Tuesday, January 21, 2014

Was A World Saved By Capitalism Or Social Democracy?

"The increase of social wealth is not accompanied by a diminishing number of capitalist magnates, but by an increasing number of capitalists of all degrees."

Eduard Bernstein (1850 - 1932)

We should define a word - magnate.  

What does Dr. Bernstein mean by magnate?

It is a word derived from the Latin word magnus, which means "great man."  In our lexicon, magnate is used in the business context as it refers to a wealthy and influential person.

Notice when he lived.  He saw the rise of the Industrial Revolution.  He witnessed how capitalist societies produced men of who took great risks, built entire industries from scratch, and created wealth never before known in world history.  Wealth not only for themselves, mind you, but their nation and their nation's people.

He saw how the the wealth in capitalist societies did in fact make its way to all strata of society, raising all boats and improving the standards of living of those living in those societies.

Dr. Bernstein saw the great goodwill and philanthropy of the richest, and how much influence they had with their generosity toward the improvements they deemed worthy - improvements in education, music, museums, medicine, parks and science.


This economic benevolence flew in the face of his social democratic beliefs.  He began his economic thinking believing in the fragility of capitalism.  He saw its downs, beginning with the economic crisis of 1873 in Europe, which continued into the 1890s, as consistent with his beliefs that capitalism did not have the strength of the social democratic movement, which would ultimately lead the reformist labor movement toward new heights in economic prosperity and socialist ideals.  That, of course, never happened.

At one point he befriended Friedrich Engels, and began advocating the gradual development of socialism.  He saw the bourgeoisie as oppressive parasites, using the ignorant masses as necessary cogs in their machinery of business, abusing them and grinding them down as they, THEY, the masses of the proletariat, pushed the bourgeoisie up in life!

Living in London, however, he saw how that society operated.  He had seen, and read about what was happening in the United States, and how productive industry there expanded fast and thrived in a free enterprise setting.  He returned to Germany no longer believing that socialism would grow as the product of a revolt against the capitalist middle class.

Were the capitalists ruthless at times?  Yes, certainly, within the contexts of their purview.  They were trying to build industries, not mere businesses, but industries.  And they grew incredibly rich.  But people from all over the world flocked to them to work.  Conditions weren't good at times, but they worked, and were able to move, in many cases, from that work to better work.  People continued to flock, unabated.  And, where they demonstrated intellect and capacity, they moved up within their industries and businesses.  Some even started businesses of their own!

He saw and documented how the west, the capitalist societies, grew incredibly rich as well.  He saw their growth and riches as organic, and growing as a whole.

Toward the end of his life he thought he witnessed the popularity and reforms of social democracy.  Then he was unable to dissuade his country from its attraction to the Italian Fascists.  And later his social democratic movement morphed and became the German move toward National Socialism.  He was horrified by the bloody Nazis and their thinking.  His society was not free, it was CONTROLLED.  His beloved social democracy broken, it was in this time frame when he came out with the quote above.

Six weeks after his death his country was to give way to the incredible evil of a man named Hitler. 

Capitalism, free enterprise, then, had to turn to its ability to produce and create and organize, and all of its wealth and energy was then directed toward the defeat of a world-wide threat that was to combine into an allied/political axis on both sides of the world.  It was a sinister axis that wanted to combine to control EVERYBODY in the world in ways that were not social or democratic, as Bernstein desired.

Capitalism, free enterprise, was called on to save the world from crushing, brutal economic and political CONTROL.

And it did.

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