 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, labor is the source of all value. The measure of labor is time. The relative value of products is determined by the labor time required for their production. Price is the monetary expression of the relative value of a product. Finally, the the constituted value of a product is purely and simply the value which is constituted by the labor time incorporated in it. Just as Adam Smith discovered the division of labor, 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 fully appreciates the importance of his own invention, seeks nevertheless to tone down the merit therefore in order to reassure the reader to as his claims to originality, and to win over minds whose timidity renders them little favorable to new ideas. But in apportioning 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, of the merit falls to himself. Here, in a nutshell, is the 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 antimony. 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 19th century? Ricardo s system, putting as a principle that the relative value of commodities corresponds exclusively to their production", dates from 1817. Ricardo is the head of a whole school dominant in England since the Restoration. [The Restoration began after the termination of the Napoleonic wars and the restoration of the Bourbon dynasty in France in 1815.] The Ricardian doctrine summarizes severely, remorselessly, the whole of the English 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 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 alone 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: 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 [An Inquiry into the Nature and Causes of the Wealth of Nations, first edition appearing in London, 1776]), and he adds: Ricardo goes on to reproach Smith: Ricardo sets out to prove that the ownership of land, that is, ground rent, cannot change the relative value of commodities and that the accumulation of capital has only a passing and fluctuation effect on the relative values determined by the comparative quantity of labor expended on their production. In support of this thesis, he gives his famous theory of ground rent, analyses capital, and ultimately finds nothing in it but accumulated labor. 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, they are the chief problems with which Ricardo is concerned. 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 money or to any other commodity which serves as a measure of its value. Here is Ricardo s refutation: 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 labor time. Ricardo shows us the real movement of bourgeois production, which constitutes value. M. Proudhon, leaving the 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 his starting point from present-day society to demonstrate to us how it constitutes value M. Proudhon takes constituted value as his starting point to construct a new social world with the aid of this value. For him, M. Proudhon, constituted value must move around and become once more the constituting factor in a world already completely constituted according to this mode of evaluation. The determination of value by labor 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 actual economic life; M. Proudhon s theory of values is the utopian interpretation 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 ground rent, accumulation of capital and the relation of wages to profits, which at first sight seems 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, beginning of realization of his regenerating idea. (See our S.3. Application of Constituted Value) Now let us pass on to the conclusions M. Proudhon draws from value constituted (by labor time). Are these conclusions the strict, natural consequences of value constituted" or determined by labor time? If the relative value of a commodity is determined by the quantity of labor required to produce it, it follows naturally that the relative value of labor, or wages, is likewise determined by the quantity of labor needed to produce the wages. Wages, that is, the relative value or the price of labor, are thus determined by the labor time needed to produce all that is necessary for the maintenance of the worker. 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: Labor, being itself a commodity, is measured as such by the labor time needed to produce the labor-commodity. And what is needed to produce this labor-commodity? Just enough labor time to produce the objects indispensable to the constant maintenance of labor, that is, to keep the worker alive and in a condition to propagate his race. The natural price of labor is no other than the wage minimum. [*2] If the current rate of wages rises above this natural price, it is precisely because the law of value put as a principle by M. Proudhon happens to be counterbalanced by the consequences of the varying relations of supply and demand. But the minimum wage is nonetheless the centre towards which the current rates of wages gravitate. Thus relative value, measured by labor 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 now see to what extent the application of labor 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 labor. Let us take a particular product: broadcloth, which has required the same quantity of labor as the linen. If there is an exchange of these two products, there is an exchange of equal quantities of labor. In exchanging these equal quantities of labor time, one does not change the reciprocal position of the producers, any more than one changes anything in the situation of the workers and manufacturers among themselves. To say that this exchange of products measured by labor 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 labor 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 supply and demand, must have as its cause a reduction or an increase in the labor 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 labor 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. Is your hour s labor worth mine? That is a question which is decided by competition. Competition, according to an American economist, determines how many days of simple labor are contained in one day s compound labor. Does not this reduction of days of compound labor to days of simple labor suppose that simple labor is itself taken as a measure of value? If the mere quantity of labor functions as a measure of value regardless of quality, it presupposes that simple labor has become the pivot of industry. It presupposes that labor has been equalized by the subordination of man to the machine or by the extreme division of labor; that men are effaced by their labor; 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 carcase. Quality no longer matters. Quantity alone decides everything; hour for hour, day for day; but this equalizing of labor 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 labor is scarely distinguishable in any way from another worker s labor: 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 labor of different workers, it is at most a quality of the last kind, which is far from being a distinctive speciality. 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 labor, that M. Proudhon wields his smoothing-plane of equalization, which he means to establish universally in time to come! All the equalitarian consequences 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 labor embodied in them with the value of commodities measured by the value of labor. If these two ways of measuring the value of commodities were equivalent, it could be said indifferently that the relative value of any commodity is measured by the quantity of labor embodied in it; or that it is measured by the quantity of labor it can buy; or again that it is measured by the quantity of labor which can acquire it. But this is far from being so. The value of labor 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 quarter of corn cost two days' labor instead of one, it would have twice its original value; but it would not set in operation double the quantity of labor, because it would contain no more nutritive matter than before. Thus the value of the corn, measured by the quantity of labor used to produce it, would have doubled; but measured either by the quantity of labor it can buy or the quantity of labor with which it can be bought, it would be far from having doubled. On the other hand, if the same labor produced twice as many clothes as before, their relative value would fall by half; but, nevertheless, this double quantity of clothing would not thereby be reduced to disposing over only half the quantity of labor, nor could the same labor command the double 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 labor. 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 labor time needed for the production of a commodity and measure by the value of the labor. Any man's labor, he says, can buy the value it represents. Thus, according to him, a certain quantity of labor embodied in a product is equivalent to the worker's payment, that is, to the value of labor. It is the same reasoning that makes him confuse cost of production with wages. Let us go still further. Adam Smith takes as the measure of value, now the time of labor needed for the production of a commodity, now the value of labor. Ricardo exposes this error by showing clearly the disparity of these two ways of measuring. M. Proudhon goes one better than 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 labor, 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 better than to give as the equivalent of a certain quantity of labor the sum total of the products it has created, which is as good as supposing that the whole of society consists merely of 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 commoditiesin order to arrive at equal payment 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 dialectics! We have seen that M. Proudhon makes the value of labor the determining cause of the value of products to such an extent that for him wages, the official name for the value of labor, form the integral price of all things: that is why Say's objection troubles him. In labor as a commodity, which is a grim reality, he sees nothing but a grammatical ellipsis. Thus the whole of existing society, founded on labor as a commodity, is henceforth founded on a poetic licence, 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 slave, servant] from servare [To preserve]. These philological dissertations have a deep meaning, an esoteric meaning they form an essential part of M. Proudhon's argument. Labor , 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 labor, or labor as a commodity, produces as little as the value of wheat, or wheat as a commodity, serves as food. Labor is worth more or less, 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. Labor is not a vague thing"; it is always some definite labor, it is never labor in general that is bought and sold. It is not only labor that is qualitatively defined by the object; but also the object which is determined by the specific quality of labor. Labor, in so far as it is bought and sold, is itself a commodity. Why is it bought? Because of the values it is supposed potentially to contain. But if a certain thing is said to be a commodity, 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: labor 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, labor has no 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 obtained merely for some utilitarian purpose, and never as a commodity in itself. In measuring the value of commodities by labor, M. Proudhon vaguely glimpses the impossibility of excluding labor from this same measure, in so far as labor has a value, as labor is a commodity. He has a misgiving that it is turning the wage minimum into the natural and normal price of immediate labor, that it is accepting the existing state of society. So, to get away from this fatal consequence, he faces about and asserts that labor is not a commodity, that it cannot have value. He forgets that he himself has taken the value of labor as a measure, he forgets that his whole system rests on labor as a commodity, on labor which is bartered, bought, sold, exchanged for produce, etc., on labor, 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. Let us note in the first place that the single 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 true 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 labor 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 labor 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 labor 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 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 labor 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 labor 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 labor time needed to create a product indicates its true 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 successively starts on the production of objects which cost more labor 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 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 labor and actual labor. 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, muraena 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 muraena. 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., fall in a surprising proportion. 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 labor 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 insomuch as they correspond, in the most useful manner, in the needs of the worker as a man, and not to 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. To say now that because the least costly things are in greater use, they must be of greater 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 production devoted to different articles will be determined by the degree of their social utility. To return to M. Proudhon's thesis: the moment the labor time necessary for the production of an article ceases to be the expression of its degree of utility, the exchange value of this same article, determined beforehand by the labor time embodied in it, becomes quite usable to regulate the true relation of supply to demand, that is, the proportional relation in the sense M. Proudhon at the moment attributes to it. It is not the sale of a given product at the price of its cost of production that constitutes the proportional relation of supply to demand, or the proportional quota of this product relatively to the sum total of production; it is the variations in supply and demand that show the producer what amount of a given commodity he must produce in order to receive in exchange at least the cost of production. And as these variations are continually occurring, there is also a continual movement of withdrawl and application of capital in the different branches of industry. If M. Proudhon admits that the value of products is determined by labor time, he should equally admit that it is the fluctuating movement alone that in society founded on individual exchanges make labor the measure of value. There is no ready-made 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 labor 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 carries into effect the law according to which the relative value of a product is determined by the labor time needed to produce it. Labor time serving as the measure of marketable value becomes in this way the law of the continual depreciation of labor. We will say more. There will be depreciation not only of the commodities brought 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: Sismondi goes further. He sees in this value constituted by labor time, the source of all the contradictions of modern industry and commerce. 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 the minimum is ascertained by competition. Suppose for a moment that there is no more competition and consequently no longer any means to ascertain the minimum of labor 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 the one who has taken only one hour to produce the same object. 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 labor is only one side, one consequence of the evaluation of commodities by labor time. The excessive raising of prices, overproduction and many other features of industrial anarchy have their explanation in this mode of evaluation. But does labor time used as a measure of value give rise at least to the proportional variety of products that so delights 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 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: Let us listen also to a modern economist: Fuit Troja. [Troy is no more.] This true 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 the movement of exchange took place within very restricted bounds. With the birth of large-scale industry this true 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 true 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. What kept production in true, or more or less true, 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 demands. 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: Or you want progress without anarchy: in which case, in order to preserve the productive forces, you must abandon individual exchange. Individual exchange is suited only to the small-scale industry of past centuries with its corollary of true proportion, or else to large-scale industry with all its train of misery and anarchy. After all, the determination of value by labor 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 actual workers exchanging equal amounts of labor? Is it really for him to reproach the Communists these people devoid of all knowledge of political economy, these obstinately foolish men, these 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 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, 1824; T. R. Edmonds, Practical 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. We shall give the decisive passages in his remarkable work, Labor's Wrongs and Labor'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. After having refuted the objections of the economists to communism, Mr. Bray goes on to say: We now only need to reply in a few words to Mr. Bray who without us and in spite of us had managed to supplant M. Proudhon, except that Mr. Bray, far from claiming the last word on behalf of humanity, proposes merely measures which he thinks good for a period of transition between existing society and a community regime. One hour of Peter's labor exchanges for one hour of Paul's labor. That is Mr. Bray's fundamental axiom. Let us suppose Peter has 12 hours' labor before him, and Paul only six. Peter will consequently have six hours' labor left over. What will he do with these six hours' labor? Either he will do nothing with them in which case he will have worked six hours for nothing; or else he will remain idle for another six hours to get even; or else, as a last resource, he will give these six hours' labor, which he has no use for, to Paul into the bargain. What in the end will Peter have earned more than Paul? Some hours of labor? No! He will have gained only hours of leisure; he will be forced to play the loafer for six hours. And in order that this new right to loaf might be not only relished but sought after in the new society, this society would have to find in idleness its highest bliss, and to look upon labor as a heavy shackle from which it must break free at all costs. And indeed, to return to our example, if only these hours of leisure that Peter had gained in excess of Paul were really a gain! Not in the least. Paul, beginning by working only six hours, attains by steady and regular work a result that Peter secures only by beginning with an excess of work. Everyone will want to be Paul, there will be a competition to occupy Paul's position, a competition in idleness. Well, then! What has the exchange of equal quantities of labor brought us? Overproduction, depreciation, excess of labor followed by unemployment; in short, economic relations such as we see in present-day society, minus the competition of labor. No! We are wrong! These is still an expedient which may save this new society of Peters and Pauls. Peter will consume by himself the product of the six hours' labor which he has left. But from the moment he has no longer to exchange because he has produced, he has no need to produce for exchange; and the whole hypothesis of a society founded on the exchange and division of labor will fall to the ground. Equality of exchange will have been saved by the simple fact that exchange will have ceased to be: Paul and Peter would arrive at the position of Robinson. Thus, if all the members of society are supposed to be actual workers, the exchange of equal quantities of hours of labor is possible only on condition that the number of hours to be spent on material production is agreed on before hand. But such an agreement negates individual exchange. We still come to the same result, if we take as our starting point not the distribution of the products created but the act of production. In large-scale industry, Peter is not free to fix for himself the time of his labor, for Peter's labor is nothing without the co-operation of all the Peters and all the Pauls who make up the workshop. This explains very well the dogged resistance which the English factory owners put up to the Ten Hours' Bill. They knew only too well that a two-hours' reduction of labor granted to women and children would carry with it an equal reduction of working hours for adult men. It is in the nature of large-scale industry that working hours should be equal for all. What is today the result of capital and the competition of workers among themselves will be tomorrow, if you sever the relation between labor and capital, an actual agreement based upon the relation between the sum of productive forces and the sum of existing needs. But such an agreement is a condemnation of individual exchange, and we are back again at our first conclusion! In principle, there is no exchange of products but there is the exchange of the labor which co-operated in production. The mode of exchange of products depends upon the mode of exchange of the productive forces. In general, the form of exchange of products corresponds to the form of production. Change the latter, and the former will change in consequence. Thus in the history of society we see that the mode of exchanging products is regulated by the mode of producing them. Individual exchange corresponds also to a definite mode of production which itself corresponds to class antagonism. There is thus no individual exchange without the antagonism of classes. But the respectable conscience refuses to see this obvious fact. So long as one is a bourgeois, one cannot but see in this relation of antagonism a relation of harmony and eternal justice, which allows no one to gain at the expense of another. For the bourgeois, individual exchange can exist without any antagonism of classes. For him, these are two quite unconnected things. Individual exchange, as the bourgeois conceives it, is far from resembling individual exchange as it actually exists in practice. Mr. Bray turns the illusion of the respectable bourgeois into an ideal he would like to attain. In a purified individual exchange, freed from all the elements of antagonism he finds in it, he sees an equalitarian" relation which he would like society to adopt generally. Mr. Bray does not see that this equalitarian relation, this corrective ideal that he would like to apply to the world, is itself nothing but the reflection of the actual world; and that therefore it is totally impossible to reconstitute society on the basis of what is merely an embellished shadow of it. In proportion as this shadow takes on substance again, we perceive that this substance, far from being the transfiguration dreamt of, is the actual body of existing society. [*3] It is known that Proudhon did not take this warning to heart. In 1849 he himself made an attempt with a new Exchange Bank in Paris. The bank, however, failed before it had got going properly: a court case against Proudhon had to serve to cover its collapse. [Note by Engels, 1885 German Edition]
The Poverty of Philosophy - Chapter 1.2