§ III. Concentration of Capital. Theory of Pauperization

Socialists are masters in the art of repudiating or modifying former theories, as soon as they are shown to be in conflict with existing facts. An instance in point is the theory of the progressive concentration of capital and of the concomitant “pauperization” of the proletariat. Liebknecht is reported by the Vorwarts to have said ina party meeting on April 25, 1900: “Bernstein also inveighs against the so-called pauperization theory. This theory has never been understood in the sense that the entire proletariat would first be buried in misery. Neither did Marx take it in that sense, It is certainly true that the standard of living among workingmen has been improved as against formerly, But none the less the workingman remains a proletarian. By this designation we do not mean a man plunged in misery, but one who has no chance of acquiring economic independence. It would be wilful blindness to deny that bourgeois society must finally collapse.”

We are very thankful to Liebknecht for his admission that the economic situation of workingmen has been improved. But it is perfectly incorrect that Marx understood the pauperization theory in the sense indicated above. At least in their first period Marx and Engels spoke of a progressive pauperization of the proletariat. Their declarations on this point do not admit of any other explanation. We need but refer the reader to the passages quoted in a former chapter (p. 53): “One capitalist kills a good many others.” “The concentration of the instruments of production and the socialization of labor reach a point where they become incompatible with their capitalist surroundings” In the Erfurt platform we read: ‘For the proletariat and the declining middle classes this social change is tantamount to a growing insecurity of existence, to misery, oppression, slavery, degradation, exploitation.”

To bolster up the pauperization theory after some fashion or other many socialists speak now of relative pauperization. Absolutely speaking, they say, the situation of laborers is improving, but still the chasm between them and capitalists is widened, because the increase of wealth is proportionately greater with the latter than with the workingmen. A queer kind of pauperization! If my own position is improving, must I complain of an increase of misery, because my neighbor is improving more and acquiring wealth faster than I am? Besides, even this relative change of wealth cannot be universally maintained, as we shall see anon.

Till very recent times, however, socialists have described the condition of society in a way to make one believe that at present there exist only a small number of billionaires and a countless horde of pauperized proletarians. Already from the preceding paragraph it is evident that such descriptions are fraudulent exaggerations intended to rouse the passions of the poorer classes. Also the numerous establishments on a small or intermediate scale, whose permanence is beyond a doubt, necessarily imply the possession of capital in smaller quantities.

Moreover, the latest statistical returns go to prove that on the whole the income of the lower classes has been increasing. The distribution of wealth is indeed much too unequal, this we readily grant, but nevertheless we contend that the condition of the lower classes, more especially of the industrial laborers, has not become worse but better, and that therefore there can be no question of a progressive pauperization of workingmen.

In Saxony, e.g., the individual persons whose income in 1879 was valued at less than 300 marks constituted 7.11% of the total population; in 1894, however, they had gone down to 5.61%. At the same time the percentage of those whose income was less than 800 marks was reduced from 69.28% to 59.69%. On the other hand the percentage of incomes ranging between 800 and 950 marks rose from 5.27% to 8.96%, and that of the incomes between 900 and 1100 marks rose from 3.66% to 5.83%. Also the percentage of incomes from 1100 to 2800 marks has gone up. From 1894 to 1900 the number of persons whose income was less than 400 marks and who consequently were not taxed went down from 17.76% to 10.82%; the percentage of persons whose income did not reach 800 marks was reduced from 65.28% to 55.69%; the incomes of from 800 to 1600 marks rose from 24.02% to 31.34%, and those of from 1600 to 3300 marks rose from 7.12% to 8.07%.¹

¹ Cf. Philippovich, Grundriss der politischen Oekonomie, vol. I. p. 320; Handwörterbuch der Staatswissenschaften: Einkommen.

In the Grand Duchy of Baden 24.78% of the inhabitants were taxpayers in 1899, as against 19.73% in 1886. The percentage of taxpayers classified according to income is shown by the following table:

In Prussia the number of taxpayers (whose income exceeds 900 marks) rose from 2,440,000 in 1892 to 3,380,000 in 1899, or from 8.15% of all the inhabitants to 10.09%. If the members of their several households are also taken into consideration, then 32.8% of the total population were valued at 900 marks and over in 1896, and 37.59% in 1899.

The growing number of taxpayers is shown by the preceding table, which indicates how many taxpayers of each class there are among 10,000 inhabitants.

In Great Britain and Ireland the total income of the people in 1851 was valued at £600,000,000, of which 260 million belonged to the class of those having an income exceeding £150. For the year 1881 the average calculation of the best statisticians showed a total income of more than 1200 million pounds, 540 million of which were assigned to the class with incomes above £150. In 1881, with an increase in population of 26%, there was, therefore, more money in the hands of non-taxpayers than among the whole nation in 1851, and almost twice as much as the same classes had in the last-mentioned year. The increase in population was chiefly in the middle classes. The number of persons having an income of between £150 and £1000 increased from 300,000 to 990,000, the greatest advance being in those whose income ranges from £150 to £600. The average wealth of the United Kingdom has certainly gone up in the period of 1851 to 1881.¹

¹ Cf. Soziale Praxis, 6th year, p. 948.—In his Voraussetzungen des Sozialismus, p. 50, Bernstein concludes his proof for the fact that the number of property owners is not decreasing with the following peremptory remark: ‘It is totally false to maintain that the present stage of evolution shows a relative, much less an absolute, decrease of property owners. The number of owners is growing not ‘more or less,’ but simply more, i.e., absolutely and relatively more. If the activity and prospects of social democracy depended on the decrease in number of property owners, socialism could indeed ‘go to bed.’” This is tantamount to a first-class funeral of orthodox Marxism.

That the laboring classes also had their share in the growing wealth is proved by the statistics of wages.

The average yearly wages of an English mill-hand amounted:

Moreover, the price of ordinary provisions has not gone up for a very long time, but has rather been reduced. The painstaking investigations of Samuel Andrews, secretary of the Oldham Master Cotton-spinners and Manufacturers, concerning the development of English cotton-mills from 1837 till 1887, proved that in England in the year 1839-40 for a family of two adults and three children the average weekly expenses for food, heating, rent, clothing, etc., amounted to 34 s.; but in 1887 to 28 s. only. The receipts on the other hand—i.e., the wages of two adults—were only 21 s. in 1839-40 and 41 s. in 1887. Wages have advanced at a similar rate in other branches of industry.¹

¹ Cf. Handbuch der Staatswissenschaften, article Arbeitslohn.

The change in wages from 1893 to 1900 is shown by the following table published by the Labour Gazette:²

² Quoted by Soziale Praxis, 10th year, p. 416.

These figures prove that after a period of stagnation or even of retrogression, from 1893 to 1897, there were great advances in wages during the last three years, both as regards the number of laborers concerned and the amount of the increase. In fact, in 1900, more than one million laborers—14% of the total number—received a weekly advance in wages amounting to more than 2½ million dollars.

The general improvement in the situation of workingmen may also be concluded from the fact that the lower classes invest in stock companies and deposit their savings in banks and fraternal societies.

In England the cash assets of mutual benefit and savings associations consisting of or patronized chiefly by working people amount to 280 million pounds. Of these 100 million pounds are invested in stock.³ Also in France, Belgium, etc., the working classes have large deposits in the savings-banks and mutuals.

³ Cf. Local Government Journal, quoted by Soziale Praxis (1897), p. 949.

The economic advancement of the laboring classes is proved to evidence by the report of the Royal Commission on Labour appointed by the English government to investigate labor conditions in England and Scotland. The majority report of this commission, published in 1894, speaks as follows: ‘Our investigations have confirmed the general impression that during the last fifty years wages have advanced considerably both as regards the nominal value and—with the exception of house-rent in large cities—as regards the buying power for the purchase of the respective necessaries. With regard to sanitation the condition of labor is much improved. If the general advance in wages of the year 1872, its subsequent permanence or even increase on the one hand, the reduction in price of the working people’s articles of consumption on the other hand are admitted as undisputed facts, then the remark is justifiable that on the whole the condition of the laboring classes has made great advances during the last fifty years.” This report was signed by Th. Burt, Ed. Trow, and J. Burnett, three of the most prominent English labor leaders. A minority of the commission consisting of four socialistic laborers, though reporting less favorably on the situation of the working classes, still admitted unreservedly that there is no question of its having become worse. “On the contrary, we believe that by the legal and other reforms of the last sixty years the average condition of wage-earners has been steadily improving.”¹

¹ Cf. Herkner, Die Arbeiterfrage, 2d ed., p. 312 sqq.

The condition of laborers may not be everywhere as favorable as in England, but in almost all countries, especially in France and Belgium, the continual improvement of their position is undeniable.

With regard to Belgium Dr. F. Waxweiler, professor of political economy at the University of Brussels and chief of the Labor Bureau, has published very interesting investigations.² By a detailed and accurate comparison of wages in 1896 and 1900, based on the official statistics of the Belgian coal-mining industry, he arrives at the following conclusions:

² Jahrbücher für Nationalökonomie und Statistik, 3d series, xxii. p. 161 sqq.

1. There has been a general advance in wages. This general advance was very noticeable from 1896 to 1900. 2. Wages under two francs a day have disappeared altogether. 3. Daily wages have in many new instances been advanced beyond 7.50 francs.

The average yearly receipts of mine-workers in the kingdom of Saxony were 744 marks in 1869, 876 marks in 1872, 942 marks in 1875, 829 marks in 1878, 821 marks in 1881, 854 marks in 1884, 870 marks in 1885. In figuring out these average wages also women and children are taken into account. The average wages of pitmen were 855 marks in 1869, 956 marks in 1872, 1100 marks in 1875, 956 marks in 1878, the same in 1881, 961 marks in 1884, 995 marks in 1885.¹

¹ Cf. Handwörterbuch der Staatswissenschaften, article Arbeitslohn.

Prussia has furnished us with very instructive statistics of the five principal coal-mining districts. If we designate the underground miners as class A, other workingmen occupied underground as class B, and all other male adults working during the day as class C, we get the following tables showing the average yearly wages.²

² Cf. Jahresbericht des Vereins für bergbauliche Interessen im Oberbergbezirk Dortmund (1897), p. 57.

Upper Silesia.

Ruhr District.

Lower Silesia.

Saar District.

Aix-la-Chapelle District.

For the years 1899 and 1900 the Reichsanzeiger published the following average wages of Prussian mine-workers without regard to occupation:

The so-called “law” of the increasing pauperization of laborers is thus proved to be a fiction in flagrant contradiction with reality. No wonder that nowadays thoughtful socialists generally admit quite freely that in the face of facts this “law” has become untenable.¹ In connection herewith it is worthy of note that Marx himself already in the first edition of “Capital” (1867),² trying to prove progressive pauperization, acknowledges that since legal protection has been granted to workingmen there has begun “a physical and moral regeneration of factory laborers which must have struck the dullest eye.” Also Engels, in prefacing the second edition (1887) of his work, “Die Lage der arbeitenden Klassen in England,” which first appeared in 1845, remarks that its descriptions in many points no longer applied to present conditions.

¹ Cf. Vorwärts, 1897, n. 106 and 141.

² P. 273; 4th ed., p. 259.