The abolition of money (1982)

From the January 1982 issue of the Socialist Standard

At first it is hard to envisage a world without money. It requires a considerable jump of the political imagination to think of life without banks, wallets, coins, bills, cheque books or financial worries. From birth to the grave, workers’ lives are conditioned by money. Without it we starve; because of it we are poor; to get it we are forced into wage slavery; if we steal it we can be locked away; people grow old before their time because of it.

In Robert Tressell's classic socialist novel, The Ragged Trousered Philanthropists, the socialist, Owen, explained to his workmates the nature of money:

“Let us begin at the beginning”, continued Owen . . .“First of all, what do you mean by Poverty?”
“Why, if you’ve got no money, of course,” said Crass impatiently.
The others laughed disdainfully. It seemed to them such a foolish question.
“Well, that’s true enough as far as it goes,” returned Owen, “that is, as things are arranged in the world at the present. But money itself is not wealth: it’s of no use whatever.”
At this there was another outburst of jeering laughter.
“Supposing for example that you and Harlow were shipwrecked on a desolate island, and you saved nothing from the wreck but a bag containing a thousand sovereigns, and he had a tin of biscuits and a bottle of water.” “Make it beer,” cried Harlow appealingly.
"Who would be the richer man, you or Harlow?” (p. 29)

In short, it is not money as such which can satisfy needs, but money as a medium of exchange. According to Owen, "Money is the cause of poverty because it is the device by which those who are too lazy to work are enabled to rob the workers of the fruits of their labour” (p. 209). The significant point is that Tressell (or Robert Noonan, as he was really called) was not considered strange for making his socialist character advocate the abolition of the monetary system. At the turn of the century, when the Socialist Party of Great Britain was formed, socialists were frequently heard advocating a moneyless society. After all, how could one logically speak about a system of common ownership without referring to its logical consequences?

These days, those who pose as socialists, but in fact have no other purpose than to reform the capitalist system, are never heard to refer to the abolition of money. Benn, the SWP, the Communist Party and Co. are all united in their dismissal of the possibility of a moneyless society. The celebrated Clause Four of the Labour Party constitution states its aim as “the common ownership of the means of production, distribution and exchange”. The illogicality of such an objective betrays the Labour Party’s profound confusion about the nature of socialism: if resources are commonly owned, who is going to need money to buy anything and who will be selling it? The abolition of all property and the introduction of common ownership necessarily does away with the anachronistic social relationships of buying and selling. The confusion of the Communist Party of Great Britain is clearly demonstrated in its pamphlet. Time to Change Course; in the section headed “Where Will The Money Come From?” (p. 81), we are told about financing socialism:

Under socialism, with all the main industries, land, resources and financial houses publicly owned, it is from these sources that the main forms of revenue will be derived. Personal taxation will be simple and not too arduous for the majority of people. Indirect taxation would be kept to a minimum. The present rating system would go. Local authorities would rely on other steps to raise local revenue.

Clearly, the Communist Party has failed to liberate itself from the ideological assumptions of the money system. Its members would do well to read Karl Marx’s Communist Manifesto in which he states that Communists (or socialists) stand for “the abolition of buying and selling”. This revolutionary objective is a hallmark of any principled socialist. Anyone claiming to stand for socialism who rejects the need for a society without money (or the possibility of attaining it) is not a socialist and should be treated as an opponent.

Great ideas are of social origin and never the product of just one brain. In the months before Marx’s Communist Manifesto was published in English (in November 1850), a number of workers in Britain were discussing the idea of abolishing money. The correspondence on the subject, which appeared in the Chartist journal, The Red Republican, has never before been seriously examined by historians. Presumably, most of them have dismissed the correspondence as an insignificant exchange of views between harmless economic eccentrics; in fact, it is a highly significant discussion, showing that there were workers discussing the case for a moneyless society before the Socialist Party of Great Britain began to advocate it.

The first letter, from George Smith of Salford, was published in The Red Republican on 27 July 1850, under the heading “ABOLITION OF MONEY”. He argues that

. . . in order . . . to prepare the way for the absolute supremacy of the working classes, preparatory to the abolition of the system of classes, what should be done? Evidently something more than getting possession of political rights, or even destroying those twin monsters, rent and usury; for had we possession of the one and had successfully destroyed the other, there would yet remain in existence a monster which would reproduce its kind to torment humanity; and that monster is money! Sir, in my opinion, so long as mankind will agree to have a circulating medium — will allow everything in life to be measured by money — so long will they suffer the evil consequences springing therefrom . . .

By 10 August, Smith’s letter had provoked a response. The writer, who signed himself “A Wage Slave”, opposes the need to abolish money, stating that “What society wants is just social institutions”. He argued that capitalism survives because workers are not paid the full value of their labour power and that the real need is for an equitable distribution of money. (The modern Left, one hundred and thirty years later, has not advanced beyond such theoretical fallacies.)

The Red Republican of 24 August contains two letters on the money question, taking up three columns. The first is from RPP, who states that the abolition of money “is the most important subject for discussion at the present time”. He goes on to agree that money should be abolished:

I would root out and abolish a system that compels man to give the sweat of his heart’s blood to the great money-mongers, wasting his own time, strength and happiness, as wealth may command. It is the slavery of the many for the sake of the few. Such a state of things must no longer exist, for man was made to enjoy all things equally with his fellow-man.

But — just as the reader is thinking that the correspondent has hit the nail very close to its head — RPP proceeds to argue that “the working classes must return to barter”. The second letter is from George Smith, who initiated the correspondence, and contains some excellent answers to the arguments of “Wage Slave”:

Strange, that in the 19th century, any wage slave should be found to advocate the continuance, in any shape, of that which, whilst it shall last, must perpetuate his vassalage, to its “fortunate possessors”. Does not my friend see both the craft and the hellishness of money? Who produces everything which sustains life, and feeds our desires for luxuries? The workers! Through the instrumentality of their labour, and by no other means can these things be produced. Then by what chicanery do those who “work not, neither do they spin” obtain all they want to superfluity, whilst those who produce are kept almost without? Why, by the crafty invention and use of money, with which they, like true “philanthropists”, come to the producer, and assure him that the food he is taking home is not “the stuff of life” but that which they will give him in return for his food is the real sustainer of existence, and thus he is cheated out of his produce for a shadow.

Smith rather confuses cause and effect — it is not money which produces class division, but the other way round — but nevertheless he is clearly moving in the direction of the ideas later to be elaborated by Marx. Responding to “Wage Slave’s” advocacy of a “just commercial system”, Smith rightly states that:

For a man to dispose (or sell) of his labour at the “public mart” presupposes a buyer of that labour, and, according to our friend’s just commercial system, I am afraid that no buyers would purchase unless they could live out of such purchases. To live by buying and selling is to live nefariously.

“Wage Slave” replies on 7 September, stating that he can now see the importance of Smith’s idea, but doubts whether everyone else will be intelligent enough to live in a moneyless society. (A familiar argument from modern Leftists.) “Why propose to do that which is impossible at the present time?” asks “Wage Slave”. This question was asked of the SPGB when it was formed in 1904 and it was for this reason that our members were labelled “the impossibilists”. If those who took this view in 1850 and 1904 had spent less time running away from the need to convince people of a good idea, and telling its advocates that they were wasting their time, we would have achieved the seemingly impossible long ago.

On 14 September Alexander Bill contributed a letter to the correspondence, in which he argued (rather confusedly) that he was opposed to “the total and unconditional abolition of money”, although he did agree with Smith “when he says that our present monetary system is the basis of all those social evils under which we labour”. His answer was to introduce a “prohibition of private trading” and “the establishment of public marts”. Effectively, this was an argument for state capitalism.

The final letter on the subject was published on 28 September and came from George Smith. To “Wage Slave’s” claim that workers could not arrive at the point of intelligence which would make a moneyless society possible, Smith responds:

Intelligence! What is it? Walker says intelligence is “perception, understanding”. Now, will my friend say that it is impossible for the intelligent to excite the perception of the, at present, ignorant, and give them understanding?

No further letter appeared on the subject. Smith’s question remained unanswered. But since 1850, the post-Chartist Left has responded to the question in the negative. While claiming to be fully committed Marxists, they refuse to advocate the case for the abolition of money because they consider the working class too stupified by capitalist conservatism ever to accept or understand it. Instead, they argue in favour of state capitalism. It is because of this that socialists are fundamentally hostile to the left-wing parties and groups.

Genuine socialists stand for a society in which all factories, farms, offices, docks, mines — indeed, the entire means of producing and distributing wealth — will be owned by the entire world community. The resources of the earth will belong to everyone. No laws will exist to preserve the right of one section of society to use things and another section to be denied the use of them. World socialism will be a social order based on free access for all people to all the goods of the earth. In such a society money would by an out-dated relic. Nobody will buy anything or sell anything or pay for anything. Those who cannot easily imagine such an arrangement should remember that people in pre-capitalist societies would have found our present social order equally difficult to comprehend. Those who have made the mental leap from the prison of the money system to the freedom of world socialism are urged to join us now in our struggle to create the society of tomorrow. The objective is urgent; we have waited for too long.

Steve Coleman