The Liberal Tradition

4. THE GOVERNMENT AND THE NATIONAL ECONOMY

104. H. H. ASQUITH: Speech at Cinderford, 8 October 1903

I should very much like to know how you are going to raise nine millions by a tax on foreign manufactures unless you treat as manufactures for the purpose of the tax articles like paper, leather, cement, and many forms of unwrought iron, which are just as much the raw materials of industries as iron ore or raw wood. All roads converge to the same point. You cannot have retaliation effectively as against your principal foreign competitors without ultimately taxing raw materials and food. Preference admittedly you cannot have without ultimately taxing food, and, as I have endeavoured to show, you cannot have it logically and consistently without also taxing raw materials. The moment you try to put ad valorem duties on manufactures, you lead to the same conclusion. Among the things imported into this country, of those on which no further British capital or labour is to be expended the proportion is so insignificant that it would not yield you any substantial revenue at all. By whatever way you approach it you come to the same goal. This is a proposal to tax British industry, to tax the food of the people, and thereby to diminish their wages, to tax the raw material out of which our wealth is made. It is a scheme which is based upon unfounded assumptions and unproved inferences. There is no ground whatever for saying either that British trade, as a whole, is stagnant or decaying, or that the Empire can only by maintained by reverting to fiscal devices which were tried and found wanting in the old days of Protection. Free influx of food and of raw materials, from every possible source of supply, into this country is not only as essential, but is more essential to our national strength and prosperity than it was in the days of Cobden and Peel.

Do not, however,—and this shall be my final word—do not let it be supposed that because we are driven to defend the citadel of free trade we, therefore, think that all is for the best and are content with a policy of folded hands. That there are disquieting features in our industrial as in our social conditions no honest observer, certainly no member of the party of progress, will be found to deny. We have seen industries, in which we ought to have maintained our supremacy, falling behind, and in some cases entirely taken away from us by our competitors. Defective knowledge, inferior processes, lack of flexibility or versatility, a stubborn industrial conservatism, these are the real enemies of British trade and have done us infinitely more harm than all the tariffs and all the dumping syndicates that were ever created. Better education, better training, better methods, a larger outlook, these are our primary needs—and it says little for our political sagacity that we should allow our minds to be diverted from them by quarrels as to the quantum of dogmatic theology that is to be administered to little children, or by attempts to revive the buried fallacies of Protection. True it is also, that in spite of the continuous growth of our national prosperity, we still have with us the unemployed, the ill-fed, the aged poor; but here, again, let us look to natural and not to artificial remedies. Instead of raising the price of bread let us try to raise the standard of life. Temperance, better housing, the tenure and taxation of land, these are matters as to which we have allowed our legislation to fall deplorably into arrear. To take up the task in a spirit of faith and of resolute purpose is, I hope and believe, the mission of the Liberal Party in a Liberal Parliament.

All Sides of the Fiscal Controversy, ed. by T. C. Gilmour (1903), pp. 72-3.

105. SIR HENRY CAMPBELL-BANNERMAN: Speech at Bolton, 15 October 1903

Why are we free-traders? They say that it is a shibboleth. Well, a shibboleth is a test, and I am not sure that it is not somewhat of a test. It is a test of the patriotism, and the good sense, and the insight of a man which side he takes in a controversy such as this. But they talk of it as an obsolete shibboleth, and I am under the impression that they think a shibboleth means a doctrine, and this is only a way of trying to discredit and get rid of a doctrine which is inconvenient to them. Then they say we are worshippers of Cobden. Yes, we are admirers of Cobden. But we are not free-traders because of Cobden. On the other hand, we revere Cobden and Peel and Gladstone because of what they did for free trade, nor is it any condition of our belief in free trade that other countries should follow our example. The thing is good for us, good for this free country, good for every man, whatever his calling or station in the country may be. We are satisfied that it is right because it gives the freest play to individual energy and initiative and character and the largest liberty both to producer and consumer. We say that trade is injured when it is not allowed to follow its natural course, and when it is either hampered or diverted by artificial obstacles. We are not willing to substitute for a system which safeguards the interests of the whole community and maintains the purity of Parliamentary government a system of out-relief based upon favouritism and involving the transformation of healthy trades giving strength to the community into parasitic industries sapping its vitality. We do not wish to promote the creation of monopolies and privilege which protection invariably does. We are Liberals. We believe in free trade because we believe in the capacity of our countrymen. That at least is why I oppose protection root and branch, veiled and unveiled, one-sided or reciprocal. I oppose it in any form. . . . Men will say—they are saying—are you satisfied with the condition of the country, with the standard of well-being of the people? Here is Mr. Chamberlain advocating protection and putting everything else aside for it; here is Mr. Balfour lagging and limping lamely after him along the same path: tariffs are to them the divine remedy for the woes that afflict the State. It may be said, if you Liberals reject their remedy have you any remedy of your own, or do you think no remedy is required? I answer, No, Sir, emphatically; no, we are not content. We do not put forward free trade as being in itself a full remedy because we are satisfied with free trade and with the increase in our collective wealth that has accompanied it, and it must not be thought that we are not as determined as ever to deal with the impediments to the wholesome distribution of wealth, whether they arise from bad laws, bad customs, bad institutions, bad social conditions, or from careless and extravagant administration.

The Times, 16 October 1903.

106. DAVID LLOYD GEORGE: Speech at Bedford, 11 October 1913

Landlordism is the greatest of all monopolies in this land. Not only is it the greatest of all monopolies, it is the least controlled of all monopolies. I want to know the reason why, and I think the time has come to inquire. . . . I wonder how many people there are who realise what gigantic powers those who own the land possess upon the life of the nation. The Sovereign of this Empire has no power over his subjects comparable to the power which the landlord has over his subjects. What can he do? The landowner can devastate the countryside. He can sweep every cottage away and convert it into a wilderness. He can do what no foreign invader is permitted to do now by the laws of civilised warfare—destroy cottages and drive the peasantry away to exile, convert the land into a desert. He can do more than a foreign enemy. Even in the old barbarous days of warfare, the moment the invader had retired the peasants returned to their homes, rebuilt their cottages, tilled their land, and the country assumed its normal appearance of industry and of thrift. Landlordism can by legal process not merely ordain a wilderness, it can maintain a wilderness. . . .

The workman is worse off than he used to be. There was a time when he had an interest in the land—a freehold interest. The labourer was a freeholder in the land. He had his commons. There he could graze a cow to give him butter and milk for himself and his children. There was a little patch where he could raise corn to feed them. There he had his poultry, his geese, his pigs—a patch of land where he could raise green produce for his table. He was a gentleman. He was independent. He had a stake in the country. His title was as ancient and apparently as indefeasible as that of the lord of the manor. Where has it gone to? Stolen! Landlord Parliaments have annexed Naboth’s vineyard. There is now occasionally a little garden. Sometimes, as a matter of grace, he has a little row of potatoes, but he has no longer a right in the soil as his fathers had. He has been converted from a contented, well-fed, independent peasant to a hopeless, underpaid, landless drudge on the soil.

His wages are less to-day in proportion to their purchasing power than they were in the reign of Henry the Seventh. That is what we have done with him, and the land system is responsible for it. The labourer has no real access to the owner of the soil, and the responsibility must lie with the owner. . . . Land ownership is not merely an ownership; it is a stewardship. How idle it is to talk about the ownership of land as if it were something you were putting your money in and had no responsibility for! Land ownership has always through its history been established, maintained, and continued as stewardship for the State of that particular plot of British soil. It is enforced by ownership. Ownership is its condition. Ownership is its reward. In essence it is a trust. The landowners of England are responsible not merely for the farmers that till their soil, but for the labourers as well.. . .

It is not enough to deal with the state of things temporarily and tentatively. You must deal with it thoroughly. You must do what business-men do. When a business gets into a thoroughly bad condition through long years of mismanagement, it is no use tinkering here and mending there. You must recast it and put it on a thoroughly good basis and deal boldly with it. . . . I will give you a few of the directions in which this can be accomplished. The best labour and abundance of the best labour must be drawn to the land by first of all securing for the labourer a real living wage—and better conditions as to hours and otherwise. He must be given a decent, comfortable home to bring up his family in, and where he can rest after his toil. We must also give him a measure of land that will at least enable him to provide himself and his family with all the vegetables they need for their table. In Ireland by law an acre of land has been secured for each cottage. Hours of labour must be so ordered that leisure shall be left him for cultivating his garden.

You must secure for him a ladder of progress, something that will give him a prospect. There is the garden—that is the first step. There ought to be an allotment for those who are a little more enterprising. Those who are still more enterprising ought to be able to look forward to a small holding—ten, twenty, thirty, and up to fifty acres—and then the most enterprising and capable of all amongst them might look forward to taking their position among the substantial farmers in the community. That is for the labourer—a living wage, fair hours of labour, and for all of them a decent home, gardens, prospect of allotments, small holdings—that is the first condition of any safe, secure, beneficial land reform.

What next? . . . The cultivator, large or small, must be completely protected against confiscation of the improvements effected by him in the conditions of the land, whether such confiscation takes the form of capricious eviction or increase in the rent, on his own improvement, or the destruction of his crops by game. One more. Every effort must be made to equip the cultivator for his task, by instruction, by expert advice, and by other means. The cultivator must be assisted to get his produce to the market without paying excessive tolls to anyone, and without unnecessary delay, difficulty and expense in collection. . . .

The present system of rating, in so far as it discourages improvement by either owner or cultivator, and rewards the indolent or unenterprising or overcrowding owner who declines to put his land to the best use, must be reconsidered and recast. Greater and wider facilities must be given to the State for the acquisition of land, whether for immediate or prospective use, and the land must be acquired on terms which are fair to the community as well as to the owner. . . . There ought to be provision made for dealing with cases where the owner has either not the power or the means or the disposition to spend the necessary capital on buildings, draining, or other expenditure for the best equipment of his land.

And last of all—and this is the point—the powerful aid of the State, both by legislation, by administration, and by finance, must be invoked to carry these purposes—all of them—into effective operation. . . .

Walking along the principal streets of our great cities you will see displayed advertisements calling attention to the allurements of Canada, Australia, and New Zealand, for British labour. There you will find a picture of a nice home, with most beautiful surroundings. . . . Do you know when the land question will be settled in England, and Scotland and Wales? It will be when similar advertisements, setting forth the attractions of settlement on British soil will be displayed in some of the most prominent windows of the streets of every city and town in the land.

D. Lloyd George, The Rural Land Problem. A speech delivered . . .. on 11 October 1913 (Liberal Publication Dept.).

107. DAVID LLOYD GEORGE: Speech at Middlesbrough, 8 November 1913

I am not going to dwell on the effects of overcrowding. You know them just as well as I do. It is impossible to bring up a healthy, vigorous, and strong race of men and women under these conditions. It is a national weakness as well as a national disgrace. . . . Men do not live under these conditions of their own free will and choice. Why are they not altered? . . . In my judgement the great municipalities of this country have struggled manfully in very difficult circumstances to meet these conditions. What are their difficulties? The first difficulty they have to encounter is the price of land—the extravagant compensation they have to pay before they can move any step in the direction of reform; and the second difficulty is the pressing burden of rates. . . .

You have got a ring, a dense ring, of impenetrable greed compressing the town and crushing it in, until at its very heart you get a hard slum. We want to shatter that ring, so that the town shall have lungs and expand. . . . You have a great city in this county, the city of Leeds. A short time ago they wanted to acquire land for the purpose of their waterworks. They wanted to construct two reservoirs about thirty miles from the town. It was very essential for the life of the county. They applied to a great landowner who is a member of the House of Lords. He has two great estates in the neighbourhood. I believe he paid for one of them £25 an acre. He paid for the other £21 an acre, and this includes the land, good and bad, and buildings as well. That is what he paid. It is not what the Leeds Corporation paid. The Leeds Corporation applied for 394 acres on the edge of the moorland—not good agricultural land, not fairly good; most of it was bad. It was twenty miles from the nearest town of any size. Therefore it was not building land. What did he demand for it? I ought to explain that the rent was about 12/- an acre. He demanded £500 an acre. He demanded a huge sum of money because the construction of the waterworks would disturb the game on the rest of the property. . . . The arbitrators were summoned and they awarded two hundred years’ purchase for that land, which was twenty miles removed from the nearest town of any size, on the edge of the moorland. Two hundred years’ purchase they had to pay for acquiring land for the purpose of discharging the most elementary duty of a municipality—to provide water for the people. He paid rates on the basis of twelve shillings an acre. . . . Here is a case in Hastings. The Hastings Corporation had to buy land for an essential purpose. It was rated at £3 an acre, the price was £2000 an acre, which they paid. This was 677 years’ purchase. Edinburgh has a more moderate case, they paid 384 years’ purchase for their land. . . .

[Mr. Lloyd George then went on to discuss rating problems, suggesting that the National Exchequer should bear a bigger burden of the expense of local services and that there should be a reform of the rating system.]

There is another thing I want to say about rates. There are people who do not contribute now who ought. I gave you a case, the case of the noble Lord who sold 394 acres of his land. He was paying on the basis of twelve shillings an acre—he was probably paying about half-a-crown an acre. It is about time he should pay on the value he charges other people. The worst of the present system is that the moment a man neglects his property he escapes rates; the moment a man begins to improve his property he is fined as a ratepayer. A shopkeeper extends his premises, a great workshop is erected, the rate assessor comes down and says: ‘Information has been laid against you, sir, that you have extended your works, that you are providing more employment for hundreds of workmen; are you guilty or not guilty?’ He says: ‘I cannot deny it.’ Then says the assessor: ‘I fine you £50 or £100 a year as long as you live, and don’t do it again.’ And he goes on to a moorland near Leeds, not a building in sight, not a plough on the land, no sign of one. Then he says, ‘This is all right, no improvements here.’ He meets the proprietor and says, ‘What are you doing with this land?’ The proprietor says, ‘I am holding it up until Leeds people want water, then I am going to charge them 800 years’ purchase for disturbing my pheasants.’ The rate collector takes him by the hand and says, ‘It is such men as you who make the greatness of our country; we will only put you down at twelve shillings an acre. We have to put something down.’

He goes home, feeling that he has done his duty. But somebody meets him in the street and says, ‘Have you heard that Mr. Brown has added a bathroom to his house?’ He says, ‘I don’t believe it; I will go there at once.’ He goes and says, ‘Is this true what I hear about you, that you have put on a new bathroom at your house?’ Mr. Brown says, ‘I am sorry’, and the official replies, ‘£2 added to your assessment, sir.’ And he walks home past a slum district, and says, ‘No baths here, anyway.’ The proprietor reassures him on the spot. ‘No improvements about my property, it is not worth as much as it was years ago.’ He takes him by the hand and says, ‘Well done, thou good and faithful servant, go and write quickly thy assessment down by 15 per cent.’ You think I am caricaturing. That is the rating system of England. . . .

Now I will summarise what we are going to do. . . . The first step will be the organisation of a complete survey, a national survey by the Imperial Government, of the whole of the housing accommodation of this island. Note will be taken of every inadequacy, of every defect, every insufficiency in housing accommodation—everything which leads to overcrowding and all its evils. There will be an inventory of all the slums, the insanitary character of dwellings, the lack of air, and light, and space, the absence of any means of healthy recreation, the deficiency of transport arrangements . . . in fact the survey will be complete and searching. And that survey will be the basis of all future operations against slums and overcrowded houses.

There will be facilities for the erection of new houses and transport, the removal of the existing difficulties in the way of town improvement, the extravagant prices of land, the heavy rates, the injustice in our rating assessments, and the restrictions on the purchase of land by municipalities. And then, when we come to the poor residuum of the population who, if you gave them a new house, could not pay for it, who, working hard and incessantly, cannot earn enough to pay for it, we propose to deal with that by extending our wages boards so far as to give the people who labour a fair day’s wage for a fair day’s work. And then there is the still larger problem of casual labour—the people who can only get a job for a day or two. That problem we hope to solve by opening up the resources of the land. . . .

I have told you something about the conditions of things in our great cities. It is hardly credible that in a great rich land like ours there should be so many people with hunger and pain haunting their lives. . . . I have a deep conviction that by a sustained effort we can eliminate for ever out of the life of this nation the waste, the disorganisation, the intemperance, the injustice, the wrong which is responsible for so much human wretchedness. There is a vast amount of human misery in this country which is preventable, and let no man be deceived by tranquillities, unless we exert ourselves to remove these evils the despair they create will rest on our souls.

D. Lloyd George, The Urban Land Problem. Speeches delivered . . .. at Middlesbrough on 8 November 1913 (Liberal Publication Dept.).

108. L. T. HOBHOUSE: Liberalism (1911)

In destroying the last relics of this system economic individualism has laid the basis of great material advances, but at great cost to the happiness of the masses. The ground problem in economics is not to destroy property, but to restore the social conception of property to its right place under conditions suitable to modern needs. This is not to be done by crude measures of redistribution, such as those of which we hear in ancient history. It is to be done by distinguishing the social from the individual factors in wealth, by bringing the elements of social wealth into the public coffers, and by holding it at the disposal of society to administer to the prime needs of its members.

The basis of property is social and that in two senses. On the one hand, it is the organised force of society that maintains the rights of owners by protecting them against thieves and depredators. In spite of all criticism many people still seem to think of the rights of property as though they were conferred by Nature or by Providence upon certain fortunate individuals, and as though these individuals had an unlimited right to command the State, as their servant, to secure them by the free use of the machinery of law in the undisturbed enjoyment of their possessions. They forget that without the organised force of society their rights are not worth a week’s purchase. . . .

This brings us to the second sense in which property is social. There is a social element in value and a social element in production. In modern industry there is very little that the individual can do by his unaided efforts. Labour is minutely divided; and in proportion as it is divided it is forced to be co-operative. Men produce goods to sell, and the rate of exchange, that is, price, is fixed by relations of supply and demand, the rates of which are determined by complex social forces. In the methods of production every man makes use, to the best of his ability, of the whole available means of civilisation, of the machinery which the brains of other men have devised, of the human apparatus which is the gift of acquired civilisation. Society thus provides conditions or opportunities of which one man will make much better use than another, and the use to which they are put is the individual or personal element in production which is the basis of the personal claim to reward. To maintain and stimulate this personal effort is a necessity of good economic organisation, and without asking here whether any particular conception of Socialism would or would not meet this need, we may lay down with confidence that no form of Socialism which should ignore it could possibly enjoy enduring success. On the other hand, an individualism which ignores the social factor in wealth will deplete the national resources, deprive the community of its just share in the fruits of industry and so result in a one-sided and inequitable distribution of wealth. Economic justice is to render what is due not only to each individual but to each function, social or personal, that is engaged in the performance of useful service, and this due is measured by the amount necessary to stimulate and maintain the efficient exercise of that useful function. This equation between function and sustenance is the true meaning of economic equality. . . .

The central point of Liberal economics, then, is the equation of social service and reward. This is the principle that every function of social value requires such remuneration as serves to stimulate and maintain its effective performance; that every one who performs such a function has the right, in the strict ethical sense of that term, to such remuneration and to no more; that the residue of existing wealth should be at the disposal of the community for social purposes. Further, it is the right, in the same sense, of every person capable of performing some useful social function that he should have the opportunity of so doing, and it is his right that the remuneration he receives for it should be his property, i.e. that it should stand at his free disposal, enabling him to direct his personal concerns according to his own preferences. These are rights in the sense that they are conditions of the welfare of its members which a well-ordered State will seek by every means to fulfil. But it is not suggested that the way of such fulfilment is plain, or that it could be achieved at a stroke by a revolutionary change in the tenure of property or the system of industry. It is, indeed, implied that the State is vested with a certain overlordship over property in general and a supervisory power over industry in general, and this principle of economic sovereignty may be set side by side with that of economic justice as a no less fundamental conception of economic Liberalism. For here, as elsewhere, liberty implies control. But the manner in which the State is to exercise its controlling power is to be learnt by experience and even in large measure by cautious experiment. We have sought to determine the principle which should guide its action, the ends at which it is to aim. The systematic study of the means lies rather within the province of economics; and the teaching of history seems to be that progress is more continuous and secure when men are content to deal with problems piecemeal than when they seek to destroy root and branch in order to erect a complete system which has captured the imagination.

It is evident that these conceptions embody many of the ideas that go to make up the framework of Socialist teaching, though they also emphasise elements of individual right and personal independence, of which Socialism at times appears oblivious. The distinction that I would claim for economic Liberalism is that it seeks to do justice to the social and individual factors in industry alike, as opposed to an abstract Socialism which emphasises the one side and an abstract Individualism which leans its whole weight on the other. . . . Thus in economics we avoid the confusion of liberty with competition, and see no virtue in the right of a man to get the better of others. At the same time we are not led to minimise the share of personal initiative, talent, or energy in production, but are free to contend for their claim to adequate recognition.

L. T. Hobhouse, Liberalism (1911), pp. 188-212.