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MARXISM VERSUS 
 SOCIALISM 
 
 VLADIMIR G. SIMKHOVITCH, Ph.D. 
 
 Associate Professor of Economic History 
 at Columbia University 
 
 NEW YORK 
 
 HENRY HOLT AND COMPANY 
 1913 
 

 Copyright, 1913, 
 
 BY 
 
 HENRY HOLT AND COMPANY 
 
 Published June, 1Q13 
 
 THE QUINN II BODEN CO. PRESS 
 RAHWAY, N, J. 
 
 'h^^ . tOni/\riK 9-70 *-' r? 
 
TO THE MEMORY 
 
 OF 
 
 c. w. 
 
CONTENTS 
 
 CHAPTER PAGE 
 
 Introduction . . , v 
 
 I. Popular Misunderstandings About the R6le of 
 
 Marx's Theory of Value i 
 
 II. Marxian Socialism in Outline 13 
 
 III, The Economic Interpretation of History . . 25 
 
 IV. Concerning Concentration of Production in In- 
 
 dustry and Agriculture 47 
 
 V. Concerning the Disappearance of the Middle 
 
 Class 70 
 
 VI. The Theory of Increasing Misery . . . . 98 
 
 VII. Data Relating to the Status of the Wage-earner 128 
 
 VIII. Class-struggle Conceptions. Forerunners of Marx 147 
 
 IX. The Marxian Class- struggle Doctrine . . . 185 
 
 X. The Theory of Crises 225 
 
 XI. The Social Revolution and the Inevitable 
 
 Cataclysm 241 
 
 XII. The Collapse of Marx's Theory of Value . . 254 
 
 XIII. Marx's Attitude Towards Eternal Justice. Con- 
 cluding Remarks 278 
 
 Index 295 
 
INTRODUCTION 
 
 The reader who is interested in the spread and de- 
 velopment of socialism here and abroad has undoubt- 
 edly noticed that the great growth of socialism in 
 recent years has been accompanied by considerable 
 changes in policy and doctrine. In the main, present- 
 day political socialism is more or less Marxian, but 
 the word socialist may mean anything. The Amer- 
 ican socialist, for example, will tell you that Marxism 
 and socialism are synonymous, but what he will advo- 
 cate is but partial state capitalism, or state ownership 
 of the trusts. The German revisionist and the French 
 reformist claim to be the spiritual heirs of Marx, and 
 yet they have no illusions about the social revolution 
 and the inevitable sudden collapse of the capitalist 
 mode of production. Some revisionists, in fact, have 
 grave doubts even as to the desirability of the expro- 
 priation by the state of all means of production. 
 The syndicalists, on the other hand, who claim to be 
 the only ones that act in accordance with Marx's 
 class-struggle doctrine economically interpreted, have 
 repudiated the political struggle. The rank and 
 file of the American and German socialist parties 
 claim to be Marxists, but even they are far less ortho- 
 dox than they claim to be. They have toned down 
 
vi INTRODUCTION 
 
 their Marxian doctrine as they have liberalized their 
 policies. They have refrained from sacrilegiously re- 
 vising Marx as a whole, but they have piously rein- 
 terpreted parts of his teaching — all with much loyalty 
 to the memory of Marx, but with little respect for 
 the intellectual consistency of the doctrine. 
 
 This situation is more than interesting, it is im- 
 portant. What is the cause of these changes? Why 
 is it that so many of the socialist thinkers are so ardu- 
 ously revising and reinterpreting their traditional doc- 
 trine, while others are grasping for a new one? This 
 book, I believe, answers the question. '^The Marxian 
 doctrine, which helped the development of socialism 
 throughout the world as no other doctrine ever did, 
 has turned into a fetter, a trap, a pitfall from which 
 th^re seems to be no escape. In the same compelling 
 manner in which Marxism once assured its followers 
 of the inevitability of the cataclysm and social revolu- 
 tion, precisely so does it indicate to-day their impossi- 
 bility, f 
 
 Marxian socialism, or " scientific " socialism, as 
 Marx called it, differed fundamentally from the vari- 
 ous types of socialism that preceded it. Marx ridi- 
 culed the invention of an ideal social organization, 
 a perfect state. The fundamental proposition upon 
 which Marx's socialism rested was his economic inter- 
 pretation of history. This conception implied that the 
 political and legal organization of society is absolutely 
 dependent upon its economic structure, that our future 
 
INTRODUCTION vii 
 
 depends entirely upon existing economic tendencies, *' 
 that no social revolution could socialize scattered and I 
 decentralized industry, nor could legions of small ' 
 property-owners be expropriated. On the other hand, \ 
 no power on earth could prevent socialism, i.e., the \ 
 expropriation of the means of production by society 
 as a whole, if the economic tendencies were what 
 Marx thought them to be when he was working out 
 his doctrine. 
 
 Certain economic tendencies were, according to 
 Marx, inherent in capitalism. These tendencies could 
 but lead to the destruction of capitalism. They were : 
 rapid concentration of production in industry and 
 agriculture and the disappearance of small industrial 
 and commercial undertakings ; concentration of wealth 
 in the hands of an ever diminishing group of mag- 
 nates of capital, accompanied by the complete disap- 
 pearance of the middle class and general proletariza- 
 tion of the masses; increasing misery of the 
 proletariat accompanied by an ever increasing class 
 struggle ; commercial crises of ever increasing magni- 
 tude, due to overproduction. Such were the tend- 
 encies that were to lead to the complete collapse of 
 capitalism, to the social revolution and the dictator- 
 ship of the proletariat. Under that dictatorship the 
 means of production were to be expropriated and the 
 socialist commonwealth inaugurated. 
 
 Before our law and our industry had more or less 
 adjusted themselves to the introduction of machinery, 
 
viii INTRODUCTION 
 
 all these tendencies actually existed. But when Marx 
 formulated his doctrine, he failed to allow for counter 
 tendencies, for society's ability to adjust itself to the 
 new situation without a revolution. 
 
 It must be borne in mind that Marx did not advo- 
 cate socialism because he believed the socialist state to 
 be good. Socialism, in his opinion, was simply inev- 
 itable because of the economic tendencies inherent in 
 capitalism. Were not such tendencies at work, socialism 
 would have been an empty Utopian dream, utterly 
 
 , lacking an economic basis and hence impossible of 
 
 ^ realization. 
 
 This is the keynote of Marxian socialism. Si non, 
 
 I non, is Marx's own proposition. Our contention is 
 
 / that nearly all the tendencies upon which Marx 
 counted have failed him, and, consequently, that 
 from the point of view of Marx's own economic in- 
 terpretation of history the social revolution is but a 
 revolutionary Utopia. 
 
 It is quite true that the concentration of industry is 
 very great, and there is little doubt in my mind that 
 our gigantic industrial organizations will before long 
 be effectively controlled in some way or other by gov- 
 ernmental agencies. But even in this country, where 
 industrial concentration has gone much further than 
 elsewhere, it falls far short of the expectations of 
 Marx. Constantly hearing of the mammoth combina- 
 tion, we quite naturally fail to notice the multitudes 
 of petty enterprises which, humble though they may 
 
INTRODUCTION ix 
 
 be, exist and flourish. Furthermore, Marx was quite 
 mistaken in assuming that centraHzation of industry 
 and concentration of management result in concen- 
 tration of wealth, the disappearance of the middle 
 class, and the final concentration of all capital in the 
 hands of a very few magnates. The numbers of the 
 rich and well-to-do have increased and are increasing 
 by leaps and bounds. There has arisen a vast legion 
 of stockholders who are the veritable national guard 
 of capital. Politically they are anything but a negligi- 
 ble quantity. Nor have the small farmers disap- 
 peared from the face of the earth; on the contrary, 
 wherever farming becomes intensive there is a tend- 
 ency towards decentralization. A socialist state with 
 the farmer outside it is a conception that can rest 
 comfortably only in the head of an American socialist. 
 In Chapter IV the reader will find that for Marx and 
 Engels, to whom thinking was not an irrelevant for- 
 eign tradition, the disappearance of the farmer class 
 was economically and politically a conditio sine qua 
 non of the very possibility of a socialist common- 
 wealth. Nor is the theory of increasing misery at 
 all tenable. Indeed it is admitted that misery is de- 
 creasing instead of increasing. The condition of the 
 working classes has greatly improved, — not as much, 
 to be sure, as we should have desired, but enough to 
 show that Marx was quite mistaken in assuming that 
 the accumulation of misery must correspond to the 
 accumulation of capital; that, to use Marx's own 
 
X INTRODUCTION 
 
 words, " accumulation of wealth at one pole is there- ) 
 fore at the same time accumulation of misery, agony 
 of toil, slavery, ignorance, brutality, mental degrada- 
 tion, at the opposite pole." (See Chapter VI.) 
 
 In Chapter X of the present study the reader will 
 discover how striking a role Marx allotted to com- 
 mercial crises. They were to extend in magnitude and 
 increase in frequency and momentum until the entire 
 capitalist structure should crash and tumble. This 
 cataclysm, which according tO' Marx is already over- 
 due, was to result from that anarchy in production 
 which characterizes the competitive system, which, he 
 said, cannot produce without overproducing on an 
 ever more gigantic scale. A dramatic and picturesque 
 theory it was. As the revelation of a prophet it may 
 still find believers, but as a scholarly theory it had to 
 be abandoned even by Marx's own followers. In the 
 third volume of Marx's Capital there is a frank admis- 
 sion that with the extension of the world market and 
 quicker means of communication and transportation 
 the tendency toward crises of overproduction has 
 greatly diminished. Thus did the doctrine of the in- 
 evitable collapse of our capitalist system come to grief. 
 
 It is obvious to-day that the economic tendencies 
 upon which Marx counted have played him false, and 
 from the point of view of Marx's own economic inter- 
 pretation of history the expectations and hopes of 
 revolutionary socialism can hardly materialize. The 
 situation has become quite evident to the clear minds 
 
INTRODUCTION xi 
 
 within the socialist movement. This explains the re- 
 visionist, reformist, syndicalist and " back to Kant " 
 socialist movements, besides many others that have 
 recently arisen. To-day the social movement through- 
 out the world is in one sense but a quest for a new 
 possible meaning of the word socialism. 
 
 So^xalled scientific socialism is bankrupt. Socialists 
 
 to-day have the alternative of becoming plain social 
 reformers or of being out-and-out Utopians. Not so, 
 they say; even if all the mistakes of scientific socialism 
 are admitted, its kernel remains sound and victory is 
 assured. Why? Because, whereas the Utopians were 
 dreamers, Marx exposed class exploitation and taught 
 class struggle, and under this sign a class-conscious 
 proletariat will be victorious, and scientific socialism 
 will win where Utopias failed. Such statements we 
 hear very often, and all that can be said in reply is 
 this:/ If the assertion of Marx and Engels that all 
 history is a history of class struggles is correct, there 
 must have been quite a bit of class-consciousness in 
 history before Marx; and yet these class struggles 
 did not lead to socialism. / With regard to so-called 
 exploitation, our friends the socialists are making a 
 mistake in looking down upon their unsuccessful fore- 
 runners, the Utopians. In the last chapter of Thomas 
 More's Utopia, from the title of which, if I am not 
 mistaken, the word Utopian has been derived, our 
 friends will find the following observation: 
 *' Therefore I must say, that as I hope for mercy, 
 
xii INTRODUCTION 
 
 I can have no other notion of all the other govern- 
 ments that I see or know, than that they are a con- 
 spiracy of the richer sort, who, on pretense of man- 
 aging the public, do only pursue their private ends, 
 and devise all the ways and arts that they can find 
 out; first that they may, without danger, preserve all 
 that they have so ill acquired, and then, that they may 
 engage the poorer sort to toil and labor for them, at 
 as low rates as is possible, and oppress them as they 
 please." ^ 
 
 The scientific socialists have forgotten that More 
 the Utopian made such a statement. They would 
 hardly have forgotten if it had materially affected 
 economic conditions. It did not. Why, then, should 
 we expect so much from Marx's formulation of pre- 
 cisely the same thought? Is it not rather Utopian to 
 expect so much in the way of fundamental changes 
 in our social institutions from a formula, a thought, a 
 conception, an idea ? 
 
 No doubt it will be pointed out to us that the under- 
 lying economic conditions have changed since the days 
 of More's Utopia. That is quite true; but to contend 
 that further changes are to be expected because of our 
 economic conditions is to shift the argument and return 
 again to present-day economic tendencies, which have 
 ceased to be encouraging from the Marxian point of 
 view. 
 
 ^ More, Utopia (Bishop Burnet's translation), London, 1684, 
 p. 201. 
 
INTRODUCTION xiii 
 
 Of the various doctrines of Marx, the economic in- 
 terpretation of history has suffered least from the 
 ravages of time and of criticism. It is a very im- 
 portant theory, and it marked a great advance in 
 historical methodology and social philosophy. But 
 only a layman could regard this method as a perfect 
 instrument. Much as I admire the theory, as perhaps 
 the most robust ever advanced, it is at the same time 
 the crudest and most unfinished doctrine in the field 
 of social philosophy. 
 
 For, to begin with, there is no such thing as one 
 economic interpretation of a given historical event; 
 many interpretations are possible. One man may look 
 upon certain economic conditions as the cause of the 
 event, while another will find the cause in quite dif- 
 ferent economic aspects. The past presents nearly as 
 varied a selection and almost as complete a chaos of 
 economic influences as does the present, and therefore, 
 even on the basis of the strictest economic interpre- 
 tation, many combinations of causation are quite pos- 
 sible. Again, how can we determine, quantitatively 
 and qualitatively, the strength of these economic influ- 
 ences with which we are dealing? And even assum- 
 ing that historical laws have the same validity as the 
 laws of mechanics, how much, after all, can they tell 
 us? Every hovel and every bridge and every cathe- 
 dral stands because it is constructed in accordance 
 with mechanical laws. But do mechanical laws deter- 
 mine the designs of these various structures? Sim- 
 
xiv INTRODUCTION ™, 
 
 ilarly within the laws of economic cohesion an endless 
 variety of historical designs and structures is possible, j 
 Furthermore, we are apt to forget that the economic 
 interpretation of history can explain only the changes 
 that occur in things, never the things themselves. It 
 might explain a change in religious doctrine, for in- 
 stance, but never faith itself. 
 
 And if this doctrine, as a historical method of deal- 
 ing with the past, where the game is played with open 
 cards, is beset with such difficulties, how could one 
 seriously expect much from it where the future is 
 concerned? I am indebted to Professor Goodnow for 
 an illustration of the uncertainty of our ordinary po- 
 litical forecasts. As we all know, the democratic 
 development of our form of government has been 
 attributed to the economic preeminence of the cities, 
 the concentration of industrial population, etc.; and 
 because of these modern economic conditions we ex- 
 pect still greater democratization of our governmental 
 institutions. But it so happened that on September 
 12, 1900, a gale drove the waves of the Gulf over the 
 city of Galveston. In sheer despair all traditional 
 political theory of separation of powers, etc., was 
 abandoned, and to meet an extraordinary situation a 
 commission form of government was adopted by the 
 city. This entirely unforeseen and unexpected com- 
 mission form of city government has since swept the 
 country, one city after another adopting it throughout 
 the United States. Of course it is easy to interpret 
 
INTRODUCTION xv 
 
 this phenomenon economically a posteriori, but no 
 economic interpreter could ever have foreseen so curi- 
 ous and extraordinary a development. 
 
 Because of this uncertainty of the things of the 
 future, the writer of this book studiously refrains 
 from prophecy. There is no assertion here that so- 
 cialism is impossible in the future. The book deals 
 with the well-known doctrine that because of such 
 and such economic conditions social revolution is inevi- 
 table. Facts and figures show us that actual condi- 
 tions do not warrant any such assumption. Neither 
 with the naked eye nor with the help of such instru- 
 ments as science may lend us can the socialist state 
 be seen on the horizon. What may happen in the 
 distant future we do not know; it lies absolutely and 
 entirely beyond the realm of our knowledge, in a 
 region where faith and imagination may reign 
 supreme. 
 
 I cannot close this introduction without expressing 
 my deep gratitude tO' those of my friends who have 
 helped me in my struggle with English expression. I 
 am especially indebted to Mrs. Simkhovitch, who, I 
 fear, has taken time from her much more important 
 work to lend me assistance. Both the form and the 
 substance of the chapters relating to the class struggle 
 were revised by that realistic genius, my late friend 
 Miss Carola Woerishoffer. My friend and colleague, 
 Professor Munroe Smith, as editor of the Political 
 Science Quarterly, where this book first appeared in 
 
xvi INTRODUCTION 
 
 1908-12, has taken endless trouble in making it more 
 or less readable, — for which I am profoundly grate- 
 ful to him. 
 
 Vladimir G. Simkhovitch. 
 
 Greenwich House, 
 New York City. 
 
MARXISM VERSUS SOCIALISM 
 
 CHAPTER I 
 
 POPULAR MISUNDERSTANDINGS ABOUT 
 THE ROLE OF MARX'S THEORY OF 
 VALUE 
 
 The role which socialism is playing in the modern 
 world and the extent to which the socialistic army 
 in all civilized countries is marching under the banner 
 of Karl Marx give to the body of doctrines which 
 bear his name a unique position in social science. Even 
 if the Marxian system be regarded as a tissue of 
 errors, the fact that millions of men accept it makes 
 jt significant. It has, however, another claim upon 
 the attention of the economist. Had Marxism failed 
 to win a single adherent, it would still have been 
 necessary for every serious student of economic theory 
 to endeavor to understand it, for it contains a chal- 
 lenge that can be neither ignored nor evaded. 
 
 The literature of protest against Marxism is already 
 vast, yet, with the notable exception of such writings 
 as those of Bohm-Bawerk, Seligman, Sombart and 
 Stammler, who have dealt with special aspects of 
 the system, the bulk of that literature proves con- 
 
2 MARXISM VERSUS SOCIALISM 
 
 clnsivcly to the well-informed reader that reason is 
 hilt a fig-leaf for emotion. Too obvious in most in- 
 stances is the critic's desire to emulate St. George 
 and slay the dragon, even if personal modesty clothes 
 the brave onslaught in the humble garb of scientific 
 research.^ With these critics emotions run riot. 
 They have in their zeal attempted the impossible: to 
 kill the dragon without seeing him. That even St. 
 George could not have done." Such criticism, carried 
 on for two generations, has naturally established a 
 tradition: a man of straw has been constructed for 
 the express use of Marx's critics. 
 
 Of the current misconceptions of the Marxian sys- 
 tem, the most fundamental and most general is the 
 opinion that the labor-theory of value is the corner- 
 stone of Marxian socialism. From this is derived 
 } the equally erroneous opinion that Marx's demand for 
 j social justice stands or falls with his theory of value. 
 
 * Marx, who. as Pierre Leroiix once said about him, " had a 
 keen understanding of the bad side of human nature." has 
 given to the motives of his critics a somewhat unkind interpre- 
 tation. " In the domain of political economy." he writes. " free 
 scientific inquiry meets not only the same enemies as in all other 
 domains; the peculiar nature of the material it deals with sum- 
 mons as foes into the field of battle the most violent, mean and 
 malig:nant passions of the human breast, the Furies of private 
 interest." Marx, Capital, fourth EngHsh edition (London, 1891), 
 p. xix. 
 
 * As early as 1S95 Adolph Wagner pointed out that most of 
 the critics of so-called scientific socialism had showm that they 
 had not the least conception of what they were talking about. 
 See Die okadcmische Natiotmldkonomie und dcr Socialismus 
 (Berlin, 1895), RB- 22, 2a. 
 
POPULAR MISUNDERSTANDINGS 3 
 
 Or, as a recent Marx critic, Mr. J. E. Le Rossignol, 
 professor of economics in the University of Denver, 
 puts it : " Orthodox socialists are deeply concerned to 
 prove it true, for if it can be shown that all values 
 are created by labor alone, it must surely follow that 
 all should belong to the hand and brain that created 
 them." " This ethical interpretation of the Marxian 
 theory of value and the desire to base socialism upon 
 this theory are characteristic of the bulk of the aca- 
 demic literature about Marx. Thus Professor Fox- 
 well writes about Professor Menger : " For him 
 [Menger] Marx, not Ruskin, is the type of the social- 
 ist. Socialism in this sense, the only. one really dis- 
 tinctive, has been well defined by Mr. Rae, in terms 
 which Dr. Menger might have drafted himself: 'It 
 is not a theory of the state's action, but a theory of 
 the state's action founded on a theory of the laborer's 
 right — at bottom a demand for social justice — that 
 every man shall possess the whole produce of his 
 labor.' " * Giving to the Marxian system this inter- 
 pretation. Professor Menger was logically justified in 
 making the courageous statement that " Marx is far 
 inferior to Thompson, so that the work of the latter 
 may be regarded as the foundation stone of social- 
 ism." ^ This statement is exceedingly interesting. It 
 
 * Le Rossignol, Othodox Socialism, A Criticism (New York, 
 
 1907), p. 15. 
 
 * H. S. FoxwELL, Introduction to Anton Menger, Right to 
 the Whole Produce of Labor (London, 1899), p. xvii. 
 
 " Menger, op. cit., p. 102. 
 
4 MARXISM VERSUS SOCIALISM 
 
 proves that by making an ethical labor-theory ol value 
 the spring and center of Marxism socialism, one eo 
 ipso wipes out the difference between the sentimental, 
 Utopian socialism of the first half of the last century 
 and modern so-called scientific socialism. Most of 
 the academic writers have attributed to Marxian 
 theory precisely this sentimental character, but without 
 drawing the logical conclusions. 
 
 What meaning then, the economist will justly ask, 
 has Marx's theory of value? The answer is simple. 
 Marx's theory of value occupies in his economic sys- 
 tem the same position that the theory of value has 
 occupied or has tried to occupy in many other systems. 
 The classical systems of political economy were all 
 metaphysics of commodities, philosophies of produc- 
 tion and circulation. In Marx's metaphysics of pro- 
 duction the theory of value occupies the same central 
 position as the Substanz-prohlem in philosophical sys- 
 tems. This analogy is striking even in the phraseology 
 of Marx. ; Marx is a realist, even a materialist, and 
 is consistently, passionately, and naively so ; but where 
 he is dealing with a problem the very existence of 
 which could not be recognized by a strict and consistent 
 realism, he has to fall back on mediaeval scholasticism/ 
 Observe his language : " i quarter corn = x cwt. iron. 
 What does this equation tell us? // tells us that in 
 two different things — in i quarter of corn and x cwt. 
 of iron — there exists in equal quantities something 
 common to both. The two tilings must therefore be 
 
POPULAR MISUNDERSTANDINGS 5 
 
 equal to a third, which in itself is neither the one nor 
 the other. . . . Let us now consider the residue of 
 each of these products; it consists of the same unsub- 
 stantial reality in each, a mere congelation of homoge- 
 neous human labor, of labor-power expended without 
 regard to the mode of its expenditure. All that these 
 things now tell us is that human labor-power has been 
 expended in their production, that labor is embodied 
 in them. When looked at as crystals of this social 
 substance, common to them all, they are Values." ® 
 That is written by Marx the materialist and sworn to 
 by Engels — the same Engels who was so vastly 
 amused by Kant's "" Ding an sich/' and who instructs 
 us that chemistry in its recent progress has put an 
 end to such mysterious entities."^ 
 
 Whatever the faults and merits of Marx's theory 
 of value may be, it was not intended as an ethical 
 basis for socialism, but as a means of interpreting 
 jeconomic phenomena. It is quite true that his theory 
 of value is the central theory upon which his economic 
 analysis of the capitalistic system rests, — in short, the 
 foundation of his economic doctrine; but ihis theory 
 plays no role whatsoever in his socialistic doctrine, 
 which purports to be nothing more than a demonstra- 
 tion that socialism is inevitable. 
 
 Marx's socialistic doctrine is intensely realistic. He 
 
 " Marx, Capital, English translation, pp. 3, 4, 5. The italics 
 are mine. 
 
 'Engels, Socialism, Utopian and Scientific (Chicago, 1905), 
 p. xvii. 
 
6 MARXISM VERSUS SOCIALISM 
 
 describes the existing economic phenomena and argues 
 that the sum of these phenomena is bound to result in 
 the expropriation of the means of production, in so- 
 ciaHsm. In this argument he deals with the economic 
 phenomena historically, i.e., he does not analyze them 
 philosophically, but treats them as existing powers, 
 and he expounds their political and social effects, 
 which he regards as necessary and unavoidable. The 
 key to his socialist doctrine is the economic interpreta- 
 tion of history with the class-struggle doctrine follow- 
 ing in its train. Accordingly, the doctrine of modern 
 so-called " scientific '' socialism is found in all its com- 
 pleteness in the Communist Manifesto, which contains 
 no reference to any theory of value. It is, on the other 
 hand, when Marx is at work analyzing and explaining 
 the economic phenomena of capitalistic society that 
 his ingenious theory of surplus value is elaborated.. 
 This theory is to him the key-word by which we are 
 enabled to decipher and comprehend all economic phe- 
 nomena. It must always be remembered that, from 
 Marx's viewpoint, the actual economic phenomena are 
 motive powers of society determining its future. No 
 analysis or interpretation of these phenomena, whether 
 it be scientific or unscientific, increases or diminishes 
 their sovereign power. Interpretation affects them 
 no more and no less than a volume on astronomy af- 
 fects the solar system. 
 
 How then did it happen that it was the theory of 
 surplus value that primarily drew the fire of the 
 
POPULAR MISUNDERSTANDINGS 7 
 
 learned economists; and why did most of them seem to 
 think that in disproving that theory they had dehvered 
 a mortal blow to modern socialism? First of all, per- 
 haps, because certain socialist agitators tried to make 
 emotional capital out of the theory of surplus value. 
 This circumstance cannot, however, serve as an excuse 
 for scholars who have undertaken to criticise Marxian 
 socialism. Even if they deemed it unnecessary to 
 study Marx's own writings, they could have learned 
 from many a propagandist leaflet ^ what role the theory 
 of surplus value actually plays in the Marxian system. 
 Secondly — and this probably furnishes in most cases 
 the truer explanation of their misconceptions — they 
 were not sufficiently impressed by the peculiarities of 
 Marxian socialism to be disposed to draw a sharp line 
 
 ® For instance, see Paul Fischer, Die Marx'sche Werttheorie, 
 Berliner Arbeiterbibliothek, Serie i, Heft 9 (Verlag des 
 Vorw'drts, 1893), pp. 2>Z, 34 ^ "The bourgeois economists have 
 declared that Marx's theory of value is the bulwark by w^hich 
 socialism must stand or fall. ... In almost all criticism of the 
 fundamental principles of Marx's system the question of the 
 correctness or incorrectness of the theory of value is reduced 
 to the alternative of either throwing over Marx's theory of 
 value or of throwing over society ! . . . They foist this meaning 
 of theirs on Marx sans fagon. As they themselves imagine that 
 a theory of value can have direct influence on the development of 
 society, without more ado they presuppose the same idea on the 
 part of Marx. Taking their own general economic point of view 
 as the measure of Marx's theory, they commit the colossal mis- 
 take of considering the theory of value not only as the pre- 
 requisite of his criticism of bourgeois economy, hut also as the 
 foundation of his socialistic claims. They therefore entirely mis- 
 take the role which the theory of value plays." The italics are 
 mine. 
 
8 MARXISM VERSUS SOCIALISM 
 
 between the socialism of Marx and the sociahsm of 
 his predecessors. It seemed to them, probably, like 
 making two bites of a cherry : socialism is socialism, 
 and its variations are but differences in shade. All 
 pre-Marxian socialism was distinctly ethical; every 
 peroration against capitalism contained or implied an 
 appeal for social justice. Whenever the word '' ex- 
 ploitation " was used, they accordingly thought them- 
 selves justified in looking for the usual end of the 
 sermon. When Marx, in his Capital, describes the de- 
 velopment of the English factory system, he does not 
 mince matters. He makes the respectable English 
 blue-books, to use Bernard Shaw's phrase, convict 
 capital " of wholesale spoliation, murder and compul- 
 sory prostitution; of plague, pestilence and famine; 
 of battle, murder and sudden death." ^ The citation 
 of those deplorable facts and the energy of Marx's lan- 
 guage struck some gentle scientific souls as an appeal 
 for socialism. Add the circumstance that the first 
 part of Marx's bulky volume was devoted to the elab- 
 oration of his theory of surplus value — a theory any- 
 thing but complimentary to the capitalistic organization 
 of society — and how could there be any doubt that 
 Marx's doctrine is an ethical appeal for justice, and 
 that the theory of value is its foundation? And if 
 the Marxian theory of value be the foundation of a 
 social movement that is growing so rapidly, then to 
 
 " Fabian Essays in Socialism, edited by G. Bernard Shaw, 
 
 pp. 220, 221. 
 
POPULAR MISUNDERSTANDINGS 9 
 
 destroy socialism one has only to destroy the labor- 
 theory of value. Thus it is that we are blessed with 
 so large a literature on the Marxian theory of value. 
 In vain did Marx's co-worker and literary executor, 
 Frederick Engels, protest against the putting of such 
 an interpretation upon the theory of value. As early 
 as 1884 Engels wrote: "This application of the Ri- 
 cardian theory, according to which the whole social 
 product belongs to the sole producers, the workers, 
 as their product, leads directly to communism. This 
 theory, however, as Marx has pointed out, is from an 
 economic point of view formally false, since it is an 
 application of ethics to economics. According to the 
 laws of the bourgeois economy the greater part of 
 the product does not belong to the workers who have 
 produced it. Now if we should say that it is unjust 
 that this should be so, in the first place this does not 
 concern economics. All that we can say is that this 
 economic fact contradicts our moral sentiment. Upon 
 this, therefore, Marx never based his communistic de- 
 mands, but upon the inevitable catacylsm of the cap- 
 italistic mode of production, which is going on before 
 our eyes." ^^ Marx himself emphasizes the same 
 thought in different ways on all sorts of occasions. 
 For example, in his Capital he criticises, in Proudhon, 
 precisely that ethical attitude which the critics of 
 
 ^^ Karl Marx, Das Elend der Philosophie, deutsche Ueber- 
 setzung, 2te Auflage (Stuttgart, 1892) ; Friedrich Engels, Vor- 
 wort, p. ix. 
 
10 MARXISM VERSUS SOCIALISM 
 
 Marx attribute to Marx himself. " Proudhon begins 
 by taking his ideal of justice, of ' justice eternelle/ 
 from the juridical relations that correspond to the 
 production of commodities. . . . Then he turns 
 around and seeks to reform the actual production of 
 commodities, and the actual legal system correspond- 
 ing thereto, in accordance with this ideal. What 
 opinion should we have of a chemist who, instead of 
 studying the actual laws of the molecular changes in 
 the composition and decomposition of matter, and on 
 that foundation solving definite problems, claimed to 
 regulate the composition and decomposition of matter 
 by means of the ' eternal ideas ' of ' naturalite ' and 
 ' affinite ' ? Do we really know any more about 
 ' usury,' when we say it contradicts * justice eternelle/ 
 ' equite eternelle,' ' mutualite eternelle ' and other 
 ' verites eternelles ' than the fathers of the church did 
 when they said it was incompatible with ^ grace eter- 
 nelle,' ' foi .eternelle ' and Ma volonte eternelle de 
 Dieu '? " ^^ /Not only does Marx himself avoid appeal 
 to ethical ideas, but the entire plan on which his sys- 
 tem is constructed obliges him to take a non-ethical 
 attitude toward economic phenomeny Does he not 
 justify capitalism by emphasizing its absolute neces- 
 sity? In the preface to his Capital he quotes with 
 approval a Russian critic who has clearly apprehended 
 his main idea. This critic tells us that Marx is trying 
 to prove " both the necessity of the present order of 
 
 ''Marx, Capital, English ed. (London, 1891), vol. i, p. 56. 
 
POPULAR MISUNDERSTANDINGS ii 
 
 things and the necessity of another order into which 
 the first must inevitably pass over, and this all the 
 same, whether men believe or do not believe it, whether 
 they are conscious or unconscious of it. Marx treats 
 the social movement as a process of natural history, 
 governed by laws not only independent of human will, 
 consciousness and intelligence, but rather, on the con- 
 trary, determining that will, consciousness and intelli- 
 gence." ^^ How could such an attitude be reconciled 
 with a plea for another social order on any moral 
 ground, e.g., on the ground that the worker is not 
 getting the whole produce of his labor? 
 
 13 
 
 ^^ Ibid., pp. xxvii, xxviii. 
 
 ^^ Sombart was absolutely right in what he had to say about 
 Professor JuHus Wolf's book on SociaHsm, and some of his 
 charges hold good as regards nearly the whole critical literature 
 on Marx, not excepting the most recent publications. Special 
 attention should be paid to the following paragraph in Sombart's 
 criticism: "Wolf makes Marxism almost the sole object of his 
 attack, although with fatal carelessness he nowhere clearly dis- 
 tinguished it from other sociahstic systems. The possibility of 
 a correct understanding of any one of the principal Marxian 
 doctrines, however, was destroyed as soon as the critics failed to 
 realize the purely theoretical character of Marxism. In the fact 
 that Wolf gives an ethical import to Marx's doctrine, makes it, 
 to use a Marxian expression, ' monastic,' lies the rrparov fevSos 
 of all the critical deductions of the book in question. Wolf ought 
 to have understood first and foremost that Marxism is distin- 
 guished from all other socialistic systems (which in contrast to 
 him I propose to sum up under the heading of ethical sociahsm) 
 by its anti-ethical tendency. In the entire Marxism from begin- 
 ning to end there is not a particle of ethics and consequently] 
 no more of an ethical opinion than an ethical postulate. Marx] 
 maintains in no place either that the surplus value does not \ 
 belong to the employer or that the workman 'has a right to 
 
12 MARXISM VERSUS SOCIALISM 
 
 the whole produce of his labor.' A great part of Wolf's 
 criticism, however, consists in a disquisition to Marx on what 
 is ' proper ' and what is * improper ' in the present-day mode 
 of production, and distribution of revenue. . . . And finally, to 
 sum up, he says : * All theory and practice of socialism, accord- 
 ing to the conception of socialism, presupposes the right to the 
 whole product of labor.' Had Wolf added, * with the exception 
 of Marxism,' he would have hit upon the truth. By including 
 Marxism he made his weightiest critical attacks futile." Braun's 
 Archiv fiir sosiale Gesetsgebung und Statistik, 1892, vol. v, pp. 
 489, 490. 
 
CHAPTER II 
 MARXIAN SOCIALISM IN OUTLINE 
 
 " In Brussels," Marx writes, " where I was exiled 
 by Guizot, I organized, together with Engels, W. 
 Wolff and others, a German ' Arbeiterbildungsverein,' 
 which still exists. We published at the same time a 
 series of printed and lithographed pamphlets, in which 
 we criticised mercilessly that mixture of French-Eng- 
 Jjsh socialism or communism with German philosophy 
 which then formed the doctrine of the ' Bund/ ^ In- 
 stead of that we postulated scientific insight into 
 the economic structure of civil society [burgerliche 
 Gesellschaftl as the only defensible theoretical basis 
 of socialism. We also explained, in a popular form, 
 that it is not a question of putting through some 
 Utopian system, but of taking a conscious part in the 
 process of social transformation which is going on 
 before our very eyes. . . .f In the manifesto written [ 
 for workingmen I discarded all systems and put in j 
 their stead a critical insight into the conditions, prog- 
 
 ^ Marx is referring to the " Bund der Kommunisten." The 
 history of that organization and an account of the relations of 
 Marx and Engels to it may be found in Engels's preface to Karl 
 Marx, Enthullungen uher den Kommunistenprocess in K'dln 
 (Nottingen-Ziirich, 1885), pp. 3-17. 
 
 13 
 
14 MARXISM VERSUS SOCIALISM 
 
 ress and general results of the actual social move- 
 ment." ^ This is Karl Marx's testimony in his own 
 behalf as to the origin and scope of his socialistic doc- 
 trine. What did he mean by a critical insight into the 
 conditions of this social movement? What was the 
 fundamental proposition of the Communist Manifesto, 
 which is the first outline of modern scientific social- 
 ism? Let us again listen to the testimony of one of 
 the authors : '' The Manifesto being our joint produc- 
 tion," writes Engels, " I consider myself bound to state 
 that the fundamental proposition which forms its 
 nucleus belongs to Marx. That proposition is : that in 
 every historical epoch, the prevailing mode of economic 
 production and exchange, and the social organization 
 necessarily following from it, form the basis upon 
 which is built up, and from which alone can be ex- 
 plained, the political and intellectual history of that 
 epoch." ^ And it is not merely for explanation of the 
 
 "" Karl Marx, Herr Vogt (London, i860), pp. 35, 42. 
 
 ^ Engels's preface to the Communist Manifesto, English edition 
 (Chicago, Chas. H. Kerr and Company), p. 8. This conception 
 of the economic interpretation of history was for the first time 
 adequately formulated by Marx a decade after the appearance of 
 the Manifesto in his Zur Kritik der politischen Oekonomie, 
 pubHshed in 1859. Those passages are so important that we 
 quote them here in full: "In the social production which men 
 carry on, they enter into definite relations that are indispensable 
 and independent of their will; these relations of production 
 correspond to a definite stage of development of their material 
 powers of production. The sum total of these relations of 
 production constitutes the economic structure of society— the 
 real foundation, on which rise legal and political superstructures 
 and to which correspond definite forms of social consciousness. 
 
MARXIAN' SOCIALISM IN OUTLINE 15 
 
 past that we are to look to the mode of production 
 and exchange; for these processes now determine and 
 will continue to determine all our intricate social rela- 
 tions, all our ideal conceptions. With them lies our 
 fate: they have decided upon our past and they will 
 settle our future. The conditions and contingencies 
 
 The mode of production in material life determines the general 
 character of the social, political and spiritual processes of life. 
 It is not the consciousness of men that determines their ex- 
 istence, but, on the contrary, their social existence determines 
 their consciousness. At a certain stage of their development, 
 the material forces of production in society come into conflict 
 with the existing relations of production, or — what is but a 
 legal expression for the same thing — with the property relations 
 within which they had been at work before. From forms of 
 development of the forces of production these relations turn 
 into their fetters. Then comes the period of social revolution. 
 With the change of the economic foundation the entire immense 
 superstructure is more or less rapidly transformed. In consider- 
 ing such transformations the distinction should always be made 
 between the material transformation of the economic conditions 
 of production, which can be determined with the precision of 
 natural science, and the legal, political, religious, aesthetic or 
 philosophic — in short ideological — forms in which men become 
 conscious of this conflict and fight it out. Just as our opinion 
 of an individual is not based on what he thinks of himself, so 
 can we not judge of such a period of transformation by its 
 own consciousness; on the contrary, this consciousness must 
 rather be explained from the contradictions of material life, 
 from the existing conflict between the social forces of produc- 
 tion and the relations of production. No social order ever 
 disappears before all the productive forces for which there is 
 room in it have been developed; and new higher relations of 
 production never appear before the material conditions of their 
 existence have matured in the womb of the old society." Karl 
 Marx, A Contribution to the Critique of Political Economy, 
 EngHsh translation by N. S. Stone, pp. 11, 12. 
 
i6 MARXISM VERSUS SOCIALISM 
 
 of social production have divided society into classes, 
 and all the history of hitherto existing society is a 
 history of class struggles. '' Freeman and slave, 
 patrician and plebeian, lord and serf, guildmaster and 
 journeyman, in a word, oppressor and oppressed, stood 
 in constant opposition to one another, carried on an 
 uninterrupted, now hidden, now open fight — a fight 
 that each time ended either in a revolutionary recon- 
 struction of society at large or in the common ruin of 
 the contending classes." *^-"' 
 
 The modern " bourgeois " society, according to 
 Marx, has grown up on the ruins of the feudal society. 
 The discovery and colonization of the new world, 
 trade with the East Indies and the general develop- 
 ment of the means of exchange gave to commerce and 
 industry an impulse never before known. The feudal 
 organization of society was too narrow to hold within 
 its limits modern industry and commerce even in their 
 infantile stages. The feudal restrictions were burst 
 asunder. The rule of the aristocracy was pushed aside 
 and the modern bourgeoisie took its place in political 
 life. The bourgeoisie as a class has played a most 
 revolutionary role. Just as conservation of the old 
 mode of production was the condition of existence of 
 the feudal society, so constant technical improvement, 
 constant advance, constant revolutionizing of the in- 
 struments of production have become capitalism's very 
 breath of life. " The bourgeoisie has disclosed how 
 
 * Communist Manifesto, p. 12. 
 
MARXIAN SOCIALISM IN OUTLINE 17 
 
 it came to pass that the brutal display of vigor in the 
 Middle Ages, which reactionists so much admire, found 
 its fitting complement in the most slothful indolence. 
 It has been the first to show what man's activity can 
 bring about. It has accomplished wonders far sur- 
 passing Egyptian pyramids, Roman aqueducts and 
 Gothic cathedrals; it has conducted expeditions that 
 have put in the shade all former exoduses of nations 
 and crusades." ^ The constant revolutionizing of pro- 
 duction is accompanied by an uninterrupted agitation 
 and disturbance and is followed by a constant change 
 in social conditions — a circumstance which distin- 
 guishes the capitalistic era from all other epochs in 
 human history. No frozen relations, no venerable 
 prejudices for our age! Prejudices have no chance 
 to become rooted, opinions have no chance to ossify. 
 They are swept away before they are antiquated in 
 this whirlwind of industrial progress. Industry has 
 lost its national character. The need of larger markets 
 chases the capitalist over the surface of the globe; it 
 forces him to settle everywhere, to establish connec- 
 tions everywhere. On pain of extinction it compels 
 nations to drop their ancient traditions and to adopt 
 the capitalist mode of production and the bourgeois 
 conception of the world. Cheap commodities batter 
 down all Chinese walls, and the bourgeois creates a 
 new world after his own image. Class issues and 
 class struggles are therefore losing their national char- 
 
 ^ Ibid., pp. 16, 17. 
 
i8 MARXISM VERSUS SOCIALISM 
 
 acter, they are becoming as cosmopolitan as the bour- 
 geoisie and its capitaHst mode of production. The 
 capitalistic centralization of means of production is 
 bringing about centralization of the scattered popula- 
 tion: it has brought the laboring masses into towns. 
 The extensive use of machinery has stripped work of 
 all its individual character; the laborer's personality 
 fades in the factory, where he becomes a mere ap- 
 pendix to the machine during the day; nor can his 
 sense of separate existence be cultivated in the dingy 
 tenement house quarters, where he is packed for the 
 night. The more readily, therefore, do these multi- 
 tudes merge into one solid class, the proletariat, con- 
 scious of its separate class existence, with tasks, aims 
 and destinies widely different from those of the bour- 
 geoisie, the class that owns the means of production. 
 
 The bourgeoisie, being, as we have seen, a highly 
 progressive class, finds itself involved in constant po- 
 litical struggles. In the early stages of its development 
 it has to fight with the aristocracy for political su- 
 premacy. Later on its finds itself involved in a strug- 
 gle with those portions of the middle class whose 
 interests have become antagonistic to the progress of 
 industry. In all these struggles the bourgeoisie has 
 to appeal to the laboring class, to the proletariat, for 
 help and support. Thus the laboring class is drawn 
 into the political arena. There it is supplied with the 
 elements of political education — weapons which are 
 destined to be turned against the ruling class. 
 
MARXIAN SOCIALISM IN OUTLINE 19 
 
 But that is not all. The very progress of capitalist 
 production and accumulation increases the numbers 
 and the political strength of the proletarians and de- 
 pletes the ranks of the natural defenders of capitalism. 
 Property makes for conservatism; but industry and 
 commerce rapidly destroy the property of the small 
 tradespeople, shopkeepers, handicraftsmen and farm- 
 ers. All these are doomed to sink into the proletariat, 
 partly because they have not sufficient capital for the 
 scale on which modern industry, commerce and agri- 
 culture are carried on, partly because they are swamped 
 by the competition of large capitalists, partly because 
 their special skill is rendered worthless by modern 
 methods of production. These proletarians, instead 
 of rising with the progress of industry, sink deeper 
 and deeper. In the past, we are told by the authors 
 of the Communist Manifesto, existence was assured 
 to the oppressed classes, in order that the oppression 
 might continue; they also had a chance to rise and 
 thus raise their own class. The serf in the period of 
 serfdom managed to raise himself to membership in 
 the commune ; the burgher under feudal rule developed 
 into the modern bourgeois. The proletariat, we are 
 informed, has no such chances. *' The modern laborer, 
 on the contrary, instead of rising with the progress 
 of industry, sinks deeper and deeper below the condi- 
 tions of existence of his own class. He becomes a 
 pauper, and pauperism develops more rapidly than 
 population and wealth. And here it becomes evident 
 
20 MARXISM VERSUS SOCIALISM 
 
 that the bourgeoisie is unfit any longer to be the ruling 
 class in society, and to impose its conditions of exist- 
 ence upon society as an overriding law. It is unfit to 
 rule, because it is incompetent to assure an existence 
 to its slave within its slavery, because it cannot help 
 letting him sink to such a state that it has to feed him 
 instead of being fed by him." ® 
 
 Capitalism, we are told, is not only threatening the 
 very life of the proletariat, it is undermining its own 
 existence. Capitalistic society is rapidly approaching 
 a complete cataclysm. Modern society, having called 
 into existence unparalleled means of exchange and 
 gigantic means of production, is like the sorcerer who 
 can no longer cope with the powers of the nether 
 world which his incantations have conjured up. For 
 decades we have been witnessing a distinct rebellion 
 of the modern forces of production against the con- 
 ditions of production, i.e., property conditions, prop- 
 erty relations. This rebellion finds expression in the 
 periodical return of that modern epidemic, the com- 
 mercial crisis, which is threatening more and more 
 the whole bourgeois society. And all the misery that 
 accompanies such a crisis is due to overproduction. 
 The masses of the people are in want of the means 
 of subsistence because too much has been produced ! 
 The forces of production let loose, spurred by wild 
 competition, are here fettered by the narrowness of 
 the bourgeois property relations. " As a matter of 
 
 ® Communist Manifesto, p. 31. 
 
MARXIAN SOCIALISM IN OUTLINE 21 
 
 fact," writes Engels, " since 1825, when the first gen- 
 eral crisis broke out, the whole industrial and com- 
 mercial world, production and exchange among all 
 civilized peoples and their more or less barbaric 
 hangers-on, are thrown out of joint about every ten 
 years. Commerce is at a standstill, the markets are 
 glutted, products accumulate, hard cash disappears, 
 credit vanishes, factories are closed, the mass of the 
 workers are in want of the means of subsistence, be- 
 cause they have produced too much of the means of 
 subsistence; bankruptcy follows upon bankruptcy, ex- 
 ecution upon execution. The stagnation lasts for 
 years; productive forces and products are wasted and 
 destroyed wholesale, until the accumulated mass of 
 commodities finally filters off, more or less depreciated 
 in value, until production and exchange gradually 
 begin to move again. Little by little the pace quickens. 
 It becomes a trot. The industrial trot breaks into a 
 canter, the canter in turn grows into a headlong 
 gallop, a perfect steeplechase of industry. And so 
 over and over again. We have now, since the year 
 1825, gone through this five times, and at the present 
 moment (1877) we are going through it for a sixth 
 time." ^ The conquest of new markets and the more 
 thorough exploitation of the old ones but pave the 
 way for more extensive, more destructive, more 
 formidable crises. 
 
 ^ Frederick Engels, Socialism, Utopian and Scientific, trans- 
 lated by E. Aveling (New York, 1901), pp. 41, 42. 
 
2.2 MARXISM VERSUS SOCIALISM 
 
 In these crises the whole mechanism of capitaHst 
 production breaks down under the pressure of pro- 
 ductive forces which the existing society can neither 
 utiHze nor harness. Thus capitahsm stands convicted 
 of incapacity further to direct these forces. The con- 
 centration of industry and of wealth, the proletariza- 
 tion of the masses, the deterioration of the proletariat, 
 the increasing virulence of class struggles in politics 
 and the increasing disastrousness of commercial crises 
 — what do these developments indicate but the rapidly 
 approaching cataclysm of the capitalistic mode of pro- 
 duction? And what do they herald but the expro- 
 priation of the means of production by society as a 
 whole ? 
 
 The concentration of industry is already socializing 
 production. The old anarchic production is gradually 
 disappearing. The producers on a large scale in a 
 particular branch unite in trusts, determine the total 
 production and regulate the price. '' In these trusts, 
 freedom of competition changes into its very opposite 
 — into monopoly; and the production without any 
 definite plan of capitalistic society capitulates to the 
 production upon a definite plan of the invading so- 
 cialistic society. Certainly this is so far still to the 
 benefit and advantage of the capitalists. But in this 
 case the exploitation is so palpable that it must break 
 down. No nation will put up with production con- 
 ducted by trusts, with so barefaced an exploitation of 
 
MARXIAN SOCIALISM IN OUTLINE 23 
 
 the community by a small band of dividend- 
 mongers." ^ 
 
 While the concentration of industry goes on, the 
 capitalist mode of production completes the trans- 
 formation of the majority of the population into 
 proletarians,'* who under the penalty of their own de- 
 struction are bound to seize the political power and 
 turn the socialized means of production into state 
 property, thereby putting an end to their own misery, 
 to the existence of a ruling class and to all class 
 struggle. The final step will require a forcible over- 
 throw of all existing social conditions. Then let the 
 ruling class tremble before the coming of social revo- 
 lution. The proletarians have a world to gain and 
 nothing to lose but their chains. The proletarians do 
 not indulge in Utopias. They are not concerning 
 themselves with the details of the future socialist or- 
 ganization of society; when the time comes, the very 
 conditions of production will determine the mode of 
 distribution. All that the proletarians are called upon 
 to do is to take a conscious part in the inevitable class 
 struggle. Their victory is foreordained.^^ 
 
 ' Engels, op. cit., New York ed., p. 44. 
 
 " Ibid., p. 48. 
 
 ^^ '* The abandoning of private ownership of the means of pro-- 
 duction will become a necessity of nature through economic 
 development. The same economic development, however, will, 
 with like necessity, bring about a method of production 
 which must and will take the place of the existing one. Indeed, 
 whoever has eyes to see can already discern not only the shoot, 
 
24 MARXISM VERSUS SOCIALISM 
 
 ^ 
 
 These are the fundamental conceptions of Marxian 
 socialism, of modern socialism, of so-called scientific 
 socialism. This is the " common platform," to use 
 the phrase of Engels, " acknowledged by millions of 
 workingmen from Siberia to California." Let us 
 look into these doctrines. 
 
 but also that it has grown fairly high." Karl Kautsky, 
 Grundsdtze und Forderungen der Sozialdemokratie, Erl'du- 
 terungen zum Erfurter Programm (Berlin, 1892), p. 15. 
 
CHAPTER III 
 
 THE ECONOMIC INTERPRETATION OF 
 HISTORY 
 
 Marxism, as we have seen, claims to have little 
 interest in pious wishes. Its " fundamental proposi- 
 tion " is the economic interpretation of history.^ In 
 the light of this theory it examines contemporary 
 economic tendencies, commercial crises, concentration 
 of production, proletarization of the masses, the class 
 struggle, etc., and comes to the conclusion that social- 
 ism, i.e., expropriation of the means of production 
 by the working class in the interests of society as a 
 whole, is inevitable and certain. It does not imagine 
 
 * Engels himself calls the economic interpretation of history 
 the " fundamental proposition." That it is the fundamental 
 proposition is of course evident from the whole system. Yet 
 in Professor Le Rossignol's recent book on Orthodox: Socialism 
 we read : ** And if it could by any possibility be shown that 
 socialism, as a system of thought, is utterly untenable, the true 
 socialist would retreat to his last stronghold, and say that social- 
 ism, in the last analysis, is not a system of thought, but a 
 process of social evolution, a law of the industrial world irre- 
 sistibly moving on toward its final destiny" (p. s). What this 
 author means by Marx's *' system of thought " is not made 
 evident; but it is clear that he fails to see that the economic 
 interpretation of history underlies the Marxian system. It is 
 this interpretation of history that furnishes the Marxian socialist 
 with the " process of social evolution," which is not his last, 
 but his first and last stronghold. 
 
 25 
 
26 MARXISM VERSUS SOCIALISM 
 
 that a new organization of society can be forcibly 
 introduced before society is ready for it. Marx cate- 
 gorically states that " no social order ever disappears 
 before all the productive forces, for which there is 
 room in it, have been developed; and new higher rela- 
 tions of production never appear before the material 
 conditions of their existence have matured in the womb 
 of the old society." ^ 
 
 How could Marx make such a statement, and yet 
 believe in the imminent breakdown of capitalism, with 
 socialism speeding on its trail? The answer is that 
 the economic interpretation of history had for Marx 
 and Engels in the middle of the last century quite 
 a different meaning from that which even the most 
 ardent and orthodox socialists can possibly give to it 
 to-day. An incident narrated by Liebknecht in his 
 reminiscences of Marx may serve as an illustration : 
 " Marx, all flushed and excited, told me that during 
 the last few days the model of an electric engine 
 drawing a railroad train was on exhibition in Regent 
 Street. Now the problem is solved — the consequences 
 are indefinable. In the wake of the economic revolu- 
 tion the political must necessarily follow, for the latter 
 is only the expression of the former." ^ And poor 
 Liebknecht could not sleep that night, for he saw the 
 revolution coming. The model on Regent Street was 
 
 ^ Marx, A Contribution to the Critique of Practical Economy, 
 translated by N. I. Stone, p. 12. 
 
 ^ Liebknecht, Karl Marx, Biographical Memoirs (Chicago, 
 1906), p. 57. 
 
HISTORY'S ECONOMIC INTERPRETATION 27 
 
 to him a Trojan horse, which the bourgeois society 
 was leading in suicidal blindness into the citadel. Now 
 the fate of capitalism was settled! That was in July, 
 1850. " And to-day is 1896, the beginning of April," 
 adds Liebknecht sadly. This incident gives an idea 
 of the tempo in which Marx believed that social read- 
 justments are bound to follow economic changes, the 
 tempo in which all the " superstructures " of legal and 
 political nature, all the " ideological " expressions of 
 human consciousness, are dragged and driven by the 
 material forces of production, f In his belief the body 
 of law that corresponds to a certain mode of produc- 
 tion becomes not only antiquated but meaningless and 
 invalid as soon as the mode of production changes. 
 Marx did not express this merely as an academic prop- 
 osition, he made it his defense when charged with agi- 
 tating an armed rebellion. Before the court and jury 
 of Cologne he pointed to the Code Napoleon and de- 
 clared it to be no more binding than a stack of waste 
 paper. It had lost for him its validity, because the 
 economic conditions, to which it gave expression, had 
 ceased to exist.* )A social revolution was therefore 
 
 * " Society, however, does not rest upon law. That is a legal 
 fiction. Rather the law must rest on society. It must be 
 the expression of the interests and needs of society which 
 result from the social and invariably material method of 
 production as against the arbitrariness of the individual. 
 As for the Napoleonic Code, which I have in my hand, that has 
 not engendered modern civil society. This society, which arose 
 in the eighteenth century and developed in the nineteenth, finds 
 in the Code only a legal expression. As soon as that no longer 
 
28 MARXISM VERSUS SOCIALISM 
 
 imminent. In the autumn of 1850, in the magazine I 
 Die neue Rheinische Zeitung, Marx states with assur- 
 ance : " A new revolution is possible only in conse- 
 quence of a new crisis. The former , however, is as 
 certain as the latter/' ^ The crisis came and the crisis 
 went, but there was no sign of a revolution. This 
 tends to show that no matter how great a discovery, 
 how true a doctrine the economic interpretation of 
 history may be, it is not an altogether safe instrument 
 for social forecasts. In 1895, in his preface to 
 Marx's Klassenkdmpfe in Frankreich, Engels ac- 
 knowledged the fact that he and Marx had altogether 
 underestimated the strength and vitality of capitalistic 
 society. " History has proven that we, and all that 
 have thought similarly, were wrong. History has 
 made it clear that the state of economic development 
 on the continent was far from ripe for the abolition of 
 the capitalistic mode of production." ® 
 
 For a prognosis of the future the economic inter- 
 pretation of history is available only when the eco- 
 nomic factor is the only one with which we have to 
 
 corresponds to social conditions, it is merely so much waste paper 
 . . . The laws necessarily changed with the changing condi- 
 tions of life. The maintaining of the old laws against the new 
 needs and demands of the social development is at bottom 
 nothing but a hypocritical assertion (in accord with the spirit 
 of the age) of special interests against the common interest." 
 Karl Marx vor den K'olner Geschworenen (Berlin, 1895), p. 15. 
 
 ^ Literarischer Nachlass von Karl Marx und Friedrich Engels, 
 1841-1850, Bd. Ill (Stuttgart, 1902), p. 468. 
 
 ^ Karl Marx, Die Klassenkdmpfe in Frankreich, 1848-1850, 
 mit Einleitung von Friedrich Engels (Berlin, 1895), p. 8. 
 
HISTORY'S ECONOMIC INTERPRETATION 29 
 
 deal, when the other factors of social life are but 
 feeble reflexes of the forces of production — naturae 
 nahiratae, to use Spinoza's expression — wholly incapa- 
 ble of exerting any independent influence. Then in- 
 deed the social organism is very simple, and social 
 science can be reduced to a social mechanics. Did 
 Marx actually carry his theory so far as this? As 
 early as 1852, in The Eighteenth Brumaire of Louis 
 Bonaparte, he acknowledges the power of traditions: 
 " Man makes his own history, but he does not make 
 it out of whole cloth; he does not make it out of 
 conditions chosen by himself, but out of such as he 
 finds close at hand. The traditions of all past genera- 
 tions weigh like an Alp upon the brain of the living." "^ 
 But while such concessions can be found in Marx's 
 writings, his interpretation of history was from the 
 beginning rigidly and harshly economic. In later years 
 Engels had to confess that he and Marx, were partly 
 responsible for the fact that their followers sometimes 
 laid more stress on the economic side than ^it deserved.* 
 
 ' Karl Marx, The Eighteenth Brumaire of Louis Bonaparte, 
 translated by Daniel De Leon (New York, 1898), p. 5. Of 
 course the German word Alp should have been translated " night- 
 mare." 
 
 * " That at times more stress was laid by our followers upon 
 the economic side than it deserved both Marx and I had in 
 part to confess. We had to emphasize against our opponents 
 this main tenet of ours which was denied, and there was not 
 always time, place or opportunity to give the other principles 
 their due. But when it came to the treatment of an historical 
 proposition, there the situation was different and no error 
 was possible. It is, however, only too frequently that men think 
 
30 MARXISM VERSUS SOCIALISM 
 
 He admits that all the so-called ideological super- 
 structures exert an influence and are in constant inter- 
 reaction. The economic cause is but their original 
 and perhaps very remote source. But still the eco- 
 nomic factor is the predominant one. Thus Engels 
 wrote in 1894: " It is not that the economic situation 
 is the cause, in the sense of being the only active agent, 
 and that everything else is only a passive result. It 
 is, on the contrary, a case of mutual action on the 
 basis of the economic necessity, which in the last in- 
 stance always works itself out." ^ 
 
 In the same letter Engels still further widens and 
 modifies the economic interpretation. The geograph- 
 ical basis is included in economic relations, and " race 
 is itself an economic factor." ^^ Again we are told 
 that all '' the political, legal, philosophical, religious, 
 literary and artistic developments rest upon the eco- 
 nomic. But they all react upon one another and upon 
 
 that they have completely understood a new theory and are 
 competent to use it without more ado as soon as they have 
 mastered its main points, and that not always correctly. I 
 cannot spare some of the later followers of Marx this reproach, 
 and now and then most curious stuff was produced by them." 
 This letter is dated September, 1890, and was first published in 
 Der sosialistische Akademiker, October, 1895. It is here quoted 
 from Masaryk, Philosophische mid sosiologische Grundlagen des 
 Marxismus (Wien, 1899), p. 104. 
 
 ^ Letter in Der sosialistische Akademiker, quoted in Woltman, 
 Der historische Materialismus (1900), p. 249. A portion of the 
 letter is also reprinted in Seligman, The Economic Interpreta- 
 tion of History (New York, 1902), pp. 64, 65. 
 
 '' Ibid. 
 
HISTORY'S ECONOMIC INTERPRETATION 31 
 
 the economic basis." " This conception of history is 
 very far from the original contention of Marx and 
 Engels. It is doubtful whether this economic inter- 
 pretation is methodology's last word, but it has stood 
 its ground well. Scholarly criticism, like that of 
 Stammler, Seligman and others, has considerably 
 broadened and modified the theory but has not over- 
 thrown it. 
 
 The paramount importance of the economic factor 
 in history has been practically conceded, but whether 
 this new method will transform history into an exact 
 science is exceedingly doubtful. One of the obstacles 
 in the way of scientific history is the general desire 
 of men for unscientific history. What social science 
 can tell us with tolerable accuracy, viz., the broad, 
 general changes in humanity's methods of work, in 
 its conceptions and its institutions, does not satisfy us. 
 It is life in terms of life that attracts us. We want 
 books like The True Portraicture of His Sacred 
 Majesty King Charles I in His Solitudes and Suf- 
 ferings; we want to hear all about the personal life 
 and influence of every mistress of Louis XIV; we 
 want all the actors and puppets of history depicted and 
 analyzed. It is scientifically impossible, but the im- 
 possible has to be done. Vox populi, vox Dei. Ac- 
 cordingly, the historian revivifies dead heroes and tells 
 us more about them than he could truthfully state 
 about his next-door neighbor, often more than he 
 ^* Ihid. The italics are mine. 
 
32 MARXISM VERSUS SOCIALISM 
 
 actually knows about himself. In doing so, however, 
 he makes no freer use of his imagination than the 
 theologian, the philosopher, the sociologist, or any 
 talkative scientist in his particular branch of knowl- 
 edge. Mephisto might have addressed them all : 
 
 *' Is if the first time in your life you're driven 
 To hear false witness in a casef 
 Of God, the world, and all that in it has a place, 
 Of man, and all that moves the being of his race, 
 Have you not terms and definitions given 
 With brazen forehead, daring breast? 
 'And, if you'll probe the thing profoundly. 
 Knew you so much — and you'll confess it roundly! — • 
 
 As here of Schwerdtlein's death and place of rest? " 
 
 > 
 
 Quite so ! And yet among the traits that humanity 
 cannot lose without losing its identity are the " brazen 
 forehead and daring breast " — in other words, the 
 aspiration to know, to understand, to comprehend. 
 Our conceptions have varied, so has our knowledge, 
 but never our desire. The effort of thought and im- 
 agination to go beyond the limits of knowledge is 
 only a part of our constant endeavor to overcome by 
 intellect our physical disabilities. There are, in the 
 history of such efforts, partial failures more inspiring 
 than our most signal successes. A place of honor 
 among such partial failures belongs to Marx's eco- 
 nomic interpretation of history. It was an attempt 
 
HISTORY'S ECONOMIC INTERPRETATION 33 
 
 to make an exact science of our past, to solve the 
 problems of the present and to disclose to us with 
 scientific precision our future. We have seen that the' 
 method has already lost the extreme simplicity w^hich 
 constituted its chief youthful charm. It is no longer 
 simply economic; the independent power and influence 
 of our traditions, our political and religious convic- 
 tions and our various ideologies have been recognized ; 
 and no method has been discovered to measure quanti- 
 tatively the forces of these ideal powers, either abso- 
 lutely or in relation to the basic economic factor. 
 Under these circumstances and in view of the com- 
 plexity of the forces that must be taken into account, 
 no scientific prognosis of our future is possible. In 
 a general way we can of course discuss the probable 
 political or social consequences of our present eco- 
 nomic tendencies. There is nothing to hinder proph- 
 ecy, but there is also no guaranty of its fulfilment. 
 It has already been pointed out that the economic 
 interpretation of history is of great value in analyzing 
 the underlying conditions of a given historic epoch. 
 Engels's amendments to the original formulation of 
 the economic interpretation are so broad that it has 
 entirely lost its original character of a cook-book 
 recipe for making history. Even its name may be 
 a misnomer, since traditions weigh and ideals count, 
 and both modify the economic basis. But at least this 
 much of it remains — its demand for a strictly realistic, 
 consistent, causally connected history. In dealing with 
 
34 MARXISM VERSUS SOCIALISM 
 
 
 a social movement, a political event or a type of cul 
 ture, the historian must causally explain its genesis 
 He cannot beg the question simply by appealing to 
 some inborn traits and characteristics of the given 
 decade or the given nation. These traits and char- 
 acteristics must themselves be causally explained. But 
 no explicit directions can be given for connecting a 
 particular situation or event with particular precedent 
 conditions or events. This is left to the judgment, 
 discrimination and intuition of the historian. Of two 
 historians, therefore, both adhering to the same 
 method, one may prove himself an imbecile, the other 
 a genius. The application of the method remains an 
 art. 
 
 This is well illustrated by some of the writings of 
 Engels. Here for instance is his explanation of the 
 Protestant Reformation : " The bourgeoisie, for the 
 development of its industrial production, required a 
 science which ascertained the physical properties of 
 natural objects and the modes of action of the forces 
 of nature. Now up to then science had but been the 
 humble handmaid of the church, had not been allowed 
 to overstep the limits set by faith, and for that reason 
 had been no science at all. Science rebelled against 
 the church; the bourgeoisie could not do without 
 science, and, therefore, had to join the rebellion.'' ^^ 
 So " bourgeoisie " and " science " are responsible for 
 
 ^^ Engels, Socialism, Utopian and Scientific (New York, 1901), 
 p. xxii. The italics are mine. 
 
HISTORY'S ECONOMIC INTERPRETATION 35 
 
 the Protestant revolt. That is both new and startling ! 
 The exact date of the appearance of the " bourgeoisie " 
 is nowhere definitely given by Marx or by Engels, hut 
 as to its approximate date they leave no doubt. Hn 
 the Communist Manifesto we are told that the rule of 
 the bourgeoisie has lasted " scarce one hundred 
 years," ^^ and that during the French Revolution the 
 bourgeois epoch was still only " impending." ^* It 
 therefore appears that the bourgeoisie was shaking 
 Rome and remodeling religion some three hundred 
 years before its epoch arrived, j Still more remarkable 
 is the activity attributed to science in the period of 
 the Reformation. Science in the sense of Marx and 
 of Engels did not then exist. Nor, in the pre- 
 Reformation period, was there anything like the later 
 conflict between science and religion. There is no 
 case on record in which the Church of Rome, before 
 the Reformation, seriously interfered with learning. 
 It had none of the organs of suppression which it later 
 developed in such abundance. There was no index 
 expurgatorius, and before the fifth Lateran Council 
 there was no censorship of books. All new learning 
 as a matter of fact was patronized by the worldly 
 court of Rome.) A certain amount of heresy was 
 there considered a sign of good breeding: The air 
 of Rome before the Reformation was certainly a great 
 deal freer than that of Wittenberg and Geneva after 
 
 ^' Communist Manifesto, Kerr ed., p. 20. 
 " Ihid., p. 59. 
 
36 MARXISM VERSUS SOCIALISM 
 
 the Reformation. The statement, therefore, that the 
 Reformation was in its essence a rebellion of science 
 against the church is ludicrous. There are no facts 
 to support it/^ / 
 
 Neither the bourgeoisie nor science had anything to 
 do with the Reformation. Nor was it a religious 
 issue at the outset, but, as Mr. Henry C. Lea has 
 pointed out, an economic issue. In the famous in- 
 dictment of the papacy by Ulrich Hutten, addressed j 
 to Leo X in 15 17, there is not a single word about 
 faith or doctrine. His " whole gravamen'' as Mr. \ 
 Lea observes, " consists in the abuse of power — the 
 spoliations, the exactions, the oppression, the sale of 
 dispensations and pardons, the fraudulent devices 
 
 ^^ It is singular that Engels should not have perceived that ^ 
 the Protestant revolt was susceptible of a more direct and more f 
 plausible economic interpretation than that which he selected. 
 Cf. Henry C. Lea, " The Eve of the Reformation," in The Cam- 
 bridge Modern History, vol. i (New York, 1902), ch. xix, pp. 
 653-692. As a matter of fact the first to give an economic inter- 
 pretation of the revolt was Luther himself. One has only to 
 read his address, An den Christlichen Adel Deutscher Nation 
 von des Christlichen Standes Besserung, to see that the Reforma- 
 tion was largely a protest against the fearful economic exploita- 
 tion of Germany by the Church of Rome. Luther writes, for 
 example : " How is it that we Germans are forced to suffer 
 such theft and exploitation by the pope? ... I think that Ger- 
 many gives much more now to Rome and the pope than it did 
 in former days to the emperors. Yes, many of us think that 
 every year over 300,000 gulden go from Germany to Rome, 
 purely in vain, and in return we get but derision and abuse. And 
 then we wonder that princes, nobles, cities and monasteries, land 
 and people, grow poor ! We ought rather to wonder that we 
 still have something to eat. ... If we hang thieves by law. 
 
HISTORY'S ECONOMIC INTERPRETATION 37 
 
 whereby the wealth of Germany was cunningly 
 transferred to Rome." ^® 
 
 One cannot read the contemporary documents with- 
 out being aware of the fact that the Protestant Ref- 
 ormation was a political revolution, chiefly incited by 
 an economic grievance. It was a refusal of tribute 
 to a foreign power. Mr. Lea shows that before the 
 Reformation the most Catholic and orthodox states, 
 like Spain and France and the Italian cities, were con- 
 stantly on the verge of revolt against the papacy, and 
 this on account of financial exactions, although there 
 was also much complaint of interference in the admin- 
 istration of justice. All these symptoms and warn- 
 ings, however, had no effect on Rome. The Curia 
 continued to act as if the Decalogue had been intended 
 to serve as a source of revenue for Rome. Its venality 
 
 and behead robbers, why should we allow this Roman miser, 
 who is the greatest thief and robber that has ever appeared or 
 ever will appear on earth, to go free? . . . There is in Rome 
 a constant buying, selling, exchanging, bartering, intoxication, 
 lying, deceiving, robbing, stealing, boasting, whoring and vil- 
 lainy. . . . Venice, Antwerp and Cairo can in no way compete 
 against this fair and traffic of Rome. ... At last the pope 
 has erected an exchange especially for all these noble com- 
 mercial transactions, the Datorius House at Rome. Thither 
 must come all those who act in this way in order to obtain 
 fiefs and livings. ... If you have money in this exchange, 
 then you can get everything, and not only that, but here all 
 sorts of usury are considered honest money, and stealing goods 
 is vindicated. . . . Oh, what skinning and what exaction go 
 on there; it is made known that all the laws of God are only 
 made so that money can be amassed, money which must be had 
 in order to be a Christian." 
 ^^ Lea, loc. cit., p. 667. 
 
38 MARXISM VERSUS SOCIALISM 
 
 became proverbial. Even ^^neas Sylvius, before he 
 became pope, had no scruple, as Mr. Lea informs us, 
 in asserting that everything was for sale in Rome, and 
 that nothing was to be had there without money. The 
 most popular books of the time, like the Stultifera 
 Nams of Brandt and the Schelmenzunft of Thomas 
 Murner, were savage attacks on Rome. Murner is 
 never tired of dwelling on the scandals and exactions 
 of the clergy from high to low, from bishop to monk. 
 When the lord, he tells us, has shorn the sheep, the 
 priest comes and fairly disembowels it. The invention 
 of printing aided greatly in making the opposition 
 to Rome European, in fusing local grievances into 
 a general discontent and hostility. When Luther hung 
 up his theses on the church door of Wittenberg, they 
 were read and known a month later in every school and 
 convent of Europe. 
 
 The Protestant revolt started in Germany because 
 this country was politically weak and consequently 
 the more exposed to Rome's rapacity. In France and 
 Spain the kings were able to resist the demands of 
 the Curia with some measure of success; in Germany 
 the emperor had no corresponding power. " In 1521 
 the papal nuncio Aleander writes that, five years be- 
 fore, he had mentioned to Pope Leo his dread of a 
 German uprising; he had heard from many Germans 
 that they were only waiting for some fool to open his 
 mouth against Rome." ^^ 
 
 ^■^ Lea, loc. cit., p. 690. 
 
HISTORY'S ECONOMIC INTERPRETATION 39 
 
 The financial exactions and venality of the Curia 
 caused the Protestant revolt. That is Mr. Lea's ex- 
 planation of the event. Here also we have an eco- 
 nomic interpretation of history; but how different is 
 the story from that told by Engels ! ^^ 
 
 Marxian socialism calls itself " scientific socialism " 
 because of its economic interpretation of history. 
 With the help of this method it claims to unveil to 
 us the real story of the past; with the help of the 
 same method it claims to reveal to us the future. Seri- 
 ous as are the difficulties which an analysis of the past 
 
 ^^ Extraordinary is also Engels's economic interpretation of 
 predestinarianism. Calvin's doctrine of predestination, Engels 
 informs us, " was the religious expression of the fact that, in the 
 commercial world of competition, success or failure does not 
 depend upon a man's activity or cleverness, but upon circum- 
 stances uncontrollable by him. It is not of him that willeth or 
 of him that runneth, but of the mercy of unknown superior 
 economic powers; and this was especially true at a period of 
 economic revolution, when all old commercial routes and centers 
 were replaced by new ones, when India and America were 
 opened to the world, and when even the most sacred economic 
 articles of faith— the value of gold and silver— began to totter 
 and break down." Engels, Socialism, Utopian and Scientific, 
 pp. xxiii, xxiv. As a matter of fact, however, the doctrine of 
 predestination antedates considerably Calvin's writings and En- 
 gels's commercial routes. Compare, for instance, Romans viii, 
 30: "And whom he foreordained, them he also called: and 
 whom he called, them he also justified: and whom he justified, 
 them he also glorified." Engels could find the whole doctrine 
 of predestination in St. Augustine's De libero arhitrio, in the 
 fourth century, or in Scotus Erigena's De predesfinatione, in the 
 ninth century, or in St. Thomas's Summa theologica, in the thir- 
 teenth century, to say nothing of the writings of earlier religious 
 thinkers. In defense of Engels's statement it might be urged 
 
40 MARXISM VERSUS SOCIALISM 
 
 at times presents, its data are certainly more tangible 
 than the events of the future. Engels's story of the 
 Protestant Reformation shows that his method does 
 not automatically produce a scientific history of our 
 past. Is it then reasonable to suppose that the same 
 method insures infallibility when the future is con- 
 cerned ? 
 
 There is no necessary connection between the eco- 
 nomic interpretation of history and socialism. A man 
 may interpret the past in terms of economic cause 
 and effect and yet be given to no speculations about 
 
 that the doctrine of predestination, however ancient its formula- 
 tion, did not get its hold on the people before the commercial 
 development of the sixteenth century, with its many bank- 
 ruptcies, had prepared the popular mind for such a doctrine. 
 It is true that predestinarianism did not become popular before 
 the sixteenth century. But on the other hand it is not in com- 
 mercial Venice and Genoa, but in countries very backward 
 economically, that the doctrine first came into vogue, e.g., in 
 Scotland and in New England. Sere again Engels's interpreta- 
 tion fails to interpret. The spread of predestinarianism in the 
 wake of the Protestant revolt seems to me easily comprehensible 
 without any such forced explanations. The writings of the early 
 churchmen, as we have seen, are full of predestinarianism. The 
 mediaeval Church, however, could not possibly make a basic doc- 
 trine of it, for the simple reason that, if men and women were 
 predestined to be saved or damned, then all the pardons and 
 absolutions which the Church might sell were of very doubtful 
 value. One of Germany's distinguished theologians, Johan 
 Rucherath of Wesel, who was a predestinarian, drew precisely 
 these conclusions. Such conclusions interfered with the business 
 of the Church, and he was compelled to recant in 1479. The 
 leaders of the Reformation, as we know, had a profound con- 
 tempt for " works " as they saw them practised. It seemed 
 unreasonable to Luther that salvation should depend upon the 
 
HISTORY'S ECONOMIC INTERPRETATION 41 
 
 the future, or he may be led to forecast an increasing 
 individuahsm. It would obviously be inadmissible to 
 call such an one a socialist. Until recently, neverthe- 
 less, every writer who interpreted history economically 
 was taken and declared to be an orthodox disciple of 
 socialism. This was no chance error, but rather a 
 well-defined type of a mode of classification in which 
 the popular mind habitually indulges. The popular 
 mind, it is well to remember, does not dwell with the 
 philosophers in their '' marble temple shining on a 
 hill," but in the muddy world of concrete personal 
 experiences.^^ Systems of philosophy, or scraps of 
 
 " works " which he had such abundant opportunity to observe, 
 and we see him turning to salvation by faith. Calvin, likewise 
 detesting the " works " of the Romanists, took another road 
 of opposition — predestinarianism. The doctrine of salvation by 
 faith and the doctrine of election alike emphasized the opposition 
 of the reformers to the purely technical character of the " works " 
 required by Rome. Interesting are Dr. Bush's observations on 
 the practical reasons which led two such contrasting centuries as 
 that of Augustine and Calvin to determinism. " If a large part 
 of the system of ideas known as Augustinian was invented in 
 the fifth century to prove the necessity to man of the official 
 ministrations of the Church, it was adapted in the sixteenth and 
 seventeenth centuries to prove the futility of those ministrations. 
 How should the sacraments play any part in a man's salvation 
 if this is a matter decided by the direct election of God? How 
 should some words spoken by a priest control the action of 
 grace ? For precisely opposite reasons to those which influenced 
 Augustine, the Augustinian determinism became a dogma of the 
 Reformation; in the one case determinism to prove the necessity 
 of sacraments, in the other to prove the futility of sacraments." 
 Wendell T. Bush, " Sub specie aeternitatis," in The Journal of 
 Philosophy, Psychology and Scientific Methods, vol. iv (1907), 
 P- 660. ^^ William James, Pragmatism (1907), pp. 21, 22. 
 
42 MARXISM VERSUS SOCIALISM 
 
 them, act upon the mind of the public only after they 
 have become part and parcel of that tangle of experi- 
 ences through which it has to find its way. In assort- 
 ing and classifying theories the popular mind is guided 
 not by logic but by experience. It perceives that cer- 
 tain theories, philosophical and literary, are set forth 
 and defended by persons who hold certain social or 
 political views; and by a process which may be de- 
 scribed as " substitutional " it identifies the theories 
 with the tendencies which they foster and subserve. 
 Thus in Russia, for decades, the writers who defended 
 " art for art's sake " were immediately recognized as 
 political reactionaries, while every " realist " was as- 
 sumed to be a liberal or a radical. Similarly in Ger- 
 many, during the first half of the nineteenth century, 
 *' romanticism " stood for political conservatism, if not 
 for reaction, while in Feuerbach's decade '* natural- 
 ism " stood for political revolution and a humani- 
 tarian socialism. Similarly Marx's economic inter- 
 pretation of history has come to stand for militant 
 socialism. 
 
 Logically, such substitutions were and are inde- 
 fensible. The connection between these theories and 
 the practical ends which they were used to subserve 
 was local or temporary. In England, for example, 
 William Blake, who was certainly neither realistic nor 
 naturalistic, who shared with German romanticists and 
 Russian devotees of art for art's sake the love of the 
 symbolic and mystic, inclined in his political theories 
 
HISTORY'S ECONOMIC INTERPRETATION 43 
 
 to revolutionary socialism."*^ In England, " art for 
 art's sake " was preached by William Morris, a so- 
 cialist, and by Oscar Wilde, who saw in man's first 
 disobedience man's original virtue, advocated the aboli- 
 tion of property, urged taking rather than begging, 
 marked down all our values and considered our society 
 to be bankrupt. Similarly, the economic interpreta- 
 tion of history has been divorced from socialism. To- 
 day, as Professor Seligman points out, " the writers 
 who are . . . making the most successful applica- 
 tion of the economic interpretation are not socialists at 
 all." '^ 
 
 In their place and time, however, these popular clas- 
 sifications were accurate. The Russian literary men 
 of the sixties who advocated art for art's sake repre- 
 sented a religious and political authoritarianism. On 
 the other hand, the faithful description of the actual 
 conditions of existence in Russia which the realists 
 called for and supplied meant propaganda, primarily 
 of discontent, ultimately of revolution. The German 
 romanticists were conservatives or reactionaries; and 
 Feuerbachian naturalism, according to Feuerbach him- 
 self, was intended to prepare the way for the recon- 
 
 ^^ C/. William Blake, Poetical Works (Rossetti's ed., 1890), 
 p. 142. Regarding Blake as a " Liberty boy " and his attitude 
 towards the Revolution, cf. Edwin J. Ellis, The Real Blake 
 (London, 1907), pp. 162 et seq. 
 
 ^'- Seligman, The Economic Interpretation of History (1902), 
 p. 109. 
 
44 MARXISM VERS^US SOCIALISM 
 
 struction of the political and social order. ^^ Similarly, 
 the popular identification of the economic interpreta- 
 tion of history with socialism represented a correct 
 appreciation of Marx's motives and of the practical 
 bearing of the method as employed by him and his 
 disciples. 
 
 It was for political reasons that Marx emigrated 
 to France; it was for similar reasons that he was 
 exiled from France; in Brussels he lived under the 
 constant and suspicious supervision of the Belgian 
 ** administration of public safety." Is it to be assumed 
 that he gave so much concern to the several govern- 
 ments because he was busily engaged in elaborating 
 a scholarly method for historical research? Or is it 
 to be assumed that a year after the hunger riots of 
 the Silesian weavers, a year or two before the revolu- 
 tion of '48, he was taking a rest from all political 
 activity, escaping the turmoil by giving himself up to 
 the joys of pure theory? 
 
 Far from it. We see Marx and Engels speculating ; 
 but the axes upon which their speculations revolve are 
 the social movement and the political revolution. 
 Their literary activity is their political activity.^^ The 
 economic interpretation was not the offspring of dis- 
 
 ^^LuDWiG Feuerbach, Werke (Leipzig, 1846), I, pp. xiv, xv. 
 
 ^^ ". . . It is hence quite evident how important a place the 
 desire to do practical work above all else held in this literary 
 plan on which Marx and Engels had for a long time been intent." 
 Aus dem literarischen Nachlass von Marx, EngeU, etc. (Stutt- 
 gart, 1902), II, p. 332. 
 
HISTORY'S ECONOMIC INTERPRETATION 45 
 
 passionate research; it was conceived in minds sat- 
 urated with ideas of social revolution. As early as 
 1845, at the Elberfeld gathering of communists, En- 
 gels, still a half-Utopian so far as the future organiza- 
 tion of society was concerned, argued for communism 
 as an economic necessity and pictured the social revo- 
 lution as economically unavoidable. " With the same 
 certainty," Engels tells us, " with which from a given 
 mathematical proposition a new one is deduced, with 
 the same certainty we can deduce the social revolution 
 from the existing social conditions and the principles 
 of political economy." ^* Two years later Marx and 
 Engels were writing the Communist Manifesto, the 
 '' fundamental proposition " of which is the economic 
 interpretation of history. 
 
 The propaganda of the economic interpretation of 
 history, of the " critical insight into the conditions, 
 progress and general results of the actual social move- 
 ment," ^^ was Marx's chief activity during the years 
 1846-1848, and this activity was political. He was 
 not conducting a historical seminar in Brussels; he 
 was supplying the revolutionary army with a new 
 revelation and was instilling into it a spirit of absolute 
 confidence in the triumph of its cause. It was the 
 future that concerned him ; the past was a piece justi- 
 ficative. An interpretation of history he called it, be- 
 
 ^* Rheinische Jahrhucher zur gesellschaftlichen Reform, heraus- 
 gegeben von Hermann Piitmann, vol. i (Darmstadt, 1845), pp. 
 78, 79. 
 
 ^' Marx, Herr Vogt (London, i860), p. 35. 
 
46 MARXISM VERSUS SOCIALISM 
 
 cause to him, born as he was in the Hegelian school, 
 past, present and future were one historical process. 
 
 It was Marx's economic interpretation of history, 
 and not that of any other man, which attracted public 
 attention; and in classifying the economic interpreters 
 of history as socialists, the popular mind exhibited, 
 as in other similar cases, a perfectly sound apprecia- 
 tion of both the psychological motive and the practical 
 aim of the theory. But this classification also has 
 proved to be temporary. To-day, such is the irony 
 of fate, the economic interpretation of history, while 
 of great valuef to the historical student, is an unyield- 
 ing and merciless steel trap in which so-called scientific 
 socialism is caught and held. 
 
CHAPTER IV 
 
 CONCERNING CONCENTRATION OF PRO- 
 DUCTION IN INDUSTRY AND AGRICUL- 
 TURE 
 
 The socialistic state of Marx was not to be manu- 
 factured by any world-reformer. Socialism was to 
 be a product of economic tendencies, and of these the 
 most important was the concentration of production. 
 
 Any one who is acquainted with the thought of the 
 nineteenth century knows that the industrial changes 
 that were in progress were very generally viewed with 
 misgivings if not with apprehension. In the first half 
 of the century, i.e., at the time when the doctrines of 
 scientific socialism were formulated, the tall chimney, 
 to use Schultze-Gaevernitz's expression,^ was generally 
 regarded as a warning finger — a mene tekel of im- 
 pending revolution. The social effects of the intro- 
 duction of machinery were too serious to be over- 
 looked. The tendency towards industrial centraliza- 
 tion and the social, economic and political aspects of 
 this tendency were attracting the attention of many 
 
 ' Schultze-Gaevernitz, The Cotton Trade in England and on 
 the Continent (London, 1895), p. 164. 
 
 47 
 
48 MARXISM VERSUS SOCIALISM 
 
 thoughtful men before Marx began to speak or write. 
 What was drastically formulated by Marx as an un- 
 avoidable necessity had been previously suggested and 
 discussed as a possibility. Constantin Pecqueur,^ for 
 example, had pointed out with remarkable clearness 
 that the older methods of production could not com- 
 pete with the modern factory, and that production on 
 a large scale was so much cheaper that the centraliza- 
 tion of industry was a matter of economic necessity.^ 
 Pecqueur had also raised the question : If production on 
 a large scale has undoubted advantages, what is likely to 
 happen to the small establishments ? and had answered 
 that they would be wiped out by cruel competition, and 
 that the small producers would possibly themselves 
 become proletarians. Socially and politically such a 
 situation would reduce itself to a new industrial feudal- 
 ism. The sole alternative which he saw was a central- 
 
 ^ C, Pecqueur, Economie sociale: Des interets du commerce, 
 de I'industrie et de ['agriculture, et de la civilisation en general, 
 sous I'iniiuence des applications de la vapeur (2d ed., Paris, 
 1839). This work of Pecqueur was widely read and was 
 crowned by the French Institute. 
 
 ^ " Every one knows that, in reality, in using steam to reduce 
 the cost of products and realize great advantages, it is necessary 
 to operate on a large scale, to use large amounts of capital and 
 a large number of workmen ; in a word, to produce on a large 
 scale. . . . Otherwise there is no economy. The expense of the 
 initial establishment and maintenance of two steam-engines of 
 unequal power is not proportional to their degree of inequality. 
 Thus an engine twice as powerful as another does not cost twice 
 as much ; it does not require two stokers instead of one, twice as 
 much room, twice as much fuel, nor twice as much time to 
 operate." C. Pecqueur, op. cit., I, pp. 56, 57. 
 
CONCENTRATION OF PRODUCTION 49 
 
 iztd industry on democratic lines, based on copartner- 
 ship and cooperation/ 
 
 Whether Pecqueur influenced Marx is immaterial. 
 The ideas expressed by the French economist were 
 at the time more or; less common property. Only the 
 way in which Marx formulated them is important. 
 For him it was not a question of a choice between 
 industrial feudalism or industrial democracy. The 
 present had but one road to travel; upon the future 
 was the stamp of the inevitable. /From his point of 
 view there was no need to invent socialistic industrial 
 schemes. Industry and agriculture would necessarily 
 become thoroughly centralized and socialized. There 
 would be no need to force the artisan, the small trader, 
 the farmer into a socialistic scheme. " The small 
 tradespeople, shopkeepers and retired tradesmen gen- 
 erally, the handicraftsmen and peasants — all these 
 
 * " One may readily infer that joint stock companies or very 
 rich individual capitalists and manufacturers will swallow up the 
 work of the small producers, killing them off by competition 
 which is immeasurably unequal and cruelly pitiless ; it may happen 
 that all who are neither capitalists nor landowners will, little 
 by little, join the ranks of the proletarians. ..." Ibid., I, pp. 
 396, 397- 
 
 " Either on the disappearance of small-scale production the 
 small producers will be co-partners of the large concerns, aiding 
 in production and participating in the profits, in accordance with 
 their capacity, their capital and their work; or they will degen- 
 erate into paid workmen, into a herd of serfs working from day 
 to day in factories ; into proletarians, always poor, always without 
 a future; and all the large industries will be exclusively monop- 
 oHzed by an industrial feudalism." Ibid.j II, p. loi. 
 
50 MARXISM VERSUS SOCIALISM 
 
 sink gradually into the proletariat," ^ and the central- 
 ization of industry goes on. Nor is that to be the 
 fate of the lower middle class only. '' Entire sections 
 of the ruling classes are by the advance of industry 
 precipitated into the proletariat." ^ To the question : 
 Will socialism expropriate and abolish the hard-won 
 private property of the small farmer ? he responds : 
 " There is no need to abolish that ; the development 
 of industry has to a great extent already destroyed it, 
 and is still destroying it daily." ^ / 
 
 Marxian socialism had profound contempt for 
 Utopias. Why should amateur schemes of an eco- 
 nomic and social organization be elaborated, when 
 capitalism's own mission was to organize and central- 
 ize the production oJt the commonwealth ? No preach- 
 ing of eternal justice can assemble scattered produc- 
 tion, and there is no possibility of socialism without 
 such economic centralization. 
 
 Sixty years have passed since Marx's Manifesto was 
 published; it is therefore fair to inquire whether the 
 economic changes that have occurred have justified his 
 theories and expectations. 
 
 That a centralization of industry has taken place 
 is an undeniable fact. Moreover, this centralization 
 has gone further in this country than anywhere else 
 in the world. Professor Seligman writes : " Accord- 
 
 " Communist Manifesto (Kerr ^d.), p. 21. 
 * Ihid., p. 26. 
 ' Ihid., p. 34. 
 
CONCENTRATION OF PRODUCTION 51 
 
 ing to the census of 1900 there were 185 combinations, 
 representing 2,040 plants and turning out products to 
 the value of $1,667,350,000, a little over 14 per cent 
 of the total industrial output of the United States. 
 But since 1900 the movement has progressed rapidly. 
 In 1900 there were 16 combinations, each with a 
 capital of over $50,000,000 and with an aggregate 
 capital of $1,231,000,000. In 1907 . . . not only 
 were there 27 such combinations with an aggregate 
 capital three times as great ($3,785,000,000), but a 
 single combination now had a larger capital than the 
 16 combinations and about one-half as large as all the 
 185 combinations in 1900." ^ The combination to 
 which Professor Seligman refers is the United States 
 Steel Corporation, an industrial consolidation which 
 controls not less than 785 industrial plants. While the 
 United States is generally regarded as the land of 
 trusts par excellence, the growth of large industrial 
 consolidations and combinations is very much in evi- 
 dence both in England and on the continent of Eu-- 
 rope. 
 
 But the centralization of industry in recent years 
 is by no means primarily due to purely technical 
 conditions — to the development of the tool into the 
 machine. Steam and machinery have certainly fa- 
 vored large-scale production, but there has been no 
 such far-reaching centralization as the Marxian vision 
 of future economic development presaged. The cotton 
 
 ® Seligman, Principles of Economics {^6. ed., 1907), p. 342. 
 
52 
 
 MARXISM VERSUS SOCIALISM 
 
 industry of Great Britain, the history of which fur- 
 nished so much material to the author of Capital, ex- 
 hibited, as Bernstein has pointed out, only a very 
 moderate concentration in the twenty-odd years fol- 
 lowing the publication of Marx's work. Here is a 
 comparison of the data for 1868 as given by Marx 
 with the data for 1890: 
 
 Cotton Industry 
 
 Factories 
 
 Power-looms 
 
 Spindles 
 
 Persons employed 
 
 Average number per factory 
 
 1868 
 
 2,549 
 
 379,329 
 
 32,000,014 
 
 401,064 
 
 156 
 
 1890 
 
 2,538 
 
 615,714 
 
 44,504,819 
 
 528,795 
 
 208 
 
 Percentage 
 
 OF 
 
 decrease 0.43 
 
 increase 62.00 
 
 " 39.00 
 
 *' 32.00 
 
 " 3300 
 
 The other branches of the textile industry show, ac- 
 cording to Bernstein, even less concentration.^ In at 
 least one branch of the textile industry, in weaving, 
 the number of factories steadily increased: in 1870 
 they numbered 1,658; in 1874, 1,703; in 1878, 1,765; 
 in 1885, 1,915 ; in 1890, 2,015. In the textile industry 
 as a whole, the number of establishments fluctuated 
 as follows: in 1870 there were 6,807; in 1874, 
 7,394; in 1878, 7,105; in 1885, 7,465; in 1890, 
 7,190.^" 
 
 " Bernstein, Die Voraussetsungen des Socialismus und die 
 Aufgaben der Sodaldemokratie (Stuttgart, 1899), P- 56. 
 
 '"These data are taken from the Statistical Abstract for the 
 United Kingdom (London, 1897), pp. 202, 203. 
 
CONCENTRATION OF PRODUCTION 53 
 
 The development of the trust, therefore, can 
 scarcely be regarded as the inevitable result of indus- 
 trial technique. It is rather to be viewed as a counter- 
 revolution against free competition. Free competition 
 led persistently towards lower prices, overproduction 
 and lower profits; the desire to check the ruinous re- 
 sults of free competition has led to trade agreements, 
 pools, syndicates, combinations — to one form or an- 
 other of what we call the trust. " After all," writes 
 Macrosty, "men are in business not to exhibit the 
 * natural ' laws of economics but to make an income, 
 and it is a poor consolation to a bankrupt to know 
 that he has been overwhelmed by a stream of tend- 
 ency." ^^ 
 
 Experience has further shown that trusts do not 
 necessarily wipe out smaller concerns. In our every- 
 day language we class as trusts not only giant 
 mergers and rigid industrial consolidations, but all 
 sorts of industrial trade agreements, ^ federations, 
 pools, syndicates and associations formed for the pur- 
 pose of maintaining prices. The looser federations 
 are especially characteristic of Europe's industrial de- 
 velopment. So Macrosty sums up the tendency in 
 the English iron industry by expecting " in no very 
 remote future to see the iron industry governed by 
 loose federations of great powers, each large firm 
 
 ** Macrosty, Trusts and the State (1901), p. 152. 
 
54 MARXISM VERSUS SOCIALISM 
 
 belonging to a number of associations according to 
 the variety of its products." ^^ 
 
 As a matter of fact, pools and trade associations often 
 help to maintain smaller industrial organizations. E. J. 
 Smith, the promoter of the '' Birmingham Alliances," 
 has laid special stress on the protecting of the smaller 
 concerns, saying : " The great advantage which a large 
 capital gives must be retained as legitimate interest 
 on capital only, instead of being given away for the 
 purpose of flooding the markets with productions at 
 selling-prices which cannot be charged by less fortu- 
 nate firms without loss. Materials used in the process 
 of manufacture have their fair average market values, 
 which most makers have to pay. The purchasing of 
 large quantities of material at one time, and to be 
 paid for promptly, will no doubt make the buying- 
 prices lower to the lucky capitalist, but whatever ad- 
 vantage is gained in this way should be regarded as 
 interest on capital and retained." ^^ 
 
 The more one studies the trusts, the less one is 
 inclined to make sweeping generalizations. The types 
 of combinations are so numerous and the policies of 
 the individual combinations are so varied that only 
 one general statement can be made with confidence, 
 namely, that all trusts tend to organize to a greater or 
 
 *^ Macrosty, The Trust Movement in British Industry (1907), 
 P- 330. 
 
 ^' E. J, Smith, The New Trade Combination Movement (1899), 
 p. 27. 
 
CONCENTRATION OF PRODUCTION 55 
 
 less degree their respective industries and to maintain 
 steadier prices. 
 
 The social democrats of both continents, however, 
 see in the American trust movement proof positive 
 of the inerrancy of the Marxian forecast of economic 
 development. Certain European socialist pamphlets 
 convey the impression that the American manufactur- 
 ing industry is thoroughly concentrated and organized, 
 that the sm,aller producer is practically eliminated, 
 and that the trusts are tending toward a trust of 
 trusts. America therefore, at least technically and 
 economically, is far ahead of all other countries on 
 its way towards organized, centralized, socialized pro- 
 duction. 
 
 In studying the report on '' Manufactures " of the 
 Twelfth Census, one is impressed by the number of 
 small and middle-size industrial establishments of 
 which the report takes cognizance. Here are the 
 figures for 512,254 industrial establishments:^* 
 
 No employees, 110,510 51 to 100 employees, 11,663 
 
 Under 5 " 232,726 loi to 250 " 8,494 
 
 5 to 20 " 112,138 251 to 500 " 2,809 
 
 21 to so " 32,408 501 to 1,000 " 1,063 
 Over 1,000 employees, 443 
 
 The special census report of 1905 on " Manufactures " 
 gives us a comparative table which shows, on the 
 whole, a gradual tendency towards concentration, with 
 the small producer in many industries holding his own. 
 
 ^* Twelfth United States Census (1900), "Manufactures," 
 part i, p. Ixxiii, 
 
56 MARXISM VERSUS SOCIALISM 
 
 Indeed, the number of industrial establishments in- 
 creased from 1890 to 1900 more rapidly than the num- 
 ber of wage-earners/^ 
 
 TRr.r» Trinr, INCREASE 
 
 1890 1900 (PERCENTAGE) 
 
 Number of establishments, 355,415 512,254 44.1 
 
 Number of wage-earners, 4,251,613 5,308,406 24.9 
 
 Of course it is a fact that certain industries are cen- 
 tralized and organized on a national scale and are 
 practically monopolies. Such facts present serious 
 problems. But we are more likely to find an advan- 
 tageous solution of such problems by dealing with the 
 facts as they are than by dealing with unverifiable 
 " future " facts. 
 
 The industry of Europe is much more scattered and 
 decentralized than that of the United States. Ac- 
 cording to the last German census, 4,770,669 out of 
 about ten million wage-earners were employed in 
 petty commercial and industrial establishments with 
 one to five employees each.^^ In that country the inde- 
 pendent artisans are far from being eliminated by the 
 industrial process. In Prussia, in 1861, there were 
 534,556 masters and 558,321 apprentices; in 1900- 
 1902 the independent masters numbered 679,323, with 
 559,738 journeymen (Gesellen) and 253,055 appren- 
 
 " Special Census Report, " Manufactures," 1905, part i, p. 
 xxxvi. 
 
 ^^ SoMBART, Sosialismus und soziale Bewegung (6te Auflage, 
 Jena, 1908), p. 84. 
 
CONCENTRATION OF PRODUCTION 57 
 
 tices {Lehrlinge)}'^ In commerce the small establish- 
 ment is still more persistent than in industry. The 
 German Empire counted : ^^ 
 
 Commercial Establishments 
 
 1882 
 
 1895 
 
 Without employees 
 
 With 1-5 " 
 
 429,825 
 
 246,413 
 
 26,531 
 
 463 
 
 454,540 
 450,013 
 
 " 6-50 " 
 
 40,271 
 
 " over so " 
 
 q6o 
 
 
 
 Such is the state of concentration in German in- 
 dustry and commerce. Let us now consider the Marx- 
 ian doctrine and the facts regarding concentration in 
 agriculture. 
 
 The attitude of Marx and of Engels towards the 
 agricultural population was consistently unfriendly. In 
 their first great work the fathers of scientific socialism 
 praise capitalism for rescuing " a considerable part of 
 the population from the idiocy of rural life."|^® In 
 the second part of the third volume of Capital Engels 
 expresses the hope that the virgin soil of the Russian 
 steppes and American prairies may still ruin Europe's 
 landlords and peasantry.^^ The reason for this atti- 
 tude is obvious. On the one hand socialist production 
 is technically impossible unless scattered agriculture 
 
 " J. Wernicke, Kapitalismus und Mittelstandspolitik (Jena, 
 1907), p. 134- ^' Ibid., p. 240. 
 
 ^® Marx and Engels, The Communist Manifesto, p. 19. 
 
 ^'^ " Fortunately by no means all prairie land is as yet under 
 cultivation; there still remains enough on hand to ruin all the 
 great European landlords, and the small ones in addition." 
 Marx, Das Kapital (Hamburg, 1894), vol. iii, part ii, p. 260. 
 
58 MARXISM VERSUS SOCIALISM 
 
 is concentrated; on the other hand the socialistic 
 propaganda encounters in the peasant proprietor its 
 most conservative and most obstinate foe, against 
 whose will no social reconstruction of society is con- 
 ceivable. In a discussion of the situation in France, 
 Engels admits that no social revolution is possible 
 without the backing of the peasants. ^^ 
 I The Marxian theory of course declares that small 
 farming, like every petty industry, is doomed. This 
 we learn from the Communist Manifesto; and the 
 same information is given in the later writings of 
 Marx and Engels and in those of their official com- 
 mentators. I Thus we read in Capital: " In the sphere 
 of agriculture, modern industry has a more revolu- 
 tionary effect than elsewhere, for this reason, that it 
 annihilates the peasant, that bulwark of the old society, 
 and replaces him by the wage laborer. Thus the de- 
 sire for social changes and the class antagonisms are 
 brought to the same level in the country as in the 
 towns." ^^ In Der Vorbote, the party organ of the 
 International, Marx's ardent follower, Johann Philipp 
 Becker, declared, in large print, soon after the appear- 
 ance of Capital, that the omnipotence of capital, the 
 influence of science, the tendencies of the times and 
 the interest pf society as a whole had irrevocably and 
 
 ^^ " In one respect our French associates are absolutely cor- 
 rect ; in France no lasting revolution against the small farmers is 
 possible." Fr. Engels, " Die Bauernfrage in Frankreich und 
 Deutschland," Die neue Zeit, 1895, I, p. 301. 
 
 ^* Marx, Capital (fourth English ed., London, 1891), I, p. 513. 
 
CONCENTRATION OF PRODUCTION 59 
 
 mercilessly condemned small-scale agriculture to slow- 
 but inevitable death.^^ This attitude was characteristic 
 of the whole Marxian wing of the International. It 
 was entirely in keeping with the Marxian doctrine, 
 which may be summed up in the equation : small farm- 
 ing stands in the same relation to centralized agricul- 
 ture as the hand-loom to the power-loom in industry.^* 
 The attitude of Marxism towards the land question 
 did not change with the passing of the International. 
 We find the same doctrine, and even the same wording 
 of the doctrine, in Liebknecht's Grtind- und Boden- 
 frage, which for years served as a catechism for so- 
 cialist agitation among the German peasantry. The 
 central assertion of this booklet is that the small agri- 
 culturist is doomed.^^ The doctrine is set forth to-day 
 
 ''^ Der Vorhote, December, 1869, p. 181. 
 
 **J. Georg Eccarius, Eines Arheiters Widerlegung der na- 
 tionokonomischen Lehren John Stuart Mills (Hottingen-Zurich, 
 1888), p. 52. This booklet of Eccarius was revised by Marx 
 and is consequently an authorized expression of his views. On 
 page 57 of the same pamphlet one reads : " Farming on a small 
 scale is politically, socially and economically doomed. It has 
 nowhere fulfilled expectations and will nowhere keep pace with 
 modern industry and social progress. It is the fifth wheel on 
 the wagon, impeding political and social progress, the leaden 
 weight which has paralyzed labor agitation in France and else- 
 where on the Continent." 
 
 *^ W. LiEBKNECHT, Die Grund- und Bodenfrage (Leipzig, 
 Verlag der Genossenschaftsbuchdruckerei, 1874). The pamphlet 
 ends (p. 128) with the words : " In short the steam plow will 
 revolutionize agriculture in the same way as the steam loom 
 and the spinning jenny have already revolutionized industry, — 
 by destroying production on a small scale." The important 
 fact is not that the booklet was in great vogue but that its posi- 
 
6o MARXISM VERSUS SOCIALISM 
 
 in every Marxian social-democratic program. The 
 program of the German Social Democratic party be- 
 gins with the well-known sentence : " The economic 
 development of bourgeois society leads by natural 
 necessity to the downfall of the small industry, whose 
 foundation is formed by the worker's private owner- 
 ship of his means of production. It separates the 
 worker from his means of production and converts 
 him into a propertyless proletarian, while the means 
 of production become the monopoly of a relatively 
 
 tion was strictly Marxian. The critic of Marx may truly observe 
 that here is a doctrine which had no basis of fact whatsoever 
 and no shadow of justification. But the greater was the faith 
 with which this theory was received. The experiences of 1848 
 were fresh in men's memories, and the alternative suggested by 
 the outcome of the French disturbances was that either the 
 social revolution or the peasant was doomed. The socialists 
 chose the latter interpretation. Liebknecht frankly explains : 
 " We need the peasant and the small farmer if our struggle is not 
 to be a hopeless one. The fatal opposition between city and 
 country which has so far hindered and frustrated every move- 
 ment in the direction of freedom must cease. The warning 
 example of France is not lost upon us. On the 24th of February, 
 1848, Paris, the city, overthrew the throne of the corrupt citizen 
 king, and nine weeks later the country sent to Paris a reactionary 
 National Assembly which undermined the newly founded re- 
 public, and organized the insurrection of June, which was to 
 overthrow the social-democratic, industrial proletariat. Five and 
 a half months after the battle of June the country, by an over- 
 whelming majority, chose Louis Bonaparte as president of the 
 republic, and thereby prepared the way for the coup d'etat which 
 three years later put an end to the republic, and delivered 
 France over to the systematic plundering of the Bonapartist 
 robbers. The country is what the peasants make it. The 
 French peasantry created an empire through their blind fear 
 of proletarian socialism." Ibid., p. 103. 
 
CONCENTRATION OF PRODUCTION 6i 
 
 small number of capitalists and large landowners." 
 The capitalist and the large landowner are thus put 
 into one class, and small industry, whether industrial 
 or agricultural, into another class, predestined to be 
 destroyed. 
 
 Let us turn now to the leading contemporary ex- 
 ponent of orthodox Marxism, the official interpreter 
 of the German party program, Karl Kautsky. He 
 also admits that it is useless to try to make socialists 
 out of real peasants. " Peasants who feel that they 
 are not proletarians but true peasants, are not only 
 not to be won over to our cause but belong to our 
 most dangerous adversaries." ^^ Economic tendencies, 
 however, are wiping them out of existence. To prom- 
 ise any succor to the small-scale producer in industry 
 or in agriculture is to feed him on illusions. Efforts 
 to arrest the inevitable economic development will be 
 fruitless; if they produce any results at all, these re- 
 sults will be injurious to the classes in whose behalf 
 the efforts are made. Painful as the process may be, 
 the peasant is bound to sink into the proletariat.^^ 
 
 Naturally enough this theory has aroused little en- 
 
 '^^ Karl Kautsky, " Das Erfurter Programm und die Landagi- 
 tation," Die neue Zeit, 1895, I, p. 280. 
 
 ^■^ " It is not social democracy that is responsible for the 
 economic development. Without its assistance the capitalist class 
 sees to it that business on a small scale shall give way to 
 business on a large scale, nor has social democracy any reason 
 to oppose such a development. One who opposes the economic 
 development is not by any means a true representative of the 
 real interest of the small farmer and small producer of the city, 
 
MARXISM VERSUS SOCIALISM 
 
 thusiasm in the agricultural districts; and neither in 
 France nor in Germany have the socialists made any 
 headway among the peasants. Realization of this fact 
 has caused attempts to be made, both in France and in 
 Germany, to make the socialist program more at- 
 tractive to this class. The French Socialist Congress 
 which met at Nantes, in September, 1894, and the 
 German Social Democratic Convention (Parteitag) 
 held at Frankfort, in October of the same year, adopted 
 resolutions favoring protection of peasant interests. 
 At the Frankfort Convention Dr. Schonlank suggested 
 that a diiferent " lingo " be used in talking to the 
 peasant. Socialistic doctrine should be administered to 
 him in homeopathic doses, — otherwise, this speaker 
 feared, the medicine might kill the patient. ^^ 
 
 Such proposals and efforts are easily explicable 
 
 for all attempts in that direction will inevitably prove futile, and 
 in so far as they have any effect, will be injurious rather than 
 beneficial. To hold out to the artisans and peasants a mode 
 of action by which their small business can be made profitable 
 is in no way to intercede for their interests ; it is rather awaken- 
 ing in them illusions which can never be realized and which 
 divert them from the right way of best protecting their interests." 
 Karl Kautsky, Das Erfurter Programm in seinem grundsdts- 
 lichen Theil erldutert (2d ed., Stuttgart, 1892), p. 254. 
 
 ^^ " Though in this way we succeed in doing nothing more 
 than neutralizing the effects of this peasantry, we have done 
 enough. . . . 1848 must not repeat itself. When absolutism 
 had reached its fruition the reaction promptly made concessions 
 to the peasants and so won them over. We must be on our 
 guard lest the hobnailed shoes of the peasants' sons be raised 
 against us; we must neutralize and pacify them. (Applause.) With 
 the country people we must talk plainly in their own jargon. 
 We must at last urge a practical agitation, not merely a gray 
 
CONCENTRATION OF PRODUCTION 63 
 
 from the opportunist point of view of the popular agi- 
 tator, but they are not in harmony with the Marxian 
 doctrine. The contradiction between that doctrine and 
 the peasant program of the Frankfort and Nantes 
 Conventions was so glaring, that Kautsky expressed 
 the situation quite accurately by saying that, while the 
 socialists were still very far from capturing the peas- 
 ants, the peasants had captured the socialists. ^^ No 
 less distinct was Engels's protest. To a French so- 
 cialist, who was seeking his instruction and advice, he 
 explained that the progress of capitalism was destroy- 
 ing peasant property absolutely; that there was no 
 reason why the party should not endeavor to make 
 the proletarization of the peasantry less painful; but 
 that to go further and to try to save the peasantry 
 was to attempt the economically impossible, to sacrifice 
 the principle, to become reactionary.^^ Of the same 
 tenor was the last article of Engels in the Neue Zeit, 
 already quoted. Large-scale production, he said, 
 would run down the peasantry with their small farms 
 
 theory. . . . Our revolutionary politics cannot consist of high- 
 sounding phrases. . . . The socialistic medicine must be admin- 
 istered to the country people in homeopathic doses, otherwise it 
 will kill the peasants." Protokoll Uber die Verhandlungen des 
 Parteitages der sozialdemokratischen Partei Deutschlands, abge- 
 halten zu Frankfurt am Main, 1894, p. 141. 
 
 '*'* " There is only one clear cause for this severe political 
 relapse, and that is regard for the peasants. We have not as 
 yet captured them, but they have already captured us." Die 
 neue Zeit, 1895, I, p. 281. 
 
 "* This letter is reprinted from the Vorwdrts in the proceed- 
 ings of the Frankfort Convention, p. 151. 
 
64 MARXISM VERSUS SOCIALISM 
 
 just as a railroad train would run down a wheel- 
 barrow.^^ How strongly Engels felt on the subject 
 is further shown by some of his recently published 
 letters to the American socialist, Sorge. In one of 
 these he characterizes the effort to win the peasants 
 as a "confidence game" {Bauernfdngerei), and de- 
 clares that any attempt to protect them against taxes, 
 usury and the great landholding interests is in the 
 first place imbecile and secondly impossible. ^^ His 
 feelings were bound to be shared by every one who 
 understood the Marxian doctrine and was a " scien- 
 tific " socialist. Some of the leading German social- 
 ists, like Schippel, did not hesitate to designate the 
 socialist agrarian program as a bit of political charla- 
 tanism.^^ And the Frankfort Convention of 1895 dis- 
 
 ®^ Engels, ** Die Bauernfrage in Frankreich und Deutschland," 
 Die neue Zeit, 1895, I, p. 303. 
 
 ^^ " On the continent the desire for further success grows with 
 success, and the ensnaring of the peasantry in the literal sense 
 is becoming the fashion. First the French in Nantes announce 
 through Lafargue not only (as I have written you) that we are 
 not called upon by our own direct interference to hasten the 
 ruin of the small peasantry to which capitalism is committed, 
 but, secondly, that we ought directly to protect the peasant 
 against the taxes, usury, and the large landholding interests. 
 That, however, we cannot undertake, for in the first place it is 
 stupid and in the second place it is impossible." Briefe und 
 Aussiige aus Brief en von Johann Philipp Becker, Josef Dietzgen, 
 Friedrich Engels, Karl Marx u. A. an F. A. Sorge und Andere 
 (Stuttgart, 1906), p. 415. 
 
 '* " The agrarian program which suddenly endeavors to meet 
 the peasant movement is a piece of this political charlatanism." 
 Protokoll iiber die Verhandlungen des Parteitages su Breslau, 
 189s, p. no. 
 
CONCENTRATION OF PRODUCTION 65 
 
 avowed most emphatically the agrarian program, be- 
 cause it promised to the peasantry the improvement of 
 their conditions, which meant the strengthening of 
 their property rights.^* 
 
 The Convention of Frankfort adjourned; the Ger- 
 man Social Democracy rested upon its reaffirmation 
 of the Marxian doctrines, including the inevitable 
 doom of the peasantry; but, by one of fate's little 
 ironies, a census (the first since 1882) had been taken 
 at the beginning of that very year, and while the dis- 
 cussions in Frankfort were in progress the statistical 
 results of this census were being computed. To the 
 Marxian theorists the results were staggering. The 
 small agricultural landholder was gaining ground. 
 The doctrine of concentration of agriculture was dis- 
 proved. The census showed that each hundred hec- 
 tares of land under cultivation was divided among 
 the following groups in the following proportions : 
 
 Size of Holding 
 
 1882 
 
 1895 
 
 Gain or Loss 
 
 Below 2 hectares 
 
 5.73 
 
 5.56 
 
 — 0.17 
 
 2 -5 
 
 
 10.01 
 
 10. 1 1 
 
 -fo.io I 1.26 
 +1.16 \ 
 
 5 -20 
 
 
 28.74 
 
 29.90 
 
 20 -so 
 
 
 22.52 
 
 21.87 
 
 -0.65 1 
 
 50 -100 
 
 
 8.57 
 
 8.48 
 
 —0.09 1 
 
 100 -200 
 
 
 4-77 
 
 4.75 
 
 — 0.02 > — ^'33 
 —0.45 
 
 200 -500 
 
 
 9.92 
 
 9-47 
 
 500 -1,000 
 
 
 7-52 
 
 7.40 
 
 —0.12 J 
 
 Over 1,000 " 
 
 2.2.2. 
 
 2.46 
 
 +0.24 
 
 '* " The agrarian program submitted to the agrarian com- 
 mission should be rejected, for it places before the peasantry 
 
66 MARXISM VERSUS SOCIALISM 
 
 In words instead of figures, this table means that the 
 middle-sized farms (20 hectares = nearly 50 acres) 
 which can be taken care of by a peasant family with- 
 out the help of wage labor are on the increase. ^^ These 
 data have impressed all unprejudiced economists as 
 showing that the farmer who depends upon his 
 family has a distinct advantage over the landowner 
 who has to depend upon hired farmhands. The 
 farms ranging from two to twenty hectares have 
 gained in thirteen years not less than 659,259 
 hectares, while those ranging from twenty to one 
 thousand hectares have actually lost 86,809 hec- 
 tares. 
 
 The statistical data of other countries yield more or 
 less the same results. No theory of concentration of 
 agriculture or of the doom of the small farmer can be 
 based, for example, on the figures given by our United 
 States census reports : ^^ 
 
 the prospect of an improvement in their position, as well as 
 the strengthening of their private property rights." Ibid., p. 
 204. 
 
 ^'^ Interesting in this respect are the conclusions drawn from 
 the data of the German census by Professor Rauchberg in his 
 article on " Entwicklungstendenzen der deutschen Volkswirt- 
 schaft " in Archiv fur sosiale Gesetsgebimg und Statistik (1901), 
 XII, pp. 339 et seq. For a short digest of the census material re- 
 lating to agriculture, see Dr. G. von Mayr's Allgemeines statis- 
 tisches Archiv (1898), V, pp. 658-675. 
 
 ^^ Abstract of the Twelfth Census of the United States, 1900 
 (Washington, 1902), p. 217. 
 
CONCENTRATION OF PRODUCTION 67 
 
 
 
 "- 
 
 Average Number 
 
 Year 
 
 Number of 
 
 Number of 
 
 OF ACRES TO 
 
 
 Farms 
 
 ACRES 
 
 A Farm 
 
 1900 
 
 5,737,372 
 
 838,591,774 
 
 146.2 
 
 1890 
 
 4,564,641 
 
 623,218,619 
 
 136.5 
 
 1880 
 
 4,008,907 
 
 536,081,835 
 
 1337 
 
 1870 
 
 2,659,985 
 
 407,735,041 
 
 I53.3 
 
 i860 
 
 2,044,077 
 
 407,212,538 
 
 199.2 
 
 1850 
 
 1,449,073 
 
 293,560,614 
 
 202.6 
 
 In America the average acreage is still too large for 
 intensive cultivation, and with increasing land values, 
 we may confidently expect a very considerable decen- 
 tralization.^^ For Holland, Bernstein ^^ quotes the fol- 
 lowing data : 
 
 Size of Farms 
 
 Number of Farms 
 
 Increase or 
 Decrease 
 
 Percentage 
 
 (IN Hectares) 
 
 1884 
 
 1893 
 
 I -5 
 5 -10 
 10-50 
 Over 50 
 
 66,842 
 31,552 
 48,278 
 
 3,554 
 
 77,7^7 
 
 94,199 
 
 51,940 
 
 3,510 
 
 + 10,925 
 +62,647 
 + 3,662 
 — 44 
 
 + 16 
 +198.5 
 + 7.6 
 — 1.2 
 
 In Friedrich Hertz's instructive book a large amount 
 of statistical material is to be found, all showing the 
 
 '^ " Land values tend to rise with growing prosperity. A given 
 capital thus represents a constantly diminishing acreage, and it 
 becomes increasingly profitable to apply more labor and minor 
 machines to small areas rather than large capital and vast 
 machines to great areas. That is, we have a tendency to more 
 intensive rather than large-scale farming." Seligman, Principles 
 of Economics, p. 336. 
 
 ^® Bernstein, V oraussetsungen des Sozialismus, p. 62. 
 
68 MARXISM VERSUS SOCIALISM 
 
 non-existence of any tendency towards centralization 
 of agriculture."'^^ 
 
 Eduard David, the well-known socialist leader, who 
 is unquestionably the most learned socialist authority 
 on all agricultural questions, has come to the conclu- 
 sion that the peasants are getting the better of the 
 large landowners *" and that their standard of life is 
 rising rapidly, the agricultural life of to-day being a 
 life of great comfort as compared with that of the 
 preceding generation. ^^ David, of course, is not an 
 orthodox Marxian, but a " revisionist." 
 
 We see accordingly, that while concentration in in- 
 dustry and commerce is far from complete centraliza- 
 tion, no tendency towards concentration exists in agri- 
 culture. 
 
 Marxian socialism, as has been sufficiently shown, 
 is not the scheme of would-be world-reformers. 
 Socialism is to be the inevitable result of certain con- 
 ditions and tendencies. It is to be the heir of capital- 
 ism. It will step into its heritage when capitalism has 
 developed a centralized and socialized mode of pro- 
 duction and has created a thoroughly proletarized, 
 class-conscious and revolutionary population. For 
 this reason the figures and facts above presented are 
 
 ^° F. O. Hertz, Die agrarischen Fragen im Verhdltniss sum 
 SoziaUsmns (Wien, 1899). See also Shippel's estimate of Hertz's 
 book, *' Hertz gegen Kaiitsky," Sosialistische Monatshefte, 1899, 
 pp. 507-510. 
 
 *" David, Sodalismus mid Landwirtschaft (Berlin, 1903), I, 
 pp. 50, 51. " David, op. cit., I, p. 36. 
 
CONCENTRATION OF PRODUCTION 69 
 
 of vital significance to scientific socialism. If certain 
 conditions and tendencies make socialism inevitable, 
 do not the absence of these conditions and the exist- 
 ence of contrary tendencies make socialism impossi- 
 ble? True to the letter and true to the spirit of the 
 Marxian doctrine was Kautsky when he wrote : " So 
 long as the artisan feels himself to be an artisan, the 
 peasant a peasant, the small trader a small trader, so 
 long as they possess a strong class-consciousness, they 
 must, no matter how ill they fare, steadfastly adhere 
 to private ownership of the means of production and 
 remain inaccessible to socialism." *^ 
 
 *^ Karl Kautsky, Das Erfurter Programm in seinem grund- 
 sdtdichen Theil erldutert (2d ed., Stuttgart, 1892), p. 180. 
 
CHAPTER V 
 
 CONCERNING THE DISAPPEARANCE OF 
 THE MIDDLE CLASS 
 
 The centralization of production in industry and 
 agriculture has, according to Marx, a political side : it 
 proletarizes the masses. The economic development, 
 therefore, not only paves the wslj technically for so- 
 cialist production but also produces the political force 
 that is to put an end to capitalism. Or, as Marx 
 expresses himself : " Not only has the bourgeoisie 
 forged the v^eapons that bring death to itself, it has 
 also called into existence the men who are to wield 
 those weapons, the modern working class, the prolcr- 
 tarians." ^ 
 
 We have seen in the preceding pages that so far 
 as agriculture is concerned there is, if anything, a 
 slight decentralization of production. Consequently 
 the proletarization of the farming class may be dis- 
 missed from consideration. In industry the situation 
 is different. Here concentration has taken place, and 
 it is claimed that the masses have been correspondingly 
 or more than correspondingly proletarized. Let us 
 try to find out, therefore, exactly what is meant by 
 " proletariat " and " proletarization of the masses." 
 
 ^Communist Manifesto, p. 22. 
 70 
 
DISAPPEARANCE OF THE MIDDLE CLASS 71 
 
 Marx tells us that '' in proportion as the bourgeoisie, 
 i.e., capital, is developed, in the same proportion is the 
 proletariat, the modern working class, developed — a 
 class of laborers who live only so long as they find 
 work, and who find work only so long as their labor 
 increases capital." ^ The official interpreter of present- 
 day orthodox Marxism, Karl Kautsky, explains to us 
 wherein the factory hands of to-day differ not only 
 from the artisan and farmer of the past, who owned 
 the means of production and were therefore inde- 
 pendent, but also from the journeymen of the pre-cap- 
 italistic epoch. The latter, he says, '' belonged to the 
 family of the master, with the expectation of becoming 
 some day masters themselves. The proletarian stands 
 entirely on his own feet and is doomed to remain for- 
 ever a proletarian." ^ 
 
 This Marxian conception of the proletarian as a 
 modern product involves an idealization of the past. 
 As a matter of fact, the little we actually know about 
 the conditions which prevailed in mediaeval industry 
 gives us no intimation of a golden age, but rather a 
 record of woe and distress. In making this statement 
 I do not refer simply to the period of the so-called 
 decay of the guild system, when the masters, as we 
 are told, were primarily bent on exploiting the journey- 
 men and keeping them out of the guilds; on the con- 
 trary, I include the entire epoch in which the guilds 
 flourished. I see no necessity for differentiating this 
 
 ^ Ibid. ^ Kautsky, Das Erfurter Programm, pp. ZZ, 34- 
 
'J2 MARXISM VERSUS SOCIALISM 
 
 epoch into historical periods, because I can find no 
 fundamental points of difference. We all know that 
 as early as the thirteenth and fourteenth centuries 
 there were bitter struggles between the journeymen 
 and the masters. The master blacksmiths of Frank- 
 fort, first organized as a guild in 1377, entered in 1383 
 into an ironclad agreement with the guilds of Worms, 
 Speyer, Mainz, Bingen and four or five other German 
 cities to keep their journeymen under control and in 
 submission.* The same situation existed in other parts 
 of Germany and in other European countries. In 
 Danzig, for instance, the beginning of the struggle 
 between masters and journeymen followed immedi- 
 ately upon the organization of the guilds. In 1385 the 
 journeymen were striking and the city authorities were 
 threatening to cut off their ears.^ In France, the 
 " family relations " of masters and journeymen were 
 characterized by strikes and riots, leading to blood- 
 shed.^ In Rheims, as early as 1292, the masters were 
 
 * Cf. ScHANZ, Gesellenverbdnde, p. 42. 
 
 " KuLiSHER, Evolucia prihili s kapitala (1906), I, pp. 419, 420; 
 also Schonlank's article " Gesellenverbande " in the fourth vol- 
 ume of Conrad's Handworterbuch fur die Staatswissenschaften. 
 
 ' " The history of the towns of Brie and Champagne is full of 
 internal crises which remind one of the strikes and riots of 
 modern times. In 1280 the journeymen drapers of Provins, 
 furious at the increase in their hours of work, rose in revolt and 
 murdered the mayor. At Chalons what occurred was not of 
 such a tragic nature; however, the king had to intervene with 
 letters patent to compel the workmen to work morning and 
 afternoon." Etienne Martin-Saint-Leon, Histoire des cor- 
 porations de metiers (Paris, 1897), p. 280. 
 
DISAPPEARANCE OF THE MIDDLE CLASS 73 
 
 enjoined from combining against their journeymen, 
 and the latter from conspiring against their masters."^ 
 Nor does England show any lack of evidence that its 
 journeymen regarded themselves as a separate class, 
 antagonistic to the masters. As early as 1350 and 
 1362 London ordinances were adopted to put an end 
 to journeymen's strikes.^ Not only do we find in 
 fourteenth-century England a special journeyman 
 class, composed of workmen who have little hope of 
 ever becoming masters, who are confronted with pro- 
 hibitive entrance fees for admission into the mystery, 
 but in some trades the masters have gone so far as 
 to exact an oath from apprentices that they will not 
 set up in business for themselves, even if they can, 
 unless their masters shall give thereto their special 
 consent. We see the legislature and town council try- 
 ing to intervene in favor of the journeymen. As Pro- 
 
 ' Ibid. 
 
 ^ " Whereas, heretofore, if there was any dispute between a 
 master in the trade and his man (vadlett), such man has been 
 wont to go to all the men within the city of the same trade, 
 and then, by covin and conspiracy between them made, they 
 would order that no one among them should work or serve his 
 own master, until the said master and his servant or man had 
 come to an agreement; by reason whereof the masters in the 
 said trade have been in great trouble, and the people left un- 
 served; it is ordained, that from henceforth, if there be any 
 dispute moved between any master and his man in the trade, 
 such dispute shall be settled by the wardens of the trade." W. J. 
 Ashley, Introduction to English Economic History and Theory 
 (New York, 1893), H, P- 104. 
 
74 MARXISM VERSUS SOCIALISM 
 
 fessor Ashley justly observes, " the evil must have been 
 unendurable before the town council would interfere ; 
 for in most places the mysteries were so powerful that 
 the municipal authorities were only too ready to sup- 
 port the master-craftsmen.® 
 
 Marx was not unaware of the difference between 
 mediaeval masters and journeymen when he was de- 
 veloping, in the opening lines of his Manifesto, his 
 doctrine of class-struggle; but whenever he discussed 
 the city proletariat as a product of modern capitalism, 
 totally and fundamentally differing from any working 
 class in the past, he ignored the extent to which those 
 journeymen were a class. 
 
 In some degree, however, Marx's failure to distin- 
 guish between masters and journeymen in the Middle 
 Ages is justifiable. The difference in economic well- 
 being between the so-called independent master, the 
 possessor of the so-called " means of production," and 
 his dependent hired men was slight. We have the 
 English laws and regulations concerning wages from 
 25 Edward III (1350). These regulations fixed the 
 maximum wage for laborers and artificers. The em- 
 ployer who should pay, as well as the artisan who 
 should demand and receive, higher wages than those 
 enacted, were to be fined and severely punished. The 
 schedules of wages were revised and changed by suc- 
 cessive legislatures, and they therefore afford an in- 
 
 ^ Ibid., p. 105. 
 
DISAPPEARANCE OF THE MIDDLE CLASS 75 
 
 sight into the actual economic conditions and standard 
 of Hving of those independent producers of the Middle 
 Ages who appeal so strongly to our imagination. From 
 the Statute of Laborers we learn that the artisans were 
 to be sworn twice a year to observe the regulations. 
 Their wages were settled in 1350 in the following 
 proportion : ^^ 
 
 From Easter to Michaelmas, without Diet 
 
 A master carpenter by the day 3c? 
 
 A master free mason by the day ^d 
 
 Other carpenters by the day 2d 
 
 Other masons by the day ^d 
 
 Their servants by the day i^^rf 
 
 Tilers by the day 3^ 
 
 Their knaves by the day i^^f/ 
 
 Other coverers of fern and straw by the day 3c? 
 
 Their knaves by the day i^rf 
 
 Plasterers and other workers of mud- walls by the day. 3c? 
 Their knaves by the day lYzd 
 
 The purchasing power of these wages is indicated by 
 the allowance made for food, i.e., by the difference 
 in the wages of artisans with and without diet. For 
 the following century, when wages were somewhat 
 higher, we have wage lists showing this difference, and 
 the cost of food per day for one man or woman is 
 taken to be from three half-pennies to two pence, 
 
 *" Cf. Sir Frederick Morton Eden, The State of the Poor, or 
 an History of the Laboring Classes in England (London, 1797), 
 I> P- 2tZ' " In 1360 the Statute of Laborers was confirmed by Par- 
 liament, and the observance of it enforced under penalty of 
 imprisonment for fifteen days and burning in the forehead with 
 an iron in the form of the letter F." Ibid., p. 36. 
 
76 MARXISM VERSUS SOCIALISM 
 
 usually two pence. Here is the wage list of the year 
 1496, with and without diet : ^^ 
 
 with diet 4d with diet sd 
 without diet 6d without diet sd 
 
 From Easter From Michaelmas 
 to Michaelmas to Easter 
 
 A free mason 
 A master carpenter 
 A rough mason 
 A bricklayer 
 
 A master tiler }- 
 
 A plumber 
 A glazier 
 A carver 
 A joiner 
 Other laborers (except in } with diet 2d with diet i^rf 
 
 harvest) ' without diet 4d without diet 3d 
 
 Master carpenters and ma- ^ ^-^^ ^.^^ ^^ 
 
 sons having under them Y ^-^^^^^ ^-^^ ^^ 
 
 six men ' 
 
 In Harvest 
 
 Every mower by the day with diet 4d, without 6d 
 A reaper " sd, " sd 
 
 A carter " 3d, " 5d 
 
 A woman and other laborers " 2j^c/, " 4^^d 
 
 The master, we observe, when employed, is allowed 
 three times the cost of his own food for the feeding 
 of himself, wife and family, housing, clothing and 
 other necessities — a standard of life to which the 
 proletarian of to-day has no cause to look back with 
 envy or regret. 
 
 The wages in other trades are similar. 
 
 "/&«U, p. 75. 
 
DISAPPEARANCE OF THE MIDDLE CLASS ^7 
 
 With meat Without meat 
 
 and drink and drink 
 A master ship-carpenter having \ 
 
 charge of the work and having >• Sd 7^ 
 
 men under him / 
 
 Another ship-carpenter called ^l ^d 6d 
 
 hewer ' 
 
 An able clincher 3^ 5^ 
 
 An holder 3^ 5^ 
 
 A master caulker 4^ ^^ 
 
 Another mean caulker 3^ 5« 
 
 A caulker laboring by the tide, for ) ^ 
 
 every tide ' 
 
 From Michaelmas to Candlemas the wages of these 
 artificers are to be id sl day less. 
 
 Wages gradually increased, but it is doubtful if 
 they increased more rapidly than the cost of living. 
 Sir George Nicholls gives us the following table : 
 
 1495 1593 i6io 
 
 . .- -.1. ^ J- X i in summer 6d Sd lod 
 
 Artificers without diet "J • • . ^j «j qj 
 
 ( in winter 5a 7" o" 
 
 T t- -^u 4. ^- 4. i in summer 4d sd yd 
 
 Laborers without diet 1 • • . j .j ^^ 
 
 ( in winter 3a 4a oa 
 
 His comment upon these figures is : '' On the whole, 
 then, it may, I think, be assumed that at the end of 
 Elizabeth's reign, notwithstanding the increase which 
 had taken place in the price of all commodities, the 
 great mass of the English people were able, by a due 
 exercise of industry, to obtain as large an amount of 
 subsistence and physical enjoyment as at any former 
 period." '^ 
 
 '' Sir George Nicholls, A History of the English Poor Law 
 in connection with the State of the Country and the Condition 
 
78 MARXISM VERSUS SOCIALISM 
 
 The alleged welfare of the laboring class of the past 
 as compared with our proletariat of to-day may there- 
 fore be seriously questioned. But in the course of 
 centuries certain relations and regulations had worked 
 themselves out, which insured at least the bare exist- 
 ence of the master and of the laboring man. The 
 industrial revolution brushed aside all the old regula- 
 tions, substituting for them " industrial liberty." The 
 modern proletariat is a legitimate child of this indus- 
 trial liberty, which for a few decades seriously ag- 
 gravated the conditions of the laboring population. 
 The industrial transformation, the centralization of 
 scattered industry, and the resultant concentration of 
 workingmen in large cities tended to consolidate this 
 laboring population into a class and added greatly to 
 its political significance. 
 
 The dynamic conception of society and its structure 
 — the conviction that no type of social order is per- 
 manent and immutable, that the social order is subject 
 to change and rational improvement — this conception, 
 foreign to the modern world before the eighteenth 
 century and the French Revolution, opened new vistas 
 and possibilities to the laboring men as well as to their 
 masters. They were allies without distinction in their 
 struggle, in the name of democracy, against the old 
 feudal order. But very soon the hopes and prophecies 
 of democracy were differentiated. The interpretations 
 
 of the People (new edition, New York, 1898), vol. i, pp. 204-225. 
 See also pp. 79-81, 100, loi, 135, 155, 269-271 and 356. 
 
DISAPPEARANCE OF THE MIDDLE CLASS 79 
 
 put upon the word varied so greatly that those differ- 
 ing in its interpretation began to regard each other 
 as belonging to a dangerous and undesirable class. Is 
 it not natural that men who are tied during the long 
 day to a machine in the factory, and who sleep in 
 dingy tenements, should look forward to something 
 better; that men who have so little else should have 
 a wealth of hope? 
 
 In their visions the laboring masses of to-day 
 certainly differ from the plehs mis era of past cen- 
 turies. Their aspirations stamp them as a modern 
 product. They hope for industrial democracy, and 
 this hope is based on a reasonable expectation that the 
 political efforts of enfranchised citizens will result in 
 ultimate success. The industrial proletariat of to-day 
 is therefore not so much a new economic entity as a 
 new politico-psychological element in our body pol- 
 itic.^^ If the sole characteristic of an industrial pro- 
 
 ^^ It is almost incredible that a man like Sombart, who made 
 a reputation as an exponent of the proletarian movement and 
 its theory, should in his recent booklet give the following char- 
 acterization of the proletarian : " Der Proletarier weiss ebenso 
 wenig von einer Dorf- und Geschlechtergemeinschaft wie von 
 einer Familiengemeinschaft, ebenso wenig von einer Berufs- 
 gemeinschaft wie von einer Arbeitsgemeinschaft. Er ist verein- 
 zelt, vereinsamt, mit seinen Genossen nicht enger verbunden als 
 das einzelne Sandkorn mit dem andern im grossen Sandhaufen. 
 Wie ein vom Baum gewehtes Blatt das der Wind iiber die Fluren 
 treibt." Werner Sombart, Das Proletariat: Bilder und Studien, 
 p. 14. If this were true, there would be no proletarian move- 
 ment. In an earlier book Sombart gave us a more sensible 
 description of the psychological makeup of the proletariat: "In 
 
8o MARXISM VERSUS SOCIALISM 
 
 letariat were poverty, there w uld be nothing new in 
 the proletariat of to-day. The poverty in merry Eng- 
 land was appalling, but England was merry; we are 
 told that in one reign 70,000 paupers and vagabonds 
 were executed, but we are not told that it made 
 any political impression. It is not uninteresting 
 to note that two of the ablest Russian states- 
 men of the time of Nicholas I, Count Kisseleff and 
 Count Cancrin, argued in favor of agricultural pov- 
 erty as compared with industrial wealth, because of 
 fear of the political significance of an industrial pro- 
 letariat.^* Recent history has proved that, from their 
 point of view, they were right. Not the starving 
 
 the tenement houses, the huge manufactories, the public houses 
 for meetings and for pleasures, the individual proletarian, as if 
 forsaken by God and man, finds himself with his companions 
 in misery again together, as members of a new and gigantic 
 organism. Here are new societies forming, and the new com- 
 munities bear the communistic stamp, because of modern methods 
 of work. And they develop, grow, establish themselves in the 
 mass of men, in proportion as the charm of separate existence 
 fades from the individual ; the more dreary the attic room in the 
 suburb of the city, the more attractive is the new social center 
 in which the outcast finds himself again treated as a man. The 
 individual disappears, the companion emerges. A uniform class 
 consciousness matures itself, also the habit of communal work 
 and pleasure. So much for the psychology of the proletariat." 
 SoMBART, Socialism and the Social Movement of the Nineteenth 
 Century, translated by Anson P. Atterbury (Chicago, 1902), pp. 
 
 14, 15. 
 
 ^* [Cancrin], Die Oekonomie der menschlichen Gesellschaften 
 und das F.inanzwesen, von einem ehemaligen Finanzminister 
 (Stuttgart, 1845), pp. 59, 60. Cf. Zablocki-Dessyatkovski, 
 Count Kisseleff and His Times (St. Petersburg, 1882), II, p. 199. 
 
DISAPPEARANCE OF THE MIDDLE CLASS 8i 
 
 millions of peasantry %ut the comparatively small in- 
 dustrial proletariat has precipitated and carried on the 
 Russian revolution. 
 
 In gathering scattered production modern industry 
 has gathered and united the scattered workers; and 
 in so far as these men work and live under the same 
 conditions and have the same interests they are bound 
 to develop a comradeship and fellow-feeling which 
 could not flourish in the same degree in the past. In 
 this sense it is quite true that with the advent of 
 modern industry a new economic and political element, 
 the industrial proletariat, has made its appearance. 
 The significance of the proletariat as a class will be 
 discussed later. For the moment we are occupied with 
 the Marxian view of the " proletarization of the 
 masses." 
 
 In 1847, when German industry was in its begin- 
 nings, Marx informed us, in his Manifesto, that the 
 proletariat class formed the great majority of the peo- 
 ple. " All previous historical movements," he wrote, 
 " were movements of minorities, or in the interest of 
 minorities. The proletarian movement is the self- 
 conscious, independent movement of the immense ma- 
 jority, in the interest of the immense majority." ^^ 
 What is meant here by the '' proletariat " ? Sim- 
 ply poor people? Not to-day only, but throughout 
 the historic period of our society, the poor people have 
 constituted the overwhelming majority. But that 
 *" Communist Manifesto^ p, 30. 
 
82 MARXISM VERSUS SOCIALISM 
 
 could scarcely encourage Marx. What reason had he 
 to suppose that in the future this majority would feel 
 and act otherwise than it had felt and acted in the 
 past?" 
 
 Marx fully realized that poverty as such creates no 
 radical or revolutionary class. The defeat of the so- 
 cialist projects of the Paris proletariat and the election 
 of a Louis Bonaparte were ascribed by Marx himself 
 to the poor French peasantry." The Liimpenprole- 
 tariat, also the pauper and dependent class, Marx him- 
 self excluded from the proletarian army, and for good 
 reasons : *' The social scum, that passively rotting mass 
 thrown off by the lowest layers of an old society, may, 
 here and there, be swept into the movement by a pro- 
 letarian revolution; its conditions of life, however, pre- 
 pare it far more for the part of a bribed tool of re- 
 
 ^®That the majority is but a beast of burden in spite of its 
 apparent power, Marx's seventeenth-century forerunner, Cam- 
 panella, had said in a sonnet worth quoting : " The people is a 
 fat and motley beast, ignorant of its own prowess and hence 
 enduring burdens, lash and cudgel. Driven it is by a feeble 
 child, whom it could shake off in an instant. But it fears that 
 child, and so it serves all its whims and fancies, never realizing 
 how much it itself is feared by that very child. . . . Marvelous 
 thing! They hang themselves with their own hands and send 
 themselves to jail and bring upon themselves war and death 
 for a single farthing, paid to them out of the many that they 
 themselves have given to the king. Everything between heaven 
 and earth belongs to them, but they do not know it, and should 
 any one tell them that, they would knock that man down and 
 kill him." Tommaso Campanella, Opere, scelte da Alessandro 
 Ancona (Torino, 1854), p. 79. 
 
 " Marx, The Eighteenth Brumaire of Louis Bonaparte, trans- 
 lated by Daniel De Leon (New York, 1898), p. 71- 
 
DISAPPEARANCE OF TPIE MIDDLE CLASS 83 
 
 actionary intrigue." ^^ It is obvious, therefore, that 
 Marx, in talking about the proletariat, has in mind 
 men and women employed in capitalistic industry. 
 
 Now in 1895, nearly half a century after the Mani- 
 festo was published, the number of men and women 
 employed in all capitalistic enterprises, in industry, 
 commerce and transportation, was, according to Som- 
 bart's calculation, based on the German census, 
 3,921,571. Deducting from this number the employees 
 of an obviously non-proletarian grade, managers, su- 
 perintendents, higher employees, officials, etc., he esti- 
 mates that the rest number about three and one-half 
 millions, or about thirteen to fourteen per cent of the 
 population. ^^ Accordingly, even now, a movement 
 that should include the whole of the industrial pro- 
 letariat would still be far from being a movement of 
 the " immense majority." 
 
 But we are told that the masses are rapidly being 
 proletarized, that the middle class is rapidly sinking 
 in the proletariat. " As we have already seen," so 
 ran the statement of the Manifesto, " entire sections 
 of the ruling classes are, by the advance of industry, 
 precipitated into the proletariat, or are at least threat- 
 ened in their conditions of existence. These also 
 supply the proletariat with fresh elements of enlighten- 
 ment and progress." ^^ What makes socialism inevita- 
 
 ^^ The Communist Manifesto, p. 29. 
 *® SoMBART, Das Proletariat, p. 5. 
 ^° The Communist Manifesto, p. 28. 
 
84 MARXISM VERSUS SOCIALISM 
 
 ble, Engels tells us, is on the one hand the concentra- 
 tion of capital in the possession of a few and on the 
 other hand the concentration of the propertyless 
 masses in the large cities. ^^ Here is the core of Marx- 
 ian socialism. Not only is the middle class gradually 
 being wiped out, but the lesser capitalists are gradu- 
 ally being reduced to proletarian existences, swallowed 
 up by the greater capitalists. Thus the capitalistic 
 band becomes smaller and smaller, while the army of 
 the proletariat grows by thousands and by millions. 
 And while capital is thus being concentrated in few 
 hands, industry becomes more and more socialized on 
 a national, even international basis. A socialized mode 
 of production is then already in existence, and all that 
 remains for the complete establishment of a socialist 
 commonwealth is the expropriation of the few capital- 
 ists by the mass of the people. Socialized production 
 is transformed by a simple political act into socialized 
 property. But, on so important a point, let Marx 
 speak for himself : '' As soon as this process of trans- 
 formation has sufficiently decomposed the old society 
 from top to bottom, as soon as the laborers are turned 
 into proletarians and their means of labor into capital, 
 as soon as the capitalist mode of production stands on 
 its own feet, then the further socialization of labor 
 and further transformation of the land and other 
 means of production into socially exploited and there- 
 
 ^* Engels, Landmarks of Scientific Socialism (Anti-Duehring'), 
 translated by A. Lewis (Chicago, 1907), p. 179. 
 
DISAPPEARANCE OF THE MIDDLE CLASS 85 
 
 fore common means of production, as well as the 
 further expropriation of private proprietors, takes a 
 new form. That which is now to he expropriated is 
 no longer the laborer working for himself, hut the 
 capitalist exploiting many laborers. This expropria- 
 tion is accomplished by the action of the immanent 
 laws of capitalistic production itself, by the centraliza- 
 tion of capital. One capitalist always kills many.^^ 
 Hand in hand with this centralization, or this expro- 
 priation of many capitalists by few, develop, on an 
 ever-extending scale, the cooperative form of the 
 labor-process, the conscious technical application of 
 science, the methodical cultivation of the soil, the 
 transformation of the instruments of labor into in- 
 struments of labor only usable in common, the econ- 
 omizing of all means of production by their use as 
 the means of production of combined, socialized labor, 
 the entanglement of all peoples in the net of the world- 
 market, and with this, the international character of 
 the capitalist regime. Along with the constantly dimin^ 
 ishing number of the magnates of capital/^ who usurp 
 and monopolize all advantages of this process of trans- 
 formation, grows the mass of misery, oppression, slav- 
 ery, degradation, exploitation ; but with this too grows 
 the revolt of the working class, a class always increas- 
 ing in numbers and disciplined, united, organized by 
 the very mechanism of the process of capitalist pro- 
 duction itself. The monopoly of capital becomes a 
 
 ^^ Italics are mine. ^^ Italics mine. 
 
86 MARXISM VERSUS SOCIALISM 
 
 fetter upon the mode of production which has sprung 
 up and flourished along with and under it. Central- 
 ization of the means of production and socialization 
 of labor at last reach a point where they become incom- 
 patible with their capitalist integument. This integu- 
 ment is burst asunder. The knell of capitalistic private 
 property sounds. The expropriators are expropriated. 
 . . . The transformation of scattered private prop- 
 erty, arising from individual labor, into capitalistic 
 private property is, naturally, a process incomparably 
 more protracted, violent and difficult than the trans- 
 formation of capitalistic private property, already 
 practically resting on socialized production, into so- 
 cialized property. In the former case, we had the 
 expropriation of the mass of the people by a few 
 usurpers; in the latter, we have the expropriation of 
 a few usurpers by the mass of the people." ^* 
 
 If Marx has correctly formulated the economic 
 tendency, if capital tends invariably towards concen- 
 tration in the hands of a narrowing circle of magnates 
 while the rest of the population is rapidly being pro- 
 letarized, it is really marvelous that a social revolution 
 has not yet overtaken this Jniciuitous system, to which 
 practically the whole of the people must be opposed. 
 If the capitalist class, which alone has any real in- 
 terest in the protection of property, is rapidly dimin- 
 
 ^* Marx, Capital (English translation, 4th ed., London, 1891), 
 I, pp. 788, 789. 
 
DISAPPEARANCE OF THE MIDDLE CLASS 87 
 
 ishing; if the future has nothing in store for the self- 
 respecting middle class but misery and degradation; 
 then indeed it takes no prophet to foretell that the title 
 of the few magnates to their wealth is not worth the 
 paper on which it is written. Then indeed are the 
 days of the present economic organization numbered; 
 and Bebel was quite right when, in addressing his 
 party convention in 1891, he declared: "Yes, I am 
 convinced that the realization of our ultimate aims is 
 so near that there are but few in this hall who will not 
 live to see that day." '^ 
 
 Let us, however, test the abstract proposition by the 
 facts. Let us take, for example, the Prussian income 
 statistics. The Prussian statistics, as we all know, are 
 relatively the most accurate in existence.^^ In Prussia 
 we have data of a graduated income tax for over half 
 a century, coinciding with the period of the most rapid 
 industrial transformation. These data, it is obvious, 
 are especially valuable for our purpose. 
 
 ^^ Protokoll iiber die Verhandlungen des Parteitages der so- 
 cialdemokratischen Partei Deutschlands, abgehalten zu Erfurt, 
 1891, p. 172. 
 
 ''* All the figures given below are taken from the two mono- 
 graphs of Adolph Wagner, published in the Zeitschrift des 
 Koniglich Preussischen Sfatistischen Bureau (Berlin, 1904), vol. 
 xliv, pp. 41-122; and 229-267: "Zur Methodik der Statistik des 
 Volkseinkommens und Volksvermogens, mit besonderer Beriick- 
 sichtigung der Steuerstatistik " and " Weitere statistische Unter- 
 suchungen iiber die Verteilung des Volkseinkommens in Preussen 
 auf Grund der neuern Einkommensteuerstatistik (1892-1902)." 
 
88 MARXISM VERSUS SOCIALISM 
 
 From the point of view of income the German pop- 
 ulation is usually divided into three groups: a lower 
 class, a middle class and an upper class. Each of these 
 three classes is subdivided into three strata: a lower, 
 a middle and an upper. They represent the following 
 individual yearly incomes : 
 
 
 
 f lower stratum up to 
 
 500 marks.'' 
 
 I. 
 
 Lower class. 
 
 •j middle 
 
 (( 
 
 500 to 
 
 900 
 
 (( 
 
 
 
 ( upper 
 
 « 
 
 900 to 
 
 2,100 
 
 « 
 
 
 
 { lower 
 
 (C 
 
 2,100 to 
 
 3,000 
 
 « 
 
 II. 
 
 Middle class. 
 
 ■j middle 
 
 « 
 
 3,000 to 
 
 6,000 
 
 IC 
 
 
 
 ' upper 
 
 (( 
 
 6 000 to 
 
 9,500 
 
 (C 
 
 
 
 f lower 
 
 « 
 
 9,500 to 
 
 30,500 
 
 (t 
 
 III. 
 
 Upper class. 
 
 •j middle 
 
 it 
 
 30,500 to 
 
 100,000 
 
 (t 
 
 
 
 ' upper 
 
 It 
 
 over 100,000 
 
 
 (C 
 
 The following table shows, at ten periods during the 
 fifty years 1853- 1902, the absolute number of persons 
 in the upper stratum of the lower class and the lower 
 stratum of the middle class, and the absolute number 
 and percentage of persons in the middle and upper 
 strata of the middle class and in the upper class. All 
 the figures given in the first three columns are thou- 
 sands (000 omitted). 
 
 ^■^ Incomes below 500 marks are now extremely rare in Ger- 
 many; they represent as a rule the lower agricultural laboring 
 class. In the 500-900-marks group belong the poor peasantry 
 and the poorly-paid workingmen. The 900-2, lOO-marks group 
 includes clerks and salesmen, skilled workingmen, younger of- 
 ficials, public school teachers, well-to-do peasants, artisans and 
 petty store- and saloon-keepers. Specially skilled mechanics are 
 often found in the lower stratum of the middle-class group with 
 incomes of 2,100-3,000 marks. 
 
DISAPPEARANCE OF THE MIDDLE CLASS 89 
 
 Year 
 
 Population 
 
 Number Taxed on 
 Incomes 
 
 Percentage 
 TAXED on 
 
 
 900 TO 3000 
 MARKS 
 
 over 3,000 
 MARKS 
 
 incomes over 
 
 3000 MARKS 
 
 1853 
 
 1867 
 
 1870 
 
 1873 
 
 1878 
 
 1882 
 
 1891 
 
 1892 
 
 1896 
 
 1902 
 
 16,870 
 19,157 
 23,909 
 24,644 
 
 25,748 
 26,820 
 29,456 
 29,895 
 31,349 
 35,551 
 
 825 
 963 
 1,319 
 1,370 
 1,356 
 1,304 
 
 1,743 
 2,119 
 2,321 
 3,310 
 
 44.4 
 
 72.9 
 106.4 
 
 123.3 
 
 167.3 
 162.6 
 
 254-3 
 316.9 
 
 33I-I 
 449-7 
 
 0.263 
 0.380 
 
 0-445 
 0.500 
 0.650 
 0.683 
 0.863 
 1.060 
 1057 
 1.301 
 
 The absolute number of middle- and upper-class tax- 
 payers in the same years are given in the following 
 table. The figures in the first column are thousands. 
 
 
 
 Middle Class Incomes 
 
 Upper Class 
 
 
 
 
 
 
 Incomes 
 
 Year 
 
 
 
 
 
 
 
 
 2100 TO 
 
 3000 TO 
 
 6000 To 
 
 9500 TO 
 
 30,500 TO 
 
 Over 
 
 
 3000 
 
 6000 
 
 9500 
 
 30,500 
 
 100,000 
 
 100,000 
 
 1853 
 
 46.9 
 
 32,003 
 
 7,239 
 
 4,463 
 
 640 
 
 62 
 
 1867 
 
 81.I 
 
 50,966 
 
 12,224 
 
 8,211 
 
 1,348 
 
 144 
 
 1870 
 
 1 12.4 
 
 75,851 
 
 17,434 
 
 11,027 
 
 1,911 
 
 199 
 
 1873 
 
 1 19.6 
 
 85,603 
 
 20,813 
 
 13,650 
 
 2,815 
 
 423 
 
 1878 
 
 153-5 
 
 121,071 
 
 25,350 
 
 17,457 
 
 3,054 
 
 375 
 
 1882 
 
 iSo.o 
 
 131,310 
 
 27,958 
 
 19,580 
 
 3,403 
 
 434 
 
 1891 
 
 185.1 
 
 180,862 
 
 38,275 
 
 28,776 
 
 5,442 
 
 915 
 
 1892 
 
 223.4 
 
 204,544 
 
 55,561 
 
 46,092 
 
 9,034 
 
 1,658 
 
 1896 
 
 260.1 
 
 214,960 
 
 57,859 
 
 47,308 
 
 9,265 
 
 1,699 
 
 1902 
 
 321.3 
 
 291,341 
 
 77,638 
 
 64,737 
 
 13,205 
 
 2,762 
 
 We see from these figures how utterly unwarranted 
 is the idea of the proletarization of the middle class. 
 With all due allowance for the increased cost of living, 
 we find the number of the well-to-do absolutely and 
 
90 
 
 MARXISM VERSUS SOCIALISM 
 
 relatively to the whole population on the increase. The 
 same is true about the very rich. 
 
 The following little table gives the growth of the 
 multimillionaire incomes in Prussia during the same 
 period : 
 
 
 Incomes 
 
 Year 
 
 100,000 TO 
 
 500,000 
 
 500,000 TO 
 1,000,000 
 
 1,000,000 TO 
 2,000,000 
 
 Over 
 
 2,000,000 
 
 1853 
 
 1867 
 
 1870 
 
 1873 
 
 1875 
 
 1882 
 
 1891 
 
 1892 
 
 1896 
 
 1902 
 
 60 
 135 
 
 187 
 391 
 399 
 
 407 
 
 859 
 
 1,555 
 
 1,596 
 
 2,594 
 
 2 
 
 9 
 12 
 32 
 18 
 22 
 
 43 
 
 72 
 
 76 
 
 108 
 
 4 
 2 
 8 
 
 20 
 
 44 
 
 4 
 3 
 5 
 4 
 7 
 16 
 
 Marx's formula '' One capitalist always kills many," 
 can hardly be regarded as a statement of fact. In 
 1854 Berlin had only six men possessing over three 
 million marks; in 1900 it had 639. in this class. In 
 1854 there were in Berlin 23 men who possessed a 
 million and a half each; in 1900 there were 1,323 in 
 this group. And with all due respect to German hon- 
 esty, it is well to remember that men are not likely 
 to overestimate either their income or the value of 
 their property when it comes to paying taxes. 
 
 The English income statistics present greater dif- 
 ficulties, owing to their arrangement in schedules, 
 every taxpayer declaring his income on different 
 
DISAPPEARANCE OF THE MIDDLE CLASS 91 
 
 schedules according to its character and source. If we 
 take the incomes assessed under Schedule D, incomes 
 from trades and professions, we find for the decade 
 1 877- 1 886 the following changes: 
 
 Incomes 
 
 1877 
 
 1886 
 
 Percentage 
 OF Change 
 
 Between £150 and ii,ooo. . . 
 ii,ooo and upwards 
 
 317,939 
 22,848 
 
 379,064 
 22,298 
 
 +19.26 
 — 2.40 
 
 These figures led Goshen, then chancellor of the Ex- 
 chequer, to enunciate the thesis of a decentralization 
 of wealth. The period was one of depression, how- 
 ever. The data of tax assessments under Schedule D 
 for the following decade do not show the same ultra- 
 democratic tendency. 
 
 Incomes 
 
 1888-89 
 
 1893-94 
 
 Percentage of 
 Change 
 
 £150 and under £500 
 
 £500 and under ii,ooo. . . 
 ii,ooo and under £5,000. 
 £5,000 and over 
 
 347,520 
 
 31,084 
 
 18,665 
 
 2,965 
 
 362,048 
 
 20,431 
 3,149 
 
 +4.18 
 +5.32 
 +9.46 
 +6.21 
 
 
 Incomes 28 
 
 Exceeding £160 and not exceeding 
 £500 
 
 Exceeding £500 and not exceeding 
 £1,000 
 
 Exceeding £1,000 and not exceeding 
 £5,000 
 
 Exceeding £5,000 and over 
 
 1894-95 
 
 278,370 
 26,790 
 
 17,146 
 2,785 
 
 1897-98 
 
 306,200 
 27,779 
 
 18,113 
 3,141 
 
 Percentage 
 OF Change 
 
 +10.00 
 + 3.69 
 
 + 5.64 
 + 2.78 
 
 Note the change of the lower limit from £150 to £160. 
 
92 MARXISM VERSUS SOCIALISM 
 
 These fluctuations of incomes from trades and pro- 
 fessions under Schedule D do not substantiate Goshen's 
 premature thesis of the decrease of great wealth, but 
 they undoubtedly indicate a steady growth of the 
 middle class. It must be borne in mind that these 
 figures do not include the incomes of the taxpayers as 
 shareholders of companies, whose profits are assessed 
 in the lump. And the army of stockholders presents 
 a steady and enormous growth. In 1887 Goshen 
 wrote : '' I have examined the figures of twelve com- 
 panies, taken entirely at random — an insurance com- 
 pany, a water-works company, an industrial company, 
 and so forth, and I have compared their capital and 
 the number of shareholders ten years ago with the 
 capital and the number of shareholders at present. 
 Here is the result: the total paid-up capital of the 
 twelve companies in 1876 was £5,171,649; in 1886 it 
 had become £6,501,582, an increase of 25 per cent. 
 But the shareholders in them had increased during the 
 same ten years from 11,667 ^o 20,083, ^^ increase of 
 y2 per cent." ^^ 
 
 Here we come to a point which Marx has obviously 
 overlooked: the economic significance of the joint- 
 stock company. The assumption that centralization of 
 industry signifies centralization of ownership and cap- 
 ital is false. The opposite is the economic tendency; 
 and this fact is acknowledged by such enlightened and 
 
 ^^ Viscount Goshen, Essays and Addresses on BcQnomiQ 
 Questions (London, 1905), pp. 231, 232, 
 
DISAPPEARANCE OF THE MIDDLE CLASS 93 
 
 scholarly socialists as Eduard Bernstein.^** In Eng- 
 land, in recent years, numbers of smaller firms have 
 been merged in larger stock companies. On April i, 
 1904, there were 2>7'^^7 such stock companies regis- 
 tered in England, many of these companies represent- 
 ing consolidations of a number of industrial or com- 
 mercial firms, but the organization as joint-stock com- 
 mies meant a wider distribution of both income and 
 ownership. Here is an example : 
 
 Name of Company 
 
 Capitaliza- 
 tion 
 
 Stocks 
 Retained by 
 THE Vendors 
 
 Number 
 of Firms 
 Amalga- 
 mated 
 
 Number 
 
 OF 
 
 Stock- 
 holders 
 
 Fine Cotton Spinners 
 
 Bradford Coal Dyers. 
 
 Bradford Coal Mer- 
 chants 
 
 Aberdeen Comb 
 Works 
 
 Cooper, Cooper and 
 Johnson 
 
 £4,000,000 
 3,000,000 
 
 199,790 
 
 300,000 
 
 340,000 
 
 ^1,333,350 
 1,000,000 
 
 119,790 
 
 133,333 
 70,000 
 
 31 
 22 
 
 8 
 3 
 3 
 
 3,934 
 10,731 
 
 22,7 
 
 677 
 
 2,082 
 
 
 ^7,839,790 
 
 £2,656,473 
 
 67 
 
 17,661 
 
 Instead of 67 firms, 17,661 stockholders. True, about 
 one-third of stock, probably sufficient to insure the 
 control of the enterprises, was retained by the original 
 firms, but the remaining two-thirds were distributed. 
 The members of the original 6y firms have probably 
 
 " Eduard Bernstein, Die heutige Einkommensbewegung und 
 die Aufgabe der Volkswirtschaft (Berlin, 1902). See especially 
 chapter iii (pp. 24-32) on "Die Conzentrierung der Unter- 
 nehmungen und die Dezentralisierung der Eigentumstitel." 
 
94 MARXISM VERSUS SOCIALISM 
 
 become employees of the five new companies; but the 
 change in their position is hardly to be viewed as a case 
 of " proletarization," since, in addition to their salaries 
 as company employees, they are receiving dividends 
 on two and a half millions' worth of stock. The 
 above example is characteristic of the whole recent in- 
 dustrial development. In five English brewing con- 
 cerns we find that the stock is held by 27,052 persons. 
 " Thomas Lipton," the grocery trust, has 74,262 share- 
 holders ; '' Spiers and Pond " in London has 4,650 
 ^. stockholders, and of these but 550 hold more than 
 £500 worth of stock. 
 
 The development of stock companies explains why 
 the number of moderate incomes from trades and pro- 
 fessions, taxed under Schedule D, has not recently 
 increased as rapidly as in the seventies and eighties. 
 A large number of small tradesmen formerly assessed 
 under Schedule D are now assessed as employees of 
 public companies under Schedule E.^^ If we exclude 
 from this schedule the eighty-odd thousand army, 
 navy and civil-service employees, we find that the num- 
 ber of employees of corporate bodies and of public 
 companies increased more than one hundred per cent 
 in fifteen years. The figures are: 
 
 1888-89. . . • 130,862 1894-95. . . . 155,752'' 189B-99. . . .223,391 
 1893-94 166,161 1897-98 — 187,240 1902-03 — 272,500 
 
 " Goshen, op. cit., p. 249. 
 
 ^" This decrease is due to the raising of the exemption limit 
 from £150 to ii6o. 
 
DISAPPEARANCE OF THE MIDDLE CLASS 95 
 
 The same rapid growth of the army of stockholders 
 is to be found in the United States. Some of our 
 principal railroads, for example, show the following 
 increases in the numbers of shareholders during the 
 last four years : 
 
 ig)04 1908 
 
 Pennsylvania 42,100 59,6oo 
 
 Atchison 17,800 25,000 
 
 New York Central 1 1,700 22,000 
 
 Union Pacific 14,200 15,000 
 
 Southern Pacific 4,400 15,000 
 
 Great Western 5,900 10,000 
 
 Erie 4,300 10,000 
 
 Delaware and Hudson 3,8o3 5,8oo 
 
 Norfolk and Western 2,900 4,5oo 
 
 Chesapeake and Ohio 1,500 2,600 
 
 The American railroads count to-day about half a 
 million stockholders as against 350,000 five years ago. 
 The same decentralizing tendency is discernible in 
 our industrial companies. The United States Steel 
 Corporation counts to-day about 110,000 stockholders; 
 the Bell Telephone, 24,100; American Sugar, 20,000; 
 Amalgamated Copper, 18,000; Pullman, 13,000. The 
 total number of American shareholders is now esti- 
 mated to be about 2,000,000. 
 
 Thus, wherever we look, we find a steady increase 
 of the middle class. In 185 1 there were in England 
 about 300,000 persons with an income of £150-1,000, 
 in 1 88 1, about 990,000. While the population during 
 that period increased in the ratio of 27.35, ^he English 
 middle class increased in the ratio of 27.90, i.e., 233 
 
96 MARXISM VERSUS SOCIALISM 
 
 per cent. In 1898 Bernstein estimated the number of 
 middle-class taxpayers at a million and a half.^^ Not 
 only has the middle class, whose extermination is so 
 essential to the triumph of socialism, greatly in- 
 creased,^* but so have the numbers of co-partners of 
 the great capitalistic enterprises — the army of stock- 
 holders, enlisted in the defense of capital and of vested 
 interests.^^ 
 
 It has been argued that Marx's analysis of our 
 capitalist system was based on the assumption of 
 free competition and failed to take into account the 
 economic effects of corporate methods of business, and 
 that, if competition were unchecked and there were no 
 joint-stock companies, the concentration of capital in 
 the hands of the few and the proletarization of the 
 middle class would be unavoidable. Possibly this is 
 
 ^' Bernstein, Die V oraussetzungen des Sozialismus und die 
 Aufgahen der Sozialdemokratie (Stuttgart, 1899), p. 49. 
 
 ^* " Now as a matter of fact, what is the income-tendency of 
 the wealthy? As far as statistics on the subject are available, 
 they show in every civilized country an extension rather than 
 a shrinking of the rich classes." Bernstein, Die heutige Ein- 
 kommenbewegung (1902), p. 21. 
 
 *•* " The army of stockholders constitutes to-day in every 
 respect, politically and socially, the bulwark of capital. What 
 would the handful of magnates be without the number, mounting 
 into the hundred thousands, of middle-class and small stock- 
 holders ? What could they do against public opinion ? Nothing ! 
 The first storm would break their resistance. But together with 
 the magnates of the second, fourth and eighth class, they form 
 or sway what is known as public opinion." Bernstein, Die 
 heutige Socialdemokratie in Theorie und Praxis (Miinchen, 
 1906), p. 32. 
 
DISAPPEARANCE OF THE MIDDLE CLASS 97 
 
 true; but it is not particularly useful to consider how 
 different things would be if things had been different. 
 The fact remains that the economic development has 
 taken a turn which Marx did not foresee; and Karl 
 Kautsky remained a true exponent of orthodox Marx- 
 ism, when he exclaimed, at the Stuttgart Socialist Con- 
 vention : " Yes, if that is true, then not only is the 
 day of our victory ever to be postponed, but we can 
 never reach our aim. If capitalists are on the increase 
 and not the propertyless, then the development is set- 
 ting us back further and further from our goal, then 
 capitalism intrenches itself and not socialism, then 
 our hopes will never materialize ! " ^® 
 
 " Protokoll uber die Verhandlungen des Parteitages der so- 
 zialdemokratischen Partei Deutschlands, abgehalten zu Stuttgart, 
 1898, p. 128. 
 
CHAPTER VI 
 THE THEORY OF INCREASING MISERY 
 
 VVk are told that with the general proletarization of 
 the masses, with the concentration of capital and the 
 numerical diminution of capitalist magnates, a parallel 
 process takes place which makes the existing mode 
 (jf production not only intolerable but untenable. It 
 is the progressive impoverishment, the rapidly increas- 
 ing misery, the economic sinking and physical degen- 
 eration of the proletariat which make a social revolu- 
 tion mandatory upon suffering humanity under pain 
 of starvation/ In the words of the Communist 
 Manifesto: " The modern laborer, . . . instead of 
 rising with the progress of industry, sinks deeper and 
 deeper below the conditions of existence of his own 
 class, lie becomes a pauper, and pauperism develops 
 more rapidly than population and wealth. And here 
 it becomes evident that the bourgeoisie is unfit any 
 longer to be the ruling class in society and to impose 
 its conditions of existence upon society as an over- 
 riding law. It is unfit to rule, because it is incom- 
 petent to assure an existence to its slave within his 
 slavery, because it cannot help letting him sink into 
 such a state that it has to feed him instead of being 
 
 ^ Marx, Ca/'ital, p. 789. 
 98 
 
THEORY OF INCREASING MISERY 99 
 
 fed by him. Society can no longer live under this 
 bourgeoisie; in other words, its existence is no longer 
 compatible with society." ^ This doctrine of increas- 
 ing misery, which was later elaborated by Marx in his 
 Capital, is based upon observations and facts of his 
 time. These facts Marx interpreted theoretically in 
 a brilliant way. 
 
 Behind this doctrine of increasing misery was an 
 original theory of wages. It was not the " iron law " 
 of wages, as some recent writers claim. ^ There is 
 nothing specifically socialistic about the iron law of 
 wages. It is Ricardo's theory, to which Lassalle added 
 the adjective iron, and which Marx for many excellent 
 reasons contemptuously rejected.* The iron law of 
 wages, while an effective weapon in the hands of so 
 great an agitator as Lassalle, gave as such no reason- 
 able assurance that the end of the wage system was 
 near. A generation ago wages represented the la- 
 borer's cost of living; a generation from now wages 
 would, according to the iron law, still represent the 
 laborer's cost of living. This theory gives no ground 
 
 ^ Communist Manifesto, p. 31. 
 
 ® So, for instance, Rossignol, Orthodox Socialism, pp. 9, 26, 
 and W. H. Mallock, Socialism (The National Civic Federation, 
 New York, n. d.), p. 10. 
 
 " Marx wrote to Bracke in 1875 : " Of the ' iron law of wages ' 
 nothing, as is well known, is Lassalle's own except the word 
 * iron ' borrowed from Goethe's phrase, ' ewigen, ehernen, grossen 
 Gesetzen.' The word ' iron ' is a term whereby those of the 
 true faith recognize each other. If, however, I take the law with 
 Lassalle's stamp and therefore in his sense, then I must also 
 take it with his proof. And what is that! As Lange pointed 
 
100 MARXISM VERSUS SOCIALISM 
 
 for assuming that the wage-earners of the future will 
 necessarily oppose the wage system any more than the 
 laborers of the past have opposed it. On the other 
 hand, a doctrine that declares inevitable a pro- 
 gressively increasing misery of the working class gives 
 reasonable assurance that the wage-earners will in- 
 creasingly and progressively oppose the existing eco- 
 nomic system. 
 
 Furthermore, the industrial revolution was followed 
 by an era of progressive diminution of wages. Wages 
 were obviously sinking rapidly, not only below the 
 demands of the standard of living but actually in 
 many instances below the possible requirements of 
 physical existence. Was this phenomenon taken into 
 account by the Ricardian doctrine? In 1835 the Gov- 
 ernor-General of India reported : " The misery hardly 
 finds a parallel in the history of commerce. The bones 
 of the cotton weavers are bleaching the plains of In- 
 dia." And the situation of Europe's weavers was not 
 much better. Consider, for instance, the following 
 official figures, quoted by Professor von Schultze- 
 
 out shortly after Lassalle's death: the Malthusian doctrine of 
 population preached by Lange himself. If this, however, is 
 correct, then again I can not annul the law even if I abolish the 
 wage system a hundred times over, for the law then dominates 
 not only the wage system but every social system. Relying on 
 this very fact, for fifty years and more economists have shown 
 that socialism cannot annul that zvhich is founded on nature, 
 but on the contrary can only render it more general, spreading 
 it over the surface of society." Neue Zeit, Jahrgang IX (1891), 
 vol. i, p. 570. 
 
THEORY OF INCREASING MISERY loi 
 
 Gaevernitz : " On an average good weavers in Bolton 
 earned weekly: 
 
 s. d. lbs. wheat Hour lbs. oatmeal 
 
 1797-1804 26 8 = 100 or 142 
 
 1804-1811 20 = 79 or 115 
 
 1811-1818 14 7 = 60 or 79 
 
 1818-1825 89 = 48 or 64 
 
 1825-1832 6 4 = 28 or 48 
 
 The stuff in question was at the time not yet produced 
 by the power-loom. It permitted, therefore, the 
 chance of far more favorable remuneration than the 
 production, for example, of printing calico. There 
 were even wages as low as 2s. to 3s. weekly." ^ 
 The Silesian weavers were even worse off, they were 
 actually dying of starvation.^ All this misery was, 
 from the point of view of our economic classics, a sit- 
 uation for which nature alone was to blame^J-^ 
 
 The growth of pauperism, the degradation and de- 
 
 f 
 generation of the laboring class in the first half of the } 
 
 nineteenth century were not invented by socialist agi- 
 tators. The facts were so tangible that the most con- 
 
 I 
 ® Schultze-Gaevernitz, The Cotton Trade in England and on 
 the Continent (London, 1895), p. 31. 
 ' J. W. Wolff in Deutsches BUrgerbuch fiir 1845, pp. 174-202. 
 ■^ " A man who is born into a world already possessed, if he 
 cannot get subsistence from his parents on whom he has a just 
 demand, and if the society does not want his labor, has no 
 claim of right to the smallest portion of food and, in fact, has 
 no business to be where he is. At Nature's mighty feast there 
 is no vacant cover for him. She tells him to be gone, and will 
 quickly execute her own orders." Malthus, An Essay on the 
 Principle of Population (2d ed., 1803), p. 531. 
 
102 MARXISM VERSUS SOCIALISM 
 
 servative economists of the time were the most em- 
 phatic in their condemnation of existing conditions 
 and the first to demand checks and restrictions of the 
 capitaHst regime. The writings of the leading French 
 and German economists and the speeches of Lord Ash- 
 ley contain statements as drastic as any to be found 
 in the socialist literature. The Communist Manifesto 
 contains an attack upon the family — an attack which, 
 we believe, Marx himself in later years regretted. 
 There we read : " Abolition of the family ! Even the 
 most radical flare up at this infamous proposal of the 
 Communists. . . . The bourgeois clap-trap about 
 the family and education, about the hallowed co- 
 relation of parent and child, become all the more dis- 
 gusting, the more, by the action of modern industry, 
 all family ties among the proletarians are torn asunder, 
 and their children transformed into simple articles of 
 commerce and instruments of labor." ^ But no less 
 respectable and conservative a scholar than Robert 
 von Mohl was lamenting as early as 1835, that the 
 workingman's wife and children were confiscated by 
 the factory system, and that family life was utterly 
 destroyed among the industrial proletariat.^ Nor was 
 
 ® Communist Manifesto, pp. 39, 40. 
 
 * " Ueber die Nachteile, welche sowohl den Arbeitern selbst als 
 dem Wohlstande und der Sicherheit der gesammten btirgerlichen 
 Gesellschaft von dem fabrikmassigen Betriebe der Industrie 
 zugehen, tind iiber die Notwendigkeit griindlicher Vorbeugungs- 
 mittel," in K. H. Rau's Archiv der politischen Oekonomie und 
 PoUzeiwissenschaft (Heidelberg, 1835), vol. ii, pp. 145, 146, 148, 
 151, 156. 
 
THEORY OF INCREASING MISERY 103 
 
 the accusation wholly unwarranted that the industrial 
 system was demoralizing the wives and daughters of 
 laboring men. It was rather a common observation 
 that the women, who to so large an extent were re- 
 placing skilled male laborers, were thrown at each 
 industrial crisis on the streets as prostitutes. We 
 have, for instance, the following statement from the 
 chief constable of Bolton, Mr. Harris : " Unfortunate 
 females who, in consequence of the cotton famine, 
 were at its commencement thrown out of employment, 
 have thereby become outcasts of society; and now 
 though trade has revived and work is plentiful they 
 continue members of that unfortunate class and are 
 likely to continue so. There are also in the borough 
 more youthful prostitutes than I have known for the 
 last twenty-five years." ^° 
 
 Yet, while acknowledging the unspeakable misery 
 of the working class, our classical political econ- 
 omy had no word of solace and no ray of hope 
 for the toilers. Even as late as 1874 one of 
 the last true-blue representatives of classical politi- 
 cal economy, Mr. Cairnes, had the admirable cour- 
 age to state frankly and precisely his attitude. The 
 possibility of any improvement of the living con- 
 ditions of the industrial laborers " is confined within 
 narrow barriers which cannot be passed, and the prob- 
 
 ^° Reports of the Inspectors of Factories for the half-year 
 ending October 31, 1865. London, 1866, Parliamentary Papers, 
 Session i February- 10 August, 1866, vol. xxiv. 
 
104 MARXISM VERSUS SOCIALISM 
 
 lem of their elevation is hopeless. As a body they will 
 not rise at all. A few, more energetic or more for- 
 tunate than the rest, will from time to time escape, as 
 they do now, from the ranks of their fellows to the 
 higher walks of industrial life, but the great majority 
 will remain substantially where they are. The re- 
 muneration of labor as such, skilled or unskilled, can 
 never rise much above its present level." ^^ This was 
 not so much an expression of a personal opinion as 
 a logical deduction from the classical wage-fund doc- 
 trine, of which Mr. Cairnes was, if we are not mis- 
 taken, the last champion. The tenacity with which 
 political economy clung to so crude a doctrine as the 
 wage-fund theory, a theory which was so palpably 
 below the high mental level which its authors other- 
 wise maintained, can be explained only psychologically. 
 It was a semi-unconscious device for shirking all re- 
 sponsibility for the truly barbarous condition into 
 which the British proletariat was sinking; it was an 
 ingenious apology for the neglect of all moral obliga- 
 tions by state and society, a strong defense of laisses 
 faire, putting all the blame for shame and crime and 
 dishonor on the Almighty and his immutable laws. 
 
 The wage-fund argument was, roughly speaking, 
 that the general amount of capital is determined by 
 society's past exertions, by the accumulated savings 
 and profits of the past. Out of this sum a certain 
 
 ^^ Cairnes, Some Leading Principles of Political Economy 
 Newly Expounded (London, 1874), p. 348. 
 
THEORY OF INCREASING MISERY 105 
 
 amount is required for plant and material, the amount 
 being determined by the technical character of indus- 
 try. The free balance is the wage fund, thus a fixed 
 and predetermined amount. More than that amount 
 the wage-earners cannot possibly receive, less than 
 that amount they never obtain. The rate of wages 
 therefore depends upon the number of wage-earners. 
 Their number is the divisor, the wage fund the div- 
 idend. And here comes in the Malthusian doctrine. 
 If the number of wage-earners is great, their wages 
 are low. Low wages check the increase of population, 
 hence wages rise. There is, therefore, no use in blam- 
 ing anybody or anything ; one might as well blame the 
 four fundamental rules of arithmetic. The question 
 of wages is a question of division. If, however, the 
 wage-earning population should so decrease and wages 
 so rise as to diminish profits, the accumulation of 
 capital would thereby automatically be diminished, the 
 wage fund would contract, and wages be bound to sink 
 again. Neither unionism nor legislation can affect the 
 situation — not even if thereby the efficiency of the 
 wage-earners be increased and the profits of the cap- 
 italist class thus remain undiminished. As Sidney 
 and Beatrice Webb have pointed out, this theory '^ left 
 no room for any elevation of the wage-earners even 
 if the improvement justified itself by an increase in 
 productive capacity. If one section of the wage- 
 earners succeeded, by peaceful negotiation or law, in 
 so bettering their own conditions of employment as 
 
Xo6 MARXISM VERSUS SOCIALISM 
 
 positively to increase their productive efficiency, this 
 would still bring no greater reward to the class as a 
 whole. Though the increase in the cost of their labor 
 might soon be made up to their employers by its 
 greater product, yet this increased drain on the wage 
 fund must automatically have depressed the condition 
 and so lowered the efficiency of other sections, with 
 the result that, though the inequality between the sec- 
 tions would have increased, the aggregate efficiency 
 of the wage-earners as a whole would not have risen. 
 Thfis every factory act^ which increased the immediate 
 cost of woman or child labor, had to he paid for hy 
 a contemporaneous decrease in somebody's wages; and 
 every time a new expense for sanitation or precaution 
 against accidents was imposed on the capitalists, some 
 of the wage-earners had automatically to suffer a 
 diminution of income f ^^ 
 
 Thus, as the reader can readily observe, any at- 
 tempt to alleviate the living and working conditions of 
 the laboring class could be resisted on high moral 
 grounds : according to the laws of political economy 
 the reform would hurt the very class it sought to help ! 
 *' For a time, indeed, a natural influence may be 
 dammed back, but only to act, ultimatety, with accumu- 
 lated force. In the long run, God's laws will over- 
 whelm all human obstructions." ^^ Consequently those 
 
 *^ Sidney and Beatrice Webb, Industrial Democracy (London, 
 1902), p. 607. The italics are mine. 
 ^^ James Stirling, Trade Unionism (1889), p. 27, quoted in 
 
THEORY OF INCREASING MISERY 107 
 
 who objected to the most ruthless methods of exploit- 
 ing child labor were charged with betraying the very 
 palladium of British liberties, with " undermining the 
 laws of political economy, with assailing God's own 
 established orderj^ And thus we see a Harriet Mar- 
 tineau lamenting in 1833 over the first faint regula- 
 tions of child labor. Shocked as she was by the of- 
 ficial disclosures in regard to the subject, she could 
 not tolerate any legislative interference, any social con- 
 trol ; it was against political economy. But a woman's 
 heart is not without mercy, so she hoped that children 
 engaged in industry might die! "The case of those 
 wretched factory children seems desperate; the only 
 hope seems to be that the race will die out in two or ^ 
 three generations; by which time machinery may be 
 found to do their work better than their miserable 
 
 Webb's Industrial Democracy, p. 611. Mr. Stirling was after all 
 but a commonplace interpreter of "God's laws." The palm in 
 this line belongs to the English economist, the Rev. J. Townsend, 
 who wrote under the name "The Wellwisher of Mankind" 
 against the Poor Law. In his masterpiece, which lived to see 
 a second edition — A Dissertation on the Poor Laws (London, 
 1817), pp. 39-41, quoted by Marx, Capital, I, pp. 602, 603 — ^he ■ 
 explains to us that the poor are improvident and multiply rapidly i' 
 in order "that there may always be some to fulfil the most 
 servile, the most sordid and the most ignoble offices in the 
 community. The stock of human happiness is thereby much 
 increased, whilst the more delicate are not only relieved from 
 drudgery . . . but are left without interruption to pursue those 
 calHngs which are suited to their various dispositions." The 
 Poor Law " tends to destroy the harmony and beauty, the sym- 
 metry and order of that system which God and Nature have 
 established in the world." 
 
io8 MARXISM VERSUS SOCIALISM 
 
 selves." ^* Miss Martineau forgot that machines were 
 invented precisely for the purpose of substituting child 
 labor for skilled adult labor. 
 
 But Marx remembered it; he knew Ure's Philosophy 
 of Manufactures by heart.^^ And yet Marx and En- 
 gels did not escape the dogmatic fascination of the 
 " economic law." It is this circumstance which 
 stamped Marx as a classical economist. In the fifties 
 Marx, and Engels also, regarded any attempt to regu- 
 late economic conditions by the law of the land as 
 fruitless meddling, reactionary in its effect. We find 
 them anathematizing the ten-hour law in language 
 worthy of Nassau Senior. " The whole social devel- 
 opment of England depends upon the development and 
 progress of its industry. All institutions, which inter- 
 fere with its progress, which try to regulate and 
 control it . . . are reactionary and untenable." ^^ 
 From this classical doctrine Marx and Engels, how- 
 ever, drew the conclusion that, since reforms cannot 
 mend the situation, the economic development is 
 bound to lead to a revolution. " And so the only 
 solution of the ten-hour problem, as of all problems 
 
 ^* Harriet Martineau's Autobiography, by Maria W. Chap- 
 man (London, 1877), vol. iii, p. 87. Quoted in Webb, op. cit., 
 p. 608. 
 
 " " The effect of substituting the self-acting mule for the 
 common mule is to discharge the greater part of men spinners 
 and to retain adolescents and children." Ure, Philosophy of 
 Manufactures (London, 1835), p. 23. 
 
 ^' In Marx's Neue Rheini^che Zeitung, Heft 4 (London, 1850)^ 
 
 p- 13. '. y 
 
THEORY OF INCREASING MISERY 109 
 
 arising from the antagonism of capital and labor, is 
 the proletarian revolution.^l^ 
 
 There are two main principles of government, 
 and they are mutually exclusive: the one of so- 
 cial control and state intervention; the other of 
 consistent hisses faire, the state guaranteeing prop- 
 erty and free contract and then limiting its functions 
 to those of a policeman and night-watchman. It is 
 obvious that economic tendencies can be watched, 
 checked and modified from the point of view of the 
 first principle, but from the other point of view these 
 tendencies are manifestations of immanent and sov- 
 ereign laws, independent of our desires and our ac- 
 tions. Classical political economy represented at the 
 same time advocacy of the laissez faire principle and a 
 theoretical explanation of the phenomena which arise 
 under it. 
 
 In his Capital Marx abandoned his old view of the 
 ten-hour bill and became an inconsistent advocate of 
 social control, but he remained a typical classical free- 
 trader in his theory. He took it for granted that the , 
 capitalist mode of production is based on non-inter-/ 
 ference and free trade, and, with exceptional acumen, ■ 
 he worked out its laws and tendencies, which pointed 
 to a general cataclysm of capitalist society and to a\ 
 social revolution. Yet Marx himself witnessed the ' 
 
 ^'^ Ibid., p. 16. See also Aus dem literarischen Nachlass von 
 Karl Marx, Friedrich Engels, etc., vol. iii (Stuttgart, 1902), p. 
 395- 
 
no MARXISM VERSUS SOCIALISM 
 
 passing of the laissez faire stage of English capitalism 
 and the reintroduction of social control — the ten-hour 
 bill, the factory acts, etc. He appreciated their im- 
 portance. There is abundant proof that he realized 
 that he was witnessing the victory of a new principle. 
 But it was too late ; his theory was made up and was 
 fixed in his mind. As a theory, it was profound, but 
 it was unrelated to the transformation which was 
 going on before his eyes. Lassalle's prediction that 
 Marx would be a combination of a Hegel turned 
 economist and a Ricardo turned socialist ^® was com- 
 pletely verified. Marx did develop and apply the eco- 
 nomic principles of Ricardo, and the change of 
 tablcaus in Hegel's historical process he expected from 
 the self-destruction of capitalism. He was on the 
 lookout for a death certificate, and did not notice that 
 the factory acts and social control signified either a 
 new lease of life for capitalism or the new tableau he 
 was looking for, the dawn of a new era. 
 
 Now let us see how Marx came to this doctrine of 
 increasing misery as a law of capitalist society. The 
 iron law of wages, as we have already seen, did not 
 account for the actual steady sinking of wages. Nor 
 was the Malthusian side of the iron-law doctrine ac- 
 ceptable to Marx. Neither of these theories made 
 any such impression upon him as that which he re- 
 ceived from Andrew Ure's discussion of the purport 
 
 ^* Brief e von Ferdinand Lassalle an Karl Marx (Stuttgart, 
 1902), p. 30. The letter cited is dated May 12, 1851. 
 
THEORY OF INCREASING MISERY iii 
 
 and effect of machinery : '' The effect of improvements 
 in machinery not merely in superseding the necessity 
 for the employment of the same quality of adult labor 
 as before, in order to produce a given result, but in 
 substituting one description of human labor for an- 
 other, the less skilled for the more skilled, juvenile for 
 adult, female for male, causes a fresh disturbance in 
 the rate of wages." ^^ Upon these facts, which were 
 matters of common observation, Marx built his theory 
 of wages and population. From these data it fol- 
 lowed that in industrial society a surplus population, 
 pauperism of the unemployed, and low wages of the 
 employed are due to technical improvements. While 
 Malthus's law may apply to plants or animals, it is 
 not written for modern industrial life, since an entirely 
 new element comes in, that of industrial technique, and 
 this element is the decisive one. In fact, without a 
 large surplus population of operatives, without an in- 
 dustrial reserve army, capitalist industry could not 
 exist, since it could not adjust itself to the fluctuations 
 which are essential to an unorganized competitive 
 mode of production. Without a reserve army on call, 
 the times of prosperity could not be utilized, and the 
 increased demand could not be supplied for lack of 
 factory hands. This reserve army is created and 
 maintained by the introduction of new machinery or 
 by technical improvement of the old. It acts as a 
 dead weight of pauperism upon the active industrial 
 ^® Ure, Philosophy of Manufactures (London, 1835), P- 32i. 
 
112 MARXISM VERSUS SOCIALISM 
 
 army. Wages are depressed and become insufficient 
 for the physical maintenance of the laborers' families. 
 The improved machinery permits the employment of 
 women and children, the insufficient wages of the men 
 compel it. Thus the proletarian family is destroyed; 
 it becomes a group of factory hands. The large 
 amount of " constant " capital, i.e., capital invested in 
 the plant, suggests its longer and intenser utilization. 
 As a result comes the prolongation of the working 
 day. " When a laborer," says a cotton manufacturer 
 quoted by Nassau Senior, *' lays down his spade, he 
 renders useless a capital worth eightpence. When one 
 of our people leaves the mill he renders useless a 
 capital that has cost £100,000." ^^ Hence the de- 
 mand for longer hours, a demand which the laborer 
 cannot resist because of the competition of the indus- 
 trial reserve. Machinery, as Ure explained, turns the 
 flanks of the laboring army and compels it to " sur- 
 render at discretion " ; and every bit of machinery 
 " confirms the great doctrine already propounded, that 
 when capital enlists science into her service the re- 
 fractory hand of labor will always be taught 
 docility." '"■ 
 
 If Ure explained the origin of an industrial reserve 
 army. Professor Merivale, whose writings Marx 
 studied, suggested the industrial reserve army as an 
 indispensable condition for modern industry. If as a 
 
 *" Senior, Letters on the Factory Acts (London, 1837), pp. 
 
 13, 14- 
 ^^ Ure, op. cit., pp. 368-370 et passim. 
 
THEORY OF INCREASING MISERY 113 
 
 result of bad times the unemployed should emigrate 
 to some other country, reasoned Merivale, then with 
 the return of prosperity there will not be a sufficient 
 supply for the increased demand for labor. The fac- 
 tory hands may get better wages; they may breed, 
 according to Malthus, more freely; but still, he con- 
 tinues, " however rapid reproduction may be, it takes, 
 at all events, the space of a generation to replace the 
 loss of adult labor. Now, the profits of our manu- 
 facturers depend mainly on the power of making use 
 of the prosperous moment when demand is brisk, and 
 thus compensating themselves for the interval during 
 which it is slack. This power is secured to them only 
 by the command of machinery and of manual labor. 
 They must have hands ready for them, they must be 
 able to increase the activity of their operations when 
 required, and to slacken it again, according to the state 
 of the market." ^^ This was of course Marx's point 
 of view. The economic implications of commercial 
 depressions Marx could not overlook. On the com- 
 mercial crisis Marx rested his hope of the final cata- 
 clysm of capitalist society. The analysis of industrial 
 crises was perhaps the chief contribution of Marx's 
 French predecessors, Fourier and Sismondi,^^ which 
 Marx, as usual, gladly acknowledged.' 
 
 24 
 
 ^'^ H. Merivale, Lectures on Colonisation and Colonies (1841), 
 vol. i, p. 146. 
 
 ^^ Ch. Andler, Le Manifeste Communiste, vol. ii, Introduction 
 historique et commentaire (Paris, 1901), pp. 99-102. 
 
 "* Menger and some other writers have wasted a good deal 
 
114 MARXISM VERSUS SOCIALISM 
 
 One can therefore easily imagine how little use 
 Karl Marx had from this point of view for the wage- 
 fund apologists, whose sentiments may be summed 
 up in Harriet Martineau's advice to the laboring 
 class : '' We manufacturers do what we can, whilst we 
 are increasing that capital on which you must subsist, 
 and you must do the rest by accommodating your 
 numbers to the means of subsistence ! " ^^ Marx's 
 scorn for Malthusianism and for the wage-fund the- 
 ories was, however, intellectual rather than moral. He 
 had, as we have seen, as little hope for the rise of 
 the laboring class as any of his contemporaries. But 
 he could not assume that low wages are due to over- 
 population, that after the population has been deci- 
 mated wages rise, that with the rise of wages the 
 population increases and so on. " A beautiful mode 
 of motion this for developed capitalist production ! " 
 he exclaims. '' Before, in consequence of the rise of 
 
 of time in trying to demonstrate the sources from which Marx 
 borrowed his system. In literary matters Marx was extremely 
 punctilious. His erudition was colossal, and wherever he was 
 conscious of borrowing an idea he invariably acknowledged it. 
 Apart from such acknowledged borrowings he was unconsciously 
 influenced, without doubt, by many writers and by many political 
 and social occurrences, and from the psychological and the his- 
 torical points of view it is interesting to trace these influences ; 
 but it is folly to search for a predecessor from whom Marx 
 borrows his system. There is not a single separate idea in the 
 system of Marx which was not formulated or suggested by 
 previous writers, but the combination of these ideas in one 
 colossal structure is Marx's own achievement. 
 *^ Harriet Martineau, The Manchester Strike (1842), p. loi. 
 
THEORY OF INCREASING MISERY 115 
 
 wages, any positive increase of the population really 
 fit for work could occur, the time would have been 
 passed, again and again, during which the industrial 
 campaign must have been carried through, the battle 
 fought and won." ^^ 
 
 On the other hand the wage- fund theory was not 
 without influence upon Marx, especially since in the 
 ultimate result — the assumed impossibility of any rise 
 of the working class — Marx was entirely in accord 
 with his contemporaries and predecessors. Thus, in 
 somewhat different words, Marx re-states the classical 
 theory, emphasizing the expansion and contraction not 
 of population but of production : " Accumulation 
 slackens in consequence of the rise of the price of 
 labor, because the stimulus of gain is blunted. The 
 rate of accumulation lessens; but with its lessening the 
 primary cause of that lessening vanishes, i.e., the dis- 
 proportion between capital and exploitable labor- 
 power. The mechanism of the process of capitalist ^ 
 production removes the very obstacle that it tern- ■ 
 porarily creates." ^^ In other words, since in capital- 
 istic society the laborer exists for the increase of ex- \ 
 isting values and not vice versa, every rise in wages ' 
 which will endanger the continual expansion of capital 
 is excluded.^^ With the accumulation of capital the 
 proportion of constant to variable capital changes, i.e.. 
 
 ^* Marx, Capital, vol. i, p. 652. 
 ^^ lUd., p. 633. 
 
 28 
 
 Ihid., p. 634. 
 
ii6 MARXISM VERSUS SOCIALISM 
 
 the amount of capital invested in plant and machinery 
 in relation to the amount spent on wages is not as 
 it was originally — not, let us say, i : i, but 2:1, 3:1, 
 4:1, 6:1, 8:1, etc. Since the demand for labor is 
 determined not by the amount of capital as a whole, 
 but by its " variable " constituent alone, i.e., by the 
 amount spent on wages, the demand for labor falls 
 progressively with the increase of the total capital, the 
 largest part of which is now being transformed into 
 means of production, i.e., machinery, etc.^^ Machinery 
 and other improved means of production, as we have 
 seen, create a surplus population. " The laboring pop- 
 ulation therefore produces, along with the accumulation 
 of capital produced by it, the means by which itself 
 is made relatively superfluous, is turned into a relative 
 surplus population; and it does this to an always in- 
 creasing extent. This is a law of population peculiar 
 to the capitalist mode of production." ^^ 
 
 But the surplus population, the industrial reserve 
 army, as we have seen, is itself a lever of capitalistic 
 accumulation, in fact a condition of existence of the 
 capitalist mode of production. The course character- 
 istic of modern industry — let us say a decennial cycle 
 of average activity, production at high pressure, crisis 
 and stagnation — depends upon the existence of an in- 
 dustrial army, the greater or lesser absorption of 
 which at any time corresponds to the momentary de- 
 gree of productive activity. In periods of stagnation, 
 
 ^^ Ibid., p. 643. "" ^bid., p. 645. 
 
THEORY OF INCREASING MISERY 117 
 
 the active labor army is weighed down by the indus- 
 trial reserve army. In times of prosperity the reserve 
 army still holds the pretensions of labor in check. It 
 is thus the pivot upon which the law of demand and 
 supply of labor works. Pauperism, pauperism on an 
 ever-increasing scale, is therefore a necessary part of 
 the system ; it enters into the faux frais of capitalistic 
 production. And Marx formulates his theory of in- 
 creasing misery as follows : 
 
 " The folly is now patent of the economic wisdom 
 that preaches to the laborers the accommodation of 
 their number to the requirements of capital. The 
 mechanism of capitalist production and accumulation 
 constantly affects this adjustment. The first word of 
 this adaptation is the creation of a relative surplus 
 population, or industrial reserve army. Its last word 
 is the misery of constantly extending strata of the | 
 active army of labor, and the dead weight of pau- 1 
 perism. 
 
 " The law by which a constantly increasing quantity 
 of means of production, thanks to the advance in the 
 productiveness of social labor, may be set in move- 
 ment by a progressively diminishing expenditure of hu- 
 man power, this law, in a capitalist society, where the 
 laborer does not employ the means of production but 
 the means of production employ the laborer, undergoes 
 a complete inversion and is expressed thus : the higher 
 the productiveness of labor, the greater is the pressure 
 of the laborers on the means of employment, the more 
 
ii8 MARXISM VERSUS SOCIALISM 
 
 precarious, therefore, becomes their condition of exist- 
 ence, viz., the sale of their own labor power for the 
 increasing of another's wealth, or for the self-expan- 
 sion of capital. The fact that the means of produc- 
 tion and the productiveness of labor increase more 
 rapidly than the productive population, expresses 
 itself, therefore, capitalistically in the inverse form, 
 that the laboring population always increases more 
 rapidly than the conditions under which capital can 
 employ this increase for its own self-expansion. . . . 
 Within the capitalist system all methods for raising 
 the social productiveness of labor are brought about 
 at the cost of the individual laborer; all means for 
 development of production transform themselves into 
 means of domination over and exploitation of the pro- 
 ducers; they mutilate the laborer into a fragment of 
 a man, degrade him to the level of an appendage to a 
 machine, destroy every charm in his work and turn it 
 into a hated toil; they estrange from him the intel- 
 lectual potentialities of the labor process in the same 
 proportion as science is incorporated in it as an inde- 
 pendent power; they distort the conditions under which 
 he works, subject him during his labor process to a 
 despotism the more hateful for its meanness; they 
 transform his lifetime into working time, and drag 
 his wife and child beneath the wheels of the Juggernaut 
 of Capital. But all methods for the production of 
 surplus value are at the same time methods of accumu- 
 lation; and every extension of accumulation becomes 
 
THEORY OF INCREASING MISERY 119 
 
 again a means for the development of these methods. 
 It follows therefore that in proportion as capital ac- 
 cumulates, the lot of the laborer, be his payment high 
 or low, must grow worse. The law, finally, that al- 
 ways equilibrates the relative surplus population or 
 industrial reserve army to the extent and energy of 
 accumulation, this law rivets the laborer to capital 
 more firmly than the wedges of Vulcan did Prome- 
 theus to the rock. It establishes an accumulation of 
 misery, corresponding with accumulation of capital. 
 Accumulation of wealth at one pole is therefore at 
 the same time accumulation of misery, agony of toil, 
 slavery, ignorance, brutality, mental degradation, at 
 the opposite pole." ^^ 
 
 This is Marx's theory of increasing misery. At the 
 end of the first volume of his Capital, summing up and 
 giving an account of the general historical tendencies 
 of accumulation, he clearly indicates whither the in- 
 creasing misery of the working class is bound to lead. 
 Along with the concentration of industry and central- 
 ization of capital " grows the mass of misery, oppres- 
 sion, slavery, degradation, exploitation; but with it 
 too grows the revolt of the working class, a class al- 
 ways increasing in numbers, and disciplined, united, 
 organized by the very mechanism of the process of 
 capitalist production itself." ^^ 
 
 Such is the doctrine, a doctrine embracing a theory 
 of population and a law of wages, and formulating 
 
 " Marx, Capital, vol. i, pp. 660, 661. "Ibid., p. 789. 
 
I20 MARXISM VERSUS SOCIALISM 
 
 a tendency which leads inevitably and necessarily to 
 a social revolution and socialism. It is undoubtedly 
 an ingenious doctrine; its critique of Malthusianism 
 and of wage-fund theories is as a whole well taken; 
 yet it was destined to share the fate of preceding eco- 
 nomic doctrines. Life in its development has betrayed 
 them and left them behind. And their value is now 
 but that of historical monuments. 
 
 It has already been pointed out that the Marxian 
 theory which we are now discussing is framed on the 
 presupposition of consistent individualism, non-re- 
 sistance on the part of the laboring class until no 
 alternative to revolution is left, non-interference on 
 the part of the state, with economic life reduced to a 
 mechanical entity, till the very mechanism of economic 
 life makes the existent state impossible. Were it not 
 for the circumstance that Marx witnessed the intro- 
 duction of the factory acts and the resumption of 
 social control on the part of the state, his theory would 
 have been open to criticism only as defective in its 
 psychology. Considering that he lived to see these 
 changes, his theory is open to sharper criticism: it 
 dealt with a fictitious society, and the result was a 
 fictitious doctrine, based on the facts as they had 
 been, but unrelated to the facts as they were, and 
 therefore without claim to reality and truth. 
 
 It is indeed evident that Marx saw how trade 
 unionism alone might undermine and render worthless 
 his wage law and his whole theory of increasing 
 
THEORY OF INCREASING MISERY 121 
 
 misery. He wrote : " As soon, therefore, as the la- 
 borers learn the secret, how it comes to pass that in 
 the same measure as they work more, as they produce 
 more wealth for others, and as the productive power 
 of their labor increases, so in the same measure even 
 their function as a means of the self-expansion of 
 capital becomes more and more precarious for them; 
 as soon as they discover that the degree of intensity of 
 competition among themselves depends wholly on the 
 pressure of relative surplus population; as soon as by 
 trades unions, etc., they try to organize a regular co- 
 operation between employed and unemployed in order 
 to destroy or to weaken the ruinous effects of this 
 natural law of capitalistic production on their class, 
 so soon capital and its sycophant, political economy, 
 cry out at the infringement of the ' eternal ' and, so 
 to say, * sacred ' law of supply and demand. Every 
 combination of employed and unemployed disturbs the 
 ' harmonious ' action of this law." ^^ So Marx ac- 
 knowledged that trade unionism might weaken or 
 even destroy the " natural law " of wages. And that 
 unionism has done it is beyond question. Organized 
 labor has succeeded in steadily improving its living 
 conditions. In 1892, in his preface to the second edi- 
 tion of his book on the working class in England, 
 Frederick Engels had to acknowledge it and sadly to 
 admit the fact that, with the improved conditions, the 
 revolutionary spirit of the Chartist epoch had sub- 
 
 " Marx, Capital, vol. i, p. 655. The italics are mine. 
 
122 MARXISM VERSUS SOCIALISM 
 
 sided. He wrote : *' The engineers, the carpenters, 
 joiners and bricklayers are each of them a power, to 
 that extent that, as in the case of the bricklayers and 
 bricklayers' laborers, they can even successfully resist 
 the introduction of machinery. That their condition 
 has remarkably improved since 1848 there can he no 
 doubt, and the best proof of this is the fact that for 
 more than fifteen years not only have their employers 
 been with them, hut they with their employers, upon 
 exceedingly good terms. They form an aristocracy 
 among the working class ; they have succeeded in en- 
 forcing for themselves a relatively comfortable posi- 
 tion and they accept it as final. They are the model 
 workingmen of Messrs. Leone Levi and Giffen, and 
 they are very nice people indeed nowadays to deal 
 with, for any sensible capitalist in particular and for 
 the whole capitalist class in general." ^* The " nat- 
 ural law " of capitalist production had failed to work. 
 Not only was misery not on the increase, but the con- 
 ditions of the so-called aristocracy of labor, as Engels 
 himself acknowledged, had remarkably improved. 
 
 There is also an official ex cathedra statement of 
 Marx in regard to this matter, a statement which 
 opens up an extremely interesting psychological ques- 
 tion. Marx published the first volume of his Capital 
 in 1867. In it he developed his theory of increasing 
 misery. Yet in 1864, while he was elaborating that 
 
 ^* Fr. Engels, The Condition of the Working Class in Eng" 
 land in 1844 (London, 1892), p. xv. The italics are mine. 
 
X 
 
 THEORY OF INCREASING MISERY 123 
 
 volume, he openly abandoned this theory. In his 
 book, it must be remembered, this theory is a central 
 doctrine. Not only does it embody his theory of popu- 
 lation and his wage law, but upon it is based his pro- 
 gressively intensified class-struggle doctrine; and, fur- 
 thermore, it is a vital part of his theory of the inevita- 
 ble catclysm of capitalistic society. The statement 
 just made, that he abandoned the increasing misery 
 theory in 1864, is based on what he said in his inaug- 
 ural address before the International Workingmen's 
 Association in that year : " After a thirty years' war 
 conducted with wonderful endurance, the English 
 working class succeeded in utilizing a temporary clash 
 between the landed aristocracy and the moneyed aris- 
 tocracy, and the ten-hour bill was put through. 
 Everybody acknowledges now its significant physical, 
 moral and intellectual advantages for the working 
 class, which are chronologically now recorded in the 
 semi-annual reports of the factory inspectors. The 
 majority of the continental governments feel them- 
 selves also obliged to introduce the English factory 
 acts with greater or less diminishing, and the 
 British Parliament is compelled to enlarge from 
 year to year the sphere of influence of the factory 
 acts. The wonderful results of this labor measure 
 were of more than mere practical significance. The 
 notorious mouthpieces of the British bourgeoisie, 
 scholars like Dr. Ure, Professor Senior and wiseacres 
 of the same type, prophesied and proved to their own 
 
124 MARXISM VERSUS SOCIALISM 
 
 heart's satisfaction that any legal limitation of the 
 working day would chime the death hour of British 
 industry — an industry which like a vampire could 
 thrive only on blood, children's blood above all. The 
 struggle for the legal limitation of the working day 
 was the more bitter, because it was not merely a check 
 upon individual greed, but also a direct intervention 
 in the great battle waged between the blind law of 
 supply and demand — the political economy of the 
 bourgeois — and the principle of social regulation of 
 production, which is the quintessence of the political 
 economy of the laboring class. And therefore the ten- 
 hour bill was not only a great practical success, it was 
 the victory of a principle. In the bright sunlight of 
 day the bourgeois political economy was here van- 
 quished for the first time by the political economy of 
 the working class." ^^ Thus Marx himself threw over- 
 board his theory of increasing misery. The victory of 
 the new principle meant the defeat of the principle 
 upon which the whole Marxian theory rests, the crum- 
 bling of his whole economic system, of all his eco- 
 nomic proofs and evidences of the inevitable dies irae, 
 of the cataclysm of our whole economic organization. 
 The foundation upon which Marx's entire work was 
 built, the inevitable laissez faire, Marx himself ac- 
 
 " Inaugural Address delivered by Marx, September 28, 1864, 
 in St. Martin's Hall. Der Vorhote, politische und sozialokono- 
 mische Zeitschrift, Centralorgan der Sektionsgruppe deutscher 
 Sprache der Internationalen Arbeiterassociation, redigirt von 
 JoH. Phil. Becker (Genf. 1866), pp. 38-39- 
 
THEORY OF INCREASING MISERY 125 
 
 knowledged to have been washed away even before his 
 work was ready for print, before he finished its archi- 
 tectural details. 
 
 Anybody who studies the first volume of Capital can 
 see there the unconscious conflict of the two principles, 
 — on one hand the elaboration of a purely economico- 
 mechanic system, not as a theoretical possibility but 
 as an actual tangible reality predestined to run itself 
 to ruin in its own course; and on the other hand the 
 acknowledgment of the salutary and modifying effects 
 of social control, which determines the character of; 
 the economic phenomena. 
 
 If the Marxian theory were a " static state " theory, 
 any tendency indicating the direct opposite of what 
 the theory claims could be classed by the Marxists as 
 one of those " slight " deviations of a temporary char- 
 acter due perhaps to man-made law, which is after all 
 of little concern to truth everlasting. But Marx's just 
 claim to fame rests precisely on his refusal to traffic 
 in eternal verities. His economic laws are laws of 
 capitalist production only. Every economic epoch has 
 its own laws, but they are laws of development, laws 
 actually governing the economic tendencies. If, there- 
 fore, the actual facts flatly contradict the theory, as 
 they do, there remains but the alternative either to 
 deny the facts or to repudiate the theory. 
 
 Both alternatives have found their champions. 
 Some imaginative and enterprising socialists, not 
 weighed down with too much learning, deny the facts 
 
126 MARXISM VERSUS SOCIALISM 
 
 of the case; others claim that the doctrine of increasing 
 misery is but a minor and non-essential point, which 
 could and should be dropped as immaterial and irrele- 
 vant to the Marxian theory and to scientific socialism. 
 So for instance Franz Mehring, a Marxist, justly held 
 in high esteem by the socialists of his country on ac- 
 count of his learned historical works, makes the curi- 
 ous statement that the theory of increasing misery is 
 but a relic inherited by Marx from the bourgeois po- 
 litical economy, which has lost long ago what little 
 sense and justification it might once have had and 
 which has nothing in common with orthodox Marx- 
 ism.^® Schonlank, a German socialist of marked abil- 
 ity, frankly admits that the theory of increasing 
 misery is untenable." The same is the attitude of 
 
 '® " How long the party will continue to find satisfaction in 
 these discussions we do not know, but even were it to do so for 
 as many years in the future as it already has in the past, not 
 a particle of use would arise from it. And for the simple reason 
 that the theory of increasing misery long since lost whatever 
 import and acceptance it may have had in the past. A product 
 of bourgeois political economy when that was still unbiassed, it 
 has nothing to do with ' orthodox Marxism.' " Mehring, " His- 
 torisches zur Verelendungstheorie," Neue Ze'it, Jahrgang XX 
 (Stuttgart, 1902), vol. i, pp. 164, 165. 
 
 ^' " The theory of misery in the absolute sense which long 
 was current in our party, and the theory of constantly increasing 
 misery which still finds expression in the first part of the Erfurt 
 program, are no longer tenable ! " Leipsiger V olkszeitung , 1897, 
 quoted in the ** Bernstein-Debatte " in Hanover. Protokoll uher 
 die V erhandlung en des Parteitages der sosialdemokratischen 
 Partei Deutschlands, abgehalten zu Hannover, Oktober 9-14, 
 1899, pp. 137, 138. 
 
THEORY OF INCREASING MISERY 127 
 
 David, who urges his comrades to acknowledge the 
 mistake.^^ 
 
 And yet the true-blue Marxists are unwilling to 
 drop this theory. They realize that in dropping it 
 they are dropping Marxism, but they do not realize 
 that in interpreting it away they are interpreting Marx- 
 ism away. The whole construction of Marx's Capital 
 s leads up to the doctrine of increasing misery. In 
 rejecting this theory, one rejects also Marx's theory 
 of population, his theory of wages, his theory of ac- 
 cumulation of capital. And if what is left be Marx- 
 ism, it is Marxism with Marx left out. Not only is 
 his theory shattered, but what rational foundation is 
 there left for his vision and hope, his goal and in- 
 spiration — the breakdown of capitalism and the social 
 revolution ? These conceptions of Marx as well as his 
 idea of the general crisis are based upon the pro- 
 gressively increasing misery of the working class." 
 
 39 
 
 ^^ "Let us not play at hide-and-seek; but let us quietly explain: 
 the position of the program in regard to increasing misery is a 
 mistake." Ibid., p. 138. 
 
 " So Peter Struve points out " that the theory of a cataclysm 
 as a theory of a general crisis necessarily leads back to the 
 doctrine of increasing misery." Peter von Struve^ " Die 
 Marx'sche Theorie der Sozialen Entwicklung," Braun's Archiv 
 fiir soziale Gesetzgehung und Statistik, vol. xiv, 1899, p. 695. 
 
CHAPTER VII 
 
 DATA RELATING TO THE STATUS OF THE 
 WAGE-EARNER 
 
 Since the Marxian system cannot without wrecking 
 its theory disavow the doctrine of increasing misery 
 of wage-earners, it devolves upon us to test this doc- 
 trine by the actual facts of economic life, i.e., by wage 
 statistics. Relatively easy as it is to obtain figures of 
 wages for long periods, their scientific utilization pre- 
 sents considerable difficulties. The data have invaria- 
 bly been gathered and controlled by different methods; 
 the money wage of the time and the purchasing power 
 of the wage varied greatly. The task is therefore not 
 a grateful one, and no historical statements of wages 
 based upon miscellaneous statistics can lay claim to 
 mathematical exactness. And yet in spite of all the 
 inevitable inaccuracies, these statistical data suffice to 
 establish the general tendencies beyond a shadow of 
 reasonable doubt. 
 
 A valuable supplement to the ordinary statistics of 
 workingmen's earnings are the budgets of the wage- 
 earner's expenditures. Although budget literature is 
 now being traced back to Sir William Petty and his 
 
 Political Arithmetic, for our purposes only material 
 
 128 
 
STATUS OF THE WAGE-EARNER 129 
 
 of much later date is of interest. We may start with 
 a contemporary of the Communist Manifesto — Dr. 
 Alexander v. Lengerke's Landliche Arb eit erf rage/- 
 which is a very important volume. The itemized ex- 
 penditures are estimates, but they are carefully and 
 minutely considered estimates submitted at the request 
 of the Prussian government by 185 local agricultural 
 societies, and they all relate to the probable ex- 
 penditures of peasant families consisting of five 
 members. 
 
 This investigation embraces agricultural laborers 
 and peasants who supplement their income from farm- 
 ing by outside agricultural labor. One hundred and 
 fifteen thalers was the average income of such families 
 throughout Prussia in 1848; ^ and on an average not 
 less than 96 per cent of their budget went for the satis- 
 faction of the elementary physical wants: food, shel- 
 ter, clothing, fuel and fodder. The remaining 4 per 
 cent was spent on " Abgaben an Staat, Kirche, Schule." 
 Since taxes may well be estimated at about 3 per cent, 
 it left but I per cent for non-physical wants. ^ 
 
 ^ Die landliche Arbeiterfrage. Beantwortet durch die bei dem 
 koniglichen landes-Oekonomie-Collegium aus alien Gegenden der 
 preussischen Monarchie eingegangenen Berichte landwirtschaft- 
 licher Vereine ilber die materiellen Zustdnde der arbeitenden 
 Classen auf dem platten Lande. Berlin. Im Bureau des konigl. 
 Ministeriums fiir landwirtschaftliche Angelegenheiten 1849. The 
 volume is rare, but there is a copy in the Library of Congress. 
 
 ^ Ibid., p. 13. 
 
 ^ See also on the subject, Ernst Engels, Die Lebenskosten 
 Belgischer Arbeiter-Familien, Dresden, 1905, p. 19. 
 
I30 MARXISM VERSUS SOCIALISM 
 
 An enquete on similar lines covering the whole of 
 Germany was undertaken in 1872. The results were 
 published by Professor von der Goltz in 1875/ ^^^ 
 show an extraordinary material improvement of the 
 living conditions of the agricultural laborers. The ex- 
 penditures of a family of five were in Prussia Mk. 
 632.7 instead of Mk. 315.30 as in 1848, and through- 
 out Germany the average expenditure amounted to 
 Mk. 717.^ 
 
 The great material advance of the agricultural la- 
 
 * Die Lage der Idndlichen Arheiter im Deutschen Reich. Unter 
 Mitwirkung von Prof. Richter, v. Langsdorff, erstattet von Dr. 
 Th. Frh. von der Goltz, Professor an der Universitat Konigsberg, 
 Berlin, 1875. (A copy in the Cornell University Library.) 
 
 ^ Engels, op. cit., p. 19. " With regard to intellectual culture 
 progress may be noted more frequently than with regard to 
 morals. . . . 
 
 *' With regard to the material situation. Here an almost gen- 
 eral improvement in the material condition of the agricultural 
 laborers is proved, but at the same time it is evident that they 
 have not become more economical." . . . 
 
 Dr. V. d. Goltz goes on to show that within the last 30 years 
 prices increased as follows: rye, 25 per cent, potatoes 31 per 
 cent, butter 48 per cent and meat 53 per cent ; but wages increased 
 in most provinces in the neighborhood of 100 per cent while 
 many articles of consumption (especially " Colonialwaaren ") de- 
 creased in price. He also reminds us of the fact that the products 
 which increased in price are chiefly produced by the agricul- 
 tural laborers themselves on their plots of land, or they receive 
 it as a " Naturaldeputat " from their employer. Professor von 
 der Goltz therefore comes to the conclusion : " After what has 
 been said we are obliged to emphasize the fact that the statement 
 which was made with such unanimity in the committee in regard 
 to the actual improvement in the material condition of the agri- 
 cultural laborer was thoroughly warranted." Th. von der Goltz, 
 loc. cit., pp. 496, 497, 498. 
 
STATUS OF THE WAGE-EARNER 131 
 
 borer and the rise in his standard of Hving were re- 
 ported in every part of the German Empire. 
 
 And yet, as we have previously pointed out, the 
 Communist Manifesto must not be regarded as a 
 rhetorical exercise of a mere demagogue. In the midst 
 of its fiery revolutionary eloquence the Manifesto 
 shows more regard for facts than many a learned 
 work of its time. The Manifesto is in truth but a 
 reflection of the effects of early industriaHsm ; it was 
 written under the fresh impression of hunger riots 
 of the Silesian weavers, which Heine and Hauptmann 
 have immortalized.® It is therefore especially for- 
 tunate that one of the most careful budget studies 
 should cover the economic status of the Silesian textile 
 workers during the period of 1865-1874. This study 
 was made by Karl Schwedler,^ the manager of a local 
 cooperative society (Consumverein) . All the prices 
 were taken from the actual account books, the sums 
 spent minutely itemized, the increase in rent not over- 
 looked : in short the study is exceptionally trustworthy. 
 Here are the results : Schwedler's tables show that in 
 
 ' Heine's famous poem, " Die Weber," begins with these lines : 
 " Im diistren Auge keine Thrane, Sie sitzen am Webstuhl und 
 fletschen die Zahne: Deutschland, wir weben dein Leichentuch, 
 Wir weben hinein den dreifachen Fluch, Wir weben, wir weben ! " 
 (" No tears in their sad eyes, they sit at the loom and grimly 
 smile; Germany, we weave your shroud, into it we weave a 
 threefold curse, we weave, we weave! ") 
 
 ' Karl Schwedler, " Arbeitslohne in der Schlesischen Textil- 
 Industrie und Unterhaltsbedarf in den letzten 10 Jahren." In the 
 Arheiterfreund, vol. xii, Berlin, 1875, pp. 149 ff. 
 
132 
 
 MARXISM VERSUS SOCIALISM 
 
 the ten years prices advanced 35 per cent. Wages on 
 the other hand advanced, for men, 60 per cent ; women, 
 29 per cent ; girls, 50 per cent ; boys, 50 per cent.^ 
 
 What percentage of these increasing wages forms a 
 surplus over the merely physical necessities of life and 
 the allowance for its fuller development? An inter- 
 esting table, which answers this question, is to be 
 found in a recent curious Russian book by S. Solncev.® 
 Solncev used the Berlin workingmen's budgets col- 
 lected in 1879, 1896 and 1900 by Berlin statisticians. 
 
 1. Rent 
 
 2. Furniture 
 
 3. Fuel 
 
 4. Light 
 
 5. Clothing, wash, etc. 
 
 6. Food 
 
 7. Drinks and food in 
 
 restaurants, etc.. 
 
 8. Care of health, etc. 
 
 A. Expenditures of i 
 
 physical nature . . . 
 
 B, Expenditures non 
 
 physical , 
 
 Total 
 
 Expenditures per Person in a Family 
 
 In Marks 
 
 1879 
 
 52.0 
 
 6.8 
 
 19.7 
 
 5.0 
 
 397 
 
 156.7 
 
 17.0 
 7-4 
 
 304-3 
 16.1 
 
 320.4 
 
 60.6 
 
 ? 
 
 16.3 
 4.2 
 
 171-9 
 
 20.5 
 5-9 
 
 322.7 
 38.2 
 
 360.9 
 
 1900 
 
 76.5 
 ? 
 
 18.9 
 
 5-7 
 
 49-7 
 
 203.2 
 
 9-5 
 4.8 
 
 368.3 
 81.3 
 
 449.6 
 
 Per Cent to all 
 Expenditures 
 
 1879 
 
 16.3 
 
 2.2 
 
 6.0 
 
 1.6 
 
 12.4 
 
 48.9 
 
 5.3 
 2.3 
 
 95-0 
 5-0 
 
 100. 
 
 1896 
 
 17-3 
 
 ? 
 
 4-7 
 1.2 
 
 lO.O 
 
 48.1 
 
 5-8 
 2.0 
 
 89.4 
 10.6 
 
 100. 
 
 1900 
 
 17.01 
 
 ? 
 
 4.18 
 
 1.25 
 
 11.06 
 
 45.01 
 
 2.16 
 1.03 
 
 81.73 
 18.27 
 
 100. 
 
 ® Karl Schwedler, loc. cit., p. 153. 
 
 ' S. Solncev, Rabachie budgeti v svyazi s teoriey " obednenia' 
 1907, P- 69. 
 
STATUS OF THE WAGE-EARNER 133 
 
 Non-physical expenditures, which practically did not 
 exist in agricultural districts in 1848, have gradually 
 risen from 5 per cent in 1879 to 18 per cent in 1900 
 in family households. In 1903 the non-physical ex- 
 penditures of a Berlin workingman's family, number- 
 ing 4 persons, were already fluctuating from 18 to 
 25 per cent of the total expenditures, and those of a 
 bachelor averaged as high as 28 per cent.^*^ 
 
 The admirable work of Professor Ashley on The 
 Progress of the German Working Classes will give us 
 the reason for such an extraordinary change. Every 
 side of Germany's economic life is discussed by Mr. 
 Ashley, and they all testify to the gradual but steady 
 improvement of the workingmen. In Krupp's works, 
 for instance, the average wage has risen, between 
 1871-1900, 57 per cent, while, owing to a special hous- 
 ing policy, rent actually decreased. During the same 
 period the price of bacon increased but 2 per cent, that 
 of beef II per cent, veal 21 per cent, that of potatoes 
 decreased 31 per cent, that of bread decreased 27 per 
 cent.^^ The annual earnings in the Hamburg ship- 
 building yards show the following percentage of in- 
 crease : 
 
 1880-1890 1890-1899 1880-1899 
 
 Shipbuilders 7.2 13.5 21.7 
 
 Machinists 194 13.3 35-3 
 
 Helpers 30.4 i4-5 49-3 
 
 Boilermakers 28.00 13.0 44.7 
 
 *" SOLNCEV, op. cit., p. 38. 
 
 " W. J. Ashley, The Progress of the German Working Classes 
 in the Last Quarter of a Century. 1904, p. 91. 
 
134 MARXISM VERSUS SOCIALISM 
 
 And this general rise took place in spite of the intro- 
 duction of the ten-hour day in the middle of the 
 eighties. ^^ The approximate average wage of the coal 
 heavers in Westphalia was in 
 
 1865 Mk. 600-700 
 
 1874 900-1,000 
 
 1886-1888 800-900 
 
 1890 1,100-1,200 
 
 1898-1899 1,300-1,500 '' 
 
 The deposits in savings banks in Saxony increased 
 from Mk. 114.65 per head of the population in 1880 
 to Mk. 222.03 in 1900.^* In Prussia the number of 
 savings bank depositors in 1875 was 2,209,101, the 
 amount deposited 1,112 millions; in 1898, 8,049,599 
 depositors and the amount deposited 5,287 millions.^^ 
 The consumption of all ordinary articles of food in- 
 creased greatly during the same period throughout 
 Germany. The consumption of wheat rose from 51.6 
 kilos per head in 1879-84 to 74.4 kilos in 1895-96, 
 that of sugar from 6.4 kilos in 1871-81 to 10.7 kilos 
 in 1891-96, that of rice from 1.55 kilos in 1871-75 to 
 2.49 kilos in 1891-95, of petroleum 1.87 kilos in 
 1886-90 to 16.14 kilos in 1896.^^ The consumption of 
 meat increased in Prussia from 18 kilos per head in 
 1867 to 37 kilos in 1897; in Saxony the consumption 
 of beef and pork increased from 22.2 kilos in i860 
 
 ^'Ibid., p. 93. ^* Ibid., p. 116. 
 
 "/&iU, p. 95. ^^ Ibid., p. 117. 
 
 ^® Ibid., pp. 120-122. 
 
STATUS OF THE WAGE-EARNER 135 
 
 to 43.1 kilos in 1900. The death rate decreased from 
 29.0 per 1,000 in 1870 to 20.6 in 1902/' the death rate 
 in Berhn from 31.89 in 1861-70 to 17.38 in 1903; the 
 number of suicides decreased from 31 per 100,000 in 
 1871-81 to 24.5 in 1897-1901;^^ the over-sea emigra- 
 tion decreased from 3.22 per cent of the population in 
 1884 to 0.40 per cent in 1900. The number of over- 
 crowded dwellings in Berlin with one heated room de- 
 creased from 195.5 P^r 1,000 in 1875 to 132.2 in 
 1895; with two heated rooms from 20.7 per 1,000 in 
 1875 to 10.9 in 1895; ii^ Frankfort, the number of 
 overcrowded dwellings with one heated room was, in 
 1885, 127.7 P^r 1,000, in 1895, 43; overcrowded 
 dwellings with two heated rooms in 1885, 20.3 per 
 1,000, in 1895, 7.8. 
 
 So much for the " increasing misery " in Germany. 
 Now let us turn to England. 
 
 Sir Robert Giffen in The Progress of the Work- 
 ing Classes in the Last Half Century gives us some 
 extremely interesting data on the subject, which we 
 shall take the liberty of quoting. Giffen's tables are 
 somewhat antiquated, but still interesting and in- 
 structive enough for our purposes. They were com- 
 piled about 1882/^ 
 
 *' Ihid., p. 130. 
 " Ihid., p. 132. 
 
 19 
 
 We are quoting from the American edition published by 
 G. P. Putnam's Sons, 1885, p. 5. 
 
136 
 
 MARXISM VERSUS SOCIALISM 
 
 Occupation 
 
 Carpenters . 
 Bricklayers 
 Masons 
 
 Miners 
 
 Pattern Weavers, etc 
 
 Wool Scourers 
 
 Male Spinners 
 
 Weavers •• 
 
 Warpers and Beamers 
 Winders and Reelers. 
 Weavers (Men) .... 
 Reeling and Warping 
 Spinning (Children^. 
 
 Place 
 
 Manchester . 
 
 Glasgow 
 
 Manchester . 
 
 Glasgow 
 
 Manchester . 
 
 Glasgow 
 
 Staffordshire 
 Huddersfield 
 
 Bradford ... 
 
 ^ 
 
 H W 
 
 
 H 
 
 'Z W 
 
 
 w 
 
 w w 
 
 
 H 
 
 
 
 
 
 Amount 
 
 •" < 
 
 01 <^ 
 
 
 H M 
 %> 
 
 5 
 
 
 ^ 
 
 ^H 
 
 
 24s. 
 
 34«. 
 
 lOS. 
 
 14s. 
 
 26s. 
 
 I2S. 
 
 24s, 
 
 3()S. 
 
 12s. 
 
 iss. 
 
 27s. 
 
 I2S. 
 
 24s. 
 
 29s. lod. 
 
 Ss. lod. 
 
 14s. 
 
 23s. 8d. 
 
 gs. 8d. 
 
 2s.8d.perday 
 
 4s. per day 
 
 IS. 4d. 
 
 i6s. 
 
 2SS. 
 
 gs. 
 
 17s. 
 
 22s. 
 
 SS. 
 
 25s. 6d. 
 
 3OS. 
 
 4s. 6d. 
 
 I2S. 
 
 26s. 
 
 14s. 
 
 17s. 
 
 27s. 
 
 lOS. 
 
 6s. 
 
 IIS. 
 
 ss. 
 
 8s. 3d. 
 
 20s. 6d, 
 
 I2S. 3d. 
 
 7s. gd. 
 
 iSs. 6d. 
 
 7s. gd. 
 
 4S. 6d. 
 
 lis. 6d. 
 
 7s. id. 
 
 WO 
 
 43 
 
 8S 
 
 50 
 
 80 
 
 24 
 
 69 
 
 50 
 
 55 
 
 30 
 
 20 
 
 lis 
 
 S8 
 
 83 
 
 ISO 
 
 100 
 
 160 
 
 Sir Robert Giffen's figures were indorsed by Sid- 
 ney Webb. He writes : 
 
 " There seems no reason to doubt, so far as con- 
 cerns the male worker, the general accuracy of Sir 
 Robert Giffen's conclusion that the rise in nearly all 
 the trades has been from 50 to 100 per cent. In some 
 of the building trades, for instance, wages have in 
 certain localities actually doubled during the present 
 century. The son of a carpenter in Scotland told me 
 that he remembered his father about 1850 regularly 
 bringing home 34/6 as his wage — not for one, but for 
 four weeks' work, the system of monthly pays not yet 
 having been abolished. It is true that this was in 
 the neighborhood of Inverness, but I mention the inci- 
 dent to recall the fact that wages have often risen 
 
STATUS OF THE WAGE-EARNER 137 
 
 most in obscure nooks and corners of the land which 
 have been opened up by those great levelers of wages 
 and prices — railways and the postal system. But even 
 in Glasgow the minutes of the energetic Joiners' 
 Union show that it was fighting hard between 1833- 
 1837 to get a standard rate of 21/ per week, as against 
 36/ at the present day, and the stone masons in Glas- 
 gow have improved their rate of pay from 5d per hour 
 in 1853, which is the earliest year for which I could 
 obtain the figures, to 8J^d per hour now. And if we 
 turn to quite another industry, I have ascertained the 
 rate of wages of enginemen at a small colliery in the 
 Lothians since the year 183 1. They begin at 11/ per 
 week, and rise steadily, though with numerous fluctua- 
 tions, to 23/4 in 1872, and no less than 33/3 per week 
 in 1892." '« 
 
 Of course rent has greatly increased in the last dec- 
 ades. So has meat increased in price, but meat 
 played practically no role in the workingman's diet 
 some fifty to sixty years ago. Pork advanced but 
 slightly in price; 8 lbs. of pork cost in 1840 4s. 3>4d., 
 in 1 88 1 4s. 6d. ; on the other hand many foodstuffs 
 have become much cheaper. For instance, the price 
 of 1 cwt. of sugar in 1839-40 was 68s. 8d., in 1882 
 21S. 9d. 
 
 That the increase in wages signified a tremendous 
 increase in real wages and not in mere money wages, 
 
 ^"Sidney Webb, Labor in the Longest Reign (1837-1897). 
 London, 1905, p. 4. 
 
138 MARXISM VERSUS SOCIALISM 
 
 is fully demonstrated by the almost incredible growth 
 in England's per capita consumption, which is after all 
 in the main workingman's consumption. Here is a 
 table of the quantities of the principal imported and 
 excisable articles retained for home consumption per 
 head of the total population of the United Kingdom : 
 
 1840 1881 
 
 Bacon and ham lbs. o.oi 13-93 
 
 Butter '* 1.05 6.36 
 
 Cheese " 0.92 5.77 
 
 Currants and raisins " 1.45 4.34 
 
 Eggs No. 3.63 21.65 
 
 Rice lbs. 0.90 16.32 
 
 Cocoa " 0.08 0.89 
 
 Corn, wheat and wheat flour .... " 42.47 216.92 
 
 Raw sugar " 15.20 58.92 
 
 Refined sugar " nil 8.44 
 
 Tea " 1.22 4.58 
 
 Tobacco " 0.86 1.41 
 
 Wine gals. 0.25 0.45 
 
 Spirits " 0.97 1.08 
 
 Malt " 1.59 1.91 
 
 Giffen is certainly right in calling these figures 
 *' wonderful." ^^ And everybody must agree with him 
 that such figures are the best evidence of diffused ma- 
 terial well-being among the masses. 
 
 But progress did not stop with the date of Giflfen's 
 investigation. Bowley's figures begin just where Gif- 
 fen's stop, namely in 1882. Here are the conclusions 
 of England's best statistician : ^^ 
 
 ^^ Giffen, loc. cit., p. 20. 
 
 ^^ A. L. BowLEY, Statistical Studies: relating to National 
 Progress in Wealth and Trade since 1882. London, 1904, p. 32, 
 
STATUS OF THE WAGE-EARNER 
 
 139 
 
 Average money wages, 1883-87, 
 taken for 100 
 
 Average prices, ditto 
 
 Average money income per 
 head of the population, ditto. 
 
 Consumption of commodities, 
 ditto 
 
 Percentage out of work 
 
 Number of adult male paupers 
 per 1,000 adult males 
 
 Number of adult female pau- 
 pers per 1,000 adult females. . 
 
 1883-1887 
 
 1888-1892 
 
 1893-1897 
 
 100 
 
 no 
 
 115 
 
 100 
 
 95 
 
 90 
 
 100 
 
 113 
 
 108 
 
 100 
 
 108 
 
 112 
 
 7.2 
 
 3.8 
 
 5-4 
 
 35 
 
 ZZ 
 
 38 
 
 42 
 
 36 
 
 35 
 
 i-igo* 
 
 130 
 92 
 
 120 
 
 120 
 
 3-5 
 
 31 
 29 
 
 The average real wages (that is wages, expressed 
 not in money, but in goods that can be purchased by 
 them) in the United Kingdom Bowley expresses as 
 follows, in percentages of the level of 1900: 
 
 Years 1830, '40, '50, '60, '70, '75, '80, '85, '90, '95, IQOO 
 
 Real Wages 45 50 50 55 60 70 70 72 84 93 100 
 
 and Bowley adds : " If this table is studied, it will be 
 found that the rate of increase in the last twenty years 
 has been greater than in any previous period of equal 
 length." '^ 
 
 I will not burden the reader with any further data 
 relating to the steady increase of well-being of the 
 English laboring class, although we could easily fill 
 a volume with such figures. We refer the more in- 
 quisitive to the Journal of the Royal Statistical So- 
 ciety, where they will find the information in Bowley's 
 admirable articles. 
 
 '^ Bowley, loc. cit., p. 33. 
 
140 MARXISM VERSUS SOCIALISM 
 
 We could not well close without reference to the 
 United States. The opinion is widespread that dec- 
 ades ago the laborer found here a country flowing 
 with milk and honey, but that since capitalism on a 
 large scale has developed, conditions have changed for 
 the worse, and that, historically considered, the situa- 
 tion of the working classes in America has deteriorated 
 rather than improved. 
 
 It does not seem to us that such a view can be sup- 
 ported by facts; the economist will certainly tend to 
 indorse the conclusions at which a man like Levasseur 
 arrived. In his Uoiivrier americain Levasseur writes : 
 " In the Population Frangaise I said, speaking of 
 wages: ' The doubling of wages in France in the last 
 sixty years is an average estimate based upon figures 
 which we have collected, and which we believe to be 
 correct. Like most averages, however, it may be dis- 
 puted. It is not difficult to find conflicting instances 
 here and there. . . . But the divergence of ex- 
 tremes does not invalidate a mean when the latter is 
 based upon a majority of returns.' And what I have 
 said in speaking of the greater part of the states of 
 Europe I now reafifirm in speaking of the United 
 States." ^* 
 
 There is no doubt whatsoever that the occupation 
 and exploitation of a new continent, a process which 
 has not yet come to a close, offered an unprecedented 
 
 ^* E. Levasseur, The American Workman. English translation 
 by T. S. Adams. Baltimore, 1900, pp. 287, 288. 
 
STATUS OF THE WAGE-EARNER 141 
 
 spectacle. Res nullius cedit primo occupanti. The 
 natur^ resources which were nobody's were becoming 
 somebody's, millions of prosperous homes were built 
 on the land which the sturdy pioneers of American 
 civilization had conquered. The reward of the most 
 enterprising and successful was wealth never known 
 of nor heard of in the past. Many, if not the ma- 
 jority, of the employers of to-day began as wage- 
 earners themselves. But those that have graduated 
 from the laboring class we are not considering here; 
 the masses that at the given time constituted and now 
 constitute the laboring class, form the object of our in- 
 quiry. Does or does not the condition of the working 
 class in America justify the doctrine of increasing 
 misery? — this is the question before us. 
 
 Some very interesting early statistical material was 
 gathered by the late Carroll D. Wright, while chief 
 of the Massachusetts Bureau of Statistics of Labor.^^ 
 These data, which are about as reliable as any early 
 statistics can be, show conclusively how much as a 
 rule we exaggerate the good old times. Scarce as labor 
 was at the dawn of American civilization, those whom 
 circumstances compelled to be laborers received very 
 meager pay. In Massachusetts in 1633 or thereabouts 
 the wages of a master carpenter and master mason 
 were about 33 cents a day ; of master tailors 27 cents 
 per day.^® The average price of a bushel of barley 
 
 ^^ Mass. Bureau of Statistics of Labor, Sixteenth Annual Re- 
 port, Boston, 1885. ''Ibid., p. 429. 
 
142 MARXISM VERSUS SOCIALISM 
 
 was then 67 cents, of corn 48 cents, of wheat 81 
 cents; a pair of men's shoes were worth in 1672 about 
 83 cents. " A skilled laborer made in a week's work 
 only enough," writes T. S. Adams, '' to buy about four 
 bushels of corn, between three and four bushels of 
 peas, or between two and three bushels of wheat. Two 
 and a half days' work was required to earn enough 
 to buy a pair of rough shoes." ^^ The wages towards 
 the end of the seventeenth century show no substantial 
 change. The wages of the middle of the eighteenth 
 century begin to show an increase, and they progress 
 steadily from that time on. In Carroll D. Wright's re- 
 port of 1885 we find the following data ^^ for the daily 
 wage. The agricultural laborers received in 1760 
 about 31 cents, in 1800 about 47 cents, 1830 about 80, 
 i860, $1.00, 1880, $1.31; blacksmiths in 1790, 69 
 cents, in 1820, 84 cents, 1830, $1.12, i860, $1.69, 
 1880, $2.28; carpenters 1780, 52 cents, 1830, $1.07, 
 i860, $2.03, 1880, $2.42; common laborers 1780, 37 
 cents, 1800, 62 cents, 1830, 79 cents, i860, 97 cents, 
 1880, $1.48; machinists 1840, $1.35, 1850, $1.62, i860, 
 $2.15, 1880, $2.49; masons 1780, 66 cents, 1830, $1.22, 
 i860, $1.53, 1880, $2.79; the wages of other occupa- 
 tions advanced in the same proportion. '' Consolidat- 
 ing and averaging the wages, . . . the general aver- 
 
 ^' Adams and Sumner, Labor Problems, 3d ed., New York, 
 
 1905, p. 505. 
 
 ^^ Mass. Bureau of Statistics of Labor, Sixteenth Annual Re- 
 port, Boston, 1885, pp. 454, 455. 
 
STATUS OF THE WAGE-EARNER 143 
 
 age increase in wages shown for the decade ending 
 with i860 as compared with that ending with 1830 is 
 52.3 per cent." This is Colonel Wright's conclusion.^^ 
 Consolidating the prices of various types of articles of 
 consumption during the same period, *' the general 
 average percentage of increase in prices is found to be 
 9.6 per cent," ^" figures sufficiently indicative of the 
 improved financial condition of the workingman. 
 
 In an elaborate review of wages and prices of the 
 period between i860- 1878 Carroll D. Wright comes 
 further to the conclusion that the ascertained relations 
 of wages and prices show " in 1878 an advance over 
 i860 of twenty-four and four-tenths per cent in aver- 
 age weekly wages, and an average advance in cost of 
 living of fourteen and a half per cent, which means 
 a pecuniary betterment of ten per cent in the general 
 condition of the workingman in Massachusetts in 
 1878 as compared with i860, no account being made 
 of the decrease in the hours of labor in many indus- 
 tries." '"- 
 
 The recent industrial development records an even 
 more substantial increase. Taking the year 1890 for 
 100 as a standard year, wages show the following 
 average rise throughout the United States in industry 
 and agriculture : 
 
 "** Mass. Bureau of Statistics of Labor, Sixteenth Annual Re- 
 port, Boston, 1885, p. 466. 
 '' Ibid., p. 467. 
 " Mass. Bureau of Statistics of Labor, Tenth Annual Report, 
 
 P- 95- 
 
144 
 
 MARXISM VERSUS SOCIALISM 
 
 Industry 
 Relative nominal wage 
 Real wage 
 
 Farm labor with board 
 Relative nominal wage 
 Real wage 
 
 1870 
 
 1875 
 
 1880 
 
 188s 
 
 i8qo 
 
 1895 
 
 87.3 
 
 88.7 
 
 Q2.6 
 
 97.8 
 
 100. 
 
 97-4 
 
 68.7 
 
 72. 5 
 
 82.8 
 
 q8.2 
 
 lOO.O 
 
 102.0 
 
 ? 
 
 Q0.8 
 
 83.8 
 
 9Q.I 
 
 100. 
 
 g6-5 
 
 ? 
 
 74-3 
 
 82.6 
 
 qo.5 
 
 lOO.O 
 
 lOI.O 
 
 igoo 
 
 103. 1 
 104.5 
 
 113.0 
 "6.3 
 
 This is an abbreviation of Adams and Sumner's 
 table/^ in explanation of which Adams writes: " The 
 year 1866 ushered in a new epoch, during which, it is 
 no exaggeration to say, the American workingman 
 advanced in a manner unprecedented in this country 
 in which steady progress has been the rule since the 
 establishment of the Union." ^^ 
 
 We regard it as superfluous seriously to argue fur- 
 ther on the subject of the increasing misery of the 
 American workingman. Those interested in the rise 
 of American wages will find all the details in the 
 Census reports, in the Aldrich Report (especially in 
 parts III and IV) and in the Bulletins of the Bureau 
 of Labor ;^* in these pages we do not feel at liberty 
 to tax the patience of the reader with further statistical 
 data. 
 
 We trust it is evident that the experience of all 
 
 ^^ Adams and Sumner, loc. cit, p. 514. 
 
 ^^ Ibid., p. 511- 
 
 "* Especially in Bulletin 77, Wages and Hours of Labor, 1890- 
 1907, and Retail Prices of Goods, 1890-1907. We call particular 
 attention to the tables on pp. 4 and 10. Interesting also is the 
 budget material in Bulletin 54, particularly the tables on pp. ii33 
 and 1 147. 
 
STATUS OF THE WAGE-EARNER 145 
 
 industrial countries without exception shows a steady 
 and unprecedented improvement in the conditions of 
 the working class. The tendency which was to lead to 
 a breakdown of our economic organization not only 
 broke down itself, but developed a counter-tendency 
 in exactly the opposite direction. 
 
 Yet what is the attitude of the theoretical leaders 
 of so-called scientific socialism? They lack the good 
 sense to acknowledge the facts, and are hedging behind 
 subterfuges and interpretations which, while seem- 
 ingly exonerating Marx on one point, reduce him to 
 the level of a nonentity on all points, and they end 
 up by hurling in defiance another prophecy : " Until 
 a great world-change takes place the proletariat must 
 reckon with the fact that the good times are over and 
 that the regular increase in real wages has reached 
 its end." ^^ And we often find expressed the fear, and 
 half-expressed the doctrinaire hope, that technical de- 
 velopments, changes in the world market or in the 
 political situation, may start the long-expected down- 
 ward tendency. The role of the orthodox socialist 
 in the whole matter is well characterized in what our 
 lovable essayist, Samuel Crothers, has to say about 
 Jonah. 
 
 " Jonah was a prophet by profession. He received 
 a call to preach in the city of Nineveh, which he ac- 
 cepted after some hesitation. He denounced civic cor- 
 
 '" Karl Kautsky, "Must the Proletariat Degenerate?", The 
 International Socialist Review, February, 1909, p. 580. 
 
146 MARXISM VERSUS SOCIALISM 
 
 ruption and declared that in forty days the city would 
 be destroyed. Having performed this professional 
 duty, Jonah felt that there was nothing left for him but 
 to await with pious resignation the fulfilment of his 
 prophecy. But in this case the unexpected happened, 
 the city repented and was saved. This was gall and 
 wormwood to Jonah. His orderly mind was offended 
 by the disarrangement in his schedule. What was the 
 use of being a prophet if things did not turn out as 
 he said ? So we are told ' it displeased Jonah exceed- 
 ingly, and he was angry.' Still he clung to his hope 
 that, in the end, things might turn out badly enough 
 to justify his public utterances." 
 
 36 
 
 '* S. M. Crothers, By the Christmas Fire, Boston, 1908, pp. 
 58, 59. 
 
CHAPTER VIII 
 
 CLASS-STRUGGLE CONCEPTIONS. FORE- 
 RUNNERS OF MARX 
 
 All the doctrines of Karl Marx, scattered as they 
 are in various writings, support one another and thus 
 form a single theoretical system. We find, accordingly, 
 that all the theses of Marx which we have exam- 
 ined in the preceding parts of this study lead up 
 to his class-struggle doctrine. It is on the basis of 
 his economic interpretation of history that he con- 
 structs his theory of the development of social life. 
 Division of labor produces a division of classes, with 
 the lower class in constant struggle against the upper 
 class. The concentration of industry leads to a con- 
 centration of capital, which, while gradually narrow- 
 ing the capitalist class to a small circle of financial 
 and industrial magnates, pushes the middle class — 
 artisans, shop-keepers and farmers^ — into the ranks of 
 wage-earners. The continuous development and fre- 
 quent revolution of technique make production more 
 and more independent of the workingman's skill and 
 physical strength. Improved machinery displaces 
 labor and makes it possible to substitute unskilled for 
 skilled labor, child labor for adult labor. These 
 
 147 
 
148 MARXISM VERSUS SOCIALISM 
 
 changes increase the reserve army of the unemployed 
 and make the living conditions of the employed more 
 and more precarious. The growing misery of the 
 working class increasingly accentuates and embitters 
 the raging class struggle. 
 
 Of all the doctrines of Marx no one perhaps grates 
 so much upon American feeling as his doctrine of 
 class struggle. All that is broadly American — the 
 memory of the past, the theory of government, the 
 democratic ideal and the energetic personal outlook — 
 seems to rebel against such an interpretation of society. 
 Yet this is a conception which permeates the whole 
 Marxian system. All the doctrines which we have 
 thus far examined are from a certain viewpoint but 
 scaffoldings for the class-struggle doctrine. We must 
 therefore endeavor to understand and criticise this 
 doctrine despite disinclination and apart from precon- 
 ception. 
 
 It will be well to begin our analysis of the class- 
 struggle theory with an historical excursion, for this 
 may prove helpful when we are called upon to deter- 
 mine what is true and what is erroneous in the Marx- 
 ian doctrine. Some years ago a Russian anarchist, 
 W. Tcherkesoff,^ attacked the Communist Manifesto 
 of Marx and Engels as a plagiarism from a pamphlet 
 of Considerant.^ No attention was paid by the so- 
 
 ^ Pages of Socialist History (New York, C B. Cooper, 114 
 Fourth Ave., 1902), pp. 55-66. 
 ^ Victor Considerant, Principes du socialisme: Manifeste de 
 
FORERUNNERS OF MARX 149 
 
 cialist writers to this pamphlet until the Italian scholar 
 Labriola stated, in practical agreement with Tcher- 
 kesoff, that the main ideas of the Communist Mani- 
 festo, such as the concentration of industry and of 
 capital and the increasing misery of the masses, are 
 contained in the pamphlet of Considerant. It was no 
 great discovery that TcherkesofT and Labriola made. 
 A more intimate acquaintance with French literature 
 would have shown them that these were current con- 
 ceptions, to be found in Vidal as in Pecqueur, in 
 Considerant as in Louis Blanc — conceptions suggested 
 by the hopeless economic conditions which followed 
 in the wake of the industrial revolution, and probably 
 first formulated by the great French economic thinker, 
 Simonde de Sismondi.^ 
 
 To the accusation of plagiarism directed against 
 Marx, Kautsky replied that, so far as the theories of 
 
 la democratie au dix-neuvieme siecle (ist ed., Paris, 1843; 2d ed., 
 Paris, 1847). I have not seen this pamphlet, and my acquaint- 
 ance with it is hmited to Tcherkesoff's, Labriola's and Kautsky's 
 citations. 
 
 " Nearly all the " new ideas " are to be found in Sismondi, not 
 excluding the very latest attempt of Kautsky to save Marx's 
 theory of increasing misery by reinterpreting it violently in the 
 sense of an increasing relative disproportion in wealth : " Thus 
 the progress of industry, the progress of production . . . tends 
 to increase inequality among men. The more advanced a na- 
 tion is in the arts and manufactures, the greater is the differ- 
 ence between the fate of those who work and that of those 
 who enjoy; the more misery the former suffer, the more luxury 
 the latter display." De Sismondi, Nouveaux principes d'economie 
 politique ou de la richesse dans ses rapports avec la population 
 (2d ed., Paris, 1827), vol. i, p. 80. 
 
I50 MARXISM VERSUS SOCIALISM 
 
 concentration of wealth and of increasing misery are 
 concerned, it is quite true that a number of sociahst 
 writers of the forties held similar views; but that 
 what distinguishes Marx from all others is his insight 
 into " the role of class struggle as the driving force 
 in social development." While other socialists — in 
 particular, the school of Fourier and Considerant — 
 saw in increasing misery nothing but unmitigated 
 misery, Marx saw in the same phenomenon the pledge 
 of the inevitable struggle, the assurance of the coming 
 victory.* 
 
 * " Had Marx and Engels asserted that the socialism of the 
 nineteenth century began with the Communist Manifesto, they 
 would certainly have been plagiarists. Only one who was fa- 
 miliar with Considerant alone of the other socialists of the time 
 could maintain that they had transcribed from him in particular, 
 for what the Communist Manifesto had in common with Con- 
 siderant's manifesto it shared with the theories of all other 
 contemporary socialists. 
 
 " But wherein consists the particular merit of the Communist 
 Manifesto if the so-called * theories of increasing misery and 
 concentration of capital ' were acknowledged by the other so- 
 cialists of their time, if they all based their socialism upon the 
 economic tendencies of the capitalist mode of production? 
 
 " This merit consisted first of all in the fact that these theories 
 appeared more clear-cut in the Manifesto than in any other so- 
 cialist publication of their time; and secondly in the conception 
 of the role of class struggle as the driving force in social develop- 
 ment, and in the application of this conception to the proletarian 
 struggle. Of this the majority of the other socialists had abso- 
 lutely no idea, and especially in that group to which Considerant 
 belonged the class struggle was considered a most deplorable 
 error. To be sure, both Considerant and his associates acknowl- 
 edged the existence of the class struggle, but they did not see 
 how inevitably it grew out of the economic development, and 
 
FORERUNNERS OF MARX 151 
 
 I cannot quite share Kautsky's viewpoint. What 
 strikes me as new and characteristic in Marx is his 
 effort to maintain a consistent historical realism and 
 his systematic coordination of ideas which, regarded 
 singly, were not original. Engels himself seemed to 
 exaggerate the originality of the class-struggle con- 
 ception in the Communist Manifesto.^ The antag- 
 onism between poor and rich was a commonplace ob- 
 servation, even in the days of classical antiquity; and 
 the earliest socialist writers did not fail to take notice 
 of this antagonism. Saint-Simon plainly speaks of 
 the '' proletarian class," describes existing law, par- 
 ticularly the law of inheritance, as " the daughter of 
 the right of conquest," and shows how the many are 
 exploited by the few, the latter enjoying a legal 
 " monopoly of all riches." ® Saint-Simon, indeed, lays 
 
 prepared the way for the new order of things." K. Kautsky, 
 " Das Kommunistische Manifest ein Plagiat," Neue Zeit (Jahrg. 
 XXIV, 1906), vol. xi, p. 698. 
 
 ^ " If Herr Duehring means . . . that our present economic 
 condition, the stage attained to-day in agriculture and industry, 
 is the result of a society which has developed itself in class 
 antagonisms, in mastership on the one hand and in slavery on 
 the other hand, he says something which is a mere commonplace 
 since the publication of the Communist Manifesto." Frederick 
 Engels, Landmarks of Scientific Socialism (Anti-Duehring), 
 translated by Austin Lewis (Chicago, 1907), p. 206. 
 
 ° " The advantages and disadvantages of each position in the 
 social scale are handed down by heredity; the economists have 
 taken pains to verify one of the aspects of this fact, the inherit- 
 ance of poverty, since they have recognized the existence in 
 society of a proletarian class. To-day the whole working popu- 
 lation is exploited by the men whose property they make use 
 
152 MARXISM VERSUS SOCIALISM 
 
 chief stress on class exploitation, although to him, ap- 
 parently, class antagonism and class exploitation are 
 identical conceptions. Moreover he points out that the 
 degree of exploitation of one class by another has in 
 the course of centuries greatly diminished.'^ 
 
 But Marx was not lacking in predecessors whose 
 class-struggle conception was sharply defined. French 
 nineteenth-century historians needed no enlightenment 
 on this point in dealing with the events which led up 
 to and followed the French Revolution.^ By far the 
 most interesting of these writers was Guizot, who 
 was not only a great historian but a great 
 
 of; the captains of industry themselves submit to this exploita- 
 tion in their relations with the capitalists, but to an incomparably 
 lesser degree; and in turn they participate in the privileges of 
 the exploitation, which falls back with all its weight on the 
 working class, that is, on the immense majority of the workers. 
 In such a state of affairs, the workingman appears as the direct 
 descendant of the slave and the serf; he has personal liberty, he 
 is no longer bound to the soil, but that is all he has attained, 
 and, in this state of legal enfranchisement, he can live only 
 under conditions imposed on him by a small class — that of men 
 whom a law, daughter of the right of conquest, invests with the 
 monopoly of all riches, that is, the power to dispose at will, and 
 even in idleness, of the instruments of production." Saint- 
 Simon et Enfentin, CEuvres, vol. xli, pp. 225, 226. 
 
 ■^ " Antagonism, the rule of force, the exploitation of man 
 by man, are to-day without doubt greatly diminished; they no 
 longer manifest themselves except under forms so softened and 
 tame that it seems difficult at first to appreciate their importance ; 
 nevertheless they continue to exist under these forms and their 
 potency is still great." Saint-Simon, loc. cit., p. 222. 
 
 * This subject is adequately dealt with by Plekhanoff in his 
 preface to the Russian edition of the Communist Manifesto 
 (Geneva, 1900), pp. 14 et seq. 
 
FORERUNNERS OF MARX 153 
 
 statesman, and who, curiously enough, was responsi- 
 ble for exiling Marx from Paris for views which 
 he himself, even if indirectly, helped to formulate. 
 Guizot was a thinker and writer of unflinching cour- 
 age, confessedly the spokesman of the bourgeoisie and 
 proud of this role. To the defense of the new order 
 of things, as constituted after the Revolution, he de- 
 voted his life. As a statesman, he regarded the middle 
 class as the foundation of the societe noiivelle, and, as 
 an historian, he glorified its deeds and struggles in past 
 centuries.® During his prime there was not a shred 
 of sentimentality about him; he used his own clear 
 head and nobody's obscure philosophy; and the only 
 respect in which Marx's class-struggle conception can 
 be regarded as an advance over Guizot's is that Marx 
 interpreted economically the formation, division, an- 
 tagonism and struggle of classes — an explanation 
 which is lacking in Guizot. On the other hand 
 Guizot makes, as early as 18 16, some truly amaz- 
 ing statements. The theorists of the Revolution, 
 according to him, either deceived themselves or were 
 lying when they talked about the sovereignty of the 
 people. It was not a question of sovereignty but of 
 
 " " I zealously uphold the new social order as constituted by 
 the revolution, which has equality before the law as its first 
 principle and the middle classes as its foundation. I glorify 
 again this cause which is already so glorious by tracing it back 
 into the past and discovering its interests and vicissitudes in 
 the whole course of our history." Guizot, Memoires pour servir 
 a I'histoire de mon temps (Paris, 1858), vol. i, p. 296. 
 
154 MARXISM VERSUS SOCIALISM 
 
 the conquest of one portion of the people by another.^^ 
 The victorious portion comprised an immense ma- 
 jority, and the doctrine of the sovereignty of the peo- 
 ple added to their force. We seem always to need a 
 doctrine, even if we have superior force on our side, 
 simply because we love to believe and make others be- 
 lieve that we are right/^ That is an interpretation of 
 the origin and value of political doctrines sufficiently 
 pragmatic even for our day! 
 
 To Guizot, French history is a record of a struggle 
 between two classes, which lasted for thirteen cen- 
 turies, and of which the final act was the Revolution/" 
 The Revolution itself was the hour of triumph and of 
 vengeance of the oppressed class; and whoever fails 
 to view it in this aspect, as a class struggle, will never 
 
 ^" This was to such an extent a matter of fact that the theorists 
 of the Revokition became unconscious of it when they were 
 talking theory ; but their language was quite different when they 
 were making practical propositions. So St. Just suggests : " The 
 way to strengthen the revolution is to make it profitable to 
 those who support it and ruinous to those who oppose it." Suite 
 de la copie dc pieces saisies dans le local que Baheuf occu- 
 pait lors dc son arrestation (Paris, Nivose, An V), vol. ii, 
 p. 72. 
 
 *^ Guizot, Du gouvernement de la France depuis la restauration 
 et du ministere actiicl (3d ed., Paris, 1820), p. 138. 
 
 ^^ " The revolution was a war, a real war, like the wars between 
 foreign peoples with which we are familiar. For thirteen cen- 
 turies France contained two such peoples, the conqueror and 
 the conquered. For thirteen centuries the conquered people 
 struggled to shake off the yoke of their conqueror. Our history 
 is the history of that struggle. In our day the decisive battle 
 has been fought. It is called the revolution." Ibid., pp. i, 2. 
 
FORERUNNERS OF MARX 155 
 
 comprehend it, will never understand its successes and 
 reverses, its virtues and its crimes/^ When attacked 
 on account of his class-struggle conception by the press 
 of his time, Guizot replied that it never occurred to 
 him that he had the honor of making a discovery or 
 even of finding a fresh phrase. People were saying 
 the same thing hundreds of years before the Revolu- 
 tion and three months before he published his book.^* 
 What he was stating, Guizot claimed, was neither a 
 theory nor an hypothesis, but a fact in all its sim- 
 plicity; a fact which it was ridiculous to question; a 
 fact witnessed by the past as well as the present, by 
 the conduct of the kings and the texts of their ordi- 
 nances as well as by the proceedings of the States- 
 General, the speeches in the Assembly, the civil code 
 and the latest French constitution/^ 
 
 What is characteristic of all the earlier writings of 
 Guizot is his joy in life and in conflict, his tone of 
 challenge, his contempt for all who hesitated to admit 
 the class struggle. Class struggle, however, meant to 
 him solely the struggle of the bourgeoisie against the 
 feudal aristocracy; the working class was left out of 
 consideration. Later, as the proletariat of Paris made 
 itself felt more and more as a political force, and in 
 proportion to the degree in which it made itself felt, 
 his tone became more subdued, more cautious. In his 
 
 " Ibid., p. 139. 
 
 ^* Ibid., avant-propos dc la troisieme edition, p. vi. 
 
 ^^ Ibid., pp. XV, xvi. 
 
156 MARXISM VERSUS SOCIALISM 
 
 brilliant essay on " Democracy in Modern Communi- 
 ties," published in 1838, he described democracy as a 
 war-cry, as the banner raised by the many of lower 
 rank against the few placed above them ; ^® the con- 
 sequences of this war in behalf of democracy were 
 many and they were fruitful : scattered and destroyed 
 were the feudal system, the caste system, the perpetual 
 concentration of social privileges in the hands of the 
 few, the right divine, lay or ecclesiastical;^'^ but the 
 further and continued attack in the name of democracy 
 he already regarded as mischievous and capable of 
 destruction only. Here is his picture of the struggle 
 for democracy : 
 
 " Political rights and privileges have been ex- 
 clusively concentrated in the hands of a small number. 
 This concentration no longer appears justifiable, upon 
 the plea of superiority either in riches, influence, intel- 
 ligence or moral and social strength. The multitude 
 rises and exclaims : Let us count our numbers ; we are 
 all equal ; let the power belong to the many. 
 
 " It is thus that the new maxims oppose the old ; they 
 are true when received in their negative sense and are 
 powerful engines of destruction. The ancient edifice 
 yields to the vigor of their attacks and falls to the 
 ground. This is a fearful but, under the decrees of 
 Providence, a predestined work. When the ancient 
 
 ^' GuizoT, Democracy in Modern Communities, translated from 
 his essay in the Revue Frangaise (London, 1838), p. 7. 
 ''Ibid., p. 16. 
 
FORERUNNERS OF MARX 157 
 
 edifice becomes contracted, inconvenient, uninhabita- 
 ble, ruinous and defended only by a corps of invalids, 
 its fall is inevitable; and the battering ram, the sap 
 and the mine detach it from the soil with a force that 
 threatens even the soil itself. But when the work of 
 destruction is consummated and the hour of recon- 
 struction arrives, when the necessity of it is universally 
 admitted, when it is commenced spontaneously in all 
 directions, what can be more absurd, what more mis- 
 chievous, than to continue still sounding the attack 
 and directing against the rising edifice, to the peril 
 of its artificers, the very engines which subverted the 
 old one." '' 
 
 His experience as a prime-minister during the Revo- 
 lution of 1848 made him cry out for social peace and 
 denounce the new class struggle as the greatest shame 
 of the century.^^ But he himself realized that his was 
 but a pious wish and his voice that of one crying in 
 
 "/fciJ., p. 45. 
 
 ^® " The struggle between the different classes of our society 
 fills our history. Nobility and third estate, aristocracy and 
 democracy, bourgeoisie and workingmen, property owners and 
 proletarians, — so many forms for so many different phases of 
 the social struggle which has so long tormented us. And it is 
 at the very time when we boast of having reached the apogee 
 of civilization, it is to the sound of the most humane utterances 
 that can pass the lips of men, that this struggle breaks out again 
 more violent, more furious than ever ! It is a scourge, a shame 
 that our age cannot endure. Internal peace, peace between all 
 classes of citizens, social peace! that is what France most des- 
 perately needs, that is our cry for help." Guizot, De la De- 
 mocratie en France (Paris, 1849), p. 35. 
 
158 MARXISM VERSUS SOCIALISM 
 
 the wilderness. He saw that the new combatant class 
 that had entered the arena was young and strong and 
 as arrogant as nobility or bourgeoisie had ever dared to 
 be, and that the outlook for social peace was dark 
 indeed.^^ He realized also that the very meaning of 
 the word democracy had changed, shifted, where he 
 could not follow it : it had begun to mean real democ- 
 racy or, as he called it, pure and absolute democracy, 
 and this new watchword foreboded new and incessant 
 struggles.^^ 
 
 It could hardly be denied that Guizot had a clear-cut 
 conception of class struggle, not only as an empirical 
 fact but as an historical force, indeed as the social 
 force which is ultimately responsible for the great 
 
 ^"''And now a third combatant has entered the arena. The 
 democratic element is divided. Against the middle classes are 
 ranged the working classes, against the bourgeoisie the common 
 people. Moreover this new war is a war to the death, for the 
 new combatant is arrogant, exclusive, as no other class ever 
 was. Only the people, they say, have a right to sovereignty; 
 and no rival, old or new, noble or bourgeois, can be admitted 
 to share it with him." Ibid., p. 107. 
 
 ^^ " The socialists, the communists, the montagnards want the 
 republic to be a democracy pure and absolute. On this condition 
 alone is the republic justifiable in their eyes. Such is the sway 
 of the word democracy that no government, no party, dares to 
 live, or thinks it can live, without inscribing this word on its 
 standard ; and those who carry this standard highest and farthest 
 believe themselves to be the strongest. Fatal notion, which 
 incessantly stirs up war in our midst, social war! We must 
 extirpate this notion. This is the price of social peace, and with 
 social peace, liberty, security, prosperity, dignity, all the moral 
 and material blessings that peace alone can insure." Ibid., pp. 
 10, II. 
 
FORERUNNERS OF MARX 159 
 
 changes and readjustments that have taken place in 
 the course of centuries. The actual existing interests 
 accept or reject, discard or change, not only ideas and 
 doctrines but even constitutions ; ^^ all these either serve 
 the interests of the ruling class or express a com- 
 promise between the interests of the contending classes, 
 perhaps in accordance v^ith the time-honored recipe: 
 imusqiiisque tanttim iiiris hahet, quantum potentia 
 valet. And yet Guizot was as right as he was modest 
 when he said that he had made no new discoveries 
 and no new statements. One hundred years earlier 
 very much the same conception of politics had been 
 held by Abbe Baudeau : '' ConnaUre ses interets et y 
 pourvoir c'est ce qu'on appelle politique" ; and many 
 of Guizot's predecessors were much keener in distin- 
 guishing the interests of the working class from that 
 of the tiers etat — a distinction which Guizot was very 
 unwillingly compelled to make, and only by the events 
 of the forties. 
 
 No revolutionary socialist of our day, no agitator 
 of the Marxian era, has ever surpassed Linguet in 
 branding the class character of all existing legislation. 
 According to Linguet the very essence of all law is to 
 safeguard property and preserve inequality, to protect 
 the rich from the poor ; to him it is a demonstrated fact 
 
 ^^ " So true is it that ideas, doctrines, constitutions themselves 
 submit to the yoke of circumstance, and are accepted by the 
 people only when they serve as an instrument or a safeguard for 
 interests which are insistent and generally adhered to." Guizot, 
 Du gouvernement de la France, p. 91. 
 
i6o MARXISM VERSUS SOCIALISM 
 
 that all existing law is but a formal conspiracy against 
 the vast majority of mankind. Dictated by wealth, 
 the law primarily serves wealth; law is wealth's for- 
 tress in the enemy's country.^^ There is an abyss 
 between those that have and those that have not prop- 
 erty. The necessity of living compels the latter to 
 slave for the former; to work on the fields, the fruits 
 of which they will not gather; to erect buildings, in 
 which they will not dwell; and to beg on their knees 
 for permission to enrich the rich.^* And that was 
 written in 1767! 
 
 During the French Revolution the socialistic group 
 comprehended without explanation that society as 
 constituted was divided into two classes. If they did 
 not dwell much on the subject, it is because they took 
 
 ^' " It is above all this inequality whose effects the laws seek 
 to counterbalance, whose dangers they seek to mitigate. They 
 cannot efface it. On the contrary, it is of their very essence 
 to strengthen it. They are designed primarily to insure property 
 rights. Further, as one can take more from a man of means 
 than from one who is destitute, they are evidently a safeguard 
 provided to protect the rich against the poor. It is hard to 
 believe, and yet it is fully demonstrated, that they are in a sense 
 a conspiracy against the majority of mankind. It is against those 
 who most need their support that their greatest force is directed. 
 It is wealth that prescribes them, and again it is wealth that 
 reaps the principal advantages from them. They are fortresses 
 established in the interest of wealth in the midst of the enemy^s 
 country, where wealth alone has dangers to fear." Linguet, 
 Theorie des lots civiles, ou principes fundamentaux de la societe 
 (Londres [Paris], 1767), vol. i, pp. 195, 196. 
 
 ^* Ihid., vol. i, p. 274. 
 
FORERUNNERS OF MARX i6i 
 
 it for granted: class rule was the main objective of 
 their attack. Their struggle, of course, was all for 
 equality and ^' nature " against class rule. The very 
 naive opening passages of Buonarroti's History of 
 Babeufs Conspiracy are convincing on this point. 
 " Whilst ambition, jealousy, cupidity and the blind 
 love of innovation kept up a deplorable struggle among 
 a people of whom some strove to reestablish the an- 
 cient monarchy, others to place upon the French throne 
 a new dynasty, others again to transfer power from 
 one caste of society to another, but all for the purpose 
 of appropriating exclusively to themselves the national 
 authority and thereby those enjoyments of which au- 
 thority is the source ; amid all these parties there was 
 slowly formed a certain class of citizens, who, actu- 
 ated by very different principles [etc., etc.] . . . 
 Our divisions during the Revolution were the results 
 of opposing interests and principles. While one set of 
 persons (the honest) supported a system because they 
 believed it to be good, another set, far more numerous, 
 united themselves to the party that appeared most fa- 
 vorable to their personal views of fortune and ambi- 
 tion." ^^ Of course Babeuf and his followers regarded 
 their own conspiracy not as in the interest of a class 
 but as inspired by eternal justice and "nature"; yet 
 when we read their propaganda songs we find that they 
 
 ^■^ Buonarroti's History of Babeufs Conspiracy for Equality, 
 translated by Bronterre (London, 1836), pp. 5, 6. 
 
i62 MARXISM VERSUS SOCIALISM 
 
 apparently address their appeal to a very distinct class. 
 One of these songs describes the " peuple " as robbed 
 by the rich of every right.^® The complaint of an- 
 other song is that " on vit des princes, des sujets, des 
 opulents, des miserables; on vit des maitres, des 
 valets," etc.^^ Babeuf asserted on one occasion that 
 the French Revolution was a war between patricians 
 and plebeians, between the rich and the poor. And he 
 prophesied that the Revolution could not end so long 
 as the rich had all the privileges and governed the 
 state, while the poor worked like slaves without play- 
 ing any role in the commonwealth.^^ 
 
 Thus we see that Marx was not obliged to invent 
 either class hatred or class struggle. Europe had al- 
 ways had plenty of it, and at the beginning of the 
 nineteenth century the outlook for peace was unprom- 
 ising. The two great poets of Marx's own fatherland 
 expected little from the nineteenth century in the way 
 of peace. Schiller greeted none too optimistically the 
 advent of the new century : 
 
 ^® " Dying of hunger, dying of cold, people robbed of every 
 right, humbly you mourn your fate; while the brazen rich man, 
 whom your kindness spared in former times, openly rejoices. 
 Upstarts, gorged with gold, without trouble or care or work, 
 seize the hive; and as for you, poor toiling people, eat and 
 digest, if you can, iron, like the ostrich." Suite de la copie de 
 pieces saisis dans le local que Babeuf occupait lors de son ar- 
 Testation (Paris, An V), vol. ii, pp. 78, 79. 
 
 ^^ EspiNAS, La philosophie sociale du XVIII eme siecle et la 
 Revolution (Paris, 1898), p. 248. 
 
 ^^ FouRNiERE, Les theories socialistes au XlXeme siecle, p. 355. 
 
FORERUNNERS OF MARX 163 
 
 Das Jahrhundert isf in Sturm geschieden 
 Und das neue offnet sick mit Mord." ^^ 
 
 And it is interesting to note that Goethe looked across 
 the sea for social peace, to the new world, which had 
 not inherited feudal castles and traditions of class 
 hatred : 
 
 '' Amerika, du hast es hesser; 
 Du hast im Magen keine Schlosser; 
 Dich stort nicht im Innern 
 Zu lehendiger Zeit 
 Unnutzes Erinnern 
 Und vergehlicher Streit. 
 
 " 30 
 
 But at the very same time there lived in America a 
 statesman who did not seem to have any such poetical 
 illusions about his own country. Madison seemed to 
 think that, with or without castles, different economic 
 interests were sure to produce contending classes; and 
 how to check future class struggles and minimize their 
 effects was the problem which he was endeavoring to 
 solve. In the tenth number of the Federalist we can 
 find the better part of the Marxian doctrine which we 
 are now considering. Madison reasons : " From the 
 protection of different and unequal faculties of ac- 
 
 ''* " The century has ended in storm, and the new one begins 
 with murder." 
 
 ^**" America, your lot is happier; you have no fetters to bind 
 you; useless recollections and unnecessary strife do not per- 
 petually disturb you." 
 
i64 MARXISM VERSUS SOCIALISM J 
 
 quiring property, the possession of different degrees 
 and kinds of property immediately results; and from 
 the influence of these on the sentiments and views of 
 the respective proprietors, ensues a division of the so- 
 ciety into different interests and parties. . . . Those 
 who hold and those who are without property have 
 ever formed distinct interests in society. Those who 
 are creditors and those who are debtors fall under a 
 like discrimination. A landed interest, a manufactur- 
 ing interest, a mercantile interest, a moneyed interest, 
 with many lesser interests, grow up of necessity in 
 civilized nations, and divide them into different classes 
 actuated by different sentiments and views. . . . 
 Either the existence of the same passion or interest in 
 a majority at the same time must be prevented, or the 
 majority, having such coexistent passion or interest, 
 must be rendered, by their number and local situation, 
 unable to concert and carry into effect schemes of op- 
 pression. If the impulse and the opportunity be suf- 
 fered to coincide, we well know that neither moral 
 nor religious motives can be relied on as an adequate 
 control.'' '^ 
 
 '^ Speaking of class struggle and its recognition in America, 
 it is worth while to point out that Mr. A. M. Simons, in his 
 work entitled Class Struggles in America (Chicago, 1907), mis- 
 represents John Adams by quoting certain sentences which, 
 separated from the context, suggest ideas quite different from 
 those which Adams was endeavoring to express. On page 14 
 Mr. Simons cites : 
 
 " It is of no consequence by what name j'^ou call your people, 
 whether by that of freeman or of slave. In some countries the 
 
FORERUNNERS OF MARX 165 
 
 In investigating the extent to which class antag- 
 onism was recognized before Marx, it is immaterial 
 whether a particular writer advocated class struggle or 
 discouraged it. The important thing is the conscious- 
 ness of the existence of classes with antagonistic inter- 
 ests. Even the preaching of class struggle is not 
 necessarily associated with revolutionary tendencies. 
 
 laboring men are called freemen, in others they are called slaves, 
 but the difference is imaginary only. What matters it whether 
 a landlord employing ten laborers on his farm gives them 
 annually as much as will buy the necessaries of life or gives 
 them those necessaries at short hand?" 
 
 What Adams actually did say Mr. Simons could hardly use in 
 his propaganda pamphlet. The record of Adams's speech is 
 taken from Jefferson's notes, which read as follows : " Mr. 
 John Adams observed, that the numbers of people were taken 
 by this article as an index of the wealth of the state, and not 
 as subjects of taxation; that as to this matter, it was of no 
 consequence by what name you call your people, whether by 
 that of freeman or of slave. In some countries the laboring 
 men are called freemen, in others they are called slaves, but 
 the difference is imaginary only. What matters it whether a 
 landlord employing ten laborers on his farm gives them an- 
 nually as much as will buy the necessaries of life or gives them 
 those necessaries at short hand? The ten laborers add as much 
 wealth to the state, increase its exports as much, in the one 
 case as in the other. Certainly five hundred freemen produce 
 no more profit, no greater surplus for the payment of taxes, 
 than five hundred slaves. Therefore the state in which the 
 laborers are called freemen should be taxed no more than that 
 in which are those called slaves. ... A slave may indeed, 
 from custom of speech, be more properly called the wealth of 
 his master, than the free laborer might be called the wealth of 
 his employer; but as to the state, both were equally its wealth 
 and should therefore equally add to the quota of its tax." John 
 Adams, Works, edited by Chas. F. Adams (Boston, 1850), vol. ii, 
 p. 497. 
 
i66 MARXISM VERSUS SOCIALISM | 
 
 It has been so, as a rule, when sounded from below; 
 but class struggle has been emphasized from above as 
 an appeal for class rule and class subordination. Lud- 
 wig von Haller gives a fair illustration of the latter 
 tendency. His work appeared in 1816, the year in 
 which Guizot published his Representative Govern- 
 ment. The very title is suggestive: Restoration of 
 Political Science (Restauration der Staatswissen- 
 schaft). The restoration of the legitimate thrones is 
 to be followed by the reenthronement of legitimate 
 science; the annihilation of the hydra of the Revolu- 
 tion calls for the uprooting of that false political 
 science which is based upon the idea of a social com- 
 pact.^^ The substance of this " restored " political 
 science is the right of strength — not physical strength, 
 of course, but the strength of position and of wealth. 
 Instead of the sovereignty of the people, the sover- 
 eignty of the one who has the power and the wealth 
 to be independent; instead of authority derived or 
 delegated, one's own might, one's own right — that is 
 the doctrine.^^ Von Haller saw a miniature prince in 
 every landlord, merchant and manufacturer, because 
 
 ^^ " The hydra of the Revolution is destroyed as to its tools 
 and largely as to its results; let us also destroy its roots so that 
 it may put forth no new leaves. The legitimate thrones are 
 restored; we wish also to restore that legitimate science which 
 serves the Lord, to the truth of which all creation bears wit- 
 ness." Karl Ludwig von Haller, Restauration der Staats- 
 wissenschaft oder Theorie des naturlich-geselligen Zustandes 
 (2d ed., 1820), vol. i, p. I. 
 
 *^ Ihid., vol. i, p. xlix. 
 
FORERUNNERS OF MARX 167 
 
 these had subordinates.^* Such persons fell short of 
 being real princes only in that they were without com- 
 plete personal independence.^^ All superiority of 
 power or wealth, he claimed, is a blessing from 
 heaven.^® And whosoever is really against revolution, 
 must not only talk against it (even a Jacobin could by 
 mere talk pretend to be against revolution) but must 
 in all his acts do the exact opposite of what the furies 
 of revolution command; he must recognize that all 
 authority is from God, and that God has established 
 inecjuality in personal fortune to the end that there 
 may be great and small, high and low, etc.^^ 
 
 To an American reader the theory of von Haller 
 may seem to be simply a curiosity. In certain purely 
 
 °* " In every landlord as well as in every merchant or manu- 
 facturer I saw the image of a prince, in an aggregation of sub- 
 ordinates the source, the legal foundation, as well as the limita- 
 tion, of dependence and servitude." Ibid., vol. i, p. xvi. 
 
 ^^ Ibid., vol. i, p. xvii. 
 
 ^® Ibid., p. Ixxix. 
 
 ^^ "Therefore, procure assistance; pray the Lord to send la- 
 borers to his vineyard. You will recognize their fitness not 
 because they decry revolution and Jacobinism (for that even 
 its adherents can do effectually enough with ill-concealed hypoc- 
 risy), but rather because they do and promote the very opposite 
 of everything which those furies command; because they be- 
 lieve and recognize that all might and all authority are derived 
 from God alone; that he made great and small, high and 
 low, through the diversity of their fortunes; . . . because they 
 leave to each one his own possessions, and do not wish to 
 regulate the relations, the condition, and the possessions of 
 mankind according to their own will. Whoever, on the other 
 hand, regards the authority of the mighty as derived from and 
 granted by the weak, ... of him beware." Ibid., p. Ixxxi. 
 
i68 MARXISM VERSUS SOCIALISM 
 
 philosophical aspects this may be true, but Haller's 
 J religious argument for class rule was the argument 
 I most generally approved and employed throughout the 
 \ continent of Europe. That is the reason why a strong 
 \ anti-religious movement, in fact a militant atheism of 
 I one kind or another, was the inevitable precursor of 
 I the revolutionary movements in France, Germany and 
 I Russia. To meet the mediaeval attitude of the estab- 
 lished church, whether Catholic, Lutheran or Greek, 
 incipient revolution invariably started with a general 
 attack upon religion as such, an attack which seem- 
 ingly obscured all political issues. To Americans, 
 whose churches, fortunately, have developed under 
 democratic auspices, the psychology of such move- 
 ments must appear strange and almost incomprehensi- 
 ble. And yet without a clear understanding of this 
 revolutionary psychology the sweeping conquest which 
 Marx's class-struggle doctrine has achieved will re- 
 main equally obscure. 
 I To get the full flavor of the religious class-rule doc- 
 \ trine in our own days one has to go to Russia. There 
 I a distinguished philosopher and defender of Russian 
 I autocracy, Leontyeff, will inform us that the basis of 
 I the Russian state and society is Greek orthodoxy, By- 
 I zantinism. He will tell us that the Byzantine ideal is 
 discouragement in regard to everything earthly, includ- 
 ing personal happiness and personal purity. Leontyeff 
 will further tell us that Byzantine Christianity teaches 
 strict subordination. It teaches that the worldly, the 
 
FORERUNNERS OF MARX 169 
 
 political hierarchy is but the reflection of the heavenly 
 hierarchy ; that there is no equality, because the church 
 teaches that even angels are not equal among them- 
 selves.^^ Christianity accordingly offers the surest 
 and most practical means of ruling the masses of the 
 people with an iron hand. But this power only true 
 Christianity has, not Christianity a Veau de rose, with 
 its talk about love without fear, the dignity of human 
 nature and the good of mankind.^^ Love of mankind 
 is anthropolatry and is un-Christian. Fear is the 
 basis of faith. Everybody can comprehend fear, fear 
 of punishment here and hereafter; and who fears is 
 humble, who is humble seeks authority and learns to 
 love the authority above him.*° Authority is con- 
 structive, is organizing. Organization, social organ- 
 ization, is by nature nothing else than chronic despot- 
 ism, which is accepted by some out of love or for the 
 benefit they derive from this despotism, by others out 
 of fear. Progress therefore lies in limiting freedom, 
 not authority.*^ 
 
 Leontyeff, however, did a grave injustice to Luther 
 and his church when he claimed for Greek orthodoxy 
 the monopoly of this theory. With the social prob- 
 
 "^ Leontyeff, Vostoh, Rossia i Slovianstvo (Moscow, 1885), 
 vol. i, p. 81 ; vol. ii, p. 41. See also Simkhovitch, " An Inter- 
 pretation of Russian Autocracy," The International Quarterly, 
 October, 1904, pp. 2, 3. 
 
 ^' Ihid., vol. ii, p. 48. 
 
 " Ihid., vol. ii, pp. 268, 269. 
 
 " Ihid., vol. ii, p. 288. 
 
170 MARXISM VERSUS SOCIALISM 
 
 lems of their days Luther and Melanchthon dealt in 
 very much the same spirit. A prince, Luther preached, 
 remains a prince no matter how tyrannical he may be. 
 Those that he beheads are necessarily few, since he 
 must have subjects in order to be a ruler. A Chris- 
 tian must remember that Christ said : " Resist not 
 evil." The demand for freedom on the part of the 
 peasants outraged Luther's sensitive soul. He found 
 it to be in direct contradiction to the Gospel; for did 
 not Abraham and other prophets have serfs ? Besides, 
 it would rob the lords of their serfs, their property! 
 Such a demand, moreover, would make all men equal. 
 Impossible ! An earthly kingdom cannot exist without 
 inequality of persons. Some must be free, others 
 serfs; some rulers, others subjects; as St. Paul says: 
 " Before Christ both master and slave are one.'* 
 Melanchthon entirely shared Luther's views. If serf- 
 dom exists, it should be left alone. The Gospel does 
 not require a change in the serf's condition, but it does 
 require obedience to the government. Concerning the 
 treatment of peasants, Melanchthon thoughtfully ob- 
 served " that the Germans are such a rough, obstinate, 
 bloody-minded people that they should be treated even 
 more harshly than they are " ; and a nobleman who 
 sought Melanchthon's opinion about freeing his peas- 
 ants from certain burdens received this advice : " Your 
 lordship should not abolish the old services, and your 
 conscience need not be troubled on this point. Dis- 
 cipline in bodily matters is well-pleasing to God; and 
 
•4:,,,, 
 FORERUNNERS OF MARX 171 
 
 if the burdens fall unequally and are too hard, we must 
 remember what St. Paul says : ' The powers that be 
 are ordained of God.' " *^ It is in this attitude of all 
 the churches that we find the explanation of the curious 
 phenomenon already noted — that all political revolu- 
 tions in continental Europe were preceded by a general 
 and furious onslaught on church and religion. The 
 church invariably used its authority to sanction and 
 uphold the existing organization of society; the revolu- 
 tion invariably began by undermining the prestige of 
 the church. So it was in France; so it was in Ger- 
 many; so it was in Russia. 
 
 We have seen that in France the existence of classes | 
 and class struggles was a commonplace conception; 
 but the French spokesmen of socialism never justified 
 their theories on the basis of class struggle. Their pet y 
 theories were not to be for the benefit of a class but 
 for humanity at large ; their appeal was addressed not 
 to the laboring class but to the well-meaning and just 
 of air classes. The fact that various classes of society: 
 acted politically in accordance with their respective! 
 economic interests led the socialists to inveigh againsti 
 the selfishness of existing society; but the socialist 
 movement itself did not seem to them a movement 
 actuated by class interest. Such was the situation inl 
 France. 
 
 In Germany the political radicalism of the forties, 
 for reasons indicated above, expressed itself theoretic- 
 
 " Shapiro, Social Reform md Reformation (1909), PP- 78-83. 
 
172 MARXISM VERSUS SOCIALISM 
 
 ally in criticism of religion. Ludwig Feuerbach with 
 his Wesen dcs Christcnthums swept radical Germany 
 off its feet. His book appealed both to the radical 
 democrats and to the socialists. Without a word about 
 politics, it became in a sense a political platform. No 
 modern reader of the book can see why it should have 
 played such a role ; but the evidence of its effectiveness 
 is conclusive. Engels tells us : " And then came Feuer- 
 bach's Wescn des Chris tent hums . . . one must 
 have himself experienced the emancipating influence of 
 this book to have a conception of it. The enthusiasm 
 was universal, in a moment we all turned Feuerbach- 
 ians." ^^ Does this mean that they became merely 
 atheists and materialists ? No ; it was Feuerbach's hu- 
 manitarian idealism, his love of mankind instead of 
 love of God, his " homo homini Dens '^ and his indirect 
 attack upon state, church and society as constituted 
 in feudal Germany that made converts. Feuerbach 
 himself later acknowledged the political meaning of 
 his work. He wrote in 1846 : " Who has nothing more 
 to say about me than that I am an atheist says and 
 knows of me nothing. The question whether a God 
 exists or does not exist, the opposition between theism 
 and atheism, belongs to the seventeenth and eighteenth 
 centuries, but no longer to the nineteenth. If I am 
 denying God, it means that I am opposing the denial 
 of mankind; it means that instead of a situation full 
 of illusions, instead of a fantastic, heavenly position, 
 *^ Engels, Ludwig Feuerbach, pp. 10, 11. 
 
FORERUNNERS OF MARX 173 
 
 which in real life is necessarily accompanied by an 
 actual denial of mankind, I demand man's sensuous 
 real place, which also necessarily means his political 
 _and social position. The question of God's being or 
 not being is with me a question of men's being or not 
 being." ** 
 
 The essence of Christianity has been interpreted as 
 the essence of human nature, which is at present un- 
 realized because of the misdirection of humanity's 
 yearnings. This became the thesis of German social- 
 ism, of which Karl Griin and Moses Hess became the 
 leading exponents. Ludwig Feuerbach's doctrine was 
 to them the alpha and omega of all philosophy and of 
 all political science.*^ The problem of socialism was | 
 how to make the people conscious of their own in- ) 
 stincts of love and righteousness.*® It was out of the 
 question to divide humanity into classes with different 
 interests; Christianity was the ideal of the people as 
 ** Ludwig Feuerbach, Werke (Leipzig, 1846), vol. i, pp. xiv, 
 
 XV. 
 
 " " When Feuerbach is named the entire work of philosophy 
 from the time of Francis Bacon to the present day has been 
 mentioned. What philosophy purposes and signifies in the last 
 instance has at once been stated, and humanity is thus revealed 
 as the last resort of universal history. In this way one can 
 work more securely because more profoundly than by bringing 
 to the front wages, or competition, or the defects of constitu- 
 tions and laws." Karl Grun, " Feuerbach und die Socialisten," 
 Deutsches Burgerbuch fur 1845 (Darmstadt, H. Puttmann, 1844), 
 p. 74. 
 
 "' Karl Grun, " Politik und Sozialismus," in Rheinische Jahr- 
 biicher zur gesellschaftlichen Reform (Darmstadt, 1845), vol. i, 
 p. 98. 
 
174 MARXISM VERSUS SOCIALISM 
 
 a whole, an instinct of the human species. All that 
 the German socialists had to do was to show to the 
 humane German people, without distinction of classes 
 and parties, that socialism was the only actual realiza- 
 tion of their natural human instincts. The German, 
 moreover, was different from the Frenchman and the 
 Englishman; he was no narrow-minded party man; he 
 had a soul receptive to theories. To make of the 
 humane German a humanitarian, i.e., a socialist, was 
 only a matter of theoretical argumentation.*'' 
 
 While the German socialists were working out their 
 philosophical arguments for a humanitarian socialism, 
 they were rudely surprised by a book of the young 
 German scholar, Lorenz von Stein, famous in later 
 years as a teacher of political science. Stein was a 
 gentleman of conservative leanings, a monarchist and 
 a strict defender of private property, yet he came 
 nearer than any other writer to being the actual fore- 
 runner of Karl Marx.*^ In the socialist movement he 
 
 *' Ibid., p. 136. 
 
 *^ To what extent Stein influenced Marx is an open question. 
 
 Marx was thoroughly familiar with Stein's work; his articles 
 
 against Griin, in Das Westph'dlische Dampfhoot, prove it; but 
 
 on the other hand Marx in 1844 became acquainted with the 
 
 same sources, the same French history, the same social struggles, 
 
 which inspired Stein. In fact Marx corrects Stein in many 
 
 details, and does not seem conscious of being indebted to Stein 
 
 in any way. So, in speaking of Grun's history of the social 
 
 movement in France and Belgium, he remarks : " It is hence 
 
 I evident that Griin's bungling composition stands far below 
 
 I Stein's book, for he at least attempted to depict the connection 
 
 I between socialistic literature and the actual development of 
 
 French society." Das Westphdlische Dampfhoot, redigirt von 
 
FORERUNNERS OF MARX 175 
 
 _saw a proletarian class movement; in the socialist 
 theory, an inevitable class theory. In spite of its 
 Hegelian phraseology, Stein's work was a realistic in- 
 terpretation of half a century of French history and 
 political theory/^ It was the first interpretation of 
 this kind attempted by a German, and it displayed 
 much deeper insight and a far keener analysis than was 
 to be found in the interpretation placed upon the same 
 movement by his brilliant French predecessors. So^ 
 far as the knowledge of the present writer extends, 
 Stein was the first historian of the fourth estate, the 
 philosopher of its coming revolution, and the only 
 one who dealt with this subject without partiality or 
 bias. Stein might have well said with Spinoza : '" Cu- 
 ravi humanas actiones non ridere, non higere, neque 
 
 Dr. Otto Luning, Jahrg. Ill (Padeborn, Januar, 1847), p. 446. 
 In the same article, on pp. 448, 449, 451, Marx criticises and 
 corrects various details in Stein's book ; and on p. 456 he makes 
 the interesting remark: "Stein himself betrays extreme con- 
 fusion when he speaks of a political moment in the science of 
 industry. He shows nevertheless that he had a correct con- 
 ception of the matter, for he added that political history was 
 intimately connected with political economy." Here is Marx's 
 first definite suggestion of his economic interpretation of history, 
 and he acknowledges that Stein was on the same track. This 
 article was written in 1846. 
 
 " An unsigned article, " Der Socialismus in Deutschland," ap- 
 peared in the Gegenwart, Heft 81 (Leipzig, 1852), pp. 517-562. 
 I am quite convinced that this lengthy article was written by 
 Lorenz Stein himself; there is an overwhelming amount of 
 internal evidence for such an assumption. In this article Stein 
 pays to himself very high tribute and greatly exaggerates the 
 political importance of his book, but he does not praise himself 
 sufficiently for his real achievement — his realistic method. 
 
176 MARXISM VERSUS SOCIALISM 
 
 detest ari^ sed inteiUgere'';^^ and in the effort to un- 
 derstand them Stein was successful. 
 
 In the preface to his book, Stein declares that the 
 period of political revolutions is over, but a revolution 
 not less serious is impending. Just as, at the end of 
 the eighteenth century, an estate of the people rebelled 
 against the state, so now a class is working to over- 
 throw society itself. The next revolution can only be 
 a social revolution.^^ Moreover, it is not France alone 
 that is confronted by this peril. No deep and far- 
 reaching movement belongs exclusively to one nation. 
 Where the general conditions of existence are more or 
 less the same, as they are among the West European 
 nations, the same social movements are bound to 
 manifest themselves with greater or less force. 
 
 The first chapter of Stein's book is entitled " Das 
 Proletariat." The proletariat Stein defines as the class 
 of those who have neither property nor education, but 
 who feel that they should not be without these posses- 
 sions, which alone lend value to personality. The fate 
 of this class is what socialism and communism have 
 in mind.^^ The first appearance of the proletariat in 
 
 "" " It has been my aim not to laugh at the actions of men, 
 nor yet to deplore or detest them, but simply to understand 
 them." 
 
 " Stein, Der Socialismus und Communismus des heutigen^ 
 Frankreichs (Leipzig, 1842), p. iii. As regards Stein's theory 
 of society and of the state, see Munroe Smith, in Political 
 Science Quarterly, vol. xvi (1901), pp. 649-656. 
 
 °* Stein, Der Socialismus, p. 7. 
 
FORERUNNERS OF MARX 177 
 
 French politics was as sudden as it was dramatic. Be- 
 fore the Revolution only three classes could be con- 
 sidered, the nobility, the clergy and the third estate, 
 classes represented in the States-General. The Revo- 
 lution broke out; the king and his army surrounded 
 with bayonets the Assembly of Versailles; Paris rose, 
 and the people of Paris compelled the king to treat 
 their representatives as a power. Another attempt was 
 made by the king to regain his power; the people of 
 Paris stormed the palace and the king became their 
 prisoner. Who were these people who defended the 
 National Assembly, imprisoned the king, formed Hen- 
 riot's guard? Who were the '' tricoteuses'' and the 
 " aimables faubourgs "? These were the proletariat of 
 Paris, which thus made its entry upon the stage of 
 French political life, never again to leave the scene.^^ 
 During the eventful years of the Revolution and of 
 the first Republic this proletariat learned two things : 
 it became conscious very promptly of its own impor- 
 tance in everything pertaining to revolution; it also 
 learned gradually to regard itself as a separate class, 
 distinct from all other classes. This twofold knowl- 
 edge later generations of the Paris proletariat have 
 not forgotten. On the contrary, realizing their power 
 and their distinct interests, they have occupied them- 
 selves in working out aims of their own. Thus out 
 of the propertyless, uneducated masses is rising one 
 single-minded, unified social class. You may doubt its 
 
 " Rid., p. 8. 
 
178 MARXISM VERSUS SOCIALISM 
 
 justification, you cannot doubt its power. This is the 
 new element in French society, Stein writes, " which 
 may very properly be called a dangerous element ; dan- 
 gerous on account of its numbers and its often tested 
 courage; dangerous because of its consciousness of 
 unity, dangerous because of its feeling that only 
 through revolution can its aims be reached, its plans 
 accomplished." ^* 
 
 Further on Stein explains that the " poor " and the 
 " proletarian " are widely differing conceptions ; that 
 from time immemorial society has been divided into 
 rich and poor, but that the proletarian belongs to the 
 history of our own times exclusively. In our own 
 days therefore we shall see the development of the sig- 
 nificance of this class. That is the point of view from 
 which Stein looked upon France's social movement 
 and its theories. He was not preaching any doctrine, 
 he was calling attention to a fact; but this fact was the 
 opening of the proletarian class struggle.^^ 
 
 Stein's book was very annoying to the German so- 
 cialists, with their Feuerbachian doctrines and their 
 belief in the humanitarian instincts of mankind. Thus 
 Hess, without naming Stein, refers to him as an intel- 
 
 (•** Stein, Der Socialismus, p. 9. This book was written six 
 years before the Communist Manifesto! 
 
 ^^ The importance of Stein as forerunner of Marx was pointed 
 out first by Peter von Struve, to whom we are indebted for 
 much material, in his article " Zur Entwickelungsgeschichte des 
 wissenschaftHchen Sozialismus," Neue Zeit, Jahrg. XV (1897), 
 vol. ii, pp. 228-235, 269-275. 
 
FORERUNNERS OF MARX 179 
 
 lectual plebeian, who explains the origin of socialism 
 by the needs of the stomach, because he himself proba- 
 bly never felt other and higher necessities.^^ In an 
 earlier criticism Hess accuses Stein of being realistic. 
 Of course such simple words as " realistic " were not 
 used in those days by German scholars. A tear on 
 the cheek of his sweetheart would probably have been 
 called, by a learned German of those days, not a tear 
 but a manifestation of the substantialization of the 
 Category of the Tragic. Stein, accordingly, is not 
 described as a '' realist," but is accused of being too 
 feeble so to mold reality as to make it fit his own self- 
 consciousness, for which reason he so molds his con- 
 sciousness as to fit the low and base realities of exist- 
 ence." According to Hess, Stein does not understand 
 the socialist movement at all ; ^^ all he sees in social- 
 ism is its relation to the proletariat.^^ But after all, 
 reasons Hess, Stein's limitations result from his being 
 an Hegelian and not being an atheist. One so handi- 
 capped could not possibly grasp the positive meaning 
 of socialism: he could see only its negative and de- 
 structive tendencies.^*^ Equally harsh is Karl Griin. 
 To him the idea that the proletariat is a separate class 
 
 ^® M. Hess, "Ueber die sozialistische Bewegung in Deutsch- 
 land," in Neue Anekdota, herausgegeben von Karl Griin 
 (Darmstadt, 1845), p. 226. 
 
 "[Hess], " Socialismus und Communismus," in Ein und 
 zwanzig Bogen aus der Schweis, herausgegeben von Georg 
 Herwegh (Zurich und Winterthur, 1843), p. 75. 
 
 '' Ibid., p. 83. '' Ibid., p. 85. '' Ibid., p. 91. 
 
i8o MARXISM VERSUS SOCIALISM 
 
 of society and that economic conditions are re- 
 sponsible for socialism seems imbecile (schwach- 
 sinnig). No! Socialism is religion, religion that has 
 become practical, etc.^^ 
 
 Stein's class-struggle theory obviously made an im- 
 pression on Germany, because again and again Hess 
 and Griin felt themselves forced to defend the good 
 character of humanity at large and of Germany in 
 particular. In the preface to The Social Conditions of 
 the Civilized World, Hess gives us in nuce his theory 
 on the subject. He tells us that no single class of 
 society nor this nor that form of government is re- 
 sponsible for the evils from which we are suffering. 
 No class of society is so heartless as to leave its fellow- 
 men in misery, were there means at its disposal to 
 make all men happy. We see daily in the well-to- 
 do class attempts to better social conditions. The 
 responsibility for all social evils is to be sought in lack 
 of insight. The best proof against any class theory 
 is the fact that, after two years of discussion, Ger- 
 many's educated and well-to-do people are in the main 
 already in accord with the have-nots in France.* 
 
 62 
 
 •'^ Karl Grun, Neue Anekdota (Darmstadt, 1845), pp. 262, 
 263. 
 
 «2 " While we are here disclosing an actual picture of the 
 social conditions of all civilized lands, we are most firmly 
 convinced that neither a single class of our society, — for ex- 
 ample, the property-owning class, — nor this nor that form of 
 government, and least of all human nature, is the fundamental 
 cause of the many evils under the burden of which we groan. 
 For no class of society would be so heartless as to leave its 
 
FORERUNNERS OF MARX i8i 
 
 The German philosophical socialists were without 
 exception insignificant people, and their theories were 
 of little consequence one way or another, but on the 
 eve of the outbreak of 1848 they sounded a shrill note 
 of discord. These quasi-radicals, peddling atheism 
 and preaching a love-feast of mankind, declared them- 
 selves indifferent to political reform and to representa- 
 tive government. And it was this circumstance that 
 brought down upon their heads Marx with all his fury 
 and with his Communist Manifesto. 
 
 Just as they had copied Feuerbach (whose avowed 
 aim, however, was a political one), so they proceeded 
 to copy certain phrases of the French socialists. In 
 France the people had a constitutional form of govern- 
 
 fellow-men in misery if there were a means at its command to 
 make them happy. We see, indeed, every day that especially 
 among the class of property-holders^ and without doubt because 
 that is also the cultured class, the attempts fundamentally to 
 better our social conditions make the deepest appeal, and meet 
 with the greatest sympathy; and if until now in our country 
 the classes less favored of fortune have troubled themselves 
 less as to the amelioration of our conditions, it is in truth 
 through no ill-will on their part. Rather it is entirely owing 
 to a lack of insight that they do not concern themselves with 
 a worthy task, and one which is directed, above all else, toward 
 the betterment of their own lot. Is not the very fact that the 
 property-owning class in Germany, although it has been inter- 
 ested in the social question for barely two years, is already 
 in the main in accord with the proletariat of France, and that 
 it is being completely carried away by the movement, — is not 
 this sufficient evidence that neither this nor any other class of 
 society is the cause of the existence and continuance of our 
 many social evils ? " Die gesellschaftUchen Zustdnde der civili- 
 sirten Welt, herausgegeben von M. Hess (Elberfeld und Iserlohn, 
 Juhus Badeker, 1846), vol. i, pp. i, 2. 
 
i82 MARXISM VERSUS SOCIALISM 
 
 merit, and for that reason they could afford to sneer 
 at constitutional government or make jokes about it. 
 Nobody could take away from them their political lib- 
 erties; they could therefore abuse these liberties in 
 their socialist propagandist literature as much as they 
 pleased. In Germany the situation was different. In 
 Germany those who talked and wrote about a consti- 
 tutional form of government were engaged in a dis- 
 cussion de lege ferenda and not de lege lata; and 
 French socialistic phrases on the subject were, from 
 a campaign point of view, very much out of place. In 
 fact, those who repeated them were playing into the 
 hands of the reaction. Yet we hear Griin asking: 
 Who demands a constitution in Prussia? and answer- 
 ing: The Liberals. But, he continues, the Liberals 
 are not the people. These are a few men of property 
 and some writers. Under a constitution the will of a 
 small minority only will rule— ^th^e minority which 
 represents the vested interests. If the Silesian pro- 
 letariat were conscious it would have petitioned against 
 a constitution. But since that proletariat is not a con- 
 scious group, we are acting in its name, we are pro- 
 testing against a constitution.^^ Arnold Ruge, one of 
 
 "^ " A constitution is governed by law, which is the heads- 
 man, so to speak, who executes ruthlessly the will of a small 
 minority, assuming an artful appearance of being an infinite 
 majority, and, indeed, of representing the will of the whole 
 country. Were the Silesian proletariat conscious, and did its 
 lights correspond to its consciousness, it would have petitioned 
 against the constitution. The proletariat, however, has neither 
 
FORERUNNERS OF MARX 183 
 
 the leading democratic writers of the time, represents 
 Hess as declaring that all the talk about a republic, 
 a jury system and a free press is nonsense; that it 
 only leads to the tyranny of the property-holders over 
 the majority of mankind.^* Hess himself tells us -that 
 he is disgusted with the liberal-political aspirations, 
 and that he is disposed to trust the heart of a Prussian 
 monarch rather than a French Chamber of Deputies.®^ 
 Thus German philosophical socialism had ceased to be 
 harmless nonsense, it had actually become politically 
 reactionary — a circumstance which did not endear its 
 advocates and their theories to Marx and to Engels. 
 
 consciousness nor rights. We are therefore acting in its name. 
 We protest." K. Grun, " Politik und Sozialismus," in Rhein- 
 ische Jahrbilcher sur gesellschaftlichen Reform (Darmstadt, 
 1845), vol. i, p. 100. 
 
 ®*"The talk of freedom and political reform is out of date. 
 The republic, the jury system, and the freedom of the press 
 lead to nothing but the tyranny of the property-holder and 
 the slavery of the masses. All political reforms, even the most 
 radical, are impotent against the fundamental evils of society, 
 and no longer interest the world. It is social reform that 
 interests us now." Arnold Ruge, Werke (2d ed., Manheim, 
 1848), vol. V, p. 39. 
 
 ®^ " Or has the Prussian monarch shown less heart for the 
 misery of the poorer classes than the French Chamber of 
 Deputies, or the king of France? We are so convinced by 
 facts of the contrary, we are so persuaded by reflection of the 
 true and fundamental causes of our social misery, that all 
 political-liberal endeavor has become not merely indifferent and 
 a mere matter of form to us, but actually distasteful. We are 
 morally disgusted with such political liberalism if in view of 
 the intellectual and physical misery of the working classes . . . 
 it still chases its illusions." Hess, Die gesellschaftlichen Zu- 
 stdnde der civilisirten Welt, p. 2. 
 
i84 MARXISM VERSUS SOCIALISM 
 
 Marx started as a revolutionary democrat, and he 
 remained first and last a philosopher of revolution. 
 Not a phrasemonger but a profound dialectician, he 
 was forced to abandon abstract Germany. In Paris, 
 treading those hot pavements on v^hich the Revolution 
 of 1848 was hatching, breathing a heavy storm-laden 
 air, he studied the social movement. There he found 
 what his soul was craving: not logical antitheses, but 
 classes struggling, moving and making history. Was 
 it a momentary blaze, a people in fever? Even so, 
 when the people have such a fever it is the king who 
 dies. But no, it was no casual outburst. Nothing is 
 accidental in history. Inevitable is history's majestic 
 course ; it moves " nach cwigen, ehcren, grosscn Ge- 
 set^en," the key to which Marx felt in his hand. The 
 power, it seemed to him, was already in the hands of 
 that class to which his heart was so strongly drawn. 
 Then why not proclaim it, why not organize the mil- 
 lions of suffering humanity in the name of class strug- 
 gle? Why this talk about love and justice? Why 
 obscure the issue just at the moment when a clear 
 insight was needed? Why not tell the bourgeoisie 
 that the proletariat would do to them just what they 
 had done to feudalism, with the same right and the 
 same necessity? Thus Marx entered the scene, carry- 
 ing to their ultimate conclusion the class-struggle ideas 
 of the French and trampling at the same time upon the 
 various philosophical brands of home-made German 
 socialism. 
 
CHAPTER IX 
 
 THE MARXIAN CLASS-STRUGGLE 
 DOCTRINE 
 
 All political and historical philosophies have in 
 common one delightful quality: they are all very hu- 
 man; they all echo our hearts' desires; like clouds they 
 may vary in shape and color, yet they always tell us 
 from what corner the wind blows. Simple is the 
 make-up of our political philosophies; a little informal 
 logic and much specially prepared history. And yet 
 were it not for political and religious sectarianism we 
 might not have had any history at all. Facts were 
 gathered for a purpose, and they were interpreted, 
 whether by Tacitus or Orosius, Bossuet or Buckle, to 
 give a substance to a shadow, to prove and visualize 
 " what history teaches us." 
 
 Mephisto thus amused himself with social science: 
 
 '' Was ihr den Geist der Zeiten heisst, 
 Dass ist im Grund der Herren eigener Geist, 
 In dem die Zeiten sick bespiegeln/' ^ 
 
 But the poor devil did not seem to realize that just 
 because our histories and political doctrines truly re- 
 
 ^ " What you call the spirit of the times is in reality the spirit 
 of the hosts who mirror themselves in the times." 
 
 185 
 
i86 MARXISM VERSUS SOCIALISM 
 
 fleet our dreams, aspirations, hesitancies and fears, 
 these reflections are themselves historical monuments 
 of incalculable value. To criticise a political doctrine 
 abstractly and systematically is but our way of over- 
 coming it. Our criticism shows that the doctrine is 
 not somewhere back of us, where we can see it in per- 
 spective and see through it, but right in front of us, 
 barring our path; and our logical argument is a pas- 
 sionate effort. All these passionate arguments, all the 
 claims, ever so naive, of those that have come and 
 gone before us have become precious material for a 
 deeper and truer understanding of social life. 
 
 Marx is so close to us, his arguments are so cur- 
 rent, that we are compelled to take up each doctrine 
 of his by itself, analyze it and show where it is want- 
 ing. There is, however, a quality in Marxism of 
 which we must not lose sight. Marxism as a whole is 
 a class doctrine, a proletarian doctrine. Just as our 
 classical political economy damned labor with its Mal- 
 thusianism and its wage-fund theory, cursed the 
 landed interests with its rent theory and fought like a 
 wildcat with every ounce of its eternal principles 
 against any and every regulation on the part of the 
 state that might decrease the profits of the industrial 
 bourgeoisie, — just so is Marxism a class doctrine of 
 the industrial proletariat.^ Each of its theories 
 
 ^ " Marx's historical merit consists in the fact that he gave 
 to the proletariat a class doctrine that corresponded to the 
 imperative needs of the class struggle of the time, and this is 
 
MARXIAN CLASS-STRUGGLE DOCTRINE 187 
 
 breathes class feeling, whether it be the theory of 
 surplus value, that of concentration of capital or that 
 of increasing misery. Marx's scientific forecasts are 
 but class yearnings.^ His doctrine of class struggle 
 has the same quality : it is a doctrine exaggerated and 
 intensified by his class bias, by his hatred of the past, 
 by his hope of the future. Here his passions come 
 to a focus ; here his raptures are too exultant to bother 
 about conventionalities of objectivity, to care about 
 outward consistency. Here he failed, but failed mag- 
 nificently. The failures of the great often surpass 
 the achievements of mediocrity. Marx's doctrine, 
 with all its bias and all its faults, marks a signal ad- 
 vancement of our science. 
 
 There is an attempt on foot to make out of the 
 Marxian class-struggle doctrine an extension of the 
 
 the cause alike of the tremendous outward success and the inner 
 weakness of his system." Franz Oppenheimer, Das Grundgesets 
 der Marx'schen Gesellschaftslehre (Berhn, 1903), p. 146. 
 
 ^ " From the standpoint of the class struggle the great the- 
 oretical problem was: — the origin of surplus value, that is, the 
 scientific explanation of exploitation, and the tendency toward 
 socialization of methods of production, or the scientific explana- 
 tion of the objective foundations of the social revolution. 
 Both questions were answered in the first volume [of the 
 Capital], which inferred 'the expropriation of the expropriator* 
 as the inevitable outcome of the production of surplus value and 
 the advancing concentration of capital. The theoretical needs 
 of the labor movement were on the whole satisfied by this." 
 Rosa Luxemburg, " Stillstand und Fortschritt im Marxismus," 
 in Vorwdrts, March 14, 1903. The unconscious admission in 
 the last phrase of this Marxist writer is psychologically very 
 interesting. 
 
i88 MARXISM VERSUS SOCIALISM 
 
 Darwinian principle of struggle for life. Such an 
 interpretation is but a mouthful of big words that 
 sound impressive but mean nothing. The Marxian 
 version of the doctrine antedates Darwin's work by 
 twelve years. The class-struggle conception itself, as 
 we have seen, was set forth even earlier by Guizot 
 and his predecessors; the conception of historical 
 necessity and continuity was formulated by Hegel. To 
 bring Marx's economic interpretation of history into 
 the theory of universal evolution is at its best, as 
 Labriola puts it, " a new metaphor of a new meta- 
 physics." * And yet even Kautsky helped to confuse 
 the issue by making of Marx's class struggle a form of 
 the universal natural law of development.^ Lester F. 
 Ward has thus an excuse for making the erroneous 
 statement that " the socialists, for the most part, re- 
 gard the social struggle as a practical extension of the 
 biological struggle into the human field." ^ Fortu- 
 nately, we are in possession of a letter from Marx, 
 dated 1870, in which he characterizes the first attempt 
 to interpret social struggles in the light of the " strug- 
 gle for life " as cheap humbug.^ 
 
 * Labriola, Essays on the Materialistic Conception of History 
 (Chicago, 1908), p. 19. 
 
 ^ " For Marx, on the other hand, the class struggle was but 
 a particular instance of the universal law of evolution, whose 
 essential qualities are in no case peaceful." Kautsky, Die 
 historische Leistung von Karl Marx (Berlin, 1908), p. 15. 
 
 ® Lester F. Ward, " Social and Biological Struggles," Amer- 
 ican Journal of Sociology, vol. xiii (1907), p. 289. 
 
 ' Karl Marx, " Briefe an Dr. L. Kugelman," Neue Zeit, Jahrg. 
 
MARXIAN CLASS-STRUGGLE DOCTRINE 189 
 
 Let us see how Marx and Engels themselves looked 
 upon their class-struggle theory. They invariably ac- 
 knowledged Hegel as their teacher. It was Hegel who 
 first looked upon history as a necessary, uninterrupted 
 process of the evolution of mankind.^ This concep- 
 tion Marx and Engels adopted; but they could not 
 follow Hegel in his idealism; they did not accept his 
 theory that the evolution consisted in the realization 
 of the preexisting " Idea." Another very sound ob- 
 jection which they raised against Hegel's doctrine 
 was that " upon the one hand its essential proposition 
 was the conception that human history is a process 
 of evolution, which, by its very nature, cannot find its 
 intellectual final term in the discovery of any so-called 
 absolute truth. But on the other hand, it laid claim to 
 being the very essence of this absolute truth. A sys- 
 tem of natural and historical knowledge, embracing 
 everything and final for all times, is a contradiction to 
 the fundamental law of dialectic reasoning." ^ Fur- 
 
 XX, vol. ii (1902), pp. 541, 542. The following is an extract 
 from a letter dated June 27, 1870: "Mr. Lange {The Labor 
 Question, 2d ed.) praises me greatly, but merely to call atten- 
 tion to his own importance. One great natural law underlies 
 the whole of history. This natural law is the phrase — the 
 Darwinian expression employed in this way is but a phrase — 
 ' struggle for life,' and the import of this phrase is the Mal- 
 thusian doctrine of population, or rather his law of over- 
 population. It must be admitted that this is mental indolence 
 and a most impressive fashion of spreading bombastic ig- 
 norance masquerading as science." 
 
 ® Engels, Socialism, Utopian and Scientific (New York, 1901), 
 p. 24. * Ibid., p. 25. 
 
190 MARXISM VERSUS SOCIALISM 
 
 thermore, Hegel's conception of history knows nothing 
 of the relations of economic interests or of class 
 struggles based upon these interests. We already 
 know that Marx and Engels did not have to go far to 
 hear about or see these struggles. They were there, 
 on the spot, when Proudhon was cheerfully explaining 
 to the French bourgeoisie : '* Ce n'est pas Catilina, qui 
 est a vos portes, c'est la mort " (" It is not Catihne 
 who is at your gates; it is death"). But to proceed 
 with Engels's history of the doctrine : " The new facts 
 made imperative a new examination of all past his- 
 tory. Then it was seen that all past history, with the 
 exception of its primitive stages, was the history of 
 class struggles; that these warring classes of society 
 are always the products of the modes of production 
 and of exchange — in a word of the economic condi- 
 tions of their time; that the economic structure of 
 society always furnishes the real basis, starting from 
 which we can alone work out the ultimate explanation 
 of the whole superstructure of juridical and political 
 institutions as well as of the religious, philosophical 
 and other ideas of a given historical period. From 
 that time socialism was no longer an accidental dis- 
 covery of this or that ingenious brain, but the neces- 
 sary outcome of the struggle between two historically 
 developed classes — the proletariat and the bourgeoisie. 
 Its task was no longer to manufacture a system of 
 society as perfect as possible, but to examine the his- 
 torico-economic succession of events from which these 
 
MARXIAN CLASS-STRUGGLE DOCTRINE 191 
 
 classes and their antagonism had of necessity sprung, 
 and to discover in the economic conditions thus cre- 
 ated the means of ending the conflict." ^° 
 
 The development of the forces of production thus 
 took the place of Hegel's absolute ''Idea"; these 
 forces moved history, and they moved it through class 
 struggle. Every system of production necessitated cer- 
 tain relations of production, a certain division of labor 
 and certain legal institutions. In the last analysis, 
 accordingly, our own social order is dependent on our 
 own method of production. " As in religion man is 
 governed by the products of his own brain, so in 
 capitalist production he is governed by the products of 
 his own hand " ; and this, according to Marx, is equally 
 true of all preceding eras.'' Social production has 
 always brought about of necessity a division of labor, 
 and the division of labor has divided society into 
 classes. Despite all the multiplicity and variety to be 
 found in the social relations of the past ages, they 
 have one common trait — the exploitation of one part 
 of society by another.'^ It does not require deep 
 intuition to comprehend that a man's ideas and views 
 are influenced by the conditions of his material exist- 
 ence.'' Where the existence of one group depends 
 upon the exploitation of another group, the general 
 ideas of these two groups are bound to be antagonistic. 
 
 ^** Ibid., pp. 26-27. 
 
 "Marx, Capital (4th ed., London, 1891), pp. 634, 635. 
 
 ^"^ Communist Manifesto, p. 44. "-^ Ibid., p. 42. 
 
192 MARXISM VERSUS SOCIALISM 
 
 The oppressor and the oppressed must stand in opposi- 
 tion to each other; and ''the history of all hitherto 
 existing society is the history of class struggles." ^* 
 In all past ages we find a complicated division of so- 
 ciety into ranks and classes. In Rome patricians, 
 knights, plebeians, slaves; in the Middle Ages feudal 
 lords, vassals, guild-masters, journeymen, apprentices, 
 serfs. Modern society did not abolish class antag- 
 onisms; it only substituted new classes, new antag- 
 onisms, new forms of struggle in the place of the old 
 ones. But, Marx continues — and this, as we shall see, 
 is a crucial statement — '' Our epoch, the epoch of the 
 bourgeoisie, possesses, however, this distinctive fea- 
 ture ; it has simplified the class antagonisms. Society 
 as a whole is more and more splitting up into great 
 hostile camps, into two great classes directly facing 
 each other : Bourgeoisie and Proletariat." ^^ With the 
 development of industry the proletariat is concen- 
 trated in great masses; its strength increases, and it 
 becomes more and more conscious of its strength. The 
 industrial proletariat forms local combinations, trade 
 unions ; to keep up the rate of wages, they go through 
 the school of struggle. Modern means of communica- 
 tion soon bring all the local organizations into close 
 touch ; and thus the industrial proletariat becomes or- 
 ganized into a class, which is disciplined and ready for 
 battle. '' The proletarian movement is the self-con- 
 
 ** The opening words of the Communist Manifesto. 
 ^^ The Communist Manifesto, p. 13. 
 
MARXIAN CLASS-STRUGGLE DOCTRINE 193 
 
 scious, independent movement of the immense ma- 
 jority, in the interests of the immense majority. The 
 proletariat, the lowest stratum of our present society, 
 cannot stir, cannot raise itself up, without the whole 
 superincumbent strata of official society being sprung 
 into the air." ^^ The proletariat is therefore the only 
 really revolutionary class. Other classes are destined 
 to decay, while the proletariat is marching towards 
 victory. What is the proletariat clamoring for ? The 
 conquest of political power. Addressing himself di- 
 rectly to the dominant class, Marx says: " Your juris- 
 prudence is but the will of your class made into a law 
 for all, a will whose essential character and direction 
 are determined by the economical conditions of exist- 
 ence of your class ^^ . . . The executive of the mod- 
 ern state is but a committee for managing the common 
 affairs of the whole bourgeoisie." ^^ In order to ac- 
 complish its task the proletariat must first of all wrest 
 political power from the hands of all other classes. 
 Only through a dictatorship of the proletarian class 
 can the social revolution attain its object — socialized 
 production and, with it, the abolition of all classes. 
 The true socialist movement is a declaration of war, 
 of civil war, of revolution — Permanenzerkldrung der 
 Revolution! ^^ 
 
 ^'Ibid., p. 30. ^'Ihid., p. 39. "^'Ihid., p. 15. 
 
 i» " While the Utopia, the doctrinaire socialism, subordinates 
 the entire movement to one of its elements, and sets up in the place 
 of communistic, socialistic production the mental activity of a 
 single pedant, while it above all does away with the revolution- 
 
194 MARXISM VERSUS SOCIALISM 
 
 Thus, wc sec, Guizot was quite right in saying that 
 no class has ever made its appearance in human history 
 with more audacious demands — no sharing of power, 
 no compromise, but dictatorship by the proletariat and 
 the complete upheaval and uprooting of all existing 
 economic and social relationships. This end cannot 
 be achieved by Sunday-school picnics of parlor social- 
 ists, but only by a social revolution. " Let the ruling 
 classes tremble at a communistic revolution. The pro- 
 letarians have nothing to lose but their chains. They 
 have a world to win." '^^ And if promises are to be 
 made good, no quarter is to be given in the winning 
 of this new world. In the last number of Die neue 
 Rhcinische Zeitung Marx tells us : " We are ruthless 
 and want no consideration from you [the bourgeoisie]. 
 When our turn conies, revolutionary terrorism will not 
 be sugar-coated. . . . There is but one way of sim- 
 
 ary class struggle, together with all that this involves, hy little 
 measures and large sentimentalities, — while this doctrinaire so- 
 cialism which at bottom merely idealizes present society, picturing 
 it without shadows and opposing its own ideal to reality . . . 
 the proletariat is gathering more and more to the standard 
 of revolutionary socialism and communism, which the bour- 
 geoisie has had interpreted to it by Blanqui. This socialism is 
 the declaration of a permanent revolution, of the dictatorship of 
 the proletariat, and is a necessary agency and starting point for 
 the abolition of class differences, and of all conditions of produc- 
 tion upon which they rest, of all social relations which corre- 
 spond to these conditions of production, resulting in the over- 
 throw of all ideas which arise from these social conditions." 
 Karl Marx, Die Klassenkdmpfe in Frankreich: 1848- 1850 (Ber- 
 lin, i8c)S), PP- 94. 95- 
 *° The closing lines of the Communist Manifesto, 
 
MARXIAN CLASS-STRUGGLE DOCTRINE 195 
 
 plifying, shortening, concentrating the death agony of 
 the old society as well as the bloody labor of the new 
 world's birth — revolutionary Terror." ^^ Accordingly 
 the Communist Manifesto promises that, as soon as 
 the proletariat becomes the ruling class, the reorgan- 
 ization of society will begin " with despotic inroads on 
 the rights of property and on the conditions of bour- 
 geois production." The proletariat, however, is not 
 to remain permanently in dictatorship as a class, since 
 with the reorganization of society on the basis of 
 socialized production all classes will disappear. " Po- 
 litical power, properly so-called, is merely the organ- 
 ized power of one class for oppressing another. If the 
 proletariat during its contest with the bourgeoisie is 
 compelled by the force of circumstances to organize it- 
 self as a class, if by means of a revolution it makes it- 
 self the ruling class and, as such, sweeps away by force 
 the old conditions of production, then along with these 
 conditions it will have swept away the conditions for 
 the existence of class antagonisms and of classes gen- 
 erally, and will thereby have abolished its own su- 
 premacy as a class." "^ But the proletariat is not to 
 abdicate its dictatorship too soon. Let vengeance tri- 
 umph; like a blue flame, let it go through the hearts 
 of the people; as a red flame, let it blaze in the cities 
 and the towns. The leaders of the proletariat must 
 see to it " that the revolutionary excitement shall not 
 
 " Marx, in his newspaper, Die neue Rheinische Zeitung, No. 
 301, May 19, 1849. ^^ Communist Manifesto, pp. 46, 47. 
 
\ 
 
 196 MARXISM VERSUS SOCIALISM 
 
 subside immediately after the victory is won. On the 
 contrary, this excitement must be kept up as long as 
 possible. Far from stopping so-called excesses, exam- 
 ples of popular vengeance upon hated individuals and 
 public buildings, with which bitter memories are asso- 
 ciated, one must not only tolerate these examples but 
 lead and conduct them." ^^ 
 
 These are fruits from the tree of life, not from 
 the tree of knowledge. The angel of vengeance 
 penned these exhortations; yet they are illuminating 
 so far as Marx the man is concerned. " Ich bin das 
 Schwert und ich bin die Flamme " ("I am the sword 
 and I am the flame ")|Was a striking note in his life. 
 But his thought was deeper and more powerful. His 
 thought was constantly hunting down the cheap pet 
 notions of his revolutionary predecessors and contem- 
 poraries, but he could not always free himself from 
 their ideas. Hence his inconsistencies were many, and 
 some of them his followers have frankly acknowl- 
 edged. In speaking of religions, Feuerbach observes 
 that each religion is extremely rational and sensible 
 in its criticism of other religions ; but what it criticises 
 in another religion it will never question in its own 
 doctrine.^* This was equally true of Marxism. 
 
 But let us consider the class-struggle doctrine; and 
 
 ^^ Ansprache der Ceniralbehorde an den Bund, vom Mars, 
 1850: Anhang IX der Enthullungen iiber den Kommunisten- 
 process zu Koln (Hottingen-Zurich, 1885), p. 79. 
 
 ^*"A11 religions are rationalistic in their attitude toward each 
 other, but as far as they themselves are concerned they are 
 
MARXIAN CLASS-STRUGGLE DOCTRINE 197 
 
 let us ask, first of all, what is a " class "? Marx was 
 about to answer the question, when death interrupted 
 his work in the middle of a sentence; and the faithful 
 Engels, who edited the third volume of the Capital, 
 informs us : '' Hier bricht das Manuscript ab " (" Here 
 the manuscript breaks off"). But the answer is not 
 difficult : groups having similar sources of revenue and 
 conscious of similar or identical economic interests 
 may be called social classes. Of course a class does 
 not exist in flesh and blood, any more than the " ordo 
 felis " of the zoological textbooks. It is a matter of 
 grouping; and we accept an economic classification of 
 society as scientifically useful. The significance of 
 social classes, however, may easily be misinterpreted. 
 Marx dealt with such classes as political economy had 
 long dealt with the economic man. The economic man 
 is entirely actuated by his personal economic interests. 
 It is doubtful whether Wall Street could exhibit a per- 
 fect specimen of an economic man. The social class 
 is an ideal body of economic men whose economic in- 
 terests coincide : it represents a community of interests. 
 The social classes are in constant struggle. Do in- 
 terests always involve struggle? Are battle, murder 
 and sudden death in the self-interest of those that die? 
 A bullet in the breast is not in the interest of the one 
 that gets it, but a soldier dies that his country may 
 
 blind. For themselves they make an exception from a uni- 
 versal rule, but in others they dispute what in themselves they 
 never question." L. Feuerbach, Werke (Leipzig, 1846), vol. i, 
 p. 66. 
 
198 MARXISM VERSUS SOCIALISM 
 
 live. Acute and active struggle is never in the interest 
 of those that struggle, but it may be in the interest of 
 the nation, the group, the class. Those that participate 
 in such a struggle do so out of ideal devotion and loy- 
 alty to the group, not out of self-interest. This cir- 
 cumstance makes class psychology much more complex 
 than it appears to be in the Marxian scheme. The 
 economic interests of the individual are simpler than 
 his loyalties and devotions; and if class psychology is 
 based wholly or mainly on economic interests, without 
 due allowance for group loyalties, it becomes simple, 
 indeed, but it is inadequate. One's interests and one's 
 grievances will undoubtedly influence one's ideals ; but 
 to what extent it will influence them, and how much 
 of other traditional and broader lo)^alties and inhibi- 
 tions it will exclude — these are the real questions. 
 
 Marx admits that even our revolutions require tradi- 
 tions, historic memories, deeply rooted loyalties, that 
 overcome our personal fears and lead us to self-sacri- 
 fice and heroic action. Yet what he grants for the 
 immediate past, he denies to the immediate future; he 
 expects our social psychology to act to-morrow as if 
 a different mechanism were installed within us. He 
 tells us : *' The social revolution of the nineteenth 
 century cannot draw its poetry from the past, it can 
 draw that only from the future. It cannot start upon 
 its work before it has stricken off all superstition con- 
 cerning the past. Former revolutions required historic 
 reminiscences in order to intoxicate themselves with 
 
MARXIAN CLASS-STRUGGLE DOCTRINE 199 
 
 their issues. The revolution of the nineteenth century 
 must let the dead bury their dead in order to reach its 
 issue. With the former, the phrase surpassed the sub- 
 stance; with this one, the substance surpasses the 
 phrase." ^^ 
 
 It is well to bear in mind that a definition of a class 
 does not describe the actual make-up of the class or 
 indicate the character of the individuals that belong 
 to it. Every definition is, as Spinoza used to say, a 
 negation. In defining a class we emphasize character- 
 istics which that particular class possesses and other 
 classes do not possess; we emphasize the exclusive 
 characteristics; and in defining an economic class we 
 include from the start as a criterion of the class an eco- 
 nomic antagonism to other classes. Working with this 
 criterion, we cannot talk about solidarity of classes 
 with one another, because absence of such solidarity, 
 uncompromising antagonism to other classes, is what 
 in part constitutes a class. This is perfectly sound 
 logic; but only a man of unsound mind will fail to 
 see through it. Even Marx never taught that the 
 struggle of class definitions makes history. In real 
 life, regarded in all its aspects, a class is something 
 quite different from the definition. There is a co- 
 hesion, a solidarity in the society to which the indi- 
 vidual members of all the classes belong. There is 
 national solidarity, there is human solidarity, there 
 
 ^^ Karl Marx, The Eighteenth Brumaire of Louis Bonaparte, 
 translated by Daniel De Leon (New York, 1898), p. 7. 
 
200 MARXISM VERSUS SOCIALISM 
 
 are a thousand and one cross-sectional solidarities and 
 loyalties, all of which are ignored in our class defini- 
 tion. Even Kautsky has to admit that the whole is 
 bigger than any one of its constituent parts and that 
 
 I the common interests outweigh the class interests.^® 
 
 If we had class loyalties only, and if these were 
 
 entirely dominated by the economic interests of the 
 
 individuals who compose the classes, then Marx's 
 
 fundamental proposition, that the history of all hith- 
 
 I erto existing society is a history of class struggles, 
 
 ,' would be true. But this proposition is far from true. 
 In his preface to the second edition of Capital^ in 
 speaking of earlier English history, Marx states : " Its 
 
 "f political economy belongs to the period in which the 
 class struggle was as yet undeveloped." ^^ Thus on 
 the one hand we are told that all history, English his- 
 tory certainly not excluded, is a history of class strug- 
 gles, and on the other hand we are informed that in 
 the beginning of the nineteenth century class struggle 
 was as yet not developed in England. This is not 
 an unintentional slip, of which an unfair advantage 
 is here taken. The orthodox interpreter of Marx, 
 Karl Kautsky, modifies Marx's statement regarding 
 
 ''^ " The whole is greater than its parts. In the same way 
 the common interest, the social interest, outweighs class interest. 
 . . . You forget that it is possible to deny the solidarity of 
 classes, and still recognize the solidarity of mankind." 
 Kautsky, " Klasseninteresse, Sonderinteresse, Gemeininteresse," 
 Neue Zeit, Jahrg. XXI, vol. ii (1903), PP- 266, 274. 
 
 ^' Marx, Capital (EngHsh 4th ed., London, 1891), p. xxii. 
 
MARXIAN CLASS-STRUGGLE DOCTRINE 201 
 
 the importance of the class struggle by saying that 
 only under certain social conditions does class struggle 
 become the motive of history ^^ — a statement quite dif- 
 ferent from Marx's and of no conceivable use in 
 Marx's system. Marx assumes and is searching for a 
 steady continuity of the historical process. What 
 really constitutes the continuity of the so-called his- 
 torical process is the misinterpretation of the past in 
 the light of our anticipations of the future; and the 
 assumption that all history turns upon class struggle 
 is the particular misinterpretation which Marx's antici- 
 pations require. If class struggles flare up at times 
 only and do not grow in power and magnitude, what 
 assurance has Marx of the inevitable victory of the 
 proletariat and of the subsequent abolition of all 
 classes? To-day a furious class struggle may rage, 
 as it often did in the past; to-morrow social calm 
 may prevail. The mere vision and prophecy that ulti- 
 mately there will be no classes, that absolute equality 
 will reign, that here on earth we shall have the king- 
 dom of heaven, will neither elicit antagonism nor 
 attract energetic political support. Only results within 
 our sphere of vision, which as a rule is narrow, will 
 incite us to effort ; and the nearer our goal, the greater 
 our energy. That is why, in making social theories, 
 
 ^* " Only under certain social conditions is class struggle the 
 motive of history; it is always in the last analysis the struggle 
 with nature." Kautsky, Die historische Leistung von Karl 
 Marx (Berlin, 1908), p. 11. 
 
202 MARXISM VERSUS SOCIALISM 
 
 we always begin with the end, and adopt or manu- 
 facture a theory that promises the most immediate 
 accompHshment of the end. Can you show me a 
 popular socialistic theory that expects the realization 
 of its purpose in future centuries? I do not know 
 of any. Before the industrial development made any 
 substantial progress, Babeuf and Blanqui urged con- 
 spiracy and forcible overthrow; Fourier and Con- 
 siderant, Cabet, Owen, Thompson, Weitling and 
 others urged the immediate organization of voluntary 
 communities. 
 
 Philosophically advanced, but industrially backward, 
 the Germany of the forties believed in the power of 
 the educated few to mold and reconstruct society, be- 
 cause this was the only possible immediate relief that 
 faith could offer. Radical Russia greeted Marx's 
 works with prompt enthusiasm ; but in the sixties, sev- 
 enties and eighties Russia was a purely agricultural 
 country, without any industry, and therefore without 
 any industrial proletariat. Did the Russian socialists 
 propose to wait for the development of a capitalistic 
 industry? Not at all. They immediately abolished 
 Marx's economic interpretation of history. They ar- 
 gued that the capitalistic stage was entirely unnecessary 
 in Russia, and that Russia could develop its socialized 
 production, etc., from its village community, its mir.^^ 
 All that was required was the leadership and foresight 
 
 ^^ See SiMKHOviTCH, Feldgemeinschaft in Russland (Jena, 
 1898), Vorwort. 
 
MARXIAN CLASS-STRUGGLE DOCTRINE 203 
 
 of the heroic personahty; the masses were but passive 
 material. These doctrines of the so-called " Narod- 
 niki " ^^ were so firmly grounded in Russia that 
 Marx's economic interpretation of history, with his 
 class-struggle doctrine, his theory of concentration, 
 etc., could make no headway whatsoever till Russia's 
 industry began to develop with giant strides. Then 
 the theories of the " Narodniki " melted like snow 
 and orthodox Marxism swept the country. Belief in 
 the heroic personality gave way to faith in the pro- 
 letariat; but the collapse of capitalistic society and the 
 coming of the new social regime with all its glory 
 were expected, as before, in the immediate future. 
 Such is human nature. 
 
 What assurance of the future is contained in a 
 theory that at times social classes are in acute strug- 
 gle, but that these struggles are ordinarily followed 
 by some sort of peaceful modus vivendif Does such 
 a theory bring us any nearer to the promised land? 
 Clearly not. Hence Marx's desperate assertion that all 
 history is but a history of class struggles. 
 
 It is impossible to deny the significance and the influ- 
 ence of class struggles; but to reduce history to noth- 
 ing but class struggles is an impossible construction.^^ 
 
 '•^ SiMKHOviTCH, " Die sozial-okonomischen Lehren der rus- 
 sischen Narodniki," Conrad's Jahrhucher, 1897, Bd. xiv, pp. 
 641-678. 
 
 " The writer is quite in sympathy with the statement of 
 Tugan-Baranowsky : " The class struggle certainly cannot be 
 eliminated from history; it may even be assumed that of late 
 
204 MARXISM VERSUS SOCIALISM 
 
 What shall we do with the Napoleonic wars, with the 
 unification of Germany, with the Tartar conquest of 
 Russia? Can we interpret them in the light of class 
 struggle, as Bebel attempted to interpret the abolition 
 movement in America and the American Civil War ? ^^ 
 The discovery of printing and its influence upon the 
 cultural development of Europe may also claim a 
 place in history; but it would take greater inventive 
 genius than Gutenberg possessed to hitch his invention 
 to the class-struggle doctrine. 
 
 From the fact that all past history bears witness of 
 a subjection of one class to another, of an exploitation 
 of one class by another, Marx jumped to the con- 
 clusion that all history is a history of class struggles. 
 Class exploitation and class struggle are, however, 
 
 the value of this social element has increased considerably. 
 In spite of this, to-day as in the past, the history of mankind 
 and the history of class struggles by no means coincide, and the 
 assertion of Marx and Engels to the contrary may be char- 
 acterized as a great error." Tugan-Baranowsky, Theoretische 
 Grundlagen des Marxismus (Leipzig, 1905), p. 129. 
 ®^ ". . . Then the great movement for the abolition of slavery 
 t in America. There, according to Bernstein's point of view, 
 I there were ethical standpoints which were the determining 
 I factors in the case. (Laughter.) There was, to be sure, sym- 
 i pathy for the poor slaves. (Laughter.) We see that for the 
 j North American bourgeoisie it was well to do away with slave 
 
 I labor, and to clear the way for modern capitalistic development. 
 (Quite right!) Thousands of slaveholders were deprived of 
 '''" their property in slaves. From the ethical point of view that is 
 called plain theft. (Prolonged laughter.)" Protokoll iiber die 
 I Verhandlungen des Parteitages der sozialdemokratischen Partei 
 I Deutschlands, abgehalten zu Hannover, 1899, p. 121. 
 
MARXIAN CLASS-STRUGGLE DOCTRINE 205 
 
 widely differing conceptions. For instance, we read 
 in the Laws of Manu : " The Brahman is lord of the 
 castes. . . . Desertion of life for the sake of a 
 Brahman . . . causes the ultimate bliss of outcasts. 
 ... [A Cudra] should serve the Brahmans for the 
 sake of heaven, or for the sake of both heaven and 
 livelihood. . . . Merely to serve the Brahmans is 
 declared to be the most excellent occupation of a 
 Cudra ; for if he does anything other than this it profits 
 him nothing. . . . His means of life should be ar- 
 ranged by the Brahmans ... in accordance with 
 what is fitting. . . . The leavings of food should be 
 given him and the old clothes ; so too the blighted part 
 of the grain; so too the old furniture. . . . An ac- 
 cumulation of wealth should not be made by a Cudra 
 even if he is able, for a Cudra getting possession of 
 wealth merely injures the Brahmans." ^^ In this, as 
 in other parts of Manu, we have class legislation, 
 framed for purposes of class exploitation; but we are 
 not aware that the history of the Hindustani was a 
 history of class struggle. 
 
 All our economic relations are formulated in law. 
 " The rules of the law," as Brooks Adams observes, 
 " are established by the self-interest of the dominant 
 class, so far as it can impose its will upon those who 
 
 ®' The Ordinances of Manu, translated by A. C. Burnell, com- 
 pleted and edited by E. W. Hopkins (London, Triibner, 1884), 
 Lecture X, Sees. 3, 62, 122-125, 129. 
 
2o6 MARXISM VERSUS SOCIALISM 
 
 are weaker." ^* But the weaker were never weak 
 numerically ; they were weak because, for varying his- 
 torical reasons, they did not assert themselves and did 
 not struggle. Abject inertia, class submission, endur- 
 ance without resistance, are phenomena quite as im- 
 pressive as class struggle. It is this circumstance that 
 led Loria to the very exaggerated ^^ statement : " It 
 is not beliefs and ideas in general that constitute a 
 factor in history, but only the special beliefs and ideas 
 of the proprietary class. Beliefs and ideas were pres- 
 ent in the hearts and minds of the slaves, the serfs 
 and the wage-earners, but these beliefs and ideas have 
 had not the least effect upon the march of history, 
 for they have always been repressed by the beliefs 
 and ideas of the patricians, the feudal lords and the 
 capitalists." ^^ 
 
 The only explanation we can give for the amazing 
 class submission of the past is the fact that the ruling 
 class was organized. Its organization was the state; 
 it therefore could prevent and discourage any organ- 
 ization of the exploited classes; it could also control 
 and hold in check the dissemination of ideas sub- 
 versive of its interests. Last but not least, the ex- 
 
 ^* Melville M. Bigelow, Centralisation of the Law, Lecture I ; 
 Brooks Adams, Nature of Law, p. 45. 
 
 ^^ Loria overlooks the fact that the ideas of the ruling class 
 take account of the ideas of the lower classes and reckon on 
 their possible resistance. 
 
 ^® AcHiLLE Loria, The Economic Foundations of Society, 
 translated by Lindley Keasbey (London, 1899), p. 371. 
 
MARXIAN CLASS-STRUGGLE DOCTRINE 207 
 
 ploited class was as a rule scattered all over the 
 country in small groups, which circumstance alone 
 offered a practically insurmountable difficulty to or- 
 ganization, i.e., to power. 
 
 The passive character of the German peasantry 
 Marx himself was obliged to acknowledge : " The 
 small freeholders, the feudal tenants and the agri- 
 cultural laborers never troubled their heads much 
 about politics before the Revolution. ... It is 
 quite as evident and equally borne out by the history 
 of all modern countries that the agricultural popula- 
 tion, in consequence of its dispersion over a great 
 space and of the difficulty of bringing about an agree- 
 ment among any considerable portion of it, never can 
 attempt a successful independent movement." ^^ 
 
 So much in regard to class struggles in the past ; let 
 us now turn to Marx's views of class struggle in his 
 own days. In his view, the struggle becomes simpli- 
 fied: it narrows down to a struggle between two 
 classes, capitalists and proletarians. The city rules the 
 country; the middle class is being wiped out, pushed 
 down into the ranks of the proletariat; and as the 
 legions of the proletariat are swelling, concentration 
 of capital is rapidly diminishing the number of cap- 
 italists. Thus the last ruling class is tottering to its 
 grave. These are startling assertions, very impor- 
 tant if true; and the first question that naturally sug- 
 
 ^^ Karl Marx, Revolution and Counter-Revolution, or Ger- 
 many in 1848 (London, 1904), pp. 10, 11. 
 
2o8 MARXISM VERSUS SOCIALISM 
 
 gests itself is : on what concrete political experiences 
 are these generalizations based? 
 
 Marx was a careful student of the French social 
 movement of the time, and we have two valuable 
 monographs of his on the French revolutionary move- 
 ment. Both of them are determined efforts to inter- 
 pret the movement in the light of his doctrine. These 
 two monographs were written in 1850 and 185 1. The 
 failure of the Revolution he regarded as only a tem- 
 porary check; the breakdown of the capitalist system 
 and the victory of the proletariat he expected in the 
 immediate future. 
 
 French society, however, did not present itself to 
 him as divided into two classes only; rather do we 
 find him dealing with a whole series of classes. At the 
 outset he informs us that it was not the French bour- 
 geoisie that ruled under Louis Philippe, but only a 
 fraction of it : the financial magnates and the stock- 
 exchange manipulators. The industrial bourgeoisie 
 (the manufacturers) were in opposition, the peasant 
 class and the petty bourgeoisie (small traders, etc.) 
 were excluded from any participation in the affairs 
 of state. We are also told that the large landed pro- 
 prietors, who ruled under the July monarchy, were 
 legitimist, and therefore opposed to the Orleanist gov- 
 ernment.^^ In fact Marx enumerates even more 
 
 °^ Marx, The Eighteenth Brumaire of Louis Bonaparte (New 
 York, 1898), p. 18; Die Klassenkdmpfe in Frankreich (Berlin, 
 1895), p. 20. 
 
MARXIAN CLASS-STRUGGLE DOCTRINE 209 
 
 classes that were opposed to the June insurrection of 
 the Paris proletariat. " The bourgeois republic won. 
 On its side stood the aristocracy of finance, the indus- 
 trial bourgeoisie; the middle class, the small traders 
 class; the army; the slums, organized as Garde Mobile; 
 the intellectual celebrities; the parson class, and the 
 rural population." ^^ Have any of these classes dis- 
 appeared? Have they been pushed down into the 
 ranks of the proletariat? In a preceding chapter I 
 have shown that middle-class incomes are on the in- 
 crease in every civilized country ; that the peasant class 
 and the farmer class are increasing in strength and 
 prosperity; and that the conception of a steadily di- 
 minishing number of capitalists (one capitalist killing 
 many) is a chimera.*^ Where then is the basis for 
 the statement that class struggle is reduced to a con- 
 test between capitalists and proletarians? And does 
 even the industrial city population form a single po- 
 litical class ? Marx himself distinguishes the so-called 
 social slum (Liimpenproletariat) as not only not revo- 
 lutionary, but as ever ready material for a reactionary 
 movement, the bribed tool of the counter-revolution. 
 But how is one to distinguish the reactionary slum 
 proletarian from the genuine proletarian? Marx de- 
 scribes the slum proletarians as gens sans feu et sans 
 afueii, la^zaroni, criminals, procurers, the offal and 
 wreck of all classes.*^ But is it not remarkable that 
 
 °" Marx, Eighteenth Brumaire, p. 10. *" See Chaps. IV and V. 
 *^ " They belong in great part to the slum proletariat which in 
 
210 MARXISM VERSUS SOCIALISM 
 
 Marx could distinguish this section of the proletariat 
 at a glance while, according to his own statement, the 
 working people of Paris could not ? Thus they cheered 
 the Garde Mobile (whom Marx describes as the organ- 
 ized slums), recognizing in them their fellows and 
 friends who fought in February on the barricades.*^ 
 But whether Marx is right or wrong in his character- 
 ization of the non-revolutionary proletariat, this much 
 is clear: a very large portion of the so-called pro- 
 letarian population cannot be relied upon to fight the 
 proletarian battles! Immediate personal interests on 
 the one hand, traditional ideals and national spirit on 
 the other, are powerful factors against class spirit, 
 especially when the latter demands personal sacrifices. 
 Perusing Marx's own story of the French struggles 
 of 1848 and of the rise of Louis Bonaparte to power, 
 we come to the self-evident and platitudinous con- 
 clusion that, if one class presses its own interests to 
 the point of jeopardizing the interests of all other 
 classes, the latter will temporarily lay aside their dif- 
 
 all large cities forms a class entirely distinct from the indus- 
 trial proletariat, and which is a recruiting ground for thieves 
 and criminals of all kinds. Its members, living on the refuse 
 of society, are without any definite occupation, idlers, * gens 
 sans feu et sans aveu,' diversified as the structure of the 
 nation to which they belong, and always * lazzaroni.' " Marx, 
 Die Klassenkdmpfe in Frankreich, pp. 33, 34. 
 
 ^'^"To oppose the Paris proletariat, an army of 24,000 young, 
 strong, foolhardy men were chosen from their own midst. 
 This garde mobile was cheered by the proletarian masses. They 
 recognized in them their heroes of the barricades." Ibid., p. 34. 
 
MARXIAN CLASS-STRUGGLE DOCTRINE 211 
 
 ferences and the aggressive class will come to grief. 
 Louis Philippe and the financial aristocracy managed 
 to exasperate not only the working class, but also the 
 manufacturing interests, the merchants, the tradespeo- 
 ple, the landed proprietors, until all these classes 
 united and contributed to the success of the February 
 revolution/^ The triumph of Louis Bonaparte is at- 
 tributed by Marx to the peasantry. '' It was a reac- 
 tion of the farmers' class, who had been expected to 
 pay the costs of the February revolution." ** " The 
 French government does not float in the air. Bona- 
 parte represents an economic class, and that the most 
 numerous in the commonwealth of France — the allot- 
 ment farmer." ^^ And this most numerous class is re- 
 garded by Marx as the true representative of barbar- 
 ism within the border-lines of civilization.*^ It was 
 
 ** " The provisional government which rose from the February- 
 barricades necessarily reflected in its composition the different 
 parties which divided the victory. It could be nothing but a 
 compromise of the different classes who had together overturned 
 the throne in July, but whose interests were nevertheless antag- 
 onistic. The great majority of its members consisted of repre- 
 sentatives of the bourgeoisie. The Republican small bourgeoisie 
 was represented by Ledru Rollin and Flocon, the Republican 
 bourgeoisie by writers for the National, the dynastic opposi- 
 tion by Cremieux, Dupont de TEure, etc. The laboring class 
 had only two representatives, Louis Blanc and Albert." Ibid., 
 pp. 24, 25. 
 
 ** Marx, The Eighteenth Brumaire, p. 17. 
 
 *" Ibid., p. 70. 
 
 *^ " The loth of December, 1848, was the day of the peasant 
 insurrection, and from that day dated the February revolution 
 of the French peasantry. What marked their entrance into 
 
212 MARXISM VERSUS SOCIALISM 
 
 not, however, the peasantry alone that tendered Louis 
 Bonaparte the crown. According to Marx he was for 
 various reasons the favorite of all parties : Louis was 
 the " chief of the slum proletariat." *^ The aristocracy 
 of finance hailed every victory of Louis over the par- 
 liament as a " victory of order," and he was recognized 
 as the guardian of order on every stock exchange in 
 Europe.^^ The mass of the bourgeoisie craved the pro- 
 tection of a strong and unhampered government to the 
 end that " it might ply its own private pursuits in 
 safety." *^ Manufacturing interests forgot their op- 
 position to the exchange manipulators : " What is a 
 diminution of profits by financial manipulators to an 
 abolition of profit by the proletariat? " ^^ Finally, the 
 whole bourgeoisie, " in this unspeakable and noisy con- 
 fusion of fusion, revision, prorogation, constitution, 
 conspiracy, coalition, emigration, usurpation and revo- 
 lution, blurts out at his parliamentary republic: 
 ' Rather an end with fright, than fright without 
 end.' " ^^ Thus ended the second republic, showing 
 
 the revolutionary activity was an expression of clumsy cunning, 
 of rascally naivete, of doltish, sublime and calculated superstition; 
 it was a pathetic burlesque, an anachronism at once the work 
 of genius and stupidity, a harlequinade of greatest historical 
 importance, a hieroglyph undecipherable to a civilized mind; — it 
 marked unmistakably and characterized the one class which 
 represented barbarism in the midst of civilization." Marx, Die 
 Klassenkdmpfe in Frankreich, pp. 50, 51. 
 
 *'' Marx, Eighteenth Brumaire, p. 41. 
 
 *« Ihid., p. 58. " Ihid., p. 60. 
 
 '^^ Marx, Die Klassenkdmpfe in Frankreich, p. 84. 
 
 •** Marx, Eighteenth Brumaire, p. 62. 
 
MARXIAN CLASS-STRUGGLE DOCTRINE 213 
 
 a remarkable solidarity of classes in the face of a 
 threat, real or imaginary, of economic disorganiza- 
 tion. 
 
 But the revolution of 1848 and Bonaparte's coup 
 d'etat belong to the past. How about the present? 
 The industrial proletariat has undoubtedly grown ; but 
 so has the political insight of the other classes. As 
 we have already seen, the middle class and the farmers 
 have not been swept away; the capitalist magnates, 
 instead of diminishing, have grown in number, and 
 they have grown relatively much faster than the pro- 
 letariat. Marx expected increasing bitterness of class 
 struggle because of increasing misery. In a previous 
 portion of this study it has been conclusively shown 
 that the situation of the working class has improved 
 greatly in the last sixty years. So this prophecy of 
 Marx has also failed of fulfilment. 
 
 Representative government based on manhood suf- 
 frage has changed the character of so-called class 
 struggles. It has increased their magnitude but dimin- 
 ished their intensity. It has taken from them the bitter 
 quality and the revolutionary character which were so 
 striking in the class struggles of the past. It is rea- 
 sonable that it should be so. Every law regulating 
 civil affairs affects various interests. When legisla- 
 tion was in the hands of privileged classes, and others 
 were excluded from power, even self-expression was 
 restricted or prohibited. When, for example, the po- 
 litical struggle of interests was limited to the landed 
 
214 MARXISM VERSUS SOCIALISM 
 
 and moneyed classes, the interests of the farmer and 
 of the laboring city population found no expression; 
 the ruling classes walked over them. But they walked 
 over a volcano. The moment the disfranchised classes 
 were able to organize, their power became dangerous 
 to the very existence of the state, because in the state 
 they saw their enemy, in its laws, the enemy's weap- 
 ons. The only thing that could save the state was the 
 irrational character of the revolt. Take Russia as an 
 example. There was no peasant class struggle before 
 1905, but the bitterness was there. No sooner was 
 the state compromised and disorganized by the 
 Japanese victories, than twenty-nine millions' worth 
 of property was burned by the peasants. In the Oc- 
 tober days the council of labor delegates ruled Peters- 
 burg. All the peasant and labor deputies in the Duma 
 demanded expropriation of the nobility, expropriation 
 without any indemnity even from the state. These 
 and similar demands defeated the Russian revolution 
 and restored to the tsar's government its power. 
 
 In modern representative government every pro- 
 posed tax and every proposed law is disputed by the 
 interests which will be affected. These disputes may 
 be called class struggles, but they are struggles of a 
 different character. They are not revolutionary, they 
 are not pushed to the point of antagonizing all other 
 interests; and in these struggles there gradually de- 
 velops an appreciation of the various interests and of 
 their actual power. What has proven itself necessary 
 
MARXIAN CLASS-STRUGGLE DOCTRINE 215 
 
 a posteriori soon becomes an a priori virtue ; men fight, 
 but they do so as citizens acknowledging the superior- 
 ity of the interests of the commonweahh as a whole 
 over their particular interests. Thus a larger patriot- 
 ism develops — the patriotism of a truer democracy. 
 All this has been clearly set forth by the friend and 
 literary executor of Marx and Engels, Eduard Bern- 
 stein, who assuredly had no other reason for acknowl- 
 edging this fading of class struggles and this growth 
 of a nobler and more disinterested social spirit than 
 his own experience and observation of political facts 
 and tendencies during his long and honest political 
 career.^^ 
 
 ''^"Regarding this 'historical' conception of Kautsky's I ven- 
 ture to make the ' commercial ' remark that man has two souls, 
 so to say, a double moral bookkeeping. He is placed in modern 
 society as an individual, or a member of a group or class, more 
 or less in opposition to the community, from which no one 
 is exempt, not even the workman, so far is his ultimate good 
 coincident with that of the community. Each individual, how- 
 ever, is at the same time a citizen, — for the modern state recog- 
 nizes no fixed distinctions, — and as such necessarily develops 
 interest in the commonwealth, even if he attempts to impose its 
 cost on another class than his own. The opposing interests of 
 the classes will fight it out partly on the battle-ground of 
 economic competition (which includes the trade union strug- 
 gle), and partly — and this in constantly greater degree — in the 
 legislature. From the strife of class interests the common 
 interest will slowly evolve, and the more prominent the common 
 interest becomes the more democratic the commonwealth. With 
 the advance of democracy the class struggle must gradually 
 assume aspects different from those in a state where political 
 class privilege prevails. There will still be strife, but it will be 
 through speech, through the press, and through the ballot, and 
 
2i6 MARXISM VERSUS SOCIALISM 
 
 We are talking about the increase of peace and 
 good-will on earth, but it will be pointed out to us 
 that in this fair country class struggles are raging as 
 never before. We shall be asked whether the com- 
 parison of the chronicles of our own days with the 
 histories of the past does not justify Marx and the so- 
 cialist doctrine. Class struggle has found its way even 
 into American literature, in poetry and in art. Is not 
 our social life characterized in the lines of William 
 Vaughn Moody: 
 
 " From the patient and the low 
 I will take the joys they know; 
 They shall hunger after vanities and still an-hun- 
 
 gered go; 
 Madness shall he on the people^ ghastly jealousies 
 
 arise; 
 Brother's blood shall cry on brother up the dead 
 
 and empty skies/' 
 
 all parties which bespeak the vote of democracy must pay 
 tribute to the common welfare. This naturally will not come 
 to pass without hypocrisy, but hypocrisy in this instance is 
 exactly the tribute which class egotism pays to the common 
 interest, often enough with gnashing of teeth. Willingly or 
 unwillingly, however, the ultimate result will be the same: 
 class interest will give way, and the common interest gain in 
 power. The law-giving power will at once grow stronger in its 
 opposition to the strife of economic forces, and will eventually 
 exert jurisdiction over what formerly was exposed to the blind 
 struggle of particular interests." Bernstein, Sozialistische 
 Kontroversen (Berlin, 1904), pp. 68, 69. 
 
MARXIAN CLASS-STRUGGLE DOCTRINE 217 
 
 Two distinct points are implied in such contentions. 
 First, that class struggles characterize the American 
 life of to-day and did not characterize it in the past; 
 secondly, that the class struggle of the industrial pro- 
 letariat is gaining in volume, power, bitterness and 
 political significance. 
 
 If by class struggles we mean evidences of friction 
 of various interests, they have perhaps increased in 
 volume. This is only natural in a rapidly developing 
 country with a rapidly decreasing amount of elbow- 
 room. That friction of interests did not exist in this 
 country in the past is, however, an erroneous impres- 
 sion caused by an optical illusion. Our point of view 
 has shifted. At present we are increasingly inclined 
 to look at politics and history from a social and eco- 
 nomic point of view, and, as a result, we see what 
 we are looking for — struggles between the several eco- 
 nomic interests. Our conviction that class struggles 
 are increasing is due in large measure to a more real- 
 istic and practical point of view in our political science. 
 
 The second implication, namely, that the proletarian 
 class is growing in strength and in class consciousness 
 and is marching towards victory, I am constrained to 
 deny altogether. 
 
 Class struggle and proletarian class struggle in the 
 Marxian sense are two very different conceptions. A 
 struggle of farming interests with manufacturing in- 
 terests is a class struggle. It has, however, no bear- 
 ing upon the victory of the proletariat or upon the 
 
2i8 MARXISM VERSUS SOCIALISM 
 
 advent of socialism. The only class-conscious strug- 
 gle that is of momentous significance to Marxian 
 socialism is that of the industrial proletariat, and 
 nowhere is this class weaker nor are its chances 
 of development anywhere slighter than in these 
 United States. There are many reasons for this. 
 
 First of all, the steady stream of immigrants of 
 numerous races, creeds and tongues is bound to retard 
 the growth of class solidarity. The radicals of old 
 failed in their monumental attempt because of the 
 confusion of tongues, and the tower of Babel remained 
 unfinished. Our radicals of to-day cannot even begin 
 with their new tower; the crowd is too motley, the 
 diversity of its component elements too great; what it 
 has in common is confusion, not solidarity. 
 
 Secondly, our modern industrial organization is of 
 such a nature that it undermines proletarian class con- 
 sciousness. John R. Commons expresses it admirably 
 in his article on the subject : " Promotion, where speed 
 is the standard, has rich possibilities compared with 
 old forms of promotion based on skill. Under the 
 older forms, workmen came into the various skilled 
 trades by several side entrances of apprenticeship, and 
 each trade had its narrow limits upward. Under the 
 newer forms, the workmen nearly all come in at the 
 bottom, and the occupations are graded by easy steps 
 all the way to the top. The ambitious workman ad- 
 vances rapidly, and with every step his rate of pay 
 increases and his work gets easier. But he remains all 
 
MARXIAN CLASS-STRUGGLE DOCTRINE 219 
 
 the time a part of a gang, and his earnings depend on 
 the exertions of those below him. As he approaches 
 the head of his gang he has the double job of a man 
 who gets wages as a workman and profits on his 
 fellow-workman. He begins to be paid both for his 
 work and for making others work. Quite generally 
 it will be found that the headmen of a gang are paid 
 disproportionately high for the skill they are supposed 
 to have. The difference is a payment, not for me- 
 chanical skill, but for loyalty. They keep their fellows 
 up to the highest pitch of exertion and they stand by 
 the company in times of discontent. Their promotion 
 is not a mere outlet for agitation; it is a lid on the 
 agitation of others. But there is still further room for 
 promotion, when the workman becomes a foreman, 
 superintendent or manager. Here he ceases manual 
 work and keeps others at work. He gets a salary, 
 often a bonus or a share in the profits, depending for 
 its amount upon the work of his former fellows. Thus 
 it is that a wise system of promotion becomes another 
 branch of industrial psychology. If scientifically man- 
 aged, as is done by the great corporations, it produces 
 a steady evaporation of class feeling. I have often 
 come upon fiery socialists and ardent trade unionists 
 thus vaporized and transformed by this elevating 
 process." ^^ This principle of promotion from one 
 class to another is fatal to the organization of a pro- 
 
 ^' John R. Commons, " Class Conflict in America," The Amer- 
 ican Journal of Sociology, vol. xiii (Chicago, 1908), pp. 760, 761. 
 
220 MARXISM VERSUS SOCIALISM 
 
 letariat in our democratic commonwealth, because it 
 tends to leave the lower strata without able leaders. 
 At the same time it carries fresh force and intelligence 
 into that class which, according to the socialist theory, 
 is bound to disappear. 
 
 In the third volume of Capital Marx shows that he 
 is half conscious of the situation. Speaking of credit, 
 he points out that credit permits the able man without 
 capital to function as a capitalist ; and he remarks that 
 a class which readily takes into its own ranks the 
 ablest men of the lower strata makes its rule more 
 solid and more dangerous.^* This is obviously true; 
 and it is equally true that nowhere are the doors of 
 opportunity more widely open, that never was a cap- 
 italist class more ready to welcome into its ranks men 
 of promise and ability, than in the United States. 
 Such conditions are fatal to a proletarian movement. 
 Where there is no prejudice against a man because he 
 started as a laborer, the ex-laborer cannot be expected 
 to adhere to the class from which he has emerged. His 
 advice is : Do likewise ; and his example is one of en- 
 couragement. 
 
 Under such conditions a proletarian movement is 
 confronted by a peculiar dilemma. The man that is 
 fit to be a leader, an organizer of the proletariat, is 
 no longer himself a proletarian. His ability raises 
 him above his class ; he belongs potentially to another 
 class. He is fit to be a successful manager of a mill; 
 
 '* Marx, Das Kapital, vol. iii, Part I (Hamburg, 1894), p. 140. 
 
MARXIAN CLASS-STRUGGLE DOCTRINE 221 
 
 he can join the capitaHst class at any time. And 
 is there in this country so deep-seated a prejudice 
 against personal and material success as to restrain 
 a man from succeeding economically and socially ? If 
 labor in the United States is not content to be led by 
 cheap men, it must find men actuated by more ideal 
 motives and ready to make greater sacrifices than the 
 political and social tone of this country authorizes it 
 to expect. 
 
 But we shall be told that the test is in the results, 
 and that trade unionism is growing. This statement 
 at once raises the question: is trade unionism a pro- 
 letarian class movement? This question is one which 
 cannot be adequately discussed in a few pages. A few 
 points, however, may be noted. The aim of trade 
 unionism is to improve the conditions of the wage- 
 worker; the aim of socialism is .to abolish wage labor. 
 The Marxist expects the revolt of the proletarian class 
 because of its increasing misery; he expects no revolt 
 because of better conditions of existence. What the 
 Marxist likes about trade unionism is that it organ- 
 izes wage-workers and trains them in local and partial 
 class struggles; what he dislikes in trade unionism 
 is its exclusiveness, its refusal to take in more than 
 a small portion of the proletarian class. A few 
 months ago Kautsky's Erfurter Programm was trans- 
 lated into English under the title. The Class Struggle. 
 There we read : '' Far-sighted politicians and indus- 
 trial leaders have not been slow to take advantage of 
 
222 MARXISM VERSUS SOCIALISM 
 
 this condition. To-day the worst enemies of the work- 
 ing class are not the stupid, reactionary statesmen 
 who hope to keep down the labor movement through 
 openly repressive measures. Its worst enemies are the 
 pretended friends who encourage craft unions, and 
 thus attempt to cut off the skilled trades from the rest 
 of their class. They are trying to turn the most ef- 
 ficient division of the proletarian army against the 
 great mass, against those whose position as unskilled 
 workers makes them least capable of defense." ^^ The 
 tendencies of American socialism and American trade 
 unionism are so different that little love is lost between 
 the two camps. 
 
 Moreover, the prospects of trade unionism itself are 
 not wholly encouraging in this country. It has en- 
 countered and still encounters great difficulties. Com- 
 mons writes in the article already cited : "Of the 
 6,000,000 wage-earners mentioned, possibly 2,000,000 
 are organized in unions. But the unions have prac- 
 tically disappeared from the trusts, and are disappear- 
 ing from the large corporations as they grow large 
 enough to specialize minutely their labor. The- organ- 
 ized workmen are found in the small establishments 
 like the building trades, or the fringe of independents 
 on the skirts of the trusts; on the railways where skill 
 and responsibility are not yet displaced by division of 
 
 " Kautsky, The Class Struggle, p. 182. The English transla- 
 tion differs from the German text (2d ed., Stuttgart, 1892), 
 where the original of the passage cited will be found on p. 213. 
 
MARXIAN CLASS-STRUGGLE DOCTRINE 223 
 
 labor; in the mines where strike-breakers cannot be 
 shipped in; on the docks and other places where they 
 hold a strategic position. While the number of organ- 
 ized workmen shows an increase in these directions, it 
 shows a decrease in the others. It is in these organ- 
 ized industries that the class conflict appears, and there 
 the lines are drawing tighter. It is there that em- 
 ployers' associations are forcing employers into line 
 and are struggling to do for the medium employer 
 what the trust does without association. But most of 
 the unions in question are not unions of a class. They 
 are unions of a trade or a strategic occupation." ^^ 
 
 We are forced to the conclusion that the proletarian 
 class movement is in this country a negligible quantity. 
 In all the criss-cross class struggles capital is signally 
 victorious. The victories of corporate wealth have 
 been so overwhelming that what capital is facing to- 
 day is a coalition of all smaller interests in the name 
 of democracy. 
 
 We all know that the Constitution, as interpreted 
 by the courts, has given capital a strong position. The 
 fourteenth amendment, intended for the benefit of the 
 negroes, protects capital from so-called " class legisla- 
 tion." In the opinion of many Americans, the con- 
 stitutional position of capital is impregnable and the 
 sovereignty of the state is denied; but, if so, it is so 
 from a static point of view only. Social life is any- 
 
 "^ J. R. Commons, " Class Conflict in America," The American 
 Journal of Sociology, vol. xiii, p. 759. 
 
224 MARXISM VERSUS SOCIALISM 
 
 tiling but static. I therefore do not ap^rec with Presi- 
 dent Hadley's statement that *' the fundamental di- 
 vision of powers in the Constitution of tlic United 
 States is between voters on the one hand and prop- 
 erty owners on the other." '''^ In tlic long run the con- 
 stitution of a country means precisely what the voters 
 want it lo mean. These voters of course represent 
 divergent interests and strife is inevitable; but so is 
 its democratic outcome — a just balance of interests. 
 
 '' And rived storms abroad arc surging 
 From sea lo land, from land to sea, 
 A chain of deepest action forging 
 Round all, in zvrathfid energy. 
 There flames a desolation, blading 
 Before the thunder's crashing 7vay; 
 Yet, Lord, Thy messengers are praising 
 The gentle movement of Thy day.' 
 
 ff 08 
 
 " Hadley, " Tlic Constitutional Position of Property in Amer- 
 ica," The Indc/Hmdent, April i6, 1908. 
 '"' Faust: " Prologue in Heaven." 
 
CHAPTER X 
 ,THE THEORY OF CRISES 
 
 In Marx's map of life all the paths and all the by- 
 ways led to the great social revolution ; all the streams 
 and all the currents were hurrying on to the great 
 cataract, the cataclysm of the capitalist order of so- 
 ciety. In his scheme of events Marx conceded us no 
 chances whatever. No matter from what angle we 
 might view our future, our doom was foreordained. 
 The concentration of industry and agriculture, the so- 
 cialization of all production, the massing of all wealth 
 and capital in the hands of the few; the disappearance 
 of the middle class, the steadily growing antagonism 
 between the two remaining classes, the increasing 
 misery of the proletariat and the rapid approach of 
 a life and death struggle between labor and capital; the 
 overwhelming legions of the proletariat, and the 
 dwindling numbers of the capitalistic magnates — all 
 these tendencies were making socialism inevitable. In 
 this reasoning there seemed to be no break or flaw; 
 every link in the chain was forged securely ; and, with 
 the faith that Marx had in the tendencies that he 
 described, the social revolution and the complete tri- 
 umph of socialism seemed equally assured. 
 
 225 
 
226 MARXISM VERSUS SOCIALISM 
 
 Independently of all these tendencies, however, 
 seeds of corruption were disintegrating our social 
 fabric, the walls of our city were shaking, and they 
 were to fall and crumble before new life was to spring 
 up on their ruins. Let me quote again from the Com- 
 munist Manifesto : " Modern bourgeois society with its 
 relations of production, of exchange and of property, 
 a society that has conjured up such gigantic means of 
 production and of exchange, is like the sorcerer who 
 is no longer able to control the powers of the nether 
 world whom he has called up by his spells. . . . It is 
 enough to mention the commercial crises that by their 
 periodical return put on its trial, each time more 
 threateningly, the existence of the entire bourgeois 
 society. ... In these crises there breaks out an 
 epidemic that, in all earlier epochs, would have seemed 
 an absurdity — the epidemic of overproduction. So- 
 ciety suddenly finds itself put back into a state of mo- 
 mentary barbarism; it appears as if a famine, a uni- 
 versal war of devastation had cut off the supply of 
 every means of subsistence; industry and commerce 
 seem to be destroyed ; and why ? Because there is too 
 much civilization; too much means of subsistence, too 
 much industry, too much commerce. The productive 
 forces at the disposal of society no longer tend to 
 further the development of the conditions of bourgeois 
 property; on the contrary, they have become too pow- 
 erful for the conditions by which they are fettered. 
 . . . The conditions of bourgeois society are too 
 
THE THEORY OF CRISES 227 
 
 narrow to comprise the wealth created by them. And 
 how does the bourgeoisie get over these crises? On 
 the one hand by enforced destruction of a mass of 
 productive forces; on the other, by the conquest of 
 new markets, and by the more thorough exploitation 
 of the old ones. That is to say, by paving the way 
 for more extensive and more destructive crises, and by 
 diminishing the means whereby crises are prevented." ^ 
 The anarchy of production in our competitive system 
 is bound to destroy the whole system. With striking 
 vividness Engels pictured to us, in his earliest as well 
 as in his latest writings, this growing revolt of the 
 productive forces against the forms of production. 
 The idea he got either from Fourier or from Simonde 
 de Sismondi, whose master mind anticipated this the- 
 ory in many details.^ But whatever may be the gene- 
 alogy of the theory of crises, the fact remains that as 
 early as 1844 and 1845, both in his book on the Sit-, 
 nation of the Laboring Class in England and in his 
 speech at the conferences on communism at Elberfeld, 
 Engels portrayed the steeplechase of competitive in- 
 dustry that leads invariably and inevitably to crises 
 
 ^ Marx and Engels, Manifesto of the Communist Party 
 (Chicago, Charles H. Kerr and Company), pp. 21, 22. 
 
 ^ Both the overproduction and underconsumption sides of the 
 theory, the conquest of new markets as a means of overcoming" 
 commercial depression ; the increasing magnitude of each re- 
 curring crisis — these things had been pointed out already in 
 the twenties by one of the greatest and most neglected of 
 economists, Sismondi. Cf. his Nouveaiix principes, etc., pp. 329, 
 361, Z72. 
 
228 MARXISM VERSUS SOCIALISM 
 
 of overproduction. The manufacturer, Engels de- 
 clared in 1845, ^o^s not know the consumer or his 
 needs ; he manufactures not knowing where his product 
 will be shipped, nor does he know how much his for- 
 eign competitors are manufacturing for the same mar- 
 ket; he is manufacturing blindly; and his sole con- 
 solation is that his competitors are no better informed, 
 and have to act in the same way.^ The obvious result 
 of such anarchy in production is overproduction and 
 the commercial crisis. With the extension of industry 
 the magnitude of the crises and the misery of the un- 
 employed increase. And as planless competitive pro- 
 duction inevitably leads to crises, so, and with equal 
 certainty, the existing capitalist organization will pro- 
 duce the social revolution. This is as certain as a 
 mathematical deduction from axiomatic premises.* 
 
 In Engels's " Anti-Diihring " (reprinted in his So- 
 cialism, Utopian and Scientific) , these views are fur- 
 ther elaborated : " The enormous expansive force of 
 modern industry, compared with which that of gases 
 
 ^ Engels's speech in Elberfeld, reported in Rheinische Jahr- 
 biicher fur gesellschaftUche Reform (Hermann Piittman, 
 Darmstadt, 1845), vol. i, pp. 47, 48. 
 
 * " You see therefore, gentlemen, that what in beginning I 
 explained as a general principle holds also in the particular 
 instance, especially in regard to competition, — namely, that the 
 inevitable consequence of our existing social conditions will 
 under all circumstances and in all cases be social revolution. 
 With the same certainty with which from given mathematical 
 premises we can deduce a new equation, we can infer from 
 the existing economic conditions and the principles of political 
 economy an impending social revolution." Ibid., pp. 78, 79. 
 
THE THEORY OF CRISES 229 
 
 is mere child's play, appears to us now as a necessity 
 for expansion, both qualitative and quantitative, that 
 laughs at all resistance. Such resistance is offered 
 by consumption, by sales, by the markets for the 
 products of modern industry. But the capacity for 
 extension, extensive and intensive, of the markets, is 
 primarily governed by qujte different laws, that work 
 much less energetically. The extension of the markets 
 cannot keep pace with extension of production, the 
 collisions become periodic." ^ Here we have a precise 
 theoretical statement of the Marx-Engels conception 
 of crises; and it is this theory that we find in Marx's 
 Capital. The crises of overproduction are not simply 
 Fourier's '' plethoric crises " ; ^ they are manifestations 
 of the incongruity inherent in capitalist production. 
 Capitalist production must expand more rapidly than 
 capitalist distribution can permit consumption to ex- 
 pand, and the disproportion constantly increases by 
 reason of the steady increase of the productivity of 
 human labor. Hence overproduction and resulting 
 liquidation — an industrial cycle that ends where it 
 began, in the ditch of the commercial crisis. How 
 fundamental this conception is to Marx is shown in 
 his theory of wages and of the industrial reserve army. 
 
 ** Engels, Socialism, Utopian and Scientific (New York, 1901), 
 p. 41. 
 
 * Engels writes : " And the character of these crises is sd 
 clearly defined, that Fourier hit all of them off when he de- 
 scribed the first as ' crise plethorique,' a crisis from plethora." 
 Socialism, Utopian and Scientific, p. 42. \ 
 
230 MARXISM VERSUS SOCIALISM 
 
 Expansion and contraction of production are taken 
 for granted as the characteristic features of capitaHstic 
 production. 
 
 There has been considerable discussion of the ques- 
 tion whether Marx's theory of crises is not identical 
 with Rodbertus's underconsumption theory. In the 
 second and third volumes of Capital we find some ap- 
 parently contradictory statements. While the second 
 volume ridicules the underconsumption theorists and 
 the followers of Rodbertus/ the third volume em- 
 phasizes, as the basic reason for all crises, limited con- 
 
 '' " It is mere tautology to say that crises are due to lack 
 of consumers who are able to pay for what they want, or of 
 consumption supplied with means. The capitalistic system knows 
 no consumption which does not pay except that sub forma 
 pauperis, or of knaves. That wares are unsalable means simply 
 that there are no purchasers to pay for them, and consequently 
 no consumers. ... If, however, one wishes to lend to this 
 tautology an appearance of deep import by saying that the 
 working class retains too small a portion of its own product, 
 and that this evil will consequently be remedied as the class 
 receives a larger share and its wages increase, it need only 
 be remarked that crises in each instance are engendered in 
 times in which wages as a rule are rising and the working 
 class is actually retaining a larger share of the part of the 
 yearly products which is destined for general consumption. 
 This period ought, on the contrary — from the point of view 
 of these astute gentlemen who pride themselves upon their 
 simple common sense ( !) — to do away with crises. It appears, 
 therefore, that capitalistic production includes conditions inde- 
 pendently of any beneficent or evil purpose, and that the relative 
 prosperity of the working classes only temporarily permits 
 these conditions, and always, to be sure, merely as the fore- 
 runner of a crisis. (Ad notam fur etwaige Anhdnger der Rod- 
 bertus'schen Krisentheorie. F. Engels.)" Marx, Das Kapital, 
 vol. ii (2d ed., Hamburg, 1893), pp. 385, 386. 
 
THE THEORY OF CRISES 231 
 
 sumption, due to poverty of the masses, and the tend- 
 ency of capitaHst production to develop its productive 
 forces as if the capacity of the consumer were not lim- 
 ited by poverty.^ Bernstein ® tries to explain the dif- 
 ference in these statements by the lapse of time, the 
 interval of thirteen or fourteen years, between the 
 writing of the second and third volumes of the Cap- 
 ital. But he overlooks a note in the second volume 
 which contains practically the same statement as that 
 cited above from the third volume/^ In so far as 
 there is a contradiction, it already existed in the two 
 statements of the second volume. If, however, we lay 
 undue stress on faulty or inadequate explanations ad- 
 vanced by Marx, we shall fail to comprehend his cen- 
 tral idea, which is obvious and clear: the antithesis 
 
 ® " But as matters stand, the reproduction of capital invested 
 in production depends largely upon the consuming power of 
 the non-producing classes; while the consuming power of the 
 laborers is handicapped partly by the law of wages, and partly 
 by the fact that it can be exerted only so long as the laborers 
 can be employed with profit to the capitalist class. The ultimate 
 cause of all real crises always remains the poverty and re- 
 stricted consumption of the masses as compared with the tend- 
 ency of capitalist production to develop the productive forces 
 in such a way that only the absolute power of consumption of 
 the entire society would be their limit." Marx, Capital, vol. iii, 
 English ed., p. 568. 
 
 ' Bernstein, Evolutionary Socialism (New York, 1909), p. 75. 
 
 ^° *' The periods in which capitalist production exerts its full 
 capacity regularly appear as the periods of overproduction, be- 
 cause the forces of production can never operate so as not to 
 produce more values than can be marketed and realized. The 
 sale of commodities, the realization of capital invested in com- 
 modities, i.e., the realization of surplus value as well, is, how- 
 
232 MARXISM VERSUS SOCIALISM 
 
 between the almost unlimited expansive force of pro- 
 duction and the limited power of consumption. Un- 
 equal distribution, poverty and limited power of con- 
 sumption were quite as marked in past ages as in the 
 capitalist era, but in past ages the forces of produc- 
 tion were also very limited. What characterizes cap- 
 italist production is the altogether disproportionate de- 
 velopment of the forces of production as well as the 
 accumulation of capital that yearns for further accu- 
 mulation and therefore refuses to remain idle. Hence 
 the constantly growing overproduction, which is 
 bound to become chronic and incurable, and to lead to 
 the cataclysm of our present mode of production. It 
 is a striking example of Marx's revolutionary dia- 
 lectics, which '' includes in its comprehension an af- 
 firmative recognition of the existing state of things, 
 at the same time also the recognition of the negation 
 of that state, of its inevitable breaking up ; because it 
 regards every historically developed social form as in 
 fluid movement, and therefore takes into account its 
 transient nature not less than its temporary existence; 
 because it lets nothing impose upon it, and is in its 
 essence critical and revolutionary. The contradictions 
 inherent in the movement of capitalist society impress 
 themselves upon the practical bourgeois most strikingly 
 in the changes of the periodic cycle through which 
 
 ever, limited not by the needs of society as a whole, but by the 
 needs of a society the greater part of which always is and 
 always must remain poor." Marx, Das Kapital, vol. ii, p. 289. 
 
THE THEORY OF CRISES 233 
 
 modern industry runs, and whose crowning point is 
 the universal crisis." ^^ 
 
 In their faith in the approaching dies irae Marx and 
 his followers did not differ from the Second Advent- 
 ists. Nearly every commercial depression since 1850 
 was heralded by them as the beginning of the end of 
 capitalism. If they did not, like the Millerites, attire 
 themselves in white ascension robes to meet the coming 
 of the Day, it was because their ritual was different. 
 They did notify the proletarians of all lands to " get 
 ready." In 1896 the International Socialist Congress 
 passed the following resolution : " The economic and 
 industrial development is going on with such rapidity 
 that a crisis may occur within a comparatively short 
 time. The Congress, therefore, impresses upon the 
 prolateriat of all countries the imperative necessity of 
 learning, as class-conscious citizens, how to admin- 
 ister the business of their respective countries for the 
 common good." ^^ Socialist literature, both popular 
 and scientific, has constantly dwelt on the coming col- 
 lapse of the capitalist mode of production, for which 
 conclusive proofs were always at hand. Some of these 
 writings are both brilliant and eloquent, especially 
 those of Kautsky.^^ The fact, however, remains that 
 
 " Marx, Capital (fourth English ed., 1891), pp. xxx, xxxi. 
 
 ^^ Bernstein, Evolutionary Socialism, p. 80. 
 
 ^* Kautsky reproduces Marx's theory so clearly and in so 
 popular a form that I venture to quote some passages : 
 
 " The revolution in the machinery of production goes on 
 uninterrupted; the fields that it invades are ever more numerous. 
 
234 MARXISM VERSUS SOCIALISM 
 
 the imminent cataclysm which the Marxists have been 
 prophesying for sixty odd years has failed to occur; 
 and it really seems time for them to explain why it is 
 still postponed. Each time the Millerites were disap- 
 pointed, they revised their exegeses of Daniel and of 
 Revelation. 
 
 Marx's theory of crises has the faults that char- 
 acterize all Marxian theories. On the basis of facts 
 not always rightly interpreted, tendencies of social life 
 are formulated. Each of these tendencies, invariably 
 destructive to the general welfare, is expected to per- 
 sist and to reach its highest potency unchecked and 
 unhampered. Society is not expected to protect itself, 
 to adjust itself or to meet situations as they arise — a 
 
 Year after year new branches of industry are captured by 
 capitalist large production, and consequently the productivity 
 of labor grows incessantly, and at an ever increasing rate. 
 Simultaneously with this the accumulation of new capital pro- 
 ceeds without interruption. The intenser the exploitation of the 
 single laborer and the larger the number of the exploited 
 laborers, the larger also grows the quantity of the surplus and 
 the mass of wealth that the capitalist class can lay by and 
 apply as capital. The capitalist system, therefore, cannot re- 
 main stationary; its constant expansion and the constant ex- 
 pansion of its market are a vital necessity to it; to stand still 
 is death. While formerly, in the days of handicraft and small 
 farming, the country produced year in and year out a quantity 
 of wealth, which, as a rule, increased only with the increase 
 of population, the capitalist system, on the contrary, is from 
 the start dependent on an incessant increase of production; 
 every stoppage indicates a social malady which grows more 
 painful the longer it lasts. Thus together with the periodical 
 incentives to increase of production brought on by the periodical 
 extensions of the market, there is a permanent pressure in this 
 
THE THEORY OF CRISES 235 
 
 childish conception of historical life. Life is full of 
 recuperative powers ; it has more antidotes than there 
 are poisons; it has counter-tendencies for every tend- 
 ency ; or, as our genial Dr. Crothers puts it, ^' there 
 is one tendency which all tendencies have in common, 
 that is to develop counter-tendencies. There is, for 
 example, a tendency on the part of the gypsy-moth 
 caterpillar to destroy utterly the forests of the United 
 States. But were I addressing a thoughtful company 
 of these caterpillars I should urge them to look upon 
 their own future with modest self-distrust. However 
 well their program looks upon paper, it cannot be car- 
 ried out without opposition. Long before the last tree 
 has been vanquished, the last of the gypsy-moths may 
 
 direction inherent in the capitalist system of production itself. 
 This pressure, instead of being brought on by the extension of 
 the market, compels the latter to be pushed constantly further. 
 . . . The wonderful development of transportation renders 
 from year to year a completer exploitation of the market possi- 
 ble; but this tendency is counteracted by the circumstance that 
 the market steadily undergoes a change in those very countries 
 whose population has reached a certain degree of civilization. 
 Everywhere the introduction of the goods of capitalist large 
 production extinguishes the domestic system of small production 
 and transforms the industrial and agricultural laborers into 
 proletarians. This produces two important results in all the 
 markets that are counted upon to absorb the surplus products 
 of capitalist industry: first, it lowers the purchasing power of 
 the population and thereby counteracts the effect of the exten- 
 sion of the market; and, secondly, and more important, it lays 
 there the foundation for the capitalist system of production 
 by calling into existence a proletarian class. Thus capitalist 
 large production digs its own grave. From a certain point on- 
 ward in its development every new extension of the market 
 
236 MARXISM VERSUS SOCIALISM 
 
 be fighting for its life against the enemies it has 
 made." ^* 
 
 In the first place, the fundamental assumption that 
 capitalist production cannot get along without foreign 
 markets, that the conquest of new and further exploita- 
 tion of old foreign markets is the capitalist method of 
 overcoming crises — all these sweeping statements are 
 unwarranted. Take Germany as an illustration. In 
 spite of the colossal development of German industry, 
 the domestic market is absorbing a growing proportion 
 of the sum total of its production. In the period 1880- 
 1900, notwithstanding the enormous extension of Ger- 
 many's iron and coal industry, the export of iron sank 
 from 29.3 to 7.8 per cent of the total production, and 
 the export of coal from 11 to 7.3 per cent.^^ 
 
 Further, it is admitted by Engels himself that crises 
 are not increasing in frequency or in magnitude, but 
 are far less disturbing than they were half a century 
 ago. Even in the third volume of Capital, which still 
 cherishes the roseate hope of a "' Weltkrach " {" cata- 
 
 means the rising of a new competitor. . , . For some time past 
 the extension of the markets has not kept pace with the require- 
 ments of capitahst production. The latter is, consequently, more 
 and more hampered and finds it increasingly difficult to develop 
 fully the productive powers that it possesses. The intervals 
 of prosperity become shorter; the length of the crises ever 
 longer." Kautsky, The Class Struggle (Chicago, 1910), pp. 
 82-85. 
 
 ^* Crothers, By the Christmas Fire, pp. 61, 62. 
 
 ^' Tugan-Baranowsky, Theoretische Grundlagen des Marxis- 
 mus (1905), pp. 231, 232. Cf. SoMBART, Die deutsche Volks- 
 wirthschaft im neunzehnten Jahrhundert (1903), pp. 430, 431. 
 
THE THEORY OF CRISES 237 
 
 clysm "), we are told that the modern development of 
 the international market has abolished most of the 
 old incubators of crises, and has generally diminished 
 their danger — a most important admission, which 
 really nullifies the whole prophetic theory as originally 
 presented by Marx and Engels/^ And in his Social- 
 ism, Utopian and Scientific, in which the cataclysm 
 plays none too modest a part, Engels shows that he 
 is quite aware of the fact that overproduction can be 
 checked and output regulated without any preceding 
 social revolution. He tells us how producers on a 
 large scale in any given country unite in a pool for the 
 purpose of regulating production, how they determine 
 the total amount of the output, and parcel it out among 
 themselves at prices fixed beforehand. He tells us, 
 further, that if pools of this kind, gentlemen's agree- 
 ments, etc., show tendencies of breaking up, a still 
 
 ^^"The colossal extension of the means of transportation 
 and communication — seagoing steamers, railroads, electric tele- 
 graphs, the Suez Canal — have made a real world market a fact. 
 The monopoly of industry formerly enjoyed by England has 
 been matched by a number of competing countries; infinitely 
 greater and more varied fields have been opened in all parts of 
 the world for the investment of superfluous European capital, 
 so that it is much more widely distributed, and local over- 
 speculation may be more easily overcome. By means of these 
 things, the old breeding grounds of crises and opportunities for 
 the growth of crises have been eliminated or strongly reduced. 
 At the same time competition in the internal markets recedes 
 before Kartels and trusts, while it is restricted in the interna- 
 tional market by protective tariffs, with which all great indus- 
 trial countries, England excepted, surround themselves." Marx, 
 Capital, vol. iii (English translation), p. 575, Engels's note. 
 
238 MARXISM VERSUS SOCIALISM 
 
 greater concentration of association develops. The 
 bulk of a given industry is then turned into a trust, 
 a gigantic joint-stock company. " In this trust, free- 
 dom of competition changes into its very opposite — - 
 into monopoly ; and the production without any definite 
 plan of capitalist society capitulates to the production 
 upon a definite plan of the invading socialistic society. 
 Certainly this is so far still to the benefit and advan- 
 tage of the capitalists. But in this case the exploita- 
 tion is so palpable that it must break down. No na- 
 tion will put up with production conducted by trusts, 
 with so barefaced an exploitation of the community 
 by a small band of dividend-mongers." ^'^ 
 
 Granting for argument's sake that trusts lead to 
 socialism, what has happened to the elaborate Marx- 
 Engels theory of crises, and to the inevitable cataclysm 
 accompanied by the trumpets of the social revolution? 
 What has happened to the inner contradiction between 
 the ever-expanding forces of production and the lim- 
 itations of consumption? Have not all these elaborate, 
 even if unfounded, theories been abandoned, ex- 
 changed for the simple faith that trusts may usher 
 in socialism? Is not this a complete change of pro- 
 gram? What has become of universal crisis, complete 
 breakdown of capitalist production, social revolution, 
 dictatorship of the proletariat, general expropriation, 
 and blood and thunder all along the line? 
 
 Every tendency that Marx and Engels confided in 
 ^^ Engels, Socialism, Utopian and Scientific, p. 44. 
 
THE THEORY OF CRISES 239 
 
 has been checked, retarded, deflected or reversed. In- 
 dustry has not concentrated to any such extent as the 
 fathers of scientific sociaHsm expected. Agriculture 
 shows tendencies towards decentraHzation. The con- 
 centration of wealth and proletarization of the middle 
 class has proved a fable; the moderate incomes are 
 steadily increasing in number. The idea of the grow- 
 ing misery of the proletariat is abandoned, in view of 
 facts that prove the opposite; the class struggle, in- 
 stead of increasing, is as a whole diminishing. Com- 
 mercial crises, that were to increase till they destroyed 
 like an earthquake our whole industrial organization, 
 are admittedly abating their fury. The argument is 
 being shifted back to concentration of industry and 
 agriculture, a subject that I have discussed in Chap- 
 ter IV. 
 
 Theories of crises more tenable than the Marxian 
 cataclysmic theory have been elaborated,^^ but they lie 
 outside of the present inquiry. What interests us is 
 the fact that it is not our industrial society but the? 
 Marxian theory that has broken down. Among the 
 American socialists there seems to be a tendency to 
 forget this theory. We are told by Miss Hughan that, 
 
 " Tugan-Baranowsky, Theoretische Grundlagen des Marxis- 
 mus (Leipzig, 1905), pp. 210 et seq. BotNiATiAN, Wirtschafts- 
 krisen und Ueberkapitalisation (Miinchen, 1908), perhaps the 
 best book on the subject. Tugan-Baranowsky, Studien zur 
 Theorie und Geschichte der Handelskrisen in England (Jena, 
 1901), pp. 1-37, 174-254. Lescure, Des Crises generates et 
 periodiques de surproduction (1907), PP- 455 ^i ^^Q- 
 
240 MARXISM VERSUS SOCIALISM 
 
 according to Lucien Sanial, the acknowledged author- 
 ity on crises among American sociaHsts, " Marx's 
 theory was a valid explanation ... of all crises 
 until 1880. Since that time we have entered upon the 
 stage of concentration in capitalism, where the cause 
 of the crisis is no longer industrial but commercial 
 and financial. The investigator must now seek for the 
 factors which in the course of economic evolution have 
 so developed as to modify the financial and commercial 
 circumstances ; he will then find only a partial and con- 
 stantly less adequate explanation of each successive 
 crisis in the overproduction theory of Marx." ^^ An- 
 other leader of American socialism, a member of the 
 national committee, seems to have abandoned Marx to 
 the point of stating that " each and every panic that 
 has occurred has not the same basis." ^° 
 
 The Marxian theory of crises as originally formu- 
 lated, with its announcement of the inherent doom of 
 the capitalist organization of society, might therefore 
 properly be declared to be both obsolete and untenable. 
 The social revolution with the dictatorship of the pro- 
 letariat, which was to follow or accompany the great 
 crisis, still lingers in the minds of those who have long 
 since abandoned all hope of the cataclysm. Let us 
 therefore examine this social revolution. 
 
 *" HuGHAN, The Present Status of Socialism in the United 
 States (191 1 ), chapter vii and passim. 
 '" Ibid. 
 
CHAPTER XI 
 
 THE SOCIAL REVOLUTION AND THE IN- 
 EVITABLE CATACLYSM 
 
 Few words have been so assiduously interpreted by 
 the so-called Marxists as the word " revolution." In- 
 terpretation was not infrequently necessary. The con- 
 quest of political power through an armed uprising, 
 preached openly, brought the agitator in continental 
 Europe before the courts, under the charge of treason. 
 In pleading his case he naturally tried to tone down the 
 meaning of the word " revolution." ^ 
 
 In preaching revolution in a democracy like ours the 
 agitator is confronted with still greater difficulties — 
 he is not listened to by intelligent people. In a democ- 
 racy the will of the majority is supposed to rule. 
 There can be, therefore, no occasion for a revolution, 
 unless it be a revolution of a minority against the will 
 of the majority. At present there is much criticism of 
 the judiciary and even of the Constitution; but it 
 comes in the main from an irritated minority. Legis- 
 lative acts could not be vetoed by the courts if it were 
 the determined wilL of the majority of the people 
 
 ^ H ochverrats-Prozess wider Liebknecht, Behel, Hepner (Ber- 
 lin, 1894), pp. 7h 457, ^7$-^7% 
 
242 MARXISM VERSUS SOCIALISM 
 
 that the courts should not have that power. The fact 
 is that the majority of the people have greater con- 
 fidence in the courts than they have in the legislative 
 bodies. Whatever the legal theory may be, in a 
 democracy the decisions of the courts cannot in the 
 long run antagonize the prevailing public sentiment. 
 Revolutionary propaganda in this country and 
 in England is therefore bound to fall on deaf 
 ears. 
 
 Yet Marx laid great stress on the revolution. His 
 socialism is international revolutionary socialism. It 
 is its adherence to the revolutionary principle, its in- 
 sistence upon the capture of political power, the dic- 
 tatorship of the proletariat, the overthrow of the pres- 
 ent economic organization of society, that gives it a 
 peculiar stamp of its own. No matter, therefore, how 
 much Marx may be sugar-coated, the word '' revolu- 
 tion " cannot be stricken from the Marxian dictionary. 
 The word may, of course, be used in various senses. 
 There has been an industrial revolution, there have 
 been revolutions even in fashions of hair-dressing. 
 Marx often uses the word revolution in other senses 
 than that attributed to it in politics; but in order to 
 expurgate political revolution from his original doc- 
 trine, it would be necessary to mutilate his writings 
 beyond the possibility of recognition. It was not as 
 an economist but as a theorist of revolution that Marx 
 started. All his economic and philosophical inquiries 
 were prosecuted to find reasons for the assumptions 
 
THE SOCIAL REVOLUTION 243 
 
 with which he started, and proofs of the conclusions 
 which he had already reached. 
 
 One might paraphrase Kant's " Wie sind synthe- 
 tische Urteile a priori moglich ? " and ask : " How is 
 a social revolution possible?" and one would have in 
 a nutshell the real purpose of Marx's investigation. 
 His single theories are instrumentalities, his many 
 learned observations by-products of the central opera- 
 tion of his mind. Back of his most abstract reason- 
 ings, his seemingly purely scientific considerations, 
 there is a tremendous emotional appeal. It is not an 
 ethical appeal, it is simply a statement that certain 
 things which he profoundly desires will assuredly take 
 place — a statement not subject to debate or discussion. 
 Its finality is majestic. And whatever that appeal 
 may be to us, for the countless, nameless legions of the 
 proletariat there is honor, there is duty, there is prom- 
 ise, there is life! Is it life at its best and highest? is 
 an idle question. It is life that meets death with a 
 smile; " mourir en combattant." This treasure of the 
 French Revolution became the heritage of the forties, 
 and Marx's soul lived on it lavishly. 
 
 " With a deathless scorn in my dying breath, 
 In my hand the sword still cherished; 
 ' Rebellion ' still for my shout of death. 
 
 i3 2 
 
 ^ From Freiligrath's " Abschiedswort " on May 19, 1849, in 
 the Neue Rheinische Zeitung, No. 301. The English version cited 
 is by Ernest Jones. Cf. Spargo, Karl Marx (1910), p. 165, 
 where the whole poem is quoted. 
 
244 MARXISM VERSUS SOCIALISM 
 
 Translate these lines of Freiligrath into better prose 
 and one has Marx's valedictory. No matter what 
 work of Marx's one reads, one will find there no at- 
 tempt at a disguise. There is the vision of the great 
 revolution, and toward it lies his course. Only after 
 the great social revolution, which will abolish all 
 classes and class-antagonisms, can social evolutions 
 cease to be political revolutions. Until then the last 
 word of social science will ever be : *' Le combat ou la 
 mort; la lutte sanguinaire ou le neant." ^ In the last 
 number of the Neue Rheinische Zeitung * he urges 
 revolutionary terrorism.^ In other writings he tells 
 us that '' revolutions are the locomotives of history." ^ 
 True, a revolution is an act of destruction, it abolishes 
 old relationships ; but for that very reason " socialism 
 without a revolution is impossible." ^ Revolution is 
 the breath of the Communist Manifesto. Let the rul- 
 ing classes tremble; the proletarians have nothing to 
 lose but their chains. It is in revolution that all the 
 theories of Marx's Capital converge. Its supreme mo- 
 ment is when " the knell of capitalist private property 
 sounds. The expropriators are expropriated." ® 
 
 *Marx, Misere de la philosophie (Paris, 1847), p. 178. 
 
 * No. 301, May 19, 1849. 
 
 "For further quotations see Simkhovitch, " Die Krisis der 
 Socialdemokratie," Conrad's Jahrbiicher, vol. xvii (1899). Cf. 
 also Hammacher, Das philosophisch-bkonomische System des 
 Marxismus (Leipzig, 1909), pp. 91-94. 
 
 ^ Marx, Die Klassenkampfe in Frankreich (Berlin, 1895), p. 90. 
 
 ''Marx und Engels, Literarischer Nachlass, vol. ii (1902), 
 p. 59. ^ Marx, Capital, vol. i (fourth English ed.), p. 789. 
 
THE SOCIAL REVOLUTION 245 
 
 It is thus a philosophy of revolution that Marx pre- 
 sents. In this philosophy of revolution, curiously 
 enough, either the philosophy stamps the idea of a 
 revolution as a feverish dream, or the revolution up- 
 sets the philosophy and makes it ridiculous. Marx, 
 the founder of scientific socialism, the deadly critic 
 of utopianism, is himself a revolutionary Utopian; 
 and it is his revolutionary utopia that has captured 
 the masses and converted them to anti-utopian scien- 
 tific socialism ! 
 
 Let us take, for example, the dictatorship of the 
 proletariat and its role in the social revolution. " The 
 proletariat will use its political supremacy to wrest, 
 by degrees, all capital from the bourgeoisie, to cen- 
 tralize all instruments of production in the hands of 
 the state, i.e., of the proletariat organized as the ruling 
 class, and to increase the total of productive forces 
 as rapidly as possible. Of course, in the beginning, 
 this cannot be effected except by means of despotic 
 inroads on the rights of property, and on the condi- 
 tions of bourgeois production; that is, by means of 
 measures, therefore, which appear economically insuf- 
 ficient and untenable, but which, in the course of the 
 movement, outstrip themselves, necessitate further in- 
 roads upon the old social order, and are unavoidable 
 as means of entirely revolutionizing the mode of pro- 
 duction." ^ 
 
 Babeuf or Blanqui might have written this passage; 
 
 * Communist Manifesto, pp. 44, 45. 
 
246 MARXISM VERSUS SOCIALISM 
 
 it would have been quite in keeping with their gen- 
 eral point of view — that of conspiracy and forcible 
 overthrow. They believed that the socialist common- 
 wealth could be decreed at any time by the victorious 
 proletariat; all that was required was political power. 
 How many a time did Marx and Engels declare such 
 ideas to be dangerous Utopias, that could lead to 
 nothing but demoralization and disaster ! Marx could 
 not look upon them differently so long as he regarded 
 his economic interpretation of history as the funda- 
 mental proposition of his doctrine. No dictatorial de- 
 crees of the victorious proletariat, no despotic meas- 
 ures, no concentrated action of all the guillotines in 
 the world could centralize the instruments of produc- 
 tion. Socialism is possible only when in the course of 
 economic development all production has become con- 
 centrated and socialized. Hence Marx affirms : *' No 
 social order ever disappears before all productive 
 forces for which there is room in it have been devel- 
 oped; and new higher relations of production never 
 appear before the material conditions of their existence 
 have matured in the womb of the old society." ^** 
 What then can the dictatorship of the proletariat ac- 
 complish so long as production remains decentralized ? 
 The fabrication of a plan for a socialist common- 
 wealth, and its introduction through a successful over-, 
 throw, Marx regarded as Utopias, and he denounced 
 
 ^° Marx, A Contribution to the Critique of Political Economy 
 (Stone's translation), p. 12. 
 
THE SOCIAL REVOLUTION 247 
 
 the preaching of such doctrines as " empty, con- 
 scienceless play with propaganda." These are the 
 I words which Marx addressed to Weitling ! " and yet 
 Marx was himself guilty of that for which he re- 
 proached Weitling. 
 
 Marx and Engels had learned a great deal from 
 experience. The preface to the Comnmnist Manifesto 
 admitted that the Paris commune had taught them 
 that " the working class cannot simply lay hold of 
 the ready-made state machinery and wield it for its 
 own purposes." ^^ 
 
 There is no doubt whatever that the revolutionary 
 element in Marx's writings was, even if unconsciously, 
 taken over bodily from the older revolutionary social- 
 ists like Blanqui. There is equally no doubt of its 
 being in complete contradiction to the economic inter- 
 pretation of history. A revolution could not create a 
 socialist state; it could proclaim it only if economic 
 development had already created it. How then could 
 so thorough a thinker as Marx be so persistently 
 guilty of so glaring a contradiction in theory? 
 
 ""Tell us, Weitling, you who with your communistic propa- 
 ganda have made so much noise in Germany, and have at- 
 tracted so many laborers, . . . with what arguments do you 
 defend your social revolutionary agitation, and upon what do you 
 intend to base your agitation in the future? ... To appeal in 
 Germany to the workingmen without strictly scientific ideas and 
 concrete doctrine is tantamount to an empty-headed and con- 
 scienceless play with propaganda." Die Neue Zeit, vol. i (1883), 
 p. 239. 
 
 ^^ Communist Manifesto, p. 10. 
 
248 MARXISM VERSUS SOCIALISM 
 
 I believe that the real explanation is in his '' dia- 
 lectics," in his Hegelian logic, or rather in the dialectic 
 process that among the Hegelians took the place of 
 logic. It was a mode of thinking that proceeded only 
 by revolutions, by negations of negations, by develop- 
 ment through antitheses, by quantitative changes be- 
 coming qualitative. Antagonism was the driving 
 force. Development consisted in constant rebellion of 
 elements, in a series of cataclysms. To Engels this 
 dialectic method was a fetish. Note for example the 
 way in which he summed up the economic tendencies : 
 *' The antagonism between socialized production and 
 capitalist appropriation manifests itself as the antag- 
 onism of proletariat and bourgeoisie ... it presents 
 itself as an antagonism between the organization of 
 production in the individual workshop and the an- 
 archy of production in society generally. . . . When 
 the economic collision has reached its apogee, you have 
 the mode of production in rebellion against the mode 
 of exchange, i.e., the crisis and finally the social revolu- 
 tion." '' 
 
 This social revolution changes even the quality of 
 the law of history. Economic and historical necessity 
 is no more. " It is the ascent of man from the king- 
 dom of necessity to the kingdom of freedom." ^* 
 Translated into philosophical language, this means 
 that causality ceases ! 
 
 ^'Engels, Socialism, Utopian and Scientific (1901), PP- 35, 38, 
 42. " Ibid,, p. 53. 
 
THE SOCIAL REVOLUTION 249 
 
 This passage helps us to see how the economic inter- 
 pretation of history was apparently reconciled with 
 the revolutionary conception. The historical process 
 is a process of constant change, because of its inner 
 antagonisms, which grow till they overcome each other 
 by force, forming new and higher elements which in 
 their turn confront new and growing antagonisms — 
 and so on indefinitely. The greater the antagonism, 
 the nearer is the revolution. Marx's belief therefore 
 was : the worse the better. Hence his dislike for re- 
 forms, for ameliorations that weaken antagonisms. 
 The closing sentences in his speech on free trade strik- 
 ingly illustrate this viewpoint. " Generally speaking," 
 says Marx, *' the free trade system is destructive. It 
 breaks up old nationalities and carries the antagonism 
 between proletariat and bourgeoisie to the uttermost 
 point. In a word, the system of commercial freedom 
 hastens the social revolution. In this revolutionary 
 sense alone, gentlemen, I am in favor of free trade." ^^ 
 But with or without free trade, the revolution is inevi- 
 table — and why? Because society is divided into an- 
 tagonistic classes. " The antagonism between the pro- 
 letariat and the bourgeoisie is a struggle between class 
 and class, a struggle which, carried to its highest ex- 
 pression, is a complete revolution." ^^ 
 
 Orthodox Marxists adhere to the revolutionary and 
 
 " Reprinted as appendix iii in the English edition of Marx's 
 Poverty of Philosophy (London, 1900), p. 195. 
 " Ibid., p. 159. 
 
250 MARXISM VERSUS SOCIALISM 
 
 cataclysmic doctrine. Kautsky, after giving us various 
 analogies from natural history and depicting the act 
 of birth as a revolution and catastrophe, ends by af- 
 firming " that as each animal creature must at one 
 time go through a catastrophe in order to reach a 
 higher stage of development (the act of birth or the 
 breaking of a shell), so society can only be raised to 
 a higher stage of development through a catastro- 
 phe." ^^ Dr. Luxemburg tells us that without the 
 cataclysm of capitalism (i.e., the final crisis and social 
 revolution) the expropriation of the capitalist class is 
 impossible. The cataclysm, therefore, is the corner- 
 stone of scientific socialism; with its removal there is 
 nothing left of socialism. ^^ This is quite true, but it 
 only proves that socialism, scientific or otherwise, has 
 really no leg left to stand on. Let us examine its 
 predicament. 
 
 We have seen that the hoped-for universal crisis, the 
 collapse of capitalist production, might as well be 
 eliminated. The untenability of this theory is ad- 
 mitted. The cataclysm is therefore reduced to the 
 operation of the social revolution. Here again, how- 
 ever, Marx becomes involved in no end of difficulties 
 
 "Kautsky, The Social Revolution (Chicago, 1905), p. 20. 
 
 ^^ " As, however, the cataclysm of the bourgeois society is 
 the cornerstone of scientific socialism, so the removal of this 
 cornerstone would logically lead to the breakdown of the entire 
 socialistic conception. . . . Without the collapse of capitalism 
 the expropriation of the capitalist class is impossible." LuxeM' 
 BURG, Sozialreform oder Revolution (Leipzig, 1899), p. 56. 
 
THE SOCIAL REVOLUTION 251 
 
 due to internal contradictions. The economic inter- 
 pretation of history and the social revolution as an 
 organizer of a new system of production cannot live 
 together in the same house. The economic develop- 
 ment is the foundation; law, politics, ideologies are 
 superstructures. The foundation cannot he changed 
 by the superstructures; on the contrary, the latter 
 have to adjust themselves to the basis. This economic 
 foundation may present a socialized and absolutely 
 concentrated mode of production; the superstructure 
 — the old law — may then be adjusted to the new eco- 
 nomic requirements. Marx told us that the tendencies 
 of existing society lead inevitably to concentration, so- 
 cialization, proletarization, etc., which are forming a 
 new economic foundation and will therefore produce 
 a new legal superstructure — a socialist commonwealth. 
 But we have seen that Marx was mistaken in his view 
 of tendencies. The economic foundation for a social- 
 ist state does not exist, and there is no evidence that 
 it ever will exist. On the other hand, revolutionary 
 ideologies, bloody street fights, can never create a new 
 economic basis. 
 
 And now let us look into the contradictions of the 
 so-called dialectics of Marx and Engels. Granted that 
 there is nothing fixed, nothing constant but the con- 
 stancy of change. Marx assumes this; yet he is con- 
 stantly operating with logical concepts, which are in 
 their very nature unchangeable, inflexible, permanent 
 and constant. If a is a> it cannot be a + c or a — c. 
 
252 MARXISM VERSUS SOCIALISM 
 
 Yet in the historical process that presupposes constant 
 change, a cannot remain the same a as it was at the 
 start. To make this concrete: Marx is dealing with 
 classes, tendencies, etc. But from his own viewpoint 
 his classes cannot help changing in character. The 
 same thing is true about all his concepts, whether they 
 are " crisis," " capitalism," " concentration " or " revo- 
 lution." Yet while the historical process is battering, 
 changing or even destroying the inner content of all 
 these concepts, the Marxian socialist operates with 
 them as with absolute and unchanging entities and 
 works out " scientifically," by negation of the nega- 
 tion, our distant future ! ^^ 
 
 Not only has time changed the meaning of the con- 
 cepts with which Marx and Engels operated, but the 
 authors of revolutionary socialism themselves under- 
 went a change and admitted that history had con- 
 victed them of error. Marx had little respect in his 
 later years for Revolutionsspielerei; ^^ and Engels in 
 
 ^® Any one interested in the philosophical and logical aspects 
 of the Marxian theory of development should not fail to read 
 Peter von Struve, " Die Marxische Theorie der sozialen Ent- 
 wicklung," in Braun's Archiv fur somale Gesetsgebung und 
 Statistik, vol. xiv (1899), pp. 658-704, where this line of 
 thought is further developed. See also Hammacher, Das phi- 
 losophisch-okonomische System des Marxismus (Leipzig, 1909), 
 and Untermann, Die logischen Mangel des engeren Marxismus 
 (Miinchen, 1910) ; Stammler, Wirtschaft und Recht, 2d ed. 
 (Leipzig, 1906) ; and Masaryk, Die philosophischen und sosio- 
 logischen Grundlagen des Marxismus (Wien, 1899). 
 
 ^^ " The violent suppression of a revolution leaves behind in 
 the minds of its participants, especially of those who have been 
 
THE SOCIAL REVOLUTION 253 
 
 1895 described his and Marx's early revolutionary 
 conceptions as illusions, and admitted that history not 
 only had proved them to be v^rong, but also had 
 changed all the conditions of class struggle. If the 
 victory of the proletariat in street fights was of rare 
 occurrence in the past, it has, under modern condi- 
 tions, v^ith the present military technique, with rail- 
 roads and telegraphs, practically no chance whatever.^^ 
 Thus even the last hope, the revolutionary hope, is laid 
 at rest. 
 
 driven into exile, a commotion which for more or less time 
 incapacitates persons even of superior ability. They cannot keep 
 pace with the march of events and do not wish to realize that 
 the character of the social movement has changed. Hence that 
 play in conspiracy and revolution which compromise both their 
 instigators and the cause which they would serve." Marx, 
 Nachwort su den Enthitllungen iiber den Kommunisten-Prosess 
 su K'dln (Hottingen-Zurich, 1885), p. y2. Marx wrote the above 
 sentences apropos of Willich, but the statement is true of Marx 
 himself. 
 
 History proved us wrong, and showed the views which 
 we then held to be illusions. More than that, it not only de- 
 stroyed our error of that time, but it also completely changed 
 the conditions under which the proletariat was to struggle." 
 Engels, Einleitung su Karl Marx's Die Klassenkampfe in 
 Frankreich, 1848-1850 (Berlin, 1895), p. 6. "The irony of his- 
 tory turns everything upside down. We the 'revolutionaries' 
 thrive much better by legal means than by illegal ones and 
 through * revolution.' " Ibid., p. 17. 
 
CHAPTER XII 
 
 THE COLLAPSE OF MARX'S THEORY OF 
 
 VALUE 
 
 In the first part of the present study it was pointed 
 out that, whatever role Marx's theory of value may 
 have played in his economic system, his socialism was 
 not based upon that theory but rather upon the inevita- 
 ble development of economic tendencies. Accordingly, 
 as long as the relation of Marx to socialism was the 
 primary object of our inquiry, to discuss at the outset 
 his theory of value would have been to confuse the 
 issue. Having disposed of the economic tendencies 
 that were to lead to socialism, we can now consider 
 what socialism stands to gain from this particular 
 theory. 
 
 In a sense, any such consideration is rather super- 
 fluous. There are few theories that have been so 
 carefully examined, so thoroughly sifted, and so com- 
 pletely condemned upon their own documentary evi- 
 dence as Marx's theory of value. And since the ap- 
 pearance of the third volume of Capital we have in 
 our hands what may be called a signed confession of 
 Marx and Engels to the effect that this theory is a 
 futile construction. 
 
 254 
 
COLLAPSE OF THEORY OF VALUE 255 
 
 What was this famous theory of value? The so- 
 cially necessary amount of labor-time incorporated 
 in the production of a commodity, we were told, is 
 what constitutes its value. But if, for example, an 
 Indian builds a canoe and exchanges it for a dog that 
 never fails on a deer hunt, would Marx's law of value 
 govern the exchange of the dog for the canoe? Not 
 at all. Marx is investigating capitalist production, 
 the production of commodities for the market, and 
 the economic laws peculiar to that mode of production 
 — ^peculiar, that is, to modern times. From the very 
 start it was a distinctive feature of Marx's economic 
 theory — a feature not shared by him with his classical 
 predecessors — that universal abstract economic laws 
 do not exist; rather does every historical period have 
 laws of its own.^ Historically, therefore, the operative 
 power of Marx's law of value was limited to the 
 
 * Marx, Capital, vol. i (English translation, 1891), p. xxviii. 
 Cf. DiEHL, Sozialwissenschaftliche ErVduterungen zu David 
 Ricardos Grundsdtzen der Volkswirtschaft, p. 97 : " In contra- 
 distinction to Ricardo, Marx brought forward his law of value 
 only for a definite phase of economic life, or to express it dif- 
 ferently, for Marx the law of value had only a historic meaning, 
 while for Ricardo it had a general one. Wherever men worked, 
 Ricardo believed, they also bartered for the value of their work. 
 Therefore the law of value was for Ricardo a general permanent 
 law for all kinds and periods of economic life. Marx thought 
 quite differently; he acknowledged no universal law of econom- 
 ics, but only laws applying to definite conditions of production. 
 The law of value was only to hold for the period of production 
 of commodities, and so had no vaHdity for objects of personal 
 consumption, as Ricardo thought, but only for the commodi- 
 ties." 
 
2<lS MARXISM VERSUS SOCIALISM 
 
 modern period of capitalist production. It did not 
 apply to wares that were subject to accidental ex- 
 change, but only to wares produced by hired labor for 
 sale in the market. This historical limitation imposed 
 by Marx upon his law of value the reader should 
 bear in mind. 
 
 What proof does Marx offer that the labor-time 
 congealed in the commodity is what constitutes its 
 value? This very concrete law of value, which is his- 
 torically circumscribed and limited, is not proven to 
 us by equally limited and circumscribed concrete his- 
 torical observations, but by abstract reasoning sub 
 specie cFternitatis. We may say that literally Marx 
 is rushing in where Aristotle feared to tread. Aris- 
 totle wondered considerably about exchange. He rea- 
 soned : 5 beds = so' much money is the same as 5 
 beds = I house. Hence the value of every commodity 
 can be expressed in terms of some other commodity 
 taken at random. But " exchange cannot take place 
 without equality, and equality not without commen- 
 surability." Aristotle wondered how things so obvi- 
 ously different as commodities may be can be com- 
 mensurable. He decided that they cannot be quali- 
 tatively commensurable. Hence the equalization that 
 exchange may establish is but " a makeshift for prac- 
 tical purposes." ^ 
 
 The logical problem thus abandoned by the master 
 himself, Marx undertook to solve twenty-odd hundred 
 
 ^ Capital, vol. i, p. 28. 
 
COLLAPSE OF THEORY OF VALUE 257 
 
 years later in the spirit of the AristoteHan scholastic.^ 
 He begins with a random equation: one quarter of 
 corn = X hundredweight of iron. '* What does this 
 equation tell us ? It tells us that in two different things 
 — in I quarter of corn and in x cwt. of iron — there 
 exists in equal quantities something common to both. 
 The two things must therefore be equal to a third, 
 which in itself is neither the one nor the other. Each 
 of them, so far as it is exchange value, must therefore 
 be reduced to this third." * 
 
 This reasoning is interesting. Having thus con- 
 vinced himself that every exchange equation of two 
 commodities is in reality a sublimated menage a trots, 
 Marx argues as follows : " This common something 
 cannot be either a geometrical, a chemical, or any 
 other natural property of commodities. Such prop- 
 erties claim our attention only in so far as they affect 
 the utility of those commodities, make them use- 
 values. But the exchange of a commodity is evidently 
 an act characterized by a total abstraction from its use- 
 
 ' I do not wish to be understood as speaking lightly of either 
 Aristotle or the master-minds of the scholastic. I readily grant 
 that no one in modern times has equaled them in logic. But 
 the reason why they became such artists in the use of the 
 syllogism was because it was the sole instrument at their dis- 
 posal. The chaos of facts and the order of tabulated experience 
 was not theirs to deal with. Hence theirs were complete and 
 perfect natural philosophies, while to us was given a natural 
 science in all its incompleteness and imperfection. Our several 
 economic theories, alas, are still quite logical, quite complete and 
 quite perfect. 
 
 * Capital, vol. i, pp. 3, 4. 
 
258 MARXISM VERSUS SOCIALISM 
 
 value. As use-values, commodities are, above all, of 
 different qualities, but as exchange values they are 
 merely different quantities, and consequently do not 
 contain an atom of use-value. If then we leave out 
 of consideration the use-value of commodities, they 
 have only one common property left, that of being 
 products of labor. . . . There is nothing left but 
 what is common to them all; all are reduced to one 
 and the same sort of labor, human labor in the ab- 
 stract. Let us now consider the residue of each of 
 these products; it consists of the same unsubstantial 
 reality in each, a mere congelation of homogeneous 
 human labor, of labor-power expended without regard 
 to the mode of its expenditure. All that these things 
 now tell us is that human labor is embodied in them. 
 When looked at as crystals of this social substance, 
 common to them all, they are values." ^ 
 
 Thus we see that Marx is dealing with economic 
 phenomena as a mediaeval scholastic, and as such he 
 is not only solving the economic problem of value but 
 is also answering the metaphysical query after the 
 substance of all things. Our nineteenth-century ma- 
 terialist in the garb of a thirteenth-century schoolman 
 shows us in a dim metaphysical light the true 
 noumenon of all phenomena. 
 
 A critique of this method of reasoning would have 
 been called for had Marx offered us a theory of value 
 as a mental construction, a Hulfsbegriff ; but he is pre- 
 
 ^ Ibid., vol. i, pp. 4, 5. 
 
COLLAPSE OF THEORY OF VALUE 259 
 
 senting us not with a theory of value but with a law 
 of value, a law governing the exchange of commodi- 
 ties. Owing to the concrete nature of this law, it is 
 a simple matter to test its validity. The question is : 
 Is or is not this law of value operative in actual 
 practice ? 
 
 Marx informs us that the price is but the money 
 expression of value. " The expression of the value of 
 a commodity in gold," he tells us, " is its money-form 
 or price." ^ The law of value that governs these prices 
 Marx compares with the law of gravity. " In the 
 midst of all the accidental and ever-fluctuating ex- 
 change relations between the products, the labor-time 
 socially necessary for their production forcibly asserts 
 itself like an overriding law of nature. The law of 
 gravity thus asserts itself when a house falls about 
 our ears." '^ It is important to notice that this state- 
 ment is reiterated in the third volume. "Whatever 
 may be the way in which the prices of the various 
 commodities are first fixed or mutually regulated, the 
 law of value always dominates their movements. If 
 the labor-time required for the production of these 
 commodities is reduced, prices fall; if it is increased, 
 prices rise, other circumstances remaining the same." ^ 
 The law of value always determines the prices.^ In 
 fact, to use Marx's own expression, " a price which is 
 different in quality from value is an absurd contra- 
 
 * Ibid., vol. i, p. 66. '^ Ibid., vol. iii, p. 208. 
 
 ''Ibid., vol. i, p. 46. ^ Ibid., vol. iii, p. 244. 
 
26o MARXISM VERSUS SOCIALISM 
 
 diction." ^^ " The concept of price really signifies the 
 value of some use-value expressed in money." ^^ 
 These and similar plain assertions make the problem of 
 testing the Marxian theory of value relatively simple. 
 But before v^e inquire whether his law stands the test, 
 let us proceed to the second and perhaps more original 
 part of the theory. 
 
 The capitalist, the owner of money, must buy com- 
 modities at their value, and then he must sell them 
 at their value, yet at the end of the process he must 
 draw out more money than he put in. How is this 
 problem to be solved? How is profit made? This 
 question is answered as follows: there is one com- 
 modity, labor-power, which is purchased on the market 
 like all other commodities at its value, but the cap- 
 italist extracts from it surplus value. 
 
 In order that labor-power may be freely offered on 
 the market, the owner of this commodity, the laboring 
 man, must be a free man, who may dispose at will of 
 his labor-power, i.e., his person. The second historical 
 condition for the existence of labor-power as a com- 
 modity is the existence of a proletariat class, that is 
 of people that possess labor-power, but none of the 
 means and instruments of production; or, as Marx 
 puts it : '' The second essential condition to the owner 
 finding labor-power on the market as a commodity is 
 this — that the laborer, instead of being in the position 
 to sell commodities in which his labor is incorporated, 
 
 '" Ibid., vol. iii, p. 417. " Ibid., vol. iii, p. 417. 
 
COLLAPSE OF THEORY OF VALUE 261 
 
 must be obliged to offer for sale as a commodity that 
 very labor-power which exists only in his living self." ^^ 
 
 Now if the capitalist pays on the market the value 
 of labor-power, what is the value of this curious com- 
 modity, and how is it to be determined? Marx an- 
 swers as follows : '' The value of labor-power is deter- 
 mined as in the case of every other commodity by 
 the labor-time necessary for production of this special 
 article. Labor-power exists only as a capacity or 
 power of the living individual. , . . For his main- 
 tenance he requires a given quantity of the means of 
 subsistence. Therefore the labor-time requisite for 
 the production of labor-power reduces itself to that 
 necessary for the production of those means of sub- 
 sistence; in other words, the value of labor-power is 
 the value of the means of subsistence necessary for 
 the maintenance of the laborer." ^^ 
 
 Parenthetically, the reader is urged to keep in mind 
 that Marx is here presenting us with a cost-of-sub- 
 sistence theory of wages. 
 
 The value of labor-power thus resolves itself into 
 the value of a definite quantity of means of subsist- 
 ence. It therefore varies with the value of these 
 means or with the quantity of labor requisite for 
 their production.^* Let us assume that the value of 
 labor-power, thus determined, is three shillings a day, 
 which three shillings the capitalist pays his laborer 
 
 ** Ibid., vol. i, p. 147. " Ibid., vol. i, p. 149. 
 
 " Ibid., vol. i, p. 151. 
 
262 MARXISM VERSUS SOCIALISM 
 
 for his labor-power. But, argues Marx, if the cap- 
 italist should make the laborer work only as many 
 working hours as are necessary to the production of 
 the labor-power he has purchased — let us say four or 
 five or six hours — no surplus would arise. The four 
 or six hours of work, as the case may be, would not 
 contribute to the finished product of the laborer a 
 value greater than that of the three shillings which 
 the capitalist has paid in wages. No profitable busi- 
 ness could be carried on in this way; hence, according 
 to Marx, while the capitalist pays to the laborer the 
 three shillings, which is equivalent, let us say, to six 
 hours of labor, he makes the laborer work the whole 
 day — let us say, twelve hours. Thus the laborer pro- 
 duces not only the three shillings which he has re- 
 ceived in wages, but an additional three or more 
 shillings, which is surplus value for the capitalist. 
 
 From the viewpoint of the capitalist, however, the 
 surplus value thus produced by the laborer is by no 
 means clear profit for the employer. 
 
 Production requires capital. Capital engaged in 
 production Marx divides into constant and variable 
 capital. Constant capital is that part of the capital 
 that is invested in the means of production — building 
 machinery, material, etc. — which produces as such no 
 surplus value. Variable capital is capital invested in 
 the purchase of labor-power, in hiring workmen. Only 
 this portion of capital is productive of surplus value. 
 
 If a certain productive enterprise requires £410 of 
 
COLLAPSE OF THEORY OF VALUE 263 
 
 constant capital and £90 of variable capital, and the 
 rate of surplus value on the variable capital is 100 
 per cent or £90, the capitalist is receiving £90 of sur- 
 plus value on a total investment of £410 + £90 = 
 £500, or 18 per cent. If, on the other hand, the 
 branch of industry is one in which the value of the 
 implements and material used is slight, if the constant 
 capital used is but £10 and the variable capital £90, 
 and if the surplus value is again £90, then the rate of 
 surplus value is the same, 100 per cent, but the rate of 
 profit to the capitalist on his whole investment of £100 
 is 90 per cent. 
 
 It is therefore evident that in various industries, 
 in which the rate of surplus value is the same, the rate 
 of profit will vary in accordance with the composition 
 of the capital concerned, in accordance with the ratio 
 of constant capital to the variable capital employed. 
 The higher the ratio of variable capital, the higher 
 will be the rate of profit; and, vice versa, the higher 
 the ratio of constant capital, the lower will be the rate 
 of profit. In industries which require little or no ma- 
 chinery and raw material of slight value, together with 
 a great deal of human labor-power, the rate of profit 
 will be very high. On the other hand, the larger the 
 investment in machinery and material, the slighter the 
 proportion of labor-power used^ the smaller will be the 
 profit; since it is only from living human labor that 
 surplus value can be derived. 
 
 If the Marxian theory is true, industries resting 
 
264 MARXISM VERSUS SOCIALISM 
 
 primarily on human labor must produce a proportion- 
 ately higher rate of profit than enterprises in which 
 the ratio of constant capital is high. Yet Marx him- 
 self admits that experience shows the rate of profit 
 in the various industries to be entirely independent 
 of the inner composition of capital employed in these 
 various industries. A railroad which represents an 
 enormous investment of constant capital and a rela- 
 tively slight proportion of variable capital may give 
 the same rate of profit as a district messenger com- 
 pany or any other enterprise in which the largest 
 amount of capital is spent on wages. In fact there 
 is a general tendency to an average rate of profit. 
 This tendency is admitted by Marx. But if an aver- 
 age rate of profit be admitted, how can it be claimed 
 that the Marxian law of value is to operate like the 
 law of gravity? On the face of it this admission 
 seems to invalidate the whole theory of value. 
 
 This was the puzzle that Marx promised to solve. 
 Attention was drawn to the difficulty by Engels him- 
 self, in 1885, in the preface to the second volume of 
 Capital, in which he challenged the economists to 
 solve the problem how " an equal average rate of profit 
 can and must come about, not only without a violation 
 of the law of value, but by means of it." ^^ That was 
 
 ""According to the Ricardian law two investments making 
 use of the same amount of labor, and paying it at the same 
 rate, all other conditions being equal, will produce in equal 
 periods of time products of equal value, and likewise an equal 
 surplus value on an equal rate of profit. If, however, they 
 
COLLAPSE OF THEORY OF VALUE 265 
 
 the Chinese puzzle, the solution of which was adver- 
 tised to appear in the third volume of Capital. 
 
 The third volume finally appeared. It is a most 
 important document, because it forever disposed of 
 the famous exploitation theory of value. It is a 
 signed admission that the theory is worthless. Not 
 only is Marx compelled to abandon it, but the way in 
 which he does it is forced and graceless; he shifts his 
 ground and abandons in all haste not only his theory 
 of value, which is untenable, but also his historical 
 method, which would have ensured even to his failure 
 the renown of a great attempt. Professor Loria 
 asked, after reading this third volume of Capital, if 
 there ever was a more complete reductio ad absiirdiim, 
 a greater theoretical bankruptcy, or if a scientific sui- 
 cide was ever committed with greater pomp and 
 solemnity. 
 
 Marx's law of value of the capitalist mode of pro- 
 make use of unequal amounts of labor, they cannot produce 
 equal amounts of surplus value or of profit, as a Ricardian 
 would call it. The opposite, however, is the case. As a matter 
 of fact, equal investments produce, regardless of how much or 
 how little wage labor they employ, equal average profits in equal 
 periods of time. Herein lies, therefore, a contradiction to the 
 law of value which Ricardo himself discovered, and which his 
 school was unable to explain. . . . The economists who are 
 anxious to discover in Rodbertus the secret source and a 
 philosophical forerunner of Marx have here an opportunity to 
 show what Rodbertian philosophy can accomplish. If they prove 
 how an equal average rate of profit can and must come about, 
 not only without a violation of the law of value, but by means 
 of it, then we can hold further converse with each other." 
 Marx, Kapital, vol. ii (Hamburg, 1893), p. xxii. 
 
266 MARXISM VERSUS SOCIALISM 
 
 duction, which in the first volume was presented as 
 a natural law, like the law of gravity, is nullified in 
 the third volume by capitalist competition. The cap- 
 italist does not care for the organic composition of his 
 capital investment. It is immaterial to him whether 
 he has invested £90 in constant capital and f 10 in 
 variable capital, or whether his capital investment is 
 composed of £10 constant + £90 variable capital. In 
 either case he has invested £100, and upon the sum 
 total of his investment he expects a return. Different 
 as the organic compositions of the various capital 
 investments may be, " a difference in the average rate 
 of profit in the various lines of industry does not 
 exist in reality, and could not exist without abolishing 
 the entire system of capitalist production." " Appar- 
 ently, then, the theory of value is irreconcilable at 
 this point with the actual process, irreconcilable with 
 the real phenomena of production, so that we must 
 give up the attempt to understand these phenomena. 
 In the first part of this volume it is admitted that the 
 cost prices are the same for products of different 
 spheres of production, in which equal portions of cap- 
 ital have been invested for purposes of production, 
 regardless of the variable composition of such capitals. 
 
 ^® It was with a theoretical analysis of capitalist production 
 alone that Marx dealt in his Capital, and the " laws " he pro- 
 mulgated were to be laws of capitaHst production. Cf. Capital, 
 vol. i, pp. xxviii, 146, 147. It should be noted that the subtitle 
 of the authorized English translation of the book is "A critical 
 analysis of capitalist production." 
 
COLLAPSE OF THEORY OF VALUE 267 
 
 The cost price does not show any distinction between 
 variable and constant capital as regards the return to 
 the capitalist. A commodity for which he must ad- 
 vance £100 in production costs him the same amount, 
 whether he invests £90 c. + £10 v., or £10 c. + £90 v. 
 He always spends £100 for it, no more, no less. The 
 cost prices are the same for investments of the same 
 amounts of capital in different spheres, no matter how 
 much the produced values and surplus values may 
 differ. The equality of cost prices is the basis for the 
 competition of the invested capitals, by which an aver- 
 age rate of profit is brought about. ^^ 
 
 This is a formal retreat to the classical cost-of- 
 production theory of value. The statement that the 
 price is but the money expression of value and the 
 assertion that commodities exchange according to their 
 values are simply dropped. Instead, we are told that 
 in reality the average rate of profit on the entire cost 
 of production is maintained, regardless of the so-called 
 organic composition of capital. In reality, therefore, 
 the commodities are sold either above or below their 
 value. 
 
 Some economists, after hearing of the final solution 
 of Marx's value problem, called the whole Marxian 
 construction a mystification. After the much-heralded 
 new natural law — his own law of value — we are told 
 in the third volume that the price has nothing to do 
 with value. " The price of production of a commodity, 
 
 ^■^ Capital, vol. iii, pp. 181, 182. 
 
268 MARXISM VERSUS SOCIALISM 
 
 then, is equal to its cost price plus a percentage of 
 profit apportioned according to the average rate of 
 profit, or, in other words, equal to its cost-price plus 
 the average profit." ^^ 
 
 If the value of the product does not regulate the 
 price of the product, if the profit of the capitalist is 
 not determined by the surplus value extracted by him 
 but by the average rate of profit that he gets on the 
 sum total of the cost of production, then the first 
 volume of Capital might as well never have been writ- 
 ten. The reader might have been spared all the near- 
 Aristotelian metaphysical chase after the tertiitm com- 
 parationis, that is defined as neither one thing nor 
 another, but as an unsubstance, as a jelly (Gallerte) 
 of human labor, and as ruling all exchange and estab- 
 lishing all equations under the name of value. Marx 
 affirmed that his law of value was a working law; 
 it did not prove to be so, and he admitted it; but 
 the blame he put not upon the law he had discovered, 
 but upon the perversity of mankind, who act without 
 any understanding for the innermost meaning of 
 things as revealed by Marx. " If it is realized — and 
 the reader will have realized it to his great dismay — 
 that the analysis of the actual internal interconnections 
 of the capitalist process of production is a very com- 
 plicated matter and a very protracted work; if it is 
 a work of science to resolve the visible and external 
 movement into the internal actual movements, then it 
 ^^ Ibid., vol. iii, p. i86. 
 
COLLAPSE OF THEORY OF VALUE 269 
 
 is understood, as a matter of course, that the concep- 
 tions formed about the laws of production and cir- 
 culation will differ widely from these real laws and 
 will be merely the conscious expression of the apparent 
 movements. The conceptions of a merchant, a stock- 
 gambler, a banker, are necessarily quite perverted. 
 Those of the manufacturer are vitiated by the acts of 
 circulation, to which their capital is subject, and by 
 the compensation of the general rate of profit." ^^ 
 
 How then, one would ask, does Marx reconcile his 
 law of value with the above admissions? 
 
 He tells us that if we take the sum of all capital 
 investments in their aggregate as one product, then 
 the product in its aggregate, and only in its aggregate, 
 will sell exactly at its value. But the products of a 
 single capitalistic enterprise do not sell at their values. 
 Why not? Because, says Marx, — *' if the commodities 
 are sold at their value, then, as we have shown, con- 
 siderably different rates of profit arise in the various 
 spheres of production, according to the different or- 
 ganic composition of the masses of capital invested 
 in them. But capital withdraws from spheres with 
 low rate of profit and invades others which yield a 
 higher rate. By means of this incessant emigration 
 and immigration, in one word, by its distribution 
 among the various spheres in accord with a rise of 
 the rate profit here, and its fall there, it brings about 
 such a proportion of supply to demand that the average 
 " Ibid., vol. iii, p. 369. 
 
270 MARXISM VERSUS SOCIALISM 
 
 profit in the various spheres of production becomes the 
 same, so that values are converted into prices of pro- 
 duction.^** 
 
 Does the reader reahze what Marx has proved by 
 this statement? Squarely and clearly and forcibly 
 Marx states here, and proves it to us, that commodities 
 exchange not in proportion to the labor they contain. 
 In other words, the theory of value as originally 
 formulated by Marx is false. But, we are told, the sum 
 of the prices of all production is equal to the sum of 
 their values. This statement has no meaning whatso- 
 ever, because the sole raison d'etre of a theory of 
 value is to explain to us the relations and proportions 
 of exchange. The idea that the totality of all produc- 
 tion is equal to the sum total of all products is not 
 exactly adapted to revolutionize the thinking world. 
 Let me quote Bohm-Bawerk's reply to this statement 
 of Marx : 
 
 " There can clearly only be a question of an ex- 
 change relation between different separate commodi- 
 ties among each other. As soon, however, as one looks 
 at all commodities as a whole and sums up the prices, 
 one must studiously and of necessity avoid looking at 
 the relations existing inside of this whole. The in- 
 ternal relative differences of price do compensate each 
 other in the sum total. For instance, what the tea is 
 worth more than the iron, the iron is worth less than 
 tea and vice versa. In any case, when we ask for 
 ^° Ihid., vol. iii, pp. 230, 231. 
 
COLLAPSE OF THEORY OF VALUE 271 
 
 information regarding the exchange of commodities 
 in pohtical economy, it is no answer to our question 
 to be told the total price which they fetch when taken 
 all together, any more than if, on asking by how many 
 fewer minutes the winner in a prize race had covered 
 the course than his competitor, we were to be told 
 that all the competitors together had taken twenty-five 
 minutes and thirteen seconds. 
 
 " The state of the case is this : To the question of the 
 problem of value the followers of Marx reply first with 
 their law of value, i.e., that commodities exchange in 
 proportion to the working time incorporated in them. 
 Then they — covertly or openly — revoke this answer in 
 its relation to the domain of the exchange of separate 
 commodities, the one domain in which the problem has 
 any meaning, and maintain it in full force only for 
 the whole aggregate national produce, for a domain 
 therefore in which the problem, being without object, 
 could not have been put at all. As an answer to the 
 strict question of the problem of value, the law of 
 value is avowedly contradicted by the facts, and in 
 the only application in which it is not contradicted by 
 them it is no longer an answer to the question which 
 demanded a solution, but could at best only be an 
 answer to some other question. 
 
 " It is, however, not even an answer to another 
 question; it is no answer at all; it is simple tautology. 
 For, as every economist knows, commodities do event- 
 ually exchange with commodities — when one pene- 
 
2^2 MARXISM VERSUS SOCIALISM 
 
 trates the disguises due to the use of money. Every 
 commodity which comes into exchange is at one and 
 the same time a commodity and the price of what is 
 given in exchange for it. The aggregate of com- 
 modities, therefore, is identical with the aggregate 
 of the prices paid for them ; or, the price of the whole 
 national produce is nothing else than the national prod- 
 uce itself. Under these circumstances, therefore, it 
 is quite true that the total price paid for the entire 
 national produce coincides exactly with the total 
 amount of value or labor incorporated in it. But this 
 tautological declaration denotes no increase of true 
 knowledge, neither does it serve as a special test of the 
 correctness of the alleged law that commodities ex- 
 change in proportion to the labor embodied in them. 
 For in this manner one might as well, or rather as 
 unjustly, verify any other law one pleased — the law, 
 for instance, that commodities exchange according to 
 the measure of their specific gravity. For if certainly 
 as a "separate ware " i lb. of gold does not exchange 
 with 1 lb. of iron, but with 40,000 lbs. of iron; still, 
 the total price paid for i lb, of gold and 40,000 lbs. 
 of iron taken together is nothing more and nothing 
 less than 40,000 lbs. of iron and i lb. of gold. The 
 total weight, therefore, of the total price — 40,001 lbs. 
 — corresponds exactly to the like total weight of 
 40,001 lbs. incorporated in the whole of the com- 
 modities. Is weight consequently the true standard 
 
COLLAPSE OF THEORY OF VALUE 273 
 
 by which the exchange relation of commodities is de- 
 termined?"'^ 
 
 How fundamentally untenable Marx's theory is, is 
 shown by Engels's desire to shift the historical setting 
 of the whole proposition. Such an attempt is already 
 suggested by Marx himself in his third volume of 
 Capital}'^ Engels takes up Marx's suggestion and in- 
 forms us that Marx's law of value was generally valid 
 economically from the beginning of all recorded his- 
 tory down to the fifteenth century.'^ For thousands 
 of years commodities exchanged in the ratio of the 
 labor value they contained, even if they do not ex- 
 change so now. This period extended, according 
 to Engels, anywhere from five to seven thousand 
 years, but ended some five centuries ago! This ex- 
 planation is pathetic. Marx definitely and crisply in- 
 formed us that his law was valid only for the cap- 
 italist mode of production, for the period of the manu- 
 
 ^* Bohm-Bawerk, Karl Marx and the Close of His System 
 (New York, 1898), pp. 72-75. 
 
 " Capital, vol. iii, p. 156. 
 
 ^' " Marx's law of value was therefore generally valid eco- 
 nomically from the beginning of the period that through ex- 
 change turned products into commodities down to the fifteenth 
 century of our era. The exchange of commodities, however, 
 dates from a time anterior to all written records, stretching 
 back in Egypt to a period at least 2,500 and perhaps 5,000 years, 
 and in Babylon 4,000 and perhaps 6,000 years b.c. : the law of 
 value has therefore been in force for a period of from 5,000 to 
 7,000 years." Fr. Engels, Letzte Arbeit: Ergdnsung und 
 Nachtrag zum dritten Buch des " Kapital" : Die Neue Zeit, 
 Jahrg. XIV, 1896, vol. i, p. 39. 
 
274 MARXISM VERSUS SOCIALISM 
 
 facture of commodities for the highly developed 
 market, where exchange is not accidental and is im- 
 personal.^* Furthermore this period was limited to 
 those times in which there has been a free proletariat 
 class — free as to their persons, equal to their em- 
 ployer before the law, but having for sale no other 
 commodity but their labor-power. Or, as Marx puts 
 it, — '' Labor-power can appear upon the market as a 
 commodity only if, and so far as, its possessor, the 
 individual, whose labor-power it is, offers it for sale, 
 or sells it, as a commodity. In order that he may 
 be able to do this, he must have at his disposal, must 
 be the untrammeled owner of, his capacity for labor, 
 i.e., of his person. He and the owner of money meet 
 in the market and deal with each other on the basis 
 of equal rights, with this difference alone, the one is 
 buyer, the other is seller; both therefore equal in the 
 eyes of the law." ^^ Marx's entire theory is thus an 
 analysis of capitalist production; and now, when the 
 collapse of his law of value is too obvious to be dis- 
 cussed, we are told that if the law is not true for 
 capitalist production it was nevertheless true for the 
 period preceding the fifteenth century, i.e., for the 
 periods of domestic economy, of barbarism, of slavery, 
 of serfdom — in short, for any period except the one 
 where, in Marx's scheme, it would have had some 
 meaning and importance. 
 
 ^* Capital, vol. iii, p. 209. Cf. supra, p. 255. 
 ^^ Ibid., vol. i, p. 146; item. 
 
COLLAPSE OF THEORY OF VALUE 275 
 
 At first glance it may look as if Marx faced the 
 debacle only when he tried to solve the problem of 
 the average rate of profit in his third volume of Cap- 
 ital. A close examination will show, however, that he 
 was quite aware of the situation while writing his 
 first volume. The collapse of his law of value is al- 
 ready there. Only look at his theory of wages. 
 Marx tells us that labor-power is a commodity and its 
 value is determined like that of any other commodity : 
 " The value of labor-power is determined, as in the 
 case of every other commodity, by the labor-time neces- 
 sary for the production, and consequently also the 
 reproduction, of this special article. So far as it has 
 value, it represents no more than a definite quantity 
 of the average labor of society incorporated in it. 
 Labor-power exists only as a capacity, or power of 
 the living individual. Its production consequently pre- 
 supposes his existence. Given the individual, the pro- 
 duction of labor-power consists in his reproduction of 
 himself or his maintenance. For his maintenance he 
 requires a given quantity of the means of subsistence. 
 Therefore the labor-time requisite for the production 
 of labor-power reduces itself to that necessary for the 
 production of those means of subsistence; in other 
 words, the value of labor-power is the value of the 
 means of subsistence necessary for the maintenance of 
 the laborer." ^^ This is a clear-cut statement of the 
 cost-of-subsistence theory of wages and is quite in ac- 
 " Ibid., vol. i, p. 149. 
 
2^6 MARXISM VERSUS SOCIALISM 
 
 cord with Marx's value theory. But is this the theory 
 of wages that Marx maintains? Not at all. He de- 
 clares himself a strenuous opponent of the iron law 
 of wages, as we have pointed out in a preceding sec- 
 tion of the present study.^^ The cost-of -maintenance 
 theory is quite abandoned in his final reserve-army and 
 increasing-misery theory of wages. At times the price 
 of labor-power is much above the cost of maintenance, 
 only too often much below that cost, but " in propor- 
 tion as capital accumulates, the lot of the laborer, be 
 his payment high or low, must grow worse." ^^ Under 
 no circumstances does Marx's law of value regulate 
 the price of the commodity of labor-power. It is 
 regulated, according to time, by the competition of 
 the reserve army of the unemployed with those em- 
 ployed. And this reserve army of unemployed, this 
 relative surplus population, is created by machinery, 
 the " labor-saving " device invariably called in by cap- 
 ital as soon as the margin of surplus value pressed out 
 by the capitalist becomes narrow.^^ 
 
 So here again prices are regulated not by the law of 
 value but quite independently of that law. Thus we 
 
 ^' See note on pp. 99-100 and pp. 111-119. 
 
 ^* Capital, vol. i, p. 661. 
 
 ^^ For additional substantiation of the conflict between Marx^s 
 law of value and his theory of wages, cf. the extremely just 
 and learned study of Diehl, "Ueber das Verhaltnis von Wert 
 und Preis im okonomischen System von Karl Marx," in the 
 Festschrift sur Feier des 25-idhrigen Bestehens des staats- 
 wissenschaftlichen Seminars in Halle (Jena, 1898), especially 
 chapter iv: "Wert und Preis der Arbeitskraft." 
 
COLLAPSE OF THEORY OF VALUE 2.^^ 
 
 see that the so-called great central doctrine — the law 
 of value — is but a bubble, admittedly without any 
 validity in concrete economic experience and even 
 without continuous cohesion as a mental construction. 
 If the reader so chooses, he may disregard all hostile 
 criticisms of the theory. All he has to do is to follow 
 Marx, and he will arrive at the complete destruction 
 of Marx's own central doctrine. 
 
CHAPTER XIII 
 
 MARX'S ATTITUDE TOWARDS ETERNAL 
 JUSTICE. CONCLUDING REMARKS 
 
 Marx's theory of value came to grief/ But let us 
 assume for argument's sake that this law of value is 
 as valid as the law of gravitation. What does social- 
 ism stand to gain from such an assumption? If the 
 law of value is true, then all accumulated capital is 
 
 ^ Marx, as a mere youngster, in discussing Szeliga's mysteries 
 of speculative construction, ridiculed in advance the logical con- 
 struction of his own future theory of value. He had not then 
 written about an unsubstantial reality of things or about com- 
 modities as a jelly of abstract human labor, but he might almost 
 have been discussing the mysteries of his own theory of surplus 
 value when he wrote: "If from real apples, pears, straw- 
 berries, almonds, I form the general idea ' fruit,' and if I go 
 further and imagine that my abstract idea, derived from the 
 concrete fruit, has an existence outside of myself, is, indeed, the 
 real existence of the pear, apple, etc., then I postulate the 
 speculative ' fruit ' as the * substance ' of the pear, the apple, the 
 almond, etc. I state, therefore, that it is non-essential for the 
 pear to be a pear or the apple to be an apple. What is essential 
 to these objects is not their real existence which is evident to 
 the senses, but the generaHzation that I have made of them, the 
 essence of my own conception ' fruit,' by which name I called 
 their substance. I then proclaim that the apple, the pear, the 
 almond, etc., are merely states or 'modi' of the 'fruit' . . ." 
 Friedrich Engels and Karl Marx, Die heilige Familie oder 
 Kritik der kritischen Kritik: Gegen Bruno Bauer und Con- 
 sorten (Frankfurt a, M., 1845), p. 79; reprinted in Literarischef 
 Nachlass, vol. ii, p. 156. 
 
 278 
 
CONCLUDING REMARKS 279 
 
 an accumulation of unpaid labor, then all profit is but 
 realized exploitation, then the character and meaning 
 of wage slavery is fully explained. Then the injustice 
 of the capitalist mode of production is so palpable and 
 so appalling that the abolition of private ownership 
 of means of production is a moral necessity. This is 
 precisely what is being said now by so many socialists. 
 This is precisely what has been said in the past; and 
 it is precisely this attitude of mind that led Marx to 
 differentiate himself from his socialist forerunners and 
 to preach a system of his own. The most original 
 and most lasting contribution of his was his conception 
 of economic necessity. " Justice, Humanity, Liberty, 
 etc., may have called a thousand times for this or for 
 that, but if it is impossible, it will never be realized and 
 will remain but an empty dream." ^ For empty dreams 
 he had little respect; and as such dreams he regarded 
 all humanitarian and Utopian socialism and all social 
 reform. '' These gentlemen," he said, " hate think- 
 ing, heartless thinking, as they hate struggle and de- 
 velopment. As if any thinker, Hegel and Ricardo not 
 excluded, had ever been so heartless as to slop over 
 our heads such soft-mouthed slobber." ^ The reader 
 can find many such sentiments expressed by Marx 
 about his idealistic contemporaries.* 
 
 ^ Literarischer Nachlass, vol. iii, p. 249. 
 
 ' Ihid., vol, iii, p. 476. 
 
 * See for instance what he had to say about the early New 
 York socialist, Hermann Kriege. Literarischer Nachlass, vol. ii, 
 pp. 415, 416. 
 
28o MARXISM VERSUS SOCIALISM 
 
 Even real slavery Marx regarded as a necessity, 
 under given economic conditions. He was by no 
 means an abolitionist. So he wrote in 1847: '' With- 
 out slavery you have no cotton, without cotton you 
 cannot have modern industry. It is slavery which has 
 given their value to the colonies, it is the colonies 
 which have created the commerce of the world, it is 
 the commerce of the world which is the essential condi- 
 tion of great industry." ^ Several years later we find 
 him repeating the same argument, and also explaining 
 under what conditions he expected the disappearance 
 of slavery. 
 
 " This fact, however, goes straight back to the only 
 possible and practical solution of the slave question, 
 that again has caused so many long debates in Con- 
 gress. Cotton production in America rests upon 
 slavery. As soon as the industry has reached such a 
 development that it refuses to put up with the Amer- 
 ican monopoly of cotton, just so soon will the produc- 
 tion of cotton in large quantities be a success in other 
 lands, and practically everywhere at the present time 
 this can be done only through free labor. But as soon 
 as free labor in other lands produces cotton as ex- 
 tensively and as cheaply as slave labor in the United 
 States, the American monopoly of cotton and Amer- 
 ican slavery will together be broken, and the slaves 
 will be emancipated because they have become useless 
 as slaves. Similarly will wage labor in Europe be 
 
 * The Poverty of Philosophy (1900), p. 90. 
 
CONCLUDING REMARKS 281 
 
 done away with as soon as it has become not only an 
 unnecessary part of production but even a fetter upon 
 it." « 
 
 We are dependent upon our industry, Marx ex- 
 plained, and we are not in a position to dictate hu- 
 manitarian conditions upon which production is to 
 rest. As a revolutionary socialist he argued at times 
 like Nassau Senior. He was, as a matter of fact, 
 against the ten-hour bill, because he feared that the 
 famous factory act might cripple British industry. So 
 we read: " The whole social development of England 
 is part and parcel of the development and progress 
 of industry. All institutions that stop this progress, 
 or limit it, or regulate it according to external plans, 
 are reactionary, impossible, and have to succumb. 
 The revolutionary forces that so easily had their way 
 with the whole patriarchal society of England, with 
 the landed aristocracy, and with the financial aristoc- 
 racy, will surely not let themselves be hemmed within 
 the limits of the ten-hour bill." '^ 
 
 Marx in course of time changed his hostile attitude 
 toward the factory acts and toward labor legislation 
 in general, as his inaugural address before the Inter- 
 national in 1864 plainly indicates; but his attitude to- 
 wards the " demand for justice " remained the same. 
 When, in 1875, the German social democracy adopted 
 a program in which it based its demands upon " just 
 
 • Literarischer Nachlass, vol. iii, pp. 458, 459. 
 ' Ihid., vol. iii, p. 392. 
 
282 MARXISM VERSUS SOCIALISM 
 
 distribution," Marx criticised that program bitterly 
 and asked in derision: What is "just distribution"? 
 Does not the bourgeoisie regard the present mode of 
 distribution as " just " ? And is it not, as a matter of 
 fact, the only " just " distribution on the basis of the 
 existing mode of production? Does not every social- 
 ist sect have different conceptions as to what may 
 constitute a " just " distribution? The law governing 
 distribution is dependent upon its economic basis and 
 cannot be of a higher type than the economic develop- 
 ment of society may justify.^ For the so-called ideas 
 of eternal justice Marx had a distinct aversion, for 
 two obvious reasons. First of all, these ideas were 
 but touched-up and beautified reflections of very tem- 
 porary conditions. So he wrote about the Utopian 
 schemes of the English socialist Bray : *' Mr. Bray 
 does not see that this equalitarian relation, this cor- 
 rective ideal, which he wishes to apply to the world, is 
 itself nothing but the reflection of the existing world, 
 and that it is in consequence quite impossible to recon- 
 stitute society on a basis which is only an embellished 
 shadow. In proportion as this shadow becomes sub- 
 stance, it is seen that this substance, far from being 
 the dreamed-of transfiguration, is nothing but the body 
 of existing society." ^ The other objection of Marx 
 to the appeal to justice as a means of reconstructing 
 society, is that this appeal, while interesting and symp- 
 
 * Die Neue Zeit, 1890, vol. i, pp. 565, 566. 
 " The Poverty of Philosophy, p. 53. 
 
CONCLUDING REMARKS 283 
 
 tomatic, is as a whole utterly futile. Have we not 
 heard that appeal, asked Marx, for eighteen hundred 
 years, and what is the net result? ^^ 
 
 A clever advocate of orthodox Marxism, Dr. Lux- 
 emburg, calls the principle of justice the good old 
 Rosinante, upon which every Don Quixote of the 
 world's history has taken a ride, to return home finally 
 with nothing but a black eye to show for his trouble. ^^ 
 
 This attitude of Marx and Engels is expressed in 
 unmistakable language in every important work of 
 theirs, in their earlier as in their later writings. En- 
 gels emphasizes it clearly in his Anti-Duehring. " li 
 we have no better security for the revolution in the 
 present methods of distribution of the products of 
 labor, with all their crying antagonisms of misery and 
 luxury, of poverty and ostentation, than the conscious- 
 ness that this method of distribution is unjust and that 
 justice must finally prevail, we should be in evil plight 
 and would have to stay there a long time. The mys- 
 tics of the Middle Ages, who dreamed of an approach- 
 ing thousand-years kingdom of righteousness, had the 
 consciousness of the injustice of class antagonisms. 
 At the beginning of modern history three hundred 
 
 ^" Literarischer Nachlass, vol. ii, p. 416. 
 
 ^^"Then we fortunately arrived at the principle of justice, 
 at that old horse ridden for many thousands of years by all 
 world-reformers in default of surer historical means of locomo- 
 tion, at the clattering Rosinante, on which all the Don Quixotes 
 of history have ridden forth to reform the world, only to return 
 home finally with nothing to show but a black eye." Luxem- 
 burg, Sozialreform oder Revolution (1899), P- 45* 
 
284 MARXISM VERSUS SOCIALISM 
 
 years ago, Thomas Muenzer shouted it aloud to all 
 the world. In the English and French bourgeois revo- 
 lutions, the same cry was heard and died ineffectu- 
 ally/^ . . . This appeal to morality and justice does 
 not bring us a step further scientifically. Economic 
 science can find no grounds of proof in moral indig- 
 nation, however justifiable, but merely a symptom. 
 . . . The feeling stirred up by the poets, whether in 
 picturing these social wrongs or by attack upon them 
 or, on the other hand, by denial of them and the glori- 
 fication of harmony in the interests of the dominant 
 class, is quite timely, but its slight value of furnishing 
 proof for a given period is shown by the fact that one 
 finds an abundance of it in every epoch." ^^ 
 
 I might go on quoting ad infinitum from Marx and 
 from Engels, but their point of view is quite clear. 
 And how could Marx's attitude towards the " appeal 
 to justice" be different? His fundamental proposi- 
 tion was that all legal and political institutions, all 
 ideologies, all our ideas of justice, etc., are dependent 
 on the economic basis. Development of economic 
 conditions, shifting of the economic basis, will affect 
 and change prevailing ideas of law and justice. It 
 is the economic conditions, the forces of production, 
 that drive society and influence individuals ; our ideas 
 of good and evil are but products of these basic forces. 
 
 *^ Engels, Landmarks of Scientific Socialism (Anti-Dueh- 
 ring), pp. 182, 183. Cf. also pp. 123, 127, 128, 131. 
 '' Ibid., p. 180. 
 
CONCLUDING REMARKS 285 
 
 How then could Marx turn about and expect that 
 these ideologies, which are subject to constant change, 
 should influence, much less reconstruct, the basic eco- 
 nomic conditions? Marx could not assume the sov- 
 ereign rule of forces of production, he could not 
 assume that our future is definitely revealed to us by- 
 economic tendencies, and yet grant that these economic 
 tendencies are mere clay to be modeled by an ideo- 
 logical conception of our own. 
 
 *' Eternal " justice was to Marx an object of de- 
 rision. The ideas of justice are constantly changing, 
 changing from time to time, from people to people. 
 Our ideas of social justice are quite different from 
 those of the Roman world, different from those of 
 the feudal world, different even from those of our 
 grandfathers; and those that will be held by our 
 grandchildren are bound to be different from ours. 
 These ideas change with the changes in the economic 
 conditions. Righteous indignation may accompany 
 profound economic changes, but it does not produce or 
 create those changes. That is why Marx expected his 
 socialism and his social revolution to be the result of 
 the development of economic forces — a development 
 indicated and revealed to us by the existing economic 
 tendencies, tendencies that lead to the " expropriation 
 of the expropriators," the social revolution, and the 
 new social order. 
 
 In a preceding chapter I tried to point out how 
 much Marx overestimated the significance of his eco- 
 
286 MARXISM VERSUS SOCIALISM 
 
 nomic interpretation of history.^^ It has other more 
 fundamental faults. Even granting that all changes 
 in our ideologies are produced by economic changes, 
 the ideologies themselves are by no means explained. 
 Granted that economic conditions influence and affect 
 religious beliefs, the theory does not account for re- 
 ligious beliefs as such. To take a more concrete and 
 simple example : let us grant that economic conditions 
 are responsible for the longer legs of the western-plain 
 horseback Indian and for the shorter legs of the east- 
 ern canoe Indian; the existence of legs as such, short 
 or long, is still hardly explained by economic condi- 
 tions. At best, therefore, only the change of a given 
 thing can be explained by the change of the economic 
 conditions, but not the thing itself. If that is true, 
 v^ho is to tell us how much of the development is due 
 to the inner momentum or life of the thing itself, 
 quite independently of all economic conditions? 
 
 The profound influence of economic forces no in- 
 telligent man will deny. We are quite prepared to 
 admit that, in so far as forecasts of the future are at 
 all legitimate, such forecasts or rather approximate 
 estimates are possible only upon the basis of economic 
 tendencies, provided, however, the conservative influ- 
 ence of deeply rooted traditions is not overlooked. 
 
 We have seen that our economic tendencies do not 
 justify the expectation of a collapse of the capitalist 
 mode of production, nor do they herald the coming 
 
 " Pp. 33-41. 
 
• CONCLUDING REMARKS 287 
 
 of a socialist commonwealth. This has become quite 
 obvious to all the serious and open-minded socialists 
 of Europe. They were socialists and Marxists; they 
 accepted the propositions of Marx because his keen 
 analytical critique eliminated all previous Utopian 
 schemes and all other types of socialism. They ac- 
 cepted Marx's very plausible statement that the eco- 
 nomic tendencies he described must lead to socialism. 
 But these tendencies have not persisted. For example, 
 no one in his senses can assume that an increasing 
 number of independent and well-to-do farmers pre- 
 sages the coming of socialism. Such a tendency is 
 making a socialist commonwealth less possible than 
 ever. 
 
 We have seen that there was actually not a tendency 
 left to which socialists who were willing to look 
 squarely at facts could pin their faith. More than 
 that, the Marxian doctrine had become a trap for so- 
 cialism; the clear-headed knew, the many felt, that 
 this doctrine, to use the Marxian phraseology, " from 
 a means of development had turned into a fetter." 
 If it is only through the inevitable economic tendencies 
 that we can be led to socialism, and if such tendencies 
 begin to indicate anything but socialism, then social- 
 ism is not to be reached at all. 
 
 Is this not precisely what the successor and follower 
 of Marx, Karl Kautsky, himself said? Did he not 
 tell us, in his Erfurter Programm, that so long as a 
 peasant remains a peasant he will adhere, no matter 
 
288 MARXISM VERSUS SOCIALISM 
 
 how ill he may fare, to private ownership of the means 
 of production ? ^^ Did not this same Kautsky, in at- 
 tacking Bernstein, clearly formulate the situation ? In 
 discussing Bernstein's facts and figures in 1898 he 
 made this admission : '' If they are true, then not only 
 is the day of our victory postponed, but we can never 
 reach our aim. If capitalists are on the increase and 
 not the propertyless, then development is setting us 
 back further and further from our goal, then capital- 
 ism intrenches itself and not socialism, then our hopes 
 will never materialize." ^^ 
 
 Bernstein was quite right in his figures, and Kautsky 
 was quite right in his statement. It meant that the 
 great system of scientific socialism, which Marx had 
 built up with so much learning and acumen, had be- 
 come an arsenal of arguments against the coming of 
 socialism. Who could deny that Marx's realistic 
 theory was the terrific force which organized, up- 
 lifted, unified the socialist movement throughout the 
 world? Precisely this very force had now turned 
 against international revolutionary socialism. 
 
 The spokesmen and thinkers of scientific socialism 
 have realized the situation, and for them the last dec- 
 ade or so has been a period of attempts to escape 
 from an untenable position. First of all, attempts 
 were made to interpret Marx, to tone him down, to 
 twist his statements so that they might not contradict 
 
 ^® Kautsky, Erfurter Programm (1892), p. 180. 
 ^® Protokoll der Stuttgarter Parteitags, 1898, p. 128. 
 
CONCLUDING REMARKS 289 
 
 too glaringly the very obvious facts. Nearly all the 
 surviving orthodox Marxists belonged to this category. 
 But theirs was a losing fight. It was a slow retreat 
 before the incoming tide of revisionism. 
 
 Revisionists call themselves socialists, they are mem- 
 bers of the Socialist party; and, if not to-day, then 
 to-morrow, they will control the theoretical platform 
 of the German Socialist party as completely as 
 they already control its practical policies. Barring 
 Kautsky, nearly every socialist scholar of merit be- 
 longs to that wing; barring Bebel, who has often sided 
 with them, nearly every practical leader of note is 
 actually a revisionist, whether or not he accepts the 
 designation. Of socialism they have preserved only 
 the name; they are social reformers. Bernstein, who 
 inaugurated the revisionist movement, frankly admits 
 in his book, Die Voraussetzimgen des Socialismiis, 
 that the goal of socialism — ^the socialist common- 
 wealth — means nothing to him, while the social move- 
 ment means everything. 
 
 Bernstein has grave doubts whether the state can 
 ever take over the great industries. In fact, he gives 
 excellent reasons why they can not be taken over by 
 the state ; ^^ and he points out how utterly impossible 
 
 ^^"Can the state take over world industries? What would 
 that mean? Can the modern state take possession of industries 
 whose business is in large part of a speculative nature, — in- 
 dustries which with their products and their possibilities enter 
 the world market as competitors, and in the struggle for sale 
 and commissions develop all the fine qualities of modern com- 
 
290 MARXISM VERSUS SOCIALISM 
 
 it would be for workingmen to take over what the 
 state cannot possibly handle. Industries expropriated 
 in a revolution would prove to be empty shells, utterly 
 worthless to the revolutionary proletariat. 
 
 It is obvious that this is the point of view of a social 
 reformer. It would be a misnomer to call it socialism, 
 were it not for the fact that there is no room left for 
 real socialism in our present-day economic develop- 
 ment. 
 
 petition? If the state neither will nor can do this, are these 
 industries, which play so great a part in modern economic life, 
 which together employ armies of laborers, and on whose exist- 
 ence the well-being of a great part of the population depends, 
 are they in a social catastrophe to be deHvered over to ruin 
 simply because the state cannot take them over? Quite other 
 means and quite different methods must be employed to bring 
 them gradually under stronger control by the state, which can 
 only slowly and by degrees become master of the situation. 
 During a very real revolutionary movement the workingmen 
 in the Russian industrial centers have become only too well 
 aware of it. . . . If I am not mistaken, Kautsky, in the state- 
 ment which he made here in Holland concerning the beginning 
 of the revolution, developed the idea that the voluntary aban- 
 doning of the factories by the manufacturers would be one of 
 the first results of the revolution of the laboring class, and 
 that the manufacturers would say, 'Very well; take the fac- 
 tories away, but leave us alone.' Truly this is very possible, 
 and I admit that such an expropriation would be very cheap. 
 The only question is whether the workingmen shall or can take 
 over the factories, of which the state cannot take charge, and 
 carry them on with success. And after all that we have hereto- 
 fore seen, we are forced to the conclusion that workmen neither 
 will nor can assume control of the factories. In a revolution 
 the factories thus cheaply expropriated would be mere empty 
 husks." Bernstein, Der Revisionismus in der Socialdemokratie 
 (Amsterdam, 1909), pp. 23-25. 
 
CONCLUDING REMARKS 291 
 
 Interesting is the history of another distinguished 
 Marxist leader, Peter von Struve. He introduced 
 Marxism into Russia and, together with Tugan- 
 Baranowsky, became one of the chief exponents of 
 Marxism in that country. Struve had to pass through 
 precisely the same development as Bernstein. Their 
 views to-day are very much alike; but while Bernstein 
 is the leader of the '^ Socialists " in Germany, Struve 
 does not call himself any longer a socialist, but is one 
 of the leaders of the Constitutional Democratic party. 
 In their theory, in their hopes for the future, in their 
 practical policies, these two men are as alike as two 
 peas; but one is called a socialist, the other a Liberal 
 Democrat. Twenty years ago both of them were 
 revolutionary socialists. If we turn to Italy, we find 
 the same situation. The venerable Professor Ferri, 
 who for decades led the Italian socialists as a scholar 
 and a politician, found himself compelled to admit 
 that socialism had lost its meaning; and since he was 
 not willing to call himself a Marxian socialist when 
 he had become a social reformer, he frankly abandoned 
 both socialism and his party. 
 
 But there is no necessity to cite luminaries and 
 great leaders. What is true about them, is true about 
 the every-day socialist worker. Mr. Walling, an 
 ardent revolutionary socialist, writes in his recent 
 book : *' There can be no doubt that Socialist reform- 
 ism has become very widespread. . . . It is doubt- 
 less true, as Mr. Gompers says, that the individuals 
 
292 MARXISM VERSUS SOCIALISM 
 
 he questioned have practically abandoned their So- 
 cialism, even though they remain members of the 
 Socialist parties." ^^ 
 
 Whether they call themselves revisionists, reform- 
 ists, laborites or plain socialists, whether they go on 
 respecting the old melodramatic phrases or not, the 
 overwhelming majority of the socialists of to-day are 
 tending to be reformers. Their Marxian training does 
 not permit them to be Utopians, and the faith in social- 
 ism as an inevitable economic necessity is rapidly 
 evaporating, the economic facts being what they are. 
 
 On the other hand, revisionism, which amounts to 
 social reform, to gradual betterment, with hope for 
 the future but without any promises as to the final out- 
 come, has failed to satisfy those who have expected 
 an immediate and final solution of the social problem. 
 Temperamentally irreconcilable to mere social reform, 
 yet admitting the untenability of scientific socialism, 
 they required a different revision of Marx. Men of 
 this fanatical temperament had to become revolution- 
 ary revisionists, and this temperamental demand has 
 been supplied in the Latin countries by the so-called 
 " syndicalism." 
 
 George Sorel, Ed. Berth, Leone, Labriola, and other 
 syndicalists are very interesting critics of Marx, and 
 I am sorry that I cannot find room for their criticisms 
 in this study. To me, however, syndicalism seems 
 more interesting than important. Acutely disturbing 
 
 *^ Walling, Socialism as It Is, p. 121. 
 
CONCLUDING REMARKS 293 
 
 as the movement may be, it is, in my opinion, very 
 ephemeral. In fact, its leaders Sorel and Berth 
 have already abandoned it and exchanged it for 
 — monarchism ! When invited to an Italian Syndical- 
 ist Congress in December, 19 10, M. Sorel replied that, 
 in his opinion, syndicalism had not realized what was 
 expected from it. Many hoped that the future would 
 correct the evils of the present hour, he said, but he 
 felt himself too old to live in distant hopes; and he 
 had decided to employ the remaining years of his life 
 in the deeper study of other questions which keenly 
 interested the cultivated youth of France.^^ 
 
 Now that the socialist parties have become in reality 
 reform parties, they may become even tamer than they 
 are to-day; but why should they give up the old 
 phrases ? Talk about the " social revolution " may 
 sound fantastic, in view of the existing economic 
 conditions and tendencies, but it is more than talk. 
 The inevitable cataclysm and the social revolution 
 have a mystical quality, and hence they are assets. 
 A social movement that is quite sensible, quite reason- 
 able, is the wildest of all Utopias. Such a movement 
 can no more keep alive without faith, than faith can 
 keep alive without miracles, wrought or prophesied. 
 The social revolution that is to come has all the essen- 
 tial characteristics of the standard miracle : it is to be 
 sudden, and it is to be final. What element of the 
 miraculous would there be in a slow but steady con- 
 
 " Levine, The Labor Movement in France, pp. 151, 152. 
 
294 MARXISM VERSUS SOCIALISM 
 
 valescence? And how unsatisfactory a miraculous 
 cure would be if it had to be repeated! Social reform 
 cannot arouse the passionate ardor that is kindled by 
 the apocalyptic vision of the social cataclysm. The 
 road to social reform is flat and dusty; the journey 
 along it is hard and dull. It is a wise instinct, there- 
 fore, that moves the socialists who have become social 
 reformers to cling to the earlier vision and intone, as 
 of old, their imprecatory psalms. But the contrast 
 between their policies and their theories, between what 
 they do and what they say, tempts one to say of them, 
 inverting the Biblical quotation : '' The hands are the 
 hands of Jacob, but the voice is the voice of Esau." 
 
INDEX 
 
 Adams, Chas. F., 165 
 Adams, John, 164 
 Adams, T. S., 140, 142, 144 
 Agriculture, ix, 57 f., 62 ff., 70, 
 
 207, 211 fif. 
 concentration of, 57 ff., 66 
 decentralization of, ix, 65 f. 
 
 Andler, Ch., 113 
 Aristotle, 256 f . 
 Ashley, Lord, 102 
 Ashley, W. J., 'JZ, I33 ff- 
 Aveling, 21 
 
 Babeuf, 154, 161 f., 202, 245 
 
 Bacon, Fr., 173 
 
 Baudeau, 159 
 
 Bauer, B., 278 
 
 Bebel, 87, 204, 241 
 
 Becker, J. P., 58, 64, 124 
 
 Bernstein, Ed., 67, 93, 96, 126, 
 
 215 f., 231, 288 f. 
 Berth, 293 
 
 Blake, William, 42, 43 
 Blanc, Louis, 149, 211 
 Blanqui, 202, 245 
 Bohm-Bawerk, i, 270 ff. 
 Bouniatian, 239 
 Bourgeoisie, 16-18, 34 ff., 192, 
 
 208, 226 
 Bowley, 138-9 
 Bracke, 99 
 Brandt, 38 
 Bray, 282 
 Bronterre, 161 
 Buonarroti, 161 
 Burnell, A. C, 205 
 Bush, W. T., 41 
 
 Cabet, 202 
 Cairnes, 103-4 
 Calvin, 39 
 Campanella, T., 82 
 
 Cancrin, Count, 80 
 Capitalist production, 226 
 
 achievements of, 16 ff. 
 
 aera of, 35 
 
 collapse of ... X, 6, 22, 
 86, 232 ff., 2501, 290 
 Cataclysm, x, 22, 232 ff., 250 f . 
 Centralization of capital, 85 ff. 
 Chapman, M. W., 108 
 Charles I, 31 
 Classes, 16, 18 
 
 revolutionary, 173 
 
 abolition of, 193, 195 ff. 
 Class-consciousness, xi, 18, 23 
 Class doctrines, 186 
 Class interests, 213 f. 
 Class struggle, xi, 16 ff., 74, 
 150 ff., 181 ff., 190 ff., 196 ff., 
 249 
 
 intensity of . . . 213 ff. 
 
 in America, 216 ff. 
 Class struggles and classes, ab- 
 olition of, 193 
 Commercial crises, x, 21 ff., 
 
 116, 226 ff. 
 Common interests, 215-16 
 Commons, J, R., 218 ff., 223 
 Concentration of production, 
 18, 47, 52, 55 ff. 
 
 in agriculture, 57 ff., 66 
 Conrad, J., 72, IZ, 244 
 Considerant, 148 ff., 202 
 Constitutional position of cap- 
 ital, 223 
 Cremieux, 211 
 Crothers, S. M., 145, 235 f. 
 
 Darwin, 188-9 
 David, 68, 127 
 Decentralization of agriculture, 
 
 ix, 65 ff. 
 De Leon, 29, 82, 199 
 
 295 
 
296 
 
 INDEX 
 
 De I'Eure, Dupont, 211 
 Despotism as a revolutionary 
 
 policy, 195 
 Dialectic method, 251-2 
 Dictatorship of the proletariat, 
 
 vii, 193 f ., 195 ff-, 245 f. 
 Diehl, 255, 278 
 Dietzgen, J., 64 
 
 Eccarius, J. S., 59 
 
 Economic interpretation of his- 
 tory, vi-vii, X, xiii, xiv, 6, 
 lo-ii, 25 ff., 39 f-, 44-45, 
 246 ff., 251, 286 ff. 
 
 Economic tendencies, 211 f., 
 225, 234, 239, 287 
 
 Eden, Sir Frederick, 75 
 
 Ellis, E. J., 43 
 
 Enfentin, 152 
 
 Engels, F., xi, 5, 8, 14, 21, 23, 
 25, 28, 29, 34, 39, 40, 45, 57, 
 63 f., 84, 122, 129 f., 151, 
 183, 189 f., 197, 227 f., 237 f., 
 244, 248, 253, 264, 273 
 
 Espinas, 162 
 
 Expropriation of the means of 
 production, 6, 22, 86, 290 
 
 Farmer class, 58, 60, 62 f ., 69, 
 
 207, 211 ff. 
 Ferri, 291 
 
 Feuerbach, L., 44, 172 ff., 181 
 Fisher, P., 7 
 FloQon, 211 
 Fourier, 113, 150, 202 
 Fourniere, 162 
 Foxwell, 3 
 Free trade, 249 
 Freiligrath, 243 f . 
 Future organization of society, 
 
 Giffen, Sir Robert, 122, 135-7 
 Goethe, 32, 99, 163, 224 
 Gompers, 291 
 Goodnow, xiv 
 Goshen, Viscount, 91 f. 
 Griin, K., 173, 180, 182-3 
 Guild system, 71 f. 
 
 Guizot, 13, 152, 153, 188, 194 
 Gutenberg, 204 
 
 Hadley, 224 
 
 Haller, L. v., 166 ff. 
 
 Hammacher, 244, 252 
 
 Harris, 103 
 
 Hauptmann, 131 
 
 Hegel, lie, 188-9, 191, 248, 
 
 279 
 Heine, 131 
 Hepner, 241 
 Herwegh, G., 179 
 Hertz, Fr., 67 
 Hess, M., 173, 179-80, 181 
 Hughan, 239 
 Hutten, Ulrich, 36 
 
 Increasing misery, ix, 19, 98 ff. 
 Industrial reserve army, iiiff. 
 Industrial revolution, 78, 99 ff., 
 
 Ill 
 International, 58 f ., 123 
 Iron law of wages, 99 ff., no 
 
 James, William, 41 
 Jefferson, 165 
 Jones, E., 243 
 Just distribution, 281-2 
 
 Kant, 243 
 
 Kautsky, K., 23, 61, 63, 68 f., 
 71, 97, 145, 149, 151, 188, 
 200, 221 f ., 233 ff., 250, 
 287 ff. 
 
 Kisseleff, Count, 80 
 
 Kriege, H., 279 
 
 Kugelman, 188 
 
 Labriola, 149, 188 
 La f argue, 64 
 Lange, F. A., 189 
 Langsdorff, v., 130 
 Lassalle, 99 f., no 
 Lea, H. C., 36 ff. 
 Lengerke, A. v., 129 
 Leontyeff, 168 
 Leo X, 36 
 
 Le Rossignol, 3, 25, 99 
 Leroux, P., 2 
 Lescure, 239 
 Levasseur, 140 
 
INDEX 
 
 297 
 
 Levi, L., 122 
 
 Levine, 293 
 
 Lewis, 84 
 
 Liebknecht, 26, 27, 59 f., 241 
 
 Linguet, 159-60 
 
 Loria, 205, 265 
 
 Louis Philippe, 208, 211 
 
 Louis Napoleon, 29, 60, 82, 199, 
 
 208 ff., 211 
 
 Louis XIV, 31 
 Liining, 175 
 Luther, 36 ff., 169 ff. 
 Luxemburg, R., 250, 283 
 
 MacCrosty, 53-54 
 Madison, James, 163 
 Mallock, W. H, 99 
 Malthus, loi, III, 189 
 Manu, Laws of, 205 
 Martineau, H., 107, 114 
 Masaryk, T., 30, 252 
 Mediaeval industry, 71 ff. 
 Mehring, F., 126 
 Melanchthon, 170 
 Menger, 3, 113 
 Merivale, 1 12-13 
 Mohl, R. v., 102 
 Moody, Wm. Vaughn, 216 
 More, Th., xi f. 
 Morris, William, 43 
 Muenzer, Thomas, 284 
 Murner, T., 38 
 
 Nicholas I, 80 
 Nichols, Sir George, 77 
 
 Overproduction, 20, 226 ff. 
 Owen, R., 202 
 
 Paris Commune, 247 
 Pecqueur, 48, 49, 149 
 Permanent revolution, 193 
 Petty, Sir Wm., 128 
 Philosophy of revolution, 
 
 184 ff., 245 
 Plekhanoff, 152 
 Political philosophy, 185 f. 
 Political power, 193 
 conquest of . . . vii, 23, 
 
 119, 194 f., 245 f. 
 Price, 259-60 
 
 Profit, average rate of, 264 
 Proletariat, 18, 23, 60, 70 f., 79, 
 
 82 ff., 176 ff., 192-3 ff., 213, 
 
 260 
 American, 220 f . 
 Leadership of, 218 
 Proletarization of the farmer 
 
 class, ix, 50, 60 f ., 63 ff., 70 
 Proletarization of the masses, 
 
 22, 23, 70 ff. 
 Proudhon, 190 
 Piitmann, 45 
 
 Rae, 3 
 
 Rau, K. H., 102 
 Rauchberg, 35 
 Reformation, 34 ff. 
 Revisionism, v, xi, 292 
 Revolution — French, 152 ff., 
 160 ff. 
 
 French, February, 208 ff. 
 
 German, 172 ff., 184 
 
 Industrial, 78, 99 ff., iii 
 
 Permanent, 193 
 
 Social, X, 22, 232 ff., 250 f . 
 
 Philosophy of, 184 ff., 
 
 245 
 
 methods of . . . 193 ff,, 
 
 245 f. 
 Paris Commune, 247 
 
 Revolutionary illusions ad- 
 mitted, 253 
 
 Revolutionary terrorism, 195 
 
 Ricardo, no, 255, 264, 279 
 
 Richter, 130 
 
 Rodbertus, 230, 265 
 
 Rollin, Ledru, 211 
 
 Rucherath, J., 40 
 
 Ruge, A., 182, 183 
 
 Ruskin, 3 
 
 St. Augustine, 39 
 St. Just, 154 
 Saint-Simon, 152 
 St. Thomas, 39 
 Sanial, 240 
 Schanz, ^2 
 Schapiro, 171 
 Schiller, 162 
 Schippel, 68 
 
298 
 
 INDEX 
 
 Schonlank, 62, 126 
 
 Schultze-Gaevernitz, 47, 100 f. 
 
 Schwedler, 131 
 
 Scientific socialism, vi, vii, xi, 
 6, II, 13 ff., 39 
 
 Scotus Erigena, 39 
 
 Seligman, E. R. A., i, 30-31, 
 43, 50-51, 67 
 
 Senior, N., 108, 112, 123, 281 
 
 Shaw, Bernard, 8 
 
 Simkhovitch, xv, 169, 202, 203, 
 244 
 
 Simons, 164 
 
 Sismondi, S. de, 113, i49, 227 
 
 Slavery as an economic neces- 
 sity, 280 f . 
 
 Smith, Monroe, xv, 176 
 
 Smith, E. J., 54 
 
 Social justice, xi, 3, 8, 9 ff., 50, 
 184, 278 ff. 
 
 Social revolution, vi f., 15, 23, 
 228, 241 ff., 293 
 
 Solidarity of classes, 199 ff., 212 
 
 Solncev, 132-3 
 
 Sombart, i, 11, 56, 79, 83, 236 
 
 Sorel, 293 
 
 Sorge, 64 
 
 Spargo, 243 
 
 Spinoza, 29, 175, 199 
 
 Stammler, i, 31, 252 
 
 Standard of living, past, 74 ff., 
 loi ff. 
 present, 131 ff. 
 
 Stein, L. v., 174 ff. 
 
 Stirling, 106 
 
 Stone, N. S., 15 
 
 Struve, P. v., 127, 178, 252, 291 
 
 Sumner, 142-4 
 
 Surplus value, 262 ff. 
 
 Syndicalism, v, xi, 292 
 
 Szeliga, 278 
 
 Tcherkesoff, W., 148, 149 
 Ten-hour bill, 281 
 Theory of population, iioff. 
 Theory of value, 2 ff., 254 ff., 
 
 278 
 Theory of wages, 99-100, iii- 
 
 19, 275-6 
 Thompson, W., 3, 202 
 Townsend, J., 107 
 Trade unionism in America, 
 
 221 ff. 
 Trusts, 22, 53 ff. 
 Tugan-Baranowsky, 203, 236, 
 
 239 
 
 Untermann, 252 
 
 Ure, A., 108, no, in f., 123 
 
 Utopian socialism, xi, 4, 8, 11 
 
 Vidal, 149 
 
 Von der Goltz, 130 
 
 Wage-fund theory, 103 ff. 
 Wagner, Adolph, 2, 87 
 Walling, 291 
 Ward, L. F., 188 
 Webb, 105-7, 136, 137 
 Weitling, 202, 247 
 Wernicke, J., 57 
 Wilde, Oscar, 43 
 Willich, 253 
 
 Woerishoffer, Carola, xv 
 Wolf, J., II f. 
 Wolff, J. W., loi 
 Woltman, 30 
 Wright, C. D., 141 ff. 
 
 Zablocki-Dessyatkovski, 80 
 
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