Socialism: An Economic and Sociological Analysis

According to Marx the political faith of the individual depends upon the class to which he belongs; the political faith of his class depends upon its interests as a class. The bourgeoisie is bound to support Capitalism. On the other hand the proletariat can only achieve its purpose, can only free itself from capitalist exploitation, by preparing the way for Socialism, Thus the respective positions of the bourgeoisie and the proletariat in the political arena are defined in advance. Perhaps no doctrine of Marx has made a deeper or more lasting impression on political theory than this. It has found acceptance far beyond the immediate range of Marxism. Liberalism has come to be regarded as the doctrine in which the class interests of the bourgeoisie and of big business find expression. Whoever professes liberal opinions is considered to be a more or less well-meaning representative of the special interests which stand in opposition to the general good. Economists who reject the Marxian doctrine are characterized as the ‘spiritual bodyguard of the profits of capital — and sometimes also of ground-rents’1  — a remarkably convenient theory which saves the Marxian the trouble of arguing with them.

Nothing indicates more clearly the widespread recognition which has been accorded to this doctrine of Marx than its acceptance even by the opponents of Socialism. When people suggest that the defeat of socialist effort is a task chiefly or even exclusively for the propertied classes; when they attempt to form a ‘united front’ of all the bourgeois parties in order to oppose Socialism; they then admit that the maintenance of private property in the means of production is the Special interest of a certain class, and that it is antagonistic to the public welfare. These strangely short-sighted adversaries of Socialism do not realize that any attempt on the part of a class, which is comparatively small when contrasted with the masses, to defend its particular interests must be futile; they do not recognize that private property is doomed when it is regarded as the privilege of its owners. Still less are they able to perceive that their assumption is radically contradicted by the experience of the formation of actual political parties.

Liberalism is not a doctrine which serves the class interests of those in possession of property. Whoever conceives it as such has already admitted one of the leading contentions of Socialism; he is no liberal. Liberalism upholds private property not in the interests of the owners, but in the general interest; it believes that the maintenance of the capitalist system is to the advantage not only of the capitalists but of every member of society. It admits that in the socialist community there will, in all probability, be little or no inequality of income. But it urges that owing to the smaller yield of socialist production, the total amount to be shared will be considerably smaller, so that each individual will receive less than the poorest receives to-day. Whether this thesis is accepted or rejected is another question. This is precisely the point upon which Socialism and Liberalism are in conflict. Whoever rejects it out of hand, rejects Liberalism. Yet it would be unreasonable to do this without careful consideration of the problem and of the arguments of either sides.

In fact nothing is further from the particular interests of the entrepreneurs, whether as individuals or as a class, than to defend the principle of private property or to resist the principle of Socialism. That the introduction of Socialism must necessarily injure the entrepreneurs and capitalists, or at least their children, cannot be disputed by those who believe that Socialism implies want and distress for all. To this extent, therefore, the propertied classes are admittedly concerned in resisting Socialism. But their interest is no greater than that of any other member of society and is quite independent of their privileged position. If it were possible to imagine that Socialism would be introduced lock stock and barrel overnight, then it might be said that the entrepreneurs and capitalists had special reasons for wishing to maintain the capitalist system. They would have more to lose. Even if the distress which resulted from the reorganization were the same for all, those would suffer more whose fall had been the greater. But it is not possible to imagine that Socialism will be introduced so rapidly; and if it were, it may be assumed that the entrepreneurs, by reason of their expert knowledge and ability to take responsibility, would occupy, at any rate for a time, privileged positions within the socialist organization.

The entrepreneur is unable to provide for his grandchildren and great-grandchildren. For it is characteristic of private property in the means of production under the capitalist system that it creates no permanent source of income. Every fortune must be renewed by effort. When the feudal lord supported the feudal system he was defending not only his own property but that of his descendants. But the entrepreneur in the capitalist system knows that his children and grandchildren will only survive in the face of new competition if they can hold their ground as directors of productive enterprise. If he is concerned for the fate of his successors and wants to consolidate his property for them in a way contrary to the interests of the community, he will have to become an enemy of the capitalist social order and demand every kind of restriction on competition. Even the way to Socialism may strike him as the best means for this, provided the transition does not take place too suddenly, for he may expect compensation against expropriation so that, for a longer or shorter time, the expropriated will enjoy a secure income in place of the uncertainty and insecurity that is the lot of owners of an enterprise. Consideration for his own property and for the property of his successors may, therefore, urge the entrepreneurs rather to support than to oppose Socialism. He must welcome all efforts which aim at suppressing newly created and newly developed fortunes, especially all measures intended to limit anything in the nature of economic freedom, because they make secure the income which otherwise must be earned by daily struggle as long as competition is not restricted — because they exclude new competitors.2

Entrepreneurs have an interest in combining to proceed uniformly in wage negotiations with the workers organized in trade unions.3  And they have an interest in combining to carry through tariff and other restrictions which conflict with the essence and principle of Liberalism or to resist government interference which may injure them. But they have absolutely no special interest in fighting Socialism and socialization as such. They have no special interest in fighting destructionism. The whole purpose of the entrepreneur is to adjust himself to the economic contingencies of any moment. His aim is not to fight Socialism, but to adjust himself to conditions created by a policy directed towards socialization. It is not to be expected that entrepreneurs or any other particular group in the community should, out of self-interest, necessarily make the general principles of well-being the maxim of their own procedure. The necessities of life compel them to make the best of any given circumstances. It is not the business of the entrepreneurs to lead the political fight against Socialism; all that concerns them is to adjust themselves and their enterprises to the situations created by the measures directed towards socialization, so that they will make the greatest profit possible under the conditions prevailing.

It follows therefore, that neither associations of entrepreneurs, nor those organizations in which the entrepreneurs’ support counts, are inclined to fight on principle against Socialism. The entrepreneur, the man who seizes the opportunity of the moment, has little interest in the issue of a secular struggle of indefinite duration. His interest is to adjust himself to the circumstances in which he finds himself at the moment. An entrepreneurs’ organization aims solely at repulsing some individual encroachment of the trade unions; or it may oppose acts of legislation, such as special forms of taxation. It carries out the tasks assigned to it by parliaments and governments in cases where it is desired that the organized body of entrepreneurs should co-operate with the organized working class in order to give the destructionist element its say in the national economy. To fight on principle for the maintenance of an economy based on private property in the means of production is no part of the programme of organized entrepreneurs. Its attitude towards Liberalism is one of indifference or even, as in the case of tariff policy, of antagonism.

Organized interests, as the socialist doctrine depicts them, correspond not to the entrepreneurs’ associations but to the farmers’ unions, which advocate tariff duties on agricultural products, or those associations of small producers, which — above all in Austria — press for the exclusion of competition. These clearly are not efforts on behalf of Liberalism.

Thus there are no individuals and no classes whose particular interests would lead them to support Capitalism as such. The policy of Liberalism is the policy of the common good, the policy of subjecting particular interests to the public welfare — a process that demands from the individual not so much a renunciation of his own interests as a perception of the harmony of all individual interests. There are, therefore, no individuals and no groups whose interests would ultimately be better guarded by Socialism than by a society based on private ownership in the means of production. But although ultimately no one’s interests would actually be better served by Socialism, there are plenty of people whose particular interests of the moment are better guarded by a policy directed towards socialization than by the maintenance of Liberalism. Liberalism has opposed everything in the nature of a sinecure and has sought to reduce to a minimum the number of public officials. The interventionist policy provides thousands and thousands of people with safe, placid, and not too strenuous jobs at the expense of the rest of society. All nationalization or setting up of a municipal or public enterprise links private interests with the movement against private property. To-day Socialism and destructionism find their strongest supporters in the millions for whom a return to a freer economy would be at first and in the short run detrimental to their particular interests.

• 1Thus by Kautsky (quoted by Georg Adler, Grundlagen der Karl Marxchen Kritik der bestchenden Volkwirtschaft, Tübingen 1887, p. 511).
• 2‘Beaucoup d’ouvriers, et non les meilleurs, préfèrent le travail payé à la journée au travail à la tâche. Beaucoup d’entrepreneurs, et non les meilleurs, préfèraient les conditions qu’ils espèrent pouvoir obtenir d’un Etat socialiste a celles que leur fait un regime de libre concurrence. Sous ce regime les entrepreneurs sont des “fonctionnaires” pavès à la tâche; avec une organisation socialiste ils deviendraient des “fonctionnaires” payés à la journée”. Pareto, Cours d’Economie Politique, Vol. II, p. 97, n.
• 3Hurt, The Theory of Collective Bargaining, p. 25 et seq.