E. Belfort Bax

The Law of Maximum

(26 July 1917)

E. Belfort Bax, Law of the Maximum, Justice, 26th July 1917, p.2.
Transcribed by Ted Crawford.
Marked up by Einde O’Callaghan for the Marxists’ Internet Archive.
Proofread by Chris Clayton (May 2007).

Some few months ago I had an article in Justice pointing out the Law of Maximum as the most effective and urgent stepping stone to Socialistic reorganisation in economics. My excuses for returning to the subject again is its actuality and urgency. One would think that no reasonable person would any longer, in view of recent facts, maintain the position that prices on the market are necessarily determined by more or less occult economic laws concerned with the production of the commodities in question. It ought to be now clear to everyone that prices, especially retail prices, are largely factitious and the result not strictly economic, and represent to a large extent the arbitrary exactions of the sellers. This has become so self-evident lately that the idea of the maximum – in a limited form at least – for some of the necessaries of life has become a popular doctrine.

Object Lessons In High Prices

Object lessons in how high prices are manufactured present themselves galore in the town in which I am living. Thus in a shop professing to sell boots cheaper than anywhere else, the price might have been observed, for the same (identical) pair of boots, mounting month by month from 14 to 34 francs. Then again, the most important article of consumption here next to bread, viz., pâtés alimentaires, out of which macaroni in its various forms is made, has been selling at all prices, varying from fr.1.10 to fr.2 per kilo, the quality being the same. Once more a potato-grower has proved in full detail that potatoes can profitably be sold at 20c. per kilo, while the actual market-price varies up to fr.1.20. It is needless to multiply examples. The talk about prices being exclusively, or even in many instances mainly, determined by economic laws with which it is useless to attempt to deal by legislation, evinces itself when brought to the test of fact as so much pseudo-scientific bunkum. And yet it is this superstition of the old Manchester economy which undoubtedly prejudices many people still against the systematic application of the principle of the maximum. A second cause is probably the subconscious shopkeeper instinct in many persons, even though they may not be themselves engaged in retail trade – a dislike of the idea of possible trade profits being interfered with by the sacrilegious hand of public authority.

Competition Will Not Suffice

It is to be feared that, once the war over, many persons will have an awakening who think that competition will suffice, when peace comes, to bring down prices to anything like the pre-war figures. They will soon see the ineffectiveness of their old shibboleths. The systematic application of a maximum, with strong enough penal sanctions for its breach, covering all commodities of general utility, would seem certainly the only way to tide over the difficult period of the gradual breakdown of the capitalist system before an effective Socialist reorganisation is begun.

Opposition to the Law of Maximum

The objection raised by our friend in the trenches to a drastic Law of Maximum such as is proposed – to wit, that it would raise too strong an opposition amongst the capitalist class, is to me futile. Though some interests, especially those of the retail trader, would be and hence the classes involved in them might as such be hostile, yet our friend forgets every man is a consumer first and foremost, i.e. consumption is the end of his economic activity – and that as a consumer the interest of every man would be favourably affected by the change. This fact, though it would not abolish opposition, and even strong opposition from certain quarters, would undoubtedly counteract, up to a point, such opposition all round. The objection that the reduction of prices to a maximum would tend by the well known law to a lowering of wages could, of course, be effectually met by a law of minimum wages, a scheme which was popular before the war under the name of the living wage. The objections to the maximum as proposed in my article, amount in short to the same order of objections which can be urged against any sort of change whatever in economic relations.


Last updated on 28.5.2007