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Here again he was unfortunate. The joint stock limited liability idea was beyond the stage of infancy when he wrote, but he failed to see its possibilities. Individual ownership of the capital of a big firm is rare, and so whilst there may be great concentration in production there may be, and is, great diffusion of ownership. The shares of most big concerns are owned by a few big holders and by a multitude of small ones. When we add to this the millions of landowners, large and small, the very rich become surrounded by a strong triple guard, ranging from the owner of a suburban allotment right through all the grades of the middle class up to the precincts of Wall Street and Fifth Avenue. For the middle class has no more vanished than the peasant proprietor. It thrives either on successful small or medium-sized businesses, the greatly expanded professions, or on the shares which it holds in big concerns. It is reinforced daily by the men who work up into it from amongst the wage-earners. Here again, then, the Marxian predictions seem to have broken down.

(4) Accumulation of wealth at one pole was to be accompanied by accumulating misery, agony of toil, slavery, brutality, and mental degradation at the other pole, and this would eventually stir the organized workers to take things into their own hands. Marx based this prediction partly on the economic conditions of 1800-1850, but also on the assumption of free competition, no state intervention, and a surplus labour supply at hand making resistance by the workers useless. But by 1867 trade unionism was checking free competition, stiffening the courage of the industrial reserve army, and fighting for better conditions. Factory legislation had already done much for women and children, and the blessings of free competition were being everywhere challenged. And yet Marx virtually ignores these new tendencies; instead he predicts iron laws at work turning out magnates and miserables. Again time has proved Marx a poor prophet. Real wages in almost every country increased 50 to 100 per cent. between 1850 and 1900. Wages went up even when prices were falling heavily (1873-1896), but have failed to keep pace with the world rise in prices since 1896. The increase has made the standard of living much higher than 50 years ago. The rich have got richer, but the poor are not poorer.

To this the Marxian apologist says that Marx meant relative misery: the rich have gone ahead more rapidly than the poor, and have got more than their share. But this is twisting Marx's whole language and theory. He meant actual, not relative misery; his whole theory of accumulation, industrial reserve army, wages, etc., supported the thesis. And he was wrong.

The misery was to be accentuated by the periodical crises which prostrated the capitalist system. These crises were going to be more and more severe, and recovery from them more slow, until perhaps finally one of them, more severe than the rest, would ring the death-knell of the system. But ever since 1867 industrial fluctuations in Great Britain have become much less violent in inception and character. There has been no great financial collapse to act as prelude, and the conditions during the slack years have been less harsh than in the depressions of earlier decades. Crises and depressions have tamed down instead of getting wilder. The growth of the international market, improvements in transport, the growth of solidarity among financial houses, the restriction of competition by trusts and cartels, all these, as Engels admitted in 1895, have eliminated or strongly reduced the “old breeding-grounds of crises and opportunities for the growth of crises.'' And so capitalism takes another lease of life.

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And the social revolution? When will it come? There can be no doubi that Marx for a long time believed that capitalism would work itself out quickly, and so give place to socialism within a few decades. With the fervour of an enthusiast, he believed every sign to be the real one. Revolution was coming in 1848; as a result of the Crimean War; with the Commune of Paris, and probably many other times as well. This belief in an early day of judgment was widespread. During the long depression of the eiglaties, Engels declared that he could almost calculate the moment when the unemployed, losing patience, would take their own fate into their own hands; the International Socialist Congress of 1896 was convinced that a great commercial crisis was at hand, and therefore impressed upon the proletariat of all countries the imperative need for learning, as classconscious citizens, how to administer the business of their respective countries for the common good. It may be claimed that the Russian Revolution fulfils the Marxian prophecies. To this one need only reply that the conditions precipitating the revolution were political and military in origin rather than economic; that the peasants, who are the great majority of the population, had not been turned by capitalism into proletarians, anil that the revolution has strengthened private property in land instead of abolishing it. (See Chapter XXIV.)

Conclusion. We can now sum up these criticisms. Marxian Socialism depends upon the fulfilment of certain specified historical developments, most of which have not worked out as Marx predicted. There is no such inevitability in any human institution as Marx postulated. Men will not succumb to any force without a struggle, and Marx's chief failing was that he forgot to allow for counter-tendencies. Capitalists gradually began to see that competition was a mixed blessing: so they combated it. They sought for the causes of commercial crises, and finding them partly financial took steps to guard against any subsequent monetary collapse. Workmen, instead of being the passive victims of capitalism, soon began to organize in defence. Each section took steps to protect its life and interests. This makes it impossible to prophesy the line of development. History is strewn with false prophecies; the prophets under-estimate the force of some factors, place too much stress on others, omit to allow for the unexpected, and let their wishes shape their forecasts. All this applies to Marx. He wrote when capitalism was really in its infancy, when the transition from old to new forms was still incomplete, and when, therefore, men had scarcely begun to face the problems created by the new economic order. The wonder was not that in places he was wrong, but that in others he was so nearly right. Still, if socialism can only come when all the necessary developments of concentration, class division, misery and economic stagnation are fully grown, one might say the social revolution is still a long way off; but it is not safe to prophesy.

Books Recommended. Spargo, J., “Life of Marx'?; Marx, “Capital''; Marx and Engels, “The Communist Manifesto''; Engels, F., “SocialismScientific and Utopian”; Hyndman, H, M., “Economics of Socialism”); Kautsky, K., “The Class Struggle”?; Boudin, “Theoretic System of Marx'!; Untermann, “Marxian Economics’’; Loria, A., “Karl Marx.” For the criticisms of Marx, see: Simkhovitch, “Marxism versus Socialism”; Skelton, Socialism, a Critical Analysis”; Bernstein, “Evolutionary Socialism”); Vandervelde, “Collectivism and Industrial Revolution”; Seligman, “The Economic Interpretation of History''; Portus, G. V., “Marx and Modern Thought.”

6

CHAPTER XXII.

SOCIALISM IN POLITICS.

ORGANIZED labour has moved along three distinct lines—trade unionism, co-operation, and political activity. In some countries it has been driven to take up politics because of the apparent failure of its efforts on one of the other two lines, and has sought to gain its end through the ballot-box. In these countries the driving force has not been so much a desire to create a new social organization as to remedy defects in the one prevailing.. Political effort in Australia was not begun under the glamour of any strong new economic faith or creed, though the single-taxer and the socialist played their part. Even in Queensland, where the first Labour Party platform (1890) was full-blooded socialism, a much less ambitious programme was soon substituted. Only gradually did socialistic aims creep into the humdrum labour demands. In other countries, especially Germany and Russia, where the political movement preceded the industrial, a full measure of socialism was demanded from the first. Social revolution and the class war were the popular items on the menu, and only gradually did they become supplemented, and to some extent displaced, by more moderate demands such as figured prominently on labour platforms. If we divide the political movement into two branches, Labour and Socialist, one might say that Labour parties generally became more socialist, and socialist parties more Labour. The pink became streaked with red, the red with pink.

The relations between the political and other movements vary considerably in different countries. In the early days, German Social Democrats looked askance at unionism and co-operation; they feared them as rivals, which would distract the energy of the proletariat and satisfy it with half-measures. Only gradually was it realized that labour must advance by all three methods—or all four, if one adds education-and the relations between the unions and the political bodies therefore became intimate, though each organization had its clearly-defined sphere. In Belgium, co-operation, unionism, and politics were almost inseparable from 1890 onwards, and the keen socialist was an equally keen co-operator and unionist. In England, co-operation and trade unionism grew first, and were not formally connected; the political movement was built up largely by the unions, but the co-operative bodies foreswore all thought of politics until 1917. Then, having decided on the need for parliamentary effort, they determined not to join the Labour political organization but to run their own candidates. In Australia, politics and unionism are inseparable, but both have ignored co-operation. Finally, where Labour and Socialist parties exist side by side in a country there is seldom any official connection between them except of mutual contempt and antagonism.

Beginnings. The political socialist movement could make little headway until the Industrial Revolution had run some distance on its track. A proletariat was necessary, and that class did not fully emerge in England till about 1830, and in other countries much later. Nearly all the “movements” and revolutions up to 1848 were middle-class rather than workingclass in origin and character. The English revolution of 1688, the French

upheavals of 1789 and 1830, the Reform Act of 1832, and the European turmoils of 1848 all aimed primarily at placing political power in the hands of the bourgeoisie and their satellites. They were attacks by the new industrial and commercial interests on the power of monarchs, landlords, aristocrats, and the old governing class generally. In the struggle the middle class er.listed the services and support of the wage-earners, but immediately the aims were achieved the alliance broke, and should the poor ask for their share of the spoils they were rudely rebuffed and vigorously suppressed. Liberty, equality, security, and property, these were the watchwords of the revolutions, but each word was interpreted in the middle-class sense, and the .greatest of them was property.

Still during the period before 1848 a working-class feeling was growing. At first it expressed itself spasmodically in the burning of mills, the smashing of machines, and in appeals to parliament to stop the march of the factory system. These efforts failed completely. Then came the early co-operative and trade union experiments, and Chartism, all of them influenced by the socialist and anti-capitalist ideas of Owen and others. Chartism, which held the field till 1848, was political in its demands, but economic in its aims. It was a knife and fork question; it wanted better houses, cheaper food, shorter hours, and greater security of employment, and believed these things could be obtained only by overthrowing capitalism in favour of a co-operative commonwealth. That commonwealth was to be realized through a parliament of paid members, elected annually by ballot on a manhood franchise. The Chartists were the first wage-earners to see good times coming through the slit in the lid of the ballot-box. But Chartism failed in 1848, and the leadership of the socialist movement passed to Germany.

German Social Democracy. The Industrial Revolution began in Germany in the fifties, and by. 1860 was manifesting many of its worst features. Long hours, low wages, child labour, competition between manual and steam power, all showed themselves. The wage-earner had no voice in local or national government; the right of combination, free speech, and free meeting was denied him; he collided against the police and the law courts whenever he tried to stir himself, and his inexperience of concerted action was a serious handicap. He had helped the middle-class Liberals in 1848, and the Liberals, afraid of his request for manhood suffrage, had soon deserted him. He felt “something must be done,'' but what exactly he hail no idea. Then there descended upon him Ferdinand Lassalle--young, brilliant scholar, dandy, counoisseur of food and wines, society favourite, champior: of deserted wives, agitator, organizer, orator, Jew. From 1862 to 1864 Lassalle was stirring up many of the German workers, and filling them with new ideas and resolves. In lectures and pamphlets he preached that the world was entering on a new era, of which the working classes would be the builders and rulers, and declared that the foundation of the new society would be universal suffrage as opposed to the limited franchise existing in Prussia. Lassalle's efforts resulted in the formation of the Universal German Workingmen's Association in 1863, “to work in a peaceful and legal way for the establishment of equal and direct universal suffrage.” Next year he was killed in a duel, and for a time his organization made very little progress. Its power was chiefly in North Germany.

Meanwhile in the south a rival body emerged. Here many working men's educational societies were feeling their way toward some radical policy. August Bebel, a young, self-educated wood-turner, was their leader, and when he fell under the spell of Liebknecht, who had come straight froni Marx, the societies soon began to adopt a Marxian creed. In 1869 they formed the Social Democratic Workingmen's Party, with a democratic and Marxian platform. Six years later, at Gotha, north joined south, and the party of to-day was born. Even before Gotha, the two parties had secured political representation. There were two Socialists in the first Reichstag (1871), nine in the second (1874), and twelve, representing half a million votes, in the third (1877). Bebel and his fellows used the Reichstag as a platforni, from which to attack despotism and capitalism, and their hot words, augmented by the growing socialist vote, stirred fear in the hearts of the rulers. In 1878 two attempts were made on the life of the Emperor, and although the Social Democrats had nothing to do with them, Bismarck seized his opportunity, and struck hard. To him this new party was an enemy of the state and society; íts aim was the “subversion of the social order." Anti-social, anti-patriotic, it must be crushed, and this was to be done by the law pushed through the Reichstag in 1878. The Social Democratic organization was declared to be illegal, its collections, meetings, and processions were forbidden, its newspapers and other publications liable to be seized; the police were given the right to place socialist centres in a “minor state of siege,” i.e., under a sort of martial law.

For twelve years the ban lay on social democracy; the police were active; and yet the movement lived. Its affairs were directed from across the frontier, its papers and pamphlets smuggled in, and its parliamentary leaders used the Reichstag as the only platform from which they could preach to the millions outside. The socialist vote rose to 760,000 in 1887, and nearly 1,500,000 in 1890. The party came back in the latter year with 35 members, and in face of this manifestation of the folly and futility of repression, the Act of 1878 was thrown overboard.

Erfurt and After. The party at once met again on German soil, and at the congress at Erfurt (1891) adopted a programme to which it still adheres. The first half is pure Marx, the Manifesto boiled down.

The concentration of capital in industry and agriculture, increasing misery, more severe crises, growing unemployment, the class struggle, all are set out in orthodox language. But it is recognized that the struggle must necessarily be political in character, and the proletariat “cannot effect the passing of the means of production into the ownership of the community without acquiring political power." The aim of the party is therefore to shape this battle of the working class into a conscious and united effort, and to show it its naturally necessary end.”' As means to this end certain democratic reforms must first be obtained, such as universal adult suffrage, proportional representation, the initiative and referendum, freedom of organization, press, and speech. For the workers there must be an eight-hour day, no child labour, thorough factory inspection, freedom to form unions, and an imperial scheme of workmen's insurance.

Such a programme appealed to the socialist proper, to the democrat, and to the man who merely desired better industrial laws. Hence from 1891 onwards the party made steady progress; in 1903 it cast 3,000,000 votes, and returned 81 members. This victory roused the anti-socialist elements, who at the next election (1907) rolled up to the polling booth as they had never done before, in addition to carrying on a strenuous campaign against the red terror. Hence, although the socialists increased their vote by 250,000

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