Taxation and Pauperism by Sir Guilford Lindsey Molesworth 1918
Bastiat, the French Economist, thus discriminates between the good and bad economist:—
"Between a good and a bad economist this constitutes the whole difference—the one takes account of the visible effect; the other takes account both of the effects which are seen, and also of those which it is necessary to foresee. Now this difference is enormous, for it almost always happens that when the immediate consequence is favourable, the ultimate consequences are fatal, and the converse. Hence it follows that the bad economist pursues a small present good, which will be followed by a great evil to come; while the true economist pursues a great good to come, at the risk of a small present evil" (Essays on Political Economy, F. Bastiat, p. 48).
It seldom occurs to the Socialist legislator to look beneath the surface or beyond the superficial aspect of any measure. So great an authority as Professor Foxwell has rightly said:—
"The incidence of taxation is one of the most difficult problems of political economy."
Sidgwick, perhaps the most eminent modern economist, has pointed out that—
"We can only partially succeed in making the burden either of direct or indirect taxes fall where we desire; the burden is liable to be transferred to other persons when it is intended to remain where it is first imposed" (Principles of Political Economy, H. Sidgwick, p. 567).
This frustrates the great Socialist aim "to make the poor richer by making the rich poorer." But Socialists "rush in where angels fear to tread." It is a common saying of Socialist workers, "Pile it on the rates and taxes; it doesn't affect us"; but it does affect them vitally. Lecky said:—
"No truth of political economy is more certain than that a heavy taxation of capital, which starves industry and employment, will fall most severely on the poor" (Democracy and Liberty, vol. i, p. 287).
More than thirty years before the outbreak of the great war Herbert Spencer prophesied that pauperism and unemployment which have actually prevailed in the pre-war years from this cause. He pointed out how the enormous and ever-increasing rates and taxes, whether local or Imperial, falling chiefly on the employers of labour, must necessarily be met from the industries of those employers, and eventually by the working men themselves, either in decreased wages, or in shortage of employment. Since that time, until the outbreak of the war in 1914, local taxation had nearly tripled—Imperial taxation had increased 3.5 times, and was £20,000,000 in excess of the maximum taxation caused by the Boer War. This increase has been due to reckless taxation of the most useless and mischievous character, not for the benefit of the people, but for the purpose of gaining the Socialist votes. At the same time the very foundations of our national defence were being sapped by the short-sighted policy of military and naval retrenchment. The volunteer forces, several battalions of infantry, and batteries of artillery were discarded; the militia, the great source of recruiting, was wiped out; and experienced munition hands were dismissed from Woolwich Arsenal, and eagerly snapped up by Germany; coastguard stations were broken up and sold; and during the three years 1906-8 there had been a total reduction of naval expenditure amounting to nearly £19,000,000.
Shortly before the war the public awoke to the fact that a largely increased taxation would be needed to restore, to some extent, the national defences to that state of efficiency from which they had been allowed to lapse. It also became aware of the connection between taxation and pauperism. Mr. Gordon Harvey, the member for Rochdale, declared:—
"The slackening of trade to-day, the growth of short time and stinted wages, are largely due to the financial stringency of the moment which is largely brought about by the wicked extravagance of Governments."
It would have been well if the member for Rochdale had discovered this fact at an earlier period; for he and his fellow Radical members had been mainly responsible for that "wicked extravagance" from which the country has suffered. Professor Shield Nicholson, in a very able address to the British Association in 1894, attributed the decay of the nation to excessive taxation. He said:—
"By excessive taxation Rome ruined her provinces and shattered her Empire; France accumulated the miseries that broke into the great Revolution; Turkey laid waste the most fertile regions of the earth. At this moment Italy is smouldering with discontent, and even the vigorous colonies of Australia feel their progress checked through the immoderate expenditure of the State. . . . Stripped of all this disguise the very object of Socialism is to impose taxes beyond the limit ever attempted by the rapacity and audacity of Governments."
Bastiat, the French Economist, thus discriminates between the good and bad economist:—
"Between a good and a bad economist this constitutes the whole difference—the one takes account of the visible effect; the other takes account both of the effects which are seen, and also of those which it is necessary to foresee. Now this difference is enormous, for it almost always happens that when the immediate consequence is favourable, the ultimate consequences are fatal, and the converse. Hence it follows that the bad economist pursues a small present good, which will be followed by a great evil to come; while the true economist pursues a great good to come, at the risk of a small present evil" (Essays on Political Economy, F. Bastiat, p. 48).
It seldom occurs to the Socialist legislator to look beneath the surface or beyond the superficial aspect of any measure. So great an authority as Professor Foxwell has rightly said:—
"The incidence of taxation is one of the most difficult problems of political economy."
Sidgwick, perhaps the most eminent modern economist, has pointed out that—
"We can only partially succeed in making the burden either of direct or indirect taxes fall where we desire; the burden is liable to be transferred to other persons when it is intended to remain where it is first imposed" (Principles of Political Economy, H. Sidgwick, p. 567).
This frustrates the great Socialist aim "to make the poor richer by making the rich poorer." But Socialists "rush in where angels fear to tread." It is a common saying of Socialist workers, "Pile it on the rates and taxes; it doesn't affect us"; but it does affect them vitally. Lecky said:—
"No truth of political economy is more certain than that a heavy taxation of capital, which starves industry and employment, will fall most severely on the poor" (Democracy and Liberty, vol. i, p. 287).
More than thirty years before the outbreak of the great war Herbert Spencer prophesied that pauperism and unemployment which have actually prevailed in the pre-war years from this cause. He pointed out how the enormous and ever-increasing rates and taxes, whether local or Imperial, falling chiefly on the employers of labour, must necessarily be met from the industries of those employers, and eventually by the working men themselves, either in decreased wages, or in shortage of employment. Since that time, until the outbreak of the war in 1914, local taxation had nearly tripled—Imperial taxation had increased 3.5 times, and was £20,000,000 in excess of the maximum taxation caused by the Boer War. This increase has been due to reckless taxation of the most useless and mischievous character, not for the benefit of the people, but for the purpose of gaining the Socialist votes. At the same time the very foundations of our national defence were being sapped by the short-sighted policy of military and naval retrenchment. The volunteer forces, several battalions of infantry, and batteries of artillery were discarded; the militia, the great source of recruiting, was wiped out; and experienced munition hands were dismissed from Woolwich Arsenal, and eagerly snapped up by Germany; coastguard stations were broken up and sold; and during the three years 1906-8 there had been a total reduction of naval expenditure amounting to nearly £19,000,000.
Shortly before the war the public awoke to the fact that a largely increased taxation would be needed to restore, to some extent, the national defences to that state of efficiency from which they had been allowed to lapse. It also became aware of the connection between taxation and pauperism. Mr. Gordon Harvey, the member for Rochdale, declared:—
"The slackening of trade to-day, the growth of short time and stinted wages, are largely due to the financial stringency of the moment which is largely brought about by the wicked extravagance of Governments."
It would have been well if the member for Rochdale had discovered this fact at an earlier period; for he and his fellow Radical members had been mainly responsible for that "wicked extravagance" from which the country has suffered. Professor Shield Nicholson, in a very able address to the British Association in 1894, attributed the decay of the nation to excessive taxation. He said:—
"By excessive taxation Rome ruined her provinces and shattered her Empire; France accumulated the miseries that broke into the great Revolution; Turkey laid waste the most fertile regions of the earth. At this moment Italy is smouldering with discontent, and even the vigorous colonies of Australia feel their progress checked through the immoderate expenditure of the State. . . . Stripped of all this disguise the very object of Socialism is to impose taxes beyond the limit ever attempted by the rapacity and audacity of Governments."
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