Theories of Rent

This chapter examines the Fabians' rejection of Marxist economics for theories arising in the wake of the collapse of classical economics. Far too many historians have caricatured the Fabians as bureaucratic elitists who were inspired by utilitarianism and classical political economy. Even when historians look more seriously at the beliefs of the Fabians, they generally argue that the Fabians adopted a reformist socialism based on a shared theory of rent derived from the classical liberalism of David Ricardo. In their view, this theory of rent blurred the distinction between classes, making it possible, first, to equate socialism not with ending capitalism but with taxation of unearned increment for the benefit of society and, second, to reject a revolutionary politics in favor of parliamentary gradualism and the permeation of bourgeois parties. However, the leading Fabians actually held different economic theories. They owed less to utilitarianism and classical political economy than to ethical positivism and neoclassical and marginal economic theories. Insofar as there is a distinctive Fabian socialism, it derives not from a shared theory of rent but from a shared endeavor by ethical positivists and liberal radicals to respond to the crisis of faith and especially the collapse of classical economics.