Freeland: A Social Anticipation

by Theodor Hertzka

And now as to the security against the injustice of exploitation; for my own part I do not understand this at all. The workers were 'free,' nothing compelled them to produce for other men's advantage? Yes, certainly, nothing but the trifle--hunger. They could leave it alone, if they wished to starve! Just the 'freedom' which the slave has. If he does not mind being whipped, there is nothing to compel him to work for his master. The bonds in which the 'free' masses of the exploiting society languish are tighter and more painful than the chains of the slave. The word 'robbery' does not please the previous speaker? It is, indeed, a hard and hateful word; but the 'robber' is not the individual exploiter, but the exploiting society, and this was formerly, in the bitter need of the struggle for existence, compelled to practise this robbery. Is the slaughter in battle any the less homicide because it is done at the command, not of the individual, but of the State, which is frequently acting under compulsion? It will be said that this kind of killing is not forbidden by the penal law, nay, that it is enjoined by our duty to our country, and that only forbidden kinds of killing can be called 'homicide.' Juridically that is quite correct; and if it occurred to anyone to bring a charge of killing in battle before a court of justice he would certainly be laughed at. But he would make himself quite as ludicrous who, because killing in war is allowed, would deny that such killing was homicide if the point under consideration was, not whether the act was juridically penal, but how to define homicide as a mode of violently putting a man to death. So exploitation is no robbery in the eye of the penal law; but if every appropriation to one's self of the property of another can be called robbery--and this is all that the present case is concerned with--then is robbery and nothing else the basis of every exploiting society, of the modern 'free' society no less than of the ancient or mediaeval slave-holding or serf-keeping societies. [Long-continued applause, in which Messrs. Johann Storm and Charles Prud both joined.]

James Brown (Right): Our colleague from Hungary has so pithily described the true characteristics of self-interest and property in the exploiting society, that nothing more is to be said upon that subject. But even if it is correct that these two motive springs of labour can be placed in their right position only by economic justice, it still remains to be asked whether the only way of doing this--namely, the organisation of free, self-controlling, unexploited labour--will prove to be everywhere and without exception practicable. Little would be gained by the solemn proclamation of the principle that every worker is his own master, and the complete concession to all workers of a right of disposal of the means of production, if those workers were to prove incapable of making an adequate use of such rights. The final and decisive question, therefore, is whether the workers of the future will always and everywhere exhibit that discipline, that moderation, that wisdom, which are indispensable to the organisation of truly profitable and progressive production? The exploiting industry has a routine which has taken many thousands of years for its development. The accumulated experience of untold generations teaches the employer under the old system how to proceed in order to control a crowd of servants compelled dumbly to obey. He, nevertheless, frequently fails, and only too often are his plans wrecked by the insubordination of those under him. The leaders of the workers' associations of the future have as good as no experience to guide them in the choice of modes of association; they will have as masters those whom they should command, and yet we are told that success is certain, nay, success must be certain if the associated free society is not to be convulsed to its very foundations. For whilst the exploiting society confines the responsibility for the fate of the separate undertakings to those undertakings themselves, the so-often-mentioned solidarity of interests in the free society most indissolubly connects the weal and the woe of the community with that of every separate undertaking. I shall be glad to be taught better; but until I am, I cannot help seeing in what has just been said grounds for fear which the experience of Freeland until now is by no means calculated to dissipate. The workers of Freeland have understood how to organise and discipline themselves: does it follow from this that the workers everywhere will be equally intelligent?

Miguel Spada (Left): I will confine myself to a brief answer to the question with which the previous speaker closed. It certainly does not follow that the attempt to organise and discipline labour without capitalist employers must necessarily succeed among all nations simply because it has succeeded among the Freelanders, and will unquestionably succeed among numerous other peoples. It is possible, nay, probable, that some nations may show themselves incapable of making use of this highest kind of spontaneous activity; so much the worse for them. But I hope that no one will conclude from this that those peoples who are not thus incapable--even if they should find themselves in the minority--ought to refrain from such activity. The more capable will then become the instructors of the less capable. Should the latter, however, show themselves to be, not merely temporarily incapable, but permanently intractable, then will they disappear from the face of the earth, just as intractable cannibals must disappear when they come into contact with civilised nations. The delegate who proposed the question may rest assured that the nation to which he belongs will not be numbered among the incapable ones.

Vladimur Tonof (Freeland): The honourable member from England (Brown) has formed an erroneous conception of the difficulties of the organisation and discipline now under consideration, as well as of the importance of any miscarriage of individual enterprises in a free community. As to the former matter, I wish to show that in the organisation of associated capital, which is well known to have been carried out for centuries, there is an instructive and by no means to be despised foreshadowing of associated labour, so far as relates to the modes of management and superintendence to be adopted in such cases. Of course there are profound distinctions which have to be taken into consideration; but it has been proved, and it is in the nature of things, that the differences are all in favour of associated labour. In this latter, for instance, there will not be found the chief sins of associations of capitalists--namely, lack of technical knowledge and indifference to the objects of the undertaking on the part of the shareholders; and therefore it is possible completely to dispense with those useless and crippling kinds of control-apparatus with which the statutes of the companies of capitalists are ballasted. As a rule, the single shareholder understands nothing of the business of his company, and quite as seldom dreams of interfering in the affairs of the company otherwise than by receiving his dividends. Notwithstanding, he is the master of the undertaking, and in the last resort it is his vote that decides the fate of it; what provisions are therefore necessary in order to protect this shareholder from the possible consequences of his own ignorance, credulity, and negligence! The associated workers, on the contrary, are fully acquainted with the nature of their undertaking, the success of which is their chief material interest, and is, without exception, recognised as such by them. This is a decisive advantage. Or does anyone see a special difficulty in the fact that the workers are placed under the direction of persons whose appointment depends upon the votes of the men who are to be directed? On the same ground might the authority of all elective political and other posts be questioned. The directors have no means of compelling obedience? A mistake; they lack only the right of arbitrarily dismissing the insubordinate. But this right is not possessed by many other bodies dependent upon the discipline and the reasonable co-operation of their members; nevertheless, or rather on this very account, such bodies preserve better discipline than those confederations in which obedience is maintained by the severest forcible measures. It is true that where there is no forcible compulsion discipline cannot so easily pass over into tyranny; but this is, in truth, no evil. Moreover, the directors of free associations of workers can put into force a means of compulsion, the power of which is more unqualified and absolute than that of the most unmitigated tyranny: the all-embracing reciprocal control of the associates, whose influence even the most obstinate cannot permanently withstand. It is certainly indispensable that the workers as a whole, or a large majority of them, should be reasonable men whose intelligence is sufficient to enable them to understand their own interests. But this is the first and foremost conditio sine quâ non of the establishment of economic justice. That economic justice--up to the present the highest outcome of the evolution of mankind--is suitable only to men who have raised themselves out of the lowest stage of brutality, is in no respect open to question. Hence it follows that nations and individuals who have not yet reached this stage of development must be educated up to it; and this educational work is not difficult if it be but undertaken with a will. We doubt that it could altogether fail anywhere, if undertaken seriously and in the right way.

And now let us look at the second side of the question which has been thrown out. Is it correct that, in consequence of the solidarity of interests which exists in the free community, the weal and woe of the whole are indissolubly bound up with the success of any individual undertaking? If it be meant by this that in such a community everyone is interested in the weal of everyone else, and consequently in the success of every undertaking, then it fully expresses what is the fact; but--and this was evidently the meaning of the speaker--if it is meant that the weal of such a community is dependent upon the success of every single undertaking of its members, then it is utterly groundless. If an undertaking does not thrive, its members leave it and turn to one that is more prosperous--that is all. On the other hand, this mobility of labour, bound up with the solidarity of interests, protects the free community from the worse consequences of actual miscarriage. If there should be an ill-advised choice of directors, the unqualified officials can do but relatively little mischief; they see themselves--that is, the undertaking under their control--promptly forsaken by the workers, and the losses are insignificant because confined within a small area. In fact, this mobility proves itself to be in the last resort the most effectual corrective of all kinds of mistakes, the agency by which all the defective forms of organisation and the less capable minds are thrust aside and automatically superseded by better. For the undertakings which, from any cause whatever, fail to thrive are always in a comparatively short time absorbed by better, without involving in ruin--as happens under the exploiting system of society--those who were engaged in the former undertakings. Hence it is not necessary that these free organisations should in all cases strike the highest note at the very beginning in order eventually to attain to perfect order and excellence; for in the friendly competition what is defective rapidly vanishes from sight, being merged in what is proved to be superior, which then alone holds the field.

John Kilmean (Right): Let us grant, then, that the associations of free labour are organised as well as, or better than, the capitalists' associations of the old exploiting world. Is there, nevertheless, no ground to fear that they will exhibit serious defects in comparison with undertakings conducted by individual employers? That self-interest, so far as concerns the workers themselves, can for the first time have full play in stimulating activity is true; but with respect to the management the reverse is the fact. At least one would think that the interest of the individual undertaker in the success of the business belonging to him alone must be a keener one than that of directors, who are nothing more than elected functionaries whose industrial existence is in no way indissolubly connected with the undertaking. The advantages which the private undertaking conducted by the individual proprietor has hitherto exhibited over the joint-stock company, it must, in the nature of things, also have over the free associations.

Theodor Ypsilanti (Freeland): Let us assume, for the present, that this is so. But are the advantages of the individual undertaker over the joint-stock company really so great? It is not necessary to theorise for and against, since practice has long ago pronounced its verdict. And what is this? Simply that the joint-stock undertaking has gradually surpassed, nay, in the most important and the most extensive branches of business totally superseded, the much-lauded private undertaking. It can be confidently assorted that in every kind of undertaking which is large enough to support the--certainly somewhat costly--apparatus of a joint-stock company, the joint-stock company is undisputed master of the field, so that there remains to the private undertaking, as its domain, nothing more than the dwarf concerns with which our free society does not meddle. It cannot be said that this is due to the larger money power of the combined capital, for even relatively small undertakings, whose total capital is many times less than that of a great many private millionaires, prefer, I may say choose exclusively, the joint-stock form. It is quite as great a mistake to ascribe this fact to the reluctance of private capitalists to run the risk involved in certain undertakings, and to their consequent preference for joint-stock undertakings; for, in the first place, it is generally the least risky branches of business in which the joint-stock form most exclusively prevails; and in the second place, we see only too often that individual capitalists place enormous sums in single companies, and even found undertakings in a joint-stock form with their own capital. But a decisive proof of the superiority of the joint-stock company is the universal fact that the great capitalists are everywhere entrusting the control of their property to joint-stock companies. If the account-books of the wealthy in every civilised exploiting country were to be examined, it would unquestionably be found that at least nine-tenths of the capitalists had employed the greatest part of their capital which was not invested in land in the purchase of shares. This, however, simply shows that the rich prefer not to manage their wealth themselves, but to allow it to be managed by joint stock companies.

The orthodox theory, spun out of the flimsiest fictions, is not able to do anything with this fact; it therefore ignores it, or seeks to explain it by a number of fresh fictions, such as the fable of divided risk, or some other similar subterfuge. The truth is that the self-interest of the employer has very little to do with the real direction of the businesses belonging to him--so far as concerns great undertakings--for not the employer, but specially appointed wage-earners, are, as a rule, the actual directors; the alleged advantage of the private undertaking, therefore, does not exist at all. On the other hand, the undertaking of the private capitalist is at a very heavy disadvantage in competition with that of the joint-stock company, inasmuch as the latter almost always attracts by far the greater amount of intelligence. The capitalist, even the largest, is on the average no cleverer than other men--that is, generally speaking, he is not particularly clever. It may, perhaps, be objected that he would scarcely have attained to great wealth had he not possessed superior abilities; but apart from the fact that it has yet to be established whether in the modern exploiting society it is really special mental gifts, and not rather other things, that lead to the accumulation of great wealth, most large fortunes are no longer in the hands of the original acquirers, but in those of their heirs. Consequently, in private undertakings, if not the actual direction, yet certainly the highest authority, and particularly the final decision as to the choice of the actual directors, lies in the hands of men who, shall we say, half of them, possess less than the average, nine-tenths of the rest about the average, and only one-twentieth of them more than the average of human intelligence. Naturally nineteen-twentieths of the undertakings thought out and established by such men will be either indifferent or bad. It will be further objected that it is in the main the same men to whom a similar rôle falls in the creation and officering of joint-stock companies. Very true. But here it is usual for the few able men among the wealthy to take the rôle of leaders; the stupid or the moderately gifted are changed from autocratic despots into a herd of common docile cattle, who, led by the instinct of self-interest, blindly follow the abler men. And even when it is otherwise, when the incapable rich man stubbornly insists upon thrusting forward his empty pate, he finds himself compelled to give reasons for what he does, to engage in the game of question and answer with his fellow shareholders, and ordinarily he is thus preserved from the gross follies which he would be sure to commit if the whole responsibility rested upon himself. In a word, capitalists acting together as joint-stock companies as a rule exhibit more ability than capitalists acting independently. But even if it were not so, the selections which they make--as shareholders--in appointing the chief managers of their business are infinitely better than those made by private capitalists, because a whole category of intelligences, and that of the highest and best kind, stands at the disposal of the joint-stock company, but not of the private undertaker. Many persons who offer themselves as directors, members of council of administration, presidents, of joint-stock companies, would never condescend to enter into the service of an individual. The general effect of all this is, that joint-stock companies in the greater number of cases possess far abler, more intelligent managers than private undertakings--a circumstance which no one will overlook who is but even moderately well acquainted with the facts of the case.

The alleged superiority of the private undertaking, supposed to be due to the personal care and oversight of the owner, is therefore nothing more than one of the many fables in which the exploiting world believes in spite of the most obvious lack of truth. But even the trifling advantages which the private undertaking really has over the joint-stock company cannot be claimed as against freely associated labour. Colleague Tonof has already pointed out that ignorance and indifference, those most dangerous characteristics of most shareholders, are not to be feared in those who take part in labour associations. Here it can never happen that an unscrupulous minority will obtain control of the management and exploit the undertaking for the benefit of some private interest; here it is natural that the whole body of members, who are interested in the successful conduct of the business, should incessantly and attentively watch the behaviour of the officials they have elected; and in view of the perfect transparency of all the business transactions in the free community, secret practices and crooked ways--those inevitable expedients of dishonour--are not to be thought of. In a word, the form of labour organisation corresponding to the higher stage of civilisation proves itself to be infinitely superior in every respect to the form of organisation prevalent in the past--a fact which, strictly speaking, is a matter of course.

It does not follow that this form of organisation is the most suitable for every kind of labour; there are branches of production--I mention merely the artistic or the scientific--in which the individual must stand by himself; but we do not apply the principle of association to these branches. For no one would forcibly impose this principle, and the individual freedom that is nowhere interfered with is able of itself to take care that what is done is everywhere done in the way that has been found to be most consistent with nature, and best.