Chapter V: Ferdinand Lassalle (2)

But when the workmen on the one hand contemplate the enormous sums required for railways and factories, and on the other hand consider the emptiness of their own pockets, they may naturally ask where they are to obtain the capital needed for the great industry? The State alone can furnish it; and the State ought to furnish it, because it is, and always has been, the duty of the State to promote and facilitate the great progressive movements of civilisation. _Productive association with State credit_ was the plan of Lassalle.[4]

The State had already in numerous instances guaranteed its credit for industrial undertakings by which the rich classes had benefited—canals, postal services, banks, agricultural improvements, and especially with regard to railways. No outcry of socialism or communism had been raised against this form of State help? Then why raise it when the greatest problem of modern civilisation was involved—the improvement of the lot of the working classes? Lassalle’s estimate was, that the loan of a hundred million thalers (£15,000,000) would be more than sufficient to bring the principle of association into full movement throughout the kingdom of Prussia.

Obviously the money required for the promotion of productive associations did not require to be actually paid by the Government; only the State guarantee for the loan was necessary. The State would see that proper rules for the associations should be made and observed by them. It would reserve to itself the rights of a creditor or sleeping partner. It would generally take care that the funds be put to their legitimate use. But its control would not pass beyond those reasonable limits: the associations would be free; they would be the voluntary act of the working men themselves. Above all, the State, thus supporting and controlling the associations, would be a democratic State, elected by universal suffrage, the organ of the workers, who form an overwhelming majority of every community.

But if we are to conceive the matter in the crudest way and consider the money as actually paid, wherein would the enormity of such a transaction consist? The State had spent hundreds of millions in war, to appease the wounded vanity of royal mistresses, to satisfy the lust of conquest of princes, to open up markets for the middle classes; yet when the deliverance of humanity is concerned the money cannot be procured!

Further, as he takes care to explain, Lassalle did not propose his scheme of productive associations as the solution of the social question. The solution of the social question would demand generations. He proposed his scheme as the means of transition, as the easiest and mildest means of transition.[5] It was the germ, the organic principle of an incessant development. Lassalle has indicated, though only in vague outline, how such an organic development of productive associations should proceed. They would begin in populous centres, in cases where the nature of the industry, and the voluntary inclination of the workmen to association, would facilitate their formation. Industries, which are mutually dependent and work into each other’s hands, would be united by a credit union; and there would further be an insurance union, embracing the different associations, which would reduce their losses to a minimum. The risks would be greatly lessened as a speculative industry constantly tending to anarchy, and all the evils of competition would be superseded by an organised industry; over-production would give place to production in advance. In this way the associations would grow until they embraced the entire industry of the country. And the general application of the principle would give an enormous advantage in international competition to the country adopting it, for it would be rational, systematic, and in every way more effective and economical.

The goal of the whole development, as conceived by Lassalle, was a _collectivism_ of the same type as that contemplated by Marx and Rodbertus. ‘Division of labour,’ he says, ‘is really common labour, social combination for production. This, the real nature of production, needs only to be explicitly recognised. In the total production, therefore, it is merely requisite to abolish individual portions of capital, and to conduct the labour of society, which is already common, with the common capital of society, and to distribute the result of production among all who have contributed to it, in proportion to their performance.’[6]

In the controversial work against Schulze-Delitzsch, Lassalle has at greater length expounded his general position in opposition to the individualist theories of his opponents. He contends that progress has not proceeded from the individual; it has always proceeded from the community. In this connection he sums up briefly the history of social development.

The entire ancient world, and also the whole mediæval period down to the French Revolution of 1789, sought human solidarity and community in bondage or subjection.

The French Revolution of 1789, and the historical period controlled by it, rightly incensed at this subjection, sought freedom in the dissolution of all solidarity and community. Thereby, however, it gained, not freedom, but license. Because freedom without community is license.

The new, the present period, seeks solidarity in freedom.[7] He then proceeds in his _theory of conjunctures_ to prove that, instead of each man being economically responsible for what he has done, each man is really responsible for what he has not done. The economic fate of the individual is determined by circumstances over which he has no control, or very little. What does Lassalle mean by a _conjuncture_? We can best understand it by reference to a great economic crisis which has occurred since his time. No better example of a _conjuncture_ can be found than in the recent history of British agriculture. In 1876, agriculture, still the most important industry of the country, began to be seriously threatened by American competition. The crisis caused by the low prices due to this competition was greatly aggravated by bad seasons, such as that of 1879. The farmers, obliged to pay rent out of capital, were many of them ruined. In consequence of the diminished application of capital to land the opportunities of labour were greatly lessened. Rents could no longer be paid as formerly. All three classes directly concerned in English agriculture suffered fearfully, without any special individual responsibility in the matter. In Ireland, where the difficulty, great in itself, was intensified by the national idea, an economic crisis grew into a great political and imperial crisis. In the eyes of the impartial inquirer, who of all the millions of sufferers was personally responsible?

Such wide-spread disasters are common in recent economic history. They are a necessary result of a competitive system of industry. Lassalle is justly angry with the one-sided and ill-instructed economists that would hold the individual responsible for his fate in such a crisis. Statesmen little understand their duty who would leave their subjects without help in these times of distress. And it must always be a praiseworthy feature of socialism that it seeks to establish social control of these _conjunctures_ as far as possible, and to minimise their disastrous effects by giving social support to those menaced by them.

The main burden of the _Bastiat-Schulze_ is Lassalle’s account of capital and labour.

For Lassalle _capital is a historic category_, a product of historical circumstances, the rise of which we can trace, the disappearance of which, under altered circumstances, we can foresee.

In other words, capital is the name for a system of economic, social, and legal conditions, which are the result severally and collectively of a long and gradual process of historical development. The _Bastiat-Schulze_ is an elucidation of these conditions. The following may be taken as a general statement of them:—

(1) The division of labour in connection with the large
industry.

(2) A system of production for exchange in the great
world-markets.

(3) Free competition.

(4) The instruments of labour, the property of a special class,
who after paying

(5) A class of free labourers in accordance with the Iron Law of
Wages, pocket the surplus value. Property consists not in the
fruit of one’s own labour, but in the appropriation of that of
others. _Eigenthum ist Fremdthum geworden._[8]

In this way capital has become an independent, active, and self-generating power which oppresses its producer. Money makes money. The labour of the past, appropriated and capitalised, crushes the labour of the present. ‘The dead captures the living.’ ‘The instrument of labour, which has become independent, and has exchanged _rôles_ with the workmen, which has degraded the living workmen to a dead instrument of labour, and has developed itself, the dead instrument of labour, into the living organ of production—that is capital.’[9] In such highly metaphorical language does Lassalle sum up his history of capital. We have already commented on that aspect of it, the Iron Law of Wages, which Lassalle has most emphasised. The whole subject is much more comprehensively treated in the _Kapital_ of Karl Marx; therefore we need not dwell upon it further at present.

It will not be wrong, however, to say a word here about the use of the word capital, as current in the school of socialists to which Lassalle and Marx belong. It is not applied by them in its purely economic sense, as wealth utilised for further production: it is used as the name of the social and economic system in which the owners of capital are the dominant power. With them it is the economic factor as operating under the existing legal and social conditions, with all these conditions clinging to it. It would be much better to restrict the word to its proper economic use, and employ the new word capitalism as a fairly accurate name for the existing system.

The function of capital under all social systems and at all historical epochs is fundamentally the same; it is simply wealth used for the production of more wealth. But the historical, legal, and political conditions under which it is utilised vary indefinitely, as do also the technical forms in which it is embodied.

No real excuse can be offered for the ignorance or confusion of language of controversialists who maintain that the object of socialism is to abolish capital. So far from abolishing capital, socialists wish to make it still more effective for social well-being by placing it under social control. What they wish to abolish is the existing system, in which capital is under the control of a class. It would be a considerable gain in clearness if this system were always called capitalism.

We have already remarked upon Lassalle’s theory of the State, and his treatment of the Iron Law of Wages. Our further criticism of his social-economic position can best be brought out by reference to his controversy with Schulze-Delitzsch, the economic representative of German Liberalism.

In general it may be said that Lassalle meets the one-sided individualism of Schulze by a statement of the socialistic, theory, which is also one-sided and exaggerated. His view of the influence of the community as compared with that of the individual is the most prominent example of this. The only accurate social philosophy is one which gives due attention to both factors; both are of supreme importance, and either may fitly be the starting-point of investigation and discussion.

His theory of conjunctures is overstated. It is to a considerable degree well founded; in the great economic storms which sweep over the civilised world the fate of the individual is largely determined by conditions over which he has no control. Yet now as ever the homely virtues of industry, energy, sobriety, and prudence do materially determine the individual career.

For our present purpose, however, it is more important to consider Lassalle’s polemic against the practical proposals of his opponent. Lassalle contended that the unions for providing credit and raw material would benefit the hand-workers only, whereas hand-labour is destined to disappear before the large industry. But, we may ask, why should not such methods of mutual help be utilised for associations of working men even more than for isolated workers? These unions may be regarded as affording only a very partial and limited relief to the workmen, but why should the principle of association among workmen stop there?

The system of voluntary co-operation must begin somewhere; it began most naturally and reasonably with such unions, and it proceeds most naturally and reasonably along the line of least resistance to further development. In these unions the workmen have been acquiring the capital and experience necessary for further progress. No limit can be assigned to the possible evolution of the system. They are properly to be regarded as only the first beginnings of social control over the economic processes, the goal and consummation of which we find in socialism. If in the controversial struggle Lassalle had listened to the clear voice of science, he would have seen that, for his opponent as well as for himself, he must maintain that all social institutions are subject to and capable of development.

For the methods of Schulze it may be claimed that they do not provide a ready-made solution of the social question, but they are a beginning. For the associations of Schulze, not less than for those of Lassalle, we may contend that they supply the organic principle of an incessant development. In this way the workmen may attain to the complete management of their own industrial interests with their own joint capital. They may thus obtain for themselves the full product of their labour, in which case the objection of Lassalle, with regard to the increase of population, under the influence of the cheap provisions supplied by the stores, would no more apply to the scheme of Schulze than they would to his own. In both cases we are to suppose that the means of subsistence would be more abundant and more easily obtained; in both cases there might be the risk of a too rapidly increasing population. We may suppose that this increase of population would be met by a still greater increase in the product of labour, all going to the workers. But for the schemes of Schulze there would be this great advantage that, the capital and experience of the workers having been acquired by their own exertions, they would have all the superior training requisite for the solution of the population question, and all other questions, which can be obtained only from a long course of social discipline.

Lassalle would have done well to remember his own statement, that the only real point of difference between them was, that one believed in State help, and the other in ‘self help.’ And we may further ask, Do the two exclude each other?

In fact, the controversy, considered purely on its merits, was barren enough. Yet it led to profitable results, inasmuch as it directed the mind of Germany to the questions involved, and led to a more thorough discussion of them.

Better, however, than any argument which can be urged is the verdict of history on the merits of the question, as already pronounced during the period which has elapsed since the date of the controversy. In 1885, just twenty-one years after the bitter controversy between the two representatives of State help and self help, the societies established by Schulze in Germany alone possessed one hundred million thalers of capital of their own. It will be remembered that this is the amount of the loan required by Lassalle from the State to bring his productive associations into operation. If the workmen fail in productive association, it will not be, as Lassalle maintained, for want of capital. Productive association with State credit is therefore not the only way out of the wilderness.

Must we go further and say that Lassalle’s method of State help was not the right method at all? It is certain that the Government of Germany, though organised on the principle of universal suffrage, has _not_ granted the credit demanded by Lassalle, and that his agitation in this matter has failed owing, it might be alleged, to his early death, and to the fact that since his time German socialism has prematurely moved on international, and even anti-national, lines, thus alienating from itself the sympathies of the Emperor and his Chancellor. We need not say how very improbable it is that the German Government would have guaranteed its credit, however submissive and conciliatory the attitude of the Social Democrats might have been. The Social Democrats themselves, though they gave a place to Lassalle’s scheme on the Gotha programme of 1875, seem now disposed to attach little or no importance to it. It does not appear in the Erfurt programme of the party, which was adopted in 1891. In short, Lassalle’s agitation has in the point immediately in question been a failure. At the same time, it would be absolutely incorrect to assert that experience has pronounced against his scheme, inasmuch as no Government has ever seriously taken it in hand.

Like many other pioneers, Lassalle has not accomplished what he intended, yet he has achieved great results. We cannot quite accept the dictum of Schiller, that the world’s history is the world’s judgment. We are not prepared to believe that all things that have succeeded were good, and all things that have failed were evil; or that things are good or evil only in so far as they succeed or fail. Still, we may well sum up the controversy between Lassalle and Schulze by stating that in 1885 the societies founded by the latter had in Germany a membership of 1,500,000 with a capital of £15,000,000, and at the election of 1890 the Social Democracy of Germany, originated by Lassalle, polled 1,427,000 votes. Both have done great things, which are destined to be greater still. In this, as in so many other instances, the course of history has not respected the narrow limits prescribed to it by controversialists.

We need not, however, insist further on the details of Lassalle’s controversy with Schulze-Delitzsch. Much more important is it to recall the leading aspects of his teaching. What Lassalle contemplated and contended for was a democracy in which the claims of Might and Right should be reconciled, a democracy of working men, guided by science, and through universal suffrage constituting a State which would rise to the high level of its function as representative and promoter of freedom, culture, morality, and progress in the fullest and deepest significance of those great ideas. Above all, this democracy was to be a social democracy, in which the political idea should be subordinate to the social; hence the duty of the State at least to initiate the solution of the social question by granting credit for productive associations. But this was only to be a beginning; the solution of the social question must be ardently worked out for generations until labour should be entirely emancipated.

With such an ideal, contrast the Prussian-German State as it actually is. The German State must still find its basis in the army and police, the most intelligent of the working class being in profound discontent. It is a fact worth considering by our economists and politicians, that the _élite_ of the working men of probably the best educated and most thoughtful nation in the world have gone over to the Social Democratic party. Nor can the German or any other State devote itself heartily to the solution of the social question, for Europe is like a vast camp, in which science and finance are strained to the uttermost in order to devise and provide instruments for the destruction of our fellow-men. Of this state of things the young Emperor who ascended the throne in 1888 is only the too willing representative; but even if he were inclined, he would be powerless to prevent it, as its causes are too deeply rooted in human nature and in the present stage of social development to be removed by anything less than a profound change in the motives and conditions of life. The historical antecedents and geographical position of Germany are such that it must long continue to be a military State; and most other nations have hindrances of their own. Reformers must therefore wait long and strive earnestly before they can hope to see such an ideal as that of Lassalle realised. That the ideal was a noble one, and that the gratitude of all lovers of progress is due to him for his energetic and eloquent advocacy of it, notwithstanding certain unworthy passages in his career, few will deny.

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[1] _Bastiat-Schulze_, p. iii., Berlin 1878.

[2] See _Working Men’s Programme_.

[3] See _Open Letter_.

[4] See _Open Letter_, passim.

[5] See _Bastiat-Schulze_, p. 189.

[6] _Bastiat-Schulze_, p. 188.

[7] _Bastiat-Schulze_, p. 18.

[8] _Bastiat-Schulze_, p. 186.

[9] _Ibid._, p. 181.