Blogger's Note:Fred Montague was the Labour MP for Islington West and, as a young man, was an active member of Hyndman's Social Democratic Federation. He was replying to Frank Evans' two-part article on the Labour Theory of Value which appeared in the July and August 1937 issues of the Socialist Standard.
Mr. F. Montague, M.P., Attacks the Labour Theory of Value (Second Article)
It is a matter of common observation that the producer using out-of-date methods stands no chance in competition, and Marx, quite correctly adopts the “socially necessary” formula. But what is not generally seen is that no such formula is logically required in order to establish the labour time concept if it can be established. It is socially necessary labour alone that is held to count, and properly so, but the process of striking an average to arrive at the “standard” around which prices fluctuate works just as well whether socially necessary labour time or individual labour time is assumed. All that is proved by that process is that commodities are commodities and that there are just as many after a series of exchanges as before. Marxists live in a dialectical world of their own. They cannot see that there is no standard but what prices themselves put there, or that prices do not explain themselves. “Socially necessary” has no more to do with one doctrine more than another unless one rather than another is provisionally accepted. There is no objection to a provisional hypothesis in science. The objection is to using it as proof of its own case.
The same manner of limping logic occurs in respect to Utility. Mr. Evans starts off by saying that because some material objects possessing utility (air and sunshine) have no exchange value, therefore utility in other objects also can have nothing to do with exchange value, although these are exchangeable. Yet if I argued that as the product of the hand-loom weaver in an age of the power-loom has no economic relation to value, therefore labour in a modem factory or shed produces no value, Mr. Evans would properly laugh me out of court. Let Mr. Evans try his statement out syllogistically.
Utility theories (for which I hold no brief) no more attempt to explain value in terms of individual usefulness than the Marxian theory attempts to explain value in terms of individual labour. The cup-of-cold-water-to-the-parched-traveller-in-the-desert has no more to do with the case than the hand-loom weaver. If Marx may average, cancel-out, and socialise to further orders, so may the utilitarian. Use-value, after all, is part of the Marxian definition of the commodity and is common to all commodities, and when Mr. Evans says that the usefulness of a commodity “differs with individuals and differs with the same person" the believer in utility as a basis of value has a perfect right to reply, and in fact does so though Marxists do not seem to know it, to the effect that it is average social usefulness that is expressed in demand and that defines its effective are much as the gold limit is defined, or as the length of a pendulum controls its oscillation.
I think that utility is as barren as labour time for the purpose of value and for the same reason, i.e., that it is impossible to find an explanation of the factors of exchange between commodities in any theory dependent upon integrating prices. But it is a striking commentary on Marxian cocksure obtuseness to find that while Marxists are extremely scornful of the simple-minded critic who cannot understand the difference between plain and “undifferentiated" labour yet they swallow the absurd notion that utility can mean nothing more than day-by-day variations of personal tastes.
If, then, we reject the dogmatic assumption (it is nothing more) that labour, measured by time is the basis of value, do we give away the Socialist case? Value expressed in price is a capitalist phenomenon belonging to the money-wages system. In what manner is it necessary to establish its basis in time labour in order to justify the abolition of both money and wages?
The Marxist theory assumes that, qualitative differences in labour are nothing other than a question of what Mr. Evans calls “the time and cost of producing skill" as if the labour of an eminent bacteriologist or of one who succeeds in irrigating a continent were a thing of “clocking-in" and “knocking-off," that such men could be turned out of a sausage machine, and that their remuneration beyond the common undifferentiated denominator is taken out of the worker as a part of surplus value. It does not work out like that even in capitalist economy with all the price averaging and cost averaging in the world. But what if it did ?
Labour time value, even if it were true as a fact of capitalist exchange, can have no application, I contend, to Socialist ideas and principles. Wealth is not a thing of ‘‘hours, days and weeks" of time, but an evolutionary, social, and historical product. Labour time, as such, produces no more than it did in the Stone Age. Marx admits this when he speaks of “existing conditions of production." Existing conditions of production do not occur in a vacuum; they are “congealed" history, to use the approved metaphysical jargon. Yet I am told that exploitation is incapable of proof unless it can be shown that it is exploitation of time labour “in the factory." Could any conclusion be more puerile and beggarly?
Everyone is equally entitled (or contrariwise, no one) to the social heritage of economic evolution. Before the consideration of working begins! All start with a credit that makes the time and factory figment mean and ridiculous: butcher, baker, journeyman, thief, and the village idiot! “From each according to his abilities, to each according to his needs" is the antithesis of the Marxian “hours, days and weeks." And the member of the working-class who has never done a stroke of work in his life and for whom capitalism has not been able to find a use is, nevertheless, robbed.
Exploitation is a bigger thing than one of measured labour, and would be even if the time theory could be shown to hold water. Exploitation is the cumulative robbery of the workers in time measured by history and not by the clock. If Socialism is to be defended by proof of exploitation in factory time, then Socialism is reduced to negation and contradiction. It becomes nothing more at best than the case for equality of remuneration. If it is to stand, then, not only capitalist exploitation but “reward" (wages!) under Socialism must logically be “measured by time." And not even State capitalism in Russia can make that work!
Within necessarily limited space I have endeavoured to show (1) that the Marxian labour time doctrine is not a theory of value in the sense, say, that the quantity theory of money is a theory of money, since the subject of the “theory" is not even defined until the theory itself is established; (2) that this difficulty leads to question-begging presumptions in which a form of value by definition is utilised in advance to demonstrate its own nature; (3) that the figurative standard of value is only the mean of the very prices that are said to fluctuate round it and has no other existence outside an imaginary postulate required to beg the question; (4) that the famous “dear" and “cheap" tour de force is a logical absurdity; and (5) that exploitation of labour is not merely a contingent phenomenon of either factory or market. There is no answer to this case in demanding to know what my alternative theory of value is. The subject is Marx. My ideas on value would take as much space again for what they might be worth and, in any event, I am not so terribly concerned. If one is not aware of the rottenness of capitalism and the iniquity of the wage system from practical experience one is not likely to extract the blinding truth out of algebraic transcendentalism.
Reply:
In our previous contribution, in last month's issue, we dealt with the erroneous suggestion that Marx strikes an average of prices to arrive at a standard. In his opening paragraph Mr. Montague writes that, for the purpose of a standard, individual labour would serve as well as socially necessary. Without going deeply into the question, it can be said at once that if we were only concerned with averages it would not matter, but as we are concerned with understanding and explaining prices it does matter very much.
The whole of society’s paid labour is expended on goods and services. Services are charges upon production, and are met out of surplus value. The labour spent in connection with production (which would include transportation) is the only labour that produces value and is the basis of price.
Production is divided between production of gold and production of ordinary commodities. In the exchange of commodities value is expressed in prices related to gold. Thus the relation between the labour required to produce gold and the labour required to produce other articles is expressed as a certain amount of £ s. d. If an unnecessary fraction of the total social labour has been spent on a given article its price will be lower than that of another article containing the same quantity of labour. The socially-necessary idea explains this apparent discrepancy.
Opponents of the labour theory of value have urged, and still do so, that if the value of an article depends upon the amount of labour incorporated in it then the article produced by out-of-date methods is more valuable than that produced by up-to-date methods. The insistence upon socially-necessary as the labour that produces value is the answer to this argument.
Mr. Montague’s second paragraph is.puzzling. It presumably refers to the third paragraph of the article he is criticising (July issue of “ S.S.”), which was as follows: —
Let us take a few commodities. Take apples and amethysts, bread and barometers, cradles and coffins. What have they got in common which make# them all “commodities” ? They are all physical things and have a use, but so also with daisies and dewdrops. What distinguishes the things in the first group is not that they are useful, since this is common to both groups, but that they are the proceeds of human labour and are the subject of commercial transactions. At a stroke the commodity is transformed from a physical into a social phenomenon! For things produced for market bear a banner with this strange device : “I am worth —.” They have value. The things in the second group do not go to market: they have usefulness, but not value. Things produced for exchange have usefulness and value. They represent values, not usefulness, to the intending seller; they represent usefulness only to the prospective buyer, or to the last of a chain of buyers, the one who buys to enjoy the use of them.
The essence of this is: Some useful things never go to market—they have no value. Other useful things do go to market—it is only these that have value. Where do Mr. Montague’s remarks bear on this argument? Where does the logic limp?
To Mr. Montague the labour theory of value is nothing more than averaging prices and making assertions, therefore he can see no difference between it and the averaging of the utilitarians. The fundamental error is Mr. Montague’s and not Marx’s.
Perhaps Mr. Montague has forgotten that the leading utilitarian, Stanley Jevons, gave his case away and supported the labour theory of value when he said: —
It may tend to give the reader confidence in the preceding theories when he finds that they lead directly to the well-known law, as stated in the ordinary language of economists, that value is proportional to the cost of production.—(P. 186, Jevon’s “The Theory of Political Economy.” 4th edition. 1911.)
Mr. Montague is disturbed at the suggestion that qualitative differences in labour are nothing more than a question of the time and cost of producing skill. He instances an eminent bacteriologist and a man who irrigates a continent as examples of the absurdity of the idea. But why has he taken such people? Why not an eminent engine driver or builder’s labourer? Can Mr. Montague point to any professional bacteriologist or similar "eminent” man whose wages are not determined by the cost of educating him? But why worry about the ones that have gained eminence, anyway ? There are thousands of able men and women in all professions who have not gained eminence simply because they have either not been favoured or not been fortunate.
Surely there is no need to “prove” nowadays that scientists of all descriptions are turned out like sausages and that the discoveries of eminent men to-day are discredited to-morrow? And bacteriologists, in particular, have fared as badly as any. What Mr. Montague means by “and that their remuneration beyond the common undifferentiated denominator is taken out of the worker as a part of surplus value” we do not know. Marx has not suggested this nor has any writer in The Socialist Standard. Those who work for wages (or salaries) provide unpaid labour for the capitalist, otherwise they would not be employed. The scientist who does not have to work for his living lives on the unpaid labour of the workers, no matter how eminent he may be.
If we reject the labour theory of value do we give away the Socialist case? Mr. Montague asks this question, and answers, no. He then goes on to make some curious statements, among them a suggestion that, according to Marxists, exploitation only occurs in a factory. This is ridiculous. Whether the worker is employed in a factory, on the market or anywhere else by the capitalist for wages he is exploited. This was the contention of Marx (for example, his instance of the school teacher) and is the view of the Socialist. It is not affected by an analysis of wealth production.
As there is no explanation of what is meant by the assertion that “the member of the working class who has never done a stroke of work in his life and for whom capitalism has not been able to find a use is, nevertheless, robbed,” we are left in the dark. If this means that capitalism has robbed the man of actual wealth then it is nonsense. If it means that capitalism has robbed him of opportunity to engage in useful work then it is not a question of exploitation. Unless we have a common agreement about the meaning of the words we use we cannot make much progress in discussion. So far the meaning given to the term “exploitation” has been: using a person or a thing for one’s own ends. The capitalist class uses the working class for the purpose of producing profit. Hence, the working class is an exploited class and everyone born into the working class belongs to this exploited class. A man can belong to the working class and yet do no work.
Exploitation is both the cumulative robbery of workers in time measured by history and also by the clock. The palaces, ships and masses of capital goods are the historical results of exploitation. The daily output beyond what the worker gets are the daily results of exploitation. Marx has written chapters that explain both points.
The labour theory of value is essential to the accomplishment of Socialism for the following reason:—
The workers, as a class, produce the wealth and receive out of it only their cost of subsistence. The capitalists, as a class, take the rest, although they take no part in production. The labour theory of value explains how the robbery is effected. Until Marx put his theory forward in its perfected, or finished, form, the advocates of the workers were at the mercy of every currency reformer, tariff reformer, nationalist movement, and the like. Nowadays the Socialist knows how and why the workers are robbed, and on account of this he also knows that the only way to stop the robbery is to abolish capitalism and institute Socialism.
Exploitation only exists while there is an exploiting system. Explaining the mechanism of this system does not mean agreeing with it in whole or in part. Again we must say that we cannot see what connection there is between this and the remarks about equality of remuneration. Remuneration is only of importance where people have to live by remuneration, as they do under capitalism.
“From each according to his abilities, to each according to his needs” has always been the accepted principle of Socialists and is the antithesis of capitalism, but what this has to do with the Marxian analysis of value we cannot see. In ”The German Ideology” Marx stated quite clearly that capitalist conditions of labour will not apply under Socialism.
Under Socialism there will not be a division of labour and specialisation such as exists to-day, and the individual will no longer be enslaved to the world market.
Socialism is not “defended by proof of exploitation in factory time.” Ignoring for the moment the erroneous use of “factory time," we must point out that the labour theory of value is a criticism and an argument against capitalism. This theory shows that commodity production is built upon the exploitation of the worker and Socialism is put forward as the negation of this. Once Socialism is established, commodity production will be abolished. As the concept of value is only derived from commodities it will also disappear.
The fact that the workers are exploited to-day is the reason why they should abolish this system and establish another—Socialism—where there would be no exploitation.
Mr. Montague set out to show that the “Marxian doctrine of exchange is not a true theory of value,” and also “that it is not Socialist.” He has not accomplished either end. In the course of his argument he has made some irrelevant statements, but it would take more than the space available to deal adequately with them.
Gilmac.
The writer understands that Mr. Montague is making a further contribution. If so, will he explain more clearly what he means by the statement (in the fourth paragraph) “it is impossible to find an explanation of the factors of exchange between commodities in any theory dependant upon integrating prices.” Why is “between" italicised ?
G.
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