Original Title: Betriebsorganisation oder Gewerkschaften?, Hamburg, 1919. This pamphlet contains the text of a speech presented on August 16, 1919 before the assembly of the Communist Party's Hamburg local. It was published "by unanimous consent of the assembly".
The German revolution, whose political phase ended on November 9, 1918, meant, in addition to the destruction of German imperialism by means of the war, the destruction of the entire German Empire as well. Once its military power was destroyed, and the workers and soldiers told the big landowners and princes to go to hell, the German Empire, as it had existed until that time, ceased to exist. The German Empire had been, since 1871, a bourgeois class state under the leadership of princes and big landowners. It is true of every state that it provides an organization for the people within its borders. All bourgeois class states involve the concentration of their inhabitants into one nation. A nation is the organization of the people under the leadership of the bourgeoisie. The founding of the nation means that the bourgeoisie is organized as the ruling class, and that it tries to make sure that the subject masses are either totally isolated or believe in an organization which cannot endanger bourgeois rule. As long as a bourgeois state is firmly rooted in the means of political power, the ruling class possesses the power to prevent the proletariat from creating a revolutionary organizational form. If the proletariat wants to organize, it must first acknowledge this state and unite within a framework which the latter generously concedes for a certain form of organization. When the proletariat began its class struggle it confronted the ruling bourgeoisie in a situation where it had no right to organize. So the struggle of the proletariat began with the struggle for its right to freedom of association. This is why, in a military-police-bureaucratic state like the German Empire after 1871, the struggle began with political forms. The political struggle had to build the foundations which would enable the proletariat to construct its own economic organization. The political struggle is also the vehicle for expanding the scope of the freedom conceded by the bourgeoisie to the proletariat to form its own organizations.
This is why, prior to the revolution, both the political and trade union movements, despite their laying claim to the revolutionary traditions of 1848, were essentially reformist. The workers movement was reformist because it recognized the class state, because its principle goal was to try to influence the rulers from within an institution of the class state, from inside parliament. It was reformist in its trade union struggles because, rather than organizing the working class with the objective of destroying the bourgeoisie, and abolishing the principle of hiring wage labor, its goal was to negotiate with the employers, guaranteeing their future existence, and thus to try to obtain more favorable wages and working conditions for particular sectors of the working class. And when the party and trade unions participated in the class struggle, they did so only within the framework of the existing state. Even in the heat of the struggle, in strikes, it was, for the trade unions, not a matter of attempting to destroy the bourgeoisie but of compelling particular groups to yield to certain demands of particular sectors of the working class, demands which were framed so that their satisfaction would be possible, and would by no means jeopardize the future prosperity of capital. This must be kept well in mind if we want to clearly understand whether the trade union form of pre-revolutionary times corresponds to the needs of the German proletariat now that it has carried out a political revolution. Having destroyed the power of the landowners and princes which the bourgeoisie had at its disposal, the originally political revolution has destroyed all powers which could have blocked the proletariat’s road to power. Then the proletariat faced the question: what kind of state should be organized? Should a capitalist state or a proletarian state be born? The old capitalist state was overthrown by the revolution; when it fell, there was no state at all, and the decision concerning what kind of state should replace the old one which had fallen was in the hands of the proletariat. The proletariat has not become aware of this fact; it was not accustomed to reflecting on the nature of the state. The proletariat had customarily restricted its efforts to gathering together a mountain of white slips of paper every five years, so that its so-called representatives could climb up to the heights of parliament. In matters relating to economic organization, the proletariat has been prone, or compelled, to yield all decision-making power to a small group of leaders, and to limit itself to paying its dues, so that a small number of leaders can enjoy a safe and secure existence. These were basically the functions of the proletariat in Germany, and if its trade union and political organizations were used for anything else, it was with the intention of transmitting the stultifying mental training for which the school and the barracks had so nobly prepared the German people, the party and the trade unions, as well as the workers, who might otherwise have developed revolutionary ideas. Since the only thing which the essence of the state has to deal with now is revolutionary activity, it tries with great determination to get the German proletarians to exercise themselves over the question of whether this or that indirect tax is more or less beneficial for the landowners, rather than the problem of analyzing the nature of bourgeois power, and what kind of power the proletariat has to create in order to eventually organize that power as a state. All the Kautskyists spoke of the conquest of power, but how to achieve this conquest is not the subject of their study, nor do they want the workers to attend to the matter. Now, when it has been two years since a proletariat which is not as cultivated as the German proletariat, the Russian working class, showed what means are required for the conquest of power, and upon what basis this power is subsequently organized, then all the Kautskyists come and implore the German people, for the love of God, not to imitate the “cruelties” unleashed by the destruction of the bourgeoisie as a class in Russia.
The German proletariat had grown accustomed to following its leaders; the whole world only appeared to it as a prison courtyard, and no one was more surprised by the successfully concluded German revolution than the German proletarians themselves. Had this not been the case, if their capacity to speak and to think had not been so astoundingly lost, then at that moment, at least, they would have asked what had to be done to defend the power they had conquered. This question would have been the question concerning the essence of the State.
Lassalle, who lived during an era when bonzes did not yet exist in the German workers movement, solved this problem. “The State”, he says, “is the concentration of all real means of power existing in a people.” The concentration of machine guns and the press, the rule over the banks, the rule over the means of production, the concentration of all military and economic organizations, this is the State. And what is decisive for the rule of the State is the question of which class among its entire people possesses the strongest means of power.
The power of the High Command’s generals consisted in their control over the whole ensemble of great masses of arms and men. When this circumstance changed, when the workers and soldiers took all the means of power into their hands, and the other classes amounted to nothing, then all that had to be done was to organize this power and to add to it the rule over the press and the proletarian state would have come into existence. The institutions of this proletarian state developed quite spontaneously among the masses in the days of the revolution. The military organizations were in ruins, the police and the courts, as well as the administrative bureaucracy of the state, were paralyzed. To prevent chaos, and to organize economic relations, the workers and soldiers councils were organized throughout Germany, as if by a natural process, which in the first days of the revolution had concentrated all power into their hands. The union of all the German workers and soldiers councils and their solid foundation in the masses of working people, in the mines, in the factories, in the countryside—this organization was the State. Within the framework of this organization the proletarians who possessed arms would have created a military organization: the Red Army. It did not occur to the proletarians that it was necessary to immediately firmly safeguard their power and to reorganize it. Whenever they thought in terms of organizations, they had in mind the concepts of their old organizations, the social democratic parties and the trade unions, which were born in the class state, and had matured within it, and which had neither the will nor the ability to safeguard proletarian power, to organize the proletariat as a State; not only had these parties and trade unions been integrated into the bourgeois class State, they had also become an essential part of it, and when all the organizations of the bourgeois State trembled when everything collapsed, they did not tremble, they became the backbone of the reborn bourgeois State. This is how the proletariat of Germany was defeated by the German proletarians, who had, by means of their parties, their trade unions, and their leaders, allowed the old German Empire, with its “Reichstag” which had just been tossed into the gutter, to return in the guise of the national assembly. This is how the commanding heights of the party and the trade unions became the commanding heights of this State. And this is how, in the state which had been reconstructed in this manner, the proletarians were disarmed, and the white guards were armed.
That such a misfortune should have befallen the proletariat is due in part to the fact that it was by no means prepared to carry out a revolution. But besides this circumstance there is another one which is very important. The proletariat had been accustomed to view the revolution as essentially a political change, and thought that, once this political change had taken place, the other change would only be a question of time, and that when the old political forms are destroyed, there would be an evolution towards a socialist society, and that the proletarian struggle would no longer be necessary. And, once again, it was the social democratic party and the trade unions which nourished this belief within the proletariat, and which had forgotten, or wanted to forget, to explain to the proletariat that the proletarian revolution is not exhausted in bringing about changes in political forms, but is essentially an economic revolution, a revolution whose task is to basically revolutionize the whole economy. If the political revolution was carried out by means of the uprising in the streets, the same cannot be true of the economic revolution, which cannot be accomplished by means of armed actions, but must take place where the economic process has its roots—in the factories. When it is a matter of providing a country’s economy with a completely new economic foundation, one must go to the roots of the economy, so it is not enough to rectify some random surface phenomena of the existing economy. Its roots are in the factories, that is why the revolutionary economic struggle of the workers begins in the factories themselves. And if the revolutionary struggle of the proletarians begins and ends in the factories, and if the goal of this struggle is to put these factories at the service of the proletariat, then the only way to organize the proletariat for this struggle is on the basis of the factory organization.
The old trade unions were created during an era when the proletariat did not find itself in the midst of an economic revolution. Capitalism was still expanding, attaining higher forms, and Germany was still undergoing industrial-capitalist ascent. In those days, when the trade unions began to unite the proletariat within the entire people, capitalism was still split into factions. Many businesses still competed with one another. At that time it was not a question of destroying the bourgeoisie as a class, because it was still in the process of forming itself as a class. Then, it was only a question of obtaining better wages and working conditions for certain layers of the working class. And at that time, the old trade union form did correspond to the needs of the proletarians. Skilled workers were still predominant in large sectors of the working masses, and there were still small and medium-sized enterprises everywhere, with only occasional large businesses. The trade unions organized the workers by trade, and made the worker’s neighborhood, rather than his factory, the basis of his trade union membership. All the questions of the trade union struggle were handled by trade union officials or at membership meetings, and were by no means decided where the workers find themselves day and night: in the factories.
Even before the war, this form of organization rendered the workers incapable of putting their forces to the test against capitalism in mass strikes. Because the old trade unions had fragmented the masses into groups defined by trade, they did not have the mass strike in their programs. As a result, the great shipyard workers strike of 1913 was defeated, because the workers’ form of organization was not suited to the needs of a mass organization. The old trade unions were organizations of leaders who carried out the bulk of trade union activity; it was the leaders, not the masses, who negotiated. The leaders did not want the masses themselves to carry out actions. For these leaders, the strike was a last resort to be utilized in emergencies, rather than the natural weapon which the strike constitutes in a revolutionary period. In a revolutionary period it is no longer only a matter of improving working conditions, because capitalism is dying, capitalist society can no longer improve working conditions: now it is a question of destroying capitalist society. This can only be done by means of a continuous series of revolutionary mass strikes which, constantly spreading and successively embracing all industries, will shake the economy of the whole country to its very foundations and finally compel the capitalist class to declare bankruptcy. It is bankrupt now, but does it abandon all attempts to stage a recovery, or does it confess its incompetence? No, the capitalist class does no such thing; it cannot do that, that would mean suicide. This will only happen when the proletariat compels the capitalist class to do it. The principle means to achieve this goal is the revolutionary strike.
This strike, which can break out because of simple economic demands, possesses a political dimension because it affects the masses in such a manner as to threaten the existence of the whole economy by spreading to other sectors of the economy. This has been clearly demonstrated by the miners strike. Due to a shortage of coal, railroad operations were curtailed and the transport of commodities was paralyzed. Whether or not the miners were aware of this, the fact that they joined the strike as one great mass itself has had political effects. And this is the second reason why the old trade unions are incapable of leading the struggle of the working class during revolutionary times. The trade unions are prepared for partial economic struggles; the old social democratic party is prepared for political-parliamentary struggles. A struggle which is revolutionary, and simultaneously economic and political, can only be carried out by the masses themselves. This is only possible within organizations which are created for the purpose of conducting such struggles. Where these struggles have broken out, where the workers have plainly seen the incompetence of the old trade unions is where this new form has now become a reality. The miners organized by mines, and among the mines by regions, and all the districts together into a Union which includes all the workers in the industry. Since the miners have discovered this new form, the shipyard workers have now also finally begun to discuss this new form of organization. In the shipyards they, too, are joining workplace organizations, in order to then unite these workplace organizations in a single Union of Shipyard Workers. There is also the Deutscher Seemannsbund (Seaman’s Organization) and an industry-wide organization of the German railroad workers is being debated throughout the country. The German railroad workers have only just recently been pushed into the free trade unions, and they have already begun to create a new revolutionary trade union based on workplace organizations. In Halle as in Berlin and Hamburg, they have independently elaborated the organizational forms which they intend to combine into a unitary organization, based on workplace organizations. These preparatory labors are quite advanced, and if not this lost strike, then the next defeat will compel the railroad workers to turn their backs on the old trade union, and to find an organizational form which makes it possible for them to develop freely within the struggle without the restraints imposed by the trade union’s centralized bureaucracy, which is so intimately intertwined with the state, and which in fact defends the interests of German state power. There is also a Bargemen’s Union in Upper Silesia, and I have been informed that efforts are now taking place in Hamburg to unite the barge and river transport workers into a unitary organization.
There is still a great deal of hesitation; many workers still feel a certain fondness for their trade unions due to old habits. But revolutionary times demand revolutionary decisions, and whoever makes sentimentality the basis of their activity can win three political revolutions but then lose them because of the lack of an economic organization, just as the German proletariat has come to lose almost everything it gained after the first German revolution. The German proletariat, which is ready to conquer state power so as to organize a socialist economy, cannot do so unless it has first organized itself for this economy. If socialism is to be more than merely a bureaucratic scheme in which, instead of local employers, a centralized bureaucracy directs the economic process, and rules the working masses, as is now being attempted, then the proletariat must organize against the centralized bureaucracy in order to become a pillar of the productive process. This is the difference, and this is why the trade unions hate the factory organizations.
A trust, which is a kind of North American corporate entity, can dissolve itself today, and reorganize itself in a new form tomorrow. This is a completely natural process for it when it encounters obstacles which impede its operations. The trade unions, however, cannot dissolve themselves after a revolution in order to reorganize on a new basis. They have to preserve their old centralization, their old bureaucracy, and do so in order to organize the white guards to make factory organizations impossible even before they arise. This is how things stand now. Today, when the workers are well enough organized to begin the process of transformation, where they have a sensible leadership, the trade union bureaucracy joins the white guards to fight against those who want to form revolutionary trade unions. If a trade union were to be dissolved, and the next day, the workers were to begin signing up for the new form of organization, what would such an event signify? It would signify that the masses would have an organizational form in which they could freely develop all of their forces. For the leaders of the trade unions, however, it would mean they would no longer be needed, and this is why the bureaucracy will not agree to such a thing, and are merciless with the factory organizations.
As everyone knows, we have the enterprise councils, which will be institutionalized in the recently-created bourgeois class State. This State will give the councils a few rights, and more duties. Their principle duty will consist of endeavoring, together with the employers, to increase each enterprise’s productivity. This cannot be the task of the revolutionary factory councils. As long as the class State exists, the proletariat is at war, and the factory councils must be organs of the revolutionary struggle. They must unilaterally defend the interests of the workers, even if this means that the enterprise goes bankrupt ten times, since, in this economic order, it is not interested in assuring profitability. The proletariat today has no interest at all in the recovery of the capitalist economy, but in its collapse. Each step towards recovery is a step backwards for the proletariat. Each increase in the profitability of any enterprise only fixes the chain more firmly which has once again bound the hands of the proletariat after the political revolution. But if the factory councils are not to be institutions dedicated to preserving capitalist exploitation, but rather institutions of the struggle of the revolutionary proletariat, then they must not be controlled by the counterrevolutionary trade unions, which are institutions of the class State, but, instead, by the workers in the factories. The workers should not consent to any interference whatsoever in the running of these enterprise councils, especially by the trade unions. For this reason, as well, the proletariat needs factory organizations. Only if all the proletarians in an enterprise are united in a factory organization would they be capable of controlling everything that happens in the workplace. As long as this organizational form does not exist, the proletarians will be dispersed. Therefore, if you want to put an end to this dispersion into trade unions and parties, this can only be achieved if a new form of unity is created, a form of unity in which all the workers, whatever their trade, or their party, can together coordinate the affairs of the enterprise. This would only be possible in a factory organization. If the workers in a factory have to work together, regardless of which political tendencies they endorse, they could also carry out negotiations with each other and manage their own affairs within the factory.
The only condition for membership which the factory organization will have to establish, besides getting out of the trade unions, is that each member must defend the principle of the proletarian class struggle, and that he share the conviction that there can be no peace between the employers and the proletarians as long as the class State exists. A declaration to that effect is completely sufficient. This will keep out all those elements which used to be called “yellow”, and unite all the revolutionary workers, even if their political positions diverge on some points (which is of no account for activity within the factory), in a unitary struggle against the employer, and against the employers as a class.
It is not by chance that it is just now, in Germany, where the political revolution has given way to the economic revolution, that this form of organization is beginning to prevail. In other countries, where police powers are more limited, and where capitalist democracy, such as we now have in Germany, already existed, the workers have long been organized in accordance with these perspectives. In North America, the “Industrial Workers of the World” discovered this form of organization many years ago, and has been applying methods which seem new to us here in Germany. Just as the “Industrial Workers of the World” began to win the masses over to its principles at the moment that it became clear that social contradictions had become so exacerbated that there could no longer be any concessions in the struggle against the trusts, and that the capitalist economy had to be destroyed, so here in Germany, the idea of the “Allgemeine Arbeiterunion” (General Workers Union) began to spread at the moment when the proletarians of Germany understood that being revolutionary involves more than just making or listening to revolutionary speeches, that revolutionary ideas must be transformed into revolutionary action, and that without revolutionary action the economic revolution cannot be completed even if the economic conditions are ripe for such a transformation. Today this implies that the proletarians must be convinced that they have to break with the old trade union forms, which did good work in the past, but which today comprise a counterrevolutionary element, and that it is of the utmost importance to concentrate all their forces in revolutionary organizations which can engage in the revolutionary struggle, and which will later be capable of taking control of industry. Who should control industry? Should it be the trade union offices, or do the workers want to control it themselves? If the workers want to control industry, they have to create an organizational form capable of making them masters of production. This form is the council regime, and the basic unit of the council regime is the factory council: but the factory council can play this role only if it is rooted in the factory organization. If not, it would be a falsification of the idea of the council. It would not, in such a case, be an instrument of the revolutionary struggle, but a deceit to confuse the proletarians about what methods to choose for that struggle.
Whoever has a firm determination to assure that power remains in the hands of the proletariat, must also be sure of the road to follow. Whoever wants the political struggle to end in the dictatorship of the proletariat, and the economic struggle to result in the transfer of production into the hands of the proletariat, can only have one slogan:
Get out of the trade unions,
Create factory organizations!
 This is certainly not a quote from any of Lassalle’s writings. Lassalle often dilated on the purpose of the state. To the “night-watchman idea” of the state, which, according to Lassalle, the bourgeois maintains, Lassalle opposes the “idea of the state of the workers as a whole” (to be realized by universal suffrage), which would be identical to the idea of the state. Lassalle meant all those who have a part in productive activity, be it manual, administrative, scientific, educational, etc. The state would then be the “unity of all individuals in an ethical whole, a unity which will multiply the individuals’ forces a million-fold. Its purpose will be the education and development of the human species towards freedom”. Ferdinand Lassalle, Gesammelte Reden und Schriften, edited and with an introduction by Eduard Bernstein, Vol. II, Berlin, 1919, p. 195 et seq., and pp. 240-241. The quotations are from the following works: 1) Arbeiterprogramm Uber den besonderen Zusammenhang der gegenwärtigen Geschichtsepoche mit der Idee des Arbieterstandes (speech before a Berlin artisans’ society in 1862); 2) Die Wissenschaft und die Arbeiter. A speech in his own defense before the Berlin Criminal Court, against the accusation of having publicly incited the non-possessing classes to hatred and contempt for the possessing classes. (That is, in the “Workers Program”. The trial took place in 1863.)
 As a result of the legalization of freedom of association for certain categories of workers (the railroad workers, for example), there were no longer any obstacles standing in the way of joining a trade union for those workers affected by the new law. Note that the “free trade unions” are the social democratic trade unions.
 In 1919/1920, the expression “revolutionary trade unions” was also used by other left communists, who would later—at least after their break with the “Red Trade Union International”—consider it a contradiction in terms.
 Betriebsräte, the councils which sought to be simple reformist bodies and sought state recognition.
 On the Industrial Workers of the World and Wolffheim’s relations with this “revolutionary trade union”, see Chapter 9 of this volume.