The Process of Concentration in Capitalistic Industry.
1.--The Displacement of Agriculture by Industry.
The capitalistic system of production not only dominates the social
organization but also the political organization. It influences and
controls the thoughts and sentiments of society. Capitalism is the
ruling power. The capitalist is lord and master of the proletarian,
whose labor power he buys as a commodity to be applied and made
use of, at a price that oscillates according to supply and demand
and the cost of production, as with every other commodity. But the
capitalist does not buy labor power “to please God,” or to render a
service to the workingman--as he sometimes seeks to present it--but
to obtain surplus value by it, which he pockets in the form of
profit, interest and rent. This surplus value squeezed out of the
workingman--inasmuch as it is not spent by the employer for his
personal enjoyment--is crystallized into capital, and enables him
steadily to enlarge his plant, to improve the process of production,
and to employ more labor power. Thereby again he becomes enabled
to encounter his weaker competitor, as a horseman, clad in armor,
might encounter an unarmed pedestrian, and to destroy him.
This unequal struggle is developing more and more in all domains,
and woman, furnishing the cheapest labor power, beside the child,
plays an important part in this struggle. The result of these
conditions is, that the line of demarcation becomes sharper between
a relatively small number of powerful capitalists and the great mass
of non-possessors of capital, who depend upon the daily sale of
their labor power. With this development the position of the middle
classes is becoming more and more unfavorable.
One line of industry after another, where until recently the small
manufacturers predominated, are being taken hold of by capitalistic
enterprise. The competition of the capitalists among themselves
compels them constantly to seek new realms to be exploited. Capital
goes about “like a roaring lion seeking something to devour.” The
small men are ruined, and if they do not succeed in finding some other
field of activity--which is becoming increasingly difficult--they
sink down into the class of wage-workers. All attempts to prevent
the decline of handicraft and the middle class by means of laws and
institutions that have been taken from the shelves of the past, prove
useless. They may deceive one or another for a little while in regard
to his true position, but soon the delusion is dispelled by the
force of facts. The process of absorption of the small ones by the
great ones is becoming clearly evident to all with the unrelenting
force of a natural law.
In what manner the social structure of Germany has been transformed
during the brief period of twenty-five years--from 1882 to 1895 and
from 1895 to 1907--that may be seen by a comparison of the census
figures from these years, as shown by the following table:
KEY
Agr: Agriculture
Ind: Industry
Com: Commerce and Traffic
Dom: Domestic service
Pub: Public service and learned professions
Noo: No occupation
Tot: Total
====+====================================+=====================
| Persons gainfully employed | Increase (+) or
| in principal calling | decrease (−)
+------------------------------------+ since 1882
| 1882 1895 1907 |
----+------------------------------------+---------------------
Agr | 8,236,496 8,292,692 9,883,257 | + 1,646,761 = 19.89
Ind | 6,396,465 8,281,220 11,256,254 | + 4,859,789 = 75.98
Com | 1,570,318 2,338,511 3,477,626 | + 1,907,308 = 121.46
Dom | 397,582 432,491 477,695 | + 74,113 = 18.63
Pub | 1,031,147 1,425,961 1,738,530 | + 707,383 = 68.56
Noo | 1,354,486 2,142,808 3,404,983 | + 2,050,497 = 151.40
--+------------------------------------+---------------------
Tot | 18,986,494 22,913,683 30,232,345 | +11,245,851 = 53.95
----+------------------------------------+---------------------
====+====================================+=====================
| Persons gainfully employed | Increase (+) or
| including their families | decrease (−)
+------------------------------------+ since 1882
| 1882 1895 1906 |
----+------------------------------------+---------------------
Agr | 19,225,455 18,501,307 17,681,176 | − 1,544,279 = 18.18
Ind | 16,058,080 20,253,241 26,386,537 | +10,328,457 = 64.25
Com | 4,531,080 5,966,836 8,278,239 | + 3,747,159 = 82.69
Dom | 938,294 886,807 792,748 | − 145,546 = 15.57
Pub | 2,222,982 2,835,014 3,407,126 | + 1,184,144 = 53.33
Noo | 2,246,222 3,327,069 5,174,703 | + 2,928,481 = 130.36
--+------------------------------------+---------------------
Tot | 45,222,113 51,760,284 61,720,528 | +19,878,066 = 34.27
----+------------------------------------+---------------------
These figures show that during the twenty-five years referred to, a
considerable shifting of the population and its occupations has taken
place. The population employed in industry, commerce and traffic
has increased at the expense of the agricultural population. Almost
the entire increase in population--6,548,171 from 1882 to 1895,
and 9,950,245 from 1895 to 1907--has been absorbed by the former.
Although the number of persons gainfully employed in industry as
their principal calling has increased, this increase has not kept
pace with the general growth of the population, and the number of the
members of the families of persons so employed has even decreased
by 1,544,279 = 8 per cent.
Industry (including the building trades and mining), commerce and
traffic, present a different aspect. Here the number of persons
gainfully employed and their families have considerably increased;
in fact, they have increased more rapidly than the population. The
number of persons employed in industry exceeds the number of persons
employed in agriculture by 1,372,997 = 15 per cent. The number of
the members of their families exceeds the number of the members of
families of persons employed in agriculture by 8,705,361 = 49 per
cent. The numbers of persons employed in commerce and traffic,
together with their families, show a still greater increase.
~The result is that the agricultural population, which is the real
conservative portion of the population and forms the mainstay of the
old order of things, is being repressed more and more and overtaken
by the population engaged in industry, commerce and traffic.~ That
the number of persons engaged in learned professions and their
families have increased likewise, does not alter these facts. The
strong increase in the number of persons having no occupation and
their families is due to the growing number of persons living on
their rents, including accident, invalid and old-age insurance, the
greater number of persons dependent on charity, students of all sorts,
and inmates of poorhouses, hospitals, insane asylums and prisons.
Another characteristic fact is the slight increase in the number
of persons employed in domestic service and the direct decrease in
the number of servants. This shows, firstly, that fewer persons can
afford to employ domestic help; it shows furthermore that proletarian
women who strive for greater independence, like this profession less
and less.
In 1882 the number of persons engaged in agriculture as their principal
calling constituted 43.38 per cent. of persons gainfully employed;
in 1895, 36.19 per cent., and in 1907 only 32.69 per cent. The
agricultural population--including the families of those gainfully
employed in agriculture--in 1882 constituted 42.51 per cent. of
the entire population; in 1895, 35.74 per cent., and in 1907 only
28.65 per cent. Those employed in industry as their principal calling
constituted, in 1882, 33.69 per cent. of the entire population; in
1895, 36.14 per cent., and in 1907, 37.23 per cent. Including their
families, they constituted 35.51 per cent. in 1882; 39.12 in 1895,
and 42.75 in 1907. The following figures show the percentage of
persons employed in commerce and traffic:
Persons employed. Including their families.
1882 8.27 10.02
1895 10.21 11.52
1907 11.50 13.41
We see, then, that in Germany, at present, 56.16 per cent. of the
population (in Saxony even 74.5 per cent.) depend upon industry and
commerce, and that not more than 28.65 per cent. (in Saxony only
10.07 per cent.) are engaged in agriculture.
2.--Increasing Pauperization.--Preponderance of Large Industrial
Establishments.
It is also important to state how the population employed in gainful
occupations is divided among independent workers, employes and
laborers, and what proportion of each of these is furnished by
either sex. This information may be gathered from the table on the
following page.
KEY
Agr: Agriculture
Ind: Industry
Com: Commerce
Alt: Altogether
M : Male
F : Female
T : Total
=====+=================================+============================
| Independent Persons | Employees
+---------------------------------+----------------------------
| 1882 1895 1907 | 1882 1895 1907
-----+---------------------------------+----------------------------
Agr: | |
M | 2,010,865 2,221,826 2,172,740 | 60,763 78,066 82,548
F | 277,168 346,899 328,234 | 5,881 18,107 16,264
--+---------------------------------+----------------------------
T | 2,288,022 2,568,725 2,500,974 | 66,644 96,173 98,812
| |
Ind: | |
M | 1,621,668 1,542,272 1,499,832 | 96,807 254,421 622,071
F | 579,478 519,492 477,290 | 2,269 9,324 63,936
--+---------------------------------+----------------------------
T | 2,201,146 2,061,764 1,978,122 | 99,076 263,745 686,007
| |
Com: | |
M | 550,936 640,941 765,551 | 138,387 249,920 426,220
F | 150,572 202,616 246,641 | 3,161 11,987 79,689
--+---------------------------------+----------------------------
| 701,508 843,557 1,012,192 | 141,548 261,907 505,900
| |
Alt: | |
M | 4,183,469 4,405,039 4,338,123 | 295,957 582,407 1,130,839
F | 1,007,218 1,069,007 1,052,165 | 11,311 39,418 159,889
--+---------------------------------+----------------------------
T | 5,190,685 7,474,046 5,390,288 | 307,268 621,825 1,290,728
-----+---------------------------------+----------------------------
=====+==================================
| Wage-workers
+----------------------------------
| 1882 1895 1907
-----+----------------------------------
Agr: |
M | 3,629,959 3,239,646 3,028,983
F | 2,251,860 2,388,148 4,254,488
--+----------------------------------
T | 5,881,819 5,627,794 7,283,471
|
Ind: |
M | 3,551,014 4,963,409 7,030,427
F | 545,228 992,302 1,562,698
--+----------------------------------
T | 4,096,243 5,955,711 8,593,125
|
Com: |
M | 582,885 836,042 1,354,482
F | 144,377 365,005 605,043
--+----------------------------------
| 727,262 1,201,047 1,959,525
|
Alt: |
M | 7,763,858 9,071,097 13,694,160
F | 2,941,455 3,745,455 4,161,961
--+----------------------------------
T |10,705,324 12,816,552 17,856,121
-----+----------------------------------
This table shows that the number of persons independently engaged in
agriculture increased by 280,692 from 1882 to 1895, an increase of
12.5 per cent.; but that from 1895 to 1907 it decreased by 67,751,
so that from 1882 to 1907 the number of independent persons in
agriculture has increased by only 212,941 = 9.2 per cent. On the
other hand the number of workingmen that had decreased by 254,025
= 4.3 per cent., from 1882 to 1895, has, since 1895, increased by
1,655,677 = 29.4 per cent. Upon examining this increase more closely
we find that it is mainly due to female members helping to support the
families. (Among the total increase of 1,990,930 are 170,532 male and
1,820,938 female.) When we take only the rural day-laborers and help
into consideration, we find that the male workers have ~decreased~
by 381,195 persons, while the female workers have increased by
45,942 persons. Altogether this shows the considerable decrease of
335,253 persons among agricultural laborers. In agriculture, then,
not only the number of independent persons, but also the number of
help and day laborers has decreased. The increase in the agricultural
occupation, compared to the previous census, is due to the greatly
increased assistance from members of the families, especially the
female members.
The industrial occupation presents a different picture. In a term
of 25 years the persons independently employed decreased by 234,024
= 10.6 per cent., while the population increased by 36.48 per cent.
Mechanics, working alone or working with two assistants, have mainly
disappeared. The number of wage-workers has increased by 1,859,468
from 1882 to 1895, and by 2,637,414 from 1895 to 1907. When we count
only the wage-workers proper, not including the members of their
families who assist at their work, we find that their number has
increased from 5,899,708 in 1895 to 8,460,338 in 1907. Three-quarters
of all persons employed in industrial occupations are wage-workers
(75.16 per cent.).
In commerce and trade we find the opposite ratio. Here the number of
persons independently engaged has greatly increased, but the number
of employes and workers has increased likewise. The number of women
independently engaged in commerce has increased especially; they
chiefly are either widows who seek to make their living as small
dealers, or married women who endeavour to increase their husbands’
income. The number of persons independently engaged in commerce
increased by 310,584 = 44.3 per cent., from 1882 to 1907. But the
number of employes and wage-workers has increased still more (by
364,361 = 258.8, and by 1,232,263 = 169.4 per cent.). This shows
how tremendously commerce and trade have developed, particularly
from 1895 to 1907. There are almost twice as many employes as prior
to that period, and among these almost six times as many female
employes.
During the period from 1882 to 1907 the entire number of persons
independently engaged in the three occupations increased by 5.7 per
cent.; it did not keep pace then with the increase in population
(36.48 per cent.). The number of employes increased by 325.4 per
cent., and the number of wage-workers by 39.1 per cent. We must
furthermore take into consideration that among 5,490,288 independent
persons, many lead an entirely proletarian existence. Among the
2,086,368 manufactories enumerated there were no less than 994,743
small producers who worked alone and 875,518 who did not employ
over five assistants. In commerce there were, in 1907 among 709,231
establishments, no less than 232,780 maintained by the owners without
assistance. There were, besides, 5240 porters, errand-boys, etc.,
and thousands of insurance agents, book agents, etc.
Another point to be considered is that the number of independent
persons in the three occupations does not coincide with the number
of establishments. If a firm, for instance, has dozens of branch
establishments, as is frequently the case in the tobacco trade, or
if a concern runs a number of stores, each branch is enumerated
as an individual establishment. The same is true of industrial
enterprises, when, for instance, a machine factory also runs an
iron foundry, a carpenter shop, etc. The figures then do not convey
sufficient information regarding the concentration of capital on
the one hand and the standard of living on the other. And yet, in
spite of all these deficiencies, the results of the latest census of
June 12, 1907, present a picture of the most powerful concentration
of capital in industry, commerce and traffic. They show that, hand
in hand with the industrialization of our entire economic system,
a concentration of all the means of production into a few hands is
rapidly progressing.
The independent small manufacturers and traders working alone, of
whom there still were 1,877,872 in 1882, have become fewer again
since 1895. In 1895, 1,714,351 were enumerated, and in 1907 only
1,446,286; a decrease of 431,586 = 22.9 per cent. The number of small
producers and dealers has rapidly decreased from census to census.
In 1882 it was 59.1 per cent.; 1895, 46.5, and, 1907, only 37.3 per
cent. of all persons gainfully employed. At the same time the number
of large manufacturing and commercial enterprises has grown from
22.0 to 29.6, and (1907) to 37.3 per cent. From 1895 to 1907 the
number of persons employed by small concerns increased by 12.2 per
cent.; the number of those employed by concerns of medium size, by
48.5 per cent., and the number of those employed by large concerns,
by 75.7 per cent. Among 5,350,025 persons industrially employed
in 1907, the by far largest group is employed by large concerns,
while, in 1882, a greater number of persons were small, individual
producers. In the seven following branches of industry the large
concerns predominate, employing more than half of all persons engaged
in these industries. Of each 100 persons the following percentage
were employed by large concerns:
Mining 96.6 per cent.
Machine manufacture 70.4 “
Chemical trades 69.8 “
Textile trades 67.5 “
Paper trades 58.4 “
Industry of pottery and earthenware 52.5 “
Industry of soaps, fats and oils 52.3 “
In the other groups industry on a large scale already predominated
in 1895, and everywhere its predominance has been still further
increased. (In the malleation of metals, 47.0; in the polygraphic
trades, 43.8; in traffic, 41.6, and in the building trades, 40.5 per
cent. of all persons were employed by large concerns.) We see, then,
that in almost every branch development has favored industry on a
large scale.
The concentration of manufacture and the concentration of capital,
which are one and the same thing, take place particularly rapidly
wherever capitalistic production obtains full control. Let us, for
instance, consider the brewing industry. In the German brewery-tax
district, excluding Bavaria, Wurtemberg, Baden and Alsace-Lorraine,
there were:
Number of Producing 1000
breweries. [Commercial] hectolitres of beer.
1873 13,561 10,927 19,655
1880 11,564 10,374 21,136
1890 8,969 8,054 32,279
1900 6,903 6,283 44,734
1905 5,995 5,602 46,264
1906 5,785 5,423 45,867
1907 5,528 5,251 46,355
So the number of breweries decreased, from 1873 to 1907, by 8033
= 59.3 per cent.; that of breweries decreased by 5676 = 51.9 per
cent., but the production of beer increased by 26,700,000 hectolitres
= 135.7 per cent. This signifies a downfall of the small concerns and
a tremendous growth of the large concerns, whose productivity has been
multiplied. In 1873, 1450 hectolitres and in 1907 8385 hectolitres
were produced by each brewery. It is the same wherever capitalism
rules.
Similar results are shown by the German coal-mining industry and other
mining industries of the German Empire. In coal mining the number
of concerns that amounted to an average of 623, from 1871 to 1875,
dwindled down to 406, in 1889. But at the same time the production of
coal rose from 34,485,400 tons to 67,342,200 tons, and the average
number of persons employed increased from 127,074 to 239,954. The
following table illustrates this process of concentration in the
mining of mineral coal and brown coal, until 1907:
Mineral Coal Brown Coal
Number Number
Year of Average No. Quantity of Average No. Quantity
Concerns Employed 1000 tons Concerns Employed 1000 tons
1900 338 413,693 109,290.2 569 50,911 40,498.0
1905 331 493,308 121,298.6 533 54,969 52,512.1
1906 322 511,108 137,117.9 536 58,637 56,419.6
1907 313 545,330 143,185.7 535 66,462 62,546.7
We see, then, that, in the production of mineral coal since the
seventies, the number of concerns has decreased by 49.8 per cent.,
while the number of wage-workers employed has increased by 216.9 per
cent., and the output even by 420.6 per cent. The following table
shows the development in the entire mining industry:
Year Number of Average number Quantity
concerns employed 1000 tons
1871–75 3,034 277,878 51,056.0
1887 2,146 337,634 88,873.0
1889 1,962 368,896 99,414.0
1905 1,862 661,310 205,592.6
1906 1,862 688,853 229,146.1
1907 1,958 734,903 242,615.2
Here the number of concerns has decreased by 35.5 per cent., while
the number of wage-workers employed increased by 164.4 per cent.,
and the output, 374.5 per cent. The number of employers had grown
smaller but wealthier, and the number of proletarians had greatly
increased.
In the industrial districts of the Rhine and Westphalia there still
were 156 mines in 1907, but 34 of these controlled more than 50 per
cent. of the output. Although the census enumerates 156 mines, the
coal trust, which controls the mines with but a few exceptions, had
only 76 members. To such extent the process of concentration has
developed. According to the reports of February, 1908, the output
of the coal trust amounted to 77.9 million tons of coal.[194]
In 1871 there were 306 blast-furnaces, employing 23,191 laborers and
producing 1,563,682 tons of crude iron. In 1907, 303 blast furnaces,
employing 45,201 laborers, produced 12,875,200 tons. In 1871 crude
iron was produced at the rate of 5,110 tons for every blast-furnace;
in 1907 at the rate of 42,491 tons for every blast-furnace. According
to a list published in “Steel and Iron,” in March, 1896, only one
blast-furnace in Germany was able to produce crude iron at the rate
of 820 tons in 24 hours. But in 1907 there were 12 blast-furnaces
that could, within 24 hours, produce 1000 tons, and more.[194]
In 1871–1872, 311 factories in the beet sugar industry consumed
2,250,918 tons of beets. In 1907–1908, 365 factories consumed
13,482,750 tons. The average consumption of beets per factory was
7,237 tons during 1871–1872, and 36,939 tons during 1907–1908. This
mechanical revolution does not take place in industry alone, but also
in commerce and traffic. The following table shows the development
of German maritime trade:
Year Sailing vessels Regist’d tonnage Number of crew
1871 4,372 900,361 34,739
1901 2,272 525,140 12,922
1905 2,294 493,644 12,914
1908 2,345 433,749 12,800
1909 2,361 416,514 12,844
Less than in 1871 2,011 less 483,847 less 21,895
Sailing vessels, then, are considerably diminishing, and among those
still existing the registered tonnage and the number of the crew
is decreasing. In 1871 there were, for each sailing vessel, 205.9
registered tonnage and 7.9 members of the crew. In 1909 each sailing
vessel had an average of but 176.4 registered tonnage, and only
5.4 members of the crew German maritime trade by steam navigation
presents a different aspect, as the following table shows:
Ocean-going
Year steamships Regist’d tonnage Number of crew
1871 147 81,994 4,736
1901 1,390 1,347,875 36,801
1905 1,657 1,774,072 46,747
1908 1,922 2,256,783 57,995
1909 1,953 2,302,910 58,451
More than in 1871 1,806 2,221,006 53,715
Not only had the number of steamships greatly increased, their
tonnage had increased more still, but, in proportion to this increase
the number of the crew had decreased. In 1871 a steamship had an
average tonnage of 558 tons and a crew of 32.1 men. In 1909 it had
an average freight capacity of 1230 tons and a crew of only 29 men.
The rapid increase of motor power employed is another symptom of
capitalistic development. In the territory of the German “Zollverein,”
according to Viebahn, 99,761 horse-power were used in 1861.[195]
In 1875, in Germany, factories employing more than five persons,
used, 1,055,750 horse-power, and in 1895, 2,933,526 horse-power,
almost three times the number used in 1875. Railroads, street cars
and steamboats are not contained in this list.
The following list shows the amount of horse-power used in Prussia:
Stationary Movable boilers and
steam engines traction engines
1879 888,000 47,000
1896 2,534,900 159,400
1900 3,461,700 229,600
1905 4,684,900 315,200
1906 4,995,700 334,400
1907 5,190,400 363,200
So the amount of horse-power employed in Prussia in 1907 is six
times greater than in 1879. How tremendously industry has developed
since the census of 1895 can be seen by the fact that the number of
stationary engines in Prussia has increased by 35 per cent. from
1896 to 1907. The productiveness of the machines has increased by
105 per cent. during this period. While, in 1898, 3,305 steam engines
of 258,726 horse-power served to run dynamos, there are 6,191 of
954,945 horse-power in 1907. That is an increase of 87 and 269 per
cent.[196] The following figures show the increased application of
steam-power in the most important industries (expressed in horsepower):
Industry 1879 1897 1907
Mining and foundries 516,000 1,430,000 2,284,000
Masonry and bricks 29,000 132,000 255,000
Metallurgy 23,000 57,000 113,000
Machines 22,000 61,000 329,000
Textile 88,000 243,000 323,000[197]
Notwithstanding this fabulous development of the productive powers
and the immense concentration of capital, attempts are still being
made to deny these truths. Such an attempt was made at the eleventh
session of the International Institute of Statistics in Copenhagen in
August, 1907, by the French economist, Ives Guyot. On the basis of
careless statistics, he moved to abolish the word “concentration” from
statistics. Among others, Carl Buecher answered him as follows: “An
absolute increase in the number of manufactories may easily coincide
with a concentration of same. Wherever the census enumerates individual
establishments, it is unavoidable that many should be counted twice.
A bank with 100 trust-funds is counted as 101; a brewery that has
opened and fitted out 50 saloons, is counted as 51 establishments. The
results of such statistics prove nothing in regard to the phenomenon
in question. Investigation so far shows that agriculture alone does
not ~seem~ to be subjected to the process of concentration. It is
evident in mining, commerce, transportation, building trades and
insurance. In industry it is difficult to recognize, because every
civilized nation in a healthy state of development must present an
extension of industrial production, for the following four reasons:
1. Because occupations that were formerly domestic in character have
been taken over by industry. 2. Because natural products have been
replaced by industrial products (wood by iron; woad, madder and indigo
by tar-colors, etc.). 3. Because of new inventions (automobiles).
4. Because of the possibility of exportation. For these reasons
concentration on a large scale takes place in industry without any
diminution in the number of establishments, even with an increase
in same. Wherever industry creates commodities ready for use of a
typical character, the destruction of the independent small concerns
is inevitable. The capitalistic forms of production are accordingly
rapidly developing in the most important lines of industry. It is
not wise to oppose the Socialists where they are right, and they
are undoubtedly right in their assertions in regard to increasing
concentration.”[198]
The same aspect presented by the economic development of Germany
is presented by all the industrial states of the world. All the
civilized states endeavour to become industrial states more and
more. They not only seek to manufacture articles of industry to
supply their own demand, but also to export them. Therefore we not
only speak of a national market, but also of the ~world market~. The
world market regulates the prices of countless articles of industry
and agriculture and controls the social status of the nations. That
industrial realm which has attained the greatest importance in
regard to the relations of the world market, is the North American
Union. Here the main impetus is given whereby the world market and
bourgeois society are revolutionized. The census of the last three
decades showed the following figures:
Amount of capital invested in industry.
1880 2,790,000,000 dollars
1890 6,525,000,000 “
1900 9,813,000,000 “
Value of Industry.
1880 5,369,000,000 dollars
1890 9,372,000,000 “
1900 13,000,000,000 “
The United States, accordingly, is the leading industrial country of
the world. Its exportation of products of industry and agriculture
increase with each year, and the tremendous accumulations of capital
that are a natural result of this development seek investment beyond
the boundaries of the country, and influence the industry and
trade of Europe to a marked degree. It is no longer the individual
capitalist who is the motive power underlying this development. It
is the group of captains of industry, the trust, that is bound to
crush the most powerful individual enterprise, wherever it chooses
to turn its activities. What can the small man amount to in the face
of such development, to which even the great must yield?
[194] Otto Hué--History of the development of the mining industries.
[195] A. Hesse--Statistics of Trade.
[196] A. Hesse--Statistics of Trades.
[197] Prof. Dr. S. Reyer Kraft--Economic, Technical and Historical
Studies in the Development of the Power of States.
[198] Bulletin de l’institut international de statistique. Copenhagen,
1908.
3.--Concentration of Wealth.
It is an economic law that, with the concentration of industry and
its increased productivity, the number of workers employed relatively
decreases, while the wealth of a nation, in proportion to the entire
population, becomes concentrated in fewer hands. That can be clearly
seen by the distribution of the income in various civilized countries.
Of the larger German states, Saxony possesses the oldest and best
statistics on the income tax. The present law is in force since 1879.
But it is advisable to take a later year, because during the first
years the assessments were, on an average, too low. The population
of Saxony increased by 51 per cent. from 1880 to 1905. The number of
persons assessed increased by 160 per cent. from 1882 to 1904; the
assessed income by 23 per cent. Until the beginning of the nineties
an income up to 300 marks per annum was exempt from taxation, after
that up to 400 marks. In 1882 the number of persons exempt from taxes
were 75,697 = 6.61 per cent.; in 1904, 205,667 = 11.03 per cent. It
must be noted that, in Saxony, the incomes of wives and of members
of the family under 16 are added to the income of the husband and
father. The taxpayers having an income from 400 to 800 marks formed
48 per cent. of those assessed in 1882; in 1904 only 43.81 per cent.
A part of them had advanced into a class with a higher income. The
average income of the taxpayers of this class had increased by 37 per
cent--from 421 to 582 marks--during this period, but still remained
behind the average of 600 marks. The taxpayers having an income from
800 to 1250 marks formed 12 per cent. of those assessed in 1882,
and 24.38 per cent. in 1904. But those with an income from 1250 to
3300 marks formed 20 per cent. in 1882 and only 16.74 per cent. in
1904. In 1863 Lassalle computed that only 4 per cent. of all incomes
in Prussia were over 3000 marks annually. When we consider that, in
the meantime, rents, taxes and the cost of living have increased,
and that the demands in regard to the standard of living have grown,
it becomes evident that the position of the masses has relatively
scarcely improved. The medium incomes of from 3,400 to 10,000 marks
in 1904 formed only 3.24 per cent. of those assessed, and the incomes
of over 10,000 marks less than 1 per cent. The number of taxpayers
with incomes from 12,000 to 20,000 marks, 0.80 per cent. The number
of incomes of over 12,000 marks has increased from 4,124, in 1882,
to 11,771, in 1904; that is, by 188 per cent. The highest income in
1882 was 2,570,000 marks; in 1906, 5,900,600 marks. These figures
show the following facts: The lower incomes have increased somewhat,
but in many cases this increase has been more than equalized by the
increased cost of living. The middle classes experienced the least
improvement; but the number and the income of the richest people
show the greatest increase. Accordingly the class extremes became
more marked.
In his investigations of the distribution of income in Prussia from
1892 to 1902, Professor Adolf Wagner has ascertained the following
facts. He divides the population of Prussia into three large groups:
The lower group (lowest up to 420 marks; medium, 420 to 900; highest,
900 to 2,100); the middle group (lowest, 2,100 to 3,000; medium,
3,000 to 6,000; highest, 6,000 to 9,500 marks); the upper group
(lowest from 9,500 to 30,500; medium, 30,500 to 100,000, and highest
over 100,000). The entire income is divided almost equally among
these three groups. The 3.51 per cent. of the upper group control
32.1 per cent. of the entire income. The lower group, including
the 70.66 per cent. of those exempt from taxation, also controls
an income of 32.9 per cent. of the entire income; and the middle
group, with 25.83 per cent. controls 34.9 per cent. of the entire
income. If we take into consideration only those incomes that are
subject to taxation, we find that all those having an income from
900 to 3000 marks, who formed 86.99 per cent. of those enumerated
in 1892, and 88.04 per cent. in 1902, controlled over half of the
assessable income, 51.05 per cent., in 1892, and 52.1 per cent.
in 1902. Incomes of over 3000 marks, which formed, respectively,
13 and 12 per cent. of those enumerated, controlled about 49 per
cent. of the entire assessable income in 1892 and 48 per cent. in
1902. The average income of the small taxpayers throughout Prussia
amounted to 1374 in 1892 and to 1348 in 1902; it had, accordingly,
diminished to 1.89 per cent. On the other hand the average income
of the large taxpayers has increased from 8,811 marks, in 1892, to
9,118 marks, in 1902, or by 3.48 per cent. Upon the upper group,
which formed only 0.5 per cent. of all those enumerated in 1892
and 0.63 per cent. in 1902, 15.95 percent. of the entire income
devolved in 1892, and 18.37 per cent. in 1902. The increase is
slightest with the lowest and medium class of the middle group. It
is somewhat greater with the highest class of the lower group. But
it is greatest and increasingly great from class to class, with the
highest class of the middle group and with the entire upper group.
The greater the income of a group of those enumerated, the richer
they are; the more, accordingly, their number relatively increases.
The number of those having high and highest incomes increases, who,
on an average, also attain increasingly large incomes. In other
words, a growing concentration of incomes takes place, not only
among particularly rich individuals, but among the economically
high and highest group of the population, that is rapidly growing
and yet comprises a relatively small number. “This shows that the
modern economic development has indeed been favorable to the entire
population by increasing the income and by increasing the number of
members of each economic-social class, but that the distribution
has been a very uneven one, the rich being mostly favored, then the
lower classes, and the middle class least. It shows, accordingly,
that the social class differences, inasmuch as they depend upon the
size of the income, have increased.”[199]
The Prussian income-tax assessments of 1908 show that there were
104,904 taxpayers with an income of more than 9,500 marks, representing
a total income of 3,123,273,000 marks. Among these were 3,796 with
an income of more than 100,000 marks, representing a total income
of 934,000,000 marks; 77 were enumerated with an income of more
than a million. The 104,904 taxpayers, or 1.78 per cent., with an
income of more than 9,500 marks, represented the same total income
as the 3,109,540 (52.9 per cent.), with an income of from 900 to
1,350 marks.
In Austria about 24 per cent. of the assessed net income devolved
upon approximately 12 to 13 per cent. of the taxpayers having incomes
of from 4,000 to 12,000 crowns. If the incomes up to 12,000 crowns
are taken together, this group comprises over 97 per cent. of the
taxpayers and 74 per cent. of the income. ~The remaining 3 per cent.
of the taxpayers control 26 per cent. of the assessed income.~[200]
The minimum exempt from taxation is higher in Austria than in
Prussia--1,200 crowns, or 1,014 marks. The small taxpayers having an
income of from 1,200 to 4,000 crowns formed 84.3 per cent. of all
taxpayers in 1904. The number of richest persons having an ~income
of more than 200,000 crowns was 255 in 1898, and in 1904 it was 307,
or 0.032 per cent. of all taxpayers~.
In Great Britain and Ireland, according to L. G. Chiozza Money,
half of the national income (over 4,150,000,000 dollars) belongs to
one-ninth of the population. He divides the population into three
groups: The rich, with an income of more than 700 pounds sterling;
the wealthy, with an income of from 160 to 700 pounds sterling; and
the poor, with an income of less than 160 pounds sterling.
Including Income in
Class Persons families pounds sterling
Rich 250,000 1,250,000 585,000,000
Wealthy 750,000 3,750,000 245,000,000
Poor 5,000,000 38,000,000 880,000,000
According to these figures, more than one-third of the national income
belongs to one-thirtieth of the population. The investigations of
Booth for London, and of Rowntree for York, have shown that thirty
per cent. of the entire population lead an existence of direst
life-long poverty.[201]
For France, E. Levasseur compiled the following figures, on the basis
of the statistics of inheritance: “Two-fifths of the national wealth
are owned by 98 per cent. having less than 100,000 francs; about
one-third is owned by a small group of 1.7 per cent., and a quarter
of the entire national wealth belongs to a wee minority--0.12 per
cent.”[202]
All these figures show how great are the numbers of the non-possessing
masses, and how thin the strata of the possessing classes.
“The growing inequality,” says G. Schmoller, “is undeniable. It
cannot be doubted that the distribution of wealth in Central Europe,
from 1300 to 1900, became increasingly unequal, though of course the
inequalities varied in the different countries. Recent development,
with its growing class distinctions, has greatly increased the
inequalities in income and wealth.”[203]
This capitalistic process of development and concentration, that
takes place in all civilized countries, combined with the prevailing
anarchy in the methods of production, that so far was unable to
prevent the formation of trusts, inevitably leads to overproduction
and to an overstocking of the market. We enter upon the crisis.
[199] Adolf Wagner--A contribution to the method of statistics
of the national income and national wealth and further statistic
investigations of the distribution of the national income in Prussia,
founded on the new income statistics, 1892–1902. Gazette of the
royal Prussian bureau of statistics, 1904.
[200] F. L.--The distribution of the income in Austria. Leipzig,
1908.
[201] L. G. Chiozza Money. Riches and Poverty. London, 1908.
[202] E. Levasseur.
[203] G. Schmoller--Principles of Economics. Vol. II.