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Gustav Schmoller on the Social Question and the Prussian State (1874)

“The Social Question and the Prussian State” (1874) was published in a prestigious contemporary journal by the economics professor and co-founder of the Association for Social Policy Gustav Schmoller (1838-1917). A so-called “socialist of the lectern” [Kathedersozialist], Schmoller pointed to the legitimate demands of underprivileged workers, although he also acknowledged the deficiencies of Social Democratic leadership. Not unlike many other social reformers of the mid-1870s – some of whom vehemently attacked Bismarck and his liberal advisors – Schmoller criticized the profiteering of stock market speculators in the “founding period” that followed unification in 1871. But he did not argue that the existing state was corrupt, that industrial capitalism was utterly dysfunctional, or that Germany was overrun by the Jews, as more radical critics did. Instead, he called for the active involvement of legislators, the public, the monarchy, and the Prussian civil service in a program of comprehensive social reform.

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[ . . . ] The new epoch has also taken on the destitute, languishing classes that have been mistreated for centuries. Suddenly left to their own devices and exposed to the competitive struggle, these people inevitably fell behind at the same rate that those with greater means, the educated and propertied classes, progressed. The small business fell victim to the larger one. Modern technology was only accessible to big capital. The enormous upswing in production and trade did not benefit the different social classes uniformly and was most advantageous to a privileged minority. Until a few years ago, wages in Germany lagged alarmingly behind the general price trend. The repercussions of large-scale industry on housing, education, and family conditions were predominantly unfavorable anyway. Members of the working class, suddenly laid off by the thousands, had to bear the brunt of the trade crises. The same workers who received new political rights every day, who were called from all sides into the arena of political conflict, who were assured on a daily basis that they were the actual people – most of these workers found themselves, until very recently, in conditions that grew increasingly pitiful by the day. Inevitably, the moment had to come when workers told themselves: Well, when it comes to political life, service to the Fatherland, and everything else, I am supposed to have the same standing as the most distinguished, richest person – but in economic and social life, the gulf is not only supposed to remain but actually continue to grow.

It is from this starting point that today’s social question arose – and in fact had to arise. A social class-consciousness had to develop at the very moment when a single voice pointed out clearly and insistently that the dispossessed working class had different interests than even the most radical members of the entrepreneurial class. The fact that all complaints raised by the fourth estate were elegantly dismissed with remarks that the new legislation had done everything it could for this class – and that anyone who didn't manage to get ahead now was personally responsible for his fate – had to exacerbate the bitterness all the faster, all the more distinctly a disturbing materialism and petty egoism spread among the propertied classes, and all the more obviously the average degree of scrupulousness in employing dubious means to quickly acquire property was sinking. The masses’ sense of justice supports any existing distribution of property that seems in accordance – when even only approximately – with the virtues, knowledge, and achievements of the individual as well as the different classes. Conversely, however, every single system of property and income, no matter how many may have been known throughout the world, has succumbed over time if it no longer rests on that conviction. The nail in the coffin of every existing form of property distribution is the growing belief that morally reprehensible forms of income are spreading much too freely, that dishonest occupations, rather than honest work, are creating great fortunes, that there is too great a discrepancy between the different accomplishments of individuals and the economic results – namely, their incomes. [ . . . ]

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