The Great Money Trick

What is the one book you think every MP should read? The question was recently posted on Twitter by curator and historian of science Rebekah Higgitt who blogs as Teleskopos. There are lots of different books I would recommend to different people for different reasons but for a grounding in politics and economics I didn’t have to think too hard before responding with The Ragged Trousered Philanthopists by Robert Tressell (and I was not the only one).

There is much to be debated about Tressell’s depiction of an acquiescent working class but his explanation of “The Great Money trick” deserves to be included in any canon of a Literacy of the Present.

The main theme of the book is how the poor give so much to the rich (hence the title). The Great Money Trick is how the principal character, Frank Owen, explains the basics of capitalist economics to his fellow workers.

Money is the cause of poverty” says Owen, “because it is the device by which those who are too lazy to work are enabled to rob the workers of the fruits of their labour.”

To prove the point he uses slices of bread, pocket knives and halfpennies.

The slices of bread: “….represent the raw materials which exist naturally in and on the earth for the use of mankind; they were not made by any human being, but were created by the Great Spirit for the benefit and sustenance of all, the same as were the air and the light of the sun.”

The knives represent “…..all the machinery of production; the factories, tools, railways, and so forth, without which the necessaries of life cannot be produced in abundance.”

The halfpennies represent the Money Capital of the capitalist.

The great Money Trick goes like this…

Owen takes all the bread and explains:

 “I am a capitalist; or, rather, I represent the landlord and capitalist class. That is to say, all these raw materials belong to me. It does not matter for our present argument how I obtained possession of them, or whether I have any real right to them; the only thing that matters now is the admitted fact that all the raw materials which are necessary for the production of the necessaries of life are now the property of the Landlord and Capitalist class. I am that class: all these raw materials belong to me.”

He then asks three of the workers to represent the Working Class…..

“… you have nothing – and for my part, although I have all these raw materials, they are of no use to me – what I need is – the things that can be made out of these raw materials by Work: but as I am too lazy to work myself, I have invented the Money Trick to make you work for me….”

Owen cuts the bread into a number of little square blocks.

‘These represent the things which are produced by labour, aided by machinery, from the raw materials. We will suppose that three of these blocks represent – a week’s work. We will suppose that a week’s work is worth – one pound: and we will suppose that each of these ha’pennies is a sovereign. …

“Now this is the way the trick works …..

‘You say that you are all in need of employment, and as I am the kind-hearted capitalist class I am going to invest all my money in various industries, so as to give you Plenty of Work. I shall pay each of you one pound per week, and a week’s work is – you must each produce three of these square blocks. For doing this work you will each receive your wages; the money will be your own, to do as you like with, and the things you produce will of course be mine, to do as I like with. You will each take one of these machines and as soon as you have done a week’s work, you shall have your money.”

The Working Classes accordingly set to work, and the Capitalist class sat down and watched them. As soon as they had finished, they passed the nine little blocks to Owen, who placed them on a piece of paper by his side and paid the workers their wages.

‘These blocks represent the necessaries of life. You can’t live without some of these things, but as they belong to me, you will have to buy them from me: my price for these blocks is – one pound each.’

As the working classes were in need of the necessaries of life and as they could not eat, drink or wear the useless money, they were compelled to agree to the kind Capitalist’s terms. They each bought back and at once consumed one-third of the produce of their labour. The capitalist class also devoured two of the square blocks, and so the net result of the week’s work was that the kind capitalist had consumed two pounds worth of the things produced by the labour of the others, and reckoning the squares at their market value of one pound each, he had more than doubled his capital, for he still possessed the three pounds in money and in addition four pounds worth of goods. As for the working classes, Philpot, Harlow and Easton, having each consumed the pound’s worth of necessaries they had bought with their wages, they were again in precisely the same condition as when they started work – they had nothing.

This process was repeated several times: for each week’s work the producers were paid their wages. They kept on working and spending all their earnings. The kind-hearted capitalist consumed twice as much as any one of them and his pile of wealth continually increased. In a little while – reckoning the little squares at their market value of one pound each – he was worth about one hundred pounds, and the working classes were still in the same condition as when they began, and were still tearing into their work as if their lives depended upon it.

Advertisements

One thought on “The Great Money Trick

  1. It’s called The Labour Theory of Value. See also The Tendency of the Falling Rate of Profit.
    Look them up. They are by our great Classical Economists of the previous three centuries. Adam Smith and Marx especially.
    Has anybody ever seen a male and a female £1 get together in a bank vault and produce a little 40 pence? Or is there a stupid bank manager in every bank who will give you £2.40 for every £2.00 you give him? Well, go figure it out.
    Also; if you and me, the only people on earth, are trading; I am selling a loaf of bread for £0.50 and you are selling a bottle of wine for £5.00, and we both have access to reserves of money; do we have in true value only the value of our two commodities – bread and wine – total £5.50, or do we also have their nominal price value of £11.00? You can also adds the total of our monetary reserves if you wish – it looks even more ridiculous doesn’t it?
    Ask your economics teacher or business studies tutor and watch them squirm for answers that they cannot provide.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s