Piecemeal Collectivism

IN countries like Great Britain or the United States there is no manifest disposition to establish a totalitarian order with a regimented population under a militarized autocracy, but for some sixty years these democracies have tended increasingly to seek relief from poverty and disorder by the use of collectivist measures. In fact it may be said that contemporary progressives are gradual collectivists and that they hope by the gradualness of their methods to establish a collectivist order piecemeal, and thus avoid the violence of dictatorship.

Those who hold this view are at present the overwhelming majority of public-spirited and well-disposed persons in the democratic countries. They are not fanatics who, in order to achieve a planned society, would be willing to sweep away the guaranties of liberty and the responsibility of rulers to the people. Their goal is the public administration of the economy, but they believe that no step must be taken to that goal without popular consent obtained by persuasion in open debate. They hold that in this way the advance into collectivism can be made without class struggle, dictatorship, or the militarization of society.

For approximately three generations a gradual democratic advance into collectivism has been under way. This movement also has its ideology. But here again, as with the fascists and the communists, theory is very unlike practice and the results are very different from the promises.

The Theory

The theory of gradual collectivism rests upon the assumption that majorities express the will and represent the interests of society, and that they have inherited from the king the prerogatives of his sovereignty. The gradual collectivist believes in the absolutism of the majority, having by a fiction identified the mandates of transient majorities with the enduring and diverse purposes of the members of a community. He thinks it absurd that a few oligarchs in the Kremlin or demagogic dictators in Berlin or Rome should pretend that their personal decisions are the comprehensive purposes of great nations. Yet the gradual collectivist, under the banner of popular sovereignty, believes in the dictatorship of random aggregations of voters. In this theory the individual has no rights as against the majority — constitutional checks and bills of rights exist only by consent of the majority. Even the right of the majority to rule is at the mercy of any passing majority. There is nothing in the doctrine of the sovereignty of the majority to preclude the abolition of majority rule by vote of a majority. In fact it was under the ægis of this doctrine that Napoleon III and Hitler came to power.

Thus by one fiction the gradual collectivist identifies passing majorities with the nation. By another fiction he treats the legislators as representative of the majorities which elected them. And finally, by a third fiction he pretends that the executive and administrative machine represents the wills of a majority of the legislators. The nation is supposed to have delegated its unlimited authority to a majority of the enfranchised voters. They are supposed to have delegated their unlimited authority to a majority in the legislative assembly. The assembly is supposed to have delegated its unlimited authority to the executive and the bureaucracy. To this central authority the gradual collectivist then proposes to entrust increasingly the administration of the social system.

It is evident that a régime of this sort is afflicted with an insoluble contradiction. In so far as it seeks to administer the economy under a rational and coherent plan, it must somehow prevent one majority from overriding the decisions of a previous majority. For if a plan is to be carried out, it must be adopted and the people must thereafter conform. If they do not conform, if they are free at any time to agitate for amendments, the plan ceases to be a plan. It would not be a plan if its parts were not closely interrelated; if it is subject to continual change at vital points, the whole design has to be remade continually. Suppose, for example, that the Russian people had had democratic control over the Five-Year Plan, and that, having assented at the outset to the proposal that they should manufacture steel before they manufactured clothing, they had changed their minds. In making this change they would not have amended the plan: they would have abolished it. It would then have been necessary to draft a wholly different plan, and two years after the new plan had been put into effect the people might again have changed their minds. This would have called for still a different plan. But a series of different plans is no plan at all.

The very essence of the democratic process is that the rulers are continually responsible to popular opinion, and unless that opinion is free to change, and in changing to alter the policy of the state, there is no democracy. The very essence of the conception of planning is that a design can be adopted to which the people will thereafter conform. This is equivalent to saying that a democratic people cannot have a planned economy, and that in so far as they desire planned economy they must suspend responsible government.

The Polity of Pressure Groups

In the real world the historic advance of democratic collectivism has not been directed by the rationalized vision of a new society. It is true these visions have influenced the argument over specific measures, rousing many to action and breaking down resistance, and it would be difficult to exaggerate the practical influence on western society of these collectivists who call themselves social democrats, Fabian socialists, evolutionary or revisionist socialists, or merely progressives. The collectivists have conquered the intellectual world, to borrow a phrase from Mr. Keynes, as thoroughly as the Holy Inquisition conquered Spain. They have made it seem rather ridiculous and contemptible to hold that mankind can advance by proceeding with the process of liberation; they have persuaded the intellectual world that social improvement must come by magnifying the dominion of the state. But though collectivists exercise a kind of intellectual monopoly and absolute authority over the assumptions of modern political thought, they have not imbued the mass of the people with their own general conception of society as a whole. The doctrines remain the possession of an élite. Electorates and parliaments, though they have been moving rapidly in the collectivist direction, have not consciously been shaping society according to a new design.

Though the movement has been under way for more than sixty years, up to the present time no socialist party in any of the large western democracies has obtained the support of an effective majority of the electorate. It is a matter of common knowledge that even when the socialist vote has been considerable it is no measure of the number of genuinely convinced and indoctrinated socialists. There are many more socialist voters than there are convinced socialists. Thus it is fair to say that the advance of collectivism has not been determined by the image of a collectivist society. The advance has consisted of a series of definite measures, all more or less within the same general category, to be sure. But these measures have come not from a general theory but from a series of efforts to deal with specific grievances and to provide particular benefits.

Such has been the inner principle of the gradual and democratic collectivist movement. It is, I believe, its only possible principle. Because a democracy cannot adopt a collectivist plan, the practical initiative in each measure of its gradual advance comes not from the energy of a general ideal but from organized interests seeking protection and privileges. In practice, gradual collectivism is not an ordered scheme of social reconstruction. It is the polity of pressure groups.

The movement advances by measures adopted from time to time at the instigation of aggrieved or aspiring groups of voters. Through their leaders and lobbyists they persuade, cajole, coerce, and occasionally corrupt the electorate or the parliament; often they conspire with other organized interests to form majorities by coalition. Though exceptions could be cited, it is substantially true that, while the moral and intellectual justification for each measure is derived from the general ideology of collectivism, the initiative comes from organized interests. There has been some legislation for the welfare of the weak and the dependent which may be said to be the work of humane and disinterested men. But these measures do not deeply affect the conduct of business and government. Though they are humanly important, they are peripheral and superficial, and by all thoroughgoing collectivists are recognized as such.

The measures which have profoundly affected the social order because they have meant the shift of important social benefits from one group to another, from one region or occupation to another, from individuals to great corporations, or from individuals to the government — all such decisive measures have proceeded from the pressure of interested groups upon the electorate and upon the politicians. The particular measures would not have been adopted when they were adopted but for the organized agitation, the lobbying, and the exercise of influence by these interested groups. Thus no serious historian of politics would imagine that he had accounted for the protective tariff or the system of bounties or subsidies, for the monetary and the banking laws, for the state of the law in regard to corporate privileges and immunities, for the actual status of property rights, for agricultural or for labor policies, until he had gone behind the general claims and the abstract justifications and had identified the specifically interested groups which promoted the specific law.

Such an understanding of the actual history should not be confused with the arbitrary classification of society into a capitalist class and a proletarian class.

For while it may serve the purposes of a revolutionary propaganda to say with Marx that the modern state is ‘nothing more than a committee for the administration of the consolidated affairs of the bourgeois class as a whole,’ the specific measures taken by modern states are unintelligible on the hypothesis that there is a ‘bourgeois class’ which has ‘consolidated affairs.’ Consider, for example, the American tariff as it existed when President Hoover signed the Hawley-Smoot bill in 1930. It would be admitted by all, I suppose, that with negligible exceptions each item in each schedule originated with at least some of the producers of the commodity protected by the duty, and that the rate was either a grant of their demands or a compromise between their demands and the objections raised by representatives of some other interest. No one would pretend that this tariff which profoundly affected the whole American economy, not to speak of the economy of the world, was in any sense of the term conceived by the ‘ bourgeois class’ as a whole. The very essence of that tariff, and of all its predecessors, was that, far from representing the ‘consolidated’ interests of business men as a class, it represented the special interests of some of them.

Under gradual collectivism, precisely because it is gradual, the measures of state interference are almost invariably promoted by particular groups. Invariably they claim that their particular interest is identical with the national interest. But it is the particular interest which moves them to raise the issue. The legislature may reject the claim if someone is able to expose its fallacy. But in so far as the legislature acts, it must listen to some petition. It does not move unless it has been provoked by the claim of some group. For it has no other criterion by means of which it can decide where and when and to what end it should intervene.

Particularity, both of origin and of incidence, is the essence of the specific measures whereby gradual collectivism develops. The protective tariff does not stand alone. The same principle is no less evident in the collectivist measures designed to assist farmers or workers. The very fact that they are generally proposed on the ground that something must be done to equalize burdens, privileges, and bargaining power is in itself a most significant indication of the real nature of the process. If we examine such measures in detail we shall rarely fail to observe that in fact they are promoted not by ‘ the farmers ’ or by ‘labor’ as a whole but by particular interests among farmers and workingmen.

The Agricultural Adjustment Act, for example, in its dealings with cotton, paid little attention to the tenant farmers, the share-croppers, not to speak of the agricultural laborers who were displaced by the curtailment of cotton production. Moreover, the curtailment of cotton production by the method of acreage reduction paid scant attention to the claims of the efficient producer as against those of the less efficient. Furthermore, the act itself selected nine ‘basic’ commodities which were entitled to benefit payments. All the other farmers had to contribute to those benefits by paying the processing taxes. Thus a dairyman paid a tax on cotton, wheat, hogs, and corn, but received no benefit payments. I do not mean to argue that, in the critical conditions which prevailed in the year 1933, special legislation of this sort may not have been temporarily in the general interest. My concern is merely to illustrate the underlying principle of gradual collectivism, which is that its specific measures owe their origin to particular interests and that its design follows the pattern of the influences exerted by pressure groups.

The same principle tends to control labor legislation. Anyone who will analyze the laws passed to benefit labor will find that, apart from some few of a humanitarian character, they reflect with fair accuracy the strategic advantages of certain groups of workers. Thus railroad employees are more highly protected by special laws than any other group, and among railroad employees the members of the brotherhoods are more carefully protected than the shopmen or the unskilled workers who maintain the tracks. The social security laws providing for insurance against unemployment, for example, and the laws to promote collective bargaining give protection to well-established, strategically placed, and highly organized groups. They are quite unable to give the same degree of protection, let us say, to domestic servants, to clerks, or to casual workers.

The Vicious Paradox in the Polity of Pressure Groups

It appears to make no difference where collectivism of this sort begins. Whether it begins with tariffs for some manufacturers, special laws for certain groups of workingmen, or bounties for farmers, the one certain thing is that in a democratic society the granting of some privileges must be followed by the granting of more privileges. In fact it might be said that when modern states abandoned the Jeffersonian principle of special privileges to none they became committed, by the sentiment for equal rights, to the principle of special privileges for all.

Thus a tariff for one industry will make irresistible the demands of other industries for equal protection. At the end of the process, very nearly reached by the United States in 1930, tariffs become universal and well-nigh exclusive against all foreign products that can be made domestically. But such tariffs only mark the beginning. The agricultural interests will demand protection and bounties in order to achieve ‘parity.’ An advanced system of labor legislation always demands the support of an exclusive tariff. Thus under the National Industrial Recovery Act, which sought by federal laws, called codes, to elevate wages and working conditions, it was provided that if ‘substantial quantities’ of any article were imported, and might ‘render ineffective’ the ‘maintenance of any code,’ such imports could be prohibited.

Now the effect of attempting to give protection to all the interests capable of bringing influence to bear upon the government is to cancel many of their special advantages. One tariffprotected manufacturer in an economy otherwise committed to free trade will, of course, obtain a substantial advantage. But, if the producer from whom he buys his raw materials is also given protection, some of that benefit is canceled, for the costs of production are increased. If, then, bounties and tariffs have to be given to the farmers in order to protect them also, the first lobbyist not only has to contribute to the benefits out of his profits, but finds that the cost of living has risen for his employees. When they organize to increase their real wages, more of his benefits are canceled.

If the sole effect of this cumulative collectivism were to cancel the special advantages of the various pressure groups, it might be regarded as a harmless method of letting them enjoy the appearance of special privileges while the community escaped the consequences. If, by making privilege universal, special advantages were neutralized; if, by giving one interest after another a special favor, all the interests came to be on an equal footing, the process might be silly, but it would not be dangerous. The believers in gradual collectivism seem to have some such comforting thought in the backs of their minds.

The notion of equal privileges for every interest has, as it happens, been elaborated into a scheme of social organization. It is known in Italy as the Corporative State. In Russia it is partially embodied in the Soviet system of government. And long before that the idea was adopted by several schools of social reconstruction, among them the guild socialists and syndicalists of many sorts.

The theory of these schemes is that government should be ‘functional’ rather than geographical — that is to say, in the state each person should be represented as a worker rather than as a citizen. Many democrats have been attracted by the idea, thinking that the avowed representation of particular interests would be better than the lobbying of pressure groups pretending to be disinterested patriots. They have been tempted to hope that the open avowal of all special interests would neutralize their self-regarding purposes into a realistic but harmonious conception of the general interest. The trouble with the scheme is that it sanctifies the selfregarding purposes of special interests and does nothing to subdue them. For many particular interests do not in any conceivable combination constitute the general interest; to entrust the government of a nation to such a body would be to turn the sovereign power over to a coalition of its most powerful interests. As a matter of fact, though the semblance of such a political organization exists in Italy, in Russia, and even in Germany, no real power is entrusted to it in any of these states. The sovereign power resides in the dictatorship, and in fact only a dictatorship could hope to keep a chamber of special interests from conspiring continually against the national welfare.

There is no reason to think that the self-regarding activities of special groups can be compensated or regulated by organizing more and more of them. In the historical period during which organized interests have been increasingly active and their activities treated as more and more reputable, there have been two momentous developments. By organized restrictions of many sorts the production of wealth has been retarded, the method of monopoly being employed to enrich the favored interests. The imprimatur of respectability having been put upon organized privilege, the whole population has become imbued with the idea that as a matter of right everyone is entitled to invoke the law to increase his income.

This is the vicious paradox of the gradual collectivism which has developed in western society during the past sixty years: it has provoked the expectation of universal plenty provided by action of the state while, through almost every action undertaken or tolerated by the state, the production of wealth is restricted. By these measures modern states have frustrated the hopes which their policies have aroused. They have put into effect measures of scarcity, and all the while they have taught the people that the effect of the policy would be to give them abundance. To that paradox no small part of the dangerous tension in modern society is due.

The Restriction of Wealth

That a system of gradual collectivism, operating through tariffs and bounties, price fixing and wage fixing, must reduce the wealth of nations has seemed so self-evident to a long line of economists that one of them has been moved to say that ‘only the feebleminded and the paid agents of vested interests will be found to deny such propositions’ (Lionel Robbins, in The Great Depression). Yet the proposition is denied in the practice of all modern states, and among the great mass of their inhabitants it is regarded as far from self-evident that to restrict production is to become deliberately poorer.

It is curious and significant, however, that while almost every interest favors collectivist measures, no one defends them all. Thus, for example, the processing tax on cotton — levied in order to pay cotton planters to restrict their output and raise the price — was invalidated in the Supreme Court as the result of a lawsuit brought by a textile mill corporation which enjoys high tariff protection. Manufacturers, who have the legal privilege of exclusive possession of the domestic market at more than a competitive price, have no difficulty in understanding the objections to laws which create artificially high prices for their raw materials. They can see no less easily the fallacy of monopolistic union wage rates. All the reasons for respecting the law of supply and demand, all the arguments against monopoly, restriction, and scarcity, are self-evident to them except in the field where they themselves have an exclusive market under government protection.

The managers of the great corporations are fully aware that the production of wealth is restricted by labor laws and labor contracts which enable their employees to do less work for more pay. But it is not so easy for them to see that when, by means of tariffs or a monopolistic control of prices, they restrict production and raise their prices above the competitive level they too are practising a policy of scarcity. Though they will shut down their own plant rather than sell at a lower price, and will invoke tariff protection to prevent foreigners from selling at the lower price, they nevertheless understand that the soundest principles of economics have been violated when farmers are assisted by the government to plough under cotton and slaughter little pigs, when wage earners insist on shorter hours at a high ‘prevailing wage.’ These same farmers, however, relying upon the full power of the government to raise their prices by restricting production, will in the same breath denounce the railroads and utilities for not expanding production by reducing the rates.¹

Thus, in the debate which accompanies the advance of gradual collectivism, particular interests will be found advocating protection for themselves and free trade for those with whom they transact their affairs. If the student is looking for a defense of the system, he can find it by assembling the arguments used by each interest in defending its special privilege. But an equally impressive collection of separate briefs could be assembled, written by spokesmen for the same interests, denouncing as uneconomic, as immoral, as unconstitutional, often as treasonable and subversive, the same practices when carried on by other interests.

These self-contradictory pleadings are such glaring instances of man’s ability to see the mote in his neighbor’s eye and to overlook the beam in his own that one is led to ask how the disinterested exponents of gradual collectivism can persuade themselves that they have a rational political philosophy. At the level of practical politics there are the pulling and pushing of interested groups contending for the assistance of the sovereign power. At the level of popular debate there are the special pleas of interests, each insisting that the general interest will be served if the coercive authority of the state is placed at its disposal. The gradual collectivist has to suppose that over and above these special groups and their special pleadings there exists a sovereign power able to discern the universal in the particular, and to assert it with the force of law. He has to suppose that the electorate and its parliament have a criterion, presumably a body of principles, by which, after they have felt all the pressures and heard all the arguments, they can determine which imports to restrict, which industries and regions and occupations to favor, which prices and wages to fix and at what rate to fix them.

It is important that we make clear to ourselves the real character of the judgments which the method of gradual collectivism requires the voters and their representatives to make. They are not expected merely to interpret and enforce a system of established rights among vested interests. On the contrary, they are asked to create a series of new rights, some to replace old ones, most of them, however, in addition to the old ones. Thus they destroy some vested rights and call into being others. The arbitrament required of a democracy under gradual collectivism is, therefore, a peculiarly difficult one. It calls for the continual creation of new special privileges; it has to be assumed that the people and their parliaments can judge correctly which special privileges will be, and which will not be, for the general welfare. For under gradual collectivism the state does not merely enforce existing rights. Nor does it repeal privileges and liquidate vested interests. It establishes partnerships in more and more fields between the government and certain selected interests. The government has, therefore, to decide continually with which interests it will go into partnership and on what terms.

The real nature of gradual collectivism was made extraordinarily clear in the New Deal, as it existed before the Supreme Court of the United States invalidated it. Under the National Industrial Recovery Act, industries were encouraged to organize themselves as agents of the state. To each of these groups there was then delegated the power to legislate not only for all who were then engaged in that line of business but for all who might wish to engage in it. No clearer, no more naked, illustration could be offered of what is meant by the statement that gradual collectivism means the conferring of privileges upon selected interests. For the right to make laws and to enforce them by fines and imprisonment is the basic attribute of sovereignty, and the delegation of sovereignty to selected interests is exactly what the word ‘privilege’ means. In the case of the NRA, privilege was conferred upon certain trade organizations and theoretically at least upon industrial employees also. The industrial codes were in effect charters — like those once granted to the East India Company, like those now granted to municipal corporations — to exercise the sovereign power within a certain jurisdiction.

Under the Agricultural Adjustment Act, and under such ancillary laws as the Bankhead Cotton and the Kerr Tobacco Act, the conferring of privilege and the delegation of the state’s authority to particular groups were not quite so nakedly evident. Nevertheless, that was the essence of the matter. Out of all the farmers of America and among all the crops they produce, Congress selected eight staples, and authorized the Secretary of Agriculture to levy taxes and to apply the proceeds in a subsidy to the producers of those eight staples. The producers of these selected commodities were established as a vested interest, protected by laws and by a subsidy in their right to produce their crop as against anyone who might wish to trespass upon their right to produce and sell cotton. It is significant that the established growers of the basic commodities were not only given a privileged position as against all other farmers, but that among them the cotton and tobacco growers had a specially favored position. Whether that was due to the fact that cotton and tobacco were peculiarly hard hit, or to the fact that they occupy a strategic position in the political composition of the Democratic Party, is perhaps a matter of opinion. But it is undeniably clear that the privileges were conferred approximately in proportion to the influence of particular pressure groups.

The gradual collectivist has to believe that a mass of special privileges can be distributed among interested groups in such a way as to raise the general standard of life. He has to believe that an elected parliament will distribute its privileges according to some general conception of the public welfare and not according to the pull and push of organized interests. Is this conceivable in a democracy? It is conceivable, of course, under a dictatorship if it be granted that the dictator knows in general and in particular what is for the public welfare. It does not seem likely that an electorate, listening to the babel of special pleadings, would be able to detect the universal interest in the particular, except occasionally and by good luck. There is, as Professor Carver has said, ‘at least a theoretical possibility for improvement through restrictive regulation. A system of privileges is imaginable which would be so nicely designed and so delicately adjusted that it would raise the standard of life by increasing the production of wealth and improving its distribution.’ But no economist has ever designed such a system and the chances are small that a democracy could see through the special pleadings, would be able to resist the pressures, and could know even with approximate accuracy which interests to favor and in what degree. If the experiment could be repeated often enough, under the law of chances a democracy might hit upon the right system of privileges. But so, as an eminent philosopher once remarked, could a band of monkeys who had learned to hit the keys of a typewriter turn out a play of Shakespeare’s — if they kept at it through all eternity.

For while a system of privileges might theoretically augment wealth, the chances are overwhelming that most of the privileges granted will be reducible to a common denominator. With few exceptions they will be a guarantee, backed by the authority of the state, that the beneficiaries will receive a larger private income for less effort. This means that those who are not beneficiaries will have a smaller income in return for more effort. On the whole and in the ordinary run of human affairs, tariffs, subsidies, regulated prices and wages, are promoted by men seeking to obtain a larger income, not by producing more wealth but by obtaining a larger share of the wealth produced.

Thus, when a tariff duty prevents the domestic consumer from purchasing the most inexpensive steel that can be produced in the world, the state has said that the nation either must use less steel or, if it insists on the same amount of steel, must be content with less goods of other kinds. The capital and labor and managerial skill devoted to making the more expensive steel are no longer available to make other goods. The same principle applies to the regulation of particular prices and particular wages. If they are set high, and are effective, they exact a subsidy from others; if they are set low, the victims are sweated to subsidize others. Those who receive the subsidy obtain more income for less effort; those who pay the subsidy have less income for more effort. But since a system of gradual collectivism will always tend to favor the interests that are organized, are identified, and are insistent, since they will not be insistent because they wish to work harder but only because they wish to receive more by not working harder, the grand effect of the system is to diminish the production of wealth.

Rising Expectations

Even if it could not be demonstrated that mankind is poorer because it has embraced collectivism, it is undeniable that the people have been taught by the collectivists to believe that the government can and should make them richer. The farmers and wage earners who come asking for tariffs, bounties, monopoly in their markets, fixed prices for their goods and services, are merely following the example of the manufacturers who told them that protection produces prosperity and that concentrated corporate control produces stability and security. In a society which has adopted the collectivist view, there is a standing invitation to everyone to devise some method by which the authority of the government can be used to improve his income. For that reason the great teacher of collectivism has not been Karl Marx; it has been the example set by the men who, in the course of more than sixty years, have successfully invoked for their own profit the assistance of the state. It is not the socialist propaganda which has converted the nations; it is the practice of gradual collectivism which has caused the people to think that if some can be enriched by the action of the state, then all might be enriched by it.

The older doctrine was that wealth is increased by labor, enterprise, and thrift, and that the way to a just distribution of income is through the repeal of privileges. It has been overwhelmed by the practical demonstration that some men prosper greatly when the government assists them. So the people have had it fixed in their minds that the state possesses a magical power to provide an abundant life. They have come gradually to think that their expectations may be as great as their government is powerful; that the stronger the government, the more certainly it can satisfy their heart’s desires. After a while, when the doctrine is completely dominant in the popular mind, a point is reached where men cease to feel that there is any vital connection between production and consumption, between work and wealth. They believe instead that the vital connection is between wealth and the power of the state. It is no longer labor but the law, the force of the state, the might of the government, that is looked upon as the source of material well-being.

The belief in this miracle is due to an optical illusion. The power of the state, as such, produces nothing: it can only redistribute that which has been produced. Even if the state runs a farm as in Russia or a hydroelectric plant as at Muscle Shoals, the wealth created comes not from the government’s power to command and coerce, forbid and defend, but from labor, invention, and the resources of nature. The reason why the state appears by exercising power to create wealth is that it can enrich some members of the community.

It is an old illusion. On the River Rhine, the most important trade route of Central Europe, there were, in the twelfth century, nineteen stations at which tolls had to be paid. They were collected by armed forces from the castles whose ruins still delight the tourist. Twenty-five more tolls were added in the thirteenth century, and by the end of the fourteenth century their number had grown to approximately sixty-two or sixty-four.

Many of these stations belonged to the Duchy of Cleves and they were known as the ‘treasure.’ Now these tolls added nothing, of course, to the wealth of Europe, but they greatly enriched those who took the tolls. In this example, which is typical of all privileges, political force did not produce the ‘ treasure.’ It exacted treasure from those who had produced it. The optical illusion arises because men mistake for the production of wealth the enrichment of those who take the tolls.

The popular belief in the efficacy of the state has its empirical support in the fact that under various forms of protection and privilege, such as tariffs, bounties, franchises, patent monopolies, concentrated corporate control, many have undoubtedly been enriched. If they, why not others? Thus the unprivileged come forward demanding privileges too — privileges to compensate them, to give them parity with, to give them equality of bargaining power with, to give them protection from, those who enjoy the favors that the state bestows. For the inner principle of gradual collectivism — and its radical fallacy — is that it does not dismantle the castles on the Rhine and abolish the privileged toll stations; it attempts — vainly—to turn every cottage into a castle with a toll station of its own.

The Struggle for Power

Thus it has come about that under gradual collectivism the struggle for power has become ever more intense. As men learn that their fortunes depend increasingly upon their political position, the control of the authority of the state becomes a prize of infinite value. But because the multiplication of the privileges restricts the production of wealth and perverts its distribution, the standard of living does not rise in proportion to the expectations which have been aroused by the example of those who are enriched by privileges. Thus, as gradual collectivism advances, the competitive struggle for privileges is exacerbated, and it culminates in the condition now prevailing where the internal conflict is transformed into an international conflict for the redistribution of national power and privilege throughout the world.

In the following issue Mr. Lippmann will discuss the problem of War in a Collectivist World. — THE EDITORS