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suflicient to explain why one manufacturer gathers far more
surplus-value than another, although he neither employs more
labourei's nor pays them worse. The masters who make most
profit seldom make it by paying lower wages than their rivals.
Could manufacturers dispense with human labour altogether, and
substitute for it the action of automatic machines, they would
acquire surplus-value not less than at present. Only on con-
dition of acquiring such value would they consent to produce at
all. Profit and loss in business are not proportional to what
Marx calls the variable capital but to the total capital employed
in it. To maintain the reverse implies blindness to the most
obvious and indubitable facts of industrial and commercial life.

* Cf. Bohm-Bawerk's " Capital and Interest," pp. 35S-62.



SOCIALISM AND CAPITAL 189

We may now see how hopeless must be the attempt of Marx
to prove that the profits of the capitahst are derived entirely
from the robbery of the labourer. Every principle which he laid
down with a view to proving it has been found to be false. Every
proposition from which he would deduce the conclusion at which
he desires to arrive has been shown to be contrary to reason and
to fact.

Let us look, however, at such argumentation as he favours us
with. The capitalist, we are first told, cannot find profit else-
where than in labour-power, because labour-power has the peculiar
quality of being the sole source of value. But that i-eason has
been already disposed of. Marx, we have seen, tried but utterly
failed to justify it. Labour-power has not the peculiar quality
which he ascribes to it. It is not the sole source of value. And,
therefore, it is not to be inferred that value can be derived from
no other sovu"ce.

Labour-power, Marx further assures us, is not only the sole
source of value but has itself a value — " the value of the social
normal labour-time incorporated in it, or necessary to its repro-
duction; in this case, the value of the means of subsistence
necessary to the maintenance of the labourer." But here again
he assumes that he has proved what he has not proved, and what
is even, as we have seen, certainly false. He imagines that he
has shown that the duration of labour is the measure of its value ;
and that he has consequently a standard by which he can tell
definitely how much of it is paid for, and how much of its value
is appropriated by the capitalist. But the duration of labour is
no such measure, and Marx has not a standard of the kind which
he supposes. All his assertions as to the extent of the exploita-
tion of labour are, therefore, of necessity arbitrary.

Marx siqjposes that labour-power can restore itself, or provide
itself with the physically indispensable means of subsistence, by
the labour of six hours, and that the value of these means exactly
represents the value of that labour. There is no reason for either
supposition. There is no definite period discoverable in which
labour will produce the value of the means necessary to its repro-
duction; and there is no ground for regarding the value of these
means as the natural or appropi'iate remuneration of the labour-
power exerted during that period. The physically indispensable



I90 SOCIALISM

means of subsistence are the minimum on which labour-power can
be sustained, not the measure or criterion of its value, not a
necessary or normal, just or reasonable, standard of wages.
What return is due to labour cannot be determined in any such
easy, simple, definite way as Marx would have us believe.

His next step is the most extraordinary of all. It is to treat
what he had professedly siqyposed merely for the sake of argument
as tri',e, to be true and loithout need of argument. It is to affirm as
fact, without producing any kind of evidence, that the labourer
who had only been assumed to be entitled to give the capitalist six
hours' work for three shillings of pay, cannot give more than that
amount of work for that amount of pay without being i*obbed by
the capitalist to the extent of the excess of work. A more loose
and illusory argument there could not be ; and yet it is all that
we get at the very point where argument of the strictest and
strongest kind is most needed.

The labour which the capitalist pays for produces, according to
Marx, no profit, any more than what he calls constant capital.
If the capitalist, therefore, received only the labour of six hours
from each of his workmen he would make no profit. Marx
expounds at gr-eat length his conception of what takes place in
the conversion of lo lbs. of cotton into yarn when the process is
effected by means of six hours' labour paid for at its natural
value. He distinguishes and dwells on the cost of the difierent
factors in the process, and asstires us that in this case the
capitalist can get no more for his cotton yarn than the total cost
of its production, or, in other words, must necessarily fail to
create surplus-value. Yet he does not attempt to show us on
what his assurance is founded ; does not discuss the question
whether the capitalist might not even in the case supposed obtain
a profit. There is no element of argument in his illustration.
The hypothetical example on which he discourses so elaborately,
doubtless clearly expresses his view ; but it does not in the
slightest degree confirm it.

The capitalist, then, according to Marx, cannot get profit either
from his constant capital or from the labour which he pays for.
But, says he quite gravely, the capitalist compels the labourer to
give him twelve hours' labour instead of six, and for the price of
six ; and thus he is able to appropriate to himself as much of



SOCIALISM AND CAPITAL 191

the Vcalue of labour as that which he allows the labourer to
retain .

Observe, that, according to the hypothesis of Marx himself, the
workmen are not only free, but as yet undegraded and unmanned
by the operation of the system of capitalism. Yet he asks us to
believe that they submit to give the capitalist twice the amount
of labour which they are paid for, twelve hours instead of six.
The capitalist, according to Marx, cannot give them less than the
value of theu" six hours of labour. Why, then, should they give
him six hours gratis ? If he is to make profit at all he cannot
refuse to accept from them one hour or even half an hour more,
and yet pay them as much for the six and a half or seven houi^s
as Marx represents him as paying for the twelve hours. In a
word, Marx attributes to the capitalist a power and to the work-
men a foolishness incredible on any hypothesis, but especially
incredible on his own, seeing that if the capitalist be wholly
dependent on human labour for his profit he must be weak, and if
the labour-power of the wox-kmen be the sole source of value they
must be blind indeed if they do not recognise their own strength,
and see that the capitalist must take any amount of time,,
however little beyond six hovirs which they are pleased to grant
him.

The only semblance of reason which Marx gives for ascribing
to the capitalist such power as he does is that " he who once
realises tbe exchange-value of labour-power, or of any other
commodity, parts Avith its use-value " ; that " the use-value of
labour-power once bought belongs just as much to its buyer as
the use- value of oil after it has been sold belongs to the dealer
who has bought it " ; that " when labour actually begins it has
already ceased to belong to the labourer, and consequently cannot
again be sold by him." This pretence of proof Prof. Wolf of
Zurich quite justly stigmatises as " eitel Humbug." It is equiva-
lent to asserting that the proprietor of a house cannot let it for
a year and then refuse to allow the tenant to occupy it another
year free of rent ; that if the possessor of a reaping-machine sells
the use of it for a limited time, he loses his rights over it for an
unlimited time. A workman sells the use of his labour-power on
certain conditions for a certain time ; he does not sell himself,
nor does he sell his labour, or the use of his labour-power,.



192 SOCIALISM

on other conditions or for a longer time than he himself
consents to.

Further, Marx shows himself inconsiderate and inconsistent
when he represents the capitalist as appropriating to himself the
value of the six hours of labour for which he does not pay the
workmen. Marx repeatedly recognises the truth of the economic
law that " the value of commodities tends to diminish as the
amount of the product per unit of labour-cost increases." But it
is an obvious and necessary inference from it that the capitalist
would not, and could not, appropriate the value of the labour
which he did not pay for ; that the three shillings of which he
sought to rob each labourer daily would not stay in his own
pocket but take to itself wings and fly into the pockets of the
public by reducing the price of commodities three shillings to the
consumer.

The illustrative example by which Marx endeavours to make
perfectly plain to us how " the capitalistic trick " is performed
still remains for consideration. It is fully presented in the
extract on pp. 66-7. As I. have already attempted to refute all
the erroneous principles and suppositions which are expressed or
implied in that extract, I shall now merely set over against it an
extract from an eminent American economist, which contains the
clearest and most conclusive exposure of it that has come under
my notice.

Mr. Gunton Avrites thus :

"In demonstrating the operation of the law of economic value, Marx
first manufactures 10 lbs. of cotton yarn, in which the cost of the different
factors consumed is stated as follows :

Cost of raw cotton . . . . . , los.
Cost of wear and tear of machinery. . . 2s.
Cost of labour power 3.S.



Total cost 15,5.

" Marx then tells us the same amount of labour is expended on the
production of 15s. in gold, so that the 10 lbs. of yarn and the 15.9.
are the exact economic equivalents of each other. To use his own
formula, the case stands thus: 15.S. value of yarn = los. raw cotton +
2.9. machinery + 3.9. labour-power ; and 15.9. is all the capitalist can
get for his yarn, and no surplus value is produced. Marx then pro-
duces for us 20 lbs. of yarn, in the process of producing which a surplus



SOCIALISM AND CAPITAL 193

value of 3.5. is created. He sees, of course, that in producing 20 lbs.
of yarn the raw material consumed and the wear and tear will be twice
as great as in the production of 10 lbs, ; but he discovers that the
labourer lives twenty-four hours on 3.?., and, in the first process, works
only six hours a day to earn the 3s. He now makes him work twelve
hours a day and produce 20 instead of 10 lbs. of yarn. And since the
labourer can live now, as before, on 3.5. a day, he only pays him 3s. for
twelve hours' labour. Accordingly, the results of the second process are
as follows :

Cost of raw cotton 20s.

Cost of wear and tear of machinery. . . 4.9.
Cost of labour power 3.'?.



Total cost 27s.

"Marx assumes that, since the value of 10 lbs. of yarn is 15s., that
of 20 lbs. must be 30s. ; hence 3s. surplus value has been created. To
use his formula, the 'prolonged process' stands thus: 30s. value of
yarn = 20s. raw cotton + 4s. machinery + 3s. labour-power + 3.9. surplus
value. Then, as with a flourish of trumpets, he exclaims : ' The trick
has at last succeeded ; money has been converted into capital.' And
as if to assure us that everything has been done on the square, he adds :
'Every condition of the problem is satisfied, while the laws that regulate

the exchange of commodities have been in no way violated Yet

for ail that, he [the capitalist] draws 3s. more from circulation than he
originally threw into it.'

" If we ask whence came this 3s. surplus value, he promptly replies :
From prolonging the working-day to twelve hours and thereby making
the labour produce 20 instead of 10 lbs. of yarn for the same pay. Now
the trick has surely succeeded, and it almost seems as if the capitalist
had performed it ; but let us look at it once more.

"In the first instance the case stood: 15-9. value of yarn = los. raw
cotton + 2s. machinery + 3s. labour-power. Why was the value of the
yarn just 15-9. ? Because, explains Marx at great length, ' 15s. were
spent in the open market upon the constituent elements of the product,
or (what amounts to the same thing) upon the factors of the labour pro-
cess.' He explicitly tells us that the only reason why the capitalist could
not o-et 16s. or 17s. for his yarn was that only 15s. had been consumed
in its production.

" Now let us look at the 20 lbs. of yarn produced under * the prolonged
process ' in the light of the law Marx has applied to the production of the
10 lbs. Here the cost of the raw material is 20s. ; wear and tear, 49. ;
labour power, 3s. ; total cost, 27s. Therefore, according to the above law,
the total value of the product is 27s. 'Oh no ! ' exclaims Marx, ' that
would give no surplus value.' The cost of the yarn in this case, he admits,
is only 27s., but he insists that its value is 30s. According to Marx, then,

N



194 SOCIALISM

his economic law of value works thus : los. + 2s. + 3.9. cost = 15s. value ;
while 20s. + 4s. + 3s. cost = 30s. value. In other words, 155.= 15s., but
27s. = 30s. Now, by what application of his own law of value, according
to which 15s. cost can only produce 15s. value, can he make 27s. cost
produce 30s. value ? Clearly, if the 20 lbs. of yarn, the production of
which only cost 27s., can have a value of 30s., then by the same law the
10 lbs. of yarn, whose production cost 15s., can have a value of i6s. 6d.
To assume that, while a cost of 1 5s. cannot yield a value of more than
15s., a cost of 27s. can yield a value of 30s., is to violate alike the laws of
logic and the rules of arithmetic ; and this self-contradiction destroys
the whole basis of his theory. Manifestly surplus value was no more
created in the production of the 20 lbs. of yarn than that of 10 lbs. The
3s. here paraded as surplus value is a pure invention of Marx. True,
' the trick has at last succeeded ; ' but it was performed by Marx, and
not by the capitalist. It is obviously a trick of metaphysics, and not of
economics. The only exploitation here revealed is the exploitation of
socialistic credulity, and not of economic labour-power." *

We may now consider ourselves entitled to reject in toto that
portion of the teaching of Marx in " Capital," which claims to be
theory or science. It fulfils none of its promises, justifies none
of its pretensions, and is, indeed, regarded from a scientific point
of view, the greatest failure which can be found in the whole
history of economics. No man with an intellect so vigorous, and
who had read and thought so much on economic subjects, has
erred so completely, so extravagantly, as to the fundamental
principles and laws of economic science. The only discovery
which he has made is that of "a mare's nest." His pretended
demonstration is not a logical chain of established truths, but a
rope of metaphysical cobwebs thrown around arbitrary suppo-
sitions.

And the cause of his failure is obvious. Passion is a bad
counsellor. And the soul of Marx was filled with passion ; with
party hate ; with personal animosities ; with revolutionary ambi-
tion. His interest in economics was neither that of the scientist
nor of the philanthropist, but of the political and social agitator ;
and he put forth his strength entirely in manipulating it into an
instrument of agitation. That was the chief source of such
success as he obtained. There was wide discontent. He framed

* George Gunton, " Economic Basis of Socialism," in the Political 6'cience
Quarterly, vol. iv., 1889, pp. 568-71.



SOCIALISM AND CAPITAL 195

a doctrine with a view to justify and inflame it. He taught
masses of men just what they were anxious to believe ; and hence
they believed him.

That portion of the treatise of Marx which deals with the
eflfects of capitalist production is, on the other hand, of very con-
siderable value. It is also the fullest expression of what was
best in his nature, his sympathy with the poor; a sympathy
which, although by no means pure, was undoubtedly sincere and
intense. The large manufacturing system during the first fifty
years of its history in this country was enormously productive,
not only of wealth, but of misery, of vice, of human degradation.
The glitter of the riches which it created so dazzled the eyes of
the vast majority of men that they were blind to the disorgani-
sation, the oppression, the abominations, which it covered. The
most honest and intelligent persons took far too rosy a view of
it, or, at the most, timidly apologised for practices which they
should have felt to be intolerable. But the reaction at length
came. The struggles of the victims of the system made them-
selves felt, and their cries awakened the slumbering conscience of
the nation. The claims of justice and of humanity found per-
sistent and persuasive advocates. Careful investigations were
instituted, and important reforms initiated.

In the transition period, when the first era of the large
manufacturing system, the era of lawless individualistic enter-
prise, the era of anarchy, had given place to its second era, the
era of regulated development, of incipient but growing organisa-
tion, Marx, by his woi-k on " Capital," and his friend Engels, by
his book on the " Condition of the Working Classes in England
in 1844," did excellent service by concentrating as it were into
these foci the light which parliamentary inquiries had elicited as
to the evils of a capitalism allowed to trample on physiological
and moral laws ; and causing it thence to radiate over the world.
It is true, indeed, that Marx, in that portion of his work to
which I refer, continually confounds merely incidental with
necessary consequences. Still the evils which he so vigorously
describes and assails were mostly real consequences; and his
exposure of them must have helped to destroy them, and to
render their return impossible.

On the inferences which he has drawn from his doctrine, and



196 SOCIALISM

Avhich I have already stated on pp. 67—8, my remarks will be very
brief.

1. The charge which Marx brings against the capitalist, of
striving to approjiriate more and more of the productive power
of labour by lengthening the labour day is, of course, one in
which there is a considerable measure of truth. All that he
blames the capitalist for having done with this intent he shows
from unexceptionable authorities that the capitalist had actually
done. Unquestionably the desire of the capitalist to extend as
much as he can the labour day is one against which labourers do
well to be on their guard, and which they are justified in
endeavouring to thwart whenever it demands what is unreason-
able. Experience proves that with prudence, firmness, and
union, they can do so ; and that Marx was quite mistaken in
thinking that the capitalist must be successful in his attempts to
overstep " the moral and even the merely physical maximum
bounds of the working day." Machinery has not helped the
capitalist to attain that end. For a time, indeed, when social
continuity was violently disrupted and industry largely dis-
organised by its sudden and rapid introduction, it seemed as if it
would do so ; but it has had, in reality, a contrary efiect. Owing
to condensing population within narrow circuits, and associating
intelligences and forces, the large manufacturing system is just
what has rendered possible the rise and growth of powerful
trade unions, and has transferred political power from the hands
of employers to those of the employed. Hence there has been
within the last thirty years, and especially in large industries, a
notable shortening of the working day. At the present time the
average working week consists of not more than fifty hours.
Thus already workmen have very generally as much leisure time
as labour time. The labour time will doubtless be still further
abbreviated, and for all classes of workmen. When this takes
place, what is even now a very important qvxestion for workmen,
that as to the right use of their leisure time, will become the
chief question.

2. The charge that the capitalist contrives by the aid of
machinery so to intensify labour as to compensate him for any
loss incurred by shortening its duration, is also not without a
certain amount of truth. Labour may be excessive without



SOCIALISM AND CAPITAL 197

being prolonged. Hard running for four hours may be more
exhausting than steady walking during twelve hours. Marx had
no difficulty in showing from the testimony of factory inspectoi'S
and other authorities, that manufacturers managed, after the
passage of the Factory Acts, to get their operatives to compress
the work of twelve hours into less than ten, and to labour at a
rate which ruined their health and shortened their lives. It is
very probable that there may still be industries in which labour
is carried on at an excessively rapid pace, and where consequently
the labourers are overdriven, although they may have nothing to
complain of as regards the mere length of their working day. But
this also can be checked and prevented. It is no more out of the
power of the workmen, or beyond the province of legislation, to
put a stop to the excessive intensification than to the undue pro-
longation of labour. There can be no reasonable doubt that, on
the whole, machinery has lightened as well as shortened labour.
The heaviest labour which men perform is that which they
execute by the exertion of their muscles and members without
any aid from machinery. J. S. Mill has said : ** It is question-
able if all the mechanical inventions yet made have lightened the
clay's toil of any human being." It seems to me that there can
be no question at all that mechanical inventions have lightened
the day's toil of millions of human beings ; although in many
cases where they ought to have done so they have not, owing to
human greed and perversity.

3. Marx touched a very sore point in the capitalist and manu-
facturing svstem when he dwelt on the extent to which it had
appropriated the labour-power of women and children. It had
been allowed to do so to the most monstrous extent. Parents
sold the laboui'-power of children of six years of age to masters
who forced these children to toil from five in the morning to
eight in the evening ; and British law treated the criminals, for
whom no punishment in the statute-book would have been too
severe, as innocent — treated such unnatural and abominable
oppression and slavery as a part of British liberty. Married
women, tempted by their insensate avarice or, perhaps, constrained
by drunken, lazy, brutal husbands, were permitted, without being
in any way restrained or discouraged, to engage in employments
which necessarily involved the neglect of their children and house-



198 SOCIALISM

holds, and the sacrifice of all the ends for which the family has
been instituted. Certainly these things ought not to have been.
And such things are not only not necessary, but tend to the
impoverishment, enfeeblement, and decay of nations, and to the
injury of all classes in a nation. Nor are they essential to the
capitalist and manufacturing system ; they are only evils inci-
' dental to it, and especially to the initial and anarchical stage of
its history. They have already been largely got rid of. The
influence of the system, in virtue of the increased demand which
it makes for female industry, far from being exclusively evil, is,
on the whole, most beneficial. While it is undesirable that
married women should become, otherwise than in exceptional
circumstances, labourers for wages, it is greatly to be wished
that all well-conducted unmarried women of the working class
should be able to maintain themselves in honest independence by
finding employment in whatever occupations are suited to them.

4. Marx attached great importance to his doctrine of the
formation under the capitalist system of an indvistrial reserve
army. He rejected Lassalle's " iron law ; " but he believed that
he had himself discovered a law harder than iron, one which
*' rivets the labourer to capital more firmly than the wedges of
"Vulcan did Prometheus to the rock." He controverted with
extreme superciliousness, and, it must be added, with equal
superficiality, the Malthusian theory, but maintained the
practical conclusion generally, although erroneously, inferred
from it by Malthusians. Without mentioning Dr. Sadler, he



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