Comments by Laurance Labadie on Interview Between Kerry Thornley and Harry Pollard on “Dialogue”
It may be somewhat gratuitous to comment on what Mr. Kerry Thornley has said on what he considers to be his understanding of economics in only a half hour show, but he has said enough I think plus his explicit endorsement of Ludwig von Mises and Murray Rothbard to give evidence of the fact that his mind is hazy on the subject of value to say the least. In his treatment of value Marx assumed it to be an explicit quality of economic goods measured by what he called the socially necessary amount of labor required to produce them or embodied in them. With this conception product may be said to sell above or below its value—which is ridiculous. There must be an exchange before value can be ascertained. Moreover, values may rise or fall for various reasons.
Marx’s view, Mr. Thornley calls an objective theory of value, which he denies on the ground that value is a subjective estimate. I would be inclined to agree with Mr. Thornley insofar as criticism of Marx is concerned, yet his statement is only a half-truth. Value of anything is what you can get for it in exchange. Before this exchange can be consummated there must exist a complex estimate indulged in by both parties, about each of the articles being exchanged. There must be at least two subjective estimates made, and there must be an agreement before an exchange will be made, after which their respective values may be ascertained, that is, before value can exist in fact. The point is that value is a social concept, not merely an individual evaluation.
Moreover, the more producers and sellers and buyers come into play, competition between buyers and sellers tend to formulate a more generally determined agreement as to what the exchange power of any economic good may be. This exchange power is usually expressed in some agreed-upon value unit. As we consider this it should become quite obvious that neither Thornley nor Marx have offered any adequate explanation of the process of value formation.
We may agree with Mr. Thornley that value is a psychological estimate, which depends on the feelings or desires of individual humans. What Mr. Thornley fails to note is that anyone’s estimate depends upon circumstances. A man who is thirsty might not give anything for a drink of water if he stood on the bank of a stream, the water of which was free for all. If, on the other hand, one man claimed ownership of the stream and if the state stood ready to enforce his claims, and if judging the predicament of a prospective buyer, he demanded one day’s work from the thirsty man for a drink of water, he may be able to get it. Since a drink of water means life or death to a thirsty man, the conditions under which he makes his evaluation have an exceedingly important bearing on how he values a glass of water. And yet, according to Thornley, since both men are using subjective judgment in their respective evaluation, such an exchange would, to him, presumably be a fair one since both men agreed to it.
If this would be in accordance with what Mr. Thornley believes is laissez-faire it is rather surprising since Mr. Thornley considers himself an ‘anarchist’ and free trader. The fallacy into which Mr. Thornley has fallen arises of the fact that he has completely overlooked the basic circumstances in which production and exchange were and are carried on. The fundamental inequity arose out of making property (or privileged exclusion) out of something no man made, namely natural resources or land; not even mentioning the secondary and sometimes more important privilege which denies to producers the opportunity to issue their own money or credit instruments. It is as if some men were hobbled in a race while Mr. Thornley would say all men in the race are free to run. According to the Thornley, Rothbard, Mises criteria any exchange is equitable if the terms have been presumably agreed upon by both parties. In saying that no one was forced to exchange while failing to investigate or analyze the circumstances which caused both parties to make their so-called subjective estimates necessary to consummate an exchange they have evaded the very problem in question, which is a handy and safe way of not coming to grips with the economic injustices of the Establishment.
When roughly 80% of the world’s resources are now owned by 1 or 2% of the populations of the earth, and producers are being mulcted by monopolized financial institutions there is no freedom of finance. Do any of these worthies say anything about that? And doesn’t this evasion designate them as downright frauds as far as being exponents of freedom is concerned?
Commentary – Eric Fleischmann
I cannot for the life of me find the original recording of the “half hour show” featuring Georgist political economist Harry Pollard and Discordianism co-founder Kerry Wendell Thornley (aka Omar Khayyam Ravenhurst and Lord Omar), in which Thornley endorses the Austrian subjective theory of value. However, Labadie’s commentary on the event—titled “Comments by Laurance Labadie on Interview Between Kerry Thornley and Harry Pollard on ‘Dialogue'”—can be found in the 1967 Vol. 23, No. 3 and 4 edition of the School of Living’s publication A Way Out. Thornley’s endorsement is unsurprising considering Discordianism’s fundamentally anti-authoritarian, countercultural nature (making it ripe for libertarianism and anarchism) as well as its emphasis on the subjective nature of the world at the level of concept. One of their main three principles holds that…
[i]t is only the ideas-about-reality which differ. Real (capital-T) True reality is a level deeper than is the level of concept. We look at the world through windows on which have been drawn grids (concepts). Different philosophies use different grids. A culture is a group of people with rather similar grids. Through a window we view chaos, and relate it to the points on our grid, and thereby understand it. The order is in the grid.
I don’t disagree with this principle at all—having admitted in an interview for The Enragés that an essential element of my “marxian and materialist influences” is that I see historical [or, more accurately, dialectical] materialism as a framework for understanding a chaotic and largely incomprehensible universe. However, the Discordian approach would seem to take things undialectically too far in the direction of idealism if it leads Thornley to completely forgo an analysis of economic context in favor of a purely subjective theory of value.
However, Labadie does not take a Marxist perspective in criticizing Thornley’s take on value. Labadie is a strong critic of Marxism as well as their labor theory of value (LTV) and instead argues from a particularly mutualist stance. According to him, “granting free competition, that is, free and equal access to the means of production, to the raw materials, and to an unrestricted market, the price of all articles will always tend to be measured by the effort necessary for their production. In other words, labor as a factor in measuring value will become predominant.” And I have pointed out that this in many ways anticipates the contemporary interpretation of the LTV by Kevin Carson, who holds that “[i]n an economy of distributive property ownership, as would have existed had the free market been allowed to develop without large-scale robbery, time-preference would affect only laborers’ calculations of their own present consumption versus their own future consumption. All consumption, present or future, would be beyond question the result of labor.” Carson takes into account the subjective elements of value—like Labadie—and argues that, as Center for a Stateless Society explains, the Austrian School’s “insights of marginalism should be integrated as an additional component of classical political economy (LTV) and not as a standalone doctrine.”
To speak specifically of this piece, Labadie holds that an integral part of “free competition, that is, free and equal access to the means of production, to the raw materials, and to an unrestricted market” that leads to the LTV is “freedom of finance.” Though he writes elsewhere that “[m]utual banking or any particular ‘scheme’ of circulating credit which I or anyone else proposes may not be an essential of anarchism, but freedom in banking is,” he follows thinkers like Benjamin Tucker and William B. Greene in specifically endorsing mutual banking. Carson defines this strategy as such: “any group of individuals could form a mutual bank and issue monetized credit in the form of bank notes against any form of collateral they chose, with acceptance of these notes as tender being a condition of membership.” Another part of “free competition” outlined in this piece is, as defined above, “free and equal access to the means of production . . . [and] to the raw materials.” This is a fairly standard left-libertarian position because, as outlined by Bas van der Vossen in the Stanford Encyclopedia of Philosophy, “[s]ince natural resources are not created or produced as such, left-libertarians claim that the value of these resources belongs in some sense to everyone[.] This common ownership of the world supports some egalitarian constraints on appropriation and use.” Of particular interest among contemporary left-libertarians is how such a position by the historical Labadie —alongside conceptions of collective labor-mixing & occupancy and use and the work of Elinor Ostrom—informs today’s thinking around a free-market commons; as can be found in Center for a Stateless Society’s anthology The Anatomy of Escape: A Defense of the Commons.