I Introductory Apology

My bookshelves are crammed with volumes explain ing what an evil creature I am. I possess numbers of books telling me how beautiful the world would be if only I and my class could be eradicated. The literary case against me is indeed overwhelming. Ruskin says: ... But the greater part of such gain is unjust; ... Sin sticks so fast between the joinings of the stones of buying and selling, that " to trade" in things ... has warped itself, by the instinct of nations, into their worst word for fraud; and" trader," " traditor," and " traitor" are but the same word While I have traced the finer and higher laws of this matter for those whom they concern, I have also to note the material law-vulgarly expressed in the proverb, " Honesty ~s the best policy." That proverb is indeed wholly inap plicable to matters of private interest. It is not true that honesty, as far as material gain i~ concerned, profits individuals. A· clever and cruel knave will in a mixed society always be richer than an honest person can be. (Commerce: Munera Pulveris.) 12 THE CONFESSIONS OF A CAPITALIST Karl ¥arx sums me up in the following way: The money-owner strides in front as capitalist; the possessor _of labour power follows as his labourer. The one with an air of import ance, smirking, intent on business; the other, timid and holding back, like one who is bringing his own hide to market and has nothing to expect but-a hiding. (Capitot1l: Vol. I, Capitalistic Production.) Modern writers are no less definite in their views about me.

"The capitalistic system . . . " says Mr. Philip Snowden, "has waged war and sacrificed unnumbered lives for commercial gain" (Labour and the New World), and further makes reference to "The competitive struggle in which the fittest to survive are those endowed with cunning, greed, and audacity." Mr. Sidney Webb is even more direct: " The processof distribution," he says," developed by the profiteering system might more"fitly be described as an elaborate system of inter ception and blackmaiL" "The Labour and Socialist movement of the world is essentiallya revolt against the capitalist system of society." "The primary purpose of the Socialist is to focus attention on the peculiar kind of tyranny now exercised . . . by a relatively small class of rich men over a mass of poor men." "It is unnecessary to dwell in greater detail upon the poverty of the poor as the most obvious evil result of the 'free enterprise' of the profit-making.

capitalist." (rhe Decay of Capitalist Civilisation.) "But the central wrong of the capitalist system is neither the poverty of the poor nor the riches of the rich; it is the power which the mere ownership of the instruments of production gives "to a relatively small section of the community over the actions of their fellow-citizens and over .the mental and physical environment of successive generations." (A Constitutionfor the Socialist Commonwealth ofGreat Britain.) All this is boiled down at the street corner to straight forward robbery, and every night at a thousand meet ings the argument is reduced to terms of the vernacular. But the political agitation against my class is not to me so serious as the greater mass of middle-clas~ opinion which, partly from a sympathy with the sentimental side of Socialism and partly from a species of snobbery, adopts with unanimity an attitude of· mind definitely INTRODUCTORY APOLOGY unsympathetic to commerce. Even many of those who are prepared to accept the idea that buying and selling is a proper occupation are not able to go to the length of believing that great wealth acquired in this way is a creditable achievement. The man with a big income is definitely at a discount. The public does not quite believe that he is altogether honest, and even his friends will entertain the suspicion that there is a " wangle"

somewhere. There seems, in fact, to be little doubt in the mind of anybody that the accumulation of big for tunes in individual hands is bad for society. Public opinion has accepted almost without question the falla cious theory that rithes are made at the expense of others. It is not necessary in England to declare oneself a Socialist to adopt the view that there is something wrong with the system, for Socialist agi tators and Christian preachers vie with one another in denunciation of the existing scheme of things. Socialism has grafted itself on to our public opinion so completely that even at a Tory meeting it is poss ible to raise a laugh at the expense of the man like myself with £10,000 a year. The clergy not infre quently look upon his charity as conscience money, and the working classes regard him as their oppressor . In case it Inay be thought that I am unduly sensitive, or am exaggerating in this matter of public opinion and wealth, I quote an answer which was given in the House of Commons as recently as February, 1924, by the then Lord Privy Seal, Mr. J. R. Clynes: " I should have thought," said Mr. Clynes, " it was the aim of all political parties to effect by means of social legislation a more equitable distribution of wealth."

That reply was given by the then Leader of the House· with the object of placating his hearers and demonstrating the sweet reasonableness of the Labour 14 THE CONFESSIONS OF'A CAPITALIST Government and its sympathy with the parties to which it was opposed. That reply was received by the House with general agreement, and shows how completely we have accepted the notion that it is the quty of our legislators to effect this " more equit able distribution of wealth." It throws an interesting sidelight on the state of the public mind. I venture the opinion that there were not more than a score of persons present in the House of Commons (and I do not forget the whole of the Conservative Party) who felt that this statement of Mr. Clynes was a tragedy instead of a pious expression of the opinion of all parties. To me the attempt to redistribute wealth by. legislation is a farce and a sham, for while it appears on the surface of things to be effective, it does not in reality have any such result.

It is easy to destroy wealth by legislation, and the human race is poorer, and human needs are still un satisfied largely by reason of the great quantities of wealth that have been eliminated in this way. But to make wealth, or to redistribute wealth, by any process but the action of the individual is, so it seems to me, both ineffective and uneconomic. Thus, when I hear of political parties agreeing that they will build houses for the working class, I only see the supply of houses becoming ever shorter artd shorter. When I read of the politicians settling the unemployment problem, I only think of the large numbers who will be thrown out of work by any such plans. I know what the politicians have .done in other matters, such as the Irish question, and I am not anxious to see houses, .. employment, and other such vital things made the sport of political discussion for generation after genera tion, eventually to go the way of all political questions.

I indulge in this little outburst against the politicians in order to bring out as clearly .as possible the position INTRODUCTORY APOLOGY 15 in which I stand, and to throw into relief the great difference between my point of view and that of so many of my fellow-citizens. Unlike the ordinary anti-Socialist agitator, I blame quite definitely the business community for the state of mind into which the public has been allowed to drift. .Business men have clung to the old tradition that politics and business are things apart, and have allowed political forces to work in almost complete ignorance of the facts concerning the very matters with which they have been dealing. That was all very well so long as politics were concerned with the Fran chise, Education, Home Rule, or the Disestablishment of the Church. To-day, however, when politics are almost entirely concerned with business matters, that attitude must be abandoned.

Everybody is now talking business, except the busi ness man. The politicians, the doctrinaires, the par sons, the long-haired youths and short-haired maidens from the Universities, all have fixed views on indus~ trial and commercial questions. Most of them are prepared to explain at a moment's notice how any piece of business should be conducted. From the smaller details right up to the higher organisation of .industry there is nothing upon which they are not ready to express an opinion, the view expressed being, generally speaking, the more definite and exact in inverse ratio to the experience of its author. In all this dicussion the business man is silent. I seldom talk about my business outside business circles. Indeed, in conformity with English social ideas, I am expected to forget it when I move in society. My neighbours know very little about it, and I know next to nothing about their business affairs. If I want to join a club, I strive to find some other qualification for membership than that of being 16 THE CONFESSIONS OF A CAPITALIST a business man. ·When my children are entered for school their father is described as a " gentleman," or a "director of companies, "or a "landowner," or anything but what he really is, because the best class of school does not like to think that it has any direct connection with trade. My business, like my under clothes, is a thing which, for some extraordinary reason, is barred from polite and interesting conver sation. The urgent necessity,,'as it seems to me, for public enlightenment on matters of business has led . me to put down on paper what I can remember of my business experiences and thus give, if possible, some thing in the nature of a substratum of fact to help future discussion. The'task is not an easy one for many reasons. I am often impressed, when I listen to discussions on industrial affairs, to find how wide of the mark is most of the material that is contributed to them. Even in responsible quarters I find distorted ideas and much fundamental error, which cannot be explained but by an absence of such information as can be given only by the business classes-information which has hitherto been for the most part withheld.

As a good"example of thorough-going error, Ruskin's discourse on co-operation may be cited. Early in this he tells us: On the other hand, by the exact sum which is divide,damong them (i.e. the employees) more than their present wages, the fortune of ' the man who, under the present system, takes all the profits of the business, will be diminished." (rime and '1ide, Letter i.) Starting on that basis,. Ruskin builds up the case for his particular form of co-operation and draws the reader on to the contemplation of a world of wealth an~ goodwill as from the summit of a high mountain. Had Ruskin had the advantage of a couple of years in a position ofbusiness responsibility, he would not have . INTRODUCTORY APOLOGY 17 allowed himself to make a statement so completely false, much less have built up a case upon 'it. .In the fifty years of economic experience which we have enjoyed since Ruskin wrote, there is surely no one left who would be so innocent as to suggest that high wages necessarily reduce the profits of the employer.

All the evidence points the other way. Any exposition of sound economics labours under the disadvantage that it has nothing to offer-no prize to the poor, no comfort to the inefficient; a fact which probably explains the scarcity of sound economic litera ture. T~e Socialist writer, like the late Lord North cliffe, has long ago discovered the wisdom of offering to the people what they think they want. Sound economic literature makes, therefore, .no appeal to the passions or desires of the people as a whole. The poor do not read' it, and the rich, as a class, make no effort to understand it. Thus it comes about that there are a hundred volumes on the theories of Socialism to every one on the theories of a sound society. It seems to me just possible--and· this has weighed very heavily with me in the writing of this book-that the unattractive character of sound economic theories may find some compensating balance in the personal interest (if there is any) of such autobiographical details as I may be able to introduce. In this way we may succeed in getting a mixture with a flavour that will find accept ance with a public more numerous than those who are willing to read the orthodox economic treatise.

Science depends on fact as well as theory. The science of medicine would be a poor thing if it relied solely upon the theoretical. But the science of economics has been left almost entirely to the theorists. Except for Ricardo, I do not recall a single case of a man with much experience in the payment of wages who has ventured to write upon the theory of wages. I do not B 18 THE CONFESSIONS OF A CAPITALIST know of any other case where a man who has made a large profit has contributed to discussions upon the theory of profit. I propose, therefore, to offer myself as a sacrifice, as it were, upon the altar of economic truth, to take my doings and examine them in the light of theory-a process which, it is my hope, may be found to be useful in these days when the economic structure of society should be the concern and study . of all. I am further encouraged to embark upon this self imposed task by the folly of many of the efforts that· are made to defeat Socialism. Socialism will not be killed by the exploitation of the" Red' Bogey," by the appeal to the selfish instincts of those who happen to possess a little more than the average of this world's goods. That would seem to be obvious, if only for the reason that these persons are in such an insignificant minority. The .discussion must ·be lifted above per sonal consideration. It does not matter a row of pins to society, considered as a whole, whether I retain my income or not; whether, as an ind}vidual, I continue to occupy my present position of responsibility. The only thing that matters is the well~being of the whole, the good of the greatest number. The only question for debate is whether others are damaged or benefited by my operations and the size of my emoluments. If it can be shown that. my income could be taken from me and handed over to the unemployed, and that I could still live, and that the unemployed could live better by some process which had that effect, then the great majority of wealthy men would, I feel convinced, wave the Red Flag as vigorously and as enthusiastically as the most earnest Bolshevik. If, on the other hand, it is a fact, as I believe it to be, that my income is merely the index of the much bigger income enjoyed by a very large number of my fellow-men who, all of INTRODUCTORY APOLOGY them, would lose such amenities as they now possess if my income were to go, then I have a case which must surely be examined, understood, and, if proved, accepted.

I am an unrepentant believer in private enterprise. I have failed to discover, in a long and diligent search, any material benefit which has ever reached mankind except through the agency of individual enterprise. I therefore regard the whole movement for creating wealth by political agencies as a snare and a delusion. For these reasons I see no essential difference between the Bolshevik of Russia and the numerous types of moderate Socialist. Both are committed to the aboli tion of private enterprise, and both are therefore destroyers of human comfort. The frantic efforts of the Socialist to exclude the Communist from the' councils of the Labour Party are, to me, illogical and futile. I am reminded of two murderers who filled a good many newspaper columns a year. or so ago. Their names were, I think, Bywaters and Thompson. Both directed their attentions to the same victim. The method of the one was to administer. small doses of ground glass. The other adopted the more straight forward and direct method of the dagger. The moder ate Socialist is the ground-glass practitioner; the Communist uses the dagger. But, in so far as they are both bent upon the abolition of private enterprise, they are both murdering the chances of the human race to reach a higher standard of material comfort.

Nor are the difficulties of one who would defend the retention of wealth in individual hands made easier by the habit and customs of many wealth-owners. If my case rested upon what happens when a certain type of man secures £10,000 a year, what he does with it, how he lives, his home, his family, his personal surround ings, then I should throw in my brief at once. I would 20 THE CONFESSIONS OF A CAPITALIST ,agree with the wildest revolutionary that the annihila tion of a certain class of'money-owner would remove an eyesore and a blemish from the social structure, provided such an operation could be performed with out damage to the whole com1J1unity. For in pleading the case for individual wealth I have to 'grant the damaging fact that when wealth does get into individual hands it is often abused. There are persons of my own class who are much more respons ible than Karl Marx for the spread of revolutionary ideas. I recently spent a week-end at a fashionable hotel at a' health resort, and~ if my three days' experi ence in those surroundings were all the information I had upon which to build a theory of social economy, I should find myself sympathetically examining Com munism. The lounge of the establishment in question at tea-time on Sunday presented a picture of misapplied and wasted wealth impossible to justify or explain: women over-or under-dressed, oozing money, and giving from their conversatio'n no trace of education . or' of finer feeling, and men whose main idea in life, judged again by what, they said, seems to be how they cali manage to get rid of the next five-pound note on some new form of excitement.

Do the "better class," using -the term in its real sense, appreciate the fact that there are thousands of moneyed people spending wealth to no purpose, and giving generally an impression of the uses of wealth which is utterly false and extremely dangerous?' These " wrong people " are at the back of half the discon tent of which we hear so much. They'live in public because no decent private society will have them. They are driven to the gold paint and crimson cushions of gaudy hotels because the more refined drawing rooms of the educated are barred to them, and their every action is open to the inspection of the numerous INTRODUCTORYAPOLOGY 21 menials whose living they provide. Such persons form for the agitator the typical" la..dy " and" gentleman." The theories of taxation as expounded by the Socialist are founded upon the idea that all wealth is spent in this way, and when the worker hears of an income of £10,000 a year he pictures to himself champagne, jazz bands, and motors with the appropriate unifprmed flunkey to assist in the enjoyment of each dissipation.

Yet, were it possible to examine the records of these people, there is no question that in most cases their wealth would be found to be derived from useful industrial or commercial pursuits. Many of them are the middle-class employers, who have succeeded in organising industry and are keeping things going for . the benefit .of us all. They take out' of the common stock no more than others are willing to pay for the services which they render. Notwithstanding 'alltheir waste and all the criticism which can be levelled against them, they still represent the most economic method yet discovered of carrying on the business of produc tion and distribution. The charge which they make upon industry, or the share of the product which they take for themselves, is infinitely less than the charges which would be involved in the establishment of any. other known organisation capable of taking their place.

The real remedy is by means of example and education to lead them into better ways. Notwithstanding, therefore, the difficulty of the task, there are very urgent reasons why serious business men should endeavour to set down their day-by-day experi ences and the facts connected with their work for the benefit of their fellows. One of these reasons was brought very vividly to my mind recently in conver sation with a well-known member of the first Socialist Government, an earnest, honest seeker after good and truth, as are most of these people. He mentioned to 22 THE CONFESSIONS OF A CAPITALIST me with unfeigned delight that the latest Treasury statistics disclosed the fact that there were now only 27,000 people left in the country with incomes of over £5,000 a year. I was told this with the same intonation as would be employed in discussing the number of bigamists or burglars or undesirable aliens.

My friend was really convinced that the social millen nium was all the nearer because of the diminishing number of persons with incomes of a respectable size. To him the cutting away of big incomes wa's helping to solve the troubles of the poor. To me this simple little fact was quite sufficient to explain the whole of the unemployment problem. In venturing to discuss my private affairs as I do in the following pages, I am fully conscious of the grave risk that I run of failing to explain myself properly and of being misunderstood. A 4ifficulty of the kind that I have in mind was illustrated when discussing with a. party of railway workers the cost of living index figures as a basis for wage settlements. I found it impossible to remove from the minds of my audience the suspicion that I was interested as a weIl-to":doperson in keeping down their wages, and I failed, in a .single evening's dis cussion, even to begin the winning of their confidence in my honesty. I am, further, running the risk that whatever I say will be controverted and disputed, not only by those who are anxious in the interest of know ledge and science to discover truth, but by those who have no other interests in life than the victory, or defeat, of some political party or faction.

As to that, I confess myself to be, with Professor J. R. Seeley, "One of those simpletons who believe that, alike in politics and religion, there are truths out side the region of party debate, and that these truths are more important than the contending parties will INTRODUCTORYAPOLOGY easily be induced to believe. In both departments ... I watch with a kind of despair the infatuation of party spirit gradually surrendering the whole area to dispute and denial and despising as insipid whatever is not controversial, until perhaps, at last ... the brawl sub sides from mere exhaustion . . . suffering veritably the catastrophe of Poland, which found such a fatal enjoyment in quarrelling, and quarrelled so long, that a day came at last when there was no Poland any more, and then quarrelling ceased."