Reformism or Revolution: 5. Socialism utopian and scientific

The forerunners of modern socialism could never bring about the new and equal society that they dreamed of, because the material basis for a classless society did not exist. Thus the early revolutionary movements of the masses directed against the old oppressors could only serve as the means whereby a new class of exploiters established itself in power. With the development of capitalism come the proletariat, which prepared the ground for scientific socialism, i.e. Marxism.

Socialism is not a new idea. The idea of a society in which all men and women are equal is very old and has constantly reappeared at different times and in different forms. It occurs in the New Testament, particularly in the Acts of the Apostles. Thomas More in the 16th century put it forward in his celebrated book Utopia (which means "no place" and has given us the word utopian). It was brilliantly expounded by the early socialists Saint Simon, Fourier and Mably in France and by the Welshman Robert Owen, who founded the co-operative movement in England in the early 19th century. These were great and original thinkers who were far ahead of their time, unlike Heinz Dieterich, who has never expressed a single original idea and is far behind the times. But despite all their brilliance and originality, Marx described them as utopian socialists, whereas he characterized his doctrine as scientific socialism.

Reformism or Revolution
Order online!

Wherein lies the difference? For all the socialist and communist thinkers before Marx, socialism was seen in mainly moral and ethical terms. It was simply a good idea (a New Historical Project), which for some reason people had not thought of earlier. Had they done so, humanity could have been spared thousands of years of unnecessary suffering. The revolt of the oppressed against their oppressors is as old as class society. The earliest recorded strike was of the Egyptian pyramid builders. In Rome we had the revolt of the slaves under that marvellous revolutionary Spartacus. In the Middle Ages the peasants revolted against the corvée and other feudal impositions. In England the peasants rose up and seized London in 1381. In Germany the Peasant War was chronicled by Engels, who pointed to the communist tendencies in the teachings of Thomas Muentzer and the Anabaptists. Likewise, one of the leaders of the English Peasant Revolt, John Ball, expressed communist ideas in his famous verse:

When Adam delved and Eve span,
Who was then the gentleman?

The forerunners of modern socialism could never bring about the new and equal society that they dreamed of, because the material basis for a classless society did not exist. Thus, the early revolutionary movements of the masses directed against the old oppressors could only serve as the means whereby a new class of exploiters established itself in power. The English Peasants' Revolt at the end of the 14th century helped to overthrow the old feudal society but it did not lead to a world of social equality as envisaged by John Ball, but only to the development of capitalist relations in the English countryside.

In fact, very often those who spoke out against social inequality and in favour of equality had a reactionary element, harking back to the memory of an earlier society when men were freer and more equal. This is expressed in the myth the Golden Age that frequently recurs in the literature of antiquity. It is found in the writings of the Greek poet Hesiod, as early as the 7th century BC. More often than not it had a religious and messianic character, as with the early Christians, who looked forward anxiously to the Second Coming from one day to the next.

The slaves, serfs, craftsmen and journeymen were the ancestors of the modern proletariat. However, only under capitalism does the working class come into being, and with it the class basis for modern socialism. The ground for Marxism was prepared by the early utopian thinkers who arrived at conclusions and ideas that were brilliant and original for their day. The French utopian socialist Saint-Simon (1760-1825), was born an aristocrat (Count Claude de Saint-Simon). In essence, his socialist doctrine was directed against the aristocracy, the monarchy, clergy, bankers and rich entrepreneurs, rather than the new industrial bourgeoisie. This was natural, since the working class was still a nascent class in France.

When he spoke of the "workers," he included not only the proletarians but also the industrialists. Industry and labour were the twin motor forces of progress in Saint-Simon's view. His ideas received an echo not only among the workers but also among bourgeois liberals. The second great French utopian socialist was Charles Fourier (1772-1837). He launched a slashing attack against the basis of bourgeois society, private property. He subjected to a merciless criticism such things as the division of labour, in particular the division between agriculture and industry (and city and country), commodity production, the money economy, the bourgeois family and the oppression of women.

These were extremely advanced ideas, many of which were later to influence Marx and Engels. However, Fourier and his faithful lieutenant, Victor Considérant, believed the solution to these problems was to be found in the setting up of phalansteries. These were self-managed communities of 1,000 to 2,000 people who worked as farmers, craftspeople and artists. My great countryman, the Welsh utopian socialist Robert Owen (1771-1858) set out to find a remedy for the poverty of the workers of Britain. He founded a model workers' community in Scotland (New Lanark), based on principles far in advance of his time. But like Saint-Simon he appealed to the enlightened bourgeois to back his plans for social reforms. Disappointed in the results, he went to America, where he founded communist colonies. But this experiment only served to show that it is impossible to establish islands of socialism in a sea of capitalism. In every case, the egalitarian communities ended in failure.

Today in Latin America there are some people who imagine themselves to be very modern revolutionaries and far superior to Marx and Engels, who they regard as hopelessly old-fashioned. They argue that it is not necessary for the workers to take power, and instead recommend the masses to take power locally: to set up model communities that will by-pass the capitalist state and the bourgeois system altogether. They thus unwittingly repeat the utopian mistakes of Robert Owen - almost two centuries later!

For Robert Owen there was some excuse for committing this error. For the "modernists" of Socialism of the 21st Century there is no excuse whatever. They seek to drag the movement back to its prehistory. Marx and Engels approached the matter in an entirely different way. For the first time they explained that socialism was not just a good idea but the product of the development of society. For the first time they gave a scientific-materialist explanation of socialism, not an utopian-idealist one. Now Heinz Dieterich wants us to abandon the scientific standpoint of Marxism and regress to the old, discredited ideas of the utopian socialists. This is like advocating that an adult should forget everything he or she has learned in the course of his life and return to the embryonic stage of development. Children are charming precisely because of their naivety, but grown people who return to their infancy are not charming at all but only childish.

In the later part of his life Robert Owen tried to rectify his mistake. He abandoned the idea of communist colonies and instead returned to England, where he played a significant role in setting up a trade union. He advocated the formation of a single national confederation (the Grand National Consolidated Trade Union, 1834), and even pioneered the idea of a general strike, which he called the "grand national holiday". In all of this, Robert Owen showed himself to be far superior to those "clever" 21st Century utopians who imitate the weak side of Owen but are incapable of learning from his strong side.

Our modern day utopians vaguely recall that Robert Owen was responsible for the creation of the co-operative movement, and they are passionately fond of co-operatives, which they see as a convenient alternative to the workers taking power. But they are not aware that, in the first place, the British workers formed co-operatives as part of the strike movement - in order to provide the workers' families with cheap food during strikes. In the second place, Owen was especially interested in workers' production co-operatives, the first of which was established in Rochdale in 1844. Here, for the first time, it was demonstrated in practice that the workers can run industry without the bosses. That is a revolutionary message that was far ahead of its time. And even today co-operatives can play an important role in a planned economy, once the workers have taken power. But to put forward the idea of co-operatives as an alternative to workers' power and nationalization of the means of production is entirely reactionary.

Instead of a nationalized planned economy Dieterich advocates a mixed economy based on co-operatives. The movement towards factory occupations and workers' control in Latin America shows that the workers, through their own experience, are moving in the direction of socialism. The reformists are alarmed by this movement, which threatens to go beyond the limits of capitalism and calls into question the sacred rights of private property. Where they do not openly oppose workers' control, they try to water it down, empty it of its revolutionary content, and divert it into safe channels that do not threaten capitalism and the market economy. They use formulas like "co-management" (cogestión) and co-operation to confuse the workers and divert their attention away from workers' control and nationalization.

When Marx threw himself into the activities of the International Working Men's Association, he wrote to Engels that the movement had been set back so much by the defeat of the 1848 revolutions that he could no longer use the revolutionary language of The Communist Manifesto. "It will be necessary to be fortiter in re, suaviter in modo" - bold in content and mild in manner. [1] An excellent example of his approach is the Inaugural Address to the IWMA in 1864. He welcomes the growth of the co-operative movement as an advance for the workers' movement. But to secure the gains and win the benefits that co-operation aspires to, he skilfully shows how the working class must ultimately take power.

"But there was in store a still greater victory of the political economy of labour over the political economy of property. We speak of the co-operative movement, especially the co-operative factories raised by the unassisted efforts of a few bold ‘hands'. The value of these great social experiments cannot be overrated. By deed, instead of by argument, they have shown that production on a large scale, and in accord with the behest of modern science, may be carried on without the existence of a class of masters employing a class of hands; that to bear fruit, the means of labour need not be monopolised as a means of dominion over, and of extortion against, the labouring man himself; and that, like slave labour, like serf labour, hired labour is but a transitory and inferior form, destined to disappear before associated labour plying its toil with a willing hand, a ready mind and a joyous heart. In England, the seeds of the co-operative system were sown by Robert Owen; the working men's experiments, tried on the Continent, were, in fact, the practical upshot of the theories, not invented, but loudly proclaimed, in 1848.

"At the same time, the experience of the period from 1848 to 1864 has proved beyond doubt (what the most intelligent leaders of the English working class already maintained in 1851-52, regarding the co-operative movement) that however excellent in principle, and however useful in practice, co-operative labour, if kept within the narrow circle of the casual efforts of private workmen, will never be able to arrest the growth in geometrical proportion of monopoly, to free the masses, nor even to perceptibly lighten the burden of their miseries. It is perhaps for this very reason that plausible noblemen, philanthropic middle-class spouters and even keen political economists, have all at once turned nauseously complimentary to the very co-operative labour system they had vainly tried to nip in the bud by deriding it as the utopia of the dreamer, or stigmatising it as the sacrilege of the socialist. To save the industrious masses, co-operative labour ought to be developed to national dimensions and, consequently, to be fostered by national means. Yet the lords of the land and the lords of capital will always use their political privilege for the defence and perpetuation of their political monopolies. So far from promoting, they will continue to lay every possible impediment in the way of the emancipation of labour. Remember the sneer with which, last session, Lord Palmerston put down the advocates of the Irish Tenants' Rights Bill. The House of Commons, cried he, is a house of landed proprietors.

"To conquer political power has therefore become the great duty of the working classes." [2]

These words could be applied with every justification to Dieterich and Peters. In Venezuela today the genuinely revolutionary idea of Robert Owen is summed up by the slogan launched by President Chávez: "Factory closed, factory occupied." The workers have occupied one factory after another and run them under workers' control. If the leaders of the trade unions had been worthy of the name they would have immediately drawn up a list of the factories named by the President and called on the workers to occupy them and demanded they be nationalized. Unfortunately, they did not do this. As a result, a golden opportunity was lost. Some of those factories that were taken over by the workers became co-operatives. The result was predictable. In many cases these co-operatives were run on capitalist lines, since they are forced to operate in market conditions. There has inevitably been a tendency of the leaders of such enterprises to rise above the workforce, acquire a privileged position and become corrupt, acting just like the former bosses or worse. This has happened many times in the history of the co-operative movement beginning with the co-operatives set up by Robert Owen in the 19th century. Yet this is the model that Heinz Dieterich holds up as a shining example of "Socialism of the 21st Century"!

These great pioneers of our movement, despite the limitations of their utopian views, anticipated the ideas of Marx and Engels. The main weakness of utopian socialism was that it did not set out from the objective contradictions of capitalism to explain the necessity of socialism. Marx and Engels, on the contrary, explained that the development of the productive forces and the socialization of labour under capitalism created the material conditions for the working class to transform society along socialist lines.

All the utopians saw a classless society as a desirable end that one must strive for. It could be brought about only when the human race accepted certain precepts and dogmas worked out by certain individuals. In this sense, Comrade Dieterich is a direct descendant of the utopian school, although only of its weakest, most outmoded and retrograde features. Marx and Engels, on the other hand, explained that socialism must have a material basis, and that this could only be created by the development of the productive forces under capitalism.

For the utopian socialists, the way to usher in the new society was education and propaganda, that is, by the educational work of individuals and institutions. The class struggle did not enter into it. That is also very much the point of view of Heinz Dieterich and his co-thinkers, as we shall see. Marx insisted that the emancipation of the working class is the task of the workers themselves. On the contrary, the utopians (including the 21st Century utopians) do not see the workers as the fundamental force for changing society (that is a role they have reserved for themselves), but as little children who must be "educated". And who shall do the educating? Why, the "educated" people, of course!

In Venezuela, these ladies and gentlemen never tire of telling us that the "conditions for socialism are absent because the level of consciousness of the masses is too low." I have on more than one occasion been obliged to listen to the pontificating of these sorry ex-communists lecturing to the workers and berating them for their "low level of consciousness" and their lack of understanding of socialism. These are the very same workers who at every decisive stage of the Revolution, when it was in mortal danger, saved it by their marvellous movement, when these sorry "teachers" were hiding under the bed with the blanket over their head.

For Marx and Engels, and above all for Lenin and Trotsky, the abolition of capitalism requires the active participation of the majority of the population - that is, the working class. Socialism is democratic or it is nothing. Of course, when Marxists speak of democracy we have in mind, not the caricature of bourgeois formal democracy but a genuine democracy where industry, society and the state are controlled by the working class.

Marx, Dieterich and the utopian socialists

The utopians (and Heinz Dieterich) treat socialism from the standpoint of distribution, whereas distribution and exchange cannot be considered apart from production. In the words of Marx: "the so-called relations of distribution are themselves relations of production". [3] Even in prehistoric times, before goods could be bartered they first had to be produced. But exchange in the form of barter has an accidental character, as we have seen. A particular tribe has a surplus of dried fish, skins or stone axes, and exchanges the surplus for the surplus of another tribe. What is exchanged in barter is not commodities (exchange values) but use values. They may be exchanged above or below their value, since exchange at this level is purely accidental. It is therefore incorrect to say that at this stage there was equal exchange. On the contrary, in nine cases out of ten barter will produce unequal exchange.

Whereas in the period of primitive tribal communism people produced use values - that is to say, objects for their own consumption - and exchange was an exceptional activity carried on at the margins of society, under capitalism all production has as its aim the realization of exchange value: goods are produced in order to be sold at a profit. Only under capitalism does the production of commodities (exchange values) become the normal mode of production.

In essence, Dieterich and Peters would like to have capitalism without its exploitative features. They would like prices to express true value. They would like capitalists to accept the wages of equivalence and renounce profits. They would like to replace the big monopolies with small associations of producers organized in co-operatives. They would like so many things! Alas! We cannot always have what we would like...Marx explains in his preparatory notebooks for Capital (the Grundrisse) that it is impossible directly to express labour time as price:

"Thus, although money owes its existence only to the tendency of exchange value to separate itself from the substance of commodities and to take on a pure form, nevertheless commodities cannot be directly transformed into money; i.e. the authentic certificate of the amount of labour time realized in the commodity cannot serve the commodity as its price in the world of exchange values." [4]

Marx was very well aware of information technology, which already in his day had taken great strides forward. Indeed some modern economists have pointed out that the invention of the telegraph, together with railways and steamships had a far greater effect in binding together the world market ("globalization") than computers and the internet. However, none of these inventions have removed the central contradictions of capitalism. On the contrary, they have only created the conditions for reproducing these contradictions on an ever vaster scale, preparing the way for even deeper and more catastrophic crises in the future.

Under capitalism the worker's product is alienated from him and becomes converted into Capital, in which the worker's labour confronts him as an alien force. As long as this remains the case, all the categories of political economy will continue to have a contradictory and mystified character. Only in a socialist planned economy will it be possible to arrive at a rational economic system in which the anarchy of the market will be replaced by the conscious decision-making of men and women. Things will no longer control people but people will control their own lives and destinies. However, as long as capitalism continues to exist - that means, for the benefit of Dieterich and Peters, as long as there is private ownership of the means of production and exchange - it is impossible to have a rational economic system.

Under capitalism, for example, money is not a measure of exchange value but only a medium of exchange, which is histori cally evolved but which is ultimately expressed by gold. Prices are determined by supply and demand on the world market, which involves the constant interchange of a vast number of commodities, shares, etc. every second of the day. It is this spontaneous interconnection, "which is independent of the knowing and willing of individuals, and which presupposes their reciprocal independence and indifference" which constitutes the anarchy of capitalist production. The spontaneous development of the world market is one of the main achievements of capitalism, as Marx explains in The Communist Manifesto:

"The need of a constantly expanding market for its products chases the bourgeoisie over the entire surface of the globe. It must nestle everywhere, settle everywhere, establish connections everywhere.

"The bourgeoisie has through its exploitation of the world market given a cosmopolitan character to production and consumption in every country. To the great chagrin of Reactionists, it has drawn from under the feet of industry the national ground on which it stood. All old-established national industries have been destroyed or are daily being destroyed. They are dislodged by new industries, whose introduction becomes a life and death question for all civilized nations, by industries that no longer work up indigenous raw material, but raw material drawn from the remotest zones; industries whose products are consumed, not only at home, but in every quarter of the globe. In place of the old wants, satisfied by the production of the country, we find new wants, requiring for their satisfaction the products of distant lands and climes. In place of the old local and national seclusion and self-sufficiency, we have intercourse in every direction, universal inter-dependence of nations. And as in material, so also in intellectual production. The intellectual creations of individual nations become common property. National one-sidedness and narrow-mindedness become more and more impossible, and from the numerous national and local literatures, there arises a world literature."

It is quite true that capitalism achieved this through the most brutal methods and that the existence of the world market ("globalization") under capitalism is a means of enslavement and exploitation of millions of workers and peasants. Nevertheless, from a Marxist point of view it is a progressive development because it lays the basis for a qualitatively higher stage of human development - world socialism. What is needed is not a sentimental-moralistic "anti-globalization" but a conscious and scientific analysis and a world-wide struggle against capitalism and imperialism for international socialism. In reality the idea of Peters and Dieterich presupposes the return to a stage of history that has passed beyond recall. It expresses the yearning of the petty bourgeois for a return to small-scale production (the only kind of production the petty bourgeois can understand). Marx answers this petty bourgeois philistinism thus:

"The degree and the universality of the development of wealth where this individuality becomes possible supposes production on the basis of exchange values as a prior condition, whose universality produces not only the alienation of the individual from himself and from others, but also the universality and the comprehensiveness of his relations and capacities. In earlier stages of development the single individual seems to be developed more fully, because he has not yet worked out his relationships in their fullness, or erected them as independent social powers and relations opposite himself. It is as ridiculous to yearn for a return to that original fullness as it is to believe that with this complete emptiness history has come to a standstill. The bourgeois viewpoint has never advanced beyond this antithesis between itself and this romantic viewpoint, and therefore the latter will accompany it as legitimate antithesis up to its blessed end.)" [5]

These words might have been written with Heinz Dieterich specifically in mind.


The class content of this utopian socialism is that of the middle class, which stands between the bourgeoisie and the proletariat. The petty bourgeois envies and hates the big capitalists who are crushing them through unequal competition, but they also fear the working class into which they are constantly being pushed. The standpoint of the proletariat is that of collective class struggle. The worker learns the virtues of organization and collectivism through the very conditions of factory life. A peasant can say "I grew that potato", but no individual worker in Ford can say "I made that car". The car was made by the collective efforts of many workers, both inside and outside the factory. That is why it is absurd to pose the question of commodity production in terms of the individual, as Arno Peters tries to do.

We see from this that the so-called theory of equivalence has absolutely nothing in common with the Marxist labour theory of value. In dealing with commodity production Marx did not approach it from the point of view of individual workers. He explains that what we are dealing with is not the concrete labour of a carpenter, a lathe operator or an electrician but labour in general, social labour in the abstract. What we have here is, in fact, only a regurgitation of the pre-Marxist ideas of Proudhon and the utopian socialists. This was the standpoint of petty bourgeois socialism, which attempted to abolish the contradictions of capitalism without abolishing capitalist relations of production. It ignored the class struggle and posed the question of the transformation of society by peaceful reform. Instead of basing itself on the working class it talked in vague language about humanity and the individual - just like Peters and Dieterich.

Individualism is precisely the standpoint of the middle class, the class of small proprietors. The individual peasant cultivates his small plot of land. The individual shopkeeper runs his own business. The individual lawyer runs his own legal company. The individual student competes against all his classmates in exams, and so on. When Peters bases himself on the individual, he appears to be talking common sense, for what can be more concrete and familiar than the individual man and woman? He seems to be saying: let us leave behind all empty abstractions and concentrate instead on the Individual. All men and women have the same rights and must live together like brothers and sisters, receiving the wages of equivalence "independently of the type of activity he carries out."

In reality Peters' Individual is the emptiest of all empty abstractions. This moralistic-utopian rhetoric only serves as a fig leaf to hide the class contradictions in society and thereby banish the awful spectre of class struggle. Bill Gates and the rest of the billionaire owners of industry may all be Individuals, like you and me, but they nevertheless form part of a class that has interests directly opposed to those of the workers and peasants, and will fight with all the means at their disposal to prevent the latter from taking their wealth from them. This is a question that our 21st Century Socialists never deal with, and this is no accident, since their central idea is to prevent revolution by peaceful reform.

Peters claims that in the era of global economy, production is "rooted in the condition that every human being has the same category, the same value and the same rights - includes every individual, independently of the type of activity he carries out." [6] Where does he get this nonsense from? Certainly not from the realities of life in the first decade of the 21st century! It would rather be correct to say that under capitalism every individual worker is equally enslaved to the global market, equally deprived of rights, equally oppressed and exploited, equally stripped of value as an individual human being and equally reduced to a mere object, a "factor of production".

Is it correct, however, to refer in this context to "every individual, independently of the type of activity he carries out?" Bill Gates is also an individual, carrying out the activity of exploiting a very large number of other individuals. Does he really have the same rights as the workers he exploits? Some sentimental people never tire of repeating the platitude that money does not buy happiness and that rich people are never happy.

This reminds us of something Hegel wrote: "Thus in modern times it has been demonstrated ad nauseam that princes are generally unhappy on their thrones; in consideration of which the possession of a throne is tolerated, and men acquiesce in the fact that not themselves but the personages in question are its occupants." [7] It is possible to say that the capitalists are just as alienated as the workers. But there is a slight difference here: the capitalists are quite content with their alienated state, as long as they can enjoy the wealth and privileges it brings them. Indeed, they will fight every attempt to save them from this alienation, even when Peters and Dieterich explain the wonders of 21st Century Socialism to them so touchingly.

Where Dieterich's ideas come from

Dieterich's "revolutionary theory of the future" turns out to be as old as the hills. His socialism of the 21st Century turns out to be no more than the idealized expression of capitalist economic relations that were long ago described by Ricardo, never mind Marx. Unable to offer any real analysis or perspective for the new generation, Comrade Dieterich has rummaged around in the dustbin of history, where he has found a few old ideas from the prehistory of the socialist movement, which he has dusted down and now presents as the very last word in modernity. Dieterich writes:

"Eight years after the death of Ricardo, John Gray developed the Doctrine of Wage-Money as the Realization of the right to the integral product of Labour, created by Robert Owen, into a coherent system; after having assured the labour-time spent, a central bank issues certificates that refer to one hour's labour, one day's labour, one week's labour, and which are valid as payment for a product requiring the same amount of labour. This consistent comparison of the value of a product with the amount of labour-time contained in each product, deduces from the theory of labour the exact measure that Ricardo was looking for. And it is also in agreement with the theory of [Adam] Smith, who says in his main work: ‘Of equal quantities of work it can be said that in all places and at all times, it is of equal value to the worker'." [8]

Dieterich quotes John Gray approvingly. But it appears that he did not read the works of Gray himself, but only learned of their existence second-hand, apparently following that other great modern genius Arno Peters. Since the punctuation marks are so confused here, it is impossible to see where Peters ends and Dieterich begins. But since one is as confused as the other, this really does not make much difference. Marx answered Gray's utopian theories even before he wrote Capital. He deals with them extensively in his preparatory manuscripts known as the Grundrisse, in the Chapter on Money. What does this theory consist of? It sets out from the following idea: under capitalism, the worker does not receive the full fruits of his or her labour, because the capitalist retains part of it in the form of surplus value. This is achieved by means of unequal exchange. The solution is therefore to alter the nature of exchange, abolishing its unequal character and providing every worker with the full value of his labour.

How are we to arrive at this system of equal exchange? Every worker will receive a receipt (chit) that represents the actual amount of labour-time he has used in the production of commodities. These labour-chits are issued by a special bank or labour exchange and will circulate instead of money, which will thus be abolished. Exchange will therefore be retained but it will lose its exploitative character and become transformed into equal exchange. This idea, which was already antiquated in the 19th century, is supposed to lay the basis for a non-exploitative and equal society - otherwise known as Socialism of the 21st Century.

Heinz Dieterich introduces the idea of equal exchange in an attempt to overcome the contradictions of capitalism without abolishing it. In the first place, the existence of exchange (even "equal exchange") presupposes the existence of capitalist market relations - of exchange value and money. The fact that the latter is given another name (labour chits or whatever) does not change this, since, contrary to the illusions of university socialists, one does not change the essence of a thing merely by changing its name. In common with the utopian socialists Owen and Gray, comrade Dieterich does not understand the nature of money. But that is another issue.

The theory of equal exchange was developed, not by Marx, but by John Bray, a follower of Owen (1809-1897), not to be confused with John Gray, who we have already mentioned. A printer by trade, Bray developed his theory of labour money following in the footsteps of Ricardo. Here we find the origin and genesis of the economic theories of the Socialism of the 21st Century - in 1839! Dieterich merely copied the idea of equal exchange and a labour bank from this 19th century English utopian and presented it as a wonderfully novel idea for the new millennium.

Comrade Dieterich does not emerge very well from a comparison between his convoluted prose and the simple, clear, precise language of John Bray. Nor was our Heinz the first one to plagiarize the utopian socialist Bray. Proudhon beat him to it over 150 years ago. He was answered by Marx in one of the pioneering works of scientific socialism, The Poverty of Philosophy. Here Marx pays tribute to the brilliant originality of Bray, particularly his remarkable pamphlet Labour's Wrongs and Labour's Remedies. But he also subjects the utopian idea of equal exchange and labour banks to a sharp criticism - exactly the same criticism that can be made against the Founder of 21st Century Socialism. Marx quotes extensively from Bray's remarkable work, Labour's Wrongs and Labour's Remedy, which was published in Leeds in 1839:

"It is labour alone which bestows value...

"Every man has an undoubted right to all that his honest labour can procure him. When he thus appropriates the fruits of his labour, he commits no injustice upon any other human being; for he interferes with no other man's right of doing the same with the produce of his labour..."

"From the very nature of labour and exchange, strict justice not only requires that all exchangers should be mutually, but that they should likewise be equally, benefited. Men have only two things which they can exchange with each other, namely, labour, and the produce of labour...

"If a just system of exchanges were acted upon, the value of articles would be determined by the entire cost of production; and equal values should always exchange for equal values. If, for instance, it takes a hatter one day to make a hat, and a shoemaker the same time to make a pair of shoes - supposing the material used by each to be of the same value - and they exchange these articles with each other, they are not only mutually but equally benefited: the advantage derived by either party cannot be a disadvantage to the other, as each has given the same amount of labour, and the materials made use of by each were of equal value. But if the hatter should obtain two pair of shoes for one hat - time and value of material being as before - the exchange would clearly be an unjust one. The hatter would defraud the shoemaker of one day's labour; and were the former to act thus in all his exchanges, he would receive, for the labour of half a year, the product of some other person's whole year. We have heretofore acted upon no other than this most unjust system of exchanges - the workmen have given the capitalist the labour of a whole year, in exchange for the value of only half a year - and from this, and not from the assumed inequality of bodily and mental powers in individuals, has arisen the inequality of wealth and power which at present exists around us. It is an inevitable condition inequality of exchanges - of buying at one price and selling at another - that capitalists shall continue to be capitalists, and working men to be working men - the one a class of tyrants and the other a class of slaves - to eternity...

"The whole transaction, therefore, plainly shows that the capitalists and proprietors do no more than give the working man, for his labour of one week, a part of the wealth which they obtained from him the week before! - which amounts to giving him nothing for something...

"The whole transaction, therefore, between the producer and the capitalist is a palpable deception, a mere farce: it is, in fact, in thousands of instances, no other than a barefaced though legalized robbery." [9]

"...The gain of the employer will never cease to be the loss of the unemployed - until the exchanges between the parties are equal; and exchanges never can be equal while society is divided into capitalists and producers - the last living upon their labour and the first bloating upon the profit of that labour.

"It is plain that, establish whatever form of government we will... we may talk of morality and brotherly love... no reciprocity can exist where there are unequal exchanges. Inequality of exchanges, as being the cause of inequality of possessions, is the secret enemy that devours us." [10]

"Where equal exchanges are maintained, the gain of one man cannot be the loss of another; for every exchange is then simply a transfer, and not a sacrifice of labour and wealth. Thus, although under a social system based on equal exchanges, a parsimonious man may become rich, his wealth will be no more than the accumulated produce of his own labour. He may exchange his wealth, or he may give it to others... but a rich man cannot continue wealthy for any length of time after he has ceased to labour. Under equality of exchanges, wealth cannot have, as it now has, a procreative and apparently self-generating power, such as replenishes all waste from consumption; for, unless it be renewed by labour, wealth, when once consumed, is given up for ever. That which is now called profit and interest cannot exist as such in connection with equality of exchanges; for producer and distributor would be alike remunerated, and the sum total of their labour would determine the value of the article created and brought to the hands of the consumer...

"The principle of equal exchanges, therefore, must from its very nature ensure universal labour." [11]

From these quotes it is perfectly obvious from where our friends Peters and Dieterich have got the idea of equal exchange. While paying tribute to Bray's pioneering work, Marx already pointed out the utopian nature of his ideas:

"In principle, there is no exchange of products - but there is the exchange of the labour which co-operated in production. The mode of exchange of products depends upon the mode of exchange of the productive forces. In general, the form of exchange of products corresponds to the form of production. Change the latter, and the former will change in consequence. Thus in the history of society we see that the mode of exchanging products is regulated by the mode of producing them. Individual exchange corresponds also to a definite mode of production which itself corresponds to class antagonism. There is thus no individual exchange without the antagonism of classes.

"But the respectable conscience refuses to see this obvious fact. So long as one is a bourgeois, one cannot but see in this relation of antagonism a relation of harmony and eternal justice, which allows no one to gain at the expense of another. For the bourgeois, individual exchange can exist without any antagonism of classes. For him, these are two quite unconnected things. Individual exchange, as the bourgeois conceives it, is far from resembling individual exchange as it actually exists in practice.

"Mr. Bray turns the illusion of the respectable bourgeois into an ideal he would like to attain. In a purified individual exchange, freed from all the elements of antagonism he finds in it, he sees an ‘equalitarian' relation which he would like society to adopt generally.

"Mr. Bray does not see that this equalitarian relation, this corrective ideal that he would like to apply to the world, is itself nothing but the reflection of the actual world; and that therefore it is totally impossible to reconstitute society on the basis of what is merely an embellished shadow of it. In proportion as this shadow takes on substance again, we perceive that this substance, far from being the transfiguration dreamt of, is the actual body of existing society." [12]

The idea of "equal exchange" is, to quote Marx, "nothing but the reflection of the actual world". In other words, the idea of equal exchange is not the recipe for a new socialist society, but only an attempt to modify the existing economic relations of capitalism, while retaining its essence (exchange of commodities). It is the eternal dream of the petty bourgeois: the dream of constructing capitalism with a human face. This utopian scheme was false in theory and disastrous in practice. We did not have to wait for the 21st century to find this out. Unlike comrade Dieterich, whose utopias, like all the productions of the university leftists, are confined to paper, the 19th century utopians had the courage of their convictions and actually attempted to put their theories into practice. Robert Owen bankrupted himself trying to establish ideal communist communities in the USA. Bray's supporters actually established equitable labour-exchange bazaars in London, Sheffield, Leeds and other towns in England. All ended in failure and the loss of considerable amounts of money.

Proudhon put the same idea forward. He argued that a certain quantity of labour is equivalent to the product created by this same quantity of labour. Each day's labour is worth as much as another day's labour. That is to say, if the quantities are equal, one man's labour is worth as much as another man's labour: there is no qualitative difference. Therefore, with the same quantity of work, one man's product can be given in exchange for another man's product. All men are wageworkers getting equal pay for an equal time of work. Perfect equality rules the exchanges and everyone is happy. In 1849 Proudhon set up a new Exchange bank in Paris, strictly on the lines advocated by Dieterich and Peters. What happened? It collapsed almost immediately and its founder found himself in court. The idea of "equal exchange" that is now being touted as the panacea for 21st Century Socialism thus revealed itself to be bankrupt a long time ago - in the most literal sense of the word. As the French say: "Plus ça change, plus c'est la même chose!" (The more things change, the more they stay the same.)


<< 4. History and economics Contents 6. An outline of Marxist economics >>


[1] Marx and Engels, Selected Correspondence, Moscow, 1965, p. 149.
[2] Marx and Engels, Collected Works, Vol. 20, p.11, my emphasis, AW.
[3] Marx, Grundrisse, p. 153.
[4] Marx, Grundrisse, p 160, Penguin, 1973, my emphasis, AW.
[5] See Marx, Grundrisse, p. 162.
[6] Dieterich, El Socialismo del Siglo XXI, p. 100.
[7] Hegel, The Philosophy of History, III. Philosophic History § 33.
[8] Dieterich, El Socialismo del Siglo XXI, p.90, emphasis in original.
[9] Bray, Labour’s Wrongs and Labour’s Remedy, pp. 45, 48, 49 and 50.
[10] Ibid. pp. 51 and 52.
[11] Ibid., pp. 109-10.
[12] Quoted in Marx, Poverty of philosophy, International Publishers, New York 1963 pp. 70-72.