Your labour - their profits (1978)

From the July 1978 issue of the Socialist Standard

In spite of the continuing world recession many companies are managing to maintain and even increase their profits. Statistics prepared by the Government Statistical Service show that the gross trading profits for industrial and commercial companies increased by 38 per cent. in 1977 compared with 1976. Over the same period payment of dividends on ordinary shares increased by 17 per cent.

But where do profits come from?

Let us first consider the explanation of profits that is provided by orthodox economics. Orthodox economic theory takes for granted a world of private property where some people mysteriously own capital and earn a revenue from that, and where the rest of the population own only their ability to labour and so are forced to work for a wage or a salary. It assumes private property and the existence of profit to start off with. Its theory, therefore, can in no way provide an explanation of profit, but is merely a description of the way that capital can secure an income for its owners.

The ideological implications of such a theory are clear (although not to the economists, who would deny them). By focussing on a description of the way payments to capital are made, rather than examining WHY such payments are made — which would necessitate an analysis of the foundations of property society — orthodox economics sweeps under the carpet the potentially revolutionary issues and makes profits seem normal, right and inevitable.

Orthodox Theory

Marx was highly critical of this aspect of orthodox theory and regarded it as a complete mystification of the real situation. For example in The 1844 Manuscripts Marx says,

Political economy starts with the fact of private property; it does not explain it to us . . . Political economy throws no light on the cause of the division between labour and capital, and between capital and land. When, for example, it defines the relationship of wages to profit, it takes the interest of the capitalists to be the ultimate cause, i.e., it takes for granted what it is supposed to explain.

Marx’s analysis of profit starts off by investigating the underlying property relations of society. As profit is a general characteristic of capitalist society only its explanation is to be found in its specific features. The features that Marx took to be specific to capitalism were the following:-

1. The means of production take the form of capital. This means not only that the means of production are put into operation only if a profit can be expected from the sale of the commodities so produced, but that the function of these means of production is the production of profit for accumulation, and not the production of useful articles as such.
2. These means of production are owned by a minority class who are forced by their position as capitalists to use these means of production as capital, to use them only for making profit.
3. The non-owning class, the working class, are unable to undertake productive activity unless hired by an employer in return for a money wage with which the means of subsistence can be purchased.
4. The economic relations between economic agents (including those between capitalists and workers) have the appearance of freely contracted relations.
5. Money transactions are the norm.

Surplus Product 

Marx argued that it is a feature of all property societies that a surplus product is appropriated by a minority class. In his economic writings on capitalism, he explained how this appropriation takes place in capitalist society; in an economy where economic relations take the form of exchange relations, the appropriation of the surplus product is also effected on the basis of exchange.

Firstly, Marx considered whether the surplus could be appropriated by means of unfair exchanges amongst sellers where commodities are bought cheap and sold dear. If this were so then the surplus would actually be created within the sphere of exchange. This can be discounted as an explanation of the source of the surplus because as capitalists are both buyers and sellers, it would be impossible for them as a class to make profits by cheating themselves all the time, although some individual capitalists may sometimes make profits on this basis by defrauding others. Consequently Marx concluded that an explanation would have to be based on the assumption of ‘fair’ exchanges between buyers and sellers.

As Marx saw exchange itself to be a purely social act, he argued that when commodities are exchanged, what is really happening is that people’s labour is being exchanged. Exchange-value is determined by the value of the commodity, by the amount of socially-necessary labour-time that has been expended on it. By this he meant that the value of a commodity is determined by the amount of labour needed on average, given the prevailing level of technical development and efficiency, to produce it, including the labour needed to produce the machinery and raw materials. If all commodities exchange according to their values, then what is the source of the surplus product, the surplus value? (We assume here for the sake of simplicity that exchange-values are determined solely and directly by values. In fact, Marx showed in Capital volume 3 that this is not generally the case. The analysis of the source of profit is, however, unaffected by this simplifying assumption).

Marx’s answer to this question is that surplus value is produced by the working class in the ordinary course of their working activity in that the value newly produced by a worker is invariably more than the value that he or she receives in the form of wages. But  how could this happen if all commodities are exchanged at their value? Surely the worker is exchanging labour for less than its value if the worker receives less value than his/her labour produces? Marx’s answer to this was that what the worker actually sells to the capitalist is not labour, but the ability to labour, labour-power. And the value of the labour-power is what it costs the worker on average to maintain himself/herself and dependants. By and large, the wages received by the working class are sufficient to maintain them from one generation to the next, but clearly this is a smaller value than is produced by the working class. The difference between the value newly produced by the working class and the wages received by them is the source of surplus value.

The capitalist class is able to appropriate this unpaid labour by virtue of its monopoly of the means of production which enables it to dictate the terms on which the working class are forced to exchange their labour for wages. This coercion may be softened a little by trade union activity, but essentially is unchanged by it.

Marx then went on to show how this surplus value is distributed among the different sections of the capitalist class in the form of rent, interest, and profit. Thus all unearned income ultimately flows from the unpaid labour of the working class, this being the direct result of the monopoly of the means of production by the capitalist class.

What does all this mean for the worker?

It means that although the world’s wealth is produced by the working class acting on nature-given raw materials, a certain proportion of this wealth is siphoned off for a small parasite class. That enables this class to enjoy a standard of living far in excess of that of the working class. It also provides the capitalist class with the funds for further accumulation on an extended scale which serves to reproduce the existing class relations of society.

It also means that the aim of production is not the satisfaction of people’s needs, but the amassing of surplus value and accumulation on an ever larger scale. Instead of useful articles — food, clothing, shelter, being produced for people, people are subordinated to the production of commodities; instead of people controlling the productive forces of society, people are controlled by them. Consequently, in a world which has a productive potential hitherto unknown, we are faced with mass poverty, mass starvation, mass pollution.

It means that the time is long overdue for the working class to take political action to put an end to a system that works against their interests.

It means therefore that the time is long overdue for the establishment of Socialism where all society’s productive forces are owned and democratically controlled by the entire community. In such a society the means of production will not function as capital but as aids to the production of the useful articles that we need to live. Production will not be for profit but will be directed towards satisfying our needs. Together with other relics of capitalism such as money, insurance policies and price tags, profits will have no rôle in Socialism.

V. W. Brown

Letters: Marx and communism (2000)

Letters to the Editors from the April 2000 issue of the Socialist Standard

Marx and communism

Dear Editors,

I have been reading some of Marx’s writings. I find him to be very good reading. I would like to hear your views on what he called “crude communism”. The passages I refer to are in his Economic and Philosophical Manuscripts. In the section “Private property and communism”, he mentions different types of communism which some have the ideal politically but are still under the influence of private property (democratic or despotic). How does this compare with, say, Russia’s state-run system of seventy years? I believe just like the SPGB that Russia’s communism was a form of state-run capitalism. I wonder if Marx would have agreed with this or just called it “crude communism” somewhere between, the first and second stages of development. What is the SPGB’s view on this?

Colin Robertson, 

Queenstown, New Zealand

Reply: 

Marx’s Economic and Philosophical Manuscripts were private notes written in 1844 soon after he became a Socialist; indeed, as he was in the process of working out his Socialist ideas. They make interesting, even fascinating, reading but too much emphasis should not be placed on them. But they at least show that Marx understood from the start that communism/socialism means the abolition of money, private property and the state.

By “crude communism” Marx seems to have been referring to the ideas of some workers he met in France (where he was then living) who, not taking into account the possibilities opened up by the industrial revolution, felt that full equality between humans could only be realised on the basis of common ownership and equal sharing of what little there was. It was a sort of “communism of scarcity”.

If we were to accept Lenin and Trotsky at their word, they too were trying to establish communism in conditions of scarcity after 1917. Naturally, they failed for a whole host of reasons (lack of majority socialist understanding, isolation, economic backwardness) and it soon became clear that (as Lenin himself openly admitted) what they were building was state-run capitalism not any form of socialism. The “crude communism” which Marx discussed was just a speculation which could never work in practice and which, given the development of industry and productive power in the 19th century, didn’t need to be tried either. From then on the only practicable form of communism/socialism is the form we in the World Socialist Movement advocate, where the principle “from each according to their ability, to each according to their needs” can apply fully - Editors.

No mystery about banking

Dear Editors,

Recently someone lent me a copy of the Socialist Standard. In this issue (October 1999), I read something that brought me up rather sharply. On page 7 in “Poverty of the Greens”, Pik Smeet says, a little mockingly, “Pardon me, pray, please do excuse me . . . So the Greens believe that when a bank wants to make a loan it just creates money by magicking it out of thin air, etc” Now, I’m not an expert on money (not even at getting it!) but I’ve always understood this to be exactly the case.

Recently, being a bit interested in the subject, I bought The Ecology of Money by Richard Douthwaite (published by Green Books for the Schumacher Society, £5). I enclose a photocopy of the part of the book that deals with this magic of creating money out of thin air, with apologies to P. Daniels!

I would be interested to learn what Pik Smeet thinks of the views of these experts—Lord Stamp and J.K. Galbraith.

Frank Cooper, 

Redruth, Cornwall

Reply: 

The currency cranks did once try to argue that a bank’s “cash ratio” of 10 percent, i.e. the amount they must hold as cash (which is actually nearer one percent these days), meant that if someone deposited £100 in cash the bank could then immediately lend out £900. Actually, of course, what it means is that they can lend out £90. Modern currency cranks, such as the one you refer us to, are less crude. They argue that it is the banking system as a whole rather than an individual bank that can magically multiply an initial cash deposit nine times.

According to them, something like this happens. One person deposits £100 in cash in a bank. This bank keeps £10 as cash and lends the remaining £90. This £90 is spent and those who receive it deposit it with one or other of the banks which are assumed to exist. These can then lend out £81 which is again spent and then eventually redeposited and so on. According to the extract from Douthwaite you sent us, if this happens (“if each bank now lends out 90 percent of whatever it has received”) the end result is that “the original £100 cash deposit allows the ten banks to increase their loans to the public (and hence the money supply) to £1000”.

All this argument proves is that money circulates and that the same coins and notes can be used for many different transactions including more than one bank deposit. So, in the example, while the total of bank loans will indeed increase from £90 to £900 but this will have come about because the banking system will have received an extra £900 in deposits. These will have been generated not by a “most astounding piece of sleight-of-hand” (Lord Stamp) or by a “stroke of the pen” (JK Galbraith, for once talking nonsense), but independently of the banking system, by the mainly productive activities in which the series of loans can be assumed, in the real world, to have been originally generated. When all this is taken into account the total amounts loaned throughout the process—at £900—is still only 90 percent of the total amount deposited, of £1,000.

A bank is no different from a building society: it can only lend out what people deposit with it, in fact a little less than this. This is clear for building societies. Nobody challenges the fact that they have to attract money from investors before they can lend anything to house buyers. A bank is no different, except that it gives out loans for a wider range of activities than buying a house.

Ironically, banks already are what Green Party currency cranks say they should be: financial intermediaries putting lenders and borrowers in touch and making a profit out of the difference between the rate of interest they pay to depositors and the rate they charge borrowers. It’s simple really. No magic is involved - Editors.

Bunker mentality? (1)

Dear Editors,

Andrew Northall’s letter (Socialist Standard, February) is indicative of the bunker mentality that has hampered the growth of the socialist movement. He claims that “identification of common ground with non-socialist organisations can only create confusion”. But common ground needn’t mean a common platform.

Andrew assumes that all members of non-socialist organisation (e.g. Reclaim the Streets) are non-socialists, simply because they are not members of the World Socialist Movement. In reality probably 99 percent of them are simply not aware of our existence. Many of them may be very attracted to the ideas of socialism but have rightly rejected what they think is only because of the undemocratic and unprincipled actions of the left wing.

We are not the keepers of some Marxian holy grail. Many of the ideas that are central to our “unique” position are in fact shared with others. Should we take heart from that, or begrudge it? The fact is, some people can be closer to our views than others. We tend to crudely view socialist consciousness as being one giant mental leap. Where you have to be on one side or another. I think human psychology is a bit more sophisticated than black and white. If we feel we cannot critically engage (even at the mildest level of publishing an open letter in our own journal) with those who share some of our ideas, without in some way feeling we are sullying our pristine hands, then maybe we lack confidence in our ideas.

Rightly, we address our case to the working class of the world, rather than any particular interest group or the left wing’s supposed “advanced sections”. But that surely doesn’t mean that we cannot tailor our propaganda to focus on those workers who are probably at least a little bit more sympathetic to our arguments. Wasn’t the maxim “if you aren’t for us, you’re against us . . .” one of Stalin’s favourites?

Some members conveniently lay the blame for our lack of growth last century with the working class: if we are not able to engage and encourage those who are close to our ideas, then failure to grow in the coming century will lie squarely with the Socialist Party.

Brian Gardner, 

Edinburgh (by e-mail)

 

Bunker mentality? (2)

Dear Editors,

Re. Andrew Northall’s letter (Socialist Standard, February). As an active and campaigning revolutionary socialist, I for one welcome the advances in consciousness which we see affecting widening layers of workers in the post-Seattle climate. It inevitable that many of these will be affected by anarchist, syndicalist, single-issue campaigns and many other ideas, and the responsibility of socialists is to engage with these workers in a battle of ideas, and build activity in areas of agreement.

Central to this is the concept of the united front, of agreeing common issues on which to act, while preserving the independence of thought and criticism needed to ensure that while action takes place, debate and argument accompanies it. Does the Socialist Party of Great Britain agree the need to undertake joint activity, or does the idea of hostility to all other parties and strands of thought take precedence?

If the answer is the former, the entry of the SPGB to the many public campaigns should be welcomed, although sharp arguments in both directions may lie ahead. If the answer is the latter, when the SPGB faces a long period of self-contemplation, unable to interact with wider layers of disaffected workers for fear of losing its political virginity.

Mike Greenhalf, 

(by e-mail)

Reply: 

No, to be quite frank, we are not in favour of the concept of the united front and reject the need for Socialists to undertake joint activity for anything less than socialism itself. What we welcomed about recent developments was the emergence of the view that “the global capitalists system, based on the exploitation of people and the planet for the profit of a few, is at the very root of our social and ecological troubles” amongst those who have been involved in dead-end, reformist single-issue campaigns. We fully accept that it is the responsibility of Socialists to engage with these workers in a battle of ideas, by talking to, leafleting and debating with them, so as to encourage them to take the next step: if capitalism is the root cause of social and ecological troubles, then the intelligent course of action is to concentrate on removing the cause rather than trying to deal with a particular problem as a single issue since as long as the cause remains so, inevitably, will the particular problems.

That people who are concerned about these problems should concentrate their political activity exclusively on working to get rid of the capitalist system and replace it with a frontierless world community based on the common ownership and democratic control of the Earth’s resources is precisely our unique contribution to this debate - Editors.

Your money or your life (1992)

From the January 1992 issue of the Socialist Standard

Money: the curse of our lives. Waste your week working for it. Rush round the stores looking for the best ways of spending it. Waiting for the thud of the bill through the letterbox—now you have less of it. Dreaming of winning the pools. Dreading debt. Watching the newsreader talking about the basket of European currencies and the pound being weak against the mark. On the streets kids beg for it. Women sell their bodies for it; so do boys. Families break up over it. Street assaults to grab it; bitter strikes to drag out of the boss a few more pounds of it: the knock on the door from the bailiff to tell you the consequences of not paying it. Money stunts our lives until they are hardly lives at all but treadmills of money payments. Money cripples the creative into being “financially sensible”: mean and dull. Money afflicts the many and makes affluent the few.

The morally pure warn us of the perils of caring too much about money. These warnings are issued from tree-shaded vicarages where well-fed men in frocks eat full English breakfasts, read The Times editorial and then proceed to the study to write of how Jesus cared not for the things of this world. Newspaper editors, operated from strings held by millionaire press barons, urge us to abandon the path of greed and pull in our belts. The parasitic rich live in expense-account luxury, thinking little of a few hundred pounds for a business lunch. Mothers anguish over how to buy shoes for three pairs of children's feet. It is a sick set-up.

There can be no doubt about the answer. It is the only answer; the one workable alternative; the sane way forward which this journal will not shut up about. We must abolish money. More precisely, we must abolish the need for money. Money is only needed when some possess and most do not. Most must buy from some. Workers who produce must buy the necessities of life from the capitalist few who possess the worlds wealth. The right of the minority to own and control must be ended. Class division must be ended. Buying and selling must cease. Money will then be done away with. We will produce for use. The ingenuity of administering money madness can be devoted to the infinitely saner and worthier cause of organising world production to satisfy human needs.

Money must go
In a moneyless world there will be an end to the hardships which are faced by millions today as if they were a natural plague. No more starvation or homelessness or debt or repossession or cheap and shoddy bargain lifestyles. Humanity will gasp a collective sigh of relief.

The sadness which pervades this system—the money-mad world of paying to live—is that so many people have forgotten what it is to be truly human. In fact, we, the victims of this money-wrecked epoch, are all alienated from our humanity. The capitalist, with all his unearned fortune, does not know how to live as a decent social being. Because if he did he would have to confront, both economically and emotionally, the anti-social essence of his vulture-like existence as a robber of other people's creativity. The capitalist is forced to deny his social nature and surround himself with the mythology of "independence"—of needing no-one and caring for no-one. At best, he will drop a few pounds into the charitable begging bowl of those whose pockets he has systematically picked. At worst, he will be a callous, useless. self-indulging pig, sucking in profits and spitting out hatred for the “greedy” wage slaves who dare to challenge his might. Visit any gentlemen's club or Chamber of Commerce and see these rich humans turned into piggy banks; a sorry sight.

But we shall not romanticise “the good old horny-handed worker”. We members of the working class also are conditioned to know ourselves only through a slave consciousness which fights against trust and collectivity. Old are turned against young and white against black and men against women and fit against disabled—and all of these the other way round as well. The struggle to survive makes petty-minded money-fighters out of the best of us. The Great Class Struggle, so praised by left-wingers as if it is some kind of Heroic Drama between Good and Evil, makes us workers adopt the meanness of spirit and factional hatreds of our oppressors.

Freedom from money will mean freedom of access to all that we need. But it will mean much more. It will mean the freedom to be freely human; to explore our natures and to nurture our behaviour without pound signs forcing us to Keep Off the better areas of our potential beings. We shall be free to work not for money, but because we are social beings who express ourselves best through the expenditure of useful energy. We will be free to be more than just postmen or just mothers or just doctors or just painters: we will be free to be all of those things. The alienating division of labour will come to an end. It is humanity which will look after humanity, not a class whose function is to service higher (i.e. richer) forms of humanity.

Return to humanity
The struggle for a new system of society—for social revolution and nothing less—is more than a struggle for workers to "get more" out of society. A revolution carried out to let the homeless have shelter and the starving eat and the families on income support have video machines would be a huge step forward, but far less of a step than the leap which we socialists advocate. Ours is not a struggle for a few more “things"—or even a lot more. We do not seek a new world system which is just like capitalism only with more of everything for everyone. We seek—we demand—the freedom of all humans to have full control over society, for only then will we have full control over our humanity. We do not want more money, we want no money. We are not demanding welfare for the poor, but an end to the condition of buying and selling which necessitates poverty. We seek not a better-off working class but an end to the working class. We are workers who want to be humans, victims of wage slavery who will be satisfied with nothing less than an end to all slavery in all of its forms. Only then will we be free to live as true social animals: co-operatively, consciously, happily, in dignity.

Far from being some sort of dull economic determinist. as he is celebrated as being by so many narrow-minded leftists, Karl Marx understood that revolution will be more than a matter of changing the signs on the front of the banks. Consider these extracts from his Economic and Philosophical Manuscripts:

  The supersession of private property is, therefore, the complete emancipation of all the human qualities and senses. It is such an emancipation because these qualities and senses have become human, from the subjective as well as the objective point of view. The eye has become a human eye when its object has become a human, social object, created by man and destined for him . . . Communism is the positive abolition of private property, of human self-alienation, and thus the real appropriation of human nature through and for man. It is. therefore, the return of man himself as a social being, i.e. a really human being, a complete and conscious return which assimilates all the wealth of previous development.

Why should not the working class—the overwhelming majority who are treated as profit-churning idiots—demand the "complete and conscious return" of our own humanity? To demand less is an undignified submission to an inhuman rule of money-power. To become human we must abolish money: nothing less, no compromises.

Steve Coleman

Are You in Control? (1986)

From the June 1986 issue of the Socialist Standard

Have you ever thought how much your life revolves around work? Not even the time you spend at home is your own, it is spent recuperating from one day's employment and preparing for the next. You need to regain your energies by eating and sleeping; if you have a bath and iron your clothes, it is mostly for the purpose of turning up at work reasonably sweet-smelling and dressed in a manner that is socially acceptable. This situation was described very well by Karl Kautsky in Economic Doctrines of Karl Marx:

  Thus from the standpoint of reproduction, the worker is engaged in the interest of capital, not only during his labour time, but also during his "free'' time. He eats and drinks no longer for himself, but so that he may maintain his labour-power for the capitalist class. It is therefore not a matter of indifference to the capitalist how the worker eats and drinks. If, instead of resting and recuperating his labour-power, the worker gets drunk on Sunday and has a headache on Monday, the capitalist does not regard this as an injury to the worker's own interests, but as an offence against capital, an embezzlement of the labour power that is due to capital.

One of the most exciting prospects of socialism is that for the first time since the beginning of property society we shall regain control of our time, of our lives. As it is today, the lower you are down the social ladder, the less money you have in your pocket which means limited options and a low level of control. Continent-hopping executives are as much members of the working class as are cleaners at the local school but it is doubtful if they feel the same incentive to spur on the revolution.

   Contrary to popular belief, it is not high-powered business executives who suffer most from stress-related diseases. Unskilled manual workers develop and die more often from cancer, heart failure and chest diseases. Even middle managers have 40 per cent more heart attacks than top executives. Manual workers have to put up with more stressful working conditions, their lack of control over their working lives and boredom with the job they do can reduce frustration and anger. (Guardian, 12 February 1986).

Within capitalism, work is often the only place people's natural need to communicate and socialise with others can be expressed. It may seem a better alternative than home, if home is a constrictive cell consisting of four walls, a TV set and an uncommunicative spouse. It is usually to be preferred to trying to exist on the dole. Commuting between the double prison of home and work you may feel you are fleeing from one unsatisfactory situation into another.

So how do we spend our leisure time? Apart from frantic activity or total collapse at weekends, a lot of our "free" time is spent on what Marx called "animal" activities:

   As a result, therefore, man (the worker) only feels himself freely active in his animal functions — eating, drinking, procreating, or at most in his dwelling and in dressing-up. etc; and in his human functions he no longer feels himself to be anything but an animal. What is animal becomes human and what is human becomes animal.
   Certainly eating, drinking, procreating, etc. are also genuinely human functions. But abstractly taken, separated from the sphere of all other human activity and turned into sole and ultimate ends, they are animal functions. (The Economic and Philosophic Manuscripts of 1844).

In some jobs, employees sell not only their pure labour power but such things as "appearance". "sociability" and the "right" kind of part-time interests — if they prostitute themselves completely to their employers they will take home unpaid work voluntarily and have few other subjects of conversation but possible promotions/demotions and other goings on at work.

For all this devotion, workers' labour power is just a commodity to be bought on the market or discarded in the best interests of profit and capital. Every year, there is another crop of eager young school-leavers to be picked, at their physical and intellectual peak and usually ready to work for less than more established wage slaves.

Meanwhile, the lid is kept firmly on a discontented and frustrated population, whether it is the police force with their tougher methods of crowd control or GPs prescribing large amounts of tranquilisers. According to the Association of the British Pharmaceutical Industry, unemployment and the stress of threatened job loss may increase families' consultation rates with general practitioners by as much as 20 per cent. (Financial Times, 14 February 1986). The article goes on to say that "Prescription rates in Wales, Northern Ireland and the north-west are up to 50 per cent higher than those in areas such as Oxford"

Our life in capitalism becomes more and more fragmented, more and more specialised. There is a specific period in our life for learning, another for working, then some more compartments for "leisure activities" and so on. From an early age we are encouraged to decide what we want to do for "a job" as adults and our time in the education system is spent training for a particular slot in the capitalist machine. Work under capitalism is supposed to be the pinnacle of our lives, the coveted goal reached in young adulthood when our roles as passive consumers can really begin. Many "happy young couples" have been conditioned to expect that their main pleasure and purpose in life is to consume; carpets, sales, best buys, cookers and three-piece suites then, as the old cheap rubbish wears out or they are persuaded that "changing" leads to happiness. the whole thing starts all over again — a life-time revolving around the acquisition and replacement of shoddy things.

Real sensitivity is blurred and genuine human caring has a hard time in the ruthless reality of the capitalist market place. Everything has its price and competition is so much a part of our every day experience that it penetrates and sours even our personal relationships. Greed, ambition and self- interest are held up as virtues in capitalism. Let us be really ambitious and use these so- called virtues against the system that fostered them.

Torgun Bullen

Marx: Money Must Go (1985)

From the September 1985 issue of the Socialist Standard

In the section of the Communist Manifesto devoted to "German or 'True' Socialism" Marx and Engels said of "German philosophers, would-be philosophers and beaux esprits" influenced by socialist ideas that "beneath the French criticism of the economic function of money, they wrote Alienation of Humanity', and beneath the French criticism of the bourgeois State they wrote 'Dethronement of the Category of the General', and so forth".

What Marx forgot to add was that it was precisely in these sort of terms that he had expressed himself in the first article he wrote after becoming a socialist in 1843. This article, a criticism of a book on the Jewish Question was published in the Deutsch-Franzosiche Jahrbucher in Paris in 1844. It is important because it showed a clear understanding that the establishment of socialism involves the disappearance of both the state and money, a view Marx held to for the rest of his life but which has been largely forgotten by the great majority of those who call themselves Marxists (but who in fact stand for a state capitalism in which money would continue to exist).

The first part of Marx's On the Jewish Question while supporting the granting of full political rights to religious Jews (as non-Christians) within existing society, argues that political democracy is not enough as it does not amount to "human emancipation", which can only be achieved "when man has recognised and organised his 'forces propres' (own powers) as social forces, and consequently no longer separates social power from himself in the shape of political power" (Marx/Engels.Collected Works, Volume 3, Moscow, 1975, p.168).

The second, shorter part applies the same sort of reasoning to money: "emancipation from . . . money", writes Marx, "would be the self-emancipation of our time" (p.170). Unfortunately for modern socialists, his attack on money took the form of a criticism of the "actual worldly Jew, the everyday Jew" as portrayed in the still widespread but inaccurate popular image of Jews as sharp traders and "men of money". Thus, after writing that "money has become a world power and the practical Jewish spirit has become the practical spirit of the Christian nations. The Jews have emancipated themselves insofar as the Christians have become Jews", Marx gives as an example the situation in America as described by Thomas Hamilton in Men and Manners in North America:

“The devout and politically free inhabitant of New England is a kind of Laocoon who makes not the least effort to escape from the serpents which are crushing him. Mammon is his idol which he adores not only with his lips but with the whole force of his body and mind. In his view the world is no more than a Stock Exchange, and he is convinced that he has no other destiny here below than to become richer than his neighbour. Trade has seized upon all his thoughts. and he has no other recreation than to exchange objects. When he travels he carries, so to speak, his goods and his counter on his back and talks only of interest and profit. If he loses sight of his own business for an instant it is only in order to pry into the business of his competitors.”

So Marx’s argument was not directed against the Jews as people (from one point of view it can be seen as a contribution to the debate then going on among Jews and ex-Jews—like himself—as to their future) but rather against the sort of society described by Hamilton which now exists, to a greater or lesser extent, in all countries. The argument that the solution to the Jewish Question lay, not in the Jews disappearing by becoming atheists or Christians as others had suggested, but in the establishment of a moneyless society in which  “Jewish . . . (money-making) behaviour” would be impossible, was bound to be regarded as anti-Semitic by religious Jews and Jewish nationalists in the quite different political and historical context of the 20th century. This charge is nonsense; otherwise it would have to be pinned on all advocates of Jewish assimilation and on all critics of the Jewish religion (and as an atheist Marx was naturally a critic of Judaism, with its ridiculous rituals and rules governing all aspects of everyday behaviour, as of all other religions).

This no doubt explains why the second part of On the Jewish Question –which is basically an attack on money and a call for the establishment of a moneyless society as the way to achieve 'human emancipation"—has not been given the same circulation as some of Marx's other writings of the same period, for example The Economic and Philosophical Manuscripts of 1844. In a sense this is a pity since in it are to be found some of Marx's strongest denunciations of money and its effects on relations between people:

“Practical need, egoism, is the principle of civil society, and as such appears in a pure form as soon as civil society has fully given birth to the political state. The god of practical need and self-interest is money. Money is the jealous god of Israel, in face of which no other god may exist. Money degrades all the gods of man—and turns them into commodities. Money is the universal self-established value of all things. It has therefore robbed the whole world—both the world of men and nature—of  its specific value. Money is the estranged essence of man's work and man's existence, and this alien essence dominates him, and he worships it” (p.172).

“Selling is the practical aspect of alienation. Just as man, as long as he is in the grip of religion, is able to objectify his essential nature only by turning it into something alien, something fantastic, so under the domination of egoistic need he can be active practically, and produce objects in practice, only by putting his products, and his activity, under the domination of an alien being, and bestowing the significance of an alien entity—money--on them” (p.174).

Of course this criticism is still rather philosophical—capitalism (a term which Marx doesn't even use) is identified with individualism, "a world of atomistic individuals who are inimically opposed to one another" (p.173). Marx argues that in such a world it is money that emerges as the god to which everything else is subordinated and which completely dominates people’s lives.

Very soon however, Marx (who, it must be remembered, was still working his way towards a full understanding of capitalism and socialism) identified "private property" rather than "egoistic need" as the root cause of people's domination by money, in the sense that it was private property society that led to human beings being obliged to pursue their self-interest as the means to survive. In some unpublished notes he made in 1844 after reading James Mill's Elements of Political Economy (which marked the beginning of what was to become a life-long study, and critique, of political economy) Marx argued that in private property society people produce with a view to exchanging their products for money, so that what they produce becomes a matter of indifference to them as long as they can sell it, and that it is this that leads to money dominating their lives:

“Within the presupposition of division of labour, the product, the material of private property, acquires for the individual more and more the significance of an equivalent, and as he no longer exchanges only his surplus, and the object of his production can be simply a matter of indifference to him, so too he no longer exchanges his product for something directly needed by him. The equivalent comes into existence as an equivalent in money, which is now the immediate result of labour to gain a living and the medium of exchange.”

“The complete domination of the estranged thing over man has become evident in money, which is completely indifferent both to the nature of the material, i.e., to the specific nature of the private property, and to the personality of the property owner. What was the domination of person over person is now the general domination of the thing over the person, of the product over the producer. Just as the concept of the equivalent, the value, already implied the alienation of private property, so money is the sensuous, even objective existence of this alienation” (p.22).

Earlier in these same notes on Mill Marx had explained in more detail how human beings came to be dominated by the products of their own labour, while at the same time giving us a glimpse of how things would be different in a moneyless society:

“The essence of money is not, in the first place, that property is alienated in it, but that the mediating activity or movement, the human, social act by which man's products mutually complement one another, is estranged from man and becomes the attribute of money, a material thing outside man. Since man alienates this mediating activity itself, he is active here only as a man who has lost himself and is dehumanised; the relation itself between things, man's operation with them, becomes the operation of an entity outside and above man. Owing to this alien mediator—instead of man himself being the mediator for man—man regards his will, his activity and his relation to other men as a power independent of him and them. His slavery, therefore, reaches its peak. It is clear that this mediator now becomes a real God, for the mediator is the real power over what it mediates to me. Its cult becomes an end in itself. Objects separated from this mediator have lost their value. Hence the objects only have value insofar as they represent the mediator, whereas originally it seemed that the mediator had value only insofar as it represented them. This reversal of the original relationship is inevitable” (p.212).

This is still fairly philosophical but the meaning is clear enough: in a “truly human" society (to speak like Marx at this time) human beings would produce products to satisfy their needs, and their products would "mutually complement one another"; this movement of products from the producer to those who needed them would not take place via money but would be directly organised under conscious human control; in addition, the value of a product would be the value humans put on it in terms of usefulness or capacity to give pleasure. With private property and production for money, on the other hand, this cannot happen: not only does the movement of products from producer to consumer come to be "mediated" by money, but the value of a product comes to be judged not in human terms but in terms of a sum of money; finally, the whole process of the production and distribution of wealth escapes from human control and is dominated by an alien force, money.

In his well-known Economic and Philosophical Manuscripts of 1844 (which were also never published in his life-time) Marx, in what could be regarded as a prophetic vision of the sort of commercial, advertisers' world we have to suffer today, expanded on the point about the pursuit of money becoming the main aim of life in private property society:

“The need for money is therefore the true need produced by the economic system, and it is the only need which the latter produces. The quantity of money becomes to an ever greater degree its sole effective quality. Just as it reduces everything to its abstract form, so it reduces itself in the course of its own movement to quantitative being. Excess and intemperance come to be its true norm.

Subjectively, this appears partly in the fact that the extension of products and needs becomes a contriving and ever-calculating subservience to inhuman, sophisticated, unnatural and imaginary appetites. Private property does not know how to change crude need into human need. Its idealism is fantasy, caprice and whim; and no eunuch flatters his despot more basely or uses more despicable means to stimulate his dulled capacity for pleasure in order to sneak a favour for himself than does the industrial eunuch—the producer—in order to sneak for himself a few pieces of silver, in order to charm the golden birds out of the pockets of his dearly beloved neighbours in Christ. He puts himself at the service of the other's most depraved fancies, plays the pimp between him and his need, excites in him morbid appetites, lies in wait for each of his weaknesses—all so that he can then demand cash for this service of love. Every product is a bait with which to seduce away the other's very being, his money: every real and possible need is a weakness which will lead the fly to the gluepot” (p.307).

In an earlier passage Marx had once again contrasted this with the situation that would obtain in socialism, where the object of production would be to satisfy real human needs, above all the need for human relations with other human beings. This—a society in which people would relate to people, not as "atomistic individuals", but as a "true human community—was Marx's somewhat philosophical definition of socialism at this time.

Nobody reading these passionate denunciations of money can be left with any doubt that Marx stood for a moneyless society. Although he abandoned some of the more flowery philosophical language in his later published works such as A Critique of Political Economy (1859) and Capital (1867), he never abandoned his view that money should be abolished through the establishment of a society based on common ownership and production directly for human need. Indeed, his later analysis of the process of capitalist production was still based on his early view that in capitalist society the producers (the working class) were dominated by the product of their own labour which had escaped from their control and confronted them as an alien, exploiting force (capital). But, then, the distinction between an "early", philosophical and a "later", scientific Marx has never been all that convincing, since not only are the views of the so-called early Marx to be found in his later writings, but also his early writings are not just philosophising as to the true nature of humanity, as the following passage from the Economic and Philosophical Manuscripts of 1844 shows:

“An enforced increase of wages (disregarding all other difficulties, including the fact that it would only be by force, too, that such an increase, being an anomaly, could be maintained) would therefore be nothing but better payment for the slave, and would not win either for the worker or for labour their human status and dignity. Indeed, even the equality of wages, as demanded by Proudhon, only transforms the relationship of the present-day worker to his labour into the relationship of all men to labour. Society is then conceived as an abstract capitalist.

Wages are a direct consequence of estranged labour, and estranged labour is the direct cause of private property. The downfall of the one must therefore involve the downfall of the other. From the relationship of estranged labour to private property it follows further that the emancipation of society from private property, etc., from servitude, is expressed in the political form of the emancipation of the workers; not that their emancipation alone is at stake, but because the emancipation of the workers contains universal human emancipation—and it contains this, because the whole of human servitude is involved in the relation of the worker to production, and all relations of servitude are but modifications and consequences of this relation” (p.280).

Adam Buick

Marx on Alienation (1973)

From the September 1973 issue of the Socialist Standard

The fact that Marx devoted a great deal of his energy in his younger days to the theme of alienation is a relatively recent discovery, dating from the publication in English in the 1950's of certain of his early texts, in particular the Economic and Philosophical Manuscripts of 1844, and later of the Grundrisse of 1857. There has followed something of a re-examination of Marx, with a shift in emphasis from his well-established economic works to the philosophical and humanist outlook of his earlier works.

Alienation can be defined as a state in which man fails to realize himself either as an individual or as a species—in which man is not himself. This necessarily involves a definition of what man's nature consists of and of what man's life ought to be. For Marx, what distinguishes man from other species is that man has the ability of self-creation. While an animal can never see beyond its immediate physical needs, and is governed entirely by instinct, man has the ability to produce in excess of these needs and to do so consciously, thereby creating his own environment:

The animal is immediately one with its vital activity. It is not distinct from it. Man makes his vital activity into an object of his will and consciousness. He has a conscious vital activity . . . It is this and this alone that makes man a species-being. (Economic and Philosophical Manuscripts).

Man's essence therefore lies in his conscious and creative activity in creating a world of objects:

Men themselves begin to distinguish themselves from animals as soon as they begin to produce their means of subsistence . . . In producing their means of subsistence, men indirectly produce their actual material life. (The German Ideology).

It can be seen, therefore, that Marx's ideas on the nature of man were in total contrast and opposition to the mechanical materialism whereby man is seen as an object of nature whose behaviour is determined in a one-sided way by sense-impressions received from the environment and is given no active rôle in creating the society in which he lives. Such a mechanical behaviourist doctrine was expounded by Feuerbach, in common with the ideas of the French Enlightenment. Here the real need was seen to be an Educator who was over and above society and who would change men's behaviour by creating the right environment to bring about a society based on harmony. Marx attacked this view: man, by consciously acting upon and transforming nature, also transforms himself. There is a two-way relationship between man and his environment, and between his consciousness and his activity. Therefore "circumstances are changed by men and the educator must himself be educated" (Theses on Feuerbach). Man makes his own history and makes himself in the process.

It is man's ability to labour, to objectify his creative capacities in the world of things, which makes him human. Under the capitalist system, the labour of the worker becomes a means to an end instead of an end in itself, an activity carried on not for the satisfaction and fulfillment it gives, but as a means of maintaining physical existence. Marx's critique of capitalism is not simply that the wage-worker is economically exploited, but that he ceases to be a human being.

Alienation, however, was a concept which had previously been used with regard to religion by Feuerbach, and Marx recognized this. For Feuerbach (in The Essence of Christianity), the powers and qualities which religion attributes to God are in fact those of man himself, objectified, and contemplated and revered as a distinct being. Man alienates himself from himself by making God the creator of the world, thereby destroying his own self-fulfillment as a species-being. In other words, man creates God in his own image. Feuerbach, however, only conceived of alienation in the religious sphere, failing to see that religious self-alienation is only part of a much wider social alienation. 

This state, this society produces religion's inverted attitude to the world because they are an inverted world themselves . . . Thus, the struggle against religion is indirectly the struggle against that world whose spiritual aroma is religion (Towards a Critique of Hegel's Philosophy of Right, Introduction)

For Marx, then, man's alienation was a result of the totality of social relations which exist under the capitalist mode of production. This alienation takes on four forms:

1. The alienation of the worker from the product of labour.
2. The alienation of the worker from the act of production.
3. The alienation of man from his species-being.
4. The alienation of man from man.

With regard to the first of these, the object which labour produces confronts it as an alien and hostile being exercising power over the worker who created it. Furthermore, just as in religion the more power man attributes to God the less he retains of himself, so in work the more the worker externalizes himself, the more powerful becomes the alien, hostile world he creates opposite himself. The greater the product of the worker, the less he is himself:

Labour establishes itself objectively, but it establishes this objectivity as its own non-being or as the being of its non-being—of capital. (Grundrisse)

Capital is accumulated dead labour, the objective manifestation of the fact that man is lost to himself. The very physical existence of the worker is a commodity, just like any other; "he has no existence as a human being, only as a worker" (Economic and Philosophical Manuscripts).

Alienation shows itself not only in the result, but also in the process of production. Because labour is external to the worker, he does not confirm himself in his work, but denies himself. "The worker only feels at home outside his work and in his work he feels a stranger". Labour is not the satisfaction of a need but only a means to satisfy needs external to the self. And the labour of the worker is not his own, but is somebody else's — the worker therefore belongs to somebody else in his labour.

The result of this is that man feels himself freely active in his animal functions — eating, drinking, procreating — while in his human function — labour — he feels himself to be an animal. It is in the working-over of inorganic nature and the practical creation of an objective world that man confirms himself as a species-being. Man duplicates himself in reality and contemplates the world he has created:

Therefore when alienated labour tears from man the object of this production, it also tears from him his species-life, the real objectivity of his species (Economic and Philosophical Manuscripts).

Man's productive activity represents his species-life; it is this which distinguishes man from animals. But the wage-worker works out of necessity, not choice; his species-life is turned into a means of maintaining his physical existence. Capitalism "alienates species-life and individual life and . . . it makes the latter into the aim of the former".

The alienation of man from himself, man from nature and man from the product of his labour is expressed in the relation between man and man. If the product of labour does not belong to the worker, but stands opposed to him as a hostile power, this can only mean that it belongs to another man. The alien power above man can only be man himself. Therefore "the relationship of the worker to his labour creates the relationship to it of the  capitalist . . . Private property is thus the product, result and necessary consequence of alienated labour" (Economic and Philosophical Manuscripts).

The supreme form of alienation under capitalism was for Marx the existence of money. Money is the universal commodity, alongside all other commodities. The mediating activity between man's products, and human activity, becomes the characteristic of a material thing, money, which is outside and above man.

Whereas man himself should be the intermediary between men, man sees his will, his activity and his relation to others as a power which is independent of him and of them. (Economic Studies from Marx's Notebooks, 1844-5)

Marx therefore saw Socialism as a society in which men could relate to each other as human beings. Under capitalism they only exist as workers or capitalists — political economy does not recognize any relationship outside this one. Man's alienation can only be ended with the abolition of private property, exchange and money — but Socialism (or Communism) was for Marx more than simply an economic abstraction, it was the creation of a genuinely human society, the beginning of real, human history. It involves "the complete development of human domination of natural forces, both those of so-called 'nature' as well as those of his own nature", "the absolute elaboration of his creative dispositions", "the development of all human powers as such . . . into an end in itself", "a situation in which man . . . produces his totality" (Grundrisse).

Socialism, while preserving the gains of previous historical development, is above all a society in which man realizes his full potential as a human being.

Brendan Mee

Further articles on Marx and his ideas from the same special issue of the Socialist Standard:

• Marxian Economics in the Modern World
• Men, Ideas and Society
• Marx In His Time

Marx, People and Society (1979)

From the February 1979 issue of the Socialist Standard

These days it is fashionable to write long, confusing, dull books about Marx. The qualifications for the job are a commitment to Leninism, a selective bibliography and a capacity for dialectical distortions. The search to discover what went on in Karl Marx's mind has beaten the question of what a Scotsman wears under his kilt as the number one talking point in trendy pubs. To play the game you don't have to be a socialist - but it helps if you learn by heart the required Leninist cliches. Thanks to these modern Marxist scholars we have not just one Marx but many: Hegelian Marx, Young Marx, Mature Marx, not to mention Dead Marx who passed his words of wisdom beyond the grave to Young Lenin. One of the favourite topics of those who treat Marxism as a spectator sport is what they call 'Marx's ontology' (his conception of the nature of Man).

Marx's view of 'human nature' is essentially different from all others because it is historical (seeing people as socially developing beings) and dialectical (seeing humanity and Nature as two parts of the same whole). Marx speaks of 'reality' as being both 'naturally human' and 'humanly natural'. The idealist philosophers had always constructed their own model of the human race and placed it in Nature. It was not coincidental that these models corresponded to the ideals of the ruling class of the day. Thus, capitalist philosophers depict humanity as selfish, lazy aggressive and incapable of co-operation. Unlike the Utopian Socialists, Marx did not construct an ideal being to fit into a preconceived pattern of socialist society. His conception involved two questions, firstly, what are the general characteristics of a natural being, and secondly, what are the specific characteristics of a human being? He divided these human attributes into dialectically interdependent powers and needs.

Marx associates three powers and needs with human life; work, eating and sex. He did not say that people must work or eat or have sex in one way as opposed to another in order to be 'natural', but simply that these activities are in the nature of their being. The attributes of 'Species-Man' are more extensive, for it is these that separate it from the unthinking animals. Marx's concept of human nature, then, is concerned with natual and specific attributes of homo sapiens, not the particular moral predilections of the philosopher.

But he doesn't leave it that. Marx's view was that in private property society, an especially under capitalism, people are alienated from their real selves (or, to borrow a Feuerbachian term, alienated from their human essence). By alienation is meant - not surprisingly - the absence of unalienation, people living in accordance with their species and their nature: Socialist society. This is where the Redbrick intellectuals lose Marx's point entirely. He was not concerned with alienation as some kind of existential void to which 'modern man' is doomed. The existentialist, Hyppolite, has it wrong when he writes that alienation is a 'tension inseparable de l'existence' and is inherent in 'la conscience de soi humaine'. Marx consistently relates alienation in property societies to socialist unalienation:

[Communism is] "the complete return of Man to himself as a social (i.e. human) being - a return become conscious, and accomplished with the entire wealth of previous development."

This will mean:

"the positive transcendence of all alienation - that is to say, the return of man from religion, family, State, etc, to his human, i.e. social, mode of existence." (1844 Manuscripts).

In his only complete outline of his theory of alienation, Marx indicated four relations which cover the whole of human social existence. Firstly, people are said to be alienated from their activity. Marx especially refers to productive activity, for that is the most important form of human creativity:

" . . . labour is external to the worker, i.e. it does not belong to his essential being: that in his work, therefore, he does not affirm himself but denies himself, does not feel content but unhappy, does not develop freely his physical and mental energy but mortifies his body and ruins his mind. The worker therefore only feels himself outside his work, and in his work feels outside himself. He is at home when he is not working, and when he is working he is not a home. His labour is therefore not voluntary but coerced; it is forced labour. It is therefore not the satisfaction of a need; it is merely a means to satisfy needs external to it." (1844 Manuscripts).

Secondly, Marx explains how we are alienated from the product of our labour:

" . . . the more the worker by his labour appropriates the external world, sensuous nature, the more he deprives himself of the means of life in the double respect; first, that the sensuous external world more and more ceases to be an object belonging to his labour - to be his labour's means of life; and secondly, that it more and more ceases to be means of life in the immediate sense, means for the physical subsistence of the worker."1844 Manuscripts).

The third relation of alienation, according to Marx, is that people are alienated from each other because of class divisions and inevitable social conflict:

"Just as [Man] estranges himself from his own activity, so he confers to the stranger activity which is not his own . . . a man alien to labour and standing outside it . . . the capitalist or whatever one choosed to call the master of labour." (1844 Manuscripts).

Finally, men and women are alienated from their species-being:

"In tearing away from the object of his production . . . estranged labour tears from him his species life, his real species objectivity, and transforms his advantage over animals into the disadvantage that his organic body, nature, is taken from him. Similarly, in degrading spontaneous activity, free activity, to a means, estranged labour makes Man's species life a means to his physical existence. "(1844 Manuscripts).

There have been those who have questioned whether these early writings of Marx (only published in English in the early 1930's) should be treated as being consistent with his later developed theories, Clearly, any of Marx's writings, taken in isolation and detached from socialist conclusions, can be futile and even misleading. Used by socialists in the battle to free the working class from the world of capitalism, the concept of alienated people - with its dialectical negative, unalienated humanity - is a vital aspect of a coherent Marxist theory. For trendy academics the exercise is about as vital as a fortnight's holiday in Highgate Cemetery.

Steve Coleman