524

p Goschen himself was aware that the data his report was based on in respect of the successes of "automatic socialism" were lacking in proof, which was why he tried to back them with the aid of indirect considerations. We shall learn of one of the latter when we deal with the condition of the working class in Britain; we shall now consider some of the rest.

p “Year by year,” says Goschen, "it would seem, a larger number of persons are becoming shareholders in companies, and thus participating in the wealth which arises from the vast industrial and commercial activity of the country__"  [524•* 

p Taken up by Schultze-Gavernitz and other adherents of "social peace”, this consideration, as is common knowledge, produced a profound impression on some socialists. Thus, Herr Bernstein came to the conclusion that "the form taken by the joint-stock company has considerably countered the trend towards the centralisation of capital through the centralisation of production”. He thinks that "if economists opposed to socialism have used this 525 fact with the aim of embellishing the present social relations, it does not follow that socialists should conceal or deny the fact. It is more a question of admitting its actual significance and spread.  [525•* 

p To conceal the facts or to deny their existence when have been proved is, of course, quite ridiculous and absolutely absurd. But facts are one thing and their social significance is something else. The social significance of the fact indicated by Herr Bernstein who follows in the footsteps of Goschen and Schultze-Gavernitz, can be understood in a variety of ways. Bourgeois scholars and Herr Bernstein, who is trailing behind them, have not noticed that the spread of joint-stock companies may be—and indeed is—a new factor in the centralising of property and the growth of the distance between the poor and the rich. We shall illustrate our thought with an example taken from the economic history of the same period that is dealt with in Goschen’s speech.

p It is common knowledge that the increase in the number of jointstock companies in Britain was greatly facilitated by the Limited Liability Acts. By the time the Commission appointed to study the causes of the depression in industry had begun its deliberations, the economic consequences of the new laws had made themselves felt with sufficient clarity. Let us see what the Commission had to say about them.

p According to the majority of its members, limited liability led to a less cautious and more speculative management of enterprises than that to which the entrepreneur may have been inclined when he was fully liable for his operations. In consequence, limited liability in production led to a fall in profits under which the ordinary entrepreneur would have felt obliged to curtail its extent. Even the loss of capital caused by the failure of a considerable number of such companies did not exert the influence that might have been expected in the sense of a reduction in their operations, since the losses were spread over a larger number of persons and were therefore less felt. Moreover, on the wreckage of enterprises that had foundered there are constantly arising new ones which, after the purchase of the property of old ones for a song, are able to conduct production on the former scale.  [525•** 

p The minority members were in full agreement, in this case, with the majority. In their opinion, limited liability had led to the appearance of a special class of promoters who, taking advantage of the inexperience and defencelessness of owners of 526 small sums of money, floated enterprises with the exclusive purpose of selling off their own shares at the first opportunity, without the least concern for the fate of the companies they had launched.  [526•* 

p We do not think that this kind of "automatic socialism" was capable of considerably promoting the “blunting” of social contradictions. Over-production and speculation have always been and will remain powerful factors in ruining the economically weak and enriching a handful of slick businessmen skilled in fishing in muddy waters.

p Goschen also spoke of the larger savings-bank deposits during the period under review, considering them a manifestation of the slow but sure triumph of the "silent socialism" he holds so dear.  [526•**  But had he carefully perused the Report he insistently recommended to his audience’s attention, he would have had to agree that the fact he had adduced permitted another and far less “consoling” interpretation. As so correctly remarked by A. O’Connor, a member of the Commission, who registered a dissident opinion, the growth in the number of savings-bank deposits might have been caused by fewer opportunities (as a consequence of the depression in industry) to invest small sums in industrial enterprises.  [526•***  In view of this more than probable explanation of the fact, one can readily understand that the increasing total of savings-bank deposits went hand in hand with a fall in the demand for industrial workers.

p However “silent” and “automatic” this kind of socialism is, it always contains little that is consoling.

p We can now leave Goschen for a while and address ourselves to another British expert, this time to the statistician Michael Mulhall.

p In his Dictionary of Statistics, Mulhall cites the following figures regarding the growth in the number of incomes of £2,000 or upwards.  [526•**** 

527

p The number of persons enjoying incomes of over £ 5,000 a year increased as follows:

Year
Number
Per million population

1812 409 34 1850

1,181

56 1860

1,558

53 1870

2,080

67 1880

2,954

00

OO

ion. wfl finrl-

p Taking the relative numbers of each class to the whole
population, we find:

Persons of
per million inhabitants
Rate of increase

1860 1880

p great wealth easy fortune
53 2,949
88 6,313
66 per cent 112

p “This shows,” says Mulhall, "a greater diffusion of wealth, contrary to the common impression that ’the rich are getting richer every day’... ."  [527•* 

p All this is very fine and most consoling. But when we meet with the selfsame Mulhall elsewhere and under different circumstances,, we learn things that are far less fine and far less comforting.

On the basis of certain calculations, he accepts that wealth in, the United Kingdom is distributed as follows:

Year
Number
Per million population 1812 39,765
3,314 1850 65,389
3,115 1860 85,530
2,949 1870 130,375
4,206 1880 210,430
6,313
Class Number of persons
Millions £
£ per head
Rich ..... Middle .... Working . . . Children . . .
327,000
2,380,000 18,210,000 17,940,000
9,120 2,120 556
28,000 900 31
Population . .
38,857,000
11,806 302 528

p What are these figures indicative of? They show the following. “Nearly 80 per cent of the total wealth is held by 1 1/2 per cent of the adult population. The middle class stands for 11 per cent of population, and holds 18 per cent of wealth."  [528•*  Mulhall has nothing to say of the working class, for the crumbs falling to its share are so miserably small! It follows that the "diffusion of wealth" is not so great as Mulhall would assure us. A pity, a great pity, for we were on the verge of arriving at a very pleasant state of mind. But let us now see what else our statistician has to say. Let us ask him how that "diffusion of wealth" operated, in the past.  [528•** 

p According to his own calculation,  [528•***  it appears that, if we take the number of fortunes of over & 5,000 in the year 1840 as one hundred, we find that in 1877 that number rose to 223, and in 1893 to 270. Yet if we take as one hundred the number of fortunes between £ 100 and & 5,000 in 1840, we find that the number increased only to 203 in 1877 and to 249 in 1893. That means that "fortunes over & 5,000 are multiplying much faster than those under £ 5,000, which is the reverse of what is desirable and this congestion" (in the upper classes.—G.P.) "seems to increase in intensity the higher we go".  [528•****  Some “diffusion”! Mulhall himself seems to be somewhat taken aback and therefore hastens to comfort us with the following table:

p 1840 1877 1893 Population . . Possessing over £100 ....
100 100 126 205 146 251

p While the population increased by 40 per cent in fifty years, the number of persons possessing over £ 100 went up by 151 per cent. "...In other words, the class of society which may be considered above the reach of want has grown since 1840 three times faster than the general population."  [528•***** 

529

p Below we shall analyse in detail the consoling nature of all this comfort; for the time being, we shall draw the reader’s attention to Mulhall’s following opinion regarding the condition of the working class in Britain.

p “The improved condition of the working classes is evident from the increased number of depositors in savings banks; it was less than 4 per cent of the population of the United Kingdom in 1850, and has now risen to 19 per cent. Nevertheless, the sufferings of the indigent class in our large towns are greater than ever before; the condition of this class has been aptly described as far worse than that of Hottentots."  [529•* 

What a ludicrous descent from the elevated to the trivial.