both in its aspects of toil and of management, is inevitable, and the politics of the world will become the will of finance. For finance can command the sluices of every stream that runs to turn the wheels of industry, and can put fetters upon the feet of every Government that is in existence. High finance, the creation of an artificial system under which organic unities are divided into profit-making sections, sits in a supreme place difficult to approach, recondite in its doings. At best, a few rule in its realm, its ways are intricate and hard to understand, its job of extreme delicacy, and in no other department are consequences of action less calculable or more far reaching. Its ramifications are as fine as a nervous system, and as centralized. It is the nervous system of Capitalism. Those who control finance can paralyse Society, can make it drunk, can keep it normal. And in all their transactions, their own interests are put first. Of course these interests are involved in the general interest. They cannot flourish in a dead economic State. But they can fix exchanges, bank rates, capital values; they can tighten or loosen the purse-strings for Governments and manufacturers ; they control the means upon which the political and industrial State depends for its existence. If a Labour Government came into power, they could starve it. A financiers' counter - revolution would be more effective than a soldiers' one. The common attack upon the financier that he is dishonest, arises from the reputation of some of the knights of the road who live on the outskirts, but is false. The financier is honest; he performs functions essential to Capitalism; were these things not so, he could not exist for twelve months. I object to his power. It is too

great to be left safely in private hands seeking personal gain. I object to the waste of brains, of labour, of ingenuity, of effort which his existence involves. No community can be free until it controls its financial organization. But finance cannot be controlled, cannot be absorbed into the functioning organiza

tion of the community, until industry has been organized on Socialist models.


I have referred above to the next three steps, and have already discussed two, but the third, taxation of specially large profits, I have not yet discussed. It is perfectly obvious to everyone that the enormous monopoly profits made by combinations like those in cotton thread” and tobacco, show the complete breakdown in our system of distribution, providing we insist upon expecting from it some measure of equity. Dividends of 80 per cent., bonuses of from 80 to 50 per cent., repeated again and again, watering of capital two and threefold—the mere recital of such spoils makes one think of ways of possession by capture during war, loot, or pillage. It is a method of holding the community to ransom and picking its pockets. Let us, however, put the best possible face upon it, and regard this accumulation as caused by the fact that the things produced and sold are so numerous that a reduction in price equivalent to no more than the smallest coin in circulation would swallow up the whole accumulation. Granted 1 To whom does the accumulation belong 2 The capitalist who now gets it?” The workers whose wages have been notoriously inadequate 2 The consumers, because the accumulation is really one of over-payment than one of capital earning 2 Obviously wages should be increased where they are low. The remainder of the special accumulation is certainly not a reward of capital and should be regarded, as a Cooperative Store regards the over-payments on goods bought by customers which it distributes periodically as dividends to the overcharged purchasers. How is this to be done 2 Some combinations make special accumulations in order to give dividends and rebates to retailers and so bind them to the combine. This method cannot be adopted as regards final purchasers when the items bought are reckoned by the million, and purchasers by hundreds of thousands. We can, however, regard the surpluses as collective wealth to be used for individual enjoyment, like public parks or galleries. A community intelligently organized can always find plenty of productive ways for spending money in promoting individual benefit both directly and indirectly. To-day, had we reserves provided from profits of the nature of undistributable dividends on purchases, how much simpler would be our housing or our education problems, or, if we wished to earmark them for more general purposes, how well they could be spent in preserving for the whole nation places of natural beauty and of historical interest. Were these accumulations now going into private pockets put into a Common Good Fund, as the “whisky money ’’ was about a quarter of a century ago, an

* This combination made an aggregate profit of £14,500,000 in the four years 1917–20.

* Five members of one family deeply concerned in one of these combines have died since its fortunes soared, and their aggregate

confessed property amounted to £12,000,000.

infinite variety of educational work could be done from one end of the country to the other which has now to be neglected for lack of money.* The time will not come within the range of our farthest vision when such funds cannot be used for common benefit. A Common Good accumulation solves the problem of how these otherwise undistributable surpluses can be used in the interests of those who properly ought to enjoy them but cannot do so separately. It will not be easy to get hold of this wealth, but if the community declines to deal with combines in a Socialist way, it will have to consider how to share in their profits and economies. To limit profits by taxation is no easy matter, but the problem will have to be faced. What, for instance, is to be the basis upon which the legitimate profit is to be calculated ? Is it to be the dividend on watered capital, or on capital in economic use ? Is it not to be a dividend on capital at all, but a profit on the turnover and trade 2 If the calculation were made on the costs of production, as has also been proposed, we should be where we were during the war, when we allowed firms to make profits upon costs and found in consequence that profit and extravagance went up in harmony. All I am concerned with at this point is that there is a general agreement both on moral and economic grounds that these abnormal profits have no justification, that they are flowing towards wrong destinations, and that their continued and cumulative effect is to make the mechanism of distribution work more and more adversely to hand and intellectual labour. The Exchequer ought to take cognisance of high dividends and reserves. They have no industrial value, and the capitalist energies that they engender belong to the vices and not to the virtues of property acquisition. The first and easiest step should be to tax dividends beyond a certain percentage and work out by experience the necessary allowances that ought to be made. Or the point might be put in this way, that the Exchequer should regard share capital as being somewhat of the nature of what debentures now are and allow it to receive only a fixed profit.

* One instance of how such money might be spent is in securing for the country the national treasures which cannot be replaced, but which are being sold to American millionaires for vulgar display and vainglory, e. g. the recent Hamilton sale.


A counterpart of these great accumulations is unemployment. The periodicity of unemployment is a demonstration that the capitalist mechanism of production and distribution cannot work, for the only possible view to take of this phenomenon, which is universal under Capitalism, is that it is a breakdown of the machine. Let us follow the working of the machine. We are in good trade. The stream of commodities flows from producer to consumer; labour and capital both find employment; the percentage of labour out of work is down to the economic minimum, and capital seeking employment is used to a similar extent. But this will not last. There are forces within it which drive it harder than is economically sound. It is worked without reference to market possibilities. It cannot be adapted to its purpose, because, whilst its social aim is to produce under the control of communal need, it is actually worked under the spur of individual profit making.

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