David Harvey on Proudhon

This blog notes three Proudhon texts going on-line, two of which are in Property is Theft! and another newly translated although a previous partial translation appeared there. These preface a discussion of leading Marxist David Harvey’s account of Proudhon’s ideas in his recent book Marx, Capital and the Madness of Economic Reason (London: Profile Books, 2017). They are related, in-so-far as Harvey claims to be critiquing Proudhon’s System of Economic Contradictions and the texts are a new, complete translation of its Conclusion and extracts from Proudhon’s attempt to implement his ideas during the 1848 Revolution, Organisation of Credit and The Bank of the People.

I’ve discussed Proudhon and Marx in my introduction to Property is Theft! and elsewhere, in blogs, reviews and articles. I think it important simply because Marx’s account is taken as accurate, as seen by Harvey’s book. So as long as Marxists regurgitate Marx, I will return to the subject.

Overall, as more of System of Economic Contradictions is translated the more it becomes increasingly easy to understand why Proudhon seemed indifferent to replying to Marx – anyone reading his book would soon see the weakness of Marx’s. Then, of course, in February 1848 the revolution broke out and he became somewhat busy. Over time, Marx’s influence rose and Proudhon’s fell (partly for good reasons – such as his reformism and sexism). Still, it meant that fewer and fewer people read the original and Marx’s more accessible work became the main source for his ideas. Which is ironic, given how much Marx distorts Proudhon’s ideas. So, for example, we have the following commentary on Marx’s book:

“Much of it reads like a theological dispute akin to those at the Berlin Doctor Club, including the constantly repeated allegation that Hegel—and with him, Proudhon—was reducing everything to logical categories instead of proceeding from real conditions.” (Rolf Hosfeld, Karl Marx: An Intellectual Biography [New York / Oxford: Berghahn Books, 2013], 62)

Proudhon’s Conclusion is of note for his summary of his methodology which is far from Marx’s account:

“Such is the progress of our knowledge: we start from the sense to rise to the abstract; the ladder of our reason has its foot on the earth, crosses the sky and is lost in the depths of the mind.” (Système des contradictions économiques ou Philosophie de la misère [Paris: Guillaumin, 1846] II: 507)

This repeats comments made throughout System of Economic Contradictions and actually notes that Hegel’s apparent idealism cannot help but be rooted in the “real conditions”:

“And we see that this Titan of philosophy [Hegel] attempts to reverse the eternal dualism by dualism itself; to establish identity on contradiction; to draw the being from nothing, and, with the aid of this sole logic, to explain, prophesy – what should I say? – to create nature and man! No other, before him, had penetrated so deeply the innermost laws of being; none had illuminated with so lively a light the mysteries of reason. He succeeded in giving a formula which, if it is not all of science, nor even all logic, is at least the key to science and logic. But we have glimpsed quite quickly that even its author had only been able to construct that logic by constantly mixing in experience and taking from it his materials. All his formulas followed observation, but never preceded it, and since, according to the system of the identity of thought and being, there was no longer anything to await from philosophy, the circle was closed, and it was demonstrated once and for all that science without experience is impossible; that if the self and the non-self are correlates, necessary to one another, inconceivable without one another, they are not identical; that their identity, as well as their reduction in an elusive absolute, is only a view of our intelligence, a postulate of reason, useful in certain cases for reasoning, but without the least reality; finally that the theory of contraries, of an incomparable power in order to control our opinions, to discover our errors and to determine the essential character of the true, is not however the unique form of nature, the sole revelation of experience, and consequently the sole law of the mind.” (Système II: 220-1)

Proudhon likewise notes that the mind plays its part in evaluating the facts the senses gather, which means he rejects crude empiricism while based himself on the facts around him. As I discuss in my review, Marx eventually embraced Proudhon’s methodology which means, ironically, The Poverty of Philosophy is also a critique of Capital. This will not stop Marxists referring to both positively even though they argue radically different things.

This joins the long list of issues which Marx denounces Proudhon which he later acknowledges were correct. Thus, after attacking Proudhon for taking division of labour as the starting point for his analysis, Marx later admits “it is correct to say that individual exchange presupposes division of labour.” (A Contribution to the Critique of Political Economy [London: Lawrence & Wishart, 1970], 60) He also makes the same comment repeatedly in Capital.

Moreover, as one scholar had to admit, in terms of “the origins of exchange,” Marx in 1847 “still fails to provide any coherent explanation for this himself, despite taxing Proudhon for the same omission.” Twenty years later, in Capital, “his own analysis of the subject is rather poorly developed” and so “the origins of exchange still remain obscure.” (Ali Rattansi, Marx and the division of labour [London: Macmillan, 1982], 94, 131) Another is more forthcoming:

“Ironically, Proudhon recognised correctly and clearly this origin [of exchange value] as the […] passage quoted by Marx indicates […] Thus exchange value is a necessary epiphenomenon of a production system which operates through a social division of labour and a subsequent exchange mechanism through which the needs profile of each participant in the totality of production is met. This is the explanation for use values appearing as exchange values under capitalism. Given Marx’s earlier analysis of this proposition, his sarcasm against Proudhon […] was inappropriate […] As Marx knew well, and would later develop further, there was considerably more than a tautology in this fundamental insight.” (Alan Oakley, Marx’s Critique of Political Economy: intellectual sources and evolution, 1844 to 1860 [London: Routledge & Kegan Paul, 1984] 1: 110-1)

This will not be the first time we discover Marx lambasting Proudhon for an analysis which Marx later quietly takes up.

This is hardly surprising. Think about Marx’s critique in 1847, namely that Proudhon does not provide a detailed account of the rise of the division of labour. In other words, that Proudhon was not an anthropologist. More, as Marx also lambasted Proudhon for not providing a historical account of the division of labour, Proudhon also needed to be a historian. Then, Marx also bemoans that Proudhon utilises categories to organise his book and argues that Proudhon himself refutes this by mentioning other categories. Also, the use of categories is an abstraction and all abstraction is idealism.

Ignoring that Proudhon acknowledges categories are interrelated and that his categories are based on evidence rather than ideals, let us ponder what Marx is arguing in 1847 – that a critique of capitalism requires the critic to present an analysis of all categories at the same time along with their interwoven histories. So, an economics book must discuss everything all at once along with their histories.

Given this frankly impossible task, it comes as no surprise that Marx’s long promised book on economics never appeared. He was working on it – or claiming to work on it – when System of Economic Contradictions came out and was still doing so ten years later. Then, around 1857, he reconsidered the use of categories – which he had attacked in 1847 – and had a break through. Rather than attempt to discuss everything and their history all at once, he saw the benefit of breaking up the analysis into categories.

However, I digress somewhat.

Of course, the Conclusion has its strengths and weaknesses like the rest of the book. Some of his sexism is apparent, along with his reformism. It contains important points amidst material whose purpose is less clear. It shows his familiarity with Adam Smith and his engagement with that legacy, notably seeking to explain why under capitalism the “produce of labour constitutes the natural recompense or wages of labour” is not realised. (An Inquiry into the Nature and Causes of the Wealth of Nations [Chicago: University of Chicago Press, 1976] I: 72) Thus we find him summarising:

“Work is free. But what freedom, for heaven’s sake! Freedom for the proletarian is the ability to work, that is, of being robbed again; or not to work, that is to say to die to hunger! Freedom only benefits strength: by competition, capital crushes labour everywhere and converts industry into a vast coalition of monopolies.” (Système II: 519)

Likewise, when discussing his opposition to strikes (which subsequent anarchists rightly disagreed with), he notes that the bosses are “the oppressors of humanity; may the vengeance of heaven crush them!” (Système II: 521) So he clearly understands the class nature of capitalism and aims to end its oppression and exploitation, making important contributions to our understanding of that system. I note this simply because the contrary is often suggested by opponents.

Sadly, Proudhon’s contributions are hidden for two reasons. First, little has been translated. Second, the distortions that Marx inflicted upon him.

The former is being addressed, slowly but surely. This will allow anarchists and other libertarian socialists to understand and draw upon – critically, of course – his ideas and build upon his legacy. Hopefully my translation of the Conclusion of Système shows the importance of both (that is, critically drawing upon his ideas). And I should note here that few previously translated extracts of the conclusion by Clarence L. Swartz did appear in Property is Theft! but this is a tiny part of the chapter and, moreover, some errors appeared in the translation – most glaringly, not realising that “la division parcellaire” referred to extreme division of labour and instead it became “the subdivision of real estate”!

The latter is, I feel, the main hindrance simply because Marxists regurgitate Marx’s criticism as if it were an impartial account of his ideas rather than the work of someone seeking to discredit a rival by any means possible.

This is a wider problem, for anarchists also accept this. Kropotkin, for example, suggested Proudhon advocated labour-notes and I also thought this was the case for many years. Then I started to read Proudhon and become puzzled by the obvious limitations in labour-notes, problems which Proudhon – who was obviously an intelligent person – seemed not to see. I did not go into the subject very much in my introduction to Property is Theft! beyond repeating Kropotkin’s critique and indicating that most firms price their goods on a cost-plus-mark-up basis so suggesting Marx’s “just price” commentary was flawed (labour-notes get mentioned more in An Anarchist FAQ, but usually not in relation to Proudhon). Anyway, I decided to get to the root of the puzzle and looked into it more and realised the root of the puzzle – Marx was wrong, Proudhon’s “Constituted Value” was not pricing in labour notes. Then I had a much closer look at The Poverty of Philosophy and was shocked by the mendacity expressed in it. However, I digress.

Marx’s account still circulates. It is still repeated by Marxists in their works, so helping skew the perspective of new generations. As an example, David Harvey discusses Proudhon in the chapter “Money as the Representation of Value” of his latest book: Marx, Capital and the Madness of Economic Reason (London: Profile Books, 2017), 54-60). This shows all the problems with accounts of Proudhon’s ideas the non-anarchist comes across.

It is important to note that despite numerous footnotes, Harvey at no time references a single work by Proudhon. This is strange, given that he is meant to be contrasting Proudhon’s ideas with Marx’s. In reality, he does no such thing – he simply presents, with some added commentary, Marx’s critique of Proudhon. This could be acceptable if Marx presented an honest account of the Frenchman’s thought, but as I’ve shown elsewhere he does not.

So we have a past distortion regurgitated for current readers, which is unfortunate to say the least. It is, however, indicative of Marxist scholarship which habitually repeats the holy texts without question. I will go through Harvey’s account and show its flaws, all of which flow back to Marx. Along the way I will discuss the contradictions in his analysis and the problems with his vaguely defined alternative to mutualism (or market socialism). I will also indicate how libertarian communism addresses these issues.

Harvey starts with some context:

So how, then, are we to understand the dialectical relation between value and its representation as money? This was a deeply contested political question in Marx’s time. In the late 1840s, long before he had worked out many of the central ideas of Capital, Marx found himself at odds politically not only with Ricardian socialists in Britain but far more importantly with the imposing figure of Proudhon who had many followers among the French artisans. Proudhon and his followers posed the following perfectly reasonable question: why are capitalists so rich and the working classes so impoverished when all the leading political economists of the time - most notably David Ricardo - insisted that economic value was produced exclusively by labour?

In and of itself, this is a reasonable summary. The socialists in the first half of the nineteenth century did pose that question and provided differing answers. However, the so-called “Ricardian socialists” were hardly a political force any more. Marx invoked them simply in an attempt to discredit Proudhon, by suggesting his ideas were not original and in so-doing also distorts the ideas of John Bray as well (who was an advocate of central planning, not market socialism, as the book Marx quotes shows).

However, the question is posed correctly – Proudhon, like other socialists, sought to explain why labour does not receive the full product of their labour, why others get rich off their labour when labour alone was the source of value. Sadly, the answer is wrong.

Proudhon concluded that the fault lay in the way that labour value was being represented in the market. The irrationality of money and of market exchange was the crux of the problem.

This is nonsense, albeit oft asserted nonsense. In reality, Proudhon concluded – at an early stage, in 1840’s What is Property? – that workers were exploited because the boss did not pay for the “collective force” produced by the joint action of groups of workers. The worker having “sold and surrendered his liberty” to the proprietor means that “the collective force still remains to be paid.” (Property is Theft! A Pierre-Joseph Proudhon Anthology [Edinburgh/Oakland/Baltimore: AK Press, 2011], 117) In 1846 he repeated and extended this analysis, noting that labour produces a “surplus of labour” which the employer appropriates along with the “collective force.”

Thus exploitation occurred in production, not exchange. The fault lies in wage-labour, not the representation of labour-value on the market. The crux of the problem was not market exchange but rather the exchange of the workers’ liberty and labour for wages. Which, as Harvey knows, is Marx’s own account of how exploitation occurs within a system apparently based on exchange of (labour) equivalents.

This, as we will indicate, explains why Proudhon advocated workers associations (co-operatives), something Harvey denies. I should also note that this false claim, namely that Proudhon was focused on finance capital, is also used by those seeking to link him with the far-right. Harvey, at least, does not raise that nonsense.

What was needed, he suggested, was an alternative way of measuring labour value and setting prices, a way which rested directly on the actual time workers spent making a product. Workers should be paid in labour time-chits, labour hours, or even coins designating the hours of labour actually worked.

This idea is better known as “Labour-Notes” (Harvey’s labour-coins is a new invention) and all this is wrong: the notion that Proudhon advocated “time-chits” or “labour hours” is a myth. To quote a very apt passage by Richard Dawkins on one of his critics:

“Some colleagues have advised me that such transparent spite is best ignored, but others warn that the venomous tone of her article may conceal the errors in its content. Indeed, we are in danger of assuming that nobody would dare to be so rude without taking the elementary precaution of being right in what she said.” (Richard Dawkins, “In Defence of Selfish Genes,” Philosophy, Vol. 56, No. 218. [Oct., 1981], 556)

This is the case here. And please note, Harvey presents no reference to support this claim. In this he follows Marx, who simply asserted that Proudhon sought to apply a utopian interpretation of the theory of labour – namely that price should be set at the labour hours used to create it rather than competition eventually making the price reflect this value. It seems irrelevant that System of Economic Contradictions notes how “Competition is necessary to the constitution of value” and it is “by a series of oscillations between supply and demand” that “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”. (Système I: 188, 87)

During the 1848 he repeated this analysis, polemicising against those socialists – like Louis Blanc – who did aim for a labour-cost based fixed pricing system:

We would determine the cost price! It is almost as if you say: we will find perpetual motion, we will square the circle. The cost price is, in the last analysis, composed of salaries: Now, what is the salary? what is the work day? is the salary measured by the needs of the worker, or by the price the consumer may give for the goods? what is price? what is value? We must always return to that.

The amount of the legal profit would be fixed. Again, it is as if you were saying: we will set the amount of lawful theft. In this profit is like interest, like price, like value: it is determined either by competition of the producers, or by the need of the consumer; it has no legal measure. It must be rejected entirely or admitted in all its possibilities, with all its oscillations.

So as to arrive at a uniform price and to prevent any competition. Monopoly, coalition, inertia [immobilisme]. Price, like value, is essentially mobile, and therefore essentially variable, and which, in its variations, is regulated only by competition, that is, by the faculty which the consumer finds in himself or in others to dispense with the services of the one who overprices [surfait] them. Remove competition, things have no price; value is only a word; exchange is arbitrary; the circulation has lost its pendulum; society, deprived of motive force, stops like a pendulum whose spring is loosen.” (Les Confessions d’un reĢvolutionnaire [Garnier: Paris 1851], 247-8)

For Proudhon, the actual labour-time used to produce a good should not be rewarded but rather the producer should seek his reward in his product. By means of competition, this would ensure that eventually price would reflect labour-costs but he did not think this process could be short-circuited for an “exact knowledge of value […] can be discovered only by competition, not at all by communistic institutions or by popular decree.” (Système I: 189) This applied to income as well:

“In fragmented society and in anarchistic competition, the profit of one consists of the deficit of the other; profit indicates a relationship of rivalry and antagonism peculiar to domestic economy. But where all workers in the same industry, where all industries in the State are associated and interdependent [solidaires], there is no longer any profit. Because if the admissible profit is equal for all, it is null, there is identity between the selling price and the cost price, between the net product and the gross product.” (Confessions, 249)

Of note is his use of anarchy in the negative meaning of the word (as in chaos and disorder), something Proudhon does just as often as using it in a positive way (often in the same periods). As may be expected, he – like Bakunin – was not as consistent in his terminology as later anarchists were, but then he was ploughing new ground and can be forgiven.

This is beside the point. The key thing is that he recognises that it is only under association “that the worker receives a salary equal to his service, neither less nor more [...] Under these conditions, there are neither exploiters nor exploited.” (Confessions, 245-6) This can only happen in association for the workers sell the product of their (collective) labour. For then the selling price is the cost price as all excess returns to labour – and equal for all, in the sense that it reflects labour embodied in products or services created in a working day.

Equality, for Proudhon, does not mean equal outcome but rather outcome only reflective of labour: products exchange for products. As for all genuine socialists, it is a social equality and not an arithmetic one. So the notion, invented by Marx, that he equated different labours to ensure equality in the exchange of labour notes is false. Labour notes are not being exchanged, products are. These will have different prices and so different workers will have different (labour) incomes. Competition would be the means by which high incomes are eroded – as per the labour theory of value expounded by Adam Smith and repeated by Proudhon but with important caveats as he rhetorically explained to French liberal economists:

“The remedy for competition, in your opinion, is to make competition universal. But, in order that competition may be universal, it is necessary to procure for all the means of competing; it is necessary to destroy or modify the predominance of capital over labour, to change the relations between employer and worker, to solve, in a word, the antinomy of division and that of machinery; it is necessary to organise labour: can you give this solution?” (Système I: 207)

Now, there are obvious problems with this market socialism and an honest critic would have based their critique on it. Instead Marx invents the notion that Proudhon advocated payment by labour-notes. Harvey simply regurgitates this nonsense. He is on stronger ground with this:

The Proudhonist movement looked to restructure the money system, organise the supply of free credit, reform central banking and create mutual credit institutions so as to solve the problem of social inequality and restore the rights of labour.

Proudhon did see financial reform as a key means for societal change. Yet this was not seen as an end in itself, but rather as a means of achieving a wider transformation for “the Exchange Bank is the organisation of labour’s greatest asset” and ensures “the new form of society to be defined and created among the workers.” (Property is Theft!, 296, 197) In other words, a means to an end – the organisation of labour, association.

Again, this can be critiqued but in terms of the alternative at the time – state organisation of labour – Proudhon’s solution had the merit of being based on workers’ own self-activity and organisations.

Marx vehemently objected to these ideas in The Poverty of Philosophy (published in 1847). The first part of the Grundrisse, the unpublished notebooks from 1857, is a lengthy rebuttal of the monetary ideas of Alfred Darimon, a follower of Proudhon.

Marx does not discuss credit much in The Poverty of Philosophy and what he does discuss is usually wrong. By that I mean he either misrepresents Proudhon or attacks him for advocating ideas Marx later embraces. If you compare what Proudhon argued to what Marx said he did, much of the book can be ignored. Add those aspects Marx quietly embraces later, and it becomes a short pamphlet at best. As for Darimon, well, not much – if anything – has been translated so we are not best placed to see if Marx distorts his ideas as he did Proudhon. And, needless to say, a “follower” of someone may not have identical ideas on numerous subjects (Marx and Stalin spring to mind!).

The problem Marx had with Proudhon and his followers was their failure to grapple with the social relations that defined value. Under capitalism it is socially necessary labour time and not actual labour time that counts. The ‘socially necessary’ implies the existence of some ‘hidden hand’ or law of motion’ to which both the capitalist and the labourer are subservient.

In other words, Proudhon did not recognise what Marxists call “the law of value” and the role of market forces in driving prices to reflect labour-values. This is nonsense.

I have already provided a few quotes to show that this is not the case. Proudhon was well aware of the importance of competition and how “actual labour-time” does not count. Indeed, he coins a phrase to describe this process: “value varies, and the law of value is unchangeable.” (Système I: 54, 60) Proudhon’s “Constituted Value” is not, as Marx asserted, pricing by labour-time but rather the process by which prices are regulated by labour value.

As early as the Economic and Philosophic Manuscripts of 1844, Marx had concluded that value under capitalism was alienated labour exploited by capital in production, secured by private property and commodity exchange in price-fixing markets.

According to another Marxist, this is not the case. “Neither The Poverty of Philosophy nor the Communist Manifesto, nor Wage Labour and Capital”, Ernest Mandel admits, “contain the idea of surplus-value.” (The formation of the economic thought of Karl Marx: 1843 to ‘Capital’ [London: N.L.B., 1971], 81) Reading The Poverty of Philosophy shows that Mandel is correct, not Harvey, for how else to explain Marx’s assertion that “[t]here is thus no individual exchange without the antagonism of classes.” (Collected Works 6: 144)

As one Marxist economist notes, this “seems to deny the possibility of simple or petty commodity production” and so “Marx’s argument” against the so-called Ricardian socialists was “rather obscure” and this was “especially true of The poverty of philosophy.” (J. E. King, “Utopian or Scientific? A Reconsideration of the Ricardian Socialists”, History of Political Economy vol. 15 no. 3 [1983], 346)

So Harvey’s claim that Marx had recognised that exploitation occurred is false – indeed, he mocked Proudhon in 1847 on this issue:

“Marx made some disparaging remarks about this passage [...] even though Proudhon here anticipated an idea that Marx was to develop as one of the key elements in the concept of labour power, viz. that as a commodity, labour produces nothing and it exists independently of and prior to the exercise of its potential to produce value as active labour.” (Oakley, 118)

Proudhon has recognised that exploitation occurred in production in 1840 with his theory of “collective force” while it took Marx until the late 1850s to realise this and move beyond the focus on exchange (the alienation of the products of labour rather than the labour itself)  which predominated in the 1840s.

These were the conditions that produced the social inequalities and degradations to which labourers were subjected even as they were engaged upon the valorisation of capital.

So not wage-labour? The “in production” comment, while anachronistic, does point to social inequalities of capitalism being the product not of exchange as such but a very specific exchange – the exchange of the workers’ liberty, labour and product for a wage. As analysed first by Proudhon.

The objective of socialist revolution was the radical transformation of the social relations under which workers laboured.

Now, there are two issues here which are jumbled together. This is to do with “social relations under which workers laboured” for there are, if you like, two dimensions here. The first is the hierarchical one, the social relations within production, within the workplace, produced by wage-labour. The second is the horizontal one, the social relations between workplaces.

Proudhon wrote extensively on the first, urging workers associations to eliminate wage-labour. He later termed this “industrial democracy” (indeed, he was one of the earliest, if not the earliest, to use the term). Marx, in contrast, wrote next to nothing on workers management of production as one Marxist had to admit:

“Marx’s picture of life and organisation in the first stage of communism is very incomplete. There is no discussion of such obviously important developments as workers’ control. We can only guess how much power workers enjoy in their enterprises”. (Bertell Ollman, Social and Sexual Revolution: Essays on Marx and Reich [Montreal: Black Rose Books, 1978, 65-6)

This is unintentionally confirmed by Marxist Kieran Allen who proclaims that “Marx argued for workers’ self-management” before admitting in the very next sentence that “Marx did not draw up a detailed plan.” So Allen asserts Marx advocated self-management within production and yet cannot provide a single quote to back that claim up. He is left to “follow [Marx’s] method and look[ing] at the actual struggles we can get some idea.” (Kieran Allen, Marx and the alternative to Capitalism [London: Pluto Press, 2011], 183). Compare this with Bakunin, who explicitly argued that unions “bear in themselves the living seeds of the new society which is to replace the old world. They are creating not only the ideas, but also the facts of the future itself.” During a revolution, “workers’ associations would then take possession of all the tools of production as well as all buildings and capital, arming and organising themselves”. (Bakunin on Anarchism [Montreal: Black Rose Books, 1980], 255, 179)

And, no, quoting – as Allen does – the “self-government of the producers” from the Civil War in France does not count as Marx was referring to the political structure advocated by the Commune, which followed the federalist ideas of… Proudhon. This becomes clear looking at Marx’s most famous programmatic proclamation, where self-management is not mentioned at all amongst “[e]stablishment of industrial armies, especially for agriculture” along with “[c]entralisation of credit in the hands of the state,” “[c]entralisation of the means of communication and transport in the hands of the State” and “[e]xtension of factories and instruments of production owned by the State” suggests a hierarchical set-up within production, even if the state itself is – as under capitalism – formally democratic. (Collected Works 6: 505)

Likewise, the demands the Communist League issued at the outbreak of the German Revolution in March 1848 are of concern for there is no mention of workers; self-management: “In future armies shall at the same time be workers’ armies […] these shall be a means of organising work”; “All baronial and other feudal estates, all mines, pits etc. shall be converted into state property. […] All private banks will be replaced by a state bank […] All means of transport […] shall be taken in hand by the state. They shall be converted into state property”; “In the remuneration of all civil servants there shall be no difference”; “Establishment of national workshops. The state shall guarantee the livelihood of all workers and provide for those unable to work.” (Collected Works 7: 3-4)

As under capitalism, this would produce an economic class system – albeit a new one of officers (or officialdom) and soldiers (or workers), as Bakunin predicted.

Unsurprisingly, those Marxists who try to present Marx as an advocate of workers’ self-management generally point to his passing remarks on… co-operatives! However, the mainstream Marxist tradition viewed nationalisation, not workers control, as the key objective of socialist revolution. The Bolshevik onslaught on the factory committees in 1918 was not by chance – there were ideological forces at work. Indeed, Marx’s programme in 1848 indicates why Trotsky, in 1920, proclaimed that the Bolshevik economic policy which included “militarisation of labour” and “labour armies was “correct from the point of view both of principle and of practice” (Terrorism and Communism: A Reply to Karl Kautsky [Ann Arbor: University of Michigan Press, 1963], 135–36)

So, as Daniel Guerin repeatedly suggested, it is to Proudhon and not Marx that we must look to for “the radical transformation of the social relations under which workers laboured” as far as workers’ self-management goes. I will return to this subject, when Harvey rewrites history by asserting Proudhon opposed association while Marx supported it.

Which leaves the question of relations between workplaces. Here, Marx and Proudhon differed. While envisioning a federation of associations (termed the “agricultural-industrial federation” in 1863) for production, consumption and credit (see the Bank of the People extracts), Proudhon was in favour of competition. Thus the associated producers would be subject to market forces – and all for the best, in his opinion, for this would ensure productivity, responsiveness to consumers and a host of other benefits.

Would this be “capitalism”? No, as Marx later acknowledged, market exchange predated capitalism and can co-exist with many different modes of production – slavery, artisan/peasant as well as wage-labour (and we can add state-capitalist, as per the Soviet Union). So exchange between associated producers is as feasible – and as non-capitalist – as exchange between artisans (“the immediate producer”) as he admits in Capital (Volume 1, Chapter 33):

“Political economy confuses on principle two very different kinds of private property, of which one rests on the producers’ own labour, the other on the employment of the labour of others. It forgets that the latter not only is the direct antithesis of the former, but absolutely grows on its tomb only. […] We know that the means of production and subsistence, while they remain the property of the immediate producer, are not capital. They become capital only under circumstances in which they serve at the same time as means of exploitation and subjection of the labourer. But this capitalist soul of theirs is so intimately wedded, in the head of the political economist, to their material substance, that he christens them capital under all circumstances, even when they are its exact opposite.” (Collected Works 35: 751-3

Incidentally, these days many Marxists follow the political economist and proclaim mutualism “self-managed capitalism” and other such nonsense. Marx, at least by 1867, had a better understanding – not least, that exploitation occurred in production and not in exchange (as in 1847).

Would this be desirable? That is another question completely. Proudhon asks: “Does the price of the thing have to be measured by the needs of the worker, or do the worker’s needs adjust to the price of the thing?” (Confessions, 247) Yet, as Kropotkin stressed, deed does not equate to need – not least, care of those who cannot work. Similarly, exploitation may be ended, but an income derived from the market price of the products of labour can be variable and uncertain. Nor Proudhon does really address the negatives of market forces and how associations may be forced to make unpleasant decisions (such as increasing workload) to survive on the market. Nor does he prove that organising credit will eliminate the business cycle – it does remove sources of disability (such as classes and so class struggle and the profits for capitalists) but not all (particularly those associated with the aggregate impact of individual decisions).

So there are issues with Proudhon’s solution to the social question – but Marx almost completely ignores valid criticism for inventions. Marx also argued for planning (if a few sentences in The Poverty of Philosophy count as an argument). A single plan would be formulated by the “associated producers” and they then would implement it. How they did this was left a bit vague:

“In deciding how much of any given article to produce, the planners have to strike a balance between social need, available labour-time and the existing means of production. Although Marx recognises that demand is elastic he never doubts that his proletarian planners – whose actual planning mechanisms are never discussed – will make the right equations.” (Ollman, 63)

After misrepresenting both Proudhon and the British socialist John Bray in The Poverty of Philosophy, Marx gives his reader a short paragraph on planning. These few words give a thought experiment of two producers creating two products and we are invited to believe that scaling this up to an economy of millions of each is simple. It is not. Yet even if we assume it is (as Marxists do), then would this end alienation? The worker goes not really control their work – the plan does. Once the vote is in, a vote in which hers is one of millions, then she is reduced to implementing the plan – which determines what the inputs are, what the outputs are, who gets said output and when.

Rather than being the end of alienation – as expressed by the product of labour becoming a power over the producers via market forces – could this not be a new form of alienation, as expressed by the producers subject to the power of the plan? Or, more likely in practice, the power of the numerous bureaucrats such a system would need?

This is not to suggest – as Proudhon did – that market socialism is needed but rather that Marx’s solution is more flawed. To return to Harvey:

Without such a transformation it would be impossible to create a world in which associated labourers made the decisions and in which actual labour times rather than socially necessary labour times might become the measure of value.

The second part of this sentence would, I think, have come as a surprise to Marx and Engels. Both stressed that under communism there would be no need to calculate “value.” So, to quote Engels, “direct social production and direct distribution [which] preclude all exchange of commodities, therefore also the transformation of the products into commodities [...] and consequently also their transformation into values.” (Collected Works 25: 294). The entire notion of value in fact becomes irrelevant:

“From the moment when society enters into possession of the means of production and uses them in direct association for production, the labour of each individual, however varied its specifically useful character may be, becomes at the start and directly social labour. The quantity of social labour contained in a product need not then be established in a roundabout way; daily experience shows in a direct way how much of it is required on the average. Society can simply calculate how many hours of labour are contained in a steam-engine, a bushel of wheat of the last harvest, or a hundred square yards of cloth of a certain quality. It could therefore never occur to it still to express the quantities of labour put into the products, quantities which it will then know directly and in their absolute amounts, in a third product, in a measure which, besides, is only relative, fluctuating, inadequate, though formerly unavoidable for lack of a better one, rather than express them in their natural, adequate and absolute measure, time […] society will not assign values to products. It will not express the simple fact that the hundred square yards of cloth have required for their production, say, a thousand hours of labour in the oblique and meaningless way, stating that they have the value of a thousand hours of labour. It is true that even then it will still be necessary for society to know how much labour each article of consumption requires for its production. It will have to arrange its plan of production in accordance with its means of production, which include, in particular, its labour-powers. The useful effects of the various articles of consumption, compared with one another and with the quantities of labour required for their production, will in the end determine the plan. People will be able to manage everything very simply, without the intervention of much-vaunted ‘value’.” (Collected Works 25: 294-5)

So while the time for millions of products would “simply” be determined and compared, there would be no value. Interesting. Although do note Engels does not attempt to explain how this is done, other than stress how easy it would be. Interestingly, one Marxist – in the context of proclaiming like Harvey that Proudhon advocated labour-notes – proclaims “[c]alculations based on individual labour time were, therefore, artificial and would require an immense bureaucratic machine.” (Allen, 155) Quite – although why it would produce this result when non-Marxists did it is not raised never mind explored…

Still, Allen point hits home against Engels, for someone has to gather all the various production times while deciding on whether an hour of a skilled worker equals that of an unskilled one or not (we need not ponder too long whether they decide a planner’s hour is worth more than both!).

As well as refuting Engels, Allen also managed to refute himself. Being aware of Alec Nove (The Economies of Feasible Socialism Revisited) and right-wing critics of central planning, he tries to answer them. So, for example, while he knows the term “tactic knowledge,” he clearly does not understand what it means as can be seen by his glib comments. Likewise, he proclaims that “there is no need for a central authority to make decisions on millions of items as many decisions are decentred” shortly after proclaiming that “[i]ndividual workplaces will be allocated output targets, but they need to decide how best to achieve them.” The “central authority” would only provide investment and other key decisions. (191-3)

To state what should be obvious, if individual workplaces are being allocated output targets then decisions need to be made for millions of items by a central authority if the economy is “planned” in any meaningful sense of the word. Letting individual workplaces “decide how best to achieve them” sounds good until you realise that their inputs are the outputs of other “individual workplaces” whose targets are “allocated.” Likewise specific investment decisions need specific inputs, and so specific outputs from specific individual workplaces.

Also, Allen fails to comprehend the information provided by contracts – not only the specific use values required by specific users but also when they are needed and their quantity. Having the planning officialdom – sorry, the “associated producers”—say to a nail factory that 10,000,000 nails are needed for 2019 does not indicate size of nails (and so inputs, for 10,000,000 6cm nails need less inputs than 10cm ones, assuming the same diameter) nor who needs them when – letting this workplace decide to produce them all as 9cm nails in December would not be useful for comrades who need 6cm nails to build houses in April. And I should note, I’m simplifying this by just considering two lengths of nails with the same diameter and there will be more than one consumer.

He really does not seem to recognise that this is by its very nature detailed planning – either the targets are vague and so pretty meaningless as a guide (produce 10 million litres of alcohol gives no idea of the use values or inputs needed) or detailed and so swamped by data and never set (for alcoholic beverages consider the numerous inputs – grains, potatoes, grapes, etc. – the differing production processes, storage requirements, the various bottle sizes, and so on).

I could go on, but the point is made. In terms of libertarian communism, that has never suggested the need for a single plan and is based an awareness of the importance of local knowledge and free agreement (“contracts”) as well as co-operation and co-ordination (federalism).

All this does not mean that there is no need for co-ordination nor aggregate and average data nor the administration needed for both. Any socio-economic system will need “aids for the mind” to guide decision-making, the question is the framework in which this is done and how it is used. There is a world of difference between 1,000 people getting 10 emails a day and 10 people getting 1,000 emails a day even though the number of emails is the same. This also applies to understanding the issues involved at a local level which will be lost when then 1,000 local people are replaced by the 10 at the centre. In short, a decentralised and federal system will do this in a different way than a centralised one because the information will be gathered and processed with differently. So while a centralised system would need a bureaucracy as it will be setting output targets (and so replacing local decision making), a decentralised system would see localities simply publicly report agreed-upon data and aggregate/average as needed – indeed, a federation could rotate any needed aggregation and averaging around its various local administrations and so eliminate the separate body a centralised system necessitates. This as well as targets not being set at the centre (which requires a central body to somehow identify, gather, understand, process and implement) vastly reduces any potential of bureaucratic power developing.

However, to return to Harvey and his unfortunate use of the term “the measure of value” in socialism. All which has just been said relates to the “higher” stage of communism. Under its “lower” stage, exchange-value – “actual labour times” – would be used to price goods as Marx explained in the Critique of the Gotha Programme. Indeed, this is the first quote from Marx presented by Allen (186) three pages after proclaiming “Marx argued for workers’ self-management”! So, ironically, it is Marx rather than Proudhon who advocated labour-notes…

Alienated labour dominated by alien class power was the core of the problem.

Enough has been said to raise the question that Marx’s solution would produce a new form of alienated labour dominated by a new alien class power, namely the bureaucracy. This – along with his support for electioneering – is the core of problem. Sad to say, Marxists have never addressed the issue seriously.

Also, needless to say, Proudhon opposed those like Louis Blanc who advocated planning in the France of his time precisely because it would be increase state power and reduce freedom. As he put it during the 1848 revolution:

“It is not for the State to regulate the conditions of association of the workers. It destroys corporate liberty, as well as individual liberty; it reproduces at the same time, in another form, the feudal obstacles to the liberty of commerce and industry, and the monarchical laws against meetings and associations of citizens.” (Confessions, 246)

I should note that “corporate” is the French equivalent of “guild,” and so like many at the time uses an old word to describe the trade bodies of the future. As William H. Sewell discusses in Work and Revolution in France: The language of labor from the old regime to 1848 (Cambridge: Cambridge University Press, 1980), this terminology was commonplace within the first half of the nineteenth century workers movement. So we find, for example, leading member of the First International, proto-syndicalist and martyred Communard Eugène Varlin use the term (I translated it as “trade” to avoid confusion) – along with others at the time and long afterwards. There was nothing backward-looking about it.

Money, in Marx’s view, represented (alienated) labour values. It followed that ‘to leave production relations intact while attempting to eliminate the irrationality of price formation on the market is inherently self-defeating since it assumes away the very irrationality of value production of which it is the expression.’’ This was what was wrong with Proudhon’s position.

Yet Proudhon did not argue that production relations remain intact. Rather he argued that wage-labour had to be replaced by association. Nor did he question the way “price formation” occurs on markets, quite the reverse. He did support “value production” in-so-far as associations would sell the product of their labour to other associations, individuals and communes.

To seek a better mode of representation (like time-chits) of alienated labour without offering a critique of the social relations upon which the capitalist law of value is founded, was simply to double down on the alienation. This is what Marx believed Proudhon and his followers along with many Ricardian socialists were unwittingly doing.

Marx may have believed Proudhon was advocating this, but he never made any effort to prove it. Nothing as trivial as a quote or even a page reference for this claim was presented in The Poverty of Philosophy nor any subsequent work. Now, this could have been an honest mistake, but given that Marx invents quotes (either completely or by rewriting Proudhon’s words to better suit his claims) this is being generous. Particularly as he takes time in chapter two to denounce Proudhon supporting competition after proclaiming in chapter one that Proudhon’s system meant the end of competition…

To repeat myself, Proudhon’s “Constituted Value” is not pricing goods by labour-time but rather the end-point towards which a competitive market process goes. He does discuss credit and money, raising the need for reform there as well as in production. This involved utilising “Bills of Exchange” – as can be seen from the Organisation of Credit where “Bills of Exchange” are discussed and “Labour Notes” are nowhere to be seen.

Here it is important to note that “Bills of Exchange” are no invention of Proudhon or some other well-meaning social reformer – unlike the labour-notes of Robert Owen – but rather an existing means of settling business, with a long history. Here, as elsewhere, we find Proudhon analysing existing society and identifying tendencies which point beyond it rather than painting pictures of future perfect society.

Yet does this not equal “a better mode of representation […] of alienated labour”? Perhaps, but it “was [not] simply to double down on the alienation” for Proudhon also aimed to eliminate the alienation of labour within production associated with capitalist markets. So while the product of labour was “alienated” (i.e., sold), the labour itself was not.

This is why Marx’s depiction of the futur anterieur of communism in Volume 1 of Capital is so important. It depicts associated labourers (a concept that Proudhon abhorred) with means of production held in common making conscious and, therefore, unalienated decisions in utter transparency without the social necessities dictated by capital-labour relations of domination or the interventions of any external power (such as the state or the market).

There is a lot of notions jumbled up here. The most obvious nonsense is the assertion (remember, no works by Proudhon are referenced) that he “abhorred” the concept of “associated labourers.” Quite the reverse, as Harvey himself once acknowledged:

“By invoking the idea of association, Marx echoes much of French utopian thought in the 1830s and 1840s (Proudhon in particular, though Marx refrains from acknowledging so).” (David Harvey, A companion to Marx’s Capital [London/New York: Verso, 2010], 44-5)

I doubt he has read any more Proudhon in the intervening time, so let me quote from System of Economic Contradictions:

“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.” (Système I: 92)


“it is necessary that by the reaction of labour against capital all appropriated wealth become again collective wealth, that the capital withdrawn from society return to society; it is necessary, in a word, that the antinomy be solved. But then credit will be no more than a secondary organ of progress; it will have disappeared in the universal association.” (Système II: 168)

This repeats comments made in his first two Memoirs on Property, such as “I preach emancipation to the proletarians; association to the workers” or “I have shown that this third term is association, which is the annihilation of property.” This was left somewhat vague, but it did involve industrial democracy for “leaders, instructors, superintendents, &c. […] must be chosen from the workers by the workers themselves, and must fulfil the conditions of eligibility. It is the same with all public functions, whether of administration or instruction.” (Property is Theft!, 157, 148, 119) He expands on this in 1846:

“a commercial society […] should lay down as a principle the right of any stranger to become a member upon his simple request, and to straightway enjoy the rights and prerogatives of associates and even managers […] articles of association in which the contracting parties should stipulate no contribution of capital, but, while reserving to each the express right to compete with all, should confine themselves to a reciprocal guarantee of labour and wages […] it is evident that all the tendencies of humanity, both in its politics and in its civil laws, are towards universalisation […] towards a complete transformation of the idea of the company as determined by our statutes […] articles of association […] should regulate, no longer the contribution of the associates – since each associate, according to the economic theory, is supposed to possess absolutely nothing upon his entrance into the company – but the conditions of labour and exchange, and which should allow access to all who might present themselves […] that such articles of association would contain nothing that was not rational and scientific […] In order that association may be real, he who participates in it must do so […] 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” (Système I: 272-8)

However, other than indicate the principle and contrast it to capitalism, he does not go into details:

“We cannot now enter upon a more fundamental criticism of the civil and commercial societies […] We will reserve this subject [‘the organisation of labour’] for the time when, the theory of economic contradictions being finished, we shall have found in their general equation the programme of association, which we shall then publish in contrast with the practice and conceptions of our predecessors.” (Système I: 176)

And, indeed, he did write a whole book on association which was, sadly, never published (presumably because the February Revolution erupted and he had more pressing things to do). However, it exists in manuscript and perhaps it will someday it see the light of day. Until then, we have passing references to what Proudhon entitled in his first draft as La Propriété Vaincue, Théorie de l’Association Universelle (Property Vanquished, The Theory of Universal Association). As he put it at the time:

“We want legislation of the people by the people without representatives; government of the people by the people, without this supernatural person that one calls the prince or the state; the protection of the people by the people, without any other army than civilian militia; justice of the people by the people, without irrevocable magistrates; education of the people by the people without university monopolies or Jesuits; [f]inally, we want the organisation of labour by labourers, without capitalists or masters.” (quoted by Edward Castleton, “The many revolutions of Pierre-Joseph Proudhon,” The 1848 Revolutions and European Political Thought [Cambridge: Cambridge University Press, 2018], 45)

I should also note that Proudhon argued for socialisation of the means of production – while “use” would be divided, ownership would be “undivided.” Indeed, the “idea of socially constituted value, or proportionality products, serves to explain further [...] how social value continuously eliminates fictitious values, in other words, how industry brings about the socialisation of capital and property” (Système I: 87-8) Such free access is the necessary basis for free association:

“Either competition – that is, monopoly and what follows; or exploitation by the State – that is, dearness of labour and continuous impoverishment; or else, in short, a solution based upon equality – in other words, the organisation of labour, which involves the negation of political economy and the end of property.” (Système I: 217)

As the Bank of the People extracts also show, Proudhon supported association. So where did Harvey get this notion from? Well, from Marx and Engels who misrepresented Proudhon’s arguments from 1851 on the “Principal of Association.” I discuss this more in my introduction to Property is Theft! and will leave it by saying Proudhon opposed association for the sake of association as well as Louis Blanc’s notion of one giant association. Instead, Proudhon advocated a federation of associations, where the associations were needed for objective reasons (to abolish wage-labour) or because it was desired (for artisans and peasants). In short, his ideas reflected the France of his time rather than Marx’s which reflected the France of the next century.

Also, it should be noted that Harvey’s vision of planning is quite quaint. It is painted as a paradise of “making conscious and, therefore, unalienated decisions in utter transparency.” He does not attempt to explain how this would work, but then neither did Marx and Engels.

Before returning to Harvey, I should note that as the discussion of property, community and liberty/association in 1840-1 shows, Proudhon was aware of the dialectical years before he met Marx, which places the latter’s claim he introduced Proudhon to Hegel false. At best he deepened his awareness, although considering how Marx attacked Proudhon’s use of the dialectic he could not have been that good a teacher.

Now, back to Harvey:

The manufacturing world from which Proudhon drew his categories was that of the Parisian workshops of the 1840s. These were typically small-scale enterprises run by artisans controlling their own labour process with a workshop at the back and a store at the front.

Except, of course, one of Proudhon’s categories was “Machinery.” So he was well aware of industry and its impact on society. He noted that one of its contradictions was that while it promised to liberate humanity, that it enslaved it and improvised the workers. In short, was the “origin of capital and wage-labour” (to quote a sub-title of that chapter):

“The machine, or the workshop, after having degraded the worker by giving him a master, completes his degeneracy by reducing him from the rank of artisan to that of common labourer.” (Système I: 164)

Before returning to Harvey, I must stress that my introduction refutes the notion that Proudhon opposed industry or large-scale production. As Proudhon himself said in 1846:

“M. de Sismondi, like all men of patriarchal ideas, would like the division of labour, with machinery and manufactures, to be abandoned, and each family to return to the system of primitive indivision – that is, to each one by himself, each one for himself, in the most literal meaning of the words. That would be to retrograde; it is impossible.” (Système I: 167)

This drove his arguments for association, for it would be “impossible that, in the present condition of society, the workshop with its hierarchical organisation, and machinery, instead of serving exclusively the interests of the least numerous, the least industrious, and the wealthiest class, should be employed for the benefit of all.” (Système I: 166)

So why does Harvey make such an easily refutable claim? Because as a good little Marxist he knows that Marx dismissed Proudhon as being “petit-bourgeois” and his ideas as expressing the needs for that class (which was, unlike the proletariat, the bulk of the population in France and the rest of Continental Europe). Marx, of course, proclaimed he represented the proletariat – even if the proletariat were unaware of it. However, the notion that Proudhon’s “categories” did not reflect the rise of industry is just silly.

The main form of capital encountered was that of merchants who would buy from the workshops and then consolidate selling in their dry goods stores (precursors of the department stores that came in the 1850s). The artisans did not complain about their labour processes because they controlled them. From their standpoint their labour was not alienated at the point of production. Their main complaints were the low prices on offer from the merchants and the increasing domination by the latter through a putting out system in which the merchants placed orders and dictated specifications as to the nature of the finished product and in some instances provided the raw materials and even advanced credit (often at usurious rates).

Needless to say, Proudhon’s critique of machinery was that it produced wage-labour, so denying workers control over their labour process. He sought association to end alienation within the workplace. As for merchant capital, he does discuss credit and urge reforms for this as well, but it was seen as part of a wider transformation – the “organisation of credit” (to use his later term) as the means to achieve the “organisation of labour” (to use his 1846 expression).

This was the means as he had no illusions in the state and recognised that labour must organise itself. This was part of the reason he rejected Louis Blanc’s Jacobin-socialism:

“Louis Blanc represents governmental socialism, revolution by power, as I represent democratic socialism, revolution by the people. An abyss exists between us.” (Confessions, 177)

This is repeating comments made a few years before:

“M. Blanc is never tired of appealing to authority, and socialism loudly declares itself anarchistic; M. Blanc places power above society, and socialism tends to subordinate it to society; M. Blanc makes social life descend from above, and socialism maintains that it springs up and grows from below […] Has he given a theory of distribution? No. Has he solved the antinomy of the division of labour, perpetual cause of the worker’s ignorance, immorality, and poverty? No. Has he caused the contradiction of machinery and wage-labour to disappear, and reconciled the rights of association with those of liberty? On the contrary, M. Blanc consecrates this contradiction. Under the despotic protection of the State, he admits in principle the inequality of ranks and wages” (Système I:227)

Also, artisans did complain about their labour processes – or, more correctly, the transformation of their labour processes with the rise of industry and the use of machines. In fact, associationism was first raised as an alternative to wage-labour in 1830 by printers (Proudhon himself becoming a printer when forced to leave school to support his family). Proudhon reflected these complaints in his work – hence his discussion of the division of labour and machinery in System of Economic Contradictions.

In this situation the demand for full recognition of the labour hours performed as opposed to the paltry monetary rewards offered by the merchants was understandable. The value of their labour was being expropriated (alienated) in the market. Proudhon’s arguments about money and markets made some intuitive sense to this audience. Small wonder he was seen as a champion of workers’ rights.

Again, there are numerous notions jumbled up in this.

First, Proudhon did not demand “the full recognition of the labour hours performed.” Rather, he demanded that “products exchange for products” and argued for the abolition of wage-labour by associations selling the product of their collective labour. This, I would say, makes “some intuitive sense” to workers today as then. It also seems to be the case with some Marxists, who postulate market socialism – often with lip-service paid to workers’ control – as a transitional economy (while, of course, waxing indignant over the evils of market socialism!).

Second, as noted above, Proudhon was well aware that workers did not receive the value produced by their labour (not the same thing as the “value of their labour”!) due to wage-labour. This exploitation occurred in production, not exchange.

Third, he attacked the state-socialism of his time precisely because he (rightly) saw them as undermining workers’ rights just as much as capitalism did.

Marx was writing in the context of the factory system where capitalists controlled the labour process and alienated labour dominated at the point of production. It is difficult for us to imagine how huge this difference seemed at that historical time.

It should be unnecessary to note that Proudhon began his socialist career in 1840, a few years before Marx did. Which means Proudhon was also writing in “the context of the factory system.” Indeed, there is a whole chapter in System of Economic Contradictions which discusses precisely this and its contradictions, not least that “capitalists control the labour process.” Thus:

“Machines promised us an increase of wealth; they have kept their word, but at the same time endowing us with an increase of poverty. They promised us liberty; I am going to prove that they have brought us slavery.” (Système I: 160)

So the social context was the same for Marx and Proudhon – both were well aware of machinery and its use in factories. Both were aware that capitalists controlled the labour process and alienated labour dominated at the point of production.

It is difficult for us to imagine how Harvey could make such a bizarre claim.

Engels, who was familiar with artisanal labour systems in Germany, records his astonishment and horror at his first encounters with the factory system and capitalist industrialism in Britain. He was one of the very first commentators to depict its qualities in the Condition of the Working Class in England in 1844. There was a world of difference in labour processes between these two industrial systems. Marx was mightily impressed with Engels’s account of factory labour. He tended to see the factory system teleologically as capital’s future. It is to that future that Volume 1 of Capital is dedicated and from that world that Marx derived his categories.

Again, Proudhon documented this transformation in detail in his works – as seen in System of Economic Contradictions. Yet what is Harvey suggesting here? That Marx was not analysing the capitalism around him but rather the capitalism that developed long after his death? That Marx was writing speculative fiction during his lifetime rather than a realistic social programme? That a revolution in France (and the rest of Continental Europe) was impossible until sometime in the twentieth century? A strange admission and one which paints Marx as the utopian rather than Proudhon.

In terms of categories, after discussing economics, Proudhon follows the path of Value, Division of Labour, Machinery (and wage-labour), Competition, Monopoly, Police (the State), Balance of Trade, Credit, Property, Community and Population. Marx goes from Commodities (Value), to Money, to the Labour Process, to Surplus Value, Co-operation, Division of Labour, Machinery, Wages and Accumulation.

Clearly, there is an overlap because they are analysing the same, current, system. It becomes even more obvious when we look at one of Marx’s earlier plans for Capital:

“The work I am presently concerned with is a Critique of Economic Categories or, IF YOU LIKE, a critical exposé of the system of the bourgeois economy. It is at once an exposé and, by the same token, a critique of the system […] The whole is divided into 6 books: 1. On Capital […] 2. On Landed Property. 3. On Wage Labour. 4. On the State. 5. International Trade. 6. World Market.” (Marx-Engels Collected Works 40: 270-1)

The parallels with System of Economic Contradictions become even clearer, which makes the following comment just silly:

The differences that separate Proudhon and Marx reflect the different labour systems they addressed.

As is obvious from an awareness of their work and their life experience, both addressed the same labour systems – the major difference is that Proudhon, as a printer, experienced wage-labour first-hand. The notion that Proudhon ignored or opposed large-scale industry can only be done if you have only read Marx on Proudhon, not Proudhon himself.

Similarly, if money was the focus of Proudhon’s analysis then why was it the seventh period (chapter X) out of ten (and 14 chapters), in volume 2 of System of Economic Contradictions after the division of labour, machinery, monopoly, etc. in volume 1. While it is undoubtedly the case that French conditions influenced Proudhon’s ideas – as did evens, such as the defeat of the February Revolution which weighs heavily on the discussion of association in General Idea of the Revolution – it is nonsense to suggest that meant Proudhon did not analyse such developments as soul-destroying fragmented (parcellaire) division of labour, machinery, monopoly and other features of capitalism which Marx also addressed.

It follows that we might also need to re-evaluate our own categories to reflect contemporary labour practices. The factory labour that Marx assumed was the future of capitalism has been, for example, much diminished in advanced capitalist countries and the teleology Marx broadly assumed has not unfolded in the way he imagined.

Kropotkin refuted this Marxist dogma in the 1890s with Fields, Factories and Workshops – also see W. Tcherkesoff’s Concentration of Capital: a Marxian Fallacy (London: Freedom Press, 1911). Both did so as good scientists, with substantial evidence to back up the argument. It is nice to see at least one Marxist has belatedly recognised this is the case.

Simply put, yes there is a trend for business to grow – not least to dominant the market, but also to reduce market uncertainty and for other factors. However, this does not imply that small-scale business will disappear. Nor does size of business equate to large industrial technology or machinery (a company may be a combination of multiple small-scale workplaces).

So, there is a tendency for production systems to grow – but it is important to stress that this is for reasons specific to within capitalism. Efficiency is not neutral – it is what is best for capital which is selected, not what is efficient under other, more humane, criteria.

Capital is currently constituted by an amazing mix of quite different labour systems in different places and times. Factory labour still dominates in some parts of the world (e.g. East Asia) but in North America and Europe it is much diminished and replaced by various other labour systems (digital labour and the like).

And, as Kropotkin showed, even when the factory system dominates it does not preclude other industrial types from surviving and even flourishing in response to social and economic needs which large-scale industry cannot meet. This perspective, I should note, gets twisted by Marxists into assertions he supported “small-scale” technology when, in reality, he advocated appropriate levels of technology based on a wider criteria than used by capital.

There is a great deal of current interest in Proudhonian-type monetary interventions with local currencies, time sharing and labour time moneys being used as an alternative to conventional modes of exchange of goods and services.

As these experiments rarely involve producer co-operatives nor wider socio-economic federalism, they are hardly “Proudhonian” in any meaningful sense.

However, Marxists habitually invoke Proudhon’s name when these various schemes appear – although such experiment predate him and are developed by people who never heard of him or his ideas. Sadly, this is because Proudhon is not understood by Marxists but invoked as a bogey-man to scare the faithful – as can be seen by one Marxist I read who proclaimed at the start of the Great Recession that both Glen Beck and Paul Krugman were influenced by Proudhon. That neither had read him – perhaps had never even heard of him – seemed as irrelevant as their mutually opposed positions and Krugman’s neo-classical Keynesianism.

This has been associated in some political movements with attempts to revive small-scale and decentralised production systems (preferably under worker control). The latter became possible given the new technologies and organisational forms of flexible specialisation and small-batch production that emerged in the 1980s.

Revive small-scale and decentralised production systems? These have never disappeared!

While, as Harvey suggests, Marx may have had a fetish for “large-scale” production, this is not the case with anarchists. From Proudhon onwards, we have taken a critical perspective. Yes, for some industries large-scale is needed regardless of the socio-economic regime (ocean liners cannot be built in industrial villages, as Kropotkin noted). However, for others this may not the case – and under capitalism certain industries may be “large-scale” to secure profits and power for the owners and managers, usually at the expense of the workforce, the surrounding community and the environment.

An obvious example are the various experiments in workers’ control during the 1950s and 1960s which David Noble discussed. In every case, they proved themselves better by numerous criteria – productivity, waste, worker happiness, etc. In every case, they were ended. Why? Because management recognised that they would be out of a job if workers were left alone to manage their own work.

In short, capitalist criteria is not a good guide for generalising on what is a desirable for socialism, including the scale of production. However, Harvey seems to admit this flaw in Marx’s perspective so I will leave it there.

At that time, Piore and Sable in their influential book The Second Industrial Divide read this as an opening for the left to realise Proudhon’s dream of workshop mutualism. The small-batch self-organised production systems that emerged in Tuscany became a model for a socialist future in the 1980s. Unfortunately, this labour system turned out to be a neoliberal trap, dismantling the organised power of labour and expanding rates of exploitation in labour systems founded on decentralised precarity and insecurity. Flexible specialisation became flexible accumulation for capitalist corporations.

As may not come as a surprise, Harvey’s summary of The Second Industrial Divide (1984) leaves much to be desired. For example, Piore and Sable discuss small-batch self-organised production systems in Italy as they developed in the 1960s and 1970s. They note it was promoted by big business in response to the class struggle in production and that, initially, was a “sweatshop” situation as the trade-unions argued. They also noted that it had employers and could and did produce “self-exploitation.” So they had a nuanced view of it, recognising both its reality and its potential.

This potential was not achieved, as would be expected from an anarchist perspective. They lacked a wider reform programme. So, for example, Piore and Sable do not, as Proudhon did, argue that large-scale industry be turned over to workers’ associations to run. Nor do they argue for co-operatives (the word does not even appear in the index). So while referencing Proudhon a few times, they did not embrace his wider reform programme – proclaiming the possibilities and benefits of small-scale companies in certain sectors within capitalism is not mutualism.

That Harvey thinks this just shows the poverty of his understanding of Proudhon’s ideas. Sadly, this is all too common – Marxists (and, sad to say, some revolutionary anarchists) think they can understand Proudhon by reading Marx on Proudhon rather than his actual writings.

And you do not have to be a Marxist to realise that capitalism will not reform itself away or be reformed away, that it will turn potentially liberatory tendencies within it into yet more chains for the proletariat That is why few anarchists after Proudhon have been reformists – from Bakunin onwards, social revolution has been the means of choice.

And talking of traps, it would be amiss not to mention that the Marxist reform of choice – nationalisation – has also been one.

On the other hand the mass factory system is alive and well in East and Southeast Asia while employment patterns of digital labour and microfinance are highly decentralised though increasingly organised into configurations of self-exploitation that are every bit as oppressive as traditional industrial labour.

How many of these “employment patterns” are based on self-employment in co-operatives is not specified, but it is very true that the petty boss – in both meanings of the term – can often be a worse tyrant than big business and its bureaucracy of managers. Which is why Proudhon argued for association to replace wage-labour, as his paper put it just after the February Revolution in 1848:

“In future there must only be amongst men, workers, associates. Masters, workmen must disappear [...] no more classes superior and inferior” (Le Représentant du peuple, 29 February 1848)

However, this – no more than co-operative credit – was not the sole aspect of his programme and he also saw the need for economic federation for mutual support and “guarantees” (a phrase of Fourier’s which Proudhon used and left somewhat vague). Likewise, Kropotkin noted how many small-scale workshops were sweat-shops under capitalism and recognised that small-scale was not inherently beneficial – it could be a benefit only if the community owned the co-operative workshops. Yet, as a revolutionary, he was well aware that this would not solve the social question but rather was indicative of a better future – as Proudhon did, he looked to tendencies within capitalism which pointed beyond it.

Harvey has a point, for bosses often make their decisions in response to market pressures and co-operatives likewise will need to make tough decisions, decisions they would prefer not to make, in order to survive on the market (particularly under capitalism but it applies to non-capitalist markets as well). This is the meaning of Harvey’s “self-exploitation” comment (Piore and Sable make use the same expression to make the same point). Thus co-operatives could be forced to work longer than they would like, reduce their take-home income to fund investment, see their income fall due to gluts on the market, and so on. So associations within a market economy means being your own boss in both the good and bad sense of the word.

While aware of this, it is fair to say Proudhon, for all his praise of competition, did not really address the matter – beyond references to “guarantees” and “agricultural-industrial federation.”

So Harvey is correct, although “self-exploitation” is a meaningless term if you use the word in the Marxist sense as Harvey surely knows. This is why most anarchists are revolutionary libertarian communists, seeing the need to go beyond the market so that we have the economic security for individuality to flourish without market uncertainty and the possibility of long hours of toiling merely to survive. Yet, while correct in this, it does not imply that the Marxist solution – central planning – would be any better, or even work.

It would be a huge error to assume that the social relations expressed in the labour theory of value could be reconstructed by reforms of the monetary system. The evil of bourgeois society is not to be remedied by “transforming” the banks or by founding a rational “money system”

As shown above, Proudhon saw the organisation of credit as merely one aspect of a comprehensive series of reforms, reforms which aimed to end exploitation by ending wage-labour with association (where sensible). He rightly focused on credit for he saw that the state was both unwilling and unable to organise labour, that labour had to organise itself. In this he was right, and Marx wrong. Still, most anarchists today would agree that Harvey is right that capitalism cannot be reformed.

This does not mean that we should just accept comments like “the social relations expressed in the labour theory of value.” The labour theory of value seeks to explain what regulates the market price of commodities, it does not specify the mode of production which produced said commodities. As Marx noted, as far as trade – exchange of commodities – goes, the “character of the production process from which [goods] derive is immaterial” and so on the market commodities come “from all modes of production”: for example, they could be “the product of production based on slavery, the product of peasants […], of a community […], of state production (such as existed in earlier epochs of Russian history, based on serfdom) or half-savage hunting peoples”. (Capital [London: Penguin Books, 1978] 2: 189-90) This means that trade “exploits a given mode of production but does not create it” and so relates “to the mode of production from outside.” (Capital [London: Penguin Books, 1981] 3: 745)

Here Harvey, like Marx in 1847, fails to understand what Marx belated came to understand over a decade later. He focuses on markets and does not enter the hidden abode of the workplace, as Marx urged us to do in Capital. Moreover, given that most Marxists postulate a transition period marked by markets, if we took Harvey’s claim seriously then we would have to conclude that these would be non-socialist transitional economies – perhaps a non-socialist transition to the socialist transition to communism? Of course, some Marxists do argue this (the Socialist Party of Great Britain springs to mind) but these are very much the minority.

Harvey then quotes Marx:

Just as it is impossible to suspend the complications and contradictions which arise from the existence of money alongside the particular commodities merely by altering the form of money (although difficulties characteristic of a lower form of money may be avoided by moving to a higher form), so also is it impossible to abolish money itself as long as exchange value remains the social form of products. It is necessary to see this clearly in order to avoid setting impossible tasks, and in order to know the limits within which monetary reforms and transformations of circulation are able to give a new shape to the relations of production and to the social relations that rest on the latter.

Ignoring that creating a state which withers away and central planning working as promised are “setting impossible tasks,” it must be repeated that Proudhon did not aim to “abolish money” – after all, his “Bills of Exchange” were denominated in Francs in both theory and practice. He did aim to abolish the monarchy of gold by means of republicising property. And Marx is right, as long as exchange value exists money (in some form) will continue – but, then, Proudhon was not seeking to abolish the market either.

Can the “organisation of credit” and the universalisation of “bills of exchange” allow workers to buy-back the means of production or create enough new associated workplaces to erode the power of capital? That is doubtful, but given the craft-nature of much of the French economy at the time it was not a utopian perspective – particularly combined with other reforms (such as letting workers’ associations run railways and other state enterprises). Still, it is a moot point given that few anarchists today are mutualists – most are revolutionaries and have been since the 1870s.

The only ultimate solution as far as Marx is concerned is the total abolition of exchange value which, of course, also implies the abolition of value as socially necessary labour time leaving the organised exchange of use values as the only remnant of the categories Marx derived from capitalism.

First, it must be noted that many (most?) of the categories Marx utilises appeared long before capitalism did. Indeed, in 1847 he attacks Proudhon for not providing histories of value, division of labour and such like (although, in 1867, he follows Proudhon in taking them as given so he can get on with analysing capitalism!).

Second, would all the current categories end? Engels suggested that times would be utilised by the planning authorities. Would this, in effect, not be “socially necessary labour time”? Would the planning agencies be indifferent if workplaces took longer and longer to produce goods? Allen, for example, suggests that they would take an interest if a workplace was inefficient with sectoral councils deciding “on criteria for how investment is provided from a central authority will be allocated and what happens to units which under perform.” (193) Although, Allen seems to be rejecting Marx’s “lower stage” of communism by suggesting there would be “some element of market discipline” and “sales figures” for “a period” (193) although perhaps he takes labour-notes as being money (as in the old joke: “Why is the Soviet Union socialist? Because it has pictures of Lenin on its money”). This, surely, would continue after any transition period and surely actual labour time (which “market discipline” regulates under capitalism) would be one criteria?

Although, of course, we can just assume that everyone will be a perfect socialist, that human nature is completely transformed, and everyone will happily work as required by the output targets specified by the planning authority (which is essentially Marx’s response to Proudhon’s criticism of “Community”). We can, likewise, assume that there is abundance of every possible product at all times (I will skip over the waste that implies) and add perfect foresight of the future as well. We could, I suppose, but like Proudhon and Kropotkin I think we need to consider worse-case scenarios and probable problems rather than magic them away.

Likewise, Engels does not discuss how the relative time of different forms of work would be determined. Would one hour of an engineer be equated to that of a cleaner? Which raises the question of the elimination of all other categories. So, would the division of labour would also disappear? Sometimes Marx suggests it would:

“In communist society, where nobody has one exclusive sphere of activity but each can become accomplished in any branch he wishes, society regulates the general production and thus makes it possible for me to do one thing today and another tomorrow, to hunt in the morning, fish in the afternoon, rear cattle in the evening, criticise after dinner, just as I have a mind, without ever becoming hunter, fisherman, herdsman or critic.” (Marx-Engels Collected Works 5: 47)

Note well the primitivism of the tasks involved – none require a machine of any kind or, for that matter, collective work with others. Marx’s conjectures on the complete elimination of the division of labour rest on tasks which are essentially hobbies in a modern industrial economy. Even such a cheerleader as Ollman has to note:

“These are unfortunate examples to show how diversified a person’s endeavours become, for they have led some to believe that life in communism is all play and no work – anyway, no factory work. But factory work, in the new social form which it takes in this period, is an activity to which all people devote some time. It is something which everybody, without exception, wants to do.” (Ollman, 69)

The “unfortunate examples” Marx chooses are pre-industrial activities. Very few jobs involve no training or expertise at all and Marx fails to recognise this. While many employers do view their staff as doing work which shaved monkeys could easily do, the reality is that all workers bring valuable skills to their jobs and it does cost time and resources to train new workers in even what is considered the most menial work. So while it helps make central planning appear more feasible if we assume all work can be done by any person – and so everyone becomes an interchangeable work unit – the reality is that capitalism will never achieve that goal and it would be an impoverished form of socialism which did so.

Let us ignore that and think about how this would work in an industrial economy (replace the examples Marx gives with more current examples such as engineer, dentist, programmer, trucker, etc. and see how much sense he makes). Marx, needless to say, does not wonder how the planning agencies be able to regulate “the general production” if the members of “communist society” have such freedom of choice – how will they ensure that the right number of people “rear cattle” at the right time to meet the beef, milk and leather needs of society? As such, the notion of “just as I mind” is simply nonsense – as Marx acknowledged in The Poverty of Philosophy:

“In large-scale industry, Peter is not free to fix for himself the time of his labour, for Peter’s labour is nothing without the co-operation of all the Peters and all the Pauls who make up the workshop.” (Collected Works 6: 143)

Both Proudhon and Kropotkin were critical of the division of labour as it has developed under capitalism and saw that a future socialist system would transform it along with the technology and industrial structure inherited from capitalism. However, both recognised that specialisation would continue (not least because people have personal likes and dislikes in terms of activity, interests, etc.) even while people pursue a variety of tasks. Anarchists have called this “the division of work” rather than “the division of labour” in order to show that while it is unrealistic to expect everyone to be able to everything (and so there will be different tasks) we can aim for an enriched productive life based on a variety of work.

So while Marx attacked Proudhon for use of categories in 1847, suggesting that by so-doing he projects these onto a future society (and so ensuring it remained capitalist), the reality is that Proudhon’s nuanced approach is sensible. Socialism will have its own categories, but many will be analogous to current ones even if radically transformed. So division of labour would continue, but in a radically transformed way. Machinery would continue, but the contradictions this produces within capitalism would be ended by abolishing wage-labour by association.

Where libertarian communists differ from Proudhon is in his opinion “that, competition being one of the periods in the constitution of value, one of the elements of the social synthesis, it is true to say at the same time that it is indestructible in its principle, and that nevertheless in its present form it should be abolished, denied.” (Système I: 205) Kropotkin had good reasons for rejecting this position, although Proudhon – of course – would have argued his case for its necessity.

Third, proclaiming the need for “the organised exchange of use values” is far easier than actually doing it. I have sketched some of the issues above, not least when contrasting Engels’ comments to one of his followers unknowing admission that finding the time needed to create goods would produce a bureaucracy. In this Harvey follows Marx, making short statements on what would be a desirable alternative and not musing over how it could actually work in practice.

Harvey ends by discussing Marx’s critique of Darimon, so I will leave it there. I do not know his work at all, but comparing Proudhon’s actual ideas to Marx’s claims I would not be surprised if it is flawed. Also, this posting has become far longer than intended – perhaps unsurprising, as a lot of Marxist misunderstandings and contradictions had to be addressed. So what have we learned? That Marxists regurgitate Marx rather than doing the appropriate research into the ideas they claim to be refuting. That glib comments replace analysis when it comes to the favoured solution to the social question, namely planning. That social transformation is a complex process and one which is badly served by Marx and this aspect of his legacy.

None of this suggests that mutualism – market libertarian socialism – is the best we can aim for. Nor is it to suggest we simply replace Marx with Proudhon, for both had their insights in terms of the critique of capitalism and both had their flaws. Rather, it is show that a ruthless criticism of all that exists applies to Marx as well, including his account of other people’s ideas and his vision of communism. And, perhaps, it will make Marxists more willing to look at the ideas they claim to be refuting – although I will not hold my breath…