Contemporary Socialism

by John Rae

His charge against the present system, however, is more than that it is anarchic; he maintains it to be unjust—organically and hopelessly unjust. The labourer's back is the green table on which the whole game is played, and all losses are in the end sustained by him. A slightly unfavourable turn of things sends him at once into want, while even a considerably favourable one brings him no corresponding advantage, for, according to all economists, wages are always the last thing to rise with a reviving trade. The present system is, in fact, incapable of doing the labourer justice, and would not suffer employers to do so even if they wished. Injustice is bred in its very bone and blood. In this contention Lassalle builds his whole argument on premises drawn from the accepted economic authorities. Socialist economics, he says, is nothing but a battle against Ricardo, whom he describes as the last and most representative development of bourgeois economics; and it fights the battle with Ricardo's own weapons, and on Ricardo's own ground. There are two principles in particular of which it makes much use—Ricardo's law of value and Ricardo's law of natural or necessary wages.

Ricardo's law of value is that the value of a commodity, or the quantity of any other commodity for which it will exchange, depends on the relative quantity of labour which is necessary for its production, and not on the greater or less compensation which is paid for that labour. Value is thus resolved into so much labour, or what is the same thing, so much time consumed in labour, mental and manual, upon the commodity. This reduction of value to quantity of time is reckoned by Lassalle the one great merit of Ricardo and the English economists. Ricardo, however, strictly limited his law to commodities that admitted of indefinite multiplication, the value of other commodities being, he held, regulated by their scarcity; and he confined it to the normal value of the commodities only, the fluctuations of their market-price depending on other considerations. But Lassalle seeks to make it cover these cases also by means of a distinction he draws between individual time of labour, and socially necessary time of labour. According to this distinction, what constitutes the value of a product is not the time actually taken or required by the person who made it; for he may have been indolent or slow, or may not have used the means and appliances which the age he lived in afforded him. What constitutes value is the average time of labour socially necessary, the time required by labour of average efficiency using the methods the age supplies. If the commodity can be produced in an hour, an hour's work will be its value, though you have taken ten to produce it by slower methods. So far there is nothing very remarkable, but Lassalle goes on to argue that you may waste your time not merely by using methods that society has superseded, but by producing commodities that society no longer wants. You go on making shoe-buckles after they have gone out of fashion, and you can get nothing for them. They have no value. And why? Because, while they indeed represent labour, they do not represent socially necessary labour. So again with over-production: you may produce a greater amount of a commodity than society requires at the time. The value of the commodity falls. Why? Because while it has cost as much actual labour as before, it has not cost so much socially necessary labour. In fact, the labour it has taken has been socially unnecessary, for there was no demand for the product. On the other hand—and we are entitled to make this expansion of Lassalle's argument—take the case of under-production, of deficient supply. Prices rise. What is usually known as a scarcity value is conferred on commodities. But this scarcity value Lassalle converts into a labour value; the commodity is produced by the same individual labour, but the labour is more socially necessary. In plain English, there is more demand for the product.

Lassalle's distinction is thus an ingenious invention for expressing rarity value in terms of labour value. It has no theoretical importance, but is of some practical service in the socialistic argument. That argument is not that value is constituted by labour pure and simple, but by labour modified by certain general conditions of society; only it holds that these conditions—conditions of productivity, of rarity, of demand—have been created by nobody in particular, that, therefore, nobody in particular should profit by them, and that so far as the problem of the distribution of value goes, the one factor in the constitution of value which needs to be taken into account in settling that problem, is labour. All value comes from labour, represents so much time of labour, is, in fact, so much "labour-jelly," so much preserved labour.

While one accepted economic law thus declares that all value is conferred by the labourer, and is simply his sweat, brain, and sinew incorporated in the product, another economic law declares that he gains no advantage from the productivity of his own work, and that whatever value he produces, he earns only the same wages—bare customary subsistence. In that lies the alleged injustice of the present system. Von Thuenen, the famous Feudalist landowner and economic experimentalist, said, many years ago, that when the modern working class once began to ask the question, What is natural wages? a revolution might arise which would reduce Europe to barbarism. This is the question Lassalle asked, and by which mainly he stirred up socialism. The effect of the previous argument was to raise the question, What is the labourer entitled to get? and to suggest the answer, he is entitled to get everything. The next question is, What, then, does the labourer actually get? and the answer is, that on the economists' own showing, he gets just enough to keep soul and body together, and on the present system can never get any more. Ricardo, in common with other economists, had taught that the value of labour, like the value of everything else, was determined by the cost of its production, and that the cost of the production of labour meant the cost of the labourer's subsistence according to the standard of living customary among his class at the time. Wages might rise for a season above this level, or fall for a season below it, but they always tended to return to it again, and would not permanently settle anywhere else. When they rose higher, the labouring class were encouraged by their increased prosperity to marry, and eventually their numbers were thus multiplied to such a degree that by the force of ordinary competition the rate of wages was brought down again; when they fell lower, marriages diminished and mortality increased among the working class, and the result was such a reduction of their numbers as to raise the rate of wages again to its old level. This is the economic law of natural or necessary wages—"the iron and cruel law" which Lassalle declared absolutely precluded the wage-labourers—i.e., 96 per cent. of the population—from all possibility of ever improving their condition or benefiting in the least from the growing productivity of their own work. This law converted industrial freedom into an aggravated slavery. The labourer was unmanned, taken out of a relationship which, with all its faults, was still a human and personal one, put under an impersonal and remorseless economic law, sent like a commodity to be bought in the cheapest market, and there dispossessed by main force of competition of the value of the property which his own hands had made. Das Eigenthum ist Fremdthum geworden.

It is no wonder that teaching like this should move the minds of working men to an intolerable sense of despair and wrong. Nor was there any possibility of hope except in a revolution. For the injustice complained of lay in the essence of the existing economic system, and could not be removed, except with the complete abolition of the system. The only solution of the question, therefore, was a socialistic reconstruction which should make the instruments of production collective property, and subordinate capital to labour, but such a solution would of course be the work of generations, and meanwhile, the easiest method of transition from the old order of things to the new, lay in establishing productive associations of working men on State credit. These would form the living seed-corn of the new era. This was just Louis Blanc's scheme, with two differences—viz., that the associations were to be formed gradually, and that they were to be formed voluntarily. The State was not asked to introduce a new organization of labour by force all at once, but merely to lend capital at interest to one sound and likely association after another, as they successively claimed its aid. This loan was not to be gratuitous, as the French socialists used to demand in 1848, and since there would be eventually only one association of the same trade in each town, and since, besides, they would also establish a system of mutual assurance against loss, trade by trade, the State, it was urged, would really incur no risk. Lassalle, speaking of State help, said he did not want a hand from the State, but only a little finger, and he actually sought, in the first instance at least, no more than Mr. Gladstone gave in the Irish Land Act. The scheme was mainly urged, of course, in the interests of a sounder distribution of wealth; but Lassalle contended that it would also increase production; and it is important to remember that he says it would not otherwise be economically justifiable, because "an increase of production is an indispensable condition of every improvement of our social state." This increase would be effected by a saving of cost, in abolishing local competition, doing away with middle-men and private capitalists, and adapting production better to needs. The business books of the association would form the basis of a sound and trustworthy system of commercial statistics, so much required for the purpose of avoiding over-production. The change would, he thought, also introduce favourable alterations in consumption, and in the direction of production; inasmuch as the taste of the working class for the substantial and the beautiful, would more and more supplant the taste of the bourgeoisie for the cheap and nasty.

After the death of Lassalle, the movement he began departed somewhat from the lines on which he launched it. 1st, His plan of replacing capitalistic industry by productive associations of labourers, founded on State credit, had always seemed a mockery, or, at least, a makeshift, to many of the socialists of Germany. It would not destroy competition, for one association would still of necessity compete with another; and it would not secure to every man the right to the full product of his labour, for the members of the stronger productive associations would be able to exploit the members of the weaker as the ordinary result of their inter-competition. In other words, Lassalle's plan would not in their eyes realize the socialist claim, as that claim had been taught to them by Marx. Their claim could only be realized by the conversion of all industrial instruments into public property, and the systematic conduct of all industry by the public authority; and why not aim straight for that result, they asked, instead of first bringing in a merely transitional period of productive associations, which would, on Lassalle's own calculations, take two hundred years to create, and which might not prove transitional to the socialist state after all? Rodbertus even had gone against Lassalle on this point, because he wanted to see individual property converted into national property, and thought converting it first into joint stock property was really to prevent rather than promote the main end he had in view.

Then, 2nd, Lassalle was a national, not an international socialist. He held that every country should solve its own social question for itself, and that the working-class movement was not, and should not be made, cosmopolitan. He was even—as Prince Bismarck said in Parliament, when taxed with having personal relations with him—patriotic. At least he was an intense believer in Prussia; less, however, because he was a Prussian than because Prussia was a strong State, and because he thought that strong States alone could do the world's work in Germany or elsewhere. By nationality in itself he set but little store; a nationality had a right to separate existence if it could assert it, but if it were weak and struggling, its only duty was to submit with thankfulness to annexation by a stronger power. He wished his followers, therefore, to keep aloof from the doings of other nations, and to concentrate their whole exertions upon victory at the elections in their own country and the gradual development of productive associations on national loans. This restriction of the range of the movement had from the first dissatisfied some of its adherents, especially a certain active section who hated Prussia as much as Lassalle believed in her, and after the influence of the International began to make itself felt upon the agitation in Germany, this difference of opinion gathered gradually to a head. In 1868 a motion was brought before the general meeting of the League in favour of establishing relations with the International and accepting its programme. The chief promoters of this motion were the two present leaders of the Social Democratic party in the Reichstag, Liebknecht and Bebel, and it was strongly opposed by the president of the League, Dr. von Schweitzer, an advocate in Frankfort, and a strong champion of Prussia, who was elected to the presidency in 1866, just at the time the extension of the suffrage gave a fresh impetus to the movement, and whose energy and gifts of management contributed greatly to the development of the organization. The motion was carried by a substantial majority, but before next year Von Schweitzer had succeeded in turning the tables on his opponents, and at the general meeting in 1869, Liebknecht and Bebel were expelled from the League, as traitors to the labourers' cause. After their expulsion they called together in the same year a congress of working men at Eisenach, which was attended mainly by delegates from Austria and South Germany, and founded an independent organization on the principles of the International, and under the name of the Social Democratic Labour Party of Germany. The two organizations existed side by side till 1874, when a union was effected between them at a general meeting at Gotha, and they became henceforth the Socialist Labour Party. This was the burial of the national socialism of Lassalle, for though in deference to his followers, the new programme promised in the meantime to work within national limits, it expressly recognised that the labourers' movement was international, and that the great aim to be striven after was a state of society in which every man should be obliged to share in the general labour according to his powers, and have a right to receive from the aggregate product of labour according to what was termed his rational requirements. Some "orthodox Lassalleans," as they called themselves, held aloof from this compromise, but they are too few to be of any importance. They still remain apart from the main body of German socialism, and live in such good odour with the Government, whether on account of their unimportance or of their supposed loyalty, that they were never molested by any application of the Socialist Laws which were enforced for twelve years strenuously against all other socialists.

Among the causes which brought the others to so much unanimity was undoubtedly the establishment of the German Empire in 1871, which was viewed with universal aversion by socialists of every shade. On the outbreak of the war, Schweitzer and the members of the original League gave their sympathies warmly to the arms of their country, and the Social Democratic party was nearly equally divided on the subject; but after the foundation of the French Republic, they all with one consent declared that the war ought now to cease, and the socialist deputies, no matter which organization they belonged to, voted without exception against granting supplies for its continuance. They were likewise opposed to the recognition of the title of Emperor and to the constitution of the Empire, and indeed as republicans they could not be anything else. From a recollection mainly of these votes Prince Bismarck considered the movement to be unpatriotic and hostile to the Empire, and accordingly suppressed its propaganda in 1878, when its growth seemed likely to prove a serious danger to an Empire whose stability was still far from being assured by any experience of its advantages. The socialists retorted upon this policy at their congress at Wyden, Switzerland, in 1880, by striking out of their programme the limitation of proceeding by legal means, on the ground that the action of the Government having made legal means impracticable, no resource was left but to meet force by force. They thus threw aside the last shred of the practical policy of Lassalle, and stood out thenceforth as a party of international revolution.

The movement could, however, hardly help becoming international; not, as some allege, because this is a peculiarity of revolutionary parties; on the contrary, other parties may also exhibit it. What, for example, was the Holy Alliance but an international league of the monarchical and aristocratic parties against the advance of popular rights? Nor is it a peculiarity of the present time only. No doubt the increased inter-communication and inter-dependence between countries now facilitates its development. There are no longer nations in Europe, said Heine, but only parties. But in reality it has always been nearly as much so as now. Any party founded on a definite general principle or interest may in any age become international, and even what may seem unpatriotic. The Protestants of France in the 16th century sought help from England, and the Jacobites of England in the 18th sought help from France; just as the German socialists of 1870 sided with the French after Sedan, and the French communists of 1871 preferred to see their country occupied by the Germans rather than governed by the "Versaillais." In all these cases the party principles were naturally international, and the party bias overcame the patriotic.