George Bernard Shaw in To-day May 1889

Bluffing the Value Theory


Source: To-day May 1889, pp. 128-135.
Transcribed: by Steve Palmer.
Markup: by Steve Palmer.



The readers of To-Day must by this time be experts in the theory of value - First they had P. H. Wicksteed on the subject, then they had Shaw (me), then Wicksteed a second time, then Graham Wallas, then Hyndman, and now Shaw again. Iit began by Wicksteed saying that Marx was wrong and Jevons right, whereupon I contended that Marx was right andWicksteed wrong, to which Wicksteed replied that I was wrong and Jevons right, Wallas coming in after a long interval with the suggestion that Marx and Jevons were equally right, and provoking Hyndman to declare that not only Wicksteed, myself and Wallas, but the whole of the English race save himself and two others are wrong. In revenge, I now propose to shew that Hyndman does not know what we were disputing about, or, to put it less curtly - for why should we not spare one another's feelings as much as possible? - that he does not, never did, and probably never will, understand either Marx's or Jevons's theory of value.

The fact is, this is a personal matter with me. When the controversy arose, I, a helpless novice in economics, was thrust upon the Jevonian bayonets with no better defence than my mother wit and such literary adroitness as I had picked up professionally. I protested that I knew nothing about it, and that Hyndman, who was then at the head of the Socialist movement in London, was the proper person to undertake it. For he, professing himself an adept at the differential calculus, heaped scorn on Jevons' equations (which were perfectly unintelligible to me) and denounced him as a silly person who had announced the speedy exhaustion of our coal supply and referred commercial crises to the action of the sunspots. Clearly the hour and the man had come; and the man was Hyndman. But no: he would not waste time in squelching the presumptuous insect Wicksteed; and finally R. P. B. Frost, then one of the proprietors of this magazine, assured me as we stood among the tombs within the consecrated precinct of St. Paul's Cathedral, that if I did not do it he (Frost) must do it himself. The threat prevailed; and I undertook to write "a comment" on Wicksteed's article on condition that he was to be offered fair space for a rejoinder if he survived to make one. All of which, including the survival of Wicksteed in robust health, came to pass in due course.

The controversy now passed from the pages of To-Day to the meetings of the Hampstead Historic Club, which was at first a Marxist reading party at the house of Arthur Wilson. A young Russian lady used to read out "Capital" in French to us until we began to quarrel, which usually occurred before she had gone on long enough to feel seriously fatigued. The first chapters in particular were of extraordinary efficacy in setting us by the ears. F. Y. Edgeworth as a Jevonian, and Sidney Webb as a Stuart Millite, fought the Marxian value theory tooth and nail; whilst Belfort Bax and I, in a spirit of transcendent Marxism, held the fort recklessly, and laughed at Mill and Jevons. The rest kept an open mind and skirmished on either side as they felt moved. In these wars, where I suffered many a bruise in defence of an untenable position, Hyndman had no part; neither then nor since did he make any contribution to the hard-fought economic discussions by which we educated ourselves and each other in scientific Social Democracy. As a man who had nothing more to learn, he despised Jevons in the tranquil distance, occasionally fingering his coal and sunspots fantasia in the columns of Justice. The controversy raged at Hampstead until Bax shook the dust of the heath off his boots; and the Historic Club, having had enough of impassioned disputes as to whether the value of Mrs. Wilson's vases was fixed by the labour socially necessary to produce them, by their cost of production on the margin of cultivation, or by the "final utility" of the existing stock of vases, insisted on passing to the later chapters and dropping the subject.

On the 18th February, 1887, at the Freemason's Tavern, Hyndman delivered to the Fabian Society an address on Karl Marx. By that time the canker of infidelity in me, which had first taken the shape of refusing to pooh-pooh Wicksteed as an idiotically perverse bourgeois, had grown to such an extent that I was now as obstinate a heretic as any of the other 34,999,997 inhabitants of these islands who, according to Hyndman, have not grasped Marx. Consequently, in the debate which followed his address, I drew attention to the flaw in the value theory; and Webb, if I recollect rightly, pointed out the silence of the published volume of "Das Kapital" as to the sub-divisions of surplus value. Whereupon Hyndman rent his clothes (so to speak); cried out that we had spoken blasphemy; accused us of believing in our hearts that Marx was a fool; conclusively shewed that the thing called surplus value existed (which nobody had questioned); and finally, by a brilliant inspiration, delivered at great length a crushing paraphrase of Marx's chapter on absolute and relative surplus value, which deeply impressed the befogged audience, but which had much less to do with the point at issue than the sunspots have to do with commercial crises. Those who had been in the wars now perceived that Hyndman was a baby in the value controversy, and a remarkably petulant baby, too. Subsequently, when the English translation of "Capital" appeared, the danger of allowing the public to believe that Socialism, or even Marx's own historical and social generalizations, stood or fell with his chapters on value, became so serious that an untimely attack of sunspots on Hyndman's part exasperated me to the point of falling on him furiously in a correspondence in the Pall Mail Gazette, (May 1887). I then published a review of "Capital" in the National Reformer (Aug. 7th, 4th and 21st, 1887), in which I dealt elaborately with the flaw in the value theory. To this there was no reply from Hyndman or from the twain who alone beside himself have "grasped the full meaning of Marx's investigations." The review still remains to be answered. As it is signed by the only person who replied to Wicksteed's original article, that, too, can no longer be considered as disposed of.

The next eruption - a slight one - was provoked by a lecture of mine on "Rent of Ability", delivered on the 16th June, 1887, to the Bloomsbury Branch of the Socialist League, now the independent Bloomsbury Socialist Society. Dr. Edward Aveling, taking exception to my treating the value of skilled labour as determined by supply and demand, put forward the Marxian view of value in a separate lecture on the 4th August: the present editor of this magazine forming with me the opposition on the occasion. Then the matter dropped until the other day, when Wicksteed published his Alphabet of Economic Science "to explain the meaning and demonstrate the truth of the proposition that the value in use and the value in exchange of any commodity are two distinct, but connected, functions of the quantity of the commodity possessed by the persons or the community to whom it is valuable." Justice played a brief but frantic variation on the old sunspot theme, but did not venture to argue. Then came Wallas's article in the March To-Day, and the editor's invitation to Hyndman to break silence at last and smash the heresy towards which he had for years borne himself with such unrelenting contempt.

With Hyndman's article before me, and the scars of my very instructive campaigning but recently healed, I should be more than mortally magnanimous if I could restrain a chuckle at his expense. Not that I dissent from it very largely. Like the celebrated discourse on absolute and relative surplus value, it consists for the chief part of restatement of matters which are not and never have been in question among Socialists, and which are only affected by the Jevonian theory in respect of its placing them on a complete theoretic basis. As to what actually is in question, I do not feel bound to inflict it here at great length on the reader. Jevons's "Theory of Political Economy" and his controversy with Cairnes, Wicksteed's article in To-Day for October, 1884 and his "Alphabet of Economic Science" (Macmillan, 1888), my review in the National Reformer and the Fabian Essay on the "Economic Aspect of Socialism" (Our Corner, December, 1888) are all extant and written in very choice English for the enlightenment of those who care to know the exact point under discussion, or to reassure themselves that Marx's indictment of individualism is independent of Marx's theory, right or wrong. However, I take the opportunity to throw out two general remarks.

1. I believe that Newton's theory of light was unsound. But I do not therefore affirm that the phenomena which he sought to explain by his theory do not exist, or that all his theories were fallacious and his statements false. For instance, I do not believe that a mixture of blue and yellow paint will be orange, or that if I jump out of a window I shall soar Baldwin-like to the skies. Nor - such is the perversity of the human intellect - do I even believe that Newton, generally speaking, was an ass, or that Young, who upset his theory of light, was a man of superior genius. In the same inconsistent way I believe that Marx's theory of value was unsound, and that Jevons upset it; and yet I do not, with Hyndman's powerful logic, proceed to infer that Marx was an idiot, "Das Kapital" a tissue of nonsense, Socialism an illusion, Jevons immensely Marx's superior, and commercial crises the direct outcome of spots on the sun. I am quite willing to allow, in the handsomest manner, that Marx was the Aristotle of the nineteenth century. But since Hyndman, to my personal knowledge, pretends to know better than Aristotle on one or two points, I expect him to acquit me of presumption in pretending to know better than Marx on the point of value.

2. I cannot admit that facts fatal to a theory can be rendered inocuous to it by a simple statement that the author "never doubted them for a moment." It is by no means safe to conclude that Marx did not know that his theory, as he left it in the first volume of "Capital", would not hold water. Friedrich Engels himself, in his preface to the second volume (Hamburg, 1885) actually challenges those vvho claim that Rodbertus was the real originator of the value theory, to solve on Rodbertian lines the contradiction into which the published part of "Capital" leads us: namely, that though, according to the theory, human labour can create surplus value and machinery cannot, yet as a matter of fact the exploitation of a capital of say 10,000 consisting of 1,000 variable capital (wages) and 9,000 constant capital (machinery &c.), will. return no less surplus value than the same sum invested as 9,000 variable and .1,000 constant capital. Engels declares that the solution is in the third and final volume of "Capital"; but he sarcastically suggests that those who know all about the value theory already from Rodbertus or others had better prove their insight by settling this difficulty before the third volume appears. Yet Engel's authority is appealed to and his words largely quoted in the very article in which Hyndman implies that there is no difficulty, no unsolved contradiction, by maintaining that the theory as developed in the published volumes is a master key to all the economic phenomena of capitalism. Let it be understood, then, that Engels, the arch Marxist, confirms Wicksteed and contradicts Hyndman as to the incompleteness and insufficiency of the theory as far as either of them is in possession of it. Wicksteed, detecting the contradiction, rejects the theory and replaces it, without essential darmage to Marx's superstructure, by a more modern analysis of value which leaves nothing to be accounted for. Engels has the privilege of access to the solution in the mysterious third volume. But what shall we say to Hyndman, who offers us his complete innocence of there being any hitch in the Marxian synthesis as an example of his "thorough comprehension of the teachings of a man of genius"?

After so much preliminary skirmishing, it will perhaps be expected that I should now take the field fairly on the main issue. But there is no enemy to engage; for Hyndman has not dealt with Jevons; and his attempt "to re-state briefly Marx's theory of value", is somewhat marred by the omission of Marx's part of it. "To begin with," he says, "Marx is by no means the originator of the theory that labour - the cost of production in human labour - is the basis of the exchange value of commodities. No political economist of any note has ever disputed this" - on my honour this is not a misquotation - "as far as I know." And so, "to begin with", Marx's theory is not Marx's at all. What does Friedrich Engels say to this old-fashioned attempt to spew that Marx's value theory is simply that of Adam Smith and Ricardo? Must I, after all, vindicate the originality of Marx against Hyndman by challenging him to name any writer who anticipated Marx in that analysis of commodities by which he derived his peculiar theory of value, an analysis which is fundamental in the theoretic chapters of the first part of "Capital"?

Here is Marx's theory. The exchange of one commodity for another implies that the two must be commensurable, as otherwise it would be impossible to determine the proportions in which they should exchange. Commodities being of the most diverse sorts - brandy and bibles is an instance given by Wicksteed-their common measure is not at the first blush obvious. But a common measure they evidently have, since they are exchanged daily. Marx, in search of it, sets about an analysis of commodities as follows. Take the two suggested by Hyndman, boots and tables. Both are useful: both are products of labour. Are they commensurable in respect of their usefulness? Apparently not; for they are used for different purposes: you cannot say that so much foot protection is worth so much dinner supporting (for the life of me I cannot see why not; but this analysis is Marx's, not mine). Since they are not commensurable in point of utility, are they so in point of their cost in labour? Specifically, the labour, too, is disparate: one is bootmaking, the other tablemaking. But what if we carry the analysis a step further, and abstract from the specific character of the labour? We then have remaining "abstract human labour", expenditure of energy, decomposition of tissue, common to both bootmaking and tablemaking. Here, then, is the common element by which you can determine how many pairs of boots are worth a mahogany table. For the rest, see Hyndman, who begins exactly where the controversy leaves off, and naturally finds his way so delightfully smooth that he is astonished at our stupidity in not ambling along with him.

For, of course, the question that has arisen is why the process of reducing the bootmaking and tablemaking to abstract human labour by waiving its specific character was not applied also to the boots' and tables' utilities. Waive also their specific use as foot coverings and dinner supporters; and you have their abstract desirability, their common property of serving human needs. This abstract desirability is the true basis, ground, substance, final cause, efficient cause - what you please - of value. It exists before the commodity itself exists, and is the cause of the commodity being produced and of labour being expended on it. And whilst it remains constant, no alteration of the labour time socially necessary to produce the commodity can alter its exchange value one jot. Hyndman (p. 9) explains a hypothetic fall in the value of boots thus: - "Somebody has invented a machine or some new method, whereby with a less expenditure of labour-force articles of equal utility can be produced," In penning this sentence he has committed economic suicide. The phrase "equal utility" damns him deeper than he has ever damned Jevons. Not until machinery has increased the stock of a commodity to the point at which purchasers are so well furnished that further supplies are less desired by them, does the value fall. I forbear elaboration.

There is another consideration which is omitted, probably on purpose, in Marx's first volume, with results to those who swear by Marx, the whole Marx (bar volume 3), and nothing, but Marx, which may be seen in Hyndman's desperately wide shot on page 61 at the meaning of a. simple sentence of Wallas's. Commodities of the same kind and value are products, not only of labour force, but of raw material which varies greatly in accessibility and adaptability, as every farmer and mine owner knows. Under Socialism we should obtain these for their average cost of production[1]; but individualistic free competition can never permanently reduce the prices of manufactured goods below the cost of their production from the least accessible and most refractory raw materials in use: the resultant profit to the proprietors of the more favourable raw material being economic rent, the main source of "surplus value," Without a thorough grip of this factor it is impossible to defend Socialism on economic grounds against rival systems. For example, neither Co-operation nor Individualist Anarchism are a bit the worse for Hyndman's abusive repetitions and paraphrases of "'Capital", whereas they will not bear criticism on Ricardian lines.

To sum up, Marx's original and distinctive theory of value is challenged because it is founded on an analysis of commodities which, though designed to ascertain the points in which they are commensurable, takes into account only one of those points, i.e., their character as products of abstract human labour. It is alleged that they are equally commensurable in point of abstract utility, and that in practice the comparison made between commodities with a view to exchange is not a comparison of their cost in abstract human labour, but of their abstract desirability, Further, it is pointed out that Marx's postponement of the consideration of commodities of the same kind and price as products of raw material of varying fertility, makes his theory, at the stage finished by the published portion of "Capital", useless as a key to existing industrial phenomena, and would, if rigorously applied, actually disprove the possibility of "surplus value."

In conclusion, I claim great credit for the moderation of my tone, under heavy provocation, towards our fractious but perennially interesting friend Hyndman. Whether I regard his blank ignorance of the very nature of the controversy, or the reckless insolence of his allusions to it, I cannot but admire the indulgence with which we pass over the pseudo-Marxisms which he occasionally launches, in the name of Social Democracy, from his St. Helena at Blackfriars Bridge. The value theory which was worked out here by Jevons in 1871, has swept the old labour theory out of the field in England, Austria, Holland and Switzerland, and is gaining ground everywhere. Hyndman declares it absurdly silly. He could place himself in the very first rank of economic critics by proving it so. Are we to understand that he is restrained by modesty? A third edition of Jevons's Theory comes out; and he does not review it. Wicksteed publishes an admirable exposition of it in a popular form, and is insulted, but not reviewed, in Justice. Wallas reviews Wicksteed, and is told that his allusion to economic rent is discreditable to a writer and lecturer on Scientific Socialism, a censure which is based upon a perfectly irrelevant quotation from Marx, considerately followed by the stupendous suggestion that "possibly it may be the phenomena attendant upon money and consequently on prices which confuse so many writers on the subject." Possibly it is; for one of the phenomena attendant upon money is an indisposition to take trouble, and a propensity to despise one's more laborious fellow creatures.

Let me in conclusion explain that I do not accuse Carl Marx of Marxism, and that I think he deserved something worthier from his pupils than idolatry.

George Bernard Shaw.


[1]This, I take it, is why Marx, instead Of, like Ricardo, treating rent as fundamental, postpones it to his. third volume as a mere incident of private appropriation of raw material.