The Private-Property System: Ricardo as bˆete noire

D. The Private-Property System: Ricardo as bˆete noire

The Paris Manuscripts lists several propositions relating to the “claims of labour”

D. The Private-Property System: Ricardo as bˆete noire 177 claims” of the workers derived from “the standpoint of the political economist”

(MECW 3 : 239). The Wealth of Nations as source is not always stated but (as we shall suggest by our interpolations) a Smith connection is evidently at play in most of the attributions to Marx’s composite authority:

He tells us that originally and in theory the whole product of labour belongs to the worker [Smith 1937 (1776): 47, 64]. But at the same time he tells us that in actual fact what the worker gets is the smallest and utterly indispensable part of the product – as much, only, as is necessary for his existence, not as a human being, but as a worker, and for the propagation, not of humanity, but of the slave class of workers [Smith 48]. . . . Whilst the rent of the idle landowner usually amounts to a third of the product of the soil [Smith: 49, 318], and the profit of the busy capitalist to as much as twice the interest on money [Smith: 97], the “something more” which the worker himself earns at the best of times amounts to so little that of four children of his, two must starve and die [Smith: 79]. Whilst according to the political economists it is solely through labour that man enhances the value of the products of nature, whilst labour is man’s active possession [Smith 49], according to this same political economy the landowner and the capitalist, who qua landowner and capitalist are merely privileged and idle gods, are everywhere superior to the worker and lay down the law to him [Smith: 674] (239–40).

There are also allusions to overproduction and depression unrelated to Smith. 16 Finally, there is the generalization that “[w]hilst the interest of the worker, according to the political economists, never stands opposed to the interest of society, society always and necessarily stands opposed to the interest of the worker.” Specifically: “According to the political economists, the interest of the worker is never opposed to that of society: (1) because the rising wages are more than compensated by the reduction in the amount of labour time . . . [Smith: 86, 242–3]; and (2) because in relation to society the whole gross product is the net product, and only in relation to the private individual has the net product any significance.” Marx concludes with a non sequitur : “But that labour itself, not merely in present conditions but insofar as its purpose in general is the mere increase of wealth – that labour itself,

I say, is harmful and pernicious – follows from the political economist’s line of argument, without his being aware of it” (239–40; see also Marx 1968: 44–5). Now, Smith did not maintain that “the whole gross product is the net product. . . . ” Marx is in fact paraphrasing the reaction by Say to Ricardo’s objec- tion that “Adam Smith constantly magnifies the advantages which a country derives from a large gross, rather than a large net income” (Ricardo 1951–73, 1 : 347). 17 What then of Marx’s attitude towards Ricardo in the present context? A citation

16 For an elaboration, see below p. 182f. 17 Smith indeed asserted that “the whole value of the annual produce is thus divided among and constitutes a revenue to its different inhabitants . . . ,” but he also added that “[t]he whole expense of maintaining the fixed capital, must evidently be excluded from the real revenue of the society” (Smith 1937 [1776]: 270–1). (On this matter see Chapter 2, pp. 493–4) Say commended the unqualified affirmation: “On ne devrait parler de revenu-net que lorsqu’il est question des int´erˆets d’un particulier par opposition `a ceux d’un autre. . . . Le revenu total d’une nation se compose de son produit brut; c’est-`a-dire, de la valeur brute de tous ses

Marx’s Economics 1843–1845

in the first Manuscript from Ricardo’s chapter “On Gross and Net Revenue” is relevant: “Provided [the nation’s] net real income, its rent and profits be the same, it is of no importance whether the nation consists of ten or of twelve millions of inhabitants” (Ricardo 1951–73, 1 : 348, cited MECW 3 : 256–7). Marx read into this passage the message that “[n]ations are merely production-shops; man is a machine for consuming and producing; human life is a kind of capital. For Ricardo, men are nothing, the product everything” (256). In the second Manuscript, the same theme is repeated with sarcastic praise accorded Ricardo and James Mill for their “advance” over Smith and Say “to declare the existence of the human being . . . to be indifferent and even harmful. Not how many workers are maintained by a given cap- ital, but rather how much interest it brings in, the sum-total of the annual savings, is said to be the true purpose of production” (284). This charge that Ricardo coun- tenanced reduction in gross produce, total wages and employment in the interest of a net product consisting of profit and rent alone, had indeed been made by Say and also by Malthus; and Ricardo had actually protested in the third edition of his Principles : “M. Say [Say 1819, 2 : 224] has totally misunderstood me . . . I think the text sufficiently shews that I was confining my remarks to the particular grounds on which Adam Smith had rested it” – namely concern with national power and focus on “the fund from which all taxes must ultimately be paid” in terms of net not

gross revenue (Ricardo 1951–73 1 : 348–9). 18 It is not clear whether or not Marx was aware of Ricardo’s response. Marx’s sarcastic reference to Ricardo’s “advance on Smith and Say” reflects in part hostility to Malthusianism, as Marx perceived it, that emerges most clearly in a relationship – also sarcastic – drawn between political economy and ethics containing an illustration from population theory to demonstrate that “political economy expresses moral laws in its own way”: “Frugality as the principle of political economy is most brilliantly shown in its theory of population. There are too many people. Even the existence of men is a pure luxury; and if the worker is “ethical,” he will be sparing in procreation. [James] Mill suggests public acclaim for those who prove themselves continent in their sexual relations, and public rebuke for those

who sin against such barrenness of marriage” (MECW 3 : 311). 19 “Is this not ethics, the teaching of asceticism? The production of people appears as public destitution.”

The Notebooks contain several of the foregoing themes. To be noted first is a positive obligation to J.B. Say, as Rubel pointed out: “Chez Say, Marx a retenu l’id´ee que ‘the right of landowners . . . extends back to plunder. . . . Even if we suppose that

18 See also Ricardo’s Notes on Malthus’s Principles (Ricardo 1951–73, 2 : 122). 19 Similarly with regard to Malthus, who is blamed for the 1834 Poor Law legislation (MECW 3 : 194). Marx concludes: “With this philanthropic theory the English Parliament combines the view that pauperism is poverty which the workers have brought upon themselves by their own fault, and therefore it is not a misfortune which must be prevented, but rather a crime which has to be suppressed and punished” (195).

D. The Private-Property System: Ricardo as bˆete noire 179 capital is not the fruit of plunder, but of slow accumulation proceeding over several

generations, nonetheless that too, like land, requires the assistance of the law in sanctioning the right of inheritance . . . ’ [Say 1817, 1 : 136]” (Rubel 1968: 1600). 20 Several of the objections raised in the Notebooks against Ricardo as an apologist for private property are not directed against Say.

Marx, thus, writes sarcastically in his Notebooks of the “philanthropic Ricardo,” who had in his chapter “On Wages” defined the natural wage in terms of subsistence and whose entire purpose was to justify a property-based class system with all that implied; and here too the schizophrenia attributed to political economy in the Paris Manuscripts (above, pp. 176–7) is apparent: “We well recall that, at the outset of this chapter, the philanthropic Ricardo defined the means of subsistence as the natural price of the laborer, thus as the sole object of his work, since he works with an eye to his wage. . . . What Ricardo really and specifically has in view, are the distinctions between the various classes. It is the standard vicious circle of political economy. . . . Its object is property; thus, for the majority, no property”(Marx 1968: 11). As in the Manuscripts, Marx speaks with forked tongue of his “admiration” for “the cynicism of the economist Ricardo” a pure cynicism free of “human illusion” – intending here “illusion” from the perspective attributed to Ricardo (14). And here too we find repeated the more specific charge – following Sismondi (1819 1 : 331) – that Ricardo was “infamously” prepared to sacrifice the lives of millions in the cause of a maximum net revenue.

Marx touched on various objections directed by Say as well as Sismondi against the alleged Ricardian position, but points out that by their objections they were in effect rejecting political economy as such, since political economy was essentially inhuman : “Ricardo’s thesis is correct and logical from the economic perspective. If Say and Sismondi, in order to combat the inhuman consequences of political economy, are obliged to reject that science, what does that prove? Only one thing: that humanity resides outside political economy, inhumanity within” (Marx: 13). As for Adam Smith, his focus on the gross revenue was a sign of “human weakness,” conflicting with political economy. Thus the alleged Ricardian thesis indicated for

Marx the “cynical” essentials of political economy; 21 and he rejected Say’s position that – in Marx’s paraphrase – “the contrast between net and gross revenue is only

20 Marx might well have referred to Adam Smith directly – it is possible that Smith was Say’s source in this regard – that “the affluence of the few supposes the indigence of the many”

(Smith 1937 [1776]:670); or that “civil government, so far as it is instituted for the security of property, is in reality instituted for the defence of the rich against the poor, or of those who have some property against those who have none at all” (674). 21 Oakley, referring to Marx’s “critical admiration” for Ricardo’s “cynicism, adds that “[t]his critical admiration for Ricardo’s work was to carry it forward as a central source in the evolution of the critique of political economy. In the Principles, as Marx saw it in the light of his critical telos, political economy had reached its ‘scientific’ apogee” (Oakley 1984: 39). There is certainly something to this, but at this early stage the “critical admiration” is without question combined with disgust.

Marx’s Economics 1843–1845

important for individuals and not for the nation” (12–13). 22 For political economy to abandon the gross-net distinction at the national level implied the abandonment of all distinction between capital and its return, land and its return, indeed private property in general (14).

In the same context as his sarcastic expression of “admiration” for the cynical Ricardo, Marx refers to an “amusing remark” by Ricardo against Say’s reaction to the proposition whereby international-trade patterns are governed by factor- ratio differentials (Ricardo 1951–73, 1 : 349). Ricardo here cites Say’s comment in translation: “It is fortunate that the natural course of things draws capital, not to those employments where the greatest profits are made, but to those where the [1817: their] operation is most profitable to the community” (Say 1814, 2 : 122); and objects: “M. Say has not told us what those employments are, which, while they are the most profitable to the individual, are not the most profitable to the State.” Ricardo’s “amusing” position illustrated for to Marx his apologia for capital, disguised by a hypocritical pretense of an identity of private and social interest: “What does this remark by Ricardo amount to in the final resort? Only one thing: considered apart from the capitalists, the welfare of the nation is a fiction, since by ‘nation’ we understand the body of capitalists” (Marx: 15).

We have encountered the disconcerting circumstance that the usefulness to Marx of Ricardo’s hypocritical “cynicism” led him to defend various technical proposi- tions by Ricardo (above, pp. 178, 179–80). In the present case he similarly seems to reject Say’s insistence – also found in the Wealth of Nations – upon possible deviations between private and social interest. For Say, as for Smith, these included the social advantage of investments that generate rent in addition to profits (Say 1819, 2 : 226; cited Marx: 14–15). To this Marx simply responds that Say’s objection to Ricardo “relates to the distinction between net and gross revenue that we have already examined” (15) – a distinction which, following Ricardo, Marx insisted on. Say had also maintained against Ricardo that “there are even certain employments of capital which, despite the profit they generate for the capitalist, yield no revenue to the nation” (Say 1819, 2 : 226–7; cited 15). This too Marx rejected using his inter- pretation of Ricardo – that national gain is defined solely in terms of the incomes of capitalists and landlords (“Ricardian” net revenue): “Say’s remark reduces to the notion that the profits of individual capitalists may be increased without profits in the aggregate increasing, one gaining what the other loses. Consequently, Say’s

22 An observation by Say that a population of seven million workers would save more than a population of five million (Say 1819, 2 : 223) – accepted by Ricardo himself in 1821 since part

of wages must be included in the national surplus (Ricardo 1951–73, 1 : 348) – is dismissed by Marx with the unhelpful comment that seven million might waste more than five (Marx 1968: 13). Also rejected is Say’s case for a large population on defence grounds (Say 1819,

2 : 224), since a large population, constituting a threat by labor to reclaim “its share of net revenue,” would rather “endanger the lives of speculators.” As for Say’s position that there is more aggregate happiness in a large population, the opposite was true: “there is surely more misery in a population of seven millions than one of five.”

D. The Private-Property System: Ricardo as bˆete noire 181 objection does not refute Ricardo’s thesis. . . . It by no means implies that such

profit differs from that of the nation.” We return to Marx’s reading into Ricardo of apologetic intent. It emerges again in his interpretation of Ricardo’s rejection of the Say position (following Smith) regarding the particular advantages flowing from domestic trade, specifically that “[t]he most productive employment of capital, for the country in general, after that on the land, is that of maufactures and of home trade; because it puts in activity an industry of which the profits are gained in the country, while those capitals which are employed in foreign commerce, make the industry and lands of all countries to

be productive, without distinction. The employment of capital the least favourable to a nation, is that of carrying the produce of one foreign country to another” [Say 1814, 2 : 120–1] (Ricardo 1951–73, 1 : 347). For Marx, Ricardo’s objective in rejecting Say was to justify the theft inherent in a capitalist system : “when Ricardo fails to understand why Say only sees a gain by way of home trade, and not foreign trade, he intends in sum to say: in both cases equally there is theft, and it matters little to the nation that its merchants enrich themselves by despoiling the foreigner rather than their own compatriots; since each merchant is a foreigner vis-`a-vis his own nation . . . ” (Marx: 15–16). Private property in fact knew no homeland: “the homeland extends for the property owner as far as his own property, and for him foreign parts begin precisely where someone else’s property begins” (16).

What Marx goes on to label the “infamy” of Ricardian political economy, resided precisely in its neglect of social conflict created by the private property institution –

a neglect accomplished not only by the identification of private and social inter- ests but also by the methodological recourse to “averages,” “general laws,” and “abstractions” amounting to the disappearance of the individual within a “per- son society”: “What concerns the Ricardians is solely the general law. The law and the economists are absolutely indifferent to the thousands of people destined to

be ruined by the operation of this law” (36). The equilibration process provided an instance: “The thesis thanks to which economics accomplishes all its miracles requires that a loss due to [higher?] production costs be balanced by advantages in the case of another product, such that society suffers no detriment. . . . Considered as a single person, society gains at one point what it loses at another. . . . Equilibrium here is an equilibrium involving abstract capital and abstract labor, without refer- ence to the capitalist and the individual laborer [la personne]. And society is seen solely as an average figure” [un chiffre moyen] (36–7). In brief, Ricardian political economy starts out by assuming private property “that sets interests apart [qui divise les int´erˆets] and renders them mutually hostile,” and then engages in spec- ulative exercises “as if the interests were not alienated and as if property were held in common” (37). Political economy had built up a body of “infamous sophisms” entailing the harmony of social relations and proving one thing, that “in the going state of relationships, reasonable laws can only be obtained by abstracting from the specific nature of ruling conditions, in other words that the operation of these laws is a pure abstraction” (37).

Marx’s Economics 1843–1845

Finally, Marx asserted in the Notebooks that the “Ricardian” reduction of cap- ital to accumulated labor went hand in hand with a degradation of labor and reduction of work to the status of mere commodity: “As we see it, the substitu- tion of accumulated labor for capital so much insisted on by the Ricardians – the expression is already found in Smith – signifies only one thing. The more political economy recognise labor as the sole principle of wealth, the more it degrades and impoverishes the laborer and turns labor itself into a commodity; this is as much a theoretical axiom essential to their science as it is a practical truth in today’s social life” (36).