Monday, October 6, 2014

Locke and Marx's dilemna

In our Cold War and post Cold War world, capitalism and communism, freedom and tyranny, and democracy and Marxism are viewed as clashing opposites.

Yet in 1922, Roscoe Pound observed that Karl Marx, the father of modern socialism and communism, and John Locke, one of the fathers of modern democracy, actually viewed property the same way. For background, Pound was the Dean of Harvard Law School from 1916 to 1936 and is one of the most cited legal scholars of the 20th century. Writing about theories of property, Pound makes the following observation:
This controversy as to the respective claims of him who creates by labor and him who furnishes the materials goes back to the Roman jurists of the classical period. The Proculians awarded the thing made to the maker because as such it had not existed previously. The Sabinians awarded it to the owner of the materials because without materials the new thing could not have been made. In the maturity of Roman law a compromise was made, and various compromises have obtained ever since. In modern times, however, the claim of him who creates has been urged by a long line of writers beginning with Locke and culminating in the socialists.
This passage led me back to both Marx and Locke, to see if Pound's accusation was true.

Locke, in establishing a construct for the foundation of property, focuses on labor. "Nor is it so strange, as perhaps before consideration it may appear, that the property of labour should be able to over-balance the community of land: for it is labour indeed that puts the difference of value on every thing." And again: "Thus labour, in the beginning, gave a right of property, wherever any one was pleased to employ it upon what was common, which remained a long while the far greater part, and is yet more than mankind makes use of." For Locke, it is the act (labor) of taking things out of common ownership, whether it be picking apples or tilling land, that creates the right to that thing taken or improved. "As much as any one can make use of to any advantage of life before it spoils, so much he may by his labour fix a property in: whatever is beyond this, is more than his share, and belongs to others."

Turning next to Marx, we find that once again Pound's observation is correct. Marx casts history as a conflict between the bourgeoisie and the proletariat. The former were the embodiment of capital, the latter of labor. His complaint was that laborers were unable to own property because the means of production were entirely controlled by the capitalists--capital and not labor determined ownership.

The result was the creation of "the modern working class, developed—a class of labourers, who live only so long as they find work, and who find work only so long as their labour increases capital. These labourers, who must sell themselves piece-meal, are a commodity, like every other article of commerce, and are consequently exposed to all the vicissitudes of competition, to all the fluctuations of the market." Accordingly, he concluded, "The distinguishing feature of Communism is not the abolition of property generally, but the abolition of bourgeois property." He challenges the idea that property ownership is based in the supplying of capital, and instead seeks to recreate a society that places it with labor.

So what changed between Locke and Marx? They both have the same foundational interpretation of perpetuity ownership, yet one sought social stability and the other for social revolution. Let me suggest that it is in their assumptions. Or, more accurately, it lies in the assumptions of the world in which they wrote and its changing purpose of law.

To illustrate this, we return to Pound. Pound postulated that the law at various times has been viewed with different purposes. During the Middle Ages, it existed to keep society stable--to keep people in their social places. This view was challenged in the age of exploration and colorization. New continents and new resources meant that conservation and perpetuation were no longer primary goals. Instead, "Men did not so much desire that others perform for them the duties owing in some relation, as that others keep hands off while they achieved what they might for themselves in a world that continually afforded new opportunities to the active and the daring. [...] Accordingly, the end of law comes to be conceived as a making possible of the maximum of individual free self-assertion."

I found it fascinating that in this view, libertarianism is a by-product of the temporary western experience a vast and sudden change in geography. Ideas of limits and place and scale and proportionality were subordinated to the self-made man. And the world was such that the self-made man was an actual opportunity for many.

But--and there is a huge catch--what happens when the limit is found to the new limitless world? How does a society determine property ownership when there is no unowned continent or resource pile from which to extract property? As Pound describes, the law then turned back toward a more Medieval idea of conservation and equity:
When this last stage in the development of the idea of law as existing to promote or permit the maximum of free individual self-assertion had been reached, the juristic possibilities of the conception had been exhausted. There were no more continents to discover. Natural resources had been discovered and exploited and the need was for conservation of what remained available.
Once the common stock is all divided, under Lock's mode, all that is left is reshuffling. Those whose ancestors did not labor, or who lost the fruits of their labor, have no starting ownership and have difficulty obtaining it. A model that started out with ownership based on labor results in one based only on inherited property. This is exactly the social shortcoming Marx identified, referring to it as the bourgeoisie control of the "means of production". Marx's critique largely boils down to the observation that the opportunities assumed by Lock no longer existed and an attempt to restore them. However, Marx failed to realize that he was merely calling for a turning back of the Lockean clock, not a new construct of property ownership.

Enter Adam Smith, writing almost exactly between Locke and Marx. Like Locke and Marx, Smith also based original property ownership in labor: "Labour was the first price, the original purchase money that was paid for all things. It was not by gold or by silver, but by labour, that all the wealth of the world was originally purchased." Yet he recognized that a time would come when there was no more common stock to pull property from, and labor would become subordinate:
As soon as the land of any country has all become private property, the landlords, like all other men, love to reap where they never sowed, and demand a rent even for its natural produce. The wood of the forest, the grass of the field, and all the natural fruits of the earth, which, when land was in common, cost the labourer only the trouble of gathering them, come, even to him, to have an additional price fixed upon them. He must then pay for the licence to gather them, and must give up to the landlord a portion of what his labour either collects or produces. This portion, or, what comes to the same thing, the price of this portion, constitutes the rent of land, and in the price of the greater part of commodities, makes a third component part. [...] As soon as land becomes private property, the landlord demands a share of almost all the produce which the labourer can either raise or collect from it. His rent makes the first deduction from the produce of the labour which is employed upon land.
Smith recognizes, but is also somewhat critical of, this effect of landlords imposing "rent" on what was previously the act of the laborer to create ownership. Yet he recognizes the the price of value of a thing is not based on labor alone, but also on the "rent" payed to the owner of the means of production (his third component is "profit.") In language that sounds like an early echo of Marx's clash of bourgeoisie and proletariat, Smith observes that the non-landowning laborer is at a distinct disadvantage in this new balance of economic power.
What are the common wages of labour, depends everywhere upon the contract usually made between those two parties, whose interests are by no means the same. The workmen desire to get as much, the masters to give as little, as possible. The former are disposed to combine in order to raise, the latter in order to lower, the wages of labour. It is not, however, difficult to foresee which of the two parties must, upon all ordinary occasions, have the advantage in the dispute, and force the other into a compliance with their terms. The masters, being fewer in number, can combine much more easily: and the law, besides, authorises, or at least does not prohibit, their combinations, while it prohibits those of the workmen. We have no acts of parliament against combining to lower the price of work, but many against combining to raise it. In all such disputes, the masters can hold out much longer. A landlord, a farmer, a master manufacturer, or merchant, though they did not employ a single workman, could generally live a year or two upon the stocks, which they have already acquired. Many workmen could not subsist a week, few could subsist a month, and scarce any a year, without employment. In the long run, the workman may be as necessary to his master as his master is to him; but the necessity is not so immediate.
Smith concludes that for a society to be continually improving, it must seek to improve "circumstances of the lower ranks of the people". "No society can surely be flourishing and happy, of which the far greater part of the members are poor and miserable. It is but equity, besides, that they who feed, clothe, and lodge the whole body of the people, should have such a share of the produce of their own labour as to be themselves tolerably well fed, clothed, and lodged." Accordingly, for Smith, good treatment of the working class is both a requirement and a reflection of a society that is increasing its collective wealth. And failure to treat the laborers well is a reflection of a stagnant or declining economy. 

In short, sixty years after Locke, Smith saw the potential shortcomings of a purely Lockean perspective, and sought to warn against it. Seventy years after Smith, however, Marx observed in practice what Smith had warned against in theory: that an inequitable treatment of the workers would lead to decline. Marx took that one step further and added revolution.

Marx embraced the revolution, believing it would solve the imbalance. Yet he still suffered from Locke's optimism and belief that labor alone was a sufficient bases for an ongoing theory of property. He failed to see what Smith (and, according to Pound, the Roman jurists) had previously realized: that the disappearance of a common stock of land and resources necessitated modification of the model of property ownership--one that balanced labor and capital. Marx was still operating in the self-made man world. He failed to identify the root cause of the working class problem, and as a result, when his theories were implemented they created wealth imbalances greater and quicker than what he reacted against. His self-made men were tyrants.
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