§ IV. Theory of Collapse and Crisis

The demolished dogma of the progressive pauperization of laborers involves in its ruin all the inferences derived from it. Marx and Engels had proclaimed that on the average every tenth year there would occur stupendous economical and financial crises which would shake society to its very foundations. According to the Erfurt platform “the chasm between rich and poor is widened by those financial crises which are grounded in the very nature of capitalistic production—crises which become ever more extensive and destructive, make universal insecurity the normal state of society, and give evidence that the productive forces of our age have become uncontrollable by society.”

But where are the crises which ever become more extensive and destructive? In comparison with former times the number and extent of financial crises has rather diminished.¹ For the most part they were restricted to certain districts or branches of industry, and least of all must we look for their causes in the “very nature of capitalistic production,” but in the artful manœuvres and unprincipled knaveries of cunning intriguers. We need but call to mind the Panama Canal swindle, the Banca Romana affair, and other frauds of a like nature. If the several governments had done their duty many of these crises could have been avoided.

¹ A socialist writer in the Vorwärts, 1898 (n. 43, 2. supplement), Konrad Schmidt, criticises Marx’s contention of the development of capitalist society toward a “collapse and catastrophe” which will necessitate armed interference and the proclamation of a dictatorship on the part of the proletariat. Says Schmidt: “The last fifty years of social evolution have not as yet borne out the prognostication. The catastrophes have not materialized . . . the financial crises . . . have lost in acuteness and extent. And however terribly large masses of the proletariat may suffer by the most shameful exploitation, the prediction that the laborer will sink deeper as industry progresses, that the fate of his class under the capitalist system will be increasing pauperization, this prediction has not been fulfilled. In the very mother-country of capitalism, in England, the situation of large numbers of workingmen . . . has been greatly improved.”

The introduction of machinery in different lines of business within a very short time caused such a revolution of industrial conditions, that it took some time to realize the situation and to legislate accordingly. Indications, however, seem to point to a more peaceful and better regulated future also in the field of economics. Crises are not multiplying, but diminishing. Therefore also on this head the socialist theory of history has proved to be an enormous exaggeration contradicted by the actual facts.