Socialism - A Summary and Interpretation of Socialist Principles
by John Spargo
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Thus reduced, the increase of small industries and retail establishments affects the contention that there is a general tendency to concentration very little. It does perhaps seriously weaken, or even destroy, some extreme statements of the theory, contending that the process of monopolization must be a direct, simple process of continuous absorption and elimination, leaving each year fewer small units than before. Small stores do exist; they have not been put out of existence by the big department stores as was at one time confidently predicted. They serve a real social need by supplying the minor commodities of everyday use in small quantities, just as the petty industries serve a real social need. Many of them are conducted by married women to supplement the earnings of their husbands, or by widows; others by men unable to work, whose income from them is less than the wages of artisans. Together, these probably constitute a majority of the small retail establishments which show any tendency to increase.[99]

The effect of this increase is still further lessened when it is remembered that only the critics of Socialism interpret the Marxian theory to mean that all petty industry and business must disappear, that all must be concentrated into large industrial and commercial units, to make Socialism possible. If we are to judge Marxism as the basis of the Socialist movement, we must judge it by the interpretation given to it by the Socialists, and not otherwise. There is no Socialist of note to-day who does not realize that many small industrial and business enterprises will continue to exist for a very long time, even continuing to exist under a Socialist regime. Kautsky, perhaps the ablest living exponent of the Marxian theories, leader of the "Orthodox" Marxists, admits this. He has very ably argued that the ripeness of society for Socialism, for social production and control, depends, not upon the number of little industries that still remain, but upon the number of great industries which already exist.[100] The ripeness of society for Socialism is not disproved by the number of ruins and relics abounding. "Without a developed great industry, Socialism is impossible," says this writer. "Where, however, a great industry exists to a considerable degree, it is easy for a Socialist society to concentrate production, and to quickly rid itself of the little industry."[101] It is the increase of large industries, then, which Socialists regard as the essential preliminary condition of Socialism.

Far more important than the increase or decrease of the number of units is their relative significance in the total production, a phase of the subject which is rather disingenuously avoided by most critics of Marxism. Mr. Lucien Sanial, a Socialist statistician of repute, and one of the profoundest Marxian students in America, has shown this in a number of suggestive tables. For example, he takes twenty-seven typical manufacturing industries for the years 1880, 1900, and 1905, and compares the number of establishments in each year with the total amount of capital invested and workers employed. In 1880 the number of establishments was 63,233; in 1900 the number was 51,912, and in 1905 it was only 44,142. From 1880 to 1905 there had been a decrease in the number of establishments of 35.3 per cent, of which 15 per cent took place within the last five years. But within the same period there had been an increase in the amount of capital invested in these twenty-seven industries as follows: from $1,276,600,000 in 1880 to $3,324,500,000 in 1900 and to $4,628,800,000 in 1905—a total increase from 1880 to 1905 of 262.6 per cent. On the other hand, the number of wage-workers increased in the same period only 60.2 per cent, the number in 1905 being 1,731,500, as against 1,611,000 in 1900 and 1,080,200 in 1880.

In another table, forty-seven industries are taken. These forty-seven industries comprised 29,800 establishments in 1900; five years later there were but 26,182. In 1900 the total capital invested in these industries was $1,005,400,000, and in 1905 it had increased to $1,339,500,000. In the same five years the number of wage-workers increased only from 618,000 to 749,000. Thus, in the group of larger industries and the group of smaller ones we find the same evidences of concentration: less establishments, larger capitals, and an increase of wage-workers not equal to the increase in capitalization.[102]

In connection with these figures, the following table may be profitably studied, as showing the relative insignificance of the small producer in the total volume of manufacture. It will be seen that the two largest classes of establishments have only 24,163 establishments, 11.2 per cent of the total number. But they have $10,333,000,000, or 81.5 per cent of the total manufacturing capital, and employ 71.6 per cent of all wage-workers in manufacturing industries. It may be added that they turn out 79.3 per cent of the total product. Of the petty industries proper, those having a capital of less than $5000, it will be observed that they number 32.9 per cent of the total number of establishments, but employ only 1.3 per cent of the capital invested, and only 1.9 per cent of the wage-workers. It is clear, therefore, that our manufacturing industry in very highly concentrated, and that the petty industries are, despite their number, a very insignificant factor.



Less than $5,000 71,162 32.9 $165,300,000 1.3 106,300 1.9

$5,000 to $20,000 72,806 33.7 531,100,000 4.2 419,600 7.7

$20,000 to $100,000 48,144 22.2 1,655,800,000 13.0 1,027,700 18.8

$100,000 to $1,000,000 22,281 10.0 5,551,700,000 43.8 2,537,550 46.4

Over $1,000,000 1,882 0.9 4,782,300,000 37.7 1,379,150 25.2

When we turn to agriculture, the criticisms of the Socialist theory appear more substantial and important. A few years ago we witnessed the rise and rapid growth of the great bonanza farms in this country. It was shown that the advantages of large capital and the consolidation of productive forces resulted, in farming as in manufacture, in greatly cheapened production.[104] The end of the small farm was declared to be imminent, and it seemed for a while that concentration in agriculture would even outrun concentration in manufacture. This predicted absorption of the small farms by the larger, and the average increase of farm acreage, has not, however, been fulfilled to any great degree. An increase in the number of small farms, and a decrease in the average acreage, is shown in almost all the states. The increase of great estates shown by the census figures probably bears little or no relation to real farming, consisting mainly of great stock grazing ranches in the West, and unproductive gentlemen's estates in the East.

Apparently, then, the Socialist theory that "the big fish eat up the little ones, and are in turn eaten by still bigger ones," is not applicable to agriculture. On the contrary, it seems that the great farms cannot compete successfully with the smaller farms. It is therefore not surprising that writers so sympathetic to Socialism as Professor Werner Sombart and Professor Richard T. Ely should claim that the Marxian system breaks down when it reaches the sphere of agricultural industry, and that it seems to be applicable only to manufacture. This position has been taken by a not inconsiderable body of Socialists in recent years, and is one of the tenets of that critical movement within the Socialist ranks which has come to be known as "Revisionism." Nothing is more delusive than statistical argument of this kind, and while these conclusions should be given due weight, they should not be too hastily accepted. An examination of the statistical basis of the argument is necessary.

In the first place, small agricultural holdings do not necessarily imply economic independence, any more than do petty industries or businesses. When we examine the census figures carefully, the first important fact which challenges attention is that, whereas of the farms in the United States in 1880, 71.6 per cent were operated by their owners, in 1900 the proportion had declined to 64.7 per cent. In 1900, of the 5,739,657 farms in the United States, no less than 2,026,286 were operated by tenants. Concerning the ownership of these rented farms little investigation has been made, and it is likely that careful inquiry would elicit the fact that this is a not unimportant phase of agricultural concentration, though not revealed by the figures in the census reports. It remains to be said concerning these figures, however, that they do not lend support to the theory that the small farms are being swallowed up by the larger ones, for in the same period there was a very decided increase in the number of farms operated by their owners. Thus we have the same set of figures used to support both sides of the controversy—one side calling attention to the decreased proportion of farms operated by their owners, the other to the increased number.

A similar difficulty presents itself in connection with the subject of mortgaged farm holdings. In 1890, the mortgaged indebtedness of the farmers of the United States amounted to the immense sum of $1,085,995,960, a sum almost equal to the value of the entire wheat crop. Now, while a mortgage is certainly not suggestive of independence, it may be either a sign of decreasing or increasing independence. It may be a step toward the ultimate loss of one's farm or a step toward the ultimate ownership of one. Much that has been written by Populist and Socialist pamphleteers and editors upon this subject has been based upon the entirely erroneous assumption that a mortgaged farm meant loss of economic independence, whereas it often happens that it is a step toward it. The fact is that we know very little concerning the ownership of these mortgages, which is the crux of the question. It is known that many of the insurance, banking, and trust companies have invested largely in farm mortgages. This is another phase of concentration which the critics of the theory have overlooked almost entirely. One thing seems certain, namely, that farm ownership is not on the decline. It is not being supplanted by tenantry; the small farms are not being absorbed by larger ones. It seems a fair deduction from the facts, then, that the small farmer will continue to be an important factor—indeed, the most important factor—in American agriculture for a long time to come, perhaps permanently. If the Socialist movement is to succeed in America, it must recognize this fact in its propaganda.


Most of the criticism of the Marxian theory of concentration is based upon a very unsatisfactory definition of what is meant by concentration. The decrease of small units and their absorption or supercession by larger units is generally understood when concentration is spoken of. But concentration may take other, very different forms. There may be a concentration of control, for example, without concentration of actual ownership, or there may be concentration of actual ownership disguised by mortgages, as already suggested. The sweated trades are a familiar example of the former method of concentration. It has been shown over and over again that while small establishments remain a necessary condition of sweated industry, there is almost always effective concentration of control. To all appearances an independent manufacturer on a small scale, the sweater is generally nothing more than the agent of some big establishment, which finds it more economical to let the work be done in sweatshops than in its own factories. The same thing holds good of the retail trades, many of the apparently independent retail stores being simply agencies for big wholesale houses, controlled by them in every way. In an even larger measure, agriculture is subject to a control that is quite independent of actual or even nominal ownership of the farm. Manifestly, therefore, we need a more accurate and comprehensive definition of concentration than the one generally accepted. Mr. A. M. Simons, in an admirable study of the agricultural question from the Socialist viewpoint, defines concentration as "a movement tending to give a continually diminishing minority of the persons engaged in any industry, a constantly increasing control over the essentials, and a continually increasing share of the total value of the returns of the industry."[105] It is no part of the purpose of this chapter to discuss this definition at length. It is sufficient to have thus emphasized that concentration may be quite as effective when it is limited to control as when it embraces ownership.

There are, then, other forms of concentration than the physical one, the amalgamation of smaller units to form larger ones, and very often these forms of concentration go on unperceived and unsuspected. There can be no doubt that this is especially true of agricultural industry. Many branches of farming, as the industry was carried on by our fathers and their fathers before them, have been transferred from the farmhouse to the factory. Butter and cheese making, for example, have largely passed out of the farm kitchen into the factory. The writer recalls a visit to a large farm in the Middle West. The sound of a churn is never heard there, notwithstanding that it is a "dairy farm," and all the butter and cheese consumed in that household is bought at the village store. Doubtless this farm but presented an exaggerated form of a condition that is becoming more and more common. The invention of labor-saving machinery and its application to agriculture leads to a division of the industry and the absorption by the factory of the parts most influenced by the new processes. When we remember the tremendous role which complex agencies outside of the farm play in modern agricultural industry, we see the subject of concentration as it applies to that industry in a new light. The grain elevators, cold-storage houses, creameries, and even railroads, are part of the necessary equipment of production, but they are owned and operated independently of the farm. There is a good deal of concentration of production in agriculture which takes the form of the absorption of some of its processes by factories instead of by other farms.


We must also distinguish between the concentration of industry and the concentration of wealth. While there is a natural relation between these two phenomena, they are by no means identical. The trustification of a given industry may bring together a score of industrial units in one gigantic concern, so concentrating capital and production, but it is conceivable that every one of the owners of the units which compose the trust may have a share in it equal to the capital value of his particular unit, but more profitable. In that case, there can obviously be no concentration of wealth. What occurs is that all are benefited by certain economies, in exact proportion to their holdings in the capital stock. It may even happen that a larger number of persons participate, as shareholders, in the amalgamation than were formerly concerned in the ownership of the units of which the amalgamation is composed. Assuming, for the purposes of our argument, that these persons are represented by new capital, that the former owners of independent units share upon an equitable basis, there will be increased diffusion of wealth instead of its concentration. As Professor Ely says, "If the stock of the United States Steel Corporation were owned by individuals holding one share each, the concentration in industry would be just as great as it is now, but there would be a wide diffusion in the ownership of the wealth of the corporation."[106]

Obvious as this distinction may seem, it is very often lost sight of, and when recognized it presents difficulties which are almost insurmountable. It is well-nigh impossible to present statistically the relation of the concentration of capital to the concentration or diffusion of wealth, important as the point is in its bearings upon modern Socialist theory. While the distinction does not affect the argument that the concentration of capital and industry makes their socialization possible, it is nevertheless an important matter. If, as some writers, notably Bernstein,[107] the Socialist, have argued, the concentration of capital and industry really leads to the decentralization of wealth, and the diffusion of the advantages of concentration among the great mass of the people, especially by creating a new class of salaried dependents, then, instead of creating a class of exploiters ever becoming less numerous, and a class of proletarians ever becoming more numerous, the tendency of modern capitalism is to distribute the gains of industry over a widening area—a process of democratization in fact. It is very evident that if this contention is a correct one, there must be a softening rather than an intensifying of class antagonisms; a tendency away from class divisions, and to greater satisfaction with present conditions, rather than increasing discontent. If this theory can be sustained, the advocates of Socialism will be obliged to change the nature of their propaganda from an appeal to the economic interest of the proletariat to the general ethical sense of mankind. There can be no successful movement based upon the interests of one class if the tendency of modern capitalism is to democratize the life of the world and diffuse its wealth over larger social areas than ever before.

The exponents of this theory have based their arguments upon statistical data chiefly relating to: (1) The number of taxable incomes in countries where incomes are taxed; (2) the number of investors in industrial and commercial countries; (3) the number of savings bank deposits. As often happens when reliance is placed upon the direct statistical method, the result of all the discussion and controversy upon this subject is extremely disappointing and confusing. The same figures are used to support both sides of the argument with equal plausibility. The difficulty lies in the fact that the available statistics do not include all the facts essential to a scientific and conclusive result.

It is not intended here to add to the Babel of voices in this discussion, but to present the conclusions of two or three of the most careful investigators in this field. Professor Ely[108] quotes a table of incomes in the Grand Duchy of Baden, based upon the income tax returns of that country, which has formed the theme of much dispute. The table shows that in the two years, 1886 and 1896, less than one per cent of the incomes assessed were over 10,000 marks a year, and from this fact it has been argued that wealth in that country has not been concentrated to any very great extent. In like manner, the French economist, Leroy-Beaulieu, has argued that the fact that in 1896 only 2750 persons in Paris had incomes of over 100,000 francs a year betokens a wide diffusion of wealth and an absence of concentration.[109] But the important point of the discussion, the proportion of the total wealth owned by these classes, is entirely lost sight of by those who argue in this manner. Further, it must always be borne in mind that there is a decided tendency in all income tax schedules to understate the amount of incomes above a certain size, the larger the income the more likelihood of its being understated in the returns. The psychology of this fact needs no elaborate demonstration. Taking the figures for the Grand Duchy of Baden as they are given, we have no particulars at all concerning the number of incomes under 500 marks, but of the persons assessed upon incomes of 500 marks and over, in 1886, the poorest two thirds had about one third of the total income, and the richest 0.69 per cent had 12.78 per cent of the total income. So far, the figures show a much greater concentration of wealth than appears from the simple fact that less than one per cent of the incomes assessed were over 10,000 marks a year.

Going further, we compare the two years, 1886 and 1896, and find that this concentration increased during the ten-year period as follows: In 1886, there were 2212 incomes of more than 10,000 marks assessed, being 0.69 per cent of the total number. In 1896, there were 3099 incomes of more than 10,000 marks assessed, being 0.78 per cent of the total number. In 1886, 0.69 per cent of the incomes assessed amounted to 51,403,000 marks, representing 12.77 per cent of the total assessed wealth; while in 1896, 0.78 per cent of the incomes assessed amounted to 81,986,000 marks, representing 15.02 per cent of the total wealth so assessed. In 1886 there were 18 incomes of over 200,000 marks a year, aggregating 6,864,000 marks, 1.70 per cent of the total value of all incomes assessed; in 1896, there were 28 such incomes, aggregating 12,481,000 marks, or 2.29 per cent of the total value of all incomes assessed. The increase of concentration shown by these figures is not disputable, it seems to the present writer, when they are thus carefully analyzed, notwithstanding the fact that the table from which they are drawn is sometimes used to support the opposite contention.

According to the late Professor Richmond Mayo-Smith,[110] seventy per cent of the population of Prussia have incomes below the income tax standard, their total income representing only one third of the total income of the population. An additional one fourth of the population enjoys one third of the total income, while the remaining one third goes to about four per cent of the people. The significance of these figures is clearly shown by the following diagram:—

In Saxony the statistics show that "two thirds of the population possess less than one third of the income, and that 3.5 per cent of the upper incomes receive more than 66 per cent at the lower end." From a table prepared by Sir Robert Giffen, a notoriously optimistic statistician, always the exponent of an ultra-roseate view of social conditions, Professor Mayo-Smith concludes that in England, "about ten per cent of the people receive nearly one half of the total income."[111] These figures are rather out of date, it is true, but they err in understating the amount of concentration rather than otherwise, as the researches of Mr. Chiozza Money, M.P., and others show.[112]

In this country, the absence of income tax figures makes it impossible to get direct statistical evidence as to the distribution of incomes. The most careful estimate of the distribution of wealth in the United States yet made is that by the late Dr. Charles B. Spahr.[113] Written in 1895, Dr. Spahr's book cannot be regarded as an accurate presentation of conditions as they exist at the present moment, yet here again there is every reason to believe that the process of concentration has gone on unchecked since he wrote. It is not necessary for our present purpose, however, to accept the estimate of Dr. Spahr as authoritative and conclusive. The figures are quoted here simply as the result reached by the most patient, conscientious, and scientific examination of the distribution of wealth in this country yet made. Dr. Spahr's conclusion was that in 1895 less than one half of the families in the United States were property-less; but that, nevertheless, seven eighths of the families owned only one eighth of the national wealth, while one per cent of the families owned more than the remaining ninety-nine per cent.

Mr. Lucien Sanial, in a most careful analysis of the census for 1900, shows that, classified according to occupations, 250,251 persons possessed $67,000,000,000, out of a total of $95,000,000,000 given as the national wealth; that is to say, 0.9 per cent of the total number in all occupations owned 70.5 per cent of the total national wealth. The middle class, consisting of 8,429,845 persons, being 29.0 per cent of the total number in all occupations, owned $24,000,000,000, or 25.3 per cent of the total national wealth. The lowest class, the proletariat, consisting of 20,393,137 persons, being 70.1 per cent of the total number in all occupations, owned but $4,000,000,000, or 4.2 per cent of the total wealth. To recapitulate: Of the 29,073,233 persons ten years old and over engaged in occupations,

0.9 per cent own 70.5 per cent of total wealth. 29.0 per cent own 25.3 per cent of total wealth. 70.1 per cent own 4.2 per cent of total wealth.

Startling as these figures are, it will be evident upon reflection that they do not adequately represent the amount of wealth concentration. The occupational basis is not quite satisfactory as applied to the richest class. It serves for the proletarian class, of course, and for a very large part of the middle class. In these classes, as a rule, the occupied persons represent wealth ownership. But this is by no means true of the richest class. In this class we have a very considerable proportion of the wealth owned by unoccupied persons, such as the wives rich in their own right, children and other unoccupied members of families rich by inheritance. Mr. Henry Laurens Call, in a paper read before the American Association for the Advancement of Science, at Columbia University, at the end of 1906, made these figures the basis of the startling estimate that one per cent of our population own not less than ninety per cent of our total wealth.

There is a peculiarity of modern capitalism which enables the great capitalists to control vastly more wealth than they own. Take any group of large capitalists, and it will be found that they control a much greater volume of capital than they own. The invested capital of a multitude of small investors is in their keeping, and they can and do use it for purposes of their own. Thus we have a concentration of capitalist control which goes far beyond the concentration of ownership. And this concentration of the essential control of the capital of a country becomes more and more important each year. It is recognized to-day that the most important capitalist is not he who himself owns the greatest amount of capital, but he who controls the greatest amount, quite irrespective of its ownership.

The growth of immense private fortunes is an indisputable evidence of the concentration of wealth. In 1854 there were not more than twenty-five millionaires in New York City, their total fortunes aggregating $43,000,000. There were not more than fifty millionaires in the whole of the United States, their aggregate fortunes not exceeding $80,000,000. To-day there are several individual fortunes of more than $80,000,000 each. New York City alone is said to have over two thousand millionaires, and the United States more than five thousand. By a curious mental process, the New York World, when the first edition of this little book appeared, sought to prove in a labored editorial that the increase of millionaires tended to prove an increasing diffusion of wealth rather than the contrary. It is hardly worth while, perhaps, making any reply to such puerility. Every student knows that the multimillionaire is only possible as a result of the concentration of wealth, that such fortunes are realized by the absorption of numerous smaller ones. Further, it is only necessary to add that all the millionaires of 1854, together with the half millionaires, owned not more than about $100,000,000 out of the total wealth, which was at that time something like $10,000,000,000. In other words, they owned not more than one per cent of the wealth of the country. In 1890, when the wealth of the country was slightly more than $65,000,000,000, Senator Ingalls could quote in the United States Senate a table showing that the millionaires and half millionaires of that time, 31,100 persons in all, owned $36,250,000,000, or just fifty-six per cent of the entire wealth of the United States.[114] Professor Ely accepts the logic of the statistical data gathered in Europe and the United States, and says "such statistics as we have ... all indicate a marked concentration of wealth, both in this country and Europe."[115]


Summing up, we may state the argument of this chapter very briefly as follows: The Socialist theory is that competition is self-destructive, and that the inevitable result of the competitive process is to produce monopoly, either through the crushing out of the weak by the strong, or the combination of units as a result of a conscious recognition of the wastes of competition and the advantages of cooeperation. The law of capitalist development, therefore, is from competition and division to combination and concentration. As this concentration proceeds, a large class of proletarians is formed on the one hand, and a small class of capitalist lords on the other, an essential antagonism of interests existing between the two classes. Petty industries may continue to exist, though, upon the whole, the tendency is toward their extinction. In certain industries, their number may even increase, but their relative importance is constantly decreasing. While Socialism does not preclude the continued existence of small private industry or business, it does require and depend upon the development of a large body of concentrated industry, monopolies which can be transformed into social monopolies whenever the people may decide so to transform them. These conditions are being fulfilled in the evolution of our economic system.

The interindustrial and international trustification of industry shows a remarkable fulfillment of the law of capitalist concentration which the Socialists were the first to formulate; the existence of petty industries and businesses, or their numerical increase even, being a relatively insignificant matter compared with the enormous increase in large industries and businesses, and their share in the total volume of industry and commerce. In agriculture, concentration, while it does not proceed so rapidly or directly as in manufacture and commerce, and while it takes directions and forms unforeseen by the Socialists of a generation ago, proceeds surely nevertheless. Along with this concentration of capital and industry proceeds the concentration of wealth into proportionately fewer hands. While a certain diffusion of wealth takes place through the mechanism of capitalist concentration, by developing a new class of highly salaried officials, and enabling numerous small investors to own shares in great industrial and commercial corporations, it is not sufficient to balance the expropriation which goes on in the competitive struggle, and it is true that a larger proportion of the national wealth is owned by a minority of the population than ever before, that minority being proportionately less numerous than ever before. Further, the peculiar financial organization of modern capitalist society enables the ruling capitalists to control and use to their own advantage the wealth of others invested in industrial and commercial corporations. Thus to the concentration of ownership must be added the concentration of control, which plays an increasingly important part in capitalist economics.

Whatever defects there may be in the Marxian theory, as outlined by Marx himself, and whatever modifications of his statement of it may be rendered necessary by changed conditions, in its main and essential features it has successfully withstood all the criticisms which have been directed against it. Economic literature is full of prophecies, but in its whole range there is not an instance of prophecy more literally and abundantly fulfilled than that which Marx made concerning the trend of capitalist development. And Karl Marx was not a prophet—he but read clearly the meaning of certain facts which others had not learned to read, the law of social dynamics. That is not prophecy, but science.


[94] Studies in the Evolution of Industrial Society, by R. T. Ely, page 95.

[95] Capital, Vol. I (Kerr edition), page 837.

[96] Briefe und Auszuege aus Briefen von Joh. Phil. Becker, Jos. Dietzgen, Friederich Engels, Karl Marx u. A. an F. A. Sorge und Andere, Stuttgart, 1906.

[97] H. W. Macrosty, The Growth of Monopoly in English Industry (Fabian Tract).

[98] Our Benevolent Feudalism, by W. J. Ghent, pages 17-21.

[99] A factor of tremendous importance in the maintenance of petty industries and business establishments in this country, which Marx could not have anticipated, has been the unprecedented volume of foreign immigration. Not only have some menial personal services—such as shoe cleaning, for example—been transformed into regular businesses by immigrants from certain countries, but the massing together of immigrants, aliens in language, customs, tastes, and manners, provides a very favorable soil for the development of small business enterprises.

[100] The Social Revolution, by Karl Kautsky, Part I, page 144. See also the argument by Paul Lafargue, Marx's son-in-law, that Socialism will not oppose petty agriculture by private individuals working their own farms.—Revue Politique et Parliamentaire, October, 1898, page 70.

[101] Kautsky, The Social Revolution, page 144.

[102] The figures are quoted from Socialism Inevitable, by Gaylord Wilshire, pages 325-326.

[103] The table is quoted from Socialism Inevitable, by Gaylord Wilshire, page 326.

[104] The cost of raising wheat in California, where large farming has been most scientifically developed, is said to vary from 92.5 cents per 100 pounds on farms of 1000 acres to 40 cents on farms of 50,000 acres.

[105] The American Farmer, by A. M. Simons, page 97.

[106] Studies in the Evolution of Industrial Society, by Richard T. Ely, page 255.

[107] Die Voraussetzungen des Sozialismus, by Edward Bernstein, page 47.

[108] Studies in the Evolution of Industrial Society, by Richard T. Ely, pages 261-262.

[109] Essai sur la repartition des richesses et sur la tendance a une moindre inegalite des conditions, par Leroy-Beaulieu, page 564.

[110] Statistics and Economics, by Richmond Mayo-Smith, Book III, Distribution.

[111] Statistics and Economics, by Richmond Mayo-Smith, Book III, Distribution.

[112] Cf. Riches and Poverty, by Chiozza Money, M.P.; also, Fabian Tract, No. 5.

[113] The Present Distribution of Wealth in the United States, by Charles B. Spahr (1896).

[114] Writings and Speeches of John J. Ingalls, page 320.

[115] Studies in the Evolution of Industrial Society, page 265.




No part of the theory of modern Socialism has called forth so much criticism and opposition as the doctrine of the class struggle. Many who are otherwise sympathetic to Socialism denounce this doctrine as narrow, brutal, and productive of antisocialistic feelings of class hatred. Upon all hands the doctrine is condemned as an un-American appeal to passion and a wicked exaggeration of social conditions. When President Roosevelt attacks the preachers of the doctrine, and wrathfully condemns class-consciousness as "a foul thing," he doubtless expresses the views of a majority of American citizens. The insistence of Socialists upon this aspect of their propaganda is undoubtedly responsible for keeping a great many outside of their movement who otherwise would be identified with it. If the Socialists would repudiate the doctrine that Socialism is a class movement, and make their appeal to the intelligence and conscience of all classes, instead of to the interests of a special class, they could probably double their numerical strength at once. To many, therefore, it seems a fatuous and quixotic policy to preach such a doctrine, and it is very often charitably ascribed to the peculiar intellectual and moral myopia of fanaticism.

Before accepting this conclusion, and before indorsing the Rooseveltian verdict, the reader is bound as a matter of common fairness, and of intellectual integrity, to consider the Socialist side of the argument. There is no greater fanaticism than that which condemns what it does not take the trouble to understand. The Socialists claim that the doctrine is misrepresented; that it does not produce class hatred; and that it is a vital and pivotal point of Socialist philosophy. The class struggle, says the Socialist, is a law of social development. We only recognize the law, and are no more responsible for its existence than for the law of gravitation. The name of Marx is associated with the law in just the same manner as the name of Newton is associated with the law of gravitation, but Marx is no more responsible for the social law he discovered than was Newton for the physical law he discovered. There were class struggles thousands of years before there was a Socialist movement, thousands of years before Marx was born, and it is therefore absurd to charge us with the creation of the class struggle, or class hatred. We realize perfectly well that if we ignored this law in our propaganda, making our appeal to a universal sense of abstract justice and truth, many who now hold aloof from us would join our movement. But we should not gain strength as a result of their accession to our ranks. We should be obliged to emasculate Socialism, to dilute it, in order to win a support of questionable value. History teems with examples of the disaster which inevitably attends such a course. We should be quixotic and fatuous indeed if we attempted anything of the kind. Such, briefly stated, are the main outlines of the reply which the average Socialist gives to the criticism of the class struggle doctrine described.

The class struggle theory is part of the economic interpretation of history. Since the dissolution of primitive tribal society, the modes of economic production and exchange have inevitably grouped men into economic classes. The theory is thus admirably stated by Engels in the Introduction to the Communist Manifesto:—

"In every historical epoch, the prevailing mode of economic production and exchange, and the social organization necessarily following from it, form the basis upon which is built up, and from which alone can be explained, the political and intellectual history of that epoch; and, consequently, the whole history of mankind (since the dissolution of primitive society, holding land in common ownership) has been a history of class struggles, contests between exploiting and exploited, ruling and oppressed classes; that the history of these class struggles forms a series of evolution in which, nowadays, a stage has been reached where the exploited and oppressed class—the proletariat—cannot attain its emancipation from the sway of the exploiting and ruling class—the bourgeoise—without, at the same time, and once and for all, emancipating society at large from all exploitation, oppression, class distinctions, and class struggles."[116]

In this classic statement of the theory, there are several fundamental propositions. First, that class divisions and class struggles arise out of the economic life of society. Second, that since the dissolution of primitive tribal society, which was communistic in character, mankind has been divided into economic groups or classes, and all its history has been a history of struggles between these classes, ruling and ruled, exploiting and exploited, being forever at war with each other. Third, that the different epochs in human history, stages in the evolution of society, have been characterized by the interests of the ruling class. Fourth, that a stage has now been reached in the evolution of society where the struggle assumes a form which makes it impossible for class distinctions and class struggles to continue if the exploited and oppressed class, the proletariat, succeeds in emancipating itself. In other words, the cycle of class struggles which began with the dissolution of rude, tribal communism, and the rise of private property, ends with the passing of private property in the means of social existence and the rise of Socialism. The proletariat in emancipating itself destroys all the conditions of class rule.


As we have already seen, slavery is historically the first system of class division which presents itself. Some ingenious writers have endeavored to trace the origin of slavery to the institution of the family, the children being the first slaves. It is fairly certain, however, that slavery originated in conquest. When a tribe was conquered and enslaved by some more powerful tribe, all the members of the vanquished tribe sunk to one common level of servility and degradation. Their exploitation as laborers was the principal object of their enslavement, and their labor admitted of little gradation. It is easy to see the fundamental class antagonisms which characterized slavery. Has there been no uprisings of the slaves, no active and conscious struggle against their masters, the antagonism of interests between them and their masters would be none the less apparent. But the overthrow of slavery was not the result of the rebellions and struggles of the slaves. While these undoubtedly helped, the principal factors in the overthrow of chattel slavery as the economic foundation of society were the disintegration of the system to the point of bankruptcy, and the rise of a new, and sometimes, as in the case of Rome, alien ruling class.

The class divisions of feudal society are not less obvious than those of chattel slavery. The main division, the widest gulf, divided the feudal lord and the serf. Often as brutally ill-treated as their slave-forefathers had been, the feudal serfs from time to time made abortive struggles. The class distinctions of feudalism were constant, but the struggles between the lords and the serfs were sporadic, and of comparatively little moment, just as the risings of their slave forefathers had been. But alongside of the feudal estate there existed another class, the free handicraftsmen and peasants, the former organized into powerful guilds. It was this class, and not the serf class, which was destined to challenge the rule of the feudal nobility, and wage war upon it. As the feudal class was a landed class, so the class represented by the guilds became a moneyed and commercial class, the pioneers of our modern capitalist class. As Mr. Brooks Adams[117] has shown very clearly, it was this moneyed, commercial class, which gave to the king the instrument for weakening and finally overthrowing feudalism. It was this class which built up the cities and towns from which was drawn the revenue for the maintenance of a standing army, thus liberating the king from his dependence upon the feudal lords. The capitalist class triumphed over the feudal nobility, and its interests became in their turn the dominant interests in society. Capitalism in its development effectually destroyed all those institutions of feudalism which obstructed its progress, leaving only those which were innocuous and safely to be ignored.

In capitalist society, the main class division is that which separates the employing, wage-paying class from the employed, wage-receiving class. Notwithstanding all the elaborate arguments made to prove the contrary, the frequently heard myth that the interests of Capital and Labor are identical, and the existence of pacificatory associations based upon that myth, there is no fact in the whole range of social phenomena more self-evident than the existence of an inherent, fundamental antagonism in the relationship of employer and employee. As individuals, in all other relations, they may have a commonality of interests, but as employer and employee they are fundamentally and necessarily opposed. They may belong to the same church, and so have religious interests in common; they may have common racial interests, as, for instance, if negroes, in protecting themselves against the attacks made in a book like The Clansman, or, if Jews, in opposing anti-Semitic movements; as citizens they may have the same civic interests, be equally opposed to graft in the city government, or equally interested in the adoption of wise sanitary precautions against epidemics. They may even have a common industrial interest in the general sense that they may be equally interested in the development of the industry in which they are engaged, and fear, equally, the results of a depression in trade. But their special interests as employer and employee are antithetical.

It cannot be denied that, in certain circumstances, these other interests may become so accentuated that the class antagonisms are momentarily lost sight of, or completely dwarfed in importance; nor is such a denial implied in the Socialist theory. It is not difficult to see that in the case of a general uprising against the members of their race, in which their lives are imperiled, Jewish employers and employees may forget their class interests and remember only that they are Jews. So with negroes and other oppressed races. The economic interests of the class may be engulfed in the solidarity of the race. It is not difficult, either, to see that in the presence of some great common danger or calamity, class interests may likewise be completely subordinated. An admirable example of this occurred at the time of the San Francisco earthquake and fire. The enormous demand for labor occasioned by that disaster practically enabled the artisans, most of whom were organized into unions, to demand and obtain almost fabulous wages. But there was no thought of taking advantage of the calamity. On the contrary, the unions immediately announced that they would make no attempt to do so. Not only that, but they voluntarily waived rules which in normal times they would have insisted upon with all their powers. The temporary overshadowing of the economic interests of classes by other special interests which have been thrust into special prominence, is not, however, evidence that these class interests do not prevail in normal times. Recognition of this fact effectually destroys much criticism of the theory.

The interest of the wage-worker, as wage-worker, is to receive the largest wage possible for the least number of hours spent in labor. The interest of the employer, as employer, on the other hand, is to secure from the worker as many hours of service, as much labor power, as possible for the lowest wage which the worker can be induced to accept. The workers employed in a factory may be divided by a hundred different forces. They may be divided by racial differences, for instance; but while preserving these differences in a large measure, they will tend to unite upon the basis of their economic interests. Some of the great labor unions, notably the United Mine Workers,[118] afford remarkable illustrations of this fact. If the difference of religious interests leads to division, the same unanimity of economic interests will sooner or later be developed. No impartial investigator who studies the influence of a great labor union which includes in its membership workers of various nationalities and adherents of various religious creeds, can fail to observe the fact that the community of economic interests which unites them is a powerful factor making for their amalgamation into a harmonious civic whole.

With the employers it is the same. They, too, may be divided by a hundred forces; the competition among them may be keen and fierce, but common economic interests will tend to unite them against the organizations of the workers they employ. Racial, religious, social, and other divisions and distinctions, may be maintained, but they will, in general, unite for the protection and furtherance of their common economic interests.

So much, indeed, belongs to the very primer stage of economic theory. Adam Smith is rather out of fashion nowadays, but there is still much in "The Wealth of Nations" which will repay our attention. No Socialist writer, not even Marx, has stated the fundamental principle of the antagonism between the employing and employed classes more clearly, as witness the following:—

"The workmen desire to get as much, the masters to give as little as possible. The former are disposed to combine in order to raise, the latter in order to lower the wages of labor.... Masters are always and everywhere in a sort of tacit, but constant and uniform, combination, not to raise the wages of labor above their actual rate. To violate this combination is everywhere a most unpopular action, and a sort of reproach to a master among his neighbors and equals.... Masters too sometimes enter into particular combinations to sink the wages of labor.... These are always conducted with the utmost silence and secrecy, till the moment of execution.... Such combinations, however, are frequently resisted by a contrary defensive combination of the workmen; who sometimes, too, without any provocation of this kind, combine of their own accord to raise the price of labor. Their usual pretenses are, sometimes the high price of provisions; sometimes the great profits which the masters make by their work. But whether these combinations be offensive or defensive, they are always abundantly heard of. In order to bring the point to a speedy decision, they have always recourse to the loudest clamor, and sometimes to the most shocking violence and outrage. They are desperate, and act with the extravagance and folly of desperate men, who must either starve, or frighten their masters into an immediate compliance with their demands. The masters upon these occasions are just as clamorous upon the other side, and never cease to call aloud for the assistance of the civil magistrate, and the rigorous execution of those laws which have been enacted with so much severity against the combinations of servants, laborers, and journeymen."[119]

Thus Adam Smith. Were it essential to our present purpose, it would be easy to quote from all the great economists in support of the Socialist claim that the interests of the capitalist and those of the laborer are irreconcilably opposed. That individual workers and employers will be found who do not recognize their class interests is true, but that fact by no means invalidates the contention that, in general, men will recognize and unite upon a basis of common class interests. In both classes are to be found individuals who attach greater importance to the preservation of racial, religious, or social, than to economic, interests. But because the economic interest is fundamental, involving the very basis of life, the question of food, clothing, shelter, and comfort, these individuals are and must be exceptions to the general rule. Workers sink their racial and religious differences and unite to secure better wages, a reduction of their hours of labor, and better conditions in general. Employers, similarly, unite to oppose whatever may threaten their class interests, without regard to other relationships. The Gentile who is himself an anti-Semite has no qualms of conscience about employing Jewish workmen, at low wages, to compete with Gentile workers; he does not object to joining with Jewish employers in an Employers' Association, if thereby his economic interests may be safeguarded. And the Jewish employer, likewise, has no objection to joining with the Gentile employer for mutual protection, or to the employment of Gentile workers to fill the places of his employees, members of his own race, who have gone out on strike for higher wages.


The class struggle, therefore, presents itself in the present stage of social development, in capitalist countries, as a conflict between the wage-paying and the wage-paid classes. That is the dominating and all-absorbing conflict of the industrial age in which we live. True, there are other class interests more or less involved. This is especially true in the United States with its enormous agricultural industry, to which the description of the industrial conflict cannot be applied. There are the indefinite, inchoate, vague, and uncertain interests of that large, so-called middle class, composed of farmers, retailers, professional workers, and so on. The interests of this large class are not, and cannot be, as definitely defined. They vacillate, conforming now to the interest of the wage-workers, now to the interest of the employers. Thus the farmer may oppose an increase in the wages of farm laborers, because that touches him directly as an employer. His relation to the farm laborer is substantially that of the capitalist to the city worker, and his attitude upon that question is the attitude of the capitalist class as a whole. At the same time, he may heartily favor an increase of wages for miners, carpenters, bricklayers, shoemakers, printers, painters, factory workers, and non-agricultural laborers in general, for the reason that while a general rise of wages, resulting in a general rise of prices, will affect him slightly as a consumer, and compel him to pay more for what he buys, it will benefit him much more as a seller of the products of his farm. In short, consciously very often, but unconsciously oftener still, personal or class interests control our thoughts, opinions, beliefs, and actions.

It is impossible with the data at our disposal at present to make such an analysis of our population as will enable us to determine the particular class interests of the various groups. Of the twenty-four million men and boys engaged in industry there are some six million farmers and tenants; three million seven hundred and fifty thousand farm laborers; eleven million mechanics, laborers, clerks, and servants; one million five hundred thousand professional workers, agents, and the like; and about two million employers, large and small. Accurately to place each of these groups is out of the question until such time as we have a much more detailed study of our economic life than has yet been attempted. We may, however, roughly relate some of the groups.

First: It is evident that the interests of the eleven million wage-earners are, as a whole, opposed to those of the employing class. There may be exceptions, as in the case of those whose very occupation as confidential agents of the capitalists, overseers, and the like, places them outside of the sphere of working-class interests. They may not receive a salary much above the wage of the mechanic, yet their function is such as to place them psychologically with the capitalists rather than with the workers. It is also evident that, while their interests may be demonstrably antagonistic to those of the employers, not all of the wage-earners will be conscious of that fact. The consciousness of class interests develops slowly among rural and isolated workers, especially as between the small employer and his employee. And even when there is the consciousness of antagonistic interests among these workers it is very difficult for them actively to express it. Hence they cannot play an important part in the actual conflict of classes.

Second: We may safely place the three million seven hundred and fifty thousand farm laborers, as regards their economic interests, with the general mass of wage-workers, with one important qualification. So far as they are in the actual relation of wage-paid laborers, hired by the month, week, or day, and bearing no other relation to their employers, they belong, in their economic interests, to the proletariat. But there are many farm laborers included in our enumeration who do not hold that relation to their employers. They are the sons of the farmers themselves, expecting to assume their fathers' positions, and their position as wage-paid laborers is largely nominal and fictitious. How many such there are it is impossible to ascertain with anything like certainty, and we can only say, therefore, that the position of the class, as such, must be determined without including these. But while this class has economic interests similar to those of the industrial proletariat, because of their isolation and scattered position, and because of the personal relations which they bear to their employers—farmer and laborer often working side by side, equally hard, and not infrequently having approximately the same standards of living—these cannot, to any very great extent, become an active factor in the class conflict in the same sense as the industrial wage-workers can, by engaging in strikes, boycotts, and other manifestations of the class war. Still, they may, and in fact do, play an important role in the political aspects of the struggle. Let a political movement of the proletariat arise and it will be found that these agricultural laborers will join it not less enthusiastically than their fellows from the factories in the cities. It would probably surprise most thoughtful Americans if they could see the organization maps in the offices of the Socialist Party of the United States, dotted with little red-capped pins denoting local organizations of the party. These are quite as common in the agricultural states as in the industrial states. So, too, in Germany. The movement is politically nearly as strong in the agrarian districts as elsewhere. This is a fact of vital significance, one which must not be lost sight of in studying the progress of Socialism in America.

Third: Of the exact position of the remaining groups it is very difficult to speak with anything like assurance. In an earlier chapter we have noticed the persistence of the small farm in America, and the fact that a class of small farmers forms a very important part of our population. As already observed, the economic condition of the small farmer is very often little, if any, superior to that of the laborers he employs. Elsewhere, I have shown that the actual income of the small farmer is not infrequently less than that of the hired laborer.[120] This is just as true of the small dealer, and the small manufacturer. But mere poverty of income, companionship in misery, the sharing of an equally poor existence, does not suffice to place the farmer in the proletarian class, as many Socialist writers have shown.[121] The small farmers constitute a distinct class. They are not, as the small dealers and manufacturers are, mere remnants of a disappearing class. The class is a permanent one, apparently, as much so as the class of industrial wage-workers. As a class it is just as essential to agricultural production as the industrial proletariat is essential to manufacture. It is thus a class analogous to the industrial proletariat, and Kautsky has well said that the small farmer is the "proletariat of the country." The exploitation of the small farmer is not direct, like that of the wage-worker by his employer, but indirect, through the great capitalist trusts and railroads. It also happens that these derive their chief income from the direct exploitation of the wage-workers, so that the small farmer and the wage-worker in the city factory have common exploiters. As they become conscious of this, the two classes will tend to unite their forces in the one sphere where such unity of action is possible, the sphere of political action.

This is also true, in some degree at least, of a considerable fraction of the one million five hundred thousand workers included in the professional and agent classes, and of the two million employers, the small dealers and manufacturers being included in this enumeration. That there is such a considerable fraction of each of these two classes whose interests lead them to make common cause with the proletariat is not at all a matter of theory or speculation, but of experience. These classes are represented very largely in the membership of the Socialist parties of this country and of Europe.


Although it is sometimes so interpreted, the theory that classes are based upon commonality of interests does not imply that men are never actuated by other than selfish motives; that a sordid materialism is the only motive force at work in the world. Marx and Engels carefully avoided the use of the word interests in such manner as to suggest that material interests control the course of history. They invariably used the term economic conditions, and the careful reader will not fail to perceive that although economic conditions produce interests which form the basis of class divisions, it is not unusual for men to act contrary to their personal interests as a result of existing conditions. In general, class interests and personal interests coincide, but there are certainly occasions when they conflict. Many an employer, having no quarrel with his employees and confident that he will be the loser thereby, joins in a fight upon labor unions because he is conscious that the interests of his class are involved. In a similar way, workingmen enter upon sympathetic strikes, consciously, at an immediate loss to themselves, because they place class loyalty before personal gain. It is significant of class feeling and temper that when employers act in this manner, and lock out employees with whom they have no trouble, simply to help other employers to win their battles, they are lauded by the very newspapers which denounce the workers when they adopt a like policy.

It is also true that there are individuals in both classes who never become conscious of their class interests, and steadfastly refuse to join with the members of their class. The workingman who refuses to join a union, or who "scabs" when his fellow-workers go out on strike, may act from ignorance or from sheer self-interest and greed. His action may be due to his placing personal interest before the larger interest of his class, or from being too shortsighted to see that ultimately his own interests and those of his class must merge. Many an employer, likewise, may refuse to join in any concerted action of his class for either of these reasons, or he may even rise superior to his class and personal interests and support the workers because he believes in the justness of their cause, realizing perfectly well that their gain means loss to him or to his class. This ought to be a sufficient answer to those shallow critics who think that they dispose of the class struggle theory of modern Socialism by enumerating those of its leading exponents who do not belong to the proletariat.

The influence of class environment upon men's beliefs and ideals is a subject which our most voluminous ethicists have scarcely touched upon as yet. It is a commonplace saying that each age has its own standards of right and wrong, but little effort has been made, if we except the Socialists, to trace this fact to its source, to the economic conditions prevailing in the different ages.[122] Still less effort has been made to account for the different standards held by the different social classes at the same time, and by which each class judges the others. In our own day the idea of slavery is generally held in abhorrence. There was a time, however, when it was almost universally looked upon as a divine institution, alike by slaveholder and slave. It is simply impossible to account for this complete revolution of feeling upon any other hypothesis than that slave-labor then seemed absolutely essential to the life of the world. The slave lords of antiquity, and, more recently, the Southern slaveholders in our own country, all believed that slavery was eternally right. When the slaves took an opposite view and rebelled, they were believed to be in rebellion against God and nature. The Church represented the same view just as vigorously as it now opposes it. The slave owners who held slavery to be a divine institution, and the priests and ministers who supported them, were just as honest and sincere in their belief as we are in holding antagonistic beliefs to-day.

What was accounted a virtue in the slave was accounted a vice in the slaveholder. Cowardice and a cringing humility were not regarded as faults in a slave. On the contrary, they were the stock virtues of the pattern slave and added to the estimation in which he was held, just as similar traits are valued in personal servants—butlers, waiters, valets, footmen, and other flunkies—in our own day. But similar traits in the slaveholder, or the "gentleman" of to-day, would be regarded as terrible faults. As Mr. Algernon Lee very tersely puts it, "The slave was not a slave because of his slavish ideals and beliefs; the slave was slavish in his ideals and beliefs because he lived the life of a slave."[123]

In the industrial world of to-day we find a similar divergence of ethical standards. What the laborers regard as wrong, the employers regard as absolutely and immutably right. The actions of the workers in forming unions and compelling unwilling members of their own class to join them, even resorting to the bitter expedient of striking against them with a view to starving them into submission, seem terribly unjust to the employers and the class to which the employers belong. To the workers themselves, on the other hand, such actions have all the sanctions of conscience. Similarly, many actions of the employers, in which they themselves see no wrong, seem almost incomprehensibly wicked to the workers.

Leaving aside the wholesale fraud of our ordinary commercial advertisements, the shameful adulteration of goods, and a multitude of other such nefarious practices, it is at once interesting and instructive to compare the employers' denunciations of "the outrageous infringement of personal liberty," when the "oppressor" is a labor union, with some of their everyday practices. The same employers who loudly, and, let it be said, quite sincerely, condemn the members of a union who endeavor to bring about the discharge of a fellow-worker because he declines to join their organization, have no scruples of conscience about discharging a worker simply because he belongs to a union, and so effectually "blacklisting" him that it becomes almost or quite impossible for him to obtain employment at his trade elsewhere. They do not hesitate to do this secretly, conspiring against the very life of the worker. While loudly declaiming against the "conspiracy" of the workers to raise wages, they see no wrong in an "agreement" of manufacturers or mine owners to reduce wages. If the members of a labor union should break the law, especially if they should commit an act of violence during a strike, the organs of capitalist opinion teem with denunciation, but there is no breath of condemnation for the outrages committed by employers or their agents against union men and their families.

During the great anthracite coal strike of 1903, and again during the disturbances in Colorado in 1904, it was evident to every fair-minded observer that the mine owners were at least quite as lawless as the strikers.[124] But there was hardly a scintilla of adverse comment upon the mine owners' lawlessness in the organs of capitalist opinion, while they poured forth torrents of righteous indignation at the lawlessness of the miners. When labor leaders, like the late Sam Parks, for example, are accused of extortion and receiving bribes, the employers and their retainers, through pulpit, press, and every other avenue of public opinion, denounce the culprit, the bribe taker, in unmeasured terms—but the bribe giver is excused, or, at worst, only lightly criticised. These are but a few common illustrations of class conscience. Any careful observer will be able to add almost indefinitely to the number.

It would be easy to compile a catalogue of such examples as these from the history of the past few years sufficient to convince the most skeptical that class interests do produce a class conscience. Mr. Ghent aptly expresses a profound truth when he says: "There is a spiritual alchemy which transmutes the base metal of self-interest into the gold of conscience; the transmutation is real, and the resulting frame of mind is not hypocrisy, but conscience. It is a class conscience, and therefore partial and imperfect, having little to do with absolute ethics. But partial and imperfect as it is, it is generally sincere."[125] No better test of the truth of this can be made than by reading carefully for a few weeks the comments of half a dozen representative capitalist newspapers, and of an equal number of representative labor papers, upon current events. The antithetical nature of their judgments of men and events demonstrates the existence of a distinct class conscience. It cannot be interpreted in any other way.


A great many people, while admitting the important role class struggles have played in the history of the race, strenuously deny the existence of classes in the United States. They freely admit the class divisions and struggles of the Old World, but deny that a similar class antagonism exists in this country; they fondly believe the United States to be a glorious exception to the rule, and regard the claim that classes exist here as falsehood and treason. The Socialists are forever being accused of seeking to apply to American life judgments based upon European facts and conditions. It is easy to visualize the class divisions of monarchical countries, where there are hereditary ruling classes—even though these are only nominally the ruling classes in most cases—fixed by law. But it is not so easy to recognize the fact that, even in these countries, the power is held by the financial and industrial lords, and not by the kings and their titular nobility. The absence of a hereditary, titular ruling class serves to hide from many people the real class divisions existing in this country.

Nevertheless, there is a perceptible growth of uneasiness and unrest; a widening and deepening conviction that while we may retain the outward forms of democracy, and shout its shibboleths with patriotic fervor, its essentials are lacking. The feeling spreads, even in the most conservative circles, that we are developing, or have already developed, a distinct ruling class. The anomaly of a ruling class without legal sanction or titular prestige has seized upon the popular mind; titles have been created for our great "untitled nobility"—mock titles which have speedily assumed a serious import and meaning. Our financial "Kings," industrial "Lords," "Barons," and so on, have received their crowns and patents of nobility from the populace. President Roosevelt gives expression to the serious thought of our most conservative citizenry when he says: "In the past, the most direful among the influences which have brought about the downfall of republics has ever been the growth of the class spirit.... If such a spirit grows up in this republic, it will ultimately prove fatal to us, as in the past it has proven fatal to every community in which it has become dominant."[126]

With the exception of the chattel slaves, we have had no hereditary class in this country with a legally fixed status. But

"Man is more than constitutions,"

and there are other laws than those formulated in senates and recorded in statute books. The vast concentration of industry and wealth, resulting in immense fortunes on the one hand, and terrible poverty on the other, has separated the two classes by a chasm as deep and wide as ever yawned between czar and moujik, kaiser and vagrant, prince and pauper, feudal baron and serf. The immensity of the power and wealth thus concentrated into the hands of the few, to be inherited by their sons and daughters, tends to establish this class division hereditarily. Heretofore, passage from the lower class to the class above has been comparatively easy, and it has blinded people to the existing class antagonisms, though, as Mr. Ghent justly observes, it should no more be taken to disprove the existence of classes than the fact that so many thousands of Germans come to this country to settle is taken to disprove the existence of the German Empire.[127] The stereotyping of classes is undeniable. That a few men pass from one class to another is no disproof of this. The classes exist and the tendency is for them to remain permanently fixed, as a whole, in our social life.

But passage from the lower class to the upper tends to become, if not absolutely impossible and unthinkable, at least practically impossible, and as difficult and rare as the transition from pauperism to princedom in the Old World is. A romantic European princess may marry a penurious coachman, and so provide the world with a nine days' sensation, but such cases are no rarer in the royal courts of Europe than in our own plutoaristocratic court circles. Has there ever been a king in modern times with anything like the power of Mr. Rockefeller? Is any feature of royal recognition withheld from Mr. Morgan when he goes abroad in state, an uncrowned king, fraternizing with crowned but envious fellow-kings? The existence of classes in America to-day is as evident as the existence of America itself.


Antagonisms of class interests have existed from the very beginning of civilization, though not always recognized. It is only the consciousness of their existence, and the struggle which results from that consciousness, that are new. As we suddenly become aware of the pain and ravages of disease, when we have not felt or heeded its premonitory symptoms, so, having neglected the fundamental class division of society, the bitterness of the strife resulting therefrom shocks and alarms us. So long as it is possible for the stronger and more ambitious members of an inferior class to rise out of that class and join the ranks of a superior class, so long will the struggle which ensues as the natural outgrowth of opposing interests be postponed.

Until quite recently, in the United States, this has been possible. Transition from the status of wage-worker to that of capitalist has been easy. But with the era of concentration and the immense capitals required for industrial enterprise, and the exhaustion of our supply of free land, these transitions become fewer and more difficult, and class lines tend to become permanently fixed. The stronger and more ambitious members of the lower class, finding it impossible to rise into the class above, thus become impressed with a consciousness of their class status. The average worker no longer dreams of himself becoming an employer after a few years of industry and thrift. The ambitious and aggressive few no longer look with the contempt of the strong for the weak upon their less aggressive fellow-workers, but become leaders, preachers of a significant and admittedly dangerous gospel of class consciousness.

President Roosevelt has assailed the preachers of class consciousness with all the energy of a confirmed moralizer. It is evident, however, that he has never taken the trouble to study either the preachers or their gospel. Never in his utterances has there been any hint given of a recognition of the fact that there could be no preaching of class consciousness had there been no classes. Never has he manifested the faintest recognition of the existence of conditions which develop classes, out of which the class consciousness of the propagandists springs naturally. He does not see that there is danger only when the preachers are not wise enough, nor sufficiently educated to see their position in its historical perspective; when in blind revolt they engender class hatred, personal hatred of the capitalist by the worker. But when there is the historical perspective, wisdom to see that economic conditions develop slowly, and that the capitalist is no more responsible for conditions than the worker, there is not only no personal hatred for the capitalist engendered, but, more important still, the workers get a new view of the relationship of the classes, and their efforts are directed to the bringing about of peaceful change.

The Socialists, accused as they are of seeking to stir up hatred and strife, by placing the class struggle in its proper light, as one of the great social dynamic forces, have done and are doing more to allay hatred and bitterness of feeling, and to save the world from the red curse of anarchistic vengeance, than all the Rooseveltian preaching in which thousands of venders of moral platitudes are engaged. The Socialist movement is vastly more powerful as a force against Anarchism, in its violent manifestations, than any other agency in the world. Wherever, as in Germany, the Socialist movement is strong, Anarchism is impotent and weak. The reason for this is the very obvious one here given. Class divisions are not created by Socialists, but developed in the womb of economic conditions. Class consciousness is not something which Socialism has developed. Before there was a Socialist movement, in the days of Luddite attacks upon machinery, and Captain Swing's rick-burners, there was class consciousness expressed in class revolt. Modern Socialism simply takes the class consciousness of the worker and educates it to see the futility of machine-destroying, or other foolish and abortive attacks upon capitalists and their property, and organizes it into a political movement for the peaceful transformation of society.


Nowhere in the world, at any time in its history, has the antagonism of classes been more evident than in the United States at the present time. With an average of over a thousand strikes a year,[128] some of them involving, directly, tens of thousands of producers, a few capitalists, and millions of noncombatants, consumers; with strikes like this, boycotts, lockouts, injunctions, and all the other incidents of organized class strife reported daily by the newspapers, denials of the existence of classes, or of the struggle between them, are manifestly absurd. We have, on the one hand, organizations of workers, labor unions, with a membership of something over two million in the United States; one organization alone, the American Federation of Labor, having an affiliated membership of one million seven hundred thousand. On the other hand, we have organizations of employers, formed for the expressed purpose of fighting the labor unions, of which the National Association of Manufacturers is the most perfect type yet evolved.

While the leaders on both sides frequently deny that their organizations betoken the existence of a far-reaching fundamental class conflict, and, through ostensibly pacificatory organizations like the National Civic Federation, proclaim the "essential identity of interests between capital and labor"; while an intelligent and earnest labor leader like Mr. John Mitchell joins with an astute capitalist leader like the late Senator Marcus A. Hanna in declaring that "there is no necessary hostility between labor and capital," that there is no "necessary, fundamental antagonism between the laborer and the capitalist,"[129] a brief study of the constitutions of these class organizations, and their published reports, in conjunction with the history of the labor struggle in the United States, in which the names of Homestead, Hazelton, Coeur d'Alene and Cripple Creek appear in bloody letters, will show these denials to be the offspring of hypocrisy or delusion. If this much-talked-of unity of interests is anything but a stupid fiction, the great and ever increasing strife is only a matter of mutual misunderstanding. All that is necessary to secure permanent peace is to remove that misunderstanding. If we believe this, it is a sad commentary upon human limitations, upon man's failure to understand his own life, that not a single person on either side has arisen with sufficient intelligence and breadth of vision to state the relations of the two classes with clarity and force enough to accomplish that end, to make them understand each other.

Let us get down to fundamental principles.[130] Why do men organize into unions? Why was the first union started? Why do men pay out of their hard-earned wages to support unions now? The first union was not started because the men who started it did not understand their employers, or because they were misunderstood by their employers. The explanation involves a deeper insight into things than that. When the individual workingman, feeling that from the labor of himself and his fellows came the wealth and luxury of his employer, demanded higher wages, a reduction of the hours of labor, or better conditions in general, he was met with a reply from the employer—who understood the workingman's position very well, much better, in fact, than the workingman himself did—something like this, "If you don't like this job, and my terms, there are plenty of others outside ready to take your place." The workingman and the employer, then, understood each other perfectly. The employer understood the position of the worker, that he was dependent upon him, the employer, for opportunity to earn his bread. The worker understood that so long as the employer could discharge him and fill his place with another, he was powerless. The combat between the workers and the masters of their bread has from the first been an unequal one.

Nothing remained for the individual workingman but to join with his fellows in a collective and united effort. So organizations of workers appeared, and the employers could not treat the demands for higher wages or other improvements in conditions as lightly as before. The workers, when they organized, could take advantage of the fact that there were no organizations of the employers. Every strike added to the ordinary terrors of the competitive struggle for the employers. The manufacturer whose men threatened to strike often surrendered because he feared most of all that his trade, in the event of a suspension of work, would be snatched by his rival in business. So, by playing upon the inherent weakness of the competitive system as it affected the employers, the workers gained many substantial advantages. There is no doubt whatsoever that under these conditions the wage-workers got better wages, better working conditions, and a reduction in the hours of labor. It was in many ways the golden age of trade unionism. But there was an important limitation of the workers' power—the unions could not absorb the man outside; they could not provide all the workers with employment. That is an essential condition of capitalist industry, there is always the "reserve army of the unemployed," to use the expressive phrase of Friederich Engels. Rare indeed are the times when all the available workers in any industry are employed, and the time has probably never yet been when all the available workers in all industries were employed.

Notwithstanding this important limitation of power, it is incontrovertible that the workers were benefited by their organization. But only for a time. There came a time when the employers began to organize unions also. That they called their organizations by other and high-sounding names does not alter the fact that they were in reality unions formed to combat the unions of the workers. Every employers' association is, in reality, a union of the men who employ labor against the unions of the men they employ. When the organized workers went to individual, unorganized employers, who feared their rivals more than they feared the workers, or, rather, who feared the workers most of all because rivals waited to snatch their trade, a strike making their employees allies with their competitors, the employers were easily defeated. The workers could play one employer against another employer with constant success. But when the employers also organized, it was different. Then the individual employer, freed from his worst terrors, could say, "Do your worst. I, too, am in an organization." Then it became a battle betwixt organized capital and organized labor. When the workers went out on strike in one shop or factory, depending upon their brother unionists employed in other shops or factories, the employers of these latter locked them out, thus cutting off the financial support of the strikers. In other cases, when the workers in one place went out on strike, the employer got his work done through other employers, by the very fellow-members upon whom the strikers were depending for support. Thus the workers were compelled to face this dilemma, either to withdraw these men, thus cutting off their financial supplies, or to be beaten by their own members.

Under these changed conditions, the workers were beaten time after time. It was a case of the worker's cupboard against the master's warehouse, purse against bank account, poverty against wealth. The workers' chances are slight in such a combat! A strike means that the employers on one side, and the workers on the other, seek to force each other to surrender by waiting patiently to see who first feels the pinch of hardship and poverty. Employers and employees determine to play the waiting game. Each waits patiently in the hope that the other will weaken. At last one—most often the workers'—side weakens and gives up the struggle. When the workers are thus beaten in a strike, they are not convinced that their demands are unreasonable or unjust; they are simply beaten because their resources are too small to enable them to stand the struggle.

When the master class, the masters of jobs and bread, organized their forces, they set narrow and sharp boundaries to the power of labor organizations. Henceforth the chances of victory were overwhelmingly on the side of the employers. The workers learned by bitter and costly experience that they could not play the interests of individual employers against other employers' interests. Meantime, too, they have learned that they are not only exploited as producers, but also as buyers, as consumers. For long, dominated by economic theories, the Socialists refused to recognize this aspect of the labor struggle, though the workers felt it strongly enough. They set their fine-spun theories against the facts of life. Their contention was that wages being determined by the cost of living, it mattered nothing how much or how little the workers got in wages, the cost of living and wages adjusted themselves to each other. But in actual experience the workers found that when prices fall, wages are quick to follow, whereas when prices soar high, wages are slow to follow. Wages climb with leaden feet when prices soar with eagle wings. Because the workers are consumers, almost to the last penny of their incomes, having to spend practically every penny earned, that form of exploitation becomes a serious matter.

But against this exploitation the unions have ever been absolutely powerless. Workingmen have never made any very serious attempt to protect the purchasing capacity of their wages, notwithstanding its tremendous importance.[131] The result has been that not a few of the "victories" so dearly won by trade union action have turned out to be hollow mockeries. When better wages have been secured, prices have often gone up, most often, in fact, so that the net result has been little to the advantage of the workers. In many cases, where the advance in wages applied only to a restricted number of trades, the advance in prices becoming general, the total result has been against the working class as a whole, and little or nothing to the advantage of the few who received the advance in immediate wages. At this point, the need is felt of a social revolution, not a violent revolution, be it understood, but a comprehensive social change which will give to the workers the control of the implements of labor, and also of the product of their labor. In other words, the demand arises for independent, working-class action, aiming at the socialization of the means of production and the product.


A line of cleavage thus presents itself between those, on the one hand, who would continue the old methods of economic warfare, together with the advocates of physical force, and, on the other hand, the advocates of united political action by the working class, consciously directed toward the socialization of industry and its products. The measure of the crystallization of this latter force is represented by the strength of the political Socialist movement. Whoever has studied the labor movement during the past few years must have realized that there is a tremendous drift of sentiment in favor of that policy in the labor unions of the country. The clamor for political action in the labor unions presages an enormous advance of the political Socialist movement during the next few years.

The struggle between the capitalist and working classes must become a political issue, the supreme political issue. This must result, not only because the collective ownership of property can best be brought about by political methods, but also because the capitalists themselves have taken the industrial struggle into the political arena to suit themselves; and when the workers realize the issue and accept it, the capitalists will not be able to resist them. One is reminded of the saying of Marx that capitalism produces its own gravediggers. In taking the industrial issue into the political sphere, to suit their own immediate advantages, the capitalists were destined to reveal to the workers, sooner or later, their power and opportunity.

Realizing that all the forces of government are on their side, the legislative, judicial, and executive powers being controlled by their own class, the employers have made the fight against labor political as well as economic in its character. When the workers have gone on strike and the employers have not cared to play the "waiting game," choosing rather to avail themselves of the great reserve army of unemployed workers outside, the natural resentment of the strikers, finding themselves in danger of being beaten by members of their own class, has led to violence which has been remorselessly suppressed by all the police and military forces at the command of the government. In many instances, the employers have purposely provoked striking workers to violence, and then called upon the government to crush the revolt thus made. Workers have been shot down at the shambles in almost every state, no matter which political party has been in power. Nor have these forces of our class government been used merely to punish lawless union men and women on strike, to uphold the "sacred majesty of the law," as the hypocritical phrase goes. They have been also used to deny strikers the rights which belonged to them, and to protect capitalists and their agents in breaking the laws. No one can read with anything like an impartial spirit the records of the miners' strike in the Coeur d'Alene mine, Idaho, or the labor disturbances in the state of Colorado from 1880 to 1905 and dispute this assertion.

Most important of all has been the powerful opposition of the makers and interpreters of the law. A body of class legislation, in the interests of the employing class, has been created, while the workers have begged in vain for protective legislation. In no country of the world have the interests of the workers been so neglected as in the United States. There is practically no such thing as employers' liability for accidents to workers; no legislation worthy of mention relating to occupations which have been classified as "dangerous" in most industrial countries; women workers are sadly neglected. Whenever a law of distinct advantage to the workers in their struggle has been passed, a servile judiciary has been ready to render it null and void by declaring it to be unconstitutional. No more powerful blows have ever been directed against the workers than by the judiciary. Injunctions have been issued, robbing the workers of the most elemental rights of manhood and citizenship. They have forbidden things which no law forbids, and even things which the Constitution and statute law declare to be legal.

Mr. John Mitchell refers to this subject, in strong but not too strong terms. "No weapon," he says, "has been used with such disastrous effect against trade unions as the injunction in labor disputes. By means of it, trade unionists have been prohibited under severe penalties from doing what they had a legal right to do, and have been specifically directed to do what they had a legal right not to do. It is difficult to speak in measured tones or moderate language of the savagery and venom with which unions have been assailed by the injunction, and to the working classes, as to all fair-minded men, it seems little less than a crime to condone or tolerate it."[132] This is strong language, but who shall say that it is too strong when we remember the many injunctions which have been hurled at organized labor since the famous Debs case brought this weapon into general use?

In this celebrated case, which grew out of the Pullman strike, in 1894, Eugene V. Debs, president of the American Railway Union, was arrested and arraigned on indictments of obstructing the mails and interstate commerce. Although arraigned, he was not tried, the case being abandoned, despite his demands for a trial. President Cleveland's strike commission subsequently declared, "There is no evidence before the commission that the officers of the American Railway Union at any time participated in or advised intimidation, violence, or destruction of property." Realizing that it had no sort of evidence upon which a jury might be hoped to convict, a new way was found. Debs and his officers were enjoined in a famous "blanket" injunction directed against Debs and all other officials of the union, and "all persons whomsoever." For an alleged violation of that injunction, Judge Woods, without trial by jury, sentenced Debs to six months' imprisonment and his associates to three months'. The animus and class bias of the whole proceeding may be judged from the fact that President Cleveland selected to represent the United States Government, at Chicago, Mr. Edwin Walker, general counsel at that very time for the General Managers' Association, representing the twenty-four railroads centering or terminating in Chicago. And these railroads were operating in violation of the Sherman Anti-Trust Law at the time.[133]

In 1899 an injunction was issued out of the United States Circuit Court of West Virginia against "John Smith and others," without naming the "others," in the interest of the Wheeling Railway Company. Two men, neither of them being John Smith, nor found to be the agent of "John Smith and others," were jailed for contempt of court![134] In 1900 members of the International Cigarmakers' Union, in New York City, were enjoined by Justice Freeman, in the Supreme Court, from even approaching their former employers for the purpose of attempting to arrange a peaceable settlement! The cigarmakers were further enjoined from publishing their grievances, or in any manner making their case known to the public, if the tendency of that should be to vex the plaintiffs or make them uneasy; from trying, even in a peaceful way, in any place in the city, even in the privacy of a man's own home, to persuade a new employee that he ought to sympathize with the union cause sufficiently to refuse to work for unjust employers; and, finally, the union was forbidden to pay money to its striking members to support them and their families. In the great steel strike of 1901, the members of the Amalgamated Association of Iron and Steel Workers were enjoined from peaceably discussing the merits of their claim with the men who were at work, even though the latter might raise no objection. In Pennsylvania, in the case of the York Manufacturing Company vs. Obedick, it was held that workmen had "no legal right" to persuade or induce other workmen to quit, or not to accept, employment.[135] In the strike of the members of the International Typographical Union against the Buffalo Express, the strikers were enjoined from discussing the strike, or talking about the paper in any way which might be construed as being against the paper. If one of the strikers advised a friend not to buy a "scab" paper, he was liable under the terms of that injunction to imprisonment for contempt of court. The members of the same union were, in the case of the Sun Printing and Publishing Company vs. Delaney and others, enjoined by Justice Bookstaver, in the Supreme Court of New York, from publishing their side of the controversy with the Sun as an argument why persons friendly to organized labor should not advertise in a paper hostile to it. In 1906 members of the same union were enjoined by Supreme Court Justice Gildersleeve from "making any requests, giving any advice, or resorting to any persuasion ... to overcome the free will of any person connected with the plaintiff [a notorious anti-union publishing company] or its customers as employees or otherwise."[136]

These are only a few examples of the abuse of the injunction in labor disputes, hundreds of which have been granted, many of them equally subversive of all sound principles of popular government. There is probably not another civilized country in which such judicial tyranny would be tolerated. It is not without significance that in West Virginia, where, as a result of an outcry against a number of particularly glaring abuses of the power to issue injunctions, the legislature passed a law limiting the right to issue injunctions, the Supreme Court decided that the law was unconstitutional, upon the ground that the legislature had no right to attempt to restrain the courts which were cooerdinate with itself.

Even more dangerous to organized labor than the injunction is what is popularly known by union men as "Taff Vale law." Our judges have not been slow to follow the example set by the English judges in the famous case of the Taff Vale Railway Company against the officers of the Amalgamated Society of Railway Servants, a powerful labor organization. The decision in that case was most revolutionary. It compelled the workers to pay damages, to the extent of $115,000, to the railroad company for losses sustained by the company through a strike of its employees, members of the defendant union. That decision struck terror into the hearts of British trade unionists. At last they had to face a mode of attack even more dangerous than the injunction which their transatlantic brethren had so long been contending against. Taff Vale law could not long be confined to England. Very soon, our American courts followed the English example. A suit was instituted against the members of a lodge of the Machinists' Union in Rutland, Vermont, and the defendants were ordered to pay $2500. A writ was served upon each member and the property of every one of them attached. Since that time, numerous other decisions of a like nature have been rendered in various parts of the country. Thus the unions have been assailed in a vital place, their treasuries. It is manifestly foolish and quite useless for the members of a union to strike against an employer for any purpose whatever, if the employer is to be able to recover damages from the union. Taff Vale judge-made law renders the labor union hors de combat at a stroke.

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