Rosa Luxemburg
Reform or Revolution

Part Two

Chapter VI
Economic Development and Socialism

The greatest conquest of the developing proletarian movement has been the discovery of grounds of support for the realisation of socialism in the economic condition of capitalist society. As a result of this discovery, socialism was changed from an “ideal” dreamt of by humanity for thousands of years to a thing of historic necessity.

Bernstein denies the existence of the economic conditions for socialism in the society of today. On this count his reasoning has undergone an interesting evolution. At first, in the Neue Zeit, he simply contested the rapidity of the process of concentration taking place in industry. He based his position on a comparison of the occupational statistics of Germany in 1882 and 1895. In order to use these figures for his purpose, he was obliged to proceed in an entirely summary and mechanical fashion. In the most favourable case, he could not, even by demonstrating the persistence of middle-sized enterprises, weaken in any the Marxian analysis because the latter does not suppose as a condition for the realisation of socialism either a definite rate of concentration of industry – that is, a definite delay of the realisation of socialism – or, as we have already shown, the absolute disappearance of small capitals, usually described as the disappearance of the petit bourgeoisie.

In the course of the latest development of his ideas Bernstein furnishes us, in his book, a new assortment of proofs: the statistics of shareholding societies. These statistics are used in order to prove that the number of shareholders increases constantly and as a result the capitalist class does not become smaller but grows bigger. It is surprising that Bernstein has so little acquaintance with his material. And it is astonishing how poorly he utilises the existing data in his own behalf.

If he wanted to disprove the Marxian law of industrial development by referring to the condition of shareholding societies, he should have resorted to entirely different figures. Anybody who is acquainted with the history of shareholding societies in Germany knows that their average foundation capital has diminished almost constantly. Thus while before 1871 their average foundation capital reached the figure of 10.8 million marks, it was only 4.01 million marks in 1871, 3.8 million marks in 1873, less than a million from 1882 to 1887, 0.52 million in 1891 and only 0.62 million in 1892. After this date the figures oscillated around 1 million marks, falling to 1.78 in 1895 and to 1.19 in the course of the first half of 1897. (Van de Borght: Handwörterbuch der Staatsswissenschaften, 1.)

Those are surprising figures. Using them, Bernstein hoped to show the existence of a counter-Marxian tendency for retransformation of large enterprises into small ones. The obvious answer to his attempt is the following. If you are to prove anything at all by means of your statistics, you must first show that they refer to the same branches of industry. You must not show that small enterprises really replace large ones, that they do not. Instead, they appear only where small enterprises or even artisan industry were the rule before. This, however, you cannot show to be true. The statistical passage of immense shareholding societies to middle-size and small enterprises can be explained only by referring to the fact that the system of shareholding societies continues to penetrate new branches of production. Before, only a small number of large enterprises were organised as shareholding societies. Gradually shareholding organisation has won middle-size and even small enterprises. Today we can observe shareholding societies with a capital of below 1,000 marks.

Now, what is the economic significance of the extension of the system of shareholding societies? Economically, the spread of shareholding societies stands for the growing socialisation of production under the capitalist form – socialisation not only of large but also of middle-size and small production. The extension of shareholding does not, therefore, contradict Marxist theory but on the contrary, confirms it emphatically.

What does the economic phenomenon of a shareholding society actually amount to? It represents, on the one hand, the unification of a number of small fortunes into a large capital of production. It stands, on the other hand, for the separation of production from capitalist ownership. That is, it denotes that a double victory being won over the capitalist mode of production – but still on a capitalist base.

What is the meaning, therefore, of the statistics cited by Bernstein according to which an ever-greater number of shareholders participate in capitalist enterprises? These statistics go on to demonstrate precisely the following: at present a capitalist enterprise does not correspond, as before, to a single proprietor of capital but to a number of capitalists. Consequently, the economic notion of “capitalist” no longer signifies an isolated individual. The industrial capitalist of today is a collective person composed of hundreds and even of thousands of individuals. The category “capitalist” has itself become a social category. It has become “socialised” – within the frame-work of capitalist society.

In that case, how shall we explain Bernstein’s belief that the phenomenon of share-holding societies stands for the dispersion and not the concentration of capital? Why does he see the extension of capitalist property where Marx saw its suppression?

That is a simple economic error. By “capitalist,” Bernstein does not mean a category of production but the right to property. To him, “capitalist” is not an economic unit but a fiscal unit. And “capital” is for him not a factor of production but simply a certain quantity of money. That is why in his English sewing thread trust he does not see the fusion of 12,300 persons with money into a single capitalist unit but 12,300 different capitalists. That is why the engineer Schulze whose wife’s dowry brought him a large number of share from stockholder Mueller is also a capitalist for Bernstein. That is why for Bernstein the entire world seems to swarm with capitalists.

Here too, the theoretic base of his economic error is his “popularisation” of socialism. For this is what he does. By transporting the concept of capitalism from its productive relations to property relations, and by speaking of simple individuals instead of speaking of entrepreneurs, he moves the question of socialism from the domain of production into the domain of relations of fortune – that is, from the relation between Capital and Labour to the relation between poor and rich.

In this manner we are merrily led from Marx and Engels to the author of the Evangel of the Poor Fisherman. There is this difference, however. Weitling, with the sure instinct of the proletarian, saw in the opposition between the poor and the rich, the class antagonisms in their primitive form, and wanted to make of these antagonisms a lever of the movement for socialism. Bernstein, on the other hand, locates the realisation of socialism in the possibility of making the poor rich. That is, he locates it in the attenuation of class antagonisms and therefore in the petty bourgeoisie.

True, Bernstein does not limit himself to the statistics of incomes. He furnishes statistics of economic enterprises, especially those of the following countries: Germany, France, England, Switzerland, Austria and the United States. But these statistics are not the comparative figures of different periods in each country but of each period in different countries. We are not therefore offered (with the exception of Germany where he repeats the old contrast between 1895 and 1892), a comparison of the statistics of enterprises of a given country at different epochs but the absolute figures for different countries: England in 1891, France in 1894, United States in 1890, etc.

He reaches the following conclusion: “Though it is true that large exploitation is already supreme in industry today, it nevertheless, represents, including the enterprises dependent on large exploitation, even in a country as developed in Prussia, only half of the population occupied in production.” This is also true about Germany, England, Belgium, etc.

What does he actually prove here? He proves not the existence of such or such a tendency of economic development but merely the absolute relation of forces of different forms of enterprise, or put in other words, the absolute relations of the various classes in our society.

Now if one wants to prove in this manner the impossibility of realising socialism one’s reasoning must rest on the theory according to which the result of social efforts is decided by the relation of the numerical material forces of the elements in the struggle, that is, by the factor of violence. In other words, Bernstein, who always thunders against Blanquism [See: Louis Blanqui], himself falls into the grossest Blanquist error. There is this difference, however. To the Blanquists, who represented a socialist and revolutionary tendency, the possibility of the economic realisation of socialism appeared quite natural. On this possibility they built the chances of a violent revolution – even by a small minority. Bernstein, on the contrary, infers from the numerical insufficiency of a socialist majority, the impossibility of the economic realisation of socialism. The Social-Democracy does not, however, expect to attain its aim either as a result of the victorious violence of a minority or through the numerical superiority of a majority. It sees socialism come as a result of economic necessity – and the comprehension of that necessity – leading to the suppression of capitalism by the working masses. And this necessity manifests itself above all in the anarchy of capitalism.

What is Bernstein’s position on the decisive question of anarchy in capitalist economy? He denies only the great general crises. He does not deny partial and national crises. In other words, he refuses to see a great deal of the anarchy of capitalism; he sees only a little of it. He is – to use Marx’s illustration – like the foolish virgin who had a child “who was only very small.” But the misfortune is that in matters like economic anarchy little and much are equally bad. If Bernstein recognises the existence of a little of this anarchy, we may point out to him that by the mechanism of the market economy this bit of anarchy will be extended to unheard of proportions, to end in collapse. But if Bernstein hopes to transform gradually his bit of anarchy into order and harmony while maintaining the system of commodity production, he again falls into one of the fundamental errors of bourgeois political economy according to which the mode of exchange is independent of the mode of production.

This is not the place for a lengthy demonstration of Bernstein’s surprising confusion concerning the most elementary principles of political economy. But there is one point – to which we are led by the fundamental questions of capitalist anarchy – that must be clarified immediately.

Bernstein declares that Marx’s law of surplus value is a simple abstraction. In political economy a statement of this sort obviously constitutes an insult. But if surplus value is only a simple abstraction, if it is only a figment of the mind – then every normal citizen who has done military duty and pays his taxes on time has the same right as Karl Marx to fashion his individual absurdity, to make his own law of value. “Marx has as much right to neglect the qualities of commodities till they are no more than the incarnation of quantities of simple human labour as have the economists of the Böhm-Jevons school to make an abstraction of all the qualities of commodities outside of their utility.”

That is, to Bernstein, Marx’s social labour and Menger’s abstract utility are quite similar – pure abstractions. Bernstein forgets completely that Marx’s abstraction is not an invention. It is a discovery. It does not exist in Marx’s head but in market economy. It has not an imaginary existence, but a real social existence, so real that it can be cut, hammered, weighed and put in the form of the money. The abstract human labour discovered by Marx is, in its developed form, no other than money. That is precisely one of the greatest of Marx’s discoveries, while to all bourgeois political economists, from the first of the mercantilists to the last of the classicists, the essence of money has remained a mystic enigma.

The Boehm-Jevons abstract utility is, in fact, a conceit of the mind. Or stated more correctly, it is a representation of intellectual emptiness, a private absurdity, for which neither capitalism nor any other society can be made responsible, but only vulgar bourgeois economy itself. Hugging their brain-child, Bernstein, Böhm and Jevons, and the entire subjective fraternity, can remain twenty years or more before the mystery of money, without arriving at a solution that is different from the one reached by any cobbler, namely that money is also a “useful” thing.

Bernstein has lost all comprehension of Marx’s law of value. Anybody with a small understanding of Marxian economics can see that without the law of value, Marx’s doctrine is incomprehensible. Or to speak more concretely – for him who does not understand the nature of the commodity and its exchange the entire economy of capitalism, with all its concatenations, must of necessity remain an enigma.

What precisely was the key which enabled Marx to open the door to the secrets of capitalist phenomena and solve, as if in play, problems that were not even suspected by the greatest minds of classic bourgeois economy? It was his conception of capitalist economy as an historic phenomenon – not merely in the sense recognised in the best of cases by the classic economists, that is, when it concerns the feudal past of capitalism – but also in so far as it concerns the socialist future of the world. The secret of Marx’s theory of value, of his analysis of the problem of money, of his theory of capital, of the theory of the rate of profit and consequently of the entire existing economic system is found in the transitory character of capitalist economy, the inevitability of its collapse leading – and this is only another aspect of the same phenomenon – to socialism. It is only because Marx looked at capitalism from the socialist’s viewpoint, that is from the historic viewpoint, that he was enabled to decipher the hieroglyphics of capitalist economy. And it is precisely because he took the socialist viewpoint as a point of departure for his analysis of bourgeois society that he was in the position to give a scientific base to the socialist movement.

This is the measure by which we evaluate Bernstein’s remarks. He complains of the “dualism” found everywhere in Marx’s monumental Capital. “The work wishes to be a scientific study and prove, at the same time, a thesis that was completely elaborated a long time before the editing of the book; it is based on a schema that already contains the result to which he wants to lead. The return to the Communist Manifesto (that is the socialist goal! – R.L.), proves the existence of vestiges of utopianism in Marx’s doctrine.”

But what is Marx’s “dualism” if not the dualism of the socialist future and the capitalist present? It is the dualism of Capitalism and Labour, the dualism of the bourgeoisie and the proletariat. It is the scientific reflection of the dualism existing in bourgeois society, the dualism of the class antagonism writhing inside the social order of capitalism.

Bernstein’s recognition of this theoretic dualism in Marx as “a survival of utopianism” is really his naïve avowal that he denies the class antagonisms in capitalism. It is his confession that socialism has become for him only a “survival of utopianism.” What is Bernstein’s “monism” – Bernstein’s unity – but the eternal unity of the capitalist regime, the unity of the former socialist who has renounced his aim and has decided to find in bourgeois society, one and immutable, the goal of human development?

Bernstein does not see in the economic structure of capitalism the development that leads to socialism. But in order to conserve his socialist program, at least in form, he is obliged to take refuge in an idealist construction placed outside of all economic development. He is obliged to transform socialism itself from a definite historical phase of social development into an abstract “principle.”

That is why the “co-operative principle” – the meagre decantation of socialism by which Bernstein wishes to garnish capitalist economy – appears as a concession made not to the socialist future of society but to Bernstein’s own socialist past.


Next: Chap.7: Co-operative, Unions, Democracy

Last updated on: 21 July 2010