E. Belfort Bax

Capitalist Government and
Socialist Administration

(15 January 1920)

E. Belfort Bax, Capitalist Government and Socialist Administration, Justice, 15th January 1920, p.4.
Transcribed by Ted Crawford.
Marked up by Einde O’Callaghan for the Marxists’ Internet Archive.
Proofread by Chris Clayton (May 2007).

That the change from capitalist civilisation to the Socialist Commonwealth cannot be carried out between Saturday night and Monday morning is admitted by all sane Socialists. The attempt to achieve this impossible task by a coup de main, and its dire results, have been written during the last two years in the annals of Soviet Russia, in so far as such exists.

The immediate change from a capitalist government to a Socialist administration must show itself, as I have heard old Engels point out, more in spirit and in general tendency than necessarily in sudden revolutionary changes. It will be the object of those representing the new order of things to prepare the way for such changes as soon as practicable by influencing opinion and by tentative experiments rather than by the attempt to throw at one fell swoop the whole existing order, economic and social, into the melting-pot.

At the present time we find with the Government of this and most other countries, the scales of economic and social regulation and administration invariably weighted in favour of the owners and present organisers of the means of production and distribution, in favour, i.e., of the capitalist producer and distributor (so-called) as against the rest of the community – to wit, the working classes as such, and the consumers as such.

Handling the War Profiteer Gently

The unwillingness of the existing State to lay sacrilegious hands on the profit-making of the capitalist is only too apparent in all its legislation and administration. For example, much wordy wrath has been expended lately, even by the governing classes, on the delinquencies of the profiteer. As an outcome of this the Government not long ago appointed a Commission to prepare the basis of a Bill for taxing up to the hilt all profits due to the special war and post-war conditions of the last five years. The Commission, needless to say, which was composed of ordinary bourgeois politicians, as might have been expected, pronounced the earmarking of these extra war profits with a view to their special taxation to be impracticable. This is an illustration of this unwillingness of the average bourgeois politician to touch the profit-maker with an ungentle hand. For is not the war profiteer, as he is called, though his ways may be open to gentle censure, even if couched in strong language, to please the multitude of his victims – is he not also a profit-maker? Is he not also a member of the class whose interest in life is profit-making? It would seem, nevertheless, that Mr. Lloyd George’s Government feels itself compelled to make a show of introducing some sort of measure against the war profiteer. There is, of course, no insuperable difficulty, as concerns the vast majority of cases, in earmarking for special fiscal attention extra war profits. Moreover, in this as in other things, even if there were difficulties, the old adage would obtain: “Where there’s a will there’s a way.” But we beg leave to doubt very much whether any measure of this kind, effectively dealing with the question, will ever be passed into law.

The “Legitimate” Profitmonger

If the profiteer of war profits, even nominally condemned as he is by a large section of the governing and capitalist classes themselves, is dealt with either not at all under the excuse of “impracticability”, or at best as gently as may be, what of the ordinary capitalistic profitmaker who, either through want of opportunity or otherwise, cannot be designated as a profiteer in the current sense? He, according to the notions of the present governing and administrating classes, is the last person who can be allowed to suffer from the prevailing condition of war and post-war economic conditions. He and his “legitimate” profits at all events must always be treated as sacrosanct. No larks must be played with him in any circumstances. Whatever the consumers – i.e., the general public – may suffer in their pockets and their stomachs, there is no thought for a moment of compelling the capitalist “producer” to forego his ordinary rate of profit, let alone to produce at a loss. It is only necessary for him in any industry to fake up a case to show that he cannot with sufficient profit sell at the maximum price filed by the authorities, to induce these some authorities to raise the maximum selling price previously decreed to suit his convenience. This has been repeatedly the case in belligerent countries during and since the war. We have just had an instance of it in the raising, of the French railway fares. Behind this is an undoubted intrigue of the railway companies. Moreover, where the price has not been raised to satisfy the profit grinder, Governments have thought it necessary to subsidise him for the alleged lack of legitimate profit yield in his business out of the public revenue.

Capitalist Production at a Loss

Now the Socialist may well ask why the capitalist “producer” or distributor should have his lack of profit or even actual loss made up or paid for either out of the pocket of the consumer or of the public funds at the disposal of the State. Why should the rest of the community indemnify him in his capacity as capitalist entrepreneur, and keep him snugly in cotton-wool, as it were, while the non-capitalist common herd of society have to suffer with the times? Production must go on, it will be answered, and so long as it is carried on under capitalist conditions it would be unjust as well as impracticable to compel the capitalist to continue to produce or distribute without some profit and still more at an actual loss. As regards the first point it is difficult to see why it should be specially unjust for the capitalist qua capitalist to have to suffer from the economic exigencies of the situation, and why the consumer qua consumer should have to bear the whole burden. The capitalist producer has presumably made profit enough in the past out of the ordinary processes of capitalist production, and will presumably do so again in the future, when the world is through with the present economic crisis, until the co-operative production and distribution of Socialism has definitely supplanted the capitalist system. Hence it should not hurt him so very much, one would think, to have to continue his functions for a season, even to the extent of being compelled to work his business at some actual loss.

Its Practicability

As to the practicability, the question of course may be asked: How are you going to compel the capitalist to work his business without profit, or still more at a loss? The answer is that the difficulty implied in the question must be admitted, and for the moment may well be deemed insurmountable. But one of the first things, I take it, a Socialist administration should do, besides fixing maximum prices where necessary or desirable, would be to adapt a system of licences for all capitalist undertakings, just as the public-house trade is licensed to-day in England. In this way the administration would have the whip hand of the capitalist. Under the conditions proposed it would be quite easy to put the screw on to the capitalist at a period of crisis like the present. The threat of the cancelling of his licence, and hence the definitive winding-up of his affairs, would be quite sufficient to induce him to continue working his business for a time without reaping any profit or even at some actual loss. This power in the hands of the administrative authority would be especially effective in the case of syndicated enterprises (public joint-stock companies) where important fixed plant and large financial interests are concerned.

Control Before Abolition

But it will be said, as has oft been said before, indeed, as regards similar proposals, if you could bring capitalism to such a pass as is here supposed, you would be in a position just as easily to communise the whole industrial and commercial system at once – in a word, to realise the complete programme of Socialism without more ado. I must confess it is difficult for me to understand how any sensible Socialist can talk like this. Even admitting the initial assumption that, politically speaking, it would be as easy to abolish capitalism at a stroke as to control it (which is doubtful enough), have we not had recent evidence in Russia and elsewhere of the practical impossibility of successfully reorganising human life economically on a complete Socialist basis overnight, as it were? There are whole sections of the industrial and commercial system which are, for the moment, not ripe for effective communisation or socialisation. Meanwhile the present capitalist system must continue in its main features to survive, and the task of a Socialist administration must be largely confined to rigorously controlling it in the public interest, and to preparing existing economic conditions for their transformation into socialistic conditions as speedily as possible.

The chief immediate difference, I take it, between an ordinary bourgeois Government and a Socialist administration would be that, while the first concern of the one is the interest of the present possessors and controllers of the means of production and distribution, the first concern of the other would be the interest of the wage earners and of the public generally, in their character of consumers and users of the wealth produced by the community.


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