Table of Contents
PART II THE ECONOMICS OF A SOCIALIST COMMUNITY
SECTION I The Economics of an Isolated Socialist Community
1 Stationary Conditions
The Socialist Community Under Stationary Conditions
To assume stationary economic conditions is a theoretical expedient and not an attempt
to describe reality. We cannot dispense with this line of thought if we wish to
understand the laws of economic change. In order to study movement we must first
imagine a condition where it does not exist. The stationary condition is that point
of equilibrium to which we conceive all forms of economic activity to be tending
and which would actually be attained if new factors did not, in the meantime, create
a new point of equilibrium. In the imaginary state of equilibrium all the units
of the factors of production are employed in the most economic way, and there is
no reason to contemplate any changes in their number or their disposition.
Even if it is impossible to imagine a living—that is to say a changing—socialist
economic order, because economic activity without economic calculation seems inconceivable,
it is quite easy to postulate a socialist economic order under stationary conditions.
We need only avoid asking how this stationary condition is achieved. If we do this
there is no difficulty in examining the statics of a socialist community. All socialist
theories and Utopias have always had only the stationary condition in mind.
2 The Disutilities and Satisfactions of Labour
Socialist writers depict the socialist community as a land of heart's desire. Fourier's
sickly fantasies go farthest in this direction. In Fourier's state of the future
all harmful beasts will have disappeared, and in their places will be animals which
will assist man in his labours—or even do his work for him. An anti-beaver will
see to the fishing; an anti-whale will move sailing ships in a calm; an anti-hippopotamus
will tow the river boats. Instead of the lion there will be an anti-lion, a steed
of wonderful swiftness, upon whose back the rider will sit as comfortably as in
a well-sprung carriage. "It will be a pleasure to live in a world with such servants."
Godwin even thought that men might be immortal after property had been abolished.
Kautsky tells us that under the socialist society "a new type of man will arise
... a superman ... an exalted man." Trotsky provides even more detailed information:
"Man will become incomparably stronger, wiser, finer. His body more harmonious,
his movements more rhythmical, his voice more musical ... The human average will
rise to the level of an Aristotle, a Goethe, a Marx. Above these other heights new
peaks will arise." And writers of this sort of stuff are continually being reprinted
and translated into other tongues, and made the subject of exhaustive historical
Other socialist writers are more circumspect in their pronouncements but they proceed
on essentially similar assumptions. Tacitly underlying Marxian theory is the nebulous
idea that the natural factors of production are such that they need not be economized.
Such a conclusion indeed follows inevitably from a system that reckons labor as
the only element in costs, that does not accept the law of diminishing returns,
rejects the Malthusian law of population and loses itself in obscure fantasies about
the unlimited possibility of increasing productivity. We need not go further
into these matters. It is sufficient to recognize that even in a socialist community
the natural factors of production would be limited in quantity and would therefore
have to be economized.
The second element which would have to be economized is labour. Even if we ignore
differences in quality it is obvious that labour is available only to a limited
extent: the individual can only perform a certain amount of labour. Even if labour
were a pure pleasure it would have to be used economically, since human life is
limited in time, and human energy is not inexhaustible. Even the man who lives at
his leisure, untrammelled by monetary considerations, has to dispose of his time,
i.e. choose between different possible ways of spending it.
It is clear, therefore, that in the world as we know it, human behaviour must be
governed by economic considerations. For while our wants are unlimited, the goods
of the first order bestowed by nature are scarce; and, with a given productivity
of labour, goods of a higher order can serve to increase the satisfaction of needs
only by increasing labour. Now, quite apart from the fact that labour cannot be
increased beyond a certain point, an increase of labour is accompanied by increasing
Fourier and his school regard the disutility of labour as a result of perverse social
arrangements. These alone in their view are to blame for the fact that in accepted
usage the words "labour" and "toil" are synonymous. Labour in itself is not unpleasant.
On the contrary, all men need to be active. Inactivity entails intolerable boredom.
If labour is to be made attractive it must be carried on in healthy, clean workplaces;
the joy of labour must be aroused by a happy feeling of union among the workers
and cheerful competition between them. The chief cause of the repugnance which labour
arouses is its continuity. Even pleasures pall if they last too long. Therefore
the workers must be allowed to interchange their occupations at will; work will
then be a pleasure and no longer create aversion.
It is not difficult to expose the error contained in this argument, though it is
accepted by socialists of all schools. Man feels the impulse to activity. Even if
need did not drive him to work he would not always be content to roll in the grass
and bask in the sun. Even young animals and children whose nourishment is provided
by their parents kick their limbs, dance, jump and run so as to exercise powers
yet unclaimed by labour. To be stirring is a physical and mental need. Thus, in
general, purposeful labour gives satisfaction. Yet only up to a certain point; beyond
this it is only toil. In the following diagram the line 0 x along which the product
of labour is Mises Graph1. Click to enlarge in new window measured, marks the dividing
line between the disutility of labour and the satisfaction the exercise of our powers
affords, which may be called immediate satisfaction due to labour. The curve, a,
b, c, p represents labour disutility and immediate labour satisfaction in relation
to the product. When labour commences it is found disagreeable. After the first
difficulties have been overcome and body and mind are better adapted, then the disagreeableness
declines. At b neither disagreeableness nor satisfaction predominates. Between b
and c direct satisfaction prevails. After c disagreeableness recommences. With other
forms of labour the curve may run differently, as in 0 c1 p1 or 0p2.
on the nature of the work and the personality of the workers. It is different for
ditchdiggers and for jockeys: it is different for dull and for energetic men.
Why is labour continued when the disutility which its continuance occasions exceeds
the direct satisfaction deriving from it? Because something else beside direct labour
satisfaction comes into account, namely the satisfaction afforded by the product
of the labour; we call this indirect labour satisfaction. Labour will be continued
so long as the dissatisfaction which it arouses is counterbalanced by the pleasure
derived from its product. Labour will only be discontinued at the point at which
its continuation would give rise to more disutility than utility.
The methods by which Fourier wished to deprive labour of its unattractiveness were
indeed based upon correct observations, but he greatly overrated the bearing of
his argument. It is clear that the amount of work which affords direct labour satisfaction
supplies such a small fraction of the needs which men consider imperative that they
readily undergo the hardship of performing irksome work. But it is a mistake to
assume that any significant change would take place if workers were allowed to change
occupations at short intervals. For in the first place the product of labour would
be reduced because of the diminished skill acquired by the individual as a result
of diminished practice in each of his various occupations; also because every changeover
would cause loss of time, and labour would be expended in the shuffling. And in
the second place only a very slight part of the excess of labour disutility over
direct labour satisfaction is due to weariness with the particular job in hand.
Hence the capacity to derive direct satisfaction from another form of labour is
not what it would have been if the first job had not been performed. Clearly the
greater part of the disutility is due to general fatigue of the organism and to
a desire to be released from any further constraint. The man who has worked for
hours at a desk will prefer to chop wood for an hour rather than spend another hour
at the desk. But what made his labour unpleasant was not only the need for change
but rather the length of the work. If the product is not to be diminished the length
of the working day can be reduced only by increased productivity. The widespread
opinion that there is labour which only tires the body and labour which only tires
the mind is incorrect, as everyone can prove for himself. All labour affects the
whole organism. We deceive ourselves on this point because in observing other forms
of occupation we see only the direct labour satisfaction. The clerk envies the coachman,
because he would like a little recreation in driving: but his envy would last only
as long as the satisfaction exceeded the pain. Similarly hunting and fishing, mountain
climbing, riding and driving are undertaken for sport. But sport is not work in
the economic sense. It is the hard fact that men cannot subsist on the small amount
of labour yielding direct labour satisfaction which compels them to suffer the irksomeness
of toil, not the bad organization of labour.
It is obvious, that improvements in the conditions under which labour is performed
may increase the product with unchanged irksomeness or lessen the irksomeness for
the same product. But it would be impossible to improve these conditions more than
actually occurs under capitalism without rising cost. That labour is less irksome
when performed in company has been known from of old, and where it seems possible
to let workers work together without reducing output, it is done.
There are, of course, exceptional natures that rise above the common level. The
great creative genius who perpetuates himself in immortal works and deeds does not
when working distinguish the pain from the pleasure. For such men creation is at
once the greatest joy and the bitterest torment, an inner necessity. What they create
has no value to them as a product: they create for the sake of creation, not for
the result. The product costs them nothing because, when working, they forgo nothing
dearer to them than their work. And their product only costs society what they could
have produced by other labour. In comparison to the value of the service this cost
is nothing. Genius is truly a gift of God.
Now the life history of great men is familiar to all. Thus the social reformer is
easily tempted to regard what he has heard of them as common attributes. We continually
find people inclined to regard the mode of life of the genius as the typical way
of living of a simple citizen of a socialist community. But not every one is a Sophocles
or a Shakespeare, and standing behind a lathe is not the same thing as writing Goethe's
poems or founding the Empire of Napoleon.
It is therefore easy to see the nature of the illusions entertained by Marxians
with regard to the satisfactions and toil of the inhabitants of the socialist community.
Here, as in everything else it has to say about the socialist community, Marxism
moves along the lines set out by the Utopians. With express reference to Fourier's
and Owen's ideas of restoring to work "the attractiveness lost through division
of labour," by arranging for each form of work to be performed for a short time
only, Engels sees in Socialism an organization of production "in which productive
labour will be not a means for enslaving but for liberating mankind, which will
give every individual the opportunity to develop and to exercise all his capabilities,
bodily and mental, in all directions, and will transform a bane into a boon."
And Marx talks of "a higher phase of communist society after having done away with
the slavish subjection of the individual under the division of labour, a society
in which the contrast between mental and physical work has disappeared" and "labour
has become not only a means of life but the first need of life itself." Max Adler
promises that the socialist society will "at the very least" not assign to anyone
any work "which must cause him pain." These statements distinguish themselves
from the utterances of Fourier and his school only by the fact that there is nowhere
any attempt to provide them with a basis of proof.
Fourier and his school, however, had another device, apart from changes of occupation,
for rendering work more attractive: competition. Men would be capable of the highest
achievement if inspired by un sentiment de rivalité joyeuse ou de noble émulation
(a feeling of joyous rivalry or noble emulation). Here for once they recognize the
advantages of competition, which everywhere else they describe as pernicious. If
the workers show a deficiency in achievement it will be sufficient to divide them
into groups: immediately a fierce competition will blaze up between the groups,
which will double the energy of the individual and suddenly arouse in all un acharnement
passion? au travail (A passionate tenacity for work).
The observation that competition makes for greater accomplishment is of course correct
enough, but it is superficial. Competition is not in itself a human passion. The
efforts put forth by men in competition are not made for the sake of the competition
but for the end attained thereby. The fight is waged not for its own sake, but for
the prize which beckons the victor. But what prizes would spur to emulation the
workers in a socialist community? Experience shows that titles and rewards of honour
are not estimated too highly. Material goods to increase the satisfaction of wants
could not be given as prizes since the principle of distribution would be independent
of individual performance, and the increase per head through the increased effort
of a single worker would be so insignificant that it would not count. The simple
satisfaction from duty performed would not suffice: it is precisely because this
incentive cannot be trusted that we seek others. And even if it were so, labour
would still be irksome. It would not thereby become attractive in itself.
The Fourier school, as we have seen, regards it as the main point of their solution
of the social problem that work will be made a joy instead of a toil. But unfortunately
the means which it provides for this are quite impracticable. If Fourier had really
been able to show the way to make work attractive he would have deserved the divine
honours bestowed on him by his followers. But his much lauded doctrines are nothing
but the fantasies of a man who was incapable of seeing clearly the world as it really
Even in a socialist community work will arouse feelings of pain and not of pleasure.
3 The "Joy of Labour"
If this is recognized, one of the main supports of socialist structure of thought
collapses. It is therefore only too easy to understand why socialists try stubbornly
to maintain that there is in man an innate impulse and striving to work, that work
gives satisfaction per se and that only the unsatisfactory conditions under which
work is performed in capitalist society could restrict this natural joy of labour
and transform it into toil.
In proof of this assertion they assiduously collect statements made by workers in
modern factories on the pleasurability of the labour. They ask the workers leading
questions and are extraordinarily satisfied when the answers are of the kind they
want to hear. But because of their prepossession they omit to notice that between
the actions and replies of those whom they cross-examine there is a contradiction
which demands solution. If work gives satisfaction per se why is the worker paid?
Why does he not reward the employer for the pleasure which the employer gives him
by allowing him to work? Nowhere else are people paid for the pleasure given to
them, and the fact that pleasures are rewarded ought at least to give pause for
reflection. By common definition, labour cannot give satisfaction directly. We define
labour as just that activity which does not give any direct pleasurable sensations,
which is performed only because the produce of the labour yields indirectly pleasurable
sensations sufficient to counterbalance the primary sensations of pain.
The so-called "joy of labour" which is generally adduced in support of the view
that labour awakens feelings of satisfaction, not of pain, is attributable to three
quite separate sensations.
There is first the pleasure which can be obtained from the perversion of work. When
the public official abuses his office, often while performing his function in a
manner which is formally quite correct, so as to satisfy the instincts of power,
or to give free rein to sadistic impulses, or to pander to erotic lusts (and in
this one need not always think merely of things condemned by law or morals), the
pleasures that follow are undoubtedly not pleasures of work but pleasures derived
from certain accompanying circumstances. Similar considerations apply also to other
kinds of work. Psychoanalytic literature has repeatedly pointed out how extensively
matters of this sort influence the choice of occupation. In so far as these pleasures
counterbalance the pain of labour they are reflected also in the rates of pay; the
larger supply of labour in the occupations offering the greatest scope for this
kind of perversion tending to lower the rate of pay. The worker pays for the "pleasure"
with an income lower than he otherwise could have earned.
By "joy of labour" people mean also the satisfaction of completing a task. But this
is pleasure in being free of work rather than pleasure in the work itself. Here
we have a special kind of pleasure, which can be shown to exist everywhere, in having
got rid of something difficult, unpleasant, painful, the pleasure of "I've done
it." Socialist Romanticism and romantic socialists praise the Middle Ages as a time
when joy of labour was unrestricted. As a matter of fact we have no reliable information
from medieval artisans, peasants, and their assistants about the "joy of labour,"
but we may presume that their joy was in having performed their work and begun the
hours of pleasure and repose. Medieval monks, who in the contemplative peace of
their monasteries copied manuscripts, have bequeathed us remarks which are certainly
more genuine and reliable than the assertions of our romantics. At the end of many
a fine manuscript we read: Laus tibi sit Christe, quoniam liber explicit iste.
(Praise be to you, O Christ, for this book is completed.) Not because the work itself
has given pleasure.
But we must not forget the third and most important source of the joy of labour—the
satisfaction the worker feels because his work goes so well that through it he can
earn a living for himself and his family. This joy of labour is clearly rooted in
the pleasure of what we have called the indirect enjoyment of labour. The worker
rejoices because in his ability to work and in his skill he sees the basis of his
existence and of his social position. He rejoices because he has attained a position
better than that of others. He rejoices because he sees in his ability to work the
guarantee of future economic success. He is proud because he can do something "good,"
that is, something society values and consequently pays for on the labour market.
Nothing raises self-respect higher than this feeling, which indeed is often exaggerated
to the ridiculous belief that one is indispensable. To the healthy man, however,
it gives the strength to console himself for the unalterable fact that he is able
to satisfy his wants only by toil and pain. As people say: he makes the best of
a bad job.
Of the three sources of that which we may call the "joy of labour" the first, arising
from perversion of the true ends of the work, will undoubtedly exist in the socialist
community. As under capitalist society it will naturally be restricted to a narrow
circle. The other two sources of the joy of labour will presumably dry up completely.
If the connection between the yield of labour and the income of the labourer is
dissolved, as it must be in socialist society, the individual will always labour
under the impression that proportionately too much work has been piled on him. The
over-heated, neurasthenic dislike of work will develop which nowadays we can observe
in practically all government offices and public enterprises. In such concerns where
the pay depends upon rigid schedules, everyone thinks he is overburdened, that just
he is being given too much to do and things which are too unpleasant—that his achievements
are not duly appreciated and rewarded. Out of these feelings grows a sullen hate
of work which stifles even the pleasure in completing it.
The socialist community cannot count on the "joy of labour."
4 The Stimulus to Labour
It is the duty of the citizen of the socialist commonwealth to work for the community
according to his powers and his ability: in return he has a claim against the community
for a share in the social dividend. He who unjustifiably omits to perform his duty
will be recalled to obedience by the usual methods of state coercion. The economic
administration would exercise so great a power over individual citizens that it
is inconceivable that anyone could permanently withstand it.
It is not sufficient however that citizens should arrive at their tasks punctually
and spend the prescribed number of hours at their posts. They must really work while
they are there.
In the capitalist system the worker receives the value of the product of his labour.
The static or natural wage-rate tends to such a level that the worker receives the
value of the product of his labour: i.e. all that is attributable to his work.
The worker himself is therefore concerned that his productivity should be as great
as possible. This does not apply to work done for piece rates only. The level of
time rates is also dependent upon the marginal productivity of the particular kind
of work concerned. The technical form of wage payment which is customary does not
alter the level of wages in the long run. The wage rate has always a tendency to
return to its static level, and time rates are no exception.
But even so work done for time wages gives us an opportunity of observing how work
is carried on when the worker feels that he is not working for himself, because
there is no connection between his output and his remuneration. Under time wages
the more skilful worker has no inducement to do more than the minimum expected from
every worker. Piece wages are an incentive to the maximum activity, time wages to
the minimum. Under Capitalism the graduation of time wages for different kinds of
work greatly mitigates these social effects of the system of payment by time. The
worker has a motive in finding a position where the minimum work required is as
great as he can perform, because the wage increases with the rise in the minimum
Only when we depart from the principle of graduating time wages according to the
work required does the time wage begin to affect production adversely. This is particularly
noticeable in the case of state and municipal employment. Here, in the last few
decades, not only has the minimum required from the individual workers been continually
reduced, but every incentive to better work—for example, different treatment of
the various grades and rapid promotion of industrious and capable workers to better-paid
posts—has been removed. The result of this policy has clearly vindicated the principle
that the worker only puts forth his best efforts when he knows that he stands to
gain by it.
Under Socialism the usual connection between work performed and its remuneration
cannot exist. All attempts to ascertain what the work of the individual has produced
and thereby to determine the wage rate, must fail because of the impossibility of
calculating the productive contributions of the different factors of production.
The socialist community could probably make distribution dependent upon certain
external aspects of the work performed. But any such differentiation would be arbitrary.
Let us suppose that the minimum requirement is determined for each branch of production.
Let us suppose this is done on the basis of Rodbertus' proposal for a "normal working
day." For each industry there is laid down the time which a worker with average
strength and effort can continue to work and the amount of work which an average
worker of average skill and industry can perform in this time. We will completely
ignore the technical difficulties in the way of deciding, in any particular concrete
example the question whether this minimum has been achieved or not. Nevertheless
it is obvious that any such general determination can only be quite arbitrary. The
workers of the different industries would never be made to agree on this point.
Everyone would maintain that he had been overtasked and would strive for a reduction
of the amount set to him. Average quality of the worker, average skill, average
strength, average effort, average industry—these are all vague conceptions that
cannot be exactly determined.
Now it is evident that the minimum performance calculated for the worker of average
quality, skill, and strength will be achieved only by a part—say one-half—of the
workers. The others will do less. How can the authorities ascertain whether a performance
below the minimum is due to laziness or incapacity? Either the unfettered decision
of the administration must be allowed free play, or certain general criteria must
be established. Doubtless, as a result, the amount of work performed would be continually
Under Capitalism everybody who takes an active part in business life is concerned
that labour should be paid the whole product. The employer who dismisses a worker
who is worth his wage harms himself. The foreman who discharges a good worker and
retains a bad one, adversely affects the business results of the department under
his charge, and thereby indirectly himself. Here we do not need formal criteria
to limit the decisions of those who have to judge the work performed. Under Socialism
such criteria would have to be established, because otherwise the powers entrusted
to persons in charge could be arbitrarily misused. And so then the worker would
have no further interest in the actual performance of work. He would only be concerned
to do as much as is prescribed by the formal criteria in order to avoid punishment.
What kind of results will be achieved by workers, who are not directly interested
in the product of the work, can be learnt from the experience of a thousand years
of slave labour. Officials and employees of state and municipal undertakings provide
new examples. An attempt may be made to weaken the argumentative force of the first
example by contending that these workers had no interest in the result of their
labour because they did not share in the distribution; in the socialist community
everyone would realize that he was working for himself and that would spur him on
to the highest activity. But this is just the problem. If the worker exerts himself
more at the work then he has so much the more labour disutility to overcome. But
he will receive only an infinitesimal fraction of the result of his increased effort.
The prospect of receiving a two thousand millionth part of the result of his increased
effort will scarcely stimulate him to exert his powers any more than he needs.
Socialist writers generally pass over these ticklish questions in silence or with
a few inconsequential remarks. They only bring forward a few moralistic phrases
and nothing else. The new man of Socialism will be free from base self-seeking;
he will be morally infinitely above the man of the frightful age of private property
and from a profound knowledge of the coherency of things and from a noble perception
of duty he will devote all his powers to the general welfare.
But closer examination shows that these arguments lead to only two conceivable alternatives:
free obedience to the moral law with no compulsion save that of the individual conscience,
or enforced service under a system of reward and punishment. Neither will achieve
the end. The former supplies no sufficient incentive to persist in overcoming the
disutility of labour even though it is publicly extolled on every possible occasion
and proclaimed in all schools and churches; the latter can only lead to a formal
performance of duty, never to performance with the expenditure of all one's powers.
The writer who has occupied himself most thoroughly with this problem is John Stuart
Mill. All subsequent arguments are derived from his. His ideas are to be encountered
everywhere in the literature of the subject and in everyday political discussion;
they have even become popular catchwords. Everyone is familiar with them even if
he is totally unacquainted with the author. They have provided for decades one
of the main props of the socialist idea, and have contributed more to its popularity
than the hate-inspired and frequently contradictory arguments of socialist agitators.
One of the main objections, says Mill, that could be urged against the practicability
of the socialist idea, is that each person would be incessantly occupied in evading
his fair share of work. But those who urge this objection forget to how great an
extent the same difficulty exists under the system under which nine-tenths of the
business of society is now conducted. The objection supposes that honest and efficient
labour is only to be had from those who are themselves individually to reap the
benefit of their own exertions. But under the present system only a small fraction
of all labour can do this. Time rates or fixed salaries are the prevailing forms
of remuneration. Work is performed by people who have less personal interest in
the execution of the task than the members of a socialist community, since, unlike
the latter, they are not working for an enterprise in which they are partners. In
the majority of cases they are not personally superintended and directed by people
whose own interests are bound up with the results of the enterprise. For employees
paid by time carry out even the supervisory, managing and technical work. It may
be admitted that labour would be more productive in a system in which the whole
or a large share of the product of extra exertion belongs to the labourer, but under
the present system it is precisely this incentive which is lacking. Even if communistic
labour might be less vigorous than that of a peasant proprietor, or a workman labouring
on his own account, it would probably be more energetic than that of a labourer
for hire, who has no personal interest in the matter at all.
One can easily see the cause of Mill's mistake. The last representative of the classical
school of economists, he did not survive to see the transformation of economics
by the subjective theory of value, and he did not know the connection between wage
rates and the marginal productivity of labour. He does not perceive that the worker
has an interest in doing his utmost because his income depends upon the value of
the work which he performs. Without the light of modern economic thought he sees
only on the surface and not into the heart of things. Doubtless the individual working
for a time wage has no interest in doing more than will keep his job. But if he
can do more, if his knowledge, capability and strength permit, he seeks for a post
where more is wanted and where he can thus increase his income. It may be that he
fails to do this out of laziness, but this is not the fault of the system. The system
does all that it can to incite everyone to the utmost diligence, since it ensures
to everyone the fruits of his labour. That Socialism cannot do this is the great
difference between Socialism and Capitalism.
In the extreme case of obstinate perseverance in not performing a due share of work,
the socialist community, Mill thinks, would have reserve powers which society now
has at its disposal: it could submit the workers to the rules of a coercive institution.
Dismissal, the only remedy at present, is no remedy when no other labourer who can
be engaged does any better than his predecessor. The power to dismiss only enables
an employer to obtain from his workman the customary amount of labour; but that
customary labour may be of any degree of inefficiency.
The fallacy of this argument is plain. Mill does not realize that the wage rate
is adjusted according to this customary amount of labour, and that the worker who
wishes to earn more must do more. It may be admitted straight away that wherever
the time wage prevails the individual worker is obliged to seek elsewhere for a
job in which the customary amount of labour is greater because he has no chance
of increasing his income by doing more work if he remains where he is. In the circumstances
he must change over to piece work, take up another occupation, or even emigrate.
In this way millions have emigrated from those European countries, where the customary
amount of labour is low, to Western Europe or to the United States, where they have
to work more but earn more. The inferior workers remain behind, and are content
to work less for less wages.
If this is kept in mind it is also easy to understand the case of supervisory and
managerial work performed by employees. Their activities, too, are paid according
to the value of the service: they, too, must do as much as they can if they wish
to obtain the highest possible income. They can and must be given authority in the
name of the entrepreneur to take on and dismiss workers without any fear that they
will abuse the power. They perform the social task incumbent upon them of securing
that the worker obtains only as much wages as his work is worth, apart from any
other consideration whatever. The system of economic calculation supplies a sufficient
test of the efficacy of their work. This distinguishes their work from the kind
of control which could be exercised under Socialism. They harm themselves if from
revengeful motives they treat a worker worse than he deserves. (Naturally "deserves"
is not used here in any ethical sense.) This authority to dismiss workers and fix
their wages which the employer possesses and delegates to subordinates, is considered
by socialists to be dangerous in the hands of private individuals. But the socialists
overlook the fact that the employer's ability to exercise this power is limited,
that he cannot dismiss and mistreat arbitrarily because the result would be harmful
to himself. In endeavouring to purchase labour as cheaply as possible the employer
is fulfilling one of his most important social tasks.
Mill admits that in the present state of society the neglect by the uneducated classes
of labourers for hire of the duties which they engage to perform is flagrant. This,
he thinks, can only be attributed to a low level of education. Under Socialism,
with universal education, all citizens would undoubtedly fulfill their duty towards
society as zealously as the majority of those members of the upper and middle classes
who are in receipt of salaries, perform it today. It is clear that Mill's thought
repeatedly involves the same error. He does not see that in this case too, there
is a correspondence between payment and performance. Finally he is compelled to
admit that, there can be no doubt that remuneration by fixed salaries does not produce
the maximum of zeal in any class of functionaries. To this extent, Mill says, objection
could reasonably be made against the socialist organization of labour. It is, however,
according to Mill, by no means certain that this inferiority will continue in a
socialist community as is assumed by those whose imaginations are little used to
range beyond the state of things with which they are familiar. It is not impossible
that under Socialism the public spirit will be so general that disinterested devotion
to the common welfare will take the place of self seeking. Here Mill lapses into
the dreams of the Utopians and conceives it possible that public opinion will be
powerful enough to incite the individual to increased zeal for labour, that ambition
and self-conceit will be effective motives, and so on.
It need only be said that unfortunately we have no reason to assume that human nature
will be any different under Socialism from what it is now. And nothing goes to prove
that rewards in the shape of distinctions, material gifts, or even the honourable
recognition of fellow citizens, will induce the workers to do more than the formal
execution of the tasks allotted to them. Nothing can completely replace the motive
to overcome the irksomeness of labour which is given by the opportunity to obtain
the full value of that labour.
Many socialists of course think that this argument can be refuted by appeal to the
labour which in the past has been performed without the incentive of a wage payment.
They instance the case of the labours of scientists and artists, of the doctor who
exhausts himself at the sickbed, the soldier who dies the death of a hero, the statesman
who sacrifices all for his idea. But the artist and the scientist find their satisfaction
in the work itself, and in the recognition which they hope to gain at some time,
if only from posterity, even though material gains are not forthcoming. The doctor
and the professional soldier are in the same position as many other workers whose
work is associated with danger. The supply of workers for these professions reflects
their lesser attractiveness, and the wage is adapted correspondingly. But if, in
spite of the danger, a man enters the profession for sake of the higher remuneration
and other advantages and honours, he cannot evade the dangers without the greatest
prejudice to himself. The professional soldier who turned tail, the doctor who refused
to treat an infectious case, would endanger their future careers to such an extent
that they have virtually no choice in the matter. It cannot be denied that there
are doctors who are concerned to do their utmost in cases where no one would detect
remissness, and that there are professional soldiers who incur danger when no one
would reproach them for avoiding it. But in these exceptional cases, as in the case
of the staunch statesman who is ready to die for his principles, man raises himself,
as is given to few to do, to the highest peak of manhood, to complete union of will
and deed. In his exclusive devotion to a single purpose which sets aside all other
desires, thoughts and feelings, removes the instinct of self-preservation and makes
him indifferent to pain and suffering, such a man forgets the world, and nothing
remains except the one thing to which he sacrifices himself and his life. Of such
men it used to be said, according to the estimate set on their aims, that the spirit
of the Lord moved them, or that they were possessed of the devil—so incomprehensible
were their motives to the ordinary run of mankind.
It is certain that mankind would not have risen above the beasts if it had not had
such leaders; but it is certain that mankind does not in the main consist of such
men. The essential social problem is to make useful members of society out of the
Socialist writers have for a long time ceased to exercise their ingenuity on this
insoluble problem. Kautsky can tell us nothing more than that habit and discipline
will provide incentives to work in the future. "Capital has so accustomed the modern
labourer to work day in and day out that he cannot endure to be without his work.
There are even people who are so accustomed to work that they do not know what to
do with their leisure time and are unhappy when they cannot work." Kautsky does
not seem to fear that this habit could be shaken off more easily than other habits
such as eating and sleeping but he is not prepared to rely on this incentive alone,
and freely admits that "it is the weakest." He therefore recommends discipline.
Naturally not "military discipline" nor "blind obedience to an authority imposed
from above," but "democratic discipline—the free subjection to elected leadership."
But then doubts arise and he endeavours to dispel them with the idea that under
Socialism labour will be so attractive "that it will be a pleasure to work," but
finally admits that this will not be sufficient at first, and at last arrives at
the conclusion that besides the attractiveness of the work some other incentive
must be brought to bear, "that of the wages of labour."
Thus even Kautsky, after many limitations and considerations, arrives at this result,
that the irksomeness of labour will only be overcome if the product of labour, and
only the product of his own labour, accrues to the worker, in so far as he is not
also an owner or an employer. But this is to deny the feasibility of socialistic
organization of labour, since private property in the means of production cannot
be abolished without abolishing at the same time the possibility of remunerating
the labourer according to the product of his labour.
5 The Productivity of Labour
The old "distributivist" theories were based on the assumption that it only needed
equal distribution for everyone to have if not riches, at least a comfortable existence.
This seemed so obvious, that hardly any trouble was taken to prove it. At the beginning
Socialism took over this assumption in its entirety, and expected that comfort for
all would be achieved by an equal distribution of the social income. Only when the
criticisms of their opponents drew their attention to the fact that equal distribution
of the income obtained by the whole economic society would scarcely improve the
conditions of the masses at all, did they set up the proposition that capitalist
methods of production restrict the productivity of labour, and that Socialism would
remove these limitations and multiply production to ensure for everyone a life in
comfortable circumstances. Without troubling about the fact that they had not succeeded
in disproving the assertion of the liberal school that productivity under Socialism
would sink so low that want and poverty would be general, socialist writers began
to promulgate fantastic assertions about the increase in productivity to be expected
Kautsky mentions two ways of achieving increased production by a transition from
capitalistic to socialistic methods of production. One is the concentration of all
production in the best concerns and the closing down of the less efficient. That
this is a means of increasing production cannot be denied, but it is a means which
operates most effectively under the regime of an exchange-economy. Competition ruthlessly
eliminates all inferior productive undertakings and concerns. That it does so is
a constant source of complaint from those involved, and because of it the weaker
undertakings demand State subsidies, special consideration in public contracts,
and in general restriction of freedom of competition in every possible way. Kautsky
is forced to admit that trusts formed by private enterprise exploit these means
to the utmost, so as to obtain higher productivity, and in fact he frankly regards
them as the forerunners of the social revolution. It is more than questionable whether
the socialist State would feel the same necessity to carry out similar improvements
in production. Would it not continue an unprofitable undertaking rather than provoke
local prejudice by its discontinuance? The private entrepreneur closes down without
much ado undertakings that no longer pay; and in this way he compels the worker
to change his locality and sometimes even his occupation. Undoubtedly this involves
initial hardships for the people concerned, but it is to the general advantage,
since it makes possible a cheaper and better provisioning of the market. Would the
Socialist State do likewise? Would it not, on the contrary, be constrained for political
reasons to avoid local discontent? On most state railways all reforms of this kind
are frustrated by the attempt to avoid the harm to particular districts which would
result from the elimination of superfluous branch offices, workshops, and power
stations. Even the army administration has encountered parliamentary opposition
when for military reasons it has been desired to withdraw a garrison from a particular
His second method of achieving increased production, viz., "economies of every description,"
on his own admission, Kautsky already finds operating under the trust of today.
He particularly mentions economies of materials, transport charges, advertisements
and publicity costs. As far as economies in materials and transport are concerned,
experience shows that nothing is operated with less economy and with more waste
of labour and material of every kind than public services and undertakings. Private
enterprise on the other hand naturally induces the owner to work with the greatest
economy in his own interest.
Of course the Socialist state would save all advertising expenses, all the costs
of commercial travellers and agents. But it is more than probable that it would
employ many more persons in the service of the apparatus of distribution. Wartime
experience has taught us how cumbrous and expensive the social apparatus of distribution
can be. Were the costs of bread, flour, meat, sugar, and other cards really less
than the costs of advertisement? Has the enormous personnel required to run a rationing
system been cheaper than the expenditure on commercial travellers and agents?
Socialism would eliminate the small retailers. But in their place it must set up
distributive centers which would not be cheaper. Co-operative stores do not employ
less hands than the retail stores organized on modern lines, and many of them, because
of their large expenses, could not compete with the latter if they were not granted
privileges of exemption from taxation.
Speaking generally, it must be said that it is inadmissible to pick out special
costs in capitalist society, and then at once to infer from the fact that they would
disappear in a socialist society, that the productivity of the latter would surpass
that of the former. It is necessary to compare the total costs and the total yields
of both systems. The fact that the electromobile needs no gasoline is no proof that
it is cheaper to run than the gasoline-powered car.
The weakness of Kautsky's argument is evident, when he asserts that "by the application
of these two methods a proletarian regime could raise production to such a high
level that it would be possible to increase wages considerably and at the same time
reduce the hours of labour." Here he is making an assertion for which he offers
no proof whatever.
And it is no better with the other arguments that are often brought forward to prove
the supposed higher productivity of a socialistic society. When for example people
argue that under Socialism everyone capable of work will have to work, they are
sadly mistaken as to the number of idlers under Capitalism.
So far as can be judged there is no convincing reason for supposing that labour
under Socialism would be more productive than under Capitalism. On the contrary
it can be asserted that under a system which provides no incentive to the worker
to overcome the irksomeness of labour and to strive his utmost, the productivity
of labour must inevitably decline. But the problem of productivity cannot be dealt
with only within the limits of a study of static conditions. Incomparably more important
than the question whether the transition to Socialism would increase productivity
is the question whether, given the existence of a socialistic order, it would be
able further to increase production and to achieve economic progress. This leads
us to the problem of dynamics.
Fourier, Oeuvres complètes, Vol. IV, 2nd ed.
(Paris, 1841), pp. 254 ff.
Godwin, Das Eigentum, Bahrfeld's translation
of that part of Political Justice which deals with the problem of property (Leipzig,
1904), pp. 73 ff.
Kautsky, Die soziale Revolution, 3rd ed.,
(Berlin, 1911), II, p. 48.
Trotsky, Literatur und Revolution (Vienna, 1924),
"Today all enterprises ... are first and foremost
a question of profitability ... A socialist society knows no other question than of
sufficient labour forces, and if it has these the work ... is done." (Bebel, Die Frau und
der Sozialismus, p. 308.) "Everywhere it
is the social institution and the methods of production and distribution connected with
these which produce want and misery, and not the number of people." (Ibid., p. 368. ) "We suffer not from a lack but from a
superfluity of foodstuffs, just as we have a superfluity of industrial products."
(Ibid., p. 368, Also Engels, Herrn Eugen Dührings
Umwälzung der Wissenschaft, p. 305.) "We have...not too many but rather too few
people". (Ibid., p. 370.)
Considerant, Exposition abrégée du Système
Phalanstérien de Fourier, 4th Impression, 3rd ed. (Paris, 1846), pp. 29 ff.
Jevons, The Theory of Political Economy,
3rd ed. (London, 1888), pp. 169, 172 ff.
Engels, Herrn Eugen Dührings Umwälzung der
Wissenschaft, p. 327.
Marx, Zur Kritik des sozialdemokratischen
Parteiprogramms von Gotha, p. 27.
Max Adler, Die Staatsauffassung des
Marxismus (Vienna, 1922), p. 287.
Considerant, Exposition abrégée du
Système Phalanstérien de Fourier, p. 33.
Considerant, "Studien uber einige
Fundamentalprobleme der sozialen Zukunft" (contained in Fouriers System der sozialen
Reform, translated by Kaatz, Leipzig 1906), pp. 55 ff. Fourier has the distinction of
having introduced the fairies into social science. In his future state the children,
organized in "Petites Hordes" (small groups), will perform what the adults do not do.
To them will be entrusted, amongst other things, maintenance of the roads. "C'est à leur
amour propre que l'Harmonie sera redevable d'avoir, par toute la terre, des chemins plus
somptueux que les allées de nos parterres. Ils seront entretenus d'arbres et d'arbustes,
même de fleurs, et arrosés au trottoir. Les Petites Hordes courent frénétiquement au
travail, qui est exécuté comme oeuvre pie, acte de charité envers la Phalange, service
de Dieu et de l'Unit?." (It is to their own self-esteem that "Harmony" will be indebted
for having, everywhere, roads more magnificent than the walks in our flower gardens.
They will be maintained with trees, shrubs, even flowers, and they will be irrigated
along the footpaths. The small groups run frantically to their work, which will be carried
out as a pious duty, an act of love [charity] for the Phalanx [community], a service for
God and Unity.) By three o'clock in the morning they are up, cleaning the stables,
attending to the cattle and horses, and working in the slaughter houses, where they take
care that no animal is ever treated cruelly, killing always in the most humane manner.
"Elles ont la haute police du règne animal." (They are the eminent police of the animal
kingdom.) When their work is done they wash themselves, dress themselves, and appear
triumphantly at the breakfast table. See Fourier, Oeuvres complètes, Vol. V, 2nd Edition
(Paris, 1841), pp. 141, 159.
Fabre des Essarts, Odes Phalansteriennes,
Montreuil-sous-Bois 1900. Béranger and Victor Hugo also venerated Fourier. The first dedicated to
him a poem, reprinted in Bebel (Charles Fourier, Stuttgart 1890, pp. 294 ff.).
Socialist writers are still far from knowing
this. Kautsky (Die soziale Revolution, II, pp. 16 ff.) considers that the main task of a
proletarian regime is "to make work, which today is a burden, into a pleasure, so that
people will enjoy working and the workers go joyfully to work." He admits that "this is
not such a simple matter" and concludes that "it will hardly be possible to make work in
factories and mines attractive quickly." But he cannot naturally bring himself to abandon
completely Socialism's fundamental illusion.
 Veblen, The Instinct of Workmanship
(New York, 1922), pp. 31 ff.; De Man, Zur Psychologie des Sozialismus, pp. 45 ff.;
De Man, Der Kampf um die Arbeitsfreude (Jena, 2927), pp. 249 ff.
We here disregard the above-mentioned pleasure
in beginning work, in practice unimportant. See p. 166.
Wattenbach, Das Schriftwesen in Mittelalter,
3rd ed. (Leipzig, 1896), p. 500. Amongst the many similiar sayings and verses quoted
by Wattenbach is the still more drastic: Libro completo saltat scriptor pede laeto
(Once the book is finished, the author dances with joy).
Clark, Distribution of Wealth (New York, 1907),
pp. 257 ff.
Rodbertus, Johann Karl, Briefe und
sozialpolitische Aufsätze, ed. R. Meyer (Berlin, 1881), pp. 553 ff. We shall not
enter here into Rodbertus' other proposals for the normal working day. They are
throughout based on the untenable view Rodbertus has formed about the problem of
Schäffle, Die Quintessenz des Sozialismus,
18th ed. (Gotha, 1919), pp. 30 ff.
Degenfeld-Schonburg, Die Motive des
volkswirtschaftlichen Handelns und der deutsche Marxismus (Tübingen, 1920), p. 80.
J. S. Mill, Principles, pp. 226 ff. We
cannot here examine how far Mill took over these ideas from others. Their wide diffusion
they owe to the brilliant exposition in which Mill has presented them in his much read
Competition between the entrepreneurs sees to
it that wages do not fall below this level.
Kautsky, Die soziale Revolution, II, pp. 25 ff.
Kautsky, Die soziale Revolution, II, pp. 21 ff.
Kautsky, Die soziale Revolution, II, p. 26.
In the years of controlled economy we heard quite
often of frozen potatoes, rotten fruit, spoiled vegetables. Did such things not happen
formerly? Certainly. But they happened less often. The merchant whose fruit spoiled suffered
monetary loss, and that made him careful in the future. If he did not take better care he
was ruined at last. He ceased to direct production and was removed to a place in economic
life where he could do no more harm. But it is otherwise with the goods which the state
deals in. Here there is no individual interest behind the commodities. Here officials trade,
whose responsibility is so divided that no one gets particularly excited about a small
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