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Lancashire operatives to abject poverty. Capital knows no national lines. It is essentially international. The migration of masses of laborers from one country to another in response to the demands of industry, the spread of education and increasing ease of international communication have resulted in a highly developed sense of international solidarity of class interest. National lines which once served to extend the economic unit from town to nation, now impede further growth, and patriotism, which was once a broadening sentiment tending to replace excessive loyalty to the town by a larger loyalty to the nation, has in its turn become, in its extreme forms, a hindrance to further development and a menace to the peace of the world.


1. Economic history may be divided into stages on the basis of the increasing control by man over nature.

2. In the first stage men live by hunting and fishing; the second is characterized by the domestication of animals and the introduction of slavery; in the third stage agriculture is developed; the fourth is characterized by handicraft industry and the fifth stage begins with the development of power machinery and the factory system.

3. These stages have differed materially in different parts of the world and their form has been modified by geographical and climatic conditions.

4. A new method of gaining a livelihood does not usually displace an older form, but subordinates it, thus adding to the complexity of economic life.

5. Economic history is also classified on the basis of the progressive enlargement of the economic unit from the household through the town and nation to a world economy.


1. What are the characteristic features of the stage of direct appropriation? Of the pastoral stage? Of the agricultural stage?

2. Describe the manorial system. In which stage does it belong? 3. Explain the organization and functions of the craft guild.

4. What was the domestic system of industry?

5. What is meant by the "Industrial Revolution"?

6. Name the chief inventions which brought about the industrial revolution.

7. Compare the industrial stage with the handicraft stage.

8. Characterize the household economy, the town economy, the national economy.

9. What facts lead us to expect the realization of a world economy?


Buecher, C., Industrial Evolution.

Coman, Katherine, The Industrial History of the United States.
Ely, R. T., Studies in the Evolution of Industrial Society.

Hobson, J. A., The Evolution of Modern Capitalism.
Morgan, L. H., Ancient Society, Part I, Chap. II and III.

Spencer, Herbert, Principles of Sociology, Vol. III, Part VIII.
Toynbee, A., The Industrial Revolution, Chap. IV.



The theory stated: The class struggle theory is a part of the economic interpretation of history. Ever since the dissolution of primitive tribal society, the modes of economic production and exchange have inevitably grouped men into economic classes. In his Introduction to the Communist Manifesto Frederick Engels thus summarizes the theory:

"In every historical epoch, the prevailing mode of economic production and exchange, and the social organization necessarily following from it, form the basis upon which is built up, and from which alone can be explained, the political and intellectual history of that epoch; and, consequently the whole history of mankind (since the dissolution of primitive society, holding land in common ownership) has been a history of class struggles, contests between exploiting and exploited, ruling and oppressed classes; that the history of these class struggles forms a series of evolution in which, nowadays, a stage has been reached where the exploited and oppressed class—the proletariat-cannot attain its emancipation from the sway of the exploiting and ruling class-the bourgeoisie without at the same time, and once and for all, emancipating society at large from all exploitation, oppression, class distinctions, and class struggles."

Analysis of the statement: In this statement there are several important propositions. First, that class divisions and class struggles arise out of the economic life of society. Second, that since the dissolution of primitive society, which was based upon communism, mankind has been divided into economic classes, and that all its history has been a history of struggles between these classes, ruling and ruled forever warring against each other. Third, it is implied rather than stated that the different epochs in human

history have been characterized by the interests of the ruling classes of these epochs. Fourth, that a state has now been reached in the evolution of society in which the struggle assumes the form of a contest between the proletariat and the capitalist class. Fifth, that the proletariat by emancipating itself will destroy all the conditions of class rule, and in doing so will emancipate all society from the evils attendant upon class struggles.

Opposition to the theory: No other phase of the Socialist philosophy has attracted so much criticism as this doctrine of the essential antagonism of social classes. The criticism has taken two distinct forms-that of denying the existence of social classes, and that of accusing the Socialists of fomenting class hatred.

That there are no class distinctions in America has been a part of the national tradition. The absence of legalized caste and of all titles of nobility, and the numerous examples of self-made men-the rail-splitter who became President, and the millionaires who as poor boys sold newspapers on the streets-lend support to the tradition. There is no formal legal barrier separating the classes, and the nouveau riche is still a familiar type. This form of criticism is based upon the false assumption that a social class must necessarily be a crystallized social group, the membership of which is based upon inheritance. But though we have no hereditary, titular ruling class, the division of the population into classes is very obvious.

The second form of criticism directed against the theory tacitly admits the existence of social classes, but denies that they are based upon antagonistic interests which are irreconcilable. It asserts that the major interests of the two classes are identical, and ascribes all industrial conflicts to "unfortunate misunderstandings between capital and labor," or to the work of "dangerous agitators." It accuses the

Socialists of inciting the workers to violent assaults upon the industrial order, from which assaults the workers themselves must suffer equally with their employers.

This criticism, it may be admitted, is generally honest and sincere. It is based upon an entire misconception of the whole theory, however. It assumes that the Socialists are engaged in creating a class struggle, instead of which they

are simply directing attention to the existence of a class struggle resulting from the conditions of social evolution. The class struggle is, from the Socialist point of view, simply a law of social development, for which the Socialist is as little responsible as Newton was for the law of gravitation. There were class struggles thousands of years before there was a Socialist movement.

Definition of the word "class": It will help us to avoid much confusion and misunderstanding of the theory if we start with a clear conception of the meaning of the word "class." What is an economic class? In order that we may intelligently discuss any theory based upon the existence of economic classes we must first of all be able to answer that question.

In the first place, the term obviously refers to a grouping of individuals based upon economic relation and status. It does not refer to the grouping which results from a selective process based upon the choice of the individuals because they are congenial to each other, or because they hold certain ideas in common. Such a grouping, however large it might be, would not be an economic class. It is not enough to say that the grouping must be based upon economic relation and status, however. All the persons connected with the steel industry, for instance, from the multi-millionaire head of a corporation to the poorest paid laborer, might be regarded as a class, because of that economic relation and status, that is, because they were all engaged in a distinct branch of economic activity, regardless of the fact that the multimillionaire on top and the laborer at the bottom might well be said to live in different worlds.

The income basis: Many writers have taken income as the most satisfactory basis for the classification of society into economic classes. Mr. W. H. Mallock, for example, in his Classes and Masses, makes relative income the test of class membership, and arbitrarily divides English society into classes accordingly. By this method a skilled artisan earning two pounds a week and a feeble-minded pensioner of a rich relative living upon two pounds a week are regarded as belonging to the same "class," despite the fact that the artisan has never known the luxury of a week's rest, and that the pensioner has never done a day's work. The income

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