The name ‘Ricardian Socialists’ was given currency by H.S. Foxwell. Introducing the English translation of a work by the Austrian jurist Anton Menger in 1899, he complained that ‘the important work’ of the Ricardian Socialists had been almost wholly ignored ‘until the last few years’. Since that time the name has traditionally been used to refer to certain authors in England, especially between 1820 and 1830, and to a lesser extent in the decade following, who claimed that the workers had a right to the entire product of their labour. Starting from their observation of a contradiction, they developed a critique of existing distribution (with implications for development potentialities). On the one hand, it was admitted that labour was the sole source of value. On the other hand, they observed that much of the product of labour – that part which exceeds the ‘necessary consumption’ of the labourer – is taken, in the form of rent, profit and taxes, by the owning classes who contribute nothing to production.

Following M. Beer (1919), within this ‘movement’, whose members were in some respect very different from one another, we may distinguish two groups. On the one hand, there were the ‘anti-capitalist economists’, like T. Hodgskin, P. Ravenstone (pseudonym of Richard Puller) and some anonymous authors of pamphlets (such as The Source and Remedy etc., 1821). On the other hand, there were the ‘cooperative socialists’ close to Owen, such as W. Thompson, J. Gray and J.F. Bray. The distinction – with the further qualification that Bray’s work can be viewed as a moment of synthesis between the two currents – is useful for tracing the broad outlines of the cultural and political background against which these authors stand. And it may also indicate that it is, above all, those belonging to the first group who are of greater interest from the point of view of economic analysis. With their greater interest in pursuing economic themes, these authors show a closer adherence to the mainstream of classical political economy, both as regards the structure of their analysis and its subject matter. This obviously holds true even when the motive behind their writings is frequently – as Foxwell (1899, p. lxxiii) also reminds us – that of opposition to the conclusions reached by Ricardo or other classical economists.

No consensus of opinion exists concerning the importance of these authors’ contribution to economic analysis or the Ricardian (or at any rate ‘classical’) basis of their thought. Marx, among others, devoted several pages of his Theories of Surplus-Value to a careful analysis of the writings of the first of the two groups distinguished above (Marx 1910, Part III, ch. XXI). Schumpeter, however, held that the writings of the group called Ricardian Socialists ‘which of course is entitled to a great place in the history of socialist thought, offer but little that is relevant to a history of economic analysis’ (Schumpeter 1954, p. 479).

Introducing a discussion of these authors, Marx stated that their work derived entirely ‘from the Ricardian form’. The link between Ricardo and the English protosocialists was recognized by Foxwell but has, more recently, been denied by Hollander (1980) (but for hints in this direction see Lowenthal 1911, p. 103; Blaug 1958, p. 148; Hutchison 1957, p. 89 and 1978, p. 242; in a very different context from these, Hunt 1977, and 1979, p. 149). In the introduction from which we have quoted, Foxwell took the opportunity to unleash a fierce attack on Ricardo, employing the methodological critique of the German Historical School as well as the judgement of Jevons (‘Ricardo’s crude generalisations … gave modern socialism its fancied scientific basis and provoked, if they did not justify, its revolutionary form’). If instead of being neglected for half a century the work of the Ricardian Socialists had been subjected to ‘searching criticism by the best economists of the time’ – he wrote – the ‘elementary blunder in method’ of Ricardo would have been more promptly rectified (Foxwell 1899, pp. xl-xli). Hollander, however, in a study of the writings of Hodgskin, the most important and influential of the Ricardian Socialists, maintains that, on the one hand, the ‘vehemence’ of his critique of Ricardo, and on the other, his attachment to the so-called ‘adding up theory’ of value of Smith – which Ricardo rejected – make it impossible to rank Hodgskin in the Ricardian tradition.

  1. 1.

    Hodgskin and the other Ricardian socialists stand at an important crossroads in the development of British economic thought in the 19th century. Thus, aside from their intrinsic interest, their writings can also be studied for the support they lend to one or another of the three main interpretations that have been offered of that development, i.e. those of Marx, Jevons and Marshall. According to Marx (1873, vol. I, pp. 14–15), the end of classical political economy (which comes after Ricardo’s death) and, parallel with this, the progressive search for and propagation of alternative theories of profit, must be traced back – together with the problems of analysis left unsolved by Ricardo – to the employment of the Ricardian theory ‘as a weapon against bourgeois economy’ used by the Labour writers. They had undermined the possibility of founding on the basis of that theory a ‘harmonious’ vision of capitalist society which would enable it to go on being considered as a ‘definitive form’ of social production. The anti-Ricardian reaction of the 1830s and 1840s – set against a background in which class struggles were becoming ever sharper and more extensive – must thus be seen, according to Marx, as a reaction to the ‘unpleasant side of classical political economy’ (Marx 1910, p. 502) which these authors had brought out.

    Subsequently, Marx’s interpretation has found support in Meek’s (1950 and 1967) survey of the work of Read, Scrope and Longfield. According to Dobb (1973, p. 166), the ‘anti-Ricardian reaction’ of the 1830s and 1840s to some extent found its fulfilment in the analogous ‘reaction’ in the late 19th century associated with Jevons and his followers, among them Foxwell himself, which led to the ‘rediscovery’ of the Ricardian Socialists. Hollander’s recent attempt to deny a Ricardian basis of Hodgskin’s writings tends to suggest that after Ricardo’s death not only would there have been no grounds for reacting against a ‘dangerous’ use of the Ricardian theory, but also that there was apparently no such reaction. In this view, Ricardo stands in a continuous line of development carrying the entire current of British economic thought from the first half of the 19th century up to Marshall and, more generally, to the marginalist theories of the last quarter of the 19th century.

  2. 2.

    If we except Thompson, who stands very close to Bentham’s utilitarianism, even if in a contradictory way, all the other Ricardian Socialists argue from a premise of Natural Law that reflects the influence of Locke, Adam Smith and Godwin (and thus Rousseau). Whether dealing with the nature and origin of capital (Ravenstone and Hodgskin), the theory of value and distribution (Hodgskin) or the obstacles by which profit hinders accumulation (Hodgskin and some anonymous authors of pamphlets), the arguments start from very similar logical schemes. The necessary starting point is held to be ‘first principles’, the very first of which states that ‘all wealth is the produce of labour’. On the basis of this principle (to which others are added, as in the case of Bray 1839), a scheme is erected which is supposed to represent the workings of a ‘natural society’. This is then contrasted with a representation of actual society. (The statistical foundation of this representation is often the ‘Map of Civil Society’ showing the distribution of income among ‘different Classes’ prepared by Colquhoun 1814). The divergences of the second scheme from the first are explained by the presence of ‘artificial’ components, not intrinsically necessary and thus susceptible of modification, resulting from man-made institutions or contingent historical events. The contrast between ‘nature’ and ‘artifice’ is used by these writers to criticise both society and the economists who ‘erected the results of their individual experience into general laws. Because a thing was, they thought it could not be otherwise’ (Ravenstone 1824, p. 6; see also Anon. 1821, pp. 7–8). Thus we have here not a ‘positive’ idea of Natural Right but, in the manner of Rousseau, a ‘normative’ one.

    The contrast between ‘nature’ and ‘artifice’ finds an application in the idea, shared by many Ricardian Socialists, that in capitalist society the appropriation of the produce of labour takes place through a violation of the ‘natural’ principle of exchange, according to which each party should give and receive equal quantities of labour. However, there is an important difference between Gray, for instance, and Hodgskin (and Bray). (This difference is much fainter in popular proto-socialist literature of the 1830s.) In Gray’s view, the violation emerges exclusively and directly from the comparison between a situation in which profit is absent and a capitalist situation. ‘We have endeavoured to show that the real income of the country’, Gray writes, ‘… is taken from its producers, chiefly by the rent of land, by the rent of houses, by the interest of money, and by the profit obtained by persons who buy their labour from them at one price and sell it at another’ (1825, p. 58, italics added). The conception of ‘profit upon alienation’, like that of the ‘adding up theory’, is, instead, lacking in Hodgskin. In the latter’s conception the violation of the ‘natural’ principle of exchange does not derive directly from the presence of profit; it emerges from the comparison between exchanges effected between capitalists, on the one hand, and between capitalist and labourer, on the other. The former exchanges, according to the labour theory of value, are in agreement with the ‘natural’ principle of exchange; in the case of the latter exchanges, the violation is shown, as we shall see, by the difference between labour commanded and labour embodied.

  3. 3.

    As is well known, the theory of Natural Right has historically performed the function of justifying the application to the realm of history of the same conceptual tools that physicists had used to study the realm of nature. Reference to ‘natural laws’ was aimed not only at applying moral criteria but also reflected a search for phenomena endowed with ‘universality and uniformity’. From the point of view of analysis, the theory of Natural Right, with all its limitations, fulfills the function of a ‘counterfactual’; in other words, it enables the observer to stand back from existing society, a position which is in any case necessary in order to analyse the working of that society in depth.

    In this connection, Hodgskin represents the most complex personality among the Ricardian Socialists. In his thought, the theory of Natural Right is grafted onto two very important cultural influences: on the one hand, that of the ‘Scottish Historical School’ (in his writings he quotes freely from Millar, Robertson and Lord Kames); on the other, that of Thomas Brown, an exponent of the Scottish philosophy of Common Sense (see in particular Hodgskin 1827b, 1832). In Hodgskin these influences lead to a peculiar combination of a ‘naturalistic optimism’ and a philosophy of history based on materialism. Indeed Hodgskin holds that, in the long term, the ‘material world’ governs the formation of ‘beliefs’ since experience eventually leads to the correction of mistaken ‘beliefs’. At the foundations of progress in knowledge and inventions, which, in turn, is the cause of a ‘perpetual’ productivity increase, lies a ‘natural’ phenomenon, the growth of population. ‘Necessity is the mother of invention; and the continual existence of necessity can only be explained by the continual increase of people’ (Hodgskin 1827a, p. 86; see also Hodgskin in Halévy 1903, p. 77; Ravenstone 1821, p. 177). Since the growth of population, as Smith had argued, also leads to an extension of the division of labour, it ends by governing the development of society, independently of men’s intentions and desires. The definition of ‘natural’ right of property accepted by Hodgskin comes from Locke. At one point in his Two Treatises (1690, Bk. II, ch. V, par. 27), Locke had stated that since each man owns his body, he also owns ‘the Labour of his body’ and ‘the Work of his Hands’. The infringement of this law as of every other ‘natural law’ by ‘artificial’ institutions not only violates justice but also, by indirectly slowing down the growth of population, hinders the general progress of society.

    As Halévy has noted (1903, p. 59), Hodgskin ascribes the same importance to population as does Malthus, but in a positive way. From the very outset he criticizes the Malthusian elements in the writings of Ricardo, expressing the hope that by getting rid of them one will be able to return to Adam Smith. As we shall see, the disagreement with Ricardo was not over his theory of value. As regards the theory of distribution, he argued that the current level of wages and the existence of an ‘absolute’ component in rent have an historical origin, to be sought in the ‘power over labour’ which landowners all over Europe have inherited from the previous state of slavery; he concluded that distribution depends ‘entirely and exclusively on political regulations’ (Hodgskin in Halévy 1903, p. 78). Starting from a critique of the relevance of ‘decreasing soil fertility’, he proposes a different analysis of the relation between the growth of production (and population) and technical conditions in the production of necessaries. He studies firstly the effects of this relation on distribution, then its effects on development with a given distribution. The basic analytical tool used in this theoretical extension is no less than the Ricardian theory of value.

  4. 4.

    In Hodgskin’s most widely read work, Labour Defended (1825), he re-expounds the Ricardian theory of wages, profits and differential rents, stating that the theory ‘of that ingenious and profound writer’ confirms that ‘the exactions of the capitalist cause the poverty of the labourer’ (Hodgskin 1825, pp. 80–81). Yet in an important letter of May 1820 (first printed by Halévy in 1903), in setting out his opinions on value and distribution, Hodgskin had attacked Ricardo with criticisms of a fiercer and more explicit nature than can be found anywhere else in his work. Since in his subsequent writings his opinions remained substantially unaltered (except to give less attention to the problem of rent), a correct interpretation of that letter is crucial for defining Hodgskin’s position. In 1820 he held that Ricardo, unlike Smith, had not made a clear distinction between ‘natural’ and ‘artificial’ circumstances. This had led him to mistake the latter for the former and to make incorrect forecasts. Consistent with his general conceptions, the main target of Hodgskin’s critique is Ricardo’s conclusion that, as population grows, profits tend to fall and development becomes stationary. Thus, on the basis of assumed ‘natural laws’, Ricardo is accused of having ‘set bounds to our hopes for the future progress of mankind in a more definite manner’ even than Malthus (Halévy 1903, p. 67).

    Hodgskin’s most notable contribution (mentioned below) makes it idle to argue whether he should be labelled as ‘Smithian’ as opposed to ‘Ricardian’: he must be viewed as Ricardian reinterpreter of Smith and thus, more simply, as a ‘classical political economist’. The contribution referred to is contained in his discussion of the difference of opinion between Smith and Ricardo on the subject of value. He holds that it lies not in the regulator principle of exchange – since both of them see value as determined by labour embodied – but in the different standards adopted for measuring prices. In asserting this Hodgskin clearly dissociates himself from Ricardo’s interpretation of Smith, and thus also from the so-called ‘adding up’ theory.

    According to Ricardo (1821, p. 13), Smith had confined the validity of the labour theory of value strictly to the ‘early and rude state of society which precedes both the accumulation of stock and the appropriation of land’. But the entry of profit onto the scene necessitated that the theory be abandoned. In this situation, the natural price would be obtained as the sum of the ‘component parts’, at their respective natural rates, taken independently of one another. A corollary of this ‘adding up’ theory was that an increase in profit would determine a rise in prices without any corresponding fall in wages. Ricardo rejected this conclusion and asserted, on the basis of the labour theory of value, that relative prices were independent of variations in distribution: every increase in profits was offset by a fall in wages. Smith, in abandoning (according to Ricardo), the labour theory of value in favour of the ‘adding up’ theory, had simultaneously taken wages as the unit for measuring prices. This suggested to Ricardo the existence of a correspondence between the ‘regulator principle of exchange’ and the unit for measuring prices. (He may also have been led into this mistake by the experience with his own theory in the course of his search for an invariable measure of value: see Sraffa 1951, p. xli, note 1.) Thus he charged Smith with contradicting the rule of exchange according to the labour embodied because he had adopted the labour commanded as the unit for the measurement of prices.

    Actually Hodgskin rejects this since he reinterprets Smith’s text on the basis of the inverse relation of wages to the rate of profit which Ricardo had derived from the labour theory of value. As the rate of profit increases – says Hodgskin (Halévy 1903, p. 74) – price rises in terms of wage units, and therefore the labourer must perform a larger quantity of labour in order to purchase the same quantity of goods as before, because wages have fallen. To this fall in wages (rise in profit) he thus traces the divergence between labour embodied and labour commanded which Smith detected when the rate of profit is positive and accounted for, unlike Hodgskin, with the ‘adding up’ theory. (According to this theory, in any case, reductions in wages should lead to reductions in prices.) Hodgskin contrasts exchange between owners of the means of production, on the one hand, and, on the other, between commodities produced under capitalistic condition and labour. He accepts the hypothesis of uniformity in the ratio of profits (and rents) to wages in the price of each commodity (the hypothesis is set out explicitly in Hodgskin 1827, p. 186, and implied in all his writings); this explains why in Hodgskin’s view incomes other than wages ‘do not enter’ into the relative prices of commodities, whereas they do enter into the ratio of prices to wages, and indeed ‘constitute the greatest part of it’.

    In 1846, reviewing Ricardo’s works, Hodgskin (1846, p. 1557), was to admit that Smith had made ‘a verbal variation from his own principle’ of ‘labour paying all price’, whereas Ricardo had maintained ‘a technical adherence to it’. But he justified Smith as having tried to offer through the exchange of commodity and labour ‘a truer representation of what actually occurs in society than Mr. Ricardo’s’. (Hodgskin holds that Ricardo has focused his attention on a relatively minor problem, that of ‘exchangeable variations in the value of commodities’, instead of dealing, as Smith had tried to, with the ‘important relations of the labourer to other classes’.) The result Hodgskin achieved by basing himself on the labour theory of value retains its validity – as Sraffa has demonstrated (1960, ch. VI) – within the framework of a rigorous theory of the prices of production. From his ‘equations of reduction to dated quantities of labour’ it can immediately be seen that when the rate of profit is zero, embodied labour and labour commanded coincide. When the rate of profit increases (i.e. when wages fall in terms of the price of products) the quantity of ‘labour commanded’ by each commodity increases and is greater than the quantity of ‘labour embodied’. Since we are dealing with a ‘pricerelation between labour and the given product’, Sraffa has remarked (1960, p. 40), this is independent of the ‘medium’ adopted as a measure of wages and prices.

  5. 5.

    Hodgskin holds that the measurement of prices in terms of labour commanded is important, among other things to show up the mistake in Ricardo’s thesis on the ‘natural’ tendency of profits to fall as the growth of population requires the cultivation of less and less fertile land. He states that the direct and indirect application of ‘machinery and ingenuity’ to agricultural production has in actual fact reduced the quantity of labour embodied in each unit of production (defined as ‘natural price’). What, on the contrary, has steadily grown, in the long run, is labour commanded. (Price measured in wage units is defined as ‘exchange value’ in Labour Defended, and as ‘social price’ in Popular Political Economy.) Ricardo has been deceived by the missing distinction between the two ‘prices’ into underestimating the long-term trend of technical progress, induced by the growth of population, to ‘compensate for decreasing fertility’. This technical progress has led to an increase in the ratio between surplus and wages, and thus to an increase in labour commanded. In addition, Ricardo has drawn general conclusions on technology on the basis of the increase in the price of corn occurring in ‘a short and single period’ (after 1792). But this period, Hodgskin asserts, has been strongly affected by a series of exceptional circumstances and/or ‘political regulations’ (see Hodgskin 1827a, pp. 226–31 and Hodgskin 1848, p. 1228).

    Though Hodgskin’s disagreement with Ricardo on this point is important in several respects, it does not concern the theoretical structure of the theory of value and distribution. Rather, it offers an instance of the flexibility injected into the analytic structure of the surplus theories by the separate determination of production, on the one hand, and distribution, on the other (see Garegnani 1984, pp. 296–7). This separation enables various hypotheses about the shape of the relationship between levels of production and returns to be considered. In 1846, Hodgskin was to evince astonishment at Ricardo’s disregard of the ‘laws of production’ especially in a period of rapid advance in output; in this disregard he found one of the reasons for the decline of the Ricardian theories. On the other hand, in a famous letter to Malthus of 9 October 1820, Ricardo had written: ‘no law can be laid down respecting quantity, but a tolerably correct one can be laid down respecting proportions’ (Ricardo 1887, p. 278) – which may perhaps help to explain the meaning he attached to his acceptance of Say’s principle.

  6. 6.

    In Popular Political Economy, Hodgskin states that the difference between ‘natural price’ and ‘social price’ is important not only ‘to understand the natural laws which regulate the progress of nations’, but also ‘rightly to estimate the causes which retard it’ (1827a, p. 220). He denies that redistribution in favour of profits and the very presence of profit itself promote development. First of all, that which enriches the individual capitalist, he writes, does not necessarily add to national wealth: not all the capital which brings profit to its owner ‘assist production’. Moreover, the presence of profit requires a part of the product of labour be withdrawn from reproduction and handed over to ‘unproductive idlers’. The capitalist neglects those investments that do not promise him sufficient profit, yet these same would provide labourers with a comfortable subsistence. Hodgskin does not deny that profits have a periodic tendency to shrink. In Labour Defended (1825, pp. 78–80) his explanation explicitly contradicts those of Smith and Ricardo. The fall in profits is ascribed to the need to balance, periodically, two contrasting forces. On the one hand, the need to obtain a rate of profit not less than the monetary rate of interest prompts capitalists to a continual reinvestment of profits, thus causing a continuous growth, at compound rate, of the bulk of profits (for a given labour force). The appropriation by capitalists of the fruits of technical progress may lead to an increase in the rate of profit which contributes to this growth. On the other hand, reinvestment is not concerned with ‘gold or money, but food, clothing and instruments’, and labour productivity can-increase continuously so as to satisfy ‘the overwhelming demands of compound interest’: there is thus a limit to the growth of profits. Hodgskin’s thesis may be set alongside Marx’s idea that the degree of exploitation of labour has unsurmountable limits bound up with the length of the working day. This idea led Marx to conclude that an increase in the rate of surplus-value could not in the long term determine a counter-tendency to the fall of the rate of profit. Hence Marx’s simplifying hypothesis of the constancy of rate of surplus-value, so that his law of the tendency of the rate of profit to fall ultimately depends solely on the increase in the organic composition of capital (see Marx 1910, pp. 298–311 and Marx 1894, pp. 211–66).

  7. 7.

    A recurring theme in the writings of the Ricardian Socialists is the polemic against the thesis, originating with Lauderdale and Say – and partly accepted in revised versions by disciple of Ricardo – which casts capital in the role of an ‘active agent’ of production. According to these theories, capital is capable of increasing productivity and/or saving labour independently of the application of labour. Labour Defended (along with Ravenstone’s book, 1821) appears to offer the most coherent and effective arguments, at the time, against such conceptions of ‘economic fetishism’. In this work, circulating capital is traced back to ‘coexisting labour’, while fixed capital is identified with the knowledge and the skilled labour needed to construct and employ the instruments of production. Ultimately, capital for Hodgskin (and here we catch an echo of Smith) is ‘a means of obtaining command over labour’ (Hodgskin 1825, p. 55). The arguments Hodgskin uses to demonstrate that capital enjoys no independent productivity are, however, mostly confined to the aspect of use-value. There are, moreover, two features which explain Hodgskin’s tendency, noted by Marx, to ‘underestimate somewhat the value which the labour of the past has for the labour of the present’ (Marx 1910, p. 276). On the one hand, the want of a clear distinction (this in common with other classical economists) between ‘concrete labour’ and labour as ‘value magnitude’ which, on the basis of the accepted theory of value, determines the exchange value. This also explains Hodgskin’s reluctance to admit the influence of soil fertility on production, to the extent that he considers it ‘a contradiction of Mr. Ricardo’s own principle’ that ‘labour pays all cost’ (Hodgskin 1848, p. 1228). On the other hand, Hodgskin was attached to Smith’s idea (restated by James Mill) that ‘what is annually produced is annually consumed’ (Hodgskin 1825, p. 47). However, Marx’s main objection to the Ricardian Socialists, reiterated against Lassalle in the Critique of the Gotha Programme, turns on the fact that by proposing a society governed by individual exchanges between independent producers, their critique of capitalism stopped short of discussing the market as a coordinating mechanism in the social division of labour. Some hints of criticism of competition do nevertheless occur in the writings of the Owenite current of Ricardian Socialists and, in particular, in the works of Thompson (1824 and 1827) and Gray (1825).

See Also