Today we begin the discussions of the work of two British Ricardian socialists. In many senses the name is a complete misnomer, as some of these authors are not strictly Ricardian, while others are not socialists, but actually anarchists. Their ideas had not a small amount of influence in their time, as William Thompson was a leader in the co-operativist movement (and took over when Owen went to the US for a period) and Hodgskin’s work provided the ideological framework for the National Union of the Working Class and he was a founder of the London Mechanics Institute (where he also taught). Both of their arguments appeared in the unstamped press of the working class of the period. Their arguments and influence were so disconcerting to the emergent middle classes and the upper class of then contemporary Britain that political economists of the period actually revised economic theory in response to their ideas and the rising influence of the radicalised working class movements that were mobilising at the time.
The name Ricardian socialists is applied to a group of authors holding different political positions. The name probably was coined by H.S. Foxwell (1899) in his "Introduction" to Anton Menger (1886) Right to the Whole Produce of Labour: The Origin and Development of the Theory of Labour's Claim to the Whole Product of Industry. This attribution was later given credence, although partially, by Loewenthal (1911). The derivation from Ricardo was re-affirmed by Beer (1929), Schumpeter (1954), and Meek (1950, 1967). Much of the debate concerning the writings of the Ricardian socialists centres on whether they are actually Ricardian, Smithian (N. Thompson, E.K. Hunt), Classical (Ginzburg), Lockean (Claeys), but not whether the appellation socialist is accurate.
The authors nominally considered Ricardian socialists can be divided under two headings based upon political orientation. William Thompson, John Gray and J.F. Bray were socialists or co-operativists, while Thomas Hodgskin and Piercy Ravenstone were anarchists.
Although these authors differ in political orientation, their commonality stems from their attempt to develop a criticism of the capitalist system using the tools of classical political economy. In doing so, they attempt to place the exploitation of the working class within the domain of the economic system, rather than within the spheres of politics and ethics as found in earlier criticisms against the system such as those of Henry Hunt and William Cobbett [see Hollis (1970) and N. Thompson (1984)]. Commentators agree that these authors believed the exploitation of the workers derives from their not obtaining the whole produce of their labour.
Choosing one author from each political camp (and given that Marx addressed Bray substantially in the Poverty of Philosophy, I am going to solely examine the work of Thomas Hodgskin and William Thompson, both of whose work I find particularly interesting not only in their historical influence, but in the fact that in many ways their ideas were a precursor to that of Marx.
Today, I am going to discuss the argument of the right of workers to the whole of the product and to try and trace the origins of the argument. I will separate the arguments of each author and will begin with Hodgskin as he has an extremely interesting discussion of land and capital which I think will be sufficient for this diary.
I am on holiday next week, but will resume the following week and discuss Thompson’s argument on this question. I will then begin their position on the determination of prices and distribution and the exploitation of the working class and the manner in which it occurs and is realised in a capitalist society.
The Right of the Workers to the Whole of their Product
Thomas Hodgskin:
Natural Right of Property
John Locke
It can be argued that the choice of labour as the source of value had its basis in Locke's notion of the natural right of property. Succinctly, Locke's argument of the "natural right of property" held that it is human labour which ensured the production of things, as such, they were the property of whomever created them. This right of property gave the creator the right to use it as he saw fit, exchanging whatever was not required for immediate subsistence for other commodities, based upon how much labour was endowed in its production. The notion of the right of ownership of one's own product -- what has been termed the natural right of property -- can be found in "The Second Treatise" in John Locke's Two Treatises of Government.
Locke's argument of the right of the producer to the ownership of his product as a "natural right" began with his statement that each individual has the sole and exclusive ownership of his own person. Locke generalised this notion stating that whatever derived from the use of the individual's own person by natural law also belonged to him.
Though the Earth and all inferior Creatures be common to all Men, yet every Man has a Property in his own Person. This no Body has any Right to but himself. The Labour of his Body, and the Work of his Hands, we may say, are properly his. Whatsoever then he removes out of the State that Nature hath provided, and left it in, he hath mixed his Labour with, and joyned to it something that is his own, and thereby makes it his Property (Locke, 1689, pp. 328-9).
Locke was also the first to articulate the notion that labour used in the production of a commodity created use value in the context of the capitalist economic system. He argued that land lying fallow created no value. However, when labour was applied to this land, value was created in the form of commodities.
'Tis Labour then which puts the greatest part of Value upon Land, without which it [land] would scarcely be worth anything; 'tis to that we owe the greatest part of all its useful Products: for all that the Straw, Bran, Bread, of that Acre of Wheat, is worth more than the Product of an Acre of as good Land, which lies waste, is all the effect of Labour (Locke, 1690, p. 340).
Locke's argument specifically is concerned with the creation of use values or wealth, it does not apply to the notion of the creation of exchange values or of the value of the surplus product, which was the case in the works of the classical economists (e.g., Smith, Ricardo, Hodgskin and Thompson and Marx). Although Locke argued that the surplus created by individuals could be exchanged in relation to the quantity of labour used in production, this does not represent a developed theory of value.
Hodgskin
Hodgskin appealed to Locke's theory to support his conclusions respecting the right of the worker to the whole of the produce; in many senses Hodgskin can be argued to be a radical Lockean. He argued that the natural right of property was subverted by artificial laws established by governments, without legislators understanding the historical basis for the formation of property. That this was the notion underlying the argument of the right of the workers to the whole produce can be found in Hodgskin's work, The Natural and Artificial Right of Property Contrasted (1832). In this work, Hodgskin defended the notion of the natural right of property as historically universal. He then utilised this concept to demonstrate the workers's right to the whole produce.
Hodgskin attempted to link the argument that labour is necessary for the production of all commodities to the "historical" explanation of the development of the natural right of property advocated by Locke.
There is then, I conclude, a natural right of property, founded on the fact that labour is necessary to produce whatever bears the name of wealth, which right of property exists, with all its consequences, like the principles from which it flows, at all times and places (Hodgskin, 1832, p. 40).
Finally, Hodgskin related this work to his economic writings. He argued that the laws of distribution advocated by political economists were not based on the natural right of property, but on the legal or artificial right of property. He further contended that government legislation was creating and justifying these new forms of property relations, which deviated from and supplanted the natural right of property.
I may mention, that the whole doctrines of the distribution of wealth, embracing all that can be said about rent, profit, and wages, depend altogether on the right of property. I defy any man to explain either of these without assuming, as the basis of his argument, the present legal right of property, and I am sure that no man can be acquainted with the modern doctrines on these subjects, without being thoroughly sensible, that, by assuming the present legal right of property to be the natural right, the whole of these doctrines are founded on a false basis, and give a false notion of the natural laws which regulate the progress of society (Hodgskin, 1832, p. 171).
Hodgskin was clearly concerned with establishing the basis of exploitation. It was upon the notion of the natural right of property combined with the argument that labour was the sole source of value, that he derived his theory of distribution and exploitation.
The Labour Source of Value
Let’s look at Hodgskin’s view demonstrating the right of the workers to the whole product by his argument that it is only labour that is productive of value, and that land and capital, in an of themselves neither are responsible for the creation of a surplus product nor ensure that commodities are produced and brought to market for the purpose of sale.
A. Land is not Productive of Value
In the letter to Francis Place (reprinted in Halevy’s biography of Hodgskin), Hodgskin asserted two general criticisms of Ricardo. The first criticism concerned Ricardo's theory of rent and we will examine it now. The second criticism concerned his theory of value and distribution and will be discussed in the section on Hodgskin and the determination of exchange value.
Hodgskin's first two criticisms of Ricardo's theory of rent were ideological and ethical. Hodgskin first accused Ricardo of theoretically justifying the status quo, as Ricardo argued that rent was a natural phenomenon based on the differing fertilities of the soil. According to Hodgskin, this was not the correct foundation of rent, which he believed derived from the landlords’ historical appropriation of land (Halevy, 1956, p. 67). Hodgskin's second criticism had two parts and was concerned with the ethical implications of Ricardo's theory of rent. He criticised Ricardo's falling rate of profit argument based on diminishing fertility on the margin of cultivation. Hodgskin's criticism was an ethical one, arguing that the theory of rent limited the progress of mankind on natural grounds (Halevy, 1956, p. 67).
Hodgskin's more substantial criticism, influencing Marx, was that Ricardo ignored the historical basis for the existence of rent. Hodgskin saw this as deriving from the "monopoly" ownership of the land, and advanced a notion of "absolute rent." It is important to note that Hodgskin did not deny the existence of differential rent, just that the historical basis for the existence of rent did not lie in the differing fertilities of the soil.
More importantly, Hodgskin argued that land, on its own, had "no original and indestructible powers," its productive power deriving solely from human labour. This was an essential part of Hodgskin's maintenance of the notion that labour was the sole source of the value of the surplus product. This clearly foreshadowed his later writings on the question of capital. It also underlies his criticism of the justifications of political economist's concerning the right of the capitalists to profits. Hodgskin stated that land did not create value, its productive ability derived only from the fact that human labour was applied to it.
I deny that Rent originated in this difference of soil and [...] is nothing but the difference between the produce of equal quantities of capital employed on soils of different powers of production. [...] This shews clearly as you say that some lands paying rent have no original and indestructible powers, but I [...] extend this to all land and affirm that it is human labour which makes any soil productive, and that it is from land-lords having originally monopolised the labour of their slaves that rent is now paid in Europe. [...] Independent of human labour there is no original indestructible power of the soil (Halevy, 1956, pp. 68-9, my italics).
B. Hodgskin’s Theory of Capital
Hodgskin's primary concern was the illustration of exploitation in capitalism. He began by undermining what he viewed as political economists' justifications for profits. His acceptance of the natural right of property, the classical theory of distribution, and the labour source of value led him to prove that capital was unproductive of value, i.e., it cannot produce the value of the surplus product. He demonstrated that the qualities attributed to capital by political economists actually derive from labour. If Hodgskin could prove this, given the notion of the natural right of property, then the worker would be entitled to the whole value of his labour.
In Labour Defended Against the Claims of Capital (1825), Hodgskin examined the qualities attributed to capital by political economists, such as Ricardo, Mill and McCulloch. He attempted to show that neither the capitalist, nor his command over capital, enabled the creation of exchange value. Rather, it was the labourers who ensured that production occurred.
Hodgskin first considered circulating capital and then fixed capital. However, in this context, "circulating capital" actually denoted only those commodities which will form the wage basket of the workers. Hodgskin is ignoring raw and auxiliary materials in this discussion and as such this term is different from how it is employed by Marx, it would be equivalent to Marx’s notion of variable capital. He attempted to show that circulating capital was not a store of commodities held by capitalists. This form of capital exists because the division of labour required workers to concentrate on the production of a small part of each commodity.
To enable the master manufacturer or the labourer to devote himself to any particular occupation, it is only necessary that he should possess - not, as political economists say, a stock of commodities, or circulating capital, but a conviction that while he is labouring at the particular occupation the things which he does not produce himself will be provided for him, and that he will be able to procure them and pay for them out of the produce of his labour. This conviction arises, in the first instance, without any reflection from habit (Hodgskin, 1825, p. 45).
Hodgskin argued that circulating capital was actually the result of what he termed co-existing labour. It was the knowledge that there was an ongoing production of necessities which permitted the division of labour and production to continue (Hodgskin, 1825, p. 38). Co-existing labour was ultimately the creator, as well as the result, of the division of labour.
Hodgskin held that fixed capital increased the productivity and efficiency of the workers. This enabled them to decrease the amount of labour time required to produce commodities. However, the existence of fixed capital did not derive from the capitalist saving, or storing up, previous labour. According to Hodgskin, it existed because the workers took the time to develop the knowledge and skill requisite to produce means of production.
The productivity of fixed capital derived neither from the fact that it was labour accumulated by the capitalist, nor from its possession by the capitalist. On the contrary, its productivity derived from, and was continually augmented by, the labourers who produced these means of production through the further development of their knowledge and skill. He argued that inventions and alterations in technology were actually invented on the shop floor by workers deriving from their accumulation of skill and knowledge.
The degree and nature of the utility of both species of capital is perfectly different and distinct. The labourer subsists on what is called circulating capital; he works with fixed capital. But equal quantities or equal values of both these species of capital bring their owner precisely the same amount of profit. We may, from this single circumstance, be quite sure that the share claimed by the capitalist for the use of fixed capital is not derived from the instruments increasing the efficiency of labour, or from the utility of these instruments; and profit is derived in both cases from the power which the capitalist has over the labourer who consumes the circulating, and who uses the fixed, capital (Hodgskin, 1825, p. 70).
Hodgskin maintained that the capitalist's right of profit was unjustified upon consideration of their role and capital's role in the production process. Hodgskin's argument strongly affirmed the notion of a labour source of value. This notion underpinned his doctrine of the right of the workers to the whole product. Hodgskin's argument implies the expropriation of property from the capitalists and landlords, their ownership being contrary to natural law.
Interestingly, even on this site, the ideas of the Ricardian socialists are still used in the calls for the right of the workers to the whole of the product. I would argue that the context of the claim and the justification for the claim, as well as much of the economic arguments of the period are literally lost in the pages of history. The fact that this call is still heard in this day and age brings some comfort to the heart of this progressive historian of economic thought just as it did to workers and working class organisers of the period.
Suggested Readings
Claeys, Gregory. (1987) Machinery, Money and the Millennium: From Moral Economy to Socialism, 1815-1860, Princeton, NJ: Princeton University Press.
Dobb, Maurice. (1973) Theories of Value and Distribution Since Adam Smith, Cambridge: Cambridge University Press.
Ginzburg, Andrea. (1987) "The Ricardian Socialists," in The New Palgrave: A Dictionary of Economics, Volume 4, London: MacMillan Press, Ltd., pp. 179-83.
Halevy, E. (1956) Thomas Hodgskin, translated with an introduction by A.J. Taylor, London: Benn.
Hodgskin, Thomas. (1825) Labour Defended Against the Claims of Capital, with an introduction by G.D.H. Cole, New York: A.M. Kelley Publishers, 1963.
Hodgskin, Thomas. (1832) The Natural and Artificial Rights of Property Contrasted, Clifton N.J.: Augustus M. Kelley Publishers, 1973.
Hodgskin, Thomas. (1827) Popular Political Economy, New York: A.M. Kelley Publishers, 1966.
Hollis, Patricia. (1970) The Pauper Press: a Study in Working-Class Radicalism of 1830's, Oxford University Press.
Locke, John (1698) Two Treatises of Government, Cambridge University Press, 1960.
Marx, Karl (1847) The Poverty of Philosophy, International Publishers, 1982.
Thompson, Noel, W. (1984) The People's Science: The Popular Political Economy of Exploitation and Crisis 1816-34, Cambridge: Cambridge University Press.