Modern Economic Problems Part 38

-- 11. #Compet.i.tion modified by authoritative distribution.# Authority is, after force, the oldest and was the earliest widely operative method of distribution. It shades into force, status, and charity in manifold ways, but it is essentially the a.s.signment of a common, or social, income to individuals by some person or persons chosen, or accepted, by the society to perform this function. Thus it may be distinguished from force, which takes for itself what belongs to another; and from charity, which gives to another what belongs to one's self; and from status, which transmits claims to income from one generation to another by a fixed impersonal rule, not by a personal judgment in the particular case.

Authoritative distribution is the dominant method in patriarchal tribes, in communal societies, and in monastic and other religious orders. Each person works at what he is commanded to do, and some one in authority (patriarch, head of the community, father of the monastic order) portions out the tasks and the rewards. In the family this rule largely prevails, and even after the children have come to years of discretion they not infrequently accept, from habit or affection, the will of the parents, and give up their entire wages to receive back a portion. The method of charitable distribution while the child is young gradually changes to authoritative distribution after the child becomes a worker. The untrained and indocile youth, however, is made the subject of compulsory distribution.

The collection and distribution of taxes is by public authority. No attempt is made to give back an exact equivalent to each taxpayer. The money is taken and spent by authority. The new forms, or at least the new extensions, of taxation, especially of incomes and inheritances at progressive rates, are very important examples of authoritative distribution.[14] The courts sometimes find themselves obliged to apply the method of authoritative distribution, altho they do it unwillingly. They try to confine their efforts to interpreting the contracts men have voluntarily entered into, and they avoid, so far as possible, the making of contracts or the fixing of rates.

Authoritative distribution is exemplified in the work of many commissions appointed by law to fix rates or settle disputes, such as boards of conciliation and arbitration and railway commissions.

-- 12. #Meanings of socialism.# Our reason for leaving to the last the discussion of _authority_ as a method of distribution is not that it appeared last in historical development, but that it now is the most strongly advocated as an alternative of compet.i.tion. One of the most striking developments of opinion in the nineteenth century was that favoring an increasing use of authority in distribution. This was meant not merely to supplement and modify compet.i.tion, but to displace it completely, or (in the more moderate program) in large part. This opinion, or plan, has appeared under a variety of names, the main ones being communism, collectivism, social-democracy, and socialism, of which the last name has just now the greatest vogue. Socialism is a word of manifold meanings no one of which is generally accepted.

Discussion is therefore often a Babel of tongues.

Socialism designates (1) a social[15] philosophy (2) a mode of social action, (3) a particular political party. There is thus philosophic, active, and partisan socialism. Each of these may be taken either in an absolute or in a more or less relative sense. The first meaning is the most fundamental, the second less so, and the last the least fundamental, but just now the most frequently used.

-- 13. #Philosophic socialism.# As a philosophy socialism is related to social just as individualism is related to individual. Socialism is faith in the group motive and group action rather than in self-interest and compet.i.tive action. Instead of social philosophy we may say social faith, or social ideals. This faith may be absolute, or radical, to the rejection of all economic compet.i.tion; or it may be moderate, and leave more or less place for self-interest and compet.i.tion. Every man of conscience and of ideals has moods that are socialistic (in this sense) and dreams of a world without toil, compet.i.tion, or poverty.

This social philosophy has taken form as "Christian Socialism" among men of strong religious natures, in various religious denominations.

Great secular dreamers--Plato in his "Republic," Sir Thomas More, in his "Utopia," Edward Bellamy, in "Looking Backward," William Morris, in "News from Nowhere," and others--have painted beautiful pictures of ideal economic states from which all of the great evils and problems of our society have been banished.

-- 14. #Socialism in action.# Active socialism is group action in economic affairs. This may be by private voluntary groups, as a club, church, or trade union, or by a public group, or political unit of government, which has therefore a compulsory character. The radical kind of active socialism would be the owners.h.i.+p by government of all the means of production and the conduct of all business, a.s.signing men, by authority, to particular work and granting them such incomes as the established authority thought they deserved. This kind exists nowhere. A moderate kind of active socialism is represented by each separate case of public owners.h.i.+p or industry. Even public regulation by authority, of the many kinds described in this volume, is touched with a quality of active socialism. In this sense there can be more or less of active socialism in a community; a state may be more or less socialized in its economic aspects. An English Chancellor of the Exchequer declared in the last decade of the nineteenth century, "We are all socialists now." The ever-increasing sphere of the state[16]

gives to that statement to-day a larger, fuller meaning than when it was uttered.

Socialism in action is of course always the expression of a more or less socialistic philosophy shared by a majority of the people. This great recent movement of socialization in industry is the expression not of a radical but of a moderate social philosophy. It does not look to the abolition, but only to the modification and limitation in some directions, of private property and of compet.i.tive industry. The spirit of this movement is opportunist, or experimental. It is ready to try public action, but recognizes that it has difficulties and limitations. The ultra-radical and the ultra-conservative alike declare that these measures "logically" lead on to the complete destruction of private property. But men find that they can warm their hands without being "logically" compelled to thrust them into the fire, and that they can quench their thirst without a growing resolution to drink the well dry. When this governmental activity has proceeded somewhat extensively and systematically in cities, as in Great Britain, it is called munic.i.p.al socialism; and in states, as in Germany, it is called state socialism.

-- 15. #Origin of the radical socialist party.# Socialism in the partizan sense is an actual political organization. Both in Europe and in America such organizations have been designated as "social-democratic," "socialist labor," or "labor" parties. Socialism in this sense of a party organization, or movement, is very different from a social philosophy. In its partizan phase socialism exhibits all of the baffling variability and elusiveness that it does in its other aspects. However, in its printed program the socialist party sets forth both a socialist philosophy and an ideal of active socialism in their most radical forms.

Modern political socialism traces its origin directly to the most radical of German social philosophers, Marx, Engels, and La.s.salle.

Karl Marx (1818-1883), preeminently the philosophic leader of the movement, sought to give a solider foundation of reason to the somewhat romantic socialist philosophy current in his day. His own doctrine, first set forth connectedly[17] in the Communist Manifesto in 1848, he called Communism. This has come to be called by his followers, "scientific socialism." "Scientific" was meant to emphasize the contrast with "Utopian" socialism, as Marx and Engels somewhat scornfully characterized the older communist philosophy, romances of the ideal state, and attempts to found and conduct small communistic states.

-- 16. #The two pillars of "scientific" socialism.# Scientific communism was to be based upon two immovable pillars. The one was "the labor theory of value," by which all profits and incomes from investment were shown to be robbery of the wage-workers.[18]

"Capital," that is, the owners.h.i.+p of the means of production, was declared to be the instrument of this "exploitation." The other foundation stone was "the materialistic philosophy of history," that is, the explanation of all the intellectual, cultural, and political changes of mankind from the side of the material economic conditions as causes. As Engels expressed it, "The pervading thought ... that the economic production with the social organization of each historical epoch necessarily resulting therefrom forms the basis of the political and intellectual history of this epoch." This doctrine denies that, in an equally valid sense, biological changes in brain, and cultural changes in science, arts, and education, cause the mechanical inventions and improved processes and thus alter the form bf economic production.

-- 17. #Aspects of the materialistic philosophy of history#. Marx's general formula of economic materialism had three minor propositions or corollaries: (a) The doctrine of the _cla.s.s conflict_; all history is a record of the cla.s.s struggle between those who have property, the ruling cla.s.ses within the nations, and those who have not, the oppressed working cla.s.s, (a conception of history blind to most of the great international conflicts). The cla.s.s conflict was declared to be more sharply marked and bitter than ever before; "the entire human society more and more divides itself into two great hostile camps, into two great conflicting cla.s.ses, _bourgeoisie_ and proletariate."

(b) The doctrine of _increasing misery_; the conditions before described must cause the steadily increasing degradation of the ma.s.ses. (c) The _catastrophic theory_; the final and inevitable result of this movement must be a revolution, when the downtrodden workers will throw off their chains and expropriate the expropriators. There is no doubt that Marx, when he first formulated this philosophy, believed that such a revolution, most violent in nature, would occur within a few years.

-- 18. #Utopian nature of "scientific" socialism#. The term "scientific" set in contrast with "utopian" was meant to imply that the doctrine of Marx was not "utopian" (a word which had come to mean fanciful and impracticable). Marx had a contempt for the romances of the ideal state and for what he deemed to be the unfounded speculations of earlier prophets of communism. But utopian (from _utopia_, Greek for no place) means nonexistent, and Marxian socialism surely was that. "Experimental" or "actually at work" would have been a more logical contrast with "utopian." Marx and his followers likewise had a contempt for the communistic experiments, or settlements and colonies, which by the scores had been started and had failed, bringing discredit upon all communistic proposals. The beauty of "scientific" socialism was that it never could be tried on a small scale--or tried at all until a whole nation adopted it.

The old time "scientific" socialist had a lofty scorn for any less dogmatic philosophy than his own or for any less sweeping social change than that he expected. Moderate social reform to him was but temporizing; indeed, it was evil, inasmuch as it helped to postpone the inevitable, but in the end, beneficent catastrophe of the social revolution. A step-by-step movement toward socialism, state socialism,[19] even of a pretty sweeping character, was, to the old-time Marxians, not really socialism at all. A valid reason for this att.i.tude was found in the extremely limited manhood suffrage and in the aristocratic cla.s.s government of most European countries, especially of Germany; so that, as the party socialists saw it, multiplying state enterprises but increased the power of the ruling, and eventually of the militarist, cla.s.s. The social-democratic leaders felt that until they themselves were in power, the growth of "state socialism" would be a calamity for the nation. The events of 1914 may make our judgment tolerant toward their feeling.

-- 19. #Its unreal and negative character.# The so-called "scientific"

socialism had, therefore, a peculiarly unscientific spirit; for, in a modern sense, science implies a patient search for truth, not a sudden revelation; a constant testing of opinions by observation and experiment, not a dogmatic conviction that refuses the test of reality. "Scientific" socialists talked much (and still talk much) of the "evolution" of social inst.i.tutions; but they refused to admit the essential condition for inst.i.tutional evolution, the compet.i.tive trial on a small scale, of a new form of economic organization to prove its fitness to survive. Indeed, it had been tried on a small scale many times, and had always failed in a brief time.

Lincoln said that a man's legs ought to be long enough to reach to the ground; but "scientific" socialism was not built on that plan. To be sure it contained many elements of truth, but these were so distorted that the result was a caricature of history, of philosophy, of economics, and of prophecy. The most important influence of radical socialism has been exerted through negative criticism. It has performed the function of a party in opposition, relentlessly hunting out and pointing out the defects of existing inst.i.tutions, arousing the smugly contented, and, by its very recklessness and bitterness, inspiring at times a wholesome fear of more revolutionary evils. This has been a real service to the cause of moderate and constructive reform.

-- 20. #Revisionism and opportunism in the socialist party#. Most men have always agreed in an adverse judgment of the claims of "scientific" socialism. The criticisms have been admitted in part even by the intellectual leaders among the Social-democrats. They lost some of their fantastic illusions, they tempered some of their exaggerated claims of oracular inspiration. "Revisionism," the socialist higher criticism, became influential in the party. Whenever the party gained any success at the polls, the socialists in public office and the party leaders found it necessary to "do something" immediately.

The rank and file might be willing to talk of the millennium, but preferred to take it in instalments instead of waiting for it to come some centuries after they were dead. And so the socialist party, as fast as it gained any practical power, became "opportunist" and worked for moderate practical reforms. The leaders did this with many misgivings lest the ma.s.ses might become so reconciled to the present order that they would refuse to rise in revolt. In that case the revolution never could happen (altho it was inevitable).

As the party socialists did more to improve the present, they talked less of the distant future state. They ceased their criticisms of "mere temporizing" "_bourgeois_" reforms, and began to claim these as the achievements of the socialist party. They began to write of the remarkable growth of social legislation in Europe and America in the past half century under such t.i.tles of "socialism in practice" and "socialists at work." This was despite the fact that these reforms were all brought about by governments in which the socialist party had no part whatever or was a well-nigh insignificant minority. This bald sophistry, or self-deception, was easily possible by confusing the word "socialist" as relating to the abstract principle of social action, with socialist as applied to their own party organization. It is as if the Republican party in the United States were to claim as its own all the works of the republican spirit and principles of government in the world from the party's organization to the present time.

-- 21. #Alluring claims of party socialism.# In thus changing the emphasis of its claims, the socialist party has been somewhat put to it to retain any clear distinction between itself and other parties of social reform. It has done this however by continuing to proclaim the _ultimate_ desirability of reorganizing all society without leaving any productive wealth in private hands. It has had no misgivings prompted by the experience of the world. Its case continues to be far the strongest in its negative aspect, the exposure of the evils in present society. To many natures the claims of the socialist party have all the allurements of patent medicine advertis.e.m.e.nts. These describe the symptoms so exactly and promise so positively to cure the disease, that they are irresistible--especially when the regular physicians keep insisting that the only way to get well is to take baths and exercise, and stop the use of whisky and tobacco.

Those attracted to the socialist party by its sweeping claims are of two main types. The one is the low-paid industrial wage-worker; the other is the sympathetic person of education or of wealth (or of both), who has become suddenly aroused to the misery in our industrial order. To both of these types, feeling intensely on the subject, the socialist party appeals as the only party with promises sweeping enough to be attractive. The one becomes the proletarian, the other the intellectual, the one becomes the workshop, the other the parlor-socialist. Many of the latter type are persons overburdened either with unearned inherited wealth or with an undigested education.

Many of them, having enjoyed for a time the interesting experience of radical thought and of bohemianism, come later to more moderate social opinions.

-- 22. #Growth and nature of the socialist vote.# In 1912 the socialist party in the United States polled 900,000 votes in the presidential election. The socialist parties in the various lands have almost steadily grown, and now cast votes numbering in the aggregate six to ten million (as variously estimated, the name socialist being elastic). The socialist parties may be expected to continue growing. They will ultimately gather within their folds most of the ultra-discontented, and others that are not able to find an alternative economic philosophy and a plan that inspire their hopes.

But the socialist party vote is made up of men of many shades of opinion, a large number of whom hold only the mildest sort of socialistic philosophy. Not many of the more than 3,000,000 social-democratic voters in Germany before the war were members of the regular party organization; but they supported the party as the one unequivocal way to declare themselves against militarism and undemocratic cla.s.s-government. In the United States only about one tenth of the socialistic party voters have been enrolled as members of the party.

-- 23. #Economic legislation and the political parties.# This floating socialist vote is now so large that it is eagerly sought by candidates of the older parties. These independent voters care little for the radical and distant tenets of the socialist party leaders, and these, to attract wider support, are forced to place increasing stress upon immediate and moderate reforms. On the other hand, men of larger qualities of leaders.h.i.+p in the older parties are constantly adopting and advancing pending measures of social reform. Where this is not done the socialist party tends more quickly to develop into the one powerful party of protest and of popular aspiration, receiving support from many elements of the middle and small propertied cla.s.ses and from non-radical wageworkers. This movement from both sides is leaving less noticeable the contrast between the socialist party and other parties claiming to be "progressive" or "forward looking." The strongest allies of the more radical communistic faction of the socialist party are those members of the conservative parties who fail to recognize the need of humane legislation, who irritate by their unsympathetic utterances, and who unduly postpone by their powerful opposition the gradual and healthful unfolding of the social spirit, energy, and capacity of the nation. The greatest problem of social and economic legislation for the next generation is to determine how far, and how, the principle of authority may wisely be subst.i.tuted for the principle of compet.i.tion in distribution.

[Footnote 1: Distribution as a problem of incomes is not to be confused with distribution of physical goods by transportation (as on the railroads) or by commercial agencies transferring goods from producer to consumer (as in cooperative distribution). Functional distribution is the prime subject of the theory of value in Vol. I (e.g., usance, value of labor, time-preference, profits), a study of which is prerequisite to an intelligent study of the problems of personal distribution.]

[Footnote 2: See Vol. I, pp. 190, 223; and above, ch. 2, secs. 11-13.]

[Footnote 3: See Vol. I, pp. 248-255, 297-298, 406, 408, 415-418, 480-481, 483-484: also Vol. II, pp. 22-23, 146-148, 161-162, 178-180, 283, and various pa.s.sages in the chapters of this Part.]

[Footnote 4: See above, ch. 2, sec. 7, on limitations upon bequest and inheritance.]

[Footnote 5: See ch. 18.]

[Footnote 6: See ch. 12, sec. 14.]

[Footnote 7: See ch. 2, sec. 10.]

[Footnote 8: See Vol. I, pp. 54 and 66; also pp. 504 507 in an organic theory of value.]

[Footnote 9: See above, sec. 2, note 3.]

[Footnote 10: Compare, e.g., portions of chs. 9, 15, 20, 21, 27; and 29, see. 17.]

[Footnote 11: See ch. 2, sees. 11-13.]

[Footnote 12: See Vol. I, p. 75.]

[Footnote 13: See, e.g., Vol. I, pp. 25, 71, 205, 479, 509, 511, 513.]

[Footnote 14: See above, ch. 18.]

[Footnote 15: See Vol. I, p. 6, on "social" and the social sciences.]

[Footnote 16: See e.g., ch. 9, secs. 2, 10; ch. 11, secs. 7, 8; ch.

16, secs. 3, 4, 12; chs. 18, 21, 22, 23, 27, 29, and 30.]

[Footnote 17: See Vol. I, p. 502, on communism and value theory.]

[Footnote 18: See Vol. I, pp. 210, 228, 502 on the labor-theory of value.]

[Footnote 19: See above, sec. 14.]