Tuesday, November 28, 2006


Notes on our discussion of pages 135-172

Labour-money, money, and a beginning of the discussion on money and community


In the Introduction, Marx discussed method. He rejected an approach which would start off from supposed eternal constants in favour of probing, from the start, the characteristic structures of the particular society he is dealing with. The Introduction, to my mind, is a bit of a false start, since Marx gets involved in attempts to prove the primacy of production more or less a priori - "confusing to anticipate results which still have to be substantiated", as he would later write - and his actual choice of starting point in Capital had more to do with his analytical conclusions from probing the connection between the basic commodity-form and capital (as he does in his critique of the Proudhonists) than with any a priori argument.
The section on Bastiat and Carey stands somewhat apart from the whole, but there already you find the theme sketched out in the Communist Manifesto but developed in the Grundrisse more than any other of Marx's writings - that working-class socialism builds on and grows out of the potentialities and contradictions generated by capitalist development, that it is a matter of "pushing through" and eventually beyond the limits of capitalist development rather than of trying to stop it being capitalist.
In the Grundrisse proper, Marx starts with a discussion of the free credit scheme of the Proudhonist Darimon. The reasons for that starting point? Perhaps because Proudhonism was a strong force at the time. Perhaps because Marx wanted to "work through" the influence which Proudhon had had on him in Paris in 1844 and late 1843, the time when Marx himself became a communist. Perhaps because he considered the critique of Proudhonism, i.e. of the then-dominant form of "bourgeois socialism", central for creating a distinctively working-class socialism free of bourgeois assumptions and limits.
The first part of the discussion (see pages 115-134) is mostly concerned with Darimon's idea that the banking system can be re-cast so as to eliminate interest and the restrictions on credit caused by limited supplies of the money-standard (gold).
This second part looks in more detail at the idea of "labour-money" or "time-chits". "Labour money" had been 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.

Labour money/ time-chits

Marx argues (pp.137-9) that time-chits cannot resolve the social problems created by money. It is in the nature of commodity exchange that price diverges from value. Prices may be based on labour-time, but - since they are market prices, not the results of a priori calculations of labour times - they may and indeed must oscillate away from labour-time. In any case (p.139) labour productivity is constantly increasing, so any set system of labour-money valuations would immediately become out of date.
To work, a time-chit system presupposes a bank which would in fact be a general ruler of production. In which case, if that bank planned everything, what would be the purpose of the chits? The bank would have to be either "a despotic ruler of production and trustee of distribution" or "a board which keeps the books and accounts for a society producing in common" (notice, having in mind debates about the nature of Stalinism, that Marx assumes that these two possibilities are radically different from each other). (p.115-6).
In short, "This demand [for labour money] can be satisfied only under conditions where it can no longer be raised." [p.172]. Marx is quite clear that fully-developed communism is a society without money. Money cannot be abolished overnight. But to try to replace capitalist money by a sort of socialist money (labour-money) is foolish on two grounds. Firstly, it is unworkable. Secondly, despite the proposal's unworkability, it is too limited, too lacking in radicalism, too tied to present-day assumptions.
(The same sort of criticism is relevant to false-radical demands in other spheres, too. Take the demand for a single secular-democratic state in Israel-Palestine. This can be satisfied only under conditions where the two nations, Israeli Jews and Palestinian Arabs, have already, by some other means, become reconciled and friendly to a very high degree - higher than all the other neighbouring pairs of nations in the world who are not yet ready to merge into a single state. If that reconciliation and friendliness does not exist, then the single state cannot be democratic, but only the product of the conquest of one nation by the other. If the reconciliation and friendliness does exist, why ever would the two friendly nations want to create a new small state rather than both merging into a larger regional unit? "This demand can be satisfied only under conditions where it can no longer be raised".)

Labour-money after the Grundrisse

Surprisingly, after his devastating critique of the labour-money idea, in the Critique of the Gotha Programme (1875) Marx would suggest labour-money 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 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..."
The Critique of the Gotha Programme does explain 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").

Money and community

Woven into the time-chit argument is a development by Marx of the idea - much returned to by Marx later in the Grundrisse - that a comprehensive money economy is indeed cruelly shaking up human social relations, but that in doing so it is expanding human potentialities and creating the basis for communism.
Very many thinkers in the 19th century were shocked by the way in which developed capitalism was atomising human relations. Engels' comment in The Condition of The Working Class in England (1845) is especially vivid:
"One realises for the first time that these Londoners have been forced to sacrifice the best qualities of their human nature, to bring to pass all the marvels of civilisation which crowd their city... The very turmoil of the streets has something repulsive, something against which human nature rebels. The hundreds of thousands of all classes and ranks crowding past each other, are they not all human beings with the same qualities and powers, and with the same interest in being happy? And have they not, in the end, to seek happiness in the same way, by the same means? And still they crowd by one another as though they had nothing in common, nothing to do with one another...
The brutal indifference, the unfeeling isolation of each in his private interest, becomes the more repellent and offensive, the more these individuals are crowded together, within a limited space. And, however much one may be aware that this isolation of the individual, this narrow self-seeking, is the fundamental principle of our society everywhere, it is nowhere so shamelessly barefaced, so self-conscious as just here in the crowding of the great city. The dissolution of mankind into monads, of which each one has a separate principle, the world of atoms, is here carried out to its utmost extreme.
Hence it comes, too, that the social war, the war of each against all, is here openly declared... People regard each other only as useful objects; each exploits the other, and the end of it all is that the stronger treads the weaker under foot; and that the powerful few, the capitalists, seize everything for themselves, while to the weak many, the poor, scarcely a bare existence remains.
What is true of London, is true of Manchester, Birmingham, Leeds, is true of all great towns. Everywhere barbarous indifference, hard egotism on one hand, and nameless misery on the other, everywhere social warfare..."
Marx had neither forgotten nor become indifferent to this inhumanity. But he had gone beyond simply recoiling from it. He had diagnosed the immense subversive potential within it.
"Within bourgeois society, the society that rests on exchange value, there arise relations of circulation as well as of production which are so many mines to explode it. (A mass of antithetical forms of the social unity, whose antithetical character can never be abolished through quiet metamorphosis. On the other hand, if we did not find concealed in society as it is the material conditions of production and the corresponding relations of exchange prerequisite for a classless society, then all attempts to explode it would be quixotic.)" [p.159]
"Universally developed individuals, whose social relations, as their own communal [gemeinschaftlich] relations, are hence also subordinated to their own communal control, are no product of nature, but of history. The degree and the universality of the development of wealth where this individuality becomes possible supposes production on the basis of exchange values as a prior condition, whose universality produces not only the alienation of the individual from himself and from others, but also the universality and the comprehensiveness of his relations and capacities.
The degree and the universality of the development of wealth where this individuality becomes possible supposes production on the basis of exchange values as a prior condition, whose universality produces not only the alienation of the individual from himself and from others, but also the universality and the comprehensiveness of his relations and capacities. In earlier stages of development the single individual seems to be developed more fully, because he has not yet worked out his relationships in their fullness, or erected them as independent social powers and relations opposite himself." [p.162]

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