1940s >> 1940 >> no-430-june-1940

The Importance of Marxism—(continued)

<< Continued from the May 1940 issue.

The school of Political Economy that directly preceded Marx is that of Adam Smith (1723-1790) and David Ricardo (1772-1823).

Both exponents expressed the interests of the rising English industrialists, and as such were apostles of free trade. Marx has called all the economists I have mentioned “Classical Economists” (in contradistinction to many of his superficial and apologetic contemporaries, whom he has dubbed “Vulgar Economists”) because they really endeavoured to analyse the mechanism of capitalist society. All of them were, however, essentially bourgeois, and regarded capitalist society as an eternal order of things.

Adam Smith, in his “Wealth of Nations” (1770), correctly distinguishes between “value in use” and “value in exchange.” He points out that the things which are most useful (water, air, etc.) generally command little or nothing in exchange. Smith claimed that the “natural price” of an article (what we have called “average price”) is the centre of gravity around which the market price fluctuates. This “natural price” is governed by the labour taken to produce a commodity.

He, too, was inconsistent in his views, for he often confused the price of an article with the price of labour (labour-power) and sometimes imagined that prices were regulated by wages, profit and rent.

In his “Principles of Political Economy and Taxation” (1821), David Ricardo established the proposition that the value of a commodity is regulated by the quantity of labour necessary for its production. Ricardo, however, failed to solve the problem of surplus value because he did not see that what the worker sells to the capitalist is his labour power—not his labour. Moreover, Ricardo did not clearly differentiate between surplus-value and profit.

Incidentally, whilst on Ricardo, it is interesting to notice what he thought of a contemporary “Vulgar Economist,” Thomas Malthus.

We have already alluded to “Vulgar Political Economy” as a school of thought which rehashed current views that were favourable to the capitalists and, instead of attempting to analyse, accepted appearances.

In this connection, Malthus’s economic views are even popularised to-day. His notions on population based on these views finds an echo in Nazi Germany, where Hitler proclaims his need for more “Lebensraum ” (living space).

In a letter to McCullough, dated May 2nd, 1820, Ricardo writes: —
  I have read his book—at present I feel a real difficulty for I confess I do not clearly perceive what Mr. Malthus’s system is.
And in a further letter, dated August 2nd, 1820: —

  Since I have been here I have been .giving a second reading to Mr. Malthus’s book. I am even less satisfied than I was at first. There is hardly a page which does not contain some fallacy.

The Ricardian Socialists

Ricardo’s formulation of the labour theory of value, including his classification of society into three classes (landlords, capitalists, workers), provided the groundwork for Utopian Socialism. The premises of the latter was: As labour is the source of all value, then to labour should all values rightly go.

This commendable proposition from a moral standpoint must not, however, be confused with Marxism. Scientific Socialism is most certainly based on the labour theory of value (we shall explain this in greater detail later) but not on moral implications which can be deduced from that theory. Notwithstanding the ethical basis of their Socialist teaching, the writings of the Utopians are full of illuminating points, which reveal to a remarkable extent the characteristics of the capitalist economic order. It is timely to revive the memory of those outstanding thinkers, who, in the early part of the nineteenth century, exercised a profound influence on the mental development of the founders of Scientific Socialism—particularly now, when most of their works are practically unobtainable.

The Basic Fallacy Underlying Utopian Socialism

Whether we take Robert Owen, Thompson, Hodgskin, Bray or Rodbertus, we shall find underlying each of their writings a basic economic fallacy. This fallacy is associated with the view that what the worker sells to the capitalist is in reality his labour—instead of, as we know to be the case, his labour-power.

The Utopians contended that the worker is robbed in the process of exchange, inasmuch as the capitalist buys his labour but does not pay for it at its full value. Let us illustrate their contention by giving an example: —

A tailor, shall we say, has worked fifty hours for his employer, during which period he has produced suits to the monetary value of £10 (we assume that the raw material, etc., have also been made by him). The value of his labour, i.e., his product, is therefore, expressed in terms of money, equal to £10. In this case the Utopians would have reasoned, quite wrongly, “The tailor has sold ten pounds worth of goods to his employer (his labour). The latter, however, because he owns the means of production, takes advantage of his position and pays the tailor, say, only £5 for the goods—thus perpetrating a fraud in exchange.”

This reasoning led the Utopians to the view that it was necessary, in order to abolish the possibility of fraudulent exchanges, to make the workers possessors of their own means of life. It was essential, they held, to establish communist settlements, in which every worker who laboured for a definite period would be entitled to exchange the goods he had produced for other articles embodying an equivalent amount of labour. Only in such communist settlements, they maintained, would the fraudulent transaction of an exchange of more labour for less labour, practised under capitalism, no longer be possible.

It would take us too far afield to dwell on the intricacies of their communist Utopias, many of which were tried and failed. Suffice it to point out that the Socialism of the Utopians lacked scientific content for the following three reasons: —

(1) Because of the undeveloped conditions of capitalism in which the ideas arose.
(2) Because the Utopians were under the illusion that Socialist society had always awaited discovery and did not grow out of particular circumstances.
(3) Because of the Utopians’ misunderstanding of the way in which the workers are robbed and, consequently, their inability to grasp the mechanism of capitalist production.

Moreover, when all these factors have been taken into consideration, Utopian Socialism still remains valuable for its brilliant critique of bourgeois society. Let us now examine this critique.

ROBERT OWEN (1771-1858) is generally classified as the founder of English Utopian Socialism. Owen was originally a factory owner and actually arrived at his Socialist conclusions as a result of studying the conditions in his own works. His advocacy of Socialism and his struggles to improve the conditions of life for the masses resulted in his becoming outlawed by supporters of capitalist society. Owen’s life and work have, however, been so ably treated by Engels in “Socialism, Utopian and Scientific,” that we cannot do better than refer the reader to that excellent pamphlet. In this review we shall deal in detail mainly with Owen’s disciples.

WILLIAM THOMPSON (1785-1833) was a native of the county of Cork. He was a friend of Jeremy Bentham, the philosopher, and to a considerable extent under the influence of the latter’s radical teachings. Thompson’s principal work is an “Inquiry into the Principles of the Distribution of Wealth most conducive to Human Happiness (1824),” a book that runs into some six hundred pages. The essential theme of this work is that rent, profit, etc., are wealth forcibly and unjustly appropriated by the capitalists from the workers. But let Thompson himself speak: —

  “But as long as the labourer stands in society divested of everything but the mere power of producing, as long as he possesses neither the tools nor machinery to work with, the land or materials to work upon, the house and clothes that shelter him—as long as any institutions or expedients exist by the open or unseen operation of which he stands dependant, day by day, for his very life on those who have accumulated these necessary means of his exertions; so long will he remain deprived of almost all the products of his labour, instead of having the use of all of them/’ (Page 590. Longman, Hurst Ed.)

And how are going to alter this state of affairs ?

“In the usual course of things then the productive labourer is deprived of at least half the products of his labour by the capitalist. . . .  No doubt if the productive labourers acquired knowledge, and could trace the immense abstractions made under the name of profits from the products of their labour, they must see the injustice of such an arrangement and endeavour to become themselves possessed of all the articles under the name of capital or of the means of commanding the use of such articles necessary to make their labour productive. . . .  As long as two hostile masses of interests are suffered to exist in society, the owners of labour on the one side and the owners of the means of labouring on the other, as long as this unnatural distribution is forcibly maintained—for without force wielded by ignorance it could not be maintained—so long will perhaps as much as nine-tenths of obtainable human production never be brought into existence, and so long will ninety-nine hundred parts of attainable human happiness be sacrificed.”(Pages 160-175.)

Remember that the above was written over a century ago!

And shall we appeal to the capitalists to introduce Socialism?

     “The excessively rich as a class, like all other classes in every community, must obey the influence of the peculiar circumstances in which they are placed, must acquire the inclinations and characters, good or bad, springing out of the state of things surrounding them from their birth. Having always possessed wealth without labour they look upon it as their right and their family’s right always to possess it on the same terms.” (Page 211.)

In concluding this review of economic theory before Marx, mention must be made of John Stuart Mill (1806-1873), who accepted the labour theory of value but attempted to compromise between Vulgar Economy and Utopian Socialism.

The Utopian Socialists, notwithstanding their shortcomings, were men of outstanding intellect and clarity of vision. But as Utopian Socialism is itself a detailed subject we must reserve a discussion on it for our next article >>.

Solomon Goldstein