Cincinnati Time Store
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The Cincinnati Time Store was a successful retail store that was created by American individualist anarchist Josiah Warren to test his theories that were based on his strict interpretation of the labor theory of value. The experimental store operated from May 18, 1827 until May 1830. It is considered to be the first use of notes for labor and as such, the first experiment in what would later be called mutualism.
Warren embraced the labor theory of value, which says that the value of a commodity is the amount of labor that goes into producing or acquiring it. From this he concluded that it was therefore unethical to charge more labor for a product than the labor required to produce it. Warren summed up this policy in the phrase "Cost the limit of price," with "cost" referring the amount of labor one exerted in producing a good. Believing the labor is the foundational cost of things, he held that equal amounts of labor should, naturally, receive equal material compensation. He set out to examine if his theories could be put to practice by establishing his "labor for labor store." If his experiment proved to be successful, his plan was to establish various colonies whose participants all agreed to use "cost the limit of price" in all economic transactions, hoping that all of society would eventually adopt the tenet in all economic affairs.
In the store, customers could purchase goods with "labor notes" which represented an agreement to perform labor. The items in the store were initially marked up 7% to account for the labor required to bring them to market with the price increasing the longer the time that a customer spent with the shopkeeper, as measured by a timer dial; later this markup was reduced to 4%. Corn was used as a standard, with 12 pounds of corn being exchangeable with one hour of labor. The result of the system was that no one was able to profit from the labor of another — every individual ostensibly received the "full produce" of his labor. Adjustments were made for the difficulty and disagreeableness of the work performed, so that time was not the only factor taken into consideration. Warren also set up boards on the wall where individuals could post what kind of services they were seeking or had to sell so that others could respond, and trade among each other using labor notes.
After a rough initial period, the store proved to be very successful. Warren's goods were much cheaper than competitors', though he maintained that he was not trying to put other stores out of business. Another store in the neighborhood converted to Warren's methods. The fact that prices for goods rose the more time a customer spent with Warren resulted in very efficient transactions. Warren said that he was doing more business in one hour than normal businesses do in one day, leading him to close shop part of the day to rest. Though the store was successful, the problem of equal labor times for different difficulties of work was a concern for Warren. He was never able to reconcile the objectivity of his "labor for labor" prescription with the subjectivity employed in determining how much time used for one type labor entailed the same amount of work exerted during a different amount of time performing another type of labor. He settled to simply credit it with being a matter of individual judgment. Warren closed the store in May 1830 in order to depart to set up colonies based upon the labor-cost principle (the most successful of these being "Utopia"), convinced that the store was a successful experiment in "Cost the limit of price."
- Mutualism (economic theory)
- Josiah Warren
- Cost the limit of price
- Labor theory of value
- Time-based currency
- Men Against the State by James J. Martin (1953)
- Equitable Commerce by Josiah Warren (1846)