By Ezra Pugh
While one cannot label John Stuart Mill a socialist, his sympathy and openness to some socialist ideas may surprise modern readers. While regarded today as a patriarch of free market classical liberalism, in a series of articles originally published in The Fortnightly Review between February and April 1879 – later included in the edited volume Socialism (1891) – Mill provides a critical but surprisingly sympathetic assessment of the socialist ideas of his day. While the first volume of Capital by Karl Marx had been published by the time of Mill’s writing, he makes no reference to the work or Marx, and his analysis is limited to pre-Marxian socialist thinkers. While Mill dismisses the great majority of the arguments of the socialists, he acknowledges the validity of many of their frustrations with capitalism, and even goes so far as to endorse some schemes that would be decried as socialism by the modern free marketeer.
The timing of Mill’s analysis was no accident. At the time of his writing in 1879, the Western world was deeply embroiled in the Long Depression of 1873-1896, the worst economic crisis to that point since the advent of industrialization. As the crisis dragged on, doubt in the supremacy of private property as the best form social relation had become widespread throughout the working classes of the Western world. Misery and poverty were rampant, even in the most advanced cities of the most advanced nations. The industrial revolution fundamentally changed society, and new problems required new solutions. As a result, Mill wrote, “the working classes are entitled to claim that the whole field of social institutions should be re-examined, and every question considered as if it now arose for the first time” (Mill, 1891, p. 68). Mill attempts to compare the established idea of private property to the new ideas of socialism and deduce which would be the better fit for society going forward.
Mill divides his analysis of socialism into two main parts. “There is first,” Mill writes, “the judgement of Socialism on existing institutions and practices and on their results; and secondly, the various plans which it has propounded for doing better” (Mill, 1891, p. 69). Socialism – or any movement which seeks to change a society’s status quo – must both make a negative case, diagnosing the ills of society as it exists, and also lay out a positive vision of how society should be changed – along with a plan for getting there. According to Mill, all the various schools of Socialism agree on the first count – their diagnosis of existing society. There is a divergence of thought on the second count, however, and he divides socialists into two camps: Communal and Revolutionary. He separates these issues and considers them in turn.
Mill begins his appraisal of socialism by listing a litany of complaints socialist thinkers had levied against the contemporary economic order. Despite the complaints being “so various…that the only difficulty is to make any approach to an exhaustive catalogue,” Mill divides the arguments into two main categories (Mill, 1891, p. 70). The first main category of argument is that the institution of private property in industrial society generates poverty and an unjust distribution of wealth, ruining the great majority of people financially. The second main category of argument is that individualistic competition, upon which the market economy is founded, ruins people morally and makes them anti-social. Thus, modern society ruins people materially and spiritually. Mill, to a degree, is willing to accept both of these arguments.
Mill agrees with the argument that the private property relation had generated poverty and unfair distribution. He writes, “Suffice it to say that the condition of numbers in civilized Europe, and even in England and France, is more wretched than that of most tribes of savages who are known to us” (Mill, 1891, p. 72). He acknowledges the observation that the higher the degree of industrialization, the higher the degree of immiseration of the working class of Europe. Immense wealth is created, but the distribution of that wealth isn’t necessarily fair or moral. “Those who receive the least, labor and abstain the most,” he notes (Mill, 1891, p.73). Going further, “the most powerful of all the determining circumstances is birth… next to birth the chief cause of success in life is accident and opportunity” (Mill, 1891, pp. 73-74). For Mill, market outcomes are by no mean guaranteed to be optimal or fiar. He acknowledges a legitimate and necessary role for the state to play in interceding in the market to achieve a greater degree of fairness in outcomes.
Mill also agrees to a large extent with the second argument, that the system of private property with individualistic competition ruins people morally. He identifies the tendency for competition to reward deceit and fraud on the part of merchants. The lowest cost producers tend to win out, and there emerges a pattern whereby sellers artificially lower their costs by “resort[ing] to any of the modes of fraud, such as adulteration, giving short measure, etc.…the temptation is immense on [the merchants] to adopt the fraudulent practices…for the public are aware of the low prices fallaciously produced by the frauds, but do not find out at first, if ever, that the article is not worth the lower price” (Mill, 1891, pp. 99-100). Thus, by an evolutionary process, the honest merchants are weeded out and the frauds survive. Mill suggests the remedy to this trend is increased regulation and a public prosecutor charged, again, advocating for state intervention in the market to correct endogenous flaws.
Perhaps Mill’s most surprising endorsement reformisis of what he terms industrial partnerships, what we call today worker cooperatives. He observes that this form of organization where “the admission of the whole body of laborers to a participation in the profits, by distributing among all who share in the work, in the form of a percentage on their earnings, the whole or a fixed portion of the gains after a certain remuneration has been allowed to the capitalist…has been found of admirable efficacy, both in this country and abroad” (Mill, 1891, p. 120). He notes that such organizations promote efficiency and exertion on the part of workers, reduce waste, and raise worker compensation. He goes to far as to speculate that over time, many businesses could pass into purely cooperative forms once their chiefs retire or pass away – hardly the prediction one might expect from a classical liberal.
But Mill also lists reasons why socialism couldn’t, and in many cases shouldn’t, become the norm of society. Mill is generally open to what he terms communal socialism – the socialism of Owen and Fourier – gradual experimental changes that do not upset the order of society too fundamentally all at once. The other type of socialism which he calls Revolutionary (a foreign import from “The Continent”), seeks to “forcibly deprive all who have now a comfortable physical existence of their only present means of preserving it,” and he predicts “frightful bloodshed and misery would ensue” from such a transition (Mill, 1891, p. 110). Common to both types, Mill foresees a problem motivating people “to do their very best” because men are driven by selfish motives (Mill, 1891, p. 114). Because of the lack of incentive, the persons most qualified for the management would be likely very often to hang back from undertaking it” (Mill, 1891, p. 117). Some highly cultivated individuals may be able to make such a system work, but “before these exceptions can grow into a majority, or even into a very large minority, much time will be required” to socially condition people to be ready for such a system (Mill, 1891, p. 115).
While Mill expresses views in these articles that might have gotten him expelled from the Cato institute today, he stops well short of becoming an advocate of socialism. He observes that while “the evils and injustices suffered under the present system are great…they are not increasing; on the contrary the general tendency is toward their slow diminution” (Mill, 1891, 107). He thinks that with time and the right state intervention, these ills can eventually be eliminated without resorting to any drastic measures. While he does not want to upend the system, he boldly writes that “society is fully entitled to abrogate or alter any particular right of property which on sufficient consideration it judges to stand in the way of the public good” (Mill, 1891, p. 137). Property rights are not in and of themselves sacrosanct, and their form must be in service of generating maximum social welfare. In a surprisingly dialectical observation, he writes, “the idea of property is not some one thing identical throughout history and incapable of alteration but is variable like all other creations of the human mind” (Mill, 1891, p. 136). While one cannot call Mill a socialist, it is clear he is open to considerably more radical market intervention than he is usually given credit.
Mill, J. Stuart. Bliss, W. Dwight Porter. (1891). Socialism. New York: The Humboldt Publishing Co.
