KARL MARX
THE
POVERTY
OF
PHILOSOPHY
FOREIGN LANGUAGES PRESS
First Edition 1966
PEKING
Second Edition 1974
Third Edition 1977
(195x258).GIF)
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KARL MARXTHE
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The present English edition of Karl Marx's Poverty of Philosophy, Answer to the "Philosophy of Poverty" by M. Proudhon,[1] follows the French edition of 1847, while the revisions in the German editions of 1885 and 1892 and in the French edition of 1896 have been taken into account. The translations of this work, of the two prefaces by Frederick Engels and of the four appendices are based on previous versions. Some changes have been made for closer conformity with the original French or German texts.
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PREFACE TO THE FIRST GERMAN EDITION |
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PREFACE TO THE SECOND GERMAN EDlTlON |
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KARL MARX: THE POVERTY OF PHILOSOPHY | |
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23 | |
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Chapter I. A SCIENTIFIC DISCOVERY |
25 |
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§1. The Opposition Between Use Value and Exchange Value |
25 |
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§2. Constituted Value or Synthetic Value |
38 |
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§3. Application of the Law of the Proportionality of Value |
72 |
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72 | |
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Chapter II. THE METAPHYSICS OF POLITICAL ECONOMY |
96 |
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§1. The Method |
96 |
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First Observation |
97 |
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§2. Division of Labour and Machinery |
122 |
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§3. Competition and Monopoly |
139 |
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§4. Property or Rent |
148 |
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§5. Strikes and Combinations of Workers |
161 |
APPENDICES | |
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MARX: TO P. V. ANNENKOV |
173 |
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MARX: SPEECH ON THE QUESTION OF FREE TRADE |
189 |
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MARX: A CONTRIBUTION TO THE CRITIQUE OF POLITICAL |
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MARX: ON PROUDHON (TO J. B. SCHWEITZER) |
215 |
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page 1
The present work was written in the winter of 1846-47, at a time when Marx had cleared up for himself the basic features of his new historical and economic outlook. Proudhon's Système des contradictions economiques, ou Philosophie de la misère, which had just appeared, gave him the opportunity to develop these basic features in opposing them to the views of a man who, from then on, was to occupy the chief place among living French socialists. From the time when the two of them in Paris often spent whole nights in discussing economic questions, their paths had diverged more and more; Proudhon's book proved that there was already an unbridgeable gulf between them. To ignore it was no longer possible, and so Marx by this answer of his put on record the irreparable rupture.
Marx's general opinion of Proudhon is to be found in the article,[2] given as an appendix to this preface, which appeared in the Berlin Sozialdemokrat, Nos. 16, 17 and 18, in 1865. It was the only article that Marx wrote for that paper; Herr von Schweitzer's attempts, which soon afterwards became evident, to guide it along feudal and government lines com-
page 2
pelled us to announce publicly the end of our collaboration after only a few weeks.
At this precise moment the present work has a significance for Germany which Marx himself never foresaw. How could he have known that, in trouncing Proudhon, he was hitting Rodbertus, the idol of the place hunters of today, whose very name was then unknown to him?
This is not the place to deal with the relation of Marx to Rodbertus; an opportunity for that is sure to occur to me very soon.[3] Here it is sufficient to note that when Rodbertus accuses Marx of having "plundered" him and of having "freely used in his Capital without quoting him" his work Zur Erkenntnis, etc., he permits himself a slander which can only be explained by the spleen of a misunderstood genius and by his remarkable ignorance of things taking place outside Prussia, and especially of socialist and economic literature. Neither these charges, nor the above-mentioned work of Rodbertus ever came to Marx's sight; all he knew of Rodbertus was the three Soziale Briefe [Social Letters ] and even these certainly not before 1858 or I859.
There is more basis for Rodbertus' assertion in these letters that he had already discovered "Proudhon's constituted value" before Proudhon; but here again it is true he erroneously flatters himself with being the first discoverer. In any case, he is for this reason covered by the criticism in the present work, and this compels me to deal briefly with his "fundamental" small work: Zur Erkenntnis unsrer staatswirtschaftlichen Zustànde [Contribution to the Knowledge of Our National Economic Conditions ], 1842, insofar as this brings forward anticipations of Proudhon as well as the communism of Weitling also (and again unconsciously) contained in it.
page 3
Insofar as modern socialism, no matter of what tendency, starts out from bourgeois political economy, it almost exclusively links itself to the Ricardian theory of value. The two propositions which Ricardo proclaimed in 1817 right at the beginning of his Principles,[4] 1) that the value of any commodity is purely and solely determined by the quantity of labour required for its production, and 2) that the product of the entire social labour is divided among the three classes: landowners (rent), capitalists (profit) and workers (wages), had ever since I821 been utilized in England for socialist conclusions, and in part with such sharpness and decisiveness that this literature, which has now almost disappeared, and which to a large extent was first rediscovered by Marx, remained unsurpassed until the appearance of Capital. I will deal with this another time. If, therefore, in I842, Rodbertus for his part drew socialist conclusions from the above propositions, that was certainly a very considerable step forward for a German at that time, but it was only for Germany that it could rank as a new discovery. That such an application of the Ricardian theory was far from new was proved by Marx against Proudhon who suffered from a similar conceit.
"Anyone who is in any way familiar with the trend of political economy in England cannot fail to know that almost all the socialists in that country have, at different periods, proposed the equalitarian (that is, socialist)* application of the Ricardian theory. We could quote for M. Proudhon: Hodgskin, Political Economy, 1827; William Thompson, An Inquiry into the Principles of the Distribution of Wealth Most Conducive to Human Happiness, I824; T. R. Edmonds, Prac-
page 4
tical Moral and Political Economy, 1828, etc., etc., and four pages more of etc. We shall content ourselves with listening to an English communist, Mr. Bray . . . in his remarkable work, Labour's Wrongs and Labour's Remedy, Leeds, 1839. . . ."[5] And the quotations given here from Bray alone put an end to a good part of the claim to priority made by Rodbertus.
At that time Marx had never yet been in the reading room of the British Museum. Apart from the libraries of Paris and Brussels, besides my books and extracts seen during a six weeks' journey in England we made together in the summer of 1845, he had only examined such books as were obtainable in Manchester. The literature in question was, therefore, by no means as inaccessible in the forties as it may be now. If, all the same, it always remained unknown to Rodbertus, that is to be ascribed solely to his Prussian local narrowness. He is the real founder of specifically Prussian socialism and is now at last recognized as such.
However, even in his beloved Prussia, Rodbertus was not to remain undisturbed. In 1859, Marx's Contribution to the Critique of Political Economy, Part I, was published in Berlin. Therein, among the objections of the economists against Ricardo, was put forward as the second objection, p. 40:
"If the exchange value of a product is equal to the labour time which it contains, the exchange value of a labour day is equal to its product. Or the wage must be equal to the product of labour. But the contrary is the case." On this there was the following note:
"This objection brought forward against Ricardo by bourgeois economists was later taken up by the socialists. The theoretical correctness of the formula being presupposed, practice was blamed for contradiction with theory and bour-
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geois society was invited to draw in practice the supposed conclusions from its theoretical principle. In this way at least, English Socialists turned the Ricardian formula of exchange value against political economy." In the same note there was a reference to Marx's Poverty of Philosophy, which was then obtainable in all the bookshops.
Rodbertus, therefore, had sufficient opportunity of convincing himself whether his discoveries of 1842 were really new. Instead, he proclaims them again and again and regards them, as so incomparable that it never comes into his head that Marx might have been able independently to draw his conclusions from Ricardo, just as well as Rodbertus himself. That was absolutely impossible! Marx had "plundered" him -- him, whom the same Marx had offered every facility for convincing himself how long before both of them these conclusions, at least in the crude form which they still have in the case of Rodbertus, had been enunciated in England!
The simplest socialist application of the Ricardian theory is indeed that given above. It has led in many cases to insights into the origin and nature of surplus value which go far beyond Ricardo, as in the case of Rodbertus among others. Apart from the fact that in this respect he nowhere presents anything which had not already been said before at least as well, his presentation suffers like those of his predecessors from the fact that he adopts, uncritically and without the least examination, the economic categories of labour, capital, value, etc., in the crude form, which clung to their external appearances, and in which they were handed down to him by the economists. He thereby not only cuts himself off from all further development -- in contrast to Marx, who was the first to make something of these propositions so often repeated
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for the last sixty-four years -- but, as will be shown, he opens for himself the road leading straight to utopia.
The above application of the Ricardian theory, that the entire social product belongs to the workers as their product because they are the sole real producers, leads directly to communism. But, as Marx indicates too in the above-quoted passage, formally it is economically incorrect, for it is simply an application of morality to economics. According to the laws of bourgeois economics, the greatest part of the product does not belong to the workers who have produced it. If we now say: that is unjust, that ought not to be so, then that has nothing immediately to do with economics. We are merely saving that this economic fact is in contradiction to our sense of morality. Marx, therefore, never based his communist demands upon this, but upon the inevitable collapse of the capitalist mode of production which is daily taking place be fore our eyes to an ever greater degree; he says only that surplus value consists of unpaid labour, which is a simple fact. But what formally may be economically incorrect, may all the same be correct from the point of view of world history. If the moral consciousness of the mass declares an economic fact to be unjust, as it has done in the case of slavery or serf labour, that is a proof that the fact itself has been outlived, that other economic facts have made their appearance, owing to which the former has become unbearable and untenable. Therefore, a very true economic content may be concealed behind the formal economic incorrectness. This is not the place to deal more closely with the significance and history of the theory of surplus value.
At the same time other conclusions can be drawn, and have been drawn, from the Ricardian theory of value. The value of commodities is determined by the labour required for their
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production. It is found, however, that in this wicked world commodities are sold sometimes above, sometimes below their value, and indeed not only as a result of variations in competition. The rate of profit has just as much the tendency to become equalized at the same level for all capitalists as the price of commodities has to become reduced to the labour value by the agency of supply and demand. But the rate of profit is calculated on the total capital invested in an industrial enterprise. Since now the annual product in two different branches of industry may embody equal quantities-of labour, and, consequently, may represent equal values, and also wages may be equally high in both, while yet the capital invested in one branch may, and often is, twice or three times as great as in the other, consequently the Ricardian law of value, as Ricardo himself discovered, comes here into contradiction with the law of the equal rate of profit. If the products of both branches of industry are sold at their values, the rates of profit cannot be equal; if, however, the rates of profit are equal, then the products of both branches of industry certainly cannot always be sold at their values. Thus, we have here a contradiction, an antinomy of two economic laws, the practical solution of which takes place according to Ricardo (Chapter I, Sections 4 and 5) as a rule in favour of the rate of profit at the cost of value.
But the Ricardian definition of value, in spite of its ominous characteristics, has a feature which makes it dear to the heart of the good bourgeois. It appeals with irresistible force to his sense of justice. Justice and equality of rights are the basic pillars on which the bourgeois of the eighteenth and nineteenth centuries would like to erect his social edifice over the ruins of feudal injustices, inequalities and privileges. And the determination of the value of commodities by labour and the free
page 8
exchange of the products of labour, taking place according to this measure of value between commodity owners with equal rights, these are, as Marx has already proved, the real bases on which the whole political, juridical and philosophical ideology of the modern bourgeoisie has been built. Once it is recognized that labour is the measure of value of a commodity, the better feelings of the good bourgeois cannot but be deeply wounded by the wickedness of a world which, while recognizing this basic law of justice in name, still in fact appears at every moment to set it aside without compunction. And the petty bourgeois especially, whose honest labour -- even if it is only that of his journeymen and apprentices -- is daily more and more depreciated in value by the competition of large-scale production and machinery, this petty producer especially must long for a society in which the exchange of products according to their labour value is at last a complete and invariable truth. In other words, he is bound to long for a society in which a single law of commodity production prevails exclusively and in full, but where the conditions are abolished in which it can prevail at all, viz., the other laws of commodity production and, later, of capitalist production.
How deeply this utopia has struck roots in the mode of thought of the modern petty bourgeois -- real or ideal -- is proved by the fact that it was already systematically developed by John Gray in I831, that it was tried in practice and theoretically widely preached in England in the thirties, that it was proclaimed as the latest truth by Rodbertus in Germany in 1842 and by Proudhon in France in 1846, that it was again proclaimed by Rodbertus even in 1871 as the solution of the social question and as, so to say, his social testament, and that in 1884 again it finds adherents among the horde of place
page 9
hunters who in the name of Rodbertus set themselves to exploit Prussian state socialism.
The criticism of this utopia has been so exhaustively furnished by Marx both against Proudhon and against Gray (see the appendix to this work[6]) that I can limit myself here to a few remarks on the form of proving and depicting it peculiar to Rodbertus.
As already said, Rodbertus adopts the traditional definitions of economic concepts entirely in the form in which they have come to him from the economists. He does not make the slightest attempt to investigate them. Value is for him
"the valuation of one thing against others according to quantity, this valuation being conceived as measure."[7]
This, to put it mildly, extremely slovenly definition gives us at best an approximate idea of what value looks like, but says absolutely nothing of what it is. Since this, however, is all that Rodbertus is able to tell us about value, it is understandable that he looks for a measure of value lying outside value. After thirty pages in which he mixes up use value and exchange value in higgledy-piggledy fashion with that power of abstract thought so infinitely admired by Herr Adolf Wagner, he arrives at the result that there is no real measure of value and that one has to make shift with a substitute measure. Labour can serve as such, but only if products of an equal quantity of labour are always exchanged against products of an equal quantity of labour, whether this "is already the case of itself, or whether measures are adopted" to ensure that it is. Consequently, value and labour remain without any sort of actual relation to each other, in spite of the fact that the whole first chapter is taken up to expound to us that commodities "cost labour" and nothing but labour, and why this is so.
page 10
Labour, again, is taken without examination in the form in which it occurs among the economists. And not even that. For, although there is a reference in a couple of words to differences in intensity of labour, labour is still put forward quite generally as something which "costs," hence as some thing which measures value, quite irrespective of whether it is expended under normal average social conditions or not. Whether the producers use ten days, or only one, for the preparation of products which could be prepared in one day; whether they employ the best or the worst tools; whether they expend their labour time in the production of socially necessary articles and in the socially required quantity, or whether they make quite undesired articles or desired articles in quantities above or below the demand -- about all this, there is not a word: labour is labour, the product of equal labour must be exchanged against the product of equal labour. Rodbertus, who is otherwise always ready, whether rightly or not, to adopt the national standpoint and to survey the relations of individual producers from the high watchtower of general social considerations, carefully avoids doing so here. And this, indeed, solely because from the very first line of his book he makes directly for the utopia of labour money and because any investigation of labour in its property of producing value would be bound to put insuperable obstacles in his way. His instinct was here considerably stronger than his power of abstract thought, which, by the by, is revealed in Rodbertus by the most concrete absence of ideas.
The transition to utopia is now made in a hand's turn. The "measures," which ensure exchange of commodities according to labour value as the invariable rule, do not cause any difficulty. The other utopians of this tendency, from Gray to Proudhon, rack their brains to invent social institutions which
page 11
would achieve this aim. They attempt at least to solve the economic question in an economic way through the action of the possessors themselves who own the commodities to be exchanged. For Rodbertus it is much easier. As a good Prussian he appeals to the state: a decree of the state power orders the reform.
In this way then, value is happily "constituted," but not by any means the priority in this constitution which is claimed by Rodbertus. On the contrary, Gray as well as Bray -- among many others -- before Rodbertus, often at length and to the point of satiety, repeated this idea, viz., the pious desire for measures by means of which products would always and under all circumstances be exchanged only at their labour value.
After the state has thus constituted value -- at least for a part of the products, for Rodbertus is also modest -- it issues its labour paper money, and gives advances therefrom to the industrial capitalists, with which the latter pay the wages of the workers, whereupon the workers buy the products with the labour paper money they have received, and so cause the paper money to flow back to its starting point. How very beautifully this proceeds, one must hear from Rodbertus himself:
"In regard to the second condition, the necessary measure that the value certified in the note should be actually present in circulation is realized in that only the person who actually delivers a product receives a note, on which is accurately recorded the quantity of labour by which the product was produced. He who delivers a product of two days' labour receives a note marked 'two days.' By the strict observance of this rule in the issue of notes, the second condition too would necessarily be fulfilled. For as in accordance with our presupposition the real value of the goods always coincides with the quantity of labour which their production has cost and this quantity of labour is measurable by the usual division of time, then, everyone who hands in a product on which two
page 12
days' labour has been expended and receives a certificate for two days has by this certification or allocation received neither more nor less value than that which he has in fact supplied. Further, since only the person who has actually put a product into circulation receives such a certificate, it is equally certain that the value marked on the note is available for the satisfaction of society. However extensive we imagine the circle of division of labour to be, if this rule is strictly followed the sum total of available value must be exactly equal to the sum total of certified value. Since, however, the total of certified value is exactly equal to the total of value assigned, the latter must necessarily coincide with the available value, all claims will be satisfied and the liquidation correctly brought about." (Pp. 166-67.)
If Rodbertus has hitherto always had the misfortune of arriving too late with his new discoveries, this time at least he has the merit of one sort of originality: none of his rivals has dared to express the stupidity of the labour money utopia in this childishly naive, transparent, I might say truly Pomeranian, form. Since for every paper certificate a corresponding object of value has been delivered, and no object of value is given out except against a corresponding paper certificate, the sum total of paper certificates must always be covered by the sum total of objects of value. The calculation works out without any remainder, it agrees down to a second of labour time, and no Regierungs-Hauptkassen-Rentamtskalkulator,* however grey in the service, could prove the slightest error in the reckoning. What more could one want?
In present-day capitalist society each industrial capitalist produces on his own account what, how and as much as he likes. The social demand, however, remains an unknown magnitude to him, both in regard to quality, the kind of objects required, and in regard to quantity. That which today cannot
page 13
be supplied quickly enough, may tomorrow be offered far in excess of the demand. Nevertheless, demand is finally satisfied in one way or another, well or badly, and, taken as a whole, production is finally directed towards the objects required. How is this reconciliation of the contradiction effected? By competition. And how does competition bring about this solution? Simply by depreciating below their labour value those commodities which in kind or amount are useless for immediate social requirements, and by making the producers feel, through this roundabout means, that they have produced either absolutely useless articles or useful articles in unusable, superfluous quantity. From this, two things follow.
First, the continual deviation of the prices of commodities from their values is the necessary condition in and through which alone the value of the commodities can come into existence. Only through the fluctuations of competition, and consequently of commodity prices, does the law of value of commodity production assert itself and the determination of the value of the commodity by the socially necessary labour time become a reality. That thereby the form of manifestation of value, the price, as a rule has a different aspect from the value which it manifests, is a fate which value shares with most social relations. The king usually looks quite different from the monarchy which he represents. To desire, in a society of producers who exchange their commodities, to establish the determination of value by labour time, by forbidding competition to establish this determination of value through pressure on prices in the only way in which it can be established, is therefore merely to prove that, at least in this sphere, one has adopted the usual utopian disdain of economic laws.
Secondly, competition, by bringing into operation the law of value of commodity production in a society of producers
page 14
who exchange their commodities, precisely thereby brings about the only organization and arrangement of social production which is possible in the circumstances. Only through the undervaluation or overvaluation of products is it forcibly brought home to the individual commodity producers what things and what quantity of them society requires or does not require. But it is just this sole regulator that the utopia in which Rodbertus also shares would abolish. And if we then ask what guarantee we have that necessary quantity and not more of each product will be produced, that we shall not go hungry in regard to corn and meat while we are choked in beet sugar and drowned in potato spirit, that we shall not lack trousers to cover our nakedness while trouser buttons flood us in millions -- Rodbertus triumphantly shows us his famous calculation, according to which the correct certificate has been handed out for every superfluous pound of sugar, for every unsold barrel of spirit, for every unusable trouser button, a calculation which "works out" exactly, and according to which "all claims will be satisfied and the liquidation correctly brought about." And anyone who does not believe this can apply to the governmental chief revenue office accountant, X, in Pomerania, who has supervised the calculation and found it correct and who, as one who has never yet been found guilty of a mistake in his cash account, is thoroughly trustworthy.
And now consider the naiveté with which Rodbertus would abolish industrial and trade crises by means of his utopia. As soon as the production of commodities has assumed world market dimensions, the equalization between the individual producers who produce for private account and the market for which they produce, which in respect of quantity and quality of demand is more or less unknown to them, is established by means of a storm in the world market, by a trade
page 15
crisis.[*] If now competition is to be forbidden to make the individual producers aware, by the rise or fall of prices, how the world market stands, then their eyes are completely blinded. To institute the production of commodities in such a fashion that the producers cannot any more learn anything about the state of the market for which they are producing -- that indeed is a cure for the disease of crisis which could make Dr. Eisenbart envious of Rodbertus.
Now we can see why Rodbertus determines the value of commodities simply by "labour" and at most admits of different degrees of intensity of labour. If he had investigated by what means and how labour creates value and therefore also determines and measures it, he would have arrived at socially necessary labour, necessary for the single product, both in relation to other products of the same kind and also in relation to society's total demand. He would thereby be confronted with the question of how the adjustment of the production of separate commodity producers to the total social demand takes place, and his whole utopia would thereby have been made impossible. This time he preferred in fact to "make an abstraction," namely, of just that which mattered.
Now at last we come to the point where Rodbertus really offers us something new; something which distinguishes him from all his numerous fellow supporters of labour money exchange economy. They all demand this exchange organiza-
page 16
tion with the aim of abolishing the exploitation of wage labour by capital. Every producer is to receive the full labour value of his product. In this they all agree, from Gray to Proudhon. Not at all, says Rodbertus. Wage labour and its exploitation remain.
In the first place, in no conceivable state of society can the worker receive for consumption the entire value of his product. A series of economically unproductive but necessary functions always have to be met from the fund produced, and consequently also the persons connected with them maintained. This is only correct so long as the present-day division of labour holds. In a society in which general productive labour is obligatory, which is, however, also "conceivable," this falls to the ground. But the necessity for a fund for social reserve and accumulation would remain and consequently even in that case, while the workers, i.e., all of them, would remain in possession and enjoyment of their total product, each separate worker would not enjoy the "full product of his labour." Nor has the maintenance of economically unproductive functions at the expense of the labour product been overlooked by the other labour money utopians. But they leave the workers to tax themselves for this purpose in the usual democratic way, while Rodbertus, whose whole social reform of I842 is adapted to the Prussian state of that time, refers the whole matter to the decision of the bureaucracy, which determines from above the share of the worker in his own product and graciously permits him to have it.
In the second place, ground rent and profit are also to continue undiminished. For the landowners and industrial capitalists also exercise certain socially useful or even necessary functions, even if economically unproductive ones, and they receive in the shape of ground rent and profit a sort of pay on
page 17
that account -- a conception which was admittedly not new even in 1842. Actually they get at present far too much for the little that they do, and do badly enough, but Rodbertus has need, at least for the next five hundred years, of a privileged class, and so the present rate of surplus value, to express myself correctly, is to remain in existence but is not to be allowed to be increased. This present rate of surplus value Rodbertus takes to be two hundred per cent, that is to say, for twelve hours of labour daily the worker is to receive a certificate not for twelve hours but for only four, and the value produced in the remaining eight hours is to be divided between landowner and capitalist. The labour certificates of Rodbertus, therefore, directly lie. Again, one must be a Pomeranian Junker in order to imagine that a working class would put up with working twelve hours in order to receive a certificate of four hours of labour. If the hocus-pocus of capitalist production is translated into this naive language, in which it appears as naked robbery, it is made impossible. Every certificate given to a worker would be a direct instigation to rebellion and would come under §110 of the German Imperial Penal Code.[8] One must never have seen any other proletariat than the day-labourer proletariat, still actually in semi-serfdom, of a Pomeranian Junker's estate, where the rod and the whip reign supreme, and where all the good-looking women of the village belong to his lordship's harem, in order to imagine one can offer such an insult to the workers. But our conservatives are just our greatest revolutionaries.
If, however, our workers are sufficiently docile to suffer the imposition that they have in reality only worked four hours after twelve whole hours of hard labour, they are, as a reward, to be guaranteed that for all eternity their share in their own product will never fall below a third. That is indeed music of
page 18
the future played on a child's trumpet and not worth wasting a word over. Insofar, therefore, as there is anything novel in the labour money exchange utopia of Rodbertus, this novelty is simply childish and far below the achievements of his numerous comrades both before and after him.
For the time when Rodbertus' Zur Erkenntnis, etc., appeared, it was certainly an important book. His development of Ricardo's theory of value in one direction was a very promising beginning. Even if it was only for him and for Germany that it was new, still as a whole, it stands on an equal level with the achievements of the better of his English predecessors. But it was only a beginning, from which a real gain for theory could be achieved only by further thorough and critical work. But he cut himself off from further development in this direction by also developing Ricardo's theory from the very beginning in the second direction, in the direction of utopia. Thereby he lost the first condition of all criticism -- freedom from bias. He worked on towards a goal fixed in advance, he became a Tendenzökonom.[*] Once caught in the toils of his utopia, he cut himself off from all possibility of scientific advance. From I842 up to his death, he went round in a circle, always repeating the same ideas which he had already expressed or indicated in his first work, feeling himself unappreciated, finding himself plundered, where there was nothing to plunder, and at last refusing, not without deliberate intention, to recognize that at bottom he had only rediscovered what had already been discovered long before.
In a few places the translation departs from the printed French original. This is based on alterations in Marx's own
page 19
handwriting, which will also be inserted in the new French edition now being prepared.
It is hardly necessary to point out that the terminology used in this work does not quite coincide with that in Capital. Thus this work still speaks of labour as a commodity, of the purchase and sale of labour, instead of labour power.
In this edition there is also added as a supplement:
1) a passage from Marx's work Zur Kritik der politischen Ökonomie [A Contribution to the Critique of Political Economy ], Berlin, I859, dealing with the first labour money exchange utopia of John Gray, and 2) a translation of Marx's speech on free trade in Brussels (I848), which belongs to the same period of development of the author as the Poverty.
Frederick Engels
London, October 23, I884
page 20
For the second edition I have only to remark that the name wrongly written Hopkins in the French text (on page 45[9]) has been replaced by the correct name Hodgskin and that in the same place the date of the work of William Thompson has been corrected to 1824. It is to be hoped that this will appease the bibliographical conscience of Professor Anton Menger.[10]
Frederick Engels
London, March 29,1892
page 21
* Here Engels emphasized the word "equalitarian" and inserted the words in parentheses. --Ed.
* Accountant of a government chief revenue office. A fancy title used by Engels in a satirical sense. --Ed.
* At Ieast, this was the case until recently. Since England's monopoly of the world market is being more and more shattered by the participation of France, Germany and, above all, of America in world trade, a new form of equalization appears to be operating. The period of general prosperity preceding the crisis still fails to appear. If it should fail altogether, then chronic stagnation would necessarily become the normal condition of modern industry, with only insignificant fluctuations. [Note by F. Engels.]
* An economist pursuing a definite tendency. --Ed.
THE POVERTY OF PHILOSOPHY
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Written in the first half of 1847 |
Original in French |
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M. Proudhon has the misfortune of being peculiarly misunderstood in Europe. In France, he has the right to be a bad economist, because he is reputed to be a good German philosopher. In Germany, he has the right to be a bad philosopher, because he is reputed to be one of the ablest of French economists. Being both a German and an economist at the same time, we desire to protest against this double error.
The reader will understand that in this thankless task we have often had to abandon our criticism of M. Proudhon in order to criticize German philosophy, and at the same time to give some observations on political economy.
Karl Marx
Brussels, June 15, 1847
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M. Proudhon's work is not just a treatise on political economy, an ordinary book; it is a bible. "Mysteries," "Secrets Wrested from the Bosom of God," "Revelations" -- it lacks nothing. But as prophets are discussed nowadays more conscientiously than profane writers, the reader must resign himself to going with us through the arid and gloomy erudition of "Genesis," in order to ascend later, with M. Proudhon, into the ethereal and fertile realm of super-socialism. (See Proudhon, Philosophy of Poverty, Prologue, p. III, line 20.)
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"The capacity of all products, whether natural or industrial, to contribute to man's subsistence is specifically termed use value ; their capacity to be given in exchange for one another, exchange value. . . . How does use value become exchange value? . . . The genesis of the idea of" (exchange) "value has not been noted by economists with sufficient care. It is necessary, therefore, for us to dwell upon it. Since a very large number of the things I need occur in nature only in moderate quantities, or even not at all, I am forced to assist in the production of what I lack. And as I cannot set my hand to so many things, I shall propose to other men, my collaborators in various functions, to cede to me a part of their products in exchange for mine." (Proudhon, Vol. I. Chap. II.)
M. Proudhon undertakes to explain to us first of all the double nature of value, the "distinction in value," the process by which use value is transformed into exchange value. It is necessary for us to dwell with M. Proudhon upon this act of transubstantiation. The following is how this act is accomplished, according to our author.
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A very large number of prodllcts are not to be found in nature, they are products of industry. If man's needs outstrip nature's spontaneous production, he is forced to resort to industrial production. What is this industry in M. Proudhon's view? What is its origin? A single individual, feeling the need for a very great number of things, "cannot set his hand to so many things." So many needs to satisfy presuppose so many things to produce -- there are no products without production. So many things to produce presuppose at once more than one man's hand helping to produce them. Now, as soon as you postulate more than one hand helping in production, you have already presupposed a whole system of production based on the division of labour. So, need, as M. Proudhon presupposes it, itself presupposes the whole division of labour. In presupposing the division of labour, you get exchange, and, consequently, exchange value. One might as well have presupposed exchange value from the very beginning.
But M. Proudhon prefers to go the roundabout way. Let us follow him in all his detours, which always bring us back to his starting point.
In order to emerge from the state of affairs in which every one produces in isolation and to arrive at exchange, "I turn to my collaborators in various functions," says M. Proudhon. I myself, then, have collaborators, all with different functions. And yet, for all that, I and all the others, always according to M. Proudhon's supposition, have got no farther than the solitary and hardly social position of the Robinsons. The collaborators and the various functions, the division of labour and the exchange it implies, are already to hand.
To sum up: I have certain needs which are founded on the division of labour and on exchange. In presupposing these
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needs, M. Proudhon has thus presupposed exchange, exchange value, the very thing of which he purposes to "note the genesis with more care than other economists."
M. Proudhon might just as well have inverted the order of things, without in any way affecting the accuracy of his conclusions. To explain exchange value, we must have exchange. To explain exchange, we must have the division of labour. To explain the division of labour, we must have needs which render necessary the division of labour. To explain these needs, we must "presuppose " them, which is not to deny them -- contrary to the first axiom in M. Proudhon's prologue: "To presuppose God is to deny Him." (Prologue, p. I.)
How does M. Proudhon, who assumes the division of labour as the known, manage to explain exchange value, which for him is always the unknown?
"A man" sets out to "propose to other men, his collaborators in various functions," that they establish exchange, and make a distinction between use value and exchange value. In accepting this proposed distinction, the collaborators have left M. Proudhon no other "care" than that of recording the fact, of marking, of "noting" in his treatise on political economy "the genesis of the idea of value." But he has still to explain to us the "genesis" of this proposal, to tell us at last how this single individual, this Robinson, suddenly had the idea of making "to his collaborators" a proposal of the type known and how these collaborators accepted it without the slightest protest.
M. Proudhon does not enter into these genealogical details. He merely places a sort of historical stamp upon the fact of exchange, by presenting it in the form of a motion supposed to have been made by a third party, tending to establish exchange.
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That is a sample of the "historical and descriptive method " of M. Proudhon, who professes a superb disdain for the "historical and descriptive methods" of the Adam Smiths and Ricardos.
Exchange has a history of its own. It has passed through different phases. There was a time, as in the Middle Ages, when only the superfluous, the excess of production over consumption, was exchanged.
There was again a time, when not only the superfluous, but all products, all industrial existence, had passed into commerce, when the whole of production depended on exchange. How are we to explain this second phase of exchange -- marketable value at its second power?
M. Proudhon would have a reply ready-made: Assume that a man has "proposed to other men, his collaborators in various functions," to raise marketable value to its second power.
Finally, there came a time when everything that men had considered as inalienable became an object of exchange, of traffic and could be alienated. This is the time when the very things which till then had been communicated, but never exchanged; given, but never sold; acquired, but never bought -- virtue, love, conviction, knowledge, conscience, etc. -- when everything finally passed into commerce. It is the time of general corruption, of universal venality, or, to speak in terms of political economy, the time when everything, moral or physical, having become a marketable value, is brought to the market to be assessed at its truest value.
How, again, can we explain this new and last phase of exchange -- marketable value at its third power?
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M. Proudhon would have a reply ready-made: Assume that a person has "proposed to other persons, his collaborators in various functions," to make a marketable value out of virtue, love, etc., to raise exchange value to its third and last power.
We see that M. Proudhon's "historical and descriptive method" is applicable to everything, it answers everything, explains everything. If it is a question above all of explaining historically "the genesis of an economic idea," he postulates a man who proposes to other men, his collaborators in various functions, that they perform this act of genesis and that is the end of it.
We shall hereafter accept the "genesis" of exchange value as an accomplished act; it now remains only to expound the relation between exchange value and use value. Let us hear what M. Proudhon has to say:
"Economists have very well brought out the double character of value, but what they have not pointed out with the same precision is its contradictory nature ; this is where our criticism begins. . . . It is a small thing to have drawn attention to this surprising contrast between use value and exchange value, in which economists have been wont to see only something very simple: we must show that this alleged simplicity conceals a profound mystery into which it is our duty to penetrate. . . . In technical terms, use value and exchange value stand in inverse ratio to each other."
If we have thoroughly grasped M. Proudhon's thought the following are the four points which he sets out to establish:
1. Use value and exchange value form a "surprising contrast," they are in opposition to each other.
2. Use value and exchange value are in inverse ratio, in contradiction, to each other.
3. Economists have neither observed nor recognized either the opposition or the contradiction.
4. M. Proudhon's criticism begins at the end.
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We, too, shall begin at the end, and, in order to clear the economists from M. Proudhon's accusations, we shall let two sufficiently well-known economists speak for themselves.
Lauderdale : "In proportion as the riches of individuals are increased by an augmentation of the exchange value, the national wealth" (use value) "is generally diminished; and in proportion as the mass of individual riches is diminished, by the diminution of the exchange value, its opulence is generally increased." (Recherches sur la nature et l'origine de la richesse puhlique, translated by Lagentie de Lavalsse, Paris, 1808.[12])
Sismondi founded on the opposition between use value and exchange value his principal doctrine, according to which diminution in revenue is proportional to the increase in production.
Lauderdale founded his system on the inverse ratio of the two kinds of value, and his doctrine was indeed so popular in Ricardo 's time that the latter could speak of it as of some thing generally known.
"It is through confounding the ideas of exchange value and riches" (use value) "that it has been asserted, that by diminishing the quantity of commodities, that is to say, of the necessaries, conveniences, and enjoyments of human life, riches may be increased." (Ricardo, Des Principes de l'économie politique, translated by F. S. Constancio and annotated by J. B. Say, Paris, 1835, Vol. II, Chapter "Sur la valeur et les richesses."[13])
We have just seen that the economists before M. Proudhon had "drawn attention" to the profound mystery of opposition and contradiction. Let us now see how M. Proudhon in his turn explains this mystery after the economists.
The exchange value of a product falls as the supply increases, the demand remaining the same; in other words, the more
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abundant a product is relatively to the demand, the lower is its exchange value, or price. Vice versa : The weaker the supply relatively to the demand, the higher rises the exchange value or the price of the product supplied; in other words, the greater the scarcity in the products supplied, relatively to the demand, the higher the prices. The exchange value of a product depends upon its abundance or its scarcity, but always in relation to the demand. Take a product that is more than scarce, unique of its kind if you will: this unique product will be more than abundant, it will be superfluous, if there is no demand for it. On the other hand, take a product multiplied into millions, it will always be scarce if it does not satisfy the demand, that is, if there is too great a demand for it.
These are what we should almost call truisms, yet we have had to repeat them here in order to render M. Proudhon's mysteries comprehensible.
"So that, following up the principle to its ultimate consequences, one would come to the conclusion, the most logical in the world, that the things whose use is indispensable and whose quantity is unlimited should be had for nothing, and those whose utility is nil and whose scarcity is extreme should be of incalculable price. To cap the difficulty, these extremes are impossible in practice: on the one hand, no human product could ever be unlimited in magnitude; on the other, even the scarcest things must perforce be useful to a certain degree, otherwise they would be quite valueless. Use value and exchange value are thus inexorably bound up with each other, although by their nature they continually tend to be mutually exclusive." (Volume 1, p. 39.)
What caps M. Proudhon's difficulty? That he has simply forgotten about demand, and that a thing can be scarce or abundant only insofar as it is in demand. The moment he leaves out demand, he identifies exchange value with scarcity and use value with abundance. In reality, in saying that things "whose utility is nil and scarcity extreme are of incalculable
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price," he is simply declaring that exchange value is merely scarcity. "Scarcity extreme and utility nil" means pure scarcity. "Incalculable price' is the maximum of exchange value, it is pure exchange value. He equates these two terms. Therefore exchange value and scarcity are equivalent terms. In arriving at these alleged "extreme consequences," M. Proudhon has in fact carried to the extreme, not the things, but the terms which express them, and, in so doing, he shows proficiency in rhetoric rather than in logic. He merely rediscovers his first hypotheses in all their nakedness when he thinks he has discovered new consequences. Thanks to the same procedure he succeeds in identifying use value with pure abundance.
After having equated exchange value and scarcity, use value and abundance, M. Proudhon is quite astonished not to find use value in scarcity and exchange value, nor exchange value in abundance and use value; and seeing that these extremes are impossible in practice, he can do nothing but believe in mystery. Incalculable price exists for him, because buyers do not exist, and he will never find any buyers, so long as he leaves out demand.
On the other hand, M. Proudhon's abundance seems to be something spontaneous. He completely forgets that there are people who produce it, and that it is to their interest never to lose sight of demand. Otherwise, how could M. Proudhon have said that things which are very useful must have a very low price, or even cost nothing? On the contrary, he should have concluded that abundance, the production of very useful things, should be restricted if their price, their exchange value, is to be raised.
The old vine-growers of France in petitioning for a law to forbid the planting of new vines, the Dutch in burning Asiatic
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spices, in uprooting clove trees in the Moluccas, were simply trying to reduce abundance in order to raise exchange value. During the whole of the Middle Ages this same principle was acted upon, in limiting by laws the number of journeymen a single master could employ and the number of implements he could use. (See Anderson, History of Commerce.[14])
After having represented abundance as use value and scarcity as exchange value -- nothing indeed is easier than to prove that abundance and scarcity are in inverse ratio -- M. Proudhon identifies use value with supply and exchange value with demand. To make the antithesis even more clear-cut, he substitutes a new term, putting "estimation value " for exchange value. The battle has now shifted its ground, and we have on one side utility (use value, supply), on the other, estimation (exchange value, demand).
Who is to reconcile these two contradictory forces? What is to be done to bring them into harmony with each other? Is it possible to find in them even a single point of comparison?
Certainly, cries M. Proudhon, there is one -- free will. The price resulting from this battle between supply and demand, between utility and estimation will not be the expression of eternal justice.
M. Proudhon goes on to develop this antithesis.
"In my capacity as a free buyer, I am judge of my needs, judge of the suitability of an object, judge of the price I am willing to pay for it. On the other hand, in your capacity as a free producer, you are master of the means of execution, and in consequence, you have the power to reduce your expenses." (Volume I, p. 41.)
And as demand, or exchange value, is identical with estimation, M. Proudhon is led to say:
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"It is proved that it is man's free will that gives rise to the opposition between use value and exchange value. How can this opposition be removed, so long as free will exists? And how can the latter be sacrificed without' sacrificing man?" (Volume I, p. 41.)
Thus there is no possible way out. There is a struggle between two as it were incommensurable powers, between utility and estimation, between the free buyer and the free producer.
Let us look at things a little more closely.
Supply does not represent exclusively utility, demand does not represent exclusively estimation. Does not the demander also supply a certain product or the token representing all products, viz., money; and as supplier, does he not represent, according to M. Proudhon, utility or use value?
Again, does not the supplier also demand a certain product or the token representing all products, viz., money? And does he not thus become the representative of estimation, of estimation value or of exchange value?
Demand is at the same time a supply, supply is at the same time a demand. Thus M. Proudhon's antithesis, in simply identifying supply and demand, the one with utility, the other with estirnation, is based only on a futile abstraction.
What M. Proudhon calls use value is called estimation value by other economists, and with just as much right. We shall quote only Storch (Cours d'économie politique, Paris, 1823, pp. 48 and 49[15])
According to him, needs are the things for which we feel the need; values are things to which we attribute value. Most things have value only because they satisfy needs engendered by estimation. The estimation of our needs may change; there fore the utility of things, which expresses only a relation of these things to our needs, may also change. Natural needs
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themselves are continually changing. Indeed, what could be more varied than the objects which form the staple food of different peoples.
The conflict does not take place between utility and estimation; it takes place between the marketable value demanded by the supplier and the marketable value supplied by the demander. The exchange value of the product is each time the resultant of these contradictory appreciations.
In final analysis, supply and demand bring together production and consumption, but production and consumption based on individual exchanges.
The product supplied is not useful in itself. It is the consumer who determines its utility. And even when its quality of being useful is admitted, it does not exclusively represent utility. In the course of production, it has been exchanged for all the costs of production, such as raw materials, wages of workers, etc., all of which are marketable values. The product, therefore, represents, in the eyes of the producer, a sum total of marketable values. What he supplies is not only a useful object, but also and above all a marketable value.
As to demand, it will only be effective on condition that it has means of exchange at its disposal. These means are themselves products, marketable values.
In supply and demand, then, we find, on the one hand, a product which has cost marketable values, and the need to sell; on the other, means which have cost marketable values, and the desire to buy.
M. Proudhon opposes the free buyer to the free producer. To the one and to the other he attributes purely metaphysical qualities. It is this that makes him say: "It is proved that it
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is man's free will that gives rise to the opposition between use value and exchange value."
The producer, the moment he produces in a society founded on the division of labour and on exchange (and that is M. Proudhon's hypothesis), is forced to sell. M. Proudhon makes the producer master of the means of production; but he will agree with us that his means of production do not depend on free will. Moreover, many of these means of production are products which he gets from the outside, and in modern production he is not even free to produce the amount he wants. The present degree of development of the productive forces compels him to produce on such or such a scale.
The consumer is no freer than the producer. His estimation depends on his means and his needs. Both of these are determined by his social position, which itself depends on the whole social organization. True, the worker who buys potatoes and the kept woman who buys lace both follow their respective estimations. But the difference in their estimations is explained by the difference in the positions which they occupy in society, and which themselves are the product of social organization.
Is the entire system of needs founded on estimation or on the whole organi~ation of production? Most often, needs arise directly from production or from a state of affairs based on production. World trade turns almost entirely round the needs, not of individual consumption, but of production. Thus, to choose another example, does not the need for notaries suppose a given civil law which is but the expression of a certain development of property, that is to say, of production?
It is not enough for M. Proudhon to have eliminated the elements just mentioned from the relation of supply and demand. He carries abstraction to the extreme limits when he fuses all producers into one single producer, all consumers into
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one single consumer, and sets up a struggle between these two chimerical personages. But in the real world, things happen otherwise. The competition among the suppliers and the competition among the demanders form a necessary part of the struggle between buyers and sellers, of which marketable value is the result.
After having eliminated the cost of production and competition, M. Proudhon can as he likes reduce the formula of supply and demand to an absurdity.
"Supply and demand," he says, "are merely two ceremonial forms that serve to bring use value and exchange value face to face, and to lead to their reconciliation. They are the two electric poles which, when connected, must produce the phenomenon of affinity called exchange." (Volume I, pp. 49 and 50.)
One might as well say that exchange is merely a "ceremonial form" for introducing the consumer to the object of consumption. One might as well say that all economic relations are "ceremonial forms" serving immediate consumption as go betweens. Supply and demand are neither more nor less relations of a given production than are individual exchanges.
What, then, does all M. Proudhon's dialectic consist in? In the substitution for use value and exchange value, for supply and demand, of abstract and contradictory notions like scarcity and abundance, utility and estimation, one producer and one consumer, both of them knights of free will.
And what was he aiming at?
At arranging for himself a means of introducing later on one of the clements he had set aside, the cost of production, as the synthesis of use value and exchange value. And it is thus that in his eyes the cost of production constitutes synthetic value or constituted value.
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"Value" (marketable value) "is the corner-stone of the economic structure." "Constituted " value is the corner-stone of the system of economic contradictions.
What then is this "constituted value " which is all M. Proudhon has discovered in political economy?
Once utility is admitted, labour is the source of value. The measure of labour is time. The relative value of products is determined by the labour time required for their production. Price is the monetary expression of the relative value of a product. Finally, the constituted value of a product is purely and simply the value which is constituted by the labour time incorporated in it.
Just as Adam Smith discovered the division of labour, so he, M. Proudhon, claims to have discovered "constituted value." This is not exactly "something unheard of," but then it must be admitted that there is nothing unheard of in any discovery of economic science. M. Proudhon, who appreciates to the full the importance of his own invention, seeks nevertheless to tone down the merit thereof "in order to reassure the reader as to his claims to originality, and to win over minds whose timidity renders them little favourable to new ideas." But in assessing the contribution made by each of his predecessors to the understanding of value, he is forced to confess openly that the largest portion, the lion's share, falls to himself.
"The synthetic idea of value had been vaguely perceived by Adam Smith. . . . But with Adam Smith this idea of value was entirely intuitive. Now, society does not change its habits merely on the strength of intuitions: its decisions are made only on the authority of facts. The antinomy
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had to be stated more palpably and more clearly: J. B. Say was its chief interpreter."
Here is a ready-made history of the discovery of synthetic value: Adam Smith -- vague intuition; J. B. Say -- antinomy; M. Proudhon -- constituting and "constituted" truth. And let there be no mistake about it: all the other economists, from Say to Proudhon, have merely been trudging along in the rut of antinomy.
"It is incredible that for the last forty years so many men of sense should have fumed and fretted at such a simple idea. But no, values are compared without there being any point of comparison between them and with no unit of measurement ; this, rather than embrace the revolutionary theory of equality, is what the economists of the nineteenth century are resolved to uphold against all comers. What will posterity say about it? " (Vol. I, p. 68.)
Posterity, so abruptly invoked, will begin by getting muddled over the chronology. It is bound to ask itself: are not Ricardo and his school economists of the nineteenth century? Ricardo's system, posing as a principle that "the relative value of commodities depends exclusively on the amount of labour required for their production," dates from 1817. Ricardo is the head of a whole school dominant in England since the Restoration.[16] The Ricardian doctrine sums up severely, remorselessly, the whole of the English bourgeoisie, which is itself the model of the modern bourgeoisie. "What will posterity say about it?" It will not say that M. Proudhon did not know Ricardo, for he talks about him, he talks at length about him, he keeps coming back to him, and concludes by calling his system "trash." If ever posterity does interfere, it will say perhaps that M. Proudhon, afraid of offending his readers' Anglophobia, preferred to make himself the responsible editor of Ricardo's ideas. In any case, it will think it very naive that M. Proudhon should
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give as a "revolutionary theory of the future" what Ricardo expounded scientifically as the theory of present-day society, of bourgeois society, and that he should thus take for the solution of the antinomy between utility and exchange value what Ricardo and his school presented long before him as the scientific formula of one single side of this antinomy, that of exchange value. But let us leave posterity aside once and for all, and confront M. Proudhon with his predecessor Ricardo. Here are some extracts from this author which summarize his doctrine on value:
"Utility then is not the measure of exchangeable value, although it is absolutely essential to it." (Vol. I, p. 3 of Principes de l'économie politique, etc., translated from the English by F. S. Constancio, Paris, 1835.)
Ricardo quotes Adam Smith, who, according to him, "so accurately defined the original source of exchangeable value" (Adam Smith, Wealth of Nations, Book I, Chap. 5[17]), and he adds:
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"That this" (i.e., labour time) "is really the foundation of the exchangeable value of all things, excepting those which cannot be increased by human industry, is a doctrine of the utmost importance in political economy; for from no source do so many errors, and so much difference of opinion in that science proceed, as from the vague ideas which are attached to the word value." (Vol. I, p. 8.) "If the quantity of labour realized in commodities regulate their exchangeable value, every increase of the quantity of labour must augment the value of that commodity on which it is exercised, as every diminution must lower it." (Vol. I, p. 8.)
Ricardo goes on to reproach Smith:
1. "With having himself erected another standard measure of value than labour, sometimes the value of corn, at other times the quantity of labour an object can command in the market," etc. (Vol. I, pp. 9 and 10.)
Ricardo endeavours to prove that the ownership of land, that is, rent, cannot change the relative value of commodities and that the accumulation of capital has only a passing and fluctuating effect on the relative values determined by the comparative quantity of labour expended on their production. In support of this thesis, he gives his famous theory of rent, analyses capital, and ultimately finds nothing in it but accumulated labour. Then he develops a whole theory of wages and profits, and proves that wages and profits rise and fall in inverse ratio to each other, without affecting the relative value of the product. He does not neglect the influence that the accumulation of capital and its different aspects (fixed capital and circulating capital), as also the rate of wages, can have on the proportional value of products. In fact, these are the chief problems with which Ricardo is concerned.
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"Economy in the use of labour never fails to reduce the relative value[*] of a commodity, whether the saving be in the labour necessary to the manufacture of the commodity itself, or in that necessary to the formation of the capital, by the aid of which it is produced." (Vol. I, p. 28.) "Consequently as long as a day's work continues to give one the same quantity of fish and the other the same quantity of game, the natural rate of the respective exchange prices will always be the same despite variations of wages and profit and despite all the effects of accumulation of capital." (Vol. I, p. 32.) "In making labour the foundation of the value of commodities and the comparative quantity of labour which is necessary to their production, the rule which determines the respective quantities of goods which shall be given in exchange for each other, we must not be supposed to deny the accidental and temporary deviations of the actual or market price of commodities from this, their primary and natural price." (Vol. I, p. 105, l. c.) "It is the cost of production which must ultimately regulate the price of commodities, and not, as has been often said, the proportion between supply and demand." (Vol. II, p. 253.)
Lord Lauderdale had developed the variations of exchange value according to the law of supply and demand, or of scarcity and abundance relatively to demand. In his opinion the value of a thing can increase when its quantity decreases or when the demand for it increases; it can decrease owing to an increase of its quantity or owing to the decrease in demand. Thus the value of a thing can change through eight different causes, namely, four causes that apply to the thing itself, and four causes
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that apply to money or to any other commodity which serves as a measure of its value. Here is Ricardo's refutation:
"Commodities which are monopolized, either by an individual, or by a company, vary according to the law which Lord Lauderdale has laid down: they fall in proportion as the sellers augment their quantity, and rise in proportion to the eagerness of the buyers to purchase them; their price has no necessary connexion with their natural value: but the prices of commodities, which are subject to competition, and whose quantity may be increased in any moderate degree, will ultimately depend, not on the state of demand and supply, but on the increased or diminished cost of their production." (Vol. II, p. 259.)
We shall leave it to the reader to make the comparison between this simple, clear, precise language of Ricardo's and M. Proudhon's rhetorical attempts to arrive at the determination of relative value by labour time.
Ricardo shows us the real movement of bourgeois production, which constitutes value. M. Proudhon, leaving this real movement out of account, "fumes and frets" in order to invent new processes and to achieve the reorganization of the world on a would-be new formula, which formula is no more than the theoretical expression of the real movement which exists and which is so well described by Ricardo. Ricardo takes present-day society as his starting point to demonstrate to us how it constitutes value -- M. Proudhon takes constituted value as his starting point to constitute a new social world with the aid of this value. For him, M. Proudhon, constituted value must complete a circle and become once more the constituting factor in a world already entirely constituted according to this mode of evaluation. The determination of value by labour time is, for Ricardo, the law of exchange value; for M. Proudhon, it is the synthesis of use value and exchange value. Ricardo's theory of values is the scientific interpretation of present-day economic life; M. Proudhon's theory of values is the utopian interpreta-
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tion of Ricardo's theory. Ricardo establishes the truth of his formula by deriving it from all economic relations, and by explaining in this way all phenomena, even those like rent, accumulation of capital and the relation of wages to profits, which at first sight seem to contradict it; it is precisely that which makes his doctrine a scientific system: M. Proudhon, who has rediscovered this formula of Ricardo's by means of quite arbitrary hypotheses, is forced thereafter to seek out isolated economic facts which he twists and falsifies to pass them off as examples, already existing applications, beginnings of realization of his regenerating idea. (See our § 3. Application of Constituted Value.[*])
Now let us pass on to the conclusions M. Proudhon draws from value constituted (by labour time).
-- A certain quantity of labour is equivalent to the product created by this same quantity of labour.
-- Each day's labour is worth as much as another day's labour; that is to say, if the quantities are equal, one man's labour is worth as much as another man's labour: there is no qualitative difference. With the same quantity of labour, one man's product can be given in exchange for another man's product. All men are wage workers getting equal pay for an equal labour time. Perfect equality rules the exchanges.
Are these conclusions the strict, natural consequences of value "constituted" or determined by labour time?
If the relative value of a commodity is determined by the quantity of labour required to produce it, it follows naturally that the relative value of labour, or wages, is likewise determined by the quantity of labour needed to produce the wages. Wages, that is, the relative value or the price of labour, are
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thus determined by the labour time needed to produce all that is necessary for the maintenance of the worker.
"Diminish the cost of production of hats, and their price will ultimately fall to their new natural price, although the demand should be doubled, trebled, or quadrupled. Diminish the cost of subsistence of men, by diminishing the natural price of the food and clothing by which life is sustained, and wages will ultimately fall, notwithstanding that the demand for labourers may very greatly increase." (Ricardo, Vol. II, p. 253.)
Doubtless, Ricardo's language is as cynical as can be. To put the cost of manufacture of hats and the cost of maintenance of men on the same plane is to turn men into hats. But do not make an outcry at the cynicism of it. The cynicism is in the facts and not in the words which express the facts. French writers like M. M. Droz, Blanqui, Rossi and others take an innocent satisfaction in proving their superiority over the English economists, by seeking to observe the etiquette of a "humanitarian" phraseology; if they reproach Ricardo and his school for their cynical language, it is because it annoys them to see economic relations exposed in all their crudity, to see the mysteries of the bourgeoisie unmasked.
To sum up: Labour, being itself a commodity, is measured as such by the labour time needed to produce the labour-commodity. And what is needed to produce this labour-commodity? Just enough labour time to produce the objcets indispensable to the constant maintenance of labour, that is, to keep the worker alive and in a condition to propagate his race. The natural price of labour is no other than the minimum wage.*
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If the current rate of wages rises above the natural price, it is precisely because the law of value posed as a principle by M. Proudhon happens to be counterbalanced by the consequences of the varying relations of supply and dernand. But the minimum wage is nonetheless the centre towards which the current rates of wages gravitate.
Thus relative value, measured by labour time, is inevitably the formula of the present enslavement of the worker, instead of being, as M. Proudhon would have it, the "revolutionary theory" of the emancipation of the proletariat.
Let us see now to what extent the application of labour time as a measure of value is incompatible with the existing class antagonism and the unequal distribution of the product between the immediate worker and the owner of accumulated labour.
Let us take a particular product, for example, linen. This product, as such, contains a definite quantity of labour. This quantity of labour will always be the same, whatever the reciprocal position of those who have collaborated to create this product.
Let us take another product: broadcloth, which has required the same quantity of labour as the linen.
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If there is an exchange of these two products, there is an exchange of equal quantities of labour. In exchanging these equal quantities of labour time, one does not change the reciprocal position of the producers, any more than one changes anything in the situation between the workers and the manufacturers. To say that this exchange of products measured by labour time results in an equality of payment for all the producers is to suppose that equality of participation in the product existed before the exchange. When the exchange of broadcloth for linen has been accomplished, the producers of broadcloth will share in the linen in a proportion equal to that in which they previously shared in the broadcloth.
M. Proudhon's illusion is brought about by his taking for a consequence what could be at most but a gratuitous supposition.
Let us go further.
Does labour time, as the measure of value, suppose at least that the days are equivalent, and that one man's day is worth as much as another's? No.
Let us suppose for a moment that a jeweller's day is equivalent to three days of a weaver; the fact remains that any change in the value of jewels relative to that of woven materials, unless it be the transitory result of the fluctuations of demand and supply, must have as its cause a reduction or an increase in the labour time expended in the production of one or the other. If three working days of different workers be related to one another in the ratio of 1 : 2 : 3, then every change in the relative value of their products will be a change in this same proportion of 1 : 2 : 3. Thus values can be measured by labour time, in spite of the inequality of value of different working days; but to apply such a measure we must have a comparative scale of the different working days: it is competition that sets up this scale.
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Is your hour's labour worth mine? That is a question which is decided by competition.
Competition, according to an American economist, determines how many days of simple labour are contained in one day's compound labour. Does not this reduction of days of compound labour to days of simple labour suppose that simple labour is itself taken as a measure of value? If the mere quantity of labour functions as a measure of value regardless of quality, it presupposes that simple labour has become the pivot of industry. It presupposes that labour has been equalized by the subordination of man to the machine or by the extreme division of labour; that men give way in face of labour; that the pendulum of the clock has become as accurate a measure of the relative activity of two workers as it is of the speed of two locomotives. Therefore, we should not say that one man's hour is worth another man's hour, but rather that one man during an hour is worth just as much as another man during an hour. Time is everything, man is nothing; he is, at the most, time's car case. Quality no longer matters. Quantity alone decides every thing; hour for hour, day for day; but this equalizing of labour is not by any means the work of M. Proudhon's eternal justice; it is purely and simply a fact of modern industry.
In the automatic workshop, one worker's labour is scarcely distinguishable in any way from another worker's labour: workers can only be distinguished one from another by the length of time they take for their work. Nevertheless, this quantitative difference becomes, from a certain point of view, qualitative, in that the time they take for their work depends partly on purely material causes, such as physical constitution, age and sex; partly on purely negative moral causes, such as patience, imperturbability, diligence. In short, if there is a difference of quality in the labour of different workers, it is at
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most a quality of the last kind, which is far from being a distinctive peculiarity. This is what the state of affairs in modern industry amounts to in the last analysis. It is upon this equality, already realized in automatic labour, that M. Proudhon wields his smoothing-plane of "equalization," which he means to establish universally in "time to come"!
All the "equalitarian" conclusions which M. Proudhon deduces from Ricardo's doctrine are based on a fundamental error. He confounds the value of commodities measured by the quantity of labour embodied in them with the value of commodities measured by "the value of labour." If these two ways of measuring the value of commodities merged into one, it could likewise be stated that the relative value of any commodity is measured by the quantity of labour embodied in it; or that it is measured by the quantity of labour it can buy; or again that it is measured by the quantity of labour which can acquire it. But this is far from being so. The value of labour can no more serve as a measure of value than the value of any other commodity. A few examples will suffice to explain still better what we have just stated.
If a muid* of corn cost two days' labour instead of one, it would have twice its original value: but it would not set in operation double the quantity of labour, because it would contain no more nutritive matter than before. Thus the value of the corn, measured by the quantity of labour used to produce it, would have doubled; but measured either by the quantity of labour it can buy or by the quantity of labour with which it can be bought, it would be far from having doubled. On the other hand, if the same labour produced twice as many clothes as before, their relative value would fall by half; but,
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nevertheless, this double quantity of clothing would not thereby be reduced to disposing over only half the quantity of labour, nor could the same labour command double the quantity of clothing; for half the clothes would still go on rendering the worker the same service as before.
Thus it is going against economic facts to determine the relative value of commodities by the value of labour. It is moving in a vicious circle, it is to determine relative value by a relative value which itself needs to be determined.
It is beyond doubt that M. Proudhon confuses the two measures, measure by the labour time needed for the production of a commodity and measure by the value of the labour. "Any man's labour," he says, "can buy the value it represents." Thus, according to him, a certain quantity of labour embodied in a product is equivalent to the worker's payment, that is, to the value of labour. It is the same reasoning that makes him confuse cost of production with wages.
"What are wages? They are the cost price of corn, etc., the integral price of all things." Let us go still further. "Wages are the proportionality of the elements which compose wealth." What are wages? They are the value of labour.
Adam Smith takes as the measure of value, now the labour time needed for the production of a commodity, now the value of labour. Ricardo exposes this error by showing clearly the disparity of these two ways of measuring. M. Proudhon out does Adam Smith in error by identifying the two things which the latter had merely put in juxtaposition.
It is in order to find the proper proportion in which workers should share in the products, or, in other words, to determine the relative value of labour, that M. Proudhon seeks a measure for the relative value of commodities. To find out the measure for the relative value of commodities he can think of nothing
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better than to give as the equivalent of a certain quantity of labour the sum total of the products it has created, which is as good as supposing that the whole of society consists merely of immediate workers who receive their own produce as wages. In the second place, he takes for granted the equivalence of the working days of different workers. In short, he seeks the measure of the relative value of commodities in order to arrive at equal payrnent for the workers, and he takes the equality of wages as an already established fact, in order to go off on the search for the relative value of commodities. What admirable dialectic!
"Say and the economists after him have observed that labour being itself subject to valuation, being a commodity like any other commodity, it is moving in a vicious circle to treat it as the principle and the determining cause of value. . . . In so doing, these economists, if they will allow me to say so, show a prodigious carelessness. Labour is said to have value not as a commodity itself, but in view of the values which it is supposed to contain potentially. The value of labour is a figurative expression, an anticipation of the cause for the effect. It is a fiction of the same stamp as the productivity of capital. Labour produces, capital has value. . . . By a sort of ellipsis one speaks of the value of labour. . . . Labour like liberty . . . is a thing vague and indeterminate by nature, but defined qualitatively by its object, that is to say, it becomes a reality by the product."
We have seen that M. Proudhon makes the value of labour the "determining cause" of the value of products to such an extent that for him wages, the official name for the "value of labour," form the integral price of all things. That is why Say's objection troubles him. In labour-commodity which is a grim reality, he sees nothing but a grammatical ellipsis. Thus the whole of existing society, founded on labour-commodity, is
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henceforth founded on a poetic license, a figurative expression. If society wants to "eliminate all the drawbacks" that assail it, well, let it eliminate all the ill-sounding terms, change the language; and to this end it has only to apply to the Academy for a new edition of its dictionary. After all that we have just seen, it is easy for us to understand why M. Proudhon, in a work on political economy, has to enter upon long dissertations on etymology and other parts of grammar. Thus he is still learnedly discussing the antiquated derivation of servus [a slavel from servare [to preserve]. These philological dissertations have a deep meaning, an esoteric meaning -- they form an essential part of M. Proudhon's argument.
Labour,[*] inasmuch as it is bought and sold, is a commodity like any other commodity, and has, in consequence, an exchange value. But the value of labour, or labour as a commodity, produces as little as the value of corn, or corn as a commodity, serves as food.
Labour has more or less "value," according to whether food commodities are more or less dear, whether the supply and demand of hands exist to such or such a degree, etc., etc.
Labour is not a "vague thing", it is always some definite labour, it is never labour in general that is sold and bought. It is not only labour which is qualitatively defined by the object; but also the object which is determined by the specific quality of labour.
Labour, insofar as it is sold and bought, is itself a commodity. Why is it bought? "In view of the values it is supposed to contain potentially." But if a certain thing is said to be a commod-
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ity, there is no longer any question as to the reason why it is bought, that is, as to the utility to be derived from it, the application to be made of it. It is a commodity as an object of traffic. All M. Proudhon's arguments are limited to this: labour is not bought as an immediate object of consumption. No, it is bought as an instrument of production, as a machine would be bought. As a commodity, labour has value and does not produce. M. Proudhon might just as well have said that there is no such thing as a commodity, since every commodity is acquired merely for some utilitarian purpose, and never as a commodity in itself.
In measuring the value of commodities by labour, M. Proudhon vaguely glimpses the impossibility of excluding labour from this same measure, insofar as labour has a value, labour-commodity. He has a misgiving that this is turning the minimum wage into the natural and normal price of immediate labour, that it is accepting the existing state of society. So, to get away from this fatal conclusion, he does an about-face and asserts that labour is not a commodity, that it cannot have value. He forgets that he himself has taken the value of labour as a measure, he forgets that his whole system rests on labour-commodity, on labour which is bartered, sold, bought, exchanged for produce, etc., on labour, in fact, which is an immediate source of income for the worker. He forgets everything.
To save his system, he consents to sacrifice its basis.
Et propter vitam vivendi perdere causas!*
We now come to a new definition of "constituted value."
"Value is the proportional relation of the products which constitute wealth."
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Let us note in the first place that the simple phrase "relative or exchange value" implies the idea of some relation in which products are exchanged reciprocally. By giving the name "proportional relation" to this relation, no change is made in the relative value, except in the expression. Neither the depreciation nor the enhancement of the value of a product destroys its quality of being in some "proportional relation" with the other products which constitute wealth.
Why then this new term, which introduces no new idea?
"Proportional relation" suggests many other economic relations, such as proportionality in production, the correct proportion between supply and demand, etc., and M. Proudhon is thinking of all that when he formulates this didactic paraphrase of marketable value.
In the first place, the relative value of products being determined by the comparative amount of labour used in the production of each of them, proportional relations, applied to this special case, stand for the respective quota of products which can be manufactured in a given time, and which in consequence are given in exchange for one another.
Let us see what advantage M. Proudhon draws from this proportional relation.
Everyone knows that when supply and demand are evenly balanced, the relative value of any product is accurately determined by the quantity of labour embodied in it, that is to say, that this relative value expresses the proportional relation precisely in the sense we have just attached to it. M. Proudhon inverts the order of things. Begin, he says, by measuring the relative value of a product by the quantity of labour embodied in it, and supply and demand will infallibly balance one another. Production will correspond to consumption, the product will always be exchangeable. Its current price will express
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exactly its true value. Instead of saying like everyone else: when the weather is fine, a lot of people are to be seen going out for a walk, M. Proudhon makes his people go out for a walk in order to be able to ensure them fine weather.
What M. Proudhon gives as the consequence of marketable value determined a priori by labour time could be justified only by a law couched more or less in the following terms:
Products will in future be exchanged in the exact ratio of the labour time they have cost. Whatever may be the proportion of supply to demand, the exchange of commodities will always be made as if they had been produced proportionately to the demand. Let M. Proudhon take it upon himself to formulate and lay down such a law, and we shall relieve him of the necessity of giving proofs. If, on the other hand, he insists on justifying his theory, not as a legislator, but as an economist, he will have to prove that the time needed to create a commodity indicates exactly the degree of its utility and marks its proportional relation to the demand, and in consequence, to the total amount of wealth. In this case, if a product is sold at a price equal to its cost of production, supply and demand will always be evenly balanced; for the cost of production is supposed to express the true relation between supply and demand.
Actually, M. Proudhon sets out to prove that the labour time needed to create a product indicates its correct proportional relation to needs, so that the things whose production costs the least time are the most immediately useful, and so on, step by step. The mere production of a luxury object proves at once, according to this doctrine, that society has spare time which allows it to satisfy a need for luxury.
M. Proudhon finds the very proof of his thesis in the observation that the most useful things cost the least time to produce, that society always begins with the easiest industries and
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successively "starts on the production of objects which cost more labour time and which correspond to a higher order of needs."
M. Proudhon borrows from M. Dunoyer the example of extractive industry -- fruit-gathering, pasturage, hunting, fishing, etc. -- which is the simplest, the least costly of industries, and the one by which man began "the first day of his second creation." The first day of his first creation is recorded in Genesis, which shows us God as the world's first manufacturer.
Things happen in quite a different way from what M. Proudhon imagines. The very moment civilization begins, production begins to be founded on the antagonism of orders, estates, classes, and finally on the antagonism of accumulated labour and immediate labour. No antagonism, no progress. This is the law that civilization has followed up to our days. Till now the productive forces have been developed by virtue of this system of class antagonisms. To say now that, because all the needs of all the workers were satisfied, men could devote themselves to the creation of products of a higher order -- to more complicated industries -- would be to leave class antagonism out of account and turn all historical development upside down. It is like saying that because, under the Roman emperors, muræna were fattened in artificial fishponds, therefore there was enough to feed abundantly the whole Roman population. Actually, on the contrary, the Roman people had not enough to buy bread with, while the Roman aristocrats had slaves enough to throw as fodder to the muræna.
The price of food has almost continuously risen, while the price of manufactured and luxury goods has almost continuously fallen. Take the agricultural industry itself: the most indispensable objects, like corn, meat, etc., rise in price, while cotton, sugar, coffee, etc., continually fall in a surprising proportion.
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And even among comestibles proper, the luxury articles, like artichokes, asparagus, etc., are today relatively cheaper than foodstuffs of prime necessity. In our age, the superfluous is easier to produce than the necessary. Finally, at different historical epochs, the reciprocal price relations are not only different, but opposed to one another. In the whole of the Middle Ages, agricultural products were relatively cheaper than manufactured products; in modern times they are in inverse ratio. Does this mean that the utility of agricultural products has diminished since the Middle Ages?
The use of products is determined by the social conditions in which the consumers find themselves placed, and these conditions themselves are based on class antagonism.
Cotton, potatoes and spirits are objects of the most common use. Potatoes have engendered scrofula; cotton has to a great extent driven out flax and wool, although wool and flax are, in many cases, of greater utility, if only from the point of view of hygiene; finally, spirits have got the upper hand of beer and wine, although spirits used as an alimentary substance are everywhere recognized to be poison. For a whole century, governments struggled in vain against the European opium; economics prevailed, and dictated its orders to consumption.
Why are cotton, potatoes and spirits the pivots of bourgeois society? Because the least amount of labour is needed to produce them, and, consequently, they have the lowest price. Why does the minimum price determine the maximum consumption? Is it by any chance because of the absolute utility of these objects, their intrinsic utility, their utility insofar as they correspond, in the most useful manner, to the needs of the worker as a man, and not of the man as a worker? No, it is because in a society founded on poverty the poorest products have the fatal prerogative of being used by the greatest number.
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To say now that because the least costly things are in greater use, they must be of the greatest utility, is saying that the wide use of spirits, because of their low cost of production, is the most conclusive proof of their utility; it is telling the proletarian that potatoes are more wholesome for him than meat; it is accepting the present state of affairs; it is, in short, making an apology, with M. Proudhon, for a society without understanding it.
In a future society, in which class antagonism will have ceased, in which there will no longer be any classes, use will no longer be determined by the minimum time of production; but the time of social production devoted to different articles will be determined by the degree of their social utility.
To return to M. Proudhon's thesis; since the labour time necessary for the production of an article is not the expression of its degree of utility, the exchange value of this same article, determined beforehand by the labour time embodied in it, can never regulate the correct relation of supply to demand, that is, the proportional relation in the sense M. Proudhon attributes to it at the moment.
It is not the sale of a given product at the price of its cost of production that constitutes the "proportional relation" of sup ply to demand, or the proportional quota of this product relatively to the sum total of production; it is the variations in demand and supply that show the producer what amount of a given commodity he must produce in order to receive at least the cost of production in exchange. And as these variations are continually occurring, there is also a continual movement of withdrawal and appiication of capital in the different branches of industry.
"It is only in consequence of such variations that capital is apportioned precisely, in the requisite abundance and no more to the production of the different commodities which happen to be in demand. With the rise
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or fall of price, profits are elevated above, or depressed below their general level, and capital is either encouraged to enter into, or is warned to depart from, the particular employment in which the variarion has taken place." -- "When we look to the markets of a large town, and observe how regularly they are supplied both with home and foreign commodities, in the quantity in which they are required, under all the circumstances of varying demand, arising from the caprice of taste, or a change in the amount of population, without often producing either the effects of a glut from a too ahundant supply, or an enormously high price from the supply being unequal to the demand, we must confess that the principle which apportions capital to each trade in the precise amount that is required, is more active than is generally supposed." (Ricardo, Vol. I, pp. 105 and 108.)
If M. Proudhon admits that the value of products is determined by labour time, he should equally admit that it is the fluctuating movement alone that in societies founded on individual exchanges makes labour time the measure of value. There is no ready constituted "proportional relation," but only a constituting movement.
We have just seen in what sense it is correct to speak of "proportion" as of a consequence of value determined by labour time. We shall see now how this measure by time, called by M. Proudhon the "law of proportion," becomes transformed into a law of disproportion.
Every new invention that enables the production in one hour of that which has hitherto been produced in two hours depreciates all similar products on the market. Competition forces the producer to sell the product of two hours as cheaply as the product of one hour. Competition implements the law according to which the relative value of a product is determined by the labour time needed to produce it. Labour time serving as the measure of marketable value becomes in this way the law of the continual depreciation of labour. We will say more. There will be depreciation not only of the commodities brought
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into the market, but also of the instruments of production and of whole plants. This fact was already pointed out by Ricardo when he said:
"By constantly increasing the facility of production, we constantly diminish the value of some of the commodities before produced." (Vol. II, p. 59.)
Sismondi goes further. He sces in this "value constituted " by labour time, the source of all the contradictions of modern industry and commerce.
"Mercantile value," he says, "is always determined in the long run by the quantity of labour needed to obtain the thing evaluated: it is not what it has actually cost, but what it would cost in future with, perhaps, perfected means; and this quantity, although difficult to evaluate, is always faithfully established by competition. . . . It is on this basis that the demand of the seller as well as the supply of the buyer is reckoned. The former will perhaps declare that the thing has cost him ten days' labour; but if the latter realizes that it can henceforth be produced with eight days' labour, in the event of competition proving this to the two contracting parties, the value will be reduced, and the market price fixed at eight days only. Of course, each of the parties believes that the thing is useful, that it is desired, that without desire there would be no sale; but the fixing of the price has nothing to do with utility." (Etudes, etc., Vol. II, p. 267, Brussels edition.)
It is important to emphasize the point that what determines value is not the time taken to produce a thing, but the minimum time it could possibly be produced in, and this minimum is as certained by competition. Suppose for a moment that there is no more competition and consequently no longer any means to ascertain the minimum of labour necessary for the production of a commodity; what will happen? It will suffice to spend six hours' work on the production of an object, in order to have the right, according to M. Proudhon, to demand in exchange six times as much as he who has taken only one hour to produce the same object.
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Instead of a "proportional relation," we have a disproportional relation, at any rate if we insist on sticking to relations, good or bad.
The continual depreciation of labour is only one side, one consequence of the evaluation of commodities by labour time. The excessive raising of prices, overproduction and many other features of industrial anarchy have their explanation in this mode of evaluation.
But does labour time used as a measure of value give rise at least to the proportional variety of products that so fascinates M. Proudhon?
On the contrary, monopoly in all its monotony follows in its wake and invades the world of products, just as to everybody's knowledge monopoly invades the world of the instruments of production. It is only in a few branches of industry, like the cotton industry, that very rapid progress can be made. The natural consequence of this progress is that the products of cotton manufacture, for instance, fall rapidly in price: but as the price of cotton goes down, the price of flax must go up in comparison. What will be the outcome? Flax will be replaced by cotton. In this way, flax has been driven out of almost the whole of North America. And we have obtained, instead of the proportional variety of products, the dominance of cotton.
What is left of this "proportional relation"? Nothing but the pious wish of an honest man who would like commodities to be produced in proportions which would permit of their being sold at an honest price. In all ages good-natured bourgeois and philanthropic economists have taken pleasure in expressing this innocent wish.
Let us hear what old Boisguillebert says:
"The price of commodities," he says, "must always be proportionate ; for it is such mutual understanding alone that can enable them to exist
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together so as to give themselves to one another at any moment " (here is M. Proudhon's continual exchangeability) "and reciprocally give birth to one another. . . . As wealth, then, is nothing but this continual intercourse between man and man, craft and craft, etc., it is a frightful blindness to go looking for the cause of misery elsewhere than in the cessation of such traffic brought about by a disturbance of proportion in prices." (Dissertation sur la nature des richesses, Daire ed.[18])
Let us listen also to a modern economist:
"The great law as necessary to be affixed to production, that is, the law of proportion, which alone can preserve the continuity of value. . . . The equivalent must be guaranteed. . . . All nations have attempted, at various periods of their history, by instituting numerous commercial regulations and restrictions, to effect, in some degree, the object here explained. . . . But the natural and inherent selfishness of man . . . has urged him to break down all such regulations. . . . Proportionate production is the realization of the entire truth of the Science of Social Economy." (W. Atkinson, Principles of Political Economy, London, 840, pp. 170-95.)
Fuit Troja.[*] This correct proportion between supply and demand, which is beginning once more to be the object of so many wishes, ceased long ago to exist. It has passed into the stage of senility. It was possible only at a time when the means of production were limited, when exchange took place within very restricted bounds. With the birth of large-scale industry this correct proportion had to come to an end, and production is inevitably compelled to pass in continuous succession through vicissitudes of prosperity, depression, crisis, stagnation, renewed prosperity, and so on.
Those who, like Sismondi, wish to return to the correct proportion of production, while preserving the present basis of society, are reactionary, since, to be consistent, they must also wish to bring back all the other conditions of industry of former times.
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What kept production in correct, or more or less correct, proportions? It was demand that dominated supply, that preceded it. Production followed close on the heels of consumption. Large-scale industry, forced by the very instruments at its disposal to produce on an ever-increasing scale, can no longer wait for demand. Production precedes consumption, supply compels demand.
In existing society, in industry based on individual exchange, anarchy of production, which is the source of so much misery, is at the same time the source of all progress.
Thus, one or the other:
Either you want the correct proportions of past centuries with present-day means of production, in which case you are both reactionary and utopian.
Or you want progress without anarchy: in which case, in order to preserve the productive forces, you must abandon individual exchange.
Individual exchange is consistent only with the small-scale industry of past centuries and its corollary of "correct proportion," or else with large-scale industry and all its train of misery and anarchy.
After all, the determination of value by labour time -- the formula M. Proudhon gives us as the regenerating formula of the future -- is therefore merely the scientific expression of the economic relations of present-day society, as was clearly and precisely demonstrated by Ricardo long before M. Proudhon.
But does the "equalitarian " application of this formula at least belong to M. Proudhon? Was he the first to think of reforming society by transforming all men into immediate workers exchanging equal amounts of labour? Is it for him to reproach the communists -- these people devoid of all knowledge of political economy, these "obstinately foolish men," these
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"paradise dreamers" -- with not having found, before him, this "solution of the problem of the proletariat"?
Anyone who is in any way familiar with the trend of political economy in England cannot fail to know that almost all the socialists in that country have, at different periods, proposed the equalitarian application of the Ricardian theory. We could quote for M. Proudhon: Hodgskin, Political Economy, 1827;[19] William Thompson, An Inquiry into the Principles of the Distribution of Wealth Most Conducive to Human Happiness, 1824; T. R. Edmonds, Practical Moral and Political Economy, 1828,[20] etc., etc., and four pages more of etc. We shall content ourselves with listening to an English communist, Mr. Bray.[21] We shall give the decisive passages in his remarkable work, Labour's Wrongs and Labour's Remedy, Leeds, 1839, and we shall dwell some time upon it, firstly, because Mr. Bray is still little known in France, and, secondly, because we think that we have discovered in him the key to the past, present and future works of M. Proudhon.
"The only way to arrive at truth is to go at once to First Principles. . . . Let us . . . go at once to the source from whence governments themselves have arisen. . . . By thus going to the origin of the thing, we shall find that every form of government, and every social and governmental wrong, owes its rise to the existing social system -- to the institution of property as it at present exists -- and that, therefore, if we would end our wrongs and our miseries at once and for ever, the present arrangements of society must be totally subverted. . . . By thus fighting them upon their own ground, and with their own weapons, we shall avoid that senseless chatter respecting 'visionaries' and 'theorists,' with which they are so ready to assail. . . . Before the conclusions arrived at by such a course of proceeding can be overthrown, the economists must unsay or disprove those established truths and principles on which their own arguments are founded." (Bray, pp. 17 and 41.) "It is labour alone which bestowes value. . . . Every man has an undoubted right to all that his honest labour can procure him. When he thus appropriates the fruits of his labour, he commits no injustice upon any other human being; for
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he interferes with no other man's right of doing the same with the produce of his labour. . . . All these ideas of superior and inferior -- of master and man -- may be traced to the neglect
§ 1. THE OPPOSITION BETWEEN USE VALUE
AND EXCHANGE VALUE
Sismondi : "It is the opposition between use value and exchange value to which commerce has reduced everything, etc." (Etudes, Volume II, p. 162, Brussels edition.[11])
SYNTHETIC VALUE
"Possessing utility, commodities derive their exchangeable value frorn two sources: from their scarcity, and from the quantity of labour required to obtain them. There are some commodities, the value of which is determined by their scarcity alone. No labour can increase the quantity of such goods, and therefore their value cannot be lowered by an increased supply. Some rare statues and pictures, etc. are all of this description. Their value . . . varies with the varying wealth and inclinations of those who are desirous to possess them." (Vol. I, pp. 4 and 5, l. c.) "These commodities, however, form a very small part of the mass of commodities daily exchanged in the market. By far the greatest part of those goods which are the objects of desire, are procured by labour; and they may be multiplied, not in one country alone, but in many, almost without any assignable limit, if we are disposed to bestow the labour necessary to obtain them." (Vol. I, p. 5, l. c.) "In speaking then of commodities, of their exchangeable value, and of the laws which regulate their relative prices, we mean always such commodities only as can be increased in quantity by the exertion of human industry, and on the production of which competition operates without restraint." (Vol. I, p. 5.)
2. "With having admitted the principle without qualification and at the same time restricted its application to that early and rude state of society, which precedes both the accumulation of stock and the appropriation of land." (Vol. I, p. 21.)
* Ricardo, as is well known, determines the value of a commodity by "the quantity of labour necessary for its production." Owing, however, to the prevailing form of exchange in every mode of production based on production of commodities, including therefore the capitalist mode of production, this value is not expressed directly in quantities of labour but in quantities of some other commodity. The value of a commodity expressed in a quantity of some other commodity (whether money or not) is termed by Ricardo its relative value. [Note by F. Engels to the German edition of 1885.]
* See present edition, p. 72. --Ed.
* The thesis that the "natural," i.e., normal, price of labour power coincides with the minimum wage, i.e., with the equivalent in value of the means of subsistence absolutely indispensable for the life and procreation of the worker, was first put forward by me in Outlines of a Critique of Political Economy (Deutsch-Französische Jahrbücher [Franco-[cont. onto p. 46. -- DJR] German Annuals ], Paris, 1844) and in The Condition of the Working Class in England. As seen here, Marx at that time accepted the thesis. Lassalle took it over from both of us. Although, however, in reality wages have a constant tendency to approach the minimum, the above thesis is nevertheless incorrect. The fact that labour power is regularly and on the average paid below its value cannot alter its value. In Capital, Marx has put the above thesis right (Section on the Buying and Selling of Labour Power) and also (Chapter 25: The General Law of Capitalist Accumulation ) analysed the circumstances which permit capitalist production to depress the price of labour power more and more below its value. [Note by F. Engels to the German edition of 1885.]
* An old French measure equivalent to 18 hectolitres. --Ed.
"But is there any need to dwell on this? The moment the economist" (read M. Proudhon) "changes the name of things, vera rerum vocabula [the true names of things], he is implicitly confessing his impotence and proclaiming himself not privy to the cause." (Proudhon, Vol. I, p. 188.)
* In the copy presented by Marx to N. Utina in 1876, after the word "labour" is added "labour power." The same addition is made in the 1896 French edition. --Ed.
* And for the sake of life to lose the reasons for living! (Juvenal, Satires, VIII.) --Ed.
* Troy is no more. --Ed.