Monday, October 6, 2014
DOes anyone know how one might make a verifiable electronic Mutuum? I feel this essay spoken in the video below explains a very apt point very relevant to the realization of the idea behind the Mutual Economy Network. I recommend listen to it and deciding if you feel that this is so or not for yourself. http://www.youtube.com/watch?v=a92qeVc6hw4&feature=youtu.be
Sunday, July 20, 2014
A proposal for the basics of a well defined Mutualist economic position, the philosophical basis for the strategy of the Mutual Economy Network
What is the Mutualist economic position
and how is is similar and different from the “capitalist” and
“socialist” positions? I will here attempt to offer a coherent
answer to the challenge offered in the widely available “what is
Mutualism?” article, wherein it states:
“Ultimately, I guess I would
like to highlight the ambiguity that sometimes lurks behind
rather obscure political labels such as "mutualism".
From a certain perspective, this could be portrayed as a good
thing in the sense that it stops it from hardening into a
dogma. At the same time, the desire for clarity is
understandable and perhaps contemporary mutualists should do a
better job of hashing out exactly what it is that makes
mutualism unique. Mutualism certainly seems to be unique, and
that's part of the value I see in it. I'd be interested to see
what various self-proclaimed mutualists have to say about
this.” -
http://web.archive.org/web/20101016220317/http://polycentricorder.blogspot.com/2010/05/what-is-mutualism.html
This challenge to
find a 'mutually' agreeable economic method to the political end of
Liberty for All, of Anarchism, is in and of itself part of what
mutualism is, under what economic arrangements can liberty be
preserved, and the issues at the heart of all the schools of thought
on this subject be brought into harmony? This challenge is precisely
what Proudhon himself, who coined the terms mutualism and anarchism,
proposed. It is for this reason I feel, that Proudhon, on the
question of economic organization felt that the most basic
denominators of economic arrangement most agreeable to the
preservation of the sovereignty of the individual are, in reverse
order Contract, Credit which should really be Collateral, and these
two being the economic extension of the idea of Property; clear and
consensual contract between sovereigns of equal standing. This idea
was wide spread and is still enshrined in the basis \of common Law;
the inalienable right to Contract. Mutualism as an economic position,
being based on the sovereignty of the individual, is based firstly on
Contract. A clear agreement made between consenting sovereigns, akin
to a treaty. This naturally arises in human interaction but it is
rarely named and seen for a sound basis upon which a natural
philosophy of economy could be based, I here intend to name it so.
Thus the basis of the mutualist economic arrangement is equitable
exchange based on clear consensual Contract. Economy is about
exchange, but exchange, in order that Liberty not be infringed, must
take the form of consensual contract between the parties exchanging,
otherwise it is theft.
The second layer
of the foundation of the Mutualist economic philosophy that I would
like to highlight, and was named by Proudhon, but about with which I
feel much has not been understood thoroughly, including by Proudhon
himself, is what J. Proudhon called Credit. However, Credit is
legally defined as; “1. Belief, faith, Trust. 2. One's ability to
borrow money or property of value, based on the faith in one's
ability to pay that debt.” (Black's Law, 9th Edition).
What Proudhon had to say on this idea of Credit is so brief that one
gets the impression that Proudhon, being human, he did not fully
grasp the technical issues of Law concerning the equitable exchange
so called by the American Anarchist philosopher Josiah Warren, or law
in general for that matter, hence his argument with Fredric bastiat;
his genius was more is intuiting the location and nature of Liberty
and therefore that which would threaten it, for though great was his
genius, he was not omnipotent. He was after all a practical man and a
peasant as well. Being brief, I feel that no space is wasted quoting
it here in full:
“The
organization of credit is three-quarters done by the winding up of
the privileged and usurious banks, and their conversion into a
National Bank of circulation and loan, at ½, ¼, or ⅛ per cent. It
remains only to establish branches of the Bank, wherever necessary,
and to gradually retire specie from circulation, depriving gold and
silver of their privilege as money. (§
1 ¶ 1)
As for personal credit, it is not for the National Bank to have to do with it; it is with the workingmen’s unions, and the farming and industrial societies, that personal credit should be exercised. (§ “ - http://fair-use.org/p-j-proudhon/general-idea-of-the-revolution/organization-of-economic-forces#s2
I have a real problem with this position as any keen liberty minded individual might, for any such National Bank, would then be a supra-individual fictitious, and dare I say collectivist entity. He then goes on to imply a tiered system of fiat money lent through tiered networks of collective associations, from 'national banks' to 'farming and industrial societies'. All such centralized institutions of delegated powers, be they Armies, States or Banks, are burdensome, unnecessary, and potentially injurious to liberty. Even in his conception, the role of the Bank or the workingmen's association is to hold the right to lend on Credit. This right is suppose he felt to be the property of extra-individual collectivities, albeit consensual ones based on Contract. I feel he really knew that that this issue was not resolved and so in presenting mutualism also presented the challenge to his progenitors to solve it.
I endeavor to point out at this juncture, that any right or liberty held by a free association, cannot by definition be a right not held by the individuals comprising that free association. What liberty are we talking about? Not the right to Contract which I previously covered, but rather the right to Loan, which is a specific kind of Contract on a three fold spectrum of what are called real contracts in the civil law, thus this Credit creation through the right to loan is nothing but an extension of the right to contract, a point Proudhon seems to have missed. These three real contracts are the Pignoratio, the Deposit and/or Pledge, the Commodatum, the loan for use, and last but not least, the Mutuum, the equitable exchange. I call what Proudhon proposes a form of fiat currency because it is this the purpose of this Credit to be used as Collateral against which to lend and create money, the definition of a fiat currency. To his credit though, pun intended, in his time the first real global fiat currency, the Federal Reserve Note, had not yet been created and so he apparently did not foresee this arrangement as the real threat to liberty that it is. All that is required then to issue Credit is Collateral, Credit itself is not sufficient, something real and of substance with value must be had, some Property. Collateral here defined as “property that is pledged as security against a debt. It is only against collateral that credit can be established, and the right to do this, like all rights, is held by the individual first, and cannot be granted by association.
This collateral must therefor be some sort of Property, which leads us into the third and most basic pillar of the mutualist economic position; property. Whose domain is it? The Communists insist that the collectivity exercises domain over it. And the wealth of an economy and the equity thereof is a product of this ownership itself. This Capitalist position does not seem to differ so much from the Communist one, simply stating that rather than the collective ownership of the property being the source of economic health and function, it is My ownership of the property which, in and of itself, is the source of economic health and function. The Mutualist position is a third, which both sythesizes and transends these two; it is that it is the mutual exchange, in circulation, of the Property between sovereign individuals within a collectivity which creates the function and health of an economy. In order to answer the question of who may exercise their sovereignty over this Property, who owns it, one must first ask the questions, 'if this Property is a created thing, who made it? They own the property, unless the exchanged it for other property. If it is a service rendered, who performed the service? Then the performer owns his or her actions. If the Property is land, or the product of plants of that land, one must ask, who occupies that land, who cared for the apple trees, who planted and harvested the wheat, or whatever the case may be. The idea is that ownership of a property is derived from direct investment in that property. If I made it, then I own the product of my labor. If I did it, then I own the value of my services. If I live in an area of land, if I planted and tended that tree or wheat, then I own it. This is so simple and direct that it is often overlooked, and unessecary complexities are chosen instead. If I do not directly interact with a given piece of land for example, what stake should I rightfully have in the use of that land? None. This prevents the monopoly of ownership arising out of Feudalism, Communism, Capitalism or any other State creating arrangement which allows people with no direct occupancy in an area to claim ownership of it.
So
to sum this up in clear though percise English, Property in Land is
held by whoever directly inhabits it. Property in Goods is held by
whoever produces them. Property in Services is held by whoever
performs them. These Properties are held by their individual owners
as collateral against which Credit can be issued as currency in the
form of Contracts of Mutual Exchange by those individuals themselves
and as such with no need for Banks of any kind. And these clear and
consensual Contracts form the circulation of property which
constitutes the functioning of economy. This is neither the communist
nor capitalist economic philosophy, it is a mutualist one.
Sunday, July 6, 2014
Proudhon, the father of Anarchism and Mutualism
In order to understand the philosophical basis for what we are doing, taking a good look at what one of our philosophical progenitors had to say on the subject is worth the time. In his time, he was one of the founding supporters of a third economic option; being opposed to the authoritarian elitism of the capitalists, as well as equally being opposed to the collectivism and utopianism of the socialists. it was from this position that he proposed Mutualism as an economic means to the peaceful and gradual evolution towards anarchism. It is a shame that the socialists, and today the capitalists as well, have sought to hijack the anarchist philosophy and turn it to their ends. but in Pierre Joseph Proudhon's conception, the objectives of both positions could be achieved without the loss of liberty that those two positions implied, as being about maintaining autonomy and liberty, no free association could be restricted so these modes of economy are possible, however the understanding of this amongst anarchists has been lost due in large part to the socialist and capitalist dominance on the Anarchist philosophical tradition that the necessity of distinguishing the Mutualist position both in words, deeds and symbols has become necessary. it is for this reason that the mutualist Anarchist colors are orange and black, for it is a synthesis of the thesis and antithesis of the yellow and black of the capitalist anarchism and the red and black of socialist anarchism, both including and transcending the dual positions. Proudhon had much to say on Value that I feel is very helpful to understand, so without further ado, here is his essay on Value and Exchange:
exerpt from his book "System of Economical Contradictions: or, the Philosophy of Misery" by Proudhon, Pierre Joseph. (chapter 2 section 2.1)
1. -- Opposition of value in USE and value in EXCHANGE.
Now, in what consists the correlation between useful value and value in exchange? What is meant by constituted value, and by what sudden change is this constitution effected? To answer these questions is the object and end of political economy. I beg the reader to give his whole attention to what is to follow, this chapter being the only one in the work which will tax his patience. For my part, I will endeavor to be more and more simple and clear.
Everything which can be of any service to me is of value to me, and the more abundant the useful thing is the richer
I am: so far there is no difficulty. Milk and flesh, fruits and grains, wool, sugar, cotton, wine, metals, marble; in fact, land, water, air, fire, and sunlight, -- are, relatively to me, values of use, values by nature and function. If all the things which serve to sustain my life were as abundant as certain of them are, light for instance, -- in other words, if the quantity of every valuable thing was inexhaustible, -- my welfare would be forever assured: I should not have to labor; I should not even think. In such a state, things would always be useful, but it would be no longer true to say that they ARE VALUABLE; for value, as we shall soon see, indicates an essentially social relation; and it is solely through exchange, reverting as it were from society to Nature, that we have acquired the idea of utility. The whole development of civilization originates, then, in the necessity which the human race is under of continually causing the creation of new values; just as the evils of society are primarily caused by the perpetual struggle which we maintain against our own inertia. Take away from man that desire which leads him to think and fits him for a life of contemplation, and the lord of creation stands on a level with the highest of the beasts.
But how does value in use become value in exchange? For it should be noticed that the two kinds of value, although coexisting in thought (since the former becomes apparent only in the presence of the latter), nevertheless maintain a relation of succession: exchangeable value is a sort of reflex of useful value; just as the theologians teach that in the Trinity the Father, contemplating himself through all eternity, begets the Son. This generation of the idea of value has not been noted by the economists with sufficient care: it is important that we should tarry over it.
Since, then, of the objects which I need, a very large number exist in Nature only in moderate quantities, or even not at all, I am forced to assist in the production of that which I lack; and, as I cannot turn my hand to so many things, I propose to other men, my collaborators in various functions, to yield me a portion of their products in exchange for mine. I shall then always have in my possession more of my own special product than I consume; just as my fellows will always have in their possession more of their respective products than they use. This tacit agreement is fulfilled by commerce. Here we may observe that the logical succession of the two kinds of value is even more apparent in history than in theory, men having spent thousands of years in disputing over natural wealth (this being what is called primitive communism) before their industry afforded opportunity for exchange.
Now, the capacity possessed by all products, whether natural or the result of labor, of serving to maintain man, is called distinctively value in use; their capacity of purchasing each other, value in exchange. At bottom this is the same thing, since the second case only adds to the first the idea of substitution, which may seem an idle subtlety; practically, the consequences are surprising, and beneficial or fatal by turns.
Consequently, the distinction established in value is based on facts, and is not at all arbitrary: it is for man, in submitting to this law, to use it to increase his welfare and liberty. Labor, as an author (M. Walras) has beautifully expressed it, is a war declared against the parsimony of Nature; by it wealth and society are simultaneously created. Not only does labor produce incomparably more wealth than Nature gives us, -- for instance, it has been remarked that the shoe
makers alone in France produce ten times more than the mines of Peru, Brazil, and Mexico combined, -- but, labor infinitely extending and multiplying its rights by the changes which it makes in natural values, it gradually comes about that all wealth, in running the gauntlet of labor, falls wholly into the hands of him who creates it, and that nothing, or almost nothing, is left for the possessor of the original material.
Such, then, is the path of economic progress: at first, appropriation of the land and natural values; then, association and distribution through labor until complete equality is attained. Chasms are scattered along our road, the sword is suspended over our heads; but, to avert all dangers, we have reason, and reason is omnipotence.
It results from the relation of useful value to exchangeable value that if, by accident or from malice, exchange should be forbidden to a single producer, or if the utility of his product should suddenly cease, though his storehouses were full, he would possess nothing. The more sacrifices he had made and the more courage he had displayed in producing, the greater would be his misery. If the utility of the product, instead of wholly disappearing, should only diminish, -- a thing which may happen in a hundred ways, -- the laborer, instead of being struck down and ruined by a sudden catastrophe, would be impoverished only; obliged to give a large quantity of his own value for a small quantity of the values of others, his means of subsistence would be reduced by an amount equal to the deficit in his sale: which would lead by degrees from competency to want. If, finally, the utility of the product should increase, or else if its production should become less costly, the balance of exchange would turn to the advantage of the producer, whose cond
tion would thus be raised from fatiguing mediocrity to idle opulence. This phenomenon of depreciation and enrichment is manifested under a thousand forms and by a thousand combinations; it is the essence of the passional and intriguing game of commerce and industry. And this is the lottery, full of traps, which the economists think ought to last forever, and whose suppression the Academy of Moral and Political Sciences unwittingly demands, when, under the names of profit and wages, it asks us to reconcile value in use and value in exchange; that is, to find the method of rendering all useful values equally exchangeable, and, vice versa, all exchangeable values equally useful.
The economists have very clearly shown the double character of value, but what they have not made equally plain is its contradictory nature. Here begins our criticism.
Utility is the necessary condition of exchange; but take away exchange, and utility vanishes: these two things are indissolubly connected. Where, then, is the contradiction?
Since all of us live only by labor and exchange, and grow richer as production and exchange increase, each of us produces as much useful value as possible, in order to increase by that amount his exchanges, and consequently his enjoyments. Well, the first effect, the inevitable effect, of the multiplication of values is to LOWER them: the more abundant is an article of merchandise, the more it loses in exchange and depreciates commercially. Is it not true that there is a contradiction between the necessity of labor and its results?
I adjure the reader, before rushing ahead for the explanation, to arrest his attention upon the fact.
A peasant who has harvested twenty sacks of wheat, which he with his family proposes to consume, deems him
self twice as rich as if he had harvested only ten; likewise a housewife who has spun fifty yards of linen believes that she is twice as rich as if she had spun but twenty-five. Relatively to the household, both are right; looked at in their external relations, they may be utterly mistaken. If the crop of wheat is double throughout the whole country, twenty sacks will sell for less than ten would have sold for if it had been but half as great; so, under similar circumstances, fifty yards of linen will be worth less than twenty-five: so that value decreases as the production of utility increases, and a producer may arrive at poverty by continually enriching himself. And this seems unalterable, inasmuch as there is no way of escape except all the products of industry become infinite in quantity, like air and light, which is absurd. God of my reason! Jean Jacques would have said: it is not the economists who are irrational; it is political economy itself which is false to its definitions. Mentita est iniquitas sibi.
In the preceding examples the useful value exceeds the exchangeable value: in other cases it is less. Then the same phenomenon is produced, but in the opposite direction: the balance is in favor of the producer, while the consumer suffers. This is notably the case in seasons of scarcity, when the high price of provisions is always more or less factitious. There are also professions whose whole art consists in giving to an article of minor usefulness, which could easily be dispensed with, an exaggerated value of opinion: such, in general, are the arts of luxury. Man, through his aesthetic passion, is eager for the trifles the possession of which would highly satisfy his vanity, his innate desire for luxury, and his more noble and more respectable love of the beautiful: upon this the dealers in this class of
articles speculate. To tax fancy and elegance is no less odious or absurd than to tax circulation: but such a tax is collected by a few fashionable merchants, whom general infatuation protects, and whose whole merit generally consists in warping taste and generating fickleness. Hence no one complains; and all the maledictions of opinion are reserved for the monopolists who, through genius, succeed in raising by a few cents the price of linen and bread.
It is little to have pointed out this astonishing contrast between useful value and exchangeable value, which the economists have been in the habit of regarding as very simple: it must be shown that this pretended simplicity conceals a profound mystery, which it is our duty to fathom.
I summon, therefore, every serious economist to tell me, otherwise than by transforming or repeating the question, for what reason value decreases in proportion as production augments, and reciprocally what causes this same value to increase in proportion as production diminishes. In technical terms, useful value and exchangeable value, necessary to each other, are inversely proportional to each other; I ask, then, why scarcity, instead of utility, is synonymous with dearness. For -- mark it well -- the price of merchandise is independent of the amount of labor expended in production; and its greater or less cost does not serve at all to explain the variations in its price. Value is capricious, like liberty: it considers neither utility nor labor; on the contrary, it seems that, in the ordinary course of affairs, and exceptional derangements aside, the most useful objects are those which are sold at the lowest price; in other words, that it is just that the men who perform the most attractive labor should be the best rewarded, while those whose tasks demand the most exertion are paid the least. So that, in following the
principle to its ultimate consequences, we reach the most logical of conclusions: that things whose use is necessary and quantity infinite must be gratuitous, while those which are without utility and extremely scarce must bear an inestimable price. But, to complete the embarrassment, these extremes do not occur in practice: on the one hand, no human product can ever become infinite in quantity; on the other, the rarest things must be in some degree useful, else they would not be susceptible of value. Useful value and exchangeable value remain, then, in inevitable attachment, although it is their nature continually to tend towards mutual exclusion.
I shall not fatigue the reader with a refutation of the logomachies which might be offered in explanation of this subject: of the contradiction inherent in the idea of value there is no assignable cause, no possible explanation. The fact of which I speak is one of those called primitive, -- that is, one of those which may serve to explain others, but which in themselves, like the bodies called simple, are inexplicable. Such is the dualism of spirit and matter. Spirit and matter are two terms each of which, taken separately, indicates a special aspect of spirit, but corresponds to no reality. So, given man's needs of a great variety of products together with the obligation of procuring them by his labor, the opposition of useful value to exchangeable value necessarily results; and from this opposition a contradiction on the very threshold of political economy. No intelligence, no will, divine or human, can prevent it.
Therefore, instead of searching for a chimerical explanation, let us content ourselves with establishing the necessity of the contradiction. Whatever the abundance of created values and the propor
tion in which they exchange for each other, in order that we may exchange our products, mine must suit you when you are the buyer, and I must be satisfied with yours when you are the seller. For no one has a right to impose his own merchandise upon another: the sole judge of utility, or in other words the want, is the buyer. Therefore, in the first case, you have the deciding power; in the second, I have it. Take away reciprocal liberty, and exchange is no longer the expression of industrial solidarity: it is robbery. Communism, by the way, will never surmount this difficulty.
But, where there is liberty, production is necessarily undetermined, either in quantity or in quality; so that from the point of view of economic progress, as from that of the relation of consumers, valuation always is an arbitrary matter, and the price of merchandise will ever fluctuate. Suppose for a moment that all producers should sell at a fixed price: there would be some who, producing at less cost and in better quality, would get much, while others would get nothing. In every way equilibrium would be destroyed. Do you wish, in order to prevent business stagnation, to limit production strictly to the necessary amount? That would be a violation of liberty: for, in depriving me of the power of choice, you condemn me to pay the highest price; you destroy competition, the sole guarantee of cheapness, and encourage smuggling. In this way, to avoid commercial absolutism, you would rush into administrative absolutism; to create equality, you would destroy liberty, which is to deny equality itself. Would you group producers in a single workshop (supposing you to possess this secret)? That again does not suffice: it would be necessary also to group consumers in a common household, whereby you would abandon the point. We are not to abolish the idea of value, which is as impossible as to
abolish labor, but to determine it; we are not to kill individual liberty, but to socialize it. Now, it is proved that it is the free will of man that gives rise to the opposition between value in use and value in exchange: how reconcile this opposition while free will exists? And how sacrifice the latter without sacrificing man?
Then, from the very fact that I, as a free purchaser, am judge of my own wants, judge of the fitness of the object, judge of the price I wish to pay, and that you on the other hand, as a free producer, control the means of production, and consequently have the power to reduce your expenses, absolutism forces itself forward as an element of value, and causes it to oscillate between utility and opinion.
But this oscillation, clearly pointed out by the economists, is but the effect of a contradiction which, repeating itself on a vast scale, engenders the most unexpected phenomena. Three years of fertility, in certain provinces of Russia, are a public calamity, just as, in our vineyards, three years of abundance are a calamity to the wine-grower I know well that the economists attribute this distress to a lack of markets; wherefore this question of markets is an important one with them. Unfortunately the theory of markets, like that of emigration with which they attempted to meet Malthus, is a begging of the question. The States having the largest market are as subject to over-production as the most isolated countries: where are high and low prices better known than in the stock-exchanges of Paris and London?
From the oscillation of value and the irregular effects resulting therefrom the socialists and economists, each in their own way, have reasoned to opposite, but equally false, conclusions: the former have made it a text for the slander of political economy and its exclusion from social science;
the latter, for the denial of all possibility of reconciliation, and the affirmation of the incommensurability of values, and consequently the inequality of fortunes, as an absolute law of commerce.
I say that both parties are equally in error.
1. The contradictory idea of value, so clearly exhibited by the inevitable distinction between useful value and value in exchange does not arise from a false mental perception, or from a vicious terminology, or from any practical error; it lies deep in the nature of things, and forces itself upon the mind as a general form of thought, -- that is, as a category. Now, as the idea of value is the point of departure of political economy, it follows that all the elements of the science -- I use the word science in anticipation -- are contradictory in themselves and opposed to each other: so truly is this the case that on every question the economist finds himself continually placed between an affirmation and a negation alike irrefutable. ANTINOMY, in fine, to use a word sanctioned by modern philosophy, is the essential characteristic of political economy; that is to say, it is at once its death-sentence and its justification.
Antinomy, literally counter-law, means opposition in principle or antagonism in relation, just as contradiction or antilogy indicates opposition or discrepancy in speech. Antinomy, -- I ask pardon for entering into these scholastic details, comparatively unfamiliar as yet to most economists, -- antinomy is the conception of a law with two faces, the one positive, the other negative. Such, for instance, is the law called attraction, by which the planets revolve around the sun, and which mathematicians have analyzed into centripetal force and centrifugal force. Such also is the problem of the infinite divisibility of matter, which, as Kant has shown,
can be denied and affirmed successively by arguments equally plausible and irrefutable.
Antinomy simply expresses a fact, and forces itself imperatively on the mind; contradiction, properly speaking, is an absurdity. This distinction between antinomy (contra-lex) and contradiction (contra-dictio) shows in what sense it can be said that, in a certain class of ideas and facts, the argument of contradiction has not the same value as in mathematics.
In mathematics it is a rule that, a proposition being proved false, its opposite is true, and vice versa. In fact, this is the principal method of mathematical demonstration. In social economy, it is not the same: thus we see, for example, that property being proved by its results to be false, the opposite formula, communism, is none the truer on this account, but is deniable at the same time and by the same title as property. Does it follow, as has been said with such ridiculous emphasis, that every truth, every idea, results from a contradiction, -- that is, from a something which is affirmed and denied at the same moment and from the same point of view, -- and that it may be necessary to abandon wholly the old-fashioned logic, which regards contradiction as the infallible sign of error? This babble is worthy of sophists who, destitute of faith and honesty, endeavor to perpetuate scepticism in order to maintain their impertinent uselessness. Because antinomy, immediately it is misunderstood, leads inevitably to contradiction, these have been mistaken for each other, especially among the French, who like to judge everything by its effects. But neither contradiction nor antinomy, which analysis discovers at the bottom of every simple idea, is the principle of truth. Contradiction is always synonymous with nullity; as for antinomy,
sometimes called by the same name, it is indeed the forerunner of truth, the material of which, so to speak, it supplies; but it is not truth, and, considered in itself, it is the efficient cause of disorder, the characteristic form of delusion and evil.
An antinomy is made up of two terms, necessary to each other, but always opposed, and tending to mutual destruction. I hardly dare to add, as I must, that the first of these terms has received the name thesis, position, and the second the name anti-thesis, counter-position. This method of thought is now so well-known that it will soon figure, I hope, in the text-books of the primary schools. We shall see directly how from the combination of these two zeros unity springs forth, or the idea which dispels the antinomy.
Thus, in value, there is nothing useful that cannot be exchanged, nothing exchangeable if it be not useful: value in use and value in exchange are inseparable. But while, by industrial progress, demand varies and multiplies to an infinite extent, and while manufactures tend in consequence to increase the natural utility of things, and finally to convert all useful value into exchangeable value, production, on the other hand, continually increasing the power of its instruments and always reducing its expenses, tends to restore the venal value of things to their primitive utility: so that value in use and value in exchange are in perpetual struggle.
The effects of this struggle are well-known: the wars of commerce and of the market; obstructions to business; stagnation; prohibition; the massacres of competition; monopoly; reductions of wages; laws fixing maximum prices; the crushing inequality of fortunes; misery, -- all these result from the antinomy of value. The proof of this I may be excused from giving here, as it will appear naturally in the chapters to follow.
The socialists, while justly demanding that this antagonism be brought to an end, have erred in mistaking its source, and in seeing in it only a mental oversight, capable of rectification by a legal decree. Hence this lamentable outbreak of sentimentalism, which has rendered socialism so insipid to positive minds, and which, spreading the absurdest delusions, makes so many fresh dupes every day. My complaint of socialism is not that it has appeared among us without cause, but that it has clung so long and so obstinately to its silliness.
2. But the economists have erred no less gravely in rejecting a priori, and just because of the contradictory, or rather antinomical, nature of value, every idea and hope of reform, never desiring to understand that, for the very reason that society has arrived at its highest point of antagonism, reconciliation and harmony are at hand. This, nevertheless, is what a close study of political economy would have shown to its adepts, had they paid more attention to the lights of modern metaphysics. It is indeed demonstrated, by the most positive evidence known to the human mind, that wherever an antinomy appears there is a promise of a resolution of its terms, and consequently an announcement of a coming change. Now, the idea of value, as developed by J. B. Say among others, satisfies exactly these conditions. But the economists, who have remained for the most part by an inconceivable fatality ignorant of the movement of philosophy, have guarded against the supposition that the essentially contradictory, or, as they say, variable, character of value might be at the same time the authentic sign of its constitutionality, -- that is, of its eminently harmonious and determinable nature. However dishonorable it may be to the economists of the various schools, it is certain that their op
position to socialism results solely from this false conception of their own principles; one proof, taken from a thousand, will suffice.
The Academy of Sciences (not that of Moral Sciences, but the other), going outside of its province one day, listened to a paper in which it was proposed to calculate tables of value for all kinds of merchandise upon the basis of the average product per man and per day's labor in each branch of industry. "Le Journal des Economistes" (August, 1845) immediately made this communication, intrusive in its eyes, the text of a protest against the plan of tariff which was its object, and the occasion of a reestablishment of what it called true principles: --
"There is no measure of value, no standard of value," it said in its conclusions; "economic science tells us this, just as mathematical science tells us that there is no perpetual motion or quadrature of the circle, and that these never will be found. Now, if there is no standard of value, if the measure of value is not even a metaphysical illusion, what then is the law which governs exchanges? . . . . . As we have said before, it is, in a general way, supply and demand: that is the last word of science."
Now, how did "Le Journal des Economistes" prove that there is no measure of value? I use the consecrated expression: though I shall show directly that this phrase, measure of value, is somewhat ambiguous, and does not convey the exact meaning which it is intended, and which it ought, to express.
This journal repeated, with accompanying examples, the exposition that we have just given of the variability of value, but without arriving, as we did, at the contradiction. Now, if the estimable editor, one of the most distinguished econo
mists of the school of Say, had had stricter logical habits; if he had been long used, not only to observing facts, but to seeking their explanation in the ideas which produce them, -- I do not doubt that he would have expressed himself more cautiously, and that, instead of seeing in the variability of value the last word of science, he would have recognized unaided that it is the first. Seeing that the variability of value proceeds not from things, but from the mind, he would have said that, as human liberty has its law, so value must have its law; consequently, that the hypothesis of a measure of value, this being the common expression, is not at all irrational; quite the contrary, that it is the denial of this measure that is illogical, untenable.
And indeed, what is there in the idea of measuring, and consequently of fixing, value, that is unscientific? All men believe in it; all wish it, search for it, suppose it: every proposition of sale or purchase is at bottom only a comparison between two values, -- that is, a determination, more or less accurate if you will, but nevertheless effective. The opinion of the human race on the existing difference between real value and market price may be said to be unanimous. It is for this reason that so many kinds of merchandise are sold at a fixed price; there are some, indeed, which, even in their variations, are always fixed, -- bread, for instance. It will not be denied that, if two manufacturers can supply one another by an account current, and at a settled price, with quantities of their respective products, ten, a hundred, a thousand manufacturers can do the same. Now, that would be a solution of the problem of the measure of value. The price of everything would be debated upon, I allow, because debate is still our only method of fixing prices; but yet, as all light is the result of conflict, debate, though it
may be a proof of uncertainty, has for its object, setting aside the greater or less amount of good faith that enters into it, the discovery of the relation of values to each other, -- that is, their measurement, their law.
Ricardo, in his theory of rent, has given a magnificent example of the commensurability of values. He has shown that arable lands are to each other as the crops which they yield with the same outlay; and here universal practice is in harmony with theory. Now who will say that this positive and sure method of estimating the value of land, and in general of all engaged capital, cannot be applied to products also? . . . . .
They say: Political economy is not affected by a priori arguments; it pronounces only upon facts. Now, facts and experience teach us that there is no measure of value and can be none, and prove that, though the conception of such an idea was necessary in the nature of things, its realization is wholly chimerical. Supply and demand is the sole law of exchange.
I will not repeat that experience proves precisely the contrary; that everything, in the economic progress of society, denotes a tendency toward the constitution and establishment of value; that that is the culminating point of political economy -- which by this constitution becomes transformed -- and the supreme indication of order in society: this general outline, reiterated without proof, would become tiresome. I confine myself for the moment within the limits of the discussion, and say that supply and demand, held up as the sole regulators of value, are nothing more than two ceremonial forms serving to bring useful value and exchangeable value face to face, and to provoke their reconciliation. They are the two electric poles, whose connection must produce the
economical phenomenon of affinity called EXCHANGE. Like the poles of a battery, supply and demand are diametrically opposed to each other, and tend continually to mutual annihilation; it is by their antagonism that the price of things is either increased, or reduced to nothing: we wish to know, then, if it is not possible, on every occasion, so to balance or harmonize these two forces that the price of things always may be the expression of their true value, the expression of justice. To say after that that supply and demand is the law of exchange is to say that supply and demand is the law of supply and demand; it is not an explanation of the general practice, but a declaration of its absurdity; and I deny that the general practice is absurd.
I have just quoted Ricardo as having given, in a special instance, a positive rule for the comparison of values: the economists do better still. Every year they gather from tables of statistics the average prices of the various grains. Now, what is the meaning of an average? Every one can see that in a single operation, taken at random from a million, there is no means of knowing which prevailed, supply -- that is, useful value -- or exchangeable value, -- that is, demand. But as every increase in the price of merchandise is followed sooner or later by a proportional reduction; as, in other words, in society the profits of speculation are equal to the losses, -- we may regard with good reason the average of prices during a complete period as indicative of the real and legitimate value of products. This average, it is true, is ascertained too late: but who knows that we could not discover it in advance? Is there an economist who dares to deny it?
Nolens volens, then, the measure of value must be sought for: logic commands it, and her conclusions are adverse to
economists and socialists alike. The opinion which denies the existence of this measure is irrational, unreasonable. Say as often as you please, on the one hand, that political economy is a science of facts, and that the facts are contrary to the hypothesis of a determination of value, or, on the other, that this troublesome question would not present itself in a system of universal association, which would absorb all antagonism, -- I will reply still, to the right and to the left: --
1. That as no fact is produced which has not its cause, so none exists which has not its law; and that, if the law of exchange is not discovered, the fault is, not with the facts, but with the savants.
2. That, as long as man shall labor in order to live, and shall labor freely, justice will be the condition of fraternity and the basis of association; now, without a determination of value, justice is imperfect, impossible.
Monday, June 30, 2014
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Wednesday, June 25, 2014
first post check
welcome to the M.E.N. News and Events blog! i will feature here news and events related to Mutuums and their use as well as other related topics, hope to hear from you, if you want to know more about us please go to our homepage, www.mutualeconomynetwork.org
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