Now what is meant in economic reality by these municipal loans and national loans raised for the purpose of purchasing certain small sections of the means of production?
Certain capitalists own a number of rails, cars, etc. They put to work upon these certain proletarians, and the result is a certain total of economic values. Let the surplus values obtainable by the capitalists after the subsistence of the proletarians is provided for amount to £10,000 a year. We all know how a system of this sort is “municipalised.” A “loan” is raised. It bears “interest.” It is saddled with a “sinking fund.”
Now this loan is not really made in money, though the terms of it are in money. It is, at the end of a long string of exchanges, nothing more nor less than the loan of the cars, the rails, etc., by the capitalists to the municipality. And the capitalists require, before they will strike the bargain, a guarantee that the whole of their old profit shall be paid to them, together with a further yearly sum, which after a certain number of years shall represent the original value of the concern when they handed it over. These last additional sums are called the “sinking fund”; the continued payment of the old surplus values is called the “interest.”
In theory certain small sections of the means of production might be acquired in this way. That particular section would have been “socialised.” The “sinking fund” (that is, the paying of the capitalists for their plant by instalments) might be met out of the general taxation imposed on the community, considering how large that is compared with any one experiment of the kind. The “interest” may by good management be met out of the true profits of the tramways. At the end of a certain number of years the community will be in possession of the tramways, will no longer be exploited in this particular by capitalism, will have bought out capitalism from the general taxes, and, in so far as the purchase money paid has been consumed and not saved or invested by the capitalists, a small measure of “socialisation” will have been achieved.
As a fact things are never so favourable.
In practice three conditions militate against even these tiny experiments in expropriation: the fact that the implements are always sold at much more than their true value; the fact that the purchase includes nonproductive things; and the fact that the rate of borrowing is much faster than the rate of repayment. These three adverse conditions lead in practice to nothing but the riveting of capitalism more securely round the body of the state.
For what is it that is paid for when a tramway, for instance, is taken over? Is it the true capital alone, the actual plant, which is paid for, even at an exaggerated price? Far from it! Over and above the rails and the cars, there are all the commissions that have been made, all the champagne luncheons, all the lawyers’ fees, all the compensations to this man and to that man, all the bribes. Nor does this exhaust the argument. Tramways represent a productive investment. What about pleasure gardens, washhouses, baths, libraries, monuments, and the rest? The greater part of these things are the product of “loans.” When you put up a public institution you borrow the bricks and the mortar and the iron and the wood and the tiles from capitalists, and you pledge yourself to pay interest, and to produce a sinking fund precisely as though a town hall or a bath were a piece of reproductive machinery.
To this must be added the fact that a considerable proportion of the purchases are failures: purchases of things just before they are driven out by some new invention; while on the top of the whole business you have the fact that the borrowing goes on at a far greater rate than the repayment.
In a word, all these experiments up and down Europe during our generation, municipal and national, have resulted in an indebtedness to capital increasing rather more than twice, but not three times, as fast as the rate of repayment. The interest which capital demands with a complete indifference as to whether the loan is productive or nonproductive amounts to rather more than 1½ percent. excess over the produce of the various experiments, even though we count in the most lucrative and successful of these, such as the state railways of many countries, and the thoroughly successful municipal enterprises of many modern towns.
Capitalism has seen to it that it shall be a winner and not a loser by this form of sham socialism, as by every other. And the same forces which in practice forbid confiscation see to it that the attempt to mask confiscation by purchase shall not only fail, but shall turn against those who have not had the courage to make a frontal attack upon privilege.
With these concrete examples showing how collectivism, in attempting its practice, does but confirm the capitalist position, and showing how our laws have already begun to impose a servile status upon the proletariat, I end the argumentative thesis of this book.
I believe I have proved my case.
The future of industrial society, and in particular of English society, left to its own direction, is a future in which subsistence and security shall be guaranteed for the proletariat, but shall be guaranteed at the expense of the old political freedom and by the establishment of that proletariat in a status really, though not nominally, servile. At the same time, the owners will be guaranteed in their profits, the whole machinery of production in the smoothness of its working, and that stability which has been lost under the capitalist phase of society will be found once more.
The internal strains which have threatened society during its capitalist phase will be relaxed and eliminated, and the community will settle down upon that servile basis which was
