Front Page Titles (by Subject) 3: Class War - Socialism: An Economic and Sociological Analysis
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3: Class War - Ludwig von Mises, Socialism: An Economic and Sociological Analysis 
Socialism: An Economic and Sociological Analysis, trans. J. Kahane, Foreword by F.A. Hayek (Indianapolis: Liberty Fund, 1981).
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The settlement of particular conflicts between estates could not remove the distinction between estates, as long as the idea of dividing society in this way remained. Even when the oppressed shook off the yoke, all differences in status were not abolished. Liberalism alone could overcome the fundamental conflict of estates. It did so by abolishing slavery—on the ground that free labour was more productive than unfree—and by proclaiming freedom of movement and choice of occupation as the fundamental desiderata of a rational policy. Nothing exposes more clearly the inability of anti-liberalism to grasp the historical significance of Liberalism than its attempt to represent this achievement as the product of special group “interests.”
In the struggle between estates all members of an estate stand together because they have a common aim. However much their interests otherwise diverge they meet on this one ground. They want a better legal position for their estate. Economic advantages usually accompany this, for the reason why legal differences are maintained between estates is precisely that they confer economic advantages on some to the economic prejudice of others.
But the “class” of the theory of the class-war is a different matter altogether. The theory of irreconcilable class conflict is illogical when it stops short at dividing society into three or four large classes. Carried to its logical conclusions, the theory would have to go on dissolving society into groups of interests till it reached groups whose members fulfilled precisely the same function. It is not enough to separate owners into landowners and capitalists. The differentiation must proceed until it reaches such groups as cotton spinners who manufacture the same count of yarn, or the manufacturers of black kid leather, or the brewers of light beer. Such groups have, it is true, one common interest as against the mass of others: they are vitally interested in the favourable sale of their products. But this common interest is narrowly limited. In a free economy a single branch of production cannot in the long run obtain more than an average profit and cannot, on the other hand, work at a loss. The common interest of members of a trade does not extend, therefore, beyond the trend of the market within a limited space of time. For the rest, competition, not immediate solidarity of interest, operates between them. This competition is suspended by special interests only when economic liberty is limited in some way. But if the scheme is to retain its usefulness for the critique of the theory of the solidarity of class interests, evidence must be produced that this competition is suspended under a free economy. The class struggle theory cannot be proved to be sound by a reference to the common interests of landowners as being in conflict with the urban population on tariff policy, or to the conflict between landowners and town dwellers on the matter of political government. Liberal theory does not deny that state interference in trade creates special interests, nor that by this means particular groups can extract privileges for themselves. It merely says that such special favours, when they are exceptional privileges of small groups, lead to violent political conflict, to revolts of the non-privileged many against the privileged few, which by constantly disturbing the peace, hold up social development. It explains further that where these special privileges constitute a general rule, they injure everyone, for they take on the one hand what they give on the other, and leave behind, as a permanent result, only a general decline in the productivity of labour.
In the long run the community of interests among the members of a group and the contrast between their interests and the interests of other groups arise always from limitations of the right of ownership, of the freedom of trade, of the choice of occupation. Only in the short run can they arise from the condition of the market as such. But if among the groups whose members occupy the same position in the economy there is no community of interest which would place them in opposition to all other groups, there can certainly be no such community within the larger groups whose members occupy not the same but merely a similar position. If there is no community of special interests between the cotton-spinners among themselves, neither is there any within the cotton industry or between the spinners and the machine makers. Between spinner and weaver, machine maker and machine user, the direct contrast of interests is as marked as it can possibly be. A community of interests exists only where competition is ruled out, for example, between the owners of land of a certain quality or situation.
The theory that the population is divided into three or four large groups, each with a common interest, errs in regarding land owners as a class with unitary interests. No special common interest unites the owners of arable land, of forests, of vineyards, of mines, or of urban real estate, unless it be that they defend the right of private property in land. But that is not the special interest of the owners. Whoever has recognized the significance of private ownership in the means of production must, whether he possesses property or not, advocate the principle in his own as well as the owner’s interest. Landowners have genuine special interests only where the liberty of acquiring property and of trading has been limited.
There are no common interests among labourers either. Homogeneous Labour is as non-existent as the universal worker. The work of the spinner is different from the work of the miner and the work of the doctor. The theorists of Socialism and of irreconcilable class conflict talk as though there was some kind of abstract labour which everyone was qualified to perform and as though skilled labour hardly came into the question. In reality no such “absolute” labour exists. Nor is unskilled labour homogeneous. A scavenger is different from a porter. Moreover the role of unskilled labour is much smaller, considered purely numerically, than orthodox class theory assumes.
In deducing the laws of the theory of imputation we are justified in speaking simply of “land” and “labour.” For from this point all goods of the higher order are significant only as economic objects. The reason for simplifying the infinite variety of goods of higher orders into a few large groups is convenience in working out the theory which is of course directed towards a definite aim. It is often complained that economic theory works with abstractions; but precisely those who make this complaint themselves forget that the concepts “labour” and “worker,” “capital” and “capitalist,” and so on, are abstract; and do not hesitate to transplant the “worker” of theoretical Economics into a picture of what is supposed to be actual social life.
The members of a class are competitors. If the number of workers diminishes, and if the marginal productivity of labour grows accordingly, wages rise, and with them the income and standard of living of the worker. Trade unions cannot alter this. When they, who were supposed to be called into being to fight the entrepreneurs, close their membership like guilds, they implicitly recognize the fact.
Competition operates among the workers when they compete for higher positions and for promotion to higher ranks. Members of other classes can afford to remain indifferent as to the precise persons who are numbered among the relative minority which rises from the lower to the higher strata, so long as these are the most capable. But for the workers themselves this is an important matter. Each is in competition with the others. Of course each is interested to see that every other foreman’s job shall be occupied by the most suitable man and the best. But each is anxious that that one job which comes within his reach shall fall to him, even though he is not the most suitable man for the job; and the advantage to him outweighs the fraction of the general disadvantages which may eventually also come his way.
The theory of the solidarity of the interests of all members of society is the only theory which shows how society is possible; and if it is dropped, the social unity dissolves not only into classes, but into individuals confronting each other as opponents. Conflict between individual interests is overcome in society but not in the class. Society knows no components other than individuals. The class united by a community of special interests does not exist; it is the invention of a theory incompletely articulated. The more complicated society is, and the further differentiation has progressed within it, so much the more numerous are the groups of persons similarly placed within the social organism; though necessarily, the number of members in each group diminishes as the number of groups increase. The fact that the members of each group have certain immediate interest in common does not, of itself, create universal equality of interests between them. The equality of position makes them competitors, not people with common aspirations. Nor can any absolute community of interests arise from the incomplete similarity between the positions of allied groups. As far as their positions are similar, competition will operate between them.
The interests of all cotton mill owners may run parallel in certain directions, but in so far as this is the case, the more are they competitors among themselves. In other respects only those owners of mills who produce the same count of yarn will be in exactly parallel positions. Here again to this extent they are in competition with each other. In other respects however, the common interests are similar over a much wider field; they may comprise all workers in the cotton industry, then, again, all cotton producers, including planters and workers, or further, all industrialists of any kind, etc.: the grouping varies perpetually according to the aim and interests to be pursued. But complete similarity there is rare, and where it does exist, it leads not only to common interests vis-a-vis third parties but, simultaneously, to competition between the parties within the group.
A theory which made all social development proceed from class struggles would have to show that the position of each individual in the social organism was unequivocally determined by his class position, that is, by his membership of a certain class and the relation of this class to other classes. The fact that in all political struggles certain social groups are in conflict with each other is by no means a proof of this theory. To be correct it must be capable of demonstrating that the grouping is necessarily directed into a certain path and cannot be influenced by ideologies which are independent of the class position; that the way in which the smaller groups combine to form larger groups, and these again form classes which divide the whole of society, is not a way of compromises and alliances formed for temporary cooperation but results from facts created by social necessities, from an unequivocal community of interests.
Let us consider, for example, the different elements of which an Agrarian Party is composed. In Austria, the wine-growers, the cereal-growers, and the stock-breeders unite to form a common party. But it certainly cannot be asserted that similarity of interest has brought them together. For each of these three groups has different interests. The fusion with a view to securing certain protective policies is a compromise between conflicting interests. Such a compromise is, however, only possible on the basis of an ideology that goes beyond the interests of the class. The class interest of each of these three groups is opposed to that of the other groups. They can meet only by setting certain special interests wholly or partly aside, though they do this so as to fight all the more effectively for other special interests.
It is the same with the workers, who are contrasted with the owners of the means of production. The special interests of the separate workers’ groups are also not unitary. They have quite different interests according to the knowledge and skill of their members. It is certaintly not in virtue of its class position that the proletariat is that homogeneous class the socialist parties imagine it to be. Only adherence to the socialist ideology, which obliges every individual and every group to give up his or its special interests, brings it about that it is so. The daily work of the trade unions consists precisely in effecting compromises between these conflicts of interest.69
Coalitions and alliances between group interests, other than existing coalitions and alliances, are always possible. And those which actually exist depend on the ideology, not on the class position, of the groups. Political aims, not identity of interests, is what determines the coherence of the group. The community of special interests is always restricted to a narrow field and is obliterated or counter-vailed by the conflict of other special interests, unless a certain ideology makes the community of interests seem stronger than the conflict of interests.
The community of class interests does not exist independently of class consciousness, and class consciousness is not merely additional to a community of special interests; it creates such a community. The proletarians are not a special group within the framework of modern society, whose attitude is unequivocally determined by their class position. Individuals are brought together for common political action by the socialist ideology; the unity of the proletariat comes, not from its class position, but from the ideology of the class-war. As a class the proletariat does not exist before Socialism: the socialist idea first created it by combining certain individuals to attain a certain political end. There is nothing in Socialism which makes it especially appropriate to forwarding the real interests of the proletarian classes.
In principle class ideology is no different from national ideology. In fact there is no contrast between the interests of particular nations and races. It is national ideology which first creates the belief in special interests and turns nations into special groups which fight each other. Nationalist ideology divides society vertically; the socialist ideology divides society horizontally. In this sense the two are mutually exclusive. Sometimes the one has the upper hand, sometimes the other. In Germany in 1914 the nationalist ideology shouldered the socialist ideology into the background—and suddenly there was a nationalist united front. In 1918 the socialist triumphed over the nationalist.
In a free society no classes are separated by irreconcilably contrasted interests. Society is the solidarity of interests. The union of special groups has always as its safe aim the destruction of this cohesion. Its aim is antisocial. The special community of proletarian interests extends only so far as they pursue one aim—to break up society. It is the same with the special community of interests which is supposed to exist for a whole nation.
Because Marxian theory does not define its notion of class more closely, people have been able to use it for the expression of the most diverse ideas. When they define the decisive conflict as that between owners and nonowners, or between urban and rural interests, or between bourgeois, peasant, and worker; when they speak of the interests of “armament capital,” of “alcohol capital” of “finance capital”70 when at one moment they talk about the Glorious International and in the next breath explain that Imperialism is due to the conflicts of capital, it is easy to see that these are the merest catchwords of the demagogue, devoid of any real sociological interest. Thus in its most fundamental contentions Marxism has never risen above the level of a doctrine for the soap box orator.71
[69. ]Even the Communist Manifesto has to admit: “The organization of the proletarians into a class, and thus into a political party, is ever and again broken up by competition among the workers themselves.” (Marx and Engels: Das Kommunistische Manifest, p. 30). See also Marx, Das Elend der Philosophie, 8th ed. (Stuttgart, 1920), p. 161. Publisher’s Note: pp. 165-166 in the English edition of The Poverty of Philosophy.
[70. ]At which point people quite illogically overlook the fact that the wage-earner too is interested in the prosperity of the branch of production and of the plant in which he is engaged.
[71. ]Even Cunow, Die Marxsche Geschichts-, Gesellschafis-und Staatstheorie, Vol. II, p. 53, in his uncritical Marx apology has to admit that Marx and Engels in their political writings speak not only of the three main classes but differentiate between a whole series of minor and side classes.