Karl Kautsky


Chapter VIII
Capitalism and Socialism

However difficult it may be for a Socialist Government supported by the political power of the proletariat to be obliged to encourage capitalist industry, this is a problem which sooner or later confronts the Socialists in every European country. In the most important States the proletariat is already so strong and so matured in self-consciousness that it will not be long before it attains to political power, not in spite of democracy, but precisely because its strength is nourished by democracy.

A world revolution in the Bolshevist sense is, of course, not to be reckoned with. Such a revolution signifies the dictatorship of a Communist party, which assumes power because it alone controls all armed forces and disarms all the non-proletarian classes and the sections of the proletariat which are not Communist. This situation arose after the military collapse, first in Russia, and then, in Hungary. It will not be repeated in any country, least of all in the victorious States.

In these countries the proletariat cannot gain the upper hand by means of a monopoly of arms, but only as a majority by means of its preponderance among the democracy.

At the moment the democratic prospects of Social Democracy are, in point of fact not favourable. The period of disillusionment and tension which follows upon every revolution has once more set in. Instead of a world revolution we stand on the threshold of a general reaction.

But in no part of civilised Europe has Socialism, to-day suffered such a crushing defeat as was experienced by the middle-class revolution of 1849, and the Paris Commune of 1871. After these defeats the reaction lasted barely a dozen years, and this time it will be much shorter, perhaps only a matter of two or three years. It can be terminated in no other way than by the victory of Social Democracy in all civilised States, a Social Democracy which will not only be far stronger than it is to-day, but also, far more intelligent and experienced, thanks to the lessons of the present revolution, and thanks to the possibilities of a richer development of the capacity of the proletariat through shorter working hours, workers’ councils and other achievements which even the reaction will be obliged to leave intact. In a few years’ time Social Democracy will find a far better economic foundation for its activities than to-day, as by that time the worst effects of the war may have been overcome.

But then all the Social-Democratic Governments will be faced by the same difficulties as confronted the Georgian Government. Because of what the revolution has taught them, they will know that capitalism cannot be abolished at one stroke. Socialistic production can only be introduced gradually, and after careful preparation. If the wheels of production are not to come to a standstill, and thereby plunge the whole of society, and especially the proletariat, into the direst poverty, capitalistic production must be maintained in those branches of industry which are not yet to be socialised, and in some branches of production it may survive for generations.

We may therefore expect to see everywhere Socialist governments which will have to allow, and even encourage, capitalist production, in a whole series of branches of industry.

How is the rule of the proletariat to be expressed under these circumstances?

The desire for profit or the extraction of surplus value from the labour-power that is purchased is not the only cause of the class antagonism between capital and labour. This antagonism is also nourished by the power over labour which is invested in capital by its monopoly of the means of production. Every kind of social co-operation requires to be directed. But the capitalist becomes a captain of industry because he owns the means of production, and not because the workers and consumers have any confidence in his capacity or experience. In capitalist undertakings the master was originally an autocrat, who not merely managed the business, but dominated it personally, and gave it a code of rules. The worker was the object, not the subject of this legislation.

The struggle of the worker against capital is not merely directed against exploitation; that is, against the creation of surplus value, but also against the omnipotence of the captain of industry, against the attitude of “master in the house“.

Both parts of the class struggle are inseparable and closely connected with each other. In the one case, the restriction of the omnipotence of capital, visible progress is achieved during the lifetime of capitalism, but not in the other case, the struggle against the exploitation of the workers. In the latter case, progress is only made through increasing encroachments upon the domain of capitalistic production, and the extension of socialisation. As regards the first-named aspect of the class struggle, progress commenced to be made one hundred years ago, but in respect of the second aspect, it has scarcely begun as yet. The power of the master in industry tends to be restricted by the growing force of Labour organisations and of the State, “the organised power of society.”

But this does not cause a diminution in the exploitation of labour, which often shows a tendency to increase. Every labour protection law, every factory inspector, every successful strike, every trade union which asserts itself, lessens the power of the captain of industry. The revolution has considerably multiplied these restrictions, and added to them a new one in the shape of works councils.

Thus, while during the course of the last century the factory has been transformed from an autocracy into a constitutional monarchy, the rate of surplus value has grown in the same period so that the tendency in the rate of profit to fall has been always impeded.

This is not an accident. The great historical task of industrial capitalism consists in increasing the productive power of Labour to an enormous extent. This fact enables it to win easy triumphs in competition with pre-capitalistic modes of production.

Only such restrictions as do not impair the productivity of labour can be imposed and maintained. The measures and institutions which we now have in mind have the effect of raising instead of lowering the productivity of labour. They increase the capacity and intelligence of the worker, and give him an interest in the work and in the prosperity of the undertaking and branch of industry to which he belongs. Their educational influence is not confined to the worker, but also extends to the employer. Nothing is more convenient or more simple than dictatorial power which does not need to exercise the mind in order to overcome all opposition. The dictum of Cavour that any fool could govern in a state of siege is quoted with approval by people who are enthusiastic for the dictatorship that is only another name for a state of siege. Where the employer can act and rule as dictator, he can pass on all the consequences of incapacity, carelessness and niggardliness in the conduct of the business to the workers, who are obliged to pay the penalty for obsolete methods and improper conduct of a business, and for the lack of requisite materials. The stronger the workers and the State become in comparison with the employer, the greater their demands upon him, and their powers of resisting him, the more careful and intelligent the conduct of the business must be, the more the employer must endeavour to make use of the most productive appliances and methods, the more of the extracted surplus value must be accumulated by the capitalist to permit the introduction of improvements.

In this way each step of progress made by the proletariat against capital, which is inspired by economic foresight, and therefore does not aim at the destruction of machinery and similar things, results in creating a strong incentive to increase the productive power of labour, which also involves the tendency to the growth of surplus value and exploitation.

However paradoxical it may appear, the growth of the power of the working class ever capital does not at the same time exclude the progression of the exploitation of that class, but may even provoke it.

This explains why such growth does not impede the progress and development of production, but promotes it. So long as capitalistic production subsists, capital must extract a profit from industry, or else mark time, which harms the worker even more than the capitalist, as the former is dependent on the uninterrupted sale of his labour power. Crises and unemployment are the worst enemies of the worker, and nothing is greater than the folly of those “revolutionaries” who seek to save the proletariat by clogging the wheels of production, and increasing the gravity of the crisis. The workers’ councils will become effective and make themselves a definite power in the process of production, when they succeed in the same way as labour protection and Trade Unions have succeeded, in raising the productivity of labour. If they should aim at decreasing it and permanently impeding the process of production, they would be soon played out. The necessities of production are the most irresistible of the needs of society. They show themselves to be more potent than the bloodiest terrorism.

As long as capitalist production lasts, it will involve the necessity of a certain rate of profit, and the tendency to the growth of exploitation.

It will be possible to remove these necessities and these tendencies when Socialist production is substituted for capitalist production, and social property is established in place of private property. The possibilities of this transition first arise in an advanced stage of capitalism, but not for all branches of industry at the same time. Railways, mines, and forests are by their nature suited to become social possessions, but most luxury trades will remain in private hands until a later period. The abolition of exploitation by means of socialisation can therefore only proceed gradually, and the whole of industry cannot be liberated at one stroke. On the other hand, many restrictions of the power of the employer, such as the eight-hour day or workers’ councils, may be imposed upon the whole extent of industry at once.

The mass of surplus value in society, which is appropriated by the capitalist class instead of falling to the workers or being used in the general interests of society, will not be diminished as a result of the increased power in the process of production which the working class secures, but will be decreased in the degree that the scope of the capitalist is narrowed by the socialisation of single branches of industry. It is quite impossible to cut away profit from those branches of industry, constantly diminishing in number, where capitalist production still exists, and may continue to exist for the present, before the private character of the ownership of such means of production is altered.

The abolition or even the visible restriction of profit in this sphere would clog production generally. Matters would only become worse if an attempt were made to restart businesses by means of a policy of terrorism. Where the employer is superfluous, industry should be socialised. Where he is still necessary, he cannot be compelled by force to manage his business in a reasonable and conscientious manner, just as the war worker cannot be coerced into doing good work. Not compulsion, but interest in the result secures the best quality work, on the part of employers as on the part of wage workers.

All this may not sound very revolutionary, but Marx would not have devoted the best years of his life to the writing of Capital, and this would not have been greeted as the “Bible of the working classes,” if the mere possession of power had sufficed for the emancipation of the working class, and a knowledge of the laws of capitalist economy had been superfluous.

A Socialist Government must take these laws into consideration. As regards this point, the distinction between a socialist and a non-socialist government is of the following description. The problem of the socialisation of a branch of industry has two sides, one, the degree of its economic development, particularly the concentration of its capital and resources, the nature of its direction (whether by employer or by managers), and the conditions of the market for its goods. The other aspect, which is most important, is the power of the classes which are interested in socialisation. A number of branches of trade and industry have long been ripe for socialisation, and urgently require it, in the general social interest as well as for the benefit of the proletariat. But the principle of socialisation remains unapplied, because its champions are weak. On the other hand, there is a whole category of restrictions which could be imposed upon the power of capital without lessening the productivity of labour, which they would even raise, and which are not yet put into force because the proletariat lacks the requisite power to do so.

When the Proletariat is strong enough to put a Socialist Government in power, this step will enable it to enforce all necessary measures of socialisation, and to impose all reasonable restrictions upon the will of the employer. But every care must be taken to avoid over-estimating the efficacy of mere power, and thinking that its possession alone is sufficient to ensure the fulfilment of the desires and the satisfaction of the wants of the proletariat at one stroke.

A Socialist Government must always keep steadily in mind that its activities are restricted by the economic necessities and possibilities, and it may not overstep these limitations without jeopardising society and the progress of the workers to better conditions of living. With every measure of socialisation, it must verify exactly the condition of the branch of industry, and the capabilities and resources which are at its disposal. With every limitation which it sets upon the will of the employer, it must consider whether the productivity of labour will not thereby be lessened. It must ceaselessly strive to develop the productive forces of the country, and, in so far as this is not yet possible by socialist means and methods, capitalist measures to further this object must be permitted, and under circumstances even encouraged.

The Social-Democratic Government of Georgia has been guided by these principles, and in this have shown themselves to be intelligent pupils of our great Masters, Marx and Engels. Whenever a Social-Democratic Government may come into power, it will be obliged to act on the same principles, and the benefit of the Georgian experience will be at its disposal.

The idea that the only task of a Socialist Government is to put Socialism into practice is not a Marxist one, but pre-Marxist and utopian. It conceives of Socialism as an ideal picture of a complete society. Like ideal conceptions generally, its nature is very simple. Once it has been thought out, only the necessary power is required to realise this ideal everywhere and under all circumstances. When this result does not immediately follow on the possession of power, it is due either to treachery or to cowardice. A Socialist Government has no other task than the putting into practice of the ideal Socialist State. The more absolute its power, the more effectually it will be able to do this.

This conception of the task of Socialism was completely upset by Marxism. The starting point of Marxism was the class struggle, which is waged under the conditions of capitalist production by the proletariat, itself the product of industrial capitalism. The task of Social Democracy is to raise the physical, intellectual, moral and organising powers of the proletariat, as well as to bring plan, and method into the isolated proletarian struggles. This implies that the proletariat must be taught what is the social and economic objective which can alone satisfy it, and put an end to its struggles. This objective is the emancipation of the working class, which from being the mere tool will become the master of production. Among the working class must be counted not only the industrial proletariat, but likewise, peasants, hand-workers, and intellectuals. But the proletariat forms the strongest and most dependable factor in this development.

This objective is the goal of the Socialist movement. Its realisation, may come about in various ways, which will depend upon the prevailing modes of production, the relative strength of classes, the degree of their organisation, intelligence and discipline, and so forth. The forms of Socialism may vary considerably in different countries, at different times, and in different branches of industry. They must everywhere be related to the existing forms of production, and permit their further development.

The common element of all of them will be the common ownership of the means of production and management by social institutions, with the object of satisfying the common need whether that be the need of the State, the Municipality, or Co-operative Societies, instead of private ownership of the means of production and private production for the market to secure private profit. Production will not be the realisation of an ideal conception of a complete society which has been previously thought out, but the result of a fluctuating process of development, a result which in no way excludes or renders unnecessary further development, but which forms merely the starting point of a new order of social development.

The endeavour can and should be made to-day to visualise the picture of the coming Socialist mode of production, but it must also be remembered that the reality will be far different from any mental picture, and that the most thorough investigations at the present time will never succeed in revealing all of the agents that will enter into the development of the future, and in estimating how great a significance every one of these agents will assume. The better we are able to investigate the present, the deeper will be our insight into the future. But the forms of the future society will always be more manifold than is possible for us to foresee, and new momenta will constantly arise which are inconceivable to us to-day.

We may expect great surprises before us in this sphere.

Nevertheless the Socialist goal has a great significance for us. Champions of the Labour cause will the more readily avoid the contradictions and waste of strength in their daily political and economic policies, and effect the improvement and liberation of the working people the more speedily, the more they estimate how far each one of their demands and measures will subserve or prejudice the ultimate objective.

As we have already observed, the development of the productivity of labour is closely connected with the objective of the transformation of the property basis of the means of production and with the establishment of the widest self-government and freedom, of expression and organisation of the labouring masses.

From the standpoint of this conception, the task of Socialists in relation to Socialism assumes a shape very different from the standpoint of pre-Marxian Socialism. The creation of a system of Socialist production is now neither the sole nor the first task of Socialists. Such a system is rather to be considered as the end of their endeavour, the result of their total activity. Their duty is, under all circumstances, the elevation and strengthening of the proletariat, the giving it a keener insight into the economic process, and its destiny and the extension of the productivity of labour.

This is the task of every Socialist party. From this point of view, Socialist parties will become possible and necessary everywhere, even in countries where the pre-requisites of Socialist production do not yet exist, provided that they contain an industrial proletariat.

The position will be in no way modified when a Socialist party gains political power, which permits it to set up a Socialist Government. The immediate task of such a government would likewise be to increase the strength and insight of the proletariat, to subject the capitalist to the control of the State, and to develop the productivity of labour, but not under all circumstances immediately to abolish capitalism in its entirety, and put Socialism into practice. To how great an extent Socialism can be introduced must depend upon the degree of ripeness which the country has reached.

If the tasks of a Socialist Government are conceived in this wise, it will be clear that the existence of such a government in an economically backward country is compatible with the Marxist theory, according to which the pre-requisites of Socialism, are only to be found in a highly developed capitalism. A socialist regime is thus possible under economically backward conditions, if the State is democratic, and the industrial proletariat is superior in intelligence and organisation to the other classes which express their strength by and through democracy. Provided also that the Socialist government remains always conscious of the limits of its power and does not attempt more than it can achieve with the strength and resources at its disposal, and if, finally, it is anxious to develop the productive forces and to strengthen the proletariat. From being the champion of the special interests of the proletariat it will become the representative of the general social interests. In this capacity it will be enabled to marshal behind it the majority of the nation and maintain their allegiance.

Such a Government must be guided by the principle that by limitation the master reveals himself. A Socialist Government which does not restrict its endeavours to the economic necessities and possibilities, but allows itself to be influenced only by the needs of the proletarians and the eagerness for power of many party friends, so that it plunges into an immoderate policy of extravagant radicalism, a Socialist Government of this kind will never accomplish a lasting liberation of the proletariat, and an increase in the productive forces, but it is sure to end in a new servitude by completely destroying the productive forces, which will mean an indefinite postponement of its hopes.

The Government of Georgia has chosen the method of masterly limitation, and the country and the proletariat have felt the benefit of it.

It is true that an economically backward country can never become a pioneer in the development of Socialist forms. So far, Marxism requires no modification. Only such advanced industrial countries as England and Germany can develop models of socially worked undertakings, which, owing to the abject lesson they will teach, will find speedy recognition and imitation in backward countries.

If highly developed countries should soon come under a Socialist regime, this fact will determine whether their assistance will cause the further development of the productive forces in backward countries to assume socialist forms and prevent the widening of the scope of capitalist production.

It is within the realm of possibility that such a regime will appear in Germany and England in the course of a few years after the present reaction has been overcome.

This will provide a Socialist Government in Georgia with a new support. Thus the possibility existed that this Government would be able to maintain itself in power without resistance. The immediate danger was not from within but from without.


Last updated on 1.3.2017