But the distinction between profit and interest was not known in Owen’s time, and Owen would have said that they are both one, and that if profit occasionally claims a share in the cost of production with a view to defying competition it has no right to any such refuge, for cost of production should consist of nothing but the value of labour and the wear and tear of capital. Accordingly it ought to be got rid of altogether.
[521] “Metallic money is the cause of a great deal of crime, injustice, and want, and it is one of the contributory causes which tend to destroy character and to make life into a pandemonium.
“The secret of profit is to buy cheap and to sell dear in the name of an artificial conception of wealth which neither expands as wealth grows nor contracts as it diminishes.”
[522] This contradiction did not escape Owen. But we must not forget that he regarded this merely as a compromise, and that he looked forward to a time when the establishment of a communistic association with a new environment would lead to a complete solution of the problem. He began in the New Harmony colony by making pro rata payment for the work done, but the object was to arrive gradually at a state of complete equality where no distinction was to be made between the service rendered or the labour given—with the result that the colony was extinct in six months.
[523] The Labour Exchange, which was opened in September 1832, at first enjoyed a slight measure of success. There were 840 members, and they even went the length of establishing a few branches. Among the chief causes of the failure of the scheme the following may be enumerated:
(a) The associates, being themselves allowed to state the value of their products, naturally exaggerated, and it became necessary to relieve them of a task which depended entirely upon their honour, and to place the valuation in the hands of experts. But these experts, who were not at all versed in Owen’s philosophy, valued the goods in money in the ordinary way, and then expressed those values in labour notes at the rate of 6d. for every hour’s work. It could hardly have been done on any other plan. But it was none the less true that Owen’s system was in this way inverted, for instead of the labour standard determining the selling value of the product, the money value of the product determined the value of the labour.
(b) As soon as the society began to attract members who were not quite as conscientious as those who first joined it, the Exchange was flooded with goods that were really unsaleable. But for the notes received in exchange for these the authorities would be forced to give goods which possessed a real value, that is, goods which had been honestly marked, and which commanded a good price, with the result that in the long run there would be nothing left in the depot except worthless products. In short, the Exchange would be reduced to buying goods which cost more than they were worth, and selling goods that really cost less than they were worth.
Since the notes were not in any way registered, any one, whether a member of the society or not, could buy and sell them in the ordinary way and make a handsome profit out of the transaction. Three hundred London tradesmen did this by offering to take labour notes in payment for merchandise. They soon emptied the Exchange, and when they saw that nothing valuable was left they stopped taking the notes, and the trick was done.
M. Denis very aptly points out that the Exchange was really of not much use to the wage-earner, who was not even allowed to own what he had produced. There is some doubt after all as to whether the system would prove quite successful in abolishing the wage-earners.
[524] This does not imply that consumers’ associations, when they are better organised and federated, with large central depots at their command, will not take up this project once again—that is, will not try to dispense with money in their commercial transactions. They will certainly keep an eye on that problem.