Engels discusses the theories of modern socialism in chapter two of part three of his book Anti-Dühring: Herr Eugen Dühring's Revolution in Science. We are informed that socialism is a politico-economic theory based on the materialist conception of history. Unlike idealist conceptions that history is based on the great ideas and actions of famous individuals (the view of Bertrand Russell for one), or guided by spiritual forces, or the expression of a grand plan set up by some deity or other (there are several choices as to which deity came up with the plan) materialists believe that the existence of the various institutions and social structures that have developed overtime, and by which various groups of humans arrange their social institutions, belief patterns, and social relations are to be understood, in the last analysis, by a study of how they interact to make their daily bread (production) and how they come to distribute what they made to each other (distribution). Thus the causes of the different phases of human development , Engels says, "are to be sought, not in the philosophy but in the economics of each particular epoch."
Today, Engels says (he means the 1870s in Europe but his comments are still as true now as then) there is a growing sense that something is basically wrong and unfair in how our national and international economic system operates. It can't employ all who wish to work, millions of people are living in poverty, famines droughts brought about by human activity engulf large sections of the globe and hunger stalks the streets of many of our largest cities, families are homeless and uprooted, and our schools and colleges fail to properly educate the youth to understand the world they live in. Yet a very small group of wealthy people grow richer and richer while the vast majority of humanity suffers and wastes away.
This shows, according to Engels, that new ways of production and distribution have evolved and that the social order we live in has not kept up with these developments. In fact our social order has become dysfunctional and is holding back all the possible potential improvements in human welfare that the new productive and distributive powers could provide. It is the task of socialists to discover and point out the current impediments which prevent the productive system from reaching its full potential and to discover the means of benefiting all humanity rather than just a small portion. And, he says: "These means are not to be invented, spun out of the head, but discovered with the aid of the head in the existing material facts of production."
Our present society is the creation of a class of people consisting of merchants, shopkeepers, owners of small manufacturing concerns, all those who made their living either by buying, selling, and trading commodities, small farmers who trucked their product to market and those who ministered to them (doctors, lawyers, teachers and preachers). Underneath this class was a class of laborers who made the commodities, or helped in their storage and distribution, upon which the former relied for their income. This latter class became the working class of today and the former the class of people living off of the surplus value created by the working class. Marx and others referred to them as the bourgeoisie or capitalists.
This mode of production, the creation of commodities for a market, has come to be called capitalism. The first capitalists found themselves subservient to a powerful ruling class of nobles consisting of feudal lords and (mostly) hereditary monarchs who lived by means of agricultural exploitation of serfs and taxation of the income of the developing bourgeoise. This ruling class stifled the productive capacity of the bourgeoise and prevented it from reaching its true potential. In other words, the bounds within which the feudal system restricted the capitalists were incompatible with that class's growing mode of production and so, Engels says, the "bourgeoisie broke up the feudal system and built upon its ruins the capitalist order of society."
Once the feudal bonds were broken (the French Revolution was one of the most dramatic instances) the capitalist mode of production flourished and developed the productive forces of society to unprecedented heights, only in its turn to find that its own associated method of distribution contradicted its mode of production. The social product is a collective creation of working people in all the branches of production but it is appropriated by a small number of capitalists who own and control the means by which this social product is created. The social product is then distributed in a way that increases the social wealth of the capitalist class at the expense of the well being of the working people, ultimately leading to their impoverishment. The only way the working people can free themselves from the exploitation of the capitalist class is by uniting together and abolishing it.
This conflict is waged daily in every work place, factory, field, and mine where the capitalist mode of production holds sway. This very active and real class warfare is a feature, 24/7, of daily life in almost every country on the face of the earth, and just like high blood pressure (the silent killer) it is going on and even intensifying whether the people involved are aware of it or not.
Engels says, "Modern socialism is nothing but the reflex in thought , of this conflict in fact; its ideal reflection in the minds, first, of the class directly suffering under it, the working class." The fact that in many countries many, and even most, working people are lacking this "reflex in thought" is testament to the power of the capitalist class, through its mass media and control of the education system, means of entertainment, and professional sports, to fill the heads of working people with illusions and a false sense of reality.
How did this class warfare between workers and capitalists begin? It was not to be found in the Middle Ages because the peasant farmers and handicraft men, or their families, made their own necessities by and large, and the products of their labor belonged to them. They could use them themselves or take them to market as commodities or pay their taxes and feudal dues in kind or exchange them with one another.
With the progress of invention it was possible for a person to set up shop with, say, many looms, and put many hands to work side by side with the peasant with his own loom in his hut making products for himself. Now the product of the man with many looms belonged to him and loom workers were given wages.
Engels says the old division of labor of the peasant village with products being exchanged in kind began to break up as this primitive factory system began to evolve. "In the midst of the old division of labour, grown up spontaneously and upon no definite plan, which had governed the whole of society, now arose division of labor upon a definite plan, as organized in the factory; side by side with individual production appeared social production." Planning locally, and eventually central planning, was a major feature of the success of capitalism. Whatever the problems of 20th century socialism were, they did not result from the use of central planning per se.
As the capitalist system evolved it eventually replaced individual production with social production but kept in place individual appropriation of the products that were produced-- thus creating a new class of exploited human beings that became known as the proletariat who soon began to stand outcast and starving amid the wonders they had made, which wonders were now the property of the bourgeoisie.
As production for a market became more and more wide spread it was soon discovered, Engels points out, that: "Anarchy reigns in socialized production." This is because no one can really tell what the fate of the the commodities they are making will be, will there be a demand for them, will they be sold at a profit or loss. Even with the planning involved in setting up the factory system there always remains this risk factor under capitalism.
Capitalism thus finds itself subject to the laws of EXCHANGE ("the only persistent form of social interrelations") which manifest themselves in competition. The anarchy became exacerbated since capitalism destroys competing modes of production and will not co-exist with them; thus handicrafts were replaced by the system of manufacture and manufacture by steam powered machinery.
This all happened under pressure of the age of discovery, starting roughly with the voyages of Columbus, and planting of colonies which vastly increased the number of markets and sealed the fate of the handicraft system which could not keep up with demand. It also led to the outbreaks of wars between nations fighting for market share-- a form of anarchistic behavior that still marks the world capitalist system.
It is at this point that Engels turns to Darwinian images to describe the relations of capitalists to one another. Both Marx and Engels were very impressed with The Origin of Species but neither were so-called "social Darwinists." Nevertheless today's globalization is simply an extension of the world market of the nineteenth century that Engels described as a universal struggle of existence between different capitalist elites and whole nations and those who fail are "remorselessly cast aside"-- unless, of course they get government stimulus money and bailouts.
"It is," Engels says, "the Darwinian struggle of the individual for existence transferred from nature to society with intensified violence." Capitalism reduces humanity back to its natural animal form of existence. This is the result of the intensification of the contradiction between socialized mode of production and the private capitalist appropriation of the social product.
One of the results of the unfettered competition between capitalists is that they lose control of their own economic system, as we see going on at present, and as it crashes the anarchy of production (which also reigns in the financial sector) forces "the great majority" of the people into becoming "proletarians." The current Occupy Wall Street Movement (OWSM) reflects the fact the "middle class" (actually a better paid strata of the working class mixed with small business people and professionals) is being forced into lower paid jobs, unemployment, bankruptcy, and debt and sees no way out for itself in this economy. They are becoming part of the surplus population (from the point of view of the capitalists) and don't like it. They have yet to fully realize that this is the natural outcome of capitalism and their only hope for a better life is to support socialist economic measures.
The OWSM is a natural response to what is the latest breakdown in the capitalist system. Engels dates the first general breakdown to the Crisis of 1825-- caused by over speculation by the banks (esp. the Bank of England) in unsound investments in Latin America (esp. Peru). Just as our current crisis, investors were given misinformation about the soundness of their investments and when the market collapsed were left holding bag. The banks use the term "asymmetric information" to note that what they know about the investment and what you know is different. The term "fraud" would be more to the point. In 1825 France bailed out England, in our current crisis the US taxpayers bailed out the banks.
These panics used to occur about every ten years but there was some stabilization after World War II and we had about 60 years of minor panics and recessions before this current world wide on going economic crash of the capitalist system-- with no end in sight. However, for Engels, what looks like a financial crisis is really a crisis in production. Socialized production has made too many goodies for the markets so factories laid off working people who then could not pay their bills-- esp. the fraudulent mortgages. Since the financial sector had cooked up so many mortgages based on "asymmetric information" the whole economy began to fall apart.
So many factories remain closed or under utilized that unemployment balloons, and the great productive forces available to our economy are dormant until the capitalists can figure how to get them going again in such a way that they, not the American people, can once again appropriate the wealth that will be created by the workers. The added twist of our day is that capitalists, their industries having become unproductive during the down turn, add to their profits by getting out of paying taxes, by adding fees and surcharges to service products, and by hiking interest rates to private borrowers (credit cards for example) even while commercial interest rates are held low by government intervention via the Federal Reserve.
As the corporate world flounders, as the auto industry recently did, it relies on "its official representative"-- namely the state-- to come to its aid. It should be obvious to all that the state which Lincoln called "of the people, for the people, by the people" is now "of, for, and by the corporations"-- it is their referee.
Engels says that the state will eventually be forced to take over the commanding heights of the economy simply because the capitalists can no longer control them due to the growing contradiction between the socialized productive forces (masses of workers united with or without unions in the creation of the social product in factories and industries and subject to increasing unemployment and poverty) and the private appropriation of the social product by the 1 to 10% of the ruling class and its top functionaries. The tipping point has not yet been reached, but it is coming-- if not in this crisis, then the next it will present itself.
This state takeover under capitalism is not yet socialism, Engels tells us, even though the commanding heights will have been converted into state property. However, the takeover reveals that all the functions of running the economy can be taken over by state "salaried employees." Since the "modern state, no matter what its form, is essentially a capitalist machine" as it is forced to nationalize failing industries "it actually becomes the national capitalist." The state directly exploits the working people having done away with individual, and incompetent, private capitalists (done in by their own creation).
This is not a stable situation and in a democracy it cannot last. The contradiction between the state and the people brings "to a head" the capitalist relation between people and their government and this must "topple over." State capitalism is not, therefore, the answer to the class conflict, "but concealed within it are the technical conditions that form the elements" leading to that answer.
Once the people understand the source of their problems is the private appropriation of the social product, then the 99% can really set an agenda to put the 1% in their place. Here is what Engels thinks should happen. The people should set about " the harmonizing of the modes of production, appropriation, and exchange." Hopefully they can do this through political action and the regulation of the three modes. Engels says "it depends only upon ourselves to subject them to our own will" and if we don't do so these forces will continue to work against us and to master us. State capitalism will be transformed in the direction of socialism.
The greatest challenge is to become conscious of the need for what is to be done especially when that need is the take over of the economy by the people because "this understanding goes against the grain of the capitalist mode of production and its defenders"--i.e., the capitalists, the major political parties, the mass media, the mainstream churches, and the public and private education systems as well as the leadership of most unions and mass organizations as presently constituted.
Nevertheless, according to Engels, as the crisis deepens this consciousness will begin to develop in all of the above institutions except for the capitalist class itself and those completely dependent upon it. The working people and its allies and friends, the 99%, will have to take political power out of the hands of the corporations and their flunkies, if they have not already been nationalized, and turn the current privately held means of production into state property.
A by product of this action, the abolition of private property, is that the 1% will no longer have the means to dominate the 99%-- all people will be equally working for their own and the common good. This is what Engels means when speaking of the ending of classes and class exploitation.
An even more startling consequence, to both his own time and ours, is Engels' (and Marx's) belief that the state will disappear. Even the most jaded Libertarian or demented tea bagger could never hope to get government reduced to zero. But Engels points out that throughout history the role of the state has been to control the 99% in the interests of the 1%-- be they slave owners, feudal lords, or capitalists. This role will no longer exist in a society where everything (economically speaking) is owned and managed by the people collectively at the points of production and distribution. There will still be planning commissions and civic associations, but the state, as we know it, will be superfluous.
This doesn't mean that the state will be formally abolished by some sort of declaration or proclamation. It will just slowly wither away over time as its functions become moribund. At least this is the ideal that Engels has in mind for it; perhaps like "liberty and justice for all" it will remain an ideal that every generation comes closer to but never 100% attains, then again maybe Engels will be right.
We must be mindful that all of this speculation about the coming to power of the working people, the disappearance of the 1%, the transition to socialism, etc., is dependent on the development of the productive forces of society to such a high degree of perfection that they can eliminate scarcity and there will be the possibility of abundance of food and other necessities and luxuries for all and that the only reason for poverty and suffering is the control of society by the 1% in its own selfish interests.
In the language of philosophy this means that Sartre's proposition in the Critique of Dialectical Reason : "Scarcity is a fundamental relation of our History and a contingent determination of our univocal relation to materiality" leading to his assertion "There is not enough for everybody" does not hold, it has been overcome and negated, for our world. Indeed, Engels thought it did not hold even in the nineteenth century. We have the productive capacity but we cannot use it due to the capitalist framework within which it exists. It is as the sick person-- the medicine exists to cure him but he hasn't the money to buy it, so he dies.
If this is ever done, and it is a big IF, the world humanity will find itself in after the passing of the capitalist mode of production will be very different from the world of today. Commodity production will cease as there will be no market and no anarchy of production. Objects with use values will be made according to a central plan and they will be made to satisfy human needs not to be sold for profit. There will be no more struggle for existence as all humans will be provided for and, Engels says, for the first time humanity will live as humans should and not be subject to an animal existence. For the first time humanity will control the laws of its own social existence and economy and not be subjected to them. The pre-history of humanity will be over and the true history of humanity will begin. It will be the beginning not the end of history. It will be the leap of humanity "from the kingdom of necessity to the kingdom of freedom."
Well, as the Chinese say, a journey of a thousand miles begins with one step, I hope we have made that step on September 17, 2011 a few blocks from Wall Street in Liberty Square. But even if we haven't and Engels was at heart an utopian and his vision of the future a dream, still a dream, if that is all it is, can, as Martin Luther King, Jr. taught us, inspire people to fight for a better world.