2. ECONOMICS AND THE PROLETARIAN CRITIQUE

In the first article of this series we dealt with the relationship of Marx and Engels to the revolutionary tendencies in Britain, particularly in the Chartist Movement, through to the First International and finally to the defection of trade union bureaucrats in forming the counter-revolutionary Trades Union Congress. We shall now deal with a number of schools of thought which have had an important impact in Britain. The first one we will deal with is the Cooperative Movement.

Before proceeding further, we shall state that the Cooperative movement went through two phases which we can designate as firstly Utopian and secondly as bourgeois. The first one was an instrument of the class struggle, while the second has become an integral part of the bourgeois system. The first phase resulted in some experiments which all failed to survive for any length of time, while the second is still with us and enshrined in the principles of the Rochdale Pioneers of 1844.

We don’t intend to detail here the events of the Utopian phase as we have dealt in part with it in Origins and History of the English Workers Movement and in any case there are plenty of examples in works on Robert Owen, etc. We will be dealing with the criticisms of bourgeois economics which arose out of both the Utopian phase and also against capitalism in general.

The offensive of financial and industrial capital was proclaimed in works by people such as Adam Smith. Very soon these same ideas, particularly on the question of wealth and value, were being taken up and used as criticisms of the existing distribution of wealth. The initial ideas of Charles Hall have been dealt with elsewhere, but it was a work by Thomas Spence, with the intriguing title of Perish Commerce, which stung James Mill to directly countering such criticisms. Suddenly, the bourgeoisie felt under pressure, not only on the industrial front over the levels of wages, but through being directly attacked on the level of bourgeois economics. This dangerous tendency had to be fought by the bourgeoisie before it could make the workers movement “safe” for capitalism.

The bourgeoisie could not fail but to examine the nature of the new economic relationships, examine the internal functionings of the economy and industry as well as the consequences for society as a whole. The identifying of value with labour by Ricardo was further grist to the mill of the “labour” economists. By 1821 the conception of “surplus-produce or capital” appeared in an anonymous pamphlet – this phrase was taken up in Capital bv Marx and further developed. Even the “great test” of Bentham (the greatest happiness to the greatest number) was being used directly against the new capitalist system itself.

In the preface to Capital Vol, 2, Engels points out;

«Our pamphlet is but the furthest outpost of an entire literature which in the twenties turned the Ricardian theory of value and surplus-value against capitalist production in the interest of the proletariat, fought the bourgeoisie with its own weapons. The entire communism of Owen, so far as it engages in polemics on economic questions, is based on Ricardo. Apart from him, there are numerous other writers, some of whom Marx quoted as early as 1847 against Proudhon (Poverty of Philosophy), such as Edmonds, Thompson, Hodgskin, etc,, etc,, “and four more pages of etceteras”. I select the following at random from among this multitude of writings: An Inquiry into the Principles of the Distribution of Wealth, Most Conducive to Human Happiness, by William Thompson... [written in 1822]... The constant effort of what has been called society, has been to deceive and induce, to terrify and compel, the productive labourer to work for the smallest possible portion of the produce of his labour».

Engels goes on further to say: «But what is there new in Marx’s utterances on surplus-value?».

Such modesty indeed! We will record the fact that the critiques of the English “labour” economists have been incorporated into the Marxist world outlook of the proletariat.

Class Struggle by the New Industrial Working Class

The great difference between German and French polemics in the 1840s on the one hand and in England in the 1820s on the other, is that in the former case the attempt was made to build bulwarks against the new economic system, whilst in the latter the struggles within the new system were seen as requiring to be fought out. The English “labour” economists were looking for ways to resolve problems in favour of the industrial workers whilst not holding back the wheel of time, as in the case of Proudhon, etc. With the class struggle going on all around them, there was an obvious need for this conflict to be pushed forward as far as possible. It was within this context that theoretical constructions were built and plans for the future reorganisation of society laid. With capitalism itself still only on the threshold of its youthful phase, the instrument for resolving the contradictions in society, the industrial proletariat, was not as yet fully formed. For this reason the plans put forward were as yet still limited, and rested in part on hopes rather than material forces, confining such programmes to utopianism. But this however does not invalidate the bulk of the criticisms of capitalism taking place, which were in some aspects superior to those of many later socialists.

Marx was to show that these critiques of capitalism were divided into two groups, those who wanted to pursue the class struggle, such as Hodgskin and Thompson, and those who fell into Proudhonist errors and advocated labour vouchers as a form of currency, such as Bray and Gray. The basic division between these two tendencies was over whether solutions were to be found within the relations of production, i.e., diminishing the extraction of surplus value, or whether the problems lay purely within the realm of distribution. Within the revolutionary tendency we shall see the division between a form of syndicalism and the genesis of socialism. The inevitable question of the right to the whole of the product of labour was confronted and fought out.

Thomas Hodgskin is chiefly noted for his work Labour Defended, which was published in 1825 at a time when the struggles for the legalisation of trade unions were reaching their height. He also gave a series of lectures to workmen at the London Mechanics’ Institution, published later as a Popular Political Economy.

Labour Defended asserted that, throughout the country there was raging a struggle between capital and labour. Because of the conflict of interests, workmen felt impelled to organise in trade unions to pursue their own aims. The employers paid them only the barest minimum in order for them to subsist. By his own calculations he asserted that while because of the new machines and science ten times more goods could could be produced per worker than two centuries previously, the workers saw none of this increase and were forced to live on the same subsistence level as their counterparts of two hundred years before. All the advantages had gone to the capitalist and the landlord. Hodgskin asserts that this is wrong and that the value created by the worker should go to that person and not to the capitalist, as it is only by the use of living labour that goods are produced. Without the use of living labour, then the machinery of production would fall into decay. Capital, as dead or stored-up labour, can not produce anything without the use of living labour which sets it in motion in order to produce useful goods. As the possessor of capital, the employers are a burden on the backs of the workers. But it is not just the individual employer who is a burden to the worker. For instance, if a labourer buys a coat, he pays over and above the cost of what nature demands for its production; by making payments of interest to the owner of the sheep, the wool-buyer, the capitalists in the spinning aills and weaving sheds, the cloth merchant and the master of the tailoring shop. It is hard to say how much all these exploiters make out of the sale of the final coat, but it may be six times that of the necessary wages incurred in the overall processes involved in producing the coat. Thus the labourer, by purchasing goods pays many different types of capitalists.

Hodgskin refutes the notion that wherever workers are brought together to undertake production the end product belongs to any individual worker.

«Each labourer produces only some part of a whole, and each part having no value or utility of itself, there is nothing on which the labourer can seize, and say: “This is my product, this will I keep for myself”. Between the commencement of any joint operation, such as that of making cloth, and the division of its product among the different persons whose combined exertions have produced it, the judgement of men must intervene several times, and the question is, how much of this joint product should go to each of the individuals whose united labours produce it ?» (Labour Defended, 1922 edition, p,53).

Hodgskin goes on to declare that the division of value would be left to those workers involved. It is at this point that a number of unsatisfactory conceptions arise. While he passionately defends the workers’ struggles over the surplus product of their labour, he never comes up with a way of actualising a new form of distribution, of new forms of social relations. Whilst desiring that the workers have full access to the products of their labour, he still concludes that it is impossible to do away with capitalists altogether. He applauds the prospect of drastically reducing the profits of the capitalists, but concludes that driving them out completely would only “do mischief” as it would wreck economic relationships. It all comes down in the end to ideals, believing that if all decisions were taken on the basis of honour and principle between all those involved in production, then the rewards of labour would be settled by competition in the market. He could not escape the notion of free and competing units of production. In later works he asserted that individual property was natural and essential to the welfare and existence of society. The achievement of a more equitable distribution of the products of labour was, in Labour Defended, attributed to the working classes, but later on, he sees this as the role of the middle classes. These conclusions are nothing other than the sorry product of syndicalism.

Thompson, while recognising Hodgskins’ work in defending the interests of the working class, takes him to task for defending competition and the marketplace – the infamous “higgling of the market” – as a solution for the endeavours of the workers. In paying due respects to his “friend and fellow-labourer” he warns Hodgskin that he is in bad company in defending competition between enterprises, as all its advocates are on the side of capital and against the claims of labour.

Plan for the Reorganisation of Society

With William Thompson we find the process of transformation from bourgeois theories towards a form of socialism, combining elements of Bentham, Ricardo and Owen. Initially Thompson had been a follower of the Utilitarian school which praised Bentham’s test of the greatest happiness to the greatest number. This cannot be achieved without the physical means of enjoyment and objects of wealth. Abundant production and a just distribution are indispensable for the achievement of the greatest human happiness. The conditions in society showed that it wasn’t meeting this test, so he examined why in his Inquiry into the Principles of the distribution of Wealth most conducive to Human Happiness. It is a rather torturous work with many ideas and concepts being weighed in the balance ... and found to be wanting. Thompson found that the mere abundance of wealth could not guarantee happiness. There already existed in 1822 a country rich in the means of production but there was still unhappiness. Moreover, poverty and misery were the lot of the majority of the producers. The only way this situation could be overcome was by the abundance of wealth being linked to a just and equal distribution; the wealth must be distributed over the whole population in order for each member to satisfy their needs instead of leaving wealth in the hands of a few.

All we can do here is summarise a few of the points raised, such as the view that labourers and craftsmen are the real producers of value and useful goods, as opposed to those of capital and the capitalists. Also, the system of private property does not give security to the producer, for much of the value of what he produces is taken away in the shape of profit and rent. The lack of security of the producer prevents the productive forces from producing enough to satisfy all of human wants. It is the unjust and unequal distribution which checks production; moreover, the little that is produced is monopolised by the few. Excessive wealth and luxury on the one hand, abject poverty and misery on the other – weighed in the balance, the existing form of society is found wanting.

In examining all aspects of production, distribution and the concept of value, Thompson could not find any way within the existing economic relations to alter the distribution of wealth in favour of the producer. It was this conclusion which pointed him in the direction of alternative solutions. The conclusion he drew is that there is no more potent force which operates on human character and on human happiness than the mechanism of the distribution of wealth. Considering the tremendous capacity of the new productive powers, there should be no hesitation in undertaking a redistribution of wealth. The existing accumulated wealth is really insignificant when compared with the possibilities of the creation of new wealth which a just and equitable distribution would effect. All this can be achieved only by (1) labour freely and voluntarily given; (2) the products of labour secured to the producers; (3) all exchanges of these products shall be free and voluntary. Only on the basis of these principles can there be both security and equality.

Thompson takes a further few steps forward in 1826 in his Appeal of One Half the Human Race, Women, Against the Pretensions f the Other Half, Men,in pointing towards ways of eliminating oppression and exploitation.

«Under such arrangements [Labour by Mutual Cooperation], women may have equal improvement and use of all their faculties with men; under these circumstances, they may derive as much happiness from every source – of the senses, of intelligence, and sympathy – as men, according to the peculiarities of organisation of each: under these circumstances, all may be perfectly equal in rights, duties, and enjoyments, according to their capabilities of acting, suffering, and enjoying».

He goes on to point out that even though men may be able to work harder than women in producing the objects of enjoyment [commodities under this society], where would men be without the peculiar pains, privations and cares that women endure in bearing children. Against the rather doubtful advantages of the present state of improved chemical and mechanical science, of mere superiority of animal strength on the part of men in producing goods, how does that compare with what women go through in preserving the human race. Which is more indispensable, the production of a few more broadcloths and cottons, or bringing up the next generation? He concludes by stating that «no person cheerfully exerting his or her means, whatever they might be, for the common benefit, would be punished for the scantiness of those means, still less from the pains or privations attending their development».

In 1827 Thompson published his main work, which was Labour Rewarded, in which he directly took up some of the limitations of Hodgskin’s Labour Defended. Here we can only summarise, and give a few quotations, from this important work. Were justice and kindness the basis in rewarding labour, the largest rewards and compensation would go to those who do the most severe and repulsive toil. But to such labourers, because they are the most helpless, does competition with its unequal remuneration, award uniformly the smallest share. Better means in the earlier stages of society being unknown resulted in competition with its unequal remuneration – prizes for the idle and few, want and misery for the many – calling forth the activity of industry. The end has been sacrificed to the means. This inequality of remuneration has been erected into a God by the successful patrons of brute force, or “higglers of the market”, and been consecrated and worshipped by public opinion, by law, by superstition. It can not be otherwise under such competition.

Despite the differences of categories of labour, there seems to be no reason to justify the difference of remuneration. It aggravates the misery of the wretched, while giving the rewards to superfluity and vanity at their expense. As to different classes of labourers, those who supply the necessities of life are now almost uniformly the worst rewarded; while those classes which provide superfluities, particularly if novelties, are the best rewarded. As to the same class of labourers, the scheme of unequal remuneration by task-work, produces at the same time excessive toil, and brings down to the lowest level the remuneration of labour. «It may be that skill, utility, and great demand, may happen to coincide; but this is purely accidental». Some through apprenticeships, corporations and guilds, etc., may have been able to elevate themselves higher than others; while the great mass of labourers have through competition been unable to do otherwise than live out their average lifespan and leave behind there a new race of labourers to continue the routine of unattractive, unrequited, toil. Those classes of trades or subdivisions of classes which are better remunerated are the mere aristocracy of trades, possessing no superior merit but certainly having all the vices of all aristocracies, which the chance of circumstances enables them to procure above the mass of their brethren. Later on in his book, Thompson points out that the highest price which Free Competition will enable unions of the industrious to obtain for their labour, is nothing like the value of their labour, but the same rate of remuneration which will permit the capitalists in the same industry to reap profits from their capital. Hence it is evident that the benefits of these voluntary unions to the industrious classes, are almost entirely limited to times of ordinary or extraordinary prosperity in their trades. In a declining state of trade, particularly when the crisis is more generalised, voluntary unions to guard against the under-bidding of the industrious against each other are rendered inoperative.

Thompson, in examining whether it is possible to secure to labour the products of its exertions, and giving equal remuneration to all labourers, concedes that this is impossible to achieve within the framework of individual competition, but not under other arrangements. How could these arrangements be brought into being? It is only by the workers becoming owners of the means of production.

«We have seen that, in any state of society ever so little advanced from barbarism, it is almost impossible to ascertain what portion of the produce of combined labour – and all labour to be economical must be combined out of the minute sub-divisions of its various branches – has been the work of any individual labourer, and of course that it is impracticable to award to the individual, separately, the products of his labour. What cannot be done individually, we shall see may be done collectively, and it is clearly our duty to make the nearest approach we can, consistently with reproduction, to the securing to all the products of their labour» (p. 37).

Thompson put forward plans for reorganising existing industries. Funds should be raised for the utilisation of the labour of the unemployed and other casualties of capitalism. He put forward plans for the acquisition of buildings and machinery to create new units of production and set them to productive work. Out of the products of this labour nothing should be withheld except the cost of management and depreciation of capital. [We refer the reader to Marx’s Critique of the Gotha Programme to see how close these two positions are.]

The form in which the plans are formulated show that Thompson still had not been able to totally leave the Owenite utopian school. The plans still talk in terms of each worker having a share, but one share only, in their own enterprise. It would still operate as a business but he pointed the way towards a break between use value and exchange value. He talks often about remuneration rather than wages, and the workers collectively having access to everything produced, with provisions being made for those incapable of work, etc. To Thompson goes the credit of formulating value by labour time and, pursuing the consequences of the quotations above, this could only be done as an average of the endeavours of all those involved in the collective processes of production. He was facing in the direction of scientific socialism, while still clinging to notions of moral enlightenment and progressive advancement.

Even with the most perfect organisation in industry imaginable – given the workers being able to achieve this – the problems of the workers would not end. They would still be prey to the burden of rents to landlords, rivalries to similar enterprises still operated by capitalists, profits made on the supply of raw materials and the fluctuations of trade dependent on general markets. He advocated the raising of funds to purchase land and settle agricultural associations as well as the formation of communities of cooperative production for their mutual requirements.

The general problems of the market continued to dominate Thompson’s work. In 1830 he was putting forward ideas for its supercession or replacement by the generalising of cooperative production.

«Want or uncertainty of employment for the industrial classes is the master-evil of society as now constituted. What immediately causes want of employment? Want of sale or market. Goods when produced cannot be sold at all or not at a price that would repay the cost of production; therefore manufacturers’ cannot give permanent and remunerative employment» (Quoted by Max Beer, History of British Socialism, Vol. 1, pp. 227-8).

Limits and Collapse of Utopian Socialism

The works of the English “labour” economists represented the limits that could be reached out of the criticism of bourgeois economics. They reflected also the upward turn of the growing class struggle, still at that time mainly on the economic level. Various aspects of the unfolding bourgeois economic relationships had to be examined to see their effects and limitations, as well as ideas proposed for society’s advance. As Max Beer points out «Most of the controversies of German and Eastern European scholarship concerning Marx’s Capital were, in their essence, fought out in the years between 1820 and 1830 in England round Ricardo» (p, 188). These “labour” economists did not restrict themselves to economic theories but were a part of the developing proletarian movement examining the new world they found themselves a part of. These same “labour” economists were active in lectures and discussions of the early working class leaders in preparing them for the ensuing struggles. However, as there did not yet exist the material force which could overturn the prevailing economic and political situation, they did not have a revolutionary perspective. However, they reflected on the political level the slow and painful uphill struggle to lay the foundations for the first independent proletarian organisation – the National Union of the Working Classes formed in the early part of the 1830s. Not only were these works a formidable critique of the fundamentals of the bourgeois economy, but also represented veritable arsenals for Marx and Engels in developing the world-historic outlook, of the proletariat.

One could not have expected the work that was accomplished by these “labour” economists to have gone further than it did, nor for it to have been able to transcend utopianism, because of the limitations of the period in which they developed. But they prepared the ground for others. They anticipated the preliminary steps in the transition from capitalism to forms of socialism, but their chief problem was in not being able to consolidate their work into a single school of thought – this was only possible with the development of the movement in Germany, and thus Marxism was born. Marx and Engels took up the work of the English “labour” economists, not only to beat down such ideas as represented by Proudhon, but also to point the way forward. The conquests of these utopian economists have been put into good order and incorporated into Marxism.

The polarisation over the question of cooperation during 1831-4, between those who advocated and pursued the class struggle on the one hand and those who defended the existing form of society on the other, is dealt with in our other series, Origin and History of the English Wokers Movement. It represented a dividing line between the revolutionary movement and the defenders of bourgeois order. Also it is one of the issues involved in the bourgeois falsification of history, carried out in particular by Sidney and Beatrice Webb.

In the Webb’s History of Trade Unionism we find the rather fanciful notion that Robert Owen was led astray by utopian and impractical ideas. For the amusement of the reader we shall give a short quotation.

Owen «was disabled by the confident sciolism and prejudice which has led generations of Socialists to borrow from Adam Smith and the “classic” economists the erroneous theory that labour is by itself the creator of value, without going on to master that impregnable and more difficult law of economic rent which is the very corner-stone of collectivist economy. He took his economics from his friend William Thompson, who, like Hodgskin and Hodgskin’s illustrious disciple, Karl Marx, ignored the law of rent in his calculations, and taught that all exchange values could be measured in terms of “labour time” alone» (pp, 162-3).

So here we have Owen as a lovable idealist led astray from practical tasks by nasty extremist socialists with their nefarious ulterior motives. It is a pity for the Webb’s that the blame could not be laid at the door of “foreigners”, but had decidedly English origins. Indeed, it was the whole classical school of economists who had got things “wrong”. After a century or more of examination by bourgeois economists, labour was identified with value and rent “forgotten” – one can wonder whether the Webb’s had read Ricardo on the subject, or if instead they were just plain liars, [An interesting aside is that the main reason the Labour Bazaar left the Grays Inn Road, London, premises is that the landlord, a friend and supporter of Robert Owen, wanted £1,700 per year rent – a substantial amount in those days]. The Webb’s apparent lack of scruples is neither here nor there. What does matter to us is the falsification, that the“utopian” form of socialism had been tried and failed, to be replaced now by a more “practical” strategy.

The truth is that Hodgskin and Thompson’s plans for industry were not put into practice at all. They were in truth impractical (barring a complete takeover of society by the “industrious classes”, meaning in effect a revolution), but what was put into effect in Owen’s Labour Bazaars was a programme for the survival of self-employed craftsmen and artisans. It was a strategy more to the liking of bourgeois radicals, such as Francis Place, who wanted the working class to remain under the political control of the middle class. The goods exchanged were the result of very small-scale production, such as hats, coats and boots, etc., precisely the industries where mechanisation hadn’t penetrated yet. The hopes for a self-sufficiency based upon such exchanges were erroneous because many of the goods people needed were the product of large-scale production, such as woven goods (cotton and wool products), steel, coal, food, etc, and thus were controlled by the capitalist class, The capitalist owners of the means of production expected to be paid in coin of the realm, instead of fancy bits of paper. This was the real application of the law of value.

A more important point needs to be stated. The Labour Bazaars did not implement exchange by labour-time calculation – rather it was the other way around. A maximum price (calculated in money) was decided on what the market would stand for a particular type of commodity, then a wage was stated for the value of the labour of a worker, and so a number of hours he should have worked for was deduced. If he took longer than that, then it was just too bad. Why should the customer subsidise lazy workers? That was the rationale of the advocates of Labour Bazaars. As one disciple of Robert Owen put it later, the equitable labour exchange failed because «those who availed themselves of it were too ignorant, too selfish, too dishonest» (Cooperator, 15th August, 1865). The Owenite partisans would rather blame the lack of enlightenment of the masses than the consequences of the market system, which was the real cause of the problems.

Another problem of the Labour Bazaars should be stated. At times there were increasing stocks of goods that were sold only slowly. In fact they became repositories for the dumping of goods that people did not want. For the Webb’s, this just showed that the whole process was unresponsive to the needs of the market. They expected and wanted the productive processes, in this case that of the independent artisans, to be disrupted by the whims of the buying public. In other words, the whole process of capitalist anarchy in the market place should be introduced into the Labour Bazaar system. Periodically the whole system of production of handicrafts would then be thrown out of gear in precisely the same way as in large-scale production, brought about by the bourgeoisie re-asserting its levels of profit. For Marxism neither over-production and dumping on the one hand, or the chaos of the market on the other, is an acceptable solution for a future society. We attack both the concept of production for the sake of profit and the squandering of human and material resources of production for its own sake. We don’t give a damn about having people working just to fulfil “quotas”, for completing a set “working week” or satisfying some damn account book. All this nonsense will go with capitalism in general, and alienated labour in particular.

By challenging the falsification of the Webb’s we are not defending the Utopians as a school of thought. We have our own criticisms of the Utopians which we are quite open about. But at least those members of the Utopian school we have mentioned were against the capitalist economic relationships and strived to project forward an alternative world outlook. It is that element in their work we shall not have defamed, because it is part of the ideological offensive of the bourgeoisie to deny that there is any “realistic” alternative to the capitalist social relations. Falsifiers, such as the Webb’s, not only want to rob the workers of a future, they also want to rob them of their past. Opportunists hope that when the workers are convinced that there is no alternative to capitalism, then perhaps will they settle down to appreciate the wonderful nature of the bourgeois world. It is people such as the Webb’s who are the real Utopians,

Those who today deride the works of the early labour “economists” as “impractical” and “unrealistic” are those who look for more practical ways, inevitably within capitalism, within the present framework of society. They look for some aspect of capitalism which they can declare to be progressive (stalinism), independent (libertarianism) or state controlled (trotskyism). We can do nothing better than to end this section by recalling the words of Thompson that anyone that defends competition and the market are on the side of capital and against the claims of labour. We will deal next with the bourgeois phase.

(to be continued)