It was stated in various newspapers, and your letter itself states, that you have been recommended from almost all sides to take into consideration the Schulze-Delitzsch organizations—credit associations, raw material associations, and consumers' associations—for the improvement of the situation of the working class. Allow me to ask you for still closer attention.
Schulze-Delitzsch may be considered from three points of view: First, from the political point of view, he belongs to the Progressive party, which has already been discussed. Second, he claims to be a political economist. In this respect—as a theoretical economist—he stands entirely on the ground of the Liberal school: he shares all its mistakes, fallacies, and self-deceptions. The addresses which he has made so far to the Berlin workingmen are a striking proof of this—misrepresentations of fact and conclusions which in no way follow from his premises. However, it will not help your purpose, and it is not my intention, to go into a criticism here of the economic views and the speeches of Schulze-Delitzsch and to point out these self-deceptions and fallacies which, in matters of theoretical economics, he has in common with the whole Liberal school to which he belongs. I shall be compelled later, in any case, to come back to the essential content of these doctrines.
But Schulze-Delitzsch has, in the third place, a practical nature, which is of more importance than his theoretical economic viewpoint. He is the only member of his party, the Progressive party—and all the more credit is due him just for this reason—who has done anything for the people. Through his tireless activity, even though he stands alone at a most unfavorable time, he has become the father and founder of the German associations, and so has given an impulse, of the most far-reaching importance, to the cause of associations in general, a service for which, however I may be opposed to him in theory, I shake his hand warmly in spirit as I write this. Truth and justice even toward an adversary (and for the working class above all it is befitting to take this deeply to heart)—this is the first duty of man.
That the question whether associations are to be understood according to his or my interpretation is under discussion today is in large part due to him, and that is a real service which cannot be too highly esteemed.
But the warmth with which I recognize this service must not prevent us from stating the question with critical clearness: "Are the Schulze-Delitzsch associations for credit and for raw materials, and are the consumers' leagues able to accomplish the improvement of the situation of the working class?"
The answer to this question must be a most decided "no." It will be easy to show this briefly. As to the credit and raw material associations, these both agree in that they exist only for those who are carrying on business on their own account—that is, only for artisan production. For the working class in the narrower sense—the hands employed in factory production, who have no business of their own for which they can use credit and raw materials—neither kind of association exists. Their help can therefore reach only the artisan producers.
But, even in this respect, please notice and impress upon your minds two essential circumstances:
In the first place the inevitable tendency of our industrialism is to put factory production more and more from day to day in place of artisan production, and, in consequence, to drive the workmen of a constantly increasing number of trades into the laboring class proper, which finds work in the factories. England and France, which are ahead of us in economic development, show this in a still greater degree than Germany, which is, however, taking tremendous strides in the same direction. Your own experience will confirm this sufficiently.
It follows from this that the Schulze-Delitzsch credit and raw material associations, even if they could help the artisans, could be of advantage only to a very small number of people, a number which is constantly decreasing and tends to disappear, through the inevitable development of our manufacturing system—people who through the progress of our culture are, in constantly increasing numbers, forced into the class of workingmen who are not affected by this aid. That is, nevertheless, only the first conclusion. A second, of still greater importance, is the following: In competition with factory production, which is in constantly increasing scope taking the place of small artisan production, even the artisans who remain in the latter are in no way certain of being protected by the credit and raw material associations. I will again cite Professor Huber as a witness on this point. "Unfortunately," says he, after speaking in praise, as I have done, of the Schulze-Delitzsch credit and raw material associations, "unfortunately, however, the assumption that the competition of production on a small scale with factory production would be made possible seems by no means sufficiently established." But, better than any testimony, the easily explained internal reasons of what I say will convince you.
How far can the credit associations accomplish the procuring of cheap and good raw materials? It can place the artisan without capital in a position to compete with the artisan who has sufficient small capital for his small artisan production. It can, therefore, at most put the artisan without capital on an equality and in the same situation with the master workman who has sufficient capital of his own for his production. But now the fact is just here—even the master workman with sufficient capital of his own cannot stand the competition of large capitalists and of factory production, both on account of the smaller cost of production of all kinds made possible by the factory system, and on account of the smaller rate of the profit which in wholesale production is to be reckoned on each single piece, and, finally, on account of other advantages connected with it. Since, now, the credit and raw material associations can at most bring the small producer without capital into the same general position as the one who has sufficient capital for his small production, and since the latter cannot stand the competition of the wholesale production of the factories, this result is still more certain for the small producer who carries on his business with the help of these associations.