Fabian Tract No. 7· 


CAPITAL AND LAND. 


PuBLISHED AND Sor.D BY 

THE FABIAN SOCIETY. 

"For the right moment you must wait, as FABIUS did most patiently when 
warring against HANNIBAL, though many censured his delays ; but when the 
time comes you must strike hard, as FABIUS did, or your waiting will be in vain, 
and fruitless. " 

SIXTH EDITION, REVISED. 

PRICE ONE PENNY. 

LONDON: 
THE FABIAN SociETY, 3 CLEMENT's INN, STRAND, W.C. 
]ANUARY 1904. 



CAPITAL AND LAND. 

THE practical aim of Socialists with regard to the materials of wealth 
is"' "the emancipation of land and industrial capital from individual 
and class ownership, and the vesting of them in the community for 
the general benefit." Land and capital are instruments with which 
man works for the production of wealth, material for the maintenance 
of his existence and comfort. Now it is important to notice that, 
though in common talk we separate the two, and though political 
economists have given a scientific dignity to this rough classification 
of the instruments of production, distinguishing as "land" that 
which has been provided by ''Nature," and as "capital" that which 
has been made by human industry, the distinction is not one which 
can be clearly traced in dealing with the actual things which are the 
instruments of production, because most of these are compounded 
of the gifts of Nature and the results of human activity. 

"Land." 

The only instruments given to us by Nature are climate, physical 
forces, and virgin soil. The use of these passes with legal" property"
in the land to which they belong, and they are consequently classed 
with "land." Those virgin soils are called good or fertile which 
contain in abundance elements which the chemistry of animal or 
vegetable life can convert into the materials of human food, clothing, 
etc. Other mineral elements of particular patches of soil are convertible, 
by the arts of the mining, metallurgic, building, and 
engineering industries, into a thousand forms of wealth. 

How "Land" gets Value. 
But even these qualities of virgin soil are of no use or value 
unless they are found in accessible positions ; and their advantage 
to the proprietor of the land increases rapidly as human societydevelops in their neighborhood ; whilst in all advanced societies 
we find large areas of town lands whose usefulness and value have 
nothing to do with their soils, but are due entirely to the social 
existence and activity of man. Land in Cornhill, worth a million 
pounds an acre, owes its value to the world-wide industry and commerce 
whose threads are brought together there, not to its natural 
fertility or to the attractions of its climate. "Prairie value" is a 
fiction. Unpopulated land has only a value through the expectationthat it will be peopled. 

*See the "'Basis" of the Fabian Society, page rg. 

4 


The ''natural" capabilities of land are thus increased, and, 
indeed, even called into existence, by the mere development of 
society. But, further, every foot of agricultural and mining land in 
England has been improved as an instrument of production by the 
exercise of human labor. 

First, of human labor not on that land itself; by the improvement 
of the general climate, through clearing of forest and draining 
of marsh ; by the making of canals, roads, railways, rendering every 
part of the country accessible ; by the growth of villages and towns, 
by the improvement of agricultural science ; and still more by the 
development of manufactures and foreign commerce. Of all this 
human labor, no man can say which part has made the value of his 
land, and none can prove his title to monopolize the value it has made. 

Secondly, all our land has been improved by labor bestowed 
especially upon it. Indeed, the land itself, as an instrument of production, 
may be quite as truly said to be the work of man as the 
gift of Nature. Every farm or garden, every mine or quarry, is 
saturated with the effects of human labor. Capital is everywhere 
infused into and intermixed with land. Who distinguishes from the 
mine the plant by which it exists? Who distinguishes from the 
farm the lanes, the hedges, the gates, the drains, the buildings, the 
farm-house? Certainly not the English man of business, be he 
landlord, farmer, auctioneer, or income tax commissioner. Only the 
bold bad economist attempts it, and, we must add, some few amongst 
our allies, the Land Nationalizers. It may be worth while to digress 
for a while in the company of these latter. 

A Word to "Land Nationalizers." 

The arguments revived in our generation by John Stuart Mill 
and Henry George, and the activity of the various societies that 
have taken in hand the work of diffusing them, have now converted 
an immense body of public opinion to the Socialist view of the 
justice of, and urgent necessity for, Nationalization of the Land; or, 
at least, the absorption, by the State or Municipality, of ground 
rents, mining royalties, and similar unearned profits from the soil. 
Land Nationalizers go, generally, so far with Socialists that (in the 
words of the Fabian "Basis") they "work for the extinction of 
private property in land, and of the consequent individual appropriation, 
in the form of rent, of the price paid for permission to use 
the earth, as well as for the advantages of superior soils and sites." 

But some, who are thus far Land Nationalizers, still shrink from 
any interference with the legal powers enjoyed by the holders of 
capital. Hence a most unfortunate separation exists between them 
and the Socialists, whose design of nationalizing the industrial capital 
with the land appears to them unjustifiable and unessential. 

Capitalist and Landlord in One Boat. 

They use the argument that capital, unlike land, is created bylabor, and is therefore a proper subject of private ownership, while 
land is not. Socialists do not overlook the facts on which this 


5 


argument rests, but they deny, on the grounds already partly stated, 
that any distinction can be founded on them sufficiently clear and 
important to justify the conclusion drawn. But, supposing we 
assume it true that land is not the product of labor, and that capitalis; it is not by any means true that the rent of land is not the 
product of labor, and that the interest on capital is. Nor is it true, 
as Land Nationalizers frequently seem to assume, that capital necessarily 
becomes the property of those whose labor produces it ; 
whereas land is undeniably in many cases owned by persons who 
have got it in exchange for capital, which may, according to our 
premisses, have been produced by their own labor. Now since 
private ownership, whether of land or capital, simply means the 
right to draw and dispose of a revenue from the property, whyshould the landowner be forbidden to do that which is allowed to 
the capitalist, in a society in which land and capital are commerciallyequivalent? Virgin soil, without labor upon or about it, can yield 
no revenue, and all capital has been produced by labor working on 
land. The landlord receives the revenue which labor produces on his 
land in the form of food, clothing, books, pictures, yachts, racehorses, 
and command of industri'al capital, in whatever proportions he thinks 
best. The ownership of land enables the landlord to take capital for 
nothing from the laborers as fast as their labor creates it, exactly as 
it enables him to squander idly other portions of its product in the 
manner that so scandalizes the land nationalizers. \\'hen his tenants 
improve their holdings by their own labor, the landlord, on the expiration 
of the lease, remorselessly appropriates the capital so created, 
by raising the rent. In the case of poor tenants holding farms from 
year to year in Ireland, the incessant stealing of capital by this 
method so outraged the moral sense of the community, that the 
legislature interfered to prevent it long before land nationalization was 
commonly talked of in this country.* Yet land nationalizers seem to 
be prepared to treat as sacred the landlords' claim to private property 
in capital a<.:quired by thefts of this kind, although they will not hear 
of their claim to property in land. Capital serves as an instrument 
for robbing in a precisely identical manner. In England industrial 
capital is mainly created by wage workers-who get nothing for it 

but permission to create in addition enough subsistence to keep each 
other alive in a poor way. Its immediate appropriation by idle proprietors 
and shareholders, whose economic relation to the workers is 
exactly the same in principle as that of the landlords, goes on everyday under our eyes. The landlord compels the worker to convert 
his land into a railway, his fen into a drained level, his barren seaside 
waste into a fashionable watering place, his mountain into a 
tunnel, his manor park into a suburb full of houses let on repairingleases ; and lo ! he has escaped the land nationalizers : his land is 
now become capital, and is sacred. 

The position is so glaringly absurd, and the proposed attempt to 
discriminate between the capital value and the land value of estates 

*See, for instance, the Irish Land Acts of 1870 and r88r. 


6 

is so futile, that it seems almost certain that the land nationalizers 
will go as far as the Socialists, as soon as they understand that 
the Socialists admit that labor has contributed to capital, and that 
labor gives some claim to ownership. The Socialists, however, must 
contend that only an insignificant part of our capital is now in the 
hands of those by whom the labor has been performed, or even of 
their descendants. How it was taken from them, none should know 
better than the land nationalizers. 

It is scarcely necessary to enlarge on or illustrate the obvious 
truth that, whatever the origin of land and capital, the source of the 
revenues drawn from them is contemporary labor. The remainder 
of this Tract may still further impress the impossibility of maintaining 
any hard and fast lines between them, either as regards their characteristics 
and importance in developed societies, or the defensibility of 
their private ownership or the arguments for their nationalization. 

" Capital.'' 
To return from our digression: When we consider what is usually 
called capital, we are as much at a loss to disentangle it from land as 
we are to find land which does not partake of the attributes of capital.
For though capital is commonly defined as wealth produced byhuman labor, and destined, not for the immediate satisfaction of 
human wants, but for transformation into, or production of, the 
means of such satisfaction in the future; yet railways, docks, canals, 
mines, etc., which are classed among the instruments of productionas capital, are really only somewhat elaborate modifications of land. 
The buildings and the plant with which they are worked are further 
removed from the form of land, but we lump the lot as capital. All 
farming improvements, all industrial buildings, all shops, all 
machinery, raw material, live and dead stock of every kind, are 
called capital. And just as there is a purely social element in the 
value of land, so are there purely social elements in the value of 
capital ; and its value, in all its forms, depends upon its accessibility 
and fitness here and now, and not on the labor it has cost. The 
New River Company's Water Shares have their present enormous 
value, not because Sir Hugh Middleton's venture was costly, but 
because London has become great. The usefulness of fixed and unchangeable 
forms of capital increases and decreases through external 
causes, just as does that of land. If instruments of production must 
be classified, the best division of them is into immovables and movables/ 
the annual value of buildings, railways, mines, quarries, 
waterworks, gasworks, durable fixed machinery, and many other 
forms of so-called capital, manifestly agreeing with that of land in 
fluctuating according to causes of which the effects are generalizedin the "Law of Rent" of abstract economics. 
Besides industrial capital, there is a considerable amount of what 
has been conveniently called "consumers' capital." Dwelling-houses, 
and all their domestic machinery and conveniences are as necessary 
for production as land and factories ; for though the worker uses 
them in his character of consumer, they are necessary to maintain 


7 


him in efficiency for his work. All private stores of food and 
clothing, all forms of personal property, may likewise be classed as 
consumers' capital. It will, however, be evident that, in classingthese as capital, the signification of that name is becoming very 
vague and indefinite. 

Finally, we have such purely non-material and social kinds of 
capital as banking and credit organizations, inventions, and other 
devices for extending and intensifying our power over Nature; social 
forces of immense importance for the carrying on of wealth production, 
largely capable of social ownership, not entirely capable of 
private monopoly, but at present appropriated by some individuals 
more than by others. 

What is the Estimated Value of our National Stock of 
the above-named form of Wealth. 

In December, 1889, Sir Robert Giffen attempted to compute the 
capital value of realized property in the United Kingdom as it was 
in the year 1885.* The following table is reproduced from that 
furnished by him, the figures being corrected according to the official 
Returns of Income Tax Assessments for 1901-2.t The estimate of 
the value of the capital is arrived at by taking what Sir R. Giffen 
considered a suitable number of years' purchase of the mcome :


Under: 
Gro<;s Income. No. of 
Years' Purchase. 
CapitalValue. 
Schedule A£ 
£ 
Profits from the ownership of-
Land ... 
Houses 
Other propertySchedule B52,463,477184,572,687 
1,195,773 
26 
IS 
30 
1,364,0$0,302 
2,768,590,3oS 
35,873,190 
Profits from the occupation of 
lands (farmers' profits mainly)
Schedule C52,807,002 
8 422,456,or6§ 
Profits from British, Indian, 
Colonial and Foreign Government 
Securities ... . .. 
ScheduleD44,288,647 
25 r,ro7,216,r75 
Quarries, mines and ironworks. 
Gasworks 
Waterworks 
Canals, etc. ... . .. 
Fishings in the U.K. and Sporting 
Rights in Ireland ... 
Markets, tolls, etc. . . . . .. 
Salt springs or works and alum 
works... 
25,875,255 
5,899,013 
4,706,725 
3.235.943 
223,781 
757,058 
85,199 
4 
25 
20 
20 
20 
20 
20 
I03,50l,020§ 
147.475,325§
94,134,500§
64, 718,86o§ 
4,475,620§
15,r4r,r6o§ 
1,703,98o§ 
(For notes a11d explat~atio1ZS as to this table, see 11ext page.) 

* See The Growth o.f Capital, by Robert Giffen (London, Bell and Sons, 1889). 
Also Essays in Fina11ce, 2 vols., by the same author. 
t Forty-sixth Report of the Commissioners of Inland Revenue lCd.-1717],
price Is. rod. The amount stated as annual farmers' profits appears to be excessive, 
as Sir R. Giffen overlooked the fact that the Income Tax Acts assume the net profits of 
agriculture (in England) to be equal to one-half the rent, not the whole as here given. 
The number of years' purchase of rural land may also be regarded as too high. On 


8 

Gross Income. No. of CapitalYears' Purchase. Value. 

ScheduleD-
Cemeteries .•. 
Railways in United Kingdom 
" out of , " 
Loans secured on public rates 
Indian, Colonial and ForeignSecurities (other than Govern· 
ment)
Other interest and profits... 
Other businesses, professions, etc., 
taking one-fifth of the gross incomes 
as interest on capital 
Businesses, professions, etc., omitted 
from assessment, say 20 per 
cent. on amount assessed 
£ 
205,598 
38,7Io,8o8 
I4,6I0,574 
6,595,2 59 
9,367,766 
I5,907,637 
72,307,698 
20 
28 
20 
25 
20 
20 
IS 
£ 
4,I rr,g6o § 
I ,o8 3,902,624 §
292,2! I,480 
I6+,88I,475 
I87,355,320 
3I8,IS2,740 
I,084,615,470 § 
(£36I ,538,494), taking one-fifth 
of this income also as interest 
on capital 
Income from capital of non-taxpayers, 
say 
Foreign investments not included 
in Schedules C and D, sayMovables, not yielding income, say 
Government and local public pro· 
perty, say 
l4.,46I,529 
7o,ooo,ooo 
50,000,000 
IS 
s 
IO 
2I6,g22,935 § 
35o,ooo,oool\ § 
soo,ooo,ooo 
I ,ooo,ooo,oooll 
6oo,ooo,oool\ 
-----5,802, 
I 54,004 
6,129,336,453 
--
-
II,
93I ,490,457 "'f 

"Land" and "Capital" Indistinguishable. 

It may be noticed that there is no attempt in this table to distinguish 
between what Land Nationalizers might think should be 
classed as land, and what they would admit to be capital. The 
common sense of the ordinary business man and statistician recognizes 
that such distinction is impracticable and arbitrary. To the business 

the other hand, that of urban properties is much understated. But these considerations 
do not materially affect the aggregate total, and Sir R. Giffen's basis has therefore 
been throughout maintained. 

1\ These amounts being conjectural only, are reproduced from Sir R. Giffen's esti· 
mate in r885, with small additions, amounting in all to £155,ooo,ooo, on the capital 
value. 

§Of these totals which make up the "industrial capital" of the country, amounting 
to £3,593, I59,470, at least £2,921,504,990 is under joint stock management, 
£1,725,940,512 being the paid-up capital of the 31,429 registered companies carrying 
on business in April, 1901, and £1,195,564,478 being the paid-up capital of the railways 
in the United Kingdom at the end of rgor. See the Annual Statistical Abstract, 
forty-ninth number, C-1239 (1902); price rs. 2d. To this must be added the capitaladministered by chartered banks and trading companies, not registered under the 
Companies Acts. 

~Owing to a re-arrangement of the Income Tax Returns, the total works out at 
less than on the method previously in use. It is now probably a considerable under3tatement. 
If we compare this total for 1902 with those of previous years, we find the 
total estimated by Sir R. Giffen in 1865 was £6,114,063,000; in 1875 £8,548,r2o,ooo; 
and in r885 £ro,079,579,000. In a paper read to the British Association in September, 
1903, and published in the Journal of the Royal Statistical Society, Vol. LXVI., 


9 

man they are both equally forms of property, merely different kinds 
of investments--that is, arrangements for obtaining a revenue from 
the labor of others. The practical statesman sees in them simply 
sources of income, and assesses them equally to income tax. Indeed, 
that famous tax of 20 per cent. on rent, of which the English Land 
Restoration League and many Radicals are demanding the revival, 
was not imposed as a land tax at all, but formed part of the incidence 
of a general tax of four shillings in the pound on the annual value of 
ALL REALIZED PROPERTY AND SALEABLE Il\TEHESTS, excepting onlyfarm stock and household furniture.* Will not the Land Nationalizers 
take this hint, and include all unearned incomes in their "SingleTax" Program ? 

Who own all this Land and Capital ? 
Who, then, are the Landlords and the Capitalists amongst us? 
They are those persons who own the instruments of wealth-productionand enjoy the profits of them. In England, as in all developed industrial 
societies, almost the whole of the land and industrial capital, and 
most of the consumers' capital (chiefly consisting of dwelling·· houses)
is at present owned and controlled by one set of people, while it is 
another set of people who produce wealth by using them. 

" Capitalists." 
A glance at Sir R. Giffen's table will show how little of the material 
wealth of England is available for immediate enjoyment or consumption, 
and how large a proportion is in the form of machinery to aid 
labor in the supply of our wants from day to day. The value of 
movable personal property, not employed as instruments of production, 
must be less than one-tenth of the total. Dwelling-houses, 
and the land attached to them, may amount to about two-tenths 
more. But occupying ownership of these properties is the exception,
and most of them are used by their owners as an investment 
yielding rent, paid out of the earnings of working occupiers. The 
whole of the remainder consists of land and capital employed for 
wealth-production in agriculture, mining. transport, and other in 
dustries, trades, and professions. 

Part Ill., Sir R. Giffen estimalecj the total capital of the United Kingdom to be 
£rs,ooo,ooo,ooo. (The number of years' purchase taken above i low, and a small increase 
would easily account for this larger figure.) The increase in realized wealth in 
thirty-seven years may, therefore, safely be estimated at six thousand millions sterling. or 
an average of more than I 50 millions a year. The average annual increase has been at 
the rate of 2~ per cent., or nearly two and a halftimes the rate of increase of the population. 

* It was an" Aid" (or tax upon realized property) imposed primarily upon all 
persons "having any Estate in ready Monies, or in any Debts whatsoever owing to 
them, within this Realm or without, or having any Estate in Goods, W'ares, 
:\Ierchandizes, or other Chattels or personal Estate whatsoever" . . except" the 
Stock upon Lands and such Goods as are and for Household Stuff" . . at the 
rate of "four Shillings in the Pound according to the true Yearly Value thereof," 
computed at 6 per cent. of their capital value (see the Act of Parliament of 1692, 4 
\Villiam and Mary, cap. I., sec. 2), including also the emoluments of public officers, at 
that time regarded as saleable property (sec. 3), and finally'' to the end a further Aid 
and Supply for their Majesties' Occasions may be raised," a similar tax is imposed on 
Lands "according to the true Yearly Value thereof at a Rack Rent" (sec.+). 

10 

Four-fifths of our national wealth, we may safely say, consists 
of such instruments. The wants of the community are supplied 
from year to year, and week to week, by the reciprocal services 
of the active workers who use and administer them. The worker, 
of whate\·er kind, is paid by a wage, a salary, a professional income, 
or profits due to his skill in organizing or directing industry, the 
amount of which is determined by competition between himself and 
other workers. The owners of the instruments of production receive 
as rent and interest such an amount of the value of the produce as 
equalizes the normal income of the workers in each calling; that is 
to say, they obtain from the workers who are using their land and 
capital a toll equal to the difference between the product of industry 
engaged in with any particular instrument of land or capital, and the 
product of the like industry engaged in with the least efficient 
instrument actually employed anywhere at the time. 

Some of the workers are, it is true, themselves capitalists, that is 
to say, own larger or smaller amounts of land and capital ; and many 
capitalists work. How many, and how much? Here are some facts 
gathered from the Report of the Commis ioners of Inland Revenue 
for 1902-3, and other reliable sources. 

"Landlords." 

The landlords (z .. e., persons owning more than ten acres) number 
only 176,520. Out of a population of 37,ooo,ooo (1891), less than 
one two·hundredth part of the population owns ten-elevenths of the 
total area.* 

Probate or administration was granted in 62,310 estates, of the 
net capital value of £2701473,307, in the year 1902-3; 32,295 of 
these were estate not exceeding £soo in capital value, their aggregate 
capital value being £9,719,638; 3,829 were estates of £IO,ooo 
and upwards, who e aggregate capital value was £190,7I5,o9+t 
Two-thirds of the wealth of the kingdom is held by persons who 
leave at death at least £ro,ooo.ll 

"Workers." 

How much land and capital do the manual labor class own? 
Supposing that they were the owners of the whole of-
the depo its (1901) in the P.O. Savings Bank§ £qo,392,916 
, , Trustee , § 5 r ,966,386 
the Consol purchased for small holders by the Post Office§ 12,786,190 
the Con sols held for depositors in Trustee avings Banks§ I ,66{,b87 
the nominal capital (1900) of the Building ocieties§ 46,775,Lt3 

• ~lulhall's " Dictionary of tatistics" (1892), p. 3.p. 
t Inland Revenue Reports, C 1717, 1903. 

II See :\1ulhall's "Dictionary of Statistics" (1892). p. 501. .\lso "Facts for 
Socialists," published by the Fabian Society; price rd. 

§See" tatistical Abstract," 1902 (Cd -1239). 


I I 

The nominal capital of the-

IOO principal Trade Unions (1900)* £ 3,766,625 

Co-operative Societies (1900)* 28,965,747t 

Friendly and Provident Societies (1899)* 39,487,619 

Industrial Life Assurance Societies (I9oo)t 22,998,793 
they would own land and capital valued at . .. 348,8o4,I06II 
that is to say, a little less than one thirty-fifth part of the land and 
capital with which they work. The number of persons "employed 
at wages" in the industries of the kingdom was estimated at about 
fourteen millions, including over four million women in 1H91, and 
must be at least fifteen and a half millions now. The share of the 
abled-bodied manual workers, in property, then, must average less 
than £23 per head of those in employment, producing not more 
than ten shillings a year interest. 

What sort of a System is this ? 

Labor politicians, Land N ationalizers, Conservatives, Radicals, 
all who interest themselves in social science as the study of the wellbeing 
of man, will agree with us that 

The Use of Land and Capital 

should be to serve as instruments for the active, the energetic, the 
industrious, the intelligent of mankind to produce wealth for themselves 
and those who are necessarily dependent on them, and to 
maintain the conditions of healthy existence for the society which 
they compose. And will they not also agree with us that it is 

The Abuse of Land and Capital 

that they should be made by the laws of any people a " property" 
often owned by entirely idle and unprofitable persons, who may exact 
hire for them from those who are working for the maintenance of social 
existence, or may even refuse the would-be workers access to these 
indispensable instruments of industry? For what are the effects? 

If the access be refused-land kept out of cultivation ; tillage 
turned into sheepwalks, and sheepwalks into shootings; natural 
sources of wealth locked up from use; the pleasant places of the 
earth, the mountains, the moors, the woodlands, the sea shores, 

• "Eighth Annual Report of the Labor Department of the Board of Trade," 
Cd-1124, 1902. 
t •· Annual Statistical Abstract," C-1239, 1902. 

t This figure is considerably less than that given in the "Annual Statistical 
Abstract," which, however, includes some societies such as the Civil Service Stores, 
which are not strictly Workmen's Co-operative Societies, though registered as 
l ndustrial and Provident Societies under the Friendly Societies Acts. 

II This total is undoubtedly a great deal too large, and much of it is duplicate. 
Thus, for instance, many of the Building Societies, Trade Unions, Co-operative 

ocieties, Friendly Societies, and Industrial Assurance Societies, bank their surplusfunds in the Post Office and the Trustee Savings Banks, and those amounts therefore 
are in this total counted twice over. Much of it, moreover, is owned by children and 
others belonging to the middle class. 


12 

parked and preserved and placarded, that the few may have space 
for their pride, while the many must crowd into squalid cities and 
dismal agricultural towns, and take their holidays in herds on the 
few beaten tracks left free for them. In commerce-rings, corners, 
syndicates, pools, and monopolies, and all the fearful social loss and 
waste of under-production ; lock-outs, short time, and other expedients 
of the reckless selfishness of capitalists who are nursing the 
market for private ends. 

If access be granted-if the land and capital be devoted to their 
proper use, then it is on condition that rent and interest be paid to 
the proprietor, simply in virtue of his existence as such. He may 
or may not be doing some work of social utility, but the rent and 
interest are paid to him as an ab olutely idle person, and it is this, 

The Tribute of Industry to Idleness, 

that Land Nationalizers denounce in its form of rent, and that 
Socialists, and all who have the Socialist spirit, denounce in all its 
forms. 

With the Land Nationalizers we are at one entirely on this point: 
That so much of the annual value of land as they class as rent 
(which is caused by the physical qualities, advantages, or position of 
land), is a ~oil taken by an idle clas from the industry of the rest of 
the nation, and should be resumed by the nation in the quickest and 
mo t effectual manner possible.

\iVith the non-Socialists we agree entirely on this point: That so 
much of the income of any landlord as is caused, not by rent as 
defined by the political economists, but by the exercise of his own 
abilitie" as a superintendent and director of agriculture or industry,
is of the nature of a salary, the competitive price of useful work 
done for society. And we further agree with the non-Socialists that 
so much of the income of any capitalist as is caused, not by interest 
as defined by the economi ts, but by the exercise of a similar ability 
in the administration of capital and the organization of industry, is-
equally of the nature of a salary obtained by useful work. 

V>/e must, however, point out that the monopoly of land and 
capital has led, and still leads, to a virtual class monopoly of the 
opportunities ot doing this kind of work, and of the education and 
training required for it; and that not till these pri\·ate monopolies 
are abolished will the remuneration of such activity reach its normal 
level of competition value. The same monopoly ha:s giYell to the 
sons of the privileged classes an advantage which still keeps the 
wages of certain professions (the Bar, for instance), to which access is 
guarded by the useless convention of a long and extravagant sham-
education, above the level at which they would stand were their 
opportunities equally open to all. 

The Amount of Tribute and its Effects. 

Of the tolls enumerated in Sir R. Giffen's table we cannot say what 
part should be classed as rent and what part as interest; we can only 
tate that the total income deriYed from real property-lands and 


13 

buildings-must amount to about £29o,ooo,ooo a year; and that, 
according to the table, at least £36o,ooo,ooo may be classed as pureinterest on other instruments of production (apart from all reward 
for personal services). • 

The profits and salaries of the class who share in the advantagesof the monopoly of the instruments of production, or are endowed 
by nature with any exceptional ability of high marketable value, 
amount, according to the best estimate that can be formed, to about£ 46o,ooo,ooo annually. While, out of a national income of some 
£I,8oo,ooo,ooo a year, the workers in the manual labor class, four-
fifths of the whole population, obtain in wages not more than 
£69o,ooo,ooo.• 

Rent and interest alone, the obvious tribute of the workers as 
such to the drones as such, amount demonstrably to almost as much 
as this sum annually, and it may be safely said that the workers, 
from top to bottom of society, pay a fine of 

One-half the Wealth they Produce 

to a parasitic class, before providing for the maintenance of themselves 
and their proper dependents.

Is a healthy existence secured for society by this arrangement?

The income of the manual labor class may be put at less than 
£so per family,t and out of this they must pay heavy rents for the 
houses they live in. How much is left for healthy life? Even that 
little is not always vouchsafed to them. There are in London now 
at least 35,000 adult men who with their families (say roo,ooo) are 
slowly starving for want of regu!a1' employment. Over thirty per 
cent. of the whole four million inhabitants of the richest city in the 
world were found by Mr. Charles Booth to fall below his " PovertyLine" of bare subsistence earnings.t 

"At present the average age at death among the nobility, gentry and professionalclasses in England and Wales is 55 years; but among the artizan classes of Lambeth 
it only amounts to 29 years; and whilst the infantile death-rate among the well-to-do 
classes is such that only eight children die in the first year of life out of 100 born, as 
many as 30 per cent. succumb at that age among the children of the poor in some 
districts of our large cities. The only real cause of this enormous difference in the 
position of the rich and poor with respect to their chances of existence lies in the fact 
that at the bottom of society wages are so low that food and other requisites of health 
are obtained with too great difficulty." (Dr. C. R. Drysdale, "Report of Industrial 
Remuneration Conference," p. I 30). 

One in five of Londoners dies in the workhouse, hospital, or 
lunatic asylum ; one in fourteen of the manual labor class is a 
pauper, or has been one. 

Hear Professor Huxley (Nz'neteenth Centu1y for February, 1888) : 

"Anyone who is acquainted with the state of the population of all great industrial 
centres, whether in this or other countries, is aware that amidst a large and 
increasing body of that population there reigns supreme . . . . that condition 

* See Fabian T ract No. 5, "Facts for Socialists." 
t Annual Report of the Labor Department, 1893-4, C-7565. 
t Life and Labor o/ the People. By Charles Booth. (Macmillan; 1894). 

whi&h the French call Ia misere, a word for which I do not think there is any exact 
English equivalent. It is a condition in which the food, warmth, and clothing, which 
are necessary for the mere maintenance of the functions of the body in their normal 
state, cannot be obtained; in which men, women, and children are forced to crowd 
into dens wherein decency is abolished, a1~d the most ordinary conditions of healthful 
existence are impossible of attainment; in which the pleasures within reach are 
reduced to brutality and drunkenness; in which the pains accumulate at compound 
i~terest in the shape of starvation, disease, stunted development, and moral degradatiOn 
; in which the prospect of even steady and honest industry is a life of unsuccessful 
battling with hunger, rounded by a pauper's grave. . . . When the organization 
of society, instead of mitigating this tendency, tends to continue and intensify it, 
when a given social order plainly makes for evil and not for good, men naturally 
enough begin to think it high time to try a fresh experiment. I take it to be a mere 
p_lain truth that throughout industrial Europe there is not a single large manufacturingc1ty which is free from a vast mass of people whose condition is exactly that described, 
":nd from a still greater mass, who, living just on the edge of the social swamp, are 
hable to be precipitated into it." 

Land Reform a Partial Remedy Only. 

How far would land restoration alone remedy this? If it were 
possible to nationalize soil apart from capital, the ground rents 
recovered for the nation might possibly amount to the present sum 
of our imperial and local taxation, £ 24o,ooo,ooo, or thereabouts.* 
The pecuniary relief certainly could not amount to more. Land 
nationalization might further immensely benefit society, where it 
now suffers from the curmudgeonism of private owners. But so 
long as capital continued to be used for the exploitation of the 
workers, so long would their economic slavery continue. Those 
who retain the capital, without which the earth and all its products 
cannot be worked, will step into the place of the landlord, and the 
tribute of 11 interest " will be augmented. Society will be relieved, 
but not freed. 

Objections to Socialism. 

But the "practical" objector may ask : Does not the capitalist 
now administer his capital and direct industry? Was not this 
admitted above? And is not capital, the product of labor, maintained 
and augmented by saving? How will Socialists provide for 
the administration and increase of capital? 

"Management." 

The question is being answered by the contemporary development 
of industrial organization. How much of the "managementof land " is done now by the landlords, and how much by the farmer 
and the agent or the bailiff? The landlord's supposed function in 
this respect is almost entirely performed by salaried professional 
men. As to capital, who manages it? The shareholders in the 
~oint stock companies, who own nearly five-sixths of the whole 
mdustrial capital? No! The shareholding capitalist is a sleeping 
partner. More and more every day is the capitalist pure and simple,
the mere owner of the lien for interest, becoming separated from the 

*"Statistical Abstract of the United Kingdom," Cd-1239, 1902. 


15 


administrator of capital, as he has long been separated from the 
wage worker employed therewith. The working partner, with 
sleeping partner drawing interest, is every day passing into the form 
of the director of a joint stock company. More and more is the 
management of industries falling into the hands of paid managers, 
and even the "directors" emphasize the fiction that they are not 
mere money-bags and decorative M.P.'s, by the humorous practiceof taking fees for their labors at board meetings.

The administrator of capital can be obtained at present for a 
salary equivalent to his competition value, whether the concern to 
be managed be a bank, a railway, a brewery, a mine, a farm, a factory, 
a theatre, or a hotel. The transfer to the community (national or 
local) of the ownership of the main masses of industrial capital need 
make no more difference in this respect than does the sale of shares 
on the Stock Exchange at the present moment. 

'' Saving." 
As for the savz"ng of capital, what does that mean? The artificial 
instruments of production which form the bulk of property exist 
certainly only because human labor has been devoted to the production 
of forms of wealth other than those which are for immediate 
consumption. Every man in receipt of an income has the option of 
taking out his claim on the labor of society in the form of immediate 
enjoyments, passing and perishing in the use, and leaving the world 
no richer-as luxuries of all kinds, leisure for amusement or travel, 
service of menials, royal wedding illuminations, beer and skittles, or 
else in the form of more permanent products or of instruments which 
can be used for further wealth-production. All that he spends on 
the latter class of product is said to be saved-and at least one 
hundred and seventy-five million pounds annually, according to 
Sir R. Giffen, are "saved" in this way by the creation of new houses, 
docks, railways, roads, machinery, and other aids to future labor. If 
a man's income represents the competition value of work done byhim, it is said that he has "produced" the amount of saving so 
made, and has some title to its ownership. 
But just as the productive qualities of land are only maintained 
by the continuous application of human industry, so the most permanent 
forms of capital are perpetually wasting and being repaired, 
whilst, of the less durable forms, such as machinery, raw material, 
and farming stock, the whole is incessantly transformed, consumed, 
replaced and renewed. The capital saved by the original investor 
has long since disappeared. 
There are, however, very few forms of consumable wealth which 
can be "saved" at all. Food, clothing, ordinary comforts and 
luxuries, amusements, and all that makes up our dailv life, admit of 
little storage. When 
we say that a man has saved so much wealth, we simply 
mean that he has abstained from taking out a claim which he had 
on society, and that its payment is by agreement deferred to the 
future. But the wealth which is to meet that claim does not at 


16 

present exist. It is to be produced by the workers, when, where, 
and in the form asked for. 

If we admit the fairness and advantage of guaranteeing to every 
man the equivalent of the result of his own industry, we should 
deny that there is adequate social advantage in a system which 
permits him to convert this claim into a lien for a perpetualannuity, an enduring tribute from the workers for the use of that 
which only their using can keep from perishing, while he retains 
undiminished all the time his claim to the repayment of the original 
"saving."

The "saving" of capital, the increase of the instruments of production 
and of permanent commodities by the abstention from 
consumption of all wealth produced, is undoubtedly an advantage to 
society. If any individual, for the sake of rendering such advantages 
to society, abstains in any year from himself consuming all that he 
has earned, by all means let him be repaid in his old age, or whenever 
he wants the equivalent of his past activity. Why should we not, 
as a transitional expedient, treat such economizers as we treat inventors, 
and if they will not work without such a precise guarantee, if 
they are still purely individualist in their motive for activity, give them 
such a reward as we give individualist inventors• in their patent rights, 
so long as such encouragement is necessary for the creation and 
interest of our capital. But let that which society has maintained 
and fructified invariably pass to society within a limited period. So 
much may be necessary for the present to promote saving out of 
earned incomes; for saving out of the unearned incomes of rent and 
interest society can even now take its own measures by taxation for 
the increase of public capital. As soon as industrial capital is owned 
by those who use it, provision out of income for all necessary maintenance 
and increase of the instruments of production will be an 
ordinary and obvious element in its administration, as it is now in a 
joint stock company, and our present precarious dependence on the 
caprice or acquisitiveness of individuals will be superseded. 

We appeal, therefore, to Land N ationalizers to consider their 
reason for hesitating to work with us for the 

Nationalization of Capital, 

on the ground that the evolution of industry has rendered land and 
capital indistinguishable and equally indispensable as instruments 
of production, and that, holding with J. S. Mill that the "deepest 
root of the evils and iniquities which fill the industrial world is ... 
the subjection of labor to capital, and the enormous share which 
the possessors of the instruments of industry are able to take from 
the produce,''+ we see clearly that if they would make any improvement 
in the condition of the agricultural laborer and his fellow 

• Non-individualist inventors are those who, like the late Thomas Stevenson 
(lighthouse engineering), Michael Faraday (industrial chemistry and electricity), Sir 
William Simpson (anoesthetics), and a host of others. return gratuitously to societythe fruits of their inventive genius, and take out no patents. 
t Quotation from Feugueray, in Principles of Political E conomy, p. 477, edn. of r865. 


17 

wage-slave in the towns, they will be forced to abandon the illogical 
distinctions that are sometimes drawn between the instruments with 
which they work. 

As ins-truments of production, the use and value of land and 
capital alike are due to human labor ; alike they are used for the 
hindrance or exploitation of industry by their proprietor; alike they 
are limited in quantity, and consequently subject to monopoly; alike 
they enable a private monopolist to exact tribute from the workers 
for the use of that which the workers have produced. 

The Political Situation. 

We appeal to political reformers of all parties to work with us 
in the spirit which is more and more merging politics in Socialism. 
However much they may hold aloof from the Land Nationalization 
movement, and resent the imputation of Socialistic tendencies, theyhave yet been, and still are, and will be, forced to modify our social 
system in the Soc~alist direction. What were the Tory FactoryActs, the Truck Acts, the Mines Regulation Acts, the Workmen's 
Compensation Acts, but limitations of the power of capital? What 
are the Adulteration Acts, the Merchant Shipping Acts, the Employers' 
Liability Acts? What was the Abolition of the Corn Laws? 
The Mm-k Lane ExfJ1'ess has told us-a confiscation of the" property"
of the landlords. What are the Irish Land Acts and the action of 
the Land Commissioners? What are the proposals of official 
Liberals for a "just taxation of land values and ground rents," and 
"taxation" (apparently not necessarily "just") H of mining royalties,"* 
and of politicians of both parties for a sliding scale of income tax, 
and for differentiation between earned and unearned incomes, but 
projects for the partial recovery for the nation of the toll which 
property takes from industry? What are the Allotments and Small 
Holdings Acts, but the beginning of provision for the municipalizationof land? 

In what respect, then, do the supporters of these measures differ 
from us on grounds of principle?

Why are these Reformers not Socialists? Why do they hesitate 
to join the only party of social reform which has definite principles 
of action, and a clear vision of the course of economic evolution? 
Have they not paved the way by their progressive restrictions of the 
despotism of the private employer? And are they not constantly 
extending the sphere of social industry in the post office, the telegraphs, 
telephones, tramways, docks, harbors, markets, schools, the 
supply of gas, water and electricity, and many other public undertakings 
? Are they not steadily increasing the local taxation of 
realized property, and recovering rent for public use, by the rates on 
rent for education, parks, free libraries, public baths, and other social 
conveniences ? 

All these are Socialistic measures, that is, they tend either to 
the recovery of some portion of the tribute which landlord and 

* National Liberal Federation Resolution, rSgr. 

18 

capitalist now levy, or to the assumption by the community of the 
control of land and industrial capital. These measures we would 
extend by increased taxation, and by the extension of such communal 
administration, in the hope of leavening the Individualist society in 
which we have to work. Such advances serve as palliatives of 
existing evils, as educational examples to the slow of understanding, 
as encouragements to the cautious and conservative. But whether 
the advance be slow or rapid, this we hold indisputable, that until the 
workers of this and every other country collectively own and control 
the instruments they must work with, till then are liberty and manhood 
impossible for the majority; and that until we cease to pay to 
non-effectives the half of our annual sustenance, it will be impossible 
for the many to obtain that existence and education in youth, that 
security and leisure in old age, and those opportunities for human 
and appreciative life, which the resources of our country and our 
civilization are amply sufficient to yield them. 

;• 


19 

BASIS OF THE FABIAN SOCIETY. 

THE 
FABIAN SociETY consists of Socialists. 

It therefore aims at the re-organization of Society by the emancipation 
of Land and Industrial Capital from individual and class 
ownership, and the vesting of them in the community for the 
general benefit. In this way only can the natural and acquired 
advantages of the country be equitably shared by the whole people. 

The Society accordingly works for the extinction of private 
property in Land and of the consequent individual appropriation, in 
the form of Rent, of the price paid for permission to use the earth, 
as well as for the advantages of superior soils and sites. 

The Society, further, works for the transfer to the community of 
the administration of such industrial Capital as can conveniently be 
managed socially. For, owing to the monopoly of the means of 
production in the past, industrial inventions and the transformation 
of surplus income into Capital have mainly enriched the proprietary 
class, the worker being now dependent on that class for leave to earn 
a living. 

If these measures be carried out, without compensation (though 
not without such relief to expropriated individuals as may seem fit 
to the community), Rent and Interest will be added to the reward of 
labor, the idle class now living on the labor of others will necessarily 
disappear, and practical equality of opportunity will be maintained 
by the spontaneous action of economic forces with much less interference 
with personal liberty than the present system entails. 

For the attainment of these ends the Fabian Society looks to the 
spread of Socialist opinions, and the social and political changes 
consequent thereon. It seeks to promote these by the general dissemination 
of knowledge as to the relation between the individual 
and Society in its economic, ethical and political aspects. 

The work of the Fabian Society takes, at present, the followingforms:


r. Meetings for the discussion of questions connected with Socialism. 
2 . 
The further investigation of economic problems, and the collection of facts 
contributing to their elucidation. 
3. The issue of publications containing information on social questions, and 
arguments relating to Socialism. 
4· The promotion of Socialist lectures and debates in other Societies and Clubs. 
S· The representation of the Society in public conferences and discussions on 

social questions. 
The members are pledged to take part according to their abilities 
and opportunities in the general work of the Society, and are 
expected to contribute annually to the Society's funds. 
The Society seeks recruits from all ranks, believing that not onlythose who suffer from the present system, but also many who are 
themseh·es enriched by it, recognize its evils and would welcome a 
remedy. 
The Society meets for lectures and discussions on two Fridays in 
the month, at 8 p.m. 


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