Karl Kautsky

The Labour Revolution

III. The Economic Revolution


(a) Under Capitalism

IN the investigation of the governmental form, which best corresponds with the rule of the workers and with Socialism, a question remains to be considered. This leads us directly to the economic tasks of the Labour Revolution, that is, the epoch of the political power of the workers.

This question is whether the State power of Labour is to be organized as the power of consumers or of producers, whether the body which represents the supreme power in the State is to be an assembly of consumers or of producers.

The first system is the representation of districts where voting proceeds on the basis of universal and equal franchise and no vocational distinction is recognized. Modern tendencies oppose alternatives to this system, such as the class representation of Bolshevism, which grants a special franchise to wage workers and to peasants, and creates special peasants’ and workers’ councils as representative bodies, whereby the other classes are deprived of representation. Then we have the democratic proposal of Guild Socialism, which desires not class, but vocational representation. The citizens are to elect their deputies to the supreme popular assembly upon the basis of industry or occupation. This assembly will to some extent be a permanent trade union congress. It is not yet settled whether this national economic council will constitute the sole parliamentary chamber in the State, or whether there will be two such chambers, one elected as hitherto by universal suffrage and a vocational assembly, and what the relationship between the two will be. The most eminent representative of Guild Socialism, G.D.H. Cole, declares:

“The ultimate sovereignty in matters industrial would seem properly to belong to some joint body representative equally of Parliament and of the Guild Congress” (Self-Government in Industry, p.87).

Unfortunately, Cole is obliged to add:

“The new social philosophy which this changed conception of sovereignty implies has not yet been worked out; but if Guild Socialists would avoid tripping over their own and other writers’ terminology they would do well to lose no time in discovering and formulating a theory) consistent with the Guild idea and with the social structure they set out to create” (p.88).

This task of immediately formulating a new theory, which will prescribe the line of march, is characteristic of Cole’s conception of science. Perhaps we could render some assistance to the Guild Socialists in this respect, although we shall hardly earn their thanks.

The chief question is this: is the supreme power in the State to be invested in the consumers or in the producers?

The Guild Socialists discuss the terms of consumers and producers as if they were self-explanatory, just as the Bolshevists deal with the term worker. Neither the ones nor the others consider it necessary to define these ideas more particularly. And yet they are not of so simple a nature as appears from the first glance.

Some years ago I wrote an article on Producers and Consumers for the Neue Zeit, in connection with Schippel’s tariff agitation in the “interests of the producers.”

My article commenced as follows:

“Modern fiscal literature constantly turns upon the separation of society into consumers and producers, as if society were really divided into these two classes. Free trade is advocated in the interest of the consumers, and tariffs in that of the producers. Involuntarily the idea obtrudes itself that the producers’ interest is the higher. The consumers are the people who eat and drink, while the producers are those who toil in the sweat of their brows.

“The superiority of the producers’ interest may also be scientifically expressed by saying: we can only consume what has been produced. The prosperity of society depends upon the vigour of production. The interest of the producers is therefore the interest of society.”

From another standpoint, it would seem that there can be no opposition between producers and consumers at all, for if not every consumer produces, at least every producer consumes. For the working portion of mankind, consuming and producing are only different functions of the same individual. How then can one talk of an antagonism between consumers and producers?

And yet such an antagonism does exist, although not in every mode of production or within every mode of production to the same extent.

This antagonism does not exist in the most primitive conditions of production, where every household produces for itself and creates all that each of its members needs. Here as everywhere else the circle of consumers is wider than that of producers. Although every producer is necessarily a consumer, not all those who consume are engaged in the process of production. The infirm, the children, the sick, the aged, do not participate therein. But they all belong to producers’ families, with which their interests are identical. Under these conditions, therefore, there are no consumers’ interests in society apart from the interests of producers.

This is no longer the case with simple commodity production, where every worker has possession of his means of production, and as peasant or handicraftsman disposes of his product. Here we leave out of account any complicated conditions of exploitation.

The difference as compared with primitive production for use arises from the division of labour among various businesses. Under commodity production, the producer creates products which he does not use, in order to exchange them for the products of other businesses which he needs. The products are exchanged according to their value. The greater the value, or, expressed in money, the prices of his own products, the more of other products he is able to exchange for them. Therefore the producer has an interest in the high prices of his own products. If he can force up their prices by withholding ample supplies of his products from the market, he will do so.

But once he has sold his commodities, he enters the market no longer as a possessor of commodities, but as a possessor of money; no longer as a seller, but as a buyer; no longer as a producer, but as a consumer. And as such, he has an interest in low commodity prices. Thus an antagonism between consumers and producers arises here. But if, as stated, we leave out of account complicated conditions of exploitation, which are not bound to emerge at this stage, the whole of society consists of producers and the members of their families, just as in primitive times. The antagonism between producers and consumers, therefore, is one within the world of producers; in any given case it is an antagonism between the producers of one calling and the producers of the other callings. It is no permanent antagonism of classes, but an antagonism whose factors are continually changing.

Yet circumstances arise under simple commodity production which unite related branches of production in a common and permanent struggle against another branch. Thus the antagonism of interests between consumers and producers may develop into a great social antagonism, exercising the deepest historical effects.

On the one hand we find urban industry, whose producers confront the producers of agriculture as consumers – as consumers of foodstuffs and raw materials, which they desire to obtain as cheaply as possible. On the other hand, the farmers are consumers of industrial products, which the industrialists desire to sell as dearly as possible.

The old antagonism between town and country, which is always being revived, appears in the light of an antagonism between consumers and producers, although we find producers and consumers on each side.

The appearance of wage labour in the service of industrial capitalists invests production with a new character. Until then the worker and the producer have been the same person. The producer’s interest has been identical with the worker’s interest. Under the rule of capitalism, the worker remains indeed the producer of the product in a technical sense, but he ceases to be so in an economic sense. He is no longer the owner of the business and of his means of production. It is not he who directs production, or determines the number and kind of the products. The latter do not belong to him. It is not he who markets them or has an interest in their price, but the capitalist employer. The latter is the producer in the economic sense. The producer’s interest is now that of the capitalist who owns the means of production and the product.

From this interest the interest of the wage-worker differs. He also derives his income from the sale of a commodity in the market, but this commodity consists in his own labour power. Unlike other commodities, it is synonymous with human personality. Again, it is not produced for the market, but grows out of the life process of the worker himself. At the most, it is to some extent adapted to the needs of the labour market by the acquirement of special brands of skill. But the production of the quantity of existing labour power is not, as in the case of commodities proper, determined by the demand for it. It is not produced for the sake of profit.

The production of a commodity can be entirely suspended when no demand for it exists. With the aid of modern technical appliances, its production can be enormously accelerated when the demand grows rapidly. The production of unprofitable commodities ceases, and that of profitable commodities is extended. Upon this point the article from which I have quoted states:

“The production of the commodity labour-power may be conceived in a two-fold sense: in the first place, as the daily reproduction of the individual, as the repair of the labour-power he has expended in the course of the day, and secondly, as the reproduction of the generation, as the replacement of the dying individual by a new one.

“Neither the one nor the other kind of reproduction is carried on for profit; neither eating and sleeping nor the procreation and education of children belong to the category of profitable businesses. They are part of the life process of the worker, are carried out under all circumstances, without any regard to the demand. The supply of labour-power cannot be increased or diminished at will.”

In yet another respect the commodity labour-power differs from other commodities. The costs of production of the latter may always be estimated with technical exactitude. This is not the case with labour-power. The maintenance costs of labour-power are not only physiologically determined, but also comprise elements which are of a purely social nature. We quote Marx:

“The number and extent of his (the worker’s) so-called necessary wants, as also the modes of satisfying them, are themselves the product of historical development, and depend therefore to a great extent on the degree of civilization of a country, more particularly on the conditions under which, and consequently on the habits and degree of comfort in which, the class of free labourers has been formed. In contradistinction therefore to the case of other commodities, there enters into the determination of the value of labour-power a historical and moral element “ (Capital, vol. i., p.150).

The result of all these factors is that the value and the price of labour-power are more conservative than is the case with other commodities. As a rule wages do not fall so quickly and to such a low point as the prices of other commodities, nor do they rise so rapidly and to such a high point. The worker has therefore an interest in the fall of commodity prices, unless this is accompanied by injurious social reactions, such as widespread unemployment. He has no interest in a rise in prices, unless this should be accompanied by compensating circumstances.

Thus the wage-earner suffers most from an artificial dearness of commodities through tariffs, or, as in our days, through inflation. In this respect his interest, strange though it sounds, is not the producer’s but the consumer’s interest. He has the greatest interest in free trade as well as in the stabilization of the currency.

Now, the individual industrial capitalist is interested as a producer merely in his own branch of production. He desires his own products to fetch a high price, not those of other branches of production. Towards these he feels the interest of a consumer, not of a producer. But he has no prospect of influencing politics to secure the passage of measures for his own branch of industry, which would artificially raise the prices of his commodities, while leaving other commodities untouched. To attain this end he must combine with the capitalists of other branches of production. In this respect he resembles, as a producer, the producers under simple commodity production. And accordingly we find in capitalist economy the same antagonism between town and country, industry and agriculture, as in former times. It expresses itself with special vigour in questions of fiscal policy. Where industrialists are free traders, the agrarians are protectionists, and vice versa.

Nevertheless, there is an essential distinction between capitalist and simple commodity production. In the latter case, there is no motive to cause all the branches of production to combine to promote a common policy of raising prices, as each person would lose as a buyer as much as he would gain as a seller.

The case is different under the capitalist mode of production, where the worker and the producer are different persons. To-day all employers stand to gain, even when every branch of production, in town and country, raises prices, whether by tariffs or syndicates or by other methods. For now every producer is able to shift his burden on to the wage-earner.

Thus the wage-earner is now the definite representative of the consumer’s interest in antagonism to the united exploiters who exclusively represent the producer’s interest.

These circumstances are, of course, lost sight of by the champions of the Guild or of the Soviet system. For them the worker is always synonymous with the producer.



(b) Under Socialism

These considerations only apply to specific economic conditions, as we have seen, such as primitive production for use, or simple commodity production. When Socialism is in full operation the idea of producer will be synonymous with the idea of worker. But this will by no means apply to the period of transition.

When, however, Socialism is in full operation, the worker will not only be identical with the producer; but labour will be the only source of income in society, which will consist only of workers and their families, precisely as in the primitive economy, which was our starting-point.

Consequently, it must be assumed that in a socialist society there will be no producer’s interest separate from a consumer’s interest.

Now the chief distinction between primitive Communism and modern Socialism consists in the division of labour. Primitive economy only discloses a division of labour between man and woman in the family. To-day we have an intricate and extensive division of labour in every industry and in society, upon which is based the productivity of labour and the possibility of a socialist system admitting everybody to a share in the benefits of our civilization.

Whereas Socialism, as we shall see, tends to establish equality among all the members of society as consumers, removing class distinctions, while preserving individual idiosyncrasies, it resembles the capitalism which preceded it, inasmuch as it divides the workers in the process of production into various sections, to each of which special conditions correspond, so that every section of labour develops a special interest in shaping for itself the most favourable working conditions. Moreover, the pull exercised by the different sections within society will vary. Some will be engaged in vital services, and others not. Some would endanger the entire process of society if they suspended work only for a short time. In the case of others, society would be able to hold out for a much longer time. Some workers do not require any special preparation and training, and are easily replaceable at any time, whereas it is impossible to replace other kinds of workers without difficulty.

Under these circumstances the producer’s interest in a socialist society would be nothing else than the separate interests of the different vocations. This was also the case under simple commodity production, where we already find the guild policy, the separate policies of the different guilds, their mutual jealousies, their individual strivings for special advantages and a position superior to all the others

Yet the guilds were always held together by common struggles against common opponents, against the urban patriciate, against the landed nobility, or against princely encroachments upon municipal liberties.

As in the guilds, the tendency to pursue a separate policy also dwells in the craft organizations of the workers, the trade unions. Many trade unions prefer to go their own way, without regard to the workers as a whole, or it happens that the favoured sections among the worker become an aristocracy of labour, which elevates itself above the mass of the other workers.

These tendencies have, for example, injured the working class of England for a long time. It is true that they cannot persist in the long run under the capitalist system. The struggle against Capital, the common enemy, eventually compels the various sections of the workers to close their ranks.

This incentive to unite the workers of diverse callings would be absent in a Socialist society. In such a society the workers in a particular calling would be confronted with one factor alone: the workers in all the other vocations, who would appear as consumers, not as producers. The antagonism between consumer’s and producer’s interest becomes at this point an antagonism between the common social interest and the separate vocational interest.

In this consists one of the dangers that threaten a socialist society. We do not for a moment doubt that means exist to avert this danger, above all, in a system of education which would enable every member of society to engage in various occupations. But for the period of transition, the preponderance of vocational interests may, produce very unpleasant consequences. We should be ill-advised to augment this danger by making a producers’ assembly; and not a consumers’ assembly, the supreme power in the State, that is, basing the election of this assembly, not upon universal and equal suffrage, but according to vocational franchise, as advocated by the Soviet system or by Guild Socialism.

We shall probably be told that ordinary Parliaments are representatives of special interests, not only of a vocational, but also of a geographical kind. Every deputy represents the special interests of his constituency.

This is by no means true. It was valid for medieval assemblies, but does not apply to modern times. In the medieval Diets, each citizen deputy represented the interests of the town which had sent him. But in modern Parliaments each member counts as a representative of the entire nation, not of a particular locality. This does not remain an empty phrase, but corresponds to realities, in the degree that capitalist communications link up the separate districts of the State, and thus create the foundations for a modern national democracy, in contrast to primitive and local democracy. In the first National Assembly of the Great French Revolution, the deputies no longer appeared as representatives of their constituencies.

The antagonisms which are fought out in modern Parliaments are those between various classes and different political methods. Each of these parties is coterminous with the whole nation, none represents a merely local interest. Purely local parties, such as the Bavarian Peasant League, are reactionary curiosities, which correspond to obsolete modes of thought and have no future.

The questions around which revolve political contests and parliamentary struggles are mostly of a general, and not of a specific vocational nature. Each class and each party adopts a particular attitude towards these questions, but the questions themselves concern the whole of society.

Will this continue to be the case under Socialism? Will not the political tasks of to-day then vanish, so that the community will no longer have to solve political, but only economic problems? Why then shall we need an assembly of politicians? We shall need an assembly of experts, who are intimately acquainted with economic matters from their own experience. Consequently, the supreme popular assembly should be an assembly of producers, and not of consumers.

But unfortunately the expert of to-day is only a layman in all matters that lie outside his special province. In questions concerning a specific occupation, therefore, a producers’ chamber, composed of representatives of all occupations, would be as much a lay assembly as a consumers’ chamber. It is true that in every occupation there are people who strive to acquire a comprehensive education, and whose knowledge is not confined to their own occupation. But it is precisely these people who have more prospect of getting into a consumer’s chamber, which is elected upon broad social lines, than into the producer’s chamber, to which those are most readily sent who have done the most for the workers of their trade.

Moreover, I am of opinion that the popular assembly in a socialist society will by no means be dominated by economic questions. On account of the widely-extended division of labour, which renders special knowledge necessary for the most efficient organization and conduct of each trade, it would be well to establish each trade on as independent a footing as possible, to accord it the utmost freedom of self-government, and to create proper machinery to ensure that the consumer’s interest is not lost sight of. Once the whole organism is functioning properly, the central committee would only have occasion to intervene when extraordinary and far-reaching innovations were projected, or when great disturbances and conflicts arose.

Generally speaking, we may anticipate that the economic side of life will interest men less and less, as their existences become assured, their incomes adequate, and their working-day shortened. The material foundation will always influence our feelings and our thinking to a considerable extent, but this is not to say that it will always dominate our intellectual life. It dominates our thoughts to-day because nearly all our waking hours are spent in working, our existence is extremely precarious, and a man stands to gain a great deal through the continual observation of economic opportunities, the neglect of which is likely to cause him severe losses.

Once we pass out of this stage, men will not be so exclusively absorbed by economics as hitherto. They will have more time to be interested in the intellectual superstructure which will be reared on the material foundation. Consequently, the supreme popular assembly will have less to do with questions of economics than with questions of culture affecting everybody without distinction of calling.

This change will be accompanied by an alteration in wants. Intellectual wants will grow, and many material enjoyments will fall into contempt. This will effect a change in the aims of production.

Under all conditions, production is carried on with a view to consumption, to the satisfaction of wants. If it be objected that capitalist production does not serve the satisfaction of wants, but aims at securing a profit, I would reply that the striving for profit arises from the capitalist’s desire to consume. If he does not consume the whole of the profit, but puts a portion of it aside, “accumulates” it, in order to augment his capital, this is done for the purpose of eventually increasing his possibilities of consumption.

On the other hand, the capitalist produces commodities, which he does not himself consume but sells. But it would fare badly with him if no consumer could be found.

Thus every act of production has the object of consumption in view. This would not need emphasis if certain critics of capitalism had not imported confusion into this perfectly plain state of affairs. Consumption governs production.

From this standpoint, as from any other from which we may regard the relations of producers and consumers, it seems that no change is required in the election of the popular assembly by universal and equal suffrage.

We need not allow ourselves to be led astray by the aversion of Bakunism and Syndicalism to political parties and Parliaments: an old aversion, which finds a modern expression in the political constitution of the Soviet system and in Guild Socialism.

Yet we must not lose sight of the fact that the consumer’s interest does not represent an active force in social development. The class struggle alone is the driving force of development in a class society. The consumer’s interest only becomes effective when it coincides with a class interest.

It is from the struggle of the workers, and not from the activities of the whole body of consumers, that Socialism will arise, although its success is dependent upon its ability to satisfy the consumer’s interest, or in other words, to raise the productivity of labour. Although the consumer’s interest is of slight account as an active force, it possesses almost irresistible strength as a passive force. No social innovation can last long if it lowers the productivity of labour.

If the workers in a socialist State should organize their labour in a manner convenient to themselves but detrimental to its productivity, such a one-sided policy on the part of the producers would speedily find its Nemesis. The new system would soon enter upon a path of economic retrogression, while the old capitalist States, existing by its side, would continue to develop their productive forces. The inevitable result would be that the workers, or at least a great part of them in the socialist State would be worse off as consumers, in spite of the abolition of capitalist exploitation, than the workers in a capitalist society, in spite of the pressure of increasing exploitation. Sooner or later the socialist community would lose its vitality.

As a matter of fact, we Socialists have always contended that the vitality of a socialist society does not merely depend upon making the whole body of workers producers, that is, the masters of the process of production, but also upon the ability of the workers to raise the total productivity of labour and increase the sum of annual products in relation to the quantity of existing labour-power.

A number of factors are working in this direction.

There is, for example, the cessation of strikes. The strike is the ultima ratio, the last resource of the wage-earners when asserting their interests, just as war is the ultima ratio of kings. Both are barbarous methods, which frequently inflict terrible misery upon the combatants, and also upon the non-combatants, as well as doing economic injury. Nevertheless, the workers cannot and dare not renounce the right to strike, which would mean nothing less than exposing themselves defenceless to the capitalists.

This is no reason why Socialists should support every strike merely because it is a strike. Frivolous or badly organized strikes are a crime from the standpoint of the workers’ interests, which are thereby compromised and injured. To criticize and oppose such strikes is part of the duty of Socialists, which consists in enlightening the workers, and speaking the truth regardless of consequences, not in the demagogic glorification of every stupidity which the workers commit. The courtiers of the workers are as contemptible and dangerous as those of princes.

For the rest frivolous strikes are rare among the workers. Strikes of despair are of more frequent occurrence. Both kinds of strikes are being supplanted by the growth of trade union organization and experience. But the class antagonisms are too acute for strikes not to be inevitable, even in times less agitated than the present, and strikes resemble wars between nations in the fact that as they become less frequent, they increase in area and stubbornness, while their consequences become more devastating.

This is not a condemnation of the strike, but of a mode of production which renders strikes inevitable. Other things being equal, a mode of production which can be carried on without strikes will be far superior to the capitalist system. And this is what we may expect from a socialist community.

The great strength of every modern strike, which is not utterly senseless, consists in the fact that it finds support amongst the whole of the working class, which is imbued with a feeling of solidarity as against the capitalist. The organized working class frequently lends economic support to the strike, but usually its support is of a moral character.

In a socialist society the workers of a particular business or branch of industry would be confronted, not with capitalists, but with the whole body of consumers, who would become synonymous with the whole body of workers. A conflict between both sections, which might lead to a strike, would now be a struggle of a small section of workers, striving for special advantages, against the whole body of workers. Such a struggle would be hopeless from the start, and for this reason, strikes are not to be expected in a socialist society.

We must not be led astray by the fact that strikes often occur to-day in State and municipal undertakings. These undertakings are not yet sufficiently socialized – we shall see later what this means – and it is too obvious that the State and the municipalities are dominated by capital for the workers to be able to draw sharp distinctions between public services and private enterprise.

A socialist society could not only avoid the devastation caused by strikes which is inevitable under capitalism, it could also organize production on more rational lines. Under free commodity production, side by side with technically perfect and ably-managed businesses, there continue to exist many smaller and badly-managed businesses, which are of very slight utility, but whose owners cling to them tenaciously, because their loss would mean economic ruin. On the other hand, if all the businesses in a branch of industry were socialized, it would be an easy matter to shut down the badly-organized undertakings, and to concentrate all the labour-power in the most perfectly-managed undertakings, which would result in a larger output than heretofore.

Considerable quantities of labour-power are now wasted in other ways than through their employment in backward businesses. Owing to the anarchy in the mode of production, the growth of large towns and changes in fashion, much labour is now expended which in a socialist society could be diverted to useful work. On the other hand, the periodical crises cause thousands of persons to be idle who would be productively employed under Socialism.

For all these reasons the labour of the whole body of workers would be more productive under Socialism than it is at present. Socialism is certain to represent an advance from the consumer’s point of view.

All these measures require time to be elaborated and put into operation. In the stage of transition from capitalism to Socialism, we should have to face the danger that particular sections of workers may press their special interests in the process of production beyond the point where they would be compatible with the maintenance of productivity. It may be possible to diminish the intensity of labour within a short time, but any increase in the total productivity of the workers would be a slow process.

This need not lead to such an economic collapse as has occurred in Russia.

Conditions are not everywhere so unfavourable to socialism as there, and industry is not everywhere so weak and the workers so poorly organized as in the Russia of 1917. The ruling party is not everywhere so helpless in face of economic problems as the Bolshevists, who prior to the Revolution had expended all their intellectual energy in the struggle against the police, in preparing for revolts, in splitting hairs over Marxian quotations, in coarse abuse of other socialist parties, and in ruthlessly trampling on every different opinion, so that no time remained for investigating the economic texture of Russia and the economic and political forms which would best correspond to it.

But even where the conditions are more favourable, the danger exists that the one-sided predominance of the producer’s standpoint over the consumer’s standpoint would lead to economic retrogression, which could temporarily impede the progress towards Socialism.


Last updated on 27.1.2004