Proudhon, Marx, labour-notes and wage-labour

And a happy new year to all! Well, it is 2015 and I’m back at work after a very nice holiday in which I watched a lot of superhero movies. I caught up on all the pictures I missed thanks to having children and not knowing enough people without children locally to baby-sit. Saw the Avengers Assemble on the telly (very fun!) as well as The Dark Knight (which was nowhere near as good nor as good as the reviews suggested) and on the back of those saw both Captain America movies on DVD (The Winter Solider is very good – the big twist was somewhat spoiled by me watching Agents of SHIELD). So the upshot is, had a break from most things and discovered I prefer Marvel movie adaptions to DC ones.

(and, no, I’m going to do reviews of those – I remember reading on-line Maoist reviews of mainstream American movies which went beyond parody in terms of their po-faced seriousness – just thought I would give some belated movie advice. If you don’t like superhero movies then please ignore. I have posted on SF before when Iain Banks died – Ursula le Guin is still my favourite author while V for Vendetta is my favourite comic book - and unlike the suggestions of some Marxist reviewers, anarchists know that this is a superhero comic and, as such, has to work within the limitations of that genre and, as such, it has no lessons or suggestions for the our struggles. Yes, I know, having to write that anarchists do not take inspiration for activity from comic book superheroes... but that was what a few Marxists seriously suggested when they pontificated in reviews at the time... )

As it is the dawn of a new year, I thought I would summarise my plans for 2015. Be warned, though, my plans and activity often do not match. I have various books I’ve read which I need to review – including a lengthy review of a Marxist book on the First International which I am working on now. I received Russell Brand’s book Revolution as a present so I will be reading that on the way to work soon and a review will be forthcoming after that.

AK Press has raised the possibility of “a short, more polemical book… Not sure on what topic exactly, but perhaps something along the lines of how to use the past to think about the future/present” as I “do so much work to clarify and correct misinterpretations about the past but it might be good to hear [me] talk about a) why the project matters and b) what does it have to do with current struggles?” Which I think could be of interest. I suggested that such a book would be based on an introduction exploring why both the past and getting the past right matters then followed by a few (revised) articles which do just that. These revised versions would be those which I think show why learning from the past is important... say on the Paris Commune, syndicalism and anarchism, the Italian near-revolution, Emma Goldman, Proudhon, Bakunin and such like. Basically, replying to accounts of anarchist history and ideas and showing why knowing what actually happened or what was actually said makes a difference. As the old saying says, those who don’t know the past are doomed to repeat it.

So I have indicated a few possible articles for inclusion – I would be interested in suggestions from my readers as to what you consider as being of note enough to be included in a book. Please feel free to use the comments to do so.

However, I must stress this is very early days – it has not even been confirmed by AK Press as something definite and I have no idea of length.

Talking of history, just before Xmas I posted a review of Democracy at Work: A Cure for Capitalism which discusses market socialism and central planning in light of Marx’s (terrible) The Poverty of Philosophy. This, in turn, got me thinking about Proudhon’s “constitution of value” in System of Economic Contradictions which has always struck me as underdeveloped and hard to fathom. Marx, of course, had much fun suggesting that it was simply Proudhon plagiarising Ricardo and the British Ricardian socialists. Yet, as my review notes, Proudhon makes no mention of labour-notes at all – indeed, at one point he states “the point of view from which all values are compared is labour; as for the unit of measure, that adopted in France is the FRANC” and suggests “how by a series of oscillations between supply and demand, the value of every product constantly seeks a level with cost and with the needs of consumption, and consequently tends to establish itself in a fixed and positive manner.” He rejects the idea of a fixed price which is implicit in “labour notes”:

“Suppose for a moment that all producers should sell at a fixed price: there would be some who, producing at less cost and in better quality, would get much, while others would get nothing. In every way equilibrium would be destroyed. Do you wish, in order to prevent business stagnation, to limit production strictly to the necessary amount? That would be a violation of liberty: for, in depriving me of the power of choice, you condemn me to pay the highest price; you destroy competition, the sole guarantee of cheapness, and encourage smuggling. In this way, to avoid commercial absolutism, you would rush into administrative absolutism; to create equality, you would destroy liberty, which is to deny equality itself.”

So not labour-notes then. So what is it? Well, I think I discovered his meaning in this passage:

“And indeed, what is there in the idea of measuring, and consequently of fixing, value, that is unscientific? All men believe in it; all wish it, search for it, suppose it: every proposition of sale or purchase is at bottom only a comparison between two values, -- that is, a determination, more or less accurate if you will, but nevertheless effective. The opinion of the human race on the existing difference between real value and market price may be said to be unanimous. It is for this reason that so many kinds of merchandise are sold at a fixed price; there are some, indeed, which, even in their variations, are always fixed, -- bread, for instance. It will not be denied that, if two manufacturers can supply one another by an account current, and at a settled price, with quantities of their respective products, ten, a hundred, a thousand manufacturers can do the same. Now, that would be a solution of the problem of the measure of value. The price of everything would be debated upon, I allow, because debate is still our only method of fixing prices; but yet, as all light is the result of conflict, debate, though it may be a proof of uncertainty, has for its object, setting aside the greater or less amount of good faith that enters into it, the discovery of the relation of values to each other, -- that is, their measurement, their law.”

In short, “constituted value” is the price for a specified quantity of goods which is negotiated between two parties. This price would be based on cost plus labour under mutualism (as all non-labour income would be ended) just as, for a large section of modern capitalist economies price is general cost plus mark-up (the post-Keynesian school has done much research on this issue which I won’t try and summarise here). This is something which has developed with industry and so fits in with Proudhon’s claim “that everything, in the economic progress of society, denotes a tendency toward the constitution and establishment of value; that that is the culminating point of political economy -- which by this constitution becomes transformed -- and the supreme indication of order in society”.

Proudhon’s defence of competition (suitably regulated with appropriate guarantees!) fits into this by ensuring that prices would be reflective of actual costs in terms of raw materials and labour – unlike state socialism:

“How much does the tobacco sold by the administration cost? How much is it worth? You can answer the first of these questions: you only need to call at the first tobacco shop you see. But you can tell me nothing about the second, because you have no standard of comparison and are forbidden to verify by experiment the items of cost of administration, which it is consequently impossible to accept. Therefore the tobacco business, made into a monopoly, necessarily costs society more than it brings in; it is an industry which, instead of subsisting by its own product, lives by subsidies, and which consequently, far from furnishing us a model, is one of the first abuses which reform should strike down.”

I should note that two French economists made the same point over a century ago:

“Proudhon’s idea has often been contrasted with Robert Owen’s labour notes, and with the scheme prepared by Mr Bray in 1839, in a work entitled Labour’s Wrongs and Labour’s Remedy, as well as with the later system outlined by Rodbertus. Proudhon’s circulating notes have nothing in common with the labour notes described by these writers. The circulating notes represent commercial goods produced for the purpose of private exchange. Prices are freely fixed by buyer and seller, and they bear no relation to the labour time, as is the case with the labour notes. The final result, doubtless, was expected to be the same. Proudhon hoped that in this way the price of goods, now that it was no longer burdened with interest on capital, would equal cost of production. This result was to be obtained indirectly. The economic errors in the two cases are also different. Proudhon’s error lay in his failure to realise that metallic money is a merchandise as well as an instrument of circulation. The error of Owen, of Bray, and of Rodbertus consisted of a failure to see that the price of goods includes something more than the mere amount of labour which they have cost to produce — an error which Proudhon at any rate did not commit.” (Charles Gide and Charles Rist, A history of economic doctrines from the time of the physiocrats to the present day [London: Harrap, 1948])

This definition of “constituted value” makes much more sense than Marx’s claim of labour-notes – particularly since Marx has to quote Bray on the matter rather than Proudhon! It also explains why there is no discussion by Proudhon of how “constituted value” will produce sufficient products to meet social needs (as expressed by workers selling their products in order to buy the products of other workers). So, no, not labour notes and Marx’s suggestions that Proudhon decries the value of a product and then this equalises supply and demand is simply nonsense.

Of course, Proudhon does not present his argument as straight forward as this and his arguments as expanded into something much harder to understand. But if you read Proudhon you have to put up with a certain amount of verboseness within which his insights shine!

This is the case with the chapter on value which is discussing different kinds of value (use, exchange, constituted, even surplus) and what happens now and may happen in the future (based on tendencies apparent now). Then there is the issue of social relationships – the class ridden society of today (with both wage-labour and artisan/peasant production) and the classless society of tomorrow (without wage-labour but with commodity production similar to that of artisans/peasants). As such, it is hardly surprising that it gets a bit muddled – still, gets you thinking!

So given what Proudhon actually writes, “civilisation, from the point of view of industry, aims to constitute the value of products and organise labour” and “value is determined in society by a series of oscillations between supply and demand” and approximates labour expended. Over time, as labour is organised, contracts between self-managed workplaces become more and more the normal and prices equate to labour cost plus labour faster (with the possibility of contracting with others there to ensure price reflects efficient labour). In this way labour gets what it produces: “Products are bought with products”

This cannot occur under capitalism due to the existence of non-labour incomes (profit, interest, rent) – in terms of profit, the workers “have sold their arms and parted with their liberty” to a boss who appropriates their “collective force” and “surplus of labour” they produce. Hence Proudhon’s taunt (misused by Marx): “Why do not the economists, if they believe, as they appear to, that the labour of each should leave a surplus, use all their influence in spreading this truth, so simple and so luminous: Each man’s labour can buy only the value which it contains, and this value is proportional to the services of all other workers?”

While under capitalism “daily product of this man’s labour is worth five francs” does not mean that the worker gets paid five francs (as Proudhon thinks they should) under mutualism they will. They will then use those five francs to buy the product of other worker’s labour, so ensuring equality in exchange – hence his continual linking of “the constitution of value” with the “proportionality of products”. Hence his summation:

“The consequence of that usurpation is that the labourer, whose share of the collective product is constantly confiscated by the entrepreneur, is always on his uppers, while the capitalist is always in profit […] political economy, that upholds and advocates that regime, is the theory of theft […] It is just, [economist] M. Blanqui said […] that labour participate in the wealth that it produces. If then he does not participate, it is unjust; and if it is unjust, it is robbery, and the proprietors are robbers. Speak plainly then, economists!...”

Proudhon’s market socialism is not particularly “utopian” in the sense of impossible or unlikely and it must be stressed that Proudhon, regardless of Marx’s claims, was not writing a new “system” to match that of Fourier or Saint-Simon. The “system” in System of Economic Contradictions is capitalism  and Proudhon is showing that it is riddled with contradictions – something most Marxists seem to think Marx invented. Indeed, there is very little in terms of “synthesis” (i.e., visions of the future society) in that work. It does exist, but it is usually mentioned in passing and so more guidelines based on generalisations of tendencies within capitalism that detailed a “utopia”. The irony of all this is that Marx’s few sentences on planning in The Poverty of Philosophy are the real utopian comments in all this.

And, of course, explaining what someone thinks does not equate to agreeing with them or thinking that is the best we can do. Saying that, Proudhon vision of a federated, decentralised self-managed economy and society is far more appealing (and plausible) than Marx’s – which explains why The Civil War in France with its reporting of the Proudhon-influenced Paris Commune is one of his best and more appealing works.

I should also note this notion of “constituted value” also fits in with Proudhon’s aim in writing System of Economic Contradictions to show the contradictions within capitalism and the tendencies these produce which point to the future and its replacement. Thus he noted that he would “not repeat that experience proves precisely the contrary [to the claim that there is no measure of value]; that everything, in the economic progress of society, denotes a tendency toward the constitution and establishment of value; that that is the culminating point of political economy”. This is unlike Ricardo, who claimed that labour determined price now for all commodities. For Proudhon, value was constituted by agreement, by contract, and this was tendency within capitalism showed what would replace it.

Indeed, he lambasted the socialists (whom he called utopian long before Marx and Engels coined the phrase “utopian socialists”) for failing to base their ideas on developments within society:

“It is important, then, that we should resume the study of economic facts and practices, discover their meaning, and formulate their philosophy. Until this is done, no knowledge of social progress can be acquired, no reform attempted. The error of socialism has consisted hitherto in perpetuating religious reverie by launching forward into a fantastic future instead of seizing the reality which is crushing it; as the wrong of the economists has been in regarding every accomplished fact as an injunction against any proposal of reform.”


“If, then, I demonstrate that political economy, with all its contradictory hypotheses and equivocal conclusions, is nothing but an organisation of privilege and misery, I shall have proved thereby that it contains by implication the promise of an organisation of labour and equality, since, as has been said, every systematic contradiction is the announcement of a composition; further, I shall have fixed the bases of this composition. Then, indeed, to unfold the system of economical contradictions is to lay the foundations of universal association; to show how the products of collective labour come out of society is to explain how it will be possible to make them return to it; to exhibit the genesis of the problems of production and distribution is to prepare the way for their solution. All these propositions are identical and equally evident.”

All this, I am sure, will come as a surprise to those who read Marx to understand Proudhon – I should know for, like many anarchists, I initially dismissed Proudhon thanks to a reading of Marxists. Thanks to my work An Anarchist FAQ and the need to go back to first principles, I read What is Property? and was pleasantly surprised by what I found. Then I read System of Economic Contradictions and realised that Marx’s The Poverty of Philosophy seriously distorts what Proudhon wrote.

Which leads me to my next announcement, namely that I plan to build on what I started in Property is Theft! in the introduction and in footnoting its extracts of System of Economic Contradictions, namely produce a reply to Marx which, as well as discussing Marx’s claims, will also include the marginal notes from Proudhon’s copy of The Poverty of Philosophy. This may take some time as I will need to do some research on the intellectual world Proudhon was embedded in (far from being some isolated thinker expounding of abstractions he really was part of the workers’ movement and shared its influences – for example, Rousseau politically). This embedded nature does, of course, date much of his work as he addresses writers who – more often than not – are as well-known as he is these days (and Proudhon is not that well known outside anarchist circles beyond “property is theft”).

So that will be taking up some time but, I feel, it will be worth it. And I should note that in many ways System of Economic Contradictions is a first draft of Capital. Proudhon discusses much of the same things as Marx and usually comes to the same conclusion. For example, one of Marx’s most famous quotes is from the 1873 “Afterword” to the Second German Edition:

“In France and in England the bourgeoisie had conquered political power. Thenceforth, the class struggle, practically as well as theoretically, took on more and more outspoken and threatening forms. It sounded the knell of scientific bourgeois economy. It was thenceforth no longer a question, whether this theorem or that was true, but whether it was useful to capital or harmful, expedient or inexpedient, politically dangerous or not. In place of disinterested inquirers, there were hired prize fighters; in place of genuine scientific research, the bad conscience and the evil intent of apologetic.”

Consider my surprise when I read over Xmas these words in System of Economic Contradictions:

“Formerly the masters of the science began by putting far away from them every preconceived idea, and devoted themselves to tracing facts back to general laws, without ever altering or concealing them. The researches of Adam Smith, considering the time of their appearance, are a marvel of sagacity and lofty reasoning. The economic picture presented by Quesnay, wholly unintelligible as it appears, gives evidence of a profound sentiment of the general synthesis. The introduction to J. B. Say’s great treatise dwells exclusively upon the scientific characteristics of political economy, and in every line is to be seen how much the author felt the need of absolute ideas. The economists of the last century certainly did not constitute the science, but they sought this constitution ardently and honestly.

“How far we are today from these noble thoughts! No longer do they seek a science; they defend the interests of dynasty and caste. The more powerless routine becomes, the more stubbornly they adhere to it; they make use of the most venerated names to stamp abnormal phenomena with a quality of authenticity which they lack; they tax accusing facts with heresy; they calumniate the tendencies of the century; and nothing irritates an economist so much as to pretend to reason with him.”

Obviously I had read those words before but for some reason I did not, until now, link them to Marx’s similar statement decades later (so I’m kicking myself as they are not in Property is Theft!, if memory serves!). I’ve noticed before how Marx seems to echo Proudhon time and time again – which explains, I think, Marx was so keen to try and destroy him… if Proudhon was not a threat, if he were the idiot Marx paints him in The Poverty of Philosophy, then Marx would not have spent so much time on him.

Talking of the apologists for capitalism, I was flicking through On The Wealth of Nations by P.J. O’Rourke and noticed that he quoted Smith against “socialism”: “Nothing can be more absurd, however, than to imagine that men in general should work less when they work for themselves, than when they work for other people.” Knowing that capitalism is based on wage-labour (i.e., working for -- selling our liberty and labour to -- the property-owner) and having read Smith and knowing his opinion of masters, I thought that this was being quoted selectively. And guess what, I was right:

“Masters of all sorts, therefore, frequently make better bargains with their servants in dear than in cheap years, and find them more humble and dependent in the former than in the latter. They naturally, therefore, commend the former as more favourable to industry. Landlords and farmers, besides, two of the largest classes of masters, have another reason for being pleased with dear years. The rents of the one and the profits of the other depend very much upon the price of provisions. Nothing can be more absurd, however, than to imagine that men in general should work less when they work for themselves, than when they work for other people. A poor independent workman will generally be more industrious than even a journeyman who works by the piece. The one enjoys the whole produce of his own industry; the other shares it with his master. The one, in his separate independent state, is less liable to the temptations of bad company, which in large manufactories so frequently ruin the morals of the other. The superiority of the independent workman over those servants who are hired by the month or by the year, and whose wages and maintenance are the same whether they do much or do little, is likely to be still greater. Cheap years tend to increase the proportion of independent workmen to journeymen and servants of all kinds, and dear years to diminish it.”

So O’Rourke takes Smith’s arguments against wage-labour (the defining feature of capitalism) and uses it to defend capitalism! Smith is being very clear here -- workers who work for a boss (“work for other people”) are less productive than workers who work for themselves (and so “enjoys the whole produce of his own industry”). All in all, O’Rourke confirms Kropotkin’s comments that economics (“that pseudo-science of the bourgeoisie”) “does not cease to give praise in every way to the benefits of individual property” yet “the economists do not conclude, ’The land to him who cultivates it.’ On the contrary, they hasten to deduce from the situation, ’The land to the lord who will get it cultivated by wage earners!’” (Words of a Rebel, pp. 209-10) Still, it takes some ability to look at an economic system in which the vast majority “work for other people” (their bosses) and fail to notice it. It takes even more ability to read a passage by Adam Smith recognising this reality and turn it into its opposite -- I wonder how Marx would feel to see his technique against Proudhon used against him?

Smith is very clear: working for a boss makes one a “servant” which not only means the master lives off their labour (“shares it with his master”) but also produces a tendency to be “humble and dependent” (which is precisely why capitalists get the state to produce a “natural” rate of unemployment -- see section C.9 of An Anarchist FAQ). Proudhon echoes Smith’s position and (as I’ve explained elsewhere) advocates socialisation of workplaces to produce universal self-employment within a complex industrial economy. So Proudhon is well aware of the liberty harming nature of property and how wage-labour is a source of both exploitation and oppression:

“Work, the economists repeat ceaselessly to the people; work, save, capitalise, become proprietors in your turn [...] In order to advance, to free yourself from wage-labour, it is necessary to become a capitalist, to become a tyrant! It is necessary; do you understand, proletarians? Property is not a matter of choice for humanity, it is the absolute order of destiny. You will only be free after you have redeemed yourself, by subjugation to your masters, from the servitude that they have pressed upon you.

“Thus, property, which should make us free, makes us prisoners. What am I saying? It degrades us, by making us servants and tyrants to one another. Do you know what it is to be a wage-worker? To work under a master, watchful of his prejudices even more than of his orders; whose dignity consists above all in demanding, sic volo, sic jubeo [“Thus I wish. Thus I command.”], and never explaining; often you have a low opinion of him, and you mock him! Not to have any thought of your own, to study without ceasing the thought of others, to know no stimulus except your daily bread, and the fear of losing your job!

“The wage-worker is a man to whom the proprietor who hires his services gives this speech: What you have to do does not concern you at all: you do not control it, you do not answer for it. Every observation is forbidden to you; there is no profit for you to hope for except from your wage, no risk to run, no blame to fear.”

Not, of course, that you would know that if you just got your knowledge of Proudhon via Marx... I will leave the question of mutualism and libertarian communism (of distribution by need rather than deed) to another time and just note that Proudhon spends some time in System of Economic Contradictions arguing against those who would see workers produce for society rather than themselves (usually in the shape of Louis Blanc). Marx, it should be noted, makes no attempt to dispute or refute any of these arguments. I should also note that while attacking Blanc, Proudhon was happy to proclaim the “Organisation of Labour” (“which involves the negation of political economy and the end of property”) as his goal:

“In order that association may be real, he who participates in it must do so, not as a gambler, but as an active factor; he must have a deliberative voice in the council [...] everything regarding him, in short, should be regulated in accordance with equality. But these conditions are precisely those of the organisation of labour”

So it was a question of companies being run by their members and so replacing wage-labour (salariat) with association. Again, something Marx fails to mention... So if Louis Blanc (and Marx) wanted Association, Proudhon wanted associations -- and the creation of a free society from below by the workers themselves reflecting the real needs of society rather than by visions imposed from above (“As for us, guided by the idea that we have formed of social science, we shall affirm, against the [state] socialists and against the economists, not that labour must he organised, nor that it is organised but that it is being organised.”). And I should note that the 1873 Afterword also contains Marx’s famous words in reply to a reviewer:

“I treat economics metaphysically, and on the other hand — imagine! — confine myself to the mere critical analysis of actual facts, instead of writing recipes (Comtist ones?) for the cook-shops of the future.”

Proudhon, of course, shared (and predated!) Marx’s opposition to inventing systems and likewise sought to base his socialism on tendencies within capitalism (rather than inventing ideal communities). However, I don’t think Marx actually succeeded in doing this – his advocacy of planning, for example, seems driven by an ideological need rather than a coherent analysis of tendencies within capitalism and an appreciation of their practicalities. Perhaps, as I suggest in my review, if he had written more than a handful sentences on his alternative to Proudhon he may have seen the impracticalities of (pun intended, btw) his plan?

In terms of Marxists, well, I visited libcom at the weekend and read David Greaber’s account of developments in Iraqi Kurdistan and was disappointed by the number of comments along the lines of “there is no communism here” – so comparing a real social movement with an idealised vision of a perfect system in order to dismiss it. Look, it is simple, no real movement will be perfect nor will it be what we hope for at its start. It is a question of tendencies – is the movement popular and be able to evolve? As Kropotkin put it:

“But precisely because we are well aware of our purpose and know that it cannot be achieved in a single day […] Precisely because we know that an uprising may well topple and change a government in one day, whereas a revolution, if it is to achieve a tangible outcome ― a serious, lasting change in the distribution of economic forces ― takes three or four years of revolutionary upheaval ― for that very reason, we say to the workers:

“The first uprisings of a revolution cannot be mounted with the notion of carrying out the wide-ranging and far reaching changes that only a revolution can effect, once it has had time to ripen.

“The initial disturbances can have no purpose other than to weaken the machinery of government: to stop it, to damage it, and render it powerless, thereby creating an opening for subsequent developments in the upheaval.


“In any case, were we to wait for the Revolution to display an openly communist or indeed collectivist character right from its initial insurrections, that would be tantamount to throwing the idea of Revolution overboard once and for all. For that to be a possibility, it would require that a large majority be already in agreement upon effecting a communist change, which is generally not the case, since it is primarily the turns taken by a revolution that can draw the masses over to communism […] were that period of “anarchy” to last, communist ideas would, of necessity, become more sharply defined and would embed themselves during the upheaval as lessons taught by actual experience.” (“Insurrections and Revolution”, Direct Struggle Against Capital, 553-555)

Ultimately, we need to be thinking about where we are now and how to work to improve this (bad) situation rather – as too many so-called revolutionaries do – dismiss this in favour of perfect ideological correctness. This is due, I think, to the undue influence of ultra-leftism in British (and American?) anarchism – far too many libertarians (and one is one too many) seem to consider the views and ideas of the Marxist ultra-left as important (I remember a SolFeder on libcom asking what the ICC thought of its industrial strategy – the correct position would have been to conclude if the ICC liked it then there was something seriously wrong with it!).

So after starting with unrealistic fantasy people (superhero movies) I end with unrealistic fantasy politics (the ultra-left). Sadly, only one is entertaining…

Until I blog again, be seeing you…


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