Liberals were bound to apply themselves to the new conditions in a new way, and it savors of pedantry to accuse Liberal economists of 1906 of having departed from the principles of Liberal economists of 1846. Paradoxical as it may appear to say that a positive policy of constant interference is the same as a negative policy of constant abstention, it is true that the mental habit at the back of the one is identical with that at the back of the other. Both aim at emancipating the individual from the things which prevent him from developing his natural capacities. The Manchester School saw only the fetters which directly impeded him. The modern Liberal sees also the want of the positive aids without which he is only half free. "Of all the obstacles which obstruct men's advance toward good living, and of all the evils with which politics can help to deal, there is no obstacle more formidable and no evil more grave than poverty.... Our first principle leads clearly and directly to a policy of social reform. Whoever admits that the duty of the state is to secure, so far as it is able, the fullest opportunities to lead the best life, cannot refuse to accept the further proposition, that to lessen the causes of poverty and to lighten its effects are essential parts of a right policy of state action." Poverty cripples the individual in many ways. . . . No one who seriously believes that it is the duty of society to secure freedom of growth to every one of its members can doubt that it is its duty to mitigate, so far as it is able, those consequences of poverty which no degree of thrift, enterprise, or fortitude can avert.
To this end the economic reforms of the new Liberalism have been directed. The Labor Exchanges Act did not furnish work for all. It provided facilities for obtaining work for all who sought for it. The workman is no longer left to scramble about for fresh employment. He goes to a public office, where he learns what posts are vacant, and is put in touch with those who may be willing to employ him. No man can now complain that because he cannot afford to travel in search of work, or to delay for more than a day or two before he finds it, he has suffered a permanent deterioration in health or character. If this Act can eliminate the evils of casual and irregular labor, it will have enormously increased individual liberty for growth. The Old Age Pensions Act removed from the shoulders of working-class families what was to many an intolerable burden. Before the Act came into force some thousands of men and women, from no cause but the lapse of time, became incapable of supporting themselves. The alternatives were the workhouse and the generosity of their children. The first meant a loss of independence for themselves, the second a fetter upon the freedom of their relations.... All these measures are based upon the same principle that absolute liberty of the individual meant the degradation, if not the destruction, of many individuals who were poor. There can be no equal chance of growth so long as accidents which cannot be averted, by any effort of the individual, may permanently impair his natural capacity. Social reform is justified as a national army is justified. It is a system of common organization for the purpose of common protection....
This elaboration of the system of protection is not inconsistent with such competition as is necessary for the development of character, and for the production of the wealth which is so distributed among the members of society. It is not socialism. It is not a system of doles. It removes only some of the risks of failure, and only those which are beyond individual control.... The benefit of competition remains. The disasters inevitably attendant on it are averted. The poorer people no longer wrestle on the brink of an unfenced precipice. "I do not want to see impaired the vigor of competition, but we can do much to mitigate the consequences of failure. We want to draw a line below which we will not allow persons to hve and labor, yet above which they may compete with all the strength of their manhood. We want to have free compethion upwards; we decline to allow free competidon to run downwards. We do not want to pull down the structures of science and civilization, but to spread a net over the abyss . . "
It is obvious that this new economic liberalism has borrowed largely fron socialism, and it has one character in common with protection. Once we admit that it is right for the state to interfere with economic freedom, we have advanced one step on the road which leads toward the nationalization of industry and toward the regulation of production by tariffs. The difference between social reform and tariff reform is nevertheless clear. Social reform operates directly, only where it is needed, and without substantially interfering with any individual=s enjoyment of life. Tariff reform, if it can destroy poverty at all, can only destroy it indirectly by giving higher profits to the employer, who may or may not share his increased gains with his work-people......
The resemblance between social reform and socialism is much more real. The sympathies and the objects of the two are not disimilar, though their practical proposals are essentially different. Socialism, so far as it is ever expressed in definite terms, makes a logical application of a general formula. Private ownership of the means of production, distribution, and exchange means a combination of the owners of capital against the wage-earners to the injury of the class which is economically the weaker of the two. Therefore society as a whole must take possession of industrial capital, production for use must be substituted for production for profit, work at a good wage must be guaranteed to everyone who asks for it, and the fair distribution of wealth among the workers must be regarded as of more primary importance than the quanthy which is produced. Socialists differ widely about methods and he rapidity with which the economic change is to be effected. Generally, the modern socialist of the Fabian type prefers a gradual evolution to the cruder appropriations of early thinkers, he is prepared to exempt certain industries from his scheme, and the equal distribution of rewards has gone the way of the class war and community of goods. But all agee that, sooner or later, society, as politically organized in the form of the state, shall produce and distribute or contrd the production and distribution of wealth according to ethical principles. The Liberal is less universal in his proposals. He does not object to the municipalization, or even nationalization, of mechanical monopolies, of industries which in fact do not admit of competition. Such industries as the supply of water, gas, and electricity, tramways and railways are not in fact competitive, and efficiency is probably as well maintained by aggrieved payers of rates and taxes as by shareholders disappointed of their profits. But the Liberal is not disposed to admit that similar conditions would produce similar results in industries of a more speculative or hazardous character. Nor can he admit that private ownership of capital necessarily involves the exploitation of labor. In certain industries, notably the cotton industry of Lancashire, he sees examples of the successful combination of individual enterprise in management with minimum standards of life and wages fixed either by the factory acts or by powerful trade unions, and he is not satisfied that the enterprise could be as brilliant or the minimum standards as high if the capital engaged were state-owned.
In particular, the Liberal distrusts the bureaucratic system of management which socialism involves . . . Social reform requires the appointment of many officials. But the functions of such as have already been appointed are confined to inspection, to advice, and to the collection of money or information. We have had no experience of officials engaged in the manufacture of goods for export or in the conduct of the shipping trade. Such experience as we have had of municipal enterprise has only satisfied us of the capacity of officials who are controlled and criticized by unofficial ratepayers who have a personal and pecuniary interest in the efficiency of the official. No Liberal government has yet proposed to extend official management to those many fields where success depends upon the judicious calculation of risks. Until that proposal is made there will always be a gulf between Liberals and Socialists and a distinction between the policy which limits the destructiveness of competition for private gain and that which abolishes such competition altogether.
From: W. L. Blease, A Short History of English Liberalism, (London: Ernest Benn, 1913), pp. 328-335.
Scanned by Jerome S. Arkenberg, Cal. State Fullerton. The text has been modernized by Prof. Arkenberg.
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© Paul Halsall, November 1998