In an article entitled “Machinery of Commonality”a published in issue 25/26 of the NE,b Professor F. W. Förster contrasted the Christian–Tolstoyan viewpoint with that of Bolshevism. This prompted a response from Adele Jellinek in issue 29/30 (“The Ethical Value of Socialism”).c In issue 31/32, the author of the present remarks put pen to paper to present a critical contribution on the issue of the Marxist worldview that was based on the positive spirit of Förster's standpoint. This article appeared under the title “Crisis of Ideology: On F. W. Förster's ‘Machinery of Commonality.’”d The starting point is the following: “The amalgamation of Marxism and socialism prevailing today remains the bugbear of all modern thought. Every intellectual attempt to address the most urgent social problems of our time becomes bogged down in this intellectual swamp” (p. 458). The result: “Utilitarian ethics, materialistic conception of history, positivist epistemology, deterministic philosophy: These are no longer viable in the new conjuncture. But Marxism, as an ideology, is built upon this basis. Its time is over” (p. 461).
I have only now received Fritz Müller's rejoinder in issue 36 of the NE, in which he discusses both Förster and me. It bears the title “On Christian Anarchists and Prophets of Crisis: On the Discussion Förster, Polanyi, etc.”e Toward Förster, Müller is deferential in form and downright condescending in substance; toward me, he is downright condescending in form and utterly heedless in substance. However, the result is the same in both cases. Förster is deemed to be a nobleman; his views are therefore true – though, like any views of a noble spirit, they must remain inconsequential. Polanyi, by contrast, is for unknown reasons branded as the “former Hungarian communist,” hence as a subhuman, as it were; his views, even if they were true, evidently must be inconsequential for this very reason. In this way Müller does not take a coherent position on the content of my article set forth above but merely engages in a literary exercise that has precious little to do with the matter itself. Since I have never been a communist, whether of the old or of the new persuasion, but have long been regarded in Hungary as an adherent of an anti-Marxist ideology, I will address F. W. Förster's observations once again here, in an attempt to defend our common concern in an objective manner.f
Since the dawn of the capitalist era, all social philosophy has split into two camps: an apologetic camp and a socialist camp. The latter calls for the abolition of all exploitation and sets itself the goal of creating a society of free and equal persons.
The socialist schools of the nineteenth century take in turn two directions: the Marxist socialists – who, as a reformist party, would call themselves social democrats, and as a revolutionary party now call themselves Bolshevists (communists); and the liberal socialists – who, as reformists, are known as radicals and land reformers, and as a revolutionary party dissolve into the different anarchist groups.
In contrast to the uniform edifice of Marxist socialism put forward and bequeathed as a closed legacy by Marx and Engels, liberal socialism stands as a free intellectual community of independent nineteenth-century thinkers. This series leads from Turgot and Adam Smith, through Carey, Proudhon, Dühring, and Bastiat, to H. George, H. Spencer, Krapotkin, Hertzka, and Oppenheimer. Transcending all of their differences and divisions, the unifying central theme of their work emerges all the more clearly and significantly. This central theme is the following:
Freedom is the foundation of all true harmony. The condition to which freedom gives rise is the natural condition, whose harmony is grounded in itself and is solid and unshakable. It is not “requirements of natural law” that lead to this ideal image of all human life; on the contrary, this necessary ideal is what leads to the notion of natural laws in the first place. This specific and excellent image is far removed from any despotism [Willkür]. It is the necessary and clear image of that condition to which the absence of all violence, hence true and genuine freedom, inevitably leads.
The goal of the great English–French Revolution was to realize this economic freedom; but the revolution left its work unfinished. The feudal institution of monopoly on land survived the revolution and, as a result, turned the new forces of the free economy on their head. Only free ownership of land in addition to freedom of movement could have brought work and natural forces into a free relation. This is what led to capitalism: a hybrid of violence and freedom, a vile product of the raw forces of the past coupled with the new forces of a free future. Far from being a “necessary developmental phase,” capitalism is instead a product of the retardation of this development at the very point where its creative power would have found full expression for the first time. The capitalist's profit is not the result of pure ground rent (of Ricardo's differential rent, which plays a subordinate role), but of the rent that marginal land also generates. The coercive monopoly on land [Bodensperre]g means that there will always be landless workers who are disposed to hire themselves out as dependent workers at a lower wage than the yield their labor would generate on their own land. The surplus value that the landless class delivers to the landowning class is distributed among the individual members of the latter according to their shares in “capital.” As long as this monopoly on land continues to exist, not only land, but all capital must “yield a profit.” No wage can rise above the wage of the agricultural “marginal worker,” since it is always the latter's starvation wage that determines the base of the wage pyramid. Thus capital profit is founded on pure ground rent – and not on ground rent on capital profit, as the Marxists assume. Exploitation does not derive from the economic law of free competition that supposedly prevails, but from the political law of coercive property in land that actually prevails and nullifies free competition.
Submissive forms of labor have been the political result of violence from time immemorial. Slavery and bondage, the products of political conquest, are the foundation of economic exploitation. Capitalism as an instrument for extracting surplus value is founded on the submissive form of labor whose real name is monopoly on land [Bodensperre]. The army of cheap workers driven by hunger from the country into the cities is everywhere the root cause of capitalist industry, which is itself merely the fruit of the prevailing submissive form of labor, of the monopoly on land.
Today not freedom but monopoly prevails in the economy. This monopoly on land is not a “result of the free economy,” as the Marxists claim, but it is precisely what prevents a free market economy from arising. It is the “extra-economic force” (Marx) that precludes an economy among free and equal human beings and turns the so-called competition of the present day into its opposite: the exploitation of the propertyless class by the class of property owners. Surplus value does not arise in accordance with the law of value of free market economy but in contradiction to it, because a free economy is restricted by coercive property.
This line of thought was first encapsulated by Eugen Dühring as follows:
Institutions such as slavery and wage bondage, along with which is associated their twin-brother, property based on force, must be regarded as social-economic constitutional forms of a purely political nature, and have hitherto constituted the frame within which the consequences of the natural economic laws could alone manifest themselves.h
Friedrich Engels described these ideas as the “basic theme” of Dühring's entire work and tried to refute them, in our opinion in vain.
For liberal socialism, the fundamental problem of capitalism, its unjust economic constitution and the exploitation underlying it, are consequences of restrictions on the true freedom of labor.
The secondary problems of capitalism also spring from the same source.
In an economy completely liberated from surplus value, supply and demand function as harmonious regulators of production and distribution. Here there is no “entrepreneurial profit” other than the eligible wages. There are no crises, because prices no longer realize concealed surplus value but only equal labor values. The perversities of the “profit economy,” which can bring production into conflict with social need, are transformed into an eminent guarantee of the interest of society.
Under this social constitution, free cooperation becomes the general form of collaboration. The organization of consumption and production in an organic structure of autonomous cooperatives is organized by the market itself, extending to the complete exclusion of all intermediate trade, speculation, and other parasitic practices. However, this is an organic form of organization – no longer a mechanical one. Every member is able to survey his position in relation to his environment within the narrow scope of the consumption, production, or other cooperative enterprise to which he belongs. He is able to derive the impulses of both economic self-interest and cooperative altruism from vivid intuition, to re-examine these impulses continually, and to preserve and nourish them with his entire personality. The second source of crises, the lack of market organization, is thus rectified in an organic way, without in the process destroying the active individual, the invisible driving cell of the whole organism.
The image of social life that, as liberal socialism conceives of it, measures up to reality is an image of an organic entity. The economy is a living process that can by no means be replaced by a mechanical apparatus, however subtly and ingeniously conceived. Hoping to determine the needs, capabilities, and interests “of society” by using statistical methods in order to build a corresponding system based on these determinations – a system whose operation does not appeal to the needs of the individual, the capabilities of the individual, and the interests of the individual – this is a completely unfounded and vain hope as far as liberal socialism is concerned.
The method of “statistical determination” is beset by a fundamental fallacy. What can be counted here is not things that should be determined in accordance with their magnitude. One can “count” human beings, commodities, working hours, parcels of land, crop yields, and horsepower; but one cannot count the needs and capabilities of these human beings, the intensity and quality of their work, the fertility of the land, the technical possibilities of an invention – and these are the only factors that count in the life process of the economy. Identifying the portion of the vascular tissue of the economy that is illuminated by the numerically analyzable market with the actual economy that has to be brought under control would be like identifying the illuminated portion of our mind that appears in consciousness with the latent and hidden content of our unconscious mental organism whose function this consciousness itself is. The market is a peculiar sense organ in the literal sense, and without it the circulatory system of the economy would collapse. The operation of the market that accomplishes this perceptual function, however, is free price formation.
There are two conceivable methods for distributing the product of social labor, namely by means of the market as the center of a web of prices that delivers good to needs, or without a market, through direct allocation. The former is reality; the latter, in the national and world economy, an impossibility. Nothing could replace price formation here, for prices do not express a distribution quotient of existing goods to existing needs, for instance, even though a human price is at least theoretically conceivable. On the contrary, the price is a floating indicator that does not show the manifest needs and the manifest work effort, but instead the moments of change of the needs and means of work hidden behind these manifestations; not real magnitudes as such, but differentials of the organic life process of the economy. It is the regularity and relative consistency of the price manifestations that belied their purely functional character. Prices are certainly not characteristics of the commodities, but relations among the producers. However, the modality of these relationships is concealed from us by the dense web of myriads of economic cells, and all that we know is the result of their integration. This result is the prices. Expecting prices to regulate themselves according to the statistics would be as futile as expecting one's manometer to operate in accordance with the factory settings. But there is no middle ground between market economy and marketless economy. This would be like presupposing a collection of limbs with an active circulatory system, or a living human being with an artificial heart mechanism.
This is why cooperative socialism is synonymous with market economy: not the anarchic market of the capitalist profit economy as a field in which the plunder of the surplus value concealed in the prices is realized, but the organically structured market of equivalent products of free labor.
This organic intuition means that liberal socialism is in principle a physiocratic doctrine (Turgot, Carey, Oppenheimer, A. Dániel). The dependence of production as a whole on agricultural yields is a fundamental principle of liberal socialism. Therefore the forms of organization of industry must always remain a secondary matter for liberal socialism, one that can never determine the constitutional forms of land unilaterally. The meaning and content of all urban movements is decided in the countryside. Although the technical productivity of machinery raised the average standard for workers in the early capitalist era, the ocean of misery in the countryside that benefited from this simultaneously pushed the level of the urban worker far below the wage of medieval journeymen and craftsmen (Franz Oppenheimer). Moreover, the effect of all industrial socialization, insofar as this is supposed to raise production, would still have to be absorbed in the long run by the rising standard of living of the agricultural laborers, which is a result of political revolutions.
Therefore, for liberal socialism as a liberal and physiocratic economic conception, the question of the agricultural cooperative has priority. Of course, this must be a voluntary enterprise, for otherwise it would not be a cooperative enterprise at all. There is no middle ground between enforced cooperation and free cooperation either. On paper they may be indistinguishable; in reality they are as different as a living human being is from the panopticon mannequin. Their construction, their efficient cause, their metabolism, and hence their durability and vital function are fundamentally different. Apart from K. Kautsky's exemplary lack of appreciation of agricultural issues, it is his fatally offhand treatment of the cooperative question in particular that constitutes his historical omission. This led to the serious error of treating the cooperative as a decorative subsidiary form, as it were, alongside the communist state economy as the principal form, as though a cooperative were conceivable under conditions of a marketless economy. The omissions of Marxist theory and practice of the past decades have nowhere been as grave as in respect of the cooperatives, and nowhere else have they avenged themselves as much as in this very point.
A state-created cooperative is nothing but a large-scale public enterprise where the relations in which the participants stand can be generated only by coercion, no matter how just or how reasonable this coercion may be felt to be. The cause of the existence of such a cooperative is not the insight, purposes, and interests of the individual but the will of others, which gives rise to a shared fate. The hidden sources of strength of the individual are not at its disposal. The relationship in which the ultimate, inconspicuously small but still expended effort stands to the likewise inconspicuously small but still expected increase in value of the joint product is the quotient that determines the productivity of cooperative labor. Without this infinitesimal moment, the cooperative is in no way superior to wage labor. On the contrary. For in the case of wage labor it is the profit mania of the capitalist wielding the scourge of hunger that squeezes this final expenditure of effort – albeit not to such a high degree [Potens] – out of the worker for the capitalist's benefit.
But feudal estates are the last thing that can be transformed into communist “large-scale cooperative enterprises” by decree. This is a twofold impossibility: first, the impossibility just outlined, of decreeing cooperatives at all – that is, of forcing agricultural laborers, farmhands, tenants, and so on to cooperate freely and voluntarily; and, second, the impossibility of simultaneously forcing them to regard the product of their labor as public property that is supposed to be exchanged for industrial products. This amounts to forcing the semi-enslaved people of the countryside to engage in free cooperation and at the same time, in a single breath, to engage in the marketless state economy. Such attempts are completely futile. For liberal socialism, only voluntary cooperatives can exist; it knows no others. The red-painted large-scale feudal enterprises of the Soviet era in Hungary are the prototype of revolutionary Potemkin villages. Civil war may necessitate such undertakings; far from refuting, this actually demonstrates their untenability in the context of national economies.
Liberal socialism is fundamentally hostile to force. For liberal socialism, not only the state as an organism exercising domination over persons, but also the state as an administrator of things is, practically speaking, a necessary evil and, theoretically speaking, a superfluous and harmful construct. Any attempt to use state power to replace what can only arise through the life and activity of the individual inevitably has devastating consequences.
“Communist state economy” is viable only in the domain in which its idea arose, which is the domain of the urban enterprise. These industries are great in number and importance and their socialization is urgent and necessary. But the reorganization of industry must not abolish the market economy, because otherwise the economy itself would come to an end. On the other hand, it must not extend to agriculture, for this is the true home of the cooperative large-scale concern. Socialization should not be synonymous with state economy either. The state should not be the agency of socialization, or at least it should not be the ultimate owner of the enterprise; the agency should instead be the economic autonomy of all – as represented by their organs, the workers' councils and the other representatives of autonomous consumption and agricultural production. More on this later. Here suffice it to show that liberal socialism considers the socialization of the principal mechanical means of production – without violating the principle of a free and cooperating market economy – to be an urgent measure and calls for it.
Thus “communism” is a twofold necessity for liberal socialism – though this in no way leads to a marketless economy, to communism proper. The one necessity is permanent, the other temporary. The first is the socialization of large-scale industrial concerns. The second is the communism entailed by every war and every revolution, which is a result of the provisioning of warring armies or of the strategy of civil war. This is merely an accompaniment of the proletarian uprising, not its historical meaning. This will be explained in greater detail in the political–historical section of this presentation.
Before we turn to that part, I would like to list briefly the practical means available for the positive construction of the liberal–socialist society:
The history of Bolshevism is brief, but conclusive in its results:
Fourteen months ago the author of these lines described the doctrines of the Russian Revolution as follows:
The political triumph of Bolshevism in Russia means the complete defeat of the communist economic program. Every success of the Soviet government is purchased at the cost of relinquishing the demands of the centralized state economy. What is to be found in Russia is not marketless exchange, not production through and for society, not the nationalization of land, but instead market, private property in land, voluntary free cooperatives as the dominant force in the market of food products, piecework with monetary wages, and all of this in the necessarily depraved forms brought about by the civil war – specifically black marketeering, speculation, state-guaranteed company profits, wages for skilled labor first artificially lowered and then artificially raised, underproduction, and overexploitation. What was not understood at the time – or was, at best, misunderstood – is, today, an acknowledged historical reality: the complete political triumph of the Soviet government, coupled with the complete collapse of the centralized state economy in Russia. What reigns in Russia today is Lenin's political power and the economic power of the new, free Russian agricultural cooperatives producing on their own land, which have come together to form a voluntary, mighty colossus. The negative proof of the same truth was provided by Hungary: there the political power of the Soviet is inferior, solely as a result of the seriousness and energy with which it exerted itself to the utmost to realize its economic program. Without the generous but completely failed attempt of the communist economy, Hungarian Soviet power would still be in control today. Both Russia and Hungary teach us the same thing: the political success of the dictatorship of the proletariat and the economic success of the dictatorship of the proletariat are mutually exclusive. By political success here is meant the attempt to concentrate state power in the hands of the working class; by economic success, by contrast, the attempt to restructure the economy in accordance with communism (marketless, centralized state economy). But every other socialist economy, except the communist, is compatible with the political power of the working class. This is the fact that will determine the future of Europe.
The historical meaning of the Bolshevik movement is not communism. Its true meaning, which is realized in the dictatorship of the proletariat, is a twofold one: (1) it will permanently efface the stifling boundaries of historical states; (2) it will tear the power of large agricultural estates and of monopoly capitalism out of the soil of the economy by the roots. This effect – theoretically intrinsically destructive – will leave behind a scene of complete economic anarchy and political despotism in a Europe laid waste for decades to come, if the liberated forces of the land do not devote themselves to the task of reconstruction in a timely fashion and in the form of cooperative socialism, which is the only possible one.
The elevation of the bourgeoisie created the nation-states; the elevation of the workers will create the world state. However, the bourgeois revolutions were sustained by the material interest of the revolutionary class, the bourgeoisie; the more complete its victory, the higher the standard achieved by that class. No political reaction could economically undo its triumph. For the industrial proletariat, the communist path means, on the contrary, hardship in the struggle, hardship as a result of the struggle, and hardship in the case of a political defeat. But, as indicated above, every economic advantage must in the long run benefit the ocean of misery that the proletarians of the countryside still represent today. All of these are indicators of a political, not an economic revolution. The final political, legal, and monopolistic privileges of the former “higher estates” are what will be destroyed here, and the forces of free labor on free land are what will be rendered all-powerful. That is not a revolution in the most profound economic sense, however, because it does not represent the inversion, but instead the completion of the movement that began with the great English–French revolutions. But it is the most important economic advance that human society is capable of far into the future, provided that it survives the convulsion.
Human society will be able to make this advance only if the communism of necessity that is intrinsic to all wars and revolutions is not confused by the great world revolution with its true meaning, which is not communism but the final creation of free cooperation among free workers, on the liberated land of the world. For this world will either perish or survive, in the words of F. W. Förster, “as the final result of a richly articulated, cooperative interaction among maximally free individual actions.”i
The crucial issue today, however, is to understand that liberalism is not the policy of the past and anarchism the policy of the future, but that their shared ideological content constitutes the reality of the present.
The crucial issue today is to grasp that what is currently being satisfied is the demands that the liberal and anarchistic socialists have been making for the past century – not in their utopian form, but in accordance with their real political substance. The world revolution will not bring about communism, but liberal socialism instead.
The crucial issue today is to understand, finally, that the cooperative economy is incompatible with communism, for the former can only survive where free cooperation and free exchange interact freely.
Today every militant must feel profoundly that he is not called to coerce humanity to its salvation but to restore humanity to its freedom, and he must have the inner conviction that what will save the world is freedom – and nothing else.
That is the crucial issue.
Translated by Ciaran Cronin
I would like to thank Gareth Dale for kindly making available to me his photographs of the 8-page typescript of Karl Polanyi's unpublished 1919 essay “Worauf es heute ankommt: Eine Erwiderung” from the Karl Polanyi Archive at Concordia University and for his help with a number of points of translation. The typescript contains numerous typos and errors, most of which were corrected by hand, in pencil (presumably by the author); moreover, a couple of passages were barely legible, and one passage was illegible. However, the associated difficulties of interpretation could be resolved with a high level of confidence – in the case of the illegible passage, with the kind assistance of Giorgio Resta – and hence have not been commented upon in the translation.