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Insistence

of socialists upon the

the concessions which the more recent socialist writers had to make to the opponents of socialism, they still profess to believe that manual labor theory labor possesses the magic faculty of producing everything without

of value.

Interde

pendence of

the factors of produc

tion.

the assistance of anybody or anything. Therefore, when it came
to put the Marxian theory into practice, Mr. Trotzky did not
hesitate . . to exterminate in the most brutal manner some fifty
per cent of the Russian railroad engineers and skilled workmen.
It is a characteristic feature of modern production that no indi-
vidual social group can produce commodities without the material,
physical, or intellectual support of other social groups, so that all
those social groups combined form the productive part of the popu-
lation. Thus, modern production is based upon the coöperation
of various social groups. The moment this coöperation has ceased,
the whole process of production must necessarily break down, or at
least experience a serious disturbance.

The predictions of Marx have not come

true.

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wage

93. The masses are not reduced to wage slavery 1 Both Karl Marx and his followers have exaggerated the extent to which the masses of the people were being reduced to slavery." The impression given by socialists is that the great majority of individuals are miserable wage slaves, while all of the good things of life are controlled and utilized by a relatively small class of "capitalists." Marx predicted that as time went on the class of wage slaves would grow larger and more miserable, while the middle classes would tend to disappear, leaving a small group of exploiters in control of most wealth. These predictions have not come true. The industrialization of the country is increasing the number of wage-earners, but instead of sinking into misery, these groups are increasingly prosperous. The middle classes are not disappearing, but are growing. Legislation is checking the concentration of wealth in the hands of a few. The following extracts from a statistical study by Alvin H. Hansen demonstrate the falsity of the statement that the masses of the people are reduced to wage slavery:

1 From the American Statistical Association, Quarterly Publication. New York. Vol. xvII, December, 1920; pp. 421-422.

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the three

The increasing industrialization of the country and the relatively The comdeclining importance of agriculture are indicated in Table III. Here position of the gainfully employed population is grouped under three catego- groups ries, if we omit from our consideration that portion designated as unclassified.

The first group includes the proprietors and officials, the lower salaried and professional classes. It is the "white collar" urban population, not all even moderately well circumstanced, but constituting on the whole the middle and upper urban class.

in Table

III.

The second group is composed of all gainfully employed agriculturists - the farmers, tenants, and farm laborers. This group represents what remains of the old type of American individualists. The industrious and frugal tenant in most cases still becomes in time, enumerated though with increasing difficulty, a farm owner. The farm laborer, with the exception of the relatively migratory class, hopes to save enough to set up as an independent tenant. Getting on is still largely a matter of individual push and initiative. True, the problems of organization and control of markets loom larger and larger, but the road to independence and advancement is still open, even though it is not so easy and broad as before.

The third class is composed of urban workers - the industrial wage-earners and servants. They are for the most part shut up in the wage system. If they are to better their condition they must do so not by way of escape to something else, but by improvement of their lot as wage-workers.

The farming group is being increasingly cut into on one side by the business, salaried and professional group, and on the other side by the industrial wage-earners. The relative growth of the former

Decline in the size of

the farming group.

38 % of our gainfully employed population are still independent.

group would seem to be a healthy sign, but it should be noted that a large part of this growth, nearly a half, in fact, is due to the rapid increase of the lower salaried employees, whose position is certainly not very desirable. Further than that, not only is the rural group declining in relative importance, but within that group itself the opportunities for advancement are narrowing down, as has already been shown, because of the encroachment of tenants and farm laborers upon the farm-owning class.

Yet in spite of these tendencies it is surprising to find what a large proportion of the gainfully employed population are business men, farmers and professional men. [The following table] shows that in 1910 about 38 per cent still belonged to this independent class:

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Disregarding again the unclassified, the gainfully employed population is here placed in two groups. One group is composed of the business and professional classes, farmers and the children of farmers. The latter, of course, expect to become independent farmers upon reaching maturity, and hence, while listed as laborers, from the standpoint of this classification they may properly be classed with the farmers. This, then, is the industrially independent group, independent not so much from the standpoint of income as from the standpoint of being one's own boss.

The second group is composed of the rural and industrial wageearners and the lower salaried employees. No doubt some of this group receive incomes in excess of many farmers, and even of professional and business men. But their outlook is different because of their place in the industrial system. . .

94. Defects of socialist production 1

socialism.

The three foregoing selections indicate that socialism is a false Further obdoctrine because based upon mistaken premises. Those who object jections to to socialism attack the doctrine from still another angle, i.e. they point out the defects of the economic organization which socialism plans to establish. Of the numerous objections to the industrial organization of a socialist state, an important one is that socialism could not build up or maintain an effective system of production. The failure of bolshevism in Russia threw light on the nature of socialist production, and lent weight to theoretical arguments which have long been urged against socialism. The following extract from the works of Dr. A. Schaeffle constitutes a typical example of the objections which for more than a half century have been brought against socialism as a method of production:

could not

... In the third place, social democracy [socialism] promises Socialism an impossibility in undertaking, without danger to the efficiency of unify and production, to unite all branches of it, and in each branch all the coördinate separate firms and business-companies into one single body with all of the

uniform labor-credit and uniform estimation of labor-time. Herein it goes upon the supposition that the whole tendency of production is towards business on a large scale with local self-complete branches on factory lines. Yet this is a most arbitrary assumption. Even in trade there will always remain over a mass of small scattered .pursuits that entirely escape control. . . .

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productive forces of

a nation.

The case of

offers special obstacles to socialism.

In agriculture the large self-complete factory system is excluded by the nature of the case. It may well be that in the agriculture agriculture of the future there will be more and more introduction of collective administration for purposes of traction, the in-coming and out-going of produce, and for irrigation and draining, for the common use of machinery, and for operation of loading and despatch. But farming on a large scale . . . is not possible as a universal system; agriculture, unlike other industries, tends in the direction of small or moderately large concerns. And how in any case could it be possible without any authoritative organ of control or regulation

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1 From A. Schaeffle, The Impossibility of Social Democracy. Swan, Sonnenschein & Co., London, 1892; pp. 69-74.

Socialism cannot fulfill its promise to increase the national productivity.

The reason for this.

to draw all the varied and scattered branches of agricultural labor into one simple homogeneous system, and to reduce all labor to terms of average social labor-time. . . . Social democracy will inevitably fall to pieces at last, though it start with the most successful revolution ever achieved.

...

Social democracy, in the fourth place, promises to the industrial proletariat a fabulous increase in the net result of dividends of the national revenue, and a general rise of labor-returns all round. This increased productivity of industry would perhaps be conceivable if a firm administration could be set over the collective production, and if it were also possible to inspire all the producers with the highest interest alike in diminishing the cost, and in increasing the productiveness of labor. But social democracy as such refuses to vest the necessary authority in the administration, and does not know how to introduce an adequate system of rewards and punishments for the group as a whole, and for the individuals in each productive group, however necessary a condition this may be of a really high level of production. For otherwise, of course, there would be no freedom and no equality.

Therefore, on the side of productivity again, all these delusive representations as to the capacity and possibility of democratic collective production are groundless. Without giving both every employer and everyone employed the highest individual interest in the work, and involving them in profits or losses as the case may be, both ideal and material, it would be utterly impossible to attain . even such a measure of productivity for the national labor as the capitalistic system manages to extract from capital profit, even in the face of risk, and with varying scales of remuneration. The introduction of even stronger and more effective guarantees of universal thrift and efficiency in a partially collective system may at first sight appear to be not impossible. . . . But this result is impossible if the only means of bringing it about is to be resolutely rejected and denied, namely, the free and ungrudging assignment of a larger proportion of material and ideal good to the real aristocracy of merit. Without a sufficiently strong and attractive reward for individual or corporate preeminence, without strongly deterrent drawbacks and compensatory obligation for bad and unproductive

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