3. Summarize the principles expressed in Article One, Chapter Two, of the bolshevist constitution.

4. What classes of citizens were allowed to vote under the bolshevist

régime?

5. Name some groups of individuals which were excluded from the

suffrage.

6. Define the "dictatorship of the proletariat as applied by the bolshevists..

7. Why did the bolshevists suppress the freedom of meeting and other similar safeguards to the liberty of the individual?

8. In what terms did Lenin defend the dictatorship of the proletariat? 9. Why did he consider "freedom of meeting "impossible under bolshevism?

10. What was Lenin's attitude toward freedom of the press? II. What, according to Lenin, was the essence of Soviet authority? 12. What did the bolshevists urge upon radical groups in countries other than Russia?

13. Outline the work of bolshevist propagandists in foreign countries with regard to international relations.

14. How were bolshevist propagandists instructed to act with regard to the internal politics of foreign countries?

15. Outline the aims of bolshevist propagandists "in the economic sphere."

16. What were to be the aims of bolshevist propagandists "in the military sphere"?

17. Give the chief reason why the bolshevist official, Lopoushkin, feared for the future of bolshevism.

18. What, according to this man, were the general effects of bolshevism in Russia?

19. What were some of the earlier steps taken by Lenin in the matter of a return to capitalistic methods?

20. What is the importance of the decree issued by Lenin on August 9,

1921?

21. Give the four reasons why the socialist policy of the bolshevists

was abandoned.

22. To what extent did the decree of August 9, 1921, provide for private control of production?

23. To what extent did this decree provide for the application of capitalistic methods to commercial intercourse and the monetary system?

Importance

of disprov-
ing the
labor theory

of value.

This theory does not

account for

CHAPTER XVI

THE CASE AGAINST SOCIALISM

91. The labor theory of value is untrue 1

The most striking proof of the untrustworthiness of socialism is the fact that the whole socialist doctrine is based upon false principles. We have seen that socialism is founded primarily upon the labor theory of value. If the labor theory is disproved, therefore, the chief stone is removed from the foundation of socialism. In the following extract, Professor Le Rossignol explains why the labor, theory of value is untrue:

[The labor theory of value, or the labor-cost theory, as it is often called], certainly does not account for the value of land, particularly

the value of of unimproved city lots. Such land can be exchanged for cotton, land,

nor for the value of commodities

in the narrow, Marxian sense.

wheat, hats, silver, or gold, and must, therefore, have some property in common with them all, which is the cause and measure of its value. But it cannot be labor-cost, for land is a product of nature.

When we come to commodities in the narrow, Marxian sense of that word, we find innumerable exceptions to the supposed law that "commodities in which equal quantities of labor are embodied, or which can be produced in the same time, have the same value." Old coins, stamps, manuscripts, autographs, birds' eggs, fossils, and the thousand and one objects dear to the heart of collectors, are surely to be classed as commodities, although there is no discoverable relation between their market value and their cost of product as measured in labor-time. What was the labor-cost of the Sistine Madonna? What would be its cost of reproduction? What is the labor-cost of a rare stamp or coin? How much "congealed labor" is there in the egg of that extinct bird, the Great Auk, which sold some years ago for the enormous sum of $1200. On the other hand, how many hours 1 From James Edward Le Rossignol, Orthodox Socialism. T. Y. Crowell & Co., New York, 1907; pp. 15, 17-20.

does not explain the value of the works of

of human labor did it cost to build the pyramids, how many sighs and tears and drops of blood, and what is their intrinsic value to-day? The works of authors, artists, and inventors are commodities in The theory the strictest sense of that word, and yet their market value has no definite relation to the labor-time spent in their production. A popular novelist may receive $50,000 from the sale of a book written in six months, while his less fortunate brother, after spending six years of unrequited toil, must publish his book at his own expense. He has not been able to produce a work of social necessity; therefore his labor-time is wasted, and does not determine the value of the product. . . .

Commodities subject to the caprice of fashion quickly lose their value when their usefulness is gone, no matter what their cost of production or reproduction.

authors, artists and

inventors.

value of

agricultural produce.

Every farmer knows that the labor-cost theory fails to explain It fails to the value of agricultural produce. On some lands wheat may be explain the grown at a cost of 50 cents a bushel; on poorer lands at 75 cents, $1, or $1.25, and yet the total supply, produced at various costs, may be sold on the same market at $1 a bushel. This law of varying costs applies to the production of all raw materials: grain, meat, leather, cotton, wool, sugar, lumber, iron, clay, gold, silver, and the rest, because of the fact that land of the best quality is limited in quantity. In fact, the land-cost of these commodities has as much to do with their value as their labor-cost. But neither land-cost,

labor-cost, or capital-cost can be regarded as of prime importance in determining the value of the product, which is due first of all to utility, or the power which commodities have to satisfy human

wants.

Finally, the value of staple manufactured articles, factory products, The value such as cotton and woolen goods, boots and shoes, refined sugar, of staple manufacand steel rails, is not determined chiefly by their labor-cost. In the tured goods first place, the value of the raw material of which they are composed is not so determined. In the second place, their value as finished products is not determined solely by cost, which limits supply, nor by utility, which controls demand, but by both of these factors together. Utility and cost are the two factors which determine value, and of these utility is chief.

is not explained by

the labor

theory of

value,

as the busi

ness man

knows.

We must reject Marx's

statement

that the

laborer produces all wealth.

How socialism interprets the word "labor."

The need

for expert direction of the

workman.

The business man, whose profits arise from an excess of revenue over expenditure, and whose losses come from an excess of expenditure over revenue, knows well that the value of his goods depends as much upon the demand of the market as upon cost of production to himself or his competitors. What he must first of all do is to supply an article which will satisfy some human want, otherwise he will not be able to sell. A useless article has no exchange value, no matter how great its cost.

...

92. The laborer does not produce all wealth 1

From the above extract it is clear, not that commodities have value in proportion as labor has been expended upon their production, but that they have value according as they possess utility and are scarce. The labor-theory of Marx is, therefore, untrue. From this it follows that we must also reject Marx's statement that the laborer produces all wealth. If some commodities are valuable, i.e. constitute wealth, without regard to the amount of labor expended upon them, then some wealth is created by some other agency or influence than labor acting alone. In the following extract Mr. Brasol attempts to substantiate this theoretical conclusion by reference to practical conditions:

The erroneous assertion of Marx and his followers that labor is the sole producer of wealth becomes still more accentuated when we remember that the term "labor" in socialist theories is always connected with the proletarian class. In other words, the formula that labor is the sole producer of wealth, in the socialist's conception, must read as follows: "Manual labor is the sole producer of wealth."

Considering this dogmatic premise in relation to the problem of erecting a modern office-building, the following can be remarked: Five hundred masons and five hundred carpenters, summoned to erect the Woolworth building, would be unable to cope with this task. The erection of a Woolworth building requires the knowledge and services of an architect, an engineer, a chemist, and a technologist.

1 From Boris L. Brasol, Socialism versus Civilization. Chas. Scribner's Sons, New York, 1920; pp. 64-69.

...

- labor and

Not two,

Those experts, who do not belong to labor in the Marxian sense, are as indispensable to the erection of a modern building as the carpenter and the mason. In one sense the expert is even more indispensable than the manual workman, because the latter can be replaced by the former, while the contrary is not true. The manual workman is unable to direct the activities of the expert, whereas the expert always directs the activities of the manual workman. Therefore, contrary to Marx's affirmation, we must realize that modern production is the result, not of two factors capital, the latter being but crystallized labor but of at least four factors, namely, physical elements, labor in the limited sense of manual production. labor, mental labor of the expert and the manager, and capital. . . Thus, economic practice proves that production is by no means the result of only two factors referred to by Marx, namely, labor and capital. Production is a process by which business ability directs the application of both mental and manual labor to the physical elements of capital.

Thus, we are logically compelled to repudiate Marx's assertion that labor is the sole producer of commodities. Moreover, recent socialist writers, even those of the most radical type- such as Mr. Hillquit - have admitted that Marx's assertion is wrong. In this connection Mr. Hillquit stated as follows: "It requires no special genius to demonstrate that all labor is not alike nor equally productive. It is still more obvious that common manual labor is impotent to produce the wealth of modern nations that organization, direction, and control are essential to productive work in the field of modern production and are just as much a factor in it as mere physical effort."

but four factors are involved in

The con

fession of Mr. Hillquit

to circulate
it among the
working

classes.

This is a good confession, but unfortunately Mr. Hillquit and his His failure colleagues, both in Europe and in the United States, have never endeavored to make this point clear in the workmen's minds. On the contrary, whenever a socialist writer or a bolshevist agitator appeals to labor directly, we always hear the old tune of the Marxian song, to the effect that labor is the sole producer of wealth, that capital is nothing but crystallized labor, and that "all wealth is due to labor, therefore, to the laborer all wealth is due."

Such tactics are indeed mere hypocrisy. Notwithstanding all