A History of Economic Doctrines / from the time of the physiocrats to the present day

by Charles Gide; Charles Rist

CHAPTER III: MARXISM

I: KARL MARX[964]

Everyone knows of the spell cast over the socialism of the last forty years by the doctrines of Karl Marx and the contempt with which this newer so-called scientific socialism refers to the earlier or Utopian kind. But what is even more striking than the success of Marxian socialism is its want of sympathy with the heretical doctrines of its predecessors the Communists and Fourierists, and the pride it takes in regarding itself as a mere development or rehabilitation of the great Classical tradition.

To give within the limits of a single chapter a résumé of a doctrine that claims to review and to reconstruct the whole of economic theory is clearly impossible, and we shall merely attempt an examination of two of Marx’s more essential doctrines, namely, his theory of surplus labour and value and his law of automatic appropriation, more familiarly but less accurately known as the law of concentration of capital. The first is based upon a particular conception of exchange value and the second upon a special theory of economic evolution. To employ Comtean phraseology, the one belongs to the realm of economic statics, the other to the domain of economic dynamics.

1. Surplus Labour and Surplus Value

The laborious demonstration which follows will become clearer if we remind ourselves of the objects Marx had in view. Marx’s aim was to show how the propertied class had always lived upon the labour of the non-propertied classes—the possessors upon the non-possessing. This was by no means a new idea, as we have already made its acquaintance in the writings of Sismondi, Saint-Simon, Proudhon, and Rodbertus. But the essence of the criticism of these writers was always social rather than economic, the institution of private property and its injustice being the chief object of attack. Karl Marx, on the other hand, deliberately directed the gravamen of the charge against economic science itself, especially against the conception of exchange. He endeavours to prove that what we call exploitation must always exist, that it is an inevitable outcome of exchange—an economic necessity to which both master and man must submit.

It is convenient to begin with an examination of economic value. Marx lays down the doctrine that labour is not merely the measure and cause of value, but that it is also its substance. We have already had occasion to note how Ricardo was somewhat favourably inclined to the same view, though hardly willing to adopt it. There is no such hesitation on the part of Marx: it is all accepted in a characteristically thorough fashion. Of course, he does not deny that utility is a necessary condition of value and that it is really the only consideration in the case of “value in use.” But utility alone is not enough to explain value in exchange, since every act of exchange implies some common element, some degree of identity between the exchanged commodities. This identity is certainly not the result of utility, because the degree of utility is different in every commodity, and it is this difference that constitutes the raison d’être of exchange. The common or homogeneous element which is contained in commodities themselves heterogeneous in character is the quantity of labour, great or small, which is contained in them. The value of every commodity is simply the amount of crystallized human labour which it contains, and commodities differ in value according to the different quantities of labour which are “socially necessary to produce them.”[965]

Let us take the case of a working man, an employee in any kind of industry, working ten hours a day.

What will be the exchange value of the produce of his labour? It will be the equivalent of ten hours’ labour, whether the commodity produced be cloth or coal or what not. And since the master or the capitalist, as Marx always calls him, in accordance with the terms of the wage bargain, reserves for himself the right of disposing of that commodity, he sells it at its real value, which is the equivalent of ten hours’ labour.

The worker himself is cut off with a wage which simply represents the price which the capitalist pays for his labour force (Arbeitskraft), and the capitalist reserves to himself the right of disposing of the commodity at his own good pleasure. Its value is determined in the same way as that of every other exchangeable commodity. Labour-force or manual labour is just a commodity, and its value is determined by the number of hours of labour necessary for its production.[966]

“The quantity of labour necessary to produce the labour-force” is a somewhat formidable expression, and it is very difficult for any one who is beginning a study of Marx to appreciate its significance, but it is very essential that we should try, since everything turns upon a clear understanding of this phrase. But it is really not so mysterious after all. Suppose that instead of the labour of an artisan we take the work of a machine. No engineer would be surprised if we asked him the running expenses of that machine, and he might reply that it was costing one or two tons of coal per hour or eight or twelve per diem; and since the value of the coal merely represents a certain amount of human labour on the part of the coal-miner, there would be no difficulty in expressing it in terms of labour. Under the wage system the labourer is simply a machine, differing from the latter merely in the smaller quantity of wealth which he produces. The value of an hour’s labour or a day’s toil can be measured by the quantity of necessaries required to keep the worker in full productive efficiency during that period. Every employer who pays wages in kind—which is still the case in agriculture—always makes that kind of calculation, and even when the worker is paid a money wage things are much the same, for the money simply represents the cost of those necessaries.

Let us proceed a step farther. The value of the commodities necessary for the upkeep of labour is never equal to the value of the produce of that labour. In the instance given it would not equal the value of ten hours’ labour—perhaps not even five. Human labour under normal conditions always produces more than the mere value of the goods consumed.[967]

This is the crux of the problem. The mystery surrounding capitalist production is at last solved. The value produced by the labourer passes into the hands of the capitalist, who disposes of it and gives back to the labourer enough to pay for the food consumed by him during the time he was producing the commodity. The difference goes into the capitalist’s pocket. The product is sold as the equivalent of ten hours’ labour, but the labourer receives the equivalent of five hours only. Marx speaks of this as surplus value (Mehrwerth), a term that has become exceedingly popular since.[968]

Thus the capitalist gets ten hours’ labour out of the workman and only pays him for five,[969] the other five hours costing him nothing at all. During the first five hours the workman produces the equivalent of his wages, but after the end of the fifth hour he is working for nothing. The labour of this extra number of hours during which the surplus value is being produced and for which the worker receives nothing Marx calls surplus labour. By that he means the supererogatory labour which yields nothing to the worker, but merely involves an extra tax upon his energies and simply increases the capitalist’s fortune.

Naturally the capitalist’s interest is to augment this surplus value which goes to swell his profits. This can be effected in a number of ways, and an analysis of some of these processes is one of the most characteristic features of the Marxian doctrine. This analysis may be summed up under two main divisions.

1. The first method is to prolong the working day as much as possible in order to increase the number of hours of surplus labour. If the number of working hours can be increased from ten to twelve the surplus will automatically grow from five to seven. This is exactly what manufacturers have always tried to do. Factory legislation, however, has forced some of them to limit the number of hours, and this has resulted in checking the growth of surplus value somewhat. But this check applies only to a limited number of industries.

2. A second method is to diminish the number of hours necessary to produce the worker’s sustenance. Were this to fall from five to three it is clear that the surplus would again rise from five to seven. Such reduction is possible through the perfection of industrial organisation or through a reduction in the cost of living, a result which is usually effected by means of co-operation.[970] The capitalist also often manages to bring this about by setting up philanthropic institutions or by employing women and children, who require less for their upkeep than adults. Women and children have been taken from the house and the task of housekeeping and cookery has been left in the hands of the men. But laws regulating the employment of women and children have again defeated these tactics.[971]

Such is a very brief summary of Marx’s demonstration. Its real originality lies in the fact that it does not consist of commonplace recriminations concerning the exploitation of workers and the greed of exploiters, but shows how the worker is robbed even when he gets all that he is entitled to.[972] It cannot be said that the capitalist has robbed him. He has paid him a fair price for his labour; that is, he has given it its full exchange value. The conditions of the wage bargain have been observed in every particular: equal value has been given in exchange for equal value. Given the capitalistic régime and the free competition of labour, the result could not be otherwise. The worker, perhaps, may be surprised at this unexpected result, which only secures him half the value of his labour, but he can only look on like a bewildered spectator. Everything has passed off quite correctly. The capitalist, no doubt, is a shrewd person, and knows that when he buys labour power he has got hold of a good thing, because it is the only merchandise which possesses the mysterious capacity of producing more value than it itself contains.[973] He knows this beforehand, and, as Marx says, it is “the source of considerable pleasure to him.” “It is a particularly happy condition of things when the buyer is also allowed to sell it wherever and whenever he likes without having to part with any of his privileges as a vendor.” The result is that the worker has no means of defence either legal or economic, and is as helpless as a peasant who has sold a cow in calf without knowing it.

Hitherto we have spoken only of labour. But the outstanding personage in the book—the hero of the volume—is capital, whose name appears on the title-page. Our exposition of the Marxian doctrine of production would accordingly be very incomplete if we omitted to make reference to his treatment of capital.

Taken by itself capital is, of course, sterile, for it is understood that labour is the sole source of value. But labour cannot produce unless it consumes a certain proportion of capital, and it is important that we should understand something of the combination of capital and labour.

Marx distinguishes between two kinds of capital. The first serves for the upkeep of the working-class population, either in the way of wages or direct subsistence. The older economists referred to it as the Wages Fund, and Marx calls it “variable capital.” If this kind of capital does not directly take part in production, it is this fund, after all, when consumed by labour that begets value and the surplus which is attached to it.

That other kind of capital which directly assists the productive activity of labour by supplying it with machinery, tools, etc., Marx calls “constant capital.” This latter kind of capital, which is not absorbed or vitalized by labour, does not result in the production of surplus value. It simply produces the equivalent of its value, which is the sum total of all the values absorbed during the time when it was being produced. This constant capital is evidently the crystallized product of labour, and its value, like that of any other product, is determined solely by the number of hours of labour it has taken to produce. This value, whether it include the cost of producing the raw material or merely the cost of labour employed in elaborating it, should be rediscoverable in the finished product. But there is nothing more—no surplus. The economists refer to this as depreciation, and everyone knows that depreciation implies no profits at any rate.[974]

It seems quite obvious that it is to the interest of the capitalist to employ only variable capital, or at least that it will pay him to reduce the amount of constant capital used to the irreducible minimum.[975] But we are here met with an anomaly which is the despair of all Marxian commentators, and which must have caused Marx himself some amount of embarrassment, if we may judge by the laborious demonstration which he gives.[976]

If fixed capital is really unproductive, how is it that modern production is always increasing the quantity of fixed capital which it employs, until this has now become one of its most familiar features? Is it because it yields less profit than that yielded by the smaller handicrafts or agriculture? Again, how are we to account for the variation in the rates of profit in different industries according to the different quantities of capital employed, seeing that it is an axiom of political economy that under a régime of free competition with equal security for everybody the returns on different capitals should everywhere be the same?

Marx replies by saying that the rate of profit is the same for all capitalists within the country, but that this rate is the average of the different rates in all the different industries. In other words, it is the rate that would obtain if every industry in the country employing varying amounts of fixed and circulating capital formed a part of one whole. It must not be thought of as a kind of statistical average, but simply as a kind of average which competition brings about. The result is other than might have been expected.[977] Those industries which have a large amount of variable capital—agriculture, for example—find themselves with just the average rate of return, but draw much less in the way of surplus value than they had expected, and so Marx refers to them as undertakings of an inferior character. On the contrary, those industries which possess a large amount of constant capital draw more than their capital had led them to hope for, and Marx refers to them as industries of a superior character.[978] Hence those industries which employ a considerable amount of machinery expand at the expense of the others. It is because the latter kind find themselves in a more favourable position, or, in other words, realize greater profits, that they do employ surplus labour, from which surplus value is naturally derived.[979]

While admiring the ingenuity of the dialectics, we must not blind ourselves to the simple fact which Marx was so anxious to hide, but which is nevertheless implicit in all this, namely, that the rate of profit, which means also the value of the goods, is regulated by competition—that is, by demand and supply—but bears no relation to the quantity of labour employed. We must also remember that the entrepreneur, far from seeing his profits diminish as he employs less human labour, finds them increasing. This contradiction is just one of those flaws that finally cause the downfall of the majestic edifice so laboriously raised by Marx.

2. The Law of Concentration or Appropriation

The law of concentration of capital,[980] which can only be interpreted in the light of economic history, is an attempt to show that the régime of private property and personal gain under which we live is about to give place to an era of social enterprise and collective property.[981] Let us try to follow the argument as given by Marx.

Again must we cast back our thoughts to a period before the earliest beginnings of capital in the sixteenth century—a period when, according to the socialists, there existed neither capital nor capitalist. Capital in the economic sense of a mere instrument of production must have existed even before this time, but the socialists are of opinion that it had quite a different significance then, and it is important that we should appreciate their point of view. Their employment of the term is closely akin to the vulgar use of the word as anything that yields a rent, and yields the said rent as the result, not of the capitalist’s labour, but of the toil of others. But under the guild system which preceded this condition of things the majority of the workers possessed most of the instruments of production themselves.

Then follows a description of a series of changes which we cannot attempt to study in detail, but which forms a singularly dramatic chapter in the writings of Marx. New means of communication are established and new markets opened as the result of important mechanical discoveries coupled with the consolidation of the great modern States. The rise of banks and of trading companies, together with the formation of public debts, all this resulted in the concentration of capital in the hands of a few and the expropriation of the small proprietor.

But all this was only a beginning. If capital in this newer sense of an instrument for making profit out of the labour of others was ever to come into its own and develop, if the surplus labour and surplus value of which we have given an analysis were really to contribute to the growth and upkeep of this capital, it was necessary that the capitalist should be able to buy that unique merchandise which possesses such wonderful qualities in the open market. But labour-force can never be bought unless it has been previously detached from the instruments of production and removed from its surroundings. Every connexion with property must be severed, every trace of feudalism and of the guild system must be removed. Labour must be free—that is, saleable; or, in other words, it “must be forced to sell itself because the labourer has nothing else to sell.” For a long time the artisan was in the habit of selling his goods to the public without the intervention of any intermediary, but a day dawned when, no longer able to sell his products, he was reduced to selling himself.[982]

The creation of this new kind of property based upon the labour of others meant the extinction of that earlier form of property founded upon personal labour and the substitution for it of the modern proletariat. This was the task to which the bourgeoisie resolutely set itself for about three centuries, and its proclamation of the liberty of the labourer and the rights of man is just its pæan of victory. Its task was accomplished. The expropriated artisan who was already swelling the ranks of the proletariat seemed an established fact.

In reality this end was only partially accomplished even in the more capitalistic countries, but that there is a general movement in that direction seems clear in view of the following considerations.

(a) The most suggestive fact in this connexion is the growth of production on a large scale, resulting in the employment of machinery and in the rise of new forms of organisation such as trusts and cartels, new systems that were unknown in Marx’s day, but which have helped to confirm his suspicions. These trusts and cartels are especially important from a social point of view because they not only absorb the capital of the small independent proprietor, but swallow the medium-sized industry as well. This wonderful expansion of production on a large scale means a corresponding growth in the numbers of the proletariat, and capitalism, by increasing the number of wage-earners, helps to swell the ranks of its own enemies. “What the bourgeoisie produces, above all, therefore, are its own gravediggers.”[983]

(b) Over-production is another fruitful method. A contraction of the market results in a superabundance of workmen whose services are always available. They form a kind of industrial reserve army upon which the capitalist may draw at his pleasure—at one moment indiscriminately taking on a number of them, and throwing them back on to the streets again as soon as the demand shows signs of slackening.[984]

(c) The concentration of the rural population in towns is another contributing factor. This movement itself is the result of the disappearance of the small holder and the substitution of pastoral for arable farming, the outcome of it all being an addition to the ranks of the expropriated proletariat of an increasing number of hitherto independent proprietors and producers.

Such is the advent and growth of capitalism. It comes into the world “with bloody putrescence oozing out of every pore.” How different is the real history of capital from the idyllic presentation to which we are treated by the economists! They love to picture it as the slowly accumulated fruit of labour and abstinence, and the coexistence of the two classes, the capitalists and the workers, is supposed to date from an adventure that befell them both a few days after creation, when the good and the wise decided to follow the high road of capitalism and the idle and vicious the stony path of toil.

In reality capitalism is the outcome of class struggle—a struggle that will some day spell the ruin of the whole régime, when the expropriators will themselves be the expropriated. We are given no details as to how this is to be accomplished, and this abstention from prophecy distinguishes Marx from the Utopian socialists of the last two thousand years. His one object was to show how those very laws that led to the establishment of the régime would some day encompass its ruin.[985] The force of circumstance seemed to make self-destruction inevitable. “The capital régime,” writes one Marxian socialist, “begets its own negation, and the process is marked by that inevitability which is such a feature of all natural laws.”[986] The following facts are deduced as proofs that this process of self-destruction is already in course of being accomplished.

(a) Industrial crises, whether of over-production or under-consumption, have already become a chronic evil. The fact that to some extent they are to be regarded as the direct outcome of the capitalist system of production cannot prevent their damaging that system. The continual growth of fixed at the expense of circulating capital, involving as it does the substitution of machinery for hand labour, must also involve a continual reduction of the surplus value. In order to counteract this tendency the capitalists find themselves forced to keep ahead with production; they are driven to rely upon quantity, as they put it. The workers, on the other hand, find that it is gradually becoming impossible for them to buy the products of their labour with the wages which they get, because they never get a wage which is equal to the value of the product of their labour. Moreover, they periodically find themselves out of employment altogether and almost on the verge of starvation. Proudhon, as we have already seen, laid considerable stress upon this, and it is one of the instances in which Marx is obviously influenced by Proudhon.

The idea which underlies the Marxian theory is that every crisis involves a readjustment of the equilibrium between fixed and circulating capital. The growth of the former, though continuous, is not always uniform, and whole sections of it may occasionally be found to be without solid foundation which would warrant such expansion. But the crises which result in the destruction of these speculative accretions give a new spirit to the creation of further surplus value, which results in the creation of further fixed capital and more crises, and so the process goes on.[987]

(b) The growth of pauperism, which is the direct outcome of crises and want, is another factor. “The bourgeoisie is unfit any longer to be the ruling class in society, and to impose its conditions of existence upon society as an overriding law. It is unfit to rule because it is incompetent to assure an existence to its slave within his slavery, because it cannot help letting him sink into such a state that it has to feed him instead of being fed by him.”[988]

(c) The rapid multiplication of joint stock companies is the final buttress with which the Marxians have strengthened their contention. Under the joint stock principle the right of property is simply reduced to the possession of a few strips of paper giving the anonymous owner the right to draw dividends in some commercial concern or other. Profit is seen in all its nakedness as a dividend which is wholly independent of all personal effort and produced entirely as the result of the workers’ drudgery. The duty of personally supervising the methods of production and of opening up new and better ways of manufacturing, which served to disguise the real character of the individual employer and to justify his existence, is no longer performed by the owner, but falls to the lot of two new functionaries, the parasitic company director on the one hand and the salaried official on the other.

Once the whole industry of a country becomes organized on a joint stock basis—or, better still, once it passes over into the hands of a trust, which is simply a manifestation of the joint-stock principle at its highest—expropriation will be a comparatively simple matter. By a mere stroke of the pen property hitherto held by private shareholders will be transferred into the custody of the State with hardly a change in the economic mechanism itself.

Thus the expropriation of the bourgeoisie will be a much easier task than was the expropriation of the artisan by the bourgeois a few centuries ago. In the past it was a case of the few subjugating the many, but in the future the many will overwhelm the few—thanks to the law of concentration.

But what is to be the outcome of the Marxian programme (we cannot speak of its aim or ideals, for Marx scorned such terms)? The general opinion seems to be that it involves the abolition of private property, and that the opinion is not altogether without foundation may be seen from a perusal of the Manifesto, where we read that “the theory of the Communists may be summed up in the single sentence: Abolition of private property.”[989]

The Manifesto also explains in what sense we are to understand this. The private property which so much needs suppressing is not the right of the worker to the produce of his own toil, but the right of others to appropriate for themselves the produce of that labour. This is private property as they understand it. They think, however, it would be better to call it bourgeois property, and they feel quite confident that it is destined to disappear under a collectivistic régime. As to a man’s right to the product of his own labour, that surely existed formerly, before the peasant and the craftsman were overwhelmed by capitalism and replaced by the proletariat. Collectivism, far from destroying this kind of property, will rather revive it, not in the antiquated individualistic form of letting each man retain his own, which is obviously impossible under division of labour and production on a large scale, but of giving to every man a claim upon the equivalent of what he has produced.[990]

This twofold task can only be accomplished by undoing all that capitalism has done; by taking from the capitalists the instruments of production which they now possess and restoring them to the workmen, not individually—that would be impossible under modern conditions—but collectively. To adopt the formula which figures at the head of the party’s programme, this means the socialisation of the means of production—land, including surface and subsoil, factories and capital. The produce of everyone’s labour, after allowing for certain expenses which must be borne by the community as a whole, will be distributed according to each one’s labour. Surplus labour and surplus value will thus disappear simultaneously.

This expropriation of the capitalists will be the final stage, for, unlike the preceding movements, it will not be undertaken for the benefit of a single class—not even for the benefit of the workers. It will be for the interest of everybody alike, for the benefit of the nation as a whole. It will also be adequate to cope with the change which industry has recently undergone; in other words, both production and distribution will be on a collective basis.

II: THE MARXIAN SCHOOL

After this summary exposition of the principal theories of Karl Marx, we must now try to fix the general character of the school that bears his name[991] and to distinguish it from the other socialist schools that we have already studied.

(a) In the first place, it proudly claims for its teaching the title of scientific socialism, but much care must be exercised in interpreting the formula. No economist has ever shown such contempt or betrayed such passion in denouncing Phalanstères, Utopias, and communistic schemes of every kind. To think that the Marxians should add to the number of such fantastic dreams! What they claim to do, as M. Labriola points out (may the shades of Fourier forgive their presumption!), is to give a thoroughly scientific demonstration of the line of progress which has actually been followed by civilised societies.[992] Their one ambition is to gauge the significance of the unconscious evolution through which society has progressed and to point the goal towards which this cosmic process seems to be tending.

The result is that the Marxian school has a conception of natural laws which is much nearer the Classical standpoint than that of its predecessors. Of this there can be no doubt. The Marxian theories are derived directly from the theories of the leading economists of the early nineteenth century, especially from Ricardo’s. Marx is in the line of direct succession. Not only is this true of the labour-value theory and of his treatment of the conflict between profits and wages, but it also applies to his theory of rent and to a whole host of Ricardian doctrines that have been absorbed wholesale into the Marxian philosophy. And, paradoxical as it may sound, his abstract dogmatic method, his obscure style, which encourages disciples to retort that the critics have misunderstood his meaning and to give to many a passage quite an esoteric significance, is of the very essence of Ricardo.[993] Marx’s theories are, of course, supported by a wealth of illuminating facts, which unfortunately have been unduly simplified and drawn upon for purely imaginary conclusions. We have already had occasion to remark that Ricardo also owes a good deal more to the observation of facts than is generally believed, and his practice of postulating imaginary conditions is of course notorious. The impenitent Marxian who still wishes to defend some of the more untenable theories of Marx, such as his doctrine of labour-value, generally finds himself forced to admit that Marx had supposed (the use of suppositions is an unfailing proof of Ricardian influence) the existence of society wherein labour would be always uniform in quality.[994]

Marxism is simply a branch grafted on the Classical trunk. Astonished and indignant as the latter may well seem at the sight of the strange fruit which its teaching has borne, it cannot deny the fact that it has nourished it with its own life-blood. “Das Kapital,” as Labriola notes, “instead of being the prologue to the communal critique, is simply the epilogue of bourgeois economics.”[995]

Not only has Marxism always shown unfailing respect for political economy even when attacking individual economists, who are generally accused of inability to grasp the full significance of their own teaching, but, strangely enough, it betrays an equal affection for capitalism.[996] It has the greatest respect for the task which it has already accomplished, and feels infinitely grateful for the revolutionary part (such are the words used) which it has played in preparing the way for collectivism, which is almost imperceptibly usurping its place.[997]

But the Marxians have one serious quarrel with the older economists. It seemed to them that the earliest writers on political economy never realized the relatively transient nature of the social organism which they were studying. This was possibly because they were conservative by instinct and had the interest of the bourgeois at heart. They always taught, and they fully believed it, that private property and proletarianism were permanent features of the modern world, and that social organisation was for ever destined to remain upon a middle-class foundation. They were at least unwilling to recognize that this also, like the rest, was simply a historical category, and, like them, also was destined to vanish.[998]

(b) The Marxian school also differs from every previous socialist school in the comparative ease with which it has eschewed every consideration of justice and fraternity, which always played such an important rôle in French socialism. It is interested, not in the ideal, but in the actual, not in what ought to be, but in what is likely to be. “The theoretical conclusions of the communists are in no way based on ideas or principles that have been invented, or discovered by this or that would-be universal reformer. They merely express, in general terms, actual relations springing from an existing class struggle, from a historical movement going on under our very eyes.”[999]

To economic facts they attributed an importance altogether transcending their influence in the economic sphere. Their belief was that the several links which unify the many-sided activities of society, whether in politics, literature, art, morality, or religion, are ultimately referable to some economic fact or other. None of them but is based upon a purely economic consideration. Most important of all are the facts relating to production, especially to the mechanical instruments of production and their operation. If we take, for example, the production of bread and the successive stages through which the mechanical operation of grinding has passed from the hand-mill of antiquity to the water-mill of the Middle Ages and the steam-mill of to-day, we have a clue to the parallel development of society from the family to the capitalistic system and from the capitalistic to the trust, with their concomitants slavery, serfdom, and proletarianism. This affords a far better explanation of the facts than any bourgeois cant about “the growth of freedom” or humbug of that nature. These are the real foundations upon which every theory has to be reared. This materialistic conception of history,[1000] implying as it does a complete philosophy of history, is no longer confined to the purely economic domain.

Taken in the vulgar sense, it seems to involve the exclusion of every moral and every humanitarian consideration. As Schäffle put it in that oft-quoted phrase of his, it means reducing the social question to a “mere question of the belly.” The French socialists find the doctrine somewhat difficult to swallow, and they hardly display the same reverence for Marx as is shown in some other countries.[1001]

The orthodox Marxians immediately proceed to point out that such criticism is useless and shows a complete misunderstanding of Marx’s position. Materialism in the Marxian sense (and all his terms have a Marxian as well as the ordinary significance) does not exclude idealism, but it does exclude ideology, which is a different thing. No Marxian has ever advocated leaving mankind at the mercy of its economic environment; on the contrary, the Marxian builds his faith upon evolution, which implies man’s conscious, but not very successful, effort to improve his economic surroundings.[1002] The materialistic conception of history apparently is simply an attempt at a philosophy of human effort.[1003] Criticism of such elusive doctrines is not a very easy task.

(c) The socialism of Karl Marx is exclusively a working-class gospel. This is its distinctive trait and the source of the power it wields. To some extent it also explains its persistence. Other socialist systems have been discredited and are gone, but the Marxian gospel—no longer, of course, the sublime masterpiece it was when its author first expounded it—has lost none of its ancient vigour, despite the many transformations which it has undergone.

The socialists of the first half of the nineteenth century embraced all men without distinction, worker and bourgeois alike, within their broad humanitarian schemes. Owen, Fourier, and Saint-Simon reckoned upon the co-operation of the wealthy governing classes to found the society of the future. Marxism implies a totally different standpoint. There is to be no attempt at an understanding with the bourgeoisie, there must be no dallying with the unclean thing, and the prohibition is to apply not only to the capitalists, but also to the intellectuals[1004] and to the whole hierarchical superstructure that usually goes by the name of officialdom. Real socialism aims at nothing but the welfare of the working classes, which will only become possible when they attain to power.

It may, of course, be pointed out that socialism has always involved some such struggle between rich and poor, but it is equally correct to say that the battle has hitherto been waged over the question of just distribution. Beyond that there was no issue. But in the Marxian doctrine the antagonism is dignified with the name of a new scientific law, the “class war”—the worker against the capitalist, the poor versus the rich. The individuals are the same, but the casus belli is quite different. “Class war” is a phrase that has contributed not a little to the success of Marxism, and those who understand not a single word of the theory—and this applies to the vast majority of working men—will never forget the formula. It will always serve to keep the powder dry, at any rate.

“Class war” was not a new fact. “The history of all hitherto existing society is the history of class struggles.”[1005] But although it has always existed, it cannot continue for ever. And the great struggle that is now drawing nigh and which gives us such a tragic interest in the whole campaign will be the last. The collectivist régime will destroy the conditions that breed antagonism, and so will get rid of the classes themselves. Let us note in passing that this prophecy is not without a strong tinge of that Utopian optimism which the Marxians considered such a weakness in the earlier French socialism.

(d) A final distinction of Marxism is its purely revolutionary or catastrophic character, which is again unmistakably indicated by its adoption of “class war” as its watchword. But we have only to remind ourselves that the adjective “revolutionary” is applied by the Marxians to ordinary middle-class action to realize that the term is employed in a somewhat unusual fashion.

The revolution will result in the subjection of the wealthier classes by the working men, but all this will be accomplished, not by having recourse to the guillotine or by resorting to street rioting, but in a perfectly peaceful fashion. The means may be political and the method even within the four corners of the law, for the working classes may easily acquire a majority in Parliament, seeing that they already form the majority of the electors, especially in those countries that have adopted universal suffrage. The method may be simply that of economic associations of working men taking all economic services into their own hands.[1006]

The final catastrophe may come in yet another guise, and most Marxians seem to centre their hopes upon this last possibility. This would take the form of an economic crisis resulting in the complete overthrow of the whole capitalist régime—a kind of economic felo de se. We have already noted the important place which crises hold in the Marxian doctrines.

But if Marxism does not necessarily involve resort to violence, violent methods are not excluded. Indeed, it considers that some measure of struggle is inevitable before the old social forms can be delivered of the new—before the butterfly can issue from the chrysalis. “Force is the birth-pangs of society.”[1007]

This is not the place for false sentimentalism. Evil and suffering seem to be the indispensable agents of evolution. Had anyone been able to suppress slavery or serfdom or to prevent the expropriation of the worker by the capitalist, it would have merely meant drying up the springs of progress and more evil than good would probably have resulted.[1008] Every step forward involves certain unpleasant conditions, which must be faced if the higher forms of existence are ever to become a reality. And for this reason the reform of the bourgeois philanthropist and the preaching of social peace would be found to be harmful if they ever proved at all successful. There is no progress where there is no struggle. This disdainful indifference to the unavoidable suffering involved in transition is inherited from the Classical economists, and provides one more point of resemblance between the two doctrines. Almost identical terms were employed by the Classical economists when speaking of competition, of machinery, or of the absorption of the small industry by a greater one. In the opinion of the Marxians no attempt at improving matters is worthy the name of reform unless it also speeds the coming revolution. “But it can shorten and lessen the birth-pangs.”[1009]

III: THE MARXIAN CRISIS AND THE NEO-MARXIANS

To speak of Neo-Marxism, which is of quite recent growth, is to anticipate the chronological order somewhat, but some such procedure seems imperative in the interests of logical sequence. It has the further merit of dispensing with any attempt at criticism, a task which the Neo-Marxians[1010] have exclusively taken upon their own shoulders.

The two phases of the crisis must needs be kept distinct. The one, which is predominantly critical—or reformative, if that phrase be preferred—is best represented by M. Bernstein and his school. The other, which is more or less of an attempt to revive Marxism, has become current under the name of Syndicalism.

1. The Neo-Marxian Reformists

If we take Marx’s economic theories one by one as we have done, we shall find that there is nothing very striking in any of them, and that even the most important of them will not stand critical scrutiny. We might even go farther and say that this work of demolition is partly due to the posthumous labours of Marx himself. It was the publication of his later volumes that served to call attention to the serious contradiction between the later and the earlier sections of his work. Marxism itself, it seems, fell a prey to that law of self-destruction which threatened the overthrow of the whole capitalistic régime. Some of Marx’s disciples have, of course, tried to justify him by claiming that the work is not self-contradictory, but that the mere enumeration of the many conflicting aspects of capitalistic production strikes the mind as being contradictory.[1011] If this be so, then Kapital is just a new edition of Proudhon’s Contradictions économiques, which Marx had treated with such biting ridicule. And if the capitalist régime is really so full of contradictions that are inherent in its very nature, how difficult it must be to tell whether it will eventuate in collectivism or not and how very rash is scientific prophecy about annihilation and a final catastrophe![1012]

The fundamental theory of Marxism, that of labour-value, appears to be abandoned by the majority of modern Marxians, who are gradually veering round and adopting either the “final utility” or the “economic equilibrium” theory.[1013] Even Marx himself, despite his formal acceptance of the labour-value theory, is constantly obliged to admit—not explicitly, of course—that value depends upon demand and supply.[1014] Especially is this the case with profits, as we have already had occasion to remark. What appears as an indisputable axiom in the first volume is treated as a mere working hypothesis in the later ones.

But seeing that the other Marxian doctrines—the theories of surplus value and surplus labour, for example—are mere deductions from the principle of labour-value, it follows that the overthrow of the first principle must involve the ruin of the other two. If labour does not necessarily create value, or if value can be created without labour, then there is no proof that labour always begets a surplus value and that the capitalist’s profit must largely consist of unremunerated labour. The Neo-Marxians in reply point to the fact that surplus labour and surplus value do exist, else how could some individuals live without working? They must obviously be dependent upon the labour of others.[1015] All this is very true, but the fact had been announced by Sismondi long before, and the evil had been denounced both by him and the English critics. It is the old problem of unearned increment which formed the basis of Saint-Simon’s doctrine and Rodbertus’s theory, and which has been taken up quite recently by the English Fabians.

It is difficult to see what definite contribution Marx has made to the question, and the old problem as to whether workers are really exploited or not and whether the revenues obtained by the so-called idle classes correspond to any real additional value contributed by themselves still remains unsettled. We can only say that his historical exposition contains several very striking instances which seem to prove this exploitation, and that this is really the most solid part of his work.

Passing on to the law of concentration—the vertebral column of the Marxian doctrine—we shall find upon examination that it is in an equally piteous condition. The most unsparing critic in this case has been a socialist of the name of Bernstein, who has adduced a great number of facts[1016]—many of them already advanced by the older economists—which go to disprove the Marxian theory. It may be impossible to deny that the number of great industries is increasing rapidly and that their power is growing even more rapidly than their numbers, but it certainly does not seem as if the small proprietors and manufacturers were being ousted. Statistics, on the contrary, show that the number of small independent manufacturers (the artisans who, according to Marxian theory, had begun to disappear as far back as the fourteenth century) is actually increasing. Some new invention, such as photography, cycling, or the application of electricity to domestic work, or the revival of an industry such as horticulture, gives rise to a crowd of small industries and new manufactures.

But concentration as yet has scarcely made an appearance even in agriculture, and all the efforts of the Marxians to make this industry fit in with their theory have proved utterly useless. America as well as Europe has been laid under tribute with a view to supplying figures that would prove their contention. The statistics, however, are so confusing that directly opposite conclusions may be drawn from the same set of figures. The amount of support which they lend to the Marxian contention seems very slight indeed. On the whole they may be said to lend colour to the opposite view that the number of businesses is at least keeping pace with the growth of population. Were this to be definitely verified it would set a twofold check upon the Marxian theory. Not only would it be proved that petite culture is on the increase, but it would also be found that it is on the increase simply because it is more productive than “the great industry.”

But suppose for the sake of hypothesis that we accept the law of concentration as proved. That in itself is not enough to justify the Marxian doctrine. To do this statistics proving an increasing concentration of property in the hands of fewer individuals are also necessary; but in this case the testimony of the figures is all in the opposite direction. We must not be deceived by the appearance of that new species, the American millionaire. There are men who are richer than the richest who ever lived before, but there are also more men who are fairly rich than ever was the case before. The number of men who make a fortune—not a very great one, perhaps, but a moderate-sized or even a small one—is constantly growing. Joint stock companies, which according to the Marxian view afforded striking evidence of the correctness of his thesis, have, on the contrary, resulted in the distribution of property between a greater number of people, which proves that the concentration of industry and the centralisation of property are two different things. Or take the wonderful development of the co-operative movement and reflect upon the number of proletarians who have been transformed into small capitalists entirely through its instrumentality. To think that expropriation in the future will be easier because the number of expropriated will be few seems quite contrary to facts. It looks as if it were the masses, whose numbers are daily increasing, who will have to be expropriated, after all. More than half the French people at the present day possess property of one kind or another—movable property, land, or houses. And yet the collectivists never speak except with the greatest contempt of these rag-ends and tatters of property, fondly imagining that when the day of expropriation comes the expropriated will joyfully throw their rags aside in return for the blessings of social co-proprietorship. Apparently, however, the Marxians themselves no longer believe all this. Their language has changed completely, and just now they are very anxious to keep these rags and tatters in the hands of their rightful owners.

The changes introduced into the programme as a result of this have transformed its character almost completely. When it was first drawn up and issued as a part of the Communist Manifesto nearly fifty years ago everybody expected that the final disappearance of the small proprietor was a matter of only a few years, and that at the end of that time property of every description would be concentrated in the hands of a powerful few. This continuous expropriation would, of course, swell the ranks of the proletariat, so that compared with their numbers the proprietors would be a mere handful. This would make the final expropriation all the easier. With such disparity in numbers the issue was a foregone conclusion, no matter what method was employed, were it a revolution or merely a parliamentary vote.

Unfortunately for the execution of this programme, not only do we find the great capitalist still waxing strong, which is quite in accordance with the orthodox Marxian view, but there is no evidence that the small proprietor or manufacturer is on the wane. The Marxian can scarcely console himself with the thought that the revolution is gradually being accomplished without opposition when he sees hundreds of peasant proprietors, master craftsmen, and small shopkeepers on every side of him. Nor is there much chance of forcing this growing mass of people, which possibly includes the majority of the community even now, to change its views. We can hardly expect them to be very enthusiastic about a programme that involves their own extinction.

A distinction has obviously been drawn between two classes of proprietors. The socialisation of the means of production is only to apply to the case of wealthy landowners and manufacturers on a large scale—to those who employ salaried persons. But the property of the man who is supporting himself with the labour of his own hands will always be respected. The Marxians defend themselves from the reproach of self-contradiction and opportunism by stating that their action is strictly in accordance with the process of evolution. You begin by expropriating those industries that have arrived at the capitalistic and wage-earning stage. The criterion must be the presence or otherwise of a surplus value.

The conclusion is logical enough, but one would like to know what is going to become of the small independent proprietor. Will he be allowed to grow and develop alongside of the one great proprietor—the State? We can hardly imagine the two systems coexisting and hopelessly intermingled, as they would have to be, but still with freedom for the individual to choose between them. The collectivists have at any rate made no attempt to disguise the fact. They look upon it merely as a temporary concession to the cowardice of the small proprietor, who will presently willingly abandon his own miserable bit of property in order to share in the benefits of the new régime, or who will at any rate be put out of the running by its economic superiority. But since the prospects do not seem very attractive to those immediately concerned, it may be as well to dispense with any further consideration of the subject.

But there is another question. What has become of the class struggle in Neo-Marxism? The doctrine, though not altogether denied, is no longer presented as a deadly duel between two classes and only two, but as a kind of confused mêlée involving a great number of classes, which makes the issue of the conflict very uncertain. The picture of society as consisting merely of two superimposed layers is dismissed as being altogether too elementary. On the contrary, what we find is increasing differentiation even within the capitalist class itself. There is a perpetual conflict going on between borrower and lender, between manufacturer and merchant, between trader and landlord, the last of which struggles is especially prominent in the annals of politics. It has a long history, but in modern times it takes the form of a political battle between the Conservative and Liberal parties, between Whigs and Tories. These undercurrents complicate matters a great deal, and on occasion they have a way of dramatically merging with the main current, when both parties seek the help of the proletariat. In England, for example, the manufacturers succeeded in repealing the Corn Laws, which dealt a hard blow at the landed proprietors, who in turn passed laws regulating the conditions of labour in mines and factories. In both cases the working classes gained something—tertius gaudens! Then there are the struggles among the working classes themselves. Not to speak of the bitter animosity between the syndicats rouges and the syndicats jaunes, there is the rivalry between syndicalists and non-syndicalists, between skilled workmen and the unskilled. As Leroy-Beaulieu remarks, not only have we a fourth estate, but there are already signs of a fifth.

And what of the great catastrophe? The Neo-Marxians no longer believe in it. The economic crises which furnished the principal argument in support of the catastrophic theory are by no means as terrible as they were when Marx wrote. They are no longer regarded as of the nature of financial earthquakes, but much more nearly resemble the movements of the sea, whose ebb and flow may to some extent be calculated.

And the materialistic conception of history? “Every unbiased person must subscribe to that formula of Bernstein: The influence of technico-economic evolution upon the evolution of other social institutions is becoming less and less.”[1017] What a number of proofs of this we have! Marxism itself furnishes us with some. The principle of class war and the appeal to class prejudice owe much of the hold which they have to a feeling of antagonism against economic fatalism. In other words, they draw much of their strength from an appeal to a certain ideal. It is, of course, true that facts of very different character, economic, political, and moral, react upon one another, but can anyone say that some one of them determines all the others? Economists have been forced to recognise this, and the futile attempt to discover cause or effect has recently given place to a much more promising search for purely reciprocal relations.

It is by no means easy to determine how much Marxism there is in Neo-Marxism. “Is there anything beyond the formulæ which we have quoted, and which are becoming more disputable every day? Is it anything more than a philosophical theory which purports to explain the conflicts of society?”[1018] Bernstein tells us somewhere that socialism is just a movement, and that “the movement is everything, the end is nothing.”[1019]

2. The Neo-Marxian Syndicalists

Doctrinaire Marxism seemed languishing when a number of professed disciples found a fresh opportunity of reviving its ideals and of justifying its aims in a new movement of a pre-eminently working-class character known as Syndicalism.

Our concern is not with the reformist movement, occasionally spoken of as Trade Unionism, which constitutes the special province of M. Bernstein and the Neo-Marxians of his school,[1020] but rather with militant syndicalism, which as yet scarcely exists anywhere except in France and Italy, and which in France is represented by the Confédération générale du Travail.

What connection is there between Marxism and syndicalism? Of conscious, deliberate relationship there is scarcely any. The men who direct the Confédération have never read Marx, possibly, and would hardly concern themselves with the application of his doctrines. On the other hand, we have recently been told that the programme of the Confédération générale du Travail (C.G.T.) is in strict conformity with the Marxian doctrine; that since the reforming passion has so seized hold of the Neo-Marxians as to drive them to undermine the older doctrine altogether, it is necessary to turn to the new school to find the pure doctrine. They make the further claim of having aroused new enthusiasm for the Marxian doctrines.

(a) In the first place they have re-emphasised the essentially proletarian character of socialism. Not only is there to be no dealing with capitalist or entrepreneur, but no quarter is to be given to the intellectuals or the politicians. The professional labour syndicate is to exclude everyone who is not a workman, and it has no interest at heart other than that of the working class.[1021] Contempt for intellectualism is a feature of Marxism, and so is the emphasis laid upon the beauty and worth of labour, not of every kind of labour, but merely of that labour which moulds or transforms matter—that is, of purely manual labour.

No institution seems better fitted to develop class feeling—that is, the sense of community of interests binding all the proletarians together against the owners—than the syndicat. Organisation is necessary if social consciousness is to develop. This is as true in the economic as it is in the biological sphere, and this is why the syndicat is just what was needed to transform the old socialistic conception into real socialism. Marx could not possibly have foreseen the vast potentialities of the syndicat. If he had only known it how his heart would have rejoiced! The Neo-Marxians can never speak of syndicalism without going into raptures. No other new source of energy seems left in this tottering middle-class system. But syndicalism has within it the promise of a new society, of a new philosophy, even of a new code of morality which we may call producers’ ethics, which will have its roots in professional honour, in the joy that comes from the accomplishment of some piece of work, and in their faith in progress.[1022]

(b) New stress has been laid upon the philosophy of class war, and a fresh appeal has been made for putting it into practice. The only real, sensible kind of revolution is that which must sooner or later take place between capitalists on the one hand and wage-earners on the other, and this kind of revolution can only be effected by appealing to class feeling and by resorting to every instrument of conflict, strikes, open violence, etc. All attempts at establishing an understanding with the bourgeois class, every appeal for State intervention or for concessions, must be abandoned. Explicit trust must be placed in the method of direct action.[1023]

Strife is to be the keynote of the future, and in the pending struggle every trace of bourgeois legalism will be ruthlessly swept aside. The fighting spirit must be kept up, not with a view to the intensification of class hatred, but simply in order to hand on the torch.

The struggle has hitherto been the one concern of the revolutionary syndicalists. Unlike the socialists, they have never paid any attention either to labour or to social organisation. All this has, fortunately, been done by the capitalist, and all that is required now is simply to remove him.[1024]

(c) Nor has the catastrophic thesis been forgotten. This time it has been revived, not in the form of a financial crisis, but in the guise of a general strike. What will all the bourgeois generalship, all the artillery of the middle class, avail in a struggle of that kind? What is to be done when the worker just folds his arms and instantly brings all social life to a standstill, thus proving that labour is really the creator of all wealth? And although one may be very sceptical as to the possibility of a general strike—the scepticism is one that is fully shared in by the syndicalists themselves—still this “myth,” as Sorel calls it, must give a very powerful stimulus to action, just as the Christians of the early centuries displayed wonderful activity in view of their expectation of the second coming of Christ.

The word “myth” has been a great success, not so much among working men, to whom it means nothing at all, but among the intellectuals. It is very amusing to think that this exclusively working-class socialism, which is not merely anti-capitalist, but also violently anti-intellectual, and which is to “treat the advances of the bourgeoisie with undisguised brutality,” is the work of a small group of “intellectuals” possessed of remarkable subtlety, and even claiming kinship with Bergsonian philosophy.[1025] A myth perhaps! But what difference is there between being under the dominion of a myth and following in the wake of a star such as guided the wise men of the East, or being led by a pillar of flame or a cloud such as went before the Israelites on their pilgrimage towards the Promised Land?[1026] Such faith and hope borrowed from the armoury of the triumphant Church of the first century, such a conception of progress which swells its followers with a generous, almost heroic passion, puts us out of touch with the historic materialism so dear to the heart of Marx and brings us into line with the earlier Utopian socialists whom he so genuinely despised. Sorel recognises this. “You rarely meet with a pure myth,” says he, “without some admixture of Utopianism.”