institution. In most countries the telegraph is publicly owned and has been annexed to the post, to which it is very closely related in purpose. National ownership of railroads is the rule, and our policy of private ownership the great exception in the world to-day. Many persons, even some in railroad circles, believe that national ownership of railroads is sure to develop out of our present policy of regulation.
The national improvements connected with rivers and harbors were first political–that is, they were for the use of the government’s navy; they became, secondly, commercial–for the free use of all citizens engaged in trade; and they continue to unite these two characters. Forestry is most largely undertaken in this country by the national government, partly because some forest areas in the West extend over state boundaries, and largely because large tracts of public forest lands were still unsold at the time public attention was attracted to the subject. Since 1890, the policy of reserving great areas for forests, and picturesque districts for national parks, has developed greatly in the United States. The national forest area contained in the various forests in 20 states (not including Alaska and Porto Rico), now covers about 225,000 square miles, equal in area to five states of the size of Pennsylvania. There are, besides, fourteen large national parks, ranging in size from a few hundred acres up to over 2,140,000 acres (the area of the Yellowstone National Park), and aggregating 4,600,000 acres, nearly the size of Massachusetts or of New Jersey, besides numerous other national reservations for monuments and antiquities.
In some countries mines are thought to be peculiarly fitted for national ownership and control. In the German Empire the several states own coal, salt, and other mines. Coinage and banking are everywhere looked upon as functions of sovereignty, and yet it is no more necessary for a nation to own its own mint in order to control the monetary system than for it to print the banknotes in order to regulate their issue. The American government has its own printing office. The fish commission, and the various branches of the department, cooeperate with private industry in many ways. This brief survey suggests that the industries undertaken by government are both varied in nature and large in extent, altho small in proportion to the mass of private industry.
Sec. 12. #Economic basis of public ownership#. The question as to the proper limits of public ownership is one most actively debated. The movement is progressing in accordance with the principle that public ownership is economically justified wherever it secures a product or service of widespread use that would otherwise be impossible, or insures the public a better quality or a lower price. The question of public ownership is not exclusively an economic question. There are incidental problems, such as its effects on enterprise and on political integrity, with which it is not possible here to deal. In the main, however, public ownership is simply a business policy which must be justified by its economic results. In the case of a general social benefit not to be secured without public ownership (as popular education or the climatic effect of forests), the only question to answer is whether the utility is worth the cost. In the case of industries already in private hands, as waterworks, gas and electric lighting, there is needed, to make a wise decision possible, a knowledge of the effect a change to public ownership will have upon cost and service. If public officials can furnish some goods cheaper than they are furnished by private enterprise, it is because of the wide margin of monopoly profit, not because there is any magic in public ownership. The same general items of cost must be met. The first cost of the plant and the annual interest payments are much the same. Experience shows that, because of political influence and of public opinion, wages are likely to be higher under public ownership, but salaries for management lower. Public collection of dues along with taxes is an advantage not enjoyed by private companies. Several public officials sometimes share the same office and thus reduce expenses. In small towns the public electric lighting and waterworks have been operated more economically under one roof. Some items of cost may be less under public management, but on the whole, public industry probably has no advantage in these respects. Public industry does not have to meet the costs of lobbying and blackmail which are often forced upon private companies. But the greatest source of saving in public ownership is the value of monopoly privileges that, under private management, go into private pockets.
The temptation of political corruption may be more insistent when a large force of men is constantly employed, and when large supplies are constantly purchased, by public officials, but the temptation is not so strong or so centralized as it is in the granting of franchises to wealthy corporations. Public industry is weakened by the absence of certain motives to excellence that are present in private business. The income of public officials not being dependent on the economy of management, the spur and motives of competitive industry are lacking. No social discovery has made individual honesty and civic virtue useless to good government.
The decision in any specific case is one dependent on local conditions, and the exact limits of public ownership are not fixed. Industry is changing so rapidly that new adjustments are made every year. The main outlines of public ownership, however, are now in large part determined. Some industries do well, others ill, under public management, and between these lie many debatable cases. Waterworks and probably electric lighting, because of the comparative simplicity of their operation, are more suitable for public ownership than are gas works. No absolute line divides the one group from the other. But whatever the changes, the fact can not be ignored that the increase of public ownership is altering in manifold ways the organization of industry, and is reacting upon the production of wealth, and the distribution of incomes.
[Footnote 1: See above, ch. 16, sec. 5.]
[Footnote 2: See above, ch. 16, sec. 2, on the police function.]
[Footnote 3: See ch. 16, secs. 3 and 4.]
[Footnote 4: See above, ch. 16, sec. 5, statistics of receipts from public service enterprises.]
CHAPTER 31
SOME ASPECTS OF SOCIALISM
Sec. 1. The distribution of incomes. Sec. 2. Distribution by force and by status. Sec. 3. Social effects of the right to transmit property. Sec. 4. Effects of the right to inherit property. Sec. 5. Broader social effects of inheritance. Sec. 6. Limitations upon intestate inheritance. Sec. 7. Some merits of competition. Sec. 8. Wide acceptance of competition. Sec. 9. “Economic harmonies” and discords. Sec. 10. Competition modified by charitable distribution. Sec. 11. Competition modified by authoritative distribution. Sec. 12. Meanings of socialism. Sec. 13. Philosophic socialism. Sec. 14. Socialism in action. Sec. 15. Origin of the radical socialist party. Sec. 16. The two pillars of “scientific” socialism. Sec. 17. Aspects of the materialistic philosophy of history. Sec. 18. Utopian nature of “scientific” socialism. Sec. 19. Its unreal and negative character. Sec. 20. Revisionism and opportunism in the socialist party. Sec. 21. Alluring claims of party-socialism. Sec. 22. Growth and nature of the socialist vote. Sec. 23. Economic legislation and the political parties.
Sec. 1. #The distribution of incomes#. The great economic progress of the past two centuries has been mainly in lines of technical production. The developing natural sciences and mechanic arts have given men a marvelously increased control over forces and materials. This has multiplied the quantities of goods of most kinds at the disposal of men, collectively considered. All men, with rare exceptions, have been gainers; but the increased production has been very unequally distributed among the members of the community. More and more insistently the plea and the demand have been made for better methods of distribution that will give to the masses of the people a larger share of the goods produced. Production is largely a problem of the technical arts; distribution is a problem of social economy.
Two aspects of distribution may be distinguished: functional distribution is the attribution of value (yields) to wealth and labor considered impersonally, as groups of productive agents; and personal distribution is the actual movement of incomes into the control of persons.[1] Personal incomes, whether monetary, real, or psychic, are the sum of a number of elements. Some parts are due to services performed by the person himself. When one combs his own hair he is performing for himself a service that is a part of his income. Benjamin Franklin said it was better to teach a boy to shave himself than to give him a thousand dollars with which to pay barbers for a life-time. Other parts of income are the uses and fruits of legally controlled wealth; chance finds, as gifts of value or lost and abandoned goods; goods assigned to one by authority; wealth inherited; illegal gains by robbery; goods secured on credit; gifts either of things or of services. The many methods by which incomes are distributed to the persons making up a society may be grouped in the following five general classes: force, status, charity, competition, and authority. These will be discussed in due order.
Sec. 2. #Distribution by force and by status.# Distribution by force is the most primitive mode of distribution. The stronger takes from the weaker. Forceful distribution still persists in the form of crime, and if we include fraud within the term it still affects an enormous amount of income. The lawless take whatever they can, and the supporters and officers of the law do what they can to check the acts. Slavery is distribution by force, as is the levying of war indemnities from a conquered people.
Distribution may be by status, or set rules and customs. In this case men receive incomes that are independent of their efforts and outside of their control. Distribution by status is guided neither by the personal merit of the recipients nor by the value of their direct services, but the merits and acts of men not living. Feudal society was built on status. Men were born to certain privileges and positions; they inherited property which could neither be bought nor sold; they followed trades which could rarely be entered by any outside of favored families. Caste in India and in other Oriental countries regulates a large part of the life of the people.
This method still prevails to a greater extent in our society than is usually recognized.[2] By public opinion and by prejudice, status is still maintained in respect to the choice of occupations even where the law has formally abolished it, as is seen in modern race problems, in western countries to-day inheritance of property is the main legal form of status and it shades off into other forms of distribution. Private property must find its justification in social expediency.[3] There is no feature of it that is more questioned than is the right of inheritance.
Sec. 3. #Social effects of the right to transmit property.# The right to transmit property by inheritance or by bequest may be judged with reference to its effects upon the giver, upon the receiver, and upon society at large. It is well to take these three points of view. The right to dispose of property either during life or at death has undoubtedly in many ways a good effect upon the character of men. It stimulates the husband and father to provide for his wife and children, and spurs others to continued economic activity. There is a joy in giving, a joy in the power to bestow one’s wealth upon those one loves, or as one pleases. Much of the existing wealth probably never would have been created if men had not had this right. But there is a limit to the working of this motive, and other motives often are more effective. Many a man after gaining a competence continues to work for love of wealth and power in his own lifetime, as the miser continues to toil for love of gold. When men without families die wealthy, when men not having the slightest interest in their nearest relatives labor till their dying days to amass wealth, it is evident that the right to bequeath property has little to do with their efforts. Love of accumulation and love of power in these cases supply the motives. A more limited liberty to dispose of property at death might still suffice, therefore, to call out the greater part of the efforts now made to accumulate property.
Sec. 4. #Effects of the right to inherit property#. That the effects upon the receiver of the property are good is somewhat more doubtful. It is true that children reared in families of large incomes would be great sufferers if plunged into poverty at the death of their parents. There is much social justification for permitting families to maintain an accustomed standard of comfort. Few would deny that provision by parents to provide education and opportunity for their children is commendable and desirable. But the evil effects of waiting for dead men’s shoes are proverbial. Many a boy’s greatest curse has been his father’s fortune. Many a man of native ability waits idly for fortune to come and lets opportunities for self-help slip by unheeded. The world often exclaims over the failure of the sons of noted men to achieve great things, for, despite confusing evidence, men still have faith in biologic heredity. A too easy fortune saps ambition and relaxes energy; and thus rich men’s sons, if not most carefully and wisely trained, are often made paupers in spirit, while the self-made fathers think their boys have better opportunities than they themselves enjoyed. The greater social loss is not the dissipated fortunes, but the ruined characters. Andrew Carnegie said that it would be a good thing if every boy had to start in poverty and make his own way. Cecil Rhodes recorded in his will his contempt for the idle, expectant heir.
Sec. 5. #Broader social effects of inheritance#. Inheritance has good effects for the community insofar as it helps to secure efficient management of wealth. If the son or relative has been in business with the deceased, there is a reason that he should inherit the property, and his succession to it makes the least disturbance to existing business conditions. This consideration, however, has less weight as the corporate form of organization becomes well nigh universal in “big business.” Every profligate son, every incompetent heir, is an argument against the inheritance of property. It is to society’s interest that no able-bodied member should stand idle. Every child should have presented to him the motive to use his powers in useful ways. Moreover, many feel that the great fortunes now accumulating through successive generations in the hands of a few families are a danger to our free society, even if these fortunes should continue to be well administered. There is a widespread feeling that the heredity of great wealth is, like the heredity of political power, out of harmony with the democratic spirit. Democracy wishes to see men and individuals put to the test, not profiting forever by the deeds of their forebears. This feeling is shared by those who cannot be charged with radical prejudices. It was startling when a conservative body of lawyers meeting in their state association in Illinois, passed a resolution favoring moderate limits to inherited fortunes. Almost every year sees bills of this purport introduced in the legislatures and in Congress. Probably no one of many current radical proposals is more widely favored than this, among men of otherwise conservative social views. Tho sum most often mentioned as the proper limit is $1,000,000, but in every case it is a sum larger than the fortune of the person speaking.[4]
Sec. 6. #Limitations upon intestate inheritance#. A proposal less crude and with strong reasons of social expediency in its favor is to limit the right of intestate inheritance to persons that have been in essential economic and social relations with the deceased. The foregoing considerations show that the case for the right of gift in the lifetime of the giver is strongest; that for the right of bequest comes next. The man who has acquired wealth may usually be trusted to decide who bear to him close social or personal relations, and to say whose lives have in a measure furnished the motives of his activity. But the right of intestate inheritance by distant relatives is one that stands on weak social foundations. It is a survival from more patriarchal conditions when, in the large family, or clan, the bond of unity was very strong. A truer test to-day of the proper limits for intestate inheritance is whether the wish to provide for these heirs has furnished the motive for the producing and preserving of the wealth. The claims of those nearest in blood and closest in personal relations are strongest. Family affection and friendship form the strongest of social ties, and it is socially expedient to cultivate them. Motives for abstinence and industry must be strengthened. But the same test shows that the zealous regard of the American law for the rights of distant kinsmen in foreign lands, or in distant quarters of this country, is irrational, and is unjust to the community where the fortune was made. Public opinion tends strongly toward this idea.
Property rights as they exist are clearly seen not to be a product of pure reason. They are the result of social evolution, of historical accidents, of class legislation, and in many cases, of selfish interests. Changing social conditions and ideas are bringing many changes in law, and further changes must be expected to come, which will reduce the influence of inheritance of property in fostering status in distribution. Especially important are the increasing application of the progressive principle to incomes and inheritance,[5] and the development of insurance to put family savings into the form of terminable annuities instead of capital sums.[6]
Sec. 7. #Some merits of competition#. The dominant method of distribution to-day is that of competition.[7] This is not a mere accident, but is a resultant of unending experimentation with different methods of distribution carried on since the beginning of human society. A method of distribution had to be found and retained that would work under the conditions of human nature at each stage of social progress; and competition, however imperfectly, has worked. It is evident from the voices of praise and of blame that competition has its good and its bad aspects. Let us observe first the good ones. Competition acts to distribute the working force over the field of industry wherever it is most needed. The remarkable (tho far from perfect) adjustment of industry to the needs of each neighborhood is brought about by individual motives, not by centralized authority. Wherever consumers settle, stores are started and factories are built. Wherever work is to be done, men come in about the right number to do it. It is not mere chance that produces this result. The available skill is adjusted to varying needs by the delicate measurement of the market rate of wages. Two-sided competition gives a definite rule of price–the only definite impersonal rule. The theoretical competitive price is the standard to which things tend constantly to adjust themselves in an open market.[8]
Competition is an essentially economic method as contrasted with the legal and personal methods above and later described, because it is impersonal and reducible to a rule of value. Distribution under competition is made, not with reference to abstract ethical principles or to personal affection, but to the value of the product. Each worker strives to do what will bring him the largest return, and the price others pay expresses their estimates of the service in that market. Each seeking his own interest is led to make himself more valuable to others. In most cases and in large measure, competition stimulates men to sacrifice, to invention, to preparation; thus is zeal animated and are efforts sustained. In the economic realm, as is now seen to be the case in the biologic realm, competition of some effective kind is an indispensable condition not only of progress but of life without degeneration. Monopoly, as we have noted, never has ceased to rest under the ban of Anglo-Saxon law, and therefore to exemplify compulsory, as opposed to competitive distribution. A striking feature of the competitive method is its decentralization. Each helps to value the economic services of each. If one pays more for the services of the singer than for those of the cook, it is not because one would rather listen to the singing than to eat when starving, but because by apportioning one’s income one can get the singing and the eating too. In the existing circumstances, the singer’s services seem to the music lover to be worth paying for, and he backs his opinion with his money. So each is measuring the services of all others, and all are valuing the services of each. It is distribution by valuation, and it is valuation by democracy.
Sec. 8. #Wide acceptance of competition.# On purely abstract and _a priori_ grounds competition cannot be accorded an ethical sanction, as is sometimes assumed. But because of the qualities above outlined, and because it meets in large measure the pragmatic tests, the competitive rule of distribution appeals to all men (even to those who denounce it) as having in many of its applications a moral character, as compared with the other possible methods of distribution. Indeed, the competitive rule is the only rule that does not involve either personal and arbitrary judgment (force, charity, and authority) or status. Even such measure of justification as is found in status (as in property and inheritance laws) is traceable, in the long run, to competition. The case for a limited application of status is based upon its results in stimulating motives of effort and accumulation.[9] When the rule of authority is applied to-day in the large field of public regulation where _actual_ competition has become impossible, almost the only guiding rule is _hypothetical_ competition. The just rate is felt to be that which in the long run _would be_ just sufficient to afford “normal” incomes to labor and to capital, to call forth the necessary effort, skill, judgment, and forethought, if competition _were_ at work, as it is not.[10] Only this rule of hypothetical competition redeems these public rates from arbitrariness, favoritism, and force.
Sec. 9. #”Economic harmonies” and discords.# Every truth in political philosophy finds some exaggerated expression. Competition, as compared with status and custom, has some notable merits; and when the eighteenth century was throwing off some of the burdens inherited from the more static Middle Ages, competition appeared to be a panacea for all the ills of society.[11] The belief in the benefits of competition and the virtues of economic freedom found its extremist expression in the first half of the nineteenth century in the doctrine of “the economic harmonies.” According to this, if men are left entirely free to do as their interests dictate, the highest efficiency and best results for all will follow; the economic interests of all men are in harmony. Corresponding with this doctrine is the economic policy of extreme _laissez faire._
But experience has shown that the economic interests of the individuals in a community are only partly very rarely are they wholly, in harmony. There are three species of competition in every market: that between sellers, that between buyers, and that between sellers on the one hand and buyers on the other.[12] If at any point free competition is hindered, even the disciple of economic harmony must, from the very nature of his doctrine, expect a discordant result. In reality competition is rarely quite complete on both sides, and when it is not the weak usually suffer. Men do not start with fair opportunities. All that they may be entitled to have under competition may be so little that social sympathy seeks to better the results; hence poor relief, public and private. Society as a whole has an interest in the outcome of the individual’s economic struggle. It cannot see men starving or driven into crime. Moreover, when competition is the rule of valuation, it, like all valuations, partakes of the quality of those choosing–wise or foolish, good or evil.[13] And tho competition is the rule of democracy in economics, yet democracy cannot permit the economic vote of a vicious or of a foolish group to stand, where the goods, services, and prices resulting offend the prevailing public judgment and social conscience.
Sec. 10. #Competition modified by charitable distribution.# In practice the competitive method of distribution always has been modified or supplemented in varying degrees by the other methods. Important among these is charitable distribution. Charitable is here used in its original sense, as synonymous with benevolence and affection. First is parental love, the root and type of all the forms of charity. There is a complete lack of economic equivalence in the relation of parent and child in early years. The helpless infant does nothing for the parent, the parent gives all and does all for the child. Gradually, however, the balance is regained; as the years go on, not only do children repay in affection but in many cases they repay in material ways. Especially in the factory districts and on the farm the child sooner or later begins to reestablish the balance, becomes a worker, and contributes to the family income as much as the cost of his support, and finally more. A student of modern English town life has traced the curve of poverty traversed by the average poor family as the children are first an economic burden, and later an aid to their parents. In the middle, or propertied, classes the children do not for many years cease to be a financial burden to their parents, and in most eases the economic balance is never reestablished. It is not to the parents, but to the succeeding generation, that the debt is tardily paid.
Friendship widens the range of generosity and multiplies the mass of gifts. Broad sentiments of humanity lead to gifts outside the range of personal affection and personal interest, to the beggar on the street, to institutions devoted to charity. In New York state alone a sum of more than $20,000,000 a year is expended by institutional charities. About $512,000,000 in public benefactions were given in the United States by private donors in the year 1915, and in this respect that year was not exceptional. An enormous and increasing body of property is thus being year by year socialized, largely through bequests from persons without direct heirs. Great public subscriptions to the sufferers from great disasters, such as the Irish and the Indian famines, the Chicago fire, the Galveston flood, the San Francisco earthquake, the great European war, bespeak a widening generosity. Religion impels to the building of churches, to the support of priests, missions, and manifold religious undertakings. Charity in this connection is the expression of a sentiment that varies from the most intense personal, affection to the broadest and most general humanitarian sentiment.
Sec. 11. #Competition modified by authoritative distribution.# Authority is, after force, the oldest and was the earliest widely operative method of distribution. It shades into force, status, and charity in manifold ways, but it is essentially the assignment of a common, or social, income to individuals by some person or persons chosen, or accepted, by the society to perform this function. Thus it may be distinguished from force, which takes for itself what belongs to another; and from charity, which gives to another what belongs to one’s self; and from status, which transmits claims to income from one generation to another by a fixed impersonal rule, not by a personal judgment in the particular case.
Authoritative distribution is the dominant method in patriarchal tribes, in communal societies, and in monastic and other religious orders. Each person works at what he is commanded to do, and some one in authority (patriarch, head of the community, father of the monastic order) portions out the tasks and the rewards. In the family this rule largely prevails, and even after the children have come to years of discretion they not infrequently accept, from habit or affection, the will of the parents, and give up their entire wages to receive back a portion. The method of charitable distribution while the child is young gradually changes to authoritative distribution after the child becomes a worker. The untrained and indocile youth, however, is made the subject of compulsory distribution.
The collection and distribution of taxes is by public authority. No attempt is made to give back an exact equivalent to each taxpayer. The money is taken and spent by authority. The new forms, or at least the new extensions, of taxation, especially of incomes and inheritances at progressive rates, are very important examples of authoritative distribution.[14] The courts sometimes find themselves obliged to apply the method of authoritative distribution, altho they do it unwillingly. They try to confine their efforts to interpreting the contracts men have voluntarily entered into, and they avoid, so far as possible, the making of contracts or the fixing of rates. Authoritative distribution is exemplified in the work of many commissions appointed by law to fix rates or settle disputes, such as boards of conciliation and arbitration and railway commissions.
Sec. 12. #Meanings of socialism.# Our reason for leaving to the last the discussion of _authority_ as a method of distribution is not that it appeared last in historical development, but that it now is the most strongly advocated as an alternative of competition. One of the most striking developments of opinion in the nineteenth century was that favoring an increasing use of authority in distribution. This was meant not merely to supplement and modify competition, but to displace it completely, or (in the more moderate program) in large part. This opinion, or plan, has appeared under a variety of names, the main ones being communism, collectivism, social-democracy, and socialism, of which the last name has just now the greatest vogue. Socialism is a word of manifold meanings no one of which is generally accepted. Discussion is therefore often a Babel of tongues.
Socialism designates (1) a social[15] philosophy (2) a mode of social action, (3) a particular political party. There is thus philosophic, active, and partisan socialism. Each of these may be taken either in an absolute or in a more or less relative sense. The first meaning is the most fundamental, the second less so, and the last the least fundamental, but just now the most frequently used.
Sec. 13. #Philosophic socialism.# As a philosophy socialism is related to social just as individualism is related to individual. Socialism is faith in the group motive and group action rather than in self-interest and competitive action. Instead of social philosophy we may say social faith, or social ideals. This faith may be absolute, or radical, to the rejection of all economic competition; or it may be moderate, and leave more or less place for self-interest and competition. Every man of conscience and of ideals has moods that are socialistic (in this sense) and dreams of a world without toil, competition, or poverty.
This social philosophy has taken form as “Christian Socialism” among men of strong religious natures, in various religious denominations. Great secular dreamers–Plato in his “Republic,” Sir Thomas More, in his “Utopia,” Edward Bellamy, in “Looking Backward,” William Morris, in “News from Nowhere,” and others–have painted beautiful pictures of ideal economic states from which all of the great evils and problems of our society have been banished.
Sec. 14. #Socialism in action.# Active socialism is group action in economic affairs. This may be by private voluntary groups, as a club, church, or trade union, or by a public group, or political unit of government, which has therefore a compulsory character. The radical kind of active socialism would be the ownership by government of all the means of production and the conduct of all business, assigning men, by authority, to particular work and granting them such incomes as the established authority thought they deserved. This kind exists nowhere. A moderate kind of active socialism is represented by each separate case of public ownership or industry. Even public regulation by authority, of the many kinds described in this volume, is touched with a quality of active socialism. In this sense there can be more or less of active socialism in a community; a state may be more or less socialized in its economic aspects. An English Chancellor of the Exchequer declared in the last decade of the nineteenth century, “We are all socialists now.” The ever-increasing sphere of the state[16] gives to that statement to-day a larger, fuller meaning than when it was uttered.
Socialism in action is of course always the expression of a more or less socialistic philosophy shared by a majority of the people. This great recent movement of socialization in industry is the expression not of a radical but of a moderate social philosophy. It does not look to the abolition, but only to the modification and limitation in some directions, of private property and of competitive industry. The spirit of this movement is opportunist, or experimental. It is ready to try public action, but recognizes that it has difficulties and limitations. The ultra-radical and the ultra-conservative alike declare that these measures “logically” lead on to the complete destruction of private property. But men find that they can warm their hands without being “logically” compelled to thrust them into the fire, and that they can quench their thirst without a growing resolution to drink the well dry. When this governmental activity has proceeded somewhat extensively and systematically in cities, as in Great Britain, it is called municipal socialism; and in states, as in Germany, it is called state socialism.
Sec. 15. #Origin of the radical socialist party.# Socialism in the partizan sense is an actual political organization. Both in Europe and in America such organizations have been designated as “social-democratic,” “socialist labor,” or “labor” parties. Socialism in this sense of a party organization, or movement, is very different from a social philosophy. In its partizan phase socialism exhibits all of the baffling variability and elusiveness that it does in its other aspects. However, in its printed program the socialist party sets forth both a socialist philosophy and an ideal of active socialism in their most radical forms.
Modern political socialism traces its origin directly to the most radical of German social philosophers, Marx, Engels, and Lassalle. Karl Marx (1818-1883), preeminently the philosophic leader of the movement, sought to give a solider foundation of reason to the somewhat romantic socialist philosophy current in his day. His own doctrine, first set forth connectedly[17] in the Communist Manifesto in 1848, he called Communism. This has come to be called by his followers, “scientific socialism.” “Scientific” was meant to emphasize the contrast with “Utopian” socialism, as Marx and Engels somewhat scornfully characterized the older communist philosophy, romances of the ideal state, and attempts to found and conduct small communistic states.
Sec. 16. #The two pillars of “scientific” socialism.# Scientific communism was to be based upon two immovable pillars. The one was “the labor theory of value,” by which all profits and incomes from investment were shown to be robbery of the wage-workers.[18] “Capital,” that is, the ownership of the means of production, was declared to be the instrument of this “exploitation.” The other foundation stone was “the materialistic philosophy of history,” that is, the explanation of all the intellectual, cultural, and political changes of mankind from the side of the material economic conditions as causes. As Engels expressed it, “The pervading thought … that the economic production with the social organization of each historical epoch necessarily resulting therefrom forms the basis of the political and intellectual history of this epoch.” This doctrine denies that, in an equally valid sense, biological changes in brain, and cultural changes in science, arts, and education, cause the mechanical inventions and improved processes and thus alter the form bf economic production.
Sec. 17. #Aspects of the materialistic philosophy of history#. Marx’s general formula of economic materialism had three minor propositions or corollaries: (a) The doctrine of the _class conflict_; all history is a record of the class struggle between those who have property, the ruling classes within the nations, and those who have not, the oppressed working class, (a conception of history blind to most of the great international conflicts). The class conflict was declared to be more sharply marked and bitter than ever before; “the entire human society more and more divides itself into two great hostile camps, into two great conflicting classes, _bourgeoisie_ and proletariate.” (b) The doctrine of _increasing misery_; the conditions before described must cause the steadily increasing degradation of the masses. (c) The _catastrophic theory_; the final and inevitable result of this movement must be a revolution, when the downtrodden workers will throw off their chains and expropriate the expropriators. There is no doubt that Marx, when he first formulated this philosophy, believed that such a revolution, most violent in nature, would occur within a few years.
Sec. 18. #Utopian nature of “scientific” socialism#. The term “scientific” set in contrast with “utopian” was meant to imply that the doctrine of Marx was not “utopian” (a word which had come to mean fanciful and impracticable). Marx had a contempt for the romances of the ideal state and for what he deemed to be the unfounded speculations of earlier prophets of communism. But utopian (from _utopia_, Greek for no place) means nonexistent, and Marxian socialism surely was that. “Experimental” or “actually at work” would have been a more logical contrast with “utopian.” Marx and his followers likewise had a contempt for the communistic experiments, or settlements and colonies, which by the scores had been started and had failed, bringing discredit upon all communistic proposals. The beauty of “scientific” socialism was that it never could be tried on a small scale–or tried at all until a whole nation adopted it.
The old time “scientific” socialist had a lofty scorn for any less dogmatic philosophy than his own or for any less sweeping social change than that he expected. Moderate social reform to him was but temporizing; indeed, it was evil, inasmuch as it helped to postpone the inevitable, but in the end, beneficent catastrophe of the social revolution. A step-by-step movement toward socialism, state socialism,[19] even of a pretty sweeping character, was, to the old-time Marxians, not really socialism at all. A valid reason for this attitude was found in the extremely limited manhood suffrage and in the aristocratic class government of most European countries, especially of Germany; so that, as the party socialists saw it, multiplying state enterprises but increased the power of the ruling, and eventually of the militarist, class. The social-democratic leaders felt that until they themselves were in power, the growth of “state socialism” would be a calamity for the nation. The events of 1914 may make our judgment tolerant toward their feeling.
Sec. 19. #Its unreal and negative character.# The so-called “scientific” socialism had, therefore, a peculiarly unscientific spirit; for, in a modern sense, science implies a patient search for truth, not a sudden revelation; a constant testing of opinions by observation and experiment, not a dogmatic conviction that refuses the test of reality. “Scientific” socialists talked much (and still talk much) of the “evolution” of social institutions; but they refused to admit the essential condition for institutional evolution, the competitive trial on a small scale, of a new form of economic organization to prove its fitness to survive. Indeed, it had been tried on a small scale many times, and had always failed in a brief time.
Lincoln said that a man’s legs ought to be long enough to reach to the ground; but “scientific” socialism was not built on that plan. To be sure it contained many elements of truth, but these were so distorted that the result was a caricature of history, of philosophy, of economics, and of prophecy. The most important influence of radical socialism has been exerted through negative criticism. It has performed the function of a party in opposition, relentlessly hunting out and pointing out the defects of existing institutions, arousing the smugly contented, and, by its very recklessness and bitterness, inspiring at times a wholesome fear of more revolutionary evils. This has been a real service to the cause of moderate and constructive reform.
Sec. 20. #Revisionism and opportunism in the socialist party#. Most men have always agreed in an adverse judgment of the claims of “scientific” socialism. The criticisms have been admitted in part even by the intellectual leaders among the Social-democrats. They lost some of their fantastic illusions, they tempered some of their exaggerated claims of oracular inspiration. “Revisionism,” the socialist higher criticism, became influential in the party. Whenever the party gained any success at the polls, the socialists in public office and the party leaders found it necessary to “do something” immediately. The rank and file might be willing to talk of the millennium, but preferred to take it in instalments instead of waiting for it to come some centuries after they were dead. And so the socialist party, as fast as it gained any practical power, became “opportunist” and worked for moderate practical reforms. The leaders did this with many misgivings lest the masses might become so reconciled to the present order that they would refuse to rise in revolt. In that case the revolution never could happen (altho it was inevitable).
As the party socialists did more to improve the present, they talked less of the distant future state. They ceased their criticisms of “mere temporizing” “_bourgeois_” reforms, and began to claim these as the achievements of the socialist party. They began to write of the remarkable growth of social legislation in Europe and America in the past half century under such titles of “socialism in practice” and “socialists at work.” This was despite the fact that these reforms were all brought about by governments in which the socialist party had no part whatever or was a well-nigh insignificant minority. This bald sophistry, or self-deception, was easily possible by confusing the word “socialist” as relating to the abstract principle of social action, with socialist as applied to their own party organization. It is as if the Republican party in the United States were to claim as its own all the works of the republican spirit and principles of government in the world from the party’s organization to the present time.
Sec. 21. #Alluring claims of party socialism.# In thus changing the emphasis of its claims, the socialist party has been somewhat put to it to retain any clear distinction between itself and other parties of social reform. It has done this however by continuing to proclaim the _ultimate_ desirability of reorganizing all society without leaving any productive wealth in private hands. It has had no misgivings prompted by the experience of the world. Its case continues to be far the strongest in its negative aspect, the exposure of the evils in present society. To many natures the claims of the socialist party have all the allurements of patent medicine advertisements. These describe the symptoms so exactly and promise so positively to cure the disease, that they are irresistible–especially when the regular physicians keep insisting that the only way to get well is to take baths and exercise, and stop the use of whisky and tobacco.
Those attracted to the socialist party by its sweeping claims are of two main types. The one is the low-paid industrial wage-worker; the other is the sympathetic person of education or of wealth (or of both), who has become suddenly aroused to the misery in our industrial order. To both of these types, feeling intensely on the subject, the socialist party appeals as the only party with promises sweeping enough to be attractive. The one becomes the proletarian, the other the intellectual, the one becomes the workshop, the other the parlor-socialist. Many of the latter type are persons overburdened either with unearned inherited wealth or with an undigested education. Many of them, having enjoyed for a time the interesting experience of radical thought and of bohemianism, come later to more moderate social opinions.
Sec. 22. #Growth and nature of the socialist vote.# In 1912 the socialist party in the United States polled 900,000 votes in the presidential election. The socialist parties in the various lands have almost steadily grown, and now cast votes numbering in the aggregate six to ten million (as variously estimated, the name socialist being elastic). The socialist parties may be expected to continue growing. They will ultimately gather within their folds most of the ultra-discontented, and others that are not able to find an alternative economic philosophy and a plan that inspire their hopes. But the socialist party vote is made up of men of many shades of opinion, a large number of whom hold only the mildest sort of socialistic philosophy. Not many of the more than 3,000,000 social-democratic voters in Germany before the war were members of the regular party organization; but they supported the party as the one unequivocal way to declare themselves against militarism and undemocratic class-government. In the United States only about one tenth of the socialistic party voters have been enrolled as members of the party.
Sec. 23. #Economic legislation and the political parties.# This floating socialist vote is now so large that it is eagerly sought by candidates of the older parties. These independent voters care little for the radical and distant tenets of the socialist party leaders, and these, to attract wider support, are forced to place increasing stress upon immediate and moderate reforms. On the other hand, men of larger qualities of leadership in the older parties are constantly adopting and advancing pending measures of social reform. Where this is not done the socialist party tends more quickly to develop into the one powerful party of protest and of popular aspiration, receiving support from many elements of the middle and small propertied classes and from non-radical wageworkers. This movement from both sides is leaving less noticeable the contrast between the socialist party and other parties claiming to be “progressive” or “forward looking.” The strongest allies of the more radical communistic faction of the socialist party are those members of the conservative parties who fail to recognize the need of humane legislation, who irritate by their unsympathetic utterances, and who unduly postpone by their powerful opposition the gradual and healthful unfolding of the social spirit, energy, and capacity of the nation. The greatest problem of social and economic legislation for the next generation is to determine how far, and how, the principle of authority may wisely be substituted for the principle of competition in distribution.
[Footnote 1: Distribution as a problem of incomes is not to be confused with distribution of physical goods by transportation (as on the railroads) or by commercial agencies transferring goods from producer to consumer (as in cooeperative distribution). Functional distribution is the prime subject of the theory of value in Vol. I (e.g., usance, value of labor, time-preference, profits), a study of which is prerequisite to an intelligent study of the problems of personal distribution.]
[Footnote 2: See Vol. I, pp. 190, 223; and above, ch. 2, secs. 11-13.]
[Footnote 3: See Vol. I, pp. 248-255, 297-298, 406, 408, 415-418, 480-481, 483-484: also Vol. II, pp. 22-23, 146-148, 161-162, 178-180, 283, and various passages in the chapters of this Part.]
[Footnote 4: See above, ch. 2, sec. 7, on limitations upon bequest and inheritance.]
[Footnote 5: See ch. 18.]
[Footnote 6: See ch. 12, sec. 14.]
[Footnote 7: See ch. 2, sec. 10.]
[Footnote 8: See Vol. I, pp. 54 and 66; also pp. 504 507 in an organic theory of value.]
[Footnote 9: See above, sec. 2, note 3.]
[Footnote 10: Compare, e.g., portions of chs. 9, 15, 20, 21, 27; and 29, see. 17.]
[Footnote 11: See ch. 2, sees. 11-13.]
[Footnote 12: See Vol. I, p. 75.]
[Footnote 13: See, e.g., Vol. I, pp. 25, 71, 205, 479, 509, 511, 513.]
[Footnote 14: See above, ch. 18.]
[Footnote 15: See Vol. I, p. 6, on “social” and the social sciences.]
[Footnote 16: See e.g., ch. 9, secs. 2, 10; ch. 11, secs. 7, 8; ch. 16, secs. 3, 4, 12; chs. 18, 21, 22, 23, 27, 29, and 30.]
[Footnote 17: See Vol. I, p. 502, on communism and value theory.]
[Footnote 18: See Vol. I, pp. 210, 228, 502 on the labor-theory of value.]
[Footnote 19: See above, sec. 14.]
INDEX
Accident insurance,
Agricultural credit,
Agricultural, decay,
economics, problems of,
prices, fall of,
Agricultural, and rural population, Agriculture and crises,
Agriculture, exhaustion of the soil, medieval,
number in,
the new,
Aldrich report,
Senator,
plan,
American Federation of Labor,
Appreciation and interest,
Arbitration, voluntary,
compulsory,
Assessment insurance,
Assessment of taxes,
Authoritative distribution,
B
Balance of merchandise,
Balance of trade argument,
Bank, deposits as investments,
notes,
restriction act,
Banking, in the U.S., before 1914,
Banks, functions of,
in U.S.,
taxes on,
Bellamy, Edward,
Bills of exchange,
Bimetallism,
Bonds, taxation of,
Bowley, statistician,
Boycott,
Building and loan associations,
Business cycle,
C
California Fruit Exchange,
Canadian Industrial Disputes Act,
Canals,
Capital,
Capitalistic monopoly,
Charitable distribution,
Capitalization theory of rises,
Charity, and control of vice,
Child-labor,
Christian socialism,
City growth,
Clark, John B.,
Clay, Henry,
Clayton Act,
and farmers,
Cleveland, Grover,
Closed shop, see Open shop
Coal,
Coinage on governmental account,
Collective bargaining,
Combination,
Combinations, industrial,
Common law, on monopoly,
Comparative advantages, doctrine of, Compensated gold dollar,
Compensation, for accidents,
Competition among employers,
among workers,
of railroads,
and monopoly,
as regulative principle,
merits of,
see also Monopoly
Competitive system,
Compulsory insurance,
economy of,
Consolidation, of railroads,
Consumers’ League,
Contributory principle in insurance, Cooeperation, producers’,
consumers’,
among farmers,
Corporation taxation,
difficulty of,
Corporations,
Costs of production, and the tariff, Crises, and industrial depressions,
and unemployment,
Custom,
D
Davies, Joseph E.,
Deferred payments, standard of,
Deposits, bank,
Debts, public,
Dingley Act,
Discrimination, railroad,
Displacement theory of immigration, Distribution of incomes,
Doctrine of comparative advantages, Dollar,
Dynamic conditions,
E
Economic, harmonies,
problems,
system, the present,
Emerson’s premium plan,
Employers, and immigration,
Employment offices,
Engels, Friederich,
Erdman act,
Eugenics,
F
Factory conditions,
Fair competition,
see also Unfair practices
Fairchild, H.P.,
Farm, stock,
raw materials,
and factory,
loans,
Farmer’s income,
life,
Farming, commercial,
capitalistic,
diversified,
intensive,
Farms, area,
woodlots,
equipment,
in U.S.,
size of,
and railroads,
Federal Industrial Commission,
Federal legislation against monopoly, Federal Reserve Act,
Federal Rural Credits Act,
Federal taxation,
Federal Trade Commission Act,
Fiat money,
Finance, public,
Food prices,
supply,
Foreign, banking,
exchange,
trade,
Forestry,
Forests,
Fractional coins,
Franchises, railroad,
for public utilities,
Free trade,
see also Protective tariff
G
Gambling, uneconomic character of,
Gantt’s premium plan,
Gardner Land Bank Act,
Garfield, James A.,
Ghent, unemployment insurance,
General property tax, see Property
George, Henry,
Glass-Owen bill,
Glut theories of crises,
Gold-exchange standard,
Gold, production,
standard, defectiveness of,
Gold-using countries,
Goldenweiser, E.A.,
Governmental aid to railroads,
Graduated taxation,
Graduation principle,
Greenbacks,
Gresham’s law,
H
Hadley, A.T.,
Halsey’s premium plan,
Hamilton, Alexander,
Hancock, Gen. Winfield Scott,
Harrison, Benjamin,
Hayes, Rutherford B.,
Home market argument,
Housing problem,
Hours and wages, public regulation of,
I
Immigrants, and organized labor,
Immigration, and low wages,
and population,
economic aspects of,
and wages,
and farming,
Imports into the U.S. chart,
Income, taxation, federal,
taxes,
Independent treasury,
Index numbers, chart,
Industrial revenues of government,
remuneration, methods of,
monopoly, problem of,
trust, nature of growth,
depressions, see Crises
Infant industry argument,
Inheritance,
taxes,
limitations of,
Interest rate, and deferred payments, and prices,
in crises,
Insurance, principles of,
companies, taxes on,
against unemployment,
Internal revenue,
International exchange, equation of, International trade,
Interstate Commerce Act,
Invalidity pensions,
Investment banking,
J
Jackson, Andrew,
Jenks, J.W.,
Justice in taxation,
K
Kemmerer, E.W.,
Knights of Labor,
L
Labor, legislation,
and social legislation,
exchanges, see Employment offices
Laissez-faire,
Land, taxation, reform of,
banks,
Large production, in public utilities, Large industry,
Lassalle, Ferdinand,
Leclaire, profit sharing,
Legal tender,
Loans, governmental,
Lump of labor notion,
M
McKinley Act,
McKinley, William,
Market, public,
Materialistic philosophy,
Marx, Karl,
Mediation,
Mercantilism,
Merchandise, imports and exports,
Militarism, and population,
Military power, maximum,
Mill, J.S.,
Minimum wage,
Mitchell, Wesley C.,
Monetary economy,
system,
theory of crises,
Money, nature, use, and coinage,
value of,
quantity theory,
per capita circulation,
fiduciary,
commodity,
Monopolistic nature of protection,
Monopoly, and labor organization,
in railroads,
industrial,
prices,
public policy in respect to,
in public utilities,
Moody, John,
Moral judgments of monopoly,
More, Sir Thomas,
Morris, William,
Mortality table for insurance,
Mortgage taxation,
Municipal ownership,
N
National banks,
ownership,
National Monetary Commission,
Negro problem,
Natural agents, and monopoly,
Newlands act,
O
Old-age pensions,
Open shop,
Opportunism,
Organized labor,
and legislation,
Ownership of farms,
P
Paper money,
Par of exchange,
Paradox of value,
Payne-Aldrich tariff,
Personal taxes,
Picketing,
Piece work,
Plato,
Police state,
Political, money,
aspects of labor,
aspect of railroads,
Population, agricultural and rural, and immigration,
Postal savings,
Power,
Precious metals as money,
Premium plans,
Price, standard,
common market,
Prices, general level,
changes in,
rising,
and international trade,
and monopoly,
Profit sharing,
Profits from monopoly,
Progressive taxes, see graduation,
Promoters of monopoly,
Property, private,
taxes on,
tax on,
concept,
Property tax, general,
Protection, “true principle” of,
Protective, tariff, policy of,
tariffs, prevalence of,
railroad rates,
Public finance,
view of trade unions,
and labor legislation,
inspection,
ownership,
Public utility commissions,
Public utilities, monopolistic nature of,
Q
Quantity theory of money,
R
Race problems,
Railroad mileage,
building,
problem,
commissions,
Resources, material,
of the nation,
Reserve, cities,
plan of insurance,
Reserves, bank,
against notes,
against deposits,
Restraint of trade,
Revenue tariff,
Revisionism,
Ricardo, David,
Rich man’s panic,
Ripley, W.Z.,
Roads,
Roberts, Peter,
Roosevelt, Theodore,
Root, Elihu,
Rowan’s premium plan,
Rural, definition,
exodus,
S
Saturation point of money,
Saving, and investment,
Savings, banks,
deposits,
insurance assets as,
“Scientific” socialism,
Seasonal fluctuations, and unemployment, Seigniorage,
charge,
Seligman, E.R.A.,
Sherman Anti-trust law,
Shifting and incidence,
of insurance premiums,
Shorter working day,
Sickness, insurance against,
Single tax,
Smith Adam,
Social, legislation,
protective policy of immigration,
agricultural policy,
effects of inheritance,
Social insurance,
by trade unions,
Social utility,
Social welfare, in taxation,
and shorter working day,
Socialism, some aspects of,
meanings of,
philosophic,
active,
Marxian,
political,
“scientific”,
Socialist, party,
vote,
Standard money,
defined,
see also Deferred payments,
State, sphere of,
insurance,
ownership,
Status,
Strike, right to,
Strikes,
T
Tabular standard,
Taft, William Howard,
Tariff, changes and crises,
and wages,
and unemployment,
reductions, harm of,
board, a permanent,
history, American,
rates,
for revenue,
“true principle” of,
“competitive principle” of,
and business depressions,
Task work,
Taxation, objects and principles of, revenues from,
forms of,
as a public question,
separation of,
system of,
Taxes, effect upon property valuations, property and corporation,
Taylor’s premium plan,
Tenancy on farms,
Tilden, Samuel J.,
Time work,
Trade education,
Trade unions,
see also Organized labor,
Transportation,
taxes on,
Trant, on trade unions,
Trust company,
Trust, definition,
see Monopoly,
Two-profits argument,
U
Underwood tariff,
Unemployment,
in crises,
insurance,
Unfair practices,
Usance of wealth,
of labor,
Usury laws,
Utility,
V
Van Hise, C.R.,
W
Wage contract, limitation of,
Wage-system,
growth of,
practicability of,
Wages, and tariff,
and general prices,
general, and organization,
particular, and organization,
maladjustment of, and unemployment, and immigration, see Immigration,
see also Hours and wages,
Walker, Francis A.,
Walker tariff,
Washington, Booker T.,
Wealth,
the nation’s,
taxation of,
“Wealth of Nations”,
Weir’s premium plan,
Wild-cat banking,
Wilson tariff act,
Wilson, Woodrow,
Wolman, L.,
Women, working day for,
Wyman, Bruce,