The present work was produced 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 Syst me des contradictions conomiques, ou Philosophie de la mis re, which had just appeared, gave him the opportunity to develop these basic features, setting them against the views of a man who, from then on, was to occupy the most important place among living French socialists. Since the time in Paris when the two of them had often spent whole nights discussing economic questions, their paths had increasingly diverged: Proudhon s book proved that there was already an unbridgeable gulf between them. To ignore it was at that time impossible, and so Marx put on record the irreparable rupture in this reply of his. Marx s general opinion of Proudhon is to be found in the article which appeared in the Berlin Social-Demokrat Nos 16, 17 and 18 for 1865. It was the only article Marx wrote for that paper; Herr von Schweitzer s attempts to guide it along feudal and government lines, which became evident soon afterwards, compelled us to publicly terminate our collaboration after only a few weeks.  For Germany, the present work has at this precise moment a significance which Marx himself never imagined. How could he have known that, in trouncing Proudhon, he was hitting Rodbertus, the idol of the careerists of today, who was unknown to him even by name at that time? This is not the place to deal with relations between Marx and Rodbertus; an opportunity for that is sure to present itself to me very soon.  Suffice it to note here that when Rodbertus accuses Marx of having plundered him and of having freely used in his Capital without quoting him his work Zur Erkenntnis, he allows himself to indulge in an act of slander which is only explicable by the irksomeness of unrecognised 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 by Rodbertus ever came to Marx s sight; all he knew of Rodbertus was the three Sociale Briefe and even these certainly not before 1858 or 1859. With greater reason Rodbertus asserts 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 thus one of the targets of criticism in the present work, and this compels me to deal briefly with his fundamental piece: Zur Erkenntnis unsrer staatswirthschaftlichen Zust nde, 1842, insofar as this brings forth anticipations of Proudhon as well as the communism of Weitling likewise (again unconsciously) contained in it. Insofar as modern socialism, no matter of what tendency, starts out from bourgeois political economy, it almost without exception takes up the Ricardian theory of value. The two propositions which Ricardo proclaimed in 1817 right at the beginning of his Principles, These two propositions had ever since 1821 been utilised in England for socialist conclusions , and in part with such pointedness and resolution that this literature, which had then almost been forgotten and was to a large extent only rediscovered by Marx, remained unsurpassed until the appearance of Capital. About this another time. If, therefore, in 1842 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 could rank as a new discovery only for Germany at best. That such an application of the Ricardian theory was far from new was proved by Marx against Proudhon, who suffered from a similar conceit. And the quotations given here from Bray on their own put an end to a good part of the priority claimed by Rodbertus. At that time Marx had never yet entered the reading room of the British Museum. Apart from the libraries of Paris and Brussels, apart from my books and extracts, he had only examined such books as were obtainable in Manchester during a six-week journey to England we made together in the summer of 1845. The literature in question was, therefore, by no means so inaccesible 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 bigotry. He is the actual founder of specifically Prussian socialism and is now at last recognised as such. However, even in his beloved Prussia, Rodbertus was not to remain undisturbed. In 1859, Marx s A Contribution to the Critique of Political Economy, Part I, was published in Berlin. Therein, among the economists objections to Ricardo, the following was put forward as the second objection (p. 40): On this there was the following note: In the same note there was a reference to Marx s Mis re de la philosophie, 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 occurs to him that Marx might have drawn his conclusions from Ricardo independently, just as well as Rodbertus himself. Absolutely impossible! Marx had plundered" him the man whom the same Marx had offered every opportunity to convince 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 previously 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. Quite apart from the fact that on this matter he nowhere presents anything which has not already been said at least as well, before him, his presentation suffers like those of his predecessors from the fact that he adopts, uncritically and without examining their content, economic categories labour, capital, value, etc. in the crude form, clinging to their external appearance, 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 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 indeed indicates in the above-quoted passage, it is incorrect in formal economic terms, 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 saying 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 before our eyes to an ever growing degree; he says only that surplus value consists of unpaid labour, which is a simple fact. But what in economic terms may be formally incorrect, may all the same be correct from the point of view of world history. If mass moral consciousness declares an economic fact to be unjust, as it did at one time in the case of slavery and statute labour, that is proof that the fact itself has outlived its day, that other economic facts have made their appearance due 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 production. But now it turns out that in this imperfect world commodities are sold sometimes above, sometimes below their value, and indeed not only as a result of ups and downs in competition. The rate of profit tends just as much to balance out at the same level for all capitalists as the price of commodities does to become reduced to the labour value by agency of supply and demand. But the rate of profit is calculated on the total capital invested in an industrial business. Since now the annual products in two different branches of industry may incorporate equal quantities of labour, and, consequently, may represent equal values and also wages may be at an equal level in both, while the capital advanced in one branch may be, and often is, twice or three times as great as in the other, consequently the Ricardian law of value, as Ricardo himself discovered, comes into contradiction here 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 the two branches of industry cannot always be sold at their values. Thus, we have here a contradiction, the antinomy of two economic laws, the practical resolution of which takes place according to Ricardo (Chapter I, Section 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 honest bourgeois. It appeals with irresistible force to his sense of justice. Justice and equality of rights are the cornerstones on which the bourgeois of the eighteenth and nineteenth centuries would like to erect his social edifice over the ruins of feudal injustice, inequality and privilege. And the determination of value of commodities by labour and the free 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 foundations on which the whole political, juridical and philosophical ideology of the modern bourgeoisie has been built. Once it is recognised that labour is the measure of value of a commodity, the better feelings of the honest bourgeois cannot but be deeply wounded by the wickedness of a world which, while recognising the 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 workmen and apprentices is daily more and more depreciated in value by the competition of large-scale production and machinery, this small-scale 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 must long for a society in which a single law of commodity production prevails exclusively and in full, but in which 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 way of thinking of the modern petty bourgeois real or ideal is proved by the fact that it was systematically developed by John Gray back in 1831, that it was tried in practice and theoretically propagated 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 as late as 1871 as the solution to the social question and, as, so to say, his social testament, and that in 1884 it again finds adherents among the horde of careerists who in the name of Rodbertus set out to exploit Prussian state socialism.  The critique of this utopia has been so exhaustively furnished by Marx both against Proudhon and against Gray (see the appendix to this work) that I can confine myself here to a few remarks on the form of substantiating and depicting it peculiar to Rodbertus. As already noted, Rodbertus adopts the traditional definitions of economic concepts entirely in the form in which they have come down to him from the economists. He does not make the slightest attempt to investigate them. Value is for him This, to put it mildly, extremely slovenly definition gives us at the best an idea of what value approximately 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 located 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 conclusion that there is no real measure of value and that one has to make do with a substitute measure. Labour could serve as such but only if products of an equal quantity of labour were always exchanged against products of an equal quantity of labour whether this is already the case of itself, or whether precautionary measures are adopted to ensure that it is. Consequently value and labour remain without any sort of material connection 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. Labour, again, is taken uncritically 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 something which measures value, quite irrespective of whether it is expended under normal average social conditions or not. Whether the producers take ten days, or only one, to make products which could be made 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 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, is anxious to avoid 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 seen from its property of creating 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 only by the most concrete absence of ideas. The transition to utopia is now made in the turn of a hand. The "measures", which ensure exchange of commodities according to labour value as the invariable rule, cause no difficulty. The other utopians of this tendency, from Gray to Proudhon, rack their brains to invent social institutions which would achieve this aim. They attempt at least to solve the economic question in an economic way through the action of the owners themselves who exchange the commodities. For Rodbertus it is much easier. As a good Prussian he appeals to the state: a decree of the state authority orders the reform. In this way then, value is happily constituted", but by no means the priority in this constitution as claimed by Rodbertus. On the contrary, Gray as well as Bray among many others before Rodbertus, at length and frequently ad nauseam, 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 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 is effected, one must hear from Rodbertus himself: If Rodbertus has hitherto always had the misfortune to arrive 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 supplied except in return for 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 the smallest remainder, it is correct down to a second of labour time, and no governmental chief revenue office accountant, however many years of faithful service he may have behind him, could prove the slightest error in calculation. What more could one want? In present-day capitalist society each industrial capitalist produces off his own bat 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 be supplied quickly enough, may tomorrow be offered far in excess of the demand. Nevertheless, demand is finally satisfied in one way or another, good or bad, and, taken as a whole, production is ultimately geared towards the objects required. How is this evening-out of the contradiction effected? By competition. And how does competition bring about this solution? Simply by depreciating below their labour value those commodities which by their 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 ostensibly useful articles in unusable, superfluous quantity. Two things follow from this: First, continual deviations of the prices of commodities from their values are the necessary condition in and through which the value of the commodities as such 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 looks somewhat different from the value which it manifests, is a fate which value shares with most social relations. A 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 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 who exchange their commodities, precisely thereby brings about the only organisation 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 society requires or does not require and in what amounts. But it is precisely this sole regulator that the utopia advocated by Rodbertus among others wishes to 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 by the million Rodbertus triumphantly shows us his splendid 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 governmental chief revenue office accountant X in Pomerania who has checked the calculation and found it correct, and who, as one who has never yet been caught lacking with the accounts, is thoroughly trustworthy. And now consider the naivet with which Rodbertus would abolish industrial and commercial crises by means of his utopia. As soon as the production of commodities has assumed world market dimensions, the evening-out 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 on the world market, by a commercial crisis. [*1] If now competition is to be forbidden to make the individual producers aware, by a rise or fall in prices, how the world market stands, then they are completely blindfolded. To institute the production of commodities in such a fashion that the producers can no longer learn anything about the state of the market for which they are producing that indeed is a cure for the crisis disease which could make Dr. Eisenbart envious of Rodbertus. It is now comprehensible why Rodbertus determines the value of commodities simply by labour and at most allows for 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 individual product, both in relation to other products of the same kind and also in relation to society s total demand. He would thereby have been confronted with the question as to 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 precisely 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 the labour money exchange economy. They all demand this exchange organisation for the purpose of abolishing the exploitation of wage labour by capital. Every producer is to receive the full labour value of his product. On 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 condition of society can the worker receive the full value of his product for consumption. A series of economically unproductive but necessary functions 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 applies. In a society in which general productive labour is obligatory, which is also conceivable after all, this ceases to apply. But the need for a social reserve and accumulation fund would remain and consequently even in that case, the workers, i.e., all, would remain in possession and enjoyment of their total product, but each separate worker would not enjoy the full returns 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 1842 is geared 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, however, 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 rent and profit a sort of pay on that account a conception which was, it will be recalled, not new even in 1842. Actually they get at present far too much for the little that they do, and badly at that, 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 200 per cent, that is to say, for twelve hours of labour daily the worker is to receive a certificate not for twelve hours but only for four, and the value produced in the remaining eight hours is to be divided between landowner and capitalist. Rodbertus labour certificates, therefore, are a direct lie. Again, one must be a Pomeranian manor owner in order to imagine that a working class would put up with working twelve hours in order to receive a certificate for four hours of labour. If the hocus-pocus of capitalist production is translated into this na ve 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 Criminal Code.  One need never have seen any other proletariat than the day-labourer proletariat, still actually in semi-serfdom, of a Pomeranian manor where the rod and the whip reign supreme, and where all the beautiful women in the village belong to his lordship s harem, in order to imagine one can treat the workers in such a shamefaced manner. But, after all, our conservatives are our greatest revolutionaries. If, however, our workers are sufficiently docile to be taken in that they have in reality only worked four hours during a whole twelve hours of hard work, 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 pie in the sky of the most infantile kind 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 that one direction was a very promising beginning. Even if it was new only for him and for Germany, still as a whole, it stands on a par with the achievements of the better ones among 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 by also tackling the development of Ricardo s theory from the very beginning in the second direction, in the direction of utopia. Thereby he surrendered the first condition of all criticism freedom from bias. He worked on towards a goal fixed in advance, he became a Tendenz konom. Once imprisoned by his utopia, he cut himself off from all possibility of scientific advance. From 1842 up to his death, he went round in circles, always repeating the same ideas which he had already expressed or suggested in his first work, feeling himself unappreciated, finding himself plundered, where there was nothing to plunder, and finally refusing, not without intention, to recognise that in essence 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 due to handwritten alterations by Marx, which will also be inserted in the new French edition that is now being prepared.  It is hardly necessary to point out that the terminology used in this work does not entirely 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. Also added as a supplement to this edition are: For more details about the pamphlet see Engels Preface to Vol. II of Marx s Capital.
The Poverty of Philosophy – Preface (1885)