Eduard Bernstein

Evolutionary Socialism

Chapter III
The Tasks and Possibilities of Social Democracy


(a) The political and economic preliminary conditions of socialism

If we asked a number of men belonging to any class or party to give in a concise formula a definition of socialism, most of them would be somewhat confused. He who does not repeat at random some phrase he has heard must first make clear to himself whether he has to characterise a state, a movement, a perception, or an aim. If we consult the literature of socialism itself, we shall come across very various explanations of its concept according as they fall into one or other of the categories designated above from the derivation of the concept from juridical notions (equality, justice) or its summary characterisation as social science, up to its identification with the class struggle of the workers in modern society and the explanation that socialism means co-operative economics. In some cases conceptions founded on entirely different principles are the grounds for this variety of explanations; but they are mostly only the results of observing or representing one and the same thing from different points of view.

The most exact characterisation of socialism will in any case be that which starts from the concept of association because by it an economical as well as – in the widest sense of the word – a juridical relation is expressed at the same time. It needs no long-winded deduction to show that the indication of the juridical nature of socialism is just as important as that of its economic nature. Quite apart from the question whether or in what sense law is a primary or secondary factor in the life of a community, the nature of its law undoubtedly in each case gives the most concentrated idea of its character. We characterise forms of communities, not according to their technological or economic foundations, but according to the fundamental principle of their legal institutions. We speak, indeed, of an age of stone, bronze, machinery, electricity, etc., but of a feudal, capitalistic, bourgeois, etc., order of society. To this would correspond the definition of socialism as a movement towards – or the state of – an order of society based on the principle of association. In this sense, which also corresponds with the etymology of the word (socius – a partner), the word is used in what follows.

Now what are the preliminary conditions of the realisation of socialism? Historical materialism sees them first in the modern development of production. With the spread of the capitalistic large enterprises in industry and agriculture there is assumed to be a lasting and steadily increasing material cause for the impetus to a socialistic transformation of society. In these undertakings production is already socially organised, only the management is individualistic and the profit is appropriated by individuals, not on the ground of their labour, but of their share of capital. The active worker is separated from the possession of his instruments of production, he is in the dependent condition of a wage-earner, from which he does not escape as long as he lives, and the pressure of it is rendered sharper by the uncertainty which is joined with this dependence both on the employer and on the fluctuations in the state of trade. Like production itself, the conditions of existence for the producers press towards the socialisation and the co-operative organisation of production and exchange. As soon as this development is sufficiently advanced the realisation of socialism becomes an imperative necessity for the further development of the community. To carry it out is the task of the proletariat organised as a class party which for this purpose must take possession of the political government.

According to that, we have as the first condition of the general realisation of socialism a definite degree of capitalist development, and as the second the exercise of political sovereignty by the class party of the workers, i.e., social democracy. The dictatorship of the proletariat is, according to Marx, the form of the exercise of this power in the transition period.

As regards the first condition, it has already been shown in the section on the “Classes of Establishments in Production and Distribution” that if the large undertaking in industry predominates to-day, yet it, including the businesses dependent on it, even in such an advanced country as Prussia, represents at the most only half the population engaged in production. The picture is not different if we take the statistics for the whole of Germany, and it is very little different in England, the most industrial country of Europe. In other foreign lands, perhaps with the exception of Belgium, the relation of the large enterprise to the small and medium business is still more unfavourable. But in agriculture we see everywhere the small and medium holding, as compared with the large one, not only greatly predominating, but also strengthening its position. In commerce and distribution the relation of the groups of undertakings is similar.

That the picture which the summarised figures of trade statistics give receives many corrections on a more recent examination of separate divisions, I have myself shown in my article on the Catastrophic Theory, after I had already expressly referred, in an earlier article of the series, Problems of Socialism, to the fact that the number of employees in an undertaking was no safe indication as to the degree of its capitalist nature. [1]

But this is of no particularly great consequence for us at present. Whether of the hundreds of thousands of small undertakings, a good number are of capitalistic character and others are wholly or partly dependent on large capitalist undertakings, this can alter very little the total result which the statistics of undertakings offer. The great and growing variety of undertakings, the graduated character of the structure of industrial enterprises, is not thereby disproved. If we strike out of the list a quarter or even a half of all small establishments as dependencies of medium and large enterprises, there remain in Germany almost a million undertakings from capitalist giant enterprises, downward in ever broadening classes to the hundred thousands of small enterprises worked in handicraft fashion, which may, indeed, pay tribute by-and-by to the process of concentration, but on that account show no indication of disappearing from the scene.

It follows that as far as centralised enterprise forms a preliminary condition for the socialisation of production and distribution, this is only a partial condition in even the most advanced countries of Europe, so that if in Germany in the near future the state wished to expropriate all undertakings, say of twenty persons and upwards, be it for state management altogether or for partly managing and partly leasing them, there would still remain in commerce and industry hundreds of thousands of undertakings with over four millions of workers which would be excluded and be carried on under private management. In agriculture there would remain, if all holdings of over 20 hectares were nationalised – of which no one dreams – several millions of holdings under private management with a total of 9,000,000 workers. One can form an idea of the magnitude of the task which would be borne by the state, or the states, by taking over even the larger undertakings. It would be a question, in industry and commerce together, of about a hundred thousand businesses with five to six million employees, and in agriculture of over 300,000 holdings with over five million workers. What abundance of judgment, practical knowledge, talent for administration, must a government or a national assembly have at its disposal to be even equal to the supreme management or managing control of such a gigantic organism!

But let us leave this question on one side for a time, and let us keep first of all firmly to the fact that the material preliminary condition for the socialisation of production and distribution – advanced centralisation of enterprises – is at present only partly achieved.

The second preliminary condition, according to the theory of Marx, is the conquest of the political power by the proletariat. One can think of this conquest in various ways: by the path of parliamentary struggle, turning the right to vote to good account, or by the path of force by means of a revolution. [2]

It is known that Marx and Engels, until pretty recently, considered the latter as nearly everywhere absolutely inevitable, and it seems unavoidable to various adherents of the Marxist doctrine to-day. Often it is also considered the shorter way. [3]

To this, people are led before all else by the idea that the working class is the most numerous and also the most energetic class of the community. Once in possession of power, it would not rest until it had substituted for the foundations of the present system such arrangements as would make its restoration impossible.

It has already been mentioned that Marx and Engels, in the establishment of their the epoch of theory of the dictatorship of the proletariat, had before their eyes as a typical example terror of the French Revolution. Even in Anti-Dühring Engels declares that St. Simon in 1792, by regarding the reign of terror as the reign of the masses without means, made a discovery worthy of a genius. That is probably an over-estimation, but however highly one may esteem the discovery, the result of the rule of the men without property does not thrive much better with St. Simon than with Schiller, decried to-day as “a philistine”. The men without property in 1793 were only capable of fighting the battles of others. They could only “govern” as long as the terror lasted. When itself, as it was bound to do, it had exhausted their government was quite at an end. According to the Marx-Engels point of view, this danger would not exist with the modern proletariat. But what is the modern proletariat?

If one counts in it all persons without property, all those who have no income from property or from a privileged position, then they certainly form the absolute majority of the population of advanced countries. But this “proletariat” would be a mixture of extraordinarily different elements, of classes which have more differences among themselves than had the “people” of 1789, who certainly as long as the present conditions of property are maintained have more common – or, at least, similar – interests than contrary ones; but the different nature of their needs and interests would quickly become known to them as soon as the propertied and governing classes are removed from, or deprived of, their position.

On an earlier occasion I made the remark that the modern wage-earners are not of the homogeneous mass, devoid in an equal degree of property, family, etc., as the Communist Manifesto foresees; that it is just in the most advanced of the manufacturing industries that a whole hierarchy of differentiated workmen are to be found between whose groups only a moderate feeling of solidarity exists. In this remark, a well-known socialist writer, H. Cunow, sees a confirmation of the fact that even when I was speaking ,generally I had in my mind specially English conditions. In Germany and the other continental civilised lands he says no such separation from the revolutionary movement of the workmen in better positions is to be found as in England. In contrast to England the best-paid workmen stand at the head of the class war. The English caste feeling, he adds, is not a consequence of the social differentiation of to-day but an after-effect of the earlier system of guilds and companies and the older trade union movement based on them.

Again I must reply that what my opponent tells me is in no way new to me. If a certain guild-like feature is to be found in the English working-class movement, it is far less a heritage from the old guild system, which, indeed, existed much longer in Germany than in England, than one of the chief products of Anglo-Saxon freedom – of the fact that the English workman never, not even at the time of the suppression of the right of association, stood under the scourge of a state ruled by police. The sense of individuality is developed in freedom, or, to speak for once with Stirner, the sense of own. It does not exclude the recognition of what is of a different nature and of general interest, but it easily becomes the cause of a little angularity which even appears as hard and narrow-minded when it is only one-sided in form. I do not want to wrong the German workmen, and I know how fully to honour the idealism which, for example, moved the Hamburg workmen for decades to sacrifices for the common cause of the proletarian struggle for freedom which have not their equal in the working-class movement; but so far as I have opportunity of knowing and following the German working-class movement, the reactions of the trade differentiation described have asserted themselves. Special circumstances, such as the preponderance of the political movement, the long artificial suppression of trade unions, and the fact that on the whole the differences in rates of wages and hours of labour are generally less in Germany than in England, prevent their manifesting themselves in a peculiarly striking manner. But any one who follows attentively the organs of the German trade union movement will come across enough facts to confirm what I have said.

The trade unions do not create that phenomenon, they only bring it into prominence as an unavoidable result of actual differences. It cannot be otherwise than that vital differences in manner of work and amount of income finally produce different conduct and demands of life. The highly-skilled fine instrument-maker and the collier, the skilled house decorator and the porter, the sculptor or modeller and the stoker, lead, as a rule, a very different kind of life and have very different kinds of wants. Where the struggles for their standards of life lead to no collision between them, the fact that they are all wage-earners may efface these differences from their ideas, and the consciousness that they are carrying on the same kind of struggle against capital may produce a lively, mutual sympathy. Such sympathy is not wanting in England; the most aristocratic of aristocratic trade unionists have often enough shown it to workmen in worse conditions, as many of them are very good democrats in politics, if they are not socialists. [4] But there is a great difference between such political or social political sympathy and economic solidarity which a stronger political and economic pressure may neutralise, but which, according as this pressure diminishes, will make itself finally noticeable in one way or another. It is a great mistake to assume that England makes an exception here on principle. The same phenomenon is shown in France in another form. Similarly in Switzerland, the United States, and, as I have said, to a certain degree in Germany also.

But even if we assume that this differentiation does not exist in the industrial working classes or that it exercises no effect on the mode of thinking of the workmen concerned, yet the industrial workers are everywhere the minority of the population. In Germany, together with industrial home-workers, some 7,000,000 out of 19,000,000 people earning incomes are industrial wage-earners. We have besides the technical civil service, the shop employees, the agricultural labourers.

Here the differentiation is everywhere more marked, of which no clearer evidence is given than the painful history of the movements towards the organisation of these classes of labour in industrial unions like trade unions. [5] It is quite impossible to say that the five or six millions employed in agriculture (which the German trade statistics register after deducting the higher staff of assistants, stewards, etc.) will strive to better themselves with the same force as the industrial workers.

Only with quite a small number can one propose or expect serious inclination for, and understanding of, endeavours which go beyond the mere amelioration of conditions of labour. To by far the greatest number of them the socialisation of agricultural production cannot be much more than empty words. Their ideal is in the meantime to get their own land.

Meanwhile, the desire of the industrial working classes for socialistic production is for the most part more a matter of assumption than of certainty. From the growth of the number of socialist votes in public elections one can certainly deduce a steady increase of adherents of socialistic strivings, but no one would maintain that all votes given to socialists come from socialists. Even if we assumed that all these voters would greet with joy a revolution which brought the socialists to the helm, little would even then be done towards the solution of the main problem.

I think I can take it as being generally admitted that there would be no question of an immediate taking over by the state of the total manufacture and distribution of products. The state could not even take over the whole amount of medium and large enterprises. The local authorities, too, as connecting links, could not do so very much. They could socialise at most those businesses which produce, or which perform services, locally for that locality, and they would get therewith quite a nice little task. But can one imagine that undertakings which until then had worked for the great outside market could be suddenly municipalised?

Let us take an industrial town of only medium size, say Augsburg, Barmen, Dortmund, Hanau, Mannheim. Is anyone so foolish as to imagine that the communes there could, in a political crisis or at some other occasion, take over all the different manufacturing and commercial businesses of these places into their own management and carry them on with success? They would either have to leave them in the hands of the former proprietors, or, if they wanted to expropriate these absolutely, they would be obliged to give them over to associations of workmen on some leasing conditions.

The question in all these cases would resolve itself into the question of the economic power of associations – i.e., of co-operation.



(b) The Economic Capacities of Co-operative Associations

The question of the capabilities of associations has hitherto been treated very curiously in the Marxist literature. If one leaves out of the question the literature of the ’sixties, one will find in it, with the exception of very general, mostly negative, observations, very little about the co-operative movement. The reasons for this negligence are not far to seek.

First, the Marxist practice is predominantly political, and is directed towards the conquest of political power and attributes, and gives importance almost solely to the trade union movement, as a direct form of the class struggle of the workers. But with respect to the co-operative societies, the conviction was forced on Marx that on a small scale it was fruitless, and would, moreover, have at the most only a very limited experimental value. Only through the community could something be begun. Marx expresses himself in this sense on the associations of workmen in the 18 Brumaire. [6]

Later he somewhat modifies his judgment of co-operative societies to which the resolutions on the system of co-operation moved by the General Council of the International at the Congress at Geneva and Lausanne bear witness, as well as the passage apparently originating from Marx, at all events approved by him in G. Eccarius’ A Workman’s Refutation of John Stuart Mill, where the same significance is applied to the associations as forerunners of the future, as the guilds had held in Rome and the early middle ages, and, further, the passage already alluded to in the third volume of Capital, which, written at the same time as those resolutions and Eccarius’ work, brings into prominence the importance of industrial associations of the workers as a transition form to socialist production. But the letter on the draft scheme of the Gotha Programme (1875) again sounds much more sceptical as regards these associations, and this scepticism reigns from the middle of the ’seventies over the whole Marxist literature.

This may partly be the result of the reaction which set in after the Paris Commune, and which gave the whole working-class movement another character almost exclusively directed towards politics. But it is also the result of the sad experiences which had been undergone everywhere with co-operative societies. The high-flown expectations to which the advance of the English co-operative movement had given occasion were not fulfilled. For all socialists of the ’sixties, societies for production had been the chief consideration, the co-operative stores were minor. The opinion prevailed ’ to which even Engels in his essays on the housing question gave expression ’ that as soon as co-operative stores everywhere included the mass of the workers they would certainly have as a consequence a reduction of wages. [7] The resolution drawn up by Marx for the Geneva Congress runs:

“We recommend workmen to embark on co-operative production rather than on cooperative stores. The latter touch only the surface of the economic system of to-day, the first strikes at its foundations ... To stop the co-operative societies from degenerating into ordinary bourgeois companies all workers employed by them, whether shareholders or not, should receive the same share. As a merely temporary expedient it may be agreed that the shareholders should besides receive a moderate interest.”

But it was just the productive societies formed in the ‘sixties which failed nearly everywhere. They had either been obliged to dissolve altogether or had dwindled into small company businesses, which, if they did not employ men for wages quite in the same way as other businesses, were weakly dying away. On the other side the societies of consumers were, or appeared to be, really turned into mere “philistine” retail shops. No wonder that people in socialist circles turned their backs more and more on the whole co-operative movement.

Two circumstances are answerable for the fact that a comprehensive criticism on cooperation is wanting in Marx. First, at the time he wrote sufficient experience of the different forms of co-operation was wanting to formulate a judgment on that basis. The exchange bazaars which belonged to an earlier period had proved absolute failures. But, secondly, Marx did not meet the co-operative societies with that freedom from preconception which would have allowed his faculty for keen observation to penetrate further than the average socialist’s. Here the already formed doctrine – or, if I may be allowed the expression, the formula – of expropriation stood in the way of his great power of analysis. The co-operative society was acceptable to him in that form in which it represented the most direct contrast to the capitalist undertaking. Hence the recommendation to workmen to take up cooperative societies for production because these attacked the existing economic system “at its foundation.” That is quite in the spirit of dialectics and corresponds formally throughout with the theory of society which starts from production as, in the last instance, the decisive factor of the form of society. It corresponds also, apparently, with the conception which perceives in the antagonism between already socialised labour and private appropriation the fundamental contradiction in the modern mode of production which is pressing for a solution. Productive co-operation appears as the practical solution of this antagonism. In this sense Marx thinks of it – that is, that kind of society where the “workers as an association are their own capitalist” [8], so that, if it necessarily reproduced all the faults of the present system, yet it did away in fact with the antagonism between capital and labour and thus proved the superfluousness of the capitalist employer. Yet experience has since taught that industrial co-operation constituted in just that kind of way was not, and is not, in a position to produce this proof; that it is the most unfortunate form of associated labour; and that Proudhon was actually in the right when, in regard to it, he maintained against Louis Blanc that the associations were “no economic force.” [9]

The social democratic critic has sought hitherto the causes of the economic failure of the purely productive co-operative societies simply in their want of capital, credit, and sale, and has explained the decay of the associations that have not failed economically by the corrupting influence of the capitalistic or individualistic world surrounding them. All that is to the point as far as it goes. But it does not exhaust the question. Of quite a series of productive associations that have failed financially, it is quite certain that they had sufficient capital for their work and no greater difficulties in selling than the average manufacturer. If the productive association of the kind depicted had been a force superior to the capitalistic undertaking or even of the same economic power, then it should at least have continued and risen in the same ratio as the many private enterprises begun with most modest means, and it would not have succumbed so pitiably to the “moral” influence of the capitalist world surrounding it, as it has done continually again and again. The history of the productive co-operative societies that have not failed financially speaks almost more loudly still against this form of “republican factory” than that of the bankrupt ones. For it says that, regarding the first, the further development means exclusiveness and privilege. Far from attacking the foundation of the present economic system they have much more given a proof of its relative strength.

On the other hand, the co-operative stores on which the socialists of the ’sixties looked so disparagingly, in the course of time have really proved to be an economic power-i.e., as an organism fit to perform its work and capable of a high degree of development. Against the pitiable figures which the statistics of the purely productive co-operative societies offer, the figures of workmen’s co-operative stores show up like the budget of a world-embracing empire to that of a little country town. And the workshops erected and conducted on account of such co-operative stores have already produced many times the amount of goods which have been made by purely, or nearly purely, productive co-operative societies. [10]

The deeper reasons for the economic as well as the moral failures of purely productive associations have been excellently presented by Mrs. Beatrice Webb [11] in her work on the British Co-operative Movement, even if here and there, perhaps, a few exaggerations are found. For Mrs. Webb, as for the great majority of English co-operators, the society belonging to the workmen engaged in it is not socialistic or democratic but “individualistic”. One can take offence at the selection of this word, but the line of thought is quite correct. This association is not socialistic, as Robertus, indeed, has already shown. When the workmen employed are the exclusive proprietors, its constitution is a living contradiction in itself. It supposes equality in the workshop, a complete democracy, a republic. But as soon as it has attained a certain size – which may be relatively very modest – equality breaks down because differentiation of functions is necessary, and with it subordination. If equality is given up, the corner-stone of the building is removed, and the other stones follow in the course of time, and decay and conversion into ordinary business concerns step in. But if equality is maintained, then the possibility of extension is cut off and it remains of the small kind. That is the alternative for all purely productive associations. In this conflict they have all broken down or languished. Far from being a suitable form for removing the capitalist from the field of modern large industries they are much more a return to pre-capitalist production. That is so very much the case that the few instances where they have had relative success occurred in artisan trades, the majority of them not in England, where the spirit of large industries dominates the workers, but in strongly “small bourgeois” France. Psychologists of nations like to set England up as the land where the people seek equality in freedom, France as the land where they seek freedom in equality. The history of the French productive associations includes, indeed, many pages where the greatest sacrifices were undergone with touching devotion for the maintenance of formal equality. But it shows not one purely productive association of the modern large industry type, although the latter is nevertheless fairly widely spread in France.

Dr. Franz Oppenheimer, in his book, Die Siedlungsgenossenschaft [12], has earned the merit of materially extending and making more thorough the investigation of Mrs. Webb. He offers in the first chapters, in a very clearly arranged classification, an analysis of the different forms of association which in certain parts can scarcely be exceeded in critical clearness. Oppenheimer brings into the classification of associations the separation in principle between associations for purchase and sale, the importance of which, in our opinion, he somewhat over-estimates on single points, but which, on the whole, must be noted as very useful and on the basis of which a truly scientific explanation is possible of the financial and moral failure of the purely productive associations – an explanation in which personal faults, want of means, etc., for the first time move into the second place, as accidental factors, which explain the exception but not the rule. Only to the extent to which the association is substantially an association of purchasers do its general aims and its peculiar interests make its extension desirable. But the more the association is one for sellers, and the more it is one for the sale of products manufactured by itself (the matter is somewhat modified in the case of peasant associations), the greater is the internal opposition. Its difficulties grow with its growth. The risk becomes greater, the struggle for sales more difficult; the same is true regarding the procuring of credit, and the fight for the profit rate or the dividends of the individual members in the general mass of profit, becomes more severe. It is therefore forced again into exclusiveness. Its interest in profit is opposed not only to that of the buyers, but also to that of all the other sellers. The association of purchasers, on the other hand, gains with growth; its interest as regards profit, if opposed to that of the sellers, is in agreement with that of all the other buyers; it strives after the keeping down of the profit rate, after cheapening of products-a pursuit of all purchasers as such, as well as of the community as a whole.

Out of this difference in the economic nature of the two kinds arises the difference in their management so clearly laid down by Mrs. Webb: the essentially democratic character of all genuine associations of purchasers, and the tendency towards an oligarchy in the character of all associations purely for sale.

The differentiation of the associations into those of purchasers and those of sellers is of value to the theory of the nature of associations because it is, in turn, connected with socialistic theory. He who objects to the terms “purchase” and “sale” as formed too specially for capitalistic production of commodities and substitutes for them the conceptions “provision” and “exchange,” will then recognise all the more clearly what a much greater importance the former has for the community than has the latter. The provision of goods is the fundamental general interest. With respect to it all the members are associates in principle. All consume but all do not produce. Even the best productive association, as long as it is only an association for sale and exchange, will always stand in latent opposition to the community, will have separate interests as opposed to it. With a productive association which carries on any branch of production or public service on its own account, the community would have the same points of difference as with a capitalist undertaking, and it depends altogether on circumstances whether the arrangement with it is an easier one.

But to return to the starting-point which has led us to this discussion in the domain of the theory of associations, sufficient has been shown to prove that it is quite a mistake to believe that the modern factory produces in itself a considerable disposition for associated work. And likewise the republic in the workshop becomes a more difficult problem as the undertaking becomes greater and more complicated. For exceptional objects it may answer for men themselves to name their immediate leaders and to have the right to remove them. But for the tasks which the management of a great factory brings with it, where day by day and hour by hour prosaic decisions are to be taken which always give an opportunity for friction, it is simply impossible that the manager should be the employee of those he manages, that he should be dependent for his position on their favour and their bad temper. It has always proved impossible to continue this, and in all cases it has led to a change in the forms of the associated factory. The desire of the workers to take in hand new undertakings where they are employed as an associated manufactory and are bearing corresponding responsibilities and risks, stands in an inverse ratio to the size of their undertaking. But the difficulties grow at an increasing rate.

Let any one only for once look at the thing in the concrete and examine any large industrial undertaking, a great establishment for building machines, large electricity works, a great chemical factory, or a modern publishing business. All these and similar large industrial undertakings can certainly be quite well carried on by co-operative associations, to which also all the employees may belong, but they are absolutely unfit for the associated management of the employees themselves. It would then be shown, in the clearest way possible, what Cunow contends – viz., that the feeling of solidarity between groups of workers, different as to degree of education, manner of life, etc., is only very moderate in amount. What one usually understands by associated labour is only a mistaken rendering of the very simple forms of co-operative work as they are practised by groups, gangs, etc of undifferentiated workers, and which, at the bottom, is only piece-work by groups. [13]

What the community itself cannot take in hand, whether by the state, the district, or the municipality, it would do very well, especially in stormy times, to leave alone for the time being. The apparently more radical action would very soon prove to be the most inexpedient. Co-operative associations capable of living do not allow themselves to be produced by magic or to be set up by order; they must grow up. But they grow up where the soil is prepared for them.

The British co-operative societies are in possession to-day of the £15,000,000 [14] which Lassalle considered sufficient as state credit for carrying out his association scheme. In proportion to the British national wealth that is only a small fraction; after one subtracts the capital invested abroad and the twice-reckoned capital, it is not the hundredth part of the national capital. But it does not exhaust by a great deal the British workman’s capital power, and it is also steadily growing. It has nearly doubled itself in the ten years from 1887 to 1897, and has grown faster than the number of members. These rose from 851,211 to 1,468,955, the capital from 11.5 million pounds sterling to 20.4. The production of the societies has increased latterly still more quickly. Its value in 1894 ran only into £4,950,000 altogether, and in 1897 it was already almost double the amount, namely, £9,350,000. [15]

These are such astonishing figures that when one reads them one asks oneself involuntarily where are the limits of this growth? Enthusiasts on the system of co-operation have reckoned that if the British societies accumulated their profits instead of distributing them, in the course of about twenty years they would be in a position to buy the whole land of the country with all the houses and factories. That is, of course, a calculation after the manner of the wonderful calculation of compound interest on the celebrated penny invested in the year one. It forgets that there is such a thing as ground rent and assumes an increase of growth which is a physical impossibility. It overlooks the fact that it is almost impossible to win over the poorest classes to a co-operative society or that they can be won over to it only very gradually at best. It overlooks the fact that in the agricultural districts only a very limited sphere is open to a co-operative society and that it can lessen but cannot annihilate the expenses of the retail trade, so that possibilities will always spring up for the private undertakers to fit themselves into the changed conditions, and thus a retardation of its growth from a certain point of time becomes nearly a mathematical necessity. It forgets above all things, or leaves out of consideration, that without a distribution of dividends the co-operative movement would generally be at a standstill, that for large classes of the population it is just the dividend, that cursed apple of sin of the idealists of the co-operative system, which forms the chief attraction of a co-operative society. If what is often maintained to-day is very much exaggerated, namely, that the dividend of a co-operative society is no measure of the greater cheapness of its goods, that the single business sells most goods just as cheaply, on the average, as the co-operative store so that the dividend only represents the sum of small, unnoticed rises in the price of certain articles, still, the exaggeration is not altogether unfounded. The workmen’s co-operative store is just as much a kind of savings bank as a means of fighting the exploitation which the parasitic retail trade means for the working classes.

But as with many persons the impulse to save is by no means very deep seated, they follow the convenience of buying at the nearest shop rather than put themselves to some trouble for the sake of the dividend. Moreover, it would be quite a mistake to say that England was originally a particularly favourable soil for co-operative societies. Quite the contrary. The habits of the working classes, the great extension in area of the towns which the cottage system brings with it, counterbalance in this respect the influence of better wages. What has been attained in England is the fruit of the hard, unflinching work of organisation.

And it is labour which was, and is, worth the trouble. Even if the co-operative store did nothing more than lower the profit rate in the retail trades, it would accomplish a work extremely useful for the national economy. And there can be no doubt that it does work in this direction. Here is a handle by means of which the working class can seize for itself a considerable portion of the social wealth which would otherwise serve to increase the income of the propertied classes and thereby strengthen them, and this, without direct destruction of life, without recourse to force which, as we have seen, is no simple affair.

We can consider it as proved that the co-operative society has shown itself to be an economic factor of importance, and if other countries are behind England in this, it has taken firm root in Germany, France, Belgium, etc., and gains ground more and more. I forebear quoting numbers because the fact is well known, and continual figures are wearisome. Of course legal trickery can hinder the spread of co-operative societies and the full development of their innate possibilities, and their success is again dependent on a certain degree of economic development; but here, we are above all concerned with showing what co-operation can do. And if it is neither necessary nor possible that the associations as we know them to-day can ever take possession of all production and distribution of commodities, and if the widening domain of public service in the state and the municipal and district councils puts limits on the other side, yet on the whole a very wide field is open to co-operation, so that, without lapsing into the co-operative Utopias I have referred to, we are justified in expecting very much from it. If in a little over fifty years out of the movement which began with the £28 of the weavers of Rochdale an organisation has developed which handles a capital of £20,000,000, it would need great courage to be willing to prophesy how near we are to the point of time when the limit of its growth is reached, and what forms of the movement are still slumbering in the unknown years of the future.

To many socialists the co-operative movement is not quite acceptable because it is too “bourgeois”. There are salaried officials and workmen employed for wages; profits are made, interest is paid, and disputes occur about the amount of the dividends. Certainly if one kept to forms, the public elementary school, for example, is a much more socialistic institution than the co-operative society. But the development of public services has its limits and needs time, and meanwhile the co-operative society is the easiest accessible form of association for the working class, just because it is so “bourgeois”. As it is Utopian to imagine that the community could jump into an organisation and manner of living diametrically opposed to those of the present day, so it would also be Utopian to make a beginning with the most difficult form of associated organisation.

Meanwhile co-operative production also will be realised though probably in other forms than the first theorists of the co-operative system imagined. For the present moment it is the most difficult form of the realisation of the co-operative idea. It has already been mentioned that the English co-operators handle more than the £15,000,000 which Lassalle demanded for his scheme of association. And if the matter were only a financial question other pecuniary resources would be at their disposal. The friendly societies, the trade unions hardly know where to invest their accumulated funds. But it is not exactly, or not only, a question of financial resources. Nor is it a question of erecting new factories for a market already supplied. Opportunity is not lacking for buying existing and well provided factories. It is now to a great extent a question of organisation and management, and therein much is still lacking.

“Is it, in the first place, capital that we need,” we read in an article in the Co-operative News, the central periodical of the British Society; and the writer of the article answers the question with a decided negative. “As it appears, we have at present at our disposal some £10,000,000, which are only waiting to be employed in a co-operative way, and a further £10,000,000 could doubtless be quickly procured if we were fully in a position to apply it usefully in our movement. Do not let us, therefore, conceal the fact – for it is a fact – that even at the present hour in the co-operative world there is a greater need of more intelligence and capacity than of more money. How many among us would buy nothing that was not made and finished under co-operative conditions, if it were possible to live up to this ideal? How many of us have not again and again attempted to use goods made by cooperators without being perfectly satisfied? [16]

In other words, financial means alone will not solve the problem of co-operative work. It needs, leaving other hypotheses out of the question, its own organisation and its own leaders, and neither are improvised. Both must be sought for and tried, and it is, therefore, more than doubtful whether a point of time in which all feelings are heated and all passions excited, as in a revolution, can be in any way conducive to the solution of this problem which has already proved to be so difficult in ordinary times. In human judgment the contrary must be the case.

I have not here to enlarge on other forms of the co-operative system (loan societies, credit societies, raw materials, and warehouse associations, dairy farm associations, etc.), for these are of no importance to the wage-earning class. Nevertheless owing to the importance which the question of small farmers (who also belong to the working classes even if they are not wage earners) has for social democracy, and in view of the fact that handicrafts and small trades play a still noticeable part, at least according to the number of persons employed in them, I must point out the advance which the co-operative system has attained in these directions.

The advantages of the co-operative purchase of seeds, of the co-operative purchase of machines, and the co-operative sale of produce, as well as the possibility of cheap credit, cannot save peasants already ruined, but they are a means of protecting from ruin thousands and tens of thousands of small peasants. There can be no doubt of that. there are unusually abundant opportunities to-day for the acquisition of small holdings. It would be rash to say, as some writers do, that for agriculture, with reference to the advantages of large and small undertakings, exactly the opposite law holds good as for industry. But it is not too much to say that the difference is quite extraordinary, and that the advantages which the large farm, powerful in capital and well equipped, has over the small are not so important that the small holding could not make up for them to a great extent by a fuller use of the system of cooperation. The use of mechanical power, the procuring of credit, the better security of sale co-operation can make all these accessible to the peasant whilst the nature of his farming makes it easier for him to overcome occasional losses than is possible for the larger farmer. For the great masses of peasants are not always simply producers of commodities; they themselves raise a considerable share of their necessary food. [17]

In all countries of advanced civilisation the co-operative system quickly increases in extent and scope. Belgium, Denmark, France, Holland, and lately also Ireland, show herein no different picture from Germany. It is important that social democracy instead of fishing out of statistics proofs for the preconceived theory of the ruin of the class of small farmers should examine searchingly this question of the co-operative movement in the country and its importance. The statistics of forced sales, mortgage incumbrances, etc., are in many respects misleading. Undoubtedly landed property to-day is more mobile than ever; but this mobility does not work only from one side. Until now the openings which the forced sales have made have always been filled again.

As far as the agricultural classes are concerned we are face to face with the fact that however many co-operative arrangements they have made, one thing in co-operation has always hitherto been withheld from them: the cultivation of the land itself, that is the farming of field and meadow and actual cattle rearing. Different kinds of work linked with farming and attached to it are carried on co-operatively, or at least for co-operative societies, but farming itself withdraws here and elsewhere from co-operative work. Is co-operation less advantageous for it than for other industries? Or is it simply the peasant’s landed property that stands in the way?

The fact has already been emphasised often that the division of the land among many owners is a great hindrance to the co-operative cultivation of the soil. But it does not form the only hindrance, or, to express it differently, it increases its real difficulties but is not usually the cause of them. The separation by distance of the workers, as well as the individualist character of a great part of agricultural work, plays likewise a part. It is possible that the peasants’ syndicates which are still so young may get over these hindrances in their further development, or – which seems to me most probable – they will be driven gradually beyond their present limits. Meanwhile they cannot yet be reckoned with.

Even agricultural production for co-operative societies is at the present time an unsolved problem. The English co-operative stores have done no worse business with any undertakings than with their farms. Nowhere do the peasants gain greater profit from the soil than in Scotland. The figures of profit for wheat, oats, etc., per acre are much higher in Scotland than in England. But a farm of Scottish co-operators furnished with good machines representing a capital of £12,500 has proved a great failure. For 1894 it made a profit of six-tenths per cent., for 1895 a loss of 8.1 per cent. But how does it stand with the associations of agricultural labourers? Does the productive co-operation of agricultural labourers offer better prospects than the productive co-operation of industrial workers?

The question is all the more difficult to answer because sufficient practical examples are wanting. The classical example of such a co-operative society, the celebrated association of Ralahine, lasted too short a time (1831-1833), and whilst it lasted was too much under the influence of its founder Vandeleur and his agent Craig for it to be able to serve as a valid proof of the living power of independent associations of workers on the land. It only shows the great advantages of association under certain circumstances and assumptions.

The experiences of the communistic colonies are the same. These latter succeed in actual or practical isolation for a long time under circumstances one would consider most unfavourable. But as soon as they attained a greater degree of prosperity and entered into more intimate intercourse with the outer world they decayed quickly. Only a strong religious or other bond, a sectarian wall raised between them and the surrounding world, apparently, will keep these colonies together when they have attained wealth. But the fact that it is necessary for men to be limited in their development in some way, in order that such colonies should flourish, proves that they can never be the general type of associated labour. They stand for Socialism at a stage of pure industrial productive association. But they have acted as a glowing proof of the advantages of cooperation.

On the basis of all these facts and of the experiments which intelligent landlords have made with co-operative leases, sharing profits with agricultural labourers, etc., Dr. F. Oppenheimer has developed in the already mentioned volume the idea of an agricultural association which he calls “Siedlungsgenossenschaft” (Colonising Co-operative Association). It is to be an association of agricultural labourers, or, is to begin as such, and is to combine individual with co-operative management – that is, small farming with associated work on a large scale, as is the case to-day on large estates where plots on the outskirts are let off in allotments at a more or less high rent, and which are often managed in a more exemplary manner. Oppenheimer conceived of a corresponding division in his Siedlungsgenossenschaft Association, only, that here the intention naturally is not to lower the price of labour for the central farming round which those small holdings are grouped, but really that opportunity shall be given to every single member to enjoy on a sufficiently large piece of land all the material and other charms of a farm of his own and to employ in its culture all the labour power not needed for the central farm of the association, which promises him the best returns or otherwise best suits his individuality. But for the rest the association is to utilise all the advantages of the modern large enterprise and all co-operative and mutual arrangements are to be adopted for the business needs, etc., of the members.

This is not the place to examine more closely the Oppenheimer proposal and the theory on which it is based. But I think I must just observe that they do not seem to me to deserve the contempt which has been their portion in some of the social democratic publications. One can doubt whether the thing can or will be worked out quite exactly in the form developed by Oppenheimer. But the fundamental thoughts which he develops depend greatly on the scientific analysis of the forms of management and agree moreover with all the experiences of co-operative practice, so that one can indeed say that if the co-operative method of farming is ever brought to pass, it can scarcely happen in any form materially different from the one worked out by Oppenheimer. [18]

The expropriation on a larger scale which is mostly thought of in the criticism of such proposals cannot in any case produce organic creations in a night by magic, and therefore the most powerful revolutionary government would be compelled to face the task of looking for a practical theory of co-operative work in agriculture. For such a work Oppenheimer has brought together most abundant materials and has submitted them to a sharp systematic analysis, which by itself made the “Siedlungsgenossenschaft” worth studying.

There is still one more remark to make with regard to agricultural co-operation. As far as the Socialist is a party politician he can only greet with satisfaction the present immigration from the country into the towns. It concentrates the masses of workers, revolutionises their minds, and at any rate furthers emancipation. But as a theorist who thinks beyond the present day the Socialist must also say that this migration in the course of time may become too much of a good thing. It is well known to be infinitely easier to draw country people into the towns than to draw dwellers in towns into the country and accustom them to agricultural work. Thus the stream of immigration into the towns and industrial centres does not only increase the problems of the present rulers. Let us take, for example, the case of a victory of the working class democracy which brings the Socialist Party to the helm. According to all experience hitherto its immediate result would presumably be first of all to increase markedly the stream into the great towns, and it is in some measure doubtful whether the “industrial armies for agriculture” would allow themselves to be sent more willingly into the country than in France in 1848. But apart from that, the creation of co-operative associations capable of life and guidance will be under all circumstances a heavy task the further the depopulation of the country has advanced. The advantage of the existence of models of such associations would not be bought so very dearly at the price of a somewhat slower rising of the monstrous towns. [19]





1. I wrote in an earlier article of the Problems of Socialism concerning the subordinate and branch establishments in industry: “Such a subordinate establishment which is perhaps worked with very much constant (i.e., fixed) and with very little variable (i.e., wages) capital, which employs expensive machinery and few workers, comes thus, according to the practice of the Imperial statisticians, under small factories or even small workshops, whilst it really belongs to the capitalistic factories.... We may assume it as quite certain that handicrafts and small factories appear much stronger in point of numbers in the trade statistics than they are in reality (Neue Zeit, XV. 1, p.308). And in respect to agriculture: “The area can be fairly small and yet be the scene of a thoroughly capitalistic business. Statistics founded on the size of the establishment in area, say less and less of their economic character” (ibid., p.380). Similarly in my article on the Catastrophic Theory, on p.552 XVI., 1, with respect to the figures for commerce and trade.

2. “Revolution “ is here used exclusively in its political meaning, as synonymous with a rising or unlawful force. For the change in the order of society, on the other hand, the term “ social reorganisation “ is used, which leaves open the question of the way. The object of this distinction is to exclude all misunderstandings and ambiguities.

3. “But to whom is it not evident that for the great towns where the workers form the overwhelming majority, if they had once attained the command of public power, of its administration, and the enactment of law – the economic revolution would have been only a question of months, nay, perhaps of weeks?” (Jules Guesde Der achtezehnte März [1871] in der Provinz Zukunft [1877] p.87).

“But we declare: Give us for half a year the power of government, and the capitalist society would belong to history” (Parvus in the Sächsiche Arbeiterzeitung, March 6th, 1898).

The latter sentence stands at the end of an article in which, amongst other things, it is shown that even after the social revolutionary government has taken the regulation of the total production in hand, the setting up of trade in commodities by an artificially thought-out system of exchange will not be practicable. In other words, Parvus, who has occupied himself seriously with economics, understands on the one side that “the trade in commodities has permeated so deeply all conditions of social life that it cannot be replaced by an artificially thought-out system of exchange,” and in spite of this conviction, which has long been mine (it was already hinted at in the article on the Sozialpolitische Bedeutung von Raum und Zahl, but was to have been treated more thoroughly in a later article of the series, Problems of Socialism), he imagines that a social revolutionary government could in the present structure of industry “regulate” the whole of production and in half a year exterminate root and branch the capitalistic system that has grown up out of the production of commodities with which it is so intimately bound up. One sees what sort of political children the force frenzy can make out of otherwise well-informed people.

4. In the socialistic movement in England, just as elsewhere the better-paid – that is, the educated – workmen of higher mental endowment form the picked troops. One finds in the assemblies of socialist societies only very few so-called unskilled workmen.

5. In the ten years since this was written a very remarkable change for the better has taken place. The organisations of technological, commercial, etc., functionaries and assistants have made wonderful headway. At the end of 1907 there were, apart from the trade unions of the wage-earners, embracing altogether 24,000,000 members, 68o,981 functionaries of all sorts and positions organised in forty-eight societies with trade union leanings more or less distinct. Of these fifteen societies, with altogether 459,787 members, were unions of office, shop, warehouse, etc., functionaries and assistants in commercial and kindred enterprises. On the other hand, there were only a few thousand agricultural labourers organised, and not the tenth part of the organised clerks and shop assistants belonged to unions with socialist tendencies.

6. It (the proletariat) partly throws itself into doctrinaire experiments, Exchange Banks, and Workmen’s Associations, thus into a movement wherein it renounces the overthrowing of the old world with its own great massed-up resources.”

7. Housing Question, new edition, pp. 34-35.

8. Vol. III., p.427.

9. If Proudhon appears sometimes as a decided opponent and sometimes as a supporter of co-operation this contradiction is explained by his having at one time quite a different form of co-operation in his mind than at another. He refuses to the essentially monopolist association what he admits to the mutualistic association, that is to the association working a system of reciprocity. His criticism is, however, more intuitive than scientific, and full of exaggerations.

10. The figures for the latter kind of productive co-operative societies are extremely difficult to ascertain as the official statistics of production by associations do not distinguish between them and the much more numerous and large workmen’s share associations (companies) for objects of production. According to the returns of the British Board of Trade in 1897 and 1905, the value of the year’s production of those associations for which the Board issued returns was:



Of Co-operative Stores in their own workshops



Of Associations of Millers’ trades



Of Irish Dairy Farming Associations



Of Workmen’s Associations for objects of Production


Against this the registered British Co-operative Societies had in the years:



















11. Published under her maiden name, “Potter”.

12. Colonising Co-operative Societies. Leipzig: Duncker and Humblot.

13. “The thing was not easy People like the cotton workers do not easily range themselves in the ranks of equality which are demanded for the successful conduct of a society (Sketch of the History of the Burnley Self-help Association in Co-operative Workshops in Great Britain, p.20).

14. See Note 10.

15. In 1906 the membership was 2,334,641; the capital, £39,898,000; the value of production, £13,953,828.

16. December 3rd, 1898.

17. In Prussia, from 1895 to 1907, the small holdings of 3 to 20 hectares (7½ to 50 acres) have increased from 698,357 to 760,315, and the area they cover has also considerably increased, whilst that of the larger holdings has decreased.

18. In the congress of the British Co-operative Society (Peterborough, May, 1898) a delegate, Mr. J.C. Gray, of Manchester, read a report on co-operation and agriculture, in which he, after an objective examination of all experiments made in England, finally makes a proposal which is wonderfully like Oppenheimer’s protect. “The soil is to be common property, the providing of all stock is to be co-operative and so is the sale of all products. But in the cultivation of the soil the individual interests must be attended to with due regard against interference with the interests of the community.” – (Co-operation and Agriculture, Manchester, 1898, p.9.)

19. I see with pleasure that Karl Kautsky in his work on the agricultural question which has just appeared, has taken the problem of co-operation on the land seriously into examination. What he says of the obstacles that hinder the conversion of the peasants’ small holdings into large associations for carrying on agricultural work, fully agrees with what Oppenheimer works out on the same subject. Kautsky expects the solution of the problem from the influence of industrial developments and the conquest of political power by the proletariat. He says evolution brings the peasants to-day always more and more into dependence on capitalistic enterprises, as distilleries, breweries, sugar factories, flour mills, butter and cheese factories, wine cellarages, etc., and makes them casual or temporary workers in other kinds of capitalist undertakings, such as brickfields, mines, etc., where to-day small cultivators take temporary work in order to make up for the deficit of their holdings. With the socialisation of all these undertakings the peasants would become “cooperative workers,” temporary workers of socialistic associated undertakings, whilst on the other side the proletarian revolution would lead to the conversion of large agricultural holdings, on which to-day a great number of the small cultivators are dependent, into co-operative undertakings. Thus the small agricultural holdings would lose their consistency more and more, and their combination into co-operative holdings would meet with fewer difficulties. Nationalisation of mortgages and cessation of militarism would facilitate this evolution.

In all this there is much that is right, only Kautsky appears to me to fall into the error of considerably overestimating the forces working in the direction desired by him. Some of the industrial undertakings which he enumerates are not on the high way to control industrially small farms, but to become dependencies of agricultural associations and with others, as, for example, the brewing business, their connection with agricultural holdings is too loose for a change in their nature to exercise a strong reaction on the forms of the latter. It is just the largest sugar factories that belong, in Germany, to associations of big and small cultivators. Further, Kautsky allows himself, in my opinion, to be led away too much by the strong words which he now and then uses, to conclusions which would be correct if those words were true generally; but as they are only partially true, they cannot claim general acceptance. To make this clearer: in Kautsky the life of small farmers appears a sort of a hell. That can be said with justice of a great number of small farmers, but of another large number it is gross exaggeration, just as to-day in many cases one is not now justified in speaking of small farmers as “modern barbarians.” It is a similar exaggeration to call the work which the small farmer performs on neighbouring estates, because his holding does not occupy him fully, slaves’ work. By the use of such expressions assumptions are maintained which allow feelings and tendencies to be assumed to be general in those classes when, in reality, they are only exceptional.

If I cannot agree with all Kautsky’s conclusions on the probable development of small farming, I am all the more at one with him in the principles of his agrarian political programme to be carried out by social democracy.


Last updated on 16.3.2003