History of Market Socialism
Published March 1971 by Irish Communist Organisation
The issue of market socialism verses collective socialism began in the first flush of the modern socialist movement of the industrial working class in the 1820's. subsequent controversies between Marxism and varieties of market socialism expressed a struggle between a bourgeois line and a working class line in the working class movement.
But the difference between Thomas Hodgkins and William Thompson in the 1820's was a difference between two of the foremost socialists of their day, neither who arrived at a comprehensive scientific analysis of capitalism.
Both of these parties to this controversy in pre Marxist socialism made partial contrbutions to the development of Scientific Socialism, and the contibutions of these forerunners was acknowledged by Marx.
(Both belonged to a school of Ricardian Socialism of economists who drew socialist conclusions from the work of the great bourgeois economist David Ricardo who carried out an analysis of capitalism on the basis of the labour theory of value to the highest development that it took within the bourgeois world outlook).
In Labour Defended in 1825 Hodgkin asked how the products of labour should be distributed after the priviliged capitalist class was overthrown. And he answered :
"If all kinds of labour were perfectly free, if no unfound predjudice invested some parts, perhaps the least useful, of the social task with great honour while other parts are improperly branded with disgrace, there would be no difficulty on this point and the wages of individual labour would be justly settled by what Dr Smith calls the "higgling" of the market (1922 Edition page 86)
William Thompson the County Cork Socialist replied to this arguement in his book Labour Rewarded (1827). The substance of Hodgkins view was that, freed from the priviliged class of capitalists , the market would serve socialism. Thompson replied :
"But a might obstacle here presents itself. Is not the competitive system itself an insourmountable bar to this perfect freedom of labour and to this equal diffusion of knowledge" (page 5)
"A sorry exchange the productive classes would make - an exchange of masters only - pampering a new host of swaggerers, with their varied coloured merits in their bonnets, instead of in the herd of capitalists. The game of the ins and outs has been to often played by unprincipled politicians on the productive classes. They will not be fooled with the same game between wit and genius, and capital: capital , the outs , wit and genius in, the ins.
By means of the spirit of competition, and by means of the reward of competition, , all the superior talents that may spring up amongst the industrious classes, are to be allowed into the mingled aristocracy of force and chicane, the feudal, the moneyed or the capitalist. Of what avail to the industrious classes though the capitalist aristocracies were put down, supposing for a moment that such an operation were possible under the system of labour by individual competition: what would be the gain to the industrious classes if mental labourers, under the name of men of merit, supplied these places and reaped the benefits which thev capitalists now enjoy, or rather possess? ... but this competition cannot last, though an occasional mental labourer may raise the cry of war against capital. No the old feudal aristocracy, the genuine sons of force become cunning if not wise, will not only continue to buy off, by sharing their prizes with the capitalists, but will also enlist into their coalition against the industrious calsses, all the commanding talent amongst them who they can imbue with the spirit of competition...(page9-10)
" It is not the differences of production of different labourers, but the complicated system of exchange of those productions when made, that gives rise to that frightful inequality of wealth with all of its train of physical and social evils. How strange then that the "labourer"...should be sent off to the mere "higgling" of the market, the regulation of exchanges " (page 12)
... the springs of this higgling will always be kept of the adepts, and they will be so regulated, that prizes there will still be, and those prizes will fall into the hands of the most skillful in the higgling exchanges of competition and therefore in nine cases out of ten, into the hands of the least benevolent. Page 36
"The pleasures of competition founded on the inferiority of comforts , of intelligence, or of moral qualities of others, are fenced round with envies, jealousies, ill will, suspicions and dread of ill offices from all around: and could never be approved as useful motives to human exertion.. (page 63)
"Labourers must acquire knowledge to regulate their labour on a large united scale, before they will be able to do anything than dream of enjoying the whole of their products of their labour. Added to knowledge, the industrious classes must also acquire power, the whole power of the social machine in their own hands, in order to render their knowledge available on a national scale, and with immediate effect, for promoting the impartial and equal happiness of all" (page 73)
"The Competitive Political Economist feels that the strongest motive is the desire to acquire more than others" (page 99)
It is reported that Mr Liu Shao- Chi, before he was got rid of,told a group of Chinese workers who were about to go on a delegation to the Soviet Union that they should not be surprised or shocked at seeing great differences in wealth there.
If some people had luxurious villas, big cars, mink coats etc while the majority had small flats, no cars no minks , that was because the the former were better workers, not because they were bourgeois.
It must be agreed that Thompson had a remarkable penetrating insight in the nature of market socialism nearly 200 years ago.
His point that the working class cannot emancipate itself within the market system, merely by modifying the market system, in undoubtably correct. The best that can happen within the competitive system is that the most ambitious, cunning, and lucky individuals in the working class would be enabled to claw their way into the exploiting class.
If in a given society a severe crisis led to the elimination of the bourgeoisie, the continuance of the market system would generate a fresh bourgeoisie out of the masses. Exploitation cannot be eliminated within the competitive system: it can only be eliminated by communism.
It is interesting to note that the advocate of competitive socialism Hodgkins quickly turned into a bourgeois liberal when the socialist movement suffered its first setback, while Thompson remained a Communist.
The Communist movement predates Marxism. Marx was a Communist before he was a Marxist.
He put Communism on a scientific basis. But the difference between the communist and socialist movements was already established whem Marx joined the movement, and one of the essential points of difference was competitive verses collective socialism. If free market socialists are right Marx joined the wrong movement.