A history of socialism

by Thomas Kirkup

(5) The capitalist class grows by the appropriation and accumulation of the surplus value contained in the product of labour, whilst the proletariat is reduced to a subsistence wage. It is social production and capitalistic appropriation.

(6) Organisation in the factory; anarchy in society as a whole.

(7) This anarchy is intensified, especially in the great commercial crises, showing that the middle class are no longer able to control the productive forces.

(8) All these contradictions can be solved only by an explicit recognition of the social character of production. The proletariat seizes political power and transforms the means of production into social property.

(9) The State, which has hitherto been an arrangement for holding the producing class in subjection, will become superfluous, and die a natural death. Henceforward, government will consist simply in the control of industrial processes.

The work of Marx is a natural history of capital, especially in its relation to labour, and in its most essential features is a development of two of the leading principles of the classic economics—that labour is the source of value, but that of this value the labourer obtains for himself merely a subsistence wage, the surplus being appropriated by the exploiting capitalist. Marx’s great work may be described as an elaborate historical development of this glaring fundamental contradiction of the Ricardian economics, the contradiction between the Iron Law of Wages and the great principle that labour is the source of wealth. Marx’s conception of labour is the same as that of Ricardo, and as a logical exposition of the historic contradiction between the two principles, on the basis of Ricardo, the work of Marx is quite unanswerable. It is obvious, however, that the definition of labour assumed both in Ricardo and Marx is too narrow. The labour they broadly posit as the source of wealth is manual labour. In the early stages of industry, when the market was small and limited, and the technique was of the simplest and rudest description, labour in that sense might correctly enough be described as the source of value. But in modern industry, when the market is world-wide, the technique most complex, and the competition most severe, when inventiveness, sagacity, courage, and decision in initiative, and skill in management, are factors so important, no such exclusive place as has been claimed can be assigned to labour. The Ricardian principle, therefore, falls to the ground.

And it is not historically true to maintain, as Marx does, that the profits of the capitalist are obtained simply by appropriating the products of unpaid labour. In initiating and managing, the capitalist is charged with the most difficult and important part of the work of production. As a natural consequence, it follows that Marx is also historically inaccurate in roundly explaining capital as the accumulation of unpaid labour appropriated by the capitalist. In past accumulation, as in the control and management of industry generally, the capitalist has had the leading part. Capital, therefore, is not necessarily robbery, and in an economic order in which the system of free exchange is the rule and the mutually beneficial interchange of utilities, no objection can be raised to the principle of lending and borrowing of money for interest. In short, in his theory of unpaid labour as supplying the key to his explanation of the genesis and development of the capitalistic system, Marx is not true to history. It is the perfectly logical outcome of certain of the leading principles of the Ricardian school, but it does not give an adequate or accurate account of the facts of economic evolution.

In his theory of unpaid labour Marx is not consistent with the general principles of his own philosophy of social evolution. With him history is a process determined by material forces, a succession of orderly phenomena controlled by natural laws. Now we may waive the objection suggested by the principle enunciated in the Marx school itself, that it is not legitimate to apply ethical categories in judgment on economic processes that are merely natural; which, however, Marx does with revolutionary emphasis throughout some hundreds of pages of his great work. It is more important to point out, in perfect consistency with the principles of the school, that the energy and inventiveness of the early capitalists especially were the most essential factors in determining the existence and development of a great economic era, and that the assertion of freedom was an indispensable condition in breaking the bonds of the old feudal order, which the new system displaced. Instead, therefore, of living and growing rich on the produce of unpaid labour, the capitalist had a great social and industrial function to perform, and played a great part in historic evolution. The position and function of the workman was subordinate.

In short, Marx has not sufficiently recognised the fact that the development of the new social forces brought with it a new set of functions: that of initiating and directing industrial enterprise. These functions are not comprehended in the narrow definition of labour, but they are, nevertheless, most essential to progress; and the men that performed them have a most complete historical reason for their existence and a share in the results of industry. We need not add that such an argument does not justify all they did as the heads of the new industry. There is ample evidence that they were often rough, hard, cruel, and unscrupulous in the prosecution of their industrial enterprises. Nor does it prejudice the question whether the like direction of industry must and should continue in the future.

There can be no doubt that in his theory of surplus value obtained from unpaid labour, Marx, as agitator and controversialist, has fallen into serious contradiction with himself as scientific historian and philosopher. The theory that labour is the source of value was widely accepted among economists during his early life, and by its justice and nobleness it was well adapted to the comfortable optimism prevalent among so many of the classical school. The economists, however, did not follow the principle to its obvious conclusion: that if labour is the source of wealth, the labourer should enjoy it all. It was otherwise with the socialists, who were not slow to perceive the bearing of the theory on the existing economic order. In his controversial treatise against Proudhon, Marx gives a list of writers (beginning with the political economy of Hopkins,[^[8]] published in 1822, only five years after the appearance of Ricardo’s great work), by whom the principle was applied to revolutionary purposes. Its simplicity and seeming effectiveness must have made it most attractive. As posited by the classic economy, and applied by the socialists, Marx accepted the principle. It was an unanswerable argumentum ad hominem when addressed to an economist of the Ricardian school; but it should have broken down when confronted with historical fact. Nevertheless it was made, and continued to be, the foundation-stone of the system of Marx, and is really its weakest point. His doctrine of surplus value is the vitiating factor in his history of the capitalistic system. The most obvious excuse for him is that he borrowed it from the classic economists.