WEBVTT NOTE 12. The Marxian System, I: Historical Materialism and the Class Struggle (continued) 1 00:00:00.000 --> 00:00:05.680 6. THE ORIGIN OF THE CONCEPT OF CLASS 2 00:00:05.680 --> 00:00:11.460 We have seen that James Mill in the early decades of the 19th century worked out a simple 3 00:00:11.460 --> 00:00:19.320 but cogent and effective two-class theory of class, the ruling class that ran the state 4 00:00:19.320 --> 00:00:25.480 and the remainder of society who constituted the ruled. At about the same time during the 5 00:00:25.480 --> 00:00:45.480 In the restoration period in France after the fall of Napoleon in 1814, a group of laissez-faire libertarian theorists were working out a far more sophisticated version of the same model, a model that contained a historical and sociological dimension absent in James Mill. 6 00:00:45.480 --> 00:00:54.480 This group were the spiritual and physical descendants of the ideologues of the Napoleonic era, and the major link was J.B. Say. 7 00:00:54.480 --> 00:01:01.360 Say was the inspirer and elder statesman of this restoration group, which was led by his 8 00:01:01.360 --> 00:01:12.880 son-in-law, Charles Comte, François Charles-Louis Comte, 1782-1837, and Charles Dunoyer, Barthélemy 9 00:01:12.880 --> 00:01:19.240 Charles-Pierre Joseph Dunoyer, 1786-1862. 10 00:01:19.240 --> 00:01:28.200 An important follower of Comte and Du Noyer was the young Augustin Thierry, 1795 to 1856, 11 00:01:28.200 --> 00:01:32.080 soon to become the most notable of French historians. 12 00:01:32.080 --> 00:01:38.680 At the beginning of the Restoration and until 1820, Comte and Du Noyer founded and edited 13 00:01:38.680 --> 00:01:46.360 Le Censure, followed by Le Censure Européen, periodicals that became the center for the 14 00:01:46.360 --> 00:01:49.080 new laissez-faire movement. 15 00:01:49.080 --> 00:01:55.080 President Mill, Comte and Du Noyer defined conflicting classes as those who gained control 16 00:01:55.080 --> 00:02:01.280 of the state apparatus as against those who were controlled by the state, but they also 17 00:02:01.280 --> 00:02:07.400 pointed out that history had been a history of such class or caste struggles. 18 00:02:07.400 --> 00:02:13.940 Under Oriental despotism, the emperor and his bureaucracy constituted the ruling class. 19 00:02:13.940 --> 00:02:21.940 In early Europe, conquering tribes settled down among the conquered to constitute a state with a ruling class. 20 00:02:21.940 --> 00:02:31.940 Historically, then, another component of such a ruling class is that, at least initially, it was of a different ethnic group from the ruled. 21 00:02:31.940 --> 00:02:38.940 In this way, ethnic oppression reinforced political-economic class oppression by the state. 22 00:02:38.940 --> 00:02:53.940 But to Comte and Du Noyer, the new element, the factor that would bring about the inevitable emergence and triumph of a classless, in the sense of caste-less society, was what they called industrialism. 23 00:02:53.940 --> 00:03:01.940 The emergence of an industrial society required an international free market economy to enable it to work. 24 00:03:01.940 --> 00:03:20.940 Hence Comte and Du Noyer saw it as inevitable that a free market economy would spread throughout Europe and eventually the world, dissolving the ruling classes and bringing about a libertarian region and world, a world free of the oppression of the state. 25 00:03:20.940 --> 00:03:27.940 Thus the state in this vision would wither away, to be dissolved into the market exchange economy, 26 00:03:27.940 --> 00:03:36.940 and in the explicit language of Comte and Du Noyer, the government of men would be replaced by the administration of things. 27 00:03:36.940 --> 00:03:42.940 Thus Comte and Du Noyer saw the world as being split into the productive classes, 28 00:03:42.940 --> 00:04:07.940 The non-producers were, in particular, politicians, government officials, and rentiers living off government bonds, as well as subsidized businessmen or receivers of government privilege. 29 00:04:07.940 --> 00:04:18.940 The peak of perfection, which Comte and Dunoyet saw as eventually arriving, would be reached if all the world worked and no one governed. 30 00:04:18.940 --> 00:04:25.940 In their analysis, Comte and Dunoyet went beyond their mentor, J.B. Say, with his blessing, 31 00:04:25.940 --> 00:04:33.940 to add the historical, sociological and political-philosophic dimensions to the strictly economic. 32 00:04:33.940 --> 00:04:39.820 The Comte du Noyer movement were firm and militant believers in individual liberty and 33 00:04:39.820 --> 00:04:46.140 in property rights, thus du Noyer's attack on egalitarianism. 34 00:04:46.140 --> 00:04:52.660 Equality would be the reversal of that fundamental law of humanity and of society, which provides 35 00:04:52.660 --> 00:04:59.140 that the income and the position of each man depends above all on his conduct, and is 36 00:04:59.140 --> 00:05:06.140 is proportionate to the activity, the intelligence, and the morality and the persistence of his efforts. 37 00:05:06.140 --> 00:05:12.140 And on liberty, Du Noyer wrote that for 40 years I have defended the same principles, 38 00:05:12.140 --> 00:05:19.140 liberty in everything, in religion, in philosophy, in literature, industry, in politics, 39 00:05:19.140 --> 00:05:25.140 and by liberty I mean the triumph of individuality. 40 00:05:25.140 --> 00:05:31.940 The worm in the apple, the way in which libertarian social class analysis got transmuted into a 41 00:05:31.940 --> 00:05:39.460 mixture of itself and its opposite, was provided by a garrulous French aristocrat, Henri Comte 42 00:05:39.460 --> 00:05:50.820 de Saint-Simon. Claude Henri de Rouvrois, Comte de Saint-Simon, 1760-1825. Saint-Simon, a hopelessly 43 00:05:50.820 --> 00:05:56.760 The muddled thinker was not aided in his existential confusion by his penchant for picking up 44 00:05:56.760 --> 00:06:02.480 ideas orally at salons, instead of by systematic reading. 45 00:06:02.480 --> 00:06:08.980 For a while, during the censure period, Saint-Simon, who had picked up the Comte du Noyer ideas 46 00:06:08.980 --> 00:06:15.260 at salons, was what could best be described as a fellow traveler of theirs, and pushed 47 00:06:15.260 --> 00:06:19.580 their ideas in his own periodical, L'Industrie. 48 00:06:19.580 --> 00:06:30.080 1816-1818. After that, however, Saint-Simon grew increasingly authoritarian and hostile to laissez-faire liberalism. 49 00:06:30.080 --> 00:06:38.580 Having imbibed libertarian class analysis from Comte de Dunoyet, he characteristically got the concepts confused 50 00:06:38.580 --> 00:06:45.080 and introduced the fateful and unacknowledged contradiction between conflicting classes 51 00:06:45.080 --> 00:06:55.080 in the sense of those who govern or are governed by the state versus employers vis-à-vis wage earners on the free market. 52 00:06:55.080 --> 00:07:00.580 The Marxian jumble was Saint-Simon's dubious contribution to social thought. 53 00:07:00.580 --> 00:07:09.080 After Saint-Simon's death in 1825, his disciple, Olinde Rodriguez, an engineer and son of a bureaucrat, 54 00:07:09.080 --> 00:07:16.680 – joined by Enfantin and Bazar – founded the Saint-Simonian journal Le Producteur, 55 00:07:16.680 --> 00:07:22.520 which followed by conferences and tracts for the remainder of the 1820s, converted their 56 00:07:22.520 --> 00:07:29.340 deceased masters' confused social philosophy into a militant proposal for a totalitarian 57 00:07:29.340 --> 00:07:31.040 socialist system. 58 00:07:31.040 --> 00:07:37.120 This system was to be run by what the Saint-Simonians considered the true class representatives 59 00:07:37.120 --> 00:07:43.600 of Industrialism, an alliance of engineers and other technocratic intellectuals with 60 00:07:43.600 --> 00:07:50.360 investment bankers, coordinated and led by a banker-dominated central bank. 61 00:07:50.360 --> 00:07:57.720 In short, in contrast to Communist Socialism, which was at least ostensibly egalitarian, 62 00:07:57.720 --> 00:08:06.080 Sansimonianism was frankly elitist, to be run by the good and allegedly modern classes. 63 00:08:06.080 --> 00:08:12.440 Thus the Saint-Simonians, who were the first users of the word socialism, repudiated capitalists 64 00:08:12.440 --> 00:08:18.840 and entrepreneurs on behalf of their favored bankers and intellectual classes, representing 65 00:08:18.840 --> 00:08:20.800 the worker-producers. 66 00:08:20.800 --> 00:08:27.280 It is perhaps not coincidental that of the two maximum co-leaders of Saint-Simonianism, 67 00:08:27.280 --> 00:08:34.800 Enfantin and Bazar, Barthéléme Prospert-Enfantin was the son of a banker, was trained as a 68 00:08:34.800 --> 00:08:40.800 of the Banker and Engineer, and had been a mathematics student of Olande Rodriguez. 69 00:08:40.800 --> 00:08:47.800 Nor is it surprising that Sansimonianism appealed hugely to the investment bankers, the producteur 70 00:08:47.800 --> 00:08:52.440 being financed by the prominent banker Jacques Lafitte. 71 00:08:52.440 --> 00:08:58.760 The Sansimonian culture reached the peak of its remarkable influence in France from 1830 72 00:08:58.760 --> 00:09:19.760 1791-1832, after which the dual popes of this political-religious cult, Enfantin and Saint-Amand-Bazart, 1791-1832, had a fiery split on the free-love question on which every disciple was required to take immediate sides. 73 00:09:19.760 --> 00:09:26.400 Unfortunately, the destructive split between the two popes came too late, and the Saint-Simonian 74 00:09:26.400 --> 00:09:32.640 socialist movement had already become astoundingly influential throughout Europe. 75 00:09:32.640 --> 00:09:40.600 In France, artists and writers became Saint-Simonians, including Georges Saint, Balzac, Hugo and 76 00:09:40.600 --> 00:09:42.520 Eugène Sault. 77 00:09:42.520 --> 00:09:48.440 While in music, Berlioz attempted to apply Saint-Simonian principles by composing a song 78 00:09:48.440 --> 00:09:56.200 on the Installation of Railroads, and Franz Liszt played the piano at Sansemonian meetings. 79 00:09:56.200 --> 00:10:02.900 In England, the reactionary Romantic pantheist Thomas Carlyle took to Sansemonian socialism 80 00:10:02.900 --> 00:10:09.420 immediately and became its leading spokesman in England, going so far as to translate and 81 00:10:09.420 --> 00:10:15.720 attempting to publish the master's final work, The New Christianity, in which he foreshadowed 82 00:10:15.720 --> 00:10:20.180 the development of his movement into the cult of a new religion. 83 00:10:20.180 --> 00:10:27.000 Of more lasting importance was the deep influence that Sansimonianism had on John Stuart Mill. 84 00:10:27.000 --> 00:10:33.920 For it was the Sansimonians who were initially and largely responsible for Mill's quasi-conversion 85 00:10:33.920 --> 00:10:39.240 from his father's hardcore free-market views to semi-socialism. 86 00:10:39.240 --> 00:10:45.480 In his autobiography, Mill explains that he read every Sansimonian tract and how it was 87 00:10:45.480 --> 00:11:06.480 It is partly by their writings that his eyes were open to the very limited and temporary value of the old political economy, which assumes private property and inheritance as indefeasible facts and freedom of production and exchange as the dernier mot of social improvement. 88 00:11:06.480 --> 00:11:32.680 Indeed, in a letter to a leading French Saint-Simonian, Gustave Dictal, a friend of Rodriguez, Mill went so far as to concede that some form of Saint-Simonian socialism is likely to be the final and permanent condition of our race, although he differed with them in believing that it would take a long time for mankind to become capable of achieving that happy state. 89 00:11:32.680 --> 00:11:38.800 There is no country, however, that took to Sansimonianism with more gusto than Germany. 90 00:11:38.800 --> 00:11:45.260 In the early 1830s, Sansimonianism went like wildfire through the German literary world. 91 00:11:45.260 --> 00:11:51.120 Its enthusiastic adepts included the eminent political writer Friedrich Buchholz and the 92 00:11:51.120 --> 00:11:57.340 famous poet Heinrich Heine, while the young German school of poets became Sansimonian 93 00:11:57.340 --> 00:11:58.580 adepts. 94 00:11:58.580 --> 00:12:05.140 But the most important influence of Saint-Simonianism in Germany was on the young Hegelians. 95 00:12:05.140 --> 00:12:11.720 Young German poets such as T. Munt and G. Kuhne were Hegelian university lecturers on 96 00:12:11.720 --> 00:12:13.140 philosophy. 97 00:12:13.140 --> 00:12:18.420 More directly, Saint-Simonianism exercised a formative influence on Marx. 98 00:12:18.420 --> 00:12:24.920 In the first place, Marx's hometown of Trier had been part of the German Rhineland, occupied 99 00:12:24.920 --> 00:12:29.560 by France for two decades of the French Revolutionary Wars. 100 00:12:29.560 --> 00:12:35.040 Hence the town had become greatly susceptible to French intellectual influences. 101 00:12:35.040 --> 00:12:42.040 As a result, Trier was rife with Saint-Simonian agitation when Marx was a young adolescent, 102 00:12:42.040 --> 00:12:47.680 so much so that the Archbishop felt obliged to condemn Saint-Simonian doctrines from the 103 00:12:47.680 --> 00:12:48.680 pulpit. 104 00:12:48.680 --> 00:12:54.800 Ludwig Gall, former secretary to the Trier City Council, was a prominent and prolific 105 00:12:54.800 --> 00:12:56.880 Sansemonian writer. 106 00:12:56.880 --> 00:13:00.980 There is little doubt that Marx read Gall's writings. 107 00:13:00.980 --> 00:13:05.600 Another powerful influence on Marx was one of his favorite teachers at the University 108 00:13:05.600 --> 00:13:12.920 of Berlin, Eduard Gans, one of Hegel's favorite disciples, who taught criminal law. 109 00:13:12.920 --> 00:13:18.720 Marx was both a Hegelian and a Saint-Simonian, and the interpenetration of the two doctrines 110 00:13:18.720 --> 00:13:25.220 in Germany deeply shaped the views of the young Hegelians, of whom Marx became a leader. 111 00:13:25.220 --> 00:13:31.360 As Billington notes, the entire phenomenon of left Hegelianism has indeed been described 112 00:13:31.360 --> 00:13:39.520 as nothing more than a Hegelianized Saint-Simonianism, or a Saint-Simonianized Hegelianism. 113 00:13:39.520 --> 00:13:46.040 Deeped in Saint-Simon as well as Hegel, Marx found the concept of class struggle as strained 114 00:13:46.040 --> 00:13:52.480 through the defective lenses of the Saint-Simonians ready to hand and suited for incorporation 115 00:13:52.480 --> 00:13:55.100 into his own grand design. 116 00:13:55.100 --> 00:14:01.180 In addition to the class struggle between proletarians and capitalists, Marx also adopted 117 00:14:01.180 --> 00:14:07.000 the Saint-Simonian version of industry and its embodiment, among the Saint-Simonians 118 00:14:07.000 --> 00:14:21.000 as inevitably victorious, along with the future goal of history as the withering away of the state and the replacement of the government of men by the administration of things. 119 00:14:21.000 --> 00:14:27.000 There was, of course, a crucial difference between this abortive concept and its original. 120 00:14:27.000 --> 00:14:38.000 Among Comte and Dunoyet, the utopian state was to be a purely free society of individual property holders and free market exchangers. 121 00:14:38.000 --> 00:14:52.000 For Marx, it was to be a communal collective self-ownership of all goods by man, with no extant division of labor, specialization, money or exchange. 122 00:14:52.000 --> 00:14:59.000 Marx himself has testified to a particularly powerful Sansemonian influence over him, as 123 00:14:59.000 --> 00:15:05.640 conveyed by his beloved mentor, surrogate father and future father-in-law, Baron Ludwig 124 00:15:05.640 --> 00:15:07.360 von Westphalen. 125 00:15:07.360 --> 00:15:13.160 Towards the end of his life, Marx told his close friend and admirer, the Russian liberal 126 00:15:13.160 --> 00:15:20.320 aristocrat, Maxim Kovalevsky, that he had imbibed Sansemonianism from von Westphalen, 127 00:15:20.320 --> 00:15:25.200 who was apparently an ardent admirer of Saint-Simonian doctrine. 128 00:15:25.200 --> 00:15:30.720 We have already seen that in the Communist Manifesto Marx and Engels slipped into the 129 00:15:30.720 --> 00:15:38.400 original libertarian rather than the Saint-Simonian Marxian theory of class, confusing the state 130 00:15:38.400 --> 00:15:43.280 privileged with capitalists who hire workers on the market. 131 00:15:43.280 --> 00:15:48.720 In a penetrating discussion, Professor Ralph Reiko has pointed out that the term bourgeois 132 00:15:48.720 --> 00:15:54.200 The bourgeois, as used on the continent, provided the basis for that confusion. 133 00:15:54.200 --> 00:16:00.880 As Reiko notes, when Marx says that the bourgeoisie is the main exploiting and parasitic class 134 00:16:00.880 --> 00:16:07.160 in modern society, bourgeoisie may be understood in two different ways. 135 00:16:07.160 --> 00:16:13.760 In England and the United States it has tended to suggest the class of capitalists and entrepreneurs 136 00:16:13.760 --> 00:16:19.600 who make their living by buying and selling on the more or less free market. 137 00:16:19.600 --> 00:16:25.960 On the continent, however, the term bourgeoisie has no such necessary connection with the 138 00:16:25.960 --> 00:16:26.960 market. 139 00:16:26.960 --> 00:16:33.560 It can just as easily mean the class of civil servants and rentiers off the public debt 140 00:16:33.560 --> 00:16:39.320 as the class of businessmen involved in the process of social production. 141 00:16:39.320 --> 00:16:45.080 Hayek goes on to state that the systematic exploitation of other classes by bureaucrats 142 00:16:45.080 --> 00:16:50.520 and public debt holders was a commonplace of 19th century social thought. 143 00:16:50.520 --> 00:16:56.800 Tocqueville, for example, denounces the middle class rule under the bourgeois monarchy of 144 00:16:56.800 --> 00:17:02.120 Louis Philippe, 1830 to 1848, as follows. 145 00:17:02.120 --> 00:17:07.840 It settled into every office, prodigiously increased the number of offices, and made 146 00:17:07.840 --> 00:17:14.440 a habit of living off the public treasury almost as much as from its own industry. 147 00:17:14.440 --> 00:17:16.240 But this is far from all. 148 00:17:16.240 --> 00:17:23.200 Professor Reiko shows that in analyzing specific historical events, particularly in contemporary 149 00:17:23.200 --> 00:17:30.800 French history, Marx and Engels kept slipping into the state-bound, two-class, libertarian-type 150 00:17:30.800 --> 00:17:31.800 analysis. 151 00:17:31.800 --> 00:17:44.300 Thus, consider Marx's 18th Brumaire of Louis Bonaparte, 1852, analyzing the events leading up to Bonaparte's coup of 2 December 1851, 152 00:17:44.300 --> 00:17:53.800 which Marx himself portrayed as a demonstration how the class struggle in France created circumstances and relationships 153 00:17:53.800 --> 00:17:59.800 that made it possible for a grotesque mediocrity to play a hero's part. 154 00:17:59.800 --> 00:18:06.680 In the 18th Brumaire, Marx writes indignantly of this executive power, with its enormous 155 00:18:06.680 --> 00:18:13.640 bureaucracy and military organization, with its ingenious state machinery embracing wide 156 00:18:13.640 --> 00:18:20.560 strata, with a host of officials numbering half a million, this appalling parasitic body 157 00:18:20.560 --> 00:18:27.400 which enmeshes the body of French society like a net and chokes all its pores, spraying 158 00:18:27.400 --> 00:18:30.840 Starting up in the days of the absolute monarchy. 159 00:18:30.840 --> 00:18:37.400 Every common interest was straightway severed from society, counterpoised to it as a higher 160 00:18:37.400 --> 00:18:43.960 general interest, snatched from the activity of society's members themselves and made 161 00:18:43.960 --> 00:18:50.320 an object of government activity, from a bridge, a schoolhouse and the communal property of 162 00:18:50.320 --> 00:18:55.820 a village community, to the railways, the national wealth and the National University 163 00:18:55.820 --> 00:19:01.780 of France, all revolutions perfected this machine instead of smashing it. 164 00:19:01.780 --> 00:19:07.620 The parties that contended in turn regarded the possession of this huge state edifice 165 00:19:07.620 --> 00:19:11.000 as the principal spoils of the victor. 166 00:19:11.000 --> 00:19:16.540 Under the second Bonaparte, the state seems to have made itself completely independent, 167 00:19:16.540 --> 00:19:23.380 as against civil society the state machine has consolidated its position. 168 00:19:23.380 --> 00:19:31.420 Not only is Marx using here a two-class, state-bound analysis of class conflict, but he foreshadows 169 00:19:31.420 --> 00:19:37.740 the libertarian development of the idea of the state as an anti-social instrument, as 170 00:19:37.740 --> 00:19:44.340 in Herbert Spencer and in Franz Oppenheimer and even Albert J. Knox's advanced 20th century 171 00:19:44.340 --> 00:19:52.360 libertarian analysis of state power as being an interest inherently opposed to and exploitative 172 00:19:52.360 --> 00:19:54.640 of Social Power. 173 00:19:54.640 --> 00:20:01.880 Fine, but where in all of this are the capitalists and their use of the state as their executive 174 00:20:01.880 --> 00:20:06.960 committee to redouble their exploitation of the proletariat? 175 00:20:06.960 --> 00:20:11.760 Where in fact are capitalists and proletariat at all? 176 00:20:11.760 --> 00:20:18.480 As Reiko points out, there is a delicious irony here, for sophisticated libertarian analysts 177 00:20:18.480 --> 00:20:25.760 speak not only of state power, but also of various groups in history, Asiatic bureaucratic 178 00:20:25.760 --> 00:20:32.980 despotism, feudal landlords, communist parties or whatever, who have managed to gain control 179 00:20:32.980 --> 00:20:40.560 of the state and use its coercive apparatus of exploitative rule over the rest of society. 180 00:20:40.560 --> 00:20:47.300 Thus, as Reiko notes, the Marxian analysis here completely ignores the massive use of 181 00:20:47.300 --> 00:20:54.620 of State Power by Segments of the Capitalist Class, and limits itself to the exploitative 182 00:20:54.620 --> 00:21:00.300 activities of those directly in control of the state apparatus. 183 00:21:00.300 --> 00:21:06.420 Why Marx and Engels should care to whitewash the capitalists in this way, Reiko concludes 184 00:21:06.420 --> 00:21:10.140 ironically, I cannot say. 185 00:21:10.140 --> 00:21:18.180 Marx repeated a similar analysis 20 years later in his The Civil War in France, 1871, 186 00:21:18.180 --> 00:21:21.620 on the rise and fall of the Paris Commune. 187 00:21:21.620 --> 00:21:27.460 That Commune, he wrote, aimed at restoring to the social body all the forces hitherto 188 00:21:27.460 --> 00:21:34.980 absorbed by the state parasite feeding upon and clogging the free movement of society. 189 00:21:34.980 --> 00:21:41.020 In particular, the Commune was able to succeed, at least for a while, by destroying the two 190 00:21:41.020 --> 00:21:47.980 greatest sources of government expenditure, the standing army and state functionarism. 191 00:21:47.980 --> 00:21:56.340 Finally, Engels, in his 1891 preface to the Civil War in France, applied this same libertarian 192 00:21:56.340 --> 00:22:03.300 and very un-Marxian analysis to the existing political situation in the United States. 193 00:22:03.300 --> 00:22:10.460 Nowhere do politicians form a more separate and powerful section, class, of the nation 194 00:22:10.460 --> 00:22:13.020 than precisely in North America. 195 00:22:13.020 --> 00:22:19.220 There, each of the two major parties which alternately succeed each other in power is 196 00:22:19.220 --> 00:22:25.320 itself in turn controlled by people who make a business of politics. 197 00:22:25.320 --> 00:22:31.820 It is in America that we see best how there takes place this process of the state power 198 00:22:31.820 --> 00:22:40.060 Making itself independent in relation to society, we find two great gangs of political speculators 199 00:22:40.060 --> 00:22:46.460 who alternately take possession of the state power and exploit it by the most corrupt means 200 00:22:46.460 --> 00:22:53.180 and for the most corrupt ends. The nation is powerless against these two great cartels of 201 00:22:53.180 --> 00:22:59.660 politicians who are ostensibly its servants but in reality dominate and plunder it. 202 00:22:59.660 --> 00:23:05.380 Professor Reiko concludes his analysis as follows. 203 00:23:05.380 --> 00:23:11.860 It seems, therefore, that there are two theories of the state, as well as, correspondingly, 204 00:23:11.860 --> 00:23:15.660 two theories of exploitation within Marxism. 205 00:23:15.660 --> 00:23:21.460 There is the customarily discussed, and very familiar one, and the one which Marx himself 206 00:23:21.460 --> 00:23:27.480 proclaimed, of the state as the instrument of the ruling class, and the concomitant 207 00:23:27.480 --> 00:23:34.200 Theory which locates exploitation within the production process, and there is the theory 208 00:23:34.200 --> 00:23:41.180 of the state which pits it against society and nation, two surprising and significant 209 00:23:41.180 --> 00:23:43.880 terms to find in this context. 210 00:23:43.880 --> 00:23:50.020 Moreover, it would seem suggestive that it is this second theory that predominates in 211 00:23:50.020 --> 00:23:56.600 those writings of Marx which, because of their nuanced and sophisticated treatment of concrete 212 00:23:56.600 --> 00:24:03.800 and Immediate Political Reality, many commentators have found to be the best expositions of the 213 00:24:03.800 --> 00:24:07.120 Marxian historical analysis. 214 00:24:07.120 --> 00:24:09.600 7. 215 00:24:09.600 --> 00:24:12.820 The Legacy of Ricardo 216 00:24:12.820 --> 00:24:18.360 As Karl Marx plunged into the economics of capitalism that would occupy the rest of his 217 00:24:18.360 --> 00:24:24.700 life, he found ready at hand a marvelous weapon, Ricardian economics. 218 00:24:24.700 --> 00:24:31.860 In contrast to J.B. Say and the French tradition, Ricardo concentrated not on market exchange 219 00:24:31.860 --> 00:24:38.900 and its inevitable focus on individual actors and exchangers benefiting from exchange, but 220 00:24:38.900 --> 00:24:47.180 on production, followed by distribution of income as a distinct and separate process. 221 00:24:47.180 --> 00:24:53.980 Ricardo's main focus was on how this social income from production is distributed, whereas 222 00:24:53.980 --> 00:25:00.640 Say or Torgot looked at individual factors of production and how their income emerges 223 00:25:00.640 --> 00:25:03.540 from production and exchange. 224 00:25:03.540 --> 00:25:11.380 Ricardo focused only on entire, allegedly homogeneous, classes of producers, workers 225 00:25:11.380 --> 00:25:17.980 earning wages, capitalists earning profits, and landlords acquiring rent. 226 00:25:17.980 --> 00:25:24.660 As von Mises pointed out, on the market there are always only single individuals. 227 00:25:24.660 --> 00:25:30.500 Even Marx had to make a point of explaining that as purchases and sales are made only 228 00:25:30.500 --> 00:25:37.380 between single individuals, it is not admissible to look to them for relations between social 229 00:25:37.380 --> 00:25:39.260 classes. 230 00:25:39.260 --> 00:25:46.620 For Ricardo, then, tautologically, given total production, which was mysteriously there and 231 00:25:46.620 --> 00:25:48.560 not explained. 232 00:25:48.560 --> 00:25:55.620 More of the fixed total pie obtained by one class must mean less for other classes. 233 00:25:55.620 --> 00:26:01.440 There are, as we remember, no entrepreneurs in Ricardo, because the Ricardians had their 234 00:26:01.440 --> 00:26:08.820 eyes firmly fixed on long-run equilibrium, which is supposed to describe living reality, 235 00:26:08.820 --> 00:26:15.700 and in such equilibrium, devoid of change or uncertainty, there is no room for entrepreneurship. 236 00:26:15.700 --> 00:26:23.700 Thus, for Ricardo, the conditions were already there for a class struggle theory of the capitalist economy. 237 00:26:23.700 --> 00:26:33.700 Not only that, for the delighted Marx found the Ricardian doctrine was, in effect, a quantity of labor theory of value. 238 00:26:33.700 --> 00:26:44.700 Utility dropped out, and since only reproducible goods, and not non-reproducible goods, such as Rembrandt paintings, were considered explainable, 239 00:26:44.700 --> 00:27:08.700 Only the cost of production was considered a determinant of the embodied value of goods, and since Ricardo finessed rent as allegedly not a part of cost, the only possible cost except labor hours was profit, interest, or cost of capital, and this was so small as to be readily neglected. 240 00:27:08.700 --> 00:27:24.700 Besides, profits are allegedly only a declining residual after the payment of wages, which are doomed to keep rising in money, but not in real terms, as population continues to press upon the food supply. 241 00:27:24.700 --> 00:27:32.700 In the gloomy Ricardian perspective, there are two logical paths toward a call for change in the status quo. 242 00:27:32.700 --> 00:27:49.200 For Marx, the labor theory of value, the view that labor is the sole producer of value, meant that the capitalist's return, profit, constituted the exploitative extraction of surplus value from the workers. 243 00:27:49.200 --> 00:28:00.200 The workers produce all value, but the capitalists are able somehow to coerce the workers into accepting wages that are below the full product. 244 00:28:00.200 --> 00:28:16.200 In fact, adopting the Malthusian, Ricardian view of population, the workers are paid a subsistence wage, while the capitalists extract the remainder of the workers' product as their surplus value or profit. 245 00:28:16.200 --> 00:28:24.200 To the old Malthusian problem, wouldn't the same problem of overpopulation foil a socialist economy? 246 00:28:24.200 --> 00:28:30.920 The Marxian answer was that such an iron law of wages, to adopt the term of LaSalle, would 247 00:28:30.920 --> 00:28:33.800 not apply under socialism. 248 00:28:33.800 --> 00:28:40.880 Oddly, neither Marx nor his critics ever realized that there is one place in the economy where 249 00:28:40.880 --> 00:28:47.480 the Marxian theory of exploitation and surplus value does apply. 250 00:28:47.480 --> 00:28:52.960 Not to the capitalist-worker relation in the market, but to the relation of master and 251 00:28:52.960 --> 00:28:55.240 and Slave Under Slavery 252 00:28:55.240 --> 00:29:01.980 Since the masters own the slaves, they indeed only pay them their subsistence wage, enough 253 00:29:01.980 --> 00:29:07.940 to live on and reproduce, while the masters pocket the surplus of the slave's marginal 254 00:29:07.940 --> 00:29:11.340 product over their cost of subsistence. 255 00:29:11.340 --> 00:29:17.180 This surplus value extracted from the slave constitutes the profits of the masters from 256 00:29:17.180 --> 00:29:19.080 slave ownership. 257 00:29:19.080 --> 00:29:25.880 In the free society, in contrast, the workers, owning their own bodies and their own labor, 258 00:29:25.880 --> 00:29:32.640 pocket their full marginal product, discounted, as an Austrian would add, by the interest 259 00:29:32.640 --> 00:29:39.000 return the laborers freely and willingly pay to the capitalists for advancing them the 260 00:29:39.000 --> 00:29:45.080 value of their production now, rather than wait until after the product is produced 261 00:29:45.080 --> 00:29:46.880 and sold. 262 00:29:46.880 --> 00:29:52.480 But such is the process of capitalization in the market, that in a system of slavery 263 00:29:52.480 --> 00:29:59.060 in the midst of a general market economy, as in the American South, the surplus value 264 00:29:59.060 --> 00:30:05.540 will be capitalized by bidding up the value and therefore the selling or buying price 265 00:30:05.540 --> 00:30:07.340 of the slaves. 266 00:30:07.340 --> 00:30:13.440 The long-run tendency will be for the business of slavery to yield a return equal to that 267 00:30:13.440 --> 00:30:15.340 of any other industry. 268 00:30:15.340 --> 00:30:22.380 The surplus profits will be bid away into the general rate of return on capital. 269 00:30:22.380 --> 00:30:29.180 To return to Marx, he also found very handy the Smithian concept, not to the latter's 270 00:30:29.180 --> 00:30:37.300 credit, much employed by Ricardo, that only material commodities and not immaterial services 271 00:30:37.300 --> 00:30:40.980 constitute production or value. 272 00:30:40.980 --> 00:30:50.020 All goods are frozen labor, whereas immaterial labor services are, in Marxian terms, non-productive. 273 00:30:50.020 --> 00:30:56.020 In this area, Marx took a giant step backwards from Ricardo to Adam Smith. 274 00:30:56.020 --> 00:31:02.460 All this, however, fitted neatly into Marxian philosophical materialism. 275 00:31:02.460 --> 00:31:09.180 Marx also found that Ricardo had already treated all labor as homogeneous, with any differences 276 00:31:09.180 --> 00:31:17.180 was in quality simply weighted by some sort of index to reduce them to quantity of labor hours. 277 00:31:17.180 --> 00:31:25.180 One logical path for a radical Ricardian, clearly, was to call for the expropriation of surplus value 278 00:31:25.180 --> 00:31:31.180 and the establishment of a system in which the laborers earn the full value of their product. 279 00:31:31.180 --> 00:31:37.180 As we shall see shortly, this was the path taken by the Ricardian socialist writers in Britain. 280 00:31:37.180 --> 00:31:43.900 But there was another, more logical path. After all, the Ricardians could and did say 281 00:31:43.900 --> 00:31:51.180 that capital earned profits from their supplying workers with capital goods, with frozen labor. 282 00:31:51.180 --> 00:31:57.420 Such a service is clear. Otherwise, the workers would not have had to rely on capitalists for 283 00:31:57.420 --> 00:32:04.940 money while working on the product. Marx's reply that capital goods being frozen labor 284 00:32:04.940 --> 00:32:11.740 should be owned by the workers, misses the point that something, some service, must have 285 00:32:11.740 --> 00:32:18.940 been added by the capitalists, which as we have already seen was essentially savings, 286 00:32:18.940 --> 00:32:24.820 and if we may put it that way, who were advancing the workers' frozen time. 287 00:32:24.820 --> 00:32:32.340 A very different radical path, much more Ricardian and indeed already trod by James Mill, was 288 00:32:32.340 --> 00:32:39.660 was to concentrate on the other possible bugbear class in the Ricardian system, the landlords, 289 00:32:39.660 --> 00:32:46.980 they who simply extract a return for no service, for simply sitting on the original and indestructible 290 00:32:46.980 --> 00:32:49.260 powers of the soil. 291 00:32:49.260 --> 00:32:55.980 Furthermore, in their own vision of historical laws, the orthodox Ricardians saw the capitalists 292 00:32:55.980 --> 00:33:02.180 Marks losing profit, the workers static at subsistence level, and the social product 293 00:33:02.180 --> 00:33:07.020 increasingly eaten up by the parasitic landlord class. 294 00:33:07.020 --> 00:33:13.980 The nationalization of land rent, then, the pre-Henry Georgist route, was taken by other 295 00:33:13.980 --> 00:33:21.120 disciples, including the last of the consistent radical Ricardians, Henry George. 296 00:33:21.120 --> 00:33:27.440 But how has Marx managed to dispose of the land question that so agitated Ricardo and 297 00:33:27.440 --> 00:33:28.680 Mill? 298 00:33:28.680 --> 00:33:33.080 First of all, Marx was the great prophet of man as labourer. 299 00:33:33.080 --> 00:33:40.760 In his version of Hegelianism, man created nature, indeed, the entire universe. 300 00:33:40.760 --> 00:33:47.120 Since land is man's creature, there is no room for worry about land or land-created 301 00:33:47.120 --> 00:33:48.120 value. 302 00:33:48.120 --> 00:34:08.120 is all. Second, land as the basis for technology, the economy and the social system, was the key to the feudal system, but feudalism was part of the dying pre-capitalist, pre-industrial order, a reactionary remnant unworthy of attention. 303 00:34:08.120 --> 00:34:16.280 Basically then, Marx simply assimilated land into capital and returns on land into profits. 304 00:34:16.280 --> 00:34:23.520 Thus land, the annoying superfluous third class of factors, can drop out and make way 305 00:34:23.520 --> 00:34:30.280 for the mighty two-class polarization and final struggle between the capitalists and 306 00:34:30.280 --> 00:34:33.280 the proletariat. 307 00:34:33.280 --> 00:34:35.000 8. 308 00:34:35.000 --> 00:34:38.320 Ricardian Socialism 309 00:34:38.320 --> 00:34:43.880 Marx was hardly the first person to arrive at radical proletarian conclusions from the 310 00:34:43.880 --> 00:34:47.840 Ricardian system and the labor theory of value. 311 00:34:47.840 --> 00:34:54.920 Mediating between Ricardo and Marx were the Ricardian socialists, who greatly influenced 312 00:34:54.920 --> 00:35:01.800 Marx, but whose influence has been depreciated by Marxists, including Marx himself, who liked 313 00:35:01.800 --> 00:35:09.880 to think that the master's unique genius in arriving at neo-Ricardian socialism had no predecessors. 314 00:35:09.880 --> 00:35:18.800 The first Ricardian socialist was William Thompson, 1775-1833, a well-to-do Irish landlord 315 00:35:18.800 --> 00:35:20.800 from County Cork. 316 00:35:20.800 --> 00:35:26.280 Thompson's prolix and repetitious work, An Inquiry into the Principles of the Distribution 317 00:35:26.280 --> 00:35:33.160 of Wealth, published in 1824, went into three editions in the next half century. 318 00:35:33.160 --> 00:35:40.660 An extreme Benthamite utilitarian, Thompson, in his inquiry also simply declared that labor 319 00:35:40.660 --> 00:35:43.640 is the sole parent of wealth. 320 00:35:43.640 --> 00:35:48.600 Neither utility, pleasure or scarcity had anything to do with it. 321 00:35:48.600 --> 00:35:53.720 From this flat assertion, the labor theory of value swiftly followed. 322 00:35:53.720 --> 00:36:00.080 As Alexander Gray puts it with his characteristic wit, it should be obvious that if the definition 323 00:36:00.080 --> 00:36:07.040 selected gives in advance an assurance labor is the sole parent of wealth, this ought to 324 00:36:07.040 --> 00:36:14.120 be a considerable aid towards proving that wealth may be attributed entirely to labor. 325 00:36:14.120 --> 00:36:20.520 Thompson advocated a world of free and voluntary exchanges as a way of ensuring that workers 326 00:36:20.520 --> 00:36:22.760 will earn their product. 327 00:36:22.760 --> 00:36:26.880 But what of the existing system of exchange? 328 00:36:26.880 --> 00:36:32.440 Anticipating Marx, these exchanges were, according to Thompson, coerced. 329 00:36:32.440 --> 00:36:38.600 The capitalists seizing the products of their labor, of the laborers, by force. 330 00:36:38.600 --> 00:36:45.360 But here, on the edge of Marxism, Thompson retreated into a libertarian class analysis. 331 00:36:45.360 --> 00:36:48.360 For what constitutes such coercion? 332 00:36:48.360 --> 00:36:56.440 An entire spectrum of bounties, protestations, apprenticeships, guilds, corporations, monopolies, 333 00:36:56.440 --> 00:37:01.660 which sounds very much like Comte du Noyer or James Mill. 334 00:37:01.660 --> 00:37:03.720 But Thompson presses on. 335 00:37:03.720 --> 00:37:10.880 Rent and profit are, in particular, surplus value, in Thompson's original phrase, extracted 336 00:37:10.880 --> 00:37:13.440 from the exploited workers. 337 00:37:13.440 --> 00:37:19.100 But then Thompson retreats again from his full vision, conceding that the laborer must pay 338 00:37:19.100 --> 00:37:25.380 for the use of these capital goods when so unfortunate as not to possess them. 339 00:37:25.380 --> 00:37:31.320 So even though Thompson is full of invective against the greedy and rapacious capitalists, 340 00:37:31.320 --> 00:37:34.980 he concedes that they perform a necessary function. 341 00:37:34.980 --> 00:37:37.740 How much, then, should they be paid? 342 00:37:37.740 --> 00:37:43.900 It is not surprising that Thompson floundered in trying to discover such a principle. 343 00:37:43.900 --> 00:37:47.020 Thompson wound up, then, far from a revolutionary. 344 00:37:47.020 --> 00:37:54.320 Instead, his mild, pre-John Stuart Mill-like solution was to encourage cooperatives as 345 00:37:54.320 --> 00:38:02.160 a means of arriving at interclass harmony in his Labor Rewarded, 1827. 346 00:38:02.160 --> 00:38:07.160 But this scarcely exhausted Thompson's heresies as a pre-Marxian. 347 00:38:07.160 --> 00:38:13.960 For being dedicated to free exchange, Thompson sensibly had to admit that from exchange often 348 00:38:13.960 --> 00:38:20.800 emerges accumulation, and from accumulation there arises the dread capitalist class. 349 00:38:20.800 --> 00:38:27.260 Thus, you cannot abridge the exchanges and consequent accumulations of the capitalist 350 00:38:27.260 --> 00:38:33.880 without at the same time abridging all barter and, further, admitting the serpent of wages 351 00:38:33.880 --> 00:38:40.580 and rent back into Eden, why not permit the laborer to exchange for the use of a house, 352 00:38:40.580 --> 00:38:45.660 a horse, a machine, as well as for its possession? 353 00:38:45.660 --> 00:38:55.500 The other founding father of Ricardian socialism in the 1820s, John Gray, 1799-1883, was possessed 354 00:38:55.500 --> 00:39:00.620 Just like Thompson of a most un-Marxian spirit of moderation. 355 00:39:00.620 --> 00:39:06.460 As a young Scottish clerk in a wholesale house in London, Gray published his socialistic 356 00:39:06.460 --> 00:39:10.620 Lectures on Human Happiness in 1825. 357 00:39:10.620 --> 00:39:17.620 An arch-utilitarian and expounder of the Ricardian labor theory of value, Gray fulminated against 358 00:39:17.620 --> 00:39:25.100 capitalists as exploiters of the working class, and, like Marx, saw the seeds of such exploitation 359 00:39:25.100 --> 00:39:27.540 in Trade or Barter. 360 00:39:27.540 --> 00:39:34.540 If William Thompson's innovation was the phrase surplus value, John Gray's particular contribution 361 00:39:34.540 --> 00:39:41.580 to the Marxian brew was to bring back in a heavy way the physiocratic Adam Smith notion 362 00:39:41.580 --> 00:39:48.780 of productive versus unproductive labor, and thus rescue this flawed concept from Ricardian 363 00:39:48.780 --> 00:39:50.220 neglect. 364 00:39:50.220 --> 00:39:56.740 Not only that, but Gray narrowed the Smithian standard of productive labor considerably. 365 00:39:56.740 --> 00:40:04.340 As Gray put it, they only are productive members of society who apply their own hands either 366 00:40:04.340 --> 00:40:10.520 to the cultivation of the earth itself or to the preparing and appropriating the produce 367 00:40:10.520 --> 00:40:13.820 of the earth to the uses of life. 368 00:40:13.820 --> 00:40:19.980 Having narrowed the definition of productive, Gray then began to make curious concessions 369 00:40:19.980 --> 00:40:28.940 admitting, for example, that some occupations may be to some extent useful, although unproductive. 370 00:40:28.940 --> 00:40:35.300 John Gray then proceeded happily to run through the list of British occupations and to allocate 371 00:40:35.300 --> 00:40:44.100 in an obviously purely arbitrary way the percentages of productivity or usefulness in each occupation. 372 00:40:44.100 --> 00:40:49.940 Thus Gray contends that merchants, manufacturers and others who are mere distributors of 373 00:40:49.940 --> 00:40:55.660 of Wealth could still be useful, but only in a sufficient number. 374 00:40:55.660 --> 00:41:02.460 Gray concluded that the productive classes were far short of half the total population. 375 00:41:02.460 --> 00:41:07.980 Harking back, perhaps unconsciously, to the ancient Greeks, Gray reserved some of his 376 00:41:07.980 --> 00:41:14.660 choicest venom for the retailers, whom he savaged as productive only of deception and 377 00:41:14.660 --> 00:41:22.020 and falsehood, folly and extravagance, slavery of the corporeal and prostitution of the intellectual 378 00:41:22.020 --> 00:41:24.560 faculties of man. 379 00:41:24.560 --> 00:41:31.080 It turns out that for Gray the main sin, the crucial evil, is competition. 380 00:41:31.080 --> 00:41:37.020 The competition of labor pushes the wages of labor down to a minimum, standard Marxian 381 00:41:37.020 --> 00:41:38.700 and Fair no doubt. 382 00:41:38.700 --> 00:41:45.900 But in addition, even though labor is supposedly the sole creator of value, Gray also worries 383 00:41:45.900 --> 00:41:52.540 that competition with equal perniciousness also keeps to a minimum the amount of profits 384 00:41:52.540 --> 00:41:54.220 and rent. 385 00:41:54.220 --> 00:42:00.760 John Gray concludes with the general principle that every individual in society, except those 386 00:42:00.760 --> 00:42:08.500 Businesses living on fixed incomes finds their incomes limited and ground down by competition. 387 00:42:08.500 --> 00:42:15.400 It turns out that the exploitation of labor, indeed of everyone, is engineered by competition 388 00:42:15.400 --> 00:42:18.780 itself, which limits production. 389 00:42:18.780 --> 00:42:24.920 Put an end to competition, then, and not only will the ideal world arrive where the laborer 390 00:42:24.920 --> 00:42:40.920 The World is only impoverished because of competition. Eliminate it and wealth will be abundant for all. 391 00:42:40.920 --> 00:42:47.920 Even though Gray maintained that competition could be abolished immediately and with only good effects, 392 00:42:47.920 --> 00:42:55.220 He was distressingly vague on how to accomplish this feat. He seemed to favor some sort of all-embracing 393 00:42:55.840 --> 00:43:00.000 cooperative, thereby bringing him close to Thompsonian reform. 394 00:43:00.520 --> 00:43:05.680 Soon, however, Gray shifted his attention to the limitations on production, 395 00:43:06.200 --> 00:43:12.100 allegedly imposed by hard money, and so he turned increasingly to a call for 396 00:43:12.520 --> 00:43:15.360 accelerating amounts of cheap and easy money. 397 00:43:15.360 --> 00:43:23.560 Thus, in 1831, Gray's book, The Social System, called for cheap and abundant credit to fuel 398 00:43:23.560 --> 00:43:29.240 and finance increased production, guided by a governmental national bank. 399 00:43:29.240 --> 00:43:35.400 Gray, of course, also advocated irredeemable paper money and the abolition of the gold 400 00:43:35.400 --> 00:43:36.720 standard. 401 00:43:36.720 --> 00:43:42.040 This analysis was further developed in John Gray's last work, Lectures on the Nature 402 00:43:42.040 --> 00:43:46.040 and Use of Money, 1848. 403 00:43:46.040 --> 00:43:53.800 After 1848, John Gray's social protests ceased completely, and so until recently it was assumed 404 00:43:53.800 --> 00:43:57.980 by historians that he had died around 1850. 405 00:43:57.980 --> 00:44:03.540 It turns out, however, that Gray, shortly after the publication of his Lecture of Human 406 00:44:03.540 --> 00:44:09.920 Happiness, founded with his brother James the famous publishing firm of J. and J. Gray 407 00:44:09.920 --> 00:44:11.600 Gray of Edinburgh. 408 00:44:11.600 --> 00:44:18.360 As the firm flourished, especially after 1850, Gray settled down to a comfortable existence 409 00:44:18.360 --> 00:44:24.320 and died at a ripe old age of 84 in 1883. 410 00:44:24.320 --> 00:44:30.700 A decade and a half after Thompson and Gray, the third leading Ricardian socialist made 411 00:44:30.700 --> 00:44:41.180 his Appearance, John Francis Bray, 1809-1897, in his major work, much quoted by Marx, Labor's 412 00:44:41.180 --> 00:44:49.120 Wrongs and Labor's Remedy, 1839. Bray was born in Washington, D.C., the child of English 413 00:44:49.120 --> 00:44:55.380 actors, and when his mother died, his ailing father brought John Francis back to Leeds 414 00:44:55.380 --> 00:44:58.420 in England in 1822. 415 00:44:58.420 --> 00:45:04.760 In Leeds, Bray became a compositor and plunged into the trade union movement, becoming treasurer 416 00:45:04.760 --> 00:45:09.980 of the Leeds Working Men's Association in 1837. 417 00:45:09.980 --> 00:45:16.980 Like the others, an extreme utilitarian, Bray, in Labor's Wrongs, asserts that God had meant 418 00:45:16.980 --> 00:45:23.000 men to be happy, but that unhappiness was injected into the world by the institution 419 00:45:23.000 --> 00:45:29.840 of Private Property, which destroyed the just institution of communal property, particularly 420 00:45:29.840 --> 00:45:31.480 in the land. 421 00:45:31.480 --> 00:45:37.980 From private property arose the odious division of labor and class conflict, exploitation 422 00:45:37.980 --> 00:45:43.560 of laborers, and extraction of their surplus value by the capitalist class. 423 00:45:43.560 --> 00:45:50.640 Moreover, Bray averred that the root problem is the alleged fact of unequal exchange, although 424 00:45:50.640 --> 00:45:57.660 Although understanding that in market exchanges each party benefits, Bray asserts that, especially 425 00:45:57.660 --> 00:46:05.680 in a labor contract, this is not enough, that the exchange and its benefits must be equal. 426 00:46:05.680 --> 00:46:12.480 Not realizing that there is no point in any exchange unless the value for each man of 427 00:46:12.480 --> 00:46:20.560 each of the two exchanged goods is unequal, Bray, in a notable pre-Marxian passage, asserts 428 00:46:20.560 --> 00:46:27.720 Men have only two things which they can exchange with each other, namely labor and the product 429 00:46:27.720 --> 00:46:28.720 of labor. 430 00:46:28.720 --> 00:46:32.060 Therefore, let them exchange as they will. 431 00:46:32.060 --> 00:46:36.340 They merely give, as it were, labor for labor. 432 00:46:36.340 --> 00:46:42.120 If a system of exchanges were acted upon, the value of all others would be determined 433 00:46:42.120 --> 00:46:50.800 by the entire cost of production and equal values would always exchange for equal values. 434 00:46:50.800 --> 00:46:57.440 Here we have packed into one short compass a number of crucial Marxian fallacies that 435 00:46:57.440 --> 00:47:05.760 only commodities are produced or important, in contrast to allegedly non-productive services. 436 00:47:05.760 --> 00:47:13.280 The ancient Aristotelian fallacy that exchange implies equality of value, the labor theory 437 00:47:13.280 --> 00:47:20.680 of value, and the idea that in a just world, prices will be equal to their costs of production 438 00:47:20.680 --> 00:47:26.660 – basically, the quantity of labor hours expended in production. 439 00:47:26.660 --> 00:47:34.000 To John Bray, as to Marx after him, the remedy for all this systemic evil is communism, the 440 00:47:34.000 --> 00:47:38.160 The most perfect form of society man can institute. 441 00:47:38.160 --> 00:47:45.100 But in contrast to Marx, Bray saw no inevitable mechanism or law of history to yield that 442 00:47:45.100 --> 00:47:46.580 great event. 443 00:47:46.580 --> 00:47:52.960 To the contrary, and in contrast to the other communists of his day, John Bray perceived 444 00:47:52.960 --> 00:47:58.400 that communism required a new communist man to work. 445 00:47:58.400 --> 00:48:03.640 But that the advent of this new man was definitely not on the horizon. 446 00:48:03.640 --> 00:48:09.560 Many communism would come up against the foul and loathsome selfishness which now more or 447 00:48:09.560 --> 00:48:16.360 less accompanies every action, clings to every thought, and pollutes every aspiration. 448 00:48:16.360 --> 00:48:23.320 Instead, Bray focused his vision not on the impractical and remote ultimate goal, but 449 00:48:23.320 --> 00:48:29.600 on his allegedly practical transition or intermediate social goal. 450 00:48:29.600 --> 00:48:34.920 That happened to be a hypertrophied version of the cooperative schemes that had proved 451 00:48:34.920 --> 00:48:38.200 so alluring to Thompson and Gray. 452 00:48:38.200 --> 00:48:45.520 Gray proposed that the world be organized into one vast cartelized network of cooperative 453 00:48:45.520 --> 00:48:53.560 corporations, that is, cooperatives organized on the principle of one stockholder, one vote. 454 00:48:53.560 --> 00:49:02.560 The cartelized network would be achieved by the workers and cooperators buying out all existing capitalists. 455 00:49:02.560 --> 00:49:16.560 Bray did not seem to see that acquiring the capital to finance this most massive buyout of all time might be even more impractical than organizing Marx's violent proletarian revolution. 456 00:49:16.560 --> 00:49:21.560 Scratch a socialist of this epoch and one will find a money crank. 457 00:49:21.560 --> 00:49:27.980 Sure enough, Bray envisioned that the cooperative cartel, once established, would eliminate 458 00:49:27.980 --> 00:49:34.480 existing money and substitute a national bank that would issue notes to each worker based 459 00:49:34.480 --> 00:49:39.100 on the quantity of labor time he had expended in production. 460 00:49:39.100 --> 00:49:44.500 The goods the laborer would buy would, in their turn, be priced at the amount of labor 461 00:49:44.500 --> 00:49:47.120 time embodied within them. 462 00:49:47.120 --> 00:49:52.980 Perhaps if Marx had ever been interested in charting his future communist economy, labor 463 00:49:52.980 --> 00:49:57.220 time notes might have been part of his package. 464 00:49:57.220 --> 00:50:04.180 Strictly there would be no reason for Marxian labor time notes to increase, but John Bray, 465 00:50:04.180 --> 00:50:07.880 as an inflationist, did not of course see it that way. 466 00:50:07.880 --> 00:50:13.520 The function of his national bank would be to keep money issued and flowing like blood 467 00:50:13.520 --> 00:50:21.840 within the living body, equably through society at large and infuse universal health and vigor. 468 00:50:21.840 --> 00:50:27.120 The note issue would of course always be kept within the limits of the actual effective 469 00:50:27.120 --> 00:50:35.580 capital existent, a form of needs-of-trade argument at least as absurd as the usual variant. 470 00:50:35.580 --> 00:50:41.560 For the nominal value of existing capital would of course increase, as the money supply 471 00:50:41.560 --> 00:50:43.760 kept rising. 472 00:50:43.760 --> 00:50:50.800 A few years after the publication of Labor's Wrongs in 1842, Bray returned to the United 473 00:50:50.800 --> 00:50:51.800 States. 474 00:50:51.800 --> 00:50:58.280 A second book, A Voyage from Utopia, was finished in manuscript but remained unpublished 475 00:50:58.280 --> 00:51:00.440 until the 1950s. 476 00:51:00.440 --> 00:51:05.840 For the rest of his life in the United States, Bray wrote sporadically, contributing many 477 00:51:05.840 --> 00:51:15.840 and many letters to labor and socialist periodicals, as well as chapters in the mid-1850s for an unfinished book, The Coming Age. 478 00:51:15.840 --> 00:51:24.840 Bray's life was as sporadic as his output. He found making a living precarious, working for brief jobs as a printer for newspapers, 479 00:51:24.840 --> 00:51:32.840 and complaining rather inconsistently with his doctrines that American employers were far more exploitative than British. 480 00:51:32.840 --> 00:51:41.840 The Yankees, as Professor Dorfman paraphrased Bray, appearing more like gamblers and sharpers than honest businessmen. 481 00:51:41.840 --> 00:51:51.840 Eventually, Bray went west to Michigan, where he had inherited some land and eked out a living as a newspaper man and small farmer. 482 00:51:51.840 --> 00:52:01.840 During the 1870s and 1880s, Bray became vice president of the American Labor Reform League and was a member of the Socialistic Knights of Labor. 483 00:52:01.840 --> 00:52:08.280 His later writings, some of which denounced spiritualism, emphasized a tax on the gold 484 00:52:08.280 --> 00:52:14.280 standard and a call for an abundance of state paper money that would allegedly drive interest 485 00:52:14.280 --> 00:52:16.360 rates down to zero. 486 00:52:16.360 --> 00:52:21.640 His communist ideal was now abandoned as utopian. 487 00:52:21.640 --> 00:52:25.360 Two of Bray's later writings are worthy of note. 488 00:52:25.360 --> 00:52:31.200 Even though he was opposed to slavery in Labour's wrongs, his opposition to the Civil War in 489 00:52:31.200 --> 00:52:37.520 and his anonymous anti-war pamphlet, American Destiny, What Shall It Be? 490 00:52:37.520 --> 00:52:44.940 Republican or Cossack, 1864, led him onward to judge slavery as really no worse than countries 491 00:52:44.940 --> 00:52:47.800 cursed by a huge public debt. 492 00:52:47.800 --> 00:52:54.140 Moreover, the natural state of the black man to bray is nakedness and indolence, so that 493 00:52:54.140 --> 00:53:00.660 and a South that freed its slaves would decay irremediably, with capital disappearing and 494 00:53:00.660 --> 00:53:03.820 plantations returning to the wilderness. 495 00:53:03.820 --> 00:53:12.900 In his final book, God and Man, a Unity and All Mankind, a Unity, 1879, John Bray added 496 00:53:12.900 --> 00:53:20.100 to his money-crankism the idea of a non-theological religion in which establishing the right social 497 00:53:20.100 --> 00:53:33.820 A striking anomaly is a writer of the 1820s and later who is invariably listed by historians 498 00:53:33.820 --> 00:53:39.840 as a leading Ricardian socialist, but who was most emphatically neither a Ricardian 499 00:53:39.840 --> 00:53:41.520 nor a socialist. 500 00:53:41.520 --> 00:53:50.360 Thomas Hodgkin, 1787-1869, was a brilliant, innovative and self-educated political theorist 501 00:53:50.360 --> 00:53:58.160 who, far from being a socialist, was a laissez-faire libertarian to the point of being an individualist anarchist. 502 00:53:58.160 --> 00:54:05.480 Hodgkin's father was a storekeeper at the naval dockyard who sent his son to sea at the age of 12. 503 00:54:05.480 --> 00:54:12.080 Eventually, Hodgkin's individualist instincts and principles rubbed against naval discipline, 504 00:54:12.080 --> 00:54:17.760 and one day, he writes, I complained of the injury done me by a commander-in-chief to 505 00:54:17.760 --> 00:54:21.640 himself in the language that I thought it merited. 506 00:54:21.640 --> 00:54:27.680 He had unjustly deprived me of every chance of promotion from my own exertions, and that 507 00:54:27.680 --> 00:54:30.440 was robbing me of every hope. 508 00:54:30.440 --> 00:54:36.760 As one might expect, Hodgkin's naval commander did not take kindly to his outburst of righteous 509 00:54:36.760 --> 00:54:43.920 indignation, and Hodgkin was forcibly retired from the Navy at half pay at the comparatively 510 00:54:43.920 --> 00:54:46.880 young retirement age of 25. 511 00:54:46.880 --> 00:54:53.360 Embittered, Hodgkin promptly took revenge on the Navy by publishing his first book, 512 00:54:53.360 --> 00:55:00.400 An Essay on Naval Discipline, 1813, a blistering attack on military tyranny. 513 00:55:00.400 --> 00:55:06.660 Eloquently, Hodgkin began his work by setting down the main lesson he had learned, patiently 514 00:55:06.660 --> 00:55:12.020 submitting to oppression because it comes from a superior is a vice. 515 00:55:12.020 --> 00:55:18.400 To surmount your fears of that superior and resist it is a virtue. 516 00:55:18.400 --> 00:55:32.400 Hodgkin's experience left him a bitter enemy of government and government intervention in all its forms, and several years of traveling around Europe and reading and meeting people strengthened and deepened these convictions. 517 00:55:32.400 --> 00:55:44.400 Returning to Great Britain, Hodgkin published a two-volume travel book, Travels in the North of Germany, Edinburgh 1820, in which, as Alexander Gray puts it, 518 00:55:44.400 --> 00:55:49.400 Innocent riser-builder are interlarded with anarchistic digressions, 519 00:55:49.400 --> 00:55:54.400 doubtless to the amazement and perturbation of many of his readers. 520 00:55:54.400 --> 00:55:58.400 Settled in London, Hodgkin was, for the rest of his life, 521 00:55:58.400 --> 00:56:01.400 to work as a lecturer and a journalist. 522 00:56:01.400 --> 00:56:05.400 He worked for a while with people who seemed to be his natural allies 523 00:56:05.400 --> 00:56:11.400 for laissez-faire, Francis Place, James Mill and the Philosophic Radicals. 524 00:56:11.400 --> 00:56:17.160 But very shortly it became clear that there were severe philosophical differences between them. 525 00:56:17.160 --> 00:56:23.440 In the first place, Hodgkin abandoned his early Benthamite utilitarianism for a trenchant 526 00:56:23.440 --> 00:56:28.040 and militant natural law and natural rights position. 527 00:56:28.040 --> 00:56:34.880 In his brilliant and logical work, The Natural and Artificial Right of Property Contrasted, 528 00:56:34.880 --> 00:56:41.440 In 1932, Hodgkin presented a radicalized Lockean view of property rights. 529 00:56:41.440 --> 00:56:46.740 An ardent defense of the right of private property, including a homesteading defense 530 00:56:46.740 --> 00:56:53.680 of private property and land, Hodgkin corrected Locke's various slippages from a consistent 531 00:56:53.680 --> 00:56:55.440 Lockean position. 532 00:56:55.440 --> 00:57:02.280 To Hodgkin, it was crystal clear that natural private property rights were sound and just, 533 00:57:02.280 --> 00:57:15.280 such as each man in his own person, or in property that he creates, or land that he homesteads, or in property which he acquires in an exchange of just property titles. 534 00:57:15.280 --> 00:57:28.280 On the other hand, great mischief was performed by artificial property rights, that is, rights created by government artificially, in defiance of natural law and natural rights. 535 00:57:28.280 --> 00:57:35.480 Hodgkin's work remains today as one of the best expositions of natural property rights doctrine. 536 00:57:35.480 --> 00:57:40.920 Another difference with the Benthamites was that, unfortunately and anomalously, 537 00:57:40.920 --> 00:57:48.520 Hodgkin imbibed the labor theory of value from another influential Ricardian socialist of the day, 538 00:57:48.520 --> 00:57:51.640 the pseudonymous Piercy Ravenstone. 539 00:57:51.640 --> 00:57:59.640 Ravenstone denounced private ownership of land and capital for creating stolen or artificial property. 540 00:57:59.640 --> 00:58:09.640 Whereas, since labor is the sole creator of production, by rights or naturally, all income should redound to labor. 541 00:58:09.640 --> 00:58:15.640 Rent and profit, asserted Ravenstone, are extracted from the product of labor. 542 00:58:15.640 --> 00:58:22.640 This fund for the maintenance of the idol is the surplus produce of the labor of the industrious. 543 00:58:22.640 --> 00:58:35.640 Furthermore, Ravenstone put forth a truly bizarre theory of capital, in which capital is a non-existent concept designed to cloak the theft of labor's surplus. 544 00:58:35.640 --> 00:58:43.240 Capital, Ravenstone absurdly declared, may be increased to any imaginable amount, without 545 00:58:43.240 --> 00:58:47.040 adding to the real riches of a nation. 546 00:58:47.040 --> 00:58:53.400 From then on, Hodgkin was afflicted by an anomalous combination of laissez-faire anarchism 547 00:58:53.400 --> 00:58:57.340 and a Ravenstonian labor theory of value. 548 00:58:57.340 --> 00:58:59.240 How square the two? 549 00:58:59.240 --> 00:59:05.600 At first, Hodgkin tried to do so by attributing the exploitation, the surplus value of the 550 00:59:05.600 --> 00:59:11.920 of Labor, solely to such government intervention as the Combination Laws, which restricted 551 00:59:11.920 --> 00:59:14.160 the right to form labor unions. 552 00:59:14.160 --> 00:59:19.960 Hence, Hodgkin helped found the Mechanics Magazine, and then its affiliate, the London 553 00:59:19.960 --> 00:59:25.680 Mechanics Institute, an institution for lectures to the working classes. 554 00:59:25.680 --> 00:59:31.960 During the course of the successful Ricardian-Benthamite agitation for repeal of the Combination Laws 555 00:59:31.960 --> 00:59:40.520 in 1824, Hodgkin wrote his Ravenstonian booklet, Labor Defended Against the Claims of Capital, 556 00:59:40.520 --> 00:59:51.360 1825, followed by Mechanics Institute Lectures, published as Popular Political Economy, 1827. 557 00:59:51.360 --> 00:59:57.400 Particularly bizarre was Hodgkin's development of the Ravenstonian view that capital is unimportant 558 00:59:57.400 --> 01:00:00.160 and non-existent. 559 01:00:00.160 --> 01:00:08.160 Man denies that any savings are involved in capital, any advances from foregone consumption. 560 01:00:08.160 --> 01:00:13.440 Circulating capital, he says, sophistically, are not produced in advance. 561 01:00:13.440 --> 01:00:19.800 The bread the worker buys is baked each day, rather than being stored in advance by the 562 01:00:19.800 --> 01:00:20.800 capitalist. 563 01:00:20.800 --> 01:00:26.400 In fact, of course, no one claims that the capitalist actually stores the worker's food 564 01:00:26.400 --> 01:00:29.640 and other means of subsistence in advance. 565 01:00:29.640 --> 01:00:36.280 But his saved money is advanced ahead of production and sale to the worker, which enables the 566 01:00:36.280 --> 01:00:42.340 worker to buy his subsistence now, instead of having to wait for years. 567 01:00:42.340 --> 01:00:49.900 As for fixed capital, not only is it stored up labor, a general Ricardian socialist argument, 568 01:00:49.900 --> 01:00:57.140 but these machines are only inert, decaying and dead matter, unless guided, directed and 569 01:00:57.140 --> 01:00:59.820 and applied by skillful hands. 570 01:00:59.820 --> 01:01:06.220 Hodgkin concludes that fixed capital does not derive its utility from previous, but 571 01:01:06.220 --> 01:01:12.980 present, labor, grotesquely ignoring the fact that just because capital and labor need each 572 01:01:12.980 --> 01:01:17.980 other does not make labor the sole factor of production. 573 01:01:17.980 --> 01:01:24.260 In the crowning absurdity, Hodgkin declares that it is a miserable delusion to call capital 574 01:01:24.260 --> 01:01:26.580 something saved. 575 01:01:26.580 --> 01:01:33.700 There is no question that Hodgkin's ultralaborism influenced Karl Marx, but his extreme labor 576 01:01:33.700 --> 01:01:39.180 theory of value does not make him a Ricardian, much less a socialist. 577 01:01:39.180 --> 01:01:45.980 In fact, Hodgkin was highly critical of Ricardo and the Ricardian system, denounced Ricardo's 578 01:01:45.980 --> 01:01:52.260 abstract methodology and his theory of rent, and considered himself a Smithian, rather 579 01:01:52.260 --> 01:01:54.260 than a Ricardian. 580 01:01:54.260 --> 01:02:00.700 Roth's natural law and harmony of interest free market doctrine was also far more congenial 581 01:02:00.700 --> 01:02:02.540 to Hodgkin. 582 01:02:02.540 --> 01:02:08.500 Although continuing to be a laborist, Hodgkin became increasingly repelled by the English 583 01:02:08.500 --> 01:02:13.220 labor movement and its growing interest in state intervention. 584 01:02:13.220 --> 01:02:18.540 Labor unions he no longer saw as much of a remedy, let alone a panacea. 585 01:02:18.540 --> 01:02:24.240 Increasingly he saw that the only way to reconcile laborism and laissez-faire was to 586 01:02:24.240 --> 01:02:40.240 to press for the repeal of all government intervention, indeed, of all positive law that was not simply a restatement of natural law and natural rights, for all such law was an invasion of rights of property. 587 01:02:40.240 --> 01:02:53.240 In contrast to the Ricardian socialists who extolled cartel-like cooperatives, Hodgkin called for removal of all government restrictions on free and unlimited competition. 588 01:02:53.240 --> 01:02:59.680 He enthusiastically joined Cobden and Bright in agitation for repeal of the Corn Laws, 589 01:02:59.680 --> 01:03:06.220 and in repealing feudalistic laws restricting and entailing land from free sale outside 590 01:03:06.220 --> 01:03:07.880 the family. 591 01:03:07.880 --> 01:03:15.600 From 1846 to 1855, Hodgkin served as an editor of The Economist, the journalistic champion 592 01:03:15.600 --> 01:03:22.280 of laissez-faire, with as yet no important incompatibility of views with editor-in-chief 593 01:03:22.280 --> 01:03:28.600 by James Wilson. There he became a friend and mentor of the young Herbert Spencer, hailing 594 01:03:28.600 --> 01:03:34.680 Spencer's anarchistic work, social statics, with the exception of denouncing the early 595 01:03:34.680 --> 01:03:42.940 Spencer's pre-Georgist land socialism on behalf of Lockean individualism. Furthermore, even 596 01:03:42.940 --> 01:03:50.760 at his most laborist in the 1820s, Thomas Hudgeskin, in contrast to John Gray, widened, 597 01:03:50.760 --> 01:03:54.460 Rather Than Narrowed the Definition of Labor 598 01:03:54.460 --> 01:04:01.440 Mental activity is as much labor, he pointed out, as muscular exertion, so he warned against 599 01:04:01.440 --> 01:04:05.720 limiting the term labor to the operations of the hands. 600 01:04:05.720 --> 01:04:13.200 Not only that, Hodgkin also pointed out cogently that the capitalist is also very often a manager, 601 01:04:13.200 --> 01:04:15.680 and therefore also a laborer. 602 01:04:15.680 --> 01:04:21.840 So whereas capitalists may be oppressors, businessmen in their capacity as managers 603 01:04:21.840 --> 01:04:27.980 or masters are laborers as well as their journeymen, and there is nothing wrong with the wages 604 01:04:27.980 --> 01:04:29.980 of management. 605 01:04:29.980 --> 01:04:36.880 In addition, the hudskin of the 1820s hailed retailers as indispensable agents and praised 606 01:04:36.880 --> 01:04:43.740 wholesalers and merchants in Smithian terms as conferring blessings on society by pursuing 607 01:04:43.740 --> 01:04:45.660 their own interests. 608 01:04:45.660 --> 01:04:51.340 Even bankers are still very important and have long been very useful laborers. 609 01:04:51.340 --> 01:04:57.660 Banking, let us never forget, is altogether a private business, and no more needs to be 610 01:04:57.660 --> 01:05:02.140 regulated by meddling statesmen than the business of papermaking. 611 01:05:02.140 --> 01:05:09.060 Finally, in his popular political economy, Hodgkin eulogized the market price system, 612 01:05:09.060 --> 01:05:15.340 which in a deep sense is the finger of heaven, indicating to all men how they may employ 613 01:05:15.340 --> 01:05:30.080 After his retirement from the Economist Editorial Board, Hodgkin continued to write articles 614 01:05:30.080 --> 01:05:31.820 for that journal. 615 01:05:31.820 --> 01:05:33.900 There he praised commerce. 616 01:05:33.900 --> 01:05:39.580 We are all merchants, and trade is only mutual service by mutual dealing. 617 01:05:39.580 --> 01:05:47.160 Speculation, without speculation we should have no railroads, no docks, no great companies. 618 01:05:47.160 --> 01:05:54.600 And competition, the soul of excellence and gives to every man his fair reward. 619 01:05:54.600 --> 01:06:01.760 In his final publication of lectures on criminal law delivered in 1857, Thomas Hodgkin summed 620 01:06:01.760 --> 01:06:05.180 up his economic and political philosophy. 621 01:06:05.180 --> 01:06:10.980 The people's wants for higher standards of living, he declared, can only be satisfied 622 01:06:10.980 --> 01:06:14.580 by more freedom and less taxation. 623 01:06:14.580 --> 01:06:21.220 The free trade principles of the 1840s must be only a stepping stone towards ever purer 624 01:06:21.220 --> 01:06:23.740 and more consistent laissez-faire. 625 01:06:23.740 --> 01:06:30.100 Ultimately, all government services must be privatized and subjected to the requirements 626 01:06:30.100 --> 01:06:32.220 of the free market. 627 01:06:32.220 --> 01:06:40.020 The unrestricted competition which nature establishes must be the rule for all our transactions, 628 01:06:40.020 --> 01:06:45.940 and by the higgling of the market, which is mutual and free action, the salaries of government 629 01:06:45.940 --> 01:06:51.660 officials and the payments of the priesthood must be regulated as well as the profit of 630 01:06:51.660 --> 01:06:55.940 the shopkeeper and the wages of the laborer. 631 01:06:55.940 --> 01:07:01.060 In printing his lectures, Hodgkin announced his intention of completing and publishing 632 01:07:01.060 --> 01:07:07.620 a Masterwork, The Absurdity of Legislation Demonstrated, which would show, in a connected 633 01:07:07.620 --> 01:07:14.140 didactic form, that all legislation, which of course includes government, is founded 634 01:07:14.140 --> 01:07:16.140 on false assumptions. 635 01:07:16.140 --> 01:07:22.600 Unfortunately, Hodgkin never completed the work, or published anything further, and when 636 01:07:22.600 --> 01:07:30.740 When he died in 1869 at the age of 82, this man, once so widely influential, received 637 01:07:30.740 --> 01:07:34.760 not a single obituary notice in the London papers. 638 01:07:34.760 --> 01:07:40.920 But at any rate, enough is surely known to dismiss the view that this individualist, 639 01:07:40.920 --> 01:07:48.520 despite the laborism that influenced Marx, was in any sense a socialist or even a Ricardian.