Searching for New Jerusalems: P.H. Wicksteed’s “Jevonian” critique of Marx’s Capital

Abstract

In 1884, P.H. Wicksteed published a critique of the first volume of Marx’s Capital, the first detailed analytical encounter in English between Marx’s value theory and the new discourse of “marginalism”. In revisiting that episode, this article has three principal objectives. The first is to show how Wicksteed developed his understanding of political economy, as he moved from initially following Henry George’s Progress and Poverty. The second is to examine why Wicksteed’s defence of George necessitated criticizing the Marxist Social Democratic Federation. The third is to show that Wicksteed’s criticisms of Marx were simply incorrect.

Keywords:

• Marx
• Wicksteed
• Jevons
• Henry George
• socialism

Acknowledgements

I am indebted to staff at Dr Williams’ Library; John Holliday for information and materials regarding H.R. Beeton; and Takutoshi Inoue for copies of material from the H.S. Foxwell Digital Collection, Kwansei Gakuin University Library, before it went online. For comments and suggestions, thanks to Ben Fine, Peter Groenewegen, Prue Kerr, John King, Greg Moore and anonymous referees at this Journal. The usual caveat applies on responsibility for the final product.

Notes

1 Wicksteed 1890, 530. The reference is to the provisional title of Casaubon’s unfinished book in George Eliot’s Middlemarch. Greg Moore has reminded me that this was a particularly dismissive reference as Casaubon was not simply wasting his time on a useless and never-to-be completed research project. He was also doing so in a selfish and arrogant manner.

2 P.H. Wicksteed to J.M. Connell, 18 October 1921 (Dr. Williams’ Library MS 24.103).

3 The Democratic Federation was formed in 1881 and became the Social Democratic Federation in 1884. It will be referred to here as the SDF.

4 Friedrich Engels to Eduard Bernstein, 13–15 September 1884 (in Marx and Engels 2010, 192). The editors of To-Day were Ernest Bax (1854–1926) and James Leigh Joynes (1853–93). It seems likely that Bax had solicited Engels’ contribution.

5 Wicksteed 1884f. Wicksteed used the German and French editions as there was no English translation at the time.

6 See previous accounts of this episode in Howey (1960, ch.13); McBriar (1966, 29–35); De Vivo (1987); Steedman (1989); Flatau (2004).

7 Specifically, the H.S. Foxwell Digital Collection, Kwansei Gakuin University Library, now available online: http://library2.kwansei.ac.jp/e-lib/keizaishokan/foxwell/index.html. Items from this remarkable archive will be cited here by the author, date, KGU and item number. For the history of the Foxwell archive, see Freeman (2006); “Foxwell’s Papers”, Economists’ Papers. Preserving Economic Memory website: http://www.economistspapers.org.uk/?p=1034.

8 As noted above, Joynes was subsequently an editor of To-Day.

9 “The Nationalization of the Land”, The Times, 6 September 1882, 5.

10 “Coercion in Ireland”, Inquirer, 6 May 1882, 292. For Wicksteed at the Aberdeen meeting, Inquirer, 18 October 1882, 704. On Webster (1840–1918), “The Rev. Alexander Webster”, Inquirer, 24 August 1918, 273–74; Aberdeenprotest 2017.

11 Revelation 21: “Then I saw ‘a new heaven and a new earth’, for the first heaven and the first earth had passed away, and there was no longer any sea. I saw the Holy City, the new Jerusalem, coming down out of heaven from God, prepared as a bride beautifully dressed for her husband.”

12 Wicksteed had graduated from UCL and the affiliated (Unitarian) Manchester New College.

13 Wicksteed to Foxwell, 26 October 1882 (KGU 7-589).

14 Wicksteed to Foxwell, 8 November 1882 (KGU 6-599).

15 It is no exaggeration to say that Foxwell regarded Toynbee as ‘saint-like’ (Winch 2009, 250–57; see also Foxwell 1887c, 93–4). Toynbee had previously lectured on George at Oxford. That material was incorporated in his posthumous publication, Lectures on the Industrial Revolution (1884).

16 Wicksteed to Foxwell, 28 November 1882 (KGU 8-599).

17 In the second edition of TPE, Jevons praised T.E. Cliffe Leslie, Shadwell’s System of Political Economy (1877) and Hearn’s Plutology (1864) for the “general idea that wages are the share of the produce which the laws of supply and demand enable the labourer to secure” (Jevons 1879, xlix–l). Using the same wording as Jevons when citing the relevant page of TPE, the Marshalls added the name of F. A. Walker and referred to William Thornton’s On Labour (Marshall and Marshall 1879, 205n). Wicksteed’s reference to Mill’s dictatorship could not have come from the Marshalls – although it could have been fed by Foxwell – and it is unlikely that Wicksteed was enthused by their discussion of land ownership where they wrote: “If a vote could be taken from all Economists throughout the world, it would probably be given in favour of the system under which the land is owned by its cultivator” (63).

18 All emphases in quotations appear in the original material.

19 “Which one of us has not felt as though the shadow of a curse fell across the purity and comfort of his home when he is told that it is the outcome of a ‘struggle for existence’ in which he is the winner, and the pauper and harlot the losers?” (Wicksteed 1882).

20 For Rylett (1851–1936), see White (1994b); “Harold Rylett”, Land and Liberty, No.158, September 1936, 138.

21 “The Maamtrasna Massacre”, Inquirer, 13 January 1883, 29–30.

22 J.P. “Progress and Poverty”, Inquirer, 27 January 1883, 57.

23 F.Y. Edgeworth to Foxwell, 3 January 1883 (KGU 22-259).

24 Edgeworth’s lecture was reported in “Town Club – Land and Rent”, Hampstead and Highgate Express, 17 February 1883. Copy in Foxwell, “Notes on Deaths of Economists and Press Obituaries’, n.d. (KGU 577-1). In an accompanying note, Foxwell wrote that, at the time, “Progress and Poverty had begun to disturb the minds of some of the more simple-minded bourgeois of Hampstead, who were impressed by George’s constant invocation of the Deity & the moral law to justify his proposed confiscations. But this was a stale trick”.

25 Foxwell’s lecture was reported in “Study of Social Questions”, Cambridge Review, 13 February 1884, V (114), 183. The quotation above is taken from his “MS notes on Henry George, land, property in land”, n.d. (KGU 530-1), which seem to be part of his notes for the lecture.

26 Wicksteed to Foxwell, 9 March 1883 (KGU 55-259).

27 Wicksteed 1883a–c. Working from a shorthand writer’s notes, Alfred Milner (who joined the staff of the Pall Mall Gazette in 1881, staying until 1885) edited Toynbee’s lectures for publication (Toynbee 1883). Due to his ill health, Toynbee was unable to edit the notes before his death and Milner asked Foxwell to check the proofs. Foxwell declined, suggesting Alfred Marshall instead, although Milner thought that was not feasible (Alfred Milner to Foxwell, 8 February 1883 (KGU 53-259); 10 February 1883 (KGU 57-259)). On the lectures, see Kadish (1986, 213–16), who notes (216) that Milner censored a number of Toynbee’s statements on Ireland and abolishing the House of Lords because they were politically embarrassing. The text of the published lectures was appended to the first printing of Toynbee’s Industrial Revolution in May 1884, although it was omitted from all subsequent reprints and editions. This was because, Kadish also suggests, the edited lectures were still too radical for Milner as they could be read as supporting Irish Home rule and a more general anti-imperialist position.

28 In the relevant chapters of the Progress (Book IV, chs II–III), George tended to switch without warning between referring to ‘wages’ as a real rate and as a share of output. When Toynbee (1883, 14–15) accused George of inconsistency on this and other matters, Wicksteed acknowledged the inconsistency in “one or two unfortunate passages” of the “two very important chapters”, but argued that it was not a fundamental problem. Toynbee’s critique was “a perfectly fair polemic against Mr. George, but it does not affect his system” (Wicksteed 1883b, 276). In any case, “it is, of course, no argument against the tenable theories of a writer to say that he has in several places advanced untenable theories on the same subject” (Wicksteed 1883c, 292).

29 Mines, shops and building sites would be deliberately kept idle “because the landlord asks too high a rent” (Wicksteed 1883c, 292). Wicksteed cited Toynbee (1883, 37) in support of that point.

30 When Toynbee argued that empirical evidence showed wage rates had not fallen in the US, Wicksteed amended the argument to say that speculation had a “tendency” to lower wages that would “otherwise” have been higher (Wicksteed 1883c, 292).

31 Shadwell (1877, 134–6; 1880, 23–4, 54–5). For Shadwell, see Steedman (2000).

32 For Jevons’ dismissal of George in letters to Harold Rylett, see White (1994b). Although part of a relevant letter was printed in the Letters and Journal (Jevons 1886, 444), Wicksteed made no mention of it in his review of that text (Wicksteed 1886).

33 Wicksteed might have been referring to Walras (1881). Foxwell had asked Walras for a copy of that pamphlet after it was reviewed in the Journal of the Statistical Society (Jaffe 1965, vol. 1, 524–5).

34 From Foxwell’s diary: On dining with Wicksteed at the Beetons’, “Interesting discussion on George” (16 April 1883); “Dined with Henry George at [Sydney] Olivier’s rooms. V. pleasant party” (8 April 1884) (KGU 15¹/₂).

35 On Marshall at Oxford, see Stigler 1969, 217–26. There had been another rowdy meeting the previous week at Cambridge (“Mr. Henry George”, Cambridge Review, 12 March 1884, V (118), 255–6).

36 Juvenis. “Mr. Wicksteed and Mr. George”, Inquirer, 19 January 1884, 37. Wicksteed’s response to the use of the Juvenis pseudonym provides a striking example of how well he could employ the rhetorical device of an iron fist in a velvet glove (Wicksteed 1884b).

37 Little detail has been published about Beeton’s activities in economics. See, for example, the obituary by Bonar (1934).

38 At some points in the 1880s, Wicksteed took lessons in the differential calculus from John Bridge, mathematics tutor at UCL, although the dates of this are not clear (Herford 1931, 200n).

39 Pratt (1824–1907), a pacifist credited with founding the International Arbitration and Peace Association in 1880, met Walras at Lausanne in 1871 and, in April 1874, following a request from Walras, sent him the names of 17 British economists who might be interested in his work (Jaffe, 1965, vol. 1, 361n, 383–85). The list “excluded Marshall and mislocated Fawcett in Oxford” (Whitaker and Kymn 1993, 55).

40 Foxwell diary, 16 April 1883 (KGU 15¹/₂). Wicksteed referred to another dinner at the Beetons’ in January 1884 (Wicksteed to Foxwell, 8 January 1884 (KGU 18-123)).

41 Toynbee to Foxwell, 5 January 1883 (KGU 63 – 259). There is further evidence that Hyndman was sympathetic to Toynbee’s George lectures. Hyndman subsequently told Bernard Shaw that, with regard to Toynbee’s statistics on rent, “I went over them … with him before he lectured” (Letter from Hyndman to Shaw, 12 July 1889, British Library, G.B. Shaw Papers, Series 1, vol. XXXI, Add MS 50538).

42 Wicksteed to Foxwell, 12 March 1883 (KGU 54-299).

43 Beeton to Foxwell, 14 January 1884 (KGU 20-123); 21 February 1884 (KGU 16-123).

44 Beeton to Foxwell, 23 February 1884 (KGU 17-123).

45 Beeton to Foxwell, 20 October 1884 (KGU 15-123); 30 October 1884 (KGU 14-123). Nor was Foxwell an active member of the Economic Circle in October 1884. Beeton referred to “A few friends who meet at my house every other Tuesday to discuss Economic questions … Wicksteed & Edgeworth having held on the last occasion that Jevons & Walras teaching on the Theory of Exchange is true & Ricardo & Mill false [George] Armitage Smith (I don’t know whether you know him) is going to reconcile the two, as I understand it” (KGU 14-123).

46 The ‘challenge’ claim was made by Robert Rattray (1918). For Wicksteed’s rejection, Wicksteed (1918). Despite this, Rattray, who had met Wicksteed “a number of times”, repeated the claim in 1946 (Rattray 1946), which helped to create a false trail regarding Wicksteed’s submission of the To-Day article. At the same time that the Economic Circle shifted to Hampstead, the anarcho-socialist Charlotte Wilson organized a ‘Karl Marx Club’, also in Hampstead, to read Volume I of Capital. Over the next four years, the discussion group subsequently became the ‘Proudhon Club’ and then the ‘Hampstead Historic Society’. At least in the early stages, members of the group included Edgeworth, Sidney Webb, Shaw, Annie Besant, Sydney Olivier, Graham Wallas and H.H. Asquith (!) (Hinely 2012, 13). Shaw also listed Belfort Bax as an early participant (Shaw 1889, 129). Noting Wolfe’s claim (1975, 178–9, 206) that Wicksteed had also attended what Webb patronizingly referred to as “Mrs Wilson’s economic tea party”, and that the group was dominated by Fabians, Ian Steedman cited Rattray to suggest that it was in that group that the ‘challenge’ had been issued to Wicksteed (Steedman 1989, 118–19; see also Stigler 1986, 291). Apart from the point that Wicksteed explicitly denied Rattray’s claim, there is, so far as I am aware, no evidence that Wicksteed ever attended meetings of the Karl Marx Club.

47 Although the date for that issue of To-Day was January 1884, it was evidently available the previous month.

48 Beeton to Foxwell, 31 December 1883 (KGU 33-7). For an example of Beeton’s unremitting hostility to Hyndman and the SDF, see his letter, “Political Economy and Socialism”, The Times, 7 October 1885, 4.

49 Wicksteed translated Marx as referring to ‘labour-force’ rather than to ‘labour-power’, for which he subsequently blamed Bax, the editor of To-Day (Flatau 2004, 81). I use Wicksteed’s terminology for the most part here.

50 Wicksteed claimed that “the great logician has … fallen into formal (if not … substantial) error” (Wicksteed 1884f, 398) in excluding value in use from the determination of value in exchange. According to Wicksteed, Marx argued that the exchange value of commodities was to be explained only as the “products of labor”, having been “stripped of all physical attributes, i.e. of everything which gives them value in use”. However, Marx then added the “important statement that the labour does not count unless it is useful”. This “surrenders the whole of the previous analysis” for, if only useful labour was relevant, the commodities cannot have been “stripped” of the “abstract utility, conferred on them by abstractly useful work”. Hence, it was not the case that the exchange value of commodities could be explained in terms of “abstract human labour” alone (Wicksteed 1884f, 395, 396). In the pages to which Wicksteed referred, Marx was discussing the long-period exchange value of reproducible commodities, a point that Wicksteed acknowledged (Wicksteed 1884f, 397). Marx argued that, as there was no common unit for designating use values, units of abstract labour were all that remained to explain exchange value. It was clear from this account that while value in use could not determine value in exchange, it was a precondition for it (Marx 1990, 126–31). (That was also, of course, the position of Ricardo). While it might be argued that Marx’s discussion of value in use, especially in Volume 3 of Capital, is not without problems (Steedman 1989, 134–40), the analysis in Volume 1 was not illogical as Wicksteed claimed. Indeed, having made his claim about Marx at some length and then arguing that “value in exchange is rigidly determined by value in use”, Wicksteed made essentially the same distinction as Marx between a precondition and a determinant of exchange value within the terms of his own argument: “labour is … one of the sources … alike of value in use … and value in exchange … but in no case is it a constituent element of the latter any more than of the former … Labour … confers upon suitable substances both … value in use …[and] value in exchange … but it is not an element of either” (Wicksteed 1884f, 404, 398). Wicksteed was apparently unable to extend to Marx the rather generous reading method that he had previously accorded to Henry George (see above).

51 I have added the term for cost of production as the definition was not clearly explained and no symbol was given in TPE. The argument entails, however, that there is a given wage rate, presumably measured in gold, which is the same in both industries. Cost of production can thus be represented, for X and Y respectively, as c₁ = (1/ω₁)w; c₂ = (1/ω₂)w, where w is the given wage rate.

52 For detailed discussion of the long-period equilibrium condition, including Jevons’ assumption of constant labour productivity and his odd treatment of cost of production, see White (1994a, 2004, 2005). Cf. Black (1970, 25) and Steedman (1989, 123, 126) who assert that Jevons only discussed diminishing returns.

53 The law of indifference was Jevons’ term for the assumption that all commodities exchanged at the same ratio in any market ‘at any moment’. It required highly restrictive conditions (White 2001), none of which was mentioned, let alone considered, by Wicksteed.

54 Wicksteed added that labour “can indefinitely modify the number of … things, and by so doing can modify their (final) utility, and so affect their values” (Wicksteed 1884f, 407).

55 It is possible that Wicksteed’s reading of TPE drew on Jevons’ notorious ‘catena’ near the close of Chapter IV: “Cost of production determines supply. Supply determines final degree of utility. Final degree of utility determines value” (Jevons 1879, 179). Even if that was the case, it depended on ignoring Jevons’ clear statements about the determination of long-period values in the following chapter.

56 For a more detailed discussion of this problem for Jevons, see White (2001).

57 For an explanation of how Jevons limited the domain in TPE, see White (1994a).

58 Wicksteed did note that Toynbee had not mentioned George’s theory of commercial crises. However, because crises were, on George’s account, “only an acute form of a disease which is chronic in progressive industrial societies we need not so much lament this omission” (Wicksteed 1883c, 292).

59 “Reviews”, Inquirer, 15 October, 682. The previous week, Wicksteed had also written to Leon Walras enclosing a copy of the critique, which Walras praised in response (Jaffe 1965, vol. 2, 12, 14).

60 “Dined at Beeton’s. 7.0. Discussion on Theory of Value – Wicksteed etc.” Foxwell diary, 11 November 1884 (KGU 15¹/₂).

61 Foxwell diary, 2 December 1884 (KGU 15¹/₂).

62 Donkin told Foxwell that, while he was “ignorant of the subject of his work”, he had seen “a good deal” of Marx in the last years of his life. He also had a “great regard” for Engels “as I think anyone does who knows him. Marx too was one of the most delightful men in private life that I have ever known.” Donkin to Foxwell, 14 November 1884 (KGU 15-61).

63 “To-Day”, Justice, 4 October 1884, 5; “Tell-Tale Straws”, Justice, 1 November 1884, 5. Although the comments were unsigned, they were presumably written by Hyndman.

64 Shaw (1885). It might be noted that, while he did not make much of it, Shaw identified a continuity problem in Wicksteed’s account which, as Howey (1960, 123) noted, Wicksteed ignored in his response (Wicksteed 1885).

65 “The Socialist Magazine”, Justice, 3 January 1885, 2.

66 Foxwell did acknowledge, however, that the “most truly original and valuable parts of Marx’s work are those in which he describes the economic evolution of society. His … vivid perception and portrayal of the immense social significance of industrial development will be long studied for the sake of the strong stimulus it gives to the economic imagination; a stimulus greatly needed in this country” (Foxwell 1887b, 5). A subsequent remark by Wicksteed suggests that he broadly agreed with Foxwell on that point (Wicksteed 1890, 530), although he had appeared to be dismissive of Marx’s more general historical analysis in 1884 (see the peculiar remark in Wicksteed 1884f, 391n).

67 See letters by Shaw and Hyndman in the 1887 Pall Mall Gazette: 7 May, 3; 11 May, 11; 12 May, 11; 16 May, 2. In his May 12 letter, Shaw claimed that his reply to Wicksteed was written “from the Ricardian or Cairnesian point of view”. For discussion of Shaw’s conversion and attendance at the Economic Circle, see the references in note 5 above.

68 Wicksteed 1888, 116–22; see Flatau 2004, 82–88.

69 W.S. De Mattos, “Value”, Justice, 8 June 1889, 3.

70 This was the basis of the claim, often repeated since, that Jevons had privileged demand to counter Ricardo’s privileging of supply. Although the validity of Marshall’s criticism will not be pursued here, in my opinion, although Jevons’ account was not without fault, Marshall’s account caricatured the analysis in TPE.

71 S.W. “Death of W. Stanley Jevons”, Commonweal, 4 (135), 8 November 1888, 251. Could S.W. have been Sidney Webb?

72 On this basis, Wallas argued that Marx and Wicksteed/Jevons could be reconciled: “Each grants … the truth of the other’s propositions, but attaches more importance to his own” (Wallas 1885, 83).

73 Historians have noted that the ‘Jevonian-Wicksteedian’ influence on the Fabians has been exaggerated (see references in note 5 above). The exaggeration was due in no small part to Shaw who continued to retail his version of the Wicksteedian victory over Marx on value and his own conversion well into the next century. In a report of a discussion with Shaw, however, G.V. Portus recorded that when he objected that Jevons and Marx were both wrong because value “could not be derived from supply alone [Marx] nor from demand alone [Jevons]”, Shaw could not provide a satisfactory rebuttal (Portus 1927).

74 H.S Foxwell to J.N. Keynes, 24 January 1901 (J.N. Keynes papers, 1/49, Marshall Library, University of Cambridge). Foxwell used almost identical language in his lectures. See the undated lecture notes, “Notes on the Theory of Value, Supply and Demand” (KGU 572-1, sheets 29 and 36).

75 Foxwell was generally effusive about the Alphabet and had recommended that it be published by Macmillan. However, he did argue that “Mr. Wicksteed does not seem adequately to recognise the extent to which habit, custom, inertia, and social institutions give rise to discontinuity, even in large communities; nor does he deal satisfactorily with the determination of value in the cases, such as that of the labour bargain, where discontinuity must be assumed” (Foxwell 1889, 301; cf. Wicksteed 1888, 128). Foxwell also thought that Wicksteed had gone “too far” in claiming that exchange value was “never” a function of cost of production.

76 It has been claimed, in a reference to the 1880s, that “Wicksteed’s … radical leanings … diminished subsequently” (Stigler 1986, 291). While it not clear what, precisely, ‘radical leanings’ means, if the reference was to land nationalization, it is clearly incorrect (cf. Wicksteed 1918).

77 Although Wicksteed characterized himself as a sympathiser with the ‘social ideals’ of socialism (Wicksteed 1908, 761), there was little sign of that in his review of William Morris’ utopian News from Nowhere: “many readers may be partly convinced by it that life would be more endurable without misery, without smoke, without competition, without drudgery, without enterprise, without pedantry, without conventions. Can we reach such a state by Trafalgar Square meetings, and could we preserve it without stern self-discipline? Morris seems almost inclined to say, yes, to both these questions. ‘O sancta simplicitus!’ we cry” (Wicksteed 1891, 133).

78 It was also not the case that Jevons’ “’law of the variation of utility’ fully accounts for all the phenomena of supply and demand” (Wicksteed 1884f, 406). While Jevons argued that ‘law’ was the principal explanatory factor, other factors were necessary to account for the ‘laws of supply and demand’. Indeed, it was for this reason that Jevons never drew supply and demand curves (White 1989). See also, in this regard, the discussion of Jevons’ analysis of labour supply in Spencer (2004).