The Breakdown of Socialism

Preface

Tus book is based on a series of articles published under the same title in The Times. They were the result of a tour of inquiry made on the Continent to ascertain the progress of Socialism since the war, as explained in the Introduction. I did not know what I should find; that was why I went. What I did find was a situation for which the best short title I could think of was the word ‘‘ Breakdown.” And I have not been able to think of a better one since. But if I had found Socialism successful, I should certainly have said so. Why not? It would have been quite as interesting. In response to many requests for republication I have expanded those articles, and added much new matter, including two chapters on Russia, in order to make the treatment more complete than is possible within the limits of a newspaper.

I have to thank The Times for permission to republish that material in the present form; also the Foreign Office for facilitating my inquiry; Baron Palmstierna, the Swedish Minister, for permission to use Mr Sandler’s lecture in the Appendix; Mr G. B. de Montgomery, for the version of the Swedish Social Democratic Party’s programme; Count Ledebur, for permission to publish the letter in Chapter VI. ; and other gentlemen, too numerous to mention, in the several countries visited, for their invaluable assistance on the spot. I also wish to express my obligations to the International Labour Office, whose publications are a mine of accurate information, of which I have made free use in the chapters on “ Russia” and on “‘ The Real Movements of To-day.”

: A. SHADWELL,

157622

‘BREAKDOWN ” may seem a paradoxical term to use when Socialism, as a political movement, has been borne widely and rapidly upwards to place and power. Exception will probably be taken to it, and perhaps some explanation is desirable. As already indicated in the Preface, I use it deliberately, in a plain sense, not paradoxically. When anything breaks down it does not necessarily come to an end: it comes to a temporary stop, and may even run back a little. When some adjustments have been made it may go on again. That seems to me to fit the case fairly well. It certainly applies to the Bolshevist variety of Socialism.

It is undeniable that Socialism has been put to the test of reality in recent years as it never has been before, and that in some respects it has broken down. I think myself that it is breaking down in others, as will appear in due course. But before going any farther it is necessary, in view of the confusion surrounding the term “ Socialism,’’ to state the meaning here attached to it. I use it to signify two things, which are distinct but intimately connected—namely, (1) a political movement, organized nationally and internationally, for securing the control of public affairs in order to establish (2) a new economic order based on the common ownership and control of capital in place of the present order, which rests on the legal basis of private ownership, and is called Capitalism, Socialism certainly presents itself, and is commonly thought of, in these two forms, the first as means to the second, which is the end. It has other aspects ; but they are matters of theory, susceptible of argument but not of objective examination, which is my present purpose. The question with which I am concerned is : How has Socialism in the two definite forms just indicated fared under the strain of war and its after-effects ?

The first effect of the war was to break up the movement completely as an international organization. It is not necessary to prove this, because the fact was patent to all the world, and it has been constantly emphasized and deplored by Socialists in all countries. But it is an important side of the question, and cannot be altogether passed over, for two reasons. The first is that it furnishes a striking example of the illusions to which Socialists are peculiarly susceptible ; the second, that it has left lasting effects, from which the movement has not yet recovered. With regard to the illusion, the event showed that the confident hopes—and more than hopes, the plans—of the international organization evaporated at the touch of a stern reality. For nearly fifty years before 1914, ever since 1866, opposition to war other than class war had been a prominent feature of Socialist policy ; and from 1900 onwards it had assumed a more and more important place among the subjects of discussion at successive congresses of the Second International, where it was insisted on with a growing emphasis, which gradually hardened into a determination to prevent war and a belief in the power of the organization to prevent it, for which plans were outlined at a special congress in 1912.1 The reason for this attitude is obvious. No doubt many members were inspired by a humanitarian motive, but they have no monopoly of that, and events in Russia have shown that Socialists can be incredibly devoid of it in carrying out their theories. There is a more practical reason in the fact that the united class war, which is the object of International Socialism, is absolutely paralysed by war between nations, which must therefore be opposed and prevented at all costs. But when the time came to put these intentions into practice, and break down the will to war, the dog it was that died, so to speak. It was Socialism that broke down, and that in no doubtful manner, but with a resounding crash. The contrast between expectations and events was indeed dramatic. Never have men, setting out to accomplish something, more completely miscalculated the forces with which they had to deal and their own puny strength. They were pygmies in the grasp of a Titan, or like gnats striving against a tempest. Most were swept away by it, and the few who were not escaped into holes and corners. Their impotence was absolute.

In recalling this experience I am uttering no reproach and passing no moral judgment : but I suggest that it is instructive.

1 See The Socialist Movement, Part I., p. 151.

The miscalculation of forces revealed by this attempt to reach the moon with a garden-ladder is not accidental, but typical of a particular cast of mind or disposition, which may have other merits, but is exceptionally prone to illusions, and therefore likely to be at fault—as it has been on innumerable occasions— when it comes up against the realities of life and human nature.

The Soviet leader, Stalin, who appears at the time of writing to have overtopped all his colleagues and to have fairly grasped the sceptre of Lenin in his fist, has some very caustic remarks on the Second International and this breakdown. They were uttered in a series of lectures on “ The Foundations of Leninism,”’ delivered at the Swerdlow University, and published in Vienna, with a Preface by Bela Kun, in 1924:

“With regard to the political phrases and resolutions of the parties forming the Second International, it is sufficient to recall the watchword ‘ War against War’ in order to grasp the utter sham and humbug of the political practice of these parties, who know how to mask their counter-revolutionary acts with proud revolutionary slogans and resolutions. Who does not remember the proud demonstration of the Second International at the Basle Congress, where the imperialists were threatened with all the terrors of insurrection in case they should dare to begin war, and where the terrible motto ‘War against War’ was proclaimed? But who does not also remember that soon after, immediately on the outbreak of war, this resolution was pigeon-holed and the workers received the new word of command—to murder each other for the glory of the capitalist Fatherland? ’’?

The sarcasm is justified; but the objects of Stalin’s scorn might retort that they have no monopoly of illusions and fine phrases, which turn out to mean nothing at all, or something quite different, when exposed to the rude touch of reality. The history of Socialism in all its forms is, through and through, one long tale of illusions. Each of its innumerable sects has perceived the illusions of the others but been happily blind to its own. None have cherished more than the Russian Communists ; and though they have been forced to abandon some,

1 Lenin und der Leninismus, p. 23.

as we shall see in the next chapter, they still cling obstinately to others.

As a political movement, then, Socialism collapsed, both nationally and internationally, at the touch of war. This was the first breakdown. It is past, and a strong revival has since taken place ; but it is not the same. The event has left lasting effects in the division that we see to-day. Previously the international movement had been represented by a single organization for more than twenty years after the expulsion of the extreme Left Wing in 1893. It still contained discordant elements, holding opposed opinions ; but they managed to keep together and present an appearance of unity. That has gone. The war converted latent or suppressed antagonism into open conflict and split the movement into two opposing camps. This became evident with the attempts at revival initiated during the war, and the division deepened into an organized struggle when the war was over. The founding of the Third International in 1919 by the triumphant Bolshevists in Russia was a declaration of war against those who were trying to revive the Second International. The latter eventually succeeded in doing so in 1923, and since then the rival organizations have confronted each other, each striving to win the support of the proletariat—as they say abroad, in Marxian phraseology—or the trade unions, as we say here.

As it stands, then, the movement is sharply divided into Right and Left, instead of being united. The one is labelled Socialism, the other Communism ; but, as so used, these terms do not refer to the aims, but only to the means. That is to say, they do not signify a difference of attitude towards the existing economic order and the new one that is to replace it; the difference between them has to do with the means employed to abolish the old and set up the new. Both stand for the abolition of Capitalism, and so far support each other ; but they would set about it in different ways. Socialism aims at securing power by constitutional means and then gradually abolishing Capitalism ; Communism aims at seizing power by an act of revolutionary force and then completely and compulsorily transforming the economic order all at once. This distinction is now ae)

familiar and generally understood, but it is necessary to state it here because of its bearing on the main subject to be presently discussed, which is the feasibility of the proposed economic transformation, as shown by the actual course of events in recent years. Both methods of realizing Socialism in the sense of a new economic order have been employed—the Communist method by the Russian Revolution of November 1917, and by sundry abortive attempts to imitate it elsewhere; the Socialist method by the assumption or acceptance of responsibility, partial or complete, for the administration of affairs by Socialist parties in several countries.

Much less is known about the latter than about the Russian experiment. Bolshevism is always with us; but very little attention has been paid to the proceedings of constitutional Socialism, though its advance in political power denotes a much wider and deeper-seated change than the violent revolution that overwhelmed Russia nine years ago. This advance of constitutional Socialism has come about as an after-effect of the war in spite of the division into Right and Left, which has not only split the international movement in two, but has had the same effect in some measure within every country. In some the division has had little influence ; in others it has greatly weakened the movement; and it is still active. The relative strength of Communism has waxed and waned in different countries in a curious manner, which seems to be determined largely by the amount of money provided for propaganda. It is a factor in the general situation not to be ignored, but outside Russia it has everywhere been defeated by the other alternative method of realizing Socialism which the war has brought into the sphere of actual politics.

The whole movement has, in fact, passed into a new stage ; it has ceased to be a mere agitation or bid for power and has entered the field of political action. The definite division into Right and Left, formerly latent, but now developed by the war into organized parties, gives the world an opportunity of studying both methods in operation. The Communist method, applied in Russia and attempted elsewhere, is by its very nature the more complete, and we have a great deal of information

II about it; but the other has also been brought to the test of practical experience, and that more widely, though necessarily in a more tentative form. There is not sufficient material for a conclusive judgment upon it ; that must wait for further developments, which I have no doubt will come, for the movement 1s still marching on. But already there is enough to give some insight into the practical problem of realizing Socialism as an economic order of society by constitutional means and some indication of the probable outcome of attempts to solve it. There is certainly enough to deserve more study than it has yet received in this country.

It is a question of evidence ; and in order to appreciate fully the bearing of the present situation it is necessary to put It 1n a historical setting and take account of the evidence previously available.

In my book on The Socialist Movement, published last year, I have pointed out that the history of Socialism, since the term was originally coined to signify an organized movement for the economic transformation of society, falls into three periods or phases :

(1) From its origin after the close of the Napoleonic Wars to its collapse in 1848 ;

(2) From its revival in Germany in 1863-1864 to the outbreak of war in 1914;

(3) The present period, which began in 1917.

These three periods of activity, separated by two intervals of suspended animation, or at least quiescence, present quite different features. The first phase, confined to France and England, was marked by an immense profusion of ideas and by constructive aims, to be realized peacefully by voluntary action ; the second, by the dominance of a single idea, purely destructive in character—namely, the class war—to be pursued by agitation and consummated by the overthrow of the existing order on a world-wide scale; the third, in which we now are, by the accession of Socialists to political power, complete or partial, with the corresponding opportunity of passing from agitation to action and putting theory to the test of practice.

I2

Obviously this situation is quite new, and it provides a good deal of fresh material for judging the possibilities of Socialism as an economic order of society.

Previously there had not been much to go by. There have been numerous experiments in the form of model communities founded on socialistic principles, and also in other forms ; but Socialists of the second period have always denied that such experiments, which were frequent in the first period, are Socialism at all, and that their failure proves anything against it. There is some ground for the objection. An isolated community is evidently a different thing from a general transformation of all communities, which is their aim; but nevertheless something can be learned from a microcosm, and it would be wiser to study the reasons for the invariable failure of all these enterprises—the latest only thirty years ago—than to set them disdainfully aside. No one can doubt that if they had been successful they would be held up as evidence for Socialism, and with reason, for they all started as co-operative commonwealths on the principles laid down by Socialists, and still maintained. However, they belong to the past, and do not enter into the proper field of my inquiry. I refer to them only incidentally, as part of the experience previously at command.

A second fund of evidence is supplied by the various public enterprises and services already existing. These are more relevant, because they are part of the existing economic apparatus, and in a sense forerunners of the process by which Socialists hope and expect to realize their aim—namely, the transfer of economic means from private to public ownership and control. This has been the core and centre of the campaign ever since it started—public or social ownership and control instead of private or individual. It is the only definite and tangible mark that distinguishes Socialism from many other policies and movements directed to the same ultimate end, which is the progress of society or the advance of civilization or the elevation of mankind—or some such general ideal. Socialists propose to realize it by the particular means just stated. All the model settlements have been based on the same principle of common ownership and administration. They were attempts to apply it completely on a small scale, which it was thought would be voluntarily extended and eventually embrace the whole civilized world, by virtue of the demonstrated superiority of the social over the individual principle. When they failed and fell into discredit, the alternative plan of applying the principle to the whole community, both nationally and internationally, was taken up and has held the field ever since. It is called nationalization, or, more frequently on the Continent, socialization. ?

This is the practical side of Socialism, which without it would be only a vague aspiration, indistinguishable from others, or a form without content. It is often confused with Christianity, which has the same ultimate aim but insists on the essentially different means of the moral law addressed to individuals: and with State action in general, because the State represents the whole community. But this conception 1s obviously untenable, because the right to private ownership —the very thing it is intended to abolish, wholly or in part—is itself an institution established and maintained by the State, which alone has power to do so. Clearly the crucial question is not that of State action in general but of State action in respect of ownership. The policy of converting private into public ownership is commonly supported by numerous arguments, both ethical and economic ; and these again are often confused with Socialism, but they lead to no result unless they are concentrated on the practical problem, which is nothing else but this one of ownership and control, not of everything, but of the necessary economic apparatus whereby life is carried on.

Now it is obvious that such parts of the apparatus as are already under public ownership and control come into the picture and call for examination. They are, so to speak, a jumping-off ground for Socialism, which would extend them, and they are frequently referred to as evidence in its favour. It is argued that they are highly successful because there is no demand for transferring them to private enterprise, and that therefore other things will be equally successful on the same basis. I shall have much to say on this head later on, and will only observe here that the argument drawn from an absence of demand for reverting to private enterprise is one that I have used myself.’ I did not take it from anyone else, and though I do not claim to be its sole inventor I have seen it used by other people since I first put it forward. But the use I made of it is different. I pointed out the fact that many things are already publicly owned and that in this country there is no general demand for changing them over, not as a proof that they are so very successful (for they are the objects of constant complaints), but in answer to the exaggerated view that public enterprise is in itself necessarily impracticable and ruinous. That is obviously untenable, because these public undertakings exist with general acquiescence. But the argument has another side, which I also pointed out. If there is no general demand for the return of public undertakings to private hands, neither is there any for their extension, as there certainly would be if their superiority were as great as Socialists contend. This argument has been used by critics, who point out that if public enterprise were really so superior it must have knocked out private long ago by force of competition, whereas it is still confined to a very limited field, in which it possesses certain advantages for definite reasons. After all, the general body of consumers—which means everyone—do not care a straw, as consumers, for theories or principles ; they want the best thing they can get at the lowest price, and will take it in preference to a less good thing, or one at a higher price, without regard to social or economic theory. Indeed, most people are quite indifferent about it, and do not know or care whether the means of locomotion, for instance, or the light, which they daily use, are supplied by a public authority or a private concern, They cannot tell you when you ask them, as I have repeatedly found by experience. They know what they want, and if State goods were superior they would demand them. I shall go more fully into the question of existing public undertakings on the Continent in the proper place. They form an important part of the whole subject, as we shall see; but they are not at the centre of the new situation created by the accession of Socialists to power. The policy of Socialism is to 1 The Socialist Movement, Part I1., p. 191.

effect a radical change of the economic system, and it therefore goes far beyond those forms of public ownership which have found their way into the existing order but have not made any substantial breach in it. They are not really instalments of Socialism at all, because they have not been introduced on principle, but for various reasons which have nothing to do with it, and are in some cases even antagonistic. Moreover they are all superimposed on an underlying structure of private enterprise. Some of these public undertakings have been handed down from royal possessions and enterprises of the past. The largest and most general of all, the postal service, is of that character; so, too, are various industrial concerns established by kings for economic or artistic purposes—such as mines, iron-works, glass and porcelain works (Sévres and Meissen). Another very large branch,'the State railways, have come about in two ways: they have either been built by the State because private capital was lacking—as in Sweden and Australia—or they have been taken over for military purposes —as in Central Europe. Then, again, sundry businesses have been acquired and monopolized for revenue purposes—such as the tobacco and matches trade in France, and most of the municipal undertakings.

All these cases throw some light on public ownership, but they are not the results of a deliberate policy and have not been introduced to carry out a distinct theory. Enterprises established on principle for the purpose of realizing Socialism are obviously on a different footing. Of them we have previously had no experience, because Socialists have had no opportunity of applying their policy and putting their theories to the test of practice. Now they have had the opportunity to a sufficient extent to furnish some material for forming a judgment. The opportunity has presented itself in different ways and in varying degrees of completeness; but in all cases it is something new, and it is the distinctive mark of the present phase in the history of the socialistic movement.

The question is: What has happened when and where Socialists have gained political power and wielded the authority of government? What have they done? What can they do?

Public attention has naturally been directed chiefly to Russia, not only because it is a resounding experiment on a great scale, but also because the Soviet authorities, not content with their own revolution, have always and avowedly aimed at promoting similar revolution in all other countries, and have done their utmost to achieve that object by systematic propaganda and the creation of an international organization for the express purpose. No Government has ever before so occupied itself with the internal affairs of other countries or engaged in a comprehensive campaign for procuring revolution in them and inducing them to follow its example. The world has grown so accustomed to the spectacle that its strangeness has been forgotten and it has apparently come to be regarded with astonishing complaisance by other Governments, as just “‘ pretty Fanny’s way,” although they are severe enough with common spies, who merely seek for information, and “ pretty Fanny ”’ herself would make short work of any such interference with her own internal affairs. But the circumstances do invest Russia with extraordinary interest, even for the most indifferent ; and for many it is not only interest but acute partisanship, for or against.

The consequence is a special demand for information about Russia, which has been supplied in various ways, but most authoritatively through the extreme volubility of leading Russian politicians themselves. It is not necessary to go to critics or opponents. The most comprehensive and accurate information on the working of the Bolshevist experiment is that compiled entirely from official Soviet sources and published by the International Labour Office. Together with speeches by leading men reported in the Bolshevist publications and with the overt policy pursued by the Soviet Government, the studies of the International Labour Office furnish ample material for judging of the success or failure of Bolshevism as an economic system. They give us the plain facts in great detail; and in the chapters on Russia that follow I have made free use of them.

Another useful volume, more controversial in character but also compiled from official documents, is one published in Paris in February 1926 under the editorship of M. Fedoroff. It contains eighteen essays, on as many different subjects, by

Russian professors, technicians and former officials. Visits of investigation would be of value if made by persons who knew the old Russia, understood the language, possessed sufficient technical knowledge and experience in social and economic investigation, were free to go where they pleased, had unrestricted access to persons and institutions, covered enough ground and devoted enough time to it. But I know of no such visits. Personally conducted tours are never of much value, even under the most favourable conditions : the members of the party see what is shown to them, which is the shop-window. I know, because I have taken part in such tours, and seen how misleading they are. In Russia to-day they are intended to be so; they are propaganda, and no one of any experience in investigation will look to them for real information.’ In any case they are unnecessary, for the reasons given.

The other European countries which come into consideration have attracted far less public attention; but their experience is in one sense more instructive for us, although—or, rather, because—the course of events there has been less sensational. They have travelled on the same road as ourselves, but have proceeded farther along it. I do not refer to the spasmodic and short-lived attempts made in several countries to follow the Russian example—set up Soviet republics and carry out a complete economic revolution—but to the alternative course of introducing Socialism by gradual and constitutional procedure, which prevailed against the Bolshevist tendency. Since that is the alternative preferred here too, it might have been expected that there would be a lively desire for information about the experience of other countries which are, or were, in advance along the same path. What happened in Germany and Austria when the revolutions there brought the Socialist parties into the seat of government? What did they do to convert theory into practice? What has happened in Sweden and Denmark under the administration of Socialists? What in the newly formed Czecho-Slovakian nation?

Here in our own country, where also the Socialist party accepted the responsibility of government, we know that

* See the remark of Andreieff, the trade union leader, quoted on p. 72.

nothing happened, and that no attempt was made even to begin the process of abolishing Capitalism; but Mr MacDonald’s Ministry were in a peculiarly weak position, because they did not even represent the largest party in the House of Commons. They were put in office only by a freak and allowed to remain on sufferance for a few months ; and though something more might at least have been attempted, the plea that they were in office but not in power is unanswerable.

But in the Continental countries the Socialists were in a much stronger position, and did make some attempt to realize their theories, or at least to tackle the problem seriously. The result of those efforts has seemed to me a matter of great interest, but I found it extremely difficult to obtain full and accurate information about them. I came to the conclusion that the only way to get it was to go and ask for it. I did so; and the result is embodied in this book. It is very far from being as complete as I should like it to be, but filling up the gaps—which are more visible to me than they can be to anyone else—would not alter the picture ; and since no other attempt has been made anywhere to put the facts together I offer mine, in good faith, as a contribution to contemporary history for the information of the English-speaking world, which is very much in the dark about these Continental proceedings.