Source: International Socialist Review, February 1909
Translated: William E. Bohn.
Transcribed: for marxists.org, May, 2002
Tugan-Baranowsky is no stranger to our readers. More than once, particularly of late, we have had occasion to take notice of him. This has been due in part to the present industrial situation. We are in the midst of a general crisis, the study of which is one of the most important tasks of economic theorists. Now crises are one of Herr Tugan’s specialties; he has made an exhaustive study of them.
But if we pay a good deal of attention to him it is only in part due to the fact that he is an authority on industrial crises. His importance is largely due to the fact that he is one of the most distinguished leaders of the revisionists. He represents, with Sombart, the manner and point of view of professorial revisionism. He leaves no stone unturned to make his views the starting point of a new theory.
It is now ten years since Tugan-Baranowsky became active in this direction. The fruitfulness of the revision of Marx must appear in his work if anywhere. A good test is furnished by his latest book, Modern Socialism. All the scientific progress made by the revisionists must be discoverable in this document.
We shall take notice here of only one feature of this work, the investigation of the process of economic evolution. It was this that furnished the point of departure for revisionism. Its champions maintained that this evolution has not justified the Marxian theory.
Let us see what Tugan-Baranowsky has to say of the “concentration theory”: “All the most recent data of industrial development corroborate this theory.” It is true, we are told, that it does not apply to agriculture; “but this circumstance does not by any means destroy the significance of the concentration theory in its application to the entire capitalist system; it merely makes necessary a modification.” Herr Tugan definitely agrees to what I said on this point in my book on the agrarian question.
He acknowledges likewise that crises do not abate, that they are inevitable, and that trades-unions but intensify them:
“The technical resources of modern industry are of such magnitude that the productivity of every capitalistic country has increased by leaps and bounds. This is test shown by the marvelous progress of capitalist industry during periods of industrial prosperity ... But such an upward movement never lasts long. Three or four years pass and we are again in the midst of crises, bankruptcy and stagnation. This is the unchangeable course of capitalist industry. During the past hundred years every period of prosperity has been followed by one of depression; during the past thirty years the sum total of lean seasons has much exceeded that of the fat ones ... It is true that there is going on within the capitalist system a mighty process of unification into associations and combines. But these capitalist organizations are unable to loose the bands which bind social production. On the other hand they make it possible to limit production, to hinder its natural increase. In this lies their chief purpose. Thus the lack of organization in capitalist society, which cannot be done away with by any combination, occasions a good deal of friction in the course of industrial development. This friction sometimes reaches such dimensions that it brings the progress of capitalism to a stand-still, i.e., we have a crisis. That is to say, capitalism condemns the proletariat to endless labor and misery, but it hinders also the growth of social wealth, prevents increase of the productivity of social labor.”
We have here all the conclusions which ten years ago the revisionists threw on the scrap-heap amidst prolonged applause from the bourgeoisie.
Of all the destructive criticism of that period there remains only the argument against the theory of degeneration and collapse; an argument, however, which does not affect the Marxian doctrine, for it is directed against views for which Marx is not to be held responsible.
In his discussion of the degeneration theory Herr Tugan approaches my own position. He finds my remarks on social degeneration brilliant and, in great part, just. The increasing needs of the workingman place out of question the possibility of satisfying them. Furthermore, it is possible that Kautsky is right in his other statements; e.g., when he maintains that the exploitation of the worker by the owner of the means of production has of late increased rather than decreased, that the worker produces ever less for himself and more for the capitalist. All this is possible, but there is no definite proof of it; statistics of wages and incomes are too incomplete to admit of a definitive answer to the question involved. At any rate an amelioration of the position of the laboring class is not irreconcilable with an increase in the per cent of exploitation.
More than this we could surely not ask of a revisionist. He acknowledges that possibly, even probably, exploitation, and thus the gulf between capital and labor, is on the increase.
To be sure Herr Tugan imagines that he scores a triumph over me in this discussion of the degeneration theory: “Kautsky is definitely in error in his statement that this theory of social degeneration is truly Marxian.....Marx was of the opinion that the more powerful become the productive energies of capitalism the keener and more general become social and physical misery; capitalist development not only makes the workingman a pauper, but forces him ever downward in physical, intellectual and moral condition.” This last he asks me to acknowledge, “but Kautsky lacks the courage to acknowledge it publicly.”
In reality some ten years ago I showed that if one really understands the elements of socialist theory he will interpret the doctrine of the increasing misery of the working-class to mean its remaining behind in the general advance of society. I cited at that time Lassalle, and referred to Engels, Marx and Rodbertus, all of whom expressed themselves in the same sense. (Bernstein and the Social Democratic Program, p.119).
If this does not satisfy Tugan-Baranowsky let me serve him another citation from Marx. In his pamphlet entitled Wage-Labor and Capital, Marx discusses the question as to the effect upon the worker of a rise in wages: “A cottage may be small, but so long as the dwellings surrounding it are no larger it satisfies the social requirements of its inhabitants. If, however, a palace raises itself alongside the cottage, the latter shrinks to a hut. Its comparative modesty shows that its inhabitants make only the smallest pretensions. In the course of civilization it may shoot ever so far into the air; if the adjacent palace increases equally in height, or even faster, the inhabitants of the comparatively small house will become constantly more uncomfortable, more discontented.
“A noticeable growth in wages presupposes a rapid growth in productive capital. Rapid increase of productive capital causes rapid increase in wealth and luxury, in social necessities and social enjoyments. Therefore, even if the worker has more, he is less satisfied; the enjoyments of the capitalist have increased faster than his. Our needs and pleasures are social: we measure them by a social standard; we do not measure them in terms of the objects which give satisfaction. Because they are social, they are relative.
“Wages stand in a certain relation to the profit of the capitalist; so there is such a thing as a relative wage. This is to be distinguished, on the one hand, from the real wage (measured in terms of commodities) and, on the other, from the nominal wage (measured in money). It may fall when both the others rise. If wages rise five per cent and profits thirty, the relative wage has decreased.
“If there comes about, then, an increase in the worker’s income, there occurs simultaneously a widening of the social chasm which separates worker from capitalist, a strengthening of the power of the capitalist and further accentuation of the worker’s dependence.”
The difference between Marxists and revisionists, then, is not to be found here. The revisionists were not the original discoverers of the fact that absolutely the position of the working class is improving; the Marxists never proclaimed a theory of absolute degeneration.
But there is a notable difference of opinion. Herr Tugan acknowledges that until the fifties of the last century the proletariat did really sink farther and farther into misery. From that time on, it seems to him, a steady improvement is discernible. This representation is in the main correct, but his theoretical explanation of it is inconsistent with the facts.
One modification of his statement of fact I should like to make before taking up his theory. He makes the general statement that “during the second half of the last century the conditions of the working class improved.” This does not hold true of the entire working class. During the first part of the period in question it was true only of England and there applied only to certain classes of labor. Outside of England a noticeable improvement began only twenty years later, and there, also, merely among the aristocracy of labor.
And now as to his theory. He maintains that the increase in misery and want at the beginning of the nineteenth century was the result of the children’s diseases of capitalism. The economic improvement of the proletariat is, according to him, a necessary result of capitalist development. The factory has to lower its wages so long as it has to compete with handicraft and domestic labor. After these are driven from the field “the natural increase in the productivity of labor brings about the tendency of wages to increase.”
Against this conception must be urged the fact that at the middle of the last century handicraft was not driven from the field; that this has not even yet been done. Only certain forms of hand labor have disappeared, those that brought good returns. Since then the sweating system has struck deep root in precisely those countries where capitalism is most developed. So we have still with us the form of small industry which is supposed to depress wages and plunge the worker into misery. On the other hand it is clear that the moment small industry disappears the capitalistic method of production will find itself at the end of its rapid expansion, the expansion which has furnished the most favorable condition for the worker. For expansion implies the production of more commodities than can be bought by the employees. These must be disposed of by driving out the home industry of the farmer and the handicraft of the urban producer. If capital has succeeded in doing this in its own country, it must seek a foreign market and there repeat the process. It adds, then, to the wage competition of its own craftsmen, home-workers and small farmers, those of other countries. The English textile worker has no longer to compete with the handweaver of his own country; but he still has arrayed against him those of India and China. In other branches, mining for instance, wages are brought down by the immigration of foreign handworkers, home-workers and small farmers who have been thrown out of employment by capitalist competition. Therefore the tendency to lower wages which existed during the early fifties still persists, though now it has taken on an international character. This tendency is a natural feature of the capitalist system, since it is closely connected with the condition of capitalist expansion. An end could be put to it only in case conditions appeared which put an end to the expansion of the capitalist method of production. But this would mean with “further increase of the productivity of labor” an absolute diminution in the demand for laborers. The old labor competition would cease; there would be no more handicraftsmen or home-workers to force into the proletariat. But a new competition would appear, the competition with the constantly increasing number of unemployed.
Therefore any improvement in the position of the working class cannot be attributed to the fact that independent workers have been turned into proletarians. For one thing, this process has not ceased, and for another, when it does cease it will be under circumstances which will have an altogether different effect from the one which Herr Tugan expects.
In reality when Herr Tugan begins to describe actual economic processes he gives quite different reasons for the improvement of the working class. He says: “The most important factors in the growth of the power of the working class were the factory laws, the labor organizations and the co-operative movement.” Of these three factors not one has anything to do with the reasons which ere first assigned for the upward movement of the working class.
But if Herr Tugan comes nearer the facts in his account of these three factors, even here he exaggerates on the one hand, and on the other he leaves important influences out of account. Thus he overstates the fact when he says one of the beneficial results of labor laws is “an increased demand for hands,” because “the shortening of the working day necessitates an increase of the number of workers.” A number of things go to show that this is not true. It has been shown again and again, e. g., that a shortening of hours bring about, not a decrease, but an increase, of labor-power. Again, the introduction of labor-saving machinery is often favored by labor legislation. More than this, the intensity of work, is everywhere rapidly increasing, and this tendency is favored by labor legislation. Nowhere has there been brought about a considerable diminution of labor-power through the passing of labor laws.
Much exaggerated, on the other side, is the significance which Herr Tugan gives the co-operative societies: “The co-operative movement freed the workers as consumers from the power of the dealer.” Even the most optimistic co-operators may well shrink from this generalization. They expect their societies sometime to free the worker from the dealer; but they must acknowledge that thus far the advantages which they offer have benefited but a small minority of the proletariat.
But my chief criticism on this part of Herr Tugan’s work is that he overlooks the mightiest causes which contribute to the elevation of the working class. We have already noticed that it was in England during the fifties of the last century that this upward tendency began. There it was due to the inauguration of the free-trade policy. This gave England a temporary monopoly of the world market, and a few crumbs of the resulting prosperity fell to the share of English workingmen.
In Germany it was the tremendous transformations of 1866 and 1870 which ushered in the new order. They first laid the basis of our government on liberal principles and made possible a rapid growth of capital.
Since 1880, finally, it has been the flooding of Europe with cheap food which has wrought the improvement in the position of the workers. Prices naturally decreased, and as soon as the hard times of the early eighties were over there began an era of prosperity. This, together with the labor laws and the rapid strengthening of the labor unions, worked an improvement in the conditions of living over a large part of Europe.
But are the conditions which produced this effect inseparably connected with the development of the capitalist system of production? If so, they must remain increasingly effective and thus produce a steady increase in real wages.
If the revisionist theory as to the rise of the proletariat out of misery has a good foundation in fact, it must be able to establish this necessary connection. That would he the most important purpose of a revisionist theory. But the revisionists do not dream of such a thing; for the factors which have occasioned a rise in wages during the past decades are all decreasing in effectiveness.
First came the passing of English industrial supremacy. This began some time ago, but the effect of it was partially counterbalanced by the decrease in the cost of living. This decrease has now come to an end. The United States is becoming an industrial country with an increasing ground-rent; its reserves of uncultivated territory are rapidly disappearing. Russia and India sink farther and farther into chronic famine; their agriculture is falling into decay. So the flooding of the world-market with cheap food is coming to an end.
And the passing of labor laws has also come to a halt. The proletariat alone is not yet strong enough to force such legislation; the motives which formerly inclined many sections of the ruling class toward it are evidently losing their force. A minimum of protection for labor has been provided in most industrial countries – enough to prevent a too rapid degeneration of the working class. Beyond this the bourgeois class does not wish to go, partly because of the rise of the labor movement. When the most important labor laws were introduced the proletariat was still helpless, and it was not foreseen that these laws would do more than prevent the physical degeneration of the worker; lawgivers were quite unconscious of the fact that they would contribute to his moral and intellectual uplift, his consciousness of strength and his power of organization. Since this has been recognized bourgeois interest in social reform has notably decreased.
At the same time the sections of the owning class whose interests are directly opposed to labor legislation have grown. One of the chief forces favorable to such legislation was the animosity of the other classes toward the great capitalists. These other classes were mostly landowners, on the one side, and small capitalists on the other. Today many of the landowners have themselves become industrial capitalists. More than this, in their capacity of landowners they now feel the effect of the class-struggle: their laborers have been spurred on by the efforts of the industrial workers and in their turn have become dissatisfied. The small capitalist, on his part, sees no other salvation than unlimited exploitation of his laborers. So the small capitalist and landowner, who once took an interest in the fight of the proletariat for social reform, now outdo the great capitalist in hatred of such reform.
All this tends to bring about a paralysis of the reform tendency. The achievements already accomplished are not the beginning of a series of improvements which will go on indefinitely in the same direction; they are only fragments which are regarded by their creators themselves as boundary marks to fix the limits of further concessions. Now and then a labor law may be passed, but always one that applies to a small industry. In general such legislation has come to a stand-still. In some respects there has even been a falling off. For example, work has increased in intensity, and workers, being obliged to live farther and farther from their employment, are actually giving an increasing proportion of their time to their employers.
And the growth of the labor unions is also reaching its limit; that is, their relative growth, their growth in relation to that of capitalist power. Actually, of course, their progress will continue; but the economic progress of the proletariat in society is indicated only by their relative growth.
The termination of the favoring factors just considered must tend to hinder the growth of the union movements. In addition there is another fact to take into account. The strength of the unions both in England and on the continent was increased by the fact that the workers organized faster than the capitalists. Organized workers found themselves opposed to unorganized operators.
And then came about a transformation of the industrial world: the textile industry ceased to be the controlling interest and the iron industry came into the position of first importance. But in this field men were not yet competing against women and the skilled worker had not been driven out by the unskilled. The rapid development of this industry, then, brought with it an increased demand for skilled male workers – the very ones most really and qualified to organize and fight.
These facts furnished the basis for one of the attacks on Marx’s Capital – first by bourgeois economists and then by revisionists. We were told that the Marxian theory might tally well enough with the facts in the textile industry, but not in the iron industry. Only uncritical dogmatists could find in this theory the law of the capitalist world in general.
But now, behold, the “dogmatists,” who do not lose their head at the appearance of every new phenomenon, are justified. But few decades have passed, and already history has repeated itself; the conditions with which we grew familiar in the textile industry make their appearance in the field of iron and steel. Here also the work of women and unskilled laborers now hinders the growth of the union movement. At the present time combinations of capital have come to control the mining and metal industries to such an extent that often a single man controls an entire branch.
Some unions comfort themselves with the fact that it is easier to get on with organized than unorganized employers. This may be true of branches in which sharp competition has tended to depress wages. But there are only a few such branches, and they are unimportant. Even in these, as soon as competition is done away with, the combined capitalists show their teeth to the labor movement. And when it comes to a conflict between capital and labor it is clear that organized operators are stronger than unorganized.
All these circumstances place the unions more and more on the defensive, force them to concentrate their power on the mere maintenance of positions already taken. That they are more cautious than formerly is proved by the increasing unpopularity of strikes. The last year of prosperity brought no union labor advances noticeably beyond the advance in the prices of the necessities of life. Prices increase and remain high even during financial crises.
These are facts which are independent of the attitude of any party leader or union official, even independent of any form of tactics.
But all this leads to an inevitable result. The period of rising real wages must cease for one class of laborers after another; some must even suffer a decrease. And this applies not only to times of temporary depression, but also to times of prosperity. The period of rising real wages has lasted in England since the fifties, in Germany since the seventies and especially the eighties. This period has come to an end. A new period begins amid circumstances much more discouraging for the economic struggle of the proletariat. Increasing numbers of workers are now threatened with continued stagnation, or even depression, of real wages.
I do not mean that this period must last for decades or that the struggle against its degrading tendencies is hopeless. What is becoming hopeless is the isolated conflicts of separate crafts or parliamentary groups. The tendencies of this period are the result of a mighty world-change, and they can be met only by another mighty change – one that will make it possible to marshal as a single unit all the powers of the international proletariat. The Russian revolution might have been the beginning of a new era, the era of the advance of the proletariat. But other points of departure are thinkable. The present situation is not hopeless; but it does call for something more than make-shifts, something more than peanut tactics. It demands of the vanguard of the proletariat broad views and boundless courage. And to these qualities must be added thorough-going knowledge and calm judgment. The fighting proletarians must be able to hold aloof from illusions and adventurous experiments; they must be ready to endure patiently during dark days of apparent defeat; must learn when to limit themselves to the education and organization of the proletariat and when to strike for victory.
But we may as well face the unwelcome reality. Until a great world-change takes place the proletariat must reckon with the fact that the good times are over and that the regular increase in real wages has reached its end.
If the tendency of wages under capitalism is not steadily downward, no more is it steadily upward. In fact the reward of labor tends to vary within fixed limits. These limits are more elastic, it is true, than Lassalle’s iron law of wages. And within them the rise and fall are responsive to a variety of influences; not only as times change from good to bad, or vice versa, do wages go up or down; they vary also in accord with certain fundamental transformations of industry and politics. Extraordinarily favorable conditions may maintain a rising wage scale in some crafts for half a century. On the other hand no class of workers is secure against reductions. Technical developments, changes in the world-market or in the political situation – any of these may start a downward tendency. Over every proletarian hangs unemployment like a sword of Damocles; and just so over every class of workers hangs the danger of economic degeneration. But no matter how wages may vary, exploitation increases steadily. The mass of the exploited becomes constantly greater, and greater also grows the social and economic pressure. But this is not all. Constantly more imperative grows “the indignation of the ever swelling body of workers, men and women schooled for conflict by the mechanism of the capitalist process of production.”
It is this growth which makes a widening of class distinction inevitable. It is not proletarian degeneration, but proletarian development, proletarian education, which will make the class-struggle constantly more bitter. There is no worse perversion of Marxian doctrine than to attribute to it the theory that “the workingman degenerates physically mentally and morally; he sinks ever deeper into ignorance and moral barbarism.” Marx did foresee, and none more clearly, the increasing pressure to which the proletariat is subject; but he saw also that in this there is promise, not of degeneration, but of increasing intelligence and of final revolt and freedom.
Last updated on 26.11.2003