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The Socialist Library. VII. 
 
The Socialist Library.— VII. 
 
 Edited by J. Ramsay MacDonald, M.P. 
 
 EVOLUTIONARY 
 SOCIALISM : 
 
 A CRITICISM AND AFFIRMATION. 
 
 (Die Voraussetzttttgen des Sozialismus und die Aufgaben 
 der Sozialdemokratie.) 
 
 BY 
 
 Edward Bernstein. 
 
 TRANSLATED BY EDITH C. HARVEY. 
 
 "And for that leason was the 
 Ten Hours' Bill not only a great 
 practical success, it was a victory 
 of a principle." 
 
 Karl Marx. 
 Inaugural Address to the 
 International. 
 
 NEW YORK 
 
 B. W. HUEBSCH 
 
 1909. 
 
CONTENTS 
 
 Chapter Page 
 
 Preface ix 
 
 Extracts from Preface to last German 
 Edition - - - xix 
 
 Preface to English Edition - - xxi 
 
 I. The Fundamental Doctrines of Marxist 
 
 Socialism i 
 
 (a) The Scientific Elements of Marxism i 
 
 (6) The Materialist Interpretation of History 
 and Historic Necessity - 6 
 
 (c) The Marxist Doctrine of Class War and 
 
 of the Evolution of Capital i8 
 
 The Economic Development of Modern 
 
 Society - 28 
 
 (o) On the Meaning of the Marxist Theory 
 of Value - - - 28 
 
 (b) The Distribution of Wealth in the Modern 
 
 Community 40 
 
 (c) The Classes of Enterprises in the Produc- 
 tion and Distribution of Wealth 54 
 
 (d) Crises and Possibilities of Adjustment in 
 
 Modem Economy ... y^ 
 
 111. The Tasks and Possibilities of Social 
 
 Democracy 95 
 
 (a) The Political and Economic Preliminary 
 
 Conditions of Socialism - 95 
 
 (6) The Economic Capacities of Co-operative 
 Associations - - 109 
 
 (c) Democracy and Socialism - i35 
 
 Id) The Most Pressing Problems of Social 
 Democracy - 165 
 
 Conclusion : Ultimate Aim and Tendency — 
 
 Kant against Cant - 200 
 
PREFACE. 
 
 The present work is substantially devoted to 
 the establishment of ideas which the writer un- 
 folded in a letter to the German Social Demo- 
 cratic Party assembled at Stuttgart from 
 October 3rd to October 8th, 1898. 
 
 This letter reads : — 
 
 The views laid down by me in the series 
 Problems of Socialism have lately been dis- 
 cussed in Socialist papers and meetings, and a 
 request has been made that the Party of Ger- 
 man Social Democrats should state its position 
 in regard to them. In case this happens and 
 the Party agrees to the request, I am induced 
 to make the following explanation. 
 
 The vote of an assembly, however signifi- 
 cant it may be, naturally cannot disconcert me 
 in my views, which have been gained from an 
 examination of social phenomena. What I 
 wrote in the Neue Zeit is the expression of a 
 conviction from which I do not find myself 
 induced to depart in any important particular. 
 
 But it is just as natural that a vote of the 
 party should find me anything but indifferent. 
 And, therefor-ei it will be understood if I feel 
 the paramount necessity of guarding myself 
 against misconstruction of my conclusions and 
 false deductions from them. As I am prevented 
 from attending the Congress I send this written 
 communication. 
 
lit has been maintained in a certain quarter 
 that the practical deductions from my treatises 
 would be the abandonment of the conquest of 
 political power by the proletariat organised 
 politically and economically. That is quite an 
 arbitrary deduction, the accuracy of which I 
 altogether deny.) 
 
 (l set myself against the notion that we have 
 to expect shortly a collapse of the bourgeois 
 economy, and that social democracy should be 
 induced by the prospect of such an imminent, 
 great, social catastrophe to adapt its tactics 
 to that assumption. That I maintain most 
 emphatically) 
 
 The adherents of this theory of a catastrophe, 
 base it especially on the conclusions of the 
 Communist Manifesto. This is a mistake in 
 every respect. 
 
 The theory which the Communist Manifesto 
 sets forth of the evolution of modern society 
 was correct as far as it characterised the general 
 tendencies of that evolution. But it was mis- 
 taken in several special deductions, above all in 
 the estimate of the time the evolution would 
 take. The last has been unreservedly ackiiow- 
 ledged by Friedrich Engels, the joint author 
 with Marx of the Manifesto, in his preface to 
 the Class War in France. ButQt is evident that 
 if social evolution takes a much greater period 
 of time than was assumed, it must also take 
 upon itself forms and lead to forms that were 
 not foreseen and could not be foreseen then) 
 
 Social conditions have not developed to such 
 an acute opposition of things and classes as is 
 
depicted in the Manifesto. It is not only useless, 
 it is the greatest folly to attempt to conceal this 
 from ourselves. The number of members of 
 the possessing classes is to-day not smaller but 
 larger. The enormous increase of social wealth 
 is not accompanied by 'a decreasing number of 
 large capitalists but by an increasing number 
 of capitalists of all degrees'. The middle classes 
 change their character but they do not dis- 
 appear from the social scale. 
 
 The concentration in productive industry is 
 not being accomplished even to day in all its 
 departments with equal thoroughness and at an 
 equal rate. In a great many branches of pro- 
 duction it certainly justifies the forecasts of the 
 socialist critic of society ; but in other branches 
 it lags even to-day behind them. The process 
 of concentration in agriculture proceeds still 
 more slowly. Trade statistics show an extra- 
 ordinarily elaborated graduation of enterprises 
 in regard to size. No rung of the ladder is dis- 
 appearing from it. The significant changes in 
 the inner structure of these enterprises and their 
 inter-relationship cannot do away with this fact. 
 
 In all advanced countries we see the privi- 
 leges of the capitalist bourgeoisie yielding step 
 by step to democratic organisations. Under the 
 influence of this, and driven by the movement 
 of the working classes which is daily becoming 
 stronger, a social reaction has set in against the 
 exploiting tendencies of capital, a counteraction 
 which, although it still proceeds timidly and 
 feebly, yet does exist, and is always drawing 
 more departments of economic life under its 
 
influence. Factory legislation, the democratis- 
 ing of local government, and the extension of 
 its area of work, the freeing of trade unions 
 and systems of co-operative trading from legal 
 restrictions, the consideration of standard con- 
 ditions of labour in the work undertaken by 
 public authorities — all these characterise this 
 phase of the evolution. 
 
 But (the more the political organisations of 
 modern nations are democratised the more the 
 needs and opportunities of great political 
 catastrophes are diminished.) He who holds 
 firmly to the catastrophic theory of evolution 
 must, with all his power, withstand and hinder 
 the evolution described above, which, indeed, 
 the logical defenders of that theory formerly 
 did- But is the conquest of political power by 
 the proletariat simply to be by a political catas- 
 trophe? Is it to be the appropriation and 
 utilisation of the power of the State by the 
 proletariat exclusively against the whole non- 
 proletarian world? 
 
 He who replies in the affirmative must be 
 reminded of two things. In 1872 Marx and 
 Engels announced in the preface to the new 
 edition of the Communist Manifesto that the 
 Paris Commune had exhibited a proof that "the 
 working classes cannot simply take possession 
 of the ready-made State machine and set it in 
 motion for their own aims." And in 1895 
 Friedrich Eng-els stated in detail in the preface 
 to War of the Classes that the time of political 
 surprises, of the "revolutions of small conscious 
 minorities at the head of unconscious masses" 
 
was to-day at an end, that a collision on a large 
 scale with the military would be the means of 
 checking the steady growth of social democracy 
 and of even throwing it back for a time — in 
 short, that social democracy would flourish far 
 better by lawful than by unlawful means and by 
 violent revolution. And^e points out in con- 
 formity with this opinion that the next task of 
 the party should be "to work for an uninter- 
 rupted increase of its votes " or to carry on a 
 slow propaganda of parliamentary activity^ 
 
 Thus Engels, who, nevertheless, as his 
 numerical examples show, still somewhat over- 
 estimated the rate of process of the evolution ! 
 Shall we be told that he abandoned the conquest 
 of political power by the working classes, be- 
 cause he wished to avoid the steady growth of 
 social democracy secured by lawful means being 
 interrupted by a political revolution ? 
 
 If not, and if one subscribes to his conclu- 
 sions, one cannot reasonably take any offence 
 if it is declared that for a long time yet the task 
 of social democracy is, instead of speculating 
 on a great economic crash, "to organise the 
 working classes politically and develop them as 
 a democracy and to fight for all reforms in the 
 State which are adapted to raise the working 
 classes and transform the State in the direction 
 of democracy." 
 
 That is what I have said in my impugned 
 article and what I still maintain in its full 
 import. As far as concerns the question pro- 
 pounded above it is equivalent to Engel's 
 dictum, for democracy is, at any given time, 
 
as much government by the working classes as 
 these are capable of practising according to 
 their intellectual ripeness and the degree of 
 social development they have attained. Engels, 
 indeed, refers at the place just mentioned to 
 the fact that the Communist Manifesto has 
 " proclaimed the conquest of the democracy 
 as one of the first and important tasks of the 
 fighting proletariat." 
 
 In short, Engels is so thoroughly convinced 
 that the tactics based on the presumption of a 
 catastrophe have had their day, that he even 
 considers a revision of them necessary in the 
 Latin countries where tradition is much more 
 favourable to them than in Germany. ' ' If the 
 conditions of war between nations have altered, " 
 he writes, " no less have those for the war 
 between classes." Has this already been 
 forgotten ? 
 
 y^No one has questioned the necessity for the 
 [working classes to gain the control of govern- 
 ment. The point at issue is between the theory 
 ^of a social cataclysm and the question whether 
 with the given social development in Germany 
 and the present advanced state of its working 
 classes in the towns and the country, a sudden 
 catastrophe would be desirable in the interest 
 of the social democracy. I have denied it and 
 deny it again, because in my judgment a greater 
 security for lasting success lies in a steady 
 advance than in the possibilities offered by a 
 catastrophic crash. 
 
 CAnd as I am firmly convinced that important 
 periods in the development of nations cannot 
 
be leapt ove'^ I lay the greatest value on the 
 next tasks of social democracy, on the struggle 
 for the political rights of the working man, on 
 the political activity of working men in town 
 and country for the interests of their class, as 
 well as on the work of the industrial organisa- 
 tion of the workers. 
 
 In this sense I wrote the sentence that the 
 movement means everything for me and that 
 what is usually called "the final aim of socialism" 
 is nothing ; and in this sense I write it down again 
 to-day. Even if the word "usually" had not 
 shown that the proposition was only to be 
 understood conditionally, it was obvious that it 
 could not express indifference concerning the 
 final carrying out of socialist principles, but 
 only indifference — or, as it would be better ex- 
 pressed, carelessness — as 'to the form of the 
 final arrangement of things. I have at no time 
 had an excessive interest in the future, beyond 
 general principles ; I have not been able to read 
 to the end any picture of the future. My 
 thoughts and efforts are concerned with the 
 duties of the present and the nearest future, 
 and I only busy myself with the perspectives 
 beyond so far as they give me a line of conduct 
 •for suitable action now. 
 
 The conquest of political power by the work- 
 ing classes, the expropriation of capitalists, are 
 no ends in themselves but only means for the 
 accomplishment of certain aims and endeavours. 
 As such they are demands in the programme of 
 social democracy and are not attacked by me. 
 Nothing can be said beforehand as to the 
 
circumstances of their accomplishment ; we can 
 only fight for their realisation. ButCthe con- 
 quest of political power necessitates the posses- 
 sion of political rights ; and the most important 
 problem of tactics which German social 
 democracy has at the present time to solve, 
 appears to me to be to devise the best ways 
 for the extension of the political and economic 
 rights of the German working classes) 
 
 The following work has been composed in the 
 sense of these conclusions. 
 
 I am fully conscious that it differs in several 
 important points from the ideas to be found in 
 the theory of Karl Marx and Engels — ^men 
 whose writings have exercised the greatest 
 influence on my socialist line of thought, and 
 one of whom — Engels — ^honoured me with his 
 personal friendship not only till his death but 
 who showed beyond the grave, in his testa- 
 mentary arrangements, a proof of his confidence 
 in me. 
 
 This deviation in the manner of looking at 
 things certainly is not of recent date; it is the 
 product of an inner struggle of years and I 
 hold in my hand a proof that this was no secret 
 to Friedrich Engels, and moreover I must guard 
 Engels from the suspicion that he was so 
 narrow-minded as to exact from his friends an 
 unconditional adherence to his views. Never- 
 theless, it will be understood from the foregoing 
 why I have till now avoided as much as possible 
 giving to my deviating points of view the form 
 
of a systematic and detailed criticism of the 
 Marx-Engels doctrine. This could the more 
 easily be avoided up till now because as regards 
 the practical questions with which we were 
 concerned Marx and Engels in the course of 
 time considerably modified their views. 
 
 All that is now altered. I have now a con- 
 troversy with socialists who, like me, have 
 sprung from the Marx-Engels school ; an<ri am 
 obliged, if I am to maintain my opinions, to 
 show them the points where the Marx-Engels 
 theory appears to me especially mistaken or to 
 be self-contradictoryj 
 
 I have not shirked this task, but, owing to 
 the personal grounds already mentioned, it has 
 not been easy to me. I acknowledge this 
 openly so that the reader may not deduce 
 uncertainty in the subject matter from the hesi- 
 tating, clumsy form of the first chapters. I 
 stand by what I have written with firm con- 
 viction; but I have not always succeeded in 
 choosing the form and the arguments by means 
 of which my thoughts would have gained the 
 clearest expression. In this respect my work 
 is far behind many a work published by others 
 on the same subject. I have rectified in the last 
 chapter some omissions in the first chapters. 
 Further, as the publication of the work was 
 somewhat delayed, the chapter on "Co-opera- 
 tion" has undergone some additions in which 
 repetitions could not wholly be avoided. 
 
 For the rest, the work may speak for itself. 
 I am not so ingenuous as to expect that it will 
 forthwith convert those who have disagreed 
 
with my previous essays, nor am I foolish 
 enough to wish that those who agree with me 
 in principle should subscribe to everything I 
 have said in it. In fact, the most doubtful side 
 of the work is that it embraces too much. When 
 I came to speak of the tasks of the present time 
 I was obliged, unless I wished to flounder into 
 generalities, to enter on all kinds of isolated 
 questions over which differences of opinion are . 
 unavoidable even among those who otherwise 
 think alike. And yet the want of space com- 
 pelled me to lay stress on some principal points 
 by implication rather than by establishing them. 
 But I repeat I am not concerned that others 
 should agree with me in every single question. 
 That which concerns me, that which forms the 
 (chief aim of this work, is, by opposing what is 
 left of the Utopian mode of thought in the 
 socialist theory, to strengthen equally the 
 realistic and the idealistic element in the socialist 
 movement.) 
 
 Ed. BERNSTEm. 
 
 London, January, 1899. 
 
EXTRACTS FROM THE PREFACE TO 
 THE LAST GERMAN EDITION. 
 
 The Voraussetzungen des Socialismus has 
 appeared in German as well as in French and 
 Russian — ^the last in three editions, namely, one 
 in London, one in Moscow, and one in St. 
 Petersburg. Translations into Czech and 
 Spanish are in preparation I am told. The 
 French translation has been produced with my 
 consent and has been provided with a special 
 preface from me; on the other hand complete 
 - Russian editions have been brought out without 
 my knowledge. This is sufficiently explicable 
 in the Moscow and St. Petersburg editions, and 
 so are certain " scientific " paraphrases of the 
 text. It seems to me less comprehensible that 
 the editors of the third edition published in 
 London by the Russian Free Press Fund did 
 not arrange before the completion of the 
 translation to find the author who was living 
 in the same town, to place him in a position to 
 carry out any necessary corrections, omissions, 
 or additions, as well as to obtain his permission 
 for those omissions which they themselves 
 found it well to make. As this did not happen 
 I am driven to the necessity of declaring that 
 I can take just as little responsibility for the 
 London edition as for the other two. 
 
 Ed. Bernstein. 
 Berlin. 
 
 End of January, 1902. 
 
PREFACE TO ENGLISH EDITION. 
 
 The present book has not only had its history, 
 it has also in some way made a little history. 
 Called forth by the circumstances described in 
 the preface to the German edition, it created 
 at its appearance a fair stir inside and outside 
 German social democracy. Opponents of 
 socialism declared it to be the most crushing 
 testimony of the unsoundness of the socialist 
 theory and criticism of capitalist society and 
 socialist writers. First of all Karl Kautsky 
 denounced it as an abandonment of the funda- 
 mental principles and conception of scientific 
 socialism. Induced by all this the German 
 social democratic party put the book on the 
 agenda of its Hanover Congress (October, 
 1899), where it was discussed in a debate that 
 lasted three days and a half and ended with the 
 acceptance of a resolution that was meant to 
 be a rejection of the views put forward by the 
 author. 
 
 I could not at that time take part in the 
 debate. For political reasons I had to stay 
 away from German territory. But I declared 
 then that I regarded the excitement of my 
 comrades over the book as the outcome of a 
 state of nervous irritation created by the 
 deductions the opponents of socialism drew 
 from some of its sentences, and by an over- 
 estimation of the importance to socialism of 
 
the tenets fought by me. But I could with- 
 draw nothing, and although ten years have 
 lapsed since, and I have now had seven years' 
 most intimate knowledge of German political 
 and economical conditions, I cannot yield on 
 any material point. Subsequently the views 
 put forward in the book have received the 
 bye-name of Revisionism, and although some 
 of those who are called Revisionists in 
 German social democracy hold on several 
 points views different from mine, the book can, 
 all in all, be regarded as an exposition of the 
 theoretical and political tendencies of the 
 German social democratic revisionists. It is 
 widely read in Germany; only some weeks 
 ago a new — the ninth — edition of it has been 
 published. 
 
 For reasons explained in the preface to the 
 first German edition the book is occasionally 
 written in a rather hesitating way. But its 
 principal aim will appear, I think, clear enough. 
 It is the strong accentuation of what in 
 Germany is called the Gegenwartrarbeit — ^the 
 every-day work of the socialist party — ^that 
 work in the furrows of the field which by many 
 is regarded as mere stop-gap work compared 
 with the great coming upheaval, and of which 
 much has been done cpnsequently in a half- 
 hearted way only. TUnable to believe in 
 finalities at all, I cannot believe in a final aim 
 of socialism. But I strongly believe in the 
 socialist movement, in the march forward of 
 the working classes, who step by step must 
 work out their emancipation by changing 
 
society from the domain of a commercial land- 
 holding oligarchy to a real democracy^ which 
 in all its departments is guided by the interests 
 of those who work and create. 
 
 Ed. Bernstein. 
 Berlin W. 30, March 21st, 1909. 
 
EVOLUTIONARY 
 SOCIALISM. 
 
 Chapter I. 
 
 THE FUNDAMENTAL DOCTRINES OF MARXIST 
 SOCIALISM. 
 
 (a) The Scientific Elements of Marxism. 
 
 ' ' With them Socialism became a science 
 which has now to be worked out in all its 
 details and connections." — Engels : Herr 
 Eugen Diihring's Revolution in Science. 
 
 German Social Democracy acknowledges 
 to-day as the theoretical foundation of its 
 activity the theory of society worked out by 
 Marx and Engels and called by them scientific 
 socialism. That is to say, that whilst Social 
 Democracy, as a fighting party, supports 
 certain interests and tendencies, it strives for 
 aims set up by itself. In the designation of 
 those aims it follows closely the methods of a 
 science which is capable of an objective proof 
 based only on an experience and logic to which 
 it conforms. For what is not capable of such 
 proof is no longer science but rests on subjective 
 impulses, on mere desire or opinion. 
 
In all sciences a distinction can be drawn 
 between a pure and an applied science. The 
 first consists of principles and of a knowledge, 
 which are deri\ied from the whole series of 
 corresponding experiences and therefore looked 
 upon as universally valid. They form the 
 element of stability in the theory. From the 
 application of these principles to single 
 phenomena or to particular cases of practical 
 experience, is formed an applied science; the 
 knowledge won from this application put to- 
 gether in propositions forms the principles of 
 the applied science. These form the variable 
 element in the structure of a science. 
 
 The terms constant and variable are only to 
 be taken here conditionally. For the principles 
 of pure science are also subject to changes 
 which, however, occur in the form of limita- 
 tions. With advancing knowledge, proposi- 
 tions to which formerly absolute validity was 
 attached are recognised as conditional and are 
 supplemented by new scientific propositions 
 which limit that validity, but which, at the same 
 time, extend the domain of pure science. On 
 the other hand single propositions of the applied 
 science retain their validity for defined cases. 
 A proposition in agricultural chemistry or 
 electrical engineering in so far as it has been 
 tested at all, always remains true as soon as the 
 preliminary conditions on which it rests are 
 restored. But the great number of the elements 
 of these premises and their manifold possibili- 
 ties of combination cause an infinite variety of 
 such propositions and a constant shifting of 
 
their importance in relation to one another. 
 Practice creates ever new materials of know- 
 ledge, and every day changes, so to say, its 
 aspect as a whole, continually placing under 
 the heading of outworn methods what was once 
 a new acquisition. 
 
 A systematic stripping of its^ applied parts 
 from the pure science of Marxist socialism has 
 not hitherto been attempted, although impor- 
 tant preparations for it are not wanting. 
 Marx's well-known presentation of his concep- 
 tion of history in the jTrgfgfP oL4-Capf.rift"^tP" 
 to the Criticism of Political Economy and the 
 third part of Fr. 'En ^p^^'^!T>r Tdtism^Jtopian 
 and Scientific s hould be named here in the first 
 place as being of the greatest importance. In 
 the preface just mentioned Marx presents the 
 general features of his philosophy of history 
 and society in such concise and decisive sen- 
 tences, so free from all reference to special 
 phenomena and special forms, as has never been 
 found elsewhere with equal clearness. No 
 important thought concerning the Marxist 
 philosophy of history is wanting there. 
 
 Engels' writing is partly a more popular 
 drafting of Marx's propositions, partly an 
 extension of them. Reference is made to special 
 phenomena of social evolution, such as modern 
 society, characterised by Marx as bourgeois 
 society, and its further path of development is 
 sketched out in more detail so that one, as 
 regards many passages, can apply the term of 
 applied science to it. Single details can be passed 
 over without the fundamental thoughts suffering 
 
any damage. But in its principal propositions 
 the presentation is still sufficiently general to be 
 claimed for the pure science of Marxism. This is 
 warranted and required by the fact that Marxism 
 claims to be more than an abstract theory of 
 history. It claims at the same time to be a 
 theory of modern society and its development. 
 If one wishes to discriminate very strictly, one 
 could describe this part of the Marxist theory 
 as an applied doctrine, but it is a thoroughly 
 essential application of the Marxist theory with- 
 out which it would lose nearly all significance 
 as a political science. Therefore the general or 
 chief propositions of these deductions regarding 
 modern society must be ascribed to the pure 
 doctrine of Marxism. If the present order of 
 society resting legally on private property and 
 free competition is a special case in the history 
 of humanity, it is at the same time a general 
 and lasting fact in the present civilised world. 
 Everything in the Marxist characterisation of 
 bourgeois society and its evolution which is 
 unconditioned — that is, everything whose 
 validity is free from national and local pecu- 
 liarities — would accordingly belong to the 
 domain of pure science; but everything that 
 refers to temporary and local special phenomena 
 and conjectures, all special forms of develop- 
 ment, would on the other hand belong to applied 
 science. 
 
 CWhen we separate the fabric of the Marxist 
 doctrine in the manner above named we are 
 able to estimate the import of its separate 
 propositions to the whole system. With every 
 
proposition of the pure science a portion of the 
 foundation would be torn away and a great part 
 of the whole building would be robbed of its 
 support and fall down. But it is otherwise with 
 the propositions of the applied science. These 
 could fall without shaking the foundations in 
 the least. A whole series of propositions in 
 the applied science could fall without dragging 
 down the other parts in sympathy.) 
 
 Such a systematic division into the finer 
 details lies, however, beyond the plan of this 
 work, as it is not intended to be an exhaustive 
 presentation and criticism of the Marxist philo- 
 sophy. It suffices for my purpose to denote as 
 the chief parts of what in my opinion is the 
 building of the pure science of Marxism, the 
 programme already mentioned of historical 
 materialism, the theory (the germ of which is 
 already contained therein) of the wars of the 
 classes in general and the class war between 
 bourgeoisie and proletariat in particular, as 
 well as the theory of surplus value with that 
 of the method of production in a bourgeois 
 society and the description of the tendencies 
 of the development of this society. Like the 
 propositions of the applied science, those of 
 the pure science are of different values to the 
 system. 
 
 No one will deny that the most important 
 element in the foundation of Marxism, the 
 fundamental law so to say which penetrates 
 the whole system, is its specific philosophy of 
 history which bears the name »f th^ m^tprialic^ 
 interpretation of history . With it Marxism 
 
stands nr falls in principle; according to the 
 measure in which it suffers limitations will the 
 position of the other elements towards one 
 another be affected in sympathy. 
 
 Every search into its validity must, therefore, 
 start from the question whether or how far this 
 theory is true. 
 
 (b) The Materialist Interpretation of History 
 and Historic Necessity. 
 
 " We had to emphasise face to face with 
 our opponents the chief principle (the econo- 
 mic side) denied by them, and there was not 
 always time, place, and opportunity to do 
 justice to the other considerations concerned 
 in and affected by it." — Friedrich Engels : 
 Letter of i8go reprinted in the Sosialistischen 
 Akademiker, October, 1895. 
 
 The question of the correctness of the 
 materialist interpretation of history is the 
 question of the determining causes of historic 
 necessity. To be a materialist means first of all 
 to trace back all phenomena to the necessary 
 movements of matter. These movements of 
 matter are accomplished according to the 
 materialist doctrine from beginning to end as a 
 mechanical process, each individual process 
 being the necessary result of preceding 
 mechanical facts. Mechanical facts determine, 
 in the last resort, all occurrences, even those 
 which appear to be caused by ideas. It is, 
 finally, always the movement of matter which 
 determines the form of ideas and the directions 
 
of the will ; and thus these also (and with them 
 everything that happens in the world of 
 humanity) are inevitable. The mat erialisL Js 
 thus a C alvinist withflnLGod. If he does not 
 believe in a predestination ordained by a 
 divinity, yet he believes and must believe that 
 starting from any chosen point of time all 
 further events are, through the whole of exist- 
 ing matter and the directions of force in its 
 parts, determined beforehand. 
 
 tThe application of materialism to the 
 interpretation of history means then, first of 
 all, belief in the inevitableness of all historical 
 events and developments.) The question is only, 
 in what manner the inevitable is accomplished 
 in human history, what element of force 
 or what factors of force speak the decisive 
 word, what is the relation of the different 
 factors of force to one another, what part in 
 history falls to the share of nature, of political 
 economy, of legal organisations, of ideas. 
 
 Marx, in the already quoted passagei gives 
 the answer, that he designates as the determin- 
 ing factor, the material productive forces and 
 the conditions of production among men at the 
 time. ' ' The method of production of the 
 material things of life settles generally the 
 [social, political, and spiritual process of life. 
 It is not the consciousness of men that deter- 
 
 (lines their mode of existence, but on the 
 lontrary their social existence that determines 
 
 the nature of] their consciousnes§| At a certain 
 
 (tage in their development the material pro- 
 luctive forces of society come into opposition 
 
with the existing conditions of production or, 
 which is only a legal expression for it, with 
 the relations of property within which they have 
 hitherto moved. From forms of development 
 of the forces of production, these relations 
 change into fetters. Then enters an epoch of 
 social revolution. With the change of the 
 economic foundation the whole gigantic super- 
 structure (the legal and political organisations 
 to which certain social forms of consciousness 
 correspond) is more slowly or more quickly 
 overthrown. One form of society never 
 perishes before all the productive forces are 
 evolved for which it is sufficiently comprehen- 
 sive, and new or higher conditions of production 
 never step on to the scene before the material 
 conditions of existence of the same have come 
 to light out of the womb of the old society. 
 The bourgeois relations of production are the 
 last antagonistic form of the social process of 
 production . . . but the productive forces 
 developing in the heart of the bourgeois society 
 create at the same time the material conditions 
 for the solution of this antagonism. The pre- 
 vious history of human society, therefore, ter- 
 minates with this form of society.* 
 
 It must first be observed by anticipation that 
 the concluding sentence and the word " last " 
 in the preceding sentence are not capable of 
 proof but are hypotheses more or less well 
 founded. But they are not essential to the 
 theory and even belong much more to the 
 
 * A Contribution to the Criticism of Political Economy. 
 Preface. 
 
applicaticms of it, and they may therefore be 
 passed over here. 
 
 If we look at the other sentences we are 
 struck, above all, by their dogmatic wording, 
 except the phrase the " more slowly or more 
 quickly " (which indeed hides a good deal). In 
 the second of the quoted sentences ' ' conscious- 
 ness " and " existence " are so sharply opposed 
 that we are n early driven to conclud e that m gn 
 were regarded s^lelj;_as living ag^ents of histori- 
 cal powers whose KQrk they c arry o ut positWgly 
 against jtheir knowledge_and_wilI. AncTSus is 
 only partly modified by a sentence omitted here 
 as of secondary consideration in which is em- 
 phasised the need of discriminating in social 
 revolutions between the material revolution in 
 the conditions of production and the " ideolo- 
 gistic forms " in which men become conscious 
 of this conflict and fight it out. OnJJs&sihdle 
 the consciousness jajidwill-oimea^^pear-to be 
 a very subordinate factor of the.jnaterial move- 
 ment. _- 
 
 In the preface to the first volume of Capital 
 we come across a sentence savouring no less 
 of predestination. " We are concerned," it 
 reads, with reference to the " natural laws " of 
 capitalist production, " with these tendencies 
 working and forcing their way with iron 
 necessity." And yet just when he was speaking 
 of law, a milder concept comes forward — that 
 of tendency. And on the next page stands the 
 sentence so often quoted, that society can 
 " shorten and soften " the birth pains of phases 
 of development in conformity with nature. 
 
The dependence of men on the conditions of 
 production appears much more qualified in the 
 explanation Friedrich Engels gives of historical 
 materialism, during the lifetime of Karl Marx 
 and in agreement with him, in his book against 
 Duhring. There it reads that the " final causes 
 of all social changes and political revolutions " 
 are to be sought, not in the brains of men but 
 ' ' in changes , of methods of production and 
 exchange. " (But " final causes " includes con- 
 current causes of another kind — causes of the 
 second or third degree, etc., and it is clear that 
 the greater the series of such causes is, the more 
 limited as to quantity and quality will be the 
 determining power of the final causes. The fact 
 of its action remains, but the final form of 
 things does not depend on it alone^ An issue 
 which is the result of the working of different 
 forces can only be reckoned upon with certainty 
 when all the forces are exactly known and 
 placed in the calculation according to their full 
 value. The ignoring of a force of even a lower 
 degree involves the greatest deviations, as 
 every mathematician knows. 
 
 In his later works Engels has limited still 
 further the determining force of the conditions 
 of production — ^most of all in two letters 
 reprinted in the Sosialistischen Akademiker of 
 October, 1895, the one written in the year 1890, 
 the other in the year 1894. There, " forms of 
 law," political, legal, philosophical theories, 
 religious intuitions or dogmas are enumerated 
 as forces which influence the course of historical 
 struggles and in many cases " are factors 
 
preponderating in the determination of their 
 form." "There are then innumerable forces 
 thwarting one another," we read, " an endless 
 group of parallelograms of forces, from which 
 one resultant — ^the historical event — is pro- 
 duced which itself can again be looked upon as 
 the product of a power working as a whole 
 without consciousness or will. For what every 
 single man wills is hindered by every other man, 
 and the result of the struggle is something 
 which no one had intended." (Letter of 1890.) 
 ("The political, legal, philosophical, religious, 
 literary, artistic evolution rests on the economic 
 evolution. But they all react on one another 
 and on the economic basis." (Letter of 1895.) 
 It must be confessed that this sounds somewhat 
 differently from the passage from Marx quoted 
 above) 
 
 It will, of course, not be maintained that 
 Marx and Engels at any time overlooked the 
 fact that non-economic factors exercise an 
 influence on the course of history. Innumerable 
 passages from their early writings can be quoted 
 against such suppositions. But^e are dealing 
 here with a question of proportion — not whether 
 ideologic factors were acknowledged, but what 
 measure of influence, what significance for 
 history were ascribed to them, and in this 
 respect it cannot be denied that Marx and 
 Engels originally assigned to the non-economic 
 factors a much less influence on the evolution 
 of society, a much less power of modifying by 
 their action the conditions of production than 
 in their later writings.) This corresponds also 
 
to the natural course of the development of 
 every new theory. Such an one always first 
 appears in sharp categoric formulation. In 
 order to gain authority, the untenability of the 
 old theory must be shown, and in this conflict 
 one-sidedness and exaggeration are easily 
 manifested. In the sentence which we placed 
 as a motto to this section of the volume, Engels 
 acknowledges it unreservedly, and in the fol- 
 lowing sentence he remarks : " It is unfortun- 
 ately only too common for a man to think he 
 has perfectly understood a theory and is able 
 forthwith to apply it, as soon as he has made 
 the chief propositions his own. "(He who to-day 
 employs the materialist theory of history is 
 bound to employ it in its most developed, not 
 in its original, forn^that is, he is bound in 
 addition to the development and influence of the 
 productive forces and conditions of production 
 to make full allowance for the ideas ojf law and 
 morals, the historical and religious traditions of 
 every epoch, the influences of geographical and 
 other circumstances of nature — to which also 
 the nature of man himself and his spiritual 
 disposition belong. This must be kept quite 
 particularly in view when it is a question no 
 longer of simple research into earlier epochs of 
 history, but of foretelling coming developments, 
 if the materialist conception of history is to 
 be of use as a guide to the future. 
 
 In a letter to Conrad Schmidt dated October 
 27th, 1890, Friedrich Engels showed in an 
 excellent manner how from being products of 
 economic development, social institutions 
 
13 
 
 become independent social forces with actions of 
 their own, which in their turn may react on the 
 former, and according to circumstances, 
 promote or hinder them or turn them into other 
 directions. He brings forward in the first place 
 the power of the state as an example, when he 
 completes the definition of the state mostly given 
 by him — as the organ of the government of the 
 classes andot repression=%yii!E'Very important 
 3erivation oj the state from the social division 
 of labour. * ^Iistorical materialism by no means 
 denies every autonomy to political and ideologic 
 forces — it combats only the idea that these 
 independent actions are unconditional, and 
 shows that the development of the economic 
 foundations of social life — the conditions of 
 production and the evolution of classes — finally 
 exercises the stronger influence on these actions^ 
 (But in any case the multiplicity of the factors 
 remains, and it is by no means always easy to 
 lay bare the relations which exist among them 
 so exactly that it can be determined with cer- 
 tainty where in given cases the strongest 
 motive power is to be sough^ The purely 
 economic causes create, first of all, only a dis- 
 position for the reception of certain ideas, but 
 how these then arise and spread and what form 
 they take, depend on the co-operation of a 
 whole series of influences.^ More harm than 
 
 * Certainly in the Origin of the Family it is shown in 
 detail how the social division of labour makes the rise of 
 the state necessary. But Engels lets this side of the 
 origin of the state fall completely, and finally treats the 
 state, as in Anti-Diihring, as only the organ of political 
 repression. 
 
J4 
 
 good is done to historical materialism if at the 
 outset one rejects as eclecticism an accentuation 
 of the influences other than those of a purely 
 economic kind, and a consideration of other 
 economic factors than the technics of produc- 
 tion and their foreseen development. Eclecti- 
 cism — the selecting from different explanations 
 and ways of dealing with phenomena — is often 
 only the natural reaction from the doctrinaire 
 desire to deduce everything from one thing and 
 to treat everything according to one and the 
 same method. As soon as such desire is exces- 
 sive the eclectic spirit works its way again with 
 the power of a natural force. It is the rebellion 
 of sober reason against the tendency inherent in 
 every doctrine to fetter thought. 
 
 \Now, to whatever degree other forces besides 
 the purely economic, influence the life of society, 
 just so much more also does the sway of what, 
 in an objective sense, we call historic necessity 
 change. In modern society we have to dis- 
 tinguish in this respect two great streams. On 
 the one side appears an increasing insight into 
 the laws of evolution and notably of economic 
 evolution.^ With this knowledge goes hand in 
 hand, partly as its cause, partly again as its 
 effect, an increasing capability of directing the 
 economic evolution. The economic natural 
 force, like the physical, changes from the ruler 
 of mankind to its servant according as its 
 nature is recognised. Society, theoretically, can 
 be freer than ever in regard to the economic 
 movement, and only the antagonism of interests 
 among its elements — the power of private and 
 
IS 
 
 group elements — hinders the full transition of 
 freedom from theory to practice. Yet the com- 
 mon interest gains in power to an increasing 
 extent as opposed to private interest, and the 
 elementary sway of economic forces ceases 
 according to the degree in which this is the case, 
 and in all places where this is the case. Their 
 development is anticipated and is therefore 
 accomplished all the more quickly and easily. 
 Individuals and whole nations thus withdraw 
 an ever greater part of their lives from the 
 influence of a necessity compelling them, without 
 or against their will. 
 
 (But because men pay ever greater attention 
 to economic factors it easily appears as though 
 these played a greater part to-day than for- 
 merly. That, however, is not the casej^- The 
 deception is only caused because in many cases 
 the economic motive appears freely to-day 
 where formerly it was concealed by conditions of 
 government and symbols of all kinds. Modern 
 society is much richer than earlier societies in 
 ideologies which are not determined by econo- 
 mics and by nature working as an economic 
 force. Sciences, arts, a whole series of social 
 relations are to-day much less dependent on 
 economics than formerly, or, in order to give 
 no room for misconception, the point of 
 economic development attained to-day leaves the 
 ideological, and especially the ethical, factors 
 greater space for independent activity than was 
 formerly the case, (in consequence of this the 
 interdependency of cause and effect between 
 technical, economic evolution, and the evolution 
 
i6 
 
 of other social tendencies is becoming always 
 more indirect, and from that the necessities of 
 the first are losing much of their power of 
 dictating the form of the latter^ 
 
 " The Iron Necessity of History " receives in 
 this way a limitation, which, let me say at once, 
 signifies in regard to the practice of social 
 democracy, no lessening but an increasing and 
 qualifying of its social political tasks. 
 
 VThus we see the materialist conception of 
 history to-day in another form than it was pre- 
 sented at first by its founders. It has gone 
 through a development already, it has suffered 
 limitations in absolutist interpretation. That 
 is, as has been shown, the history of every 
 theory. It would be the greatest retrogression 
 to go back from the ripe form which Engels 
 has given it in the letters to Conrad Schmidt 
 to the first definitions and to give it a " monis- 
 tic " interpretation based on thesej 
 
 The first definitions are rather to be supple- 
 mented by those letters. The fundamental idea 
 of the theory does not thereby lose in uniformity, 
 but the theory itself gains in scientific character. 
 Only with these supplements does it become truly 
 a theory of the scientific treatment of history. 
 In its first form it could become in the hand of 
 a Marx a lever of mighty historical discoveries, 
 but even his genius was led by it to all kinds of 
 false conclusions.* 
 
 * " It is much easier," says Marx in a much-quoted 
 passage in Capital, " to find by analyses the earthly 
 kernel of religious, hazy imaginations than by the reverse 
 process to evolve from the actual conditions of life their 
 
17 
 
 Finally, the question arises, up to what point 
 the materialist conception of history has a claim 
 to its name, if we continue to widen it in the 
 above-mentioned manner through the inclusion 
 of other forces. In fact, according to Engels' 
 explanations, it is not purely materialist, much 
 less purely economic. I do not deny that the 
 name does not completely fit the thing. But I 
 seek progress not in making ideas confused, 
 but in making them precise; and because it is 
 of primary importance in the characterisation 
 of a theory of history to acknowledge in what 
 it differs from others, I would, far from taking 
 offence at the title "F^f onnmir TntfirprH'ii I ii tri" i tf 
 History.t ll.keep it, in spite of all that can be said 
 against it, as the most appropriate description 
 of the Marxist theory of history. 
 
 Its significance rests on the weight it lays on 
 economics ; out of the recognition and valuation 
 of economic facts arise its just services to the 
 science of history, and the enrichment which 
 this branch of human knowledge owes to it. 
 (An economic interpretation of history does not 
 necessarily mean that only economic forces, 
 only economic motives, are recognised ; but only 
 that economics forms an ever recurring decisive 
 force, the cardinal point of the great movements 
 in history^ To the words " materialist conception 
 
 heavenly form. The latter is the only materialistic and 
 therefore scientific method " (Capital, I., 2nd ed., p. 386). 
 In this contrast there is great exaggeration. Unless one 
 already knew the heavenly forms, the method of deduc- 
 tion described would lead to all kinds of arbitrary con- 
 structions, and if one knew them the deduction described 
 is a means of scientific analysis, but not a scientific 
 antithesis to analytic interpretation. 
 
i8 
 
 of history" still adhere all the misunderstandings 
 which are closely joined with the conception of 
 materialism. Philosophic materialism, or the 
 materialism of natural science, is in a mechani- 
 cal sense deterministic. The Marxist conception 
 of history is not. Cit allots to the ec onomic 
 foundationofJhs-JjJe^SKSSoiisJjwIu^onai- 
 titmted^etermining^mflugfl££^^ this 
 
 (c) The Marxist Doctrine of Class War and 
 of the Evolution of Capital. 
 
 ^^he doctrine of the class wars rests on the 
 fouq3ation o f ihe materiaii srTm ggptiagjf 
 J&istary; '^ ^t was Tound,*'" writes Engels in 
 Anti-DUhring, " that all history* hitherto was 
 the history of class wars, that the classes 
 fighting each other are, each time, the outcome 
 of the conditions of production and commerce — 
 in one word, of the economic conditions of their 
 epoch " (3rd edition, page 12). In modern 
 society it is the class war between the capitalist 
 owners of the means of production and the pro- 
 ducers without capital, the wage workers, which 
 imprints its mark on history in this respect. 
 For the former class Marx took from France 
 the term Bourgeoisie, and for the latter 
 the term Proletariat. This class struggle 
 between bourgeoisie and proletariat is accord- 
 ingly the antagonism, transferred to men, which 
 is in the conditions of production to-day, that 
 
 * In the fourth edition of the work Socialism, Utopian 
 and Scientific, follow here the limiting words "with the 
 exception of primitive societies." 
 
19 
 
 is, in the private character of the method of 
 appropriation and the social character of the 
 method of production. The means of production 
 are the property of individual capitalists who 
 appropriate to themselves the results of the 
 production, but the production itself has become 
 a social process; that means, a production of 
 commodities for use made by many workers on 
 a basis of systematic division and organisation 
 of labour. And this antagonism conceals in 
 itself, or has, a second conflict, as a supplement : 
 the systematic division and organisation of 
 work within the establishments for production 
 (workshop, factory, combination of factories, 
 etc.) is opposed by the unsystematic disposal of 
 the produce on the market. 
 
 The starting point of the class struggle 
 between capitalists and workers is the antagon- 
 ism of interests which follows from the nature* 
 of the utilisation of the labour of the latter by 
 the former for profit. The examination of this 
 process of utilisation leads to the doctrine of i 
 value and of the production and appropriation 
 of surplus value. 
 
 It is significant for capitalist production and 
 the order of society founded thereon, that men 
 in their economic relations stand opposed to one 
 another throughout as buyers and sellers. It 
 recognises in social life no general legal rela- 
 tions of dependence but only actual ones follow- 
 ing from purely economic relations (differences 
 of economic means, relation of hirer and hired, 
 etc.). The worker sells to the capitalist his 
 power to work for a definite time, under definite 
 
conditions, and for a definite price — wages. The 
 capitalist sells the products (manufactured with 
 the help of the worker — ^that is, by the whole of 
 the workers employed by him) in the goods 
 market at a price which, as a rule and as a 
 condition of the continuance of his undertaking, 
 yields a surplus above the amount which the 
 manufacture costs. What is, then, this surplus ? 
 According to Marx it is the surplus value of 
 the labour accomplished by the worker. The 
 goods are exchanged on the market at a value 
 which is fixed by the labour embodied in them, 
 measured according to time. What the 
 capitalist has put in in past — we would even 
 say dead — labour in the form of raw material, 
 auxiliary material, wear and tear of machinery, 
 rent, and other costs of production, appears 
 again unchanged in the value of the product. 
 It is otherwise with the living work expended 
 on it. This costs the capitalist wages ; it brings 
 him an amount beyond these, the equivalent of 
 the value of labour. The labour valjicis -the 
 value of lhe.^antity_onagpux'workedJatoJie 
 R'^duct ; thejKoriker;sjyaggsi§.tlis.§glllin&.price 
 of thie labour power used up in^ production. 
 Prices, or the value of labour power, are^eter- 
 mined by the cost of maintenance of the worker 
 as it corresponds with his historically developed 
 habits of life. The difference between the 
 equivalent (erlos) of the labour-value and the 
 labour-wage is the surplus value which it is the 
 natural endeavour of the capitalist to raise as 
 high as possible and in any case not to allow to 
 sink. 
 
But competition on the market of commodities 
 presses constantly on the price of commodities, 
 and an increase of sales is again only obtained 
 by a cheapening of production. The capitalist 
 can attain this cheapening in three kinds of 
 ways : lowering of wages, lengthening of the 
 hours of work, an increase in the productivity 
 of labour. As at a given time there are always 
 definite limits to the first two, his energy is 
 always being turned to the last one. Better 
 organisation of work, inter-unification of work 
 and perfecting of machinery are, in the more 
 developed capitalist societies, the predominating 
 means of cheapening production. In all these 
 cases the consequence is that the organic com- 
 position of capital, as Marx calls it, is changing. 
 The relation of the portion of capital laid out in 
 raw materials, tools for work, etc. , increases ; 
 the portion of capital laid out in labour wages 
 decreases ; the same amount of commodities is 
 produced by fewer workers, an increased 
 amount by the old or even by a less number of 
 workers. The ratio of the surplus value to the 
 portion of capital laid out in wages Marx calls 
 the rate of surplus value or of exploitation, the 
 ratio of the surplus value to the whole capital 
 invested in producing he calls the rate of profit. 
 From the foregoing it is self-evident that the 
 rate of surplus can rise at the same time as the 
 rate of profit falls. 
 
 According to the nature of the branch of pro- 
 duction we find a very different organic com- 
 bination of capital. There are undertakings 
 where a disproportionately large portion of the 
 
capital is spent on instruments of work, raw 
 material, etc., and only a relatively small 
 amount on wages ; and others where the wages 
 form the most important part of the expenditure 
 of capital. The first represent higher, the 
 second lower, organic combinations of capital. 
 If an equal proportionate rate ruled throughout 
 between the surplus value attained and the 
 labour wage, in these latter branches of produc- 
 tion the profit rates would in many cases exceed 
 those in the first by multiples. But that is not 
 the case. In a developed capitalist society 
 goods are sold not at their labour values but at 
 their prices of production, which consist of the 
 cost of production (workers' wages plus dead 
 work used up) and of an additional expense 
 which corresponds with the average profit of 
 the whole social production, or the profit rate 
 of that branch of production in which the 
 organic combination of capital shows an average 
 ratio of wages-capital to capital employed for 
 the other purposes. The prices of commodities 
 in the different branches of production, there- 
 fore, show by no means the same relation to 
 their value. In some cases they are constantly 
 far below the value, and in others constantly 
 above it, and only in those branches of produc- 
 tion with an average composition of capital do 
 they approach the value. The law of value 
 disappears altogether from the consciousness of 
 the producers ; it works only behind their backs, 
 whilst the level of the average profit rate is 
 regulated by it at longer intervals only. 
 
 The coercive laws of competition and the 
 
33 
 
 growing wealth of capital in society tend to 
 lower constantly the profit rate, whilst this is 
 delayed by forces working in opposite direc- 
 tions but is not permanently stopped. Over- 
 production of capital goes hand in hand with 
 forces creating a superabundance of workers. 
 Greater centralisation is always spreading in 
 manufactures, commerce, and agriculture, and 
 an expropriation of the smaller capitalists by the 
 greater grows. Periodic crises brought about 
 by the anarchy in production in conjunction 
 with the under-consumption of the masses are 
 always reappearing in a more violent and more 
 destructive character; and they hasten the 
 process of centralisation and expropriation by 
 the ruin of innumerable small capitalists. (On 
 the one side is generalised the collective — co- 
 operative — form of the process of work on an 
 always growing scale, in an ascending degree ; 
 on the other side increases "with the constantly 
 diminishing number of capitalist magnates^ 
 who usurp and monopolise all the advantages 
 of this process of transformation, the mass of 
 misery, oppression, servitude, deterioration, 
 exploitation, but also with it the revolt of the 
 working class constantly increasing and taught, 
 united and organised by the mechanism of the 
 capitalist process of production itself." (Thus 
 the development reaches a point where the 
 monopoly of capital becomes a fetter to the 
 method of production that has thriven on it, 
 when the centralisation of the means of produc- 
 tion and the socialisation of labour become 
 incompatible with their capitalist garment^ 
 
24 
 
 This is then rent. The expropriators and 
 usurpers are expropriated by the mass of the 
 nation. Capitalist private property is done 
 away with. 
 
 r^his is the historical tendency of the manner 
 of production and appropriation, according to 
 Marx. The class which is called upon to carry 
 out the expropriation of the capitalist class and 
 the transformation of capitalist into public 
 property, is the class of the wage earners, the 
 proletariat. For this purpose must the class 
 be organised as a political party.^ This party 
 at a given moment seizes the power of the 
 State and " changes the means of production 
 first of all into State property. But therewith 
 the proletariat negatives itself as a proletariat, 
 therewith it puts an end to all differences of 
 class and antagonisms of class, and conse- 
 quently also puts an end to the State as a 
 State." The struggle for individual existence 
 with its conflicts and excesses is over, the State 
 has nothing more to oppress "and dies off."* ■^ 
 
 So far, in the most concise compression 
 possible, I have endeavoured to set forth the 
 most important propositions of that part of the 
 Marxist theory which we have to consider as 
 essential to his socialism. Just as little as — or, 
 rather, still less than — the materialist theory of 
 history has this part of the theory sprung from 
 the beginning in a perfected form from the head 
 of its authors. Even more than in the former 
 
 * Engels, Socialism, Utopian and Scientific. 
 
as 
 
 case can a development of the theory be shown 
 which, whilst firmly maintaining the chief 
 points of view, consists of limiting the pro- 
 positions at first represented as absolute. In 
 the preface to Capital (1867), in the preface to 
 the new edition of the Communist Manifesto 
 (1872), in the preface and a note to the new 
 edition of the Poverty of Philosophy (1884), and 
 in the preface to the Class Struggles in the 
 French Revolution (1895), some of the changes 
 are shown which in the course of time have 
 been brought to pass with regard to various 
 corresponding matters in the views of Marx 
 and Engels. But not all the changes to be 
 cited here and elsewhere with reference to single 
 portions or hypotheses of the theory have found 
 full consideration in its final elaboration. Marx 
 and Engels confined themselves sometimes 
 merely to hinting at, sometimes only to stating 
 in regard to single points, the changes recog- 
 nised by them in facts, and in the better 
 analyses of these facts, which influenced the 
 form and application of their theory. And even 
 in the last respect contradictions are not 
 wanting in their writings. vThey have left to 
 their successors the duty of bringing unity 
 again into their theory and of co-ordinating 
 theory and practice. 
 
 But this duty can only be accomplished if one 
 gives an account unreservedly of the gaps and 
 contradictions in the theory. In other words, 
 the further development and elaboration of the 
 Marxist doctrine must begin with criticism of 
 it^ To-day, the position is that one can prove 
 
36 
 
 everything out of Marx and Engels. This is 
 very comfortable for the apologists and the 
 literary pettifogger. But he who has kept only 
 a moderate sense for theory, for whom the 
 scientific character of socialism is not " only a 
 show-piece which on festive occasions is taken 
 out of a plate cupboard but otherwise is not 
 taken into consideration," he, as soon as he is 
 conscious of these contradictions, feels also the 
 need of removing them. The duty of the 
 disciples consists in doing this and not in 
 everlastingly repeating the words of their 
 masters. 
 
 In this sense has been undertaken the follow- 
 ing criticism of some elements of the Marxist 
 doctrine. The wish to keep within moderate 
 bounds a volume intended in the first instance 
 for the use of working men, and the necessity of 
 finishing it within a few weeks explain why an 
 exhaustive treatment of the subject has not even 
 been attempted. At the same time, let it be 
 understood once for all that no pretensions are 
 raised as to originality in the criticism. Most, 
 if not all, of what follows has in substance been 
 worked out — or at least indicated — by others 
 already. The justification for this essay is not 
 that it discloses something not known before 
 but that it acknowledges what has been dis- 
 closed already. 
 
 ^ut this is also a necessary work. The 
 mistakes of a theory can only be considered as 
 overcome when they are recognised as such by 
 the advocates of that theory. Such recognition 
 does not necessarily signify the destruction of 
 
27 
 
 the theory. It may rather appear after sub- 
 traction of what is acknowledged to be mistaken 
 — if I may be allowed to use an image of 
 Lassalle — that it is Marx finally who carries 
 the point against Marx.^ 
 
Chapter II. 
 
 THE ECONOMIC DEVELOPMENT OF MODERN 
 SOCIETY. 
 
 (a) On the Meaning of the Marxist Theory 
 of Value. 
 
 " From which incidentally the practical 
 application follows that there are sometimes 
 difficulties with the popular claim of the 
 worker to the " full proceeds of his labour." 
 — Engels, Herr Eugen Duhring's Unwdl- 
 zung. 
 
 According to the Marxist theory surplus value 
 is, as we have seen, the pivot of the economy of 
 a capitalist society. But in order to understand 
 surplus value one must first know what value 
 is. The Marxist representation of history and 
 of the course of development of capitalist society 
 begins therefore with the analysis of value. 
 
 In modern society, according to Marx, the 
 value of commodities consists in the socially 
 necessary labour spent on them measured 
 according to time. But with the analysis of 
 this measure of value quite a series of abstrac- 
 tions and reductions is necessary. First, the 
 pure exchange value must be found; that is, 
 we must leave aside the special use values of 
 the particular commodities. Then — in forming 
 the concept of general or abstract human 
 labour — we must allow for the peculiarities of 
 
29 
 
 particular kinds of labour (reducing higher or 
 complex labour to simple or abstract labour). 
 Then, in order to attain to the socially necessary 
 time of work as a measure of the value of 
 labour, we must allow for the differences in 
 diligence, activity, equipment of the individual 
 workers ; and, further (as soon as we are con- 
 cerned with the transformation of value into 
 market value, or price), for the socially neces- 
 sary labour time required for the particular 
 commodities separately. But the value of labour 
 thus gained demands a new reduction. In a 
 capitalistic developed society commodities, as 
 has already been mentioned, are sold not 
 according to their individual value but accord- 
 ing to their price of production — that is, the 
 actual cost price plus an average proportional 
 rate of profit whose degree is determined by the 
 ratio of the total value of the whole social 
 production to the total wage of human labour 
 power expended in producing, exchanging, etc. 
 At the same time the ground rent must be 
 deducted from the total value, and the division 
 of the capital into industrial, commercial, and 
 bank capital must be taken into the calculation. 
 In this way, as far as single commodities or 
 a category of commodities comes into con- 
 sideration, value loses every concrete quality 
 and becomes a pure abstract concept. But 
 what becomes of the surplus value under these 
 circumstances ? This consists, according to the 
 Marxist theory, of the difference between the 
 labour value of the products and the payment 
 for the labour force spent in their production by 
 
3° 
 
 the workers. It is therefore evident that at 
 the moment when labour value can claim ac- 
 ceptance only as a speculative formula or 
 scientific hypothesis, surplus value would all 
 the more become a pure formula — a formula 
 which rests on an hypothesis. 
 
 As is known, Friedrich Engels in an essay 
 left behind him which was published in the 
 Neue Zeit of the year 1895-96, pointed out a 
 solution of the problem through the historical 
 consideration of the process. ^Accordingly the 
 law of value was of a directly determining 
 power, it directly governed the exchange of 
 commodities in the period of exchange and 
 barter of commodities preceding the capitalist 
 order of society .7 
 
 Engels seeks to prove this in connection with 
 a passage in the third volume of Capital by a 
 short description of the historic evolution of 
 economics. But although he presents the rise 
 and development of the rate of profit so 
 brilliantly, the essay fails in convincing strength 
 of proof just where it deals with the question 
 of value. According to Engels' representation 
 the Marxist law of value ruled generally as an 
 economic law from five to seven thousand years, 
 from the beginning of exchanging products as 
 commodities (in Babylon, Egypt, etc.) up to 
 the beginning of the era of capitalist production. 
 Parvus, in a number of Neue Zeit of the same 
 year, made good some conclusive objections to 
 this view by pointing to a series of facts (feudal 
 relations, undifferentiated agriculture, mon- 
 opolies of guilds, etc.) which hindered the 
 
31 
 
 conception of a general exchange value founded 
 on the labour time of the producers. It is quite 
 clear that exchange on the basis of labour 
 value cannot be a general rule so long as pro- 
 duction for exchange is only an auxiliary branch 
 of the industrial units, viz., the utilisation of 
 surplus labour, etc., and as long as the con- 
 ditions under which the exchanging producers 
 take part in the act of exchange are fundamen- 
 tally different. The problem of Labour form- 
 ing exchange value and the connected problems 
 of value and surplus value is no clearer at that 
 stage of industry than it is to-day. 
 
 But what was at those times clearer than 
 to-day is the fact of surplus labour. When 
 surplus labour was performed in ancient time — 
 and in the middle ages no kind of deception 
 prevailed about it — it was not hidden by any 
 conception of value. When the slave had 
 to produce for exchange he was a simple 
 surplus labour machine. The serf and the 
 bondsman performed surplus labour in the open 
 form of compulsory service (duties in kind, 
 tithes, etc.). The journeyman employed by the 
 guildmaster could easily see what his work cost 
 his master, and at how much he reckoned it to 
 his customer.* 
 
 * Where pre-capitalist methods of industry have been 
 handed down to present times, surplus labour is shown 
 to-day even unconcealed. The man employed by the 
 small builder who performs a piece of work for one of 
 his customers knows quite well that his hour's wage is 
 so much less than the price which the master puts in 
 his account for the hour's work. The same with the 
 customers of tailors, gardeners, etc. 
 
3* 
 
 This clearness of the relations between wages 
 of labour and price of commodities prevails even 
 on the threshold of the capitalist period. From 
 it are explained many passages that surprise us 
 to-day in the economic writings of that time 
 about surplus labour and labour as the sole 
 producer of weath. What appears to us the 
 result of a deeper observation of things was at 
 the time almost a commonplace. It did not at 
 all occur to the rich of -ithat epoch to represent 
 their riches as the fruit of their own work. The 
 theory arising at the beginning of the manu- 
 facturing period of labour as the measure of 
 exchange value (the latter conception then first 
 becoming general) certainly starts from the 
 conception of labour as the only parent of 
 wealth, and interprets value still quite con- 
 cretely (viz. , as the cost price of a commodity), 
 but forthwith contributes more towards con- 
 fusing the conceptions of surplus labour than 
 of clearing them. We can learn from Marx 
 himself how Adam Smith, on the basis of these 
 conceptions, represented profits and ground 
 rent as deductions from the labour value ; how 
 Ricardo worked out this thought more fully, 
 and how socialists turned it against the bour- 
 geois economy. 
 
 But with Adam Smith labour value is already 
 conceived as an abstraction from the prevailing 
 reality. His full reality is in " the early and 
 crude state of society " which precedes the 
 accumulation of capital and the appropriation 
 of land, and in backward industries. In the 
 capitalist world, on the other hand, profit and 
 
33 
 
 rent are for Smith constituent elements of 
 value beside labour or wages ; and labour value 
 serves Smith only as a " concept " to disclose 
 the division of the products of labour — that is 
 the fact of surplus labour. 
 
 In the Marxist system it is not otherwise in 
 principle. Marx certainly sticks to the idea of 
 labour value more firmly than Smith, and has 
 conceived it in a more strict but at the same 
 time also more abstract form. But whilst the 
 Marxist school — and the present author 
 amongst them — ^believed that a point of funda- 
 mental importance for the system was the 
 passionately discussed question as to whether 
 the attribute of " socially necessary labour 
 time " in labour value related only to the 
 manner of the production of the respective 
 commodities or included also the relation of 
 the amount produced of these commodities 
 to effective demand, a solution lay already 
 in the desk of Marx which gave quite a dif- 
 ferent complexion to this and other questions, 
 forced it into another region, on to another 
 plane. The value of individual commodities or 
 kinds of commodities becomes something quite 
 secondary, since they are sold at the price of 
 their production — cost of production plus profit 
 rate. (What takes the first place is the value 
 of the total production of society, and the excess 
 of this value over the total amount of the wages 
 of the working classes — that is, not the indi^ 
 vidual, but the total social surplus value) That 
 which the whole of the workers produce in a 
 given moment over the portion falling to their 
 
34 
 
 share, forms the social surplus value, the surplus 
 value of the social production which the indi- 
 vidual capitalists share in approximately equal 
 proportion according to the amount of capital 
 applied by them for business purposes. But 
 the amount of this surplus value is only realised 
 in proportion to the relation between the total 
 production and the total demand — i.e., the 
 buying capacity of the market. From this point 
 of view — that is, taking production as a whole — 
 the value of every single kind of commodity is 
 determined by the labour time which was neces- 
 sary to produce it under normal conditions of 
 production to that amount which the market — 
 that is the community as purchasers — can take 
 in each case. Now just for the commodities 
 under consideration there is in reality no exact 
 measure of the need of the community at a 
 given moment; and thus value conceived as 
 above is a purely abstract entity, not otherwise 
 than the value of the final utility of the school 
 of Gossen, Jevons, and Bohm-Bawerk. Actual 
 relations lie at the foundation of both ; but both 
 are built up on abstractions. 
 
 Such abstractions naturally cannot be avoided 
 in the observation of complex phenomena. 
 How far they are admissible depends entirely 
 on the substance and the purpose of the 
 investigation. At the outset, Marx takes so 
 much away from the characteristics of commo- 
 dities that they finally remain only embodiments 
 of a quantity of simple human labour; as to 
 the Bohm-Jevons school, it takes away all 
 characteristics except utility. But the one 
 
35 
 
 and the other kind of abstractions are only 
 admissible for definite purposes of demonstra- 
 tion, and the propositions found by virtue of 
 them have only worth and validity within 
 defined limits. 
 
 If there exist no exact measure for the total 
 demand at one time of a certain class of com- 
 modities, practical experience shows that 
 within certain intervals of time the demand and 
 supply of all commodities approximately 
 equalise themselves. Practice shows, further, 
 that in the production and distribution of com- 
 modities only a part of the community takes 
 an active share, whilst another part consists of 
 persons who either enjoy an income for services 
 which have no direct relation to the production 
 or have an income without working at all. An 
 essentially greater number of men thus live on 
 the labour of all those employed in production 
 than are engaged actively in it, and income 
 statistics show us that the classes not actively 
 engaged in production appropriate, moreover, 
 a much greater share of the total produced than 
 the relation of their number to that of the 
 actively producing class. The surplus labour 
 of the latter is an empiric fact, demonstrable by 
 experience, which needs no deductive proof. 
 Whether the Marxist theory of value is correct 
 or not is quite immaterial to the proof of surplus 
 labour. It is in this respect no demonstration 
 but only a means of analysis and illustration. 
 
 If, then, Marx presumes, in the analysis of 
 the production of commodities, that single 
 commodities are sold at their value, he illustrates 
 
36 
 
 on a single object the transaction which, 
 according to his conception, the total production 
 actually presents. The labour time spent on 
 the whole of the commodities is in the sense 
 before indicated, their social value.* 
 
 And even if this social value is not fully 
 realised — because a depreciation of commodi- 
 ties is always occurring through partial over- 
 production — ^yet this has in principle no bearing 
 on the fact of the social surplus value or surplus 
 product. The growth of its amount will be 
 occasionally hindered or made slower, but there 
 is no question of it standing still, much less of a 
 retrogression in its amount in any modern state, 
 frhe surplus product is everywhere increasing, 
 but the ratio of its increase to the increase 
 of wages-capital is declining to-day in the more 
 advanced countries^ 
 
 By the simple fact that Marx applies the 
 formula for the value of the whole of the com- 
 modities, to single commodities, it is already 
 indicated that he makes the formation of 
 surplus value fall exclusively in the sphere 
 of production, where it is the industrial wage 
 earner who produces it. AH other active 
 
 * It is, in fact, the law of value . . . that not only on 
 every single commodity is just the necessary labour lime 
 spent, but that no more than the necessary proportional 
 amount of the social total labour time is spent in the 
 different groups. " For use value is the condition . . . 
 the social need — that is, the use value on a social basis 
 appears here as the determining factor for the shares of 
 the total social labour time which fall to the lot of the 
 different particular spheres of |>roduction " {Capital, III., 
 2, pp. 176, 177). This sentence alone makes it impossi{)le 
 to make light of the Gossen-Bbhm theory with a few 
 superior phrases. 
 
37 
 
 elements in modern economic life are auxiliary 
 agents to production and indirectly help to 
 raise the surplus value when they, for example, 
 as merchants, bankers, etc., or their staff, 
 undertake services for industry which, would 
 otherwise fall upon it, and so they lessen its 
 cost. The wholesale dealers, etc., with their 
 employees, are only transformed and differ- 
 entiated clerks, etc., of the industrial entre- 
 preneurs, and their profits are the transformed 
 and concentrated charges of the latter. The 
 employees for wages of these merchants cer- 
 tainly create surplus value for them, but no 
 social surplus value. For the profit of their 
 employers, together with their own wages, 
 form a portion of the surplus value which is 
 produced in the industry. Only, this share is 
 then proportionately less than it was before the 
 differentiation of the functions here under con- 
 sideration or than it would be without it. This 
 differentiation only renders possible the great 
 development of production on a large scale and 
 the acceleration of the turnover of industrial 
 capital. Like division of labour generally, it 
 raises the productivity of industrial capital, 
 relatively to the labour directly employed in 
 industry. 
 
 We limit ourselves to this short recapitu- 
 lation of the exposition of mercantile capital 
 (from which, again, banking capital represents 
 a differentiation) and of mercantile profit set 
 forth in the third volume of Capital. 
 
 rtt is clear from this within what narrow 
 limits the labour that creates supply value is 
 
38 
 
 conceived in the Marxist system^ The func- 
 tions developed, as also others not discussed 
 here, are from their nature indispensable to 
 the social life of modern times. Their forms 
 can, and undoubtedly will, be altered ; but they 
 themselves will in substance remain, as long 
 as mankind does not dissolve into small social 
 self-contained communities, when they then 
 might be partly annulled and partly reduced to 
 a minimum. In the theory of value which 
 holds good for the society of to-day the whole 
 expenditure for these functions is represented 
 plainly as a deduction from surplus value, 
 'Partly as " charges," partly as a component 
 part of the rate of exploitation. 
 
 There is here a certain arbitrary dealing in 
 the valuing of functions in which the actual 
 community is no longer under consideration, 
 but a supposititious, socially-managed com- 
 munity. This is the key to all obscurities in 
 the theory of value. It is only to be understood 
 with the help of this model. We have seen 
 that surplus value can only be grasped as a 
 concrete fact by thinking of the whole economy 
 of society. Marx did not succeed in finishing 
 the chapter on the classes that is so important 
 for his theory. In it would have been shown 
 most clearly that^labour value is nothing more 
 than a key, an abstract image, like the philo- 
 sophical atom endowed with a soul — a key 
 which, employed by the master hand of Marx, 
 has led to the exposure and presentation of the 
 mechanism of capitalist economy as this had 
 not been hitherto treated, not so forcibly. 
 
39 
 
 logically, and clearly. But this key refuses 
 service over and above a certain point, and 
 therefore it has become disastrous to nearly 
 every disciple of Marxy 
 
 Q"he theory of labour value is above all mis- 
 leading in this that it always appears again and 
 again as the measure of the actual exploita- 
 tion of the worker by the capitalist, and among 
 other things, the characterisation of the rate of 
 surplus value as the rate of exploitation reduces 
 us to this conclusion. It is evident from the fore- 
 going that it is false as such a measure, even 
 when one starts from society as a whole and 
 places the total amount of workers' wages 
 against the total amount of other incomes^ The 
 theory of value gives a norm for the justice or 
 injustice of the partition of the product of 
 labour just as little as does the atomic theory 
 for the beauty or ugliness of a piece of 
 sculpture. We meet, indeed, to-day the best 
 placed workers, members of the " aristocracy 
 of labour," just in those trades with a very 
 high rate of surplus value, the most infamously 
 ground-down workers in others with a very 
 low rate. " 
 
 (a scientific basis for socialism or commun- 
 ism cannot be supported on the fact only that 
 the wage worker does not receive the full value 
 of the product of his work^ " Marx," sajrsr 
 Engels, in the preface to the Poverty of Philo- 
 sophy j " has never based his communistic 
 demands on this, but on the necessary collapse 
 of the capitalist mode of production which is 
 being daily more nearly brought to pass before 
 our eyes." 
 
Let us see how in this respect the matter 
 stands. 
 
 (ft) The Distribution of Wealth in the Modern 
 Community. 
 
 " If on the one side accumulation appears 
 as growing concentration ... on the other 
 side it appears as the repulsion of individual 
 capitalists from one another." — Marx, 
 Capital, I., 4th ed., p. 590. 
 
 The capitalist, according to the theory of 
 Marx, must produce surplus value in order to 
 obtain a profit, but he can only draw surplus 
 value from living labour. In order to secure 
 the market against his competitors he must 
 strive after a cheapening of production and this 
 he attains, where the lowering of wages is 
 resisted, only by means of an increase of the 
 productivity of labour ; that is by the perfecting 
 of machinery and the economising of human 
 labour. But in reducing human labour he 
 places so much labour producing surplus value 
 out of its function, and so kills the goose that 
 lays the golden egg. The consequence is a 
 gradually accomplished lowering of the profit 
 rate, which through counteracting circum- 
 stances, is certainly temporarily hindered, but 
 is always starting again. This produces another 
 intrinsic contradiction in the capitalist mode of 
 production. Profit rate is the inducement to 
 the productive application of capital; if it falls 
 below a certain point, the motive for productive 
 
4» 
 
 undertakings is weakened — especially as far as 
 concerns the new amounts of capital which 
 enter the market as off-shoots of the accumu- 
 lated masses of capital. Capital shows itself 
 as a barrier to capitalist production. The 
 continued development of production is inter- 
 rupted. Whilst on the one hand every active 
 particle of capital tries to secure and increase 
 its rate of profit by means of a feverish strain 
 of production, congestion in the expansion of 
 production already sets in on the other. This 
 is only the counterpart of the transactions lead- 
 ing to relative over-production, which produces 
 a crisis in the market of use values. Over- 
 production of commodities is at the same time 
 manifesting itself as over-production of capital. 
 Here as there, crises bring about a temporary 
 arrangement. Enormous depreciation and 
 destruction of capital take place, and under the 
 influence of stagnation a portion of the working 
 class must submit to a reduction of wages 
 below the average, as an increased reserve 
 army of superabundant hands stands 'at the 
 disposal of capital in the labour market. 
 
 Thus after a time the conditions of a profit- 
 able investment of capital are ^re-established 
 and the dance can go on anew but with the 
 intrinsic contradiction already mentioned on an 
 increased scale. Greater centralisation of 
 capital, greater concentration of enterprises, 
 increased rate of exploitation. 
 iNow, is all that right? 
 Yes and no. It is true above all as a ten- 
 dene;^ The forces painted are there and work 
 
4a 
 
 in the given direction. And the proceedings are 
 also taken from reality. The fall of the profit 
 rate is a fact, the advent of over-production and 
 crises is a fact, periodic diminution of capital 
 is a fact, the concentration and centralisation 
 of industrial capital is a fact, the increase of 
 the rate of surplus value is a fact. So far we 
 are, in principle, agreed in the statement. 
 QWhen the statement does not agree with reality 
 it is not because something false is said, but 
 because what is said is incomplete^ Factors 
 which influence the contradictions described by 
 limiting them, are in Marx either quite ignored, 
 or are, although discussed at some place, 
 abandoned later on when the established facts 
 are summed up and confronted, so that the 
 social result of the conflicts appears much 
 stronger and more abrupt than it is in reality. 
 
 Unfortunately there is a l3.ck everywhere of 
 exhaustive statistics to show the actual divi- 
 sion of the shares, the preference shares, etc., 
 of the limited companies which to-day form so 
 large a portion of the social capital, as in most 
 countries they are anonymous (that is like other 
 paper money, they can change owners without 
 formalities); whilst in England, where the 
 shares registered in names predominate and the 
 list of shareholders thus determined can be 
 inspected by anyone in the State Registry 
 Office, the compilation of more exact statistics 
 of the owners of shares is a gigantic labour on 
 which no one has yet ventured. One can only 
 approximately estimate their number by refer- 
 ence to certain information collected about 
 
43 
 
 individual companies. Still, in order to show 
 how very deceptive are the ideas which are 
 formed in this direction and how the most 
 modern and crass form of capitalist centralisa- 
 tion — ^the ' ' Trust ' ' — has in fact quite a 
 different effect on the distribution of wealth 
 from what it seems to outsiders to possess, 
 the following figures which can be easily 
 verified are given : — 
 
 The English Sewing Thread Trust, formed 
 about a year ago,* counts no less than 12,300 
 shareholders. Of these there are 6,000 holders 
 of original shares with ;^6o average capital, 
 4,500 holders of preference shares with ;^i5o 
 average capital, 1,800 holders of debentures 
 with £315 average capital. Also the Trust 
 of the spinners of fine cotton had a respectable 
 number of shareholders, namely 5,454. Of 
 these, there were 2,904 holders of original 
 shares with jQ2P° average capital, 1,870 holders 
 of preference shares with jQyxi average capital, 
 680 holders of debentures with jQi^o average 
 capital. 
 
 With the Cotton Trust of J. and P. Coates 
 it is similar, f 
 
 The shareholders in the great Manchester 
 Canal amount in round numbers to 40,000, 
 those in the large provision company of T. 
 Lipton to 74,262. A stores business in London, 
 Spiers and Pond, instanced as a recent example 
 
 * Written 1899. 
 
 + In all these Trusts the original owners or share- 
 holders of the combined factories had to take up them- 
 selves a portion of the shares. These are not included in 
 the tables given. 
 
44 
 
 of the centralisation of capital, has, with a 
 total capital of ;^i, 300,000, 4,650 shareholders, 
 of which only 550 possess a holding above 
 
 ;^SOo.* 
 
 These are some examples of the splitting up 
 of shares of property in centralised undertak- 
 ings. Now, obviously, not all shareholders 
 deserve the name of capitalists, and often one 
 and the same great capitalist appears in 
 all possible companies as a moderate share- 
 holder. But with all this the number of share- 
 holders and the average amount of their holding 
 of shares has been of rapid growth. (Altogether 
 the number of shareholders in England is 
 estimated at much more than a million) and that 
 does not appear extravagant if one considers 
 
 * Rowntree and Sherwell, in The Temperance Problem 
 and Social Reform, give the following list of the share- 
 holders of five well-known British breweries : — 
 
 shareholders of 
 Breweries. Ordinary Shares. Fref. Shares. 
 
 Arthur Guinness, Son and Co.... S4S° 37^8 
 
 Bass, Ratcliff and Gretton ... 17 1368 
 
 Threlfalls 577 872 
 
 Combe and Co. ... ... ... 10 1040 
 
 Samuel Alsopp and Co 1313 2189 
 
 7367 9237 
 
 Together, 16,604 shareholders of the whole ;59, 710,000 
 ordinary and preference stocks. Besides, the said com- 
 panies had issued debentures to the amount of ;£6, 1 10,000. 
 If we assume a similar distribution of these, we would 
 arrive at about 27,000 persons as co-proprietors of the 
 five breweries. Now in 1898 the London Stock Exchange 
 list enumerated more than 119 breweries and distilleries 
 whose capital in circulated shares alone amounted to 
 more than ;^7o,ooo,ooo, apart from the fact that of sixty- 
 seven of these companies the ordinary shares were as 
 vendors' shares in private hands. All this points to whole 
 armies of capitalists of every description in the brewing 
 and distilling trades. 
 
4S 
 
 that in the year 1896 alone the number of 
 limited companies in the United Kingdom ran 
 to over 21,223, with a paid-up capital of 
 ;^i, 145, 000,000,* in which, moreover, the 
 foreign undertakings not negotiated in England 
 itself, the Government Stocks, etc., are not 
 included, t 
 
 (This division of national wealth, for which 
 word in the great majority of cases one may 
 substitute national surplus value, is shown again 
 in the figures of the statistics of incomes) 
 
 In the United Kingdom in the financial year 
 1893-4 (th^ l^st return to my hand) the number 
 of persons with estimated incomes of ;^i5o and 
 over, under Schedules D and E (incomes from 
 business profits, higher official posts, etc.) 
 amounted to 727,270.}: But to that must still 
 be added those assessed on incomes taxed for 
 ground and land (rents, farm rents), for houses 
 let, taxable capital investments. These groups 
 together pay almost as much duty as the above- 
 named groups of taxpayers, namely, on 300 
 against 350 millions of pounds income. § That 
 would nearly double the number of persons 
 referred to of over ;^iSO income. 
 
 In the British Review of May 22nd, 1897, 
 
 * [The number in existence in April, 1907, was 43,038, 
 with a paid-up capital of ;£'2,o6i,oio,586. — Ed.] 
 
 + In 1898 it was estimated that ;^2, 150,000,000 of 
 English capital was invested abroad, and its yearly 
 increase was on an average ;^5, 700,000. [In 1908, the 
 total was estimated at ;£'3,ooo,ooo,ooo. — Ed.] 
 
 J [In 1907 the number of persons with increases over 
 ;£i6o was 894,249. — Ed.] 
 
 § [The figures for 1907 are ;^327,90o,6so as against 
 ;eSi8.669.S4i-— Ed.] 
 
46 
 
 there are some figures on the growth of incomes 
 in England from 1851 to 1881. According to 
 those England contained in round numbers, in 
 1851, 300,000 families with incomes from ;^iSO 
 to ;^i,ooo (the middle and lower bourgeoisie 
 and the highest aristocracy of labour) and 
 990,000 in 1 88 1. Whilst the population in 
 these thirty years increased in the ratio of 27 
 to 35, that is about 30 per cent., the number of 
 families in receipt of these incomes increased in 
 the ratio of 27 to 90, that is 233^ per cent. 
 Giffen estimates to-day there are 1,500,000 of 
 these taxpayers.* 
 
 Other countries show no materially different 
 picture. France has, according to Mulhall, 
 with a total of 8,000,000 families, 1,700,000 
 families in the great and small bourgeois con- 
 ditions of existence (an average income of 
 ;^26o), against 6,000,000 of the working class 
 and 160,000 quite rich. In Prussia, in 1854, as 
 the readers of Lassalle know, with a population 
 of 16.3 millions, there were only 44,407 persons 
 with an income of over 1,000 thaler. In the 
 year 1894-5, with a total population of nearly 
 33,000,000, 321,296 persons paid taxes on in- 
 comes of over ;^iSO. In 1897-8 the number 
 had risen to 347,328. Whilst the population 
 doubled itself the class in better circumstances 
 increased more than sevenfold. Even if one 
 makes allowance for the fact that the provinces 
 annexed in 1866 show greater numbers of the 
 
 * [Mr. Chiozza Money estimates that in 1903-4 there 
 were 750,000 persons whose means were between ;^i6o 
 and ;6'7oo per annum. — Ed.] 
 
47 
 
 well-to-do than Old Prussia and that the prices 
 of many articles of food had risen considerably 
 in the interval, there is at least an increased 
 ratio of the better-off to the total population of 
 far more than two to one.* The conditions are 
 precisely the same in the most industrial state 
 of Germany, namely. Saxony. There from 
 1879 to 1894 th^ number of persons assessed 
 for income tax was as follows : — 
 
 Income. 
 I 
 
 Up to 40 .. 
 40 to 80 ... 
 
 1897 
 
 1894. 
 
 INCREASE 
 
 Absolute. Per cent. 
 
 ... 828686 ... 972257 ... 143571 •■• 17-3 
 ... 165362 ... 357974 ... 192612 ... 116.4 
 
 Proletarian incomes 994048 . 
 
 80 to 165 61810 
 
 165 to 480 24072 
 
 480102700 4683 
 
 Over 2700 238 , 
 
 I33023I .. 
 
 . 336183 .. 
 
 • .33-8 
 
 , 106136 .. 
 
 • 44326 .. 
 
 . 71-6 
 
 . 41890 .. 
 
 . 17818 .. 
 
 • 74-0 
 
 . 10518 .. 
 
 ■ 5835 •• 
 
 ■ 154-4 
 
 886 .. 
 
 648 .. 
 
 . 272.0 
 
 Total 
 
 1084851 ...1489661 ...average... 37.3 
 
 * The demonstrative value of the Prussian figures has 
 been disputed on the ground that the principles of assess- 
 ment had been considerably changed between 1854 and 
 the end of the century. That this fact reduces their force 
 of demonstration I have at once admitted. But let us 
 take the figures of the Prussian income tax for 1892, 
 the first year after the reform of taxation of 189 1, and 
 for 1907 where the same system ruled. There we get 
 the following picture : — 
 
 Assessed Incomes. 
 
 £ 
 
 150 to 300 . 
 
 300 to 1525 . 
 
 1525 to 5000 . 
 
 5000 and over 
 
 189Z. 
 
 204714 
 
 103730 
 
 6665 
 
 1,780 
 
 1907. 
 
 387247 
 
 151574 
 17109 , 
 3.561 
 
 INCREASE 
 
 Absolute. Per cent. 
 
 172533 • 
 47847 . 
 10444 ■ 
 1,781 
 
 84-3 
 46.1 
 
 156-7 
 100. 
 
 The increase of the population was slightly over 20 per 
 cent. We see the whole section of the well-to-do go on 
 quicker than the population, and the quickest rate is- not 
 in the group of the high magnates, but in that of the simply 
 easy classes. As far as fortunes are concerned, there 
 were, in 1895 (the first year of the tax on fortunes), 
 13,600 with ;^25,ooo and over ; in 1908 this number was 
 in round figures 21,000, an increase of over 50 per cent. 
 This shows how the capitalist clan grows. 
 
48 
 
 The two capitalist classes, those with incomes 
 above ;^48o, show comparatively the greatest 
 increase. 
 
 Similarly with the other separate German 
 states. Of course, not all the recipients of 
 higher incomes are "proprietors," i.e., have 
 unearned incomes ; but one sees that this is the 
 case to a great extent because in Prussia for 
 1895-6, 1,152,332 persons with a taxable net 
 amount of capital property of over ;^300 were 
 drawn upon for the recruiting tax. Over half 
 of them, namely, 598,063, paid taxes on a net 
 property of more than ;^i,ooo, and 385,000 on 
 one of over ;^ 1,600. 
 
 \lt is thus quite wrong to assume that the 
 present development of society shows a relative 
 or indeed absolute diminution of the number of 
 the members of the possessing classes. Their 
 number increases both relatively and absolutely. 
 If the activity and the prospects of social 
 democracy were dependent on the decrease of 
 the " wealthy," then it might indeed lie down 
 to sleep.* But the contrary is the case. The 
 prospects of socialism depend not on the de- 
 crease but on the increase of social wealth. 
 / Socialism, or the social movement of modern 
 'times, has already survived many a superstition, 
 it will also survive this, that its future depends 
 on the concentration of wealth or, if one will 
 put it thus, on the absorption of surplus valine 
 by a diminishing group of capitalist mammothg} 
 
 * Karl Kautsky at the Stuttgart Congress of the 
 German social democracy against the remark in my letter 
 that the capitalists do increase and not decrease. 
 
( Whether the social surplus produce is ac- 
 cumulated in the shape of monopoly by 10,000 
 persons or is shared up in graduated amounts 
 among half-a-million of men makes no difference 
 in principle to the nine or ten million heads of 
 families who are worsted by this transaction. 
 Their struggle for a more just distribution or 
 for an organisation which would include a more 
 just distribution is not on that account less 
 justifiable and necessary. On the contrary, 
 it might cost less surplus labour to keep a fewi 
 thousand privileged persons in sumptuousness^ 
 than half-a-million or more in wealthy 
 
 If society were constituted or had developed 
 in the manner the socialist theory has hitherto 
 assumed, then certainly the economic collapse 
 would be only a question of a short span of 
 time. Far from society being simplified as 
 to its divisions compared with earlier times, it 
 has been graduated and differentiated both in 
 respect of incomes and of business activities. 
 
 And if we had not before us the fact proved 
 empirically by statistics of incomes and trades 
 it could be demonstrated by purely deductive 
 reasoning as the necessary consequence of 
 modern economy. 
 
 (what characterises the modern mode of pro- 
 duction above all is the great increase in the 
 productive power of labour. The result is a 
 no less increase of production — the production 
 of masses of commodities. Where are these 
 riches? Or, in order to go direct to the heart 
 of the matter : where is the surplus product 
 that the industrial wage earners produce above 
 
 ?■■' 
 
so 
 
 their own consumption limited by their wages ?) 
 If the " capitalist magnates " had ten times as 
 large stomachs as popular satire attributes to 
 them, and kept ten times as many servants as 
 they really have, their consumption would only 
 be a feather in the scale against the mass of 
 yearly national product — for one must realise 
 that the capitalist great industry means, above 
 all, production of large quantities. It will be 
 said that the surplus production is exported. 
 Good, but the foreign customer also pays 
 finally in goods only. In the commerce of the 
 world the circulating metal, money, plays a 
 diminishing rdle. The richer a country is in 
 capital, the greater is its import of commodities, 
 for the countries to which it lends money can 
 as a rule only pay interest in the form of 
 commodities.* 
 
 ^VVhere then is the quantity of commodities 
 which the magnates and their servants do not 
 consume? If they do not go in one way or 
 another to the proletarians they must be caught 
 up by other classes. Either a relatively growing 
 decrease in the number of capitalists and an 
 increasing wealth in the proletariat, or a 
 numerous middle class — these are the only 
 alternatives which the continued increase of 
 production allows^ Crises and unproductive 
 expenses for armies, etc., devour much, but 
 still they have latterly only absorbed a frac- 
 tional part of the total surplus product. (j.t the 
 
 * England receives its outstanding interest paid in the 
 form of surplus imports to the value of ;^ioo,ooo,ooo ; 
 the greater part of which are articles of consumption. 
 
SI 
 
 working class waits till " Capital " has put the 
 middle classes out of the world it might really 
 have a long nap. " Capital " would expro- 
 priate these classes in one form and then bring 
 them to life again in another. It is not ' ' Capi- 
 tal " but the working class itself which has the 
 task of absorbing the parasitic elements of the 
 social body^ 
 
 As for the proposition in my letter to the 
 Stuttgart Congress thatfthe increase of socialA 
 wealth is not accompanied by a diminishing 
 number of capitalist magnates but by an in- 
 creasing number of capitalists of all degrees^aj 
 leading article in the socialist New York VolRs- 
 zeitung taxes me with its being false, at least, 
 as far as concerns America, for the census of 
 the United States proves that production there 
 is under the control of a number of concerns 
 "diminishing in proportion to its amount." 
 What a reputation ! The critic thinks^he can 
 disprove what I assert of the division of the 
 classes by pointing to the divisions of indus- 
 trial undertakings. It is as though someone 
 said that the number of proletarians was 
 shrinking in modern society because where the 
 individual workman formerly stood the trade 
 union stands to-day. 
 
 Karl Kautsky also — at the time in Stuttgart 
 — took up the sentence just mentioned and 
 objected that if it were true that the capitalists 
 were increasing and not the propertyless classes, 
 then capitalism would be strengthened and we 
 socialists indeed should never attain our goal. 
 But the word of Marx is still true :" Increase of 
 
52 
 
 capital means also increase of the proletariat." 
 That is the same confusion of issues in 
 another direction and less blunt. I had no- 
 where said that the proletarians did not increase. 
 I spoke of men and not of entrepreneurs when 
 I laid emphasis on the increase of capitalists. 
 But Kautsky evidently was captured by the 
 concept of " Capital," and thence deduced 
 that a relative increase of capitalists must 
 needs mean a relative decrease of the proletariat, 
 which would contradict our theory. And he 
 maintains against me the sentence ,of Marx 
 which I have quoted. 
 
 I have elsewhere quoted a proposition of 
 Marx* which runs somewhat different from the 
 one quoted by Kautsky. The mistake of 
 Kautsky lies in the identification of capital 
 with capitalists or possessors of wealth. But 
 I would like, besides, to refer Kautsky to some- 
 thing else which weakens his objection. And 
 that is what Marx calls the organic development 
 of capital. If the composition of capital 
 changes in such a way that the constant capital 
 increases and the variable decreases, then in the 
 businesses concerned the absolute increase of 
 capital means a relative decrease of the prole- 
 tariat. But according to Marx that is just 
 the characteristic form of modern evolution. 
 ^Applied to capitalist economy as a whole, it 
 really means absolute increase of capital, rela- 
 tive decrease of the proletariat."\ 
 
 * Capital, I., chapter xxiii., par. 2, where it is said 
 that the number of capitalists grows " more or less " 
 through partitions of capital and offshoots of the same, a 
 fact later on left wholly out of account by Marx. 
 
53 
 
 The workers who have become superabun- 
 dant through the change in the organic composi- 
 tion of capital find work again each time only in 
 proportion to the new capital on the market that 
 can engage them. So far as the point which 
 Kautsky debates is concerned, my proposition 
 is in harmony with Marx's theory. If the num- 
 ber of workers increase, then capital must 
 increase at a relatively quicker rate — that is the 
 consequence of Marx's reasoning. I think 
 Kautsky will grant that without further demur.* 
 
 So far we are only concerned as to whether 
 the increased capital is capitalist property only 
 when employed by the undertaker or also when 
 held as shares in an undertaking. 
 
 If not, the first locksmith Jones, who carries 
 on his trade with six journeymen and a few 
 apprentices would be a capitalist, but Smith, 
 living on his private means, who has several 
 hundred thousands of marks in a chest, or his 
 son-in-law, the engineer Robinson, who has a 
 greater number of shares which he received as 
 a dowry (not all shareholders are idle men) 
 would be members of the non-possessing class. 
 The absurdity of such classification is patent. 
 Property is property, whether fixed or personal. 
 The share is not only capital, it is indeed capital 
 in its most perfect, one might say its most 
 refined, form. It is the title to a share of the 
 surplus product of the national or world-wide 
 
 * Note to the English edition. — I am sorry to say 
 Kautsky did not frankly admit his error. He carped at 
 the statistics I have adduced and replied finally that 
 indeed the idle capitalists increased, as if I had repre- 
 sented the capitalist class as a class of workers. 
 
54 
 
 economy freed from all gross contact with the 
 pettinesses of trade activities — dynamic capital, 
 if you like. And if they each and all lived only 
 as idle "rentiers," the increasing troops of 
 shareholders — we can call them to-day armies 
 of shareholders — even by their mere existence, 
 the manner of their consumption, and the num- 
 ber of their social retainers, represent a most 
 influential power over the economic life of 
 society. The shareholder takes the graded 
 place in the social scale which the captains of 
 industry used'to occupy before the concentration 
 of businesses. 
 
 Meanwhile there is also something to be said 
 about this concentration. Let us look at it 
 more closely. 
 
 (c) The Classes of Establishments in the 
 Production and Distribution of Social 
 Wealth. 
 
 General statistics are wanting of the classes 
 of enterprises in industry as regards England 
 which is considered the most advanced of the 
 European countries in capitalist production. 
 They' exist only for certain branches of produc- 
 tion placed under the Factory Laws and for 
 individual localities. 
 
 In the factories and workshops coming under 
 the Factory Laws there were engaged, accord- 
 ing to the Factory Inspector's report for 1S96, 
 altogether 4,398,983 persons.* That is not 
 
 * [It would serve no good purpose to give more recent 
 statistics, and it is impossible in some of the cases given 
 
55 
 
 quite half the number given as a^ctively engaged 
 in industry according to the census of 1891. 
 The number in the census, omitting the trans- 
 port trade, is 9,025,902. Of the 4,626,919 
 remaining persons, we can reckon a fourth to 
 a third as tradesmen in the branches of produc- 
 tion referred to, and in some medium-sized 
 and large businesses which do not come under 
 the Factory Laws. 
 
 There remain in round numbers 3,000,000 
 employees and small masters in minute 
 businesses. The 4,000,000 workers under the 
 Factory Laws were distributed among 160,948 
 factories and workshops which yields an average 
 of twenty-seven to twenty-eight workers per 
 establishment.* 
 
 If we deal with factories and workshops 
 separately we get 76,297 factories with 
 3,743,418 employees and 81,669 workshops with 
 655,565 employees, on the average forty-nine 
 workers to a factory and eight to a registered 
 workshop. 
 
 The average number of forty-nine workers 
 to a factory already shows what the closer ex- 
 amination of the tables of the report confirms, 
 that at least two-thirds of the businesses regis- 
 tered as factories belong to the category of 
 
 to follow exactly Mr. Bernstein's figures and so make 
 accurate comparisons. Moreover, our Home Office does 
 not now publish statistics compiled in the same way as 
 in 1896. — Ed.J 
 
 * The particulars of 1,931 registered factories and 
 5,624 workshops had not come in when the report was 
 drawn up. They would have somewhat diminished the 
 ratio of workers to a business. 
 
S6 
 
 medium-sized businesses with six to fifty workers 
 so that at the most 20,000 to 25,000 businesses 
 of fifty workers and more remain which may 
 represent, on the whole, about 3,000,000 
 workers. Of the 1,171,990 persons engaged 
 in the transport trade only three-quarters can 
 be considered at the most as belonging to large 
 enterprises. If we add these to the foregoing 
 categories we get a total for the workers and 
 the auxiliaries of the large industries of between 
 3^ and 4 millions, and against these stand 5^ 
 millions of persons engaged in medium and 
 small businesses. CThe " workshop of the 
 world " is, accordingly, far from being, as is 
 thought, in the stage of containing only large 
 industries. Enterprises show the greatest 
 diversity in size also in the British Empire, and 
 no class of any size disappears from the scale. ^ 
 If we compare with the above figures those 
 of the German industrial census of 1895, '^^ ^^^ 
 that the latter, on the whole, shows the same 
 picture as the English. The great industries 
 occupied nearly the same position in relation to 
 production in Germany in 1895 as in England 
 in 1891. In Prussia in 1895, 38 per cent, of 
 the industrial workers belonged to the large 
 industries. The development of large under- 
 takings has been accomplished there and in the 
 rest of Germany with extraordinary speed. If 
 
 * German, workmen who have emigrated to England 
 have repeatedly expressed their astonishment to me at 
 the dispersion of enterprises which they met in the wood, 
 metal and manufacturing industries of this country. The 
 present figures in the cotton industry show only a 
 moderate increase in the concentration of establishments 
 since the time when Karl Marx wrote. 
 
57 
 
 certain branches of industry (among them the 
 textile) are in this respect still behind England, 
 others (machines and implements) have reached 
 the English position on the average, and some 
 (the chemical and glass industries and certain 
 branches of the printing trades, and probably 
 also electric engineering) have overtaken it. 
 Still the great mass of persons engaged in 
 industry belong also in Germany to small and 
 medium undertakings, Of the loj million 
 persons" engaged in industry in 1895 something 
 over 3 millions were found in large under- 
 takings, 2^ millions in medium-sized under- 
 takings (6 to 50 persons), and 4f millions in 
 small ones. Master artisans still numbered ij 
 millions. In five trades their number, as against 
 that of 1882, had increased absolutely and 
 relatively (to the increase of population), in nine 
 only absolutely, and in eleven it had declined 
 absolutely and relatively.* 
 
 * See R. Calwer, "The Development of Handicraft," 
 Neue Zeit xv., 2, p. 597. 
 
 The figures of the imperial census of 1907 are not yet 
 known so far as the development in regard to size is 
 concerned. But the figures for Prussia are known, and 
 they can be taken as a fair average for the whole Empire. 
 They show for trade respectively, industry and commerce 
 together (without railways, post and telegraphs) the 
 following figures : — 
 
 Establishments. 
 Quite small (l person only) 
 
 Small 2-S persons) 
 
 Medium (6-so persons) 
 
 Great (S 1-500 persons) 
 
 Very great (soi-1,000 persons) ... 
 Giant (1,001 persons and over ... 
 
 1.743.336 >.89S>497 5,876,083 8,3}2,9ii 
 
 A remarkable movement towards the great establish- 
 ments, and often two or more of the establishments 
 
 Numbers 
 
 Persons! 
 
 smployed 
 
 189s. 
 
 1907. 
 
 189s. 
 
 1907. 
 
 ".029.954 
 
 955,707 
 
 I 029,954 
 
 9S 5,707 
 
 593,884 
 
 767,200 
 
 1,638,205 
 
 2,038,236 
 
 
 154,330 
 
 1.390,745 
 
 2,109,164 
 
 10,117 
 
 17,287 
 
 1,217.085 
 
 2,095,065 
 
 380 
 
 602 
 
 261,507 
 
 424,587 
 
 191 
 
 371 
 
 338.S8S 
 
 710,253 
 
S8 
 
 In France industry still keeps behind agri- 
 culture in numbers of workpeople employed. 
 According to the census of April 17th, 1894, 
 it represented only 25.9 per cent, of the popula- 
 tion, and agriculture nearly twice as much — 
 namely, 47.3 per cent. Austria shows a similar 
 ratio, where agriculture takes 55.9 per cent, of 
 the population and industry 25.9 per cent. In 
 France there were one million persons working 
 for themselves to 3.3 million employees, and 
 in Austria 600,000 of the former to 2J million 
 workmen and day labourers. Here the ratio is 
 also very much the same. Both lands show a 
 series of highly-developed industries (textile, 
 mining, building, etc.), which, with respect to 
 the size of the industry, compete with the most 
 advanced countries, but which are only a 
 portion of the industrial life-work of the nation. 
 
 Switzerland has, with 127,000 persons work- 
 ing for themselves, 400,000 employees. The 
 United States of America, which the contributor 
 to the. New York Volkseeitung above referred 
 to says is the most developed capitalist country 
 in the world, certainly had, according to the 
 census of 1890, a comparatively high average 
 of workers per establishment — namely, 3J 
 million workers to 355,415 industrial establish- 
 ments, i.e., 10 to I. But the home and small 
 industries are wanting here, just as in England. 
 
 enumerated are only departments of one and the same 
 enterprise. The process of industrial and commercial con- 
 centration is most obvious. But that it does not mean 
 the disappearance of the small enterprise is no less 
 obvious. It is only the quite small enterprise — the garret 
 workers, etc. — that as a group shows a decrease. 
 
59 
 
 If one takes the figures of the Prussian indus- 
 trial statistics from the top downwards, one 
 gets almost exactly the same average as that of 
 the American census. And if one studies more 
 closely the Statistical Abstract of the United 
 States, one comes upon a great number of 
 manufacturing concerns with, on an average, 
 five or fewer workers to the establishment. On 
 the very first page we have 910 manufactories 
 of agricultural implements with 30,723 workers, 
 35 ammunition factories with 1,993 workers, 
 251 manufactories of artificial feathers and 
 flowers with 3,638, 59 manufactories of artificial 
 limbs with 154, and 581 sail-cloth and awning 
 factories with 2,873 workers. 
 
 Tlf the continual improvement of technical 
 methods and centralisation of businesses in an 
 increasing number of branches of industry is 
 a fact whose significance scarcely any crazy 
 reactionaries can hide from themselves, it is a 
 no less well-established fact that in a whole 
 series of branches of industry small and medium- 
 sized undertakings appear quite capable of 
 existing beside the large industries. In industry 
 there is no development according to a pattern 
 that applies equally to one and all branches^ 
 Businesses carried on throughout according to 
 routine, continue as small and medium-sized 
 undertakings, whilst branches of technical 
 trades which were thought to be secured for 
 small businesses are absorbed for ever one fine 
 day by a large organisation. 
 
 A whole series of circumstances allows the 
 continuance and renewal of small and medium 
 
6o 
 
 enterprises. They can be divided into three 
 groups. 
 
 First, a great number of trades or branches 
 of trades are nearly equally adapted for small 
 and medium undertakings as for large enter- 
 prises, and the advantages which the latter have 
 over the former are not so important that they 
 can outweigh the peculiar advantages of the 
 smaller home industries. This is, as everyone 
 knows, the case, amongst others, with different 
 branches of wood, leather, and metal work. 
 Or, a division of labour is found where the large 
 industry carries out one-half and three-quarters 
 of the manufacture and when the finishing pro- 
 cesses are done by smaller enterprises. 
 
 Secondly, when the product must be made 
 accessible to the consumer, small establish- 
 ments are, in many cases, favourable to its 
 manufacture, as is shown most clearly in 
 bakeries. If only the technical side was con- 
 cerned, baking would long ago have been 
 absorbed by the large industries, for the many 
 bread factories yielding a good profit show that 
 they can be carried on with good results. But 
 in spite of, or beside, them and the cake 
 factories which are gradually winning a 
 market, the small and medium-sized bakeries 
 hold their ground owing to the advantage 
 they offer for trade with consumers in their 
 vicinity. The master bakers are sure of their 
 lives for some time to come as far as they 
 have to reckon only with capitalist under- 
 takings. Their increase since 1882 has 
 certainly not kept step with the increase of 
 
6i 
 
 population, but is still worth mentioning 
 (77,609 as against 74,283).* 
 
 But baking is only an extreme example. For 
 a whole series of trades — namely, where produc- 
 tive and service-performing labour are mixed — r 
 the same thing holds good. We will mention 
 here the farrier and wheelwright trades. The 
 American census shows 28,000 farrier and 
 wheelwright businesses with a total of 50,867 
 persons, of which just one-half are masters. 
 The German trade statistics show 62,722 black- 
 smiths and farriers ; and it will certainly be a 
 good while before the automatic vehicle driven 
 by steam power, etc., will extinguish their 
 spark of life in order to breathe life into new 
 small workshops, as everyone knows bicycles 
 have done. Similarly with the trades of tailors, 
 shoemakers, saddlers, carpenters, carpetmakers, 
 watchmakers, etc., where work for customers, 
 and, in varying degree, repairing or shop- 
 keeping, will keep alive independent existences 
 of which certainly many, but not all, by any 
 means, represent only proletarian incomes. 
 
 Last, but not least, the large industry itself 
 gives life to smaller and medium trades partly 
 by production on a large scale producing a corre- 
 sponding cheapening of materials of work 
 (auxiliary materials, half-manufactured goods), 
 partly by the liberating of capital, on the one 
 hand, and the "setting free" of workers on the 
 other. In great and small amounts new capital is 
 
 * In Prussia the increase from 1895 to 1907 was from 
 52,045 to 62,985, over 20 per cent. ; whilst the population 
 increased only by 19 per cent. 
 
63 
 
 always entering the market seeking utilisation, 
 and the demand on the market for new goods 
 increases steadily with the wealth of the com- 
 munity. Here the shareholders mentioned 
 earlier play no small part. The market could 
 not, in fact, live on the handful of millionaires 
 even if the "hand " counted some thousand 
 fingers. But the hundreds of thousands of rich 
 and well-to-do have something to say to it. 
 Nearly all the articles of luxury for these classes 
 are, in the beginning — and very many also later 
 on — manufactured in small and medium busi- 
 nesses, which, however, can also be capitalistic 
 businesses, according as they work upon dear 
 materials and use costly machines (manufac- 
 ture of jewellery, work in fine metals, art 
 embroidery). It is only later that the large 
 industry (when it does not itself take over the 
 articles referred to), by cheapening the materials 
 of work, " democratises " the one or the other 
 new luxury. 
 
 In spite of the continued changes in the 
 grouping of industries and the internal organ- 
 isation of the establishments, we have this 
 picture on the whole to-day : that the large 
 industry does not continuously absorb the 
 smaller and medium industries, but that it is 
 growing up beside them. Only the very small 
 enterprises decline relatively and absolutely.* 
 But as regards the small and medium industries 
 they do increase, as is shown for Germany by 
 the following figures for employees in trades : 
 
 * This is confirmed by the new Prussian statistics 
 quoted in a former note. 
 
63 
 
 Increase 
 1882. 189s. Percent, 
 
 Small businesses (1-5 persons) 2,457,950 3,056,318 24'} 
 
 Small medium businesses (6-10 persons) 500,097 833,409 66*6 
 
 Greater medium businesses (11-50 persons) 891,623 1,620,848 8i'8 
 
 The population increased in the same period 
 by 13-5 per cent. only. 
 
 Although in the interval treated the large 
 industries increased their armies at a still 
 greater rate — ^by 88.7 per cent — that has only 
 meant in isolated cases the total absorption of 
 the small businesses. In fact, in many cases 
 no — or no more — competition takes place 
 between large and small enterprises (think of 
 the great works for making machinery and 
 bridges). The example of the textile industry, 
 which is commonly brought into our literature, 
 is in many respects misleading. The increase 
 of productivity which the mechanical mule 
 represents over the old spindle has only recurred 
 now and again. Very many large undertakings 
 are superior to small or medium businesses, not 
 on account of the higher productivity of the 
 labour employed, but simply from the size of the 
 undertaking (building of ships), and they leave 
 the spheres of business of the small industries 
 quite, or, to a great extent, untouched. He 
 who hears that Prussia in the year 1895 saw 
 nearly double as many workers occupied in 
 large industries as in 1895 ; that these in 1882 
 were only 28.4 per cent., but in 1895 were 38 per 
 cent, of the total number employed in all trades, 
 might easily fancy that small industries would 
 soon be a thing of the past, and that they had 
 played their part in the social ecomony. The 
 figures quoted show that the rapid extension 
 
64 
 
 and expansion of large industries represent 
 only one side of social development. 
 
 As in industry so in commerce. In spite of 
 the shooting up of the large warehouses the 
 medium and small commercial businesses main- 
 tain their footing. We are, of course, not 
 concerned here with denying the parasitic 
 element in commerce, particularly as regards 
 the so-called small retail business. Neverthe- 
 less, it must be observed that also with regard 
 to that, much exaggeration has crept in. 
 Wholesale production and the steadily increas- 
 ing intercourse all over the world are always 
 throwing greater quantities of commodities on 
 the market which in some way or other must be 
 brought to the consumer. Who would deny 
 that this could take place with less expenditure 
 of labour and cost than by the present retail 
 trade? But as long as it does not take place 
 this kind of trade will persist. And just as it 
 is an illusion to expect from the large industries 
 that they will absorb in a short time the small 
 and medium industries, so is it also Utopian to 
 expect from the capitalistic warehouses an 
 absorption to a considerable extent of medium- 
 sized and small shops. They injure individual 
 businesses and here and there temporarily bring 
 the whole of the small trades into confusion. 
 But after a time the latter find a way of com- 
 peting with the large shops and of making use 
 of all the advantages which local associations 
 offer them. Fresh specialising and fresh com- 
 bining of businesses are begun, new forms and 
 methods of carrying on business are started, 
 
6s 
 
 The capitalistic warehouse is far oftener a 
 product of the great increase of the abundance 
 of goods than an implement of the annihilation 
 of a parasitic small trade. It has had more 
 effect in rousing the latter from its routine and 
 breaking it of certain monopolist customs than 
 in exterminating it. 
 
 The number of shop businesses increases 
 steadily; it rose in England between 1875 and 
 1886 from 295,000 to 366,000. The number of 
 persons employed in commerce rose still more. 
 As the English statistics under this heading 
 were taken on a different basis from those of 
 1881,* we will take the figures from the Prussian 
 statistics. 
 
 There were in Prussia in shops and carrying 
 trades (excluding railways and post office busi- 
 ness) : — 
 
 
 
 Increase 
 
 
 188s. 
 
 1895. Per cent. 
 
 businesses with 2 and fewer assistants 
 
 411,509 
 
 467,656 13-6 
 
 „ „ 3-5 assistants 
 
 176,867 
 
 342,112 93-A 
 303,078 92-6 
 
 „ „ 6-50 „ 
 
 157.328 
 
 „ „ 51 assistants and more 
 
 25,619 
 
 62,056 142-2 
 
 771,323 1,174,902 
 
 The increase is proportionately the greatest in 
 the large businesses, but these do not represent 
 much more than 5 per cent, of the whole. It is 
 not the large businesses that offer the most 
 deadly competition to the small ones ; the latter 
 provide it among themselves. But in proportion 
 there are not very many corpses. And the scale 
 of businesses remains unhurt in its composition. 
 
 * As far as appears from them, they show an increase 
 of over 50 per cent, in the last decade. 
 
 F 
 
66 
 
 The small medium-sized shops show the 
 greatest increase. 
 
 finally, when we come to agriculture, as far 
 as concerns the size of separate undertakings, 
 we meet, in our times, with a movement all over 
 Europe, and partially in America, which appar- 
 ently contradicts everything that the socialistic 
 theory has hitherto advanced. Industry and com- 
 merce showed only a slower movement upwards 
 in large undertakings than was assumed, but 
 agriculture shows a standing-still or a direct 
 retrogression in regard to the size of holdingsA 
 As regards Germany, the census of occupa- 
 tions taken in 1895, as against 1882, shows the 
 relatively greatest increase in the group of 
 peasant medium-sized holdings (5 to 20 hec- 
 tares) — ^namely, 8 per cent. — ^and still greater is 
 the increase in the area covered by the whole of 
 them — namely, 9 per cent. The peasants' small 
 holdings following next below them {2 to 5 
 hectares) show the next greatest increase : 
 3.5 per cent, increase in the number of holdings 
 and 8 per cent, increase in extent of land held. 
 The very small holdings (allotments) (under 
 2 hectares) have an increase of 5.8 per cent, in 
 number and 12 per cent, in land occupied, yet 
 the portion of this land used for agricultural 
 purposes shows a diminution of i per cent. 
 The holdings already partially capitalistic (20 
 to 100 hectares) show an increase of not quite 
 I per cent. , which falls to the land cultivated as 
 forest, and an increase of not quite J per cent, 
 is shown by the large holdings (more than 100 
 hectares). 
 
67 
 Here are the figures referred to for 1895 : — 
 
 No. of hectares used Total 
 
 for agricultural extent in 
 
 Kind of Holding. No. of Holdings, purposes. hectares. 
 
 Very small {l hectares and under) ... 3,Z36,367 1,808,444 2,415,414 
 
 Small peasants' holdings (2-5 hectares) 1,016,318 3,285,984 4,142,071 
 
 Medium „ „ (j-jo hectares) 998,804 9,72r,875 12,537,660 
 
 Large „ „ {20-100 hectares) 281,767 9,869,837 13,157,201 
 
 Large holdings (100 hectares & upwards) 25,061 7,831,801 11,031,896 
 
 Over two-thirds of the total area fall under 
 the three categories of peasant farms, about 
 one-third under large holdings. In Prussia the 
 proportion of peasant holdings is even more 
 favourable ; they occupy nearly three-fourths of 
 the agricultural area — 22,875,000 out of 
 32,591,000 hectares. 
 
 If we turn from Prussia to its neighbour, 
 Holland, we find : — 
 
 
 Holdings 
 
 Increase or 
 
 
 Area of Holding. 
 
 1884. 1893. 
 
 decrease. 
 
 Per cent. 
 
 1-5 hectares ... 
 
 66,842 777.767 
 
 + 10,925 
 
 + l6-2 
 
 5-10 
 
 31,552 34.199 
 
 +2,647 
 
 +S'4 
 
 10-50 „ 
 
 48,278 51,940 
 
 
 + 7-6 
 
 Over 50 hectares 
 
 3,554 3.510 
 
 -44 
 
 — 1-2 
 
 Here the large holdings have actually 
 decreased and the small medium peasants' hold- 
 ings have considerably increased.* 
 
 In Belgium, according to Vandervelde,t the 
 ownership of the land as well as the occupation 
 of the soil has yielded to a continued decentral- 
 isation. The last general statistics show an 
 increase of owners of land from 201,226 in the 
 year 1846 to 293,524 in the year 1880; an in- 
 crease also of tenants of land from 371,320 to 
 616,872. The total cultivated agricultural area 
 of Belgium consisted in 1880 of not quite 
 
 * See W. H. Vliejen : Das Agrarprogramm der nieder- 
 Idndischen Sozialdemokratie, Neue Zeit xvii., i, p. 75. 
 
 t Der Agrasozialismus in Belgien, Neue Zeit xv. i, 
 P- 7Sa- 
 

 Holdings. 
 2,157,767 
 
 Under I hectare 
 
 l-io hectares 
 
 2,635,030 
 
 10-40 „ 
 
 7»7,o88 
 
 40-100 „ 
 
 113,385 
 
 lOO-JOO „ 
 
 20,644 
 
 joo-soo „ 
 
 7>942 
 
 Over 500 „ 
 
 217 
 
 68 
 
 2,000,000 hectares, of which over one-third 
 were cultivated by their owners. The division 
 of agricultural allotments reminds one of the 
 Chinese agrarian conditions. 
 
 France in the year 1882 had the following 
 agricultural holdings : — 
 
 Extent of Holding. 
 
 1,083,833 hectares 
 11,366,274 „ 
 14.845.6S0 „ 
 
 22,266,104 „ 
 
 Of the holdings between 40 and 100 hectares 
 there are in round numbers 14 million hectares, 
 and of those over 200 hectares 8,000,000, so 
 that, on the whole, the large holdings represent 
 between a fifth and a sixth of the agriculturally- 
 cultivated area. The smaller, medium, and large 
 peasants' holdings cover nearly three-quarters 
 of French soil. From 1862 to 1882 the holdings 
 of 5 to 10 hectares had increased by 24 per cent ; 
 those between 10 and 40 acres by 14.28 per cent. 
 The agricultural statistics of 1892 show an 
 increase of the total number of holdings of 
 30,000, but a decrease in the last-named category 
 of 33,000, which shows a further sub-division 
 of holdings of land. 
 
 But how does it stand in England, the classic 
 land of large ownerships of land and of capital- 
 istic farming of the soil? We know the lists 
 of mammoth landlords which from time to time 
 appear in the press as an illustration of the con- 
 centration in the ownership of land in England, 
 and we know the passage in Capital where Marx 
 says that the assertion of John Bright that 150 
 
69 
 
 landlords own the half of British land and 12 the 
 half of Scottish, has not been denied.* Now, 
 though the land of England is centralised by 
 monopolists, it is not so to the extent that John 
 Bright pronounced. According to Brodrick's 
 English Land and English Landlords there were 
 out of the 33 millions of acres of land in England 
 and Wales entered in Domesday Book, 14 
 millions, in round numbers, the property of 
 1,704 landlords with 3,000 acres each or more. 
 The remaining 19 million acres were divided 
 among 150,000 owners of one acre and more, 
 and a large number of owners of small plots of 
 land. Mulhall gave, in 1892, for the whole of 
 the United Kingdom, 176,520 as the number of 
 owners of more than 10 acres of land (altogether 
 ten-elevenths of the area). How is this soil 
 cultivated? Here are the figures of 1885 and 
 1895 for Great Britain (England, with Wales 
 and Scotland, but without Ireland), changed 
 into hectares for the sake of more convenient 
 comparison, t These were enumerated : — 
 
 189s. Increase or decrease. 
 135481 +2,526 
 
 66,625 + 1,910 
 
 8l,Z4S +1,672 
 
 13,568 +307 
 
 5,219 —270 
 
 Here, too, is a decrease of the large and the 
 very large holdings and an increase of the small 
 and medium-sized ones. 
 
 The figures, nevertheless, tell us nothing of 
 
 * Capital, I., 4th ed., p. 615. 
 
 t According to the ratio of i acre = 40 acres, which 
 is not quite exact, but which appears admissible for the 
 purpose of comparison. The numbers are taken from the 
 Blue Book on Agricultural Holdings. 
 
 Holdings, 
 
 188S. 
 
 2-20 hectares ... 
 
 232,955 
 
 20-40 „ 
 
 64,715 
 
 40-120 „ 
 
 79.573 
 
 120-200 „ 
 
 13,875 
 
 Over 200 „ 
 
 5489 
 
7° 
 
 the cultivated area. Let us complete them by 
 the figures of the different areas coming under 
 the various classes of holdings. They make a 
 positively bewildering picture. There were in 
 Great Britain in 1895 : — 
 
 
 
 Percentage of 
 
 
 Acres. 
 
 Total area. 
 
 Holdings under a hectares* ... j66,79i 
 
 ri3 
 
 Holdings of 2-5 
 
 1,667,647 
 
 S">2 
 
 5-2° 
 
 2,864,976 
 
 874 
 
 20-40 
 
 4,885,203 
 
 15-0 
 
 „ 40-120 
 
 13,875,914 
 
 42'S9 
 
 „ 120-200 
 
 5,113,94s 
 
 157 
 
 „ 200-400 
 
 , ... 3,001,184 
 
 9-42 
 
 „ over 40Q 
 
 801,852 
 
 246 
 
 According to this 27 to 28 per cent, of the agri- 
 cultural land of Great Britain is in large hold- 
 ings, and only 2.46 per cent, is in very large 
 holdings. On the other hand, over 66 per cent, 
 is in medium and large peasants' holdings. 
 The proportion of the peasant holdings (where, 
 nevertheless, capitalistic large peasant holdings 
 predominate) is greater in England than in the 
 average in Germany. Even in England proper 
 the holdings between 5 and 120 hectares com- 
 prise 64 per cent, of the cultivated area, and 
 nearly 13 per cent, of the area only is in holdings 
 of over 200 hectares.* In Wales, quite apart 
 from small allotments, 92 per cent., in Scotland 
 72 per cent, of the holdings are peasant holdings 
 of between 2 and 100 hectares. 
 
 Of the cultivated area, 61,014 holdings with 
 
 * Of which 579, 133 plots come under i acre. 
 
 f [In 1907, 21.78 of all holdings in England were 
 between i and 5 acres, and only 3.95 holdings were over 
 300 acres. The same figures for Wales were 16.91 and 
 0.66 ; for Scotland 22.40 and 3.66. — Ed.] 
 
71 
 
 4.6 millions of acres of land were the property 
 of their cultivators, 19,607 holdings were partly 
 the property and partly leased, and 439,405 
 holdings only were on leased land. It is well 
 known that in Ireland the small peasant class or 
 small tenant class predominates. The same 
 holds good for Italy. 
 
 There can, then, be no doubt that in the whole 
 of Western Europe, as also in the Eastern 
 States of the United States, the small and 
 medium agricultural holding is increasing every- 
 where, and the large and very large holding 
 is decreasing. There is no doubt that the 
 medium holdings are often of a pronounced 
 capitalistic type. The concentration of the 
 enterprises is not accomplished here in the form 
 of annexing an ever greater portion of land to 
 the farm, as Marx saw in his time,* but actually 
 in the form of intensification of the cultivation, 
 changes in cultivation that need more labour 
 for a given area, or in the rearing, etc., of 
 superior cattle. It is well known that this is to 
 a large extent (not altogether) the result of the 
 competition between the agricultural states or 
 agricultural territories of Eastern Europe and 
 those over the seas. Also these latter will be 
 in a position for a good while yet to produce 
 corn and a number of other products of the soil 
 at such cheap prices that a substantial dis- 
 arrangement of the factors of development is 
 not to be expected from a change in this 
 respect. 
 
 * See Capital, I., 4th ed., p. 643, note. 
 
7» 
 
 Although the tables of statistics of income in 
 the most advanced industrial countries may 
 partly register the mobility, and with it the 
 transitoriness and insecurity, of capital in 
 modern economy, and although the incomes or 
 fortunes registered may be to an increasing 
 extent paper possessions which a vigorous puff 
 of wind could indeed easily blow away; yet 
 these rows of incomes stand in no fundamental 
 opposition to the gradation of economic unities 
 in industry, commerce, and agriculture. The 
 scale of incomes and the scale of establishments 
 show a fairly well-marked parallelism in their 
 divisions, especially where the middle divisions 
 are concerned. We see these decreasing 
 nowhere, but, on the contrary, considerably 
 increasing everywhere. What is taken away 
 from them from above in one place they supple- 
 ment from below in another, and they receive 
 compensation from above in one place for that 
 which falls from their ranks below, yf the 
 collapse of modern society depends on the dis- 
 appearance of the middle ranks between the 
 apex and the base of the social pyramid, if it is 
 dependent upon the absorption of these middle 
 classes by the extremes above and below them, 
 then its realisation is no nearer in England, 
 France, and Germany to-day than at any 
 earlier time in the nineteenth century) 
 (^But a building can appear outwardly un- 
 changed and substantial and yet be decayed if 
 the stones themselves or important layers of 
 stones have become rotten!) The soundness of 
 a business house stands the test of critical 
 
73 
 
 periods ; it remains, therefore, for us to investi- 
 gate what is the course of the economic crises 
 which are peculiar to the modern order of pro- 
 duction, and what consequences and reactions 
 are to be expected in the near future from them. 
 
 (d) The Crises and Possibilities of Adjust- 
 ment in Modern Economy. 
 
 ' ' The contradictions inherent in the move- 
 ment of capitalist society impress themselves 
 upon the practical bourgeoisie most strikingly 
 in the changes of the periodic cycle through 
 which modern industry runs, and whose 
 crowning point is the universal crisis." — 
 Marx, Preface to the second edition of 
 Capital. 
 
 In Socialist circles the most popular explana- 
 tion of economic crises is their derivation from 
 under-consumption. Friedrich Engels, how- 
 ever, has on several occasions combated this 
 idea sharply — most sharply, probably, in the 
 third part of the third chapter of the polemical 
 treatise against Duhring, where Engels says 
 that under-consumption by the masses may well 
 be "also a condition of crises," but that it 
 explains their presence to-day just as little as 
 their former absence. Engels illustrates this 
 by the conditions of the English cotton industry 
 in the year 1877, and declares it to be a strong 
 measure in the face of those conditions "to 
 explain the present total stagnation in the sale 
 of cotton yarns and textile fabrics by the under- 
 consumption of the English masses and not by 
 
74 
 
 the over-production of the English cotton manu- 
 facturers."* 
 
 But Marx himself has also occasionally pro- 
 nounced very sharply against the derivation of 
 crises from under-consumption. \' It is pure 
 tautology," he writes in the second volume of 
 Capital, ' ' to say that crises rise from a want of 
 consumers able to pay. '') If one wished to give 
 this tautology an appearance of greater reality 
 by saying that the working classes receive too 
 small a portion of what they produce, and that 
 the grievance would therefore be redressed if 
 they had a larger share, it can only be observed 
 that "the crises are each time preceded by a 
 period in which the workers' wages rise and the 
 working classes actually receive a relatively 
 greater share than usual of the yearly produce 
 destined for ponsumption. " It thus would 
 appear that capitalist production "includes 
 conditions independent of good or evil inten- 
 tions — conditions which only permit of tempo- 
 rarily relative prosperity for the working classes 
 and then always as a stormy bird of a crisis, "t 
 To which Engels adds in a footnote: "Ad 
 notam for the adherents of Rodbertus' theory 
 of crises." 
 
 A passage in the second part of the third 
 
 * Third edition, pp. 308, 309. [In a footnote to this 
 Engels remarks : "The explanation of crises by under- 
 consumption originated with Sismondi, and had with him 
 a certain justification." "Rodbertus," he says, "bor- 
 rowed it from Sismondi and Diihring copied it from 
 him." In the preface to the Poverty of Philosophy 
 Engels also argues in similar fashion against the theory 
 of crises put forth by Rodbertus.] 
 
 t Ibid., pp. 406, 407. 
 
75 
 
 volume of Capital stands in apparent contradic- 
 tion to all these statements. There Marx says 
 about crises: "The last reason for all social 
 crises always is the poverty and limitation of 
 consumption of the masses as opposed to the 
 impulse of capitalist production to develop the 
 productive forces, as though only the absolute 
 capacity for consumption of the community 
 formed their limit. ' '* That is not very different 
 from the Rodbertus' theory of crises, for with 
 him also crises are not occasioned simply by 
 under-consumption by the masses, but, just as 
 explained here, by it in conjunction with the 
 increasing productivity of labour. In the 
 passage quoted by Marx, under-consumption of 
 the masses is emphasised even in contradistinc- 
 tion to the anarchy of production — disparity of 
 production in the various branches and changes 
 of prices which produce temporarily general 
 depressions — as the last reason of all true crises. 
 As for any real difference of conception 
 appearing here from that expressed in the 
 quotation given above from the second volume, 
 an explanation must be sought in the very 
 different times in which the two sentences were 
 written. There is an interval of between thir- 
 teen to fourteen years between them, and the 
 passage from the third volume of Capital is the 
 earlier one. It was written by 1864 or 1865, 
 whilst the one out of the second volume must 
 have been written about 1878.! In another 
 
 * Ibid., p. 21. 
 
 f Compare for this the statement of Engels in the 
 preface to the second volume of Capital. Generally 
 
76 
 
 passage of this second volume, which had been 
 written by 1870, the periodic character of crises 
 — ^which is approximately a ten-year cycle of 
 production — is brought into conjunction with 
 the length of the turnover of fixed (laid out in 
 machinery, etc.) capital. The development of 
 capitalistic production has a tendency on the 
 one hand to extend the bulk of value and the 
 length of life of fixed capital, and on the other 
 to diminish this life by a constant revolution of 
 the means of production. Hence the "moral 
 wearing out ' ' of this portion of fixed capital 
 before it is " physically spent. ' ' Through this 
 cycle of connected turnovers comprehending a 
 series of years in which capital is confined 
 through its fixed portion, arises a material cause 
 for periodic crises in which the business passes 
 through periods following one another of ex- 
 haustion, medium activity, precipitancy, crisis.* 
 The periods for which capital is invested are 
 certainly very diverse and do not coincide, but 
 the crisis always forms the starting point of a 
 great fresh investment and therewith — from the 
 standpoint of the whole community — a more or 
 less new material foundation for the next cycle, t 
 This thought is taken up again in the same 
 volume in the chapters on the reproduction of 
 capital, and it is there shown how even with 
 reproduction on the same scale and with un- 
 changed productivity of labour, differences in 
 
 speaking the second volume contains tlie latest and ripest 
 results of Marx's work of research. 
 
 * Vol. II., p. 164. 
 
 t P. 165. 
 
77 
 
 the length of life of the fixed capital which 
 appear temporarily (if, for example, in one year 
 more constituent portions of fixed capital decay 
 than in the previous year) must have as a con- 
 sequence crises of production. \Foreign trade 
 can indeed help out, but so far as it does not 
 remove these differences it only transfers "the 
 conflicts to a wider sphere and opens to them a 
 greater scope.") A communistic society could 
 prevent such disturbances by continued relative 
 over-production which in its case would be 
 " only the control of the community over its 
 own means of production " ; but in a capitalistic 
 society this over-production is an anarchical 
 element. This example of disturbances merely 
 through the differences of length of life of 
 fixed capital is striking. Want of proportion 
 in the production of fixed and circulating capital 
 is one of the favourite arguments of the econo- 
 mists for explaining crises. It is something 
 quite new to them to hear that such a want of 
 proportion can and must arise from the simple 
 maintenance of fixed capital; that it can and 
 must arise with the assumption of an idebl 
 normal production and the simple reproduction 
 of the social capital already in use.* In the 
 chapter on "Accumulation and Reproduction on 
 a larger scale," over-production and crises are 
 only mentioned cursorily as self-evident results 
 of possibilities of combination which follow from 
 the process depicted. Yet here again the idea 
 of " over-production " is very vigorously main- 
 tained. " If," we find on page 499, " Fullarton, 
 * Ibid., p. 468. 
 
78 
 
 for example, will know nothing of over-produc- 
 tion in the ordinary meaning of the term, but 
 only of the over-production of capital — ^that is, 
 pecuniary capital — that only shows again how 
 very little even the best bourgeois economists 
 understand the mechanism of their system." 
 And on page 524 it is shown that if, as can 
 occasionally happen even with capitalistic 
 accumulation, the constant part of the portion 
 of capital destined for the production of the 
 means of consumption, is greater than wages 
 capital plus the surplus value derived from the 
 portion of capital destined for the creation of 
 the means of production, this would be over- 
 production in the former sphere and " would 
 only be adjusted by a great commercial crash." 
 The thought above developed, that the open- 
 ing out of markets would extend the conflicts of 
 capitalistic economy to wider spheres, and 
 therefore increase them, is in the third volume 
 applied by Engels on different occasions to the 
 newer phenomena. The notes on page 97 in 
 the first part of this volume, and on page 17 in 
 the second part, are much the most worthy of 
 notice. In the latter note, which recapitulates 
 and completes what is writen in the former, he 
 mentions the enormous extension, since the time 
 when Marx wrote, of the means of traffic, which 
 has really made the whole world a market, 
 particularly the entry of ever fresh industrial 
 countries into competition with England, and 
 the unlimited extension of the region for the 
 investment of surplus European capital. All 
 these are, according to him, factors which have 
 
79 
 
 set aside or greatly weakened " most of the old 
 incubators of crises and opportunities for the 
 formation of crises." But after characterising 
 the Kartels and Trusts as a means for limiting 
 competition in the inner market, and the pro- 
 tective duties with which the non-English world 
 surrounds itself, as " armour for the final, uni- 
 versal industrial campaign which is to decide 
 the government of the world market," he ends : 
 ' ' Thus each of the elements which strives 
 against a repetition of the old crises conceals in 
 itself the seed of a more powerful future crisis. " 
 Engels raises the question whether the indus- 
 trial cycle which in the infancy of world-wide 
 commerce (1815-1847) used to last about five 
 years, and from 1847 to 1867 ten years, has not 
 undergone a new extension, and whether we do 
 not "find ourselves in the preparatory period 
 of a new world-crash of unheard-of violence " ; 
 but he also leaves this alternative open, that the 
 acute form of the periodic process with its 
 hitherto ten-year cycle may have yielded to a 
 "more chronic rotation allotted to different 
 lands at different times of relatively shorter, 
 feebler improvement of trade, with a relatively 
 long, indecisive depression. " 
 
 The time that has elapsed since this was 
 written has left the question unanswered. Signs 
 of an economic world-wide crash of unheard-of 
 violence have not been established, nor can one 
 describe the improvement of trade in the inter- 
 vals between the crises as particularly short- 
 lived. Much more does a third question arise 
 which after all is partly contained already in 
 
8oo 
 
 f /the second — nameljM(i) whether the enormous 
 /^extension of the world market, in conjunction 
 with the extraordinary shortening of time 
 necessary for the transmission of news and for 
 the transport trade, has so increased the possi- 
 bilities of adjustment of disturbances; and {2) 
 whether the enormously increased wealth of the 
 European states, in conjunction with the 
 elasticity of the modern credit system and the 
 rise of industrial Kartels, has so limited the 
 reacting force of local or individual disturbances 
 that, at least for some time, general commercial 
 crises similar to the earlier ones are to be 
 Regarded as improbable.y 
 
 This question, raised by me in an essay on the 
 " Socialist Theory of a Catastrophic Develop- 
 ment of Society," has experienced all kinds of 
 opposition.* Among others it has caused 
 Rosa Luxemburg to lecture me in a series of 
 articles published in the Leipzig Volkszeitung 
 of September, 1898, on the nature of credit and 
 the possibilities of capitalism in regard to 
 adaptation. As these articles, which have also 
 
 * The essay criticised the opinion laid down in a reso- 
 lution of the International Socialist Congress of 1896 
 that we were on the eve of a great catastrophic crisis that 
 would produce a total revolution of social conditions. 
 The said resolution ran thus : "The economic and indus- 
 trial development is going on with such rapidity that a 
 crisis may occur within a comparatively short time. The 
 Congress, therefore, impresses upon the proletariat of all 
 countries the imperative necessity of learning, as class- 
 conscious citizens, how to administer the business of 
 their respective countries for the common good." I 
 gladly recognised the usefulness of the final recommenda- 
 tion, but I boldly disputed the truth of the premise. This 
 occasioned some violent attacks, to which I replied in the 
 letter reprinted in the preface of this book. 
 
Si 
 
 passed into other socialist papers, are true 
 examples of false dialectics, but handled at the 
 same time with great skill, it appears to me to 
 be opportune to examine them here. 
 
 Rosa Luxemburg maintains that the credit 
 system, far from working against crises, is the 
 means of pushing them to an extremity. It 
 first made possible the unmeasured extension 
 of capitalistic production, the acceleration of the 
 exchange of goods and of the cyclic course of 
 the process of production, and in this way it is 
 the means of bringing into active conflict as often 
 as possible the differences between production 
 and consumption. It puts into the hand of the 
 capitalist the disposal of the capital of others, 
 and with it the means of foolhardy speculation, 
 and if depression sets in it intensifies the crisis. 
 Its function is to banish the residue of stability 
 from all capitalist conditions, to make all 
 capitalist forces in the highest degree elastic, 
 relative, and sensitive. 
 
 Now all that is not exactly new to anyone 
 who knows a little of the literature of socialism 
 in general and of Marxist socialism in par- 
 ticular. The only question is whether it rightly 
 represents the real facts of the case to-day, or 
 whether the picture has not another side. 
 According to the laws of dialectic evolution to 
 which Rosa Luxemburg so much likes to give 
 play, it ought certainly to be the case ; but even 
 without falling back upon these, one should 
 realise that a thing like credit, capable of so 
 many forms, must under different conditions 
 work in different ways. Marx treats credit by 
 
82 
 
 no means from the point of view that it is only 
 a destructive agent in the capitalist system. 
 He assigns to it, amongst other things,* the 
 function of " creating the form of transition to 
 a new modus of production," and with regard 
 to it he expressly brings into prominence " the 
 double-sided characteristics of the credit 
 system. " Frau Luxemburg knows the passage 
 referred to very well; she even reprints the 
 sentence from it where Marx speaks of the 
 mixed character, "half swindler, half prophet," 
 of the chief promulgators of credit (John Law, 
 Isaac Pereire, etc.). But she refers exclusively 
 to the destructive side of the credit system, 
 and mentions not a word of its capacity for 
 establishing and creating, which Marx expressly 
 includes. Why this amputation, why this 
 noteworthy silence with respect to the "double- 
 sided characteristics"? The brilliant dialectical 
 fireworks by means of which the power of the 
 credit system is represented as a means of 
 adaptation in the light of a " one-day fly," end 
 in smoke and mist as soon as one looks more 
 closely at this other side which Frau Luxemburg 
 passes by so shyly. 
 
 That the credit system makes speculation 
 easier is an experience centuries old; and very 
 old, too, is the experience that speculation does 
 not stop production when industrial circum- 
 stances are far enough developed to suit it. 
 Meanwhile, speculation is conditioned by the 
 relation of the knowable to the unknown 
 circumstances. The more the latter predominate 
 
 * Vol. III., i., p. 429. 
 
83 
 
 the more will speculation flourish; the more it is 
 restrained by the former, the more the ground is 
 cut from under its feet. Therefore the maddest 
 outbursts of commercial speculation come to 
 pass at the dawn of the capitalistic era, and 
 speculation celebrates its wildest orgies usually 
 in the countries where the capitalistic develop- 
 ment is youngest. In the domain of industry 
 speculation flourished most luxuriantly in new 
 branches of production. The older a branch 
 of production is under modern forms — ^with the 
 exception of the manufacture of mere articles 
 of fashion — the more does the speculative 
 momentum cease to play a decisive part in it. 
 The conditions and movements of the market 
 are then more exactly foreseen and are taken 
 into consideration with greater certainty. 
 
 Nevertheless, this certainty is only relative, 
 because competition and technical development 
 exclude an absolute control of the market. 
 Over-production is to a certain extent unavoid- 
 able. But over-production in single industries 
 does not mean general crises. If it leads to 
 such an one, either the industries concerned must 
 be of such importance as consumers of the 
 manufactures of other industries, as that their 
 stagnation also stops these industries, or indeed 
 they must take from them, through the medium 
 of the money market — that is, through the 
 paralysis of general credit — the means of 
 carrying on production. But it is evident 
 that there is always a lessening probability of 
 this latter result. The richer a country is, the 
 more developed its credit organisation — which 
 
84 
 
 is not to be confused with a more widely spread 
 habit to produce with borrowed capital. For 
 here the possibilities of adjustment multiply 
 in an increasing measure. In some passage, 
 which I cannot find at the moment, Marx said 
 once — and the correctness of the sentence can 
 be proved by the most abundant evidence — that 
 the contractions in the centre of the money 
 market are much more quickly overcome than 
 in the different points of the circumference. But 
 the change of the means of communication 
 brought about in the meantime has more than 
 neutralised the consequences of great distances 
 in this respect.* 
 
 If the crises of the money market are not 
 quite banished from the world yet, as far as 
 concerns us here, the tightenings of that market 
 by vast commercial undertakings controlled 
 with difficulty are very much reduced. 
 
 The relations of financial crises to trade and 
 ^business crises are not yet so fully explained 
 that one can say with any certainty when both 
 happen together that it was the trade crisis — 
 
 * Engels calculates that America and India have been 
 brought nearer to the industrial countries of Europe, by 
 means of the Suez Canal, steamer transport, etc., by 
 70 to 90 per cent., and adds "that owing to this the two 
 great incubators of crises from 1825 to 1857 lost a great 
 part of their destructive power" (Ca/itfaZ, Vol. III., Part I., 
 p. 45). On p. 395 of the same volume, Engels maintains 
 that certain speculative business formed on risky schemes 
 of credit, which Marx pictures as factors of crises in the 
 money market, have been brought to an end through the 
 oceanic cable. The correcting parenthesis of Engels on 
 p. 56 of the second part of Vol. III. is also worthy of 
 notice for its criticism on the development of the credit 
 system. 
 
8s 
 
 i.e., over-production — which directly caused the 
 money crisis. In most cases it was quite clear 
 that it was not actual over-production, but over- 
 speculation, which paralysed the money market, 
 and by this depressed the whole business. That 
 is proved from the isolated facts which Marx 
 mentions in the third volume of Capital, taken 
 from the official inquiries into the crises of 1847 
 and 1857, as well as from the facts which Pro- 
 fessor Herkner adduces on these and other 
 crises in his sketch of the history of trade crises 
 in his Handworterbuch der Staatswissenschaf- 
 ten. Frau Luxemburg deduces on the basis of 
 the facts adduced by Herkner that the crises 
 hitherto have not at all been the right crises, 
 but that they wer^ only infantile illnesses of the 
 capitalistic economy, the accompanying phe- 
 nomena not of narrowing but of widening the 
 domain of the capitalistic economy — that we 
 "have not yet entered upon that phase of perfect 
 capitalistic maturity which is presumed in the 
 Marxist scheme of the periodicity of crises." 
 According to her we find ourselves " in a phase 
 where crises no longer accompany the rise of 
 capital nor yet its decline. ' ' This time will only 
 come when the world market is fully developed 
 and can be enlarged by no sudden extensions. 
 Then the struggle between the productive 
 powers and the limits of exchange will become 
 continually sharper and more stormy. 
 
 To that one must observe that the formula of 
 the crises in and for Marx was no picture of the 
 future, but a picture of the present day which 
 it was expected would recur in the future in 
 
86 
 
 always sharper forms and in greater acuteness. 
 As soon as Frau Luxemburg denies to it the 
 significance which Marx imputed to it for the 
 whole epoch lying behind us, and sets it up as 
 a deduction which did not yet correspond with 
 reality, but was only a logical forecast based on 
 the existence of certain elements in an embryonic 
 state, she immediately questions the whole 
 Marxist prediction of the coming social evolu- 
 tion, so far as this is based on the theory of 
 crises. For if this was not based on experience 
 at the time when it was set up, and has not 
 become manifest in the interval between then 
 and now, in what more distant future can one 
 place its formula as coming true ? Its relegation 
 to the time when the world market has been 
 fully developed is a flight into the next world. 
 
 No one knows when the world market will 
 be fully developed. Frau Luxemburg is not 
 ignorant of the fact that there is an intensive 
 as well as an extensive broadening of the world 
 market, and that the former is to-day of much 
 greater importance than the latter. 
 
 In the trade statistics of the great industrial 
 countries exports play by far the greatest part 
 in regard to the countries longest occupied. 
 England exports to the whole of Australasia (all 
 the Australian colonies. New Zealand, etc.) 
 values less in amount than to a single country, 
 France ; to the whole of British North America 
 (Canada, British Columbia, etc.) not so much as 
 to Russia only; to both colonial territories 
 together, which are indeed of a respectable age, 
 not so much as to Germany. Its trade with all 
 
87 
 
 its colonies, including the whole of the immense 
 Indian Empire, is not a third of its trade with 
 the rest of the world; and as regards the 
 colonial acquisitions of the last twenty years, 
 the exports thither have been ridiculously small. 
 The extensive widenings of the world market 
 are accomplished much too slowly to allow 
 sufficient outlet for the actual increase of 
 production, if the countries already drawn into 
 it did not offer it an increasing market. A limit 
 to this increasing and intensive amplifying of 
 the world market, along with the extension of its 
 area, cannot be set up A priori. If the universal 
 crisis is the inherent law of capitalistic produc- 
 tion, it must prove its reality now or in the near 
 future. Otherwise the proof of its inevitable- 
 \ ne^s hovers in the air of abstract speculation. 
 CWe have seen that the credit system to-day 
 undergoes less, not more, contractions leading 
 to the general paralysis of production, and so 
 far, therefore, takes a minor place as a factor 
 in forming crises^ But so far as it is a means 
 of a hothouse forcing of over-production, the 
 associations of manufacturers meet this inflation 
 of production in separate countries, and even 
 internationally here and there, ever more 
 frequently, by trying to regulate production 
 as a Kartel, a syndicate, or a trust. Without 
 embarking in prophecies as to its final power of 
 life and work, I have recognised its capacity to 
 influence the relation of productive activity to 
 the condition of the market so far as to diminish 
 the danger of crises. Frau Luxemburg refutes 
 this also. 
 
88 
 
 First she denies that the association of manu- 
 facturers can be general. She says the final aim 
 and effect of such associations are, by excluding 
 competition within a branch, to ihcrease their 
 share of the total amount of profit gained in the 
 market of commodities. But, she adds, one 
 branch of industry could only attain this at the 
 cost of another, and the organisation could not 
 possibly, therefore, be general. "Extended 
 into all branches of production it would itself 
 put an end to its effect. " 
 
 This proof does not differ by a hair's-treadth 
 from the proof, long ago abandoned, of the 
 uselessness of trades unions. Its support is 
 even immeasurably more fragile than the wages 
 fund theory of blessed memory. It is the pre- 
 sumption unproven, unprovable, or, rather, 
 proved to be false, that in the commodity market 
 only a fixed amount of profit is to be divided. 
 It presumes, amongst other things, a fixing of 
 prices independently of the movements in the 
 cost of production. But even given a fixed 
 price, and, moreover, a fixed technological basis 
 of production, the amount of profit in a branch 
 of industry can be raised without thereby 
 lessening the profits of another — namely, by the 
 lessening of unproductive expenses, the ceasing 
 of cutting competition, better organisation of 
 production, and the like. That the association 
 of manufacturers is an effective means towards 
 this is self-evident. The problem of the division 
 of profits is the last obstacle of all which stands 
 in the way of a general union of associations 
 of employers. 
 
89 
 
 It stands somewhat better with the last 
 objection of Frau Luxemburg. According to it 
 the Kartels are unsuitable for preventing the 
 anarchy of production because the Kartels of 
 manufacturers as a rule obtain their higher 
 profit rate on the home market, because they 
 use the portion of capital that cannot be applied 
 to this for manufacturing products for foreign 
 countries at a much less profit rate. The 
 consequence is, increased anarchy on the world 
 market — the opposite to the object aimed at. 
 
 "As a rule ' ' this manoeuvre can only be 
 upheld where a protective duty affords the Kartel 
 protection, so as to make it impossible for the 
 foreign country to repay it in like coin. Mean- 
 while we are concerned here neither with deny- 
 ing the harmful effects of the present simple and 
 high protectionist system, nor with an apology 
 for the syndicates of manufacturers. It has not 
 occurred to me to maintain that Kartels, etc., 
 are the last word of economic development, and 
 are suited to remove for ever the contradictions 
 of modern industrial life. I am, on the contrary, 
 convinced that where in modern industrial 
 countries Kartels and trusts are supported 
 and strengthened by protective duties, they 
 must, in fact, become factors of the crises in the 
 industry concerned — also, if not at first, in any 
 case finally, for the "protected" land itself. 
 The question only arises how long the people 
 concerned will be content with this arrange- 
 ment. vP^'Ot^ctive tariffs are in themselves no 
 product of economy, but an encroachment on 
 economy by the political power seeking to secure 
 
9° 
 
 economic results. It is otherwise with the 
 industrial Kartel. It has — although favoured 
 by protective tariffs — grown out of the economic 
 soil, and is a national means of adapting 
 production to the movements of the market!) 
 That it IS, or can be, at the same time the means 
 of monopolist exploitation is another matter. 
 But it is just as much beside the question 
 that in the former capacity it means an increase 
 of all earlier remedial measures for over- 
 production. With much less risk than the 
 individual undertaking, it can, in times of 
 a glut on the market, temporarily limit 
 production. Better than this, it is also in a 
 position to meet foreign cutting competition 
 abroad. To deny this is to deny the superiority 
 of organisation over anarchic competition. But 
 we do so, if we deny on principle that Kartels 
 can work as a modifying influence on the nature 
 and frequency of crises. How far they can do 
 so is for the present a matter for conjecture, for 
 we have not sufficient experience to allow of a 
 conclusive judgment in this respect. But still 
 fewer conclusive facts can be given under these 
 circumstances for anticipating future general 
 crises as they hovered before Marx and Engels, 
 repetitions on a larger scale of the crises of 1825, 
 1836, 1847, 1857, i873AThe mere fact that whilst 
 for a long time socialists generally believed in 
 an increasing contraction of the industrial cycle 
 as the natural consequence of the increasing 
 concentration of capital — a development in the 
 form of a spiral — Friedrich Engels in 1894 
 found himself driven to question whether a new 
 
© 
 
 enlarging of the cycle was not in front of us, 
 and thus to suggest the exact contrary of the 
 former assumption, and he warned us against 
 the abstract deduction that these crises must 
 repeat themselves in the old form.* 
 
 The history of individual industries shows 
 that their crises by no means always coincide 
 with the so-called general crises.} Marx, as we 
 have seen, believed he could establish on the 
 need of an accelerated renewal of fixed capital 
 (implements of production, etc.) a material 
 foundation for periodic crises, t and it is un- 
 doubtedly true that an important reason for 
 crises is to be found here. But it is not accurate, 
 or not more accurate, that these periods of 
 renewal coincide as to time in the various 
 industries. And therewith a further factor of 
 the great general crisis is done away with. 
 
 (There remains then only so much, that 
 the capacity for production in modern society 
 is much greater than the actual demand for 
 products determined by the buying capacity; 
 that millions live insufficiently housed, insuffi- 
 ciently clad, and insufficiently nourished, in spite 
 
 * We are, of course, only speaking here of the purely 
 economic foundation of crises. Crises as results of 
 political events (wars and serious threatenings of war) 
 or of very widespread failures of crops — local failures 
 no longer exercise any effect in this respect — are of course 
 always possible, 
 
 ■f The use of the word " material " in the passage 
 mentioned (Vol. II., p. 164) is not without interest in 
 judging how Marx understood this word. According to 
 the present usual definition of the word the explanation 
 of crises from under-consumption would be quite as 
 materialistic as founding it on changes in the process of 
 production, or in implements. 
 
92 
 
 of abundant means at hand for sufficient hous- 
 ing, nourishment, and clothing ; that out of this 
 incongruity, over-production appears again and 
 again in different branches of production, so 
 that either actually certain articles are produced 
 in greater amounts than can be used — for ex- 
 ample, more yarn than the present weaving 
 mills can work — or that certain articles are 
 produced not indeed in a greater quantity than 
 can be used, but in a greater quantity than can 
 be bought; that in consequence of this, great 
 irregularity occurs in the employment of the 
 workers, which makes their situation extremely 
 insecure, weighs them down in unworthy de- 
 pendence, brings forth over-work here and want 
 of work there ; and that of the means employed 
 to-day to counteract the most visible part of this 
 evil,(the Kartels represent monopolist unions — 
 on the one side against the workers, and on the 
 other against the great publi(^which have a 
 tendency to carry on warfare over the heads of 
 these and at their cost with the same kind of 
 monopolist unions in other industries or other 
 lands, or, by international or inter-industrial 
 agreements, arbitrarily to adapt production and 
 prices to their need of profit. (The capitalistic 
 means of defence against crises virtually bear 
 within themselves the possibilities of a new and 
 more hopeless serfdom for the working classes, 
 
 ' as well as of privileges of production which 
 
 ! revive in acute form the old guild privileges. 
 
 /It appears to me to be much more important at 
 present, from the standpoint of the workers, to 
 
 ,' keep before our eyes the possibilities of Kartels 
 
93 
 
 and trusts than to prophesy their " impotence.'^ 
 It is for the working class a subordinate ques- 
 tion whether these combinations will be able, in 
 the course of time, to attain their first-mentioned 
 object — ^the warding off of crises. But it 
 becomes a question full of importance as soon 
 as expectations of any kind as regards the 
 movement for the emancipation of the working 
 classes are made dependent upon the question 
 of the general crisis. For then the belief that 
 Kartels are of no effect against crises may be 
 the cause of very disastrous neglect.y 
 
 The short sketch which we gave in the intro- 
 duction to this chapter of the Marx-Engels 
 explanations of economic crises will sufSce, in 
 conjunction with the corresponding facts 
 adduced, to show that the problem of crises 
 cannot be solved by a few well-preserved 
 catch-words. \We can only investigate what 
 elements of modern economy work in favour of 
 crises and what work against them. It is im- 
 possible to pre-judge tt, priori the ultimate 
 relation of these forces to one another, or 
 their development.^ Unless unforeseen external 
 events bring about a general crisis — and as we 
 have said that can happen any day — ^there is no 
 urgent reason for concluding that such a crisis 
 will come to pass for purely economic reasons. 
 Local and partial depressions are unavoidable; 
 general stagnation is not unavoidable with the 
 present organisation and extension of the world 
 market, and particularly with the great exten- 
 sion of the production of articles of food. The 
 latter phenomenon is of peculiar importance for 
 
94 
 
 our problem. Perhaps nothing has contributed 
 so much to the mitigation of commercial crises 
 or to the stopping of their increase as the fall 
 of rent and of the price of food.* 
 
 * Note to the English . edition. — This was written in 
 the winter 1898-1899 before the South African War had 
 produced new conditions on the thoney market and a 
 great increase in armaments. In spite of these facts the 
 crisis that brolce out in 1901 was of shorter life than a 
 good many of the earlier crises, and was followed by a 
 longer period of prosperity. 
 
Chapter III. 
 
 THE TASKS AND POSSIBILITIES OF SOCIAL 
 DEMOCRACY. 
 
 (a) The political and economic preliminary 
 conditions of socialism. 
 
 If we asked a number of men belonging to 
 any class or party to give in a concise formula 
 a definition of socialism, most of them would 
 be somewhat confused. He who does not 
 repeat at random some phrase he has heard 
 must first make clear to himself whether he has 
 to characterise a state, a movement, a percep- 
 tion, or an aim. If we consult the literature of 
 socialism itself, we shall come across very 
 various explanations of its concept according 
 as they fall into one or other of the categories 
 designated above — from the derivation of the 
 concept from juridical notions (equality, justice) 
 or its summary characterisation as social 
 science, up to its identification with the class 
 struggle of the workers in modern society and 
 the explanation that socialism means co-opera- 
 tive economics. In some cases conceptions 
 founded on entirely different principles are the 
 grounds for this variety of explanations ; but 
 they are mostly only the results of observing 
 or representing one and the same thing from 
 different points of view. 
 
96 
 
 (The most exact characterisation of socialism 
 will in any case be that which starts from the 
 concept of association because by it an economi- 
 cal as well as — in the widest sense of the word 
 — a juridical relation is expressed at the same 
 time.^ It needs no long-winded deduction to 
 show that the indication of the juridical nature 
 of socialism is iust as important as that of its 
 economic nature . Quite apart from the ques- 
 tion whether or in what sense law is a primary 
 or secondary factor in the life of a community, 
 the nature of its law undoubtedly in each case 
 gives the most concentrated idea of its char- 
 acter. CWe characterise forms of communities, 
 not according to their technological or economic 
 foundations, but according to the fundamental 
 principle of their legal institutions) We speak, 
 indeed, of an age of stone, bronze, machinery, 
 electricity, etc., but of a feudal, capitalistic, 
 bourgeois, etc. , order of society. To this would 
 correspond the definition of socialism as a 
 movement towards — or the state of — an order 
 of society based on the principle of association. 
 In this sense, which also corresponds with the 
 etymology of the word {socius — a partner), the 
 word is used in what follows. 
 
 (Now what are the preliminary conditions of the 
 realisation of socialism ? Historical materialism 
 sees them first in the modern development of pro- 
 duction.) With the spread of the capitalistic large 
 enterprises in industry and agriculture there is 
 assumed to be a lasting and steadily-increasing 
 material cause for the impetus to a socialistic 
 transformation of society. In these under- 
 
97 
 
 takings production is already socially organised, 
 only the management is individualistic and the 
 profit is appropriated by individuals, not on the 
 ground of their labour, but of their share of 
 capital. The active worker is separated from 
 the possession of his instruments of production, 
 he is in the dependent condition of a wage- 
 earner, from which he does not escape as long 
 as he lives, and the pressure of it is rendered 
 sharper by the uncertainty which is joined with 
 this dependence both on the employer and on 
 the fluctuations in the state of trade. Like pro- 
 duction itself, the conditions of existence for the 
 producers press towards the socialisation and 
 the co-operative organisation of production and 
 exchange. (As soon as this development is 
 sufficiently advanced the realisation of socialism 
 becomes an imperative necessity for the further 
 development of the community. To carry it out 
 is the task of the proletariat organised as a 
 class party which for this purpose must take 
 possession of the political government. 
 
 According to that, we have as the first con- 
 dition of the general realisation of socialism a 
 definite degree of capitalist development, and 
 as the second the exercise of political sove- 
 reignty by the class party of the workers, i.e., 
 social democracy.) The dictatorship of the 
 proletariat is, according to Marx, the form of 
 the exercise of this power in the transition 
 period. 
 
 As regards the first condition, it has already 
 been shown in the section on the " Classes of 
 Establishments in Production and Distribution" 
 
98 
 
 that if the large undertaking in industry pre- 
 dominates to-day, yet it, including the businesses 
 dependent on it, even in such an advanced 
 country as Prussia, represents at the most only 
 half the population engaged in production. The 
 picture is not different if we take the statistics 
 for the whole of Germany, and it is very little 
 different in England, the most industrial country 
 of Europe. In other foreign lands, perhaps 
 with the exception of Belgium, the relation of 
 the large enterprise to the small and medium 
 business is still more unfavourable. But in 
 agriculture we see everywhere the small and 
 medium holding, as compared with the large 
 one, not only greatly predominating, but also 
 strengthening its position. In commerce and 
 distribution the relation of the groups of 
 undertakings is similar. 
 
 That the picture which the summarised 
 figures of trade statistics give receives many 
 corrections on a more recent examination of 
 separate divisions, I have myself shown in my 
 article on the Catastrophic Theory, after I 
 had already expressly referred, in an earlier 
 article of the series, Problems of Socialism, 
 to the fact that the number of employees in an 
 undertaking was no safe indication as to the 
 degree of its capitalist nature.* 
 
 * I wrote in an earlier article of the Problems of 
 Socialism concerning the subordinate and branch estab- 
 lishments in industry : " Such a subordinate establish- 
 ment which is perhaps worked with very much constant 
 (i.e., fixed) and with very little variable (i.e., wages) 
 capital, which employs expensive machinery and few 
 workers, comes thus, according to the practice of the 
 
99 
 
 But this is of no particularly great conse- 
 quence for us at present. Whether of the 
 hundreds of thousands of small undertakings, 
 a good number are of capitalistic character and 
 others are wholly or partly dependent on large 
 capitalist undertakings, this can alter very little 
 the total result which the statistics of under- 
 takings offer. The great and growing variety 
 of undertakings, the graduated character of the 
 structure of industrial enterprises, is not thereby 
 disproved. If we strike out of the list a quarter 
 or even a half of all small establishments as 
 dependencies of medium and large enterprises, 
 there remain in Germany almost a million 
 undertakings from capitalist giant enterprises, 
 downward in ever broadening classes to the 
 hundred thousands of small enterprises worked 
 in handicraft fashion, which may, indeed, pay 
 tribute by-and-by to the process of concentra- 
 tion, but on that account show no indication of 
 disappearing from the scene. 
 
 (it follows that as far as centralised enterprise 
 forms a preliminary condition for the socialisa- 
 tion of production and distribution, this is only 
 
 Imperial statisticians, under small factories or even small 
 workshops, whilst it really belongs to the capitalistic 
 factories. . . . We may assume it as quite certain that 
 handicrafts and small factories appear much stronger in 
 point of numbers in the trade statistics than they are in 
 reality " (Neue Zeit xv. i, p. 308). And in respect to 
 agriculture : " The area can be fairly small and yet be 
 the scene of a thoroughly capitalistic business. Statistics 
 founded on the size of the establishment in area, say 
 less and less of their economic character " (ibid., p. 380). 
 Similarly in my article on the Catastrophic Theory, on 
 p. 552, xvi., I, with respect to the figures for commerce 
 and trade. 
 
a partial condition in even the most advanced 
 countries of Europe) so that if in Germany in 
 the near future the state wished to expropriate 
 all undertakings, say of twenty persons and 
 upwards, be it for state management altogether 
 or for partly managing and partly leasing them, 
 there would still remain in commerce and 
 industry hundreds of thousands of undertakings 
 with over four millions of workers which would 
 be excluded and be carried on under private 
 management. In 'agriculture there would 
 remain, if all holdings of over 20 hectares were 
 nationalised — of which no one dreams — several 
 millions of holdings under private management 
 with a total of 9,000,000 workers. One can 
 form an idea of the magnitude of the task which 
 would be borne by the state, or the states, by 
 taking over even the larger undertakings. It 
 would be a question, in industry and commerce 
 together, of about a hundred thousand busi-* 
 nesses with five to six million employees, and 
 in agriculture of over 300,000 holdings with 
 over five million workers. What abundance 
 of judgment, practical knowledge, talent for 
 administration, must a government or a 'national 
 assembly have at its disposal to be even equal 
 to the supreme management or managing 
 control of such a gigantic organism ! 
 
 But let us leave this question on one side for 
 a time, and let us keep first of all firmly to the 
 ^fact that the material preliminary condition for 
 the socialisation of production and distribution 
 — advanced centralisation of enterprises — is at 
 present only partly achieved.J> 
 
(The second preliminary condition, according 
 to the theory of Marx, is the conquest of the 
 political power by the proletariat. One can 
 think of this conquest in various ways : by the 
 path of parliamentary struggle, turning the 
 right to vote to good account, or by the path of 
 force by means of a revolution.*/ 
 
 It is known that Marx and Engels, until 
 pretty recently, considered the latter as nearly 
 everywhere absolutely inevitable, and it seems 
 unavoidable to various adherents of the Marxist 
 doctrine to-day. Often it is also considered the 
 shorter way. t 
 
 * " Revolution " is here used exclusively in its political 
 meaning, as synonymous with a rising or unlawful 
 force. For the change in the order of society, on the 
 other hand, the term " social reorganisation " is used, 
 which leaves open the question of the way. The object 
 of this distinction is to exclude all misunderstandings and 
 ambiguities. 
 
 'f " But to whom is it not evident that for the great 
 towns where the workers form the overwhelming 
 majority, if they had once attained the command of 
 public power, of its administration, and the enactment 
 of law — the economic revolution would have been only 
 a question of months, nay, perhaps of weeks?" (Jules 
 Guesde, Der achtezehnte Miirz [1871] in der Provim. 
 Zukunft [1877], p. 87). 
 
 "But we declare : Give us for half a year the power of 
 government, and the capitalist society would belong to 
 history " (Parvus in the Sdchsiche Arbeiterzeitung, March 
 6th, 1898). 
 
 The latter sentence stands at the end of an article in 
 which, amongst other things, it is shown that even after 
 the social revolutionary government has taken the regu- 
 lation of the total production in hand, the setting up of 
 trade in commodities by an artificially thought-out system 
 of exchange will not be practicable. In other words. 
 Parvus, who has occupied himself seriously with eco- 
 nomics, understands on the one side that "the trade in 
 commodities has permeated so deeply all conditions of 
 social life that it cannot be replaced by an artificially 
 
To this, people are led before all else by the 
 idea:that the working class is the most numerous 
 and also the most energetic class of the com- 
 munity. Once in possession of power, it would 
 not rest until it had substituted for the founda- 
 tions of the present system such arrangements 
 as would make its restoration impossible. 
 
 It has already been mentioned that Marx and 
 Engels, in the establishment of their theory of 
 the dictatorship of the proletariat, had before 
 their eyes as a typical example the epoch of 
 terror of the French Revolution. Even in Anti- 
 Diihring Engels declares that St. Simon, in 
 1792, by regarding the reign of terror as the 
 reign of the masses without means, made 
 a discovery worthy of a genius. That is prob- 
 ably an over-estimation, but however highly 
 one may esteem the discovery, the result of the 
 rule of the men without property does not thrive 
 much better with St. Simon than with Schiller, 
 decried to-day as " a philistine. " The men 
 without property in 1793 were only capable of 
 fighting the battles of others. They could only 
 ' ' govern ' ' as long as the terror lasted. When 
 
 thought-out system of exchange," and in spite of this 
 conviction, which has long been mine (it was already 
 hinted at in the article on the Sozial politische 
 Bedeutung von Raum und Zahl, but was to have been 
 treated more thoroughly in a later article of the series. 
 Problems of Socialism), he imagines that a social 
 revolutionary government could in the present structure 
 of industry "regulate" the whole of production and in 
 half a year exterminate root and branch the capitalistic 
 system that has grown up out of the production of com- 
 modities with which it is so intimately bound up. One 
 sees what sort of political' children the force frenzy can 
 make out of otherwise well-informed people. 
 
103 
 
 it had exhausted itself, as it was bound to do, 
 their government was quite at an end. Accord- 
 ing to the Marx-Engels point of view, this 
 danger would not exist with the modern prole- 
 tariat. But what is the modern proletariat? 
 
 If one counts in it all persons without property, 
 all those who have no income from property or 
 from a privileged position, then they certainly 
 form the absolute majority of the population of 
 advanced countries. But this "proletariat" 
 would b e a mixture of extraordinarily different 
 elements , of classes which have more differences 
 among themselves than had the " people " of 
 1789, who certainly as long as the present con- 
 ditions of property are maintained have more 
 common — or, at least, similar — interests than 
 contrary ones ; but the different nature of their 
 needs and interests would quickly become 
 known to them as soon as the propertied and 
 governing classes are removed from, or deprived 
 of, their position. 
 
 (On an earlier occasion I made the remark 
 that the modern wage-earners are not of the 
 homogeneous mass, devoid in an equal degree 
 of property, family, etc., as the Communist 
 Manifesto foresees ; that it is just in the most 
 advanced of the manufacturing industries that 
 a whole hierarchy of differentiated workmen are 
 to be found between whose groups only a 
 moderate feeling of solidarity exists J In this re- 
 mark, a well-known socialist writer, H. Cunow, 
 sees a confirmation of the fact that even when 
 I was speaking generally I had in my mind 
 specially English conditions. In Germany and 
 
104 
 
 the other continental civilised lands he says no 
 such separation from the revolutionary move- 
 ment of the workmen in better positions is to 
 be found as in England. In contrast to England 
 the best-paid workmen stand at the head of the 
 class war. The English caste feeling, he adds, 
 is not a consequence of the social differentiation 
 of to-day but an after-effect of the earlier system 
 of guilds and companies and the older trade 
 union movement based on them. 
 
 Again I must reply that what my opponent 
 tells me is in no way new to me. If a certain 
 guild-like feature is to be found in the English 
 working-class movement, it is far less a heritage 
 from the old guild system, which, indeed, existed 
 much longer in Germany than in England, 
 than one of the chief products of Anglo-Saxon 
 freedom — of the fact that the English workman 
 never, not even at the time of the suppression 
 of the right of association, stood under the 
 scourge of a state ruled by police. The sense 
 of individuality is developed in freedom, or, to 
 speak for once with Stirner, the sense of own. 
 It does not exclude the recognition of what is 
 of a different nature and of general interest, 
 but it easily becomes the cause of a little angu- 
 larity which even appears as hard and narrow- 
 minded when it is only one-sided in form. I do 
 not want to wrong the German workmen, and 
 I know how fully to honour the idealism which, 
 for example, moved the Hamburg workmen for 
 decades to sacrifices for the common cause of 
 the proletarian struggle for freedom which 
 have not their equal in the working-class move- 
 
ment; but so far as I have opportunity of 
 knowing and following the German working- 
 class movement, the reactions of the trade 
 differentiation described have asserted them- 
 selves. Special circumstances, such as the pre- 
 ponderance of the political movement, the long 
 artificial suppression of trade unions, and the 
 fact that on the whole the differences in rates 
 of wages and hours of labour are generally less 
 in Germany than in England, prevent their 
 manifesting themselves in a peculiarly striking 
 manner. But any one who follows attentively 
 the organs of the German trade union move- 
 ment will come across enough facts to confirm 
 what I have said. 
 
 The trade unions do not create that 
 phenomenon, they only bring it into prominence 
 as an unavoidable result of actual differences. 
 It cannot be otherwise than that vital differences 
 in manner of work and amount of income finally 
 produce different conduct and demands of life. 
 The highly-skilled fine instrument-maker and 
 the collier, the skilled house decorator and the 
 porter, the sculptor or modeller and the stoker, 
 lead, as a rule, a very different kind of life and 
 have very different kinds of wants. Where the 
 struggles for their standards of life lead to no 
 collision between them, the fact that they are 
 all wage-earners may efface these differences 
 from their ideas, and the consciousness that 
 they are carrying on the same kind of struggle 
 against capital may produce a lively, mutual 
 sympathy. Such sympathy is not wanting in 
 England ; the most aristocratic of aristocratic 
 
io6 
 
 trade unionists have often enough shown it to 
 workmen in worse conditions, as many of them 
 are very good democrats in politics, if they are 
 not socialists.* But there is a great difference 
 between such political or social political sym- 
 pathy and economic solidarity which a stronger 
 political and economic pressure may neutralise, 
 but which, according as this pressure diminishes, 
 will make itself finally noticeable in one way or 
 another. It is a great mistake to assume that 
 England makes an exception here on principle. 
 The same phenomenon is shown in France in 
 another form. Similarly in Switzerland, the 
 United States, and, as I have said, to a certain 
 degree in Germany also. 
 
 mut even if we assume that this differentiation 
 does not exist in the industrial working classes 
 or that it exercises no effect on the mode of 
 thinking of the workmen concerned, yet the 
 industrial workers are everywhere the minority 
 of the population) In Germany, together with 
 industrial home-workers, some 7,000,000 out 
 of 19,000,000 people earning incomes are indus- 
 trial wage-earners. We have besides the 
 technical civil service, the shop employees, the 
 agricultural labourers. 
 
 Here the differentiation is everywhere more 
 marked, of which no clearer evidence is given 
 than the painful history of the movements 
 towards the organisation of these classes of 
 
 * In the socialistic movement in England, just as else- 
 where, the better-paid — that is, the educated — workmen 
 of higher mental endowment form the picked troops. 
 One finds in the assemblies of socialist societies only very 
 few so-called unskilled workmen. 
 
107 
 
 labour in industrial unions like trade unions.* 
 It is quite impossible to say that the five or six 
 millions employed in agriculture (which the 
 German trade statistics register after deducting 
 the higher staff of assistants, stewards, etc.) 
 will strive to better themselves with the same 
 force as the industrial workers. 
 
 tonly with quite a small number can one 
 propose or expect serious inclination for, and 
 understanding of, endeavours which go beyond 
 the mere amelioration of conditions of labour. 
 To by far the greatest number of them the 
 socialisation of agricultural production cannot 
 be much more than empty words. Their ideal 
 is in the meantime to get their own land.J 
 
 iMeanwhile, the desire of the industrial work- 
 ing classes for socialistic production is for the 
 most part more a matter of assumption than of 
 certainty) From the growth of the number 
 of socialist votes in public elections one can 
 certainly deduce a steady increase of adherents 
 of socialistic strivings, but no one would 
 
 * In the ten years since this was written a very 
 remarkable change for the better has taken place. The 
 organisations of technological, commercial, etc., func- 
 tionaries and assistants have made wonderful headway. 
 At the end of 1907 there were, apart from the trade 
 unions of the wage-earners, embracing altogether 
 24,000,000 members, 680,981 functionaries of all sorts 
 and positions organised in forty-eight societies with trade 
 union leanings more or less distinct. Of these fifteen 
 societies, with altogether 459,787 members, were unions 
 of oiiice, shop, warehouse, etc., functionaries and assist- 
 ants in commercial and kindred enterprises. On the 
 other hand, there were only a few thousand agricultural 
 labourers organised, and not the tenth part of the organ- 
 ised clerks and shop assistants belonged to unions with 
 socialist tendencies. 
 
loS 
 
 maintain that all votes given to socialists come 
 from socialists. Even if we assumed that all 
 these voters would greet with joy a revolution 
 which brought the socialists to the helm, little 
 would even then be done towards the solution 
 of the main problem. 
 
 I think I can take it as being generally 
 admitted that there would be no question of an 
 immediate taking over by the state of the total 
 manufacture and distribution of products. The 
 state could not even take over the whole amount 
 of medium and large enterprises. The local 
 authorities, too, as connecting links, could not 
 do so very much. They could socialise at most 
 those businesses which produce, or which per- 
 form services, locally for that locality, and they 
 would get therewith quite a nice little task. But 
 can one imagine that undertakings which until 
 then had worked for the great outside market 
 could be suddenly municipalised? 
 
 Let us take an industrial town of only medium 
 size, say Augsburg, Barmen, Dortmund, Hanau, 
 Mannheim. Is anyone so foolish as to imagine 
 that the communes there could, in a political 
 crisis or at some other occasion, take over all 
 the different manufacturing and commercial 
 businesses of these places into their own 
 management and carry them on with success? 
 They would either have to leave them in the 
 hands of the former proprietors, or, if they 
 wanted to expropriate these absolutely, they 
 would be obliged to give them over to associa- 
 tions of workmen on some leasing conditions. 
 
 The question in all these cases would resolve 
 
109 
 
 itself into the question of the economic power of 
 associations — i.e., of co-operation. 
 
 (b) The Economic Capacities of Co-operative 
 Associations. 
 
 (The question of the capabilities of associa- 
 tions has hitherto been treated very curiously in 
 the Marxist literature?^ If one leaves out of 
 the question the literature of the 'sixties, one 
 will find in it, with the exception of very 
 general, mostly negative, observations, very 
 little about the co-operative movement. The 
 reasons for this negligence are not far to seek. 
 
 First, the Marxist practice is predominantly 
 political, and is directed towards the conquest 
 of political power and attributes, and gives 
 importance almost solely to the trade union 
 movement, as a direct form of the class struggle 
 of the workers. But with respect to the co- 
 operative societies, the conviction was forced 
 on Marx that on a small scale it was fruitless, 
 and would, moreover, have at the most only a 
 very limited experimental value. Only through 
 the community could something be begun. 
 Marx expresses himself in this sense on the 
 associations of workmen in the i8 Brumaire.* 
 
 Later he somewhat modifies his judgment of 
 co-operative societies to which*l;he resolutions 
 on the system of co-operation moved by the 
 
 * " It (the proletariat) partly throws itself into 
 doctrinaire experiments, Exchange Banks, and Work- 
 men's Associations, thus into a movement wherein it 
 renounces the overthrowing of the old world with its own 
 great massed-up resources." 
 
General Council of the International at the 
 Congress at Geneva and Lausanne bear wit- 
 ness, as well as the passage apparently 
 originating from Marx, at all events approved 
 by him in G. Eccarius' A Workman's Refuta- 
 tion of John Stuart Mill, where the same 
 significance is applied to the associations as 
 forerunners of the future, as the guilds had 
 held in Rome and the early middle ages, and, 
 further, the passage already alluded to in 
 the third volume of Capital, which, written at 
 the same time as those resolutions and 
 Eccarius' work, brings into prominence the 
 importance of industrial associations of the 
 workers as a transition form to socialist produc- 
 tion. But the letter on the draft scheme of 
 the Gotha programme (1875) again sounds much 
 more sceptical as regards these associations, 
 and this scepticism reigns from the middle of 
 the 'seventies over the whole Marxist literature, 
 ^his may partly be the result of the reaction 
 which set in after the Paris Commune, and 
 which gave the whole working-class movement 
 another character almost exclusively directed 
 towards politics. But it is also the result of 
 the sad experiences which had been undergone 
 everywhere with co-operative societies^ The 
 high-flown exf^tations to which the advance 
 of the English co-operative movement had given 
 occasion were not fulfilled. For all socialists 
 of the 'sixties, societies for production had been 
 the chief consideration, the co-operative stores 
 were minor. The opinion prevailed — ^to which 
 even Engels in his essays on the housing 
 
question gave expression — ^that as soon as 
 co-operative stores everywhere included the 
 mass of the workers they would certainly have 
 as a consequence a reduction of wages.* The 
 resolution drawn up by Marx for the Geneva 
 Congress runs : — 
 
 " We recommend workmen to embark on 
 co-operative production rather than on co- 
 operative stores. The latter touch only the 
 surface of the economic system of to-day, the 
 first strikes at its foundations. . . . To stop 
 the co-operative societies from degenerating 
 into ordinary bourgeois companies all 
 workers employed by them, whether share- 
 holders or not, should receive the same share. 
 As a merely temporary expedient it may be 
 agreed that the shareholders should besides 
 receive a moderate interest." 
 
 But it was just the productive societies formed 
 in the 'sixties which failed nearly everywhere. 
 They had either been obliged to dissolve alto- 
 gether or had dwindled into small company 
 businesses, which, if they did not employ men 
 for wages quite in the same way as other busi- 
 nesses, were weakly dying away. On the other 
 side the societies of consumers were, or 
 appeared to be, really turned into mere "philis- 
 tine " retail shops. No wonder that people in 
 socialist circles turned their backs more and 
 more on the whole co-operative movement. 
 
 Two circumstances are answerable for the 
 
 * Housing Question, new edition, pp. 34-35. 
 
fact that a comprehensive criticism on co- 
 operation is wanting in Marx. First, at the 
 time he wrote sufficient experience of the 
 different forms of co-operation was wanting to 
 formulate a judgment on that basis. The ex- 
 change bazaars which belonged to an earlier 
 period had proved absolute failures. But, 
 secondly, Marx did not meet the co-operative 
 societies with that freedom from preconception 
 which would have allowed his faculty for keen 
 observation to penetrate further than the 
 average socialist's. Here the already formed 
 doctrine — or, if I may be allowed the expres- 
 sion, the formula — of expropriation stood in 
 the way of his great power of analysis. The 
 co-operative society was acceptable to him in 
 that form in which it represented the most direct 
 contrast to the capitalist undertaking. Hence 
 the recommendation to workmen to take up co- 
 operative societies for production because these 
 attacked the existing economic system "at its 
 foundation." That is quite in the spirit of 
 dialectics and corresponds formally throughout 
 with the theory of society which starts from 
 production as, in the last instance, the decisive 
 factor of the form of society. It corresponds 
 also, apparently, with the conception which 
 perceives in the antagonism between already 
 socialised labour and private appropriation the 
 fundamental contradiction in the modern mode 
 of production which is pressing for a solution. 
 Productive co-operation appears as the practical 
 solution of this antagonism. In this sense 
 Marx thinks of it — that is, that kind of society 
 
"3 
 
 where the ' ' workers as an association are their 
 own capitalist,"* so that, if it necessarily 
 reproduced all the faults of the present system, 
 yet it did away in fact with the antagonism 
 between capital and labour and thus proved the 
 superfluousness of the capitalist employer. Yet 
 experience has since taught that industrial 
 co-operation constituted in just that kind of 
 way was not, and is not, in a position to produce 
 this proof ; that it is the most unfortunate form 
 of associated labour; and that Proudhon was 
 actually in the right when, in regard to it, he 
 maintained against Louis Blanc that the 
 associations were " no economic force, "t 
 
 CThe social democratic critic has sought 
 hitherto the causes of the economic failure of 
 the purely productive co-operative societies 
 simply in their want of capital, credit, and sale, 
 and has explained the decay of the associations 
 that have not failed economically by the corrupt- 
 ing influence of the capitalistic or individualistic 
 world surrounding them. All that is to the 
 point as far as it goes. But it does not exhaust 
 the question/ Of quite a series of productive 
 associations that have failed financially, it is 
 quite certain that they had sufficient capital for 
 
 * Vol. III., p. 427. 
 
 f If Proudhon appears sometimes as a decided opponent 
 and sometimes as a supporter of co-operation, this con- 
 tradiction is explained by his having at one time quite 
 a different form of co-operation in his mind than at 
 another. He refuses to the essentially monopolist asso- 
 ciation what he admits to the mutualistic association, 
 that is to the association working a system of reciprocity. 
 His criticism is, however, more intuitive than scientific, 
 and full of exaggerations. 
 
114 
 
 their work and no greater difficulties in selling 
 than the average manufacturer. If the produc- 
 tive association of the kind depicted had been 
 a force superior to the capitalistic undertaking 
 or even of the same economic power, then it 
 should at least have continued and risen in the 
 same ratio as the many private enterprises 
 begun with most modest means, and it would 
 not have succumbed so pitiably to the " moral " 
 influence of the capitalist world surrounding it, 
 as it has done continually again and again. 
 The history of the productive co-operative 
 societies that have not failed financially speaks 
 almost more loudly still against this form of 
 " republican factory " than that of the bankrupt 
 ones. For it says that, regarding the first, the 
 further development means exclusiveness and 
 privilege. Far from attacking the foundation 
 of the present economic system they have much 
 more given a proof of its relative strength. 
 
 fOn the other hand, the co-operative stores on 
 which the socialists of the 'sixties looked so 
 disparagingly, in the course of time have really 
 proved to be an economic power — i.e., as an 
 organism fit to perform its work and capable of 
 a high degree of development.) Against the 
 pitiable figures which the statistics of the purely 
 productive co-operative societies offer, the 
 figures of workmen's co-operative stores show 
 up like the budget of a world-embracing empire 
 to that of a little country town. And the work- 
 shops erected and conducted on account of such 
 co-operative stores have already produced many 
 times the amount of goods which have been 
 
made by purely, or nearly purely, productive 
 co-operative societies.* 
 
 The deeper reasons for the economic as well 
 as the moral failures of purely productive 
 associations have been excellently presented by 
 Mrs. Beatrice Webbt in her work on the British 
 Co-operative Movement, even if here and there, 
 perhaps, a few exaggerations are found. For 
 Mrs. Webb, as for the great majority of 
 English co-operators, the society belonging to 
 the workmen engaged in it is not socialistic or 
 democratic but "individualistic." One can take 
 offence at the selection of this word, but the line 
 of thought is quite correct. This association is 
 not socialistic, as Robertus, indeed, has already 
 shown. When the workmen employed are the 
 exclusive proprietors, its constitution is a living 
 contradiction in itself. It supposes equality in 
 the workshop, a complete democracy, a republic. 
 
 * The figures for the latter kind of productive co-opera- 
 tive societies are extremely difficult to ascertain as the 
 official statistics of production by associations do not 
 distinguish between them and the much more numerous 
 and large workmen's share associations (companies) for 
 objects of production. According to the returns of the 
 British Board of Trade in 1897 and 1905, the value of 
 the year's production of those associations for which the 
 Board issued returns was : — 
 
 1897. 1905. 
 
 of Co-operative Stores in their own workshops ^^6,100,730 ;^i2,52;,io4 
 
 Of Associations of Millers* trades 1,264,402 1,128,328 
 
 Of Irish Dairy Farming Associations 353,2471 
 
 Of Workmen's Associations for objects of Pro- > 3,683,699 
 
 duction 1,625,940) 
 
 Against this the registered British Co-operative 
 Societies had in the years — 
 
 1897. 1905. 1906. 
 
 Members 1,468,955 2,177,834 2,334,641 
 
 Capital ;£24,oS7,430 £^^,^^l.^9S ^39,898,220 
 
 Sales 56,632,450 89,403,546 98,403,692 
 
 Profit 6,402,428 10,026,387 .... 
 
 f Published under her maiden name, "Potter." 
 
ii6 
 
 But as soon as it has attained a certain size — 
 which may be relatively very modest — equality 
 breaks down because differentiation of functions 
 is necessary, and with it subordina tion. If 
 equality is given up, the corner-stone of the 
 building is removed, and the other stones follow 
 in the course of time, and decay and conversion 
 into ordinary business concerns step in. But if 
 equality is maintained, then the possibility of 
 extension is cut off and it remains of the small 
 kind. That is the alternative for all purely pro- 
 ductive associations. I n this conflict they have 
 all broken down or languished. (Far from being 
 a suitable form for removing the capitalist from 
 the field of modern large industries they are 
 much more a return to pre-capitalist production^ 
 That is so very much the case that the few 
 instances where they have had relative success 
 occurred in artisan trades, the majority of them 
 not in England, where the spirit of large indus- 
 tries dominates the workers, but in strongly 
 " small bourgeois " France. Psychologists of 
 nations like to set England up as the land 
 where the people seek equality in freedom, 
 France as the land where they seek freedom in 
 equality. The history of the French productive 
 associations includes, indeed, many pages where 
 the greatest sacrifices were undergone with 
 touching devotion for the maintenance of formal 
 equality. But it shows not one purely produc- 
 tive association of the modern large industry 
 type, although the latter is nevertheless fairly 
 widely spread in France. 
 
 Dr. Franz Oppenheimer, in his book, Die 
 
117 
 
 Siedlungsgenossenschaft,* has earned the merit 
 of materially extending and making more 
 thorough the investigation of Mrs. Webb. He 
 offers in the first chapters, in a very clearly 
 arranged classification, an analysis of the differ- 
 ent forms of association which in certain parts 
 can scarcely be exceeded in critical clearness. 
 Oppenheimer brings into the classification of 
 associations the separation in principle between 
 associations for purchase and sale, the import- 
 ance of which, in our opinion, he somewhat 
 over-estimates on single points, but which, on 
 the whole, must be noted as very useful and 
 on the basis of which a truly scientific explana- 
 tion is possible of the financial and moral failure 
 of the purely productive associations — an ex- 
 planation in which personal faults, want of 
 means, etc., for the first time move into the 
 second jilace, as accidental factors, which 
 explain the exception but not the rule. Only 
 to the extent to which the association is sub- 
 stantially an association of purchasers do its 
 general aims and its peculiar interests make its 
 extension desirable. But the more the associa- 
 tion is one for sellers, and the more it is one 
 for the sale of products manufactured by itself 
 (the matter is somewhat modified in the case 
 of peasant associations), the greater is the 
 internal opposition. Its difficulties grow with 
 Its growth. The risk becomes greater, the 
 struggle for sales more difficult; the same is 
 true regarding the procuring of credit, and the 
 
 * Colonising Co-operative Societies. Leipzig : Duncker 
 and Humblot. 
 
ii8 
 
 fight for the profit rate or the dividends of the 
 individual members in the general mass of profit, 
 becomes more severe. It is therefore forced 
 again into exclusiveness. Its interest in profit 
 is opposed not only to that of the buyers, but 
 also to that of all the other sellers. The associa- 
 tion of purchasers, on the other hand, gains 
 with growth ; its interest as regards profit, if 
 opposed to that of the sellers, is in agreement 
 with that of all the other buyers ; it strives after 
 the keeping down of the profit rate, after 
 cheapening of products — a pursuit of all pur- 
 chasers as such, as well as of the community as 
 a whole. 
 
 COut of this difference in the economic nature 
 foi the two kinds arises the difference in their 
 management so clearly laid down by Mrs. 
 Webb : the essentially democratic character of 
 all genuine associations of purchasers, and the 
 tendency towards an oligarchy in the character 
 of all associations purely for sale^ 
 
 The differentiation of the associations into 
 those of purchasers and those of sellers is of 
 value to the theory of the nature of associations 
 because it is, in turn, connected with socialistic 
 theory. He who objects to the terms " pur- 
 chase " and " sale " as formed too specially for 
 capitalistic production of commodities and sub- 
 stitutes for them the conceptions " provision " 
 and " exchange," will then recognise all the 
 more clearly what a much greater importance 
 the former has for the community than has the 
 latter. The provision of goods is the funda- 
 mental general interest. With respect to it all 
 
119 
 
 the members are associates in principle. All 
 consume but all do not produce. Even the best 
 productive association, as long as it is only an 
 association for sale and exchange, will always 
 stand in latent opposition to the community, 
 will have separate interests as opposed to it. 
 With a productive association which carries on 
 any branch of production or public service on 
 its own account, the community would have the 
 same points of difference as with a capitalist 
 undertaking, and it depends altogether on 
 circumstances whether the arrangement with it 
 is an easier one. 
 
 But to return to the starting-point which has 
 led us to this discussion in the domain of the 
 theory of associations, sufficient has been shown 
 to prove that it is quite a mistake to believe 
 that the modern factory produces in itself a 
 considerable disposition for associated work. 
 And likewise the republic in the workshop 
 becomes a more difficult problem as the under- 
 taking becomes greater and more complicated. 
 For exceptional objects it may answer for men 
 themselves to name their immediate leaders 
 and to have the right to remove them. But for 
 the tasks which the management of a great 
 factory brings with it, where day by day and 
 hour by hour prosaic decisions are to be taken 
 which always give an opportunity for friction, 
 it is simply impossible that the manager should 
 be the employee of those he manages, that he 
 should be dependent for his position on their 
 favour and their bad temper. It has always 
 proved impossible to continue this, and in all 
 
cases it has led to a change in the forms of the 
 associated factory. The desire of the workers 
 to take in hand new undertakings where they 
 are employed as an associated manufactory 
 and are bearing corresponding responsibilities 
 and risks, stands in an inverse ratio to the 
 size of their undertaking. But the difficulties 
 grow at an increasing rate. 
 
 Let any one only for once look at the thing 
 in the concrete and examine any large industrial 
 undertaking, a great establishment for building 
 machines, large electricity works, a great 
 chemical factory, or a modern publishing busi- 
 ness. All these and similar large industrial 
 undertakings can certainly be quite well carried 
 on by co-operative associations, to which also 
 all the employees may belong, but they are 
 absolutely unfit for the associated management 
 of the employees themselves. It would then be 
 shown, in the clearest way possible, what Cunow 
 contends — ^viz., that the feeling of solidarity 
 between groups of workers, different as to 
 degree of education, manner of life, etc., is only 
 very moderate in amount. What one usually 
 understands by associated labour is only a mis- 
 taken rendering of the very simple forms of 
 co-operative work as they are practised by 
 groups, gangs, etc., of undifferentiated 
 workers, and which, at the bottom, is only piece- 
 work by groups.* 
 
 * " The thing was not easy. People like the cotton 
 workers do not easily range themselves in the ranks of 
 equality which are demanded for the successful conduct 
 of a society " {Sketch of the History of the Burnley 
 Self-help Association in Co-operative Workshops in Great 
 Britain, p. 20). 
 
(What the community itself cannot take in 
 hand, whether by the state, the district, or the 
 municipality, it would do very well, especially 
 in stormy times, to leave alone for the time 
 being. The apparently more radical action 
 would very soon prove to be the most in- 
 expedient. Co-operative associations capable of 
 living do not allow themselves to be produced 
 by magic or to be set up by order ; they must 
 grow up. But they grow up where the soil is 
 prepared for them.) 
 
 The British co-operative societies are in 
 possession to-day of the ;^i5, 000,000* which 
 Lassalle considered sufficient as state credit 
 for carrying out his association scheme. In 
 proportion to the British national wealth that 
 is only a small fraction ; after one subtracts the 
 capital invested abroad and the twice-reckoned 
 capital, it is not the hundredth part of the 
 national capital. But it does not exhaust by a 
 great deal the British workman's capital power, 
 and it is also steadily growing. It has nearly 
 doubled itself in the ten years from 1887 to 
 1897, and has grown faster than the number of 
 members. These rose from 851,211 to 
 1,468,955, the capital from 11.5 million pounds 
 sterling to 20.4. The production of the societies 
 has increased latterly still more quickly. Its 
 value in 1894 ran only into ;^4,950,ooo alto- 
 gether, and in 1897 it was already almost double 
 the amount, namely, ;^9,35o,ooo.j' 
 
 * See p. 115. • 
 
 ■f [In igo6 the membership was 2,334,641 ; the capital, 
 ;£'39,898,ooo ; the value of production, ;^i3,9S3,828.] 
 
These are such astonishing figures that when 
 one reads them one asks oneself involuntarily : 
 where are the limits of this growth? Enthu- 
 siasts on the system of co-operation have 
 reckoned that if the British societies accumu- 
 lated their profits instead of distributing them, 
 in the course of about twenty years they would 
 be in a position to buy the whole land of the 
 country with all the houses and factories. That 
 is, of course, a calculation after the manner of 
 the wonderful calculation of compound interest 
 on the celebrated penny invested in the year one. 
 It forgets that there is such a thing as ground 
 rent and assumes an increase of growth which 
 is a physical impossibility. It overlooks the fact 
 that it is almost impossible to win over the 
 poorest classes to a co-operative society or that 
 they can be won over to it only very gradually 
 at best. It overlooks the fact that in the agricul- 
 tural districts only a very limited sphere is open 
 to a co-operative society and that it can lessen 
 but cannot annihilate the expenses of the retail 
 trade, so that possibilities will always spring up 
 for the private undertakers to fit themselves 
 into the changed conditions, and thus a retarda- 
 tion of its growth from a certain point of time 
 becomes nearly a mathematical necessity. It 
 forgets above all things, or leaves out of con- 
 sideration, that without a distribution of divi- 
 dends the co-operative movement would 
 generally be at a standstill, that for large 
 classes of the population it is just the dividend, 
 that cursed apple of sin of the idealists of the 
 co-operative system, which forms the chief 
 
123 
 
 attraction of a co-operative society. If what is 
 often maintained to-day is very much exagger- 
 ated, namely, that the dividend of a co-operative 
 society is no measure of the greater cheapness 
 of its goods, that the single business sells most 
 goods just as cheaply, on the average, as the 
 co-operative store so that the dividend only 
 represents the sum of small, unnoticed rises 
 in the price of certain articles, still, the exaggera- 
 tion is not altogether unfounded. The work- 
 men's co-operative store is just as much a kind 
 of savings bank as a means of fighting the 
 exploitation which the parasitic retail trade 
 means for the working classes. 
 
 But as with many persons the impulse to save 
 is by no means very deep seated, they follow 
 the convenience of buying at the nearest shop 
 rather than put themselves to some trouble for 
 the sake of the dividend. Moreover, it would 
 be quite a mistake to say that England was 
 originally a particularly favourable soil for 
 co-operative societies. Quite the contrary. The 
 habits of the working classes, the great exten- 
 sion in area of the towns which the cottage 
 system brings with it, counterbalance in this 
 respect the influence of better wages. What 
 has been attained in England is the fruit of 
 the hard, unflinching work of organisation. 
 
 And it is labour which was, and is, worth 
 the trouble. ^Even if the co-operative store 
 did nothing more than lower the profit rate 
 in the retail trades, it would accomplish a work 
 extremely useful for the national economy. 
 And there can be no doubt that it does work in 
 
124 
 
 this directionj)^ Here is a handle by means of 
 which the working class can seize for itself a 
 considerable portion of the social wealth which 
 would otherwise serve to increase the income of 
 the propertied classes and thereby strengthen 
 them, and this, without direct destruction of life, 
 without recourse to force which, as we have 
 seen, is no simple affair.} 
 
 We Can consider it as proved that the 
 co-operative society has shown itself to be an 
 economic factor of importance, and if other 
 countries are behind England in this, it has 
 taken firm root in Germany, France, Belgium, 
 etc., and gains ground more and more. I 
 forebear quoting numbers because the fact 
 is well known, and continual figures are 
 wearisome. Of course legal trickery can hinder 
 the spread of co-operative societies and the full 
 development of their innate possibilities, and 
 their success is again dependent on a certain 
 degree of economic development; but here, we 
 are above all concerned with showing what 
 co-operation can do. And if it is neither 
 necessary nor possible that the associations as 
 we know them to-day can ever take possession 
 of all production and distribution of commodi- 
 ties, and if the widening domain of public 
 service in the state and the municipal and 
 district councils puts limits on the other side, 
 yet on the whole a very wide field is open to 
 co-operation, so that, without lapsing into the 
 co-operative Utopias I have referred to, we are 
 justified in expecting very mudh from it. If in 
 a little over fifty years out of the movement 
 
"5 
 
 which began with the ;^28 of the weavers of 
 Rochdale an organisation has developed which 
 handles a capital of ;^20,ooo,ooo, it would need 
 great courage to be willing to prophesy how 
 near we are to the point of time when the limit 
 of its growth is reached, and what forms of the 
 movement are still slumbering in the unknown 
 years of the future. 
 
 (To many socialists the co-operative move- 
 ment is not quite acceptable because it is too 
 " bourgeois.") There are salaried officials and 
 workmen employed for wages ; profits are made, 
 interest is paid, and disputes occur about the 
 amount of the dividends. Certainly if one kept 
 to forms, the public elementary school, for 
 example, is a much more socialistic institution 
 than the co-operative society. But the develop- 
 ment of public services has its limits and needs 
 time, and meanwhile the co-operative society 
 is the easiest accessible form of association for 
 the working class, just because it is so 
 " bourgeois. " As it is Utopian to imagine that 
 the community could jump into an organisation 
 and manner of living diametrically opposed to 
 those of the present day, so it would also be 
 Utopian to make a beginning with the most 
 difficult form of associated organisation. 
 
 ^Meanwhile co-operative production also will 
 be realised though probably in other forms than 
 the first theorists of the co-operative system 
 imagined. For the present moment it is the 
 most difficult form of the realisation of the 
 co-operative ideai It has already been mentioned 
 that the English co-operators handle more than 
 
126 
 
 the ;^i 5,000,000 which Lassalle demanded for 
 his scheme of association. And if the matter 
 were only a financial question other pecuniary 
 resources would be at their disposal. The 
 friendly societies, the trade unions hardly know 
 where to invest their accumulated funds. But 
 it is not exactly, or not only, a question of 
 financial resources. Nor is it a question of 
 erecting new factories for a market already 
 supplied. Opportunity is not lacking for buying 
 existing and well provided factories. It is now 
 to a great extent a question of organisation and 
 management, and therein much is still lacking. 
 " Is it, in the first place, capital that we 
 need, ' ' we read in an article in the Co-operative 
 News, the central periodical of the British 
 Society; and the writer of the article answers 
 the question with a decided negative. "As it 
 appears, we have at present at our disposal some 
 ;£io,ooo,ooo, which are only waiting to be 
 employed in a co-operative way, and a further 
 ;^io, 000,000 could doubtless be quickly pro- 
 cured if we were fully in a position to apply it 
 usefully in our movement. Do not let us, 
 therefore, conceal the fact — for it is a fact — 
 that even at the present hour in the co-operative 
 world there is a greater need of more intelli- 
 gence and capacity than of more money. How 
 many among us would buy nothing that was 
 not made and finished under co-operative con- 
 ditions, if it were possible to live up to this 
 ideal? How many of us have not again and 
 again attempted to use goods made by co- 
 operators without being perfectly satisfied ?* 
 * December 3rd, i8g8. 
 
127 
 
 In other words, financial means alone will not 
 solve the problem of co-operative work. It 
 needs, leaving other hypotheses out of the 
 question, its own organisation and its own 
 leaders, and neither are improvised. Both must 
 be sought for and tried, and it is, therefore, 
 more than doubtful whether a point of time in 
 which all feelings are heated and all passions 
 excited, as in a revolution, can be in any way 
 conducive to the solution of this problem which 
 has already proved to be so difficult in ordinary 
 times. In human judgment the contrary must 
 be the case. 
 
 (I have not here to enlarge on other forms of 
 the co-operative system (loan societies, credit 
 societies, raw materials, and warehouse associa- 
 tions, dairy farm associations, etc.), for these 
 are of no importance to the wage-earning class. 
 Nevertheless owing to the importance which 
 the question of small farmers (who also belong 
 to the working classes even if they are not wage 
 earners) has for social democracy, and in view 
 of the fact that handicrafts and small trades 
 play a still noticeable part, at least according 
 to the number of persons employed in them, I 
 must point out the advance which the co-opera- 
 tive system has attained in these directions.) 
 The advantages of the co-operative purchase of 
 seeds, of the co-operative purchase of machines, 
 and the co-operative sale of produce, as well as 
 the possibility of cheap credit, cannot save 
 peasants already ruined, but they are a means 
 of protecting from ruin thousands and tens of 
 thousands of small peasants. There can be no 
 
128 
 
 doubt of that. There are unusually abundant 
 opportunities to-day for the acquisition of small 
 holdings. It would be rash to say, as some 
 writers do, that for agriculture, with reference 
 to the advantages of large and small under- 
 takings, exactly the opposite law holds good as 
 for industry. But it is not too much to say 
 that the difference is quite extraordinary, and 
 that the advantages which the large farm, 
 powerful in capital and well equipped, has over 
 the small are not so important that the small 
 holding could not make up for them to a great 
 extent by a fuller use of the system of co- 
 operation. The use of mechanical power, the 
 procuring of credit, the better security of sale — 
 co-operation can make all these accessible to the 
 peasant whilst the nature of his farming makes 
 it easier for him to overcome occasional losses 
 than is possible for the larger farmer. For the 
 great masses of peasants are not always simply 
 producers of commodities; they themselves 
 raise a considerable share of their necessary 
 food.* 
 
 In all countries of advanced civilisation the 
 co-operative system quickly increases in extent 
 and scope. Belgium, Denmark, France, Hol- 
 land, and lately also Ireland, show herein no 
 different picture from Germany. It is important 
 that social democracy instead of fishing out of 
 statistics proofs for the preconceived theory of 
 
 * In Prussia, from 1895 to 1907, the small holdings 
 of 3 to zo hectares (74 to 50 acres) have increased from 
 6981357 to 760,315, and the area they cover has also 
 considerably increased, whilst that of the larger holdings 
 has decreased. 
 
139 
 
 the ruin of the class of small farmers should 
 examine searchingly this question of the 
 co-operative movement in the country and its 
 importance. The statistics of forced sales, 
 mortgage incumbrances, etc., are in many 
 respects misleading. Undoubtedly landed pro- 
 perty to-day is more mobile than ever ; but this 
 mobility does not work only from one side. 
 Until now the openings which the forced sales 
 have made have always been filled again. 
 
 As far as the agricultural classes are con- 
 cerned we are face to face with the fact that 
 however many co-operative arrangements they 
 have made, one thing in co-operation has 
 always hitherto been withheld from them : the 
 cultivation of the land itself, that is the farming 
 of field and meadow and actual cattle rearing. 
 Different kinds of work linked with farming and 
 attached to it are carried on co-operatively, or 
 at least for co-operative societies, but farming 
 itself withdraws here and elsewhere from 
 co-operative work. Is co-operation less advan- 
 tageous for it than for other industries ? Or is 
 it simply the peasant's landed property that 
 stands in the way?) 
 
 The fact has already been emphasised often 
 that the division of the land among many 
 owners is a great hindrance to the co-operative 
 cultivation of the soil. But it does not form 
 the only hindrance, or, to express it differently, 
 it increases its real difficulties but is not usually 
 the cause of them. The separation by distance 
 of the workers, as wel l as the ind ividualist cha r- 
 ^ptpr nf a g reat p arToTagricuItu ral work, plays 
 
130 
 
 likewise a part. It is possible that the peasants' 
 syndicates which are still so young may get over 
 these hindrances in their further development, 
 or — ^which seems to me most probable — ^they 
 will be driven gradually beyond their present 
 limits. Meanwhile they cannot yet be reckoned 
 with. 
 
 Even agricultural production for co-operative 
 societies is at the present time an unsolved 
 problem. The English co-operative stores have 
 done no worse business with any undertakings 
 than with their farms. Nowhere do the peasants 
 gain greater profit from the soil than in Scot- 
 land. The figures of profit for wheat, oats, etc. , 
 per acre are much higher in Scotland than in 
 England. But a farm of Scottish co-operators 
 furnished with good machines representing a 
 capital of ;^i2,soo has proved a great failure. 
 For 1894 it made a profit of six-tenths per cent., 
 for 189s a loss of 8. i per cent. But how does 
 it stand with the associations of agricultural 
 labourers ? Does the productive co-operation of 
 agricultural labourers offer better prospects 
 than the productive co-operation of industrial 
 workers ? 
 
 The question is all the more difficult to 
 answer because sufficient practical examples are 
 wanting. The classical example of such a 
 co-operative society, the celebrated association 
 of Ralahine, lasted too short a time (1831 — 
 1833), and whilst it lasted was too much under 
 the influence of its founder Vandeleur and his 
 agent Craig for it to be able to serve as a 
 valid proof of the living power of independent 
 
'31 
 
 associations of workers on the land. It only 
 shows the great advantages of association under 
 certain circumstances and assumptions. 
 
 Qrhe experiences of the communistic colonies 
 are the same. These latter succeed in actual 
 or practical isolation for a long time under 
 circumstances one would consider most un- 
 favourable. But as soon as they attained a 
 greater degree of prosperity and entered into 
 more intimate intercourse with the outer world 
 they decayed quickly^ Only a strong religious 
 or other bond, a sectarian wall raised between 
 them and the surrounding world, apparently, 
 will keep these colonies together when they 
 have attained wealth. But the fact that it is 
 necessary for men to be limited in their develop- 
 ment in some way, in order that such colonies 
 should flourish, proves that they can never be 
 the general type of associated labour. They 
 stand for Socialism at a stage of pure industrial 
 productive association. But they have acted as 
 a glowing proof of the advantages of co- 
 operation. 
 
 On the basis of all these facts and of the 
 experiments which intelligent landlords have 
 made with co-operative leases, sharing profits 
 with agricultural labourers, etc.. Dr. F. 
 Oppenheimer has developed in the already 
 mentioned volume the idea of an agricultural 
 association which he calls " Siedlungsgenos- 
 senschaft " (Colonising Co-operative Associa- 
 tion). It is to be an association of agricultural 
 labourers, or, is to begin as such, and is to 
 combine individual with co-operative manage- 
 
132 
 
 ment — that is, small farming with associated 
 work on a large scale, as is the case to-day on 
 large estates where plots on the outskirts are 
 let off in allotments at a more or less high rent, 
 and which are often managed in a more exem- 
 plary manner. Oppenheimer conceived of a 
 corresponding division in his Siedlungsgenos- 
 senschaft Association, only, that here the 
 intention naturally is not to lower the price of 
 labour for the central farming round which 
 those small holdings are grouped, but really 
 that opportunity shall be given to every single 
 member to enjoy on a sufficiently large piece of 
 land all the material and other charms of a 
 farm of his own and to employ in its culture all 
 the labour power not needed for the central 
 farm of the association, which promises him the 
 best returns or otherwise best suits his individu- 
 ality. But for the rest the association is'|o 
 utilise all the advantages of the modern large 
 enterprise and all co-operative and mutual 
 arrangements are to be adopted for the business 
 needs, etc., of the members. 
 
 This is not the place to examine more closely 
 the Oppenheimer proposal and the theory on 
 which it is based. But I think I must just 
 observe that they do not seem to me to deserve 
 the contempt which has been their portion in 
 some of the social democratic publications. 
 One can doubt whether the thing can or will 
 be worked out quite exactly in the form 
 developed by Oppenheimer. But the funda- 
 mental thoughts which he develops depend 
 greatly on the scientific analysis of the forms 
 
133 
 
 of management and agree moreover with all the 
 experiences of co-operative practice, so that one 
 can indeed say that if the co-operative method 
 of farming is ever brought to pass, it can 
 scarcely happen in any form materially different 
 from the one worked out by Oppenheimer.* 
 
 The expropriation on a larger scale which is 
 mostly thought of in the criticism of such pro- 
 posals cannot in any case produce organic 
 creations in a night by magic, and therefore the 
 most powerful revolutionary government would 
 be compelled to face the task of looking for a 
 practical theory of co-operative work in 
 agriculture. For such a work Oppenheimer has 
 brought together most abundant materials and 
 has submitted them to a sharp systematic 
 analysis, which by itself made the " Siedlungs- 
 genossenschaft " worth studying. 
 
 ^here is still one more remark to make with 
 regard to agricultural co-operation. As far as 
 the Socialist is a party politician he can only 
 greet with satisfaction the present immigration 
 from the country into the towns. It concen- 
 trates the masses of workers, revolutionises 
 
 * In the congress of the British Co-operative Society 
 (Peterborough, May, 1898) a delegate, Mr. J. C. Gray, 
 of Manchester, read a report on co-operation and 
 agriculture, in which he, after an objective examina- 
 tion of all experiments made in England, finally makes 
 a proposal which is wonderfully like Oppenheiraer's 
 project. " The soil is to be common property, the 
 providing of all stock is to be co-operative and so is the 
 sale of all products. But in the cultivation of the soil 
 the individual interests must be attended to with due 
 regard against interference with the interests of the 
 community." — {Co-operation and Agriculture, Manches- 
 ter, 1898, p. 9.) 
 
134 
 
 their minds, and at any rate furthers emancipa- 
 tion. But as a theorist who thinks beyond the 
 present day the Socialist must also say that this 
 migration in the course of time may become too 
 much of a good thing.) It is well known to be 
 infinitely easier to draw country people into the 
 towns than to draw dwellers in towns into the 
 country and accustom them to agricultural 
 work. Thus the stream of immigration into 
 the towns and industrial centres does not only 
 increase the problems of the present rulers. Let 
 us take, for example, the case of a victory of 
 the working class democracy which brings the 
 Socialist Party to the helm. According to all 
 experience hitherto its immediate result would 
 presumably be first of all to increase markedly 
 the stream into the great towns, and it is in 
 some measure doubtful whether the " industrial 
 armies for agriculture " would allow them- 
 selves to be sent more willingly into the country 
 than in France in 1848. But apart from that, 
 the creation of co-operative associations capable 
 of life and guidance will be under all circum- 
 stances a heavy task the further the depopulation 
 of the country has advanced. The advantage of 
 the existence of models of such associations 
 would not be bought so very dearly at the price 
 of a somewhat slower rising of the monstrous 
 towns.* 
 
 * I see with pleasure that Karl Kautsky in his work 
 on the agricultural question which has just appeared, 
 has taken the problem of co-operation on the land 
 seriously into examination. What he says of the 
 obstacles that hinder the conversion of the peasants' 
 small holdings into large associations for carrying on 
 
I3S 
 (c) Democracy and Socialism. 
 
 " On February 24th, 1848, broke the first 
 dawn of a new period of history." 
 
 " Who speaks of universal suffrage utters 
 a cry of reconciliation." 
 
 Lassalle, Workers' Programme. 
 
 (The trade unions concern themselves with the ' 
 profit rate in production as the co-operative 
 stores concern themselves with the profit rate 
 on the sale of goods.) The fight of the workmen 
 organised in trade unions for the improvement 
 
 agricultural work, fully agrees with what Oppenheimer 
 works out on the same subject. Kautsky expects the 
 solution of the problem from the influence of indus- 
 trial developments and the conquest of political power 
 by the proletariat. He says evolution brings the 
 peasants to-day always more and more into dependence 
 on capitalistic enterprises, as distilleries, breweries, 
 sugar factories, flour mills, butter and cheese factories, 
 wine cellarages, etc., and makes them casual or tem- 
 porary workers in other kinds of capitalist undertakings, 
 such as brickfields, mines, etc., where to-day small 
 cultivators take temporary work in order to make up for 
 the deficit of their holdings. With the socialisation of 
 all these undertakings the peasants would become " co- 
 operative workers," temporary workers of socialistic 
 associated undertakings, whilst on the other side the 
 proletarian revolution would lead to the conversion of 
 large agricultural holdings, on which to-day a great 
 number of the small cultivators are dependent, into 
 co-operative undertakings. Thus the small agricultural 
 holdings would lose their consistency more and more, 
 and their combination into co-operative holdings would 
 meet with fewer difficulties. Nationalisation of mort- 
 gages and cessation of militarism would facilitate this 
 evolution. 
 
 In all this there is much that is right, only Kautsky 
 appears to me to fall into the error of considerably over- 
 estimating the forces working in the direction desired 
 by him. Some of the industrial undertakings which he 
 enumerates are not on the high way to control industrially 
 
136 
 
 of their standard of life is from the standpoint 
 of the capitalist a fight between wage rate and 
 profit rate. It is certainly too great an exag- 
 geration to say that the changes in the rates of 
 wages and the hours of labour have no influence 
 at all on prices. If the wages of workers in a 
 certain industry rise, the value of the corres- 
 ponding products rises in a corresponding ratio 
 as against the value of the product of all indus- 
 tries which experience no such rise in wages, 
 and if the class of employers concerned do not 
 succeed in meeting this rise by an improvement 
 
 small farms, but to become dependencies of agricultural 
 associations and with others, as, for example, the brew- 
 ing business, their connection with agricultural holdings 
 is too loose for a change in their nature to exercise a 
 strong reaction on the forms of the latter. It is just 
 the largest sugar factories that belong, in Germany, to 
 associations of big and small cultivators. Further, 
 Kautsky allows himself, in my opinion, to be led away 
 too much by the strong words which he now and then 
 uses, to conclusions which would be correct if those 
 words were true generally ; but as they are only partially 
 true, they cannot claim general acceptance. To make 
 this clearer : In Kautsky the life of small farmers 
 appears a sort of a hell. That can be said with justice of 
 a great number of small farmers, but of anotjfier large 
 number it is gross exaggeration, just as to-day in many 
 cases one is not now justified in speaking of small 
 farmers as " modern barbarians." It is a similar 
 exaggeration to call the work which the small farmer 
 performs on neighbouring estates, because his holding 
 does not occupy him fully, slaves' work. By the use 
 of such expressions assumptions are maintained which 
 allow feelings and tendencies to be assumed to be general 
 in those classes when, in reality, they are only 
 exceptional. 
 
 If I cannot agree with all Kautsky's conclusions on 
 the probable development of small farming, I am all the 
 more at one with him in the principles of his agrarian 
 political programme to be carried out by social demo- 
 cracy. 
 
137 
 
 of machinery, they must either raise the price 
 of the product concerned or suffer a loss in 
 the profit rate. In this respect the different 
 industries are very differently placed. There 
 are industries which, on account of the nature 
 of their products or of their monopolistic 
 organisation, are fairly independent of the world 
 market, and then a rise in wages is mostly 
 accompanied by a rise in prices also, so that 
 the profit rate does not need to fall but can 
 even rise.* 
 
 In industries for the world market, as in all 
 other industries where commodities produced 
 under various conditions compete with one 
 another, and only the cheapest command the 
 market, the rise in wages almost always 
 results in a lowering of profit rate. The same 
 result occurs when, by the resistance of organ- 
 ised workers, an attempt fails to neutralise by 
 a proportional lowering of wages, the lowering 
 of prices rendered necessary by the struggle to 
 sell. After all, a fight of the workers for wages 
 can, in fact, be but a fight against the rise in 
 the profit-rate at the cost of the wage-rate, 
 however little the fighters are conscious of it 
 at the moment. 
 
 0'here is no need to prove here that the 
 fight regarding hours of labour is similarly a 
 fight over the profit-ratej If the shorter day 
 of labour does not directly cause a diminution 
 in the amount of work done for the wage given 
 
 * Amongst others Carey relies on this partial truth in 
 his Doctrine of Harmony. Certain extractive industries 
 — mines, etc. — afford examples of it. 
 
138 
 
 hitherto — in many cases it is known the reverse 
 happens — ^yet it leads by a side way to an 
 increase in the workers' demands for better 
 conditions of life, and so makes a rise in wages 
 necessary. 
 
 [A rise in wages leading to an increase in 
 prices does not, under certain circumstances, 
 need to be an injury to the whole community; 
 but is, however, more often harmful than use- 
 ful in its effect.) To the community, for 
 instance, it makes no particular difference 
 whether an industry exacts monopolist prices 
 exclusively for a handful of employers, or 
 whether the workers of that industry receive a 
 certain share in such booty squeezed out of 
 the public in general. The monopoly price is 
 just as much worth fighting against as the 
 cheapness of products which can only be 
 achieved by the lowering of wages below the 
 average minimum rate. (But a rise in wages 
 which only touches profit-rate must, under the 
 conditions of the present day, be advanta- 
 geous for the community in general. I say in 
 general expressly, because there are also cases 
 when the contrary is the case^ 
 
 Fortunately, such extreme cases are very 
 rare. Usually the workers know quite well 
 how far they can go in their demands. The 
 profit-rate, indeed, will bear a fairly strong 
 pressure. Before the capitalist gives up his 
 undertaking he will rather try every possible 
 means to get a greater output for wages in 
 other ways. The actual great differences of 
 profit-rates in different spheres of production 
 
139 
 
 show that the general average profit-rate is 
 constructed more easily in theory than even 
 approximately realised. Instances are also 
 not rare where even new capital that enters the 
 market needing to be utilised does not seek the 
 spot to which the highest profit-rate points, 
 but, like a man in choosing his calling, allows 
 itself to be guided by considerations in which 
 the amount of profit takes a secondary place. 
 Thus, even this most mighty factor for 
 levelling profit-rates works irregularly. But 
 the capital already invested, which greatly 
 preponderates in each case, cannot for purely 
 material reasons follow the movement of the 
 profit-rate from one field of production to 
 another, (in short, the result of a rise in the 
 price of human labour is, in by far the largest 
 majority of cases, partly the greater perfection 
 of machinery and the better organisation of 
 industry, partly the more equable division of 
 the surplus product. Both are advantageous to 
 the general well-being./ With certain limitations 
 one can for capitalist countries modify Destutt 
 de Tracy's well-known saying to : " Low profit- 
 rates indicate a high degree of well-being among 
 the mass of the people." 
 ^he trade unions are the democratic element" 
 in industry. Their tendency is to destroy the 
 absolutism of capital, and to procure for the 
 worker a direct influence in the management 
 of an industry. It is only natural that great 
 differences of opinion should exist on the 
 degree of influence to be desired. To a certain 
 mode of thought it may appear a breach of 
 
140 
 
 /principle to claim less for the union than an 
 unconditional right of decision in the trade. 
 The knowledge that such a right under present 
 circumstances is just as Utopian as it would 
 be contrary to the nature of a socialist com- 
 munity, has led others to deny trade unions 
 any lasting part in economic life, and to recog- 
 nise them only tennporarily as the lesser of 
 various unavoidable evils. There are socialists 
 in whose eyes the union is only an object 
 lesson to prove the uselessness of any other 
 than political revolutionary action. As a matter 
 of fact, the union to-day — and in the near future 
 — has very important social tasks to fulfil for 
 the trades, which, however, do not demand, nor 
 are even consistent with, its omnipotence in 
 any way. 
 
 \The merit of having first grasped the fact 
 tha^ trade unions are indispensable organs of 
 It^'jdemocracy, and not only passing coalition^ 
 belongs to a group of English writersX This 
 is not wonderful if one considers that trade 
 unions attained importance in England earlier 
 than anywhere else, and that England in the 
 last third of the nineteenth century passed 
 through a change from an oligarchic to an 
 almost democratic state of government. The ' 
 latest and most thorough work on this subject, 
 the book on the theory and the practice of the 
 British Trade Unions, by Sydney and Beatrice 
 Webb, has been rightly described by the 
 authors as a treatment, of Industrial Demo- 
 cracy. Before them the late Thorold Rogers, 
 in his lectures on the Economic Interpretation 
 
141 
 
 of History (which, in the passing, has little in 
 common with the materialist conception of 
 history, but only touches it in single points), 
 called the trade union. Labour Partnership — 
 which comes to the same thing in principle, 
 but at the same time points out the limits to 
 which the function' of a trade union can extend 
 in a democracy, and beyond which it has no 
 place in a democratic community. N/Indepen^"" 
 dently of whether the state, the community, or 
 capitalists are employers, the trade union as an 
 organisation of all persons occupied in certain 
 trades can only further simultaneously the 
 interests of its members and the general good 
 as long as it is content to remain a partner. 
 Beyond that it would run into danger of 
 degenerating into a close corporation with all 
 the worst qualities of a monopoly.. f^ It is the 
 same as with the co-operative society.\ The 
 trade union, as mistress of a whole branch of 
 production, the ideal of various older socialists, 
 would really be only a monopolist productive 
 association, and as soon as it relied on its 
 monopoly or worked upon it, it would be 
 antagonistic to socialism and democracy, let 
 its inner constitution be what it may. Why 
 it is contrary to socialism needs no further 
 explanation. Associations against the com- 
 munity are as little socialism as is the oligarchic 
 government of the state/ But why should such^ 
 a trade union not be In keeping with the 
 principles of a democracy?/ 
 
 This question necessitates another. What 
 is the principle of democracy? 
 
142 
 
 The answer to this appears very simple. At 
 first one would think it settled by the defini- 
 tion " government by the people." But even 
 a little consideration tells us that by that only 
 quite a superficial, purely formal definition is 
 given, whilst nearly all who use the word 
 democracy to-day understand by it more than a 
 mere form of government. ^We shall come 
 much nearer to the definition if we express 
 ourselves negatively, and define democracy as 
 an absence of class government, as the 
 indication of a social condition where a political 
 privileg? belongs to no one class as opposed to 
 the whole community. By that the explanation 
 is already given as to why a monopolist cor- 
 poration is in principle anti-democratic. This 
 negative definition has, besides, the advantage 
 that it gives less room than the phrase 
 "government by the people" to the idea of the 
 oppression of the individual by the majority 
 which is absolutely repugnant to the modern 
 mind. To-day we find the oppression of the 
 minority by the majority " undemocratic," 
 although it was originally held to be quite con- 
 sistent with government by the people.* The 
 
 * The consistent advocates of Blanquism also always 
 conceived of democracy as at first an oppressive force. 
 Thus Hippolyte Castille publishes a preliminary intro- 
 duction to his History of the Second Republic which 
 culminates in a veritable glorification of the Reign of 
 Terror. " The most perfect community," he says, 
 " would be where tyranny was an affair of the whole 
 community. That proves fundamentally that the most 
 perfect society would be one where there is least freedom 
 in the satanic (i.e., individualistic) meaning of this 
 word. . . . What is called political freedom is only a 
 beautiful name to adorn the justifiable tyranny of the 
 
143 
 
 idea of democracy includes, in the conception of 
 the present day, a notion of justice — an equality 
 of rights for all members of the community, 
 and in that principle the rule of the majority, 
 to which in every concrete case the rule of the 
 people extends, finds its limits. The more it 
 is adopted and governs the general conscious- 
 ness, the more will democracy be equal in 
 meaning to the highest possible degree of free- 
 dom for all^ 
 
 Democracy is in principle the suppression of 
 
 many. Political freedom is only the sacrifice of the 
 freedom of a number of individuals to the despotic God 
 of human societies, to social reason, to the social con- 
 tract." "From this epoch (the time from October, 1793, 
 to April, 1794, when Girondists, Hebertists, Dantonists, 
 were beheaded one after the other) dates in truth 
 the re-incarnation of the principle of authority, of this 
 eternal defensive warfare of human societies. Freed 
 from the moderates and the 'ultras, secured against every 
 conflict of authority, the committee of public safety 
 acquires the form of government necessitated by the 
 given circumstances, th^ necessary force and unity to 
 maintain its position atid to protect France from a 
 threatening anarchy. . . . No, it is not the government 
 that killed the first French Republic, but the Parlia- 
 mentarians, the traitors of Thermidor. The anarchist 
 and liberal republicans whose swarming hordes covered 
 France, continue in vain the old calumny. Robespierre 
 remains a remarkable man, not on account of his talents 
 and virtues, which are here incidental, but on account 
 of his genius for authority, on account of his strong 
 political instinct." 
 
 This worship of Robespierre was not to outlast the 
 second Empire. To the younger generation of the 
 Blanquist socialist revolutionaries who stepped on the 
 stage in the middle of the 'sixties and who were above 
 all anti-clerical, Robespierre was too philistine on account 
 of his Deism. They swore by Hebert and Anacharsis 
 Cloots. But for the rest they reasoned like Castille — 
 i.e., they carried out to extremes, like him, the just idea 
 of the subordination of individual interests to the general 
 interests of the community. 
 
144 
 
 class government, though it is not yet the 
 actual suppression of classes. They speak of 
 the conservative character of the democracy, 
 and to a certain degree rightly. Absolutism, 
 or semi-absolutism, deceives its supporters as 
 well as its opponents as to the extent of their 
 power. Therefore in countries where it obtains, 
 or where its traditions still exist, we have flit- 
 ting plans, exaggerated language, zigzag 
 politics, fear of revolution, hope in oppression. 
 In a democracy the parties, and the classes 
 standing behind them, soon learn to know the 
 limits of their power, and to undertake each 
 time only as much as they can reasonably hope 
 to carry through under the existing circum- 
 stances. Even if they make their demands 
 rather higher than they seriously mean in order 
 to give way in the unavoidable compromise — 
 and democracy is the high school of com- 
 promise — they must still be moderate. ^The 
 
 ■right to vote in a democracy makes its mem- 
 bers virtually partners in the community, and 
 this virtual partnership must in the end lead to 
 real partnership.? With a working class unde- 
 veloped in numbers and culture the general 
 right to vote may long appear as the right to 
 choose "the butcher"; with the growing 
 number and knowledge of the workers it is 
 changed, however, into the implement by which 
 
 rto transform the representatives of the people 
 from masters into real servants of the peopIeJ 
 Universal suifrage in Germany could serve 
 Bismarck temporarily as a tool, but finally it 
 compelled Bismarck to serve it as a tool. It 
 
MS 
 
 could be of use for a time to the squires of the 
 East Elbe district, but it has long been the 
 terror of these same squires. In 1878 it could 
 bring Bismarck into a position to forge the 
 weapon of socialistic law, but through it this 
 weapon became blunt and broken, until by the 
 help of it Bismarck was thoroughly beaten. 
 Had Bismarck in 1878, with his then majority, 
 created a politically exceptional law, instead of 
 a police one, a law which would have placed the 
 worker outside the franchise, he would for a 
 time have hit social democracy more sharply 
 than with the former. It is true, he would 
 then have hit other people also. (Universal 
 franchise is, from two sides, the alt^native to 
 a violent revolution. But universal suffrage is 
 only a part of democracy,*) although a part 
 which in time must draw the other parts after 
 it as the magnet attracts to itself the scattered 
 portions of iron. It certainly proceeds more 
 slowly than many would wish, but in spite of 
 that it is at work. And feocial democracy can- 
 not further this work better than by taking its 
 stand unreservedly on the theory of democracy 
 — on the ground of universal suffrage with all 
 the consequences resulting therefrom to its 
 tactics. ") 
 
 In practice — that is, in its actions — it has in 
 Germany always done so. But in their explana- 
 tions its literary advocates have often acte d 
 otherwise, and still often do so to-day. Phrases 
 which were composed in a time when the poli- 
 tical privilege of property ruled all over 
 Europe, and which under these circumstances 
 
146 
 
 were explanatory, and to a certain degree also 
 justified, but which to-day are only a dead 
 weight, are treated with such reverence as 
 though the progress of the movement depended 
 on them and not on the understanding of what 
 . can be done, and what should be done. (Is 
 there any sense, for example, in maintaining 
 the phrase of the " dictatorship of the prole- 
 tariat " at a time when in all possible places 
 representatives of social democracy have placed 
 themselves practically in the arena of Parlia- 
 mentary work, have declared for the propor- 
 tional representation of the people, and for 
 direct legislation — all of which is inconsistent 
 with a dictatorship.) 
 
 The phrase is to-day so antiquated that it is 
 only to be reconciled with reality by stripping 
 the word dictatorship of its actual meaning 
 and attaching to it some kind of weakened 
 interpretation. The whole practical activity of 
 social democracy is directed towards creating 
 circumstances and conditions which shall 
 render possible and secure a transition (free 
 from convulsive outbursts) of the modern social 
 order into a higher one. From the consciousness 
 of being the pioneers of a higher civilisation, 
 its adherents are ever creating fresh inspiration 
 and zeal. In this rests also, finally, the moral 
 justification of the socialist expropriation 
 towards which they aspire. But the " dicta- 
 torship of the classes " belongs to a lower 
 civilisation, and apart from the question of the 
 expediency and practicability of the thing, it 
 is only to be looked upon as a reversion, as 
 
147 
 
 political atavism. (If the thought is aroused 
 that the transition from a capitalist to a socialist 
 society must necessarily be accomplished by 
 means of the development of forms of an age 
 which did not know at all, or only in quite an 
 imperfect form, the present methods of- the 
 initiating and carrying of laws, and which was 
 without the organs fit for the purpose, reactio n 
 will set in.^ 
 
 I say expressly transition from a capitalist 
 to a socialist society, and not from a " civic 
 society, "as is so frequently the expression used 
 to-day. This application of the word " civic " 
 is also much more an atavism, or in any case 
 an ambiguous way of speaking, which must be 
 considered an inconvenience in the phraseology 
 of German social democracy, and which forms 
 an excellent bridge for mistakes with friend 
 and foe. The fault lies partly in the German 
 language, which has no special word for the 
 idea of the citizen with equal civic rights 
 separate from the idea of privileged citizens. 
 
 What is the struggle against, or the aboli- 
 tion of, a civic society? What does it mean 
 specially in Germany, in whose greatest and 
 leading state, Prussia, we are still constantly 
 concerned with first getting rid of a great part 
 of feudalism which stands in the path of civic 
 development? No man thinks of destroying 
 civic society as a civilised ordered system of 
 society. On the contrary, social democracy' 
 does not wish to break up this society and make 
 all its members proletarians together; it 
 labours rather incessantly at raising the worker 
 
148 
 
 from the social position of a proletarian to that 
 of a citizen, and thus to make citizenship uni- 
 versal. (It does not want to set up a proletarian 
 society instead of a civic society, but a socialist 
 order of society instead of a capitalist one) 
 It would be well if one, instead of availing 
 himself of the former ambiguous expression, 
 kept to the latter quite clear declaration. Then 
 one would be quite free of a good portion of 
 other contradictions which opponents, not quite 
 without reason, assert do exist between the 
 phraseology and the practice of social demo- 
 cracy. A few socialist newspapers find a 
 pleasure to-day in forced anti-civic language, 
 which at the most would be in place if we lived 
 in a sectarian fashion as anchorites, but which 
 is absurd in an age which declares it to be no 
 offence to the socialist sentiment to order one's 
 private life throughout in a " bourgeois 
 fashion."* 
 
 (Finally, it is to be recommended that some 
 moderation should be kept in the declaration of 
 war against " liberalism." It is true that the 
 great liberal movement of modern times arose 
 
 * In this point Lassalle was much more logical than 
 we are to-day, granted that it was one-sidedness to 
 derive the idea of the bourgeois simply from political 
 privilege instead of at least from his economic position 
 of power also. But for the rest he was sufficient realist 
 to blunt beforehand the point of the above contradiction 
 when he declared in the Workers' Programme: "In the 
 German language the word ' bourgeoisie ' had to be 
 translated by ' Biirgerthum ' (citizendom). But it 
 has not this meaning with me. We are all citizens 
 (' Burger ') — the workman, the poor citizen, the rich 
 citizen, and so forth. In the course of history the word 
 ' bourgeoisie ' has rather acquired a meaning by which 
 
149 
 
 for the advantage of the capitalist bourgeoisie 
 first of all, and the parties which assumed the 
 names of liberals were, or became in due 
 course, simple guardians of capitalism. 
 Naturally, only opposition can reign between 
 these parties and social democracy. But with 
 respect to liberalism as a great historical 
 movement, socialism is its legitimate heir, not 
 only in chronological sequence, but also in its 
 spiritual qualities, as is shown moreover in 
 every question of principle in which social 
 democracy has had to take up an attitude^ 
 
 Wherever an economic advance of the 
 socialist programme had to be carried out in 
 a manner, or under circumstances, that 
 appeared seriously to imperil the development 
 of freedom, social democracy has never shunned 
 taking up a position against it. The security 
 of civil freedom has always seemed to it to 
 stand higher than the fulfilment of some 
 economic progress. 
 
 iThe aim of all socialist measures, even of 
 those which appear outwardly as coercive 
 measures, is the development and the securing 
 of a free personality^ Their more exact 
 
 to denote a well defined, political line of thought " 
 (Collected Works, II., p. 27). What Lassalle further 
 says there of the distorted logic of Sansculottism is 
 especially to be recommended to writers in the belles 
 lettres style who study the middle class "naturalistically" 
 in the cafi and then judge the whole class according to 
 their dried fruits, as the philistine thinks he sees the 
 type of the modern workman in his fellow tippler. I 
 feel no hesitation in declaring that I consider the middle 
 class — not excepting the German — ^in their bulk to be 
 still fairly healthy, not only economically, but also 
 morally. 
 
ISO 
 
 examination always shows that the coercion 
 included will raise the sum total of liberty 
 in society, and will give more freedom over a 
 more extended area than it takes away. The 
 legal day of a maximum number of hours' 
 work, for example, is actually a fixing of a 
 minimum of freedom, a prohibition to sell free- 
 dom longer than for a certain number of hours 
 daily, and, in principle, therefore, stands on the 
 same ground as the prohibition agreed to by 
 all liberals against selling oneself into personal 
 slavery. It is thus no accident that the first 
 country where a maximum hours' day was 
 carried out was Switzerland, the most demo- 
 cratically progressive country in Europe, and 
 (iemocr^ ry '"""^y t*^''p"1'<'''^''' f^Tn nf ]ihpralism 
 Being in its origin a counter-movement to the 
 oppression of nations under institutions imposed 
 from without or having a justification only in 
 tradition, liberalism first sought its realisation 
 as the principle of the sovereignty of the age and 
 of the people, both of which principles formed 
 the everlasting discussion of the philosophers of 
 the rights of the state in the seventeenth and 
 eighteenth centuries, until Rousseau set them 
 up in his Contrat Social as the fundamental 
 conditions of the legitimacy of every constitu- 
 tion, and the French Revolution proclaimed 
 them — in the Democratic Constitution of 1793 
 permeated with Rousseau's spirit* — as inalien- 
 able rights of men. 
 
 * Sovereignty "rests with the people. It is indivisible, 
 imprescriptible, inalienable " (Article 25). " A people 
 has at any time the right to revise, reform and alter its 
 constitution. No generation can bind the next to its 
 laws " (Article 28). 
 
IS' 
 
 The Constitution of 1793 was the logical 
 expression of the liberal ideas of the epoch, 
 and a cursory glance over its contents shows 
 how little it was, or is, an obstacle to socialism. 
 Baboeuf, and the believers in absolute equality, 
 saw in it an excellent starting point for the 
 realisation of their communistic strivings, and 
 accordingly wrote "The Restoration of the 
 Constitution of 1793 " at the head of their 
 demands. 
 
 (irhere is actually no really liberal thought 
 which does not also belong to the elements of 
 the ideas of socialism") Even the principle of 
 economic personal responsibility which belongs 
 apparently so entirely to the Manchester School 
 cannot, in my judgment, be denied in theory 
 by socialism nor be made inoperative under 
 any conceivable circumstances. Without re- 
 sponsibility there is no freedom ; we may think 
 as we like theoretically about man's freedom 
 of action, we must practically start from it as 
 the foundation of the moral law, for only under 
 this condition is social morality possible. And 
 similarly, in our states which reckon with 
 millions, a healthy social life is, in the age of 
 trafHc, impossible if the economic personal 
 responsibility of all those capable of work is 
 not assumed. (The recognition of individual 
 responsibility is the return of the individual to 
 society for services rendered or offered him by 
 society.") 
 
 Perhaps I may be allowed to quote some 
 passages from my article on The Social-Political 
 Meaning of Space and Numbers. 
 
»S2 
 
 "Changes in the economic personal respon - 
 sibility of those capable of work can, then, as 
 far as we can see, only be made relatively . 
 Labour statistics can be developed very much 
 more, the exchange or adjustment of labour be 
 very much perfected, the change of work be 
 made easier and a right of the workers 
 developed which renders possible an infinitely 
 greater security of existence and facility for 
 the choice of a calling than are given to-day. 
 
 The most advanced nrg- ana nf prnnnmiV Qplf- 
 
 help — ^the great trade unions — already point out 
 in this respect the way which evolution will 
 presumably take. ... If already strong trade 
 unions secure to those of their members fit to 
 work a certain right of occupation, when they 
 impress the employers that it is very inadvisable 
 to dismiss a member of the union without 
 very valid reasons recognised also by the union, 
 if they in giving information to members 
 seeking occupation supply their wants in order 
 of application, there is in all this an indication 
 of the development of a democratic right to 
 jgork. ' '* jDther beginnings of it are found 
 . to-day in the form of industrial courts, trades 
 councils, anri similar cr eations in which' 
 dfjmnpratin, gplf- g-overnment has taken shape , 
 though still often imperfectly. On the other 
 side, doubtless, the extension of the public 
 services, particularly of the system of 
 education and of reciprocal arrangements 
 (insurances, etc.) helps very much towards 
 divesting economic personal responsibility of 
 
 * Neue Zeit xv. 2, p. 141. 
 
'53 
 
 its hardness. But a right to work, in the 
 sense that the state guarantees to everyone 
 occupation in his calling, is quite improbable in 
 a visible time, and also not even desirable. 
 What its pleaders want can only be attained 
 with advantage to the community in the way 
 described by the combination of various 
 organs, and likewise the common duty to work 
 can only be realised in this way without a 
 deadening bureaucracy, (in such great and 
 complicated organisms as our modern civilised 
 states and their industrial centres an absolute 
 right to work would simply result in dis- 
 organisation; \it is "only conceivable as a 
 source of the most odious arbitrariness and 
 everlasting quarrelling."* 
 
 Liberalism had historically the task of break- 
 ing the chains which the fettered economy and 
 the corresponding organisations of law of the 
 middle ages had imposed on the further 
 development of society. That it at first strictly 
 maintained the form of bourgeois liberalism 
 did not stop it from actually expressing a 
 very much wider-reaching general principle of 
 society whose completion will be socialism. 
 
 (Socialism will create no new bondage of any 
 kind whatever. The individual is to be free, 
 not in the metaphysical sense, as the anarchists 
 dreamed — i.e., free from all duties towards the 
 community — ^but free from every economic 
 compulsion in his action and choice of a calling. 
 Such freedom is only possible for all by means 
 of organisation.^ In this sense one mi^ht cal l 
 
'54 
 
 socialism "organising liberalism, " for when 
 one examines more closely the organisations 
 that socialism wants and how it wants them, 
 he will find that what distinguishes them above 
 all from the feudalistic organisations, outwardly 
 like them, is just their liberalism, their demo- 
 cratic constitution, their accessibility. There- 
 fore the trade union, striving after an arrange- 
 ment similar to a guild, is, in the eyes of the 
 socialist, the product of self-defence against 
 the tendency of capitalism to overstock the 
 labour market; but, at the same time, just on 
 account of its tendency towards a guild, and 
 to the degree in which that obtains, is it an 
 unsocialistic corporate body. 
 
 The work here indicated is no very simple 
 problem; it rather conceals within itself a 
 whole series of dangers. ^Political equality 
 alone has never hitherto sufficed to secure the 
 healthy development of communities whose 
 centre of gravity was in the giant towns.} It 
 is, as France and the United States show, no 
 unfailing remedy against the rank growth of 
 all kinds of social parasitism and corruption. 
 If solidity did not reach so far down in the 
 constitution of the French nation, and if the 
 country were not so well favoured geographi- 
 cally, France would have long since been 
 ruined by the land plague of the official class 
 which has gained a footing there. In any case 
 this plague forms one of the causes why, in 
 spite of the great keenness of the French mind, 
 the industrial development of France remains 
 more backward than that of the neighbouring 
 
countries, (if democracy is not to excel central- 
 ised absolutism in the breeding of bureau- 
 cracies, it must be built up on an elaborately 
 organised self-government with a corresponding 
 economic, personal responsibility of all the 
 units of administration as well as of the adult 
 citizens of the state. Nothing is more injurious 
 to its healthy development than enforced uni- 
 formity and a too abundant amount of pro- 
 tectionism or subventionismj 
 
 ^o create the organisations described — or, 
 so far as they are already begun, to develop 
 them further — is the indispensable preliminary 
 to what we call socialism of production.} 
 Without them the so-called social appropriation 
 of the means of production would only result 
 presumably in reckless devastation of produc- 
 tive forces, insane experimentalising and aim- 
 less violence, and the political sovereignty of 
 the working class would, in fact, only be carried 
 out in the form of a dictatorial, revolutionary, 
 central power, supported by the terrorist • 
 dictatorship of revolutionary clubs. As such it 
 hovered before the Blanquists, and as such it 
 is still represented in the Communist Manifesto 
 and in the publications for which its authors 
 were responsible at that time. But "in presence 
 of the practical experiences of the February 
 revolution and much more of those of the Paris 
 Commune when the proletariat retained politi- 
 cal power for two months," the revolutionary 
 programme given in the Manifesto has " here 
 and there become out of date." 4" The Com- 
 mune notably offers a proof that the working 
 
iS6 
 
 class cannot simply take possession of the state 
 machinery and set it in motion for their own 
 ends.") 
 
 So wrote Marx and Engels in 1872 in the 
 preface to the new edition of the Manifesto. 
 And they refer to the work, The Civil War in 
 France, where this is developed more fully. 
 But if we open the work in question and read 
 the part referred to (it is the third), we find 
 a programme developed which, according to 
 its political contents, shows in all material 
 features the greatest similarity to the federalism 
 of Proudhon. 
 
 ' ' The unity of the nation was not to be broken, 
 but on the contrary it was to be organised 
 by the destruction of that power of the state 
 which pretended to be the personification of 
 that unity but wanted to be independent of, 
 and superior to, the nation on whose body it 
 was after all only a parasitic growth. Whilst 
 they were occupied in cutting off the merely 
 oppressive organs of the old governing power 
 its rightful functions as a power which claimed 
 to stand above the community were to be taken 
 away and given over to the responsible servants 
 of the community. Instead of deciding once in 
 three or six years what member of the ruling 
 class should trample on and crush the people 
 in Parliament, universal suffrage should serve 
 the people constituted in communities, as indi- 
 vidual suffrage serves every other employer to 
 select for his business workers, inspectors, and 
 clerks," 
 
 " The antagonism between the commune and 
 
IS7 
 
 the power of the state has been looked on as 
 an exaggerated form of the old fight against 
 over-centralisation. . . . The constitution of 
 the commune, on the contrary, would have 
 restored to the community all the powers which 
 until now the parasitic growth, the state, which 
 lives on the community and hinders its free 
 action, has absorbed." 
 
 Thus Marx wrote in the Civil War in France. 
 
 Let us now listen to Proudhon. As I have 
 not his work on Federalism at hand, a few 
 sentences may follow here from his essay on the 
 Political Capacity of the Working Classes, in 
 which he incidentally preaches the forming of 
 the workers into a party of their own. 
 
 " In a democracy organised according to the 
 true ideas of the sovereignty of the people, i.e., 
 according to the fundamental principles of the 
 right of representation, every oppressive and 
 corrupting action of the central authority on 
 the nation is rendered impossible. The mere 
 supposition of such a thing is absurd." 
 
 " And why? 
 
 " Because in a truly free democracy the 
 central authority is not separated from the 
 assembly of delegates, the natural organs of 
 local interests called together for agreement. 
 Because every deputy is, first of all, the man 
 of the locality which named him its representa- 
 tive, its emissary, one of its fellow-citizens, its 
 special agent to defend its special interests, or 
 to bring them as much as possible into union 
 with the interests of the whole community 
 before the great jury (the nation) ; because 
 
iS8 
 
 the combined delegates, if they choose from 
 their midst a central executive committee of 
 management, do not separate it from them- 
 selves or make it their commander who can 
 carry on a conflict with them. 
 
 ' ' There is no middle course ; the commune 
 must be sbvereign or only a branch [of the 
 state] — everything or nothing. Give it, how- 
 ever pleasant a part to play, from the moment 
 when it does not create its rights out of itself, 
 when it must recognise a higher law, when the 
 great group to which it belongs is declared to 
 be superior to it and is not the expression of 
 its federated relations, they will unavoidably 
 find themselves one day in opposition to each 
 other and war will break out." But then logic 
 and power will be on the side of the central 
 authority. \" The idea of a limitation of the 
 power of the state by means of groups, when 
 the principle of subordination and centralisation 
 rules in regard to these groups themselves, is 
 inconsistent, not to say contradictory." It is 
 the municipal principle of bourgeois liberalism.) 
 A " federated France " on the other hand, " a 
 regime which represents the ideal of independ- 
 ence and whose first act would consist in 
 restoring to the municipalities their full inde- 
 pendence and to the Provinces their self- 
 government " — ^that is the municipal freedom 
 which the working class must write on its 
 flag.* And if in the Civil War we find that 
 ' ' the political sovereignty of the producers 
 
 * Capacity Politique des Classes Ouvriires, pp. 224, 
 225, 231, 235. 
 
IS9 
 
 cannot exist with the perpetuation of their 
 social slavery," we read in the Capacitd 
 Politique : \ ' When political equality is once 
 given by means of universal suffrage, the ' 
 tendency of the nation will be towards economic 
 equality. That is just how the workmen's 
 candidates understood the thing. But this is 
 what their bourgeois rivals did not want.* In 
 short, with all the other differences between 
 Marx and the "petit bourgeois," Proudhon, 
 on this point, their way of thinking is as nearly 
 as possible the same]| 
 
 There is not the least doubt (and it has since 
 then been proved many times practically) that 
 the general development of modern society is 
 along the line of a constant increase of the 
 duties of municipalities and the extension of 
 municipal freedom, that the municipality will 
 be an ever more important lever of social 
 emancipation. It appears to me doubtful if it 
 was necessary for the first work of democracy 
 to be such a dissolution of the modern state 
 system and complete transformation of its 
 organisation as Marx and Proudhon pictured 
 (the formation of the national assembly out of 
 delegates from provincial or district assemblies, 
 which in their turn were composed of delegates 
 from municipalities) so that the form the 
 national assemblies had hitherto taken had to 
 be abolished. Evolution has given life to too 
 many institutions and bodies corporate, whose 
 sphere has outgrown the control of municipali- 
 ties and even of provinces and districts for it 
 * Id., p. 214. 
 
i6o 
 
 to be able to do without the control of the 
 central governments unless or befoire their 
 organisation is transformed, ^he absolute 
 sovereignty of the municipality, etc., is besides 
 no ideal for me. The parish or commune is a 
 component part of the nation, and hence has 
 duties towards it and rights in it. We can as 
 little grant the district, for example, an uncon- 
 ditional and exclusive right to the soil as we 
 can to the individual.) Valuable royalties, 
 rights of forest and river, etc., belong, in the 
 last instance, not to the parishes or the districts, 
 which indeed only are their usufructuaries, 
 but to the nation. (Hence an assembly in 
 which the national, and not the provincial or 
 local, interest stands in the forefront or is the 
 first duty of the representatives, appears to be 
 indispensable, especially in an epoch of transi- 
 tion. But beside it, those other assemblies and 
 representative bodies will attain an ever greater 
 importance, so that Revolution or not, the 
 functions of the central assemblies become 
 constantly narrowed, and therewith the danger 
 of these assemblies or authorities to the demo- 
 cracy is also narrowed. It is already very 
 little in advanced countries to-day.! 
 
 But we are less concerned here with a 
 criticism of separate items in the quoted pro- 
 gramme than with bringing into prominence 
 the energy with which it emphasises autonomy 
 as the preliminary condition of social emanci- 
 pation, and with showing how the democratic 
 organisation from the bottom upwards is 
 depicted as the way to the realisation of 
 
i6i 
 
 socialism, and how the antagonists Proudhon 
 and Marx meet again in — ^liberalism. 
 
 The future itself will reveal how far the 
 municipalities and other self-governing bodies 
 will discharge their duties under a complete 
 democracy, and how far they will make use of 
 these duties. ^But so much is clear : the more 
 suddenly they come in possession of their 
 freedom, the more experiments they will make 
 in number and in violence and therefore be 
 liable to greater mistakes, and the more 
 experience the working class democracy has 
 had in the school of self-government, the more 
 cautiously and practically will it proceedj 
 
 Simple as democracy appears to be at the 
 first glance, its problems in such a complicated 
 society as ours are in no way easy to solve. Read 
 only in the volumes of Industrial Democracy 
 by Mr. and Mrs. Webb how many experiments 
 the English trade unions had to make and are 
 still making in order to find out the most 
 serviceable forms of government and adminis- 
 tration, and of what importance this question 
 of constitution is to trade unions. The English 
 trade unions have been able to develop in this 
 respect for over seventy years in perfect free- 
 dom. They began with the most elementary 
 form of self-government and have been forced 
 to convince themselves that this form is only 
 suited to the most elementary organisms, for 
 quite small, local unions. As they grew they 
 gradually learned to renounce as injurious to 
 their successful development certain cherished 
 ideas of doctrinaire democracy (the imperative 
 
1 62 
 
 mandate, the unpaid official, the powerless 
 central representation), and to form instead of 
 it a democracy capable of governing with repre- 
 sentative assemblies, paid officials, and central 
 government with full powers. This section 
 of the history of the development of "trade union 
 democracy" is extremely instructive. If all that 
 concerns trade unions does not quite fit the units 
 of national administration, yet much of it does. 
 The chapter referred to in Industrial Democracy 
 belongs to the theory of democratic govern- 
 ment. In the history of the development of 
 trade unions is shown how the executive central 
 management — their state government — can 
 arise simply from division of labour which 
 becomes necessary through the extension in 
 area of the society and through the number of 
 its members. It is possible that with the 
 socialist development of society this centralisa- 
 tion may also later on become superfluous. 
 But for the present it cannot be dispensed with 
 in democracy. As was demonstrated at the end 
 of the first division of this chapter it is an 
 impossibility for the municipalities of great 
 towns or industrial centres to take over under 
 their own management all local productive and 
 commercial undertakings. It is also, on 
 practical grounds, improbable — not to mention 
 grounds of equity which are against it — ^that 
 they should " expropriate " those undertakings 
 each and all offhand in a revolutionary up- 
 heaval. But even if they did (whereby in the 
 majority of cases would only empty husks come 
 into their hands) they would be obliged to lease 
 
i63 
 
 the mass of the businesses to associations, 
 whether individual or trade union, for associated 
 management.* 
 
 In every one of these cases, as also in the 
 municipal and national undertakings, certain 
 interests of the different trades would have to be 
 protected, and so there would always remain 
 a need for active supervision on the part of 
 trade unions. In the transition period particu- 
 larly, the multiplicity of organs will be of great 
 value. 
 
 Meantime we are not yet so far on, and it is 
 not my intention to unfold pictures of the 
 future, u am not concerned with what will 
 happen in the more distant future, but with 
 what can and ought to happen in the present, 
 for the present and the nearest future. And so 
 the conclusion of this exposition is the very banal 
 statement that the conquest of the democracy, 
 the formation of political and social organs of. 
 the democracy, is the indispensable preliminary 
 condition to the realisation of socialism) 
 
 n<'eudalism, with its unbending organisations 
 and corporations, had to be destroyed nearly 
 everywhere by violence. The liberal organisa- 
 tions of modern society are distinguished from 
 those exactly because they are flexible, and 
 capable of change and development. They do 
 not need to be destroyed, but only to be further 
 developed.YFor that we need organisation and 
 
 * This would certainly bring about complicated 
 problems. Think of the many joint undertakings of 
 modern times which employ members of all possible 
 trades. 
 
1 64 
 
 energetic action, but not necessarily a revolu- 
 tionary dictatorship.) " As the object of the 
 class war is especially to destroy distinctions of 
 class," wrote some time since (October, 1897) 
 a social democratic Swiss organ, the 
 Vorwdrts of Basle, " a period must logically be 
 agreed upon in which the realisation of this 
 object, of this ideal, must be begun. This 
 beginning, these periods following on one 
 another, are already founded in our democratic 
 development; they come to our help, to serve 
 gradually as a substitute for the class war, to 
 absorb it into themselves by the building up of 
 the social democracy." " The bourgeoisie, of 
 whatever shade of opinion it may be," declared 
 lately the Spanish socialist, Pablo Iglesias, 
 " must be convinced of this, that we do not 
 wish to take possession of the Government by 
 the same means that were once employed, by 
 violence and bloodshed, but by lawful means 
 which are suited to civilisation " {Vorwdrts, 
 October i6th, 1898). From a similar point of 
 view the Labour Leader, the leading organ of 
 the English Independent Labour Party, agreed 
 unreservedly with the remarks of VoUmar on 
 the Paris Commune. But no one will accuse 
 this paper of timidity in fighting capitalism and 
 the capitalist parties. And another organ of 
 the English socialist working class democracy 
 the Clarion, accompanied an extract from my 
 article on the theory of catastrophic evolution 
 with the following commentary : 
 
 " The formation of a true democracy — I am 
 quite convinced that that is the most pressing 
 
J6s 
 
 and most important duty which lies before us. 
 This is the lesson which the socialist campaign 
 of the last ten years has taught us. That is 
 the doctrine which emerges out of all my know- 
 ledge and experiences of politics. CWe must 
 build up a nation of democrats before socialism 
 is possible. "J 
 
 (d) The most pressing Problems of Social 
 Democracy. 
 
 " And what she is, that dares she to 
 appear." — Schiller, Maria Stuart. 
 
 The tasks of a party are determined by a 
 multiplicity of factors : bv the position of the 
 general, economic, political, intellectual and 
 moral development in the sphere of its activity, 
 by the nature of the parties that are working 
 beside it or against it, by the character of the 
 means standing at its command, and by a 
 series of subjective, ideologic factors, at the 
 head of them, the principal aim of the party 
 and its conception of the best way to attain that 
 aim. It is well known what great differences 
 exist in the first respect in different lands. 
 Even in countries of an approximately equal 
 standard of industrial development, we find 
 very important political differences and great 
 differences in the conceptions and aspirations 
 of the mass of the people. Peculiarities of 
 geographical situation, rooted customs of 
 national life, inherited institutions, and tradi- 
 tions of all kinds create a difference of mind 
 which only slowly submits to the influence of 
 
i66 
 
 that development. vEven where socialist 
 parties have originally taken the same hypo- 
 theses for the start^pg point of their work, they 
 have found themselves obliged in the course of 
 time to adapt their activity to the special 
 conditions of their country .j[At a given moment, 
 therefore, one can probably set up general 
 political principles of social democracy with a 
 claim that they apply to all countries, but no 
 programme of action applicable for all countries 
 is possible.) 
 
 As shown above, democracy is a condition of 
 socialism to a much greater degree than is 
 usually assumed, i.e.. it is not only the means 
 but also the substance.. Without a certain 
 amount of democratic institutions or traditions, 
 the socialist doctrine of the present time would 
 not indeed be possible. There would, indeed, 
 be a workers' movement, but no social demo- 
 cracy. The modern socialist movement — and 
 also its theoretic explanation — is actually the 
 product of the influence of the great French 
 Revolution a nd of the conceptions of right 
 which through it gained general acceptance in 
 the wages and labour movement. The move- 
 ment itself would exist without them as, with- 
 out and before them, a communism of the 
 people was linked to primitive Christianity.* 
 
 * It has repeatedly happened to me (and certainly also 
 to others) in former years that at the conclusion of a 
 propagandist meeting labourers and workmen who had 
 heard a socialist speech for the first time would come to 
 me and declare that what I had said was already to be 
 found in the Bible ; they could show me the passages, 
 sentence for sentence. 
 
i67 ' 
 
 But this communism of the people was very 
 indefinite and half mythical, and the workers' 
 movement would lack inner cohesion without 
 the foundation of those organisations and 
 conceptions of law which, at least to a great 
 part, necessarily accompany capitalist evolu- 
 tion. A working class politically without 
 rights, grown up in superstition and with 
 deficient education, will certainly revolt some- 
 times and join in small conspiracies, but never 
 develop a socialist movement. It requires a 
 certain breadth of vision and a fairly well 
 developed consciousness of rights to make a 
 socialist out of a workman who is accidentally 
 a revolter. (Political rights and education 
 stand indeed everywhere in a prominent oosi- 
 tion in the socialist programme of action!) 
 
 So much for a general view. For it does 
 not lie in the plan of this work to undertake 
 an estimation of individual points of the 
 socialist programme of action. As far as 
 concerns the immediate demands of the Erfurt 
 programme of the German social democracy, 
 I do not feel in any way tempted to propose 
 changes with respect to them. Probably, 
 like every social democrat, I do not hold all 
 points equally important or equally expedient. 
 For example, it is my opinion that the ad- 
 ministration of justice and legal assistance 
 free of charge, under present conditions, is 
 only to be recommended to a limited degree, 
 that certainly arrangements should be made to 
 make it possible for those without means to 
 seek to have a chance of getting their rights ; 
 
i68 
 
 but that no pressing need exists to take over 
 the mass of the property law suits to-day 
 and put the lawyers completely under the con- 
 trol of the State. Meanwhile, although 
 legislators of to-day will hear nothing of such 
 a step, as a socialist legislature cannot be 
 achieved without a full reform of the legal 
 system, or only according to such newly 
 created legal institutions, as, for example, 
 exist already in arbitration courts for trade 
 disputes, the said demand may keep its place 
 in the programme as an indication of the 
 development striven after. 
 
 I gave a very definite expression to my 
 doubt as to the expediency of the demand in 
 its present form as early as in 1891, in an essay 
 on the draft scheme of the programme then 
 under discussion, and I declared that the 
 paragraph in question gave " too much and 
 too little."* The article belongs to a series 
 which Kautsky and I then drew up jointly 
 on the programme question, and of which the 
 first three essays were almost exclusively the 
 mental work of Kautsky, whilst the fourth 
 was composed by me. Let me here quote two 
 sentences from it which indicate the point of 
 view which I upheld at that time with regard to 
 the action of social democracy, and which will 
 show how much or how little my opinions have 
 changed since then : — 
 
 " To demand simply the maintenance of all 
 those without employment out of the state 
 money means to commit to the trough of the 
 
 * Neue Zeit ix. 2, § 221. 
 
i69 
 
 State not only everyone who cannot find work 
 
 but everyone that will not find work 
 
 One need really be no anarchist in order to find 
 the eternal heaping of duties on the state too 
 much of a good thing. We will hold fast to 
 the principle that the modern proletarian is 
 indeed poor but that he is no pauper. In this 
 distinction lies a whole world, the nature of 
 our fight, the hope of our victory." 
 
 ' ' We propose the formula : ' Conversion of 
 the standing armies to citizen armies ' because 
 it maintains the aim and yet leaves the party 
 a free hand to-day (when the disbanding of 
 standing armies is utterly impossible) to de- 
 mand a series of measures which narrow as 
 much as possible the antagonism between 
 army and people as, for example, the aboli- 
 tion of special military courts of justice, 
 lessening of time of service, etc."* 
 
 ^ut has social democracy, as the party of/ 
 the working classes and of peace, an interestj 
 in the maintenance of the fighting power? 
 From many points of view it is very tempting 
 to answer the question in the negative, 
 especially if one starts from the sentence in 
 the Communist Manifesto : ' ' The proletarian 
 has no fatherland." This sentence might, 
 in a degree, perhaps, apply to the worker of 
 the 'forties without political rights, shut out 
 of public life. To-day in spite of the enor- 
 mous increase in the intercourse between 
 nations it has already forfeited a great part 
 of its truth and will always forfeit more, the 
 
 * Pp. 819, 824, 825. 
 
170 
 
 more the worker, by the influence of socialism, 
 moves ffom being a proletarian to a citizen. 
 The workman who has equal rights as a voter 
 for state and local councils, and who thereby 
 is a fellow owner of the common property 
 of the nation, whose children the community 
 educates, whose health it protects, whom it 
 secures against injury, has a fatherland with- 
 out ceasing on that account to be a citizen of 
 the world, just as the nations draw nearer one 
 another, without, therefore, ceasing to lead a 
 life of their ownj 
 
 The complete breaking up of nations is no 
 beautiful dream, and in any case is not to be 
 expected in the near future. But just as 
 little as it is to be wished that any other of 
 the great civilised nations should lose its 
 independence, just as little can it be a matter 
 of indifference to German social democracy 
 whether the German nation, which has indeed 
 carried out, and is carrying out, its honour- 
 able share in the civilising work of the world, 
 should be repressed in the council of the 
 nations. 
 
 ^n the foregoing is shown in principle the 
 point of view from which the social demo- 
 cracy has to take its position under present 
 conditions with regard to questions of foreign 
 politics. If the worker is still no full citizen, 
 he is not without rights in the sense that 
 national interests can be indifferent to him. 
 And if also social democracy is not yet in 
 power, it already takes a position of influence 
 which lays certain obligations upon itjk Its 
 
lyi 
 
 words fall with great weight in the scale. 
 With the present composition of the army 
 and the complete uncertainty as to the changes 
 in methods of war, etc., brought about by the 
 use of guns of small bore, the Imperial 
 Government will think ten times before ven- 
 turing on a war which has social democracy 
 as its determined opponent. Even without 
 the celebrated general strike social democracy 
 can speak a very important, if not decisive, 
 word for peace, and will do this according to 
 the device of the International as often and 
 as energetically as it is necessary and possible. 
 It will also, according to its programme, 
 in the cases when conflicts arise with other 
 nations and direct agreement is not possible, 
 stand up for settling the difference by means 
 of arbitration. But it is not called upon to 
 speak in favour of renunciation of the pre- 
 servation of German interests, present or 
 future, if or because English, French, or 
 Russian Chauvinists take umbrage at the 
 measures adopted. Where, on the German side, 
 it is not a question merely of fancies or of the 
 particular interests of separate groups which 
 are indifferent or even detrimental to the 
 welfare of the nation, ^here really important 
 national interests are at stake, international- 
 ism can be no reason for a weak yielding to 
 the pretensions of foreign interested parties^) 
 This is no new idea, but simply the putting 
 together of the lines of thought which lie at the 
 bottom of all the declarations of Marx, Engels, 
 and Lassalle on the questions of foreign 
 
172 
 
 politics. It is also no attitude endangering 
 peace which is here recommended. Nations 
 to-day no longer lightly go to war, and a firm 
 stand can under some circumstances be more 
 serviceable to peace than continuous yielding. 
 
 The doctrine of the European balance of 
 power seems to many to be out of date to-day, 
 and so it is in its old form. But in a changed 
 form the balance of power still plays a great 
 part in the decision of vexed international 
 questions. It still comes occasionally to the 
 question of how strong a combination of 
 powers supports any given measure in order 
 that it may be carried through or hindered. I 
 consider it a legitimate task of German Imperial 
 politics to secure a right to have a voice in the 
 discussion of such cases, and to oppose, on 
 principle, proper steps to that end, I consider, 
 falls outside the domain of the tasks of social 
 democracy. 
 
 To choose a definite example. The leasing 
 of the Kiauchow Bay at the time was criticised 
 very unfavourably by the socialist press of 
 Germany. As far as the criticism referred 
 to the circumstances under which the leasing 
 came about, the social democratic press had a 
 right, nay, even a duty, to make it. Not 
 less right was it to oppose in the most decided 
 way the introduction of or demand for a 
 policy of partition of China because this par- 
 tition did not lie at all in the interest of 
 Germany. But if some papers went still 
 further and declared that the party must under 
 all circumstances and as a matter of principle 
 
173 
 
 condemn the acquisition of the Bay, I cannot 
 by any means agree with it. 
 
 It is a matter of no interest to the German 
 people that China should be divided up and 
 Germany be granted a piece of the Celestial 
 Empire. But the German people has a great 
 interest in this — that China should not be the 
 prey of other nations; it has a great interest 
 in this — that China's commercial policy 
 should not be subordinated to the interest of 
 a single foreign power or a coalition of foreign 
 powers — in short, that in all questions con- 
 cerning China, Germany should have a word 
 to say. Its commerce with China demands 
 such a right to protest. In so far as the 
 acquisition of the Kiauchow Bay is a means of 
 securing this right to protest, and it will be 
 difficult to gainsay that it does contribute to it, 
 there is no reason in my opinion for the social 
 democracy to cry out against it on principle. 
 Apart from the manner in which it was 
 acquired and the pious words with which it 
 was accompanied, it was not the worst stroke, 
 of Germany's foreign policy. 
 
 It was a matter of securing free trade with 
 and in China. For there can be no doubt 
 that without that acquisition China would 
 have been drawn to a greater degree into the 
 ring of the capitalist economy, and also that 
 without it Russia would have continued its 
 policy of encircling, and would have occupied 
 the Manchurian harbours. It was thus only a 
 question as to whether Germany should look 
 on quietly whilst, by the accomplishment of 
 
174 
 
 one deed after another, China fell ever more 
 and more into dependence on Russia, or 
 whether Germany should secure herself a 
 position on the ground that she also, under 
 normal conditions, can make her influence 
 felt at any time on the situation of things in 
 China, instead of being obliged to content 
 herself with belated protests. So far ran and 
 runs the leasing of the Kiauchow Bay, a pledge 
 for the safeguarding of the future interests of 
 Germany in China, be its ofKcial explanation 
 what it may, and thus far could social democracy 
 approve it without in the least giving away its 
 principles. 
 
 Meanwhile, owing to the want of responsi- 
 bility in the management of the foreign policy 
 of Germany, there can be no question of 
 positive support from the social democracy, but 
 only of the right foundation of its negative 
 attitude. Without a guarantee that such 
 undertakings should not be turned to account 
 over the heads of the people's representative 
 House for other aims than those announced, 
 say as a means to achieve some temporary 
 success which might surrender the greater 
 interests of the future, without some such 
 pledge social democracy can take upon itself 
 no share in the measures of foreign policy. 
 
 As can be seen the rule here unfolded for the 
 position regarding questions of foreign policy 
 turns on the attitude observed hitherto in 
 practice by social democracy. How far it agrees 
 in its fundamental assumptions with the ruling 
 mode of viewing things in the party, does not 
 
175 
 
 lie with me to explain. On the whole, tradition 
 plays a greater part in these things than 
 we think. It lies in the nature of all ad- 
 vanced parties to lay only scanty weight on 
 changes already accomplished. The chief 
 object they have in view is always that which 
 does not change — quite a justifiable and useful 
 tendency towards definite aims — the setting of 
 goals. Penetrated by this, such parties fall 
 easily into the habit of maintaining longer 
 than is necessary or useful opinions handed 
 down from the past, in assumptions of which 
 very much has been altered. They overlook 
 or undervalue these changes; they seek for 
 facts which may still make those opinions 
 seem valid, more than they examine the 
 question whether in the face of the totality of 
 the facts appertaining to it, the old opinion has 
 not meanwhile become prejudice. 
 
 Such political h priori reasoning often 
 appears to me to play a part in dealing with 
 the question of colonies. 
 
 Qn principle it is quite a matter of indiffer- 
 ence to-day to socialism, or the workmen's 
 movement, whether new colonies should 
 prove successful or not.J /The assumption 
 that the extension of colonies will restrict the 
 realisation of socialism, rests at bottom on the 
 altogether outworn idea that the realisation of 
 socialism depends on an increasing narrowing 
 of the circle of the well-to-do and an increas- 
 ing misery of the poor.J That the first is a 
 fable was shown in earlier chapters, and the 
 misery theory has now been given up nearly 
 
176 
 
 everywhere, if not with all its logical con- 
 clusions and outright, yet at least by explaining 
 it away as much as possible.* 
 
 But even if the theory were right, the 
 
 * H. Cunow makes such an attempt in his article 
 The Catastrophe. He says that if Marx at the end of 
 his first volume of Capital speaks of the "increasing 
 mass of misery" which will appear with the progress 
 of capitalist production we must understand by that "not 
 a simple retrogression of the social state of existence of 
 the worker" but only a "retrogression of his social total 
 position in relation to progressive, civilised development 
 — that is, in relation to the increase of productivity and 
 the increase of the general wants of civilisation." The 
 idea of misery is no fixed one. " What appears to one 
 workman in a certain category, whom a great difference 
 in education separates from his 'master of work,' as a 
 lot worthy to be striven after, may appear to a well- 
 qualified worker of another category, who mentally, 
 perhaps, is intellectually superior to his ' master of work, ' 
 as such a ' mixture of misery and oppression ' that he 
 rises in revolt against it " {Neue Zeit xvii., pp. 402-403). 
 
 Unfortunately Marx speaks in the sentence referred to 
 not only of the increasing mass of misery, of oppression, 
 but also of " slavery, of deterioration, of exploitation." 
 Are we to understand these also in the implied — " Pick- 
 wickian" — sense? Are we to admit, perhaps, a deteriora- 
 tion of the worker which is only a relative deterioration 
 in proportion to the increase of the general civilisation ? 
 I am not inclined to do it, nor Cunow probably. No, 
 Marx speaks in the passage referred to quite positively 
 of " a constantly decreasing number of millionaires " 
 who " usurp all the advantages " of the capitalist 
 transformation and the growth " of the man of misery, 
 of oppression," etc. {Capital, I., chap. xxiv. 7). One 
 can ground the catastrophe theory on this contrast, but 
 not on the moral misery caused by the intellectually 
 inferior managers who are to be found in every counting 
 house — ^in every hierarchical organisation. 
 
 Incidentally it is a little satisfaction to me to see how 
 Cunow here can only reconcile with reality the sentences 
 on which the catastrophe theory rests by suddenly allow- 
 ing workers of different categories to appear with 
 fundamentally opposed social ideas? Are those, then, 
 also " English workers "? 
 
177 
 
 colonies about which there is now an interest 
 in Germany are far from being in the position 
 to re-act so quickly on social conditions at 
 home, that they could only keep off a possible 
 'catastrophe for a year. In this respect the 
 German social democracy would have nothing 
 to fear from the colonial policy of the German 
 Empire. And because it is so, because the 
 development of the colonies which Germany 
 has acquired (and of those which it could per- 
 haps win, the same holds good) will take so 
 much time that there can be no question for 
 many a long year of any reaction worth 
 mentioning on the social conditions of Ger- 
 many. Just from this reason the German 
 social democracy can treat the question of 
 these colonies without prejudice. There can 
 even be no question of a serious reaction of 
 colonial possessions on the political conditions 
 of Germany. Naval Chauvinism, for 
 example, stands undoubtedly in close connec- 
 tion with colonial Chauvinism, and draws 
 from it a certain nourishment. But the first 
 would also exist without the second, just as 
 Germany had her navy before she thought of 
 the conquest of colonies. It must nevertheless 
 be granted that this connection is the most 
 rational ground for justifying a thorough 
 resistance to a colonial policy. 
 
 Otherwise, there is some justification during 
 the acquisition of colonies to examine carefully 
 their value and prospects, and to control the 
 settlement and treatment of the natives as 
 well as the other matters of administration; 
 
 N 
 
178 
 
 but that does not amount to a reason for con- 
 sidering such acquisition beforehand as some- 
 thing reprehensible. 
 
 Its political position, owing to the present 
 system of government, forbids social democracy 
 from taking more than a critical attitude 
 to these things, and the question whether 
 Germany to-day needs colonies can, particu- 
 larly in regard to those colonies that are still 
 to be obtained, be answered in the negative 
 with good authority. But the future has 
 also its rights for us to consider. If we take 
 into account the fact that Germany now im- 
 ports yearly a considerable amount of colonial 
 produce, we must also say to ourselves that 
 the time may come when it will be desirable 
 to draw at least a part of these products from 
 our own colonies. However speedy socialists 
 may imagine the course of development in 
 Germany towards themselves to be, yet we 
 cannot be blind to the fact that it will need a 
 considerable time before a whole series of other 
 <fcountries are converted to socialism. But if 
 it is not reprehensible to enjoy the produce of 
 tropical plantations, it cannot be so to culti- 
 vate such plantations ourselves. Not the 
 whether but the how is here the decisive 
 point. It is neither necessary that the occu- 
 pation of tropical lands by Europeans should 
 injure the natives in their enjoyment of life, 
 nor has it hitherto usually been the case. 
 Moreover, only a conditional right of savages 
 to the land occupied by them can be recog- 
 nised. The higher civilisation ultimately can 
 
'79 
 
 claim a higher right. Not the conquest, but 
 the cultivation, of the land gives the historical 
 V legal title to its use.* 
 
 According to my judgment these are the 
 essential points of view which should decide 
 the position of social democracy as regards 
 the question of colonial policy. They also, 
 in practice, would bring about no change 
 worth mentioning in the vote of the party; 
 but we are not only concerned, I repeat, with 
 what would be voted in a given case, but also 
 with the reasons given for the vote. 
 
 There are socialists to whom every admis- 
 sion of national interests appears as Chauvin- 
 ism or as an injury to the internationalism 
 and class policy of the proletariat. As in his 
 time Domela Nieuwenhuis declared Bebel's 
 well-known assertion — ^that in case of an 
 attack on the part of Russia the social 
 democracy would set up their men for the 
 defence of Germany — to be Chauvinism, so 
 lately, Mr. Belfort Bax also found reprehen- 
 sible jingoism in a similar assertion by Mr. 
 Hyndman.")" 
 
 * " Even a whole society, a nation, nay, all contem- 
 poraneous societies taken together are not proprietors of 
 (the earth. They are only its tenants, its usufructuaries, 
 and have to leave it improved as boni patres familias to 
 the following generation" (Marx, Capital, III. 2, p. 309). 
 f Hyndman insists with great decision on the idea 
 that England, for the protection of the importation of 
 its foodstuffs, needs a navy large enough for every 
 possible combination of adversaries. " Our existence as 
 a nation of free men depends on our supremacy at sea. 
 This can be said of no other people of the present day. 
 However much we socialists are naturally opposed to 
 armaments, we must, however, recognise facts" (Justice, 
 December 31st, 1898). 
 
i8o 
 
 (it must be admitted that it is not always 
 easy to fix the boundary where the advocacy of 
 the interests of one's nation ceases to be just and 
 to pass into pseudo-patriotism ; but the remedy 
 for exaggeration on this side certainly does not 
 lie in greater exaggeration on the other^ It 
 is much more to be sought in a movement for 
 the exchange of thought between the demo- 
 cracies of the civilised countries and in the 
 support of all factors and institutes working 
 for peace. 
 
 Of greater importance to-day than the 
 question of raising the demands already 
 standing on the programme, is the question 
 of supplementing the party's programme. 
 Here practical development has placed a 
 whole series of questions on the orders of the 
 day which at the drawing up of the programme 
 were partly considered to be lying away too far 
 in the future for social democracy to concern 
 itself specially with them, but which were also 
 partly, not sufficiently cdnsidered in all their 
 bearings. To these belong the agrarian 
 question, the policy of local administration, 
 co-operation and different matters of industrial 
 law. The great growth of social democracy in 
 the eight years since the drawing up of the 
 Erfurt Programme, its reaction on the home 
 politics of Germany as well as its experiences 
 in other lands, have made the more intimate 
 consideration of all these questions Imperative, 
 and many views which were formerly held 
 about them have been materially corrected. 
 Concerning the agrarian question, even those 
 
i8i 
 
 who thought peasant cultivation doomed to 
 decay have considerably changed their views 
 as to the length of time for the completion 
 of this decay. In the later debates on the 
 agrarian policy to be laid down by the social 
 democracy, certainly many differences of opinion 
 have been shown on this point, but in principle 
 they revolved round this — whether, and in a 
 given case to what limit, social democracy 
 should offer assistance to the peasant as an 
 independent farmer against capitalism. 
 
 The question is more easily asked than 
 answered. The, fact that the great mass of 
 peasants, even if they are not wage earners, 
 yet belong to the working classes, i.e., do not 
 maintain existence merely on a title to posses- 
 sions or on a privilege of birth, places them 
 near the wage-earning class. On the other 
 side they form in Germany such an important 
 fraction of the population that at an election 
 in very many constituencies their votes decide 
 between the capitalist and socialist parties. 
 But if social democracy would not or will 
 not limit itself to being the party of the 
 workers in the sense that it is only the political 
 completion of trade unionism, it must be careful 
 to interest at least a great part of the peasants 
 in the victory of its candidates. In the long 
 run that will only happen if social democracy 
 commits itself to measures which offer an 
 improvement for the small peasants in the 
 immediate future. But with many measures 
 having this object the legislature cannot dis- 
 tinguish between the small and the middle class 
 
l82 
 
 peasants, and on the other hand they cannot 
 help the peasant as a citizen of the state or as 
 a worker without supporting him at least in- 
 directly as an "undertaker." 
 
 This is shown with other things in the pro- 
 gramme of socialist agrarian policy which 
 Kautsky sketched at the end of his work on 
 the agrarian question under the heading The 
 Neutralisation of the Peasantry. Kautsky 
 shows most convincingly that even after a 
 victory for social democracy no reason will 
 exist for the abolition of peasants' holdings. 
 But he is at the same time a strong opponent 
 of such measures, or the setting up of such 
 demands, as aim at forming a " protection for 
 peasants " in the sense that they would retain 
 the peasant artificially as an undertaker. He 
 proposes quite a series of reforms, or declares 
 it admissible to support them, which result 
 in relieving the country parishes and in 
 increasing their sources of income. But to 
 what class would these measures be a benefit 
 in the first instance?* According to Kautsky 's 
 own representation, to the peasants. For, as 
 he shows in another passage of his work, in 
 the country, even under the rule of universal 
 suffrage, there could be no question of an 
 influence of the proletariat on the affairs of the 
 parish worth mentioning. For that influence 
 is, according to him, too isolated, too back- 
 ward, too dependent on the few employers of 
 labour who control it. "A communal policy 
 other than one in the interest of the landowner 
 is not to be thought of. ' ' Just as little can we 
 
i83 
 
 think to-day " of a modern management of the 
 land by the parish in a large co-operative 
 farming enterprise controlled by the village 
 community."* But, so far, and so long, as 
 that is so, measures like " Amalgamation of 
 the hunting divisions of the great landowners 
 in the community," " Nationalisation of the 
 taxes for schools, roads, and the poor," would 
 obviously contribute to the improvement of the 
 economic position of the peasants and therewith 
 also to the strengthening of their possessions. 
 Practically, then, they would just work as 
 protection for the peasants. 
 
 Under two hypotheses the support of such 
 protection for the peasants appears to me 
 innocuous. First a strong protection of agri- 
 cultural labourers must go hand in hand with 
 it, and secondly democracy must rule in the 
 commune and the district. Both are assumed 
 by Kautsky. But Kautsky undervalues the 
 influence of agricultural labourers in the 
 democratised country parish. The agricultural 
 labourers are as helpless as he describe.; them 
 in the passage quoted, only in such districts as 
 lie quite outside commercial intercourse; and 
 their number is always becoming smaller. 
 Usually the agricultural labourer is to-day 
 tolerably conscious of his interests and with 
 universal suffrage would even become more so. 
 Besides that, there exist in most parishes all 
 kinds of antagonisms among the peasants 
 themselves, and the village community con- 
 tains, in craftsmen and small traders, elements 
 
 * The Agrarian Question, pp. 337 and 338. 
 
184 
 
 which in many respects have more in common 
 with the agricultural labourers than with the 
 peasant aristocracy. All that means that the 
 agricultural labourers, except in a very few 
 cases, would not have to make a stand alone 
 against an unbroken "reactionary mass." 
 ^Democracy has, in the country districts, if it is 
 to exist, to work in the spirit of socialism. I 
 consider democracy in conjunction with the 
 results of the great changes in the system of 
 communication, of transport, a more powerful 
 lever in the emancipation of agricultural 
 labourers than the technical changes in peasant 
 farming.) 
 
 I refrain from going through all the details 
 of Kautsky's programme with which, as I have 
 already remarked, I agree thoroughly in prin- 
 ciple; but I believe that a few observations on 
 it ought not to be suppressed. {For me, as 
 already observed, the chief task which social 
 democracy now has to fulfil for the agricultural 
 population can be classified under three heads, 
 namely : (i) The struggle against all the present 
 remnants and supports of feudal landowners, 
 and the fight for democracy in the commune 
 and district.y This involves a fight for the 
 removal of entail, of privileged estate parishes, 
 hunting privileges, etc., as laid down by 
 Kautsky„ In Kautsky's formulation " the 
 fullest self-government in the parish and the 
 province," the word " fullest " does not seem 
 to me well chosen, and I would substitute 
 for it the word ' ' democratic. ' ' Superlatives 
 are nearly always misleading. " Fullest 
 
i8s 
 
 self-government ' ' can apply to the circle of those 
 entitled to have a say, what it means can be 
 better expressed by " democratic self-govern- 
 ment ' ' ; but it can also denote the administrative 
 functions, and then it would mean an absolutism 
 of the parish, which neither is necessary nor 
 can be reconciled with the demands of a healthy 
 democracy. The general legislature of the 
 nation stands above the parish, apportioning 
 its definite functions and representing the 
 general interests against its particular interests. 
 
 ((2) Protection and relief of the working 
 classes in agriculture^ Under this heading falls 
 the protection of labourers in the narrower 
 sense : Abolition of regulations for servants, 
 limitation of hours of labour in the various 
 categories of wage earners, sanitary police 
 regulations, a system of education, as well as 
 measures which free the small peasant as a 
 taxpayer. 
 
 £(3) Measures against the absolutism of pro- 
 perty and furthering co-'operation^ Hereunder 
 would fall demands like " Limitation of the 
 rights of private property in the soil with a 
 view to promoting (i) the suppression of adding 
 field to field, (2) the cultivation of land, {3) 
 prevention of disease " (Kautsky); " reduction 
 of exorbitant rents by courts of justice set up 
 for the purpose ' ' (Kautsky) ; the building of 
 healthy and comfortable workmen's dwellings 
 by the parish ; ' ' facilities for co-operative 
 unions by means of legislation" (Kautsky); 
 the right of the parish to acquire land by 
 purchase or expropriation and to lease it at a 
 
186 
 
 cheap rent to workmen and workmen's associa- 
 tions. 
 
 This latter demand leads to the question of 
 co-operation. After what has been said in the 
 chapter on the economic possibilities of co- 
 operative associations I need say little here. 
 The question to-day is no longer whether 
 co-operative associations ought to exist or not. 
 They exist and will exist whether the social 
 democracy desires it or not. By the weight of 
 its influence on the working classes, social 
 democracy certainly can retard the spread of 
 workmen's co-operative societies, but it will 
 not thereby do any service for itself or the 
 working class. The hard-and-dry Manchesterism 
 which is often manifested by sections of the 
 party in regard to co-operation and is grounded 
 on the declaration that there can be no socialist 
 co-operative society within a capitalist society 
 is not justified. It is, on the contrary, important 
 to take a decided position and to be clear 
 which kind of associations social democracy 
 can recommend, and can morally support. 
 
 We have seen what an extraordinary advance 
 associations for credit, purchasing, dairy farm- 
 ing, working and selling, make in all modern 
 countries. But these associations in Germany 
 are generally associations of peasants, repre- 
 sentatives of the " middle class movement " in 
 the country. I consider it incontrovertible that 
 they, in conjunction with the cheapening of the 
 rate of interest which the increased accumula- 
 tion of capital brings with it, could indeed help 
 tnuch towards keeping peasant enterprises 
 
i87 
 
 capable of competing with large enterprises. 
 Consequently, these peasant associations are 
 in most cases the scene of the action of anti- 
 socialist elements, of petits bourgeois liberals, 
 clericals, and anti-semites. So far as social 
 democracy is concerned, they can to-day be put 
 out of reckoning nearly everywhere — even if in 
 their ranks there are here and there small 
 peasants who are nearer to the socialist than 
 to other parties. The middle-class peasant takes 
 the lead with them. If social democracy ever 
 had a prospect of winning a stronger influence 
 on the class of the country population referred 
 to by means of co-operation, it has let the 
 opportunity slip. 
 
 But if the social democratic party has not 
 the vocation of founding co-operative stores, 
 that does not mean it should take no 
 interest in themj The dearly-loved declara- 
 tion that co-operative stores are not socialist 
 enterprises, rests-on the same formalism which 
 long acted against trade unions, and which 
 now begins to make room for the opposite 
 extreme, (whether a trade union or a work- 
 men's co-operative store is or is not socialistic, 
 does not depend on its form but on its char- 
 acter — on the spirit that permeates it. They 
 are not socialism, but as organisations of 
 workmen they bear in themselves enough of 
 the element of socialism to develop into worthy 
 and indispensable levers for the socialist 
 emancipation?i They will certainly best dis- 
 charge their economic tasks if they are left 
 completely to themselves in their organisation 
 
i88 
 
 and government. But as the aversion and even 
 enmity which many socialists formerly felt 
 against the trade union movement has gradu- 
 ally changed into friendly neutrality and then 
 into the feeling of belonging together, so will 
 it happen with the stores — so has it already 
 happened in some measure. 
 
 Those elements, which are enemies not only 
 of the revolutionary, but of every emancipation 
 movement of the workers, by their campaign 
 against the workmen's co-operative stores have 
 obliged the social democracy to step in to 
 support them. Experience has also shown that 
 such fears, as that the co-operative movement 
 would take away intellectual and other forces 
 from the political movement of the workers, 
 were utterly unfounded. In certain places 
 that may be the case temporarily, but in the 
 long run exactly the opposite takes place. 
 Social democracy can look on confidently at 
 the founding of working men's co-operative 
 stores where the economic and legal pre- 
 liminary conditions are found, and it will do 
 well to give it its full good-will and to help it 
 as much as possible. 
 
 Only from one point of view could the work- 
 men's co-operative store appear something 
 doubtful in principle — namely, as the good 
 which is in the way of the better, the better 
 being the organisation of the purchase and the 
 distribution of commodities through the munici- 
 pality, as is designed in nearly all socialist 
 systems. But first of all the democratic store, 
 in order to embrace all members of the place 
 
1 89 
 
 in which it is located, needs no alteration in 
 principle, but only a broadening of its con- 
 stitution, which throughout is in unison with 
 its natural tendencies (in some smaller places 
 co-operative stores are already not far from 
 counting all the inhabitants of the place as 
 their members). Secondly, the realisation of 
 this thought still lies such a long way o£f, and 
 assumes so many political and economic 
 changes and intermediate steps in evolution, 
 that it would be mad to reject with regard to 
 it all the advantages which the workers can 
 draw to-day from the co-operative store. As 
 far as the district council or parish is concerned 
 we can only through it to-day provide clearly 
 defined, general needs. 
 
 With that we come now to the borough or 
 municipal policy of social democracy. This 
 also for a long time was the step-child of the 
 socialist movement. It is, for example, not 
 very long ago that in a foreign socialist paper 
 (which has since disappeared), edited by very 
 intellectual folk, the following idea was rejected 
 with scorn as belonging to the petit bourgeois, 
 namely, the using of municipalities as the lever 
 of the socialist work of reform without, on 
 that account, neglecting parliamentary action, 
 and the beginning through the municipality 
 of the realisation of socialist demands. The 
 irony of fate has willed it that the chief editor 
 of that paper was only able to get into the 
 Parliament of his country on a wave of muni- 
 cipal socialism. Similarly in England, social 
 democracy found in the municipalities a rich 
 
igo 
 
 field of fruitful activity before it succeeded in 
 sending its own representatives to Parliament. 
 In Germany the development was different. 
 Here social democracy had long obtained 
 Parliamentary civil rights before it gained a 
 footing to any extent worth mentioning in the 
 representative bodies of the communes. With 
 its growing extension its success also increased 
 in the elections for local bodies, so that the 
 need for working out a socialist municipal 
 programme has been shown more and more, 
 and such has already been drawn up in indi- 
 vidual states or provinces. What does social 
 democracy want for the municipality, and what 
 does it expect from the municipality? 
 
 Wifh regard to this the Erfurt programme 
 says only " Self-government of the people in 
 empire, state, province, and municipality; 
 election of officials by the people, ' ' and demands 
 for all elections the direct right to vote for all 
 adults. It makes no declaration as to the legal 
 relation of the enumerated governing bodies to 
 one another. As shown farther back, I main- 
 tain that the law or the decree of the nation 
 has to come from the highest legal authority 
 of the community — the state. But that does 
 not mean that the division line between the 
 rights and powers of the state and the muni- 
 cipality should always be the same as to-day. 
 
 To-day, for example, the municipal right of 
 expropriation is very limited, so that a whole 
 series of measures of an economic-political 
 character would find in the opposition, or 
 exaggerated demands, of town landlords 
 
a positively insurmountable barrier. An 
 extension of the law of expropriation should 
 accordingly be one of the next demands of 
 municipal socialism. It is not, however, 
 necessary to demand an absolutely unlimited 
 law of expropriation. The municipality would 
 always be bound to keep to the regulations of 
 the common law which protect the individual 
 against the arbitrary action of accidental 
 majorities. Rights of property which the com- 
 mon law allows must be inviolable in every 
 community so long as, and in the measure in 
 which, the common law allows them. CTo take 
 away lawful property otherwise than by com- 
 pensation, is confiscation, which can only be 
 justified in cases of extreme pressure of circum- 
 stances — war, epidemics.*^ 
 
 * I gave expression to this idea very energetically 
 some years ago in my summary of Lassalle's System of 
 Acquired Rights, which worlc is itself, as Lassalle writes, 
 dedicated to the object of reconciling revolutionary law 
 with positive law. Braving the danger of being 
 charged with thinking as a philistine, I have no hesita- 
 tion in declaring that to me the thought or proposal of 
 an expropriation, which would only be robbery dressed 
 up in a legal form, appears wholly objectionable — not to 
 speak of an expropriation according to the prescription 
 of Bar&res — and, quite apart from the fact that such an 
 expropriation would be objectionable on purely economic 
 or utilitarian grounds. "Whatever far-reaching encroach- 
 ments on the domain of the privileges of property pre- 
 vailing hitherto one may assume in this respect, in the 
 period of transition to a socialist state of society, they 
 cannot be those of a senseless operating brutal force, but 
 they must be the expression of an idea of law, even if it 
 be new and asserts itself with elementary force " (Com- 
 plete Edition of Lassalle's Works, vol. iii., p. 791). The 
 form of the expropriation of the expropriators corres- 
 ponding most nearly to the socialistic conception of law 
 and rights is that of a replacement by the activities of 
 organisations and institutions. 
 
192 
 
 Social democracy will thus be obliged to 
 demand for the municipality, when the franchise 
 becomes democratic, an extension of the right 
 of expropriation (which is still very limited in 
 various German states) if a socialist policy of 
 local government is to be possible. Further, 
 demands respecting the creation of municipal 
 enterprises and of public services, and a labour 
 policy for the municipality, are rightly put into 
 the forefront of the programme. With respect 
 to the first, the following demand should be set 
 up as essential, that all enterprises having a 
 monopolist character and being directed to- 
 wards the general needs of the members of the 
 municipality must be carried out under its own 
 management, and that, for the rest, the muni- 
 cipality must strive constantly to increase the 
 area of the service it gives to its members. 
 As regards labour policy, we must demand 
 from the municipalities that they, as employers 
 of labour, whether under their own manage- 
 ment or under contract, insert as a minimum 
 condition the clauses for wages and hours of 
 labour recognised by the organisations of such 
 workmen, and that they guarantee the right of 
 combination for these workmen. It should, 
 however, be observed here that if it is only 
 right to endeavour to make municipalities as 
 employers of labour surpass private firms with 
 regard to conditions of labour and arrange- 
 ments for the welfare of the workers, it would 
 be a shortsighted policy for municipal workmen 
 to demand such conditions as would place them, 
 when compared with their fellow-workers in 
 
193 
 
 the same trades, in the position of an unusually 
 privileged class, and that the municipality 
 should work at a considerably higher cost 
 than the private employer. That would, in the 
 end, lead to corruption and a weakening of 
 public spirit. 
 
 Modern evolution has assigned to municipali- 
 ties further duties : the establishment and 
 superintendence of local sick funds, to which 
 perhaps at a not very distant epoch the taking 
 over of insurance against invalidity will be 
 added. There has further been added the 
 establishment of labour bureaux and industrial 
 arbitration courts. With regard to the labour 
 bureaux the social democracy claims as its 
 minimum demand that their character should 
 be guaranteed by their being composed of an 
 equal representation of workmen and em- 
 ployers ; that arbitration courts should be 
 established by compulsion and their powers 
 extended. Social democracy is sceptical of, 
 even if it does not protest against, municipal 
 insurance against unemployment, as the idea 
 prevails that this insurance is one of the 
 legitimate duties of trade unions and can best 
 be cared for by them. But that can only hold 
 good for well-organised trades which unfor- 
 tunately still contain a small minority of the 
 working population. The great mass of 
 workers is still unorganised, and the question 
 is whether municipal insurance against unem- 
 ployment can, in conjunction with trade unions, 
 be so organised that, so far from being an 
 encroachment on the legitimate functions of 
 
194 
 
 the latter, it may even be a means of helping 
 them. In any case it would be the duty of the 
 social democratic representatives of the muni- 
 cipality, where such insurance is undertaken, 
 to press with all their energy for the recognition 
 of the unions.* 
 
 From its whole nature, municipal socialism 
 is an indispensable lever for forming or com- 
 pletely realising what I, in the last chapter, 
 called " the democratic right of labour." But 
 it is and must be patch-work where the fran- 
 chise of the municipality is class franchise. 
 That is the case in more than three-fourths of 
 Germany. And so we stand here, as we do 
 with reference to the diets of the federal states, 
 on which the municipalities depend to a great 
 extent, and to the other organs of self-govern- 
 ment (districts, provinces, etc.), face to face 
 with the question : hnw will snrial democracy 
 succeed in removing the existing class franchis e 
 and in nhtgjni ng- the HemocratisatJon of the 
 , electoral systems? 
 
 (Social democracy has to-day in Germany, 
 besides the means of propaganda by speech 
 and writing, the franchise for the Reichstag as 
 the most effective means of asserting its 
 demands. Its influence is so strong that it has 
 extended even to those bodies which have been 
 made inaccessible to the working class owing 
 to a property qualification, or a system of class 
 franchise; for parties must, even in these 
 
 * Since the above was written the question has .in 
 several German towns been solved by a municipal con- 
 tribution to the unemployed funds of the unions. 
 
I9S 
 
 assemblies, pay attention to the electors for the 
 ReichstagN If the right to vote for the Reich- 
 stag were protected from every attack, the 
 question of treating the franchise for other 
 bodies as a subordinate one could be justified 
 to a certain extent, although it would be a 
 mistake to make light of it., But the franchis e 
 for the Reic hstag is not secu re at all. Govern- 
 ments and government parties will certainly not 
 resolve lightly on amending it, for they will 
 say to themselves that such a step would raise 
 amongst the masses of the German workers a 
 hate and bitterness, which they would show in 
 a very uncomfortable way on suitable occa- 
 sions. The socialist movement is too strong, 
 the political self-consciousness of the German 
 workers is too much developed, to be dealt 
 with in a cavalier fashion. One may venture, 
 also, to assume that a great number even of 
 the opponents of universal suffrage have a 
 certain moral unwillingness to take such a 
 right from the people. But if under normal 
 conditions the curtailing of the franchise would 
 create a revolutionary tension, with all its 
 dangers for the governing classes, there can, 
 on the other hand, be no doubt as to the 
 existence of serious technical difficulties in the 
 way of altering the franchise so as to allow, 
 only as an exception, the success of independent 
 socialist candidatures. It is simply political 
 considerations which, on this question, deter- 
 mine the issue. 
 
 ^On this and other grounds it does not seem 
 advisable to make the policy of social democracy 
 
196 
 
 solely dependent on the conditions and possi- 
 bilities of the imperial franchise. We have, 
 moreover, seen that progress is not so quickened 
 by it as might have been inferred from the 
 electoral successes of 1890 and 1893!) Whilst 
 the socialist vote in the triennial period from 
 1887 to 1890 rose 87 per cent., and from 1890 
 to 1893 25 per cent., in the five years from 
 1893 to 1898 it only rose 18 per cent. — ^an 
 important increase in itself, but not an increase 
 to justify extraordinary expectations in the 
 near future. 
 
 Now social democracy depends not exclu- 
 sively on the franchise and Parliamentary 
 activity. A great and rich field exists for it 
 outside Parliaments. (|The socialist working 
 class movement would exist even if Parliaments 
 were closed to it. Nothing shows this better 
 than the gratifying movements among the 
 Russian working classes. But with its exclu- 
 sion from representative bodies the German 
 working class movement would, to a great 
 extent, lose the cohesion which to-day links 
 its various sections ; it would assume a chaotic 
 character, and instead of the steady, uninter- 
 rupted fprward march with firm steps, jerky 
 forward motions would appear with inevitable 
 back-slidings and exhaustions/ 
 
 Such a development is neither in the interest 
 of the working classes nor can it appear 
 desirable to those opponents of social demo- 
 cracy who have become convinced that the 
 present social order has not been created for 
 all eternity but is subject to the law of change, 
 
197 
 
 and that a catastrophic development with all 
 its horrors and devastation can only be avoided 
 if in legislation consideration is paid toVhangeSSy 
 in the conditions of production and commerce 
 and to the evolution of the classes. And the 
 number of those who recognise this is steadily 
 increasing. (Their influence would be much 
 greater than it is to-day if the social democracy 
 could find the courage to emancipate itself from 
 a phraseology which is actually outworn and 
 if it would make up its mind to appear what it 
 is in reality to-day : a democratic, socialistic 
 party of reform) ^ 
 
 It is not a question of renouncing the so- 
 called right of revolution, this purely speculative 
 right which can be put in no paragraph of a 
 constitution and which no statute book can 
 prohibit, this right which will last as long as 
 the law of nature forces us to die if we abandon 
 the right to breathe. This imprescriptible and 
 inalienable right is as little touched if we place 
 ourselves on the path of reform as the right of 
 self-defence is done away with when we make 
 laws to regulate our personal and property 
 disputes. , 
 
 \B\it is social democracy to-day anything 
 beyond a party that strives after the socialist 
 transformation of society by the means of 
 democratic and economic reform?! According 
 to some declarations which were maintained 
 against me at the congress in Stuttgart this 
 might perhaps appear to be the case. But in 
 Stuttgart my letter was taken as an accusation 
 against the party for sailing in the direction of 
 
Blanquism, whilst it was really directed against 
 some persons who had attacked me with 
 arguments and figures of speech of a Blanquist 
 nature and who wanted to obtain from the 
 congress a pronouncement against me. 
 
 Even a positive verdict from the Stuttgart 
 Congress against my declaration would not 
 have diverted me from my conviction that the 
 great mass of the German social democracy is 
 far removed from fits of Blanquism. After 
 the speech at Oeynhausen I knew that no other 
 attitude of the congress was to be expected 
 than the one which it in fact adopted.* 
 
 The Oeynhausen speech has since then shared 
 the fate of so many other speeches of extra- 
 ordinary men, it has been semi-oflBcially cor- 
 rected. And in what sense has the party 
 expressed itself since Stuttgart? Bebel, in his 
 speeches on the attempts at assassination, has 
 entered the most vigorous protests against the 
 idea that social democracy upholds a policy of 
 force, and all the party organs have reported 
 these speeches with applause; no protest 
 against them has been raised anywhere. 
 Kautsky develops in his Agrarian Question the 
 principles of the agrarian policy of social 
 
 * " Some days before the Stuttgart Congress on tne 
 6th September, 1898, William II. at Oeynhausen, West- 
 phalia, announced a law threatening with penal servitude 
 those who dared to prevent a man from working or 
 incited him to strike. That such a speech should create 
 a revolutionary mood amongst German social democrats 
 was the most natural thing in the world. But the threat 
 came to nought. The Reichstag rejected a Bill on the 
 subject by a large majority, although it was only a 
 diluted edition of that announced by the Kaiser. The 
 fate of the speech confirmed my assertions." 
 
199 
 
 democracy. They form a system of thoroughly 
 democratic reform just as the Communal Pro- 
 gramme adopted in Brandenburg is a demo- 
 cratic programme of reform. In the Reichstag 
 the party supports the extension of the powers 
 and the compulsory establishment of courts of 
 arbitration for trades disputes. These are 
 organs for the furtherance of industrial peace. 
 All the speeches of their representatives breathe 
 reform. In the same Stuttgart where, accord- 
 ing to Clara Zetkin, the " Bernstein-iade " 
 received the finishing stroke, shortly after the 
 Congress, the social democrats formed an 
 alliance with the middle-class democracy for 
 the municipal elections, and their example was 
 followed in other Wurtemberg towns. In the 
 trade union movement one union after another 
 proceeds to establish funds for out-of-work mem- 
 bers, which practically means a giving up of 
 the characteristics of a purely fighting coalition, 
 and declares for municipal labour bureaux em- 
 bracing equally employers and employees; 
 whilst in various large towns — Hamburg, 
 Elberfeld — co-operative stores have been 
 started by socialists and trade unionists. 
 Everywhere there is action for reform, action 
 for social progress, action for the victory of 
 democracy. " People study the details of the 
 problems of the day and seek for levers and 
 starting points to carry on the development of 
 society in the direction of socialism." Thus I 
 wrote a year ago,* and I see no reason to 
 induce me to delete a word of it. 
 
 * The Struggle of Social Democracy and the Revolu- 
 tion oj Society. — Neue Zeit xvi., i, p. 451. 
 
Conclusion, 
 ultimate aim and tendency. kant against 
 
 CANT. 
 
 Reference has already been made in different 
 passages of this book to the great influence 
 which tradition exercises, even amongst social- 
 ists, upon judgments regarding facts and ideas. 
 I say expressly " even amongst socialists " 
 because this power of tradition is a very wide- 
 spread phenomenon from which no party, no 
 literary or artistic line of thought, is free, and 
 which penetrates deeply even into most of the 
 sciences. It will probably never be quite rooted 
 out. /a certain interval of time must always 
 pass before men so far recognise the inconsis- 
 tency of tradition with what exists as to put 
 the former on the shelf. Until this happens 
 tradition usually forms the most powerful 
 means of linking those together whom no 
 strong, constant, effective interest or external 
 pressure knits together.') Hence the intuitive 
 preference of all men of action, however revo- 
 lutionary they may be in their aims, for 
 tradition. " Never swop horses whilst cross- 
 ing a stream." This motto of old Lincoln is 
 rooted in the same thought as Lassalle's well- 
 known anathema against the " nagging spirit 
 of liberalism, the complaint of individual 
 opining and wanting to know better. ' ' Whilst 
 
tradition is essentially conservative, criticism 
 Js-afaTTOSt alwayti • d ' e grrn CTive."" ' At the mo ment 
 ot important action, therefore, criticism, even 
 when most justified by facts, can be an evil, 
 and therefore be reprehensible. 
 
 To recognise this is, of course, not to call 
 tradition sacred and to forbid criticism. Parties 
 are not always in the midst of rapids when 
 attention is paid to one task only. 
 
 For a party which has to keep up with a 
 real evolution, criticism is indispensable and 
 tradition can become an oppressive burden, a 
 restraining fetter. 
 
 But men in very few cases willingly and fully 
 account for the importance of the changes 
 which take place in their traditional assump- 
 tions. Usually they prefer to take into account 
 only such changes as are concerned with 
 undeniable facts and to bring them into unison 
 as far as can be with the traditional catch- 
 words. The method is called pettifogging, 
 and the apologies and explanations for it are 
 called cant. 
 
 Cant — the word is English, and is said to 
 have been first used in the sixteenth century as 
 a description of the saintly sing-song of the 
 Puritans. In its more general meaning it 
 denotes an unreal manner of speech, thought- 
 lessly imitative, or used with the consciousness 
 of its untruth, to attain any kind of object, 
 whether it be in religion, politics, or be concerned 
 with theory or actuality. In this wider mean- 
 ing cant is very ancient — ^there were no worse 
 " canters," for example, than the Greeks of 
 
the past classic period — and it permeates in 
 countless forms the whole of our civilised life. 
 Every nation, every class and every group 
 united by theory or interest has its own cant. 
 It has partly become such a mere matter of 
 convention, of pure form, that no one is any 
 longer deceived by its emptiness, and a fight 
 against it would be shooting idly at sparrows. 
 But this does not apply to the cant that appears 
 in the guise of science and the cant which has 
 become a political battle cry. 
 /^ My propositionX^To me that which is gfener- 
 ally called the ultimate aim of socialism is 
 nothing, but the movement is everythingbj>1ias 
 often been conceived as a denial of every 
 definite aim of the socialist movement, and 
 Mr. George Plechanow has even discovered 
 that I have quoted this " famous sentence " 
 from the book To Social Peace, by Gerhard 
 von Schulze-Gavernitz. There, indeed, a 
 passage reads that it is certainly indispensable 
 for revolutionary socialism to take as its ulti- 
 mate aim the nationalisation of all the means 
 of production, but not for practical political 
 socialism which places near aims in front of 
 distant ones. Because an ultimate aim is here 
 regarded as being dispensable for practical 
 objects, and as I also have professed but little 
 interest for ultimate aims, I am an " indis- 
 criminating follower " of Schulze-Gavernitz. 
 One must confess that such demonstration bears 
 witness to a striking wealth of thought. 
 
 When eight years ago I reviewed the Schulze- 
 Gavernitz book in Neue Zeit, although my 
 
203 
 
 criticism was strongly influenced by assump- 
 tions which I now no longer hold, yet I put on 
 one side as immaterial that opposition of ulti- 
 mate aim and practical activity in reform, and 
 admitted — without encountering a protest — 
 that for England a further peaceful development, 
 such as Schulze-Gavernitz places in prospect 
 before herwMJKJ^itggnpbable. I expressed^ 
 the convictidte^at with the continuance of free 
 development, nhe / English^ working classes 
 would certainly increase their demands, but 
 would desire nothing that could not be shown 
 each time to be necessary and attainable be- 
 yond all doubt. /"That is at the bottom nothing 
 else than what I say to-day. And if anyone 
 wishes to bring up against me the advances in 
 social democracy made since then in England, 
 I answer that with this extension a develop- 
 ment of the English social democracy has gone 
 hand in hand from the Utopian, revolutionary 
 sect, as Engels repeatedly represented it to be, 
 to the party of political reform which we now 
 know.* (No socialist capable of thinking, 
 dreams to-day in England of an imminent 
 victory for socialism by means of a violent 
 revolution — none dreams of a quick conquest of 
 Parliament by a revolutionary proletariat. But 
 they rely more and more on work in the munici- 
 palities and other self-governing bodies. The 
 early contempt for the trade union movement 
 has been given up ; a closer sympathy has been 
 
 * I use the words " social democracy " here in the 
 wider sense of the whole independent socialist move- 
 ment. (English edition.) 
 
204 
 
 won for it and, here and there also, for the 
 co-operative movement. 
 
 And the ultimate aim? Well, that just re- 
 mains an ultimate aim^ " The working classes 
 have no fixed and perfect Utopias to introduce 
 by means of a vote of the nation. They know 
 that in order to work out their own emancipa- 
 tion — ^and with it that higher form of life which 
 the present form of society irresistibly makes 
 for by its own economic development — they, 
 the working classes, have to pass through long 
 struggles, a whole series of historical processes, 
 by means of which men and circumstances will 
 be completely transformed. They have no 
 ideals to realise, they have only to set at liberty 
 the elements of the new society which have 
 already been developed in the womb of the 
 collapsing bourgeois society." So writes 
 Marx in Civil War in France. I was thinking 
 of this utterance, not in every point, but in its 
 fundamental thought in writing down the 
 sentence about the ultimate aim. For after all 
 what does it say but that the movement, the 
 series of pr ocesses, is everything, whilst every 
 aim fixed beforehand in its details is im ma- 
 terial to it T have declared already that I 
 willingly abandon the form of the sentence 
 about the ultimate aim as far as it admits the 
 interpretation that every general aim of the 
 working class movement formulated as a prin- 
 ciple should be declared valueless. But the 
 preconceived theories about the drift of the 
 movement which go beyond such a generally 
 expressed aim, which try to determine the 
 
direction of the movement and its character 
 without an ever-vigilant eye upon facts and 
 experience, must necessarily always pass into 
 Utopianism, and at some time or other stand in 
 the way, and hinder the real theoretical and 
 practical progress of the movement. 
 
 Whoever knows even but a little of the 
 history of German social democracy also knows 
 that the party has become important by con- 
 tinued action in contravention of such theories 
 and of infringing, resolutions founded on them. 
 What Engels says in the preface to the new 
 edition of Civil War with regard to the Blan- 
 quists and Proudhonists in the Paris Commune 
 of 1 87 1, namely that they both had been 
 obliged in practice to act against their own 
 theory, has often been repeated in another form. 
 A theory or declaration of principle which does 
 not allow attention being paid at every stage of 
 development to the actual interests of the 
 working classes, will always be set aside just 
 as all foreswearing of reforming detail work 
 and of the support of neighbouring middle class 
 parties has again and again been forgotten ; 
 and again and again at the congresses of the 
 party will the complaint be heard that here and 
 there in the electoral contest the ultimate aim of 
 socialism has not been put sufficiently in the 
 foreground. 
 
 In the quotation from Schulze-Gavernitz 
 which Plechanow flings at me, it runs that by 
 giving up the dictum that the condition of the 
 worker in modern society is hopeless, socialism 
 would lose its revolutionary point and would 
 
206 
 
 be absorbed in carrying out legislative de- 
 mands. From this contrast it is clearly 
 inferred that Schulze-Gavernitz always used 
 the concept " revolutionary " in the sense of a 
 struggle having revolution by violence in view. 
 Plechanow turns the thing round, and because I 
 have not maintained the condition of the 
 worker to be hopeless, because I acknowledge 
 its capability of improvement and many other 
 facts which bourgeois economists have upheld, 
 he carts me over to the "opponents of scientific 
 socialism. ' ' 
 
 Unfortunately for the scientific socialism of 
 Plechanow, the Marxist propositions on the 
 hopelessness of the position of the worker have 
 been upset in a book which bears the title. 
 Capital: A Criticism of Political Economy. 
 There we read of the " physical and moral 
 regeneration " of the textile workers in Lanca- 
 shire through the Factory Law of 1847, which 
 "struck the feeblest eye." A bourgeois 
 republic was not even necessary to bring about 
 a certain improvement in the situation of a large 
 section of workers ! In the same book we 
 read that the society of to-day is no firm crystal, 
 but an organism capable of change and con- 
 stantly engaged in a process of change, that also 
 in the treatment of economic questions on the 
 part of the official representatives of this 
 society an "improvement was unmistakable." 
 Further that the author had devoted so large a 
 space in his book to the results of the English 
 Factory Laws in order to spur the Continent to 
 imitate them and thus to work so that the 
 
207 
 
 process of transforming society may be ac- 
 complished in ever more humane forms.* All 
 of which signifies not hopelessness but capa- 
 bility of improvement in the condition of the 
 worker. And, as since 1866, when this was 
 written, the legislation depicted has not grown 
 weaker but has been improved, made more 
 general, and has been supplemented by laws 
 and organisations working in the same direc- 
 tion, there can be no more doubt to-day than 
 formerly of the hopefulness of the position of 
 the worker. If to state such facts means fol- 
 lowing the " immortal Bastiat," then among 
 the first ranks of these followers is — Karl Marx. 
 
 Now, it can be asserted against me that 
 Marx certainly recognised those improvements, 
 but that the chapter on the historical tendency 
 of capitalist accumulation at the end of the first 
 volume of Capital shows how little these details 
 influenced his fundamental mode of viewing 
 things. To which I answer that as far as that 
 is correct it speaks against that chapter and 
 not against me. 
 
 One can interpret this chapter in very dif- 
 ferent kinds of ways. I believe I was the first 
 to point out, and indeed repeatedly, that it 
 was a summary characterisation of the ten- 
 dency of a development which is found in 
 capitalist accumulation, but which in practice 
 is not carried out completely and which there- 
 fore need not be driven to the critical point of 
 the antagonism there depicted. Engels has 
 
 * Preface. 
 
208 
 
 never expressed himself against this interpre- 
 tation of mine, never, either verbally or in print, 
 declared it to be wrong. Nor did he say a word 
 against me when I wrote, in 1891, in an essay 
 on a work of Schulze-Gavernitz on the questions 
 referred to : (" It is clear that where legisla- 
 tion, this systematic and conscious action of 
 society, interferes in an appropriate way, the 
 working of the tendencies of economic develop- 
 ment is thwarted, under some circumstances 
 can even be annihilated. Marx and Engels 
 have not only never denied this, but, on the 
 contrary, have always emphasised it. "^ If 
 one reads the chapter mentioned with this idea, 
 one will also, in a few sentences, silently place 
 the word " tendency " and thus be spared the 
 need of bringing this chapter into accord with 
 reality by distorting arts of interpretation. 
 But then the chapter itself would become of 
 less value the more progress is made in actual 
 evolution. For its theoretic importance 
 does not lie in the argument of the general 
 tendency to capitalistic centralisation and 
 accumulation which had been affirmed long 
 before Marx by bourgeois economists and 
 socialists, but in the presentation, peculiar to 
 Marx, of circumstances and forms under which 
 it would work at a more advanced stage of 
 evolution, and of the results to which it would 
 lead. But in this respect actual evolution is 
 really always bringing forth new arrangements, 
 forces, facts, in face of which that presentation 
 seems insufficient and loses to a corresponding 
 * Neue Zeit ix., i, p. 736. 
 
209 
 
 extent the capability of serving as a sketch of 
 the coming evolution. That is how I under- 
 stand it. 
 
 One can, however, understand this chapter 
 differently. One can conceive it in this way, 
 that all the improvements mentioned there, and 
 some possibly ensuing, ^nly create temporary 
 remedies against the oppressive tendencies of 
 capitalism, that they signify unimportant 
 modifications which cannot in the long run 
 effect anything substantially against the critical 
 point of antagonisms laid down by Marx, that 
 this will finally appear — if not literally yet 
 substantially — in the manner depicted, and ■yill 
 lead to catastrophic change by violence. This 
 interpretation can be founded on the categoric 
 wording of the last sentences of the chapter, 
 and receives a certain confirmation because at 
 the end reference is again made to the Com- 
 munist Manifesto, whilst Hegel also appeared 
 shortly before with his negation of the nega- 
 tion — the restoration on a new foundation of 
 individual property negatived by the capitalist 
 manner of production. 
 
 According to my view, it is impossible 
 simply to declare the one conception right and 
 the other absolutely wrong. (To me the chapter 
 illustrates a dualism which runs through the 
 whole monumental work of Marx, and which 
 also finds expression in a less pregnant fashion 
 in other passages — a dualism which consists 
 in this, that the work aims at being a scientific 
 inquiry and also at proving a theory laid down 
 long before its drafting; a formula lies at the 
 
basis of it in which the result to which the 
 exposition should lead is fixed beforehand. 
 The return to the Communist Manifesto points 
 here to a real residue of Utopianism in the 
 Marxist systentij) Marx had accepted the solu- 
 tion of the Utopians in essentials, but had 
 recognised their means and proofs as inade- 
 quate. He therefore undertook a revision of 
 I them, and this tvith the zeal, the critical 
 acuteness, and love of truth of a scientific, 
 genius. He suppressed no important fact, he 
 also forebore belittling artificially the impor- 
 tance of these facts as long as the object of the 
 inquiry had no immediate reference to the final 
 aim of the formula to be proved. To that 
 point his work is free of every tendency neces- 
 sarily interfering with the scientific method.* 
 
 For the general sympathy with the strivings 
 for emancipation of the working classes does 
 not in itself stand in the way of the scientific 
 method. But, as Marx approaches a point 
 /when that final aim enters seriously into the 
 I question, he becomes uncertain and unreliable. 
 Such contradictions then appear as were shown 
 in the book under consideration, for instance, 
 in the section on the movement of incomes in 
 modern society. It thus appears that this 
 great scientific spirit was, in the end, a slave 
 to a doctrine. To express it figuratively, he 
 has raised a mighty building within the 
 
 * I take no account of that tendency which finds 
 expression in the treatment of persons and the repre- 
 sentation of occurrences, and which has no necessary 
 connection with the analysis of the economic evolution. 
 
framework of a scaifolding he found existing, 
 and in its erection he kept strictly to the laws of 
 scientific architecture as long as they did not 
 collide with the conditions which the construc- 
 tion of the scaifolding prescribed, but he 
 neglected or evaded them when the scaffolding 
 did not allow of their observance. Where the 
 scaffolding put limits in the way of the building, 
 instead of destroying the scaifolding, he changed 
 the building itself at the cost of its right pro- 
 portions and so made it all the more dependent 
 on the scaifolding. Was it the consciousness 
 of this irrational relation which caused him 
 continually to pass from completing his work 
 to amending special parts of it ? How- 
 ever that may be, my conviction is thati 
 wherever that dualism shows itself the scaf- 
 folding must fall if the building is to grow in 
 its right proportions. In the latter, and not 
 in the former, is found what is worthy to live 
 in Marx. 
 
 Nothing confirms me more in this conception 
 than the anxiety with which some persons seek 
 to maintain certain statements in Capital, 
 which are falsified by facts. It is just some of 
 the more deeply devoted followers of Marx 
 who have not been able to separate themselves 
 from the dialectical form of the work — that is 
 the scaffolding alluded to — ^who do this. At 
 least, that is only how I can explain the words 
 of a man, otherwise so amenable to facts as 
 Kautsky, who, when I observed in Stuttgart 
 that the number of wealthy people for many 
 years had increased, not decreased, answered : 
 
" If that were true then the date of our victory 
 would not only be very long postponed, but we 
 should never attain our goal. If it be capitalists 
 who increase and not those with no possessions, 
 then we are going ever further from our goal 
 the more evolution progresses, then capitalism 
 grows stronger, not socialism." 
 /That the number of the wealthy increases 
 and does not diminish is not an invention of 
 bourgeois " harmony economists,'" but a fact 
 established by the boards of assessment for 
 taxes, often to the chagrin of those concerned, 
 a fact which can no longer be disputed. wBut 
 what is the significance of this fact as regards 
 the victory of socialism? Why should the 
 realisation of socialism depend on its refutation ? 
 Well, simply for this reason : because the 
 dialectical scheme seems so to prescribe it; 
 because a post threatens to fall out of the 
 scaffolding if one admits that the social surplus 
 product is appropriated by an increasing instead 
 of a decreasing number of possessors. But^it 
 is only the speculative theory that is affected 
 by this matter; it does not at all affect the 
 actual movement. Neither the struggle of the 
 workers for democracy in politics nor their 
 strugg-le for democracy in industry is touched 
 by it.OThe prospects of this struggle do not 
 depend on the theory of concentration of 
 capital in the hands of a diminishing number of 
 magnates, nor on the whole dialectical scaf- 
 folding of which this is a plank, but on the 
 growth of social wealth and of the social pro- 
 ductive forces, in conjunction with general 
 
213 
 
 social progress, and, particularly, in conjunc^ 
 tion with the intellectual and moral advance oil 
 the working classes themselves. / 
 
 (^uppose the victory of socialism depended 
 on the constant shrinkage in the number of 
 capitalist magnates, social democracy, if it 
 wanted to act logically, either would have to 
 support the heaping up of capital in ever 
 fewer hands, or at least to give no support to 
 anything that would stop this shrinkage^) As 
 a matter of fact it often enough does neither 
 the one nor the other. These considerations, 
 for instance, do not govern its votes on 
 questions of taxation. From the standpoint of 
 the catastrophic theory a great part of this 
 practical activity of the working classes is an 
 undoing of work that ought to be allowed to 
 be done. \}.t is not social democracy which is 
 wrong in this respect. The fault lies in the 
 doctrine which assumes that progress depends 
 on the deterioration of social conditions^ 
 
 In his preface to the Agrarian Question, 
 Kautsky turns upon those who speak of the 
 necessity of a triumph over Marxism. He says 
 that he sees doubt and hesitation expressed, 
 but that these alone indicate no development. 
 That is so far correct in that doubt and hesita- 
 tion are no positive refutation. They can, 
 however, be the first step towards it. But is 
 it altogether a matter of triumphing over 
 Marxism, or is it not rather a rejection of 
 certain remains of Utopianism which adhere to 
 Marxism, and which are the cause of the con- 
 tradictions in theory and practice which have 
 
214 
 
 been pointed out in Marxism by its critics? 
 This treatise has become already more volumin- 
 ous than it ought to have been, and I must 
 therefore abstain from going into all the details 
 of this subject. But all the more I consider it 
 my duty to declare that I hold a whole series 
 of objections raised by opponents against cer- 
 tain items in Marx's theory as unrefuted, some 
 as irrefutable. And I can do this all the more 
 easily as these objections are quite irrelevant 
 to the strivings of social democracy. 
 
 We ought to be less susceptible in this res- 
 pect. It has repeatedly happened that con- 
 clusions by followers of Marx, who believed 
 that they contradicted the theories of Marx, 
 have been disputed with great zeal, and, in the 
 end, the supposed contradictions were proved 
 for the most part not to exist. Amongst others 
 I have in my mind the controversy concerning 
 the investigations of the late Dr. Stiebling on 
 the effect of the concentration of capital on the 
 rate of exploitation. In his manner of ex- 
 pression, as well as in separate items of his 
 calculations, Stiebling made some great blun- 
 ders, which it is the merit of Kautsky to have 
 discovered. But on the other hand the third 
 volume of Capital has shown that the funda- 
 mental thought of Stiebling 's works — ^the 
 decrease of the rate of exploitation with the 
 increasing concentration of capital did not stand 
 in such opposition to Marx's doctrine as then 
 appeared to most of us, although his proof of 
 the phenomenon is different from that of Marx. 
 Yet in his time Stiebling had to hear (from 
 
Kautsky) that if what he inferred was correct, 
 the theoretical foundation of the working class 
 movement, the theory of Marx, was false. 
 And as a matter of fact those who spoke thus 
 could refer to various passages from Marx. 
 An analysis of the controversy which was 
 entered into over the essays of Stiebling could 
 very well serve as an illustration of some of 
 the contradictions of the Marxist theory of 
 value. 
 
 Similar conflicts exist with regard to the 
 estimate of the relation of economics and force 
 in history, and they find their counterpart in 
 the criticism on the practical tasks and 
 possibilities of the working class movement 
 which has already been discussed in another 
 place. This is, however, a point to which it 
 is necessary to recur. But the question to be 
 investigated is not how far originally, and in 
 the further course of history, force determined 
 economy and vice versa, but what is the crea- 
 tive power of force in a given society. 
 
 Now it would be absurd to go back to the 
 prejudices of former generations with regard 
 to the capabilities of political power, for such a 
 thing would mean that we would have to go 
 still further back to explain those prejudices. 
 The prejudices which the Utopians, for example, 
 cherished rested on good grounds ; indeed, one 
 can scarcely say that they were prejudices, 
 for they rested on the real immaturity of the 
 working classes of the period as a result of 
 which, only a transitory mob rule on the one 
 side or a return to the class oligarchy on the 
 
2l6 
 
 other was the only possible outcome of the 
 political power of the masses. Under these 
 circumstances a reference to politics could 
 appear only to be a turning aside from more 
 pressing duties. To-day these conditions have 
 been to some extent removed, and therefore no 
 person capable of reflecting will think of criti- 
 cising political action with the arguments of 
 that period. 
 
 Marxism first turned the thing round, as we 
 have seen, and preached (in view of the poten- 
 tial capacity of the industrial proletariat) 
 political action as the most important duty of 
 the movement. But it was thereby involved 
 in great contradictions. It also recognised, 
 and separated itself thereby from the dema- 
 gogic parties, that the working classes had 
 not yet attained the required maturity for their 
 emancipation, and also that the economic 
 preliminary conditions for such were not pre- 
 sent. But in spite of that it turned again 
 and again to tactics which supposed both 
 preliminary conditions as almost fulfilled. We 
 come across passages in its publications where 
 the immaturity of the workers is emphasised 
 with an acuteness which differs very little from 
 the doctrinairism of the early Utopian socialists, 
 and soon afterwards we come across passages 
 according to which we should assume that all 
 culture, all intelligence, all virtue, is only to be 
 found among the working classes — ^passages 
 which make it incomprehensible why the 
 most extreme social revolutionaries and 
 physical force anarchists should not be right. 
 
217 
 
 Corresponding with thatj(political action is ever 
 directed towards a revolutionary convulsion 
 expected in an imminent future, in the face of 
 which legislative work for a long time appears 
 only as a pis aller — a merely temporary device. 
 And we look in vain for any systematic in- 
 vestigation of the question of what can be 
 expected from legal, and what from revolu- 
 tionary action) 
 
 It is evident at the first glance that great 
 differences exist in the latter respect. But 
 they are usually found to be this : that law, o r 
 the path of, legislative rpfnrnj , i«j <-^f» ct^nro.- 
 way, and revolutionary force the quicker an d 
 morft radical* But that only is true in a 
 restricted sense. Whether the legislative or 
 the revolutionary method is the more promising 
 depends entirely on the nature of the measures 
 and on their relation to different classes and 
 customs of the people. 
 
 yn general, one may say here that the 
 revolutionary way (always in the sense of 
 revolution by violence) does quicker work as 
 far as it deals with removal of obstacles which 
 a privileged minority places in the path of 
 social progress : that its strength lies on its 
 negative side. 
 
 Constitutional legislation works more slowly 
 
 * In this sense Marx speaks in Capital, in the chapter 
 about the working day, of the " peculiar advantages of 
 the French revolutionary method " which had been made 
 manifest in the French twelve hours' law of 1848. It 
 dictates for all workers and all factories without dis- 
 tinction the same working day. That is right. But it 
 has been ascertained that this radical law remained a 
 dead letter for a whole generation. 
 
2l8 
 
 in this respect as a rule.) Its path is usually 
 that of compromise, not the prohibition, but 
 the buying out of acquired rights. But it is 
 stronger than the revolution scheme where 
 prejudice and the limited horizon of the great 
 mass of the people appear as hindrances to 
 social progress, and it oifers greater advantages 
 where it is a question of the creation of per- 
 manent economic arrangements capable of 
 lasting; in other words, it is best adapted to 
 positive social-political work. 
 
 In legislation, intellect dom inates over 
 erhotion m quiet times; during a revolution 
 "einotion dominat es over intellect . But it emotion 
 is"ofr(Sr'aH"imperfect leader, the intellect is a 
 slow motive force. Where a revolution sins by 
 over haste, the every-day legislator sins by 
 procrastination. Legislation works as a syste- 
 matic force, revolution as an elementary force. 
 ^s soon as a nation has attained a position 
 where the rights of the propertied minority 
 have ceased to be a serious obstacle to social 
 progress, where the negative tasks of political 
 action are less pressing than the positive, then 
 the appeal to a revolution by force becomes a 
 meaningless phrase. *y One can overturn a 
 government or a privileged minority, but 
 not a nation. When the working classes 
 do not possess very strong economic organisa- 
 tions of their own, and have not attained, 
 
 * "Fortunately, 'revolution' in this country has ceased 
 to be anything more than an affected phrase." — The 
 monthly News of the Independent Labour Party in 
 England, Jan., 1899. 
 
and their results are very different from those 
 figures.* Of a general reduction of hours of 
 labour to five, four, or even three or two hours, 
 such as was formerly accepted, there can be 
 no hope at any time within sight, unless the 
 general standard of life is much reduced. Even 
 under a collective organisation of work, labour 
 must begin very young and only cease at a 
 rather advanced age, it is to be reduced con- 
 siderably below an eight-hours' day. Those 
 persons ought to understand this first of all 
 who indulge in the most extreme exaggerations 
 regarding the ratio of the number of the non- 
 propertied classes to that of the propertied. 
 But he who thinks irrationally on one point 
 does so usually on another. And, therefore, I 
 am not surprised if the same Plechanow, who 
 is angered to see the position of working men 
 represented as not hopeless, has only the 
 annihilating verdict, " Philistine," for my con- 
 clusions on the impossibility at any period 
 within sight of abandoning the principle of the 
 economic self-responsibility of those capable of 
 working. It is not for nothing that one is the 
 philosopher of irresponsibility. 
 
 * Compare Atlanticus : A. Glance into the State of the 
 Future : Production and consumption in the Social State 
 (Stuttgart : Dietz), as well as the Essays : Something on 
 Collectivism, by Dr. Joseph Ritter von Neupauer in 
 Pernerstorfer's Deutsche Worte for 1897-98. These 
 works are not free from objection, but they are to be 
 warmly recommended to those who wish to learn about 
 the problems referred to. Neupauer thinks that if the 
 average work done by all machines were reckoned it 
 would be shown that they barely save a third of human 
 labour power. 
 
But he who surveys the actual workers' 
 movement will also find that the freedom from 
 those qualities which appeared Philistine to a 
 person born in the bourgeoisie, is very little 
 valued by the workers, that they in no way 
 support the morale of proletarianism, but, on 
 the contrary, tend to make a " Philistine " out 
 of a proletarian. With the roving proletarian 
 without a family and home, no lasting, firm 
 trade union movement would be possible. It 
 is no bourgeois prejudice, but a conviction 
 gained through decades of labour organisation, 
 which has made so many of the English labour 
 leaders — socialists and non-socialists — into 
 zealous adherents of the temperance movement. 
 The working class socialists know the faults of 
 their class, and the most conscientious among 
 them, far from glorifying these faults, seek to 
 overcome them with all their power. 
 ^Ve cannot demand from a cla ss, the, frre at 
 ^majority of w hose members live unde r crowde d 
 c onditions, are badly eaucateo, and havean 
 uncert ain and insufficient income, the high in - 
 fellectuiai and moral standard which the 
 organisadO U Ana existenc e o t a socialist OT HT' 
 mu nity presupposes . We will, therefore, not 
 ascribe it to them by way of fiction.) Let us 
 rejoice at the great stock of intelligence, 
 renunciation, and energy which the modern 
 working class movement has partly revealed, 
 partly produced ; but we must not assign, with- 
 out discrimination to the masses, the millions, 
 what holds good, say, of hundreds of thousands. 
 I will not repeat the declarations which have 
 
been made to me on this point by working men 
 verbally and in writing ; I do not need to defend 
 myself before reasonable persons against the 
 suspicion of Pharisaism and the conceit of 
 pedantry. But I confess willingly that I 
 measure here with two kinds of measures. Just 
 because I expect much of the working classes 
 I censure much more everything that tends to 
 corrupt their moral judgment than I do similar 
 habits of the higher classes, and I see with the 
 greatest regret that a tone of literary deca- 
 dence is spreading here and there in the 
 working class press which can only have a 
 confusing and corrupting effect. A class which 
 is aspiring needs a sound morale and must 
 suffer no deterioration. Whether it sets out 
 for itself an ideal ultimate aim is of secondary 
 importance if it pursues with energy its 
 proximate aims. The important point is that 
 these aims are inspired by a definite principle 
 which expresses a higher degree of economy 
 and of social life, that they are an embodiment 
 of a social conception which means in the 
 evolution of civilisation a higher view of morals 
 and of legal rights. 
 
 From this point of view I cannot subscribe 
 to the proposition : " The working class has 
 no ideas to realise." I see in it rather a self- 
 deception, if it is not a mere play upon words 
 on the part of its author. 
 
 And in this mind, I, at the time, resorted 
 to' the spirit of th e great K6ni g f^'''^g phTT Fu 
 
 -sopherp'tfa g'a'itic "oT pure reason, against the 
 cant whic h sough tto get a hold on the working 
 
223 
 
 class movement and to which the Hegelian 
 d iafetic uileib U umn'f(3ytaM6 ntagt. l dl'Jl his 
 ihT:he convict'ibrithat social aemocracj/required 
 a Kant who should judge the received opinion 
 and examine it critically with deep acuteness, 
 w ho should show where its_apparent materialism 
 i s the highest — and is the ref ore the m ost easily 
 misleading— ideology, and warn it that the con; 
 te mpt o f the ide al, the magnifying of mate rial 
 factors until tnev become omnipotent force's of 
 eyoluti on^s a self-deceptipn,^hich has been 
 and will beCApused as sudrSt every opportunity 
 by the action of those who proclaim it. Such 
 a thinker, who with convincing exactness could 
 show what is worthy and destined to live in the 
 work of our great champions, and what must 
 and can perish, would also make it possible for 
 us to hold a more unbiassed judgment on those 
 works which, although not starting from pre- 
 mises which to-day appear to us as decisive, 
 yet are devoted to the ends for which social 
 democracy is fighting. No impartial thinker 
 will deny that socialist criticism often fails in 
 this and discloses all the dark sides of epigo- 
 nism. I have myself done my share in this, 
 and therefore cast a stone at no one. But just 
 because I belong to the school, I believe I am 
 justified in giving expression to the need for 
 reform. If I did not fear that what I write 
 should be misunderstood (I aim, of course, 
 prepared for its being misconstrued), I would 
 translate Back to Kant by Back to Lange. 
 For, just as the philosophers and investigators 
 who stand by that motto are not concerned 
 
224 
 
 with going back to the letter of what the 
 Konigsberg philosopher wrote, but are only 
 concerned with the fundamental principles of 
 his criticism, so social democracy would just as 
 little think of going back to all the social- 
 political views of Frederick Albert Lange. 
 What I have in mind is the distinguishing 
 union in L ange of an upright and intre pid 
 ch ampionship of the struggles of the^wo ridng 
 
 f reedoni^ ^*'9i;;LJ?l£iHf^''^ —which — was al^yay " 
 
 ready t o acknowledge m i.stakesjafuLx££P£nise 
 new" trufKsT '""Perhaps such a great broad- 
 nunSe'Sness as meets us in Lange 's writings is 
 only to be found in persons who are wanting 
 in the penetrating acuteness which is the pro- 
 perty of pioneer spirits like Marx. But it is 
 not every epoch that produces a Marx, and 
 even for a man of equal genius the working 
 class movement of to-day is too great to enable 
 him to occupy the position which Marx fills in 
 its history. To-day it needs, in addition to the 
 fighting spirit, the co-ordinating and construc- 
 tive thinkers who are intellectually enough 
 advanced to be able to separate the chaif from 
 the wheat, who are great enough in their mode 
 of thinking to recognise also the little plant 
 that has grown on another soil than theirs, and 
 who, perhaps, though not kings, are warm- 
 hearted republicans in, the domain 'of socialist 
 thought.