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The agricultural population consisted of 10,410,877
persons. Of these about 4,530,000 were "farm hands"
or other hired labourers, while the remainder consisted of
"farm operators." Only 527,637 farms had an area of



THE PHILOSOPHY OF SOCIALISM 127

260 acres or more. We will assume that each of these
farms had a separate owner, and will consider such big-
farm owners as agricultural capitalists, classifying the
owners or cultivators of the smaller-sized farms with the
all-embracing "middle class."

On this basis we reach the following class division of
the active American population :

Capitalists:

Manufacturing and Mechanical 254,810

Trade and Transportation 189,675

Farmers 527,637

Total 972,122

Middle Class:

Manufacturing and Mechanical 447,928

Trade and Transportation 2,242,397

Domestic and Personal Service 790,834

Professional Service (all) 1,258,538

Farmers 5,880,877

Total 10,620,574

Wage-earners:

Manufacturing and Mechanical 5,373,108

Trade and Transportation 2,334,892

Domestic and Personal Service 4,789,823

Farm Labourers 4,530,000

Total 17,027,823

To complete our calculations we must add the "un-
employed" of both classes, capitalists and wage- workers.
To be generous with the former we will assume that one-
third of their total number follow the sole and exclusive
vocation of being idle, while two-thirds are engaged in
some "gainful" occupation thus adding another



128 SOCIALISM: PROMISE OR MENACE

500,000, in round figures, to their numbers. On the
other hand, the number of wage-earners enumerated
in the census is based on the "average" actually em-
ployed on specified days, and does not take into account
the workers temporarily or permanently without jobs.
Since the number of persons unemployed during some
time of the year amounted, according to the same census,
to no less than 6,468,964, it is safe to add an average of
1,500,000 to the column of wage- workers.

Thus the total number of American capitalists does
not exceed in round numbers 1,500,000; that of the
"middle classes" may reach about 10,500,000, while the
number of wage-workers must be conservatively esti-
mated at about 18,500,000.

Of the 30,500,000 persons figuring in our estimate
only 1,500,000 are unquestioned beneficiaries of the capi-
talist system and interested in its con tinuation ; 18,500,000
are its victims and economically interested in its abro-
gation. Of the remaining 10,500,000 persons, designated
as the middle class or classes, the majority are in revolt
against the existing system. More than a third of the
American farmers are mere tenants, whose lot is often
worse than that of the wage-worker, and the greater
part of the farm-owners are exploited by the mortgagees,
railroad companies, and other capitalist agencies almost
as much as the wage-worker. The professional men and
"salaried" employees likewise feel the burdens of eco-
nomic pressure weighing on them ever more heavily under
Capitalism. It is safe to assert that at least one-half
of the persons embraced within the general category
of the "middle classes" are justly dissatisfied with the
existing order.



THE PHILOSOPHY OF SOCIALISM 129

Adding these to the number of the wage-workers, we
obtain about 23,750,000 persons, or about 78 per cent
of the entire active population, who are materially in-
terested in a change of the present economic system and
may be regarded as possible candidates for enlistment in
the Socialist movement.

Dr. Ryan admits that the economic dependents con-
stitute a large majority of the population and have it
within their power to bring about a " regime of Socialism "
by united action ; but he consoles himself with the placid
assumption that they would not make use of that power,
for various reasons. The assumption is rather unwar-
ranted in view of the steady and rapid growth of Socialism
and other radical economic movements in all advanced
countries of the world.

Toward the Marxian theory of Surplus Value Dr.
Ryan is less conciliatory than toward the doctrines of
Economic Determinism and of the Class Struggle. He
dismisses it summarily as "a pedantic and mystifying
formulation of things that are either obvious, improvable,
unimportant, or untrue."

Dr. Ryan's own theory of the origin of wealth is stated
in the following terse sentence: "Since the product
would not come into existence at all if either capital or
labour were wanting, and since every part of it is due in
some degree to the action of both, it is quite impossible
to determine how much of the product is specifically
attributable to either factor." Let us examine this
seemingly plausible statement.

Every modern commodity or "product" is created by
the concurrence of three factors raw material, machin-



130 SOCIALISM: PROMISE OR MENACE

ery, and human labour. It is the first two factors which
my opponent comprehends under the term "capital."
Now raw material and machinery are themselves "prod-
ucts" created by the application of labour to objects
found in a "raw" or "natural" state in or on the earth,
and in the last analysis every commodity thus owes its
existence to the free gifts of nature plus various succeed-
ing processes of human labour, manual or mental. If
by his assertion that capital and labour are equally re-
quired for creating the product Dr. Ryan merely intends
to say that under the present system the capitalists
have monopolized the resources of the earth in their
original or "raw" form as well as in the more perfected
form of modern machinery, and that labour is helpless
without that monopolized "raw " material and machinery
and must yield part of its fruit for their use, he states
what is truly "obvious"; and if he means to imply
that there exists some mysterious active factor in pro-
duction known as "capital," and independent of natural
resources and instruments of work, he states what is
obviously "untrue."

It is not claimed that Marx discovered the very patent
fact that the capitalist's ownership of the instruments of
production enables him to exploit the worker. It is
the formulation of the mode and process of such exploi-
tation which constitutes Marx's politico-economic dis-
covery known as the theory of "surplus value."

Dr. Ryan takes exception to the part of the surplus-
value theory which holds that wages are determined by
the cost of maintaining the worker in conformity with
his established standard of life, on the ground that such
standard is quite "elastic and relative." So it is, and so



THE PHILOSOPHY OF SOCIALISM 131

is practically every other social standard. The Socialists
are the first to recognize this undeniable truth, hence
their constant efforts to raise the standard of the workers'
life. But apart from the slight and slow oscillations, the
"established standard of life" of a specified class of people
is a tolerably concrete and measurable factor, as we will
readily perceive by a comparison of the lives and require-
ments of the American mechanic and the Chinese labourer.
And it is quite as unprofitable in this connection to specu-
late whether wages first determined the standard of life
or vice versa, as it is to try to establish the chronological
priority between the hen and the egg.

The Economic Interpretation of History, the doctrine
of Class Struggle, and the theory of Surplus Value con-
stitute the main features of the Marxian philosophy and
are generally accepted by all its adherents. But within
the ranks of the Marxists themselves there have recently
developed two divergent schools of thought. The older
school of "orthodox" Marxians has for its spiritual head
the well-known Socialist writer Karl Kautsky, while
the newer school of "revisionists" or "neo "-Marxians
is represented most prominently by the Socialist member
of the German Reichstag, Eduard Bernstein. The
controversy between the two contending schools turns,
among other things, on the merits and interpretation of
a brief passage from Marx's "Capital," which reads sub-
stantially as follows :

"Along with the constantly diminishing number of
the magnates of capital who monopolize all advantages
of this transformation (the economic development of
capitalism), grows the mass of misery, oppression, sla-



132 SOCIALISM: PROMISE OR MENACE

very, degradation and exploitation of the workers ; but
with it also grows the revolt of the working-class, a class
always increasing in numbers, and disciplined, united
and organized by the mechanism of the process of capi-
talist production itself. . . . Centralization of the
means of production and socialization of labour at last
reach a point where they become incompatible with their
capitalist shell, which is burst asunder."

The "revisionist" Socialists deny that the general con-
dition of the working-classes shows a tendency toward
progressive deterioration ; they maintain that the wage-
workers are not increasing in numbers as fast as Marx
predicted ; that they do not absorb the "middle classes,"
and that the latter have lately taken a new lease of life
by changing their economic form and function dis-
appearing as independent small business men, but
reappearing as stockholders and officers of large corpora-
tions. The "revisionists" finally deny the alleged ten-
dency of capital to concentrate in the hands of a "con-
stantly diminishing" number of individuals.

On the other hand, the orthodox Marxians, while they
are ready to admit an absolute process of improvement
in the lot of the worker, claim that his condition is one
of relative social and economic deterioration, that his
share in the total product is steadily diminishing, and that
his subsistence grows ever more precarious. They main-
tain that the progressive process of transformation of the
middle classes from independent producers or traders
into salaried employees tends to alienate them more and
more from the capitalist class and to couple their for-
tunes with those of the wage-earning classes, thus sub-
stantially justifying Marx's prediction. And, finally,



THE PHILOSOPHY OF SOCIALISM 133

they contend that while the predicted concentration of
capital has not been materialized in the shape of an ever
decreasing number of wealthy individuals, it has been
brilliantly fulfilled through the concentration and con-
trol of capital in the hands of the powerful modern trusts
and business combines.

Personally, I am inclined toward the "orthodox"
view, but I purposely omitted the controversy from my
introductory statement of the Socialist philosophy for
the reason that it is a big and complex subject which can-
not be adequately treated in a popular discussion on
the general subject of Socialism, and for the still stronger
reason that the subject is entirely foreign to the present
debate. The controversy between the "revisionist"
and "orthodox" Marxians is an internal affair of the
Socialist movement. It may influence the Socialist
tactics and methods, but it does not affect the general
Socialist viewpoint or the ultimate aim and objects of
the movement.

The best proof of this assertion is the fact that Eduard
Bernstein, whom Dr. Ryan cites as his principal
authority, is and remains an active and militant Socialist.
If the facts and figures so elaborately compiled by Dr.
Ryan on the subject above indicated be sustained, they
support the position of the "revisionist" Socialist, Ed-
uard Bernstein ; if they be disproved, the position of
the "orthodox" Socialist, Karl Kautsky, is vindicated;
but in no event do they offer any solace or comfort to the
anti-Socialist, John A. Ryan.



134 SOCIALISM: PROMISE OR MENACE

IV. SURREJOINDER

BY DR. RYAN

In his rejoinder my opponent declares that I have not
specifically supported my contention that the Marxian
philosophy exaggerates the social importance of economic
factors. Such specific proof could not be given, owing
to lack of space, and need not be given, inasmuch as the
subject will come up again in the articles on morality
and religion. It seemed to me that the mere statement
of Kautsky's theory of the development of Christianity,
and of the theory that all vice, crime, and sin are due
to economic causes, was a sufficient refutation of these
extraordinary views.

Here I shall simply call attention to two important
and incontestable facts :

First, the authentic documents which describe the rise
of Christianity show no trace of an industrial or social
reform movement; and, second, the most typical and
widespread vices, crimes, and sins, such as intemperance,
unchastity, lying, calumny, indolence, revenge, violence,
and greed, permeate all classes in approximately the same
degree, and would continue in any form of society that
could be devised.

In connection with the first of these points I would
call attention to the brief but convincing refutation of
Engels' explanation of the Protestant Reformation and
of Calvinism, given on pages 34-41 of Professor Sim-
khovitch's recent work, "Marxism versus Socialism."

I am reminded by my opponent that the class struggle
"is not a polite social function, . . . but an antagonism



THE PHILOSOPHY OF SOCIALISM 135

of economic interests, created by the inexorable condi-
tions of capitalist production." But the antagonism
between the buyers and sellers of labour power no more
implies a struggle for the overthrow of the wage system
than the similar antagonism between the buyers and
sellers of goods means a contest to abolish the system
of economic exchange. In the American trade-union
movement the majority are quite well aware of the antag-
onism of interests existing between themselves and their
employers, but they are contending for higher wages and
other improvements in their economic condition, not for
the destruction of Capitalism. Should this contest for
better conditions within the present order continue to
be successful, they may refrain forever from making
the conflict so intense or carrying it so far as Mr. Hillquit
assumes and hopes.

The inference that the class struggle must go to this
extreme is not warranted by the mere fact of interest-
antagonisms. Both parties may find that they have a
common interest in maintaining the present system, just
as the buyers and sellers of goods realize that exchange
is better than independent and isolated production.
My opponent's forecast of a class struggle for the over-
throw of Capitalism is based, not upon tendencies ex-
perimentally evident in contemporary industry, but
upon an apocalyptic theory of those tendencies. It is
a lingering echo of that Marxian aprioristic fatalism
and utopianism which had a vision of economic deter-
minism leading inevitably to concentration of capital,
impoverishment of labour, social revolution, and final
reconciliation of the warring elements in the golden age
of Socialism.



136 SOCIALISM: PROMISE OR MENACE

Turning from theory to statistics, Mr. Hillquit ques-
tions Professor Streightoff's and my own estimates of
the number of persons who own income-bearing property
in the United States. While he points out that the
census of 1900 reported only 3,653,823 farmers (in 1910
the number was 3,948,722) as owning all or a part of
their farms, he fails to note that the census covers only
farmers, farm operators, not farm owners.

It reports only those owners who are also cultivators,
paying no attention to those rural proprietors who are
not themselves engaged in farming. According to the
same census, there were more than two million tenant
farmers. Now it is entirely probable that the majority
of the owners of the rented farms were not themselves
farm operators, and therefore do not appear in the census
figures. When these are added to the 3,948,722 culti-
vating owners (census of 1910) the sum will undoubtedly
reach 5,000,000. Moreover, this number omits entirely
the hundreds of thousands of owners of rural land which
has not yet been brought under the plough.

If my opponent's objections to the other items in
Professor Streightoff's estimates have no sounder basis
than the one just examined, they may be summarily set
aside. That many owners appear more than once in
the different totals I have already admitted; but I
insist that when all reasonable deductions on this account
are made from the grand total of 24,000,000, and when
the remainder is increased by the "uncounted millions
who possess government securities and the securities of
corporations," the final result may be put quite conser-
vatively at 26,000,000. This is a majority of the persons
in the United States whose age was twenty years and



THE PHILOSOPHY OF SOCIALISM 137

over in 1910. It will stand as a reasonable estimate until
it is overthrown by specific statistics and arguments.

Mr. Hillquit submits an analysis of the census report
of 1900 on "Occupations," from which he deduces the
following conclusions :

Capitalists 1,500,000

Members of Middle Classes 10,500,000

Wage-earners 18,500,000

To these estimates I would take only a single excep-
tion. Of the four and one-half million farm labourers in
the census tables, 2,366,313 are described as "members
of family." 1 At least one million of these are surely
more akin to the middle classes in ideas and condition
than to the wage-earners. When we transfer them to the
former division, we have 11,500,000 members of middle
classes, and 17,500,000 in the wage-earning class.

Probably the most painstaking attempt to discover
from the census tables the relative strength of the differ-
ent economic classes is seen in two articles by Isaac A.
Hourwich in Volume XIX of the American Journal of
Political Economy. The writer is, I believe, a Socialist.
According to his computations, the total number of
wage-earners is a little less than sixteen million (p. 205),
or a little more than half the number of persons in all
gainful occupations. As Mr. Hourwich took no account
of the unemployed, his estimate of the number of wage-
earners proves to be about the same as that of Mr.
Hillquit, when the latter is corrected by eliminating one
million members of farm families.

However, Mr. Hourwich estimates the number of

1 "Occupations," p. xxiii.



138 SOCIALISM: PROMISE OR MENACE

industrial wage-earners, that is, the manual workers en-
gaged in urban and strictly capitalist industries, at a little
less than ten million. In his view only these are likely
to become actively engaged in a working-class movement.
The other six million wage-earners, together with the
salaried classes, the professional and quasi-professional
classes, the agents and the travelling men, are grouped
by him under the head of the "public," or the middle
classes. His conclusion as to the relative strength of
the three great economic groups is : industrial wage-
earners, 34.8 per cent; the public, 31.3 per cent; entre-
preneurs, or the business class, 27.7 per cent.

Professor Commons arrives at a very similar conclu-
sion. In his opinion, only one-third of the adult males
of the country are available for a class conflict, nor are
the other two-thirds likely to be drawn into it in the
near future. 1

These estimates of the proportion of our industrial
population which is likely to be drawn into an active
class conflict conform much more closely to the facts
than does the view of Mr. Hillquit. The economic
grievances of the farming, salaried, and professional
classes, and the growth of "radical economic move-
ments," upon which he relies, mean nothing more than
a need and a demand for reforms. At present they do
not express nor consciously include a desire for Socialism.
The various groups of persons who feel these grievances
are "possible candidates for enlistment in the Socialist
movement" only in the sense that all things are possible.

1 The American Journal of Sociology, May, 1908. Cf. the excellent
analysis of the situation by Simkhovitch in "Marxism versus Socialism,"
pp. 216-224.



THE PHILOSOPHY OF SOCIALISM 139

Not until their demands and hopes for social reform
within the present system have been proved futile will
any important percentage of them become probable
candidates for Mr. Hillquit's movement. His faith that
they will sooner or later reach this position is, of course,
based upon his hope that mere social reform will fail.
This is a purely a priori assumption.

Concerning the "steady and rapid growth of Social-
ism," which is another element in the foundation of his
faith, there are many signs that it has already received
a serious check. The numerous desertions from the
organized movement in more than one country of Eu-
rope, but especially in Germany, and even in the United
States, the bitter internal dissensions created by Syn-
dicalism, I.-W.-W.-ism, and other elements, and the
better education of the public with regard to the real
nature, arms, and affinities of Socialism, are some of the
more important facts which point to this conclusion.

Of course, I never had any intention of denying that
capital springs ultimately from the union of labour and
the raw material of nature. In passing, I would observe,
however, that the "crystallized labour " in capital is not
the labour of the men who now work with the capital.
Hence their labour has not created the whole product.
My real point was that Marx's assertion is unprovable,
to wit: "The means of production never transfer more
value to the product than they themselves lose during
the labour process." 1 The contribution of the two fac-
tors, labour and capital, to the product cannot possibly
be distinguished. Consequently we have no means of
*" Capital," i, p. 116; Humboldt Edition.



140 SOCIALISM: PROMISE OR MENACE

knowing how much of the product's value is due to
either present or "crystallized" labour.

Not the fact, but the "mode and process," of capitalist
exploitation, says my opponent, constitute the "dis-
covery" in the theory of surplus value. Yet the mode
and process have always been quite as obvious as the
fact itself. The statement of the "discovery," either
in my opponent's pages or in Part III of the first volume
of "Capital," merely amounts to this : Since only a part
of the product of industry is needed to support the
labourer in conformity with his established standard of
living, the capitalist takes the remainder because he has
the power to take it. The truth in this formula was
surely quite as obvious to intelligent men before the
days of Marx as it has since been to those who have
never read a line of "Capital."

The "established-standard-of -living theory" is fre-
quently so presented in Socialist propaganda as to imply
that the worker gets only a bare subsistence. Of course,
this is not true, nor did Marx himself ever include it in
his statement of the theory. In the second place,
wages are not always regulated by the standard of living.
When wages are forced up by a strong labour union, or
down by a commercial crisis, they become, with reference
to the standard of living, cause instead of effect.

Mr. Hillquit is right in his statement that the "re-
visionist" controversy is outside the issue in this debate.
Hence I did not bring it in. I barely alluded to it in
connection with the name of Bernstein.

To that part of the Marxian theory about which the
controversy rages I did, however, give considerable
space. I wanted to discuss the Socialist philosophy in



THE PHILOSOPHY OF SOCIALISM 141

its entirety as expounded by Marx, rather than confine
myself to a version from which all the troublesome and
controverted elements had been tenderly expurgated.

The most concrete and appealing part of the Marxian
philosophy is the theory of the class struggle ; the most
vital and popular element of the latter is the prophecy
of "increasing misery." It supplies the ordinary
Socialist, "the man in the street," with an easily grasped
reason for his indictment of the present order, and for
his faith in the near approach of the Collective Common-
wealth. It still plays an important part in the Socialist
propaganda, is still in substance accepted by the ma-
jority in the Socialist movement.

Take away this prophecy, and the class struggle be-
comes "Marxism with Marx left out." Convert this
prophecy into the statement that the working classes
are advancing less rapidly than the capitalists, and
that the middle classes are becoming salary receivers,
and you make the class struggle, perhaps not a "polite
social function," but a sham battle, a sort of social
wrist-slapping contest. You have taken out of the
class-struggle theory all those emotional, catastrophic,
and revolutionary features which have always exhibited


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