The Postulates of German Socialism: Socialistic Fallacies, Part Three

Socialists who range themselves under Karl Marx say: Plato, Campanella, More, Morelly, Owen, Saint Simon, Fourier, Cabet, Considerant, and Louis Blanc forsooth! Why tell us of all these Socialists, Utopians, dreamers, and more or less enlightened makers of literature, all so far removed from all reality? Neither Owen, nor Pierre Leroux were worthy to invent the word “socialism.” As for Proudhon, who said “Every man is a socialist who concerns himself with social reform,” he proved that despite his pretension, he belonged to those socialists of the clubs, the salons, and the vestries who indulged in elegiac, declamatory, and sentimental socialism in and about 1848.

Proudhon was nothing but a “petit bourgeois” as Karl Marx said. There is but one true socialism, the socialism of Germany, whose formula was propounded by Karl Marx and Engels in the “Communistic Manifesto” of 1848.

They chose “communism” because the word “socialism” had been too much discredited at the time, but they subsequently resumed it, for the logical conclusion of all socialism is communism. The word “collectivism,” says Paul Lefargue, was only invented in order to spare the susceptibilities of some of the more timorous. It is synonymous with the word “communism.” Every socialistic programme, be it the programme of St. Mande, published in 1896 by M. Millerand, which lays down that “collectivism is the secretion of the capitalist regime,” or that of the Havre Congress, drawn up by Karl Marx, and carried on the motion of Jules Guesde, concludes with “the political and economic expropriation of the capitalist class and the return to collective ownership of all the means of production.”

But is this conclusion really so very different from that of their predecessors whom they treat with such scorn? What claim have Karl Marx, Engels, and their followers to prefix the word “scientific” to the word “socialism?”

Karl Marx and Engels, while declaring themselves to be internationalists and communists, begin by themselves failing in their pretensions. Far from admitting that the French communists and socialists were their precursors, they never cease to load them with scorn and contempt. They refuse to be under any obligation to those Frenchmen whose powers of persuasion they detest and who expect clearness in others although they lack it themselves, and they are unable to submit to a “discipline of pedants.” Karl Marx and Engels want to convert socialism into a German monopoly, and when Marx says “Proletariat of all nations, unite,” what he means in “Pan-​Germanise.”

At the same time they bitterly contend with their own compatriots for the private proprietorship of their formulae, refusing to share them with anyone. Rodbertus claimed that Karl Marx had borrowed his ideas. Engels asserts that Marx had never beheld any of Rodbertus’ publications before 1858 and 1859. Inasmuch as Rodbertus’ first publication was issued in 1837, he in his turn expresses astonishment that Marx, who claimed to know everything, should pretend to such profound and long-​continued ignorance with respect to him. In revenge, Engels freely admits that Proudhon owes his conception of value to Rodbertus-​-​another instance of Pan-​Germanism. But Engels is constained to admit that Rodbertus and Marx both drew from the same English source, Ricardo, and says, “It does not occur to Rodbertus’ mind that Karl Marx may have been able to draw his conclusions unaided from Ricardo as well as Rodbertus did himself.” At all events Rodbertus has the advantage of priority in date, and despite their violent denials, Marx and Engels are the disciples of that great Pomeranian landed proprietor, the representative of the great landowners in the provincial assemblies and in the Prussian Parliament, and, therefore, actually a champion of class distinctions. In his dislike of the French Revolution, Karl Marx, himself the son-​in-​law of a Prussian “Junker,” transfers to it the hatred entertained for it by his wife’s family, and Paul Lafargue inherited it from him.

As for Lassalle, Karl Marx treated him with contempt. In his preface to “Capital,” written in 1867, he says of him (he died in 1864), “While abstaining from indicating their origin, he has borrowed from my writings, almost word for word, all the theoretical propositions of his economic writings.”

German Socialism is derived from two sources:--

(1). The French doctrine of Saint Simon, “The way to grow rich is to make others work for one,” which became in Proudhon’s works, “The exploitation of man by man.”

(2). Three formulae of Ricardo, viz.: (a) Labour is the measure of value; (b) the price of labour is that which provides the labourer in general with the means of subsistence and of perpetuating his species without either increase or dimunition; (c) profits decrease in proportion as wages increase.

Formula (b), became the “iron law of wages” of Lassalle. The French doctrines and Ricardo’s three formulas became Rodbertus’ theory of the “normal time of labour,” and of Karl Marx’ and Engels’ “surplus labour.”

I.

Karl Marx’ system is so inconsistent that M. Werner Sombart, who has tried to explain it, declares that “the law of value is not an empirical fact, but a mental fact.” It is a “stimulus to our minds,” and consequently far removed from all reality. M. Werner Sombart says that he has tried to reconcile the obviously contradictory parts of Marx’ theory of value, and adds, “at this time Engels can still certify that I was very nearly in the right, but that he in unable to subscribe without some qualification to everything that I have imported into Marx’ doctrines. Other critics were of opinion that this was not Marx’ theory of value at all.” And M. Werner Sombart adds modestly, “perhaps they are right.” Nevertheless, Engels recognizes that “even if Marx’ law of value cannot be considered incorrect, it was too vague and was capable of being set out with greater precision,” but he has not himself undertaken the task of doing so.

If the foundation of scientific socialism, with which the disciples of Marx claim to revolutionise the world, is merely a “subjective conception,” deprived of all reality, they lay themselves open to the same criticisms which they level at the French Utopians and socialists of 1848.

It is untrue that labour is the measure of value; value is measured by exchange and is based upon two objective elements, the net cost of the commodity, of which labour constitutes merely a variable element, and the purchasing power of him who desires to possess it, and upon one subjective element, the demand for such commodity. The market rate is fixed, not by the net cost, but by the purchase price.

Value is the ratio between the utility possessed by an individual or group of individuals and the demand as well as the purchasing power of one or of several other individuals. Price is the expression in money of this ratio. The vendor in offering a commodity for sale looks upon labour as an element representing 20, 30, 40, or 60 per cent of the net cost, but he adds to this the cost of raw materials, interest, and the redemption of his capital, all of them objective elements which are no less indispensable than the element of labour. He fixes his price according to the strength of the demand for which he has to provide, and to the purchasing power exhibited by those who furnish that demand. If the price he asks be greater than this purchasing power, the contemplated purchasers abstain from buying, and if the vendor be obliged to sell, he first makes a reduction in that portion of the profit which he had proposed to reserve for himself, and subsequently draws upon his total net cost, in which case he sells at a loss. But this loss falls upon the other elements in the net cost of production as well as upon the element of labour, indeed labour is only affected in the last resort.

II.

There remains Marx’ other great discovery, that of “surplus-​value” or “surplus-​labour,” which Engels call “the key of capitalist production.” It is not less completely belied by facts than the “iron law of wages.” If all the profits of the employer were derived from surplus-​labour, he would have to devote himself to two operations: (1) to increase the hours of labour and lower wages; (2) to increase the number of his workmen and repress all improvements in plant. According to these propositions, if the hours of labour decrease and wages rise, the individual employer must lose his profits and fall into difficulties. Now in England, to take an example, wages have risen and the hours of labour decreased, and yet English industry has made enormous progress and earned enormous profits during the last half century. The same thing has happened in all countries, from which the conclusion follows that Karl Marx’ theory of surplus-​value is belied by facts.

If the employer’s profit be derived from the surplus labour of the workmen, the employer should increase their number, and should decline to employ machinery, the effect of which is to decrease it. How comes it then that employers attempt, on the contrary, to decrease the number of their workmen and to supplant them by machinery? They do not seek to increase their profits by adding to the number of their employees, but by perfecting their plant.

What remains, then, of Marx’ theory of surplus-​value? What becomes of the sonorous word “surplus-​labour” and the denunciations of the exploitation of man by man? Are the socialists who continue to proclaim it entitled to protest against science when the most cursory observation so clearly gives them the lie?

III.

Karl Marx is so complete an adept in the “iron law” as to believe that the rate of wages is regulated by the rate of the means of subsistence, and that, therefore, the dearer the means of subsistence, the smaller the amount of surplus labour of which the capitalist has to dispose. A fall in prices can, therefore, only provide surplus labour for the capitalists. This was written by Karl Marx twenty years after the abolition of the Corn Laws in England, and this example alone will suffice to show his contempt for facts. Although he lived in England, he remained an opponent of free trade at a time when he was able to perceive its consequences at first hand. But when the agrarian party in Germany proposed to increase the duties on meat and on cereals, Bebel and other German followers of Marx, who laid claims to orthodoxy and repudiated Bernstein, did not hesitate to abandon their master’s doctrine and to oppose it, thereby showing that, if they still professed a belief in surplus value, their faith had become sufficiently attenuated to permit of the heresy of demanding to live cheaply instead of dearly.

As for the assertion of formula C, that “profits decrease in proportion as wages increase,” the facts establish that an employer can raise the rate of wages almost indefinitely if he can increase his market. A committee of the Manchester Chamber of Commerce has compared the net cost of cotton spun in India and in Lancashire; in spite of the high wages and the short hours of labour, the English “hand” is cheaper than the Hindoo.

All the followers of Marx, including MM. Werner Sombart and Georges Sorel, consider the “Communist Manifesto of 1847, which was drawn up by Marx and Engels, as “the starting point of a new era.” The “Manifesto” begins by asserting that “the whole history of human society to the present day is the history of the struggle of classes.” Karl Marx, Engels, and their disciple Paul Lafargue make the history of human decadence begin with the introduction of private property. Historians have, generally speaking, overlooked the claim of the Terra del Fuegans, Australian aborigines and other people who still enjoy the benefits of communistic anarchy. If Marx, Engels, and Paul Lafargue have written that they considered with them, they have failed to accommodate their conduct to their theories.

Thirty-​six years after the “Communist Manifesto,” Engels still asserts that, “Since the abolition of the ancient common ownership of the soil, the whole of history has been a struggle of classes.” M. Werner Sombart recognizes that all these struggles, far from being struggles of classes, have most frequently been conflicts between ethnic groups or between populations who inhabited different countries, but if he condemns Karl Marx’ definition of history as false as applied to the past, he adjudges it to be true as regards the future. The “Communist Manifesto” said:--

Our age, the age of the bourgeoisie, has simplified class antagonisms. Society more and more divides itself into two great hostile camps, into two great classes in direct opposition to one another, the bourgeoisie and the proletariat.

The mass of labour to provide for increases in proportion to the development of machinery and of division of labour; the number of hours of labour is increased, as well as the labour required to be performed in a particular time.

The middle classes of former times, the small tradesmen, the merchants, and the people of independent means, the artisans and peasants are all in their turn being absorbed in the proletariat. Thus the proletariat recruits from among all classes of the population.

In 1847 Karl Marx used the present indicative tense, but he was prophesying, basing the future upon the abolition of ethnic struggles and of all national and religious wars. He set up two classes in our increasingly complex society. I call this simplex system social dichotomy. “But,” says M. Werner Sombart, “modern society presents itself to us as a complex concatenation of numerous social classes, country squires, middle class, lower middle class, proletariat, officials, men learning artists, etc.” So that there must be more than two of them, in which case the process which Marx foresaw, in virtue of which actual society must forcibly end in communism, has no real existence.

Karl Marx’ theory is summarized in Victor Modeste’s formula, “the rich grow richer and poor poorer.” Karl Marx substitutes “the few” for “the rich” and “the many” for “the poor.” He sets up an antithesis between two groups, the bourgeois group, consisting of an increasingly restricted number of individuals, each of whom is increasingly inflated by capitalism, and the proletariat group who are increasingly numerous and indigent. All the rich are not equally rich, all the bourgeois are not capitalists on the same level. Consequently they are not all inflated to the same degree with what Karl Marx calls “surplus value”: they are not all magnitudes of the same order. To bring the rest of mankind into alignment with the same symmetry, as though they too are magnitudes of the same order, prepared to march with automatic step against a bourgeoisie which they are to annihilate by sheer weight of numbers-​-​for victory belongs to the big battalions-​-​to imagine two armies in perfect alignment and perfect order, one of which continually adding to its recruits crushes the other with its weight, all this is merely the conception of a Prussian corporal. But contrary to Karl Marx’ proposition, the recruits do not go to swell the proletariat army, the army they join is that of the capitalists. The proletariat army invented by Karl Marx, merely consists of candidates for the other army. The most active and sterling elements in the ranks of the proletariat are intending deserters many of whom have already acquired interests in the opposing camp. The skeleton units in that camp are formed entirely out of deserters, at whose head are the majority of the actual leaders of socialism, the most unassuming of whom become members of the lower middle class , while others become rich, substantial bourgeois like Bebel.

Karl Marx and Engels based their theory upon two postulates-​-​that the number of those interested in individual property would quickly and constantly diminish, and that the proletariat of the greater industrial system would be in a progressively miserable condition. It is necessary to the realization of socialist evolution that industry and capital be concentrated in a small number of hands, and that the masses of wage earners become more and more miserable and be deprived of all personal property. This is the process set forth in Karl Marx’ and Engels’ “Communistic Manifesto” and confirmed by the Erfurt Congress of 1891.