The Fabian Socialists

The Fabian Socialists

With the rejection of Marxian ideas of distribution, later So­cialists have cast about for other economic explanation and justification for their social theories. Their principal ideas have been elaborations of the unearned character of rent, interest, and profit. The Fabian socialists—consisting of such well-known per­sonages in literature and economics as George Bernard Shaw, Sidney and Beatrice Webb, and H. G. Wells—have proposed an alternative explanation of distribution. They contend that wealth is social. Modern industry makes it impossible to distinguish the contribution of each individual or each factor in production to the final product. Hence any attempt to distribute wealth and income according to the labor expended is likewise impossible. The only alternative is to declare wealth the property of all.

The Fabian explanation of distribution hinges on the idea of rent as a differential payment made for the productivity of good land over bad. If the same amount of labor were applied and rewarded exactly the same, the greater production of one piece of land over another would not be the result of labor or of owner­ship but of the nature of land itself; yet by the fact of private ownership this surplus accrues to the owner. This same process, however, applies to all kinds of capital—machinery, building sites, soils, and forms of skill. Labor which works with the least productive tools produces barely enough to pay its wages, while those working with superior tools provide a surplus which is taken by the owner of the tools. Even ability is rewarded as a differen­tial rent. Marginal knowledge and skill produce only subsistence, while superior talents produce a surplus which is claimed by the owner of the superior talents. In their pamphlet entitled English Progress Toward Democracy the Fabian Society states its position on distribution: "The individuals or classes who possess social power have at all times, consciously or unconsciously, made use of that power in such a way as to leave to the great majority of their fellows practically nothing beyond the means of subsistence according to the current local standard. The additional product, determined by the relative differences in productive efficiency of the different sites, soils, capitals, and forms of skill above the margin of cultivation, has gone to those exercising control over these valuable but scarce productive factors. This struggle to secure the surplus or 'economic rent' is the key to the confused history of European progress, and an underlying unconscious motive of all revolutions."

The Fabian program for more equitable distribution, unlike the Marxist doctrine, does not require that the economic sur­pluses be returned to the wage-earner. It does call for the con­fiscation of these surpluses for society as a whole. Thus everyone will become a wage-earner, receiving the means of subsistence as wages in return for labor. The standard of living of all will rise, however, as a consequence of equitable distribution of additional goods and services by the state. Revolutionary measures are quite unnecessary, for natural evolutionary processes will bring about the decline of the capitalist and landowner. The growing inter­vention of the state is the means by which the change will be brought about. Already, say the Fabians, profit and rent are drastically reduced through taxation; the use to which property may be put is restricted by legislation; the state has developed industrial enterprise which it owns and operates for the public service; and relationship of employer and employee are closely supervised by the state. "On every side the individual capitalist is being registered, inspected, controlled, and eventually super­seded by the community."