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form Socialism from a vague humanitarian and classless
ideal into a practical economic and political movement
of the working-class.


The Socialists of the beginning of the last century
assumed that all social evils were due to a "faulty"
organization of society caused by lack of social intelli-
gence, and that society would be reorganized on a
"rational" and "just" basis as soon as men, and par-
ticularly those in power and authority, could be made
to realize the faults and iniquities of the prevailing
order. Hence the early Socialists addressed themselves
to the conscience of mankind in general and to the
generosity of the wealthy and powerful in particular,
trying to convert them to their views by arguments and
exhortation and by "practical demonstrations," i.e. the
establishment of experimental "socialistic" communities.

Thus Charles Fourier, the great French Socialist of
the primitive or "utopian" school, made a public appeal
to the men of wealth to furnish him with the means of
founding a model community, and every day during the
last ten years of his life he went to his house at noon-
time with the regularity of clockwork, expecting the
visit of a sympathetic millionnaire in response to his
appeal. Robert Owen, Fourier's illustrious English con-
temporary, even went so far as to submit his plans of
industrial reorganization of society to Czar Nicholas I
of Russia and to the Congress of Sovereigns at Aachen.

The philosophy of Karl Marx introduced a radical
change into the situation. It asserted the doctrine that
the workers could not hope for substantial relief from
the ruling classes, since the capitalists cannot give up
the private ownership of the tool without committing
economic suicide. It taught the workers that they must
depend on their own efforts for their social salvation.
Marxism thus substitutes enlightened class conscious-


ness and consistent class action on the economic and
political fields for the inarticulate class instinct and one-
sided activity of the purely economic organizations of
labour and the purely propagandist efforts of the early
Socialist schools.

In its general character and immediate promise So-
cialism is thus primarily a movement of the working-
class. But in its practical operations and ultimate
benefits it is by no means restricted to the wage-workers

While the capitalists and wage-workers are the most
important and best-defined interest groups or classes in
modern society, they are not the only classes. Between
them and alongside of them there are numerous and im-
portant economic groups usually designated by the general
term "middle classes." These consist of small farmers,
manufacturers, and merchants; professionals or "free
practitioners" of all callings, such as physicians, lawyers,
writers, artists, and clergymen; and "intellectuals"
directly employed by the capitalist class, such as super-
intendents, accountants, and clerks. The direct eco-
nomic interests of many of these classes are more closely
allied with those of the workers than of the capitalists,
and in the social struggles of the classes they may fre-
quently be found siding with the former.

Furthermore, while the working-class would be the
most direct and immediate beneficiary of the contem-
plated Socialist transformation, the benefits of the latter
would ultimately accrue in a very large measure to man-
kind at large. It is not the aim of Socialism to put the
workers in power over other classes of society, to sup-
plant one dominant class by another. Since wage labour


represents the last form of economic dependence and
exploitation, the victory of the workers in the pending
class struggle must result in the abolition of all classes
the economic emancipation of the entire human race.

In the process of evolving an ever higher civilization,
history often selects one social class as its chosen instru-
ment. The capitalist class in the period of its militant
youth was such an instrument of civilization in demolish-
ing the antiquated feudal system; and the Socialist
working-class is the instrument of an impending superior
civilization in striving to abolish capitalism and to usher
in the higher order of cooperative effort and general
enjoyment. It is this larger aspect of the Socialist
movement which attracts numerous persons outside of
the ranks of the wage-working classes. For while a class
as such can never act in opposition to its direct and
immediate economic interests, the individual often is
guided in his sympathies and actions by the broader
consideration of ultimate public benefit.

One of the fundamental propositions of the economic
interpretation of history is that the form of society at
any given time cannot be changed unless the economic
development has made it ripe for such change. To
complete his case, the Socialist theoretician must there-
fore prove not only that it is in the interest of the work-
ing-class to introduce the system of Socialism, but also
that it has the power and ability to do so, and that the
current of economic development favours such change.

The Marxian Socialist contends that the requisite
conditions for the transition to Socialism are ripening
within the framework of modern society, and that the


working-class is fast developing the ability to effect the

By the inexorable laws of its own evolution Capital-
ism gradually wipes out the individual factor in pro-
duction and management. The machine and factory
system make production a social and cooperative process,
while the large corporations and trusts organize the
management of the industries on broad national lines.
And the laws of capitalist development are still at work,
busily undermining the very foundation upon which the
system rests. The competitive warfare fattens its
victors and destroys its victims every day. Every day
capital and economic power concentrate hi the hands of
an ever narrowing circle of industrial and financial
interest groups.

In the United States we can already point out a small
number of combines and individuals who together con-
trol the main sources and products of the national wealth.
This process has proceeded with gigantic strides within
the last twenty-five years. What heights will it reach a
quarter of a century hence? Will one great money
octopus be allowed to fasten its greedy tentacles on the
life and existence of the hundred million inhabitants of
the country, or will the nation develop a power of suffi-
cient strength and intelligence to free itself from the
menace by reorganizing society on a new and sounder
basis ?

The Socialists assert that the Socialist movement of
the working-class is developing into such a power. The
ranks of the workers are steadily extending, their num-
bers are rapidly increasing. The process of capitalist
concentration results among other things in the elimina-


tion of the independent small producers and traders, who
are forced in ever increasing numbers into the state of
dependent "salaried" employees, and the cohorts of
industrial wage-earners are further augmented by accre-
tions from the farming population, whose life becomes
more and more precarious. The story of this irresist-
ible movement is writ large in the records of every de-
cennial census.

Nor is the growth of the working-class to be measured
by numbers alone. The workers advance steadily in
social intelligence, in the spirit of revolt, and in political
wisdom and power. This is the real significance of the
tremendous growth in recent times of the Socialist,
trade-union, and cooperative movements, and of the
"socialistic" and "semi-socialistic" measures of all
modern legislatures. The growth of the Socialist and
labour movement keeps pace with that of capitalist
concentration and power, and the time is bound to
come when these two main and contending factors in
modern civilization will be forced into a trial of

Which will prevail? The small group of the "in-
terests" or the large masses of the workers?

"The workers, beyond a doubt," answer the Socialists.
For the power of the ruling classes is purely artificial,
and is based on the tolerance, ignorance, and apathy of
the masses. It cannot survive the awakening of the
populace ; it cannot continue against their opposition.




Concerning the relation and importance of the So-
cialist philosophy to the Socialist movement, I am in
substantial agreement with my esteemed opponent.
While economic Socialism is not necessarily dependent
upon the fundamental theory elaborated by Karl Marx,
it has historically been made to rest upon that founda-
tion, and not upon another. That basis, therefore, that
"set of social and economic doctrines, . . . lends scien-
tific sanction to the movement, formulates its aims, and
aids in the shaping of its methods." Yes ; and is mainly
responsible, as we shall see hereafter, for its ethical, re-
ligious, and other non-economic doctrines and affinities.

In the words of Mr. Hillquit, "the corner-stone of the
modern Socialist movement is its theory of social evolu-
tion." And the core of the theory is the doctrine of
historical materialism, or economic interpretation of
history, or to adopt the title that seems to me most
precise and suggestive economic determinism.

According to its original formulation by Marx and
Engels, "the form, contents, and changes of every social
order" and "all social changes and political revolutions"
are determined, caused, shaped by economic factors, by
the methods of proprietorship, production, and exchange.
Later on the theory was so modified by Engels as to
admit the influence of political, legal, philosophical, and
religious factors. 1

1 See Seligman, "The Economic Interpretation of History," pp. 142,
143; New York, 1902.


Nevertheless, he continued to hold that the economic
factor was the decisive one in the last instance. This
implies that the influence of the non-economic social
factors is all derived and instrumental, not original and
independent. Consequently the extent and direction of
their causal action is ultimately governed by the eco-
nomic factor, just as the operation of the hammer upon
a nail or the saw upon a board is produced and regulated
by the carpenter. Inasmuch as he was a philosophical
materialist, Engels could not logically admit that non-
material and non-economic factors, such as religion and
ethics, were capable of exerting any original and inde-
pendent force or causality. Therefore, his modification
of the theory of economic determinism does not mean as
much as an uncritical perusal of his words might lead
one to infer. It merely makes explicit what was from
the beginning of the theory implicit, namely, that non-
economic factors do exert a real and important, though
secondary and derived, influence upon social evolution.

This revised but not essentially changed form of the
theory is the one apparently accepted by my opponent.
While he admits that "idealistic notions and intellectual
and moral conceptions often acquire the force of im-
portant and even guiding factors in the progress of civili-
zation," he maintains that "the manner in which it [a
nation] produces its sustenance ultimately [italics mine]
determines its form of organization, division of work or
functions, and its notions of right and wrong its
politics, social classes, and ethics."

Now it is undeniable that economic conditions do
exercise a large influence upon social life, ideas, institu-
tions, and development. Discerning men no longer


think that a nation's history can be written in terms of
its spectacular events and its great warriors, diplomats,
and statesmen. To know adequately the life and achieve-
ments of a people we must study their social institu-
tions, and among the latter a very large part is taken by
economic institutions. If the economic factor had played
no r61e in the Protestant Reformation, the American
Revolution, the making of our Constitution, our Civil
War, and the Irish struggle for self-government, the
history of these events would have been vastly dif-

To-day almost all our political problems and activities
are entirely or fundamentally economic. Even the
ethical notions of men vary considerably according to
their industrial interests. Consider, for example, the
different moral judgments passed respectively by em-
ployers and employees upon the strike, the boycott,
the closed shop, judicial injunctions, and the definition
of fair wages and fair profits.

To admit and insist that economic conditions very
largely influence the politics, morals, and even the
religious life of peoples and social classes is, however,
to fall far short of the Socialist position. Whether he
be a philosophical materialist or not, the average Socialist
magnifies the role of the economic factor beyond all
plausibility. Particularly is this true with regard to
religion and ethics. Witness the extravagant and fan-
tastic attempts of Kautsky and Loria to "explain" the
origin and subsequent history of Christianity on purely
economic grounds, and the crude and superficial efforts
of so many Socialists to reduce all vice, crime, and sin to
economic causes and motives.


That phase of the theory of economic determinism
which we have just been considering describes the general
causality of the economic factor. It deals with the in-
fluence of economic conditions and changes upon other
social conditions and changes. There is, however,
another phase of the theory which has to do with the
manner in which the dominant economic factors operate
within the economic field, and bring about social evolu-
tion. According to this part of the theory, the method
or instrument through which changes in the social struc-
ture of society are effected is the class struggle.

Hence economic forces operating through the class
struggle are the primary determinants of all social evolu-
tion. It was in the light of these two sides of the eco-
nomic-determinism theory that Marx and Engels wrote
in the "Communist Manifesto": "The history of all
hitherto existing society is the history of class struggles."

Obviously this sentence contains an enormous amount
of exaggeration. The great international wars, the rise
and growth of Christianity, the development of educa-
tion, law, science, and invention were only feebly and
remotely determined by struggles between different
economic groups. This is a fine formula for simpli-
fying history, but it ignores too many inconvenient
facts. In Mr. Hillquit's acceptation of the theory, class
struggles appear as the "main substance of the recorded
history of the nations." This statement will not stand
the test of a comprehensive review of historical events.

Even when we confine our attention to the purely
economic field, we see that the class-struggle doctrine
unduly simplifies the relations and exaggerates the an-
tagonisms of the different economic classes. The latter


cannot, as so many Socialists would have us believe,
be properly reduced to two, capitalists and "workers."
Indeed, Mr. Hillquit enumerates under the general des-
ignation of "middle classes" several economic groups,
such as small farmers, manufacturers, and merchants,
the professional classes and the salaried classes. How-
ever, he maintains that their economic interests are
"often more closely allied with those of the workers than
of the capitalists." "Often," perhaps; certainly not

But my opponent contends that the main division
among these classes is created not so much by economic
occupation or function as by "the possession or non-
possession of property." Even this basis of division
does not yield material for a class struggle of any great

Professor Streightoff estimates that there are about
twenty-four million individuals in the United States
who possess some income-bearing property other than
government and corporation securities. 1 Combining
with this number those persons who own the latter two
kinds of securities, and making a liberal allowance for
duplications, we seem to be warranted in putting the
total number of income-bearing property owners at a
majority of the fifty-one million persons whose age is
twenty years and over. 2 Between these and the proper-
tyless minority an active or economically important con-
flict is quite unlikely. Should one arise it would evidently
not terminate in the way desired by the Socialists. The
possessing section is too numerous and too powerful.

1 "The Distribution of Incomes in the United States," p. 146; New
York, 1912. 2 Census of 1910.


Finally, if the line of cleavage is to be drawn, as many
Socialists contend, between those who get their living
mainly from wages and those who derive most or all of
their incomes from capital, the conditions of a genuine
struggle would still be wanting, because a very large
proportion of the former division would refuse, and do
refuse, to become involved. They do not believe that
their interest lies in that direction.

Class divisions based upon divergent economic interests
are an indisputable fact. In his recent work entitled
"An Economic Interpretation of the Constitution of the
United States," Professor Beard of Columbia University
has shown that the Constitution was not the work of
altruistic and doctrinaire political scientists, but of the
personal property and creditor classes. In writing it
they zealously protected their own interests against the
interests and designs of the merchant, mechanic, farmer,
and debtor classes. But it happened that their interests
were, so far as the making of a constitution was con-
cerned, in harmony with the broad principles of economic
and political equity.

In our time the average member of a legislative body
primarily represents not an abstraction called his entire
constituency, but the economic class with which he is
most closely affiliated. Hence the practical need of each
class to have its own representatives in every legislature.
Numerous other instances of the influence of class sym-
pathies and class interests upon social and political life
will readily occur to the intelligent observer.

But the man who tries to see things as they are will
realize that the number of economic classes cannot use-
fully nor correctly be reduced to two, and that a very


large part of the population is not definitely aligned in
a single class conflict. There exists, indeed, a certain
sort of class struggle between a large section of the wage-
earners and a large section of the capitalists ; but other
large sections hold persistently aloof, or engage in it
only feebly and intermittently, and even then not uni-
formly on the same side. Hence the struggle, such as it
is, is much less general, less intense, and less uniform
than it appears in the average Socialist picture.

The proposition that labour does not get the full equiv-
alent of its product is in one sense a platitude, and in
another sense unprovable.

It is a platitude inasmuch as it states that labour does
not obtain the whole of the product created by present
labour combined with capital, or "crystallized labour."
It is unprovable inasmuch as it implies that capital
contributes to the joint product only sufficient utility or
sufficient value to replace the capital, and that all the
remaining value of the product is the creation of present
labour. Since the product would not have 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, to determine how much of the product
is specifically attributable to either factor is quite as im-
possible as to find out what proportion of the animal
has come from either parent.

Wherefore Marx's "new economic discovery" turns
out to be the discovery either of the obvious or of the un-

The statement that wages are determined by the cost
of maintaining labour in conformity with " the established


standard of living" is under one aspect unimportant,
and under another aspect untrue. It is unimportant
because it does not necessarily imply that the scale of
living of the labourer is unreasonably low, and because it
is true of other than the working-classes. "The estab-
lished standard of living " is quite elastic and relative. For
a large part of the workers it means a reasonable and com-
fortable existence, and often includes savings and invest-
ments for the future. Their "established standard of
living," interpreted in this broad sense, absorbs likewise
all the incomes of the great majority of those who are
not wage-earners.

On the other hand, the statement in question is untrue,
inasmuch as it asserts that wages are in all cases strictly
determined by the established standard of living. The
latter is an effect rather than the cause of most of those
incomes which are above the cost of bare subsistence.

In a word, the whole Marxian surplus-value theory is
a pedantic and mystifying formulation of things which
are either obvious, unprovable, unimportant, or untrue.
It does not explain economic facts, nor contribute to the
study of economic justice, nor indicate the trend of
economic evolution.

In the division of a product already in existence,
the interests of labour and capital are opposed, inasmuch
as a greater share to the latter (including the business
manager and the landowner) will mean a smaller share
to the former. The fact is, however, that the division
is made before the product comes into being. Within
certain limits the terms of the division may decide not
only the proportion of the product that will go to each
recipient, but the total amount that will be available


for distribution. An attitude of good-will on both sides,
particularly on the part of the employer with regard to
wages and other conditions of the labour contract, gener-
ally results in a larger share for both parties. Therefore
the antagonism between them is neither so fundamental
nor so extensive as represented by my opponent and
Socialists generally.

From the fact that the capitalist takes a part of the
product of industry it does not follow that the labourer
should seek to abolish the regime of private capital.
The inference is not logical, nor is Socialism " the logical
philosophy of the working-class." The flaw in the in-
ference is the assumption that Socialism would be able
to give the labouring class better conditions than are at-
tainable under the present system.

The truth that the progress of the working-class de-
pends mainly upon their own united efforts was not dis-
covered by Karl Marx. As the history of trade-unionism
attests, it was fairly well known to the labouring people
even before the rise of modern Capitalism. In England
and the United States the trade-unions have done far
more to diffuse this knowledge than have the Socialists.
The influence of the latter in educating the labouring
people need not be denied, but over against it must be
set the fact that Marx and his followers have exaggerated
the power of the workers, minimized the assistance ob-
tained and obtainable from other classes, and led the
wage-earners whom they have captured into a blind

"In proportion as capital accumulates," said Marx,
" the lot of the labourer, be his payment high or low,


must become worse." l With regard to the middle
classes, both Marx and Engels thought that "the small
tradespeople, shopkeepers, and retired tradesmen gen-
erally, the handicraftsmen, and the peasants all these
sink gradually into the proletariat." 2 In my oppo-
nent's statement of the concentration theory, these two
phases are passed over in silence ; yet they were funda-
mental in the forecast of Marx and Engels. How far
have they been verified ?

Between 1853 and 1893 3 rea -l wages increased in Great
Britain 88 per cent; in France, 81 per cent; and in
the United States, 85 per cent. 4 In his second paper
of this series, Mr. Hillquit admits that, "on the whole,
life is more propitious to-day, even to the masses, than it

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