THE FALLACY OF “CLASS STRUGGLE"
To solve the problem of livelihood, according to the American writer referred to above, is man’s constant
endeavor ; and thus it is the law of social progress—the gravity-law of history. This new theory of the social interpretation of history is fundamentally different from Marx’s materialistic interpretation of history. Which of the two theories is the correct one?
Marx analyzed the social Question from the materialistic standpoint, especially from the point of view of production. Large scale production in modern society is made possible through the organization or co-operation of three factors, namely, capital, labor, and machinery ; but at the ed of the process the capitalists take by far the larger share of the profits and labor receives a very insignificant portion. Hence, there is conflict between labor and capital which leads to class war. According to Marx. Class war is not characteristic of the industrial age alone, but has taken place in all ages of history. For example, we find in ancient times struggles between masters and slaves, between landlords and tenants, and between the nobility and the common people. In short, class struggle is a struggle between the oppressed and the oppressors ; and will last until society is thoroughly reorganized on the principles of social equality. Marx maintained also that in the past class struggle has been the motive force behind progress; in other words, class struggle is the cause and social progress is the effect.
But is Marx right in this ? Modern society is progressive ; and if we were to make up the account of its progress, it would be a very long, complicated list of achievements Let us take economic progress as an example. Roughly speaking, in recent years the Europeans and Americans have achieved four things : (1) improvement of the social conditions of the working class ; (2) socialization of
transportation and communication facilities ; (3) creation of direct taxation, and (4) socialization of distribution.
In regard to the first point : Modern states, led by Germany and followed by Britain and the United States, have instituted many reforms for the good of the working class, such as the establishment of schools for workers, the provision of health laws, the improvement of working conditions, and the reduction of industrial accidents. As a result of these reforms, there has been an increase of working efficiency with a corresponding increase of production.
In regard to the second feature of economic progress : Street cars, railroads steamship lines, postal and telegraphic service, and other important means of communication are gradually coming under government control. There are two important reasons against the private operation of big transportation industries : Firstly, private operation tends to create monopoly ; and secondly, it often suffers from insufficient capital. On the other hand, with plenty of capital and pure motives for service which facilitates the speedy transport of raw materials into the factory and of the finished products from the factory to the market, means low costs of production and consequent b7usiness prosperity. Germany realized this fact many years ago and nationalized all her big transportation industries. Even America, where individualism is still the predomination creed, had to follow Germany’s example during the Great War.
Thirdly, by the term direct taxation, I refer to such taxes as the income tax and the inheritance tax which are levied according to a graduating progressive scale. The
significance of direct taxation is that it is to draw a large portion of the national revenue directly from surplus capital which can always be taxed heavily without running into the danger of excessive taxation. In olden days when land tax and excise were the only taxes, the income of the poor or of the idle class, not the excessive wealth of the rich, was taxed ; so the rich enjoyed excessive wealth without being subject to taxation. Seeing this injustice, Germany and Britain many years ago adopted direct taxation. When the War broke out, Germany drew 60 per cent to 80 per cent and England drew 58 per cent of her revenue from the income and inheritance taxes. America, being slower in this matter, did not accept the income tax and the inheritance tax until ten years ago [1913], but since then her revenue from these items has been steadily increasing. In 1918 the income tax alone yielded $4,000,000,000. In all European and American states, the vast increase of national revenue from direct taxation has enabled the governments to undertake more social reforms.
Comment : personally I do not believe in the soundness of the taxation on incomes ; nor is the inheritance tax apparently equitable. One, undeniable, factor in the taxation on incomes is that any organization of the same is entirely arbitrary. Hence, the minimum income tax in the U.S. of the 1910-21’s to which Sun refers had in the meanwhile grown into an absurdity. On any count, such taxation does demonstrably penalize talent and productivity, the results are only the lessening potential for wealth within the economy. — (WPT).
Fourthly, socialization of distribution is the newest feature in Western social progress. Under the present bargaining system, buying and selling are done through middlemen, and money is used as a medium of exchange. The middlemen—the merchants—usually buy the goods from the producer at a very low cost ad sell to the consumer at high prices—in this way deriving great profits at the expense of the producer and the consumer. Recently it has been found that these middlemen can be eliminated by distributing agencies organized either by the government, or by private bodies which represent either producers or consumers. The kind of consumers?co-operation newly-adopted in England is an example of a private distributing
agency. Municipal water works, municipal electric systems, coal ad gas companies, and municipal dairies, are examples of government distributing agencies. This new development may be called the process of socializing distribution ; and the greatest advantage of this process is the saving of profits previously taken by the middlemen. In other words, it is “socialism applied in distribution.?
Now the question is : What has caused these four factors of economic progress ? According to Marx’s way of reasoning, they should be caused by class struggle, that is, by the conflict between capital and labor, but historical facts have proved the contrary. They are the results, not of class struggle, but of mutual understanding between capital and labor and of their realization of the fact that capital will make higher profits and labor better wages through greater efficiency ; resulting in cheaper costs of production and therefore in business prosperity ; and also by the realization that these in turn are only possible by improving the working conditions, the transportation systems, the taxation systems, and the systems of distribution. In other words, modern economic progress is caused by the harmony, not the conflict, of the economic interests of society. Why is there such harmony? Because all men must live and must face the everlasting problem of livelihood. They either perish through conflict or live through co-operation.
Class struggle, therefore, is not the cause of social progress, but a kind of social disease, which develops when a social group lacks the means of livelihood and resolves as the last resort to use abnormal means of obtaining its livelihood. Marx’s trouble was that he mistook a social pathological condition for the cause of social
progress ; so rightly he should be called a “social pathologist" not a “social physiologist."
THE FALLACY OF “SURPLUS VALUE"
Marx further declared that the “surplus value" obtained by the capitalists was a robbery from labor. In this statement, Marx overstressed the contribution of labor in the process of production, and neglected the contribution of society in general. Take the modern cotton mills in China as an illustration. During the European War the mills in Shanghai, Nan Tungchow, Tientsin, and Hankow made a net profit—or surplus value—of from several hundred thousand dollars to several million dollars. Did every cent of this “surplus" come from labor? In the first place, cotton is the raw material for making cloth. When the farmer cultivates the cotton plant, he does it according to the instruction of the agriculturist ; especially does he use the knowledge of the agriculturist in making improvements. He uses farming machines to till the ground and fertilizer to enrich the soil ; after harvest, he sends his cotton to the factory either by railroad or by boat. Thus in the process of manufacturing cloth, in addition to the service of the laborer in the factory, there are the contributions made by the farmer, the agriculturist, the manufacturer, the inventor of farming machines, the person who discovered the use of fertilizer, the railway men or steamship merchants, the persons who invented the use of steam and electricity, and the miners who furnished the raw material for building the railroads and steamships. Lastly, without consumers to buy cloth, neither capital nor labor can derive any profit or value from the cloth however excellent may be its quality.
It seems to be absurd, then, for Marx in his “surplus value" theory to ignore all direct and indirect contributions by persons other than laborers. As a matter of fact, every one who is doing useful work whether he is a producer or a consumer, is a contributor to the “surplus value” ; and labor is only a minority group among the contributors to the “surplus value.” There are in the United States only 20,000,000 laborers, that is, one-fifth of the total population. In other countries such as Chine where industry is not so highly developed as in the United States, the proportion of laborers is much smaller than one-fifth. The industrial conflict, then, is not one between the laboring class and the capitalist class as Marx predicted, but one between society in general and the class of selfish capitalists. Because everyone in society must live and because a group of selfish capitalists is constantly encroaching upon the liberty of the majority who are endeavoring to earn a livelihood, modern society has decided to take under public control certain important industries, public utilities, and distributing agencies, to levy income and inheritance taxes and to improve working conditions in factories. These activities have undoubtedly promoted harmony among different economic interests in society, and the result is an increase in social happiness and a step forward in social progress. Now that we know that Marx’s theories are wrong, and that livelihood is the law of social progress or the center of gravity of history, we may proceed to find a solution of the great Social Question.
RECENT DEVELOPMENTS OF CAPITALISM
Since Marx, in his study of social progress, confused cause with effect, his prediction has not been fulfilled ; (etc).
( pages 401 - 407 )
It is evident . . . that we who undertake to solve the problem of the people’s livelihood in China may admire Marx’s profound scholarship, but should not follow his methods for they are not suited to the conditions of this country. Even Soviet Russia, after the years of experience following the Revolution, has adopted a new economic policy, because, not being as highly developed economically as England or the United States, Marxism did not work there. If Russia’s economic standard is too low to practice Marxism, how can China practice Marxism? So what Marxists propose to do will not solve China’ Social Question.
I remember when I was a student in Canton thirty years ago, young men from rich families in the West District would wear fur coats as soon as winter came. As a matter of fact, Canton never has a cold enough winter to justify the use of fur coats. But these wealthy young men felt they must wear fur coats to show their wealth. During the first part of the winter, they wore light furs ; as the weather got colder, or in midwinter, no matter what the weather was, they wore heavy furs. One day, these wealthy young men in their fur coats attended a meeting at which I was also present. It happened that the weather was very warm that day. They complained that unless the wind changed to the north, people would get sick. Their idea was that everyone in the community had fur coats to wear ;
and so, unless the wind changes, everyone would get over heated and his health would suffer. As a matter of fact, how many among the people in Canton can afford to have furs during the winter/ In winter, some people in Canton wear cotton-wadded garments, and others wear double-lined garments only. Are they ever afraid that the north wind will not blow?
These young students who advocate Marxian methods as the only hope for the solution of China’s socio-economic problem are as illogical as those wealthy children crying for the north wind to blow in order to save their health. We should be aware that China’s trouble is poverty, not unequal distribution of wealth. In a society where wealth is too unevenly distributed, Marxian ideas of class struggle and dictatorship present an appropriate solution. In China industries are not developed ; and so she has little use for these ideas. So today we may study Marx’s ideas for reference, but we must not apply his methods. In solving the problem of livelihood, we must not propose an impractical and radical method and then wait for industry to develop ; but a preventive method to check beforehand the growth of large private capital and the vast inequality between rich and poor. This is the plan which will solve the Social Question of China. It is not like first wearing furs and then hoping for the north wind.
( pages 437-8)