Online Library of Liberty: Economics, vol. 2: Modern Economic Problems

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CHAPTER 35

SOCIALISM, PRESENT AND FUTURE

§1. Meanings of socialism. § 2. Philosophic socialism. § 3. Socialism in action. § 4. Origin of the radical socialist party. § 5. The two pillars of “scientific” socialism. § 6. Aspects of the materialistic philosophy of history. § 7. Utopian nature of “scientific” socialism. § 8. Its unreal and negative character. § 9. Revisionism in the Marxian ranks. § 10. Socialism and anarchism. § 11. Syndicalism and I. W. W. § 12. Guild socialism. § 13. Opportunism in socialist party tactics. § 14. Alluring claims of party socialism. § 15. Changes in the socialist party vote. § 16. Economic legislation and the political parties.

§1. Meanings of socialism. Our reason for leaving to the last the discussion of authority as a method of distribution is not that it appeared last in historical development, but that it now is the most strongly advocated as an alternative of competition. In primitive, in ancient and in medieval societies, authority as a method of distribution was used much more than it now is, and the history of Europe from about the eleventh century is filled with the record of the displacement of authority and status by competition. But one of the most striking developments of opinion in the nineteenth century was that favoring an increasing use of authority in distribution. Authority has been advocated not merely to supplement and modify competition, but to displace it completely or, in the more moderate program, in large part.

This opinion, or plan, has appeared under a variety of names, the main ones being communism, collectivism, socialdemocracy, and socialism, of which the last name has just now the greatest vogue. Socialism is a word of manifold meanings no one of which is generally accepted. Discussion is therefore often a Babel of tongues. Much of the confusion may be cleared up by observing that the word “socialism” designates

(1) a social1 philosophy (2) a mode of social action, (3) a particular political party. There is thus philosophic, active, and partizan socialism. Each of these may be taken either in an absolute or in a more or less relative sense. The first meaning is the most fundamental, the second less so, and the last the least fundamental, but just now the most frequently used.

§ 2. Philosophic socialism. As a philosophy socialism is related to social just as individualism is related to individual. Socialism is faith in the group motive and group action rather than in self-interest and competitive action. Instead of social philosophy we may say social faith, or social ideals. This faith may be absolute, or radical, to the rejection of all economic competition; or it may be moderate, and leave more or less place for self-interest and competition. Every man of conscience and of ideals has moods that are socialistic (in this sense) and dreams of a world without toil, competition, or poverty.

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This social philosophy has taken form as “Christian Socialism” among men of strong religious natures, in various religious denominations. Great secular dreamers—Plato in his “Republic,” Sir Thomas Moore, in his “Utopia,” Edward Bellamy, in “Looking Backward,” William Morris, in “News from Nowhere,” and others—have painted beautiful pictures of ideal economic states from which all of the great evils and problems of our society have been banished.

§ 3. Socialism in action. Active socialism is group action in economic affairs. This may be by private voluntary groups, as a club, church, or trade union, or by a public group, or political unit of government, which has therefore a compulsory character. The most radical kind of active socialism would be the ownership by government of all the means of production and the conduct of all business, assigning men, by authority, to particular work and granting them such incomes as the established authority thought they deserved. This kind exists nowhere, and never has existed, though it has been nearly approached in many parts of Russia under the Bolshevik régime.

A moderate kind of active socialism is represented by each separate case of public ownership or industry. Even public regulation by authority, of the many kinds described in this volume, is touched with a quality of active socialism. In this sense there can be more or less of active socialism in a community; a state may be more or less socialized in its economic aspects. An English Chancellor of the Exchequer declared in the last decade of the nineteenth century, “We are all socialists now.” The ever-increasing sphere of the state2 gives to that statement to-day a larger, fuller meaning than when it was uttered.

Socialism in action is of course always the expression of a more or less socialistic philosophy held either by a democratic majority of the people or by a despotic minority, as in Russia under the Czars and the Bolsheviki. Most of the great recent movement of socialism in industry is the expression not of a radical but of a moderate social philosophy. It does not look to the abolition, but only to the modification and limitation in some directions, of private property and of competitive industry. The spirit of this movement is opportunist, or experimental. It is ready to try public action, but recognizes that it has difficulties and limitations. The ultra-radical and the ultraconservative alike declare that these measures “logically” lead on to the complete destruction of private property. But men find that they can warm their hands without being “logically” compelled to thrust them into the fire, and that they can quench their thirst without a growing resolution to drink the well dry. When this governmental activity has proceeded somewhat extensively and systematically in cities, as in Great Britain, it is called municipal socialism; and in states, as in Germany before the World War, it is called state socialism.

§ 4. Origin of the radical socialist party. Socialism in the partizan sense is an actual political organization. Both in Europe and in America such organizations have been designated as “social-democratic,” “socialist labor,” or “labor” parties. Socialism in this sense of a party organization, or movement, is very different from a social philosophy. In its partizan phase socialism exhibits all of the baffling variability and elusiveness that it does in its other aspects. However, in its printed program, the

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socialist party sets forth both a socialist philosophy and an ideal of active socialism in their most radical forms.

Modern political socialism traces its origin directly to the most radical of German social philosophers, Marx, Engels, and Lassalle. Karl Marx (1818-1883), preëminently the philosophic leader of the movement, collaborating with his friend Friedrich Engels (1820-1895), sought to give a solider foundation of reason to the somewhat romantic socialist philosophy current in his day. His own doctrine, first set forth connectedly3 in the Communist Manifesto in 1847, and later developed in his chief book “Das Capital,” he called Communism. He deemed this to be, as it has been called by his followers, “scientific socialism.” “Scientific” was meant to emphasize the contrast with “Utopian” socialism, as Marx and Engels somewhat scornfully characterized alike the older communist philosophy, the romances of the ideal state, and the attempts to found and conduct small communistic societies.

§ 5. The two pillars of “scientific” socialism. Scientific communism was to be based upon two immovable pillars, the one economic, the other historical (or historicophilosophical). The one was the labor theory of value, by which Marx sought to show that all profits and incomes from investment were due virtually to robbery of the wage-workers.4 “Capital,” that is, the ownership of the means of production, was declared to be the instrument of this “exploitation.”

The other pillar was “the materialistic philosophy of history,” that is, the explanation of all the intellectual, cultural, and political changes of mankind from the side of the material economic conditions as causes. As Engels expressed it, “The pervading thought . . . that the economic production with the social organization of each historical epoch necessarily resulting therefrom forms the basis of the political and intellectual history of this epoch.” This doctrine denies that, in an equally valid sense, biological changes in brain, and cultural changes in science, arts, and education, cause the mechanical inventions and improved processes and thus alter the form of economic production.

§ 6. Aspects of the materialistic philosophy of history. Marx’s general philosophy of economic materialism had three minor propositions or doctrines. (a) The doctrine of increasing misery; capital in private hands results in the “exploitation” of the workers as explained by the economic theory of surplus value (labor theory of value); this causes and must cause the steadily increasing degradation of the masses. (b) The doctrine of the class conflict; all history is a record of the class struggle between those who have property, the ruling classes within the nations, and those who have not, the oppressed working class, (a conception of history blind to most of the great international conflicts). The class conflict was declared to be growing more sharply marked and bitter than ever before; “the entire human society more and more divides itself into two great hostile camps, into two great conflicting classes, bourgeoisie and proletariate.” (c) The catastrophic theory; the final and inevitable result of this misery and class conflict must be a revolution, when the downtrodden workers will throw off their chains and “expropriate the expropriators,” and institute the communistic order in place of capitalism.

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§ 7. Utopian nature of “scientific” socialism. The term “scientific” set in contrast with “utopian” was meant to imply that the doctrine of Marx was not “utopian” (a word that had come to mean fanciful and impracticable). Marx had a contempt for the romances of the ideal state and for what he deemed to be the unfounded speculations of earlier prophets of communism. But utopian (from utopia, Greek for no place) means nonexistent, and Marxian socialism surely was that. The words “experimental” or “actually at work” would have been a more logical contrast with “utopian” than is the word “scientific.” Marx and his followers likewise had a contempt for the communistic experiments, or settlements and colonies, which by the scores had been started and had failed, bringing discredit upon all communistic proposals. The beauty of “scientific” socialism for the purpose of discussion was that it never could be tried on a small scale, or tried at all until a whole nation adopted it; therefore, its adherents believed that no facts of history or of human nature could be used to disprove its workableness.

The old time “scientific” socialist had a lofty scorn for any less dogmatic philosophy than his own or for any less sweeping social change than that he expected. Moderate social reform to him was but temporizing; indeed, it was evil, inasmuch as it helped to postpone the inevitable, but in the end, beneficent catastrophe of the social revolution. A step-by-step movement toward socialism, state socialism,5 even of a pretty sweeping character, was, to the old-time Marxians, not really socialism at all. Some explanation of this attitude is found in the extremely limited manhood suffrage and in the aristocratic class government of most European countries, especially of Germany; so that, as the party socialists saw it, multiplying state enterprises but increased the power of the ruling, and eventually of the militarist, class. The social-democratic leaders felt that until they themselves were in power, the growth of “state socialism” would be a calamity for the nation. The events of 1914 may make our judgment tolerant toward their feeling.

§ 8. Its unreal and negative character. The so-called “scientific” socialism had, therefore, a peculiarly unscientific spirit; for, in a modern sense, science implies a patient search for truth, not a sudden revelation; a constant testing of opinions by observation and experiment, not a dogmatic conviction that refuses the test of reality. “Scientific” socialists talked much, and still talk much, of the “evolution” of social institutions; but they refused to admit the essential condition for institutional evolution, the competitive trial on a small scale, of a new form of economic organization to prove its fitness to survive. Indeed, communism had been tried on a small scale many times in the communistic societies, and had always failed in a brief time.

Lincoln said that a man’s legs ought to be long enough to reach to the ground; but “scientific” socialism was not built on that plan. To be sure it contained many elements of truth, but these were so distorted that the result was a caricature of history, of philosophy, of economics, and of prophecy. The most important influence of radical socialism has been exerted through negative criticism. It has performed the function of a party in opposition, relentlessly hunting out and pointing out the defects of existing institutions, arousing the smugly contented, and, by its very recklessness and bitterness, inspiring at times a wholesome fear of more revolutionary evils. This

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has been a real service to the cause of moderate and constructive reform in the more democratic countries of western Europe and in America.

§ 9. Revisionism in the Marxian ranks. “Marxism” or Marxian “scientific” socialism, from the time of its promulgation was studied by a small but increasing group of disciples as a well-nigh inspired and perfect revelation of economic truth. Das Kapital became known as the communist bible; zealous followers held it to be their duty to accept it, even where they could not understand it or reconcile it with the realities around them. The various doctrines composing the Marxian system were expressed in phrases ambiguous enough to permit much loose and shifting thought. But vigorous criticism forced upon the attention of the more frank and intellectual radicals, the need of more accurate and greatly modified conclusions. The labor theory of value which Marx had taken from English Ricardian economics was discredited by the critique of the psychological economists of Austria and America. The doctrine of increasing misery which first was taken to mean what is said, came to be explained not in an absolute sense, but in a relative sense (that the masses may be getting more wages, real as well as monetary, but they are not getting as much more as are the owners of capital). The doctrine of class conflict, it was admitted, had to be softened greatly to fit the facts of modern society. Doubt as to the inevitableness of the great catastrophe grew steadily. It cannot be questioned that Marx, when he first formulated his philosophy, believed that a revolution, most violent in nature, would occur within a few years. The revolutions of 1848 came, but with no such results as Marx predicted. Thereafter radical socialists played fast and loose with the word “revolution.” They made it mean a violent and bloody civil war with victory for the warlike minority, whenever they wished to rouse a proletarian audience. But in addressing bourgeois hearers they made revolution mean a slow evolution ending in peaceful victory at the polls by a majority of the nation, after many years of educational propaganda and of further industrial changes.

As socialist intellectual leaders began to be affected by the criticism originating outside of the ranks they lost some of their theoretical illusions, and began to temper their claims of Marx’s infallibility. “Revisionism,” the socialist higher criticism, beginning in 1899 with the work of Eduard Bernstein, a prominent German Socialdemocrat, gained influence in the party counsels in all countries in the years before 1914. This brought many of the Marxians much nearer to the more opportunist ideas and plans of the Fabian society, which had been founded in England in 1884, but which had been regarded scornfully by the adherents of “scientific socialism.”

§ 10. Socialism and anarchism. In these and other respects the socialist movement, while gaining in the total number of its adherents, was breaking up into various schools of thought. Ceaseless and often bitter controversy over matters of doctrine and of policy have divided the leaders and split the parties. Almost the only general agreement among them is on a negative point, hostility to the existing system of private capital. In respect to the forms of political and of industrial organization that are to take the place of the present order, communist ideas and plans differ widely. In the last quarter of the nineteenth century Marxian socialists were usually associated in popular thought with the bomb-throwing type of anarchists whose aim was to destroy all government and whose policy was that of terrorism and assassination of members

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of the ruling class. Usually the “scientific” socialists scornfully denounced this classification, declaring that socialism trusted to peaceful evolution, not to violence, that socialism put its hope in the triumph of democratic majorities, whereas anarchy hoped to win its ends through the violence of a minority. Socialism, they said, was primarily concerned with economic organization, and so far as it was concerned with government, looked toward a completer organization of the state for social purposes, whereas anarchy was essentially opposed to the state in any form. In truth, as we have observed above, some socialists conceived of class conflict as gradual evolution, while others conceived of it as bloody and not distant revolution. The rank and file of the socialists have been ready as a majority to “expropriate the expropriators” peacefully, if they could, and willing as a minority to do it violently if they must.

§ 11. Syndicalism and I. W. W. Among the various tendencies, or schools, within socialistic circles, two especially, syndicalism and guild socialism, have shown the marks of anarchistic influence. These both share the anarchistic dislike of strong central government, and cherish the ideal of self-governing independent communes. The model of the early anarchists was the simple Russian village community. Syndicalism in France originally meant trade unionism. The French syndicates (trade unions) which developed many years later than did the British unions, came under the influence both of Marxian socialism and of anarchism in the ’80’s and ’90’s, and developed a hybrid form of theory and of program. Syndicalism is anti-parliamentary and opposed to political action within the present capitalist states. It opposes militarism, and repudiates patriotism for any country. It favors the violent revolt of a minority whenever the workers are well organized enough to seize power. It favors the general strike as a means of wrecking society, not merely to win in immediate wage-controversies. Its most characteristic doctrine, detestable to all outside its ranks, is sabotage, which means any kind of vandalism, deceit and dishonesty which may inflict loss upon employers and capitalists and inspire their fears. Everything is permissible and laudable which would be done by a spy in modern war, for the syndicalist declares that a state of war exists. Yet he does not draw the corollary that every one with such a purpose and using such means should expect to be shot as an enemy spy. The syndicalist’s economic ideal of the future state is somewhat vague, but it is one of communism, in which the instruments of production in each trade would be controlled by the unionized workers. After a revolution attained by sabotage and bloodshed, men would dwell together peacefully without restraint of any government, ruled only by sweet reasonableness.

Syndicalism has been most influential in France and Italy among the less skilled workers, but in Europe appears to have lost of late somewhat both in its intellectual and in its popular following. In America it appears as the I. W. W. (International Workers of the World) in some cities, but chiefly among the migratory workers in mines, lumber camps, and agriculture in the Middle and Far West.

§ 12. Guild Socialism. A school of writers, known as Guild Socialists, which has attracted wide attention since the war, had its origin in England about 1907, and in 1915 founded the National Guilds League. Guild socialism resembles syndicalism (and philosophic anarchy) in its plan of the future state. Producers are to be organized in shops, or in groups, which are to be further federated in a national guild, the

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supreme council of producers. This plan suggests more of a unified state than does syndicalism, a sort of “dual sovereignty” of local producing guilds and central social organization. These ideas seem to be all in the realm of imagination (Utopian) but they were reflected somewhat in the widespread discussion after the war for “industrial democracy” as in the Plumb Plan for the ownership of railroads by the railroad workers. Unless and until groups of trade workers can demonstrate by experiment, at their own risk, that they can coöperatively carry on enterprises of some size with success, the rest of the nation, the great body of consumers, must look upon such proposals as unpractical. The Bolsheviki since the second revolution in Russia in 1917, have exemplified the syndicalist ideal of a ruling militant minority, and in the Soviets, or local governing bodies made up of organized workers, have shown some likeness to the guild ideal.

§ 13. “Opportunism” in socialist party tactics. While many winds of doctrine have been blowing over socialistic philosophy, the practical programs of the party have veered in various directions. Whenever the party gained any success at the polls, the socialists in public office and the party leaders found it necessary to “do something” immediately. The rank and file might be willing to talk of the millennium, but preferred to take it in instalments instead of waiting for it to come some centuries after they were dead. And so the socialist party, as fast as it gained any practical power, became “opportunist” and worked for moderate practical reforms. The leaders did this with many misgivings lest the masses might become so reconciled to the present order that they would refuse to rise in revolt. In that case the revolution never could happen (although it was inevitable).

As the party socialists did more to improve the present, they talked less of the distant future state. They ceased their criticisms of “mere temporizing” “bourgeois” reforms, and began to claim these as the achievements of the socialist party. They began to write of the remarkable growth of social legislation in Europe and America in the past half century under such titles as “socialism in practice” and “socialists at work.” This was despite the fact that these reforms were all brought about by governments in which the socialist party had no part whatever or was a well-nigh insignificant minority. This bald sophistry, or self-deception, was easily possible by confusing the word “socialist” as relating to the abstract principle of social action, with socialist as applied to their own party organization. It is as if the Republican party in the United States were to claim as its own all the works of the republican spirit and principles of government in the world from the party’s organization to the present time.

The German democratic revolution of November 1918, which drove the Kaiser into exile, brought the social-democrats into power as the dominant party in Germany. The more moderate element is in the majority and, in alliance in parliament with various liberal parties, has thus far been administering the affairs of the state along economic lines little different from those of the old order. No serious modification of private property has been made. The situation is far from clear as yet. We seem to see here again the sobering effect of responsibility, and the definite unwillingness of the German workingmen, with the example of Bolshevik ruin under their eyes at the East, to risk abolishing capitalism.

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§ 14. Alluring claims of party socialism. In becoming opportunist, the radical socialist party in every country has been somewhat put to it to retain any clear distinction between itself and other parties of social reform. It has done this however by continuing to proclaim the ultimate desirability of re-organizing all society without leaving any productive wealth in private hands; while in practice it has shown misgivings prompted by the experience of the world. Its case against the present order continues to be far the strongest in its negative aspect, the exposure of evils. To many natures the claims of the socialist party have all the allurements of patent medicine advertisements. These describe the symptoms so exactly and promise so positively to cure the disease, that they are irresistible, especially when the regular physicians keep insisting that the only way to get well is to adopt such troublesome and disagreeable methods as taking baths and exercise, and stopping the use of whiskey and tobacco.

Those attracted to the socialist party by its sweeping claims are of two main types. The one is the low-paid industrial wage-worker to whom competition awards so small a share of the national income; the other is the sympathetic person of education or of wealth (or of both), who has become suddenly aroused to the misery in our industrial order. To both of these types, feeling intensely on the subject, the socialist party appeals as the only one with promises sweeping enough to be attractive. The one becomes the proletarian, workshop socialist, the other the intellectual, parlor socialist. Many of the latter type are persons overburdened either with unearned wealth or with an undigested education. Many of them, having enjoyed for a time the interesting experience of radical thought and of bohemianism, come later to more moderate social opinions.

§ 15. Changes in the socialist party vote. The socialist vote in Europe and in the United States had been steadily growing in the forty years preceding the outbreak of the World War, and amounted in the aggregate at least to six and possibly to ten millions (as variously estimated, the name socialist being elastic). There were 3,000,000 social-democratic voters in Germany at the outbreak of the war, and the socialist party in the United States polled 900,000 votes in the presidential election of 1912. The socialist parties were made up of men of many shades of opinion. They included not only the radicals, but large numbers of the discontented, unable to find an alternative economic philosophy and a plan that inspired their hopes. They included many others who held only the mildest sort of socialistic philosophy. In America many men voted the socialist ticket as a protest against the inaction of the conservative parties, and barely one-tenth regularly enrolled as members of the party. Similarly, in Germany before the war many voters supported the social-democratic party merely as the most effective way to protest against Militarism, Kaiserism, and undemocratic class government.

The war affected profoundly the policies and fortunes of partizan socialism. In accord with the doctrine of the class conflict, Marx had exclaimed, in the Communist Manifesto, “Proletarians of all lands, unite.” Marxian socialism condemned national patriotism and fostered in its place a spirit of internationalism. For years prominent Marxians had boldly announced that any attempt to bring on a European war would be blocked by a general strike declared by the socialist workers. But when German militarism precipitated war in 1914, only a feeble fraction of the German radical

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socialists stood out against it, and nearly all socialists in every country lined up with their fellow nationals. The immediate result was loss of prestige and of following for the socialist parties in the allied countries.

The American socialist party with an enrolled membership largely of immigrants, many of them still unnaturalized, was more unpatriotic and pro-German than were the socialists in any of the other allied countries. A number of its American members and of those born in allied countries left the American socialist party. The socialist vote for presidential electors fell to 590,000 in 1916, but rose again in 1920 to 900,000. In addition over a quarter of a million of votes were cast, mostly in the Northwest, for the Farmer-labor party, presenting a state-socialist program.

§ 16. Economic legislation and the political parties. These figures, while indicating no landslide to communism, do not forecast the disappearance of the radical socialist philosophy and of the socialist party. Both philosophy and party are based on the fact of great inequality in the distribution of wealth, on the growth of cities and the spread of the wage system, on resentment at the abuse of power and at many cases of individual injustice suffered by the poor at the hands of employers, and on the conviction that conditions cannot become better under the present régime. The masses now, for the first time in history, have the ballot without hereditary, class, or property limitations. The world is for the first time trying the experiment of full political democracy side by side with great private fortunes and great economic inequality. The democratic Samson may be blind, but he has the power to pull down the temple of capitalism in ruin upon our heads.

The future of partizan socialism depends on the policy of the other political parties quite as much as it does on its own policy. The floating liberal vote with socialistic sympathies is now so large that it is eagerly sought by candidates of the other parties. These independent voters care little for the radical and distant tenets of the socialist party leaders, who, to attract wider support, are forced to place increasing stress upon immediate and moderate reforms. On the other hand, men of larger qualities of leadership in the older parties are constantly adopting and advancing pending measures of social reform. Where this is not done the radical socialist party tends more quickly to develop into the one powerful party of protest and of popular aspiration, receiving support from many elements of the middle and small propertied classes and from non-radical wageworkers. This movement from both sides is leaving less noticeable the contrast between the socialist party and other parties claiming to be “progressive” or “forward looking.” The strongest allies of the more radical communistic faction of the socialist party are those members of the conservative parties who fail to recognize the need of humane legislation, who irritate by their unsympathetic utterances, and who unduly postpone by their powerful opposition the gradual and healthful unfolding of the social spirit, energy, and capacity of the nation. The greatest problem of social and economic legislation for the next generation is to determine how far, and how, the principle of authority may wisely be substituted for the principle of competition in distribution.

The many and varied forms of economic legislation described in the foregoing pages are so many experiments to find that better and that best adjustment of economic

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