Early critics of capitalism (1999)

Book Review from the February 1999 issue of the Socialist Standard

The Real Rights of Man: Political Economies for the Working Class, 1775-1850 by Noel Thompson, Pluto Press, 1998.

Between 1775 and 1850 Britain was transformed from a country of largely rural communities into a nation built on industrial capitalism. In 1791 Tom Paine's Rights of Man argued for universal political rights. But as early as 1793 Thomas Spence's The Real Rights of Man countered with the claim that political rights were grounded in economic power. For Spence, the question was no longer about "what form of government is most favourable to liberty" but:

"which system of society is most favourable to existence and capable of delivering us from the deadly mischief of great accumulation of wealth which enables a few unfeeling monsters to starve whole nations."

This is a history of the struggle for an anti-capitalist, but not necessarily pro-socialist, political economy. Anti-capitalist writers such as Spence, William Ogilvie, William Cobbett and Thomas Hodgskin were reactionaries who wanted to retreat from urban squalor to the rural idyll. They were not opposed in principle to class society but to the way "unequal exchange" drove the newly created working class into poverty. Their political economy (not pseudo-scientific "economics") explained working class poverty as the result of a failure of workers to get the full value of what they produced. The "unequal exchange" meant employers paid wages less than the value of the product and so were cheating workers.

Robert Owen attempted to rectify "unequal exchange" by establishing a number of producer and consumer co-operatives around the country, linked by labour exchanges. The guiding principle of these labour exchanges was that goods were exchanged according to their value as measured by labour time, with non-circulating labour notes used to facilitate the exchange of goods. In this way, it was believed, there would be equal exchange and no exploitation. However, these co-operatives were short-lived and had difficulty in providing even basic provisions for exchange against labour notes.

According to Noel Thompson:

"the problems of valuing goods in terms of labour time meant that errors were made and, inevitably, there were goods undervalued in relation to their market equivalents that were quickly purchased, while there were others that were overvalued and just as rapidly accumulated in the exchanges. Only where the labour exchanges replicated the market valuation were there no such problems. In effect, therefore, market price rapidly exerted its hegemony over labour values."

A distinctively socialist political economy did not emerge until the Chartist movement. Ernest Jones, for example, dismissed the demand for "a fair day's wage for a fair day's work", which was to ask for:

"a golden slavery instead of an iron one. But that golden chain would soon be turned to iron again, for if you still allow the system of wages slavery to exist, labour must be still subject to capital, and if so, capital being its master, will possess the power and never lack the will to reduce the slave from his fat diet down to fast-day fare!"

Even though Jones was a friend of Marx and Engels, he and other Chartist leaders still saw exploitation originating in the sphere of exchange, as "unequal exchange." It was not until after the period under review that Marx provided a proper explanation of exploitation: exploitation takes place in the sphere of production. Workers generally get the full value of what they have to sell, their "labour power" or capacity to work sold as a commodity, which the employers buy and put to work. But the employers can extract labour greater than the equivalent of that wage or salary. This is the source of profit that is realised when the commodities are sold. A wage or salary is the market-determined price of the commodity labour power. Generally no cheating is involved: exploitation is the normal function of the capitalist economy.

Lew Higgins

Market's end (1989)

Book Review from the February 1989 issue of the Socialist Standard

The Market and Its Critics: Socialist Political Economy in Nineteenth Century Britain by Noel Thompson, Routledge

This book unwittingly  confirms our view that the word "socialism" originally meant what we insist it continues to mean: common ownership and production solely for use. Written by a supporter of the market, it criticises the pioneer socialists of the nineteenth century for having seen socialism as necessarily involving the abolition of both market mechanisms and monetary calculation. According to Thompson they were guilty of throwing "the market baby out with the capitalist bathwater" and he actually says that the socialist commonwealth described by William Morris in News from Nowhere cries out for the introduction of the market to make it work!

Despite this rather quaint position, Thompson is scrupulously honest in his description of the views of nineteenth century critics of capitalism, from Charles Hall, Percy Ravenstone and William Godwin right at the beginning of the century through writers such as William Thompson, Thomas Hodgskin, John Gray and John Bray on to William Morris, H.M. Hyndman, Laurence Gronlund, Edward Bellamy, Robert Blatchford and Peter Kropotkin. There are also less interesting chapters on the Fabians and the so-called "Christian Socialists", in whose tradition we would not claim to be and who, in any event, did not envisage the disappearance of the market.

The first group to work out clearly the essential features of the alternative to the competitive, profit-seeking capitalist market economy that rapidly developed around them were the followers of Robert Owen, who were also the first to coin the word "socialist". For them the alternative to capitalism lay in the organisation of the production and distribution of wealth in accordance with the principle of "from each according to their ability, to each according to their needs". They at least realised that the organisation of production and distribution on this basis necessary involved the disappearance-of-private property, buying and selling, money and prices, and the introduction of free access to goods on the basis of self-determined needs as well as the replacement of monetary calculation with calculation purely in physical terms—to match productive capacity and wants. As the Owenite journal The New Moral World, put it in 1835, "our enlarged resources for the creation of wealth" mean that "the necessity for attaching money—value to any production whatever "can be superseded and that "no money price will be known".

Towards the end of the century socialist critics of capitalism saw such a system as: applying on a society-wide basis, but they retained the understanding that there was no role whatsoever for market mechanisms and monetary calculation in such a socialist society. As Thompson himself explains:

As regards the allocation of resources and the matching of supply and demand at an aggregate level, there was, however, a general tendency to move from the idea that economic calculation would proceed in terms of value to the idea that such calculation could be conducted in purely quantitative or physical terms. This was a conviction that was largely rooted in the belief that under socialism production would be for use rather than exchange and that in such circumstances social utility, rather than exchange value, could be a direct guide as to what and how much to produce . . . Such production for use rather than profit involved a concern with the concrete material characteristics of needs and the means of satisfying them rather than any abstract notion of value. It involved a deliberate matching of goods with wants that did not involve or require their valuation.

Thompson throws up his arms at what he regards as such economic naivety, but this is indeed what socialism implies. So-called "market socialism" (with which Thompson appears to sympathise) is an absurd contradiction in terms. Any society which retains market mechanisms just can't be regarded as socialist, at least not without violating the original, historical meaning of the word.

Adam Buick