The Economics of Communism, article in The Weekly Review 1921

The Economics of Communism, article in The Weekly Review 1921

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WITH all the increase in population and wealth, the wants of man seem to have increased more rapidly than his means of satisfying them. This largely accounts for the social unrest and increasing discontent, especially in the more prosperous countries. Socialism, as the expression of this discontent, is a protest against inequality in material conditions and a plan or scheme for a totally different system of production and distribution, coupled with a belief that capitalism is bringing about its own destruction. According to this sanguine pessimism, when capitalism collapses the working class will build the new social order upon the ruins of the old.

Socialists of the Marxian, or “scientific,” School have usually refrained from depicting with any detail their vision of the New Jerusalem, but it may be inferred from their most authoritative writings that most of them have in mind a fully democratic organization of workers in all countries, owning and operating the means of production and distributing the product in some equitable way—following, as closely as possible, the classical formula: “From everyone according to his ability, to everyone according to his needs.”

Realizing the impossibility of inaugurating the ideal order immediately after the disorder of the social revolution, socialists in recent years have made much of the transition period or internmediate stage foreshadowed by Marx and Engels, during which a “determined minority” should control the emancipated wage-slaves and guide them toward the promised land. In this time of trial and probation the leaders, standing in the place of the old bourgeois state and acting in the interests of the proletariat, should have large control; there should be perfect discipline and subordination until, after a time, the state should “die out” or “wither away,” and the proletarian democracy, come to man’s estate, should manage its own affairs. This, of course, is the dictatorship of the proletariat or, as in Russia to-day, the dictatorship of the small band of prophets and evangelists who control the Communist party.

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In view of such ideals and prophecies and in the light of what has happened in Russia, it is interesting to read the criticism and counter-forecast of the German economist Schäffle, written in 1884 and later published in English as “The Impossibility of Social Democracy” (1892). Trying to visualize in some detail the vague outlines of social democracy, Schäffle saw that it would fail grievously on the side of production because of its impracticable ideals of distribution, and that there would be no guarantee against paralysis of trade, exploitation, the suppression of personal freedom, or other acts of tyranny by the controlling powers. On the question of production in general he said:

Collective production on a democratic basis is impossible. On a basis of authority it is possible, and even in part actually existing, but as such it is non-democratic, and has no charms for the proletariat.

Schäffle's forecast as to the relation of the peasant to socialism has been strikingly fulfilled in Russia. He said:

Collective production in agriculture, however unproductive, and therefore unadvisable, would be in the presence of any authoritative organization not inconceivable. But under a democratic system of organization, it would be quite inconceivable. . . . But the peasant will hold his own, and in face of the anti-collectivist proclivities of his sturdy brain, and the force of his red-coat sons, social democracy will inevitably fall to pieces at last, even though it start with the most successful revolution ever achieved.

Equal distribution, or distribution according to needs, Schäffle held, would be quite impracticable, without compulsion and, if enforced, would cause endless strife and hopeless confusion, by destroying the incentives to individual effort and by thus breaking the mainspring of productive activity. To be in any measure successful the social democracy must encourage creative ideas and adequately recognize and reward aristocracy of merit—but this it will not do. Yet without such reward and retribution, not only will the Socialist promises of fabulous production and universal prosperity remain unfilled, but the social democracy will not even distantly approach in efficiency the capitalistic system of today.

On the subject of exploitation, which to the Socialist is the most damning feature of capitalism, Schäffle’s criticism is still more pertinent and prophetic:

Collectivism would open a far wider field for exploitation than any hitherto known system of production, for communism is a thorough-going and gigantic system of appropriation of the increment. . . . The private capitalist, of course, could no longer exploit the wage-laborer, since all private capital would be over and done with. But laborer could very readily exploit laborer, the administrators could exploit those under them, the lazy could exploit the industrious, the impudent their more modest fellow-workers, and the demagogue those who opposed him. Under such a system above all others it would be impossible to set any limits to this. . . Things might reach such a pitch that Marx's vampire, “the Capitalist,” would show up as a highly respectable figure compared with the Social Democratic parasites, hoodwinkers of the people, a majority of idlers and sluggards. The state would be the arch-vampire.

But Socialists have always turned a deaf ear to these and similar criticisms and warnings - offered as they say, by parasitic economists, unbelieving professors of the "dismal science" - and they have gone their own way, hoping for the breakdown of capitalism and working toward that end. Desiring and ideal distribution, they have been willing to destroy the present system of production, by which hundreds of millions of people are fed, clothed and sheltered at a standard of comfort unknown to any previous age or to non-capitalist countries of the present day. They have no realized, perhaps, that before the chaos of revolution could pass and the new order could be established, millions of people would die of starvation; and that, if the new experiment proved a failure, as Bertrand Russell puts it, "civilization might go under for a thousand years."

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