in the need for direct popular action. As a recent writer has said, "A certain tendency to discredit the state is now abroad," and we have not yet heard the last of this tendency, of which Syndicalism is the most prominent feature.

The last hundred years therefore provide us with a liberal period, an era of growing State control, and an incipient reaction against the State. The dividing line between the first and second epochs can be fixed roughly about 1848. In this lecture we shall study the teachings of the chief prophets of the Individualist period; next lecture will deal with, the reaction, and the counter-reaction.

—The Rise of Individualism.—

The last half of the eighteenth century witnessed a big literary glorification of "Liberty." In the political arena, despotisms and bad government were attacked with great vigor, and the "rights of the individual" placed in opposition to those of the State. Tom Paine and Godwin declared that government was an unnecessary evil, and was responsible for the unhappiness, poverty, and misfortunes of men. As a remedy, they preached the abolition of governments, meaning thereby despotisms, and the inauguration of the co-operative commonwealth on a voluntary basis—in short, an enlightened anarchy. Rousseau, the greatest political influence of all, began his famous work, "The Social Contract," with the assertion that man was originally free, but was now everywhere in chains; those chains had been rivetted on him by the despotic governments of the world, who had deprived him of all the "rights" which were formerly his. This idea of the rights of man had a great influence on the French Revolution, and one of the first declarations of the revolutionaries ran as follows:—"The end of every political association is the conservation of the natural rights of man. These rights are liberty, property, security and resistance to oppression. Liberty consists in the power to do anything that does not injure others." Throughout all such writings ran the theme that liberty was a natural thing, an inalienable birthright, had, however, been filched from man by the many laws and oppressions of despotisms. Therefore government was a usurpation, which must be destroyed, or at least taught to know its place. In Eden, Arcadia, and Utopia, there would be no government.

It was during this era of revolt against governments that political economy was born, and consequently the early economists took up the cry of liberty. In France, where industry and commerce were strangled by over-regulation, a group of economists, called the Physiocrats, pleaded for economic freedom. Their line of argument was very interesting, and was adopted by nearly all the later writers. They declared that there are natural laws for society just as there are natural laws in the physical world. Gravitation is a law of nature; the planets are guided in their courses by natural forces; chemistry, botany, anatomy, and all other physical sciences have their laws laid down for them by Nature, Providence, God—whichever name you care to use. In the same way there are laws provided by Nature to guide and control human society and economic activity. If this is so, then all attempts at regulation by the State are unnecessary, harmful, and even impious Therefore the State should recognise these laws, conform to them, and clear its statute book of anything which interferes with Nature's decrees. In short, the policy of statesmen should be laissez faire—let alone, don't touch, be quiet. Nature will regulate life, and men may rest assured that her control will be for the ultimate benefit of mankind.

—Adam Smith.—

The first great British economist, Adam Smith, grew up among such ideas, and his famous book, "The Wealth of Nations,” is in many respects a plea for economic liberty. The elaborate network of State control spread over the whole economic life of the nation was to him a trap, holding men to the ground when they might be soaring to better things. He therefore urged that the net be cut away at once, and men restored to a state of natural liberty. But what would be men's motive in conduct when that day came? Smith answered, 'Self-interest, the desire for individual advancement, selfishness." A low motive certainly, but an unalterable law of Nature, which would bring all things right in the end. For Smith believed that the Invisible Hand which had cast men in a naturally selfish mould continued to guide their activity in such a way as to produce the greatest benefit to society. Witness the following extracts from his book:—"Every individual is continually exerting himself to find out the most advantageous employment for whatever capital he may command. It is his own advantage indeed, and not that of society, which he has in view; but the study of his own advantage naturally, or rather necessarily, leads him to prefer that employment which is most advantageous to society. . . . The individual neither intends to promote the public interest, nor knows how much he is promoting it by directing industry in such a manner that its product may be of the greatest value, but intends only his own gain, and he is in this, as in many other cases, led by all invisible hand to promote an end which was no part of his intention."

This being so, then free competition, the rule of self-interest, and absolute liberty to all men to do as they think best, become part of the Divine scheme of human happiness: there is no need for the State to interfere, since natural forces alone will bring to all far greater prosperity than can ever result from the decrees of statesmen. Individualism becomes a religious creed, and State control of the actions of capital or labor is rank heresy.

—The Pessimists.—

Smith wrote before the inventions and discoveries had ushered in the new regime: he could therefore afford to be optimistic as to the fruits of laissez-faire: but those who took up the theory became almost incorrigible pessimists. This was due to the fact that they lived in the decades when the worst effects of the industrial revolution were being realised. The rapid growth of population seemed, in the eyes of Malthus, to presage a day when the world would be overcrowded, and the soil incapable of supplying the bare requirements of food. This increasing inadequacy of the food supply promised deeper and deeper misery for the poor, and the only remedy which could be suggested was that wages should be left to find their own level, under the stress of fierce competition amongst laborers. Low wages would prevent wage-earners from marrying young or having large families, and thus a strong restraint would be put on the growth of population.

—The Iron Law of Wages.—

The most ruthless exponent of individualism as applied to wages was Ricardo, a man of powerful intellect, but highly abstract in his methods of thought. He was a thorough-going individualist, and his theory led him to some dismal conclusions. Wages, he said, tend to fall to the natural minimum; that minimum is the "price which is necessary to enable the laborers, one with another, to subsist and perpetuate their race, without either increase or diminution." Above this level, wages may go, provided there is a scarcity of labor; but, as the tendency is for the working-class population to grow rapidly, especially when high wages prevail, keen competition will come in, and keep the rate low. Further, Ricardo barred the closed door against higher wages by his famous "Wages Fund Theory." This theory was that at any given time there was only a certain fixed amount available for wages; this fund could only be raised by reducing the fund for rent and profits—a highly improbable event. Therefore, if, by trade union activity or legislation, one class of workmen obtained higher wages, there would be so much less left for other classes. These were the clauses of Ricardo's "Iron Law of Wages," and in all things the Government must not interfere, no matter how hard the lot of the poor, "Like all other contracts, wages must be left to the free and fair competition of the market, and never controlled by the interference of the legislature." It was all very gloomy, but since it was based on the natural laws of private property, liberty, supply and demand, and free competition, it was justified, inevitable, and unalterable.

Ricardo's opposition to State intervention in wages agreements was shared by most men of his day, and later. In 1808 a Parliamentary committee declared that a legal minimum wage was "wholly inadmissable in principle, incapable of being reduced to practice by any means that can possibly be revised, and if practicable would, be productive of the most fatal consequences." Many years later, Fawcett, Professor of Political Economy at Cambridge, declared that "we might as well think of regulating the tides" as of determining wages by Act of Parliament. More conscientious individualists sought justification for low wages in ethical considerations. A writer in the 18th century declared that "Upon the whole we may fairly aver that a reduction of wages in the woollen manufactures would be a national blessing and advantage, and no real injury to the poor. By this means we might keep our trade, uphold our rents, and reform the people into the bargain." But whatever the question at issue, the prevailing plea was for non-intervention. Bentham said that the general watchword of the Government should be "Be quiet"; and "John Stuart Mill declared, in the forties, that "Laissez-faire should be the general practice; every departure from it, unless required by some great good, is a certain evil."

—Herbert Spencer.—

Up to about 1870 individualism was the dominating social and political philosophy. Then, as its principles were challenged, and its practices denounced, a champion arose to pen what was virtually its swan song. In Herbert Spencer's "Man versus the State," individualism became almost rabid. Spencer came to his task armed with a vast scientific knowledge. The current phrases of evolutionary theory were familiar to him, and he used them as weapons with which to slay those who urged stronger social control. His points were two—(1) Competition is the law of progress, in man as in plants and animals. The survival of the fittest, the weakest to the wall, the devil take the hindmost: these are the essentials to progress. Let the least fit, the weakest, be stamped out; then we shall get a finer breed in the next generation. As with foxes, pole-cats, fishes, and birds, so let it be with men. (2) It follows from the first contention that the state should not interfere with the free play of competition, or the process of weeding-out. Therefore, let the State's functions be confined to maintaining national defence and enforcing contracts. But beyond the army, navy, courts of justice, and police, the Government must not stray. State education is a "tyrannical system, tamely submitted to by people who fancy themselves free." It is a "sentimental weakness to ask the State to interfere" in the interests of any suffering class; poor laws, old age pensions, and the whole range of social and philanthropical legislation do "good that evil may come." Libraries, art galleries, even sanitary supervision, all are condemned. Government control brings in its train '"regulative apparatus," and the domineering official, while Socialism "would stop the progress to a higher state, and bring back a lower state." If people wish to enjoy social benefits, let those interested act on their own initiative; but do not squander the taxpayers' money in providing facilities which few desire or require. In short, let us have freedom instead of bondage, and if any man objects to the policy of the State, let him have the right to refrain from paying taxes, sacrificing in return the protection which the State affords. Spencer was thorough, it nothing else; his State fits Carlyle's phrase, "Anarchy plus a policeman."

—Individualism in Practice.—

The theory outlined above was commonly accepted, especially about the middle of last century. It became the doctrine of the Liberal party in Britain, and suited the interests of the big manufacturers and merchants who supported that party. It was responsible for the repealing of the industrial laws inherited from earlier centuries, and gave an intellectual stimulus to the freetrade movement. It explained partly the opposition to factory legislation, and could be twisted to favor the prohibition of trade unionism. Its advocates were perfectly sincere in their belief that individualism would produce a strong, healthy people. They wished to emancipate society from bad laws, and free mankind from the chains which fettered its moral and economic development. They separated the political, from the economic, and were generally strong believers in representative government, democracy, and education; but they maintained that the politician could not understand economic affairs, and any attempt by him to to regulate business would be ignorantly conceived, unjust, and disastrous. Finally, men of the Bright and Cobden type were convinced that laissez-faire would become a universal creed: when men were left free to work as they thought best, they would recognise that their best interests were tied up with those of men in other lands, and so permanent peace would come because all men realised that they were brothers. Then, from about 1848 onwards, individualism was attacked on every side, and eventually collapsed. Why, we shall see in the next lecture.

—Books Recommended.—

Adam Smith—"Wealth of Nations."

Ricardo—"Principles of Political Economy.'

Spencer—"Man Versus the State."

Brown, W. Jethro—"Underlying Principles of Modern legislation."

Dicey, A. V.—"Law and Opinion in the 19th Century."'

Hirst (edit.)—"The Manchester School."

Mackay (edit.)—"A Plea for Liberty."

Toynbee—"Industrial Revolution," chaps 7, 10-12.

Daily Herald (Adelaide, SA : 1910 - 1924), Wednesday 25 July 1917, page 8