Intro. I. Capitalism in the United States

The United States of America is Canaan for capitalism: the land of promise. For here, for the first time, all the conditions were fulfilled that it needs for the full and pure unfolding of its nature. Land and people were made, as nowhere else, to further its development to the highest forms.

The land: suited as no other to make a rapid accumulation of capital possible, because rich in precious metals: North America produces a third of all the silver and a quarter of all the gold in the world; because rich in fertile soils: the Mississippi plain comprises about five times as much of the best humus soil as the black-earth districts of southern Russia and Hungary together; because rich in productive deposits of useful minerals, which even today yield three times the output of any European deposits. And for that reason also suited as no other to put into the hands of capitalism, through the elaboration and development of inorganic technique, the weapons with which it conquers the world: the United States already produces almost as much pig iron as all the other countries of the world taken together (23 million tons in 1905, against 29.5 million tons produced by the rest of the world). A land suited as no other for capitalist expansion: the Mississippi plain laid out as if for “rational” cultivation, for an unlimited development of transport: an area of 3.8 million square kilometres, that is, roughly seven times the size of the German Empire, without a single “obstacle to traffic”, and into the bargain already furnished with a number of natural routes of transport. On the Atlantic coast fifty-five good harbours, which had waited thousands of years for capitalist exploitation. A market area, then, beside which a European state counts for little more than a medieval town with its territory counts beside the European state. What characterises all capitalist economy in its innermost nature — the striving for limitless expansion, a striving that in narrow Europe found itself checked at every moment, and for which all the doctrines of free trade and all the policy of commercial treaties could only ever seem a meagre substitute — can here, in the immense plains of North America, act freely for the first time. Truly: if one wanted to construct the ideal country for capitalist development out of the needs of this economic system, then in extent and character it could only ever take the shape of the United States.

The people: the men who were destined in the last generations to clear the way for capitalism into the primeval forest had been trained for centuries as if in a conscious preparatory service. “Done with Europe”, they had moved across into the “New World”, with the will to carpenter themselves a new life out of purely rational elements: they had left all the ballast of European ways in the old homeland, all superfluous romanticism and sentimentality, everything feudal and craft-like, all “traditionalism”, and had taken across with them only what was conducive and serviceable to the unfolding of capitalist economy: a mighty, unbroken energy, and an outlook that made activity in the capitalist spirit a duty of the believer, as a commandment of God. Max Weber has shown in our journal how close are the relations between the postulates of the Puritan-Protestant ethic and the requirements of a rational capitalist economy. And to these leading elements, the subjects of the new economic system, there now offered itself also as object, that is, as wage-labourers, a population that likewise seems made to bring capitalism to its highest development: for centuries labour was scarce and therefore dear. This compelled the employers to contrive the most rational use of labour-power, and so to bring the organisation of their businesses and establishments to perfection, and to contrive systematically how to make labour-power superfluous by labour-saving machinery. Thus there arose a compulsion to the highest technical perfection such as could never have come about with equal force in a country of old civilisation. And when the highest forms of economic and technical organisation had been created, then the people streamed in, in immense crowds, who could now be used as material in the service of capitalist interests in the measure that the possibilities of existence outside the capitalist nexus diminished. It is well known that in recent decades at least half a million people a year have immigrated into the United States, and that in some years the number of immigrants has risen to three-quarters of a million and more.

And in fact: nowhere on earth have capitalist economy and capitalist ways reached so high a development as in North America.

Nowhere does the acquisitive drive come into play more purely than here; nowhere is the striving for gain, the making of money for its own sake, so exclusively the beginning and end of all economic activity as here: every minute of life is filled with this striving, and only death puts an end to the insatiable pursuit of gain. The uncapitalist class of rentiers is as good as wholly unknown in the United States. And in the service of this striving for gain stands an economic rationalism of a purity likewise known to no European commonwealth. And capitalist interest asserts itself ruthlessly: even when its way passes over corpses. Merely as a symbol, let the figures serve that inform us of the extent of railway accidents in the United States. The Evening Post has calculated that in the years 1898 to 1900 the number of persons killed on the American railways was 21,847, that is, as many as the number of Englishmen who fell in the Boer War in the same period, including those who died of disease in the hospitals. In 1903 the number of persons killed on the American railways was 11,006, in Austria in the same year 172; if one reckons the figures per 100 km and per million passengers, it turns out that there were 3.4 accidents per 100 km in America and 0.87 in Austria, and per million persons carried 19 there and 0.99 here. (The comparative figures are from Philippovich.) Ruthlessly that form of business, of enterprise, that technique is applied which promises the highest profit. While we see a public scandal in a coal company’s shutting down one pit or another, the management of the American trust disposes year in, year out, on the grand scale, which works are to run and which to stand idle. Thus capitalism freely creates economic organisation in its own image: the location of industry, the structure of the individual enterprises, the size and form of establishments, the organisation of trade and transport, the interlocking of production and sale — everyone knows it: all is shaped as “rationally” as can be, which is to say, first of all, adapted as fully as can be to capitalist interests.

The reward could not fail to come: in capital power, in the height of capital accumulation, the United States today already stands — despite its “youth” — far ahead of all other countries. The gauges from which the level of the capitalist flood can be read are the figures of the bank returns. In 1882, 7,302 banks reported to the Comptroller of the Currency (cf. his 42nd Report); in 1904 there were 18,844. The former had a capital of 712,100,000 dollars, the latter of 1,473,904,674 dollars; in 1882 the deposits in the banks amounted to 2,785,407,000 dollars, in 1904 to 10,448,545,990 dollars. The total capital power (“the banking power”) of the U.S. (that is, capital, reserves, deposits and circulation) is reckoned by the same reporter at 13,826,000,000 dollars, while the corresponding figure for all the other countries of the world together is said to amount to only 19,781,000,000 dollars. We need not then be astonished at the quantities of capital that have flowed into the lap of industry alone during the last twenty years. According to the census, the capital invested in “manufactures” was:

It is also well known that the U.S. is the country in which the programme of the Marxian “theory of development” has been carried out most punctiliously, in so far as there the concentration of capital has reached the degree described in the famous penultimate chapter of Capital as the one at which the “twilight of the gods” of the capitalist world is close at hand. The latest statistics on the number and size of the trusts give the following striking picture:

There are seven “larger” industrial trusts, in which a total of 1,528 formerly independent plants are united. The capital concentrated in them amounts to 2,662.7 million dollars. The largest of these seven giants is the U.S. Steel Corporation, with a (nominal) capital of 1,370 million dollars; the second largest is the Consolidated Tobacco Co., with only 502.9 million dollars. They are followed by 298 “lesser” industrial trusts, which “control” 3,426 works and dispose of a capital of 4,055 million dollars in all. Thirteen industrial trusts with 334 works and 528 million dollars of capital are at present in course of formation, so that the total number of industrial trusts comes to 318, with 5,288 works and 7,246 million dollars of capital. To these are added 111 “more important” “franchise” trusts (telephone, telegraph, gas, electricity and street-railway undertakings), with 1,336 individual plants and 3,735 million dollars of capital. And now comes the pièce de résistance: the group of the great railway concerns. There are six of them, none of which embraces less than a thousand million dollars. Together they dispose of 9,017 million dollars of capital, and they “control” 790 plants. Finally, the “independent” railway companies, with a capital of 380 million dollars, must be mentioned.

If one adds up all these giant combinations, in which by far the greater part of American economic life is bound up today, one arrives at the enormous figure of 8,664 “controlled” plants and 20,379 million dollars of nominal capital. Think of it: 85,000 million marks united in the hands of a few employers!

How unrestrictedly the capitalist economic system rules we can perhaps see best in the structure of society, which shows nothing any longer, and nothing yet, that would be of extra-capitalist origin. Nowhere do we meet remnants of pre-capitalist classes, whose greater or smaller admixture gives every European society its characteristic stamp. No feudal aristocracy: in its place the capitalist magnates alone hold the field. The time that Marx, when he wrote Capital, could only foresee in spirit has now been fulfilled in the United States: where the “eminent spinners”, the “extensive sausage makers” and the “influential shoe black dealers”, together with the “railway kings”, force their people to its knees: “When the ruler of one of the great railway lines of the West travels over the line in his luxurious car, his journey is like the triumphal progress of a king. The governors of states and territories bow before him; legislatures receive him in solemn session; cities and towns court his favour, for has he not in truth the power to bring fortune or ruin upon a city at his pleasure?” (J. Bryce.)

No half-feudal or wholly feudal peasantry and craftsmen. In their place, rather, a smart class of farmers and a handful of small capitalist employers in trade and industry: both classes strongly anointed with capitalist oil, ruled by the striving for gain, shaping their businesses calculatingly in economic rationalism. And the grouping of this whole population, already capitalist in spirit today, by occupation lets the occupational groups that lead in capitalist fashion predominate more from year to year: agriculture already makes up a smaller part of all occupational groups in this still half-colonial country than in Germany, and the share of trade and transport is rising fast, and is already considerably greater than with us. From 1880 to 1900 the share of the population engaged in agriculture in the United States fell from 44.3 to 35.7 per cent (against 36.12 per cent in Germany), and that of persons employed in trade and transport rose from 10.8 to 16.4 per cent (against 11.39 per cent in Germany).

At the same time the whole manner of life of the people is taking shape more and more in a way that corresponds to capitalism.

The United States is already today — again, despite its “youth” — a land of towns, or more precisely: a land of great cities. I do not mean this only in the numerical sense, although the statistics too show the preponderance of the urban element clearly enough. True: reckoned for the Union as a whole, the share of the urban population is still not quite so large today as, for example, with us (in places of over 2,500 inhabitants there lived in 1900 41.2 per cent, against 54.4 per cent in places of over 2,000 inhabitants in Germany). But: first, the share of the great cities of over 100,000 inhabitants is already greater (England apart) than anywhere else on earth: it amounts to nearly a fifth of the total population (18.7 per cent); secondly, the shift of population in favour of the towns is going on at a rapid pace: the share of the urban population rose from 1890 to 1900 from 29.2 to the 41.2 per cent just given; thirdly, the low figure for the whole is explained by the large share of the relatively town-poor South. If one considers the eastern states of the Union by themselves, one finds that only 31.8 per cent of the population there still live “in the country”, while 35.8 per cent live in towns of over 100,000 inhabitants.

But when I say that the United States is a land of towns, I mean it also in a deeper, inner sense, which alone makes it clear why I bring the urban element and capitalism into relation. I mean it in the sense of a mode of settlement that has become a stranger to all organic growth, rests on a purely rational basis and is oriented by purely quantitative considerations, and which is, so to speak, “urban” in its idea. The European “town” embodies this idea completely only in the rarest cases. It has mostly grown organically; it is at bottom only an enlarged village, whose nature its image reflects. What has Nuremberg in common with Chicago? Nothing but the outward marks: that many people live close together in streets and depend for their maintenance on supplies from outside. In spirit, nothing. For the one is a village-like, organically grown structure, the other a real “town”, artificially produced on “rational” principles, in which (Tönnies would say) all traces of community are extinguished and pure society has been precipitated. And if in old Europe (until now, we had better say!) the “town” was modelled on the country and bore its character, in the United States, conversely, the flat country is at bottom only an urban settlement that lacks the towns. The same rational understanding that created the box-like towns has gone over the land with the surveyor’s chain and divided it, in all its vast extent, according to one uniform plan, into squares all alike, which were bound to frighten away from the first moment every suggestion of a natural, “organic” settlement.

And what has always formed a salient mark in the structure of a society resting on a capitalist basis is not lacking in the United States either: I mean the vast contrasts between wealth and poverty. The United States has no exact statistics of incomes and property. But we have some attempts to estimate the distribution of wealth, which, though they cannot be regarded as unimpeachable findings, may yet claim some value, since they were undertaken conscientiously, with due regard to all the material available. According to them, of the total private wealth, estimated (for 1890) at 60,000 million dollars, 33,000 million dollars, or 54.8 per cent, would be in the hands of 125,000 families, who make up one per cent of all families, while 6¼ million families (50 per cent) would be without property.

But however the distribution of total wealth may be shaped, so much is beyond doubt: that the absolute contrasts between poor and rich are nowhere on earth even approximately as great as in the United States. Above all because “the rich” over there are so very much “richer” than with us. There are certainly more people in America who own 1,000 million marks than there are in Germany who own 100 million. Whoever has been, say, to Newport, the Baiae of New York, will have received the impression that over there the million is a mass phenomenon. There is surely no second place in the world where the princely palace in the grandest style is so thoroughly the type of the dwelling-house as there. And whoever has once strolled through the salesrooms of Tiffany’s in New York will always afterwards catch something like a smell of poverty even in the most brilliant luxury shops of the great European cities. Tiffany’s, because it has branches at the same time in Paris and London (a “proletarian” city like Berlin or Vienna naturally does not come into question at all for businesses of this kind), can serve excellently to draw comparisons between the luxury, and so the wealth, of the upper four hundred in the three countries named. Now the directors of the New York parent house told me that of the goods they offer for sale in New York the greater part does indeed come from Europe, where it is made especially for Tiffany’s of New York. But it was quite out of the question that a business in Europe — even their own branches in Paris and London — should carry goods in such price ranges as were asked for in New York. The dearest pieces could be got off one’s hands — into the ladies’ hands — only in New York.

And on the other side, the misery of the slums in the great American cities has its equal perhaps only in the East End of London. A book appeared not long ago which, it is true, is no counterpart to Engels’s Condition of the Working Class, as Florence Kelley has said in a review (it lacks the wide theoretical horizon that made Engels’s book a landmark in the development of the social sciences), but which is nevertheless admirably suited to fulfil the purpose it sets itself: namely, to light up the depths of the misery of the great American cities. The author lived for years as a settlement worker in the most notorious quarters of various great and industrial cities, and has thus gained views of his own, and knows how to bring to life to the best effect the rich literary and statistical material he has drawn on. He now estimates the number of persons living below the line of poverty, that is, of those who do not have the barest necessities in food, clothing and housing (underfed, underclothed and poorly housed), at 10,000,000 in all in the United States in times of average prosperity, of whom 4,000,000 are public paupers. In 1897, in New York, over two million people (?) received poor relief; 14 per cent of the population of the same city live in times of economic upswing (1903), and 20 per cent in bad times (1897), in the greatest misery (distress); that is, as far as he knows of them: if one adds the bashful poor (the author thinks), the number of those living in poverty in New York and other great cities will seldom sink below 25 per cent. In Manhattan (the main part of the city of New York), 60,463 families, that is, 14 per cent of all families, were evicted from their dwellings in 1903, which is to say in a “good” year. Every tenth person who dies in New York is buried as a pauper in Potter’s Field.

But finally there is yet another unmistakable sign of the high level of capitalist development in the United States: that is the character of its intellectual culture.

Does the American national character show features that are found in agreement throughout the whole country? One might doubt it, in view of the immensity of the territory, and people who set themselves up as “good judges” of American conditions do indeed warn against saying anything common to the whole people of the Union. The differences, they say, are as great as between the individual nations of Europe, and in fact it is a continent, not a single country, that the American nation inhabits. This wisdom sticks to the surface. Certainly everything that concerns the character of the land is extraordinarily varied in the United States. But for that very reason everything institutional, and above all the character of the people too, is of a positively astonishing uniformity. Real judges, such as Bryce and others, have stated this often enough, and it must force itself upon anyone who comes into contact with American life, so long as he is able to look a little below the surface, as a particular mark of this state. Bryce has convincingly set out the reasons for this striking agreement of all public institutions in the different states of the Union. But where does the uniformity of the American national soul come from? Or are we to seek no explanation for it at all, and content ourselves with hypostatising a peculiar “American spirit” that has sunk down from heaven upon the chosen people “without sufficient reason”, outside all social causation? That makes sense to us all the less because we cannot quite believe in the uniqueness of that wonderful “American spirit”, but believe rather that we recognise in it (on closer inspection) an old acquaintance, whom we have often met before in Lombard Street or in Berlin W., only that over there he has grown into a purer type and to more imposing size. That suggests that we should seek its origin in particular circumstances of milieu, such as have developed already in Europe and now fully in America, and so at the same time explain its uniformity.

Now whoever examines the peculiarities of the American national soul for their essential content cannot possibly fail to see that precisely its especially characteristic features have their roots in the capitalist organisation of economic life. I will try to make this credible.

Undoubtedly, and it is surely generally acknowledged, life in a capitalist milieu accustoms the mind to transfer to extra-economic relations as well the reduction of all processes to money that is required in the sphere of economic life by its organisation, that is, in particular to take money value as the measure in the valuation of things and men. It is evident that, when such a procedure takes root and continues through generations, the feeling for value determined purely by quality must gradually diminish. Thus the sense for what is merely beautiful, merely perfect in form, that is, for the specifically artistic, which can never be determined quantitatively, never measured, never weighed, is lost with regard to things. The demand made of things to which value is to be attached is that they be either useful and pleasant (the sense for “comfort” is explained by this) or that they be “costly” (the sense for the materially valuable is thereby explained: everything that is adorned in the United States is “overloaded”, from the lady’s toilette to the reception rooms of a hotel à la mode). If the “costliness” cannot be made visible, then the money value is set without much ado as a figure before the “valued” object: “Have you seen the 50,000-dollar Rembrandt in Mr. X.’s house yet?” — the question one often hears. “Carnegie’s 500,000-dollar yacht came into harbour this morning from such-and-such” (newspaper item). With a man, of course, it is his money possessions, his money income, that provide the basis for appraising him. The sense for the immeasurable uniqueness of personality, for the fragrance of the individual, disappears.

Now it cannot fail to happen that this habit of extinguishing all qualities through their relation to measurable money value influences judgements of value even where, with the best will in the world, it is no longer possible to apply the measure of money. It must call forth a high esteem of quantity as such, and so a cast of mind such as we find at the centre of the American temper, which the judicious Bryce calls “a tendency to mistake bigness for greatness”: the admiration of every magnitude that can be measured or weighed: be it the number of inhabitants of a city, the number of postal packets carried, the speed of the railway trains, the height of a monument, the breadth of a river, the frequency of suicides or whatever else. People have tried to derive this “megalomania”, which is so characteristic of the modern American, from the vastness of his country. But then why has the Chinese not got it? or the Mongol on the high plateau of Asia? why did the Indian not have it, who after all inhabited the same vast country? Wherever ideas of greatness develop among such primitive peoples, they bear, I should like to say, a cosmic character: they are directed to the infinity of the starry heavens, to the boundlessness of the steppe, and what marks them is precisely their immeasurability. The valuation of what is great in figures can have taken root in the soul of man only through the mediation of money in capitalist use (not through money as such: Simmel’s mistake!). Certainly the great dimensions of the American country have then furthered this peculiarity; but first the sense for figures as such had to be awakened before it became possible to convert geographical notions into values that can be grasped numerically.

Whoever has grown accustomed to value only the quantity of a phenomenon will be inclined to compare two phenomena with each other, in order to measure them against each other and ascribe the higher value to the greater. If one of two phenomena becomes the greater in a given lapse of time, we call that having success. The sense for what is measurably great (the German language, unfortunately, cannot express bigness and greatness by a single word each) has as its necessary accompaniment the high valuation of success: again an outstanding peculiarity of the American national spirit. To have success, however, always means getting ahead of others, becoming more, achieving more, having more than others: being “bigger”. That kind of success will naturally be valued most highly which can be expressed in pure figures: that is, growing rich. And even the non-trader will be tested first on the question of “how much” he has known how to make of his talent. If this test gives no satisfactory result, there remains no other way out than to take the “size” of his fame as the measure of his worth.

What peculiar processes of the soul are at work here is shown perhaps most clearly by the attitude that the American takes towards sport: what essentially interests him in it is now only the question: who will be the winner? In New York I attended a mass meeting at which a match being fought out in Chicago (!) was reported step by step by telegraph to the waiting crowd as it went on. The sensation lay in the suspense, and in it alone, as to which side victory would incline to. To heighten this suspense is the function of the wager: with it the whole sporting act has happily been reduced once again to the pure figure of money. Can one imagine that wagers were laid in a Greek palaestra? Surely not. For what delighted men’s minds there above all was the joy in the immeasurable individual performance, in personal beauty and strength, which could be valued in the vanquished as well as in the victor. Or would the wager even be thinkable at a Spanish bullfight? Quite certainly not. But the women throw their jewellery, the men costly garments, to the torero who has known how to deal the fatal stroke with elegance and grandezza: an artistic valuation!

Now the character of the judgements of value determines the direction of the will. If success is the god before whom the American prays, then his striving will be directed to leading a life pleasing to his god. So we see in every American — beginning with the newspaper boy — a restlessness, a longing and pressing upwards, up and over the others. Not comfortable self-fulfilment, not the beautiful harmony of a personality resting in itself, can therefore be the American’s ideal of life, but this ideal is “getting ahead”. And hence now the haste, the restless striving, the ruthless competition in every field. For if each individual is out for success, each individual must strive to get ahead of the others: there begins a steeplechase, the hunt for fortune, as we are accustomed to express it in a somewhat trivial way: a steeplechase that differs from all other races in that the goal is not fixed but moves on for ever before the runners. Restless we call such striving; endless would perhaps be still more apt. For all striving after quantities must be endless, since these know no limit of any kind in themselves.

Now this psychology of the race engenders, quite from within, the need for elbow-room. One cannot see one’s ideal of life in racing and at the same time wish to be fettered hand and foot. For that reason the demand for laissez faire belongs to those dogmas or maxims of the American on which one comes, as Bryce puts it, inevitably “whenever one sinks a shaft into the American national spirit”. Only I should like to explain the general spread of this basic view a little differently from Bryce. Certainly the aversion to all regimentation from above, to all interference by the state, that is, the “doctrine of non-interference by government with the citizens”, was born among the men of 1776 out of a purely doctrinaire, ideal-rational spirit. But the modern American cares little now for those “lofty principles” of the framers of the constitution, so far as they do not reach decisively into his everyday life. If he now holds so stubbornly to the principle of laissez faire, that happens because he feels instinctively that this principle is the only right one for everyone who strives “for success”. How little doctrinaire he is, and how gladly he sacrifices the principle when it does not stand in the way of his pressing forward, is shown by the fact that the same Americans who have written “the unhindered activity of the individual” on their banner occasionally have not the slightest scruple about restricting the freedom of the individual in ruthless fashion (as we should never let it be done to us in our “autocratically” governed Germany: think of the legal restriction on the consumption of alcohol!) or about setting up quite communistic institutions, at the sight of which the hair of every liberal lord mayor would stand on end (the free supply of all school materials to all elementary-school children in New York!).

To have success means for the average American, in the first place: to grow rich. But this explains why that restless striving, which we recognised as a part of the essence of the American national character, turns above all to economic life. The best and most energetic, who with us — and still more in the Latin countries and England than in Germany, where, as I have tried to show elsewhere, conditions related to America’s prevail in this respect (even if they have grown out of quite different roots) — end in politics: the best and most energetic turn in America to economic life, and even in the masses there grows up an overvaluation of the economic, for the same reason: because one believes one can reach in it most easily the goal one strives for. The economic in the sense of capitalist economy, whose symbol, as it were, is the security dealt in on the stock exchange. Through taking part in speculation in stocks and goods the great mass then seeks to reach into the wheel of fortune in which the great prizes lie. There is no second country on earth in which the masses have been drawn so deeply into the machinery of speculation as the United States, no country in which the population has so generally enjoyed the fruits of capitalism.

With this, however, we have closed the circle of our reflections: we set out from capitalism, and from it we tried to derive essential elements of the American national spirit. Now we see how its activity in turn contributes to the strengthening and heightening of the capitalist character, so that the peculiar “American spirit” gives birth to itself, as it were, ever anew out of itself, and purifies itself more and more into the spiritus capitalisticus purus rectificatus.