I. (3)

With the discussion, in the last chapter, of the tendencies of capitalistic development, we have entered upon the proper domain of Revisionism. While it is true that the Revisionists revise to a greater or less extent the accepted Marxian philosophico-historic and economic theories, this is done only as an incidental to their criticism of the Marxian conclusions as to the historic course and ultimate fate of capitalism. Moreover, wherever Revisionists attempt to criticize the fundamentals of the Marxian system, they do so usually only in so far as it is necessary in order to attack that superstructure of conclusions with reference to the capitalistic system which Marx erected on those fundamentals. This is to be seen not only from the nature of the criticism itself which the Revisionists pass on the Marxian theory, but also from the history of Revisionism. Revisionism, which was at one time, before it assumed its present proportions, known as Bernsteinianism, after Eduard Bernstein, its foremost representative, began in a very modest and unassuming way by questioning the accuracy of some of the conclusions to which Marx arrived as to the course and tempo of capitalist development. And it was only after it appeared in the course of the discussion that these conclusions were intimately related to the whole structure of the Marxian theoretical system that the fundamentals of his system were first called into question by Revisionists. But even then the true Revisionists did not attempt to pass independent criticism on the philosophico-historic or economic theories of Marx, but merely borrowed this criticism from older and more outspoken opponents of Marxism. The work of Revisionism proper still remained the criticism of what may be conveniently, though rather inaccurately, called the sociological theories of Marxism, that is, the theories as to the probable future development of our social system, which we have attempted to set forth in the last chapter. It is, therefore, not to be wondered at that Franz Oppenheimer puts at the head of his book on Marxism the thesis that “the foundation pillar of Karl Marx's social theory, the most important premise for all its important conclusions, is ‘the law of capitalistic accumulation.’” The center of gravity of Bernstein's book “Die Voraussetzungen des Sozialismus,”[a] the chief pronunciamento of Revisionism, is what Bernstein has to say on the tendencies of the development of modern capitalism, although he criticizes both the philosophic and economic theories of Marx. The discussion of those tendencies forms the bulk of Revisionist literature. And in the forefront of this discussion is the question: Does capital concentrate and the middle-class disappear, and as rapidly, as Marx predicted?

In his now famous book Bernstein attempted to prove: 1st, that capital does not concentrate in the manner, and certainly not with the rapidity, that Marx predicted; and 2nd, that the middle-class does not disappear. To substantiate his assertions he cites some statistics to show that while there certainly is a tendency towards concentration, and even rapid concentration, in some industries, this tendency is not universal, and moreover, in the very industries in which this tendency does exist it is in a measure neutralized by the birth of new enterprises in the place and stead of those which disappear owing to the process of concentration. The conclusion to which he arrives, therefore, is that, while concentration of capital undoubtedly takes place, it does not take place in all the capitalist industries, and is, on the whole, extremely slow. He also cites another series of statistical data apparently showing that the tendency in the distribution of incomes in modern society is not, as is supposed to be assumed by Marxists, towards a wiping out of moderate incomes, leaving only a small minority with large revenues and the bulk of society with only workingmen's wages, but, on the contrary, the tendency is towards an increase of the number of persons whose income is derived from the possession of property. From this he argues that the middle-class does not disappear, but on the contrary is growing.

The likelihood of the growth of the middle-class in numbers while capital was undergoing a steady, though slow, process of concentration, would seem of such doubtful nature as to raise a suspicion as to the character of the statistics. Bernstein saw this, and he, therefore, hastens to allay our suspicions by the following observation: The corporation— says he— tends to neutralize to a large extent the tendency towards centralization of wealth through the concentration of undertakings. The corporation permits of a widespread splitting up of already concentrated capital, and makes superfluous the acquisition of capitals by individual magnates for the purposes of the concentration of industrial undertakings. Wherefore, he opines, the opinion, “prevailing among socialists,” that the centralization of wealth runs parallel to the concentration of industrial undertakings is erroneous.

In the book which Kautsky has written in reply to Bernstein, “Bernstein and the Social Democratic Program,” he shows that Bernstein's statistics are unreliable and incomplete, and that the conclusions he draws from them are unjustified. We shall not enter here upon a detailed discussion of these statistics, as this would be beyond the scope of the present work. Besides, we fully agree with one Marx-critic, Oppenheimer, who, evidently disgusted with the poor showing Bernstein made with his statistics, declares that those who attempt to refute Marx by statistics are on the wrong track. For, says he, you can only beat Marx by his own method, and the Marxian method is not at all statistical. Marx never relies on statistics to prove his assertions. He uses statistics only for the purposes of illustration. His proofs he gets from well-known facts which may be recorded in the statistical tomes but do not need any statistics to establish them. We will say here only this: Since the disastrous attempt of Bernstein to use statistics against the Marxian position, this weapon has been almost entirely discarded by Revisionists. On the other hand it must be admitted that Marxists also resort to statistics now with less confidence than formerly. It seems that since the publication of their books in which the same statistics are used by Bernstein on the one hand and Kautsky on the other and such different conclusions arrived at by each, people have become distrustful of statistics. Oppenheimer voices this general distrust when he says: “Statistics are an extremely pliable mass, as the literary controversy between Bernstein and Kautsky has shown. With a little dialectical dexterity you can prove almost anything statistically.”

We disagree with the learned Marx-critic that you can prove anything and everything by statistics. But we do believe that you can prove nothing by statistics unless you handle them intelligently. Of themselves statistics do not prove anything. No more than facts of themselves prove anything. If it were so there could hardly be two opinions on most points which have been in controversy ever since scientific research began. It requires intellect to read the facts. It requires intelligence to read statistics. Furthermore, it requires great intelligence to gather statistics, and in this respect statistics, which are mere records of facts, are a poorer basis for scientific generalizations than facts of observation. Unfortunately our statistics are not gathered by the people who are to use them, and as they are necessarily not full and complete, they must be used with great care and discrimination. Of course wrong or unintelligent handling of statistics will not make them “prove” anything that they really do not prove, as Oppenheimer seems to think, but it will render them worthless.

Kautsky has proven that Bernstein's statistics do not prove his assertions. The reason for it is that Bernstein handles his statistics unintelligently. But even Kautsky's intelligent handling could not make them yield any great results because of the incompleteness of our statistics and of the lack of intelligence in their gathering. Hence the general dissatisfaction on both sides with statistics. We will, therefore, follow here the Marxian method of making only such facts the basis of our argument as require no statistical tables to prove them, but merely to illustrate them.

Before proceeding, however, to discuss these facts we want to call attention to some significant circumstances in connection with the Revisionist movement and its literature. First in point of time and importance is the tone of early Revisionist Marx-criticism. We have already called attention to the nihilistic character of this literature. Now we desire to add that this nihilism was a gradual growth and was forced on the revisionists by their own inability to solve the problems which confronted them. At its inception Revisionism was merely doubtful. Doubt is the leit-motif of Bernstein's first literary attempts at revision. In the second place is to be considered the inability of the old-school Marxists to stem the flood of Revisionism, notwithstanding their great efforts. While the flood of Revisionism is now at a standstill, if not subsiding, this is not due to the efforts of the Marxian leaders on the theoretical field, but to its own practical barrenness. And yet, there was enough in what was written by Marxists to show the utter untenableness of the revisionists' position. Kautsky's book was a crushing blow to Bernstein's attempts at theorizing. Yet it passed almost without any appreciable results: the question of Revisionism was not settled, although it should have been if it were a question of soundness of argument. Thirdly, we must notice the fact which we have already mentioned as the reason for the failure of the Revisionist movement: the fact that notwithstanding its great literary influence the Revisionist movement was absolutely barren of practical results as far as the socialist movement was concerned.

All of these facts and circumstances are proof positive that there must have been something in the development of modern economic life which caused the appearance of the revisionist movement as an intellectual endeavor to take cognizance of and explain this development. It is also clear that this development, whatever it may be, was not, or at least not fully, reflected in our statistics, which accounts for the fact that neither side could prove its case conclusively by the aid of statistics, and the consequent distrust of all statistics. What was that something in the development of modern economic life, and how does it affect the Marxian theory?

The trouble with Bernstein and the rest of the Revisionist writers is that they do not go below the surface of things, and therefore do not know what “struck them,” to use an inelegant but adequate colloquialism. Bernstein talks of the “new middle-class,” the “wide distribution of incomes,” the large number of stockholders in the big corporations or “trusts,” and the influence of corporations on the centralization of wealth, but nowhere does he examine these things systematically or in any way analyze them so as to see their real significance in modern economic life, or even their exact meaning. Nowhere does their connection with the theoretical system which he criticizes appear. That is why his book makes the impression of the rambling talk of a man who does not know his own mind. The truth of the matter is he did not know his own problem. He had a vague feeling that there was a problem demanding solution, but he did not understand what it was. Hence his doubting tone, the lack of a clear and definite purpose, or even the statement of a clearly defined problem for the solution of others. Hence the overlooking of the problem by those who took up the fight against him. Hence, lastly, the endless discussion to no purpose. Yet there was a definite problem, and had Bernstein understood it sufficiently to enable him to state it clearly it would have found an answer long ago.

At about the time Bernstein was writing his famous book, the present writer stated the essential point of this problem (which is in our opinion, together with the inability to appreciate the scope of modern imperialism, at the bottom of the whole Revisionist movement), in one sentence in the course of an unassuming magazine article. A good many have laid claim to the honor of being the original Revisionist. It is not the intention of the present writer to enter the lists as a contestant for this honor. This incident is mentioned here only for the purpose of showing that the air was then pregnant with certain questions which required answering. The present writer specifically renounces all claims to that high honor of being the Original Revisionist, for as a matter of fact he never was a Revisionist. It is of the essence of Revisionism to see or feel the problem and not to see its solution. The article referred to, however, not only stated the essential point of the problem, but also indicated its solution.

The problem is to harmonize the Marxian teaching with the development of corporate methods of doing business. We have already seen how Bernstein attempted to explain the discrepancy between the statistics as to the concentration of industrial undertakings on the one hand and as to the accumulation of wealth on the other, by a reference to the corporate methods of doing business. We shall see later that Bernstein has mistaken the influence of the development of corporations in that particular respect, and in general it may be said that Bernstein's weakness consists in his failure to appreciate and develop the strong point of his argument— the development of corporations. The fact, however, that Bernstein and the rest of the Revisionists failed to present it properly makes the phenomenon none the less real.

The Marxian analysis of the capitalist system and his deductions as to the laws of its development proceed upon the assumption of the absolute reign of the principle of competition. It was on the basis of that assumption that he declared that during the progress of capitalist development “one capitalist kills off ten,” thereby centralizing all wealth in the hands of a steadily diminishing number of persons, eliminating the middle classes and leaving society divided into two classes only: capitalists and workingmen. But what if competition should be abolished or checked? What if the capitalists, large and small, should decide not to compete any more with each other, or to restrict the area and intensity of such competition, and divide profits amicably instead of fighting with each other over their division, so as to avoid the necessity of killing each other off? Evidently the result would be the arrest of the processes described by Marx in the event of the entire abolition of competition, and a retarding of those processes in the event of its mere checking. This is just what must happen owing to the development of corporations. The supplanting of individual enterprise by that of corporate is merely an attempt to avoid the results of competition, if not altogether abolish it. The effectual abolition of competition by the so-called Trusts, which are merely the logical result of the ordinary corporation-enterprise, is notorious and, practically, undisputed. But it is not only the Trust that interferes with competition. The primary, nay, the only purpose of a legitimate corporation is to blunt the edge of competition. It is designed either to nullify or suspend the baneful effects of past competition, or to prevent or diminish its ravages in the future. There can be only two legitimate reasons for organizing corporations. Either to enable those whose capital is insufficient to keep abreast of the latest requirements of production to remain in the field from which they are individually forced out by the march of events, by combining their several insufficient individual capitals into one sufficient to meet the new requirements; or, to enable those whose capital is sufficient to undertake independently to split up their large capitals into many small ones, each to invest in many undertakings and each undertaking to consist of many investments, instead of each taking up one of the undertakings on his own hook. In the first case it is an effort to beat fate by those vanquished in competition. It is an effort by those whom competition has forced out of the economic arena to stay in, by representation at least. In the second case it is an effort to limit the effects of competition in the future by dividing up and limiting its risks and liabilities (it should be remembered that the essence of a corporation is limited liability), and by providing a sort of mutual insurance between capitalists and capitals.

Here, therefore, is a check to the development of the capitalist system as outlined by Marx. A check which is destined to arrest or at least retard that development. The formula of centralization of wealth and of the disappearance of the middle-class evidently needs revision.

The question of the disappearance or the non-disappearance of the middle-class was complicated also by another and minor phenomenon which apparently swells the numbers of the middle-class and particularly influences the distribution of incomes. We refer to the so-called “new” or non-productive middle-class. This phenomenon is very interesting in another aspect of modern capitalism, the aspect of waste and its uses in the capitalistic system. But of that aspect of this phenomenon we shall treat later at some length. Here we are interested only in the mere fact of its existence. And we shall, therefore, merely say here that the existence of this “new” middle-class, particularly while its origin and character remained unexplained and undifferentiated from the ordinary middle-class, considerably complicated the, in themselves, not very easy tasks of determining the influence of the corporation on the destinies of capitalism and the effect of this new departure in capitalism on the Marxian theoretical system.

Of course it can easily be seen that these matters do not in any way affect Marx's analysis of the working of capitalism and the laws governing that system while it lasts. As we have seen before, competition is of the essence of that system. This is recognized by the friends as well as the foes of that system. It has been embodied in its written as well as in its unwritten laws. “Restraint of trade,” which is, the legal term for restricting or abolishing competition, was illegal and punishable by the common law of England, that classic land of capitalism. All our anti-trust laws are based on the assumption that competition— which is “the life of trade”— is the basis of capitalism, and, therefore, one of the inalienable property-rights of every man living in a capitalistic society. They are nothing more than a statutory enactment of the common law of capitalism that to interfere with competition is to interfere with the life-blood of capitalism, and therefore mortal sin in the eyes of capitalistic law. It is, therefore, not a refutation of the Marxian analysis of the capitalist system to show that tendencies in the development of that system which Marx said would continue to exist as long as capitalism lived, disappeared in whole or in part when the basic principle of that system was abolished or modified. Naturally enough, the tendencies of capitalism cannot manifest themselves in a society where there is no capitalism, nor can they fully develop under limited capitalism if such a thing be possible.

What may be affected by the phenomenon which we discussed above is not Marx's analysis of capitalism, nor even his prediction that capitalism as it existed is going to destruction,— but his prediction that on the ruins of the capitalist system will be reared the edifice of a socialist society. As we have seen, Marx's socialism is based entirely on his conclusions as to the future development of certain tendencies of capitalism. If those tendencies are abolished, even though with the basic principle of capitalism itself, or modified along with that principle, what warrant have we to say that socialism is inevitable? It is upon those tendencies that we are dependent for the conditions which are a prerequisite to socialism, according to Marx, and with the abolition of those tendencies the conditions which will bring socialism may never arise. The questions to be answered, therefore, are: Is capitalism going to be sup- planted by some other system, or is it merely going to be limited or modified? And if it is to be supplanted what will take its place? After Capitalism, what?