Class 
 Book. 
 
 COPYRIGHT DEPOSIT 
 
THE 
 
 ECONOMIC INTERPRETATION 
 OF HISTORY 
 
 BY 
 
 EDWIN R. A. SELIGMAN 
 
 PROFESSOR OF POLITICAL ECONOMY AND FINANCE 
 
 COLUMBIA UNIVERSITY, NEW YORK 
 
 PRESIDENT OF THE AMERICAN ECONOMIC ASSOCIATION 
 
 CORRESPONDING MEMBER OF THE RUSSIAN 
 
 IMPERIAL ACADEMY OF SCIENCE 
 
 ETC., ETC. 
 
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 THE COLUMBIA UNIVERSITY PRESS 
 THE MACMILLAN COMPANY, Agents 
 
 LONDON: MACMILLAN & CO., LTD. 
 I902 
 
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(oirf 
 
 PREFATORY NOTE 
 
 The present work is substantially a reproduction, 
 with some alterations, additions and rearrangements, 
 of the articles that appeared in Volumes XVI and 
 XVII of the Political Science Quarterly. The re- 
 quests for reprints were so numerous that it seemed * 
 best to meet the demand by giving to the essays a 
 more permanent form. May the treatment of the 
 subject in the following pages lead to the fuller 
 discussion which so important a topic deserves at 
 the hands of economists, historians and philosophers 
 alike. 
 
 Columbia University. 
 New York, May, 1902. 
 
CONTENTS 
 
 INTRODUCTION 
 
 PAGE 
 
 Statement of the Thesis i 
 
 PART I 
 
 HISTORY OF THE THEORY OF ECONOMIC 
 INTERPRE TA TION 
 
 CHAPTER I 
 The Early Philosophy of History 7 
 
 The eighteenth century — Lessing, Herder, Ferguson, Kant 
 — The idealistic, the religious, the political interpretation — 
 The physical interpretation — Vico, Montesquieu, Buckle. 
 
 CHAPTER II 
 Philosophical Antecedents of the Theory . . .16 
 
 Hegel — The dialectical method and the system — The 
 Young-Hegelians — Feuerbach, Griin and Hess. 
 
 CHAPTER III 
 Genesis and Development of the Theory .... 25 
 
 Karl Marx as a political reformer — The Rheinische Zei- 
 tung — The Deutsch-Franzosische Jahrbucher — Marx and 
 Ruge — Engels — The Holy Family — Proudhon — The 
 Misery of Philosophy — Marx as an economist — The Mani- 
 festo of the Communist Party — The American journals — 
 The Criticism of Political Economy — Capital, 
 vii 
 
viii CONTENTS 
 
 CHAPTER IV 
 
 PAGE 
 
 The Originality of the Theory 50 
 
 The seventeenth century — Harrington — The eighteenth 
 century — Dalrymple, Moser, Gamier — The nineteenth cen- 
 tury — The French socialists — Fourier, St. Simon, Proudhon 
 and Blanc — The Germans — Stein, Rodbertus, Lassalle. 
 
 CHAPTER V 
 The Elaboration of the Theory 57 
 
 Technique in social life — Economic and physical factors 
 — Physical and psychical actions and reactions. 
 
 CHAPTER VI 
 Recent Applications of the Theory 68 
 
 Marx — Morgan — Engels — Kovalevsky — Grosse — 
 Hildebrand — Cunow — Nieboer — Loria — Ciccotti — 
 Francotte — Pohlmann — Des Marez — Lamprecht. 
 
 PART II 
 
 CRITICISM OF THE THEORY OF ECONOMIC 
 INTERPRE TA TION 
 
 CHAPTER I 
 Freedom and Necessity 89 
 
 The doctrine of determinism — The theory of social environ- 
 ment — The great man theory — Moral fatalism. 
 
 CHAPTER II 
 Historical Law and Socialism 
 
 What is a scientific law ? — The laws of social science — 
 Historical laws — Econoinic interpretation independent of 
 socialism — The general theory and its special applications. 
 
CONTENTS ix 
 
 CHAPTER III 
 
 PAGE 
 
 The Spiritual Factors in History . . . . .112 
 Ethics as a social product — Sin, crime and tort — Indi- 
 vidual and social morality — The categorical imperative — 
 Idealism and materialism — The relation of moral to eco- 
 nomic forces. 
 
 CHAPTER IV 
 
 Exaggerations of the Theory 135 
 
 Loria — Economics and religion — Economics and phi- 
 losophy — Other exaggerations — Patten and Adams ■ — Dis- 
 avowal by Engels. 
 
 CHAPTER V 
 
 Truth or Falsity of the Theory i4( 
 
 The facts of mentality — Economic life as antecedent to 
 the mental life — Social phenomena as a reflex of economic 
 phenomena — Economic interpretation in its proper formu- 
 lation. 
 
 CHAPTER VI 
 
 Final Estimate of the Theory i5< 
 
 The monistic explanation untenable — The importance of 
 economic interpretation to economics and history alike — 
 The historical school in economics — The economic school 
 in history — Conclusion. 
 
INTRODUCTION 
 
 STATEMENT OF THE THESIS 
 
 To the student of the social sciences it is 
 interesting to observe the process by which, in 
 one respect at least, we are drifting back to the 
 position of bygone ages. Although Aristotle 
 pointed out the essential interrelation of poli- 
 tics, ethics and economics, modern thought has 
 successfully vindicated the claims of these disci- 
 plines, as well as of others, such as jurispru- 
 dence and the various divisions of public law, 
 to be considered separate sciences. For a long 
 time, however, to the common detriment of all, 
 the independence of each was so emphasized 
 and exaggerated as to create the serious danger 
 of forgetting that they are only constituent 
 parts of a larger whole. The tendency of 
 recent thought has been to accentuate the rela- 
 tions rather than the differences, and to explain 
 the social institutions which form the bases of 
 the separate sciences in the light rather of a 
 synthesis than of an analysis. This method 
 
2 ECONOMIC INTERPRETATION 
 
 has been applied to the record of the past, as 
 well as to the facts of the present; the con- 
 ception of history has been broadened until 
 it is now well recognized that political history- 
 is only one phase of that wider activity which 
 includes all the phenomena of social life. If 
 the term " politics " is used in the common but 
 narrow sense of constitutional and diplomatic 
 relations, then to repeat the familiar dictum, 
 " History is past politics," is to utter a half- 
 truth, in lamentable disregard of these newer 
 ideas. 
 
 While, however, it is now conceded that the 
 history of mankind is the history of man in 
 society, and therefore social history in its 
 broadest sense, the question has arisen as to 
 the fundamental causes of this social develop- 
 ment — the reason of these great changes in 
 human thought and human life which form the 
 conditions of progress. No more profound and 
 far-reaching question can occupy our attention ; 
 for upon the correct answer depends our whole 
 attitude toward life itself. It is the supreme 
 problem not only to the scientist, but to the 
 practical man as well. Of this problem one 
 solution has been offered which during the past 
 few decades has been engaging the lively atten- 
 
INTRODUCTION 3 
 
 tion of thinkers not alone in Germany, where 
 the theory originated, but in Italy, Russia and, 
 to some extent, in England and France. The 
 echoes of the controversy have scarcely reached 
 our shores ; but a movement of thought at once 
 so bold and so profound cannot fail to spread 
 to the uttermost limits of scientific thought and 
 to evoke a discussion adequate to the nature of 
 the problem and the character of the solution. 
 
 We may state the thesis succinctly as 
 follows: The existence of man depends upon 
 his ability to sustain himself; the economic 
 life is therefore the fundamental condition of 
 all life. Since human life, however, is the life 
 of man in society, individual existence moves 
 within the framework of the social structure 
 and is modified by it. What the conditions 
 of maintenance are to the individual, the similar 
 relations of production and consumption are to 
 the community. To economic causes, there- 
 fore, must be traced in last instance those 
 transformations in the structure of society which 
 themselves condition the relations of social 
 classes and the various manifestations of social 
 life. 
 
 This doctrine is often called " historical ma- 
 terialism," or the " materialistic interpretation 
 
4 ECONOMIC INTERPRETATION 
 
 of history." Such terms are, however, lacking 
 in precision. If by materialism is meant the 
 tracing of all changes to material causes, the 
 biological view of history is also materialistic. 
 Again, the theory which ascribes all changes 
 in society to the influence of climate or to the 
 character of the fauna and flora is materialistic, 
 and yet has little in common with the doctrine 
 here discussed. The doctrine we have to deal 
 with is not only materialistic, but also economic 
 in character; and the better phrase is not the 
 "materialistic interpretation," but the "economic 
 interpretation " of history. In France it has 
 become the fashion to call the theory " economic 
 determinism " ; but this is still more objection- 
 able for the reason that it begs the question as 
 to whether there is anything really "determi- 
 nistic" or fatalistic about the doctrine. This 
 point will be fully discussed hereafter. 1 
 
 In the following pages an attempt will be 
 made to explain the genesis and development 
 of the doctrine, to study some of the applica- 
 tions made by recent thinkers, to examine the 
 objections that may be advanced and, finally, to 
 estimate the true import and value of the 
 theory for modern science. 
 
 1 See part ii, chapter i. 
 
PART I 
 
 HISTORY OF THE THEORY OF ECONOMIC 
 INTERPRETATION 
 
CHAPTER I 
 
 THE EARLY PHILOSOPHY OF HISTORY 
 
 Few of the leading writers of the eighteenth 
 or the first half of the nineteenth century 
 devoted much attention to the problem of his- 
 torical causation. The historians were for the 
 most part content to describe the facts of 
 political and diplomatic history ; and, when 
 they sought for anything more than the most 
 obvious explanation of the facts, they generally 
 took recourse to the " great man " theory or to 
 the vague doctrine of the " genius of the age." 
 Even the Nestor of modern historical writing, 
 Ranke, attempted scarcely more than to unravel 
 the tangled skein of international complications 
 by showing the influence of foreign politics 
 upon national growth. 
 
 While most of the historians gave evidence 
 of only a slight philosophical equipment, the 
 philosophers presented a " philosophy of his- 
 tory " which sometimes showed scarcely more 
 familiarity with history. That Rousseau was 
 
 7 
 
8 ECONOMIC INTERPRETATION 
 
 not a profound historical scholar, is to put it 
 mildly. Others, like Lessing in his Education 
 of Humanity 1 and Herder in his Ideas on the 
 Philosophy of History? were too much under 
 the domination of the theistic conception to 
 give much impetus to a newer movement of 
 thought, even though Herder in Germany, like 
 Ferguson 3 in Scotland, may be called in some 
 respects a forerunner of modern anthropological 
 investigations. Huxley, as well as many of the 
 German writers, 4 has pointed out that Kant in 
 his Idea of a Universal History ' 5 anticipated 
 some of the modern doctrines as to the evolu- 
 tion of society; but even Kant was not suf- 
 ficiently emancipated from the theology of the 
 age to take a strictly scientific view of the 
 subject. With Hegel's Philosophy of History 
 we reach the high-water mark of the " idealistic " 
 interpretation ; but the Hegelian conception of 
 the " spirit of history " has shown itself at once 
 too subtle and too jejune for general acceptance. 
 A second but less comprehensive attempt to 
 
 1 Die Erziehung des Menschengeschlechts. 
 
 2 Ideen zur Philosophic der Geschichte der Menschheit. 
 
 3 Essay on the History of Civil Society (1767). 
 
 4 Woltmann, Der Historische Materialismus (1900), pp. 17-21. 
 6 Idee zn einer Allgemeinen Geschichte in Weltburgerlicher 
 
 Absicht (1784). 
 
EARLY PHILOSOPHY OF HISTORY 9 
 
 interpret historical growth in terms of thought 
 and feeling was made by those who maintained 
 that religion is the keynote of progress. That 
 each of the five great religions has exerted a 
 profound influence on human development is 
 indubitable — Judaism typifying the idea of duty; 
 Confucianism, of order; Mohammedanism, of 
 justice ; Buddhism, of patience ; and Christian- 
 ity, of love. But, entirely apart from the fact 
 that this explanation overlooks the possibility 
 of regarding religion as a product rather than a 
 cause, no light is thrown on the question why 
 the retention of the same religion is often 
 compatible with the most radical changes in 
 the character and condition of its devotees. 
 The religious interpretation of history, even in 
 the modified form of Mr. Benjamin Kidd's 
 theory, has found but few adherents. 
 
 A third explanation, which can be traced to 
 Aristotle and which has met with some favor 
 among publicists, might be called the political 
 interpretation of history. It holds, substan- 
 tially, that throughout all history there can be 
 discerned a definite movement from monarchy 
 to aristocracy, from aristocracy to democracy, 
 and that there is a constant progress from abso- 
 lutism to freedom, both in idea and in institu- 
 
io ECONOMIC INTERPRETATION 
 
 tion. But very many philosophers, including 
 Aristotle himself, have pointed out that democ- 
 racy might lead to tyranny; and modern an- 
 thropology has tended to discredit the existence 
 of the first alleged step. Above all, it has 
 been repeatedly shown that political change is 
 not a primary, but a secondary, phenomenon ; 
 and that to erect into a universal cause what is 
 itself a result is to put the cart before the horse. 
 
 With the failure of all these attempts of a 
 more or less idealistic nature, the way was pre- 
 pared for an interpretation of history which 
 would look to physical, rather than to psychical, 
 forces ; or rather, which would explain how the 
 psychical forces, into which all social movement 
 may be analyzed, are themselves conditioned by 
 the physical environment. The name with which 
 this doctrine is associated is that of Buckle. 
 
 The theory pf the*, predominant influence of 
 the external world on human affairs can be 
 traced to many writers of the eighteenth cen- 
 tury, of whom Vico 1 and Montesquieu 2 are 
 
 1 In his Principii di una Scienza Nuova d" 1 intorno alia Comune 
 Natura delle Nazioni (1725). As to Vico, see Huth, Life of 
 Buckle, I, pp. 233 et seq. Buckle says of Vico that, " though his 
 Scienza Nuova contains the most profound views on ancient 
 history, they are glimpses of truth rather than a systematic inves- 
 tigation of any one period." 2 In his Esprit des Lois. 
 
EARLY PHILOSOPHY OF HISTORY n 
 
 easily the most famous. 1 Buckle himself had 
 no small opinion of Montesquieu's merits. He 
 tells us 2 that Montesquieu " knew what no his- 
 torian before him had even suspected, that in 
 the great march of human affairs, individual 
 peculiarities count for nothing. ... He effected 
 a complete separation between biography and 
 history, and taught historians to study, not the 
 peculiarities of individual character, but the 
 general aspect of the society in which the pecu- 
 liarities appeared." Furthermore, we are told, 
 Montesquieu "was the first who, in an inquiry 
 into the relations between the social condition 
 of a country and its jurisprudence, called in the 
 aid of physical knowledge in order to ascertain 
 how the character of any given civilization is 
 modified by the action of the external world." 
 
 What Montesquieu, however, stated aphor- 
 istically and on the basis of the imperfect 
 physical science of the day, Buckle first worked 
 out philosophically and with such wealth of 
 illustration that he is properly regarded as the 
 
 1 In a complete catalogue of writers who in some way in- 
 fluenced Buckle there ought to be included not only Holbach, 
 Helvetius and Cabanis, but for the early period Bodin, with his 
 theory of climates, and still farther back even Aristotle. 
 
 2 History of Civilisation in England, 1857, pt. ii, ch. vi (pp. 
 316-317 of edition of 1873). 
 
12 ECONOMIC INTERPRETATION 
 
 real creator of the doctrine. In his celebrated 
 second chapter, entitled " The Influence of 
 Physical Laws," Buckle analyzed the effects of 
 climate, food and soil upon social improvement 
 and its basis, the accumulation of wealth. 
 Buckle, it is true, as we have been lately re- 
 minded, 1 does not claim that all history is to be 
 interpreted in the light of external causes alone. 
 He does, indeed, tell us that in early society 
 the history of wealth depends entirely on soil 
 and climate ; but he is careful to add that in a 
 more advanced state of society there are other 
 circumstances which possess an equal, and 
 sometimes a superior, influence. 2 In fact, in a 
 later chapter he maintains that " the advance 
 of European civilization is characterized by a 
 diminishing influence of physical laws and an 
 increasing influence of mental laws " ; and he 
 concludes that if, as he has shown, " the meas- 
 ure of civilization is the triumph of the mind 
 over external agents, it becomes clear that of 
 the two classes of laws which regulate the pro- 
 gress of mankind, the mental class is more 
 important than the physical." 3 At the end of 
 
 1 By Robertson, Buckle and his Critics (1895). 
 
 2 History of Civilization, I, p. 44. 
 »/&#., pp. 156, 157. 
 
EARLY PHILOSOPHY OF HISTORY 13 
 
 his general analysis he even goes so far as to 
 maintain that " we have found reason to believe 
 that the growth of European civilization is solely 
 due to the progress of knowledge, and that the 
 progress of knowledge depends on the number 
 of truths which the human intellect discovers, 
 and on the extent to which they are diffused." * 
 While it is clear, therefore, that Buckle was 
 by no means so extreme as some of his critics 
 would have us believe, it is none the less proba- 
 ble that his name will remain associated with 
 the doctrine of physical environment. For it 
 was he, after all, who most forcibly and elo- 
 quently called attention to the importance of the 
 physical factors and to the influence that they 
 have exerted in moulding national character 
 and social life. Since his time much more has 
 been done, not only in studying, as Buckle 
 himself did, the immediate influence of climate 
 and soil, 2 but also in explaining the allied field 
 of the effect of the fauna and the flora on social 
 development. The subject of the domestica- 
 tion of animals, for instance, and its profound 
 
 1 History of Civilization, I, p. 288. 
 
 2 One of the best known, but most uncritical, representatives 
 of this school is Grant Allen, especially in his article " Nation 
 Making" in the Gentleman" 1 s Magazine, 1873, reprinted in the 
 Popular Science Monthly of the same year. 
 
14 ECONOMIC INTERPRETATION 
 
 effect on human progress has not only been 
 investigated by a number of recent students, 1 
 but has been made the very basis of the ex- 
 planation of early American civilization by one 
 of the most brilliant and most learned of recent 
 historians. 3 A Russian scholar 8 has shown in 
 detail the connection between the great rivers 
 and the progress of humanity, and the whole 
 modern study of economic geography is but an 
 expansion on broader lines of the same idea. 
 
 Buckle, however, devoted most of his atten- 
 tion to the influence of physical forces on the 
 production of the food supply. With the diffi- 
 culties of the problem of distribution, which he 
 confesses are of greater importance, he declares 
 himself unable to grapple. An exception, in- 
 deed, is to be made in the case of " a very early 
 stage of society," where Buckle thinks he can 
 prove that " the distribution of wealth is, like its 
 creation, governed entirely by physical laws." 4 
 
 1 Especially E. Hahn, Die Hausthiere und ihre Beziehung 
 zur Wirtschaft des Menschen (1896). 
 
 2 Payne, History of the New World called America ; especially 
 vol. i, bk. ii. All this was, however, substantially pointed out 
 by Morgan twenty years earlier in his Ancient Society, p. 24. 
 For Morgan, see chapter vi, below. 
 
 3 Metchnikoff, La Civilisation et les Grandes Fleuves Histo- 
 riques. PreTace d'Elise'e Reclus. Paris, 1889. 
 
 4 Civilization in England, I, p.52. 
 
EARLY PHILOSOPHY OF HISTORY 15 
 
 His suggestive, but not very successful, attempt 
 to prove this point, which rests upon an accept- 
 ance of the one fundamental error of the classi- 
 cal economists — the wages-fund doctrine — 
 can here only be mentioned. 1 It is, however, 
 important to emphasize the fact that, with this 
 one exception, Buckle makes no endeavor to 
 throw any light on the connection between 
 physical environment and the distribution of 
 wealth ; for distribution, he tells us, depends on 
 " circumstances of great complexity, which it is 
 not necessary here to examine," and of which, 
 as he adds in a note, " many are still unknown." 2 
 
 1 Briefly put, the argument is as follows : The two great con- 
 stituents of food are carbon and oxygen ; the colder the country, 
 the more highly carbonized must be the food ; nitrogenous foods 
 are less costly than carbonaceous ones. Wages depend on popu- 
 lation, population on the food supply ; hence the tendency for 
 wages in hot countries is to be low, in cold countries to be high. 
 Finally, wages and profits vary in inverse proportions ; or, as he 
 puts it elsewhere, if rent and interest are high, wages are low. 
 Hence the great differentiation of rural classes in hot countries. 
 
 2 Civilization in England, I, p. 5 1 . It is amusing to note that the 
 only law which Buckle himself accepts — " the great law of the ratio 
 between the cost of labor and the profits of stock " — is precisely 
 the one which, in its original form, has been discredited by modern 
 economic research. Notwithstanding this fact, Mr. Robertson is 
 so loyal to his hero that he calls it " one of those generalisations 
 by which Buckle really illuminates history." — Robertson, Buckle 
 and his Critics, p. 49. 
 
CHAPTER II 
 
 PHILOSOPHICAL ANTECEDENTS OF THE THEORY' 
 
 The explanation which Buckle made no 
 attempt to give had been advanced more than 
 a decade before by another writer who was des- 
 tined to become far more famous and influen- 
 tial. Karl Marx enjoyed some qualifications 
 for the task which were denied to Buckle. 
 Buckle was, indeed, well abreast of the foreign, 
 as well as the English, literature on history and 
 natural science; but his economic views were 
 almost entirely in accord with those of the 
 prevalent English school. These principles so 
 completely lacked the evolutionary point of 
 view as to preclude any historical treatment 
 of society. Karl Marx, on the other hand, not 
 only possessed the philosophical and scientific 
 equipment of a German university graduate, but 
 found himself in direct and unqualified opposi- 
 tion to the teachings of the professional econo- 
 mists. While Buckle contented himself with 
 pointing out how physical forces affect the pro- 
 
 16 
 
ANTECEDENTS OF THE THEORY 17 
 
 duction of wealth, Marx addressed himself to 
 the larger task of showing how the whole struc- 
 ture of society is modified by the relations of 
 social classes, and how these relations are 
 themselves dependent on antecedent economic 
 changes. In Buckle it was primarily the physi- 
 cist that created a certain materialistic interpre- 
 tation of history; in Marx it was the socialist 
 that brought about a very different and specifi- 
 cally economic interpretation of history. In 
 order to understand the genesis of the economic 
 interpretation of history it will be necessary to 
 say a few words about the philosophical ante- 
 cedents of Marx. 
 
 Like most of the young Germans of the thir- 
 ties, Marx was a firm believer in Hegel. The 
 Hegelian philosophy, however, really contained 
 two separate parts, — the dialectical method and 
 the system. The fundamental conception of the 
 Hegelian dialectic is that of process, or devel- 
 opment by the union of opposites — a method 
 that advances from notion to notion through 
 negation. In all logic we begin with a half 
 truth ; we proceed to its opposite, which is 
 equally false ; and we then combine them into 
 a third, which shows that they are equally true, 
 when considered as necessary constituents of 
 
18 ECONOMIC INTERPRETATION 
 
 the whole. 1 This idea of process, or develop- 
 ment, Hegel applied to his celebrated state- 
 ment : " All that is real is reasonable ; all that 
 is reasonable is real." Interpreted in one way, 
 this would mean fatalism, or optimistic conserv- 
 atism. But according to Hegel everything that 
 exists is by no means real. Only that is real 
 which in the course of its development shows 
 itself to be necessary. When it is no longer 
 necessary, it loses its reality. As some of his 
 followers pointed out, the French government 
 had become so unnecessary by 1 789 that not it, 
 but the Revolution, was real. Hence the origi- 
 nal statement turns into the opposite : All that 
 is real becomes in the course of time unreason- 
 able, and is thus from the very outset unreal ; 
 all that is reasonable in idea is destined to be 
 realized, even though it may for the moment be 
 utterly unreal. The original statements of the 
 reasonableness of what is real, and of the reality 
 of what is reasonable, blend into the higher 
 statement that all that exists is destined some 
 day to pass out of existence. 2 
 
 1 Bonar, Philosophy and Political Economy, p. 300 ; and 
 Schwegler, History of Philosophy, translated by Stirling (5th ed., 
 1875), p. 324. 
 
 2 F. Engels, Ludivig Feuerbach und der Ausgang der Klassi- 
 schen Deutschen Philosophic, 1888 (2d ed., 1895), p. 3. 
 
ANTECEDENTS OF THE THEORY 19 
 
 The importance of this dialectical method 
 lay in the idea of process — in the realization 
 of the fact that the conclusions of human 
 thought and action are not final. Translated 
 into social and political language, it formed 
 the basis of the aspirations of the liberal and 
 progressive elements in the community. On 
 the other hand, Hegel himself never drew these 
 radical conclusions from his theory because, 
 although in his logic he made it clear that the 
 truth is nothing but the dialectical process it- 
 self, he nevertheless posited, as a result of his 
 whole philosophy, the conception of the " abso- 
 lute idea." Into the mysteries of this absolute 
 idea we are not called upon to penetrate ; it is 
 sufficient to point out that, as applied to the do- 
 main of social politics, it results in a moderate 
 conservatism. It is in the then existing Ger- 
 man state that, according to Hegel, universal- 
 ity and individuality, law and liberty — the 
 highest stage of the universal spirit — find their 
 reconciliation ! 
 
 The antagonism between the dialectical and 
 the absolute system of Hegel was not at first 
 perceived. Just as both individualists and so- 
 cialists to-day claim Adam Smith as the foun- 
 tain head of their doctrines, so for a time both 
 
20 ECONOMIC INTERPRETATION 
 
 radicals and conservatives in Germany harked 
 back to Hegel. Toward the end of the thirties 
 the schism became apparent. The Young- 
 Hegelians swore by the dialectical method and 
 landed in radicalism ; the orthodox followers re- 
 mained true to the " absolute idea " and became 
 reactionaries. At first, however, politics was 
 a dangerous field to enter, and the discussion 
 turned on religion. As either Catholicism or 
 Evangelical Protestantism was the state reli- 
 gion in each of the German states, the attack 
 on religion was indirectly political in character, 
 and was recognized as such. 
 
 Strauss had set the ball rolling in 1835 by his 
 Life of Jesus. His assertion of the mythical 
 character of the evangelist accounts led to a 
 famous dispute with Bruno Bauer, who went one 
 step farther and maintained that they were not 
 even myths, but pure fabrications. In this reac- 
 tion against the foundations of the state religion 
 the Young- Hegelians were practically forced 
 back to the philosophical materialism of England 
 and France in the eighteenth century. But they 
 now recognized the antagonism between their 
 new views and the doctrine of Hegel. While 
 the philosophical materialists had posited nature 
 as the only reality, Hegel regarded the absolute 
 
ANTECEDENTS OF THE THEORY 21 
 
 idea — that is, the intellect and its logical pro- 
 cess — as the fundamental conception, and na- 
 ture as only the derivative or the reflex of the 
 absolute idea. 
 
 The uncertainty continued until the early 
 forties, when Feuerbach published his Essence 
 of Christianity? in which he sought to demol- 
 ish the idealistic or transcendental basis of all 
 theology. In this work Feuerbach claimed 
 that nature exists independently of philosophy, 
 that there is in reality nothing but nature and 
 man, and that our religious conceptions are a 
 product of ourselves, who again are nothing but 
 a product of nature. Who has not heard of 
 Feuerbach's famous phrase: Der Mensch ist 
 was er isst — "Man is what he eats " ? Feuer- 
 bach at once showed the Young- Hegelians 
 that, important as the Hegelian dialectics may 
 have been, the " absolute idea " was not the 
 basis, but the product. 
 
 Feuerbach exerted a profound influence on 
 the thinkers of the day. Curiously enough, 
 however, he also, in the domain of social poli- 
 tics, gave rise to two antagonistic schools. 
 Although in his philosophy a materialist, or 
 rather a "naturalist," there was a decidedly 
 
 1 Das Wesen des Christ enthtims. 
 
22 ECONOMIC INTERPRETATION 
 
 idealistic strain in his etliical doctrine. With 
 him religion is what the etymology of the word 
 implies, — the really important thing that binds 
 men together. Of his * attempt to erect an 
 idealistic religion on a naturalistic basis, this 
 is not the place to speak. 1 ' But it is important 
 to point out that his doctrine of love as the 
 basis of all religion led to the so-called " true " 
 or " philosophical " socialism of the forties in 
 Germany. The early socialists had accepted 
 the views of the French reformers, St. Simon 
 and Fourier. Now they asserted that all that 
 was necessary was to apply Feuerbach's "hu- 
 manism " to social relations, in order to pro- 
 claim the speedy regeneration of mankind. 
 The leaders of the " philosophical " socialists, 
 Karl Griin and Moses Hess, 2 for a time domi- 
 nated the social movement in Germany. 
 
 While the superimposed idealism of Feuer- 
 bach led to the "philosophical socialism" of the 
 forties, his original and basic naturalism helped 
 to produce in Karl Marx the founder of " scien- 
 tific socialism." Marx was educated in Hegel- 
 
 1 Cf. Lange, Geschichte des Materialismtis, vol. ii (3d ed., 
 1877), pp. 73-8 r. 
 
 2 For their views in detail, see George Adler, Die Geschichte 
 der ersten Sozial-poliiischen Arbeiterbeivegtmg in Detitschland, 
 pp. 83-85. 
 
ANTECEDENTS OF THE THEORY 23 
 
 ianism, and to the end of his days loved to 
 coquet with the Hegelian dialectic. He had 
 become a Young- Hegelian and was deeply 
 influenced by the appearance of Feuerbach's 
 book. This set him thinking. The materi- 
 alistic idea he accepted as beyond dispute, but 
 he recognized some of its weaknesses. The 
 materialism of the eighteenth century was es- 
 sentially mechanical and unhistorical. It had 
 developed before science had assumed its mod- 
 ern garb. The watchword of modern science 
 is that of evolution through natural selection. 
 Although this had not yet been proclaimed 
 even by the natural scientists, or at all events 
 had certainly not been applied by any one to 
 social conceptions, the idea was in the air ; and, 
 although Marx was not at first specially well 
 versed in natural science, the naturalism of 
 Feuerbach, combined with the conception of 
 process in the dialectic of Hegel, led him 
 finally to the theory that all social institutions 
 are the result of a growth, and that the causes 
 of this growth are to be sought not in any 
 idea, but in the conditions of material exist- 
 ence. In other words, it led him to the eco- 
 nomic interpretation of history. He then 
 broke at once with the philosophical or sen- 
 
24 ECONOMIC INTERPRETATION 
 
 timental socialists, and devoted all his time 
 henceforth to the deeper study of economic 
 conditions. 
 
 That Marx's analysis of economic conditions 
 led him to scientific socialism is a thing by 
 itself, with which we have here no concern ; for 
 that is an economic theory, based upon his 
 doctrines of surplus value and profits, which 
 have been engaging the attention of econo- 
 mists throughout the world. We need to lay 
 stress on Marx's philosophy, rather than on his 
 economics ; and his philosophy, as we now 
 know, resulted in his economic interpretation 
 of history. It chanced that he also became a 
 socialist ; but his socialism and his philosophy 
 of history are, as we shall see later, really 
 independent. One can be an " economic 
 materialist " and yet remain an extreme indi- 
 vidualist. The fact that Marx's economics 
 may be defective has no bearing on the truth 
 or falsity of his philosophy of history. 
 
CHAPTER III 
 
 GENESIS AND DEVELOPMENT OF THE THEORY 
 
 Let us now proceed to illustrate the develop- 
 ment of the new doctrine from the writings of 
 Marx himself. It will be advisable to quote 
 freely, because these earlier works of Marx are 
 little known even in Germany, and are almost 
 unknown outside of Germany. 1 Yet they are 
 of the utmost importance in showing the gen- 
 esis of an idea which is now one of the storm 
 centres not only of economic and social, but 
 also of philosophical, discussion. 
 
 In his earliest essays we see only the radical 
 political reformer. As a young man of twenty- 
 four, he was called in 1842 to the editorship of 
 the Rheinische Zeitung, a daily paper started 
 
 1 Just as these lines go to the printer, an announcement is 
 made of the impending publication, in three volumes, of the more 
 important of Marx's essays between 1841 and 1850, under the 
 title : Aus dem Literarischen Nachlass von Karl Marx, Friedrich 
 Engels und Ferdinand Lassalle. Herausgegeben von Franz 
 Mehring. Gesammelte Schriften von Karl Marx tmd Friedrich 
 Engels, 1841 bis 1850. Erster Band : Von Marz, 1841, bis Marz ; 
 1844. Stuttgart, Dietz, 1 901-1902. 
 
 25 
 
26 ECONOMIC INTERPRETATION 
 
 in Cologne by some of the Young- Hegelians 
 who belonged to the radical party. While bat- 
 tling for political reforms Marx had his atten- 
 tion called for the first time to economic 
 questions. He severely criticised the historical 
 school of jurisconsults, because they regarded 
 all existing legal institutions as the necessary, 
 and therefore the wise, result of a long evolu- 
 tion. To their optimistic conservatism Marx 
 opposed the Hegelian idea of liberty. 
 
 It was not, however, until after the Rheinische 
 Zeitung had been suspended by the government 
 in 1843 that Marx went to Paris 1 and became a 
 socialist — influenced largely by St. Simon and 
 Proudhon, and possibly by the celebrated book 
 of Lorenz Stein, which appeared tr^e year be- 
 fore, on the socialistic and communistic move- 
 ment in France. 2 At Paris, Marx started in 
 1844, in conjunction with another leader of the 
 
 1 In the mean time he published anonymously a violent 
 article on the Prussian censorship, in the Anekdota zur Neuesten 
 Deutschen Philosophie und Publicistik, von Bruno Bauer, Ludwig 
 Feuerbach, Friedrich Koppen, Karl Nauwerk, Arnold Ruge und 
 einigen Ungenannten, 1843. One of these " Ungenannten " was 
 Karl Marx, who wrote under the title of a " Rhinelander." The 
 article may be found in vol. i, pp. 56-88. 
 
 2 It is more than probable, however, that Marx was converted 
 to socialism wholly by the French writers, who themselves 
 exerted so great an influence on Stein. Cf. the correspondence 
 of Arnold Ruge, vol. i. 
 
DEVELOPMENT OF THE THEORY 27 
 
 Young- Hegelians, Arnold Ruge, the Deutsche 
 Franz'osische Jahrbiicher. Here the beginning 
 of the opposition to the French communists is 
 perceptible; for in the introductory editorial 
 we are told that what has saved Germany from 
 " the metaphysical and fantastical ideas of 
 Lamennais, Proudhon, St. Simon and Fourier " 
 is the Hegelian logic. 1 Yet Marx showed the 
 influence of Feuerbach by writing an article 
 in criticism of Hegel's Philosophy of Law, in 
 which he sought to prove how theological criti- 
 cism was now necessarily being replaced by 
 political criticism. 
 
 Marx, indeed, went a step farther, and empha- 
 sized the necessity of a revolution of the fourth 
 estate, — the proletariat. He was beginning to 
 formulate his ideas on economic questions. 
 " The relation of industry and of the world 
 of wealth in general to the political world is 
 the chief problem of modern times." 2 In 
 another place he tells us that "revolutions 
 
 1 Deiitsch-Franz'dsischejahrb'ucher . Herausgegeben von Arnold 
 Ruge und Karl Marx. Erste und Zweite Lieferung, 1844, p. 8. 
 Cf. also : " Uns Deutsche hat . . . von der Willkiir und Phan- 
 tastik das Hegelsche System befreit." 
 
 2 "Das Verhaltniss der Industrie, iiberhaupt der Welt des 
 Reichthums zu der politischen Welt ist ein Hauptproblem der 
 modernen Zeit." — Ibid., p. 75. 
 
28 ECONOMIC INTERPRETATION 
 
 need a passive element, a material basis." 1 
 In a later essay in the same periodical on 
 the " Jewish Question," in which he opposed 
 the views of Bruno Bauer, Marx claims that 
 " we must emancipate ourselves before we can 
 emancipate others." 2 He seeks to show that 
 the importance of the French Revolution con- 
 sisted in freeing not only the political forces of 
 society, but also the economic basis on which 
 the political superstructure rested. 3 The politi- 
 cal change was in a certain sense idealism ; but 
 it marked at the same time the materialism of 
 society. 4 
 
 The double number of the Deutsch-Fran- 
 zosische Jahrbucher was the only one that ap- 
 peared. Ruge and Marx could not agree in 
 their attitude toward the question of commu- 
 nism. While in Paris, however, Marx formed 
 
 1 " Die Revolutionen bediirfen namlich eines passiven Ele- 
 mentes, einer materiellen Grundlage. . . . Die Theorie wird in 
 einem Volke immer nur so weit verwircklicht als sie die Ver- 
 wircklichung seiner Bedurfnisse ist." — Deittsch-Franzosische 
 Jahrbucher, p. 80. 2 Ibid., p. 184. 
 
 3 " Die politische Emancipation ist zugleich die Auflosung der 
 alten Gesellschaft, auf welcher das dem Volk entfremdete Staats- 
 wesen, die Herrschermacht, ruht. Die politische Revolution ist 
 die Revolution der burgerlichen Gesellschaft." — Ibid., p. 204. 
 
 4 " Allein die Vollendung des Idealismus des Staats war zu- 
 gleich die Vollendung des Materialismus der burgerlichen Gesell- 
 schaft. 1 ' — Ibid., p. 205. 
 
DEVELOPMENT OF THE THEORY 29 
 
 an intimacy with his lifelong friend, Frederick 
 Engels, whose acquaintance he had originally 
 made while both were working on the editorial 
 staff of the Rheinische Zeitung} They now 
 decided to write in common a work against 
 Bruno Bauer, who represented the more specu- 
 lative wing of the Young- Hegelians. This 
 appeared in 1845 under the title of The Holy 
 Family} 
 
 In this book, written almost entirely by 
 Marx, he shows the strong influence of Feuer- 
 bach. 3 As he was at that time, however, 
 more interested in opposing the transcendental 
 notions of the other Young-Hegelians in gen- 
 eral than in emphasizing the differences be- 
 tween himself and the " sentimental " socialists, 
 it will not surprise us to find him defending 
 Proudhon. 4 Yet even here Marx shows the 
 
 1 Some correspondence of this early period is preserved in 
 " Aus den Briefen von Engels an Marx " in Die JVeue Zeit } XIX 
 (1901), ii, pp. 505 et seq. 
 
 2 Die Heilige Familie oder Kritik der Kritischen Kritik. Gegen 
 Bruno Bauer und Consorten. Von Friedrich Engels und Karl 
 Marx. Frankfurt a. M., 1845. 
 
 3 Cf. the enthusiastic description of Feuerbach on p. 139 and 
 the disdainful attitude toward Hegel on p. 126. 
 
 4 " Proudhon's Schrift ' Ou'est-ce que la Propriete ' hat dieselbe 
 Bedeutung fur die moderne Nationalbkonomie, welche Say's 
 [evidently a misprint for Sieyes'] Schrift ' Qu'est-ce que le tiers 
 Etat' fur die moderne Politik hat." — Ibid., p. 36. 
 
30 ECONOMIC INTERPRETATION 
 
 essentially mechanical nature of the older 
 French materialism, and points out how the 
 philosophic materialism of Helvetius and Hol- 
 bach led to the socialism of Babceuf and Fou- 
 rier. 1 Incidentally, Marx calls attention to the 
 economic basis of the French Revolution, and 
 points out that the individual of the French 
 Revolution differed from the individual of clas- 
 sic antiquity because his economic and indus- 
 trial relations were different. 2 Finally, in 
 another passage he asks outright : — 
 
 " Do these gentlemen think that they can 
 understand the first word of history as long 
 as they exclude the relations of man to nature, 
 natural science ana! industry? Do they believe 
 that they can actually comprehend any epoch 
 without grasping the industry of the period, 
 the immediate methods of production in actual 
 
 1 " Fourier geht unmittelbar von der Lehre der franzbsischen 
 Materialisten aus. Die Babouvisten waren rohe uncivilisirte 
 Materialisten, aber auch der entwickelte Communismus datirt 
 direkt von dem franzbsischen Materialismus." — Op. cit., p. 207, 
 and the quotations on pp. 209-211. As the volume is extremely 
 scarce, it may be noted that a part of this chapter was reprinted 
 in Die Neue Zeit, III (1885), pp. 385-395. 
 
 2 In speaking of a placard containing the Declaration of 
 Rights, Marx says : " Eben diese Tabelle proklamirte das Recht 
 eines Menschen, der nicht der Mensch des antiken Gemeinwesens 
 sein kann, so wenig als seine nationalbkonomischen und in- 
 dustriellen Verhaltnisse die antiken sind." — Ibid., p. 192. 
 
DEVELOPMENT OF THE THEORY 31 
 
 life ? . . . Just as they separate the soul from 
 the body, and themselves from the world, so 
 they separate history from natural science and 
 industry, so they find the birthplace of history 
 not in the gross material production on earth, 
 but in the misty cloud formation of heaven." 1 
 
 Although we find in Marx's early works only 
 these incidental allusions to the doctrine of 
 economic interpretation, we are told by Engels, 
 the literary executor of Marx, that Marx had 
 worked out his theory by 1845. 2 That Engels 
 
 1 " Oder glaubt die kritische Kritik in der Erkenntniss der 
 geschichtlichen Wirklichkeit auch nur zum Anfang gekommen zu 
 sein, so lange sie das theoretische und praktische Verhaltniss des 
 Menschen zur Natur, die Naturwissenschaft und die Industrie, 
 aus der geschichtlichen Bewegung ausschliesst ? Oder meint sie 
 irgend eine Periode in der That schon erkannt zu haben, ohne z. 
 B. die Industrie dieser Periode, die unmittelbare Produktions- 
 weise des Lebens selbst, erkannt zu haben? . . . Wie sie das 
 Denken von dem Sinnen, die Seele vom Leibe, sich selbst von 
 der Welt trennt, so trennt sie die Geschichte von der Natur- 
 wissenschaft und Industrie, so sieht sie nicht in der grob- 
 materiellen Produktion auf der Erde, sondern in der dunstigen 
 Wolkenbildung am Himmel die Geburtstatte der Geschichte." — 
 Die Heilige Familie, p. 238. 
 
 2 " The ' manifesto ' being our joint production, I consider 
 myself bound to state that the fundamental proposition which 
 forms its nucleus belongs to Marx. That proposition is : that in 
 every historical epoch the prevailing mode of economic produc- 
 tion and exchange, and the social organization necessarily follow- 
 ing from it, form the basis upon which it is built up, and from 
 which alone can be explained the political and intellectual his- 
 tory of that epoch ; that, consequently, etc. etc. . . . 
 
 " This proposition, which in my opinion is destined to do for 
 
32 ECONOMIC INTERPRETATION 
 
 is quite correct in this is shown not only by 
 the quotations just mentioned, but also by the 
 annotations which Marx made to Feuerbach in 
 1845. 1 Marx here objects to the old mechanical 
 materialistic doctrine that men are simply the 
 results of their environment, because it forgets 
 that this environment can itself be changed by 
 man. 2 He also takes exception to Feuerbach's 
 whole view of religion, on the ground that 
 Feuerbach fails to perceive that man is the 
 product of his social relations and that religion 
 itself is a social outgrowth. 3 A fuller statement 
 
 history what Darwin's theory has done for biology, we both had 
 been rapidly approaching for some years before 1845. . . . But 
 when I again met Marx ... in spring, 1845, ne had it already 
 worked out, and put it before me in terms almost as clear as those 
 in which I have stated it here." — Manifesto of the Communist 
 Party, by Marx and Engels. Authorized English translation, 
 edited and annotated by Frederick Engels, 1888, preface, pp. 5, 6. 
 This preface was written in English by Engels, and appeared in 
 German only in subsequent editions. 
 
 1 Published as an appendix to Ludwig Feuerbach tmd der 
 Ausgang der Klassischen Deutschen Philosophic. Von Friedrich 
 Engels. Mit Anhang, Karl Marx iiber Feuerbach, vom Jahre 
 1845 (1888). 
 
 2 " Die materialistische Lehre, dass die Menschen Produkte 
 der Umstande und der Erziehung sind, vergisst, dass die Um- 
 stande eben von den Menschen verandert werden und dass der 
 Erzieher selbst erzogen werden muss." — Op. cit., p. 80. 
 
 3 " Feuerbach lost das religiose Wesen in das menschliche 
 Wesen auf. Aber das menschliche Wesen ist kein . . . Abstrak- 
 tum. In seiner Wirklichkeit, ist es das Ensemble der gesell- 
 schaftlichen Verhaltnisse. . . . Feuerbach sieht nicht, dass das 
 
DEVELOPMENT OF THE THEORY 33 
 
 of his new 1 position, however, is found in some 
 recently discovered essays which were written 
 at about that time. 2 These articles, published 
 anonymously in the Westf'dlischer Damp/boot? 
 are of cardinal importance because Marx now 
 for the first time emphasized his disagreement 
 with the "sentimental socialists." 
 
 In the first series of articles, Marx criticises 
 a German communistic sheet published in New 
 York, which was devoting much attention to the 
 Anti-Rent Riots. 4 Marx discusses the agrarian 
 movement in the United States and tries to show 
 from his new point of view the connection be- 
 
 ' religiose Gemiith' selbst ein gesellschaftliches Produkt ist." — 
 Ludwig Fetter bach, p. 81. 
 
 1 Peter von Struve claims that this new position was not 
 occupied by Marx until 1846. Cf. his articles, "Zur Entwick- 
 lungsgeschichte des wissenschaftlichen Sozialismus," in Die Neue 
 Zeit, XV (1897), i, p. 68, and ii, pp. 228, 269. Struve, however, 
 seems to lay too little stress on the points emphasized above. Cf. 
 also the article of Kampffmeyer, " Die okonomischen Grundlagen 
 des deutschen Sozialismus," in Die Neue Zeit, V (1887), especially 
 p. 536, where attention is called to Marx's historical interpretation 
 of history in his letters to Ruge in 1843. 
 
 2 The substance of these essays has been printed by Struve in 
 Die Neue Zeit, XIV (1896), 41-48, under the title of " Zwei bisher 
 unbekannte Aufsatze von Karl Marx aus den vierziger Jahren. 
 Ein Beitrag zur Entstehungsgeschichte des wissenschaftlichen 
 Sozialismus." 
 
 3 A monthly review edited by Otto Liining, which lived from 
 1845 to l8 4 8 - 
 
 4 Der Volkstribun, edited by H. Kriege in 1846. 
 
34 ECONOMIC INTERPRETATION 
 
 tween economic and political phenomena. In a 
 second series of articles 1 he joins issue with Grim 
 and Hess, the chief advocates of philosophical 
 socialism, and ridicules their failure to perceive 
 that an alteration in methods of production 
 brings about changes in the whole social life. 2 
 
 By 1847 3 Marx had made a somewhat deeper 
 study of economic history. He was now so 
 convinced of the truth of his new theory that 
 he proceeded to make a furious onslaught on 
 
 1 " Karl Griin, die soziale Bewegung in Frankreich und Belgien 
 oder die Geschichtsschreibung des wahren Sozialismus." This 
 appeared early in 1847. The whole of this essay has now been 
 printed, with an introduction by E. Bernstein, in Die Neue Zeit, 
 XVIII (1900), pp. 4, 37, 132, 164. 
 
 2 " Herr Grim vergisst, dass Brot heutzutage durch Dampf- 
 miihlen, friiher durch Wind und Wassermiihlen, noch friiher 
 durch Handmiihlen produzirt wurde, dass diese verschiedenen 
 Produktionsweisen vom blossen Brotessen ganzlich unabhangig 
 sind. . . . Dass mit diesen verschiedenen Stufen der Produk- 
 tion auch verschiedene Verhaltnisse der Produktion zur Consum- 
 tion, verschiedene Widerspriiche beider gegeben sind, dass diese 
 Widerspriiche zu verstehen sind nur aus einer Betrachtung, zu 
 losen nur durch eine praktische Veranderung, der jedesmeligen 
 Produktionsweise und des gan; en darauf basirenden gesellschaft- 
 lichen Zustandes : das ahnt Herr Griin nicht." {Die Neue Zeit, 
 XIV, ii, p. 51.) That the difference between Marx and the " true 
 socialists " has often been exaggerated is claimed by Mehring in 
 Die Neue Zeit, XIV, ii, p. 401. 
 
 3 In this year Marx also published an article in the Deutsche 
 Briisseler Zeitung entitled " Die moralisierende Kritik und die 
 kritisierende Moral, ein Beitrag zur deutschen Kulturgeschichte." 
 It was directed against Karl Heinzen and was of very much the 
 same character as his attack on Griin. 
 
DEVELOPMENT OF THE THEORY 35 
 
 the older socialists in the person of their chief 
 representative — Proudhon. In reply to Prou- 
 dhon's Philosophy of Misery Marx wrote his 
 Misery of Philosophy. Here he elaborates the 
 theory that economic institutions are historical 
 categories and that history itself must be inter- 
 preted in the light of economic development. 
 We read — in French, it is true, for Marx wrote 
 equally well in German, English and French — 
 that the conception of private property changes 
 in each historical epoch, in a series of entirely 
 different social relations. 1 In a more general 
 way Marx contends that all social relations are 
 intimately connected with the productive forces 
 of society. He tells us that 
 
 " in changing the modes of production, mankind 
 changes all its social relations. The hand mill 
 creates a society with the feudal lord ; the steam 
 mill a society with the industrial capitalist. The 
 
 1 " A chaque epoque historique, la proprie*te s'est developpee 
 diffdremment et dans une serie de rapports sociaux entierement 
 differents. Ainsi definir la propriete bourgeoise n'est autre chose 
 que faire 1'expose de tous les rapports sociaux de la production 
 bourgeoise. Vouloir donner une definition de la propriete" 
 comme d'un rapport independant, d'une categorie a part, d'une 
 idee abstraite et dternelle, cela ne peut etre qu'une illusion de 
 me'taphysique ou de jurisprudence. 1 ' — Misere de la Philosophic 
 Riponse a la Philosophie de la Miser e de M. Proudhon. Par 
 Karl Marx, 1847, p. 153. 
 
36 ECONOMIC INTERPRETATION 
 
 same men who establish social relations in con- 
 formity with their material production also 
 create principles, ideas and categories in con- 
 formity with their social relations. . . . All 
 such ideas and categories are therefore histori- 
 cal and transitory products." 1 
 
 In another place he maintains that " the rela- 
 tions in which the productive forces of society 
 manifest themselves, far from being eternal 
 laws, correspond to definite changes in man 
 and in his productive forces." 2 Marx applies 
 this general law in many ways. Thus, in an 
 
 1 " Les rapports sociaux sont intimement lids aux forces pro- 
 ductives. En acquirant de nouvelles forces productives les 
 hommes changent leur mode de production, et en changeant leur 
 mode de production, la maniere de gagner leur vie, ils changent 
 tous leurs rapports sociaux. Le moulin a bras vous donnera la 
 societe" avec le suzerain ; le moulin a vapeur, la society avec le 
 capitaliste industriel. . . . Les memes hommes qui dtablissent 
 les rapports sociaux conformement a leur productivity materielle 
 produisent aussi les principes, les idees, les categories, conforme- 
 ment a leurs rapports sociaux. . . . Ainsi ces idees, ces catego- 
 ries, sont aussi peu e'ternelles que les relations qu'elles expriment. 
 Elles sont des produits historiques et transitoires." — Misere de 
 la Philosophie, pp. 99, 100. 
 
 2 " N'est-ce pas dire assez que le mode de production, les rap- 
 ports dans lesquels les forces productives se developpent, ne sont 
 rien moins que des lois e'ternelles, mais qu'ils correspondent a un 
 developpement determine des hommes et de leurs forces produc- 
 tives, et qu'un changement survenu dans les forces productives des 
 hommes amene necessairement un changement dans les rapports 
 de production." — Ibid., p. 115 ; cf. pp. 152, 177. 
 
DEVELOPMENT OF THE THEORY 37 
 
 acute study of the doctrine of rent, he points 
 out that rent in the Ricardian sense is nothing 
 but "patriarchal agriculture transformed into 
 commercial industry"; 1 and, after explaining 
 the historical growth of modern agricultural 
 conditions, he concludes by objecting to the 
 whole classical school, because it fails to see 
 that economic institutions can be understood 
 only as historical categories. 2 In another pas- 
 sage he contends that money itself is not a 
 thing, but a social relation, and that this rela- 
 tion corresponds to a definite form of produc- 
 tion in precisely the same way as exchanges 
 between individuals. 3 Finally, in analyzing the 
 essence of machinery and the historical impor- 
 tance of the principle of division of labor, Marx 
 
 1 " La rente, dans le sens de Ricardo, c'est l'agriculture patri- 
 arcale transformee en Industrie commerciale, le capital industriel 
 applique a la terre, la bourgeoisie des villes transplanted dans les 
 campagnes." — Misere de la Philosophie, p. 159. 
 
 2 " Ricardo aprds avoir suppose" la production bourgeoise 
 comme necessaire pour determiner la rente, l'applique ne"anmoins 
 a la propriete fonciere de toutes les epoques et de tous les pays. 
 Ce sont Ik les errements de tous les e"conomistes qui representent 
 les rapports de la production bourgeoise comme des categories 
 dternelles ." — Ibid. , p . 1 60 . 
 
 3 " La monnaie, ce n'est pas une chose, c'est un rapport social. 
 ... Ce rapport est un anneau et comme tel, intimement lid a 
 tout l'enchainement des autres rapports economiques ; . . . ce 
 rapport correspond a un mode de production determine", ni plus 
 ni moins que l'echange individual." — Ibid., p. 64. 
 
38 ECONOMIC INTERPRETATION 
 
 tells us that " machinery is not any more of an 
 economic category than is the ox that pulls the 
 plough ; it is a productive force. The modern 
 factory, which is itself based on machinery, is a 
 social relation, an economic category." 1 In short, 
 social life at any one time is the result of an 
 economic evolution. 
 
 In the famous Manifesto of the Commtcnist 
 Party? which appeared the following year, we 
 find the implications, rather than the direct 
 statement, of the principle. After describing 
 how the guild system of industry gave way to 
 the modern industrial system, based on the 
 world market and on the revolution in indus- 
 trial production, Marx points out that the bour- 
 geoisie, in revolutionizing the methods of pro- 
 duction, alters with them the whole character 
 of society, and displaces feudalism with modern 
 conditions. At the present day this is a truism ; 
 but at the time the manifesto appeared it was a 
 novel and striking conception. Unfortunately, 
 the thought was so inextricably interwoven with 
 
 1 " Les machines ne sont plus une categorie e'conomique que 
 ne saurait etre le boeuf que traine la charrue. Les machines ne 
 sont qu'une force productive. L'atelier moderne, qui repose sur 
 Tapplication des machines, est un rapport social de production, 
 une categorie economique." — Misere de la Philosophie, p. 128. 
 
 2 Manifest der Kommunistischen Partei (London, il 
 pp. 4-7. 
 
DEVELOPMENT OF THE THEORY 39 
 
 Marx's peculiarly socialistic explanation of the 
 effects of machinery, of the function of capital 
 and of the speedy cataclysm of society, that it 
 created at the time but little impression. 
 
 In the succeeding years Marx made various 
 applications of his theory. In 1849 he pub- 
 lished a series of articles on Wage-Labor and 
 Capital, in the course of which he traced the 
 reason for the change from slavery to serfdom 
 and to the wages system, and again laid down 
 the principle that all relations of society depend 
 upon changes in the economic life and more 
 particularly in the modes of production. He 
 tells us that 
 
 "with the change in the social relations by 
 means of which individuals produce, that is, 
 in the social relations of production, and with 
 the alteration and development of the material 
 means of production, the powers of production 
 are also transformed. The relations of pro- 
 duction collectively form those social relations 
 which we call society, and a society with defi- 
 nite degrees of historical development. . . . 
 Ancient society, feudal society, bourgeois so- 
 ciety, are simply instances of this collective 
 result of the complexes of relations of produc- 
 
40 ECONOMIC INTERPRETATION 
 
 tion, each of which marks an important step in 
 the historical development of mankind." 1 
 
 In a series of articles published in 1850, on 
 " The Class Struggles in France from 1848 to 
 1850," Marx made the first attempt to apply his 
 principle to an existing political situation. 2 He 
 endeavored to show that the great crisis of 1847 
 was the real cause of the February revolution, 
 and that the economic reaction of 1849 and 
 1850 was the basis of the political reaction 
 throughout the Continent. He followed this 
 in 1852 by another article on "The Eighteenth 
 Brumaire," in which he attempted to lay bare 
 the economic foundations of the coup d'Etat 
 in France, and to show that the empire really 
 depended on the small farmer or peasant, who 
 had now become a conservative in place of a 
 revolutionist. 3 It is in this work that we find 
 
 1 " Lohnarbeit und Kapital," Neue Rheinische Zeitung, Politisch- 
 okonomische Revue, redigirt von Karl Marx, April, 1849. This 
 was a series of lectures which Marx delivered in 1847 to a Brussels 
 labor union. They have recently been translated by J. L. Joynes 
 and published in pamphlet form under the title, Wage-Labor and 
 Capital (London, 1897). 
 
 2 These articles appeared under the simple title "1848-1849" 
 in the Neue Rheinische Zeitung, 1850. They were not published 
 in pamphlet form until 1895, when Engels edited them under 
 the title Die Klassenk'dmpfe in Frankreich, 184.8 bis 1850. 
 
 3 " Der Achtzehnte Brumaire des Louis Bonaparte " constituted 
 the second number of a political monthly called Die Revolution, 
 
DEVELOPMENT OF THE THEORY 41 
 
 the interesting bit of social psychology in which 
 the ideals of life themselves, as well as the 
 views of any one individual, no matter how 
 eminent, are traced to social and economic 
 causes. Marx informs us that 
 
 " on the various forms of property, on the con- 
 ditions of social existence, there rises an entire 
 superstructure of various and peculiarly formed 
 sensations, illusions, methods of thought and 
 views of life. The whole class fashions and 
 moulds them from out of their material founda- 
 tions and their corresponding social relations. 
 The single individual, in whom they converge 
 through tradition and education, is apt to 
 imagine that they constitute the real determin- 
 ing causes and the point of departure of his 
 action." 1 
 
 edited in New York in 1852 by Joseph Weydemeyer. It was 
 reprinted as a separate pamphlet by Marx in 1869. A third 
 edition was published in cheap form in 1885. 
 
 1 " Auf den verschiedenen Formen des Eigenthums, auf den 
 sozialen Existenzbedingungen, erhebt sich ein ganzer Ueberbau 
 verschiedener und eigenthiimlich gestalteter Empfindungen, 
 Illusionen, Denkweisen und Lebensanschauungen. Die ganze 
 Klasse schafft und gestaltet sie aus ihren materiellen Grundlagen 
 heraus und aus den entsprechenden gesellschaftlichen Verhalt- 
 nissen. Das einzelne Individuum, dem sie durch Tradition und 
 Erziehung zufiiessen, kann sich einbilden, dass sie die eigentlichen 
 Bestimmungsgriinde und den Ausgangspunkt seines Handelns 
 bilden." — Op. tit., 2d ed., p. 26. 
 
42 ECONOMIC INTERPRETATION 
 
 In another passage he contends that "men 
 make their own history, but they make it not 
 of their own accord or under self-chosen con- 
 ditions, but under given and transmitted con- 
 ditions. The tradition of all dead generations 
 weighs like a mountain on the brain of the 
 living." 1 
 
 During the early fifties, largely through the 
 efforts of Mr. Charles A. Dana, Marx was en- 
 gaged to write a series of articles for the New 
 York Tribune, which, under the editorship of 
 Horace Greeley, was devoting considerable at- 
 tention to the Fourierist socialistic movement 
 in the United States. In these articles, 2 which 
 appeared in English for a period of over eight 
 years, some of them anonymously, as editorials 
 of the Tribune, Marx discussed the general 
 
 1 " Die Menschen machen ihr eigene Geschichte, aber sie 
 machen sie nicht aus freien Stiicken, nicht unter selbstgewahlten, 
 sondern unter gegebenen und uberlieferten Umstanden. Die 
 Tradition aller toten Geschlechter lastet wie ein Alp auf dem 
 Gehirn der Lebenden." — Op. cit., 2d ed., p. 26. 
 
 2 These articles have recently been collected and published in 
 book form. The articles of 1851-52 have appeared under the 
 title, Revolution and Counter Revohition, or Germany in 1848. 
 By Karl Marx. Edited by Eleanor Marx Aveling, London, 1896. 
 The letters of 1853-56 are entitled: The Eastern Question, a 
 Reprint of Letters written 1853-1836, dealing with the Events 
 of the Crimean War. By Karl Marx. Edited by Eleanor Marx 
 Aveling and Edward Aveling, London, 1897. 
 
DEVELOPMENT OF THE THEORY 43 
 
 politics of continental Europe in the light of 
 his economic theory, and contributed in no 
 mean degree to the enlightenment of the 
 American public. It was not, however, until 
 the appearance in 1859 of his first professedly 
 scientific work, Contributions to the Criticism 
 of Political Economy, that Marx endeavored to 
 sum up his doctrine of economic interpretation 
 and to show how this induced him to attempt 
 his analysis of modern industrial society. He 
 tells us that his 
 
 " investigation led to the conclusion that legal 
 relations, like the form of government, can be 
 understood neither of and in themselves nor 
 as the result of the so-called general progress 
 of the human mind, but that they are rooted 
 in the material conditions of life. ... In the 
 social production of their every-day existence 
 men enter into definite relations that are at 
 once necessary and independent of their own 
 volition — relations of production that corre- 
 spond to a definite stage of their material 
 powers of production. The totality of these 
 relations of production constitutes the economic 
 structure of society — the real basis on which 
 is erected the legal and political edifice and to 
 which there correspond definite forms of social 
 
44 ECONOMIC INTERPRETATION 
 
 consciousness. The method of production in 
 material existence conditions social, political 
 and mental evolution in general." 1 
 
 And, after speaking of the periods when the 
 old forces are in temporary conflict with the new, 
 Marx proceeds : — 
 
 " With the alteration in the economic basis 
 the whole immense superstructure is more 
 or less slowly transformed. In considering 
 such transformations we must always distin- 
 guish between the material transformation in 
 the economic conditions of production, of which 
 natural science teaches us, and the legal politi- 
 cal, aesthetic or philosophical — in short ideo- 
 
 1 " Meine Untersuchung mlindete in dem Ergebniss, dass 
 Rechtsverhaltnisse wie Staatsformen, weder aus sich selbst zu 
 begreifen sind, noch aus der sogenannten allgemeinen Entwicklung 
 des menschlichen Geistes, sondern vielmehr in den materiellen 
 Lebensverhaltnissen wurzeln. ... In der gesellschaftlichen 
 Produktion ihres Lebens gehen die Menschen bestimmte, noth- 
 wendige, von ihrem Willen unabhangige Verhaltnisse ein, Pro- 
 duktionsverhaltnisse, die einer bestimmten Entwicklungsstufe 
 ihrer materiellen Produktionskrafte entsprechen. Die Gesamm- 
 theit dieser Produktionsverhaltnisse bildet die okonomische 
 Struktur der Gesellschaft, die reale Basis, worauf sich ein juris- 
 tischer und politischer Ueberbau erhebt, und welcher bestimmte 
 gesellschaftliche Bewusstseinsformen entsprechen. Die Produk- 
 tionsweise des materiellen Lebens bedingt den socialen, politischen 
 und geistigen Lebensprocess iiberhaupt." — Ztir Kritik der 
 Politischen Oekonomie, Erstes Heft (1859), pp. iv, v. 
 
DEVELOPMENT OF THE THEORY 45 
 
 logical forms, in which men become conscious 
 of this conflict and fight it out." 1 
 
 In his great work on Capital, published eight 
 years later, although he continually takes it for 
 granted, Marx nowhere formulates this law. 
 While the final chapter contains some interest- 
 ing economic history of England since the six- 
 teenth century, Marx confines the discussion 
 to a study of the economic results rather than 
 of the wider social or political consequences. 
 Partly for this reason, and partly because the 
 general public did not distinguish between his 
 historical views and his socialistic analysis of 
 existing industrial society, Marx's view of his- 
 tory had at first but slight influence outside of 
 socialistic circles. After his earlier works came 
 to be studied more carefully, the younger Marx- 
 ists pointed out the real import of the historical 
 principle. But it was not until the publication 
 in 1894, eleven years after the death of Marx, 
 of the third volume of Capital, with its wealth 
 
 1 " In der Betrachtung solcher Umwalzungen muss man stets 
 unterscheiden zwischen der materiellen naturwissenschaftlich treu 
 zu konstatirenden Umwalzung in den okonomischen Produktions- 
 bedingungen und denjuristischen, politischen, religibsen, kiinstle- 
 rischen oder philosophischen, kurz ideologischen Formen, worin 
 sich die Menschen dieses Konflikts bewusst werden und ihn 
 ausfechten." — Zur Kritik der Politischen Oekonomie, Erstes 
 Heft (1859), p. v. 
 
46 ECONOMIC INTERPRETATION 
 
 of historical interpretation, that the continental 
 writers in general realized the significance of the 
 theory ; and it is only since that time that the 
 heated controversy has spread throughout 
 the scientific world. 1 Since neither the earlier 
 works of 1847 or 1859 nor any of the later vol- 
 umes of Capital have as yet been translated, 
 the English-speaking public has had only slight 
 opportunity of grasping the real significance of 
 Marx's theory or its corollaries. 
 
 In the first volume of Capital the. only passage 
 in which Marx definitely refers to his funda- 
 mental theory is tucked away in a note. 2 Here 
 he compares his theory to that of Darwin, and 
 insists that it is based on the only really mate- 
 rialistic method : — 
 
 " A critical history of technology would show 
 how little any of the inventions of the eigh- 
 teenth century are the work of a single indi- 
 vidual. Hitherto there has been no such book. 
 Darwin has interested us in the history of 
 Nature's technology, i.e., in the formation of 
 the organs of plants and animals, which organs 
 serve as instruments of production for sustain- 
 
 1 In the socialistic circles the controversy may be said to date 
 from 1890, when the matter was taken up in the discussions of 
 the programme of the Social Democratic party in Germany. 
 
 2 Capital (English translation), II, p. 367, note I. 
 
DEVELOPMENT OF THE THEORY 47 
 
 ing life. Does not the history of the productive 
 organs of man, of organs that are the material 
 basis of all social organization, deserve equal 
 attention ? And would not such a history be 
 easier to compile, since, as Vico says, human 
 history differs from natural history in this, that 
 we have made the former, but not the latter? 
 Technology discloses man's mode of dealing 
 with Nature, — the process of production by 
 which he sustains his life, and thereby also lays 
 bare the mode of formation of his social rela- 
 tions, and of the mental conceptions that flow 
 from them. Every history of religion, even, 
 that fails to take account of this material basis, 
 is uncritical. It is, in reality, much easier to 
 discover by analysis the earthly core of the 
 misty creations of religion, than it is, con- 
 versely, to develop from the actual relations 
 of life the corresponding celestialized forms of 
 those relations. The latter is the only material- 
 istic, and therefore the only scientific method. 
 The weak points in the abstract materialism 
 of natural science, a materialism that excludes 
 history and its process, are at once evident 
 from the abstract and ideological conceptions 
 of its spokesmen, whenever they venture beyond 
 the bounds of their own specialty." 
 
48 ECONOMIC INTERPRETATION 
 
 It is in the third volume of Capital that 
 Marx gives a definite statement of his theory, 
 with some necessary qualifications, inattention 
 to which is partly responsible for some of the 
 objections to the theory. With this extract we 
 may fitly close the series of quotations : 1 
 
 " It is always the immediate relation of the 
 owner of the conditions of production to the 
 immediate producers — a relation each of whose 
 forms always naturally corresponds to a given 
 stage in the methods and conditions of labor, 
 and thus in its social productivity — in which 
 we find the innermost secret, the hidden basis 
 of the entire social structure, and thus also of 
 the political forms. . . . This does not prevent 
 
 1 " Es ist jedesmal das unmittelbare Verhaltniss der Eigen- 
 thiimer der Produktionsbedingungen zu den unmittelbaren Pro- 
 ducenten — ein Verhaltniss, dessen jedesmalige Form stets 
 naturgemass einer bestimmten Entwicklungsstufe der Art und 
 Weise der Arbeit, und daher ihrer gesellschaftlichen Produktiv- 
 kraft entspricht — worin wir das innerste Geheimniss, die verbor- 
 gene Grundlage der ganzen gesellschaftlichen Construction, und 
 daher auch die politische Form der Souveranetats- und Abhan- 
 gigkeitsverhaltnisse, kurz, der jedesmaligen specifischen Staatsform 
 finden. Dies hindert nicht, dass dieselbe bkonomische Basis — 
 dieselbeden Hauptbedingungennach — durch zahllos verschiedene 
 empirische Umstande, Naturbedingungen, Racenverhaltnisse, von 
 aussen wirkende geschichtlichen Einfiusse u. s. w. unendliche 
 Variationen und Abstufungen in der Erscheinung zeigen kann, 
 die nur durch Analyse dieser empirisch gegebenen Umstande zu 
 begreifen sind." — Das Kapital, III, 2, pp. 324, 325. 
 
DEVELOPMENT OF THE THEORY 49 
 
 this same economic basis in all its essentials 
 from showing in actual life endless variations 
 and gradations due to various empirical facts, 
 natural conditions, racial relations, and external 
 historical influences without number — all of 
 which can be comprehended only by an analysis 
 of these conditions as they are disclosed by 
 experience." 
 
CHAPTER IV 
 
 THE ORIGINALITY OF THE THEORY 
 
 We have now studied the genesis and devel- 
 opment of the doctrine, chiefly in the words of 
 Marx himself. But, it will be asked, how far 
 is the theory of economic interpretation original 
 with Marx? 
 
 There are, indeed, abundant traces of the con- 
 nection between economic causes and legal, 
 political or social conditions to be found in the 
 literature of earlier centuries. Harrington, for 
 instance, in his Oceana, tells us that the form 
 of government depends upon the tenure and dis- 
 tribution of land. The very foundation of his 
 whole theory is : " Such as is the proportion or 
 ballance of dominion or property in Land, such 
 is the nature of the Empire." 1 In the eighteenth 
 
 1 " If one man," he proceeds, " be sole Landlord, or over- 
 balance the people, he is Grand Signior . . . and his Empire is 
 Absolute Monarchy. If the Few or a Nobility overballance the 
 people, it makes the Gothic ballance and the Empire is mixed 
 Monarchy (as in Spain and Poland). If the whole people be 
 Landlords, or hold the lands so divided among them that no one 
 
 5° 
 
ORIGINALITY OF THE THEORY 51 
 
 century we find writers, like Germain Gamier 1 
 in France, Dalrymple 2 in England and Moser 3 
 in Germany, who emphasized the influence of 
 property in land on politics. Especially in the 
 socialists of the second quarter of the nineteenth 
 century we find not infrequent allusions to a 
 similar point of view. Fourier, St. Simon, 
 Proudhon and Blanc naturally call attention to 
 the influence of economic conditions on the 
 immediate politics of the day, 4 and the first 
 foreign historian of French socialism, Lorenz 
 von Stein, elaborated some of their ideas by 
 positing the general principle of the subordina- 
 
 man or number of men . . . overbalance them, the Empire 
 (without the interposition of force) is a Commonwealth." — The 
 Commonwealth of Oceana (1656), p. 4. 
 
 1 In his De la Propriete dans ses Rapports avec le Droit 
 Politique (1792). 
 
 2 In his An Essay toward a General History of Feudal Prop- 
 erty in Great Britain (1757). 
 
 3 In his Vorrede zur Osnabruckschen Geschichte (1768). See 
 the interesting article, "Justus Moser als Geschichtsphilosoph," 
 von P. Kampffmeyer, in Die Neue Zeit, XVII, 1, pp. 516- 
 524. 
 
 4 As to St. Simon, see P. Barth in Die Zukunft, IV, 449, and 
 the same writer's Die Philosophie der Geschichte als Soziologie 
 (1897). Cf. The French Revolution and Modern French Social- 
 ism, by Jessica Peixotto (1901), pp. 219-221. Both Barth and 
 Peixotto exaggerate the influence of St. Simon. For Fourier and 
 Le Chevalier, see Wenckstern's book on Marx (1896), pp. 250, 
 251. For Proudhon, see Muhlberger, Zur Kentniss des Marxis- 
 mus (1894). 
 
52 ECONOMIC INTERPRETATION 
 
 tion of the political to the economic life. 1 The 
 early minor German socialists, such as Marr, 
 Hess and Griin, 2 as well as here and there other 
 writers, 3 express themselves sporadically in like 
 manner. But if originality can properly be 
 claimed only for those thinkers who not alone 
 formulate a doctrine but first recognize its im- 
 portance and its implications, so that it thereby 
 becomes a constituent element in their whole 
 scientific system, there is no question that Marx 
 must be recognized as in the truest sense the 
 
 1 Stein's views were first advanced in 1842, in Der Socialisimis 
 und Communismus des heutigen Frankreichs. In a later work, 
 published in 1850, Gescliichte der socialen Bewegung in Frank- 
 reich, he developed more fully his idea of society as the com- 
 munity in its economic organization, and of social, i.e., economic 
 growth as the basis of legal and political life. This produced 
 a decided effect on Gneist, and through him on much of 
 modern German historical jurisprudence. But Stein's doctrine 
 exerted little influence on economic thought or historical in- 
 vestigation in general. 
 
 2 For some of their statements, see G. Adler, Die Grundlagen 
 der Karl Marifschen Kritik der Bestehenden Volkswirthschaft 
 (1887), pp. 214-226. For the more general views of these Ger- 
 man socialists, see G. Adler, Die Geschichte der ersten Social- 
 politischen Arbeiterbewegung in Deutschland (1885). 
 
 3 Cf. a remarkable paragraph in the work of the deservedly 
 forgotten Lavergne-Peguilhen, Die Bewegiings- mid Prodnktions- 
 gesetze (1838), p. 225, to which Brentano first called attention. 
 Mehring has pointed out the slight importance to be attached to 
 this advocate of the feudal-romantic school, in his Die Lessing 
 Legende nebst einem Anhange liber den Historischen Materialismus 
 (1893), pp, 435-441- 
 
ORIGINALITY OF THE THEORY 53 
 
 originator of the economic interpretation of 
 history. 1 
 
 It may be asked, finally, how far the other 
 founders of scientific socialism, Rodbertus and 
 Lassalle, should share with Marx the honor of 
 originating the doctrine of economic interpreta- 
 tion of history. The question of the priority 
 of view as between Marx and Rodbertus was 
 at one time hotly discussed. 2 The controversy, 
 however, turned chiefly on the specifically 
 socialistic doctrines of labor and surplus value, 
 which have in their essentials nothing to do 
 with the economic interpretation of history. 
 Even as to that point, however, the friends of 
 Rodbertus now concede that the charges origi- 
 nally preferred against Marx were false. 8 So 
 
 1 Cf. Woltmann, Der Historische Materialismus (1900), p. 
 24. 
 
 2 The charge that Marx copied from Rodbertus was first made 
 by R. Meyer, Emancipationskampf des Vierten Standes (1875), 
 I, 43 ; 2d ed., 1882, pp. 57 and 83, and was repeated by Rodbertus 
 himself in a letter to J. Zeller in the Tiibinger Zeitschrift fur die 
 Gesammte Staatswissenschaft (1879), P- 21 9- Cf. a ^ s0 Brief e und 
 Socialpolitische Aufsatze von Dr. Rodbertics-fagetzow, heraus- 
 gegeben von Dr. R. Meyer, n.d. [1880], p. 134. The charge 
 was triumphantly refuted by Engels in the preface to Das Elend 
 der Philosophie, Deutsch von E. Bernstein (1885), and more 
 fully in the preface to the second (German) volume of Das 
 Kapital (1885), pp. viii-xxi. 
 
 3 Cf. A. Wagner, in the Introduction to the third volume of 
 Aus dem Literarischen Nachlass von Dr. Karl Rodbertus-Jagetzow, 
 
54 ECONOMIC INTERPRETATION 
 
 far as the economic interpretation of history is 
 concerned, there is no claim that Rodbertus 
 originated or even maintained the doctrine. 1 
 
 With reference to Lassalle, it would hardly 
 be necessary to refer to the matter at all, were 
 it not for the fact that a prominent English 
 economist has recently implied that the doc- 
 trine is first found in his writings. 2 As a 
 matter of fact, it is now conceded by the ablest 
 students of socialism that Lassalle originated 
 none of the important points in theory, even 
 though it is true that without the marvellous 
 practical sagacity of Lassalle the world at large 
 would probably have heard but little of Marx 
 and Rodbertus. The International, in the 
 hands of Marx, was a fiasco ; practical socialism, 
 in the hands of Lassalle, became a powerful 
 
 herausgegeben von Adolph Wagner und Theophil Kozak (1885), 
 p. xxxi. 
 
 1 Cf. A. Wagner, in his Grundlegung der Politischen Oekonomie, 
 II (3d ed., 1894), pp. 281, 282, where Marx is described as pro- 
 ceeding "einseitig entwicklungsgesetzlich, mit den Hilfsmitteln 
 seiner materialistischen Geschichtsauffassung," while Rodbertus 
 argues " ohne die geschichtlichen und dialectischen Hilfsmittel 
 von Marx." Cf. also the essay of Kautsky "Das 'KapitaT von 
 Rodbertus," in Die Nene Zeit, II (1884), p. 350. 
 
 2 Bonar, Philosophy and Political Economy (1893), pp. 350, 
 35 1, quoting from Lassalle's Workmeti's Programme of 1862. All 
 the points mentioned by Mr. Bonar are found in Marx's books of 
 1847 and 1859. 
 
ORIGINALITY OF THE THEORY 55 
 
 political and social force. But while Lassalle 
 was a great agitator and statesman, he was not 
 a constructive thinker — in economics, at all 
 events ; and while Marx was a failure in prac- 
 tical life, he was a giant as a closet philosopher. 1 
 
 1 It is much to be regretted that Professor Foxwell, in his 
 introduction to the translation of Menger's The Right to the Whole 
 Produce of Labour (1899), seems to lend credence to Menger's 
 contention that Marx borrowed his theory of surplus value from 
 the English socialists, without giving them credit. As every one 
 who is familiar with the subject knows, both parts of this state- 
 ment are erroneous. It was Marx himself who first called 
 attention in detail to the English socialists, quoting extensively 
 from Hopkins, Thompson, Edwards and Bray in La Misere de la 
 Philosophie (pp. 49-62) ; and to compare their theories to that of 
 Marx is like comparing the political economy of Petty to that of 
 Ricardo. It must be remembered, however, that the author 
 of the book in question is not the economist Carl Menger, but his 
 brother Anton, the jurist. 
 
 Professor Ashley must have had these passages in mind when 
 he was misled into the hasty characterization of Marx as " a man 
 of great ability, but neither so learned nor so original as he 
 appeared." See his Surveys, Historic and Economic (1900), 
 p. 25. Those who really know their Marx have no such opinion. 
 Bohm-Bawerk, one of the chief opponents of Marx's theory of 
 surplus value, has often expressed high admiration for his powers, 
 and goes so far as to call him a " philosophical genius " and " an 
 intellectual force of the highest order." See Karl Marx and the 
 Close of his System, by Bohm-Bawerk (1898), pp. 148, 221. If 
 for no other reason than for his admirable and profound treat- 
 ment of the money problem in the second (German) volume of 
 Das Kapital, Marx would occupy a prominent place in the 
 history of economics. His earlier works show that he was equally 
 strong in other fields of human thought. As for his learning, it 
 may suffice to call attention to the fact that Marx was the first 
 
56 ECONOMIC INTERPRETATION 
 
 Whether or no we agree with Marx's analysis 
 of industrial society, and without attempting 
 as yet to pass judgment upon the validity of 
 his philosophical doctrine, it is safe to say that 
 no one can study Marx as he deserves to be 
 studied — and, let us add, as he has hitherto 
 not been studied in England or America — 
 without recognizing the fact that, perhaps with 
 the exception of Ricardo, there has been no 
 more original, no more powerful, and no more 
 acute intellect in the entire history of economic 
 science. 
 
 writer to study in detail the history of early English economic 
 thought, as well as the first economist to make an effective 
 investigation based on the English blue books. 
 
CHAPTER V 
 
 THE ELABORATION OF THE THEORY 
 
 In the preceding chapters we have studied 
 the genesis and the early formulation of the 
 doctrine of historical materialism. Before pro- 
 ceeding to discuss its applications it may be 
 well to obviate some misunderstanding, by 
 directing attention to what might be called 
 not so much the modifications, as the further 
 elaboration, of the theory. 
 
 In saying that the modes of production con- 
 dition all social life, Marx sometimes leads us 
 to believe that he refers only to the purely 
 technical or technological modes of production. 
 There are, however, abundant indications in 
 his writings to show that he really had in mind 
 the conditions of production in general. 1 This 
 becomes especially important in discussing the 
 earlier stages of civilization, where great changes 
 
 1 The criticisms of Masaryk, Die Philosophischen und Sociolo- 
 gischen Grundlagen des Marxismus (1899), pp. 99-100, and of 
 Weisengriin, Der Marxismus und das Wesen der Sozialen Frage 
 (1900), p. 86, on this point are without foundation. 
 
 57 
 
58 ECONOMIC INTERPRETATION 
 
 occurred in the general relations of production, 
 without much specific alteration in the tech- 
 nical processes. The younger Marxists have 
 devoted much time and ability to the elucida- 
 tion of this point. 
 
 In the first place, even though it is claimed 
 that changes in technique are the causes of 
 social progress, we must be careful not to take 
 too narrow a view of the term. The adherents 
 of the theory point out that when we speak of 
 technique in social life we must include not 
 only the technical processes of extracting the 
 raw material and of fashioning it into a finished 
 product, but also the technique of trade and 
 transportation, the technical methods of busi- 
 ness in general, and the technical processes by 
 which the finished product is distributed to the 
 final consumer. Marx intimated this repeat- 
 edly, and Engels has stated it clearly in a let- 
 ter, in which he sums up the ideas for which he 
 and Marx contended : — 
 
 " We understand by the economic relations, 
 which we regard as the determining basis of 
 the history of society, the methods by which 
 the members of a given society produce their 
 means of support and exchange the products 
 among each other, so far as the division of labor 
 
ELABORATION OF THE THEORY 59 
 
 exists. The whole technique of production and 
 of transportation is thus included. Furthermore, 
 this technique, according to our view, deter- 
 termines the methods of exchange, the dis- 
 tribution of products and, hence, after the 
 dissolution of gentile society, the division of 
 society into classes, the relations of personal 
 control and subjection, and thus the existence of 
 the state, of politics, of law, etc. . . . Although 
 technique is mainly dependent on the condition 
 of science, it is still more true that science de- 
 pends on the condition and needs of technique. 
 A technical want felt by society is more of an 
 impetus to science than ten universities." * 
 
 1 " Unter den okonomischen Verhaltnissen, die wir als bestim- 
 mende Basis der Geschichte der Gesellschaft ansehen, verstehen 
 wir die Art und Weise, worin die Menschen einer bestimmten 
 Gesellschaft ihren Lebensunterhalt produzieren und die Produkte 
 untereinander austauschen (soweit Teilung der Arbeit besteht). 
 Also die gesamte Technik der Produktion und des Transports ist 
 da einbegriffen. Diese Technik bestimmt nach unserer Auffassung 
 auch die Art und Weise des Austausches, weiterhin die Verteilung 
 der Produkte und damit, nach der Auflbsung der Gentilgesell- 
 schaft, auch die Einteilung der Klassen, damit die Herrschafts- 
 und Knechtschaftsverhaltnisse, damit Staat, Politik, Recht, etc. 
 Wenn die Technik, wie sie sagen, ja grosstenteils vom Stande der 
 Wissenschaft abhangig ist, so noch weit mehr dieses vom Stande 
 und den Bedurmissen der Technik. Hat die Gesellschaft ein 
 technisches Bediirfhiss, so hilft das die Wissenschaft mehr voran 
 als zehn Univeisitaten." — Letter of 1894 in Der Sozialistische 
 Akademiker (1895), p. 373. Reprinted in L. Woltmann, Der 
 Historische Materialismns (1900), p. 248. 
 
60 ECONOMIC INTERPRETATION 
 
 The term " technical " must thus be broadened 
 to include the whole series of relations between 
 production and consumption. It is for this 
 reason that we speak not so much of the tech- 
 nical interpretation of history — which would 
 lead to misunderstanding — as of the economic 
 interpretation of history.- 
 
 The originators of the theory, moreover, go 
 still further. When they speak of the material- 
 istic or economic conception of history, they 
 not only refuse to identify " economic " with 
 " technical " in the narrow sense, but they do 
 not even mean to imply that " economic " ex- 
 cludes physical factors. It is obvious, for in- 
 stance, that geographical conditions, to some 
 degree and under certain circumstances, affect 
 the facts of production. To the extent that 
 Buckle pointed this out, he was in thorough 
 accord with Marx; but the geographical condi- 
 tions, as Marx has himself maintained, form 
 only the limits within which the methods of 
 production can act. While a change of geo- 
 graphical conditions may prevent the adoption 
 of new methods of production, precisely the 
 same geographical conditions are often com- 
 patible with entirely different methods of pro- 
 duction. Thus, Marx tells us: — 
 
ELABORATION OF THE THEORY 61 
 
 " It is not the mere fertility of the soil, but 
 the differentiation of the soil, the variety of its 
 natural products, the changes of the seasons, 
 which form the physical basis for the social 
 division of labor, and which, by changes in the 
 natural surroundings, spur man on to the mul- 
 tiplication of his wants, his capabilities, his 
 means and modes of labor. It is the necessity 
 of bringing a natural force under the control 
 of society, of economizing, of appropriating or 
 subduing it on a large scale by the work of 
 man's hand, that first plays the decisive part 
 in the history of industry." 1 
 
 He goes on to explain, however, that "favor- 
 able natural conditions alone give us only the 
 possibility, never the reality," of definite eco- 
 nomic methods of production and distribution 
 of wealth. In the same way, Engels concedes 
 that the geographical basis must be included in 
 enumerating the economic conditions, but con- 
 tends that its importance must not be exagger- 
 ated. 
 
 This is, however, by no means the most 
 important elaboration of the theory. In the 
 interval that elapsed between the first state- 
 ment of the theory in the forties and the death 
 
 1 Capital (English translation), p. 523. 
 
62 ECONOMIC INTERPRETATION 
 
 of Marx, the founders of the doctrine had little 
 reason to moderate their statements. After the 
 death of Marx, however, and especially when 
 the theory began to be actively discussed in the 
 social-democratic congresses, the extreme claims 
 of the orthodox Marxists began to arouse dis- 
 sent even in the ranks of the socialists them- 
 selves. Partly as a result of this, partly because 
 of outside criticism, Engels now wrote a series 
 of letters in which he endeavored to phrase his 
 statement of the theory so as to meet some of 
 the criticisms. In these letters 1 he maintained 
 that Marx had often been misunderstood, and 
 that neither he himself nor Marx ever meant to 
 claim an absomte validity for economic consid- 
 erations to the exclusion of all other factors. 
 He pointed out that economic actions are not 
 only physical actions, but human actions, and 
 that a man acts as an economic agent through 
 the use of his head as well as of his hands. 
 
 1 Engels's letters, written to various correspondents between 
 1890 and 1894, appeared originally in two newspapers, the 
 Leipziger Volkszeitung (1895), no. 250, and Der Sozialistische 
 Akademiker, October 1 and 15, 1895. They have been reprinted, 
 although not all of them in any one place, by Woltmann, Der 
 Historische Materialis7nus (1900), pp. 242-250 ; by Masaryk, Die 
 Grundlagen des Marxismus (1899), pp. 104; by Mehring, 
 Geschichte der Deutschen Sozialdemokratie, zweiter Theil (2d ed.), 
 p. 556; and by Greulich, Ueber die Materialistische Geschichts- 
 auffassung (1897), p. 7. 
 
ELABORATION OF THE THEORY 63 
 
 The mental development of man, however, is 
 affected by many conditions ; at any given time 
 the economic action of the individual is influ- 
 enced by his whole social environment, in which 
 many factors have played a role. Engels con- 
 fessed that Marx and he were " partly responsi- 
 ble for the fact that the younger men have 
 sometimes laid more stress on the economic side 
 than it deserves," and he was careful to point out 
 that the actual form of the social organization is 
 often determined by political, legal, philosophi- 
 cal and religious theories and conceptions. In 
 short, when we read the latest exposition of 
 their views by one of the founders themselves, it 
 almost seems as if the whole theory of economic 
 interpretation had been thrown overboard. 
 
 It would be a mistake, however, to suppose 
 that these concessions, undeniably significant 
 as they are, involved in the minds of the leaders 
 an abandonment of the theory. Engels con- 
 tinued to emphasize the fundamental signifi- 
 cance of the economic life in the wider social 
 life. The upholders of the doctrine remind us 
 that, whatever be the action and reaction of 
 social forces at any given time, it is the condi- 
 tions of production, in the widest sense of the 
 term, that are chiefly responsible for the basic 
 
64 ECONOMIC INTERPRETATION 
 
 permanent changes in the condition of society. 
 Thus, Engels tells us that we must broaden 
 our conception of the economic factor so as 
 to include among the economic conditions, not 
 only the geographical basis, but the actually 
 transmitted remains of former economic changes, 
 which have often survived only through tradi- 
 tion, or vis inertice, as well as the whole exter- 
 nal environment of this particular form. He 
 even goes so far as to declare the race itself 
 to be an economic factor. And while he still 
 stoutly contends that the political, legal, reli- 
 gious, literary and artistic development rests on 
 the economic, he points out that they all react 
 upon one another and on the economic foun- 
 dation. " It is not that the economic situation 
 is the cause, in the sense of being the only 
 active agent, and that everything else is only a 
 passive result. It is, on the contrary, a case of 
 mutual action on the basis of the economic 
 necessity, which in last instance always works 
 itself out." 1 
 
 1 " Ferner sind einbegriffen unter den okonomischen Verhalt- 
 nissen die geographische Grundlage, worauf diese sich abspielen, 
 und die thatsachlich uberlieferten Reste friiherer dkonomischer 
 Entwicklungsstufen, die sich forterhalten haben, oft nur durch 
 Tradition oder vis inertiae, naturlich auch das diese Gesellschafts- 
 form nach aussenhin umgebende Milieu. . . . 
 
 " Wir sehen die okonomischen Bedingungen als das in letzter 
 
ELABORATION OF THE THEORY 65 
 
 A controversy that has arisen since Engels's 
 death may serve to bring out the thought more 
 clearly. A number of suggestive writers, of 
 whom Gumplowicz 1 is perhaps the most impor- 
 tant, have attempted to explain some of the 
 leading facts in human development by the 
 existence of racial characteristics and race con- 
 tests. Yet we now have an interesting work 
 by a Frenchman, who does not even profess 
 himself an advocate of the economic interpreta- 
 tion of history, maintaining, with some measure 
 of success, that the majority of different racial 
 characteristics are the results of socio-economic 
 changes which are themselves referable to 
 physico-economic causes. Demolins, the chief 
 representative to-day of the school of LePlay, 
 has — at least, so far as appears from his writ- 
 ings — never even heard of Marx or his theory, 
 and we find in his work very little of the detail 
 
 Instanz die geschichtliche Entwicklung Bedingende an. Aber 
 die Rasse ist selbst ein okonomischer Faktor. . . . Diepolitische, 
 rechtliche, philosophische, religiose, litterarische, kunstlerische, 
 etc., Entwicklung beruht auf der Skonomischen. Aber sie alle 
 reagieren auch auf einander und auf der okonomischen Basis. 
 Es ist nicht, dass die okonomische Lage Ursache, allein aktiv ist 
 und alles andere nur passive Wirkung. Sondern es ist Wechsel- 
 wirkung auf Grundlage der in letzter Instanz stets sich durch- 
 setzenden okonomischen Notwendigkeit. . . ." — Letter of 1 894, 
 Der Sozialistische Akademiker. 
 1 Der Rassenkampf. 
 
66 ECONOMIC INTERPRETATION 
 
 of the class conflict which primarily interested 
 the socialists. But while Demolins * reverts in 
 essence to what might be called the commercio- 
 geographical explanation of history, he is care- 
 ful to point out how the conditions of physical 
 life affect the methods and relations of produc- 
 tion, and how these in turn are largely respon- 
 sible for the differentiation of mankind into 
 the racial types that have played a role in his- 
 tory. Thus, from his point of view, the race is 
 largely an economic product, and we begin to 
 understand what Engels meant when he declared 
 the race itself to be an economic factor. 
 
 The theory of economic interpretation thus 
 expounded by Engels must be considered 
 authoritative. He tells us that Marx never 
 really regarded the situation in any other light. 
 Nevertheless, it cannot be denied that there 
 are passages in Marx which seem to be more 
 extreme, and which represent the doctrine in 
 that cruder form which is so frequently met 
 with among his uncritical followers. We are 
 bound, however, to give him the benefit of the 
 doubt, and we must not forget that when a new 
 theory supposed to involve far-reaching prac- 
 
 1 Edmond Demolins, Continent la Route cree le Type Social, 
 Essai de Geographie Sociale, n.d. [1901]. 
 
ELABORATION OF THE THEORY 67 
 
 tical consequences is first propounded, the 
 apparent needs of the situation often result in 
 an overstatement, rather than an understate- 
 ment, of the doctrine. 
 
 We understand, then, by the theory of eco- 
 nomic interpretation of history, not that all his- 
 tory is to be explained in economic terms alone, 
 but that the chief considerations in human 
 progress are the social considerations, and that 
 the important factor in social change is the 
 economic factor. Economic interpretation of 
 history means, not that the economic relations 
 exert an exclusive influence, but that they 
 exert a preponderant influence in shaping the 
 progress of society. 
 
 So much for a preliminary statement of the 
 real content of the economic conception of his- 
 tory, as explained and elaborated by the found- 
 ers themselves. In a subsequent chapter we 
 shall revert to this point and attempt to analyze 
 somewhat more closely the actual connection 
 between the economic and the wider social 
 relations of mankind. 
 
CHAPTER VI 
 
 RECENT APPLICATIONS OF THE THEORY 
 
 Let us now proceed to study some of the 
 applications that have been made of the theory 
 of the economic interpretation of history. We 
 can pursue this study without prejudicing the 
 final decision as to the truth of the doctrine in 
 its entirety ; for it is obvious that we may refuse 
 to admit the validity of the theory as a philo- 
 sophical explanation of progress as a whole, 
 and yet be perfectly prepared to admit that 
 in particular cases the economic factor has 
 played an important role. It is natural, how- 
 ever, that the economic influence in any given 
 set of facts should be emphasized primarily 
 by those whose general philosophical attitude 
 would predispose them to search for economic 
 causes. It will not surprise us, then, to find 
 that much good work in this direction has been 
 accomplished by the originators of the theory 
 and their followers. 
 
 Marx himself made no mean contribution to 
 
 68 
 
APPLICATIONS OF THE THEORY 69 
 
 the facts. Some of his statements are erroneous, 
 and not a few of his historical explanations are 
 farfetched and exaggerated ; but there remains 
 a considerable substratum of truth in his con- 
 tributions to the subject. Of these contribu- 
 tions the most familiar is the account of the 
 transition from feudal to modern society, due 
 to the genesis in the seventeenth century of 
 capital as a dominant industrial factor and to 
 the industrial revolution of the eighteenth cen- 
 tury. It was Marx who first clearly pointed 
 out the nature of the domestic system and its 
 transformation into the factory system of our 
 age, with the attendant change from the local 
 to the national market, and from this in turn 
 to the world market. It was Marx, again, who 
 called attention to the essential difference 
 between the economic life of classic antiquity 
 and that of modern times, showing that, while 
 capital played by no means an insignificant 
 role in ancient times, it was commercial and 
 not industrial capital, and that much of Greek 
 and Roman history is to be explained in the 
 light of this fact. It was Marx, too, who first 
 disclosed the economic forces which were chiefly 
 responsible for the political changes of the mid- 
 dle of the nineteenth century. And, finally, 
 
70 ECONOMIC INTERPRETATION 
 
 while Marx had originally devoted compara- 
 tively little attention to primitive civilization, 
 we now know that in his manuscript notes he 
 applied his doctrine in a suggestive way to the 
 very first stages of social evolution. 1 
 
 It is perhaps in the early history of mankind 
 that the most signal additions to our knowl- 
 edge have been made by recent writers. The 
 pioneer in this field was our great compatriot 
 Morgan. Morgan was really the first to explain 
 the early forms of human association and to 
 trace society through the stages of the horde, 
 the clan, the family and the state. Moreover, 
 although he did not work it out in detail or 
 give his theory any name, there is no doubt 
 that he independently advanced the doctrine 
 of the economic interpretation of history, with- * 
 out being aware of the fact that it applied to 
 anything but the early stages. Because of the 
 great neglect by subsequent writers of this part 
 of Morgan's achievements, it is necessary to 
 call attention to it at somewhat greater length. 
 
 Morgan starts out with the guarded state- 
 ment that it is " probable that the great epochs 
 
 1 These notes are used by Engels in his Der Ursftrung der 
 Familie, des Privateigenthums und des Staats (1884). See 
 Preface to first edition. 
 
APPLICATIONS OF THE THEORY 71 
 
 of human progress have been identified more 
 or less directly with the enlargement of the 
 sources of subsistence." 1 The great epochs of 
 which he speaks, however, cease, in his opinion, 
 with the introduction of field agriculture. 2 He 
 discusses the assumption of original promiscuity 
 in the human race, and maintains that, while it 
 probably existed at first, it is not likely that it 
 was long continued in the horde, because the 
 latter would break up into smaller groups for 
 subsistence and fall into consanguine families. 3 
 In his treatment of the dependence of early 
 man upon the physical characteristics of the 
 food supply, he takes up in turn the early 
 natural subsistence upon fruits and roots, the 
 connection of fish subsistence with savagery 
 and migration, the relations between the dis- 
 covery of cereals, the cessation of cannibalism 
 and the reliance on a meat and milk diet, the 
 connection between the domestication of ani- 
 mals and pastoral society, and, finally, the 
 transition of what he calls horticulture into 
 agriculture. 4 In all this we seem to be get- 
 
 1 Lewis H. Morgan, Ancient Society (1877). The following 
 quotations are from the edition of 1878, p. 19. Cf. p. 9. 
 
 2 Ibid., p. 26. 3 Ibid., p. 418. 
 
 4 Ibid., pp. 20-26. Morgan's " horticulture " is really the 
 same as the " hoeculture " or " hackculture " which has recently 
 
72 ECONOMIC INTERPRETATION 
 
 ting little beyond Buckle. What differentiates 
 Morgan entirely from Buckle, however, is the 
 fact that, while the latter confines himself to 
 the simple problem of production, Morgan 
 works out the influence of all these factors 
 upon the social and political constitution and 
 traces the transformation of society to changes 
 in the form and conditions of property. 
 
 Although Morgan did not succeed in making 
 thoroughly clear the economic causes of the 
 early tracing of descent from the female line, 
 he did call attention to the connection between 
 the growth of private property and the evolu- 
 tion of the horde into the clan or, as he calls 
 it, the gens. 1 He elucidated still more clearly 
 the causes of the change of descent from the 
 female to the male line, showing how it went 
 hand in hand with the extension of the insti- 
 tution of private property. 2 The account of 
 
 been heralded by German writers, like Hahn and Schmoller, 
 as a great discovery of their compatriots. Both terms are ill 
 chosen. 
 
 1 " With the institution of the gens came in the first great 
 rule of inheritance which distributed the effects of a deceased 
 person among his gentiles." — Ancient Society, p. 528. 
 
 2 " After domestic animals began to be reared in flocks and 
 herds, becoming thereby a source of subsistence as well as 
 objects of individual property, and after tillage had led to the 
 ownership of houses and lands in severalty, an antagonism would 
 be certain to arise against the prevailing form of gentile inheri- 
 
APPLICATIONS OF THE THEORY 73 
 
 the development of slavery 1 is perhaps not so 
 novel ; but the suggestion of an economic basis 
 for the transition from the clan to the patriar- 
 chal family 2 and from the polygamic to the 
 monogamic family 8 was as striking as it was 
 original. 
 
 While Morgan was in no way an economist, 
 
 tance, because it excluded the owner's children whose paternity- 
 was becoming more assured, and gave his property to his gentile 
 kindred. A contest for a new rule of inheritance, shared in by 
 the fathers and their children, would furnish a motive sufficiently 
 powerful to effect the change. With property accumulating in 
 masses, and assuming permanent forms, and with an increased 
 proportion of it held by individual ownership, descent in the 
 female line was certain of overthrow, and the substitution of the 
 male line equally assured. Such a change would leave the in- 
 heritance in the gens as before, but it would place children in 
 the gens of their father and at the head of the agnatic kindred." 
 
 — Lewis H. Morgan, Ancient Society (1877), pp. 345-346. Cf. 
 
 P- 53 1 - 
 
 1 Ibid., p. 341, et passim. 
 
 2 The patriarchal family is summed up as " an organization of 
 servants and slaves under a patriarch for the care of flocks and 
 herds, for the cultivation of lands and for mutual protection and 
 subsistence. Polygamy was incidental." — Ibid., p. 504. Cf. 
 pp. 465-466. 
 
 3 " The growth of property and the desire for its transmission 
 to children was in reality the moving power which brought in 
 monogamy to insure legitimate heirs and to limit their number 
 to the actual progeny of the married pair." — Ibid., p. 477. 
 
 "As finally constituted, the monogamian family assured the 
 paternity of children, substituted the individual ownership of real 
 as well as of personal property for joint ownership, and an 
 exclusive inheritance by children instead of agnatic inheritance." 
 
 — Ibid., p. 505. Cf. p. 389. 
 
74 ECONOMIC INTERPRETATION 
 
 and had probably never heard either of Marx 
 or of the historical school of economics, his 
 final conclusion as to the relations of private 
 property to social welfare is in substantial 
 agreement with modern views. He tells us 
 that 
 
 "since the advent of civilization the out- 
 growth of property has been so immense, its 
 forms so diversified, its uses so expanding and 
 its management so intelligent in the interests 
 of its owners, that it has become, on the part 
 of the people, an unmanageable power. The 
 human mind stands bewildered in the presence 
 of its own creation. The time will come, 
 nevertheless, when human intelligence will rise 
 to the mastery over property, and define the 
 relations of the state to the property it protects 
 as well as the obligation and the limits of the 
 rights of its owners. The interests of society 
 are paramount to individual interests and the 
 two must be brought into just and harmonious 
 relations." 1 
 
 The greater part of Morgan's book as well 
 as of his other works 2 was, however, devoted 
 
 1 Ancient Society, p. 552. 
 
 2 The League of the Iroquois (1849, reprinted in 1902) ; Systems 
 of Consanguinity and Affinity of the Human Family (1871); 
 and Houses and House Life of the American Aborigines (1881). 
 
APPLICATIONS OF THE THEORY 75 
 
 to an account of the historical facts themselves, 
 rather than of their economic causes. The 
 controversy which at once sprang up in Eng- 
 land, and which has lasted almost to the 
 present time, turned well-nigh exclusively upon 
 the first set of considerations. When scientists 
 were not agreed upon the facts it would seem 
 useless to speculate about the causes of the 
 facts. The trend given to the discussion by 
 this early controversy is largely responsible for 
 the fact that until very recently writers on 
 sociology or social history have almost com- 
 pletely neglected the economic aspect of the 
 transitions which they describe. 1 But, although 
 some parts of Morgan's theory — like the 
 details of the earliest consanguine family and 
 the perhaps somewhat hasty generalization as 
 to primitive promiscuity — have been modified, 
 
 1 This is true of McLennan, Westermaarck, Starcke, Tyler, 
 Lumholtz, Post and many others. It is true also, although to 
 a somewhat less degree, of my honored colleague, Professor 
 Giddings. Almost the only passage of importance for our pur- 
 poses in his Principles of Sociology (1896) is the one on p. 266 : 
 " It seems to be an economic condition which in the lowest com- 
 munities determines the duration of marriage and probably also 
 the line of descent through mothers or fathers." Cf., however, 
 in addition, pp. 276, 288 and 296. In a more recent article 
 Professor Giddings substantially concedes that " these writers 
 [Marx and his followers] may be held to have made good their 
 main contention." — International Monthly, II (1900), p. 548. 
 
76 ECONOMIC INTERPRETATION 
 
 the substance of his account of the uterine or 
 maternal clan and of its development into the 
 tribe and the state, as well as of the dependence 
 of the transition upon changes in the forms of 
 property, have become incorporated into the 
 accepted material of modern science. 
 
 It was not, however, until the German advo- 
 cates of the economic interpretation of history- 
 took the matter up that Morgan's real impor- 
 tance was recognized. Engels published in 
 1884 his Origin of the Family, in which he 
 showed that Morgan's views marked a distinct 
 advance upon those of Bachofen and Mc- 
 Lennan, and claimed that the English archae- 
 ologRrs of the day had really adopted Morgan's 
 theory without giving him credit. Turning 
 from the account of the development to its 
 causes, Engels accepted all of Morgan's con- 
 clusions as to the early uterine society and the 
 development of monogamy, but carried them 
 one step further by combining, as he tells us, 
 Morgan and Marx. Engels ascribed the trans- 
 formation of gentile society to the first great 
 social division of labor — the separation of 
 pastoral tribes from the rest of society. This 
 in itself gave rise to intertribal exchange as a 
 permanent factor in economic life, and it was 
 
APPLICATIONS OF THE THEORY 77 
 
 not long before intertribal exchange led to 
 barter between individuals — a barter chiefly 
 in cattle and natural products. With the tran- 
 sition from common to private property in such 
 movables, the ground was prepared, on the one 
 hand, for slavery and, on the other, for the 
 downfall of the matriarchate. As private 
 property increased we find the second great 
 step in the division of labor, — the separation 
 of manual industry from agriculture. Ex- 
 change now becomes an exchange of commodi- 
 | ties, and with the economic supremacy of the 
 imale there appear the patriarchate and then 
 Ithe monogamic family. Finally, comes the 
 third step in the division of labor, — the rise of 
 the merchant class, with the use of metallic 
 money. The growth of capital, even if it be 
 mercantile capital (as against the original cattle 
 capital), ushers in a state of affairs with which 
 the old gentile organization is no longer able 
 to cope ; and thus we find the origin of the 
 political organization, the genesis of the state. 
 In Greece, in Rome and in the Teutonic races 
 of the early middle ages this transition is a 
 matter of record; but no one before Morgan 
 and Engels had been able to explain it 
 intelligibly. 
 
?8 ECONOMIC INTERPRETATION 
 
 The hints thrown out by Morgan and Engels 
 have been worked up by a number of writers, 
 few of whom can be classed as socialists. At 
 first the professed sociologists paid but little 
 attention to the matter. With Kovalevsky, in 
 1890, we begin the series of those who at- 
 tempted to prove a somewhat closer connec- 
 tion between the family and private property. 1 
 In 1896 Grosse devoted a separate volume to 
 the subject 2 and brought out some new points 
 as to the influence of economic conditions 
 upon the character of the family, especially in 
 the case of nomadic peoples and the early agri- 
 culturists. In the same year Professor Hilde- 
 brand published an admirable work on Law 
 and Custom in the Different Economic Stages, 
 in which, although not neglecting the earlier 
 phases of social life, he laid the emphasis on 
 the economic basis of the primitive agricultural 
 community. 3 For the still earlier period note- 
 worthy work has been done by Cunow. After 
 having prepared the way by a study of the sys- 
 
 1 Maxime Kovalevsky, " Tableau des origines et de revolution 
 de la famille et de la propriete," Skrifter utgifna af Lorenska 
 Stiftelsen (Stockholm, 1890). 
 
 2 Die Formen der Familie tmd die Formen der Wirthschaft 
 (1896). 
 
 3 Recht und Sitte auf den Verschiedenen Wirthschaftlichen 
 Kulturstufen, Erster Theil (1896). 
 
APPLICATIONS OF THE THEORY 79 
 
 terns of consanguinity among the Australians 1 
 Cunow published in 1898 a series of articles on 
 the economic basis of the matriarchate. 2 He 
 emphasized the essential weakness, from the 
 historical point of view, of the ordinary classi- 
 fication into hunting, pastoral and agricultural 
 stages. 3 Beginning, however, with the hunting 
 stage, Cunow maintains that the earliest form 
 of organization rests on the supremacy of the 
 man, which is not by any means the same thing 
 as the supremacy of the father; for the poly- 
 gamic or monogamic family which forms the 
 basis of the patriarchal system was of much 
 later development. In the early stages we may 
 have a uterine society — that is, a tracing of 
 descent through the mother — but we have no 
 matriarchate. 4 Cunow gives the economic rea- 
 
 1 Die Verwandschaftsorganisationen der Australneger (1894) . 
 
 2 " Die okonomischen Grundlagen der Mutterherrschaft," in 
 Die Neue Zeit, XVI, p. 1. A French version appeared in Le 
 Devenir Social, V (1898), pp. 42, 146, 330, under the title " Les 
 bases economiques du matriarcat." 
 
 3 Die Neue Zeit, XVI, p. 108. Cunow, however, does not remind 
 us that all this had been pointed out in 1884 by Dargun in his 
 admirable study, which is not so well known as it ought to be : 
 " Ursprung und Entwicklungsgeschichte des Eigenthums," in the 
 Zeitschrift fur Vergleichende Rechtswissenschaft, V, especially pp. 
 59-61. Professor Giddings, in his article in the Political Science 
 Quarterly 'for June, 1901 (XVI, 204), alludes to the older theory as 
 based on " the Mother-Goose philosophy of history." Dargun 
 and Cunow are the writers who have emancipated us. 
 
 4 Die Neue Zeit, XVI, p. 115. 
 
80 ECONOMIC INTERPRETATION 
 
 sons which explain this tracing of the descent 
 through the female, and shows how, under cer- 
 tain conditions, she becomes more sought after 
 until finally she attains such an economic im- 
 portance that the matriarchate itself develops. 1 
 Incidentally he traces the connection between 
 the female and early agriculture, and explains 
 how her growing importance, both in and out 
 of the home, exerted a decided influence upon 
 the early division of labor. The matriarchate 
 is shown very clearly to be largely an economic 
 product. 2 
 
 In 1 90 1 Cunow followed up his exposition 
 by another series of essays on " The Division 
 of Labor and the Rights of Women." s Here 
 he points out the error of the usual statement 
 that agriculture is a condition precedent to a 
 disappearance of the nomadic life. On the 
 contrary, maintains Cunow, a certain degree of 
 stationary settled activity is a condition prece- 
 dent to the transition to agriculture. 4 Agricul- 
 ture, however, may develop either out of the 
 
 1 Die Nene Zeit, XVI, pp. 141, 176, 209. 
 
 2 Ibid., pp. 238, 241. 
 
 3 " Arbeitstheilung und Frauenrecht ; zugleich ein Beitrag 
 zur materialistischen Geschichtsauffassung," in Die Neue Zeit, 
 XIX, p. 1. 
 
 4 Ibid., p. 103. 
 
APPLICATIONS OF THE THEORY 81 
 
 pastoral stage or out of the hunting stage, and 
 in each case the activity of the female is of car- 
 dinal importance. The female is not only the 
 primitive tiller of the soil, but also the creator 
 of the earliest house industry, which plays such 
 a distinctive role in primitive barter. 1 The 
 earliest division of labor rests on the principle 
 that the female attends to the vegetable suste- 
 nance, the man to the animal diet, and on this 
 fundamental distinction all the other social ar- 
 rangements are built up. Marriage, for a long 
 time, is not an ethical community of ideal inter- 
 ests, but very largely an economic or labor 
 relation. 2 
 
 Of much the same character as this investi- 
 gation are the attempts made still more re- 
 cently to supply an economic explanation for 
 the origin of totemism 3 and to study the eco- 
 nomic causes of slavery. Especially on the 
 
 1 " Arbeitstheilung und Frauenrecht ; zugleich ein Beitrag zur 
 materialistischen Geschichtsauffassung," in Die Neue Zeit, 
 XIX, pp. 152, 180. 
 
 2 Ibid., p. 276. 
 
 3 Dr. Julius Pikler : Der Ursprung des Totemismus ; ein 
 Beitrag zur Materialistischen Geschichtstheorie (Berlin, 1900). 
 A somewhat different, but equally " materialistic, 1 ' interpretation 
 has been given by Frazer, in the Fortnightly Review for 1899, 
 and by Professor Giddings, in a note on "The Origin of 
 Totemism and Exogamy " in the Annals of the American 
 Academy of Political and Social Science, XIV, p. 274. 
 
 G 
 
82 ECONOMIC INTERPRETATION 
 
 latter topic our knowledge of the early condi- 
 tions has been greatly increased by the detailed 
 study of Nieboer. 1 Nieboer, who accepts the 
 theory of the brilliant Italian economist Loria, 
 has overturned many of the former notions on 
 the subject and has studied slavery, not only, as 
 most writers have done, in the agricultural stage 
 of society, but also in the hunting, fishing and 
 pastoral stages. Coming to the later period of 
 classic antiquity, Ciccotti has shed considerable 
 light on the origin and development of slavery 
 in Greece, as well as in Rome, and has traced 
 the connection between this fundamental fact 
 and the entire political and social history. 2 
 Other writers, such as Francotte 3 and Pohl- 
 mann, 4 have considered more in detail the 
 economic status of Greece and its influence 
 on national and international conditions. 
 
 1 Dr. H. J. Nieboer: Slavery as an Industrial System (The 
 Hague, 1900). See the review of this work in the Political 
 Science Quarterly, September, 1901. 
 
 2 Ettore Ciccotti : 77 Tramonto della Schiavitic nel Mondo 
 Antico (Torino, 1899) . The suggestive sketch of the whole topic 
 by Eduard Meyer, in his address Die Sklaverei im Alterthum 
 (1898), suffers in some important points from the fact that the 
 well-known historian is only imperfectly acquainted with the 
 results of recent economic studies. 
 
 3 Francotte, D Industrie dans la Grece Ancienne (1901). 
 
 4 Pohlmann, Geschichte des Antiken Sozialismus und Commu- 
 nismus (1901). 
 
APPLICATIONS OF THE THEORY 83 
 
 In the case of Roman history the relation 
 between the land question and national pro- 
 gress has always been so obvious that such 
 historians as Nitzsch and Mommsen did not 
 have to wait for the rise of the school of eco- 
 nomic interpretation. Even in the case of 
 Rome, however, good work has since then been 
 done, especially in the imperial period, in em- 
 phasizing the controlling influence of economic 
 factors on the general devolopment. 1 So, also, 
 some neglected points in the history of Hebrew 
 antiquity have been brought out by writers like 
 Beer and Mehring. 2 
 
 When we come to more recent periods of 
 history there is an embarrassment of riches. 
 The economic forces which were instrumental 
 in shaping the transition from feudal to mod- 
 ern society are so obvious that the historians 
 have for some time been laying stress on eco- 
 nomic interpretation almost without knowing 
 it. This is true, for instance, in the treatment 
 
 1 Cf. the series of essays by Paul Ernst on " Die sozialen 
 Zustande im romischen Reiche vor dem Einfall der Barbaren," 
 in Die Neue Zeit, XI (1893), p. 2, and the suggestive book of 
 Deloume, Les Manieurs d? Argent a Rome (1892). 
 
 2 M. Beer, " Ein Beitrag zur Geschichte des Klassenkampfes 
 im hebraischen Alterthum," Die Neue Zeit, XI (1893), 1, p. 444. 
 For similar studies by Kautsky and Lafargue, see Mehring, Die 
 Lessing-Legende, p. 481. 
 
84 ECONOMIC INTERPRETATION 
 
 of the military system, which has been clearly 
 described by Biirkli in his account of the transi- 
 tion in Switzerland. 1 One of the most accom- 
 plished of Belgian historians, Des Marez, has 
 recently voiced his conviction that " no one can 
 investigate the deeper causes that have in- 
 fluenced the peoples between the Rhine and 
 the North Sea without perceiving that it is 
 above all the economic conditions, and not 
 racial, linguistic or other factors, that have 
 determined national progress." 2 
 
 The newer view has led investigators to ac- 
 centuate the economic factor not only in the 
 Crusades 3 but also in the Reformation with 
 the victory of Calvinism and Puritanism. 4 The 
 
 1 Karl Biirkli, Der Wahre Winkelried '; die Taktik der Alt en 
 Urschweizer, 1886. See especially pp. 143-184. Cf. also the 
 same author's Der Ursprung der Eidgenossenschaft aus der 
 Markgenossenschaft und die Schlacht am Morgarten, 1891. In 
 this monograph emphasis is laid on the economic origin of the 
 Swiss democracy in general. 
 
 2 G. Des Marez, Les Luttes Sociales en Flandre au Moyen 
 Age, 1900, p. 7. 
 
 3 Cf. the article by Prutz, " The Economic Development of 
 Western Europe under the Influence of the Crusades," The Inter- 
 national Monthly, IV (August, 1901), 2, p. 251. 
 
 4 See especially Engels, Der deidsche Bauemkrieg; Bernstein's 
 essay on " The Socialistic Currents during the English Revolu- 
 tion " in Die Ceschichte des Sozialisjnus in Einzeldarstellungen, 
 I, 2, and published as a separate work under the title Commu- 
 nistische und Demokratisch-socialistische Stromungen in der Eng- 
 
APPLICATIONS OF THE THEORY 85 
 
 professed historians themselves have been so far 
 influenced by the movement that Lamprecht, 
 one of the most distinguished of German schol- 
 ars, has recently made the economic factor the 
 very foundation of the entire political and social 
 development of mediaeval Germany. 1 In the 
 acrimonious discussion that this " audacious " 
 move has engendered, and which is not yet 
 concluded, the gradual triumph of the newer 
 tendency seems by no means improbable. 2 
 
 When we approach the centuries nearer our 
 own time, it has almost become a commonplace 
 to explain in economic terms the political tran- 
 sition of England in the eighteenth century, as 
 well as the French and American revolutions. 
 To take only a few examples from more recent 
 
 lischen Revolution des XVII Jahrhunderts, 1895 ; Kautsky, 
 Communism in Central Europe in the Time of the Reformation, 
 1 897, and Belfort Bax's study on the Social Side of the German 
 Reformation, of which two volumes have thus far appeared under 
 the titles : German Society at the Close of the Middle Ages, 1894, 
 and The Peasants' 1 War, 1899. 
 
 1 Lamprecht, Deutsche Geschichte. Few economists or eco- 
 nomic historians would deny, however, that Professor Lamprecht 
 has been unfortunate in selecting as the important factor what is 
 generally regarded as a secondary rather than a primary phe- 
 nomenon. The change from a natural to a money economy, which 
 Lamprecht emphasizes, is itself the result of antecedent economic 
 forces. 
 
 2 Lamprecht's general views may be found in his Alte und 
 Neue Richtung in der Geschichtswissenschaft and Was ist Kill- 
 
86 ECONOMIC INTERPRETATION 
 
 events, it is no longer open to doubt that the 
 democracy of the nineteenth century is largely 
 the result of the industrial revolution ; that the 
 entire history of the United States to the Civil 
 War was at the bottom a struggle between 
 two economic principles ; that the Cuban insur- 
 rection against Spain, and thus indirectly the 
 Spanish-American War, was the outcome of 
 the sugar situation ; or, finally, that the condi- 
 tion of international politics at present is 
 dominated by economic considerations. Wher- 
 ever we turn in the maze of recent historical 
 investigation, we are confronted by the over- 
 whelming importance attached by the younger 
 and abler scholars to the economic factor in 
 political and social progress. 
 
 turgeschichte ? 1896. A list of some recent articles on the 
 controversy may be found in Ashley, Surveys, Historic and 
 Economic, p. 29. To these may now be added the article of 
 Below in the Historische Zeitschrift, LXXXVI (1900), 1, and 
 the French books of Lacombe, De VHistoire considiree co7nme 
 Science, 1894 and Seignobos, La Methode Historique appliquee 
 atix Sciences Sociales, 1901. Perhaps the most striking work of 
 this nature that has been accomplished by an American scholar 
 is the article of E. V. D. Robinson, "War and Economics in 
 History and Theory," Political Science Quarterly, XV (1900), 
 pp. 581-586. 
 
PART II 
 
 CRITICISM OF THE THEORY OF ECONOMIC 
 INTERPRETATION 
 
CHAPTER I 
 
 FREEDOM AND NECESSITY 
 
 We come now to the most important part of 
 the subject, — a consideration, namely, of the 
 objections that have been urged to the doctrine 
 here under discussion. Some of these objec- 
 tions, as we shall learn later, are indeed weighty 
 but others possess only a partial validity. Yet 
 the emphasis is commonly put by the critics of 
 economic interpretation on the weak, rather 
 than on the sound, arguments. It will be advis- 
 able, then, to consider first and at greater length 
 some of these alleged objections, reserving for 
 later treatment those criticisms which possess 
 greater force. 
 
 Among the criticisms commonly advanced 
 the more usual may be summarized as follows : 
 first, that the theory of economic interpretation 
 f is a fatalistic theory, opposed to the doctrine of 
 free will and overlooking the importance of great 
 men in history; second, that it rests on the 
 assumption of " historical laws " the very exist- 
 
90 ECONOMIC INTERPRETATION 
 
 ence of which is open to question ; third, that it 
 is socialistic ; fourth, that it neglects the ethical 
 and spiritual forces in history ; fifth, that it leads 
 to absurd exaggerations. 
 
 It will be observed that these criticisms fall 
 into two categories. The one category takes 
 exception, not only to the economic interpreta- 
 tion of history, but to the general social in- 
 terpretation of history. The other class of 
 objections does not deny that the controlling 
 forces of progress are social in character, but 
 contends that we must not confound economic 
 with social considerations and that the economic 
 factor is of no more importance than any of the 
 other social factors. In the above list the first 
 and second criticisms are to be included in the 
 former category ; the third and fifth in the lat- 
 ter ; while the fourth criticism is so broad that 
 it falls partly in each category. 
 
 We begin with the first class of criticisms 
 because some writers think that they are tri- 
 umphantly refuting the economic interpretation 
 of history, when they are in reality directing 
 their weapons against a far more comprehensive 
 structure of ideas, which very few of the oppo- 
 nents of the economic interpretation of history 
 would like to see demolished. Let us consider, 
 
FREEDOM AND NECESSITY 91 
 
 then, the objection that the doctrine is fatalistic, 
 that it is opposed to the theory of free will, and 
 that it overlooks the importance of great men in 
 history. 1 
 
 It is obvious that this is not the place to enter 
 into a general philosophical discussion of deter- 
 minism. For our purposes it is sufficient to 
 state that if by freedom of the will we simply 
 mean the power to decide as to an action, there 
 is no necessary clash with the doctrine of eco- 
 nomic or social interpretation. The denial of 
 this statement involves a fallacy, which in its 
 general aspects has been neatly hit off by 
 Huxley: — 
 
 " Half the controversies about the freedom of 
 the will . . . rest upon the absurd presumption 
 that the proposition " I can do as I like " is 
 contradictory to the doctrine of necessity. The 
 answer is: nobody doubts that, at any rate 
 within certain limits, you can do as you like. 
 But what determines your likings and dislik- 
 
 1 Professor Ashley, for instance, resolves the whole question 
 into " another form of the eternal problem of the universe : 
 Necessity or Free Will." Surveys, Historic and Economic, p. 26. 
 Mr. Bonar, in his temperate and interesting article on the subject, 
 seems to come dangerously near to this position in speaking of 
 the " helplessness " of society. See " Old Lights and New in Eco- 
 nomic Study," Economic Journal, viii, p. 444. 
 
92 ECONOMIC INTERPRETATION 
 
 ings? . . . The passionate assertion of the 
 consciousness of their freedom, which is the 
 favorite refuge of the opponents of the doctrine 
 of necessity, is mere futility, for nobody denies 
 it. What they really have to do if they would 
 upset the necessarian argument, is to prove that 
 they are free to associate any emotion whatever 
 with any idea however, to like pain as much as 
 pleasure ; vice as much as virtue ; in short, to 
 prove that, whatever may be the fixity of order 
 of the universe of things, that of thought is 
 given over to chance." * 
 
 In other words, every man has will power and 
 may decide to act or to refrain from acting, thus 
 showing that he is in this sense a free agent. 
 But whether he decides in the one way or the 
 other, there are certain causes operating within 
 the organism which are responsible for the de- 
 cision. The function of science is to ascertain 
 what these causes are. All that we know thus 
 far is that every man is what he is because of 
 the influence of environment, past or present. 
 We need not here enter into the biological dis- 
 putes between the Weissmannist and the Neo- 
 
 1 Hume, with Helps to the Study of Berkeley, ch. x. In 
 Huxley's Collected Essays, vol. vi, p. 220. 
 
FREEDOM AND NECESSITY 93 
 
 Lamarckian ; for, whether we believe with the 
 one that the only factor in progress is the power 
 of natural selection to transmit and strengthen 
 congenital characteristics, or with the other that 
 acquired characteristics are also inherited, we 
 are dealing in each case with the operation of 
 some form of past environment. Neither 
 Weissmannists nor Neo-Lamarckians deny the 
 obvious fact of the influence of present environ- 
 ment on the individual as such. 
 
 Since, therefore, man, like everything else, is 
 what he is because of his environment, past and 
 present, — that is, the environment of his ances- 
 tors as well as his own, — it is clear that, if we 
 knew all the facts of his past and present envi- 
 ronment, we should be in a much better posi- 
 tion to foretell with some degree of precision 
 the actions of every human being. Although a 
 man is free to steal or not to steal, we are even 
 now safe in predicting that under ordinary cir- 
 cumstances an honest man will not steal. His 
 congenital and acquired characteristics are such 
 that under certain conditions he will always 
 elect a certain course of action. In the case of 
 physical environment the matter is very simple. 
 While an Eskimo may be perfectly free to go 
 naked, it is not a violent stretch of the fancy to 
 
94 ECONOMIC INTERPRETATION 
 
 assume that no sane Eskimo will do so as long 
 as he remains in the Arctic regions. When 
 we leave the physical and come to the social 
 environment, as we necessarily do in dis- 
 cussing the doctrine of economic interpre- 
 tation, the essence of the matter is not much 
 changed. 
 
 The theory of social environment, reduced to 
 its simplest elements, means that, even though 
 the individual be morally and intellectually free 
 to choose his own action, the range of his 
 choices will be largely influenced by the cir- 
 cumstances, traditions, manners and customs of 
 the society about him. I may individually be- 
 lieve in polygamy and may be perfectly free to 
 decide whether to take one or two wives ; but 
 if I live outside of Utah, the chances are very 
 great that I shall be so far guided in my decis- 
 ion by the law and social custom as to content 
 myself with one spouse. The common saying 
 that a man's religion is formed for him affords 
 another illustration. The son of a Mohamme- 
 dan may elect to become a Christian, but it is 
 safe to predict that for the immediate future 
 the vast majority of Turks will remain Moham- 
 medans. 
 
 The negation of the theory of social environ- 
 
FREEDOM AND NECESSITY 95 
 
 ment excludes the very conception of law in 
 the moral disciplines. It would render impos- 
 sible the existence of statistics, jurisprudence, 
 economics, politics, sociology or even ethics. 
 For what do we mean by a social law ? Social 
 law means that amid the myriad decisions of 
 the presumable free agents that compose a 
 given community there can be discovered a 
 certain general tendency or uniformity of ac- 
 tion, deviation from which is so slight as not to 
 impair the essential validity of the general state- 
 ment. In a race of cannibals the abstention by 
 any one savage from human flesh will not influ- 
 ence the history of that tribe; in the present 
 industrial system the offer on the part of any 
 one employer to double the customary wages of 
 his workmen will have no appreciable effect 
 upon the general relations of labor and capital. 
 The controlling considerations are always the 
 social considerations. At bottom, of course, 
 the individual is the unit; and every individual 
 may be conceived as, ideally at least, a free 
 agent. But for individuals living in society 
 the theories that influence progress are the 
 social choices, that is, the choices of the ma- 
 jority. The decision of any one individual is 
 important only to the extent that his influence 
 
96 ECONOMIC INTERPRETATION 
 
 preponderates with the great majority; and 
 then it is no longer an individual judgment, but 
 becomes that of the majority. 1 
 
 This is the reason why the " great man the- 
 ory " of history has well-nigh disappeared. No 
 one, indeed, denies the value of great men or 
 the vital importance of what Matthew Ar- 
 nold calls the remnant. Without the winged 
 thoughts and the decisive actions of the great 
 leaders, the progress of the world would doubt- 
 less have been considerably retarded. But few 
 now overlook the essential dependence of the 
 great man upon the wider social environment 
 amid which he has developed. 2 
 
 Aristotle, the greatest thinker of antiquity, 
 defended slavery because slavery was at the 
 time an integral part of the whole fabric of 
 Greek civilization. A Jefferson would be as 
 impossible in Turkey as a Pobyedonostseff 
 
 1 For an application of this doctrine to the theory of eco- 
 nomics, see an article by the present writer on " Social Elements 
 in the Theory of Value " in the Quarterly Journal of Economics 
 (June, 1901). 
 
 2 In his interesting essay on " Great Men and their Environ- 
 ment" Prof. William James says many things which command 
 assent, especially in connection with the geographical interpreta- 
 tion of history. But he misses the main point, although he hints 
 at it on pp. 226-227. See The Will to believe and Other Essays 
 (1897). 
 
FREEDOM AND NECESSITY 97 
 
 in the United States. Pheidias is as un- 
 thinkable in China as Lionardo in Canada. 
 On the other hand, the effects ascribed to 
 great men are often largely the result of 
 forces of which they were only the chance 
 vehicles. Caesar erected the Roman Empire, 
 but the empire would undoubtedly have come 
 ultimately with or without Caesar. Napoleon 
 for the time transformed the face of Europe, 
 but the France of to-day would in all probability 
 have been in its essentials the same had Napo- 
 leon never lived. Washington and Lincoln 
 assuredly exercised the most profound influence 
 on their times, but it is scarcely open to doubt 
 that in the end the Revolution would have suc- 
 ceeded and the Rebellion would have failed, 
 even though Washington and Lincoln had 
 never existed. 
 
 While his appearance at a particular moment 
 appears to us a matter of chance, the great man 
 influences society only when society is ready 
 for him. If society is not ready for him, he is 
 called, not a great man, but a visionary or a 
 failure. Just as in animal life the freak or sport 
 works through natural selection as fixed by the 
 environment, so in human life the great man 
 can permanently succeed only if the social en- 
 
98 ECONOMIC INTERPRETATION 
 
 . . . — \ 
 
 vironment is ripe. Biologists tell us that varia- 
 tion in the species is the cause of all progress, 
 but that the extreme limit of successful varia- 
 tion from the parent type in any one case does 
 not exceed a small percentage. The great man 
 represents the extreme limit of successful varia- 
 tion in the human race. It is to him that pro- 
 gress seems to be, and in fact often is, in large 
 measure due. But we must not forget that 
 even then the great mass of his characteristics 
 are those of the society about him, and that he 
 is great because he visualizes more truly than 
 any one else the fundamental tendencies of the 
 community in which his lot is cast, and because 
 he expresses more successfully than others the 
 real spirit of the age of which he is the supreme 
 embodiment. 1 
 
 It is, therefore, an obviously incorrect state- 
 ment of the problem to assert that the theory 
 of economic interpretation, or the theory of so- 
 cial environment of which it is a part, is incom- 
 
 1 An interesting attempt to study in detail the causes of the 
 appearance of great men in a particular country and a particular 
 field has been made by A. Odin, professor at the University of 
 Sofia, in his two-volume work, Gentee des Grands Hommes (1895). 
 The author devotes himself specifically to the great men in 
 French literature and concludes that the social and economic 
 environment, and not the force of heredity or chance, is the 
 capital factor in the phenomenon. 
 
FREEDOM AND NECESSITY 99 
 
 patible with the doctrine of free will. If by 
 determinism we erroneously mean moral fatal- 
 ism, determinism is not involved at all. 1 To 
 call the general doctrine "economic determin- 
 ism " as is occasionally done in France, is there- 
 fore essentially erroneous. The theory of social 
 environment in no way implies fatalism. Social 
 arrangements are human arrangements, and hu- 
 man beings are, in the sense indicated, free to 
 form decisions and to make social choices ; but 
 they will invariably be guided in their decisions 
 by the sum of ideas and impressions which have 
 been transmitted to them through inheritance 
 and environment. So far as great men influ 1 
 ence the march of progress, they can do so only 
 to the extent that they can induce the com- 
 munity to accept these new ideas as something 
 in harmony with their surroundings and their 
 aspirations. 
 
 Given a certain set of conditions, the great 
 mass of the community will decide to act in 
 a certain way. Social law rests on the obser- 
 
 1 The passage sometimes quoted from Marx, Das Kapital, III, 
 2, p. 355, does not refer to the general problem of determinism, 
 as Masaryk (Grundlagen des Marxismus, p. 232) seems to think, 
 but to freedom in the sense of liberation from the necessity of 
 working all day in the factory and having no time for self- 
 improvement. 
 
ioo ECONOMIC INTERPRETATION 
 
 vation that men will choose a course of action 
 in harmony with what they conceive to be 
 their welfare, and on the further observation 
 that the very idea of an organized community 
 implies that a majority will be found to enter- 
 tain common ideas of what is their welfare. If 
 the conditions change, the common ideas will 
 change with them. The conditions, so far as 
 they are social in character, are indeed created 
 by men and may be altered by men, so that 
 in last resort there is nothing fatalistic about 
 progress. 1 But it is after all the conditions 
 which, because of their direct action or reac- 
 tion on individuals, are at any given moment 
 responsible for the general current of social 
 thought. 
 
 To the extent, then, that the theory of eco- 
 nomic interpretation is simply a part of the 
 general doctrine of social environment, the con- 
 tention that it necessarily leads to an unreason- 
 
 1 It is impossible to speak in any but respectful terms of 
 Professor James. The limits of our toleration, however, are well- 
 nigh reached when we find such an extreme statement as this : 
 " I cannot but consider the talk of the contemporary sociological 
 school about averages and general causes the most pernicious 
 and immoral of fatalisms." — See the chapter on " The Impor- 
 tance of Individuals," in The Will to Believe, p. 262. This appar- 
 ently shows an egregious misconception of the very nature of 
 social law. 
 
FREEDOM AND NECESSITY 101 
 
 ing fatalism is baseless. Men are the product 
 of history, but history is made by men. 1 
 
 1 Those interested in the discussion of this point by the 
 socialists may be referred to the articles of Kautsky, Bernstein 
 and Mehring in Die Neue Zeit, XVII (1899), 2, pp. 4, 150, 268 
 and 845. Engels has also touched upon it several times, in his 
 Anti-Duhring, in his Litdwig Fenerbach (2d ed., 1895), p. 44, and 
 more fully in his letter of 1894 published in Der Sozialistische 
 Akademiker (1895), p. 373, and reprinted in Woltmann, Der 
 Historische Materialismus, p. 250. 
 
CHAPTER II 
 
 HISTORICAL LAW AND SOCIALISM 
 
 The second objection to the theory under 
 discussion is closely related to the first The 
 economic interpretation of history presupposes 
 that there are historical laws. Yet this is de- 
 murred to by some. 
 
 Those, however, who deny the existence of 
 historical laws are evidently laboring under a 
 misapprehension. What they obviously mean 
 is that the statement of some particular histori- 
 cal law is false, or that the causes of some 
 definite historical occurrence are so complex 
 and so obscure that it is well-nigh impossible 
 to frame a general explanation. But they can- 
 not mean that historical laws do not exist. 
 The mere fact that we have not discovered a 
 law does not prove that there is none. 
 
 For what is meant by a scientific law ? A 
 law is an explanatory statement of the actual re- 
 lations between facts. The processes of human 
 thought enable us to classify the likenesses and 
 
 .*' 
 
HISTORICAL LAW AND SOCIALISM 103 
 
 differences in the myriad phenomena of life, 
 and to subsume the unity underlying these 
 differences. This unity makes itself known to 
 us under the guise of a casual relation of one 
 phenomenon to another. When we have suc- 
 ceeded in ascertaining the relation of cause and 
 effect we are able to frame the law. But our. 
 inability to discover the law does not invalidate 
 the fact of its existence. The relations between 
 the stars existed from the beginning of time ; 
 the discovery of the law which enables us to 
 explain these relations is a result of scientific 
 progress. 1 
 
 What is true of the exact sciences is equally 
 true of the social sciences, with the difference 
 that the social sciences are immeasurably more 
 complex because of the greater difficulty in iso- 
 lating the phenomena to be investigated, and 
 in repeating the experiments. But to deny the 
 existence of social laws, for instance, simply be- 
 
 1 This does not, of course, imply that the law possesses an 
 objective existence apart from our apperceptions. A considera- 
 tion of this problem belongs to the science of epistemology. 
 The questions of the " Ding an sich " and of the necessary limits 
 of human thought have no place in this discussion ; nor have 
 they any bearing upon the particular objection here alluded to. 
 For the contention in question is not that historical laws have no 
 objective existence, but that there is no possibility of our framing 
 an adequate explanation of causal relations. 
 
104 ECONOMIC INTERPRETATION 
 
 cause some particular alleged laws may be 
 convicted of unreality would be to repeat the 
 errors formerly committed by some of the ex- 
 tremists among the historical economists and 
 not yet so infrequent as they ought to be. 
 Obedience to law does not mean that the law 
 causes the phenomenon to happen, — for that 
 is absurd, — but simply that the law affords an 
 explanation of the occurrence. 
 
 History, however, is the record of the actions 
 of men in society. It is not alone past politics, 
 as Freeman said, but past economics, and past 
 ethics, and past jurisprudence, and past every 
 other kind of social activity. But if each phase 
 of social activity constitutes the material for a 
 separate science, with its array of scientific laws, 
 the whole of social activity, which in its cease- 
 less transformation forms the warp and woof of 
 history, must equally be subject to law. All 
 social activity may be regarded from the point 
 of view of coexistence of phenomena or from 
 that of sequence of phenomena. In the one 
 case we arrive at the static laws, in the other 
 at the dynamic laws. The laws of history are 
 the dynamic laws of the social sciences or of 
 the social science par excellence. To deny the 
 existence of historical laws is to maintain that 
 
HISTORICAL LAW AND SOCIALISM 105 
 
 there is to be found in human life no such thing 
 as cause and effect. 
 
 The third objection to the doctrine is its 
 alleged socialistic character. To this it may 
 be replied that, if the theory is true, it is utterly 
 immaterial to what conclusion it leads. To 
 refuse to accept a scientific law because some 
 of its corollaries are distasteful to us is to be- 
 tray a lamentable incapacity to grasp the ele- 
 mentary conditions of scientific progress. If 
 the law is true, we must make our views con- 
 form to the law, not attempt to mould the law 
 to our views. 
 
 Fortunately, however, we are not reduced to 
 any such alternative. For, notwithstanding the 
 ordinary opinion to the contrary, there is noth- 
 ing in common between the economic interpre- 
 tation of history and the doctrine of socialism, 
 except the accidental fact that the originator of 
 both theories happened to be the same man. \ 
 Karl Marx founded " scientific socialism," if by 
 that curious phrase we mean his theory of sur- 
 plus value and the conclusions therefrom. 
 Karl Marx also originated the economic inter- 
 pretation of history and thought that his own 
 version of this interpretation would prove to 
 
io6 ECONOMIC INTERPRETATION 
 
 be a bulwark of his socialistic theory. And 
 most of his followers have thought likewise. 
 Thus, Mehring tells us that " historical idealism 
 in its various theological, rationalistic and 
 materialistic manifestations is the conception 
 of history of the bourgeois class, as historical 
 materialism is that of the laboring class." * 
 
 It is plain, however, that the two things have 
 nothing to do with each other. We might 
 agree that economic factors primarily influence 
 progress ; we might conclude that social forces, 
 rather than individual whim, at bottom make 
 history; we might perhaps even accept the 
 existence of class struggles ; but none of these 
 admissions would necessarily lead to any sem- 
 blance of socialism. Scientific socialism teaches 
 that private property in capital is doomed to 
 disappear; the economic interpretation of his- 
 tory calls attention, among other things, to the 
 influence which private capital has exerted on 
 progress. The vast majority of economic 
 thinkers to-day believe, as a result of this 
 historical study, that the principle of private 
 property is a logical and salutary result of 
 human development, however much they may 
 be disposed to emphasize the need of social con- 
 
 1 Die Lessing-Legende, p. 500. 
 
HISTORICAL LAW AND SOCIALISM 107 
 
 trol. The Neo- Marxists themselves — such as 
 Bernstein, for instance — disagree with Marx's 
 view as to the immediate future of the class 
 struggle, and consider that his doctrine of the 
 " impending cataclysm of capitalistic society " 
 has been disproved by the facts of the half cen- 
 tury which has intervened since the theory was 
 propounded. Yet Bernstein would not for a 
 moment abandon his belief in the economic 
 interpretation of history as we have described 
 it. 1 
 
 In fact, the socialistic application of the 
 economic interpretation of history is exceed- 
 ingly naive. If history teaches anything at all, 
 it is that the economic changes transform 
 society by slow and gradual steps. It took 
 centuries for feudal society to develop ; it took 
 centuries for private capital to convert feudal- 
 ism into modern industrial society. The char- 
 acteristic mark of the modern factory system, 
 still in its infancy, is the predominance of the 
 individual or corporate entrepreneur on a huge 
 scale, as we see it typified in the present trust 
 
 1 In his most recent book Bernstein speaks of the " realistische 
 Geschichtsbetrachtung die in ihren Hauptzugen unwiderlegt 
 geblieben ist." — Zur Geschichte tmd Theorie des Sozialismus 
 (2d ed., 1901), p. 285. 
 
108 ECONOMIC INTERPRETATION 
 
 movement in America. To suppose that pri- 
 vate property and private initiative, which are 
 the very secrets of the whole modern move- 
 ment, will at once give way to the collective 
 ownership which forms the ideal of the social- 
 ists, is to shut one's eyes to the significance of 
 actual facts and to the teachings of history 
 itself. 1 Rodbertus was at least more logical 
 than Marx when he asserted that the triumph 
 of socialism would be a matter of the dim 
 future. 
 
 Socialism is a theory of what ought to be ; 
 historical materialism is a theory of what has 
 been. The one is teleological, the other is 
 descriptive. The one is a speculative ideal, 2 
 the other is a canon of interpretation. It is 
 impossible to see any necessary connection 
 between such divergent conceptions. Even if 
 every one of Marx's economic theories was 
 entirely false, this fact alone would not in any 
 degree invalidate the general doctrine of eco- 
 nomic interpretation. It is perfectly possible 
 
 1 Marx, indeed, in one passage predicts the formation of 
 trusts. But he, as well as his followers, overlooks the fact that 
 concentrated capital, like separated capital, can do its best work 
 only under the lash of individual initiative and personal 
 responsibility. 
 
 2 The " scientific socialists " deny this, but in va 
 
HISTORICAL LAW AND SOCIALISM 109 
 
 to be the stanchest individualist and at the same 
 time an ardent advocate of the doctrine of eco- 
 nomic interpretation. In fact, the writers who 
 are to-day making the most successful applica- 
 tion of economic interpretation are not socialists 
 at all. We might agree with the general doc- 
 trine and yet refuse to accept the somewhat 
 fanciful ideals of the non-socialist Loria; we 
 might agree with the general doctrine and yet 
 refuse to accept the equally fanciful ideals of the 
 socialist Marx. Socialism and "historical ma- 
 terialism """are at bottom entirely independent 
 conceptions. 
 
 Furthermore, we must distinguish between 
 the principle of economic interpretation in gen- 
 eral, and some particular application of the 
 principle. When the phrase " historical mate- 
 rialism " is mentioned in Germany, or in so- 
 cialistic circles abroad, every one at once thinks 
 of Karl Marx, because he has been virtually 
 the only writer in Germany to attempt a con- 
 sistent explanation of history on economic 
 lines. " Historical materialism " and Marxism 
 have thus come to be considered synonymous. 
 In other countries, however, we find many dif- 
 ferent versions of the theory. To speak only 
 of America, Gunton, Patten and Brooks Adams, 
 
no ECONOMIC INTERPRETATION 
 
 who are by no means in thorough accord with 
 each other, agree in ascribing the chief impor- 
 tance to economic factors. Yet each one of 
 these writers would utterly refuse to be put in 
 the same category as Marx. 
 
 We are not here concerned with the validity 
 of some particular explanation of historical 
 facts on economic lines. We are endeavoring 
 to ascertain how far the theory of economic 
 interpretation in general is tenable as a prin- 
 ciple. To make the general principle stand 
 or fall with some particular application would 
 be narrow in the extreme. The problem of 
 the truth of economic interpretation is not 
 necessarily bound up with the Marxian ver- 
 sion of such interpretation. Just as the Marx- 
 ian economics must not be confused with 
 economics in general, so the Marxian interpre- 
 tation of history is by no means synonymous 
 with economic interpretation in general. 
 
 But while socialism and "historical mate- 
 rialism " are thus in no way necessarily con- 
 nected, it does not follow that they may not 
 both be equally erroneous. All that we have 
 attempted to prove here is that the falsity of 
 socialism does not, of and in itself, connote the 
 falsity of economic interpretation. The fact 
 
HISTORICAL LAW AND SOCIALISM m 
 
 that one argument is bad does not imply that 
 other arguments are good. The validity of the 
 economic interpretation of history is still open 
 to question and cannot be decided until after a 
 study of other and far more important con- 
 siderations. 
 
CHAPTER III 
 
 THE SPIRITUAL FACTORS IN HISTORY 
 
 Thus far we have set forth the theory of 
 the economic interpretation of history and have 
 studied some of the objections that are com- 
 monly advanced. There still remain among 
 the criticisms most frequently encountered two 
 points which seem to be somewhat more for- 
 midable. Of these perhaps the more important 
 is the one that figured fourth in our original 
 list, 1 — the objection, namely, that the theory 
 of economic interpretation neglects the ethical 
 and spiritual forces in history. 
 
 It must be confessed, indeed, that the attempts 
 thus far made by the " historical materialists " to 
 meet the objection have not been attended with 
 much success. 2 On closer inspection, neverthe- 
 
 1 Supra, p. 90. 
 
 2 This is true not only of the Germans, but of the English, 
 like Bax, and of the French, like Labriola, Deville and Lafargue. 
 Cf. especially Mehring, Die Lessing-Legende, p. 463, and the 
 articles in Die Neue Zeit: by Bax, vol. xv, pp. 175, 685 ; by 
 Kautsky, vol. xiv, p. 652, and vol. xv, pp. 231, 260 ; by Bernstein, 
 
SPIRITUAL FACTORS IN HISTORY 113 
 
 less, this criticism also turns out to be in some 
 respects less weighty than has often been sup- 
 posed. 
 
 For what, after all, is the realm of ethical or 
 spiritual forces ? To answer this question it is 
 necessary to distinguish between the existence 
 of the moral law and its genesis. The fail- 
 ure to draw this distinction is largely responsi- 
 ble for the confusion of thought which still 
 prevails. 
 
 From the historical point of view it no longer 
 admits of reasonable doubt that all individual 
 ethics is the outgrowth of social forces. Moral 
 actions are of two kinds, — those which directly 
 affect other individuals, and those which pri- 
 marily affect only one's self. In the first class, 
 comprising to-day the great mass of activities 
 to which we apply the term " ethical," the sanc- 
 tion was originally social in character. The con- 
 ception of sin or immorality is not the primary 
 conception. Historically we first find crimes 
 and torts, that is, offences against society as a 
 whole or against the individuals comprising 
 
 vol. xi, p. 782. Bernstein has also treated the subject in his 
 more recent books. 
 
 As to the French socialists, see Labriola, Essais sur la Con- 
 ception Mattrialiste de VHistoire (1897) ; Lafargue, Idealisine 
 et Materialisme (1895) ; and Deville, Principes Socialistes (1896). 
 
 I 
 
ii4 ECONOMIC INTERPRETATION 
 
 society ; it is only at a much later period that 
 the idea emerges of an offence against God or 
 against the moral law as reflected in one's con- 
 science. When the conception of sin was once 
 reached, it was indeed gradually broadened so 
 as to include the other offences, until to-day 
 the commission of either crime or tort involves 
 a sin. But historically sins were not recog- 
 nized as such before torts and crimes. 
 
 Among brutes there is in all probability no 
 such thing as morality, no conception of good 
 or evil. 1 The female may protect her young 
 through instinct; but to maintain that this is 
 a moral action is, to say the least, premature. 
 It no doubt conduces to the perpetuation of 
 the species, and thus is a powerful factor in 
 natural selection; but there is nothing moral 
 about the action unless we are willing to apply 
 the term "moral" to every act — whether instinc- 
 
 1 The reason why it is not safe categorically to deny the exist- 
 ence of morality among animals is that the older contention of 
 an essential psychical difference between man and animals has 
 broken down before the flood of recent investigation. Compara- 
 tive biology has proved that psychological phenomena begin far 
 down in animal life. Some writers even profess to find them 
 among the very lowest classes of beings — so low, indeed, that 
 it is even doubtful whether they belong to the animal or the vege- 
 table kingdom. For a popular presentation see Binet, The Psychic 
 Life of Micro-Organisms (1894). Binet's views, however, are 
 not shared by the more conservative biologists. 
 
SPIRITUAL FACTORS IN HISTORY 115 
 
 tive or volitional — that makes for the perma- 
 nence of the species. Morality in its origin 
 indeed implies utility; but utility does not 
 necessarily connote morality. Even if we predi- 
 cate morality of animals, however, future inves- 
 tigators will no doubt explain its origin on 
 very much the same lines as that of human 
 morality. 
 
 For with the institution of human society we 
 are on safer ground and can trace the glimmer- 
 ings of a moral development. In the primitive 
 peoples that still exist in almost the lowest 
 stages of savagery, the only offences that are 
 recognized are even to-day offences against 
 the horde or clan, that is, what we should call 
 public offences or crimes. Treason, incest^ 
 and witchcraft are the three great original j 
 crimes that are almost universally found. 
 They are offences against the community, 
 because they imperil, in the estimation of 
 the people, the very existence of society. At 
 first there is no idea of sin apart from these 
 offences. The words " good " or " bad " are in- 
 variably applied only to actions affecting the 
 social group. The very conception of wrong 
 is a social conception. Certain actions come 
 to be considered wrong because they are so- 
 
n6 ECONOMIC INTERPRETATION 
 
 cially injurious. They are punished by society 
 as a whole, and the cause of their punishment 
 is to be found in the consciousness of society 
 that they are infractions of the fundamental 
 social customs which have been so laboriously 
 developed. For these customs are the " teach- 
 ings of mother nature drilled into countless 
 generations of savage ancestors. They are 
 lessons in social necessity, in social selection, 
 where failure to learn or refusal to obey means 
 the inevitable destruction of the social group — 
 means social death." * 
 
 What has been said of crimes applies also to 
 torts. The earliest offence of the aboriginal 
 savage against his comrade carried with it no 
 more moral implication than does to-day the 
 killing of one animal by another. Passionate 
 action and retaliation were originally with men, 
 as they are still with brutes, the form assumed 
 by the desire for physical mastery. The animal 
 struggle for existence is neither moral nor im- 
 moral — it is unmoral. As soon, however, as 
 the offence of man against man was taken 
 notice of by society, as soon as the retaliation 
 was regulated by social custom or law, the 
 
 1 Hall, Crime in its Relation to Social Progress. Columbia 
 University Studies in History, Economics and Ptiblic Law, XV 
 (1902), p. 5s 
 
SPIRITUAL FACTORS IN HISTORY 117 
 
 punishment was invested with a social sanc- 
 tion, and the act began to be regarded as 
 reprehensible. When human beings came to 
 see that certain actions directed against their 
 fellows were followed by social reprobation or 
 by individual vengeance resting on social 
 approval, it did not take long to learn that 
 if they valued their existence in society they 
 must refrain from such actions. In the con- 
 test of man with man each individual always 
 has a chance of victory; he therefore feels 
 no certainty that a given act will be followed 
 by any baneful consequences to him. But 
 against a social group, the individual is pow- 
 erless, and his opportunity for escape from 
 punishment is slight. 
 
 In the course of ages social customs grow so 
 rigid that any deviation from the habitual usage 
 comes to be regarded not only as peculiar but 
 as positively harmful, and therefore reprehensi- 
 ble. /The fear of social disapproval and the 
 hope of social approval become the forces 
 which lead to the original ideas of evil or good 
 as applied to the social actions of the individual/ 
 
 Whether the conception of tort or that of 
 crime is the earlier historically, need not be 
 discussed here. Most writers assume that 
 
u8 ECONOMIC INTERPRETATION 
 
 torts precede crimes ; and it is undoubtedly 
 true that many torts are gradually transformed 
 into crimes. On the other hand, it is almost 
 equally certain that some crimes have pre- 
 ceded torts. Adultery was a crime as incest 
 before it was a tort; deception was a crime 
 as treason before it was a tort. However 
 that may be, the point of importance for us 
 is that both torts and crimes are offences 
 with a social sanction, and that before this 
 social sanction existed there was no such idea 
 as that of sin or immorality applicable to the 
 actions of man to man. 
 
 The teachings of language itself afford a 
 clear indication of the social origin of the con- 
 ception of morality. The word "ethical" is de- 
 rived from rjBos, which means social custom 
 or usage ; just as " moral," which Cicero tells 
 us 1 he coined in imitation of the Greek, is 
 derived from mos, denoting precisely the same 
 as rjOos. So also the German term for moral, 
 sittlich, is derived from Sitte, or social usage. 
 It is society which has set the original imprint 
 on the very conception of morality. 
 
 Not only is the idea of morality an historical 
 product, but the content of morality changes 
 
 1 Cicero, De Fato, cap. li. 
 
SPIRITUAL FACTORS IN HISTORY 119 
 
 with the state of civilization or with the social 
 class. Homicide was at one time as little im- 
 moral as the killing of one animal by another 
 is at present; it was simply unmoral. Even 
 to-day it is not immoral if committed by a 
 soldier in warfare; it becomes murder and 
 sinful only when the same individual acts in 
 some other capacity than that of a member of 
 the army. Again, with reference to some acts 
 it is not quite clear whether they are right or 
 wrong. For instance, the deception practised 
 by General Funston to entrap Aguinaldo is 
 declared by some to be not wholly wrong 
 because it scarcely, if at all, violated the social 
 usages of civilized nations in warfare — pro- 
 vided, that is, that we are willing to confess 
 that there is a difference between civilized 
 and uncivilized warfare. On the other hand, 
 the looting by some of the allies of the treas- 
 ures in Pekin and Tien-tsin is conceded by 
 almost every one to be wrong, because it has 
 recently become a custom reprobated by the 
 social conscience of the most civilized peoples. 
 Competition is still the rule in business life : 
 economists call it neither moral nor immoral. 
 But competition between members of the 
 smaller social group known as the family is no 
 
120 ECONOMIC INTERPRETATION 
 
 longer deemed defensible, because it has long 
 since been recognized by society at large that 
 social welfare would, on the whole, be furthered 
 by the practice of family cooperation. The 
 taking of private property without compensa- 
 tion is ordinarily considered wrong ; but when 
 a man's house is blown up to check a con- 
 flagration, the action is neither morally nor 
 legally wrong, because of the overmastering 
 social considerations. 
 
 Thus the conception of right or wrong does 
 not attach invariably to any particular action, 
 because the same action may, under different 
 circumstances and as applied to varying social 
 stages, be both right and wrong. Since social 
 considerations make the social actions of the 
 individual right or wrong, the idea of good or 
 evil itself is a social product. 
 
 What we have thus far said is true primarily 
 of the social actions of individuals — of the 
 acts of man to man. The principle, however, 
 is equally applicable to the second class of 
 moral actions referred to above — those, 
 namely, which seem at first to affect the 
 individual only. An individual, for instance, 
 may be guilty of some particular practice upon 
 himself, which we popularly declare to be not 
 
SPIRITUAL FACTORS IN HISTORY 121 
 
 good for him, or a vice. Properly speaking, 
 however, all that was originally meant was that 
 it was not conducive to his physical or material 
 welfare. Whiskey is not good for an ordinary 
 child ; whiskey is good for an invalid. In the 
 / original conception of good there is no idea of 
 I morality — of right or wrong. If an animal 
 gorges itself to repletion, we do not ascribe any 
 moral quality to the action. When the isolated 
 savage first mutilated . himself there was no 
 thought of anything right or wrong, but only 
 of what might be the physical or material con- 
 sequences, irrespective of the fact whether these 
 consequences might be brought out by natural 
 forces or by the interposition of some super- 
 natural spirit or demon. 
 
 Just as an individual called those things good 
 which promoted his material welfare, so society 
 called those things good which contributed to 
 its continued existence. As soon as the idea of 
 social advantage, however, forces itself through, 
 we. reach the conception of morality. An ac- 
 tion is now reprobated or admired according as 
 it conduces to the social welfare; and long- 
 continued custom makes the individual conform 
 his actions and ideas to this social standard, i.e., 
 creates in him the feeling of right or wrong. 
 
122 ECONOMIC INTERPRETATION 
 
 Thus what is good physically for the indi- 
 vidual becomes good morally only when the 
 social test has been applied. Since this ethical 
 connotation is the result of social forces, it is 
 clear that acts which had originally only a 
 physical significance for the individual gradu- 
 ally acquired an ethical significance because of 
 the assumption that they would lead to certain 
 social consequences. A member of modern 
 society who will continually gorge himself will 
 acquire certain characteristics that will make 
 him distasteful to his fellow-men, or that will 
 serve as a bad example to others. In either 
 case it is the social considerations that attach 
 an ethical significance to what is at bottom a 
 mere individual physical act. 
 
 It is only when men have learned to live in 
 society, and when they have come to fear that 
 some individual practice will react upon their 
 ideas or their actions in relation to other indi- 
 viduals, that they learn to attribute a moral 
 quality even to acts which at first blush seem 
 to bear no relation to any one else. The same 
 is true of the actions of men toward animals. 
 The killing of an animal as such is in itself 
 neither good nor bad; but cruelty to animals 
 is reprobated because of the probable effects 
 
SPIRITUAL FACTORS IN HISTORY 123 
 
 on the character of the human being who com- 
 mits the act. Thus all acts of the individual, 
 whether they seem to affect himself alone or 
 others, become good or bad only as the result 
 of social considerations. 
 
 All individual morality is the outcome and 
 the reflex of social morality. 1 Conscience itself, 
 
 1 The theory of the social origin of morality has been brill- 
 iantly worked out by von Ihering in the second volume of his 
 masterpiece Der Zweck im Recht, 1883 (2d ed., 1886). Von 
 Ihering made no attempt to apply the theory to the general 
 doctrine here under consideration. In English literature the 
 earliest treatment of the subject is found in Darwin's Descent of 
 Man, ch. iv. For an interesting adumbration of the theory of 
 the social origin of morality, cf. the brilliant but very incom- 
 plete passages of W. K. Clifford in his articles " On the Scientific 
 Basis of Morals " and " Right and Wrong," published originally 
 in 1875 and reprinted in his Lectures and Essays II (1879), 
 esp. pp. in, 112, 114, 119-123, 169, 172-173. The admirable 
 work of Alexander Sutherland, The Origin and Growth of the 
 Moral Instinct (1898), bases the development of morality on the 
 growth of sympathy through the family. Thus he tells us that 
 " from the usages that grew up within the family sprung morality ; 
 from those that sprung up between the families grew law," 
 II, p. 138 ; or again "true morality grows up within the family," 
 II, p. 146 ; or again " moral rules as to bloodshed, honesty, truth, 
 chastity are all, by birth, of family growth," II, p. 151. Sutherland 
 forgets, however, that in early society it was not the family in 
 the modern sense, but the horde, the clan and the tribe that 
 formed the unitary social groups. Sutherland's book, neverthe- 
 less, is the first one in English clearly to point out that the 
 (social) utilitarian theory of ethics has nothing "low" or 
 " sordid " about it, but is really compatible with the most ideal- 
 istic view of the universe. For the earlier and cruder opposition 
 on the part of the intuitionists, see Miss Cobbe's "Darwinism 
 in Morals," Theological Review, April, 1872, pp. 188-191. 
 
124 ECONOMIC INTERPRETATION 
 
 or the ability to distinguish between good and 
 bad, is the historical product of social forces. 
 We must therefore agree with Sutherland 
 when he defines the moral instinct as " that 
 unconscious bias which is growing up in human 
 minds in favor of those among our emotions 
 that are conducive to social happiness." 1 We 
 must equally subscribe to his statement that 
 "there is no foundation of any sort for the 
 view maintained by Kant and Green and Sidg- 
 wick, with so many others, that this inward 
 sense (conscience) is innate — a supernatural, 
 mysterious and unfailing judge of conduct. 
 On the contrary, what society praises, the indi- 
 vidual will in general learn to praise, and 
 what he praises in others he will commend in 
 himself." 2 
 
 Whatever truth there may be in the intui- 
 tive or transcendental theory of ethics as a 
 part of the cosmic scheme, there is no doubt 
 that morality as applied to human beings is 
 the result of a slow unfolding, in which social 
 forces have played the chief role. 
 
 Such is the origin of the moral sense; its 
 existence and activity are undoubted facts of 
 human life. It exerts a profound influence on 
 1 op. tit., II, p. 306. 2 Ibid., 11, p. 72. 
 
SPIRITUAL FACTORS IN HISTORY 125 
 
 the individual because it is the crystallization 
 of centuries of social influences. So slow, how- 
 ever, has been the accumulating force of these 
 influences that the individual is utterly oblivi- 
 ous of its social origin and importance. But, 
 although conscience exists as a separate cate- 
 gory, it does not lead an entirely independent 
 life. It is like instinct with animals, — ages of 
 dearly bought experience have served to put an 
 almost indelible imprint On animal habits, until 
 a certain course of action is followed instinc- 
 tively. 1 The imprint, however, is not quite in- 
 delible. Just as the instinct is in its origin an 
 historical product, it will inevitably be slowly 
 moulded by future experiences. The instinct to 
 preserve life remains ; but the particular method, 
 which is instinctively followed, changes from 
 time to time. The instinct persists, but its 
 form is modified. So the fact of moral con- 
 
 1 This is not the place to discuss the various theories of 
 instinct. A popular discussion may be found in Alfred Russell 
 Wallace's Darwinism, p. 441, and a more technical one in 
 Weissmann's Essays on Heredity and in C. L. Morgan's Habit 
 and Instinct. It will suffice here to quote from Romanes : " There 
 is ample evidence to show that instincts may arise either by 
 natural selection fixing on purposeless habits which chance to be 
 profitable, so converting these habits into instincts without 
 intelligence being ever concerned in the process ; or by habits, 
 originally intelligent, becoming by repetition automatic." — Mental 
 Evolution in Animals, p. 267. 
 
126 ECONOMIC INTERPRETATION 
 
 sciousness in man and the existence of the 
 ethical and spiritual life in civilized society are 
 undoubted ; but the content of this moral con- 
 sciousness changes with the same forces that 
 originally gave it birth. 
 
 It would, therefore, be absurd to deny that 
 individual men, like masses of men, are moved 
 by ethical considerations. On the contrary, all 
 progress consists in the attempt to realize the 
 unattainable, — the ideal, the morally perfect. 
 History is full of examples where nations, like 
 individuals, have acted unselfishly and have fol- 
 lowed the generous promptings of the higher 
 life. The ethical and the religious teachers 
 have not worked in vain. To trace the influ- 
 ence of the spiritual life in individual and social 
 development would be as easy as it is unneces- 
 sary. What is generally forgotten, however, 
 and what it is needful to emphasize again and 
 again, is not only that the content of the con- 
 ception of morality is a social product, but also 
 that amid the complex social influences that 
 cooperated to produce it, the economic factors 
 have often been of chief significance — that 
 pure ethical or religious idealism has made 
 i itself felt only within the limitations of existing 
 •economic conditions. 
 
SPIRITUAL FACTORS IN HISTORY 127 
 
 The material, as we have seen, has almost 
 always preceded the ethical. Individual ac- 
 tions, like social actions, possessed a material 
 significance long before they acquired an ethi- 
 cal meaning. Etymology helps us here as it 
 did in the discussion of the meaning of morality 
 itself. A thing was originally a good in the 
 material sense in which we still speak of "goods 
 and commodities"; the ethical sense of good as 
 opposed to bad came much later. In popular 
 parlance we still speak of a broken nail as " no 
 good " without desiring to pass any moral judg- 
 ment on it. The original meaning of "dear" 
 was not ethical, but economic; a commodity 
 may still be " dear," even if we do not love it. 
 To-day we esteem somebody ; originally we put 
 a money value on him {cestimare — from ces, 
 money). In modern times we appreciate a 
 quality ; originally we set a price on it (adpre- 
 tium). Everywhere the physical, material sub- 
 stratum was recognized long before the ethical 
 connotation was reached. 
 
 Since the material precedes the ethical, it will 
 not surprise us to learn that the material condi- 
 tions of society — that is, in the widest sense, the 
 economic conditions — continually modify the 
 content of the ethical conception. Let us take 
 
128 ECONOMIC INTERPRETATION 
 
 a few illustrations at random. Slavery, for in- 
 stance, was not considered wrong by the great 
 Greek moralists, whose ethical views on many 
 other topics were at least on a plane with those 
 of modern times. In the same way the English 
 colonists, who at home would have scouted the 
 very idea of slavery, soon became in the southern 
 states of America the most ardent and sincere 
 advocates of the system ; even the clergymen of 
 the South honestly refused to consider slavery 
 a sin. Had the northern and western states 
 been subjected to the same climatic and eco- 
 nomic conditions, there is little doubt that, so 
 far at least as they could keep themselves shut 
 off from contact with the more advanced indus- 
 trial civilization of Europe, they would have com- 
 pletely shared the moral views of their southern 
 brethren. Men are what conditions make them, 
 and ethical ideals are not exempt from the 
 same inexorable law of environment. 
 
 To the ethical teachers of the middle ages 
 feudal rights did not seem to be wrongs. The 
 hardy pioneers of New England needed a dif- 
 ferent set of virtues from those which their 
 successors in a softer age have acquired; the 
 attempt to subdue the Indian by love, charity 
 and non-resistance would have meant not so 
 
SPIRITUAL FACTORS IN HISTORY 129 
 
 much the disappearance of evil as the disap- 
 pearance of the colonists. The moral ideal of 
 a frontier society is as legitimate from the 
 point of view of their needs as the very differ- 
 ent ideal of a later stage of society. The virtue 
 of hospitality is far more important in the pas- 
 toral stage than in the industrial. The ethical 
 relation of master to workmen under the factory 
 system is not the same as under the guild 
 system. The idea of honor and of the neces- 
 sity of duelling as a satisfaction for its violation 
 is peculiar to an aristocratic or military class ; 
 with the change of economic conditions which 
 make for democracy and industrialism, the con- 
 tent of the conception changes. We hear much 
 of the growth of international law and of the 
 application of ethical principles to international 
 relations. We forget that such principles can 
 come into existence only when the conditions 
 are ripe. Universal peace can exist only when 
 one country is so powerful that it dominates 
 all the others, — as in the case of imperial 
 Rome, — or when the chief nations have grown 
 to be on such a footing of equality that none 
 dares to offend its neighbor, and the minor 
 countries are protected by the mutual jealousies 
 of the great powers. 
 
130 ECONOMIC INTERPRETATION 
 
 Political ethics are here precisely like private 
 ethics. Individual vengeance does not dis- 
 appear until all the citizens are subjected to 
 the power of the strong tyrant, or until the 
 people are willing to abide by the decision of 
 the court, because of the conviction that before 
 the law they are all equal. International law 
 began when economic forces in the sixteenth 
 and seventeenth centuries made the first step 
 toward equality by converting the heteroge- 
 neous petty principalities into great nations ; 
 international justice and universal peace will 
 come only when the economic changes now 
 proceeding apace shall have converted the 
 struggling nations of the present day into a 
 few vast empires, dividing among themselves, 
 and gradually civilizing, the outlying colonial 
 possessions, thus attaining a condition of com- 
 parative economic equality. Economic equality 
 among individuals creates the democratic vir- 
 tues; economic equality among nations can 
 alone prepare the way for international peace 
 and justice. 
 
 Thus the economic interpretation of history, 
 correctly understood, does not in the least 
 seek to deny or to minimize the importance of 
 ethical and spiritual forces in history. It only 
 
SPIRITUAL FACTORS IN HISTORY 131 
 
 emphasizes the domain within which the ethi- 
 cal forces can at any particular time act with 
 success. To sound the praises of mercy and 
 love to a band of marauding savages would be 
 futile ; but when the old conditions of warfare 
 are no longer really needed for self-defence, 
 the moral teacher can do a great work in 
 introducing more civilized practices, which 
 shall be in harmony with the real needs of 
 the new society. It is always on the border 
 line of the transition from the old social neces- 
 sity to the new social convenience that the 
 ethical reformer makes his influence felt. With 
 the perpetual change in human conditions 
 there is always some kind of a border line, and 
 thus always the need of the moral teacher, to 
 point out the higher ideal and the path of 
 progress. Unless the social conditions, how- 
 ever, are ripe for the change, the demand of 
 the ethical reformer will be fruitless. Only 
 if the conditions are ripe will the reform be 
 effected. 
 
 The moral ideals are thus continually in the 
 forefront of the contest for progress. The 
 ethical teacher is the scout and the vanguard 
 of society; but he will be followed only if he 
 enjoys the confidence of the people, and the 
 
132 ECONOMIC INTERPRETATION 
 
 real battle will be fought by the main body of 
 social forces, amid which the economic condi- 
 tions are in last resort so often decisive. There 
 is a moral growth in society, as well as in the 
 individual. The more civilized the society, the 
 more ethical its mode of life. But to become 
 more civilized, to permit the moral ideals to 
 percolate through continually lower strata of 
 the population, we must have an economic 
 basis to render it possible. With every improve- 
 ment in the material condition of the great 
 mass of the population there will be an oppor- 
 tunity for the unfolding of a higher moral life ; 
 but not until the economic conditions of society 
 become far more ideal will the ethical develop- 
 ment of the individual have a free field for 
 limitless progress. Only then will it be pos- 
 sible to neglect the economic factor, which may 
 thenceforward be considered as a constant ; 
 only then will the economic interpretation of 
 history become a matter for archaeologists 
 rather than for historians. 
 
 Moral forces are, indeed, no less influential 
 in human society than the legal and political 
 forces. But just as the legal system, like the 
 political system, conforms at bottom to the 
 economic conditions, so the particular ethical 
 
SPIRITUAL FACTORS IN HISTORY 133 
 
 system or code of morality has been at any 
 given period very largely an outgrowth of the 
 social, and especially of the economic, life. If 
 by materialism we mean a negation of the 
 power of spiritual forces in humanity, the eco- 
 | nomic interpretation of history is really not 
 materialistic. But if by economic interpreta- 
 tion we mean — what alone we should mean — 
 that the ethical forces themselves are essen- 
 tially social in their origin and largely condi- 
 tioned in their actual sphere of operation by 
 the economic relations of society, there is no 
 real antagonism between the economic and 
 the ethical life. 
 
 The economic interpretation of history, in 
 the reasonable and moderate sense of the 
 term, does not for a moment subordinate 
 the ethical life to the economic life; it does 
 not even maintain that in any single indi- 
 vidual there is a necessary connection between 
 his moral impulses and his economic wel- 
 fare; above all it does not deny an inter- 
 pretation of economic institutions by ethical 
 or religious influences. It endeavors only to 
 show that in the records of the past the moral 
 uplift of humanity has been closely connected 
 with its social and economic progress, and 
 
134 ECONOMIC INTERPRETATION 
 
 that the ethical ideals of the community, which 
 can alone bring about any lasting advance in 
 civilization, have been erected on, and rendered 
 possible by, the solid foundation of material 
 prosperity. In short, the economic conception 
 of history, properly interpreted, does not neg- 
 lect the spiritual forces in history ; it seeks only 
 to point out the terms on which the spiritual 
 life has hitherto been able to find its fullest 
 fruition. 
 
CHAPTER IV 
 
 EXAGGERATIONS OF THE THEORY 
 
 We come now to the last count in the indict- 
 ment that has usually been found against the 
 theory of economic interpretation. It consists 
 of the objection that the theory involves us in 
 absurd exaggerations. In the way that it is 
 commonly put, however, this objection, even if 
 true, would be beside the mark. 
 
 It is indeed a fact that some of the enthusi- 
 astic advocates of economic interpretation have 
 claimed too much, or have advanced explana- 
 tions which are, for the present at least, not 
 susceptible of proof. Thus the most brilliant 
 of the Italian economists — Achille Loria — 
 has published a number of books 1 in which he 
 
 1 One of these has been translated by Professor Keasbey under 
 the title : The Economic Foundation of Society (i 899) . The origi- 
 nal Italian was published in 1885, and a third edition appeared in 
 1902 under the title Le Bd$i Economiche delta Costituzione Sociale. 
 His other important works bearing on the same general subject 
 are Analisi delta Proprieta Capitalista (1889), and his more 
 recent works, La Sociologia, it Suo Compito (1901), and IlCapita- 
 lismo e la Scienza (1901). 
 
 135 
 
136 ECONOMIC INTERPRETATION 
 
 has attempted to interpret a vast mass of his- 
 torical phenomena from the economic point of 
 view. Many of his statements are correct, and 
 have been successfully defended against the 
 attacks of his critics ; but some of his explana- 
 tions are obviously unsatisfactory. Above all 
 he has laid too much stress upon the influence 
 of land in modern society and has thus, in some 
 cases, injured rather than aided the general 
 theory of economic interpretation, of which 
 only the particular application — even if an 
 admirably suggestive one — is original with 
 him. 1 
 
 Other less brilliant writers have been guilty 
 of even more extreme statements. Thus some 
 have sought to make religion itself depend on 
 economic forces. In this contention there is 
 indeed a modicum of truth. We know that 
 the religion of a pastoral people is necessarily 
 different from that of an agricultural commu- 
 nity. Marx himself pointed out that " the neces- 
 
 1 It is a singular testimony to the neglect of Marx's writings 
 outside of Germany that so many critics in England, France and 
 Italy should have hailed Loria as the originator of the doctrine 
 of economic interpretation. Even Professor Keasbey is not 
 entirely free from this error. See the Translator's Preface 
 (p. ix) to the English edition. Loria himself, however, has made 
 no such claim. See his recent book, Marx e la sua Dottrina 
 (1902), esp. cap. 31 " Intorno ad alcune Critiche dell' Engels." 
 
EXAGGERATIONS OF THE THEORY 137 
 
 sity for predicting the rise and fall of the Nile 
 created Egyptian astronomy and with it the 
 dominion of the priests as directors of agricul- 
 ture." * A Russian scholar, who had no connec- 
 tion with socialism, has shown that somewhat 
 analogous conditions were responsible for the 
 theocracies of the other Oriental nations. 2 
 Hence it may be granted that there is an 
 undoubted economic element in the religions 
 of the past, as well as in those of the present. 8 
 Perhaps the most striking attempt, however, to 
 carry the theory beyond its legitimate bounds 
 is that which has sought the explanation of 
 Christianity itself in economic facts alone. 4 It 
 
 1 Capital (English Translation), p. 523, note 1. 
 
 2 Metschnikoff, La Civilisation et les Grandes Fleuves His- 
 toriques, 1889. Marx, of whom Metschnikoff was entirely igno- 
 rant, had said twenty years before : " One of the material bases of 
 the power of the state over the small disconnected producing 
 organisms in India was the regulation of the water supply." 
 Capital, p. 523, note 2. Kautsky was led by this passage to study 
 the conditions of the other Asiatic theocracies, and came to the 
 same conclusion without knowing anything of Metschnikoff, 
 whose book had appeared in the interval. See Die Neue Zeit, 
 IX (1899), p. 447, note. 
 
 3 Some of the social and economic aspects of modern religious 
 movements have been emphasized by Thomas C. Hall, The 
 Social Meaning of the Modern Religious Movement in England 
 (1900). 
 
 4 The economic interpretation of Christianity was first ad- 
 vanced by Kautsky in " Die Entstehung des Christenthums," Die 
 Neue Zeit, III (1885), pp. 481 and 529, and by Engels in his 
 
138 ECONOMIC INTERPRETATION 
 
 is indeed an accepted fact nowadays that much 
 of the opposition to Jesus was due to his radical 
 social programme and his alleged communistic 
 views; it is equally certain that the economic 
 conditions of the Roman Empire favored the 
 reception of these new ideas. To contend, 
 however, that Christianity was primarily an 
 economic movement is to ignore the function 
 of the spiritual forces which we have just been 
 discussing. 1 
 
 The theory of economic interpretation has 
 been applied not only to religion but even to 
 philosophy. The whole movement of thought, 
 for instance, which we associate with the words 
 Greek philosophy, has been explained in a pon- 
 derous volume as a phenomenon referable to 
 essentially economic causes. 2 Eleutheropou- 
 
 essay on " Bruno Bauer und das Urchristenthum " in the Zilricher 
 Sozialdenwkrat (1882), nos. 19, 20. It was developed by 
 Engels in a subsequent article in Die Neue Zeit, in 1894, by 
 E. H. Schmitt, also in Die Neue Zeit, XV (1897), i, p. 412, and 
 by Kautsky in the chapter on " Der urchristliche Kommunismus " 
 in the first volume of Die Geschichte des Sozialismus (1895). 
 
 1 Some of the objections have been urged by Hermann, 
 Sozialistische Irrlehren von der Entstehung des Christentums, 
 1899. Kohler, however, goes entirely too far in the other direction. 
 
 2 This view was first advanced by Dr. Stillich in an article in 
 Die NeneZeit, XVI, 1, p. 580. This turned out, however, to be a 
 plagiarism from the lectures of a Greek Privat-Docent, at Zurich, 
 mentioned in the next note. See Die Neue Zeit, XVI, 2, p. .154. 
 
EXAGGERATIONS OF THE THEORY 139 
 
 los, 1 it is true, denies that he is attempting to 
 prove the validity of historical materialism; for 
 he claims to be a " philosopher " rather than a 
 historical materialist, and he calls his theory 
 the " Grecian theory of development." 2 On 
 closer inspection, however, the difference be- 
 tween the two doctrines is scarcely discernible ; 
 for the author tells us that the "materialistic 
 conception of history furnishes the key to the 
 phenomenon of how the general character of 
 philosophy as a Weltanschauung displays itself 
 in different forms and shadings." He states 
 indeed that more than this it cannot do, and 
 that philosophy is also the product of the 
 philosopher as an individual. " The theory of 
 the economic relations of society as the cause 
 of becoming can therefore be true only in the 
 sense of the formal cause of development." 3 
 Yet in almost every section he attempts to 
 trace the connection between the particular 
 philosophic theory and the economic condi- 
 tions. It is needless to say that the attempt is 
 
 1 Wirthschaft imd Philosophie, oder die Philosophie und die 
 Lebens-Auffassung der jeweils Bestehenden Gesellschaft. Erste 
 Abtheilung: Die Philosophie und die Lebens-Auffassung des 
 Griechentums auf Grund der Gesellschaftlichen Zustande. Von 
 Abr. Eleutheropoulos, 1898 (2d ed., 1900). 
 
 2 Preface to second edition. 3 Op. cit., p. 16. 
 
140 ECONOMIC INTERPRETATION 
 
 far from successful. The social philosophy of 
 the Greeks is indeed an outcome of the social 
 conditions, as is to be expected ; but the search 
 for the ultimate principles of life and thought, 
 as we find it in the greatest of the Greek think- 
 ers, has no conceivable relation with the act- 
 ual economic conditions. The explanations of 
 Eleutheropoulos are almost always far-fetched. 
 
 The economic interpretation of philosophy 
 has not been confined to the Greek period. 
 Another writer, presumably a socialist, has fur- 
 nished an economic explanation of von Hart- 
 mann's philosophy, on the ground that the 
 German bourgeoisie is giving up its class 
 consciousness. 1 It is obviously not worth 
 while to discuss this seriously. 
 
 Other more or less extreme applications of 
 the theory are familiar to all. Among older 
 writers that flourished before the theory itself 
 was formulated, it will suffice to mention 
 Alison, who ascribed the downfall of the 
 Roman Empire to the monetary difficulties of 
 the period, and those Spanish historians who 
 made the decay of Spain turn upon the exten- 
 sion of the alcavala — the general tax on sales. 
 To come to more recent authors, we need but 
 
 1 Masaryk, Die Grundlagen des Marxismus, p. 146. 
 
EXAGGERATIONS OF THE THEORY 141 
 
 mention Mr. Brooks Adams 1 and Professor Pat- 
 ten, 2 who, amid much that is suggestive, have 
 centred their attention upon particular economic 
 conditions in the history of Rome and England 
 respectively, and have ascribed to these an in- 
 fluence on general national development out 
 of all proportion to their real significance. 
 
 Such invalid applications of the theory, how- 
 ever, do not necessarily invalidate the doctrine 
 itself. We must distinguish here, as in every 
 other domain of human inquiry, between the use 
 and the abuse of a principle. The difference 
 between the scientist and the fanatic is that the 
 one sees the limitations of a principle, where the 
 other recognizes none. To make any science or 
 any theory responsible for all the vagaries of its 
 over-enthusiastic advocates would soon result 
 in a discrediting of science itself. Wise men 
 do not judge a race by its least fortunate mem- 
 bers; fair-minded critics do not estimate the 
 value of a doctrine by its excrescences. 
 
 It is, however, important to remember that 
 the originators of the theory have themselves 
 called attention to the danger of exaggeration. 
 Toward the close of his career Engels, influ- 
 
 1 The Law of Civilisation and Decay. 
 
 2 The Developtnent of English Thought. 
 
142 ECONOMIC INTERPRETATION 
 
 enced no doubt by the weight of adverse criti- 
 cism, pointed out that too much had sometimes 
 been claimed for the doctrine. " Marx and I," 
 he writes to a student in 1890, "are partly re- 
 sponsible for the fact that the younger men 
 have sometimes laid more stress on the eco- 
 nomic side than it deserves. In meeting the 
 attacks of our opponents it was necessary for 
 us to emphasize the dominant principle, denied 
 by them ; and we did not always have the time, 
 place or opportunity to let the other factors, 
 which were concerned in the mutual action and 
 reaction, get their deserts." 1 In another letter 
 Engels explains his meaning more clearly : — 
 
 " According to the materialistic view of his- 
 tory the factor which is in last instance decisive 
 in history is the production and reproduction 
 of actual life. More than this neither Marx 
 nor I have ever asserted. But when any one 
 distorts this so as to read tjiat the economic 
 factor is the sole element, he converts the state- 
 ment into a meaningless, abstract, absurd phrase. 
 The economic condition is the basis, but the 
 
 1 This letter is printed in Der Sozialistische Akademiker, 
 October i, 1895, and is quoted by Greulich, Ueber die Materi- 
 alislische Geschichts-Auffassung (1897), p. 7, and by Masaryk, Die 
 Gnmdlagen des Marxismus (1899), p. 104. 
 
EXAGGERATIONS OF THE THEORY 143 
 
 various elements of the superstructure — the 
 political forms of the class contests, and their 
 results, the constitutions — the legal forms, and 
 also all the reflexes of these actual contests in 
 the brains of the participants, the political, 
 legal, philosophical theories, the religious views 
 . . . — all these exert an influence on the 
 development of the historical struggles, and in 
 many instances determine their form." 1 
 
 1 " Nach materialistischer Geschichts-auffassung ist das in 
 letzter Instanz bestimmende Moment in der Geschichte die Pro- 
 duktion und Reproduktion des wirklichen Lebens. Mehr hat 
 weder Marx noch Ich je behauptet. Wenn nun jemand das 
 dahin verdreht, das okonomische Moment sei das einzig bestim- 
 mende, so verwandelt er jenen Satz in eine nichtssagende, 
 abstrakte, absurde Phrase. Die okonomische Lage ist die Basis, 
 aber die verschiedenen Momente des Ueberbaues — politische 
 Formen des Klassenkampfes und seine Resultate — Verfassungen, 
 nach gewonnener Schlacht durch die siegende Klasse festgestellt, 
 u. s. w. — Rechtsformen, und nun gar die Reflexe aller dieser 
 wirklichen Kampfe im Gehirn der Beteiligten, politische, juristische, 
 philosophische Theorien, religiose Anschauungen und deren 
 Weiterentwicklung zu Dogmensystemen, liben auch ihre Ein- 
 wirkung auf den Verlauf der geschichtlichen Kampfe aus und 
 bestimmen in vielen Fallen vorwiegend deren Form. Es ist eine 
 Wechselwirkung aller dieser Momente, worin schliesslich durch 
 alle die unendliche Menge von Zufalligkeiten (d. h. von Dingen 
 und Ereignissen, deren innerer Zusammenhang untereinander so 
 entfernt oder so unnachweisbar ist, dass wir ihn als nicht vor- 
 handen betrachten, vernachlassigen konnen) als Notwendigkeit 
 die okonomische Bewegung sich durchsetzt. Sonst ware die 
 Anwendung der Theorie auf eine beliebige GeSchichtsperiode ja 
 leichter als die Lbsung einer einfachen Gleichung ersten Grades. 1 ' 
 Der Sozialistische Akademiker (October 15, 1895), p. 351, Re- 
 
144 ECONOMIC INTERPRETATION 
 
 To ascribe everything to economic changes 
 is plainly inadmissible. Engels himself pointed 
 out in another place that to attempt to explain 
 every fact of history on economic grounds is 
 not only pedantic but ridiculous. 1 Political con- 
 ditions and national traditions much more 
 often play an important role. To say, for in- 
 stance, that Brandenburg of all the German 
 states should have been selected to become the 
 great power of the future solely because of eco- 
 
 printed in Woltmann, Der Historische Materialistmis (1900), 
 p. 239. Cf. also Engels' view of the importance of idealistic 
 elements in a second letter of 1890 printed in the Leipziger Volks- 
 zeitung (1895), no. 250 (reprinted in Woltmann, p. 243), and 
 in a further letter of 1893 printed in the second edition of 
 F. Mehring's Geschichte der Deutschen Sozialdemokratie, Zweiter 
 Theil, p. 556. 
 
 1 " Es wird sich kaum ohne Pedanterie behaupten lassen, dass 
 unter den vielen Kleinstaaten Norddeutschlands gerade Branden- 
 burg durch dkonomische Notwendigkeit und nicht auch durch 
 andere Momente (vor alien seine Verwicklung, durch den Besitz 
 von Preussen, mit Polen und dadurch mit internationalen politi- 
 schen Verhaltnissen — die ja auch bei der Bildung der ostrei- 
 chischen Hausmacht entscheidend sind) dazu bestimmt war, die 
 Grossmacht zu werden, in der sich der okonomische, sprachliche 
 und seit der Reformation auch religiose Unterschied des Nordens 
 vom Sudem verkorperte. Es wird schwerlich gelingen, die 
 Existenz jedes deutschen Kleinstaates der Vergangenheit und 
 Gegenwart oder den Ursprung der hochdeutschen Lautverschie- 
 bung, die die geographische, durch die Gebirge von den Sudeten 
 bis zum Taunus gebildete, Scheidewand zu einem formlichen Riss 
 durch Deutschland erweiterte, Skonomisch zu erklaren, ohne sich 
 lacherlich zu machen." — Der Sozialistische Akademiker, loc. cit. 
 
EXAGGERATIONS OF THE THEORY 145 
 
 nomic considerations, is foolish. To claim that 
 every petty German principality was destined 
 to live or to die for economic reasons alone, 
 would be as absurd as to ascribe the difference 
 between the various German dialects solely to 
 economic causes. 
 
 Thus we see the doctrine of " historical ma- 
 terialism " in its crude form repudiated even by 
 its founders. And it is unfortunately true that 
 many " historical materialists," by the very ex- 
 aggeration and vehemence of their statements, 
 have brought discredit on a doctrine which, in 
 a sublimated form, contains so large an element 
 of truth and which has done so much for the 
 progress of science. 
 
CHAPTER V 
 
 TRUTH OR FALSITY OF THE THEORY 
 
 What then shall we say of the doctrine of 
 economic interpretation ? 
 
 That its authors originally claimed too much 
 for it, or at least framed the doctrine so as to 
 give rise to misconception, is undoubtedly true. 
 That some of its advocates have gone entirely 
 too far is equally sure. And it is above all 
 certain that the choice of the term " historical 
 materialism " is unfortunate. The materialistic 
 view of history, like the utilitarian theory of 
 morals, has had to suffer more because of its 
 name than because of its essence. The one is 
 as little sordid as the other. 
 
 The economic interpretation of history, cor- 
 rectly understood, does not claim that every 
 phenomenon of human life in general, or of 
 social life in particular, is to be explained on 
 economic grounds. Few writers would trace 
 the different manifestations of language or 
 even of art primarily to economic conditions; 
 
 146 
 
TRUTH OR FALSITY OF THEORY 147 
 
 still fewer would maintain that the various 
 forms of pure science have more than a remote 
 connection with social conditions in general. 
 Man is what he is because of mental evolution, 
 and even his physical wants are largely trans- 
 formed and transmuted in the crucible of 
 reasoning. The facts of mentality must be 
 reckoned with. 
 
 It is an error, 1 however, to suppose that the 
 theory of economic interpretation can be set 
 aside by refuting the supposed claim that the 
 economic life is genetically antecedent to the 
 social or the mental life. The theory makes 
 no such claim. 
 
 The whole contention as to the precedence 
 in time of an assumed cause over a given effect 
 is quite beside the mark. It reminds one of 
 the old query as to which came first — the egg 
 or the chicken. There is no longer any dis- 
 pute among biologists as to the influence of 
 environment. When, however, we speak of 
 the transformation of a given species, we do 
 not necessarily mean that the environment was 
 
 1 Committed, for instance, by my honored colleague, Professor 
 Giddings, in his interesting article, " The Economic Ages," Politi- 
 cal Science Quarterly (June, 1901). Almost the same argument 
 was made by Salvadori, La Scienza Econo7?iica e la Teoria deW 
 Evolusione ( 1 90 1 ) , pp . 5 8-63 . 
 
148 ECONOMIC INTERPRETATION 
 
 there first, and that the organism came later. 
 Without the environment there can indeed 
 be no change ; but without the organism there 
 can also be no change. The adaptation of the 
 organism to the environment simply means that 
 those among the existing variations are selected 
 which conduce most to the perpetuation of the 
 species. If there were no existing variations 
 or sports there would be no transformation. 
 The fact that the variation may have existed 
 before the change in environment occurs is no 
 objection to the theory of adjustment of the 
 organism to the environment. Although we 
 say that the organism is determined by the en- 
 vironment, it is quite immaterial which existed 
 first. 
 
 So it is with humanity. All human progress 
 is at bottom mental progress ; all changes must 
 go through the human mind. There is thus 
 an undoubted psychological basis for all human 
 evolution. The question, however, still remains : 
 What determines the thought of humanity ? 
 Even if we say that the answer is to be sought 
 in the social conditions, the statement is irre- 
 spective of the genetic antecedence of the so- 
 cial environment to the mental life. It is quite 
 true that the kernel of Marx's whole doctrine is 
 
TRUTH OR FALSITY OF THEORY 149 
 
 to be found in the celebrated sentence : " It is 
 not the consciousness of mankind that deter- 
 mines its existence, but on the contrary its so- 
 cial existence that determines its conscious- 
 ness." 1 However extreme this statement may- 
 be on its purely philosophical side, it is not 
 open to one criticism so frequently advanced; 
 it does not necessarily imply that the social 
 existence comes first, and the consciousness 
 afterwards. Such an implication is as unwar- 
 ranted as it would be in the analogous doctrine 
 of biology; when biologists tell us that the 
 organism is determined by the environment 
 they do not necessarily make any hypothesis 
 as to the priority of the one to the other. 
 The whole question of genetic antecedence is 
 unimportant. 
 
 Of far more significance, however, is the 
 criticism based on the alleged insufficiency of 
 the economic factor to explain the changes in 
 social life in general. There is little doubt 
 that the extreme advocates of "historical ma- 
 terialism " have laid themselves open to attack 
 
 1 " Es ist nicht das Bewusstsein der Menschen, das ihr Sein, 
 sondern ihr gesellschaftliches Sein, das ihr Bewusstsein bestimmt." 
 — Marx, Zur Kritik der Politischen Oekonomie, Vorwort, p. v. 
 The whole controversy of Hollitscher, Das Historische Gesetz 
 (1901), pp. 93 et seq., misses the real point. 
 
150 ECONOMIC INTERPRETATION 
 
 from philosophers and historians alike. They 
 have sometimes seemed to claim that all sociol- 
 ogy must be based exclusively on economics, 
 and that all social life is nothing but a reflex of 
 the economic life. 1 No such claim, however, 
 can be countenanced, and no such claim is 
 made by the moderate advocates of the theory. 
 The claim cannot be countenanced for the 
 obvious reason that economics deals with only 
 one kind of social relations, and that there are 
 as many kinds of social relations as there are 
 classes of social wants. We have not only 
 economic wants, but also moral, religious, jural, 
 political and many other kinds of collective 
 wants ; we have not only collective wants, but 
 individual wants, like physical, technical, aes- 
 thetic, scientific, philosophical wants. The 
 term " utility," which has been appropriated by 
 the economist, is not by any means peculiar to 
 him. Objects may have not only an economic 
 utility, but a physical, aesthetic, scientific, tech- 
 nical, moral, religious, jural, political or philo- 
 sophical utility. The value which is the 
 expression of this utility and which forms the 
 
 1 Among these extremists must be classed Loria, who has 
 advanced his views most clearly in his interesting work La Socio- 
 logia. In this he seeks to distinguish an economic sociology 
 from the biologic or psychologic sociology of other writers. 
 
TRUTH OR FALSITY OF THEORY 151 
 
 subject-matter of economics is only one sub- 
 division of a far greater class. For all the 
 world is continually rating objects and ideas 
 according to their aesthetic, scientific, technical, 
 moral, religious, jural, political or philosophical 
 value, without giving any thought to their eco- 
 nomic value. So far as utility and value are 
 social ijpL character, that is, so far as they depend 
 upon the relation of man to man, they form 
 the subject-matter of sociology. Economics 
 deals with only one kind of social utilities or 
 values and can therefore not explain all kinds 
 of social utilities or values. The strands of 
 human life are manifold and complex. 1 
 
 1 An interesting criticism of " historical materialism " from 
 this point of view and with especial reference to the influence of 
 economics on law is made by Rudolf Stammler, Professor of Law 
 in Halle, in his rather ponderous work, Wirthschaft tmd Recht 
 nach der Materialistischen Geschichtsauffasstmg (1896). Stamm- 
 ler is far fairer to Marx than most of the opponents of the 
 theory. He considers the attempt of Marx as in many ways 
 a most remarkable one and deserving of high praise; but he 
 nevertheless objects to the theory as unfinished and not com- 
 pletely thought out. Stammler does not contend that no 
 monistic explanation of social life is possible. In fact his own 
 synthesis is constructed on teleological lines — an explanation 
 which regards all past social life in the light of social purposes or 
 a social ideal. With special reference to the relation between 
 law and economics, he defines social life as a " common activity 
 regulated from without " (ein ausserlich geregeltes Zusammen- 
 wirken), and maintains that these external rules govern at once 
 the legal, political, economic and other social relations. It is un- 
 
152 ECONOMIC INTERPRETATION 
 
 In this aspect, what is untrue of the individ- 
 ual cannot be true of the group of individuals. 
 We have passed beyond the time when it 
 was incumbent to explain the fallacy lurking 
 in the phrase " the economic man." There is 
 indeed an economic life and an economic mo- 
 tive — the motive which leads every human 
 being to satisfy his wants with the least outlay 
 of effort. But it is no longer necessary to show 
 that the individual is impelled by other motives 
 than the economic one, and that the economic 
 motive itself is not everywhere equally strong, 
 or equally free from the admixture of other 
 influences. A full analysis of all the motives 
 that influence men, even in their economic life, 
 would test the powers of the social psycholo- 
 gist. There is no "economic man," just as 
 there is no " theological man." The merchant 
 has family ties just as the clergyman has an 
 appetite. 
 
 The wealth which forms the subject-matter 
 of economic activity can be increased only 
 through the multiplication of commodities ; 
 but this multiplication can take place only in 
 
 philosophical, then, so he tells us, to claim that any one set of 
 social relations is the general cause or explanation of other social 
 relations. They are all the common product of the same cause. 
 
TRUTH OR FALSITY OF THEORY 153 
 
 connection with an increased demand. In- 
 creased demand, however, means a diversifica- 
 tion, of wants. The things wanted by an 
 individual depend in last resort on his aesthetic, 
 intellectual and moral condition. The eco- 
 nomic life is thus ultimately bound up with the 
 whole ethical and social life. Deeper than is 
 often recognized is the meaning of Ruskin's 
 statement, " There is no wealth but life," and 
 of his further claim, " Nor can any noble thing 
 be wealth except to a noble person." The goal 
 of all economic development is to make wealth 
 abundant and men able to use wealth correctly. 
 
 If society, then, is an aggregation of individ- 
 uals, and if history is the record of the activities 
 of the social group and its constituent elements, 
 history is the parti-colored garb of humanity. 
 
 In one sense, accordingly, there are as many 
 methods of interpreting history as there are 
 classes of human activities or wants. There is 
 not only an economic interpretation of history, 
 but an ethical, an aesthetic, a political, a jural, 
 a linguistic, a religious and a scientific inter- 
 pretation of history. Every scholar can thus 
 legitimately regard past events from his own 
 particular standpoint. 
 
 Nevertheless, if we take a broad view of hu- 
 
154 ECONOMIC INTERPRETATION 
 
 man development, there is still some justifica- 
 tion for speaking of the economic interpretation 
 of history as the important one, rather than of 
 an economic interpretation among other equally 
 valid explanations. The broad reasons which 
 lead to this conclusion may be summed up 
 as follows. 
 
 Human life has thus far not been exempt 
 from the inexorable law of nature, with its 
 struggle for existence through natural selection. 
 This struggle has assumed three forms. We 
 find first the original struggle of group with 
 group, which in modern times has become the 
 contest of people with people, of nation with 
 nation. Secondly, with the differentiation of 
 population there came the rivalry of class with 
 class : first, of the sacerdotal with the military 
 and the industrial class ; later, of the moneyed 
 interest with the landed interest ; still later, of 
 the labor class with one or all of the capitalist 
 classes. Thirdly, we find within each class 
 the competition of the individuals to gain the 
 mastery in the class. These three forms of 
 conflict are in last resort all due to the pressure 
 of life upon the means of subsistence; indi- 
 vidual competition, class competition and race 
 competition are all referable to the niggard- 
 
TRUTH OR FALSITY OF THEORY 155 
 
 liness of nature, to the inequality of human 
 gifts, to the difference in social opportunity. 
 Civilization indeed consists in the attempt to 
 minimize the evils, while conserving the bene- 
 fits of this hitherto inevitable conflict between 
 material resources and human desires. As 
 long, however, as this conflict endures, the pri- 
 mary explanation of human life must continue 
 to be the economic explanation — the explana- 
 tion of the adjustment of material resources to 
 human desires. This adjustment may be modi- 
 fied by aesthetic, religious and moral, in short, 
 by intellectual and spiritual forces ; but in last 
 resort it still remains an adjustment of life to 
 the wherewithal of life. 
 
 When a more ideal economic adjustment is 
 finally reached — that is, when science shall 
 have given us a complete mastery over means 
 of production, when the growth of population 
 shall be held in check by the purposive activ- 
 ity of the social group, when progress in the 
 individual and the race shall be possible with- 
 out any conflict except one for unselfish ends, 
 and when the mass of the people shall live as 
 do to-day its noblest members — then, indeed, 
 the economic conditions will fall into the back- 
 ground and will be completely overshadowed 
 
156 ECONOMIC INTERPRETATION 
 
 by the other social factors of progress. But 
 until that period is reached, the economic con- 
 ditions of the social group and of the mass 
 of individuals must continue to retain their 
 ascendency. 
 
 From the beginning of social life up to 
 the present the rise, the progress and the 
 decay of nations have been largely due to 
 changes in the economic relations, internal 
 and external, of the social groups, even though 
 the facility with which mankind has availed 
 itself of this economic environment has been 
 the product of intellectual and moral forces. 
 While the study of the economic factors alone 
 will manifestly not suffice to enable us to 
 explain all the myriad forms in which the 
 human spirit has clothed itself since history 
 began, it is none the less true that so long as 
 the body is not everywhere held in complete 
 subjection to the soul, so long as the struggle 
 for wealth does not everywhere give way to 
 the struggle for virtue, the social structure 
 and the fundamental relations between social 
 classes will be largely shaped by these over- 
 mastering influences, which, whether we ap- 
 prove or deplore them, still form so great a 
 part of the content of life. 
 
TRUTH OR FALSITY OF THEORY 157 
 
 Human activity is indeed the activity of 
 sentient beings, and, therefore, the history of 
 mankind is the history of mental development ; 
 but human life depends upon the relation be- 
 tween the individual and his environment. In 
 the struggle that has thus far gone on between 
 individuals and groups in their desire to make 
 the best of their environment, the paramount 
 considerations have necessarily been economic 
 in character. The view of history which lays 
 stress on these paramount considerations is 
 what we call the economic interpretation of 
 history. They are not the exclusive considera- 
 tions, and in particular instances the action 
 and reaction of social forces may give the 
 decisive influence to non-economic factors. 
 Taking man, however, for what he has thus 
 far been and still is, it is difficult to deny that 
 the underlying influence in its broadest aspects 
 has very generally been of this economic char- 
 acter. The economic interpretation of history,' 
 in its proper formulation, does not exhaust the 
 possibilities of life and progress; it does not 
 explain all the niceties of human development ; 
 but it emphasizes the forces which have hitherto 
 been so largely instrumental in the rise and 
 fall, in the prosperity and decadence, in the 
 
158 ECONOMIC INTERPRETATION 
 
 glory and failure, in the weal and woe of na- 
 tions and peoples. It is a relative, rather than 
 an absolute, explanation. It is substantially- 
 true of the past; it will tend to become less 
 and less true of the future. 
 
CHAPTER VI 
 
 FINAL ESTIMATE OF THE THEORY 
 
 If we ask, in conclusion, what importance 
 shall be assigned to the theory of economic 
 interpretation, we must consider it from two 
 different points of view. 
 
 From the purely philosophical standpoint, it 
 may be confessed that the theory, especially in 
 its extreme form, is no longer tenable as the 
 universal explanation of all human life. No 
 monistic interpretation of humanity is possible, 
 or, at all events, none will be possible until that 
 most difficult of all studies — sociology — suc- 
 ceeds in finally elaborating the laws of its exist- 
 ence and thus vindicating its claim to be a real 
 science. As a philosophical doctrine of uni- 
 versal validity, the theory of " historical mate- 
 rialism " can no longer be successfully defended. 
 
 But in the narrower sense of economic inter- 
 pretation of history — in the sense, namely, that 
 the economic factor has been of the utmost im- 
 portance in history, and that the historical 
 
 iS9 
 
160 ECONOMIC INTERPRETATION 
 
 factor must be reckoned with in economics — the 
 theory has been, and still is, of considerable sig- 
 nificance. What is this significance to eco- 
 nomics as well as to history ? 
 
 In economics the old controversy as to the 
 respective merits of the deductive and the in- 
 ductive methods has been laid to rest. It is 
 now recognized that both methods are legitimate 
 and even necessary. The older antagonism to 
 the quest for natural law in economics is now 
 seen to be due to a confusion of thought and 
 to a mistaken identification of natural law 
 with immutable precepts. When the earlier 
 writers spoke of the law of free trade, or of the 
 inexorable law of laissez faire, they did not use 
 the term " law " in the sense of scientific law, 
 or a statement of the necessary relations be- 
 tween facts. Yet this is the only sense in 
 which the term is properly employed. The 
 removal of the older teleological connotation 
 has left the conception of natural law in eco- 
 nomics as innocent and as valuable as it is in 
 any so-called pure science. While the explana- 
 tion of what actually exists, however, forms an 
 undoubted part of all science, the study of how 
 these things have come to be what they are is 
 perhaps of more importance in the social disci- 
 
FINAL ESTIMATE OF THE THEORY . 161 
 
 plines than in all others. The realization of 
 the fact that social institutions are products of 
 evolution, and that they thus form historical 
 and relative categories, instead of being abso- 
 lute categories, is the one great acquisition of 
 modern economics, which differentiates it toto 
 ccelo from that of earlier times. 
 
 The acceptance of the principle of growth 
 and of historic relativity is due to several 
 causes. The historical school of jurisprudence 
 in Germany, under Savigny and Eichhorn, 
 did much to prepare men's minds for the re- 
 ception of what now seems an obvious truth in 
 legal science. The historical school of econo- 
 mists, under Roscher, Hildebrand and Knies, 
 did more to familiarize the public with the 
 newer conception. The influence of Darwin 
 and the application of Darwinian methods to 
 social science by Spencer and Wallace did still 
 more to reenforce the idea of growth by the 
 doctrines of evolution and natural selection. 
 The jurisconsults, however, confined themselves 
 to law, the historical economists, at the begin- 
 ning at least, did not realize the connection 
 between the economic and the wider social life, 
 and the Darwinians came on the scene at a 
 later date. Comte, indeed, influenced no doubt 
 
162 ECONOMIC INTERPRETATION 
 
 by Saint-Simon, had called attention to the 
 relation between economics and sociology, but 
 his own fund of economic knowledge was ex- 
 ceedingly slight. Long before Spencer wrote, 
 Karl Marx, in a way undreamt of by the his- 
 torical economists and unrecognized by Comte, 
 not only stated that every economic institution 
 is an historical category, but pointed out in a 
 novel and fruitful way the connection between 
 economic and social facts. 
 
 It is always hazardous to ascribe a complex 
 change of thought to simple causes, and there is 
 no doubt that the newer stream of economic 
 thought is due to various currents of influence; 
 but it is safe to predict that when the future his- 
 torian of economics and social science comes to 
 deal with the great transition of recent years, he 
 will be compelled to assign to Karl Marx a far 
 more prominent place than has hitherto been 
 customary outside of the narrow ranks of the 
 socialists themselves. In pure economic theory 
 the work of Karl Marx, although brilliant and 
 subtle, will probably live only because of its 
 critical character ; but in economic method and 
 in social philosophy, Marx will long be remem- 
 bered as one of those great pioneers who, even 
 if they are not able themselves to reach the 
 
FINAL ESTIMATE OF THE THEORY 163 
 
 goal, nevertheless blaze out a new and prom- 
 ising path in the wilderness of human thought 
 and human progress. The economic interpre- 
 tation of history, in emphasizing the historical 
 basis of economic institutions, has done much 
 for economics. 
 
 On the other hand, it has done even more for 
 history. It has taught us to search below the 
 surface. The great-man theory of history, 
 which was once so prevalent, simplified the 
 problem to such an extent that history was in 
 danger of becoming a mere catalogue of dates 
 and events. The investigation of political and 
 diplomatic relations indeed somewhat broad- 
 ened the discipline and for a long time occu- 
 pied the energies of the foremost writers. The 
 next step in advance was taken when, under 
 the influence of the school of historical juris- 
 prudence, more attention was paid to the rela- 
 tions of public law, and when political progress 
 was shown to rest largely on the basis of con- 
 stitutional history. The study of the develop- 
 ment of political institutions gradually replaced 
 that of the mere record of political events. 
 Legitimate and indispensable as was this step, 
 it did not go far enough. Those writers, still 
 so numerous, who understand by history pri- 
 
1 64 ECONOMIC INTERPRETATION 
 
 marily constitutional history, show that they 
 only half comprehend the condition and the 
 spirit of modern historical science. 
 
 The newer spirit in history emphasizes not 
 so much the constitutional as the institutional 
 side in development, and understands by insti- 
 tutions, not merely the political institutions, 
 but the wider social institutions of which the 
 political form only one manifestation. The 
 emphasis is now put upon social growth, and 
 national as well as international life is coming 
 more and more to be recognized as the result 
 of the play and interplay of social forces. It is 
 for this reason that history is nowadays at 
 once far more fascinating and immeasurably 
 more complicated than was formerly the case. 
 History now seeks to gauge the influence of 
 factors some of which turn out to be exceed- 
 ingly elusive. It attempts to introduce into the 
 past the outlines of a social science whose very 
 principles have not yet been adequately and 
 permanently elaborated. 
 
 Whatever be the difficulties of the task, how- 
 ever, the new ideal is now more and more 
 clearly recognized. In the formulation of this 
 new ideal the theory of economic interpretation 
 has played an important, if not always a con- 
 
FINAL ESTIMATE OF THE THEORY i6j 
 
 sciously recognized, role. It is not that the 
 historian of the future is to be simply an eco- 
 nomic historian, for the economic life does not 
 constitute the whole of social life. It is, however, 
 the theory of economic interpretation that was 
 largely responsible for turning men's minds to 
 the consideration of the social factor in history. 
 Marx and his followers first emphasized in a 
 brilliant and striking way the relation of certain 
 legal, political and constitutional facts to eco- 
 nomic changes, and first attempted to present a 
 unitary conception of history. Even though it 
 may be conceded that this unitary conception 
 is premature, and even if it is practically certain 
 that Marx's own version of it is exaggerated, if 
 not misleading, it is scarcely open to doubt that 
 through it in large measure the ideas of his- 
 torians were directed to some of the momen- 
 tous factors in human progress which had 
 hitherto escaped their attention. Regarded 
 from this point of view the theory of economic 
 interpretation acquires an increased signifi- 
 cance. Whether or not we are prepared to 
 accept it as an adequate explanation of human 
 progress in general, we must all recognize the 
 beneficent influence that it has exerted in stim- 
 ulating the thoughts of scholars and in broad- 
 
166 ECONOMIC INTERPRETATION 
 
 ening the concepts and the ideals of history 
 and economics alike. If for no other reason, it 
 will deserve well of future investigators and 
 will occupy an honored place in the record of 
 mental development and scientific progress. 
 
PROGRESSIVE TAXATION. 
 
 BY 
 
 EDWIN R. A. SELIGMAN, 
 
 Professor of Political Economy and Finance, Columbia University. 
 
 8vo. Paper. $1.00. Cloth. $1.50. 
 
 {AMERICAN ECONOMIC ASSOCIATION PUBLICATIONS^ 
 
 COMMENTS. 
 
 " Its full and scholarly discussion must prove extremely useful." 
 
 — The Critic, July, 1894. 
 
 " Professor Seligman is probably the greatest authority on this im- 
 portant but intricate subject that we have in this country." 
 
 — Philadelphia Call, June, 1894. 
 
 "The author is considerate of opposing theories, slow to condemn, 
 kindly, genial, scholarly, and judicious." — Social Economist, July, 1894. 
 
 " A marvellously complete account of the development. . . . The 
 thread of the argument is never lost, and the criticisms of this vast 
 mass of literature are so clearly thought out and so convincingly pre- 
 sented that this writer about authorities clearly establishes his own 
 position as an authority second to no other. It is a magnificent piece 
 of work." — The Outlook, November, 1895. 
 
 FOREIGN COMMENT. 
 
 " Professor Seligman's masterly series of studies." 
 
 — The Economic Jotirnal, London, 1894. 
 
 "A remarkable work." 
 
 — National-Okonomisk Tidskift, Copenhagen, 1895. 
 
 "The best and most comprehensive work on the subject that exists 
 in any language." — Finanz-Archiv, Stuttgart, 1896. 
 
 " Most notable for the precision and the dispassionate impartiality 
 of its criticisms." — L 1 Idea Liberate, Milan, January, 1896. 
 
 THE MACMILLAN COMPANY, 
 
 66 FIFTH AVENUE, NEW YORK. 
 
ESSAYS IN TAXATION. 
 
 BY 
 
 EDWIN R. A. SELIGMAN, 
 
 Professor of Political Economy and Finance, Columbia University. 
 
 Third Edition, 1900. 
 
 8vo. Cloth, gilt top. $3.00 net. 
 
 COMMENTS. 
 
 " Replete with information. Every chapter bears witness to the 
 profundity of his erudition and to the strength of his devotion to his 
 theme." — The Independent, March, 1896. 
 
 " A clear-headed man, with a perspicuous style. He explains the 
 difficult subject of taxation so that any man with an attentive mind can 
 understand him." — Boston Evening Transcript, February, 1896. 
 
 " A very careful study. The author seems to have but few if any 
 hobbies, and only aims to reach wise conclusions upon questions so 
 little understood by even our lawmakers." 
 
 — Chicago Inter-Ocean, November, 1895. 
 
 " Essays whose solidity, vigor, and accuracy have challenged admira- 
 tion. ... A book which is capable of holding its own with the best 
 writings in the better known languages. — The Nation, February, 1896. 
 
 " No one has investigated the subject with more thorough or with 
 more brilliant success. . . . Should find its way into the hands of any 
 citizen who loves his country." — The Sewanee Review, May, 1896. 
 
 "The present volume is, if anything, superior to any of his previous 
 works. His broad and accurate scholarship, his scientific method, his 
 clearness and fulness, and at the same time compactness, of statement 
 are here shown to good advantage." 
 
 — Boston Commonwealth, December, 1895. 
 
 " By far the best writer on American taxation. His work is among 
 the very strongest in any country. With such scholarly leadership re- 
 form may come in a conservative and rational rather than in a revolu- 
 tionary way." — Bibliotheca Sacra, Chicago, 1896. 
 
 " No student of finance will feel that he has a right to an opinion until 
 he has read whatever Professor Seligman may have written. . . . The 
 volume constitutes the most important contribution to the science that 
 has yet appeared." — Annals of the American Academy, March, 1896. 
 
 THE MACMILLAN COMPANY, 
 
 66 FIFTH AVENUE, NEW YORK. 
 
ESSAYS IN TAXATION. 
 
 FOREIGN COMMENT. 
 
 " A gratifying instance of the vitality and vigour of one of the oldest 
 and greatest of American universities, in a department where, it is to 
 be hoped, these bodies may some day be rivalled by Oxford and Cam- 
 bridge." — The Speaker (London), July, 1896. 
 
 " One of the few economists who have influenced the politicians. 
 Every one will feel the reason of this influence; there is a fine grasp of 
 principles; there is a close contact with facts; there is a constant test- 
 ing of the one by the other." — Nature (London), March, 1896. 
 
 " His ability and knowledge are beyond dispute. He does not allow 
 the stores of his erudition to encumber his reasoning. The student 
 owes a special debt of gratitude to the author who, while careful to 
 ascertain and to present the facts, is able also to bring out their mean- 
 ing with lucidity and emphasis." — The Economic Journal, March, 1896. 
 
 "A remarkable series of essays which have secured for him a position 
 of the highest eminence amongst the writers, both in Europe and 
 America. The student will feel scarcely less grateful for the frankness 
 and courage with which the author states his conclusions, than for the 
 knowledge and skill with which he seeks for the solution of the prob- 
 lems." — Newcastle Daily Chronicle, July, 1896. 
 
 " So simple, so fresh, and so penetrating that it is scarcely credible 
 how in other countries so much empty abstraction and foggy erudition 
 are wasted on the subject. America, you are more fortunate than 
 we." — Die Zeit (Vienna), 1896. 
 
 "The author, thanks to his world-wide erudition, possesses a range 
 of view superior to that of any other living writer on finance." — Jahr- 
 buch fur Gesetzebung Verwaltung und Volkswirthschaft (Leipzig), 
 1896. 
 
 "The author is distinguished not only in America, but in the wider 
 world of international scientific literature, for his exquisite grasp of 
 method, as well as for his happy mental equilibrium. His works teem 
 with fine analysis and penetrating investigations; they abound in sim- 
 ple and acute discussions; they are noteworthy for their erudition and 
 the novelty of their views. The book richly deserves all the praise 
 that has been accorded to it in so many quarters." 
 
 — Giornale degli Economisti (Rome), May, 1896. 
 
 THE MACMILLAN COMPANY, 
 
 66 FIFTH AVENUE, NEW YORK. 
 
THE SHIFTING AND INCIDENCE OF 
 TAXATION. 
 
 BY 
 
 EDWIN R. A. SELIGMAN, 
 
 Professor of Political Economy and Finance, Columbia University. 
 
 Second Edition, 1899. 
 
 8vo. Cloth, gilt top. $3.00 net. 
 
 COMMENTS. 
 
 " The most scholarly work that has yet appeared in America." 
 
 — Christian Union (The Outlook), 1892. 
 
 " One of the most brilliant contributions America has made to finance. 
 Its solidity, logical analysis, clearness of statement, and general scien- 
 tific soundness cannot fail to procure for it a high place in economic 
 literature." — Annals of the American Academy, 1893. 
 
 " In firm grasp of fundamental principles, masterly power of analysis, 
 and clearness of statement, Professor Seligman cannot be excelled." 
 
 — N. Y. Commercial Advertiser, 1899. 
 
 "The new edition does high honor to the Columbia Series. . . . 
 Since its appearance no important work has been published in any 
 country which has not paid deference to the scholarship displayed in 
 the volume." — Annals of the American Academy, 1899. 
 
 FOREIGN NOTICES. 
 
 " Always stimulating and suggestive." — The Saturday Review, 1899. 
 
 " A model of compactness and lucidity." 
 
 — The Guardian (London), 1899. 
 
 " The most important work of the foremost living authority on taxa- 
 tion." — Newcastle Leader, 1899. 
 
 " One of the best treatises on the subject, and certainly the most 
 complete." — Journal des Ecoiiomistes (Paris), 1893. 
 
 "A valuable study which deserves a place among the best works on 
 the subject." — Z' Economista (Florence, Italy), 1893. 
 
 " A second edition of a work on such a topic is exceedingly rare. In 
 this case the success is completely justified. ... It is not only the 
 best of all existing treatises on the subject, but it may in fact be de- 
 clared to be a literary and scientific masterpiece." 
 
 Jahrbiicher fur JVationaloehonomie (Jena), 1 900. 
 
 THE MACMILLAN COMPANY, 
 
 66 FIFTH AVENUE, NEW YORK. 
 
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