Producing and Paying

A correspondent asks if it is correct that “Labour is the source of all wealth.”

The answer to this question is “No.” To say that “Labour is the source of all wealth” would mean that Labour of itself is some kind of inexhaustible reservoir from which wealth (artides of use—or use-values) can be extracted, and would leave out of account the part played by Nature. It is the sort of loose phrase that might be justified in casual conversation if the part played by Nature is left to be understood, but as a definition to be used in studying economic laws if is useless and likely to lead to unsound conclusions.

Nature provides the materials to which labour is applied, and Nature and Labour play an inseparable part in the process of wealth production. Marx criticised the phrase “Labour is the source of all wealth.” He wrote: —

“The phrase quoted is found in all primers for children, and is accurate insofar as it is left to he understood that the work is effected with the aid of the appropriate object and means. But a Socialist programme ought not to permit itself the use of such bourgeois locutions; it ought not to ignore the existence of the conditions upon which the meaning of the phrase solely depends.” (“Criticism of the Gotha Programme.”)

The correct statement of the source of wealth is that wealth is produced by the application of human labour to Nature-given material.

Another correspondent, while agreeing with the above definition, thinks that it contradicts our contention that rates and taxes are not a burden on the working class or, as he puts it, that the workers “do not pay for armaments.”

Here, again, is need for precision. The idea behind our correspondent’s difficulty is that if the workers produce all wealth, then they must pay for everything. The ability to pay is associated in his mind with the ability to produce. But this is a mistaken notion. The workers do not produce for themselves but for their employers. The whole of the articles produced belong to the employers, who sell them and receive the proceeds of the sale. Out of the proceeds they pay away various amounts, including the wages of the workers and rates and taxes. If the armament burden could be reduced the capitalists would benefit by paying away less of their profits in the form of taxes for armaments. Not so the workers. The workers have no means of paying for anything other than the wages they receive (supplemented by charity, social services, etc). If taxes are reduced, and if, as a consequence, prices fall, the workers’ cost of living also falls, and with it their wages. The workers produce the wealth but do not own it.

The tax burden which the various groups of property owners are constantly trying to pass off on to each other, cannot be passed off on to the propertyless class.

DON