# The Class Struggle/Chapter 1

German title: Der Untergang des Kleinbetriebs
The Class Struggle.
I. THE PASSING OF SMALL PRODUCTION.
1. Small Production and Private Property.
The program adopted by the German Social Democracy at Erfurt in 1891 divides itself into two parts. In the first place it outlines the fundamental principles on which Socialism is based, and in the second it enumerates the demands which the Social Democracy makes of present day society. The first part tells what Socialists believe; the second how they propose to make their belief effective.
We shall concern ourselves only with the first of these parts. This again separates itself into three divisions: (1) an analysis of present day society and its development; (2) the objects of the Social Democracy; (3) the means which are to lead to the realization of these objects.
The first section of the program reads as follows: "Production on a small scale is based on the ownership of the means of production by the laborer. The economic development of bourgeois society leads necessarily to the overthrow of this form of production. It separates the worker from his tools and changes him into a propertyless proletarian. The means of production become more and more the monopoly of a comparatively small number of capitalists and landholders.
​"Along with this monopolizing of the means of production goes the crowding out and scattering of small production, the development of the tool into the machine, and a marvelous increase in the productivity of labor. But all the advantages of this transformation are monopolized by capitalists and landholders. For the proletariat and the disappearing middle class—the small business men and farmers—it means increasing uncertainty of subsistence; it means misery, oppression, servitude, degradation and exploitation.
"Forever greater grows the number of proletarians, more gigantic the army of superfluous laborers, and sharper the opposition between exploiters and exploited. The class-struggle between the bourgeoisie and proletariat is the common mark of all industrial countries; it divides modern society into two opposing camps and the warfare between them constantly increases in bitterness.
"The abyss between propertied and propertyless is further widened by industrial crises. These have their causes in the capitalist system and, as the system develops, naturally occur on an increasing scale. They make universal uncertainty the normal condition of society and so prove that our power of production has got beyond our control, that private ownership of the means of production has become irreconcilable with their effective use and complete development."
Many a man thinks be has given proof of wisdom when he says. "There is nothing new under ​the sun." There is nothing more false. Modern science shows that nothing is stationary, that in society, just as in external nature, a continuous development is discoverable.
On the nature of this social development is based the theory of Socialism. No one can understand the one without study of the other.
We know that primitive man lived, like the animals, on whatever nature happened to offer. But in the course of time he began to devise tools. He became fisher, hunter, herdsman, finally farmer and craftsman. This development was constantly accelerated, until today we can see it going on before our eyes and mark its stages. And still there are those who solemnly proclaim that there is nothing new under the sun.
A people's way of getting a living depends on its means of production—on the nature of its tools and raw materials. But men have never carried on production separately; always, on the contrary, in larger or smaller societies. And the varying forms of these societies have depended on the manner of production. The development of society, therefore, corresponds to a development of the manner of production.
The forms of society and the relations of its members are intimately connected with the forms of property which it maintains. Hand in hand with the development of production goes a development of property. So long as labor was performed with comparatively simple tools which each laborer could possess, it went without saying that he owned the product of his toil. But as the means of production have changed, this notion of property right has passed away.
​We shall examine the course of development which has brought this about.
2. Commodities and Capital.
The beginnings of capitalist society are to be found in agriculture and handicraft.
Originally the agricultural family satisfied all of its own needs. It produced all the food, clothing and tools for its own members and built its own house. It produced as much as it needed and no more. With the advance in the methods of farming, however, it came about that more was produced than enough to satisfy the immediate needs of the family. This placed the family in a position to purchase weapons, tools or articles of luxury, which it could not produce itself. Through this exchange products became commodities.
A commodity is a product designed for exchange. The wheat the farmer produces for his own consumption is not a commodity; the wheat he produces to sell is a commodity. Selling is nothing more nor less than trading a commodity for another which is acceptable to all, gold, for example.
Now the craftsman working independently is a producer of commodities from the beginning. He does not sell merely his surplus products; production for sale is his main purpose.
Exchange of commodities implies two conditions: first, a division of social labor; second, private ownership of the things exchanged. The more this division develops and the more private property increases in extent and importance, the ​more general becomes production for exchange.
This leads naturally to the appearance of a new trade; buying and selling becomes a business. Those engaged in it make their living by selling dearer than they buy. This does not mean that they control prices absolutely. The price of a commodity depends finally on its exchange value. The value of a commodity, however, is determined by the amount of labor generally required to produce it. The price of a commodity, nevertheless, seldom coincides exactly with its value; it is determined by the conditions of the market more than by the conditions of production—primarily by the relation of supply and demand.
The farmer or craftsman buys for consumption, the tradesman buys to sell. Now money used for this latter purpose is capital. One cannot say of any commodity or sum of money that by its very nature it is capital. That depends on the use to which it is put. The tobacco a merchant buys to sell is capital; that which he buys to smoke is not.
The original form of capital is merchant's capital. Almost equally old is interest-bearing capital, the profits of which are in the form of interest. As soon as these forms of capital have been developed, private property becomes something quite different from what it was in the beginning. Defenders of the present system try to distract attention from this aspect of property by talking constantly of the forms necessary to the beginnings of society. They attempt to prevent our seeing any difference between the ownership of ​a home and the ownership of a branch of industry.
At the stage of economic development now under discussion the income of the craftsman or laborer depends somewhat on his industry and skill. But it can never go beyond a fixed limit. That of the tradesman, however, is determined only by the amount of his capital. The possibilities of labor are limited; those of capital are unlimited.
So we have here a condition that would naturally lead to social development. We started with a society in which each owned certain means of production; in which, therefore, the individuals were approximately equal. The natural limitations of the income from labor and the lack of similar limitations of the income from capital would naturally tend to bring about a condition of inequality. But there is still another element of the situation to be taken into account.
Private property in the means of production implies for everyone the possibility of coming into possession of them, but it implies also the possibility of losing possession. That is, the craftsman may fall into absolute poverty. The existence of interest-bearing capital implies the existence of want. One who has what he needs will not borrow. By exploiting want, capital constantly increases it.
Here we have, then, the beginnings of modern conditions. Some "make" money without producing; others produce and remain in poverty. It is true that the evils of the system are not yet quite clear. The capitalist is dependent ​on the prosperity of the farmer and craftsman; his interest does not He in dispossessing them entirely. Whole classes are not driven into poverty. Therefore poverty is regarded as a visitation of Providence, or as the result of shiftlessness or carelessness.
This way of looking at things is still common among the small capitalist class, and representatives of the present system, editors, lecturers, etc., strive to maintain popular faith in it. Private property in the means of production was once necessary to the good of society; there was a time when the average man had a chance to own property. This condition of affairs, they would have us believe, still exists. But in reality the nature of private property has changed. The old conditions have passed away absolutely. How this came about we are now to see.
3. The Capitalist Method of Production.
In the course of the Middle Ages the handicrafts developed steadily. There was a great increase in the division of labor—e. g., weaving divided into woolen weaving, linen weaving, etc. There was also increase in skill and improvement in tools. Simultaneouly there came about a development of trade, especially as a result of improved means of transportation by water.
Four hundred years ago the handicrafts were at their height. This was an eventful time in the history of commerce. The waterway to India came into use and America was discovered, with its endless supplies of gold and silver. A flood of wealth inundated Europe, wealth ​which the European adventurers had scooped up by means of barter, deceit and robbery. The lion's share of this wealth fell to the tradesmen able to fit out ships with bold, unscrupulous crews.
At the same time there came into being the modern state, the centralized official and military state, at first an absolute monarchy. This state met the demands of the rising capitalist class and depended on it for support. The modern state, the state of developed commodity-production, draws its power, not from personal service, but from its financial income. The monarchs had, therefore, every reason to protect and favor the capitalists who brought money into the country. In return the capitalists lent money to the monarchs, made debtors of them and put them in the position of dependents. This enabled them more and more to force the political and military power into their service. The state was obliged to improve means of communication, take over colonies and carry on wars in the interest of capital.
Our text-books on economics tell us that the beginning of capital is to be found in thrift. But we have learned that its origin was an altogether different one. Colonial policies were the chief sources of wealth open to capitalist nations; i. e., capital was drawn from plundering of foreign lands, from piracy, smuggling, slave-trading and war. Even down into the nineteenth century history shows us plenty of examples of this "thrift." And "thrifty" trades-people found in the state itself a powerful ally in this sort of "saving."
​But newly discovered lands and commercial routes did more than bring wealth to the merchants; they opened up a new market for the sea-going nations of Europe, especially England. Handicraft was unable to satisfy the rapidly increasing demands of this market. These demands were on a large scale; production had to proceed on a large scale. That is, the market demanded a form of production which could and would I adapt itself to the demand; in other words, a form absolutely in command of the merchants.
The merchants naturally found it to their interest to satisfy the demand of this new market; and they had the money to purchase the necessary means, raw materials, tools, factories and labor. But where was this last to come from? So long as a man owns tools of his own and can produce with them, he will not sell himself to another. Fortunately for the merchant, rural laborers were being driven from the soil. The landlords wanted their share of the new prosperity, therefore they enlarged their scale of production and demanded a larger proportion of the product. So agricultural laborers were forced to the doors of the new-built factories.
Thus the foundations of capitalist industry were laid by means of expropriation, by means of a revolution as bloody as any in history.
The separation of great masses of workers from the means of production, their transformation into propertyless proletarians, was a condition necessary to capitalist production. Economic development made the change inevitable. But the rising classes were not content to sit by and ​watch the course of events; they resorted to violence to accelerate the change. It was through violence of the most brutal, repulsive kind that capitalist society was ushered in.
4. The Death-Struggle of Small Production.
At first the new system differed but little from the old so far as external appearance was concerned. The capitalist delivered raw material to his hired workers and collected from them the finished product. Later he found it advantageous to gather them in a large building called a factory.
As soon as workers produced together in a factory, it was discovered that a division of labor increased the profits. Gradually systems of production became so developed that each operative had to make but a single motion or perform a single operation. That is, the laborer had been reduced to the level of a machine. Only one step remained—to replace him with a machine, and that step was soon taken. It was made possible by the development of science—and especially by the application of steam-power to industrial processes. The introduction of machinery meant an industrial revolution. With this change economic development, became the triumphant march of capitalism.
Between 1770 and 1789 the first practical machines were introduced into the English textile industry. The steam engine was invented at the same time. From that period on the machine conquered one branch of industry after another and one country after another. It has placed it ​in the power of a factory operative to do the work of several hundred handicraftsmen.
Under these conditions the factory rules, and the days of handicraft, of independent production, are numbered. What remains is carried on chiefly by unfortunates who cannot find places in the factory system.