Early-Nineteenth-Century Socialist Political Economy in Britain and the United States

In Britain the most potent strand of socialist political economy was that of commu­nitarianism, to which the key contributors were Robert Owen (1771-1858), William Thompson (1775-1833), John Francis Bray (1809-97) and John Gray (1799-1883); writers whose works furnished both a critique of contemporary capitalism, while articu­lating the principles and practice of those co-operative communities which, by their example, would effect the transition to a new moral world.

The magnum opus of communitarian political economy was Thompson’s An Inquiry into the Principles of the Distribution of Wealth (1824). Similar to other communitarian socialists, a rendition of the labour theory of value formed the theoretical foundation of his critique of capitalism; something which has led to his, and others, misleading catego­risation as Ricardian socialists. So, for Thompson, as for Gray and Owen, “labour was the sole parent of wealth” and commodities should therefore exchange according to the labour they embodied (Thompson 1824: 7). Further, it was through the violation of this “natural”, labour-embodied law of value that economic injustice and material impov­erishment entered the world; a violation perpetrated by capitalists, landowners and the state. Thus, for William Thompson, in Labor Rewarded (1827: 12), it was:

by unjust exchanges... supported by force or fraud, whether by direct operation of law, or by indirect operation of unwise social arrangements... [that] the products of the labor of the industrious classes [are] taken out of their hands... It is not the differences of production of different laborers, but the complicated system of exchanges of those productions when made, that gives rise to... frightful inequality of wealth.

Also “it [was] capital... dextrous in the mere tricks and over-reaching of exchanges, in the turns of the market, that now wallow[ed]...

It was this understanding of labour exploitation in terms of unequal exchanges that led writers such as Owen to advocate the formation of so-called “labour exchanges”, where goods would be exchanged through the medium of labour notes denominated in hours of labour time. Indeed, such exchanges were established in the early 1830s in Birmingham and London, though these were seen as essentially transient entities that might mitigate but could not eliminate the iniquities of contemporary economic arrangements.

As to Thompson, he conceded theoretically that a system of free labour and voluntary exchanges in a truly competitive economic system might go some considerable way to eliminate the exploitation and impoverishment of the working class. However, it would not eliminate the social, psychological and ethical diseconomies that inhered to such individualistic, market-organised economic activity; diseconomies which he was to discuss at greater length in Labor Rewarded, 1827, than in his Inquiry.

What was needed, therefore, was the creation of new moral worlds in microcosm; co­operative communities which gave their members access to the means of producing and from which the evil of unequal exchanges was banished; with goods being distributed on the basis of need, social relations resting on an equitable basis and with their rationale being the realisation of human potentialities rather than the accumulation and acquisi­tion of wealth. Such “communities of mutual co-operation”, as Thompson termed them, would also end the social or class antagonism that was an inevitable feature of a system where those with economic power derived from ownership exploited it, through unequal exchanges, to the detriment of a working class kept at a bare subsistence level of existence.

However, this aspiration to create socialism in microcosm, the concomitant emphasis on self-sufficiency and its autarchic implications meant that, as conceived and as real­ised, these communities were essentially agrarian.

Nevertheless, the ideals of these communitarian socialists were put into practice in both Britain and the United States: in Britain most notably in the community of Queenwood, near Tytherley in Hampshire, 1839-45 and in the United States in the Owenite community of New Harmony on the banks of the Wabash in Indiana, 1825-27. Such communities, as were most of their brethren, were short-lived but the political economy of communitarian socialism nonetheless enjoyed considerable support amongst the working class, particularly in the period 1820-50.

Gray’s major contribution to communitarian political economy was his Lecture on Human Happiness, 1825 and a subsequent work, The Social System, a Treatise on the Principle of Exchange, 1831, was to replicate the Lecture’s critique of competitive capital­ism as a system that skewed the distribution of wealth in favour of the unproductive as a consequence of unequal exchanges. However, there was in the latter volume a significant shift in emphasis towards explicating the macroeconomic crises that characterised capi­talism in terms of the role played by money. So, for Gray, a deficient demand resulting from a medium of exchange which failed to increase pari passu with output, together with a system of unequal exchanges that skewed the distribution of wealth in favour of those with a relatively lower propensity to consume, made for glutted markets and thence a powerful check upon production.

To rectify this state of affairs, Gray proposed radical systemic change which took the form of the purposive planning and direction of economic activity as the foundation of a new “social” system of exchange. Here Gray contrasted the contemporary micro and macro economies.

As to those involved in the business of economic planning, Gray’s view was that the key planning authority - the National Chamber of Commerce - should be drawn from those who already wielded economic power and had experience of the organisation and direction of economic activity. Economic leadership in Gray’s planned economy was therefore decidedly meritocratic and technocratic in character.

The social ownership of the means of production as the basis for the more effective and equitable organisation of economic activity was also at the heart of the political economy of another early nineteenth-century socialist, John Francis Bray (1809-97), a writer whose major work, Labour Wrongs and Labour’s Remedy, was published in Leeds in 1839 but who also had strong links with socialism in the United States; in particular, in the latter part of the century, through the neo-syndicalist Knights of Labor.

With Bray we have a writer who saw the distribution of economic power as the key determinant of the material condition of the labouring classes. The skewed distribution of this made for unequal exchanges and it was these that made for labour’s wrongs and labour’s impoverishment. So,

the wealth which the capitalist appears to give in exchange for the workman’s labour was gen­erated neither by the labour nor the riches of the capitalist, but it was originally obtained by the labour of the workman... the whole transaction therefore between the labourer and the capitalist, is a palpable deception, a mere farce. (Bray 1839: 49)

Consistent with this he believed that the reforms proposed by political radicalism would do little or nothing to improve the position of the masses. The fact was that the major exactions from labour derived from the exploitative exercise of economic not political power and could only be remedied by measures which fundamentally altered the distri­bution of the former. So “if we would end our [labour’s] wrongs... THE PRESENT ARRANGEMENTS OF SOCIETY MUST BE TOTALLY SUBVERTED”, and it was therefore “necessary... to the success of any social change that the real capital of the country should be possessed by society at large” (Bray 1839: 17).

However if ownership of the means of production was to be vested in society as a whole, Bray clearly envisaged a kind of decentralised socialism where considerable decision-making power would reside with the workforces of socially owned, joint stock enterprises; though with an overarching planning structure that would involve “general and local boards which would regulate production and distribution in gross” (Bray 1839: 160). As with Gray, therefore, the idea of planning, the conscious social control of economic activity, was central to Bray’s conception of the organisation of a socialist economy.

In significant measure, socialist political economy in early and mid-century America mirrored that in Britain; not least because of the ideological influence of Owen and the Owenites and their practical activity in the formation of communities, such as New Harmony.

As to the former, specific mention should be made of Cornelius Blatchly (1773-1831), founder of the Owenite New York Society for Promoting Commonwealths and author of An Essay on Common Wealths, 1822. This Society was also responsible for publish­ing no fewer than three American editions of John Gray’s Lecture on Human Happiness and an edition of Thompson’s Inquiry. Further, with Langdon Byllesby (1789-1871), we have another American socialist influenced by Owenism but who, in works such as Observations on the Sources and Effects of Unequal Wealth (1826), used such ideas to underpin the notion of producer co-operatives and articulate a political economy in which some have seen the roots of American syndicalism.

As to Fourierism, a key figure in its dissemination was Albert Brisbane (1809-90), whose Social Destiny of Man (1840) advocated the restructuring of American society on the basis of essentially agricultural phalanxes. Horace Greeley (1811-72), too, was to play an important role in both the dissemination of Fourierist ideas and the formation of Brook Farm, 1841-46, a Fourierist-inspired community which was established on a 200-acre site at West Roxbury, a suburb of Boston. As with the Owenites, the American Fourierists believed that it was necessary to withdraw from a competitive, socially frag­mented and individually acquisitive society and create one informed by communitarian values and a social ethos.