The “Crime” of the
Capitalists
“The ‘Crime’ of the Capitalists” was posthumously published in Ideas (Spring-Summer 1969). It is a reworking of an article Chodorov published in analysis (November 1945) under the title “Why We Have Socialism.”
More than a century ago Karl Marx prophesied the collapse of capitalism and the advent of socialism. In the stars of history were written two theories which foretold the inevitable. These theories he called the “concentration of capital” and “increasing misery.”
The theories and the prophecy are worked out in great detail over hundreds of pages of fine print, but briefly they come to this: private property contains within itself the seed of its own destruction; this is its exploitative character. The laborer is robbed of his product by way of the surplus value inherent in capitalism, and the capitalist cannot consume all that he confiscates; hence a burdensome abundance accumulates. There is nothing the capitalist can do about it, for the surplus comes from the very nature of private ownership. When the owners try to unload in the market, domestic or foreign, a competitive contest takes place. The large capitalists eliminate the smaller. Those who have much have more thrust upon them. This centralization of capital makes capitalism in time a top-heavy structure, ready to topple over at the first good push. Meanwhile, the lot of the workers becomes progressively worse; their desperation drives them eventually to revolt. The revolt must prosper because this vast army, enlarged by demotions from the capitalist class, is “disciplined, united, organized, by the very mechanism of the process of capitalist production itself.” At the right moment—Marx expected it in his lifetime— “the knell of capitalist property sounds. The expropriators are expropriated.”
A century should be time enough to test these theories. And the evidence of this period, even as a number of his followers admit, hardly supports them. Instead of an increasing concentration of capital, the figures show a constantly expanding class of capital owners; instead of intensified misery, the lot of the proletariat has vastly improved, even if the general wage level seems out of kilter with the general increase in production. These “scientific” theories, like others by which Marx hoped to lift socialism out of dreamy utopianism, have been knocked awry by facts, and his prophecy, based on these theories, seems to have been the vision of an armchair revolutionist.
And yet, it happens that Marx did hit upon an eventuality. Private capitalism is indeed slipping, while socialism is stepping along.
At this point, we ought to attempt, at least, a formulation of a general definition of socialism. The task is complicated by the lack of agreement among socialists themselves as to what the term means. To some it is a goal, to others it is a system of revolutionary tactics; it is an end in itself, it is a means toward another end, and on what that ultimate end may be there are opinions; in truth, it must be said that to the vast majority of its devotees socialism is the undefined “good society” of which mankind has dreamed since the beginning of time. Since no all-inclusive definition is possible, the best that can be done is to find among the various shadings of doctrine some common thread of thought. And that is: the public ownership and operation of the means of production and exchange. This, of course, will not satisfy all, if any, groups. Some will take umbrage at the word “public” and demand that “social” be substituted; the lack of a social goal in this definition will shock many, though the inclusion of a specific goal would raise a howl of dissension; many socialists demand a limit to public ownership, while others would leave nothing but personal articles in the hands of the individual. However, the common denominator is inclusive enough to make a working definition.
Public ownership of capital, no matter what it may ultimately lead to, comes to state capitalism. Capital is inanimate. Somebody must produce, make use of and look after it. If private persons are prevented by police power from accumulating and employing capital, the job must be undertaken by or under the supervision of political persons, that is, if there is going to be any capital—and that, however one tries to camouflage the fact, is state capitalism. Nor is it anything else if the regime is instituted without the use of prohibitory laws, as when private enterprise is wiped out in a competitive struggle with state-owned capital because it is under the handicap of supporting its competitor with taxes.
Only in Russia, its satellites, and China, now that the German and Italian machines have been smashed, is outright and unequivocal state capitalism a going concern. England is on the way to adopting it; while the present regime proposes to monopolize only certain forms of capital, the question which experience will decide is whether the intrusion of the state into one phase of the economy can stop at that predetermined point. The odds are against it, simply because in a highly specialized economy every industry impinges on many others, and the state must find it necessary to go into businesses related to those already nationalized. Even in America, long a sanctum of free enterprise, state capitalism is proceeding apace. There is no other way to describe federal ownership and operation of vast hydroelectric plants or the government's entry into the housing business or its extensive banking enterprises. In almost every country in the world the state has acquired monopolies of particular forms of capital and the trend is very definitely toward a widening of the practice. So that, if the statement that socialism is with us seems to be hyperbole, it is only so in point of degree; the seed has been planted, the soil is fertile and rapid growth seems inevitable.
But—if Marx's theories have proven to be fallacious—how is it that his prophecies of state capitalism are being fulfilled? Who is to blame? The answer is ironic but undeniable.
Between those who worship at the temple of capitalism and those who, to propitiate the gods of socialism, scorn that edifice, there are points of essential similarity; that is, similarity in essential articles of faith. For instance, a tenet common to both is that only under the aegis of the state is economic betterment to be found. The bitterest hater of socialism is as quick to call on political power to help him out of an economic morass as is the avowed socialist. Those unions which reject communism (for practical discussion, communism must be regarded as a socialistic sect) and those which openly espouse it are both in favor of a partnership with political power; hard-headed businessmen and visionary pink professors join in asking the government to tax and spend the country into prosperity; protectionism, socialized medicine, unemployment insurance, social security, full-employment legislation, farm subsidies, and all manner of political cures for economic ills find support in the opposing camps. The difference between the two simmers down to the question who shall control the power of the state; both are committed to the doctrine of more bread through more police.
Capitalists will demur at this statement and protest that the cardinal prayer in their litany is individualism. Yet when you parse this prayer you find it is only a supplication for privilege. Privilege from whom? The state, the source of all privilege. Privilege for whom? Themselves, of course. Privilege against whom? Those who, deprived of access to the source of power, are put under compulsion to give up part of their production to those who have been favored by the state. Every privilege involves an advantage, and every advantage predicates a disadvantage. Therefore, the individualism about which the going capitalism prates is a decidedly one-sided arrangement. It is quite the opposite of that equality of rights and opportunities which is the keystone of true individualism.
When we consider the history of what is called capitalism we see that its principals never concerned themselves only, or even mainly with private ownership of the means of production and exchange. At the inception of the laissez-faire economy in the eighteenth century, the rising class of entrepreneurs put forth every effort to acquire for themselves a preferred position comparable to that occupied by the nobility; the task of producing goods and services for exchange has always been secondary and unwanted. Slavery, patents, franchises, protective tariffs, cartels, subsidies, land grants—any monopolistic avoidance of the demands and risks of competition has been and is the hope and the goal of the businessman. He is a capitalist only by necessity; his ambition is to be a monopolist. Since every privilege amounts to getting something for nothing, no privilege can be self-enforcing. Taking property always requires force, and legalized force is the most expedient. The sovereignty of the state, backed by general acquiescence, is the source of privilege. It is the gangster's gun made shiny by the law.
The state, however abstract it may seem, is composed of human beings whose motivations are typical of the race. Their only price for granting a privilege is a further increment of power. Patents require a patent office, tariffs call for an extensive customs service, land grants demand a register's office. Every privilege granted by the state enlarges its working force, its power, and its income by way of additional tax levies. Capitalists have rarely objected to all this; the cost of maintaining a bureaucracy is an inconsequential charge against profitable privileges, and is in the main met by taxes on producers anyway.
As it went about peddling privilege for grants of power, the state could not restrict its clientele to a specially selected group; that is, not after constitutionalism effected a diffusion of its strength. Feudalism had kept everything running smoothly by limiting privilege and political power to a well-circumscribed group. When the growing class of industrialists broke through this crust they demanded a share in the political power. Their economic strength made it impossible to hold them in subjection, and by the use of such shibboleths as “no taxation without representation” and “the rights of man” they managed to wangle their way into a partnership with the rulers. There the nouveaux riches held on, emulating their feudal predecessors by using political power to their advantage. They instituted the mercantilist system of creating scarcities so that the worker would have to give up more to them for the needs of life. To the privileges of the feudal landowners were added the privileges of the industrialists. Both classes, knowing how they came by their affluence, were intent on depriving the clamoring crowd of access to that power. But the crowd could not be denied forever, and when at long last it became a participant in power, by way of the vote, it soon learned its economic possibilities.
And so, as the suffrage was extended the state's customers increased in number and ferocity. Privilege was added to privilege with dizzy profligacy; the capacity of production to meet the price was ignored in the wild scramble for something “for free.” Meanwhile, this siphoning of production involved an increasing overhead cost, thus further depleting the economy, while the administrative agency became stronger and bolder by the wealth and power thus put into its hands. It met the disaffection arising from a lowering economy by adding another group to its roster of privilege, another tax levy to its fiscal strength. Just as it relieved “infant industries” of foreign competition with a protective tariff, which added to its coffers, so it provided medical care for the indigent at the price of so-called social-security taxes; it subsidized the railroad magnates and the impoverished farmers with equanimity, and blithely put the costs on production. What else could it do? Nor could it carry out its assignments without an increase in its collecting and dispensing personnel, whose keep must also be provided for by producers.
As I have pointed out on numerous occasions, socialism is the end-product of an economy sucked dry by privilege. It is the political control of an economy so weakened by political intercession that it cannot stand up on its own feet. When the remuneration for productive effort is insufficient to warrant the expenditure, when rent, royalties, subsidies, and doles, to say nothing of the enforcement costs, absorb so much that sustenance becomes precarious and the incentive for capital accumulation disappears, then the state takes over and tries to make a go of it. It is not necessary here to discuss the causes of the periodic paroxysm known as the “depression”; it should be pointed out, however, that during such times the transference of economic power from producer to politician is accelerated, for it is then that the bewildered public is most susceptible to the most impossible promises. Nor need we go into the subject of war to show how this political upheaval gives impetus to the socialistic trend, not only by the new coercive instruments it puts into the hands of the state, but more so by the correlative economic power conferred on the politician; the financing of war through loans, to mention but one instance, creates a privilege class most intimately concerned with the state's power of levying taxes.
Socialism creeps up on society. It need not come by way of revolution, as Marx predicted. The bolsheviks in Russia and the fascists in Italy did take over the economies of their respective countries with a fanfare of arms, but in Germany it was initiated with legality and in England it is going through the parliamentary mill in due order. In America the state is becoming the one and only capitalist quite peacefully, making its way to the seductive strain of “the better life.” And, in those countries where state capitalism became an accomplished fact as well as in those countries where it promises to come into its own, the proletarian revolution was and is absent. A few intellectuals made Russia what it is, while the Nazis and fascists owed their success to the support of middle-class industrialists. In England the privileged classes have taken to the idea of selling out their holdings to the state, and in America it is the so-called capitalist who is to blame for the fulfillment of Marx's prophecies. Beguiled by the state's siren song of special privilege, the capitalists have abandoned capitalism. In doing so they may well have made inevitable that day in the not-so-distant future when their dearly bought privileges will be swept away as the state formally takes the means of production into its own hands. How right Lenin was when he said that the capitalist would sell you the rope with which you intended to hang him if he thought he could make a profit on the sale.
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