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With the close of the middle ages the societies of Western Christendom and England among the rest were economically free.

Property was an institution native to the State and enjoyed by the great mass of its citizens. Co-operative institutions, voluntary regulations of labour, restricted the completely independent use of property by its owners only in order to keep that institution intact and to prevent the absorption of small property by great.

This excellent state of affairs which we had reached after many centuries of Christian development, and in which the old institution of slavery had been finally eliminated from Christendom, did not everywhere survive. In England in particular it was ruined. The seeds of the disaster were sown in the sixteenth century. Its first apparent effects came to light in the seventeenth. During the eighteenth century England came to be finally, though insecurely, established upon a proletarian basis, that is, it had already become a society of rich men possessed of the means of production on the one hand, and a majority dispossessed of those means upon the other. With the nineteenth century the evil plant had come to its maturity, and England had become before the close of that period a purely Capitalist State, the type and model of Capitalism for the whole world: with the means of production tightly held by a very small group of citizens, and the whole determining mass of the nation dispossessed of capital and land, and dispossessed, therefore, in all cases of security, and in many of sufficiency as well. The mass of Englishmen, still possessed of political, lacked more and more the elements of economic, freedom, and were in a worse posture than free citizens have ever found themselves before in the history of Europe.

By what steps did so enormous a catastrophe fall upon us?

The first step in the process consisted in the mishandling of a great economic revolution which marked the sixteenth century. The lands and the accumulated wealth of the monasteries were taken out of, the hands of their old possessors with the intention of vesting them in the Crown—but they passed, as a fact, not into the hands of the Crown, but into the hands of an already wealthy section of the community who, after the change was complete, became in the succeeding hundred years the governing power of England.

This is what happened:—

The England of the early sixteenth century, the England over which Henry VIII inherited his powerful Crown in youth, though it was an England in which the great mass of men owned the land they tilled and the houses in which they dwelt, and the implements with which they worked, was yet an England in which these goods, though widely distributed, were distributed unequally.

Then, as now, the soil and its fixtures were the basis of all wealth, but the proportion between the value of the soil and its fixtures and the value of other means of production (implements, stores of clothing and of subsistence, etc.) was different from what it is now. The land and the fixtures upon it formed a very much larger fraction of the totality of the means of production than they do to-day. They represent to-day not one-half the total means of production of this country, and though they are the necessary foundation for all wealth production, yet our great machines, our stores of food and clothing, our coal and oil, our ships and the rest of it, come to more than the true value of the land and of the fixtures upon the land: they come to more than the arable soil and the pasture, the constructional value of the houses, wharves and docks, and so forth. In the early sixteenth century the land and the fixtures upon it came, upon the contrary, to very much more than all other forms of wealth combined.

Now this form of wealth was here, more than in any other Western European country, already in the hands of a wealthy land-owning class at the end of the Middle Ages.

It is impossible to give exact statistics, because none were gathered, and we can only make general statements based upon inference and research. But, roughly speaking, we may say that of the total value of the land and its fixtures, probably rather more than a quarter, though less than a third, was in the hands of this wealthy class.

The England of that day was mainly agricultural, and consisted of more than four, but less than six million people, and in every agricultural community you would have the Lord, as he was legally called (the squire, as he was already conversationally termed), in possession of more demesne land than in any other country. On the average you found him, I say, owning in this absolute fashion rather more than a quarter, perhaps a third of the land of the village: in the towns the distribution was more even. Sometimes it was a private individual who was in this position, sometimes a corporation, but in every village you would have found this demesne land absolutely owned by the political head of the village, occupying a considerable proportion of its acreage. The rest, though distributed as property among the less fortunate of the population, and carrying with it houses and implements from which they could not be dispossessed, paid certain dues to the Lord, and, what was more, the Lord exercised local justice. This class of wealthy landowners had been also for now one hundred years the Justices upon whom local administration depended.

There was no reason why this state of affairs should not gradually have led to the rise of the Peasant and the decay of the Lord. That is what happened in France, and it might perfectly well have happened here. A peasantry eager to purchase might have gradually extended their holdings at the expense of the demesne land, and to the distribution of property, which was already fairly complete, there might have been added another excellent element, namely, the more equal possession of that property. But any such process of gradual buying by the small man from the great, such as would seem natural to the temper of us European people, and such as has since taken place nearly everywhere in countries which were left free to act upon their popular instincts, was interrupted in this country by an artificial revolution of the most violent kind. This artificial revolution consisted in the seizing of the monastic lands by the Crown.

It is important to grasp clearly the nature of this operation, for the whole economic future of England was to flow from it.

Of the demesne lands, and the power of local administration which they carried with them (a very important feature, as we shall see later), rather more than a quarter were in the hands of the Church; the Church was therefore the “Lord” of something over 25 per cent. say 28 per cent. or perhaps nearly 30 per cent. of English agricultural communities, and the overseers of a like proportion of all English agricultural produce. The Church was further the absolute owner in practice of something like 30 per cent. of the demesne land in the villages, and the receiver of something like 30 per cent. of the customary dues, etc., paid by the smaller owners to the greater. All this economic power lay until 1535 in the hands of Cathedral Chapters, communities of monks and nuns, educational establishments conducted by the clergy, and so forth.

When the Monastic lands were confiscated by Henry VIII, not the whole of this vast economic influence was suddenly extinguished. The secular clergy remained endowed, and most of the educational establishments, though looted, retained some revenue; but though the whole 30 per cent. did not suffer confiscation, something well over 20 per cent. did, and the revolution effected by this vast operation was by far the most complete, the most sudden, and the most momentous of any that has taken place in the economic history of any European people.

It was at first intended to retain this great mass of the means of production in the hands of the Crown: that must be clearly remembered by any student of the fortunes of England, and by all who marvel at the contrast between the old England and the new.

Had that intention been firmly maintained, the English State and its government would have been the most powerful in Europe.

The Executive (which in those days meant the King) would have had a greater opportunity for crushing the resistance of the wealthy, for backing its political power with economic power, and for ordering the social life of its subjects than any other executive in Christendom.

Had Henry VIII and his successors kept the land thus confiscated, the power of the French Monarchy, at which we are astonished, would have been nothing to the power of the English.

The King of England would have had in his own hands an instrument of control of the most absolute sort. He would presumably have used it, as a strong central government always does, for the weakening of the wealthier classes, and to the indirect advantage of the mass of the people. At any rate, it would have been a very different England indeed from the England we know, if the King had held fast to his own after the dissolution of the monasteries.

Now it is precisely here that the capital point in this great revolution appears. The King failed to keep the lands he had seized. That class of large landowners which already existed and controlled, as I have said, anything from a quarter to a third of the agricultural values of England, were too strong for the monarchy. They insisted upon land being granted to themselves, sometimes freely, sometimes for ridiculously small sums, and they were strong enough in Parliament, and through the local administrative power they had, to see that their demands were satisfied. Nothing that the Crown let go ever went back to the Crown, and year after year more and more of what had once been the monastic land became the absolute possession of the large landowners.

Observe the effect of this. All over England men who already held in virtually absolute property from one-quarter to one-third of the soil and the ploughs and the barns of a village, became possessed in a very few years of a further great section of the means of production, which turned the scale wholly in their favour. They added to that third a new and extra fifth. They became at a blow the owners of half the land! In many centres of capital importance they had come to own more than half the land. They were in many districts not only the unquestioned superiors, but the economic masters of the rest of the community. They could buy to the greatest advantage. They were strictly competitive, getting every shilling of due and of rent where the old clerical landlords had been customary—leaving much to the tenant. They began to fill the universities, the judiciary. The Crown less and less decided between great and small. More and more the great could decide in their own favour. They soon possessed by these operations the bulk of the means of production, and they immediately began the process of eating up the small independent men and gradually forming those great estates which, in the course of a few generations, became identical with the village itself. All over England you may notice that the great squires’ houses date from this revolution or after it. The manorial house, the house of the local great man as it was in the Middle Ages, survives here and there to show of what immense effect this revolution was. The low-timbered place with its steadings and outbuildings, only a larger farmhouse among the other farmhouses, is turned after the Reformation and thenceforward into a palace. Save where great castles (which were only held of the Crown and not owned) made an exception, the pre-Reformation gentry lived as men richer than, but not the masters of, other farmers around them. After the Reformation there began to arise all over England those great “country houses” which rapidly became the typical centres of English agricultural life.

The process was in full swing before Henry died. Unfortunately for England, he left as his heir a sickly child, during the six years of whose reign, from 1547 to 1553, the loot went on at an appalling rate. When he died and Mary came to the throne it was nearly completed. A mass of new families had arisen, wealthy out of all proportion to anything which the older England had known, and bound by a common interest to the older families which had joined in the grab. Every single man who sat in Parliament for a country required his price for voting the dissolution of the monasteries; every single man received it. A list of the members of the Dissolution Parliament is enough to prove this, and, apart from their power in Parliament, this class had a hundred other ways of insisting on their will. The Howards (already of some lineage), the Cavendishes, the Cecils, the Russels, and fifty other new families thus rose upon the ruins of religion; and the process went steadily on until, about one hundred years after its inception, the whole face of England was changed.

In the place of a powerful Crown disposing of revenues far greater than that of any subject, you had a Crown at its wit’s end for money, and dominated by subjects some of whom were its equals in wealth, and who could, especially through the action of Parliament (which they now controlled), do much what they willed with Government.

In other words, by the first third of the seventeenth century, by 1630—40, the economic revolution was finally accomplished, and the new economic reality thrusting itself upon the old traditions of England was a powerful oligarchy of large owners overshadowing an impoverished and dwindled monarchy.

Other causes had contributed to this deplorable result. The change in the value of money had hit the Crown very hard;2 the peculiar history of the Tudor family, their violent passions, their lack of resolution and of any continuous policy, to some extent the character of Charles I himself, and many another subsidiary cause may be quoted. But the great main fact upon which the whole thing is dependent is the fact that the Monastic Lands, at least a fifth of the wealth of the country, had been transferred to the great landowners, and that this transference had tipped the scale over entirely in their favour as against the peasantry.

The diminished and impoverished Crown could no longer stand. It fought against the new wealth, the struggle of the Civil Wars; it was utterly defeated; and when a final settlement was arrived at in 1660, you have all the realities of power in the hands of a small powerful class of wealthy men, the King still surrounded by the forms and traditions of his old power, but in practice a salaried puppet. And in that economic world which underlies all political appearances, the great dominating note was that a few wealthy families had got hold of the bulk of the means of production in England, while the same families exercised all local administrative power and were moreover the Judges, the Higher Education, the Church, and the generals. They quite overshadowed what was left of central government in this country.

Take, as a starting-point for what followed, the date 1700. By that time more than half of the English were dispossessed of capital and of land. Not one man in two, even if you reckon the very small owners, inhabited a house of which he was the secure possessor, or tilled land from which he could not be turned off.

Such a proportion may seem to us to-day a wonderfully free arrangement, and certainly if nearly one-half of our population were possessed of the means of production, we should be in a very different situation from that in which we find ourselves. But the point to seize is that, though the bad business was very far from completion in or about the year 1700, yet by that date England had already become Capitalist. She had already permitted a vast section of her population to become proletarian, and it is this and not the so-called “Industrial Revolution,” a later thing, which accounts for the terrible social condition in which we find ourselves to-day.

How true this is what I still have to say in this section will prove.

In an England thus already cursed with a very large proletariat class, and in an England already directed by a dominating Capitalist class, possessing the means of production, there came a great industrial development.

Had that industrial development come upon a people economically free, it would have taken a co-operative form. Coming as it did upon a people which had already largely lost its economic freedom, it took at its very origin a Capitalist form, and this form it has retained, expanded, and perfected throughout two hundred years.

It was in England that the Industrial System arose. It was in England that all its traditions and habits were formed; and because the England in which it arose was already a Capitalist England, modern Industrialism, wherever you see it at work to-day, having spread from England, has proceeded upon the Capitalist model.

It was in 1705 that the first practical steam-engine, Newcomen’s, was set to work. The life of a man elapsed before this invention was made, by Watt’s introduction of the condenser, into the great instrument of production which has transformed our industry—but in those sixty years all the origins of the Industrial System are to be discovered. It was just before Watt’s patent that Hargreaves’ spinning-jenny appeared. Thirty years earlier, Abraham Darby of Colebrook Dale, at the end of a long series of experiments which had covered more than a century, smelted iron-ore successfully with coke. Not twenty years later, King introduced the flying shuttle, the first great improvement in the hand-loom; and in general the period covered by such a life as that of Dr Johnson, born just after Newcomen’s engine was first set working, and dying seventy-four years afterwards, when the Industrial System was in full blast, covers that great transformation of England. A man who, as a child, could remember the last years of Queen Anne, and who lived to the eve of the French Revolution, saw passing before his eyes the change which transformed English society and has led it to the expansion and peril in which we see it to-day.

What was the characteristic mark of that half-century and more? Why did the new inventions give us the form of society now known and hated under the name of Industrial? Why did the vast increase in the powers of production, in population and in accumulation of wealth, turn the mass of Englishmen into a poverty-stricken proletariat, cut off the rich from the rest of the nation, and develop to the full all the evils which we associate with the Capitalist State?

To that question an answer almost as universal as it is unintelligent has been given. That answer is not only unintelligent but false, and it will be my business here to show how false it is. The answer so provided in innumerable textbooks, and taken almost as commonplace in our universities, is that the new methods of production—the new machinery, the new implements—fatally and of themselves developed a Capitalist State in which a few should own the means of production and the mass should be proletariat. The new instruments, it is pointed out, were on so vastly greater a scale than the old, and were so much more expensive, that the small man could not afford them; while the rich man, who could afford them, ate up by his competition, and reduced from the position of a small owner to that of a wage-earner, his insufficiently equipped competitor who still attempted to struggle on with the older and cheaper tools. To this (we are told) the advantages of concentration were added in favour of the large owner against the small. Not only were the new instruments expensive almost in proportion to their efficiency, but, especially after the introduction of steam, they were efficient in proportion to their concentration in few places and under the direction of a few men. Under the effect of such false arguments as these we have been taught to believe that the horrors of the Industrial System were a blind and necessary product of material and impersonal forces, and that wherever the steam engine, the power loom, the blast furnace and the rest were introduced, there fatally would soon appear a little group of owners exploiting a vast majority of the dispossessed.

It is astonishing that a statement so unhistorical should have gained so general a credence. Indeed, were the main truths of English history taught in our schools and universities to-day, were educated men familiar with the determining and major facts of the national past, such follies could never have taken root. The vast growth of the proletariat, the concentration of ownership into the hands of a few owners, and the exploitation by those owners of the mass of the community, had no fatal or necessary connection with the discovery of new and perpetually improving methods of production. The evil proceeded indirect historical sequence, proceeded patently and demonstrably, from the fact that England, the seed-plot of the Industrial System, was already captured by a wealthy oligarchy before the series of great discoveries began.

Consider in what way the Industrial System developed upon Capitalist lines. Why were a few rich men put with such ease into possession of the new methods? Why was it normal and natural in their eyes and in that of contemporary society that those who produced the new wealth with the new machinery should be proletarian and dispossessed? Simply because the England upon which the new discoveries had come was already an England owned as to its soil and accumulations of wealth by a small minority: it was already an England in which perhaps half of the whole population was proletarian, and a medium for exploitation ready to hand.

When any one of the new industries was launched it had to be capitalised; that is, accumulated wealth from some source or other had to be found which would support labour in the process of production until that process should be complete. Someone must find the corn and the meat and the housing and the clothing by which should be supported, between the extraction of the raw material and the moment when the consumption of the finished article could begin, the human agents which dealt with that raw material and turned it into the finished product. Had property been well distributed, protected by co-operative guilds fenced round and supported by custom and by the autonomy of great artisan corporations, those accumulations of wealth, necessary for the launching of each new method of production and for each new perfection of it, would have been discovered in the mass of small owners. Their corporations, their little parcels of wealth combined would have furnished the capitalisation required for the new processes, and men already owners would, as one invention succeeded another, have increased the total wealth of the community without disturbing the balance of distribution. There is no conceivable link in reason or in experience which binds the capitalisation of a new process with the idea of a few employing owners and a mass of employed non-owners working at a wage. Such great discoveries coming in a society like that of the thirteenth century would have blest and enriched mankind. Coming upon the diseased moral conditions of the eighteenth century in this country, they proved a curse.

To whom could the new industry turn for capitalisation? The small owner had already largely disappeared. The corporate life and mutual obligations which had supported him and confirmed him in his property had been broken to pieces by no “economic development,” but by the deliberate action of the rich. He was ignorant because his schools had been taken from him and the universities closed to him. He was the more ignorant because the common life which once nourished his social sense and the co-operative arrangements which had once been his defence had disappeared. When you sought an accumulation of corn, of clothing, of housing, of fuel as the indispensable preliminary to the launching of your new industry; when you looked round for someone who could find the accumulated wealth necessary for these considerable experiments, you had to turn to the class which had already monopolised the bulk of the means of production in England. The rich men alone could furnish you with those supplies.

Nor was this all. The supplies once found and the adventure “capitalised,” that form of human energy which lay best to hand, which was indefinitely exploitable, weak, ignorant, and desperately necessitous, ready to produce for you upon almost any terms, and glad enough if you would only keep it alive, was the existing proletariat which the new plutocracy had created when, in cornering the wealth of the country after the Reformation, they had thrust out the mass of Englishmen from the possession of implements, of houses, and of land.

The rich class, adopting some new process of production for its private gain, worked it upon those lines of mere competition which its avarice had already established. Co-operative tradition was dead. Where would it find its cheapest labour? Obviously among the proletariat—not among the remaining small owners. What class would increase under the new wealth? Obviously the proletariat again, without responsibilities, with nothing to leave to its progeny; and as they swelled the capitalist’s gain, they enabled him with increasing power to buy out the small owner and send him to swell by another tributary the proletarian mass.

It was upon this account that the Industrial Revolution, as it is called, took in its very origins the form which has made it an almost unmixed curse for the unhappy society in which it has flourished. The rich, already possessed of the accumulations by which that industrial change could alone be nourished, inherited all its succeeding accumulations of implements and all its increasing accumulations of subsistence. The factory system, starting upon a basis of capitalist and proletariat, grew in the mould which had determined its origins. With every new advance the capitalist looked for proletariat grist to feed the productive mill. Every circumstance of that society, the form in which the laws that governed ownership and profit were cast, the obligations of partners, the relations bet ween “master” and “man,” directly made for the indefinite expansion of a subject, formless, wage-earning class controlled by a small body of owners, which body would tend to become smaller and richer still, and to be possessed of power ever greater and greater as the bad business unfolded.

The spread of economic oligarchy was everywhere, and not in industry alone. The great landlords destroyed deliberately and of set purpose and to their own ad vantage the common rights over common land. The small plutocracy with which they were knit up, and with whose mercantile elements they were now fused, directed everything to its own ends. That strong central government which should protect the community against the rapacity of a few had gone generations before. Capitalism triumphant wielded all the mechanism of legislation and of information too. It still holds them; and there is not an example of so-called “Social Reform” to-day which is not demonstrably (though often subconsciously) directed to the further entrenchment and confirmation of an industrial society in which it is taken for granted that a few shall own, that the vast majority shall live at a wage under them, and that all the bulk of Englishmen may hope for is the amelioration of their lot by regulations and by control from above—but not by property; not by freedom.

We all feel—and those few of us who have analysed the matter not only feel but know—that the Capitalist society thus gradually developed from its origins in the capture of the land four hundred years ago has reached its term. It is almost self-evident that it cannot continue in the form which now three generations have known, and it is equally self-evident that some solution must be found for the intolerable and increasing instability with which it has poisoned our lives. But before considering the solutions variously presented by various schools of thought, I shall in my next section show how and why the English Capitalist Industrial System is thus intolerably unstable and consequently presents an acute problem which must be solved under pain of social death.

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It must be noted that modern Industrialism has spread to many other centres from England. It bears everywhere the features stamped upon it by its origin in this country.