Representation of workers, employees, and civil servants in large and medium-sized enterprises

Representation of workers, employees, and civil servants in large and medium-sized enterprises¹

1. Criticism of capitalism

Readers of my articles will already have realized that employee representation in capitalist and public enterprises in industry, commerce, and finance is a subject particularly close to my heart.

Decades ago, I realized that if workers, employees, and civil servants are ever to be able to take control of production, there must be a core of practically experienced comrades in every country who have gradually trained themselves to become management experts in every branch of industry and commerce.

The sad experiences in Italy with the so-called “occupation of the factories,” which was followed by the fascist reaction as a natural consequence, can, in my opinion, be explained by the fact that the Italian workers were, technically speaking, simply not capable of managing the occupied enterprises.

In my Théorie du capital et du Profit (Volume II, Chap. XXXIX, p. 617), I came to the following conclusion: "As long as the working classes do not succeed in developing these skills, they will certainly remain under the rule of either a special capitalist class or state officials. The difference between the two forms of rule (state or private rule) will not be significant.“

I am raising the main question here before I get to the point of explaining that I am fully aware of all the objections, both from the capitalist side and from the ”old-fashioned" trade unionists and also from certain individualistic anarchists.

Let us first consider the capitalist critique. I believe that the two points of view—the capitalist and the proletarian—can best be characterized by a discussion I had during the World War with a young industrialist (a reserve captain) who was commissioned to compile statistics on all contracts and orders concluded by the French state with munitions factories. The Minister of Munitions, Albert Thomas, had introduced workers' representatives in the munitions factories, and this captain now thought that this “novelty” was simply “nonsense,” “a socialist showpiece.”

The influence of these worker representatives is certainly not great, I replied, but that may be because the so-called representation is actually just a caricature. Those representatives cannot intervene in the production process; they do not have the right to examine the companies' books or to participate in the works council with the same rights as the representatives of the shareholders' meeting; nor can they participate in the preparation of their company's balance sheet, etc.

That would be even better, he said. But what can workers know about the management of an industrial enterprise?

Perhaps not much today, but that can improve. And I gave the captain the same answer I once gave Prof. Werner Sombart from Berlin: "But what do your shareholders know about the technical management of the companies in which they have invested their money? They may not even know where the iron foundry or mine whose shares they own is actually located! Their representatives have to buy technical managers at high market prices. But all the workers, engineers, chemists, etc. can do the same, as long as they cannot themselves provide the necessary operating personnel.

Let's not talk about the future. But what can all the workers in a company know today about its technical and financial management? To what extent could they be useful to the company?

In any case, and absolutely in all matters directly concerning the organization of work, such as the savings to be realized in raw and auxiliary materials, improvement of the division of labor, of machines and tools. There are already, especially in America, clever business leaders who promise bonuses for every invention or technical improvement proposed by workers in their company. Furthermore, workers are better able than others to assess the hygienic conditions in their workplace.

These are all minor issues.

Please, in a modern company, these are not minor matters, but rather very important production factors. However, as far as the management of industrial, commercial, and financial companies is concerned, I not only admit that it will take a whole generation before the masses of workers, employees, and civil servants will have enough experience to provide a significant number of capable managers, but I will even meet you halfway: Let us take the case of a company in one of the least developed industries, a brickworks, for example, with many unskilled workers, women, and young people. Out of a workforce of two or three hundred workers, there may be only two or three talented young men who can read and write and have attended workers' meetings, but who are completely incapable of working with the management in technical and practical matters.

Now it is becoming more and more like real life.

Yes, but if these young men, elected by their colleagues as workers' delegates, are only smart enough to regularly fill out the forms they receive from the union executive committee of their industry, then the greatest evil has already been overcome.

What do you mean?

The central board of the stone and earth industry may include educated technicians who ask questions such as the following:

Where do you get your machines and other production materials? (Specify when purchased and how much depreciated.)

How many stones, bricks, etc. were produced during the last three months and in how much time? (Working hours per day and per week, how many workers? Specialize them.)

What transport equipment does your company have and who are its customers?

But you are crazy, sir.

No, I am not as crazy as you might think, mon Capitaine. Because after just two or three months, it would be possible for our worker representatives to go to the director of their brickworks and say to him: "According to a letter we have received from the workers' council of our industry, our brickworks has the highest transport costs for bricks and tiles in the entire region. Our entire transport system must be modernized without fail . . .

But once again, you are crazy. These are all trade secrets of the industry. The competition . . .

Listen, Captain, trade secrets have been around long enough. All that must come to an end. For too long, production has been a private hunting ground for profiteers. Production concerns us all and is not just your business; we all have an interest in knowing that we are not buying adulterated food or junk goods, that the quality of all goods is impeccable. Production should be like a glass house where everyone can see inside and where everyone is allowed to criticize . . . — I couldn't continue. The captain shouted:

I'm not talking to you anymore. What you're preaching is pure revolution. If things were to turn out that way, we would have nothing left to decide in our own enterprises after twenty years!

It is possible that after twenty years you will have nothing left to command in your own enterprise, but would that be unjust or just? That is precisely the question. Surely human labor cannot always remain a commodity that can be bought like a machine or a ton of steel? . . .

My captain stopped listening. He already had his hand on the door handle. —

2. Criticism of “old-fashioned” trade unionists

I had the opportunity to discuss the benefits and necessity of employee representation in industrial, commercial, and financial enterprises not only with capitalists and representatives of private industry, but also with many old trade unionists, and in both cases I encountered an extremely hostile attitude toward my theses, at least in the form in which I necessarily had to present them.

Shortly after the war, a German Social Democrat came to Paris to explain the achievements of his fellow believers and the “works councils” (law of January 18, 1920) to a select audience of board members of the French reformist trade union federation (C.G.T.). My views on German social democracy were well known, and so I was “invited” to attend and defend my position.

I did so, arguing that the aforementioned German “works councils” satisfied neither the workers nor the employers, and that, from the workers' point of view, this was inevitable. The new legislation allows German workers to participate through their representatives in the drafting of the work regulations to which they are subject, but these representatives do not have the right to interfere in any way in the management of their companies. No right to check the books; no right to participate in the preparation of the balance sheet, etc. And here, too, I came to the conclusion that, all in all, it was only a caricature of real worker participation in production and distribution.

The second speaker in the debate was one of the best-known leaders of the old French trade union movement. To my astonishment, however, he did not discuss the speaker's speech, but instead attacked me, saying that my propaganda for the establishment of factory and workshop delegates for the workers was “perfidious” and served only to bring division into the trade unions. In certain French industries, such as metallurgy, for example, the most unfortunate experiences had been made with these factory delegates, because they assumed the right, for example, to decree or end strikes without seeking the approval of the trade union. The principle of factory and workshop delegates, as Cornelissen understands it, could only be accepted by freely organized workers under the leadership and responsibility of the large trade unions, etc.

In response to this fundamental attack, I replied that the so-called “free” or “modern” large trade unions were absolutely unsuitable to take on the leadership and responsibility for the workers' involvement in the technical management of their companies. In terms of their theory and structure, they are fighting organizations geared toward wage campaigns, strikes, etc. (but even that they are no longer, as a result of their adaptation to the current order; they are increasingly waging their “struggle” on the side of the entrepreneurial class, against the workers); but they are by no means production organizations. You yourself, Comrade X., were not elected secretary of your union headquarters because you possess special technical skills, but because you proved yourself as a leader in strikes, a speaker at public meetings, an editor of the newspaper, etc. But do not forget, Comrade X, that all of us, you and I, have been saying for years that in revolutionary times the workers' fighting organizations must be transformed into production organizations. This transformation can only be achieved through factory and workshop delegates, because the necessary decisions can only be made in the enterprises themselves through technical management.
It is natural that there may be friction between these new workers' organizations and the trade unions in the beginning; but then it will be your job as a union executive not to suppress the new organizations, but to communicate with their representatives and come to a clear and precise definition of the rights and duties of both sides.

Of course, the executive committee member of an old, reformist trade union headquarters and I were unable to convince each other. On many other occasions, too, I have observed that the old trade union leaders, just like the leaders of the social democratic parties, are too deeply entrenched in their everyday habits and professional routines to be able to participate effectively in the gradual development of a workers' organization for the technical management of industrial, commercial, and financial enterprises, as well as public institutions.

The technical management of enterprises must and should therefore be created everywhere by the revolutionary workers' unions.

3. The objections of the individualist anarchists. The concern of the syndicalists

The old trade unionists do not object in principle to the representatives of the workforce being given their rightful place in all large and medium-sized industrial, commercial, financial, and agricultural enterprises. They only demand that this representation be subordinate to the existing workers' organizations, i.e., the trade union executive committees.

But is it possible that there is also fundamental opposition to such worker representation within the workers' circles themselves?

We have encountered such opposition indirectly several times in the discussion, and this has come from the more or less outspoken individualist anarchists.

The first, very general objection I heard was that a measure such as factory and workshop delegates would only be possible by law, and anarchists are opposed to any legal reform.

That can be irrelevant here, I thought. We can strive for the introduction of factory and workshop representatives through what we call “direct action.” If the social democratic trade unionists then come later to implement the legal regulation and generalization of such an attitude, we will not oppose a law, even though it is favorable to the workers, simply because it is a law. We would have to be crazy to do that!

However, this is only a minor objection. I have heard different things from the more outspoken individualists in my propaganda.

Do you think, a young worker said to me, that I want to work to create new bosses for myself tomorrow, and that from our own ranks? If I don't like Krauter or the foreman, or he doesn't like me, I call him a “donkey” and he calls me a “scoundrel”; I am forced to leave or voluntarily pack up my tools and look for work elsewhere. But what would happen if, in the future, I were to encounter co-workers, so-called worker representatives, in administration, co-workers organized in associations, who could make it difficult for me to move from one workshop to another? We have already found new masters in the union secretaries of the larger organizations; but they won't catch me a second time. I want to be free and independent.

When you're twenty-five, like you, I replied, it's easy to talk: the hardest part is over.

But when you are forty-five and have a wife and children, will you still talk like that? Or will you be glad when the foreman threatens to throw you on the pilaster, that you can at least find advice and help from the staff representatives?

They won't help me, but will probably side with the employer. I would only have double masters.

Ultimately, I said, all this means is that you prefer the feudal economy of the capitalist to the destiny of mass rule. (It should also be noted that today—in 1930—the gypsy-like, individualistic craftsman mentality cited above by the author has also become impossible and pointless from a purely economic point of view, namely as a result of unemployment; more than ever, the working class must learn to think practically, organizationally, and positively revolutionary! Ed.)

Yes, I am anti-democratic.

But a communist anarchist cannot be anti-democratic in this sense, because he too strives for the organization of society from the bottom up, instead of, as is now the case, from the top down. The way you talk, only a stubborn individualist can do that, a person who, as long as he is doing well in life, thinks only of himself.

*

Communist anarchists and revolutionary syndicalists do not, of course, raise any fundamental objections to worker representatives in factories and workshops. However, I have heard the fear expressed on several occasions that such representatives could ultimately fall entirely into the hands of the leaders of the old, conservative trade unions: “Let's just look at what happened with the workers' councils in Germany.”

In my opinion, the working masses would only have themselves to blame if a good revolutionary measure such as factory and workshop representation were to fall into the hands of conservative trade unionists. However, I believe that this could only be the case on a provisional and temporary basis.

For decades now, the conservative, social democratic trade unions have been concerned only with wage struggles, and today they exist only to avoid such struggles and to provide support. They are based primarily on professions and do not generally form industrial organizations. If they were to transform themselves into production organizations, they would lose their entire character as conservative organizations.

Production is based not on the profession, but on the factory or workshop, and under today's circumstances, workers from two, five, or ten different professions may be grouped together in the same factory or workshop. Our revolutionary, syndicalist organizations are far better suited to taking over production and its management in the future than the large conservative trade unions, whose support funds alone constitute a powerful obstacle for them.

That is why, relatively speaking, we can be indifferent to the fact that conservative and social democratic professional organizations still outnumber our revolutionary organizations in most countries.

The worse social conditions become and the more the class struggle intensifies, the more the conservative and so-called “free” social democratic unions will lose influence and the more the revolutionary organizations will be pushed to the forefront and gain power. In revolutionary periods, however, the conservative, reformist “health insurance elements” among the workers will no longer be considered at all.

II

When the first stock market panic broke out in New York on October 29, 1929, like a bolt from the blue, at first all those who were accustomed to observing only the surface of social phenomena refused to believe in the profound seriousness of the catastrophe. And American economists and financiers—generally as superficial and self-confident as only Americans can be—gave us their solemn assurance that this was just a normal stock market panic.

For several weeks, the general public was on their side. What! America, the “Republic of Two Oceans,” America, which has a domestic market so vast and self-sufficient that no other country can match it; whose industry is undoubtedly better organized than any other; America, which, behind high tariff walls, can calmly face international competition; — America would face an economic crisis so acute, so profound, that even the great crisis of 1907 to 1909 had not been? At first, this seemed impossible to tens of thousands of people.

And yet many others, alerted by deeper economic studies, had claimed months and years before that there was something unhealthy and a bad omen in the rapid, feverish development of American industries, something from which they predicted a sudden, powerful, and also quite “American” catastrophe.

Their prophecy was based, first of all, on the unscrupulous speculation that had developed in North America, which, although it can only be regarded as a symptom of an unhealthy organization

of the production and distribution system, nevertheless has its significance as such.

The American businessman who has a few million dollars at his disposal is not in the habit of investing all his money in one or two industrial, commercial, or financial enterprises; Instead, he buys five percent of the shares in one company, takes out a mortgage on it, and uses the new money to buy a majority stake in a second factory, trading company, or bank, on which he also takes out a mortgage, in order to use the latter amount to buy a third company, and so on. In this way, a single person or a small group of industrial tycoons “controls”—as the Americans call it—many and even diverse enterprises, all of which are heavily indebted, until the first storm wind blows the house of cards apart.

There is also the very American process of stockwatering (capital investment), which, just like the above-mentioned “chaining” of industries, had already contributed so much to the inevitable “crash” in 1907. When five, ten, or fifty industrial, commercial, or banking enterprises, each worth an average of three million dollars, form a “trust,” they are valued not at fifteen, thirty, or one hundred and fifty million dollars, but much higher, at about twenty, fifty, or two hundred million, and according to this new valuation, they are expected to make a profit. As long as the “boom” lasts, this works well; but when the changed economic situation on the world market or even in the country itself no longer allows the industrial giants to exploit their real or supposed “monopoly” in such a way that the necessary profits can be made, then things change. Many American—as well as many European—trusts and cartels operate with huge executive salaries, bonuses, perks for the presence of members on the board of directors, and other expenditures of money that the trust and cartel leaders pocket personally, without even thinking about profits for the shareholders.

On the stock market, however, all that glitters seems to be gold, and so, for example, before the “crash” in New York, the average price of shares in thirty of the main industrial companies in the United States had risen from 100 (in 1923) to 381. The panic knocked it down to 272 in just a few days (figures taken from The London Times).

The increasingly sophisticated technical organization of most American and many European large companies also has its drawbacks. The United States is the country where industries are “rationalized” more ruthlessly than anywhere else, and it was from America that the various rationalization systems (Fordism, Taylorism, etc.) spread throughout the capitalist world. These systems relate not only to the improvement of machinery, the arrangement of the various production, handling, and transport processes, and the technical management of the plants, but also—and above all—to costly human labor. The consequence of all this, however, has been that unemployment in many older industrial countries, which was already so difficult to combat in the postwar period, has grown like an avalanche. At the time of this report's publication, there are well over twenty million people in the capitalist world who are capable of working but are condemned to idleness against their will, and of this number, at least five to six million are in the United States of America.

For revolutionary syndicalists, this is a warning against welcoming “rationalization” with open arms when it only refers to improvements in machinery and materials, as well as technical management, without at the same time demanding a reduction in working hours or an increase in wages. Where modern rationalization extends to the organization of human labor, revolutionary workers should fight it outright wherever it worsens the exploitation of labor or stifles the human spirit to the point of dullness. In any case, however, a reduction in working hours must outweigh the intensification of work.

If, on the one hand, production is being vigorously intensified everywhere and, on the other hand, this intensification is throwing hundreds of thousands and hundreds of thousands of workers onto the streets, sometimes terribly reducing the purchasing power of the working masses, then a catastrophe, an industrial, commercial, and financial global crash, is inevitable.

The fact that this first took place in America is no more surprising than the fact that the financial crisis preceded the deeper disturbances in the balance of economic life. After all, the stock market is a kind of barometer of the deeper commercial, agricultural, and industrial conditions. The fact that it is currently impossible to limit any acute financial crisis to the stock market alone is evident from the fact that in today's production period there is hardly a single large enterprise in industry, commerce, and transport that does not have to rely on a bank and is dependent on the banks.

Let us now take a look at how things stood in the fall of 1929 in American—and also in many European—industrial, commercial, agricultural, and transport enterprises under the various conditions mentioned above: speculation, rationalization and intensification of production processes, unemployment, etc.

Extreme rationalization and mass production of a wide variety of goods “in series” had pushed the supply of products far beyond demand in many industries. America was proud that there was one car for every eight people in the country, and Mr. Ford felt compelled to advertise the principle that a true American family must own two cars. This looked good on paper, but in reality, despite huge exports abroad, the situation of the automobile industry in America — and, of course, soon also in European countries due to the setback — was desperate. In the film industry and various other industries producing consumer goods, overproduction in the months before the crash was just as critical. But the production of semi-finished products and raw materials was also overloaded. When one reads how, before the panic, the giant American Standard Oil Company, in order to compete with the European Royal Dutch, distributed tens of thousands of petroleum lamps free of charge to the population in various Asian countries, solely to create new markets for itself, one understands that here too, consumption lagged behind production.

The catastrophe broke out, of course, primarily in the finished goods industries, especially luxury goods, and soon spread from America to the main industrial countries of Europe—Germany, England, Belgium, etc. France was spared for longer, and even now the disease is much less pronounced there than in its industrial neighbors.

It is obvious that when a financial crisis breaks out, which soon reveals itself to be based on deeper economic causes, the masses who are affected first begin to economize on goods whose use is not immediately necessary: cars and bicycles, musical instruments, gold and silverware and jewelry, but then also hats and shoes, men's and women's clothing, etc.

By the spring of 1930, however, the semi-finished goods and textile industries were already affected everywhere, until finally—as in every deep economic crisis—the industries producing basic materials and raw materials: iron, steel, rubber, stone, coal, etc., followed suit.

In the summer of 1930, the Berlin-based Institute for Economic Research classified countries experiencing an economic downturn as follows:

1. Beginning decline: Countries showing only isolated signs of decline as a result of the easing of excesses from a previous economic boom.
2. Progressive decline: General declines with a negative trend.
3. Slowing decline: Slowed decline or already stagnation at the level reached.

At that time, the only European countries in the early stages of decline were the Netherlands, Switzerland, and Sweden, and the only overseas countries were Chile and New Zealand.

Apart from France, Denmark, Ireland, and Norway were also hardly affected by the depressive trend of the unfavorable economic situation.

However, the majority of countries in the world were already in the stage of progressive decline, among them above all the European industrialized countries: Great Britain, Belgium, Italy, Austria, and Czechoslovakia. —

The Berlin Institute considered Germany and the United States to be in the final stages of decline, along with the European countries of Poland, Romania, Portugal, and Finland, as well as the South American countries of Brazil, Colombia, Venezuela, and Ecuador.

Of course, such a report on the international economic situation is based on a great deal of detail. Hardly any two industries in the same country are in exactly the same situation, and even now many of the main industries in all capitalist countries are still experiencing a more or less severe economic downturn.

It is likely that the construction industry will once again be the first to emerge from the general depression, as has generally been the case in previous crises that have been studied in detail since the beginning of the 19th century. In any case, however, it must be expected that even in those industries that are already recovering, wherever the low point of the economic downturn has apparently been reached, a kind of convalescence process will follow for several years, a milder depression during which industries will crawl along and rise only slowly until a new period of upswing gradually sets in.

*

Before we can correctly assess the position and duties of the revolutionary trade union movement in the face of economic crises, it is absolutely necessary to answer the question of whether recurring crises can be prevented in the capitalist economic situation. My answer, based on many years of study, is an unqualified no.

I will briefly outline some of the reasons that I have developed in detail in my Théorie du Capital at du Profit, Paris 1926, (Part II, Chapters XXXII, V, and VI):

The deeper causes of modern economic crises and the explanation for their periodicity must be sought in the combined fluctuations of demand and supply of goods and in the successive states of overproduction or underproduction.

Social capital, through its tendency to accumulate, creates a constant need to expand production.

Capital must bear fruit, and under today's capitalist social order, production ultimately has only one goal: the realization of entrepreneurial profit. Now, if today's society devotes all its energy, and especially all its intelligence, to the technical perfection of the production and distribution of goods, civilization is periodically confronted with the serious question that social consumption is unable to consume the growing stream of goods supplied to it by social production.

Ultimately, the conflict between the progressive growth of production in periods of economic boom and the less pronounced development of actual demand arises from the accumulation of the fixed part of total social capital. As long as this accumulation and the growth of production are not subject to social control, as long as production remains a private hunting ground for profit seekers, production will practically always encounter the resistance of an original power, the resistance of a primal force that is stronger than production itself—namely, the real social needs of humanity, which repel all superfluous goods. Let us take an example of what unbridled capitalist production necessarily leads to: A report recently appeared in the international press: the giant shoe factory Thomas Bat'a in Zlin (Czechoslovakia) had decided to increase its production from 100,000 pairs of shoes per day to 200,000 pairs per day and to increase its workforce to 30,000 people. Bat'a believes he can realize his plan by lowering prices, improving the quality of his products, and increasing wages. In 1930, the prices of certain items were already reduced by almost 40 percent. Of course, Bat'a does not ask whether the implementation of his plan might ruin several thousand or tens of thousands of shoemakers and small shoe factories. Nor does he have to ask, under the capitalist social order, whether the national and international markets for footwear (Bat'a's factory exports a lot) can withstand such an expansion of giant companies. For Bat'a is no child and knows better than anyone that the implementation of his plan will force competing shoe factories in other countries to introduce the necessary technical improvements in their operations as well.

We are familiar with the various palliative measures that are used everywhere to prevent economic crises: the export of surplus goods can certainly relieve the pressure on a national market to some extent, but it also has the effect of generalizing the crisis; local, regional, and national authorities can carry out certain public works during times of depression; for their part, workers' associations can send their unemployed members to the colonies or—as in the case of the English trade unions—to the dominions, etc., free of charge.

However, all these measures ultimately only serve to shift the economic evil from one country to another or from one period to another, or to bring about a long-lasting, general depression instead of a short, sudden crisis. In many cases, such as the implementation of public works, such measures also lead to the execution of unproductive work, i.e., to the avoidance of human labor.

From all that has been predicted, it is clear that only strict social control of production can help solve the problem discussed here.

Can this help be brought about by the establishment and further development of cartels and trusts in a wide variety of industries? Here, too, my answer is no.

It has often been remarked that the periodically recurring crises in the first half of the 19th century were more violent, more panic-stricken, but also shorter: the weaker, unviable capitalist enterprises were then swept away as if by a storm wind; the dead wood fell away, but after the hurricane had subsided, the sun of prosperity soon broke through the clouds again. In recent decades, however, the havoc wreaked by economic crises has been less panic-stricken in nature, but the general decline in business and social ills often lasts for years.

Capitalist associations, cartels, and trusts are largely to blame for this gradual transformation of economic crises. It is well known that modern big capitalists insist that, through their associations, they are able to adapt production in their industry to consumption. They believe that they can moderate prosperity in a period of economic boom, but also alleviate misery in a period of industrial decline, by restricting the supply of their goods and reducing rising prices in the former period, and conversely, by stabilizing production as much as possible in the latter period in order to keep prices high.

To a certain extent, all this is true, and over the course of a century, social production has undoubtedly become more regular. We will say little here about the abuses on the part of modern business associations that have occurred in this context, especially when it came to “keeping up” commodity prices in times of depression. During public inquiries into cartels and trusts, especially in Germany and the United States, there were often dramatic scenes between the organized large companies in the coal and steel industries and the manufacturers in the processing industry, when the latter complained about the “ruinous” prices that were being “extorted” from them by the former. “When the cook quarrels with the kitchen maid, you hear where the butter stays,” says a Dutch proverb. That is why such investigations are so instructive.

The leaders of cartels and trusts respond to all such complaints and public accusations by saying that they are only possible because their associations are not yet sufficiently widespread and tightly organized. That is why they also prefer the American trust to the German cartel. Their ideal is the creation of giant associations in a “vertical” direction, extending from raw materials to end products intended for immediate consumption. These organizations are to be further linked between the various spheres of production by close connections. A vision of the future that ultimately promises us a productive, feudal state in which a few thousand industrial barons, ruled by some two hundred financial kings, would dictate the law to us throughout the world.

We will leave aside the question of whether the masses of the population would tolerate such a medieval existence of slavery or serfdom in the long run. Even if such a system could prevent economic crises, it would still be possible for a revolutionary crusade by consumers against the united tyrants of production to engulf them all. The 1918 revolution in Germany swept away 26 dynasties in one fell swoop; internationally, however, we could do much more, economically and politically!

The only question that arises for us here is whether the cartels and trusts, developed to their ultimate abominable consequences, would be able to regulate production in such a way that the successive production cycles of the past—business revival, the beginning of an economic boom, sudden stagnation and business catastrophe, depression, and slow recovery—could be permanently eliminated.

However, this is not the case. Rather, we note that the serious economic crises of the pre-war period, those of 1901 to 1902 and 1907 to 1909, as well as the current crisis, which began in the fall of 1929, prevailed particularly in those countries where — as in the United States and Germany — the most powerful cartels and trusts existed, and that not only did the associated big capitalists prove powerless to stem the tide, but that the development of cartels and trusts actually exacerbated the general malaise.

How can this phenomenon be explained? Let us look at the means available to cartels and trusts to restrict production in times of general business stagnation. Such a restriction is easy to implement on paper, but technically speaking, the expansion or restriction of production depends on the amount of working capital and the speed of its circulation. However, it is often absolutely impossible to withdraw capital once it has been thrown into production, or to slow down the production process, which is constantly accelerating thanks to technology and improved means of transport.

What is the point of constantly improving production if one is ultimately forced to shut down the blast furnaces and leave the modern machines, which are already becoming obsolete so quickly under modern competition, unused?
Nor should we forget that even the most powerful trusts, such as the United States Steel Corporation or the German-American Electricity Trust, have their independent competitors, their outsiders, who are always ready to continue the work of a trust and steal some of its customers away from its powerful competitor if the trust were to restrict its production too much.

Trusts and cartels are not there to serve social interests and prevent crises, but above all to enable entrepreneurs to make a profit.

And finally: what does it mean to restrict production? It means closing down the less efficient and older factories and scrapping inferior machinery, or even reducing working hours. In any case, however, this increases unemployment or reduces the total wages of the working population. Restricting production therefore always results in a reduction in the purchasing power of the working population, and this at a time when demand has already begun to decline.

The inevitable setback in one industry has an impact on many other industries. If the metal industry starts leaving large projects unfinished and halting the construction of new plants, it is not only metalworkers who suffer, but also workers in the construction industry, brickworks, cement factories, sawmills, etc.

Let us now ask ourselves, conversely, what the situation is like in a period of rising production. Let us assume that this period is particularly influenced by a general demand for railway equipment in new and older countries. Blast furnaces and iron foundries then begin to supply large quantities of material for railway cars and rails, and the construction industry takes care of the construction of roads and station buildings. But how could the united iron barons and construction entrepreneurs hinder industrial growth when railway materials and buildings are needed everywhere? It can never happen that social demand manifests itself in leaps and bounds, or that after a boom, demand is temporarily saturated because new facilities require little maintenance work for years?

Internationally, the question is even more complicated: if the associated large entrepreneurs in one country refused to carry out the initially necessary work during a period of economic boom, other entrepreneurs, whether in their own country or abroad, would always be ready to take advantage of the opportunity and try to conquer a new market. From a technical and financial point of view, it must generally be considered absurd if, after many years of stagnation or decline in business, a period of economic boom finally dawns and then production is curtailed, factories are closed, and workers are laid off. Even cartels and trusts cannot do this. In such periods, the motto is often: either deliver the required goods quickly, within a certain time, or lose the opportunity to deliver them altogether.

In order for production and consumption to balance each other out on a regular basis, production must be directly adapted to consumption, and both must be regulated at the same time.

Now the question arises as to whether state capitalism or state socialism, as it is often called, could intervene here as a solution. This question has become all the more important since, firstly, more and more industries and businesses in all modern countries are being attracted by the state and, secondly, an international political party—social democracy—is now striving for the practical realization of this state capitalism, as in Russia.
Social democrats and state communists (Bolsheviks) find much support for this endeavor even in conservative circles, wherever small manufacturers oppressed by capitalist associations call for state aid, or where official economists and magistrates prefer the state monopoly to the monopolies of big capitalists.

But even today's state is powerless to permanently reconcile production and consumption. Compared to private capitalists, it certainly has the advantage of being able to offset losses in one area of production with profits in others. On the other hand, however, it is notoriously a poor economist, and in this respect it lags behind private entrepreneurs.

Certainly, the gradual democratization of the state could give this body new advantages and increasingly make the general welfare the goal of production and consumption. The general study of the economic situation, already begun statistically—in Germany, for example—could also serve to provide better guidance for production. Because of these advantages, state monopolies will undoubtedly continue to have a great future in the course of the 20th century.

Of course, this only applies to certain industries, such as railways, postal services, telegraphy, etc. In general, the revolutionary syndicalist movement opposes state monopolies just as much as private monopolies. Even in industries that are directly dependent on monopolization by the state, we can hope that, after the period of state monopolies, the time will come for the direct organization of labor by special-purpose associations and trade unions and by the public organized in cooperatives.²

Under the current economic system, the state, just like private entrepreneurs, must reckon with capitalist competition, including international competition. It must respect the private property of citizens, obtain the necessary funds through loans if necessary, have the work carried out on a wage basis, and tolerate the accumulation of ground rent in the hands of individuals, etc. Even if the state replaces private entrepreneurs in a branch of production, the foundations of the current economic system—private property and the wage system—will remain in place. Under these circumstances, it will never be able to overcome the periodic fluctuations in production and consumption. For it, too, the direct adjustment of production to consumption remains a pipe dream, and it cannot escape the looming threat of unemployment.

Production and consumption are primal economic forces that are far more deeply rooted in economic life than the state itself.

Today's state cannot free itself from competition for production aimed at entrepreneurial profit, at the risk of not being able to support industries that are not suitable for state exploitation. If, for example, the railways are a state monopoly, the state must supply railway cars, lay new tracks, etc., if railway material is in demand from all sides during an economic boom. But if demand is saturated and an economic downturn occurs, then the state must also restrict production, lay off workers, etc. How would the various political parties criticize state exploitation if the state, neglecting its exploitation duties, were to operate at a loss of ten or twenty percent in a given year?

Finally, the organs through which the state could communicate with the masses of consumers in each branch have not even been created, so that even the most necessary means of learning about general consumption and its expected movement are lacking to the large producer—the state.

This is another reason why the state today cannot adapt production to consumption, and so it too is defenseless against the deeper movements of economic life.

The modern state is too superficial an observer; it is too strongly politically structured and too little economically oriented.

Decades ago, socialist circles were already saying that the old social order would collapse under the weight of unemployment, and the events of recent years have only too clearly demonstrated how close that collapse is.

All of this makes it obvious what stance the revolutionary trade union movement should take toward modern economic crises.

We hardly need to dwell on the necessity for workers to defend their wages first and foremost in times of economic downturn and crisis. But if one of these modern economic crises is really to become the “death crisis” of capitalist rule, then it is particularly the task of revolutionary syndicalists to prepare the masses of the working population to take over economic power.

Precisely because social democracy everywhere has lost its way in the swamp of state socialism in recent decades, advocating, like today's feudal lords in industry, trade, and transportation, it can only be the task of revolutionary syndicalists and libertarian communists to implement, as far as possible, a social order and a system of production and distribution that is built from the bottom up, thereby countering the strict centralization of employers' associations and the state with federative alliances of businesses.

Therefore, the main emphasis of our revolutionary propaganda must be placed on the introduction of factory, workshop, and farmer delegates (councils) of the workers. Even if this propaganda remains mainly theoretical for the time being, the realization of this worker representation in capitalist and state-owned enterprises can already be linked to other demands during periods of strikes, so that it gradually becomes the main demand of the working masses.

Even under the current social order, workers can demand the right to inspect the books of the companies where they work, possibly send their representatives to the management and supervisory boards, and participate in the preparation of their company's balance sheet in such a way that no balance sheet may be prepared in the future without the approval of the staff.

It is possible that, under the influence of the gradual democratization of the state mentioned above, state and municipal enterprises and administrative services will here and there take the lead over capitalist enterprises and serve, for example, to show what socialism and communism actually are and what the administration of industry, trade, and transport, as well as public enterprises, looks like when it is run from the bottom up. In any case, syndicalist propaganda must manifest itself in all directions and intervene wherever the realization of our demands is even remotely possible.

There is no need to discuss here the future local, regional, national, and international organization of workers' and civil servants' representatives. This must be developed gradually, in accordance with the most diverse circumstances.

"Exploitation and administration of this collective property for the benefit of the whole, not by the state—for we repeat once again that we firmly reject nationalization—but by an independent body composed in such a way that all overall interests, as well as all the skills necessary for the smooth running and development of functions, are represented in it.

This independent body will be governed throughout the country by a council composed of representatives of the whole and of the production and consumption organizations."