De Leonist Society of Canada, The Marxist Market Economy

The Marxist Market Economy
De Leonist Society of Canada
From the Discussion Bulletin
May-Jun 2001 #107, pages 21-22

Dear DB:


In the January-February 1999 issue of the then De Leonist Review we published an article titled SOCIALISM'S MARKET ECONOMY. The article also appeared in DB97 (the Sept-Oct 1999 issue of Discussion Bulletin.) Quoting from that article as follows:

"Of all the dust raised by the defenders of Capitalism with which to confuse the working class, thus check the advent of Socialism, none appears thicker than the dust raised by the mass media around the term market. Here the phrase "market economy" is dished out as a synonym for the phrase capitalist economy and as an antonym to what is labeled 'Soviet-style command economy.'

"Anyone who has given thought to the matter will know that whereas market economy is descriptive of a capitalist economy, it will also correctly describe any other economy wherein, directly or indirectly, an EXCHANGE OF PRODUCTS PREVAILS."

Today, our description of the term market economy is being challenged by devotees of what is termed non-market Socialism. Thus in DB105 (Jan-Feb 2001) Frank Girard maintains "But of course no market is involved in the socialist society," while with an eye upon Marx's Criticism of the Gotha Program, Dmitriy Fomin appears to explode a socialist market concept by pointing to the following paragraph:

"Within the cooperative society, based an the common ownership of the means of production, the producers do not exchange their products; just as little does the labor expended on the p.roducts appear here as the value of these products..." (The words do not exchange are emphasized by Fomin.)

What now? In order to be in tune with Marx, will we have to recant our claim that a socialist economy will be based upon an exchange of products? It would certainly seem so, but let's not be  too hasty for in the paragraph immediately following the above, Marx states: "What we are dealing with here is a Communist [i.e., a socialist] society, not as it has developed on its own basis, but, on the contrary, as it is just issuing out of capitalist society..." (Perhaps the point would be even more readily perceived with the addition of a single word, thus: "What we are dealing with here [however] ,is a Communist society, not as it has developed on its own basis...")

The matter now seems clear. With cogent reasoning Marx, in The Gotha Program., projects not merely one but two scenarios of socialist society-two "phases" of "Communist" (i.e., socialist) development. The first phase features a socialist market economy, the second or "higher phase" features a socialist non-market economy. At the same time it appears to us that the non-market Socialists who propose to bypass the Marxist socialist market are not only creating problems where none need exist but are sidetracking from answers that they wish not to hear. For example:

* Girard asks: "Wouldn't you [we] agree that Marx is saying that the exchange of labor time for money (wages) and then for goods and services is the same in principle (exchange of equal values) as takes place in the market under capitalism?

Here is a pretty kettle of fish, containing as it does a redundancy which was obviously not intended! Reworded, the question now becomes: "Wouldn't you [we] agree that Marx is saying that the exchange of labor time for labor time vouchers and then for goods and services is the same in principle (exchange of equal values) as takes place in the market under capitalism? Do we agree? Yes, we do, and quote Marx to this effect as follows: "So far as the distribution of [individual means of consumption] among the individual-consumers is concerned, the same principle prevails as in the exchange of commodity-equivalents; an equal quantity of labor in one form is exchanged for an equal quantity of labor in another form."

At the same time, while recognizing the above "exchange of equal values" principle, we would draw special attention to quite another principle concurrently at work in the above scenario -- a principle determining the value of the "equal values" being exchanged -- a principle inherent in Girard's phrase, "the exchange of labor time for money (wages)." We refer to Capitalism's extraction of surplus value from the wage worker! -- a process wherein, as demonstrated by Marx, the Capitalist sponges up all the value of the worker's product except that part (a small part at that) which the wage represents-an exploitive principle which all true Socialists decry by calling for "Abolition of the Wages System!" (As De Leon would say, Stick a pin there!)

* Meanwhile what becomes of Girard's assertion that "Of course no market is involved in the socialist society."?

(1) Quoting from The Gotha Program wherein Marx describes some economic transactions that he suggests would take place in the first "phase" (the first stage) of a "Communist" (i.e., socialist) society: "He [the individual producer] receives from the community a check showing that he has done so much labor (after deducting his labor due to the common fund), and with this check he draws from the common store as much of the means of consumption as costs an equal amount of labor." Wouldn't Girard agree that these exchange relations typify in principle the relations that obtain in a market economy?

(2) Girard has it that "The individual producers in a socialist society -- no matter what the stage of socialism -- will simply be taking their rightful share of the social product, not" This is Girardism, not Marxism! "Taking their rightful share"sig-nifies the "higher phase" of a socialist society-a phase wherein society may at long last "inscribe on its banners: 'From everyone according to his faculties, to everyone according to his needs!" Hot so in the first phase! Here the "rightful share" of the individual producer will be determined by the quantity of labor that he or she has contributed to the social store! Finally....

(3) Nor can Girard back up his assertion with proof by simply observing that "Markets, whether using money or barter, assume owners and buyers and sellers." That is, by simply ignoring the fact that the Marxist market economy replaces money with the labor voucher as the medium of exchange, which voucher will enable .its owner to make purchases from society's stores of consumer goods which he or she has helped create.

* As for Fomin, we have to confess that we found difficulty here and there in getting at his meaning. Nevertheless he, too, appears to reject the labor voucher exchange function which Marx considered essential to the first phase of socialist development. As Fomin put it: "To end this P.S., let me state that 'building of any moneyless [but still] market economy1 is equal, in my opinion, to getting 'dry water."

* In our article Socialism and the Market (in DB101), we held that:

"Not the least moral hangover from capitalist society that could be expected to plague a newborn socialist society would doubtless be a continuing belief, shared by the dethroned capitalist class and its supporters, that the wages system had been too rewarding a system to be scrapped. It should go without saying that this element, a rapacious element, would stop at nothing in order to abort a socialist revolution. And how does Marxism prepare to meet such eventuality? Marxism safeguards the 'first phase' of Socialism with a market economy that revolves around the labor voucher. On the other hand, Crump etc. 'safeguard' the new social order by rejecting the labor voucher and moving directly to non-market Socialism-that is to say, by providing free access to consumer goods for one and all including the aforesaid destructive element bent on the restoration of wage exploitation!" To which Girard responds in DB105 by stating: "This raises all sorts of questions, not the least of which is just how a 'stage-one' [i.e. a first phase] socialist-society will go about repressing the 'dethroned capitalist class and its supporters....' I'm not suggesting that the DLSC, with its roots in the SLP's anti-Stalinism advocates the dictatorship that the Bolsheviks used to maintain social control. But it seems to me that further explanation is necessary."

Accordingly, we oblige by pointing out that whereas both Girard and the DLSC have our roots in the SLP's Marxism-De Leonism, that "further explanation" should be as well known by him as it is by us. It of course lies in the promise of ECONOMIC POWER that is latent in Daniel De Leon's magnificent concept of Socialist Industrial Unionism! -- a concept elaborated by De Leon in his immortal 1905 address titled Socialist Reconstruction of Society.

* Arising from the question of how to safeguard a socialist victory against capitalist reaction is a question of how long such protection might be deemed necessary. Quoting from our above article on this point: "As Marx makes clear [in The Gotha Program], there is a lot more than adequate productive forces required to warrant society's transition from market Socialism to non-market Socialism!" And how does Girard handle this matter? In DB105 he seems to be itching to have done with a labor-voucher economy, stating his belief that:

"The problem of scarcity -- the only currently legitimate excuse for the ['two-stage socialism'] idea-has been solved planet-wide. The sweat and suffering of our class over the past 200 years has created the conditions that will enable us to produce goods and services for everyone-in excess of needs. There is no need now to ration consumption of goods and services, nor to construct a social mechanism to do so."

No "two-stage" Socialism? No socialist market? In the first place we believe Girard skates on thin ice with his assertion that the problem of scarcity "has been.solved planet-wide." Beyond that, try tho we do, we are totally unable to see how Girard's scenario (marked as it is by rejection of labor voucher protection against capitalist greed) could do other than subject our class to countless more years of "sweat and suffering"!


The riddle of the LABOR VOUCHER should riddle no longer. This voucher (a) -- Confronts the erstwhile capitalist parasites and their hangers-on with the choice of having to work or go hungry; (b) -- Unlike money, is not exchangeable for means of social production hence is not transmutable into Capital; and (c) -- Replacing money, hails both the demise of the wages system and the advent of a Socialist Market Economy!