First, a great number of trades or branches of trades are nearly equally adapted for small and medium undertakings as for large enter- prises, and the advantages which the latter have over the former are not so important that they can outweigh the peculiar advantages of the smaller home industries. This is, as everyone knows, the case, amongst others, with different branches of wood, leather, and metal work. Or, a division of labour is found where the large industry carries out one-half and three-quarters of the manufacture and when the finishing pro- cesses are done by smaller enterprises.
Secondly, when the product must be made accessible to the consumer, small establish- ments are, in many cases, favourable to its manufacture, as is shown most clearly in bakeries. If only the technical side was con- cerned, baking would long ago have been absorbed by the large industries, for the many bread factories yielding a good profit show that they can be carried on with good results. But in spite of, or beside, them and the cake factories which are gradually winning a market, the small and medium-sized bakeries hold their ground owing to the advantage they offer for trade with consumers in their vicinity. The master bakers are sure of their lives for some time to come as far as they have to reckon only with capitalist under- takings. Their increase since 1882 has certainly not kept step with the increase of 61 population, but is still worth mentioning But baking is only an extreme example. For a whole series of trades — namely, where produc- tive and service-performing labour are mixed — the same thing holds good. We will mention here the farrier and wheelwright trades. The American census shows 28,000 farrier and wheelwright businesses with a total of 50,867 persons, of which just one-half are masters. The German trade statistics show 62,722 black- smiths and farriers; and it will certainly be a good while before the automatic vehicle driven by steam power, etc., will extinguish their spark of life in order to breathe life into new small workshops, as everyone knows bicycles have done. Similarly with the trades of tailors, shoemakers, saddlers, carpenters, carpetmakers, watchmakers, etc., where work for customers, and, in varying degree, repairing or shop- keeping, will keep alive independent existences of which certainly many, but not all, by any means, represent only proletarian incomes.
Last, but not least, the large industry itself gives life to smaller and medium trades partly by production on a large scale producing a corre- sponding cheapening of materials of work (auxiliary materials, half-manufactured goods), partly by the liberating of capital, on the one hand, and the * 'setting free" of workers on the other. In great and small amounts new capital is * In Prussia the increase from 1895 *° I(W was from 52,045 to 62,985, over 20 per cent.; whilst the population increased only by 19 per cent.
62 always entering the market seeking utilisation, and the demand on the market for new goods increases steadily with the wealth of the com- munity. Here the shareholders mentioned earlier play no small part. The market could not, in fact, live on the handful of millionaires even if the "hand" counted some thousand fingers. But the hundreds of thousands of rich and well-to-do have something to say to it. Nearly all the articles of luxury for these classes are, in the beginning — and very many also later on — manufactured in small and medium busi- nesses, which, however, can also be capitalistic businesses, according as they work upon dear materials and use costly machines (manufac- ture of jewellery, work in fine metals, art embroidery). It is only later that the large industry (when it does not itself take over the articles referred to), by cheapening the materials of work, " democratises M the one or the other new luxury.
In spite of the continued changes in the grouping of industries and the internal organ- isation of the establishments, we have this picture on the whole to-day: that the large industry does not continuously absorb the smaller and medium industries, but that it is growing up beside them. Only the very small enterprises decline relatively and absolutely.* But as regards the small and medium industries they do increase, as is shown for Germany by the following figures for employees in trades: * This is confirmed by the new Prussian statistics quoted in a former note.
63 Increase Small medium businesses (6-10 persons) 500,097 833,409 66*6 The population increased in the same period by 13.5 per cent. only.
Although in the interval treated the large industries increased their armies at a still greater rate — by 88.7 per cent — that has only meant in isolated cases the total absorption of the small businesses. In fact, in many cases no — or no more — competition takes place between large and small enterprises (think of the great works for making machinery and bridges). The example of the textile industry, which is commonly brought into our literature, is in many respects misleading. The increase of productivity which the mechanical mule represents over the old spindle has only recurred now and again. Very many large undertakings are superior to small or medium businesses, not on account of the higher productivity of the labour employed, but simply from the size of the undertaking (building of ships), and they leave the spheres of business of the small industries quite, or, to a great extent, untouched. He who hears that Prussia in the year 1895 saw nearly double as many workers occupied in large industries as in 1895; that these in 1882 were only 28.4 per cent., but in 1895 were 38 per cent, of the total number employed in all trades, might easily fancy that small industries would soon be a thing of the past, and that they had played their part in the social ecomony. The figures quoted show that the rapid extension 64 and expansion of large industries represent only one side of social development.
As in industry so in commerce. In spite of the shooting up of the large warehouses the medium and small commercial businesses main- tain their footing. We are, of course, not concerned here with denying the parasitic element in commerce, particularly as regards the so-called small retail business. Neverthe- less, it must be observed that also with regard to that, much exaggeration has crept in. Wholesale production and the steadily increas- ing intercourse all over the world are always throwing greater quantities of commodities on the market which in some way or other must be brought to the consumer. Who would deny that this could take place with less expenditure of labour and cost than by the present retail trade? But as long as it does not take place this kind of trade will persist. And just as it is an illusion to expect from the large industries that they will absorb in a short time the small and medium industries, so is it also Utopian to expect from the capitalistic warehouses an absorption to a considerable extent of medium- sized and small shops. They injure individual businesses and here and there temporarily bring the whole of the small trades into confusion. But after a time the latter find a way of com- peting with the large shops and of making use of all the advantages which local associations offer them. Fresh specialising and fresh com- bining of businesses are begun, new forms and methods of carrying on business are started.
65 The capitalistic warehouse is far oftener a product of the great increase of the abundance of goods than an implement of the annihilation of a parasitic small trade. It has had more effect in rousing the latter from its routine and breaking it of certain monopolist customs than in exterminating it.
The number of shop businesses increases steadily; it rose in England between 1875 and 1886 from 295,000 to 366,000. The number of persons employed in commerce rose still more. As the English statistics under this heading were taken on a different basis from those of 1 881,* we will take the figures from the Prussian statistics.
There were in Prussia in shops and carrying trades (excluding railways and post office busi- ness): — Increase Per cent.
n businesses with 2 and fewer assistants rt n 6-50 „ „ „ 51 assistants and more The increase is proportionately the greatest in the large businesses, but these do not represent much more than 5 per cent, of the whole. It is not the large businesses that offer the most deadly competition to the small ones; the latter provide it among themselves. But in proportion there are not very many corpses. And the scale of businesses remains unhurt in its composition.
* As far as appears from them, they show an increase of over 50 per cent, in the last decade.
66 The small medium-sized shops show the greatest increase.
Finally, when we come to agriculture, as far as concerns the size of separate undertakings, we meet, in our times, with a movement all over Europe, and partially in America, which appar- ently contradicts everything that the socialistic theory has hitherto advanced. Industry and com- merce showed only a slower movement upwards in large undertakings than was assumed, but agriculture shows a standing-still or a direct retrogression in regard to the size of holdings.
As regards Germany, the census of occupa- tions taken in 1895, as against 1882, shows the relatively greatest increase in the group of peasant medium-sized holdings (5 to 20 hec- tares)— namely, 8 per cent. — and still greater is the increase in the area covered by the whole of them — namely, 9 per cent. The peasants' small holdings following next below them (2 to 5 hectares) show the next greatest increase: 3.5 per cent, increase in the number of holdings and 8 per cent, increase in extent of land held. The very small holdings (allotments) (under 2 hectares) have an increase of 5.8 per cent, in number and 12 per cent, in land occupied, yet the portion of this land used for agricultural purposes shows a diminution of 1 per cent. The holdings already partially capitalistic (20 to 100 hectares) show an increase of not quite 1 per cent., which falls to the land cultivated as forest, and an increase of not quite £ per cent, is shown by the large holdings (more than 100 hectares).
67 Here are the figures referred to for 1895: — No. of hectares used Total for agricultural extent in Kind of Holding. No. of Holdings, purposes. hectares.
Very small (2 hectares and under)...3,236,367 1,808444 2,415414 Small peasants' holdings (2-5 hectares) 1,016,318 3,285,984 4,142,071 Over two-thirds of the total area fall under the three categories of peasant farms, about one-third under large holdings. In Prussia the proportion of peasant holdings is even more favourable; they occupy nearly three-fourths of the agricultural area — 22,875,000 out of If we turn from Prussia to its neighbour, Holland, we find: — Holdings Increase or Area of Holding.
decrease.
Per cent, 1-5 hectares Over 50 hectares 3,5io Here the large holdings have actually decreased and the small medium peasants' hold- ings have considerably increased.* In Belgium, according to Vandervelde,t the ownership of the land as well as the occupation of the soil has yielded to a continued decentral- isation. The last general statistics show an increase of owners of land from 201,226 in the year 1846 to 293,524 in the year 1880; an in- crease also of tenants of land from 371,320 to 616,872. The total cultivated agricultural area of Belgium consisted in 1880 of not quite * See W. H. Vliejen: Das Agrarprogramm der nieder- ländischen Sozialdemokratie, Neue Zeit xvii., 1, p. 75.
t Der Agrasozialismus in Belgien, Neue Zeit xv. 1, Holdings.
Extent of Holding.
1,083,833 hectares 68 2,000,000 hectares, of which over one-third were cultivated by their owners. The division of agricultural allotments reminds one of the Chinese agrarian conditions.
France in the year 1882 had the following agricultural holdings: — Under i hectare 1-10 hectares Of the holdings between 40 and 100 hectares there are in round numbers 14 million hectares, and of those over 200 hectares 8,000,000, so that, on the whole, the large holdings represent between a fifth and a sixth of the agriculturally- cultivated area. The smaller, medium, and large peasants' holdings cover nearly three-quarters of French soil. From 1862 to 1882 the holdings of 5 to 10 hectares had increased by 24 per cent; those between 10 and 40 acres by 14.28 per cent. The agricultural statistics of 1892 show an increase of the total number of holdings of 30,000, but a decrease in the last-named category of 33,000, which shows a further sub-division of holdings of land.
But how does it stand in England, the classic land of large ownerships of land and of capital- istic farming of the soil? We know the lists of mammoth landlords which from time to time appear in the press as an illustration of the con- centration in the ownership of land in England, and we know the passage in Capital where Marx says that the assertion of John Bright that 150 69 69 landlords own the half of British land and 12 the half of Scottish, has not been denied.* Now, though the land of England is centralised by monopolists, it is not so to the extent that John Bright pronounced. According to Rrodrick's English Land and English Landlords there were out of the 33 millions of acres of land in England and Wales entered in Domesday Book, 14 millions, in round numbers, the property of 1,704 landlords with 3,000 acres each or more. The remaining 19 million acres were divided among 150,000 owners of one acre and more, and a large number of owners of small plots of land. Mulhall gave, in 1892, for the whole of the United Kingdom, 176,520 as the number of owners of more than 10 acres of land (altogether ten-elevenths of the area). How is this soil cultivated? Here are the figures of 1885 an<^ 1895 for Great Britain (England, with Wales and Scotland, but without Ireland), changed into hectares for the sake of more convenient comparison.! These were enumerated: — Holdings.
Increase or decrease.
2-20 hectares...Here, too, is a decrease of the large and the very large holdings and an increase of the small and medium-sized ones.
The figures, nevertheless, tell us nothing of f According to the ratio of 1 acre = 40 acres, which is not quite exact, but which appears admissible for the purpose of comparison. The numbers are taken from the Blue Book on Agricultural Holdings.
7o the cultivated area. Let us complete them by the figures of the different areas coming under the various classes of holdings. They make a positively bewildering picture. There were in Great Britain in 1895: — Percentage of Acres.
Total area.
Holdings under 2 hectares* I'll Holdings of 2-5 »» V w »» *» >» » According to this 2j to 28 per cent, of the agri- cultural land of Great Britain is in large hold- ings, and only 2.46 per cent, is in very large holdings. On the other hand, over 66 per cent, is in medium and large peasants' holdings. The proportion of the peasant holdings (where, nevertheless, capitalistic large peasant holdings predominate) is greater in England than in the average in Germany. Even in England proper the holdings between 5 and 120 hectares com- prise 64 per cent, of the cultivated area, and nearly 13 per cent, of the area only is in holdings of over 200 hectares.* In Wales, quite apart from small allotments, 92 per cent., in Scotland J2 per cent, of the holdings are peasant holdings of between 2 and 100 hectares.
Of the cultivated area, 61,014 holdings with * Of which 579,133 plots come under 1 acre.
I [In 1907, 21.78 of all holdings in England were between 1 and 5 acres, and only 3.95 holdings were over 300 acres. The same figures for Wales were 16.91 and 0.66; for Scotland 22.40 and 3.66. — Ed.]
7i 4-6 millions of acres of land were the property of their cultivators, 19,607 holdings were partly the property and partly leased, and 439,405 holdings only were on leased land. It is well known that in Ireland the small peasant class or small tenant class predominates. The same holds good for Italy.
There can, then, be no doubt that in the whole of Western Europe, as also in the Eastern States of the United States, the small and medium agricultural holding is increasing every- where, and the large and very large holding is decreasing. There is no doubt that the medium holdings are often of a pronounced capitalistic type. The concentration of the enterprises is not accomplished here in the form of annexing an ever greater portion of land to the farm, as Marx saw in his time,* but actually in the form of intensification of the cultivation, changes in cultivation that need more labour for a given area, or in the rearing, etc., of superior cattle. It is well known that this is to a large extent (not altogether) the result of the competition between the agricultural states or agricultural territories of Eastern Europe and those over the seas. Also these latter will be in a position for a good while yet to produce corn and a number of other products of the soil at such cheap prices that a substantial dis- arrangement of the factors of development is not to be expected from a change in this respect.
72 72 Although the tables of statistics of income in the most advanced industrial countries may partly register the mobility, and with it the transitoriness and insecurity, of capital in modern economy, and although the incomes or fortunes registered may be to an increasing extent paper possessions which a vigorous puff of wind could indeed easily blow away; yet these rows of incomes stand in no fundamental opposition to the gradation of economic unities in industry, commerce, and agriculture. The scale of incomes and the scale of establishments show a fairly well-marked parallelism in their divisions, especially where the middle divisions are concerned. We see these decreasing nowhere, but, on the contrary, considerably increasing everywhere. What is taken away from them from above in one place they supple- ment from below in another, and they receive compensation from above in one place for that which falls from their ranks below. If the collapse of modern society depends on the dis- appearance of the middle ranks between the apex and the base of the social pyramid, if it is dependent upon the absorption of these middle classes by the extremes above and below them, then its realisation is no nearer in England, France, and Germany to-day than at any earlier time in the nineteenth century.
But a building can appear outwardly un- changed and substantial and yet be decayed if the stones themselves or important layers of stones have become rotten. The soundness of a business house stands the test of critical 73 periods; it remains, therefore, for us to investi- gate what is the course of the economic crises which are peculiar to the modern order of pro- duction, and what consequences and reactions are to be expected in the near future from them.
(d) The Crises and Possibilities of Adjust- merit in Modern Economy.
1 ■ The contradictions inherent in the move- ment of capitalist society impress themselves upon the practical bourgeoisie most strikingly in the changes of the periodic cycle through which modern industry runs, and whose crowning point is the universal crisis.* ' — Marx, Preface to the second edition of Capital.
In Socialist circles the most popular explana- tion of economic crises is their derivation from under-consumption. Friedrich Engels, how- ever, has on several occasions combated this idea sharply — most sharply, probably, in the third part of the third chapter of the polemical treatise against Diihring, where Engels says that under-consumption by the masses may well be "also a condition of crises," but that it explains their presence to-day just as little as their former absence. Engels illustrates this by the conditions of the English cotton industry in the year 1877, and declares it to be a strong measure in the face of those conditions * * to explain the present total stagnation in the sale of cotton yarns and textile fabrics by the under- consumption of the English masses and not by 74 the over-production of the English cotton manu- facturers."* But Marx himself has also occasionally pro- nounced very sharply against the derivation of crises from under-consumption. "It is pure tautology," he writes in the second volume of Capitalj ' * to say that crises rise from a want of consumers able to pay." If one wished to give this tautology an appearance öf greater reality by saying that the working classes receive too small a portion of what they produce, and that the grievance would therefore be redressed if they had a larger share, it can only be observed that "the crises are each time preceded by a period in which the workers' wages rise and the working classes actually receive a relatively greater share than usual of the yearly produce destined for consumption." It thus would appear that capitalist production "includes conditions independent of good or evil inten- tions— conditions which only permit of tempo- rarily relative prosperity for the working classes and then always as a stormy bird of a crisis, "t To which Engels adds in a footnote: "Ad notam for the adherents of Rodbertus' theory of crises."
A passage in the second part of the third * Third edition, pp. 308, 309. [In a footnote to this Engels remarks: "The explanation of crises by under- consumption originated with Sismondi, and had with him a certain justification." "Rodbertus," he says, "bor- rowed it from Sismondi and Diihring copied it from him." In the preface to the Poverty of Philosophy Engels also argues in similar fashion against the theory of crises put forth by Rodbertus.]
75 volume of Capital stands in apparent contradic- tion to all these statements. There Marx says about crises: "The last reason for all social crises always is the poverty and limitation of consumption of the masses as opposed to the impulse of capitalist production to develop the productive forces, as though only the absolute capacity for consumption of the community formed their limit. "* That is not very different from the Rodbertus' theory of crises, for with him also crises are not occasioned simply by under-consumption by the masses, but, just as explained here, by it in conjunction with the increasing productivity of labour. In the passage quoted by Marx, under-consumption of the masses is emphasised even in contradistinc- tion to the anarchy of production — disparity of production in the various branches and changes of prices which produce temporarily general depressions — as the last reason of all true crises. As for any real difference of conception appearing here from that expressed in the quotation given above from the second volume, an explanation must be sought in the very different times in which the two sentences were written. There is an interval of between thir- teen to fourteen years between them, and the passage from the third volume of Capital is the earlier one. It was written by 1864 or 1865, whilst the one out of the second volume must have been written about 1878.! In another