Who Needs Money?

According to Bob Rowthorn, economics professor at Cambridge University, interviewed in Red Pepper (December 1994), “we are stuck with money”. He was answering a question from Hilary Wainwright who had correctly pointed out that “Marx argued that under communism money would be abolished”.

In attempting to refute Marx’s view, Rowthorn (a former member both of the old “International Socialism” group, the precursor of the SWP, and later of the now-defunct Communist Party) could only do so by projecting into a truly communist (or socialist – the same thing) society such as Marx envisaged, the economic needs and organisational requirements of capitalism.

This is most apparent when he argued that money is needed to enable people and communities “to buy and sell”. But as the Communist Manifesto pointed out, socialism would dispense with buying and selling itself (and hence with the need for money). People will have free and unrestricted access to the products of industry (which presupposes a relatively high-level of production and a non-consumerist ethos) while contributing to the production process on an entirely voluntarist basis.

Rowthorn argues that “there has to be a basis on which to claim something in return for providing goods and services”. But why? Where there is free access to such goods and services then the “need” to secure an economic return on your labour becomes redundant; you would work because you want to or because you would derive social esteem from such work, there being no other way in which you would derive such esteem. Status based on the conspicuous consumption of wealth would be meaningless. Indeed, Rowthorn’s approach converges uncomfortably with the conventional apology for capitalism that “human nature” is essentially indolent, thus justifying economic coercion.

Finally, Rowthorn claims that money is indispensable because “you need a common unit of account to provide a standard of value”. This argument was long demolished by Otto Neurath (1919) who pointed out that in a “natural economy” (socialism) there would only be “calculation in kind”. The need for a “common unit of account” only makes sense as a yardstick of exchange value in the buying and selling system which socialism will abolish.

To assert that money is needed because the economy today is too complex to be “planned in a rational and coherent way” is to be distracted by the red herring of central planning. Central planning may well be a logistical nightmare but a relatively decentralised socialist society, operating without money and largely dependent on a self-regulating system of stock control using calculation in kind, is entirely feasible. And compared to the chaos and waste of capitalism, highly desirable.

Robin Cox