A great deal of work has been done in the field of economics thus far. It must be said however, that much of that work is concentrated on mathematically modelling what the market should behave like in terms of macroscopic results. Generally speaking, the focus has always been on “growth”, the success of which is judged on GDP and stock market indexes. I will be the first to acknowledge that this is useful work, but what is missing in many regards is a lower-level analysis, considering human aspects like fairness and welfare. In too many circles, the focus of economics has been to increase statistics rather than to improve quality of life for the majority of people. In doing so, assumptions are made about the lower-level mechanisms of capitalism that in fact, are not so simple as mainstream economics makes out.
The Great Money Trick, from which this book takes its name, is one of most simple yet effective demonstrations of capitalism expressed in political satire. It demonstrates, with everyday language and metaphors, one of the key mechanisms of capitalism: the ability of those who own capital, land and the means of production, to exploit those who do not.
From The Ragged-Trousered Philanthropists:
Owen slowly folded up the piece of newspaper he had been reading and put it into his pocket.’All right,’ he replied. ‘I’ll show you how the Great Money Trick is worked.’
Owen opened his dinner basket and took from it two slices of bread but as these were not sufficient, he requested that anyone who had some bread left would give it to him. They gave him several pieces, which he placed in a heap on a clean piece of paper, and, having borrowed the pocket knives they used to cut and eat their dinners with from Easton, Harlow and Philpot, he addressed them as follows:
‘These pieces of bread represent the raw materials which exist naturally in and on the earth for the use of mankind; they were not made by any human being, but were created by the Great Spirit for the benefit and sustenance of all, the same as were the air and the light of the sun.’
‘You’re about as fair-speakin’ a man as I’ve met for some time,’ said Harlow, winking at the others.
‘Yes, mate,’ said Philpot. ‘Anyone would agree to that much! It’s as clear as mud.’
‘Now,’ continued Owen, ‘I am a capitalist; or, rather, I represent the landlord and capitalist class. That is to say, all these raw materials belong to me. It does not matter for our present argument how I obtained possession of them, or whether I have any real right to them; the only thing that matters now is the admitted fact that all the raw materials which are necessary for the production of the necessaries of life are now the property of the Landlord and Capitalist class. I am that class: all these raw materials belong to me.’
‘Good enough!’ agreed Philpot.
‘Now you three represent the Working class: you have nothing–and for my part, although I have all these raw materials, they are of no use to me–what I need is–the things that can be made out of these raw materials by Work: but as I am too lazy to work myself, I have invented the Money Trick to make you work FOR me. But first I must explain that I possess something else beside the raw materials. These three knives represent–all the machinery of production; the factories, tools, railways, and so forth, without which the necessaries of life cannot be produced in abundance. And these three coins’–taking three halfpennies from his pocket–’represent my Money Capital.’
‘But before we go any further,’ said Owen, interrupting himself, ‘it is most important that you remember that I am not supposed to be merely “a” capitalist. I represent the whole Capitalist Class. You are not supposed to be just three workers–you represent the whole Working Class.’
‘All right, all right,’ said Crass, impatiently, ‘we all understand that. Git on with it.’
Owen proceeded to cut up one of the slices of bread into a number of little square blocks.
‘These represent the things which are produced by labour, aided by machinery, from the raw materials. We will suppose that three of these blocks represent–a week’s work. We will suppose that a week’s work is worth–one pound: and we will suppose that each of these ha’pennies is a sovereign. We’d be able to do the trick better if we had real sovereigns, but I forgot to bring any with me.’
‘I’d lend you some,’ said Philpot, regretfully, ‘but I left me purse on our grand pianner.’
As by a strange coincidence nobody happened to have any gold with them, it was decided to make shift with the halfpence.
‘Now this is the way the trick works–’
‘Before you goes on with it,’ interrupted Philpot, apprehensively, ‘don’t you think we’d better ‘ave someone to keep watch at the gate in case a Slop comes along? We don’t want to get runned in, you know.’
‘I don’t think there’s any need for that,’ replied Owen, ‘there’s only one slop who’d interfere with us for playing this game, and that’s Police Constable Socialism.’
‘Never mind about Socialism,’ said Crass, irritably. ‘Get along with the bloody trick.’
Owen now addressed himself to the working classes as represented by Philpot, Harlow and Easton.
‘You say that you are all in need of employment, and as I am the kind-hearted capitalist class I am going to invest all my money in various industries, so as to give you Plenty of Work. I shall pay each of you one pound per week, and a week’s work is–you must each produce three of these square blocks. For doing this work you will each receive your wages; the money will be your own, to do as you like with, and the things you produce will of course be mine, to do as I like with. You will each take one of these machines and as soon as you have done a week’s work, you shall have your money.’
The Working Classes accordingly set to work, and the Capitalist class sat down and watched them. As soon as they had finished, they passed the nine little blocks to Owen, who placed them on a piece of paper by his side and paid the workers their wages.
‘These blocks represent the necessaries of life. You can’t live without some of these things, but as they belong to me, you will have to buy them from me: my price for these blocks is–one pound each.’
As the working classes were in need of the necessaries of life and as they could not eat, drink or wear the useless money, they were compelled to agree to the kind Capitalist’s terms. They each bought back and at once consumed one-third of the produce of their labour. The capitalist class also devoured two of the square blocks, and so the net result of the week’s work was that the kind capitalist had consumed two pounds worth of the things produced by the labour of the others, and reckoning the squares at their market value of one pound each, he had more than doubled his capital, for he still possessed the three pounds in money and in addition four pounds worth of goods. As for the working classes, Philpot, Harlow and Easton, having each consumed the pound’s worth of necessaries they had bought with their wages, they were again in precisely the same condition as when they started work–they had nothing.
This process was repeated several times: for each week’s work the producers were paid their wages. They kept on working and spending all their earnings. The kind-hearted capitalist consumed twice as much as any one of them and his pile of wealth continually increased. In a little while–reckoning the little squares at their market value of one pound each–he was worth about one hundred pounds, and the working classes were still in the same condition as when they began, and were still tearing into their work as if their lives depended upon it.
After a while the rest of the crowd began to laugh, and their merriment increased when the kind-hearted capitalist, just after having sold a pound’s worth of necessaries to each of his workers, suddenly took their tools–the Machinery of Production–the knives away from them, and informed them that as owing to Over Production all his store-houses were glutted with the necessaries of life, he had decided to close down the works.
‘Well, and wot the bloody ‘ell are we to do now?’ demanded Philpot.
‘That’s not my business,’ replied the kind-hearted capitalist. ‘I’ve paid you your wages, and provided you with Plenty of Work for a long time past. I have no more work for you to do at present. Come round again in a few months’ time and I’ll see what I can do for you.’
‘But what about the necessaries of life?’ demanded Harlow. ‘We must have something to eat.’
‘Of course you must,’ replied the capitalist, affably; ‘and I shall be very pleased to sell you some.’
‘But we ain’t got no bloody money!’
‘Well, you can’t expect me to give you my goods for nothing! You didn’t work for me for nothing, you know. I paid you for your work and you should have saved something: you should have been thrifty like me. Look how I have got on by being thrifty!’
The unemployed looked blankly at each other, but the rest of the crowd only laughed; and then the three unemployed began to abuse the kind-hearted Capitalist, demanding that he should give them some of the necessaries of life that he had piled up in his warehouses, or to be allowed to work and produce some more for their own needs; and even threatened to take some of the things by force if he did not comply with their demands. But the kind-hearted Capitalist told them not to be insolent, and spoke to them about honesty, and said if they were not careful he would have their faces battered in for them by the police, or if necessary he would call out the military and have them shot down like dogs, the same as he had done before at Featherstone and Belfast.
‘Of course,’ continued the kind-hearted capitalist, ‘if it were not for foreign competition I should be able to sell these things that you have made, and then I should be able to give you Plenty of Work again: but until I have sold them to somebody or other, or until I have used them myself, you will have to remain idle.’
‘Well, this takes the bloody biskit, don’t it?’ said Harlow.
‘The only thing as I can see for it,’ said Philpot mournfully, ‘is to ‘ave a unemployed procession.’
‘That’s the idear,’ said Harlow, and the three began to march about the room in Indian file, singing:
‘We’ve got no work to do-oo-oo’
We’ve got no work to do-oo-oo!
Just because we’ve been workin’ a dam sight too hard,
Now we’ve got no work to do.’
As they marched round, the crowd jeered at them and made offensive remarks. Crass said that anyone could see that they were a lot of lazy, drunken loafers who had never done a fair day’s work in their lives and never intended to.
Written in 1910, these words still ring true today, as does the whole book. Even the last line, showing the disdain cast down upon the unemployed, is true now more than ever.
Of course, capitalists argue that due to competition — which, in their theories is always perfect — capitalists will make relatively little profit, with much wealth trickling down to the middle and working classes. We will examine their theory in part, but even a superficial examination of our economy shows us the reality is otherwise; the rich are getting richer and the poor still have relatively little. Here in the UK, we have experienced a double-dip recession and a prolonged depression. As a result, we are witnessing one of the most perverse contradictions of capitalism: people are in need of food, shelter, the means of life; while millions of able and willing workers are not allowed to work. The physical resources are there, but our accounting system — something which should be a tool to help us — now constrains us.
This book looks primarily of at the economic systems that have brought us here. It does so primarily however, from an ethical and semantic perspective; our aim is not to increase GDP, it is to increase fairness, quality of life, opportunity; rather than flogging the working class as hard as possible, to afford everyone as much enjoyment for as little work as possible. That is not to say that all of the mathematical modern economics is incorrect, only that just because something adds up, doesn’t make it right. As we will examine soon, there is a tendency to think that if society is the net product of trillions of transactions, and most of those transactions are voluntary (the meaning of which, we will question), then the whole system must also be fair and right. Unfortunately, having an accurate mathematical model for the trajectory of a bullet does not make it right to shoot someone.
A particular aim of this book is to try and fill what seems to me, to be quite a large hole in the left. This lies between Social Democrats, who have accepted capitalism and now seek only to make it less unpleasant, through regulation and taxes, while failing to tackle the core problems; and strongly leftist Marxists, who are admirable in their determination, yet desperately need to modernise and update their theory. We need to acknowledge our desire to move on from capitalism, while learning what we can from other economic schools; taking the proven aspects of Marxism and combining them with the updated information we now have. I have tried to add stronger analysis, in combination with empirical data. This book concerns itself with the analysis of capitalism; its cousin, soon to follow, The Asgard Manifesto, concerns itself more with the solution. The reason for this split is in the same way that The Communist Manifesto should be accessible as a distinct work, not hidden at the back of Das Kapital Volume III.
In many ways, I have tried to consolidate ideas from existing schools of thought, including Classical, Marxist, Keynesian, even Austrian; for example, reconciling Marxist theories of class and exploitation with modern theories of cost and value. On the other, I have tried at all costs not to be constrained and boxed-in by past models, instead taking a somewhat fresh look at economics and trying to provide a distinctly ethics-based model. I have tried to concentrate any rigid theory on the aspects that matter; a new formula for predicting GDP is of little interest to me, since GDP does not measure what is important to me on an ethical level. I have no love for theory for theory’s sake. The objective of theory is to enable solutions to practical issues and to enable useful understanding. I care about interest rates and inflation where they affect the daily lives of ‘ordinary’ people; I care little for them as figures in themselves. This means that rather than providing a drop-in replacement for classical economics, I intend to look at capitalism on a lower level, analysing and following new metrics and objectives. If Capitalism proves to be unethical on a lower level, then I have two objectives: determining which aspects would still be useful for a replacement system; and suggesting some temporary fixes for our current depression.
Finally, we also address topics such as consumerism, religion, education and the justice system. Unusual topics for a book otherwise about economics, but in keeping with the focus on ethics and meaning. The aim is to provide a critique of capitalist society, which in my definition, includes its surrounding culture.
The book is composed partly of new writing, and partly of selected articles previously published on my website. For the online reading version, I will simply link to the original articles from the contents, in order to avoid duplication. The aim is for this to be a living work, which can be added to and modified.
I would like to remind the reader that this work is licensed under a Creative Commons license. It is free to share, quote, link to, print out and give to friends, students and colleagues, so long as the basic terms are met, primarily that I am credited appropriately, and that the work is used for non-commercial purposes. Anyone who wishes to use this work, or part thereof, for commercial purposes, should contact me first.
I wish the reader all the best. This work is the cumulation of several years research, analysis and philosophical thought. Even still, it is far from perfect, but then again, what is? I only hope to challenge a few views and aid humanity in taking a small step forward from the terrible mess we’re in.
Dan J Ladds