Karl Kautsky

The Social Revolution


Volume II
On the Day after the Social Revolution
(Part 1)

I must first of all clear away a suspicion which will be roused in many people by the title of this work. On the Day after the Revolution! Does not that mean that we “orthodox” Marxists are only disguised Blanquists who expect by a coup d’etat to make ourselves dictators, and is not it a return to Utopianism when I attempt to describe a movement of which we can know nothing as to the circumstances under which it will take place?

I hasten then to remark that I consider the revolution an historical process that may easily draw itself out into a decade of hard battles. On the other side I am thoroughly convinced that it is not our task to invent recipes for the kitchens of the future, and when more than ten years ago the German Social democracy proposed to include in its program demands for such measures as would accelerate the transformation from a capitalist to a socialist manner of production, I opposed this because I maintained that the party could not lay out a definite road for conditions of which we can have only a dim presentiment and which may easily surprise us with much that is wholly unexpected.

But I maintain that it is a help to political clearness to examine the problems that will grow out of the conquest of political power by us. This is also valuable for propaganda since our opponents frequently assert that our victory will give us unsoluble problems, and we have in our own ranks also people who are unable to paint the results of our victory black enough. According to these people the day of our victory is also the day of our downfall. Therefore it is important to investigate and know how far this is the case.

But if one wishes to attain definite results in this direction and not get lost in endless windings, then we must investigate these problems in a simple form such as never exists in reality and abstracted from all complications. This is a customary process in science whereby one remains entirely conscious that in reality things are never so simple, or develop so smoothly as is the case in the abstraction. I have already said that the social revolution is a process of many years. But to reduce things to their simplest forms we must proceed from the idea that on some fine day the proletariat captures entire political power without restrictions at one stroke and is enabled to exercise it in strict accord with its class interests. The first certainly could not occur and the latter can never be completely the case. The proletariat itself is not sufficiently united nor enough of a uniform mass to permit such a condition. The proletariat divides into perceptibly different grades, different in their rate of development, different also in their intellectual and economic stage of evolution. It is also very probable that simultaneous with the rise of the proletariat other social grades close to them will be raised, such for example as a portion of the small bourgeoisie, or the small farmers, whose intellectual attitude is not yet fully proletarian. Friction and mistakes of manifold forms will rise from this, so that we shall never come to just what we wish and shall never have exactly that which we should have. We must however at this time leave these disturbing factors out of consideration.

On the other hand we must proceed throughout this investigation from certain assumptions. We cannot accept as our foundation a picture of the conditions as they may develop in the future for this would lead us into fantasies. And yet it is certain that we shall not gain our victory under present conditions. Revolution itself presupposes a long and profound struggle that will in itself greatly change our present social and political structure. After the conquest of political power by the proletariat, problems will arise of which we know nothing and many with which we are occupied to-day will by that time be solved. New means to the solution of these different problems will also arise of which we to-day have no suspicion.

Just as in natural philosophy the laws of falling bodies are investigated in a vacuum and not in moving air so here we investigate the situation of the conquering proletariat under presumptions which cannot occur in their complete purity; that is under the postulate that some morning we shall at a single blow come into complete domination while the means which Will be at hand for the solution of our task will be those that exist to-day. We can by this means attain results that will be differentiated from the actual course of coming events in exactly the same way as the laws of falling bodies differ from the actual fall of various substances. But in spite of these variations the laws of falling bodies actually exist and govern the fall of every single substance and the rate of fall of these can only be determined when we have first understood these laws.

So it is that the outlooks and obstacles for the conquering proletariat actually will be discovered in the road we shall take (taking it for granted that we apply our method correctly) and they will undoubtedly play an important role in the social revolution and its resultants, even if the actuality is something wholly different from that we here consider it. And it is only in this way that one can come to scientifically definite judgments concerning the outcome of the revolution. Those to whom this road appears too uncertain to form a basis for prognostication must remain silent whenever this subject is under discussion and simply declare: “Whoever lives will know how it will come out and what is undeniably the proper road.”

Only such problems of the social revolution are capable of discussion as can be determined in this manner. Concerning all others no judgment can be made either in this or in any other direction.



The Expropriation of the Expropriators

Let us imagine then that this fine day has already come, in which at one stroke all power is thrown into the lap of the proletariat. How would it begin? Not how would it begin upon the grounds of this or that theory, or opinion, but must begin, driven thereto by its class interests and the compulsion of economic necessity.

In the first place it is self-evident that it would recover what the bourgeoisie has lost. It would sweep all remnants of feudalism away and realize that democratic programme for which the bourgeoisie once stood. As the lowest of all classes it is also the most democratic of all classes. It would extend universal suffrage to every individual and establish complete freedom of press and assemblage. It would make the State completely independent of the church and abolish all rights of inheritance. It would establish complete autonomy in all individual communities and abolish militarism. This last could be brought about in two ways; through the introduction of universal armament and the dissolution of the army. Universal armament is a political measure and dissolution of the army a financial one. The former can under certain conditions cost as much as a standing army. But it is essential to the security of democracy, in order to take away from the government its most powerful means of opposing the people. Dissolution again aims mainly at a diminution of the military budget.

It can, however, be carried through in such a manner as to strengthen still further the power of the government, if in place of an army built on universal compulsory military service an army of characterless slum proletariat is substituted which Will lend itself to anything for money. A proletarian regime would necessarily find a way to unite both methods so as to arm the people and to simultaneously make an end of the disturbance brought about by the installation of new weapons, cannons, warships and fortresses.

Undoubtedly the victorious proletariat would also make fundamental reforms in taxation. It would endeavor to abolish all the taxes that today rest upon the laboring population – first of all the indirect ones that increase the cost of living, and would draw the sums necessary to the covering of governmental expenses from the great properties by means of a progressive income tax supplemented by a property tax. I shall return to this point later. This must suffice for the present suggestion.

A particularly important field for us is that of education. Popular schools have always occupied the attention of proletarian parties and they even played a great role in the old communistic sects of the Middle Ages. It must always be one of the aims of the thinking proletariat to deprive the possessing classes of the monopoly of culture. It is self-evident that the new regime would increase and improve the schools and pay their teachers better. But we would go still further. To be sure the victorious proletariat, no matter how radically minded it may be, cannot at a single stroke abolish class differences, for these have risen from many centuries of development and these causes and their results are not swept away as easily as a chalk mark is wiped from a slate with a sponge. But the school can prepare the road in this direction and contribute very essentially to the abolition of class differences in that all children will be equally well nourished and clothed, and instructed in the same manner while at the same time the possibility of a diverse development of their intellectual and bodily activities is retained.

We must not over value the influence of the school. Life is mightier than it and where it comes in opposition to actuality it will certainly be forced to give way. When, for example, the effort is made to-day to abolish class difference through the schools not much progress can be made. But the school can, when it works in the direction of the existing social development, powerfully assist this movement. Where these social conditions are also operating in the direction of class interests the school can co-operate and, at least within a limited sphere, realize for the generation which is growing up in this period what the whole society of this generation is simultaneously growing toward.

All these are means that bourgeois radicalism has already placed before itself, but a certain power, and a disregard of capital of which no bourgeois class is capable are essential to such an attainment. Such a school as is here outlined would, in Germany, for example, according to the reckoning which I have made in my Agrarfrage demand one and a half or two million marks yearly. Almost double the present military budget! Such a sum for school purposes can only be obtained by a proletarian ruled community that does not maintain a respectful attitude towards great incomes.

But the revolution would naturally not stop at these transformations. It would not be simply a bourgeois democratic, but a proletarian revolution. We shall not, as we have already stated, investigate what the proletariat would do upon the basis of this or that theory, for we do not know what theories may appear or under what circumstances the next revolution will be carried through. We will only investigate what a victorious proletariat, if it is to advance purposefully, will be compelled to do by the pressure of economic conditions.

There is one problem above all others with which the proletarian regime must primarily occupy itself. It will in all cases be compelled to solve the question of the relief of the unemployed. Enforced idleness is the greatest curse of the laborer. For him it signifies misery, humiliation, crime. The laborer lives only from the sale of his labor power and when he can find no purchaser for this he is delivered up to hunger. And even when the laborer has found his labor the unemployed still torture him, for he is never secure from the loss of his labor and consequent misery. A proletarian regime would in every case make an end to this condition even if the proletarians were not Socialists but simply Liberals as in England. In just what manner the problem of the unemployed would be solved we shall not here attempt to investigate. There are many different methods, and many plans to this end have been made by sociologists. For example it has been sought from the bourgeois point of view to insure against the necessity of unemployment by taxation, and in part this has been done. But a bourgeois society can only create the most insufficient patchwork in this field because it is itself the bough from which unemployment hangs. Only the proletariat and the victorious proletariat can and will enact the measures which are capable of completely abolishing the necessity of the unemployed whether this be through sickness or otherwise. An actually effective maintenance of all the unemployed must completely alter the relative strength of the proletariat and capitalist. It will make the proletariat master in the factory. That the laborer of to-day is compelled to sell himself to the employer and that the latter can exploit and enslave him is because of the ghost of the unemployed and the hunger whip that swings above his head. If the laborer can once be secure of existence even when he is not working, nothing would be easier than for him to overthrow capital. He no longer needs capitalists, while the latter cannot continue his business without him. Once things have gone thus far the employer would be beaten in every conflict with his employees and be quickly compelled to give in to them. The capitalists could then perhaps continue to be the directors of the factories, but they would cease to be their masters and exploiters. Once the capitalists recognized, however, that they had the right to bear only the risk and burdens of capitalist business, these men would be the very first ones to renounce the further extension of capitalist production and to demand that their undertakings be purchased because they could no longer carry them on with any advantage. We have already had similar results. This was the case, for example, in Ireland at the time the anti-rent movement reached its highest point and the land owners were not in a position to forcibly collect their rents. Accordingly it was the landlords themselves who demanded that the State purchase all their landed possessions. We could expect the same from the capitalist undertakers under a proletarian regime, even if this regime was not dominated by socialist theories and did not proceed directly from the point of view of bringing the capitalist means of production into social possession. Capitalists would themselves demand that their means of production be purchased. The political domination of the proletariat and the continuation of the capitalist system of production are irreconcilable. Whoever concedes the possibility of the first must also grant the possibility of the disappearance of the latter.

The question then arises as to what purchasers are at the command of capitalists when they wish to sell their undertakings. A portion of the factories, mines, etc., could be sold directly to the laborers who are working them, and could be henceforth operated co-operatively; another portion could be sold to cooperatives of distribution, and still another to the communities or to the states. It is clear, however, that capital would find its most extensive and generous purchaser in the States or municipalities, and for this very reason the majority of the industries would pass into the possession of the States and municipalities. That the Social Democrats when they came into control would strive consciously for this solution is well recognized. On the other side, even a proletariat which was not governed by socialist ideas would proceed from the point of view of transforming into State or municipal property those industries which for natural reasons – for example, mines – or through the form of their organization – as, for example, trusts – have become monopolies.

These private monopolies have become unbearable, not simply for the wage-workers, but for all classes of society who do not share in their ownership. It is only the weakness of the bourgeois world, as opposed to capital, which hinders it from taking effective action against these monopolies. A proletarian revolution must from its very necessity lead to the abolition of private property in these monopolies. They are to-day very extensive and dominate in a high grade the whole economic life and develop with great rapidity. Their nationalization and communalization signifies simply the domination of the whole productive process by society and its organs, – the State and municipalities.

The industries which are most prepared for nationalization are the national means of transportation, railroads and steamships, together with those which produce raw material and partially produced goods; for example, mines, forests, iron foundries, machine manufactures etc. These are also the very spheres where the great industries and trustification are highest developed. The manufacture of raw material and partially produced articles for personal consumption as well as small trading have many local characteristics, and are still largely decentralized. In these spheres the municipality and co-operatives will come more to the front, leaving the national industries to play a secondary role. But with the increasing division of labor, production for direct personal consumption becomes of less and less importance compared with the production of means of production, and therewith also the sphere of governmental production increases. On the other side this field is extended by the development of commerce and of the great industries, which bursts the local bonds of the market for each branch of production one after another, and transforms one after another from a local into a national industry. For example, gas lighting is clearly a municipal business. The development of electric lighting and the transformation of power in mountainous regions makes the nationalization of water power necessary. This operates also to transform illumination from a municipal to a national business. Again, the business of the shoemaker was formerly confined to the local market. The shoe factory does not supply simply the community, but the whole nation, with its production, and is ripe not for communalization, but for nationalization. The same is true of sugar factories, breweries, etc.

The trend of evolution under a proletarian regime would be towards making the national form of industry predominant.

So much then concerning the property in the means of production of the great industries, including those in agriculture. What then is to happen to money capital and landed property? Money capital is that portion of capital taking the form of interest-bearing loans. The money capitalist fulfills no personal function in the social life, and can without difficulty be at once expropriated. This will be all the more readily done as it is this portion of the capitalist class, the financier, who is most superfluous, and who is continually usurping domination over the whole economic life. He is also the master of the great private monopolies, the trusts, etc., and it is therefore impossible to expropriate industrial capital without including money capital. They are too completely bound up in each other. The socialization of capitalist industry (as one may designate for short the transference to national, municipal and co-operative possession) will carry with it the socialization of the greater part of the money capital. When a factory or a piece of landed property is nationalized, its debts will be also nationalized, and private debts will become public debts. In the case of a corporation the stockholders will become holders of government bonds.

In this connection comes the consideration of landed property. I refer here to property in land, and not agricultural industry. The great capitalistic socially operated agricultural industries will be subject to the same evolution as the other great industries. They will lose their wage-slaves and be compelled to offer their possessions to the State or municipality for purchase, and will thereby become socialized. The little farming industries may well remain private property, But I shall return to this subject later.

But we are not here discussing agricultural industry, but the ownership of land, independent of industry, the private property in the ground that yields to its possessor ground rent, through leasing or renting or interest on a mortgage, whether the property be urban or rural.

What we said of the money capitalist holds true also of the land owner. He likewise has no longer any personal function to fulfill in the economic life, and can easily be shoved to one side. As noted above in the instance of private monopoly, so with regard to private property in land, we find much opposition even in bourgeois circles, which expresses itself in a demand for socialization, since this private land monopoly is constantly growing more oppressive and injurious, especially in the cities.

Here also nothing is lacking but the necessary power to bring about socialization. The victorious proletariat will furnish this power.

The expropriation of the exploiting classes presents itself purely as a question of power. It proceeds essentially from the economic necessities of the proletariat, and will be the inevitable result of their victory.



Confiscation or Compensation

The question of the possibility and necessity of the expropriation of the exploiters can be answered with much greater degree of certainty than the question which naturally arises therefrom: Will the expropriation proceed as a process of confiscation or compensation; will the previous possessors be indemnified or not? This is a question which it is impossible to answer to-day. We are not the ones who will have to complete this development. It is now impossible to determine any force inherent in conditions which will make either one answer or the other necessary. In spite of this, there are, however, a number of reasons which indicate that a proletarian regime will seek the road of compensation, and payment of the capitalists and landowners. I will here mention but two of these reasons which appear the most important to me. Money capital, as already stated, has become an impersonal power, and every sum of money can to-day be transformed into money capital without the owner actively functioning as a capitalist. We know that when a man has saved a mark to-day he can put it out at interest without thereby becoming a capitalist. As is well known, this phenomenon has been widely utilized by the optimistic representatives of the existing order. They conclude that this gives an easy way for the expropriation of the capitalist by the laborers depositing their total of saved pennies in the saving banks or purchasing shares in the corporations with them, and thereby becoming partners in capital. At other times these optimists say that if we were to confiscate capital to-day we must confiscate not alone the capital of the rich, but that of the laborers also, in which case we would be taking away the scanty savings of the poor, the widows and the orphans. In this manner we would arouse great discontent among the laborers themselves, another reason which would tend to provoke them to the overthrow of their own domination, a result which these glorifiers of the existing order await with greatest certainty.

The first assumption I do not need to discuss further. It is too foolish. The people who expect to see capital expropriated by the increase of savings are blind to a much more rapid increase of large private capitals. On the other hand, it is not wholly unjustifiable to say that a proletarian regime pledged to universal confiscation would also confiscate the savings of small traders. That would not be a reason why the laborers should find their own rule unnecessary. (One must be hard up for plausible arguments against a social revolution when he makes use of such anticipations.) But it might become a reason for the conquering proletariat to stop in the confiscation of the means of production.

If, however, that should happen, one could ask, What justice has the laboring class received from expropriation? It works simply to make all capital become simple money capital; and all the capital being transformed into national, state and co-operative bonds, any surplus value which the capitalists have drawn directly from the laborers will flow to them from the nations, states and co-operatives. Is this in any way to change the condition of the laborer?

This question is wholly justifiable. But even if a proletarian regime should permit the same amount of profit to flow to capital that it had formerly received, the expropriation through a continuance of proletarian rule would have brought great advantages with it, in that a further increase of exploitation from then on would be impossible. Any new application of capital as well as every increase would be excluded together with all increase in ground rent. This alone would be a significant result of proletarian transformation. Every further increase of social wealth would from then on inhere to the good of all society.

But together with this there would come still another advantage. As soon as all the capitalist wealth had taken the form of bonds of states, municipalities and. co-operatives, it would be possible to raise a progressive income, property and inheritance tax to a height which until then was impossible. It is one of our demands at the present time that such a tax shall be substituted for all others especially for an indirect tax. But even if we had to-day the power to carry through such a measure with the support of other parties, which is plainly impossible because no bourgeois party would go so far, we would at once find ourselves in the presence of great difficulties. It is a well known fact that the higher the tax the greater the efforts at tax dodging. But when a condition exists where any concealment of income and property is impossible even then me could not be in a position to force the income and property tax as high as we wish because the capitalists, if the tax on their income or property pressed them too closely, would simply leave the State. There have already been instances of this. The State then has the income and property tax without either income or property. Above a certain measure such taxes cannot rise to-day even if we had the political power. The situation however is completely changed when all capitalist property takes the form of public debts. The property that to-day is so hard to find then lies in broad daylight. It would then only be necessary to declare that all bonds must be public and it would be known exactly what was the value of every property and every capitalist income. The tax could then be raised as high as desired without the possibility of tax frauds. It would then also be impossible to avoid taxation by emigration for it is then a public institution of the country and above all of the nation itself from which all interest must how and the tax could simply be taken from the interest before it was paid out. Under such conditions it would be possible to increase the progressive income and property tax as high as desired. If necessary it might be put so high as to be equivalent, or nearly so, to a confiscation of the great properties.

It might well be asked what advantage is offered by this roundabout way of confiscation of great property instead of taking the direct road. Is it not mere jugglery simply for the purpose of avoiding the appearance of confiscation if capital is first compensated for at its full value and then confiscated through tax legislation? The difference between this mode and that of direct confiscation appears to be but formal.

But the difference is not so trifling. Direct confiscation of all capitalists would strike all, the small and the great, those utterly useless to labor and those the most essential to labor in the same manner. It is difficult, often impossible, in this method to separate the large possessions from the small when these are united in the form of money capital in the same undertaking. Direct confiscation would complete this quickly, often at one stroke, while confiscation through taxation permits the disappearance of capitalist property through a long drawn out process proceeding in the exact degree in which the new order is established and its benevolent influence made perceptible. It makes it possible to extend the process of confiscation over a decade so that it will only be fully operative in the new generation that will have grown up under the new conditions and is therefore not accustomed to reckon with capital and interest. Confiscation in this way loses its harshness, it becomes more acceptable and less painful. The more peaceably the conquest of the political power by the proletariat is attained and the more firmly organized and enlightened it is, the more we can expect that the primitive forms of confiscation will be softened.

I have lingered somewhat longer with this question because it constitutes one of the main objections of our opponents and not because its carrying out is the greatest difficulty that we will meet. The greatest difficulties begin rather after all of the above events. The expropriation of the means of production is relatively the simplest incident among the great transformations of the social revolution. It requires only the necessary power and it is one of the inevitable presumptions of our whole investigation.

The difficulties for the proletarian regime lie not so much in the sphere of property as in that of production.



The Incentive of the Laborer to Labor

We have seen that the social revolution makes the continuation of the capitalist manner of production impossible, and that the political domination of the proletariat is necessarily bound up with the economic uprising against the capitalist manner of production by which its progress is hindered. Production however must continue. It cannot pause even for a few weeks without the whole of society going down. So it is that the victorious proletariat has the imperative task of ensuring the continuance of production in spite of all disturbances, and to lead the laborer back to the factories, or other places of labor upon which they have turned their backs and to keep them there in order that production may go on undisturbed.

What are the means at the disposal of the new regime for the solution of this problem? Certainly not the whip of hunger and still less that of physical compulsion. If there are people who think that the victory of the proletariat is to establish a prison regimentation where each one will be assigned his labor by his superior then they know the proletariat very poorly. The proletariat which will then make its own laws has a much stronger instinct for freedom than any of the servile and pedantic professors who are crying about the prisonlike character of the future state.

The victorious proletariat will never be satisfied with any prison or barrack-like regulations. Moreover it has no need of anything of the kind since it has other means at its command to hold the laborer to his labor.

In this connection the great power of custom must not be forgotten. Capital has accustomed the modern laborer to work day in and day out and he will not long remain wholly without labor. There are people who are so much accustomed to their work that they do not know what to do with their free time and that feel themselves unhappy when they are not working, and there will be few people who will feel themselves happy for any length of time without any work. I am convinced that when once labor loses the repulsive character of over-work and when the hours of labor are reduced in a reasonable degree, custom alone will suffice to hold the great majority of workers in regular work in factories and mines.

But it is self-evident that we cannot trust to this motive alone as it is the weakest. Another much stronger motive force is the discipline of the proletariat. We know that when the union declares a strike the discipline of organized labor is sufficiently strong to make the laborers freely take upon themselves all the dangers and horrors of unemployment and to remain hungry for months in order to secure a victorious conclusion for the common cause. Now I believe that when it is possible by the strength of discipline to keep the laborers out of the factories it will also be possible to hold them in by the same force. If the union once recognizes the necessity of the unbroken regular progress of labor we may be sure that the interest of the whole will be so great that scarcely a single member will leave his post. The same force that the proletariat uses to-day as a weapon to destroy production will then become an effective means to secure the regular continuance of social labor. The higher the economic organization develops to-day the better the outlook for the undisturbed progress of production after the conquest of political power by the proletariat.

But the discipline which lives in the proletariat is not military discipline. It does not mean blind obedience to an authority imposed from above. It is democratic discipline, a free will submission to a self-chosen leadership, and to the decisions of the majority of their own comrades. If this democratic discipline operates, in the factory, it presupposes a democratic organization of labor, and that a democratic factory will take the place of the present aristocratic one. It is self evident that a socialist regime would from the beginning seek to organize production democratically. But even if the victorious proletariat did not have this point in view from the beginning they would be driven to it by the necessity of ensuring the progress of production. The maintenance of social discipline in labor could only be secured by the introduction of union discipline into the processes of production.

This would, however, not be everywhere carried out in the same manner, for each industry has its own peculiarities according to which the organization of the laborers must conform. There are, for example, industries which cannot be operated without a bureaucratic organization, as for example railroads. The democratic organization can be so formed that the laborers choose delegates, who will constitute a sort of parliament, which will fix the conditions of labor and control the government of the bureaucratic machinery. Other industries can be given over to the direction of the unions, and others again can be operated co-operatively. There are also many forms of democratic organizations of industry which are possible, and we need not expect that the organization of all industry would be according to one and the same pattern.

We have seen how the various forms of property would vary and that there would be national, municipal and co-operative property. At the same time, as we saw, private property can still exist in many means of production. Now we see also that the organization of industry takes on manifold forms.

But however powerful motives democratic discipline and the custom of labor may be, they are perhaps not sufficient to ensure that the entire labor class would continuously take part in production. We need not expect that at any time in present society the economic organization and discipline will include more than the majority of the laboring class. When these shall come into control only a minority of the members will probably be organized. It will be necessary to look for other motives to labor. There is one especially strong motive that is peculiar to a proletarian regime, that is, the attractive power of labor. It will be necessary to make labor, which to-day is a burden, a joy, so that it will be a pleasure to work, so that the laborer will go to his work with pleasure. To be sure that is not so simple a thing, but at least a beginning to it can be made by the proletariat at the beginning of its rule in that it will shorten the hours of labor. At the same time it will endeavor to make the place of labor more hygienic and friendly and to take from the labor process as much as possible its disagreeable repulsive side.

All of this is simply a continuation of efforts that to-day are somewhat developed in all labor legislation. But great advances in this direction demand building and technical changes which cannot be brought about between one day and the next. It will be neither an easy or rapid task to make the work in factories and mines very attractive. Beside the attractiveness of labor another power of attraction will come into operation through the wages of labor.

I speak here of the wages of labor. What, it will be said, will there be wages in the new society? Shall we not have abolished wage labor and money? How then can one speak of the wages of labor? These objections would be sound if the social revolution proposed to immediately abolish money. I maintain that this would be impossible. Money is the simplest means known up to the present time which makes it possible in as complicated a mechanism as that of the modern productive process, with its tremendous far-reaching division of labor, to secure the circulation of products and their distribution to the individual members of society. It is the means which makes it possible for each one to satisfy his necessities according to his individual inclination (to be sure within the bounds of his economic power). As a means to such circulation money will be found indispensable until something better is discovered. To be sure many of its functions, especially that of the measure of value, will disappear, at least in internal commerce. A few remarks concerning value will not be out of place here since they relate to what will be of much importance in our future discussion.

There could be no greater error than to consider that one of the tasks of a socialist society is to see that the law of value is brought into perfect operation and that only equivalent values are exchanged. The law of values is rather a law peculiar to a society for production for exchange.

Production for exchange is that manner of production in which with a developed division of labor independent producers produce for one another. But no manner of production can exist without a definite proportionality in production. The number of labor powers at the disposal of society is limited, and production can only be continued when a corresponding number of productive forces are active in each branch of existing production. In a communistic society labor will be systematically regulated and the labor power be assigned to the individual branches of production according to a definite plan. In the production for exchange this regulation is obtained through the law of value. The value of each product is determined not by the labor time actually applied to it but by the socially necessary time for its production. With the modification that this law receives in capitalist production by profits rye are not concerned because this would only unnecessarily complicate the analysis without bringing any new knowledge to the question. The socially necessary labor time in each branch of labor is determined on the one side by the height of its technique in any society and the customary exertion of labor, etc., in short through the average productive power of the individual laborers; on the other side, however, by the number of products demanded by the social necessity of a particular branch of labor, and finally by the total number of labor powers at the disposal of society. Free competition sees to it to-day that the price of products, that is to say the amount of money that one can exchange for them, is continually tending towards the value determined. by the socially necessary labor time. In this manner the result is attained that the production in each department of labor, in spite of the fact that it is not regulated from any central point, never goes very far, or continues long away from the proper level. Without the law of value the anarchy that rules in the production for exchange would soon end in an inextricable chaos.

An example will make this plain. We will make it as simple as possible. As the sum of social production only two different forms of goods are necessary, so far as I am concerned – trousers and suspenders.

Considering then that a society demands as the socially necessary labor within a definite time for the production of trousers 10,000 labor days and for suspenders 1,000, that is to say, this amount of labor is necessary in order to satisfy the social need for trousers and suspenders at the present stage of the productivity of labor. If the product of the labor day is worth one dollar, the value of the trousers will be $10,000 and of the suspenders $1,000.

If the individual laborer deviates from the social form in his production and produces for example one-half as many products in a labor day as his colleagues, then, the price of his product for a day’s labor would be only the half of that inhering to what was produced by the others in a day of labor. This is well known. This happens also if the proportionality of labor is abnormal, for example, if the manufacturers of trousers attract more labor power today than is socially necessary this labor power must be taken away from other places so that the number of labor powers at the disposal of society in this line would be diminished. Take it in the simplest possible form, that they are all drawn away from the tailors. In place of the socially necessary time of 10,000 labor days here and the 1,000 there, we find only 5,000 actual labor days here and 3,000 there. The world is swamped with suspenders and we do not have enough trousers. What will be the result? The price of suspenders sinks and that of trousers rise. The 3,000 actual salable labor days in the manufacture of suspenders will then represent only the value of the 1,000 socially necessary and the value of the individual suspenders will sink to one-third of their former value. The prices will correspondingly sink below these one-third. The value of the trousers will, however, be determined as before by the socially necessary 10,000 and not by the actually supplied 8,000 labor days and as a result the individual producers will be worth five-fourths of their previous price. As a result of this the manufacture of suspenders will be unprofitable and the number of labor powers devoted to it will decrease and flow again to the manufacture of trousers which has become so extraordinarily profitable.

It is in this manner that the law of value under free competition regulates production. It is not the best conceivable way to regulate production but it is the only one possible with private property in the means of production. With social property in the means of production we shall have instead social regulation of production and the necessity of regulating production by the exchange of equal values will cease. Therewith also will disappear the necessity of money as a measure of value. In place of metallic money we can easily have token money. The price of products themselves can now be determined independent of their value. Meanwhile the amount of labor time embodied will always have an important bearing in determining its value and it is probable that the inherited price would be approximated.

While labor gives value and price to the product and labor must be paid with money there will be wages. In spite of this it would be false if one were to speak of a continuation of the present wage system as is done by many Fabians who say that the object of socialism is not to abolish the wage system but rather to make it universal. That is only superficially correct. As a matter of fact wages under the proletarian regime would be something wholly different from under capitalism. To-day it is the price of the commodity – labor power. This is determined in the last analysis by the cost of subsistence of the laborer, while its minor variations depend upon the operation of supply and demand. In a society ruled by the proletariat this would stop, as the laborer mould no longer be compelled to sell his labor power. This labor power would cease to be a commodity whose price is determined by its cost of re-production, and its price would become independent of the relation between supply and demand. That which to-day determines in the last analysis the height of wages is the number of products to be divided among the laboring class, the larger this number the higher can and will the general level of wages rise. All things considered the proportioning of the wages of labor among the different branches of industry is largely influenced by supply and demand, and since the laborers cannot be assigned by military discipline and against their wishes to the various branches of industry, so it may happen that too many laborers rush into certain branches of industry while a lack of laborers is the rule in others. The necessary balance can then only be brought about by the reduction of wages where there are too many laborers and the raising of them in those branches of industry where there is a lack of laborers until the point is reached where every branch has as many laborers as it can use. But the relation between supply and demand has really no influence upon a universal levelling of the wages of the entire laboring class which is determined only by the amount of existing product. A universal decline in wages as the result of over-production is impossible. The more there is produced the higher in general are the wages.

Now the following question arises. If the continuous progress of production is to be secured it will then be necessary to hold the laborers to production by a universal raising of wages. Whence then shall this increase of wages be paid and whence shall come the necessary amount of product? If we accept the most favorable conditions for the new regime, which we have not done, with all property confiscated, and with the total income of the capitalists flowing to the laborers, this in itself would give a very handsome rise in wages. I have pointed out in my writings on “Reform and Revolution” the statistics of England in the year 1891 where the amount of the income of the laborers was seven hundred million pounds sterling and where the amount of the income of the capitalists was in the neighborhood of eight hundred million pounds sterling. I have further shown that these statistics in my opinion were painted too rosily. I have reason to believe that they calculate the wages too high and the capitalist income too low. If we take, however, these figures of 1891 they will show that if the income of the capitalist was directed to the laborers wages would be doubled. But unfortunately things are not to be done so simply. When we expropriate capital we must at the same time take over its social functions. The most important of these is the accumulation of capital. Capitalists do not consume their entire income. A portion they lay aside for the extension of production. A proletarian regime would be obliged to do the same since it too must extend production. Accordingly for this reason even the most radical confiscation of capital could not turn its entire previous income to the laboring class. Even from the surplus value that the capitalists pocket they must again give up a portion in the form of taxes to the State. This share would increase enormously when the progressive income and property tax are the only forms of state and municipal taxation. And the burden of taxation would not diminish. I have pointed out above at what cost the re-arrangement of the school system alone could be brought about and besides this an old age insurance for all incapable of labor, etc., would be instituted.

We shall see that there is none too much remaining over from the present income of the capitalist to be applied to the raising of wages even if we confiscate capital at one stroke. There is even less if we wish to compensate the capitalist. It would then be absolutely necessary if we were to raise the wages of labor to raise production above its present amount.

It will be one of the imperative tasks of the social revolution not simply to continue but to increase production. The victorious proletariat must extend production rapidly if it is to be able to satisfy the enormous demands that will be made upon the new regime.



Increase in Production

There are various means by which production can be increased. Two of the most important of these have already attained great significance. Both have been applied with great results by the trusts of America from which very much can be learned concerning the methods of the social revolution. They show us how at a single stroke the productivity of labor can be increased simply by concentrating the total production in the most perfect industrial plants and throwing all those out of operation which do not attain a definite standard. The Sugar Trust, for example, a few years ago consigned all but about one-fourth of the industrial plants which it possessed to idleness and in this one-fourth it has produced as much as previously in the whole number. The whiskey trust also obtained eighty large distilleries and, at once put out of operation sixty-eight out of the eighty. It is only operating twelve distilleries but in these twelve it produces even more than hitherto in the eighty. A proletarian regime could proceed in the same manner. It could do this even easier because it would not be hindered by private property. Where individual industries are private property, the culling out of the inefficient by way of free competition is a very slow process. The trusts can only displace the less productive industries through the fact that they have destroyed private property in them by uniting all under one head. The method which the trusts can only apply to a relatively small sphere of production may be extended by a proletarian regime to the whole sphere of social production, since it will have totally abolished capitalistic private property. This method of increasing productivity by the culling out of inefficient industries will not be distinguished from the similar operation by the trusts of to-day simply by the extent of the operation but also in that it will include other methods and other purposes. The new regime will carry out this change principally in order to increase wages. The Trust on the other hand goes its way without regard to the laborers. Those laborers who are rendered superfluous by reduction of surplus industries it simply discharges. It utilizes them mainly as a means of pressing down the wages of the laborers who are at work and in increasing their dependence. Very naturally a victorious laboring class would proceed differently. It would transfer the laborers rendered superfluous by the closing of industries to other industries where their activity would continue. The trusts rather make the laborers superfluous because it is not their intention to perceptibly increase production. The greater the increase in the amount of products the greater the supply and the lower, under otherwise equal conditions, is the price. The trusts fight against all decline in prices. They would much rather limit production than extend it. When they produce only in the most efficient plants, this is done simply to reduce the cost of production and to increase profits, with the same or even an increased price, and not for the purpose of extending production. A proletarian regime, however, would act for the purpose of extending production, for it does not desire to raise profits but rather wages. It also would increase the number of laborers in the best industrial plants and it would thereby increase production, because in each plant more classes of laborers would work together. How possible this is and how much production will be influenced thereby I can explain by an example whose figures are taken wholly from the imagination and have no equivalent in reality but that nevertheless are not simply fantastic pictures but a real representation of things which find their counterpart in the trusts. Take, for example, the German textile industry which includes to-day a round million laborers (in 1895 993,257). Of these the great majority (in 1895 587,579) were occupied in plants which employed not more than 50 laborers. We take it for granted that the larger and the more comprehensive plant is always technically the more perfect. To be sure this is not true in all cases. It is possible that a factory with 20 laborers may be technically better organized than one in the same branch of industry with 80 laborers. But on an average the former statement would hold true and we can accept it all the more readily as we use it only as an example for the purpose of illustration and not as a proposition. Let us take it for granted that the most imperfect factories are those employing less than 50 laborers. All these would be closed and the work in them transferred to those factories in which more than 50 laborers were employed. These could then be divided into two shifts working one after the other. If the hours of labor are ten to eleven a day now each shift could then have its hours reduced to eight. From that time on the industry would run daily six hours more and its machinery would be so much the better used, while at the same time the hours of labor for each laborer would be shortened by two hours. We can take it for granted that the production of each individual would not be decreased thereby as we have had countless examples showing that the advantages of the shortened labor time generally, at least, outweigh the disadvantages. Considering that a laborer in the most imperfect industry to-day produces an amount of product which represents the value of 2,000 marks and that labor in the great industries is 100 per cent, more productive (Sinzheimer makes a similar estimate of the productivity of the large and small industries) so that each laborer in a great industry would produce the value of 4,000 marks. The half million laborers in the small factories of the textile industries produce an amount of products having a value of a billion marks. The other half million laborers in the great industries produce in the same time an amount of products valued at two billion marks. The million of laborers can produce a product of the value of three million marks.

Under the new regime when the laborers were all concentrated in the great factories with more than fifty laborers, each laborer would produce to the value of 4,000 marks a year and the total production of the textile laborers would amount to four billion marks or one billion more than they formerly produced. For the purpose of comparison we consider that values would still be produced.

We can go still further and close not simply the small but the medium sized factories and concentrate the total textile production in the great factories employing more than 200 laborers. The total number of laborers employed in such factories in 1895 amounted to 350,306, or almost one-third of the total textile workers. Under these conditions it would be necessary to work the laborers in three shifts in order to employ all the laborers in the great factories alone and in order to avoid the night work while shortening the labor time of a day to five hours or half of the present time. To-day the laborer in the great industry produces perhaps four times as much as the one in the small industry, or according to our previous wholly arbitrary illustration about 8,000 marks a year. By the shortening of the labor time his product would not be reduced in equal degree because the better rested laborer will produce more than the over-worked one. We may accept the hypothesis that he could produce as much in eight hours as he to-day produces in ten. We would not be reckoning things too optimistically if we went further and considered that by shortening the labor time from eight to five hours the production of the laborer would not be lowered more than 25 per cent, certainly not as much as 37 per cent. Accordingly each laborer would produce at least 5,000 perhaps 6,000 marks in each year, and all together would produce five to six billion. The total production would therefore, as compared with the present, be doubled and the wages could be correspondingly doubled and this absolutely without any reference to confiscation of capital while at the same time the labor time would be reduced one-half. Indeed under certain conditions the increase of wages on the basis of the figures here given could be still greater. Let us assume that of the present yearly product of the textile industry, which we have called three billion, one billion is applied to wages and the second to the purchase of raw materials, machines, etc., and the third to the profit of capital. Now under the new regime six billion would be produced. Of this two would be applied to raw materials, machines and such like. One would serve for compensation to the expropriated capitalists and the completion of the previously mentioned social activity. This would leave three billion for wages. This mould permit a tripling of wages. And all this without any new plans or new machinery, but simply through the closing of the little industries and transference of their laborers to the large ones. We simply need to do on a large scale what the trusts are doing on a small. It is only the private ownership of the means of production that hinders the development of modern production.

This method develops still another side. Our critics are very ready to tell us that for a long time it will be impossible to socialize production because the number of existing productive establishments is much too great and it will take too long a time for competition to crush out all the little industries and therewith create a possibility of socialist production. If the number of all the industrial plants in the German empire amounts to 2½ million and those of the textile alone to over 200,000, how could one possibly manage such a number of industries nationally?

Certainly the task appears alarming but it is very much reduced when we consider that the proletarian regime will apply the methods of the trust, and while it will expropriate all the industries at once, only the best equipped large industries will be further operated. Of the 200,000 textile industries there are only 3,000 which employ more than 50 workingmen. It is clear that the concentration of industry in these latter plants mould very much simplify the task of the social regulation of production. It will be still simpler when we consider that the new regime will have closed up all plants employing less than 200 laborers. Of the 200 000 there would then only remain 800. To control and supervise this number of industries is certainly no longer an impossibility.

Here again there is another significant point of view. Our opponents and the pessimists in our own ranks measure the ripeness of our present society for social production by the number of ruins which are still strewn round it and of which it is still incapable of ridding itself. Over and over again the great number of little industries that still exist is triumphantly pointed out. But the ripeness for Socialism does not depend on the number of little industries that yet remain but upon the number of great industries which already exist. Without a developed great industry socialism is impossible. Where, however, a great industry exists to a considerable degree it is easy for a socialist society to concentrate production and to quickly rid itself of the little industry. The socialist birds of ill omen, that simply know enough to announce the coming of ill luck by their warning croaks, continuously raise an obstinate clamor about the fact that the number of little industries in the German empire has increased 11/8 per cent from 1882 to 1895. But they are blind to the fact that in the same period the number of large industries with more than fifty employees increased about 90 per cent, while the gigantic industries employing over 1,000 persons increased in the neighborhood of 100 per cent. It is this increase that is the preliminary condition of socialism and this is richly fulfilled. Even if the small industry does not absolutely decrease, that simply shows that the number of ruins which the proletarian regime will have to sweep away is still considerable. Meanwhile the trusts promise to greatly assist us in this respect.

In other directions also they offer us a forecast. The present trusts increase their profits not merely through increasing the productivity of their employees but also by economies of different forms. Socialist production must make use of these same methods in still higher degree. Among these economies are those relating to machinery, by products and cost of transportation. Taking an example from the textile industry, which demands a wholly different expenditure to transport the raw material and accessories to production for 200,000 than for 800,000 industrial plants. The same is the case with the cost of the supervision of industries. Of the 200,000 industries, the smallest to be sure demands practically no supervision. In this class are those with less than five laborers. Here the manager is also a worker. Over 12,000 exceed this limit. But their supervision also demands considerably more directive power than those of 800. Other savings are attained in that the trusts abolish the struggle of competing industries for markets. Since their appearance in the United States the number of commercial travelers employed has decreased. One of the most striking of these cases is instanced by J.W. Jenks in his treatise concerning the trust. The extension of production has so increased that the number of unskilled laborers employed in these plants have increased 51 per cent and of the skilled 14 per cent. At the same time the number of commercial travelers has decreased 75 per cent. Jenks also states that many trusts have, according to their own statements, saved from 40 to 85 per cent of their advertising expenses.

Finally the raising of wages in industry would set free a large number of labor powers whose existence to-day is merely parasitic. They maintain a wretched existence to-day in their little shops, not because these shops are a necessity but because their possessors are in despair of finding their bread in any other place or because they cannot earn enough by wage labor and seek a supplementary occupation.

Of the almost two million people who are occupied to-day in the German Empire in trade and commerce (exclusive of the post office and railroads) and hotel keeping perhaps a million would, with a sufficiently high wage in industry and sufficient demand for labor powers, be transferred from parasitic to productive activity.

These are the two methods for increasing the productive powers of the laboring class: The abolition of parasitic industry and the concentration of industries in the most perfect plants. By the application of these two means a proletarian regime can raise production at once to so high a level that it mould be possible to considerably increase wages and simultaneously reduce the hours of labor. Every increase in wages and reduction of hours must again increase the attractiveness of labor and draw new laborers to production who were formerly parasitic, such for example as servants, small merchants, etc. The higher the wages the more laborers. But in a socialist society one can transform this saying into “the more workers the fewer the ill doers in society, the more produced and the greater the wages.” This law would be absurd in a society of free competition where the greater the supply of laborers, under otherwise equal conditions, the lower the descent of wages. It is a law of wages for the socialist system of production.


Last updated on 28.1.2004