Socialism & Society By Ramsay MacDonald (1)

Labour History Reprints

Extract from Socialism & Society By Ramsay MacDonald

Labour & Trade Union Review will henceforth carry as a regular feature a reprint of some piece of literature from the history of the Labour movement. Until the 1960s there was in the Labour movement some general sense of where it had come from, what the main strategic decisions were that had cause it to develop as it did, and what the arguments were that preceded those decisions. But during the past twenty years the Labour mind has been wiped clean of all historical sense. This was done in the first instance by the rise to dominance of leftist doctrine. This provoked and facilitated the rise in the Tory Party of a counter-dogmatism, which was equally simplistic but more vigorous. After the third successive Tory victory the distinctive of Labour collapsed utterly and there was wholesale adaptation to Thatcherism by the leftist demagogues of the period around 1980.

The historical literature of politics is a means of political thought. We are therefore putting some of the labour literature of Britain back into circulation, without regard to the particular tendency from which it emerged, just to show that before the era of Foot, Thatcher and Kinnock there was mental content in Labour politics.

We begin with a chapter from Ramsay MacDonald’s Socialism and Society, published by the Independent Labour Party in 1905:


What, then, are the forces in present-day Society which Socialists should regard as making for Socialism?

The Marxian answer is that a war of classes is going on which one’s eyes can see and one’s ears hear. On the one hand is the exploiter, the person who accumulates surplus value, on the other, the exploited, the person who sells his labour power for a price which tends to sink to a bare subsistence level. The opposition between those two classes grows in intensity. It will continue to grow until the workers become class conscious, seize political power, and establish the Socialist state. In the words of the Communist Manifesto: “The proletariat will use its political supremacy to wrest by degrees all capital from the bourgeoisie, to centralise all instruments of production in the hands of the state, i.e.,of the proletariat organised as the ruling class.”

Such a view is both inaccurate as to facts and misleading as a guide for action.

In the first place, it is not true that there are only two great economic classes in the community. Marx was so anxious to separate himself from “bourgeoisie” economists that he determined on no account to recognise the conflicting interests of the receivers of rent and of profits. Some of his followers, without allowing for the admission in their systems, concede the antagonism, as for instance when Mr Hyndman describes the trinity of labourers, farmers and landlords as being “as compact a little set of antagonisms as any in our society,” and later on when he states that “the only results of the confiscation of competitive rents or royalties by the State … would … be the strengthening of the hands of the capitalist class.” This is true only on condition that there is an economic antagonism between landlords and capitalists as well as between capitalists and workmen, and that the “class war” is carried on not between two but three armies, between any two of which there may be treaties of peace and offensive alliances.

But any idea which assumes that the interests of the proletariat are so simply opposed to those of the bourgeoisie as to make the proletariat feel a oneness of economic interest is purely formal and artificial. It is a unification arrived at only by overlooking many differences and oppositions, which have been growing for some time rather than diminishing. For although, in the earlier years of the Factory System, the line between workman and employer was not clearly drawn, and men could reasonably hope that by saving and by procuring credit they could become masters, to-day there is still a goodly number of workmen who cross the line and become employers or employing managers, whilst the great thrift movements, the Friendly Societies, the Building Societies, the Co-operative Societies, connect working class interests to the existing state of things. In addition, there are considerable classes of workers in the community whose immediate interests are bound up with the present distribution of wealth, and who, obedient to class interests, would range themselves on the side of the status quo.

Of course it may be said that all these sections, in refusing to help on the change towards Socialism, are making a mistake from the point of view of their own interests, and that if they were properly enlightened they would see that they belong to an exploited class, one and indivisible. That may be true, but a mode of action which is ineffective until men are “fully enlightened” is a chimera. Moreover, it is equally true that if the capitalist were fully enlightened, he too would embrace Socialism on account of the great blessings which it would bring to him. Thus all that the class war, when used to indicate the opposing armies whose combat is to usher in the reign of Socialism, means, is that an enlightened proletariat, not blinded by its immediate interests but guided by its permanent ones, will be Socialist. But so also will a similarly enlightened bourgeoisie; hence the value of the class war as an uncompromising statement of hard economic fact becomes a mere semblance. It is nothing but a grandiloquent and aggressive figure of speech.

It is an indisputable fact that the wage earner and the wage payer have interests which are antagonistic, and in the nature of things cannot be reconciled. The supposed identity of interest between capital and labour, which is assumed to be proved by the discovery that unless capital pays high wages it will not be able to command efficient labour, is no identity ofinterestat all. The efficient labour which high wages produce is still bought and sold by capital, is still employed or rejected as it suits the convenience of capital, is still underpaid to enable capital to accumulate high dividends, is still treated not as something possessing rights of its own but as something which ministers to the interests of others. This opposition may be expressed as a class war. But it is only one of the many oppositions tending to modify social organisation, and it is by no means the most active or most certain in improving that organisation.

There is, for instance, the opposition between consumer and producer. This opposition is peculiarly complex, because a man is a producer one hour and a consumer the next. The most valid objection that can be taken to Trade Unionism (if it can be substantiated) is that it sacrifices the interests of the consumer to those of the producer. This has been illustrated in agreements between capitalists themselves and also between capital and labour. Combinations of capital to raise prices, or to monopolise the market, and agreements with workpeople to share in the benefits of artificially high prices on condition that they support the pool by refusing to work for any firm outside it, are examples of this rivalry between the consumer and the producer. Sometimes the rivalry takes the form of a war between capitalists, as when the German producers of pig iron damage the interests of the German steel manufacturers by dumping the rawer material in England. In other words, trade rivalry is as real and more forceful as an impulse of the day than class rivalry. Sometimes capital and labour in combination fight against a class consuming certain commodities, as in the building trades where the increased price of labour has influenced costs of building and consequently of housing accommodation. The conflict of economic interest between the consumer demanding cheapness and the producer desiring to sell the use of his labour or the use of his capital at the highest rates, is also an economic conflict which must not be overlooked or smoothed away in a formal generalisation. And it must be emphasised that the opposition is not one whit more unreal because the same man may belong at the same time to both the opposing classes.

Certain modern developments are tending to break up into well-defined economic sections this “uniform” proletariat class. Of these the Co-operative and Building Societies are the most important. In the first of those movements, the wage earner becomes an employer – or, as it presents itself more familiarly to him – he is a receiver of dividends which, in part, are profits from other people’s labour. All day, at his work in the factory or mine, he thinks of himself as the victim of the exploiter, as the loyal trade unionist, as the wage earner. But he comes home in the evening, washes himself, puts a better coat on his back, goes to his Co-operative Committee and immediately undergoes a fundamental change. Psychologically, he is a different man. He is no longer a wage earner and a trade unionist, but a capitalist employer, who has been known to join in the anathema against labour combinations.

This does not mean that wealth is being better distributed, but rather that the psychological basis of class is being undermined. The boast of a control of “millions of money” which is made at every Co-operative congress, and the threat that capital and trade will leave the Stores if this or that regenerative policy is decided upon, inculcates the capitalist frame of mind in the worker, and though his sovereigns may be few, it is not the actual possession of riches which determines with what class a man associates himself. Imitation, as well as identity of economic interest, determines for practical purposes the class to which a man belongs. When a Primrose League dame shakes hands with an elector on polling day, she may or may not leave behind the shake of a £5 note. But she certainly removes for the time being the psychological props upon which class feeling has been resting. Down it tumbles, and the elector goes and votes for his “class enemy”. Patronage and charity have the same effect

But the point is best illustrated by certain recent developments of co-partnership, which as an industrial theory is admirable, but as a sociological influence may be most reprehensible. The South Metropolitan Gas Company a few years ago determined to put an end to the organisation of its men, and considered expedients for doing so. It decided to try co-partnership, and it succeeded. It bound its men to itself in precisely the same way as the proverbial man bound his donkey to his will by hanging a carrot in front of the animal’s nose. Hoping ever to reach the carrot, the donkey romped home, and the driver’s end was cheaply accomplished.

It is interesting to work out the financial equivalent of the class solidarity of the proletariat, and this gas company’s experiment throws some light on the question. The co-partnership scheme has been in operation for fourteen years, 4,000 men are affected, and their total holdings are £170,000. Hence, in fourteen years under the scheme a man can save a little over £40, or about £3 per annum; and as his active working life does not average thirty years, this scheme allows the average man to save altogether something under £100. For this the men have given up their right to combine and their freedom of action, and have consented to place themselves absolutely at the disposal of the employing company. The result has been that, whilst nominally they are receiving specially good treatment, in reality specially good profits are being made out of them.

By the second of those organisations – Building Societies – the interests of the working classes become identified with those of the landowning classes, and are opposed to every attempt of the community to enter into possession of the value which it imparts to land.

There is also another aspect to this. The interests injured by our present social state are not merely those of the wage-earners. Considerable classes of people depend on the wage-earners, more particularly the small shopkeeper. His social grade sympathy, however, unites the small shopkeeper with the petite bourgeoisie and divorces him from his economic supporters – the working class – and thus rebukes the theorists who see in social motive little more than economic motive. Then there are those whose comfort and success under existing conditions are but precarious – the bankrupts, the struggling business people, those engaged in industries which are passing under the control of trusts. All those are in economic positions which expose them to the allurement of the Socialist ideal. But they are possessed by a pathetic desire to attach themselves to the classes which rest in economic calm and bask in a blaze of social sunshine above the tempests and shadows in which the lower strata live, and from the depths to which they sink they cast an adoring eye upon the villas of suburbia, and in the midst of the desert of their ruin they bow the knee to whatever bears the approving stamp of respectability.

At this point we are able to strike at a vital defect in the “class war” conception of progress. When we appeal to class interests what do we do in reality? A man’s class interests surely appear to him to be only his personal interests, – not his interests as a member of the wage earning class, not his interests as a citizen, not his interests as a member of a community, but his individual interests from day to day. There is no principle of social reconstruction in this feeling. There is the motive of a scramble or of class defence and preservation, the motive to secure big wages, short hours and favourable conditions of work. But that is all. The tug of the class war is across, not upwards; there is no constructive value in a class war.


This article appeared in March 1993, in Issue 34 of Labour and Trade Union Review, now Labour Affairs.  You can find more from the era at and