THREE ENCOUNTERS WITH DIALECTICAL EGOISM:LABOR AS THE MEASURE OF VALUE AND RIGHT

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Tucker’s use of the labor theory of value was derived from his studies of the economic philosophies of Adam Smith, Josiah Warren, and PierreJoseph Proudhon.Tucker and other American individualists such as Josiah Warren believed that economic reform was the key to human liberation and, consequently, espoused a type of labor theory of value that they used to define legitimate property and wealth.

Adam Smith’s classic statement on the labor theory of value was the fundamental economic concept that Tucker and other individualists at the time believed was the practical scaffold for philosophic notions of self-ownership or sovereignty of the individual.

Smith said that, “The real price of everything, what everything really costs to the man who wants to acquire it, is the toil and trouble of acquiring it.” The labor theory of value was also applied in political and economic analysis in the United States independently by Josiah Warren and in Europe by Pierre-Joseph Proudhon. Both Warren and Proudhon believed that labor had a natural right to its product. Warren was a student and colleague of Robert Owen. He participated in Owen’s socialist community at New Harmony, Indiana, in the 1820s and became committed to the idea that society could be transformed if successful alternatives based on cooperation could be developed. One of the devices that Owen developed in his experimental communes was the “labor note,” which was intended to be a tool for implementing the labor theory of value.

 

Although it was never fully implemented at New Harmony, the theory behind the labor note was that exploitation could be defeated if the compensation for labor could be standardized through a form of currency based on the time individuals spent working. Warren eventually made a break from Owen because of the demands for conformity he observed in the socialist colony. Warren subsequently implemented the labor note as a form of exchange in his Cincinnati Time Store, which operated from 1827 to 1830. Despite the short life and limited objectives of the Cincinnati Time Store, Warren believed that the labor note concept was a viable approach to implementing the labor theory of value.

 

It was the practical expression of a moral precept that should structure economic life: “cost is the limit of price.” Warren used this dictum in his subsequent efforts to create utopian communities and it became one of the basic ideas in his statements about a philosophy of individualist anarchism, Equitable Commerce and True Civilization.

 

Pierre-Joseph Proudhon was the French anarchist who purportedly developed a revolutionary theory of society by blending the labor theory of value with Hegelian dialectics and socialist economics. Proudhon was a contemporary of Stirner and influenced both Michael Bakunin and Karl Marx, although Marx later viciously attacked Proudhon in The Poverty of Philosophy. Proudhon’s What Is Property ? and The System of Economic Contradictions arguably had the greatest influence on Tucker.O Central to Proudhon’s mutualist form of anarchism expressed in these two works is the notion that there are two forms of property. The first form refers to ownership over the products of labor; the second refers to ownership over the means Chapter 4 of production. Proudhon argued that the first form of property is legitimate because persons have an absolute right over what they produce, to control their dwellings, and the land and tools they need to work and live.

 

This form of property, which Proudhon called “possession,” is the logical expression of the labor theory of value. The second form of property was not legitimate, according to Proudhon, because the means of production represent the heritage of materials and techniques accumulated by many generations and because they require cooperative efforts to function. Capital is illegitimate property because it “constitutes the debt of the capitalist to the producer, which he never pays,” and is the cause of the “poverty of the laborer ” and the “inequality of conditions.”

 

For Proudhon, the private ownership of the means of production is the right of “using and abusing” that legitimates the “irresponsible domain of man over his person and his goods.” It is little more than a form of theft. The means of production must be owned collectively and each person must enjoy the product of his labor.

 

The private ownership of the means of p roduction is what Proudhon meant by his famous epigram, “Property is theft.”

 

Following Warren and Proudhon, Tucker claimed that all legitimate forms of p roperty, the pivotal category in his individualist anarchist economics, must be based on the effort or labor of individuals. Therefore, labor, or the persons who produce and create economic value, have an absolute right to own and control the entire economic value that they create.

 

Moreover, exchange must be based on Warren’s notion of equitable commerce  and Proudhon’s idea that the only legitimate form of property is actually the possession of the land and tools that individuals need to support themselves. All other forms of private property inevitably result in exploitation.

 

What differentiates state socialists and communist-oriented anarchists from the individualist anarchists is the belief in the right of persons to own property that they create through their own labor. Tucker identifies the individualist anarchist definition of legitimate property as

 

that which secures each in the possession of his own products, or of such

products of others as he may have obtained unconditionally without the use

of fraud or force, and in the realization of all titles to such products which he

may hold by virtue of free contracts with others.

 

 

Further, the individual ist anarchist v iew of property, “concerns only products. But anything is a product upon which human labor has been expended, whether it is a piece of iron or a piece of land.” Tucker credits Adam Smith as the original source of the principle that “labor is the true measure of price.” Tucker was critical of Smith and the political economists who followed him for failing to use the concept as the basis for a critique of capitalism. Smith identified the labor theory of value as a moral precept but failed to use it as a standard to evaluate and critique capitalist society.

 

Tucker believed in free trade and the limited form of private property identified by Proudhon, but he argued that capitalism negates both. The standpoint of the procapitalist political economy of Smith is the description o f society as it is, dominated by the financial, industrial, and commercial classes, and not “as it should be, and the d iscovery of the means o f making it what it should be.” The goal of individualist anarchism is the deconstruction of the political and the economic processes of capitalism that deprive individuals of the “true” or the “natural” products of their labor.

 

In his essay “State Socialism and Anarchism,” Tucker a rgued that nine logical deductions could b e derived from the work of Warren and Proud hon :

 

 

1 . The “natural” wage of l abor is its product;

2. This wage, or product, is the only “just” source of i ncome or wealth,

excluding gifts and inheritance;

3. Those who derive income from any other source ” abstract” it directly

or indirectly from the “natural and just” wage of labor;

4. The abstraction of income from the “natural and just” wages of labor

takes three forms: interest, rent, and profit;

5. These three forms of abstraction constitute the “trinity of u sury” and

are different methods for levying tribute for the use of capital, or

different forms of exploitation;

6. Capital is nothing more than “stored-up labor” which has a l ready

received its full compensation and, thus, its use by others ought to

be gratuitous;

7. The lender of capital i s entitled to only its return and nothing more;

8. The only reason that bankers, capitalists, and lan dlords are able to

exploit labor is because they are supported by legal privilege or monopoly;

and

9. The only way for l abor to secure its entire product, or natural wage,

is to destroy all forms of monopoly.

 

Profit, rent, and interest are forms of usury; taken together they define capitalism as an economic system. They are forms of surplus value that can only be appropriated from workers by fraud or force, both of which are illegitimate and inequitable forms of commerce. Individualist anarchism seeks to overthrow the private ownership of land and capital, as well as all form s of value or wealth that are derived from the inequitable exchange of labor and capital. Individuals cannot legitimately assert ownership over land or natu ral resources, except those which they directly occupy and use. The legitimate ownership of property refers solely to the products of human labor. Equitable commerce is founded on the equiva l ent exchange of labor notes as currency that represent a consistent standard of time that an individual spends working. In the individualist anarchist formulation, unlike that of contemporary libertarians and anarcho-capitalists, property rights are not absolute, but are dependent upon the use of land and products by human beings.

 

Neither Tucker, Warren, Proudhon, nor Smith deduce the labor theory of value from any form of disciplined observation or axiomatic reasoning. It appears in their writings as a moral precept, popular among the intellectuals who used it in the late eighteenth and early nineteenth centuries to critique the emerging social disorganization attendant with industrialization and urbanization. Tucker and Proudhon knew that economies did not function according to the labor theory of value, but they supported a revolutionary movement that would impose it on individuals and society as a fixed idea that could not be challenged or overturned. Warren also knew that it did not describe economic life but sought to impose it as a commandment on artificial communities in the hope that it would spread outside of the social experiments he engineered .

 

Where does the worker’s right to own and control the products of his or her labor come from? Why is it “just and natural” for cost to be the limit of price? Why is it “unjust and unnatural” for persons to own productive property and to contract freely with others to exchange their labor for money? Why are property rights for labor just and natural, and those for capitalists are unjust and unnatural? In many of the arguments with the contributors and readers of Liberty where the topic of natural right is discussed, Tucker argues against natural rights from a Stirnerite point of view.

 

He argues that property rights are not ” inherent,” but a matter of social convention or contract. However, “State Socialism and Anarchism” makes clear that he believes that the labor theory of value expresses in theoretical form the idea that the “just and natural” wage of labor is the right of the worker to own and control the products of his labor. If rights are a matter of social convention, contract, or construction, they cannot be “natural” or fixed in nature in any form. Instead, they are dependent upon the varying perceptions and agreements that persons construct in their interaction. Whether property rights are equitable or inequitable also depends upon social convention, contract, or agreement.

 

Tucker, of course, is one voice arguing that some property rights are just and others are unjust, but other voices propound alternatives. Tucker’s argument is not intuitively superior. The characterization of the labor theory of value as the expression of the “just and natural” wages of labor posits it as part of the fixed environment in which humans must function. Despite his protests, Tucker’s “just and natural” argument for the labor theory of value is ultimately an assertion of right fixed in nature. This is a clear difference from Stirner, who rejected any sort of external concept of right, whether it is grounded in religion, humanism, or nature.

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