Review of the Book:
The Thinking Woman's Guide to Socialism and Capitalism
by George Bernard Shaw
Benjamin W. Burger
[Reprinted from Land and Freedom, July-August
This book is a formidable work of 463 pages, preceded by a foreword
for American readers, 5 pages in length, and a table of contents 34
It contains an appendix of six pages, and an index of 25 pages.
Examining at random, the letter "B," I find under the 136
classifications, references to Babies, Bachelors, Baked Potato Men,
Barbers, Battle Ships, Bees, Bibles, Birth Control, Blacklegs, Bonar
Law, Book Makers, Bootlegging, Boy Scouts, Breaking a Bank, Bulls and
Truly the mountain has labored. Shaw says of this book on which he
has been working for over six years, "It has been more difficult
to write than all my plays it is my last will and testament to
America, he writes, "can claim that in this book, I am doing no
more than finishing Henry George's job."
Shaw is no coward. He assumes full responsibility. "This book is
not a compilation; it is all out of my own head."
But wait. Shaw is also modest. He dedicates it to his sister-in-law, "The
intelligent woman to whose question this book is the best answer I can
make." True humility.
Let us now examine the mouse this mountain has brought forth. In the
very first paragraph Shaw states, the discussion is to concern itself
with the distribution of the wealth we produce every year. We can
agree with him "that the existing distribution is so anomalous,
monstrous, ridiculous, and unbearably mischievous, that it must be
radically changed if civilization is to be saved from the wreck to
which all the older civilizations we know of were brought by this very
evil." (Page 5).
"When wealth has been produced, each gets his legally appointed
share." (Page 7).
What should that share be?
"That must be settled by law." (Page 8).
That there is a natural law which should govern the distribution of
wealth does not dawn on Shaw.
There are, Shaw writes, seven plans of distribution.
1. To each what he or she produces.
2. To each what he or she deserves.
3. To each what he or she can get and hold.
4. To the common people enough to keep them alive while they work
all day, the rest to the gentry.
5. Division of society into classes, the distribution being equal
or thereabouts within each class, but unequal as between the
6. Let us go on as we are.
7. Socialism; an equal share to everybody.
Shaw's conception of socialism is to divide up the income of the
country equally between everybody, "making no distinction between
lords and laborers, babies in arms and able bodied adults, drunkards
and teetotallers, arch-bishops and sextons, sinners and saints."
How is this to be brought about?
"By Law." (Page 93).
"The first and last commandment of socialism is 'Thou shalt not
have a greater or less income than thy neighbor; but before such a
commandment can be even approximately obeyed, we shall have not only
to pass hundreds of new Acts of Parliament and repeal hundreds of old
ones but invent and organize new Government departments; train and
employ no end of women and men as public servants." (Page 97).
"Socialism is from beginning to end a matter of law. It will
have to make idlers work." (Page 98).
"If you will encounter a lazy slut you will lambast him with a
stick until he is black and blue. If the slattern is to be whacked it
must be done by order of a court of law by an officer of the law after
a fair trial by law." (Page 99).
"Socialism insists that the first duty of the Government is to
maintain equality of income and absolutely denies any private right of
property whatever." (Page 101).
"Socialism, the equalization of income, involves the complete
substitution of personal for private property and of publicly
regulated contract for private contract with police interference
whenever equality is threatened, and complete regulation and control
of industry and its products by the State." (Page 103).
"Compulsory social service is so unanswerably right that the
very first duty of a government is to see that everybody works enough
to pay her way and leave something over for the profit of the country
and the improvement of the world." (Page 357).
"Socialism would impose compulsory social service on all
serviceable citizens just as during the war compulsory military
service was imposed on all men of military age." (Page 356).
"Socialism is an elaborate arrangement of our production and
distribution of wealth in such manner that all our incomes shall be
equal." (Page 377).
How is the State going to bring about this equal distribution of
wealth among all its citizens?
According to Shaw, "Practical Socialism must proceed by the
Government nationalizing our industies one at a time by a series of
properly compensated exporpriation after an elaborate preparation for
their administrators by a body of civil servants who will consist
largely of the old employees but who will be controlled and financed
by Government departments manned by public servants very superior in
average ability training and social dignity to the commercial
profiteers and financial gamblers who now have all our livelihoods at
their mercy." (Pages 382-383).
"Socialistic legislation means an active interference in the
production and distribution of the nation's income; and every step of
it will require a new department of extension of the civil service or
the municipal service to execute and manage it." (Page 384).
But halt. Even after the State shall be operating all business for
the benefit of all of us private business will still be in operation
according to Shaw.
"Long after Capitalism as we know it shall have passed away more
completely than feudalism has yet passed away there may be more men
and women working privately in business of their own than there ever
can be under our present slavish conditions." (Page 386).
In fact under Shavian Socialism "A Socialist Government should
not only tolerate private enterprise but actually finance it."
"In fact, if only we can attain and maintain the equality of
income a Socialist Government will tolerate private enterprise or
subsidise private enterprise, or even initiate private enterprise."
I have quoted from Shaw in extenso in fairness to him, and because I
believe that the veriest reading of his words will disclose their
Equality of any kind is impossible. Nature in unmistakable terms has
so decreed. In a world wherein no two grains of sand are alike or
equal it is against all natural and physchological law to advocate a
system wherein all men shall have equality of income.
Our goal should be to establish among human beings as nearly as may
be, equality of opportunity, realizing however, the great natural
differences between human beings. When we shall have established
equality of opportunity, we shall have done as much as may be
reasonably expected of finite beings.
How to do this has been clearly shown by Henry George, the greatest
economist the world has yet produced, in his works on Political
Economy, particularly Progress and Poverty and the Science of
Political Economy is the science which deals with the production and
distribution of wealth. No discussion ofj this subject can lead to
right conclusions which concerns itself only with one phase of the
subject, whether it be production or distribution.
This is the great defect of Shaw's book, that it deals exclusively
with the distribution of wealth and ignores how wealth is produced.
Obviously, before we can determine how wealth shall be distributed we
must clearly understand how it is produced.
The formula then should be: to those who have produced, shall belong
the wealth they have produced.
Now, all wealth is produced from the Earth, and from the Earth alone.
It is the application of human labor to raw material (Land) that give
us potatoes, automobiles, buildings, suits of clothes and the like.
No discussion of Political Economy can be worthy of the name which
fails to recognize the fundamental importance of Land as the source of
Capital does not produce wealth. Labor does not produce wealth. Land
does not produce wealth. Only the application of Labor to Land will
The trouble is that before Labor may have access to land to produce
wealth, it must pay tribute to landlords which tribute is called
Economic Rent. This latter term means the price exacted for mere
permission to use the bare Earth. In short, labor finds the bare earth
which the Supreme Power gave to all his children as a resorvoir from
which they might satisfy their needs, in the hands of a limited class
denominated the land owning class. Labor finds that before it can go
to work to produce its potatoes, automobiles, buildings and suits of
clothes, it must agree to pay over to land owners a share of the
wealth, it, Labor, will produce.
The portion of wealth which labor pays over to the land owners is
called Economic Rent. Now, this land owning class renders no service
to labor in producing wealth. Certainly it cannot be called a service
for land owners to allow labor to use the Earth. Economic Rent
therefore is that part of wealth which is taken from labor for mere
permission to work.
Now Rent is constantly increasing. This must be obvious when we
reflect that the earth we live on is fixed in quantity while the
pressure of population is making increasing demand on the natural
resources for food, clothing and shelter.
This constant increase in Rent is automatic. The land owners have
nothing to do with bringing it about. It is due solely to the
increasing pressure of population.
The Single Tax would socialize Economic Rent, in other words, make it
the common property of all mankind. When once this is done, the Earth
is, for all practical purposes, owned by all its inhabitants, since
they share equally in the enjoyment of its Rent. A somewhat similar
situation would arise if a loving father should desire to give his
seven story building equally to his nine children. If he provided that
the net profits of the building should annually be divided among them,
they could, in truth, say that they were equal owners of the building.
We propose to do the same with this Earth on which all of us live, and
from which all of us must draw our sustenance. We say to those having
possession of the Land "Keep it, use it, or not, as you wish, but
pay over to the community, annually, what it is worth for you to keep
your particular tract in your possession."
So far I have said nothing about Capital. This is the Big Ogre of
Shaw, and indeed of all Socialists. Now, to understand a thing, we
must be agreed to as to what we are talking about; in other words, we
must be agreed on our definition of the thing we are discussing.
Labor, I think, we are all agreed, is the application of human energy
to raw material. In its simplest forms, we may give as examples of
labor the planting of seed and the cultivation of the ground from
which finally comes fruits, vegetables, grain, etc., etc. Another
example; the digging of coal or ore out of the bowels of the earth,
the coal being relieved of its impurities and finally delivered to
users in a form suitable for burning in our fires, the ore being
finished into steel beams to form the frame work for our homes,
factories and office buildings. A third is the raising of cows, sheep
and other animals for their food, wool or leather or other products
needed by human beings.
Now, as society becomes more complex all labor need not be applied
directly to land to produce wealth. In fact, for the most efficient
production of wealth, it becomes advisable to find new methods to make
labor more productive. Inventions come into existence which render
Labor a thousand times, yes ten thousand times more productive than
otherwise would be the case. A machine is invented, for example, to
drop seed into the ground enabling the farmer to plant one hundred
acres where before he could plant only one acre.
First, the Wheelbarrow, then the Cart, then the Wagon, then the
Railroad, then the Automobile, then the Aeroplane, were invented,
enabling the man to carry himself and his products more speedily and
more efficiently than before. Machines of all kinds are invented to
enable the worker more efficiently to convert the raw cotten, silk and
leather (Raw Material) into the finished products (Dresses, Suits,
Shoes). The machine, in economics is termed "Capital."
In other words, Capital is that portion of wealth which, instead of
being immediately consumed is set aside to assist in the production of
more wealth. Capital is the creature of labor. It possesses certain
characteristics. First: it can be produced in illimitable amounts. If
we want more capital, all we have to do is to apply more labor to
Secondly: Like labor, capital must justify its existence. If the
machine cannot help labor to produce more wealth than labor could
produce without it, labor will dispense with the machine. Obviously,
the farmer is not going to use a machine to plant seed if he can do it
faster or better by hand. This is the same as saying that capital must
find its reward in the increased wealth which it, in association with
labor, has produced. To put it in other words, the wealth which labor
assisted by capital has produced must now be be divided between them,
labor receiving wages and capital receiving interest.
The trouble is, that before these two factors can divide the wealth
they have jointly produced, the landlord who has done nothing, comes
along and takes his Economic Rent. The wealth, which labor and capital
have produced must now be divided between three parties, although only
two have had any part in its production. It must be clear that the
bigger portion any one of the three, Labor, Capital or Land Lord
takes, the less that there Is left for the other two to divide between
Now, the land owner is constantly taking a bigger and bigger portion
of wealth, due to the fact that Economic Rent is constantly rising as
Labor and Capital therefore having less to divide between themselves,
take to fighting each other, (strikes and lockouts), instead of
fighting their common enemy the Land Owner. As conclusive proof that
the interests of labor and capital are not antagonistic as claimed by
Shaw and Socialists generally, we find that wherever and whenever
wages of labor are low the return of capital likewise is low.
True, capitalists are often land owners. That is, the same individual
who owns a business of making silk dresses may own the land on which
his factory stands, or other land, or shares of stock in a railroad or
telephone corporation owning land or possessing an exclusive
To the extent that this individual is running a factory to
manufacture silk dresses and hiring labor and buying machines, he is a
Capitalist. To the extent that he owns the land on which the factory
stands, or shares of stock in a corporation owning land or an
exclusive franchise, he is a land owner. Only in his capacity as land
owner is he reaping where he has not sown.
The same is true of labor. Very often, in the United States at least,
the wage earner owns his little home and the lot on which it stands,
or he holds one or two shares of stock in some public utility
corporation, or is himself trying to speculate in a piece of vacant
ground. So far as the ownership of the house is concerned he is also a
capitalist; so far as the ownership of the lot on which the house
stands is concerned he is a land owner.
Shaw's great mistake Is in failing to distinguish between Capitalism
and Land Lordism. In no other way can he be excused for such erroneous
statements a* the following:
"By Capitalism we mean the system by which the land of the
country is in the hands, not of the Nation, but of private persons
called Landlords, who can prevent anyone from living on it or using it
except on their own terms." (Page 100).
"Capitalism therefore means the only duty of the Government is
to maintain private property in Land and Capital." (Page 101).
Landowners "are quite justified in making the strongest laws to
protect themselves against having their land intruded on and their
crops taken by rascals who want to reap where they have not sown."
"Capitalists failed to find employment for not less than two
million demoblized soldiers who had for four years been not only well
fed and clothed but trained in the handling of weapons." (Page
"By letting their (Capitalists) land and hiring out their spare
money (Capital) to others." (Page 165).
"Similarly, when there is a difference between the business
of one person and another, the price of that difference is rent. "
"Privately appropriated rent, whether of land, capital or
ability, makes bad blood." (Page 343),
If Shaw, as we contend, is in error in condemning Capital and
Capitalism, instead of Monopoly and Landlordism and if the interests
of capital and labor are not antagonistic, it ought to follow that
when labor is receiving a low wage for its exertions, capital should
be receiving a low return on its investment.
And such is indeed the case as I shall now show.
The biggest department store in New York City, R. H. Macy & Co.,
last year did a gross business of $82,200,000. Its net profits were
The total sales of the largest meat packers in the United States,
Swift & Co., last year amounted to over $925,000,000. The net
earnings were $12,200,000.
The American Telephone and Telegraph Company received revenues last
year amounting to $894,600,000. The net earnings were $103,000,000 or
at the rate of 6.4% of the amount invested in plant and other assets.
United States Steel Corporation did a business of $1,310,000,000 and
its net income was only $105,000,000.
The Pennsylvania Railroad's operating revenues last year amounted to
$664,000,000. and the net income was $68,000,000, and $43,000,000 ot
this was dividends and interest from securities owned by the railroad.
In other words, out of its own operating revenues the road earned only
Who will say that any of these corporations have not rendered
services entitling them to the comparatively small reward they have
received as above set forth.
Shaw has indeed labored, but he has not brought forth even a mouse.