Socialism: A Summary and Interpretation of Socialist Principles

by John Spargo

II

For the moment, we are not concerned with the prediction that Socialism must follow the full development of capitalism. The important point for our present study is the predicted growth of monopoly out of competition, and the manner in which that prediction has been realized. Concerning the manner and extent of the fulfillment of this prediction, there have been many keen controversies, both within and without the ranks of the followers of Marx. While Marx and Engels are properly regarded as the first scientific Socialists, having been the first to postulate Socialism as the outcome of evolution, and to explore the laws of that evolution, they were not wholly free from the failings of the Utopists. It would be unreasonable to expect them to be absolutely free from the spirit of their age and their associates. There is, doubtless, something Utopian in the very mechanical conception of capitalist concentration which Marx held; the process is too simple and sweeping, the revolution too imminent. Still, by followers and critics alike, it is generally conceded that the control of the means of production is being concentrated into the hands of small and ever smaller groups of capitalists. In recent years the increase in the number of industrial establishments has not kept pace with the increase in the number of workers employed, the increase of capital, or the value of the products manufactured. Not only do we find small groups of men controlling certain industries, but a selective process is clearly observable, giving to the same groups of men control of various industries otherwise utterly unrelated.

In the early stages of the movement toward concentration and trustification, it was possible to classify the leading capitalists according to the industries with which they were identified. One set of capitalists, "Oil Kings," controlled the oil industry; another set, "Steel Kings," controlled the iron and steel industry; another set, "Coal Barons," controlled the coal industry, and so on throughout the industrial and commercial life of the nation. To-day all this has been changed. An examination of the "Directory of Directors" shows that the same men control varied enterprises. The Oil King is at the same time a Steel King, a Coal Baron, a Railway Magnate, and so on. The men who comprise the Standard Oil group, for instance, are found to control hundreds of other companies. They include in the scope of their directorate, banking, insurance, milling, real estate, railroad and steamship lines, gas companies, sugar, coffee, cotton, and tobacco companies, and a heterogeneous host of other concerns. Not only so, but these same men are large holders of investments in all the great European countries, as well as India, Australia, Africa, Asia, and the South American countries, while foreign capitalists similarly, but to a less extent, hold large investments in American companies. Thus, the concentration of industrial control, through its finance, has become interindustrial and is rapidly becoming international. The predictions of Marx are being fulfilled, even though not in the precise manner anticipated by him.

III

During recent years there have been many criticisms of the Marxian theory, aiming to show that this concentration has been, and is, much more apparent than real. Some of the most important of these criticisms have come from within the ranks of the Socialist movement itself, and have been widely exploited as portending the disintegration of the Socialist movement. Inter alia, it may be remarked here that a certain fretfulness of temper characterizes most of the critics of Socialism. Strict adherence to the letter of Marx is pronounced as a sign of intellectual bondage of the movement and its leaders to the "Marxian fetish," and, on the other hand, every recognition of the human fallibility of Marx by a Socialist thinker is hailed as a sure portent of a split in the movement. Yet the most serious criticisms of Marx have come from the ranks of his followers—perhaps only another sign of the intellectual bankruptcy of the academic opposition to Socialism.

Of course, Marx was human and fallible. If "Capital" had never been written, there would still have been a Socialist movement, and if it could be destroyed by criticism, the Socialist movement would remain. Socialism is the product of economic conditions, not of a theory or a book. "Capital" is the intellectual explanation of the genesis of Socialism, and neither its cause nor an argument for it by which it must be judged. Hence the futility of such missions as that undertaken by Mr. W. H. Mallock, for example, based upon the assumption that attacks upon the text of Marx will serve to destroy or seriously hinder the living movement. Like a prophet's rebuke to these critics, as well as to those within the ranks of the Socialist movement who would make of the words of Marx and Engels fetters to bind the movement to a dogma, come the words of Engels, published recently, letters in which he writes vigorously to his friend Sorge concerning the working-class movement in England and America. Of his compatriots, the handful of German Socialist exiles in America, who sought to make the American workers swallow a mass of ill-digested Marxian theory, he writes, "The Germans have never understood how to apply themselves from their theory to the lever which could set the American masses in motion; to a great extent they do not understand the theory itself and treat it in a doctrinaire and dogmatic fashion.... It is a credo to them, not a guide to action." And again, "Our theory is not a dogma, but the exposition of a process of evolution, and that process involves several successive phases." Of the English movement he writes, "And here an instinctive Socialism is more and more taking possession of the masses which, fortunately, is opposed to all distinct formulation according to the dogmas of one or the other so-called organizations," and again, he condemns "the bringing down of the Marxian theory of development to a rigid orthodoxy."[96] The critics who hope to destroy the Socialist movement of to-day by stringing together mistaken predictions of Marx and Engels, or who think that Socialism is losing its grip because it is adjusting its expressions to the changed conditions which the progress of fifty years has brought about, utterly mistake the character of the movement. In its abandonment of the errors of Marx it is most truly Marxian—because it is expressing life instead of repeating dogma.

Doubtless Marx anticipated a much more complete concentration of capital and industry than has yet taken place; doubtless, too, he underrated the powers of endurance of some petty industries, and saw the breakdown of capitalism in a cataclysm, whereas modern Socialists see its merging into a form of socialization. But, when all this is admitted, it cannot be fairly said that the sum of criticism has seriously affected the general Marxian theory, as apart from its particular exposition by Marx himself. So far as the criticism has touched the subject of capitalist concentration, it has been pitifully weak, and the furore it has created seems almost pathetic. The main results of this criticism may be briefly summarized as follows: First, in industry, the persistence, and, in some cases, even increase, of petty industries; second, in agriculture, the failure of large-scale farming, and the decrease of the average farm acreage; third, in retail trade, the persistence of the small stores, despite the growth in size and number of the great department stores; fourth, the fact that concentration of industry does not imply a like concentration of wealth, the number of shareholders in a great industrial combination being frequently greater than the number of owners in the units of industry prior to the combination. At first sight, and stated in this manner, it would seem as if these conclusions, if justified by the facts, involved a serious and far-reaching criticism of the Socialist theory of a universal tendency toward the concentration of industry and commerce into units of ever increasing magnitude.

But upon closer examination, these conclusions, their accuracy admitted, are seen to involve no very damaging criticism of the theory. To the superficial observer, the mere increase in the number of industrial establishments seems a much more important matter than to the careful student, who is not easily deceived by appearances. The student sees that while some petty industries undoubtedly do increase in number, the increase of large industries employing many more workers and much larger capitals is vastly greater. Furthermore, he sees what the superficial observer constantly overlooks, namely, that these petty industries are, for the most part, unstable and transient, being continually absorbed by the larger industrial combinations or crushed out of existence, as soon as they have obtained sufficient vitality and strength to make them worthy of notice, either as tributaries to be desired or potential competitors to be feared. Petty industries in a very large number of cases represent a stage in social descent, the wreckage of larger industries whose owners are economically as dependent as the ordinary wage-workers, or even poorer and more to be pitied. Where, on the contrary, it is a stage in social ascent, the petty industry is, paradoxical as the idea may appear, frequently part of the process of industrial concentration. By independent gleaning, it endeavors to find sufficient business to maintain its existence. If it fails in this, its owner falls back to the proletarian level from which, in most instances, he arose. If it succeeds only to a degree sufficient to maintain its owner at or near the average wage-earner's level of comfort, it may pass unnoticed and unmolested. If, on the other hand, it gleans sufficient business to make it desirable as a tributary, or potentially dangerous as a competitor, the petty business is pounced upon by its mightier rival and either absorbed or crushed, according to the temper or need of the latter. Critics of the Marxian theory have for the most part completely failed to recognize this significant aspect of the subject, and attached far too much importance to the continuance of petty industries.

IV

What is true of petty industry is true in even greater measure of retail trade. Nothing could well be further from the truth than the hasty generalization of some critics, that an increase in the number of retail business establishments invalidates the theory of a progressive concentration of capital. In the first place, many of these establishments have no independence whatsoever, but are merely agencies of larger enterprises. Mr. Macrosty has shown that in London the cheap restaurants are in the hands of four or five firms, and this is a branch of business which, because it calls for relatively small capital, shows in a marked manner the increase of establishments. Much the same conditions exist in connection with the trade in milk and bread.[97] Similar conditions prevail in almost all the large cities of this country. Single companies are known to control hundreds of saloons, restaurants, cigar stores, shoe stores, bake shops, coal depots, and the like. A multitude of other businesses are subject to this rule, and it is doubtful whether, after all, there has been the real increase of individual ownership which Mr. Ghent concedes.[98] However that may be, it is certain that a very large number of the business establishments which figure as statistical units in the argument against the Socialist theory of the concentration of capital might very properly be regarded as so many evidences in its favor.