CHAPTER VII

_KARL MARX_

The greatest and most influential name in the history of socialism is unquestionably Karl Marx. He and his like-minded companion Engels are the acknowledged heads of the ‘scientific and revolutionary’ school of socialism, which has its representatives in almost every country of the civilised world, and is generally recognised as the most serious and formidable form of the new teaching.

Like Ferdinand Lassalle, Karl Marx was of Jewish extraction. It is said that from the time of his father, back to the sixteenth century, his ancestors had been rabbis.[1] Marx was born at Treves in 1818, where his father belonged to the legal profession. Both parents were highly cultured and raised above the traditions and prejudices of their race. In 1824, when Marx was six years of age, the family passed over from Judaism to the profession of the Christian faith.

Brought up under very favourable circumstances, ardent and energetic, and endowed with the highest natural gifts, the young Marx speedily assimilated the best learning that. Germany could then provide. At the universities of Bonn and Berlin he studied law to please his father, but following his own bent he gave his time much more to history and philosophy. Hegel was still about the zenith of his influence, and Marx was a zealous student, and for some time an adherent of the reigning school. In 1841 Marx finished his studies and gained the degree of doctor with an essay on the philosophy of Epicurus. This was destined to close his connection with the German universities. He had intended to settle at Bonn as teacher of philosophy, but the treatment which his friend Bruno Bauer as teacher of theology in the same university experienced at the hands of the Prussian minister Eichhorn, deterred him from following out his purpose.

In truth, Marx’s revolutionary temperament was little suited to the routine of the German man of learning, and the political conditions of Prussia gave no scope for free activity in any department of its national life. Marx therefore could only enter the ranks of the opposition, and early in 1842 he joined the staff of the _Rhenish Gazette_, published at Cologne as an organ of the extreme democracy. He was for a short time editor of the paper. During his connection with it he carried on an unsparing warfare against the Prussian reaction, and left it before its suppression by the Prussian Government, when it sought by compromise to avoid that fate.

In the same year, 1843, Marx married Jenny von Westphalen, who belonged to a family of good position in the official circles of the Rhine country. Her brother was subsequently Prussian minister. It was a most happy marriage. Through all the trials and privations of a revolutionary career Marx found in his wife a brave, steadfast, and sympathetic companion.

Soon after his marriage Marx removed to Paris, where he applied himself to the study of the questions to which his life and activity were henceforward to be entirely devoted. All his life he appears to have worked with extraordinary intensity. At Paris he lived in close intercourse with the leading French socialists; with Proudhon he often spent whole nights in the discussion of economic problems. His most intimate associates, however, were the German exiles. Arnold Ruge and he edited the _Deutsch-Französische Jahrbücher_. He met also the greatest of the German exiles, Heine, and is said to have had a share in suggesting to the poet the writing of the celebrated _Wintermärchen_.

Most important of all those meetings in Paris, however, was that with Friedrich Engels. Friedrich Engels was the son of a manufacturer at Barmen, where he was born in 1820. Brought up to his father’s business, Engels had resided for some time in Manchester. When he met Marx at Paris in 1844 the two men had already arrived at a complete community of views, and for nearly forty years continued to be loyal friends and comrades-in-arms.

Early in 1845, Marx, at the instance of Prussia, was expelled from Paris by the Guizot Ministry. Marx settled in Brussels, where he resided three years. He gave up his Prussian citizenship without again becoming naturalised in any country. It was in 1845 that Engels published his important work, _The Condition of the Working Class in England_. In Brussels, in 1847, Marx published his controversial work on Proudhon’s _Philosophie de la Misère_, entitled _Misère de la Philosophie_. Proudhon, it must be remembered, was at that time the leading name in European socialism, and Marx had been on very intimate terms with him. Marx’s criticism of his friend is nevertheless most merciless. In defense of the German we can but say that such scathing methods were not unusual at that time, and that where the cause of truth and of the proletariat as he understood it was concerned, he scorned all manner of compromise and consideration for personal feelings. His book on Proudhon, in spite of its controversial form, is interesting as the first general statement of his views.

This book on Proudhon scarcely attracted any attention whatever. In the same year, 1847, he and his friend Engels had a notable opportunity for an expression of their common opinions which excited wide attention, and which has had a great and still growing influence in the cause of the working man.

A society of socialists, a kind of forerunner of the International, had established itself in London, and had been attracted by the new theories of Marx and the spirit of strong and uncompromising conviction with which he advocated them. They entered into relation with Marx and Engels; the society was reorganised under the name of the Communist League; and a congress was held, which resulted, in 1847, in the framing of the _Manifesto of the Communist Party_, which was published in most of the languages of Western Europe, and is the first proclamation of that revolutionary socialism armed with all the learning of the nineteenth century, but expressed with the fire and energy of the agitator, which in the International and other movements has so startled the world.

During the revolutionary troubles in 1848 Marx returned to Germany, and along with his comrades, Engels, Wolff, etc., he supported the most advanced democracy in the _New Rhenish Gazette_. In 1849 he settled in London, where he spent his after-life in the elaboration of his economic views and in the realisation of his revolutionary programme. In 1859 he published _Zur Kritik der politischen Oekonomie_. This book was for the most part incorporated in the first volume of his great work on capital, _Das Kapital_, which appeared in 1867.[2] Much of his later life was spent in ill health, due to the excessive work by which he undermined a constitution that had originally been exceptionally healthy and vigorous. He died in London, March 14, 1883. It was a time of the year which had been marked by the outbreak of the Commune at Paris, and is therefore for a twofold reason a notable period in the history of the proletariat.

Since the death of Marx his great work, _Das Kapital_, has been completed by the publication of the second and third volumes, which have been edited by Engels from manuscripts left by his friend. But neither of these two volumes has the historical interest which may fairly be claimed for the first. In 1877 Engels published on his own account a work called _Herrn Eugen Dührings Umwälzung der Wissenschaft_,[3] a controversial treatise against Dühring (a teacher of philosophy in the university of Berlin) which has had considerable influence on the development of the German Social Democracy. Engels died in 1895, after loyal and consistent service in the cause of the proletariat, which extended over more than fifty years.

The causes which have variously contributed to the rise of German socialism are sufficiently clear. With the accession of the romanticist Frederick William IV. to the throne of Prussia in 1840 German liberalism received a fresh expansion. At the same time the Hegelian school began to break up, and the interest in pure philosophy began to wane. It was a time of disillusionment, of dissatisfaction with idealism, of transition to realistic and even to materialistic ways of thinking. This found strongest expression in the Hegelian left, to which, after the ideals of the old religions and philosophies had proved unsubstantial, there remained as solid residuum the real fact of man with his positive interests in this life. The devotion and enthusiasm which had previously been fixed on ideal and spiritual conceptions were concentrated on humanity. To adherents of the Hegelian left, who had been delivered from intellectual routine by the most intrepid spirit of criticism, and who therefore had little respect for the conventionalisms of a feudal society, it naturally appeared that the interests of humanity had been cruelly sacrificed in favour of class privilege and prejudice.

The greatest thinkers of Germany had recognised the noble elements in the French Revolution. To recognise also the noble and promising features of French socialism was a natural thing, especially for Germans who had been in Paris, the great hearth of the new ideas. Here they found themselves definitely and consciously in presence of the last and greatest interest of humanity, the suffering and struggling proletariat of Western Europe, which had so recently made its definite entry in the history of the world. Thus socialism became a social, political, and economic creed to Karl Marx and his associates. But they felt that the theories which preceded them were wanting in scientific basis; and it was henceforward the twofold aim of the school to give scientific form to socialism, and to propagate it in Europe by the best and most effective revolutionary methods.

The fundamental principle of the Marx school and of the whole cognate socialism is the theory of ‘surplus value’—the doctrine, namely, that, after the labourer has been paid the wage necessary for the subsistence of himself and family, the surplus produce of his labour is appropriated by the capitalist who exploits it. This theory is an application of the principle that labour is the source of value, which was enunciated by many of the old writers on economics, such as Locke and Petty, which was set forth with some vagueness and inconsistency by Adam Smith, and was more systematically expounded by Ricardo. The socialistic application of the principle in the doctrine of surplus value had been made both by Owenites and Chartists. It was to prevent this appropriation of surplus value by capitalists and middlemen that the Owen school tried the system of exchange by labour notes in 1832, the value of goods being estimated in labour time, represented by labour notes.

The principle that labour is the source of value has been accepted in all its logical consequences by Marx, and by him elaborated with extraordinary dialectical skill and historical learning into the most complete presentation of socialism that has ever been offered to the world. A like application of the principle, but in a less comprehensive fashion, has been made by Rodbertus; and it is the same theory that underlies the extravagances and paradoxes of Proudhon. The question whether the priority in the scientific development of the principle is due to Marx or Rodbertus cannot be discussed here. But it may be said that, the theory had been set forth by Rodbertus in his first work in 1842, that the importance of the principle was understood by the Marx school as early as 1845, and that in a broad and general way it had indeed become the common property of socialists. The historical importance and scientific worth of the writings of Rodbertus should not be overlooked; nor are they likely to be when so much attention has been given to him by A. Wagner and other distinguished German economists.

But in the great work of Marx the socialist theory is elaborated with a fulness of learning and a logical power to which Rodbertus has no claim. With Marx the doctrine of surplus value receives its widest application and development: it supplies the key to his explanation of the history and influence of capital, and consequently of the present economic era, which is dominated by it. It is the basis, in fact, of a vast and elaborate system of social philosophy. In any case it is an absurdity as well as an historical error to speak of Marx as having borrowed from Rodbertus. Marx was an independent thinker of great originality and force of character, who had made the economic development of modern Europe the study of a laborious lifetime, and who was in the habit, not of borrowing, but of strongly asserting the results of his own research and of impressing them upon other men.

The great work of Marx may be described as an exposition and criticism of capital. But it is also indirectly an exposition of socialism, inasmuch as the historical evolution of capital is governed by natural laws, the inevitable tendency of which is towards socialism. It is the great aim of Marx to reveal the law of the economic movement of modern times. Now, the economic movement of modern times is dominated by capital. Explain, therefore, the natural history of capital, the rise, consolidation, and decline of its supremacy as an evolutionary process, and you forecast the nature of that into which it is being transformed—socialism. Hence the great task of the Marx school is not to preach a new economic and social gospel, not to provide ready-made schemes of social regeneration after the fashion of the early socialists, nor to counteract by alleviating measures the wretchedness of our present system, but to explain and promote the inevitable process of social evolution, so that the domination of capital may run its course and give place to the higher system that is to come.

The characteristic feature of the _régime_ of capital, or, as Marx usually calls it, the capitalistic method of production, is, that industrial operations are carried on by individual capitalists employing free labourers, whose sole dependence is the wage they receive. Those free labourers perform the function fulfilled in other states of society by the slave and the serf. In the development of the capitalistic system is involved the growth of the two classes,—the capitalist class, enriching itself on the profits of industry, which they control in their own interest, and the class of workers, nominally free, but without land or capital, divorced, therefore, from the means of production, and dependent on their wages—the modern proletariat. The great aim of the capitalist is the increase of wealth through the accumulation of his profits. This accumulation is secured by the appropriation of what the socialists call surplus value. The history of the capitalistic method of production is the history of the appropriation and accumulation of surplus value. To understand the capitalistic system is to understand surplus value. With the analysis of value, therefore, the great work of Marx begins.

The wealth of the societies in which the capitalistic method of production prevails appears as an enormous collection of commodities. A commodity is in the first place an external object adapted to satisfy human wants; and this usefulness gives it value in use, makes it a use value. These use values form the material of wealth, whatever its social form may be. In modern societies, where the business of production is carried on to meet the demands of the market, for exchange, these use values appear as exchange values. Exchange value is the proportion in which use values of different kinds exchange for each other. But the enormous mass of things that circulate in the world market exchange for each other in the most different proportion. They must, however, have a common quality, or they could not be compared. This common quality cannot be any of the natural properties of the commodities. In the business of exchange one thing is as good as another, provided you have it in sufficient quantity.

Leaving out of consideration, therefore, the physical qualities that give commodities use value, we find in them but one common characteristic—that they are all products of human labour. They are all crystallised forms of human labour. It is labour applied to natural objects that gives them value. What constitutes value is the human labour embodied in commodities. And the relation of exchange is only a phase of this value, which is therefore to be considered independently of it. Further, the labour time spent in producing value is the measure of value, not this or that individual labour, in which case a lazy or unskilled man would produce as great a quantity of value as the most skilful and energetic. We must take as our standard the average labour force of the community. The labour time which we take as the measure of value is the time required to produce a commodity under the normal social conditions of production with the average degree of skill and intensity of labour. Thus labour is both the source and the measure of value.

The conditions necessary to the existence and growth of capitalism, therefore, are as follows:—A class, who have a virtual monopoly of the means of production; another class of labourers, who are free, but destitute of the means of production; and a system of production for exchange in a world market. But it may be asked how these historical conditions were established? How did the capitalist class originate, and how were the workers divorced from the instruments of labour, and how was the world market opened up?

Such a state of things was established only after a long and gradual process of change, which Marx copiously illustrates from the history of England, as the classic land of the fully developed capitalism. In the Middle Ages the craftsman and peasant were the owners of the small means of production then extant, and they produced for their own needs and for their feudal superior; only the superfluity went into the general market. Such production was necessarily small, limited, and technically imperfect. Towards the close of the Middle Ages a great change set in, caused by a remarkable combination of circumstances—the downfall of the feudal system and of the Catholic Church, the discovery of America and of the sea route to India. Through the breaking-up of the feudal houses with their numerous retainers, through the transformation of the old peasant-holdings into extensive sheep-runs, and generally through the prevalent application of the commercial system to the management of land, instead of the Catholic and feudal spirit, the peasantry were driven off the land; a multitude of people totally destitute of property were thrown loose from their old means of livelihood, and were reduced to vagabondage or forced into the towns. It was in this way that the modern proletarians made their tragic entry in history.

On the other hand, there was a parallel development of the capitalist class, brought about by the slave-trade, by the exploitation of the American colonies and of both the Indies, and by the robbery, violence, and corruption which attended the transference of the land from the Catholic and feudal to the modern _régime_. The opening and extension of the vast world market, moreover, gave a great stimulus to industry at home. The old guilds having already been expropriated and dissolved, the early organisation of industry under the control of an infant capitalism passed through its first painful and laborious stages, till, with the great mechanical inventions, with the application of steam as the motive-power, and the rise of the factory system towards the close of the eighteenth century, the great industrial revolution was accomplished, and the capitalistic method of production attained to its colossal manhood.

Thus the capitalistic system was established. And we must remember that in all its forms and through all the stages of its history the great aim of the capitalist is to increase and consolidate his gains through the appropriation of surplus value. We have now to inquire how this surplus value is obtained?

The starting-point of the capitalistic system is the circulation of wares. As we have seen, the capitalistic method of production is dominated by exchange. If exchange, however, consisted merely in the giving and receiving of equivalents, there could be no acquisition of surplus value. In the process of exchange there must appear something the utilisation of which by the buyer yields a greater value than the price he pays for it.

The thing desired is found in the labour force of the workman, who, being destitute of the means of production, must have recourse to the owner of these, the capitalist. In other words, the workman appears on the market with the sole commodity of which he has to dispose, and sells it for a specified time at the price it can bring, which we call his wage, and which is equivalent to the average means of subsistence required to support himself and to provide for the future supply of labour (in his family). But the labour force of the workman, as utilised by the capitalist in the factory or the mine, produces a net value in excess of his wage; that is, over and above his entire outlay, including the wage paid to his workmen, the capitalist finds himself in possession of a surplus, which can only represent the unpaid labour of his workmen. This surplus is the surplus value of Karl Marx, the product of unpaid labour.

This appropriation of surplus labour is a very old phenomenon in human society. In all the forms of society which depended on slave-labour, and under the feudal _régime_, the appropriation of the results of other men’s labour was open, undisguised, and compulsory. Under the capitalistic system it is disguised under the form of free contract. The effect is the same. For the workman who is unprovided with the instruments of labour, whose working power is useless without them, this compulsion is not less real because it is concealed under the forms of freedom. He must agree to this free contract or starve.

It is the surplus value thus obtained which the capitalist seeks to accumulate by all the methods available. These methods are described by Marx with great detail and elaboration through several hundred pages of his first volume. His account, supported at every step by long and copious citations from the best historical authorities and from the blue-books of the various parliamentary commissions, is a lurid and ghastly picture of the many abuses of English industrialism. It is the dark and gloomy reverse of the industrial glories of England. The fearful prolongation of the hours of labour, the merciless exploitation of women and of children from the age of infancy, the utter neglect of sanitary conditions—whatever could lessen the costs of production and swell the profits of the capitalist, though every law of man and nature were violated in the process; such are the historical facts which Marx emphasises and illustrates with an overwhelming force of evidence. They receive ample confirmation in the history of the English Factory Acts, imposed on greedy and unscrupulous capitalists after a severe struggle prolonged for half a century, and required to prevent the moral and physical ruin of the industrial population.

We must now consider the process of the development of capitalism rather more closely.[4] Under the old system industry was carried on by the individual. There could be no doubt as to the ownership of the product, as he produced it by his own labour, with materials and tools that belonged to himself. Such was the normal method of production in those days.

It is very different in the existing system. The most conspicuous result of the capitalistic system is, that production is a social operation carried on by men organised and associated in factories; but the product is appropriated by individual capitalists: it is social production and capitalistic appropriation. Whereas the property of the preceding era rested on the individual’s own labour, property under the capitalistic system is the product of other men’s labour. This is the contradiction which runs through the entire history of capitalism. Here we have in germ all the antagonism and confusion of the present time. The incompatibility of social production and capitalistic appropriation must more and more declare itself as the supremacy of the system extends over the world.

The contradiction between social production and capitalistic appropriation naturally appears in the contrast between the human beings concerned in it. For the appropriators form the _bourgeoisie_, and the social workers constitute the proletariat, the two historic classes of the new era. Another conspicuous and important result is that, while we have this organisation in the factory, we have outside of it all the anarchy of competition. We have the capitalistic appropriators of the product of labour contending for the possession of the market, without systematic regard to the supply required by that market—each one filling the market only as dictated by his own interest, and trying to outdo his rivals by all the methods of adulteration, bribery, and intrigue; an economic war hurtful to the best interests of society. With the development of the capitalistic system machinery is more and more perfected, for to neglect improvement is to succumb in the struggle; the improved machinery renders labour superfluous, which is accordingly thrown idle and exposed to starvation; and this is entirely satisfactory to the capitalist class, whose interest it is to have a reserve army of labourers disposable for the times when industry is specially active, but cast out on the streets through the crash that must necessarily follow.

But as the technique improves the productive power of industry increases, and continually tends more and more to surpass the available needs of the market, wide as it is. This is all the more inevitable, because the consumption of the masses of the population is reduced to the minimum requisite merely to maintain them in life. It is another contradiction of the capitalistic system that on the one hand its inherent laws tend to restrict the market which on the other hand it is ready by all means fair and foul to extend. The consequence is, that the market tends to be overstocked even to absolute repletion; goods will not sell, and a commercial crisis is established, in which we have the remarkable phenomenon of widespread panic, misery, and starvation resulting from a superabundance of wealth—a “crise pléthorique,” as Fourier called it, a crisis due to a plethora of wealth.

These crises occur at periodic intervals, each one severer and more widespread than the preceding, until they now tend to become chronic and permanent, and the whole capitalistic world staggers under an atlantean weight of ill-distributed wealth. Thus the process goes on in obedience to its own inherent laws. Production is more and more concentrated in the hands of mammoth capitalists and colossal joint-stock companies, under which the proletariat are organised and drilled into vast industrial armies. But as crisis succeeds crisis, until panic, stagnation, and disorder are universal, it becomes clear that the _bourgeoisie_ are no longer capable of controlling the industrial world. In fact, the productive forces rise in chronic rebellion against the forms imposed on them by capitalism.

The incompatibility between social production and anarchic distribution decidedly declares itself. A long course of hard experience has trained the modern democracy in the insight necessary for the appreciation of the conditions of its own existence. The social character of production is explicitly recognised. The proletariat seizes the political power, and through it at last takes complete control over the economic functions of society. It expropriates the private capitalist, and, appropriating the means of production, manages them in its own interest, which is the interest of society as a whole; society passes into the socialistic stage through a revolution determined by the natural laws of social evolution, and not by a merely arbitrary exercise of power. It is a result determined by the inherent laws of social evolution, independent of the will and purpose of individual men. All that the most powerful and clear-sighted intellect can do is to learn to divine the laws of the great movement of society, and to shorten and alleviate the birth-pangs of the new era. The efforts of reactionaries of every class to turn the wheel of history backwards are in vain. But an intelligent appreciation of its tendencies, and a willing co-operation with them, will make progress easier, smoother, and more rapid.

We need hardly return to the _rôle_ which is played by surplus value in this vast historical process. The capitalist appropriates the product of labour because it contains surplus value. It is the part of the product that embodies surplus value and represents a clear gain which attracts him. Surplus value is the beginning, middle, and end of capitalism. It moves it alike in its origin and progress, decline and fall. It is the keynote of a great process of historic evolution continued for centuries; the secret of a vast development, which becomes more and more open as time goes on. And capitalism grows sick of the sustenance which formerly nourished it. It dies of over-repletion, of habitual excess in surplus value.

Let us now inquire how far the Marx school have thrown any light on the forms likely to be assumed by the new society after the downfall of capitalism. In his mature works as far as published Marx himself has said little to guide us. The clearest indication of his views is contained in the following passage:—‘Let us assume an association of free men, who work with common means of production and consciously put forth their many individual labour powers as a social labour power. The total product of the association is a social product. A part of this product serves again as means of production. It remains social property. But another part is as means of living consumed by the members of the association. It must therefore be distributed among them. The nature of this distribution will change according to the special nature of the organisation of production and the corresponding grade of historical development of the producers.’ And then he goes on to assume that the share of each producer in the means of living may be determined by his labour time. Labour time will at once serve as measure of the share of each producer in the common labour, and therefore also of his share in the portion of the common product which is devoted to consumption.[5]

Another important indication by one who has full right to speak for Marx is contained in Fr. Engels’ views regarding the State. After the proletariat have seized political power and transformed the means of production into State property, the State will cease to exist. In the old societies the State was an organisation of the exploiting class for the maintenance of the conditions of exploitation that suited it. Officially the representatives of the whole society, the exploiting class only represented itself. But when the State at last becomes the real representative of the whole society it renders itself superfluous. In a society which contains no subject class, from which class rule and the anarchy of production and the collisions and excesses of the struggle for individual existence have been removed, there is nothing to repress, and no need for a repressing force like the State. The first act wherein the State really appears as representative of the entire society—the appropriation of the means of production in the name of society—is also its last independent act as State. In place of the government over persons, there will be an administration of things and the control of productive processes. The State is not abolished; it dies away.[6]

In effect, these two indications of opinion point to a condition of society which is not fundamentally different from that contemplated by the anarchist school. Both look forward to a period when men will live in free associations, and when the administration of social affairs will be conducted without the exercise of compulsion.

It will have been seen that what Marx and his school contemplate is an economic revolution brought about in accordance with the natural laws of historic evolution. But in order to understand the full import of this revolution in the mind of Marx, we must remember that he regards the economic order of society as the groundwork of the same, determining all the other forms of social order. The entire legal and political structure, as well as philosophy and religion, are constituted and controlled in accordance with the economic basis. This is in harmony with his method and his conception of the world, which is the Hegelian reversed: ‘For Hegel the thought process, which he transforms into an independent subject under the name idea, is the creator of the real, which forms only its external manifestation. With me, on the contrary, the ideal is nothing else than the material transformed and translated in the human brain.’ His conception of the world is a frank and avowed materialism.

And to a world thus understood he applies the dialectic method of investigation. Dialectic is a word current in the Hegelian and other philosophies. It sounds rather out of place in a materialistic view of the world. In the system of Marx it means that the business of inquiry is to trace the connection and concatenation in the links that make up the process of historic evolution, to investigate how one stage succeeds another in the development of society, the facts and forms of human life and history not being stable and stereotyped things, but the ever-changing manifestations of the fluent and unresting real, the course of which it is the duty of science to reveal. Both Marx and Fr. Engels, moreover, are fond of expressing the development of capitalism in the language of the well-known Hegelian threefold process—thesis, antithesis, and synthesis. Private property resting on a man’s own labour of the former times is the thesis. The property resting on other men’s labour of the capitalistic era is the negation of this individual property. The expropriation of the capitalists by the proletariat is the negation of the negation, or synthesis. But how far this use of the Hegelian terms is merely a form of literary expression, or how far it is a survival in Marx of a real belief in Hegelianism, it is not easy to determine.[7]

The whole position of the Marx school may be characterised as evolutionary and revolutionary socialism, based on a materialistic conception of the world and of human history. Socialism is a social revolution determined by the laws of historic evolution—a revolution which, changing the economic groundwork of society, will change the whole structure.

It may now be convenient to sum up the socialism of the Marx school under the following heads:—

(1) Materialistic conception of the world and of history.

(2) Dialectic method of investigation.

(3) The economic order is the basis of all social order; the entire legal and political structures of society, religion, and philosophy are to be explained in accordance with the economic basis.

(4) The historic evolution of capitalism; how, from the fifteenth century onwards, the capitalist class was developed, and how a corresponding proletariat was created.

(5) The capitalist class grows by the appropriation and accumulation of the surplus value contained in the product of labour, whilst the proletariat is reduced to a subsistence wage. It is social production and capitalistic appropriation.

(6) Organisation in the factory; anarchy in society as a whole.

(7) This anarchy is intensified, especially in the great commercial crises, showing that the middle class are no longer able to control the productive forces.

(8) All these contradictions can be solved only by an explicit recognition of the social character of production. The proletariat seizes political power and transforms the means of production into social property.

(9) The State, which has hitherto been an arrangement for holding the producing class in subjection, will become superfluous, and die a natural death. Henceforward, government will consist simply in the control of industrial processes.

The work of Marx is a natural history of capital, especially in its relation to labour, and in its most essential features is a development of two of the leading principles of the classic economics—that labour is the source of value, but that of this value the labourer obtains for himself merely a subsistence wage, the surplus being appropriated by the exploiting capitalist. Marx’s great work may be described as an elaborate historical development of this glaring fundamental contradiction of the Ricardian economics, the contradiction between the Iron Law of Wages and the great principle that labour is the source of wealth. Marx’s conception of labour is the same as that of Ricardo, and as a logical exposition of the historic contradiction between the two principles, on the basis of Ricardo, the work of Marx is quite unanswerable. It is obvious, however, that the definition of labour assumed both in Ricardo and Marx is too narrow. The labour they broadly posit as the source of wealth is manual labour. In the early stages of industry, when the market was small and limited, and the technique was of the simplest and rudest description, labour in that sense might correctly enough be described as the source of value. But in modern industry, when the market is world-wide, the technique most complex, and the competition most severe, when inventiveness, sagacity, courage, and decision in initiative, and skill in management, are factors so important, no such exclusive place as has been claimed can be assigned to labour. The Ricardian principle, therefore, falls to the ground.

And it is not historically true to maintain, as Marx does, that the profits of the capitalist are obtained simply by appropriating the products of unpaid labour. In initiating and managing, the capitalist is charged with the most difficult and important part of the work of production. As a natural consequence, it follows that Marx is also historically inaccurate in roundly explaining capital as the accumulation of unpaid labour appropriated by the capitalist. In past accumulation, as in the control and management of industry generally, the capitalist has had the leading part. Capital, therefore, is not necessarily robbery, and in an economic order in which the system of free exchange is the rule and the mutually beneficial interchange of utilities, no objection can be raised to the principle of lending and borrowing of money for interest. In short, in his theory of unpaid labour as supplying the key to his explanation of the genesis and development of the capitalistic system, Marx is not true to history. It is the perfectly logical outcome of certain of the leading principles of the Ricardian school, but it does not give an adequate or accurate account of the facts of economic evolution.

In his theory of unpaid labour Marx is not consistent with the general principles of his own philosophy of social evolution. With him history is a process determined by material forces, a succession of orderly phenomena controlled by natural laws. Now we may waive the objection suggested by the principle enunciated in the Marx school itself, that it is not legitimate to apply ethical categories in judgment on economic processes that are merely natural; which, however, Marx does with revolutionary emphasis throughout some hundreds of pages of his great work. It is more important to point out, in perfect consistency with the principles of the school, that the energy and inventiveness of the early capitalists especially were the most essential factors in determining the existence and development of a great economic era, and that the assertion of freedom was an indispensable condition in breaking the bonds of the old feudal order, which the new system displaced. Instead, therefore, of living and growing rich on the produce of unpaid labour, the capitalist had a great social and industrial function to perform, and played a great part in historic evolution. The position and function of the workman was subordinate.

In short, Marx has not sufficiently recognised the fact that the development of the new social forces brought with it a new set of functions: that of initiating and directing industrial enterprise. These functions are not comprehended in the narrow definition of labour, but they are, nevertheless, most essential to progress; and the men that performed them have a most complete historical reason for their existence and a share in the results of industry. We need not add that such an argument does not justify all they did as the heads of the new industry. There is ample evidence that they were often rough, hard, cruel, and unscrupulous in the prosecution of their industrial enterprises. Nor does it prejudice the question whether the like direction of industry must and should continue in the future.

There can be no doubt that in his theory of surplus value obtained from unpaid labour, Marx, as agitator and controversialist, has fallen into serious contradiction with himself as scientific historian and philosopher. The theory that labour is the source of value was widely accepted among economists during his early life, and by its justice and nobleness it was well adapted to the comfortable optimism prevalent among so many of the classical school. The economists, however, did not follow the principle to its obvious conclusion: that if labour is the source of wealth, the labourer should enjoy it all. It was otherwise with the socialists, who were not slow to perceive the bearing of the theory on the existing economic order. In his controversial treatise against Proudhon, Marx gives a list of writers (beginning with the political economy of Hopkins,[8] published in 1822, only five years after the appearance of Ricardo’s great work), by whom the principle was applied to revolutionary purposes. Its simplicity and seeming effectiveness must have made it most attractive. As posited by the classic economy, and applied by the socialists, Marx accepted the principle. It was an unanswerable _argumentum ad hominem_ when addressed to an economist of the Ricardian school; but it should have broken down when confronted with historical fact. Nevertheless it was made, and continued to be, the foundation-stone of the system of Marx, and is really its weakest point. His doctrine of surplus value is the vitiating factor in his history of the capitalistic system. The most obvious excuse for him is that he borrowed it from the classic economists.

Fr. Engels sums up the achievement of his friend Marx in the two great discoveries—the materialistic conception of history, and the revelation of the secret of the capitalistic method of production by means of surplus value. Materialism is a very old theory of the world. It is now given up by competent thinkers, and we need not discuss it here. Nor need we say that it is a grave exaggeration to maintain that all social institutions, including philosophy and religion, are to be explained by reference to the economic factors. History is a record of the activity of the human mind in very many directions. Men have had various interests, which have had a substantive, and so far, an independent value, though they must also be regarded as an organic whole. It is absolutely impossible to account for all by reference to any one.

Nevertheless, it is a great merit of Marx that he has so powerfully called attention to the vast importance of the economic side of history. The economic factors in the life of mankind have been sadly neglected, even by philosophic historians. Such neglect has been partly due to the scarcity of material relating to this aspect of their subject, partly owing to false conceptions of the function of the historian, chiefly because their public was a high-bred class, which had no particular wish to read about such unfashionable topics as those connected with the daily toil of the lower orders. In this way the true causation of history has often been overlooked, or totally misconceived, and results have, in thousands of instances, been traced to conventional and imaginary agencies, when the real origin lay deep down in the economic life of the people. We are now beginning to see that large sections of history will need to be rewritten in this new light.

To proceed with our criticism of Marx. It is a feature of his materialistic conception of history that his language respecting the inevitable march of society would sometimes suggest a kind of fatalism. But this is more than counterbalanced by his strong assertion of the revolutionary will. On both sides we see overstatement. The most prominent feature of his teaching, however, in this reference, is the excessive stress which he lays on the virtues and possibilities of the revolutionary method of action. The evolution he contemplates is attended and disturbed by great historic breaks, by cataclysm and catastrophe. These and other features of his teaching, to which objection must be made, were most pronounced in his early writings, especially in the Manifesto of the Communist League, but they continue to be visible throughout his life. According to his latest teaching, a great revolutionary catastrophe is to close the capitalistic era; and this must be regarded as a very bad preparation for the time of social peace which is forthwith to follow. The proletariat, the class which is to accomplish the revolution, he described as oppressed, enslaved, and degenerate. How can such a class be expected to perform so great an historic function well and successfully?

But the main defect of his teaching lies in the arbitrariness and excessive abstractness that characterise his method of investigation and presentation; and this defect particularly attaches to the second great discovery attributed to him by Fr. Engels—his theory of surplus value.

We shall better understand the position of Marx if we recall some of the important circumstances in his life and experience. As we have seen, his family passed from the profession of Judaism to Christianity when he was six years of age, and he thus lost the traditions of the faith of his ancestors without living into the traditions of the new faith. Like many Jews in a similar position the traditions of the past therefore had little influence on Karl Marx, and he was so far well fitted to take a wide and unprejudiced view of human affairs. With his great endowments and vast knowledge he should have been one of the freest heads in Europe. His practical energy was not inferior to the range of his intelligence.

All the more regrettable, therefore, is it that Marx should have adopted such a narrowing system of philosophy as materialism. It is also remarkable that he, the severest of critics, should have adopted, at so early an age and without due scrutiny, the theory of value set forth by Adam Smith and Ricardo, and that he should have applied it without question during the remainder of his life to the building up of a vast system of thought, and to a socialistic propaganda which was meant to revolutionise the world. Another instance of the premature dogmatism which has so often exercised a great and not seldom a mischievous influence on human thought.

In this connection it may not be altogether fanciful to observe that his heredity derived from rabbinical ancestors may account for much that is peculiar in his way of thinking. The excessive acumen, the relentless minuteness with which he pursues his course through details which often seem very unreal, the elaboration which he bestows upon distinctions which are often abstract and artificial, may well be regarded as alien to Western modes of thought. Revolutionary materialism was a strange sphere in which to exercise a logic after the manner of the rabbi.

However this may be, we know that when his mind was being formed the Hegelian philosophy was supreme in Germany; and it can hardly be said that the study of Hegel is a good training for the study of history, according to the freest and purest conception of the subject. The study of history, in the highest sense of the word, requires a modest attitude towards objective fact which is not easily attained in the philosophy of the schools.

Marx was a German, trained in the school of Hegel; and he passed most of his life in laborious seclusion, in exile and revolt against dominant ideas and institutions. Though a materialist, he does not show sufficient respect for facts, for history. In reading his great work we feel that the facts are in chronic rebellion against the formulas to which he seeks to adapt them.

Adam Smith, the founder of Political Economy, was also academic at the outset of his life; but he was a Scotsman of a period when the ablest Scotsmen were trained by French clearness and common sense. And he was not in revolt, like Marx, but in full sympathy with a cause whose time had come, whereas Marx represented a cause which had not yet attained to any considerable degree of clearness. In learning and philosophic power, Marx will compare favourably with Adam Smith; but in historic reasonableness, in respect for fact and reality, Smith is decidedly his superior. In Smith’s great work we see philosophy controlled by fact, by historic knowledge and insight. The work of Marx, in many of its most important sections, is an arbitrary and artificial attempt to force his formulas on the facts of history. Whether the fault lay in the Hegelian philosophy, or in Marx’s use of it, there can be no doubt that its influence has inflicted most serious damage on what might otherwise have been a splendid historical work.

We are therefore obliged to say that the historical work of Marx does not by any means rise to the highest conception of history. It is deficient in the free outlook, in the clear perspective, in the sympathy and impartiality which should characterise the best historical achievements. The historical work of Marx is placed at the service of a powerful and passionate propaganda, and of necessity is disturbed and troubled by the function which it is made to serve.

In dealing with history we must accept facts and men as we find them. The facts are as they are; and the men of history are not ideal men. Like other men Marx had to work under human limitations. The great task of his life was to rouse the proletariat of the world to a sense of its position, its mission, and destiny, to discover the scientific conditions under which a new era in the evolution of the human race could be inaugurated and carried on by the working classes of all lands. It was a mixed task in which science and practice were combined, and in which the purely scientific study of history naturally suffered in the partnership with a very strenuous revolutionary practice.

We need not say that it was not the fault of Marx that he adopted the revolutionary career. He was born at a time and in a country where men of independence and originality of character of necessity became revolutionists. In face of the European reaction Marx never made any concession or compromise. He never bowed himself in the house of Rimmon. Seldom in the history of human thought has there been a man who travelled right ahead in so straightforward a path, however formidable the opposition and however apparently hopeless surrounding circumstances might be. Public opinion had no weight with him; neither idle sentiment nor amiable weaknesses found any place in his strongly-marked individuality.

In view of such a career spent in the unflinching service of what he regarded to be truth, and in the greatest of human causes, it would be mean and disgraceful not to speak of Marx in terms of profound respect. His sincerity, his courage, his self-abnegation, his devotion to his great work through long years of privation and obloquy, were heroic. If he had followed the broad and well-beaten highway of self-interest, Marx, with his exceptional endowments both for thought and action, might easily have risen to a foremost place in the Prussian State. He disdained the flesh-pots of despotism and obscurantism so much sought after by the average sensual man, and spent forty hard and laborious years almost wholly in exile as the scientific champion of the proletariat. Many men are glad to live an hour of glorious life. Few are strong and brave enough to live the life heroic for forty years with the resolution, the courage, and consistency of Karl Marx.

In the combination of learning, philosophic acumen, and literary power, he is second to no economic thinker of the nineteenth century. He seems to have been master of the whole range of economic literature, and wielded it with a logical skill not less masterly. But his great strength lay in his knowledge of the technical and economic development of modern industry, and in his marvellous insight into the tendencies in social evolution determined by the technical and economic factors. Whether his theories in this department are right or wrong, they have suggested questions that will demand the attention of economic thinkers for a long time to come. It is in this department, and not in his theory of surplus value, that Marx’s significance as a scientific economist is to be found.

Notwithstanding all that may justly be said in criticism of Marx, it remains, then, that his main achievement consists in the work he has done as scientific inquirer into the economic movement of modern times, as the philosophic historian of the capitalistic era. It is now admitted by all inquirers worthy of the name that history, including economic history, is a succession of orderly phenomena, that each phase in the line of succession is marked by facts and tendencies more or less peculiar to itself, and that laws and principles which we now condemn had formerly an historical necessity, justification, and validity. In accordance with this fundamental principle of historical evolution, arrangements and institutions which were once necessary, and originally formed a stage in human progress, may gradually develop contradictions and abuses, and thus become more or less antiquated.

The economic, social, and political forms which were the progressive and even adequate expressions of the life of one era, become hindrances and fetters to the life of the succeeding times. This, the school of Karl Marx says, is precisely the condition of the present economic order. The existing arrangements of landlord, capitalist, and wage-labourer under free competition are burdened with contradiction and abuse. The life of society is being strangled by the forms which once promoted it. They maintain that the really vital and powerful tendencies of our time are towards a higher and wider form of social and economic organisation—towards socialism. Here, as we believe, is the central point of the whole question. The place of Marx in history will depend on how far he has made a permanent contribution towards the settlement of it.

During his lifetime the opinions of Marx were destined to find expression in two movements, which have played a considerable part in recent history—the International and the Social Democracy of Germany. Of the International, Marx was the inspiring and controlling head from the beginning; and the German Social Democracy, though originated by Lassalle, before long fell under Marx’s influence. Marx wrote the famous inaugural address of the International and drew up its statutes, maintaining a moderation of tone which contrasted strongly with the outspoken vigour of the communist manifesto of 1847. But it was not long before the revolutionary socialism which underlay the movement gained the upper hand. The International no doubt afforded a splendid opportunity for the propaganda of Marx. The fortunes of the International and of the German Social Democracy will be sketched in subsequent chapters.

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[1] Franz Mehring, _Geschichte der Deutschen Sozialdemokratie_, part i. p. 156.

[2] An English translation of vol. i. by Messrs. Moore and Aveling has appeared, Engels being editor. There are translations also of vols. ii. and iii.

[3] This book of Engels, _Eugen Dühring’s Revolutionising of Science_, is better known in its much shorter form, _Entwickelung des Sozialismus von der Utopie zur Wissenschaft_. Eng. tr. _Socialism: Utopian and Scientific_.

[4] See Fr. Engels’ _Umwälzung der Wissenschaft_, p. 253, and _passim_.

[5] _Das Kapital_, i. 48.

[6] _Umwälzung der Wissenschaft_, pp. 267, 268.

[7] See Preface to second edition of the _Kapital_, p. xix.

[8] This, however, must be a mistake for T. Hodgskin, who in 1825 published a pamphlet, _Labour defended against the Claims of Capital_, in which such views are set forth.