Friday, August 20, 2021

Ben Franklin, Proto Marxist

Ben Franklin was one the founding fathers of the United States. He participated in the constitutional convention. He was the first Postmaster General. He did experiments with electricity, when the Leyden jar was a new thing. There is a story about flying a kite in a thunderstorm.

He also wrote about the wealth of nations:

"Finally, there seem to be but three ways for a nation to acquire wealth. The first is by war, as the Romans did, in plundering their conquered neighbors. This is robbery. The second by commerce, which is generally cheating. The third by agriculture, the only honest way, wherein man receives a real increase of the seed thrown into the ground, in a kind of continual miracle, wrought by the hand of God in his favour, as a reward for his innocent life and his virtuous industry."

I find an echo of Francois Quesnay and the physiocrats in the above quotation. He was also a proponent of a labor theory of value:

"Trade in general being nothing else but the exchange of labor for labor, the value of all things is justly measured by labor."

I could not find Franklin in the index of Marx's Theories of Surplus Value. A quick google search had me stumbling upon Aiken's 1966 article.

  • John R. Aiken. 1966. Benjamin Franklin, Karl Marx, and the Labor Theory of Value. The Pennsylvania Magazine of History and Biography 90 (3): 378-384.


Blissex said...

«an echo of Francois Quesnay and the physiocrats in the above quotation»

Indeed, like Ben here they could not see that adding "value" (whatever that is) does not simply mean "creating more quantity", "value" can be added even when reducing the quantity.

But Ben was otherwise a thatcherite, here he advocates "quantitative easing" to drive up the cost of real estate, and that plan has not changed in the nearly 300 years since 1729:

Now the Interest of Money being high is prejudicial to a Country several Ways: It makes Land bear a low Price, because few Men will lay out their Money in Land, when they can make a much greater Profit by lending it out upon Interest [...] On the contrary, A plentiful Currency will occasion Interest to be low: And this will be an Inducement to many to lay out their Money in Lands, rather than put it out to Use, by which means Land will begin to rise in Value and bear a better Price.
[...] A Plentiful Currency will encourage great Numbers of Labouring and Handicrafts Men to come and Settle in the Country, by the same Reason that a Want of it will discourage and drive them out. Now the more Inhabitants, the greater Demand for Land (as is said above) upon which it must necessarily rise in Value, and bear a better Price. The same may be said of the Value of House-Rent, which will be advanced for the same Reasons; and by the Increase of Trade and Riches People will be enabled to pay greater Rents.

That is the same pamphlet in which “the Value of all Things is, as I have said before, most justly measured by Labour” along with a rejection of colbertism:

By Labour may the Value of Silver be measured as well as other Things. As, Suppose one Man employed to raise Corn, while another is digging and refining Silver; at the Year’s End, or at any other Period of Time, the compleat Produce of Corn, and that of Silver, are the natural Price of each other; [...] Thus the Riches of a Country are to be valued by the Quantity of Labour its Inhabitants are able to purchase, and not by the Quantity of Silver and Gold they possess

«I could not find Franklin in the index of Marx's Theories of Surplus Value.»

IIRC "Capital" mentions de Mandeville and probably others to much the same effect, the "labour theory of value" (as opposed to the "labour (of free people) definition of value" that Marx adopted) was fairly popular even in antiquity, IIRC something like that was even argued by Aristotle, or at least some aristotelians.

Blissex said...

«an echo of Francois Quesnay and the physiocrats in the above quotation»

A couple quotes from Marx:
Labor is not the source of all wealth. Nature is just as much the source of use values (and it is surely of such that material wealth consists!) as labor, which itself is only the manifestation of a force of nature, human labor power.
In present-day society, the instruments of labor are the monopoly of the landowners (the monopoly of property in land is even the basis of the monopoly of capital) *and* the capitalists. [...] In England, the capitalist class is usually not even the owner of the land on which his factory stands.

«IIRC "Capital" mentions de Mandeville and probably others to much the same effect, the "labour theory of value"»

«Classical economy grasped this fact so thoroughly that Adam Smith, Ricardo, &c., as mentioned earlier, inaccurately identified accumulation with the consumption, by the productive labourers, of all the capitalised part of the surplus-product, or with its transformation into additional wage labourers. As early as 1696 John Bellers says:

“For if one had a hundred thousand acres of land and as many pounds in money, and as many cattle, without a labourer, what would the rich man be, but a labourer? And as the labourers make men rich, so the more labourers there will be, the more rich men ... the labour of the poor being the mines of the rich.”[2]

So also Bernard de Mandeville at the beginning of the eighteenth century: [...]

Blissex said...

To keep going on my usual point, cost accounting, there are three main meanings as to the "labour theory of value":

* The "labour hypothesis of value", which is the claim that "usually" prices are "related" to the labour content of commodities, and that is what the "classicals", from Bellers, de Mandeville, Franklin, Ricardo, etc. wrote.

* The "labour (of free men) definition of value", which is used by Marx to do macroeconomic cost accounting of the production system to highlight that some classes consume commodities that have use-values without having having contributed "value" to them.

* The "labour theory of value" properly speaking which describes *how* actually-existing prices are *determined* by labour content. I am not aware of any such existing theory that is succeessful, even if some proposed solutions to the "transformation problem" seem to sort-of, maybe get partly there; while neoclassical Economics has no theory of prices, and its theory of barter ratios is pure handwaving.

As to the "labour hypothesis of value", there are two major variants:

* A weak claim that labour content, being the cost of commodities, is usually the lower bound for prices: if the price of a commodity were lower than its labour content it would not be worth producing it. This usually is paired with the hypothesis that utility ("use-value", "ofelimity") is usually the upper-bound for prices: if the utility of a commodity is lower than that of its money price it would not be worth buying it. The difference between labour content and price being "producer surplus" and between price and utility being "consumer surplus", the size of both determined by market power. There is a fair bit of handwaving in these arguments.

* A strong claim that prices of non-anomalous commodities *converge* to their labour content, that is that eventually producer and consumer surplus become small or negligible, so that prices are effectively *determined* by labour content, rather than determined by market power with the lower bound set by labour content. There is usually a lot of handwaving involved in arguments for the strong hypothesis of value.