IV

This, then, is the basis of the Socialist philosophy, which Engels regarded as "destined to do for history what Darwin's theory has done for biology." Marx himself made a similar comparison.[83]Marx was, so Liebknecht tells us, one of the first to recognize the importance of Darwin's investigations to sociology. His first important treatment of the materialistic theory, in "A Contribution to the Critique of Political Economy," appeared in 1859, the year in which "The Origin of Species" appeared. "We spoke for months of nothing else but Darwin, and the revolutionizing power of his scientific conquests,"[84]says Liebknecht. Darwin, however, had little knowledge of political economy, as he acknowledged in a letter to Marx, thanking the latter for a copy of "Das Kapital." "I heartily wish that I possessed a greater knowledge of the deep and important subject of economic questions, which would make me a more worthy recipient of your gift," he wrote.[85]

The test of such a theory must lie in its application. Let us, then, apply the materialistic principle, first to a specific event, and then to the great sweep of the historic drama. Perhaps no single event has more profoundly impressed the imaginations of men, or filled a more important place in our histories, than the discovery of America by Columbus. In the schoolbooks, this great event figures as a splendid adventure, arising out of a romantic dream. But the facts are, as we know, far otherwise.[86]In the twelfth and thirteenth centuries there were numerous and well-frequented routes from Hindustan, that vast storehouse of treasure from which Europe drew its riches. Along these routes cities flourished. There were the great ports, Licia in the Levant, Trebizond on the Black Sea, and Alexandria. From these ports, Venetian and Genoese traders bore the produce over the passes of the Alps to the Upper Danube and the Rhine. Here it was a source of wealth to the cities along the waterways, from Ratisbon and Nuremburg, to Bruges and Antwerp. Even the slightest acquaintance with the history of the Middle Ages must suffice to give the student an idea of the importance of these cities.

When all these routes save the Egyptian were closedby the hordes of savages which infested Central Asia, it became an easy matter for the Moors in Africa and the Turks in Europe to exact immense revenues from the Eastern trade, solely through their monopoly of the route of transit. Thus there developed an economic parasitism which crippled the trade with the East. The Turks were securely seated at Constantinople, threatening to advance into the heart of Europe, and building up an immense military system out of the taxes imposed upon the trade of Europe with the East—a military power, which, in less than a quarter of a century, enabled Selim I to conquer Mesopotamia and the holy towns of Arabia, and to annex Egypt.[87]It became necessary, then, to find a new route to India; and it was this great economic necessity which set Columbus thinking of a pathway to India over the Western Sea. It was this same great problem which engaged the attention of all the navigators of the time; it was this economic necessity which induced Ferdinand and Isabella to support the adventurous plan of Columbus. In a word, without detracting in any manner from the splendid genius of Columbus, or from the romance of his great voyage of discovery, we see that, fundamentally, it was the economic interest of Europe which gave birth to theone and made the other possible. The same explanation applies to the voyage of Vasco da Gama, six years later, which resulted in finding a way to India over the southeast course by way of the Cape of Good Hope.

Kipling asks in his ballad, "The British Flag"—

"And what should they know of England, who only England know?"

There is a profound truth in the defiant line, a truth which applies equally to America or any other country. The present is inseparable from the past. We cannot understand one epoch without reference to its predecessors; we cannot understand the history of the United States unless we seek the key in the history of Europe—of England and France in particular. At the very threshold, in order to understand how the heroic navigator came to discover the vast continent of which the United States is part, we must pause to study the economic conditions of Europe which impelled the adventurous voyage, and led to the discovery of a great continent stretching across the ocean path. Such a view of history does not rob it of its romance, but rather adds to it. Surely, the wonderful linking of circumstances—the demand for spices and silks to minister to the fine tastes of aristocratic Europe, the growth of the trade with the East Indies, the grasping greed of Moor and Turk—all playing a rôle in the great drama of which the discoveryof America is but a scene, is infinitely more fascinating than the latter event detached from its historical setting!

It is not easy to give in the compass of a few pages an intelligent view of the main currents of history. The sketch here introduced—not without hesitation—is an endeavor to state the Socialist concept of the course of social evolution in a brief outline and to indicate the principal economic causes which have operated to determine that course.

It is now generally admitted that primitive man lived under Communism. Lewis H. Morgan[88]has calculated that if the life of the human race be assumed to have covered one hundred thousand years, at least ninety-five thousand years were spent in a crude, tribal Communism, in which private property was practically unknown, and in which the only ethic was devotion to tribal interests, and the only crime antagonism to tribal interests. Under this social system the means of making wealth were in the hands of the tribes, orgens, and distribution was likewise socially arranged. Between the different tribes warfare was constant, but in the tribe itself there was coöperation and not struggle. This fact is of tremendous importance in view of the criticisms which have been directed against the Socialist philosophy from the so-calledDarwinian point of view, according to which competition and struggle is the law of life; that what Professor Huxley calls "the Hobbesial war of each against all" is the normal state of existence.

This is described as "the so-called Darwinian" theory advisedly, for the struggle for existence as the law of evolution has been exaggerated out of all likeness to the conception of Darwin himself. In "The Descent of Man," for instance, Darwin raises the point under review, and shows how, in many animal societies, thestrugglefor existence is replaced bycoöperationfor existence, and how that substitution results in the development of faculties which secure to the species the best conditions for survival. "Those communities," he says, "which included the greatest number of the most sympathetic members, would flourish best and rear the greatest number of offspring."[89]Despite these instances, and the warning of Darwin himself that the term "struggle for existence" should not be too narrowly interpreted or overrated, his followers, instead of broadening it according to the master's suggestions, narrowed it still more. Thus the theory has been exaggerated into a mere caricature of the truth. This is almost invariably the fate of theories which deal with human relations, perhaps it would be equally true to say of all theories. The exaggerations of Malthus's law of population is a casein point. The Marx-Engels theory of the materialistic conception of history is, as we have seen, another.

Kropotkin, among others, has developed the theory along the lines suggested by Darwin. He points out that "though there is an immense amount of warfare and extermination going on amidst various classes of animals, there is, at the same time, as much, or perhaps even more, of mutual support, mutual aid, mutual defense, amidst animals belonging to the same species or, at least, to the same society. Sociability is as much a law of nature as mutual struggle.... If we resort to an indirect test, and ask nature: 'Who are the fittest: those who are continually at war with each other, or those who support one another?' we at once see that those animals which acquire habits of mutual aid are undoubtedly the fittest. They have more chances to survive, and they attain, in their respective classes, the highest development of intelligence and bodily organization. If the numberless facts which can be brought forward to support this view are taken into account, we may safely say that mutual aid is as much a law of animal life as mutual struggle, but that, as a factor of evolution, it most probably has a far greater importance, inasmuch as it favors the development of such habits and characters as insure the maintenance and further development of the species, together with the greatest amount ofwelfare and enjoyment of life for the individual, with the least waste of energy."[90]

From the lowest forms of animal life up to the highest, man, this law proves to be operative. It is not denied that there is competition for food, for life, within the species, human and other. But that competition is not usual; it arises out of unusual and special conditions. There are instances of hunger-maddened mothers tearing away food from their children; men drifting at sea have fought for water and food as beasts fight, but these are not normal conditions of life. "Happily enough," says Kropotkin again, "competition is not the rule either in the animal world or in mankind. It is limited among animals to exceptional periods.... Better conditions are created by theelimination of competitionby means of mutual aid and mutual support."[91]This is the voice of science now that we have passed through the extremes and arrived at the "beautiful goal of calm wisdom." Competition is not, in the verdict of modern science, the law of life, but of death. Strife is not nature's way of progress.

Anything more important to our present inquiry than this verdict of science it would be difficult to imagine. Men have for so long believed and declared struggle and competition to be the "law of nature," and opposed Socialism on the ground of its supposedantagonism to that law, that this new conception of nature's method comes as a vindication of the Socialist position. The naturalist testifies to the universality of the principle of coöperation throughout the animal world, and the historian and sociologist to its universality throughout the greatest part of man's history. Present economic tendencies toward combination and away from competition, in industry and commerce, appear as the fulfilling of a great universal law. And the vain efforts of men to stop that process, by legislation, boycotts, and divers other methods, appear as efforts to set aside immutable law. Like so many Canutes, they bid the tides halt, and, like Canute's, their commands are vain and mocked by the unheeding tides.

Under Communism, then, man lived for many thousands of years. As far back as we can go into the paleo-ethnology of mankind, we find evidences of this. All the great authorities, Morgan, Maine, Lubbock, Taylor, Bachofen, and many others, agree in this. And under this Communism all the great fundamental inventions were evolved, as Morgan and others have shown. The wheel, the potter's wheel, the lever, the stencil plate, the sail, the rudder, the loom, were all evolved under Communism in its various stages. So, too, the cultivation of cereals for food, the smelting of metals, the domestication of animals,—to which we owe so much, and on which we still solargely depend,—were all introduced under Communism. Even in our day there have been found many survivals of this Communism among primitive peoples. Mention need only be made here of the Bantu tribes of Africa, whose splendid organization astonished the British, and the Eskimos. It is now possible to trace with a fair amount of certainty the progress of mankind through various stages of Communism, from the unconscious Communism of the nomad to the consciously organized and directed Communism of the most highly developed tribes, right up to the threshold of civilization, when private property takes the place of common, tribal property, and economic classes appear.[92]

Private property, other than that personal ownership and use of things, such as weapons and tools, which involves no class or caste domination, and is an integral feature of all forms of Communism, first appears in the ownership of man by man. Slavery, strange as it may seem, is directly traceable to tribal Communism, and first appears as a tribal institution. When one tribe made war upon another, its efforts were directed to the killing of as many of its enemies as possible. Cannibal tribes killed their foes for food,rarely or never killing their fellow-tribesmen for that purpose. Non-cannibalistic tribes killed their foes merely to get rid of them. But when the power of mankind over the forces of external nature had reached that point in its development where it became relatively easy for a man to produce more than was necessary for his own maintenance, the custom arose of making captives of enemies and setting them to work. A foe captured had thus an economic value to the tribe. Either he could be set to work directly, his surplus product enriching the tribe, or he could be used to relieve some of his captors from other necessary duties, thus enabling them to produce more than would otherwise be possible, the effect being the same in the end. The property of the tribe at first, slaves become at a later stage private property—probably through the institution of the tribal distribution of wealth. Cruel, revolting, and vile as slavery appears to our modern sense,—especially the earlier forms of slavery before the body of legislation, and, not less important, sentiment, which surrounded it later arose,—it still was a step forward, a distinct advance upon the older customs of cannibalism and wholesale slaughter.

Nor was it a progressive step only on the humanitarian side. It had other, profounder consequences from the evolutionary point of view. It made a leisure class possible, and provided the onlyconditions under which art, philosophy, and jurisprudence could be evolved. The secret of Aristotle's saying, that only by the invention of machines would the abolition of slavery ever be made possible, lies in his recognition of the fact that the labor of slaves alone made possible the devotion of a class of men to the pursuit of knowledge instead of to the production of the primal necessities of life. The Athens of Pericles, for example, with all its varied forms of culture, its art and its philosophy, was a semi-communism of a caste above, resting upon a basis of slave labor underneath. Similar conditions prevailed in all the so-called ancient democracies of civilization.

The private ownership of wealth producers and their products made private exchange inevitable; individual ownership of land took the place of communal ownership, and a monetary system was invented. Here, then, in the private ownership of land and laborer, private production and exchange, we have the economic factors which caused the great revolts of antiquity, and led to that concentration of wealth into few hands, with its resulting mad luxury on the one hand and widespread proletarian misery upon the other, which conspired to the overthrow of Greek and Roman civilization. The study of those relentless economic forces which led to the break-up of Roman civilization is important as showing how chattel slavery became modified and the slave to beregarded as a serf, a servant bound to the soil. The lack of adequate production, the crippling of commerce by hordes of corrupt officials, the overburdening of the agricultural estates with slaves, so that agriculture became profitless, the crushing out of free labor by slave labor, and the rise of a wretched class of freemen proletarians, these, and other kindred causes, led to the breaking up of the great estates; the dismissal of superfluous slaves, in many cases, and the partial enfranchisement of others by making them hereditary tenants, paying a fixed share of their product as rent—here we have the embryonic stage of feudalism. It was a revolution, this transformation of the social system of Rome, of infinitely greater importance than the sporadic risings of a few thousand slaves. Yet, such is the lack of perspective which the historians have shown, it is given a far less important place in the histories than the risings in question. Slavery, chattel slavery, died because it had ceased to be profitable; serf labor arose because it was more profitable. Slave labor was economically impossible, and the labor of free men was morally impossible; it had, thanks to the slave system, come to be regarded as a degradation. In the words of Engels, "This brought the Roman world into a blind alley from which it could not escape.... There was no other help but a complete revolution."[93]

The invading barbarians made the revolution complete. By the poor freemen proletarians who had been selling their children into slavery, the barbarians were welcomed. Misery, like opulence, has no patriotism. Many of the proletarian freemen had fled to the districts of the barbarians, and feared nothing so much as a return to Roman rule. What, then, should the proletariat care for the overthrow of the Roman state by the barbarians? And how much less the slaves, whose condition, generally speaking, could not possibly change for the worse? The free proletarian and the slave could join in saying, as men have said thousands of times in circumstances of desperation:—

"Our fortunes may be better; they can be no worse."

Feudalism is the essential politico-economic system of the Middle Ages. Obscure as its origin is, and indefinite as the date of its first appearances, there can be no doubt whatever that the break-up of the Roman system, and the modification of the existing form of slavery, constituted the most important of its sources. Whether, as some writers have contended, the feudal system of land tenure and serfdom is traceable to Asiatic origins, being adopted by the ruling class of Rome in the days of the economicdisintegration of the empire, or whether it rose spontaneously out of the Roman conditions, matters little to us. Whatever its archæological interest, it does not affect the narrower scope of our present inquiry whether economic necessity caused the adoption of an alien system of land tenure and agricultural production, or whether economic necessity caused the creation of a new system. The central fact is the same in either case.

That period of history which we call the Middle Ages covers a span of well-nigh a thousand years. If we arbitrarily date its beginning from the successful invasion of Rome by the barbarians in the early part of the fifth century, and its ending with the final development of the craft guilds in the middle of the fourteenth century, we have a sufficiently exact measure of the time during which feudalism developed, flourished, and declined. There are few things more difficult than the bounding of epochs in social evolution by exact dates. Just as the ripening of the wheat fields comes almost imperceptibly, so that the farmer can say when the wheat is ripe, yet cannot say when the ripening occurred, so with the epochs into which social history divides itself. There is the unripe state and the ripe, but no chasm yawns between them; they are merged together. We speak of the "end" of chattel slavery, and the "rise" of feudalism, therefore, in a wide, general sense. As a matter of fact, chattel slavery survived to some extent for centuries, existingalongside of the new form of servitude; and its disappearance took place, not simultaneously throughout the civilized world, but at varying intervals. Likewise, there is a vast difference between the first, crude, ill-defined forms of feudalism and its subsequent development.

The theory of feudalism is the "divine right of kings." God is the Supreme Lord of all the earth, the kings are His vice-regents, devolving their authority in turn upon whomsoever they will. All land is held as belonging to the king, God's chosen representative. He divides the realm among his barons, to rule over and defend. For this they pay tribute to the king—military service in times of war and, at a later period, money. In turn, the barons divide the land among the lesser nobility, receiving tribute from them. By these divided among the freemen, who also pay tribute, the land is tilled by the serfs, who pay service to the freeman, the lord of the manor. The serf pays no tribute directly to the king, only to his liege lord; the liege lord pays to his superior, and so on, up to the king. This is the economic framework of feudalism; with its ecclesiastical side we are not here concerned.

At the base of the whole superstructure, then, was the serf, his relation to his lord differing only in degree, though in material degree, from that of the chattel slave. He might be, and often was, as brutallyill-treated as the slave before him had been; he might be ill-fed and ill-housed; his wife or daughters might be ravished by his master or his master's sons. Yet, withal, his condition was better than that of the slave. He could maintain his family life in an independent household; he possessed some rights, chief of which perhaps was the right to labor for himself. Having his own allotment of land, he was in a much larger sense a human being. Compelled to render so many days' service to his lord, tilling the soil, clearing the forest, quarrying stone, and doing domestic work, he was permitted to devote a certain, often an equal, number of days to work for his own benefit. Not only so, but the service the lord rendered him, in protecting him and his family from the lawless and violent robber hordes which infested the country, was considerable.

The feudal estate, or manor, was an industrial whole, self-dependent, and having few essential ties binding it to the outside world. The barons and their retainers, lords, thanes, and freemen, enjoyed a certain rude plenty, some of the richer barons enjoying a considerable amount of luxury and splendor. Thevilleinand his sons tilled the soil, reaped the harvests, felled trees for fuel, built the houses, raised the necessary domestic animals, and killed the wild animals; his wife and daughters spun the flax, carded the wool, made the homespun clothing, brewed the mead, and gathered the grapes which they made into wine.There was little real dependence upon the outside world except for articles of luxury.

Such was the basic economic institution of feudalism. But alongside of the feudal estate with its serf labor, there were the free laborers, no longer regarding labor as shameful and degrading. These free laborers were the handicraftsmen and free peasants, the former soon organizing themselves into guilds. There was a specialization of labor, but, as yet, little division. Each man worked at a particular craft and exchanged his individual products. The free craftsman would exchange his product with the free peasant, and sometimes his trade extended to the feudal manor. The guild was at once his master and protector; rigid in its rules, strict in its surveillance of its members, it was strong and effective as a protector against the impositions and invasions of feudal barons and their retainers. Division of labor first appears in its simplest form, the association of independent individual workers for mutual advantage, sharing their products upon a basis of equality. This simple coöperation involved no fundamental, revolutionary change in society. That came later with the development of the workshop system, and the division of labor upon a definite, predetermined plan. Men specialized now in the making ofpartsof things; no man could say of a finished product, "This ismine, for I made it." Production had become a social function.

At first, in its simple beginnings, the coöperation of many producers in one great workshop did not involve any general or far-reaching changes in the system of exchange. But as the new methods spread, and it became the custom for one or two wealthy individuals to provide the workshop and necessary tools and materials for production, the product of the combined laborers being appropriated in its entirety by the owners of the agencies of production, who paid the workers a money wage representing less than the actual value of their product, and based upon the cost of their subsistence, the whole economic system was once more revolutionized. The custom of working for wages, hitherto rare and exceptional, became general and customary; individual production for use, either directly or through the medium of personal exchange, was superseded by social production for private profit. The wholesale exchange of social products for private gain took the place of the personal exchange of commodities. The difference between the total cost of the production of commodities, including the wages of the producers, and their exchange value—determined at this stage by the cost of producing similar commodities by individual labor—constituted the share of the capitalist, his profit, and the objective of his investment.

The new system did not spring up spontaneously and full-fledged. Like feudalism, it was a growth, a development of existing forms. And just as chattel slavery lingered on after the rise of the feudal régime, so the old methods of individual production and direct exchange of commodities for personal use lingered on in places and isolated industries long after the rise of the system of wage-paid labor and production for profit. But the old methods of production and exchange gradually became rare and almost obsolete. In accordance with the stern economic law that Marx afterward developed so clearly, the man whose methods of production, including his tools, are less efficient and economical than those of his fellows, thereby making his labor more expensive, must either adapt himself to the new conditions or fall in the struggle which ensues. The triumph of the new system of capitalist production, with its far greater efficiency arising from associated production upon a plan of specialized division of labor, was, therefore, but a question of time. The class of wage-workers thus gradually increased in numbers; as men found that they were unable to compete with the new methods, they accepted the inevitable and adapted themselves to the new conditions. The industrial revolution which established capitalism was, like the great revolutions which ushered in preceding social epochs, the product of man's tools.

FOOTNOTES:[60]Edward Clodd,Pioneers of Evolution from Thales to Huxley, page 1.[61]Socialism and Modern Science, by Enrico Ferri, page 96.[62]Studies in the Evolution of Industrial Society, by R. T. Ely, page 3.[63]Cf. Seligman,The Economic Interpretation of History.[64]Clodd,Pioneers of Evolution from Thales to Huxley, page 8.[65]Seligman,The Economic Interpretation of History, page 50.[66]Mass and Class, by W. J. Ghent, page 9.[67]Seligman,The Economic Interpretation of History, page 4.[68]Schiller,Philosophical Letters, Preamble.[69]Seligman,The Economic Interpretation of History, page 86.[70]Karl Marx,Notes on Feuerbach(written in 1845), published as an Appendix toFeuerbach, The Roots the Socialist Philosophy, by Friederich Engels. English translation by Austin Lewis (1903).[71]Christianity and the Social Crisis, by Walter Rauschenbusch (1907), page 4.[72]For a very scholarly discussion of this subject, the reader is referred to the series of articles by my friend, M. Beer, onThe Rise of Jewish Monotheism, in theSocial Democrat(London), 1908.[73]Cf.The Economic Foundations of Society, by Achille Lorio, page 26.[74]Capital, by Karl Marx (Kerr edition). Vol. I, page 91.[75]Cf.Karl Marx on Sectarianism and Dogmatism(A letter written to his friend, Bolte), in theInternational Socialist Review, March, 1908, page 525.[76]Very significant of the possibilities of a study of religious movements from this economic and social viewpoint is Professor Thomas C. Hall's little book,The Social Meaning of Modern Religious Movements in England(1900).[77]Appendix to F. Engels'Feuerbach, the Roots of the Socialist Philosophy, translated by Austin Lewis, 1903.[78]The Eighteenth Brumaire.[79]Quoted fromThe Sozialistische Akademiker, 1895, by Seligman,The Economic Interpretation of History, page 142.[80]Idem, page 143.[81]Karl Marx's Nationaloekonomische Irrlehren, von Ludwig Slonimski, Berlin, 1897.[82]I have not attempted to give a history of the development of the theory. For a more minute study of the theory, I must refer the reader to the writings of Engels, Seligman, Ferri, Ghent, Bax, and others quoted in these pages.[83]Capital, Vol. I, page 406 n. (Kerr edition).[84]Liebknecht,Memoirs of Karl Marx, page 91.[85]Charles Darwin and Karl Marx, A Comparison, by Edward Aveling, London, 1897.[86]See Thorold Rogers,The Economic Interpretation of History, second edition, 1891, pages 10-12.[87]For various reasons, chief of which is that it would take me too far away from my present purpose, I do not attempt to develop the serious consequences of these events to Europe. SeeThe Economic Interpretation of History, Chapter I, for a brief account of this.[88]Ancient Society, or Researches in the Lines of Human Progress from Savagery through Barbarism to Civilization, by Lewis H. Morgan. New edition, Chicago, 1907.[89]Darwin,The Descent of Man, second edition, page 163.[90]Mutual Aid a Factor of Evolution, by Peter Kropotkin, pages 5-6.[91]Idem, page 74.[92]Cf.Ancient Society, by Lewis H. Morgan, andThe Origins of the Family, Private Property, and the State, by Friederich Engels.[93]Engels,Origin of the Family, Private Property, and the State, p. 182.

[60]Edward Clodd,Pioneers of Evolution from Thales to Huxley, page 1.

[61]Socialism and Modern Science, by Enrico Ferri, page 96.

[62]Studies in the Evolution of Industrial Society, by R. T. Ely, page 3.

[63]Cf. Seligman,The Economic Interpretation of History.

[64]Clodd,Pioneers of Evolution from Thales to Huxley, page 8.

[65]Seligman,The Economic Interpretation of History, page 50.

[66]Mass and Class, by W. J. Ghent, page 9.

[67]Seligman,The Economic Interpretation of History, page 4.

[68]Schiller,Philosophical Letters, Preamble.

[69]Seligman,The Economic Interpretation of History, page 86.

[70]Karl Marx,Notes on Feuerbach(written in 1845), published as an Appendix toFeuerbach, The Roots the Socialist Philosophy, by Friederich Engels. English translation by Austin Lewis (1903).

[71]Christianity and the Social Crisis, by Walter Rauschenbusch (1907), page 4.

[72]For a very scholarly discussion of this subject, the reader is referred to the series of articles by my friend, M. Beer, onThe Rise of Jewish Monotheism, in theSocial Democrat(London), 1908.

[73]Cf.The Economic Foundations of Society, by Achille Lorio, page 26.

[74]Capital, by Karl Marx (Kerr edition). Vol. I, page 91.

[75]Cf.Karl Marx on Sectarianism and Dogmatism(A letter written to his friend, Bolte), in theInternational Socialist Review, March, 1908, page 525.

[76]Very significant of the possibilities of a study of religious movements from this economic and social viewpoint is Professor Thomas C. Hall's little book,The Social Meaning of Modern Religious Movements in England(1900).

[77]Appendix to F. Engels'Feuerbach, the Roots of the Socialist Philosophy, translated by Austin Lewis, 1903.

[78]The Eighteenth Brumaire.

[79]Quoted fromThe Sozialistische Akademiker, 1895, by Seligman,The Economic Interpretation of History, page 142.

[80]Idem, page 143.

[81]Karl Marx's Nationaloekonomische Irrlehren, von Ludwig Slonimski, Berlin, 1897.

[82]I have not attempted to give a history of the development of the theory. For a more minute study of the theory, I must refer the reader to the writings of Engels, Seligman, Ferri, Ghent, Bax, and others quoted in these pages.

[83]Capital, Vol. I, page 406 n. (Kerr edition).

[84]Liebknecht,Memoirs of Karl Marx, page 91.

[85]Charles Darwin and Karl Marx, A Comparison, by Edward Aveling, London, 1897.

[86]See Thorold Rogers,The Economic Interpretation of History, second edition, 1891, pages 10-12.

[87]For various reasons, chief of which is that it would take me too far away from my present purpose, I do not attempt to develop the serious consequences of these events to Europe. SeeThe Economic Interpretation of History, Chapter I, for a brief account of this.

[88]Ancient Society, or Researches in the Lines of Human Progress from Savagery through Barbarism to Civilization, by Lewis H. Morgan. New edition, Chicago, 1907.

[89]Darwin,The Descent of Man, second edition, page 163.

[90]Mutual Aid a Factor of Evolution, by Peter Kropotkin, pages 5-6.

[91]Idem, page 74.

[92]Cf.Ancient Society, by Lewis H. Morgan, andThe Origins of the Family, Private Property, and the State, by Friederich Engels.

[93]Engels,Origin of the Family, Private Property, and the State, p. 182.

Such was the mode of the development of capitalistic production in its first stage. In this stage a permanent wage-working class was formed, new markets were developed, many of them by colonial expansion and territorial conquest, and production for sale and profit became the rule, instead of the exception as formerly when men produced primarily for use and sold only their surplus products. A new form of class division thus arose out of this economic soil. Instead of being bound to the land as the serfs had been under feudalism, the wage-workers were bound to their tools. They were not bound to a single master, they were not branded on the cheek, but they were, nevertheless, dependent upon the industrial lords. Economic mastery gradually shifted from the land-owning class to the class of manufacturers. The political and social history of the Middle Ages is largely the record of the struggle for supremacy which was waged between these two classes. That struggle isthe central fact of the Protestant Reformation and the Cromwellian Commonwealth.

The second stage of capitalism begins with the birth of the machine age; the introduction of the great mechanical inventions of the latter half of the seventeenth century, and the resulting industrial revolution, the salient features of which we have already traced. That revolution centered in England, whose proud but, from all other points of view than the commercial, foolish boast for a full century it was to be "the workshop of the world." The new methods of production, and the development of trade with India, and the colonies and the United States of America, providing a vast and apparently almost unlimited market, a tremendous rivalry was created among the people of England, tauntingly, but with less originality than bitterness, designated "a nation of shopkeepers" by Napoleon the First. Competition flourished and commerce grew under its mighty urge. Quite naturally, therefore, competition came to be regarded as "the life of trade," and the one supreme law of progress by British economists and statesmen. The economic conditions of the time fostered a sturdy individualism on the one hand, expressing itself in a policy oflaissez faire, which, paradoxically, they as surely destroyed. The result was the paradox of a nation of theoretic individualists becoming, through its poor laws, and more especially through the vastbody of industrial legislation which developed in spite of theories oflaissez faire, a nation of practical collectivists.

The third and last stage of capitalism is characterized by new forms of industrial ownership, administration, and control. Concentration of industry and the elimination of competition are the distinguishing features of this stage. When, more than half a century ago, the Socialists predicted an era of industrial concentration and monopoly as the outcome of the competitive struggles of the time, their prophecies were mocked and derided. Yet, at this distance of time, it is easy to see what they were foresighted enough to envisage in the future; easy enough to see that competition carries in its bosom the germs of its own inevitable destruction. In words which, as Professor Ely says,[94]seem to many, even non-Socialists, like a prophecy, Karl Marx argued that the business units in production would continuously increase in magnitude, until at last monopoly emerged from the competitive struggle. This monopoly becoming a shackle upon the system under which it has grown up, and thus becoming incompatible with capitalist conditions, socialization must, according to Marx, naturally and necessarily follow.[95]In this as in all the utterances of Marx upon the subject we are remindedof the distinction which must be made between Socialism as he conceived it and the Socialism of the Utopians. We never get away from the law of economic interpretation. Socialism, according to Marx, will develop out of capitalist society, and follow capitalism necessarily and inevitably. It is not a plan to be adopted, but a stage of social development to be reached.

For the moment, we are not concerned with the prediction that Socialism must follow the full development of capitalism. The important point for our present study is the predicted growth of monopoly out of competition, and the manner in which that prediction has been realized. Concerning the manner and extent of the fulfillment of this prediction, there have been many keen controversies, both within and without the ranks of the followers of Marx. While Marx and Engels are properly regarded as the first scientific Socialists, having been the first to postulate Socialism as the outcome of evolution, and to explore the laws of that evolution, they were not wholly free from the failings of the Utopists. It would be unreasonable to expect them to be absolutely free from the spirit of their age and their associates. There is, doubtless, something Utopian in the very mechanical conception of capitalist concentration which Marxheld; the process is too simple and sweeping, the revolution too imminent. Still, by followers and critics alike, it is generally conceded that thecontrolof the means of production is being concentrated into the hands of small and ever smaller groups of capitalists. In recent years the increase in the number of industrial establishments has not kept pace with the increase in the number of workers employed, the increase of capital, or the value of the products manufactured. Not only do we find small groups of men controlling certain industries, but a selective process is clearly observable, giving to the same groups of men control of various industries otherwise utterly unrelated.

In the early stages of the movement toward concentration and trustification, it was possible to classify the leading capitalists according to the industries with which they were identified. One set of capitalists, "Oil Kings," controlled the oil industry; another set, "Steel Kings," controlled the iron and steel industry; another set, "Coal Barons," controlled the coal industry, and so on throughout the industrial and commercial life of the nation. To-day all this has been changed. An examination of the "Directory of Directors" shows that the same men control varied enterprises. The Oil King is at the same time a Steel King, a Coal Baron, a Railway Magnate, and so on. The men who comprise the Standard Oilgroup, for instance, are found to control hundreds of other companies. They include in the scope of their directorate, banking, insurance, milling, real estate, railroad and steamship lines, gas companies, sugar, coffee, cotton, and tobacco companies, and a heterogeneous host of other concerns. Not only so, but these same men are large holders of investments in all the great European countries, as well as India, Australia, Africa, Asia, and the South American countries, while foreign capitalists similarly, but to a less extent, hold large investments in American companies. Thus, the concentration of industrial control, through its finance, has become interindustrial and is rapidly becoming international. The predictions of Marx are being fulfilled, even though not in the precise manner anticipated by him.

During recent years there have been many criticisms of the Marxian theory, aiming to show that this concentration has been, and is, much more apparent than real. Some of the most important of these criticisms have come from within the ranks of the Socialist movement itself, and have been widely exploited as portending the disintegration of the Socialist movement.Inter alia, it may be remarked here that a certain fretfulness of temper characterizesmost of the critics of Socialism. Strict adherence to the letter of Marx is pronounced as a sign of intellectual bondage of the movement and its leaders to the "Marxian fetish," and, on the other hand, every recognition of the human fallibility of Marx by a Socialist thinker is hailed as a sure portent of a split in the movement. Yet the most serious criticisms of Marx have come from the ranks of his followers—perhaps only another sign of the intellectual bankruptcy of the academic opposition to Socialism.

Of course, Marx was human and fallible. If "Capital" had never been written, there would still have been a Socialist movement, and if it could be destroyed by criticism, the Socialist movement would remain. Socialism is the product of economic conditions, not of a theory or a book. "Capital" is the intellectual explanation of the genesis of Socialism, and neither its cause nor an argument for it by which it must be judged. Hence the futility of such missions as that undertaken by Mr. W. H. Mallock, for example, based upon the assumption that attacks upon the text of Marx will serve to destroy or seriously hinder the living movement. Like a prophet's rebuke to these critics, as well as to those within the ranks of the Socialist movement who would make of the words of Marx and Engels fetters to bind the movement to a dogma, come the words of Engels, published recently, letters in which he writesvigorously to his friend Sorge concerning the working-class movement in England and America. Of his compatriots, the handful of German Socialist exiles in America, who sought to make the American workers swallow a mass of ill-digested Marxian theory, he writes, "The Germans have never understood how to apply themselves from their theory to the lever which could set the American masses in motion; to a great extent they do not understand the theory itself and treat it in a doctrinaire and dogmatic fashion.... It is a credo to them, not a guide to action." And again, "Our theory is not a dogma, but the exposition of a process of evolution, and that process involves several successive phases." Of the English movement he writes, "And here an instinctive Socialism is more and more taking possession of the masses which,fortunately, is opposed to all distinct formulation according to the dogmas of one or the other so-called organizations," and again, he condemns "the bringing down of the Marxian theory of development to a rigid orthodoxy."[96]The critics who hope to destroy the Socialist movement of to-day by stringing together mistaken predictions of Marx and Engels, or who think that Socialism is losing its grip because it is adjusting its expressions to the changed conditions which the progress of fifty years has broughtabout, utterly mistake the character of the movement. In its abandonment of the errors of Marx it is most truly Marxian—because it is expressing life instead of repeating dogma.

Doubtless Marx anticipated a much more complete concentration of capital and industry than has yet taken place; doubtless, too, he underrated the powers of endurance of some petty industries, and saw the breakdown of capitalism in a cataclysm, whereas modern Socialists see its merging into a form of socialization. But, when all this is admitted, it cannot be fairly said that the sum of criticism has seriously affected the general Marxian theory, as apart from its particular exposition by Marx himself. So far as the criticism has touched the subject of capitalist concentration, it has been pitifully weak, and the furore it has created seems almost pathetic. The main results of this criticism may be briefly summarized as follows: First, in industry, the persistence, and, in some cases, even increase, of petty industries; second, in agriculture, the failure of large-scale farming, and the decrease of the average farm acreage; third, in retail trade, the persistence of the small stores, despite the growth in size and number of the great department stores; fourth, the fact that concentration of industry does not imply a like concentration of wealth, the number of shareholders in a great industrial combination being frequently greaterthan the number of owners in the units of industry prior to the combination. At first sight, and stated in this manner, it would seem as if these conclusions, if justified by the facts, involved a serious and far-reaching criticism of the Socialist theory of a universal tendency toward the concentration of industry and commerce into units of ever increasing magnitude.

But upon closer examination, these conclusions, their accuracy admitted, are seen to involve no very damaging criticism of the theory. To the superficial observer, the mere increase in the number of industrial establishments seems a much more important matter than to the careful student, who is not easily deceived by appearances. The student sees that while some petty industries undoubtedly do increase in number, the increase of large industries employing many more workers and much larger capitals is vastly greater. Furthermore, he sees what the superficial observer constantly overlooks, namely, that these petty industries are, for the most part, unstable and transient, being continually absorbed by the larger industrial combinations or crushed out of existence, as soon as they have obtained sufficient vitality and strength to make them worthy of notice, either as tributaries to be desired or potential competitors to be feared. Petty industries in a very large number of cases represent a stage in social descent, the wreckage of larger industries whose owners are economically asdependent as the ordinary wage-workers, or even poorer and more to be pitied. Where, on the contrary, it is a stage in social ascent, the petty industry is, paradoxical as the idea may appear, frequently part of the process of industrial concentration. By independent gleaning, it endeavors to find sufficient business to maintain its existence. If it fails in this, its owner falls back to the proletarian level from which, in most instances, he arose. If it succeeds only to a degree sufficient to maintain its owner at or near the average wage-earner's level of comfort, it may pass unnoticed and unmolested. If, on the other hand, it gleans sufficient business to make it desirable as a tributary, or potentially dangerous as a competitor, the petty business is pounced upon by its mightier rival and either absorbed or crushed, according to the temper or need of the latter. Critics of the Marxian theory have for the most part completely failed to recognize this significant aspect of the subject, and attached far too much importance to the continuance of petty industries.

What is true of petty industry is true in even greater measure of retail trade. Nothing could well be further from the truth than the hasty generalization of some critics, that an increase in the number of retailbusiness establishments invalidates the theory of a progressive concentration of capital. In the first place, many of these establishments have no independence whatsoever, but are merely agencies of larger enterprises. Mr. Macrosty has shown that in London the cheap restaurants are in the hands of four or five firms, and this is a branch of business which, because it calls for relatively small capital, shows in a marked manner the increase of establishments. Much the same conditions exist in connection with the trade in milk and bread.[97]Similar conditions prevail in almost all the large cities of this country. Single companies are known to control hundreds of saloons, restaurants, cigar stores, shoe stores, bake shops, coal depots, and the like. A multitude of other businesses are subject to this rule, and it is doubtful whether, after all, there has been the real increase of individual ownership which Mr. Ghent concedes.[98]However that may be, it is certain that a very large number of the business establishments which figure as statistical units in the argument against the Socialist theory of the concentration of capital might very properly be regarded as so many evidences in its favor.

A very large number of small businesses, moreover, are really manipulated by speculators, and serve only as a means of divesting prudent and thrifty artisansand others of their little savings. Whoever has lived in the poorer quarters of a great city, where small stores are most numerous, and has watched the changes constantly occurring in the stores of the neighborhood, will realize the significance of this observation. The writer has known stores on the upper East Side of New York, where for several years he resided, change hands as many as six or seven times in a single year. What happened was generally this: A workingman having been thrown out of employment, or forced to give up his work by reason of age, sickness, or accident, decided to attempt to make a living in "business." In a few weeks, or a few months at most, his small savings were swallowed up, and he had to leave the store, making place for the next victim. An acquaintance of the writer owns six tenement houses in different parts of New York City, the ground floors of which are occupied by small stores. These stores are rented by the month just as other portions of the buildings are, and the owner, on going over his books for a period of five years, found that the average duration of tenancy in them had been less than eight months.

During the past few years in the United States, as a result of the development of the many inventions for the production of "moving pictures," a new kind of cheap, popular theater has become common. Usually the charge of admission is five cents, whencethe name "Nickelodeon"; the entertainment consists usually of a number of more or less dramatic incidents portrayed by means of the pictures, and a few songs, generally illustrated by pictures, and sung to the accompaniment of a mechanical piano. In almost every town in the United States these cheap pictorial theaters have appeared and their number will, doubtless, considerably swell the total of business establishments. In the small towns of the State of New York, the writer made an investigation and found that there were frequently several such places in the same town; that they were practically all built by the same persons, started by them, and then leased to others. These were generally people with small savings who, in the course of a few weeks, lost all their money and retired, their places being taken by other victims of the speculators. What seemed to the casual observer an admirable and conspicuous example of an increase in petty business, proved, upon closer study, to be a very striking example of concentration, disguised for purposes of speculation.

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 andelimination, 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 thatallpetty 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 noSocialist 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 régime. 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 toconcentrate 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 whichis 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 hadincreased 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.

Table of Manufacturing Establishments, 1905[103]

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 inthe 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 notnecessarily 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 theproportionhad 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 thenumberof 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 decreasedproportionof farms operated by their owners, the other to the increasednumber.

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.

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