Academic journal article World Review of Political Economy

19th-Century Labor Money Schemes, Self-Realization through Labor, and the Utopian Idea

Academic journal article World Review of Political Economy

19th-Century Labor Money Schemes, Self-Realization through Labor, and the Utopian Idea

Article excerpt

Abstract: In 19th-century European socialist political economic theory, the money system was widely viewed by reformers as the root of social evil. Robert Owen (1771-1858) and Joseph Proudhon (1809-1865), among others, proposed replacing existing money systems with a currency based on labor time instead. This type of social scheme, which tried to reform both social labor and economic relations by introducing equitable labor exchange, was called "labor money" and became popular among 19th-century European utopian socialists. Often, equitable labor exchange programs were joined with the idea of self-realization through work in proposals for utopian communities. While the "labor money" concept has only enjoyed modest intellectual, political, or economic life over the last 150 years, the idea is revived periodically by those seeking a more cooperative way of life. In the 1980s Dr. Edgar Cahn wrote a book proposing "time dollar" exchange programs and a labor credit system is at the heart of the United States' most successful secular intentional community, Twin Oaks Community, Louisa, Virginia.

Key words: labor money; utopian societies; 19th-century monetary systems; socialist societies; communal groups; labor exchange; self-realization through labor

In the 19th century, many prominent European social, economic, and political thinkers were increasingly drawn to socialist and utopian ideas. Among the more popular was the idea of "labor money." Briefly, "labor money" schemes were conceived on the basis of the economic idea that the value of commodities was chiefly represented by the value of the labor invested in them. The cost of goods in the commercial marketplace, expressed in currency, was consequently viewed as an artificial value. Under this view, price was assigned to goods not to reflect the inherent value of the items, including the labor needed to produce them, but rather in order to produce profit for the capitalist.

Consequently, it followed that a true socialist system would-contrary to the capitalist marketplace-value an equal investment of labor time equally, thereby creating a fair basis for exchange of each workingman's labor. "Labor money," therefore, was an attempt to introduce labor equality into the economic marketplace. Simply put, "labor money" was a currency-type note denominating one hour's investment of labor. These notes could be exchanged for goods at labor exchanges based on the number of labor hours invested in producing a product. In this way, for every one hour of labor invested, the laborer would receive value exactly equivalent to one hour's labor from another in return.

While 19th-century utopian socialists were enamored of the labor money concept, they generally understood that equivalent exchange-in and of itself-was not a necessary and sufficient ideological basis for a utopian community. Consequently, some 19th-century socialist theorists appended the notion of "self-realization through labor" to the idea of labor equality based on a labor exchange program. Charles Fourier (1772-1837) was among the more ardent proponents of this complementary idea, and his name soon became synonymous with one variation of this type of 19th-century communal movement. While Fourier was not a socialist in all respects, and planned to organize his utopian community as a joint stock company, he did intend to require all members to work, although at "attractive labor" of their own choice. This addendum to the communal idea of equitable exchange insured, theoretically at least, that every member of the community would have something to exchange-their one hour of invested labor. Moreover, this idea provided members of communal societies a ready-made rationale consonant with their communal social philosophy for submitting to the community labor system.

While simple, and even elegant, in its conception, the idea of labor money has had a checkered and largely unsuccessful history. Marx roundly criticized the view that a simple exchange of labor chits would ultimately lead to social equality in the Grundrisse (Marx 1973). …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.