State Monopoly and Socialism

The demand for the state ownership of private enterprises used to be the most important part of socialist propaganda. The present-day state or municipal enterprises thereby constitute a kind of run-up to socialism and are therefore considered state and municipal socialism; their effective adaptation to needs gives a foretaste, as it were, of the order and efficient economic organization of the whole society under socialism. True, this view, at least in German social democracy, actually never came to full development, since the difficult practice of the class struggle dominated all thought and provided the propaganda, but in countries like England it still determined the character of the socialist labor movement and its propaganda to this day.

This demand for the state ownership of private companies dates back to the time of small-capitalism and fits entirely into its proportions. Abolition of exploitation and organization of production, were the two great aims of socialism. That the state is substituted for private entrepreneurs means nothing more than that organization replaces profligacy and anarchy. The state, as the representative of a multitude of bourgeoisie and of an even greater petty bourgeoisie, only needed to be made more democratic and a true people's state, in order to abolish exploitation at the same time as profligacy and competition. The common ownership of many urban monopolies, such as gas, waterworks and streetcars, often had the character of a petty-bourgeois resistance against the exploitation of the population by a few big capitalists. This example needed only to be imitated on a large scale, for the whole country, by the whole working people against all capitalists, and we would see before us in reality: the social revolution.

First of all, the state is moving more and more away from the essence that fits its intended role; and then, in the cartels and trusts, capital has already created an economic organization of a completely different nature. Thus the Social-Democratic view of state exploitation also had to undergo a change. This first appeared in Germany. Here it was above all the peculiar nature of the state that urged this. The German state, as Bismarck had arranged it, bore from the beginning, all the characteristics of a powerful state, oppressing the whole people. Could he, as the representative of the common good, act against the exploitative capitalists, he, who with his police force and police spies persecuted the workers far more cruelly and hatefully than the private entrepreneurs? Could he represent the interests of the consumers against the great monopolists, when by protective rights he had handed the masses over to the usury of the jonkers and of the iron magnates? The workers in the state enterprises were no less exploited, and in the process were politically even more unfree than those in the private companies. No wonder, then, that at the Berlin Party Congress in 1892 the German party spoke out sharply against state socialism and rejected all agreement with it. The center of gravity of socialist propaganda still lies not in the opposition between public and private enterprise, but in the great opposition between the socialist and the present state. When this decision was made, the modern organization of economic life by cartels, trusts and banking institutions had hardly begun.

Through these the question of state exploitation took on an entirely different appearance. The profligacy, which lies in the unbridled anarchy of free competition, is increasingly being eliminated by big-capital. What used to be imagined as a powerful, revolutionary act of a proletarian state power, is already, as it were a complicated organic process of growth, through the concentration of capital and corporations, the swallowing up of the small ones, which are being exterminated or made into vassals or affiliates, and through the creation of interest organizations, being established by big-capital itself. The future victorious working class no longer needs to organize the companies into parts, but it must take over the existing organization and change the conditions of work.

Now what should be our attitude toward state monopolies? It is determined by the role of the state in modern capitalism. Of course there can be no question of the state acting as the representative of the great masses against these organizations of capital. State power has become an organ of combined big-capital. But it faces it differently from the former bourgeoisie; it no longer has dominance over the individual as the representative of the masses, but the capital organizations in their own right often face it as an equal power. The state must look after their common interests; to this end, it is sometimes necessary to act itself as an entrepreneur or to regulate freight rates. In Germany, for example, the state must support the social power of the cartels against foreign countries by its physical armed force. In the country, it must keep the great masses calm either by concessions or by police power. This representation of common interests is not without clashes; and all too often the state draws the short straw because it cannot stand up to the economic power of a closed group, an interest group of industrialists or bankers or a cartel, which pushes its own interests. These differences, however, always remain domestic squabbles; the state and the monopolists are not two adversaries of different kinds; the lords of the monopoly are at the same time the masters of the state.

Thus the old formula of state exploitation completely loses its meaning for social democracy. What reason could there now be for preferring a state monopoly to a private one? While the latter exploits consumers for personal gain, the former does no less for the benefit of the treasury. If the giant enterprises of concentrated big-capital are almost impossible to attack with the resources of the trade union, the state enterprises make the workers even more enslaved. Certainly the parliament could influence the state monopoly; but in Germany, for example, the Reichstag does not govern the state and the bourgeois parliamentary majority ensures that popular interests do not prevail. However, the influence exerted by the criticism of our representatives in parliament is not limited to state enterprises. They concern themselves with the condition of the miners in Germany just as much as with the condition of the railroad workers in the Netherlands.

Against private enterprises the proletariat has as its weapon the power of its organization; against the state it has only this same power: organization. In this question, now topical in Germany because of the oil monopoly and in the Netherlands because of the tobacco monopoly, nothing can be done with the old dogmatic formula that social democracy is fundamentally in favor of state exploitation. The attitude of social democracy is determined by the efficiency question, namely whether there is a direct interest of the proletariat or of our struggle involved in state exploitation. Thus, our attitude cannot be difficult in the case of a private monopoly with concession, under supervision and share of profits by the state and in the case of solid exploitation of consumers. Whether one says, as it does in a series of articles of the German radical party press: we do not give a monopoly to a state, which tries to oppress the workers and plunder the masses, — or, as Hilferding says in the Neue Zeit: we give the state the monopoly only under the condition that it does not exploit the masses — only makes a difference in outward form, but amounts to roughly the same thing. Of course on the assumption that one does not regard empty promises and paper paragraphs as valuable realities.

If one now eliminates state exploitation from the present program of social democracy, is not something essential, precisely socialism, lost for us? No, because the essence of socialism is the class struggle, the conquest of rule by the proletariat, which will abolish exploitation. Capital and working class face each other, as the two great organizational powers, fighting with each other for the control of production. The state cannot help us in this, not even formally; it is on the other side. The struggle against the state and against monopolistic big-capital (of the cartels and trusts) is one and the same struggle, which must be waged against them together with the weapon of proletarian organization. Only the overthrow of this political and economic organization of capital will make it possible to carry through an organization of labor in the socialist sense.