The Online Library of Liberty

A project of Liberty Fund, Inc.

• Foreword
• Author’s Preface
• Interventionism
• Introduction
• 1.: The Problem
• 2.: Capitalism Or Market Economy
• 3.: The Socialist Economy
• 4.: The Capitalist State and the Socialist State
• 5.: The Interventionist State
• 6.: The Plea For Moral Reform
• I.: Interference By Restriction
• 1.: The Nature of Restrictive Measures
• 2.: Costs and Benefits of Restrictive Measures
• 3.: The Restrictive Measure As a Privilege
• 4.: Restrictive Measures As Expenditures
• II.: Interference By Price Control
• 1.: The Alternative: Statutory Law Versus Economic Law
• 2.: The Reaction of the Market
• 3.: Minimum Wages and Unemployment
• 4.: The Political Consequences of Unemployment
• III.: Inflation and Credit Expansion
• 1.: Inflation
• 2.: Credit Expansion
• 3.: Foreign Exchange Control
• 4.: The Flight of Capital and the Problem of “hot Money”
• IV.: Confiscation and Subsidies
• 1.: Confiscation
• 2.: The Procurement of Funds For Public Expenditure
• 3.: Unprofitable Public Works and Subsidies
• 4.: “altruistic” Entrepreneurship
• V.: Corporativism and Syndicalism
• 1.: Corporativism
• 2.: Syndicalism
• VI.: War Economy
• 1.: War and the Market Economy
• 2.: Total War and War Socialism
• 3.: Market Economy and National Defense
• VII.: The Economic, Social, and Political Consequences of Interventionism
• 1.: The Economic Consequences
• 2.: Parliamentary Government and Interventionism
• 3.: Freedom and the Economic System
• 4.: The Great Delusion
• 5.: The Source of Hitler’s Success
• VIII.: Conclusions
• Reading References

2.

Syndicalism

The corporative or guild socialist system thus turns out to be syndicalism. The workers engaged in each industry are to receive control of the means of production and are to carry on production on their own account. It is unimportant whether the former entrepreneurs and capitalists are to be given a special position in the new order or not. They can no longer be entrepreneurs and capitalists in the sense in which there are entrepreneurs and capitalists in the market economy. They can only be citizens who enjoy privileges in decisions concerning management and the distribution of income. The social function, however, which they fulfilled in the market economy is taken over by the totality of the corporative. Even if in the corporative only the former entrepreneurs and capitalists had the right to make decisions and if they were to receive the largest share of the income, the system still would be syndicalism. It is not the economic characteristic of syndicalism that every syndicalist receives an equal income, or that he is consulted in questions of business policy; essential is the fact that the individuals and the means of production are rigidly attached to specific lines of production so that no worker and no factor of production is free to move from one line into another. Whether the slogan “the mills for the millers, the printing plants for the printers” is to be interpreted so that the words “millers” and “printers” are also to include the former owners of the mills and printing plants or not, and whether these former entrepreneurs and owners are given a more or less privileged position, does not matter. Decisive is that the market economy, in which the owners of the means of production and the entrepreneurs as well as the workers depend on the demands of the consumers, is being replaced by a system in which the demands of the consumers no longer determine production, but by a system in which only the wishes of the producers prevail. The cook decides what and how much each individual is to eat. Because the cook has the exclusive right to prepare food, if anyone refuses the food he is given, he would starve. Such a system might still have some meaning as long as conditions remain unchanged and as long as the distribution of capital and labor among the different lines of production corresponded to some extent to the conditions of demand. But changes are always taking place. And every change in the conditions renders the system less workable.

The postulate of syndicalism that the ownership of the means of production should be taken over by the workers is but symptomatic of the opinion of the productive process which the workers gain from the narrow perspective of their position. They regard as a permanent institution the shop in which they daily perform the same duties; they fail to realize that economic activity is subject to constant change. They do not know whether the enterprises they are working for are making profits or not. How else could the fact be explained that the employees of railroads operated at a loss demand “the railroads for the railroad employees”? The workers naively believe that only their work produces returns and that the entrepreneurs and capitalists are merely parasites. Psychologically this may explain how the ideas of syndicalism were conceived. But this understanding of the origin of the idea of syndicalism still does not turn the syndicalist program into a workable system.

The syndicalist and the corporative systems are based on the assumption that the state of production which is in effect at a given time will remain unchanged. Only if this assumption were correct would it be possible to do without shifting capital and labor from one industry into another. And to make such changes, decisions must be made by an authority superior to the single corporative and syndicate. No reputable economist therefore has ever attempted to call the syndicalist idea a satisfactory solution of the problem of social cooperation. The revolutionary syndicalism of Sorel* and of the advocates of the action directe have nothing to do with the syndicalist social program. Sorel’s syndicalism was a system of political tactics having as its aim the attainment of socialism.

English guild socialism flourished for a brief period and then disappeared almost completely. Its original proponents themselves abandoned it, obviously because they became aware of its inherent contradictions. The corporative idea today still plays a role of some importance in the writings and in the speeches of politicians, but no nation has attempted to put it into operation. Fascist Italy, which most emphatically extols corporativism, imposes orders of the government upon all economic activity. There is therefore no room left for the existence of autonomous corporatives in “corporative” Italy.

There is a general tendency today to attribute the term “corporative” to certain institutions. Organizations which serve in an advisory capacity to the government, or cartels which are created by the governments and operate under their supervision, are called corporative institutions. But they too have nothing in common with corporativism.

However we look at it, the fact remains that the corporative or syndicalist idea cannot escape the alternative: market economy or socialism—which?

VI.

War Economy

[* ][Georges Sorel (1847–1922), French political thinker.—Editor]