94. Defects of socialist production 1 The three foregoing selections indicate that socialism is a false Further obdoctrine because based upon mistaken premises. Those who object jections to

socialism. to socialism attack the doctrine from still another angle, i.e. they point out the defects of the economic organization which socialism plans to establish. Of the numerous objections to the industrial organization of a socialist state, an important one is that socialism could not build up or maintain an effective system of production. The failure of bolshevism in Russia threw light on the nature of socialist production, and lent weight to theoretical arguments which have long been urged against socialism. The following extract from the works of Dr. A. Schaeffle constitutes a typical example of the objections which for more than a half century have been brought against socialism as a method of production:

In the third place, social democracy [socialism] promises Socialism an impossibility in undertaking, without danger to the efficiency of could not

unify and production, to unite all branches of it, and in each branch all the coördinate separate firms and business-companies into one single body with all of the

productive uniform labor-credit and uniform estimation of labor-time. Herein forces of

. it goes upon the supposition that the whole tendency of production a nation. is towards business on a large scale with local self-complete branches on factory lines. Yet this is a most arbitrary assumption. Even in trade there will always remain over a mass of small scattered pursuits that entirely escape control.

In agriculture the large self-complete factory system is excluded The case of by the nature of the case. It well be that in the agriculture

agriculture may of the future there will be more and more introduction of collective cial obstacles administration for purposes of traction, the in-coming and out-going

to socialism. of produce, and for irrigation and draining, for the common use of machinery, and for operation of loading and despatch. But farming on a large scale . . . is not possible as a universal system; . agriculture, unlike other industries, tends in the direction of small or moderately large concerns. . . And how in any case could it be possible without any authoritative organ of control or regulation

offers spe

1 From A. Schaeffle, The Impossibility of Social Democracy. Swan, Sonnenschein & Co., London, 1892; pp. 69–74.

to draw all the varied and scattered branches of agricultural labor into one simple homogeneous system, and to reduce all labor to terms of average social labor-time. ... Social democracy will inevitably fall to pieces at last, though it start with the most successful revolution ever achieved.

Social democracy, in the fourth place, promises to the industrial proletariat a fabulous increase in the net result of dividends of the national revenue, and a general rise of labor-returns all round. This increased productivity of industry would perhaps be conceivable if a firm administration could be set over the collective production, and if it were also possible to inspire all the producers with the highest interest alike in diminishing the cost, and in increasing the productiveness of labor. But social democracy as such refuses to vest the necessary authority in the administration, and does not know how to introduce an adequate system of rewards and punishments for the group as a whole, and for the individuals in each productive group, however necessary a condition this may be of a really high level of production. For otherwise, of course, there would be no freedom and no equality.

Therefore, on the side of productivity again, all these delusive representations as to the capacity and possibility of democratic collective production are groundless. Without giving both every employer and everyone employed the highest individual interest in the work, and involving them in profits or losses as the case may be, both ideal and material, it would be utterly impossible to attain even such a measure of productivity for the national labor as the capitalistic system manages to extract from capital profit, even in the face of risk, and with varying scales of remuneration. The introduction of even stronger and more effective guarantees of universal thrift and efficiency in a partially collective system may at first sight appear to be not impossible. . . . But this result is impossible if the only means of bringing it about is to be resolutely rejected and denied, namely, the free and ungrudging assignment of a larger proportion of material and ideal good to the real aristocracy of merit. Without a sufficiently strong and attractive reward for individual or corporate preëminence, without strongly deterrent drawbacks and compensatory obligation for bad and unproductive

The reason for this.

.

work, a collective system of production is inconceivable, or at least any system that would even distantly approach in efficiency the capitalistic system of to-day. .

So long as men are not incipient angels — and that will be for a Conclusion. good while yet democratic collective production can never make good its promises, because it will not tolerate the methods of reward and punishment for the achievements of individuals and of groups, which under its system would need to be specially and peculiarly strong.

Another objection to the program of socialists is that the socialist A further theory of distribution is defective. Not only would socialism find objection to

socialism. it difficult or impossible to maintain effective production, but socialism has been unable to demonstrate that it would be able to distribute wealth in accordance with the principles of both justice and economy. In the following selection, Professor Ely recapitulates some of the chief objections to socialism as a scheme of distribution:

We have already learned that socialists wish to secure justice in Equality a distribution, but that they have not been able to agree upon a

fundamental

principle in standard of distributive justice, although they now generally seem the socialist disposed to regard equality in distribution as desirable.

theory of

distribution. Equality is unquestionably the simplest and easiest solution of the problem of distribution under socialism; and it is frequently argued that it meets all the requirements of distributive justice, because it is held that, essentially, one man has rights equal to those which any other enjoys. Socialism compels us to agree upon a standard of distributive Some dif

ficulties of justice which would be generally acceptable, and which would enlist

the socialist the services of the most gifted and talented members of the commu- theory of

distribution. nity. If we depart from the principle of equality, it is difficult in the extreme to establish any standard in accordance with fixed principles, calculated to settle controversy. Let us suppose we decide to distribute material goods in accordance with merit or service rendered.

i From Richard T. Ely, Socialism and Social Reform. T. Y. Crowell & Co., New York, 1895; pp. 233-237.

Examples

How shall we decide upon the value of different services when compared with one another? That distribution which may be called ideal is one that leads to the maximum satisfaction of wants, that is, distribution in accordance with needs. This means equal distribution among equals, but unequal distribution among those who are unequal; and, as a matter of fact, inequalities among men, in capacity and requirements, are immense.

It is desirable to satisfy the most intense wants first, and then the less intense, and so on down the scale. If incomes were distributed equally, there are men whose wants are so limited that they would have more than enough for the satisfaction of every need, while others would be deprived of the means for the satisfaction of genuine and pressing wants. One person has no special intellectual gifts, and can soon acquire all the education which will be beneficial to him. Another has great gifts which fit him to become a painter, a musician, or an original scholar. It is to the interest of society that the faculties of such a one should be fully developed, and that for their development, the tools, implements, and opportunities, for the exercise of the talent, should be afforded. . . . Such a person can use advantageously a far larger income than the average mechanic or artisan.

But how can we approximate this distribution under socialism? How can we reach agreement in regard to needs? Each one may appreciate his own needs sufficiently, but will he appreciate the needs of others, especially of those who are his natural superiors, and who require ten times as much as he does? Will the ordinary farmer or industrial toiler cheerfully agree to the proposition that some one else needs ten times as much as he does, in order to give equal satisfaction of wants? Unless such is the case, we shall have dissatisfaction and discontent, likely to impair the usefulness of socialism.

And this is not all. While it may be difficult for us to come to an agreement in regard to the differences in the value of services rendered by various members of the community, a little careful observation shows us that the difference, after all, is vast. ... We may take a single industrial establishment and we shall find that, while under one man it thrives, under another it languishes. The question of success is dependent, above everything else, upon right leadership. Now those who have superior gifts and capacities are generally well

Difficulty of distribution according to needs.

Some further considerations.

aware of their superiority. They know that they render more valuable services than others; and if we take men as they are now, or as they are likely to be for a long time, we have every reason to believe that an assignment of merely equal income would not enlist in socialistic production the most capable members of the community, in such a manner that they would give their best energies to the socialistic state; but unless we could secure from the most talented members of the community willing service, socialism would inevitably prove a failure. ... It is much to be feared that men cannot be socialized to that extent that they will generally accept the principle of equal reward for their services, even could it be shown that it were desirable. And it is impossible to show this, for quite the contrary is true.

All this brings us to the observation that there is great danger Conclusion. that, under socialism, the true requirements of those engaged in the higher pursuits would be under-estimated, and that the importance of those occupations which contribute most to the advancement of civilization would fail to secure adequate appreciation. The extent of natural inequalities, and the differences in the requirements of men, are not understood by the masses of mankind; and it is extremely difficult, if not impossible, to make them understand those inequalities and differences. This being the case, we have every reason to apprehend that, under socialism, there would be inadequate provision by the masses for those who carry forward the most important work; that is to say, those whose products are immaterial, ministering to the higher parts of our nature. If this is so, the result of socialism would be a non-progressive society, and in consequence all would finally suffer, because, under a satisfactory social organization, every class will sooner or later share, to a certain extent, in the advantages resulting from progress in science, art, letters, religion. ...

1

96. Socialism not necessary to industrial reform The objections to socialism are of three types. In the first place, The objecsocialist theory is based upon a fundamental error; in the second tions to