List of four early socialist critics of the classical school:- 1. Robert Owen 2. Francois Marie Charles Fourier 3. Louis Blanc 4. Pierre Joseph Proud Hon.
Socialist Critic # 1. Robert Owen (1771-1858):
Robert Owen was born at Newton in North Wales. He had to leave his schooling at an early age but continued to read books on history, biography, travel etc. At the age of nineteen he set up as a master spinner and was able to expand his business rapidly. At the age of thirty he became a co- proprietor and director of the New Lanark Mills.
As a model employer, he enforced 12 hours of work in place of 17 hours and abolished child labour of 10 years of age and all fines which was a common feature then of all workshops. In 1832 he established two remarkable things the Grand National Consolidated Trade Union and the National Equitable Labour Exchange, the object of which was to eliminate the use of money in ordinary business. His essays are collected in A New View of Society (1806) and Report to the Country of Lanark (1821). The two famous books written by him are – Catechism of New Moral World (1834) and what is Socialism (1840).
Owen’s Economic Ideas:
The following are the economic ideas of Robert Owen:
1. Importance of Environment:
Owen believed that by nature man is neither good nor bad. He is just what his environment has made him. His slogan was “Change the environment and recreate the society.” The social environment was the outcome of legislation, education, deliberate individual action and other factors. Owen was the first social philosopher to emphasise environmental influences as factors influencing society.
2. Abolition of Private Property:
According to Owen both labourer and capitalist are good but due to the institution of private property there is concentration of property in the hands of few. Owen wanted to eliminate the profit seeker the parasite, so to achieve this objective he wanted to establish some sort of combination. For instance, in cooperative marketing where the producer and consumer are brought in direct contract without the intervening middleman, whole sale and retail profits will be eliminated.
A cooperative central depot with a few branches, was established with 840 members in September, 1832. All workers were to bring their product to it for sale and price was to be declared in terms of hours of work undergone in making it. They were to be paid in ‘labour notes’ to that extent and these ‘notes’ could purchase any other product of a corresponding value in exchange.
Commodities would exchange for the real cost of production and thus profits would be abolished. But in actual practice there are lot of problems in the working of the exchange. The value of the product was done according to the money value of the labour involved and prices were exaggerated by the workers. Superior goods were immediately sold and inferior goods were unsold.
Some traders of London played a fraud on the exchange. They purchased the labour notes from workers, because they were not registered in their personal names and hence purchased all good commodities from the exchange. This resulted in the collapse of Labour Exchange.
3. Community Living:
He suggested the idea of ‘Return to Spade’, which meant that workers should go back to their land because agriculture provided them with food. He even suggested the establishment of agricultural manufacturing villages. The number of inhabitants of each such village would range between 300 and 2000, but the optimum number was between 800 and 1200. The people were expected to live in large buildings in the villages arranged in parallelograms.
Owen purchased the community village of New Harmony in 1825 from the Rappites-a religious sect, who had immigrated from Germany in 1804. But the settlement of this colony did not function satisfactorily because the inhabitants who belonged to different groups, did not possess the necessary aptitudes.
Importance of Owen:
Owen is sometimes considered as a dreamer of dreams for his ideas like the communist settlements and replacement of money by labour notes. According to Eric Roll his influence on economic thought has not been very great. But according to Schumpeter his ideas within the sphere of thought and action showed even crude common sense. He just did not know how to protect his case against the most obvious.
As a practical reformer, Owen was responsible for inspiring the movement for factory reforms. The first Factory Act of 1819, placing the minimum age limit at 9 years for children employed in Industry was due to his personal influence. Owen’s main title to fame is that he inspired the movements for industrial legislation, cooperative marketing and garden cities.
Owen in England, like Sismondi in France, was the first thinker to condemn the inequality, ugliness and waste of the capitalist social order.
In Labour Exchange Organisation, Owen had assumed the Ricardian theory, that labour determine value. His follower William Thompson in his ‘Principles of Distribution of Wealth (1824) refined it — the concept of surplus value-as the source and measure of exploitation of the worker. Thompson in turn influenced Marx for whom the doctrine of surplus value became the chief weapon against capitalism. Owen has been called “The Father of British Socialism”, because he gave British socialism a mild conciliatory and compromising tone, but insistent on reform.
Socialist Critic # 2. Francois Marie Charles Fourier (1772-1837):
Charles Fourier was born in 1772 at Besancon. At the time of his father’s death he was quite young. At the age of forty he inherited a large fortune from his mother, which helped him to devote his life to writing and experiments. His chief publications are Theory of the Four Movements (1808), Treatise on Domestic and Agricultural Association (1822) and The New Industrial World (1829).
His Social Philosophy:
The Law of Attraction was the kernel of his social philosophy which he believed was operative throughout the universe. To him, the existing social evils have resulted from the artificial obstacles that have been placed in a way of operation of this law. It has made men anti-social. His aim was, therefore, to remove these obstacles and establish harmony and peace.
Phalanstere or Phalanx or Phalangs:
The Phalanstere was a communal organisation of about 1500 persons (400 families). To him, there was no free play of the twelve major passions of mankind, namely, seeing, hearing, smelling, feeling, tasting, enmity, love, fraternity, ambition, desire for intrigue, love of change, and desire for union. When these 12 passions are combined together, the result is brotherly love.
He calculated that these passions could be combined in different individuals in 820 ways. It was, therefore, necessary that in an ideal society all these combinations should be possible and there should be a sufficient number of persons to ensure the result. He, therefore, suggested that people should form themselves into such voluntary associations, he called Phalanx.
In a Phalanx, dining rooms, concert halls, schools, kitchens, everything was common, except their living quarters. Services like cooking and cleaning are done together by all residents. The cost of living in such an establishment will be low because of economies of common cooling, heating and lighting and service.
The Phalanstere will be standing in its own grounds, an area of 400 acres, situated in charming natural surroundings on a river side. The land will be devoted to the cultivation of apples, fruits and vegetables, bee keeping and poultry farming. He did not encourage the cultivation of cereals because it is uninteresting. Each member could join any occupation he liked. So, it was a combination of producers and consumers – a self-sufficient world in miniature.
The residents of the Phalanx are the co-operative owners of the entire property. They held their share on the joint stock principle, only with this difference that the net product is not distributed among the proprietors in proportion to the value of their shares, but in the following fixed ratio: Labour 5/12, Capital 4/12 and Ability 3/12. Everyone contributes his capital, labour and ability, hence everyone is entitled to draw his share in all the three capacities.
The management of a Phalangs was to be run by able persons elected from amongst the inmates. The inmates were co-partners in that industrial and commercial venture. The Phalanges was an unique organisation in which the same person was worker, organizer and capitalist, but he had several responsibilities also.
There are seven essential conditions for the successful functioning of a Phalanstere:
(1) Charming surrounding,
(2) All inmates as co-partners— no question of wages, all to receive dividends
(3) Short session of work – for two hours at the most at a stretch
(4) Work in companies of men spontaneously organised
(5) Excessive division of labour,
(6) Guarantee of minimum of subsistence to free everyone from anxiety and
(7) Development of the spirit of emulation and rivalry.
Children are divided into three categories:
(1) Nourrissons—up to 15 months,
(2) Poupons—from 16 to 33 months and
(3) Bambins—from 34 to 54 months.
Those children who did scavenging work were called Little Hordes. They had to go to work at 3 O’clock in the morning. Until the age of 6 or 7 years no education was to be given to them. Two-thirds girls and one-thirds of boys, whose work was to design costumes for ceremonies were known as Little Bands.
He distinguished between an ordinary hotel and phalanstere. In a hotel any-body can enter whereas in a phalanstere only members are allowed. Phalanstere is regarded as a cooperative hotel— a combination of consumer’s cooperative and producers cooperative. Every Phalangs was to be established as a joint stock company.
Only members are allowed to work and outside labour was not allowed. Dividends were distributed in the following way capital-—one-third, labour-five-twelfths, and management—three-twelfths. In a phalangs, production of cereals and establishment of large scale industry were prohibited as they would be a nuisance and create ugliness.
He wanted that everyone living in a phalanstere should be interested in work in the same way as young men were interested in a gala, to make their life happy.
Back to Land:
The idea of back to land aimed at making a phalanstere a well-planned medium village where agriculture and industry prospered side by side. For this purpose a phalanstere should be established near a beautiful river, surrounded by forests and standing near the slopes of a mountain. By ‘Back to the land’ we generally understand that more emphasis was laid on agriculture, but in the system of Fourier cereals production and old tillage was not to be encouraged. The main emphasis was laid on horticulture and poultry keeping.
So far as the influence of his thought is concerned, he must be credited with originating the ideas of the integral co-operative, the garden city movement, attractive labour and education and the greatest of all the co-partnership ideal. Co-partnership has been the ideal of many non-Marxian French socialists, who reject class struggle and expropriation.
They maintain and foster the right of property and seek the abolition of wage earning status of labour by making him part-owner of industry. Fourier has just claim to be called the originator of indigenous French socialism with its ideal of co-operation, a trait which continues even to this day.
Socialist Critic # 3. Louis Blanc (1813-1882):
Louis Blanc, a social reformer and an historian, is the founder of state socialism. His important economic writing is “Organisation of Work”. It contained a complete attack on competition and a short and simple statement of Blanc’s socialist ideal and also a scheme to implement it. His ideal was to create a new society and to prepare for the future without clashing violently with the past.
Criticism of competition: Blanc criticised the competitive system of economy. He considered competition as the root cause of all economic and social evils. Competition results in lower wages which brings poverty. Poverty generates crimes. Poverty is also responsible for other social evils such as dissolution of family, infanticide, child labour, prostitution etc.
In short competition results in extermination of the poor, impoverishment of the rich, moral degradation, economic crises and crimes. Competition is an evil for both the workers and the society. It has destructive effects on producers.
Competition makes commodities cheaper and profits decline. Competition also causes industrial crisis and international wars. Blanc advocated association as the only remedy for saving the society from the effects of competition and as the foundation on which the ideal society would be created in future.
The Social Workshop:
Blanc advocated voluntary associations. He advocated the establishment of one social workshop for a trade or industry. In these workshops, state and labour would provide the instruments of production. Capital would be supplied by the Government. Managers will be selected on the basis of their ability.
The revenue of the workshop would be used for payment of wages to labourers, to create a fund for repaying the advances made by the Government and for distributing profits among labourers. Wages and profits were to be distributed according to the capacity and needs of the labourers.
The salient features of the workshop are:
(a) The social workshop is democratic and an egalitarian organisation. All profits belong to the workers.
(b) The state would pay the necessary capital and would initiate the scheme.
(c) Wages would be equal for all individuals. However, due to anti-social character of education, equalisation of wages was not possible. Hence there was a need for a new system of education.
(d) As the social workshop is democratic, it would be controlled and supervised by the elected representatives of the society.
(e) Cost of production in the social workshop comprises of interest and wages.
(f) The social workshop is not the ultimate end. It is merely the first step towards establishing the new society.
Criticism of savings:
Louis Blanc criticised the scheme of savings banks. He thought that small deposits were part of an honest labour but increased deposits implied embezzlement and prostitution. He Considered saving as unwise and a symptom of selfishness. Saving meant lack of faith in the goodness of the fellow workers.
To quote Blank “In itself, thrift is an excellent thing-but when combined with individualism, thrift engenders egoism, it imperceptibly dries up in the best natures, the sources of charity-to save only for one’s self is to manifest an act of distrust with regard to one’s fellows and with regard to future.”
Role of state:
To Blanc social and political reforms are interlinked. The former is the aim and the latter is the means. A strong state is essential to determine and enforce the rules for the society. The power of the state is also needed to materialize the scheme of social workshop. Private initiative cannot be relied upon to undertake such a huge task.
The state will act as the founder of the social workshop and the intervention of the state will be temporary. The state is required to give a start to the scheme. “The state will just give it a push; gravity and the laws of mechanics will suffice for the rest.”
Blanc occupies an unique position in the history of French socialist movement. He was neither an illustrious author nor an original thinker. He was the first to put an Utopian plan into operation with Government help. He was on the border line of state socialism and associationism. He must be credited with having started an idea which acquired great currency in the years that followed – that of Government enterprises.
Socialist Critic # 4. Pierre Joseph Proud Hon (1809-1865):
Proudhon is the last thinker in the first phase of socialist thought. Coming from a middle class family, he had an early brilliant career and devoted himself to the study of social science and he wrote a number of books expounding his views on the current economic problems.
His work on “What is Property” (1840) is important because it contains three important aspects of Proudhon’s thought:
(i) His scathing criticism of private property
(ii) His labour theory of value and
(iii) The philosophical background of his Anarchism (system of no government).
“The Philosophy of Misery” (1846) was his denunciation of all previous socialists which earned for him a bitter reply from Marx under the caption, “The Misery of Philosophy” (1847). Proudhon did not participate in the revolution of 1848 because he believed that all governments were bad. Proudhon established the people’s bank in 1849 which soon failed. His later life was devoted to revolutionary Journalism for which he was prosecuted by the Government.
Proudhon’s Economic Ideas:
Condemnation of Private Property: Like all socialists he begins with a criticism of the rights of private property. In the very first page of his book “What is Private Property” he says that property is theft and all property holders are thieves. He believed that it is the basis of all social injustice. But Proudhon did not consider all property as theft. Private property in the sense of free disposal of fruits of labour and saving, in his opinion, is an essential condition of liberty. Property is attacked because it gives to the proprietor a right to an income for which he has not worked.
Proudhon considered that labour alone was productive because without labour, land and capital were useless. So the demand of the proprietor for a share is radically false. The capitalist receives payment for doing nothing.
At one point, Proudhon undertakes to explain how it is that capitalist takes a profit from the labourer’s product. The capitalist pays each labourer of a group a mere day’s wage. But in the combined labour of the group there is an advantage for which he does not pay. There is a union through which the product exceeds the sum of the individual products of the separate labourers. As a remedy he concludes that labour should receive an additional proportion of the product. In accordance with these ideas, Proudhon propounds a labour theory of value.
Labour Theory of Value:
He begins by mocking the economists for attempting a science while professing that there is no absolute measure of value. To him, the matter is simple. The absolute value of a thing, then, is its cost in time and expense. A diamond in the rough is worth nothing, cut and mounted it is worth the time and expense involved.
But it sells for more than this because men are not free. So, society must regulate exchange and distribution of rarest things, as it does that of most common ones, in such a way that each may share in the enjoyment of them. Value based upon opinion is delusion and robbery.
Implicit in Proudhon’s condemnation of property, is the labour theory of value. Proudhon advanced ‘Surplus Value’ theory thereby providing a hint to Marx. But his explanation for this is absurd. His idea was that many labourers working together will produce more than the total of what they would produce independently but the individual labour is paid according to the individual amount of work he would independently do. Thus the total wage of labour will be lesser than the value of their co-operative production and this difference amounts to the surplus value appropriated by the owner.
Proudhon’s ideal was the creation of a society based on liberty, equality and fraternity in which justice will be secured for all gradually.
The gradual movement was to be in two directions:
(i) The Suppression of all property which resulted in unearned income, because the criteria of justice, ‘the mutuality of service’, was absent in property relationship
(ii) The extension of the right of possession of the property, the right of work and the right of exchange assured for every individual. In effect, he wanted that the fundamental attribute of property, i.e., its ability to exploit labour, should be removed.
Thus he rejected the previous ideas of associations, as well as socialistic and communalistic schemes- which curtailed the individual liberty of the worker. Proudhon wanted to harmonize property and community by limiting the property rights to those things that are clearly produced by labour but abolishing all the rights to interest, rent and profits. His insistence on the principles of liberty and free association led him to condemn any form of government. So much so, that he is often classed as an ardent Anarchist. He held “No government” as his ultimate ideal.
The Exchange Bank:
Proudhon felt that the chief source of exploitation was capital. Hence the first practical step toward his ideal society was the provision of free credit which was to be done through the establishment of Exchange Banks. It will have the monopoly of credit issue, the workers will be able to obtain the instruments of labour without price.
The Bank would issue “Paper money” in lieu of commodities deposited with it or a promissory note issued by the borrower of the capital equipment, because it was to be legally honoured. After the completion of production, the worker was to return his promissory note or commodities and the paper money issued to him was to be cancelled.
Thus the worker would be able to get capital without paying any interest. This will ultimately ruin the capitalist who would cease to exist in his scheme of things. This was rejected by the French Assembly as being impracticable. Even the people’s Bank established by Proudhon in 1849 was not an exchange bank but was like any other bank except that it had lower rate of interest.
The Bank was to issue notes against commercial goods only. It fixed interest at 2 per cent expecting to reduce it gradually to 1 /4 per cent. After three months it was found that the subscribed capital had amounted to 18000 francs only-the number of subscribers being as high as 12000. On April 1,1849 he announced the abandonment of the experiment.
It is difficult to place Proudhon in the history of economic thought. Proudhon is neither a socialist nor can he be classed as an associationist, or an Utopian or a communist. He was the great exponent of the ideals of absolute liberty, equality and fraternity which became the slogan of the French Revolution. So he was acceptable to all French Socialists who rejected Marxism.