E. Belfort Bax, Law of Maximum, Justice, 18th January 1917, p.2.
Transcribed by Ted Crawford.
Marked up by Einde O’Callaghan for the Marxists’ Internet Archive.
Proofread by Chris Clayton (May 2007).
It is now going on for a quarter of a century since I first advocated, in Justice and in meetings under the auspices of the SDF, the establishment of a law of maximum on an extensive scale, including at least all the necessaries of life, as one of the stepping-stones to Socialism. The idea did not “catch-on” particularly at the time. It was about the last decade of the last century, and hence before the general rise in prices had began to make itself felt. Some few years later the change began, and the war time we have been passing through has effected a complete revolution in the average “practical” man’s views on the subject of practical economics.
The compulsory regulation of prices is not a new thing. Already in the last period of the Roman Empire recourse was had to this expedient for sustaining the purchasing power of money. Under Diocletian in the first decade of the fourth century an extensive table of prices fixed by law, or, rather, Imperial edict, has come down to us. Other local and more restricted measures of a similar character might be cited in mediaeval times. But, of course, the great and classical instance of a Law of Maximum over a vast area of population and a wide range of commodities is that enacted and enforced throughout France in the great revolutionary years of 1793 and 1794. Of the success of this measure in heading back the rapacious dealer and middleman, and thus preserving the population of France from the worst horrors of want, there can be no doubt.
But this last instance of the efficacy of a Law of Maximum, dating, as it does, from a comparatively recent period of history, did not prevent the so called Manchester or laissez faire school of political economy during the mid and late nineteenth century, or its surviving adherents of the present day, from pouring scorn and contempt upon the effort to override economic laws, such as is involved in a measure that aims at a forcible regulation of prices by extra economic means. Such persons will inveigh against any legal coercion or forcible interference with the economic liberty of the seller of commodities, as at once wrong in principle, being an infringement of the rights of the individual, and as inefficacious in practice, inasmuch has no effective means are available for preventing evasions of such a law.
The wisdom of the orthodox notions, such as those referred to, of the old bourgeois economists, has been, as we all know, very considerably discounted for a generation past, and the situation produced by the present war has destroyed what little surviving credit it had before, even with the man in the street, and quite apart from Socialist doctrine. The notion of buying and selling, of the systematic exchange of commodities, belonging to the category of what Mill called “self-regarding actions,” and therefore as falling within the sphere of ultimate individual right, such, for instance, as freedom of conscience, of the expression of opinion, of the disposal of one’s own person, is too absurd for words. Buying and selling is obviously an act having a direct social bearing, and is in no way whatever “self-regarding” in Mill’s sense.
Then, again, as to the effective enforcement of the Law of Maximum. It is perfectly clear that if the penalty for infringement of the law, or for attempted evasion of the law, if proved, were sufficiently certain and severe, the economic consideration of avarice, or the desire for a large profit on the part of the seller, would be overridden. During the French Revolution the threat of the guillotine hanging over the head of the rapacious forestaller or middleman usually sufficed to ensure respect for the law. Apart from such drastic methods, however, a sufficiently severe penalisation, not by a mere pecuniary fine, with certainty of its infliction, would be assuredly quite sufficient to effect the object. The prospects of gaol under the conditions of the ordinary convict would give the enhancer of prices very considerable “pause.” This, with provision against attempts at evasion of the law by sham contracts, would, without the shadow of a doubt, defeat the instincts of the “economic man.”
I do not for a moment contend that the most thorough going Law of Maximum would be in any way a substitute for the assumption by the people themselves of the means of production, distribution and exchange, the fundamental postulate of modern Socialism. But I do maintain that a sufficiently comprehensive Law of Maximum, enforced in a sufficiently drastic manner would not only relieve the economic situation in all civilised countries, but would prove an effective stepping stone to the more complete solution presupposed by Socialism
Most persons regard the fixing of a compulsory maximum in prices as at most only feasible or desirable during a period of crisis such as the present war. My contention, however, which I put forward more than twenty years ago, and to which I still adhere, is that the Maximum by regulating the profits of capital may serve as a valuable shoeing horn to the assumption by the collective democracy of the means of production and distribution, now the monopoly of the private capitalist or the capitalist syndicate. For it to have this effect, however, by curtailing the profits of capital, it would have to be applied systematically through every grade of the scale of capitalist appropriation, from the exploiter and purveyor of the raw material to the broker and the middle man in his various phases down to the retail dealer, and over as wide a range of commodities as possible. The effect of such a Law of Maximum as that proposed must inevitably be to wear down the resisting power of capital and its interests to the assumption by the community of the instruments of production, etc., at present in the hands of the private capitalist or the capitalist syndicate.
The immediate taking hold of and working of the whole industry of the country between Saturday night and Monday morning (so to say) by the collective democracy of the country, would generally be admitted to be an impossible proposition. The establishment of the Law of Maximum would be a measure, however, that would serve a double purpose. It would alleviate (certainly in conjunction with a law of minimum wage) the economic situation for the working classes, and, as above said, by keeping down the profits of capital, it would weaken the resistance of the classes representing capital to the economic change presupposed by Socialism.
I by no means underrate the difficulties in the working out of such a measure as the fixation of maximum prices on the scale here proposed, any more than those involved in its administration. But no difficulties of this kind are insuperable. The complete reorganisation of industrial and economic life which Socialism has in view is admitted to be by no means devoid of difficulties, and difficulties too, of a much more serious character, surmountable though they undoubtedly are, than the difficulties involved in the Law of Maximum.
The objection commonly felt towards the idea of a Law of Maximum, and sometimes met with even amongst persons calling themselves Socialists, is undoubtedly a legacy from the Manchester school and laissez faire order of economic ideas. The Manchester school, as is well known, objected to any sort of political or otherwise extra economic interference with what it was pleased to call the “laws of political economy,” which meant, being interpreted, the free and unchecked play of capitalist interests. Any attempt to curtail the liberty of the possessor or controller of the means of production to buy his labour in the cheapest market and on his own conditions, and to sell its product in the dearest, was, according to the Manchester school doctrine, a foolish, if not wicked, effort to run counter to the laws of economic science – an undertaking doomed at best failure and at worst to result in pernicious consequences. As is well known, the late John Bright, on these grounds, opposed the Factory Acts. The right of the factory owner to exploit the labour of his child slaves was for him an incontestable proposition on economic grounds.
That the objections raised by some persons against the coercion of capital involved in the establishment of a law of maximum price, supplemented by that of a minimum wage, are undoubtedly a survival from the Manchester school of economic thought, is apparent when we look into the matter closely. As already pointed out, the alleged difficulty of enforcing such a law, of guarding against its evasion, is, provided the law be properly framed and administered with average honesty, altogether imaginary. Where attempts to regulate prices, and laws against usury, have proved ineffective in times past, it was simply owing to the fact that the laws themselves were badly drawn up, and the administration of them was slack or dishonest, or both. As most thinking persons nowadays are beginning to recognise, there is no such being as the “economic man” of the older political economists. Economic motives constitute only one side of human psychology. They do not form a ring-fenced compartment by themselves. There is no law of political economy that cannot be counteracted and rendered nugatory by motives and conditions extra economic in their origin.
Last updated on 28.5.2007