A Critic of Marx’s Economic Theories—concluded

Illustrations of the Alleged Errors of Marx

In our correspondent’s letter (see November SOCIALIST STANDARD) examples were given to show that Marx was wrong. Our correspondent charged us with ignoring capital and directive ability and asked us to consider the man who builds a boat, lends it to a friend and receives half the catch. The boat builder is also an expert on fishing grounds and directs the fisherman to the best spot. This may be interesting as a hypothetical example of division of labour, but it has no relationship to the capitalist system as it actually is. Capitalists as capitalists do not build boats to lend to friends, or guide fishermen to the best fishing grounds. Directly or through their agents the capitalists control production and look after their own interests as profit receivers, but all the productive process, including the provision of technical knowledge and organising capacity is for the most part in the hands of wage or salary earners—members of the working class. If the capitalist happens to take a hand in production this is something extraneous to his position as a receiver of profits. In the undeveloped small-scale enterprise the capitalist would take a hand in production, but, as Marx pointed out, “the capitalist is relieved from actual labour so soon as his capital has reached that minimum amount with which capitalist production as such begins” (“Capital,” Kerr edition, Vol. I, p. 361); moreover, from that point he (the capitalist) “hands over the work of direct and constant supervision of the individual workmen and groups of workmen to a special kind of wage-labourer.”

Marx went on to expose the error of the capitalist economist who “treats the work of control made necessary by the co-operative character of the labour process as identical with the different work of control necessitated by the capitalist character of that process and the antagonism of interests between capitalist and labourer. It is not because he is a leader of industry that a man is a capitalist; on the contrary, he is a leader of industry because he is a capitalist.”

Marx dealt with the capitalist who claims that he himself creates value. “Have I myself not worked? Have I not performed the labour of superintendence and of overlooking the spinner? And does not this labour, too, create value?” (P. 215.)

Marx pointedly adds : “His overlooker and his manager try to hide their smiles.”

Our critic’s example does not belong to the world of to-day. First, as Mr. J. Wedgewood has shown from the available information, the typical wealthy man or woman of to-day has inherited his or her wealth or the bulk of it: “… in the great majority of cases, the large fortunes of one generation belong to the children of those who possessed the large fortunes of the preceding generation” (“Economics of Inheritance,” Routledge, 1929, p. 104). In short the existing capital is largely the accumulation of surplus value taken from past generations of workers.

Next, the predominant type of capitalist concern is one in which the capital is owned by shareholders who have no hand in the operations of the concern. In ten large, well-known concerns, including Imperial Chemical Industries, Ltd., Unilever, Ltd., and Coats, Ltd., there were in 1936 no fewer than 442,720 shareholders, of whom 193 held between them 36,778,624 shares or units of stock. (“Economist,” 5th December, 1930). Nobody suggests that these 442,720 shareholders have any hand in the running of the concerns they own, except the remote one of looking after their financial interest through the boards of directors. They do not operate chemical plant, manufacture thread, work on plantations scattered over the globe or build and man the fishing trawlers that are owned by Unilever. The chairman of Unilever, who is also director of an insurance company, a candle company, plantation companies in Africa, and fishing companies in this country, does not have to build boats and guide fishermen to fishing grounds.

How remote the capitalist can be from production was illustrated a few years ago by one of the wealthiest women in Australia, Mrs. Scarfe. Having explained that her money was made “by hard work and hardware,” she was asked by a reporter if she “managed ” her own money. Her candid reply was: “Oh, no! I don’t ‘manage’ my money—I just take my share of the dividends” (Daily News, London, 20th August, 1925). Or we may quote G.B. Shaw in reply to Mallock many years ago (not because Shaw is an “authority,” but because he well put a demonstrable, truth) :—

“The notion that the people who are now spending in week-end hotels, in motor-cars, in Switzerland, the Riviera, and Algeria the remarkable increase in unearned incomes noted by Mr. Keir Hardie have ever invented anything, ever directed anything, ever selected their own investments without the aid of a stockbroker or solicitor, ever as much as seen the industries from which their incomes are derived, betrays not only the most rustic ignorance of economic theory, but a practical ignorance of society . . . .”

Our critic’s second example about two publishers calls for several comments.

It is not quite clear what is meant by the remark that the labour embodied in the production of 100,000 copies of one book is the same as that embodied in “several times that number” of the second book. If only 100,000 copies of one book were printed and, say, 500,000 copies of the second book, then much more labour was embodied in making the paper, and printing and binding the second book. If, however, both firms printed 500,000 copies, but one firm had 400,000 left on their hands, we can only say that the salaried worker who was responsible for so misjudging the market that he had 500,000 copies printed in advance when only 100,000 were needed, would get the sack.

Our critic obviously misunderstands the Marxian labour theory of value. Marx did not say that unnecessary or wasted labour is value-creating, but only socially necessary labour.

The labour-time that counts, according to Marx, is “no more time than is needed on an average, no more than is socially necessary” (“Capital,” p. 46). And again, “If-a thing is useless, so is the labour contained in it ; the labour does not count as labour, and therefore creates no value” (p. 48).

Our correspondent has something to say about the authors of the two books—”One was more successful than the other.” He will, however, be aware that some firms, Messrs. Dent, for example, can publish at a uniform price (their “Everyman Library”) the works of authors so much at variancewith one another as St. Augustine, Boeaccio, Darwin and Karl Marx; while on the other hand anyone who has the cash can pay all kinds of prices for, say, Shakespeare’s Works according to the different bindings, type, and quality of paper, i.e., according to the different amounts of labour embodied in them. In conclusion it may be repeated that the validity of the Marxian explanation of the working of capitalism cannot be denied merely on the ground that a number of individuals with less than Marx’s knowledge think the explanation inadequate, especially as for the most part they have not understood what Marx says; nor can Marx be shown to be wrong by examples which bear little or no relation to the world of capitalism as if actually exists.


Correction.—Owing to misreading a passage in our correspondent’s letter we inadvertently attributed to J. B. Shaw a statement actually made by our correspondent,

What our correspondent intended was:—

“I have said that Socialists and anti-Socialists alike have riddled the Marxian doctrine through and through.”

The first two words were linked together and we read them as “Shaw said, etc;’ and replied on that understanding, the more readily since Shaw is a critic of the Marxian theory. Our printer, however, got the words correctly, and thus the references to Shaw in the November issue, were not called for by our correspondent’s letter.—Ed. Comm.

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