Democracy versus Socialism

Max Hirsch: Democracy versus Socialism (1911)


Introduction (see below)

Part 1 – An Analysis of Socialism
1: The Economic Conception
2: The Industrial Proposal
3: Do
4: The Ethical Conception
5: The Distributive Proposal
6: Modification of family relations
7: The Political Conception
8: Is Socialism Scientific?
9: The Definition of Socialism

Part II – Economics
1. Marx’s Theory of Value
2. The Quantitative Theory of Value
3. Origin and Nature of Capital
4: The Origin and Nature of Capital…
5. and Spurious Interest
6. A compariosnof Real with Spurious Capital
7. Surplus Value
8. Land and Rent
9. The Theory of Interest
10 The Wages of Labour
11. The Component of Surplus Value
12. Competition

Part III – Ethics
1. The Denial of Natural Rights
2. Happiness or Justice
3. The origin and Growth of Law
4. Natural Rights
5. The Ethics of Distribution
6. The Right to the use of the Earth
7. Ethics of Property
8. The Right of Free Industry
9. Individualism

Part IV – The Outcome of Socialism
1. The unconscious Growth of Social Securities
2. The unconscious Discharge of Social Functions
3. The Industrial Organisation of the Socialist State
4. The Political Outcome of Socialism
5. The Industrial Outcome of Socialism
6. The Family under Socialism
7. The Ethical Outcome of Socialism

Part V – The Single Tax
1. Introduction
2. Objections to Principles
3. The Method of Reform
4. The Ethics of Compensation
5. The Suffiency of the Reform
6. Mr. Edward Atkonsons Objections
7. Prof. Francis A. Wlker’s Objections and Admissions
8. Confirmation of Socialists



THE greatest optimist cannot regard with satisfaction the social conditions of the period through which we are passing. At no time could wealth be produced with so little effort; at no time was wealth so abundant; yet mankind has benefited but inadequately by this unequalled increase in the material means of happiness. 

The statistics of lunacy and suicide confirm the general conviction that the effort required to gain a livelihood is constantly becoming greater and the strain on the nervous energy of all workers more exhausting. Though a few amass fortunes as huge as they are useless for the enjoyment of anything but irresponsible power, the great mass of the people, the bulk of the wealth-producers, are only a little better off than at the period of their greatest degradation; while below them there is accumulating a mass of hopeless human wreckage which makes our great cities comparable to putrefying refuse heaps.[1] Last, not least with this very advance in the facility of making wealth, the opportunity to do so has become more restricted and more uncertain for the working population. Apart from the ever-increasing mass of those who cannot find any employment, a much larger number are exposed to the evil of occasional unemployment; and recurring industrial crises, general and partial, hold up forever before his eyes that worst terror of the decent, self-respecting worker–more or less continued unemployment.[2]

[1] No one can contemplate the condition of the masses of the people without desiring something like a revolution for the better."—Gilfen, Essays in Finance, 2nd series, p. 393.
"It may well be the case, and there is every reason to fear it is the case, that there is collected a population in our great towns which equals in amount the whole of those who lived in England and Wales six centuries ago, but whose condition is more destitute, whose homes are more squalid, whose means are more uncertain, whose prospects are more hopeless than those of the poorest serfs of the Middle Ages and the meanest drudges of the mediaeval cities. "—Rogers,Six Centuries of Work and Wages.
[2] "In a normal state of industry in machine-using countries there exists more machinery and more labour than can find employment, and only for a brief time in each decennial period can the whole productive power of modern machinery be fully used."—Hobson, The Evolution of Modern Capitalism, p. 197.

Moreover, wealth is gradually concentrating in: fewer and fewer hands, a process which, if unchecked, must ultimately lead to the division of the population into two warring classes with no interest in common, a ruling plutocracy holding irresponsible power, and using it ruthlessly to oppress the people, confronted by a mass of hopeless proletarians for ever striving to shake off the yoke imposed upon them.[3] Long before this extreme is reached, however, social revolution, with all its horrors, will have put a temporary check upon this tendency.

[3] In The Arena of December 1896, page 86, Eltweed Pomeroy publishes a table showing the distribution of wealth in Great Britain among males of twenty-five years and over, based upon the statistics of death and death-duties for the years 1890-94. In explanation he states: —”In my opinion it is an under-statement of the concentration of wealth in Great Britain; and yet the facts are startling. Over 56 per cent own nothing; and if we add the three first classes together, we have nearly 80 per cent owning less than 3 per cent, and then a little over 20 per cent owning 97 per cent; if we add the first four classes together, we have over 90 per cent of the people owning less than 8 per cent of the wealth of the country, and under 10 per cent owning 92 per cent; and if we take the last two classes, we find that less than one-fiftieth of the people own over two-thirds of the wealth; and then look at that last class of millionaires, numbering less than three one-hundredths of 1 per cent, and yet owning over 13 per cent of the wealth.”
Dealing with the State of Massachusetts, he shows the distribution of wealth to have altered between the period 1829-31 and that of 1879-81 as follows, pp. 91, 92:–
“The class with nothing have increased from 62 to 69 per cent. The millionaires have increased from .002 per cent with 8 3/4 per cent of the wealth, to .08 per cent with 24 per cent of the wealth. The number of small property owners with less than a (1000) thousand (dollars) have decreased from under 20 per cent to 9 per cent, and their property has decreased from a little over 4 per cent to just above 1 per cent. The rich men worth between $100,000 and $500,000 have increased from .009 per cent to .50 per cent, and their wealth has increased from nearly 13 per cent to 261 per cent. The moderately well off, worth from $1000 to $5000, have remained nearly the same in per centage of population, around 13 per cent, but their wealth has decreased from 21 per cent to 8 1/4 per cent.”
George K. Holmes, of the United States census office, in the Science Quarterly, December 1893, states: —”Twenty per cent of the wealth of the United States is owned by three one hundredths of 1 per cent of the population; 71 per cent is owned by 9 percent of the families, and 29 per cent of the wealth is all that falls to 91 per cent of the population.”

The problem which, with ever-increasing urgency, demands a solution at the hands of our society, if peace and progress are to be preserved, is that of the persistence of undeserved poverty in the midst of abundant wealth; of unemployment in the midst of unsatisfied desires. 

Why is it that millions of men cannot get enough bread to eat, when two or three men can produce sufficient wheat to maintain a thousand men for a year? Why is it that millions of human beings, in the most civilised countries, are shivering in insufficient clothing, though four of them can produce sufficient cotton or woollen cloth for one thousand of them? Why are so many without decent boots, when a year’s labour by one man can produce nearly 4000 pairs of boots? Why is it that while a boot maker wants bread, a tailor boots, and a baker clothes, all three, instead of supplying each other’s wants, are compelled to want in enforced idleness? 

These are questions which ought to present themselves to every thinking man, and which appeal with special urgency to the minds of the wage earners. For the slight improvement in the condition of the majority of them, the higher wages and shorter hours of labour which organisation and legislation-especially legislation which abolished previous interference with equal freedom-have enabled them to exact, have given them leisure and strength to consider their social condition. State schools and cheap literature have given them access to the printed thoughts of their leaders. The concentration of industry in great cities has brought the additional stimulus of an easy interchange of thought. Political enfranchisement has endowed them with the hope that their aspirations of to day may be the realised condition of the near future. 

Socialism offers a plausible answer to these questions; appeals to the dissatisfied with an easily understood remedy for the social and industrial evils, which offend his sense of justice. Its harmonious, if superficial, simplicity captivates the half-educated from whom it requires no mental exertion; its passionate appeals to the highest principles of ethics and the feeling of human brotherhood intoxicate the emotional, while its pretended claims to scientific completeness and evolutionary succession have drawn within its ranks many men of marked ability, who have despaired of any other method for the removal from our civilisation of the evils which they abhor. 

It is therefore not astonishing that Socialism has made and is still making progress, though its progress may easily be overrated.[4] For great numbers of men are habitually classed or class themselves as socialists who in reality know little or nothing of its nature or have no sympathy with its proposals. Whoever seeks to improve social conditions, even if the methods, which he proposes are fundamentally different from those of Socialism, is nevertheless regarded as a socialist by unthinking or prejudiced defenders of the existing system. On the other hand, large numbers of men, profoundly conscious of the injustice of existing social arrangements, lightly adopt the name of socialist, though they are ignorant of the real aims of the party, which they thus apparently join. While the numerical growth of Socialism is thus overestimated, it nevertheless is sufficiently great to demand the most earnest attention and consideration.

[4] "Although Socialism involves State control, State control does not imply Socialism–at least in any modern meaning of the term. It is not so much to the thing which the State does as to the end for which it does it, that we must look before we can decide whether it is a socialist State or not. Socialism is the common holding of the means of production and exchange, and the holding of them for the equal benefit of all."—Fabian Essays, p. 212.

What then is Socialism? The great majority of the middle-class population, who derive their information mainly from the daily newspaper, regard it either as a revolutionary attempt at an equal division of wealth, or as a foolish aspiration for the sudden establishment of a Utopia. No doubt the speeches and writings of the earlier socialists have given ample excuse for these mistakes, and even now there are many socialist speakers and not a few writers whose violent utterances and extravagant dreams lend themselves to easy misunderstanding and misrepresentation. Apart, however, from the consideration that such extravagances are inevitable in any movement which draws the mainspring of its activity from a manly revolt against direful injustice and from a noble compassion for the suffering which this injustice inflicts upon millions of human beings, it is manifestly unjust and mischievous to judge a great movement by its accessories instead of by its essentials, —unjust, because it amounts to misrepresentation; mischievous, because, while producing a false sense of security on one side, it exasperates the other. 

It is therefore deeply to be regretted that socialists have just cause to complain that this treatment is only too often meted out to them. 

Socialism has long since cast off its early revolutionary and Utopian swaddling-clothes, and has been transformed into a political system working in constitutional channels. Instead of depending upon a revolution for the realisation of its ideas, it looks to a gradual transformation of our society through the successive legalisation of small increments of its teaching. Instead of counting upon the sudden creation of a Utopia, it looks upon society as an evolutionary organism, which, through the gradual adoption of socialistic proposals, is bringing its structure into harmony with its environment. Modern Socialism is, therefore, a particular view of the organisation required to bring society into harmony with its industrial expansion, and is based on certain historical, economic, ethical, industrial, and political conceptions. 

Nor must it be omitted to acknowledge here that, contrary to the crude opinion of “the man in the street,” Socialism owes its development and progress to men of high ability, character, and attainments; that its exponents have rendered important services in the development of economic science, especially from the historical stand­point; and that it inculcates a spirit of altruism and brotherhood among men which gives a high moral and educational value to much of its literature. The prevailing neglect of the social for the individual side of life, the glorification of wealth and luxury and other similarly regrettable tendencies of modern societies, have been and are being denounced by socialist teachers with enthusiastic devotion. If they mostly err in the opposite direction, if they, in their turn, disregard the valid claims of the individual in man and mistake compulsion for beneficence, it is only the inevitable backward swing of the pendulum before an equilibrium is reached. A definition of Socialism which shall alike exclude all those reformatory proposals which, while they bear a semblance to those of Socialism, yet spring from opposite motives, and will set in motion opposite tendencies, and which shall not fail to include all that Socialism posits, presents certain difficulties, because Socialism has not, on all points, arrived at a static condition. In many respects it is as yet in a state of development. Moreover, the difficulty is increased by the claims which many socialists advance, to count as evidence for the acceptance of their creed, political measures, which, though neither adopted in a socialistic spirit nor of a socialistic character, neverthe­less bear a certain semblance to socialistic proposals.[5] Nevertheless, certain leading and essential characteristics are sufficiently developed to enable general limits to be drawn. In endeavouring to elucidate such a definition at the present stage of this inquiry, it is, however, necessary to confine it to the absolutely essential, leaving minor characteristics for subsequent treatment.

[5] "One of the most indefatigable and prolific members of the socialist party, in a widely circulated tract, has actually adduced the existence of hawkers' licences as an instance of the 'progress of Socialism."' —Hubert Bland, in Fabian Essays, p. 212.