L. T. Hobhouse

“ To do so is to infringe individual rights and make a man contribute by force to objects which he may view with indifference or even with dislike. “Socialistic” taxation is an infringement of individual freedom, the freedom to hold one’s own and do as one will with one’s own. Such seems to be the ordinary view.
But a consistent theory of liberty could not rest wholly satisfied with the actual system under which property is held. The first point of attack, already pressed by the disciples of Cobden, was the barrier to free exchange in the matter of land. ”

“ This is a system under which a man is free to acquire by any method of production or exchange within the limits of the law whatever he can of land, consumable goods, or capital; to dispose of it at his own will and pleasure for his own purposes, to destroy it if he likes, to give it away or sell it as it suits him, and at death to bequeath it to whomsoever he will. ”

“ But, inasmuch as injury inflicted is itself crippling to the sufferer, as it lowers his health, confines his life, cramps his powers, so the prevention of such injury sets him free. The restraint of the aggressor is the freedom of the sufferer, and only by restraint on the actions by which men injure one another do they as a whole community gain freedom in all courses of conduct that can be pursued without ultimate social disharmony. ”

“ Even here the railways, to take one example, are rapidly moving to a system of combination, the economies of which are obvious, while its immediate result is monopoly, and its assured end is nationalization.
Thus individualism, when it grapples with the facts, is driven no small distance along Socialist lines. Once again we have found that to maintain individual freedom and equality we have to extend the sphere of social control. But to carry through the real principles of Liberalism, to achieve social liberty and living equality of rights, we shall have to probe still deeper. ”

“ There is, first, the monopoly of land. Urban rents, for example, represent not merely the cost of building, nor the cost of building plus the site, as it would be if sites of the kind required were unlimited in amount. They represent the cost of a site where the supply falls short of the demand, that is to say, where there is an element of monopoly. And site value—the element in the actual cost of a house or factory that depends on its position—varies directly with the degree of this monopoly. This value the land nationalizer contends is not created by the owner. It is created by society. ”

“ Why should the State intervene to do for a man that which his ancestor did for himself? Why should a man who has been soundly beaten in physical fight go to a public authority for redress? How much more manly to fight his own battle! ”

“ Such freedom is theoretically possible for an individual. It is antithetic to all public control. It is theoretically impossible for a plurality of individuals living in mutual contact. Socially it is a contradiction, unless the desires of all men were automatically attuned to social ends. Social freedom, then, for any epoch short of the millennium rests on restraint. It is a freedom that can be enjoyed by all the members of a community, and it is the freedom to choose among those lines of activity which do not involve injury to others. ”

“ Trade Unionism can be protective in spirit and oppressive in action. Nevertheless, it was essential to the maintenance of their industrial standard by the artisan classes, because it alone, in the absence of drastic legislative protection, could do something to redress the inequality between employer and employed. It gave, upon the whole, far more freedom to the workman than it took away, and in this we learn an important lesson which has far wider application. In the matter of contract true freedom postulates substantial equality between the parties. ”

“ The State, it is admitted, can take a part of a man’s property by taxation. For the State is a necessity, and men must pay a price for security; but in all taxation the State on this view is taking something from a man which is “his,” and in so doing is justified only by necessity. It has no “right” to deprive the individual of anything that is his in order to promote objects of its own which are not necessary to the common order. ”

“ Government had to maintain order, to restrain men from violence and fraud, to hold them secure in person and property against foreign and domestic enemies, to give them redress against injury, that so they may rely on reaping where they have sown, may enjoy the fruits of their industry, may enter unimpeded into what arrangements they will with one another for their mutual benefit. Let us see what criticism was passed on this view by the contemporaries of Cobden and by the loud voice of the facts themselves. The old economic regime had been in decay throughout the eighteenth century. ”

“ It may be added that there is a fourth form of monopoly which would be open to the same double attack, but it is one of which less has been heard in Great Britain than in the United States. It is possible under a competitive system for rivals to come to an agreement. The more powerful may coerce the weaker, or a number of equals may agree to work together. Thus competition may defeat itself, and industry may be marshalled into trusts or other combinations for the private advantage against the public interest. ”

“ Was it not a kind of pauperization to make men secure in person and property through no efforts of their own, by the agency of a state machinery operating over their heads? Would not a really consistent individualism abolish this machinery? ”

“ The land-nationalizer, looking at rights of property purely from the point of view of the individual, denies the justice of this arrangement, and he sees no solution except this—that the monopoly value should pass back to the community which creates it. Accordingly, he favours the taxation of site value to its full amount. Another element of monopoly arises from industries in which competition is inapplicable—the supply of gas and water, for example, a tramway service, and in some conditions a railway service. Here competition may be wasteful if not altogether impossible ”

“ Land is limited in amount, certain kinds of land very narrowly limited. Where there is limitation of supply monopoly is always possible, and against monopoly the principles of free competition declared war. To Cobden himself, free trade in land was the pendant to free trade in goods. But the attack on the land monopoly could be carried much further, and might lead the individualist who was in earnest about his principles to march a certain distance on parallel lines with the Socialist enemy. ”

“ This school holds by competition, but by competition only on the basis of a genuine freedom and equality for all individuals. To secure this basis, it would purge the social system of all elements of monopoly, of which the private ownership of land is in its view the most important. This object, it maintains, can be secured only through the absorption by the State of all elements of monopoly value. Now, monopoly value accrues whenever anything of worth to men of which the supply is limited falls into private hands. In this case competition fails. ”

“ No wrong is done to a man by a bargain to which he is a willing party. That may be, though there are doubtful cases. But in the field that has been in question the contention is that one party is not willing. The bargain is a forced bargain. The weaker man consents as one slipping over a precipice might consent to give all his fortune to one who will throw him a rope on no other terms. ”

“ The one is a restraint which, in the Liberal view, would operate in favour of certain industries and interests to the prejudice of others, and, on the whole, in favour of those who are already more fortunately placed and against the poorer classes. The other is a restraint conceived in the interest primarily of the poorer classes with the object of securing to them a more effective freedom and a nearer approach to equality of conditions in industrial relations. There is point in the argument only for those who conceive liberty as opposed to restraint as such. ”

“ The rise of machine industry since 1760 had destroyed the old domestic system and reduced the operative in the towns to the position of a factory hand under an employer, who found the road to wealth easy in the monopoly of manufacture enjoyed by this country for two generations after the Napoleonic war. The factory system early brought matters to a head at one point by the systematic employment of women and young children under conditions which outraged the public conscience when they became known. ”

“ Free commercial intercourse between nations would engender mutual knowledge, and knit the severed peoples by countless ties of business interests. Free Trade meant peace, and once taught by the example of Great Britain’s prosperity, other nations would follow suit, and Free Trade would be universal. ”

“ A fraction of it devoted to education—free, secular, and universal—would do as much good as when spent on guns and ships it did harm. For education was necessary to raise the standard of intelligence, and provide the substantial equality of opportunity at the start without which the mass of men could not make use of the freedom given by the removal of legislative restrictions. There were here elements of a more constructive view for which Cobden and his friends have not always received sufficient credit. ”

“ Now, combination was naturally disliked by employers, and it was strongly suspect to believers in liberty because it put constraint upon individuals. Yet trade unions gained the first step in emancipation through the action of Place and the Radicals in 1824, more perhaps because these men conceived trade unions as the response of labour to oppressive laws which true freedom of competition would render superfluous than because they founded any serious hopes of permanent social progress upon Trade Unionism itself. ”

“ It drew the line at the adult male; and it is only within our own time, and as the result of a controversy waged for many years within the trade union world itself, that legislation has avowedly undertaken the task of controlling the conditions of industry, the hours, and at length, through the institution of Wages Boards in “sweated industries,” the actual remuneration of working people without limitation of age or sex. ”

“ It is, therefore, a very shallow wit that taunts contemporary Liberalism with inconsistency in opposing economic protection while it supports protective legislation for the manual labourer. The two things have nothing in common but that they are restraints intended to operate in the interests of somebody. ”

“ Within these limits, it allows freedom of contract. But at this point, in the more highly developed trades, the work is taken up by voluntary associations. Combinations of men have been met by combinations of employers, and wages, hours, and all the details of the industrial bargain are settled by collective agreement through the agency of a joint board with an impartial chairman or referee in case of necessity for an entire locality and even an entire trade. So far have we gone from the free competition of isolated individuals. ”

“ Let every people be free to work out its own salvation. Things were not so perfect with us that we need go about setting the houses of other people in order. To complete personal freedom, there must be national freedom. There must also be colonial freedom. ”

“ In the case of children it was admitted from an early date, it was urged by Cobden himself, that the principle of free contract could not apply. Admitting, for the sake of argument, that the adult could make a better bargain for himself or herself than any one could do for him or her, no one could contend that the pauper child apprenticed by Poor Law guardians to a manufacturer had any say or could have any judgment as to the work which it was set to do. ”

“ They were distant lands, each, if we gave it freedom, with a great future of its own, capable of protecting itself, and developing with freedom into true nationhood. Personal freedom, colonial freedom, international freedom, were parts of one whole. Non-intervention, peace, restriction of armaments, retrenchment of expenditure, reduction of taxation, were the connected series of practical consequences. The money retrenched from wasteful military expenditure need not all be remitted to the taxpayer. ”

“ In accordance with competitive ideas the value so created ought not to pass into private hands, and if on social grounds the monopoly is maintained, the taxation of licensed premises ought to be so arranged that the monopoly value returns to the community. ”

“ He can exact a price which bears no necessary relation to the cost of any effort of his own. In addition to normal wages and profits, he can extract from the necessities of others a surplus, to which the name of economic rent is given. ”

“ In part it depends on the growth of the particular locality, and in part on the direct expenditure of the ratepayers’ money in sanitation and other improvements which make the place one where people can live and industry can thrive. Directly and indirectly, the community creates the site value. The landlord receives it, and, receiving it, can charge any one who wants to live or carry on industry upon the site with rent to the full amount. ”

“ The law provides for the safety of the worker and the sanitary conditions of employment. It prescribes the length of the working day for women and children in factories and workshops, and for men in mines and on railways. [2] In the future it will probably deal freely with the hours of men. It enables wages boards to establish a legal minimum wage in scheduled industries which will undoubtedly grow in number. ”

“ As experience of the social effects of action ripens, and as the social conscience is awakened, the conception of injury is widened and insight into its causes is deepened. The area of restraint is therefore increased. ”