Socialism as it is

by William English Walling

The question that must now be answered by the statesman as opposed to the mere politician, by the publicist as opposed to the mere journalist, is, not how soon the program of "State Socialism" will be put into effect, but what is going to be the attitude of the masses towards it. A movement exists that is already expressing and organizing their discontent with capitalism in whatever form. It promises to fill this function still more fully and vigorously in proportion as collectivist capitalism develops. I refer to the international revolutionary movement that finds its chief expression in the federated Socialist parties. The majority of the best-known spokesmen of this movement agree that social reform is advancing; yet most of them say, with Kautsky, that control of the capitalists over industry and government is advancing even more rapidly, partly by means of these very reforms, so that the Machtverhaeltnisse, or distribution of political and economic power between the various social classes, is even becoming less favorable to the masses than it was before. The one thing they feel is that no such capitalist society will ever be willing to ameliorate the condition of the non-capitalists to such a degree that the latter will get an increasing proportion of the products of industry or of the benefits of legislation, or an increased influence over government. The capitalists will never do anything to disturb radically the existing balance of power.

While Socialists have not always conceded that the capitalists will themselves undertake, without compulsion, large measures of political democracy and social reform,—even of the capitalistic variety,—nearly all of the most influential are now coming to base their whole policy on this now very evident tendency, and some have done so for many years past. For instance, it has been clear to many from the time of Karl Marx that it would be necessary for capitalist society itself to nationalize or municipalize businesses that become monopolized, without any reference to Socialism or the Socialists.

"These private monopolies have become unbearable," says Kautsky, "not simply for the wage workers, but for all classes of society who do not share in their ownership," and he adds that it is only the weakness of the bourgeois (the smaller capitalist) as opposed to capital (the large capitalist) that hinders him from taking effective action. Indeed, one of the chief respects in which history has pursued a somewhat different course from that expected by Marx has been in the failure of capitalist society to attempt immediately this solution of the trust problem through government ownership. Marx expected that this attempt would necessarily be made as soon as the monopolies reached an advanced state, and that the resulting economic revolution would develop into a Socialist revolution. But this monopolistic period has come, the trusts are rapidly dominating the whole field of industry and government, and yet it seems improbable that they will be forced to any final compromise with the small capitalist investors and consumers for some years to come. In the meanwhile, no doubt, the process of nationalization will begin, but too late to fulfill Marx's expectation, for the large and small capitalists will have time to become better united, and their combined control over government will have had time to grow more secure than ever. The new partnership of capitalism and the State will, no doubt, represent the small capitalists as well as the large, but there is no sign that the working people will be able to take advantage of the coming transformation for any non-capitalist purpose. Nor did Marx expect national ownership to increase the relative strength of the workers unless it was accompanied by a political revolution.

Another vast capitalist reform predicted by Socialists since the Communist Manifesto (1847) is nationalization or municipalization of the ground rent or unearned increment of land. At first Kautsky and others were inclined to expect that nothing would be done in this direction until the working classes themselves achieved political power, but it has always been seen from the days of Marx that the industrial capitalists had no particular reason for wishing to be burdened with a parasitic class of landlords that weighed on their shoulders as much as on those of the rest of the people. Not only do industrial capitalists pay heavy rents to landlords, but the rent paid by the wage worker also has to be paid indirectly and in part by the industrial capitalist: "The quantity of wealth that a landlord can appropriate from the capitalist class becomes larger in proportion as the general demand for land increases, in proportion as population grows, in proportion as the capitalist class needs land, i.e. in proportion as the capitalist system of production expands. In proportion with all this, rent rises; that is to say, the aggregate amount of wealth increases which the landlord class can slice off—either directly or indirectly—from the surplus that would otherwise be grabbed by the capitalist class alone."[90]

The industrial capitalists, then, have very motive to put an end to this kind of parasitism, and to use the funds secured, through confiscatory taxation of the unearned increment of land, to lessen their own taxation, to nationalize those fundamental industries that can only be made in this way to subserve the interests of the capitalist class as a whole (instead of some part of it merely), and to undertake through government those costly enterprises which are needed by all industry, but which give too slow returns to attract the capitalist investor.

This enormous reform, in land taxation, which alone would put into the hands of governments ultimately almost a third of the capital of modern nations, was considered by Marx, in all its early stages, as purely capitalistic, "a Socialistically-fringed attempt to save the rule of capitalism, and to establish it in fact on a still larger foundation at present."[91] Indeed, I have shown in a previous chapter that radical reformers who advocated this single-tax idea, along with the nationalization and municipalization of monopolies, do so with the conscious purpose of reviving capitalism and making it more permanent, precisely as Marx says. The great Socialist wrote the above phrase in 1881 (in a recently published letter to Sorge of New York) after reading Henry George's "Progress and Poverty," which had just appeared. He calls attention to the fact that James Mill and other capitalistic economists had long before recommended that land rent should be paid to the State so as to serve as a substitute for taxes, and that he, himself, had advocated it in the Manifesto of 1847—among transitional measures.

Marx says that he and Engels "inserted this appropriation of ground rent by the State among many other demands," which, as also stated in the Manifesto, "are self-contradictory and must be such of necessity." He explains what he means by this in the same letter. In the very year of the Manifesto he had written (in his book against Proudhon) that this measure was "a frank statement of the hatred felt by the industrial capitalist for the landowner, who seems to him to be a useless, unnecessary member in the organism of Capitalist society." Marx demanded "the abolition of property in land, and the application of all land rents to public purposes," not because this is in any sense the smallest installment of Socialism, but because it is a progressive capitalistic measure. While it strengthens capitalism by removing "a useless, unnecessary member," and by placing it "on a still larger foundation than it has at the present," it also matures it and makes it ready for Socialism—ready, that is to say, as soon as the working people capture the government and turn the capitalists out, but not a day sooner.[92] Until that time even the most grandiose reform is merely "a Socialistically-fringed attempt to save the rule of capitalism."

Other "transitional measures" mentioned by Marx and Engels in 1847, some of which had already been taken up as "Socialistically-fringed attempts to save the rule of capitalism" even before their death were:—

The heavily graduated income tax.

The abolition of inheritance.