Bernstein and the Marxism of the Second International - ' S O C I A L C A P I T A L '
Bernstein and the Marxism of the Second International
The insistence with which I have underlined the limits of the theoretical comprehension of Bernstein and the Marxism of the Second International should not allow us to forget, however, that these limits, and the regression in relation to Marx typical of so much of late nineteenth-century Marxism, only acquired their decisive importance in the context and under the impact of a new and complex historical situation, in which a series of phenomena -- occasionally anticipated by Marx, but only now macroscopically developed -- fundamentally transformed the traditional features of capitalist society.
The period of the transition of capitalism to the monopoly phase marked a colossal leap forward in the process of socialization of production, introducing the great modern 'masses' into production and social life, where formerly they were dispersed in occupations surviving from previous modes of production. This 'socialization ' process, accelerated by the formation of 'joint-stock companies', meant not only an enormous growth in the scale of production and enterprise which could not have been achieved with individual capitals; it also meant the birth of the modern so-called 'social enterprise', insofar as it gave rise to the complex phenomenon of the dissolution of private capitalist industry on the basis of the capitalist system itself.
The capital, which in itself rests on a social mode of production and presupposes a social concentration of means of production and labour-power, is
here [in the case of the joint-stock company] directly endowed with the form of social capital (capital of directly associated individuals) as distinct from private capital, and its undertakings assume the form of social undertakings as distinct from private undertakings. It is the abolition of capital as private property within the framework of capitalist production itself.[121]
The main consequences of this phenomenon (beginning with the 'separation of ownership and control') were already grasped in their essential features by Marx himself, even though they were still in their initial phase when Capital was written. The development of social capital, he wrote, implies the
transformation of the actually functioning capitalist into a mere manager, administrator of other people's capital, and of the owner of capital into a mere owner, a mere money-capitalist. Even when the dividends which they receive include the interest and the profit of enterprise, i.e. the total profit . . . this total profit is henceforth received only in the form of interest, i.e. as mere compensation for owning capital that now is entirely divorced from the function in the actual process of production, just as . . . the manager is divorced from ownership of capital.[122]
This in turn had two effects, which Marx did not fail to point out. Firstly, big capital exerted an action of 'peaceful expropriation' towards small capitals, whether already formed or in the process of formation, through the credit system and in particular through the joint-stock company. This created a situation in which the great majority of shareholders were deprived of control over their property in favour of a small minority of owners who came to wield a power that went far beyond the limits of their own actual property. Secondly, the progressive depersonalization of property, brought about by the development of the great modern 'limited liability' company, implied the emergence as a subject of the object of property itself, i.e. the complete emancipation of property from man himself, with the result that the firm seemed to acquire an independent life of its own as though it were nobody's property, transforming itself into an entity in itself with similar characteristics to those of the State.
This spread of joint-stock companies, of course, as Marx pointed out, encouraged speculation and adventurers, 'a new financial aristocracy, a new variety of parasites in the shape of promoters, speculators and simply nominal directors; a whole system of swindling and cheating by means of
corporation promotion, stock issuance, and stock speculation'. And yet this process was the chief support for Bernstein's thesis of a progressive 'democratization of capitalism'. In his view, modern industrial concentration is not accompanied, as Marx claimed, by a similar concentration of property ; rather it leads, through joint-stock companies, to a diffusion of property, a multiplication of the number of capitalists, a growth in the number of those who share in the benefits of the modern 'social enterprise'. Since the number of capitalists increases rather than diminishes, Marx's discussion of concentration and accumulation of wealth at one pole of society is contradicted and invalidated.
This theme has, of course, been taken up again relatively recently, thanks to two American neo-liberals, Berle and Means.[123] Their thesis is that the large firms represent only a technical-industrial concentration, which does not imply a concentration of property, but rather its diffusion and decentralization. Hence joint-stock companies or corporations signify the 'end of capitalism', provided that (a) control of these 'quasi-public' enterprises is entrusted to disinterested technicians (Berle and Means look forward to the appearance of an 'impartial technocracy'); and (b) that share ownership is progressively extended to all layers of society.
However, this is not the place to do more than note this development. To return to Bernstein, the scientific ingenuity behind his thesis of the multiplication of capitalists is revealed by two criticisms levelled at him by Rosa Luxemburg. Firstly, 'by "capitalist" Bernstein does not mean a category of production but the right to property. To him, "capitalist" is not an economic but a fiscal unit. And "capital" for him is not a factor of production but simply a certain quantity of money.' Hence, she concludes, 'he moves the question of socialism from the domain of production into the domain of relations of fortune . . . between rich and poor'. Secondly, Bernstein's thesis of the progressive dissolution of big capital into myriads of small capitals, and more generally his propensity to emphasize counter- tendencies to concentration, besides being based on utopian fantasy is essentially reactionary. If true, it would lead to 'an arrested development of the capitalist system of production', its regression or involution to a pre-natal phase.[124]
The same could be said for Bernstein's arguments about the persistence and increase in the number of small and medium enterprises. The
'almost unshakeable phalanx' of medium-sized firms is a sign for him that the development of big industry does not resolve itself into giant concentrations as Marx had prophesied. Schumpeter's judgement is conclusive enough on this point: 'Bernstein was an admirable man but he was no profound thinker and especially no theorist. In some points, especially as regards . . . the concentration of economic power, his argument was distinctly shallow.'[125] Rosa Luxemburg's comment, however, is also pertinent: 'To see the progressive disappearance of the middle-sized firms as a necessary result of the development of large industry is to misunderstand sadly the nature of this process.' In relation to big industry the small firms 'initiate new methods of production in well-established branches of industry; they are also instrumental in the creation of new branches of production not yet exploited by big capital. . . . The struggle of the middle-sized enterprise against big capital cannot be conceived as a regularly proceeding battle in which the troops of the weaker side continue to melt away directly and quantitatively. It should be regarded as a periodic mowing down of the small enterprises, which rapidly grow up again, only to be mowed down once more by big industry.' This process does not necessarily mean 'an absolute diminution in the number of middle-sized enterprises . . . [but rather], first a progressive increase in the minimum amount of capital necessary for the functioning of enterprises in the older branches of production; second, the constant diminution of the interval of time during which the small capitalists conserve the opportunity to exploit the new branches of production'.[126]
Besides, Bernstein's 'ingenuous' marshalling of statistical material to support his argument, both as regards the diffusion of small and medium firms and variations in the flow of income, is exhaustively documented in Kautsky's reply to Bernstein. (Little reference has been made here to this book, though -- especially in the central chapters -- it is one of Kautsky's best works, along with the Agrarfrage.) As for Bernstein's argument in support of the 'new middle classes' thesis, the best answer is to be found in Kautsky's book and in Hilferding's Finance Capital. Here we can only touch on the problem, important though it is in the period of imperialism, developing as a result of the abnormal growth of the distribution sector provoked by monopoly, besides the mushrooming of the bureaucratic military apparatus characteristic of the modern State.
Here it only remains to turn to a consideration of the so-called theory of the 'absolute immiseration' or long-term impoverishment of the masses, which, since Bernstein, has been often attributed to Marx by a variety of commentators: notably, until a few years ago, by the most primitive exponents of 'dialectical materialism' in the Soviet Union.
Not only is such a theory absent in Marx, but it would have been impossible for him to have produced it, as is proved simply by one thing (among others): that Marx introduces an explicitly historical-moral component into the determination of the 'price of labour' (thus distinguishing himself from Ricardo). In determining the 'sum of means of subsistence' necessary for the maintenance of a worker 'in his normal state as a labouring individual', it is not enough, Marx argues, to consider only 'natural wants such as food, clothing, fuel and housing, 'which "vary according to the climatic and other physical conditions of his country".' It is also necessary to consider that the 'number and extent of so-called necessary wants, as also the modes of satisfying them, are themselves the product of historical development and depend therefore to a great extent on the degree of civilization of a country, more particularly on the conditions under which, and consequently on the habits and degree of comfort in which, the class of free labourers has been formed'.[127] This historically relative character of the determination of the 'price of labour' is explicitly stated: 'In contradistinction . . . to the case of other commodities, there enters into the determination of the value of labour-power a historical and moral element.' If we reflect on this we can understand that for Marx, above all others, it is impossible in principle to speak of a long-term immiseration of the workers, a worsening in absolute terms of their living standards in the centuries of capitalist development.
It is true that in the Manifesto and many other writings, Marx refers to a pauperization of the working class, its growing dependence for its subsistence on the will of others, that is of the capitalists; he writes of the 'immiseration', 'degeneration' and 'enslavement' of the workers and refers to the growing precariousness and insecurity of their labour: 'To the extent that capital is accumulated, the situation of the worker whatever his retribution, high or low, can only worsen' (my italics). But this conviction, to which Marx remained faithful all his life, can only mean one thing: capitalist development, contrary to illusions of 'betterment' nourished by reformists, is not destined to transform everyone into capitalists and property owners; nor will it abolish, by gradual reforms,
the basic social inequality between capital and labour but quite to the contrary tends constantly to reproduce it, and to reproduce it in an aggravated form. This is a theory, in other words, of relative immiseration or an increase in the imbalance or inequality of the workers' conditions in relation to the conditions of the class that owns the means of production.[128]
As Marx wrote in 1849:
A noticeable increase in wages presupposes a rapid growth of productive capital . . . [which] brings about an equally rapid growth of wealth, luxury, social wants, social enjoyments. Thus, although the enjoyments of the worker have risen, the social satisfaction that they give has fallen in comparison with the increased enjoyments of the capitalist, which are inaccessible to the worker in comparison with the state of development of society in general. Our desires and pleasures spring from society; we measure them, therefore, by society and not by the objects that serve for their satisfaction, because they are of a social nature, they are of a relative nature.[129]
Hence not only does Marx's theory not exclude increases in real wages, but this increase, whatever Bernstein and Joan Robinson may think, proves absolutely nothing which contradicts Marx's thought. Indeed, the theory of increasing exploitation holds good even in the case where wages have risen. And not only because the increase of the workers' enjoyment does not exclude that the 'social satisfaction' he obtains from it diminishes proportionately, but because we measure our needs and enjoyments not only by 'the material means for their satisfaction', but according to a social scale or social 'relation'. 'Just as little as better clothing, food and treatment and a larger peculium, do away with the exploitation of a slave, so little do they set aside that of the wage-worker."[130] This is, in fact, the decisive point in the entire Marxist theory of exploitation -- a point on which our own reading of the theory of value as a theory of alienation can help to throw light. It is the dependence which ties the workers to the will of the capitalist class, and not their absolute poverty, that represents 'the differentia specifca of capitalist production'.[131] In other words, capitalist appropriation is not exclusively or primarily an appropriation of things, but rather an appropriation of subjectivity, of working energy itself, of the physical and intellectual powers of man.
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