Unfortunately there is a lack everywhere of exhaustive statistics to show the actual divi- sion of the shares, the preference shares, etc., of the limited companies which to-day form so large a portion of the social capital, as in most countries they are anonymous (that is like other paper money, they can change owners without formalities); whilst in England, where the shares registered in names predominate and the list of shareholders thus determined can be inspected by anyone in the State Registry Office, the compilation of more exact statistics of the owners of shares is a gigantic labour on which no one has yet ventured. One can only approximately estimate their number by refer- ence to certain information collected about 43 individual companies. Still, in order to show how very deceptive are the ideas which are formed in this direction and how the most modern and crass form of capitalist centralisa- tion— the u Trust M — has in fact quite a different effect on the distribution of wealth from what it seems to outsiders to possess, the following figures which can be easily verified are given: — The English Sewing Thread Trust, formed about a year ago,* counts no less than 12,300 shareholders. Of these there are 6,000 holders of original shares with ^60 average capital, 4,500 holders of preference shares with ^150 average capital, 1,800 holders of debentures with ^315 average capital. Also the Trust of the spinners of fine cotton had a respectable number of shareholders, namely 5,454. Of these, there were 2,904 holders of original shares with ^300 average capital, 1,870 holders of preference shares with ^500 average capital, 680 holders of debentures with ^130 average capital.
With the Cotton Trust of J. and P. Coates it is similar, f The shareholders in the great Manchester Canal amount in round numbers to 40,000, those in the large provision company of T. Lipton to 74,262. A stores business in London, Spiers and Pond, instanced as a recent example * Written 1899.
t In all these Trusts the original owners or share- holders of the combined factories had to take up them- selves a portion of the shares. These are not included in the tables given.
44 of the centralisation of capital, has, with a total capital of ^1,300,000, 4,650 shareholders, of which only 550 possess a holding above These are some examples of the splitting up of shares of property in centralised undertak- ings. Now, obviously, not all shareholders deserve the name of capitalists, and often one and the same great capitalist appears in all possible companies as a moderate share- holder. But with all this the number of share- holders and the average amount of their holding of shares has been of rapid growth. Altogether the number of shareholders in England is estimated at much more than a million, and that does not appear extravagant if one considers * Rowntree and Sherwell, in The Temperance Problem and Social Reform, give the following list of the share- holders of five well-known British breweries: — Shareholders of Breweries. Ordinary Shares. Prcf. Shares.
Arthur Guinness, Son and Co...5450 3768 Bass, RatclirT and Gretton 17 Threlfalls Combe and Co.
10 Samuel Alsopp and Co...
Together, 16,604 shareholders of the whole ^9,710,000 ordinary and preference stocks. Besides, the said com- panies had issued debentures to the amount oi£6y 110,000. If we assume a similar distribution of these, we would arrive at about 27,000 persons as co-proprietors of the five breweries. Now in 1898 the London Stock Exchange list enumerated more than 119 breweries and distilleries whose capital in circulated shares alone amounted to more than ^70, 000,000, apart from the fact that of sixty- seven of these companies the ordinary shares were as vendors' shares in private hands. All this points to whole armies of capitalists of every description in the brewing and distilling trades.
45 that in the year 1896 alone the number of limited companies in the United Kingdom ran to over 21,223, with a paid-up capital of ;£i, 145,000,000,* in which, moreover, the foreign undertakings not negotiated in England itself, the Government Stocks, etc., are not included.!
included.!
This division of national wealth, for which word in the great majority of cases one may substitute national surplus value, is shown again in the figures of the statistics of incomes.
In the United Kingdom in the financial year 1893-4 (^e last return to my hand) the number of persons with estimated incomes of ^150 and over, under Schedules D and E (incomes from business profits, higher official posts, etc.) amounted to J2J,27o.\ But to that must still be added those assessed on incomes taxed for ground and land (rents, farm rents), for houses let, taxable capital investments. These groups together pay almost as much duty as the above- named groups of taxpayers, namely, on 300 against 350 millions of pounds income. § That would nearly double the number of persons referred to of over ^150 income.
In the British Review of May 22nd, 1897, * [The number in existence in April, 1907, was 43,038, with a paid-up capital of ^2,061,010,586. — Ed.]
t In 1898 it was estimated that ^2,150,000,000 of English capital was invested abroad, and its yearly increase was on an average ^5,700, 000. [In 1908, the total was estimated at ^3,000,000,000. — Ed.]
X [In 1907 the number of persons with increases over § [The figures for 1907 are ^327,900,650 as against 46 there are some figures on the growth of incomes in England from 1851 to 1881. According to those England contained in round numbers, in 1 85 1, 300,000 families with incomes from ^150 to;£i,ooo (the middle and lower bourgeoisie and the highest aristocracy of labour) and 990,000 in 1 88 1. Whilst the population in these thirty years increased in the ratio of 27 to 35, that is about 30 per cent., the number of families in receipt of these incomes increased in the ratio of 27 to 90, that is 233J per cent. Giffen estimates to-day there are 1,500,000 of these taxpayers.* Other countries show no materially different picture. France has, according to Mulhall, with a total of 8,000,000 families, 1,700,000 families in the great and small bourgeois con- ditions of existence (an average income of ^260), against 6,000,000 of the working class and 160,000 quite rich. In Prussia, in 1854, as the readers of Lassalle know, with a population of 16.3 millions, there were only 44,407 persons with an income of over 1,000 thaler. In the year 1894-5, with a total population of nearly 33,000,000, 321,296 persons paid taxes on in- comes of over ^150. In 1897-8 the number had risen to 347,328. Whilst the population doubled itself the class in better circumstances increased more than sevenfold. Even if one makes allowance for the fact that the provinces annexed in 1866 show greater numbers of the * [Mr. Chiozza Money estimates that in 1903-4 there were 750,000 persons whose means were between ^160 and ^700 per annum. — Ed.]
47 well-to-do than Old Prussia and that the prices of many articles of food had risen considerably in the interval, there is at least an increased ratio of the better-off to the total population of far more than two to one.* The conditions are precisely the same in the most industrial state of Germany, namely, Saxony. There from 1879 to x^94 the number of persons assessed for income tax was as follows: — Income. I Proletarian incomes 994048 INCREASE Absolute. Per cent.
Total * The demonstrative value of the Prussian figures has been disputed on the ground that the principles of assess- ment had been considerably changed between 1854 and the end of the century. That this fact reduces their force of demonstration I have at once admitted. But let us take the figures of the Prussian income tax for 1892, the first year after the reform of taxation of 189 1, and for 1907 where the same system ruled. There we get the following picture: — Assessed Incomes. I 5000 and over INCREASE Absolute. Per cent.
IO444 IOO.
The increase of the population was slightly over 20 per cent. We see the whole section of the well-to-do go on quicker than the population, and the quickest rate is not in the group of the high magnates, but in that of the simply easy classes. As far as fortunes are concerned, there were, in 1895 (the ^rst vear °f tne tax °n fortunes), 13,600 with ^25,000 and over; in 1908 this number was in round figures 21,000, an increase of over 50 per cent. This shows how the capitalist clan grows.
4« The two capitalist classes, those with incomes above ^480, show comparatively the greatest increase.
Similarly with the other separate German states. Of course, not all the recipients of higher incomes are " proprietors/ ' i.e., have unearned incomes; but one sees that this is the case to a great extent because in Prussia for 1895-6, 1,152,332 persons with a taxable net amount of capital property of over ^300 were drawn upon for the recruiting tax. Over half of them, namely, 598,063, paid taxes on a net property of more than ^1,000, and 385,000 on one of over ^1,600.
It is thus quite wrong to assume that the present development of society shows a relative or indeed absolute diminution of the number of the members of the possessing classes. Their number increases both relatively and absolutely. If the activity and the prospects of social democracy were dependent on the decrease of the " wealthy,' ' then it might indeed lie down to sleep.* But the contrary is the case. The prospects of socialism depend not on the de- crease but on the increase of social wealth.
Socialism, or the social movement of modern times, has already survived many a superstition, it will also survive this, that its future depends on the concentration of wealth or, if one will put it thus, on the absorption of surplus value by a diminishing group of capitalist mammoths.
* Karl Kautsky at the Stuttgart Congress of the German social democracy against the remark in my letter that the capitalists do increase and not decrease.
49 Whether the social surplus produce is ac- cumulated in the shape of monopoly by 10,000 persons or is shared up in graduated amounts among half-a-million of men makes no difference in principle to the nine or ten million heads of families who are worsted by this transaction. Their struggle for a more just distribution or for an organisation which would include a more just distribution is not on that account less justifiable and necessary. On the contrary, it might cost less surplus labour to keep a few thousand privileged persons in sumptuousness than half-a-million or more in wealth.
If society were constituted or had developed in the manner the socialist theory has hitherto assumed, then certainly the economic collapse would be only a question of a short span of time. Far from society being simplified as to its divisions compared with earlier times, it has been graduated and differentiated both in respect of incomes and of business activities.
And if we had not before us the fact proved empirically by statistics of incomes and trades it could be demonstrated by purely deductive reasoning as the necessary consequence of modern economy.
What characterises the modern mode of pro- duction above all is the great increase in the productive power of labour. The result is a no less increase of production — the production of masses of commodities. Where are these riches? Or, in order to go direct to the heart of the matter: where is the surplus product that the industrial wage earners produce above 5o 5o their own consumption limited by their wages? If the il capitalist magnates M had ten times as large stomachs as popular satire attributes to them, and kept ten times as many servants as they really have, their consumption would only be a feather in the scale against the mass of yearly national product — for one must realise that the capitalist great industry means, above all, production of large quantities. It will be said that the surplus production is exported. Good, but the foreign customer also pays finally in goods only. In the commerce of the world the circulating metal, money, plays a diminishing role. The richer a country is in capital, the greater is its import of commodities, for the countries to which it lends money can as a rule only pay interest in the form of commodities.* Where then is the quantity of commodities which the magnates and their servants do not consume? If they do not go in one way or another to the proletarians they must be caught up by other classes. Either a relatively growing decrease in the number of capitalists and an increasing wealth in the proletariat, or a numerous middle class — these are the only alternatives which the continued increase of production allows. Crises and unproductive expenses for armies, etc., devour much, but still they have latterly only absorbed a frac- tional part of the total surplus product. If the * England receives its outstanding interest paid in the form of surplus imports to the value of ^100,000,000; the greater part of which are articles of consumption.
5i working class waits till " Capital M has put the middle classes out of the world it might really have a long nap. " Capital " would expro- priate these classes in one form and then bring them to life again in another. It is not " Capi- tal M but the working class itself which has the task of absorbing the parasitic elements of the social body.
As for the proposition in my letter to the Stuttgart Congress that the increase of social wealth is not accompanied by a diminishing number of capitalist magnates but by an in- creasing number of capitalists of all degrees, a leading article in the socialist New York Volks- zeitung taxes me with its being false, at least, as far as concerns America, for the census of the United States proves that production there is under the control of a number of concerns M diminishing in proportion to its amount. M What a reputation! The critic thinks he can disprove what I assert of the division of the classes by pointing to the divisions of indus- trial undertakings. It is as though someone said that the number of proletarians was shrinking in modern society because where the individual workman formerly stood the trade union stands to-day.
Karl Kautsky also — at the time in Stuttgart — took up the sentence just mentioned and objected that if it were true that the capitalists were increasing and not the propertyless classes, then capitalism would be strengthened and we socialists indeed should never attain our goal. But the word of Marx is still true:" Increase of 52 52 capital means also increase of the proletariat. M That is the same confusion of issues in another direction and less blunt. I had no- where said that the proletarians did not increase. I spoke of men and not of entrepreneurs when I laid emphasis on the increase of capitalists. But Kautsky evidently wras captured by the concept of " Capital," and thence deduced that a relative increase of capitalists must needs mean a relative decrease of the proletariat, which would contradict our theory. And he maintains against me the sentence of Marx which I have quoted.
I have elsewhere quoted a proposition of Marx* which runs somewhat different from the one quoted by Kautsky. The mistake of Kautsky lies in the identification of capital with capitalists or possessors of wealth. But I would like, besides, to refer Kautsky to some- thing else which weakens his objection. And that is what Marx calls the organic development of capital. If the composition of capital changes in such a way that the constant capital increases and the variable decreases, then in the businesses concerned the absolute increase of capital means a relative decrease of the prole- tariat. But according to Marx that is just the characteristic form of modern evolution. Applied to capitalist economy as a whole, it really means absolute increase of capital, rela- tive decrease of the proletariat.
* Capital, I., chapter xxiii., par. 2, where it is said that the number of capitalists grows " more or less " through partitions of capital and offshoots of the same, a fact later on left wholly out of account bv Marx.
53 The workers who have become superabun- dant through the change in the organic composi- tion of capital find work again each time only in proportion to the new capital on the market that can engage them. So far as the point which Kautsky debates is concerned, my proposition is in harmony with Marx's theory. If the num- ber of workers increase, then capital must increase at a relatively quicker rate — that is the consequence of Marx's reasoning. I think Kautsky will grant that without further demur.* So far we are only concerned as to whether the increased capital is capitalist property only when employed by the undertaker or also when held as shares in an undertaking.
If not, the first locksmith Jones, who carries on his trade with six journeymen and a few apprentices would be a capitalist, but Smith, living on his private means, who has several hundred thousands of marks in a chest, or his son-in-law, the engineer Robinson, who has a greater number of shares which he received as a dowry (not all shareholders are idle men) would be members of the non-possessing class. The absurdity of such classification is patent. Property is property, whether fixed or personal. The share is not only capital, it is indeed capital in its most perfect, one might say its most refined, form. It is the title to a share of the surplus product of the national or world-wide * Note to the English edition. — I am sorry to say Kautsky did not frankly admit his error. He carped at the statistics I have adduced and replied finally that indeed the idle capitalists increased, as if I had repre- sented the capitalist class as a class of workers.
54 54 economy freed from all gross contact with the pettinesses of trade activities — dynamic capital, if you like. And if they each and all lived only as idle "rentiers, " the increasing troops of shareholders — we can call them to-day armies of shareholders — even by their mere existence, the manner of their consumption, and the num- ber of their social retainers, represent a most influential power over the economic life of society. The shareholder takes the graded place in the social scale which the captains of industry used to occupy before the concentration of businesses.
Meanwhile there is also something to be said about this concentration. Let us look at it more closely.
(c) The Classes of Establishments in the Production and Distribution of Social Wealth.
General statistics are wanting of the classes of enterprises in industry as regards England which is considered the most advanced of the European countries in capitalist production. They exist only for certain branches of produc- tion placed under the Factory Laws and for individual localities.
In the factories and workshops coming under the Factory Laws there were engaged, accord- ing to the Factory Inspector's report for 1896, altogether 4,398,983 persons.* That is not * [It would serve no good purpose to give more recent statistics, and it is impossible in some of the cases given 55 quite half the number given as actively engaged in industry according to the census of 1891. The number in the census, omitting the trans- port trade, is 9,025,902. Of the 4,626,919 remaining persons, we can reckon a fourth to a third as tradesmen in the branches of produc- tion referred to, and in some medium-sized and large businesses which do not come under the Factory Laws.
There remain in round numbers 3,000,000 employees and small masters in minute businesses. The 4,000,000 workers under the Factory Laws were distributed among 160,948 factories and workshops which yields an average of twenty-seven to twenty-eight workers per establishment.* If we deal with factories and workshops separately we get 76,297 factories with 3,743,418 employees and 81,669 workshops with 655,565 employees, on the average forty-nine workers to a factory and eight to a registered workshop.
The average number of forty-nine workers to a factory already shows what the closer ex- amination of the tables of the report confirms, that at least two-thirds of the businesses regis- tered as factories belong to the category of to follow exactly Mr. Bernstein's figures and so make accurate comparisons. Moreover, our Home Office does not now publish statistics compiled in the same way as * The particulars of 1,931 registered factories and 5,624 workshops had not come in when the report was drawn up. They would have somewhat diminished the ratio of workers to a business.
56 medium-sized businesses with six to fifty workers so that at the most 20,000 to 25,000 businesses of fifty workers and more remain which may represent, on the whole, about 3,000,000 workers. Of the 1,171,990 persons engaged in the transport trade only three-quarters can be considered at the most as belonging to large enterprises. If we add these to the foregoing categories we get a total for the workers and the auxiliaries of the large industries of between 3^ and 4 millions, and against these stand 5J millions of persons engaged in medium and small businesses. The " workshop of the world M is, accordingly, far from being, as is thought, in the stage of containing only large industries. Enterprises show the greatest diversity in size also in the British Empire, and no class of any size disappears from the scale.* If we compare with the above figures those of the German industrial census of 1895, we ^n^ that the latter, on the whole, shows the same picture as the English. The great industries occupied nearly the same position in relation to production in Germany in 1895 as *n England in 1891. In Prussia in 1895, 38 per cent, of the industrial workers belonged to the large industries. The development of large under- takings has been accomplished there and in the rest of Germany with extraordinary speed. If * German workmen who have emigrated to England have repeatedly expressed their astonishment to me at the dispersion of enterprises which they met in the wood, metal and manufacturing industries of this country. The present figures in the cotton industry show only a moderate increase in the concentration of establishments since the time when Karl Marx wrote.
57 certain branches of industry (among them the textile) are in this respect still behind England, others (machines and implements) have reached the English position on the average, and some (the chemical and glass industries and certain branches of the printing trades, and probably also electric engineering) have overtaken it. Still the great mass of persons engaged in industry belong also in Germany to small and medium undertakings. Of the ioj million persons engaged in industry in 1895 something over 3 millions were found in large under- takings, 2\ millions in medium-sized under- takings (6 to 50 persons), and 4! millions in small ones. Master artisans still numbered i\ millions. In five trades their number, as against that of 1882, had increased absolutely and relatively (to the increase of population), in nine only absolutely, and in eleven it had declined absolutely and relatively.* * See R. Calwer, "The Development of Handicraft," The figures of the imperial census of 1907 are not yet known so far as the development in regard to size is concerned. But the figures for Prussia are known, and they can be taken as a fair average for the whole Empire.
They show for trade respectively, industry and commerce together (without railways, post and telegraphs) the following figures: — Numbers Persons employed A remarkable movement towards the great establish- ments, and often two or more of the establishments 58 In France industry still keeps behind agri- culture in numbers of workpeople employed. According to the census of April 17th, 1894, it represented only 25.9 per cent, of the popula- tion, and agriculture nearly twice as much — namely, 47.3 per cent. Austria shows a similar ratio, where agriculture takes 55.9 per cent, of the population and industry 25.9 per cent. In France there were one million persons working for themselves to 3.3 million employees, and in Austria 600,000 of the former to 2\ million workmen and day labourers. Here the ratio is also very much the same. Both lands show a series of highly-developed industries (textile, mining, building, etc.), which, with respect to the size of the industry, compete with the most advanced countries, but which are only a portion of the industrial life-work of the nation.
Switzerland has, with 127,000 persons work- ing for themselves, 400,000 employees. The United States of America, which the contributor to the New York Volkszeitung above referred to says is the most developed capitalist country in the world, certainly had, according to the census of 1890, a comparatively high average of workers per establishment — namely, 3J million workers to 355,415 industrial establish- ments, i.e., 10 to 1. But the home and small industries are wanting here, just as in England.
enumerated are only departments of one and the same enterprise. The process of industrial and commercial con- centration is most obvious. But that it does not mean the disappearance of the small enterprise is no less obvious. It is only the quite small enterprise — the garret workers, etc. — that as a group shows a decrease.
59 59 If one takes the figures of the Prussian indus- trial statistics from the top downwards, one gets almost exactly the same average as that of the American census. And if one studies more closely the Statistical Abstract of the United States, one comes upon a great number of manufacturing concerns with, on an average, five or fewer workers to the establishment. On the very first page we have 910 manufactories of agricultural implements with 30,723 workers, 35 ammunition factories with 1,993 workers, 251 manufactories of artificial feathers and flowers with 3,638, 59 manufactories of artificial limbs with 154, and 581 sail-cloth and awning factories with 2,873 workers.
If the continual improvement of technical methods and centralisation of businesses in an increasing number of branches of industry is a fact whose significance scarcely any crazy reactionaries can hide from themselves, it is a no less well-established fact that in a whole series of branches of industry small and medium- sized undertakings appear quite capable of existing beside the large industries. In industry there is no development according to a pattern that applies equally to one and all branches. Businesses carried on throughout according to routine, continue as small and medium-sized undertakings, whilst branches of technical trades which were thought to be secured for small businesses are absorbed for ever one fine day by a large organisation.
A whole series of circumstances allows the continuance and renewal of small and medium 6o enterprises. They can be divided into three groups.