The idea of social evolution is admirably expressed in the fine phrase

of Leibnitz, "The present is the child of the past, but it is the parent

of the future."[60] The great seventeenth-century philosopher was not

the first to postulate and apply to society that doctrine of flux, of

continuity and unity, which we call evolution. In all ages of which

record has been preserved to us, it has been sporadically, and more or

less vaguely, expressed. Even savages seem to have dimly perceived it.

The saying of the Bechuana chief, recorded by the missionary, Casalis,

was probably, judging by its epigrammatic character, a proverb of his

people. "One event is always the son of another," he said--a saying

strikingly like that of Leibnitz.

Since the work of Lyell, Darwin, Wallace, Spencer, Huxley, Youmans, and

their numerous followers--a brilliant school embracing the foremost

historians and sociologists of Europe and America--the idea of evolution

as a universal law has made rapid and certain progress. Everything

changes; nothing is immutable or eternal. Whatever is, whether in

geology, astronomy, biology, or sociology, is the result of numberless,

inevitable, related changes. Only the law of change is changeless. The

present is a phase only of a great transition process from what was,

through what is, to what will be.

The Marx-Engels theory is an exploration of the laws governing this

process of evolution in the domain of human relations: an attempt to

provide a key to the hitherto mysterious succession of changes in the

political, juridical, and social relations and institutions of mankind.

Whence, for instance, arose the institution of chattel slavery, so

repugnant to our modern ideas of right and wrong, and how shall we

explain its defense and justification in the name of religion and

morality? How account for the fact that what Yesterday regarded as

righteous, To-day condemns as wrong; that what at one period of the

world's history is regarded as perfectly natural and right--the practice

of polygamy, for example--becomes abhorrent at another period; or that

what is regarded with horror and disgust in one part of the world is

sanctioned by the ethical codes, and freely practiced elsewhere? Ferri

gives two examples of this kind: the cannibalism of Central African

tribes, and the killing of parents, as a religious duty, in Sumatra.[61]

To reply "custom" is to beg the whole question, for customs do not exist

without reason, however difficult it may be to discern the reason for

any particular custom. To reply that these things are mysteries, as the

old theologians did when the doctrine of the Trinity was questioned, is

to leave the question unanswered and to challenge doubt and

investigation. The human mind abhors a mystery as nature abhors a

vacuum. Despite Spencer, the human mind has never admitted the existence

of the _Unknowable_. To explore the _Unknown_ is man's universal

impulse; and with each fresh discovery the _Unknown_ is narrowed by the

expansion of the _Known_.

The theory that ideas determine progress, that, in the words of

Professor Richard T. Ely, "all that is significant in human history may

be traced back to ideas,"[62] is only true in the sense that a half

truth is true. It is true, nothing but the truth, but it is less than

the whole truth. Truly all that is significant in human history may be

traced back to ideas, but in like manner the ideas themselves can be

traced back to material sources. For ideas have histories, too, and the

causation of an idea must be understood before the idea itself can serve

fully to explain anything. We must go back of the idea to the causes

which gave it birth if we would interpret anything by it. We may trace

the American Revolution, for example, back to the revolutionary ideas of

the colonists, but that will not materially assist us to understand the

Revolution. For that, it is necessary to trace the ideas themselves to

their source, the economic discontent of an exploited people. This is

the spirit which illumines the works of historians like Green, McMaster,

Morse Stephens, and others of the modern school, who emphasize social

forces rather than individual facts, and find the _geist_ of history in

social experiences and institutions.

What has been called the "Great Man theory," the theory according to

which Luther created the Protestant Reformation, to quote only one

example, and which ignored the great economic changes consequent upon

the break-up of feudalism and the rise of a new industrial order, long

dominated our histories. According to this theory, an idea, developed in

the mind of Luther, independent of external circumstances, changed the

political and social life of Europe. Had there been no Luther, there

would have been no Reformation; or had Luther died before giving his

idea to the world, the Reformation would have been averted. The student

who seeks in the bulk of the histories written prior to, say, 1870, what

he has a legitimate reason for seeking, namely, a picture of the actual

life of the people at any period, will be sadly disappointed. He will

find records of wars and treaties of peace, royal genealogies and

gossip, wildernesses of names and dates. But he will not find such

careful accounts of the jurisprudence of the period, nor any hint of the

economical conditions of its development. He will find splendid accounts

of court life, with its ceremonials, scandals, intrigues, and follies;

but no such pictures of the lives of the people, their social

conditions, and the methods of labor and commerce which obtained. He

will be unable to visualize the life of the period. In other words, the

histories lack realism; they are unreal, and, therefore, deceptive. The

new spirit, in the development of which the materialist conception of

Marx and Engels has been an important creative influence, is concerned

less with the chronicle of notable events and dates than with their

underlying causes and the manner of life of the people. Had it no other

bearing, the Marx-Engels theory, considered solely as a contribution to

the science of history, would have been one of the greatest intellectual

achievements of the nineteenth century. By emphasizing the importance of

the economic factors in social evolution, it has done much for economics

and more for history.[63]

III

While the Materialistic Conception of History bears the names of Marx

and Engels, as the theory of organic evolution bears the names of Darwin

and Wallace, it is not claimed that the idea had never before been

expressed. Just as thousands of years before Darwin and Wallace the

theory which bears their names had been dimly perceived, so the idea

that economic conditions dominate historical developments had its

foreshadowings. The famous dictum of Aristotle, that only by the

introduction of machines would the abolition of slavery ever be made

possible, is a conspicuous example of many anticipations of the theory.

It is true that "In dealing with speculations so remote, we have to

guard against reading modern meanings into writings produced in ages

whose limitations of knowledge were serious, whose temper and standpoint

are wholly alien to our own,"[64] but the Aristotelian saying admits of

no other interpretation. It is clearly a recognition of the fact that

the supreme politico-social institution of the time depended upon hand

labor.

In later times, the idea of a direct connection between economic

conditions and legal and political institutions reappears in the works

of various writers. Professor Seligman[65] quotes from Harrington's

"Oceana" the argument that the prevailing form of government depends

upon the conditions of land tenure, and the extent of its

monopolization. Saint-Simon, too, as already stated, taught that

political institutions depend upon economic conditions. But it is to

Marx and Engels that we owe the first formulation into a definite theory

of what had hitherto been but a suggestion, and the beginnings of a

literature, now of considerable proportions, dealing with history from

its standpoint. No more need be said concerning the "originality" of the

theory.

A word as to the designation of the theory. Its authors gave it the name

"historical materialism," and it has been urged that the name is, for

many reasons, unfortunately chosen. Two of the leading exponents of the

theory, Professor Seligman and Mr. Ghent, the former an opponent, the

latter an advocate of Socialism, have expressed this conviction in very

definite terms. The last-named writer bases his objection to the name on

the ground that it is repellent to many persons who associate the word

materialism with the philosophy "that matter is the only substance, and

that matter and its motions constitute the universe."[66] That is an old

objection, and undoubtedly contains much truth. It is interesting in

connection therewith to read the sarcastic comment of Engels upon it in

the introduction to his "Socialism, Utopian and Scientific." The

objection of Professor Seligman is based upon another ground entirely.

He impugns its accuracy. "The theory which ascribes all changes in

society to the influence of climate, or to the character of the fauna

and flora, is materialistic," he says, "and yet has little in common

with the doctrine here discussed. The doctrine we have to deal with is

not only materialistic, but also economic in character; and the better

phrase is ... the 'economic interpretation' of history."[67] For this

reason he discards the name given to the theory by its authors and

adopts the luminous phrase of Thorold Rogers, without credit to that

writer.

By French and Italian writers the term "economic determinism" has long

been used, and it has been adopted to some extent in this country by

Socialist writers. But this term, as Professor Seligman points out, is

objectionable, because it exaggerates the theory, and gives it, by

implication, a fatalistic character, conveying the idea that economic

influence is the _sole_ determining factor--a view which its authors

specifically repudiated. While the reasoning of Professor Seligman in

the argument quoted against the name "historical materialism" is neither

very profound nor conclusive, since climate and fauna and flora are

included in the term "economic" as clearly as in the term

"materialistic," much may be said in favor of his choice of the term he

borrows from Thorold Rogers, and it is used by many Socialist writers in

preference to that used by Marx and Engels.

Many persons have doubtless been deceived into believing that the theory

involves the denial of all influence to idealistic or spiritual factors,

and the assumption that economic forces _alone_ determine the course of

historical development. Much of the criticism of the theory, especially

by the Germans, rests upon that assumption. The theory is attacked,

also, as being sordid and brutal upon the same false assumption that it

implies that men are governed solely by their economic _interests_, that

individual conduct is never inspired by anything higher than the

economic interest of the individual. These are misconceptions of the

theory, due, no doubt, to the overemphasis placed upon it by its

authors--a common experience of new doctrines--and, above all, the

exaggerations of too zealous, unrestrained disciples. There is a wise

saying of Schiller's which suggests the spirit in which these

exaggerations of a great truth--exaggerations by which it becomes

falsehood--should be regarded: "Rarely do we reach truth, except through

extremes--we must have foolishness ... even to exhaustion, before we

arrive at the beautiful goal of calm wisdom."[68] When it is contended

that the "Civil War was at bottom a struggle between two economic

principles,"[69] we have the presentation of an important truth, the key

to the proper understanding of a great historical event. But when that

important fact is exaggerated and torn from its legitimate place to suit

the propaganda of a theory, and we are asked to believe that Garrison,

Lovejoy, and other abolitionists were inspired solely by economic

motives, that the urge and passion of human freedom did not enter into

their souls, we are forced to reject it. But let it be clearly

understood that it forms no part of the theory, that it is even

expressly denied in the very terms in which Marx and Engels formulated

the theory, and that its authors repudiated such perversions of it.

In no respect has the theory been more grossly exaggerated and

misrepresented than in its application to religion. True philosopher

that he was, Marx realized the absurdity of attempting "to abstract

religious sentiment from the course of history, to place it by

itself."[70] He recognized that all religion is, fundamentally, man's

effort to put himself into harmonious relation with, and to discover an

interpretation of, the forces of the universe. The more incomprehensible

those forces, the greater man's need of an explanation of them. He could

not fail to see that the religion of a people always bears a marked

relation to their mental development and their special environment. He

knew that at various stages the Yahve of the Hebrews represented very

different conceptions, answering to changes in the social and political

conditions of the people. To the primitive Israelitish tribes, Yahve

was, as Professor Rauschenbusch remarks,[71] a tribal god, fortunately

stronger than the gods of the neighboring tribes, but not fundamentally

different from them, and the way to win his favor was to sacrifice

abundantly. Later, with the development of a national spirit, the

religious ideal became a theocracy, and Yahve became a King and Supreme

Lord. In times of oppression and war Yahve was a God of War, but under

other conditions he was a God of Peace. At every step the conception of

Yahve bears a very definite relation to the material life.[72]

Marx knew that primitive religions have often a celestial pantheon

fashioned after the existing social order, kings being gods, aristocrats

being demigods, and common mortals occupying a celestial rank equal to

their terrestrial one. The celestial hierarchy of the Chinese, for

example, is an exact reproduction of the earthly hierarchy, and all the

privileges of rank are observed celestially as on earth. So in India we

find the religions reproducing in their concepts of heaven the degrees

and divisions of the various castes,[73] while our own American Indian

conceived of a celestial hunting ground, with abundant reward of game,

as his Paradise. "The religious world is but the reflex of the real

world," said Marx,[74] and the phrase has been used, both by disciples

and critics, as an attack upon religion itself; as showing that the

Marxian philosophy excludes the possibility of religious belief.

Obviously, however, the passage will not bear such an interpretation. To

say that "the religious world is but the reflex of the real world" is

by no means to deny that men have been benefited by seeking an

interpretation of the forces of the universe, or to assert that the

quest for such an interpretation is incompatible with rational conduct.

In his scorn for Bakunin's "Alliance" programme with its dogmatic

atheism[75] Marx was perfectly consistent. The passage quoted simply

lays down, in bare outline, a principle which, if well founded, enables

us to study comparative religion from a new viewpoint.

It is not a denial of religion, then, which the famous utterance of Marx

involves, but a recognition of the fact that, even as all religions may

be traced to the same fundamental instinct in mankind, so the different

forms which the religious conception assumes are, or may be, reflexes of

the material life of those making them. Thus man makes religion for

himself under the urge of his deepest instincts. The application of the

theory to religion is analogous to its application to historical events.

To say that a given religion assumes the form it does as an unconscious

reflex of the environment in which it is produced, is no more a denial

of that religion than to say that the Reformation arose out of economic

and social conditions, and not out of an idea in Luther's mind, is a

denial of the fact that there was a Reformation, or that the

Reformation benefited the people. The value of the theory to the study

of religions and religious movements is not less than to the study of

history. Does anybody pretend that we can understand Christianity

without taking into account the Roman Empire; or that we can understand

Catholicism without knowing something of the economic life of medieval

Europe; or Methodism without knowing the social condition of England in

Wesley's day?[76]

In one of the very earliest of his writings upon the subject, some

comments upon the philosophy of Ludwig Feuerbach, and intended to form

the basis of a separate work, we find Marx insisting that man is not a

mere automaton, driven irresistibly by blind economic forces. He says:

"The materialistic doctrine, that men are the products of conditions and

education, different men, therefore, the products of other conditions

and changed education, _forgets that circumstances may be altered by

men, and that the educator has himself to be educated_."[77] Thus early

we see the master taking a position entirely at variance with those of

his disciples who would claim that the human factor has no influence

upon historical development, that man is without power over his own

destiny. From that position Marx never departed. Both he and Engels

recognized the human character of the problem, and the futility of

attempting to reduce all the processes of history and human progress to

one sole basic cause. And in no case, so far as I am aware, has either

of them attempted to do this.

In another place, Marx contends that "men make their own history, but

they make it not of their own accord or under self-chosen conditions,

but under given and transmitted conditions. The tradition of all dead

generations weighs like a mountain upon the brain of the living."[78]

Here, again, the influence of the human will is not denied, though its

limitations are indicated. This is the application to social man of the

theory of limitations of the will commonly accepted as applying to

individuals. Man is only a freewill agent within certain sharp and

relatively narrow bounds. In a given contingency, I may be "free" to act

in a certain manner, or to refrain from so acting. I may take my choice,

in the one direction or the other, entirely free, to all appearances,

from restraining or compelling influences. Thus, I have acted upon my

"will." But what factors formed my will? What circumstances determined

my decision? Perhaps fear, or shame, or pride; perhaps tendencies

inherited from my ancestors.

Engels admits that the economic factor in evolution has sometimes been

unduly emphasized. He says: "Marx and I are partly responsible for the

fact that the younger men have sometimes laid more stress on the

economic side than it deserves. In meeting the attacks of our opponents,

it was necessary for us to emphasize the dominant principle denied by

them; and we did not always have the time, place, or opportunity to let

the other factors which were concerned in the mutual action and reaction

get their deserts."[79] In another letter,[80] he says: "According to

the materialistic view of history, the factor which is in _last

instance_ decisive in history is the production and reproduction of

actual life. More than this neither Marx nor I have ever asserted. But

when any one distorts this so as to read that the economic factor is the

sole element, he converts the statement into a meaningless, abstract,

absurd phrase. The economic condition is the basis; but the various

elements of the superstructure,--the political forms of the class

contests, and their results, the constitutions,--the legal forms, and

also all the reflexes of these actual contests in the brains of the

participants, the political, legal, philosophical theories, the

_religious views_ ... all these exert an influence on the development of

the historical struggles, and, in many instances, determine their form."

It is evident, therefore, that the doctrine does not imply economic

fatalism. It does not deny that ideals may influence historical

developments and individual conduct. While, as we shall see in a later

chapter, it is part of the doctrine that classes are formed upon a basis

of unity of material interests, it does not deny that men may, and often

do, act in accordance with the promptings of noble impulses and

humanitarian ideals, when their material interests would lead them to do

otherwise. We have a conspicuous example of this in the life of Marx

himself; in his splendid devotion to the cause of the workers through

years of terrible poverty and hardship when he might have chosen wealth

and fame. It is known, for example, that Bismarck made the most

extravagant offers to enlist the services of Marx, who declined them at

the very time when he was suffering awful privations. Marx himself has

noted more than one instance of individual idealism triumphing over

material interests and class environment, and, by a perversity that is

astonishing, and not wholly disingenuous, some of his critics, notably

Ludwig Slonimski,[81] have used these instances as arguments against his

theory, claiming that they disprove it! We are to understand the

materialistic theory, then, as teaching, not that history is determined

by economic forces only, but that in human evolution the chief factors

are social factors, and that these factors in turn are _mainly_ molded

by economic circumstances.[82]

This, then, is the basis of the Socialist philosophy, which Engels

regarded as "destined to do for history what Darwin's theory has done

for biology." Marx himself made a similar comparison.[83] Marx was, so

Liebknecht tells us, one of the first to recognize the importance of

Darwin's investigations to sociology. His first important treatment of

the materialistic theory, in "A Contribution to the Critique of

Political Economy," appeared in 1859, the year in which "The Origin of

Species" appeared. "We spoke for months of nothing else but Darwin, and

the revolutionizing power of his scientific conquests,"[84] says

Liebknecht. Darwin, however, had little knowledge of political economy,

as he acknowledged in a letter to Marx, thanking the latter for a copy

of "Das Kapital." "I heartily wish that I possessed a greater knowledge

of the deep and important subject of economic questions, which would

make me a more worthy recipient of your gift," he wrote.[85]

IV

The test of such a theory must lie in its application. Let us, then,

apply the materialistic principle, first to a specific event, and then

to the great sweep of the historic drama. Perhaps no single event has

more profoundly impressed the imaginations of men, or filled a more

important place in our histories, than the discovery of America by

Columbus. In the schoolbooks, this great event figures as a splendid

adventure, arising out of a romantic dream. But the facts are, as we

know, far otherwise.[86] In the twelfth and thirteenth centuries there

were numerous and well-frequented routes from Hindustan, that vast

storehouse of treasure from which Europe drew its riches. Along these

routes cities flourished. There were the great ports, Licia in the

Levant, Trebizond on the Black Sea, and Alexandria. From these ports,

Venetian and Genoese traders bore the produce over the passes of the

Alps to the Upper Danube and the Rhine. Here it was a source of wealth

to the cities along the waterways, from Ratisbon and Nuremburg, to

Bruges and Antwerp. Even the slightest acquaintance with the history of

the Middle Ages must suffice to give the student an idea of the

importance of these cities.

When all these routes save the Egyptian were closed by the hordes of

savages which infested Central Asia, it became an easy matter for the

Moors in Africa and the Turks in Europe to exact immense revenues from

the Eastern trade, solely through their monopoly of the route of

transit. Thus there developed an economic parasitism which crippled the

trade with the East. The Turks were securely seated at Constantinople,

threatening to advance into the heart of Europe, and building up an

immense military system out of the taxes imposed upon the trade of

Europe with the East--a military power, which, in less than a quarter of

a century, enabled Selim I to conquer Mesopotamia and the holy towns of

Arabia, and to annex Egypt.[87] It became necessary, then, to find a new

route to India; and it was this great economic necessity which set

Columbus thinking of a pathway to India over the Western Sea. It was

this same great problem which engaged the attention of all the

navigators of the time; it was this economic necessity which induced

Ferdinand and Isabella to support the adventurous plan of Columbus. In a

word, without detracting in any manner from the splendid genius of

Columbus, or from the romance of his great voyage of discovery, we see

that, fundamentally, it was the economic interest of Europe which gave

birth to the one and made the other possible. The same explanation

applies to the voyage of Vasco da Gama, six years later, which resulted

in finding a way to India over the southeast course by way of the Cape

of Good Hope.

Kipling asks in his ballad, "The British Flag"--

"And what should they know of England, who only England know?"

There is a profound truth in the defiant line, a truth which applies

equally to America or any other country. The present is inseparable from

the past. We cannot understand one epoch without reference to its

predecessors; we cannot understand the history of the United States

unless we seek the key in the history of Europe--of England and France

in particular. At the very threshold, in order to understand how the

heroic navigator came to discover the vast continent of which the United

States is part, we must pause to study the economic conditions of Europe

which impelled the adventurous voyage, and led to the discovery of a

great continent stretching across the ocean path. Such a view of history

does not rob it of its romance, but rather adds to it. Surely, the

wonderful linking of circumstances--the demand for spices and silks to

minister to the fine tastes of aristocratic Europe, the growth of the

trade with the East Indies, the grasping greed of Moor and Turk--all

playing a role in the great drama of which the discovery of America is

but a scene, is infinitely more fascinating than the latter event

detached from its historical setting!

It is not easy to give in the compass of a few pages an intelligent view

of the main currents of history. The sketch here introduced--not without

hesitation--is an endeavor to state the Socialist concept of the course

of social evolution in a brief outline and to indicate the principal

economic causes which have operated to determine that course.

It is now generally admitted that primitive man lived under Communism.

Lewis H. Morgan[88] has calculated that if the life of the human race be

assumed to have covered one hundred thousand years, at least ninety-five

thousand years were spent in a crude, tribal Communism, in which private

property was practically unknown, and in which the only ethic was

devotion to tribal interests, and the only crime antagonism to tribal

interests. Under this social system the means of making wealth were in

the hands of the tribes, or _gens_, and distribution was likewise

socially arranged. Between the different tribes warfare was constant,

but in the tribe itself there was cooeperation and not struggle. This

fact is of tremendous importance in view of the criticisms which have

been directed against the Socialist philosophy from the so-called

Darwinian point of view, according to which competition and struggle is

the law of life; that what Professor Huxley calls "the Hobbesial war of

each against all" is the normal state of existence.

This is described as "the so-called Darwinian" theory advisedly, for the

struggle for existence as the law of evolution has been exaggerated out

of all likeness to the conception of Darwin himself. In "The Descent of

Man," for instance, Darwin raises the point under review, and shows how,

in many animal societies, the _struggle_ for existence is replaced by

_cooeperation_ for existence, and how that substitution results in the

development of faculties which secure to the species the best conditions

for survival. "Those communities," he says, "which included the greatest

number of the most sympathetic members, would flourish best and rear the

greatest number of offspring."[89] Despite these instances, and the

warning of Darwin himself that the term "struggle for existence" should

not be too narrowly interpreted or overrated, his followers, instead of

broadening it according to the master's suggestions, narrowed it still

more. Thus the theory has been exaggerated into a mere caricature of the

truth. This is almost invariably the fate of theories which deal with

human relations, perhaps it would be equally true to say of all

theories. The exaggerations of Malthus's law of population is a case in

point. The Marx-Engels theory of the materialistic conception of history

is, as we have seen, another.

Kropotkin, among others, has developed the theory along the lines

suggested by Darwin. He points out that "though there is an immense

amount of warfare and extermination going on amidst various classes of

animals, there is, at the same time, as much, or perhaps even more, of

mutual support, mutual aid, mutual defense, amidst animals belonging to

the same species or, at least, to the same society. Sociability is as

much a law of nature as mutual struggle.... If we resort to an indirect

test, and ask nature: 'Who are the fittest: those who are continually at

war with each other, or those who support one another?' we at once see

that those animals which acquire habits of mutual aid are undoubtedly

the fittest. They have more chances to survive, and they attain, in

their respective classes, the highest development of intelligence and

bodily organization. If the numberless facts which can be brought

forward to support this view are taken into account, we may safely say

that mutual aid is as much a law of animal life as mutual struggle, but

that, as a factor of evolution, it most probably has a far greater

importance, inasmuch as it favors the development of such habits and

characters as insure the maintenance and further development of the

species, together with the greatest amount of welfare and enjoyment of

life for the individual, with the least waste of energy."[90]

From the lowest forms of animal life up to the highest, man, this law

proves to be operative. It is not denied that there is competition for

food, for life, within the species, human and other. But that

competition is not usual; it arises out of unusual and special

conditions. There are instances of hunger-maddened mothers tearing away

food from their children; men drifting at sea have fought for water and

food as beasts fight, but these are not normal conditions of life.

"Happily enough," says Kropotkin again, "competition is not the rule

either in the animal world or in mankind. It is limited among animals to

exceptional periods.... Better conditions are created by the

_elimination of competition_ by means of mutual aid and mutual

support."[91] This is the voice of science now that we have passed

through the extremes and arrived at the "beautiful goal of calm wisdom."

Competition is not, in the verdict of modern science, the law of life,

but of death. Strife is not nature's way of progress.

Anything more important to our present inquiry than this verdict of

science it would be difficult to imagine. Men have for so long believed

and declared struggle and competition to be the "law of nature," and

opposed Socialism on the ground of its supposed antagonism to that law,

that this new conception of nature's method comes as a vindication of

the Socialist position. The naturalist testifies to the universality of

the principle of cooeperation throughout the animal world, and the

historian and sociologist to its universality throughout the greatest

part of man's history. Present economic tendencies toward combination

and away from competition, in industry and commerce, appear as the

fulfilling of a great universal law. And the vain efforts of men to stop

that process, by legislation, boycotts, and divers other methods, appear

as efforts to set aside immutable law. Like so many Canutes, they bid

the tides halt, and, like Canute's, their commands are vain and mocked

by the unheeding tides.

Under Communism, then, man lived for many thousands of years. As far

back as we can go into the paleo-ethnology of mankind, we find evidences

of this. All the great authorities, Morgan, Maine, Lubbock, Taylor,

Bachofen, and many others, agree in this. And under this Communism all

the great fundamental inventions were evolved, as Morgan and others have

shown. The wheel, the potter's wheel, the lever, the stencil plate, the

sail, the rudder, the loom, were all evolved under Communism in its

various stages. So, too, the cultivation of cereals for food, the

smelting of metals, the domestication of animals,--to which we owe so

much, and on which we still so largely depend,--were all introduced

under Communism. Even in our day there have been found many survivals of

this Communism among primitive peoples. Mention need only be made here

of the Bantu tribes of Africa, whose splendid organization astonished

the British, and the Eskimos. It is now possible to trace with a fair

amount of certainty the progress of mankind through various stages of

Communism, from the unconscious Communism of the nomad to the

consciously organized and directed Communism of the most highly

developed tribes, right up to the threshold of civilization, when

private property takes the place of common, tribal property, and

economic classes appear.[92]

V

Private property, other than that personal ownership and use of things,

such as weapons and tools, which involves no class or caste domination,

and is an integral feature of all forms of Communism, first appears in

the ownership of man by man. Slavery, strange as it may seem, is

directly traceable to tribal Communism, and first appears as a tribal

institution. When one tribe made war upon another, its efforts were

directed to the killing of as many of its enemies as possible. Cannibal

tribes killed their foes for food, rarely or never killing their

fellow-tribesmen for that purpose. Non-cannibalistic tribes killed their

foes merely to get rid of them. But when the power of mankind over the

forces of external nature had reached that point in its development

where it became relatively easy for a man to produce more than was

necessary for his own maintenance, the custom arose of making captives

of enemies and setting them to work. A foe captured had thus an economic

value to the tribe. Either he could be set to work directly, his surplus

product enriching the tribe, or he could be used to relieve some of his

captors from other necessary duties, thus enabling them to produce more

than would otherwise be possible, the effect being the same in the end.

The property of the tribe at first, slaves become at a later stage

private property--probably through the institution of the tribal

distribution of wealth. Cruel, revolting, and vile as slavery appears to

our modern sense,--especially the earlier forms of slavery before the

body of legislation, and, not less important, sentiment, which

surrounded it later arose,--it still was a step forward, a distinct

advance upon the older customs of cannibalism and wholesale slaughter.

Nor was it a progressive step only on the humanitarian side. It had

other, profounder consequences from the evolutionary point of view. It

made a leisure class possible, and provided the only conditions under

which art, philosophy, and jurisprudence could be evolved. The secret of

Aristotle's saying, that only by the invention of machines would the

abolition of slavery ever be made possible, lies in his recognition of

the fact that the labor of slaves alone made possible the devotion of a

class of men to the pursuit of knowledge instead of to the production of

the primal necessities of life. The Athens of Pericles, for example,

with all its varied forms of culture, its art and its philosophy, was a

semi-communism of a caste above, resting upon a basis of slave labor

underneath. Similar conditions prevailed in all the so-called ancient

democracies of civilization.

The private ownership of wealth producers and their products made

private exchange inevitable; individual ownership of land took the place

of communal ownership, and a monetary system was invented. Here, then,

in the private ownership of land and laborer, private production and

exchange, we have the economic factors which caused the great revolts of

antiquity, and led to that concentration of wealth into few hands, with

its resulting mad luxury on the one hand and widespread proletarian

misery upon the other, which conspired to the overthrow of Greek and

Roman civilization. The study of those relentless economic forces which

led to the break-up of Roman civilization is important as showing how

chattel slavery became modified and the slave to be regarded as a serf,

a servant bound to the soil. The lack of adequate production, the

crippling of commerce by hordes of corrupt officials, the overburdening

of the agricultural estates with slaves, so that agriculture became

profitless, the crushing out of free labor by slave labor, and the rise

of a wretched class of freemen proletarians, these, and other kindred

causes, led to the breaking up of the great estates; the dismissal of

superfluous slaves, in many cases, and the partial enfranchisement of

others by making them hereditary tenants, paying a fixed share of their

product as rent--here we have the embryonic stage of feudalism. It was a

revolution, this transformation of the social system of Rome, of

infinitely greater importance than the sporadic risings of a few

thousand slaves. Yet, such is the lack of perspective which the

historians have shown, it is given a far less important place in the

histories than the risings in question. Slavery, chattel slavery, died

because it had ceased to be profitable; serf labor arose because it was

more profitable. Slave labor was economically impossible, and the labor

of free men was morally impossible; it had, thanks to the slave system,

come to be regarded as a degradation. In the words of Engels, "This

brought the Roman world into a blind alley from which it could not

escape.... There was no other help but a complete revolution."[93]

The invading barbarians made the revolution complete. By the poor

freemen proletarians who had been selling their children into slavery,

the barbarians were welcomed. Misery, like opulence, has no patriotism.

Many of the proletarian freemen had fled to the districts of the

barbarians, and feared nothing so much as a return to Roman rule. What,

then, should the proletariat care for the overthrow of the Roman state

by the barbarians? And how much less the slaves, whose condition,

generally speaking, could not possibly change for the worse? The free

proletarian and the slave could join in saying, as men have said

thousands of times in circumstances of desperation:--

"Our fortunes may be better; they can be no worse."

VI

Feudalism is the essential politico-economic system of the Middle Ages.

Obscure as its origin is, and indefinite as the date of its first

appearances, there can be no doubt whatever that the break-up of the

Roman system, and the modification of the existing form of slavery,

constituted the most important of its sources. Whether, as some writers

have contended, the feudal system of land tenure and serfdom is

traceable to Asiatic origins, being adopted by the ruling class of Rome

in the days of the economic disintegration of the empire, or whether it

rose spontaneously out of the Roman conditions, matters little to us.

Whatever its archaeological interest, it does not affect the narrower

scope of our present inquiry whether economic necessity caused the

adoption of an alien system of land tenure and agricultural production,

or whether economic necessity caused the creation of a new system. The

central fact is the same in either case.

That period of history which we call the Middle Ages covers a span of

well-nigh a thousand years. If we arbitrarily date its beginning from

the successful invasion of Rome by the barbarians in the early part of

the fifth century, and its ending with the final development of the

craft guilds in the middle of the fourteenth century, we have a

sufficiently exact measure of the time during which feudalism developed,

flourished, and declined. There are few things more difficult than the

bounding of epochs in social evolution by exact dates. Just as the

ripening of the wheat fields comes almost imperceptibly, so that the

farmer can say when the wheat is ripe, yet cannot say when the ripening

occurred, so with the epochs into which social history divides itself.

There is the unripe state and the ripe, but no chasm yawns between them;

they are merged together. We speak of the "end" of chattel slavery, and

the "rise" of feudalism, therefore, in a wide, general sense. As a

matter of fact, chattel slavery survived to some extent for centuries,

existing alongside of the new form of servitude; and its disappearance

took place, not simultaneously throughout the civilized world, but at

varying intervals. Likewise, there is a vast difference between the

first, crude, ill-defined forms of feudalism and its subsequent

development.

The theory of feudalism is the "divine right of kings." God is the

Supreme Lord of all the earth, the kings are His vice-regents, devolving

their authority in turn upon whomsoever they will. All land is held as

belonging to the king, God's chosen representative. He divides the realm

among his barons, to rule over and defend. For this they pay tribute to

the king--military service in times of war and, at a later period,

money. In turn, the barons divide the land among the lesser nobility,

receiving tribute from them. By these divided among the freemen, who

also pay tribute, the land is tilled by the serfs, who pay service to

the freeman, the lord of the manor. The serf pays no tribute directly to

the king, only to his liege lord; the liege lord pays to his superior,

and so on, up to the king. This is the economic framework of feudalism;

with its ecclesiastical side we are not here concerned.

At the base of the whole superstructure, then, was the serf, his

relation to his lord differing only in degree, though in material

degree, from that of the chattel slave. He might be, and often was, as

brutally ill-treated as the slave before him had been; he might be

ill-fed and ill-housed; his wife or daughters might be ravished by his

master or his master's sons. Yet, withal, his condition was better than

that of the slave. He could maintain his family life in an independent

household; he possessed some rights, chief of which perhaps was the

right to labor for himself. Having his own allotment of land, he was in

a much larger sense a human being. Compelled to render so many days'

service to his lord, tilling the soil, clearing the forest, quarrying

stone, and doing domestic work, he was permitted to devote a certain,

often an equal, number of days to work for his own benefit. Not only so,

but the service the lord rendered him, in protecting him and his family

from the lawless and violent robber hordes which infested the country,

was considerable.

The feudal estate, or manor, was an industrial whole, self-dependent,

and having few essential ties binding it to the outside world. The

barons and their retainers, lords, thanes, and freemen, enjoyed a

certain rude plenty, some of the richer barons enjoying a considerable

amount of luxury and splendor. The _villein_ and his sons tilled the

soil, reaped the harvests, felled trees for fuel, built the houses,

raised the necessary domestic animals, and killed the wild animals; his

wife and daughters spun the flax, carded the wool, made the homespun

clothing, brewed the mead, and gathered the grapes which they made into

wine. There was little real dependence upon the outside world except

for articles of luxury.

Such was the basic economic institution of feudalism. But alongside of

the feudal estate with its serf labor, there were the free laborers, no

longer regarding labor as shameful and degrading. These free laborers

were the handicraftsmen and free peasants, the former soon organizing

themselves into guilds. There was a specialization of labor, but, as

yet, little division. Each man worked at a particular craft and

exchanged his individual products. The free craftsman would exchange his

product with the free peasant, and sometimes his trade extended to the

feudal manor. The guild was at once his master and protector; rigid in

its rules, strict in its surveillance of its members, it was strong and

effective as a protector against the impositions and invasions of feudal

barons and their retainers. Division of labor first appears in its

simplest form, the association of independent individual workers for

mutual advantage, sharing their products upon a basis of equality. This

simple cooeperation involved no fundamental, revolutionary change in

society. That came later with the development of the workshop system,

and the division of labor upon a definite, predetermined plan. Men

specialized now in the making of _parts_ of things; no man could say of

a finished product, "This is _mine_, for I made it." Production had

become a social function.

VII

At first, in its simple beginnings, the cooeperation of many producers in

one great workshop did not involve any general or far-reaching changes

in the system of exchange. But as the new methods spread, and it became

the custom for one or two wealthy individuals to provide the workshop

and necessary tools and materials for production, the product of the

combined laborers being appropriated in its entirety by the owners of

the agencies of production, who paid the workers a money wage

representing less than the actual value of their product, and based upon

the cost of their subsistence, the whole economic system was once more

revolutionized. The custom of working for wages, hitherto rare and

exceptional, became general and customary; individual production for

use, either directly or through the medium of personal exchange, was

superseded by social production for private profit. The wholesale

exchange of social products for private gain took the place of the

personal exchange of commodities. The difference between the total cost

of the production of commodities, including the wages of the producers,

and their exchange value--determined at this stage by the cost of

producing similar commodities by individual labor--constituted the share

of the capitalist, his profit, and the objective of his investment.

The new system did not spring up spontaneously and full-fledged. Like

feudalism, it was a growth, a development of existing forms. And just as

chattel slavery lingered on after the rise of the feudal regime, so the

old methods of individual production and direct exchange of commodities

for personal use lingered on in places and isolated industries long

after the rise of the system of wage-paid labor and production for

profit. But the old methods of production and exchange gradually became

rare and almost obsolete. In accordance with the stern economic law that

Marx afterward developed so clearly, the man whose methods of

production, including his tools, are less efficient and economical than

those of his fellows, thereby making his labor more expensive, must

either adapt himself to the new conditions or fall in the struggle which

ensues. The triumph of the new system of capitalist production, with its

far greater efficiency arising from associated production upon a plan of

specialized division of labor, was, therefore, but a question of time.

The class of wage-workers thus gradually increased in numbers; as men

found that they were unable to compete with the new methods, they

accepted the inevitable and adapted themselves to the new conditions.

The industrial revolution which established capitalism was, like the

great revolutions which ushered in preceding social epochs, the product

of man's tools.

FOOTNOTES:

[60] Edward Clodd, _Pioneers of Evolution from Thales to Huxley_, page

1.

[61] _Socialism and Modern Science_, by Enrico Ferri, page 96.

[62] _Studies in the Evolution of Industrial Society_, by R. T. Ely,

page 3.

[63] Cf. Seligman, _The Economic Interpretation of History_.

[64] Clodd, _Pioneers of Evolution from Thales to Huxley_, page 8.

[65] Seligman, _The Economic Interpretation of History_, page 50.

[66] _Mass and Class_, by W. J. Ghent, page 9.

[67] Seligman, _The Economic Interpretation of History_, page 4.

[68] Schiller, _Philosophical Letters_, Preamble.

[69] Seligman, _The Economic Interpretation of History_, page 86.

[70] Karl Marx, _Notes on Feuerbach_ (written in 1845), published as an

Appendix to _Feuerbach, The Roots the Socialist Philosophy_, by

Friederich Engels. English translation by Austin Lewis (1903).

[71] _Christianity and the Social Crisis_, by Walter Rauschenbusch

(1907), page 4.

[72] For a very scholarly discussion of this subject, the reader is

referred to the series of articles by my friend, M. Beer, on _The Rise

of Jewish Monotheism_, in the _Social Democrat_ (London), 1908.

[73] Cf. _The Economic Foundations of Society_, by Achille Lorio, page

26.

[74] _Capital_, by Karl Marx (Kerr edition). Vol. I, page 91.

[75] Cf. _Karl Marx on Sectarianism and Dogmatism_ (A letter written to

his friend, Bolte), in the _International Socialist Review_, March,

1908, page 525.

[76] Very significant of the possibilities of a study of religious

movements from this economic and social viewpoint is Professor Thomas C.

Hall's little book, _The Social Meaning of Modern Religious Movements in

England_ (1900).

[77] Appendix to F. Engels' _Feuerbach, the Roots of the Socialist

Philosophy_, translated by Austin Lewis, 1903.

[78] _The Eighteenth Brumaire._

[79] Quoted from _The Sozialistische Akademiker_, 1895, by Seligman,

_The Economic Interpretation of History_, page 142.

[80] _Idem_, page 143.

[81] _Karl Marx's Nationaloekonomische Irrlehren_, von Ludwig Slonimski,

Berlin, 1897.

[82] I have not attempted to give a history of the development of the

theory. For a more minute study of the theory, I must refer the reader

to the writings of Engels, Seligman, Ferri, Ghent, Bax, and others

quoted in these pages.

[83] _Capital_, Vol. I, page 406 n. (Kerr edition).

[84] Liebknecht, _Memoirs of Karl Marx_, page 91.

[85] _Charles Darwin and Karl Marx, A Comparison_, by Edward Aveling,

London, 1897.

[86] See Thorold Rogers, _The Economic Interpretation of History_,

second edition, 1891, pages 10-12.

[87] For various reasons, chief of which is that it would take me too

far away from my present purpose, I do not attempt to develop the

serious consequences of these events to Europe. See _The Economic

Interpretation of History_, Chapter I, for a brief account of this.

[88] _Ancient Society, or Researches in the Lines of Human Progress from

Savagery through Barbarism to Civilization_, by Lewis H. Morgan. New

edition, Chicago, 1907.

[89] Darwin, _The Descent of Man_, second edition, page 163.

[90] _Mutual Aid a Factor of Evolution_, by Peter Kropotkin, pages 5-6.

[91] _Idem_, page 74.

[92] Cf. _Ancient Society_, by Lewis H. Morgan, and _The Origins of the

Family, Private Property, and the State_, by Friederich Engels.

[93] Engels, _Origin of the Family, Private Property, and the State_, p.

182.

CHAPTER V

CAPITALISM AND THE LAW OF CONCENTRATION

I

Such was the mode of the development of capitalistic production in its

first stage. In this stage a permanent wage-working class was formed,

new markets were developed, many of them by colonial expansion and

territorial conquest, and production for sale and profit became the

rule, instead of the exception as formerly when men produced primarily

for use and sold only their surplus products. A new form of class

division thus arose out of this economic soil. Instead of being bound to

the land as the serfs had been under feudalism, the wage-workers were

bound to their tools. They were not bound to a single master, they were

not branded on the cheek, but they were, nevertheless, dependent upon

the industrial lords. Economic mastery gradually shifted from the

land-owning class to the class of manufacturers. The political and

social history of the Middle Ages is largely the record of the struggle

for supremacy which was waged between these two classes. That struggle

is the central fact of the Protestant Reformation and the Cromwellian

Commonwealth.

The second stage of capitalism begins with the birth of the machine age;

the introduction of the great mechanical inventions of the latter half

of the seventeenth century, and the resulting industrial revolution, the

salient features of which we have already traced. That revolution

centered in England, whose proud but, from all other points of view than

the commercial, foolish boast for a full century it was to be "the

workshop of the world." The new methods of production, and the

development of trade with India, and the colonies and the United States

of America, providing a vast and apparently almost unlimited market, a

tremendous rivalry was created among the people of England, tauntingly,

but with less originality than bitterness, designated "a nation of

shopkeepers" by Napoleon the First. Competition flourished and commerce

grew under its mighty urge. Quite naturally, therefore, competition came

to be regarded as "the life of trade," and the one supreme law of

progress by British economists and statesmen. The economic conditions of

the time fostered a sturdy individualism on the one hand, expressing

itself in a policy of _laissez faire_, which, paradoxically, they as

surely destroyed. The result was the paradox of a nation of theoretic

individualists becoming, through its poor laws, and more especially

through the vast body of industrial legislation which developed in

spite of theories of _laissez faire_, a nation of practical

collectivists.

The third and last stage of capitalism is characterized by new forms of

industrial ownership, administration, and control. Concentration of

industry and the elimination of competition are the distinguishing

features of this stage. When, more than half a century ago, the

Socialists predicted an era of industrial concentration and monopoly as

the outcome of the competitive struggles of the time, their prophecies

were mocked and derided. Yet, at this distance of time, it is easy to

see what they were foresighted enough to envisage in the future; easy

enough to see that competition carries in its bosom the germs of its own

inevitable destruction. In words which, as Professor Ely says,[94] seem

to many, even non-Socialists, like a prophecy, Karl Marx argued that the

business units in production would continuously increase in magnitude,

until at last monopoly emerged from the competitive struggle. This

monopoly becoming a shackle upon the system under which it has grown up,

and thus becoming incompatible with capitalist conditions, socialization

must, according to Marx, naturally and necessarily follow.[95] In this

as in all the utterances of Marx upon the subject we are reminded of

the distinction which must be made between Socialism as he conceived it

and the Socialism of the Utopians. We never get away from the law of

economic interpretation. Socialism, according to Marx, will develop out

of capitalist society, and follow capitalism necessarily and inevitably.

It is not a plan to be adopted, but a stage of social development to be

reached.

II

For the moment, we are not concerned with the prediction that Socialism

must follow the full development of capitalism. The important point for

our present study is the predicted growth of monopoly out of

competition, and the manner in which that prediction has been realized.

Concerning the manner and extent of the fulfillment of this prediction,

there have been many keen controversies, both within and without the

ranks of the followers of Marx. While Marx and Engels are properly

regarded as the first scientific Socialists, having been the first to

postulate Socialism as the outcome of evolution, and to explore the laws

of that evolution, they were not wholly free from the failings of the

Utopists. It would be unreasonable to expect them to be absolutely free

from the spirit of their age and their associates. There is, doubtless,

something Utopian in the very mechanical conception of capitalist

concentration which Marx held; the process is too simple and sweeping,

the revolution too imminent. Still, by followers and critics alike, it

is generally conceded that the _control_ of the means of production is

being concentrated into the hands of small and ever smaller groups of

capitalists. In recent years the increase in the number of industrial

establishments has not kept pace with the increase in the number of

workers employed, the increase of capital, or the value of the products

manufactured. Not only do we find small groups of men controlling

certain industries, but a selective process is clearly observable,

giving to the same groups of men control of various industries otherwise

utterly unrelated.

In the early stages of the movement toward concentration and

trustification, it was possible to classify the leading capitalists

according to the industries with which they were identified. One set of

capitalists, "Oil Kings," controlled the oil industry; another set,

"Steel Kings," controlled the iron and steel industry; another set,

"Coal Barons," controlled the coal industry, and so on throughout the

industrial and commercial life of the nation. To-day all this has been

changed. An examination of the "Directory of Directors" shows that the

same men control varied enterprises. The Oil King is at the same time a

Steel King, a Coal Baron, a Railway Magnate, and so on. The men who

comprise the Standard Oil group, for instance, are found to control

hundreds of other companies. They include in the scope of their

directorate, banking, insurance, milling, real estate, railroad and

steamship lines, gas companies, sugar, coffee, cotton, and tobacco

companies, and a heterogeneous host of other concerns. Not only so, but

these same men are large holders of investments in all the great

European countries, as well as India, Australia, Africa, Asia, and the

South American countries, while foreign capitalists similarly, but to a

less extent, hold large investments in American companies. Thus, the

concentration of industrial control, through its finance, has become

interindustrial and is rapidly becoming international. The predictions

of Marx are being fulfilled, even though not in the precise manner

anticipated by him.

III

During recent years there have been many criticisms of the Marxian

theory, aiming to show that this concentration has been, and is, much

more apparent than real. Some of the most important of these criticisms

have come from within the ranks of the Socialist movement itself, and

have been widely exploited as portending the disintegration of the

Socialist movement. _Inter alia_, it may be remarked here that a certain

fretfulness of temper characterizes most of the critics of Socialism.

Strict adherence to the letter of Marx is pronounced as a sign of

intellectual bondage of the movement and its leaders to the "Marxian

fetish," and, on the other hand, every recognition of the human

fallibility of Marx by a Socialist thinker is hailed as a sure portent

of a split in the movement. Yet the most serious criticisms of Marx have

come from the ranks of his followers--perhaps only another sign of the

intellectual bankruptcy of the academic opposition to Socialism.

Of course, Marx was human and fallible. If "Capital" had never been

written, there would still have been a Socialist movement, and if it

could be destroyed by criticism, the Socialist movement would remain.

Socialism is the product of economic conditions, not of a theory or a

book. "Capital" is the intellectual explanation of the genesis of

Socialism, and neither its cause nor an argument for it by which it must

be judged. Hence the futility of such missions as that undertaken by Mr.

W. H. Mallock, for example, based upon the assumption that attacks upon

the text of Marx will serve to destroy or seriously hinder the living

movement. Like a prophet's rebuke to these critics, as well as to those

within the ranks of the Socialist movement who would make of the words

of Marx and Engels fetters to bind the movement to a dogma, come the

words of Engels, published recently, letters in which he writes

vigorously to his friend Sorge concerning the working-class movement in

England and America. Of his compatriots, the handful of German Socialist

exiles in America, who sought to make the American workers swallow a

mass of ill-digested Marxian theory, he writes, "The Germans have never

understood how to apply themselves from their theory to the lever which

could set the American masses in motion; to a great extent they do not

understand the theory itself and treat it in a doctrinaire and dogmatic

fashion.... It is a credo to them, not a guide to action." And again,

"Our theory is not a dogma, but the exposition of a process of

evolution, and that process involves several successive phases." Of the

English movement he writes, "And here an instinctive Socialism is more

and more taking possession of the masses which, _fortunately_, is

opposed to all distinct formulation according to the dogmas of one or

the other so-called organizations," and again, he condemns "the bringing

down of the Marxian theory of development to a rigid orthodoxy."[96] The

critics who hope to destroy the Socialist movement of to-day by

stringing together mistaken predictions of Marx and Engels, or who think

that Socialism is losing its grip because it is adjusting its

expressions to the changed conditions which the progress of fifty years

has brought about, utterly mistake the character of the movement. In

its abandonment of the errors of Marx it is most truly Marxian--because

it is expressing life instead of repeating dogma.

Doubtless Marx anticipated a much more complete concentration of capital

and industry than has yet taken place; doubtless, too, he underrated the

powers of endurance of some petty industries, and saw the breakdown of

capitalism in a cataclysm, whereas modern Socialists see its merging

into a form of socialization. But, when all this is admitted, it cannot

be fairly said that the sum of criticism has seriously affected the

general Marxian theory, as apart from its particular exposition by Marx

himself. So far as the criticism has touched the subject of capitalist

concentration, it has been pitifully weak, and the furore it has created

seems almost pathetic. The main results of this criticism may be briefly

summarized as follows: First, in industry, the persistence, and, in some

cases, even increase, of petty industries; second, in agriculture, the

failure of large-scale farming, and the decrease of the average farm

acreage; third, in retail trade, the persistence of the small stores,

despite the growth in size and number of the great department stores;

fourth, the fact that concentration of industry does not imply a like

concentration of wealth, the number of shareholders in a great

industrial combination being frequently greater than the number of

owners in the units of industry prior to the combination. At first

sight, and stated in this manner, it would seem as if these conclusions,

if justified by the facts, involved a serious and far-reaching criticism

of the Socialist theory of a universal tendency toward the concentration

of industry and commerce into units of ever increasing magnitude.

But upon closer examination, these conclusions, their accuracy admitted,

are seen to involve no very damaging criticism of the theory. To the

superficial observer, the mere increase in the number of industrial

establishments seems a much more important matter than to the careful

student, who is not easily deceived by appearances. The student sees

that while some petty industries undoubtedly do increase in number, the

increase of large industries employing many more workers and much larger

capitals is vastly greater. Furthermore, he sees what the superficial

observer constantly overlooks, namely, that these petty industries are,

for the most part, unstable and transient, being continually absorbed by

the larger industrial combinations or crushed out of existence, as soon

as they have obtained sufficient vitality and strength to make them

worthy of notice, either as tributaries to be desired or potential

competitors to be feared. Petty industries in a very large number of

cases represent a stage in social descent, the wreckage of larger

industries whose owners are economically as dependent as the ordinary

wage-workers, or even poorer and more to be pitied. Where, on the

contrary, it is a stage in social ascent, the petty industry is,

paradoxical as the idea may appear, frequently part of the process of

industrial concentration. By independent gleaning, it endeavors to find

sufficient business to maintain its existence. If it fails in this, its

owner falls back to the proletarian level from which, in most instances,

he arose. If it succeeds only to a degree sufficient to maintain its

owner at or near the average wage-earner's level of comfort, it may pass

unnoticed and unmolested. If, on the other hand, it gleans sufficient

business to make it desirable as a tributary, or potentially dangerous

as a competitor, the petty business is pounced upon by its mightier

rival and either absorbed or crushed, according to the temper or need of

the latter. Critics of the Marxian theory have for the most part

completely failed to recognize this significant aspect of the subject,

and attached far too much importance to the continuance of petty

industries.

IV

What is true of petty industry is true in even greater measure of retail

trade. Nothing could well be further from the truth than the hasty

generalization of some critics, that an increase in the number of retail

business establishments invalidates the theory of a progressive

concentration of capital. In the first place, many of these

establishments have no independence whatsoever, but are merely agencies

of larger enterprises. Mr. Macrosty has shown that in London the cheap

restaurants are in the hands of four or five firms, and this is a branch

of business which, because it calls for relatively small capital, shows

in a marked manner the increase of establishments. Much the same

conditions exist in connection with the trade in milk and bread.[97]

Similar conditions prevail in almost all the large cities of this

country. Single companies are known to control hundreds of saloons,

restaurants, cigar stores, shoe stores, bake shops, coal depots, and the

like. A multitude of other businesses are subject to this rule, and it

is doubtful whether, after all, there has been the real increase of

individual ownership which Mr. Ghent concedes.[98] However that may be,

it is certain that a very large number of the business establishments

which figure as statistical units in the argument against the Socialist

theory of the concentration of capital might very properly be regarded

as so many evidences in its favor.

A very large number of small businesses, moreover, are really

manipulated by speculators, and serve only as a means of divesting

prudent and thrifty artisans and others of their little savings.

Whoever has lived in the poorer quarters of a great city, where small

stores are most numerous, and has watched the changes constantly

occurring in the stores of the neighborhood, will realize the

significance of this observation. The writer has known stores on the

upper East Side of New York, where for several years he resided, change

hands as many as six or seven times in a single year. What happened was

generally this: A workingman having been thrown out of employment, or

forced to give up his work by reason of age, sickness, or accident,

decided to attempt to make a living in "business." In a few weeks, or a

few months at most, his small savings were swallowed up, and he had to

leave the store, making place for the next victim. An acquaintance of

the writer owns six tenement houses in different parts of New York City,

the ground floors of which are occupied by small stores. These stores

are rented by the month just as other portions of the buildings are, and

the owner, on going over his books for a period of five years, found

that the average duration of tenancy in them had been less than eight

months.

During the past few years in the United States, as a result of the

development of the many inventions for the production of "moving

pictures," a new kind of cheap, popular theater has become common.

Usually the charge of admission is five cents, whence the name

"Nickelodeon"; the entertainment consists usually of a number of more or

less dramatic incidents portrayed by means of the pictures, and a few

songs, generally illustrated by pictures, and sung to the accompaniment

of a mechanical piano. In almost every town in the United States these

cheap pictorial theaters have appeared and their number will, doubtless,

considerably swell the total of business establishments. In the small

towns of the State of New York, the writer made an investigation and

found that there were frequently several such places in the same town;

that they were practically all built by the same persons, started by

them, and then leased to others. These were generally people with small

savings who, in the course of a few weeks, lost all their money and

retired, their places being taken by other victims of the speculators.

What seemed to the casual observer an admirable and conspicuous example

of an increase in petty business, proved, upon closer study, to be a

very striking example of concentration, disguised for purposes of

speculation.

Thus reduced, the increase of small industries and retail establishments

affects the contention that there is a general tendency to concentration

very little. It does perhaps seriously weaken, or even destroy, some

extreme statements of the theory, contending that the process of

monopolization must be a direct, simple process of continuous absorption

and elimination, leaving each year fewer small units than before. Small

stores do exist; they have not been put out of existence by the big

department stores as was at one time confidently predicted. They serve a

real social need by supplying the minor commodities of everyday use in

small quantities, just as the petty industries serve a real social need.

Many of them are conducted by married women to supplement the earnings

of their husbands, or by widows; others by men unable to work, whose

income from them is less than the wages of artisans. Together, these

probably constitute a majority of the small retail establishments which

show any tendency to increase.[99]

The effect of this increase is still further lessened when it is

remembered that only the critics of Socialism interpret the Marxian

theory to mean that _all_ petty industry and business must disappear,

that all must be concentrated into large industrial and commercial

units, to make Socialism possible. If we are to judge Marxism as the

basis of the Socialist movement, we must judge it by the interpretation

given to it by the Socialists, and not otherwise. There is no Socialist

of note to-day who does not realize that many small industrial and

business enterprises will continue to exist for a very long time, even

continuing to exist under a Socialist regime. Kautsky, perhaps the

ablest living exponent of the Marxian theories, leader of the "Orthodox"

Marxists, admits this. He has very ably argued that the ripeness of

society for Socialism, for social production and control, depends, not

upon the number of little industries that still remain, but upon the

number of great industries which already exist.[100] The ripeness of

society for Socialism is not disproved by the number of ruins and relics

abounding. "Without a developed great industry, Socialism is

impossible," says this writer. "Where, however, a great industry exists

to a considerable degree, it is easy for a Socialist society to

_concentrate production, and to quickly rid itself of the little

industry_."[101] It is the increase of large industries, then, which

Socialists regard as the essential preliminary condition of Socialism.

Far more important than the increase or decrease of the number of units

is their relative significance in the total production, a phase of the

subject which is rather disingenuously avoided by most critics of

Marxism. Mr. Lucien Sanial, a Socialist statistician of repute, and one

of the profoundest Marxian students in America, has shown this in a

number of suggestive tables. For example, he takes twenty-seven typical

manufacturing industries for the years 1880, 1900, and 1905, and

compares the number of establishments in each year with the total amount

of capital invested and workers employed. In 1880 the number of

establishments was 63,233; in 1900 the number was 51,912, and in 1905 it

was only 44,142. From 1880 to 1905 there had been a decrease in the

number of establishments of 35.3 per cent, of which 15 per cent took

place within the last five years. But within the same period there had

been an increase in the amount of capital invested in these twenty-seven

industries as follows: from $1,276,600,000 in 1880 to $3,324,500,000 in

1900 and to $4,628,800,000 in 1905--a total increase from 1880 to 1905

of 262.6 per cent. On the other hand, the number of wage-workers

increased in the same period only 60.2 per cent, the number in 1905

being 1,731,500, as against 1,611,000 in 1900 and 1,080,200 in 1880.

In another table, forty-seven industries are taken. These forty-seven

industries comprised 29,800 establishments in 1900; five years later

there were but 26,182. In 1900 the total capital invested in these

industries was $1,005,400,000, and in 1905 it had increased to

$1,339,500,000. In the same five years the number of wage-workers

increased only from 618,000 to 749,000. Thus, in the group of larger

industries and the group of smaller ones we find the same evidences of

concentration: less establishments, larger capitals, and an increase of

wage-workers not equal to the increase in capitalization.[102]

In connection with these figures, the following table may be profitably

studied, as showing the relative insignificance of the small producer in

the total volume of manufacture. It will be seen that the two largest

classes of establishments have only 24,163 establishments, 11.2 per cent

of the total number. But they have $10,333,000,000, or 81.5 per cent of

the total manufacturing capital, and employ 71.6 per cent of all

wage-workers in manufacturing industries. It may be added that they turn

out 79.3 per cent of the total product. Of the petty industries proper,

those having a capital of less than $5000, it will be observed that they

number 32.9 per cent of the total number of establishments, but employ

only 1.3 per cent of the capital invested, and only 1.9 per cent of the

wage-workers. It is clear, therefore, that our manufacturing industry in

very highly concentrated, and that the petty industries are, despite

their number, a very insignificant factor.

TABLE OF MANUFACTURING ESTABLISHMENTS, 1905[103]

CAPITALS NUMBER PER TOTAL CAPITAL PER NO. OF PER

CENT CENT WAGE-WORKERS CENT

Less than

$5,000 71,162 32.9 $165,300,000 1.3 106,300 1.9

$5,000 to

$20,000 72,806 33.7 531,100,000 4.2 419,600 7.7

$20,000 to

$100,000 48,144 22.2 1,655,800,000 13.0 1,027,700 18.8

$100,000 to

$1,000,000 22,281 10.0 5,551,700,000 43.8 2,537,550 46.4

Over

$1,000,000 1,882 0.9 4,782,300,000 37.7 1,379,150 25.2

When we turn to agriculture, the criticisms of the Socialist theory

appear more substantial and important. A few years ago we witnessed the

rise and rapid growth of the great bonanza farms in this country. It was

shown that the advantages of large capital and the consolidation of

productive forces resulted, in farming as in manufacture, in greatly

cheapened production.[104] The end of the small farm was declared to be

imminent, and it seemed for a while that concentration in agriculture

would even outrun concentration in manufacture. This predicted

absorption of the small farms by the larger, and the average increase of

farm acreage, has not, however, been fulfilled to any great degree. An

increase in the number of small farms, and a decrease in the average

acreage, is shown in almost all the states. The increase of great

estates shown by the census figures probably bears little or no relation

to real farming, consisting mainly of great stock grazing ranches in the

West, and unproductive gentlemen's estates in the East.

Apparently, then, the Socialist theory that "the big fish eat up the

little ones, and are in turn eaten by still bigger ones," is not

applicable to agriculture. On the contrary, it seems that the great

farms cannot compete successfully with the smaller farms. It is

therefore not surprising that writers so sympathetic to Socialism as

Professor Werner Sombart and Professor Richard T. Ely should claim that

the Marxian system breaks down when it reaches the sphere of

agricultural industry, and that it seems to be applicable only to

manufacture. This position has been taken by a not inconsiderable body

of Socialists in recent years, and is one of the tenets of that critical

movement within the Socialist ranks which has come to be known as

"Revisionism." Nothing is more delusive than statistical argument of

this kind, and while these conclusions should be given due weight, they

should not be too hastily accepted. An examination of the statistical

basis of the argument is necessary.

In the first place, small agricultural holdings do not necessarily

imply economic independence, any more than do petty industries or

businesses. When we examine the census figures carefully, the first

important fact which challenges attention is that, whereas of the farms

in the United States in 1880, 71.6 per cent were operated by their

owners, in 1900 the _proportion_ had declined to 64.7 per cent. In 1900,

of the 5,739,657 farms in the United States, no less than 2,026,286 were

operated by tenants. Concerning the ownership of these rented farms

little investigation has been made, and it is likely that careful

inquiry would elicit the fact that this is a not unimportant phase of

agricultural concentration, though not revealed by the figures in the

census reports. It remains to be said concerning these figures, however,

that they do not lend support to the theory that the small farms are

being swallowed up by the larger ones, for in the same period there was

a very decided increase in the _number_ of farms operated by their

owners. Thus we have the same set of figures used to support both sides

of the controversy--one side calling attention to the decreased

_proportion_ of farms operated by their owners, the other to the

increased _number_.

A similar difficulty presents itself in connection with the subject of

mortgaged farm holdings. In 1890, the mortgaged indebtedness of the

farmers of the United States amounted to the immense sum of

$1,085,995,960, a sum almost equal to the value of the entire wheat

crop. Now, while a mortgage is certainly not suggestive of independence,

it may be either a sign of decreasing or increasing independence. It may

be a step toward the ultimate loss of one's farm or a step toward the

ultimate ownership of one. Much that has been written by Populist and

Socialist pamphleteers and editors upon this subject has been based upon

the entirely erroneous assumption that a mortgaged farm meant loss of

economic independence, whereas it often happens that it is a step toward

it. The fact is that we know very little concerning the ownership of

these mortgages, which is the crux of the question. It is known that

many of the insurance, banking, and trust companies have invested

largely in farm mortgages. This is another phase of concentration which

the critics of the theory have overlooked almost entirely. One thing

seems certain, namely, that farm ownership is not on the decline. It is

not being supplanted by tenantry; the small farms are not being absorbed

by larger ones. It seems a fair deduction from the facts, then, that the

small farmer will continue to be an important factor--indeed, the most

important factor--in American agriculture for a long time to come,

perhaps permanently. If the Socialist movement is to succeed in America,

it must recognize this fact in its propaganda.

V

Most of the criticism of the Marxian theory of concentration is based

upon a very unsatisfactory definition of what is meant by concentration.

The decrease of small units and their absorption or supercession by

larger units is generally understood when concentration is spoken of.

But concentration may take other, very different forms. There may be a

concentration of _control_, for example, without concentration of actual

ownership, or there may be concentration of actual ownership disguised

by mortgages, as already suggested. The sweated trades are a familiar

example of the former method of concentration. It has been shown over

and over again that while small establishments remain a necessary

condition of sweated industry, there is almost always effective

concentration of control. To all appearances an independent manufacturer

on a small scale, the sweater is generally nothing more than the agent

of some big establishment, which finds it more economical to let the

work be done in sweatshops than in its own factories. The same thing

holds good of the retail trades, many of the apparently independent

retail stores being simply agencies for big wholesale houses, controlled

by them in every way. In an even larger measure, agriculture is subject

to a control that is quite independent of actual or even nominal

ownership of the farm. Manifestly, therefore, we need a more accurate

and comprehensive definition of concentration than the one generally

accepted. Mr. A. M. Simons, in an admirable study of the agricultural

question from the Socialist viewpoint, defines concentration as "a

movement tending to give a continually diminishing minority of the

persons engaged in any industry, a constantly increasing control over

the essentials, and a continually increasing share of the total value of

the returns of the industry."[105] It is no part of the purpose of this

chapter to discuss this definition at length. It is sufficient to have

thus emphasized that concentration may be quite as effective when it is

limited to control as when it embraces ownership.

There are, then, other forms of concentration than the physical one, the

amalgamation of smaller units to form larger ones, and very often these

forms of concentration go on unperceived and unsuspected. There can be

no doubt that this is especially true of agricultural industry. Many

branches of farming, as the industry was carried on by our fathers and

their fathers before them, have been transferred from the farmhouse to

the factory. Butter and cheese making, for example, have largely passed

out of the farm kitchen into the factory. The writer recalls a visit to

a large farm in the Middle West. The sound of a churn is never heard

there, notwithstanding that it is a "dairy farm," and all the butter

and cheese consumed in that household is bought at the village store.

Doubtless this farm but presented an exaggerated form of a condition

that is becoming more and more common. The invention of labor-saving

machinery and its application to agriculture leads to a division of the

industry and the absorption by the factory of the parts most influenced

by the new processes. When we remember the tremendous role which complex

agencies outside of the farm play in modern agricultural industry, we

see the subject of concentration as it applies to that industry in a new

light. The grain elevators, cold-storage houses, creameries, and even

railroads, are part of the necessary equipment of production, but they

are owned and operated independently of the farm. There is a good deal

of concentration of production in agriculture which takes the form of

the absorption of some of its processes by factories instead of by other

farms.

VI

We must also distinguish between the concentration of industry and the

concentration of wealth. While there is a natural relation between these

two phenomena, they are by no means identical. The trustification of a

given industry may bring together a score of industrial units in one

gigantic concern, so concentrating capital and production, but it is

conceivable that every one of the owners of the units which compose the

trust may have a share in it equal to the capital value of his

particular unit, but more profitable. In that case, there can obviously

be no concentration of wealth. What occurs is that all are benefited by

certain economies, in exact proportion to their holdings in the capital

stock. It may even happen that a larger number of persons participate,

as shareholders, in the amalgamation than were formerly concerned in the

ownership of the units of which the amalgamation is composed. Assuming,

for the purposes of our argument, that these persons are represented by

new capital, that the former owners of independent units share upon an

equitable basis, there will be increased diffusion of wealth instead of

its concentration. As Professor Ely says, "If the stock of the United

States Steel Corporation were owned by individuals holding one share

each, the concentration in industry would be just as great as it is now,

but there would be a wide diffusion in the ownership of the wealth of

the corporation."[106]

Obvious as this distinction may seem, it is very often lost sight of,

and when recognized it presents difficulties which are almost

insurmountable. It is well-nigh impossible to present statistically the

relation of the concentration of capital to the concentration or

diffusion of wealth, important as the point is in its bearings upon

modern Socialist theory. While the distinction does not affect the

argument that the concentration of capital and industry makes their

socialization possible, it is nevertheless an important matter. If, as

some writers, notably Bernstein,[107] the Socialist, have argued, the

concentration of capital and industry really leads to the

decentralization of wealth, and the diffusion of the advantages of

concentration among the great mass of the people, especially by creating

a new class of salaried dependents, then, instead of creating a class of

exploiters ever becoming less numerous, and a class of proletarians ever

becoming more numerous, the tendency of modern capitalism is to

distribute the gains of industry over a widening area--a process of

democratization in fact. It is very evident that if this contention is a

correct one, there must be a softening rather than an intensifying of

class antagonisms; a tendency away from class divisions, and to greater

satisfaction with present conditions, rather than increasing discontent.

If this theory can be sustained, the advocates of Socialism will be

obliged to change the nature of their propaganda from an appeal to the

economic interest of the proletariat to the general ethical sense of

mankind. There can be no successful movement based upon the interests

of one class if the tendency of modern capitalism is to democratize the

life of the world and diffuse its wealth over larger social areas than

ever before.

The exponents of this theory have based their arguments upon statistical

data chiefly relating to: (1) The number of taxable incomes in countries

where incomes are taxed; (2) the number of investors in industrial and

commercial countries; (3) the number of savings bank deposits. As often

happens when reliance is placed upon the direct statistical method, the

result of all the discussion and controversy upon this subject is

extremely disappointing and confusing. The same figures are used to

support both sides of the argument with equal plausibility. The

difficulty lies in the fact that the available statistics do not include

all the facts essential to a scientific and conclusive result.

It is not intended here to add to the Babel of voices in this

discussion, but to present the conclusions of two or three of the most

careful investigators in this field. Professor Ely[108] quotes a table

of incomes in the Grand Duchy of Baden, based upon the income tax

returns of that country, which has formed the theme of much dispute. The

table shows that in the two years, 1886 and 1896, less than one per cent

of the incomes assessed were over 10,000 marks a year, and from this

fact it has been argued that wealth in that country has not been

concentrated to any very great extent. In like manner, the French

economist, Leroy-Beaulieu, has argued that the fact that in 1896 only

2750 persons in Paris had incomes of over 100,000 francs a year betokens

a wide diffusion of wealth and an absence of concentration.[109] But the

important point of the discussion, the _proportion of the total wealth

owned by these classes_, is entirely lost sight of by those who argue in

this manner. Further, it must always be borne in mind that there is a

decided tendency in all income tax schedules to understate the amount of

incomes above a certain size, the larger the income the more likelihood

of its being understated in the returns. The psychology of this fact

needs no elaborate demonstration. Taking the figures for the Grand Duchy

of Baden as they are given, we have no particulars at all concerning the

number of incomes under 500 marks, but of the persons assessed upon

incomes of 500 marks and over, in 1886, the poorest two thirds had about

one third of the total income, and the richest 0.69 per cent had 12.78

per cent of the total income. So far, the figures show a much greater

concentration of wealth than appears from the simple fact that less than

one per cent of the incomes assessed were over 10,000 marks a year.

Going further, we compare the two years, 1886 and 1896, and find that

this concentration increased during the ten-year period as follows: In

1886, there were 2212 incomes of more than 10,000 marks assessed, being

0.69 per cent of the total number. In 1896, there were 3099 incomes of

more than 10,000 marks assessed, being 0.78 per cent of the total

number. In 1886, 0.69 per cent of the incomes assessed amounted to

51,403,000 marks, representing 12.77 per cent of the total assessed

wealth; while in 1896, 0.78 per cent of the incomes assessed amounted to

81,986,000 marks, representing 15.02 per cent of the total wealth so

assessed. In 1886 there were 18 incomes of over 200,000 marks a year,

aggregating 6,864,000 marks, 1.70 per cent of the total value of all

incomes assessed; in 1896, there were 28 such incomes, aggregating

12,481,000 marks, or 2.29 per cent of the total value of all incomes

assessed. The increase of concentration shown by these figures is not

disputable, it seems to the present writer, when they are thus carefully

analyzed, notwithstanding the fact that the table from which they are

drawn is sometimes used to support the opposite contention.

According to the late Professor Richmond Mayo-Smith,[110] seventy per

cent of the population of Prussia have incomes below the income tax

standard, their total income representing only one third of the total

income of the population. An additional one fourth of the population

enjoys one third of the total income, while the remaining one third goes

to about four per cent of the people. The significance of these figures

is clearly shown by the following diagram:--

[Illustration:

DIAGRAM

SHOWING THE DISTRIBUTION OF INCOME BY CLASSES IN PRUSSIA]

In Saxony the statistics show that "two thirds of the population possess

less than one third of the income, and that 3.5 per cent of the upper

incomes receive more than 66 per cent at the lower end." From a table

prepared by Sir Robert Giffen, a notoriously optimistic statistician,

always the exponent of an ultra-roseate view of social conditions,

Professor Mayo-Smith concludes that in England, "about ten per cent of

the people receive nearly one half of the total income."[111] These

figures are rather out of date, it is true, but they err in understating

the amount of concentration rather than otherwise, as the researches of

Mr. Chiozza Money, M.P., and others show.[112]

In this country, the absence of income tax figures makes it impossible

to get direct statistical evidence as to the distribution of incomes.

The most careful estimate of the distribution of wealth in the United

States yet made is that by the late Dr. Charles B. Spahr.[113] Written

in 1895, Dr. Spahr's book cannot be regarded as an accurate presentation

of conditions as they exist at the present moment, yet here again there

is every reason to believe that the process of concentration has gone on

unchecked since he wrote. It is not necessary for our present purpose,

however, to accept the estimate of Dr. Spahr as authoritative and

conclusive. The figures are quoted here simply as the result reached by

the most patient, conscientious, and scientific examination of the

distribution of wealth in this country yet made. Dr. Spahr's conclusion

was that in 1895 less than one half of the families in the United States

were property-less; but that, nevertheless, seven eighths of the

families owned only one eighth of the national wealth, while one per

cent of the families owned more than the remaining ninety-nine per cent.

Mr. Lucien Sanial, in a most careful analysis of the census for 1900,

shows that, classified according to occupations, 250,251 persons

possessed $67,000,000,000, out of a total of $95,000,000,000 given as

the national wealth; that is to say, 0.9 per cent of the total number in

all occupations owned 70.5 per cent of the total national wealth. The

middle class, consisting of 8,429,845 persons, being 29.0 per cent of

the total number in all occupations, owned $24,000,000,000, or 25.3 per

cent of the total national wealth. The lowest class, the proletariat,

consisting of 20,393,137 persons, being 70.1 per cent of the total

number in all occupations, owned but $4,000,000,000, or 4.2 per cent of

the total wealth. To recapitulate: Of the 29,073,233 persons ten years

old and over engaged in occupations,

0.9 per cent own 70.5 per cent of total wealth.

29.0 per cent own 25.3 per cent of total wealth.

70.1 per cent own 4.2 per cent of total wealth.

Startling as these figures are, it will be evident upon reflection that

they do not adequately represent the amount of wealth concentration. The

occupational basis is not quite satisfactory as applied to the richest

class. It serves for the proletarian class, of course, and for a very

large part of the middle class. In these classes, as a rule, the

_occupied_ persons represent wealth ownership. But this is by no means

true of the richest class. In this class we have a very considerable

proportion of the wealth owned by _unoccupied_ persons, such as the

wives rich in their own right, children and other unoccupied members of

families rich by inheritance. Mr. Henry Laurens Call, in a paper read

before the American Association for the Advancement of Science, at

Columbia University, at the end of 1906, made these figures the basis of

the startling estimate that one per cent of our population own not less

than ninety per cent of our total wealth.

There is a peculiarity of modern capitalism which enables the great

capitalists to control vastly more wealth than they own. Take any group

of large capitalists, and it will be found that they _control_ a much

greater volume of capital than they _own_. The invested capital of a

multitude of small investors is in their keeping, and they can and do

use it for purposes of their own. Thus we have a concentration of

capitalist control which goes far beyond the concentration of ownership.

And this concentration of the essential control of the capital of a

country becomes more and more important each year. It is recognized

to-day that the most important capitalist is not he who himself owns the

greatest amount of capital, but he who controls the greatest amount,

quite irrespective of its ownership.

The growth of immense private fortunes is an indisputable evidence of

the concentration of wealth. In 1854 there were not more than

twenty-five millionaires in New York City, their total fortunes

aggregating $43,000,000. There were not more than fifty millionaires in

the whole of the United States, their aggregate fortunes not exceeding

$80,000,000. To-day there are several individual fortunes of more than

$80,000,000 each. New York City alone is said to have over two thousand

millionaires, and the United States more than five thousand. By a

curious mental process, the _New York World_, when the first edition of

this little book appeared, sought to prove in a labored editorial that

the increase of millionaires tended to prove an increasing diffusion of

wealth rather than the contrary. It is hardly worth while, perhaps,

making any reply to such puerility. Every student knows that the

multimillionaire is only possible as a result of the concentration of

wealth, that such fortunes are realized by the absorption of numerous

smaller ones. Further, it is only necessary to add that all the

millionaires of 1854, together with the half millionaires, owned not

more than about $100,000,000 out of the total wealth, which was at that

time something like $10,000,000,000. In other words, they owned not more

than one per cent of the wealth of the country. In 1890, when the wealth

of the country was slightly more than $65,000,000,000, Senator Ingalls

could quote in the United States Senate a table showing that the

millionaires and half millionaires of that time, 31,100 persons in all,

owned $36,250,000,000, or just fifty-six per cent of the entire wealth

of the United States.[114] Professor Ely accepts the logic of the

statistical data gathered in Europe and the United States, and says

"such statistics as we have ... all indicate a marked concentration of

wealth, both in this country and Europe."[115]

VII

Summing up, we may state the argument of this chapter very briefly as

follows: The Socialist theory is that competition is self-destructive,

and that the inevitable result of the competitive process is to produce

monopoly, either through the crushing out of the weak by the strong, or

the combination of units as a result of a conscious recognition of the

wastes of competition and the advantages of cooeperation. The law of

capitalist development, therefore, is from competition and division to

combination and concentration. As this concentration proceeds, a large

class of proletarians is formed on the one hand, and a small class of

capitalist lords on the other, an essential antagonism of interests

existing between the two classes. Petty industries may continue to

exist, though, upon the whole, the tendency is toward their extinction.

In certain industries, their number may even increase, but their

relative importance is constantly decreasing. While Socialism does not

preclude the continued existence of small private industry or business,

it does require and depend upon the development of a large body of

concentrated industry, monopolies which can be transformed into social

monopolies whenever the people may decide so to transform them. These

conditions are being fulfilled in the evolution of our economic system.

The interindustrial and international trustification of industry shows a

remarkable fulfillment of the law of capitalist concentration which the

Socialists were the first to formulate; the existence of petty

industries and businesses, or their numerical increase even, being a

relatively insignificant matter compared with the enormous increase in

large industries and businesses, and their share in the total volume of

industry and commerce. In agriculture, concentration, while it does not

proceed so rapidly or directly as in manufacture and commerce, and while

it takes directions and forms unforeseen by the Socialists of a

generation ago, proceeds surely nevertheless. Along with this

concentration of capital and industry proceeds the concentration of

wealth into proportionately fewer hands. While a certain diffusion of

wealth takes place through the mechanism of capitalist concentration, by

developing a new class of highly salaried officials, and enabling

numerous small investors to own shares in great industrial and

commercial corporations, it is not sufficient to balance the

expropriation which goes on in the competitive struggle, and it is true

that a larger proportion of the national wealth is owned by a minority

of the population than ever before, that minority being proportionately

less numerous than ever before. Further, the peculiar financial

organization of modern capitalist society enables the ruling capitalists

to control and use to their own advantage the wealth of others invested

in industrial and commercial corporations. Thus to the concentration of

ownership must be added the concentration of control, which plays an

increasingly important part in capitalist economics.

Whatever defects there may be in the Marxian theory, as outlined by Marx

himself, and whatever modifications of his statement of it may be

rendered necessary by changed conditions, in its main and essential

features it has successfully withstood all the criticisms which have

been directed against it. Economic literature is full of prophecies, but

in its whole range there is not an instance of prophecy more literally

and abundantly fulfilled than that which Marx made concerning the trend

of capitalist development. And Karl Marx was not a prophet--he but read

clearly the meaning of certain facts which others had not learned to

read, the law of social dynamics. That is not prophecy, but science.

FOOTNOTES:

[94] _Studies in the Evolution of Industrial Society_, by R. T. Ely,

page 95.

[95] _Capital_, Vol. I (Kerr edition), page 837.

[96] _Briefe und Auszuege aus Briefen von Joh. Phil. Becker, Jos.

Dietzgen, Friederich Engels, Karl Marx u. A. an F. A. Sorge und Andere_,

Stuttgart, 1906.

[97] H. W. Macrosty, _The Growth of Monopoly in English Industry_

(Fabian Tract).

[98] _Our Benevolent Feudalism_, by W. J. Ghent, pages 17-21.

[99] A factor of tremendous importance in the maintenance of petty

industries and business establishments in this country, which Marx could

not have anticipated, has been the unprecedented volume of foreign

immigration. Not only have some menial personal services--such as shoe

cleaning, for example--been transformed into regular businesses by

immigrants from certain countries, but the massing together of

immigrants, aliens in language, customs, tastes, and manners, provides a

very favorable soil for the development of small business enterprises.

[100] _The Social Revolution_, by Karl Kautsky, Part I, page 144. See

also the argument by Paul Lafargue, Marx's son-in-law, that Socialism

will not oppose petty agriculture by private individuals working their

own farms.--_Revue Politique et Parliamentaire_, October, 1898, page 70.

[101] Kautsky, _The Social Revolution_, page 144.

[102] The figures are quoted from _Socialism Inevitable_, by Gaylord

Wilshire, pages 325-326.

[103] The table is quoted from _Socialism Inevitable_, by Gaylord

Wilshire, page 326.

[104] The cost of raising wheat in California, where large farming has

been most scientifically developed, is said to vary from 92.5 cents per

100 pounds on farms of 1000 acres to 40 cents on farms of 50,000 acres.

[105] _The American Farmer_, by A. M. Simons, page 97.

[106] _Studies in the Evolution of Industrial Society_, by Richard T.

Ely, page 255.

[107] _Die Voraussetzungen des Sozialismus_, by Edward Bernstein, page

47.

[108] _Studies in the Evolution of Industrial Society_, by Richard T.

Ely, pages 261-262.

[109] _Essai sur la repartition des richesses et sur la tendance a une

moindre inegalite des conditions_, par Leroy-Beaulieu, page 564.

[110] _Statistics and Economics_, by Richmond Mayo-Smith, Book III,

Distribution.

[111] _Statistics and Economics_, by Richmond Mayo-Smith, Book III,

Distribution.

[112] Cf. _Riches and Poverty_, by Chiozza Money, M.P.; also, _Fabian

Tract_, No. 5.

[113] _The Present Distribution of Wealth in the United States_, by

Charles B. Spahr (1896).

[114] _Writings and Speeches of John J. Ingalls_, page 320.

[115] _Studies in the Evolution of Industrial Society_, page 265.

CHAPTER VI

THE CLASS STRUGGLE THEORY

I

No part of the theory of modern Socialism has called forth so much

criticism and opposition as the doctrine of the class struggle. Many who

are otherwise sympathetic to Socialism denounce this doctrine as narrow,

brutal, and productive of antisocialistic feelings of class hatred. Upon

all hands the doctrine is condemned as an un-American appeal to passion

and a wicked exaggeration of social conditions. When President Roosevelt

attacks the preachers of the doctrine, and wrathfully condemns

class-consciousness as "a foul thing," he doubtless expresses the views

of a majority of American citizens. The insistence of Socialists upon

this aspect of their propaganda is undoubtedly responsible for keeping a

great many outside of their movement who otherwise would be identified

with it. If the Socialists would repudiate the doctrine that Socialism

is a class movement, and make their appeal to the intelligence and

conscience of all classes, instead of to the interests of a special

class, they could probably double their numerical strength at once. To

many, therefore, it seems a fatuous and quixotic policy to preach such a

doctrine, and it is very often charitably ascribed to the peculiar

intellectual and moral myopia of fanaticism.

Before accepting this conclusion, and before indorsing the Rooseveltian

verdict, the reader is bound as a matter of common fairness, and of

intellectual integrity, to consider the Socialist side of the argument.

There is no greater fanaticism than that which condemns what it does not

take the trouble to understand. The Socialists claim that the doctrine

is misrepresented; that it does not produce class hatred; and that it is

a vital and pivotal point of Socialist philosophy. The class struggle,

says the Socialist, is a law of social development. We only recognize

the law, and are no more responsible for its existence than for the law

of gravitation. The name of Marx is associated with the law in just the

same manner as the name of Newton is associated with the law of

gravitation, but Marx is no more responsible for the social law he

discovered than was Newton for the physical law he discovered. There

were class struggles thousands of years before there was a Socialist

movement, thousands of years before Marx was born, and it is therefore

absurd to charge us with the creation of the class struggle, or class

hatred. We realize perfectly well that if we ignored this law in our

propaganda, making our appeal to a universal sense of abstract justice

and truth, many who now hold aloof from us would join our movement. But

we should not gain strength as a result of their accession to our ranks.

We should be obliged to emasculate Socialism, to dilute it, in order to

win a support of questionable value. History teems with examples of the

disaster which inevitably attends such a course. We should be quixotic

and fatuous indeed if we attempted anything of the kind. Such, briefly

stated, are the main outlines of the reply which the average Socialist

gives to the criticism of the class struggle doctrine described.

The class struggle theory is part of the economic interpretation of

history. Since the dissolution of primitive tribal society, the modes of

economic production and exchange have inevitably grouped men into

economic classes. The theory is thus admirably stated by Engels in the

Introduction to the _Communist Manifesto_:--

"In every historical epoch, the prevailing mode of economic production

and exchange, and the social organization necessarily following from it,

form the basis upon which is built up, and from which alone can be

explained, the political and intellectual history of that epoch; and,

consequently, the whole history of mankind (since the dissolution of

primitive society, holding land in common ownership) has been a history

of class struggles, contests between exploiting and exploited, ruling

and oppressed classes; that the history of these class struggles forms a

series of evolution in which, nowadays, a stage has been reached where

the exploited and oppressed class--the proletariat--cannot attain its

emancipation from the sway of the exploiting and ruling class--the

bourgeoise--without, at the same time, and once and for all,

emancipating society at large from all exploitation, oppression, class

distinctions, and class struggles."[116]

In this classic statement of the theory, there are several fundamental

propositions. First, that class divisions and class struggles arise out

of the economic life of society. Second, that since the dissolution of

primitive tribal society, which was communistic in character, mankind

has been divided into economic groups or classes, and all its history

has been a history of struggles between these classes, ruling and ruled,

exploiting and exploited, being forever at war with each other. Third,

that the different epochs in human history, stages in the evolution of

society, have been characterized by the interests of the ruling class.

Fourth, that a stage has now been reached in the evolution of society

where the struggle assumes a form which makes it impossible for class

distinctions and class struggles to continue if the exploited and

oppressed class, the proletariat, succeeds in emancipating itself. In

other words, the cycle of class struggles which began with the

dissolution of rude, tribal communism, and the rise of private property,

ends with the passing of private property in the means of social

existence and the rise of Socialism. The proletariat in emancipating

itself destroys all the conditions of class rule.

II

As we have already seen, slavery is historically the first system of

class division which presents itself. Some ingenious writers have

endeavored to trace the origin of slavery to the institution of the

family, the children being the first slaves. It is fairly certain,

however, that slavery originated in conquest. When a tribe was conquered

and enslaved by some more powerful tribe, all the members of the

vanquished tribe sunk to one common level of servility and degradation.

Their exploitation as laborers was the principal object of their

enslavement, and their labor admitted of little gradation. It is easy to

see the fundamental class antagonisms which characterized slavery. Has

there been no uprisings of the slaves, no active and conscious struggle

against their masters, the antagonism of interests between them and

their masters would be none the less apparent. But the overthrow of

slavery was not the result of the rebellions and struggles of the

slaves. While these undoubtedly helped, the principal factors in the

overthrow of chattel slavery as the economic foundation of society were

the disintegration of the system to the point of bankruptcy, and the

rise of a new, and sometimes, as in the case of Rome, alien ruling

class.