Karl Kautsky

The Labour Revolution

III. The Economic Revolution


IN applying the principle of socialization, we will not therefore commence with the circulation process, but with the process of production, where the class antagonism between Capital and Labour, which forms the most powerful driving force of socialization, is concentrated.

The first volume of Marx’s Capital, which deals with the process of production, has exercised the most profound historical influence, whereas the second volume, which investigates the circulation process, has only been studied by a few experts.

Production in present-day society, however, is an infinitely varied process. At the time of the Middle Class Revolution, peasant holdings still formed the great majority of the productive undertakings of all countries. It is true that a certain division of labour existed in the towns, but this had not progressed very far.

Division of labour is now the rule in every calling and enterprise, and it grows with the extension of the world market. Every speciality has its peculiar methods, its special technical and economic conditions, which also create particular forms of organization in the business.

The capitalist mode of production has become the dominant, but it is by no means the sole type of enterprise. Numerous pre-capitalist types of business are still in existence, especially in agriculture. Even industrial capitalism itself, which changes so rapidly, exhibits various forms of development, from the smallest home industry, organized and exploited by an agent, to the giant concern whose prototype is the American Steel Trust.

And to these variations in the stages of economic development are to be added variations in technique, which require one set of forms and conditions of organization for the heavy metals industry, and another for the textile industry, another for the chemical industry, and another for printing, etc.

Consequently, not all branches of production and not all undertakings are equally ripe for immediate socialization, which will have to begin where conditions are most favourable. Fortified by the experience there acquired, socialization will gradually extend its influence to more complicated and difficult provinces. Its starting-points will vary considerably, and different forms will have to be adopted in the different branches of production. With growing experience, new forms will be added to the forms which we are able to foresee to-day, for life always proves richer than the most luxuriant imagination. The reflection of life in our minds is always an abstraction, a simplification. This is true of the reflection of the present in which we have our being; how much more true of the picture we are able to sketch of the future with the assistance of a few indications.

This has often been overlooked in our own ranks, as well as by our opponents, and there has grown up the conception of a socialist system of production marked by extreme uniformity. All businesses are to be transformed into State undertakings, like the post office and the railways, and directed by the official bureaucracy. Production has also been organized upon these lines in the Soviet State.

Now one may cherish the most various ideas concerning socialist production, but one thing is certain: the official bureaucracy, by virtue of its history and nature, is the most unsuitable agency for the establishment of socialist production.

We have already seen that Marx proposed to restrict their sphere of activity to the utmost. This applies to economics as well as to politics.

Be it noted that we are here speaking of the political bureaucracy, not of bureaucracy in general, of which the political is only a special department.

The future of economics, as well as of politics, belongs to mass organization, which requires a direction composed of numerous organs. The more difficult the social problems which such an organization has to solve, the less will its director and his assistants be able to manage with mere common sense and ordinary education. The less will it be an amateur task, carried on in the leisure hours of the evening. It will require cultivated and experienced experts, who will constitute in their offices a special organization, a bureaucracy.

No doubt the office people would form a danger to the members of the organization. The individual members as separate units would be confronted by the closed phalanx of the managing office, the staff of which would always be in touch with each other, and be superior to the members, if not in general education, at least in expert knowledge

Nevertheless, the most democratic mass organization, if it has to solve modern social problems, cannot manage without a bureaucracy. A democracy which tried to dispense with bureaucratic assistance would only be capable of solving simple problems. Modern democracy signifies not the abolition of bureaucracy, but its subordination to the members of the organization, upon whose power of selection and control it would be dependent.

It may be admitted that this alone would not safeguard democracy in view of the natural superiority of the bureaucrats over the multitude.

General mistrust has been recommended as a safeguard against the bureaucracy, and especially its heads. Bebel, for instance, was fond of praising mistrust as a democratic virtue. But in reality mistrust produces a paralysing effect. An organization which distrusts its leaders, which is not inspired by perfect confidence in its leaders, will never accomplish great things. Yet it is ludicrous to observe that many leaders demand trust from their members as a duty on the latter’s part. Confidence can never be exacted; it can only be offered. And blind confidence produces disastrous results, just as much as blind mistrust, which is incapable of separating the wheat from the chaff.

It is not mistrust which would avert the danger of the office chiefs developing into a real bureaucracy, but only the intelligence and knowledge of the masses. If the masses are unable to acquire the detailed expert knowledge which the office people possess, because they can only devote intermittent attention to these things, they ought at least to be intelligent and instructed enough to be able to distinguish expert arguments from phrases and serious workers from demagogues. Given these conditions, the workers should be able to control a bureaucracy which is part of a democratic organization, and it should prove an efficient instrument to promote the aims of the organization.

These remarks apply to bureaucracy in general, of which political bureaucracy is a special branch. In its present form it is the offspring of the absolutism that developed with the rise of the monetary system.

In the period of medieval natural economy, the State possessed no means of paying its officials and also, its soldiers other than granting them the tenure of estates, together with the services of the labourers attached thereto. This made the officials as well as the warriors very independent of their masters. As a rule, they discovered how to transform the land which they held on fief into an hereditary estate, and to give an independent direction to the administration of the district assigned to them. Local government in the State was widely spread at that time, although it rested upon an aristocratic rather than a democratic basis.

By the side of the administration of the feudal lords in the provinces loomed that of the towns, each of which possessed as much freedom as it had been strong enough to wrest from the princes in whose domains it was situated. They were more or less free republics, but their local government generally bore an aristocratic character. The patricians, in conjunction with the merchant princes, carried on the administration, with the co-operation of the guilds, which only in exceptional cases gained supreme power. The lower, non-guildsman population had no voice whatever in the municipal government.

As the third factor in the administration of the State there was the Church, which was the greatest, most powerful, and most intelligent of the medieval organizations.

In competition with these three independent administrative elements, the monarchs played a sorry part. They could only gain power by a foreign policy which favoured the united interests of the ruling classes, or by skilfully playing off these factors against each other. The towns were always ready to assist the monarch when he was opposing the nobles or the Church.

The result of this was a consolidation of the State power, which eventually grew into absolute power.

Commodity production in the towns assisted the growth of the monetary system, and provided opportunities for the imposition of money taxes. As soon as the princes had large sums of money at their disposal, they were able to enlist the services of warriors and officials for regular cash payments. Such soldiers and officials were bound to their masters by ties of economic dependence which were quite different from the ties which bound the warriors and administrators of the Middle Ages. The latter had control of landed property, from which they derived an income through their own administrative activity, without any assistance from the prince. The prince had nothing more to give them after he had rewarded them with their property, except additional property which had been taken from another.

On the other hand, under the monetary system, the State officials and soldiers were left stranded as soon as their monthly salaries were no longer forthcoming.

If the armed soldiers could sometimes assist themselves by means of mutiny, this resource was denied the unarmed State officials. Their situation was marked by utter dependence upon the petty princes.

To increase their standing army and their body of officials now became one of the most important tasks of the monarchs. The more they succeeded in carrying out this task, the more the old forms of local administration, ecclesiastical, feudal, and municipal, decayed. The ecclesiastical hierarchy was now incorporated into the State bureaucracy, which abolished municipal liberties. While the feudal lords continued to draw their incomes from their estates, the protective, administrative, and juridical duties, which they were formerly obliged to perform in return, lapsed, and were taken over by the paid armies and the State bureaucrats.

Thus an enormous bureaucratic machine was eventually created. In alliance with the standing armies, it drew the teeth of resistance to the State power for a long period, and created monarchical absolutism. The latter was at times so strong that it appeared to be independent of all classes and to dominate them all. In reality, under absolutism there governed that section of the upper classes which gained influence over the monarch and his ministers at Court – the Court nobility, the Court clergy, the financial magnates, who as tax-farmers and even more as moneylenders became supremely important to the State.

Nevertheless, even very wise people have often mistaken the appearance for the reality, and assigned to what they regarded as the State, that is, the bureaucracy which seemed to be raised above all classes, the task of representing and enforcing the common social interest, eternal justice, or other postulates of a morality independent of space and time, against the particular interests of the separate classes:

Not every modern State is characterized by this type of bureaucracy. In the Anglo-Saxon world the monarchy lacked the support of an army to crush opposition. There absolutism and the omnipotence of the bureaucracy could not be enforced. The aristocratic local government remained in existence there until it could be replaced by a democratic bureaucracy, without passing through the intermediate stage of a powerful bureaucracy.

Of course, a bureaucracy also exists in England. Without it no great modern organization, and therefore no modern State, could be developed. But it remained for a long time without the range and the attributes of the Continental bureaucracies.

The latter formed a privileged association, the representatives of the State authority, before which every simple citizen in the State had to bow – except, of course, the regents of the State themselves and their friends. To enforce obedience is the first task of the State bureaucracy. It seeks to attain this end by means of the immense superiority which the State possesses when confronting an individual. Its home policy is a policy of coercion, even where it exercises economic functions. It has to raise the gigantic sums of money which the State apparatus costs. Its means are not only the levying of taxes and duties, but also the administration of the fiscal undertakings. These are generally monopolies, which forcibly suppress all competition and fix selling prices at their pleasure.

As the State bureaucrat must enforce obedience, so he must render blind obedience himself. It is not his own will, but that of his supreme master, which he has to execute unquestioningly in the manner assigned to him. He must have no will of his own, or at least not reveal any. Independent thought is a danger to officials, and is therefore to be avoided as much as possible. It is to a great extent rendered superfluous, inasmuch as in normal times the political conditions alter but little, and the same processes are generally repeated in the State administration. What deviates from routine is too insignificant to be regarded. The engine of the State power passes right over it. If despite this a deviation from routine is required, numerous superior authorities must first be consulted before it can be sanctioned. After routine and ossification, clumsiness is one of the most striking features of State bureaucracy.

The bureaucracy which capitalism has created for its ends is moulded on a different pattern.

It coincides with the State bureaucracy, and is distinguished from a trade union or co-operative bureaucracy by virtue of the fact that it does not have to watch the interests of the members of the community which it administers – in the one case citizens, in the other wage-workers – but has to represent the interest of a master who is over and above the members – in one ease the monarch, in the other case the capitalist. But its power over the individual is not so great in the capitalist business as in the State: the officials of capital cannot practise coercion as easily as the State officials.

Moreover, the officials of capital are not merely active in the process of production; they are also and chiefly active in the circulation process, where a policy of coercion is generally futile. Here the separate businesses are on a footing of equality; here the economic laws prove stronger than personal idiosyncrasies; here situations and conditions change rapidly; here superior knowledge, skill, and rapid powers of decision carry the day. In this sphere the blind obedience of officials to their superiors and their red tape instructions are of no use. Of course, the capitalist as well as the minister must ensure that all his officials do their duty and are animated by a feeling of responsibility towards and interest in the undertaking, but independence on the part of a subordinate is not a danger, rather an advantage, to the capitalist manager. The capitalist seeks to provide for the efficient conduct of his business rather by the careful selection of the servants he employs than by prescribing a rigid code of instructions for his officials.

Now in the sphere of the State the personal qualities of the officials find very little scope for employment. This is prevented by the enormous extent of the State machine. The State is therefore obliged to select its servants through the mechanical agency of examinations. Whatever personal selection is exercised beyond this is almost entirely the rapid promotion of protected persons, and is chiefly the selection of incapable, not of capable, individuals.

The average official is promoted to a higher position according to seniority. Thus, apart from the exceptions above mentioned, the higher posts are almost exclusively occupied by old gentlemen, tired, used-up and rendered inaccessible to all new ideas by their eternal routine tasks.

In this respect State bureaucracy differs, very much to its detriment, from capitalist bureaucracy. They differ from each other very much as the armies of the first French Republic and of Napoleon’s early career differed from those of the military powers which they fought. The former owed their successes not least to the circumstance that their generals were almost all young men, while the opposing armies were commanded by very old gentlemen.

In addition, salaries are strictly classified in the State bureaucracy, in conformity with the other routine practices. There is neither a share in the increased profits of State undertakings, nor an increased salary for eminent services.

In this request the capitalist business is much more elastic, and for any case that arises it may fix any kind and amount of remuneration which promises the best economic success. We have already referred to the fact that the mass of surplus value which has accumulated in capitalist hands has enormously increased. Consequently, the great capitalists are in a position to expend extraordinarily high sums for eminent services in various provinces which either meet with their approval or promote their interests, as, for example, upon horse-racing, orchids, as well as for artistic performances, singers, painters, and others.

As they are often prepared to expend millions upon senseless luxuries, they do not spare money when their health or their profits are in question. They frequently spend huge sums upon a famous doctor, from whom they expect health. Similarly, they will spend money for the services of an eminent organizer.

Dr. Beck draws the real distinction between the technical expert and the organizer.

“Men may become technical experts through study, but the organiser is always born, not made.”

Great organizers are as rare as great artists. For the large business they are all the more indispensable, the more extensive the undertaking, and the more various and intricate its ramifications into the total economic processes of society.

This fact has long been recognized by capital, and consequently the separate businesses seek to attract qualified organizers by offering them enormous advantages and great freedom of movement.

The State bureaucracy requires eminent organizers not less than the capitalist, but rather more so. But it offers them neither freedom of movement nor extraordinary advantages. So long as capitalist industry and world intercourse remained undeveloped, the service of the State offered to adolescent intelligence the best chance to attain to an eminent economic and social position. Many men of outstanding intellectual powers flocked to the State, who might have found scope in the spheres of organization and administration. With the development of large-scale industry and world intercourse; this contingent became smaller and smaller, and the State bureaucracy was impoverished of just those forces which it most urgently needed, as it could no longer maintain competition with capital for the services of the organizer.

Now a socialized undertaking will be obliged to embark upon this competition with capital. It will not be able to thrive without competent organizers, and must offer them at least the same advantages as the capitalist business.

For this reason it is impossible to give effect to the demand put forward by Marx, and adopted by Lenin, that nobody employed in the State service should receive a salary in excess of workers’ wages. This principle may be in harmony with Labour sensibilities and our socialist conceptions, but it is incompatible with economic require ments, which always enforce themselves. We shall do well to recognize this fact from the start and allow it to guide our actions, instead of becoming wise after bitter experience.

In a completely socialist society, where the socialized undertakings have no longer to compete with capital, the great organizers will find no other fields of activity than the service of society. Then they will be obliged to reconcile themselves to receiving no better pay than other intellectuals. Despite this, striking achievements will not be a thing of the past, either in art or in science or in the sphere of organization. The inner urge, ambition, delight in power and reputation will be sufficient incentives to such achievements.

But this will not apply to the period of transition from capitalist to socialist production. As long as capital is in a position to produce surplus value, it will try to attract great organizers by offering them important advantages, and thereby attain to a position of superiority over all undertakings that are not able to offer equal inducements.

To all the above causes of the superiority of capitalist bureaucracy to State bureaucracy must be added the circumstance that the latter forms the largest and most firmly knit body in society. As a result the State bureaucracy of all social bodies exhibits the greatest inertia in the settlement of questions, except where its own interest has not impelled it to offer opposition.

Moreover, the State is not only the most comprehensive and important, but also the longest lived of all social organizations. Like everything else it is mortal, but it is immortal in comparison with the individual. Consequently the State official is a servant of the State for life, and is chained to the same vocation for his lifetime. In contrast, a capitalist undertaking, however extensive it may become, is small, frequently short-lived, and generally liable to rapid changes in its character. Its employees and even its lower officials are not permanently attached to it, nor it to them. The effect of this, in conjunction with the other peculiarities of the capitalist business, is that the undertaking is as free to select the most suitable among its workers, as it is free to adapt itself to changing conditions and to enforce the strictest economy, which is one of the conditions of its existence.

The State bureaucracy, on the other hand, is clumsy, uneconomical, without means for selecting the most suitable persons for particular functions, and therefore extremely conservative. This bureaucracy has proved to be the greatest obstacle to progress during the last two centuries. It has survived numerous revolutions, from each of which it has emerged stronger than ever, even when they swept away monarchies, aristocracies, and State Churches.

If the modern State power has so little altered in its essence during the last two centuries, in spite of the progress of democracy, that it moves us to say of it, Plus ça change, plus c’est la même chose, the explanation of it is to be sought in the bureaucracy.

And this is to be the power which will accomplish the Social Revolution and emancipate the workers!

Since the coming of absolutism and the police State; the people on the Continent have grown so accustomed to expect the redress of all grievances from the supreme authorities, and to hold the Government responsible for all evils, as well as expecting brilliant achievements from them, that the idea of a bureaucratic nationalization of the whole of production holds no terrors for many.

Even those among us who oppose this idea do not consider it necessary to assert the contrary view with any great energy. Thus it was possible for the Russian Soviet State, which nationalized the whole of production and subjected it to an omnipotent, strictly centralized bureaucracy, which abolished every independent organization in the State – for such a State to be erected by Socialists, and regarded by other Socialists as a higher mode of production and a means for the emancipation of the workers.

In Anglo-Saxon countries the State bureaucracy has never played the same part as on the Continent, and there the masses have never depended upon the bureaucracy, viewing it rather with an instinctive mistrust. It is true that Socialism, in the shape of Owenism and Chartism, became a practical force in England earlier than elsewhere. But when Chartism collapsed in 1848, and when the Labour movement revived in the sixties of the last century, the workers threw all their energies into the development of their voluntary organizations, the co-operative societies, and above all the trade unions. On the other hand, their enthusiasm could not be aroused by the forms of Socialism which were then transplanted from the Continent, and which seemed to them to bear a strong impress of State Socialism.

The repugnance to the State bureaucracy was not a little responsible for the fact that Modern Socialism found it so difficult to strike root in England. The English masses will be won over all the sooner the more clearly we realize that the State bureaucracy is not an economic apparatus, but merely an apparatus of government, and that it will be incumbent on us to supplant it alike in the economic and in the political sphere.

What we have to advocate is the socialization of the means of production, which signifies that the State will own the most important of them, but does not imply the conduct of these undertakings by the State bureaucracy.

Against this the workers must set their faces, for Socialism should bring freedom and not servitude, Where State services are already in existence, we must ensure that, while remaining State property, they are withdrawn from the State bureaucracy. So long as we are without a Socialist majority in Parliament, and therefore without a Socialist Government, this is the only aspect of socialization which we shall be able to enforce. It is by no means insignificant. The sooner we succeed in placing the State services on a sound basis, which will provide satisfactory conditions both for workers and for consumers, the easier will it be to extend socialization to other undertakings and branches of industry. It is arguable whether it is right and proper to concede to State officials, who are the representatives of the State authority, the right to strike. This right is assuredly in complete contradiction to the history and the nature of the State bureaucracy. But the more decisively we may repudiate their right to strike, the more necessary will it be to restrict the designation of State officials to those elements that are actually nothing but the representatives and coadjutors of government. It would be utterly absurd to subject engine drivers to the same discipline as policemen or Customs officials. Those who may be engaged in the economic services of the State should have at least the same rights as other workers possess as against their employers. In the interest of the workers themselves, we must condemn and oppose every frivolous strike. We are justified in demanding that workers engaged in vital services should never take action on their own account, but always in agreement with the whole of the organized workers. But we must offer energetic opposition to the notion of making workers State officials and depriving them of their right to defend themselves against an unsympathetic superior bureaucracy.

But does not State service carry with it certain material advantages, corresponding to the greater obligations of the workers concerned, such as security of existence, care of the family after the bread-winner’s death, and the like? Those workers who are in State service ought not to lose these advantages. But we advocate them for all workers, whatever may be the nature of their employment. And they should be assured to each citizen by society and not by the undertaking which employs him. All welfare institutions for the workers are changed from a benefit into an oppressive burden when they are undertaken by the business which employs them, and become a means of attaching them to such business. Let us therefore have no bureaucracy in the State services.

Socialism is to grow out of capitalism. It is to be organized upon the basis of the experience acquired by the economic organizations which the capitalist epoch has brought into existence, the economic organizations of the wage-earners, trade unions, and co-operative societies, and the economic organizations of capital.

Socialism is not to grow out of the governmental apparatus which eighteenth-century absolutism created, nor even out of the branches which it created for the extraction of surplus value, that is, its fiscal services.


Last updated on 27.1.2004