CHAPTER 31_Economics Volume II: Modern Economic Problems

SOME ASPECTS OF SOCIALISM

§ 1. The distribution of incomes. § 2. Distribution by force and by

status. § 3. Social effects of the right to transmit property. § 4.

Effects of the right to inherit property. § 5. Broader social effects

of inheritance. § 6. Limitations upon intestate inheritance. § 7. Some

merits of competition. § 8. Wide acceptance of competition. § 9.

"Economic harmonies" and discords. § 10. Competition modified by

charitable distribution. § 11. Competition modified by authoritative

distribution. § 12. Meanings of socialism. § 13. Philosophic socialism.

§ 14. Socialism in action. § 15. Origin of the radical socialist party.

§ 16. The two pillars of "scientific" socialism. § 17. Aspects of the

materialistic philosophy of history. § 18. Utopian nature of "scientific"

socialism. § 19. Its unreal and negative character. § 20. Revisionism and

opportunism in the socialist party. § 21. Alluring claims of

party-socialism. § 22. Growth and nature of the socialist vote. § 23.

Economic legislation and the political parties.

§ 1. #The distribution of incomes#. The great economic progress of the

past two centuries has been mainly in lines of technical production.

The developing natural sciences and mechanic arts have given men a

marvelously increased control over forces and materials. This has

multiplied the quantities of goods of most kinds at the disposal of

men, collectively considered. All men, with rare exceptions, have

been gainers; but the increased production has been very unequally

distributed among the members of the community. More and more

insistently the plea and the demand have been made for better methods

of distribution that will give to the masses of the people a larger

share of the goods produced. Production is largely a problem of the

technical arts; distribution is a problem of social economy.

Two aspects of distribution may be distinguished: functional

distribution is the attribution of value (yields) to wealth and labor

considered impersonally, as groups of productive agents; and personal

distribution is the actual movement of incomes into the control of

persons.[1] Personal incomes, whether monetary, real, or psychic,

are the sum of a number of elements. Some parts are due to services

performed by the person himself. When one combs his own hair he

is performing for himself a service that is a part of his income.

Benjamin Franklin said it was better to teach a boy to shave himself

than to give him a thousand dollars with which to pay barbers for a

life-time. Other parts of income are the uses and fruits of legally

controlled wealth; chance finds, as gifts of value or lost and

abandoned goods; goods assigned to one by authority; wealth inherited;

illegal gains by robbery; goods secured on credit; gifts either

of things or of services. The many methods by which incomes are

distributed to the persons making up a society may be grouped in the

following five general classes: force, status, charity, competition,

and authority. These will be discussed in due order.

§ 2. #Distribution by force and by status.# Distribution by force is

the most primitive mode of distribution. The stronger takes from the

weaker. Forceful distribution still persists in the form of crime,

and if we include fraud within the term it still affects an enormous

amount of income. The lawless take whatever they can, and the

supporters and officers of the law do what they can to check the acts.

Slavery is distribution by force, as is the levying of war indemnities

from a conquered people.

Distribution may be by status, or set rules and customs. In this case

men receive incomes that are independent of their efforts and outside

of their control. Distribution by status is guided neither by the

personal merit of the recipients nor by the value of their direct

services, but the merits and acts of men not living. Feudal society

was built on status. Men were born to certain privileges and

positions; they inherited property which could neither be bought

nor sold; they followed trades which could rarely be entered by any

outside of favored families. Caste in India and in other Oriental

countries regulates a large part of the life of the people.

This method still prevails to a greater extent in our society than is

usually recognized.[2] By public opinion and by prejudice, status is

still maintained in respect to the choice of occupations even where

the law has formally abolished it, as is seen in modern race problems,

in western countries to-day inheritance of property is the main legal

form of status and it shades off into other forms of distribution.

Private property must find its justification in social expediency.[3]

There is no feature of it that is more questioned than is the right of

inheritance.

§ 3. #Social effects of the right to transmit property.# The right

to transmit property by inheritance or by bequest may be judged with

reference to its effects upon the giver, upon the receiver, and upon

society at large. It is well to take these three points of view.

The right to dispose of property either during life or at death has

undoubtedly in many ways a good effect upon the character of men.

It stimulates the husband and father to provide for his wife and

children, and spurs others to continued economic activity. There is

a joy in giving, a joy in the power to bestow one's wealth upon those

one loves, or as one pleases. Much of the existing wealth probably

never would have been created if men had not had this right. But there

is a limit to the working of this motive, and other motives often are

more effective. Many a man after gaining a competence continues to

work for love of wealth and power in his own lifetime, as the miser

continues to toil for love of gold. When men without families die

wealthy, when men not having the slightest interest in their nearest

relatives labor till their dying days to amass wealth, it is evident

that the right to bequeath property has little to do with their

efforts. Love of accumulation and love of power in these cases supply

the motives. A more limited liberty to dispose of property at death

might still suffice, therefore, to call out the greater part of the

efforts now made to accumulate property.

§ 4. #Effects of the right to inherit property#. That the effects upon

the receiver of the property are good is somewhat more doubtful. It is

true that children reared in families of large incomes would be great

sufferers if plunged into poverty at the death of their parents. There

is much social justification for permitting families to maintain

an accustomed standard of comfort. Few would deny that provision by

parents to provide education and opportunity for their children is

commendable and desirable. But the evil effects of waiting for dead

men's shoes are proverbial. Many a boy's greatest curse has been his

father's fortune. Many a man of native ability waits idly for fortune

to come and lets opportunities for self-help slip by unheeded. The

world often exclaims over the failure of the sons of noted men to

achieve great things, for, despite confusing evidence, men still

have faith in biologic heredity. A too easy fortune saps ambition and

relaxes energy; and thus rich men's sons, if not most carefully and

wisely trained, are often made paupers in spirit, while the self-made

fathers think their boys have better opportunities than they

themselves enjoyed. The greater social loss is not the dissipated

fortunes, but the ruined characters. Andrew Carnegie said that it

would be a good thing if every boy had to start in poverty and make

his own way. Cecil Rhodes recorded in his will his contempt for the

idle, expectant heir.

§ 5. #Broader social effects of inheritance#. Inheritance has good

effects for the community insofar as it helps to secure efficient

management of wealth. If the son or relative has been in business with

the deceased, there is a reason that he should inherit the property,

and his succession to it makes the least disturbance to existing

business conditions. This consideration, however, has less weight as

the corporate form of organization becomes well nigh universal in

"big business." Every profligate son, every incompetent heir, is

an argument against the inheritance of property. It is to society's

interest that no able-bodied member should stand idle. Every child

should have presented to him the motive to use his powers in useful

ways. Moreover, many feel that the great fortunes now accumulating

through successive generations in the hands of a few families are a

danger to our free society, even if these fortunes should continue to

be well administered. There is a widespread feeling that the heredity

of great wealth is, like the heredity of political power, out of

harmony with the democratic spirit. Democracy wishes to see men and

individuals put to the test, not profiting forever by the deeds of

their forebears. This feeling is shared by those who cannot be charged

with radical prejudices. It was startling when a conservative body

of lawyers meeting in their state association in Illinois, passed

a resolution favoring moderate limits to inherited fortunes. Almost

every year sees bills of this purport introduced in the legislatures

and in Congress. Probably no one of many current radical proposals

is more widely favored than this, among men of otherwise conservative

social views. Tho sum most often mentioned as the proper limit is

$1,000,000, but in every case it is a sum larger than the fortune of

the person speaking.[4]

§ 6. #Limitations upon intestate inheritance#. A proposal less crude

and with strong reasons of social expediency in its favor is to

limit the right of intestate inheritance to persons that have been

in essential economic and social relations with the deceased. The

foregoing considerations show that the case for the right of gift in

the lifetime of the giver is strongest; that for the right of bequest

comes next. The man who has acquired wealth may usually be trusted to

decide who bear to him close social or personal relations, and to say

whose lives have in a measure furnished the motives of his activity.

But the right of intestate inheritance by distant relatives is one

that stands on weak social foundations. It is a survival from more

patriarchal conditions when, in the large family, or clan, the bond

of unity was very strong. A truer test to-day of the proper limits for

intestate inheritance is whether the wish to provide for these heirs

has furnished the motive for the producing and preserving of the

wealth. The claims of those nearest in blood and closest in personal

relations are strongest. Family affection and friendship form the

strongest of social ties, and it is socially expedient to cultivate

them. Motives for abstinence and industry must be strengthened. But

the same test shows that the zealous regard of the American law for

the rights of distant kinsmen in foreign lands, or in distant quarters

of this country, is irrational, and is unjust to the community where

the fortune was made. Public opinion tends strongly toward this idea.

Property rights as they exist are clearly seen not to be a product of

pure reason. They are the result of social evolution, of historical

accidents, of class legislation, and in many cases, of selfish

interests. Changing social conditions and ideas are bringing many

changes in law, and further changes must be expected to come, which

will reduce the influence of inheritance of property in fostering

status in distribution. Especially important are the increasing

application of the progressive principle to incomes and

inheritance,[5] and the development of insurance to put family savings

into the form of terminable annuities instead of capital sums.[6]

§ 7. #Some merits of competition#. The dominant method of distribution

to-day is that of competition.[7] This is not a mere accident, but

is a resultant of unending experimentation with different methods of

distribution carried on since the beginning of human society. A method

of distribution had to be found and retained that would work under

the conditions of human nature at each stage of social progress; and

competition, however imperfectly, has worked. It is evident from the

voices of praise and of blame that competition has its good and its

bad aspects. Let us observe first the good ones. Competition acts to

distribute the working force over the field of industry wherever it

is most needed. The remarkable (tho far from perfect) adjustment

of industry to the needs of each neighborhood is brought about by

individual motives, not by centralized authority. Wherever consumers

settle, stores are started and factories are built. Wherever work is

to be done, men come in about the right number to do it. It is not

mere chance that produces this result. The available skill is adjusted

to varying needs by the delicate measurement of the market rate of

wages. Two-sided competition gives a definite rule of price--the only

definite impersonal rule. The theoretical competitive price is the

standard to which things tend constantly to adjust themselves in an

open market.[8]

Competition is an essentially economic method as contrasted with the

legal and personal methods above and later described, because it

is impersonal and reducible to a rule of value. Distribution under

competition is made, not with reference to abstract ethical principles

or to personal affection, but to the value of the product. Each worker

strives to do what will bring him the largest return, and the price

others pay expresses their estimates of the service in that market.

Each seeking his own interest is led to make himself more valuable to

others. In most cases and in large measure, competition stimulates men

to sacrifice, to invention, to preparation; thus is zeal animated and

are efforts sustained. In the economic realm, as is now seen to be the

case in the biologic realm, competition of some effective kind is

an indispensable condition not only of progress but of life without

degeneration. Monopoly, as we have noted, never has ceased to

rest under the ban of Anglo-Saxon law, and therefore to exemplify

compulsory, as opposed to competitive distribution. A striking feature

of the competitive method is its decentralization. Each helps to value

the economic services of each. If one pays more for the services of

the singer than for those of the cook, it is not because one would

rather listen to the singing than to eat when starving, but because by

apportioning one's income one can get the singing and the eating too.

In the existing circumstances, the singer's services seem to the music

lover to be worth paying for, and he backs his opinion with his money.

So each is measuring the services of all others, and all are valuing

the services of each. It is distribution by valuation, and it is

valuation by democracy.

§ 8. #Wide acceptance of competition.# On purely abstract and _a

priori_ grounds competition cannot be accorded an ethical sanction, as

is sometimes assumed. But because of the qualities above outlined, and

because it meets in large measure the pragmatic tests, the competitive

rule of distribution appeals to all men (even to those who denounce

it) as having in many of its applications a moral character, as

compared with the other possible methods of distribution. Indeed,

the competitive rule is the only rule that does not involve either

personal and arbitrary judgment (force, charity, and authority) or

status. Even such measure of justification as is found in status (as

in property and inheritance laws) is traceable, in the long run, to

competition. The case for a limited application of status is based

upon its results in stimulating motives of effort and accumulation.[9]

When the rule of authority is applied to-day in the large field of

public regulation where _actual_ competition has become impossible,

almost the only guiding rule is _hypothetical_ competition. The

just rate is felt to be that which in the long run _would be_ just

sufficient to afford "normal" incomes to labor and to capital, to

call forth the necessary effort, skill, judgment, and forethought,

if competition _were_ at work, as it is not.[10] Only this rule

of hypothetical competition redeems these public rates from

arbitrariness, favoritism, and force.

§ 9. #"Economic harmonies" and discords.# Every truth in political

philosophy finds some exaggerated expression. Competition, as

compared with status and custom, has some notable merits; and when the

eighteenth century was throwing off some of the burdens inherited from

the more static Middle Ages, competition appeared to be a panacea for

all the ills of society.[11] The belief in the benefits of competition

and the virtues of economic freedom found its extremist expression

in the first half of the nineteenth century in the doctrine of "the

economic harmonies." According to this, if men are left entirely free

to do as their interests dictate, the highest efficiency and best

results for all will follow; the economic interests of all men are in

harmony. Corresponding with this doctrine is the economic policy of

extreme _laissez faire._

But experience has shown that the economic interests of the

individuals in a community are only partly very rarely are they

wholly, in harmony. There are three species of competition in every

market: that between sellers, that between buyers, and that between

sellers on the one hand and buyers on the other.[12] If at any point

free competition is hindered, even the disciple of economic harmony

must, from the very nature of his doctrine, expect a discordant

result. In reality competition is rarely quite complete on both sides,

and when it is not the weak usually suffer. Men do not start with fair

opportunities. All that they may be entitled to have under competition

may be so little that social sympathy seeks to better the results;

hence poor relief, public and private. Society as a whole has an

interest in the outcome of the individual's economic struggle.

It cannot see men starving or driven into crime. Moreover, when

competition is the rule of valuation, it, like all valuations,

partakes of the quality of those choosing--wise or foolish, good or

evil.[13] And tho competition is the rule of democracy in economics,

yet democracy cannot permit the economic vote of a vicious or of

a foolish group to stand, where the goods, services, and prices

resulting offend the prevailing public judgment and social conscience.

§ 10. #Competition modified by charitable distribution.# In practice

the competitive method of distribution always has been modified or

supplemented in varying degrees by the other methods. Important among

these is charitable distribution. Charitable is here used in its

original sense, as synonymous with benevolence and affection. First is

parental love, the root and type of all the forms of charity. There is

a complete lack of economic equivalence in the relation of parent and

child in early years. The helpless infant does nothing for the parent,

the parent gives all and does all for the child. Gradually, however,

the balance is regained; as the years go on, not only do children

repay in affection but in many cases they repay in material ways.

Especially in the factory districts and on the farm the child sooner

or later begins to reestablish the balance, becomes a worker, and

contributes to the family income as much as the cost of his support,

and finally more. A student of modern English town life has traced the

curve of poverty traversed by the average poor family as the children

are first an economic burden, and later an aid to their parents. In

the middle, or propertied, classes the children do not for many years

cease to be a financial burden to their parents, and in most eases the

economic balance is never reestablished. It is not to the parents, but

to the succeeding generation, that the debt is tardily paid.

Friendship widens the range of generosity and multiplies the mass of

gifts. Broad sentiments of humanity lead to gifts outside the range of

personal affection and personal interest, to the beggar on the street,

to institutions devoted to charity. In New York state alone a sum of

more than $20,000,000 a year is expended by institutional charities.

About $512,000,000 in public benefactions were given in the United

States by private donors in the year 1915, and in this respect that

year was not exceptional. An enormous and increasing body of property

is thus being year by year socialized, largely through bequests

from persons without direct heirs. Great public subscriptions to

the sufferers from great disasters, such as the Irish and the Indian

famines, the Chicago fire, the Galveston flood, the San Francisco

earthquake, the great European war, bespeak a widening generosity.

Religion impels to the building of churches, to the support of

priests, missions, and manifold religious undertakings. Charity in

this connection is the expression of a sentiment that varies from

the most intense personal, affection to the broadest and most general

humanitarian sentiment.

§ 11. #Competition modified by authoritative distribution.# Authority

is, after force, the oldest and was the earliest widely operative

method of distribution. It shades into force, status, and charity in

manifold ways, but it is essentially the assignment of a common, or

social, income to individuals by some person or persons chosen, or

accepted, by the society to perform this function. Thus it may be

distinguished from force, which takes for itself what belongs to

another; and from charity, which gives to another what belongs to

one's self; and from status, which transmits claims to income from one

generation to another by a fixed impersonal rule, not by a personal

judgment in the particular case.

Authoritative distribution is the dominant method in patriarchal

tribes, in communal societies, and in monastic and other religious

orders. Each person works at what he is commanded to do, and some one

in authority (patriarch, head of the community, father of the monastic

order) portions out the tasks and the rewards. In the family this rule

largely prevails, and even after the children have come to years of

discretion they not infrequently accept, from habit or affection, the

will of the parents, and give up their entire wages to receive back

a portion. The method of charitable distribution while the child is

young gradually changes to authoritative distribution after the child

becomes a worker. The untrained and indocile youth, however, is made

the subject of compulsory distribution.

The collection and distribution of taxes is by public authority. No

attempt is made to give back an exact equivalent to each taxpayer. The

money is taken and spent by authority. The new forms, or at least the

new extensions, of taxation, especially of incomes and inheritances

at progressive rates, are very important examples of authoritative

distribution.[14] The courts sometimes find themselves obliged to

apply the method of authoritative distribution, altho they do it

unwillingly. They try to confine their efforts to interpreting the

contracts men have voluntarily entered into, and they avoid, so far

as possible, the making of contracts or the fixing of rates.

Authoritative distribution is exemplified in the work of many

commissions appointed by law to fix rates or settle disputes, such as

boards of conciliation and arbitration and railway commissions.

§ 12. #Meanings of socialism.# Our reason for leaving to the last the

discussion of _authority_ as a method of distribution is not that it

appeared last in historical development, but that it now is the most

strongly advocated as an alternative of competition. One of the most

striking developments of opinion in the nineteenth century was that

favoring an increasing use of authority in distribution. This was

meant not merely to supplement and modify competition, but to displace

it completely, or (in the more moderate program) in large part. This

opinion, or plan, has appeared under a variety of names, the main ones

being communism, collectivism, social-democracy, and socialism, of

which the last name has just now the greatest vogue. Socialism is

a word of manifold meanings no one of which is generally accepted.

Discussion is therefore often a Babel of tongues.

Socialism designates (1) a social[15] philosophy (2) a mode of social

action, (3) a particular political party. There is thus philosophic,

active, and partisan socialism. Each of these may be taken either in

an absolute or in a more or less relative sense. The first meaning

is the most fundamental, the second less so, and the last the least

fundamental, but just now the most frequently used.

§ 13. #Philosophic socialism.# As a philosophy socialism is related

to social just as individualism is related to individual. Socialism

is faith in the group motive and group action rather than in

self-interest and competitive action. Instead of social philosophy we

may say social faith, or social ideals. This faith may be absolute,

or radical, to the rejection of all economic competition; or it may

be moderate, and leave more or less place for self-interest and

competition. Every man of conscience and of ideals has moods that

are socialistic (in this sense) and dreams of a world without toil,

competition, or poverty.

This social philosophy has taken form as "Christian Socialism" among

men of strong religious natures, in various religious denominations.

Great secular dreamers--Plato in his "Republic," Sir Thomas More, in

his "Utopia," Edward Bellamy, in "Looking Backward," William Morris,

in "News from Nowhere," and others--have painted beautiful pictures of

ideal economic states from which all of the great evils and problems

of our society have been banished.

§ 14. #Socialism in action.# Active socialism is group action in

economic affairs. This may be by private voluntary groups, as a club,

church, or trade union, or by a public group, or political unit of

government, which has therefore a compulsory character. The radical

kind of active socialism would be the ownership by government of all

the means of production and the conduct of all business, assigning

men, by authority, to particular work and granting them such incomes

as the established authority thought they deserved. This kind exists

nowhere. A moderate kind of active socialism is represented by each

separate case of public ownership or industry. Even public regulation

by authority, of the many kinds described in this volume, is touched

with a quality of active socialism. In this sense there can be more or

less of active socialism in a community; a state may be more or less

socialized in its economic aspects. An English Chancellor of the

Exchequer declared in the last decade of the nineteenth century, "We

are all socialists now." The ever-increasing sphere of the state[16]

gives to that statement to-day a larger, fuller meaning than when it

was uttered.

Socialism in action is of course always the expression of a more or

less socialistic philosophy shared by a majority of the people. This

great recent movement of socialization in industry is the expression

not of a radical but of a moderate social philosophy. It does not look

to the abolition, but only to the modification and limitation in

some directions, of private property and of competitive industry. The

spirit of this movement is opportunist, or experimental. It is ready

to try public action, but recognizes that it has difficulties and

limitations. The ultra-radical and the ultra-conservative alike

declare that these measures "logically" lead on to the complete

destruction of private property. But men find that they can warm their

hands without being "logically" compelled to thrust them into

the fire, and that they can quench their thirst without a growing

resolution to drink the well dry. When this governmental activity has

proceeded somewhat extensively and systematically in cities, as in

Great Britain, it is called municipal socialism; and in states, as in

Germany, it is called state socialism.

§ 15. #Origin of the radical socialist party.# Socialism in the

partizan sense is an actual political organization. Both in Europe

and in America such organizations have been designated as

"social-democratic," "socialist labor," or "labor" parties. Socialism

in this sense of a party organization, or movement, is very different

from a social philosophy. In its partizan phase socialism exhibits all

of the baffling variability and elusiveness that it does in its other

aspects. However, in its printed program the socialist party sets

forth both a socialist philosophy and an ideal of active socialism in

their most radical forms.

Modern political socialism traces its origin directly to the most

radical of German social philosophers, Marx, Engels, and Lassalle.

Karl Marx (1818-1883), preeminently the philosophic leader of the

movement, sought to give a solider foundation of reason to the

somewhat romantic socialist philosophy current in his day. His own

doctrine, first set forth connectedly[17] in the Communist Manifesto

in 1848, he called Communism. This has come to be called by his

followers, "scientific socialism." "Scientific" was meant to emphasize

the contrast with "Utopian" socialism, as Marx and Engels somewhat

scornfully characterized the older communist philosophy, romances of

the ideal state, and attempts to found and conduct small communistic

states.

§ 16. #The two pillars of "scientific" socialism.# Scientific

communism was to be based upon two immovable pillars. The one was

"the labor theory of value," by which all profits and incomes

from investment were shown to be robbery of the wage-workers.[18]

"Capital," that is, the ownership of the means of production, was

declared to be the instrument of this "exploitation." The other

foundation stone was "the materialistic philosophy of history," that

is, the explanation of all the intellectual, cultural, and political

changes of mankind from the side of the material economic conditions

as causes. As Engels expressed it, "The pervading thought ... that the

economic production with the social organization of each historical

epoch necessarily resulting therefrom forms the basis of the political

and intellectual history of this epoch." This doctrine denies that,

in an equally valid sense, biological changes in brain, and cultural

changes in science, arts, and education, cause the mechanical

inventions and improved processes and thus alter the form bf economic

production.

§ 17. #Aspects of the materialistic philosophy of history#. Marx's

general formula of economic materialism had three minor propositions

or corollaries: (a) The doctrine of the _class conflict_; all history

is a record of the class struggle between those who have property,

the ruling classes within the nations, and those who have not, the

oppressed working class, (a conception of history blind to most of the

great international conflicts). The class conflict was declared to

be more sharply marked and bitter than ever before; "the entire human

society more and more divides itself into two great hostile camps,

into two great conflicting classes, _bourgeoisie_ and proletariate."

(b) The doctrine of _increasing misery_; the conditions before

described must cause the steadily increasing degradation of the

masses. (c) The _catastrophic theory_; the final and inevitable result

of this movement must be a revolution, when the downtrodden workers

will throw off their chains and expropriate the expropriators. There

is no doubt that Marx, when he first formulated this philosophy,

believed that such a revolution, most violent in nature, would occur

within a few years.

§ 18. #Utopian nature of "scientific" socialism#. The term

"scientific" set in contrast with "utopian" was meant to imply that

the doctrine of Marx was not "utopian" (a word which had come to mean

fanciful and impracticable). Marx had a contempt for the romances

of the ideal state and for what he deemed to be the unfounded

speculations of earlier prophets of communism. But utopian (from

_utopia_, Greek for no place) means nonexistent, and Marxian socialism

surely was that. "Experimental" or "actually at work" would have

been a more logical contrast with "utopian." Marx and his followers

likewise had a contempt for the communistic experiments, or

settlements and colonies, which by the scores had been started and had

failed, bringing discredit upon all communistic proposals. The beauty

of "scientific" socialism was that it never could be tried on a small

scale--or tried at all until a whole nation adopted it.

The old time "scientific" socialist had a lofty scorn for any less

dogmatic philosophy than his own or for any less sweeping social

change than that he expected. Moderate social reform to him was but

temporizing; indeed, it was evil, inasmuch as it helped to postpone

the inevitable, but in the end, beneficent catastrophe of the

social revolution. A step-by-step movement toward socialism, state

socialism,[19] even of a pretty sweeping character, was, to the

old-time Marxians, not really socialism at all. A valid reason for

this attitude was found in the extremely limited manhood suffrage

and in the aristocratic class government of most European countries,

especially of Germany; so that, as the party socialists saw it,

multiplying state enterprises but increased the power of the ruling,

and eventually of the militarist, class. The social-democratic leaders

felt that until they themselves were in power, the growth of "state

socialism" would be a calamity for the nation. The events of 1914 may

make our judgment tolerant toward their feeling.

§ 19. #Its unreal and negative character.# The so-called "scientific"

socialism had, therefore, a peculiarly unscientific spirit; for, in a

modern sense, science implies a patient search for truth, not a

sudden revelation; a constant testing of opinions by observation

and experiment, not a dogmatic conviction that refuses the test of

reality. "Scientific" socialists talked much (and still talk much) of

the "evolution" of social institutions; but they refused to admit the

essential condition for institutional evolution, the competitive trial

on a small scale, of a new form of economic organization to prove its

fitness to survive. Indeed, it had been tried on a small scale many

times, and had always failed in a brief time.

Lincoln said that a man's legs ought to be long enough to reach to the

ground; but "scientific" socialism was not built on that plan. To be

sure it contained many elements of truth, but these were so distorted

that the result was a caricature of history, of philosophy, of

economics, and of prophecy. The most important influence of radical

socialism has been exerted through negative criticism. It has

performed the function of a party in opposition, relentlessly hunting

out and pointing out the defects of existing institutions, arousing

the smugly contented, and, by its very recklessness and bitterness,

inspiring at times a wholesome fear of more revolutionary evils. This

has been a real service to the cause of moderate and constructive

reform.

§ 20. #Revisionism and opportunism in the socialist party#. Most

men have always agreed in an adverse judgment of the claims of

"scientific" socialism. The criticisms have been admitted in part even

by the intellectual leaders among the Social-democrats. They lost some

of their fantastic illusions, they tempered some of their exaggerated

claims of oracular inspiration. "Revisionism," the socialist higher

criticism, became influential in the party. Whenever the party gained

any success at the polls, the socialists in public office and the

party leaders found it necessary to "do something" immediately.

The rank and file might be willing to talk of the millennium, but

preferred to take it in instalments instead of waiting for it to come

some centuries after they were dead. And so the socialist party, as

fast as it gained any practical power, became "opportunist" and

worked for moderate practical reforms. The leaders did this with many

misgivings lest the masses might become so reconciled to the present

order that they would refuse to rise in revolt. In that case the

revolution never could happen (altho it was inevitable).

As the party socialists did more to improve the present, they talked

less of the distant future state. They ceased their criticisms of

"mere temporizing" "_bourgeois_" reforms, and began to claim these as

the achievements of the socialist party. They began to write of the

remarkable growth of social legislation in Europe and America in the

past half century under such titles of "socialism in practice" and

"socialists at work." This was despite the fact that these reforms

were all brought about by governments in which the socialist party had

no part whatever or was a well-nigh insignificant minority. This bald

sophistry, or self-deception, was easily possible by confusing the

word "socialist" as relating to the abstract principle of social

action, with socialist as applied to their own party organization. It

is as if the Republican party in the United States were to claim

as its own all the works of the republican spirit and principles of

government in the world from the party's organization to the present

time.

§ 21. #Alluring claims of party socialism.# In thus changing the

emphasis of its claims, the socialist party has been somewhat put to

it to retain any clear distinction between itself and other parties of

social reform. It has done this however by continuing to proclaim the

_ultimate_ desirability of reorganizing all society without leaving

any productive wealth in private hands. It has had no misgivings

prompted by the experience of the world. Its case continues to be far

the strongest in its negative aspect, the exposure of the evils in

present society. To many natures the claims of the socialist party

have all the allurements of patent medicine advertisements. These

describe the symptoms so exactly and promise so positively to cure

the disease, that they are irresistible--especially when the regular

physicians keep insisting that the only way to get well is to take

baths and exercise, and stop the use of whisky and tobacco.

Those attracted to the socialist party by its sweeping claims are of

two main types. The one is the low-paid industrial wage-worker; the

other is the sympathetic person of education or of wealth (or of

both), who has become suddenly aroused to the misery in our industrial

order. To both of these types, feeling intensely on the subject,

the socialist party appeals as the only party with promises sweeping

enough to be attractive. The one becomes the proletarian, the

other the intellectual, the one becomes the workshop, the other the

parlor-socialist. Many of the latter type are persons overburdened

either with unearned inherited wealth or with an undigested education.

Many of them, having enjoyed for a time the interesting experience of

radical thought and of bohemianism, come later to more moderate social

opinions.

§ 22. #Growth and nature of the socialist vote.# In 1912 the socialist

party in the United States polled 900,000 votes in the presidential

election. The socialist parties in the various lands have almost

steadily grown, and now cast votes numbering in the aggregate six

to ten million (as variously estimated, the name socialist being

elastic). The socialist parties may be expected to continue

growing. They will ultimately gather within their folds most of

the ultra-discontented, and others that are not able to find an

alternative economic philosophy and a plan that inspire their hopes.

But the socialist party vote is made up of men of many shades

of opinion, a large number of whom hold only the mildest sort

of socialistic philosophy. Not many of the more than 3,000,000

social-democratic voters in Germany before the war were members of the

regular party organization; but they supported the party as the

one unequivocal way to declare themselves against militarism and

undemocratic class-government. In the United States only about one

tenth of the socialistic party voters have been enrolled as members of

the party.

§ 23. #Economic legislation and the political parties.# This floating

socialist vote is now so large that it is eagerly sought by candidates

of the older parties. These independent voters care little for the

radical and distant tenets of the socialist party leaders, and these,

to attract wider support, are forced to place increasing stress upon

immediate and moderate reforms. On the other hand, men of larger

qualities of leadership in the older parties are constantly adopting

and advancing pending measures of social reform. Where this is not

done the socialist party tends more quickly to develop into the one

powerful party of protest and of popular aspiration, receiving support

from many elements of the middle and small propertied classes and from

non-radical wageworkers. This movement from both sides is leaving less

noticeable the contrast between the socialist party and other parties

claiming to be "progressive" or "forward looking." The strongest

allies of the more radical communistic faction of the socialist party

are those members of the conservative parties who fail to recognize

the need of humane legislation, who irritate by their unsympathetic

utterances, and who unduly postpone by their powerful opposition the

gradual and healthful unfolding of the social spirit, energy, and

capacity of the nation. The greatest problem of social and economic

legislation for the next generation is to determine how far, and how,

the principle of authority may wisely be substituted for the principle

of competition in distribution.

[Footnote 1: Distribution as a problem of incomes is not to be

confused with distribution of physical goods by transportation (as

on the railroads) or by commercial agencies transferring goods from

producer to consumer (as in coöperative distribution). Functional

distribution is the prime subject of the theory of value in Vol. I

(e.g., usance, value of labor, time-preference, profits), a study

of which is prerequisite to an intelligent study of the problems of

personal distribution.]

[Footnote 2: See Vol. I, pp. 190, 223; and above, ch. 2, secs. 11-13.]

[Footnote 3: See Vol. I, pp. 248-255, 297-298, 406, 408, 415-418,

480-481, 483-484: also Vol. II, pp. 22-23, 146-148, 161-162, 178-180,

283, and various passages in the chapters of this Part.]

[Footnote 4: See above, ch. 2, sec. 7, on limitations upon bequest and

inheritance.]

[Footnote 5: See ch. 18.]

[Footnote 6: See ch. 12, sec. 14.]

[Footnote 7: See ch. 2, sec. 10.]

[Footnote 8: See Vol. I, pp. 54 and 66; also pp. 504 507 in an organic

theory of value.]

[Footnote 9: See above, sec. 2, note 3.]

[Footnote 10: Compare, e.g., portions of chs. 9, 15, 20, 21, 27; and

29, see. 17.]

[Footnote 11: See ch. 2, sees. 11-13.]

[Footnote 12: See Vol. I, p. 75.]

[Footnote 13: See, e.g., Vol. I, pp. 25, 71, 205, 479, 509, 511, 513.]

[Footnote 14: See above, ch. 18.]

[Footnote 15: See Vol. I, p. 6, on "social" and the social sciences.]

[Footnote 16: See e.g., ch. 9, secs. 2, 10; ch. 11, secs. 7, 8; ch.

16, secs. 3, 4, 12; chs. 18, 21, 22, 23, 27, 29, and 30.]

[Footnote 17: See Vol. I, p. 502, on communism and value theory.]

[Footnote 18: See Vol. I, pp. 210, 228, 502 on the labor-theory of

value.]

[Footnote 19: See above, sec. 14.]

INDEX

Accident insurance,

Agricultural credit,

Agricultural, decay,

economics, problems of,

prices, fall of,

Agricultural, and rural population,

Agriculture and crises,

Agriculture, exhaustion of the soil,

medieval,

number in,

the new,

Aldrich report,

Senator,

plan,

American Federation of Labor,

Appreciation and interest,

Arbitration, voluntary,

compulsory,

Assessment insurance,

Assessment of taxes,

Authoritative distribution,

Balance of merchandise,

Balance of trade argument,

Bank, deposits as investments,

notes,

restriction act,

Banking, in the U.S., before 1914,

Banks, functions of,

in U.S.,

taxes on,

Bellamy, Edward,

Bills of exchange,

Bimetallism,

Bonds, taxation of,

Bowley, statistician,

Boycott,

Building and loan associations,

Business cycle,

California Fruit Exchange,

Canadian Industrial Disputes Act,

Canals,

Capital,

Capitalistic monopoly,

Charitable distribution,

Capitalization theory of rises,

Charity, and control of vice,

Child-labor,

Christian socialism,

City growth,

Clark, John B.,

Clay, Henry,

Clayton Act,

and farmers,

Cleveland, Grover,

Closed shop, see Open shop

Coal,

Coinage on governmental account,

Collective bargaining,

Combination,

Combinations, industrial,

Common law, on monopoly,

Comparative advantages, doctrine of,

Compensated gold dollar,

Compensation, for accidents,

Competition among employers,

among workers,

of railroads,

and monopoly,

as regulative principle,

merits of,