Wagner & Strauss - The Programme of the Communist Manifesto and Its Theoretical Foundations

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NOTES AND REVIEW ARTICLES THE PROGRAMME OF THE COMMUNIST MANIFESTO AND ITS THEORETICAL FOUNDATIONS* Y. WAGNER AND M. STRAUSS Tel-Aviv University Hebrew University, Jerusalem I THE Communist Manifesto contains a programme of action which, far from implying a frontal attack upon the whole of the bourgeoisie and the capitalist mode of production, regards co- operation with a section of the bourgeoisie and the continued operation of certain aspects of the capitalist system as compatible with the early stages of the transition to socialism. The purpose of this article is to show how this programme is related to Marx and Engels’ analysis of theeconomic structure and the conflictspeculiar to capitalism, and their political manifestations. The programme contained in the Communist Manifesto is expressed in the following manner: ‘The proletariat will use its political supremacy to wrest, by degrees, all capital from the bourgeoisie, to centralize all instruments of production in the hands of the State, i.e., of the proletariat organized as the ruling class; and to increase the total of productive forces as rapidly as possible. Of course, in the beginning, this cannot be effected except by means of despotic inroads on the rights of property, and on the conditions of bourgeois production; by means of measures, therefore, which appear economically insufficient and untenable, but which in the course of the movement, outstrip themselves, necessitate further inroads upon the social order, and are unavoidable as a means of entirely revolutionizing the mode ofproduction. These measures will of course be differentin different countries. Nevertheless in the most advanced countries, the following will be pretty generally 1. Abolition of property in land and application of all rents of land to public purposes. 2. A heavy progressive or graduated income tax. 3. Abolition of all right of inheritance. 4. Confiscation of the property of all emigrants and rebels. 5. Centralization of credit in the hands of the State, by means of a national bank with State capitalandan exclusive monopoly. 6. Centralization of the means of communication and transport in the hands of the State. 7. Extension of the factories and instruments of production owned by the State; the bringing into cultivation of waste-lands, and the improvement of the soil generally in accordance with a common plan. 8. Equal liability of all to labour. Establishment of industrial armies, especially for agriculture. 9. Combination of agriculture with manufacturing industries; gradual abolition of the distinction between town and country by a more equable distribution of the popu- lation over the country. 10. Free education for all children in public schools. Abolition of children’s factory labour in its present form. Combination of education with industrial production, etc., etc.’’ * The authors wish to thank Dr Elena Lourie of the University of Michigan not only for translating this article from the Hebrew, but also for her exertions in arranging for its publication. 1 ‘The Communist Manifesto’ in Marx and Engels, Selected Works (London, 1942), Vol. I, pp. 227-8 (authors’ italics). applicable.

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Communist Manifesto

Transcript of Wagner & Strauss - The Programme of the Communist Manifesto and Its Theoretical Foundations

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NOTES AND REVIEW ARTICLES THE PROGRAMME O F T H E COMMUNIST

MANIFESTO A N D ITS THEORETICAL FOUNDATIONS*

Y . W A G N E R A N D M . S T R A U S S Tel-Aviv University Hebrew University, Jerusalem

I

THE Communist Manifesto contains a programme of action which, far from implying a frontal attack upon the whole of the bourgeoisie and the capitalist mode of production, regards co- operation with a section of the bourgeoisie and the continued operation of certain aspects of the capitalist system as compatible with the early stages of the transition to socialism. The purpose of this article is to show how this programme is related to Marx and Engels’ analysis of theeconomic structure and the conflicts peculiar to capitalism, and their political manifestations.

The programme contained in the Communist Manifesto is expressed in the following manner: ‘The proletariat will use its political supremacy to wrest, by degrees, all capital from the bourgeoisie, to centralize all instruments of production in the hands of the State, i.e., of the proletariat organized as the ruling class; and to increase the total of productive forces as rapidly as possible.

Of course, in the beginning, this cannot be effected except by means of despotic inroads on the rights of property, and on the conditions of bourgeois production; by means of measures, therefore, which appear economically insufficient and untenable, but which in the course of the movement, outstrip themselves, necessitate further inroads upon the social order, and are unavoidable as a means of entirely revolutionizing the mode ofproduction.

These measures will of course be different in different countries. Nevertheless in the most advanced countries, the following will be pretty generally

1. Abolition of property in land and application of all rents of land to public purposes. 2. A heavy progressive or graduated income tax. 3. Abolition of all right of inheritance. 4. Confiscation of the property of all emigrants and rebels. 5. Centralization of credit in the hands of the State, by means of a national bank with

State capitalandan exclusive monopoly. 6 . Centralization of the means of communication and transport in the hands of the

State. 7. Extension of the factories and instruments of production owned by the State; the

bringing into cultivation of waste-lands, and the improvement of the soil generally in accordance with a common plan.

8. Equal liability of all to labour. Establishment of industrial armies, especially for agriculture.

9. Combination of agriculture with manufacturing industries; gradual abolition of the distinction between town and country by a more equable distribution of the popu- lation over the country.

10. Free education for all children in public schools. Abolition of children’s factory labour in its present form. Combination of education with industrial production, etc., etc.’’

* The authors wish to thank Dr Elena Lourie of the University of Michigan not only for translating this article from the Hebrew, but also for her exertions in arranging for its publication.

1 ‘The Communist Manifesto’ in Marx and Engels, Selected Works (London, 1942), Vol. I, pp. 227-8 (authors’ italics).

applicable.

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This plan, which sketches in general lines the intermediate stage of the movement towards socialism, assumes that political power is already in the hands of the socialist proletariat. The plan is, therefore, the economic programme of the future socialist Government, a programme which will direct the socialist transformation of society throughout a whole period.

Nevertheless, the plan does not include several important socialist measures which were accepted-not least by the authors of the programme themselves-as essential to the completion of a socialist structure. The plan does not include the total socialization of the means of pro- duction. It does not demand or necessitate the abolition of hired labour or the elimination of the profit derived by the employer from its use. Finally, the plan does not include the nationalization of commerce.

In order to understand these omissions as well as the general line of thought lying behind the Manifesto, it is necessary to examine some of the positive points made in the plan and the questions they raise.

The Introduction: The ten measures which have to be taken in a despotic way seem insufficient and untenable because they constitute a partial intervention by the State in the economic mech- anism of capitalism. The question then arises whether there is any guarantee that, as a result, exploitation will be eliminated. The answer is that although it is true that in themselves they are insufficient, they will outstrip themselves, leading necessarily to further reforms, and it will be possible to use them in order to revolutionize the whole mode of production. Furthermore, they are unavoidable, in that normally there are no other means which can be substituted for them in the development towards socialism.

Clause 1: Abolition of property in land and the application of rents, etc. This means that the ownership of land and natural resources will be transferred to the State, but their use will be private. The employment of hired labour in general and on private farms in particular is not prohibited. The intention of the clause is not to abolish the class of farmers, of the capitalist employer of agricultural labour, but to eliminate the rentier. In addition, the intention is to put an end to speculation in land, to abolish the profits derived, not directly from the exploitation of labour, but indirectly as a result of rises in the price of land which are a by-product of the work done on neighbouring land.

Clause 3: Abolition of the right of inheritance. Given the spirit of the plan as a whole, it appears that an absolute abolition was not intended, that, for example, small-holders’ property was not to be included in this ruling. The practical implication of this clause would be a matter of degree. The careful reservations made in the two sentences preceding the enumeration of clauses, have particular application here. In the resolutions adopted by the Communist League about a month after the publication of the Manifesto and entitled The Demands of the Communist Party in Germany, the ten clauses of the Manifesto’s plan appear in the form of seventeen clauses including additions and changes peculiar to Germany; and it is worth noting that clause 14 of the German programme says: ‘The right of inheritance to be curtailed.’’ All the other im- portant clauses (abolition of property in land, banks, railways, etc.), are included without quali- fications of this kind.

Clause 5: Nationalization of the banks and the creation of an exclusive monopoly for the State bank. This does not mean the confiscation of deposits either big or small, but the transfer of the management of banks and their profits to the State. The importance of this measure is threefold: first, it involves the transfer of a considerable portion of the national income to public ownership. In the second place it produces greater efficiency in the organization of money and banks. Finally, it transfers the control over production, over industry and agriculture, which banks possess, from private into public hands. This is particularly important when the question is not of a loose control but of a veritable domination by the banks over spheres of production.

Clause 6: Control of the railways confers an advantageous position in the whole economyand enables those who control them to interfere in the management of various spheres of production,

1 Marx and Engels, The Communist Manifesto, ed., D. Ryazanoff, trans., E. and C. Paul (London, 1930), app. H., p. 347.

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by means of unequal transportation tariffs for competing 6rms. Control of the railways was particularly advantageous before the emergence of the motor-car.

Clause 7: National factories. The intention here is to create a productive sector under public ownership and constantly to widen it. The clause-and indeed the whole plan-does not imply the creation of a public sector by expropriating private factories, but rather by setting up new state factories. In Principles of Communism, a suggested draft for the manifesto of the Communist Party, drawn up by Engels in 1847, there appears a list of measures almost identical with those we are discussing. Yet under clause 2 he writes: ‘Gradual expropriation of landed proprietors, facrory owners. railway magnates and shipping magnates, partly through competition on the part of the State industries and partly through payment of compensation in currency notesl.1 It appears, therefore, that in their h a 1 draft Marx and Engels decided to exclude the industrialist from the general run of capitalists whose property is to be abolished, at that stage. It is worth noting, moreover, that the expropriation suggested by Engels is not necessarily a direct legal confiscation (cf. ‘competition on the part of the State industries’) and, in so far as such confiscation is suggested it is accompanied by the payment of compensation.

Clause 8: The term ‘labour’ is usually subject to several meanings. Let us first examine it in its narrowest sense. According to this interpretation labour is human activity which transforms nature in order to supply a need or to make it into a means for supplying a need. This meaning of the term includes the mental work done during production, or preceding and directing it.

Labour in this sense does not include social activity-activity which creates social relations in the field of economics, politics and culture. Thus the activity of the businessman, the politician and the artist, etc.. is excluded from this notion of labour. Yet, if we abide by this narrow definition of labour, it is obvious that even in a socialist society not everyone is a worker and one cannot therefore talk of the ‘liability of all to labour’. Hence the narrow definition is not suitable here. Furthermore, since the plan does not demand the abolition of the class of capitalist em- ployers and merchants, it would be illogical to interpret this clause as if it were intended to eliminate that class indirectly, without stating that intention clearly in a special clause. Hence it cannot be assumed that the industrialist’s or merchant’s activity is defined here as non-labour and that they would be bound to engage in ‘real’ labour in thenarrow sense of the term,

The question then arises: if the term ‘labour’ is constantly broadened, against whom, after all, is this clause directed? It can be directed only against those capitalists who are not employed in any economic activity and, in general, are engaged permanently in nothing but consumption. These people will be asked to limit the time devoted to consumption and to engage in some activity which will be of use to the statecapitalist economy described in this plan. In the Demands ofthe Communist Parry in Germany the following statement appears under clause 9: ‘The landed proprietor who is neither a peasant nor a farmer, has no share in production. Consumption on his part is, therefore, unwarrantable’.? The ruling on the liability of all to labour includes the right to work for all who seek it. The creation of national workshops is a means to ensure this right.

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Taking now the programme as a whole, what was the guiding principle behind these clauses ? A study of the plan shows that its authors did not think that during the first stage a socialist Government had to eliminate the exploitation of workers by employers, but only profits of these sections of the bourgeoisie who did not exploit workers directly. It is possible then to ask what made Marx and Engels think that direct exploitation should not at once be eliminated. Did they consider it possible to take steps to eliminate the anarchy of capitalist production without putting an end to exploitation? Does the Marxist analysis conceive of an effective difference, within the capitalist economy, between exploitation, or the employment of hired labour, and

1 Manr and Engels, The Communist Manifesto, ed. D. Ryazanoff, trans., E. and C. Paul (London, 1930) app. F, p. 331 (our italics).

2 Ibid., app. H, p. 346.

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NOTES A N D REVIEW ARTICLES 41 3 anarchy? And even if there is, why should the socialist movement postpone the abolition of exploitation until the second stage?

We must, therefore, examine to what extent Marx and Engels gave answers to these questions in their theoretical writings. It is necessary to see how the practical plan follows from their analysis of capitalism.

According to Marx and Engelsl capital has two main spheres of activityz: production and circulation.

In the sphere of production capital is conceived of first and foremost as an accumulator of materialized, past labour, labour which has congealed into means of production, and which serves to subject living labour to the capitalist, to extract surplus values from living labour and to add them to original capital. In this process of absorbing surplus-value that is, in the process of labour, capital changes its physical form. Capital is the social form of physical process whereby factors of production are transformed into products. It is in this sphere that capital appears as an employer of labour.

In the sphere of circulation the activities of commerce, the banks and the Stock-Exchange, take place. Here capital changes its physical form, alters and transforms itself from one use- value to another without any work being done (in the narrow sense of the word), without any additional use-values being created and consequently without the creation of any additional exchangevalues. This is the sphere par excellence of capital, its unadulterated field of action, one in which the movement of already-created surplus-values takes place.

What is the role of the sphere of circulation as a whole, in this view? It is conceived of as complementing the activity of capital in the sphere of production. The chief concern of circu- lation capital3 is the distribution of produce. By ‘produce’ is meant first of all consumption-goods, primarily wage-goods. From this point of view circulation capital mediates between the sphere of production, producing necessities, and the production of labour-power for the productive network as a whole, In fact, circulation capital regulates the proportions within the sphere of production. Secondly, the means of production are also included in the product to be distributed. Here too, circulation capital regulates the proportions between various branches of production, between the sector producing means of production and the sector producing necessities.

To sum up: Marx views the sphere of circulation as the mechanism which regulates, through the distribution of the social product, the division of social labour. The modem division of labour, to which the industrial revolution gave rise, calls, even in its capitalist form for some regulation in the sphere of production. All branches of production being interdependent, regulation of their mutual relations, which, under capitalism, takes the form of a flow of capital from branch to branch (in Marx’s terms: a flow of materialized labour which trails living labour after it), calls for a special activity. This activity is undertaken by the ‘money-dealing capitalist’, i.e. bankers and the Stock Exchange operators, and is carried out by the respective financial institutions.4 It may be asked in what way does this concept ofcirculation tally with the statement often met with in Marx and Engels that production under capitalism is--on the social scale- anarchic, i.e. unregulated?* In view of the foregoing, their meaning must not be taken as implying absolute anarchy. From the analysis in Capital, Vol. 111, it becomes clear that what is meant is this: the manner in which the division of labour is regulated by capitalist circulation is not a

1 The economic doctrine of Capital is taken to represent views shared by Marx and Engels. 2 We use the terminology employed by Marx in Capital; cf. ibid, Vol. 111 (Moscow, 1959),

pp. 274,310-12, etc. 3 Not to be confused with circulating capital, which, like the fixed capital from which it is

distinguished, is part of any one independent, functioning capital. Circulation is a rnacro- economic category: that part of the social category engaged in activities within the sphere of circulation, and composed, likecapital generally, of fixed and circulating portions (cf. ch. XIX, Capital, Vol. 111).

4 capital, Vol. III, p. 593 (banks); pp. 429-32 (trade in stock); see also Engel’s note on the stock exchange, ibid, pp. 884-6.

5 e.g., Selected Works, Vol. I, pp. 140,176,261 ; Vol. 11, PP. 232,504; Selected Correspondence (London, 1941),p. 247; Engels, OriginoftheFamily, etc. (Moscow, 1948),p. 249.

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unified social plan, based on a scientific understanding of the sphere of production, and the proportionate changes within it as it grows in quantity and quality. This regulation, in fact, consists of a series of private plannings of the social economy, the component parts of which are interdependent. The private character of this planning contradicts the social character of the planned object, a contradiction which manifests itself in the cyclical crises from which the capitalist economy suffers. Regulation of the division of labour by way of circulation is, on this view, merely the capitalist substitute for social planning.

The very construction of Capital is based on a distinction between the two spheres within which capital is active. Volume I deals with the sphere of production, with the role of capital as an employer. Volume I1 deals with the sphere of circulation, and here Marx is especially careful to draw a dividing-line between activity which adds value and pertains to labour (e.g., transport), and expenditure which pertains purely to circulation.1 Volume 11 examines the two spheres as a whole and the contradictions between them. And only then* does Marx arrive at the agents or subjects of the different spheres and the different types of capital, i.e., at the social classes. There is, therefore, a parallelism between the practical distinctions made in the Manifesto and the theoretical distinctions which dictated the structure of Capital.

It becomes clear that the programme of the Manifesto is aimed at reforming fundamentally the sphere of circulation, and only indirectly the sphere of production. Its purpose is to transfer the sphere of circulation, in so far as it regulates the division of labour, from control of private capitaliststothatoftheState.Thistransferenab1es ittobecomeatoolwithwhichsocialplanning- albeit still only partial- be imposed on the sphere of production, which at this stage remains largely in private ownership.

Although the sphere of circulation is one of which, by Marx’s definition, no labour takes place, nevertheless it needs the investment of capital. This capital is called for because of the period of time during which the commodities (both the means of production and means of consumption) remain within the sphere of circulation.3 Capital is also needed because production for the market demands money, so that a part of the social capital is permanently to be found in the form of money within the sphere of circulation.4 And since capital within the sphere of circulation cannot at the same time function within the sphere of production, capital as a whole is divided into two parts.

Just as the development of labour productivity depends on an ever increasing division of labour into separate pursuits, so the development of capital depends on an ever increasing division of the functions of capital and their consolidation into separate enterprises.’ An analogy may be drawn between Marx’s description of the relation between money-dealing capital and productive capital in part V of Vol. 111, and his analysis of relations between the two ‘depart- ments’ of production, in part iii of Vol. 11,6 where one ‘department’ furnishes the means whereby the other produces. This analogy between Marx’s conception of the division of labour among workers and the division of roles among capitalists has yet another aspect. Just as the first sphere of labour (department I) supplies the technical means for the activity of the second (department 11), so the first sphere of capital, circulation, supplies the economic means for the activity of the second, production, or employment of labour. It is possible to regard the insti- tutional mechanisms of the sphere of circulation (banks, the money-market), which regulate the distribution of the product and thereby the division of labour generally, as economic means or economic tools.

Just as in the capitalist economy the second productive department (necessities) buys the product of the first (means of production), so the sphere of production as a whole buys the services of the mechanisms of circulation. In other words, the sphere of production pays for these services, for its use of the circulation mechanism, with part of the surplus value it extracts

1 Capital, Vol. 11, chap. 11. 2 Capital, Vol. 111, pt. vii, especially the fragment of chap. LII. 3 Capital, Vol. 11, pp. 121-33; also Capiral, Vol. 111, pp. 262-75,310-11. 4 Capital, Vol. 11, pp. 135-6; Capital, Vol. IU, pp. 311. 5 cf., Capital, Vol. II,267. 6 See Capital, Vol. 11, p. 395.

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from the living labour done within its own sphere. The splitting of capital into two branches is, therefore, logically connected with the splitting of surplus value. Hence we find, as against the industrialist’s profit, interest and the profit of the merchant.’

Common to both branches of capital, and to all capital, is the fact that, as such it does not create values, but only distributes values, appropriates values, organizes and regulates, for the purposes of that distribution, the creation of values, i.e., labour. This is what is peculiar to the capitalist or the activity of capital, in contrast to the worker’s activity or in contrast to labour.

What distinguishes the two branches one from another is that only productive capital creates surplus value, that is to say, transforms values into surplus values, appropriates new values and adds them to capital; whereas circulation capital arranges the distribution of productive capital to the various branches of production and levies in return, as a tax, part of the surplus value which productivecapital creates.2 It is a matter, therefore, of two different kinds of appropriation; the object of the first is labour, whereas that of the second is the result of the first’s activity, its fruit3. As a result the subjects of the two kinds of capital are also opposed toeach other: ‘Whether the industrial capitalist operates on his own or on borrowed capital, does not alter the fact that the class of money-capitalists confronts him as a special class of capitalists, money-capital as an independent kind of capital and interest as the independent form of surplus-value peculiar of this specific capital.4

But the difference in the mode of appropriation, or of profit, appears as a mere difference only to us, the observers, and only when examined in the abstract. In economic reality, however, there is a contradiction as well as a difference. Hence, subjectively, from the point of view of the capitalists within the two branches, the difference entails a struggle between conflicting interests.

The conflict is, first of all, a simple one between sellers and buyers-a quantitative conflict over the price of the ‘commodity’, the cost of using the economic apparatus. But this struggle entails a qualitative conflict over the nature of the ‘commodity’ which is supplied. In his letter to Schmidt on 27 October 1890, Engels discussed the contrasting modes of appropriation and the conflict which was developing, together with capitalism generally, between the movement of circulation and production capital:

‘As soon as trade in money becomes separate from trade in commodities it has-under certain conditions imposed by production and commodity trade and within these limits- a development of its own, special laws determined by its own nature and separate phases. If to this is added that money trade, developing further, comes to include trade in securities and that these securities are not only government paper but also industrial and transport stocks, so that money trade conquers the direct control over a portion of the production by which, taken as a whole, it is itself controlled, then the reaction of money trading on production becomes still stronger and more complicated. The traders are the owners of railways, mines, iron works etc. These means of production take on a double aspect: their operation has to be directed sometimes in the interests of direct production but sometimes also according to the requirements of the shareholders, so far as they are money traded.5

Two characteristics of the division of capital stamp themselves according to Marx, upon the qualitative conflict between the two branches. First, there is no formula for establishing the division of surplus-value between production and circulation capital.6 There is, for example, no fixed ratio between the rate of interest and the rate of industrial profit. The changing ratio between the employer’s profit and that of the ‘circulators’ (if we may term them thus) is not fixed spontaneously or objectively by technological factors (as is, for example, the ‘organic composition of capital’-the ratio of the non-wage outlay to total outlay); it is fixed rather by

1 Also, by the same token, as against the farmer’s profit: rent, as against the dividend-bearing share, the profits that come from tradingin shares. See Capital, Vol. 111, pp. 277,2865,369-72.

2 Capital(Moscow, 1957),Vol. 11, p. 55. 3 Capital, Vol. 111, pp. 351, 363. 4 Capital (London, Moscow, 1962), Vol. 111, p. 369. 5 Marx and Engels, Selected Works (Moscow, London, 1950), Vol. 11, p. 446. 6 Capital, Vol. 111, 351.

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factors subject to the purposive influence of capitalists, not only by means of state intervention but also by the activity of the circulation mechanisms. Consequently not only is the activity of capitalist circulation mechanisms not aimed at increasing the sum of use-values at society's disposal, nor even the total production of values (exchange-values), but it is not even directed at increasing the total profit of social capital, for the portion of the profit which goes to the owners of these mechanisms and their enterprises is not any fixed proportion of the total. The activity of the organizers of these mechanisms is aimed at increasing their portions, and hence they construct the mechanisms not according to the requirements of the employers, not according to the needs of the capitalist process of production, but in accordance with their special mode of appropriation.' They cease to be, therefore, agents of the whole capitalist class and become instead a special class. It is, consequently, a logical corollary to make their expropriation a special task which can be carried out separately from the expropriation of capitalists generally; i.e., the very conclusion reached by the Communist Manifesto, before the theoretical premise had been fully worked out.

Second, whereas the employer regulates the division of labour in detail in his individual enterprise, the 'circulator' deals with the general division of labour between branches of pro- duction without which the division of labour in detail would be useless.2 For the owner of the enterprise could organize the division of labour within it as efficiently as he pleased, but without circulation he would find neither the elements of production (raw materials, for example) which he draws from the market as commodities, nor the purchasers for the product which hein turnthrowsonto themarket.

This characteristic gives the owners of circulation capital an advantage.3 They hold the commanding heights of the economy and, by the nature of their role, they are organized in a more concentrated way. On the other hand, their concentrated organization facilitates the transfer of their role into the hands of society's representatives. Now, the relation shown here between Marx's distinction between the branches of capital and his distinction between the divi- sion of labour in detail and in general, is of importance in understanding Marx's view of the historical significance of capitalism as a whole. In this article we will confine ourselves to point- ing out one major implication of this relationship: the contradiction-which Maw saw as essential to capitalism-between the social character of labour and the private character of appropriation, in other words, the contradiction between the division of labour as a whole and its organization for private purposes-this contradiction is considered to be of a completely different nature according to whether one is examining the division of labour in detail or the general division of labour. The essence of the contradiction lies in the latter aspect of the division of labour. Thus, for example, the periodic economic crises stem from it.4 The ten-clause pro- gramme in the Manifesto outlines a solution to the conflict between private appropriation and the general division of labour and does not concern itself with the division of labour within the framework of the individual enterprise: obviously this was considered a problem the social solution to which involved a lengthier process.

111

Two attempts, both made at the end of the First World War, to revive the programme of the Mmrjfesto as a practical plan for immediate political action, are relevant to the foregoing inter- pretation.

In 1872 Marx and Engels stated that in some raspects the Manifesto's programme was out of date.5 This judgement represents the opinion of most Marxists, before the First World War, about the ten-point programme of the Manifesto. When, however, a group of German Marxists with Rosa Luxemburg considered, at the end of the war, the immediate establishment of

1 Capital, Vol. 111, p. 532.

3 Manr dwells on this throughout chapters 29-34 of Capital, Vol. 111. 4 K. Marx, Theorien ueber Mehrwert, ed. K. Kautsky (Berlin, 1923), Vol. 11, pt. ii, p. 286. 5 Marx and Ehgels, Selected Works (London, 1942), Vol. I, p. 190. (Preface to the German

Capital, Vol. I (Moscow, n.d.), p. 351.

edition of 1872).

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socialism to have become a question of practical politics, they turned to the plan drawn up three quarters of a century before.

In her speech in the programme to be adopted, given at the founding congress of the German Communist Party (Spartakusbund) which convened in December 1918 in Berlin, Rosa Luxem- burg explained the reservations expressed by Marx and Engels about the Manifesto’s programme, and the fact that it was later altogether set aside, as the result of a period of retreat by the revo- lutionary movement and of the temporary entrenchment of capitalism as it spread to new countries. For the Social Democrats in that period ‘the so-called minimal tasks of the hour were the fist priority whereas socialism was no more than a star, shining from afar, as the final goal’.’ During the retreat the practical link between the immediate tasks and the final goal was lost. Hence Rosa Luxemburg declared, ‘For us there is no longer a separate minimum and maximum programme’.2 The immediate tasks must be defined in such a way that they will constitute here and now the first phase in the achievement of socialism. ‘ . . . we shall now take up the thread which Marx and Engels first spun with the Communist Manifesto exactly seventy years ago. As you know, the Communist ManiJesto regards socialism, the realization of the final socialist aims as the immediate task of the proletarian revolution. . . . They were both then convinced, as were all the heads of the proletarian movement, that the hour had come for them to make socialism a reality. After a while, as you know, Marx and Engels themselves funda- mentally modified this view. And what is the wording of that passage which had been declared out of date? (Rosa Luxemburg then read out the whole of the programme as given at the beginning of this article) . . . You yourselves see that these are, with slight modifications, the tasks which confront us today: to achieve socialism, to make it a reality; . . . We are returning today to that same way of thinking which Marx and Engels later saw as mistaken and which they abandoned. They were right to see it then as mistaken and to relinquish it. But the development of capitalism, which has continued in the meantime to advance, has brought us to the point where what was then an error is now ~orrec t . ’~ Luxemburg then went on to explain her views on the method whereby socialism would be achieved from below and not from above, gradually and not all at once. Although ‘in the way I have described it this process will perhaps seem more drawn out than we tend to imagine at first, nevertheless I am convinced that it is to our advantage that we should see clearly all the difficulties and complications of this revolution which confront us.’4

It is noteworthy that, approaching the problem of socialization as a problem of practical politics, Luxemburg stresses the graduality of the process, which raises the question of the order in which the various steps have to be taken, and thus brings her back to the ‘way of thinking’ of the plan of 1848.

About a year before R. Luxemburg revived the plan of the Communist Manifesto in general terms, Lenin, who likewise considered the transition to socialism to be on the order of the day. drew up a detailed plan of measures to be put into effect by a Bolshevik Government, should it be established in the near future. This plan follows that of 1848 in so far as a clear, even explicit, distinction is drawn between the productive and other forms of capital, in view of treating them differently in regard to expropriation. Lenin calls for the nationalization of finance capital, including its important footholds within the sphere of production. A special chapter of his article is devoted to explaining the first point in his plan-the nationalization of the banks. Lenin suggested that this should be carried out not by confiscating property, but by merging all banks into one bank and placing that unified bank under state supervision. The following sentence has a special importance: ‘The advantage accruing to the whole people from nationalization of the banks-not to the workers especially (for the workers have little to do with banks) but to the mass of peasants and small industrialists-would be enornious.’J The basic significance of this statement lies in the promise of advantage to a section of the bour- geoisie, and advantage which will be derived from carrying out measures of a socialist nature.

1 RosaLuxemburg, Ausgewaeklte Reden undSchrifen(Berlin, 1951), Vol. II,p. 659. 2 Ibid, p. 666. 5 Lenin, ‘The Impending Catastrophe and How to Combat it’, Collected Works (Moscow,

3 Ibid, pp. 655-58. 4 Ibid, p. 688.

1964), Vol. XXV, p. 332. 31

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It was precisely this idea which underlay, according to our interpretation, the proposals of the Communist Manqesto: the removal of the circulation mechanisms from private ownership and their transfer into the hands of society will not only harm productive capital but is even cal- culated to help it. This idea is explicitly expressed by M a n and Engels in the Demands ofthe Communist Party in Germany (March 1848) :

‘A State bank, whose paper issues are legal tender, shall replace the many private banking concerns now in existence. By this method credit can be regulated in the interest of the people as a whole, and thereby the dominion of the magnates of the monetary world will be under- mined. Further, by gradually substituting paper money by gold and silver coin, the means of exchange (that indispensable prerequisite of bourgeois trade and commerce) will be cheapened . . . Thismeasure in the long run is necessary in order to bind the interests of the conservative bourgeoisie to the cause of the revolution’.l

Lenin must have been led t o - o r at least confirmed in-his idea of the economic policy to be pursued by his party when they came to power, through his work on the theory of contemporary capitalist development. He then came to hold certain views on the relationship between produc- tion and circulation, which are all the more noteworthy, in connection with his economic plan, because he did not fully develop nor consistently maintain them. Thus he writes :

‘It is characteristic of capitalism in general that the ownership of capital is separated from the application of capital to production, that money capital is separated from industrial or productive capital, and that the rentier who lives entirely on income obtained from money capital, is separated from the entrepreneur and from all who are directly concerned in the management of capital. Imperialism, or the domination of finance capital, is that highest stage of capitalism in which this separation reaches vast proportions. The supremacy of finance capital over all other forms of capital means the predominance of the rentier and the financial oligarchy . . . ’2

This implied that the development of capital was bound up, in Lenin’s opinion, with the growing separation between productive and financial capital. Financial capital is merely a special, developed form of circulation capital which has come to control (as opposed to owning) the key positions within the sphere of production.

As to the position of M a n and Engels in 1848, we have already seen that its theoretical rationale had been worked out during the following two decades, in great detail, in the fifth part of Capital, Vol. 111. The analysis of the relationship between industrial and money capital led to such sharp formulations of their antagonism as the following :

‘The credit system, which has its focus in the so-called national banks and the big money- lenders and usurers surrounding them, constitutes enormous centralization, and gives to this class of parasites the fabulous power, not only to periodically despoil industrial capitalists, but also to interfere in actual production in a most dangerous manner-and this gang knows nothing about production and hasnothing to do with it.’’

IV

It is clearly the connection between the political and the economic aspects of the road to socialism, underlying the plan of the Communist Manifesto, which explains the acknowledged or unacknowledged revival of that plan when socialist groups thought theestablishment of socialism had become a task to be taken in hand.

The connection itself, however, has something paradoxical about it. It is a commonplace that the politics of Marx and Engels in 1848 (as were those of R. Luxemburg in 1918 and of Lenin in 1917) were revolutionary politics. Their planned economic policies, on the other hand,

1 The Communist Manifesto, ed. cit.. app. H, pp. 3 4 6 1 . * V. I. Lenin, Collected Works (Moscow, 1964), Vol. M I , pp. 238-9. 3 Capital, Vol. 111, p. 532.

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were rather moderate. Put differently, from the point of view of its long-term aim, the eventual realization of socialism, their programme could not be more revolutionary; but from the point of view of its actual content, i.e., insofar as it dealt only with the immediate, partial transforma- tion of the existing mode of production-the first step on the road to socialism-and, further- more, insofar as it counted on a greater or lesser degree of consent to this process of transforma- tion from sections of the bourgeoisie, it was in fact remarkably moderate.

This position is the reverse of that generally held by Marxist socialists before 1914. The establishment of socialism was not regarded as immediately realizable, and the partial changes possible within the capitalist regime (as distinct from spontaneous developments which were supposedly ‘maturing’ capitalism for a future socialist transformation) were never considered as stages in the advance towards the full realization of socialism. The idea was that socialism was to be established by a wholesale change, by a total, once-for-all elimination of the capitalist regime. Since the abolition of capitalism was not a practical proposition, whereas the movement was socialist precisely by virtue of its demand for that wholesale abolition, a distinction was made between maximum and minimum programmes, based on assumptions absolutely contrary to the assumptions of the 1848 programme. The maximum programme was the establishment of socialism and the fact that it was described as maximum indicated that in the eyes of the move- ment this was not an immediate goal, it did not involve political action here and now. Any present political activity-the ‘minimum’ programme-could not under any circumstances be represented as the realization of socialism. Thus, whereas for the authors of the ten-clause programme and its like there is no fundamental divide, or only a minor one, between a socialist policy in a capitalist regime and a policy abolishing capitalism and replacing it with socialism, for the Marxist socialists of that period the divide between the two is absolute.

On the face of it, it is somewhat odd that the programme suggested in the Communist Manvest0 as one suitable to a socialist Government was then put forward, by the very same people, onlya month later, in the Demands of the Communist Party in Germany as a programme for a democratic German government which would represent sections of the bourgeoisie, as a programme, in other words, which could be achieved by a coalition Government, that is, within a capitalist society. But the paradox only exists if one accepts the premise of a basic separation between the maximum and minimum programmes. For Marx and Engels themselves, however, the logic was clear. Their view, expressed in the ten-clause programme, that the first step towards socialism does not necessitate the total abolition of bourgeois property and the capitalist mode of appro- priation, led to the conclusion that one must try to fulfil the programme with the political cooperation of those sections of the bourgeoisie who would benefit by it. They thought that there was room for continuity and an evolving development of socialist revolutionary policies within thecapitalist regimeand during theprocess of transformation. They did not regard the transition from the ten-clause programme to full socialism, nor from a democratic Government which would carry out the plan, to a socialist Government, as a single step, but as aprocess.

To sum up. The programme cannot be represented as advice on how the proletariat should behave towards the bourgeoisie only after it has full control of the Government. The theoretical analysis which makes sense of the plan of action could not, therefore, be confined to an examina- tion of thereaction ofthecapitalist economy to apossibleintervention by a socialist Government. but had to include an analysis of political action within the capitalist regime, indeed, the conflict between the industrial bourgeoisie and the financial bourgeisie was seen not merely as potential, merely a latent economic distinction which socialists should try to enchance; it was not an eco- nomic difference which socialists, by clever manoeuvres, must transform into a political conflict. If the programme distinguishes between two sectors of the bourgeoisie, if it sets out to guide the socialist movement in capitalist politics, this can only mean that it was based on a political difference or conflict which, its authors were convinced, existed in fact. To this aspect of the analysis we shall now turn.

V

Marx conceives of capitalism as altogether more of a political creation than any preceding economic order. Capitalism does not emerge until the worker is cut off from the means of his

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labour, until labour power becomes a commodity, over against which stand the means of labour as capital. This process was achieved by a political, legal and violent process which was drawn out over hundreds of years. Whereas the content, so to speak, of the capitalist transformation of economic relationships was the work of industrial and agricultural (i.e., productive) capital, the political methods used in this process, were in increasing measure, connected with the special functions of circulation capital. Marx deals with this relationship in Capital, Vol. I, ch. 24. He there describes how the creation of the capitalistic mode of publication brought about the national debt, the modem system of taxation, modem banking, commercial wars, colonial systems, etc. ‘With the national debt arose an international credit system’.’ ‘As the national debt finds its support in the public revenue, which must cover the yearly payments for interest etc., the modern system of taxation was the necessary complement of the system of national loans.’Z Taxation is a function of government; Government financing is a function of money capital. It is the same thing seen from two aspects-the political and the economic. However, the conception of the relations between politics and economics is not exhausted by these remarks concerning the role of circulation capital in the historical process of the formation of capitalism, nor by connecting the political alignments and struggles of this phase with the conflicts between property-owning and bourgeois classes, as for example, the struggle between manufacturing and agrarian capital on the one hand, and pre-capitalist money capital on the other, or between industrial capital and large-scale landownership, struggles which took the form of historic political conflicts and which in the course. of development received a political solution.

We have already seen that, for Marx, the contradiction peculiar to capitalism between social labour and private appropriation has a different significance according to whether one considers the general division of labour or its division in detail. This contradication is revealed not only between labour in general and capital in general, but also between the two forms of capital, between the two modes of private capitalistic appropriation, and hence, between two sets of capitalist interests.

The modern mechanism of credit, like the other functions of circulation capital, could not, it is true, emerge until industrial capital had first attained a relatively high degree of development. But this mechanism itself served as a basis for the acquisition of a dominating position for cir- culation capital. Thus speaking of the bankers, Marx says: ‘For the entire vast extension of the credit system, and all credit in general, isexploited by them as their privatecapitaL’3

Thus, on the one hand, since the economic division between the two kinds of capital, and between the two corresponding main capitalist strata or classes, is regarded as belonging to the structural peculiarities of capitalism as such, this division is conceived of as growing with the growth of capitalism; and on the other hand, the question of thc relation of the state to the economy becomes more involved in proportion as the main division between the capitalist classes assumes ever new aspects. Changes in the attitude of the State towards the economy, whether in a negative or positive direction, cannot remain matters of indifference to capital, since State intervention alters the modes of action of capital. The less monolithic capital is, the more divided the interests of capital are, the more distinct will be the influence of State interven- tion on the various interests. Indeed, insofar as theinterests of the branches ofcapital are opposed, the influence of state intervention will have an opposite effect on their position, and therefore those branches will adopt different attitudes towards state action. The conflict of economic interests entails, therefore, a political conflict.4

In the fifth part of Capital, Vol. 111, Marx quoted lengthy passages from the parliamentary enquiries into the effects of the 1844 Act, using them to expand his discussion of the conflict between bankers and industrialists over credit legislation. Thus Marx noted that when Palmer, one of the directors of the Bank of England, was asked by the commission of enquiry what had been the purpose of one of the clauses in the Act dealing with the reserve requirements, the

1 Capital, Vol. I, p. 755. 4 Different aspects of this translation of economic into political conflicts are discussed in

‘The Class Struggles in France’, Selected Works, Vol. 11, (London, 1943), pp. 192-3; ‘The 18th Brumaire of Louis Bonaparte’, ibid, pp. 334-5, 344; Capital, Vol. I, ch. 24; Capital. Vol. ILI,

2 Ibid, p. 756. 3 Capital, Vol. 111, p. 467.

pp. 387-390.

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banker answered ‘I cannot answer that question’, and Marx adds his own explanation: ‘The purpose was to make money dear.’’ He quotes the Birmingham banker Attwood, who, when asked: ‘How do you think the act of 1844 has operated?’ replied, ‘If I were to answer you as a banker, I should say that it has operated exceedingly well, for it has afforded a rich harvest to bankers and (money) capitalists of all kinds. But it has operated very badly for the honest industrious businessmen . . . ‘ 2 When he was asked ‘when money is dear, would you say that capital would be cheap?’, he answered ‘Yesy3 Marx did not confine himself to analysis of the contrasted influence which the 1844 Act had on the interests of bankers on the one hand and industrialists on the other, but went on to show how a cleavage between the two kinds of capit- alists was reflected in their attitude to the Act, how, in short, thiscleavage became political.

The fact that legislation has for its basis the conflict of the opposing bourgeois interests is expressed by Marx, a propos the Act of 1844, thus:

‘The whole endeavour of Mr. Overstone (the then governor of the Bank of England) consists in representing the interests of loan capital and industrial capital as being identical whereas his Bank Act is precisely calculated to exploit this very difference of interests to the advantage of money capital.”

The economic subjects are the bearers of political action. The political struggles themselves are variegated, connection between them being provided by the (objective) reference they have to a definite economic subject, which becomes a political subject by the very fact of becoming engaged in such struggles. Thus Engels writes of the Corn Law struggle: ‘The repeal of the Corn Laws was the victory of the manufacturing capitalist not only over landed aristocracy, but over those sections of capitalists too, whose interests were more or less bound up with the landed interest-bankers, stock-jobbers, fund-holders etc.’S

In a developed situation various economic subjects are seen to form permanent political alliances, then constituting the concrete subject of political activity. The dimensions of the political cleavage within the bourgeoisie widen as there develops an alignment of various economic groups brought together by their conflicts with other groups. The unfinished chapter on classes at the end of Capital, Vol. I11 is still based on the classical trinity of revenues-wages, profit (and interest), and rent; but the analysis itself juxtaposes capital engaged in production to capital engaged in circulation, dealing with landed property (rent) immediately after money- dealing capital (interest), and in many observations of Marx and Engels, concerning the political scene, as we have shown, the idea is expressed that there is a drawing together of agrarian and moneyed interests into one political block.6

In an article in ‘Volksstuat, in 1874, Engels, commenting on the elections in Britain, writes: ‘If the Liberal Party in England does not represent large-scale industry as opposed to big landed property and higher finance, it represents nothing at all.’7

Years before this, Engels had written of Prussia, at a time when capitalism was making rapid progress in that country:

‘The bourgeoisie never rules as a whole. Apart from the feudal castes, who have still re- tained some part of their political power, even the big bourgeoisie, as soon as it has defeated feudalism, splits into a ruling and an opposition party-which are usually represented by the bank on the one side and the manufacturers on the other. The oppositional, pro- gressive fraction of the big and middle bourgeoisie then has common interests with the petty bourgeoisie against the ruling fraction, and unites with it in a common struggle.’*

1 Capital, Vol. 111, p. 546. 5 Preface to the ‘Conditions of the Working Classes in England in 1844‘, Marx and Engels,

On Britain, (Moscow, 1955) p. 25, ‘The old compact between the landed and financial aristocracy no longer guaranteed the Corn Laws’, ibid, p. 441.

6 Insofar as different rents influenced the geographical distribution of capital, they acted on the economy in the same way as circulation capital in general. From this point of view, as a form of capital fulfilling a circulation function.

7 Marx and Engels, On Britain, ed. cit., p. 466. 8 ‘The German Constitutional Campaign’, in Marx and Engels, Werke (Berlin, 1964), p. 113.

* Ibid., p. 547. 3 Ibid., p. 548. 4 Ibid., p. 502.

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The assessment of the changes which were taking place within the economic and political structure of capitalism, led Engels, in 1885, to the following broad generalization on the sig- nificance of the latest developments :

‘Here the new franchise will overthrow the whole former party position. The alliance between the Whigs and the Tories into one great Conservative party having as its basis the entire body of landowners, which has hitherto been split up into camps, and including all the conservative elements of the bourgeoisie: banking, high finance, trade, a section of industry; beside it on the other hand the radical bourgeoisie, i.e., the mass of large-scale industry, the petty bourgeiosie, and, for the present still as its tail, the proletariat now re- awakening to political life-this is a revolutionary starting point such as England has not seen since 1689.’’

In this passage there are several points which are worth considering at some length. 1. Engels points to the major division between capitalists who operate within the sphere of

production and all the others as determining the decisive political dividing line for the future. 2. Engels saw the union of landowners and ‘circulators’ in one political camp as a new de-

velopment. We have already discussed this point and there is no need to elaborate on it further here.

3. Engels noted that the camp to which the landlords, financiers and bankers belonged was the conservative camp of the bourgeoisie; a description which was of course determined by a political orientation from the socialist point of view.

On what ground did Engels think that finance capital and its allies were by their very nature conservative? Engels is merely articulating here a result which is implicit in the sections of Capital, Vol. 111, dealing with money-capital. Circulation capital was not interested in making circulation more efficient except insofar as there was competition among the ‘circulators’. But since already before the end of the nineteenth century competition had disappeared from most of the key positions within the mechanism of circulation, or at least had become very restricted, it followed that circulation capital no longer had much interest in streamlining the circulation mechanism. On the contrary, it had an actual interest in making the mechanism inefficient. The money-dealing capitalists were interested in fortifying their monopoly over all forms of trade in money (stock-exchange operation, coming more and more to the fore as the century wears on, included). In general, the ‘circulator’ was interested in making the process of circulation expensive whereas industry wanted to make it cheaper. This gave rise to a quantitative conflict between them.

Another aspect of the Marxist analysis lay in the consideration that circulation capital was better off during periods of stagnation, depression and crisis-better off than industrial capital at such times, and better off than its own position in periods of expansion. In the first place low commodity prices in a depression placed a high value on money. In other words a new division of social capital takes place in respect to its value and money capital grows at the expense of industrial capital. Secondly, the new division according to value entails a new material division: Finance capital gains control of productive enterprises whose position has been undermined. Thirdly, the prices of commodities in a crisis continually drop and this benefits the creditor at theexpense of the debtor, the banker at the expense of the industrialist. The debtor who repays the sum fixed on his bond returns more than he received. In a depression, therefore, not only does cash capital gain but ‘liquid‘ capital in general. Direct political consequences followed from this insofar as the power of State-creditors over the State was enchanced.

Consequently, money capital operated the mechanism of circulation not only in such a way as not to create industrial expansion but also, as far as possible, to prevent it, i.e., to hinder the powth of production at a steady rate. Here it is a question of the way in which thecarrying out of circulation functions influenced the field of production. From this point of view there is a qualitative conflict between circulation and industrial capital.

According to both criteria the private operation of the mechanisms of circulation, their

Engels to BebeL24 July 1885. Marxand Engels, Correspondence (London, 1934), p. 423.

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operation, in other words, by circulation capital, is shown, in the Marxist analysis, to be a stumbling block for production capital and for production itself. This, in political terms, is the meaning of ‘conservative’ as applied to this group.

4. Finally Engels saw in these developments ‘a revolutionary starting point such as England has not seen since 1689’. This view, which has far-reaching implications, especially in view of the traditional interpretation of Marx’s and Engel’s position, deservesdetailed analysis.

In Capital, Vol. 111, Marx analyzed the contradiction between the development of the modem circulation mechanism and its private use.

‘The banking system, so far as its formal organization and centralization is concerned, is the most artificial and most developed product turned out by the capitalist mode of pro- duction . . . The banking system possesses indeed the form of universal book-keeping and distribution of the means of production on a social scale, but solely the form . . . This social character of capital is first promoted and wholly realized through the full development of the credit and banking system . . . It thus does away with the private character of capital and thus contains in itself, but only in itself, the abolition of capital itself. By means of the banking system the distribution of capital as a special business, a social function, is taken out of the hands of the private capitalists and usurers. But a t the same time, banking and credit thus become one of the most effective vehicles ofcrisesand swindle. Finally, there is no doubt that the credit system will serve as a powerful lever during the transition from the capitalist mode of production to the mode of production of associated labour. . .

We shall only deal with one of the ideas expressed in this passage: the notion that the circula- tion mechanism already constitutes a potential means of realizing the socialization of the organi- zation of labour and that the potentiality is hindered from becoming actual because of the private ownership of the mechanism; and with the conclusion which necessarily followed: that the direct social operation of the mechanism would be an important stage in the transition of socialism.

This line of thought-which is no other than the theoretical basis for the socialist programme in the Manifesto-gives meaning to Engels’ statement about ‘the revolutionary starting point’. It is worth noting that Engels saw the division he described within the bourgeoisie as a starting point comparable to 1689 and not, for example, to 1832; what does this mean in Engels’ terms? In 1832, as a result of parliamentary reform, the industrial bourgeoisie of England was for the first time made a partner in political power. This reform was undoubtedly one of the most important in the political history of England. Nevertheless, 1689-the Glorious Revolution- constituted, in Engels’ view, the politically decisive victory, because it was a decisive victory for what he termed the ‘capitalist mode of production’ as a whole. If Engels found his analogy precisely in 1689, it could only be because he believed that the formation of the new political camps would serve as ‘a revolutionary starting point’ for the transformation of the capitalist mode of production as a whole, in other words, for the transition to socialism.

And indeed, as we have already seen, the authors of the 1848 programme did not define the realization of socialism as a single act and hence did not define it as an event taking place some- where in the distant future, beyond the present day politics of the existing capitalist regime, at some date when politics within the capitalist regime will have somehow come to an end. For them the policy which would realize socialism was a continuation of socialist politics within capitalism, and ‘the revolutionary starting point’ of the former was to be found in the latter. This meant that the splitting of the bourgeoisie into two camps had an immediate bearing on the struggle for socialism and it permitted a start to be made towards the full realization of socialism by fighting for the political destruction of the conservative camp within the bourgeoisie, in other words, for the expropriation of the sphere of circulation.

According to this view the full realization of socialism involved a whole series of steps, spread out over a more or less lengthy historical period; each step constituted an essential structural

1 Cupital,Vol. 111, p. 593.

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change in its own right and only all of them together would add up to an absolute transformation of the old mode of production into that of ‘associated labour’.

The 1848 programme, like Engels’ statement in 1885, looked to changes in the direction of socialism, which were to be based upon the division of forces within capitalist society. The assumption on which these programmes rested was that their realization would not injure the industrialists and therefore it was not impossible to interest the latter, in some form or another, in their achievement.

SOME WEAKNESSES I N THE FULTON REPORT ON THE BRITISH HOME CIVIL SERVICE’

G E O F F R E Y K . F R Y University of Leeds

1. ‘A W I D E - R A N G I N G A N D F U N D A M E N T A L REVIEW’ O F THE C I V I L SERVICE? A T a time when a Labour Government felt that many British national institutions would be invigorated by having their activities reviewed by a committee or Royal Commission, it was not to be expected that the Civil Service would escape an investigation. In recent years there seem to have been even more attacks than usual upon the Civil Service, and particularly its Admini- strative Class, from outsiders who, among other things, have questioned the Service’s ability to conduct some of its more important functions-notably as regards advice about the manage- ment of the economy-and who have criticized the Service’s structure and organization. In a word, the Civil Service has been accused of being ‘amateur’ when the need was for profession- alism.2

Few observers were surprised, therefore, when, on 8 February 1966, the present PrimeMinister, Mr. Harold Wilson, appointed what he called ‘a strong committee’, under the chairmanship of the then Vice-Chancellor of the University of Sussex, Lord Fulton, to examine ‘the structure, recruitment and management, including training, of the Home Civil Service’. The Prime Minister wanted the Fulton Committee to conduct ‘a fundamental and wide-ranging inquiry’ into the Civil Service. But he himself lessened the prospects of such an inquiry when he emphasized that ‘the Government’s willingness to consider changes in the Civil Service does not imply any intention on its part to alter the basic relationship between Ministers and Civil Servants. Civil Servants, however eminent, remain the confidential advisers of Ministers, who alone are answer- able to Parliament for policy; and we do not envisage any change in this fundamental feature of our Parliamentary system of democracy’.3 When the Fulton Report was published on 26 June 1968, it was evident that this ‘rider’ to the Committee’s terms of reference had inhibited

1 This paper is mainly based upon some passages contained in my recent book, States- men in Disguise. The Changing Role of the Administrative Class of the British Home Civil Service 1853-1966, a postscript to which contains some observations about the Fulton Report. This book was published by Macmillans on 26 June 1969, and the passages from this copyrighted work are reproduced with their permission. I take this opportunity of thanking my colleagues Professor A. H. Hanson, J. H. Macdonald and 0. A. Hartley for their constructive criticism of the draft versions of this paper.

2 Among recent books in this vein have been Hugh Thomas (ed.), The Establishment (1959); Michael Shanks, The Stagnant Society (1961); Arthur Koestler (ed.), Suicide of a Nation (1963); Brian Chapman, British Government Observed (1963); Peter Shore, Entitled to Know (1966); Max Nicholson, The System. The Misgorernment of Britain (1967); and Hugh Thomas (ed.), Crisis in the Civil Service (1968).

3 House of Commons, Official Report (1965-66), Vol. 724, Cols. 209-10. This and the other references to Parliamentary Debates are taken from the Weekly Hunsard.