The Extinction of Petty Enterprise. By Karl Kautsky (continued)

Continued from May issue

Translated from the German by H. J. NEUMANN and revised by the Author.

Since the beginning of the capitalist mode of production and until twenty years ago, the decline of the independent petty peasant enterprise has been most marked. The peasant was being reduced to the condition of a wage slave either through his holding becoming absorbed by a large farm or, where such did not exist in his immediate vicinity, through his holding being cut into pieces and sold to his neighbours. This development still continues to a large extent, although it has ceased in some localities owing principally to the aforesaid foreign competition, but partly also in consequence of the migration of agricultural labourers to the towns—a point we cannot deal with here. Statistics, for instance, show us the following results: —

FRANCE 1882-1892
SIZE OF FARM Increase (+) or Decrease (-)
Under 1 hectare + 243,420 hectares
Over 2 and under 5 Hectares – 108,434 hectares
Over 5 and under 10 Hectares – 13,140 hectares
Over 10 and under 40 hectares – 532,243 hectares
Over 40 hectares + 197,288
GERMANY 1882-1895
Under 2 hectares + 17,494 hectares
Over 2 and under 5 hectares – 95,781 hectares
Over 5 and under 20 hectares + 563,477 hectares
Over 20 and under 100 hectares – 38,333 hectares
Over 100 hectares + 45,533 hectares

(1 Hectare = 2.47 English acres.)

Everywhere, however, we find a decline in that agricultural enterprise which, having a separate existence, is independent of capital. The leasing system and mortgaging increase. In the German Empire, the mortgages on landed property increased in the ten years from 1886 to 1895 by about 23,000,000,000 Marks, and the number of farms held on lease rose from 2,322,899 in 1882 to 2,007,210 in 1895, viz., an increase of 281,311.

Finally, we find a decrease in the entire agricultural population. In the German Empire the number of persons employed in agriculture was 18,704,038 in 1882, while in 1895 the number was 17,815,187, or nearly a million less.

Much more telling, however, than in agriculture is the decline of petty enterprise in industry. Here it is absolute.


1882 1895
Size according to No. of workers employed Number of establishments Number of establishments Increase or Decrease
Small (1 to 5 workers each) 2,175,857 1,989,572 – 8.6 %
Medium (6 to 50 workers each) 85,001 139 459 + 64.1 %
Large (over 50 workers each) 9,481 17,941 + 89.3 %

Between 1882 and 1895 the population increased by 14.5%. The number of workers employed in small industrial establishments was in 1882 still over one half (59%) of the entire number of industrial workers (4,335,822 out of 7,340,789) but in 1895′ the number fell to 46.5% (4,770,669) out of 10,269,269). During the same period, however, the number of workers employed in large industrial establishments was doubled (from 1,613,247 to 3,044,267).

As German capitalism is still young, these are most surprising figures, for the decline of petty industry is generally a tedious process. An example will make this clear. Already in the forties of the eighteenth century, machine weaving, particularly the English weaving trade, produced such keen competition that the misery of the hand weavers became proverbial, and the starvation existing among them produced rebellion. Nevertheless, according to statistics, out of the 491,796 weavers in the German Empire in 1882, 285,444 were still employed in small weaving concerns (employing from 1 to 5 persons), that is to say, more than half. But nobody then maintained that there were good prospects in store for hand weaving, and that its decline was not inevitable in the course of evolution. In England the last hand weaver has been starved long ago. In Germany, too, they are fast disappearing: there the number of persons employed in small weaving concerns decreased from 285,444 in 1882 to 156,242 in 1895. If there are still some hand weavers in existence, that does not prove that petty industry is capable of competing successfully, but merely that the hand weaver is capable of enduring starvation.

The complete disappearance of petty industry is not the first but the last act of the tragedy entitled “The Extinction of Petty Enterprise.” The first effect of the competition with capitalist production is that the handicraftsman—and what may be said of him is with some modifications also applicable to the peasant—gradually sacrifices all that his own or his forefathers’ industry succeeded in accumulating. The petty industrialist grows poor ; in order to stave off his increasing poverty he resolves to be more industrious; the working hours are extended until late at night; wife and children are compelled to assist in the work; in place of expensive adult assistants cheaper apprentices are engaged, and their number disproportionately increased; and while the working hours are extended and the toil is proceeding with ever more feverish speed without rest or interval, food becomes more precarious, and the expenditure for housing and clothing is more and more cut down.

There is no more miserable, wretched existence than that of the petty industrialist or the small farmer who is struggling hard against overwhelming capital.
The assertion that the wage workers are to-day better off than the small farmer and the small manufacturer or trader, is fully justified. This statement, however, was intended to show the workers that they have no, reason to be discontented. But the arrow does not strike Society, at which it -was directed, but private property. If indeed the propertyless are better off than the property-owning small manufacturers, of what value can their property be still to the latter? It ceases to be of advantage to them, it commences to be detrimental to them. If, for instance, the home weaver persists in carrying on his unprofitable concern, although he would be able to earn more in the factory, he does so only because he still possesses something, a cottage, a piece of land for growing vegetables, which he would have to surrender were he to give up his business. To the petty industrialist his possession of the means of production has ceased to be a safeguard against misery and has become a chain binding him hopelessly to utter wretchedness. In his case private property has brought about an effect which is not usually looked for. What a hundred years ago was still a blessing to the handicraftsman and peasant, has turned out a curse to him.

But it may be argued that with this increased misery the small peasant and handicraftsman are purchasing a higher independence and liberty than are enjoyed by the propertyless wage workers. Even such argument is erroneous. Where petty industry comes into contact with capital, it becomes only too rapidly quite dependent upon it. The handicraftsman becomes a home-industrialist and is thus enslaved by the capitalist; his home is turned into a branch of the factory; or he becomes an agent of the capitalist, a salesman of manufactured goods, besides bearing the cost of wear and tear; in both cases he is entirely dependent upon the capitalist. And the peasant who is unable to keep up the competition as small farmer or succumbs to the pressure of usury or taxes, also takes to home industry in the service of the capitalist, or to wage work in the employ of the large fanner. He may become a journeyman, or go to a factory or mine, and leave the work of his little holding to be attended to by his wife and young children. Where then is his independence and freedom? His property alone distinguishes him from the proletarian, or wage slave, but it is that very property which prevents him from taking advantage of the best opportunities to obtain work; it ties him to a certain 6pot and makes him more dependent than the propertyless wage worker. The private ownership of the means of production increases not only the material misery but also the dependence of the small man. In this respect private property has also produced a contrary effect—it has changed from a bulwark of freedom to the means of enslavement.

But, it will be urged, private property ensures to the handicraftsman and peasant at any rate the ownership of the product of their labour. Now, this is poor consolation, seeing that the value of these products has declined to such an extent that it does not suffice for the sustenance of the producer and his family. But even this poor consolation is a delusion. In the first instance, it does not apply to the large army of persons who are compelled to take to homework or wage slavery in order to support themselves. Neither does it apply to the majority of the small handicraftsmen and peasants whom overwhelming capital has not yet brought into its direct service, so that until now they have apparently been fortunate enough to preserve their entire independence. It does not apply to all those who are in debt—the usurer holding a mortgage on a peasant farm has a claim, superior to that of the peasant himself, to the product of the peasant’s labour. First of all the usurer has to be paid, and only what remains belongs to the peasant; whether this balance sufficed to maintain the peasant and his family is no concern of the usurer’s. The peasant and the handicraftsman both work as labour for the capitalist as the wage worker does. The difference which private property causes in this respect between propertyless and property-owning workers, is only that the wages of the former is generally regulated according to customary requirements, while as far as the property owning workers are concerned, no such limit exists. In the case of the latter it may happen that after paying the usurer’s interest nothing remains of the product of their labour—that they work for nothing, owing to private property.

If in remote places there are still peasants and handicraftsmen to be found who are not in debt, even they are compelled to pay their tribute to capital by means of the National Debt.

By interest on mortgages and goods on credit, peasants and handicraftsmen pay interest on capital they themselves have employed. By taxes raised for paying interest on the National Debt, they pay interest on capital which the State has borrowed in order to enrich at their expense their very competitors and exploiters—contractors, builders, large manufacturers, great landowners, and others. Militarism and the-National Debt, these are the two means by which the State of to-day succeeds in forcing even the remotest village into the domain of capitalist exploitation, thereby hastening the abolition of peasantry and handicraft. What is the final result of this painful struggle against the overwhelming competition of industry on a large scale? What reward is there for the handicraftsman or peasant for his “thrift” and his “industry,” that is to say for the enslavement of himself, his wife and children, for their physical and mental ruin? The reward for that is bankruptcy, entire disinheritance (expropriation is the artistic term for-it), divorce from the means of production, descent into the proletariat.

That is the inevitable final result of the economic development in Society to-day, a result as inevitable as death itself, and just as death comes as a relief to the person suffering from a painful disease, so under present conditions is bankruptcy hailed with equal satisfaction by the small man as a relief from property which has become a heavy-burden to him. The continued existence of petty industry leads indeed to such demoralisation and misery that we must ask ourselves the question whether we would be justified in delaying its extinction, if that were at all possible. Would it be more desirable that handicraftsmen and peasants should all sink to the position of the hand weavers of the Ore Mountains or that they should become wage workers in great industrial concerns?

This alone is to be considered when efforts are made to maintain petty enterprise, for it is impossible in this age of steam and electricity to place handicraft and small farming in a flourishing condition so that they may bring to the petty proprietor a share in modern culture. The self-supporting small concern, independent of capital, having perfect. control of its means of production and of its products—this system of property holding and wealth producing, upon which in the middle ages and even so late as the seventeenth century all economic existence was based, disappears inevitably before expanding capitalism, which seizes one trade after another. What still survives in the shape of petty industry and at times even newly developed, is nothing but a hidden form of wage slavery, and by no means one of its highest forms. It becomes the last refuge of those unfortunate propertyless persons who cannot find employment in large industrial concerns, and who are too proud to beg, too honest to steal.


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