Main NI Index | Main Newspaper Index

Encyclopedia of Trotskyism | Marxists’ Internet Archive

The New International, September 1944

Joseph Leonard

History Without Classes – II

William’s Interpretation and Marxism


From The New International, Vol. X No. 9, September 1944, pp. 301–304.
Transcribed & marked up by Einde O’Callaghan for ETOL.


[Continued from a previous issue]

William insists that Marxists, to be consistent with their principles, must oppose everything which aids the capitalist class, because the strengthening and developing of capitalism, as of any advance in society, increases the rate of exploitation (per cent of surplus value extracted). As a class, therefore, says William, the workers suffer from anything which aids capitalism. Jauntily formulated this idea says: “The better things get for the capitalists, the worse things get for the working class.” William attributes this syndicalist monstrosity to the Marxists. Instead of drawing class struggle conclusions (even syndicalist ones), however, William reasons: “The more capitalism develops, the more value there is, hence all consumers benefit, even though the capitalists hog more than their share.”

Here again the worker in the shop is contrasted to the same worker as he sits down to supper at home. Also repeated is the failure to distinguish periods of development in capitalism. In the “Luddite period” William’s reasoning found some substantiation in fact, but today, capitalism is characterized by a falling rate of profit; it is this sharpening crisis for the capitalists which causes them to depress the living standards of the workers. Generally speaking, William is correct in saying that a rising rate of exploitation meant a rising standard of living. But today the fact is that the rate (per cent) of exploitation is diminishing, and with it the workers’ standard of living.

The falling rate of profit is an expression of the limitations of the capitalist market, just as are the fetters on production mentioned above (in the section Historical Forces and Historical Events). The falling standard of living is perhaps not obvious at first glance, but huge masses of unemployed men or unproductive soldiers, the inability of the farmers to continue without government financial aid, the proletarianization (and pauperization) of the middle class, the constantly more difficult problem of forcing real wages up, the ever-tightening control on “inflated” prices by monopolists – these are clear indications that, while the living standards of large groups of workers (particularly in the well organized industries) are still relatively untouched, the Marxist “dogma” is being fulfilled in real life.

Social Exploitation and Class Exploitation

In his chapter Expropriating the Expropriators, William writes:

... Wealth production is a social process ... the total national income is the product of the combined efforts of every useful member of the national family. (Page 121)

But the social means of wealth ownership is not owned by the nation. The ownership is vested in a small group. This group of private owners withhold from society a large proportion of the socially created products. In other words, they enjoy the benefits of social surplus value. (Page 121)

What is the difference between social surplus value and the Marxist variety? William reasons: “All useful people (even the inefficient merchants) create value.” He means, therefore, “social value,” and not “social surplus value.” Surplus value, as Marx defined it, is the value of commodities produced by the worker minus the wages the worker receives from the capitalist. It is, therefore, a strictly class term, and has no meaning except at the “point of production.” It is wealth that society will expropriate from the expropriators. The capitalists extract wealth in a particular way. Wealth extracted in that way we call surplus value. It differs from other wealth only in the manner in which it is extracted.

William’s “social surplus value” is intended to mean the difference between the benefits the capitalists get and the value these powerful men create. To William, “benefits” equal “value” equal “social surplus value” equal “social wealth” equal “the products of labor” equal “socially necessary (efficient) labor time expended.” The capitalists get “benefits” as consumers, but it is only because they own the means of production that they are able to get them. Again, it is William who makes an artificial separation of consumption and production.

William asserts that (1) the capitalists obtain a disproportionate per cent of the commodities and services, (2) commodities and services are “socially created products,” and (3) the “powerful” capitalists play an essential, but unique, role in the progressive development of society. (This development is, first, to eliminate the inefficient merchants, then later, to extend “social” control to all branches of economic life now controlled by private profit-seekers.)

Let us examine the last two propositions more closely. Marx and William agree that the equitable distribution of “socially-created products” means “a social struggle against a class, the profit-making class”. (pages 121–122) Marxists interpret this to mean: “the struggle of the working class and its middle-class allies [the “useful” and what is left of the “inefficient”] against the profit-making class [the “powerful”].” William means: “the struggle of all non-owning and nonprofit-making classes against the expropriators of social and/or surplus value. These expropriators are the owners of the means of production, the capitalists, the profit-making class, the bankers (discussed previously), and – the powerful!” The class struggle has crept in again.

Why does William regard the “powerful” as an essential part of the progressive alliance against the “inefficient,” and then later reveal that social progress means the expropriation of these same “powerful”? As he himself says (page 121): “If the extraction of surplus value is the basis for the modern class struggle, it becomes obvious that the class struggle must be waged against any and all who profit through surplus value.” Good. But then why doesn’t William believe in the class struggle? The real reason is this: William believes that the road of progressive development lies through the “full development” of capitalism. [1] Capitalism will get more and more efficient. The middle classes will be eliminated. The rate of exploitation (rate of profit) will get greater and greater. And thus, gradually, we will get – “socialism”! (where there is no surplus value extracted!). Now we can see why William must insist on the fact of a rising rate of profit. Now we can see why he talks of “social surplus values.” He sees the absurdity of a development that shows surplus value getting greater and greater and thus becoming – zero. So he says all that is involved is a transfer of surplus value from the capitalists to society as a whole.

Who is this “society as a whole”? All the classes who are not profit-makers! What is the “social struggle”? The class struggle of these non-profit-making classes! What are they struggling for? For their fair share of the wealth they have created, that is, for their class interests! But wouldn’t they get their fair share as wealth to be consumed? Of course, but that only means that a class that is organized “at the point of production” struggles for its class interests which it receives as commodities to be consumed. Doesn’t that mean that it is really a consumers’ struggle? No, because (a) the “useful” see their consumers’ interests, not in the same way that the capitalists see their own “powerful” consumers’ interests, but in a way conditioned by the “useful” relationship to the means of production, and (b) the struggle in its ultimate form is the struggle for, not merely the consumable results of production, but the means of production themselves.

On pages 89–90 William reaches his conclusions by garbling Capital in another way:

Marx pointed out very clearly that the capitalist does not sell commodities at their value, but at their price of production plus the average profit rate.

... Marx made is very deal that there is but one scientific way of gauging capitalist exploitation and that is by ascertaining the proportion that capitalist exploitation bears to the value of the total production of society and not to the value of the product of an individual laborer or group of laborers. The capitalist class exploits society as a whole; it appropriates social surplus value.

... Instead, therefore, of witnessing a class struggle, what in reality is taking place is a social struggle – the struggle of society against a class, the profit-making class.

Capital says specifically, in many different places and in many different ways, that commodities, by and large, are sold by the capitalist at their true value, their entire value. The capitalist (and the middle class after him) thinks he is simply adding the average rate of profit to the price of production; actually his profit derives from paying his employees less than the value of the commodities they produce for him. Profit does not originate in the sale of commodities, but in the workers’ exchange with the employer of the newly produced commodities in return for their wages. William conceals the source of surplus value in order to counterpose the exploitation of the working class as a whole to the exploitation of individual workers. William is really counterposing relative exploitation (the proportion of total commodities that the proletariat receives) to absolute exploitation (the standard of living of the proletariat). In real life, these two phenomena are not “counter” but exist side by side. Today, the capitalists are the “useless of the present” and the “remnant of the past.”

The Managers and the Capitalists

Aren’t the “powerful” capitalists also “useful”? William as a “socialist” cannot say that because he sees that social ownership and control are more “useful,” that is, more efficient. That is why he separates the “powerful” from the “useful.” But there is a deeper significance to the confusion of the role of the “powerful” than what it reveals of the clarity of William’s thinking.

The uncertainty as to whether the capitalists, as the managers, are a force tending to aid social development, or whether they are, as extractors of surplus value, an anti-social group, reflects the position of the middle class in society. The middle class sees the capitalists as managers because it does not work in the factories where employment, accounting; payment of wages, engineering and design, supervising, determination of wage rates, estimation of costs, computation of prices, production planning and scheduling – each managerial function – is done by departments of employees. The middle class sees the capitalists as expropriators of surplus value (although most of them are not familiar with the Marxian concept) because its farms and small businesses must compete for surplus value against the huge trucking and marketing concerns, against big business monopoly competition (both in selling to the consumer and in buying from the manufacturer), against big business banks (interest on mortgages and loans), and because the middle class must pay monopoly prices as a consumer.

Trade Unions and the Marxists

Marxists regard the organized labor movement as a banner-bearer of social progress. Most liberals aren’t quite sure what the unions can be trusted to do. William’s theory gives an answer. He begins (page 131):

It is doubtful if Shakespeare’s genius ever conceived of a more heart-rending tragedy of unrequited love than is to be found in the socialists’ relation to the labor movement.

But from this interesting start he quickly drops down to:

The “Marxians” insisted that he (the worker – J.L.) take his trade union principles into politics, that he use his political power to serve his interests as a producer. The trade unionist refused to use his social power for anti-social purposes ... (Pages 193–134)

William fancies he sees a contradiction between the economic struggle in the factories against the factory-owners, and the political struggle against those who represent the interests of the factory-owners. In this, William shares with most liberals a complete ignorance of the class character of the modern state. Lenin knew what he was doing when he directed State and Revolution against the social-democrats. The middle-class liberal forever looks to “his” Government (with a capital G) for a redress of his grievances – and is forever betrayed by the “venal forces” of “special interest,” i.e., labor and big business. He even looks (as indicated previously) for the government to expropriate the bankers!

But aren’t the unions themselves “anti-social” because they fight for narrow, class interests? William draws this conclusion (page 151) but says “their anti-social character” should be confined “to its proper sphere.” But what is the “proper sphere” for organizations which separate “themselves from the rest of society”? If unions are anti-social because they fight for the interests of their members, then what is there about unions that is not anti-social, that justifies their existence? William unconsciously dodges this question; the passage does not appear in the chapter on the labor movement, but in the chapter on cooperatives which have, as he points out, some “social characteristics” (i.e., from the point of view of the middle class). Hitler, who put William’s program of efficiency into practice, drew the implication: he abolished the unions.

Cooperatives and Monopolies

William does not like producer cooperatives. Shops organized on a cooperative basis

will have to compete with each other for a market for their product just as the capitalists do today. To prevent the inevitable ruination that must follow unbridled competition they will have to resort to combination just as the capitalists do today ... The community would be helpless and entirely at the mercy of these shops. They would be in a position to oppress society just as the capitalists do today. (Page 142)

One glimpses in this passage the fear of the middle classes of the dictatorship of the proletariat, even more than their fear of the dictatorship of the bourgeoisie. Just why cooperatively run factories must ruin each other, and form monopolies, William cannot explain. William cannot see that just as dictatorship of the bourgeoisie under which we live has led society a certain distance toward the classless commonwealth, «o the hegemony of the proletariat, too, can bring a classless Commonwealth (communism) closer.

What about consumer cooperatives?

We have seen that social evolution has forced the state to attack the capitalist system from four different “fronts” (1) social and industrial reform; (2) the elimination of the capitalist principle from transportation and communication; (3) direct taxation, and (4) distribution. The consumer cooperative has thus far been compelled to limit its activities to tactically one field – distribution. (Pages 149–50)

The conclusion should be obvious: coops should embrace all economic functions; there should be producer coops. William describes (a) that coops suffer an insurmountable disadvantage in their competition with big business because of extremely limited capital resources, and (b) the coops can never get very far unless they change their provincial a-political attitude: “They disdained to make use of the power of the state.” (page 151) Marxists conclude from these observations that capitalism cannot be successfully fought by rival economic organizations, but only by class struggle taking political forms. William concludes that “socialists” should become a political consumer movement. In other words, cooperatives are okay only if they are dominated by the middle class.

... Society ... is still robbed of surplus value, the only change being in the number of the robbers. This is very clearly brought out by the fact that non-members must pay full value at the consumer cooperative stores and obtain no-dividends. The members furnished the merchants’ capital instead of the merchant and participate in the merchants’ profit instead of the merchant. (Page 149)

Why doesn’t the non-member join? William was interested in the “vast majority” when it was a question of the capitalists being expropriated. Now he is concerned with the interests of the class to which he belongs, with the restaurant owners who must compete with the (more efficient) coops.

A Scientific Theory Is Judged by Its Predictions

... All signs point strongly to Germany as the first social democracy. More than that. Not only is Germany likely to be the first country to develop democratic socialism, but it will profoundly stimulate the development of democratic socialism in other countries. (Page 188)

This was written in 1919. William’s prediction came true. In Germany, the social-democrats controlled the Weimar Republic. In Austria, the social-democrats became the leaders of the government. In England, there was a labor government. William and his “socialists” had their day upon the stage. There was not much that was democratic in their regimes, and still less that was social. They entered to the sounds of Spartacists being murdered and they left to the sounds of fascists shooting down workers in Berlin, or in the Karl Marx apartments in Vienna.

The eyes of the German people are firmly fixed on their pre-war standard of national existence. They will leave nothing undone in an effort to regain it ... This means ... intensive work. It means efficient work. Germany will organize and systematize ... She will prevent useless duplication. She will reduce non-productive labor to a minimum ... The new Germany will become the most efficient nation in the world. There is no escape ... And it will be done. (Page 189)

The German nation will nurture its human resources as it has never been done before. Social and labor legislation will set a new standard. (Page 189)

... Production is still in private hands ... The government [will undertake the] regulation of production. The government will dictate what should be produced and how to produce it. (Page 190)

It was done. It was not the spineless social-democrats who did it, for the most part (although they tried), but it was done. William has found the groups which represent social progress at last.

“From this stage to complete social ownership is but a step.” (page 190) The step was never taken. But Stalin’s Russia has complete “social” ownership- William has many harsh things to say about the “anti-social” acts of Lenin and Trotsky. What about Stalin’s “socialism”?


It is a hallmark of middle-class politics to confuse “progress” and “evolution”; that which is good, with that which is caused. William is much more “economics-conscious” than the average liberal, but he also confuses ethical questions with historical questions. We commonly say that a thing which is bad is “anti-social”; William refers to the Russian Revolution as anti-social in the ethical sense primarily. Imperialist wars, on the other hand, are “a force in social evolution” because they stimulate production. [2] “Social patriotism means loyalty to society ...” (page 188)

Trotsky, in Their Morals and Ours, says that is progressive which “leads to increasing the power of man over nature and to abolition of the power of man over man.” Trotsky, Dewey and William would agree that one of the most important means of achieving progress is by raising the standard of living of the masses (yes, as consumers). William stops short at the first half of Trotsky’s definition. But Stalinist Russia and Nazi Germany demonstrate that half the difference between tyrannical totalitarianism and socialist collectivism is the struggle for the “abolition of the power of man over man.” Most liberals sense this more than William does. They argue, it seems congenitally, whether the end justifies the means (here is where Dewey is a better representative of middle-class political thinking than William) as a substitute for political analysis. They explain their political opportunism, habitually, by discourses on the “lesser evil.”

The liberal enters the field of political action armed only with a bible of his own writing, and not very carefully written at that. He naively assumes that his personal integrity and sense of decency, plus the respect he has for scientists and science, will carry him through any political difficulties he may encounter. History records otherwise.

The middle class believes in unity. They are forever lamenting that socialists, “and others who could do so much good,” are forever splitting into small groups, dividing their forces instead of all uniting. William believes in unity like the rest. But, unlike them, he has found the basis on which such unity is feasible: we are all consumers.

William’s theory provides a theoretical economic basis for middle-class politics. (That he also helps to reveal the connection between the economics and the politics of anarcho-syndicalists cannot surprise Marxists who have encountered these “ultra-leftists in theory and reformists in practice.”) William garbles economics, and he garbles history, but not haphazardly; the strange tree bears real fruit: the reformist (“gradualist”) politics of the social-democrats which asserts (a) that capitalism must be replaced by socialism, but (b) it is not by the class struggle but only as consumers preserving national unity (and capitalism) that we can achieve socialism. William’s doctrine provides a way of avoiding revolutionary struggle and placing one’s faith, and hope, and charitable aid, in reforms. William demonstrates, and all liberals can agree, why it is “scientific” to believe in “evolutionary socialism” as against “revolutionary socialism” with its attendant discomforts.

We have seen how William has violated facts (e.g., the rising rate of profit); misrepresented the doctrines he is attacking (e.g., class struggle excludes consumer interests); and misunderstood history, precisely because he does not interpret it, (e.g., the middle classes are doomed because of social evolution). “The quest for a solution to the problem of existence” is not a substitute for the class struggle, but a generalized expression of it. Society tends to advance technologically and organizationally, but it is classes who lead and oppose the advancement. Extracted of class content, collectivization means nothing. In a collectivized society, the state is everything. If the state is withering away, that is one thing. But if the state is the instrument of a minority group, an oligarchy, all the efficiency of production and organization will serve ghastly plans. Society is torn by a struggle which can end in only two ways: (1) the destruction of civilized society as a sequel to fascism, or (2) the classless society as a sequel to the dictatorship of the proletariat. The vehicle of progress in contemporary society is the class struggle, culminating in the revolutionary overthrow of the capitalists by the only other force capable of leading the struggle and organizing society. The proletariat may lack a little of the solidity of the capitalists, but it has a stronger economic position and vastly greater numbers.

William’s theory is “state-ism”: the advocacy of organization without qualification as to direction and purpose; the advocacy of machines without reference to how they shall be used; the advocacy of power without understanding that it is not a “scalar quantity” but a “social vector”; advocating to produce without realizing that it is a transitive verb and implies an object. The social interpretation of history, as William presents it, is history without classes, and hence without interpretation. It is easier for the middle class to overthrow the exploiting class by recognizing its “harmony of interests” with the proletariat (which is both “useful” and “powerful”) than it is to overthrow the theory of the class struggle.


1. Scott Nearing expressed a similar idea (1941) when he said that between plutocratic, inefficient England and systematically planned Nazi Germany, he supported the latter. When you are blind to the class struggle, it is easy to confuse the FORM of economic centralization for the CONTENT, i.e., strengthening of the reactionary forces (and usually fewer commodities for the consumer). “The more powerful the monopoly,” thinks the sectarian, “the nearer we are to socialism.”

2. It should be pointed out, in justice to the consumers’ theory of history, that this theory of want (which destroy “useful” workers and factories and stimulate only bullets and bombs) is not necessarily implied. Most liberals either resort to a “national characteristics” theory of some kind, or else identify the war with the struggle of democracy versus tyranny.

Top of page

Main NI Index | Main Newspaper Index

Encyclopedia of Trotskyism | Marxists’ Internet Archive

Last updated on 16 December 2015