Ricardian Socialists
This page will be based on J E King (1983).
King starts by claiming that early radical economists were a third important influence on Marx’s thought, in addition to classical political economy and to the philosophy of Hegel.
The early English Ricardian Socialists, he says are usually dismissed as utopians or are just ignored. But King argues that they were in fact an important, but neglected influence on the thought of Karl Marx.
King then looks briefly at previous versions of Ricardian socialists, but he suggests – for his text – the following definition of Ricardian Socialists, that might have been given by Marx himself. It is a broad definition as follows,
‘All British and Irish writers can be regarded as Ricardian Socialists, who were hostile to capitalism, and who were sympathetic to the working class, and were prominent enough in the debates of the 1820’s or the 1830’s to have been noticed by Marx.’
The definition excludes all continental writers, and avoids certain terminological problems that are important in their own in their own right – but are of secondary importance to King’s purpose.
Given that definition, the list of qualifying writers is as follows,
‘John Francis Bray, John Gray, Thomas Hodgskin, William Thompson, the anonymous Piercy Ravenstone, Thomas Rowe Edmonds, Charles Hall (who wrote in 1805) and – on the fringe – Robert Owen.’
King notes that not all of them were Ricardian in any important way, and that some of them were Socialists in only a very approximate way. But the label has become established and it is too late to try to change it.
King adds that most of the Ricardians argued that the whole produce of workers should go to them, based on john Locke’s doctrine of natural right, as well as on Bentham’s utilitarian concerns. As a result they saw capitalism as dishonest and unjust, and their ideas of exploitation were base on moral arguments; and their ideas of socialism were little more than a demand for justice.
But Marx and his followers could see that the Ricardians were unable to make a proper analysis of capitalism or of its laws of value and its need of accumulation; and that they could not see that socialism must be based on the laws and development of capitalism.
King’s article is structured in the following way,
First the Marxian criticisms of their approaches are described.
Secondly it is shown that some of them were close to the Marxian view of capitalist production through surplus value.
Thirdly it is shown that some were close to elaborating a theory of history’, that was similar to Marx’s own version.
Finally it is revealed that Marx’s view of the Ricardians grew as time passed on.
Criticisms of the Ricardian Socialists
King begins by pointing out that the Ricardians saw that explanations of exploitation drew on Adam Smith.
Smith argued that labour was the only source of value, but pointed to the gap between labour embodied in a commodity and the labour commanded by the commodity in exchange.
Thus Thomas Hodgskin wrote that that the going price of price of a commodity was enhanced by ‘regulations and exactions’ such that the social price exceeded the natural (or labour value) price; and that this difference was the source of profit.
King noted that this view was not untypical of the Ricardians as a whole. In support of this view he listed a few comments from other Ricardians (348), as follows
William Thompson spoke of “the cupidity of force and fraud”.
John Bray argued about “barefaced though legalised robbery (of) a fraudulent system of unequal exchanges”.
Ravenstone felt this “capitalists are a species of vermin not easily shaken off”, and that the national debt was “a bloated and putrid mass of corruption wholly made up of fraud, of peculation, and of jobs”.
Charles Hall had this to say in 1805, he asserted the right to the whole produce of labour in terms of utility, the will of God, and the “clear, natural rights of man”.
John Gray in 1825 said “But while we acquit the man, we condemn the system, and say of it, ‘that its foundation stone is INJUSTICE”.
Even Hodgskin (normally less lurid) in1827 denounced the lack of benefit to workers from the division of labour which “must arise from unjust appropriation; from usurpation and plunder in the party enriched, and from consenting submission in the party impoverished”.
If this was all they had to say, then their influence over Marx would be small.
King reproduces a long extract from Engels in Anti-Duhring, written in 1878, from which a few extracts are reproduced here,
“The socialism of earlier days certainly criticised the existing capitalistic mode of production and its consequences. But it could not explain them, and, therefore, could not get the mastery of them. It could only simply reject them as bad. The more strongly this earlier socialism denounced the exploitation of the working class, inevitable under capitalism, the less able was it clearly to show in what this exploitation consisted and how it arose.”
Engels then argues that,
“for this it was necessary to present the capitalistic method of production in its historical connection and its inevitableness during a particular historical period, and therefore, also, to present its inevitable downfall; and to lay bare its essential character, which was still a secret. This was done by the discovery of surplus value. It was shown that the appropriation of unpaid labour is the basis of the capitalist mode of production and of the exploitation of the worker that occurs under it.”
He adds,
“even if the capitalist buys the labour power of his labourer at its full value as a commodity on the market, he yet extracts more value from it than he paid for; and that in the ultimate analysis this surplus value forms those sums of value from which are heaped up the constantly increasing masses of capital in the hands of the possessing classes”
He ends by saying that Marx explained both the genesis of capitalism and the production of capital, and with these discoveries of the materialist conception of history and the secret of capitalist production via surplus value, socialism became a science.
So for Marx and Engels the Ricardian socialists could see that capitalism was bad for the working class, and it built up the wealth of the capitalists, leaving the workers in near poverty; but the Ricardians were unable to analyse capitalism to see how the bad results were generated.
But in section 2 of his essay King (348) says that it will be seen that,
“ the Ricardian Socialists were closer to “the revelation of the secret of capitalistic production through surplus value” than Engels allowed.
He starts by pointing out that the Ricardians views on exploitation drew on Adam Smith’s views. Smith had stated that human labour was the only source of value, and he insisted on the significance of the gap between the labour embodied in a commodity and the larger labour commanded by the commodity in market exchange.
These elements in Smith’s thinking pointed towards the view that it was surplus labour of the workers that produced the larger labour commanded in the market; and that it was the surplus labour of the workers that was the source of the capitalist’s profit and of rent, interest and other non wage incomes.
Of this Marx (1963, 80) noted that Smith had recognised the true origin of Surplus value.
But Smith wavered and seeing that labour embodied and commanded differed argued that the labour theory of value did not apply to the new capitalist economy. Instead he favoured a cost of production (or adding up) theory that saw wages, rent and profits as returns from labour, land and capital. King adds that Smith could be seen as a forerunner of what Marx termed ‘vulgar economists’ who closed their eyes to anything anti-capitalist (349).
The Ricardians, however, says King (349), were preoccupied with unequal exchange because Adam Smith had found problems with the law of value to be inherent in the capitalist market system.
So Thomas Hodgskin wrote,
“Labour was the original, is now and ever will be the only purchase money in dealing with Nature” and “There is another description of price, to which I shall give the name of social, it is natural price enhanced by social regulation”.
King adds (349),
“The “restrictions and exactions” imposed by capitalist institutions ensured that the social price of a commodity invariably exceeded its natural price (or labour value), and it was this difference between price and value which provided the capitalist’s profits.”
This view was held by most of the Ricardians; and so they thought that profits were sourced by the addition of these regulations that increased the market price of commodities when sold.
King then adds (350) that another analysis by the Ricardians, foreshadows Marx, and sees that profit is to be found in surplus labour by the workers. He then adds that the clearest view of this was also the earliest by Charles Hall.
Hall argued that of a total national output of £312 million, the working class only received £40 million. Assuming this to be true, 8 tenths of the population consume only 1 eighth of the produce of their labour; so one day in eight, or one hour a day is all the worker is allowed for himself and his family. All the other hours and days got the capitalist employer.
A later anonymous pamphleteer (also 350), quoted by Marx, wrote,
“Whatever may be due to the capitalist, he can only receive the surplus labour of the labourer; for the labourer must live . . . the interest paid to the capitalists, whether in the nature of rents, interests of money, or profits of trade, is paid out of the labour of others”
King (350) then describes Ravenstone’s comments. Although Ravenstone called ‘Rent’ what the pamphleteer called ‘Interest’. Their views are otherwise identical,
“Rent, then, may be defined as the idle man’s share of the industrious man’s earnings”
“The fund for the maintenance of the idle is the surplus produce of the labour of the industrious”
There are “two distinct classes of men – those who labour, and those whose means of subsistence are derived from the labour of others”
“Anciently one man’s labour was sufficient to maintain two families; in France it is sufficient to maintain more than three. In England it is equivalent to the subsistence of five”
William Thompson is quoted similarly (350 -351),
How can capital be valued “in the shape of machinery, materials, etc.,”
“For the labourer, only depreciation and wages for the labour of the owner are relevant.”
The employer, however, will demand “the additional value produced by the same quantity of labour in consequence of the use of the machinery or other capital; the whole of such surplus value to be enjoyed by the capitalist”
Note the use of ‘surplus value’.
Thomson also argued that,
“The materials, the buildings, the machinery, the wages, can add nothing to their own value. The additional value proceeds from labour alone.”
- R. Edmonds had this to say,
“I have already shown that on the supposition of an equal division of labour, every man (an employee)would be required to work the third part of the year, or the third part of every day, in order to supply his family with the necessaries of life.”
On the other hand,
“If a man (the employer), besides getting the necessaries of life without labour, gets also domestic services, fine clothes, furniture etc., some other man must have his daily portion of labour still farther increased”
King adds that this is Marx’s distinction between necessary and surplus labour in all but name.
To make this clearer David Harvey (2010, page 123 to 124), explains that an employee will only need to work, let us say half a day’s labour, necessary to reach the labour power to match the value of the commodities required to provide him with a certain standard of living. But he has to work the other half of the day, in which he creates the surplus value that goes to his employer.
Edmonds elsewhere described the surplus product thus,
“The total revenue of any country, is the difference between whole of the necessaries produced, and that part of these necessaries consumed by the labourers who produced these necessaries. Rents, profits, tithes and taxes, are the instruments by which the revenue is distributed”
He did not use terms like ‘surplus labour,’ ‘surplus value,’ and ‘surplus product ‘; but he is clearly describing these Marxian concepts in his arguments (352).
The other Ricardians expressed similar arguments , but with different estimates (352 to 355). Intuitively they were all trying to articulate the significance of surplus labour and surplus value, even though those terms had not then been established.
John Gray. Wrote that,
“Every unproductive member of society is a DIRECT TAX upon the productive classes. The latter receive but a small trifle more than ONE-FIFTH PART OF THE PRODUCE OF THEIR OWN LABOUR! ! !”
John Bray stated that,
“under the present system, every working man gives to an employer at least six days’ labour for an equivalent worth only four or five days’ labour”,
Also
“the workmen have given the capitalist the labour of a whole year, in exchange for the value of only half a year”
He asserted too that,
“capitalists shall continue to be capitalists, and working men be working men – the one a class of tyrants and the other a class of slaves-to eternity”
“It all amounts to this, that the working class perform their own labour, and support themselves, and likewise perform the labour of the capitalist, and maintain him into the bargain!”
Many of them too, tried to calculate the rate of exploitation, the ratio of surplus to necessary labour, as follows,
Hall calculated this at 700 percent.
Ravenstone thought it was 400 percent
Edmonds felt it was 200 percent
Gray one one occasion calculated it to 400 percent
Bray calculated a number of figures, 20, 40 and 100 percent.
T.R. Edmonds outlined the conditions of the labouring classes,
“I have already shown that ….. every man would be required to work the third part of the year, or the third part of every day, in order to supply his family with the necessaries of life.”
He adds that some other man who does not work receives the proceeds of the other two thirds of the workmans labour, and with it gets domestic services, fine clothes and furniture etc.
To the above varying estimates for the Ricardians, King point out (353) that they hadn’t managed to approach a coherent theory of value. He then examines the Ricardians against the four headings under which Marx listed the failings of classical economists; these were, Wages, Capital, Competition and Rent.
Marx’s solution to the problem of wages goes like this (353); labour, a human activity, is not a commodity and therefore has no value. But the capacity to labour, named by Marx as labour power which the capitalist buys from the worker, and labour power is a commodity.
Labour power is bought and sold at its value and no unequal exchange occurs. But by getting the worker to work longer hours, for example, the capitalist can extract surplus labour and surplus value from the worker; in short the use value of labour power exceeds its value.
Marx solved the first problem with his theory of wages, which recognised that labour, as a human activity, is not a commodity and therefore has no value. It is the commodity that he termed labour power, or the capacity to labour, which the capitalist buys from the worker. In competitive capitalism this commodity is bought and sold at its value, so that no unequal exchange is involved. Surplus labour is nonetheless extracted from the worker, for the use value of labour power exceeds its value.
But some of the Ricardians got close to this solution (354). Hodgskin, drew Marx’s praise, when he wrote that labour is not a commodity, but it was instead the creator of all wealth.
Similarly Bray noted,
“No man possesses any natural or inherent wealth within himself-he has merely a capability of labouring”
And Thompson wrote,
“But as long as the labourer stands in society divested of everything but the mere power of producing, so long will he remain deprived of almost all the products of his labour, instead of having the use of all of them.”
King then finds [also on 354) Ricardian views on Capital, that are also close to Marx,
Charles Hall defined wealth, which king assumes he meant Capital, as
“the possession of that which gives power over, and commands the labour of man: it is, therefore, power, and into that, and that only, ultimately resolvable”
Hall added that ‘chattels’ were only a harmless heap that gave no power to the owner; and ‘incorporeal property’ power over the future labour of the poor.
Ravenstone viewed Capital as,
“only a transfer of the earnings of the industrious to the idle”
Hodgskin’s concept of Capital, where he said that the exchange of commodities simultaneously involves and disguises an exchange of labour, is said to have influenced Marx, and the early chapters of Capital. It was also taken up by Bray and Edmonds.
William Thompson advocated the free and voluntary exchange of labour being understood simply as support for simple commodity production or ‘market socialism’.
King finishes this section (355) by quoting Hodgskin where he seems to be the first to discover what Marx later named the ‘fetishism of commodities’,
“. . . the language commonly in use is so palpably wrong, leading to many mistakes, that I cannot pass it by altogether in silence. We speak, for example, in a vague manner, of a windmill grinding corn, and of steam engines doing the work of several millions of people.
This gives a very incorrect view of the phenomena. It is not the instruments which grind corn, and spin cotton, but the labour of those who make, and the labour of those who use them. . . . The fact is, that the enlightened skill of the different classes of workmen alluded to, comes to be substituted in the natural progress of society, for less skilful labour. . . . By the common mode of speaking, the productive power of this skill is attributed to its visible products, the instruments, the mere owners of which, who neither make nor use them, imagine themselves to be very productive persons“
Another similar quote by Hodgskin, that King feels (355) it could have come from Marx’s Capital.
“All capital is made and used by man; and by leaving him out of view, and ascribing productive power to capital, we take that as the active cause, which is only the creature of his ingenuity, and the passive servant of his will”
Here King moves on to discuss the Stages of history that various writers displayed.
He begins (357) by showing that some of the Ricardians felt there was a limit to production. Thompson complained about the ‘forced inequalities of wealth’ resulting from restrictions of production. John Gray’s early work talked of overcoming the ‘unnatural limit to Production’ that resulted from competitive capitalism.
Classical economists either denied such limits existed, or blamed them on natural laws. Either way capitalism was regarded by them as the end stage of human history.
This view was reflected in the four stages theory of human society; thus Hunting was followed by Pasturage, followed by Agriculture, ending at Commerce.
This theory (very similar to Adam Smith’s Stages) was attributed to Scottish Sociology and the French enlightenment, with commerce (ie Capitalism) where social evolution came to an end. This view was influential right up to the middle of the nineteenth century.
Socialists of course saw this four stage theory as incomplete as it omitted the fifth stage of Socialsim. Marx rejected the mode of subsistence too, and favoured a theory based on the ‘mode of production’, which emphasised the social relations of production, and allowed a process where each stage came to supercede the previous one.
Marx then came up with these successive modes of production, seen by King as more dynamic and more sociological than the four stage theory (357)
Primitive Communism
Slavery
Feudalism
Capitalism
Communism
King discusses (360) various sources that Marx could have drawn on to come up with his scheme, but Marx himself only recognised James Steuart – who he felt gave much attention to the genesis of Capital – and also Jones – whose 1831 essay showed the characteristic social distinctions between different modes of production.
King also noted (358 and 359) that two of the Ricardians came up with similar stages ahead of Marx. Thompson recognised three systems of industry – the old system of force or slavery, followed by the second system of competition, and a future system of Cooperative Industry where all labourers would become capitalists.
The second was T.R. Edmonds whose system was similar to Thompsons – first was slavery, followed by the money system of competition, followed by the future system of a social system of mutual cooperation and free individuality.
King now changes his focus again (360).
Looking at Ricardo’s theory of rent, and Malthus’s ideas of rising population King says that together a theory of pessimistic and basically conservative economic development could be built, that foretold a ‘stationary state’ with low living conditions and accumulation halted. It would be conservative because all hope of improvement and reform would be curtailed, apart from short run spurts due to free trade.
Most Ricardian Socialists rejected this picture (361).
Thompson called such projections ‘eternal sophism of ignorance’.
Ravenstone argued that no population could double in less than 75 years and that nature could always provide for the size of current population levels; he argued that subsistence could increase geometrically, while labour required to produce it could only increase arithmetically.
Hodgskin argued that population growth encouraged the division of labour and was a mainspring of progress; and he added there was no basis for Ricardo’s theory of diminishing returns in agriculture.
Bray also condemned the pessimistic population principles of Malthus; and Edmonds argued that food production could expand to feed a tenfold increase in population.
King turns again, this time to methodology (362).
The issue is that Political economy saw their doings as driven by ‘immutable laws of nature, invariant in time, space and social structure’.
Marx of course saw political economy as being ‘historically and socially specific’. It seem that the Ricardians fell in with the Marxian position.
Hodgskin wrote,
“I I can never . . join with those Political Economists, who seem ever to be fond of calumniating Nature in order to uphold our reverence for the institutions of man. All the arguments they have urged in justification of their views, seem to be founded on the effects of some social institutions, which they assume to be natural laws”
Similarly Ravenstone took on Malthus,
“Human institutions are the real cause of all the misery with which we are surrounded, and he who in the arrogance of his folly would trace them to any other source, as he renders hopeless all improvement of our condition, is equally an enemy to man whom he oppresses, and to God whom he maligns.”
King finds likewise statements by Charles Hall, Gray and Edmonds. Bray argued that production is not restricted by shortage of materials, by the satiation of wants, not bt faults of the earth, or by faulty labour. It is the social sytem itself that id faulty, he concluded, it misappropriates the earth and misdirects the labour.
Gray wrote (363),
“ Demand depends upon incomes, and incomes are “limited by competition between man and man .
Hodgskin argued that the reason there was no work for half of the workers, was that the other half worked twice as much as they ought. He added that
“The reason why there is no work for one half of our people,” according world markets were over stocked with goods, and labourers are compelled to produce but not allowed to consume them.
Bray said that thousands were starving because they could not work, and the capitalists cannot employ them because they cannot find markets for their produce. All this, he argued, was due to the evils of the present system.
The section ends as follows (364).
The Ricardians blamed the problems of unemployment and starvation on the contradictory nature of capitalist production. They criticised Malthus regarding crises and argued that the historically specific nature of capitalism could not cope.
They saw the great merits of their socialist proposals, where supply and demand would always be commensurate.
Gray continued to blame competition as the limit on production, and Bray wrote that the chains on production is not due to society but waited the bidding of a particular class – and he awaited the introduction of steps towards a communist system.
King changes tack again and looks at Marx’s contacts with the ideas of the Ricardians (364).
He feels that Marx was most likely to have been introduced to their ideas by Engels. If so this was after Marx had started his study of classical political economy.
Engels moved to Manchester in November 1842 and took an interest in the working class and any socialist movements in England, that he compared with German socialists. King is sure that Engels passed books by Bray and the Manchester socialist John Watts to Marx when he was exiled to Brussels over the first half of 1845.
Marx visited Engels for 6 weeks in Manchester in July 1845. Marx studied political economy books in public and private libraries, and at Engels house. The books included works by Thompson, Edmonds and Bray, as well as pamphlets by Cobbet and Owen. But there is no indication that Marx read Ravenstone, Hodgskin or Gray at this time.
King feels the mid 1840’s were formative years for Marx’s political economy, and his knowledge of the Ricardians socialist views helped him in his maturing process regarding political economy. King also repeats Mandel’s suggestion that when Marx returned to Brussels he had more favourable opinions about the labour theory of value (365).
A few years later (365) Marx used work by Hodgskin, Thompson, Edmonds, and Bray, In his ‘Poverty of Philosophy’, to show Proudhon’s lack of originality. In the end Marx was extremely critical of Proudhon, and much less so regarding the Ricardians.
A few more years later Marx was much more approving of the Ricardians when he gave a lecture on ‘Wages’, which became the basis of his ‘Wage Labour and Capital’(1849), where Marx used Bray’s views on savings banks – which he evidently approved of.
Even more significant, in the section ‘Fluctuations of Wages’ dealing with economic crises, the effects on workers and capitalists, which draws heavily on Bray who had made a simple statement regarding the work of Sismondi and Owen. (365 to 366).
By the late 1950’s Marx had a broader and deeper knowledge of the Ricardians views than before. As a result Marx now cited Ravenstone and the Anonymous writer that they had discovered the concept of surplus value. The Ricardians had rejected the apologetic writers that capital created surplus value. (366 to 367).
But generally Marx’s references to the Ricardians in Capital was very cursory (367); Volume 1 contains one extract from Hodgskin and two from Thompson , but both are cited with no comment. There is one reference to Hodgskin in Volume 2. While Gray and Bray are called forerunners of Proudhon. The Anonymous writer is praised for the contribution to the theory of exploitation; and Ravenstone is cited twice’ – once regarding the necessity of large scale production if machinery is to be used, and once on the role of productivity as a necessary condition for a positive rate of exploitation. Hodgskin is praised for his ‘Labour Defended’ called an ‘admirable work’; and also for his recognition that labour itself is not a Commodity.
This relative neglect continues in Volume 1 and 2 of ‘Theories of Surplus Value (368). Hodgskin has two references in volume 1 and only one in volume two; none of the other Ricardians are mentioned. It is also noted that Hodgskin realised that surplus labour was the source of profit, and he was also noted to have an effective refutation of the law of diminishing returns.
The Ricardians are quoted much more in the third Volume. An amazing 85 pages are used to discuss ‘The Source and Remedy’, by Anonymous. This is seen by Marx as an advance on Ricardo’s work, as it sees profit coming from the labour time for which the workers get no pay.
Volume three also has several pages from Ravenstone, more than that from Hodgskin and six pages form Bray.
Ravenstone’s work on exploitation was seen as ‘remarkable’ by Marx. Hodgskins work on the workshop division of labour depending on the broader Social division of labour was also credited. His theory of capital as an ‘idealism’, is compared favourably with the political economists crude view of capital as ‘material fetishism’.
Marx commented that Hodgskin had discovered the ‘fetishism of commodities’ where se sees certain forms of labour are ascribed to objects that are themselves products of labour.
Despite these positive views of the Ricardian’s work, Marx still sees Hodgskin’s and Ravenstone’s analysis of capitalism as incomplete. They recognise the contradiction between labour and capital, but cannot fully understand it – Marx sees this as ‘pure subjective illusion which conceals the deceit and the interests of the exploiting classes (369).
In his final pages (369 and 370) King speculates why Marx did not do full justice to the Ricardians; and adds that Marx didn’t realise that Thompson and Edmonds had anticipated his theory of history, even if only in broad outline. His later recognition of the Ricardian critique of the ‘classical theory of economic development was only rarely explicit.’
Also his comparative neglect of William Thompson in the ‘Theories of Surplus Value’ is something of a mystery to King.
King feels there may have been something of an unconscious suppression; Marx was of course hostile to Anarchism and he may have been reluctant to endorse writers like the Ricardians whose views could have been picked up by his Anarchist opponents.
Alternatively, the early socialist movement was ‘totally unknown’ in both Germany and Britain, according to Engels. Smith and Ricardo, on the other hand, remained almost household names during Marx’s active lifetime; their ideas were discussed, interpreted and vulgarised wherever economic issues were held.
And Marx hoped that his work would be for a mass working class audience, a weapon in the class struggle. In that work Marx used the insights and errors of those familiar earlier economists as a sounding board for his own analysis. The Ricardians of 1820 to 1830 were not in that category.
Nevertheless, Marx’s later view of the Ricardians was more complex and generous than his earlier summary of their work; and his views were far less dismissive than those of the later Engels and others influenced by him. King concludes like this,
Profit, Wealth and Value 