Freeland: A Social Anticipation

by Theodor Hertzka

The actual social arrangements are the necessary result of the human struggle for existence when the productiveness of labour was such that a single worker could produce, by the labour of his own hands, more than was indispensable to the sustenance of his animal nature, but not enough to enable him to satisfy his higher needs. With only this moderate degree of productiveness of labour, the exploitage of man by man was the only way by which it was possible to ensure to individuals wealth and leisure, those fundamental essentials to higher culture. But as soon as the productiveness of labour reaches the point at which it is sufficient to satisfy also the highest requirements of every worker, the exploitage of man by man not only ceases to be a necessity of civilisation, but becomes an obstacle to further progress by hindering men from making full use of the industrial capacity to which they have attained.

For, as under the domination of exploitage the masses have no right to more of what they produce than is necessary for their bare subsistence, demand is cramped by limitations which are quite independent of the possible amount of production. Things for which there is no demand are valueless, and therefore will not be produced; consequently, under the exploiting system, society does not produce that amount of wealth which the progress of science and technical art has made possible, but only that infinitely smaller amount which suffices for the bare subsistence of the masses and the luxury of the few. Society wishes to employ the whole of the surplus of the productive power in the creation of instruments of labour--that is, it wishes to convert it into capital; but this is impossible, since the quantity of utilisable capital is strictly dependent upon the quantity of commodities to be produced by the aid of this capital. The utilisation of all the proceeds of such highly productive labour is therefore dependent upon the creation of a new social order which shall guarantee to every worker the enjoyment of the full proceeds of his own work. And since impartial investigation further shows that this new order is not merely indispensable to further progress in civilisation, but is also thoroughly in harmony with the natural and acquired characteristics of human society, and consequently is met by no inherent and permanent obstacle, it is evident that in the natural process of human evolution this new order must necessarily come into being.

When I placed this conclusion before the public four years ago, I assumed, as something self-evident, that I was announcing a doctrine which was not by any means an isolated novelty; and I distinctly said so in the preface to the 'Laws of Social Evolution.' I fully understood that there must be some connecting bridge between the so-called classical economics and the newly discovered truths; and I was convinced that in a not distant future either others or myself would discover this bridge. But in expounding the consequences springing from the above-mentioned general principles, I at first allowed an error to escape my notice. That ground-rent and undertaker's profit--that is, the payment which the landowner demands for the use of his land, and the claim of the so-called work-giver to the produce of the worker's labour--are incompatible with the claim of the worker to the produce of his own labour, and that consequently in the course of social evolution ground-rent and undertaker's profit must become obsolete and must be given up--this I perceived; but with respect to the interest of capital I adhered to the classical-orthodox view that this was a postulate of progress which would survive all the phases of evolution.

As palliation of my error I may mention that it was the opponents of capital themselves--and Marx in particular--who confirmed me in it, or, more correctly, who prevented me from distinctly perceiving the basis upon which interest essentially rests. To tear oneself away from long-cherished views is in itself extremely difficult; and when, moreover, the men who attack the old views base their attack point after point upon error, it becomes only too easy to mistake the weakness of the attack for impregnability in the thing attacked. Thus it happened with me. Because I saw that what had been hitherto advanced against capital and interest was altogether untenable, I felt myself absolved from the task of again and independently inquiring whether there were no better, no really valid, arguments against the absolute and permanent necessity of interest. Thus, though interest is, in reality, as little compatible with associated labour carried on upon the principle of perfect economic justice as are ground-rent and the undertaker's profit, I was prevented by this fundamental error from arriving at satisfactory views concerning the constitution and character of the future forms of organisation based upon the principle of free organisation. That and wherefore economic freedom and justice must eventually be practically realised, I had shown; on the other hand, how this phase of evolution was to be brought about I was not able to make fully clear. Yet I did not ascribe this inability to any error of mine in thinking the subject out, but believed it to reside in the nature of the subject itself. I reasoned that institutions the practical shaping of which belongs to the future could not be known in detail before they were evolved. Just as those former generations, which knew nothing of the modern joint-stock company, could not possibly form an exact and perfect idea of the nature and working of this institution even if they had conceived the principle upon which it is based, so I held it to be impossible to-day to possess a clear and connected idea of those future economic forms which cannot be evolved until the principle of the free association of labour has found its practical realisation.

I was slow in discovering the above-mentioned connection of my doctrine of social evolution with the orthodox system of economy. The most clear-sighted minds of three centuries have been at work upon that system; and if a new doctrine is to win acceptance, it is absolutely necessary that its propounder should not merely refute the old doctrine and expose its errors, but should trace back and lay open to its remotest source the particular process of thought which led these heroes of our science into their errors. It is not enough to show that and wherefore their theses were false; it must also be made clear how and wherefore those thinkers arrived at their false theses, what it was that forced them--despite all their sagacity--to hold such theses as correct though they are simply absurd when viewed in the light of truth. I pondered in vain over this enigma, until suddenly, like a ray of sunlight, there shot into the darkness of my doubt the discovery that in its essence my work was nothing but the necessary outcome of what others had achieved--that my theory was in no way out of harmony with the numerous theories of my predecessors, but that rather, when thoroughly understood, it was the very truth after which all the other economists had been searching, and upon the track of which--and this I held to be decisive--I had been thrown, not by my own sagacity, but solely by the mental labours of my great predecessors. In other words, the solution of the social problem offered by me is the very solution of the economic problem which the science of political economy has been incessantly seeking from its first rise down to the present day.

But, I hear it asked, does political economy possess such a problem--one whose solution it has merely attempted but not arrived at? For it is remarkable that in our science the widest diversity of opinions co-exists with the most dogmatic orthodoxy. Very few draw from the existence of the numberless antagonistic opinions the self-evident conclusion that those opinions are erroneous, or at least unproved; and none are willing to admit that--like their opponents--they are merely seeking the truth, and are not in possession of it. So prevalent is this tenacity of opinion which puts faith in the place of knowledge that the fact that every science owes its origin to a problem is altogether forgotten. This problem may afterwards find its solution, and therewith the science will have achieved its purpose; but without a problem there is no investigation--consequently, though there may be knowledge, there will be no science. Clear and simple cognisances do not stimulate the human mind to that painstaking, comprehensive effort which is the necessary antecedent of science; in brief, a science can arise only when things are under consideration which are not intelligible directly and without profound reflection--things, therefore, which contain a problem.

Thus, political economy must have had its problem, its enigma, out of the attempts to solve which it had its rise. This problem is nothing else but the question 'Why do we not become richer in proportion to our increasing capacity of producing wealth?' To this question a satisfactory answer can no more be given to-day than could be given three centuries ago--at the time, that is, when the problem first arose in view, not of a previously existing phenomenon to which the human mind had then had its attention drawn for the first time, but of a phenomenon which was then making its first appearance.

With unimportant and transient exceptions (which, it may be incidentally remarked, are easily explicable from what follows) antiquity and the Middle Ages had no political economy. This was not because the men of those times were not sharp-sighted enough to discover the sources of wealth, but because to them there was nothing enigmatical about those sources of wealth. The nations became richer the more progress they made in the art of producing; and this was so self-evident and clear that, very rightly, no one thought it necessary to waste words about it. It was not until the end of the sixteenth and the beginning of the seventeenth centuries of our era, therefore scarcely three hundred years ago, that political economy as a distinct science arose.

It is impossible for the unprejudiced eye to escape seeing what the first political economists sought for--what the problem was with which they busied themselves. They stood face to face with the enigmatical fact that increasing capacity of production is not necessarily accompanied or followed by an increase of wealth; and they sought to explain this fact. Why this remarkable fact then first made its appearance will be clearly seen from what follows; it is unquestionable that it then appeared, for the whole system of these first political economists, the so-called Mercantilists, had no other aim than to demonstrate that the increase of wealth depends not, as everybody had until then very naturally believed, upon increasing productiveness of labour, but upon something else, that something else being, in the opinion of the Mercantilists, money. Notwithstanding what may be called the tangible absurdity of this doctrine, it remained unquestioned for generations; nay, to be candid, most men still cling to it--a fact which would be inconceivable did not the doctrine offer a very simple and plausible explanation of the enigmatical phenomenon that increasing capacity of production does not necessarily bring with it a corresponding increase of wealth.

But it is equally impossible for the inquiring human mind to remain permanently blind to the fact that money and wealth are two very different things, and that therefore some other solution must be looked for of the problem, the existence of which is not to be denied. The Physiocrats found this second explanation in the assertion that the soil was the source and origin of all wealth, whilst human labour, however highly developed it might be, could add nothing to what was drawn from the soil, because labour itself consumed what it produced. This may look like the first application of the subsequently discovered natural law of the conservation of force; and--notwithstanding its obvious absurdity--it was seriously believed in because it professed to explain what seemed otherwise inexplicable. Between the labourer's means of subsistence, the amount of labour employed, and the product, there is by no means that quantitative relation which is to be found in the conversion of one physical force into another. Human labour produces more or less in proportion as it is better or worse applied; for production does not consist in converting labour into things that have a value, but in using labour to produce such things out of natural objects. A child can understand this, yet the acutest thinkers of the eighteenth century denied it with the approval of the best of their contemporaries and of not the worst of their epigones, because they could not otherwise explain the strange problem of human economics.