Tuesday, November 28, 2006


Notes from our discussion on section 3, pages 115-134


We reprised on sections 1 and 2. In the Introduction (section 1), Marx tried to decide and set down his method of approach.
The bourgeois economists, so he noted, start with production in general. They state that production in general requires labour, land, and means of production (capital), and then under "distribution" and "circulation" they can look at possible variations on the returns to those three eternal "factors".
The bourgeois economists' totality is chaotic and arbitrarily chopped up.
Marx, by contrast, tries to construct a totality in theory which is a combination of structured abstractions. This emphasis meant that the 1970s publication of the Grundrisse had a big effect on many areas of social science, increasing the popularity of various forms of "structuralism".

Bastiat and Carey

The limits of Bastiat's or Carey's critical attitude was a wish to moderate or improve capitalism, by free trade for Bastiat or by protection for Carey.
Marx insisted on a more thoroughgoing criticism. Within the terms of the free-trade/ protection debate, he preferred fair trade, but only because he thought it would heighten and push forward the conflicts within capitalism which would eventually lead to the overthrow of capital. Marx derided Carey for endorsing "domestic" capitalist development within the USA, but adopting a peevish, blank-negative attitude to the same processes of capitalist development where they develop in their full scope and logic, i.e. on the world market. He attacked Carey's expedient of blaming all the evils of capitalist development on the external influence of too-powerful English capitalism. Marx's criticism here has continuing force today against the "Yankophobia" of those large sections of the left who identify capitalism with the evil external influence of the USA.
Marx wants to knock down not only the bourgeois economists, but also the superficial criticisms of capitalism made by those who, in the Communist Manifesto, he had called the "bourgeois socialists".
"Conservative or Bourgeois Socialism: To this section belong economists, philanthropists, humanitarians, improvers of the condition of the working class, organisers of charity, members of societies for the prevention of cruelty to animals, temperance fanatics, hole-and-corner reformers of every imaginable kind. This form of socialism has, moreover, been worked out into complete systems. We may cite Proudhon’s Philosophie de la Misère as an example of this form".

Marx and Proudhonism

Thus in the Grundrisse manuscript proper, Marx starts with a criticism of those "bourgeois socialist" co-thinkers of Proudhon. He wants to develop a socialist politics which is based on clear analysis of the developments, tendencies, and conflicts within the actual process of capitalist development, not one based on this or that scheme for arbitrarily reshaping capitalist development by lopping off the "bad bits" and expanding the "good bits".
He wants to mark off his communist working-class politics from the "amateurism" of the Proudhonists - to free communism from this "false brother".
Marx will have had in mind Proudhonist attitudes such as reported to him by Engels in a letter from Paris of 18 September 1846:
"I believed [Proudhon] had perpetrated a trifling nonsense, a nonsense within the bounds of sense. Yesterday the matter came up again and was discussed at great length, and it was then I learned that this new nonsense is in truth wholly unbounded nonsense.
"Imagine: Proletarians are to save in the form of small shares. This will enable the initial building... of one or more workshops devoted to one or more trades, some of the shareholders to be occupied there and the products to be sold, 1) to the shareholders (who thus have no profit to pay for) at the price of the raw material plus labour, and 2) any surplus to be sold on the world market at the current price.
"As the association’s capital is increased by new shareholders joining or by new savings of the old ones, this will be used for building new workshops and factories and so on and so forth, until all the proletarians are employed, all the country’s productive forces have been bought up, thereby depriving the capital still in bourgeois hands of the power to command labour and produce profit!
"Thus capital is abolished by ‘finding an authority under which capital, i.e. the interest system’... ‘so to speak disappears’... By dint of proletarian savings, and by waiving the profit and interest on their capital, these people intend, for the present, to buy up the whole of France, no more nor less, and later, perhaps, the rest of the world as well...
"And the workers here, fools that they are - the Germans, I mean - believe this rubbish. They, who can’t keep six sous in their pockets to visit a marchand de vin on the evenings of their meetings, propose to buy up toute la belle France with their savings..."
Twelve years later, Marx is still teasing out the theoretical background of this criticism.

The development of Proudhon's ideas and of Marx's attitude to Proudhon

In 1845, in The Holy Family, Marx had been warmly appreciative of Proudhon. "Proudhon's treatise", he wrote, referring to Qu'est-ce que la propriété? [1840], "will... be scientifically superseded by a criticism of political economy, including Proudhon's conception of political economy. [But] this work became possible only owing to the work of Proudhon himself... Proudhon makes a critical investigation - the first resolute, ruthless, and at the same time scientific investigation - of the basis of political economy, private property. This is the great scientific advance he made, an advance which revolutionizes political economy and for the first time makes a real science of political economy possible. Proudhon's treatise Qu'est-ce que la propriété? is as important for modern political economy as Sièyes' work Qu'est-ce que le tiers état? for modern politics".
Even much later - in 1865, when Proudhon died, and Marx wrote a brief survey of Proudhon's work for a German socialist newspaper - Marx was warm about Qu'est-ce que la propriété?
"His first work, Qu’est-ce que la propriété?, is undoubtedly his best. It is epoch-making, if not because of the novelty of its content, at least because of the new and audacious way of expressing old ideas... The provocative defiance, which lays hands on the economic 'holy of holies', the ingenious paradox which made a mock of the ordinary bourgeois understanding, the withering criticism, the bitter irony, and, revealed here and there, a deep and genuine feeling of indignation at the infamy of the existing order, a revolutionary earnestness – all these electrified the readers of Qu’est-ce que la propriété? and provided a strong stimulus on its first appearance. In a strictly scientific history of political economy the book would hardly be worth mentioning. But sensational works of this kind have their role to play in the sciences..."
"But", Marx notes, "in spite of all his apparent iconoclasm one already finds in Qu’est-ce que la propriété? the contradiction that Proudhon is criticising society, on the one hand, from the standpoint and with the eyes of a French small-holding peasant (later petit bourgeois) and, on the other, that he measures it with the standards he inherited from the socialists".
In 1846 Marx wrote his first systematic criticism of Proudhon, in The Poverty of Philosophy. In his view Proudhon went from bad to worse after that. "Proudhon’s discovery of 'crédit gratuit' [free credit] and the “people’s bank” (banque du peuple), based upon it, were his last economic 'deeds'... But to regard interest-bearing capital as the main form of capital and to try to make a particular form of the credit system comprising the alleged abolition of interest, the basis for a transformation of society is an out-and-out petty-bourgeois fantasy". Proudhon's final efforts "must be described as works not merely bad but base, a baseness, however, which corresponds to the petty-bourgeois point of view".

Looking for the "bad side that produces the movement"

Already in The Poverty of Philosophy, Marx had asserted, against Proudhon's repeated efforts to find ways to get rid of the "bad side" of capitalism and expand the "good side", the idea that: "It is the bad side that produces the movement which makes history, by providing a struggle".
Proudhon, in fact, had many ideas which seem to us today plainly right-wing. He was racist, anti-semitic, sexist, and opposed to workers' trade-union organisation and strikes. In the 20th century, ideas similar to Proudhon's were more likely to be found in right-wingers, like Ezra Pound, than left-wingers.
But Marx is not concerned just to fend off Proudhon factionally. By the time he comes to write the Grundrisse, Marx is deep in the attempt to "scientifically supersede" both Proudhon and his conventional bourgeois opponents "by a criticism of political economy". He wants to find "the bad side that produces the movement" within capitalism.
Thus he teases out the logic of the Proudhonists' ideas about "labour money" or about "free credit" in great detail, to show that the "good" principle to which they appeal - economic equal exchange - is, within capitalist society, part of an inseparable whole with the inequalities of capitalism. In the course of doing that, he seems to convince himself that his, Marx's, critique of political economy should not start in the way he had just suggested in his own Introduction - with production - but, in fact, with circulation, with the commodity. "The wealth of those societies in which the capitalist mode of production prevails, presents itself as ‘an immense accumulation of commodities,’ its unit being a single commodity. Our investigation must therefore begin with the analysis of a commodity.”

Criticism and sectarianism

At first sight, Marx's criticism of the Proudhonists seems very "sectarian". All right, labour money and free credit are limited. But mightn't they be good first steps? If you have well-intentioned socialists going for such ideas, even if they're not quite what we'd wish, why not build on what's positive rather than deride and analyse them to death?
In fact, Marx's criticism of the Proudhonists is profoundly anti-sectarian. It defines the criteria for what is sectarian or what is not - serious criteria, beyond the hopelessly vague and wishy-washy idea that being highly critical is "sectarian", and being easy-going and broad-alliance-minded is not. It establishes that what "produces the movement which makes history, by providing a struggle" is the development of capitalism itself, and the class contradictions embedded within it. It shows that to stand aside from that development of capitalism, and construct ingenious (or even popular) schemes for rearranging capitalism to boost its "good sides" and suppress its "bad sides", is fundamentally sectarian.
There is a close link between Marx's ultra-polemical teasing-out of the follies of "labour-money" and "free credit" schemes, and the big idea which comes out more clearly in the Grundrisse than any of Marx's other writings: that socialism is not about trying to stop capitalism developing in a capitalist way, but about "pushing through" capitalist development, basing oneself on the revolutionary and subversive elements generated by capitalist development itself.

Contemporary relevance?

There are no Proudhonists today. Nobody argues for labour-money. In general, the idea that socialism can be brought about by currency manipulation is dead. "Bimetallism" briefly dominated US leftist politics in the 1890s - the demand that silver be recognised as a money-standard as well as gold. William Jennings Bryan declared: "It is simply a question... upon which side shall the Democratic Party fight. Upon the side of the idle holders of idle capital, or upon the side of the struggling masses?... Having behind us the producing masses of this nation and the world, supported by the commercial interests, the labouring interests and the toilers everywhere, we will answer their [the idle capitalists'] demand for a gold standard by saying to them: You shall not press down upon the brow of labour this crown of thorns, you shall not crucify mankind upon a cross of gold". That has no resonance today, too.
But Proudhonism represented, for Marx, the most worked-out form of "bourgeois socialism". And "bourgeois socialism" is constantly re-born in bourgeois society, in one form or another - sometimes broadly left-wing, sometimes clearly right-wing. There was Social Credit in the 1930s. Pauline Hanson put forward some "socialistic" economic policies as part of a right-wing package. The Tobin Tax movement (ATTAC), particularly in France, identifies socialist progress with a particular formula for taxing financial transactions (one proposed by its author, James Tobin, as a way to stabilise capitalism, but now advocated by leftists as a way to... undercut capitalism).

Labour money/ time-chits

"Labour money" was advocated long before Proudhon. In fact, there was a real attempt to put it into practice in Britain in the 1830s. A "National Equitable Labour Exchange" was founded in 1832 by Robert Owen. It was located in Grays Inn Road and then in Charlotte Street, in London. It operated as a depot where workers could exchange products they had made by means of labour notes representing hours of work.
The Exchange was initially successful. Branches opened in South London and Birmingham. But gradually they filled up with unsaleable and unwanted furniture. Furniture-makers, apparently, were particularly keen on using the Exchanges - and liable to take along to them the items they had made but been unable to sell on the regular capitalist market. All the branches closed in 1834.
In Marx's Critique of the Gotha Programme (1875) labour-money appears as a makeshift to be introduced in "a communist society just as it emerges from capitalist society". The worker "receives a certificate from society that he has furnished such-and-such an amount of labour (after deducting his labor for the common funds); and with this certificate, he draws from the social stock of means of consumption as much as the same amount of labour cost. The same amount of labour which he has given to society in one form, he receives back in another".
This does not make sense, though. Marx had already shown in the Grundrisse that: "This demand [for labour money] can be realised only under circumstances where it can no longer be raised".
For labour-money to be possible, all labour must be directly social labour. That is, labour must be so organised that all production is equally advanced and efficient, and what is produced corresponds exactly to what is wanted. If such perfect social planning is achieved, then who would want any sort of money, time-chit or otherwise? If it is not, then labour-money won't work.
Actually, in "a communist society just as it emerges from capitalist society", and for a long while after, generations maybe, we will be far from ensuring that all labour is directly social labour to any adequate approximation. There will be nothing for it but to use money for distribution - real money, not labour-money. Karl Kautsky explained this clearly enough while Engels was still alive, in his 1892 exposition of the Erfurt Programme: "It is entirely utopian to imagine that a special system of distribution is to be manufactured... Socialist society... will go on from the point at which capitalist society ceases. The distribution of goods in a socialist society might possibly continue for some time under forms that are essentially developments of the existing system of wage-payment. At any rate, this is the point from which it is bound to start". Engels seems to have tacitly conceded that the labour-certificate scheme in the Critique of the Gotha Programme was a nonsense.
In 1936 Trotsky would criticise the Stalinists for false radicalism as regards the monetary system of the USSR. At the stage the USSR was at, and probably for a very long time, a stable monetary system was necessary, if only for the information it would grant to the planners in their necessarily imperfect schemes to direct the economy. "Such characteristically anarchist demands as the 'abolition' of money, 'abolition' of wages, or 'liquidation' of the state and family, possess interest merely as models of mechanical thinking. Money cannot be arbitrarily 'abolished', nor the state and the old family 'liquidated'. They have to exhaust their historic mission, evaporate, and fall away..."
However, the Critique of the Gotha Programme explains very clearly the folly of the "principle" upon which the whole labour-money scheme was founded: returning to the producer the full "proceeds" of his or her labour.
This is a petty-bourgeois, not a working-class demand - a demand tailored to the situation of the small producer producing goods by his or her individual effort, and wanting a "fair" price for them. In developed capitalist production, it is simply impossible to identify the individual "proceeds of labour" of the individual worker. Moreover, the basic drive of socialist development must be to convert more and more of the social product to general social use, not individual consumption.
And the demand for the worker to get the full proceeds of his or her labour necessarily means that all non-workers (children, sick people, elderly people) become dependent on a worker for their subsistence - through the family, in fact. (Thus Proudhon, as Marx put it - in a letter to Annenkov, in 1846, summarising the ideas of The Poverty of Philosophy - "sings the praises of the petty bourgeoise and of the miserable patriarchal amorous illusions of the domestic hearth").

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