Friday, 22 June 2018

The Preconditions of Socialism: a Critical Review (viii)

“The period of the first globalization is as fascinating as it was prodigiously inegalitarian”. Thomas Piketty (Capital in the 21st Century, 2014. Kindle Locations 595-597. Harvard University Press. Kindle Edition.)

We finally made it to Chapter 3 of Preconditions (2 of Evolutionary). As the review will now deal with statistical data, this post contains an unusually large number of links to resources freely available over the Internet. Although readers may find the task daunting, I’ll invite them to carefully check those links. I personally visited each and every single one of those pages, and in my opinion they are educative.

Eduard Bernstein composed and published Preconditions during the late 1890s. The largest national capitalist economies had been experiencing a period of overall prosperity, punctuated by the usual downturns. In some places that bonanza started as early as the 1870s; in the US it would extend well into the Roaring Twenties.

Although there are more evocative names, Thomas Piketty, in his Capital refers to those times in general with the more neutral-sounding, but very appropriate, “‘first globalisation’ of finance and trade (1870-1914)” (Kindle Location 594).

And it’s not coincidental that Piketty mentioned Bernstein three times: both deal with some of the same subjects and variables, using tax return data [maybe other authors before Bernstein had studied tax returns, but Preconditions is the earliest example I could find (p. 60) and the most unfortunate].

But the usefulness of Capital to assess Preconditions goes far beyond periodisation or noticing that Bernstein and Piketty studied similar data for Europe, roughly during the same period.

Consider the table below (extracted from Piketty’s table 7.2: “Inequality of capital ownership across time and space”):

                                 Very high
Share of different groups       Inequality
in total capital             (Europe 1910)
The top 10% "upper class"              90%
    Top 1%
    ("dominant class")                 50%
    Next 9%
    ("well-to-do class")               40%
The middle 40% ("middle class")         5%
The bottom 50% ("lower class")          5%

From that table, it’s evident that the “dominant class” owns 10 times more stuff (“capital”, in Piketty’s broader sense) than the “lower class”, but it’s only 1/50th the size of the latter (1% versus 50%).

That was indeed a prodigiously inegalitarian period: it wouldn’t be too inaccurate to say 90% of the population of 1910s Europe owned little more than the shirts on their backs. So much for Sidney Hook’s breathtakingly disingenuous “the poor were not becoming poorer and the rich, richer”: don’t be silly, Sid, the rich could hardly get any richer, or the poor any poorer (more on this next time).

What is apparently less evident is that that means your run-of-the-mill “dominant class” person owns as much stuff as 500 “lower class”. But there’s more: the stuff that 1-percenter owned included plenty of things, all of them nice, to be sure; it also included the much more important means of production, which afforded them hegemony over society.

Dividing equally that 1-percenter’s wealth among the 50 “lower class” actually present in the economy would not only have raised the latter’s wealth holdings ten-fold, it, much more importantly, would have freed them from that hegemony.

One could extend that calculation to the following -- barely distinguishable -- 40% “middle class”: 90% of the population would have found themselves freed from wage slavery and their wealth holdings multiplied by a little over five times.

Whatever spin anti-Marxist agenda-pushers might want to put in the situation, at the very least between the late 1890s and the early 1910s Europe one wouldn’t have been too misguided to say with Marx and Engels:
“Our epoch, the epoch of the bourgeoisie, possesses, however, this distinct feature: it has simplified class antagonisms. Society as a whole is more and more splitting up into two great hostile camps, into two great classes directly facing each other — Bourgeoisie and Proletariat.”

Moreover, one could also consider the effect of re-distributing the property of the 9% “well-to-do class” immediately under the 1% “dominant class”.


This may sound obvious to us now, but could people back then have had such a clear perspective? In order to consider that question, we’ll leave for now Piketty and his data to retake that in the next post.

A reviewer attempting to assess Preconditions 119 years after its publication faces the risk of underestimating the state of knowledge and intellectual ability prevailing in 1899. It’s the kind of self-serving arrogance born out of ignorance one often observes in modern casual commentators.

Preconditions only reinforces that risk, as it astonishingly contains no reference whatsoever to previous work in the field of economic inequality and allied subjects.

Before a brief account of relevant 19th century investigations, a little explanation about historical British currency is required. Currently, the pound sterling (£) follows the same universal decimal pattern other currencies adopt; say, one and a half pounds is represented like this: £1.50. It wasn’t always written like that. Before decimalisation (in 1971) a pound was equivalent to 20 shillings (s) and a shilling to 12 pence (d): one and a half pounds, therefore, was  £1s10. If one were to add pence, prices would be written thus: £XsYdZ. (For more details on that, wages and cost of living)

An early fledgling contribution to this literature is the pamphlet The Bitter Cry of Outcast London. Co-authored by the reverend Andrew Mearns and William Carnall Preston that exposé was published in 1883 (the same year Karl Marx died) and caused a bit of a sensation:
“Women, for the work of trousers finishing (i.e., sewing in linings, making button-holes and stitching on the buttons) receive 2½d. a pair, and have to find their own thread. We ask a woman who is making tweed trousers, how much she can earn in a day, and are told one shilling. But what does a day mean to this poor soul? Seventeen hours! From five in the morning to ten at night—no pause for meals. She eats her crust and drinks a little tea as she works, making in very truth, with her needle and thread, not her living only, but her shroud.”
More substantial contributions followed, such that by the late 1890s much information was available in Britain. Interested and impartial readers would have been able to suspect that Marxist predictions were much closer to the mark than a superficial examination would lead us moderns to believe.

The first and more rigorous contribution I’ll mention here came from a source ideologically acceptable to anti-Marxist critics, acting with the best of motivations: Charles J. Booth, a Liberal business man who gradually moved towards Toryism. It took the shape of two volumes: Life and Labour of the People, 1st ed., Vol. I and Labour and Life of the People, 1st ed., Vol II,  published in 1889 and 1891, respectively (although the Internet Archive provides files corresponding to this work, I found it impossible to assemble a list of links to a single edition).

Booth assembled, led and presumably funded a team to conduct what turned out to be pioneering sociological research. Apparently a claim made by Henry Hyndman (another wealthy business man and an Oxford graduate who became an early populariser of Marxism in Britain and founder of the first British socialist party) in the Pall Mall Gazette in 1885 angered him. Hyndman, the story goes, wrote that 25% of the East London population lived in abject poverty.

Booth set out to disprove Hyndman’s inconvenient and obviously wrong claim and disprove him he did: according to his own results, it was 35%, not the 25% Hyndman claimed, that lived in abject poverty. Remarkably and much to my surprise, Booth did not hide his own findings. This is a sample of his cartographic output:

“Poverty map of Old Nichol slum, 1889
(black indicates the lowest class…
occasional labourers, street sellers,
loafers, criminals and semi-criminals”)

Two things make this omission particularly curious. First: Over the years that report would be re-published, increasing in size up to 17 volumes, becoming very influential. Second: In Chapter 4 of Preconditions (3 of Evolutionary) Bernstein praised Beatrice Webb (née Potter) by name; she was a cousin of Booth, a member of his team and a leading Fabian socialist.

Another early British contribution was John A. Hobson’s 1889 Problems of Poverty: An Inquiry into the Industrial Condition of the Poor. Considering an aggregate national income for 1889 of £1.75 billion and estimating as 6.9 million the number of families in Britain, Hobson estimated the yearly average income per family as close to £182. However, given that only 37% of the aggregate national income went to wages, the yearly average wage income per family was only £94 (36s a week).

This establishes a first cause of income inequality, but does not account for the whole range of it: according to Booth’s study, which Hobson references, 35% of the 891,539 inhabitants of East London earned less than 21s a week: 2/3 of the average weekly wage income. Moreover, he adds, actual wages were highly volatile: no work, no wages. (Against what modern petty bourgeois intellectuals parrot as modern characteristics of “neoliberalism”, the casualisation of work, the gig economy, the free-lancer, are not modern things.)

From the other at the time more egalitarian side of the Atlantic came American journalist Jacob Riis’ 1890 How the Other Half Lives: Studies among the Tenements of New York. As we’ve seen, it’s a very appropriately titled book (downloadable with low resolution images, online with higher resolution images).

A former inhabitant of the slums of New York, Riis’ own research was more scholarly modest than Booth’s, but, being among the first to collect photographic evidence, still managed to be innovative:

Bottle Alley, New York. Circa 1890 [A]

Lodgers in a Crowded Bayard Street Tenement--'Five Cents a Spot'. Circa 1890. [B]

Those one sees there belong in Piketty’s  50% “lower class”: there’s a difference between the clinical appearance of statistical data and the human reality they are supposed to reflect, uh?

A couple of years after Preconditions was published, the industrialist curiously named B. Seebohm Rowntree published Poverty, a Study of Town Life, focused on York, seemingly following Booth’s methodology: his team visited over 11 thousand families (about 47 K individuals), and his results largely confirm Booth’s (incidentally, given that economists seem to have difficulties understanding the concept: that’s what replication means), extending his results to other large cities. At the time, the usual Very Serious People, unable to refute Booth’s distasteful findings in toto, were claiming they applied to London, only. You know, the usual haggling that one sees among academics nowadays.

There was transatlantic cross-pollination too: Riis created a precedent in the kind of close-quarters, low-budget, research. In the summer of 1902 American writer and journalist Jack London visited the East End of London. The result was the book-length report The People of the Abyss. He went a step beyond Riis, and “embedded” himself in the medium he was studying. I suppose one could call that an ethnographic study, serving as precedent to George Orwell’s own The Road to Wigan Pier three decades later:
“From the slimy, spittle-drenched, sidewalk, they were picking up bits of orange peel, apple skin, and grape stems, and, they were eating them.  The pits of greengage plums they cracked between their teeth for the kernels inside.  They picked up stray bits of bread the size of peas, apple cores so black and dirty one would not take them to be apple cores, and these things these two men took into their mouths, and chewed them, and swallowed them; and this, between six and seven o’clock in the evening of August 20, year of our Lord 1902, in the heart of the greatest, wealthiest, and most powerful empire the world has ever seen.”
It’s worth reminding readers that all that literature was available in English to Bernstein, as it is available nowadays to anyone willing to search for it. That doesn’t mean the situation depicted was exclusive of Britain or of the English-speaking countries. It seems at the time there was a similar literature in German. As my German is not up to scratch, however, what I searched for was only what was partially translated into English. I hope this limitation may be forgiven, given that Preconditions was originally written while Bernstein lived in Britain.

This is what I found. Take for instance the phenomenon of strangers sharing not only the same room, but often the same bed, as seen in the second photo. All those English language publications mention it. Well, these data are from Wilhelmine Germany:

Breslau (1896): How many people
room tenants shared beds with?

bed-mates     tenants     %
        0       3,291  25.0
        1       8,428  64.1
        2       1,305   9.9
        3         104   0.8
        4          26   0.2
Total          13,154 100.0

Quoted from Hans Kurella, "Wohnung und Häuslichkeit" ["Dwelling and Domesticity“], Neue Deutsche Rundschau 10 (1899), pp. 816-19 (Source)

Scenes like this from Berlin's Liegnitzer Strasse (1910) look less depressing, as those sharing the smaller room appear to be members of the same family of three, but they had no internal plumbing or sanitation, exactly as in the English case (unfortunately, I can only link to the photos, as they are copyrighted).

And lack of plumbing and sewage were behind a seemingly biblical proportions epidemics in Hamburg in the early 1890s. By 1890 the population of that city was 323,923. A couple of years later, in 1892, cholera struck and 160,000 inhabitants were affected. More than half died, believe it or not. (That website offers a lot to the interested reader.)


One may understand modern bloviators ignoring that literature: it’s old. It’s beyond whatever it is they actually know. They would need to search for it and, what’s much worse, read it. Their laziness is harder to excuse, but perhaps one should learn to live with that.

It seems a lot harder to understand or forgive that in Bernstein. In his memoirs of exile Bernstein described his “life and work in Zürich”. Read that. He was too busy with life to be able to do much work.


To close this post just a reference to two slightly more recent works. One is Liberal MP L.G. Chiozza Money's Riches and Poverty. Originally published in 1905, its fourth and cheaper edition (1908) is available from the Internet Archive. The other is the 1909 anonymous pamphlet The Case for the Labour Party, with a foreword by J. Keir Hardie, also available from the Internet Archive.

Both contain a wealth of data relevant to assess the Edwardian era.

Image Credits:
[A] Bottle Alley, New York. Circa 1890. Author: Jacob Riis. Source: Wikimedia. Image in the public domain.

[B] Lodgers in a Crowded Bayard Street Tenement--'Five Cents a Spot'. Circa 1890. Author: Jacob Riis. Source: Wikimedia. Image in the public domain.

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