he writes, "have despaired of
ever rising by their own exertions; they expect everything from above
and look only to the upper classes and to the government for
assistance," though they "find their customers only in laboring circles,
so that their existence is absolutely dependent upon the prosperity or
adversity of the laboring classes." The contradiction Kautsky finds goes
even further. He says, "Servility depends upon reaction--and furnishes
not only the willing supporters, but the fanatical advocates of the
monarchy, the church, and the nobility." With all this they (the
shopkeepers, etc.) remain democratic, since it is only through democracy
that they can obtain political influence. Kautsky calls them the
"reactionary democracy."[222] But if they are democratic and in part
economically dependent on the laboring classes, then why should not this
part cast its lot economically and politically with the working class?

Kautsky extends his criticism of the small capitalists very far and even
seems in doubt concerning the owners of small investments such as
savings bank deposits. "Well-meaning optimists," he says, "have seen in
this a means of decentralizing capital, so that after a while, in the
most peaceable manner, without any one noticing it, capital would be
transformed into social property. In fact, this movement really means
the transformation of all the money of the middle and lower classes,
which is not used by them for immediate consumption, into money capital,
and as such placing it at the disposal of the great financiers for the
buying out of industrial managers, and thereby assisting in the
concentration on industry in the hands of a few financiers."

The classes which have invested their capital directly or indirectly in
stocks or bonds through savings banks and through insurance companies
number many millions, and include the large majority of all sections of
the middle class, even of its most progressive part, salaried employees,
and the professional element. It is undoubtedly true, as Kautsky says,
that small investors are not obtaining any direct control over capital,
and that their funds are used in the way he points out, constituting one
of the striking and momentous tendencies of the time. But it does not
follow that they are destined to lose such investments altogether, as
the legislative reforms to protect banks may be extended to the
railroads and other forms of investments. The small investors w