MILL AND ECONOMIC POLICY
In several important respects, Mill's attitude towards questions of economic policy departed substantially from the positions that had characterized orthodox classicism. Perhaps his sharpest break with orthodoxy concerned the economic role of the state.
Mill's frame of reference contained at least the outlines of a more active programme of state intervention in economic life than his predecessors would have tolerated. In the first instance he emphasized the economic importance of the state as a 'civilizer' - i.e. as the sponsor of improved educational facilities, as well as such cultural amenities as parks and museums. Elevation in popular tastes and aspirations, especially among members of the working class, was vital to the banishment of the Malthusian devil and to the exercise of human control over the distribution of income. Nevertheless, like his classical forebears, Mill was critical of the administration of poor relief on the ground that it had unfortunate effects on the mobility of the labour force and on its allocation to socially most effective uses.While pursuing their civilizing mission, governments could also perform a significant stabilizing function. Mill, in his revisionist analysis of the onset of the stationary state, had held that falling rates of profit were likely to be associated with speculative rashness which in turn led to unintended wastages of capital. How much better the outcome would be, he maintained, if the state taxed an increasing share of potentially investible funds and used its receipts to finance socially beneficial projects. In this fashion two worthwhile purposes would be served simultaneously: deterioration in rates of return on private capital would be slowed and the volatility of the economic system dampened. But this technique was not the only one available for slowing reductions in the rate of profit as the stationary state was approached.
If part of domestic savings were channelled into overseas investment, the erosion of home rates of profit would be slower than would otherwise have been the case. The results would be doubly beneficial if capital exports were directed into the development of low-cost sources of food and raw materials required in the lending country. This interpretation of capital export has much in common with the analysis of imperialism as a prop to the capitalist order that was later devised by Hobson and Lenin.Mill also placed himself outside the classical mainstream in his attitudes toward private property. Existing social institutions he regarded as 'merely provisional', though he reached this position only after a struggle against his early beliefs. In his personal summing up he recorded:
We were now much less democrats than I have been, because so long as education
continues to be so wretchedly imperfect, we dreaded the ignorance and especially the selfishness and brutality of the mass: but our ideal of ultimate improvement went far beyond Democracy, and would class us decidedly under the general designation of Socialists. While we repudiated with the greatest energy that tyranny of society over the individual which most Socialist systems are supposed to involve, we yet looked forward to a time when society will no longer be divided into the idle and the industrious; when the rule that they who do not work shall not eat, will be applied not to paupers only, but impartially to all; when the division of the produce of labour, instead of depending, as in so great a degree it now does, on the accident of birth, will be made by concert on an acknowledged principle of justice; and when it will no longer either be, or be thought to be, impossible for human beings to exert themselves strenuously in procuring benefits which are not to be exclusively their own, but to be shared with the society they belong to.20
Despite his sympathy for social change, Mill did not work out carefully the details of a future and happier order of society. But one point was at least clear: his version of socialism was not one in which the state would play a commanding role. He thought more in terms of voluntary cooperative arrangements and of co-partnerships between capital and labour.