king over of productive forces, the more it actually
becomes the national capitalist, the more citizens does it exploit. The
workers remain wageworkers--proletarians. The capitalist relation is not
done away with. It is rather brought to a head."[182] Engels did not
think that State ownership necessarily meant Socialism; but he thought
that it might be utilized for the purposes of Socialism if the working
class was sufficiently numerous, organized, and educated to take charge
of the situation. "State ownership of the productive forces is not the
solution of the conflict, but concealed within it are the technical
conditions that give the elements of the solution."

As early as 1892 Karl Kautsky, at the present moment perhaps the
greatest living Socialist editor and economist, wrote that the system of
laissez-faire, for which "State Socialism" offers itself as a remedy,
had long ago lost whatever influence it once had on the capitalist
class--which was never very great. If, then, the theory that "that
government is best which governs least" had been abandoned by the
capitalists themselves, there was no ground why Socialists should devote
their time to the advocacy of a view ("State Socialism") that was merely
a reaction against an outworn standpoint. The theory of collectivism,
that the functions of the State ought to be widely extended, had long
been popular among the capitalists themselves.

"It has already been seen," wrote Kautsky, "that economic and political
development has made necessary and inevitable the taking over of certain
economic functions by the State.... It can by no means be said that
every nationalization of an economic function or of an economic
enterprise is a step towards Socialistic cooeperation and that the latter
would grow out of the general nationalization of all economic
enterprises without making a fundamental change in the nature of the
State."[183] In other words, Kautsky denies that partial nationalization
or collectivism is necessarily even a step towards Socialism, and
asserts that it may be a step in the other direction. The German
Socialists acted on this principle when they opposed the nationalization
of the Reichsbank, and it has often guided other Socialist parties.

Kautsky feels that it is often a mistake to transfer the power over
industry, _e.g._ the ownership of the land, into the hands of the State
as now constituted, since this puts a tremendous part of the national
wealth a