Bungling Bernstein

Evolutionary Socialism. By Edward Bernstein. Published by I.L.P.

Often when a certain theory or hypothesis is laid down in any science it has been found after a time, that a number of facts are discovered which the theory does not adequately explain. A revision of the theory is then necessary, or a new one, even, may be required.

On other occasions it has been found that the new facts were not accurately taken, and upon this being corrected the theory has been found sufficient for the needs of Science. Isaac Newton’s theory of the Law of Gravity and Lamarck’s theory of “Transformism” are classical cases in point.

In sociology Karl Marx and Frederick Engels were the first to formulate the theory that material interests are the driving force of human actions, in the mass, while the methods of production and distribution of wealth formed the basis, and determined the form of society.

Examining the factors of social evolution they were able to point out, in the main, the path modern society is travelling and the end it must arrive at, and naturally all the capitalist apologists shrieked in concert at these “preposterous ideas”. But whenever any of them attempted to come to close quarters they always game to grief.

Nowadays point after point is being admitted by various apologists until we have reached a stage where Professor Seligman, in his Economic Interpretation of History, admits so much that we need not trouble about the rest.

The book whose title is given above is written by one who professes to be a Marxist, but who tries to show “where the Marx-Engels theory appears to me to be especially mistaken or self-contradictory” (preface).

Marx and Engels  were no penny-a-liners, as Bernstein, but men of immense knowledge and intellectual power, and a critic who would show them in error must be prepared to handle vast quantities of information in a scientific manner and logical style. Does Bernstein do this? Let one of his supporters, Mr. Austin F. Harrison, answer.

“His [Bernstein’s] criticism was purely negative; his language – and probably intentionally so – obscure; his arguments a labyrinth of antitheses, discussions and digressions” (Fortnightly Review, Jan. 1902).

The above was written before the book had appeared in English; now that it is at hand Harrison’s statement is found fully justified. To attempt to follow this labyrinth would be a waste of time. All that is necessary is to take some of the important points and see how they will stand examination.

On page 15 we are told that “sciences, arts, a whole series of social relations are to-day much less dependent upon economics than formerly, or, in order to give no room for misconception, the point of economic development attained to-day leaves the ideological, and especially the ethical, factors, greater space for independent activity than was formerly the case”.

This is one specimen of the supposed criticism and limitation of “The Economic Interpretation of History”. To carry the least weight such a statement should show how the factors, “having greater space for independent activity”, are thereby “less dependent upon economics”. So far from showing any such thing the paragraph admits that this activity is entirely based upon economic development, and that without it such activity could not exist.

In a footnote on page 36 an attempt is made to defend the “final utility” school because Marx says in Vol. 3 of Capital, “the use value on a social basis appears here as the determining factor for the shares of the total social labour time which falls to the lot of the different particular spheres of production”. How this affects the question of exchange-value – the real ground of dispute between the Marxist and Jevonian schools, our critic has not time to tell us. A far larger share of the total social labour time is devoted to producing bread than sealskin coats, but the bread is far cheaper per lb. than the coats. The point is brought forward in another way when on pages 38-9 we are told that the theory of labour is a key, “but this key refuses service over and above a certain point, and therefore it has become disastrous to nearly every disciple of Marx”.

What is the point at which the key fails? Upon the answer to this question depends the value of the statement, and the answer we get is – nothing. Obviously the statement is worth as much as the answer.

Every student of economics knows that many able writers on economics have endeavoured to show where the key fails, but from Rae to Bohm-Bawerk they have all proved ghastly failures. This may be one reason why Bernstein does not attempt the task. His book will probably circulate most widely among I.L.P. members, who, lacking knowledge of Marx and his critics, may be persuaded to accept such statements as true. Instead of attempting an answer, Bernstein airily offers another superior piece of information to his readers:

“A scientific basis for Socialism or Communism cannot be supported on the fact only that the wage worker does not receive the full value of the product of his work. ‘Marx’, says Engels in his preface to the Poverty of Philosophy, ‘has never based his communistic demands on this, but on the necessary collapse of the capitalist mode of production which is being daily more nearly brought to pass before our eyes” (p. 39).

Socialists, of course, always teach that the workers must become conscious or have knowledge of, their exploitation before they will free themselves from wage slavery, but we may remark that the statement of Engels’ is taken from a passage wherein he criticises Rodbertus for mixing up morals in what should have been an economic analysis.

We are then treated to a section on “The Distribution of Wealth in the Modern Community” for the purpose of examining the statement regarding the necessary collapse of society and to show its falsity. A short sketch is given of Marx’s description of the development of capitalism and the cause of crises, and the question is asked, “is all that true?” Note the answer.

“Yes and no. It is true above all as a tendency. The forces painted are there and work in the given direction. And the proceedings are also taken from reality. The fall of the profit rate is a fact, the increase of the rate of surplus-value is a fact” (pp. 41-2).

We rub our eyes. Do we read correctly? If all the above is admitted what is left for Marx’s opponent to quibble about? But we are told on page 42, “When the statement does not agree with reality it is not because something false is said, but because what is said is incomplete”.

Bernstein then endeavours to show where this “incompleteness” exists and this section is certainly the trickiest in the book. It therefore deserves detailed attention.

After saying  there is a lack of exhaustive statistics upon the division of shares in Joint Stock undertakings he states: “the ‘Trust’ has quite a different effect upon the distribution of wealth from what it seems to outsiders to possess”, and gives such figures as the following to support the statement.

“The English Sewing Thread Trust . . . counts 12,300 shareholders; of these
6,000 with £60 average capital
4,500 with £150 average capital
1,800 with£315 average capital”.

Note first that no evidence whatever is given as to authenticity of the figures, nor is the total capital of the company given. Obviously the value of the figures in face of the latter omission is nil. Then we are told that with reference to J. & P. Coats, Ltd., that the position “is similar”, but, curiously, no figures are given at all. The Coats combine is more than three times the size of the English Sewing Thread Trust, and, according to the fancy figuring of Bernstein, should have given us still greater proofs of the distribution of wealth. Why this silence?

Let us fill the gap a little. Firstly, the capital of the English Sewing Thread Trust is £3,000,000 (Mr. Chiozza Money, Daily News, Nov. 3rd, ’06). Bernstein’s figures a sum of £1,602,000, leaving £1,398,000, or nearly half the total capital in someone else’s hands. Who holds this huge share, and therefore dominating power? The Trust was formed by combining about sixteen firms, and it obviously is the principal owners of these firms who hold the vast capital given above and thereby actually control the whole business.

J. & P. Coats, according to Mr. Money (same article), have a Capital of £10,000,000, and make a profit of £3,000,000 a year. Coats, Ltd., combine the firms of Coats, Paisley; Clarke & Co.; Jonas Brooks & Bros.; and James Chadwick & Bro. The heads of these particular firms, particularly Coats, hold such a large proportion of the shares that Bernstein dare not give the figures.

But this is not all. The averaging of the amounts per shareholder is a piece of deliberate misleading. Take, for instance, the 6,000 shareholders with an average of £60 each. It is quite possible, as certain legal cases have shown, that ten of the original shareholders may have taken up £30,000 worth of shares each, outside the original allotment, leaving £60,000 worth to be divided among 5,990 shareholders.

The shares held by the various members of the Chamberlain family in Kynock’s, Ltd., published during the South African War, is a case in point.

Bernstein admits that “not all shareholders deserve the name of capitalists, and often one and the same great capitalist appears in all possible companies as a moderate shareholder. But with all this the number of shareholders and the average amount of their holding of shares has been of rapid growth” (p. 44).

“How blind we were,” says Paul Lafargue with caustic irony, in his Socialism and the Intellectuals, “by our sectarianism when we thought that this new form of property, essentially capitalistic, was enabling the financiers to plunge their thieving hands into the smallest purses to extract the last pieces of silver”.

Some figures are then given, from the Income Taxation returns to show how broadly the national income is distributed. We need not trouble the reader with them as he will find a masterly analysis of these returns in Mr. Chiozza Money’s Riches and Poverty, far superior to anything of Bernstein’s. And Mr. Money’s conclusion is that “more than one-third of the entire income of the United Kingdom is enjoyed by less than one-thirtieth of its people” (p. 42). This by a member of the Liberal Party.

Some tables of Income Taxation for Prussia and Saxony are given on page 47 which show that the number of large incomes have increased in greater ratio than the others! Thus is Saxony incomes of £165 to £180 have increased 74% while incomes of over £2,700 have increased 272%! In Prussia incomes of £300 to £1,525 have increased 46.1% while incomes over £5,000 have increased 100%. Bernstein should be a good judge of self-contradiction, being such a past master in it himself.

No figures are given for what should be the best example of all – America – where capitalism has reached the highest stage of development; and this although directly challenged by a New York paper – the Volkszeitung – to do so.

Concerning accumulated wealth, as apart from income, Mr. Money says (p. 72) “about one-seventieth part of the population owns far more than one-half of the accumulated wealth, public and private, of the United Kingdom”. Against such a state of affairs as this Bernstein’s superficial shuffling of figures is puerile.

In the next section we are told that the existence of large numbers of small and medium-sized establishments disprove the “concentration theory” of Marx, and figures are given to show “that at least two-thirds of the businesses registered as factories belong to the category of medium-sized businesses with fifty to sixty workers”.

Only those absolutely ignorant of present-day production can be mislead by such a fallacy. The size of the factories give no clue whatever to the ownership. Thus the Imperial Tobacco Company have factories of all sorts and sizes up and down the country. Salmon & Gluckstein’s various shops with A. Baker & Co’s and A. Jones & Co’s numerous branches are all owned by the above Tobacco Co. Messrs. Freeman, Hardy & Willis have shops in nearly every provincial town, and by their amalgamation with Rabbits & Sons of London have obtained control of a large number of shops in the Metropolis.

Lipton’s, Ltd., have shops in nearly every industrial centre, as have Boots, Ltd., the chemists. Most of these shops and businesses are small or medium-sized, but are, nevertheless, exactly evidence of concentration instead of the contrary. The same applies to America, where according to Bernstein there are “910 manufactories of agricultural implements with 30,723 workers”, an average of 33 to each factory. But this industry is almost entirely in the hands of a huge combine to whom these various factories belong. And once more we have the curious fact that in a table of figures given for Prussia it is the “giant establishments” that show by far the greatest relative increase! (Page 57.) Bernstein indeed says: “A remarkable movement towards the great establishments, and often two or more of the establishments enumerated are only departments of one and the same enterprise. The process of industrial and commercial concentration is most obvious” (pp. 57-8). Then why was the book written?

Then we are brought into the region that is supposed to show the greatest evidence of all against concentration – agriculture. A table is given for the year 1895 in Germany, but as not table is given for any other year it is useless for any comparative purpose. In Holland, we are told, the number of large holdings have actually decreased, but as we are not given the area of these holdings we may as well assume that they have been combined.

France is the classic land of peasant proprietorship, and owing to its laws of inheritance should give support to Bernstein’s views. Bracke, in Le Socialisme, gives the following figures taken from the Minister of Agriculture’s speech delivered on 14th March, 1909.

YEAR 1892
Area of Holdings                       Proprietors
Under 1 hectare                          2,235,405
1 to 10 hectares                          2,617,557
10 to 40 hectares                            711,118
40 to 100 hectares                          105,391
100 upwards                                     32,280

YEAR 1908
Under 1 hectare                            2,087,851
1 to 10 hectares)                           2,523,713
10 to 40 hectares)                             745,862
40 to 100 hectares)                           118,497
100 hectares upwards)                        29,541

As the greatest decrease in proprietors has taken place in the smallest holdings the deduction is that concentration has been going on in these sections, and the figures of the areas of the two sections that the Minister gives confirms this.

YEAR 1892
Under 1 hectare                         1,243,200 hectares
1 to 10 hectares                        10,383,300 hectares
YEAR 1908
Under 1 hectare                           1,228,597 hectares
1 to 10 hectares                          11,559,342 hectares

Thus while the proprietors of less than 1 hectare have diminished by 147,554, the area has decreased only by 14,603 hectares; and while the proprietors of 1 to 10 hectares have decreased by 93,843, the area has increased by 1,176,042. A remarkable illustration in support of Marx from an unexpected quarter.

With regard to England, Mr. Money, in his Riches and Poverty (p. 75), gives these figures:

Total area of United Kingdom             77,000,000 acres
Owned by 2,500 persons                         43,426,900

That is more than half the land owned by 2,500 persons!

The treatment of America is brief, as the only evidence forthcoming is the statement that “There can be no doubt that . . . in the Eastern States of the United States the small and medium agricultural holding is increasing everywhere” (page 71). The authority for the above statement is – Bernstein.

This completes the portion of the book where some attempt at argument, however superficially tricky, is made. In the succeeding sections there is a collapse to the stale depths of the Sunday school type of opposition to Socialism. The workers are incapable of carrying on the production and distribution of wealth without the captain of industry, the man of brains. The failure of the productive side of co-operation has shown how impossible it is for the manager to be under the control or at the recall of the producers. Indeed, Bradlaugh’s old objection to Socialism, that you could not get a community to work together except under a strong religious bond is given in his very words – without acknowledgement.

Therefore the Socialist should join hands with the progressive Liberals, help them in their foreign policy – i.e., in obtaining new markets, etc. Above all “rights of property which common law allows must be inviolable in every community so long as, and in the measure in which the common law allows them. To take away lawful property otherwise than by compensation, is confiscation, which can only be justified in cases of extreme pressure of circumstances – war, epidemics” (page 191).

On page 214 Bernstein says “I hold a whole series of objections raised by opponents against certain items in Marx’s theory as unrefuted, some as irrefutable”.

These objections are evidently of great value for Bernstein keeps them greedily to himself, and does not allow the common herd who may read his book to share them.

Marx may rest in peace. If Bernstein is the best agent the capitalist class can find in the Social Democratic Party of Germany their intellectual bankruptcy is glaring. For he is not only a member of the Germany Party, but has been one of its Parliamentary candidates. The reason may be that they were over-awed by his statement that “Social Democracy required a Kant who should judge the received opinion and examine it critically and with deep acuteness” (page 223). How flattered the intellectual giant of Konisberg would be could he return, to find his prototype in sociology, according to Bernstein, in – Bernstein.

(Socialist Standard, October 1909)

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