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 Cornell University Library 
 HX276 .S29 1891 
 
 The quintessence of socialism 
 
 olin 
 
 3 1924 030 342 897 
 
Cornell University 
 Library 
 
 The original of this book is in 
 the Cornell University Library. 
 
 There are no known copyright restrictions in 
 the United States on the use of the text. 
 
 http://www.archive.org/details/cu31924030342897 
 
THE 
 
 QUINTESSENCE OF SOCIALISM 
 
 v^ 
 
 V BY 
 
 Dr. A. SCHAFFLE 
 
 ENGLISH EDITION 
 
 TRANSLATED FROM THE EIGHTH GERMAN EDITION 
 UNDER THE SUPERVISION OF 
 
 BERNARD BOSANQUET, M.A. 
 
 FORMERLY FELLOW OF UNIVERSITY COLLEGE, OXFORD 
 
 THIRD 
 
 EDITION 
 
 LONDON cj\\ V '\ 
 
 SWAN SONN^NSCHEIN & CO. ""<^""\ 
 PATERNOSTER SQUARE Id 
 
 1 891 
 
 ■t/ 
 
 
: UNIVERSITY! 
 LIBRARY 
 
 FEINTED BY 
 
 HAZELL, WATSON, AND VINEY, ID,, 
 
 LONDON AND ATLESBUET. 
 
PREFACE TO THE ENGLISH 
 EDITION. 
 
 DR. SCHAFFLE'S " Quintessenz des 
 Socialismus " is referred to by M. de 
 Laveleye (" Socialism of To-day," Eng. tr., p. 
 260) as the only publication, of which he is aware, 
 that explains the scheme of collectivism - and 
 treats it in a scientific way. 
 
 Dr. Albert Schaffle, former minister of finance 
 in Austria, and author of " Bau und Leben des 
 Socialen Korpers," and other important works, 
 is one of the most eminent of German 
 economists. His " Quintessence," though 
 popular in form, is the work of a thorough 
 expert, and is even now, to the best of my 
 knowledge, the clearest account of Socialism 
 that can be obtained in anything like the same 
 
iv PREFACE TO THE ENGLISH EDITION. 
 
 compass. The author's criticisms are distinctly 
 separated from his description, so that his 
 private views can be allowed for by the reader. 
 The pamphlet is now presented to the English 
 public in the spirit in which the opening pages 
 declare it to have been written, — " Truth before 
 all things ! " 
 
 BERNARD BOSANQUET. 
 
PREFACE TO THE FIRST GERMAN 
 EDITION. 
 
 THE following pages first appeared in 
 1874 in Deutsche Blatter, and were 
 written at the express wish of the Editors of 
 that magazine for the purpose of laying before 
 a mixed public (consisting largely of theo- 
 logians) a scientific and yet popular picture of 
 the economic consequences of the newest form 
 of Socialism. The work attracted some atten- 
 tion when it appeared in Deutsche Blatter, and 
 it is by the wish of the Publishers that it is 
 offered in its present form to a wider circle of 
 readers. In this form it contains but few 
 alterations, which have been made for the sake 
 of greater clearness, the chief of which is a 
 more careful arrangement of the matter. Its 
 actual contents needed no modification. 
 
PREFACE TO THE EIGHTH 
 GERMAN EDITION. 
 
 THIS Edition again contains no material 
 alteration in the eight main divisions 
 of the work. But the conclusion (ch. ix.) 
 contains a few fresh explanations, which have 
 been rendered necessary by the advance which 
 has been made since the appearance of the last 
 edition towards a policy of positive Socialism, 
 and by my own scientific participation in the 
 movements connected with it. 
 
 A. SCHAFFLE. 
 
CONTENTS. 
 
 CHAP. PAGE 
 
 I. FIRST OUTLINES OF THE FUNDAMENTAL IDEA OF 
 
 SOCIALISM I 
 
 II. THE MEANS OF AGITATION. 
 
 The Socialistic criticism of capital. — Profit as " ap- 
 propriation of surplus-value." — Property as theft. — 
 False interpretations of these allegations refuted. — 
 Ultimate buying-out of the modern plutocrats . . 20 
 
 III. PROPOSED TRANSFORMATION OF THE SEVERAL 
 
 FUNDAMENTAL INSTITUTIONS OF MODERN 
 NATIONAL ECONOMY. 
 
 Determination of demand. — Freedom of demand. — 
 Organization of labour and capital into a system of 
 collective production. — False interpretations refuted. 
 — The doctrine of value as depending on sheer labour- 
 cost useless for a practical organization of labour and 
 capital 39 
 
 IV. TRANSFORMATION OF INSTITUTIONS (continued). 
 
 Abolition of all loan-capital, of credit, of lease, of 
 hire, and of the exchange , 64 
 
CONTENTS. 
 
 V. TRANSFORMATION OF INSTITUTIONS {continued'). 
 
 Abolition of trade in "commodities," and of the 
 market for them, and of the system of advertisement 
 and display of wares 69 
 
 VI. TRANSFORMATION OF INSTITUTIONS (continued). 
 
 Abolition of metallic money as the medium of ex- 
 change, and its replacement as " standard of value " 
 by units of "social labour-time " (" labour-money "), 
 The value-estimate of the Socialistic State compared 
 with the present market-price 77 
 
 VII. TRANSFORMATION OF INSTITUTIONS (continued). 
 
 The Socialistic determination of value in exchange, 
 and freedom of labour in the Socialistic State . . 90 
 
 VIII. TRANSFORMATION OF INSTITUTIONS (continued). 
 
 Income, and the use of income in the formation of 
 property, and in consumption. — Private property and 
 the law affecting it. — Family life and marriage. — 
 Savings-banks and insurance system. — Expenditure 
 on charitable, humanitarian, religious, and other ideal 
 purposes . . 97 
 
 IX. CONCLUSION. 
 
 Summary of criticisms . . , , , .120 
 
SOCIALISM. 
 
 i. 
 
 INCE the last elections to the German 
 Diet, the " red spectre " of Socialism 
 has found its way into every ale- 
 house. But it is remarkable that not only in 
 the world of the pot-house orators, but far up 
 in the ranks of the "propertied and cultured 
 classes," and to a great extent among the sup- 
 porters of socialism themselves, the kernel and 
 aim of the socialistic propaganda is still almost 
 unknown. We have daily evidence that an 
 absurd amount of false representations, of ex- 
 aggerated fears, and of no less immoderate 
 hopes, grows rankly in this field of enquiry. 
 Not only those who oppose and scorn the new 
 gospel, but also even many of those who are 
 
SOCIALISM. 
 
 believers in it, have themselves no true idea, 
 often not even the most distant conception, of 
 what it really is that they fear or detest, that 
 they despise or extol to the clouds. 
 
 In view of the confused state of public 
 opinion on this subject, the first thing we need 
 is, obviously, a precise knowledge of the essence 
 and aim of the socialistic reconstruction of 
 society, and especially the exposure of these 
 misleadingly false representations, and the dis- 
 persion of this self-deceptive ignorance. It is 
 the object of the following " Quintessence of 
 Socialism" to increase the sum of accurate 
 knowledge in this field. We hope that many 
 readers of " Deutsche Blatter" will be obliged 
 to us for a clearly defined picture of this 
 subject, even though the substance of our 
 account may cause them a certain amount of 
 unpleasant surprise. At any rate, we believe 
 ourselves qualified to afford enlightenment on 
 the matter, as a result of comprehensive and 
 thoroughly unprejudiced studies. If we are 
 mistaken in our judgment, at any rate we do 
 not wittingly deceive ourselves. Truth before 
 all things ! 
 
 Let us go at once to the heart of the move- 
 
SOCIALISM. 
 
 merit. We will first concentrate our attention 
 on the economic kernel of socialism, setting 
 aside for the moment the transitory aspect it 
 bears in the hands of agitators, its provisional 
 passwords, and the phenomena and tendencies 
 in politics and religion by which it is accom- 
 panied. 
 
 The question is undoubtedly one of econo- 
 mics; it is primarily, at any rate, a question of 
 the stomach ; it is the result of a fundamental 
 revolution in the organisation of the social 
 circulation of products, an economic pheno- 
 menon which grew out of the destruction of 
 the system of small producers and small traders. 
 And, in consequence, the socialistic movement, 
 as is admitted on all sides, is primarily directed 
 towards a fundamental transformation of the 
 existing industrial system. 
 
 The economic quintessence of the socialistic 
 programme, the real aim of the international 
 movement, is as follows. 
 
 To replace the system of private capital (i.e. 
 the speculative method of production, regulated 
 on behalf of society only by the free compe- 
 tition of private enterprises) by a system of 
 collective capital, that is, by a method of 
 
SOCIALISM. 
 
 production which would introduce a unified 
 (social or "collective") organization of national 
 labour, on the basis of collective or common 
 ownership of the means of production by all 
 the members of the society. This collective 
 method of production would remove the present 
 competitive system, by placing under official, 
 administration such departments of production 
 as can be managed collectively (socially or co- 
 operatively), as well as the distribution among 
 all of the common produce of all, according to 
 the amount and social utility of the productive 
 labour of each. 
 
 This represents in the shortest possible 
 formula the aim of the socialism of to-day, 
 however variously expressed, and in some 
 cases obscurely conceived, may be the proposed 
 methods for attaining it. 
 
 Instead of the present state of things, in which 
 everyone who possesses capital freely (priva- 
 tim) undertakes a part of the. entire national 
 production for his own private interest, and is 
 socially influenced only by what we may call 
 the hydrostatic counter-pressure of all the other 
 competitors for profit, we should have in the 
 socialistic state the instruments of all the 
 
SOCIALISM. 
 
 production and distribution of wealth (that is, 
 capital, the totality of instruments of production) 
 in the completest sense the common property 
 of the whole community, whose collective organ- 
 ization would on the one hand associate all 
 the individual and separate labour-forces in 
 social labour-groups (" collective labour"), and 
 on the other would distribute the wealth 
 produced by this social co-operation according 
 to the proportion of work performed by each 
 individual. Private business, individual enter- 
 prise, would be no more. The productive 
 labour of all would be associated in establish- 
 ments for the purposes of production and 
 exchange, socially managed, equipped out of 
 collective capital, and worked by persons in 
 receipt of salaries, not of private profits and 
 of wages. The amount of supply necessary in 
 each form of production would be fixed by 
 continuous official returns, furnished by the 
 managers and overseers of the selling and 
 producing departments, and would form the 
 basis of the budget of social production. The 
 temporary deficit or overplus of the actual 
 produce, as compared with the estimated require- 
 ment of each period, would be from time to time 
 
SOCIALISM. 
 
 re-adjusted by means of reserve stores, which 
 would then be public, and not private, ware- 
 houses. This is undoubtedly the general outline 
 of the meaning of collectivism, as contradistin- 
 guished from capitalism, the quintessence of 
 the public organization of labour in contrast to 
 what is called the competitive anarchy of to- 
 day ; under which (according to the socialists) 
 the great work of social interchange of products, 
 the machinery of social production and distribu- 
 tion, represents no consciously systematised 
 social function, but is abandoned to the play 
 of "anarchical" competition, and the race of 
 private greed after the biggest share of the 
 spoil. 
 
 The leaders of the international movement, 
 especially Karl Marx, in his bitingly critical and 
 undeniably clear-sighted work " Das Kapital,"* 
 are, it is true, very cautious in enunciating their 
 positive programme : but every intelligent 
 reader and logical thinker will recognize in the 
 above statement the fundamental idea and aim 
 of socialism. This much, at any rate, is clear 
 
 * Up to the present time (1885), only one volume has 
 appeared [Vol. II. appeared in 1885]. 
 
SOCIALISM. 
 
 from the sweeping criticism passed by socialists 
 on the existing private capitalistic system of 
 industrial society. It is evident also from the 
 theories of socialistic science on labour as the 
 fundamental factor in value ; on the future 
 regulation of private income by the labour-time 
 bestowed in social production ; on the abolition 
 of the present use of money ; and so forth. And 
 finally, this fundamental view can be extracted 
 from the positive programmes for the socialistic 
 reconstruction of industrial society, so far as 
 any such have been developed or indicated by 
 thoughtful leaders of the movement. Critically, 
 dogmatically, and practically, the cardinal thesis 
 stands out — collective instead of private owner- 
 ship of all instruments of production (land, 
 factories, machines, tools, etc.); "organization 
 of labour by society," instead of the distracting 
 competition of private capitalists ; that is to 
 say, corporate organization and management of 
 the process of production in the place of private 
 businesses; public organization of the labour 
 of all on the basis of collective ownership of 
 all the working materials of social labour ; and 
 finally, distribution of the collective output of 
 all kinds of manufacture in proportion to the 
 
SOCIALISM. 
 
 value and amount of the work done by each 
 worker. The producers would still be, indi- 
 vidually, no more than workmen, as there would 
 no longer be any private property in the instru- 
 ments of production, and all would in fact be 
 working with the instruments of production 
 belonging to all, i.e., collective capital. But they 
 would not be working as private manufacturers 
 and their workmen, but would all be on an 
 equal footing as professional workers, directly 
 organized, and paid their salary, by society as 
 a whole. Consequently, there would no longer 
 exist in future the present fundamental division 
 of private income into profits (or in some cases 
 the creditor's share, by way of interest, in the 
 profit of the debtor) and wages, but all incomes 
 would equally represent a share in the national 
 produce, allotted directly by the community in 
 proportion to work done, that is, exclusively 
 returns to labour. Those who yielded services 
 of general utility as judges, administrative 
 officials, teachers, artists, scientific investiga- 
 tors, instead of producing material commodities, 
 i.e., all not immediately productive workers, 
 all not employed in the social circulation of 
 material, would receive a share in the com- 
 
SOCIALISM. 
 
 modities produced by the national labour, pro- 
 portioned to the time spent by them in work 
 useful to the community. 
 
 The reader who has never closely examined 
 this revolutionary plan of social organisation 
 will find it almost inconceivable. It has taken 
 the writer years to familiarize himself with the 
 idea. 
 
 And yet this scheme is already supported 
 by a party which surpasses many other great 
 parties in fiery zeal, in inspiration, in the " faith 
 which removes mountains," in strength of 
 organization, and in international expansion, 
 a party which is ever gaining proselytes, and 
 which faces the future in confident expectation 
 of victory. It is therefore worth while for 
 everyone to gain at least such an insight into 
 the principles antagonistic to the existing social 
 system as will enable him to understand his op- 
 ponents. It will thus be necessary to give some 
 further explanations of the fundamental idea of 
 socialism given above. Before we can enter 
 on an effective contest with an important adver- 
 sary, we must be sure that we know accurately, 
 without prejudice, and without adulteration, 
 what he wants and as a consequence of his 
 
SOCIALISM. 
 
 principles cannot help wanting. And to do 
 this we must ignore the subjective follies of hot- 
 headed partisans, in so far as they are merely 
 accidents that do not necessarily issue from the 
 premiss, and must confine ourselves to what 
 necessarily springs out of the main principle, and 
 moreover to the most thoughtful and reason- 
 able formulation of the new principle. And this 
 is just now the more possible as there is no 
 immediate likelihood of the realisation of the 
 " new faith " of the working-men. 
 
 In this purely objective sense, and avoiding 
 all unessential side-issues, we address ourselves 
 to the subject. 
 
 In the attempt to give a thoroughly graphic 
 representation of the positive system which is 
 the aim of socialism, we are met of course at 
 once by serious difficulties. 
 
 There are a number of catch-words, which 
 are of only transitory significance, the outcome 
 of emergencies of agitation, and emanating only 
 from subordinates among the party-leaders ; 
 these do not furnish us with an authoritative 
 exposition of doctrine. The old fantastic 
 schemes of C. Fourier and others, though 
 supported by reasoning which contains all the 
 
SOCIALISM. 
 
 main ideas of present-day socialism, no longer 
 form part of its programme. The collectivism 
 agitated for to-day is no longer the fantastic 
 thing aimed at by the Fourierists and St. 
 Simonists ; it has undoubtedly grown much 
 more sober, but is not yet, even among its 
 influential partisans, quite clearly defined. It 
 has even in many cases come to terms with 
 the modern individualistic liberal system. 
 Lassalle himself did this in all his positive 
 proposals, and therefore Karl Marx rejected 
 Lassalle's proposals ; for instance, his associa- 
 tion for production aided by State credit.* 
 
 As to their positive goal, the system which 
 would result from the principle of a collective 
 capital instead of the present competition of 
 many capitals, the most clear-sighted leaders 
 of the movement, and especially Karl Marx, 
 speak with extreme caution and great political 
 sagacity. They do this advisedly. Probably 
 not one of them doubts that the agitation for 
 
 * Evidently because this association or group, if it under- 
 took to carry on the business of social production in- 
 competition with many other isolated businesses, would 
 remain absolutely at the same standpoint as the present 
 system of production. 
 
SOCIALISM. 
 
 a collectivist reconstruction of society is still 
 far from its goal, that it is only in its earliest 
 stages, in which the principal requirement is 
 negative criticism of the existing state of things, 
 and the rousing of the masses by means of 
 certain rallying words. They know very well 
 that the present system of production must 
 first have produced its final practical con- 
 sequence in the complete absorption of small 
 property, that it must have nearly completed 
 the plutocratic process of dividing the nation 
 into an enormous proletariat on the one side 
 and a few millionaires on the other, before 
 the masses, and especially the country popula- 
 tion and the small tradesmen, can and will 
 accept the principle of collectivism. In 
 Germany, and especially in the country districts, 
 this development is far from being complete. 
 Although in the towns (e.g. Paris and Carta- 
 gena), the proletariat is already handling 
 firearms, the leaders know well that these 
 are only the first outpost skirmishes of the 
 later class-war, from which they expect the 
 complete transformation of the present system 
 of private into that of collective capital. And 
 when that time comes, the conditions then 
 
SOCIALISM. 13 
 
 prevailing would decide on many of the details 
 of flie positive programme. The reserve they 
 show in announcing their positive programme 
 is therefore not surprising ; all skilful party 
 leaders have acted thus in similar stages of 
 agitation. 
 
 The resumd which Karl Marx gives at the 
 end of his critique on Capital* is in every 
 respect the most definite and significant state- 
 ment we have. 
 
 He shows how the large-capital system of 
 to-day arose out of the destruction of those 
 forms of small ownership (among the craftsmen 
 and peasantry) in which labour and private 
 property were really united, the actual workman 
 being also owner of his tools and of the pro- 
 duce of his work. This essentially true form 
 of private ownership, in which the worker was 
 the free possessor of the working materials he 
 handled, the peasant of the land he cultivated, 
 the artisan of the tools with which he was 
 a skilled performer, — this kind of ownership 
 of the means of production, though useful in 
 its time, because so essentially true, had, how- 
 
 * " Das Kapital," vol. i., p. 788,/. [E. Tr. p. 786/]. 
 
14 SOCIALISM. 
 
 ever, one great drawback, namely, the minute 
 subdivision of the means of production, which 
 made it a pigmy system and extremely unproduc- 
 tive. In consequence of this defect, this kind 
 of small ownership was bound to disappear, and 
 the small remnants of it which exist are rapidly 
 disappearing ; it was bound to yield to the 
 superior power of large agricultural and indus- 
 trial capitals. " Self-earned private property, 
 that is based, so to say, on the fusing together 
 of the isolated, independent labouring-individual 
 with the conditions of his labour, is supplanted 
 by capitalistic private property, which rests on 
 the exploitation of the nominally free labour of 
 others, i.e., on wages-labour." 
 
 He goes on to show how, as soon as this 
 transformation, which brings about the destruc- 
 tion of small industries and of the peasant- 
 class, has sufficiently decomposed the old 
 society from top to bottom, as soon as the 
 once independent workman has become a pro- 
 letarian, i.e. a worker without means of produc- 
 tion of his own, these being all swallowed up 
 in the large capitals of modern times — the 
 crusade of capital goes further ; and we have in 
 the next stage of development the large capitalist 
 
SOCIALISM. 
 
 attacking the smaller. With the ever-increasing 
 concentration of the means of production in large 
 businesses, " one capitalist always kills many. 
 Hand in hand with this centralisation, or this 
 expropriation of many capitalists by few, 
 develop, on an ever-extending scale, the co- 
 operative form of the labour-process, the 
 conscious technical application of science, the 
 methodical cultivation of the soil, the transfor- 
 mation of the instruments of labour into instru- 
 ments of labour only usable in common, and 
 the economising of all means of production by 
 their use as the means of production of com- 
 bined socialised labour." 
 
 Further, he shows how with the constantly 
 diminishing number of the magnates of capital 
 who usurp and monopolize all the advantages of 
 this transformation process, we have " a grow- 
 ing mass of misery, oppression, slavery, degra- 
 dation, exploitation ; but with this too grows 
 the revolt of the working class, a class always 
 increasing in numbers, and disciplined, united, 
 organised, by the very mechanism of the pro- 
 cess of capitalist production itself. The mono- 
 poly of capital becomes a fetter upon the 
 mode of production, which has sprung up and 
 
16 SOCIALISM. 
 
 flourished along with, and under it." And 
 then " the knell of capitalist property sounds. 
 
 " The expropriators are expropriated. The 
 capitalist mode of appropriation, the result of 
 the capitalist mode of production, produces 
 capitalist private property. This is the first 
 negation of individual private property, as 
 founded on the labour of the proprietor. But 
 capitalist production begets, with the inexor- 
 ability of a law of Nature, its own negation. 
 It is the negation of negation. This does not 
 re-establish private property for the producer, 
 but gives him individual property based on the 
 acquisitions of the capitalist era ; i.e., on the 
 co-operation (of free-workers) and the posses- 
 sion in common of the land and of the means 
 of production. 
 
 " The transformation of scattered private 
 property, arising from individual labour, into 
 capitalist private property, is, naturally, a 
 process incomparably more protracted, violent, 
 and difficult, than the transformation of capital- 
 istic private property, already practically resting 
 on socialised production, into socialised property. 
 In the former cases we had the expropriation 
 of the mass of the people by a few usurpers ; 
 
SOCIALISM. 17 
 
 in the latter, we have the expropriation of a 
 few usurpers by the mass of the people." 
 
 Could it be more clearly stated ? These 
 significant passages tell us as clearly as whole 
 volumes could do the critical as well as the 
 express positive message of socialism. 
 
 They show first how clearly the new move- 
 ment recognizes its general aim, its dependence 
 upon the present plutocratic development of 
 society, the inevitable growth of its resources, 
 and the purely preparatory character of the 
 present stage of its agitation. The leaders of 
 the proletariat reckon, more than on any 
 agitation, on the fact that the mechanical system 
 of large industries, and the whole centralising 
 tendency of the time, are themselves disciplining 
 the proletariat and concentrating its political and 
 social force. Although they do not approve the 
 political concentration of labour by the mechan- 
 ism of universal enforced military service, yet 
 in the long run they find in it no obstacle : the 
 leaders can afford to regard it as a training-school 
 which in the long run is anything but dangerous 
 to socialism, which drills its future soldiers, and 
 must end by awakening discontent on financial 
 grounds. Everything which trains the masses 
 
 2 
 
18 SOCIALISM. 
 
 as a whole, which centralizes, which brings about 
 a public union of individual forces on the largest 
 possible scale, is very closely allied to socialism. 
 The passage quoted shows how very clearly 
 and calmly it counts upon the education afforded 
 by the modern capitalistic and political system. 
 Let not the opposite side then reckon on the 
 bayonet, or on that political centralisation 
 which socialism itself will eventually be bound 
 to use as the most appropriate and effective 
 means of its first introduction. 
 
 However, in quoting the above passage, we 
 only wished to come at once to the quintessence 
 of socialism. 
 
 From the last quotation we now see clearly 
 why socialism is in no hurry to pass from the 
 critical stage to that of its positive programme — 
 it says and knows that the preliminary process 
 is long, severe, and difficult. But in the 
 second place we also see quite plainly what its 
 ultimate goal is. It is explained in this authori- 
 tative and decisive passage from the masterwork 
 of socialism, that its aim and endeavour will 
 be to transform the existing system of private 
 capital, which is already bound up with co- 
 operative social labour, into the common pro- 
 
SOCIALISM. 19 
 
 perty of the co-operating labourers, into " the 
 property of the whole community," into collec- 
 tive capital. But out of this one main positive 
 idea we can with more certainty gauge the 
 whole positive construction of the socialistic 
 state of the future than a naturalist can deduce 
 from the skull of an extinct form of animal 
 the whole structure of the lost species. In 
 carrying out this construction we shall be 
 further assisted by other socialistic theories 
 (for instance, that of value), and by the larger 
 though chiefly hypothetical admixture of posi- 
 tive ideas in the criticism of capital. The 
 picture drawn in the following pages of the 
 positive contents of socialism, although not 
 given in precisely the same outlines as socialists 
 give it, is yet the strictest logical outcome of 
 their critical and positive principles, and the 
 result of a careful comparison of all the social- 
 istic literature within my reach. 
 
II. 
 
 [EFORE we follow out the detailed 
 consequences of the collectivist prin- 
 ciple, let us repeat once again that 
 the Alpha and Omega of socialism is the trans- 
 formation of private and competing capitals into 
 a united collective capital. It will be well first 
 to explain a little more clearly the import of 
 this primary condition out of which all the 
 rest naturally develops itself. 
 
 Let us first enquire how this transformation 
 is conceived of. 
 
 As regards the time at which it will be 
 effected, the leaders of the movement can 
 obviously entertain no very sanguine hopes. 
 The many thoughtful and clear-sighted leaders 
 of the proletariat can scarcely believe that the 
 definite triumph of their cause lies in the near 
 future, or even in the present century. Their 
 immediate efforts and expectations must be 
 
SOCIALISM. 21 
 
 directed exclusively towards the acquisition of 
 political power, towards further " training " of 
 the masses in concerted action, towards ex 1 
 tended denunciation of the present property- 
 system, with all its swindling and other abuses, 
 and towards the final pauperistic consummation 
 of the contrast between the few millionaires and 
 the many millions of proletarians. 
 
 The immediate aim of the agitators consists 
 in party-organization, in spreading the desire 
 for material improvement among the masses, 
 in the exposure of the fraudulent system of 
 speculation, and the scandals that attend 
 panics ; in discrediting all traditional authority 
 (in the struggle between Church and State 
 socialism is openly and visibly a genuine 
 tertius gaudens /) ; in pressing into the service 
 of the social propaganda all centralising tenden- 
 cies in the State, in trade and intercourse, and 
 in journalism. 
 
 The spread of productive co-operation would 
 not be, it is true, in principle a socialistic 
 organization ; for associations of this type would 
 still be only competitive businesses, the latest 
 development of the capitalistic principle. But 
 this would not be prejudicial to socialism ; for 
 
SOCIALISM. 
 
 such associations are organically more akin to 
 collectivism, and therefore at a later stage will 
 lend themselves to the introduction of socialism 
 better than private businesses will do. Similarly, 
 profit-sharing is not in itself a socialistic 
 arrangement, but it is a move in the direction 
 of collective ownership. All this brings grist 
 to the socialist mill, but it does not represent 
 the ultimate goal of the movement. This we 
 state emphatically, because it explains why at 
 present the political enfranchisement of the 
 masses, agitation, spread pf_the_materialistic 
 conception of Jife, criticism of the swindling 
 system of speculation, and even the compromise 
 which accepts State encouragement of produc- 
 tive co-operation, and of other similar move- 
 ments, form at the present stage the actual work 
 of the movement, and this wisely, and without 
 incurring detriment by any sacrifice of principle. 
 One further preliminary remark must be 
 made on the unanimous critical polemic against 
 capital, or the private system of production, 
 which is peculiar to socialism : without ex- 
 planation on this head the language of socialists 
 would be unintelligible. For the criticism of 
 capital is the main instrument of intellectual 
 
SOCIALISM. 23 
 
 preparation employed by the movement in 
 its present stage. 
 
 Now here we find that among the socialists 
 the present system of private property in capital 
 is represented as " Robbery." 
 
 But it is a great though very widely spread 
 misunderstanding to interpret Proudhon's 
 words "Property is Robbery" to mean that the 
 socialist regards all propertied persons as 
 thieves in the criminal sense of the word, and 
 ranks the most honourable trader side by side 
 with the persons who appropriate other people's 
 belongings by the aid of dark lanterns and 
 false keys. 
 
 Nothing can be more mistaken than this 
 interpretation of the words, which make many 
 persons regard communism as condemned on 
 the very face of it. The real meaning of the 
 assertion that capital, i.e. the private capital 
 of to-day, is robbery, or, as Lassalle says, 
 " Fremdthum" * namely, that it represents an 
 anarchical form of property, and must be super- 
 
 * [Property is Eigen-thuxa, eigen meaning " one's own." 
 Lassalle calls it " Fremd-ihara," replacing the word " own " 
 by the word "alien." Not meum but tuum, or rather 
 aliennni\. 
 
24 SOCIALISM. 
 
 seded by the true form based on labour, is, 
 as every thinker clearly sees, a very different 
 thing ! 
 
 We find the essence of the socialistic criticism 
 of property most clearly brought out by Karl 
 Marx, the most authoritative leader and thinker 
 of the proletariat. He begins by showing that 
 the mass of private capital inherited from early 
 times rests originally on conquest, the disposses- 
 sion of former owners, confiscation of peasant 
 farms, plundering of colonies, abuse of political 
 power, protective duties, division of secularized 
 ecclesiastical property, and so on ; but he does 
 not charge Peter or Paul, the actual inheritor 
 of the property to-day, with robbery. Nor is 
 he much concerned to pronounce judgment on 
 those ancient forms of " the original accumula- 
 tion of capital;" and he also deals very cursorily 
 with that latest form of capital plunder, which is 
 amassed by stock-exchange corruption, parlia- 
 mentary jobbery, and newspaper bribery. He' 
 rather examines the process of the formation of 
 capital, which is the only form possible under 
 the present recognized economic system, and is 
 therefore under present circumstances normal, 
 perfectly legal, and wholly unavoidable. , 
 
SOCIALISM. 
 
 Now Marx maintains that the mass of 
 invested capital which is forming and increasing 
 in the present day arises out of the returns on 
 capital, and is saved out of employers' profits, 
 and not out of wages. This is no doubt true. 
 He further recognises fully that every capitalist 
 who wishes to hold his own in the "anarchical" 
 social system of competition of which he forms 
 a part, must take his share of the accretions to 
 capital from profits ; otherwise he would himself 
 come to grief, and lose his position. He says 
 plainly : " My standpoint, from which the 
 evolution of the economic formation of society 
 is viewed as a process of natural history, can 
 less than any other make the individual respon- 
 sible for relations whose creature he socially 
 remains, however much he may subjectively 
 raise himself above them." * 
 
 Marx is therefore far from regarding acqui- 
 sition of capital as robbery in the subjective 
 sense, or demanding from any capitalist who 
 has to work on the basis of the existing system 
 that he should cease to struggle for the highest 
 profits, and the utmost possible accumulation of 
 
 * " Das Kapital," Vorrede, p. ix. [E. Tr. p. xix.J 
 
26 SOCIALISM. 
 
 capital. But objectively, in connexion with the 
 whole fundamentally distorted organization of 
 production in the present day, the private accu- 
 mulation of capital must nevertheless, according 
 to him, stand condemned as an exploitation of 
 labour, as cheating, as extortion. The returns 
 to capital out of which great private fortunes 
 are amassed only yield such great accumula- 
 tion and superfluity because the wage labourer 
 receives in money-wage less than the full value 
 of the produce of his work, and must let the 
 surplus-value daily fall to the share of the capi- 
 talists' profits. The worker receives in wages 
 (according to the actual doctrine of the liberal 
 political economists) on an average not the full 
 productive value of his day's work, but very 
 much less — in fact, only what will bring him 
 the absolute daily necessaries of life. He works 
 ten' or twelve hours, while perhaps his wage 
 is produced in six.. Whatever he may produce 
 beyond his necessaries of life (the so-called 
 surplus-value) the capitalist pockets. The 
 surplus-value is absorbed in daily driblets 
 by the great sponge of capital, becomes the 
 profits of the capitalist, and eventually an 
 accumulation of capital. The substance of 
 
SOCIALISM. 27 
 
 Marx's criticism of capital, the critical gospel 
 of the European working-classes of to-day — is 
 in fact the critical theory of this " capitalistic 
 appropriation of surplus-value." Its various 
 forms and conditions were placed in the most 
 glaring light by Marx, who made use of a com- 
 prehensive mass of material drawn from the 
 circumstances of the English industrial system. 
 The inter-competition of the wage-earners, the 
 fluctuating condition of social production, the 
 disturbing effect of machinery, the changes in 
 technical manufacture, foreign competition, and 
 many other circumstances, combine (we are still 
 quoting Marx) to reduce the wage-earner and 
 the small trader to the necessity of handing 
 over to the capitalist (be he landlord, manufac- 
 turer, or dealer) the daily produce of his toil, 
 he receiving in return not the full value of his 
 day's labour, but only his necessaries of life. 
 The surplus-value of his day's labour over the 
 wages he receives must fall to the share of capital, 
 and enrich its possessor, partly supporting his 
 luxurious household, partly (and in a greater 
 measure) furnishing his endless accumulations of 
 capital. So there goes on, under the mask of 
 a wage-system, the daily and hourly exploita- 
 
28 SOCIALISM. 
 
 tion of the wage-earners, and capital becomes 
 a vampire, a money-grubber, and a thief. And 
 yet subjectively the respectable citizen is free from 
 blame ; he is actually compelled, by the force of 
 an anarchical competition, by the whole existing 
 system of production as by law established, - 
 to join in the race for wealth, to. abstract as 
 much as possible from the earnings of the 
 workman, and to increase his own wealth indefi- 
 nitely ; for otherwise he would fall out of the 
 running. Looked at in a purely objective light, 
 nevertheless, this way of proceeding is dis- 
 graceful ; it is the system which must be 
 altered. 
 
 How this alteration is to be effected we are 
 not very definitely told. But from the critical 
 premises given the conclusion can be drawn 
 with some degree of certainty. When, instead 
 of the system of private and competing capitals 
 which drive down wages by competition, we 
 have a collective ownership of capital, public 
 organization of labour, and of the distribution 
 of the national income — then, and not till then, 
 we shall have no capitalists and no wage- 
 earners, but all will be alike producers. The 
 whole produce of the nation will be divided 
 
SOCIALISM. 29 
 
 among all, in proportion to the work done by 
 each ; profits will no longer encroach upon 
 wages, as there will no longer be wages and 
 profits, but only payment by the community, 
 a publicly assigned income uniformly arising 
 from labour, and proportioned to its quantity 
 and social utility. The only part of the 
 national produce not distributed generally 
 would be that which was reserved by the public 
 overseers of production, and the bodies repre- 
 senting public departments, partly for keeping 
 up the supply of collective capital, and partly 
 for the maintenance of other not immediately 
 productive, but generally useful, institutions, — in 
 fact, the public departments, by which in the 
 long run all citizens benefit. This portion, the 
 most direct form of taxation in kind (being 
 subtracted before any distribution of private 
 incomes was effected), would take the place of 
 the existing taxes, and be used for the common 
 benefit, and as the permanent stock of the 
 collective capital. In one passage* Marx 
 expresses this roughly somewhat as follows : — 
 The total product is a social product. Part 
 
 * P. 37, ed. i. j p. 48, ed. 3. [E. Tr. p. 50.] 
 
30 SOCIALISM. 
 
 of this product serves to replace used-up 
 capital as means of production : it remains 
 social. But another part must be consumed by 
 the members of the community, and hence must 
 be distributed among them. It may be assumed 
 for the moment that the share of each producer 
 in the necessaries of life will be defined by the 
 time he works. Thus the time of work would 
 serve both as the measure of the producer's in- 
 dividual share in the common labour, and also 
 as measure of his share of the common product 
 for individual consumption. 
 
 vidently the whole programme is some- 
 thing very different from a periodical redistri- 
 bution of private property. It implies collective 
 ownership of the means of production (which 
 production is already, as a matter of fact, collec- 
 tive in form) ; direct provision for the main- 
 tenance of public departments out of the returns 
 to collective labour instead of by taxation ; 
 distribution of the remaining material wealth 
 among individual producers, in proportion to 
 their work, as private income and private 
 property ! It is, then, absolutely false to say 
 that socialism is the system of periodical redis- 
 tribution of private possessions. That is 
 
SOCIALISM. 31 
 
 absolute nonsense, and every page of a 
 socialistic journal rightly condemns such an 
 account of the matter as the result of gross 
 ignorance. 
 
 From the criticism of the private-capital 
 system which we have been examining, it appears 
 that socialists entertain no doubt whatever as to 
 the ultimate establishment of collective owner- 
 ship in the means of production. They are 
 not greatly concerned at the enormous difficulty 
 of the transition to the new conditions. They 
 count on the " expropriated masses " against 
 the " few expropriators," on the completion of 
 the process of the destruction of the middle 
 class, and the final intolerability of a continued 
 system of private production, in the face of 
 a thoroughly dissatisfied working population 
 which has thrown off all belief in authority. 
 
 On the question of Right in the transition 
 to the new conditions the socialists again feel 
 no doubt. What they say is to this effect : 
 The bourgeois may have a right to what he 
 has earned under the existing system of produc- 
 tion, and we can compensate him for his private 
 capital as he did others for the feudal dues. 
 But he has no right to demand the postpone- 
 
SOCIALISM. 
 
 ment of the better system of production for ever 
 and ever. 
 
 This may be proclaimed at any moment 
 in the name of the people as a new legal 
 system. Then the capitalist, being left by him- 
 self, will no longer be able to carry on his great 
 enterprises. He must, and indeed will, be 
 thankful if he and his children are compensated 
 for the loss of their private capital by regular 
 instalments paid in commodities for their main- 
 tenance during a certain length of time, until 
 all shall have grown accustomed to the new 
 state of affairs. He will submit to the right 
 asserted by the majority of his own people, as 
 the nobility was forced to submit to the new 
 popular rights asserted by the middle-class, and 
 to be content with compensation for their feudal 
 rents. 
 
 No doubt socialism is not averse to granting 
 compensation to the present private owners, if 
 they allow themselves to be expropriated with 
 a good grace ; and appeals to the precedent 
 set by liberal reformers in the expropriation of 
 the feudal nobility and feudalised Church, by 
 means of compensation and the acceptance of 
 rent-charges. 
 
SOCIALISM. 33 
 
 But even if the full compensation were given, 
 \t would only be paid to the persons bought 
 out in the shape of consumable goods, not in 
 sources of income or instruments of production 
 of any other kind ; as private property in the 
 instruments of production would no longer be 
 allowed, even if compensation in the form of 
 consumable commodities were given, to the 
 full money-value, for property that had origi- 
 nated from the previous possession of sources 
 of income. It will be readily seen that with 
 this kind of compensation the gigantic capitals 
 of the Rothschilds and others, even if reim- 
 bursed to the full value., would only become a 
 suffocating superfluity of consumable commo- 
 dities, and could have no lasting existence. 
 Great private fortunes would at once cease to 
 exist as capital, and speedily also as wealth ; 
 for the socialist community could not on prin- 
 ciple allow for perpetual compensatory pay- 
 ments in the form of consumable commodities. 
 The superfluity of commodities, therefore, 
 arising from the transitory act of compensa- 
 tion, would not last. 
 
 From this it will be readily seen that socialism 
 does not involve division of property, at any 
 
 3 
 
34 SOCIALISM. 
 
 rate not at periodical intervals, in the sense in 
 which it is generally attributed to it. It can 
 make allowance for wealth already accumulated 
 as the legal product of the old system, only 
 for the future it cannot permit it to flourish 
 qua private capital and qua source of income 
 Socialism forbids the future use of property as 
 private means of production, as a private source 
 of income, and thus necessarily puts an end 
 to all inequalities of income which are not 
 the result of pre-eminent labour performed. In- 
 equality is then, as a socialist has expressed it, 
 organically impossible. 
 
 Let us try to realize in a concrete form 
 what enormous significance these propositions 
 have. Let the Rothschild family possess, say, 
 ^100,000,000 : and let us further suppose they 
 are fully compensated, viz., by receiving in the 
 course of from thirty to fifty years the estimated 
 value of ^100,000,000 as an annuity, but only 
 in the form of provisions, clothing, furniture, 
 luxuries, and amusement. They would thus be 
 in a position to be profuse in enjoying and in 
 giving. But they could no longer capitalize, 
 no longer turn their superfluity into a source 
 of new income ; they would hence, in two or 
 
SOCIALISM. 35 
 
 three generations, without any interference with 
 the law of bequest, be thrown upon personal 
 labour like any other family ; unless they pre- 
 ferred to emigrate, in which case the socialistic 
 state would be hardly likely to send their 
 annuity after them. We can certainly conceive 
 of no more effectual attack on the aristocracy 
 of wealth, especially the Jewish portion of it, 
 than this exclusion of private instruments of 
 production and private sources of revenue from 
 the social system. And it is therefore the more 
 remarkable that those who have introduced 
 this idea most powerfully into the mind of the 
 masses were themselves Jews : Marx and 
 Lassalle are both of Jewish origin. Socialism 
 is proud of such far-reaching effects. Its par- 
 ticular boast is that it would pluck up by the 
 roots all the swindling of speculation and the 
 Exchange, all usury, all private monopoly. And 
 in fact no trace would remain of private 
 gain founded on speculation, or of unearned 
 income. 
 
 And here I must clear up one foolish mis- 
 understanding that exists in some quarters. One 
 often hears it said : " Socialism intends to have 
 no economic capital, no means of production ; 
 
36 SOCIALISM. 
 
 it proposes to produce without land, factories, 
 machines, tools, raw material, or fuel ; for it 
 condemns capital, and hence the continuance, 
 accumulation, maintenance, and renewal of the 
 plant of labour." This conclusion is taken as 
 a triumphant refutation of the doctrine of 
 Socialism, and triumphed over as the "blind 
 folly " of the socialists. I must emphatically 
 warn my readers against this class of opponents 
 to socialism. It is only ownership, and more- 
 over only private ownership in the instruments 
 of production, that socialism would abolish in 
 the future : it not only does not ignore capital 
 as an economic factor, but, as the above 
 quotations from Marx prove as clearly as 
 possible, would rather seek to introduce, by 
 the collective establishment and renewal of 
 all instruments of production, a form of trade- 
 capital which would assure to the whole 
 national production an equipment of plant on 
 the same lines as those of the best managed of 
 the large industries of the present day. Out 
 of the proceeds of collective production there 
 will be effected for every department in the most 
 enlightened manner the equipment and renewal 
 of the nation's industrial plant. Even that 
 
SOCIALISM. 37 
 
 dreamer Charles Fourier demanded the abolition 
 of the " wretched " .small-trade equipment; he 
 wished for the universal adoption of an en- 
 lightened system of large industry. How 
 little Karl Marx dreamed of a return to small 
 industries (not to speak of producing without 
 capital in the technical sense, i.e., without 
 instruments of production) is proved by the 
 above mentioned final, and therefore decisive, 
 resume of the main points of his criticism of 
 private capital, which occurs at the end of the 
 first volume of his" book on "Capital." 
 
 We shall not at this point consider what new 
 abuses might arise in the place of the existing 
 evils which sqcialism promises to check. We 
 have at present simply to establish what con- 
 stitutes the essence of socialism. The first 
 thing is to state its main principle clearly. 
 
 We will now attempt to follow out the 
 concrete results of this principle in detail, in 
 the several chief departments of national 
 economy ; in demand, production, exchange, 
 income, domestic economy, consumption, and 
 formation of wealth. Only by this piecemeal 
 demonstration shall we be in a position to make 
 clear to the reader that on the one hand 
 
38 SOCIALISM. 
 
 socialism in some respects involves an even 
 wider departure from the existing state of things 
 than its most terrified opponents dream ; and 
 on the other to rebut a large number of false 
 representations and unmerited sarcasms. 
 
III. 
 
 sN seeking to follow out the theory 
 of collectivism into the provinces of 
 the several departments of national 
 economy, we must first enquire according to 
 the usual method of political economists : How 
 would the demand for different kinds of com- 
 modities be ascertained in the socialistic state, 
 with its system of united production ? For 
 demand is the main motive power in the 
 industrial system ; it is the weight in the clock- 
 work of production and distribution, the force 
 which sets the industrial system in motion to 
 attain the material renewal of the social body 
 in all its institutions and elements. 
 
 At present the ascertainment of the social 
 demand for various commodities is the combined 
 effect of the demand of all the private households 
 in the community. Each person determines 
 his own needs privately, and orders his supplies 
 from traders, in whom these individual demands 
 
40 SOCIALISM. 
 
 meet as partial totals of the whole demand of 
 society ; while trade as a whole, as a vehicle of 
 the commercial demand of the general market, 
 casts up the social grand total of all private 
 demands. It is the commercial demand* which 
 expresses the total social demand in presence 
 of the commercial supplyf furnished by the 
 social production. On the other hand, the com- 
 mercial supply of commodities as the materials 
 of repair and maintenance is also represented 
 in trade ] for it is to trade that the products 
 of private businesses, acting in free competition, 
 are handed over to be further disposed of. 
 In the liberal economic system of to-day there 
 obtains therefore perfect freedom of individual 
 demand, limited only by competition among 
 buyers ; which produces the effect that those 
 who can pay most get first choice of the offered 
 commodities, and the poorer consumers are 
 pushed into the background. 
 
 Freedom of demand is a first essential of 
 freedom in general. If the means of life and 
 of culture were somehow .allotted to each from 
 without, and according to an officially drawn- 
 
 * Nachfrage. •■ t Angebot. 
 
SOCIALISM. 41 
 
 up scheme, no one could live out his own 
 individuality or develop himself according to 
 his own ideas ; the material basis of freedom* 
 would be lost. It is therefore important to 
 determine whether or not socialism would 
 annul individual freedom of demand. If it 
 would, it is dangerous to liberty, opposed to 
 the growth of individuality, and hence to that 
 of moral culture generally, and has no prospect 
 of satisfying the most unconquerable instincts 
 of man. 
 
 In answer to this question it must be confessed 
 that socialism itself has given every cause for 
 alarm as to its tendencies in this respect. 
 Many of its more fanciful representatives have, 
 indeed, insisted on variety of enjoyment, but 
 not on individual domestic freedom ; freedom 
 in the sphere into which every social unit, as 
 such, retires upon himself and his nearest 
 relatives to escape from the public social world 
 of business, manufacture, and trade, into his 
 individual sphere of recreation, private feeling, 
 self-culture, and free development. Many 
 socialists have promised to the proletariat an 
 
 * Der Brotkorb der Freiheit. 
 
42 SOCIALISM. 
 
 almost regal collective luxury in the way of 
 festivals, artistic delights, and so on ; but would 
 leave them next to no freedom in their private 
 households, or in their individual tastes and 
 requirements— next to no room for free family 
 life and comfortable homes. 
 
 But still it is possible that this conception 
 may be only an accretion to socialism ; one of 
 those exaggerations which accompany the intro- 
 duction of new ideas, as the ideal socialromances 
 of all times prove. Let us therefore examine 
 the consequence which a sober logical deduction 
 from the main principle of socialism would 
 entail. 
 
 In doing so, we find, undoubtedly, that it 
 would bring with it changes of enormous 
 significance and extent in the constitution of 
 social demand. Owners of large incomes of 
 all kinds would have disappeared, and hence 
 the consumption of private luxuries would be 
 enormously cut down ; whereas the system of 
 public institutions would assume far more 
 splendid proportions, and the provision for the 
 amusement and cultivation of the masses might 
 attain a decidedly higher level. 
 
 On the other hand there is nothing in the 
 
SOCIALISM. 
 
 main principle of abolition of private ownership 
 in the means of production which would neces- 
 sitate the disappearance of free demand and 
 free household arrangements, nor yet the 
 destruction of family life and of the freedom 
 of private social intercourse. 
 
 A complete and officially organized system of 
 collective production could undoubtedly include 
 at least as thorough a daily, weekly, monthly, 
 quarterly, or yearly statistical registration of 
 the free wants of individuals and of families, as 
 under the present system these effect, each for 
 themselves, by their demand upon the market ; 
 and the national production could thus both in 
 respect of quantity and of quality adapt itself 
 to this free demand. In this system we should 
 not expect to find the extraordinary fluctuations 
 of demand which are now of daily occurrence, 
 since the standard of consumption would vary 
 very little throughout the community, the 
 proletariat and the plutocracy having alike dis- 
 appeared. Storage and warehousing arrange- 
 ments would of course be necessary, to keep 
 the balance between production and consump- 
 tion, but these exist in the present system in 
 the form of speculative trade-warehouses. 
 
44 SOCIALISM. 
 
 It would no doubt be in the power of the 
 State to check entirely all demand for what 
 seemed injurious by simply not producing it : 
 the vegetarians, Balzer for instance, lean to- 
 wards socialism for this reason. But to keep 
 the whole community free from adulterated and 
 pernicious goods is no small advantage, and the 
 task of guarding against the abuse of this 
 power (for instance, by unreasonable temperance 
 men) could safely be left to the strong and uni- 
 versally developed sense of individual freedom. 
 
 There is therefore, on the whole, no reason 
 why in a system of united collective production 
 the wants of individuals should be regulated 
 by the State or limited by its officials. It is 
 specially important to emphasize this, as we 
 must insist that if socialism did deny the 
 freedom of individual demand it would be the 
 enemy of freedom, of civilization, and of all 
 material and intellectual welfare. This one 
 practical fundamental right of the individual 
 to spend his private income according to his 
 own choice is not to be sold for all possible 
 advantages of social reform, and therefore 
 socialism must, to begin with, be brought to a 
 clear understanding on this point. If it un- 
 
SOCIALISM. 45 
 
 necessarily gives to its principle of production 
 such a practical outcome as shall endanger the 
 freedom of the individual in his own household 
 arrangements, it becomes inadmissible, whatever 
 countervailing advantages it may promise, and 
 even really offer ; for the present liberal system, 
 in spite of all its accretions, is ten times freer, 
 and more in the interests of culture. 
 
 Let us now pass from the subject of demand 
 to consider production and exchange, and the 
 capital necessary for both. It has already been 
 shown that the most revolutionary effect of 
 socialism would be produced in this field. No 
 private capital, and hence no competition of 
 private capitals is any longer to exist ; both are 
 gradually or suddenly to be set aside. 
 
 In their places we should have a State- 
 regulated organization of national labour into a 
 . i social labour-system, equipped out of collective 
 capital : the State would collect, warehouse, 
 and transport all products, and finally would 
 distribute them to individuals in proportion to 
 their registered amount of social labour, and 
 according to a valuation of commodities exactly 
 corresponding to their average cost of produc- 
 tion. 
 
46 SOCIALISM. 
 
 This organization of capital and labour would 
 evidently be incompatible with the continued 
 existence of speculation, private enterprise, 
 the market, the Exchanges, the use of money, 
 private rents of all kinds ; and it is in this 
 that, according to socialists, its greatest merit 
 lies. For a mind thoroughly imbued with the 
 ideas of the existing system, these features of 
 the organized productive community of the 
 socialists are so inconceivable that it will be 
 advisable to consider them more closely in 
 detail. We must of course defer for the present 
 the consideration of one important point, namely, 
 how, even in the social State, every individual 
 is to have an economic motive, as it involves 
 the consideration of the socialistic theory of 
 value. 
 
 Let us first consider the organization of the 
 production and exchange of commodities. ■ 
 
 The arrangements for traffic, necessary alike 
 for production and exchange, would be in the 
 form of public departments, as is to a large 
 extent the case now. Certain of them would, 
 as at present, supply the private individual's 
 requirements in travel and correspondence : he 
 •could draw stamps and tickets as part of his 
 
SOCIALISM. 47 
 
 payment for labour. All business traffic, on the 
 other hand, would be carried on between public 
 productive businesses, and would consist of 
 State-organized transport of labour-power, of 
 raw materials, and of commodities in different 
 stages of completion, all the communication 
 between the productive businesses and the 
 depots for distribution being under one uniform 
 guidance. Private payment for the transport 
 of goods according to a fixed tariff would there- 
 fore no longer exist, since the community would 
 hold and manage the capital of the traffic de- 
 partment, and pay its agents according to the 
 quality and amount of their work, in the form 
 of certificates upon the public commodity-stores. 
 The controllers of the system of traffic would 
 therefore have to see to the proper lading of 
 goods, the cheapest way of sending them, their 
 safe delivery, as also to the book-keeping of 
 the transport department, and finally to the 
 economical and profitable management of the 
 transport machinery itself. 
 
 All this is fairly comprehensible to the minds 
 of the present generation ; for the machinery 
 of intercourse is already public and centralised, 
 e.g., the post, the telegraph, and partly the 
 
AS socialism. 
 
 railway. Most people even approve of such 
 a system. 
 
 But it is far more difficult to conceive of 
 socialism in the domain of industrial produc- 
 tion. We will therefore first examine this 
 from a negative point of view. 
 
 Socialism would not necessarily transform 
 at one blow all private productive businesses 
 into socially managed concerns and State- 
 factories, entirely under public industrial offi- 
 cials ; it might organize on a public basis one 
 branch after another, transforming them into 
 collective capital and socialized labour. The 
 socialistic reform might adopt the system of 
 territorially organised corporations, devoted to 
 particular branches and phases of production. 
 It might begin by taking only those branches 
 of industry which are already carried on on a 
 large scale, and consolidating them into uni- 
 form productive public bodies under State 
 regulation and inspection. 
 
 The product of the already socialized busi- 
 nesses would then either be thrown upon the 
 open market, or be disposed of at a rate pro- 
 portionate to the time and labour expended on 
 it, the proceeds of which would be divided 
 
SOCIALISM. 49 
 
 among its publicly registered workmen, who 
 would have an interest (with reference to their 
 labour-product), in maintaining among them- 
 selves discipline and self-control. Only the 
 already socialized branches of production would 
 form a conjointly responsible system of capital 
 and labour. In many departments it might for 
 a time be left to the option of producers 
 whether to merge themselves in the State 
 businesses or not. The attractive power of this 
 socialized productive system would have to lie 
 in its profitableness. 
 
 Even in the final consummation of socialism, 
 it would not be necessary that every form of 
 production should be included under this system 
 of industrial corporations. There might very 
 well be still some who produced for their own 
 consumption, provided they were not allowed 
 to sell their products to others. Social services 
 which by their nature cannot be centralized, 
 being personal services (those of the physician, 
 the artist, and others), might even be left to 
 the competition of private payment (by means 
 of the transferable labour-cheques of the cus- 
 tomers) ; or private payment in these professions 
 might be combined with the already existing 
 
 4 
 
50 SOCIALISM. 
 
 system of public salaries for attendance. This 
 kind of private interest of the individual in his 
 social calling in the region of personal services 
 is quite conceivable in all cases where capital 
 plays no conspicuous part in the service 
 rendered. Only those personal services which 
 require a large capital would have to be dis- 
 charged by salaried public officials administering 
 public capital : in the government, in education, 
 and in the municipality we have already such 
 publicly salaried officials whose labour is 
 socialised labour. 
 
 The socialistic system of production in 
 general is not absolutely new to us ; it is 
 merely the universal extension of the public 
 service and of public departments. , 
 
 Therefore there is absolutely no ground for 
 the criticism sometimes passed on socialism : 
 that it is an absolute negation of the State and 
 of the municipality. Economically considered, 
 it is rather the universal application of the 
 special principle of the State and the munici- 
 pality, the extension over the whole range 
 of social production of the idea of an official 
 public service. The collectivist principle, 
 whether realisable or not, is essentially a State- 
 
SOCIALISM. S> 
 
 principle. It places the process of production 
 under a united, even if loosely federated, 
 organisation, instead of leaving it to the un- 
 conscious total effect of a number of privately 
 competing forces. It is from this that socialists 
 take their name of Socialists ; for this that 
 they in particular condemn the liberal industrial 
 system as " anarchical," " disunited," " hap- 
 hazard," exposed to every kind of private abuse, 
 " antisocial," " individualistic." No one with 
 any knowledge of their literature has any excuse 
 for bringing up against the socialists the reproach 
 that they are opposed to government, or anti- 
 social ; for it is precisely this which the 
 collectivist more appropriately throws in the 
 teeth of his liberal opponent. 
 
 Universal suffrage would not be absolutely 
 necessary to a victorious socialism. It is true 
 that during the transition period of the struggle 
 with liberalism, socialism will adhere to the 
 principle of universal suffrage. But if the 
 united organization of labour were carried out, 
 the social body would bear that firm "organic- 
 corporative " structure peculiar to the Middle 
 Ages in a higher, more universal, and more 
 imposing degree than they. In the liberal 
 
52 SOCIALISM. 
 
 individualistic state an organic class- represen- 
 tation can be only simulated by a system of 
 constitution-tinkering and sham representa- 
 tion : a thorough organisation of power is, 
 in essence, more foreign to the individual- 
 istic liberal state than it would be to the 
 socialistic state. This is self-evident, and 
 socialists are very well aware of the fact, how- 
 ever little they trouble themselves at present 
 as to the ultimate constitution of their state. 
 Here again the idea of a collective organisa- 
 tion of production is not hostile to the State, 
 and it would be well if such manifestly in- 
 applicable expressions were banished from the 
 controversy. On the contrary, all the cen- 
 tralisation of the liberal state advances the 
 cause of socialism, and harmonises with its 
 principle. Lassalle's great jurisprudential 
 work, " The System of Acquired Rights," cul- 
 minates in the political theory that no social 
 function ought to be under private control, and 
 that the private control of social production by 
 means of capital is just as anti-social, just as 
 feudalistic, as the former patrimonial rule of the 
 feudal nobles over the State. 
 
 There is another false representation which 
 
SOCIALISM. S3 
 
 is even more widely spread. It is said that 
 the well-known defects of public administration 
 to-day would be universal under socialism. 
 This argument must not be relied on. To 
 begin with, there are at present branches of 
 public administration which are at least as 
 economically managed as the machinery of 
 capitalistic speculation, or more so : such are the 
 post, the State-railway (in Germany), the tele- 
 graph, municipal gas and water supply depart- 
 ments, and others. But further, the socialists 
 are able to allege that government works under 
 the liberal capitalistic system are under totally 
 different conditions from those of government 
 works under the socialistic system ; they would 
 point out that the workmen and overseers of 
 government works to-day have of course no 
 possible personal interest in producing carefully 
 and well for the State. The State pays them 
 their wage whether they have worked well or ill. 
 But it would be otherwise if each received more 
 income the more all the rest accomplished 
 in each and every department. Then to do 
 good work for the community in every branch 
 would have become in the highest degree 
 the private interest of each : the control and 
 
54 SOCIALISM. 
 
 discipline of labour, which is becoming under 
 our system more and more impossible — and 
 the lack of which is leading it ever nearer to 
 the verge of collapse (so say the socialists) — 
 would under their system be better guaranteed 
 by their collective bonuses ; for it would be a 
 matter of importance to each, in respect of his 
 bonus and his pay, that no one should receive 
 a full certificate for bad or lazy work ; it. would 
 be to the interest of each that the average cost 
 in labour should be as low as possible, because 
 the price of social products would be deter- 
 mined by it, so that labour certificates would 
 be worth more the lower the social cost 
 of every kind of commodity. And, certainly, 
 this line of argument is unimpeachable, at least 
 in so far as that we cannot form any conclusions, 
 from the non-income-yielding public depart- 
 ments of the liberal state in which State- 
 management is the exception, as to the economic 
 results of publicly managed businesses, which 
 should form the rule, and whose total revenues 
 would be bound up with the private interests 
 of each person. In short, no penetrating and 
 unprejudiced observer can rest satisfied with 
 the customary dismissal of socialism with the 
 
SOCIALISM. 55 
 
 words, "It would render universal the mal- 
 administration inherent in all public productive 
 departments." Partisans of the existing social 
 order are rather to be earnestly warned against 
 being so satisfied. 
 
 The main question is very different, and is in 
 fact this : whether socialism will ever really be 
 in a position to give effect, on its own ground, 
 as fully, or even more fully, to the great 
 pyschological truth and economic utility which 
 lies in the liberal principle, according to which 
 private interest is made a motive to the dis- 
 charge of the functions of social production. To 
 the present writer this seems the crucial ques- 
 tion — and one by no means decided as yet — on 
 which in the long run everything turns, and 
 upon which depends the triumph or defeat of 
 socialism, and the reform or destruction through 
 it of the economic side of civilization. And 
 therefore it will be well first to cast a few 
 critical side-lights upon it, instead of proceeding 
 at once to our task of establishing in a concrete 
 form the actual contents, the quintessence of 
 socialism. 
 
 Socialism, as at present formulated, has abso- 
 lutely not attempted to establish by what means 
 
56 SOCIALISM. 
 
 it intends to bring such an enormous mass of 
 collective labour and collective capital in all its 
 minutiae to the pitch of profitable individual 
 work. From one central point it is impossible 
 to secure, either by means of punishment or by 
 appeal to the popular sense of duty, or by any 
 other means, that everywhere, throughout the 
 whole circle of the unified social production, 
 everyone shall work at the lowest possible cost, 
 and with the greatest possible result ; that pro- 
 duction shall be economical in every sense of the 
 word ; that no one shall defratud the public of his 
 time ; that no one shall dissipate or abuse the 
 stock of national capital ; that in every depart- 
 ment the stock of the means of production 
 shall be renewed at the right time and in the 
 most profitable manner, both as to quantity and 
 quality ; that different labour-qualifications shall 
 be rightly and fairly valued ; that from the 
 smallest trade officials up to Fourier's " Omni- 
 archs," there shall not be more exploitation and 
 embezzlement, more surplus value absorbed 
 and undue profit-making carried on, than exists 
 to-day in the liberal capitalistic State. It will 
 not be sufficient by itself in a producing com- 
 munity of millions for producer A. to feel : 
 
SOCIALISM. 57 
 
 My income from my social labour is conditional 
 upon my 999,999 co-operating comrades being 
 as industrious as I. This will not suffice to 
 awaken the necessary reciprocal control, at any 
 rate it will not stifle the impulse to laziness and 
 to dishonesty, nor hinder men from defrauding 
 the public of their labour-time, nor render im- 
 possible a cunning or prejudiced contrivance for 
 the unjust valuation of individual performances. 
 Socialism would have to give the individual at 
 least as strong an interest in the collective work 
 as he has under the liberal system of production 
 — it would have to secure to every sub-group a 
 premium on extraordinary amounts of collective 
 production, and a loss through collective slack- 
 ness ; it is as much and still more bound to 
 bestow effective distinction on all special success 
 in technical development, and duly to reward 
 great individual merit ; and, finally, would have 
 to provide that all the innumerable labour- 
 forces should be directed into the channel of 
 their most profitable use, not by the orders of 
 an authority, but by the force of individual 
 interest. Otherwise, it will scarcely secure a 
 fairer distribution of the national produce, and 
 certainly not greater economy in social produc- 
 
58 SOCIALISM. 
 
 tion, than is on an average secured by the 
 liberal industrial system, acting through the 
 most acute stimulus to private interest, and by 
 proportioning price not only to the cost of 
 production, but also, and mainly, to the value 
 in use of separate services and commodities at 
 a given time and place, and in a given trade 
 or industry. 
 
 I am by no means prepared to maintain that 
 socialism could not succeed in doing this. The 
 scientific discussion and thorough sifting of this 
 question is now only in its beginnings.* But 
 one thing can be positively stated : the socialist 
 programme of to-day does not yet fulfil this 
 condition ; it has not yet the necessary practical 
 clearness of ideas as to the requisite organiza- 
 tion of competing labour.. And yet there can 
 be no doubt that if the present capitalistic com- 
 petition, with its strong economizing pressure, 
 were withdrawn, the competition of labour 
 would have a larger task, and would need a 
 stronger impulse and a nobler organisation. 
 
 * The author refers, for an account of the decisive points, 
 to his own works, " Gesellschaftliche System der Mensch- 
 lichen Wirthschaft," 3rd edition, 1873 ; and " Bau und 
 Leben des Socialen Korpers," vol. iii. 
 
SOCIALISM. 59 
 
 111 particular, the socialistic theory of value, 
 so long as it depends for the computation of the 
 value of commodities only on their cost to the 
 community, and not their constantly changing 
 value in use at given times and places, is quite 
 incapable of solving the problem of production 
 with collective capital which socialism pro- 
 pounds, on any really sound economic basis. 
 As long as socialism has not something, quite 
 other than this, and more positive, to offer on 
 this point, it has no chance. Its proposal to 
 abandon a system of production which, with all 
 its disadvantages, does, nevertheless, afford to 
 a tolerable degree a many-sided guarantee of 
 economy, for the sake of a fairer distribution 
 of produce whose possibly accruing disadvan- 
 tages are at present beyond our power to 
 forecast, — this proposal, I say, will not prevail 
 by fair means, and if carried into effect by force 
 will not have lasting success. 
 
 If, on the other hand, socialism should suc- 
 ceed in rendering its undoubtedly more uniform 
 and consciously social principle, and its radical 
 abolition of private profits and private mono- 
 polies, compatible with all the advantages of 
 private interest in production, and spontaneous 
 
6o SOCIALISM. 
 
 reciprocal control in the fulfilment of social func- 
 tions ; if it should retain all that is good in the 
 existing system, — then, indeed, it would be sure 
 of ultimate triumph, although, perhaps, not for 
 a long time to come. Then it would be clear 
 that its cause was being powerfully advanced by 
 the whole present development, the increase of 
 centralization in the State, the increased scope for 
 larger organization in modern means of commu- 
 nication, the universal tendency to form large 
 industries and to mechanical concentration in 
 general, the association of the workmen in large 
 industries and their growing unmanageableness 
 by private employers. But then socialism would 
 have to lay aside precisely what makes it appear 
 so formidable at present — it would then really 
 represent a phase of development which would 
 not mean a complete uprooting of existing condi- 
 tions, but a leading up of the results of past civi- 
 lization to a wider and higher accomplishment. 
 But this is a very long way off at present. 
 Still, we have no right to conclude beforehand 
 that such a purified form of socialism is impos- 
 sible. The study of this is one of the greatest 
 and most conservative of undertakings, an 
 undertaking fraught with more critical results 
 
SOCIALISM, 61 
 
 for the future fate of civilization than any other. 
 But we must reserve the task of working out 
 the solution of this question in detail from the 
 standpoint just designated, and must return to 
 our immediate problem of laying down the 
 consequences of the first fundamental principle 
 of socialism. 
 
 It must be clearly borne in mind that social- 
 istic production involves, as an axiomatic 
 necessity, a single or united organisation. 
 
 What shape this organisation would take, 
 whether centralized or federal, whether absolute 
 or democratic, whether and by what means it 
 would be possible to make such a unified 
 production also thoroughly economical, need 
 not now be considered : even the socialism 
 of the present agitation shows immense gaps 
 in this section of its treatment, not to speak of 
 the older communism, which came to some ex- 
 travagant and really laughable results through 
 feigning the transformation of man's ineradic- 
 able impulses into pure feelings of brotherhood 
 and of social agreement. But every socialist 
 must . necessarily insist on the necessity of a 
 social, and hence of a unified, system, i.e., on the 
 union in one management, with a definite pur- 
 
62 SOCIALISM. 
 
 pose, of the process of production as such. 
 The anarchy of individualistic competition is, 
 according to his premises, the source of all the 
 evils, all the swindling and disorganisation, all 
 the fluctuation, exploitation, and injustice of the 
 present system. The socialistic state will not 
 be realized till there remains only collective 
 property in the instruments of social production. 
 This must be borne in mind in order to under- 
 stand the lukewarmness of the clearest heads 
 among the socialists towards the petty co-oper- 
 ative associations of a Schulze, and towards 
 the question of profit-sharing among workmen, 
 towards the labour-bureaus of the liberal state, 
 and towards the equally anarchical system of 
 independent productive groups (such as are 
 suggested by the anarchist), with their associ- 
 ated capital held together by no bond of union, 
 but meeting on the bare footing of contract. 
 Such enterprises are based on the competition 
 of separate capital ; they have a disjointed 
 system of production ; they presuppose always 
 an anarchical struggle of private interests 
 (between employers and employed, between 
 earnest and idle workers, between co-opera- 
 tors and non-co-operators, between shrewdly 
 
SOCIALISM. 63 
 
 managed social productive societies successful in 
 their speculations, and unsuccessful competing 
 associations). The clear-sighted socialist, as is 
 well known, approves these only in so far as 
 they draw closer the connexion of the worker 
 with the means of production, and advance the 
 growth of a consciousness of collective interests ; 
 for the rest, he shrugs his shoulders at them. 
 This consideration alone explains why Karl 
 Marx was so indifferent or even averse to these 
 " reforms. 1 ' Socialism demands that there shall 
 be collective ownership in the means of pro- 
 duction ; then and then only will it be possible 
 to effect, in due proportion to labour, the assign- 
 ment of incomes and private property in the 
 means of enjoyment. 
 
IV. 
 
 >HE principle of socialism is thus op- 
 posed to the continuance not only of 
 private property in directly managed 
 means of production (that is in private busi- 
 nesses and joint-stock and other associations 
 of private capital), but also of individual 
 ownership in indirect sources of income ; i.e. to 
 the entire arrangement of private credit, loan, 
 hire, and lease, — not only to private produc- 
 tive capital, but also to private loan-capital. 
 State credit and private credit, interest-bearing 
 capital and loan-capital, are incompatible with 
 the socialistic state. Socialism will entirely put 
 an end to national debts, private debts, tenancy, 
 leases, and all stocks and shares negotiable on 
 the Bourse. At the most it would only concede 
 compensation for such investments by a pay- 
 ment in consumable commodities. A perma- 
 nent hereditary aristocracy of wealth, whether 
 landed of commercial, founded on rent and 
 
SOCIALISM. 65 
 
 interest, would be impossible. Socialism recog- 
 nizes only an aristocracy of personal merit, 
 publicly acknowledged. 
 
 In order thoroughly to understand this 
 transformation, which by itself would entirely 
 change the face of society, we need only 
 again lay stress on the fundamental thesis of 
 socialism. 
 
 The community would be the owner and re- 
 newer of all instruments of production : it would 
 be the universal capitalist. What opportunity 
 would there be for the private transference of 
 capital by way of loan to individual traders, 
 i.e., for productive credit ? There would be 
 no more private capital and no more private 
 enterprise. 
 
 Consumers' credit, to meet the pressing need 
 of individuals, could only be granted by the 
 State as an advance on the labour which the 
 debtor is ultimately to render to it. In the 
 socialistic state there can be no consumer's 
 credit, in the sense of an extraction of exor- 
 bitant profit from the wants of the poor ; and 
 this is regarded as one of the highest merits of 
 the scheme. It would be the community that 
 within certain restrictions would make special 
 
 5 
 
66 SOCIALISM. 
 
 advances on future labour to those in distress, 
 or to those needing training, and would charge 
 them to their labour-account. In the same way 
 the community would credit people with their 
 savings — that is, would undertake assurances 
 for future payment whenever the worker wished 
 to postpone the enjoyment of his earnings. 
 Personal insurance would thus be possible, but 
 it would be based not upon payment of interest 
 and on a speculative banking-system, but upon 
 non-interest-bearing social labour-accounts, in 
 which the individual is credited with his undrawn 
 labour-balance, or may anticipate his future 
 earnings by way of advance. 
 
 There would be no such thing as a lease, in 
 so far as leasehold property consists of means 
 of production, which would be in collective 
 ownership. 
 
 There would be no hiring of shops and 
 warehouses, as speculative private trade would 
 have entirely ceased. 
 
 All hiring of dwelling-houses would be ex- 
 cluded ; for in the socialist community there 
 would necessarily be a profound repugnance 
 against the payment to individuals of so-called 
 " ground " rents (rents for the better or better- 
 
SOCIALISM. 67 
 
 situated sites and houses), against which a 
 proclamation was directed in Basle ten years 
 ago. Moreover, it is impossible to bring 
 stability and regularity into the popular 
 dwellings' system unless it is protected from 
 the choking -growth of rent, and, by the action 
 of society, organically and systematically treated 
 with reference to the locality of employment. 
 
 National credit would be in its nature 
 superfluous ; whatever was assigned to the 
 State as an extraordinary requirement could 
 only be obtained by taking it in kind, with 
 constitutional sanction, from the stores, which 
 are public institutions to begin with. 
 
 It will be admitted that all these demands 
 are strict consequences of the main principle. 
 They have already in part, and with more or 
 less clearness, been inferred and propagated, 
 and become conscious doctrines of socialism. 
 
 Let us just imagine the total disappearance 
 of shares, stocks, partnerships, superior rents,* 
 mortgages, private loans, agricultural rent, and 
 house-rent. It is plain that with this total 
 abolition of the investment-list the entire social 
 
 * "Prioritaten." [?] 
 
68 SOCIALISM. 
 
 life of to-day would be transformed throughout. 
 Not only the conditions of property and income, 
 but the variety of consumption and demand, 
 especially the consumption and production of 
 luxuries, would be largely cut away — indivi- 
 dual demands would be very greatly levelled. 
 Especially, there would no longer be a stock 
 exchange. Socialists of course allow no weight 
 to the objection that this transformation en- 
 dangers the future of the cultivated and pro- 
 pertied classes. They confront it with the 
 equal right of the proletariat's descendants to 
 property, culture, and enjoyment; and they 
 promise to all, who are willing to work, an 
 average degree of comfort, not excluding better 
 payment for personal services. As a matter of 
 principle, socialism cannot concede more to 
 these classes than compensation for interest- 
 bearing property by means of a certain amount 
 of annuities, payable, in means of enjoyment, 
 through the time of transition. The monstrous 
 actual abuses of public and private credit, and 
 the unclean brigand-aristocracy of the exchange, 
 are things which it positively desires to cut up 
 by the roots. 
 
V. 
 
 !UT that is not sufficient. We must 
 add that socialism, from its premises, 
 can no longer allow trading and 
 markets, and that it would be necessary even 
 for coinage eventually to cease to exist, and 
 for labour-money (certificates of labour) to take 
 its place. Private trading capital would be 
 inconceivable. 
 
 The ' private speculative trade of to-day is 
 evidently the effect of private production and 
 competition. Since, at the present time, the 
 total production of society in the way of 
 agriculture and of manufactures is resolved into 
 innumerable private concerns, a unifying bond 
 throughout this total production is wanting. 
 Now this bond is replaced by trading capital, 
 since it receives the output from one trade to 
 hand it over to another, and finally to the 
 consumer. Each of these acts of buying and 
 
•jo socialism. 
 
 selling is necessarily remunerative ; for private 
 people conduct the exchange of commodities for 
 reasons of private gain, which is determined in 
 the interests of society solely by the competition 
 of other private capital upon the market ; they 
 demand a profit on each transaction. But if 
 we suppose the production by private capitalists 
 to be removed, and a unified, organised 
 common-production in its place, buying and 
 selling, competition and markets, prices and 
 payment by money are at once superfluous. 
 Within the socialised economic organization 
 they are even impossible. It would only be in 
 business relations with capitalistic states, or 
 with capitalistic survivals inside the national 
 rigime, that the balance on the value of imports 
 and exports and of internal barter would have 
 to be adjusted by money. The use of money 
 would only be necessary within the socialist 
 state for so long and in as far as the principle 
 of common-capital was not immediately or 
 exclusively recognised. 
 
 But let us examine this somewhat closer, in 
 order to make it intelligible why socialism 
 insists, and on principle is forced to insist, on 
 exterminating trade, the use of money, markets, 
 
SOCIALISM. 71 
 
 business competition, and, above all, the stock 
 exchange. That socialism has this inten- 
 tion every one knows who has studied its 
 comprehensive attacks on trade, the stock 
 exchange, and money, at first hand, and not 
 from hearsay ; even in Fourier's time these 
 formed the chief objects of his social criticism. 
 Imagine the control of all production vested 
 in a single office of public economy, in a single 
 central office representing the bureaus of pro- 
 duction and sale, it being insignificant whether 
 this control was arranged in the spirit of federal 
 or of centralistic socialism. In such a case no 
 doubt an actual transport of products from one 
 factory to the other, and a delivery to the 
 consumers, would have to be organised from 
 the central and intermediate stations in the 
 economic organisation ; transport, housing, and 
 storage, in order to secure the distribution of 
 each article of production over all the necessary 
 districts in the right proportion and at the 
 right time, and in proportion to the public 
 returns stating the demand of each district, 
 become unavoidable. Therefore transport and 
 storage, which accompany the trade of to-day, 
 would be the necessary concomitants of the 
 
72 SOCIALISM. 
 
 barter of the socialistic state, and would be 
 conducted in accordance with a centralised 
 filing of accounts, book-keeping, and settlement 
 between all the branches of business. But 
 this barter could no longer be a private trans- 
 action or exchange, therefore no longer trade, 
 nor purchase and sale in a continuous chain 
 of private transactions. Trade would disappear, 
 would really have become superfluous. The 
 bond between the productive trades, which 
 can only be tied by each for itself while the 
 mode of production is private, isolated, and 
 speculative, would be replaced socialistically 
 by an economic bureau-organism, having public 
 dep6ts for transport and storage at command. 
 Competition of speculative business-capital 
 would be therefore not only superfluous, it is 
 simply inconceivable. There would indeed be 
 a comprehensive socialistic barter of products, 
 but no speculative exchange of commodities.* 
 
 * " Waaren " has been here translated " commodities " 
 in accordance with the usage of the English translation oi 
 Marx's " Das Kapital," of which see ch. L, " Commodities " 
 (Germ. "Die Waare"). "Waaren" =" objects produced 
 for sale," " wares," and must not be confused with " Gliter,'' 
 "concrete utilities," also sometimes rendered "commodities." 
 
SOCIALISM. 73 
 
 The bartered products would, it is true, still be 
 cargoes and provisions, but no longer articles 
 of private speculative exchange, i.e., no longer 
 commodities.* This is the tenor of the explicit 
 demonstration of the socialist, that for goods 
 to assume the form of commodities * represents 
 only a " historical category," attendant on the 
 present individualistic method of production, 
 and that this category is of a necessity absent 
 in every truly socialistic method of production, 
 and would therefore be foreign to the future 
 socialism, just as it was historically foreign to 
 the patriarchal and feudal internal economy, and 
 did not occur in the ancient Indian community 
 and internal family-economy. 
 
 As a natural consequence, markets and the 
 Exchange disappear with commodities,* trade, 
 and profit; the Exchange, because private credit, 
 as shown above, would be done away with. 
 But the market for commodities would disappear 
 for other reasons. The chief aim of the specu- 
 lative market is threefold : 
 
 i. Social determination of the collective 
 demand, which, economically speaking, is able 
 
 * See note on p. 72. 
 
74 SOCIALISM. 
 
 to be satisfied ; 2. the determination of the 
 quantity and quality of the produce, which, 
 economically speaking, deserves to be furnished 
 (is demanded) ; 3. the continuous establishment 
 of an exchange-value, such as to maintain the 
 economic balance between production and con- 
 sumption. 
 
 This threefold aim of the market, again, would 
 have no raison d'etre. The bureaus of disposal 
 ascertain the demand, distribute accordingly the 
 national labour among the different classes of 
 trade, and among the departments of produc- 
 tion, transport, and storage, and their bureaus, 
 and fix the value of the produce in proportion 
 to the labour-time socially necessary to be spent 
 upon it (Karl Marx). The produce would be 
 distributed in accordance with the thus regu- 
 lated value, by way of liquidation of the labour- 
 accounts of the entire body of producers. The 
 market of speculation would therefore be super- 
 fluous. This market is nothing but the conse- 
 quence of the individualistic mode of production, 
 which is forced under the alternating pressure 
 of the competition of innumerable private in- 
 terests in the open market, mechanically and 
 unsteadily, into economic paths. It would have 
 
SOCIALISM. % 
 
 no purpose within the area covered by a unified 
 collective system of production. 
 
 The financial corruption of the press would 
 of itself disappear along with speculative 
 trade. 
 
 Since the community is systematically to fix 
 the " exchange-value," or rather not exchange- 
 value, but social value-assessments, the press 
 would have no influence upon it. The financial 
 press would no longer be able to influence prices 
 and exchange. Besides this, it would no longer 
 be an object of speculation itself; its freedom 
 could only be based upon free support by asso- 
 ciation ; its text would be obliged to dispense 
 with speculative advertisements. All that would 
 no longer exist! The Israelites of socialism, 
 therefore (compare Lassalle's special treatise on 
 the proletariat of the pen), oppose the " Judaism 
 of the press " just as fundamentally as they do 
 the Judaism of trade and the exchange, and 
 indeed without any national ill-feeling. All 
 three flourish luxuriantly in the liberal soil of 
 competition and speculative economy, and have 
 grown great with them. 
 
 In a similar manner much else would dis- 
 appear! The entire costly and luxurious 
 
76 SOCIALISM. 
 
 organisation of advertisements and show-rooms, 
 with the enormous rents of warehouses, together 
 with wholesale and retail trade, and the sterile 
 and parasitic dealings of the middle-man, would 
 vanish of their own accord, together with 
 trade-competition. We can see that the 
 metamorphosis would be thorough. 
 
VI. 
 
 giHE energetic attacks of socialism 
 against money are well known — the 
 same fate would befall it as would 
 trade. 
 
 Who in our monetary age can transpose 
 himself into a state of affairs in which the 
 exchange of each one's commodities and labour 
 would be managed without money ? And yet 
 it is a matter of history that money was never 
 used in the interior of any closed economic 
 circle; it would, therefore, have to disappear 
 in any close economic community such as that 
 of socialism, just as it is still absent in every 
 family. 
 
 The socialists emphasize, as we have already 
 stated, the disadvantages of the use of money, 
 in that such use conceals and favours the 
 exploitation of labour. They point out that 
 the remuneration of labour being in the form 
 of a money wage hides the fact, that the 
 
78 SOCIALISM. 
 
 labourer does not receive the full produce of 
 his labour in money, but resigns to the employer 
 the surplus of his labour (beyond the equivalent 
 of maintenance). The possession of money, 
 they say, gives every one the power of making 
 the most arbitrary, disturbing private attacks 
 on the course of social production and circula- 
 tion of commodities, and affords an opportunity 
 for anarchical crises and disturbances. Money 
 allows the unlimited accumulation of private 
 wealth, and permits competition to finally 
 degenerate into irremediable private monopoly. 
 Socialistic literature fairly swarms with drastic 
 expositions of such-like doctrines. But it is 
 not our province here to exercise adverse criti- 
 cism, but simply to certify the logical accuracy 
 or inaccuracy of the socialistic programme. In 
 this respect there is certainly no doubt that 
 within the unified, closed, national economy of 
 the socialists the present use of metallic money 
 would find no place, and serve no purpose. 
 
 To-day, money performs two chief functions. 
 According to the political economists, it is on 
 the one hand the general standard of value; and 
 also, on the other hand, in consequence of the 
 former quality, the most general means of com- 
 
SOCIALISM. 79 
 
 pensation between private persons or businesses, 
 the so-called "vehicle of value"* (common 
 means of barter, means of payment, means of dis- 
 charge, means of transport, storage, and loan). 
 
 In the second quality of means of compensa- 
 tion (in the commerce of exchange, payment, 
 and loan), money would have become quite 
 superfluous. Private exchange and loan, as we 
 have pointed out, would actually no longer exist ; 
 produce would be served out on behalf of 
 society in exchange for certificates drawn on 
 the store-account department by the labour- 
 account department, and set off against the 
 person's balance on his labour account, or, as 
 might occasionally happen, set off by way of 
 advance against his future earnings. That 
 universal medium of purchase, which at present 
 must be given to every private seller for his 
 sold produce as the means of transforming it 
 by private transactions into every kind of 
 commodity, and as a quid pro quo, and so to 
 say as tangible real security, would be of no 
 further value. Reckonings between the bodies 
 entrusted with the collective production and the 
 
 •"' WertubertragungsmitteL" 
 
8o SOCIALISM. 
 
 consumers (who have credit for productive 
 labour) would have to be made, without money, 
 according to labour-time and value of labour- 
 time, by a process of adjusting balances through 
 the public administrative bureaus and clearing- 
 houses, and in a similar manner between these 
 bureaus themselves, in as far as they take over 
 products from each other ; and finally between 
 them and the public stores. 
 
 In the other quality, as standard of value, 
 money would in the socialistic state be replaced 
 by the average labour-day, by which the value 
 of the products would be estimated, and, on 
 division, be reckoned. 
 
 Also, as a means of judicial assessment, the 
 normal social work-day would be the unit of 
 value ; the most reliable object of judicial 
 attachment would be provided, in the shape of 
 orders on the public labour-accounts of con- 
 demned persons, or public debtors, for the 
 purpose of judicial assessment, fine, and 
 enforcement of penalty. 
 
 The standard of value, with which even the 
 closed economic state could not dispense, would 
 still be present, but would have become sub- 
 stantially different, i.e., a definite fraction of the 
 
SOCIALISM. 
 
 aggregate social labour-time. Supposing the 
 possibility of this new standard of value, the 
 socialists are so far logical in most impressively 
 proclaiming the abolition of money as now in 
 use. As a private means of compensation, 
 and as a universal means of purchase and token 
 for use in exchange, it would be superfluous ; 
 and it is only for this function that metallic 
 money is necessary. As a standard of value, 
 we repeat, it would be replaced by the real unit 
 of value consisting in a fraction of the social 
 labour-time. 
 
 " Social labour-time " as standard of value ! 
 To most readers this idea will be unintelligible ; 
 many will scarcely even have heard of it. 
 Nevertheless, this idea forms theoretically in 
 the strictest sense the basis of socialism. It 
 has already taken deep root in socialistic 
 thought, and Karl Marx expressly declares 
 that his treatment of labour as the substance 
 and standard of value is the corner-stone of 
 his whole system. Let us, therefore, examine 
 rather more closely this socialistic idea of value, 
 by unravelling the somewhat entangled, dialec- 
 tical web of Marx's book, which is not very 
 intelligible to amateur economists. 
 
 6 
 
82 SOCIALISM. 
 
 The " substance of value " of products lies, 
 according to this theory, in the labour which is 
 "socially necessary," by which they are pro- 
 duced. The products are denned as embodied 
 labour, congealed "labour-time," a congealation 
 of labour. But it is not any casual private 
 labour that determines the value, but the 
 serially necessary labour, i.e., labour of such 
 a kind as must be on the average expended, 
 according to the existing national standard of 
 technique, for a unit of supply, in order to produce 
 the commodity to the whole extent of the demand 
 for it. If, for instance — we may exemplify 
 Marx's theory in this way — a country has need 
 of 20,000 hectolitres of wheat, and for the 
 production of it 100,000 days of social labour 
 (labour capable of competition, or, ultimately, 
 labour included in the socialistic organisation) 
 must be expended on it, it would follow that 
 the socialistic value of a hectolitre would be 
 - 2 °Q °Q P =nve days of socially determined indivi- 
 dual labour. This value would have to hold, 
 even if individuals were found improvident 
 enough to produce the hectolitre at the cost 
 of ten or twenty days of individual labour. If 
 we imagined all the species of products, which 
 
SOCIALISM. 83 
 
 are being continually produced, valued by the 
 expenditure of social labour as verified by 
 experience, we could find by addition the total 
 of social labour-time which is required for the 
 social total production of the social total of 
 demand. We will assume that this sum 
 amounts to 300 million days of socially organised 
 labour, or, at eight hours a day, 2400 million 
 hours of socialistic labour. The aggregate pro- 
 duct of all commodities, at present directed by 
 competing capital, but eventually by unified public 
 management, would also have a total value of 
 2400 million hours of labour, exactly as many 
 hours as are actually spent in work by one 
 million workers in the year. The hour of 
 labour x^o,ooo,<>oo of the yearly collective 
 labour of all, would be the common standard of 
 value, of which value 2400 million nominal units 
 could be, and would have to be, distributed as 
 " labour- certificates " or " labour-cheques " to the 
 labourers, in order that they might claim from 
 the public depdts the aggregate product of the 
 collective labour, worth also 2400 million hours 
 of labour. The total sum of labour for the 
 period would be about equivalent to the total 
 value of the produce for the same period. The 
 
84 SOCIALISM. 
 
 economic bureaus would credit the work done, 
 fix the value of the produce according to the 
 average standard of cost in social labour-time, 
 which would be known to them by this very 
 process of keeping the labour-accounts, pay out 
 cheques to individuals on their labour-credits, 
 and against these cheques deliver the products . 
 at the rate fixed by the social labour-cost. 
 
 Nothing appears simpler than the harmony 
 of this theory of value with the principal 
 socialistic demand, to make enjoyment pro- 
 portional to labour, and to apportion to each 
 his full value for his labour, or return for his 
 labour, as his private income, as " true, private 
 property," to establish universally " absolute 
 property and income founded on the individual's 
 own labour," and to cut off the abstraction of 
 the " surplus value " by a third party. 
 
 It is true that each does not receive his 
 own product ; socialistic production has, as its 
 object, that all should by a division of labour 
 produce for one another. However, if only the 
 work done by each individual were correctly 
 estimated in terms of the unit of value consist- 
 ing in the social labour-hour, — the better by 
 more, the worse by fewer fractions of the social 
 
SOCIALISM. 85 
 
 labour-time, the receipt of each from society 
 would be in proportion to his work performed 
 for society ; he would get back the equivalent 
 of his individual labour in the form of social 
 products for his enjoyment. 
 
 In another relation, too, it would seem that full 
 and fair compensation for all labour is at least 
 proportionally given. If, for instance, it were 
 urged that because the nation has also national, 
 communal, educational, church, and other 
 necessities in common, therefore the individual 
 could not receive the whole value of his work 
 in collective products, this would only apparently 
 be accurate. Suppose that from the products 
 of the 300 million socialistic labour- days even 
 one-third, i.e., the value of 100 million labour- 
 days, had to be deducted to provide for the 
 public expenditure, no doubt there would only 
 remain products to the socially estimated value 
 of 200 million labour days to be distributed 
 privately amongst the producers, who, however, 
 would have given 300 million labour-days. 
 But the consequence of this would merely be 
 that, for the performance of one labour hour, a 
 cheque for only two-thirds would be drawn, the 
 third third going for the common enjoyment of 
 
86 SOCIALISM. 
 
 the public property, being, as it were, a kind of 
 tax. Indirectly, therefore, there would be pro- 
 portionally equal income reckoned only by 
 the standard of individual labour, private pro- 
 perty accruing from this source, and in addition 
 to this absolute proportionality of taxation. 
 This is all consistently thought out. The only 
 question is: i. theoretically, whether the premiss 
 is correct, according to which the social cost 
 in labour is the standard of the value of com- 
 modities : 2. practically, whether the close 
 commonwealth of the socialists would be able 
 to cope with the enormous socialistic book- 
 keeping, and to estimate heterogeneous labour 
 correctly according to socialistic units of labour- 
 time. 
 
 The first question must at any rate pre- 
 liminarily be denied, since the " value" of com- 
 modities clearly does not depend solely on the 
 cost, but also on the value in use, i.e., the 
 urgency of the demand. Without considering 
 the varying use-value of different labour and 
 different products, it is impossible to conceive 
 a socialistic estimate of value, which could 
 take the place of the present market value as 
 contemplated by normal political economy. As 
 
SOCIALISM. 87 
 
 above mentioned, socialism must learn to make 
 a radical correction in its fundamental principle 
 of social labour-cost as a measure of the value 
 of commodities. This, it seems to us, is not 
 impossible ; we will leave it here undecided. 
 But the bare labour-cost value, as it has 
 been formulated up to now, invests the whole 
 economy of socialism for the present with the 
 character of a Utopia. If, for instance, the 
 socialistic citizen demands bread after a bad 
 harvest, the socialistic chief is not able to offer 
 him stones, or clothes, or amusement instead. 
 But he who demands the much desired bread 
 must submit to a rate beyond the cost-value, 
 so as to make him cut his coat according to 
 his cloth, in order that all may have at least 
 the needful amount of the deficient, but more 
 coveted, commodity. Therefore the socialistic 
 value — "exchange-value" — must not be deter- 
 mined only by the cost, but also at the same 
 time by the varying use-value ; otherwise 
 socialistic demand and supply would fall into 
 a hopeless quantitative and qualitative dis- 
 crepancy, which would be beyond control. 
 Socialism itself ought to attempt to place this 
 point, which has been up to now disregarded by 
 
SOCIALISM. 
 
 its theorists, beyond all doubt at the earliest 
 possible moment (compare p. 59).* 
 
 * This was attempted several times in the year 1877 
 in "Vorwarts," in the criticism on the "Quintessence of 
 Socialism." This paper gives to Marx's idea of " socially 
 necessary labour-time " a significance which includes in 
 the idea of the "socially necessary" what I call use- 
 value. By itself I have no contention to make against 
 this explanation, since it recognises, at least in principle, 
 the necessary influence of the varying demand in determining 
 the exchange-value on which I laid stress. Yet, per contra, 
 I am forced to make two observations. Firstly, that I am 
 not yet able to consider my conception of Marx's idea of 
 "socially necessary labour time" incorrect, for Marx 
 declares that commodities which contain "an equal quantity 
 of labour, or which can be produced in the same time," are 
 of equal exchange-value. Secondly, I must remark that, 
 if Marx agrees with th'e explanation in "Vorwarts," the 
 " socially necessary labour-time " would become useless as 
 a practical standard for the determination of value, on 
 account of the forcible insertion into the quantum of social 
 labour-cost of an entirely independent second factor in the 
 determination of exchange-value, viz., the social value in 
 use. I leave it undecided, whether Marx recognises the 
 explanation of his theory of standard of value as stated, and 
 content myself with maintaining that social labour-cost 
 and demand, both independent and separate, must be 
 brought to bear on the determination of exchange-value 
 in every economic epoch. 
 
 Postscript.— Herr Schramm's latest explanation of the 
 probable meaning of Marx's theory of value in "Vorwarts" 
 
SOCIALISM. 89 
 
 (1877, No. 128) ought to be examined. Herr Schramm 
 thinks " that he is able to say, in agreement with his entire 
 party," that " socialism does not seek or perceive any 
 standard for division in Marx's theory of value." If that is 
 the case, the dispute has no raison d'itre. Herr Schramm 
 himself, at the end of his reply, treats my theory of " natural 
 exchange value as serviceable " (see my " Gesellschaftliche 
 System," 3rd ed., § no et seqq.), in order to obtain an 
 adequate standard of division ; in this theory I give inde- 
 pendent effect to the use-value. 
 
 For the more detailed discussion of the important 
 question of the forms of determination of exchange value, 
 the reader may turn to the third volume of my " Bau und 
 Leben," which has just been published. 
 
VII. 
 
 ^Q^^HIS is a convenient place to deal with 
 the point which has been previously 
 noticed (Chap, iii.), a point which has 
 hitherto been the weakest, or at any rate the 
 obscurest, in the formulation of the socialist's 
 programme — namely, the economical classifica- 
 tion and control of the work of individuals 
 within the enormous extent of the collective 
 body of labour. 
 
 By what standard should all labour force 
 be distributed throughout the wide area of 
 production ? Will its units readily consent to 
 be removed, transplanted, and taught anew by 
 the officers of the departments ? 
 
 The difficulty which consists in the econo- 
 mical classification of individual labour-power 
 within the whole social labour body, is very 
 simply solved in the liberal national economy 
 of the present day. 
 
 The rate of wages does not simply conform 
 
SOCIALISM. 91 
 
 to the actual cost [in labour-time], but it falls 
 wherever, whenever, and in whatever branch of 
 labour there is no demand apparent ; that is to 
 say, where less use- value makes itself felt ; and, 
 on the other hand, the price of labour rises 
 in the place and time, and with regard to the 
 object, of rising and more urgent demand ; that 
 is, as the use-value increases. The result is, 
 that individual workmen are prompted by their 
 own interest to remove from the production 
 which has lost its value in use, and are attracted 
 to that for which there is a demand, and this 
 entirely apart from official pressure. Freedom 
 of migration is the aspect of public law which 
 allows the individual workman to move, for his 
 own interest, to that point where the highest 
 wages are to be obtained. 
 
 The socialist state would never be capable of 
 coping with its task if it did not follow on these 
 lines, if it fixed the day's wage only on the 
 basis of sheer cost in labour-time, instead of 
 rating it, where there is a local and temporary 
 fall in the use-value of any kind of work, more 
 or less below the simple day's work ; and, where 
 there is a local and temporary rise of the use- 
 value of the same, above the simple day's work, 
 
92 SOCIALISM. 
 
 as the case may be. If it is not competent 
 to do this, it will never be able to check the 
 unproductive accumulation of commodities, but 
 will be compelled to order all workmen to 
 their several posts of labour. On the contrary, 
 if the use-value is included in the social labour 
 estimate (the social value in exchange), private 
 interest will withdraw the workmen, then as now, 
 from unproductive fields of labour to those which 
 are productive. No compulsory assignment 
 of posts would be necessary ; all the real advan- 
 tages of liberal free migration and a free choice 
 of employment might then be rather considered 
 as transferable to the social state. The free- 
 dom of individuals in turning their energies 
 to work would be preserved. A profitable 
 re-arrangement of labour power would be made 
 possible for the officials appointed to organise it. 
 In itself the taking into consideration of the 
 use-value in determining social value rates 
 is not inconceivable : with unified production it 
 would very soon be noticed what kinds of labour 
 are in excess, or in demand, and where this is 
 the case. The alterations and diminutions in 
 the demand might be much better surveyed as a 
 whole. Lower or higher rates would have to 
 
SOCIALISM. 93 
 
 be fixed accordingly, in order to stimulate the 
 migration of labour suitably to economical 
 requirements. But then the present mistake in 
 their theory of value, according to which the 
 value conforms to the social labour-cost alone, 
 would have to be abandoned, in respect of the 
 estimated value of labour as well as in respect 
 of the estimated value of productions. Both 
 would have to be lowered when the use-value 
 falls, and raised when the use-value rises. Un- 
 less this use-value is comprised in the social 
 estimate, that is, without a corresponding imita- 
 tion of all incidents which affect value in the 
 present market, it is not conceivable that any 
 authoritative direction of the consolidated pro- 
 ductive system could keep the demand for 
 labour and for goods, as to quantity or kind, in 
 harmony with the supply of labour and of goods, 
 — that is, could preserve that economical balance 
 of work and consumption which is daily re- 
 established, though only by jerks, under the 
 influence of the market prices, which take note 
 of fluctuating use-value (demand), as well [as of 
 labour-cost in production]. 
 
 It may therefore be seen that three things 
 depend upon the correction of the theory of 
 
94 SOCIALISM. 
 
 exchange value in question. I. The possibility 
 of maintaining and of generally directing so 
 great a body of labour, production, and demand 
 in economical equilibrium. II. The granting . 
 of the necessary individual freedom of labour 
 and consumption. III. Lastly, the stimulation 
 of each individual at all times to the economical 
 employment of labour-power and of goods. By 
 this means the new condition of things would 
 indeed come very much nearer to the life of 
 the present day, and to its usages. The good 
 points of the liberal political economy, individual 
 freedom, free migration, free choice of occupa- 
 tion,, might perhaps be maintained in force, 
 whilst the want of united organisation would 
 come to an end. 
 
 Now whether it would ever be possible to 
 organise a social system of assessing values 
 (a determining of the social exchange value), 
 according to a scale in which the particular and 
 changing use-value of all individual labour and 
 all particular produce should be a factor, we will 
 not decide for the present. The question has 
 as yet hardly been discussed, and is, therefore, 
 not ripe for decision. But we venture to 
 affirm, absolutely, that to have regard to the 
 
SOCIALISM. 95 
 
 use-value in the constitution of the exchange 
 value (social value) of labour and of produce, 
 must be considered as the first and most decisive 
 preliminary condition. In other words, if 
 socialism is not able to preserve all the good 
 points of the liberal system, such as freedom of 
 labour, and of domestic supply, and then to annex 
 to these its own undeniable specific advantages 
 (of reciprocal supervision and control of labour ; 
 a more efficient but free discipline ; a more 
 certain check against over- work, and against the 
 neglect of children and women ; the hindrance 
 of exploitation by private interest ; the removal 
 of idleness, and of unproductive parasitic life ; 
 the prevention of corruption, of boundless 
 luxury, of crimes against property, etc.), — if it is 
 not able to accomplish this, it has no prospect 
 of and no claims to realisation ; for all the last 
 named advantages may be converted into their 
 opposite evils in a polity resting on compulsory 
 labour, and only held together by mechanical 
 coercion, if the freedom of individual movement 
 cannot be secured its due and wide scope for 
 action. It is remarkable, and even comforting, 
 that all which is required to make socialism so 
 much as a matter of practical discussion, urges 
 
96 SOCIALISM. 
 
 it to preserve, and even to intensify, the brighter 
 elements of the liberal economic system. 
 
 I trust that I have not trespassed too far on 
 the patience of the reader by dwelling so long 
 in the preceding passages on the principles 
 of the theory of value. It is our conviction — 
 the result of careful scientific examination- — that 
 this theory has no less significance for the 
 future than any theory of Rousseau, and of the 
 other spirits of the first liberal bourgeois revo- 
 lution. The correction of the now widespread 
 theory of " social value in terms of labour-cost " 
 is perhaps significant for the history of entire 
 nations. 
 
VIII. 
 
 ! E have found thus far that in relation 
 to the social production, circulation, 
 value-assessment of goods, the social- 
 istic principle does not permit anything to 
 survive which essentially belongs as attribute 
 or consequence to the system of private produc- 
 tion. Private wages, speculative separate capital 
 (private and belonging to companies), compe- 
 tition, market and Exchange, market price and 
 exchange price, commerce fostered by advertis- 
 ing and by puffing, the splendid arrangements for 
 display of wares, use of coinage, credit, hire and 
 lease, as well as all the present forms of private 
 income (wages, profit, interest, ground and house 
 rents), the derivation of public income from 
 private income (that is to say, existing taxation), 
 — all this, which makes up the essential charac- 
 teristics of the modern economic system, could 
 not co-exist fundamentally and in the long run 
 with the " socialist " principle of production and 
 
 7 
 
98 SOCIALISM. 
 
 circulation of commodities — it would belong to 
 the " surmounted categories of history." Quite 
 a new world presents itself, which it is wholly 
 impossible to realise when one first begins to 
 occupy one's self with the theories in question. 
 Collective production on a large scale by 
 division of labour would be the only thing 
 which would pass over out of the present into 
 the socialist state as ripe fruit of developed 
 capitalistic society, and would moreover be 
 generally accepted. 
 
 Let us now turn to the politico-economical 
 categories of the distribution and consumption 
 of useful things, to income and to the application 
 of income, and ask, What form would income 
 eventually assume ? how would it be applied to 
 consumption, and to the building up of private 
 property ? 
 
 Let us first of all bear in mind that all 
 private incomes generally — apart from gifts 
 and freewill offerings — would, without distinc- 
 tion, be the income of labour! The assign- 
 ment of produce would be accomplished at the 
 public delivery store as a liquidation of credit 
 for labour rendered. The distinction between 
 profit and wages would belong to the " abso- 
 
SOCIALISM. 99 
 
 lutely surmounted categories of history" (Marx). 
 It has also been demonstrated that the whole 
 community would no longer derive its income 
 from the previously determined private income 
 of citizens, as in a liberal capitalistic society ; 
 that is to say, that taxation in its present sense l 
 would be inconceivable. That which the ■ 
 community had sanctioned as the demand for 
 public purposes would be drawn straight from 
 the public stores, and would be applied in 
 payment of salary to the public servants, 
 since the community would have in hand all 
 stores of produce in kind. It is remarkable 
 that this strict inference, which sets aside with 
 imposing simplicity taxation and everything 
 connected with it, is not drawn, or at least not ' 
 discussed, by the socialists. It is quite clear 
 that the imposition of taxes as a method by 
 which the state income is derived from private 
 income is only a necessary attribute of states 
 where individuals produce at their own discre- 
 tion ; in the socialist state this — even as a 
 single tax, viz., an income tax — would be a 
 roundabout process [literally, a procession of 
 a church round a village]. 
 
 Now, how would matters stand with respect 
 
SOCIALISM. 
 
 to the possible employment of private in- 
 come ? 
 
 We may conceive of four ways of the volun- 
 tary expenditure of all private income : 
 
 I. One's own consumption. 
 
 II. One's own savings (direct accumulation 
 of property). 
 
 III. Handing over to others with a view 
 to reimbursement (indirect accumulation of 
 property). 
 
 IV. Donations to third parties [i.e., parties 
 not under contract to you]. 
 
 Let us now review, only briefly and generally, 
 these four cases, with reference to the conse- 
 quences of the socialistic principle. 
 
 I. Private consumption ! 
 
 The principle of production by collective 
 administration does not in any way prevent 
 each one from procuring with his labour-wage 
 what suits his need or his pleasure. In certain 
 cases, indeed, where the requirements were 
 physically or morally injurious, or irreconcilable 
 with its principles, the self-complete industrial 
 commonwealth might reject or radically cut them 
 off, by not producing or offering for sale the 
 means of gratifying them. These would be the 
 
SOCIALISM. 
 
 only cases in which a private application of 
 income and the free choice of what suited 
 the individual's wants would be excluded (see 
 above, chap. iii.). 
 
 II. Saving and the accumulation of private 
 property. 
 
 This, too, so far as it has not for its object 
 the means of production employed by collective 
 labour, is perfectly compatible with the main 
 principle of socialism. In opposition to all 
 contrary views, which have been very widely 
 spread, it must be emphatically stated that 
 socialism does not universally exclude either 
 property in general, or private property in 
 particular. The principle of collective labour 
 does indeed demand plainly, and pretty exclu- 
 sively, collective capital, but it does not without 
 ceremony deny the admissibility of private pro- 
 perty. As immediate consumption at pleasure 
 is compatible with it, so also is the private 
 accumulation of useful things at pleasure, — if 
 they do not serve for production ; so too is 
 the formation and bequest at pleasure of private 
 property in the means of enjoyment. The 
 total suppression of private property, as also 
 the unceremonious levelling of all private 
 
io2 SOCIALISM. 
 
 requirements, is not a consequence of the 
 admitted principle of socialism in the present 
 day. 
 
 It is only in connection with the means of 
 collective labour, not in connexion with the 
 means of individual consumption, that collective 
 ownership is projected or is in any way possible. 
 Common ownership is absolutely impossible in 
 respect to the means of subsistence which only 
 one person can eat; in respect to clothing which 
 only one person can wear ; and the means of 
 education of which only one person can avail 
 himself. It is all the more necessary to lay 
 special stress upon this, as public opinion in the 
 present day is inclined to ascribe to the col- 
 lective principle a communistic and levelling 
 tendency in the domain of the expenditure of 
 income and of domestic economy, to a far 
 greater extent than socialism warrants, or than 
 its writings express ; while people seem as yet 
 hardly able to grasp the gigantic revolution in 
 the province of production and barter, and as 
 a natural result considerably to undervalue it. 
 Especially on this point it is to be regretted, 
 and can produce no good, that people will not 
 bring themselves quietly and considerately to 
 
SOCIALISM. 103 
 
 form a clear conception of the real bearing of 
 the collective principle, and to distinguish 
 clearly between the essential quality and the 
 accessories of socialism. The result is that its 
 bearing is in some respects undervalued, and 
 in others distorted into gigantic proportions. 
 Even educated people betray a scandalous 
 ignorance on the question of " negation of pro- 
 perty," which is already clearly perceived by 
 thousands of workmen, and is readily ascribed 
 to the malevolence of the upper classes. 
 
 We therefore say emphatically that it is not 
 correct that the system of collective property 
 endeavours to suppress all and every private 
 possession of property, or that it is the absolute 
 negation of the right of private ownership. 
 The negation only applies to private property 
 in the means of production, which is to be 
 replaced by collective ownership of the means 
 of production (plots of land, factories, machines, 
 etc.). Private property in the means of en- 
 joyment will not be restricted, nay, cannot 
 possibly be restricted. Probably no socialist of 
 the present day has the folly and stupidity to 
 deny the private use and private ownership 
 of the means of subsistence, clothes, furniture, 
 
104 SOCIALISM. 
 
 books, etc. Collective property would be intro- 
 duced only in relation to capital, or the means 
 of production, which is now already carried 
 on by division of labour (i.e., collectively or 
 co-operatively), just as there is now state and 
 communal ownership with regard to streets, 
 spaces dedicated to the public, establishments, 
 locomotion, education, justice, police, and national 
 defence. 
 
 The object sought for is therefore an exten- 
 sion of the principle of collective property, 
 which is already widely operative, to the means 
 of production through division of labour, that 
 is, to social capital : only to the extent of this 
 enlargement of collective property is there to 
 be a contraction of private property. We lay 
 special emphasis upon this, not to defend or 
 to oppose in this place such enlargement of 
 collective property, but in order to deprecate 
 a false statement of the question. Any one 
 who has the least acquaintance with socialistic 
 literature knows also how very much this 
 insinuation, as though socialism wanted un- 
 ceremoniously to suppress every kind of private 
 property, is made use of by the leaders of the 
 proletariat, as a ground of accusation against 
 
SOCIALISM. 105 
 
 the well-to-do and educated classes of inten- 
 tional misunderstanding, of a wish not to 
 understand, of mean calumniation, and of base 
 denunciation. It is, in fact, not true that 
 socialism demands that every one should annu- 
 ally "share and share alike." It demands 
 a paying off of private property in the means 
 of social production, similar to the paying off 
 of feudal burdens, — a putting together of these 
 means of production into the possession of the 
 whole community, and a distribution of the 
 annual produce in commodities created with 
 the help of collective capital, in the ratio of 
 the labour-time put in by each workman (who 
 will then be a salaried public servant). It is 
 possible to consider this demand to be imprac- 
 ticable, or even opposed to its own aim ; but it 
 is untrue to say that it includes a periodical 
 sharing of the fruits of private labour and thrift 
 with loafers, who share the food but not the 
 work ; or cherishes the nonsensical thought of 
 a suppression of private property, even in 
 means of enjoyment, the consumption of which 
 is from their very nature private and personal, 
 belonging either exclusively to the individual 
 or to the separate circle of the family. It is 
 
io6 SOCIALISM. 
 
 also not true that the principle of collective 
 property in general is something new, which 
 assumes a hostile attitude to the existing moral 
 and legal system. For all " moral persons "* 
 represent collective possession in its widest 
 extent, from the State, the Church, the muni- 
 cipality, down to the very meanest family. The 
 question is solely this : Ought the means of 
 production, as far as they are the basis of the 
 collective national labour, which already ope- 
 rates through division of employment, to be- 
 come henceforth the collective property of the 
 national, or, if that be better, of the communai 
 body of labour ? This is the question. What- 
 ever decision one may come to, it is undeniable 
 that neither is private property in all kinds of 
 commodities, nor is the right of property as 
 such, hereby called in question. All possibility 
 of a rational discussion is absent, and indeed 
 we are sure only to drive the proletariat into 
 a more rooted passion, if, instead of grasping 
 exactly the real question, we imagine things of 
 socialism none of which it desires. This is 
 
 * [/.<?., societies or elements of society, such as can be 
 regarded with reference to certain acts and qualities as 
 corporate units.] 
 
SOCIALISM. 107 
 
 very dangerous ; for if we understand by social- 
 ism only an incessantly recurrent " division," 
 whereas it requires a continuous accumulation 
 of the means of production, we shall, in refuting 
 it, always be proving too much, and therefore 
 nothing to the point. 
 
 Again, the denial of all private and family 
 right of inheritance is by no means a necessary 
 consequence, or at all an essential interest, of 
 socialism. 
 
 The latter has reason to say to its blustering 
 adherents, who wish to abolish the right of 
 inheritance, " The Lord preserve me from my 
 friends ! " The principle of collectivism allows 
 precisely as much room for the right of inheri- 
 tance as it does to private property, whatever 
 nonsensical fictions may have been promulgated 
 on this point by old and new socialists, and 
 however blunderingly socialist writers even 
 to-day make the mouth of the proletariat water 
 with the suppression or essential limitation of 
 the right of inheritance. Of course no private 
 right of inheritance could adhere to capital, 
 because it would have become the inalienable 
 collective inheritance of the whole community. 
 The power of the private owner of capital to 
 
io8 SOCIALISM. 
 
 conduct the social process of production, and 
 to exploit it for his own benefit, socialism 
 cannot allow to exist or to be established, and 
 consequently cannot suffer to be bequeathed. 
 But if socialism could gain the point that the 
 means of production, the capital, should abso- 
 lutely be incapable for the future of being private 
 property, somewhat in the same way as the 
 point was gained in the civil revolution of 1 789, 
 that feudal claims on real property should not 
 continue, and real burdens of interest should 
 not be established anew — then, on the other 
 hand, the inheritance of means of enjoyment, 
 such as clothes, furniture, means for culture and 
 for amusement, private works of art, etc., might 
 very well be allowed, without injuring even a 
 hair of the chief fundamental principle of 
 socialism. This right of private inheritance 
 would have in its own nature a limited extent, 
 for private superfluities of the means of pleasure, 
 which would be the only source of property 
 left at death, would be very much contracted, 
 since the wealth in means of enjoyment of the 
 private person in the present day would in the 
 main fall away, along with his interest-bearing 
 property in the means of production, and along 
 
SOCIALISM. 109 
 
 with his monopolist sources of rent. To many 
 it has seemed inconceivable why Karl Marx, 
 the most influential and important socialist, has 
 not proclaimed loudly, and as a matter of 
 primary importance, the abolition of the right 
 of inheritance in the commonwealth of the 
 future. A little consideration is sufficient to 
 show that for one who starts from his premiss of 
 collective capital, the right of inheritance in the 
 private means of enjoyment has a most subor- 
 dinate signification. Even if the socialists 
 were able to-day to bring about a liquidation 
 of private capital after the manner in which the 
 feudal claims on property were set aside in the 
 civil revolution, they would still be able to allow 
 the inheritance of the sum which had been 
 received in liquidation ; for, as has been shown 
 above in the second chapter, the compensa- 
 tion-capital, or perhaps compensation annuities 
 for twenty or twenty-five years, would be 
 granted only in the form of means of enjoy- 
 ment, not in the form of means for carrying 
 on trade. The sons of millionaires would take 
 care that in a few generations the present 
 plutocrats' inheritable property in means of 
 enjoyment should reduce itself within narrow 
 
socialism. 
 
 limits. The right of inheritance has a lucrative 
 object — if the concrete expression be allowed — 
 only so long as private property consists in 
 capital (the means of production and sources of 
 rent); if this were excluded, only modest 
 properties left at death would come into ques- 
 tion, which would not produce a disparity of 
 hereditary private property dangerous to the 
 socialist state. It is simply extraordinary that 
 the socialistic agitation has not long ago more 
 loudly and more solemnly protested against 
 the imputation of setting aside of all rights of 
 family and testamentary inheritance. It could, 
 as we may see, on its own principles most 
 honestly utter this protest. 
 
 According to what has been remarked re- 
 specting the result of socialism, as a system of 
 national economy, on the province of domestic 
 economy and consumption, a judgment may be 
 •easily formed as to its results on family life and 
 marriage. 
 
 There may, perhaps, be actually found here 
 and there among the socialists of the present 
 day the " free " point of view respecting 
 marriage and family life — sometimes to the 
 very level of " free love." Ominous asser- 
 
Socialism. 
 
 tions and intimations may be quoted with 
 respect to this. But even among the well-to- 
 do and educated " free love," like " free 
 religion," is theoretically and even practically 
 very widely spread. There is, therefore, only 
 this question for the far-seeing politician, — 
 whether the removal of indissoluble monogamy, 
 of bringing up families, and of the right of 
 family inheritance, is or is not on principle a 
 postulate of socialism. But this question must 
 be answered in the negative. 
 
 The abolition of private property in the 
 means of collective production erects such a 
 strong indirect barrier against any far-reaching 
 disparity of household expenditure, of family 
 training, and of inherited property, that the 
 social state more especially could, without any 
 danger, permit individual freedom of house- 
 keeping, of family training, and of inherit- 
 ance of means of enjoyment. Not much more 
 would be required than compulsory school 
 attendance, to the same extent as at pre- 
 sent ; nor would there be any need for the 
 Fourier rooms for eating, sleeping, and play- 
 ing. The present arrangements for kitchen 
 work, washing, lighting, heating, etc., would of 
 
SOCIALISM. 
 
 course have to be differently organised, simply 
 because domestic servants — house-slaves, as 
 socialism calls them — cease to be, and would 
 have to be replaced partly by mechanical arrange- 
 ment, and partly by free professional services. 
 Although no such things as luxurious private 
 kitchens and private drawing-rooms would be 
 conceivable, there would be no necessity to re- 
 nounce the private table or the private dwelling, 
 and an impulse would be given to mechanical 
 contrivances for fulfilling numerous require- 
 ments now supplied by servants. The whole 
 configuration of the house would be different : 
 there would be no palaces, and also no dens of 
 squalor; but private dwellings and secluded 
 family life would not by any means be impos- 
 sible. The socialistic Utopia of the present 
 day would certainly have to expect the greatest 
 opposition to " free love," etc., from a popula- 
 tion which would be almost entirely on the same 
 level as the working middle classes of the 
 present day. There would be at least quite 
 as little inclination to have their children, 
 husbands, mothers, fathers, relations, taken 
 from them by the State, and by schoolmasters, 
 as there is to-day among the working middle- 
 
SOCIALISM. 113 
 
 classes. Crazed pedagogues, libertines, and 
 other fanatics of socialism would not thrive 
 contra naturam, but would break their heads 
 against stone walls, as they deserve. Of course, 
 the dwellings' question would come locally into 
 immediate connexion with the arrangements 
 of production; and the employment of women's 
 labour, now no longer needed in the family, would 
 find its fitting place without effort. We must 
 not deceive ourselves about this — that particu- 
 larly with regard to the purity of family life, to 
 motives for marriage, to dwellings' improvement, 
 to occupation for women, to care of children, 
 socialism might soon obtain an enormous force 
 of propagandist persuasiveness, if only it would 
 lay aside those deeply irreligious and mate- 
 rialistic tendencies, which are not actually 
 contained in its principles, which it shares with 
 all classes of the present day, and which it has 
 for the moment borrowed wholesale from the 
 fancy of its earliest French founders.* 
 
 Now that we have discussed the freedom of 
 personal expenditure, saving, and bequeathing 
 of private income, we pass on to discuss — 
 
 * G. Fourier's " Phanerogamic" etc. 
 
 8 
 
ii4 SOCIALISM. 
 
 III. The question whether socialism ah*, 
 permits of placing people's savings to their 
 credit, that is to say, whether it can or cannot 
 organise a method of saving and insurance 
 in the way of loan and credit ; and, if it is 
 capable of doing so, how it would funda- 
 mentally organise it. 
 
 In this relation it is at once evident that the 
 transfer of savings into the future, in the way 
 of interest-bearing credit, would be rigorously 
 excluded. No private ownership would be 
 permissible in the means of production — private 
 cession of the employment of capital, hence 
 interest as remuneration for the use of capital, 
 would no more have any meaning or scope. 
 
 On the other hand, there would not be any- 
 thing to prevent one from transferring savings 
 to a credit-account up to certain fixed sums and 
 periods. All the wage of labour that is not 
 drawn as soon as earned might be credited to 
 , the saver in its full nominal value for the future. 
 The savings and insurance capital falling due, 
 ! and those freshly credited, would on the whole 
 pretty well cover one another, and there need 
 ^ be no disarrangement of the collective economy 
 i in connection with these transfers of simple 
 
SOCIALISM. US 
 
 rights to payment in kind which bear no 
 interest : if the collective production in general 
 could be organised, then this system of credit 
 entries of savings falling due at will, or by 
 instalments, could also, be carried out. 
 
 The concentration of larger incomes for 
 private objects (such as travel, study, the work 
 of societies, etc.) would by no means be ex- 
 cluded as a matter of principle, as the oppo- 
 nents of communism generally assert, and as 
 we, too, for a long time took for granted ; only 
 the taking and giving of interest would be more 
 radically set aside than ever was accomplished 
 by the canonical law against usury ; and Aris- 
 totle's view, that money should not breed, would 
 be most thoroughly realised. 
 
 IV. Lastly, the capacity and liberty of 
 donation to relations, to a third party, to 
 societies, etc., is not in any way opposed to the 
 principle of the collective system. Sociality, 
 hospitality, benevolence, free relief of the poor, 
 free pursuits of humanitarian, scientific, and reli- 
 gious interests in the form of societies, may 
 all be thought of as finding a place in a state 
 of socially organised production. We bring this 
 emphatically forward, since people often tranquil- 
 
ii<5 SOCIALISM. 
 
 lise themselves with the thought that socialism 
 is an utter impossibility for this reason, that it 
 excludes, along with all private property, also 
 all individual freedom of movement for the 
 purpose of research, charity, social agitation, 
 travel, insurance for old age, because it ex- 
 cludes the transference from time to time of 
 individual command of commodities to others. 
 This want of liberty might appear in the practice 
 of a despotic materialistic social state, but it is 
 not an absolute fundamental result of the leading 
 socialistic principle. For the support of private 
 persons, clubs, corporations, social unions — 
 even for the support of churches — donations 
 might be made payable by any one out of what 
 is due to them on their labour-time, without 
 any violation of the socialistic principle. 
 
 We touch upon yet another point. Socialism 
 of the present day is out and out irreligious, 
 and hostile to the Church. It says that the 
 Church is only a police institution for upholding 
 capital, and that it deceives the common people 
 with a " cheque payable in heaven " ; that the 
 Church deserves to perish. 
 
 The Church, and indeed all religion, is fanati- 
 cally hated by many socialists, and certainly not 
 
SOCIALISM. 117 
 
 without some fault on the other side. But this 
 tendency is not a necessary consequence of the 
 economical socialistic principle, at least not in 
 respect to such religious institutions as have 
 ceased to be united with antagonistic worldly 
 interests and classes. Should ever socialism be 
 established in the remote future, then the form 
 of maintaining the Church would be, it is 
 probable, that of support by free contributions 
 of the members of the Church, drawn from 
 their labour-credit, or in the form of renounced 
 labour-certificates. Moreover, direct support 
 of the Church from the national income, its 
 financial treatment as a public institution, would 
 at all events be possible, although not very 
 probable. At any rate, it would still continue 
 as an institution, of the nature of a society 
 maintained by the free contributions of its 
 adherents. This last form of support and 
 income would doubtless exist for many institu- 
 tions outside the State, — for the prosecution of 
 social, religious, scientific, technical, political, 
 and socialistic efforts. In this case we limit 
 ourselves simply to stating the economical 
 coherence of the matter. It is simply im- 
 possible to predict whether the Christian Church, 
 
n8 SOCIALISM. 
 
 or *' black international," now on the one hand 
 so violently divorced from the liberal state, on 
 the other hand so thoroughly hated by the " red 
 international," will govern and influence hearts 
 in the socialistic state. A form of Church 
 support, rendering its freedom and indepen- 
 dence of action possible, is, as has been shown, 
 not at all inconceivable in the socialist state. 
 
 Likewise science, friendship, humanity, 
 charity, general usefulness of every kind, has 
 still in theory full scope for exercise, in as far as 
 socialism remains limited to its true principle, 
 the realization of the system of collective pro- 
 duction. Objections to these possibilities might 
 be fully accounted for by the craziness and 
 frivolity of individual socialists. These objec- 
 tions, on the contrary, cannot be established 
 out of the economical principle, which has 
 become more and more the central point of 
 socialism, and which will, as it is now believed, 
 form the centre of the chief social battle in the 
 future. Would that people would at last desist 
 from the dangerous self-deception of attack- 
 ing mere windmills ! The overthrow of " the 
 highest and most ideal possessions of civiliza- 
 tion" would quite certainly be associated with 
 
SOCIALISM. 119 
 
 the wild revolutionary realization of socialism 
 (which is hereby promoted). But ' such an 
 overthrow would not be the result of a growth 
 by which the question in dispute between the 
 third and fourth estates should be strictly con- 
 fined to its politico-economical core, and its 
 further development should be limited to the 
 path of gradual reform. 
 
IX. 
 
 >N the previous discussion the socialis- 
 tic principle has been traced (I.-VI 1 1.) 
 into the province of all the principal 
 categories of the national economy. This has 
 been accomplished in such a way that the 
 fundamental thought of socialism has been 
 expounded in the most reasonable and practical 
 manner conceivable. 
 
 It has been proved (pp. 55, 91, and elsewhere) 
 that Marx's theory of democratic collectivism — 
 the social democracy — represents an impractic- 
 able programme, which leads down to economi- 
 cal chaos ; for till now this democratic socialism 
 has retained as its basis Marx's theory of value 
 as depending on social labour-cost. There is 
 no room for the practical acceptation of the 
 use-value, and for putting a premium on labour 
 which is economically profitable. It also does 
 not take into consideration the restoration and 
 sure establishment of that authority, which the 
 
SOCIALISM. 
 
 legally organised public production would ren- 
 der necessary in an incomparably higher degree 
 than the present mode of production by means 
 of capital ; on the contrary, in its " common- 
 wealth " it wholly loses sight of the question of 
 civil and ecclesiastical authority. This demo- 
 cratic collective system is evidently in complete 
 antagonism with the conditions laid down by 
 us (pp. 55, 91,) for an at any rate conceivable 
 realization of collective production ; and hence 
 our "Quintessence" is not, and never was 
 intended to be, an advocate for democratic 
 socialism. I have, meantime, more fully ex- 
 pounded the utter impracticability of the latter 
 in the little pamphlet (1885) entitled* "The 
 Hopelessness of Social Democracy" (first and 
 second letters), which only pursues further the 
 critical objections of the " Quintessence." 
 
 What has appeared to us in the " Quint- 
 essence" especially objectionable, is the principle 
 which has been dangled as a bait before the 
 proletariat in a spirit absolutely opposed to collec- 
 tivism, viz., that each labourer must receive 
 apportioned to him precisely the produce of his 
 
 * "Die Aussichtslosigkeit der Socialdemokratie " (1885). 
 
SOCIALISM. 
 
 own labour, though even in the socialist state 
 it is only the produce of the whole community 
 that can be available for division. It is abso- 
 lutely impossible to ascertain how much of the 
 value of the common produce each individual 
 has produced, especially as, even in the social 
 state, this would be a result not only of personal 
 labour, but also of the means of production 
 belonging to the collective body, and of the 
 help afforded by nature. The question would 
 also arise, whether paying a man the value of 
 his work would be as just as democratic social- 
 ism supposes, for one's capacity for work is not 
 purely a matter of personal merit, but is to a 
 large extent an inheritance from parents, and 
 from remote ancestors. The leading promise 
 of social democracy is practically and theore- 
 tically untenable ; it is a delusive bait for 
 the extreme individualistic fanatic craving for 
 equality among the masses. 
 
 It cannot but seem almost unaccountable 
 that the writers on social democracy have not, 
 above all things, developed their theory im- 
 partially in the direction of full acceptance, and 
 higher intensification, of the influences which 
 are the private guarantees of productive admini- 
 
SOCIALISM. 123 
 
 stration ; by preserving productive competition 
 of labour, according to the principle of the 
 social value of the work done, socialism might 
 soonest hope to become practicable, and to 
 harmonise with all the good sides of the his- 
 torically existing economical system, and to 
 become capable of adaptation and of organiza- 
 tion. But upon closer examination this neglect 
 may be easily accounted for. 
 
 As soon as you take out of the theory of 
 social democracy the two essential parts, viz., 
 granting to each one the whole and full profit 
 of his individual work, and measuring this 
 profit according to the extent of the contri- 
 bution to the social quantity of labour-time ; as 
 soon as you put a premium on economical 
 merit, take into consideration the use-value of 
 the contributions of work and of the produce, 
 keep in view the assurance of a firm authori- 
 tative guidance of the immense business of 
 collective production, — as soon as you do this, 
 you have scattered to the winds the spirit of 
 democracy ; nothing more can then be said 
 about the equal share of every individual in 
 the control, or about a division of the produce 
 of social labour which shall be equally just to 
 
i?4 SOCIALISM. 
 
 all, or even equal throughout. Socialism has 
 then no further charm for the masses. Liberty 
 — at any rate the anarchical liberty which 
 consists in setting aside all government and 
 authority in the social commonwealth — has 
 come to nought. Mastership and exploitation 
 can break in again in broad streams. Hence 
 social democracy would be sawing off the branch 
 upon which, as a party, it sits, if it tried to free 
 itself from its critical blots (vide p. 55 and p. 91; 
 also vol. iii. of my "Bau und Leben," the section 
 on the theory of value), and renounce Marx's 
 theory of collectivism. It will probably never 
 do this openly. 
 
 Nevertheless, the intellectual work even of 
 democratic socialism is not lost. 
 
 Once for all the question has been started 
 theoretically, Under what conditions can the 
 production of commodities as a public function 
 be conceived from the general standpoint of 
 political economy? This discussion is not with- 
 out importance, in the face of the gradual 
 growth of establishments organised by the public 
 authority, even in the province of the social 
 circulation of material, which consists of the 
 production and transference of commodities. If 
 
SOCIALISM. 125 
 
 a good economical system of collective produc 
 tion were devised, which is as yet a long way 
 off from being the case (vide my " Bau und 
 Leben," vol. iii.), it would still not have been 
 proved that it ought to be introduced suddenly 
 and exclusively, without any regard to the 
 many, perhaps more important, extra-economical 
 interests, which nevertheless might still stand 
 forbiddingly in its path. If ever an ordered 
 system of collective production be unfolded in 
 the distant future, its success would certainly 
 be only slowly achieved, and certainly far more 
 by the process of the self-annihilation of capital 
 in competition, and by the self-dissolution of 
 the dominant liberal capitalistic system of 
 business, than by the victory of the barricade ; 
 far more by the necessity of self-preservation, 
 realised by the whole state, than by a violent 
 blow from beneath. But, till then, there is still 
 no doubt a long time to wait. 
 
 Practically, too, the democratic collective 
 system has rendered an essential service, 
 namely, by critically and politically suggesting 
 the "positive social reform," which has been 
 taken in hand by the government in Germany 
 since the last edition of the "Quintessence" was 
 
126 SOCIALISM. 
 
 published. The present author has meanwhile 
 expressed his views respecting the whole extent 
 of the problem of this " positive social reform," 
 in three little pamphlets : "The Hopelessness of 
 Social Democracy" (three letters), "Compulsory 
 Incorporated Benefit Funds," and "The In- 
 corporation of Mortgage Credit." 
 
 The writings are perhaps adapted to convince 
 the reader that the " social question " includes 
 to-day, as at all times, in a complicated whole, 
 many particular problems in relation to reform, 
 a multiplicity of particular social questions, 
 and that the solution of these cannot take place 
 through the overthrow of society as it is by the 
 introduction of a radically new society, but only 
 through the progress of existing society and of 
 its law. To the legitimate demand of social 
 democracy, that there shall be furnished even 
 to the proletariat of industry, as a result of 
 their labour, a position worthy of manhood, 
 and something more than the barely necessary 
 share of the produce of the national labour 
 community ; that the abuse of the superiority 
 of capital and of credit shall be averted ; that 
 a sense of joint responsibility in relation to 
 poverty and misfortune shall be awakened ; 
 
SOCIALISM. 127 
 
 that a public economic management shall be 
 introduced, in so far as the capitalistic economy- 
 becomes actually useless, — to this demand the 
 most complete satisfaction can be given in the 
 way of positive gradual reform, without sup- 
 pressing capital in the shape of private property, 
 but rather by generalizing it. Particulars of 
 the process will be found in the pamphlets 
 just mentioned. In the present book our task 
 was not to furnish a critical refutation of, nor 
 yet a positive (reformatory) attack upon, social 
 democracy, but to portray and open up the circle 
 of thought presented by the collective principle, 
 whether democratic or not democratic. 
 
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