Socialism: An Economic and Sociological Analysis

The programme of the liberal philosophy of the State was summarized in a number of points which were put forward as the demands of natural law. These are the Rights of Man and of Citizens, which formed the subject of the wars of liberation in the eighteenth and nineteenth centuries. They are written in brass in the constitutional laws composed under the influence of the political movements of this time. Even supporters of Liberalism might well ask themselves whether this is their appropriate place, for in form and diction they are not so much legal principles — fit subject matter for a law of practical life — as a political programme to be followed in legislation and administration. At any rate it is obviously insufficient to include them ceremoniously in the fundamental laws of states and constitutions; their spirit must permeate the whole State. Little benefit the citizen of Austria has had from the fact that the Fundamental Law of the State gave him the right ‘to express his opinion freely by word, writing, print, or pictorial representation within the legal limits’. These legal limits prevented the free expression of opinion as much as if that Fundamental Law had never been laid down. England has no Fundamental Right of the free expression of opinion, nevertheless in England speech and press are really free because the spirit which expresses itself in the principle of the freedom of thought permeates all English legislation.

In imitation of these political Fundamental Rights some anti-liberal writers have tried to establish basic economic rights. Here their aim is twofold: on the one hand they wish to show the insufficiency of a social order which does not guarantee even these alleged natural Rights of Man; on the other hand they wish to create a few easily remembered, effective slogans to serve as propaganda for their ideas. The view that it might be sufficient to establish these basic rights legally in order to establish a social order corresponding to the ideals they express, is usually far from the minds of their authors. The majority indeed, especially in recent years, are convinced that they can get what they want only by the socialization of the means of production. The economic basic rights were elaborated only to show what requirements a social order had to satisfy, a critique rather than a programme. Considered from this point of view they give us an insight into what, according to the opinion of its advocates, Socialism should achieve.

According to Anton Menger, Socialism usually assumes three economic basic rights — the right to the full produce of labour, the right to existence, and the right to work.1

All production demands the co-operation of the material and personal factors of production: it is the purposeful union of land, capital, and labour. How much each of these has contributed physically to the result of production cannot be ascertained. How much of the value of the product is to be attributed to the separate factors is a question which is answered daily and hourly by buyers and sellers on the market, though the scientific explanation of this process has achieved satisfactory results only in very recent years, and these results are still far from final. The formation of market prices for all factors of production attributes to each a weight that corresponds to its part in production. Each factor receives in the price the yield of its collaboration. The labourer receives in wages the full produce of his labour. In the light of the subjective theory of value therefore that particular demand of Socialism appears quite absurd. But to the layman it is not so. The habit of speech with which it is expressed derives from the view that value comes from labour alone. Whoever takes this view of value will see in the demand for the abolition of private ownership in the means of production a demand for the full produce of labour for the labourer. At first it is a negative demand — exclusion of all income not based on labour. But as soon as one proceeds to construct a system on this principle insurmountable obstacles arise, difficulties which are the consequence of the untenable theories of the formation of value which have established the principle of the right to the full produce of labour. All such systems have been wrecked on this. Their authors have had to confess finally that what they wanted was nothing else than the abolition of the income of individuals not based on labour, and that only socialization of the means of production could achieve this. Of the right to the full produce of labour, which had occupied minds for decades, nothing remains but the slogan — effective for propaganda, of course — demanding that ‘unearned’ non-labour income should be abolished.

The Right to Existence can be defined in various ways. If one understands by this the claim of people, without means and unfit for work and with no relation to provide for them, to subsistence, then the Right to Existence is a harmless institution which was realized in most communities centuries ago. Certainly the manner in which the principle has been carried into practice may leave something to be desired, as for reasons that arise from its origin in charitable care of the poor, it gives to the necessitous no title recoverable by law. By ‘Right to Existence’, however, the socialists do not mean this. Their definition is: ‘that each member of society may claim that the goods and services necessary to the maintenance of his existence shall be assigned to him, according to the measure of existing means, before the less urgent needs of others are satisfied’.2  The vagueness of the concept, ‘maintenance of existence’, and the impossibility of recognizing and comparing how urgent are the needs of different persons from any objective standpoint, make this finally a demand for the utmost possible equal distribution of consumption goods. The form which the concept sometimes takes — that no one should starve while others have more than enough — expresses that intention even more clearly. Plainly, this claim for equality can be satisfied, on its negative side, only when all the means of production have been socialized and the yield of production is distributed by the State. Whether on its positive side it can be satisfied at all is another problem with which the advocates of the Right to Existence have scarcely concerned themselves. They have argued that Nature herself affords to all men a sufficient existence and only because of unjust social institutions is the provisioning of a great part of humanity insufficient; and that if the rich were deprived of all they are allowed to consume over and above what is ‘necessary’, everyone would be able to live decently. Only under the influence of the criticism based on the Malthusian Law of Population3  has socialist doctrine been amended. Socialists admit that under non-socialist production not enough is produced to supply all in abundance, but argue that Socialism would so enormously increase the productivity of labour that it would be possible to create an earthly paradise for an unlimited number of persons. Even Marx, otherwise so discreet, says that the socialist society would make the wants of each individual the standard measure of distribution.4

This much is certain, however: the recognition of the Right to Existence, in the sense demanded by the socialist theorists, could be achieved only by the socialization of the means of production. Anton Menger has, it is true, expressed the opinion that private property and the Right to Existence might well exist side by side. In this case claims of citizens of the State to what was necessary for existence would have to be considered a mortgage on the national income, and these claims would have to be met before favoured individuals received an unearned income. But even he has to confess that were the Right to Existence admitted completely, it would absorb such an important part of the unearned income and would strip so much benefit from private ownership that all property would soon be collectively owned.5  If Menger had seen that the Right to Existence necessarily involved a right to the equal distribution of consumption goods, he would not have asserted that it was fundamentally compatible with private ownership in the means of production.

The Right to Existence is very closely connected with the Right to Work.6  The basis of the idea is not so much a Right to Work as a duty. The laws which allow the unemployable a sort of claim to maintenance exclude the employable from a like favour. He has only a claim to the allotment of work. Naturally the socialist writers and with them the older socialist policy have a different view of this right. They transform it, more or less clearly, into a claim to a task which is agreeable to the inclinations and abilities of the worker, and which yields a wage sufficient for his subsistence needs. Beneath the Right to Work lies the same idea that engendered the Right to Existence — the idea that in ‘natural’ conditions — which we are to imagine existing before and outside the social order based on private property but which is to be restored by a socialist constitution when private property has been abolished — every man would be able to procure a sufficient income through work. The bourgeois society which has destroyed this satisfactory state of affairs owes to those thus injured the equivalent of what they have lost. This equivalent is supposed to be represented just by the Right to Work. Again we see the old illusion of the means of subsistence which Nature is supposed to provide irrespective of the historical development of society. But the fact is that Nature grants no rights at all, and just because she dispenses only the scantiest means of subsistence and because wants are practically unlimited, man is forced to take economic action. This action begets social collaboration; its origin is due to the realization that it heightens productivity and improves the standard of living. The notion, borrowed from the most naive theories of natural law, that in society the individual is worse off than ‘in the freer primitive state of Nature’ and that society must first, so to speak, buy his toleration with special rights, is the corner-stone of expositions upon the Right to Work as well as upon the Right to Existence.

Where production is perfectly balanced there is no unemployment. Unemployment is a consequence of economic change, and where production is unhindered by the interferences of authorities and trade unions, it is always only a phenomenon of transition, which the alteration of wage rates tends to remove. By means of appropriate institutions, by the extension, for example, of labour exchanges, which would evolve out of the economic mechanism in the unimpeded market — i.e. where the individual is free to choose and to change his profession and the place where he works — the duration of separate cases of unemployment could be so much shortened that it would no longer be considered a serious evil.7  But the demand that every citizen should have a right to work in his accustomed profession at a wage not inferior to the wage rates of other labour more in demand is utterly unsound. The organization of production cannot dispense with a means of forcing a change of profession. In the form demanded by the socialist, the Right to Work is absolutely impracticable, and this is not only the case in a society based on private ownership in the means of production. For even the socialist community could not grant the worker the right to be active only in his wonted profession; it, also, would need the power to move labour to the places where it was most needed.

The three basic economic rights — whose number incidentally could easily be increased — belong to a past epoch of social reform movements. Their importance to-day is merely, though effectively, propagandistic. Socialization of the means of production has replaced them all.

• 1Anton Menger, Das Recht auf den vollen Arbeitsertrag in geschichtlicher Darstellung, 4th Edition, Stuttgart und Berlin 1910, p. 6.
• 2Anton Menger, Das Recht auf den vollen Arbeitsertrag in geschichtlicher Darstellung, 4th Edition, Stuttgart und Berlin 1910, p. 9.
• 3Malthus, An Essay on the Principle of Population, 5th Edition, London 1817, Vol. III, p. 154 et seq.
• 4Marx, Zur Kritik des sozialdemokratischen Parteiprogramms von Gotha, edited by Kreibich, Reichenberg 1920, p. 17.
• 5Anton Menger, Das Recht auf den vollen Arbeitsertrag, op. cit., p. 10.
• 6Ibid. p. 10 et seq. Also Singer-Sieghart, Das Recht auf Arbeit in geschichtlicher Darstellung, Jena 1895, p. 1 et seq.; Mutasoff, Zur Geschichte des Rechts auf Arbeit mit besonderer Rücksicht auf Charles Fourier, Berne 1897, p. 4 et seq.
• 7My works: Kritik des Interventíonismus, Jena 1929, p. 12 et seq.; Die Ursachen der Wirtschqftskrise, Tübingen 1931, p. 15 et seq.