Cooking the Books: No Marx without Adam Smith? (2026)

The Cooking the Books Column from the February 2026 issue of the Socialist Standard

Next month is the 250th anniversary of the publication of Adam Smith’s The Wealth of Nations. In the run-up to this, the Economist (18 December) carried an article by its ‘senior economics writer’, Callum Williams, in which he suggested that Smith had been ‘misinterpreted and his influence overstated’.

His case was that Smith wasn’t the originator of the ideas he expressed, that he copied from others and was a bad writer, and that he also made mistakes:

‘In the “Wealth of Nations”, he argued for the “labour theory of value” (the idea that the amount of work that goes into a product determines its price, rather than how useful that product is). This theory distracted economists for decades and laid the groundwork for Marxism. Exploitation, in Marx’s view, arose from the difference between how much workers had laboured to create a good and what they were paid for producing it. Without Smith, there could have been no Marx’.

The last sentence is ridiculous. There were others before Smith who put forward the view that the exchange-value of a product of labour depended on the amount of labour required to produce it. In a footnote early on in the opening chapter of Capital, Marx’s quotes Benjamin Franklin as having pointed out in 1729 that:

‘Trade in general being nothing else but the exchange of labour for labour, the value of all things is … justly measured by labour’.

Prior to Capital, in A Contribution to the Critique of Political Economy (1859), Marx credited Franklin as the person ‘who for the first time deliberately and clearly … reduces exchange-value to labour-time.’

In a podcast on the same subject on 1 January, Williams attempted to refute the labour theory of value by saying that, on the contrary, ‘what determines the price of a good is … how much demand there is for that good and how much of that good is supplied by the market’. This differs from what he had written in his article that a product’s price is determined by ‘how useful that product is’. That argument is easy to refute —there are a lot of things that are more useful than gold or diamonds yet gold and diamonds have a higher price; which, clearly, must have something to do with the fact that it is more difficult (takes more work and time) to produce gold and diamonds than it does to produce the other, more useful products.

Supply and demand determine the short-term market price but, in the longer term, supply will only continue if the suppliers — profit-seeking capitalist firms — cover their costs and make a profit. In bringing about the longer-term price the play of market forces will take into account the labour-time required to produce the product from start to finish.

Not that Marx did argue that under capitalism products exchanged at their labour-time value. He was well aware that the pursuit of profits resulted in this happening only accidentally but that the prices at which products sold could only be explained on the basis of a labour theory of value.

The reason why economists came to reject any labour theory of value (Smith’s as well as Marx’s) was that it led to the conclusion Marx reached who, said Williams, based ‘his entire theory of exploitation on the labour theory of value’. It was, he said, ‘precisely because Smith was so influential, his wrong-headedness about the labour theory of value was a big problem.’

This problem was solved, says Williams, when economic theory ‘gets wrestled back through the correct understanding of value by the marginalists at the end of the 19th century’. How convenient for the exploiters of labour, but it turned academic economics from a science into apologetics for capitalism.

Venezuela: another failure of reformism (2026)

From the February 2026 issue of the Socialist Standard

Venezuela is a petro-state, defined as a country with an economy and government that depend heavily on money from extracting and selling oil and gas. Oil was first extracted there in the 1920s and Venezuela was one of the founding members in 1960 of the oil-producers’ cartel, the Organization of the Petroleum Exporting Countries (OPEC), that held the rest of the capitalist world to ransom after the 1973 Yom Kippur War which closed the Suez Canal and led to petrol rationing. The other four founding members were all in the Middle East: Iran, Iraq, Kuwait and Saudi Arabia. Venezuela in fact has more oil reserves than Saudi Arabia.

Ground rent

The main income of a petro-state is ground-rent rather than profit. Ground-rent is an income that accrues to ground owners because they happen to own land that contains some natural resource. In agriculture this would be land that is more fertile. The price of, say, wheat will reflect the cost of growing it on the land which provides the producer with a normal profit. Wheat grown on land that is more fertile than this will sell at the same price, despite the cost of growing it being less. The difference between the price the wheat sells at and the lower cost of production is ground-rent. In other words, those who own land with a lower cost of exploiting its natural resource than at the margin, whether this be wheat or oil, get an extra income above normal profit.

Saudi Arabia, as the country where the cost of extracting oil is lowest, gets the biggest proportional ground-rent. Other oil-producing countries, except those with the highest production costs, also benefit to a greater or less extent. The amount of oil rent a petro-state receives depends on the price of oil, the higher this is the more the rent (which is the economic logic behind the OPEC oil cartel). But OPEC can’t fix the price of oil at will or forever; other factors are involved such as the demand for oil, which fluctuates up or down depending on whether world capitalism is in the boom or the slump phase of its economic cycle.

The Gulf oil-producers are all dynastic states and a large part of the ground-rent they get goes to the ruling dynasty. The rest of the population, mainly immigrant workers from Asia and other Arab states, as non-citizens have no say in how the rent is distributed. Most of them live in poverty while the kings, princes and sheiks and their families live in the lap of luxury.

Politics and the price of oil

Venezuela was different from the other founder members of OPEC in that it was more developed both economically in already having a capitalist economy and politically in that its population were citizens with the right to vote. Because the government was so dependent on oil rents, the course of the political life of the country reflected changes in the price of oil.

From 1948 to 1958 Venezuela was a dictatorship, backed and brutally enforced by the army. During this period oil prices were high but the benefits went to the US oil corporations that had been granted concessions to extract oil, though some was used on infrastructure projects and to enrich the dictator and his political allies.

In 1958 the dictatorship was overthrown and Venezuela became a formal political democracy with competitive elections between rival parties. Successive governments began to take back ownership of the oil as concessions expired. In 1976 all oil in the ground became government property via a state enterprise, Petróleos de Venezuela (PDVSA). Things were relatively normal until oil prices fell in the 1980s due to the ‘oil glut’ that came about following the post-1973 energy crisis.

The high price engineered by OPEC after the 1973 Yom Kippur War led other capitalist countries to seek and develop other energy sources (coal enjoyed a bit of a revival) and other sources of oil, leading to overproduction. The result in Venezuela was an economic crisis and in 1989 the government imposed an austerity that led to strikes and riots and attempted coups, including one in 1992 led by Hugo Chávez, a young army officer from a poor background. He was jailed but released after two years. On his release, he turned to conventional politics and won the 1998 presidential election, taking office in 1999. He was re-elected under a new constitution in 2000, then, despite a short-lived coup against him in 2002, again in 2006 and 2012.

There is no reason to doubt that Chávez sincerely wanted to improve the lot of the population of Venezuela, particularly the poorest. He was, basically, a populist Venezuelan nationalist. He didn’t claim to be a socialist when first elected president in 1998, just to be anti-elite and for using oil revenue to help the poor majority. It was only in 2005 that he declared himself an advocate of ‘21st century socialism’. In 2007 the name of his party was changed to the United Socialist Party of Venezuela (PSUV), which is still the ruling party there today.

He was lucky in that soon after he first came to power the price of oil rose, providing his government with funds to pay for improved services for the mass of the population:

‘When Chávez took office in early 1999, oil was trading at less than $15 a barrel, but its price started going up almost instantly. By the time he was elected to his third term, in 2006, it was trading at about $60 per barrel; by the time his presidency ended upon his death in 2013, a barrel of oil was worth almost $100’.

With a healthy income from oil rents, the Chávez government was able to improve the living standards of the mass of the population:

‘Chávez’s government focused its efforts on bringing people out of poverty using the surpluses generated by oil revenue, buffered by high market prices. Social spending per person in Venezuela grew, in real terms, 170 percent from 1998 to 2006 and if we included the social spending made directly by Petróleos de Venezuela (PDVSA) the figure reached more than 200 percent per person. In 2008 education spending was more than double what it had been in 1999. The number of people living in poverty dropped from 55 percent in 1998 to 34 percent ten years later. University enrolment has almost tripled since 2000. (… ). All of the redistributive measures undertaken by the government meant that in 2011 Venezuela was, by Gini coefficient, the least unequal country in Latin America …’.

Pretty impressive, which explains why Chávez was re-elected three more times. Some, particularly leftists from Europe, saw this as a successful move from capitalism towards socialism. The prominent Trotskyist Alan Woods (a leftover from the old Militant Tendency) was particularly impressed and met Chávez a number of times, becoming a propagandist for the ‘Bolivarian revolution’. But he wasn’t the only one. Even today some of those demonstrating against the US attack on Venezuela are doing so to defend the regime there because they believe it to be socialist. ‘The Bolivarian Revolution is committed to building socialism and independence’ declares one group (revolutionarycommunist.org). But it wasn’t socialism or a step towards it; it was an attempt to reform capitalism into a less unequal society which appeared to be working due to a period of high oil prices and rents.

Chávez died in 2013 shortly after being re-elected. In a sense he was lucky again, as oil prices eventually fell as a result of the drop in industrial activity that followed the Crash of 2008. He thus avoided being the head of government in Venezuela during a period of falling oil prices. That poisoned chalice was passed to his successor, Nicolás Maduro, and the Chavista military and political bureaucracy that ruled the country.

Maduro’s poisoned chalice

In 2014 oil prices fell from $100 a barrel to $40 and did not rise much again (even today it’s only about $60). The Maduro government was in an impossible position. Unable to maintain spending to benefit the population at its previous level it was forced to cut back. Popular discontent rose and in 2016 opposition parties won a majority in the National Assembly which went on to refuse to recognise that Maduro had won the 2018 presidential election. The ruling bureaucracy was not prepared to give up power and turned to political manipulation and repression to maintain it. The US and Europe, too, refused to recognise that Maduro had been legitimately elected and imposed economic sanctions on Venezuela which continue to this day.

With less income from oil rents the government had to cut the benefits it handed out, with the result that poverty and inequality grew:

‘According to a quality of life study conducted by a group of universities in the country, the Gini coefficient, which measures income inequality, reached 56.7 in 2021, surpassing that of Brazil. The research also shows an increase in the income poverty rate, with more than 90% of households living below the poverty line. The most recent data indicate an increase in inequality, with an index of 60.3, and a decrease in income poverty to 80.3% of households, a result of the modest economic recovery of 2022’. (translated from Spanish)

So, while the proportion of people in poverty fell from 55 percent in 1998 to 34 percent in 2008, by 2022 it was up to 80 percent. In 2011 Venezuela had been the least unequal country in Latin America in terms of income. Between 1999 and 2011 the Gini coefficient had fallen from almost 50 to 39. In 2022 it was back up to 60, higher than it had been when Chávez was first elected.

Some of this will have been due to the sanctions imposed in 2019 by the US and Europe but the decline had set in before that. Imposing sanctions is a cruel and cynical policy, arguably worse than military action. Its aim is to make the situation of ordinary people worse in the expectation that they will kick out the sanctioned government. It worked in the sense that it did make people even worse off as the government was forced to cut back yet more on the reforms of the Chávez period, and this did make people more inclined to vote to remove the Maduro government from office. Sanctions do not affect those in charge of the state as they can always ensure that they don’t suffer any personal privations and that adequate resources are attributed in priority to maintaining the state apparatus and its repressive powers.

Capitalist economists say that Chávez should not have distributed so much of the oil rents to improve the position of the poor, but should have instead invested more in developing capitalist industry to provide jobs and incomes to counter what would happen if oil prices and so oil rents fell or oil ran out. This is a lesson that the Gulf sheiks had learned, using their rents not just to lead a personal life of luxury but to convert themselves into capitalists in their own right by investing in industry abroad as well as in their sheikhdoms.

Given capitalism and how it works, there is something in what its economists say, but this is further confirmation that a government cannot continuously redistribute wealth to the poor; this will be unsustainable and lead to economic disaster. To function normally, the capitalist economy requires that even oil rents should be invested in capitalist production, not spent on improving people’s lot.

Living standards in Venezuela fell by 75 percent between 2013 and 2023, driving some 7 million out of a population of 30 million to leave the country to seek a better life elsewhere. Supporters of capitalism gleefully trumpet this as a failure of ‘socialism’. In fact, it was a failure of redistributive reformism that showed both the fragility of reform measures and that no government can keep on redistributing income to the non-owning majority without this eventually ending in economic disaster.

Adam Buick

Proper Gander: Processing progress (2026)

The Proper Gander TV column from the February 2026 issue of the Socialist Standard

The 2020s is a particularly unsettling decade to be living in, and the whole of the 21st century so far hasn’t been the utopia which our forebears might have expected it to be. Cultural historian Matthew Sweet explores this current bleak mood by asking What Happened To Progress? in his BBC Sounds documentary series. The premise is that there is a ‘polycrisis’ in the realms of technology, the economy, the environment and global politics. As none of these are working in a way which benefits most people, our attitude towards progress has been affected. Sweet and other academics, writers and specialists give their views around how ‘one of the foundations of our economic system – progress understood as endless growth and rising prosperity – is looking pretty brittle right now’.

According to artist James Bridle, we have come to think of progress as being a line on a graph, swooping upwards and to the right. The background assumption has been that our children will inherit a better world where they can be happier, healthier, wealthier and wiser than ourselves. As other contributors explain, this concept of progress hasn’t always been part of our collective psyche. In previous societies, expectations for the future were more aligned with the cyclical patterns in nature, or had a ‘rise and fall’ narrative. Classicist Edith Hall reminds us that acquiring knowledge led to a fall in both the Adam and Eve story in Abrahamic religions and Pandora’s Box in Greek mythology. There’s a consensus among the contributors that our modern understanding of ‘progress’ emerged during the 17th and 18th centuries, through the philosophical works of figures such as Francis Bacon, Adam Smith and Immanuel Kant. Progress became more practical with the technical achievements of the 19th century. As author John Lanchester tells us, resources were seen as limitless as economies expanded through industrialisation.

There were improvements in many communities’ living standards, healthcare and literacy which carried on into the 20th century. Sweet says that the First World War ‘broke the link … between technological and moral advancement’, with the slaughter enabled by the knowledge to manufacture ‘tanks, submarines and razor wire’. As a response, multi-national institutions were formed, such as the League of Nations, the Non-Aligned Movement and the United Nations, although these haven’t led to world peace, and war is now more of a threat than ever. As well as weaponry, Artificial Intelligence is another instance of how the results of scientific progress prompt fears about their impact, although climate change is described as the ‘ultimate example’. Contemporary uncertainty around progress comes from the tension between realising it isn’t a simple upward curve and a need for its reassurance, as described by psychoanalyst Adam Philips. Philosopher John Gray expands on this with a lively definition of progress as ‘the crutch, … balm, … therapy, … talisman … to stave off dread or even despair’. Our expectation of progress, as writer Philip Ball says, is out of kilter with how the natural world and society function.

Karl Marx’s views about how society functions are cited occasionally through the series, such as his ‘rival proposal’ to Kant’s ‘fanciful’ idea about a peaceful coalition of states. Historian Margaret MacMillan promisingly describes Marx’s Capital as being about progress to ‘a world in which there are no national borders, no classes left’. But this is only briefly mentioned, confusingly (but predictably) alongside references to Lenin and the so-called ‘communism’ of the USSR and China which had different aims entirely. On the other occasions when Marx is discussed, he’s presented as a poet, with an evocative reading of the ‘all that is solid melts into air’ quote from chapter one of The Communist Manifesto.

What Happened To Progress? is edited so that each contributor only speaks a few lines at a time before the emphasis is changed by someone else. Although this means that a range of perspectives are given, there isn’t the space for explaining in much depth. As indicated by the disparate references to Marx, the fundamental role of the economic structure of society in creating the material conditions for ‘progress’ isn’t explored in any detail. Many of the contributors’ observations and stances would snap into place with the context that progress and our understanding of it are moulded by how capitalism has to function. Goods are produced, services are operated and governments are run according to what is advantageous to the minority who own industries and wield power. Profitability for the few is directly or indirectly the defining factor in whether an innovation takes hold. This means that progress is shaped by what is in the interests of the capitalist class rather than by what benefits humanity in general.

The consequences of this are shown by the ‘polycrisis’ in society and the weakening of our belief in progress. As this notion became established through the advancements of the Enlightenment and the Industrial Revolution, it came from an era when capitalism was a progressive force in developing society’s infrastructure. But we have already reached the point where technology and administrative structures can potentially provide a decent standard of living for everyone. The decline in a belief in progress reflects how capitalism is no longer progressive. The documentary winds down with the contributors considering whether we should reject, retain or reclaim the idea of progress, with John Lanchester wondering whether we’re now on a ‘shift to something else’. In our view, to get the world out of its current rut, this would have to be a collective shift to replace capitalism with a social system where progress can mean improvements for all.

Mike Foster

Trespass and Roaming (2026)

Book Review from the February 2026 issue of the Socialist Standard

Contested Commons: a History of Protest and Public Space in England. By Katrina Navickas. Reaktion Books £20.

In 1908 the Socialist Party asked Manchester Corporation for permission to hold a weekly meeting in Alexandra Park in the south of the city. The response was that only two meetings could be booked at a time.

This is an example of the situation concerning the use of various kinds of public spaces, which is surveyed here. There is a brief mention of Alexandra Park, and several references to the Social-Democratic Federation (SDF), the organisation from which the founders of the SPGB split. It is stated that an ex-anarchist became a member of ‘the Socialist Party’, but this should be the British Socialist Party, a later name of the SDF.

Besides parks, other forms of public space are dealt with, including pavements, squares, grass verges, footpaths and different kinds of ‘common’. Common lands are not really owned by ‘the people’, and their boundaries frequently change. There is no general right of assembly or right to roam in England, and it took the Kinder Scout Mass Trespass of 1932 for many customary ‘rights of way’ to be legally recognised as such. Regulating the commons was a form of enclosure, and this was not just a matter of the many parliamentary acts enforcing enclosure but ‘an ongoing process of accumulation of property through dispossession’. The 1899 Commons Act empowered local authorities to regulate the commons so as to stop ‘nuisances’, which could include marginalised communities such as Roma, and also workers holding demonstrations or just enjoying the open air.

Some Liberal politicians saw open spaces as a way to reduce the supposed threat from urban workers to the social order, but on the whole the elite wanted to limit workers’ access. It was also a matter of the ‘four Gs’: gathering grounds (space for reservoirs, canals and so on), grouse moors, golf courses and guns (military training areas). In all these cases, ‘waste’ land was requisitioned for ruling class purposes by excluding the public. Thus the ‘upland landscapes of northern England were transformed during the nineteenth century’.

As suggested above, parks were important places for political propaganda, with the SDF and SPGB among many organisations that held regular meetings there. Yet even Speakers’ Corner in Hyde Park was not a true commons but part of the Crown Estate and so subject to definite rules. Trafalgar Square was from its construction a major site of protest, but the violent police response on Bloody Sunday in 1887 showed how the establishment could constrain political activity there if it wished. In the 1930s the police brutally put down demonstrations by the National Unemployed Workers’ Movement, but did not intervene so much in fascist rallies.

In more recent years, press and television coverage have sometimes exposed police responses to demos, and CCTV has been used to monitor events. A new Public Order Act was passed in 1986, and trespass in public spaces became known as ‘aggravated trespass’. There was some opening up of the right to public spaces, such as the Countryside and Rights of Way Act of 2000, but since then much legislation has restricted the freedom to protest. Navickas’ book provides a comprehensive account of public space in England, plus attempts to expand and to restrict it.

Paul Bennett

World Socialist Radio - Why We Can’t Support Your Party (2026)

Adapted from the January 2026 issue of the Socialist Standard

Why We Can’t Support Your Party by The Socialist Party of Great Britain

The Socialist Party of Great Britain refuses to support the newly founded political organisation “Your Party,” launched in November 2025 under the leadership of Jeremy Corbyn and Zarah Sultana. “Your Party” promotes a reformist programme that seeks gradual change within capitalism through taxation, nationalisation, and expanded public services, rather than advocating the abolition of capitalism itself. This approach has repeatedly failed, citing historical examples such as the Syriza government in Greece, because capitalist economic pressures ultimately block meaningful reform. Although the party’s rhetoric speaks of fundamental transformation, in practice it will pursue modest reforms that leave capitalism intact, making it incapable of achieving genuine socialism — which, they argue, requires conscious majority support to replace the entire economic system.

Taken from the January 2026 edition of The Socialist Standard.

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