The suppression of the "unnecessary middleman" sounds so very plausible that it is certain to prove an excellent election cry. But has the middleman really disappeared when a city corporation takes his place? Does the corporation-middleman supply gas gratis? Are the private middleman's profits not distributed to a host of corporation officials in the shape of substantial salaries? The transfer of gasworks, &c., from private hands to a city corporation is no doubt very beneficial to those who draw the corporation salaries. It may be very profitable to the local politicians and their hangers-on. Jobs may be had as a reward for political support. But the citizens may find the gas to be no cheaper and the rates to be considerably higher after the suppression of the "unnecessary middleman." And will it then console him that he is the "owner and manager of the gasworks and of the gas supply"?
Under the heading "The Justice of Abolishing the Private Trader" one of the leading champions of municipal Socialism writes: "Is it unfair to take away the living of the private trader? Then it is unfair to take away the living of the unemployed, the twelve millions on the verge of starvation, and the thousands slain annually by poverty and preventable disease. I say that the welfare of the nation must be considered before the profits of the monopolists and the wasteful freedom of the small trader. Under the present system a large proportion of the population have so deteriorated in health and stamina as to endanger the existence of the nation. Private enterprise and competition are responsible for nine-tenths of the misery and suffering of our twenty million poor. But we must not attempt to alter the conditions because the small private trader would be ruined. Nevertheless the system is going to be altered, whether the small trader likes it or not."[674]
The foregoing are typical Socialist arguments. In the first place, the writer grossly exaggerates existing poverty by speaking of "twenty million poor." Then he boldly asserts that all poverty is due to private enterprise and that municipal enterprise will abolish it. So far municipal enterprise has not even succeeded in diminishing poverty. On the contrary, with the phenomenal growth of municipal enterprise in Great Britain pauperism, actual and percentual, has also grown at an alarming rate. It is significant that poverty and distress have increased most rapidly, and have become most acute, in those localities in which municipal enterprise has been most active and in which Socialist councils have held undisputed sway, as, for instance, in East and West Ham and Poplar. Municipal enterprise, by increasing the rates--and, with the rates, the rents--has increased the general cost of living without at the same time increasing production. On the contrary, it has driven factories away through high rates. Therefore municipal enterprise has increased the expenditure of the general body of workers without increasing their earnings, and consequently has directly increased the existing poverty which it has promised to abolish. Municipal enterprise has succeeded chiefly in giving from the rates high wages to municipal employees at the cost of all other workers.