Chapter 65: Economic Ideas (The Many Schools of Socialism)
During the late 19th Century, socialism fractured into numerous schools. In this episode, we explore the growing field of socialist thought, as well as its many colorful characters.
Topics in this episode include:
Edward Bellamy and his novel, Looking Backward
French Solidarism
Ferdinand Lassalle, Eduard Bernstein, and the German Social Democrats
The Fabian Society
Henry George and his treatise, Poverty and Progress
Mikhail Bakunin and anarcho-collectivism
Pyotr Kropotkin and anarcho-communism
The Pittsburg Proclamation and anarcho-syndicalism
Sources for this episode include:
“Anarchism.” In Our Time. BBC Radio 4. 7 Dec 2006. https://www.bbc.co.uk/programmes/p0038x9t
Anarchism: A Documentary History of Libertarian Ideas. Vol 1: From Anarchy to Anarchism (300CE to 1939). Edited by Robert Graham. Black Rose Books. 2005.
Angel, Pierre Robert. “Eduard Bernstein: German political theorist.” Encyclopedia Britannica. Last updated: 8 Jun 2023. https://www.britannica.com/biography/Eduard-Bernstein
Avrich, Paul and Martin A. Miller. “Peter Alekseyevich Kropotkin: Russian revolutionary.” Encyclopedia Britannica. Last updated: 25 Aug 2023.
Bellamy, Edward. Looking Backward. Unabridged. Dover. 1996.
Bernstein, Eduard. Evolutionary Socialism. Translated by Edith C. Harvey. 1907. Marxists’ Internet Archive. https://www.marxists.org/reference/archive/bernstein/works/1899/evsoc/index.htm
Car, Edward H. and Alan Ryan. “Mikhail Bakunin: Russian anarchist.” Encyclopedia Britannica. Last updated: 24 Jan 2023.
Duncan, Mike. “Revolutions.” Season 10. Episodes 5-6. 2019.
“Edward Bellamy: American writer.” Encyclopedia Britannica. Last updated: 7 Nov 2021. https://www.britannica.com/biography/Edward-Bellamy
George, Henry. Progress and Poverty: An Inquiry Into the Cause of Industrial Depressions and of Increase of Want with Increase of Wealth, The Remedy. Doubleday, Page & Company. 1912.
“The Gotha Program.” 1875. Readings in European History. Edited by J.H. Robinson. Ginn. 1906. https://history.hanover.edu/texts/gotha.html
Kellogg, D.O. “Ferdinand Lassalle, the Socialist.” The Atlantic Monthly. April 1888. https://www.theatlantic.com/magazine/archive/1888/04/ferdinand-lassalle-the-socialist/633931/
Lee, Groffrey. “The Life of Henry George.” The Peoples Budget – an Edwardian Tragedy. Henry George Foundation. https://www.henrygeorgefoundation.org/about-the-foundation/the-life-of-henry-george.html
Luxemburg, Rosa. “Reform or Revolution?” Translated by Integer. Militant Publications. 1986. Marxists’ Internet Archive. https://www.marxists.org/archive/luxemburg/1900/reform-revolution/index.htm
Marxism and Social Democracy: The Revisionist Debate 1896-1898. Edited and translated by H. Tudor and J.M. Tudor. Cambridge University Press. 1988.
Matull, Wilhelm. “Ferdinand Lassalle: German political leader.” Encyclopedia Britannica. Last updated: 26 Apr 2019 https://www.britannica.com/biography/Ferdinand-Lassalle
Pease, Edward R. The History of the Fabian Society. E.P. Dutton & Company. 1916.
Rogers, H. Kendall. “Eduard Bernstein Speaks to the Fabians: A Turning-Point in Social Democratic Thought?” International Review of Social History, vol. 28, no. 3, 1983, pp. 320–38.
FULL TRANSCRIPT
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“‘As no such thing as the labor question is known nowadays,’ replied Dr. Leete, ‘and there is no way in which it could arise, I suppose we may claim to have solved it. Society would indeed have fully deserved being devoured if it had failed to answer a riddle so entirely simple. In fact, to speak by the book, it was not necessary for society to solve the riddle at all. It may be said to have solved itself. The solution came as the result of a process of industrial evolution which could not have been terminated otherwise. All society had to do was recognize and cooperate with that evolution, when its tendency had become unmistakable.’”
That’s a passage from the 1888 novel Looking Backward: 2000-1887, written by American author Edward Bellamy.
Born in Chicopee Falls, Massachusetts in 1850, Bellamy was the son of a Baptist minister. He studied law before becoming a journalist and later an editorial writer. While still in his 20s, he also began writing fiction, though this work failed to get traction. Until, that is, the release of Looking Backward, which catapulted him to fame. It became one of the best-selling American books of the late 19th Century.
It’s the story of a young Bostonian by the name of Julian West. Put to sleep by a hypnotist in 1887, he wakes up 113 years later – still in Boston, but it’s an entirely different city. This is the Boston of the future, and it’s a utopia. His host, Dr. Leete, explains to him the process of how the ills of the late 19th Century – poverty, unrest, waste, and more – have been overcome.
“‘the organization of labor and the strikes were an effect, merely, of the concentration of capital in greater masses than had ever been known before… Looking back, we cannot wonder at their desperation, for certainly humanity was never confronted with a fate more sordid and hideous than would have been the era of corporate tyranny which they anticipated.
“‘Meanwhile, without being in the smallest degree checked by the clamor against it, the absorption of business by ever-larger monopolies continued… Small businesses, as far as they still remained, were reduced to the condition of rats and mice, living in holes and corners, and counting on evading notice for the enjoyment of existence. The railroads had gone on combining till a few great syndicates controlled every rail in the land. In manufactories, every important staple was controlled by a syndicate.’”
But, as Dr. Leete explains, it was these combinations which brought about the utopia.
“‘Early in the last century the evolution was completed by the final consolidation of the entire capital of the nation. The industry and commerce of the country, ceasing to be conducted by a set of irresponsible corporations and syndicates of private persons at their caprice and for their profit, were intrusted to a single syndicate representing the people, to be conducted in the common interest for the common profit. The nation, that is to say, organized as the one great business corporation in which all other corporations were absorbed; it became the one capitalist in place of all other capitalists, the sole employer, the final monopoly in which all previous and lesser monopolies were swallowed up, a monopoly in the profits and economies of which all citizens shared. The epoch of trusts had ended in The Great Trust.’”
He goes on to explain that organizing labor against the forces of capital no longer makes sense. Afterall, labor and capital are now in the same hands. There was no need for revolution – only evolution. And thanks to this evolution, the world is now rid of crime, poverty, political corruption, war, and other evils.
Now, if this all sounds a bit farfetched, well, it did to Julian West in the novel too. Thus, the book becomes a Socratic dialogue between the two men, as Dr. Leete explains to West how and why this social order works.
So, unlike the Marginalists we discussed last time, Bellamy is siding with the capitalists of his era – the J.P. Morgans and John D. Rockefellers and others who pushed for pools and mergers to ward off “ruinous competition.” But make no mistake, Bellamy is advancing a socialist vision of the future.
Today, Looking Backward is little remembered. To what extent it is remembered is largely because of some very bold but surprisingly accurate predictions Bellamy makes. He envisions the introduction of credit cards, public pensions, and even radio broadcasts. (Albeit, they come through a telephone cable, not wireless transmissions.)
But in its day, Looking Backward was hugely influential for those predictions that did not pan out. Across the world, readers formed dozens (possibly hundreds) of so-called “Nationalist Clubs” – associations to advance the cause of consolidating and nationalizing capital, as described in the novel.
Bellamy called this movement “Solidarism.” But unlike the book’s prediction of snowballing consolidation, his Solidarism was never really folded into a broader socialist philosophy. In the late 19th Century, socialism was undergoing the opposite trend – a trend of ever greater fracturing.
Today we’re going to explore some of these fractures, as well as the Second Industrial Revolution’s diverse and colorful cast of socialist thinkers.
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This is The Industrial Revolutions
Chapter 65: Economic Ideas (The Many Schools of Socialism)
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Alright. Happy Labor Day to all my fellow Americans and Canadian listeners. A little admin before we get started...
First of all, remember that Mill Talk I did last year? (The Podcast Special in your feed.) Well, the video of that talk is now available. If you want to watch the presentation along with the audio, please check it out. I will include the link to it in the episode notes for this episode.
Second, in this episode I am going to refer to co-ops a lot. But I just don’t have enough time to go into them like I want to. As I was writing this chapter, though, I came across a paper I had written for my History of Economic Thought course in college – and it’s all about worker co-operatives, as discussed by 19th Century economic thinkers. Therefore, I will soon release a bonus episode of me reading that paper to you. I figured it would be a fun way for you to get to know college Dave, while also learning about the topic of cooperative labor. So, stay tuned for that.
And finally, I want to thank all the wonderful patrons who make The Industrial Revolutions possible. Special shout outs this time go to Ian Le Quesne, as well as to Andrej Andrejkovich, John Bartlett, Adam Bibby, Chris Bradford, Elizabeth Brooking, Harriet Buchanan, Tara Carlson, “Dancer in the Dark”, Michael Hausknecht, Madeleine Hill, Eric Hogensen, Alonso Ibañez, Naomi Kanakia, Kyle Laskowski, Brian Long, Andrew C. Madigan, Martin Mann, Duncan McHale, John Newton, Emeka Okafor, Brad Rosse, Joshua Shanley, Kristian Sibast, Jonathan Smith, Tanner, Russell Tanner, Ross Templeton, and Seth Wiener.
Alright, on to the program.
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The Bellamyites weren’t the only ones using the word “Solidarism.” Essentially, the word conceptualizes “solidarity” as the foundation for a philosophy, making it very popular among socialists. And in France, “solidarism” was the name given to the beliefs of sociologist Émile Durkheim, philosopher Alfred Fouillée, and politician (including a stint as French Prime Minister) Léon Bourgeois.
French solidarism was, in many ways, quite similar to Bellamy’s. These thinkers believed that “we are all born as debtors to society” – dependent upon one another for our existence – and that this shared, social debt obliges individuals to cooperate with each other. But the liberal, capitalist, industrial system only prioritized individualism. Thus, it had uprooted the moral foundation of the past, turning human beings into the cogs of a machine.
They envisioned a system whereby corporatism – the combining of firms into monopolies – could be used for socialist ends. But it would be a system based on an organic spirit of solidarity, not compulsive collectivism. In fact, it would be more of a mixed-economy than either laissez-faire capitalism or Marxist socialism. And, just like Bellamy imagined, getting there would be an evolutionary – not revolutionary – process.
Now, thanks to his politicking within the International Workingmen’s Association – the First International – Karl Marx’s ideas were gradually becoming some of the most dominant ideas within socialism during the 1860s and 70s. And this was alarming to many because his views were so radical – not only in their ends, but in their means as well. Afterall, he advocated violent revolution against the Proletariat’s bourgeois oppressors.
But there were many other views out there, some of which were considerably more moderate. Some believed more could be done for the poor and the laboring classes without violence being necessary. Some believed Marx’s “dictatorship of the Proletariat”, though theoretically democratic, would be too strict, too rigid in its approach to social and economic life.
Among those who had a falling out with Marx – as Marx became increasingly bitter and disagreeable during his London years – was fellow German philosopher and activist Ferdinand Lassalle.
Born in Silesia in 1825, Lassalle was the son of a silk merchant. Like Marx, he came from a Jewish family and became enthralled by Hegelian philosophy while at the University of Berlin. He was arrested for a pro-revolution speech he made during that fateful year of 1848, and he subsequently served six months in prison.
By 1863, Lassalle was living in Berlin. Convinced that revolution was hopeless at this point, he turned to peaceful politics instead. He now believed that gradual reform through the existing institutions of government was the best way to bring about socialism. That year, he founded the General German Workers Association, a new political party representing the interests of labor. And he also started having conversations with our old friend, the then-Prussian Prime Minister, Otto von Bismarck.
The two men were masters of realpolitik. Bismarck believed this new workers’ party (a party of the far-left) could help him against the liberal German Progress Party (a party of the center-left). The General German Workers Association was also a populist party, and Bismarck believed he could swing populists against the bourgeois liberals and toward his nationalist, conservative politics. Lassalle, meanwhile, believed he could use Bismarck’s political maneuvering to secure important concessions for workers – namely, universal suffrage and the development of a social welfare state.
As we’ll discuss in a future episode, Bismarck would indeed go on to advance the cause of social welfare as Chancellor of Germany. But Lassalle would not live to see it. I don’t want to get too much into the weeds here, but Lassalle was also something of a womanizer. While in Switzerland in 1864, he tried courting a young noblewoman. When her father objected to the match, he challenged the man to a duel. He lost the duel – shot in the abdomen – and died three days later.
The party he founded lived on. In 1875, it combined with an explicitly Marxist party to form (what they eventually named) the Social Democratic Party of Germany – better known by its German initials, the SPD. In its first congress, it adopted the so-called Gotha Program. This program maintained a very Marxist view of economics, but promised “endeavors by every lawful means to bring about a free state and a socialistic society, to effect the destruction of the iron law of wages by doing away with the system of wage labor, to abolish exploitation of every kind, and to extinguish all social and political inequality.” Among the policy objectives they laid out for these goals were universal suffrage, a progressive income tax, a prohibition on child labor, limits to working hours, health and safety protections, and more.
Marx blasted the Gotha Program. And as a result of his critique, the party swung radically to the even-further left. Soon, Lassalle was viewed as a heretic within the SPD for having abandoned revolutionary politics. They believed that his vision of reform was fundamentally flawed; that the ruling classes would never willingly let go of their grip over parliamentary politics. To operate within that system was to become a tool of the bourgeoisie. And, sure enough, Bismarck had the SPD outlawed in 1878.
However, Marx wasn’t the only voice of socialism influencing the Germans from London.
In 1883, a Scottish immigrant to the United States named Thomas Davidson held several meetings with young people in London. Davidson was described as “spiritually a descendent of the Utopians of Brook Farm” – a community on the outskirts of Boston emmeshed in the transcendentalism of our old friends, Ralph Waldo Emerson and Henry David Thoreau, as well as the Phalanstery socialism of another old friend, Charles Fourier.
The young people he met with had been caught up in the new ideas of yet other old friends of ours – Charles Darwin, Auguste Comte, and John Stuart Mill – thinkers who their parents never read and cared little about. Decades later, one of these formerly young men explained how they had also been at that age when social injustice really irked them. “…viewing our social system with the fresh eyes of youth, saw its cruelties and its absurdities and judged them, not as older men, by comparison with the worse cruelties and greater absurdities of earlier days, but by the standard of common fairness and common sense, as set out in the lessons they had learned in their schools, their universities, and their churches.”
After listening to Davidson at these meetings, several of the young men and women agreed to meet together further – and to start a movement.
They called themselves the “Fellowship of New Life” – an organization dedicated to spiritual community. And some in the fellowship decided to create yet another group that would focus on social progress – a group that would long outlast the Fellowship of New Life.
At a meeting on Osnaburgh Street in January 1884, they agreed to name this new society after Roman general Quintus Fabius Maximus Verrucosus, whose utterly pragmatic “Fabian strategy” of delayed attacks against Hannibal allowed Rome to defeat a superior Carthaginian force during the Second Punic War. Thus, they were named the Fabian Society.
As you can guess by the name, the Fabian Society would take a pragmatic, stealthy approach to advancing socialism. They did not believe in rushing into revolution. Rather, they urged caution and discipline – striking only when the opportunity presented itself. But perhaps, some of them argued, such a moment of attack may never come – it may not be necessary. Gradual reform may be possible.
Yet, the ends they sought were quite radical. In a manifesto they adopted that September, they declared “a life interest in the Land and Capital of the nation is the birthright of every individual born within its confines.” Among other things, it called for the nationalization of land and equal political rights for women.
The manifesto also called for the state to intervene in the economy by offering a public, not-for-profit alternative in every industry. So, if you sold clothing, you’d have to compete with the state’s textile mills. If you sold bread, you’d have to compete with the state’s bakeries. And so on. The manifesto claimed…
“That the pretensions of Capitalism to encourage Invention and to distribute its benefits in the fairest way attainable, have been discredited by the experience of the Nineteenth Century.
“That, under the existing system of leaving the National Industry to organise itself Competition has the effect of rendering adulteration, dishonest dealing and inhumanity compulsory.
“That since Competition amongst Producers admittedly secures to the public the most satisfactory products, the State should compete with all its might in every department of production.”
And, calling for direct taxes to fund the state, the Fabians insisted “That no branch of Industry should be carried on at a profit by the central administration.”
Between this manifesto and other early tracts published by the Fabian Society, they started to get noticed. Some big names joined their ranks – the playwright George Bernard Shaw, author H.G. Wells, suffragette Emmeline Pankhurst, and physicist Oliver Lodge were among them. The Fabians also effectively helped launch the careers of several important political figures and economists who were members, including Sindey and Beatrice Webb (who wrote new theories of co-operative economics), Sydney Olivier (a notable civil servant), Graham Wallas (the founder of the London School of Economics), and Ramsay MacDonald (the first British Prime Minister from the Labour Party).
In the years to come, the Fabians discussed and debated a lot of the big ideas going around within socialism at the time – whether or not to run candidates for elected office, whether or not to collectivize certain industries or industry broadly, whether producer or consumer cooperatives were better, and so on. Publishing their conclusions, the Fabian Society served as a socialist think tank.
And often, though not always, they concluded that moderate, reform-oriented solutions were at least possible, if not for the best. Working with trade unions, they helped establish the new Labour Party to compete in elections. They advocated for co-ops and insisted government need not take over all industry. In other words, they wanted the benefits of socialism without risking a total upending of the existing structure of society.
Unlike their German counterparts, few of the original Fabians had heard of Marx, much less read him. Afterall, Capital was 800+ pages and full of esoteric terminology, made even harder to understand when translated from German to English. And though they would soon try to study him, many Fabians admitted they didn’t comprehend his ideas.
But thanks to that incomprehension, the Fabians seemed to rub some of their views off on another one of those German Marxists, living in exile in London.
Eduard Bernstein was born in Berlin in 1850. He came from a secular Jewish family that moved to the Prussian capital from Danzig in order to take advantage of the industrial opportunities there. His father was a railway engineer who struggled to feed their family, while an uncle of his worked for a socialist newspaper.
At the age of 16, Bernstein dropped out of school and got a job as a bank clerk. Incredibly, it didn’t seem to have affected his job at the bank when, in 1872, he joined that Marxist party which later combined with Lassalle’s to form the SPD. In fact, Berstein was there at Gotha when the moderate program was adopted, and he was among the members who helped steer the party further left in the aftermath.
When the party was banned by Bismarck, Bernstein first made his way to Switzerland. After getting in trouble with Swiss authorities in 1888, he relocated to London. There, he made contact with our old friend, Friedrich Engels, and became a close friend of the aging cotton baron / Marxist leader. But Bernstein also started meeting with the Fabians. And though he always denied that they had played a role in it, Bernstein’s Marxist orthodoxy waned considerably during those years of hanging out with the Fabians.
By 1897, Engels was dead and Bernstein was re-imagining Marxism. Not only did he start praising Lassalle as a social reformer, he began giving speeches and publishing essays that flew in the face of Marxist orthodoxy. In 1899, some of these writings were compiled into a book, known in English as Evolutionary Socialism.
Bernstein’s approach became known as Marxist revisionism. Essentially, he argues that Marx’s interpretations of historical materialism can be reassessed through the new lens of Darwin’s “laws of evolution.” Thanks to the knowledge of these laws, he writes “the point of economic development attained to-day leaves the ideological, and especially the ethical, factors greater space for independent activity than was formerly the case.” And with that established, Bernstein takes it upon himself to critique Marx’s conclusions.
Among other things, he starts to doubt the concept of “surplus value” as described in Capital and, by extension, the “tendency of the rate of profit to fall.” As a result, Bernstein is unconvinced that capitalism really is doomed to fail thanks to its own contradictions. If anything, he is finding contradictions in Marx’s application of dialectical reasoning. And, he argues, Marx was empirically wrong. If Marx had been right, capitalism would have collapsed by now. Of course, that’s not to say it’s impossible for capitalism to collapse in the future – Bernstein’s very careful not to make that prediction – but he isn’t willing to wait and see anymore.
Instead, he looks to England, where he had been living over the past decade. In England, workers had steadily been making progress. Their unions fought for better wages, co-ops were being established, the franchise was gradually being extended, and the Liberal Party was moving more and more to the left. Bernstein explains “What has been attained in England is the fruit of the hard, unflinching work of organisation.”
So, while his fellow Marxists were pushing for labor agitation as a means of preparing the working class for revolution, Bernstein is basically saying, “let them fight for what they want here and now” – allow the unions to get better wages and shorter workdays; allow them to strengthen their economic relations through co-ops; and allow them to participate in the democratic political process. And you know what? You might just convince some of the bourgeoisie that they need to do better by the Proletariat. You could achieve socialism gradually – with new programs and policies, bit by bit – within the existing system.
Now, to be sure, over the next couple of decades, the Social Democrats would be split between the revisionist and orthodox branches of Marxism. Orthodox voices like Karl Kautsky and Rosa Luxemburg sharply criticized Berstein, suggesting he had stopped believing in Marxism altogether. In her 1899 pamphlet, Social Reform or Revolution?, Luxemburg responds to Bernstein, insinuating his is a “vain effort to repair the capitalist order…”
But eventually, the reformist wing of the party would win out. Today, Social Democracy is a much more moderate school of socialism than that of revolutionary Marxists. Social Democrats support market interventions to stabilize the economy, public services, and a strong social safety net, but not Soviet-style central planning, forced collectivization, or violent revolution. And while Marxist regimes have collapsed across the globe, the Fabian Society still exists – it’s still the intellectual pillar of the UK’s Labour Party – while the SPD currently leads the coalition government of Germany.
And this more moderate approach to socialism was greatly influenced by another American with a monumentally important but much forgotten book.
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Whenever I’m with a group of friends and they want to play a board game, I always suggest Monopoly. I love Monopoly. But no one else ever wants to play – probably because they know I’ll win. But that’s beside the point.
Monopoly has a fascinating history. Before it was acquired by Parker Brothers in the 1930s, versions of it had been circulating around college campuses and the homes of liberal elites on America’s East Coast for decades.
The original version was patented by one Lizzie Magie in 1904, which she called “The Landlord’s Game.” It was meant to be a teaching tool, demonstrating how land ownership leads to wealth hoarding for some and poverty for everyone else. You see, Magie was a socialist. But she wasn’t just any kind of socialist. Specifically, she was a Georgist.
Henry George was born in Philadelphia, Pennsylvania in 1839. The son of a strict, religious family, his father struggled to make ends meet. Likely because of this, George dropped out of school at the age of 14 and wound up as an errand boy and clerk in an import house.
Encouraged by some friends, he decided to make his future in the West. Although George originally intended to go to Oregon, he wound up in San Francisco and briefly joined the fortune seekers panning for gold. But by this point, the Gold Rush was mostly over, and the experience had been a failure. Penniless and without prospects, he took some odd jobs in San Francisco, including a stint in a print shop as a typesetter.
Though very poor, he was able to convince a young woman to marry him. The Georges subsequently moved to Sacramento where they had children and he got a newspaper job, though managed to lose what money he was making by investing in failing mining ventures. For years he continued to struggle, at times unable to feed his growing family.
Finally, George got a job writing for the San Francisco Times. An extremely talented writer, he was rapidly promoted through the ranks, all the way to managing editor of the paper within a year.
As the years went on, George never forgot all those years of poverty he lived through – even as he observed the growing riches of the city and of California generally. He began writing on the issues of rising wealth and inequality. Finally, in 1879, he published the book that made him a well-known figure across the world: Progress and Poverty.
Writing in the aftermath of the Panic of 1873, he asks if, “a man of the last century – a Franklin or a Priestley” – seeing all the great advancements made since their death – could “have conceived of the hundred thousand improvements which these only suggest, what would he have inferred as to the social conditions of mankind?” The answer was obvious – with so much economic progress, there should not be so much poverty.
George goes on to explore the topic in a treatise of political economy, full of marvelous rhetoric. Among other things, he pushes hard for the labor theory of value, and calls the neoclassical arguments against it “absurd.” He also attacks the idea of the Malthusian trap (Shout out Chapter 9), arguing that the alleged examples of it – famines in India and Ireland – are in fact just examples of British imperialism and mismanagement. It’s not growing populations putting a strain on the food supply in these places – it’s the sins of the absentee British landlords.
Getting down to it, he discusses the three traditional “factors of production” found in the literature of the Classical Economists: Labor, Capital, and Land. He argues that the proceeds of production go to all three – wages for Labor, interest for Capital, and rent for Land. But, here’s the thing: Capital is really just a product of Labor. Afterall, Labor generates all the profits, and all the fixed capital like machines and buildings are created thanks to human labor anyway. So really, the only two factors in principle are Labor and Land.
Okay, before I continue, I need to point out that I really haven’t spent much time so far explaining the concept of rent in Classical Economics. Guys like Smith, Malthus, and Ricardo were obsessed with it. But that’s mostly because, in their time, agriculture was a much bigger part of the economy. I have skipped over it because it was largely irrelevant to our topics so far.
“Rent” in this context doesn’t refer so much to borrowing something for a fee (although it certainly includes that if you’re a tenant), rather, it refers to the productive value of land. George defines rent as “the part of the produce that accrues to the owners of land (or other natural capabilities) by virtue of ownership.” Now, that doesn’t mean that buildings or crops on the land are part of it – those are the fruits of labor, after all. Only the land itself – or similarly titled property, like patents – produce rent.
Now, this can describe either actual rent (like what a tenant farmer pays a landlord) or potential rent (like when a capitalist buys land to build a factory). It is whatever someone is willing to pay for the exclusive use of the land.
For George, rent was the key to understanding the problems of the age. As the economy developed more and more with industrialization, he believed, land – the one finite factor of production – became more and more valuable. And, in particular, he is thinking about the railroads. Remember back in Chapter 62 I told you about how the railroads were gobbling up western lands in the U.S.? To George, it was a real concern.
As land values rise, he argues, wages and interest get crowded out. As productivity increases, so too does the value of the land that can be put to productive uses. For the factory owner, you might be making higher profits, but you are receiving no immediate benefit from your most valuable asset – the land underneath you. And, if you’re a farmer, you are having to pay higher and higher rents to a landlord – whether it’s a member of the gentry or a corporation like a railroad or bank – meaning you will have less and less money to pay your workers, buy new tools, or feed yourself.
As evidence for this argument, George points out that wages are higher in “new countries” (like the United States) where more of the land is unsettled. But, he recounted the way California gold miners knew their wages would fall as the land around them was gradually monopolized by the railroads and banks. And as land is monopolized, it is misused, leading to lots of people wanting to use property and – at the same time – lots of property left vacant.
So, what to do about it?
“We must make land common property.”
George is not opposed to all property rights – just land rights. I have a right to the plate which I eat my lunch off of. It is property I paid for. That payment compensated all the people who did the labor to produce the plate and deliver it to market. But if I buy a piece of land? Well, no human being made that. My ownership of it, then, is illegitimate.
Now, he’s not saying we should treat all parcels of land like they’re commons. Nor is he advocating the seizure of private land through nationalization – he doesn’t go quite that far. Instead, George argues, we should tax rent. All the rent.
Afterall, under this line of reasoning, rent is unjust – you do not deserve to see your wealth grow if you are not working to grow it. Why should the banks and wealthy individuals see their wealth grow simply because they own land? So, tax the rent, and use the proceeds for the common good – put it into public education, infrastructure, and other functions of government. What’s left over can be redistributed to the people as a social dividend – that is, a basic income – so that “every member of the community would participate in the advantages of ownership.”
According to Geroge, this remedy would be an incredibly equitable way to continue growing the economy. Landowners would be incentivized to improve the land for greater production in order to afford the tax; capitalists would still be able to bring goods to markets; workers would be better paid and less likely to strike; children would be better educated; and so on. Plus, it’s quite possibly the only tax you would ever need! The income tax debate would become irrelevant, excise taxes could be abolished, and tariffs could be replaced by free trade.
So appealing was this approach to reform, that this this 500+ page economic treatise became a bestseller. By the end of the century, millions of copies had been printed and distributed across the globe. And this brand of socialism – Georgism – influenced the likes of both Leon Walras (shout out last time) and the Fabian Society.
After Progress and Poverty was published, George’s profile was too big for San Francisco. He moved to New York City, using it as a launching pad for international speaking opportunities and into politics. He ran for office under various socialist parties several times, though never quite pulled off a first-place finish. (Albeit – he came close more than once.) And he continued writing, advocating for free trade, free public transit, bankruptcy protection, women’s suffrage, and other progressive reforms. And even after his death, he remained a towering figure in American thought well into the Progressive Era.
But Henry George was not the only thinker concerned about property and who profited from it. So too were the thinkers from another, growing school of socialism: The Anarchists.
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We last discussed Anarchism back in Chapter 42, when I introduced you to our old friend – the Father of Anarchism – Pierre-Joseph Proudhon. Not only did Proudhon wish to empower the working classes through the elimination of private property, he wished to liberate them with the abolition of the State.
Proudhon remained a leading figure in socialism, even after his death in 1865. And going into the Second Industrial Revolution, his followers fought ferociously to spread his ideology – not only fighting against the forces of ruling-class oppression, but also (often times) against their fellow socialists.
Nowadays, there are a lot of branches of anarchism. You’ll hear about anarcho-socialism, anarcho-primitivism, anarcha-feminism, eco-anarchism, yada yada yada. But today, we’re going to discuss the three big ones that came out of the Second Industrial Revolution: Anarcho-collectivism, anarcho-communism, and anarcho-syndicalism.
However, I should point out that these branches don’t have the same degree of philosophical differences with one another that we see between other schools of socialism. In fact, the different branches of anarchism are often very intertwined.
Let’s start with anarcho-collectivism. In the late 19th Century, the name most associated with this branch was Mikhail Alexandrovich Bakunin.
Born in Russia’s Tver province in 1814, Bakunin was the son of a noble family. His father was a landholder, diplomat, and something of a liberal, though he made the wise decision to step away from politics after the Decemberist Uprising of 1825. When Bakunin was a teenager, he was sent to the army, which he pretty much hated. So, in 1835 he went AWOL and started reading philosophy. While in his 20s, he enrolled (like Marx) at the University of Berlin, where he (like Marx) fell in with the Young Hegelians. (Shout out Chapter 49!)
From here, Bakunin started his long career of writing and getting in to trouble with the authorities. Eventually he (like Marx) wound up in Paris, where he met Proudhon. (Oh, and Marx too.) After he (like Marx) was expelled from Paris, he wound up in Brussels (like Marx – okay, now this is getting ridiculous) and, sure enough, he joined the Revolutions of 1848 and ’49. As a result of his revolutionary activities, Bakunin was arrested. After a couple years in a German prison cell, he was deported to Russia, where he spent six more years in a prison cell, before he was exiled to Siberia.
Eventually he escaped exile and made a little trip around the world, making stops in Japan, the U.S., Britain, Sweden, Italy, and finally Switzerland, which was becoming something of a safe haven for revolutionary socialists. Bakunin had trouble settling down. But it was during his years in Italy and Switzerland – from 1864 to his death in 1876 – where he developed his anarchist philosophy.
As he writes in his “Program of the International Brotherhood” in 1868:
“The three great causes of all human immorality are: political, economic, and social inequality; the ignorance resulting naturally from all this; and the necessary consequence of these, slavery.”
But unlike Marx, Bakunin does not blame bourgeois capitalists or the nobility for this. Comparing them to poor people driven to offenses like robbery or prostitution, he explains, “the kings, the oppressors, exploiters of all kinds, are as guilty as the criminals who have emerged from the masses; like them, they are evildoers who are not guilty, since they, too, are involuntary products of the present social order.”
To Bakunin, the solution doesn’t lie in class conflict alone – it requires the overthrow of the institutions which reinforce the corrupt social order. In particular, the overarching institution must be overthrown: the State.
As he put it in “Socialism and the State” a year earlier:
“The State…is the most flagrant, the most cynical, and the most complete negation of humanity. It shatters the universal solidarity of all men on the earth, and brings some of them into association only for the purpose of destroying, conquering, and enslaving all the rest.”
According to Bakunin, this holds true even in so-called “democracies”. In his “The Illusion of Universal Suffrage”, he writes:
“...no matter how egalitarian our political constitution may be, it is the bourgeoisie who rule, and it is the people – workers and peasants – who obey their laws. The people have neither the leisure nor the necessary education to occupy themselves with government. Since the bourgeoisie have both, they have, in fact if not by right, exclusive privilege ...”
Or as he put it in 1869:
“The State has always been the patrimony of some privileged class: the priesthood, the nobility, the bourgeoisie, and finally, after every other class has been exhausted, the bureaucratic class, when the State falls or rises – whichever you wish – into the condition of a machine.”
But wait – who is this bureaucratic class? Well, this is the ruling class Bakunin imagines taking power should the Marxists have their way.
Again, from the “Program of the International Brotherhood”:
“We are the natural enemies of such revolutionaries – the would-be dictators, regulators, and trustees of the revolution – who even before the existing monarchical, aristocratic, and bourgeois states have been destroyed, already dream of creating new revolutionary states, as fully centralized and even more despotic than the states we now have.
“There is no doubt that this new life – the popular revolution – will in good time organize itself, but it will create its revolutionary organization from the bottom up, from the circumference to the center, in accordance with the principle of liberty, and not from the top down or from the center to the circumference in the manner of all authority. It matters little to us if that authority is called Church, Monarchy, constitutional State, bourgeois Republic, or even revolutionary Dictatorship. We detest and reject all of them equally as unfailing sources of exploitation and despotism.”
Bakunin believed this organizing-from-the-bottom-up would lead to that French Revolution mantra of “Liberty, Equality, and Fraternity” – each of which was necessary for the other. You can’t have true political freedom without economic equality, and you can’t have economic equality without a collective spirit of solidarity and mutual support. As he once put it, “Society is the tree and liberty is the fruit.”
You see, to Bakunin, anarchism is not anti-society – it’s anti-power; anti-hierarchy. It’s a world without the state; without organized religion; without the traditional family; without corporations – in other words, without those things which have leaders and people being led.
So, instead, Bakunin envisions a world of autonomous communes – towns, villages, and cities – voluntarily organized by the People. While federations would probably form between the communes, there would be no states holding power over them. Because private property is a form of exerting power over others, all property in these communes would be collectivized. Everyone in the commune would be able to vote – including women – to elect the functionaries who carry out the needs of the community. Everyone would have full civil liberties and face no punishments for their wrongdoing, save from condemnation in the court of public opinion. The only catch was that, to enjoy these rights, you would be expected to provide labor – even former kings and landowners and capitalists of the Leisure Class variety.
And this is what makes Bakunin’s anarcho-collectivism distinct. It follows from the Saint-Simonist principle of “from each according to his ability, to each according to his contribution.” This famously differs from Marx’s “from each according to his ability, to each according to his needs.” And while they agreed with Bakunin on the need for stateless socialism, the anarcho-communists would side with Marx on the point of “to each according to his needs.”
The most famous of these anarcho-communists was another Russian: Pyotr Alexeyevich Kropotkin.
Born in Moscow in 1842, Kropotkin came from an ancient noble family. His father, Prince Alesksey Petrovich Kropotkin, was a military general with a significant estate. His mother, a descendent of Ukrainian Cossacks, died when Pyotr was just 3 years old. Though his father remarried, he was mostly raised by the family’s servants – leading to his lifelong appreciation for peasants and workers.
Kropotkin was chosen to join the Page Corps, where he would receive a military education while serving the Czar. But he seems not to have enjoyed it very much, as he became increasingly radicalized as a teenager. In 1862, he decided to spend his military service in Siberia, where he could study the region’s still much-uncharted geography. He excelled in this work and became a distinguished geographer.
The big turning point in his life came in 1871. A number of things happened that year. There was a significant event that took place in France (an event we will talk about next time); he was offered a prestigious leadership position in the Russian Geographical Society; and his father died, meaning he inherited a large landed estate. Not only did he turn down that role with the geographical society, he also renounced his noble status, declaring that he would dedicate his life to social justice. Russian high society was shocked.
Between his years in Siberia – reading stuff he really wasn’t supposed to be reading – as well as a trip to Switzerland where he observed the mutual support practices of watchmakers, Kropotkin had developed an anarchist worldview. He started writing tracts for workers in Moscow and St. Petersburgh which, in 1873, got him arrested. But he managed to escape from prison a few years later and went into exile. Over the next decade, he bounced around Europe evading authorities until he was arrested in France for agitation. Following his release, he settled in London, where he would live from 1886 until his return to Russia during the 1917 revolutions.
In London, he published an anarchist newspaper and several books, including The Conquest of Bread and Mutual Aid: A Factor in Revolution.
Although Kropotkin agreed with Bakunin and the other anarchists that a successful revolution required the overthrow of the state and all hierarchical institutions, he differs from Bakunin on the labor question. As he puts it in The Conquest of Bread:
“We have said that certain collectivist writers desire that a distinction should be made between qualified or professional work and simple work. They pretend that an hour’s work of an engineer, an architect, or a doctor, must be considered as two or three hours’ work of a blacksmith, a mason, or a hospital nurse. And the same distinction must be made between all sorts of trades necessitating a more or less long apprenticeship and the simple toil of day labourers.
“Well, to establish this distinction would be to maintain all the inequalities of present society. It would mean fixing a dividing line, from the beginning, between the workers and those who pretend to govern them. It would mean dividing society into two very distinct classes – the aristocracy of knowledge above the horny-handed lower orders – the one doomed to serve the other; the one working with its hands to feed and clothe those who, profiting by their leisure, study how to govern their fosterers...Engineers, scientists, and doctors merely exploit their capital – their diplomas – as middle-class employers exploit a factory, or as nobles used to exploit their titles of nobility…
“Services rendered to society, be they work in factory or field, or mental services, cannot be valued in money. There can be no exact measure of value (of what has been wrongly-termed exchange value), nor of use value, with regard to production. If two individuals work for the community five hours a day, year in year out, at different work which is equally agreeable to them, we may say that on the whole their labour is equivalent.”
So how do you improve the situation? Kropotkin believes you must end division of labor. That system of specialization, which Adam Smith believed was so crucial to economic efficiencies, Kropotkin believes only serves to foster inequality and injustice. As he puts it in one of the manuscripts compiled into his Fields, Factories, and Workshops:
“Political economy has hitherto insisted chiefly upon division. We proclaim integration; and we maintain that the ideal of society – that is, the state towards which society is already marching – is a society of integrated, combined labour. A society where each individual is a producer of both manual and intellectual work; where each able-bodied human being is a worker, and where each worker works both in the field and the industrial workshop; where every aggregation of individuals, large enough to dispose of a certain variety of natural resources – it may be a nation, or rather a region – produces and itself consumes most of its own agricultural and manufactured produce...”
In The Conquest of Bread, he provides an example of this with coal miners:
“...is the coal they have extracted their work? Is it not also the work of men who have built the railway leading to the mine and the roads that radiate from all its stations? Is it not also the work of those that have tilled and sown the fields, extracted iron, cut wood in the forests, built the machines that burn coal, and so on? No distinction can be drawn between the work of each man. Measuring the work by its results leads us to absurdity; dividing and measuring them by the hours spent on the work also leads us to absurdity. One thing remains: put the needs above the works, and first of all recognize the right to live, and later on, to the comforts of life, for all those who take their share in production.”
You see, Kropotkin believed that people are instinctually cooperative. It is the ruling classes and their institutions that have tricked us into believing we need to compete with one another; that we need to be suspicious that our neighbors and coworkers will not do their fair share. And, indeed, he argues, in small communities where hierarchal institutions are relatively out-of-sight, out-of-mind, you will find people taking care of one another – if a man sees that his neighbor is hungry, he will give her some of his food. If one person is starting to appear tired while working, another person will pitch in for him and let him rest. A system of mutual aid and support is not only more just, it is also more practical than we are being led to believe.
Okay, well that may be fine in rural, pre-industrial communes, but how do you accomplish this harmonious system in a modern, industrial city setting? How do you create the efficiencies Adam Smith was talking about without the division of labor? Well, Kropotkin allows for some specialization to keep the wheels of technological innovation – and, thus, efficiencies – turning.
Again, from Fields, Factories, and Workshops:
“We maintain that in the interests of both science and industry, as well as of society as a whole, every human being, without distinction of birth, ought to receive such an education as would enable him, or her, to combine a thorough knowledge of science with a thorough knowledge of handicraft. We fully recognize the necessity of specialization of knowledge, but we maintain that specialization must follow general education, and that general education must be given in science and handicraft alike...
“For centuries science and so-called practical wisdom have said to man: 'It is good to be rich, to be able to satisfy, at least, your material needs; but the only means to be rich is to so train your mind and capacities as to be able to compel other men – slaves, serfs or wage-earners – to make these riches for you. You have no choice.'...
“But modern knowledge has another issue to offer to thinking men. It tells them that in order to be rich they need not take the bread from the mouths of others; but that the more rational outcome would be a society in which men, with the work of their own hands and intelligence, and by the aid of the machinery already invented and to be invented, should themselves create all imaginable riches. Technics and science will not be lagging behind if production takes such a direction. Guided by observation, analysis and experiment, they will answer all possible demands. They will reduce the time which is necessary for producing wealth to any desired amount, so as to leave to everyone as much leisure as he or she may ask for.”
Now, even if it sounds a bit naïve to you, you might be thinking, “Well, all this anarchism stuff sounds very nice and pleasant. Why do so many people think of anarchism as being violent and scary?”
Well, in the late 19th and early 20th centuries, there was a branch of anarchism that was – sometimes fairly, sometimes not – associated with violence. And that was anarcho-syndicalism.
In order to explain this branch, I first need to explain Syndicalism. Essentially, this is the word the French used to describe “Trade Unionism.” Except, when we say “Syndicalism” in English, we are almost always referring to Revolutionary Syndicalism – and there’s a big difference.
Trade Unionism supports trade unions as we think of them today: Associations of workers that engage in collective bargaining for better pay, benefits, and working conditions; ratify labor contracts or amendments to said contracts; go out on strike if said contracts do not materialize; advocate for the jobs its members do, and for better labor policies coming out of government more broadly (among other things).
Revolutionary Syndicalism, on the other hand, supports the organizing of workers for another purpose: Social revolution – often by any means necessary.
In fact, the role of unions was an important point of debate among 19th Century socialists. Guys like Marx and Bakunin believed they should be used to achieve revolution, while the more moderate Social Democrats and Fabians believed they should fight for the more immediate ends of improving the working lives of their members.
But while most of the socialist thinkers of the age came from either the bourgeoisie (like Marx and Engels and the Fabians) or the landed gentry (like Bakunin and Kropotkin), the syndicalists were typically actual working-class laborers. And the revolutionary syndicalists tended toward anarchism.
As the anarchist Emma Goldman put it in 1913:
“Syndicalism is, in essence, the economic expression of Anarchism. That circumstance accounts for the presence of so many Anarchists in the Syndicalist movement. Like Anarchism, Syndicalism prepares the workers along direct economic lines, as conscious factors in the great struggles of today, as well as conscious factors in the task of reconstructing society along the autonomous industrial lines, as against the paralyzing spirit of centralization with its bureaucratic machinery of corruption, inherent in all political parties.”
Anarcho-syndicalism had its forerunners in Europe, but the birth of the movement is often attributed to a conference of radical American workers in 1883. Though most of them were from Chicago (a hotbed of anarcho-syndicalism in that decade), the conference took place in Pittsburg. Thus, the manifesto they wrote is known as the Pittsburg Proclamation.
Let me read you some excerpts. After repeating the standard socialist talking points about the exploitation of labor, the proclamation reads:
“The increasing eradication of working forces from the productive process annually increases the percentage of the propertyless population, which becomes pauperized and is driven to “crime,” vagabondage, prostitution, suicide, starvation, and general depravity. This system is unjust, insane, and murderous. It is therefore necessary to totally destroy it with and by all means, and with the greatest energy on the part of every one who suffers by it, and who does not want to be made culpable for its continued existence by his inactivity.
“Agitation for the purpose of organization; organization for the purpose of rebellion. In these few words the ways are marked which the workers must take if they want to be rid of their chains…”
The Pittsburg Proclamation lays the blame with the State (which directs its laws against the working classes and fails to educate their children), as well as the Church (which tricks workers into believing there is a heaven, when in fact they could achieve “paradise on earth” – a system in which “nobody need work more than a few hours a day and that all nevertheless can satisfy their needs”).
So, what is there to do? “There remains but one recourse – FORCE!” And through force…
“What we would achieve is, therefore, plainly and simply:
First: - Destruction of the existing class rule, by all means, i.e., by energetic, relentless, revolutionary and international action.
Second: - Establishment of a free society based upon co-operative organization of production.
Third: - Free exchange of equivalent products by and between the productive organizations without commerce and profit-mongery.
Fourth: - Organization of education on a secular, scientific, and equal basis for both sexes.
Fifth: - Equal rights for all without distinction of sex or race.
Sixth: - Regulation of all public affairs by free contracts between the autonomous (independent) communes and associations, resting on a federalistic basis.”
The so-called “Long Depression” from the 1870s to ‘90s fueled the rise of anarcho-syndicalism, which finally peaked around 1914, at the very end of the Technological Revolution. It imagined an economic system wherein democratic, self-governed worksites would combine into syndicates (off the model provided by trade unions) to accomplish the goals the Pittsburg Proclamation outlined. From there, the syndicates would send delegates to regional federations, much like Bakunin had in mind for his autonomous communes.
Anarcho-syndicalism had some origins in the Swiss Jura Federation going back to the First International. In the U.S., the movement was most associated with a far-left union formed in 1905, the International Workers of the World – better known as the IWW or, by their nickname, the Wobblies.
Anarcho-syndicalist associations could be found in Argentina, Chile, Denmark, France, Germany, Russia, Sweden, etc. But nowhere was it more popular than in Spain – particularly the Catalan city of Barcelona – where the Confederación Nacional del Trabajo (or CNT) – formed as a radical alternative to the country’s more popular and moderate Unión General de Trabajadores. The CNT would become especially important during the Spanish Civil War. (It’ll be a while before we get to that topic, but I’m already looking forward to it.)
Many workers were drawn to this more radical, anarchist version of unionism because of how much the labor movement struggled outside of Great Britain during these years. As Goldman put it in her essay “On Syndicalism”:
“Realizing that the diametrically opposed interests of capital and labour can never be reconciled, Syndicalism must needs repudiate the old, rusticated, worn-out methods of trade unionism, and declare an open war against the capitalist regime, as well as against every institution which today supports and protects capitalism.
“As a logical sequence Syndicalism, in its daily warfare against capitalism, rejects the contract system, because it does not consider labour and capital equals, hence, cannot consent to an agreement which the one has the power to break, while the other must submit to without redress.
“For similar reasons Syndicalism rejects negotiations in labour disputes, because such a procedure serves only to give the enemy time to prepare his end of the fight…”
Instead, Goldman writes, the Syndicalists will engage in Direct Action (i.e. protests and so forth), Sabotage (i.e. sneakily slowing down production at worksites), and the General Strike (i.e. a strike of all workers in all industries to shut down the national economy). “The General Strike, initiated by one determined organization, by one industry or by a small, conscious minority among the workers, is the industrial cry of ‘Stop the thief,’ which is soon taken up by many other industries, spreading like wildfire in a very short time.”
Now, I’ve been skirting around this the entire episode, but one of the reasons why the divisions between the different schools of socialism widened and became so contentious during these years is because of a myriad of uprisings by workers and radicals throughout world during the late 19th Century. The bloodiest years in the history of the labor movement: Next time on the Industrial Revolutions.
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Don’t forget to watch for my co-ops bonus episode coming soon! And remember, if you want to get access to the more content – the footnotes and the back catalog of bonus episodes – you need to sign up as an Industrial Revolutionary on Patreon! Go to Patreon.com/indrevepod. That’s Patreon dot com slash I-N-D – R-E-V – P-O-D. Take care now.