Socialism As It Is

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The most anti-social aspects of capitalism, whether in its individualist
or its collectivist form, are the grossly unequal educational and
occupational privileges it gives the young. An examination of the better
positions now being obtained by men and women not yet past middle age
will show, let us say, that ten times as many prizes are going to
persons who were given good educational opportunities as to those who
were not. But as the children of those who can afford such opportunities
are not a tenth as numerous as the children of the rest of the people,
this would mean that the latter have only a _hundredth part_ of the
former's opportunities. Under this supposition, one tenth of the
population secures ten elevenths of the positions for which a higher
education is required. As a matter of fact, the existing inequality of
opportunity is undoubtedly very much greater than this, and the unequal
distribution of opportunities is visibly and rapidly becoming still less
equal. In 1910, of nineteen million pupils of public and private schools
in this country, only one million were securing a secondary, and less
than a third of a million a higher, education. Here are some figures
gathered by the Russell Sage Foundation in its recent survey of public
school management. The report covers 386 of the larger cities of the
Union. Out of every 100 children who enter the schools, 45 drop out
before the sixth year; that is, before they have learned to read
English. Only 25 of the remainder graduate and enter the high schools,
and of these but 6 complete the course.

The expense of a superior education, including upkeep during the
increasing number of years required, is rising many times more rapidly
than the income of the average man. At the same time, both the wealth
and the numbers of the well-to-do are increasing in greater proportion
than those of the rest of the people. While the better places get
farther and farther out of the reach of the children of the masses,
owing to the overcrowding of the professions by children of the
well-to-do, the competition becomes ever keener, and the poor boy or
girl who must struggle not only against this excessive competition, but
also against his economic handicap, confronts an almost superhuman task.

It is obvious that this tendency cannot be reversed, no matter how
rapidly the people's income is increased, unless it rises _more rapidly_
than that of the well-to-do. And this, Socialists believe, has never
happened except when the masses obtained political power and made full
use of it _against_ the class in control of industry and government.

No amount of material progress and no reorganization of industry or
government which does not promise to equalize opportunity,--however
rapid or even sensational it may be,--is of the first moment to the
Socialists of the movement. Wages might increase 5 or 10 per cent every
year, as profits increase to-day; hours might be shortened and the
intensity of labor lessened; and yet the gulf between the classes might
be growing wider than ever. If society is to progress toward industrial
democracy, it is necessary that the people should fix their attention,
not merely on the improvement of their own condition, but on their
progress _when compared with that of the capitalist classes, i.e._ when
measured by present-day civilization and the possibilities it affords.

_No matter how fast wages increase, if profits increase faster, we are
journeying not towards social democracy, but towards a caste society._
Thus to insist that we must keep our eyes on the prosperity of others in
order to measure our own seems like preaching envy or class hatred. But
in social questions the laws of individual morality are often reversed.
It is _the social duty_ of every less prosperous class of citizens,
their duty towards the whole of the coming generation as well as to
their own children, to measure their own progress solely by a standard
raised in accordance with the point in evolution that society has
attained. What would have been comparative luxury a hundred years ago it
is our duty to view as nothing less than a degrading and life-destroying
poverty to-day.

Opportunity is not becoming equal. The tendency is in the opposite
direction, and not all the reforms of "State Socialism" promise to
counteract it. The _citizen owes it to society_ to ask of every
proposed program of change, "Will it, within a reasonable period, bring
equality of opportunity?" To rest satisfied with less--a so-called
tendency of certain reforms in the right _direction_ may be wholly
illusory--is not only to abandon one's rights and those of one's
children, but to rob society of the only possible assurance of the
maximum of progress.

FOOTNOTES:

[83] Henry George, "Progress and Poverty," Vol. II, p. 515.

[84] John Mitchell, "Organized Labor" (Preface).

[85] John A. Hobson, "The Crisis of Liberalism," p. 100.

[86] For this and later quotations from Dr. Eliot in this chapter, see
his little book entitled "More Money for the Public Schools."

[87] See article by Dr. Eliot in the _School Review_, April, 1909.

[88] "Knowledge and Education," the _Independent_, 1910.

[89] Dexter, "History of Education in the United States," p. 173.

CHAPTER VIII

THE "FIRST STEP" TOWARDS SOCIALISM

"State Socialism" as I have described it will doubtless continue to be
the guiding policy of governments during a large part, if not all, of
the present generation. Capitalism, in this new collectivist form, must
bring about extremely deep-seated and far-reaching changes in society.
And every step that it takes in the nationalization of industry and the
appropriation of land rent would also be a step in Socialism, _provided_
the rents and profits so turned into the coffers of the State were not
used entirely for the benefit either of industry or of the community as
a whole, as it is now constituted, but were reserved in part _for the
special benefit of the less wealthy, less educated, and less
advantageously placed, so as gradually to equalize income, influence,
and opportunity_.

But what, as matter of fact, are the ways in which the new revenues are
likely to be used before the Socialists are either actually or
practically in control of the government? First of all, they will be
used for the further development of industry itself and of schemes which
aid industry, as by affording cheaper credit, cheaper transportation,
cheaper lumber, cheaper coal, etc., which will chiefly benefit the
manufacturers, since all these raw materials and services are so much
more largely used in industry than in private consumption.

Secondly, the new sources of government revenue will be used to relieve
certain older forms of taxation. The very moderately graduated income
and inheritance taxes which are now common, small capitalists have
tolerated principally on the ground that the State is in absolute need
of them for essential expenses. We may soon expect a period when the
present rapid expansion of this form of taxation as well as other direct
taxes on industry, building, corporations, etc., will be checked
somewhat by the new revenues obtained from the profits of government
enterprises and the taxation of ground values. Indirect taxation of the
consuming public in general, through tariffs and internal revenue taxes,
will also be materially lightened. As soon as new and larger sources of
income are created, the cry of the consumers for relief will be louder
than ever, and since a large part of consumption is that of the
capitalists in manufacture, the cry will be heard. This will mean lower
prices. But in the long run salaries and wages accommodate themselves to
prices, so that this reform, beneficial as it may be, cannot be accepted
as meaning, for the masses, more than a merely temporary relief. A third
form of tax reduction would be the special exemption of the poorer
classes from even the smallest direct taxation. But as employers and
wage boards, in fixing wages, will take this reduction into account, as
well as the lower prices and rents, such exemptions will effect no great
or lasting change in the division of the national income between
capitalists and receivers of salaries and wages.

A third way in which the new and vastly increased incomes of the
national and local governments can be expended is the communistic way,
as in developing commercial and technical education, in protecting the
public health, in building model tenements, in decreasing the cost of
traveling for health or business, and in promoting all measures that are
likely to increase industrial efficiency and profits without too great
cost.

A fourth way in which the new revenue may be expended, before the
Socialists are in actual or practical control, would be in somewhat
increasing the wages and somewhat shortening the hours of the State and
municipal employees, who will soon constitute a very large proportion of
the community. Here again it is impossible to expect any but a Socialist
government to go very far. As I have shown, it is to be questioned
whether any capitalistic administration, however advanced, would
increase real wages (wages measured by their purchasing power), except
in so far as the higher wages will result in a corresponding or greater
increase in efficiency, and so in the profits made from labor. And the
same law applies to most other governmental (or private) expenditures on
behalf of labor, whether in shortened hours, insurance, improved
conditions, or any other form.

The very essence of capitalist collectivism is that the share of the
total profits which goes to the ruling class should not be decreased,
and if possible should be augmented. In spite of material improvements
the economic gulf between the classes, during the period it dominates,
will either remain as it is, or become wider and deeper than before. On
the ground of the health and ultimate working efficiency of the present
and future generation, hours may be considerably shortened, and the
labor of women and children considerably curtailed. Insurance against
death, old age, sickness, and accident will doubtless be taken over by
the government. Mothers who are unable to take care of their children
will probably be pensioned, as now proposed in France, and many children
will be publicly fed in school, as in a number of the British and
Continental places. The most complete code of labor legislation is
practically assured; for, as government ownership extends, the State
will become to some extent the model employer.

A quarter of a century ago, especially in Great Britain and the United
States, but also in other countries, the method of allaying discontent
was to distract public attention from politics altogether by stimulating
the chase after private wealth. But as private wealth is more and more
difficult to attain, this policy is rapidly replaced by the very
opposite tactics, to keep the people absorbed in the political chase
after the material benefits of economic reform. For this purpose every
effort is being used to stimulate political interest, to popularize the
measures of the new State capitalism, to foster public movements in
their behalf, and finally to grant the reforms, not as a new form of
capitalism, but as "concessions to public opinion." At present it is
only the most powerful of the large capitalists and the most radical of
the small that have fully adapted themselves to the new policies. But
this will cause no serious delay, for among policies, as elsewhere, the
fittest are surely destined to survive.

Ten years ago it would have been held as highly improbable that we would
enter into such a collectivist period in half a century. Already a large
part of the present generation expect to see it in their lifetime. And
the constantly accelerated developments of recent years justify the
belief of many that we may find ourselves far advanced in "State
Socialism" before another decade has passed.

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

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

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

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

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

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

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

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

The heavily graduated income tax.
The abolition of inheritance.
A government bank with an exclusive monopoly.
A partial nationalization of factories.
(No doubt, the part they would select would be that operated
by the trusts.)
Government cultivation of waste lands.

Here we have a program closely resembling that of "State capitalism." It
omits the important labor legislation for increasing efficiency, since
this was unprofitable under competitive and extra-governmental
capitalism, and in Marx's time had not yet appeared; _e.g._ the minimum
wage, a shorter working day, and workingmen's insurance. As Marx and
Engels mention, however, the substitution of industrial education for
child labor (one of the most important and typical of these reforms),
they would surely have included other measures of the same order, had
they been practicable and under discussion at the time.

There can be little doubt that Marx and Engels, in this early
pronunciamento, were purposely ambiguous in their language. For example,
they demand "the extension of factories and instruments of production
owned by the state." This is plainly a conservatively capitalistic or a
revolutionary Socialist measure entirely according to the degree to
which, and the hands by which, it is carried out--and the same is
evidently true of the appropriation of land rent and the abolition of
inheritance. This is what Marx means when he says that every such
measure is "self-contradictory and must be such of necessity." Up to a
certain point they put capitalism on "a larger basis"; if carried beyond
that, they may, _in the right hands_, become steps in Socialism.

Marx and Engels were neither able nor willing to lay out a program which
would distinguish sharply between measures that would be transitional
and those that would be Socialist sixty or seventy years after they
wrote, but merely gave concrete illustrations of their policy; they
stated explicitly that such reforms would vary from country to country,
and only claimed for those they mentioned that they would be "pretty
generally applicable." Yet, understood in the sense in which it was
originally promulgated and afterwards explained, this early Socialist
program still affords the most valuable key we have as to what Socialism
is, if we view it on the side of its practical efforts rather than on
that of abstract theories. Marx and Engels recognize that the measures I
have mentioned must be acknowledged as "insufficient and untenable,"
because, though they involve "inroads on the rights of property," they
do not go far enough to destroy capitalism and establish a Socialistic
society. But they reassure their Socialistic critics by pointing out
that these "insufficient" and "transitory" measures, "in the course of
the movement, outstrip themselves, _necessitate further inroads on the
old social order_, and are indispensable as a means of entirely
revolutionizing the mode of production." (My italics.)

That is, "State Socialism" is indispensable as a basis for Socialism,
indeed necessitates it, provided Socialists look upon "State Socialist"
measures chiefly as transitory _means_ "to raise the proletariat to the
position of ruling class"; for this rise of the proletariat to the
position of ruling class is necessarily "the _first step_ in the
revolution of the working class."

From the day of this first step the whole direction of social evolution
would be altered. For, while the Socialists expect to utilize every
reform of capitalist collectivism, and can only build on that
foundation, their later policy would be diametrically opposed to it. A
Socialist government would begin immediately an almost complete reversal
of the statesmanship of "State Socialism." The first measure it would
undertake would be to begin at once to increase wages _faster than the
rate of increase of the total wealth of the community_. Secondly, within
a few years, it would give to the masses of the population, according to
their abilities, all the education needed to fill _from the ranks of the
non-capitalistic classes_ a proportion of all the most desirable and
important positions in the community, corresponding to their numbers,
and would see to it that they got these positions.

It is undoubtedly the opinion of the most representative figures of the
international Socialist movement that there is not the slightest
possibility that any of the non-Socialist reformers of to-day or of the
near future are following or will follow any such policy, or even take
the slightest step in that direction; and that there is nothing
Socialists can do to force such a policy on the capitalists until they
are actually or practically in power. Society may continue to progress,
but it is surely inconceivable to any close observer, as it is
inconceivable to the Socialists, that the privileged classes will ever
consent, without the most violent struggle, to a program which, viewed
as a whole, would lead, _however gradually or indirectly_, to a more
equitable distribution of wealth and political power.