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PART III THE ALLEGED INEVITABILITY OF SOCIALISM
SECTION II The Concentration of Capital and the Formation of Monopolies as Preliminary
Steps to Socialism
1 The Marxian Theory of Concentration
Marx seeks to establish an economic foundation for the thesis that the evolution
towards Socialism is inevitable, by demonstrating the progressive concentration
of capital. Capitalism has succeeded in depriving the worker of private ownership
in the means of production; it has consummated the "expropriation of the direct
producers." As soon as this process is completed "the further socialization of labour
and the further transformation of land and other agents into socially exploited
and therefore collective means of production, together with the ensuing expropriation
of private owners, assume a new form. That which is now to be expropriated is no
longer the worker labouring independently but the capitalist exploiting the worker.
This expropriation is carried out by the play of the inherent forces of capitalist
production itself; by the centralization of capital, each individual capitalist
deals the death-blow to a number of others." Hand in hand with this goes the socialization
of production. The number of the "capitalist magnates" is continually decreasing.
"The centralization of the means of production and the socialization of labour reach
a point where they become incompatible with their capitalist framework. They burst
it. The last hour of capitalist private property has arrived. The expropriators
are expropriated." This is the "expropriation of the few usurpers by the mass of
the people," through the "transformation of capitalist ownership, which actually
rests already on social production, into social ownership," a process much less
"lengthy, hard, and difficult" than was, in its own time, the process that transformed
the private ownership of individuals doing their own work into capitalist ownership.
Marx gives a dialectical turn to his contentions. "Capitalist private ownership
is the first negation of the individual private ownership created by the workers'
toil. But, with the inevitability of a natural process, capitalist production brings
forth its own negation. It is the negation of the negation. This does not re-establish
private ownership, by only individual ownership based on the achievements of the
capitalist era: co-operation and the collective ownership of land and of the means
or production produced by labour." Strip these statements of the dialectic accessories
and there remains the fact that the concentration of establishments, enterprises,
and fortunes is inevitable. (Marx does not distinguish between these three and obviously
regards them as identical.) This concentration would eventually lead to Socialism,
as the world, once it was transformed into one single gigantic enterprise, could
be taken over by society with perfect ease; but before that stage has been reached,
the result will have been achieved by "the revolt of the ever-expanding working
class which has been schooled, united, and organized by the very mechanism of the
To Kautsky it is clear that "capitalist production tends to unite the means of production,
which have become the monopoly of the capitalist class, into fewer and fewer hands.
This evolution finally makes all the means of production of a nation, indeed of
the whole world economy, the private property of a single individual or company,
which disposes of them arbitrarily. The whole economy will be drawn together into
one colossal undertaking, in which everything has to serve one master. In capitalist
society private ownership in the means of production ends with all except one person
being propertyless. It thus leads to its own abolition, to the lack of property
by all and to the enslavement of all." This is a condition towards which we are
rapidly advancing "more rapidly than most people believe." Of course, we are told,
the matter will not go so far. "For the mere approach to this condition must increase
the sufferings, conflicts, and contradictions in society to such an extent, that
they become intolerable and society bursts its bounds and falls to pieces" unless
evolution has previously been given a different direction.
It should be observed that, according to this view, the transition from "High" Capitalism
to Socialism is to be effected only by the deliberate action of the Masses. The
Masses believe that certain evils are to be ascribed to private ownership in the
means of production. They believe that socialist production is likely to improve
their condition. It is therefore a theoretical insight which guides them. According
to the materialist conception of history, however, this theory must itself be the
inevitable result of a certain organization of production. Here we observe once
more how Marxism moves in a circle when it tries to demonstrate its propositions.
A certain condition must arise because evolution leads to it; evolution leads there
because thought demands it; but thought is determined by being. This being, however,
can be nothing more than that of the existing social condition. From the thinking
determined by the existing condition the necessity of another condition follows.
There are two objections against which this whole chain of reasoning has no defence.
It is unable to refute the contention of anyone who, though arguing on the same
lines, regards thought as the cause, and society as that which is caused. And it
has similarly no reply to the objection that future conditions may very well be
misconceived, and that that which now seems so desirable may prove to be less tolerable
than existing conditions. This, however, re-opens discussion on the advantages and
disadvantages of types of societies, those existing and those sketched out by would-be
reformers. But this is the very discussion which Marxism desired to suppress.
Let no one suppose that the Marxian doctrine of the concentration of capital can
be verified by the simple method of consulting the statistics of establishments,
incomes, and fortunes. The statistics of incomes and fortunes utterly contradict
it. This can be definitely asserted in spite of all the imperfections of present
statistical methods and all the difficulties which fluctuations in the value of
money place in the way of using the material. With equal confidence one can say
that the counterpart of the theory of concentration, the much discussed theory of
increasing poverty—in which even orthodox Marxists can hardly continue to believe—is
incompatible with the results of statistical investigation. The statistics of
agricultural holdings also contradict the Marxian assumptions. Those giving the
number of the establishments in industry, mining and transport appear to confirm
it. But figures that indicate a particular evolution during a limited period cannot
be conclusive. The development in this brief span might run contrary to the long
term trend. We shall do better, therefore, to leave statistics on both sides, both
for and against. For it must not be forgotten that there is a theory underlying
every statistical demonstration. Figures alone prove or disprove nothing. Only the
conclusions drawn from the collected material can do this. And these are theoretical.
2 The Theory of Anti-Monopolistic Policy
The theory of monopoly goes deeper than the Marxian theory of concentration. According
to it, free competition, the life blood of a society based on private ownership
in the means of production, is weakened by the steady growth of monopoly. The disadvantages
bred within the economy by the unlimited rule of private monopolies are, however,
so great that society has no choice but to transform private monopoly by socialization
into state ownership. However great an evil Socialism might be, it would be less
harmful than private monopoly. Should it prove impossible to counteract the tendency
towards monopoly in ever widening fields of production, then private ownership in
the means of production is already doomed.
It is clear that this doctrine calls for a searching investigation: first, as to
whether evolution is really in the direction of monopoly control, and secondly as
to what are the economic effects of such monopoly. Here one has to proceed with
special care. The time at which this doctrine was first expounded was generally
not favourable to the theoretical study of such problems. The emotional judgment
of appearances rather than the cool examination of the essence of things was the
order of the day. Even the arguments of such an outstanding economist as J. B. Clark
are imbued with the popular hatred of the trusts. Utterances typical of contemporary
politicians are to be found in the report of the German Socialization Commission
of February 15th, 1919, where it was affirmed as "indisputable" that the monopolistic
position of the German coal industry "constitutes an independent power which is
incompatible with the nature of the modern state, and not merely the socialist one."
It was, in the opinion of the Commission, "unnecessary to discuss anew the question
whether and to what degree this power is misused to the detriment of the remaining
members of society, those to whom it is raw material, the consumers, and the workers;
its existence suffices to make evident the necessity for completely abolishing it."
Marx, Das Kapital, Vol. I, pp. 726 ff.
Marx, Das Kapital, Vol. I, pp. 728 ff.
Ibid., p. 728.
Kautsky, Das Erfurter Programm, pp. 83 ff.
Wolf, Sozialismus und kapitalistische
Gesellschaftsordnung (Stuttgart, 1892), pp. 149 ff.
Clark, Essentials of Economic Theory,
pp. 374 ff., 397.
Report of the Sozialisierungskommission über die
Frage der Sozialisierung des Kohlenbergbaus vom 31 Juli 1920 (Appendix:
Vorläufiger Bericht vom 15 Februar 1919), op. cit., p. 32.
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