New Lanark is one of the big tourist attractions in the south of Scotland. Designated a world heritage site by the UN, it is an almost perfectly preserved model industrial village run by Robert Owen 200 years ago. It has a large and elegant school building, an “Institute for the Formation of Character,” workers’ houses and the original mills. An exhibition and theme ride puts across some of the basic facts about Owen, the pioneer of socialism, trade unionism and the cooperative movement. The shop sells his “millenium address,” dedicated 200 years ago to our generation. Posters around the site display his humanist philosophy, and explain how he established the first nursery school for workers’ children and set up the first system of sickness benefits.
Owen, an idealistic employer, at first thought that he could persuade other capitalists to reform society and abolish poverty, but was ridiculed by his class.
The New Lanark exhibition is rather coy about what Owen did next. It does not explain how he went on to become a socialist revolutionary — organizing the Grand National Consolidated Union, the objective of which was to hold a general strike then seize the factories and mills for the workers. The union was suppressed by the government and Owen eventually went into exile to form the commune of New Harmony in America.
He is remembered as the founder of co-ops and of industrial trade unionism. His plans for socialism have been largely ignored.
He proposed to abolish money and replace it with labor vouchers. Every worker would be paid an hour’s worth of labor tokens for each hour they worked. Shops would sell goods at prices marked in labor, so if you worked an hour you could buy goods that had taken an hour to make.
Contrast this to today’s society. With an hour’s wages, the average British worker can buy goods that took about 35 minutes to make. The rest goes as profits to the rich. In this very little has changed since Owen’s day.
His idea would have abolished exploitation and poverty at a stroke. But at the same time it would have abolished profit and the incomes of the rich. No wonder he was driven into exile!
Owen’s ideas were later taken up and systematized by Karl Marx, whose book “Capital” explained just how labor was exploited. Marx’s ideas for socialism were very similar to Owen’s. Marx put forward the labor theory of value. He showed that labor was the source of all value, and like Owen, Marx was adamant that socialism required the abolition of money.
In his pamphlet “Critique of the Gotha Program,” Marx advocated exactly the same system as Owen. The first step of socialism would be to get rid of money and replace it with labor vouchers. Taxes on people’s labor incomes would be used to pay for the sick, the disabled, and social insurance.
Marx wrote:
“The individual producer receives back from society — after the deductions have been made — exactly what he gives to it. What he has given to it is his individual quantum of labor. … He receives a certificate from society that he has furnished such-and-such an amount of labor (after deducting his labor for the common funds); and with this certificate, he draws from the social stock of means of consumption as much as the same amount of labor cost. The same amount of labor which he has given to society in one form, he receives back in another.”
In the next stage of socialism, a system of additional distribution based on needs would be introduced.
Throughout the 20th century the social democratic movement fought shy of the radical first step: abolishing money, and thus profits. So long as the money economy remained intact, it constantly regenerated extreme differences of poverty and wealth, just as Marx predicted.
Of course there have been plenty of economists saying that the idea of abolishing money and profit was absurd. The prime example was Friedrich Von Hayek, Margaret Thatcher’s economic guru, who argued that any attempt to intervene in the market was disastrous. Neil Kinnock, who led Britain’s Labor Party in the 1980s, had his own guru in Alex Nove, an economist at the University of Glasgow who echoed much of Hayek’s argument.
According to Nove, the sheer complexity of the economy made it impossible to work out how much labor it cost to make something. Far better for socialists to give up the idea of replacing the market, give up the idea of economic planning. There is a clear line of descent from Nove’s arguments to Tony Blair’s neoliberal and privatization policies.
If today’s socialist movement is to effectively fight Blairism, we have to nail the lie that there is no alternative to the market. For it is a lie. The ideas of Owen and Marx are a real and practical alternative to the market economy. Nove said that you would need to solve “millions of equations” to work out how much labor was used to make things. That sounds daunting, but computers and the Internet have transformed the situation. The best modern computers can solve trillions of equations each second.
In a socialist economy each item in the store would be marked with its labor content, just as foods are currently marked with their calorie contents. Everyone would have a labor card that would be credited for every hour of work they did. You would still have to pay tax, but when you went to the store, for an hour’s labor you would get an hour’s groceries — there would be no capitalist middlemen taking their cut.
Who would benefit from this? The overwhelming majority of the working population. The real losers would be the top 2 percent or so of capitalists who currently cream off so much of society’s wealth.
Paul Cockshott is a member of the Scottish Socialist Party.
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