Book Review: ‘The Market and Its Critics – Socialist Political Economy in Nineteenth Century Britain’

Market’s end

‘The Market and Its Critics – Socialist Political Economy in Nineteenth Century Britain’ by Noel Thompson, Routledge

This book unwittingly  confirms our view that the word “socialism” originally meant what we insist it continues to mean: common ownership and production solely for use. Written by a supporter of the market, it criticises the pioneer socialists of the nineteenth century for having seen socialism as necessarily involving the abolition of both market mechanisms and monetary calculation. According to Thompson they were guilty of throwing “the market baby out with the capitalist bathwater” and he actually says that the socialist commonwealth described by William Morris in News from Nowhere cries out for the introduction of the market to make it work!

Despite this rather quaint position, Thompson is scrupulously honest in his description of the views of nineteenth century critics of capitalism, from Charles Hall, Percy Ravenstone and William Godwin right at the beginning of the century through writers such as William Thompson, Thomas Hodgskin, John Gray and John Bray on to William Morris, H.M. Hyndman, Laurence Gronlund, Edward Bellamy, Robert Blatchford and Peter Kropotkin. There are also less interesting chapters on the Fabians and the so-called “Christian Socialists”, in whose tradition we would not claim to be and who, in any event, did not envisage the disappearance of the market.

The first group to work out clearly the essential features of the alternative to the competitive, profit-seeking capitalist market economy that rapidly developed around them were the followers of Robert Owen, who were also the first to coin the word “socialist”. For them the alternative to capitalism lay in the organisation of the production and distribution of wealth in accordance with the principle of “from each according to their ability, to each according to their needs”. They at least realised that the organisation of production and distribution on this basis necessary involved the disappearance-of-private property, buying and selling, money and prices, and the introduction of free access to goods on the basis of self-determined needs as well as the replacement of monetary calculation with calculation purely in physical terms—to match productive capacity and wants. As the Owenite journal The New Moral World, put it in 1835, “our enlarged resources for the creation of wealth” mean that “the necessity for attaching money—value to any production whatever “can be superseded and that “no money price will be known”.

Towards the end of the century socialist critics of capitalism saw such a system as: applying on a society-wide basis, but they retained the understanding that there was no role whatsoever for market mechanisms and monetary calculation in such a socialist society. As Thompson himself explains:

    “As regards the allocation of resources and the matching of supply and demand at an aggregate level, there was, however, a general tendency to move from the idea that economic calculation would proceed in terms of value to the idea that such calculation could be conducted in purely quantitative or physical terms. This was a conviction that was largely rooted in the belief that under socialism production would be for use rather than exchange and that in such circumstances social utility, rather than exchange value, could be a direct guide as to what and how much to produce . . . Such production for use rather than profit involved a concern with the concrete material characteristics of needs and the means of satisfying them rather than any abstract notion of value. It involved a deliberate matching of goods with wants that did not involve or require their valuation.”

Thompson throws up his arms at what he regards as such economic naivety, but this is indeed what socialism implies. So-called “market socialism” (with which Thompson appears to sympathise) is an absurd contradiction in terms. Any society which retains market mechanisms just can’t be regarded as socialist, at least not without violating the original, historical meaning of the word.

Adam Buick