This section is from the "Economics In Two Volumes: Volume II. Modern Economic Problems" book, by Frank A. Fetter. Also available from Amazon: Economic
§ 1. Meanings of socialism. § 2. Philosophic socialism. § 3. Socialism in action. § 4. Origin of the radical socialist party. § 5. The two pillars of "scientific" socialism. § 6. Aspects of the materialistic philosophy of history. § 7. Utopian nature of "scientific" socialism. § 8. Its unreal and negative character. § 9. Revisionism in the Marxian ranks. § 10. Socialism and anarchism. § 11. Syndicalism and I. W. W. § 12. Guild socialism. § 13. Opportunism in socialist party tactics. § 14. Alluring claims of party socialism. § 15. Changes in the socialist party vote. § 16. Economic legislation and the political parties.
§ 1. Meanings of socialism. Our reason for leaving to the last the discussion of authority as a method of distribution is not that it appeared last in historical development, but that it now is the most strongly advocated as an alternative of competition. In primitive, in ancient and in medieval societies, authority as a method of distribution was used much more than it now is, and the history of Europe from about the eleventh century is filled with the record of the displacement of authority and status by competition. But one of the most striking developments of opinion in the nineteenth century was that favoring an increasing use of authority in distribution. Authority has been advocated not merely to supplement and modify competition, but to displace it completely or, in the more moderate program, in large part.
This opinion, or plan, has appeared under a variety of names, the main ones being communism, collectivism, social-democracy, and socialism, of which the last name has just now the greatest vogue. Socialism is a word of manifold meanings no one of which is generally accepted. Discussion is therefore often a Babel of tongues. Much of the confusion may be cleared up by observing that the word "socialism" designates (1) a social1 philosophy (2) a mode of social action, (3) a particular political party. There is thus philosophic, active, and partizan socialism. Each of these may be taken either in an absolute or in a more or less relative sense. The first meaning is the most fundamental, the second less so, and the last the least fundamental, but just now the most frequently used.
§ 2. Philosophic socialism. As a philosophy socialism is related to social just as individualism is related to individual. Socialism is faith in the group motive and group action rather than in self-interest and competitive action. Instead of social philosophy we may say social faith, or social ideals. This faith may be absolute, or radical, to the rejection of all economic competition; or it may be moderate, and leave more or less place for self-interest and competition. Every man of conscience and of ideals has moods that are socialistic (in this sense) and dreams of a world without toil, competition, or poverty.
This social philosophy has taken form as " Christian Socialism" among men of strong religious natures, in various religious denominations. Great secular dreamers - Plato in his "Republic," Sir Thomas Moore, in his "Utopia," Edward Bellamy, in "Looking Backward," William Morris, in "News from Nowhere," and others - have painted beautiful pictures of ideal economic states from which all of the great evils and problems of our society have been banished.
§ 3. Socialism in action. Active socialism is group action in economic affairs. This may be by private voluntary groups, as a club, church, or trade union, or by a public group, or political unit of government, which has therefore a compulsory character. The most radical kind of active socialism would be the ownership by government of all the means of production and the conduct of all business, assigning men, by authority, to particular work and granting them such incomes as the established authority thought they deserved. This kind exists nowhere, and never has existed, though it has been nearly approached in many parts of Russia under the Bolshevik regime.
1 See Vol. I, p. 6, on "social" and the social sciences.
A moderate kind of active socialism is represented by each separate case of public ownership or industry. Even public regulation by authority, of the many kinds described in this volume, is touched with a quality of active socialism. In this sense there can be more or less of active socialism in a community; a state may be more or less socialized in its economic aspects. An English Chancellor of the Exchequer declared in the last decade of the nineteenth century, "We are all socialists now." The ever-increasing sphere of the state 2 gives to that statement to-day a larger, fuller meaning than when it was uttered.
Socialism in action is of course always the expression of a more or less socialistic philosophy held either by a democratic majority of the people or by a despotic minority, as in Russia under the Czars and the Bolsheviki. Most of the great recent movement of socialism in industry is the expression not of a radical but of a moderate social philosophy. It does not look to the abolition, but only to the modification and limitation in some directions, of private property and of competitive industry. The spirit of this movement is opportunist, or experimental. It is ready to try public action, but recognizes that it has difficulties and limitations. The ultra-radical and the ultra-conservative alike declare that these measures "logically" lead on to the complete destruction of private property. But men find that they can warm their hands without being "logically" compelled to thrust them into the fire, and that they can quench their thirst without a growing resolution to drink the well dry. When this governmental activity has proceeded somewhat extensively and systematically in cities, as in Great Britain, it is called municipal socialism; and in states, as in Germany before the World War, it is called state socialism.
2 See e.g., ch. 9, §§ 2, 10; ch. 11, §§ 7, 8; ch. 7, §§ 3, 4, 12; chs. 19, 22, 23, 24, 29, and 31.
§ 4. Origin of the radical socialist party. Socialism in the partizan sense is an actual political organization. Both in Europe and in America such organizations have been designated as "social-democratic," "socialist labor," or "labor" parties. Socialism in this sense of a party organization, or movement, is very different from a social philosophy. In its partizan phase socialism exhibits all of the baffling variability and elusiveness that it does in its other aspects. However, in its printed program, the socialist party sets forth both a socialist philosophy and an ideal of active socialism in their most radical forms.
Modern political socialism traces its origin directly to the most radical of German social philosophers, Marx, Engels, and Lassalle. Karl Marx (1818-1883), preeminently the philosophic leader of the movement, collaborating with his friend Friedrich Engels (1820-1895), sought to give a solider foundation of reason to the somewhat romantic socialist philosophy current in his day. His own doctrine, first set forth connectedly 3 in the Communist Manifesto in 1847, and later developed in his chief book "Das Capital," he called Communism. He deemed this to be, as it has been called by his followers, "scientific socialism." "Scientific" was meant to emphasize the contrast with "Utopian" socialism, as Marx and Engels somewhat scornfully characterized alike the older communist philosophy, the romances of the ideal state, and the attempts to found and conduct small communistic societies.
 
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