Datasets:

mallam-ai

/

marx-engels

like 3

||636| Nowhere does Ricardo consider surplus-value separately and independently from its particular forms profit (interest) and rent. His observations on the organic composition of capital, which is of such decisive importance, are therefore confined to those differences in the organic composition which he took over from Adam Smith (actually from the Physiocrats), namely, those arising from the process of circulation (fixed and circulating cap-ital). Nowhere does he touch on or perceive the differences in the organic composition within the actual process of production. Hence his confusion of value with cost-price, his wrong theory of rent, his erroneous laws relating to the causes of the rise and fall in the rate of profit, etc. Profit and surplus-value are only identical when the capital advanced is identical with the capital laid out directly in wages. (Rent is not taken into account here since the surplus-value is, in the first place, entirely appropriated by the capitalist, [irrespective of] what portion he has subsequently to hand over to his co-partners. Furthermore, Ricardo himself presents rent as an item which is separated, detached from profit.) In his observations on profit and wages, Ricardo also abstracts from the constant part of capital, which is not laid out in wages. He treats the matter as though the entire capital were laid out directly in wages. To this extent, therefore, he considers surplus-value and not profit, hence it is possible to speak of his theory of surplus-value. On the other hand, however, he thinks that he is dealing with profit as such, and in fact views which are based on the assumption of profit and not of surplus-value, constantly creep in. Where he correctly sets forth the laws of surplus-value, he distorts them by immediately expressing them as laws of profit. On the other hand, he seeks to present the laws of profit directly, without the intermediate links, as laws of surplus-value. When we speak of his theory of surplus-value, we are, therefore, speaking of his theory of profit, in so far as he confuses the latter with surplus-value, i.e., in so far as he only considers profit in relation to variable capital, the part of capital laid out in wages. We shall later deal with what he says of profit as distinct from surplus-value. It is so much in the nature of the subject-matter that surplus-value can only be considered in relation to the variable capital, i.e., capital laid out directly in wages and without an understanding of surplus-value no theory of profit is possible that Ricardo treats the entire capital as variable capital and abstracts from constant capital, although he occasionally mentions it in the form of advances. ||637| In Chapter XXVI On Gross and Net Revenue Ricardo speaks of: What does his whole doctrine of average profit (on which his theory of rent depends) mean, but that profits are in proportion to the capital, and not in proportion to the quantity of labour employed ? If they were in proportion to the quantity of labour employed , then equal capitals would yield very unequal profits, since their profit would be equal to the surplus-value created in their own sphere of production; the surplus-value however depends not on the size of the capital as a whole, but on the size of the variable capital, which is equivalent to the quantity of labour employed. What then is the meaning of attributing to a specific use of capital, to specific trades, by way of exception, that in them profits are proportionate to the amount of capital and not to the quantity of labour employed? With a given rate of surplus-value, the amount of surplus-value for a particular capital must always depend, not on the absolute size of the capital, but on the quantity of labour employed. On the other hand, if the average rate of profit is given, the amount of profit must always depend on the size of the capital employed and not on the quantity of labour employed. Ricardo expressly mentions the That is to say, he speaks of trades which employ relatively large amounts of constant, and little variable capital. At the same time, they are trades in which, compared with others, the total amount of the capital advanced is large, or which can only be carried on with large capitals. If the rate of profit is given, the amount of profit depends entirely on the size of the capitals advanced. This, however, by no means distinguishes the trades in which large capitals and much constant capital are employed (the two always go together) from those in which small capitals are employed, but is merely an application of the theory that equal capitals yield equal profits, a larger capital therefore yields more profit than a smaller capital. This has nothing to do with the quantity of labour employed . But whether the rate of profit in general is great or small, depends indeed on the total quantity of labour employed by the capital of the whole class of capitalists and on the proportion of unpaid labour; and, lastly, on the ratio of the capital spent on labour and the capital that is merely reproduced as a condition of production. Ricardo himself argues against Adam Smith s view, He says: We shall see later, how far his view is correct that exceptional profits (when they are not caused by the rise in market-price above the value) do not raise the general rate of profit in spite of the equalisation of profits, and also how far his view is correct that foreign trade and the expansion of the market cannot raise the rate of profit. But granted that he is right, and, on the whole granted the equality of profits , how can he distinguish between trades where profits are in proportion to the capital and others where they are in proportion to the quantity of labour employed ? In Chapter XXVI, On Gross and Net Revenue , quoted above, Ricardo says: The whole statement is nonsense. In the first place, according to Ricardo, a greater quantity of labour is employed on the land last cultivated than on all the other land. That is why, according to him, rent arises on the other land. How, therefore, is a given capital to set in motion a greater quantity of labour than in manufactures and trade, on all other land except the land last cultivated? That the product of the better land has a market-value that is higher than the individual value, which is determined by the quantity of labour employed by the capital that cultivates it, is surely not the same thing as that this capital puts in motion a greater quantity of labour than an equal capital employed in manufactures and trade ? But it would have been correct, had Ricardo said that, apart from differences in the fertility of the land, altogether rent arises because agricultural capital sets in motion a greater quantity of labour in proportion to the constant part of the capital, than does the average non-agricultural capital. ||638| Ricardo overlooks the fact that, with a given surplus-value, various factors may raise or lower and in general influence the rate of profit. Because he identifies surplus-value with profit, he quite consistently seeks to demonstrate that the rise and fall in the rate of profit is caused only by circumstances that make the rate of surplus-value rise or fall. Apart from the circumstances which, when the amount of surplus-value is given, influence the rate of profit, although not the amount of profit, he furthermore overlooks the fact that the rate of profit depends on the amount of surplus-value, and by no means on the rate of surplus-value. When the rate of surplus-value, i.e., of surplus-labour, is given, the amount of surplus-value depends on the organic composition of the capital, that is to say, on the number of workers which a capital of given value, for instance 100, employs. It depends on the rate of surplus-value if the organic composition of the capital is given. It is thus determined by two factors: the number of workers simultaneously employed and the rate of surplus-labour. If the capital increases, then the amount of surplus-value also increases whatever its organic composition, provided it remains unchanged. But this in no way alters the fact that for a capital of given value, for example 100, it [the amount of surplus-value] remains the same. If in this case it is 10, then it is 100 for 1,000, but this does not alter the proportion. <Ricardo: This only applies to the normal rate of profit in the same employment . Otherwise it is in direct contradiction to the statements quoted earlier on: In Chapter XII Land-Tax , Ricardo incidentally makes the following remark directed against Say; it shows that the Englishman is always very conscious of the economic distinctions whereas the Continental constantly forgets them: In Chapter XIII Taxes on Gold (important for Ricardo s theory of money), Ricardo makes some additional reflections or further definitions relating to market-price and natural price. They amount to this, how long the equalisation of the two prices takes depends on whether the particular sphere of production permits a rapid or slow increase or reduction of supply, which in turn is equivalent to a rapid or slow transfer or withdrawal of capital to or from the sphere in question. Ricardo has been criticised by many writers (Sismondi, etc.) because, in his observations on rent, he disregards the difficulties that the withdrawal of capital presents for the farmer who employs a great deal of fixed capital, etc. (The history of England from 1815 to 1830 provides strong proof for this.) Although this objection is quite correct, it does not in any way affect the theory, it leaves it quite untouched, because in this case it is invariably only a question of the more or less rapid or slow operation of the economic law. But as regards the reverse objection, which refers to the application of new capital to new land, the situation is quite different. Ricardo assumes that this can take place without the intervention of the landlord, that in this case capital is operating in a field of action ||639|, in which it does not meet with any resistance. But this is fundamentally wrong. In order to prove this assumption, that this is indeed so, where capitalist production and landed property are developed, Ricardo always presupposes cases in which landed property does not exist, either in fact or in law, and where capitalist production too is not yet developed, at least not on the land. The statements just referred to are the following: In the same Chapter XIII Taxes on Gold , Ricardo speaks of Is profit a creation of wealth, or is it not rather a transfer of the surplus-labour, from the workman to the capitalist? In fact wages too, are not a creation of wealth. But they are not a transfer. They are the appropriation of part of the produce of labour by those who produced it. In the same chapter Ricardo says: Whether Ricardo is right when he says that a tax on raw produce from the surface of the earth falls neither on the landlord nor on the farmer but on the consumer, does not concern us here. I maintain, however, that, if he is right, such a tax may raise the rent, whereas he thinks that it does not affect it, unless, by increasing the price of the means of subsistence, etc., it diminishes capital, population and the demand for corn, etc. For Ricardo imagines that an increase in the price of raw produce only affects the rate of profit in so far as it raises the price of the means of subsistence of the worker. And it is true that an increase in the price of raw produce can only in this way affect the rate of surplus-value and consequently surplus-value itself, thereby affecting the rate of profit. But assuming a given surplus-value, an increase in the price of the raw produce from the surface of the earth would raise the value of constant capital in proportion to the variable, would increase the ratio of constant capital to variable and therefore reduce the rate of profit, thus raising the rent. Ricardo starts out from the view point ||640| that in so far as the rise or fall in the price of the raw produce does not affect wages, it does not affect profit; for, he argues <except in one passage to which we shall return at a later stage> that the rate of profit remains the same, whether the value of the capital advanced falls or rises. If the value of the capital advanced grows, then the value of the product grows and also the part of the product which forms the surplus-product, i.e., profit. The reverse happens when the value of the capital advanced falls. This [Ricardo s assertion] is only correct, if the values of variable and constant capital change in the same proportion, whether the change is caused by a rise in the price of raw materials or by taxes, etc. In this case the rate remains unaffected, because no change has occurred in the organic composition of the capital. And even then it must be assumed as is the case with temporary changes that wages remain the same, whether the price of raw produce rises or falls (in other words wages remain the same, that is, their value remains unchanged irrespective of any rise or fall in the use-value of the wages). The following possibilities exist: First the two major differences: A. A change in the method of production brings about a change in the proportion between the amounts of constant and variable capital employed. In this case the rate of surplus-value remains the same provided wages remain constant (in terms of value) <i.e., in terms of the labour-time they represent>. But the surplus-value itself is affected if a different number of workers is employed by the same capital, i.e., if there is an alteration in the variable capital. If the change in the method of production results in a relative fall in constant capital, the surplus-value grows and thus the rate of profit. The reverse case produces the opposite result. It is here assumed throughout that the value pro tanto, per 100 for example, of constant and variable capital remains the same. In this case the change in the method of production cannot affect constant and variable capital equally; that is, for instance, constant and variable capital without a change in value cannot increase or diminish to the same extent, for the fall or rise is here always the result of a change in the productivity of labour. A change in the method of production has not the same but a different effect [on constant and variable capital]; and this has nothing to do with whether a large or small amount of capital has to be employed with a given organic composition of capital. B. The method of production remains the same. There is a change in the ratio of constant to variable capital, while their relative volume [in physical units] remains the same (so that each of them forms the same proportion of the total capital as before). This change in their ratio is caused by a change in the value of the commodities which enter into constant or variable capital. The following possibilities exist here: [1.] The value of the constant capital remains the same while that of the variable capital rises or falls. This would always affect the surplus-value, and thereby the rate of profit. [2.] The value of the variable capital remains the same while that of the constant rises or falls. Then the rate of profit would fall in the first case and rise in the second. [3.] If both fall simultaneously, but in different proportions, then the one has always risen or fallen as compared with the other. [4.] The value of the constant and of the variable capital is equally affected, whether both rise or both fall. If both rise, then the rate of profit falls, not because the constant capital rises but because the variable capital rises and accordingly the surplus-value falls (for only the value [of the variable capital] rises, although it sets in motion the same number of workers as before. or perhaps even a smaller number). If both fall, then the rate of profit rises, not because constant capital falls, but because the variable falls (in terms of value) and therefore the surplus-value increases. C. Change in the method of production and change in the value of the elements that form constant or variable capital. Here one change may neutralise the other, for example, when the amount of constant capital grows while its value falls or remains the same (i.e., it falls pro tanto, per 100) or when its amount falls but its value rises in the same proportion or remains the same (i.e., it rises pro tanto). In this case there would be no change at all in the organic composition. The rate of profit would remain unchanged. But it can never happen except in the case of agricultural capital that the amount of the constant capital falls as compared with the variable capital, while its value rises. This type of nullification cannot possibly apply to variable capital (while the real wage remains unchanged). Except for this one case, it is therefore only possible for the value and amount of the constant capital to fall or rise simultaneously in relation to the variable capital, its value therefore rises or falls absolutely as compared with the variable capital. This case has already been considered. Or they may fall or rise simultaneously ||641| but in unequal proportion. On the assumption made, this possibility always reduces itself to the case in which the value of the constant capital rises or falls relatively to the variable. This also includes the other case. For if the amount of the constant capital rises, then the amount of the variable capital falls relatively, and vice versa. Similarly with the value. |641|| |642| In regard to case C, [page], 640, it should also be noted: It would be possible for the wages to rise but for constant capital to fall in terms of value, not in physical terms. If the rise and fall were proportional on both sides, the rate of profit could remain unchanged. For instance, if the constant capital were 60, wages 40 and the rate of surplus-value 50 per cent, then the product would be 120. The rate of profit would be 20 per cent. If the constant capital fell to 40, although its volume [in physical terms] remained unchanged, and wages rose to 60, while the surplus-value fell from 50 per cent to 33 1/3 per cent, then the product would be 120 and the rate of profit 20 per cent. This is wrong. According to the assumption, the total value of the quantity of labour employed is 60. Hence, if the wage rose to 60, surplus-value and therefore the rate of profit would be nil, But if it did not rise to such an extent, then any rise in the wage would bring about a fall in the surplus-value. If wages rose to 50, then the surplus-value would be 10, if [they rose] to 45, then [the surplus-value would be] 15, etc. Under all circumstances, therefore, the surplus-value and the rate of profit would fall to the same degree. For we are measuring the unchanged total capital here. While the magnitude of the capital (the total capital) remains the same the rate of profit must always rise and fall, not with the rate of surplus-value but with the absolute amount of surplus-value. But if, in the above example, the flax fell so low that the amount which the same number of workers were spinning could be bought for 40, then we would have the following: The rate of profit would have fallen below 20 per cent. But supposing: Supposing: According to the assumption, the fall in the value of the constant capital never completely counterbalances the rise in the value of the variable capital. On the assumption made, it can never entirely cancel it out, since for the rate of profit to be 20, 10 would have to be a fifth of the total capital advanced. But in the case in which the variable capital amounts to 50, this would only be possible when the constant capital is nil. Assume, on the other hand, that variable capital rose only to 45; in this case the surplus-value would be 15. And, say, the constant capital fell In this case the two movements cancel each other out entirely. ||643| Assume further: Even with the fall in the surplus-value, therefore, the rate of profit could rise in this case, because of the proportionately greater fall in the value of the constant capital. More workers could be employed with the same capital of 100, despite the rise in wages and the fall in the rate of surplus-value. Despite the fall in the rate of surplus-value, the amount of surplus-value, and hence the profit, would increase, because the number of workers had increased, For the above ratio of 20c + 45v gives us the following proportions with a capital outlay of 100: The relation between the rate of surplus-value and the number of workers becomes very important here. Ricardo never considers it. |643|| ||641| It is clear that what has been regarded here as a variation within the organic composition of one capital, can apply equally to the difference in the organic composition between different capitals, capitals in different spheres of production. Firstly: Instead of a variation in the organic composition of one capital a difference in the organic composition of different capitals. Secondly: Alteration in the organic composition through a change in value in the two parts of one capital, similarly a difference in the value of the raw materials and machinery employed by different capitals. This does not apply to variable capital, since equal wages in the different branches of production are assumed. The difference in the value of different days of labour in different spheres has nothing to do with it. If the labour of a goldsmith is dearer than that of a labourer, then the surplus-time of the goldsmith is proportionately dearer than that of the labourer. |641|| ||641| In Chapter XV Taxes on Profits Ricardo says: Taxes on consumers are at the same time taxes on producers, in so far as the object taxed enters not only into individual consumption but also into industrial consumption, or only into the latter. This does not, however, apply only to the necessaries consumed by workmen. It applies to all materials industrially consumed by the capitalist. Every tax of this kind reduces the rate of profit, because it raises the value of the constant capital in relation to the variable. For example, a tax imposed on flax or wool. ||642| The flax rises in price. The flax spinner can therefore no longer purchase the same quantity of flax with a capital of 100. Since the method of production has remained the same, he needs the same number of workers to spin the same quantity of flax. But the flax has a greater value than before, in relation to the capital laid out in wages. The rate of profit therefore falls. It does not help him at all that the price of linen-yarn rises. The absolute level of this price is in fact immaterial to him. What matters is only the excess of this price over the price of the capital advanced. If he wanted to raise [the price of] the total product, not only by [the amount necessary to cover the increase in] the price of the flax, but to such an extent that the same quantity of yarn would yield him the same profit as before, then the demand which is already falling as a result of the rising price of the raw material of the yarn would fall still further because of the artificial rise due to the higher profit. Although the average rate of profit is given, it is not possible in such cases to raise the price in this way. |642|| ||643| [In] Chapter XV Taxes on Profits Ricardo says: The error lies in this final and prices and value . This change of prices would only show just as in the case of capital containing different proportions of fixed and circulating capital that the establishment of the general rate of profit requires that the prices or cost-prices which are determined and regulated by that general rate of profit [are] very different from the values of the commodities. And this most important aspect of the question does not exist for Ricardo at all. In the same chapter he says: And so this equilibrium of profits is after all brought about by the relative values, the real values of the commodities being altered, and so adjusted that they correspond, not to their real value, but to the average profit which they must yield. In Chapter XVII: Taxes on other Commodities than Raw Produce , Ricardo says: This is by no means evident. What Buchanan bases his argument on is not that all corn yields a rent, but that all corn which yields a rent is sold at a monopoly price, and that monopoly price in the sense in which Adam Smith explains it and it has the same meaning with Ricardo is the very highest price at which the consumers are willing to purchase it .[b] But this is wrong. Corn which yields a rent (apart from differential rent) is not sold at a monopoly price in Buchanan s sense. It is sold at a monopoly price, only in so far as it is sold above its cost-price and at its value. Its price is determined by the one quantity of labour embodied in it, not by the cost of producing it, and the rent is the excess of the value over the cost-price, it is therefore determined by the latter. The smaller is the cost-price relatively to the value, the greater will be the rent, and the greater the cost-price in relation to the Value, the smaller the rent. All improvements lower the value of the corn because [they reduce] the quantity of labour required for its production. Whether they reduce the rent, depends on various circumstances. If the corn becomes cheaper, and if wages are thereby reduced, then the rate of surplus-value rises. Furthermore, the farmer s expenses in seeds, fodder, etc., would fall. And therewith the rate of profit in all other, non-agricultural, branches of production would rise, hence also in agriculture. The relative amounts of immediate and accumulated labour would remain unchanged in the non-agricultural spheres of production; the number of workers (in relation to constant capital) would remain the same, but the value of the variable capital [would] fall, the surplus-value ||645| would therefore rise, and also the rate of profit. Consequently [they would] also rise in agriculture. Rent falls here because the rate of profit rises. Corn becomes cheaper, but its cost-price rises. Hence the difference between its value and its cost-price falls. According to our assumption the ratio for the average non-agricultural capital was 80c+ 20v, the rate of surplus-value 50 per cent, hence surplus-value 10 and the rate of profit 10 per cent. The value of the product of the average capital of 100 was therefore 110. If one assumes, that as a result of the lowering of the price of grain, wages fell by one-quarter, then the same number of workers employed on a constant capital of 80, that is on the same amount of raw material and machinery, would now cost only 15. And the same amount of commodities would be worth 80c+ 15v+ 15s, since, according to the assumption, the quantity of labour which they perform equals 30. Thus the value of the same amount of commodities is 110, as before. But the capital advanced would now amount only to 95 and [the rate of profit], 15 on 95, would be 15 15/19 per cent. If, however, the same amount of capital were laid out, that is 100, then the ratio would be: 84 4/19c+ 15 15/19v. The profit, however, would be 15 15/19. And the value of the product would amount to 115 15/19. According to the assumption, however, the agricultural capital was 60c+ 40v and the value of its product was 120. Rent was 10, while the cost-price was 110. Now the rent would only be 4 4/19. For 115 15/19+ 4 4/19= 120. We see here that the average capital of 100 produces commodities at a cost-price of 115 15/19 instead of the previous 110. Has this caused the average price of the commodity to rise? Its value has remained the same, since the same amount of labour is required to transform the same amount of raw material and machinery into product. But the same capital of 100 sets in motion more labour, and while previously it transformed 80, now it transforms 84 4/19 constant capital into product. A greater proportion of this labour is, however, now unpaid. Hence there is an increase in profit and in the total value of the commodities produced by [a capital of] 100. The value of the individual commodity has remained the same, but more commodities at the same value are being produced with a capital of 100. What is however the position of the cost-price in the individual branches of production? Let us assume that the non-agricultural capital consisted of the following capitals: For II the difference is -10, for III and IV [taken together] +10. For the whole capital of 400, it is 0-10+10=0. If the product of the capital of 400 is sold at 440, then the commodities produced by it are sold at their value. This yields [a profit of] 10 per cent. But in case II, the commodities are sold at 10 below their value, in case III at 2 1/2 above their value and in case IV at 7 1/2 above their value. Only in case I are they sold at their value if they are sold at their cost-price, i.e., 100 capital + 10 profit. ||646| But what would be the situation as a result of the fall in wages by one-quarter? For capital I: Instead of 80c+ 20v, [the outlay is] now 84 4/19c+15 15/19v, profit 15 15/19, value of the product 115 15/19. For capital II: Now only 30 laid out in wages, since 1/4 of 40=10 and 40-10=30. The product is 60c+ 30v and the surplus-value 30. (For the value of the labour applied is 60.) [30 surplus-value] on a capital of 90 equals 331/3 per cent. For a [capital of] 100 the ratio is: 662/3c+ 331/3v and the value [of the product] is 1331/3. The rate of profit is 331/3. For capital III: Now only 11 1/4 [laid out] in wages, for 1/4 of 15=3 3/4 and 15-3 3/4=11 1/4. The product would be 85c+ 111/4v and surplus-value 11 1/4. (Value of labour applied is 22 1/2.) [11 1/4] on a capital of 96 1/4. This amounts to 11 53/77 per cent. For 100 the ratio is 88 24/77c+11 53/77v. The rate of profit is 11 53/77 and [the value of the] product 111 53/77. For capital IV: Now only 3 3/4 laid out in wages, for 1/4 of 5=1 1/4 and 5-11/4=3 3/4. The product is 95c+ 33/4v and the surplus-value 3 3/4 (for the value of the total labour is 7 1/2). [3 3/4] on a capital of 98 3/4. This amounts to 3 63/79 per cent. For 100 the ratio is: 96 16/79c+3 63/79v. The rate of profit is 3 63/79. The value [of the product] is 103 63/79. We would therefore have the following: This makes 16 per cent. More exactly, a little more than l6 1/7 per cent. The calculation is not quite correct because we have disregarded, not taken into account a fraction of the average profit; this makes the negative difference in II appear a little too large and [the positive] in 1,111, IV a little too small. But it can be seen that otherwise the positive and negative differences would cancel out; further, it can be seen that on the one hand the sale of II below its value and of III and particularly of IV above their value would increase considerably. True, the addition to or reduction of the price would not be so great for the individual product as might appear here, since in all four categories more labour is employed and hence more constant capital (raw materials and machinery) is transformed into product. The increase or reduction in price would thus be spread over a larger volume of commodities. Nevertheless it would still be considerable. It is thus evident that a fall in wages would cause a rise in the cost-prices of I, III, IV, in fact a very considerable rise in the cost-price of IV. It is the same law as that developed by Ricardo in relation to the difference between circulating and fixed capital, but he did not by any means prove, nor could he have proved, that this is reconcilable with the law of value and that the value of the products remains the same for the total capital. ||647| The calculation and the adjustment becomes much more complicated if we take into account those differences in the organic composition of the capital which arise from the circulation process. For in our calculation, above, we assumed that the whole of the constant capital which has been advanced, enters into the product, i.e., that it contains only the wear and tear of the fixed capital, for one year, for example (since we have to calculate the profit for the year). The va1ues of the total product would otherwise be very different, whereas here they only change with the variable capital. Secondly, with a constant rate of surplus-value but varying periods of circulation, there would be greater differences in the amount of surplus-value created, relatively to the capital advanced. Leaving out of account any differences in variable capital, the amounts of the surplus-values would be proportionate to the amounts of the va1ues created by the same capitals. The rate of profit would be even lower where a relatively large part of the constant capital consisted of fixed capital and considerably higher, where a relatively large part of the capital consisted of circulating capital. It would be highest where the variable capital was relatively large as compared with the constant capital and where the fixed portion of the latter was at the same time relatively small. If the ratio of circulating to fixed capital in the constant capital were the same in the different capitals, then the only determining factor would be the difference between variable and constant capital. If the ratio of variable to constant capital were the same, then it would be the difference between fixed and circulating capital, that is, only the difference within the constant capital itself. As we have seen above, the farmer s rate of profit would rise, in any case, if, as a result of the lower price of corn, the general rate of profit of the non-agricultural capital increased. The question is whether his rate of profit would rise directly, and this appears to depend on the nature of the improvements. If the improvements were of such a kind that the capital laid out in wages decreased considerably compared with that laid out in machinery, etc., then his rate of profit need not necessarily rise directly. If, for example, it was such that he required one-quarter less workers, then instead of his original outlay of 40 in wages, he would now pay only 30. Thus his capital would be 60c+ 30v, or on 100 it would be 66 2/3c+ 33 1/3v. And since the labour costing 40 [provides a surplus-value of] 20, the labour costing 30 provides 15. And 16 2/3 [surplus-value is derived] from the labour costing 33 1/3. Thus the organic composition would approach that of the non-agricultural capital. And in the above case, with a simultaneous decrease in wages by one-quarter, it would fall even below that of the non-agricultural capital. In this case, rent (absolute rent) would disappear. Following upon the above-quoted passage on Buchanan, Ricardo says: Since absolute rent is equal to the excess of the value of the agricultural product over its price of production, it is clear that all factors which reduce the total quantity of labour required in the production of corn, etc., reduce the rent, because they reduce the value, hence the excess of the value over the price of production. In so far as the price of production consists of expenses, its fall is identical and goes hand in hand with the fall in value. But in so far as the price of production (or the expenses) is equal to the capital advanced plus the average profit, the very reverse is the case. The market-value of the product falls, but that part of it, which is equal to the price of production, rises, if the general rate of profit rises as a result of the fall in the market-value of corn. The rent, therefore, falls, because the expenses in this sense rise and this is how Ricardo takes expenses elsewhere, when he speaks of cost of production. Improvements in agriculture, which bring about an increase in constant capital as compared with variable, would reduce rent considerably, even if the total quantity of labour employed fell only slightly, or so slightly that it did not influence wages (surplus-value, directly) at all. Suppose, as a result of such improvements, the composition of the capital altered from 60c+ 40v to 662/3c+ 331/3v (this might occur, for example, as a result of rising wages, caused by emigration, war, discovery of new markets, prosperity in the non-agricultural industry [or it could occur as a result of the] competition of foreign corn, the farmer might feel impelled to find means of employing more constant capital and less variable; the same circumstances could continue to operate after the introduction of the improvement and wages therefore might not fall despite the improvement). ||648| Then the value of the agricultural product would be reduced from 120 to 116 2/3, that is, by 3 1/3. The rate of profit would continue to be 10 per cent. The rent would fall from 10 to 6 2/3 and, moreover, this reduction would have taken place without any reduction whatsoever in wages. The absolute rent may rise because the general rate of profit falls, owing to new advances in industry. The rate of profit may fall due to a rise in rent, because of an increase in the value of agricultural produce which is accompanied by an increase in the difference between its value and its cost-price. (At the same time, the rate of profit falls because wages rise.) The absolute rent can fall, because the value of agricultural produce falls and the general rate of profit rises. It can fall, because the value of the agricultural produce falls as a result of a fundamental change in the organic composition of capital, without the rate of profit rising. It can disappear completely, as soon as the value of the agricultural produce becomes equal to the cost-price, in other words when the agricultural capital has the same composition as the non-agricultural, average capital. Ricardo s proposition would only be correct if expressed like this : When the value of agricultural produce equals its cost-price, then there is no absolute rent. But he is wrong because he says: There is no absolute rent because value and cost-price are altogether identical, both in industry and in agriculture.* On the contrary, agriculture would belong to an exceptional class of industry, if its value and cost-price were identical. Even when admitting that there may be no portion of land which does not pay a rent, Ricardo believes that by referring to the fact that at least some portion of the capital employed on this land pays no rent he substantially improves his case. The one fact is as irrelevant to the theory as the other. The real question is this: Do the products of these lands or of this capital regulate the market-value? Or must they not rather sell their products below their value, because their additional supply is only saleable at, not above, this market-value which is regulated without them. So far as the portion of capital is concerned, the matter is simple, because for the farmer who invests an additional amount of capital landed property does not exist and as a capitalist he is only concerned with the cost-price; if he possesses the additional capital, it is more advantageous for him to invest it on his farm, even below the average profit, than to lend it out and to receive only interest and no profit. So far as the land is concerned, those portions of land which do not pay a rent form component parts of estates that pay rent and are not separable from the estates with which they are let; they cannot however be let in isolation from the rest to a capitalist farmer (but perhaps to a cottager or to a small capitalist). In relation to these bits of land, the farmer is again not confronted by landed property . Alternatively, the owner of the land must cultivate it himself. The farmer cannot pay a rent for it and the landlord does not let it for nothing, unless he wants to have his land made arable in this fashion without incurring any expense. The situation would be different in a country in which the composition of the agricultural capital was equal to the average composition of the non-agricultural capital, which presupposes a high level of development in agriculture or a low level of development in industry. In this case the value of the agricultural produce would be equal to its cost-price. Only differential rent could be paid then. The land which yields no differential rent but only an agricultural rent, could then pay no rent. For if the farmer sells the agricultural produce at its value, it only covers its cost-price. He therefore pays no rent. The landowner must then cultivate the land himself, or the so-called rent collected by him is a part of his tenant s profit or even of his wages. That this might be the case in one country does not mean that the opposite might not happen in another country. Where, however, industry and therefore capitalist production is at a low level of development, there are no capitalist farmers, whose existence would presuppose capitalist production on the land. Thus, quite different circumstances have to be considered here, from those involved in the economic organisation in which landed property as an economic category exists only in the form of rent. In the same Chapter XVII, Ricardo says: This assertion, that every portion of capital is employed with the same results and that none pays rent (which is, however, called excess profit here) is not only wrong, but has been refuted by Ricardo himself ||650| as we have seen previously. We now come to the presentation of Ricardo s theory of surplus-value. Ricardo opens Chapter I, On Value , with the following heading of Section I: In the style which runs through the whole of his enquiry, Ricardo begins his book here by stating that the determination of the value of commodities by labour-time is not incompatible with wages, in other words with the varying compensation paid for that labour-time or that quantity of labour. From the very outset, he turns against Adam Smith s confusion between the determination of the value of commodities by the relative quantity of labour required for their production and the value of labour (or the compensation paid for labour). It is clear that the proportional quantity of labour contained in two commodities A and B, is absolutely unaffected by whether the workers who produce A and B receive much or little of the product of their labour. The value of A and B is determined by the quantity of labour which their production costs, and not by the costs of labour to the owners of A and B. Quantity of labour and value of labour are two different things. The quantity of labour which is contained in A and B respectively, has nothing to do with how much of the labour contained in A and B the owners of A and B, have paid or even performed themselves. A and B are exchanged not in proportion to the paid labour contained in them, but in proportion to the total quantity of labour they contain, paid and unpaid. Adam Smith nowhere asserts that these were two equivalent expressions . On the contrary, he says: Because in capitalist production, the wage of the worker is no longer equal to his product, therefore, the quantity of labour which a commodity costs and the quantity of commodities that the worker can purchase with this labour are two different things for this very reason the relative quantity of labour contained in commodities ceases to determine their value, which is now determined rather by the value of labour, by the quantity of labour that I can purchase, or command with a given amount of commodities. Thus the value of labour, instead of the relative quantity of labour becomes the measure of value. Ricardo s reply to Adam Smith is correct that the relative quantity of labour which is contained in two commodities is in no way affected by how much of this quantity of labour falls to the workers themselves and by the way this labour is remunerated; if the relative quantity of labour was the measure of value of commodities before the supervention of wages (wages that differ from the value of the products themselves), there is therefore no reason at all, why it should not continue to be so after wages have come into being. He argues correctly, that Adam Smith could use both expressions so long as they were equivalent, but that this is no reason for using the wrong expression instead of the right one when they have ceased to be equivalent. But Ricardo has by no means thereby solved the problem which is the real cause of Adam Smith s contradiction. Value of labour and quantity of labour remain equivalent expressions , so long as it is a question of materialised labour. ||651| They cease to be equivalents as soon as materialised labour is exchanged for living labour. Two commodities exchange in proportion to the labour materialised in them. Equal quantities of materialised labour are exchanged for one another. Labour-time is their standard measure, but precisely for this reason they are more or less valuable, in proportion as they will exchange for more or less of this standard measure [l.c., p. 5]. If the commodity A contains one working-day, then it will exchange against any quantity of commodities which likewise contains one working-day and it is more or less valuable in proportion as it exchanges for more or less materialised labour in other commodities, since this exchange relationship expresses, is identical with, the relative quantity of labour which it itself contains. Now wage-labour, however, is a commodity. It is even the basis on which the production of products as commodities takes place. The law of values is not applicable to it. Capitalist production therefore is not governed at all by this law. Therein lies a contradiction. This is the first of Adam Smith s problems. The second which we shall find further amplified by Malthus lies in the fact that the utilisation of a commodity (as capital) is proportional not to the amount of labour it contains, but to the extent to which it commands the labour of others, gives power over more labour of others than it itself contains. This is in fact a second latent reason for asserting that since the beginning of capitalist production, the value of commodities is determined not by the labour they contain but by the living labour which they command, in other words, by the value of labour. Ricardo simply answers that this is how matters are in capitalist production. Not only does he fail to solve the problem; he does not even realise its existence in Adam Smith s work. In conformity with the whole arrangement of his investigation, Ricardo is satisfied with demonstrating that the changing value of labour in short, wages does not invalidate the determination of the value of the commodities, which are distinct from labour itself, by the relative quantity of labour contained in them. They are not equal , that is the quantity of labour bestowed on a commodity, and the quantity of labour which that commodity would purchase (l.c., p.5). He contents himself with stating this fact. But how does the commodity labour differ from other commodities? One is living labour and the other materialised labour. They are, therefore, only two different forms of labour. Since the difference is only a matter of form, why should a law apply to one and not to the other? Ricardo does not answer he does not even raise this question. Nor does it help when he says: That the price of labour, like that of other commodities, changes with supply and demand proves nothing in regard to the value of labour, according to Ricardo, just as this change of price with supply and demand proves nothing in regard to the value of other commodities. But that the wages of labour which is only another expression for the value of labour are affected by the varying price of food and other necessaries, on which the wages of labour are expended , shows just as little why the value of labour is (or appears to be) determined differently from the value of other commodities. For these too are affected by the varying price of other commodities which enter into their production and against which they are exchanged. That the wages of labour are spent upon food and necessaries, means after all only that the value of labour is exchanged against food and necessaries. The question is just why labour and the commodities against which it is exchanged, do not exchange according to the law of value, i.e., according to the relative quantities of labour. Posed in this way, presupposing the law of value, the question is intrinsically insoluble, because labour as such is counterposed to commodity, a definite quantity of immediate labour as such is counterposed to a definite quantity of materialised labour. This weakness in Ricardo s discourse, as we shall see later, has contributed to the disintegration of his school, and led to the proposition of absurd hypotheses. ||652| Wakefield is right when he says: This is also one of Bailey s hobby-horses; to be looked up later. Also Say, who is very pleased to find that here, all of a sudden, supply and demand are said to be the decisive factors. |652|| ||652| Re 1. Another point to be noted here: Chapter I, Section 3, bears the following superscription: Thus the value of a commodity is equally determined by the quantity of materialised (past) labour and by the quantity of living (immediate) labour required for its production. In other words: the quantities of labour are in no way affected by the formal difference of whether the labour is materialised or living, past or present (immediate). If this difference is of no significance in the determination of the value of commodities, why does it assume such decisive importance when past labour (capital) is exchanged against living labour? Why should it, in this case, invalidate the law of value, since the difference in itself, as shown in the case of commodities, has no effect on the determination of value? Ricardo does not answer this question, he does not even raise it. |652|| ||652| In order to determine surplus-value, Ricardo, like the Physiocrats, Adam Smith, etc., must first determine the value of labour-power or, as he puts it following Adam Smith and his predecessors the value of labour. |652|| ||652| How then is the value or natural price of labour determined? According to Ricardo, the natural price is in fact nothing but the monetary expression of value. The value of labour is therefore determined by the means of subsistence which, in a given society, are traditionally necessary for the maintenance and reproduction of the labourers. But why? By what law is the value of labour determined in this way? Ricardo has in fact no answer, other than that the law of supply and demand reduces the average price of labour to the means of subsistence that are necessary (physically or socially necessary in a given society) for the maintenance of the labourer. ||653| He determines value here, in one of the basic propositions of the whole system, by demand and supply as Say notes with malicious pleasure (see Constancio s translation). Instead of labour, Ricardo should have discussed labour-power. But had he done so, capital would also have been revealed as the material conditions of labour, confronting the labourer as power that had acquired an independent existence and capital would at once have been revealed as a definite social relationship. Ricardo thus only distinguishes capital as accumulated labour from immediate labour . And it is something purely physical, only an element in the labour-process, from which the relation between labour and capital, wages and profits, could never be developed. The jump which Ricardo makes here is correctly sensed by Bailey: Literally the objection raised here is correct. Ricardo distinguishes between nominal and real wages. Nominal wages are wages expressed in money, money wages. As wages are equal to the necessary means of subsistence of the labourer, and the value of these wages (the real wages) is equal to the value of these means of subsistence, it is obvious that the value of these necessary means of subsistence is also equal to the real wages, that is, to the labour which they can command. If the value of the means of subsistence changes, then the value of the real wages changes. Assume that the means of subsistence of the labourer consist only of corn, and that the quantity of means of subsistence which he requires is 1 quarter of corn per month. Then the value of his wages [for one month] equals the value of 1 quarter of corn; if the value of the quarter of corn rises or falls, then the value of the month s labour rises or falls. But however much the value of the quarter of corn rises or falls (however much or little labour the quarter of corn contains), it is always equal to the value of one month s labour. And here we have the hidden reason for Adam Smith s assertion, that as soon as capital, and consequently wage-labour, intervenes, the value of the product is not regulated by the quantity of labour bestowed upon it, but by the quantity of labour it an command. The value of corn (and of other means of subsistence) determined by labour-time, changes; but, so long as the natural price of labour is paid, the quantity of labour that the quarter of corn can command remains the same. Labour has therefore, a permanent relative value as compared with corn. That is why for Smith too, the value of labour and the value of corn ([representing] food [in general]. See Deacon Hume) are standard measures of value, because so long as the natural price of labour is paid, a given quantity of corn always commands [the same] quantity of labour, whatever the quantity of labour bestowed upon one quarter of corn may be. The same quantity of labour always commands the same use-value, or rather the same use-value always commands the same quantity of labour. Even Ricardo determines the value of labour, its natural price, in this way. Ricardo says: The quarter of corn may have very different values, although it always commands or is commanded by the same ||654| quantity of labour. Yes, says Adam Smith: However much the value of the quarter of corn, determined by labour-time, may change, the worker must always pay (sacrifice) the same quantity of labour in order to buy it. The value of corn therefore alters, but the value of labour does not, since one month s labour equals one quarter of corn. The value of the corn too changes only in so far as we are considering the labour required for its production. If, on the other hand, we examine the quantity of labour against which it exchanges, which it sets into motion, its value does not change. And that is precisely why the quantity of labour, against which a quarter of corn is exchanged, is the standard measure of value. But the va1ues of the other commodities have the same relation to labour as they have to corn. A given quantity of corn commands a given quantity of labour. A given quantity of every other commodity commands a certain quantity of corn. Hence every other commodity or rather the value of every other commodity is expressed by the quantity of labour it commands, since it is expressed by the quantity of corn it commands, and the latter is expressed by the quantity of labour it commands. But how is the value of other commodities in relation to corn (means of subsistence) determined? By the quantity of labour they command. And how is the quantity of labour they command determined? By the quantity of corn that labour commands. Here Adam Smith is inevitably caught up in a vicious circle. (Incidentally, he never uses this measure of value when making an actual analysis.) Moreover here he confuses as Ricardo also often does labour, the intrinsic measure of value, with money, the external measure, which presupposes that value is already determined; although he and Ricardo have declared that labour is the foundation of the value of commodities while the comparative quantity of labour which is necessary to their production is the rule which determines the respective quantities of goods which shall be given in exchange for each other (Ricardo, l.c., p.80). Adam Smith errs when he concludes from the fact that a definite quantity of labour is exchangeable for a definite quantity of use-value, that this definite quantity of labour is the measure of value and that it always has the same value, whereas the same quantity of use-value can represent very different exchange-values. But Ricardo errs twice over; firstly because he does not understand the problem which causes Adam Smith s errors; secondly because disregarding the law of value of commodities and taking refuge in the law of supply and demand, he himself determines the value of labour, not by the quantity of labour expended in the production of labour-power, but by the quantity of labour expended in the production of the wages which the labourer receives. Thus in fact he says: The value of labour is determined by the value of the money which is paid for it! And what determines this? What determines the amount of money that is paid for it? The quantity of use-value that a given amount of labour commands or the quantity of labour that a definite quantity of use-value commands. And thereby he falls literally into the very inconsistency which he himself condemned in Smith. This, as we have seen, also prevents him from grasping the specific distinction between commodity and capital, between the exchange of commodity for commodity and the exchange of capital for commodity in accordance with the law of exchange of commodities. The above example was this: 1 quarter of corn equals 1 month s labour, say 30 working-days. (A working-day of 12 hours.) In this case the value of 1 quarter corn is less than 30 working-days. If 1 quarter corn were the product of 30 working-days, the value of the labour would be equal to its product. There would be no surplus-value, and therefore no profit. No capital. In actual fact, therefore, if 1 quarter corn represents the wages for 30 working-days, the value of 1 quarter corn is always less than 30 working-days. The surplus-value depends on how much less it is. For example, 1 quarter corn may be equal to 25 working-days. Then the surplus-value equals 5 working-days, which is 1/6 of the total labour-time. If 1 quarter (8 bushels) equals 25 working-days, then 30 working-days are equal to 1 quarter 1 3/5 bushels. The value of the 30 working-days (i.e., the wage) is therefore always smaller than the value of the product which contains the labour of 30 days. The value of the corn is thus determined not by the ||655| labour which it commands, for which it exchanges, but by the labour which is contained in it. On the other hand, the value of the 30 days labour is always determined by 1 quarter corn, whatever this may be. Apart from the confusion between labour and labour-power, Ricardo defines the average wages or the value of labour correctly. For he says that it [the value of labour] is determined neither by the money nor by the means of subsistence which the labourer receives, but by the labour-time which it costs to produce it; that is, by the quantity of labour materialised in the means of subsistence of the labourer. This he calls the real wages. (See later.) This definition [of the value of labour], moreover, necessarily follows from his theory. Since the value of labour is determined by the value of the necessary means of subsistence on which this value is to be expended, and the value of the means of subsistence, like that of all other commodities, is determined by the quantity of labour they contain, it naturally follows that the value of labour equals the value of the means of subsistence, which equals the quantity of labour expended upon them. However correct this formula is (apart from the direct opposition of labour and capital), it is, nevertheless, inadequate. Although in replacement of his wages the individual labourer does not directly produce or reproduce, taking into account the continuity of this process products on which he lives <he may produce products which do not enter into his consumption at all, and even if he produces necessary means of subsistence, he may, due to the division of labour, only produce a single part of the necessary means of subsistence, for instance corn and even that only in one form (for example in that of corn, not bread)>, but he produces commodities to the value of his means of subsistence, that is, he produces the value of his means of subsistence. This means, therefore, if we consider his daily average consumption, that the labour-time which is contained in his daily means of subsistence, forms one part of h i s working-day. He works one part of the day in order to reproduce the value of his means of subsistence; the commodities which he produces in this part of the working-day have the same value, or represent a quantity of labour-time equal to that contained in his daily means of subsistence. It depends on the value of these means of subsistence in other words on the social productivity of labour and not on the productivity of the individual branch of production in which he works how great a part of his working-day is devoted to the reproduction or production of the value, i.e., the equivalent, of his means of subsistence. Ricardo of course assumes that the labour-time contained in the daily means of subsistence is equal to the labour-time which the labourer must work daily in order to reproduce the value of these means of subsistence. But by not directly showing that one part of the labourer s working-day is assigned to the reproduction of the value of his own labour-power, he introduces a difficulty and obscures the clear understanding of the relationship. A twofold confusion arises from this. The origin of surplus-value does not become clear and consequently Ricardo is reproached by his successors for having failed to grasp and expound the nature of surplus-value. That is part of the reason for their scholastic attempts at explaining it. But because thus the origin and nature of surplus-value is not clearly comprehended, the surplus-labour plus the necessary labour, in short, the total working-day, is regarded as a fixed magnitude, the differences in the amount of surplus-value are overlooked, and the productivity of capital, the compulsion to perform surplus-labour on the one hand [to perform] absolute surplus-labour, and on the other its innate urge to shorten the necessary labour-time are not recognised, and therefore the historical justification for capital is not set forth. Adam Smith, however, had already stated the correct formula. Important as it was, to resolve value into labour, it was equally important to resolve surplus-value into surplus-labour, and to do so in explicit terms. Ricardo starts out from the actual fact of capitalist production. The value of labour is smaller than the value of the product which it creates. The value of the product is therefore greater than the value of the labour which produces it, or the value of the wages. The excess of the value of the product over the value of the wages is the surplus-value. (Ricardo wrongly uses the word profit, but, as we noted earlier, he identifies profit with surplus-value here and is really speaking of the latter.) For him it is a fact, that the value of the product is greater than the value of the wages. How this fact arises, remains unclear. The total working-day is greater than that part of the working-day which is required for the production of the wages. Why? That does not emerge. The magnitude of the total working-day is therefore wrongly assumed to be fixed, and directly entails wrong conclusions. The increase or decrease in surplus-value can therefore be explained only from the growing or diminishing productivity of social labour which produces the means of subsistence. That is to say, only relative surplus-value is understood. ||656| It is obvious that if the labourer needed his whole day to produce his own means of subsistence (i.e., commodities equal to the value of his own means of subsistence), there could be no surplus-value, and therefore no capitalist production and no wage-labour. This can only exist when the productivity of social labour is sufficiently developed to make possible some sort of excess of the total working-day over the labour-time required for the reproduction of the wage i.e., surplus-labour, whatever its magnitude. But it is equally obvious, that with a given labour-time (a given length of the working-day) the productivity of labour [may be very different], on the other hand, with a given productivity of labour, the labour-time, the length of the working-day, may be very different. Furthermore, it is clear that though the existence of surplus-labour presupposes that the productivity of labour has reached a certain level, the mere possibility of this surplus-labour (i.e., the existence of that necessary minimum productivity of labour), does not in itself make it a reality. For this to occur, the labourer must first be compelled to work in excess of the [necessary] time, and this compulsion is exerted by capital. This is missing in Ricardo s work, and therefore also the whole struggle over the regulation of the normal working-day. At a low stage of development of the social productivity of labour, that is to say, where the surplus-labour is relatively small, the class of those who live on the labour of others will generally be small in relation to the number of labourers. It can considerably grow (proportionately) in the measure in which productivity and therefore relative surplus-value develop. It is moreover understood that the value of labour varies greatly in the same country at different periods and in different countries during the same period. The temperate zones are however the home of capitalist production. The social productive power of labour may be very undeveloped; yet this may be compensated precisely in the production of the means of subsistence, on the one hand, by the fertility of the natural agents, such as the land; on the other hand, by the limited requirements of the population, due to climate, etc. this is, for instance, the case in India. Where conditions are primitive, the minimum wage may be very small (quantitatively in use-values) because the social needs are not yet developed though it may cost much labour. But even if an average amount of labour were required to produce this minimum wage, the surplus-value created, although it would be high in proportion to the wage (to the necessary labour-time) , would, even with a high rate of surplus-value, be just as meagre (proportionately) when expressed in terms of use-values as the wage itself. Let the necessary labour-time be 10 hours, the surplus-labour 2 hours, and the total working-day 12 hours. If the necessary labour-time were 12 hours, the surplus-labour 2 2/5 hours and the total working-day 14 2/5 hours, then the values produced would be very different. In the first case they would amount to 12 hours, in the second to 14 2/5 hours. Similarly, the absolute magnitude of the surplus-value: In the former case it would be 2 hours, in the latter 2 2/5. And yet the rate of surplus-value or of surplus-labour would be the same, because 2:10=2 2/5:12. If, in the second case, the variable capital which is laid out were greater, then so also would be the surplus-value or surplus-labour appropriated by it. If in the latter case, the surplus-labour were to rise by 5/5 hours instead of by 2/5 hours, so that it would amount to 3 hours and the total working-day to 15 hours, then, although the necessary labour-time or the minimum wage had increased, the rate of surplus-value would have risen, for 2:10=1/5; but 3:l2=1/4. Both could occur if, as a result of the corn, etc., becoming dearer, the minimum wage had increased from 10 to 12 hours. Even in this case, therefore, not only might the rate of surplus-value remain the same, but the amount and rate of surplus-value might grow. But let us suppose that the necessary wage amounted to 10 hours, as previously, the surplus-labour to 2 hours and all other conditions remained the same (that is, leaving out of account here any lowering in the production costs of constant capital). Now let the labourer work 2 2/5 hours longer, and appropriate 2 hours, while the 2/5 forms surplus-labour. In this case wages and surplus-value would increase in equal proportion, the former, however, representing more than the necessary wage or the necessary labour-time. If one takes a given magnitude and divides it into two parts, it is clear that one part can only increase in so far as the other decreases, and vice versa, But this is by no means the case with expanding (elastic) magnitudes. And the working-day represents such an elastic magnitude, as long as no normal working-day has been won. With such magnitudes, both parts can grow, either to an equal or unequal extent. An increase in one is not brought about by a decrease in the other and vice versa. This is moreover the only case in which wages and surplus-value, in terms of exchange-value, can both increase and possibly even in equal proportions. That they can increase in terms of use-value is self-evident; this can increase ||657| even if, for example, the value of labour decreases. From 1797 to 1815, when the price of corn and [also] the nominal wage rose considerably in England, the daily hours of labour increased greatly in the principal industries, which were then in a phase of ruthless expansion; and I believe that this arrested the fall in the rate of profit, because it arrested the fall in the rate of surplus-value. In this case, however, whatever the circumstances, the normal working-day is lengthened and the normal span of life of the labourer, hence the normal duration of his labour-power, is correspondingly shortened. This applies where a permanent lengthening of the working-day occurs. If it is only temporary, in order to compensate for a temporary rise in wages, it may (except in the case of children and women) have no other result than to prevent a fall in the rate of profit in those enterprises where the nature of the work makes a prolongation of labour-time possible. (This is least possible in agriculture.) Ricardo did not consider this at all since he investigated neither the origin of surplus-value nor absolute surplus-value and therefore regarded the working-day as a given magnitude. For this case, therefore, his law that surplus-value and wages (he erroneously says profit and wages) in terms of exchange-value can rise or fall only in inverse proportion is incorrect. Firstly let us assume that the necessary labour-time and the surplus-labour remain constant. That is 10 hours +2 hours; the working-day equals 12 hours, surplus-value equals 2 hours; the rate of surplus-value is 1/5. [In the second example] the necessary labour-time remains the same; surplus-labour increases from 2 to 4 hours. Hence l0+4=a working-day of 14 hours; surplus-value equals 4 hours; rate of surplus-value is 4:10=4/10=2/5. In both cases the necessary labour-time is the same; but the surplus-value in the one case is twice as great as in the other and the working-day in the second case is one-sixth longer than in the first. Furthermore, although the wage is the same, the values produced, corresponding to the quantities of labour, would be very different; in the first case it would be equal to 12 hours, in the second to 12+12/6=14 hours. It is therefore wrong to say that, provided the wage is the same (in terms of value, of necessary labour-time), the surplus-value contained in two commodities is proportionate to the quantities of labour contained in them. This is only correct where the normal working-day is the same. Let us further assume that as a result of the rise in the productive power of labour, the necessary wage (although it remains constant in terms of use-values) falls from 10 to 9 hours and similarly that the surplus labour-time falls from 2 to 14/5 hours (9/5). In this case 10:9=2:14/5. Thus the surplus labour-time would fall in the same proportion as the necessary labour-time. The rate of surplus-value would be the same in both cases, for 2=10/5 and 14/5=9/5. 14/5:9=2:10. The quantity of use-values that could be bought with the surplus-value, would according to the assumption also remain the same. (But this would apply only to those use-values which are necessary means of subsistence.) The working-day would decrease from 12 to 10 4/5 [hours]. The amount of value produced in the second case would be smaller than that produced in the first. And despite these unequal quantities of labour, the rate of surplus-value would be the same in both cases. In discussing surplus-value we have distinguished between surplus-value and the rate of surplus-value, Considered in relation to one working-day, the surplus-value is equal to the absolute number of hours which it represents, 2, 3, etc. The rate is equal to the proportion of this number of hours to the number of hours which makes up the necessary labour-time. This distinction is very important, because it indicates the varying length of the working-day. If the surplus-value equals 2 hours, then [the rate] is 1/5, if the necessary labour-time is 10 hours; and 1/6, if the necessary labour-time is 12 hours. In the first case the working-day consists of 12 hours and in the second of 14. In the first case the rate of surplus-value is greater, while at the same time the labourer works a smaller number of hours per day. In the second case the rate of surplus-value is smaller, the value of the labour-power is greater, while at the same time the labourer works a greater number of hours per day. This shows that, with a constant surplus-value, but a working-day of unequal length, the rate of surplus-value may be different. The earlier case, 10:2 and 9:1 4/5, shows how with a constant rate of surplus-value, but a working-day of unequal length, the surplus-value itself may be different, in one case 2 hours and in the other 1 4/5 hours. I have shown previously (Chapter II), that if the length of the working-day and the necessary labour-time, and therefore the rate of surplus-value are given, the amount of surplus-value depends on the number of workers simultaneously employed by the same capital. This was a tautological statement. For if 1 working-day gives me 2 surplus hours, then 12 working-days give me 24 surplus hours or 2 surplus days. The statement, however, becomes very important in connection with the determination of profit, which is equal to the proportion of surplus-value to the capital advanced, thus depending on the absolute amount of surplus-value. It becomes important because capitals of equal size but different organic composition employ unequal numbers of labourers; they must thus produce unequal amounts of surplus-value, and therefore unequal profits. With a falling rate of surplus-value, the profit may rise and with a rising rate of surplus-value, the profit may fall; or the profit may remain unchanged, if a rise or fall in the rate of surplus-value is compensated by a counter movement affecting the number of workers employed. Here we see immediately, how extremely wrong it is ||658| to identify the laws relating to the rise and fall of surplus-value with the laws relating to the rise and fall of profit. If one merely considers the simple law of surplus-value, then it seems a tautology to say that with a given rate of surplus-value (and a given length of the working-day), the absolute amount of surplus-value depends on the amount of capital employed. For an increase in this amount of capital and an increase in the number of labourers simultaneously employed are, on the assumption made, identical, or merely [different] expressions of the same fact. But when one turns to an examination of profit, where the amount of the total capital employed and the number of workers employed vary greatly for capitals of equal size, then the importance of the law becomes clear. Ricardo starts by considering commodities of a given value, that is to say, commodities which represent a given quantity of labour. And from this starting-point, absolute and relative surplus-value appear to be always identical. (This at any rate explains the one-sidedness of his mode of procedure and corresponds with his whole method of investigation: to start with the value of the commodities as determined by the definite labour-time they contain, and then to examine to what extent this is affected by wages, profits, etc.) This appearance is nevertheless false, since it is not a question of commodities here, but of capitalist production, of commodities as products of capital. Assume that a capital employs a certain number of workers, for example 20, and that wages amount to 20. To simplify matters let us assume that the fixed capital is nil, i.e., we leave it out of account. Further, assume that these 20 workers spin 80 of cotton into yarn, if they work 12 hours per day. If 1 lb. of cotton costs is then 20lbs. cost 1 and 80 represents, 1,600 lbs. If 20 workers spin 1,600 lbs. in 12 hours, then they spin 1,600/12 lbs., which is 133 1/3 lbs. in one hour. Thus, if the necessary labour-time is 10 hours, then the surplus labour-time is 2 hours and this equals 266 2/3 lbs. yarn. The value of the 1,600 lbs. would be 104. For if 10 hours of work equal 20, then 1 hour of work equals 2 and 2 hours of work 4, hence 12 [hours of work] are equal to 24. ([Raw material] 80+ 24 [the newly-created value] are equal to 104.) But if each of the workers worked 4 hours of surplus-labour, then their product would be equal to 8 (I mean the surplus-value which he creates his product is in fact equal to 28.) The total product would be 121 1/3. And this 121 1/3 would be the equivalent of 1,866 2/3 lbs. of yarn. As before, since the conditions of production remained the same, 1 lb. of yarn would have the same value; it would contain the same amount of labour-time. Moreover, according to the assumption, the necessary wages their value, the labour-time they contained would have remained unchanged. Whether these 1,866 2/3 lbs. of yarn were being produced under the first set of conditions or under the second, i.e., with 2 or with 4 hours surplus-labour, they would have the same value in both cases. The value therefore of the additional 266 2/3 lbs. of cotton that are spun, is 13 1/3. This, added to the 80 for the 1,600 lbs., amounts to 93 1/3 and in both cases 4 working-hours more for 20 men amount to 8. Altogether 28 for the labour, that is 1211/3. The wages are, in both cases, the same. The pound of yarn costs in both cases 13/10 s. Since the value of the pound of cotton is 1s., what remained for the newly-added labour in 1 lb. of yarn would in both cases amount to 3/10 s., equal to 3 3/5d (or 18/5d.). Nevertheless, under the conditions assumed, the relation between value and surplus-value in each pound of yarn would be very different. In the first case, since the necessary labour was equal to 20 and the surplus-labour to 4, or since the former amounted to 10 hours and the latter to 2 hours, the ratio of surplus-labour to necessary labour would be 2:10=2/10=1/5. (Similarly 4: 20=4/20=1/5.) The 3 3/5d. [newly-added labour] in a pound of yarn would in this case contain 1/5 unpaid labour, that is 18/25 d. or 72/25 farthings equal to 2 22/25 farthings. In the second case, on the other hand, the necessary labour would be 20 (10 working-hours), the surplus-labour 8 (4 working-hours). The ratio of surplus-labour to necessary labour would be 8:20=8/20=4/10=2/5. Thus the 3 3/5 d, [of newly-added labour] in a pound of yarn would contain 2/5 unpaid labour, i.e., 5 19/25 farthings or 1 d. 1 19/25 farthings. ||659| Although the yarn has the same value in both cases and although the same wages are paid in both cases, the surplus-value in a pound of yarn is in one case twice as large as in the other. The ratio of value of labour to surplus-value is of course the same in the individual commodity, that is, in a portion of the product, as in the whole product. In the one case, the capital advanced is 93 1/3 for cotton, and how much for wages? The wages for 1,600 lbs. amount to 20 here, hence for the additional 266 2/3 lbs. a further 3 1/3. This makes 23 1/3. And the total capital outlay is 93 1/3+ 231/3= 116 2/3. The product comes to 121 1/3. (The additional outlay in [variable] capital, of 3 1/3, only yields 13 1/3s.[ 2/3] surplus-value. 20 : 4= 3 1/3+ 2/3). In the other case, however, the capital outlay would amount to only 93 1/9 + 20 = 113 1/3 and 4 would have to be added to the 4 surplus-value. The same number of pounds of yarn are produced in both cases and both have the same value, that is to say, they represent equal total quantities of labour, but these equal total qualities of labour are set in motion by capitals of unequal size, although the wages are the same; but the working-days are of unequal length and, therefore, unequal quantities of unpaid labour are produced. Taking the individual pound of yarn, the wages paid for it, or the amounts of paid labour a pound contains, are different. The same wages are spread over a larger volume of commodities here, not because labour is more productive in the one case than in the other, but because the total amount of unpaid labour which is set into motion in one case is greater than in the other. With the same quantity of paid labour, therefore, more pounds of yarn are produced in the one case than in the other, although in both cases the same quantities of yarn are produced, representing the same quantity of total labour (paid and unpaid). If, on the other hand, the productivity of labour had increased in the second case, then the value of the pound of yarn would at all events have fallen, whatever the ratio of surplus-value to variable capital. In such a case, therefore, it would be wrong to say that because the value of the pound of yarn is fixed at is, 3 3/5d., the value of the labour which is added is also fixed and amounts to 3 3/5 d., and the wages, i.e., the necessary labour-time, remain, according to the assumption, unchanged the surplus-value [must] be the same and the two capitals under otherwise equal conditions would have produced the yarn with equal profits. This would be correct if we were concerned with one pound of yarn, but we are in fact concerned here with a capital which has produced 1,866 2/3 lbs. yarn. And in order to know the amount of profit (actually of surplus-value) on one pound, we must know the length of the working-day, or the quantity of unpaid labour (when the productivity is given) that the capital sets in motion. But this information cannot be gathered by looking at the individual commodity. Thus Ricardo deals only with what I have called the relative surplus-value. From the outset he assumes, as Adam Smith and his predecessors seem to have done as well, that the length of the working-day is given. (At most, Adam Smith mentions differences in the length of the working-day in different branches of labour, which are levelled out or compensated by the relatively greater intensity of labour, difficulty, unpleasantness, etc.) On the basis of this postulate Ricardo, on the whole, explains relative surplus-value correctly. Before we give the principal points of his theory, we shall cite a few more passages to illustrate Ricardo s point of view. This means that the product of their daily labour will always be the product of a million working-days containing the same labour-time; this is wrong, or is only true where the same normal working-day taking into account the various difficulties etc. in different branches of labour has been generally established. Even then, however, the statement is wrong in the general form in which it is expressed here. If the normal working-day is 12 hours, and the annual product of one man is, in terms of money, 50 and the value of money remains unchanged, then, in this case, the product of 1 million men would always amount to 50 million per year. If the necessary labour is 6 hours, then the capital laid out for these million men would be 25,000,000 per annum. The surplus-value would also be 25 million. The product would always be 50 million, whether the workers received 25 or 30 or 40 million. But in the first case the surplus-value would be 25 million, in the second it would be 20 million and in the third 10 million. If the capital advanced consisted only of variable capital, i.e., only of the capital which is laid out in the wages of these 1 million men, then Ricardo would be right. He is, therefore, only right in the one case, where the total capital equals the variable capital; a presupposition which pervades all his, and Adam Smith s, ||660| observations regarding the capital of society as a whole, but in capitalist production this precondition does not exist in a single branch of industry, much less in the production of society as a whole. That part of the constant capital which enters into the labour-process without entering into the process of the creation of value. does not enter into the product, into the value of the product, and, therefore, important as it is in the determination of the general rate of profit, it does not concern us here, where we are considering the value of the annual product. But matters are quite different with that part of constant capital which enters into the annual product. We have seen that a portion of this part of constant capital, or what appears as constant capital in one sphere of production, appears as a direct product of labour within another sphere of production, during the same production period of one year; a large part of the capital laid out annually, which appears to be constant capital from the standpoint of the individual capitalist or the particular sphere of production, therefore, resolves itself into variable capital from the standpoint of society or of the capitalist class. This part is thus included in the 50 million, in that part of the 50 million which forms variable capital or is laid out in wages. But the position is different with that part of constant capital which is used up in order to replace the constant capital consumed in industry and agriculture with the consumed part of the constant capital employed in those branches of production which produce constant capital, raw material in its primary form, fixed capital and auxiliary materials. The value of this part reappears, it is reproduced in the product. In what proportion it enters into the value of the whole product depends entirely on its actual magnitude provided the productivity of labour does not change; but however the productivity may change, this part of the constant capital will always have a definite magnitude. (On the average, apart from certain exceptions in agriculture, the amount of the product, i.e., the riches which Ricardo distinguishes from the value produced by one million men will, indeed, also depend on the magnitude of this constant capital which is antecedent to production.) This part of the value of the product would not exist without the new labour of the million men during the year. On the other hand, the labour of the million men would not yield the same amount of product without this constant capital which exists independently of their year s labour. It enters into the labour-process as a condition of production but not a single additional hour is worked in order to reproduce the value of this part. As value it is, therefore, not the result of the year s labour, although its value would not have been reproduced without this year s labour. If the part of the constant capital which enters into the product were 25 million, then the value of the product of the one million men would be 75 million; if this part of the constant capital were 10 million, then the value of the product would only be 60 million, etc. And since the ratio of constant capital to variable capital increases in the course of capitalist development, the value of the annual product of a million men will tend to rise continuously, in proportion to the growth of the past labour which plays a part in their annual production. This alone shows that Ricardo was unable to understand either the essence of accumulation or the nature of profit. With the growth in the proportion of constant to variable capital, grows also the productivity of labour, the productive forces brought into being, with which social labour operates. As a result of this increasing productivity of labour, however, a part of the existing constant capital is continuously depreciated in value, for its value depends not on the labour-time that it cost originally, but on the labour-time with which it can be reproduced, and this is continuously diminishing as the productivity of labour grows. Although, therefore, the value of the constant capital does not increase in proportion to its amount, it increases nevertheless, because its amount increases even more rapidly than its value falls. But we shall return later to Ricardo s views on accumulation. It is evident, however, that if the length of the working-day is given, the value of the annual product of the labour of one million men will differ greatly according to the different amount of constant capital that enters into the product; and that, despite the growing productivity of labour, the value of this product will be greater where the constant capital forms a large part of the total capital, than under social conditions where it forms a relatively small part of the total capital. With the advance in the productivity of social labour, accompanied as it is by the growth of constant capital, a relatively ever increasing part of the annual product of labour will, therefore, fall to the share of capital as such, and thus property in the form of capital (apart from revenue) will be constantly increasing and proportionately that part of value which the individual worker and even the working class creates, will be steadily decreasing, ||661| compared with the product of their past labour that confronts them as capital. The alienation and the antagonism between labour-power and the objective conditions of labour which have become independent in the form of capital, thereby grow continuously. (Not taking into account the variable capital, i.e., that part of the product of the annual labour which is required for the reproduction of the working class; even these means of subsistence, however, confront them as capital.) Ricardo s view, that the working-day is given, limited, a fixed magnitude, is also expressed by him in other forms, for instance: in other words this only means that the (daily) labour-time whose product is divided between the wages of labour and the profits of stock, is always the same, is constant. I hardly need to repeat here that in these passages one should always read surplus-value instead of profit . The value of the means of subsistence which the worker obtains (buys with his wages), corn, clothes, etc., is determined by the total labour-time required for their production, the quantity of immediate labour as well as the quantity of materialised labour necessary for their production. But Ricardo confuses the issue because he does not state it plainly, he does not say: their real value, viz., that quantity of the working-day required to reproduce the value of their [the workers] own necessaries, the equivalent of the necessaries paid to them, or exchanged for their labour . Real wages have to be determined by the average time which the worker must work each day in order to produce or reproduce his own wages. This is in fact the only form of surplus-value which Ricardo analyses under the name of profit. [According to him:] The quantity of labour required for the production of a commodity, and contained in it, determines its value, which is thus a given factor, a definite amount. This amount is divided between wage-labourer and capitalist. (Ricardo, like Adam Smith, does not take constant capital into account here.) It is obvious that the share of one can only rise or fall in proportion to the fall or rise of the share of the other. Since the value of the commodities is due to the labour of the workers, labour is under all circumstances the precondition of value, but there can be no labour unless the worker lives and maintains himself, i.e., receives the necessary wages (the minimum wages wages is synonymous with the value of his labour-power). Wages and surplus-value these two categories into which the value of the commodity or the product itself is divided are therefore not only in inverse proportion to each other, but the primary, the determinant factor is the movement of wages. Their rise or fall causes the opposite movement on the part of profit (surplus-value). Wages do not rise or fall because profit (surplus-value) falls or rises, but on the contrary surplus-value (profit) falls or rises because wages rise or fall. The surplus-product (one should really say surplus-value) which remains after the working class has received its share of its own annual production forms the substance on which the capitalist class lives. Since the value of the commodities is determined by the quantity of labour contained in them, and since wages and surplus-value (profit) are only shares, proportions in which two classes of producers divide the value of the commodity between themselves, it is clear that a rise or fall in wages, although it determines the rate of surplus-value (profit), does not affect the value of the commodity or the price (as the monetary expression of the value of a commodity). The proportion in which a whole is divided between two shareholders makes the whole neither larger nor smaller. It is, therefore, an erroneous preconception to assume that a rise in wages raises the prices of commodities; it only makes profit (surplus-value) fall. Even the exceptions cited by Ricardo, where a rise in wages is supposed to make the exchange-values of some commodities fall and those of others rise, are wrong so far as value is concerned and only correct for cost-prices. ||662| Since the rate of surplus-value (profit) is determined by the relative height of wages, how is the latter determined? Apart from competition, by the price of the necessary means of subsistence. This, in turn, depends on the productivity of labour, which increases with the fertility of the land (Ricardo assumes capitalist production here). Every improvement reduces the prices of commodities, of the means of subsistence. Wages or the value of labour, thus rise and fall in inverse proportion to the development of the productive power of labour, in so far as the latter produces necessary means of subsistence which enter into the average consumption of the working class. The rate of surplus-value (profit) falls or rises, therefore, in direct proportion to the development of the productive power of labour, because this development reduces or raises wages. The rate of profit (surplus-value) cannot fall unless wages rise, and cannot rise unless wages fall. The value of wages has to be reckoned not according to the quantity of the means of subsistence received by the worker, but according to the quantity of labour which these means of subsistence cost (in fact the proportion of the working-day which he appropriates for himself), that is according to the relative share of the total product, or rather of the total value of this product, which the worker receives. It is possible that, reckoned in terms of use-values (quantity of commodities or money), his wages rise as productivity increases and yet the value of the wages may fall and vice versa. It is one of Ricardo s great merits that he examined relative or proportionate wages, and established them as a definite category. Up to this time, wages had always been regarded as something simple and consequently the worker was considered an animal. But here he is considered in his social relationships. The position of the classes to one another depends more on relative wages than on the absolute amount of wages. Now these propositions have to be substantiated by quotations from Ricardo. It can be seen that Ricardo derives the whole value of the commodity from the labour of the men employed. It is their own labour or the product of that labour or the value of this product, which is divided between them and capital. <It is only in this statement, which has now become a commonplace, that Ricardo expresses the nature of capital, though he may not be aware of it. It is not accumulated labour which is employed by the labouring class, by the labourers themselves, but the funds , accumulated labour , which employ this class , employ present, immediate labour.> <he has just said the very opposite; evidently he means never, unless the value of labour is diminished by the improvements mentioned) <but how is it advantageous to the labouring class? For Ricardo presupposes that if these commodities enter into the consumption of the wage-earner they reduce wages, and if these commodities become cheaper without reducing wages they are not commodities on which wages are expended>; <Again, how is this possible, since Ricardo presupposes that the reduction of wages which raises profits takes place precisely because the price of the necessaries has fallen and therefore by no means does every thing remain at its former price .> It is evident that this passage is rather loosely worded. But apart from this formal aspect, the statements are only true if one reads rate of surplus-value for rate of profit, and this applies to the whole of this investigation into relative surplus-value. Even in the case of luxury articles, such improvements can raise the general rate of profit, since the rate of profit in these spheres of production, as in all others, bears a share in the levelling out of all particular rates of profit into the average rate of profit. If in such cases, as a result of the above-mentioned influences, the value of the constant capital falls proportionately to the variable, or the period of turnover is reduced (i.e., a change takes place in the circulation process) , then the rate of profit rises. Furthermore, the influence of foreign trade is expounded in an entirely one-sided way. The development of the product into a commodity is fundamental to capitalist production and this is intrinsically bound up with the expansion of the market, the creation of the world market, and therefore foreign trade. Apart from this, Ricardo is right when he states that all improvements, be they brought about through the division of labour, improvements in machinery, the perfection of means of communication, foreign trade in short all measures that reduce the necessary labour-time involved in the manufacture or transport of commodities increase the surplus-value (hence profit) and thus enrich the capitalist class because, and in so far as, these improvements reduce the value of labour. Finally, in this section, we must quote a few passages in which Ricardo analyses the nature of relative wages. De Quincey points out the contrast between some of the propositions developed by Ricardo and those of the other economists. ||666| The same Dialogues contains the following passage about the law governing the measurement of value by the quantity of labour and by the value of labour: (If the organic composition of the capital in A and B were the same, then it could in fact be said that their relation to one another is proportionate to the values of the producing labour. For the accumulated labour in each would be in the same proportion as the immediate labour in each. The quantities of paid labour in each, however, would be proportionate to the total quantities of immediate labour in each. Assume the composition to be 80c+20v and the rate of surplus-value equal to 50 per cent. If one capital were equal to 500 and the other to 300, then the product in the first case would be 550 and in the second 330. The products would then be as 5 20=100 (wages) to 3 20=60; that is as 100:60, as 10:6, as 5:3. [And] 550:330=55:33 or as 55/11:33/11 (5 11=55 and 3 11=33); i.e., as 5:3. But even then one would only know their relation to one another and not their true values, since many different values correspond to the ratio 5:3.) [a] In the manuscript: f.i. Ed. [b] In the manuscript: the commodity . Ed. * ||663| (The following passage shows that Ricardo consciously identifies value with cost of production: Mr. Malthus appears to think that it is a part of my doctrine, that the cost and value of a thing should be the same; it is, if he means by cost, cost of production including profits (l.c., p. 46, note).) |663|| [c] In the manuscript but instead of It follows, that . Ed. [d] The brackets are omitted in the manuscript Ed. [e] In the manuscript: upon . Ed. [f] In the manuscript: in . Ed. [g] In the manuscript: a . Ed. [h] In the manuscript: price . Ed. [i] Marx summarises very briefly here in his own words the idea developed by de Quincey. Ed.

Economic Manuscripts: Theories of Surplus-Value, Chapter 15

https://www.marxists.org/archive/marx/works/1863/theories-surplus-value/ch15.htm

It has already been shown in some detail, that the laws of surplus-value or rather of the rate of surplus-value (assuming the working-day as given) do not so directly and simply coincide with, nor are they applicable to, the laws of profit, as Ricardo supposes. It has been shown that he wrongly identifies surplus-value with profit and that these are only identical in so far as the total capital consists of variable capital or is laid out directly in wages; and that therefore what Ricardo deals with under the name of profit is in fact surplus-value. Only in this case can the total product simply be resolved into wages and surplus-value. Ricardo evidently shares Smith s view, that the total value of the annual product resolves itself into revenues. Hence also his confusion of value with cost-price. It is not necessary to repeat here that the rate of profit is not directly governed by the same laws as the rate of surplus-value. Firstly: We have seen that the rate of profit can rise or fall as a result of a fall or rise in rent, independently of any change in the value of labour. Secondly: The absolute amount of profit is equal to the absolute amount of surplus-value. The latter, however, is determined not only by the rate of surplus-value but just as much by the number of workers employed. The same amount of profit is therefore possible, with a falling rate of surplus-value and a rising number of workers and vice versa, etc. Thirdly: With a given rate of surplus-value, the rate of profit depends on the organic composition of capital. Fourthly: With a given surplus-value (the organic composition of capital per 100 is also assumed to be given) the rate of profit depends on the relative value of the different parts of the capital, which may be differently affected, partly by economy of power etc. in the use of the means of production, partly by variations in value which may affect one part of capital while they leave the rest untouched. Finally, one has to take into account the differences in the composition of capital arising from the process of circulation. ||667| Some of the observations that occur in Ricardo s writing should have led him to the distinction between surplus-value and profit. Because he fails to make this distinction, he appears in some passages to descend to the vulgar view as has already been indicated in the analysis of Chapter I On Value the view that profit is a mere addition over and above the value of the commodity; for instance when he speaks of the determination of profit on capital in which the fixed capital predominates, etc. This was the source of much nonsense among his successors. This vulgar view is bound to arise, if the proposition (which in practice is correct) that on the average, capitals of equal size yield equal profits or that profit depends on the size of the capital employed, is not connected by a series of intermediary links with the general laws of value etc.: in short, if profit and surplus-value are treated as identical, which is only correct for the aggregate capital. Accordingly Ricardo has no means for determining a general rate of profit. Ricardo realises that the rate of profit is not modified by those variations of the value of commodities which affect all parts of capital equally as, for example, variations in the value of money. He should therefore have concluded that it is affected by such variations in the value of commodities which do not affect all parts of capital equally; that therefore variations in the rate of profit may occur while the value of labour remains unchanged, and that even the rate of profit may move in the opposite direction to variations in the value of labour. Above all, however, he should have kept in mind that here the surplus-product, or what is for him the same thing, surplus-value, or again the same thing, surplus-labour, when he is considering it sub specie profit, is not calculated in proportion to the variable capital alone, but in proportion to the total capital advanced. With reference to a change in the value of money, he says: If Ricardo means surplus produce when he writes produce in the last passage then this is correct. For the rate of profit is equal to the surplus produce (value) divided by the capital employed. Thus if the surplus produce is 10 and the capital 100, the rate of profit is 10/100, which equals 1/10, which equals 10 per cent. If however he means the total product, then the way he puts it is not accurate. In that case by proportion of the value of the produce to the value of capital, he evidently means nothing but the excess of the value of the commodity over the value of the capital advanced. In any case, it is obvious that here he does not identify profit with surplus-value or the rate of profit with the rate of surplus-value, [the latter is] equal to the surplus-value divided by the value of labour or the variable capital. Ricardo says (Chapter XXXII): (The particular point with which Ricardo is actually dealing, the effect in a practical case, does not concern us here. But a sudden fall in the value of wool would of course affect (adversely) the money income of those clothiers who had on their hands a large stock of finished cloth manufactured at a time when wool was dearer and which has to be sold after the price ||668| of wool has dropped.) If, as Ricardo assumes here, the clothiers set in motion the same amount of labour as before <they could set in motion a much greater amount of labour because a part of the capital which was previously expended only on raw material is now at their disposal and can be expended on raw material plus labour>, it is clear that their money income taken in absolute terms, will not be less but their rate of profit will be greater than previously; for say it was 10 per cent, i.e., 100 the same amount as before would now have to be reckoned on 900 instead of 1,000. In the first case the rate of profit was 10 per cent. In the second it is 1/9 or 11 1/9 per cent. Since Ricardo moreover presupposes that the raw produce of which commodities are made has fallen generally, the general rate of profit would rise and not only the rate of profit in one branch of production. It is all the more strange that Ricardo does not realise this, because he understands it when the opposite takes place. For in Chapter VI On Profits Ricardo deals with the case where, as a result of an increase in the price of necessaries owing to the cultivation of worse land and the consequent rise in differential rent, firstly wages rise and secondly all raw produce from the surface of the earth. (This assumption is by no means necessary; cotton may very well fall in price, so can silk and even wool and linen, although the price of corn may be rising.) In the first place he says that the surplus-value (he calls it profit) of the farmer will fall because the value of the product of the ten men whom he employs, continues to be 720 and from this fund of 720 he has to hand over more in wages. And he continues: In this passage, therefore, Ricardo distinguishes between absolute profit (equal to surplus-value) and rate of profit and also shows that the rate of profit falls more as a result of the change in the value of the capital advanced, than the absolute profit (surplus-value) falls as a result of the rise in the value of labour. The rate of profit would have also fallen, if the value pf labour [had] remained the same, because the same absolute profit would have to be calculated on a greater capital. The reverse result, i.e., a rise in the rate of profit (as distinct from a rise in surplus-value or absolute profit), would take place in the first instance cited from him, where the value of the raw produce falls. It is evident, therefore, that rises and falls in the rate of profit may also be brought about by circumstances other than the rise and fall in the absolute profit and the rise and fall in its rate, reckoned on the capital laid out in wages. In connection with the last quoted passage Ricardo writes: The prices of these commodities would not rise, but the rate of profit in these branches of production would rise above that in the others. For in the latter, a smaller surplus-value (because of the rise in wages) would correspond to a capital outlay that had grown in value for two reasons: firstly, because the outlay in wages had increased; secondly, because the outlay in raw materials had increased. In the second case [i.e. jewellery etc.] ||669| there is a smaller surplus-value on a capital outlay in which only the variable part has grown because of the rise in wages. In these passages, Ricardo himself throws overboard his whole theory of profit, which is based on the false identification of the rate of surplus-value with the rate of profit. It follows from what Ricardo himself has said, that, even if [the rise in the price of raw produce] is not accompanied by a rise of wages, the rate of profit would be lowered by an increase of that part of the advanced capital which consists of raw produce. The rate of profit in these particular spheres of production would certainly fall, although the value of labour wages remained the same. The raw material used by the silk manufacturers, piano manufacturers, furniture manufacturers, etc. would have become dearer, and therefore the proportion borne by the same surplus-value to the capital laid out would have fallen and hence the rate of profit. And the general rate of profit consists of the average of the particular rates of profit in all branches of business. Or, in order to make the same average profit as before, these manufacturers would raise the price of their commodities. Such a nominal rise in prices does not directly affect the rate of profit, but the distribution of profit. Ricardo returns once more to the case considered above, where the surplus-value (absolute profit) falls, because the price of the necessaries (and along with these, also rent) rises. What is important here is only something of which Ricardo is not aware, namely, that he throws overboard his identification of profit with surplus-value and [admits] that the rate of profit can be affected by a variation in the value of the constant capital independently of the value of labour. Moreover, his illustration is only partially correct. The advantage which the farmer, clothier etc. would derive from the rise in price of the stock of commodities they have on hand and on the market, would of course cease as soon as they had sold these commodities. The increased value of their capital would similarly no longer represent a gain for them, when this capital was used up and had to be replaced. They would then all find themselves in the position of the new farmer cited by Ricardo himself, who would have to advance a capital of 6,000 in order to make a profit of 3 per cent. On the other hand, ||XIII-670| the jeweller, manufacturer of hardware, money-dealer etc. although at first they would not [receive] any compensation for their losses would realise a rate of profit of more than 3 per cent, for only the capital laid out in wages would have risen in value whereas their constant capital remained unchanged. One further point of importance in connection with this compensation of the falling profit by the rise in value of the capital, mentioned by Ricardo, is that for the capitalist and generally, as far as the division of the product of annual labour is concerned it is a question not only of the distribution of the product among the various shareholders in the revenue, but also of the division of this product into capital and revenue. Ricardo is by no means theoretically clear here. If the working-day is given (or if only such differences occur in the working-day in different trades as are compensated by the particular characteristics of the different kinds of labour) then the general rate of surplus-value, i.e., of surplus-labour, is given since wages are on the average the same, Ricardo is preoccupied with this idea, and he confuses the general rate of surplus-value with the general rate of profit. I have shown that with the same general rate of surplus-value, the rates of profit in different branches of production must be very different, if the commodities are to be sold at their respective values. The general rate of profit is formed through the total surplus-value produced being calculated on the total capital of society (of the class of capitalists). Each capital, therefore, in each particular branch, represents a portion of a total capital of the same ||671| organic composition, both as regards constant and variable capital, and circulating and fixed capital. As such a portion, it draws its dividends from the surplus-value created by the aggregate capital, in accordance with its size. The surplus-value thus distributed, the amount of surplus-value which falls to the share of a block of capital of given size, for example 100, during a given period of time, for example one year, constitutes the average profit or the general rate of profit, and as such it enters into the costs of production of every sphere of production. If this share [per 100] is 15, then the usual profit equals 15 per cent and the cost-price is 115. It can be less if, for instance, only a part of the capital advanced enters as wear and tear into the process of the creation of value. But it is always equal to the capital consumed +15 [per cent] , the average profit on the capital advanced. If in one case 100 entered into the product and in another only 50, then in the first case the cost-price would be 100+15=115 and in the second case it would be 50+15=65; thus both capitals would have sold their commodities at the same cost-price, i.e., at a price which yielded the same rate of profit to both. It is evident, that the emergence, realisation, creation of the general rate of profit necessitates the transformation of values into cost-prices that are different from these values. Ricardo on the contrary assumes the identity of values and cost-prices, because he confuses the rate of profit with the rate of surplus-value. Hence he has not the faintest notion of the general change which takes place in the prices of commodities, in the course of the establishment of a general rate of profit, before there can be any talk of a general rate of profit. He accepts this rate of profit as something pre-existent which, therefore, even plays a part in his determination of value. (See Chapter I On Value .) Having postulated the general rate of profit, he only concerns himself with the exceptional modifications in prices which are necessary for the maintenance, for the continued existence of this general rate of profit. He does not realise at all that in order to create the general rate of profit values must first be transformed into cost-prices and that therefore, when he presupposes a general rate of profit, he is no longer dealing directly with the values of commodities. Moreover, the passage under consideration, only [expresses] the Smithian concept and even this in a one-sided way, because Ricardo is preoccupied with his notion of a general rate of surplus-value. According to him, the rate of profit rises above the [average] level only in particular branches of production, because there the market-price rises above the natural price owing to the relation between supply and demand, under-production or over-production. Competition, influx of new capital into one branch of production or withdrawal of old capital from another, will then equalise market-price and natural price and reduce the profit of the particular branch to the general level. Here the real level of profit is assumed as constant and predetermined, and it is only a question of reducing the profit to this level in particular spheres of production in which it has risen above or fallen below it, as a result of the action of supply and demand. Ricardo, moreover, always assumes that the commodities whose prices yield more than the average profit stand above their value and that those which yield less than the average profit stand below their value. If competition makes their market-value conform to their value, then the level is established. According to Ricardo, the level itself can only rise or fall if wages fall or rise (for a relatively long period), that is to say, if the rate of relative surplus-value falls or rises; and this occurs without any change in prices. (Yet Ricardo himself admits here that there can be very significant variations in prices in different spheres .of production, according to the ratio of circulating and fixed capital.) But even when a general rate of profit is established and therefore cost-prices, the rate of profit in particular branches may rise, because the hours of work, in them are longer and consequently the rate of absolute surplus-value rises. That competition between the workers cannot level this out, is proved by the intervention of the state. The rate of profit will rise in these particular spheres without the market-price rising above the natural price. Competition between capitals, however, can and in the long run will prevent that this excess profit accrues entirely to the capitalists in these particular fields. They will have to reduce the prices of their commodities below their natural prices , or the other spheres will raise their prices a little (or if they do not actually raise them, because a fall in value of these commodities may supervene, then ||672| at any rate they will not lower them as much as the development of the productive power of labour in their own branches of production required). The general level will rise and the cost-prices will change. Furthermore : if a new branch of production comes into being in which a disproportionate amount of living labour is employed in relation to accumulated labour, in which therefore the composition of capital is far below the average composition which determines the average profit, the relations of supply and demand in this new trade may make it possible to sell its output above its cost-price, at a price approximating more closely to its actual value. Competition can level this out, only through the raising of the general level [of profit] , because capital on the whole realises, sets in motion, a greater quantity of unpaid surplus-labour. The relations of supply and demand do not, in the first instance as Ricardo maintains, cause the commodity to be sold above its value, but merely cause it to be sold above its cost-price, at a price approximating to its value. The equalisation can therefore bring about not its reduction to the old level, but the establishment of a new level. The same applies, for example, to colonial trade, where as a result of slavery and the bounty of nature, the value of labour is lower than in the old country, or perhaps because, in fact or in law, landed property has not developed there. If capitals from the mother country can be freely transferred to this new trade, then they will reduce the specific excess profit in this trade, but will raise the general level of profit (as Adam Smith observes quite correctly). On this point, Ricardo always helps himself out with the phrase: But in the old trades the quantity of labour employed has nevertheless remained the same, and so have wages. The general rate of profit is, however, determined by the ratio of unpaid labour to paid labour and to the capital advanced not in this or that sphere of the economy, but in all spheres to which the capital may be freely transferred. The ratio may stay the same in nine-tenths; but if it alters in one-tenth, then the general rate of profit in the ten-tenths must change. Whenever there is an increase in the quantity of unpaid labour set in motion by a capital of a given size, the effect of competition can only be that capitals of equal size draw equal dividends, equal shares in this increased surplus-labour; but not that the dividend of each individual capital remains the same or is reduced to its former share in surplus-labour, despite the increase of surplus-labour in proportion to the total capital advanced. If Ricardo makes this assumption he has no grounds whatsoever for contesting Adam Smith s view that the rate of profit is reduced merely by the growing competition between capitals due to their accumulation. For he himself assumes here that the rate of profit is reduced simply by competition, although the rate of surplus-value is increasing. This is indeed connected with his second false assumption, that (leaving out of account the lowering or raising of wages) the rate of profit can never rise or fall, except as a result of temporary deviations of the market-price from the natural price. And what is natural price? That price which is equal to the capital outlay plus the average profit. Thus one arrives again at the assumption that average profit can only fall or rise in the same way as the relative surplus-value. Ricardo is therefore wrong when, contradicting Adam Smith, He is equally wrong in supposing that the rate of profit does not affect cost-prices because it does not affect values. Ricardo is wrong in thinking that if, in consequence of particularly favourable circumstances, profits in a branch of foreign trade [rise above the general level,] the general level [of profits] must always be re-established by reducing [these profits] to the former level and not by raising the general level of profits. Because of his completely wrong conception of the rate of profit, Ricardo misunderstands entirely the influence of foreign trade, when it does not directly lower the price of the labourers food. He does not see how enormously important it is for England, for example, to secure ||673| cheaper raw materials for industry, and that in this case, as I have shown previously, the rate of profit rises although prices fall, whereas in the reverse case, with rising prices, the rate of profit can fall, even if wages remain the same in both cases. The rate of profit does not depend on the price of the individual commodity but on the amount of surplus-labour which can be realised with a given capital. Elsewhere Ricardo also fails to recognise the importance of the market because he does not understand the nature of money. * * * ||673| (In connection with the above it must be noted that Ricardo commits all these blunders, because he attempts to carry through his identification of the rate of surplus-value with the rate of profit by means of forced abstractions. The vulgar mob has therefore concluded that theoretical truths are abstractions which are at variance with reality, instead of seeing, on the contrary, that Ricardo does not carry true abstract thinking far enough and is therefore driven into false abstraction. |673|| This is one of the most important points in the Ricardian system. The rate of profit has a tendency to fall. Why? Adam Smith says: As a result of the growing accumulation and the growing competition between capitals which accompanies it. Ricardo retorts: Competition can level out profits in the different spheres of production (we have seen above that he is not consistent in this); but it cannot lower the general rate of profit. This would only be possible if, as a result of the accumulation of capital, the capital grew so much more rapidly than the population, that the demand for labour were constantly greater than its supply, and therefore wages both nominal and real wages and in terms of use-value were constantly rising in value and in use-value. This is not the case. Ricardo is not an optimist who believes such fairy-tales. But because for Ricardo the rate of profit and the rate of surplus-value that is, the relative surplus-value, since he assumes the length of the working-day to be constant are identical terms, a permanent fall in profit or the tendency of profit to fall can only be explained as the result of the same causes that bring about a permanent fall or tendency to fall in the rate of surplus-value, i.e., in that part of the day during which the worker does not work for himself but for the capitalist. What are these causes? If the length of the working-day is assumed to remain constant, then the part of it during which the worker works for nothing for the capitalist can only fall, diminish, if the part during which he works for himself grows. And this is only possible (assuming that labour is paid at its value), if the value of the necessaries the means of subsistence on which the worker spends his wages increases. But as a result of the development of the productivity of labour, the value of industrial commodities is constantly decreasing. The diminishing rate of profit can therefore only be explained by the fact that the value of food, the principal component part of the means of subsistence, is constantly rising. This happens because agriculture is becoming less productive. This is the same presupposition which, according to Ricardo s interpretation, explains the existence and growth of rent. The continuous fall in profits is thus bound up with the continuous rise in the rate of rent. I have already shown that Ricardo s view of rent is wrong. This then cuts out one of the grounds for his explanation of the fall in the rate of profits. But secondly, it rests on the false assumption that the rate of surplus-value and the rate of profit are identical, that therefore a fall in the rate of profit is identical with a fall in the rate of surplus-value, which in fact could only be explained in Ricardo s way. And this puts an end to his theory. The rate of profit falls, although the rate of surplus-value remains the same or rises, because the proportion of variable capital to constant capital decreases with the development of the productive power of labour. The rate of profit thus falls, not because labour becomes less productive, but because it becomes more productive. Not because the worker is less exploited, but because he is more exploited, whether the absolute surplus-time grows or, when the state prevents this, the relative surplus-time grows, for capitalist production is inseparable from falling relative value of labour. Thus Ricardo s theory rests on two false presuppositions: 1. The false supposition that the existence and growth of rent is determined by the diminishing productivity of agriculture; 2. The false assumption that the rate of profit is equal to the rate of relative surplus-value and can only rise or fall in inverse proportion to a fall or rise in wages. ||674| I shall now place together the statements in which Ricardo expounds the view that has just been described. First, however, some comments on the way in which, given his concept of rent, Ricardo thinks that rent gradually swallows up the rate of profit. We shall use the tables on page 574, but with the necessary modifications. In these tables it is assumed that the capital employed consists of 60c+ 40v, the surplus-value is 50 per cent, the value of the product is therefore 120, whatever the productivity of labour. Of this 10 was profit and 10 absolute rent. Say, the 40 represents wages for 20 men (for a week s labour for example or rather, because of the rate of profit, say, a year s labour; but this does not matter here at all). According to Table A, where land I determines the market-value, the number of tons is 60, therefore 60 tons= 120, 1 ton=120/60= 2. The wages, 40, are thus equal to 20 tons or quarters of grain. This then is the necessary wage for the number of workers employed by the capital of 100. Now if it were necessary to descend to an inferior type of soil, where a capital of 110 ( 60 constant capital and the 20 workers which this sets in motion, that is, 60 constant capital and 50 variable capital) was required, in order to produce 48 tons. In this case the surplus-value would be 10, and the price per ton would be 2 1/2. If we descended to an even worse type of land where 120 would be equal to 40 tons, the price per ton would be 120/40= 3. In this case there would be no surplus-value on the worse type of land. What the 20 men produce is always equal to the value of 60 ( 3 equals a working-day of a given length). Thus if wages grow from 40 to 60, the surplus-value disappears altogether. It is assumed throughout that one quarter is the necessary wage for one man. Assume that in both these cases a capital of only 100 is to be laid out. Or, which is the same thing, whatever capital may be laid out, what is the proportion for 100? For instead of calculating that, if the same number of workers and the same constant capital is employed as before, the capital outlay will amount to 110 or 120, we shall calculate on the basis of the same organic composition (not measured in value but in amount of labour employed and amount of constant capital) how much constant capital and wages a capital of 100 contains (in order to keep to the comparison of 100 with the other classes). The proportion 110:60=100:54 6/11 and 110:50=100:45 5/11. 20 men set in motion 60 constant capital; so how many [men] set in motion 54 6/11? The situation is as follows : The value obtained from employing a number of workers (say 20) is 60, In this case 20 quarters or tons, equal to 40, will fall to the share of the workers employed, if the value of the ton or quarter is 2. If the value of a ton rises to 3, the surplus-value disappears. If it rises to 2 1/2, then that half of the surplus-value disappears, which constituted the absolute rent. In the first case, where a capital of 120 (60c+60v) is laid out the product amounts to 120, that is 40 tons (40X3), In the second case, where a capital of 110 (60c and 50v is laid out the product amounts to 120, which is 48 tons (48X2 1/2). In the first case, if the capital laid out were 100 (50c and 50v) the product would come to 100, i.e., 33 1/3 tons (3X33 1/3=100). Moreover, since only the land has deteriorated while the capital has undergone no change, the proportionate number [of workers] who set in motion the constant capital of 50 will be the same as that previously setting in motion the capital of 60. Thus if the latter was set in motion by 20 men (who received 40 while the value of 1 ton was 2) it will now be set in motion by 16 2/3 men, who receive 50 since the value of a ton has risen to 3. As before, 1 man receives 1 ton or 1 quarter equal to 3, for 16 2/3X3=50. If the value created by 16 2/3 men is 50, then that created by 20 men is 60. Thus the assumption that a day s labour of 20 men is equal to 60 remains unchanged. Now let us take the second case. With a capital outlay of 100, the product is 109 1/11, equal to 43 7/11 tons (2 1/2X43 7/11=109 1/11). The constant capital is 54 6/11 and the variable 45 5/11. How many men does the 45 5/11 represent? 18 2/11 men, ||675| for if the value of a day s labour of 20 men equals 60, then that of 18 2/11 men equals 54 6/11 hence the value of the product is 109 1/11. It can be seen that in both cases the same capital sets in motion fewer men who, however, cost more. They work for the same length of time, but the surplus-labour [time] decreases or disappears altogether, because they produce a smaller amount of product in the same time (and this product consists of their necessaries) , therefore they use more labour-time for the production of 1 ton or 1 quarter although they work the same length of time as before. In his calculations, Ricardo always presupposes that the capital must set in motion more labour and that therefore a greater capital, i.e., 120 or 110, must be laid out instead of the previous 100. This is only correct if the same quantity is to be produced, i.e., 60 tons in the cases cited above, instead of 40 tons being produced in case I, with an outlay of 120, and 48 in case II with an outlay of 110. With an outlay of 100, therefore, 33 1/3 tons are produced in case I and 43 7/11 tons in case II. Ricardo thus departs from the correct view point, which is not that more workers must be employed in order to create the same product, but that a given number of workers create a smaller product, a greater share of which is in turn taken up by wages. We shall now compile two tables, firstly Table A from page 574 and the new table which follows from the data given above. If this table were constructed in the reverse direction, according to Ricardo s descending line: that is beginning from III and if at the same time one assumed that the more fertile land which is cultivated first, pays no rent, then we would, in the first place, have a capital of 100 in III, [which] produces a value of 120, consisting of 60 constant capital and 60 newly-added labour. According to Ricardo, one would further have to assume, that the rate of profit stood at a higher level than entered in Table A, since, when the ton of coal (quarter of wheat) was 2, the 20 men received 20 tons, equal to 40; now that, as a result of the fall in the value, the ton is equal to 1 9/15, or 1 12s., the 20 men receive only 32 (equal to 20 tons). The capital advanced to employ the same number of workers would amount to 60c and 32v= 92 and the produced value would be 120, since the value of the work carried out by the 20 men equals 60 as before. Accordingly, a capital of 100 would produce a value of 130 10/23, for 92:120=100:130 10/23 (or 23:30=100:130 10/23). Moreover this capital of 100 would be composed as follows: 65 5/23c and 34 18/23v. Thus the capital would be 65 5/23c+ 34 18/23v; the value of the product would amount to 130 10/23. The number of workers would be 21 17/23 and the rate of surplus-value 87 1/2 per cent. 1. So we would have: Expressed in tons, wages would be equal to 21 17/23 tons and profit to 19 1/46 tons. ||676| Continuing on the Ricardian assumption, let us now suppose that as a result of the increasing population, the market-price rises so high that class II must be cultivated, where the value per ton is 1 11/13. In this case it is impossible to assume as Ricardo wants that the 21 17/23 workers produce always the same value, i.e., 65 5/23 (wages added to surplus-value). For the number of workers whom III can employ, and therefore exploit, decreases according to his own assumption hence also the total amount of surplus-value. At the same time, the composition of the agricultural capital always remains the same. Whatever their wages may be, 20 workers are always required (with a given length of the working-day) in order to set in motion 60c. Since these 20 workers receive 20 tons and the ton is equal to 1 11/13, 20 workers cost 20 (1+11/13) = 20+ l6 12/13= 36 12/13. The value which these 20 workers produce, whatever the productivity of their labour, equals 60; thus the capital advanced amounts to 96 12/13, the value [of the product] is 120, and profit 23 1/13. The profit on a capital of 100 will therefore be 23 17/21 and the composition: 61 19/21c+ 382/21v. 20 40/63 workers [are] employed. Since the total value is 123 17/21, and the individual value per ton in class III is 1 3/5, of how many tons does the product consist? 77 8/21 tons. The rate of surplus-value is 62 1/2 per cent. But III sells the ton at 1 11/13, This results in a differential value of 4 12/13 s. or 16/65 per ton, and on 77 8/21 tons it amounts to 77 8/21 X 16/65 = 19 1/21. Instead of selling its product at 123 17/21, III sells at 123 17/21+ 19 1/21= 142 6/7. The 19 1/21 constitutes the rent. Thus we would have the following for III : The wages measured in tons are 20 40/63 tons. And the profit is 12 113/126 tons. We now pass on to class II; there is no rent here. Market-value and individual value are equal. The number of tons produced by II is 67 4/63. Thus we have the following for II: Wages measured in tons are 20 40/63 and profit is 12 113/126tons. ||677| 2. For the second case, in which class II and rent comes into existence, we have the following: Let us now pass on to the third case and, like Ricardo, let us assume that mine I, a poorer mine, must and can be worked, because the market-value has risen to 2. Since twenty workers are required for a constant capital of 60 and their wages are now 40, we have the same composition of capital as in Table A page 574, i.e., 60c+ 40v, and as the value produced by the 20 workers is always equal to 60, the total value of the product produced by a capital of 100 is 120, whatever its productivity. The rate of profit in this case is 20 per cent and the surplus-value 50 per cent. Measured in tons, the profit is 10 tons. We must now see what changes occur in III and II as a result of this change in the market-value and the introduction of I, which determines the rate of profit. Although III works the most fertile land he can with 100 only employ 20 workers, costing him 40, for a constant capital of 60 requires 20 workers. The number of workers employed with a capital of 100 therefore falls to 20. And the actual total value of the product is now 120. But how many tons have been produced by III when the individual value of one ton is equal to 19/15? 75 tons, since 120 divided by 24/15 ( 19/15)=75. The number of tons produced by III decreases because he can employ less labour with the same capital, not more (as Ricardo wrongly declares, because he always considers merely how much labour is required in order to create the same output; and not how much living labour can be employed with the new composition of capital though this is the only important point). But he sells these 75 tons at 150 (instead of at 120, which is their value) and so the rent rises to 30 in III. So far as II is concerned, the value of the product here is also 120 etc. But, as the individual value per ton is 1 11/13, 65 tons are produced (for 120 divided by 24/13 (1 11/13)=65). In short, we arrive here at Table A from page 574. But since for our purpose we need new headings here, now that I is introduced and the market-value has risen to 2 we set out the table anew. 3. [Third Case:] ||678| In short, this case III corresponds to Table A page 574 (apart from absolute rent which appears as a part of profit here) only the order is reversed. Let us now go on to the newly assumed cases. First of all the class which still yields a profit. Let it be called Ib. With a capital of 100 it only yields 43 7/11 tons. The value of a ton has risen to 2 1/2. The composition of the capital is 546/11c+ 45 5/11v. The value of the product is 109 1/11. 45 5/11 is enough to pay 18 2/11 men. And since the value of a day s labour of 20 men is 60, that of 18 2/11 men is 54 6/11. The value of the product is therefore 109 1/11. The rate of profit is 9 1/11, that is, 3 7/11 tons. The rate of surplus-value is 20 per cent. Since the organic composition of the capitals in III, II, I is the same as in Ib and they must pay the same wages, they too can employ only 18 2/11 men with 100, these men produce a total value of 54 6/11, and therefore a surplus-value of 20 per cent and a rate of profit of 9 1/11 per cent as in Ib. The total value of the product here, as in Ib, is 109 1/11. But since the individual value of a ton in III is 1 3/5, III produces (or its product is equal to) 109 1/11 divided by 1 3/5 or 24/15=68 2/11 tons. Moreover, the difference between the market-value of a ton and the individual value amounts to 2 1/2 - 1 3/5. That is 2 l0s.- 1 12s.=18s. And on 68 2/11 tons this amounts to 18(68+2/11)s.=1,227 3/11s.= 617 3/11s. Instead of selling at 109 1/11, III sells at 170 9 5/11s. And this excess equals the rent of III. This rent, expressed in tons, is 24 6/11 tons. Since the individual value of a ton in II is 1 11/13, II produces 109 1/11 divided by 1 11/13 and this is 59 1/11 tons. The difference between the market-value of one ton in II and its individual value is 2 1/2 - 1 11/13 which is 17/26. And on 59 1/11 tons, this amounts to 38 7/11. And this is the rent. The total market-value [of the product] amounts to 147 8/11. The rent expressed in tons is 15 5/11 tons. Finally, since the individual value of a ton in I is 2, 109 1/11 is equal to 54 6/11 tons. The difference between the market-value and the individual-value is 2 1/2 - 2=10s. And on 54 6/11 tons, this amounts to (59+6/11) l0s.=590s .+60/11s. = 27+5 5/11s. The total market-value [of the product] is therefore 136 7 3/11s. And the value of the rent expressed in tons is 10 10/11 tons. Bringing together all the data for case 4, one gets the following: ||679| 4. [Fourth Case:] 2 Finally let us look at the last case in which, according to Ricardo, the entire profit, disappears and there is no surplus-value. In this case the value of the product rises to 3, so that if 20 men are employed, their wage is 60 which is equal to the value produced by them. The composition of the capital is 50c+ 50v. Now 16 2/3 men are employed. If the value produced by 20 men is 60, then that produced by 16 2/3 men is 50. The wages, there-fore, swallow up the whole value. Now, as before, a man receives 1 ton. The value of the product is 100 and therefore the number of tons produced is 33 1/3 tons, of which one-half merely replaces the value of the constant capital and the other half the value of the variable capital. Since in III, the individual value of the ton is 1 3/5 or 24/15, how many tons does III produce? 100 divided by 24/15, i.e., 62 1/2 tons, whose value is 100. The difference, however, between market-value and individual value is 3- 1 3/5= 1 6/15 or 1 2/5. On 62 1/2 tons this amounts to 87 1/2 . Hence the total market-value of the product is 187 1/2 . And the rent in tons is 29 1/6 tons. In II the individual value of a ton is 1 11/13. Hence the differential value is 3- 1 11/13= 1 2/13. Since the individual value of a ton is here 1 11/13 or 24/13, the capital of 100 produces (100 divided by 24/13) 54 1/6 tons. On this number of tons, that difference amounts to 62 l0s. And the [total] market-value of the product is 162 l0s. Expressed in tons, the rent is 20 5/6 tons. In I the individual value of a ton is 2. The differential value therefore equals 3- 2= 1. Since the individual value of a ton is 2 here, a capital of 100 produces 50 tons. This makes a difference of 50. The [total] market-value of the product is 150 and the rent in tons is 16 2/3 tons. We now come to Ib, which until now has not carried a rent. Here the individual value is 2 1/2. Hence differential value equals 3 2 1/2= 1/2 or l0s. And since the individual value of a ton is here equal to 2 1/2 or 5/2, 100 produces 40 tons. The differential value on these is 20, so that the total market-value [of the product] amounts to 120. And the rent expressed in tons is 6 2/3 tons. Let us now construct case 5 in which, according to Ricardo, profit disappears. ||680| 5. [Fifth Case:] On the following page I shall now put all five cases in tabular form.|680|| ||683| If in the first place we examine Table E on the previous page, we see that the position in the last class, Ia, is very clear. In this case wages swallow up the whole product and the whole value of the [newly-added] labour. Surplus-value is non-existent, hence there is neither profit nor rent. The value of the product is equal to the value of the capital advanced, so that the workers who are here in possession of their own capital can invariably reproduce their wages and the conditions of their labour, but no more. In this last class it cannot be said that the rent swallows up the profit. There is no rent and no profit because there is no surplus-value. Wages swallow up the surplus-value and therefore the profit. In the four other classes the position is prima facie by no means clear. If there is no surplus-value, how can rent exist? Moreover, the productivity of labour on the types of land Ib, I, II and III has not altered at all. The non-existence of surplus-value must therefore be sheer illusion. Furthermore, another phenomenon becomes apparent and this, prima facie, is equally inexplicable. The rent in tons for III amounts to 29 1/6 tons or quarters, whereas in Table A, where only land III was cultivated, where there was no rent and where, moreover, 21 17/23 men were employed whereas now only 16 2/3 men are employed, the profit (which absorbed the entire surplus-value) only amounted to 19 1/46 tons. The same contradiction is apparent in II, where the rent in Table E amounts to 20 5/6 tons or quarters while in Table B the profit, which absorbed the entire surplus-value (20 40/63 men being employed instead of 16 2/3 men now), amounted to only 12 113/126 tons or quarters. Similarly in I, where the rent in Table E is 16 2/3 tons or quarters, while in Table C the profit of I, which absorbs the entire surplus-value, is only 10 tons (20 men being employed, instead of the present 16 2/3). Finally in Ib, where the rent in Table E is 6 2/3 tons or quarters, while the profit of Ib in Table D, where the profit absorbed the entire surplus-value, was only 3 7/11 tons or quarters (while 18 2/11 men were employed instead of the 16 2/3 now being employed). It is, however, clear, that whereas the rise in market-value above the individual value of the products of III, II, I, Ib can alter the distribution of the product, shifting it from one class of shareholders to the other, it can by no means increase the product which represents the surplus-value over and above the wages. Since the productivity of the various types of land has remained the same, as has the productivity of capital, how can III to Ib become more productive in tons or quarters through the entry into the market of the less productive type of land or mine Ia? The riddle is solved in the following manner: If a day s labour of 20 men produces 60, then that of 16 2/3 men produces 50. And since in land of class III, the labour-time contained in 1 3/5 or 8/5 is represented in 1 ton or 1 quarter, 50 will be represented in 3 11/4 tons or quarters. 16 2/3 tons or quarters have to be deducted from this for wages, thus leaving 14 7/12 as surplus-value. Furthermore, because the market-value of a ton has risen from 1 3/5 or 8/5 to 3, 16 2/3 tons or quarters out of the product of 62 1/2 tons or quarters, will suffice to replace the value of the constant capital. On the other hand, so long as the ton or quarter produced on III itself determined the market-value, and the latter was therefore equal to its individual value, 31 1/4 tons or quarters were required in order to replace a constant capital of 50. Instead of the 31 1/4 tons or quarters the part of the product which was necessary to replace the capital when the value of a ton was 1 3/5 only 16 2/3 are now required. Thus 31 1/4 16 2/3 tons or quarters, ||684| i.e., 14 7/12 tons or quarters, become available and fall to the share of rent. If one now adds the surplus-value produced by 16 2/3 workers with a constant capital of 50 on III, which amounts to 14 7/12 tons or quarters, to 14 7/12 tons or quarters, the part of the product which instead of replacing the constant capital now takes on the form of surplus-produce, then the total surplus-produce amounts to 28 14/12 tons or quarters =29 2/12=29 1/6 quarters or tons. And this is exactly the ton or corn rent of III in Table E. The apparent contradiction in the amount of ton or corn rent in classes II, I, Ib in Table E is solved in exactly the same way. Thus it becomes evident that the differential rent which arises on the better types of land owing to the difference between market-value and individual value of the products raised on them in its material form as rent in kind, surplus-product, rent in tons or corn in the above example, is made up of two elements and due to two transformations. (Firstly:) The surplus-product which represents the surplus-labour of the workers or the surplus-value, is changed from the form of profit to the form of rent, and therefore falls to the landlord instead of the capitalist. Secondly: a part of the product which previously when the product of the better type of land or mine was being sold at its own value was needed to replace the value of the constant capital, is now, when each portion of the product possesses a higher market-value, free and appears in the form of surplus-product, thus falling to the landlord instead of the capitalist. The rent in kind in so far as it is differential rent comes into being as the result of two processes: the transformation of the surplus-produce into rent, and not into profit, and the transformation of a portion of the product which was previously allotted for the replacement of the value of the constant capital into surplus-product, and thus into rent. The latter circumstance, that a part of the product is converted into rent instead of capital, has been overlooked by Ricardo and all his followers. They only see the transformation of surplus-product into rent, but not the transformation of a part of the product which previously fell to the share of capital (not of profit) into surplus-product. The nominal value of the surplus-product or differential rent thus constituted, is determined (according to the presupposition made) by the value of the product produced on the worst land or in the worst mine. But this market-value only instigates the different distribution of this product, it does not bring it about. These same two elements [are present] in all excess profit, for instance, if as a result of new machinery etc., a cheaply produced product is sold at a higher market-value than its own value. A part of the surplus-labour of the workers appears as surplus-product (excess profit) instead of as profit. And a part of the product which if the product were sold at its own lower value would have to replace the value of the capitalist s constant capital, now becomes free, has not got to replace anything, becomes surplus-product and therefore swells the profit. |684|| * * * ||688| {Incidentally, when speaking of the law of the falling rate of profit in the course of the development of capitalist production, we mean by profit, the total sum of surplus-value which is seized in the first place by industrial capitalist, [irrespective of] how he may have to share this later with the money-lending capitalist (in the form of interest) and the landlord (in the form of rent). Thus here the rate of profit is equal to surplus-value divided by the capital outlay. The rate of profit in this sense may fall, although, for instance, the industrial profit rises proportionately to interest or vice versa, or although rent rises proportionately to industrial profit or vice versa. If P is the profit, P the industrial profit, I interest and R rent, then P=P +I+R. And it is clear, that whatever the absolute magnitude of P P , I, R can increase or decrease as compared with one another, independently of the magnitude of P or the rise and fall of P. The reciprocal rise of P , I and R only represents an altered distribution of P among different persons. A further examination of the circumstances on which this distribution of P depends but which does not coincide with a rise or fall of P itself, does not belong here, but into a consideration of the competition between capitals. That, however, R can rise to a level higher even than that of P, if it were only divided into P and I, is therefore as has already been explained due to an illusion which arises from the fact that a part of the product whose value is rising, becomes free and is converted into rent instead of being reconverted into constant capital.} |688|| * * * ||684| It was assumed throughout this discussion, that the product whose price (according to market-value) had risen did not enter in kind into the composition of the constant capital, but only into wages, only into the variable capital. If the former were the case, Ricardo says that this would cause the rate of profit to fall even more and the rent to rise. This has to be examined. We have assumed until now, that the value of the product has to replace the value of the constant capital, i.e., the 50 in the case cited above. Thus if 1 ton or quarter costs 3, it is obvious that not so many tons or quarters are required for the replacement of this value than would be needed if the ton or quarter cost only 1 9/15. But supposing that the coal or the corn or whatever other product of the earth, the product produced by agricultural capital, itself enters in kind into the formation of the constant capital. Let us assume for instance that it makes up half of the constant capital. In this case it is clear that whatever the price of the coal or the corn ||685| a constant capital of definite size, in other words, one which is set in motion by a definite number of workers, always requires a definite portion of the total product in kind for its replacement since the composition of agricultural capital has, according to the assumption, remained unchanged in its proportionate amounts of accumulated and living labour. If for example, half the constant capital consists of coal or corn and half of other commodities, then the constant capital of 50 will consist of 25 of other commodities and 25 (or 15 5/8 quarters or tons) [coal or corn] , when the value of a ton is 8/5 or 1 3/5. And however the market-value of a ton or a quarter may change, 16 2/3 men require a constant capital of 25 plus 15 5/8 quarters or tons, for the nature of the constant capital remains the same, and so does the proportionate number of workers required to set it in motion. Now if, as in Table E, the value of a ton or quarter rises to 3, then the constant capital required for the 16 2/3 men would be 25+ 3 (15+5/8)= 25+ 45+ 15/8= 71 7/8. And since the 16 2/3 men cost 50, they would require a total capital outlay of 71 7/8+ 50= 121 7/8. The correlation of values within the agricultural capital would have changed while organic composition remained the same. It would be 71 7/8c+ 50v (for 16 2/3 workers). For 100 the composition would be 58 38/39c+ 41 1/39v. Slightly more than 13 2/3 workers (that is, leaving out of account the fraction 1/117) Since 16 2/3 workers set in motion 15 5/8 tons or quarters constant capital, 13 79/117 workers set in motion 12 32/39 tons or quarters, equal to 38 6/13. The remainder of the constant capital, equal to 20 20/39, would consist of other commodities. Whatever the circumstances, 12 32/39 tons or quarters would always have to be deducted from the product in order to replace that part of constant capital into which they enter in kind. Since the value produced by 20 workers equals 60, that produced by 13 79/117 equals 41 1/39. Wages in Table E, however, also amount to 41 1/39. Therefore no surplus-value. The total number of tons would be [51 11/13, of which] 12 32/39 tons are needed to replace [part of the constant capital in kind]; a further 13 79/117 are for the workers; 6 98/117 tons, at 3 a ton, are used to replace the remainder of the constant capital. That is altogether 33 1/3 tons. This would leave 17 37/39 tons for the rent. To shorten the matter, let us take the most extreme case, the one most favourable to Ricardo, i.e., that the constant capital, just as the variable, consists purely of agricultural produce whose value rises to 3 per quarter or ton, when class la governs the market. The technological composition of the capital remains the same; that is, the ratio between living labour or number of workers (since the normal working-day has been assumed to be constant) represented by the variable capital and the quantity of the instruments of labour required, which now, according to our assumption, consist of tons of coal or quarters of corn, remains constant for a given number of workers. Since with the original composition of the capital, of 60c+ 40v, and the price per ton of 2, 40v represented 20 workers or 20 quarters, or tons, 60c represented 30 tons; and since these 20 workers produced 75 tons on III, 13 1/3 workers (and 40v is equal to 13 1/3tons or workers if the ton costs 3) produce 50 tons and set in motion a constant capital of 60/3 ||686| equal to 20 tons or quarters. Moreover, since 20 workers produce a value of 60, 13 1/3[workers] produce 40. Since the capitalist must pay 60 for the 20 tons and 40 for the 13 1/3workers, but the latter only produce a value of 40, the value of the product is 100; the outlay is 100. Surplus-value and profit are nil. But because the productivity of III has remained the same, as has already been said, 13 1/3men produce 50 tons or quarters. The outlay in kind of tons, or quarters, however, only amounts to 20 tons for constant capital and 13 1/3tons for wages, i.e., 33 1/3 tons. The 50 tons thus leave a surplus-product of 16 2/3 and this forms the rent. But what do the 16 2/3 represent? Since the value of the product is 100 and the product itself equals 50 tons, the value of the ton produced here would in fact be 2, which is 100/50. And so long as the product in kind is greater than what is required for the replacement of the capital in kind, the individual value of a ton must remain smaller than its market-value according to this criterion. The farmer must pay 60 in order to replace the 20 tons [constant capital], and he reckons the 20 tons at 3, since this is the market-value per ton and a ton is sold at this price. Similarly he must pay 40 for the 13 1/3 workers, or for the tons or quarters which he pays to the workers. Thus the workers only receive 13 1/3tons in the transaction. In actual fact, however, so far as class III is concerned, the 20 tons cost 40 and the 13 1/3cost only 26 2/3, But the 13 1/3workers produce a value of 40, and therefore a surplus-value of 131/3. At 2 per ton, this amounts to 64/6 or 62/3 tons. And since the 20 tons [constant capital] cost only 40 on III, this leaves an excess of 20 equal to 10 tons. The 16 2/3 tons rent are thus equal to 6 2/3 tons surplus-value which is converted into rent and 10 tons capital which is converted into rent. But because the market-value per ton has risen to 3, the 20 tons cost the farmer 60 and the 13 1/3cost him 40, while the 16 2/3 tons, that is the excess of the market-value over the [individual] value of his product, appear as rent, and [cost] 50. How many tons are produced by 13 1/3men in class II? 20 men produce 65 here, 13 1/3[men] therefore 43 1/3 tons. The value of the product is 100, as above. Of the 43 1/3 tons, however, 33 1/3 are required for the replacement of the capital. This leaves 43 1/3-33 1/3=l0 tons as surplus-product or rent. But this rent of 10 tons can be explained as follows: the value of the product of II is 100, the product amounts to 43 1/3 [tons], thus the value of a ton is 100/43 1/3 = 2 4/13. The 13 1/3workers therefore cost 30 10/13, and this leaves a surplus-value of 9 3/13. Moreover, the 20 tons constant capital cost 46 2/13 and of the 60 that are paid for this, there remain 1311/13. Together with the surplus-value this comes to 23 1/13, which is correct to the last farthing. Only in class Ia, where in fact 33 1/3 tons or quarters, that is the total product, is required in kind to replace constant capital and wages, there is neither surplus-value, nor surplus-product, nor profit, nor rent. So long as this is not the case, so long as the product is greater than is necessary to replace the capital in kind, there will be conversion of profit (surplus-value) and capital into rent. Conversion of capital into rent takes place when a part of the product is freed, which, with a lower value, would have had to replace the capital, or [when] a part of the product which would have been converted into capital and surplus-value falls to rent. At the same time it is evident that if constant capital becomes dearer as a result of dearer agricultural produce, the rent is very much reduced, for example, the rent of III and II [is reduced] from 50 tons, equal to 150 with a market-value of 3, to 26 2/3 tons, i.e., almost to half. Such a reduction is inevitable ||687| since the number of workers employed with the same capital of 100 is reduced for two reasons, firstly, because wages rise, i.e., the value of the variable capital rises, secondly, because the value of the means of production, the constant capital, rises. In itself, the rise in wages necessitates that out of the 100 less can be laid out in labour, hence relatively less (if the value of the commodities that enter into the constant capital remains the same) can be laid out in constant capital; thus 100 represents less accumulated and less living labour. In addition, however, the rise in the value, of the commodities which enter into the constant capital, reduces the amount of accumulated labour and for this reason of living labour, which can be employed for the same sum of money, as the technological ratio between accumulated and living labour remains the same. But since, with the same productivity of the land and a given technological composition of the capital, the total product depends on the quantity of labour employed, as the latter decreases, so the rent must also decrease. This only becomes evident when profit disappears. So long as there is a profit, the rent can increase despite the absolute decrease in the product in all classes, as shown in the table on page 681. It is after all obvious that as soon as rent alone exists, the decrease in the product, hence in the surplus-product, must hit rent itself. This would occur more rapidly at the outset, if the value of the constant capital increased with that of variable capital. But this apart, the table on page 681 shows that with declining fertility in agriculture, the growth of differential rent is always accompanied, even on the better classes of land, by a diminishing volume of total product in proportion to a capital outlay of a definite size, say 100. Ricardo has no inkling of this. The rate of profit decreases, because the same capital, say 100, sets in motion less labour and pays more for this labour, thus yielding an ever smaller surplus. The actual product, however, like the surplus-value, depends on the number of workers employed by the capital, when the productivity is given. This is overlooked by Ricardo. He also ignores the manner in which the rent is formed: not only by transforming surplus-value into rent, but also capital into surplus-value. Of course this is only an apparent transformation of capital into surplus-value. Each particle of surplus-produce would represent surplus-value or surplus-labour, if the market-value were determined by the value of the product of III etc. Ricardo, moreover, only considers that in order to produce the same volume of product, more labour has to be employed, but disregards the fact that with the same capital, an ever diminishing quantity of living labour is employed, of which an ever greater part is necessary labour and an ever smaller part surplus-labour, and this is the decisive factor for the determination of both the rate of profit and the quantity of product produced. All this considered, it must be said that even if rent is taken to be purely differential rent, Ricardo has not made the slightest advance over his predecessors. His important achievement in this field is, as De Quincey pointed out, the scientific formulation of the question. In solving it Ricardo accepts the traditional views. Namely : On page 163 of the same work, De Quincey says further: Furthermore on page 176: So according to De Quincey this law of landownership [is valid] so long as there is no landownership in the modern sense of the word. Now to the relevant quotations from Ricardo. (First the following note on differential rent: In reality, the ascending and descending lines alternate, run across one another and intertwine. But it cannot by any means be said that if for individual short periods (such as 1797 1813) the descending line clearly predominates, that because of this, the rate of profit must fall (in so far, that is, as the latter is determined by the rate of surplus-value). Rather I believe that during that period, the rate of profit in England rose by way of exception, despite the greatly increased prices of wheat and agricultural produce generally. I do not know of any English statistician who does not share this view on the rise in the rate of profit during that period. Individual economists, such as Chalmers, Blake, etc. have advanced special theories based on this fact. Moreover I must add that it is foolish to attempt to explain the rise in the price of wheat during that period by the depreciation of money. No one who has studied the history of the prices of commodities during that period, can agree with this. Besides, the rise in prices begins much earlier and reaches a high level before any kind of depreciation of money occurs. As soon as it appears it must simply be allowed for. If one asks why the rate of profit rose despite the rising corn prices, this is to be explained from the following circumstances: Prolongation of the working-day, the direct consequence of the newly introduced machinery; depreciation of the manufactured goods and colonial commodities which enter into the consumption of the workers; reduction of wages (although the nominal wage rose) below their traditional average level <this fact is acknowledged for that period; J. P. Stirling in The Philosophy of Trade etc., Edinburgh, 1846, who, on the whole, accepts Ricardo s theory of rent, seeks, however, to prove that the immediate consequence of a permanent (that is, not accidental, dependent on the seasons) rise in the price of corn, is always reduction in the average wage>; finally, the rise in the rate of profit was due to rising nominal prices of commodities, because loans and government expenditure increased the demand for capital even more rapidly than its supply, and this enabled the manufacturers to retrieve part of the product paid to the landowning rentiers and other persons who have a fixed income in the form of rent etc. This transaction is of no concern to us here, where we are considering the basic relationships, and therefore are concerned only with three classes: landlords, capitalists and workmen. On the other hand it plays a significant part in practice, under appropriate circumstances as Blake has shown.) |688|| * * * [Ricardo establishes the fall in the rate of profit as follows:] These early stages of society are a peculiar bourgeois fantasy. In these early stages, the labourer is either slave or self-supporting peasant, etc. In the first case he belongs to the landlord, together with the land; in the second case he is his own landlord. In neither case does any capitalist stand between the landlord and the labourer. The subjugation of agriculture to capitalist production, and hence the transformation of slaves or peasants into wage-labourers and the intervention of the capitalist between landlord and labourer which is only the final result of capitalist production is regarded by Ricardo as a phenomenon belonging to the early stages of society . In the following sentence, Ricardo says in plain terms that by rate of profit he understands the rate of surplus-value: In other words, apart from rent, the rate of profit is equal to the excess of the value of the commodity over the value of the labour which is paid during its production, or that part of its value which is consumed by the producers. [In this context] Ricardo calls only the workers producers. He assumes that the produced value is produced by them. He thus defines surplus-value here, as that part of the value created by the workers which the capitalist retains.(1) But if Ricardo identifies rate of surplus-value with rate of profit and at the same time assumes, as he does, that the working-day is of given length then the tendency of the rate of profit to fall can only be explained by the same factors which make the rate of surplus-value fall. But, with a given working-day, the rate of surplus-value can only fall if the rate of wages is rising permanently. This is only possible if the value of necessaries is rising permanently. And this only if agriculture is constantly deteriorating, in other words, if Ricardo s theory of rent is accepted. Since Ricardo identifies rate of surplus-value with rate of profit, ||691| and since the rate of surplus-value can only be reckoned in relation to variable capital, capital laid out in wages, Ricardo, like Adam Smith, assumes that the value of the whole product after deduction of rent is divided between workmen and capitalists, into wages and profit. This means that he makes the false presupposition that the whole of the capital advanced consists only of variable capital. Thus, for example, after the passage quoted above, he goes on: The passage continues: And shortly before: At the end of the section (Chapter VI) On Profits , Ricardo says that his thesis on the fall of profits remains true, even if which is wrong it were assumed, that the prices of commodities rose with a rise in the money wages of the labourers. Whereas elsewhere in his argument Ricardo always only stressed that in order to produce the same quantity of product on worse land, more labourers have to be paid, here at last he stresses what is decisive for the rate of profit, namely, that with the same amount of capital fewer labourers are employed at increased wages. Apart from this, he is not quite right in what he says. It makes no difference to the capitalist, if the price of hats etc. rises by 10 per cent, but the landlord would have to give up more of his rent. His rent may have risen for example, from 10 to 20. But he gets proportionately fewer hats etc. for his 20 than for the 10. Ricardo says quite rightly : By this he means that the rent diminishes in an improving state of society. The real reason is that in an improving state of society, the variable capital decreases in proportion to the constant capital. |691|| ||692| That with the progress of production, the constant capital grows in proportion to the variable, Ricardo himself admits, but only in the form that the fixed capital grows in proportion to the circulating. (here, therefore, circulating capital comprises only variable capital, capital laid out in wages) Ricardo himself mentions one reason for the rise in rent, which is quite independent of the rise in the price of agricultural produce : On the same subject Ricardo says: Ricardo says: According to this, the profit of the farmer on that land the worst land, which according to Ricardo pays no rent regulates the general rate of profit. The reasoning is this: the product of the worst land is sold at its value and pays no rent. We see here exactly, therefore, how much surplus-value remains for the capitalist after deduction of the value of that part of the product which is merely an equivalent for the worker. And this surplus-value is the profit. This is based on the assumption that cost-price and value are identical, that this product, because it is sold at its cost-price, is sold at its value. This is incorrect, historically and theoretically. I have shown that, where there is capitalist production and where landed property exists, the land or mine of the worst type cannot pay a rent, because the corn is sold below its [individual] value if it is sold at the market-value, which is not regulated by it. For the market-value only covers its cost-price. But what regulates this cost-price? The rate of profit of the non-agricultural capital, into whose determination the price of corn naturally enters as well, however far removed the latter may be from being its sole determinant. Ricardo s assertion would only be correct if values and cost-prices were ||693| identical. Historically too, as the capitalist mode of production appears later in agriculture than in industry, agricultural profit is determined by industrial profit, and not the other way about. The only correct point is that on the land which pays a profit but no rent, which sells its product at the cost-price, the average rate of profits becomes apparent, is tangibly presented, but this does not mean at all that the average profit is thereby regulated; that would be a very different matter. The rate of profit can fall, without any rise in the rate of interest and rate of rent. The whole thing would only be right if profit were equal to surplus-value. Thus Adam Smith says that the rate of profit falls with the accumulation of capital, because of the growing competition between the capitalists; Ricardo says that it does so because of the growing deterioration of agriculture (increased price of necessaries). We have refuted his view, which would only be correct if rate of surplus-value and rate of profit were identical, and therefore the rate of profit could not fall unless the rate of wages rose, provided the working-day remained unchanged. Adam Smith s view rests on his compounding value out of wages, profits and rents (in accordance with his false view, which he himself refuted). According to him, the accumulation of capitals forces the reduction in arbitrary profits for which there is no inherent measure through the reduction in the prices of commodities; profits, according to this conception, being merely a nominal addition to the prices of commodities. Ricardo is of course theoretically right when he maintains, in opposition to Adam Smith, that the accumulation of capitals does not alter the determination of the value of commodities; but Ricardo is quite wrong when he seeks to refute Adam Smith by asserting that over-production in one country is impossible. Ricardo denies the plethora of capital, which later became an established axiom in English political economy. Firstly he overlooks that in reality, where not only the capitalist confronts the workman, but capitalist, workman, landlord, moneyed interest, [people receiving] fixed incomes from the state etc., confront one another, the fall in the prices of commodities which hits both the industrial capitalist and the workman, benefits the other classes. Secondly he overlooks that the output level is by no means arbitrarily chosen, but the more capitalist production develops, the more it is forced to produce on a scale which has nothing to do with the immediate demand but depends on a constant expansion of the world market. He has recourse to Say s trite assumption, that the capitalist produces not for the sake of profit, surplus-value, but produces use-value directly for consumption for his own consumption. He overlooks the fact that the commodity has to be converted into money. The demand of the workers does not suffice, since profit arises precisely from the fact that the demand of the workers is smaller than the value of their product, and that it [profit] is all the greater the smaller, relatively, is this demand. The demand of the capitalists among themselves is equally insufficient. Over-production does not call forth a constant fall in profit, but periodic over-production recurs constantly. It is followed by periods of under-production etc. Over-production arises precisely from the fact that the mass of the people can never consume more than the average quantity of necessaries, that their consumption therefore does not grow correspondingly with the productivity of labour. But the whole of this section belongs to the competition of capitals. All that Ricardo says on this isn t worth a rap. (This is contained in Chapter XXI, Effects of Accumulation on Profits and Interest .) [In the same chapter] Ricardo directs against Say the following ironical remarks on the relation between profits and interest: However, the same causes which bring down profits can make interest rise, and vice versa. [In the Chapter On Colonial Trade Ricardo writes:] Ricardo should have seen from this that ||694| the cost of production is something very different from the quantity of labour employed for the production of a commodity. Instead he continues: In the passage quoted, Adam Smith means by prices nothing other than the monetary expression of the values of commodities. That these and the gold and silver against which they exchange, are determined by the relative quantities of labour required for producing those two sorts of commodities <commodities on the one side, gold and silver on the other>, in no way contradicts the fact that the actual prices of commodities, i.e., their cost-prices can be raised by high profits [l.c., p. 414]. Although not all prices simultaneously, as Smith thinks. But as a result of high profits, some commodities will rise higher above their value, than if the average profits were low, while another group of commodities will sink to a smaller extent below their value.

Economic Manuscripts: Theories of Surplus-Value, Chapter 16

https://www.marxists.org/archive/marx/works/1863/theories-surplus-value/ch16.htm

First we shall compare Ricardo s propositions, which are widely scattered over the whole of his work. Here, therefore as with Adam Smith and others [it is] only [a question] of whether [the products] are consumed by workers or not. But it is at the same time also a question of the industrial consumption of the commodities which form constant capital, and are consumed as instruments of labour or materials of labour, or are consumed in such a way that through this consumption they are transformed into instruments of labour or materials of labour. The conception that accumulation of capital is identical with conversion of revenue into wages, in other words, that it is synonymous with accumulation of variable capital is one-sided, that is, incorrect. This leads to a wrong approach to the whole question of accumulation. Above all it is necessary to have a clear understanding of the reproduction of constant capital. We are considering the annual reproduction here, taking the year as the time measure of the process of reproduction. A large part of the constant capital the fixed capital enters into the annual process of labour without entering into the annual process of the creation of value. It is not consumed and, therefore, does not need to be reproduced. Because it enters into the production process and remains in contact with living labour it is kept in existence and along with its use-value, also its exchange-value. The greater this part of capital is in a particular country in one year, the greater, relatively, will be its purely formal reproduction (preservation) in the following year, providing that the production process is renewed, continued and kept flowing, even if only on the same scale. Repairs and so on, which are necessary to maintain the fixed capital, are reckoned as part of its original labour costs. This has nothing in common with preservation in the sense used above. A second part of the constant capital is consumed annually in the production of commodities and must therefore also be reproduced. This includes the whole of that part of fixed capital which enters annually into the process of creating value, as well as the whole of that part of constant capital which consists of circulating capital, raw materials and auxiliary materials. As regards this second part of constant capital, the following distinctions must be made: ||695| A large part of what appears as constant capital instruments and materials of labour in one sphere of production, is simultaneously the product of another, parallel sphere of production. For example, yarn which forms part of the constant capital of the weaver, is the product of the spinner, and may still have been in the process of becoming yarn on the previous day. When we use the term simultaneous here, we mean produced during the same year. The same commodities in different phases pass through various spheres of production in the course of the same year. They emerge as products from one sphere and enter another as commodities constituting constant capital. And as constant capital they are all consumed during the year; whether only their value enters into the commodity, as in the case of fixed capital, or their use-value too, as with circulating capital. While the commodity produced in one sphere of production enters into another, to be consumed there as constant capital in addition to the same commodity entering a succession of spheres of production the various elements or the various phases of this commodity are being produced simultaneously, side by side. In the course of the same year, it is continuously consumed as constant capital in one sphere and in another parallel sphere it is produced as a commodity. The same commodities which are thus consumed as constant capital in the course of the year are also, in the same way continuously being produced during the same year. A machine is wearing out in sphere A. It is simultaneously being produced in sphere B. The constant capital that is consumed during a year in those spheres of production which produce the means of subsistence, is simultaneously being produced in other spheres of production, so that during the course of the year or by the end of the year it is renewed in kind. Both of them, the means of subsistence as well as this part of the constant capital, are the products of new labour employed during the year. In the spheres producing the means of subsistence, as I have shown earlier, that portion of the value of the product which replaces the constant capital in these spheres, forms the revenue of the producers of this constant capital. But there is also a further portion of the constant capital which is consumed annually, without entering as a component part into the spheres of production which produce the means of subsistence (consumption goods). Therefore, it cannot be replaced [by products] from these spheres. We mean instruments of labour, raw materials and auxiliary materials, i.e., that portion of constant capital which is itself consumed industrially in the creation or production, of constant capital, that is to say, machinery, raw materials and auxiliary materials. This part, as we have seen, is replaced in kind either directly out of the product of these spheres of production themselves as in the case of seeds, livestock and to a certain extent coal or through the exchange of a portion of the products of the various spheres of production manufacturing constant capital. In this case capital is exchanged for capital. The existence and consumption of this portion of constant capital increases not only the mass of products, but also the value of the annual product. The portion of the value of the annual product which equals the value of this section of the consumed constant capital, buys back in kind or withdraws from the annual product that part of it, which must replace in kind the constant capital that is consumed. For example, the value of the seed sown determines the portion of the value of the harvest (and thus the quantity of corn) which must be returned to the land, to production, as constant capital. This portion would not be reproduced without the labour newly added during the course of the year; but it is in fact produced by the labour of the year before, or past labour and in so far as the productivity of labour remains unchanged the value which it adds to the annual product is not the result of this year s labour, but of that of the previous year. The greater, proportionately, is the constant capital employed in a country, the greater will also be the part of the constant capital which is consumed in the production of the constant capital, and which not only expresses itself in a greater quantity of products, but also raises the value of this quantity of products. This value, therefore, is the result not only of the current year s labour, but equally the result of the labour of the previous year, of past labour, although without the immediate labour of the current year it would not reappear, any more than would the product of which it forms a part. If this portion [of constant capital] grows, not only does the annual mass of products grow, but also their value, even if the annual labour remains the same. This growth is one form of the accumulation of capital, which it is essential to understand. And nothing could be further removed from such an understanding than Ricardo s proposition: These million men with a given working-day will not only produce very different quantities of commodities depending on the productivity of labour, but the value of these quantities of commodities will be very different, according to whether they are produced with much or little constant capital, that is, whether much or little value originating in the past labour of previous years is added to them. For the sake of simplicity, when we speak of the reproduction of constant capital we shall in the first place assume that the productivity of labour, and consequently the method of production, remain the same. At a given level of production, the constant capital which has to be replaced is a definite quantity in kind. If productivity remains the same, then the value ||696| of this quantity also remains constant. If there are changes in the productivity of labour which make it possible to reproduce the same quantity, at greater or less cost, with more or less labour, then similarly changes will occur in the value of the constant capital, which will affect the surplus-product after deduction of the constant capital. For example, supposing 20 quarters [of wheat] at 3, totalling 60, were required for sowing. If a third less labour is used to reproduce a quarter it would now cost only 2. 20 quarters have to be deducted from the product, for the sowing, as before; but their share in the value of the whole product only amounts to 40. The replacement of the same constant capital thus requires a smaller portion of value, a smaller share in kind out of the total product, although, as previously, 20 quarters have to be returned to the land as seed. If the constant capital consumed annually by one nation were 10 million and that consumed by another were only 1 million and the annual labour of 1 million men amounted to 100 million, then the value of the product of the first nation would be 110 and of the second only 101 million. It would be, moreover, not only possible, but certain, that the individual commodity of nation I would be cheaper than of nation II, because the latter would produce a much smaller quantity of commodities with the same amount of labour, much smaller than the difference between 10 and 1. It is true that a greater portion of the value of the product goes to the replacement of capital in nation I as compared with nation II, and therefore also a greater portion of the total product. But the total product is also much greater. In the case of factory-made commodities, it is known that a million (workers) in England produce not only a much greater product but also a product of much greater value than in Russia for example, although the individual commodity is much cheaper. In the case of agriculture, however, the same relation between capitalistically developed and relatively undeveloped nations does not appear to exist. The product of the more backward nation is cheaper than that of the capitalistically developed nation, in terms of its money price. And yet the product of the developed nation appears to be produced by much less (annual) labour than that of the backward one. In England, for example, less than one-third (of the workers) are employed in agriculture, while in Russia it is four-fifths; in the former 5/15, in the latter 12/15. These figures are not to be taken literally. In England, for instance, a large number of people in non-agricultural occupations in engineering, trade, transport etc. are engaged in the production and distribution of elements of agricultural production, but this is not the case in Russia. The proportion of persons engaged in agriculture cannot therefore be directly determined by the number of individuals immediately employed in agriculture. In countries with a capitalist mode of production, many people participate indirectly in agricultural production, who in less developed countries are directly included in it. The difference therefore appears to be greater than it is. For the civilisation of the country as a whole, however, this difference is very important, even in so far as it only means that a large section of the workers involved in agriculture do not participate in it directly; they are thus saved from the narrow parochialism of country life and belong to the industrial population. But let us leave aside this point for the moment and also the fact that most agricultural peoples are forced, to sell their product below its value whereas in countries with advanced capitalist production the agricultural product rises to its value. At any rate, a portion of the value of the constant capital enters into the value of the product of the English farmer, which does not enter into the product of the Russian farmer. Let us assume that this portion of value is equal to a day s labour of 10 men, and that one English worker sets this constant capital in motion. I am speaking of that part of the constant capital of the agricultural product, which is not replaced by new labour, such as is the case, for example, with agricultural implements. If five Russian workers were required in order to produce the same product which one Englishman produces with the help of the constant capital, and if the constant capital used by the Russian were equal to one (day s labour), then the English product would be equal to 10+1=11 working-days, and that of the Russian would be 5+1=6. If the Russian soil were so much more fertile than the English, that without the application of any constant capital or with a constant capital that was one-tenth the size, it could produce as much corn as the Englishmen with a constant capital ten times as great, then the values of the same quantities of English and Russian corn would compare as 11:6. If the quarter of Russian corn were sold at 2, then the English would be sold at 32/3, for 2:32/3 = 6:11. The money price and the value of the English corn would thus be much higher than that of the Russian, but nevertheless, the English corn would be produced with less labour, since the past labour, which reappears in the quantity as well as in the value of product, costs no additional new labour. This would always be the case, if the Englishman uses less immediate labour than the Russian, but the greater constant capital which he uses and which costs him nothing, although it has cost something and must be paid for does not raise the productivity of labour to such an extent that it compensates for the natural fertility of the Russian soil. The money prices of agricultural products can, therefore, be higher in countries of capitalist production than in ||697| less developed countries, although in fact they cost less labour. They contain more immediate and past labour, but this past labour costs nothing. The product would be cheaper if the difference in natural fertility did not intervene. This would also explain the higher money price of the labourer s wage. Up to now we have only spoken of the reproduction of the capital involved. The labourer replaces his wage with a surplus-product or surplus-value, which forms the profit (including rent) of the capitalist. He replaces that part of the annual product which serves him anew as wages. The capitalist has consumed his profit during the course of the year, but the labourer has created a portion of the product which can again be consumed as profit. That part of the constant capital which is consumed in the production of the means of subsistence, is replaced by constant capital which has been produced by new labour, during the course of the year. The producers of this new portion of constant capital realise their revenue (profit and wages) in that part of the means of subsistence which is equal to the value of the constant capital consumed in their production. Finally, the constant capital which is consumed in the production of constant capital, in the production of machinery, raw materials and auxiliary materials, is replaced in kind or through the exchange of capital, out of the total product of the various spheres of production which produce constant capital. What then is the position with regard to the increase of capital, its accumulation as distinct from reproduction, the transformation of revenue into capital? In order to simplify the question, it is assumed that the productivity of labour remains the same, that no changes occur in the method of production, that therefore the same quantity of labour is required to produce the same quantity of commodities, and consequently that the increase in capital costs the same amount of labour as the production of capital of the same size cost the previous year. A portion of the surplus-value must be transformed into capital, instead of being consumed as revenue. It must be converted partly into constant and partly into variable capital. And the proportion in which it is divided into these two different parts of capital, depends on the given organic composition of the capital, since the method of production remains unaltered and also the proportional value of both parts. The higher the development of production, the greater will be that part of surplus-value which is transformed into constant capital, compared with that part of the surplus-value which is transformed into variable capital. To begin with, a portion of the surplus-value (and the corresponding surplus-product in the form of means of subsistence) has to be transformed into variable capital, that is to say, new labour has to be bought with it. This is only possible if the number of labourers grows or if the labour-time during which they work, is prolonged. The latter takes place, for instance, when a part of the labouring population was only employed for half or two-thirds [of the normal time], or also, when for longer or shorter periods, the working-day is absolutely prolonged, this however, must be paid for. But that cannot be regarded as a method of accumulation which can be continuously used. The labouring population can increase, when previously unproductive labourers are turned into productive ones, or sections of the population who did not work previously, such as women and children, or paupers, are drawn into the production process. We leave this latter point out of account here. Finally, together with the growth of the population in general, the labouring population can grow absolutely. If accumulation is to be a steady, continuous process, then this absolute growth in population although it may be decreasing in relation to the capital employed is a necessary condition. An increasing population appears to be the basis of accumulation as a continuous process. But this presupposes an average wage which permits not only reproduction of the labouring population but also its constant growth. Capitalist production provides for unexpected contingencies by overworking one section of the labouring population and keeping the other as a ready reserve army consisting of partially or entirely pauperised people. What then is the position with regard to the other portion of the surplus-value which has to be converted into constant capital? In order to simplify this question, we shall leave out of account foreign trade and consider a self-sufficing nation. Let us take an example. Let us assume that the surplus-value produced by a linen weaver amounts to 10,000, and that he wants to convert into capital one half of it, i.e., 5,000. Let one-fifth of this be laid out in wages in accordance with the organic composition [of capital] in mechanised weaving. In this case we are disregarding the turnover of capital, which may perhaps enable him to carry on with an amount sufficient for five weeks, after which he would sell [his product] and so receive back from circulation the capital for the payment of wages. We are assuming that in the course of the year he will gradually lay out in wages (for 20 men) 1,000 which he must hold in reserve with his banker. Then 4,000 are to be converted into constant capital. Firstly he must purchase as much yarn as 20 men can weave during the year. (The turnover of the circulating part of capital is disregarded throughout.) Further, he must increase the number of looms in his factory, and perhaps install an additional steam-engine or enlarge the existing one, etc. But in order to purchase all these things, he must find yarn, looms etc. available on the market. He must convert his 4,000 into yarn, looms, coal etc., ||698| i.e., he must buy them. In order to buy them, they must be available. Since we have assumed that the reproduction of the old capital has taken place under the old conditions, the spinner of yarn has spent the whole of his capital in order to supply the amount of yarn required by the weavers during the previous year. How then is he to satisfy the additional demand by an additional supply of yarn? The position of the manufacturer of machines, who supplies looms etc. is just the same. He has produced only sufficient new looms in order to cover the average consumption in weaving. But the weaver who is keen on accumulation, orders yarn for 3,000 and for 1,000 looms, coal (since the position of the coal producer is the same), etc. Or in fact, he gives 3,000 to the spinner, and 1,000 to the machinery manufacturer and the coal merchant, etc., so that they will transform this money into yarn, looms and coal for him. He would thus have to wait until this process is completed before he could begin with his accumulation his production of new linen. This would be interruption number I. But now the owner of the spinning-mill finds himself in the same position with the 3,000 as the weaver with the 4,000, only he deducts his profit right away. He can find an additional number of spinners, but he needs flax, spindles, coal, etc. Similarly the coal producer [needs] new machinery or implements apart from the additional workers. And the owner of the engineering works who is supposed to supply the new looms, spindles, etc. [needs] iron and so forth, apart from additional labourers. But the position of the flax-grower is the worst of all, since he can supply the additional quantity of flax only in the following year. So that accumulation can be a continuous process and the weaver able to transform a portion of his profit into constant capital every year, without long-winded complications and interruptions, he must find an additional quantity of yarn, looms, etc. available on the market. He [the weaver], the spinner, the producer of coal, etc. require additional workers, only if they are able to obtain flax, spindles and machines on the market. A part of the constant capital which is calculated to be used up annually and enters as wear and tear into the value of the product, is in fact not used up. Take, for example, a machine which lasts twelve years and costs 12,000; its average wear and tear, which has to be charged each year, amounts to 1,000. Thus, since 1,000 is incorporated into the product each year, the value of 12,000 will have been reproduced at the end of the twelve years and a new, machine of the same kind can be bought for this price. The repairs and patching up which are required during the twelve years are reckoned as part of the production costs of the machine and have nothing to do with the question under discussion. In fact, however, reality differs from this calculation of averages. The machine may perhaps run more smoothly in the second year than in the first. And yet after twelve years it is no longer usable. It is the same as with an animal whose average life is ten years, but this does not mean that it dies by one-tenth each year, although at the end of ten years it must be replaced by a new individual. Naturally, during the course of a particular year, a certain quantity of machinery etc. always reaches the stage when it must actually be replaced by new machines. Each year, therefore, a certain quantity of old machinery etc. has in fact to be replaced in kind by new machines etc. And the average annual production of machinery etc. corresponds with this. The value with which they are to be paid for, lies ready; it is derived from the [proceeds of the] commodities, according to the reproduction period of the machines. But the fact remains, that although a large part of the value of the annual product, of the value which is paid for it each year, is needed to replace, for example, the old machines after twelve years, it is by no means actually required to replace one-twelfth in kind each year, and in fact this would not be feasible. This fund may be used partly for wages or for the purchase of raw material, before the commodity, which is constantly thrown into circulation but does not immediately return from circulation, is sold and paid for. This cannot, however, be the case throughout the whole year, since the commodities which complete their turnover during the year realise their whole value, and must therefore replace the wages, raw material and used up machinery contained in them, as well as pay surplus-value. Hence where much constant capital, and therefore also much fixed capital, is employed, that part of the value of the product which replaces the wear and tear of the fixed capital, provides an accumulation fund, which can be invested by the person controlling it, as new fixed capital (or also circulating capital), without any deduction whatsoever having to be made from the surplus-value for this part of the accumulation (see McCulloch). This accumulation fund does not exist at levels of production and in nations where there is not much fixed capital. This is an important point, It is a fund for the continuous introduction of improvements, expansions etc. But the point we want to make here is the following: Even if the total capital employed in machine-building were only large enough to replace the annual wear and tear of machinery, it would produce much more machinery each year than required, since in part the wear and tear merely exists nominally, and in reality it only has to be replaced in kind after a certain number of years. The capital thus employed, therefore yields annually a mass of machinery which is available for new capital investments and anticipates these new capital investments. For example, the factory of the machine-builder begins production, say, this year. He supplies 12,000 worth of machinery during the year. If he were merely to replace the machinery produced by him, he would only have to produce machinery worth 1,000 in each of the eleven following years and even this annual production would not be annually consumed. An even smaller part of his production would be used, if he invested the whole of his capital. A continuous expansion of production in the branches of industry which use these machines is required in order to keep his capital employed and merely to reproduce it annually ||699|. (An even greater expansion is required if he himself accumulates.) Thus even the mere reproduction of the capital invested in this sphere requires continuous accumulation in the remaining spheres of production. But because of this, one of the elements of continuous accumulation is always available on the market. Here, in one sphere of production even if only the existing capital is reproduced in this sphere exists a continuous supply of commodities for accumulation, for new, additional industrial consumption in other spheres. As regards the 5,000 profit or surplus-value which is to be transformed into capital, for instance by the weaver, there are two Possibilities always assuming that he finds available on the market the labour which he must buy with part of the 5,000, i.e., 1,000 in order to transform the 5,000 into capital according to the conditions prevailing in his sphere of production. This part [of the capitalised surplus-value] is transformed into variable capital and is laid out in wages. But in order to employ this labour, he requires yarn, additional auxiliary materials and additional machinery <unless the working-day is prolonged. In that case the machinery is merely used up faster, its reproduction period is curtailed, but at the same time more surplus-value is produced; and though the value of the machine has to be distributed over the commodities produced during a shorter period far more commodities are being produced, so that despite this more rapid depreciation of the machine, a smaller portion of machine value enters into the value or price of the individual commodity. In this case, no new capital has to be laid out directly in machinery. It is only necessary to replace the value of the machinery a little more rapidly. But additional capital must be laid out for auxiliary materials.> Either the weaver finds these, his conditions of production, on the market: then the purchase of these commodities only differs from that of other commodities by the fact that he buys commodities for industrial consumption instead of for individual consumption. Or he does not find these conditions of production on the market: then he must order them (as for instance machines of a new design), just as he has to order articles for his private consumption which are not readily available on the market. If the raw material (flax) were only produced to order <as, for instance, indigo, jute etc. are produced by the Indian Ryots to orders and with advances from English merchants>, then the linen weaver could not accumulate in his own business during that year. On the other hand, assuming, that the spinner converts the 5,000 into capital and that the weaver does not accumulate, then the spun yarn although all the conditions for its production were in supply on the market will be unsaleable and the 5,000 have in fact been transformed into yarn but not into capital. (Credit, which does not concern us further here, is the means whereby accumulated capital is not just used in that sphere in which it is created, but wherever it has the best chance of being turned to good account. Every capitalist will however prefer to invest his accumulation as far as possible in his own sphere of production. If he invests it in another, then he becomes a moneyed capitalist and instead of profit he draws only interest unless he goes in for speculative transactions. We are, however, concerned with average accumulation here and only [assume] for the sake of illustration that it is invested in a particular sphere.) If, on the other hand, the flax-grower had expanded his production, that is to say, had accumulated, and the spinner and weaver and machine-builder, etc. had not done so, then he would have superfluous flax in store and would probably produce less in the following year. <At present we are leaving individual consumption completely out of account and are only considering the mutual relations between producers. If these relations exist, then in the first place the producers constitute a market for the capitals which they must replace for one another. The newly employed, or more fully employed workers constitute a market for some of the means of subsistence; and since the surplus-value increases in the following year, the capitalists can consume an increasing part of their revenue, to a certain extent therefore they also constitute a market for one another. Even so, a large part of the annual product may still remain unsaleable.> The question has now to be formulated thus: assuming general accumulation, in other words, assuming that capital is accumulated to some extent in all branches of production this is in fact a condition of capitalist production and is just as much the urge of the capitalist as a capitalist, as the urge of the hoarder is the piling up of money (it is also a necessity if capitalist production is to go ahead) what are the conditions of this general accumulation, what does it amount to? Or, since the linen weaver may be taken to represent the capitalist in general, what are the conditions in which he can uninterruptedly reconvert the 5,000 surplus-value into capital and steadily continue the process of accumulation year in, year out? The accumulation of the 5,000 means nothing but the transformation of this money, this amount of value, into capital. The conditions for the accumulation of capital are thus the very same as those for its original production or for reproduction in general. These conditions, however, were: that labour was bought with one part of the money, and with the other, commodities raw material, machinery, etc. which could be consumed industrially by this labour. <Some commodities can only be consumed industrially, such as machinery, raw material, semi-finished goods; others, such as houses, horses, wheat (from which brandy or starch etc. is made), can be consumed industrially or individually.> These commodities can only be purchased, if they are available on the ||700| market as commodities in the intermediate stage when production is completed and consumption has not as yet begun, in the hands of the seller, in the stage of circulation or if they can be made to order (produced to order, as is the case with the construction of new factories etc.). Commodities were available this was presupposed in the production and reproduction of capital as a result of the division of labour carried out in capitalist production on a social scale (distribution of labour and capital between the different spheres of production); as a result of parallel production and reproduction which takes place simultaneously over the whole field. This was the condition of the market, of the production and the reproduction of capital. The greater the capital, the more developed the productivity of labour and the scale of capitalist production in general, the greater is also the volume of commodities found on the market, in circulation, in transition between production and consumption (individual and industrial), and the greater the certainty that each particular capital will find its conditions for reproduction readily available on the market. This is all the more the case, since it is in the nature of capitalist production that: 1. each particular capital operates on a scale which is not determined by individual demand (orders etc., private needs), but by the endeavour to realise as much labour and therefore as much surplus-labour as possible and to produce the largest possible quantity of commodities with a given capital; 2. each individual capital strives to capture the largest possible share of the market and to supplant its competitors and exclude them from the market competition of capitals. <The greater the development of the means of communication, the more can the stocks on the market be reduced. The accumulation of new capital can therefore proceed only under the same conditions as the reproduction of already existing capital. <We disregard here the case in which more capital is accumulated than can be invested in production, and for example lies fallow in the form of money at the bank. This results in loans abroad, etc., in short speculative investments. Nor do we consider the case in which it is impossible to sell the mass of commodities produced, crises etc. This belongs into the section on competition. Here we examine only the forms of capital in the various phases of its process, assuming throughout, that the commodities are sold at their value.> The weaver can reconvert the 5,000 surplus-value into capital, if besides labour for 1,000 he finds yarn etc. ready on the market or is able to obtain it to order; this presupposes the production of a surplus-product consisting of commodities which enter into his constant capital, particularly of those which require a longer period of production and whose volume cannot be increased rapidly, or cannot be increased at all during the course of the year, such as raw material, for example flax. <What comes into play here is the merchants capital, which keeps warehouses stocked with goods to meet growing individual and industrial consumption; but this is only a form of intermediary agency, hence does not belong here, but into the consideration of the competition of capitals.> Just as the production and reproduction of existing capital in one sphere presupposes parallel production and reproduction in other spheres, so accumulation or the formation of additional capital in one branch of production presupposes simultaneous or parallel creation of additional products in other branches of production. Thus the scale of production in all spheres which supply constant capital must grow simultaneously (in accordance with the average participation determined by the demand of each particular sphere in the general growth of production) and all spheres which do not produce finished products for individual consumption, supply constant capital. Of the greatest importance, is the increase in machinery (tools), raw material, and auxiliary material, for, if these preconditions are present, all other industries into which they enter, whether they produce semifinished or finished goods, only need to set in motion more labour. It seems therefore, that for accumulation to take place, continuous surplus production in all spheres is necessary. This will have to be more closely defined. Then there is the second essential question: The [part of] the surplus-value [or] in this case the part of profit (including rent; if the landlord wants to accumulate, to transform rent into capital, it is always the industrial capitalist who gets hold of the surplus-value; this applies even when the worker transforms a portion of his revenue into capital), which is reconverted into capital, consists only of labour newly added during ||701| the past year. The question is, whether this new capital is entirely expended on wages, i.e., exchanged only against new labour. The following speakes for this: All value is originally derived from labour. All constant capital is originally just as much the product of labour as is variable capital. And here we seem to encounter again the direct genesis of capital from labour. An argument against it is: Can one suppose that the formation of additional capital takes place under worse conditions of production than the reproduction of the old capital? Does a reversion to a lower level of production occur? This would have to be the case if the new value [were] spent only on immediate labour, which, without fixed capital etc., would thus also first have to produce this fixed capital, just as originally, labour had first to create its constant capital. This is sheer nonsense. But this is the assumption made by Ricardo, etc. This needs to be examined more closely. The first question is this: Can the capitalist transform a part of the surplus-value into capital by employing it directly as capital instead of selling the surplus-value, or rather the surplus-product in which it is expressed? An affirmative answer to this question would already imply that the whole of the surplus-value to be transformed into capital is not transformed into variable capital, or is not laid out in wages. With that part of the agricultural produce which consists of corn or livestock, this is clear from the outset. Some of the corn which belongs to that part of the harvest representing the surplus-product or the surplus-value of the farmer (similarly some of the livestock), instead of being sold, can at once serve again as means of production, as seed or draught animals. The same applies to that part of the manure produced on the land itself, which at the same time exists as commodity on the market, that is to say, can be sold. This part of the surplus-product which falls to the share of the farmer as surplus-value, as profit, can be at once transformed by him into means of production within his own branch of production, it is thus directly converted into capital. This part is not expended on wages; it is not transformed into variable capital. It is withdrawn from individual consumption without being consumed productively in the sense used by Smith and Ricardo. It is consumed industrially, but as raw material, not as means of subsistence either of productive or of unproductive workers. Corn, however, serves not only as means of subsistence for productive worker etc., but also as auxiliary material for livestock, as raw material for spirits, starch etc. Livestock (for fattening or draught animals) in turn serves not only as means of subsistence, but its fur, hide, fat, bones, horns etc. supply raw materials for a large number of industries, and it also provides motive power, partly for agriculture itself and partly for the transport industry. In all industries, in which the period of reproduction extends over more than a year, as is the case with a major part of livestock, timber etc., but whose products at the same time have to be continuously reproduced, thus requiring the application of a certain amount of labour, accumulation and reproduction coincide in so far as the newly-added labour, which includes not only paid but also unpaid labour, must be accumulated in kind, until the product is ready for sale. (We are not speaking here of the accumulation of the profit which according to the general rate of profit is added [to the capital] each year this is not real accumulation, but only a method of accounting. We are concerned here with the accumulation of the total labour which is repeated in the course of several years, during which not only paid, but also unpaid labour is accumulated in kind and at once reconverted into capital. The accumulation of profit is in such cases however independent of the quantity of newly-added labour.) The position is the same with commercial crops (whether they provide raw materials or auxiliary materials). Their seeds and that part of them which can be used again as manure etc., represent a portion of the total product. Even if this were unsaleable, it would not alter the fact that as soon as it becomes a means of production again, it forms a part of the total value and as ||702| such constitutes constant capital for new production. This settles one major point the question of raw materials and means of subsistence (food), in so far as they are actually agricultural products. Here therefore, accumulation coincides directly with reproduction on a larger scale, so that a part of the surplus-product serves again as a means of production in its own sphere, without being exchanged for wages or other commodities. The second important question relates to machinery. Not the machines which produce commodities, but the machines which produce machines, the constant capital of the machine producing industry. Given this machinery, the extractive industries require nothing but labour in order to provide the raw material, iron etc. for the production of containers and machines. And with the latter are produced the machines for working up the raw materials themselves. The difficulty here is not to get entangled in a vicious circle of presuppositions. For, in order to produce more machinery, more material is required (iron etc., coal etc.) and in order to produce this, more machinery is required. Whether we assume that industrialists who build machine-building machines and industrialists who manufacture machines (with the machine-building machines) are in one and the same category, does not alter the situation. This much is clear: One part of the surplus-product is embodied in machine-building machines (at least it is up to the manufacturers of machines to see that this happens). These need not be sold but can re-enter the new production in kind, as constant capital. This is therefore a second category of surplus-product which enters directly (or through exchange within the same sphere of production) as constant capital into the new production (accumulation), without having gone through the process of first being transformed into variable capital. The question whether a part of the surplus-value can be directly transformed into constant capital, resolves, in the first place, into the question whether a part of the surplus-product, in which the surplus-value is expressed, can directly re-enter its own sphere of production as a means of production, without first having been alienated. The general law is as follows: Where a part of the product, and therefore also of the surplus-product (i.e., the use-value in which the surplus-value is expressed) can re-enter as a means of production as instrument of labour or material of labour into the sphere of production from which it came, directly, without an intermediary phase, accumulation within this sphere of production can and must take place in such a way that a part of the surplus-product, instead of being sold, is as a means of production re-incorporated into the reproduction process directly (or through exchange with other specialists in the same sphere of production who are similarly accumulating), so that accumulation and reproduction on a larger scale coincide here directly. They must coincide everywhere, but not in this direct manner. This also applies to a part of the auxiliary materials. For example to the coal produced in a year. A part of the surplus-product can itself be used to produce more coal and can therefore be used up again directly by its producer, without any intermediary phase, as constant capital for production on a larger scale. In industrial areas there are machine-builders who build whole factories for the manufacturers. Let us assume one-tenth is surplus-product or unpaid labour. Whether this tenth, the surplus-product, consists of factory buildings which are built for a third party and are sold to them, or of factory buildings which the producer builds for himself sells to himself clearly makes no difference. The only thing that matters here is whether the kind of use-value in which the surplus-labour is expressed, can re-enter as means of production into the sphere of production ||703| of the capitalist to whom the surplus-product belongs. This is yet another example of how important is the analysis of use-value for the determination of economic phenomena. Here, therefore, we already have a considerable portion of the surplus-product, and therefore of the surplus-value, which can and must be transformed directly into constant capital, in order to be accumulated as capital and without which no accumulation of capital can take place at all. Secondly, we have seen that where capitalist production is developed, that is, where the productivity of labour, the constant capital and particularly that part of constant capital which consists of fixed capital are developed, the mere reproduction of fixed capital in all spheres and the parallel reproduction of the existing capital which produces fixed capital, forms an accumulation fund, that is to say, provides machinery, i.e., constant capital, for production on an extended scale. Thirdly: There remains the question: Can a part of the surplus-product be re-transformed into capital (that is constant capital) through an (intermediary) exchange between the producer, for example of machinery, implements of labour etc. and the producer of raw material, iron, coal, metals, timber etc., that is, through the exchange of various components of constant capital? If, for example, the manufacturer of iron, coal, timber, etc., buys machinery or tools from the machine-builder and the machine-builder buys metal, timber, coal etc. from the primary producer, then they replace or form new constant capital through this exchange of the reciprocal component parts of their constant capital. The question here is: to what extent is the sur plus-product converted in this way? We saw earlier, that in the simple reproduction of the advanced capital, the portion of the constant capital which is used up in the reproduction of constant capital is replaced either directly in kind or through exchange between the producers of constant capital an exchange of capital against capital and not of revenue against revenue or revenue against capital. Moreover, the constant capital which is used up or consumed industrially in the production of consumable goods commodities which enter into individual consumption is replaced by new products of the same kind, which are the result of newly-added labour, and therefore resolve into revenue (wages and profit). Accordingly, therefore, in the spheres which produce consumable goods, the portion of the total product, which is equal to the portion of their value which replaces their constant capital, represents the revenue of the producers of constant capital; while, on the other hand, in the spheres which produce constant capital, the part of the total product which represents newly-added labour and therefore forms the revenue of the producers of this constant capital, represents the constant capital (replacement capital) of the producers of the means of subsistence. This presupposes, therefore, that the producers of constant capital exchange their surplus-product (which means here, the excess of their product over that part of it which is equal to their constant capital) against means of subsistence, and consume its value individually. This surplus-product, however, consists of: 1. wages (or the reproduced fund for wages), and this portion must continue to be allocated (by the capitalist) for paying out wages, that is, for individual consumption (and assuming a minimum wage, the worker too can only convert the wages he receives, into means of subsistence); 2. the profit of the capitalist (including rent). If this portion is large enough, it can be consumed partly individually and partly industrially, And in this latter case, an exchange of products takes place between the producers of constant capital; this is, however, no longer an exchange of the portion of their products representing their constant capital which has to be mutually replaced between them, but is an exchange of a part of their surplus-product, revenue (newly-added labour) which is directly transformed into constant capital, thus increasing the amount of constant capital and expanding the scale of reproduction. In this case, too, therefore a part of the existing surplus-product, that is, of the labour which has been newly added during the year, is transformed directly into constant capital, without first having been converted into variable capital. This demonstrates again that the industrial consumption of the surplus-product or accumulation is by no means identical with the conversion of the entire surplus-product into wages paid to productive workers. It is quite possible that the manufacturer of machines sells (part of) his commodity to the producer, say, of cloth. The latter pays him in money. With this money he purchases iron, coal etc. instead of means of subsistence. But when one considers the process as a whole, it is evident that the producers of means of subsistence cannot purchase any replacement machinery or replacement raw materials, unless the producers of the replacements of constant capital buy their means of subsistence from them, in other words, unless this circulation is fundamentally an exchange between means of subsistence and constant capital. The separation of the acts of buying and selling can of course cause considerable disturbances and complications in this compensatory process. ||704| If a country cannot itself produce the amount of machinery required for the accumulation of capital, then it buys it from abroad. The same happens if it cannot itself produce a sufficient quantity of means of subsistence (for wages) and the raw material. As soon as international trade intervenes, it becomes quite obvious that a part of the surplus-product of a country in so far as it is intended for accumulation is not transformed into wages, but directly into constant capital. But then there may remain the notion that over there, in the foreign country, the money thus laid out is spent entirely on wages. We have seen that, even leaving foreign trade out of account, this is not so and cannot be so. The proportion in which the surplus-product is divided between variable and constant capital, depends on the average composition of capital, and the more developed capitalist production is, the smaller, relatively, will be the part which is directly laid out in wages. The idea that, because the surplus-product is solely the product of the labour newly added during the year, it can therefore only be converted into variable capital, i.e., only be laid out in wages, corresponds altogether to the false conception that because the product is only the result, or the materialisation, of labour, its value is resolved only into revenue wages, profit, and rent the false conception of Smith and Ricardo. A large part of constant capital, namely, the fixed capital, may enter directly into the process of the production of means of subsistence, raw materials etc., or it may serve either to shorten the circulation process, like railways, roads, navigation, telegraphs etc, or to store and accumulate stocks of commodities like docks, warehouses etc., alternatively it may increase the yield only after a long period of reproduction, as for instance levelling operations, drainage etc. The direct consequences for the reproduction of the means of subsistence etc. will be very different according to whether a greater or smaller part of the surplus-product is converted into one of these types of fixed capital. If expanded production of constant capital is assumed that is greater production than is required for the replacement of the former capital and therefore also for the production of the former quantity of means of subsistence expanded production or accumulation in the spheres using the machinery, raw materials etc. encounters no further difficulties. If sufficient additional labour is available, they [the manufacturers] will find on the market all the means for the formation of new capital, for the transformation of their additional money into new capital. But the whole process of accumulation in the first place resolves itself into production on an expanding scale, which on the one hand corresponds to the natural growth of the population, and on the other hand, forms an inherent basis for the phenomena which appear during crises. The criterion of this expansion of production is capital itself, the existing level of the conditions of production and the unlimited desire of the capitalists to enrich themselves and to enlarge their capital, but by no means consumption, which from the outset is inhibited, since the majority of the population, the working people, can only expand their consumption within very narrow limits, whereas the demand for labour, although it grows absolutely, decreases relatively, to the same extent as capitalism develops. Moreover, all equalisations are accidental and although the proportion of capital employed in individual spheres is equalised by a continuous process, the continuity of this process itself equally presupposes the constant disproportion which it has continuously, often violently, to even out. Here we need only consider the forms which capital passes through in the various stages of its development. The real conditions within which the actual process of production takes place are therefore not analysed. It is assumed throughout, that the commodity is sold at its value. We do not examine the competition of capitals, nor the credit system, nor the actual composition of society, which by no means consists only of two classes, workers and industrial capitalists, and where therefore consumers and producers are not identical categories. The first category, that of the consumers (whose revenues are in part not primary, but secondary, derived from profit and wages), is much broader than the second category [producers], and therefore the way in which they spend their revenue, and the very size of the revenue give rise to very considerable modifications in the economy and particularly in the circulation and reproduction process of capital. Nevertheless, just as the examination of money both in so far as it represents a form altogether different from the natural form of commodities, and also in its form as means of payment has shown that it contained the possibility of crises; the examination of the general nature of capital, even without going further into the actual relations which all constitute prerequisites for the real process of production, reveals this still more clearly. ||705| The conception (which really belongs to [James] Mill), adopted by Ricardo from the tedious Say (and to which we shall return when we discuss that miserable individual), that overproduction is not possible or at least that no general glut of the market is possible, is based on the proposition that products are exchanged against products, or as Mill put it, on the metaphysical equilibrium of sellers and buyers , and this led to [the conclusion] that demand is determined only by production, or also that demand and supply are identical. The same proposition exists also in the form, which Ricardo liked particularly, that any amount of capital can be employed productively in any country. Ricardo, who always strives to be consistent, discovers that his authority, Say, is playing a trick on him here. He makes the following comment in a footnote to this passage: Since Ricardo cites Say, we shall criticise Say s theories later, when we deal with this humbug himself. Meanwhile we just note here: In reproduction, just as in the accumulation of capital, it is not only a question of replacing the same quantity of use-values of which capital consists, on the former scale or on an enlarged scale (in the case of accumulation), but of replacing the value of the capital advanced along with the usual rate of profit (surplus-value). If, therefore, through any circumstance or combination of circumstances, the market-prices of the commodities (of all or most of them, it makes no difference) fall far below their cost-prices, then reproduction of capital is curtailed as far as possible. Accumulation, however, stagnates even more. Surplus-value amassed in the form of money (gold or notes) could only be transformed into capital at a loss. It therefore lies idle as a hoard in the banks or in the form of credit money, which in essence makes no difference at all. The same hold up could occur for the opposite reasons, if the real prerequisites of reproduction were missing (for instance if grain became more expensive or because not enough constant capital had been accumulated in kind). There occurs a stoppage in reproduction, and thus in the flow of circulation. Purchase and sale get bogged down and unemployed capital appears in the form of idle money. The same phenomenon (and this usually precedes crises) can appear when additional capital is produced at a very rapid rate and its reconversion into productive capital increases the demand for all the elements of the latter to such an extent that actual production cannot keep pace with it; this brings about a rise in the prices of all commodities, which enter into the formation of capital. In this case the rate of interest falls sharply, however much the profit may rise and this fall in the rate of interest then leads to the most risky speculative ventures. The interruption of the reproduction process leads to the decrease in variable capital, to a fall in wages and in the quantity of labour employed. This in turn reacts anew on prices and leads to their further fall. It must never be forgotten, that in capitalist production what matters is not the immediate use-value but the exchange-value and, in particular, the expansion of surplus-value. This is the driving motive of capitalist production, and it is a pretty conception that in order to reason away the contradictions of capitalist production abstracts from its very basis and depicts it as a production aiming at the direct satisfaction of the consumption of the producers. Further: since the circulation process of capital is not completed in one day but extends over a fairly long period until the capital returns to its original form, since this period coincides with the period within which market-prices ||706| equalise with cost-prices, and great upheavals and changes take place in the market in the course of this period, since great changes take place in the productivity of labour and therefore also in the real value of commodities, it is quite clear, that between the starting-point, the prerequisite capital, and the time of its return at the end of one of these periods, great catastrophes must occur and elements of crisis must have gathered and develop, and these cannot in any way be dismissed by the pitiful proposition that products exchange for products. The comparison of value in one period with the value of the same commodities in a later period is no scholastic illusion, as Mr. Bailey maintains, but rather forms the fundamental principle of the circulation process of capital. When speaking of the destruction of capital through crises, one must distinguish between two factors. In so far as the reproduction process is checked and the labour-process is restricted or in some instances is completely stopped, real capital is destroyed. Machinery which is not used is not capital. Labour which is not exploited is equivalent to lost production. Raw material which lies unused is no capital. Buildings (also newly built machinery) which are either unused or remain unfinished, commodities which rot in warehouses all this is destruction of capital. All this means that the process of reproduction is checked and that the existing means of production are not really used as means of production, are not put into operation. Thus their use-value and their exchange-value go to the devil. Secondly, however, the destruction of capital through crises means the depreciation of values which prevents them from later renewing their reproduction process as capital on the same scale. This is the ruinous effect of the fall in the prices of commodities. It does not cause the destruction of any use-values. What one loses, the other gains. Values used as capital are prevented from acting again as capital in the hands of the same person. The old capitalists go bankrupt. If the value of the commodities from whose sale a capitalist reproduces his capital was equal to 12,000, of which say 2,000 were profit, and their price falls to 6,000, then the capitalist can neither meet his contracted obligations nor, even if he had none, could he, with the 6,000 restart his business on the former scale, for the commodity prices have risen once more to the level of their cost-prices. In this way, 6,000 has been destroyed, although the buyer of these commodities, because he has acquired them at half their cost-price, can go ahead very well once business livens up again, and may even have made a profit. A large part of the nominal capital of the society, i.e., of the exchange-value of the existing capital, is once for all destroyed, although this very destruction, since it does not affect the use-value, may very much expedite the new reproduction. This is also the period during which moneyed interest enriches itself at the cost of industrial interest. As regards the fall in the purely nominal capital, State bonds, shares etc. in so far as it does not lead to the bankruptcy of the state or of the share company, or to the complete stoppage of reproduction through undermining the credit of the industrial capitalists who hold such securities it amounts only to the transfer of wealth from one hand to another and will, on the whole, act favourably upon reproduction, since the parvenus into whose hands these stocks or shares fall cheaply, are mostly more enterprising than their former owners. To the best of his knowledge, Ricardo is always consistent. For him, therefore, the statement that no over-production (of commodities) is possible, is synonymous with the statement that no plethora or over-abundance of capital is possible.* What then would Ricardo have said to the stupidity of his successors, who deny over-production in one form (as a general glut of commodities in the market) and who, not only admit its existence in another form, as over-production of capital, plethora of capital, over-abundance of capital, but actually turn it into an essential point in their doctrine? Not a single responsible economist of the post-Ricardian period denies the plethora of capital. On the contrary, all of them regard it as the cause of crises (in so far as they do not explain the latter by factors relating to credit). Therefore, they all admit over production in one form but deny its existence in another. The only remaining question thus is: what is the relation between these two forms of over-production, i.e., between the form in which it is denied and the form in which it is asserted? Ricardo himself did not actually know anything of crises, of general crises of the world market, arising out of the production process itself. He could explain that the crises which occurred between 1800 and 1815, were caused by the rise in the price of corn due to poor harvests, by the devaluation of paper currency, the depreciation of colonial products etc., because, in consequence of the continental blockade, the market was forcibly contracted for political and not economic reasons. He was also able to explain the crises after 1815, partly by a bad year and a shortage of corn, and partly by the fall in corn prices, because those causes which, according to his own theory, had forced up the price of corn during the war when England was cut off from the continent, had ceased to operate; partly by the transition from war to peace which brought about sudden changes in the channels of trade [l.c., p. 307). (See Chapter XIX On Sudden Changes in the Channels of Trade of his Principles.) Later historical phenomena, especially the almost regular periodicity of crises on the world market, no longer permitted Ricardo s successors to deny the facts or to interpret them as accidental. Instead apart from those who explain everything by credit, but then have to admit that they themselves are forced to presuppose the over-abundance of capital they invented the nice distinction between over-abundance of capital and overproduction. Against the latter, they arm themselves with the phrases and good reasons used by Ricardo and Adam Smith, while by means of the over-abundance of capital they attempt to explain phenomena that they are otherwise unable to explain. Wilson, for example; explains certain crises by the overabundance of fixed capital, while he explains others by the overabundance of circulating capital. The over-abundance of capital itself is affirmed by the best economists (such as Fullarton), and has already become a matter of course to such an extent, that it can even be found in the learned Roscher s compendium as a self-evident fact. The question is, therefore, what is the over-abundance of capital and how does it differ from over-production? (In all fairness however, it must be said, that other economists, such as Ure, Corbet etc., declare over-production to be the usual condition in large-scale industry, so far as the home country is concerned and that it thus only leads to crises under certain circumstances, in which the foreign market also contracts.) According to the same economists, capital is equivalent to money or commodities. Over-production of capital is thus overproduction of money or of commodities. And yet these two phenomena are supposed to have nothing in common with each other, Even the over-production of money [is of] no [avail], since money for them is a commodity, so that the entire phenomenon resolves into one of over-production of commodities which they admit under one name and deny under another. Moreover, the statement that there is over-production of fixed capital or of circulating capital, is based on the fact that commodities are here no longer considered in this simple form, but in their designation as capital. This, however, is an admission that in capitalist ||708| production and its phenomena e.g., over-production it is a question not only of the simple relationship in which the product appears, is designated, as commodity, but of its designation within the social framework, it thereby becomes something more than, and also different from, a commodity. Altogether, the phrase over-abundance of capital instead of over-production of commodities in so far as it is not merely a prevaricating expression, or unscrupulous thoughtlessness, which admits the existence and necessity of a particular phenomenon when it is called A, but denies it as soon as it is called B, in fact therefore showing scruples and doubts only about the name of the phenomenon and not the phenomenon itself; or in so far as it is not merely an attempt to avoid the difficulty of explaining the phenomenon, by denying it in one form (under one name) in which it contradicts existing prejudices and admitting it in a form only in which it becomes meaningless apart from these aspects, the transition from the phrase over-production of commodities to the phrase over-abundance of capital is indeed an advance. In what does this consist? In [expressing the fact], that the producers confront one another not purely as owners of commodities, but as capitalists. A few more passages from Ricardo: (That is to say, money is merely a means of circulation, and exchange-value itself is merely a fleeting aspect of the exchange of product against product which is wrong.) So far as crises are concerned, all those writers who describe the real movement of prices, or all experts, who write in the actual situation of a crisis, have been right in ignoring the allegedly theoretical twaddle and in contenting themselves with the idea that what may be true in abstract theory namely, that no gluts of the market and so forth are possible is, nevertheless, wrong in practice. The constant recurrence of crises has in fact reduced the rigmarole of Say and others to a phraseology which is now only used in times of prosperity but is cast aside in times of crises. ||709| In the crises of the world market, the contradictions and antagonisms of bourgeois production are strikingly revealed. Instead of investigating the nature of the conflicting elements which errupt in the catastrophe, the apologists content themselves with denying the catastrophe itself and insisting, in the face of their regular and periodic recurrence, that if production were carried on according to the textbooks, crises would never occur. Thus the apologetics consist in the falsification of the simplest economic relations, and particularly in clinging to the concept of unity in the face of contradiction. If, for example, purchase and sale or the metamorphosis of commodities represent the unity of two processes, or rather the movement of one process through two opposite phases, and thus essentially the unity of the two phases, the movement is essentially just as much the separation of these two phases and their becoming independent of each other. Since, however, they belong together, the independence of the two correlated aspects can only show itself forcibly, as a destructive process. It is just the crisis in which they assert their unity, the unity of the different aspects. The independence which these two linked and complimentary phases assume in relation to each other is forcibly destroyed. Thus the crisis manifests the unity of the two phases that have become independent of each other. There would be no crisis without this inner unity of factors that are apparently indifferent to each other. But no, says the apologetic economist. Because there is this unity, there can be no crises. Which in turn means nothing but that the unity of contradictory factors excludes contradiction. In order to prove that capitalist production cannot lead to general crises, all its conditions and distinct forms, all its principles and specific features in short capitalist production itself are denied. In fact it is demonstrated that if the capitalist mode of production had not developed in a specific way and become a unique form of social production, but were a mode of production dating back to the most rudimentary stages, then its peculiar contradictions and conflicts and hence also their eruption in crises would not exist. Here, therefore, firstly commodity, in which the contradiction between exchange-value and use-value exists, becomes mere product (use-value) and therefore the exchange of commodities is transformed into mere barter of products, of simple use-values. This is a return not only to the time before capitalist production, but even to the time before there was simple commodity production; and the most complicated phenomenon of capitalist production the world market crisis is flatly denied, by denying the first condition of capitalist production, namely, that the product must be a commodity and therefore express itself as money and undergo the process of metamorphosis. Instead of speaking of wage-labour, the term services is used. This word again omits the specific characteristic of wage-labour and of its use namely, that it increases the value of the commodities against which it is exchanged, that it creates surplus-value and in doing so, it disregards the specific relationship through which money and commodities are transformed into capital. Service is labour seen only as use-value (which is a side issue in capitalist production) just as the term productions fails to express the essence of commodity and its inherent contradiction. It is quite consistent that money is then regarded merely as an intermediary in the exchange of products, and not as an essential and necessary form of existence of the commodity which must manifest itself as exchange-value, as general social labour. Since the transformation of the commodity into mere use-value (product) obliterates the essence of ||710| exchange-value, it is just as easy to deny, or rather it is necessary to deny, that money is an essential aspect of the commodity and that in the process of metamorphosis it is independent of the original form of the commodity. Crises are thus reasoned out of existence here by forgetting or denying the first elements of capitalist production: the existence of the product as a commodity, the duplication of the commodity in commodity and money, the consequent separation which takes place in the exchange of commodities and finally the relation of money or commodities to wage-labour. Incidentally, those economists are no better, who (like John Stuart Mill) want to explain the crises by these simple possibilities of crisis contained in the metamorphosis of commodities such as the separation between purchase and sale. These factors which explain the possibility of crises, by no means explain their actual occurrence. They do not explain why the phases of the process come into such conflict that their inner unity can only assert itself through a crisis, through a violent process. This separation appears in the crisis; it is the elementary form of the crisis. To explain the crisis on the basis of this, its elementary form, is to explain the existence of the crisis by describing its most abstract form, that is to say, to explain the crisis by the crisis. This is the childish babble of a Say, but it is not worthy of Ricardo. In the first place, no capitalist produces in order to consume his product. And when speaking of capitalist production, it is right to say that: no man produces with a view to consume his own product , even if he uses portions of his product for industrial consumption. But here the point in question is private consumption. Previously it was forgotten that the product is a commodity. Now even the social division of labour is forgotten. In a situation where men produce for themselves, there are indeed no crises, but neither is there capitalist production. Nor have we ever heard that the ancients, with their slave production ever knew crises, although individual producers among the ancients too, did go bankrupt. The first part of the alternative is nonsense. The second as well. A man who has produced, does not have the choice of selling or not selling. He must sell. In the crisis there arises the very situation in which he cannot sell or can only sell below the cost-price or must even sell at a positive loss. What difference does it make, therefore, to him or to us that he has produced in order to sell? The very question we want to solve is what has thwarted this good intention of his? Further: What a cosy description of bourgeois conditions! Ricardo even forgets that a person may sell in order to pay, and that these forced sales play a very significant role in the crises. The capitalist s immediate object in selling, is to turn his commodity, or rather his commodity capital, back into money capital, and thereby to realise his profit. Consumption revenue is by no means the guiding motive in this process, although it is for the person who only sells commodities in order to transform them into means of subsistence. But this is not capitalist production, in which revenue appears as the result and not as the determining purpose. Everyone sells first of all in order to sell, that is to say, in order to transform commodities into money. ||711| During the crisis, a man may be very pleased, if he has sold his commodities without immediately thinking of a purchase. On the other hand, if the value that has been realised is again to be used as capital, it must go through the process of reproduction, that is, it must be exchanged for labour and commodities. But the crisis is precisely the phase of disturbance and interruption of the process of reproduction. And this disturbance cannot be explained by the fact that it does not occur in those times when there is no crisis. There is no doubt that no one will continually produce a commodity for which there is no demand (l.c., p. 340), but no one is talking about such an absurd hypothesis. Nor has it anything to do with the problem. The immediate purpose of capitalist production is not the possession of other goods , but the appropriation of value, of money, of abstract wealth. Ricardo s statements here are also based on James Mills s proposition on the metaphysical equilibrium of purchases and sales , which I examined previously an equilibrium which sees only the unity, but not the separation in the processes of purchase and sale, Hence also Ricardo s assertion (following James Mill): Money is not only the medium by which the exchange is effected (l.c., p. 341), but at the same time the medium by which the exchange of product with product is divided into two acts, which are independent of each other, and separate in time and space. With Ricardo, however, this false conception of money is due to the fact that he concentrates exclusively on the quantitative determination of exchange-value, namely, that it is equal to a definite quantity of labour-time, forgetting on the other hand the qualitative characteristic, that individual labour must present itself as abstract, general social labour only through its alienation.* That only particular commodities, and not all kinds of commodities, can form a glut in the market and that therefore over-production can always only be partial, is a poor way out. In the first place, if we consider only the nature of the commodity, there is nothing to prevent all commodities from being superabundant on the market, and therefore all falling below their price. We are here only concerned with the factor of crisis. That is all commodities, apart from money [may be superabundant]. [The proposition] the commodity must be converted into money, only means that: all commodities must do so. And just as the difficulty of undergoing this metamorphosis exists for an individual commodity, so it can exist for all commodities. The general nature of the metamorphosis of commodities which includes the separation of purchase and sale just as it does their unity instead of excluding the possibility of a general glut, on the contrary, contains the possibility of a general glut. Ricardo s and similar types of reasoning are moreover based not only on the relation of purchase and sale, but also on that of demand and supply, which we have to examine only when considering the competition of capitals. As Mill says purchase is sale etc., therefore demand is supply and supply demand. But they also fall apart and can become independent of each other. At a given moment, the supply of all commodities can be greater than the demand for all commodities, since the demand for the general commodity, money, exchange-value, is greater than the demand for all particular commodities, in other words the motive to turn the commodity into money, to realise its exchange-value, prevails over the motive to transform the commodity again into use-value. If the relation of demand and supply is taken in a wider and more concrete sense, then it comprises the relation of production and consumption as well. Here again, the unity of these two phases, which does exist and which forcibly asserts itself during the crisis, must be seen as opposed to the separation and antagonism of these two phases, separation and antagonism which exist just as much, and are moreover typical of bourgeois production. With regard to the contradiction between partial and universal over-production, in so far as the existence of the former is affirmed in order to evade the latter, the following observation may be made: Firstly: Crises are usually preceded by a general inflation in prices of all articles of capitalist production. All of them therefore participate in the subsequent crash and at their former prices they cause a glut in the market. The market can absorb a larger volume of commodities at falling prices, at prices which have fallen below their cost-prices, than it could absorb at their former prices. The excess of commodities is always relative; in other words it is an excess at particular prices. The prices at which the commodities are then absorbed are ruinous for the producer or merchant. ||712| Secondly: For a crisis (and therefore also for over-production) to be general, it suffices for it to affect the principal commercial goods. Let us take a closer look at how Ricardo seeks to deny the possibility of a general glut in the market: Could there be a more childish argument? It runs like this: more of a particular commodity may be produced than can be consumed of it; but this cannot apply to all commodities at the same time. Because the needs, which the commodities satisfy, have no limits and all these needs are not satisfied at the same time. On the contrary. The fulfilment of one need makes another, so to speak, latent. Thus nothing is required, but the means to satisfy these wants, and these means can only be provided through an increase in production. Hence no general overproduction is possible. What is the purpose of all this? In periods of over-production, a large part of the nation (especially the working class) is less well provided than ever with corn, shoes etc., not to speak of wine and furniture. If over-production could only occur when all the members of a nation had satisfied even their most urgent needs, there could never, in the history of bourgeois society up to now, have been a state of general over-production or even of partial over-production. When, for instance, the market is glutted by shoes or calicoes or wines or colonial products, does this perhaps mean that four-sixths of the nation have more than satisfied their needs in shoes, calicoes etc.? What after all has over-production to do with absolute needs? It is only concerned with demand that is backed by ability to pay. It is not a question of absolute over-production over-production as such in relation to the absolute need or the desire to possess commodities. In this sense there is neither partial nor general over-production; and the one is not opposed to the other. But Ricardo will say when there are a lot of people who want shoes and calicoes, why do they not obtain the means to acquire them, by producing something which will enable them to buy shoes and calicoes? Would it not be even simpler to say: Why do they not produce shoes and calicoes for themselves? An even stranger aspect of over-production is that the workers, the actual producers of the very commodities which glut the market, are in need of these commodities. It cannot be said here that they should produce things in order to obtain them, for they have produced them and yet they have not got them. Nor can it be said that a particular commodity gluts the market, because no one is in want of it. If, therefore, it is even impossible to explain that partial over-production arises because the demand for the commodities that glut the market has been more than satisfied, it is quite impossible to explain away universal over-production by declaring that needs, unsatisfied needs, exist for many of the commodities which are on the market. Let us keep to the example of the weaver of calico. So long as reproduction continued uninterruptedly and therefore also the phase of this reproduction in which the product existing as a saleable commodity, the calico, was reconverted into money, at its value so long, shall we say, the workers who produced the calico, also consumed a part of it, and with the expansion of reproduction, that is to say, with accumulation, they were consuming more of it, or also more workers were employed in the production of calico, who also consumed part of it. Now before we proceed further, the following must be said: The possibility of crisis, which became apparent in the simple metamorphosis of the commodity, is once more demonstrated, and further developed, by the disjunction between the (direct) process of production and the process of circulation. As soon as these processes do not merge smoothly into one another ||713| but become independent of one another, the crisis is there. The possibility of crisis is indicated in the metamorphosis of the commodity like this: Firstly, the commodity which actually exists as use-value, and nominally, in its price, as exchange-value, must be transformed into money. C-M. If this difficulty, the sale, is solved then the purchase, M-C, presents no difficulty, since money is directly exchangeable for everything else. The use-value of the commodity, the usefulness of the labour contained in it, must be assumed from the start, otherwise it is no commodity at all. It is further assumed that the individual value of the commodity is equal to its social value, that is to say, that the labour-time materialised in it is equal to the socially necessary labour-time for the production of this commodity. The possibility of a crisis, in so far as it shows itself in the simple form of metamorphosis, thus only arises from the fact that the differences in form the phases which it passes through in the course of its progress, are in the first place necessarily complimentary and secondly, despite this intrinsic and necessary correlation, they are distinct parts and forms of the process, independent of each other diverging in time and space, separable and separated from each other. The possibility of crisis therefore lies solely in the separation of sale from purchase. It is thus only in the form of commodity that the commodity has to pass through this difficulty here. As soon as it assumes the form of money it has got over this difficulty. Subsequently however this too resolves into the separation of sale and purchase. If the commodity could not be withdrawn from circulation in the form of money or its retransformation into commodity could not be postponed as with direct barter if purchase and sale coincided, then the possibility of crisis would, under the assumptions made, disappear. For it is assumed that the commodity represents use-value for other owners of commodities. In the form of direct barter, the commodity is not exchangeable only if it has no use-value or when there are no other use-values on the other side which can be exchanged for it; therefore, only under these two conditions: either if one side has produced useless things or if the other side has nothing useful to exchange as an equivalent for the first use-value. In both cases, however, no exchange whatsoever would take place. But in so far as exchange did take place, its phases would not be separated. The buyer would be seller and the seller buyer. The critical stage, which arises from the form of the exchange in so far as it is circulation would therefore cease to exist, and if we say that the simple form of metamorphosis comprises the possibility of crisis, we only say that in this form itself lies the possibility of the rupture and separation of essentially complimentary phases. But this applies also to the content. In direct barter, the bulk of production is intended by the producer to satisfy his own needs, or, where the division of labour is more developed, to satisfy the needs of his fellow producers, needs that are known to him. What is exchanged as a commodity is the surplus and it is unimportant whether this surplus is exchanged or not. In commodity production the conversion of the product into money, the sale, is a conditio sine qua non. Direct production for personal needs does not take place. Crisis results from the impossibility to sell. The difficulty of transforming the commodity the particular product of individual labour into its opposite, money, i.e., abstract general social labour, lies in the fact that money is not the particular product of individual labour, and that the person who has effected a sale, who therefore has commodities in the form of money, is not compelled to buy again at once, to transform the money again into a particular product of individual labour. In barter this contradiction does not exist: no one can be a seller without being a buyer or a buyer without being a seller. The difficulty of the seller on the assumption that his commodity has use-value only stems from the ease with which the buyer can defer the retransformation of money into commodity. The difficulty of converting the commodity into money, of selling it, only arises from the fact that the commodity must be turned into money but the money need not be immediately turned into commodity, and therefore sale and purchase can be separated. We have said that this form contains the possibility of crisis, that is to say, the possibility that elements which are correlated, which are inseparable, are separated and consequently are forcibly reunited, their coherence is violently asserted against their mutual independence. ||714| Crisis is nothing but the forcible assertion of the unity of phases of the production process which have become independent of each other. The general, abstract possibility of crisis denotes no more than the most abstract form of crisis, without content, without a compelling motivating factor. Sale and purchase may fall apart. They thus represent potential crisis and their coincidence always remains a critical factor for the commodity. The transition from one to the other may, however, proceed smoothly, The most abstract form of crisis (and therefore the formal possibility of crisis) is thus the metamorphosis of the commodity itself; the contradiction of exchange-value and use-value, and furthermore of money and commodity, comprised within the unity of the commodity, exists in metamorphosis only as an involved movement. The factors which turn this possibility of crisis into [an actual] crisis are not contained in this form itself; it only implies that the framework for a crisis exists. And in a consideration of the bourgeois economy, that is the important thing. The world trade crises must be regarded as the real concentration and forcible adjustment of all the contradictions of bourgeois economy. The individual factors, which are condensed in these crises, must therefore emerge and must be described in each sphere of the bourgeois economy and the further we advance in our examination of the latter, the more aspects of this conflict must be traced on the one hand, and on the other hand it must be shown that its more abstract forms are recurring and are contained in the more concrete forms. It can therefore be said that the crisis in its first form is the metamorphosis of the commodity itself, the falling asunder of purchase and sale. The crisis in its second form is the function of money as a means of payment, in which money has two different functions and figures in two different phases, divided from each other in time. Both these forms are as yet quite abstract, although the second is more concrete than the first. To begin with therefore, in considering the reproduction process of capital (which coincides with its circulation) it is necessary to prove that the above forms are simply repeated, or rather, that only here they receive a content, a basis on which to manifest themselves. Let us look at the movement of capital from the moment in which it leaves the production process as a commodity in order once again to emerge from it as a commodity. If we abstract here from all the other factors determining its content, then the total commodity capital and each individual commodity of which it is made up, must go through the process C M C, the metamorphosis of the commodity. The general possibility of crisis, which is contained in this form the falling apart of purchase and sale is thus contained in the movement of capital, in so far as the latter is also commodity and nothing but commodity. From the interconnection of the metamorphoses of commodities it follows, moreover, that one commodity is transformed into money because another is retransformed from the form of money into commodity. Furthermore, the separation of purchase and sale appears here in such a way that the transformation of one capital from the form commodity into the form money, must correspond to the retransformation of the other capital from the form money into the form commodity. The first metamorphosis of one capital must correspond to the second metamorphosis of the other; one capital leaves the production process as the other capital returns into the production process. This intertwining and coalescence of the processes of reproduction or circulation of different capitals is on the one hand necessitated by the division of labour, on the other hand it is accidental; and thus the definition of the content of crisis is already fuller. Secondly, however, with regard to the possibility of crisis arising from the form of money as means of payment, it appears that capital may provide a much more concrete basis for turning this possibility into reality. For example, the weaver must pay for the whole of the constant capital whose elements have been produced by the spinner, the flax-grower, the machine-builder, the iron and timber manufacturer, the producer of coal etc. In so far as these latter produce constant capital that only enters into the production of constant capital, without entering into the cloth, the final commodity, they replace each other s means of production through the exchange of capital. Supposing the ||715| weaver now sells the cloth for 1,000 to the merchant but in return for a bill of exchange so that money figures as means of payment. The weaver for his part hands over the bill of exchange to the banker, to whom he may thus be repaying a debt or, on the other hand, the banker may negotiate the bill for him. The flax-grower has sold to the spinner in return for a bill of exchange, the spinner to the weaver, ditto the machine manufacturer to the weaver, ditto the iron and timber manufacturer to the machine manufacturer, ditto the coal producer to the spinner, weaver, machine manufacturer, iron and timber supplier. Besides, the iron, coal, timber and flax producers have paid one another with bills of exchange. Now if the merchant does not pay, then the weaver cannot pay his bill of exchange to the banker. The flax-grower has drawn on the spinner, the machine manufacturer on the weaver and the spinner. The spinner cannot pay because the weaver cannot pay, neither of them pay the machine manufacturer, and the latter does not pay the iron, timber or coal supplier. And all of these in turn, as they cannot realise the value of their commodities, cannot replace that portion of value which is to replace their constant capital. Thus the general crisis comes into being. This is nothing other than the possibility of crisis described when dealing with money as a means of payment; but here in capitalist production we can already see the connection between the mutual claims and obligations, the sales and purchases, through which the possibility can develop into actuality. In any case: If purchase and sale do not get bogged down, and therefore do not require forcible adjustment and, on the other hand, money as means of payment functions in such a way that claims are mutually settled, and thus the contradiction inherent in money as a means of payment is not realised if therefore neither of these two abstract forms of crisis become real, no crisis exists. No crisis can exist unless sale and purchase are separated from one another and come into conflict, or the contradictions contained in money as a means of payment actually come into play; crisis, therefore, cannot exist without manifesting itself at the same time in its simple form, as the contradiction between sale and purchase and the contradiction of money as a means-of payment. But these are merely forms, general possibilities of crisis, and hence also forms, abstract forms, of actual crisis. In them, the nature of crisis appears in its simplest forms, and, in so far as this form is itself the simplest content of crisis, in its simplest content. But the content is not yet substantiated. Simple circulation of money and even the circulation of money as a means of payment and both come into being long before capitalist production, while there are no crises are possible and actually take place without crises. These forms alone, therefore, do not explain why their crucial aspect becomes prominent and why the potential contradiction contained in them becomes a real contradiction. This shows how insipid the economists are who, when they are no longer able to explain away the phenomenon of overproduction and crises, are content to say that these forms contain the possibility of crises, that it is therefore accidental whether or not crises occur and consequently their occurrence is itself merely a matter of chance. The contradictions inherent in the circulation of commodities, which are further developed in the circulation of money and thus, also, the possibilities of crisis reproduce themselves, automatically, in capital, since developed circulation of commodities and of money, in fact, only takes place on the basis of capital. But now the further development of the potential crisis has to be traced the real crisis can only be educed from the real movement of capitalist production, competition and credit in so far as crisis arises out of the special aspects of capital which are peculiar to it as capital, and not merely comprised in its existence as commodity and money. ||716| The mere (direct) production process of capital in itself, cannot add anything new in this context. In order to exist at all, its conditions are presupposed. The first section dealing with capital the direct process of production does not contribute any new element of crisis. Although it does contain such an element, because the production process implies appropriation and hence production of surplus-value. But this cannot be shown when dealing with the production process itself, for the latter is not concerned with the realisation either of the reproduced value or of the surplus-value. This can only emerge in the circulation process which is in itself also a process of reproduction. Furthermore it is necessary to describe the circulation or reproduction process before dealing with the already existing capital capital and profit since we have to explain, not only how capital produces, but also how capital is produced. But the actual movement starts from the existing capital i.e., the actual movement denotes developed capitalist production, which starts from and presupposes its own basis. The process of reproduction and the predisposition to crisis which is further developed in it, are therefore only partially described under this heading and require further elaboration in the chapter on Capital and Profit . The circulation process as a whole or the reproduction process of capital as a whole is the unity of its production phase and its circulation phase, so that it comprises both these processes or phases. Therein lies a further developed possibility or abstract form of crisis. The economists who deny crises consequently assert only the unity of these two phases. If they were only separate, without being a unity, then their unity could not be established by force and there could be no crisis. If they were only a unity without being separate, then no violent separation would be possible implying a crisis. Crisis is the forcible establishment of unity between elements that have become independent and the enforced separation from one another of elements which are essentially one. |716|| ||770a| Supplement to page 716. Therefore: 1. The general possibility of crisis is given in the process of metamorphosis of capital itself, and in two ways: in so far as money functions as means of circulation, [the possibility of crisis lies in] the separation of purchase and sale; and in so far as money functions as means of payment, it has two different aspects, it acts as measure of value and as realisation of value. These two aspects [may] become separated. If in the interval between them the value has changed, if the commodity at the moment of its sale is not worth what it was worth at the moment when money was acting as a measure of value and therefore as a measure of the reciprocal obligations, then the obligation cannot be met from the proceeds of the sale of the commodity, and therefore the whole series of transactions which retrogressively depend on this one transaction, cannot be settled. If even for only a limited period of time the commodity cannot be sold then, although its value has not altered, money cannot function as means of payment, since it must function as such in a definite given period of time. But as the same sum of money acts for a whole series of reciprocal transactions and obligations here, inability to pay occurs not only at one, but at many points, hence a crisis arises. These are the formal possibilities of crisis. The form mentioned first is possible without the latter that is to say, crises are possible without credit, without money functioning as a means of payment. But the second form is not possible without the first that is to say, without the separation between purchase and sale. But in the latter case, the crisis occurs not only because the commodity is unsaleable, but because it is not saleable within a particular period of time, and the crisis arises and derives its character not only from the unsaleability of the commodity, but from the non-fulfilment of a whole series of payments which depend on the sale of this particular commodity within this particular period of time. This is the characteristic form of money crises. If the crisis appears, therefore, because purchase and sale become separated, it becomes a money crisis, as soon as money has developed as means of payment, and this second form of crisis follows as a matter of course, when the first occurs. In investigating why the general possibility of crisis turns into a real crisis, in investigating the conditions of crisis, it is therefore quite superfluous to concern oneself with the forms of crisis which arise out of the development of money as means of payment. This is precisely why economists like to suggest that this obvious form is the cause of crises. (In so far as the development of money as means of payment is linked with the development of credit and of excess credit the causes of the latter have to be examined, but this is not yet the place to do it.) 2. In so far as crises arise from changes in prices and revolutions in prices, which do not coincide with changes in the values of commodities, they naturally cannot be investigated during the examination of capital in general, in which the prices of commodities are assumed to be identical with the values of commodities. 3. The general possibility of crisis is the formal metamorphosis of capital itself, the separation, in time and space, of purchase and sale. But this is never the cause of the crisis. For it is nothing but the most general form of crisis, i.e., the crisis itself in its most generalised expression. But it cannot be said that the abstract form of crisis is the cause of crisis. If one asks what its cause is, one wants to know why its abstract form, the form of its possibility, turns from possibility into actuality. 4. The general conditions of crises, in so far as they are independent of price fluctuations (whether these are linked with the credit system or not) as distinct from fluctuations in value, must be explicable from the general conditions of capitalist production. |770a|| ||716| (A crisis can arise: 1, in the course of the reconversion [of money] into productive capital; 2. through changes in the value of the elements of productive capital, particularly of raw material, for example when there is a decrease in the quantity of cotton harvested. Its value will thus rise. We are not as yet concerned with prices here but with values.) |716|| ||770a| First Phase. The reconversion of money into capital. A definite level of production or reproduction is assumed. Fixed capital can be regarded here as given, as remaining unchanged and not entering into the process of the creation of value. Since the reproduction of raw material is not dependent solely on the labour employed on it, but on the productivity of this labour which is bound up with natural conditions, it is possible for the volume, ||XIV-771a| the amount of the product of the same quantity of labour, to fall (as a result of bad harvests). The value of the raw material therefore rises; its volume decreases, in other words the proportions in which the money has to be reconverted into the various component parts of capital in order to continue production on the former scale, are upset. More must be expended on raw material, less remains for labour, and it is not possible to absorb the same quantity of labour as before. Firstly this is physically impossible, because of the deficiency in raw material. Secondly, it is impossible because a greater portion of the value of the product has to be converted into raw material, thus leaving less for conversion into variable capital. Reproduction cannot be repeated on the same scale. A part of fixed capital stands idle and a part of the workers is thrown out on the streets. The rate of profit falls because the value of constant capital has risen as against that of variable capital and less variable capital is employed. The fixed charges interest, rent which were based on the anticipation of a constant rate of profit and exploitation of labour, remain the same and in part cannot be paid. Hence crisis. Crisis of labour and crisis of capital. This is therefore a disturbance in the reproduction process due to the increase in the value of that part of constant capital which has to be replaced out of the value of the product. Moreover, although the rate of profit is decreasing, there is a rise in the price of the product. If this product enters into other spheres of production as a means of production, the rise in its price will result in the same disturbance in reproduction in these spheres. If it enters into general consumption as a means of subsistence, it either enters also into the consumption of the workers or not. If it does so, then its effects will be the same as those of a disturbance in variable capital, of which we shall speak later. But in so far as it enters into general consumption it may result (if its consumption is not reduced) in a diminished demand for other products and consequently prevent their reconversion into money at their value, thus disturbing the other aspect of their reproduction not the reconversion of money into productive capital but the reconversion of commodities into money. In any case, the volume of profits and the volume of wages is reduced in this branch of production thereby reducing a part of the necessary returns from the sale of commodities from other branches of production. Such a shortage of raw material may, however, occur not only because of the influence of harvests or of the natural productivity of the labour which supplies the raw material. For if an excessive portion of the surplus-value, of the additional capital, is laid out in machinery etc, in a particular branch of production, then, although the raw material would have been sufficient for the old level of production, it will be insufficient for the new. This therefore arises from the disproportionate conversion of additional capital into its various elements. It is a case of over-production of fixed capital and gives rise to exactly the same phenomena as occur in the first case. (See the previous page.) |XIV-771a|| ||XIV-861a| [a] Or they [the crises] are due to an over-production of fixed capital and therefore a relative under-production of circulating capital. Since fixed capital, like circulating, consists of commodities, it is quite ridiculous that the same economists who admit the over-production of fixed capital, deny the over-production of commodities. 5. Crises arising from disturbances in the first phase of reproduction: that is to say, interrupted conversion of commodities into money or interruption of sale. In the case of crises of the first sort [which result from the rise in the price of raw materials] the crisis arises from interruptions in the flowing back of the elements of productive capital. |XIV-861a|| ||XIII-716| Before embarking on an investigation of the new forms of crisis, we shall resume our consideration of Ricardo and the above example. |716|| ||716| So long as the owner of the weaving-mill reproduces and accumulates, his workers, too, purchase a part of his product, they spend a part of their wages on calico. Because he produces, they have the means to purchase a part of his product and thus to some extent give him the means to sell it. The worker can only buy he can represent a demand only for commodities which enter into individual consumption, for he does not himself turn his labour to account nor does he himself possess the means to do so the instruments of labour and materials of labour. This already, therefore, excludes the majority of producers, the workers themselves, as consumers, buyers [of many commodities], where capitalist production prevails. They buy no raw material and no instruments of labour; they buy only means of subsistence, commodities which enter directly into individual consumption. Hence nothing is more ridiculous than to speak of the identity of producers and consumers, since for an extraordinarily large number of branches of production all those that do not supply articles for direct consumption the mass of those who participate in production are entirely excluded from the purchase of their own products. They are never direct consumers or buyers of this large part of their own products, although they pay a portion of the value of these products in the articles of consumption that they buy. This also shows the ambiguity of the word consumer and how wrong it is to identify it with the word buyer. As regards industrial consumption, it is precisely the workers who consume machinery and raw material, using them up in the labour-process. But they do not use them up for themselves and they are therefore not buyers of them. Machinery and raw material are for them neither use-values nor commodities, but objective conditions of a process of which they themselves are the subjective conditions. ||717| It may, however, be said that their employer represents them in the purchase of means of production and raw materials. But he represents them under different conditions from those in which they would represent themselves on the market. He must sell a quantity of commodities which represents surplus-value, unpaid labour. They [the workers] would only have to sell the quantity of commodities which would reproduce the value advanced in production the value of the means of production, the raw materials and the wages. He therefore requires a wider market than they would require. It depends, moreover, on him and not on them, whether he considers the conditions of the market sufficiently favourable to begin reproduction. They are therefore producers without being consumers even when no interruption of the reproduction process takes place in relation to all articles which have to be consumed not individually but industrially. Thus nothing is more absurd as a means of denying crises, than the assertion that the consumers (buyers) and producers (sellers) are identical in capitalist production. They are entirely distinct categories. In so far as the reproduction process takes place, this identity can be asserted only for one out of 3,000 producers, namely, the capitalist. On the other hand, it is equally wrong to say that the consumers are producers. The landlord does not produce (rent), and yet he consumes. The same applies to all monied interests. The apologetic phrases used to deny crises are important in so far as they always prove the opposite of what they are meant to prove. In order to deny crises, they assert unity where there is conflict and contradiction. They are therefore important in so far as one can say they prove that there would be no crises if the contradictions which they have erased in their imagination, did not exist in fact. But in reality crises exist because these contradictions exist. Every reason which they put forward against crisis is an exorcised contradiction, and, therefore, a real contradiction, which can cause crises. The desire to convince oneself of the non-existence of contradictions, is at the same time the expression of a pious wish that the contradictions, which are really present, should not exist. What the workers in fact produce, is surplus-value. So long as they produce it, they are able to consume. As soon as they cease [to produce it], their consumption ceases, because their production ceases. But that they are able to consume is by no means due to their having produced an equivalent for their consumption. On the contrary, as soon as they produce merely such an equivalent, their consumption ceases, they have no equivalent to consume. Their work is either stopped or curtailed, or at all events their wages are reduced. In the latter case if the level of production remains the same they do not consume an equivalent of what they produce. But they lack these means not because they do not produce enough, but because they receive too little of their product for themselves. By reducing these relations simply to those of consumer and producer, one leaves out of account that the wage-labourer who produces and the capitalist who produces are two producers of a completely different kind, quite apart from the fact that some consumers do not produce at all. Once again, a contradiction is denied, by abstracting from a contradiction which really exists in production. The mere relationship of wage-labourer and capitalist implies: 1. that the majority of the producers (the workers) are nonconsumers (non-buyers) of a very large part of their product, namely, of the means of production and the raw material; 2. that the majority of the producers, the workers, can consume an equivalent for their product only so long as they produce more than this equivalent, that is, so long as they produce surplus-value or surplus-product. They must always be over-producers, produce over and above their needs, in order to be able to be consumers or buyers within the ||718| limits of their needs. As regards this class of producers, the unity between production and consumption is, at any rate prima facie, false. When Ricardo says that the only limit to demand is production itself, and that this is limited by capital, then this means, in fact, when stripped of false assumptions, nothing more than that capitalist production finds its measure only in capital; in this context, however, the term capital also includes the labour-power which is incorporated in (bought by) capital as one of its conditions of production. The question is whether capital as such is also the limit for consumption. At any rate, it is so in a negative sense, that is, more cannot be consumed than is produced. But the question is, whether this applies in a positive sense too, whether on the basis of capitalist production as much can and must be consumed as is produced. Ricardo s proposition, when correctly analysed, says the very opposite of what it is meant to say namely, that production takes place without regard to the existing limits to consumption, but is limited only by capital itself. And this is indeed characteristic of this mode of production. Thus according to the assumption, the market is glutted, for instance with cotton cloth, so that part of it remains unsold or all of it, or it can only be sold well below its price. (For the time being, we shall call it value, because while we are considering circulation or the reproduction process, we are still concerned with value and not yet with cost-price, even less with market-price.) It goes without saying that, in the whole of this observation. it is not denied that too much may be produced in individual spheres and therefore too little in others; partial crises can thus arise from disproportionate production (proportionate production is, however, always only the result of disproportionate production on the basis of competition) and a general form of this disproportionate production may be over-production of fixed capital, or on the other hand, over-production of circulating capital.* Just as it is a condition for the sale of commodities at their value, that they contain only the socially necessary labour-time, so it is for an entire sphere of production of capital, that only the necessary part of the total labour-time of society is used in the particular sphere, only the labour-time which is required for the satisfaction of social need (demand). If more is used, then, even if each individual commodity only contains the necessary labour-time, the total contains more than the socially necessary labour-time; in the same way, although the individual commodity has use-value, the total sum of commodities loses some of its use-value under the conditions assumed. However, we are not speaking of crisis here in so far as it arises from disproportionate production, that is to say, the disproportion in the distribution of social labour between the individual spheres of production. This can only be dealt with in connection with the competition of capitals. In that context it has already been stated that the rise or fall of market-value which is caused by this disproportion, results in the withdrawal of capital from one branch of production and its transfer to another, the migration of capital from one branch of production to another. This equalisation itself however already implies as a precondition the opposite of equalisation and may therefore comprise crisis; the crisis itself may be a form of equalisation. Ricardo etc. admit this form of crisis. When considering the production process we saw that the whole aim of capitalist production is appropriation of the greatest possible amount of surplus-labour, in other words, the realisation of the greatest possible amount of immediate labour-time with the given capital, be it through the prolongation of the labour-day or the reduction of the necessary labour-time, through the development of the productive power of labour by means of cooperation, division of labour, machinery etc., in short, large-scale production, i.e., mass production. It is thus in the nature of capitalist production, to produce without regard to the limits of the market. During the examination of reproduction, it is, in the first place, assumed that the method of production remains the same and it remains the same, moreover, for a period while production expands. The volume of commodities produced is increased in this case, because more capital is employed and not because capital is employed more productively. But the mere quantitative increase in ||719| capital at the same time implies that its productive power grows. If its quantitative increase is the result of the development of productive power, then the latter in turn develops on the assumption of a broader, extended capitalist basis. Reciprocal interaction takes place in this case. Reproduction on an extended basis, accumulation, even if originally it appears only as a quantitative expansion of production the use of more capital under the same conditions of production at a certain point, therefore, always represents also a qualitative expansion in the form of greater productivity of the conditions under which reproduction is carried out. Consequently the volume of products increases not only in simple proportion to the growth of capital in expanded reproduction accumulation. Now let us return to our example of calico. The stagnation in the market, which is glutted with cotton cloth, hampers the reproduction process of the weaver. This disturbance first affects his workers. Thus they are now to a smaller extent, or not at all, consumers of his commodity cotton cloth and of other commodities which entered into their consumption. It is true, that they need cotton cloth, but they cannot buy it because they have not the means, and they have not the means because they cannot continue to produce and they cannot continue to produce because too much has been produced, too much cotton cloth is already on the market. Neither Ricardo s advice to increase their production , nor his alternative to produce something else can help them. They now form a part of the temporary surplus population, of the surplus production of workers, in this case of cotton producers, because there is a surplus production of cotton fabrics on the market. But apart from the workers who are directly employed by the capital invested in cotton weaving, a large number of other producers are hit by this interruption in the reproduction process of cotton: spinners, cotton-growers, engineers (producers of spindles, looms etc.), iron and coal producers and so on. Reproduction in all these spheres would also be impeded because the reproduction of cotton cloth is a condition for their own reproduction. This would happen even if they had not over-produced in their own spheres, that is to say, had not produced beyond the limit set and justified by the cotton industry when it was working smoothly. All these industries have this in common, that their revenue (wages and profit, in so far as the latter is consumed as revenue and not accumulated) is not consumed by them in their own product but in the product of other spheres, which produce articles of consumption, calico among others. Thus the consumption of and the demand for calico fall just because there is too much of it on the market. But this also applies to all other commodities on which, as articles of consumption, the revenue of these indirect producers of cotton is spent. Their means for buying calico and other articles of consumption shrink, contract, because there is too much calico on the market. This also affects other commodities (articles of consumption). They are now, all of a sudden, relatively over-produced, because the means with which to buy them and therefore the demand for them, have contracted. Even if there has been no over-production in these spheres, now they are over-producing. If over-production has taken place not only in cotton, but also in linen, silk and woollen fabrics, then it can be understood how over-production in these few, but leading articles, calls forth a more or less general (relative) over-production on the whole market. On the one hand there is a superabundance of all the means of reproduction and a superabundance of all kinds of unsold commodities on the market. On the other hand bankrupt capitalists and destitute, starving workers. This however is a two-edged argument. If it is easily understood how over-production of some leading articles of consumption must bring in its wake the phenomenon of a more or less general over-production, it is by no means clear how over-production of these articles can arise. For the phenomenon of general over-production is derived from the interdependence not only of the workers directly employed in these industries, but of all branches of industries which produce the elements of their products, the various stages of their constant capital. In the latter branches of industry, over-production is an effect. But whence does it come in the former? For the latter [branches of industry] continue to produce so long as the former go on producing, and along with this continued production, a general growth in revenue, and therefore in their own consumption, seems assured. |719|| ||720| If one were to answer the question by pointing out that the constantly expanding production <it expands annually for two reasons; firstly because the capital invested in production is continually growing; secondly because the capital is constantly used more productively; in the course of reproduction and accumulation, small improvements are continuously building up, which eventually alter the whole level of production. There is a piling up of improvements, a cumulative development of productive powers.> requires a constantly expanding market and that production expands more rapidly than the market, then one would merely have used different terms to express the phenomenon which has to be explained concrete terms instead of abstract terms. The market expands more slowly than production; or in the cycle through which capital passes during its reproduction a cycle in which it is not simply reproduced but reproduced on an extended scale, in which it describes not a circle but a spiral there comes a moment at which the market manifests itself as too narrow for production. This occurs at the end of the cycle. But it merely means: the market is glutted. Over-production is manifest. If the expansion of the market had kept pace with the expansion of production there would be no glut of the market, no over-production. However, the mere admission that the market must expand with production, is, on the other hand, again an admission of the possibility of over-production, for the market is limited externally in the geographical sense, the internal market is limited as compared with a market that is both internal and external, the latter in turn is limited as compared with the world market, which however is, in turn, limited at each moment of time, [though] in itself capable of expansion. The admission that the market must expand if there is to be no over-production, is therefore also an admission that there can be over-production. For it is then possible since market and production are two independent factors that the expansion of one does not correspond with the expansion of the other; that the limits of the market are not extended rapidly enough for production, or that new markets new extensions of the market may be rapidly outpaced by production, so that the expanded market becomes just as much a barrier as the narrower market was formerly. Ricardo is therefore consistent in denying the necessity of an expansion of the market simultaneously with the expansion of production and growth of capital. All the available capital in a country can also be advantageously employed in that country. Hence he polemises against Adam Smith, who on the one hand put forward his (Ricardo s) view and, with his usual rational instinct, contradicted it as well. Adam Smith did not yet know the phenomenon of over-production, and crises resulting from over-production. What he knew were only credit and money crises, which automatically appear, along with the credit and banking system. In fact he sees in the accumulation of capital an unqualified increase in the general wealth and well-being of the nation. On the other hand, he regards the mere fact that the internal market develops into an external, colonial and world market, as proof of a so-to-speak relative (potential) over-production in the internal market. It is worth quoting Ricardo s polemic against him at this point: <Adam Smith is very much mistaken here, for he excludes the luxury products of agriculture> <Is that why there are nations which export agricultural products? As if it were impossible, despite nature, to sink all possible capital into agriculture in order to produce, in England for example, melons, figs, grapes etc., flowers etc., and birds and game etc. (See, for example, the capital that the Romans put into artificial fish culture alone.) And as if the raw materials of industry were not produced by means of agricultural capital.> The word over-production in itself leads to error. So long as the most urgent needs of a large part of society are not satisfied, or only the most immediate needs are satisfied, there can of course be absolutely no talk of an over-production of products in the sense that the amount of products is excessive in relation to the need for them. On the contrary, it must be said that on the basis of capitalist production, there is constant under-production in this sense. The limits to production are set by the profit of the capitalist and in no way by the needs of the producers. But over-production of products and over-production of commodities are two entirely different things. If Ricardo thinks that the commodity form makes no difference to the product, and furthermore, that commodity circulation differs only formally from barter, that in this context the exchange-value is only a fleeting form of the exchange of things, and that money is therefore merely a formal means of circulation then this in fact is in line with his presupposition that the bourgeois mode of production is the absolute mode of production, hence it is a mode of production without any definite specific characteristics, its distinctive traits are merely formal. He cannot therefore admit that the bourgeois mode of production contains within itself a barrier to the free development of the productive forces, a barrier which comes to the surface in crises and, in particular, in over-production the basic phenomenon in crises. ||722| Ricardo saw from the passages of Adam Smith, which he quotes, approves, and therefore also repeats, that the limitless desire for all kinds of use-values is always satisfied on the basis of a state of affairs in which the mass of producers remains more or less restricted to necessities food and other necessaries that consequently this great majority of producers remains more or less excluded from the consumption of wealth in so far as wealth goes beyond the bounds of the necessary means of subsistence. This was indeed also the case, and to an even higher degree, in the ancient mode of production which depended on slavery. But the ancients never thought of transforming the surplus-product into capital. Or at least only to a very limited extent. (The fact that the hoarding of treasure in the narrow sense was widespread among them shows how much surplus-product lay completely idle.) They used a large part of the surplus-product for unproductive expenditure on art, religious works and public works. Still less was their production directed to the release and development of the material productive forces division of labour, machinery, the application of the powers of nature and science to private production. In fact, by and large, they never went beyond handicraft labour. The wealth which they produced for private consumption was therefore relatively small and only appears great because it was amassed in the hands of a few persons, who, incidentally, did not know what to do with it. Although, therefore, there was no over-production among the ancients, there was over-consumption by the rich, which in the final periods of Rome and Greece turned into mad extravagance. The few trading peoples among them lived partly at the expense of all these essentially poor nations. It is the unconditional development of the productive forces and therefore mass production on the basis of a mass of producers who are confined within the bounds of the necessary means of subsistence on the one hand and, on the other, the barrier set up by the capitalists profit, which [forms] the basis of modern over-production. All the objections which Ricardo and others raise against overproduction etc. rest on the fact that they regard bourgeois production either as a mode of production in which no distinction exists between purchase and sale direct barter or as social production, implying that society, as if according to a plan, distributes its means of production and productive forces in the degree and measure which is required for the fulfilment of the various social needs, so that each sphere of production receives the quota of social capital required to satisfy the corresponding need. This fiction arises entirely from the inability to grasp the specific form of bourgeois production and this inability in turn arises from the obsession that bourgeois production is production as such, just like a man who believes in a particular religion and sees it as the religion, and everything outside of it only as false religions. On the contrary, the question that has to be answered is: since, on the basis of capitalist production, everyone works for himself and a particular labour must at the same time appear as its opposite, as abstract general labour and in this form as social labour how is it possible to achieve the necessary balance and interdependence of the various spheres of production, their dimensions and the proportions between them, except through the constant neutralisation of a constant disharmony? This is admitted by those who speak of adjustments through competition, for these adjustments always presuppose that there is something to adjust, and therefore that harmony is always only a result of the movement which neutralises the existing disharmony. That is why Ricardo admits that a glut of certain commodities is possible. What is supposed to be impossible is only a simultaneous general glut of the market. The possibility of overproduction in any particular sphere of production is therefore not denied. It is the simultaneity of this phenomenon for all spheres of production which is said to be impossible and therefore makes impossible [general] over-production and thus a general glut of the market, (This expression must always be taken cum grano salis, since in times of general over-production, the over-production in some spheres is always only the result, the consequence, of over-production in the leading articles of commerce; [it is] always only relative, i.e., over-production because over-production exists in other spheres.) Apologetics turns this into its very opposite. [There is only] over-production in the leading articles of commerce, in which alone, active over-production shows itself these are on the whole articles which can only be produced on a mass scale and by factory methods (also in agriculture), because over-production exists in those articles in which relative or passive overproduction manifests itself. According to this, over-production only exists because over-production is not universal. The relativity of over-production that actual over-production in a few spheres calls forth over-production in others is expressed in this way: There is no universal over-production, because if overproduction were universal, all spheres of production would retain the same relation to one another; therefore universal overproduction is proportional production which excludes over-production. And this is supposed to be an argument against universal over-production. ||723| For, since universal over-production in the absolute sense would not be over-production but only a greater than usual development of the productive forces in all spheres of production, it is alleged that actual over-production, which is precisely not this non-existent, self-abrogating overproduction, does not exist although it only exists because it is not this. If this miserable sophistry is more closely examined, it amounts to this: Suppose, that there is over-production in iron, cotton goods, linen, silk, woollen cloth etc.; then it cannot be said, for example, that too little coal has been produced and that this is the reason for the above over-production. For that over-production of iron etc. involves an exactly similar over-production of coal, as, say, the over-production of woven cloth does of yarn. <Over-production of yarn as compared with cloth, iron as compared with machinery, etc. could occur. This would always be a relative over-production of constant capital.> There cannot, therefore, be any question of the under-production of those articles whose over-production is implied because they enter as an element, raw material, auxiliary material or means of production, into those articles (the particular commodity of which too much may be produced, of which there may be such a glut in the market, as not to repay the capital expended on it [l.c., pp. 341-42], whose positive over-production is precisely the fact to be explained. Rather, it is a question of other articles which belong directly to [other] spheres of production and [can] neither [be] subsumed under the leading articles of commerce which, according to the assumption, have been over-produced, nor be attributed to spheres in which, because they supply the intermediate product for the leading articles of commerce, production must have reached at least the same level as in the final phases of the product although there is nothing to prevent production in those spheres from having gone even further ahead thus causing an over-production within the over-production. For example, although sufficient coal must have been produced in order to keep going all those industries into which coal enters as necessary condition of production, and therefore the over-production of coal is implied in the over-production of iron, yarn etc. (even if coal was produced only in proportion to the production of iron and yarn [etc.]), it is also possible that more coal was produced than was required even for the over-production of iron, yarn etc. This is not only possible, but very probable. For the production of coal and yarn and of all other spheres of production which produce only the conditions or earlier phases of a product to be completed in another sphere, is governed not by the immediate demand, by the immediate production or reproduction, but by the degree, measure, proportion in which these are expanding. And it is self-evident that in this calculation, the target may well be overshot. Thus not enough has been produced of other articles such as, for example, pianos, precious stones etc., they have been under-produced. <There are, however, also cases where the over-production of non-leading articles is not the result of overproduction, but where, on the contrary, under-production is the cause of over-production, as for instance when there has been a failure in the grain crop or the cotton crop.> The absurdity of this statement becomes particularly marked if it is applied to the international scene, as it has been by Say and others after him. For instance, that England has not over-produced but Italy has under-produced. There would have been no over-production, if in the first place Italy had enough capital to replace the English capital exported to Italy in the form of commodities; and secondly if Italy had invested this capital in such a way that it produced those particular articles which are required by English capital partly in order to replace itself and partly in order to replace the revenue yielded by it. Thus the fact of the actually existing over-production in England in relation to the actual production in Italy would not have existed, but only the fact of imaginary under-production in Italy; imaginary because it ||724| presupposes a capital in Italy and a development of the productive forces that do not exist there, and secondly because it makes the equally utopian assumption, that this capital which does not exist in Italy, has been employed in exactly the way required to make English supply and Italian demand, English and Italian production, complementary to each other. In other words, this means nothing but: there would be no overproduction, if demand and supply corresponded to each other, if the capital were distributed in such proportions in all spheres of production, that the production of one article involved the consumption of the other, and thus its own consumption. There would be no over-production, if there were no over-production. Since, however, capitalist production can allow itself free rein only in certain spheres, under certain conditions, there could be no capitalist production at all if it had to develop simultaneously and evenly in all spheres. Because absolute over-production takes place in certain spheres, relative over-production occurs also in the spheres where there has been no over-production. This explanation of over-production in one field by underproduction in another field therefore means merely that if production were proportionate, there would be no over-production. The same could be said if demand and supply corresponded to each other, or if all spheres provided equal opportunities for capitalist production and its expansion division of labour, machinery, export to distant markets etc., mass production, i.e., if all countries which traded with one another possessed the same capacity for production (and indeed for different and complementary production). Thus over-production takes place because all these pious wishes are not fulfilled. Or, in even more abstract form: There would be no over-production in one place, if overproduction took place to the same extent everywhere. But there is not enough capital to over-produce so universally, and therefore there is partial over-production. Let us examine this fantasy more closely: It is admitted that there can be over-production in each particular industry. The only circumstance which could prevent over production in all industries simultaneously is, according to the assertions made, the fact that commodity exchanges against commodity i.e., recourse is taken to the supposed conditions of barter. But this loop-hole is blocked by the very fact that trade [under capitalist conditions] is not barter, and that therefore the seller of a commodity is not necessarily at the same time the buyer of another. This whole subterfuge then rests on abstracting from money and from the fact that we are not concerned with the exchange of products, but with the circulation of commodities, an essential part of which is the separation of purchase and sale. <The circulation of capital contains within itself the possibilities of interruptions. In the reconversion of money into its conditions of production, for example, it is not only a question of transforming money into the same use-values (in kind), but for the repetition of the reproduction process [it is] essential that these use-values can again be obtained at their old value (at a lower value would of course be even better). A very significant part of these elements of reproduction, which consists of raw materials, can however rise in price for two reasons. Firstly, if the instruments of production increase more rapidly than the amount of raw materials that can be provided at the given time. Secondly, as a result of the variable character of the harvests. That is why weather conditions, as Tooke rightly observes, play such an important part in modern industry. (The same applies to the means of subsistence in relation to wages.) The reconversion of money into commodity can thus come up against difficulties and can create the possibilities of crisis, just as well as can the conversion of commodity into money. When one examines simple circulation not the circulation of capital these difficulties do not arise.> (There are, besides, a large number of other factors, conditions, possibilities of crises, which can only be examined when considering the concrete conditions, particularly the competition of capitals and credit.) ||725| The over-production of commodities is denied but the over-production of capital is admitted. Capital itself however consists of commodities or, in so far as it consists of money, it must be reconverted into commodities of one kind or another, in order to be able to function as capital. What then does overproduction of capital mean? Over-production of value destined to produce surplus-value or, if one considers the material content, over-production of commodities destined for reproduction that is, reproduction on too large a scale, which is the same as over-production pure and simple. Defined more closely, this means nothing more than that too much has been produced for the purpose of enrichment, or that too great a part of the product is intended not for consumption as revenue, but for making more money (for accumulation): not to satisfy the personal needs of its owner, but to give him money, abstract social riches and capital, more power over the labour of others, i.e., to increase this power. This is what one side says. (Ricardo denies it.) And the other side, how does it explain the over-production of commodities? By saying that production is not sufficiently diversified, that certain articles of consumption have not been produced in sufficiently large quantities. That it is not a matter of industrial consumption is obvious, for the manufacturer who over-produces linen, thereby necessarily increases his demand for yarn, machinery, labour etc. It is therefore a question of personal consumption. Too much linen has been produced, but perhaps too few oranges. Previously the existence of money was denied, in order to show [that there was no] separation between sale and purchase. Here the existence of capital is denied, in order to transform the capitalists into people who carry out the simple operation C M C and who produce for individual consumption and not as capitalists with the aim of enrichment, i.e., the reconversion of part of the surplus-value into capital. But the statement that there is too much capital, after all means merely that too little is consumed as revenue, and that more cannot be consumed in the given conditions. (Sismondi.) Why does the producer of linen demand from the producer of corn, that he should consume more linen, or the latter demand that the linen manufacturer should consume more corn? Why does the man who produces linen not himself convert a larger part of his revenue (surplus-value) into linen and the farmer into corn? So far as each individual is concerned, it will be admitted that his desire for capitalisation (apart from the limits of his needs) prevents him from doing this. But for all of them collectively, this is not admitted. (We are entirely leaving out of account here that element of crises which arises from the fact that commodities are reproduced more cheaply than they were produced. Hence the depreciation of the commodities on the market.) In world market crises, all the contradictions of bourgeois production erupt collectively; in particular crises (particular in their content and in extent) the eruptions are only sporadical, isolated and one-sided. Over-production is specifically conditioned by the general law of the production of capital: to produce to the limit set by the productive forces, that is to say, to exploit the maximum amount of labour with the given amount of capital, without any consideration for the actual limits of the market or the needs backed by the ability to pay; and this is carried out through continuous expansion of reproduction and accumulation, and therefore constant reconversion of revenue into capital, while ||726| on the other hand, the mass of the producers remain tied to the average level of needs, and must remain tied to it according to the nature of capitalist production. In Chapter VIII, On Taxes , Ricardo says: By unproductive consumption Ricardo means here, as he says in the note on p. 163, consumption by unproductive workers, by those who do not reproduce another value . By increase in the annual production, therefore, is meant increase in the annual industrial consumption. This can be increased by the direct expansion of it, while non-industrial consumption remains constant or even grows, or by reducing non-industrial consumption. When we say, writes Ricardo in the same note, that revenue is saved, and added to capital, what we mean is, that the portion of revenue, so said to be added to capital, is consumed by productive instead of unproductive labourers [l.c., p. 163, note]. I have shown that the conversion of revenue into capital is by no means synonymous with the conversion of revenue into variable capital or with its expenditure on wages. Ricardo however thinks so. In the same note he says: It is therefore not the consumption of revenue by productive workers, which makes this consumption productive , but its consumption by workers who produce surplus-value. According to this, capital increases only when it commands more labour. Chapter VII On Foreign Trade . (That is to say, they would not be raised if the cheaper goods entered neither into the variable nor the constant capital.) Thus with the same expenditure of revenue accumulation is the result of the rise in the rate of profit <but accumulation depends not only on the rate of profit but on the amount of profit>; with a constant rate of profit accumulation is the result of decreasing expenditure, which is however assumed by Ricardo to occur because of the reduced price (whether this is brought about by machinery or foreign trade) of commodities on which revenue was expended . Chapter XX Value and Riches, their Distinctive Properties . ||727| In the second case, there will not necessarily be either any diminished expenditure on luxuries and enjoyments, or any increased quantity of productive labour employed, but with the same labour more would be produced; wealth would increase, but not value. Of these two modes of increasing wealth, the last must be preferred, since it produces the same effect without the privation and diminution of enjoyments, which can never fail to accompany the first mode. Capital is that part of the wealth of a country which is employed with a view to future production, and may be increased in the same manner as wealth. An additional capital will be equally efficacious in the production of future wealth, whether it be obtained from improvements in skill and machinery, or from using more revenue reproductively; for wealth always depends on the quantity of commodities produced, without any regard to the facility with which the instruments employed in production may have been procured. A certain quantity of clothes and provisions will maintain and employ the same number of men, and will therefore procure the same quantity of work to be done, whether they be produced by the labour of 100 or 200 men; but they will he of twice the value if 200 have been employed on their production (l.c., pp. 327-28). Ricardo s first proposition was: Accumulation grows, if the rate of profit rises, while expenditure remains the same or when the rate of profit remains the same, if expenditure (in terms of value) decreases, because the commodities on which the revenue is expended become cheaper. Now he puts forward another antithetical proposition. Accumulation grows, capital is accumulated in amount and value, if a larger part of the revenue is withdrawn from individual consumption and directed to industrial consumption, if more productive labour is set in motion with the portion of revenue thus saved. In this case accumulation is brought about by parsimony. Or expenditure remains the same, and no additional productive labour is employed; but the same labour produces more, its productive power is raised. The elements which make up the productive capital, raw materials, machinery etc. <previously it was the commodities upon which revenue is expended; now it is the commodities employed as means of production> are produced with the same labour in greater quantities, better and therefore cheaper. In this case, accumulation depends neither on a rising rate of profit, nor on a greater portion of revenue being converted into capital as a result of parsimony, nor on a smaller portion of the revenue being spent unproductively as a result of a reduction in the price of those commodities on which revenue is expended. It depends here on labour becoming more productive in the spheres of production which produce the elements of capital itself, thus lowering the price of the commodities which enter into the production process as raw materials, instruments etc. If the productive power of labour has been increased through greater production of fixed capital in proportion to variable capital, then not only the amount, but also the value of reproduction will rise, since a part of the value of the fixed capital enters into the annual reproduction. This can occur simultaneously with the growth of the population and with an increase in the number of workers employed, although the number of workers steadily declines relatively, in proportion to the constant capital which they set in motion. There is therefore a growth, not only of wealth, but of value, and a larger quantity of living labour is set in motion, although the labour has become more productive and the quantity of labour in proportion to the quantity of commodities produced, has decreased. Finally, variable and constant capital can grow in equal degree with the natural, annual increase in population while the productivity of labour remains the same. In this case, too, capital will accumulate in volume and in value. These last points are all disregarded by Ricardo. In the same chapter Ricardo says: (This is quite wrong. The value of the product of a million men does not depend solely on their labour but also on the value of the capital with which they work; it will thus vary considerably, according to the amount of the already produced productive forces with which they work.) (they certainly will, since their past ||728| labour enters into the new reproduction to a much greater extent), (Each individual commodity may become cheaper but the value of the increased total mass of commodities [will] rise.) (N.B. provided the newly introduced machinery costs nothing.) Ricardo says here that the continuous development of the productive forces diminishes the value of the commodities produced under less favourable conditions, whether they are still on the market, or functioning as capital in the production process. But, although the value of one part of the commodities will be reduced, it does not by any means follow from this that the value of the general mass of commodities will be diminished . This would be the only effect if, firstly, the value of the machinery and commodities that have been newly added as a result of the improvements, is smaller than the loss in value suffered by previously existing goods of the same kind; secondly, if one leaves out of account the fact that with the development of the productive forces, the number of spheres of production is also steadily increasing, thus creating possibilities for capital investment which previously did not exist at all. Production not only becomes cheaper in the course of the development, but it is also diversified. Chapter IX, Taxes on Raw Produce . The total value of the product (or rather that part of the product which is divided between capitalist and worker) can decrease, without causing a fall in the net income, in terms of the mass of value it represents. (It may even rise proportionally.) This is dealt with in Chapter XXXII, Mr. Malthus s Opinions on Rent . Chapter V, On Wages . From the capitalist standpoint, everything is seen upside down. The number of the labouring population and the degree of the productivity of labour determine both the reproduction of capital and the reproduction of the population. Here, on the contrary, it appears that capital determines [the size] of the population. Chapter IX, Taxes on Raw Produce . This depends on the proportion in which the various component parts of capital grow as a result of accumulation. Capital can be accumulated and the demand for labour can decrease absolutely or relatively. According to Ricardo s theory of rent, the rate of profit has a tendency to fall, as a result of the accumulation of capital and the growth of the population, because the necessary means of subsistence rise in value, or agriculture becomes less productive. Consequently accumulation has the tendency to check accumulation, and the law of the falling rate of profit since agriculture becomes relatively less productive as industry develops hangs ominously over bourgeois production. On the other hand, Adam Smith regarded the falling rate of profit with satisfaction. Holland is his model. It compels most capitalists, except the largest ones, to employ their capital in industry, instead of living on interest and is thus a spur to production. The dread of this pernicious tendency assumes tragic-comic forms among Ricardo s disciples. Let us here compare the passages in which Ricardo refers to this subject: Chapter V, On Wages . (The latter statement is a parson s fabrication. The power of population decreases with the power of production.) First it should be noted here that Ricardo admits that the accumulation of capital must in all cases depend on the productive powers of labour , labour therefore is primary and not capital. Further, according to Ricardo, it would appear that in countries which have been settled for a long time and are industrially developed, more people are engaged in agriculture than are in the colonies while in fact it is the other way about. In proportion to the output ||730| , England, for example, uses fewer agricultural labourers than any other country, new or old, although a larger section of the non-agricultural population participates indirectly in agricultural production. But even this is by no means equal to the proportion of the population directly engaged in agriculture in the less developed countries. Supposing even that in England grain is dearer, and the costs of production are higher. More capital is employed. More past labour, even though less living labour is used in agricultural production. But the reproduction of this capital, although its value is reproduced in the product, costs less labour because of the already existing technical basis of production. Chapter VI, On Profits . First, however, a few observations. [The amount of] surplus-value, as we saw, depends not only on the rate of surplus-value but on the number of workers simultaneously employed, that is to say, on the size of the variable capital. Accumulation for its part is not directly determined by the rate of sur plus-value, but by the ratio of surplus-value to the total capital outlay, that is, by the rate of profit, and even more by the total amount of profit. This, as we have seen, is for the total capital of society identical with the aggregate amount of surplus-value, but for individual capitals employed in the different branches of production, it may differ considerably from the amount of surplus-value produced by them. If we consider the accumulation of capital as a whole, then profit equals surplus-value and the rate of profit equals surplus-value divided by capital or rather surplus-value reckoned on a capital of 100. If the rate of profit (per cent) is given, then the total amount of profit depends on the size of the capital advanced, and therefore accumulation too in so far as it is determined by profit. If the total sum of capital is given then the total amount of profit depends on the rate of profit. A small capital with a higher rate of profit may therefore yield more profit than a larger capital with a lower rate of profit. Let us suppose: If the multiplier of the capital and the divisor of the rate of profit are the same, that is to say, if the size of the capital increases in the same proportion as the rate of profit falls, then the total profit remains unchanged. 100 at 10 per cent amounts to 10, and 2 100 at 10/2 or 5 per cent also amounts to 10. In other words, the amount of profit remains unchanged if the rate of profit falls in the same proportion in which capital accumulates (grows). If the rate of profit falls more rapidly than the capital grows, then the amount of profit decreases. 500 at 10 per cent yields a total profit of 50. But six times as much, 6 500 or 3,000 at 10/10 per cent or 1 per cent yields only 30. Finally, if capital grows faster than the rate of profit falls, the amount of profit increases in spite of the falling rate of profit. Thus 100 at 10 per cent profit yields a profit of 10. But 300 (3 100) at 4 per cent (i.e., where the rate of profit has fallen by 60 per cent) yields a total profit of 12. Now to the passages from Ricardo: Chapter VI, On Profits . This, as Ricardo sees it, is the bourgeois Twilight of the Gods the Day of Judgement. Thus Ricardo on accumulation and the law of the falling rate of profit. * A distinction must be made here. When Adam Smith explains the fall in the rate of profit from an over-abundance of capital, an accumulation of capital, he is speaking of a permanent effect and this is wrong. As against this, the transitory over-abundance of capital, over-production and crises are something different. Permanent crises do not exist. * ||718| (That Ricardo (regards) money merely as means of circulation is synonymous with his regarding exchange-value as a merely transient form, and altogether as something purely formal in bourgeois or capitalist production, which is consequently for him not a specific definite mode of production, but simply the mode of production.) |718|| [a] In the manuscript, the upper left-hand corner of this page has been torn away. Consequently, out of the first nine lines of the text, only the right ends of six lines have been preserved. This does not make it possible to reproduce the complete text here, but it does permit us to surmise that Marx speaks here of crises which arise out of [the] revolution in the value of the variable capital . The increased price of the necessary means of subsistence caused, for example, by a poor harvest, leads to a rise in costs for those workers who are set in motion by variable capital . At the same time, this rise causes a fall in the demand for all other commodities that do not enter into the consumption of the workers. It is therefore impossible to sell the commodities at their value; the first phase in their reproduction , the transformation of the commodity into money is interrupted. The increased price of the means of subsistence thus leads to crisis in other branches of production. The two last lines of the damaged part of the page seem to summarise this train of thought, by saying that crises can arise as a result of increased prices of raw materials, whether these raw materials enter as raw materials into constant capital or as means of subsistence into the consumption of the workers. Ed. * ||720| (When spinning-machines were invented, there was over-production of yarn in relation to weaving. This disproportion disappeared when mechanical looms were introduced into weaving.) |720|| [b] In the manuscript: besides produce . Ed. [c] In the manuscript: produce . Ed.

Economic Manuscripts: Theories of Surplus-Value, Chapter 17

https://www.marxists.org/archive/marx/works/1863/theories-surplus-value/ch17.htm

Net income, as opposed to gross income (which is equal to the total product or the value of the total product), is the form in which the Physiocrats originally conceived surplus-value. They consider rent to be its sole form, since they think of industrial profit as merely a kind of wage; later economists who blur the concept of profit by calling it wages for the superintendence of labour, ought to agree with them. Net revenue is therefore in fact the excess of the product (or the excess of its value) over that part of it which replaces the capital outlay, comprising both constant and variable capital. It thus consists simply of profit and rent, the latter, in turn, is only a separate portion of the profit, a portion accruing to a class other than the capitalist class. The direct purpose of capitalist production is not the production of commodities, but of surplus-value or profit (in its developed form), the aim is not the product, but the surplus-product. Labour itself, from this standpoint, is only productive in so far as it creates profit or surplus-product for capital. If the worker does not create profit, his labour is unproductive. The mass of productive labour employed is only of interest to capital in so far as through it or in proportion to it the mass of surplus-labour grows. Only to this extent is what we called necessary labour-time, necessary. In so far as it does not have this result, it is superfluous and to be supressed. It is the constant aim of capitalist production to produce a maximum of surplus-value or surplus-product with the minimum capital outlay; and to the extent that this result is not achieved by overworking the workers, it is a tendency of capital to seek to produce a given product with the least possible expenditure economy of power and expense. It is therefore the economic tendency of capital which teaches humanity to husband its strength and to achieve its productive aim with the least possible expenditure of means. In this conception, the workers themselves appear as that which they are in capitalist production mere means of production, not an end in themselves and not the aim of production. Net income is not determined by the value of the total product, but by the excess of the value of the total product over the value of the capital outlay, or by the size of the surplus-product in relation to the total product. Provided this surplus grows the aim of capitalist production has been achieved even if the value decreases ||733| or, if along with the value, the total quantity of the product also decreases. Ricardo expressed these tendencies consistently and ruthlessly. Hence much howling against him on the part of the philanthropic philistines. In considering net income, Ricardo again commits the error of resolving the total product into revenue, wages, profits and rent, and disregarding the constant capital which has to be replaced. But we will leave this out of account here. Chapter XXXII Mr. Malthus s Opinions on Rent . [And in Chapter XXVI Ricardo says :] This is wrong because the portion devoted to replacing the capital (wages excluded) employed in production has been forgotten. Ricardo himself makes the following comment on this passage in a note on page 416: To gain a better understanding of Ricardo s views, the following passages must also be considered. There is this advantage always resulting from a relatively low price of corn, that the division of the actual production is more likely to increase the fund for the maintenance of labour, inasmuch as more will be allotted, under the name of profit, to the productive class, a[a] less under the name rent, to the unproductive class (l.c., p. 317). Productive class here refers only to the industrial capitalists. ||734| Supposing that through the import of foreign corn the price of corn falls so that rent is decreased by 1 million. Ricardo says that as a result the money incomes of the capitalists will increase, and then continues: But it may be said, that the capitalist s income will not he increased; that the million deducted from the landlord s rent, will he paid in additional wages to labourers! Be it so; the situation of the society will be improved, and they can [b] bear the same money burthens with greater facility than before; it will only prove what is still more desirable, that the situation of another class, and by far the most important class in society, is the one which is chiefly benefited by the new distribution. All that they receive more than 9 millions, forms part of the net income of the country, and it cannot be expended without adding to its revenue, its happiness, or its power. Distribute then the net income as you please. Give a little more to one class, and a little less to another, yet you do not thereby diminish it; a greater amount of commodities will be still produced with the same labour, although the amount of the gross money value of such commodities will be diminished; but the net money income of the country, that fund from which taxes are paid and enjoyments procured, would be much more adequate, than before, to maintain the actual population, to afford it enjoyments and luxuries, and to support any given amount of taxation (l.c., pp. 515 16). Chapter I (Section V) On Value . This point is quite right. At the same time it provides the answer to those who believe that the workers displaced by machines find employment in machine manufacture itself. This view, incidentally, belongs to an epoch in which the engineering workshop was still based entirely on the division of labour, and machines were not as yet employed on the production of machines. Suppose the annual wage of one man to be 50, then that of 100 is 5,000. If these 100 men are replaced by a machine which costs, similarly, 5,000, then this machine must be the product of the labour of less than 100 men. For besides paid labour it contains unpaid labour which forms the profit of the machine manufacturer. If it were the product of 100 men, then it would contain only paid labour. If the rate of profit were 10 per cent then approximately 4,545 of the 5,000 would represent the capital advanced and approximately 455 the profit. At [a wage of] 50, 4,545 would only represent 90 9/10 men. ||735| But the capital of 4,545 by no means represents only variable capital (capital laid out directly in wages). It represents also raw materials and the wear and tear of the fixed capital employed by the machine manufacturer. The machine costing 5,000, which replaces 100 men whose wages come to 5,000, thus represents the product of far fewer than 90 men. Moreover, the machine can only be employed profitably, if it at least that portion of it which enters annually with interest into the product, i.e., into its value%rang; is the (annual) product of far fewer men than it replaces. Every rise in wages increases the variable capital that has to be laid out, although the value of the product since this is equal to the variable capital plus the surplus-labour remains the same, for the number of workers which the variable capital sets in motion remains the same. Chapter XX Value and Riches, their Distinctive[c] Properties. Natural agents add nothing to the value of commodities, on the contrary, [they reduce it]. But by doing so they add to the surplus-value, which alone interests the capitalists. The machine costs [labour]. Natural agents as such cost nothing. They cannot, therefore, add any value to the product; rather they diminish its value in so far as they replace capital or labour, immediate or accumulated labour. In as much as natural philosophy teaches how to replace human labour by natural agents, without the aid of machinery or only with the same machinery as before (perhaps even more cheaply, as with the steam boiler, many chemical processes etc.), it costs the capitalist, and society as well, nothing and cheapens commodities absolutely. Ricardo continues the above-quoted passage thus: Society would in the first place be richer by the diminished price of flour. It would either consume more flour or spend the money formerly destined for flour upon some other commodity, either existing, or called into life, because a new fund for consumption had become available. Of this part of the revenue, formerly spent on flour and now, consequent upon the diminished price of flour, set free for some other application, it may be said that it was destined by virtue of the whole economy of the society for a certain thing, and that it is now freed from that destiny . It is the same as if new capital had been accumulated. And in this way, the application of machinery and natural agents frees capital and enables previously latent needs to be satisfied. On the other hand, it is wrong to speak of the funds destined for the maintenance of the ten men thrown out of employment by the new discovery. For the first fund which is saved or created through the discovery is that part of the revenue which society previously paid for flour and which it now saves as a result of the diminished price of flour. The second fund which is saved, however, is that which the miller previously paid for the ten men now displaced. This fund indeed, as Ricardo notes, is in no degree impaired by the discovery and the displacement of the ten men. But the fund has no natural connection with the ten men. They may become paupers, starve etc. One thing only is certain, that ten men of the new generation who should take the place of these ten men in order to turn the mill, must now be absorbed in other employment; and so the relative population has increased (independently of the average increase of population) in that the mill is now driven [by a natural agent] and the ten men who would otherwise have had to turn it are employed in producing some other commodity. The invention of machinery and the employment of natural agents thus set free capital and men (workers) and create together with freed capital freed hands (free hands, as Steuart calls them), whether ||736| [for] newly created spheres of production or [for] the old ones which are expanded and operated on a larger scale. The miller with his freed capital will build new mills or will lend out his capital if he cannot use it himself as a capitalist. On no account, however, is there a fund destined for the ten men displaced. We shall return to this absurd assumption: namely that, if the introduction of machines (or natural agents) does not (as is partly the case in agriculture, when horses take the place of men or stock-raising takes the place of corn growing) reduce the quantity of means of subsistence which can be laid out in wages, the fund which has thus been set free must necessarily be laid out as variable capital (as if there was no possibility of exporting means of subsistence, or spending them on unproductive workers, or [as if] wages in certain spheres could not rise etc.) and must even be paid out to the displaced labourers. Machinery always creates a relative surplus population, a reserve army of workers, which greatly increases the power of capital. In the note on page 335, Ricardo also makes the following observation directed against Say: Natural agents, indeed, add nothing to value, so long as there are no circumstances in which they give occasion for the creation of rent. But machines invariably add their own value to the already existing value and firstly, in so far as their existence facilitates the further transformation of circulating into fixed capital, and makes it possible to carry on this transformation on an ever growing scale, they increase not only wealth but also the value which is added by past labour to the product of the annual labour; secondly, since machines make possible the absolute growth of population and with it the growth of the mass of the annual labour, they increase the value of the annual product in this second way. |736|| ||736| Chapter XXXI On Machinery . This section, which Ricardo added to his third edition, bears witness to his honesty which so essentially distinguishes him from the vulgar economists. This inconvenience is great enough for the worker, if, as in modern production, it is perpetual.%rang; In the first place, Ricardo starts from the false assumption that machinery is always introduced into spheres of production in which the capitalist mode of production already exists. But the mechanised loom originally replaced the hand-loom weaver, the spinning jenny the hand spinner, the mowing, threshing and sowing machines often the small peasant who himself cultivated his plot of land, etc. In this case, not only is the labourer displaced, but his instrument of production too ceases to be capital (in the Ricardian sense). This entire or complete devaluation of the old capital also takes place when machinery revolutionises manufacture previously based on the simple division of labour. It is ridiculous to say in this case that the old capital continues to make the same demand for labour as before. The capital which was employed by the hand-loom weaver, hand spinner etc. has ceased to exist. But suppose, for the sake of simplicity, that the machinery is introduced there is, of course, no question here of the employment of machinery in new branches of industry%rang; only into spheres where capitalist production (manufacture) is already [dominant] or it may be introduced into the workshop already based on machinery, thus increasing the mechanisation of the labour processes or bringing into use improved machinery, which makes it possible either to dismiss a section of the workers previously employed or to produce a greater product while employing the same number of workers as before. The latter is of course the most favourable case. In order to reduce confusion, we must distinguish here between 1. the funds of the capitalist who employs machinery and dismisses workers; 2. the funds of society, that is, of the consumers of the commodities produced by this capitalist. ad 1. So far as the capitalist who introduces the machinery is concerned, it is wrong and absurd to say that he can lay out the same amount of capital in wages as before. (Even if he borrows, it is still equally wrong, not for him, but for society.) One part of his capital he will convert into machinery and other forms of fixed capital, another part into auxiliary materials which he did not need before, and a larger part into raw materials, if we assume that he produces more commodities with fewer workers, thus requiring more raw material. The proportion of variable capital that is to say, of capital laid out in wages to constant capital has decreased in his branch of business. And this reduction in the proportion will be permanent (indeed, the decrease in variable capital relatively to constant will even continue at a faster rate as a result of the productive power of labour developing along with accumulation), even if his business on the new scale of production expands to such an extent that he can re-employ the total number of dismissed workers, and employ even more workers than before. The demand for labour in his business will grow with the accumulation of his capital, but to a much smaller degree than his capital accumulates, and his capital will in absolute terms never again require the same amount of labour as before. The immediate result, however, will be that a section of the workers is thrown on to the street.%rang; But it may be said that indirectly the demand for workers will remain the same, for more workers will be required for the construction of machines. But Ricardo himself has already shown that machinery never costs as much labour as the labour which it displaces. It is possible for the hours of labour in the machine workshops to be lengthened for some time ||738| and that, in the first instance, not a man more may be employed in them. Raw material cotton for example can come from America and China and it makes no difference whatsoever to the Englishmen who have been thrown out of work, whether the demand for Negroes or coolies grows. But even assuming that the raw materials are supplied within the country, more women and children will be employed in agriculture, more horses etc., and perhaps more of one product and less of another will be produced. But there will be no demand for the dismissed workers, for in agriculture, too, the same process which creates a constant relative surplus population is taking place. Prima facie it is not likely that the introduction of machinery will set free any of the capital of the manufacturer when he makes his first investment. It merely provides a new type of investment for his capital, its immediate result, according to the assumption, is the dismissal of workers and the conversion of part of the variable capital into constant capital. ad 2. So far as the general public is concerned, in the first place, revenue is set free as a result of the lowering in price of the commodity produced by means of the machine; capital directly only in so far as the manufactured article enters into constant capital as an element of production. If it entered into the average consumption of the worker, it would, according to Ricardo, bring in its wake a reduction in real wages also in the other branches of industry.%rang; A part of the revenue thus set free, will be consumed in the same article, either because the reduction in price makes it accessible to new classes of consumers (in this case, incidentally, it is not displaced revenue that is expended on the article), or because the old consumers consume more of the cheaper article, for instance four pairs of cotton stockings instead of one pair. Another part of the revenue thus set free may serve to expand the industry into which the machinery has been introduced, or it may be used in the formation of a new industry producing a different commodity, or it may serve to expand a sphere of production which already existed before. For whatever purpose the revenue thus set free and reconverted into capital is used, it will in the first place hardly be sufficient to absorb that part of the increased population which each year streams into each branch of production, and which is now debarred from entering the old industry. It is, however, also possible for a portion of the freed revenue to be exchanged against foreign products or to be consumed by unproductive workers. But by no means does a necessary connection exist between the revenue that has been set free and the workers that have been set free of revenue. The absurd fundamental notion, however, which underlies Ricardo s view, is the following: The capital of the manufacturer who introduces machinery is not set free. It is merely utilised in a different manner, namely, in such a manner that it is not, as before, transformed into wages for the workers who are discharged. A part of the variable capital is converted into constant capital. Even if some of it were set free, it would be absorbed by spheres in which the discharged labourers could not work and where, at the most, those who replace them could find refuge. By expanding old spheres of production or opening up new ones the revenue set free in so far as it is not offset by greater consumption of the cheaper article or is not exchanged against foreign means of subsistence only gives the necessary opening (if it does so!) for that part of the annual population increase that is for the time being debarred from the old trade into which the machinery has been introduced. But the absurdity which lies concealed at the root of Ricardo s notions, is this: The means of subsistence which were previously consumed by the workers now discharged, remain after all in existence and are still on the market. The workers, on the other hand, are also available on the market. Thus there are, on the one hand, means of subsistence (and therefore means of payment) for workers, i.e., potential variable capital, and on the other, unemployed workers. Hence the fund is there to set them in motion. Consequently they will find employment. Is it possible that even such an economist as Ricardo can babble such hair-raising nonsense? According to this, no human being who is capable of work and willing, could ever starve in bourgeois society, when there are means of subsistence on the market, at the disposal of the society, to pay him for any work whatever. These means of subsistence, in the first place, do not by any means confront those workers as capital. Assume that 100,000 workers have suddenly been thrown out on the streets by machinery. Then in the first place there is no doubt whatsoever ||739| that the agricultural products on the market, which on the average suffice for the whole year and which were previously consumed by these workers, are still on the market as before. If there were no demand for them and if, at the same time, they were not exportable what would happen? As the supply relative to the demand would have grown, they would fall in price, and as a result of this fall in price, their consumption would rise, even if the 100,000 workers were starving to death. The price need not even fall. Perhaps less of these means of subsistence is imported or more of them exported. Ricardo imagines quixotically that the entire bourgeois social mechanism is arranged so nicely that if, for instance, ten men are discharged from their work, the means of subsistence of these workers now set free must definitely be consumed in one way or another by the identical ten men and that otherwise they could not be sold; as if a mass of semi-employed or completely unemployed were not for ever crawling around at the bottom of this society and as if the capital existing in the form of means of subsistence were a fixed amount. If the market-price of corn fell due to the decreasing demand, then the capital available in the shape of corn would be diminished (in terms of money) and would exchange for a smaller portion of the society s money revenue, in so far as it is not exportable. And this applies even more to manufactures. During the many years in which the hand-loom weavers were slowly dying of hunger, the production and export of English cotton cloth increased enormously. At the same time (1838 1841) the prices of provisions rose. And the weavers had only rags in which to clothe themselves and not enough food to keep body and soul together. The constant artificial production of a surplus population, which disappears only in times of feverish prosperity, is one of the necessary conditions of production of modern industry. There is nothing to prevent a part of the money capital lying idle and without employment and the prices of the means of subsistence falling because of relative surplus production while at the same time workers who have been displaced by machinery, are starving. It is true that in the long run the labour that has been released together with the portion of revenue or capital that has been released, will find an opening in a new sphere of production or in the expansion of the old one, but this is of more benefit to those who succeed the displaced men than to the displaced men themselves. New ramifications of more or less unproductive branches of labour are continually being formed and in these revenue is directly expended. Then there is the formation of fixed capital (railways etc.) and the labour connected with superintendence which this opens up; the manufacture of luxuries etc., foreign trade, which increasingly diversifies the articles on which revenue is spent. From his absurd standpoint, Ricardo therefore assumes that the introduction of machinery harms the workers only when it diminishes the gross product (and therefore gross revenue), a case which may occur, it is true, in large-scale agriculture, with the introduction of horses which consume corn in place of the workers, with the transition from corn-growing to sheep-raising etc.; but it is quite preposterous [to extend this case] to industry proper, whose ability to sell its gross product is by no means restricted by the internal market. (Incidentally, while one section of the workers starves, another section may be better fed and clothed, as may also the unproductive workers and the middle strata between worker and capitalist.) It is wrong, in itself, to say that the increase (or the quantity) of articles entering into revenue as such, forms a fund for the workers or forms capital for them. A portion of these articles is consumed by unproductive workers or non-workers, another portion may be transformed by means of foreign trade, from its coarse form, the form in which it serves as wages, into a form in which it enters into the revenue of the wealthy, or in which it serves as an element of production of constant capital. Finally, a portion will be consumed by the discharged workers themselves in the workhouse, or in prison, or as alms, or as stolen goods, or as payment for the prostitution of their daughters. In the following pages I shall briefly compare the passages in which Ricardo develops this nonsense. As he says himself, he received the impetus for it from Barton s work, which must therefore be examined, after citing those passages. ||740| It is self-evident, that in order to employ a certain number of workers each year, a certain quantity of food and other necessary means of subsistence must be produced annually. In large-scale agriculture, stock-raising etc, it is possible for the net income (profit and rent) to be increased while the gross income is reduced, that is to say, while the quantity of necessaries intended for the maintenance of the workers is reduced. But that is not the question here. The quantity of articles entering into consumption or, to use Ricardo s expression, the quantity of articles of which the gross revenue consists, can be increased, without a consequent increase in that portion of this quantity which is transformed into variable capital. This may even decrease. In this case more is consumed as revenue by capitalists, landlords and their retainers, the unproductive classes, the state, the middle strata (merchants) etc. What lies behind the view taken by Ricardo (and Barton) is that he originally set out from the assumption that every accumulation of capital is equivalent to an increase in variable capital, that the demand for labour therefore increases directly, in the same proportion, as capital is accumulated. But this is wrong, since with the accumulation of capital a change takes place in its organic composition and the constant part of the capital grows at a faster rate than the variable. This does not, however, prevent revenue from constantly growing, in value and in quantity. But it does not result in a proportionately larger part of the total product being laid out in wages. Those classes and sub-classes who do not live directly from their labour become more numerous and live better than before, and the number of unproductive workers increases as well. Since, in the first place, it has nothing to do with the question, we will not concern ourselves with the revenue of the capitalist who transforms a part of his variable capital into machinery (and who therefore also puts more into raw material relatively to the amount of labour employed in all those spheres of production where raw material is an element of the process of creating value). His revenue and that part of his capital which has actually gone into the production process exist, at first, in the form of products or rather commodities which he produces himself, for example yarn if he is a spinner. After the introduction of machinery he transforms one part of these commodities or the money for which he sells them into machinery, auxiliary materials and raw materials whereas, previously, he paid it out as wages to the workers, thus transforming it indirectly into means of subsistence for the workers. With some exceptions in agriculture, he will produce more of these commodities than before, although his discharged workers have ceased to consume, and therefore to buy his own articles, though they did so before. More of these commodities will now be present on the market, although for the workers thrown on the street, they have ceased to exist [as objects of consumption] or have ceased to exist in their previous quantity. Thus, so far as his own product is concerned, in the first place, even if it enters into the consumption of the workers, its increased production in no way contradicts the fact that a part of it has ceased to exist as capital for the workers. A larger part of it (of the total product) on the other hand must now replace that portion of the constant capital which resolves into machinery, auxiliary materials and raw materials, that is to say, it must be exchanged against more of these ingredients of reproduction than formerly. If the increase in commodities through machinery and the decrease in a previously existing demand (namely in the demand of the workers that have been discharged) for the commodities produced by this machinery were contradictory, then in most cases, no machinery could in fact be introduced. The mass of commodities produced and the portion of these commodities which is reconverted into wages, therefore, have no definite relationship or necessary connection, when we consider the capital of which a part is transformed into machinery instead of into wage labour. So far as society in general is concerned, the replacement of its revenue or rather the extension of the limits of its revenue takes place first of all on account of the articles whose price has been lowered by the introduction of machinery. This revenue may continue to be spent as revenue, and if a considerable part of it is transformed into capital, the increased population apart from the artificially created surplus population is already there to absorb that part of the revenue which is transformed into variable capital. Prima facie, therefore, what this comes to is only: the production of all other articles, particularly in the spheres which produce articles entering into the consumption of the workers despite the discharging of the hundred men etc. continues on the same scale as before; quite certainly at the moment when the workers are discharged. In so far, therefore, as the dismissed workers represented a demand for these articles, the demand has decreased, although the supply has remained the same. If the reduced demand is not made good, the price will fall (or instead of a fall in price a larger stock may remain on the market for the following year). If the article is not produced for export, too, and if the decrease in demand were to persist, then reproduction would decrease, but it does not follow that the capital employed in this sphere ||741| must necessarily decrease. Perhaps more meat or commercial crops or luxury foods are produced [and] less wheat or more oats for horses etc. or fewer fustian jackets and more bourgeois frock-coats. But none of these consequences need necessarily materialise, if, for instance, as a result of the cheapening of cotton goods, the employed workers are able to spend more on food etc. The same quantity of commodities and even more of them including those consumed by the workers can be produced, although less capital, a smaller portion of the total product, is transformed into variable capital, that is laid out in wages. Neither is it the case that part of the capital of the producers of these articles has been set free. At worst the demand for their commodities would have decreased, and the reproduction of their capital impeded by the reduced price of their commodities. Hence their own revenue would immediately decrease, as it would with any fall in the prices of commodities. But it cannot be said that any particular part of their commodities had previously confronted the discharged workers as capital and was now set free along with the workers. What confronted the workers as capital, was a part of the commodity now being produced with machinery; this part came to them in the form of money and was exchanged by them for other commodities (means of subsistence), which did not face them as capital, but confronted their money as commodities. This is therefore an entirely different relationship. The farmer and any other producer whose commodity they bought with their wages, did not confront them as capitalist and did not employ them as workers. They have only ceased to be buyers for him, which may possibly if not counterbalanced by other circumstances bring about a temporary depreciation in his capital, but does not set free any capital for the discharged workers. The capital that employed them is still in being , but no longer in a form in which it resolves into wages, or only indirectly and to a smaller extent. Otherwise anyone who through some bad luck ceased to have money, would inevitably set free sufficient capital for his own employment. By gross revenue Ricardo means that part of the product which replaces wages and surplus-value (profits and rent); by net revenue he means the surplus-product, [which] equals the surplus-value. He forgets here, as throughout his work, that a portion of the gross product must replace the value of the machinery and raw material, in short, the value of the constant capital. * * * Ricardo s subsequent treatment is of interest, partly because of some of the observations he makes in passing, partly because, mutatis mutandis, it is of practical importance for large-scale agriculture, particularly sheep-rearing, and shows the limitations of capitalist production. Not only is its determining purpose not production for the producers (workmen), but its exclusive aim is net revenue (profit and rent), even if this is achieved at the cost of the volume of production at the cost of the volume of commodities produced. First it is noteworthy that Ricardo here admits that causes which further the wealth of the capitalists and landlords may render the population redundant so that redundant population or over-population is presented here as the result of the process of enrichment itself, and of the development of productive forces which conditions this process. So far as the fund is concerned, out of which the capitalists and landlords draw their revenue and on the other hand the fund from which the workers draw theirs, to begin with, it is the total product which forms this common fund. A large part of the products which enter into the consumption of the capitalists and landlords, does not enter into the consumption of the workers. On the other hand, almost all, in fact more or less all, products which enter into the consumption of the workers also enter into that of the landlords and capitalists, their retainers and hangers-on, including dogs and cats. One cannot suppose that there are two essentially distinct fixed funds in existence. The important point is, what relative portion each of these groups draws from the common fund. The aim of capitalist production is to obtain as large an amount of surplus-product or surplus-value as possible with a given amount of wealth. This aim is achieved by constant capital growing more rapidly in proportion to variable capital or by setting in motion the greatest possible ||742| constant capital with the least possible variable capital. In much more general terms than Ricardo conceives here, the same cause effects an increase in the fund out of which capitalists and landlords draw their revenue, by a decrease in the fund out of which the workers draw theirs. It does not follow from this that the fund from which the workers draw their revenue is diminished absolutely; only that it is diminished relatively, in proportion to their total output. And that is the only important factor in the determination of the portion which they appropriate out of the wealth they themselves created. A capitalist we will suppose employs a capital of the value of 20,000 and that he carries on the joint business of a farmer, and a manufacturer of necessaries. We will further suppose, that 7,000 of this capital is invested in fixed capital, viz. in buildings, implements, etc., etc., and that the remaining 13,000 is employed as circulating capital in the support of labour. Let us suppose, too, that profits are 10 per cent, and consequently that the capitalist s capital is every year put into its original state of efficiency, and yields a profit of 2,000. The nature of surplus-value is very palpably expressed here. The passage is on pp. 469 70.%rang; As far as these products are concerned, the gross produce for that year is 15,000, and the net produce 2,000. Suppose now, that the following year the capitalist employs half his men in constructing a machine, and the other half in producing food and necessaries as usual. During that year he would pay the sum of 13,000 in wages as usual, and would sell food and necessaries to the same amount to his workmen; but what would be the case the following year? {This would, however, also be the case if by means of the machine which costs 7,500, exactly the same quantity of products were produced as previously with a variable capital of 13,000. Suppose the wear and tear of the machine were equal to one-tenth in one year, that is to 750, then the value of the product previously 15,000 would now be 8,250. (Apart from the wear and tear of the original fixed capital of 7,000, whose replacement Ricardo does not mention at all.) Of these 8,250, 2,000 would be profit, as previously out of the 15,000. The lower price would be advantageous to the farmer in so far as he himself consumes food and necessaries as revenue. It would also be advantageous to him in so far as it enables him to reduce the wages of the workers he employs thus releasing a portion of his variable capital. It is this portion, which to a certain degree could employ new labour, but only because the real wage of the workers who have been retained had fallen. A small number of those who have been discharged could thus at the cost of those who had been retained be re-employed. The fact however that the product would be just as great as before, would not help the dismissed workers. If the wage remained the same, no part of the variable capital would be released. The fact that the product of 8,250 represents the same amount of necessaries and food as previously 15,000 does not cause its value to rise. The farmer would have to sell it for 8,250, partly in order to replace the wear and tear of his machinery and partly in order to replace his variable capital. In so far as this lowering of the price of food and necessaries did not bring about a fall in wages in general, or a fall in the ingredients entering into the reproduction of the constant capital, the revenue of society would have expanded only in so far as it is expended on food and necessaries. A section of the unproductive and productive workers etc. would live better. That is all. (They could also save, but that is always action in the future). The discharged workers would remain on the street, although the physical possibility of their maintenance existed just as much as before. Moreover, the same capital would be employed in the reproduction process as before. But a part of the product (whose value had fallen), which previously existed as capital has now become revenue.} The reduced quantity of labour which the capitalist can employ, must, indeed, with the assistance of the machine, and after deductions for its repairs, produce a value equal to 7,500, it must replace the circulating capital with a profit of 2,000 on the whole capital; but if this be done, ||743| if the net income be not diminished, of what importance is it to the capitalist, whether the gross income be of the value of 3,000, of 10,000, or of 15,000? This is perfectly correct. The gross income is of absolutely no importance to the capitalist. The only thing which is of interest to him is the net income.%rang; Hence Adam Smith s partiality for gross produce, a partiality to which Ricardo objects. See Chapter XXVI On Gross and Net Revenue , which Ricardo opens with the words: Labour therefore becomes redundant, because the demand for labour diminishes, and that demand diminishes in consequence of the development in the productive powers of labour.%rang; According to this, first one part of capital is transformed into revenue, transferred to revenue not in terms of value, but as regards the use-value, the material elements of which the capital consists in order later, to transfer a part of the revenue back into capital. For example, when 13,000 was laid out in variable capital a part of the product amounting to 7,500, entered into the consumption of the workers whom the farmer employed, and this part of the product formed part of his capital. Following upon the introduction of machinery, for example, according to our supposition, the same amount of product is produced as previously, but its value does not amount to 15,000, as previously, but only to 8,250; and a larger part of this cheaper product enters into the revenue of the farmer or the revenue of the buyers of food and necessaries. They now consume a part of the product as revenue which was previously consumed industrially, as capital, by the farmer, although his labourers (since dismissed) consumed it as revenue as well. As a result of this growth in revenue which has come about because a part of the product which was previously consumed as capital is now consumed as revenue new capital is formed and revenue is reconverted into capital.%rang; this in any case not in proportion to the increased capital, not to the whole extent of that increase. Perhaps he would buy more horses, or guano, or new implements%rang; and, therefore, a portion of the people thrown out of work in the first instance, would be subsequently employed; and if the increased production, in consequence of the employment of the machine, was so great as to afford, in the shape of net produce, as great a quantity of food and necessaries as existed before in the form of gross produce, there would be the same ability to employ the whole population, and, therefore, there would not necessarily but possibly and probably!%rang; be any redundancy of people (l.c., pp. 469 72). In the last lines, Ricardo thus says what I observed above. In order that revenue is transformed in this way into capital, capital is first transformed into revenue. Or, as Ricardo puts it: First the net produce is increased at the expense of the gross produce in order then to reconvert a part of the net produce into gross produce. Produce is produce. Net or gross makes no difference (although this antithesis may also mean that the excess over and above the outlay increases, that therefore the net produce grows although the total product, i.e., the gross produce, diminishes). The produce only becomes net or gross, according to the determinate form which it assumes in the process of production. But the same may, and in most instances ||744| will, be the case, even if the gross produce remains the same or increases; but that part of it which was formerly used as variable capital, is now consumed as revenue. It is superfluous for us to go into Ricardo s absurd example of the clothier who reduces his production because of the introduction of machinery (pp. 472 74). It will always increase that value whenever it diminishes the value of labour. this sentence contradicts the whole of Ricardo s doctrine, according to which the lowering in the price of necessaries, and therefore of wages, raises profits, whereas machinery, which permits more to be extracted from the same land with less labour, must lower rent%rang;, this is indeed a fine result of machinery, that a considerable section of the female and male labouring class is turned into servants;%rang; The entire apologetic bourgeois presentation of machinery does not deny, 1. That machinery sometimes here, sometimes there, but continually makes a part of the population redundant, throws a section of the labouring population on the street. It creates a surplus population, thus leading to lower wages in certain spheres of production, here or there, not because the population grows more rapidly than the means of subsistence, but because the rapid growth in the means of subsistence, due to machinery, enables more machinery to be introduced and therefore reduces the immediate demand for labour. This comes about not because the social fund diminishes, but because of the growth of this fund, the part of it which is spent in wages falls relatively. 2. Even less do these apologetics deny the subjugation of the workers who operate the machines and the wretchedness of the manual workers or craftsmen who are displaced by machinery and perish. What they assert and partly rightly is [firstly] that due to machinery and the development of the productivity of labour in general the net revenue (profit and rent) grows to such an extent, that the bourgeois needs more menial servants than before; whereas previously he had to lay out more of his product in productive labour, he can now lay out more in unproductive labour, [so that] servants and other workers living on the unproductive class increase in number. This progressive transformation of a section of the workers into servants is a fine prospect. For the worker it is equally consoling that because of the growth in the net product, more spheres are opened up for unproductive workers, who live on his product and whose interest in his exploitation coincides more or less with that of the directly exploiting classes. Secondly, that because of the spur given to accumulation, on the new basis requiring less living labour in proportion to past labour, the workers who were dismissed and pauperised, or at least that part of the population increase ||745| which replaces them, are either absorbed in the expanding engineering-works themselves, or in branches of production which machinery has made necessary and brought into being, or in new fields of employment opened by the new capital, and satisfying new wants. This then is another wonderful prospect: the labouring class has to bear all the temporary inconveniences unemployment, displacement of labour and capital but wage-labour is nevertheless not to be abolished, on the contrary it will be reproduced on an ever growing scale, growing absolutely, even though decreasing relatively to the growing total capital which employs it. Thirdly: that consumption becomes more refined due to machinery. The reduced price of the immediate necessities of life allows the scope of luxury production to be extended. Thus the third fine prospect opens before the workers : in order to win their means of subsistence, the same amount of them as before, the same number of labourers will enable the higher classes to extend, refine, and diversify the circle of their enjoyments, and thus to widen the economic, social, and political gulf separating them from their betters. Fine prospects, these, for the labourer, and very desirable results of the development of the productive powers of his labour. Furthermore, Ricardo then shows that it [is in] the interest of the labouring classes, The same applies to the maintenance of large fleets and armies. Whether it (the revenue) was expended in the one way or in the other, there would be the same quantity of labour employed in production; for the food and clothing of the soldier and sailor would require the same amount of industry to produce it as the more luxurious commodities; but in the case of the war, there would be the additional demand for men as soldiers and sailors; and, consequently, a war which is supported out of the revenue, and not from the capital of a country, is favourable to the increase of population (l.c., p. 477). There are two tendencies which constantly cut across one another; [firstly,] to employ as little labour as possible, in order to produce the same or a greater quantity of commodities, in order to produce the same or a greater net produce, surplus-value, net revenue; secondly, to employ the largest possible number of workers (although as few as possible in proportion to the quantity of commodities produced by them) , because at a given level of productivity the mass of surplus-value and of surplus-product grows with the amount of labour employed. The one tendency throws the labourers on to the streets and makes a part of the population redundant, the other absorbs them again and extends wage-slavery absolutely, so that the lot of the worker is always fluctuating but he never escapes from it. The worker, therefore, justifiably regards the development of the productive power of his own labour as hostile to himself; the capitalist, on the other hand, always treats him as an element to be eliminated from production. These are the contradictions with which Ricardo struggles in this chapter. What he forgets to emphasise ||746| is the constantly growing number of the middle classes, those who stand between the workman on the one hand and the capitalist and landlord on the other. The middle classes maintain themselves to an ever increasing extent directly out of revenue, they are a burden weighing heavily on the working base and increase the social security and power of the upper ten thousand. According to the bourgeoisie the perpetuation of wage-slavery through the application of machinery is a vindication of the latter. First gross revenue declines and net revenue increases. Then a portion of the increased net revenue is transformed into capital again and hence into gross revenue. Thus the workman must constantly enlarge the power of capital, and then, after very serious disturbances, obtain permission to repeat the process on a larger scale. With every increase of capital and population, food will generally rise, on account of its being more difficult to produce (l.c., pp. 478 79). It then goes straight on: The machine is thus a means to prevent a rise of labour. The truth is, that it is not so much the displaced labour as, rather, the new supply of labour the part of the growing population which was to replace it for which, as a result of new accumulation, new fields of employment are opened. {How little the employment of machinery is dependent on the price of food is shown precisely by America, which employs relatively much more machinery than England, where there is always a redundant population. The use of machinery may, however, depend on the relative scarcity of labour as, for instance, in America, where a comparatively small population is spread over immense tracts of land. Thus we read in the Standard of September 19, 1862, in an article on the Exhibition: In the last sentence Ricardo expresses the correct law of growth of capital, although his reasoning is very one-sided. He adds a note to this, from which it is evident that he follows Barton here, whose work we will therefore examine briefly. But first one more comment. When Ricardo discussed revenue expended either on menial servants or luxuries, he wrote: Similarly the gross produce, in terms of value, may be the same, but it may be realised and this would strongly affect the workmen in different commodities according to whether it had to replace more variable or constant capital. Barton s work is called: John Barton. Observations on the Circumstances which Influence the Condition of the Labouring Classes of Society, London, 1817. Let us first gather together the small number of theoretical propositions to be found in Barton s work. Ricardo comments on this passage in a note on page 480 of his work: To Barton s above proposition we must add the following one: And: Indisputably, Barton has very great merit. Adam Smith believes that the demand for labour grows in direct proportion to capital accumulation. Malthus derives surplus population from capital not being accumulated (that is, reproduced on a growing scale) as rapidly as the population. Barton was the first to point out that the different organic component parts of capital do not grow evenly with accumulation and development of the productive forces, that on the contrary in the process of this growth, that part of capital which resolves into wages decreases in proportion to that part (he calls it fixed capital) which in relation to its size, alters the demand for labour only to a very small degree. He is therefore the first to put forward the important proposition that the number of labourers employed is not in proportion to the wealth of the state , that relatively more workers are employed in an industrially undeveloped country than in one which is industrially developed. In the third edition of his Principles, Chapter XXXI On Machinery , Ricardo having followed exactly in Smith s footsteps in his earlier editions now takes up Barton s correction on this point, and moreover, in the same one-sided formulation in which Barton gives it. The only point in which he makes an advance and this is important is that, unlike Barton, he not only says that the demand for labour does not grow proportionally with the development of machinery, but that the machines themselves render the population redundant [l.c., p. 469], i.e., create surplus population. But he wrongly limits this effect to the case in which the net produce is increased at the cost of the gross produce. This only occurs in agriculture, but he also transfers it into industry. Essentially however, the whole of the absurd theory of population was thus overthrown, in particular also the claptrap of the vulgar economists, that the workers must strive to keep their multiplication below the standard of the accumulation of capital. The opposite follows from Barton s and Ricardo s presentation, namely that to keep down the labouring population, thus diminishing the supply of labour, and, consequently, raising its price, would only accelerate the application of machinery, the conversion of circulating into fixed capital, and, hence, make the population artificially redundant ; redundancy exists, generally, not in regard to the quantity of the means of subsistence, but the means of employment, the actual demand for labour. ||749| Barton s error or deficiency lies in his conceiving the organic differentiation or composition of capital only in the form in which it appears in the circulation process as fixed and circulating capital a difference which the Physiocrats had already discovered, which Adam Smith had developed further and which became a prepossession among the economists who succeeded him; a prepossession in so far as they see only this difference which was handed down to them in the organic composition of capital. This difference, which arises out of the process of circulation, has a considerable effect on the reproduction of wealth in general, and therefore also on that part of it which forms the wages fund. But that is not decisive here. The difference between fixed capital such as machinery, buildings, breeding cattle etc. and circulating capital, does not directly lie in their relation to wages, but in their mode of circulation and reproduction. The direct relation of the different component parts of capital to living labour is not connected with the phenomena of the circulation process. It does not arise from the latter, but from the immediate process of production, and its [expression] is the relation of constant to variable capital, whose difference is based only on their relationship to living labour. Thus Barton says for example: The demand for labour does not depend on fixed capital, but only on circulating capital. But a part of circulating capital, raw material and auxiliary materials, is not exchanged against living labour, any more than is machinery. In all branches of industry in which raw material enters as an element into the process of the creation of value in so far as we consider only that portion of the fixed capital which enters into the commodity it forms the most important part of that portion of capital which is not laid out in wages. Another part of the circulating capital, namely of the commodity capital, consists of articles of consumption which enter into the revenue of the non-productive class (i.e., [not of] the working class). The growth of these two parts of circulating capital therefore does not influence the demand for labour any more than does that of fixed capital. Furthermore, the part of the circulating capital which resolves into raw materials and auxiliary materials increases in the same or even greater proportion as that part of capital which is fixed in machinery etc. On the basis of the distinction made by Barton, Ramsay goes further. He improves on Barton but retains his method of approach. Indeed he reduces the distinction to constant and variable capital, but continues to call constant capital fixed capital, although he includes raw materials etc., and [calls] variable capital circulating capital, although he excludes from it all circulating capital which is not directly laid out in wages. More on this later, when we come to Ramsay. It does, however, show the intrinsic necessity of the progress. Once the distinction between constant capital and variable capital has been grasped, a distinction which arises simply out of the immediate process of production, out of the relationship of the different component parts of capital to living labour, it also becomes evident that in itself it has nothing to do with the absolute amount of the consumption goods produced, although plenty with the way in which these are realised. The way, however, of realising the gross revenue in different commodities is not, as Ricardo has it, and Barton intimates it, the cause, but the effect of the immanent laws of capitalistic production, leading to a diminishing proportion, compared with the total amount of produce, of that part of it which forms the fund for the reproduction of the labouring class. If a large part of the capital consists of machinery, raw materials, auxiliary materials etc., then a smaller portion of the working class as a whole will be employed in the reproduction of the means of subsistence ||750| which enter into the consumption of the workers. This relative diminution in the reproduction of variable capital, however, is not the reason for the relative decrease in the demand for labour, but on the contrary, its effect. Similarly: A larger section of the workers employed in the production of articles of consumption which enter into revenue in general, will produce articles of consumption that are consumed by are exchanged against the revenue of capitalists, landlords and their retainers (state, church etc.), [and a smaller) section [will produce] articles destined for the revenue of the workers. But this again is effect, not cause. A change in the social relation of workers and capitalists, a revolution in the conditions governing capitalist production, would change this at once. The revenue would be realised in different commodities , to use an expression of Ricardo s. There is nothing in the, so-to-speak, physical conditions of production which forces the above to take place. The workmen, if they were dominant, if they were allowed to produce for themselves, would very soon, and without great exertion, bring the capital (to use a phrase of the vulgar economists) up to the standard of their needs. The very great difference is whether the available means of production confront the workers as capital and can therefore be employed by them only in so far as it is necessary for the increased production of surplus-value and surplus-produce for their employers, in other words whether the means of production employ the workers, or whether the workers, as subjects, employ the means of production in the accusative case in order to produce wealth for themselves. It is of course assumed here that capitalist production has already developed the productive forces of labour in general to a sufficiently high level for this revolution to take place. Take for example 1862 (the present autumn). The plight of the Lancashire unemployed labourers; on the other hand, the difficulty of finding employment for money on the London money market, this has almost made necessary the formation of fraudulent companies, since it [is] difficult to obtain two per cent for money. According to Ricardo s theory some new field of employment ought to have been opened up, for on the one hand there is capital in London, and on the other, unemployed workers in Manchester.%rang; Barton explains further, that the accumulation of capital increases the demand for labour only very slowly, unless the population has grown to such an extent previously, that the rate of wages is low. for the same reason, the rate of wages can remain below the average for long periods, because of all commodities, labour is the most difficult to withdraw from the market and thus to bring down to the level of the actual demand%rang; Barton puts forward various propositions here: First: It is not the rise of wages in itself which increases the labouring population, but a fall in wages may very easily and rapidly make it rise. Proof: First half of the eighteenth century, gradual rise in wages, slow movement in population; in the second half of the eighteenth century, on the other hand, sharp fall in real wages, rapid increase in the labouring population. Reason: It is not the insufficient rate of wages which prevents marriages, but the difficulty of finding employment. Secondly: The facility of finding employment stands, however, in inverse ratio to the rate of wages. For capital is transformed into circulating or fixed capital, that is to say, capital which employs labour or capital which does not employ it, in inverse proportion to the high or low level of wages. If wages are low, then the demand for labour is great because it is then profitable for the employer to use much labour, and he can employ more with the same circulating capital. If wages are high, then the manufacturer employs as few workers as possible and seeks to do everything with the aid of machines. Thirdly: The accumulation of capital by itself raises the demand for labour only slowly, because each increase in this demand, if [labour is] scarce, causes [the wages] of labour to rise rapidly and brings about a fall of profit which is ten times greater than the rise in wages. Accumulation can have a rapid effect on the demand for labour only if accumulation was preceded by a large increase in the labouring population, and wages are therefore very low so that even a rise of wages still leaves them low because the demand mainly absorbs unemployed workers rather than competing for those fully employed. This is all, cum grano salis, correct so far as fully developed capitalist production is concerned. But it does not explain this development itself. And even Barton s historical proof therefore contradicts that which it is supposed to prove. During the first half of the eighteenth century, wages rose gradually, the population grew slowly and [there was] no machinery; moreover, compared with the following half of the century, little other fixed capital [was employed]. During the second half of the eighteenth century, however, wages fell continuously, population grew amazingly and [so did] machinery. But it was precisely the machinery which on the one hand made the existing population superfluous, thus reducing wages, and on the other hand, as a result of the rapid development of the world market, absorbed the population again, made it redundant once more and then absorbed it again; while at the same time, it speeded up the accumulation of capital to an extraordinary extent, and increased the amount of variable capital, although variable capital fell relatively, both compared with the total value of the product and also compared with the number of workers it employed. In the first half of the eighteenth century, however, large-scale industry did not as vet exist, but only manufacture based on the division of labour. The principal component part of capital was still variable capital laid out in wages. The productivity of labour developed slowly, compared with the second half of the century. The demand for labour, and therefore also wages, rose almost proportionately to the accumulation of capital. England was as vet essentially an agricultural nation and a very extensive cottage industry spinning and weaving which was carried on by the agricultural population, continued to exist, and even to expand. A numerous proletariat could not as yet come into being, any more than there could exist industrial millionaires at the time. In the first half of the eighteenth century, variable capital was relatively dominant; in the second, fixed capital; but the latter requires a large mass of human material. Its introduction on a large scale must be preceded by an increase of population. The whole course of things, however, contradicts Barton s presentation, in as much as it is evident that a general change in the method of production took place. The laws which correspond to large-scale industry are not identical with those corresponding to manufacture ||752|. The latter constitutes merely a phase of development leading to the former. But in this context some of Barton s historical data comparing the development in England during the first half and the second half of the eighteenth century are of interest, partly because they show the movement of wages, and partly because they show the movement in corn prices. (l.c., pp. 25 26) From a table of the number of Bills for the inclosing of land passed in each session since the revolution, given in the Lord s Report on the Poor Laws (1816?), it appears that in sixty-six years from 1688 to 1754, that number was 123; in the sixty-nine[k] years from 1754 to 1813 it was 3,315. The progress of cultivation was then about twenty-five times more rapid during the last period than the former. But during the first sixty-six years more and more corn was grown continually for exportation; whereas, during the greater part of the last sixty-nine years, we not only consumed all that we had formerly sent abroad, but likewise imported an increasing, and at last a very large quantity, for our own consumption the increase of population in the former period, as compared with the latter, was still slower than the progress of cultivation might appear to indicate (l. c., pp. 11 12). Barton calculates from good sources that It is not a question of how great a quantity of means of subsistence is produced annually, but how large a portion of living labour enters into the annual production of fixed and circulating capital. This determines the size of the variable capital in relation to constant. Barton explains the remarkable increase in population which took place almost all over Europe during the last 50 to 60 years, from the increased productivity of the American mines, since this abundance of precious metals raised commodity prices more than wages, thus in fact, lowering the latter and causing the rate of profit to rise (l.c., pp. 29 35). |XIII-752|| [a] In the manuscript: and . Ed. [b] In the manuscript: they will be able instead of they can . Ed. [c] In the manuscript: different. Ed. [d] In the manuscript: on , instead of: in the support of . Ed. * He means wages . [e] In the manuscript: geometrical . Ed. [f] In the manuscript: A machine . Ed. [g] In the manuscript: given . Ed. [h] In the manuscript: manufacturers . Ed. [i] Marx gives this part of the quotation in his own words, summarising the idea expressed by Barton. Ed. [j] In the manuscript: been . Ed. [k] Although Barton says 69 years in fact the period from 1754 to 1813 comprises only 59 years. Ed.

Economic Manuscripts: Theories of Surplus-Value, Chapter 18

https://www.marxists.org/archive/marx/works/1863/theories-surplus-value/ch18.htm

||XIII-753| The writings of Malthus which have to be considered here are: 1) The Measure of Value Stated and Illustrated etc., London, 1823. 2) Definitions in Political Economy etc., London, 1827 (as well as the same work published by John Cazenove in London in 1853 with Cazenove s Notes and Supplementary Remarks ). 3) Principles of Political Economy etc., second ed., London, 1836 (first [edition] 1820 or thereabout, to be looked up). 4) Also to be taken into consideration the following work by a Malthusian (i.e., a Malthusian in contrast to the Ricardians) Outlines of Political Economy etc., London, 1832. In his Observations on the Effects of the Corn Laws etc. (1814) Malthus still says the following about Adam Smith: But in his Principles of Political Economy (1820), Malthus borrows this standard measure of value from Smith to use it against Ricardo, though Smith himself never used it when he was really analysing his subject matter. Malthus himself, in his book on the Corn Laws already referred to, adopted Smith s other definition concerning the determination of value by the quantity of capital (accumulated labour) and (immediate) labour necessary for the production of an article. One cannot fail to recognise that both Malthus s Principles and the two other works mentioned, which were intended to amplify certain aspects of the Principles, were largely inspired by envy at the success of Ricardo s book and were an attempt by Malthus to regain the leading position which he had attained by skilful plagiarism before Ricardo s book appeared. In addition, Ricardo s definition of value, though somewhat abstract in its presentation, was directed against the interests of the landlords and their retainers, which Malthus represented even more directly than those of the industrial bourgeoisie. At the same time, it cannot be denied that Malthus presented a certain theoretical, speculative interest. Nevertheless his opposition to Ricardo and the form this opposition assumed was possible only because Ricardo had got entangled in all kinds of inconsistencies. The points of departure for Malthus s attack are, on the one hand, the origin of surplus-value and [on the other] the way in which Ricardo conceives the equalisation of cost-prices in different spheres of the employment of capital as a modification of the law of value itself [as well as] his continual confusion of profit with surplus-value (direct identification of one with the other). Malthus does not unravel these contradictions and quid pro quos but accepts them from Ricardo in order to be able to overthrow the Ricardian law of value, etc., by using this confusion and to draw conclusions acceptable to his protectors. The real contribution made by Malthus in his three books is that he places the main emphasis on the unequal exchange between capital and wage-labour, whereas Ricardo does not actually explain how the exchange of commodities according to the law of value (according to the labour-time embodied in the commodities) gives rise to the unequal exchange between capital and living labour, between a definite amount of accumulated labour and a definite amount of immediate labour, and therefore in fact leaves the origin of surplus-value obscure (since he makes capital exchange immediately for labour and not for labour power). ||754| Cazenove, one of the few later disciples of Malthus, realises this and says in his preface to Definitions etc., mentioned above: Here this can only mean that the relation of wages to profit, the exchange of capital and wage-labour, of accumulated labour and immediate labour, do not directly coincide with the law of the interchange of commodities. If one considers the utilisation of money or commodities as capital that is, not their value but their capitalist utilisation it is clear that surplus-value is nothing but the surplus of labour (the unpaid labour) which is commanded by capital, i.e., which the commodity or money commands over and above the quantity of labour it itself contains. In addition to the quantity of labour it itself contains (equal to the sum of labour contained in the elements of production of which it is made up, plus the immediate labour which is added to them), it buys a surplus of labour which it does not itself embody. This surplus constitutes the surplus-value; its size determines the rate of expansion of capital. And this surplus quantity of living labour for which it is exchanged is the source of profit. Profit (or rather surplus-value) does not result from the exchange of an amount of materialised labour for an equivalent amount of living labour, but from the portion of living labour which is appropriated in this exchange without an equivalent payment in return, that is, from unpaid labour which capital appropriates in this pseudo-exchange. If one disregards how this process is mediated and Malthus is all the more justified in disregarding it as the intermediate link is not mentioned by Ricardo if one considers only the factual content and the result of this process, then production of surplus-value, profit, transformation of money or commodities into capital, arises not from the fact that commodities are exchanged according to the law of value, namely, in proportion to the amount of labour-time which they cost, but rather conversely, from the fact that commodities or money (i.e., materialised labour) are exchanged for more living labour than is embodied or worked up in them. Malthus s sole contribution in the books mentioned is the emphasis he places on this point, which emerges all the less sharply in Ricardo as Ricardo always presupposes the finished product which is divided between the capitalist and the worker without considering exchange, the intermediate process which leads to this division. However, this contribution is cancelled out by the fact that he confuses the utilisation of money or the commodity as capital, and hence its value in the specific function of capital, with the value of the commodity as such; consequently he falls back in his exposition, as we shall see, on the fatuous conceptions of the Monetary System, on profit upon expropriation, and gets completely entangled in the most hopeless confusion. Thus Malthus, instead of advancing beyond Ricardo, seeks to drag political economy back to where it was before Ricardo, even to where it was before Adam Smith and the Physiocrats. Mr. Malthus wants to include profit directly in the definition of value, so that it follows immediately from this definition, which is not the case with Ricardo. This shows that he felt where the difficulty lay. Besides, it is particularly absurd that he declares the value of the commodity and its realisation as capital to be identical. When commodities or money (in brief, materialised labour) are exchanged as capital against living labour, they are always exchanged against a ||755| greater quantity of labour than they contain. And if one compares the commodity before this exchange on the one hand, with the product resulting from this exchange with living labour on the other, one finds that the commodity has been exchanged for its own value (equivalent) plus a surplus over and above its own value the surplus-value. But it is therefore absurd to say that the value of a commodity is equal to its value plus a surplus over and above this value. If the commodity, as a commodity, is exchanged for other commodities and not as capital against living labour, then, insofar as it is exchanged for an equivalent, it is exchanged for the same quantity of materialised labour as is embodied in it. The only notable thing is therefore that according to Malthus the profit exists already in the value of the commodity and that it is clear to him that the commodity always commands more labour than it embodies. Malthus is right in this also. The conditions of supply, i.e., of the production or rather the reproduction of a commodity on the basis of capitalist production, are that it or its value (the money into which it is transformed) is exchanged in the process of its production or reproduction for more labour than is embodied in it, for it is only produced in order to realise a profit. For example, a cotton manufacturer sells his calico. The condition for the supply of new calico is that he exchanges the money the exchange-value of the calico for more labour in the process of the reproduction of the calico than was embodied in it or than is represented by the money. For the cotton manufacturer produces calico as a capitalist. What he wants to produce is not calico, but profit. The production of calico is only a means for the production of profit. But what follows from this? The calico he produces contains more labour-time, more labour than was contained in the calico advanced. This surplus labour-time, this surplus-value, is also represented by a surplus product, i.e., more calico than was exchanged for labour. Therefore one part of the product does not replace the calico exchanged for labour, but constitutes surplus product which belongs to the manufacturer. Or, if we consider the whole product, each yard of calico contains an aliquot part, or its value contains an aliquot part, for which no equivalent is paid; this represents unpaid labour. If the manufacturer sells a yard of calico at its value, that is, if he exchanges it for money or for commodities which contain an equal amount of labour-time, he realises a sum of money, or receives a quantity of commodities which cost him nothing. For he sells the calico not for the labour-time for which he has paid, but for the labour-time embodied in the calico, and he did not pay for part of this labour-time. ||756| He receives, for example, labour-time equal to 12 shillings, but he only paid 8 shillings of this amount. When he sells it at its value, he sells it for 12 shillings, and thus gains 4 shillings. As far as the buyer is concerned, the assumption is that, under all circumstances, he pays nothing but the value of the calico. This means that he gives a sum of money which contains as much labour-time [as] there is in the calico. Three cases are possible. The buyer is a capitalist. The money (i.e., the value of the commodity) with which he pays, also contains a portion of unpaid labour. Thus, if one person sells unpaid labour, the other person buys with unpaid labour. Both realise unpaid labour One as seller, the other as buyer. Or, the buyer is an independent producer. In this case he receives equivalent for equivalent. Whether the labour which the seller sells him in the shape of commodities is paid for or not, does not concern him. He receives as much materialised labour as he gives. Or, finally, he is a wage-worker. In this case also, like every other buyer provided the commodities are sold at their value he receives an equivalent for his money in the shape of commodities. He receives as much materialised labour in commodities as he gives in money. But for the money which constitutes his wages he has given more labour than is embodied in the money. He has replaced the labour contained in it along with surplus labour which he gives gratis. He paid for the money above its value, and therefore also pays for the equivalent of the money, the calico, etc., above its value. The cost for him as purchaser is thus greater than it is for the seller of any commodity although he receives an equivalent of the money in the commodity; but in the money he did not receive an equivalent of his labour; on the contrary, he gave more than the equivalent in labour. Thus the worker is the only one who pays for all commodities above their value even when he buys them at their value, because he buys money, the universal equivalent, above its value for labour. Consequently, no gain accrues to those who sell commodities to the worker. The worker does not pay the seller any more than any other buyer, he pays the value of labour. In fact, the capitalist who sells the commodity produced by the worker back to him, realises a profit on this sale, but only the same profit as he realises on every other buyer. His profit as far as this worker is concerned arises not from his having sold the worker the commodity above its value, but from his having previously bought it from the worker, as a matter of fact in the production process, below its value. Now Mr. Malthus, who transformed the utilisation of commodities as capital into the value of commodities, quite consistently transforms all buyers into wage-workers, in other words he makes them all exchange with the capitalist not commodities, but immediate labour, and makes them all give back to the capitalist more labour than the commodities contain, while conversely, the capitalist s profit results from selling all the labour contained in the commodities when he has paid for only a portion of the labour contained in them. Therefore, whereas the difficulty with Ricardo [arises from] the fact that the law of commodity exchange does not directly explain the exchange between capital and wage-labour, but rather seems to contradict it, Malthus solves the difficulty by transforming the purchase (exchange) of commodities into an exchange between capital and wage-labour. What Malthus does not understand is the difference between the total sum of labour contained in a particular commodity and the sum of paid labour which is contained in it. It is precisely this difference which constitutes the source of profit. Further, Malthus inevitably arrives at the point of deriving profit from the fact that the seller sells his commodity not only above the amount it costs him (and the capitalist does this), but above what it costs; he thus reverts to the vulgarised conception of profit upon expropriation and derives surplus-value from the fact that the seller sells the commodity above its value (i.e., for more labour-time than is contained in it). What he thus gains as a seller of a commodity, he loses as a buyer of another and it is absolutely impossible to discover what profit is to be made in reality from such a general nominal price increase. ||757| It is in particular difficult to understand how society as a whole can enrich itself in this way, how a real surplus-value or surplus product can thus arise. An absurd, stupid idea. Relying on some propositions of Adam Smith who, as we have seen, na vely expresses all sorts of contradictory elements and thus becomes the source, the starting-point, of diametrically opposed conceptions Mr. Malthus attempts in a confused way, though on the basis of a correct surmise, and of the realisation of the existence of an unsolved difficulty, to counterpose a new theory to that of Ricardo and thus to maintain a front rank position. The transition from this attempt to the nonsensical, vulgarised conceptions proceeds in the following way. If we consider the utilisation of a commodity as capital that is, in its exchange for living, productive labour we see that it commands besides the labour-time it itself contains, i.e., besides the equivalent reproduced by the worker surplus labour-time, which is the source of profit. Now if we transfer this utilisation of the commodity to its value, then each purchaser of a commodity must act as if he were a worker, that is, in buying it, besides the quantity of labour contained in the commodity, he must give for it a surplus quantity of labour. But since other purchasers, apart from the workers, are not related to commodities as workers <even when the worker appears as a mere purchaser, the old, original difference persists indirectly, as we have seen>, it must be assumed that although they do not directly give more labour than is contained in the commodities, they give a value which contains more labour, and this amounts to the same thing. It is by means of this [quantity] of surplus labour, or, what amounts to the same thing, the value of more labour , that the transition is made. In fact, it comes to this: the value of a commodity consists of the value paid for it by the purchaser, and this value is equal to the equivalent (the value) of the commodity plus a surplus over and above this value, surplus-value. Thus we have the vulgarised view that profit consists in a commodity being sold more dearly than it was bought. The purchaser buys it for more labour or for more materialised labour than it costs the seller. But if the purchaser is himself a capitalist, a seller of commodities, and his money, his means of purchase, represents only goods which have been sold, then it follows that both have sold their goods too dearly and are consequently swindling each other, moreover they are swindling each other to the same extent, provided they both merely secure the average rate of profit. Where are the buyers to come from who will pay the capitalist the quantity of labour equal to that contained in his commodity plus his profit? For example, the commodity costs the seller 10 shillings. He sells it for 12 shillings. He thus commands labour not to the value of 10s. only, but of 2s. more. But the buyer also sells his commodity, which cost l0s., for 12s. So that each loses as a buyer what he gained as a seller. The only exception is the working class. For since the price of the product is increased beyond its cost, they can only buy back a part of that product, and thus another part of the product, or the price of another part of the product, constitutes profit for the capitalist. But as profit arises precisely from the fact that the workers can only buy back part of the product, the capitalist (the capitalist class) can never realise his profit as a result of demand from the workers, he cannot realise it by exchanging the whole product against the workers wage, but rather by exchanging the whole of the workers wage against only part of the product. Additional demand and additional buyers apart from the workers themselves are therefore necessary, otherwise there could not be any profit. Where do they come from? If they themselves are capitalists, sellers, then the mutual swindling within the capitalist class mentioned earlier occurs, since they mutually raise the nominal prices of their commodities and each gains as a seller what he loses as a buyer. What is required therefore are buyers who are not sellers, so that the capitalist can realise his profit and sell his commodities at their value . Hence the necessity for landlords, pensioners, sinecurists, priests, etc., not to forget their menial servants and retainers. How these purchasers come into possession of their means of purchase ||758| , how they must first take part of the product from the capitalists without giving any equivalent in order to buy back less than an equivalent with the means thus obtained, Mr. Malthus does not explain. At any rate, what follows from this is his plea for the greatest possible increase in the unproductive classes in order that the sellers may find a market, a demand for the goods they supply. And so it turns out further that the author of the pamphlet on population preaches continuous over-consumption and the maximum possible appropriation of the annual product by idlers, as a condition of production. In addition to the plea arising inevitably out of this theory, comes the argument that capital represents the drive for abstract wealth, the drive to expand its value, which can only be put into effect by means of a class of buyers representing the drive to spend, to consume, to squander, namely, the unproductive classes, who are buyers without being sellers. There developed on this basis a fine old row between the Malthusians and the Ricardians in the 20s (from 1820 to 1830 was in general the great metaphysical period in English political economy). Like the Malthusians, the Ricardians deem it necessary that the worker should not himself appropriate his product, but that part of it should go to the capitalist, in order that the worker should have an incentive for production, and that the development of wealth should thus be ensured. But they rage against the view of the Malthusians that landlords, state and church sinecurists and a whole lot of idle retainers must first lay hold without any equivalent of a part of the capitalist s product (just as the capitalist does in respect of the workers) therewith to buy their own goods from the capitalist with a profit for the latter, although this is exactly what the Ricardians affirm with regard to the workers. In order that accumulation may increase and with it the demand for labour, the worker must relinquish as much of his product as possible gratis to the capitalist, so that the latter can transform the net revenue, which has been increased in this way, back again into capital. The same sort [of argument is used by] the Malthusians. As much as possible should be taken away gratis from the industrial capitalists in the form of rent, taxes, etc., to enable them to sell what remains to their involuntary shareholders at a profit. The worker must not be allowed to appropriate his own product, otherwise he would lose the incentive to work, say the Ricardians along with the Malthusians. The industrial capitalist [the Malthusians say] must relinquish a portion of his product to the classes which only consume fruges consumere nati[f] in order that these in turn may exchange it again, on unfavourable terms, with the capitalist. Otherwise the capitalist would lose the incentive for production, which consists precisely in the fact that he makes a big profit, that he sells his goods far above their value. We shall return to this comic struggle later. First of all, some evidence showing that Malthus arrives at a very common conception: (And this, he affirms, is all the labour worked up in the commodity. Profit is a surplus over and above the labour expended in the production of the commodity. In fact, therefore, a nominal surcharge over and above the cost of the commodity.) And in order that there may remain no doubt about his meaning, he quotes Colonel Torrens s On the Production of Wealth (Chap. VI, p. 349) approvingly as confirming his own views: And Mr. Cazenove himself, the publisher of, apologist for and commentator on the Malthusian Definitions, says: <for if commodity exchange between capitalists alone were taken into account, the Malthusian theory, insofar as it does not speak of exchange with workers, who have no other commodity apart from their labour to exchange with the capitalist, would appear nonsensical [since profit would be] merely a reciprocal surcharge, a nominal surcharge on the prices of their commodities. Commodity exchange must therefore be disregarded and people who produce no commodities must exchange money> In order to achieve these wonderful results, Malthus has to make some very great theoretical preparations. First of all, seizing on that side of Adam Smith s theory according to which the value of a commodity is equal to the quantity of labour which it commands, or by which it is commanded, or against which it exchanges, he must cast aside all the objections raised by Adam Smith himself, by his followers and also by Malthus, to the effect that the value of a commodity value [in general] can be the measure of value. The Measure of Value Stated and Illustrated (London, 1823) is a real example of feeble-minded thought, which winds its way in a casuistical and self-stupefying manner through its own inner confusion, and whose difficult, clumsy style leaves the unprejudiced and incompetent reader with the impression that the difficulty of making sense out of the confusion does not lie in the contradiction between confusion and clarity, but in a lack of understanding on the part of the reader. Malthus has first of all to obliterate Ricardo s differentiation between value of labour and quantity of labour and to reduce Smith s juxtaposition of the two to the one false aspect. The purpose of this phrase is to equate the expressions quantity of labour and value of labour . This phrase itself is a mere tautology, an absurd truism. Since wages or that for which it (i.e., a quantity of labour) exchanges constitute the value of this quantity of labour, it is tautologous to say: the value of a certain quantity of labour is equal to the wages or to the amount of money or commodities for which this labour exchanges. In other words, this means nothing more than: the exchange-value of a definite quantity of labour is equal to its exchange-value otherwise called wages. But (apart from the fact that it is not labour, but labour-power, which exchanges directly for wages; it is this confusion that makes the nonsense possible) it by no means follows from this that a definite quantity of labour is equal to the quantity of labour embodied in the wages, or in the money or the goods which represent the wages. If a labourer works for 12 hours and receives the product of 6 hours labour as wages, then the product of the 6 hours constitutes the value of 12 hours labour (because the wages [represent] the exchangeable commodity for [12 hours labour]). It does not follow from this that 6 hours of labour are equal to 12 hours, or that the commodities in which 6 hours of labour are embodied [are] equal to the commodities in which 12 hours of labour are embodied. It does not follow that the value of wages is equal to the value of the product in which the labour is embodied. It follows only that the value of labour (because it is measured by the value of the labour-power, not by the labour carried out), the ||760| value of a given quantity of labour contains less labour than it buys; that, consequently, the value of the commodities in which this purchased labour is embodied, is very different from the value of the commodities with which this given quantity of labour was purchased, or by which it was commanded. Mr. Malthus draws the opposite conclusion. Since the value of a given quantity of labour is equal to its value, it follows, according to him, that the value in which this quantity of labour is embodied is equal to the value of the wages. It follows further from this that the immediate labour (that is, disregarding the means of production) which is absorbed by and contained in a commodity, creates no greater value than that which is paid for it; [that it] only reproduces the value of the wages. The necessary consequence ensuing from this is that profit cannot be explained if the value of commodities is determined by the amount of labour embodied in them, but must rather be explained in some other way; provided the profit a commodity realises is to be included in the value of that commodity. For the labour worked up in a commodity consists 1) of the labour contained in the machinery, etc., used, which consequently reappears in the value of the product; 2) of the labour contained in the raw material used up. The amount of labour contained in these two elements before the new commodity is produced is obviously not increased merely because they become production elements of a new commodity. There remains therefore 3), the labour embodied in the wages which is exchanged for living labour. However, according to Malthus, this latter is not greater than the materialised labour against which it is exchanged. Hence, a commodity contains no portion of unpaid labour but only labour which replaces an equivalent. Hence it follows that if the value of a commodity were determined by the amount of labour embodied in it, it would yield no profit. If it does yield a profit, then this profit is a surplus in the price over and above the labour embodied in the commodity. Therefore, in order to be sold at its value (which includes the profit), a commodity must command a quantity of labour equal to the quantity of labour worked up in itself plus a surplus of labour representing the profit realised in the sale of the commodity. Moreover, in order to make labour, not the quantity of labour required for production, but labour as a commodity, serve as a measure of value, Malthus asserts <There is nothing original in this; it is a mere paraphrase and further elaboration of a passage of Adam Smith s (l. I, ch. V, [Recherches sur la nature et les causes de la richesse des nations,] d. Garnier, t, I, [Paris, 1802,] pp. 65-66). <Further, Malthus s discovery of which he is very proud and which he claims he was the first to make namely, that value is equal to the quantity of labour embodied in a commodity plus a quantity of labour which represents the profit; [this discovery] seems likewise to be quite simply a combination of two sentences from Smith. (Malthus never escapes plagiarism.) ||761| Malthus writes in this context: Bailey ridicules most excellently Malthus s proof that the value of labour is constant (Malthus s further demonstration, not that of Smith; [and] in general the sentence [about] the invariable value of labour): In the same work, Bailey bitingly derides the insipid, impressive-sounding tables with which Malthus illustrates his measure of value. In his Definitions in Political Economy (London, 1827), in which Malthus gives full vent to his annoyance over Bailey s sarcasm, he seeks, amongst other things, to prove the invariable value of labour, as follows: Malthus s proof that a rise in the money price of labour must lead to an all-round rise in the money price of commodities is of just the same quality as his proof of the invariable value of labour: It has to be proved that, when the value of money compared with labour falls, then the value of all commodities compared with money rises, or that the value of money, not estimated in labour, but in the other commodities, falls. And Malthus proves this by presupposing it. Malthus bases his polemic against Ricardo s definition of value entirely on the principles advanced by Ricardo himself, to the effect that variations[m] in the exchangeable values of commodities, independent of the labour worked up in them, are produced by the different composition of capital as resulting from the process of circulation different proportions of circulating and fixed capital, different degrees of durability in the fixed capitals employed, different returns of circulating capitals. In short, on Ricardo s confusing cost-price with value and regarding the equalisation of cost-prices, which are independent of the mass of labour employed in the particular spheres of production, as modifications of value itself, thereby throwing the whole principle overboard. Malthus seizes on these contradictions in the determination of value by labour-time contradictions that were first discovered and emphasised by Ricardo himself not in order to solve them but in order to relapse into quite meaningless conceptions and to pass off the mere formulation of contradictory phenomena, their expression in speech, as their solution. We shall see the same method employed during the decline of the Ricardian school, i.e., by [James] Mill and McCulloch, who, in order to reason the contradictory phenomena out of existence, seek to bring them into direct conformity with the general law by gabble, by scholastic and absurd definitions and distinctions, with the result, by the way, that the foundation itself vanishes. The passages in which Malthus uses the material provided by Ricardo against the law of value, and turns it against him, are the following: Since capital consists of commodities, and a large proportion of the commodities which enter into it or constitute it have a price (or exchange-value in the ordinary sense) which consists neither of accumulated nor of immediate labour, but insofar as we are discussing only this particular commodity of a purely nominal increase in the value caused by the addition of the average profit, Malthus says: In this connection Cazenove adds a note on p. 130: Marvellous explanation. The value of the commodity consists of the labour contained in it plus profit; [i.e.] of the labour contained in it and the labour not contained in it, but which must be paid for. Malthus continues his polemic against Ricardo: Ricardo s proposition, that as the value of wages rises profits proportionably fall, cannot be true, except[n] on the assumption that commodities, which have the same quantity of labour worked up in them, are always of the same value, an assumption which probably will not be found to be true[o] in one case out of five hundred; and from that necessary state of things, which,[p] in the progress of civilisation and improvement, tends continually to increase the quantity of fixed capital employed, and to render more various and unequal the times of the returns of the circulating capital (Definitions etc., pp. 31-32). (The same point is made on pp. 53-54 in Cazenove s edition where Malthus actually says: In accordance with what has been said above, Malthus also declared value to be: Cazenove also emphasises as a difference between Malthus and Ricardo: In other words: the value of a commodity is equal to the sum of money which the purchaser must pay, and this sum is best estimated in terms of the amount of ordinary labour which can be bought with it.* But what determines the sum of money is, naturally, not explained. It is the quite ordinary idea of the matter that is prevalent in everyday life. A mere triviality expressed in high-flown language. In other words, it means nothing more than that cost-price and value are identical, a confusion which, in the case of Adam Smith, and still more in the case of Ricardo, contradicts their real analysis, but which Malthus elevates into a law. It is the conception of value held by the philistine who, being a captive of competition, only knows the outward appearance of value. What then determines the cost-price? The capital outlay plus profit. And what determines profit? Where do the funds for the profit come from, where does the surplus product in which the surplus-value manifests itself come from? If it is simply a matter of a nominal increase of the money price, then nothing is easier than to increase the value of commodities. And what determines the value of the capital outlay? The value of the labour contained in it, says Malthus. And what determines this? The value of the commodities on which the wages are spent. And the value of these commodities? The value of the labour plus profit. And so we keep going round and round in a circle. Granting that the worker is in fact paid the value of his labour, that is, that the commodities (or sum of money) which constitute his wages are equal to the value of the commodities (or sum of money) in which his labour is realised, so that if he receives 100 thaler in wages he also adds only 100 thaler of value to the raw material, etc. in short, to the capital outlay then profit can only arise from a surcharge added by the seller over and above the real value of the commodity. All sellers do this. Thus, insofar as capitalists engage in exchange amongst themselves, nobody gains from this surcharge, and least of all is a surplus fund thus produced from which they can draw their revenue. Only the capitalists whose commodities are consumed by the working class will make a real and not an imaginary profit, by selling commodities back again to the workers at a higher price than they paid the workers for them. The commodities for which they paid the workers 100 thaler will be sold back again to them for 110 thaler. That means that they will only sell 10/11 of the product back to the workers and retain 1/11 for themselves. But what else does that mean but that the worker who, for example, works for 11 hours, gets paid for only 10 hours; that he is given the product of only 10 hours, while the capitalist receives one hour or the product of one hour without giving any equivalent. And what does it mean but that profit as far as the working class is concerned is made by their working for the capitalists for nothing part of the time, that therefore the quantity of labour does not come to the same as the value of labour . The other capitalists however would only he making an imaginary profit, since they would not have this expedient. How little Malthus understood Ricardo s first propositions, how completely he failed to comprehend that a profit is possible in other ways than by means of a surcharge is shown conclusively by the following passage: In the early periods of society, on account of the comparative scarcity of these advances of labour, this remuneration would be high, and would affect the value of such commodities to a considerable degree, owing to the high rate of profits. In the more advanced stages of society, the value of capital and commodities is largely affected by profits, on account of the greatly increased quantity of fixed capital employed, and the greater length of time for which much of the circulating capital is advanced before the capitalist is repaid by the returns. In both cases, the rate at which commodities exchange with each other, is essentially affected by the varying amount of profits (Definitions etc., ed. by Cazenove, p. 60). The concept of relative wages is one of Ricardo s greatest contributions. It consists in this that the value of the wages (and consequently of the profit) depends absolutely on the proportion of that part of the working-day during which the worker works for himself (producing or reproducing his wage) to that part of his time which belongs to the capitalist. This is important economically, in fact it is only another way of expressing the real theory of surplus-value. It is important further in regard to the social relationship between the two ||764| classes. Malthus smells a rat and is therefore constrained to protest. (Ricardo speaks of the value of wages, which is indeed also presented as the part of the product accruing to the worker.) Profits, indeed, imply proportions; and the rate of profits has always justly been estimated by a percentage upon the value of the advances. <What Malthus understands by value of advances is very hard, and for him even impossible, to say. According to him, the value of a commodity is equal to the advances contained in it plus profit. Since the advances, apart from the immediate labour, also consist of commodities, the value of the advances is equal to the advances in them plus profit. Profit thus equals profit upon the advances plus profit. And so on, ad infinitum.> Since the production of exchange-value the increase of exchange-value is the immediate aim of capitalist production, it is important [to know] how to measure it. Since the value of the capital advanced is expressed in money (real money or money of account), the rate of increase is measured by the amount of capital itself, and a capital (a sum of money) of a certain size 100 is taken as a standard. The following is a good definition of the productive labourer. In addition the following passage should be noted. This from the preacher of checks against over-population. Most important for the exponent of the over-population theory, however, is this passage: ||765| Cazenove rightly remarks: In speaking of the labour worked up in commodities the labour worked up in the capital necessary to their production were[w] designated by the term accumulated labour, as contra-distinguished from the immediate labour employed by the last capitalist (op. cit., pp. 28-29). It is indeed very important to make this distinction. In Malthus, however, it leads to nothing. He does make an attempt to reduce the surplus-value or at least its rate (which, by the way, he always confuses with profit and rate of profit) to its relation to variable capital, that part of capital which is expended on immediate labour. This attempt, however, is childish and could not be otherwise in view of his conception of value. In his Principles of Political Economy [second ed,], he says: Here Malthus lapses into Lord Dundrearyism. What he wants to do (he has an inkling that surplus-value, hence profit, has a definite relation to variable capital, the portion of capital expended on wages) is to show that profits are determined by the proportion of the value of the whole produce which is required to pay the labour employed [loc. cit., p. 267]. He begins correctly insofar as he assumes that the whole of the capital consists of variable capital, capital expended on wages. In this case, profit and surplus-value are in fact identical. But even in this case he confines himself to a very silly reflection. If the capital expended equals 100 and the profit is 10 per cent, the value of the product is, accordingly, 110 and the profit is 1/10 of the capital expended (hence 10 per cent if calculated on the capital), and 1/11 of the value of the total product, in the value of which its own value is included. Thus profit constitutes 1/11 of the value of the total product and the capital expended forms 10/11 of this value. In relation to the total, 10 per cent profit can be so expressed that the part of the value of the total product which is not made up of profit amounts to 10/11 of the total product; or, a product of 110 which includes 10 per cent profit consists of 10/11 outlay, on which the profit is made. This brilliant mathematical effort amuses him so much that he repeats the same calculation using a profit of 20 per cent, 30 per cent, etc. But so far we have merely a tautology. The profit is a percentage on the capital expended, the value of the total Product includes the value of the profit and the capital expended ||766| is the value of the total product minus the value of the profit. Thus 110-10=100. And 100 is 10/11 of 110. But let us proceed. Let us assume a capital consisting not merely of variable but also of constant capital. the capitalist expects an equal profit upon all the parts of the capital which he advances. This however contradicts the proposition advanced above that profit (it should be called surplus-value) is determined by the proportion of the capital expended on wages. But never mind. Malthus is not the man to contradict either the expectations or the notions of the capitalists . But now comes his tour de force. Assume a capital of 2,000, three-quarters of which, or 1,500, is constant capital, one-quarter, or 500, is variable capital. The profit amounts to 20 per cent. Thus the profit equals 400 and the value of the product is 2,000 plus 400 = 2,400. But what about Mr. Malthus s calculation? If one takes a quarter of the total product, it amounts to 600; a quarter of the capital expended is equal to 500, which is equal to the portion expended on wages; and 100, a quarter of the profit, which equals that part of the profit falling to this amount of wages. And this is supposed to prove that the profits of the capitalist will vary with the varying value of this one-fourth of the[ff] produce compared with the quantity of labour employed . It proves nothing more than that a profit of a given percentage, e.g. of 20 per cent, on a given capital say of 4,000 yields a profit of 20 per cent on each aliquot part of the capital, that is a tautology, But it proves absolutely nothing about a definite, special, distinguishing relationship of this profit to the part of the capital expended on wages. If, instead of [1/4] taken by Mr. Malthus, I take 1/24 of the total product, i.e., 100 (out of 2,400), then this 100 contains 20 per cent profit, or 1/6 of it is profit. The capital would be 83 1/3 and the profit [ 1 16 2/3. If the 83 1/3 were equal, for instance, to a horse which was employed in production, then it could be demonstrated according to Malthus s recipe that the profit would vary with the varying value of the horse or the 28 4/5 part of the total product. Such are the wretched things Mr. Malthus comes out with when he stands on his own feet and cannot plagiarise Townsend, Anderson or anyone else. What is really remarkable and pertinent (apart from what is characteristic of the man) is the inkling that surplus-value must be calculated on the part of capital expended on wages. <Given a definite rate of profit, the gross profit, the amount of profit, always depends on the size of the capital advanced. Accumulation, however, is then determined by the part of this amount which is reconverted into capital. But this part, since it is equal to the gross profit minus the revenue consumed by the capitalist, will depend not only on the value of the total profit, but on the cheapness of the commodities which the capitalist can buy with it; partly on the cheapness of the commodities which he consumes and which he pays for out of his revenue, partly on the cheapness of the commodities which enter into his constant capital. Wages here are assumed as given since the rate of profit is likewise assumed as given.> The value of labour is supposed not to vary (derived from Adam Smith) but only the value of the commodities I acquire for it. Wages are, say, two shillings a day in one case, one shilling in another. In the first case, the capitalist pays out twice as many shillings for the same labour-time as in the second. But in the second case, the worker performs twice as much labour for the same product as in the first, since in the second case he works a whole day for one shilling and in the first case only half a day. Mr. Malthus believes that the capitalist pays sometimes more shillings, sometimes less, for the same labour. He does not see that the worker, correspondingly, performs either less or more labour for a given amount of produce. It is stated very correctly in the same work (Observations on Certain Verbal Disputes etc.) that labour as a measure of value, in the sense in which Malthus borrows it from Adam Smith, would be just as good a measure of value as any other commodity and that it would not be so good a measure as money in fact is. Here it would be in general a question only of a measure of value in the sense in which money is a measure of value. ||767| In general, it is never the measure of value (in the sense of money) which makes commodities commensurable (see Part I of my book, p. 45). Commodities as values constitute one substance, they are mere representations of the same substance social labour. The measure of value (money) presupposes them as values and refers solely to the expression and size of this value. The measure of value of commodities always refers to the transformation of value into price and already presumes the value. The passage in the Observations alluded to reads as follows: Mr. Malthus says: In the same place, and at the same time, the different quantities of day-labour, which different commodities can command, will be exactly in proportion to their relative values in exchange , and vice versa. If this is true of labour, it is just as true of anything else (op. cit., p. 49). Money does very well as a measure at the same time and place But it (Malthus s proposition) seems not to be true of labour. Labour is not a measure even at the same time and place. Take a portion of corn, such as is at the same time and place said to be of equal value with a given diamond; will the corn and the diamond, paid in specie, command equal portions of labour? It may be said No; but the diamond will buy money, which will command an equal portion of labour the test is of no use, for it cannot be applied without being rectified by the application of the other test, which it professed to supersede. We can only infer, that the corn and the diamond will command equal quantities of labour, because they are of equal value, in money. But we were told to infer that two things were of equal value, because they would command equal quantities of labour (loc. cit., pp. 49-50). Malthus s theory of value gives rise to the whole doctrine of the necessity for continually rising unproductive consumption which this exponent of over-population (because of shortage of food) preaches so energetically. The value of a commodity is equal to the value of the materials, machinery, etc., advanced plus the quantity of direct labour which the commodity contains; this, according to Malthus, is equal to the value of the wages contained in the commodity, plus a profit increment on these advances according to the general rate of profit. This nominal price increment represents the profit and is a condition of supply, and therefore of the reproduction of the commodity. These elements constitute the price for the purchaser as distinct from the price for the producer, and the price for the purchaser is the real value of the commodity. The question now arises how is this price to be realised? Who is to pay it? And from what funds is it to be paid? In dealing with Malthus we must make a distinction (which he has neglected to make). One section of capitalists produce goods which are directly consumed by the workers; another section produce either goods which are only indirectly consumed by them, insofar, for example, as they are part of the capital required for the production of necessaries, as raw materials, machinery, etc., or commodities which are not consumed by the workers at all, entering only into the revenue of the non-workers. Let us first of all consider the capitalists who produce the articles which are consumed by the workers. These capitalists are not only buyers of labour, but also sellers of their own products to the workers. If the quantity of labour contributed by the worker is valued at 100 thaler the capitalist pays him 100 thaler. And this [according to Malthus] is the only value added to the raw material, etc., by the labour which the capitalist has bought. Thus the worker receives the value of his labour and only gives the capitalist an equivalent of that value in return. But although the worker nominally receives the value, he actually receives a smaller quantity of commodities than he has produced. In fact, he receives back only a part of his labour materialised in the product. Let us assume for the sake of simplicity as Malthus does quite frequently that capital consists only of capital laid out in wages. If 100 thaler are advanced to the worker in order to produce commodities, and these 100 thaler are the value of the labour purchased and the sole value which it adds to the product then the capitalist sells these commodities for 110 thaler, and the worker, with his 100 thaler, can buy back only 10/11 of the product; 1/11 remains in the hands of the capitalist, to the value of 10 thaler, or the amount of surplus product in which this surplus-value of 10 thaler is embodied. If the capitalist sells the product for 120, then the worker receives only 10/12 of the product and the capitalist 2/12 of the product and its value. If he sells it for 130 (30 per cent), then the worker [receives] only 10/13 and the capitalist 3/13 of the product. If he sells it at 50 per cent profit, i.e., for 150, the worker receives 2/3 and the ||768| capitalist 1/3 of the product. The higher the price at which the capitalist sells, the lower the share of the worker, and the higher his own share in the value of the product and therefore also in the quantity of the product. And the less the worker can buy back of the value or of the product with the value of his labour. It makes no difference to the situation if, in addition to variable capital, constant capital is also advanced, for example, if, in addition to the 100 thaler wages, there is another 100 for raw materials, etc. In this case, if the rate of profit is 10, then the capitalist sells the goods for 220 instead of for 210 (namely, 100 constant capital and 120 the product of [direct] labour). <Sismondi s Nouveaux Principes etc. first published in 1819.> Here, as regards the class of capitalists A, who produce articles which are directly consumed by the workers necessaries, we have a case where as a result of the nominal surcharge the normal profit increment added to the price of the advances a surplus fund is in fact created for the capitalist, since, in this roundabout way, he gives back to the worker only a part of his product while appropriating a part for himself. But this result follows not because he sells the entire product to the worker at the increased value, but precisely because the increase in the value of the product makes the worker unable to buy back the whole product with his wages, and allows him to buy back only part of it. Consequently, it is clear that demand by the workers can never suffice for the realisation of the surplus of the purchase price over and above the cost-price, i.e., the realisation of the profit and the value of the commodity. On the contrary, a profit fund only exists because the worker is unable to buy back his whole product with his wages, and his demand, therefore, does not correspond to the supply. Thus capitalist A has in hand a certain quantity of products of a certain value, 20 thaler in the present case, which he does not require for the replacement of the capital, and which he can now partly spend as revenue, and partly use for accumulation. N.B. The extent to which he has such a fund in hand depends on the value of the surcharge he adds over and above the cost-price and which determines the proportions in which he and the worker share the total product. Let us now turn to the class of capitalists B, who supply raw materials, machinery, etc., in short constant capital, to class A. The capitalists of class B can sell only to class A, for they cannot sell their products back to the workers who have nothing to do with capital (raw material, machinery, etc.), or to the capitalists who produce luxury goods (all goods which are not necessaries and which are not commonly used by the labouring class), or to the capitalists who produce the constant capital required for the production of luxury goods. Now we have seen that, in the capital advanced by A, 100 is included as constant capital. If the rate of profit is 10 per cent, the manufacturer of this constant capital has produced it at a cost-price of 90 10/11, but sells it for 100 (90 10/11 : 9 1/11 = 100:10). Thus he makes his profit by imposing a surcharge on class A. And thereby he receives from their product of 220, his 100 instead of only 90 10/11, with which, we will assume, he buys immediate labour. B does not by any means make his profit from his workers whose product, valued at 90 10/11, he cannot sell back to them for 100, because they do not buy his goods at all. Nevertheless, they are in the same position as the workers of A. For 90 10/11 they receive a quantity of goods which has only nominally a value of 90 10/11, for every part of A s product is made uniformly dearer, or each part of its value represents a smaller part of the product because of the profit surcharge. (This surcharging can only be carried out up to a certain point, for the worker must receive enough goods to be able to live and to reproduce his labour-power. If capitalist A were to add a surcharge of 100 per cent and to sell commodities which cost 200 for 400, the worker would be able to buy back only a quarter of the product (if he receives 100). And if he needed half of the product in order to live, the capitalist would have to pay him 200. Thus he would retain only 100 (100 go to constant capital and 200 to wages). It would therefore be the same as if he sold the commodity for 300, etc.) B makes his profit fund not (directly) through his workers, but through his sales to A. A s product not only serves to realise his profit, but constitutes his own profit fund. It is clear that A cannot realise the profit he makes on his workers by selling to B, and that B cannot provide sufficient demand for his product (enabling him to sell it at its value) any more than his own workers can. On the contrary, a retroaction takes place here. ||769| The more he raises the profit surcharge, the greater, in relation to his workers, is the portion of the total product which he appropriates and of which he deprives B. Capitalist B adds a surcharge of the same size as A. B pays his workers 90 10/11 thaler as he did before, although they get less goods for this sum. But if A takes 20 per cent instead of 10 per cent, he [B] likewise takes 20 per cent instead of 10 per cent and sells for 109 1/11 instead of 100. As a result, this part of the outlay increases for A. A and B may even be considered as a single class. (B belongs to A s expenditure and the more A has to pay to B from the total product, the less remains for him.) Out of the capital of 290 10/1l, B owns 90 10/11 and A 200. Between them they expend 290 10/11 and make a profit of 29 1/11. B can never buy back from A to the tune of more than 100 and this includes his profit of 9 1/11. As stated, both of them together have a revenue of 29 1/11. As far as classes C and D are concerned, C being the capitalists who produce the constant capital necessary for the production of luxuries, and D being those who directly produce the luxuries, in the first place it is clear that the immediate demand for C is only formed by D. D is the purchaser of C. And C can only realise profit if he sells his goods to D too dearly by means of a nominal surcharge over and above the cost-price. D must pay C more than is necessary for C to replace all the constituent parts [of the cost-price] of his commodities. D for his part makes a profit surcharge partly on the advances made by C and partly on the capital expended directly on wages by D. From the profits which C makes out of D, he can buy some of the commodities made by D, although he cannot expend all his profit in this way, for he also needs necessaries for himself, and not only for workers for whom he exchanges the capital realised from D. In the first place, the realisation of the commodities by C depends directly on their sale to D; secondly, after that sale is effected, the value of the commodities sold by D cannot be realised as a result of the demand arising from C s profit, any more than the total value of A s commodities can be realised as a result of the demand coming from B. For the profit made by C is made out of D, and if C spends it again on commodities made by D instead of on others, his demand can still never be greater than the profit he makes out of D. It must always be much smaller than D s capital, than his total demand, and it never constitutes a source of profit for D (the most he can do is a little swindling of C by means of the surcharge on the goods he sells back to him) for C s profit comes straight out of D s pocket. Further it is clear that, insofar as the capitalists whether of class C or of D mutually sell each other goods within each class, nobody gains anything or realises a profit thereby. A certain capitalist, M, sells to N for 110 thaler goods which cost only 100, but N does the same to M. After the exchange as before, each of them owns a quantity of goods the cost-price of which is 100. For 110 thaler each receives goods which cost only 100. The surcharge gives him no greater command over the goods of the other seller than it gives the other over his. And as far as value is concerned, it would be the same as if every M and N were to give himself the pleasure of baptising his commodities 110 instead of 100 without exchanging them at all. It is clear further that [according to Malthus] the nominal surplus-value in D (for C is included in it) does not constitute real surplus product. The fact that the worker receives less necessaries for 100 thaler because of the surcharge imposed by A can, at first, be a matter of indifference to D. He has to expend 100 as he did before in order to employ a certain number of workers. He pays the workers the value of their labour and they add nothing more to the product, they only give him an equivalent. He can obtain a surplus over and above this equivalent only by selling to a third person and by selling his commodity above the cost-price. In reality, the product of a mirror manufacturer [D] contains both surplus-value and surplus product just as that of the farmer. For his product contains unpaid labour (surplus-value) and this unpaid labour is embodied in the product just as much as is the paid labour. It is embodied in surplus product. One part of the mirrors costs him nothing although it has value, because labour is embodied in it in exactly the same way as in that part of the mirrors which replaces the capital advanced. This surplus-value exists as surplus product before the sale of the mirrors and is not [brought into being] only through this sale. If, on the contrary, the worker by his immediate labour had only provided an equivalent for the accumulated labour which he received in the form of wages, then neither ||770| the surplus product nor the surplus-value corresponding to it would exist. But according to Malthus, who declares that the worker only gives back an equivalent, things are different. It is clear that class D (including C) cannot artificially create for itself a surplus fund in the same way as class A, namely, [by ] selling their commodities back to the workers at a higher price than the workers were paid for producing them, thus appropriating part of the total product after replacing the capital expended. For the workers are not buyers of the goods made by D. No more can the surplus fund of this class [arise] from the sale of commodities or their mutual exchanges among the different capitalists of this class. It can be achieved only by the sale of their product to class A and to class B. [Because] the capitalists of class D sell commodities worth 100 thaler for 110, capitalist A can buy only 10/11 of their product for 100 thaler and they retain 1/11 of their output, which they can either consume themselves or exchange for commodities produced by other members of their own class D. [According to Malthus] things happen in the following way to all capitalists who do not themselves directly produce necessaries and therefore do not sell back to the workers the major, or at least a significant, portion of their products. Let us say that their constant capital is 100. If the capitalist pays another 100 in wages, he is paying the workers the value of their labour. To this 100 the workers add a value of 100, and the total value (the cost-price) of the product is therefore 200. Where then does the profit come from? If the average rate of profit is 10 per cent, then the capitalist sells goods worth 200 for 220. If he really sells them for 220, then it is clear that 200 is sufficient for their reproduction 100 for raw materials, etc., 100 for wages, and he pockets 20, which he can dispose of as revenue or use to accumulate capital. But to whom does he sell the commodities at 10 per cent above their production value , which, according to Malthus, is different from the market value or real value, so that profit, in fact, is equal to the difference between production value and sale value, equal to sale value minus production value? These capitalists cannot realise any profit through exchange or sale amongst themselves. If A sells B for 220 commodities worth 200, then B plays the same trick on A. The fact that these goods change hands does not alter either their value or their quantity. The quantity of goods which belonged formerly to A is now in the possession of B, and vice versa. The fact that what was previously 100 is now called 110, makes no difference. The purchasing power either of A or of B has in no way altered. But, according to the hypothesis, these capitalists cannot sell their goods to the workers. They must, therefore, sell them to the capitalists who produce necessaries. These, indeed, have a real surplus fund at their disposal resulting from their exchange with the workers. The creation of a nominal surplus-value has, in fact, placed surplus product in their possession. And this is the only surplus fund which has existed up to now. The other capitalists can only acquire a surplus fund by selling their goods above their production value to those capitalists who possess a surplus fund. As for the capitalists who produce the constant capital required for the production of necessaries, we have already seen that the producer of necessaries must perforce buy from them. These purchases enter into his production costs. The higher his profit, the dearer are the advances to which the same rate of profit is added. If he sells at 20 per cent instead of at 10 per cent, then the producer of his constant capital likewise adds 20 per cent instead of 10 per cent. And instead of demanding 100 for 90 10/11, he demands 109 1/11 or, in round figures, 110, so that the value of the product is now 210, 20 per cent of which is 42, so that the value of the whole product is 252. Out of this the worker receives 100. The capitalist now receives more than 1/11 of the total product as profit, whereas previously he received only 1/11 when he sold the product for 220. The total amount of the product has remained the same, but the portion at the disposal of the capitalist has increased both in value and in quantity. As for those capitalists who produce neither necessaries nor the capital required for their production, their profit [can] only be made by sales to the first two classes of capitalists. If the latter take 20 per cent, then the other capitalists will take [the same]. [Exchange by] the first class of capitalists and exchange between the two classes of capitalists are, however, two very different things. [As a result of exchange] with the workers, the first class has established a real surplus fund of necessaries (surplus product) which [as an increment] of capital is in their hands to dispose of, so that they can accumulate part of it and [spend] part of it [as revenue] either on necessaries or on luxuries. Surplus-value here, in fact, [represents] ||XIV-771| surplus labour and surplus product, although this is achieved [according to Malthus] by the clumsy, roundabout method of a surcharge on prices. Let us assume that the value of the product of the workers producing necessaries is, in fact, only equal to 100. Since, however, 10/11 of this is sufficient to pay the wages, it follows that the capitalist only needs to spend 90 10/11, upon which he makes a profit of 9 1/11. But if he pays the workers 100 thaler and sells them the product for 110, under the illusion that value of labour and quantity of labour are identical, he still retains 1/11 of the product as he did previously. The fact that this is now worth 10 thaler instead of 9 1/11 represents no gain for him, for he has now advanced 100 thaler as capital, not 90 10/11. But as far as the other classes of capitalists are concerned, they have no real surplus product, nothing in which surplus labour-time is embodied. They sell the product of labour worth 100 for 110 and merely by the addition of a surcharge this capital is supposed to be transformed into capital plus revenue. But how stands the case now, as Lord Dundreary would say, between these two classes of capitalists? The producers of necessaries sell surplus product valued at 100 for 110 (because they paid 100 in wages instead of 90 10/11). But they are the only ones who have surplus product in their possession. If the other capitalists likewise sell them products valued at 100 for 110, then they do in fact replace their capital and make a profit. Why? Because necessaries to the value of 100 suffice for them to pay their workers, they can therefore keep 10 for themselves. Or rather because they in fact receive necessaries to the value of 100, but 10/11 of this is sufficient to pay their workers, since they are in the same position as capitalists in classes A and B. These, on the other hand, receive in return only an amount of produce representing a value of 100. The fact that its nominal cost is 110 is of no significance to them, for it neither embodies a greater amount quantitatively, as use-value, than was produced by the labour-time the 100 thaler contain, nor can it add 10 [thaler] to a capital of 100. This would be only possible if the commodities were resold. Although the capitalists of both classes sell to one another for 110 commodities worth 100, only in the hands of the second class has 100 really the significance of 110. In actual fact, the capitalists of the first class only receive the value of 100 for 110. And they only sell their surplus product for a higher price because for the articles on which they spend their revenue they have to pay more than they are worth. In fact, however, the surplus-value realised by the capitalists of the second class is limited only to a share in the surplus product realised by the first class, for they themselves do not create any surplus product. In connection with this increased cost of luxuries, it occurs just in time to Malthus that accumulation and not expenditure is the immediate object of capitalist production. As a result of this unprofitable trade, in the course of which the capitalists of class A lose a portion of the fruits wrung out of the workers , they are compelled to moderate their demand for luxuries. But if they do so, and increase their accumulation, then effective demand falls, the market for the necessaries they produce shrinks, and this market cannot expand to its full extent on the basis of the demand on the part of the workers and the producers of constant capital. This leads to a fall in the price of necessaries, but it is only through a rise of these prices, through the nominal surcharge on them and in proportion to this surcharge that the capitalists of class A are able to extract surplus product from the workers. If the price were to fall from 120 to 110, then their surplus product (and their surplus-value) would fall from 2/12 to 1/11, and consequently the market, the demand for the commodities offered by the producers of luxuries, would decline as well, and by a still greater proportion. In the course of exchange with the second class, the first class sells real surplus product after having replaced its capital. The second class, on the other hand, merely sells its capital in order to turn its capital into capital plus revenue by this trade. The whole of production is thus only kept going (and this is especially the case with regard to its expansion) by means of increasing the prices of necessaries; to this, however, would correspond a price for luxuries in inverse proportion to the amount of luxuries actually produced. Class II, which sells for 110 goods of the value of 100, likewise does not gain by this exchange. For in actual fact, the 110 which it gets back is also only worth 100. But this 100 (in necessaries) replaces capital plus profit, while the other 100 [in luxuries] is merely called 110. Thus [it would] amount to class I receiving luxuries to the value of 100. It buys for 110 luxuries to the value of 100. For the other class, however, 110 is worth 110, because it pays 100 for the labour (thus replacing its capital) and therefore retains a surplus of 10. ||772| It is difficult to understand how any profit at all can be derived if those who engage in mutual exchange sell their commodities by overcharging one another at the same rate and cheating one another in the same proportion. This incongruity would be remedied if, in addition to exchange by one class of capitalists with its workers and the mutual exchange between the capitalists of the different classes, there also existed a third class of purchasers a deus ex machina a class which paid the nominal value of commodities without itself selling any commodities, without itself playing the same trick in return; that is a class which transacted one phase only: M C, but not M C M; [a class] which bought not in order to get its capital back plus a profit, but in order to consume the commodities: a class which bought without selling. In this case the capitalists would realise a profit not by exchange amongst themselves but 1) by exchange between them and the workers, by selling back to them a portion of the total product for the same amount of money as they paid the workers for the total product (after deducting the constant capital) and 2) from the portion of luxuries as well as necessaries sold to the third sort of purchaser. Since these pay 110 for 100 without selling 100 for 110 in their turn, a profit of 10 per cent would be made in actual fact and not simply nominally. The profit would be made in dual fashion by selling as little as possible of the total product back to the workers and as much as possible to the third class, who pay ready money, who, without themselves selling, buy in order to consume. But buyers who are not at the same time sellers, must be consumers who are not at the same time producers, that is unproductive consumers, and it is this class of unproductive consumers which, according to Malthus, solves the problem. But these unproductive consumers must, at the same time, be consumers able to pay, constituting real demand, and the money they possess and spend annually must, moreover, suffice to pay not only the production value of the commodities they buy and consume, but also the nominal profit surcharge, the surplus-value, the difference between the market value and the production value. This class will represent consumption for consumption s sake in society, in the same way as the capitalist class represents production for production s sake, the one representing the passion for expenditure , the other the passion for accumulation (see Principles of Political Economy, [second ed.,] p. 326). The urge for accumulation is kept alive in the capitalist class by the fact that their returns are constantly larger than their outlays, and profit is indeed the stimulus to accumulation. In spite of this enthusiasm for accumulation, they are not driven to over-production, or at least, not at all easily, since the unproductive consumers not only constitute a gigantic outlet for the products thrown on to the market, but do not themselves throw any commodities on to the market, and therefore, no matter how numerous they may be, they constitute no competition for the capitalists, but, on the contrary, all represent demand without supply and thus help to make up for the preponderance of supply over demand on the part of the capitalists. But where do the annual financial resources of this class come from? There are, in the first place, the landed proprietors, who collect a great part of the value of the annual product under the title of rent and spend the money thus taken from the capitalists in consuming the goods produced by the capitalists, in the purchase of which they are cheated. These landed proprietors do not have to engage in production and do not on the average do so. It is significant, that insofar as they spend money on labour, they do not employ productive workers but menial servants, mere fellow-consumers of their fortune, who help to keep the prices of necessaries up, since they buy without helping to increase their supply or the supply of any other kind of commodity. But these landed proprietors do not suffice to create an adequate demand . Artificial means must be resorted to. These consist of heavy taxation, of a mass of sinecurists in State and Church, of large armies, pensions, tithes for the priests, an impressive national debt, and from time to time, expensive wars. These are the remedies (Principles of Political Economy, [second ed.,] p. 408 et seq.). The third class, proposed by Malthus as a remedy , the class which buys without selling and consumes without producing, thus receives first of all an important part of the value of the annual product without paying for it and enriches the producers by the fact that the latter must first of all advance the third class money gratis for the purchase of their commodities, in order to draw it back again ||773| by selling the third class commodities above their value, or by receiving more value in money than is embodied in the commodities they supply to this class. And this transaction is repeated every year. Malthus correctly draws the conclusions from his basic theory of value. But this theory, for its part, suits his purpose remarkably well an apologia for the existing state of affairs in England, for landlordism, State and Church , pensioners, tax-gatherers, tenths, national debt, stock-jobbers, beadles, parsons and menial servants ( national expenditure ) assailed by the Ricardians as so many useless and superannuated drawbacks of bourgeois production and as nuisances. For all that, Ricardo championed bourgeois production insofar as it [signified] the most unrestricted development of the social productive forces, unconcerned for the fate of those who participate in production, be they capitalists or workers. He insisted upon the historical justification and necessity of this stage of development. His very lack of a historical sense of the past meant that he regarded everything from the historical standpoint of his time. Malthus also wishes to see the freest possible development of capitalist production, however only insofar as the condition of this development is the poverty of its main basis, the working classes, but at the same time he wants it to adapt itself to the consumption needs of the aristocracy and its branches in State and Church, to serve as the material basis for the antiquated claims of the representatives of interests inherited from feudalism and the absolute monarchy. Malthus wants bourgeois production as long as it is not revolutionary, constitutes no historical factor of development but merely creates a broader and more comfortable material basis for the old society. On the one hand, therefore, [there is] the working class, which, according to the population principle, is always redundant in relation to the means of life available to it, over-population arising from under-production; then [there is ] the capitalist class, which, as a result of this population principle, is always able to sell the workers own product back to them at such prices that they can only obtain enough to keep body and soul together; then [there is ] an enormous section of society consisting of parasites and gluttonous drones, some of them masters and some servants, who appropriate, partly under the title of rent and partly under political titles, a considerable mass of wealth gratis from the capitalists, whose commodities they pay for above their value with money extracted from these same capitalists; the capitalist class, driven into production by the urge for accumulation, the economically unproductive sections representing prodigality, the mere urge for consumption. This is moreover [advanced as] the only way to avoid over-production, which exists alongside over-population in relation to production. The best remedy for both [is declared to be] over-consumption by the classes standing outside production. The disproportion between the labouring population and production is eliminated by part of the product being devoured by non-producers and idlers. The disproportion arising from over-production by the capitalists [is eliminated] by means of over-consumption by the owners of wealth. We have seen how childishly weak, trivial and meaningless Malthus is when, basing himself on the weak side of Adam Smith, he seeks to construct a counter-theory to Ricardo s theory, which is based on Adam Smith s stronger sides. One can hardly find a more comical exertion of impotence than Malthus s book on value. However, as soon as he comes to practical conclusions and thereby once again enters the field which he occupies as a kind of economic Abraham a Santa Clara, he is quite at his ease. For all that, he does not abandon his innate plagiarism even here. Who at first glance would believe that Malthus s Principles of Political Economy is simply the Malthusianised translation of Sismondi s Nouveaux Principes d conomie politique? But this is the case. Sismondi s book appeared in 1819. A year later, Malthus s English caricature of it saw the light of day. Once again, with Sismondi, as previously with Townsend and Anderson, he found a theoretical basis for one of his stout economic pamphlets, in the production of which, incidentally, he also turned to advantage the new theories learned from Ricardo. ||774| While Malthus assailed in Ricardo that tendency of capitalist production which is revolutionary in relation to the old society, he took, with unerring parsonical instinct, only that out of Sismondi which is reactionary in relation to capitalist production and modern bourgeois society. I exclude Sismondi from my historical survey here because a critique of his views belongs to a part of my work dealing with the real movement of capital (competition and credit) which I can only tackle after I have finished this book. Malthus s adaptation of Sismondi s views can easily be seen from the heading of one of the chapters in the Principles of Political Economy: [In this chapter it is stated:] Furthermore, written in the same Sismondian manner and directed against Ricardo: This is aimed especially against Ricardo: Chapter XX, Value and Riches, Their Distinctive Properties [On the Principles of Political Economy, and Taxation, third ed., London, 1821, p. 320]. There Ricardo says, among other things: <Value, incidentally, can also increase with the facility of production . Let us suppose that the number of men in a country rises from one million to six million. The million men worked 12 hours. The six million have so developed the productive powers that each of them produces as much again in 6 hours. In these circumstances, according to Ricardo s own views, wealth would have been increased sixfold and value threefold.> In other words, Ricardo says here: wealth consists of use-values only. He transforms bourgeois production into mere production of use-value, a very pretty view of a mode of production which is dominated by exchange-value. He regards the specific form of bourgeois wealth as something merely formal which does not affect its content. He therefore also denies the contradictions of bourgeois production which break out in crises. Hence his quite false conception of money. Hence, in considering the production process of capital, he ignores completely the circulation process, insofar as it includes the metamorphosis of commodities, the necessity of the transformation of capital into money. At any rate nobody has better and more precisely than Ricardo elaborated the point that bourgeois production is not production of wealth for the producers (as he repeatedly calls the workers) and that therefore the production of bourgeois wealth is something quite different from the production of abundance , of necessaries and luxuries for the men who produce them, as this would have to be the case if production were only a means for satisfying the needs of the producers through production dominated by use-value alone. Nevertheless, the same Ricardo says: ||775| Ricardo regards bourgeois, or more precisely, capitalist production as the absolute form of production, whose specific forms of production relations can therefore never enter into contradiction with, or enfetter, the aim of production abundance which includes both mass and variety of use-values, and which in turn implies a profuse development of man as producer, an all-round development of his productive capacities. And this is where he lands in an amusing contradiction: when we are speaking of value and riches, we should have only society as a whole in mind. But when we speak of capital and labour, then it is self-evident that gross revenue only exists in order to create net revenue . In actual fact, what he admires most about bourgeois production is that its definite forms compared with previous forms of production provide scope for the boundless development of the productive forces. When they cease to do this, or when contradictions appear within which they do this, he denies the contradictions, or rather, expresses the contradiction in another form by representing wealth as such the mass of use-values in itself without regard to the producers, as the ultima Thule. Sismondi is profoundly conscious of the contradictions in capitalist production; he is aware that, on the one hand, its forms its production relations stimulate unrestrained development of the productive forces and of wealth; and that, on the other hand, these relations are conditional, that their contradictions of use-value and exchange-value, commodity and money, purchase and sale, production and consumption, capital and wage-labour, etc., assume ever greater dimensions as productive power develops. He is particularly aware of the fundamental contradiction: on the one hand, unrestricted development of the productive forces and increase of wealth which, at the same time, consists of commodities and must be turned into cash; on the other hand, the system is based on the fact that the mass of producers is restricted to the necessaries. Hence, according to Sismondi, crises are not accidental, as Ricardo maintains, but essential outbreaks occurring on a large scale and at definite periods of the immanent contradictions. He wavers constantly: should the State curb the productive forces to make them adequate to the production relations, or should the production relations be made adequate to the productive forces? He often retreats into the past, becomes a laudator temporis acti,[gg] or he seeks to exorcise the contradictions by a different adjustment of revenue in relation to capital, or of distribution in relation to production, not realising that the relations of distribution are only the relations of production seen from a different aspect. He forcefully criticises the contradictions of bourgeois production but does not understand them, and consequently does not understand the process whereby they can be resolved. However, at the bottom of his argument is indeed the inkling that new forms of the appropriation of wealth must correspond to productive forces and the material and social conditions for the production of wealth which have developed within capitalist society; that the bourgeois forms are only transitory and contradictory forms, in which wealth attains only an antithetical existence and appears everywhere simultaneously as its opposite. It is wealth which always has poverty as its prerequisite and only develops by developing poverty as well. We have now seen how nicely Malthus appropriates Sismondi. Malthus s theory is expressed in an exaggerated and even more nauseating form in On Political Economy in connexion with the Moral State and Moral Prospects of Society, second ed., London, 1832, by Thomas Chalmers (Professor of Divinity). Here the parsonic element is more in evidence not only theoretically but also practically, since this member of the Established Church defends it economically with its loaves and fishes and the whole complex of institutions with which this Church stands or falls. The passages in Malthus (referred to above) having reference to the workers are the following: Malthus is interested not in concealing the contradictions of bourgeois production, but on the contrary, in emphasising them, on the one hand, in order to prove that the poverty of the working classes is necessary (as it is, indeed, for this mode of production) and, on the other hand, to demonstrate to the capitalists the necessity for a well-fed Church and State hierarchy in order to create an adequate demand for the commodities they produce. He thus shows that for continued increase[ii] of wealth [op. cit., p. 314] neither increase of population nor accumulation of capital suffices (op. cit., pp. 319-20), nor fertility of the soil (op. cit., p. 331), nor labour-saving inventions , nor the extension of the foreign markets (op. cit., pp. 352 and 359). Thus he emphasises the possibility of general over-production in opposition to the view of the Ricardians (inter alia op. cit., p. 326). The principal propositions dealing with this matter are the following: Commodities are exchanged not only for commodities but also for productive labour and personal services and in relation to them, and also to money, there can be a general glut of commodities[jj] (loc. cit.). Here, by demand Mill understands the means of purchasing of the person who demands. But his[kk] means of purchasing other commodities are not proportioned to the quantity of his own commodity which he has produced, and wishes to part with; but to its value in exchange; and unless the value of a commodity in exchange be proportioned to its quantity, it cannot be true that the demand and supply of every individual are always equal to one another (loc. cit., pp. 48-49). All a nation s commodities may fall compared with money or labour (op. cit., p.64 et seq.). Thus a general glut of the market is possible (loc. cit.). Their prices can all fall below their production costs (loc. cit.).[oo] * * * ||777| For the rest, only the following passage from Malthus, which deals with the circulation process, need be noted. The sinking fund, i.e., the fund for wear and tear of the fixed capital, is, in my opinion, at the same time a fund for accumulation. I wish to quote yet a few passages from a Ricardian book directed against Malthus s theory. As regards the attacks from the capitalist point of view which are made in the book against Malthus s unproductive consumers in general and landlords in particular I shall demonstrate elsewhere that they can be used word for word against the capitalists from the workers standpoint. (This is to be included in the section The Relationship Between Capital and Wage-Labour Presented from an Apologetic Standpoint .) [An anonymous follower of Ricardo writes:] According to Malthus, the unproductive consumers are such a source (loc. cit., p. 35). [He is] right in regard to Malthus. But because it is one and the same fund the whole mass of commodities produced which constitutes the production fund and the consumption fund, the fund of supply and the fund of demand, the fund of capital and the fund of revenue, it does not by any means follow that it is irrelevant how the total fund is divided between these various categories. The anonymous author does not understand what Malthus means when he speaks of the demand of the workers being inadequate for the capitalist. What Malthus means is not the offer of labour (which our author calls demand from labour) but the demand for commodities which the wages the worker receives enable him to make, the money with which the worker buys commodities on the market. And Malthus rightly says of this demand that it can never be adequate to the supply of the capitalist. Otherwise the worker would be able to buy back the whole of his product with his wages. ||778| The same writer says: This is meant to be witty, but in fact it contains the essential secret of glut . In connection with Malthus s Essay on Rent, our author says: Malthus s book On Population was a lampoon directed against the French Revolution and the contemporary ideas of reform in England (Godwin, etc.). It was an apologia for the poverty of the working classes. The theory was plagiarised from Townsend and others. His Essay on Rent was a piece of polemic writing in support of the landlords against industrial capital. Its theory was taken from Anderson. His Principles of Political Economy was a polemic work written in the interests of the capitalists against the workers and in the interests of the aristocracy, Church, tax-eaters, toadies, etc., against the capitalists. Its theory was taken from Adam Smith. Where he inserts his own inventions, it is pitiable. It is on Sismondi that he bases himself in further elaborating the theory. |XIV-778|| * * * ||VIII-345| {Malthus makes the following remarks, laced with his usual profound philosophy , against any plan to provide the cottagers of England with cows (in the French translation of his An Essay on the Principles of Population, fifth ed., translated by P. Pr vost, Gen ve, 1836, troisi me d., t. IV, pp. 104-05): And it is therefore correct that diligence in labour (together with the exploitation of other people s labour) has given cows to the parvenus amongst the bourgeoisie, while the cows give their sons the taste for idleness. If one took away from their cows not the ability to give milk, but to command other people s unpaid labour, it would be a very good thing for their taste for labour. The selfsame profound philosopher remarks: Thus there must be lower classes in order that the upper ones may fear to fall and there must be upper classes in order that the lower ones may hope to rise. In order that indolence may carry its own punishments the worker must be poor and the rentier and the landlord, so beloved of Malthus, must be rich. But what does Malthus mean by the reward of industry? As we shall see later, he means that the worker must perform part of his labour without an equivalent return. A wonderful stimulus, provided the reward and not hunger were the stimulus. What it all boils down to is that a worker may hope to exploit other workers some day. Rousseau says: The more monopoly spreads, the heavier do the chains become for the exploited. Malthus, the profound thinker , has different views. His supreme hope, which he himself describes as more or less utopian, is that the mass of the middle class should grow and that the proletariat (those who work) should constitute a constantly declining proportion (even though it increases absolutely) of the total population. This in fact is the course taken by bourgeois society. ||XIV-778| A book in which Malthus s principles are elaborated is Outlines of Political Economy; being a Plain and Short View of the Laws relating to the Production, Distribution, and Consumption of Wealth etc., London, 1832. First of all the author[rr] explains the practical reasons governing the opposition of the Malthusians to the determination of value by labour-time. In the following sentence it emerges more clearly than in Malthus that the author confuses the value of commodities with the utilisation of commodities, or of money as capital. In the latter sense it correctly expresses the origin of surplus-value. The following, too, which is taken from Malthus, is correct as an explanation of why profit is to be reckoned as part of the production costs of capitalist production: In the following passage we have, on the one hand, the correct statement that profit directly arises out of the exchange of capital for labour, and on the other hand, the Malthusian thesis that profit is made in selling. The same thing happens when, for example, as a result of the introduction of new machinery, chemical processes, etc., the capitalist produces commodities below their old value and, either sells them at their old value or, at any rate, above the individual value to which they have fallen. It is true that when this happens, the worker does not directly work a shorter period for himself and a longer one for the capitalist, but in the reproduction process, a smaller proportion of what he produces is sufficient to put that labour into motion . In actual fact, the worker therefore exchanges a greater part of his immediate labour than previously for his own realised labour. For example, he continues to receive what he received previously, 10. But this 10, although it represents the same amount of labour to society, is no longer the product of the same amount of labour-time as previously, but may represent one hour less. So that, in fact, the worker works longer for the capitalist and a shorter period for himself. It is as if he received only 8, which, however, represented the same mass of use-values as a result of the increased productivity of his labour. The author remarks in connection with [James] Mill s s arguments regarding the identity of demand and supply, discussed earlier: About the relationship of labour and machinery, the author writes the following: (How so? If the distribution of labour is more judicious, more commodities will be produced by the same labour; hence the supply will grow, and does its absorption not require an increased amount of demand? Does Adam Smith not rightly say that division of labour depends upon the extent of the market? In actual fact, the difference as regards demand from outside is the same except [that demand] on a larger scale [is required] when machinery is used. But a more judicious distribution of labour may require the same or even a greater number of labourers than before, while the introduction of machinery must under all circumstances diminish the proportion of capital laid out in immediate labour) [Total] 800 (op. cit., pp. 114-15). <(The 10 men to keep it in repair represent here the annual wear and tear. Otherwise the calculation would be wrong, since the labour of repairing would then have to be added to the original production costs of the machinery.) Previously the manufacturer had to lay out 1,000 annually, but the product was [worth] 1,200. Now he has laid out 500 on machinery once and for all; he has not therefore to lay out this sum again in any other way. What he has to lay out is 100 annually for repairs and 500 in wages (since there are no raw materials in this example). He has to lay out only 600 per annum, but he makes a profit of 200 on his total capital just as he did previously. The amount and rate of profit remain the same as they were before. But his annual product amounts to only 800.> The wages of 33.4 men at 10, are 334 Profits 20 per cent 66 Total 400 (loc. cit., pp. 114-16). <In other words this means: If the 400 is expended on commodities which are the product of immediate labour and if the wages per man equal 10, then the commodities which cost 400 must be the product of less than 40 men. If they were the product of 40 men, then they would contain only paid labour. The value of labour (or the quantity of labour embodied in the wages) would be equal to the value of the product (the quantity of labour embodied in the commodity). But the commodities worth 400 contain unpaid labour, which is precisely what constitutes the profit. They must therefore be the product of less than 40 men. If the profit is 20 per cent, then only 5/6 of the product can consist of paid labour, that is, approximately 334 or 33.4 men at 10 per man. The other sixth, roughly 66, represents the unpaid labour. Ricardo himself has shown in exactly the same way that machinery itself, when its money price is as high as the price of the immediate labour it displaces, can never be the product of so much labour.> The wages of 25 men at 10 each, are 250 [The wages of] 5 men [at 10 each] to keep [it] in repair 50 Profits on 250 circulated and 250 fixed capital 100 400 (loc. cit., p. 116). <That is to say, in the case where machinery is introduced, the production of commodities costing 800 involves an outlay of 500 on machinery. Thus for the production of 400 [worth of commodities] only 250 [is spent on machinery]. Furthermore, 50 workers are needed to operate machinery worth 500, therefore 25 workers ([their wages] amounting to 250) for machinery worth 250; further for repair (the maintenance of the machine) 10 men are needed if the machinery costs 500, consequently 5 men ( [whose wages] come to 50) are needed for machinery costing 250. Thus [we have] 250 fixed capital and 250 circulating capital a total of 500, on which there is a profit of 20 per cent amounting to 100. The product is therefore [made up of] 300 wages and 100 profit 400. Thirty workers are employed in producing the commodities. Here it has been assumed all along that the capitalist who manufactures the commodities either borrows capital out of the ( 400) savings which the consumers have deposited at the bank, or that apart from the 400 which have been saved from the revenue of the consumers he himself possesses capital. For clearly with a capital of 400 he cannot lay out 250 on machinery and 300 on wages.> ||781| After the introduction [of the machine] the capitalist certainly cannot employ as much labour as he did before, without accumulating further capital; but the revenue which is saved by the consumers of the article after its price has fallen, will, by increasing their consumption of that or something else, create a demand for some though not for all the labour which has been displaced by the machine (op. cit., p. 119 [note]). The sinking fund itself can, indeed, be used for accumulation in the interval when the wear and tear of the machine is shown in the books, but does not actually affect its work. But in any case, the demand for labour created in this way is much smaller than if the whole capital invested in machinery were laid out in wages, instead of merely the annual wear and tear. MacPeter is an ass as always. This passage is only noteworthy, because it contains the idea that the sinking fund is itself a fund for accumulation. [a] In the manuscript Doctor Smith instead of Adam Smith . Ed. [b] In the manuscript That instead of And that . Ed. [c] Marx here summarises Cazenove s remarks. Ed. [d] The manuscript has worked up in them+the .-Ed. [e] The manuscript has can command is instead of would command .-Ed. [f] Those born to enjoy the fruits (Horace). Ed. [g] This and the following passage from Adam Smith, which Marx quotes from Garnier s French translation, are printed in this volume according to Adam Smith, Wealth of Nations, Oxford University Press, London, 1928. Ed. [h] In the manuscript the word Rises takes the place of In the former case of . Ed. [i] The word caused is used instead of occasioned in the manuscript. Ed. [j] Instead of there is one , the manuscript has a . Ed. [k] Instead of tends to rise, rises is used in the manuscript. Ed. [l] Instead of such as , the words whereas the are used in the manuscript. Ed. [m] From here the sentence is written in English in the manuscript. Ed. [n] Instead of cannot be true, except , the manuscript has and vice versa, only true . Ed. [o] Instead of an assumption which probably will not be found to be true , the manuscript has and this is true . Ed. [p] Instead of from that necessary state of things, which , the manuscript has indeed necessarily, because . Ed. [q] Instead of that , the manuscript has The . Ed. * Malthus presupposes the existence of profit in order to be able to measure its value by an external standard. He does not deal with the question of the origin and intrinsic possibility of profit. [r] The manuscript gives Profit of capital instead of Profits of stock . Ed. [s] The manuscript gives augments instead of increases , Ed. [t] The manuscript has and . Ed. [u] Instead of to , the manuscript has for . Ed. [v] The manuscript has Accumulated labour=the . Ed. [w] The manuscript has should be instead of were . Ed. [x] Instead of required to pay the labour employed will be , the manuscript has for labour . Ed. [y] The manuscript has let us suppose 1/4 of the advances for labour (immediate) instead of the words used above. Ed. [z] The manuscript has and instead of or . Ed. [aa] The manuscript has Then instead of it will be . Ed. [bb] The manuscript has his instead of of the . Ed. [cc] The manuscript has e.g. a farmer . Ed. [dd] The manuscript has are instead of are worth . Ed. [ee] The manuscript has his profit 400 on 2,000=20 per cent instead of the farmer s profit will be 400, or twenty per cent . Ed. [ff] The manuscript has his instead of of the . Ed. [gg] Eulogiser of the past (Horace, Ars poetica). Ed. [hh] In the manuscript working instead of labouring . Ed. [ii] Progress instead of increase in the manuscript. Ed. [jj] Marx summarises here the contents of a paragraph from Malthus s book Principles of Political Economy, London, 1836, p. 316. Ed. [kk] In the manuscript these instead of his . Ed. [ll] In the manuscript It is wrong instead of It is still further from the truth . Ed. [mm] Mankind instead of Society in the manuscript. Ed. [nn] In the manuscript when instead of the omitted words. Ed. [oo] In this paragraph Marx paraphrases some of the ideas expressed by Malthus in his book Definitions in Political Economy, London, 1827, p. 64 et seq. Ed. [pp] In the manuscript or the giving in exchange instead of or in exchange . Ed. [qq] In the manuscript if it is said . Ed. [rr] John Cazenove. Ed. [ss] In the manuscript 10 men to keep it instead of 10 to keep . Ed.

Economic Manuscripts: Theories of Surplus-Value, Chapter 19

https://www.marxists.org/archive/marx/works/1863/theories-surplus-value/ch19.htm

||782|Robert Torrens, An Essay on the Production of Wealth etc., London, 1821. Observation of competition the phenomena of production shows that capitals of equal size yield an equal amount of profit on the average, or that, given the average rate of profit (and the term, average rate of profit, has no other meaning), the amount of profit depends on the amount of capital advanced. Adam Smith has noted this fact. Its connection with the theory of value which he put forward caused him no pangs of conscience especially since in addition to what one might call his esoteric theory, he advanced many others, and could recall one or another at his pleasure. The sole reflection to which this question gives rise is his polemic against the view which seeks to resolve profit into wages of superintendence , since, apart from any other circumstance, the work of superintendence does not increase in the same measure as the scale of production and, moreover, the value of the capital advanced can increase, for instance, as a result of the dearness of raw materials, without a corresponding growth in the scale of production. He has no immanent law to determine the average profit or its amount. He merely says that competition reduces this x. Ricardo (apart from a few merely chance remarks) directly identifies profit with surplus-value everywhere. Hence with him, commodities sell at a profit not because they are sold above their value, but because they are sold at their value. Nevertheless, in considering value (in Chapter I of the Principles) he is the first to reflect at all on the relationship between the determination of the value of commodities and the phenomenon that capitals of equal size yield equal profits. They can only do this inasmuch as the commodities they produce although they are not sold at equal prices (one can, however, say that their output has equal prices provided the value of that part of constant capital which is not consumed is added to the product) yield the same surplus-value, the same surplus of price over the price of the capital outlay. Ricardo moreover is the first to draw attention to the fact that capitals of equal size are by no means of equal organic composition. The difference in this composition he defined in the way traditional since Adam Smith, namely as circulating and fixed capital, that is, he saw only the differences arising from the process of circulation. He certainly does not directly say that it is a prima facie contradiction of the law of value that capitals of unequal organic composition, which consequently set unequal amounts of immediate labour in motion, produce commodities of the same value and yield the same surplus-value (which he identifies with profit). On the contrary he begins his investigation of value by assuming capital and a general rate of profit. He identifies cost-price with value from the very outset, and does not see that from the very start this assumption is a prima facie contradiction of the law of value. It is only on the basis of this assumption which contains the main contradiction and the real difficulty that he comes to a particular case, changes in the level of wages, their rise or fall. For the rate of profit to remain uniform the rise or fall in wages, to which corresponds a fall or rise in profit, must have unequal effects on capitals of different organic composition. If wages rise, then profits fall, and also the prices of commodities in whose production a relatively large amount of fixed capital is employed. Where the opposite is the case, the results are likewise opposite. Under these Circumstances, therefore, the exchangeable values of the various commodities are not determined by the labour-time required for their respective production. In other words, this definition of an equal rate of profit (and Ricardo arrives at it only in individual cases and in this roundabout way) yielded by capitals of different organic composition contradicts the law of value or, as Ricardo says, constitutes an exception to it, whereupon Malthus rightly remarks that in the progress of ||783| industry, the rule becomes the exception and the exception the rule.[a] The contradiction itself is not clearly expressed by Ricardo, namely, not in the form: although one of the commodities contains more unpaid labour than the other for the amount of unpaid labour depends on the amount of paid labour, that is, the amount of immediate labour employed provided the rate of exploitation of the workers is equal they nevertheless yield equal values, or the same surplus of unpaid over paid labour. The contradiction however occurs with him in a particular form: in certain cases, wages, variations in wages, affect the cost-price (he says, the exchangeable values) of commodities. Equally, differences in the time of turnover of capital whether the capital remains in the process of production (even if not in the labour process) or in circulation for a longer period, requiring not more work, but more time for its turnover these differences have just as little effect on the equality of profit, and this again contradicts (is, according to Ricardo, an exception to) the law of value. He has therefore presented the problem very one-sidedly. Had he expressed it in a general way, he would also have had a general solution. But his great contribution remains: Ricardo has a notion that there is a difference between value and cost-price, and, in certain cases, even though he calls them exceptions to the law of value, he formulates the contradiction that capitals of unequal organic composition (that is, in the last analysis, capitals which do not exploit the same amount of living labour) yield equal surplus-value (profit) and if one disregards the fact that a portion of the fixed capital enters into the labour process without entering into the process that creates value equal values, commodities of equal value (or rather [of equal] cost-price, but he confuses this). As we have seen,[b] Malthus uses this [the contradiction described by Ricardo] in order to deny the validity of the Ricardian law of value. At the very beginning of his book, Torrens takes this discovery of Ricardo as his point of departure, not, however, to solve the problem, but to present the phenomenon as the law of the phenomenon. Here the phenomenon manifested in competition is merely mentioned, registered. Similarly a customary rate of profit is presupposed without explaining how it comes about, or even the feeling that this ought to be explained. namely, to the fact that the value of the product plus the residue of the capital not consumed, yield equal values, or, what is the same thing, equal profits. The merit of this passage does not consist in the fact that Torrens here merely registers the phenomenon once again without explaining it, but in the fact that he defines the difference by stating that equal capitals set in motion unequal quantities of living labour, though he immediately spoils it by declaring it to be a special case. If the value is equal to the labour worked up, embodied in a commodity, then it is clear that if the commodities are sold at their value the surplus-value contained in them can only be equal to the unpaid, or surplus labour, which they contain. But this surplus labour given the same rate of exploitation of the worker cannot be equal in the case of capitals which put in motion different quantities of immediate labour, whether it is the immediate production process or the period of circulation which is the cause of this difference. It is therefore to Torrens s credit that he expresses this. What does he conclude from it? That here ||784| within capitalist production the law of value suddenly changes. That is, that the law of value, which is abstracted from capitalist production, contradicts capitalist phenomena. And what does he put in its place? Absolutely nothing but the crude, thoughtless, verbal expression of the phenomenon which has to be explained. (that is, precisely when exchange-value in general, the product as commodity, is hardly developed at all, and consequently when there is no law of value either) Here again, he merely states the phenomenon that capitals of equal size yield equal profits or that the cost-price of commodities is equal to the price of the capital advanced plus the average profit; there is at the same time a hint that since equal capitals put in motion different quantities of immediate labour this phenomenon is, prima facie, inconsistent with the determination of the value of commodities by the amount of labour-time embodied in them. The remark [made by Torrens] that this phenomenon of capitalist production only manifests itself when capital comes into existence [when] the classes of capitalists and workers [arise, and] the objective conditions of labour acquire an independent existence as capital is tautology. But how the separation of the [factors necessary] for the production of commodities into capitalists and workers, capital and wage-labour upsets the law of value of commodities is merely inferred from the uncomprehended phenomenon. Ricardo sought to prove that, apart from certain exceptions, the separation between capital and wage-labour does not change anything in the determination of the value of commodities. Basing himself on the exceptions noted by Ricardo, Torrens rejects the law. He reverts to Adam Smith (against whom the Ricardian demonstration is directed) according to whom the value of commodities was determined by the labour-time embodied in them in that early period when men confronted one another simply as owners and exchangers of goods, but not when capital and property in land have been evolved. This means (as I observed in Part I) that the law which applies to commodities qua commodities, no longer applies to them once they are regarded as capital or as products of capital, or as soon as there is, in general, an advance from the commodity to capital. On the other hand, the product wholly assumes the form of a commodity only as a result of the fact that the entire product has to be transformed into exchange-value and that also all the ingredients necessary for its production enter it as commodities in other words it wholly becomes a commodity only with the development and on the basis of capitalist production. Thus the law of value is supposed to be valid for a type of production which produces no commodities (or produces commodities only to a limited extent) and not to be valid for a type of production which is based on the product as a commodity. The law itself, as well as the commodity as the general form of the product, is abstracted from capitalist production and yet it is precisely in respect of capitalist production that the law is held to be invalid. The proposition regarding the influence of the separation of capital and labour on the determination of value apart from the tautology that capital cannot determine prices so long as it does not as yet exist is moreover a quite superficial translation of a fact manifesting itself on the surface of capitalist production. So long as each person works himself with his own tools and sells his product himself <but in reality, the necessity to sell products on a ||785| social scale never coincides with production carried on with the producer s own means of production>, his costs comprise the cost of both the tools and the labour he performs. The cost to the capitalist consists in the capital he advances in the sum of values he expends on production not in labour, which he does not perform, and which only costs him what he pays for it. This is a very good reason for the capitalists to calculate and distribute the (social) surplus-value amongst themselves according to the size of their capital outlay and not according to the quantity of immediate labour which a given capital puts in motion. But it does not explain where the surplus-value which has to be distributed and is distributed in this way comes from. Torrens adheres to Ricardo insofar as he maintains that the value of a commodity is determined by the quantity of labour, but he declares that [it is] only the quantity of accumulated labour expended upon the production of commodities which determines their value. Here, however, Torrens lands himself in a fine mess. For example, the value of woollen cloth is determined by the accumulated labour contained in the loom, the wool, etc., and the wages, which constitute the ingredients of its production, accumulated labour, which, in this context, means nothing else but embodied labour, materialised labour-time. However, once the woollen cloth is ready and production is over, the immediate labour expended on the woollen cloth has likewise been transformed into accumulated or materialised labour. Then why should the value of the loom and of the wool be determined by the materialised labour (which is nothing but immediate labour embodied in an object, in a result, in a useful thing) they contain, and the value of the woollen cloth not be so determined? If the woollen cloth in turn becomes a component part of production in say dyeing or tailoring, then it is accumulated labour , and the value of the coat is determined by the wages of the workers, their tools and the woollen cloth, the value of which is determined by the accumulated labour contained in it. If I regard a commodity as capital, that means in this context as a condition of production, then its value resolves itself into immediate labour, which is called accumulated labour because it exists in a materialised form. On the other hand, if I regard the same commodity as a commodity, as a product and result of the [production] process, then it is definitely not determined by the labour which is accumulated in it, but by the labour accumulated in its conditions of production. It is indeed a fine vicious circle to seek to determine the value of a commodity by the value of the capital, since the value of the capital is equal to the value of the commodities of which it is made up. James Mill is right as against this fellow when he says: One thing more is to be noted here. Since [according to Torrens] the value of a commodity is determined by the value of the capital which produces it, or, in other words, by the quantity of labour, the labour accumulated and embodied in this capital, then only two possibilities ensue. The commodity contains: first, the value of the fixed capital used up; second, the value of the raw material or the quantity of labour contained in the fixed capital and raw material; third, the quantity of labour which is materialised in the money or in the commodities which function as wages. Now there are two [possibilities]: The accumulated labour contained in the fixed capital and raw material remains the same after the process of production as it was before. As far as the third part of the accumulated labour advanced is concerned, the worker replaces it by his immediate labour , that is, the immediate labour added to the raw material, etc., represents just as much accumulated labour in the commodity, in the product, as was contained in the wages. Or it represents more. If it represents more, the commodity contains more accumulated labour than the capital advanced did. Then profit arises precisely out of the surplus of accumulated labour contained in the commodity over that contained in the capital advanced. And the value of ||786| the commodity is determined, as previously, by the quantity of labour (accumulated plus immediate) contained in it (in the commodity the latter type of labour likewise constitutes accumulated, and no longer immediate, labour. It is immediate labour in the production process, and accumulated labour in the product). Or [i.e., in the first case] immediate labour only represents the quantity [of labour] embodied in the wage, is only an equivalent of it. (If it were less than this, the point to be explained would not be why the capitalist makes a profit but how it comes about that he makes no loss.) Where does the profit come from in this case? Where does the surplus-value, i.e., the excess of the value of the commodity over the value of the component parts of production, or over that of the capital outlay, arise? Not in the production process itself so that merely its realisation takes place in the process of exchange, or in the circulation process but in the exchange process, in the circulation process. We thus come back to Malthus and the crude mercantilist conception of profit upon expropriation . And it is this conception at which Mr. Torrens consistently arrives, although he is, on the other hand, sufficiently inconsistent to explain this payable value not by means of an inexplicable fund dropped down from the skies, namely, a fund which provides not only an equivalent for the commodity, but a surplus over and above this equivalent, and is derived from the means of the purchaser, who is always able to pay for the commodity above its value without selling it above its value thus reducing the whole thing to thin air. Torrens, who is not as consistent as Malthus, does not have recourse to such a fiction, but, on the contrary, asserts that effectual demand the sum of values paid for the product arises from supply alone, and is therefore likewise a commodity; and thus, since the two sides are both buyers and sellers, it is impossible to see how they can mutually cheat one another to the same extent. Malthus, who quotes this passage from Torrens, is quite justified in protesting against it(Definitions in Political Economy, London, 1827, p. 59).[c] But the following passages about production costs, etc., demonstrate that Torrens does indeed arrive at such absurd conclusions. 120 quarters of corn are most certainly more than 100 quarters. But if one merely considers the use-value and the process it goes through, that is, in reality, the vegetative or physiological ||787| process, as is the case here it would be wrong to say, not indeed, with regard to the 20 quarters, but with regard to the elements which go to make them up, that they do not enter into the production process. If this were so, they could never emerge from it. In addition to the 100 quarters of corn the seeds various chemical ingredients supplied by the manure, salts contained in the soil, water, air, light, are all involved in the process which transforms 100 quarters of corn into 120. The transformation and absorption of the elements, the ingredients, the conditions the expenditure of nature, which transforms 100 quarters into 120 takes place in the production process itself and the elements of these 20 quarters enter into this process itself as physiological expenditure , the result of which is the transformation of 100 quarters into 120. Regarded merely from the standpoint of use-value, these 20 quarters are not mere profit. The inorganic components have been merely assimilated by the organic components and transformed into organic material. Without the addition of matter and this is the physiological expenditure the 100 qrs. would never become 120. Thus it can in fact be said even from the point of view of mere use-value, that is, regarding corn as corn what enters into corn in inorganic form, as expenditure, appears in organic form, as the actual result, the 20 quarters, i.e., as the surplus of the corn harvested over the corn sown. But these considerations, in themselves, have as little to do with the question of profit, as if one were to say that lengths of wire which, in the production process, are stretched to a thousand times the length of the metal from which they are fabricated, yield a thousandfold profit since their length has been increased a thousandfold. In the case of the wire, the length has been increased, in the case of corn, the quantity. But neither increase in length nor increase in quantity constitutes profit, which is applicable solely to exchange-value, although exchange-value manifests itself in a surplus product. As far as exchange-value is concerned, there is no need to explain further that the value of 90 quarters of corn can be equal to (or greater than) the value of 100 quarters, that the value of 100 quarters can be greater than that of 120 quarters, and that of 120 quarters greater than that of 500. Thus, on the basis of one example which has nothing to do with profit, with the surplus in the value of the product over the value of the capital outlay. Torrens draws conclusions about profit. And even considered physiologically, as use-value, his example is wrong since, in actual fact, the 20 quarters of corn which form the surplus product already exist in one way or another in the production process, although in a different form. Finally, Torrens blurts out the brilliant old conception that profit is profit upon expropriation. One of Torrens s merits is that he has at all raised the controversial question: what are production costs. Ricardo continually confuses the value of commodities with their production costs (insofar as they are equal to the cost-price) and is consequently astonished that Say, although he believes that prices are determined by production costs, draws different conclusions. Malthus, like Ricardo, asserts that the price of a commodity is determined by the cost of production, and, like Ricardo, he includes the profit in the production costs. Nevertheless, he defines value in a different way, not by the quantity of labour contained in the commodity, but by the quantity of labour it can command. The ambiguities surrounding the concept of production costs arise from the very nature of capitalist production. Firstly: The cost to the capitalist of the commodity (he produces) is, naturally, what it costs him. It costs him nothing that is, he expends no value upon it apart from the value of the capital advanced. If he lays out 100 on raw materials, machinery, wages, etc., in order to produce the commodity, it costs him 100, neither more nor less. Apart from the labour embodied in these advances, apart from the accumulated labour that is contained in the capital expended and determines the value of the commodities expended [in the production process], it costs him no labour. What the immediate labour costs him is the wages he pays for it. Apart from these wages, the immediate labour costs him nothing, and apart from immediate labour he advances nothing except the value of the constant capital. ||788| It is in this sense that Torrens understands production costs, and this is the sense in which every capitalist understands them when he calculates his profit, whatever its rate may be. Production costs are here equated with the outlay of the capitalist, which is equal to the value of the capital advanced, i.e., to the quantity of the labour contained in the advanced commodities. Every economist, including Ricardo, uses this definition of production costs, whether they are called advances or expenses, etc. This is what Malthus calls the producing price as opposed to the purchaser s price. The transformation of surplus-value into profit corresponds to this definition of expenses. Secondly: According to the first definition, the production costs are the price which the capitalist pays for the manufacture of the commodity during the process of production, therefore they are what the commodity costs him. But what the production of a commodity costs the capitalist and what the production of the commodity itself costs, are two entirely different things. The labour (both materialised and immediate) which the capitalist pays for the production of the commodity and the labour which is necessary in order to produce the commodity are entirely different. Their difference constitutes the difference between the value advanced and the value earned; between the purchase price of the commodity for the capitalist and its selling price (that is, if it is sold at its value). If this difference did not exist, then neither money nor commodities would ever be transformed into capital. The source of profit would disappear together with the surplus-value. The production costs of the commodity itself consist of the value of the capital consumed in the process of its production, that is, the quantity of materialised labour embodied in the commodity plus the quantity of immediate labour which is expended upon it. The total amount of materialised plus immediate labour consumed in it constitutes the production costs of the commodity itself. The commodity can only be produced by means of the industrial consumption of this quantity of materialised and immediate labour. This is the pre-condition for its emergence out of the process of production as a product, as a commodity and even as a use-value. And no matter how profit and wages may vary, these immanent production costs of the commodity remain the same so long as the technological conditions of the real labour process remain the same, or, what amounts to the same thing, as long as there is no variation in the existing development of labour productivity. In this sense, the production costs of a commodity are equal to its value. The living labour expended upon the commodity and the living labour paid by the capitalist are two different things. From the outset, therefore, the production costs of a commodity to the capitalist (his advances) differ from the production costs of the commodity itself, its value. The excess of its value (that is, what the commodity itself costs) over and above the value of the capital expended (that is, what it costs the capitalist) constitutes the profit which, therefore, results not from selling the commodity above its value, but from selling it above the value of the advances the capitalist made. The production costs thus defined, the immanent production costs of the commodity, which are equal to its value, i.e., to the total amount of labour-time (both objectified and immediate) required for its production, remain the fundamental condition for its production and remain unchangeable so long as the productive power of labour remains unchanged. Thirdly. I have however previously shown that, in each separate branch of production or particular occupation, the capitalist does not by any means sell his commodities which are also the product of a particular trade, occupation or sphere of production at the value contained in them, and that, therefore, the amount of profit is not identical with the amount of surplus-value, surplus labour or unpaid labour embodied in the commodities he sells. On the contrary, he can, on the average, only realise as much surplus-value in the commodity as devolves on it as the product of an aliquot part of the social capital. If the social capital comes to 1,000 and the capital in a particular ||789| branch of production amounts to 100, and if the total amount of surplus-value (hence of the surplus product in which that surplus-value is embodied) equals 200, that is, 20 per cent, then the capital of 100 in this particular branch of production would sell its commodity for 120, whatever the value of the commodity, whether it is 120, or less or more; whether, therefore, the unpaid labour contained in his commodity forms a fifth of the labour expended upon it or not. This is the cost-price, and when one speaks of production costs in the proper sense (in the economic, capitalist sense), then the term denotes the value of the capital outlay plus the value of the average profit. It is clear that, however much the cost-price of an individual commodity may diverge from its value, it is determined by the value of the total product of the social capital. It is through the equalisation of the profits of the different capitals that they are connected with one another as aliquot parts of the aggregate social capital, and as such aliquot parts they draw dividends out of the common funds of surplus-value (surplus product), or surplus labour, or unpaid labour. This does not alter in any way the value of the commodity; it does not alter the fact that, whether its cost-price is equal to, or greater or smaller than, its value, it [the commodity] can never be produced without its value being produced, that is to say, without the total amount of materialised and immediate labour required for its production being expended upon it. This quantity of labour, not only of paid, but of unpaid labour, must be expended on it, and nothing in the general relationship between capital and labour is altered by the fact that in some spheres of production a part of the unpaid labour is appropriated by brother capitalists and not by the capitalist who puts the labour in motion in that particular branch of industry. Further, it is clear that whatever the relation between the value and the cost-price of a commodity, the latter will always change, rise or fall, in accordance with the changes of value, that is to say, the quantity of labour required for the production of the commodity. It is furthermore clear that part of the profit must always represent surplus-value, unpaid labour, embodied in the commodity itself, because, on the basis of capitalist production, every commodity contains more labour than has been paid by the capitalist putting that labour in motion. Some part of the profit may consist of labour not worked up in a commodity produced in the particular branch of industry, or resulting from the given sphere of production; but, then, there is some other commodity, resulting from some other sphere of production, whose cost-price falls below its value, or in whose cost-price less unpaid labour is accounted for, paid for, than is contained in it. It is clear, therefore, that although the cost-prices of most commodities must differ from their values, and hence the costs of production of these commodities must differ from the total quantity of labour contained in them, nevertheless, those costs of production and those cost-prices are not only determined by the values of the commodities and confirm the law of value instead of contradicting it, but, moreover, that the very existence of costs of production and cost-prices can be comprehended only on the basis of value and its laws, and becomes a meaningless absurdity without that premise. At the same time one perceives how economists who, on the one hand, observe the actual phenomena of competition and, on the other hand, do not understand the relationship between the law of value and the law of cost-price, resort to the fiction that capital, not labour, determines the value of commodities or rather that there is no such thing as value. ||790| Profit enters into the production costs of commodities; it is rightly included in the natural price of commodities by Adam Smith, because, in conditions of capitalist production, the commodity in the long run, on the average is not brought to the market if it does not yield the cost-price, which is equal to the value of the advances plus the average profit. Or, as Malthus puts it although he does not understand the origin of profit, its real cause because the profit, and therefore the cost-price which includes it, is (on the basis of capitalist production) a condition of the supply of the commodity. To be produced, to be brought to the market, the commodity must at least fetch that market price, that cost-price to the seller, whether its own value be greater or smaller than that cost-price. It is a matter of indifference to the capitalist whether his commodity contains more or less unpaid labour than other commodities, if into its price enters as much of the general stock of unpaid labour, or the surplus product in which it is fixed, as every other equal quantity of capital will draw from that common stock. In this respect, the capitalists are communists . In competition, each naturally tries to secure more than the average profit, which is only possible if others secure less. It is precisely as a result of this struggle that the average profit is established. A part of the surplus-value realised in profit, i.e., that part which assumes the form of interest on capital laid out (whether borrowed or not), appears to the capitalist as outlay, as production cost which he has as a capitalist, just as profit in general is the immediate aim of capitalist production. But in interest (especially on borrowed capital), this appears also as the actual precondition of his production. At the same time, this reveals the significance of the distinction between the phenomena of production and of distribution. Profit, a phenomenon of distribution, is here simultaneously a phenomenon of production, a condition of production, a necessary constituent part of the process of production. How absurd it is, therefore, for John Stuart Mill and others to conceive bourgeois forms of production as absolute, but the bourgeois forms of distribution as historically relative, hence transitory. I shall return to this later. The form of production is simply the form of distribution seen from a different point of view. The specific features and therefore also the specific limitation which set bounds to bourgeois distribution, enter into bourgeois production itself, as a determining factor, which overlaps and dominates production. The fact that bourgeois production is compelled by its own immanent laws, on the one hand, to develop the productive forces as if production did not take place on a narrow restricted social foundation, while, on the other hand, it can develop these forces only within these narrow limits, is the deepest and most hidden cause of crises, of the crying contradictions within which bourgeois production is carried on and which, even at a cursory glance, reveal it as only a transitional, historical form. This is grasped rather crudely but none the less correctly by Sismondi, for example, as a contradiction between production for the sake of production and distribution which makes absolute development of productivity impossible. ||791| James Mill, Elements of Political Economy, London, 1821 (second ed., London, 1824). Mill was the first to present Ricardo s theory in systematic form, even though he did it only in rather abstract outlines. What he tries to achieve is formal, logical consistency. The disintegration of the Ricardian school therefore begins with him. With the master what is new and significant develops vigorously amid the manure of contradictions out of the contradictory phenomena. The underlying contradictions themselves testify to the richness of the living foundation from which the theory itself developed. It is different with the disciple. His raw material is no longer reality, but the new theoretical form in which the master had sublimated it. It is in part the theoretical disagreement of opponents of the new theory and in part the often paradoxical relationship of this theory to reality which drive him to seek to refute his opponents and explain away reality. In doing so, he entangles himself in contradictions and with his attempt to solve these he demonstrates the beginning disintegration of the theory which he dogmatically espouses. On the one hand, Mill wants to present bourgeois production as the absolute form of production and seeks therefore to prove that its real contradictions are only apparent ones. On the other hand, [he seeks] to present the Ricardian theory as the absolute theoretical form of this mode of production and to disprove the theoretical contradictions, both the ones pointed out by others and the ones he himself cannot help seeing. Nevertheless in a way Mill advances the Ricardian view beyond the bounds reached by Ricardo. He supports the same historical interests as Ricardo those of industrial capital against landed property and he draws the practical conclusions from the theory that of rent for example more ruthlessly, against the institution of landed property which he would like to see more or less directly transformed into State property. This conclusion and this side of Mill do not concern us here. Ricardo s disciples, just as Ricardo himself, fail to make a distinction between surplus-value and profit. Ricardo only becomes aware of the problem as a result of the different influence which the variation of wages can exercise on capitals of different organic composition (and he considers different organic composition only with regard to the circulation process). It does not occur to them that, even if one considers not capitals in different spheres of production but each capital separately, insofar as it does not consist exclusively of variable capital, i.e., of capital laid out in wages only, rate of profit and rate of surplus-value are different things, that therefore profit must be a more developed, specifically modified form of surplus-value. They perceive the difference only insofar as it concerns equal profits average rate of profit for capitals in different spheres of production and differently composed of fixed and circulating ingredients. In this connection Mill only repeats in a vulgarised form what Ricardo says in Chapter I, On Value [Principles of Political Economy]. The only new consideration which occurs to him in relation to this question is this: Mill remarks that time as such (i.e. not labour-time, but simply time) produces nothing, consequently it does not produce value . How does this fit in with the law of value according to which capital, because it requires a longer time for its returns [to the manufacturer], yields, as Ricardo says, the same profit as capital which employs more immediate labour but returns more rapidly? One perceives that Mill deals here only with a quite individual case which, expressed in general terms, would read as follows. How does the cost-price, and the average rate of profit which it presupposes ||792 | (and therefore also equal value of commodities containing very unequal quantities of labour), fit in with the fact that profit is nothing but a part of the labour-time contained in the commodity, the part which is appropriated by the capitalist without an equivalent? On the other hand, in the case of the average rate of profit and cost-price, criteria which are quite extrinsic and external to the determination of value are advanced, for example, that the capitalist whose capital takes longer to make its return because, as in the case of wine, it must remain longer in the production process (or, in other cases, longer in the circulation process) must be compensated for the time in which he cannot use his capital to produce value. But how can the time in which no value is produced create value? Mill s passage concerning time reads: In reality, what is involved in the grounds for compensation between capitals in different spheres of production is not the production of surplus-value, but its division between different categories of capitalists. Viewpoints are here advanced which have nothing whatever to do with the determination of value as such. Everything which compels capital in a particular sphere of production to renounce conditions which would produce a greater amount of surplus-value in other spheres, is regarded here as grounds for compensation. Thus, if more fixed and less circulating capital is employed, if more constant than variable capital is employed, if it must remain longer in the circulation process, and finally, if it must remain longer in the production process without being subjected to the labour process a thing which always happens when breaks of a technological character occur in the production process in order to expose the developing product to the working of natural forces, for example, wine in the cellar. Compensation ensues in all these cases and the last mentioned is the one which Mill seizes on, thus tackling the difficulty in a very circumscribed and isolated way. A part of the surplus-value produced in other spheres is transferred to the capitals more unfavourably placed with regard to the direct exploitation of labour, simply in accordance with their size (competition brings about this equalisation so that each separate capital appears only as an aliquot part of social capital). The phenomenon is very simple as soon as the relationship of surplus-value and profit as well as the equalisation of profit in a general rate of profit is understood. If, however, it is to be explained directly from the law of value without any intermediate link, that is, if the profit which a particular capital yields in a particular branch of production is to be explained on the basis of the surplus-value contained in the commodities it produces, in other words on the basis of the unpaid labour (consequently also on the basis of the labour directly expended in the production of the commodities), this is a much more difficult problem to solve than that of squaring the circle, which can be solved algebraically. It is simply an attempt to present that which does not exist as in fact existing. But it is in this direct form that Mill seeks to solve the problem. Thus no solution of the matter is possible here, only a sophistic explaining away of the difficulty, that is, only scholasticism. Mill begins this process. In the case of an unscrupulous blockhead like McCulloch, this manner assumes a swaggering shamelessness. Mill s solution cannot be better summed up than it is in the words of Bailey: Here the contradiction between the general law and further developments in the concrete circumstances is to be resolved not by the discovery of the connecting links but by directly subordinating and immediately adapting the concrete to the abstract. This moreover is to be brought about by a verbal fiction, by changing the correct names of things. (These are indeed verbal disputes , they are verbal , however, because real contradictions which are not resolved in a real way, are to be solved by phrases.) When we come to deal with McCulloch, it will be seen that this manner, which appears in Mill only in embryo, did more to undermine the whole foundation of the Ricardian theory than all the attacks of its opponents. Mill resorts to this type of argument only when he is quite unable to find any other expedient. But as a rule his method is quite different. Where the economic relation and therefore also the categories expressing it includes contradictions, opposites, and likewise the unity of the opposites, he emphasises the aspect of the unity of the contradictions and denies the contradictions. He transforms the unity of opposites into the direct identity of opposites. For example, a commodity conceals the contradiction of use-value and exchange-value. This contradiction develops further, presents itself and manifests itself in the duplication of the commodity into commodity and money. This duplication appears as a process in the metamorphosis of commodities in which selling and buying are different aspects of a single process and each act of this process simultaneously includes its opposite. In the first part of this work, I mentioned that Mill disposes of the contradiction by concentrating only on the unity of buying and selling; consequently he transforms circulation into barter, then, however, smuggles categories borrowed from circulation into [his description of] barter. See also what I wrote there about Mill s theory of money, in which he employs similar methods. In James Mill we find the unsatisfactory divisions Production , Distribution , Interchange , Consumption . Wages: It is highly characteristic of Mill that, just as money for him is an expedient invented for convenience sake, capitalist relations are likewise invented for the same reason. These specific social relations of production are invented for convenience sake. Commodities and money are transformed into capital because the worker has ceased to engage in exchange as a commodity producer and commodity owner; instead of selling commodities he is compelled to sell his labour itself (to sell directly his labour-power) as a commodity to the owner of the objective conditions of labour. This separation is the prerequisite for the relationship of capital and wage-labour in the same way as it is the prerequisite for the transformation of money (or of the commodities by which it is represented) into capital. Mill presupposes the separation, the division; he presupposes the relationship of capitalist and wage-worker, in order to present as a matter of convenience the situation in which the worker sells no product, no commodity, but his share of the product (in the production of which he has no say whatsoever and which proceeds independently of him) before he has produced it. ||794| Or, more precisely, the worker s share of the product is paid for transformed into money by the capitalist before the capitalist has disposed of, or realised, the product in which the worker has a share. This view is aimed at circumventing the specific difficulty, along with the specific form of the relationship. Namely, the difficulty of the Ricardian system according to which the worker sells his labour directly (not his labour-power). The [difficulty can be expressed as follows]: the value of a commodity is determined by the labour-time required for its production; how does it happen that this law of value does not hold good in the greatest of all exchanges, which forms the foundation of capitalist production, the exchange between capitalist and labourer? Why is the quantity of materialised labour received by the worker as wages not equal to the quantity of immediate labour which he gives in exchange for his wages? To shift this difficulty, Mill transforms the labourer into a commodity owner who sells the capitalist his product, his commodity since his share of the product, of the commodity, is his product, his commodity, in other words, a value produced by him in the form of a particular commodity. He resolves the difficulty by transforming the transaction between capitalist and labourer, which includes the contradiction between materialised and immediate labour, into a common transaction between commodity owners, owners of materialised labour. Although by resorting to this artifice Mill has indeed made it impossible for himself to grasp the specific nature, the specific features, of the proceedings which take place between capitalist and wage-worker, he has not reduced the difficulty in any way, but has increased it, because the peculiarity of the result is now no longer comprehensible in terms of the peculiarity of the commodity which the worker sells (and the specific feature of this commodity is that its use-value is itself a factor of exchange-value, its use therefore creates a greater exchange-value than it itself contained). According to Mill, the worker is a seller of commodities like any other. For example, he produces 6 yards of linen. Of these 6, 2 yards are assumed to be equal to the value of the labour which he has added. He thus sells 2 yards of linen to the capitalist. Why then should he not receive the full value of the 2 yards, like any other seller of 2 yards of linen, since he is now a seller of linen like any other? The contradiction with the law of value now expresses itself much more crassly than before. He does not sell a particular commodity differing from all other commodities. He sells labour embodied in a product, that is, a commodity which as such is not specifically different from any other commodity. If now the price of a yard [of linen] that is, the quantity of money containing the same amount of labour-time as the yard [of linen] is 2 shillings, why then does the worker receive 1 shilling instead of 2? But if the worker received 2 shillings, the capitalist would not secure any surplus-value and the whole Ricardian system would collapse. We would have to return to profit upon expropriation. The 6 yards would cost the capitalist 12 shillings, i.e., their value, but he would sell them for 13 shillings. Or linen, and any other commodity, is sold at its value when the capitalist sells it, but below its value when the worker sells it. Thus the law of value would be destroyed by the transaction between worker and capitalist. And it is precisely in order to avoid this that Mill resorts to his fictitious argument. He wants to transform the relationship between worker and capitalist into the ordinary one between sellers and buyers of commodities. But why should not the ordinary law of value of commodities apply to this transaction? [It may be said however that] the worker is paid in advance . Consequently this is not after all the ordinary relationship of buying and selling commodities. What does this payment in advance mean in this context? The worker who, for example, is paid weekly, advances his labour and produces the share of the weekly product which belongs to him his weekly labour embodied in a product (both according to Mill s assumption and in practice) before he receives payment from the capitalist. The capitalist advances raw materials and machines, the worker the labour , and as soon as the wages are paid at the end of the week, he sells a commodity, his commodity, his share of the total commodity, to the capitalist. But, Mill will say, the capitalist pays the 2 yards ||795| of linen due to the worker, i.e., turns them into cash, transforms them into money, before he himself sells the 6 yards and transforms them into money. But what if the capitalist is working on orders, if he sells the goods before he produces them? Or to express it more generally, what difference does it make to the worker in this case the seller of 2 yards of linen if the capitalist buys these 2 yards from him in order to sell them again, and not to consume them? Of what concern are the buyer s motives to the seller? And how can motives, moreover, modify the law of value? To be consistent, each seller would have to dispose of his commodities below their value, for he is disposing of his products to the buyer in the form of a use-value, whereas the buyer hands over value in the form of money, the cash form of the product. In this case, the linen manufacturer would also have to underpay the yarn merchant and the machine manufacturer and the colliery owner and so on. For they sell him commodities which he only intends to transform into money, whereas he pays them in advance the value of the component parts entering into his commodity not only before the commodity is sold, but before it is even produced. The worker provides him with linen, a commodity in a marketable form, in contrast to other sellers whose commodities, machinery, raw materials, etc., have to go through a process before they acquire a saleable form. It is a pretty kettle of fish for such an inveterate Ricardian as Mill, according to whom purchase and sale, supply and demand are identical terms, and money a mere formality, if the transformation of the commodity into money and nothing else takes place when the 2 yards of linen are sold to the capitalist includes the fact that the seller has to sell the commodity below its value, and the buyer, with his money, has to buy it above its value. [Mill s argument] therefore amounts to the absurdity that, in this transaction, the buyer buys the commodity in order to resell it at a profit and that, consequently, the seller must sell the commodity below its value and with this the whole theory of value falls to the ground. This second attempt by Mill to resolve a Ricardian contradiction, in fact destroys the whole basis of the system, especially its great merit that it defines the relationship between capital and wage-labour as a direct exchange between hoarded and immediate labour, that is, that it grasps its specific features. In order to extricate himself, Mill would have to go further and to say that it is not merely a question of the simple transaction of the purchase and sale of commodities; that, on the contrary, insofar as it involves payment or the turning into money of the worker s product, which is equal to his share of the total product, the relationship between worker and capitalist is similar to that prevailing between the lending capitalist or discounting capitalist (the moneyed capitalist) and the industrial capitalist. It would be a pretty state of affairs to presuppose interest-bearing capital a special form of capital in order to deduce the general form of capital, capital which produces profit; that is, to present a derived form of surplus-value (which already presupposes capital) as the cause of the appearance of surplus-value. In that case, moreover, Mill would have to be consistent and in place of all the definite laws concerning wages and the rate of wages elaborated by Ricardo, he would have to derive them from the rate of interest, and if he did that it would indeed be impossible to explain what determines the rate of interest, since, according to the Ricardians and all other economists worth naming, the rate of interest is determined by the rate of profit. The proposition concerning the share of the worker in his own product is in fact based on this: If one considers not simply the isolated transaction between capitalist and worker, but the exchange which takes place between, both in the course of reproduction, and if one considers the real content of this process instead of the form in which it appears, then it is in fact evident that what the capitalist pays the worker (as well as the part of capital which confronts the worker as constant capital) is nothing but a part of the worker s product itself and, indeed, a part which does not have to be transformed into money, but which has already been sold, has already been transformed into money, since wages are paid in money, not in kind. Under slavery, etc., the false appearance brought about by the previous transformation of the product into money insofar as it is expended on wages does not arise; it is therefore obvious that what the slave receives as wages is, in fact, nothing that the slave-owner advances him, but simply the portion of the realised labour of the slave that returns to him in the form of means of subsistence. The same applies to the capitalist. He advances something only in appearance. Since he pays for the work only after it has been done, he advances or rather ||796| pays the worker as wages a part of the product produced by the worker and already transformed into money. A part of the worker s product which the capitalist appropriates, which is deducted beforehand, returns to the worker in the form of wages as an advance on the new product, if you like. It is quite unworthy of Mill to cling to this appearance of the transaction in order to explain the transaction itself (this sort of thing might suit McCulloch, Say or Bastiat). The capitalist can advance the worker nothing except what he has taken previously from the worker, i.e., what has been advanced to him by other people s labour. Malthus himself says that what the capitalist advances consists not of cloth and other commodities , but of labour , that is, precisely of that which he himself does not perform. He advances the worker s own labour to the worker. However, the whole paraphrase is of no use to Mill, for it does not help him to avoid resolving the question: how can the exchange between hoarded and immediate labour (and this is the way the exchange process between capital and labour is perceived by Ricardo and by Mill and others after him) correspond to the law of value, which it contradicts directly? One can see from the following passage that it is of no help to Mill: The worker is paid for his share of the product. This is said in order to transform him into an ordinary seller of a commodity (a product) vis- -vis the capitalist and to eliminate the specific feature of this relationship. [According to Mill] the worker s share of the product is his product, that is, the share of the product in which his newly applied labour is realised. But this is not the case. On the contrary, we now ask which is his share of the product, that is, which is his product? For the part of the product which belongs to him is his product, which he sells. We are now told that his product and his product are two quite different things. We must establish, first of all, what his product (in other words, his share of the product, that is, the part of the product that belongs to him) is. His product is thus a mere phrase, since the quantity of value which he receives from the capitalist is not determined by his own production. Mill has thus merely removed the difficulty one step. He has got no farther than he was at the beginning. There is a quid pro quo here. Supposing that the exchange between capital and wage-labour is a continuous activity as it is if one does not isolate and consider one individual act or element of capitalist production then the worker receives a part of the value of his product which he has replaced, plus that part of the value which he has given the capitalist for nothing. This is repeated continuously. Thus he receives in fact continuously a portion of the value of his own product, a part of, or a share in, the value he has produced. Whether his wages are high or low is not determined by his share of the product but, on the contrary, his share of the product is determined by the amount of his wages. He actually receives a share of the value of the product. But the share he receives is determined by the value of labour, not conversely, the value of labour-by his share in the product. The value of labour, that is, the labour-time required by the worker for his own reproduction, is a definite magnitude; it is determined by the sale of his labour power to the capitalist. This virtually determines his share of the product as well. It does not happen the other way round, that his share of the product is determined first, and as a result, the amount or value of his wages. This is precisely one of Ricardo s most important and most emphasised propositions, for otherwise the price of labour would determine the prices of the commodities it produces, whereas, according to Ricardo, the price of labour determines nothing but the rate of profit. And how does Mill determine the share of the product which the worker receives? By demand and supply, competition between workers and capitalists. What Mill says applies to all commodities: Here we have the gist of the matter. [This is said by] Mill who, as a zealous Ricardian, proves that although demand and supply can, to be sure, determine the vacillations of the market price either above or below the value of the commodity, they cannot determine that value itself, that these are meaningless words when applied to the determination of value, for the determination of demand and supply presupposes the determination of value. In order to determine the value of labour, i.e., the value of a commodity, Mill now resorts to something for which Say had already reproached Ricardo: determination by demand and supply. But even more. Mill does not say which of the two parties represents supply and which demand which is of no importance to the matter here. Still, since the capitalist offers money and the worker offers something for the money, we will assume that demand is on the side of the capitalist and supply on that of the worker. But what then does the worker sell ? What does he supply? His share of the product which does not [yet] exist? But it is just his share in the future product which has to be determined by competition between him and the capitalist, by the demand and supply relationship. One of the sides of this relationship supply cannot be something which is itself the result of the struggle between demand and supply. What then does the worker offer for sale? His labour? If this is so, then Mill is back again at the original difficulty he sought to evade, the exchange between hoarded and immediate labour. And when he says that what is happening here is not the exchange of equivalents, or that the value of labour the commodity sold, is not measured by the labour-time itself, but by competition, by demand and supply, then he admits that Ricardo s theory breaks down, that his opponents are right, that the determination of the value of commodities by labour-time is false, because the value of the most important commodity, labour itself, contradicts this law of value of commodities. As we shall see later, Wakefield says this quite explicitly. Mill can turn and twist as he will, he cannot extricate himself from the dilemma. At best, to use his own mode of expression, competition causes the workers to offer a definite quantity of labour for a price which, according to the relation of demand and supply, is equal to a larger or smaller part of the product which they will produce with this quantity of labour. That this price, this sum of money, which they receive in this way, is equal to a larger or smaller part of the value of the product to be manufactured, does not, however, as a matter of course, in any way prevent a definite amount of living labour (immediate labour) from being exchanged for a greater or lesser amount of money (accumulated labour, existing moreover in the form of exchange-value). It does not therefore prevent the exchange of unequal quantities of labour, that is, of less hoarded labour for more immediate labour. This was precisely the phenomenon that Mill had to explain and he wished to clear the problem up without violating the law of value. The phenomenon is not changed in the slightest, much less explained, by declaring that the proportion in which the worker exchanges his immediate labour for money is expressed at the end of the production process in the ratio of the value paid him to the value of the product he has produced. The original unequal exchange between capital and labour thus only appears in a different form. How Mill boggles at direct exchange between labour and capital which Ricardo takes as his point of departure without any embarrassment at all is also shown by the way he proceeds. Thus he says: ||798| Let us begin by supposing that there is a certain number of capitalists that there is also a certain number of labourers; and that the proportion, in which the commodities produced ore divided between them, has fixed itself at some particular point. What has to be determined is the proportion in which they (capitalists and workers) divide the product . In order to establish this by competition, Mill assumes that this proportion has fixed itself at some particular point . In order to establish the share of the worker by means of competition, he assumes that it is determined before competition at some particular point . Moreover, in order to demonstrate how competition alters the division of the product which is determined at some particular point , he assumes that workers offer to work for a smaller reward when their number grows more rapidly than the quantity of capital. Thus he says here outright that what the workers supply consists of labour and that they offer this labour for a reward , i.e., money, a definite quantity of hoarded labour . In order to avoid direct exchange between labour and capital, direct sale of labour, he has recourse to the theory of the division of the product . And in order to explain the proportion in which the product is divided, he presupposes direct sale of labour for money, so that this original exchange between capital and labour is later expressed in the proportion of [the share] the worker receives of his product, and not that the original exchange is determined by his share of the product. And finally, if the number of workers and the amount of capital remain the same, then the wage rate will remain the same. But what is the wage rate when demand and supply balance? That is the point which has to be explained. It is not explained by declaring that this rate is altered when the equilibrium between demand and supply is upset. Mill s tautological circumlocutions only demonstrate that he feels there is a snag here in the Ricardian theory which he can only overcome by abandoning the theory altogether. Against Malthus, Torrens, and others, against the determination of the value of commodities by the value of capital, Mill remarks correctly: <Mill does not gloss over the contradiction between capital and labour. The rate of profit must be high so that the social class which is free from immediate labour may be important; and for that purpose wages must be relatively low. It is necessary that the mass of the labourers should not be masters of their own time and slaves of their own needs, so that human (social) capacities can develop freely in the classes for which the working class serves merely as a basis. The working class represents lack of development in order that other classes can represent human development. This in fact is the contradiction in which bourgeois ||799| society develops, as has every hitherto existing society, and this is declared to be a necessary law, i.e., the existing state of affairs is declared to be absolutely reasonable. In addition to the above. Mill, as a Ricardian, defines labour and capital simply as different forms of labour. In another passage he says: Here he comes to the point. Since what pays for immediate labour is always hoarded labour, capital, the fact that it is not paid at the same rate means nothing more than that more immediate labour is exchanged for less hoarded labour, and that this is always the case, since otherwise hoarded labour would not be exchanged as capital for immediate labour and would not only fail to yield the very high interest desired by Mill, but would yield none at all. The passage quoted thus contains the admission (since Mill along with Ricardo regards the exchange between capital and labour as a direct exchange of hoarded and immediate labour), that they are exchanged in unequal proportions, and that in respect of them the law of value according to which equal quantities of labour are exchanged for one another breaks down. Mill advances as a basic law what Ricardo actually assumes in order to develop his theory of rent. This is fundamentally wrong, since capitalist production develops first of all in industry, not in agriculture, and only embraces the latter by degrees, so that it is only as a result of the advance of capitalist production that agricultural profits become equalised to industrial profits and only as a result of this equalisation do the former influence the latter. Hence it is in the first place wrong historically. But secondly, once this equalisation is an accomplished fact that is, presupposing a level of development of agriculture in which capital, in accordance with the rate of profit, flows from industry to agriculture and vice versa it is equally wrong to state that from this point on agricultural profits become the regulating force, instead of the influence being reciprocal. Incidentally, in order to develop the concept of rent, Ricardo himself assumes the opposite. The price of corn rises; as a result agricultural profits do not fall (as long as there are no new supplies either from inferior land or from additional, less productive investments of capital) for the rise in the price of corn more than compensates the farmer for the loss he incurs by the rise in wages following on the rise in the price of corn but profits fail in industry, where no such compensation or over-compensation takes place. Consequently the industrial profit rate falls and capital which yields this lower rate of profit can therefore be employed on inferior lands. This would not be the case if the old profit rate prevailed. Only because the decline of industrial profits thus reacts on the agricultural profit yielded by the worse land, does agricultural profit generally fall, ||800| and a part of it is detached in the form of rent from the profit the better land yields. This is the way Ricardo describes the process, according to which, therefore, industrial profit regulates profit in agriculture. If agricultural profits were to rise again as a result of improvements in agriculture, then industrial profits would also rise. But this does not by any means exclude the fact that as originally the decline in industrial profit causes a decline in agricultural profit a rise in industrial profit may bring about a rise in agricultural profit. This is always the case when industrial profit rises independently of the price of corn and of other agricultural necessaries which enter into the wages of the workers, that is, when it rises as a result of the fall in the value of commodities which constitute constant capital, etc. Rent moreover cannot possibly be explained if industrial profit does not regulate agricultural profit. The average rate of profit in industry is established as a result of equalisation of the profits of the different capitals and the consequent transformation of the values into cost-prices. These cost-prices the value of the capital advances plus average profit are the prerequisite received by agriculture from industry, since the equalisation of profits cannot take place in agriculture owing to landownership. If then the value of agricultural produce is higher than the cost-price determined by the industrial average profit would be, the excess of this value over the cost-price constitutes the absolute rent. But in order that this excess of value over cost-price can be measured, the cost-price must be the primary factor; it must therefore be imposed on agriculture as a law by industry. A passage from Mill must be noted: One sees here how the direct identity of demand and supply (hence the impossibility of a general glut) is proved. The product constitutes demand and the extent of this demand, moreover, is measured by the value of the product. The same abstract reasoning with which Mill demonstrates that buying and selling are but identical and do not differ; the same tautological phrases with which he shows that prices depend on the amount of money in circulation; the same methods used to prove that supply and demand (which are only more developed forms of buyer and seller) must balance each other. The logic is always the same. If a relationship includes opposites, it comprises not only opposites but also the unity of opposites. It is therefore a unity without opposites. This is Mill s logic, by which he eliminates the contradictions . Let us begin with supply. What I supply is commodities, a unity of use-value and exchange-value, for example, a definite quantity of iron worth 3 (which is equal to a definite quantity of labour-time). According to the assumption I am a manufacturer of iron. I supply a use-value iron and I supply a value, namely, the value expressed in the price of the iron, that is, in 3. But there is the following little difference. A definite quantity of iron is in reality placed on the market by me. The value of the iron, on the other hand, exists only as its price which must first be realised by the buyer of the iron, who represents, as far as I am concerned, the demand for iron. The demand of the seller of iron consists in the demand for the exchange-value of the iron, which, although it is embodied in the iron, is not realised. It is possible for the same exchange-value to be represented by very different quantities of iron. The supply of use-value and the supply of value to be realised are thus by no means identical, since quite different quantities of use-value ||801| can represent the same quantity of exchange-value. The same value 3 can be represented by one, three or ten tons of iron. The quantity of iron (use-value) which I supply and the quantity of value I supply, are by no means proportionate to one another, since the latter quantity can remain unchanged no matter how much the former changes. No matter how large or small the quantity of iron I supply may be, it is assumed that I always want to realise the value of the iron, which is independent of the actual quantity of iron and in general of its existence as a use-value. The value supplied (but not yet realised) and the quantity of iron which is realised, do not correspond to each other. No grounds exist therefore for assuming that the possibility of selling a commodity at its value corresponds in any way to the quantity of the commodity I bring to market. For the buyer, my commodity exists, above all, as use-value. He buys it as such. But what he needs is a definite quantity of iron. His need for iron is just as little determined by the quantity produced by me as the value of my iron is commensurate with this quantity. It is true that the man who buys has in his possession merely the converted form of a commodity money i.e., the commodity in the form of exchange-value, and he can act as a buyer only because he or others have earlier acted as sellers of commodities which now exist in the form of money. This, however, is no reason why he should reconvert his money into my commodity or why his need for my commodity should be determined by the quantity of it that I have produced. Insofar as he wants to buy my commodity, he may want either a smaller quantity than I supply, or the entire quantity, but below its value. His demand does not have to correspond to my supply any more than the quantity I supply and the value at which I supply it are identical. However, the inquiry into demand and supply does not belong here. Insofar as I supply iron, I do not demand iron, but money. I supply a particular use-value and demand its value. My supply and demand are therefore as different as use-value and exchange-value. Insofar as I supply a value in the iron itself, I demand the realisation of this value. My supply and demand are thus as different as something conceptual is from something real. Further, the quantity I supply and its value stand in no proportion to each other. The demand for the quantity of use-value I supply is however measured not by the value I wish to realise, but by the quantity which the buyer requires at a definite price. Yet another passage from Mill: In other words, this means nothing else but that all commodities placed on the market constitute supply. <Stop! His demand is equal to the value (when it is realised) of the portion of products which he wants to dispose of. What he wants to dispose of is a certain quantity of use-value; what he wishes to have is the value of this use-value. Both things are anything but identical> <by no means; his demand does not consist in what he wishes to dispose of, i.e., the product, but in the demand for the value of this product; on the other hand, his supply really consists of this product, whereas the value is only conceptually supplied> (That is, the value of the commodity supplied by him and the value which he asks for it but does not possess are equal; provided he sells the commodity at its value, the value supplied (in the form of commodity) and the value received (in the form of money) are equal. But it does not follow that, because he wants to sell the commodity at its value, he actually does so. A quantity of commodities is supplied by him, and is on the market. He tries to get the value for it.) Once Mill has assumed that supply and demand are equal for each individual, then the whole long-winded excursus to the effect that supply and demand are also equal for all individuals, is quite superfluous. How Mill was regarded by contemporary Ricardians can be seen, for instance, from the following: In the work cited, McCulloch says that Mill s object is: One can conclude from his logic that he takes over the quite illogical Ricardian structure, which we analysed earlier, and na vely regards it on the whole as a natural order . As far as the above-mentioned Pr vost is concerned, who made Mill s exposition of the Ricardian system the basis of his R flexions, a number of his objections are founded on sheer, callow misunderstanding of Ricardo. But the following remark about rent is noteworthy: Pr vost cites the following from Mill, which is also important for my argument, since Mill himself here thinks of one example where differential rent arises because the new demand, the additional demand, is supplied by a better, not a worse soil, consequently, the ascending line. (Thus there is here differential rent without the lowering of the rate of profit and without any increase in the price of agricultural products) (this must happen all the more frequently, since the situation ||803| must improve continuously with the industrial development of the country, the growth of its means of communication and the increase in population, irrespective of the natural fertility, and the relatively better location has the same effect as [greater] natural fertility.) <Say, in his notes to Ricardo s book translated by Constancio, makes only one correct remark about foreign trade. Profit can also be made by cheating, one person gaining what the other loses. Loss and gain within a single country cancel each other out. But not so with trade between different countries. And even according to Ricardo s theory, three days of labour of one country can be exchanged against one of another country a point not noted by Say. Here the law of value undergoes essential modification. The relationship between labour days of different countries may be similar to that existing between skilled, complex labour and unskilled, simple labour within a country. In this case, the richer country exploits the poorer one, even where the latter gains by the exchange, as John Stuart Mill explains in his Some Unsettled Questions.> [Pr vost says the following about the relationship between agricultural and industrial profit:] The point is correct, but is conceived in a much too limited sense. See above.[j] The Ricardians insist that profit can fall only as a result of a rise in wages, because necessaries rise in price with [the growth of] population, this, however, is a consequence of the accumulation of capital, since inferior soils are cultivated as a result of this accumulation. But Ricardo himself admits that profits can also fall when capitals increase faster than population, when the competition of capitals causes wages to rise. This [corresponds to] Adam Smith s theory. Pr vost says: Pr vost builds on the false Ricardian foundation which can only explain falling profits as a result of decreasing surplus-value, and therefore decreasing surplus labour, and consequently as a result of greater value or rising cost of the necessaries consumed by the worker, that is, increasing value of labour, although the real wages of the labourer may not rise but decline; on this basis he seeks to prove that a continual decline in profits is not inevitable. He says first: (namely, agricultural profits, for the population increases with the state of prosperity, the demand for agricultural produce therefore grows and consequently the farmer makes additional profits) Pr vost obviously misunderstands the Ricardian view. As a result of prosperity, the population increases, thus raising the price of agricultural products and hence agricultural profits. (Although it is not easy to see why, if this rise is constant, rents should not be increased after the leases run out and why these additional agricultural profits should not be collected in the form of rent even before the inferior land is cultivated.) But the same rise in [the price of] agricultural produce which causes agricultural profits to go up, increases wages in all industries and consequently brings about a fall in industrial profits. Thus a new rate of profit arises in industry. If at the existing market prices the inferior lands even pay only this lower rate of profit, capitals can be transferred to the inferior land. They will be attracted to it by the high agricultural profits and the high market price of corn. As Pr vost says, they may, before a sufficient amount of capital has been transferred, even yield higher profits than the industrial profits, which have declined. But as soon as the additional supply is adequate, the market price falls, so that the inferior soils only yield the ordinary industrial profit. The additional amount yielded by the product of the better [soils] is converted into rent. This is the Ricardian conception, whose basic premises are accepted by Pr vost and from which he reasons. Corn is now dearer than it was before the rise in agricultural profit. But the additional profit which it brought the farmer is transformed into rent. In this way, therefore, profit also declines on the better land to the lower rate of industrial profit brought about by the rise in the price of agricultural produce. There is no reason for assuming that as a consequence profits do not have to fall below their original rate if no other modifying circumstances intervene. Other circumstances may, of course, intervene. According to the assumption, after the increase in the price of necessaries, agricultural profit is in any case higher than industrial profit. If, however, as a result of the development of productive power, the part of the workers necessaries supplied by industry has fallen to such a degree that wages (even though they are paid at their average value) do not rise as much as they would have done without the intervention of these paralysing circumstances, proportionally to the increased [price of] agricultural produce; if, furthermore, the same development of productive power has reduced the prices of the products of the extractive industries, and also of agricultural raw materials which are not used as food (although the supposition is not very likely), industrial profit need not fall, though it would be lower than agricultural profit. A decline of the latter as a result of a transfer of capital to agriculture and the building-up of rent, ||805| would only restore the old rate of profit. [Secondly,] Pr vost tries a different approach. Although confused, this is correct according to the population principle . It is however not in line with the assumption that agricultural profits rise until the additional supply required by the population has been produced. If this presupposes a constant increase in the prices of agricultural produce, then it leads not to a decrease in population, but to a general lowering of the rate of profit, hence of accumulation, and, consequently, to a decrease of population. According to the Ricardian-Malthusian view, the population would grow more slowly. But Pr vost s basis is: that the process would depress wages below their average level, this fall in wages and the poverty of the workers causes the price of corn to fall and hence profits to rise again. This latter argument, however, does not belong here, for here it is assumed that the value of labour is always paid; that is, that the workers receive the means of subsistence necessary for their reproduction. This [exposition] of Pr vost is important, because it demonstrates that the Ricardian view along with the view he adopted from Malthus can indeed explain fluctuations in the rate of profit, but cannot explain (constant) falls in the same without repercussions, for upon reaching a certain level the rise in corn prices and the drop in profit would force wages below their level, bringing about a violent decrease in the population, and therefore a fall in the prices of corn and other necessaries, and this would lead again to a rise in profits. ||806| The period between 1820 and 1830 is metaphysically speaking the most important period in the history of English political economy theoretical tilting for and against the Ricardian theory, a whole series of anonymous polemical works, the most important of which are quoted here, especially in relation to those matters which concern our subject. At the same time, however, it is a characteristic of these polemical writings that all of them, in actual fact, merely revolve around the definition of the concept of value and its relation to capital. Observations on certain Verbal Disputes in Political Economy, particularly relating to Value, and to Demand and Supply, London, 1821. This is not without a certain acuteness. The title Verbal Disputes is characteristic. Directed in part against Smith and Malthus, but also against Ricardo. The real sense of this work lies in the following: This kind of scepticism always heralds the dissolution of a theory, it is the harbinger of a frivolous and unprincipled eclecticism designed for domestic use. First of all in relation to Ricardo s theory of value: As far as labour is concerned, the objection to Ricardo is correct insofar as he presents capital as the purchaser of immediate labour and consequently speaks directly of the value of labour, while what is bought and sold is the temporary use of labour-power, itself a product. Instead of the problem being resolved, it is only emphasised here that a problem remains unsolved. It is also quite correct that the value or price of land , which is not produced by labour, appears directly to contradict the concept of value and cannot be derived directly from it. This proposition is [all the more] insignificant when used against Ricardo, since its author does not attack Ricardo s theory of rent in which precisely Ricardo sets forth how the nominal value of land is evolved on the basis of capitalist production and does not contradict the definition of value. The value of land is nothing but the price which is paid for capitalised ground-rent. Much more far-reaching developments have therefore to be presumed here than can be deduced prima facie from the simple consideration of the commodity and its value, just as from the simple concept of productive capital one cannot evolve fictitious capital, the object of gambling on the stock exchange, which is actually nothing but the selling and buying of entitlement to a certain part of the annual tax revenue. The second objection that Ricardo transforms value, which is a relative concept, into an absolute concept is made the chief point of the attack on the whole Ricardian system in another polemical work (written by Bailey), which appeared later. In considering this latter work, we will also cite relevant passages from the Observations. A very pertinent observation about the source from which capital, which pays labour, arises, is contained in an incidental remark unconsciously made by the author, who on the contrary wants to use it to prove what is said in the following sentence not underlined [by me], namely, that the supply of labour itself constitutes a check on the tendency of labour to sink to its natural price. No analysis is possible unless the average price of labour, i.e., the value of labour, is made the point of departure; just as little would it be possible if one failed to take the value of commodities in general as the point of departure. Only on this basis is it possible to understand the real phenomena of price fluctuations. The last passage is based on a misunderstanding. The whole machine enters into the labour process, but only a part of it enters the formation of value. Apart from this, some things in the remark are correct. We start with the commodity, this specific social form of the product, as the foundation and prerequisite of capitalist production. We take individual products and analyse those distinctions of form which they have as commodities, which stamp them as commodities. In earlier modes of production preceding the capitalist mode of production a large part of the output never enters into circulation, is never placed on the market, is not produced as commodities, and does not become commodities. On the other hand, at that time a large part of the products which enter into production are not commodities and do not enter into the process as commodities. The transformation of products into commodities only occurs in individual cases, is limited only to the surplus of products, etc., or only to individual spheres of production (manufactured products), etc. A whole range of products neither enter into the process as articles to be sold, nor arise from it as such. Nevertheless, the prerequisite, the starting-point, of the formation of capital and of capitalist production is the development of the product into a commodity, commodity circulation and consequently money circulation within certain limits, and consequently trade developed to a certain degree. It is as such a prerequisite that we treat the commodity, since we proceed from it as the simplest element in capitalist production. On the other hand, the product, the result of capitalist production, is the commodity. What appears as its element is later revealed to be its own product. Only on the basis of capitalist production does the commodity become the general form of the product and the more this production develops, the more do the products in the form of commodities enter into the process as ingredients. The commodity, as it emerges in capitalist production, is different from the commodity taken as the element, the starting-point of capitalist production. We are no longer faced with the individual commodity, the individual product. The individual commodity, the individual product, manifests itself not only as a real product but also as a commodity, as a part both really and conceptually of production as a whole. Each individual commodity represents a definite portion of capital and of the surplus-value created by it. The value of the capital advanced plus the surplus labour appropriated, for example, a value of 120 (if it is assumed that 100 is the value of the capital and 20 that of surplus labour), is, as far as its value is concerned, contained in the total product let us say, in 1,200 yards of cotton. Each yard, therefore, equals 120/1200 or 1/10 of 1 or 2s. It is not the individual commodity which appears as the result of the process, but the mass of the commodities in which the value of the total capital has been reproduced plus a surplus-value. The total value produced divided by the number of products determines the value of the individual product and it becomes a commodity only as such an aliquot part. It is no longer the labour expended on the individual particular commodity (in most cases, it can no longer be calculated, and may be greater in the case of one commodity than in that of another) but a proportional part of the total labour i.e., the average of the total value [divided] by the number of products which determines the value of the individual product and establishes it as a commodity. Consequently, the total mass of commodities must also be sold, each commodity at its value, determined in this way, in order to replace the total capital together with a surplus-value. If only 800 out of the 1,200 yards were sold, then the capital would not be replaced, still less would there be a profit. But each yard would also have been sold below its value, for its value is determined not in isolation but as an aliquot part of the total product. |808| If you call labour a commodity, it is not like a commodity which is first produced in order to exchange, and then brought to market where it must exchange with other commodities according to the respective quantities of each which there may be in the market at the time; labour is created at the moment it is brought to market; nay, it is brought to market, before it is created (op. cit., pp. 75-76). What is in fact brought to market is not labour, but the labourer. What he sells to the capitalist is not his labour but the temporary use of himself as a working power. This is the immediate object of the contract which the capitalist and the worker conclude, the purchase and sale which they transact. Where payment is for piece-work, task-work, instead of according to the, time for which the labour-power is placed at the disposal of the employer, this is only another method of determining the time. It is measured by the product, a definite quantity of products being considered as a standard representing the socially necessary labour-time. In many branches of industry in London where piece-work is the rule, payment is thus made by the hour, but disputes often arise as to whether this or that piece of work constitutes an hour or not. Irrespective of the individual form, it is the case not only with regard to piece-work, but in general, that, although labour-power is sold on definite terms before its use, it is only paid for after the work is completed, whether it is paid daily, weekly, and so on. Here money becomes the means of payment after it has served previously as an abstract means of purchase, because the nominal transfer of the commodity to the buyer is distinct from the actual transfer. The sale of the commodity labour-power the legal transfer of the use-value and its actual alienation, do not occur at the same time. The realisation of the price therefore takes place later than the sale of the commodity (see the first part of my book, p. 122). It can also be seen that here it is the worker, not the capitalist, who does the advancing, just as in the case of the renting of a house, it is not the tenant but the landlord who advances use-value. The worker will indeed be paid (or at least he may be, if the goods have not been ordered beforehand and so on) before the commodities produced by him have been sold. But his commodity, his labour-power, has been consumed industrially, i.e., has been transferred into the hands of the buyer, the capitalist, before he, the worker, has been paid. And it is not a question of what the buyer of a commodity wants to do with it, whether he buys it in order to retain it as a use-value or in order to sell it again. It is a question of the direct transaction between the first buyer and seller. [Ricardo says in the Principles:] [The author of the Observations makes] the following remark on this passage of Ricardo s: (This is a tacit admission that from the standpoint of the capitalist productive powers of labour mean the smallness of that aliquot part of any produce that goes to those whose manual labour produced it . This sentence is very nice.) (This is silly. Ricardo presupposes capitalist production. He does not investigate whether it develops more freely with fertile or relatively unfertile land. Where it exists, it is most productive where land is most fertile.) Just as the social productive forces, the natural productive forces of labour, that is, those labour finds in inorganic nature, appear as the productive power of capital. (Ricardo himself, in the passage cited above, rightly identifies productive power of labour with labour productive of capital, productive of the wealth that commands labour, not of the wealth that belongs to labour. His expression capital, or the means of employing labour is, in fact, the only one in which he grasps the real nature of capital. He himself is so much the prisoner of a ||809| capitalist standpoint that this conversion, this quid pro quo, is for him a matter of course. The objective conditions of labour created, moreover, by labour itself raw materials and working instruments, are not means employed by labour as its means, but, on the contrary, they are the means of employing labour. They are not employed by labour; they employ labour. For them labour is a means by which they are accumulated as capital, not a means to provide products, wealth for the worker.) (This is the basis of the doctrine of the Physiocrats. The physical basis of surplus-value is this gift of nature , most obvious in agricultural labour, which originally satisfied nearly all human needs. It is not so in manufacturing labour, because the product must first be sold as a commodity. The Physiocrats, the first to analyse surplus-value, understand it in its natural form.) (the fool does not see that where the land is fertile, the part of the price of the produce that goes to the labourer, although it may be small, buys a sufficient quantity of necessaries; the part that goes to the capitalist is great) If the last, concluding passage has any meaning at all, it is that surplus produce in the capitalist sense must be strictly distinguished from the productivity of industry as such. The latter is of interest to the capitalist only insofar as it realises profit for him. Therein lies the narrowness and limitation of capitalist production. Here, one need only say that in this book rent is for the first time regarded as the general form of consolidated surplus profit. ||810| Conversion of revenue into capital is another of these verbal sources of controversy. One man means by it, that the capitalist lays out part of the profits he bas made by his capital, in making additions to his capital, instead of spending it for his private use, as he might else have done: another man means by it, that a person lays out as capital something which he never got as profits, or any capital of his own, but received as rent, wages, salary (op. cit., pp. 83-84). This last passage another of these verbal sources of controversy. One man means by it another man means by it testifies to the method used by this smart alec. An Inquiry into those Principles, respecting the Nature of Demand and the Necessity of Consumption, lately advocated by Mr. Malthus etc., London, 1821. A Ricardian work. Good against Malthus. Demonstrates the infinite narrow-mindedness to which the perspicacity of these fellows is reduced as soon as they examine not landed property, but capital. Nevertheless, it is one of the best of the polemical works of the decade mentioned. First of all, if there has been no increase of production (and of the capital devoted to production) except in the cutlery trade, as is assumed, then the return will not be in a less proportion , but an absolute loss. There are then only three courses open to the cutlery producer. Either he must exchange his increased product as he would have done his smaller product, and his increased production would thus result in a positive loss. Or he must try to get new consumers; if amongst the old circle, this could only be done by withdrawing customers from another trade and shifting his loss upon other shoulders; or he must enlarge his market beyond his former limits; but neither the one nor the other operation depends on his good will; nor on the mere existence of an increased quantity of knives. Or, in the last instance, he must carry over his production to another year and diminish his new supply for that year, which, if his addition of capital did exist not only in additional wages, but in additional fixed capital, will equally result in a loss.[l] Furthermore: If all other capitals have accumulated at the same rate, it does not follow at all that their production has increased at the same rate. But if it has, it does not follow that they want one per cent more of cutlery, as their demand for cutlery is not at all connected, either with the increase of their own produce, or with their increased power of buying cutlery. What follows is merely the tautology: If the increased capital used in each particular branch of production is proportionate to the rate in which the wants of society increase the demand for each particular commodity, then the increase of one commodity se-cures a market for the increased supply of other commodities. Here, therefore, is presupposed 1. capitalist production, in which the production of each particular industry and its increase are not directly regulated and ||811| controlled by the wants of society, but by the productive forces at the disposal of each individual capitalist, independent of the wants of society. 2. It is assumed that nevertheless production is proportional [to the requirements] as though capital were employed in the different spheres of production directly by society in accordance with its needs. On this assumption if capitalist production were entirely socialist production a contradiction in terms no over-production could, in fact, occur. By the way, in the various branches of industry in which the same accumulation of capital takes place (and this too is an unfortunate assumption that capital is accumulated at an equal rate in different spheres), the amount of products corresponding to the increased capital employed may vary greatly, since the productive forces in the different industries or the total use-values produced in relation to the labour employed differ considerably. The same value is produced in both cases, but the quantity of commodities in which it is represented is very different. It is quite incomprehensible, therefore, why industry A, because the value of its output has increased by 1 per cent while the mass of its products has grown by 20 per cent, must find a market in B where the value has likewise increased by 1 per cent, but the quantity of its output only by 5 per cent. Here, the author has failed to take into consideration the difference between use-value and exchange-value. Say s earth-shaking discovery that commodities can only be bought with commodities simply means that money is itself the converted form of the commodity. It does not prove by any means that because I can buy only with commodities, I can buy with my commodity, or that my purchasing power is related to the quantity of commodities I produce. The same value can be embodied in very different quantities [of commodities]. But the use-value consumption depends not on value, but on the quantity. It is quite unintelligible why I should buy six knives because I can get them for the same price that I previously paid for one. Apart from the fact that the workers do not sell commodities, but labour, a great number of people who do not produce commodities at all buy things with money. Buyers and sellers of commodities are not identical. The landlord, the moneyed capitalist and others obtain in the form of money commodities produced by other people. They are buyers without being sellers of commodities . Buying and selling occurs not only between industrial capitalists, but they also sell to workers; and likewise to owners of revenue who are not commodity producers. Finally, the purchases and sales transacted by them as capitalists are very different from the purchases they make as revenue-spenders. (This is very wise. Limited, indeed. Nothing can be demanded which cannot be produced upon demand, or which the demand does not find ready made in the market. Hence, because demand is limited by production, it by no means follows that production is, or was, limited by demand, and can never exceed the demand, particularly the demand at the market price. This is Say-like acumen.) (Ricardo here equates productively and profitably , whereas it is precisely the fact that in capitalist production profitably alone is productively , that constitutes the difference between it and absolute production, as well as its limitations. In order to produce productively , production must be carried on in such a way that the mass of producers are excluded from the demand for a part of the product. Production has to be carried on in opposition to a class ||812| whose consumption stands in no relation to its production since it is precisely in the excess of its production over its consumption that the profit of capital consists. On the other hand, production must be carried on for classes who consume without producing. It is not enough merely to give the surplus product a form in which it becomes an object of demand for these classes. On the other hand, the capitalist himself, if he wishes to accumulate, must not himself consume as much of his own products, insofar as they are consumer goods, as he produces. Otherwise he cannot accumulate. That is why Malthus opposes to the capitalist classes whose task is not accumulation but expenditure. And while on the one hand all these contradictions are assumed, it is assumed on the other that production proceeds without any friction just as if these contradictions did not exist at all. Purchase is divorced from sale, commodity from money, use-value from exchange-value. It is assumed however that this separation does not exist, but that there is barter. Consumption and production are separated; [there are] producers who do not consume and consumers who do not produce. It is assumed that consumption and production are identical. The capitalist directly produces exchange-value in order to increase his profit, and not for the sake of consumption. It is assumed that he produces directly for the sake of consumption and only for it. [If it is] assumed that the contradictions existing in bourgeois production which, in fact, are reconciled by a process of adjustment which, at the same time, however, manifests itself as crises, violent fusion of disconnected factors operating independently of one another and yet correlated if it is assumed that the contradictions existing in bourgeois production do not exist, then these contradictions obviously cannot come into play. In every industry each individual capitalist produces in proportion to his capital irrespective of the needs of society and especially irrespective of the supply of competing capitalists in the same industry. It is assumed that he produces as if he were fulfilling orders placed by society. If there were no foreign trade, then luxuries could be produced at home, whatever their cost. In that case, labour, with the exception of [the branches producing] necessaries, would, in actual fact, be very unproductive. Hence accumulation of capital [would proceed at a low rate]. Thus every country would be able to employ all the capital accumulated there, since according to the assumption very little capital would have been accumulated.) Ricardo says indeed that all capital in a given country, at whatever rate accumulated, may be employed profitably; on the other hand he says that the very fact of the accumulation of capital checks its profitable employment, because it must result in lessening profits, that is, the rate of accumulation. This is indeed the secret basis of glut. This Ricardian, following Ricardo s example, recognises correctly crises resulting from sudden changes in the channels of trade. This was the case in England after the war of 1815. And consequently, whenever a crisis occurred, all later economists declared that the most obvious cause of the particular crisis was the only possible cause of all crises. The author also admits that the credit system may be a cause of crises (p. 81 et seq.) (as if the credit system itself did not arise out of the difficulty of employing capital productively , i.e., profitably ). The English, for example, are forced to lend their capital to other countries in order to create a market for their commodities. Over-production, the credit system, etc., are means by which capitalist production seeks to break through its own barriers and to produce over and above its own limits. Capitalist production, on the one hand, has this driving force; on the other hand, it only tolerates production commensurate with the profitable employment of existing capital. Hence crises arise, which simultaneously drive it onward and beyond [its own limits] and force it to put on seven-league boots, in order to reach a development of the productive forces which could only be achieved very slowly within its own limits. What the author writes about Say is very true. This should be dealt with in connection with Say (see p. 134, notebook VII). (Namely capital. Very fine that it comes to the same thing whether the capitalist owns the whole produce and pays part of it as wages to the labourer, or whether the labourer leaves, makes over to the capitalist part of his (the labourer s) produce.) This is very fine. If, as a consequence of the development of labour productivity, capital accumulates so quickly that the demand for labour increases wages and the worker works for a shorter time gratis for the capitalist and shares to some degree in the benefits of his more productive labour the capitalist makes him a present . The same author demonstrates in great detail that high wages are bad, a discouragement for workers, although, speaking of the landlords, he considers that low profit is a discouragement for the capitalists (see p. 13, notebook XII). Against Say. (Notebook XII, p. 12.) ||814| Profits do not depend on price, they depend on price compared with outgoings (op. cit., p. 28). Dialogues of Three Templars on Political Economy, chiefly in relation to the Principles of Mr. Ricardo (London Magazine, Vol. IX, 1824) (author: Thomas De Quincey). Attempt at a refutation of all the attacks made on Ricardo. That he is aware of what is at issue is to be seen from this sentence: In this work, the inadequacies of the Ricardian view are often pointedly set forth, although the dialectical depth is more affected than real. The real difficulties, which arise not out of the determination of value, but from Ricardo s inadequate elaboration of his ideas on this basis, and from his arbitrary attempt to make concrete relations directly fit the simple relation of value, are in no way resolved or even grasped. But the work is characteristic of the period in which it appeared. It shows that in political economy consistency and thinking were still taken seriously at that time. (A later work by the same author: The Logic of Political Economy, Edinburgh, 1844, is weaker.) De Quincey very clearly outlines the differences between the Ricardian view and those which preceded it, and does not seek to mitigate them by re-interpretation or to abandon the essential features of the problems in actual fact while retaining them in a purely formal, verbal way as happened later on, thus opening the door wide to easy-going, unprincipled eclecticism. One point in the Ricardian doctrine which is especially emphasised by De Quincey and which should be mentioned here because it plays a role in the polemic against Ricardo to which we shall refer below, is that the command which one commodity has over other commodities (its purchasing power; in fact, its value expressed in terms of another commodity) is altogether different from its real value. A Critical Dissertation on the Nature, Measures, and Causes of Value; chiefly in Reference to the Writings of Mr. Ricardo and his Followers. By the Author of Essays on the Formation and Publication of Opinions (Samuel Bailey), London, 1825. This is the main work directed against Ricardo. (Also aimed against Malthus.) It seeks to overturn the foundation of the doctrine value. It is definitely worthless except for the definition of the measure of value , or rather, of money in this function. Compare also the same author s: A Letter to a Political Economist; occasioned by an Article in the Westminster Review on the Subject of Value etc., London, 1826. Since, as has been mentioned,[n] this work basically agrees with Observations on certain Verbal Disputes in Political Economy, it is here necessary to add the relevant passages from these Observations. The author of the Observations accuses Ricardo of having transformed value from a relative attribute of commodities in their relationship to one another, into something absolute. The only thing that Ricardo can be accused of in this context is that, in elaborating the concept of value, he does not clearly distinguish between the various aspects, between the exchange-value of the commodity, as it manifests itself, appears in the process of commodity exchange, and the existence of the commodity as value as distinct from its existence as an object, product, use-value. ||815| It is said in the Observations: Before dealing with this author, we shall add the following about Ricardo. In his chapter on Value and Riches , he argues that social wealth does not depend on the value of the commodities produced, although this latter point is decisive for every individual producer. It should have been all the more clear to him that a mode of production whose exclusive aim is surplus-value, in other words, which is based on the relative poverty of the mass of the producers, cannot possibly be the absolute form of the production of wealth, as he constantly asserts. Now to the Observations of the verbal wiseacre. If all commodities except one increase in value because they cost more labour-time than they did before, smaller amounts of these commodities will be exchanged for the single commodity whose labour-time remains unchanged. Its exchange-value, insofar as it is realised in other commodities that is, its exchange-value expressed in the use-values of all other commodities has been reduced. Would you then say that the value of that one is unaltered? This is merely a formulation of the point at issue, and it calls neither for a positive nor for a negative reply. The same result would occur if the labour-time required for the production of the one commodity were reduced and that of all the others remained unchanged. A given quantity of this particular commodity would exchange for a reduced quantity of all the other commodities. The same phenomenon occurs in both cases although from directly opposite causes. Conversely, if the labour-time required for the production of commodity A remained unchanged, while that of all others were reduced, then it would exchange for larger amounts of all the other commodities. The same would happen for the opposite reason, if the labour-time required for the production of commodity A increased and that required for all other commodities remained unchanged. Thus, sometimes commodity A exchanges for smaller quantities of all the other commodities, and this for either of two different and opposite reasons. At other times it exchanges for larger quantities of all the other commodities, again for two different and opposite reasons. But it should be noted that it is assumed that it always exchanges at its value, consequently for an equivalent. It always realises its value in the quantity of use-values of the other commodities for which it exchanges, no matter how much the quantity of these use-values varies. From this it obviously follows: that the rate at which commodities exchange for one another as use-values, although it is an expression of their value, their realised value, is not their value itself, since the same proportion of value can be represented by quite different quantities of use-values. Value as an aspect of the commodity is not expressed in its own use-value, or in its existence as use-value. Value manifests itself when commodities are expressed in other use-values, that is, it manifests itself in the rate at which these other use-values are exchanged for them. If one ounce of gold equals a ton of iron, that is, if a small quantity of gold exchanges for a large quantity of iron, is therefore the value of the gold expressed in iron greater than the value of the iron expressed in gold? That commodities exchange for one another in proportion to the labour embodied in them, means that they are equal, alike, insofar as they constitute the same quantity of labour. Consequently it means likewise that every commodity, considered in itself, is something different from its own use-value, ||816| from its own existence as use-value. The value of the same commodity can, without changing, be expressed in infinitely different quantities of use-values, always according to whether I express it in the use-value of this or of that commodity. This does not alter the value, although it does alter the way it is expressed. In the same way, all the various quantities of different use-values in which the value of commodity A can be expressed, are equivalents and are related to one another not only as values, but as equal values, so that when these very unequal quantities of use-value replace one another, the value remains completely unchanged, as if it had not found expression in quite different use-values. When commodities are exchanged in the proportion in which they represent equal amounts of labour-time, then it is their aspect as materialised labour-time, as embodied labour-time, which manifests their substance, the identical element they contain. As such, they are qualitatively the same, and differ only quantitatively, according to whether they represent smaller or larger quantities of the same substance, i.e., labour-time. They are values as expressions of the same element; and they are equal values, equivalents, insofar as they represent an equal amount of labour-time. They can only be compared as magnitudes, because they are already homogeneous magnitudes, qualitatively identical. It is as manifestations of this substance that these different things constitute values and are related to one another as values; their different magnitudes of value, their immanent measure of value are thus also given. And only because of this can the value of a commodity be represented, expressed, in the use-values of other commodities as its equivalents. Hence the individual commodity as value, as the embodiment of this substance, is different from itself as use-value, as an object, quite apart from the expression of its value in other commodities. As the embodiment of labour-time, it is value in general, as the embodiment of a definite quantity of labour-time, it is a definite magnitude of value. It is therefore typical of our wiseacre when he says: If we mean that, we do not mean that and vice versa. Our meaning has nothing at all to do with the essential character of the thing we consider. If we speak of the value in exchange of a thing, we mean in the first instance of course the relative quantities of all other commodities that can be exchanged for the first commodity. But, on further consideration, we shall find that for the proportion, in which one thing exchanges for an infinite mass of other things which have nothing in common with it and even if there are natural or other similarities between those things, they are not considered in the exchange for the proportion to be a fixed proportion, all those various heterogeneous things must be considered as proportionate representations, expressions of the same common unity, [of] an element quite different from their natural existence or appearance. We shall furthermore find, that if our views have any sense, the value of a commodity is something which not only distinguishes it from or relates it to other commodities, but is a quality differentiating it from its own existence as a thing, a value in use.[o] To estimate the value of A, a book for instance, in B, coals, and C, wine, A, B and C must be as value something different from their existence as books, coals or wine. To estimate the value of A in B, A must have a value independent of the estimation of that value in B, and both must be equal to a third thing expressed in both of them. It is quite wrong to say that the value of a commodity is thereby transformed from something relative into something absolute. On the contrary, as a use-value, the commodity appears as something independent. On the other hand, as value it appears as something merely contingent, something merely determined by its relation to socially necessary, equal, simple labour-time. It is to such an extent relative that when the labour-time required for its reproduction changes, its value changes, although the labour-time really contained in the commodity has remained unaltered. ||817| How deeply our wiseacre has sunk into fetishism and how he transforms what is relative into something positive, is demonstrated most strikingly in the following passage: Riches here are use-values. These, as far as men are concerned, are, of course, riches, but it is through its own properties, its own qualities, that a thing is a use-value and therefore an element of wealth for men. Take away from grapes the qualities that make them grapes, and their use-value as grapes disappears for men and they cease to be an element of wealth for men. Riches which are identical with use-values are properties of things that are made use of by men and which express a relation to their wants. But value is supposed to be a property of things . As values, commodities are social magnitudes, that is to say, something absolutely different from their properties as things . As values, they constitute only relations of men in their productive activity. Value indeed implies exchanges , but exchanges are exchanges of things between men, exchanges which in no way affect the things as such. A thing retains the same properties whether it be owned by A or by B. In actual fact, the concept value presupposes exchanges of the products. Where labour is communal, the relations of men in their social production do not manifest themselves as values of things . Exchange of products as commodities is a method of exchanging labour, [it demonstrates] the dependence of the labour of each upon the labour of the others [and corresponds to] a certain mode of social labour or social production. In the first part of my book, I mentioned that it is characteristic of labour based on private exchange that the social character of labour manifests itself in a perverted form as the property of things; that a social relation appears as a relation between things (between products, values in use, commodities). This appearance is accepted as something real by our fetish-worshipper, and he actually believes that the exchange-value of things is determined by their properties as things, and is altogether a natural property of things. No scientist to date has yet discovered what natural qualities make definite proportions of snuff tobacco and paintings equivalents for one another. Thus he, the wiseacre, transforms value into something absolute, a property of things , instead of seeing in it only something relative, the relation of things to social labour, social labour based on private exchange, in which things are defined not as independent entities, but as mere expressions of social production. But to say that value is not an absolute, is not conceived as an entity, is quite different from saying that commodities must impart to their exchange-value a separate expression which is different from and independent of their use-value and of their existence as real products, in other words, that commodity circulation is bound to evolve money. Commodities express their exchange-value in money, first of all in the price, in which they all present themselves as materialised forms of the same labour, as only quantitatively different expressions of the same substance. The fact that the exchange-value of the commodity assumes an independent existence in money is itself the result of the process of exchange, the development of the contradiction of use-value and exchange-value embodied in the commodity, and of another no less important contradiction embodied in it, namely, that the definite, particular labour of the private individual must manifest itself as its opposite, as equal, necessary, general labour and, in this form, social labour. The representation of the commodity as money implies not only that the different magnitudes of commodity values are measured by expressing the va1ues in the use-value of one exclusive commodity, but at the same time that they are all expressed in a form in which they exist as the embodiment of social labour and are therefore exchangeable for every other commodity, that they are translatable at will into any use-value desired. Their representation as money in the price therefore appears first only as something nominal, a representation which is realised only through actual sale. Ricardo s mistake is that he is concerned only with the magnitude of value. Consequently his attention is concentrated on ||818| the relative quantities of labour which the different commodities represent, or which the commodities as values embody. But the labour embodied in them must be represented as social labour, as alienated individual labour. In the price this representation is nominal; it becomes reality only in the sale. This transformation of the labour of private individuals contained in the commodities into uniform social labour, consequently into labour which can be expressed in all use-values and can be exchanged for them, this qualitative aspect of the matter which is contained in the representation of exchange-value as money, is not elaborated by Ricardo. This circumstance the necessity of presenting the labour contained in commodities as uniform social labour, i.e., as money is overlooked by Ricardo. For its part, the development of capital already presupposes the full development of the exchange-value of commodities and consequently its independent existence as money. The point of departure in the process of the production and circulation of capital, is the independent form of value which maintains itself, increases, measures the increase against the original amount, whatever changes the commodities in which it manifests itself may undergo, and quite irrespective of whether it presents itself in the most varied use-values and moves from commodity to commodity. The relation between the value antecedent to production and the value which results from it capital as antecedent value is capital in contrast to profit constitutes the all-embracing and decisive factor in the whole process of capitalist production. It is not only an independent expression of value as in money, but dynamic value, value which maintains itself in a process in which use-values pass through the most varied forms. Thus in capital the independent existence of value is raised to a higher power than in money. From this we can judge the wisdom of our verbal wiseacre, who treats the independent existence of exchange-value as a figure of speech, a manner of talking, a scholastic invention. The fact that the value which has become independent acquires only a relative expression in money, because money itself is a commodity, and hence has a changeable value, makes no difference but is a shortcoming which arises from the nature of the commodity and the necessity of expressing its exchange-value, as distinct from its use-value. Our author has made it abundantly clear that he does not know this. This is shown by the kind of criticism which would like to talk out of existence the difficulties innate in the contradictory functions of things themselves, by declaring them to be the result of reflexions or of conflicting definitions. To begin with, this is a fine definition, If 3 lbs. of coffee exchange for 1 lb. of tea today or would do so tomorrow, it does not at all mean that equivalents have been exchanged for each other. According to this, a commodity could always be exchanged only at its value, for its value would constitute any quantity of some other commodity for which it had been accidentally exchanged. This, however, is not what people generally mean, when they say that 3 lbs. of coffee have been exchanged for their equivalent in tea. They assume that after, as before, the exchange, a commodity of the same value is in the hands of either of the exchangers. The rate at which two commodities exchange does not determine their value, but their value determines the rate at which they exchange. If value were nothing more than the quantity of commodities for which commodity A is accidentally exchanged, how is it possible to express the value of A in terms of commodity B, or C, etc.? Because ||819| then, since there is no immanent measure common to the two commodities, the value of A could not be expressed in terms of B before it had been exchanged against B. Relative value means first of all magnitude of value in contradistinction to the quality of having value at all. For this reason, the latter is not something absolute. It means, secondly, the value of one commodity expressed in the use-value of another commodity. This is only a relative expression of its value, namely, in relation to the commodity in which it is expressed. The value of a pound of coffee is only relatively expressed in tea; to express it absolutely even in a relative way, that is to say, not in regard to labour-time, but to other commodities it ought to be expressed in an infinite series of equations with all other commodities. This would be an absolute expression of its relative value; its absolute expression would be its expression in terms of labour-time and this absolute expression would express it as something relative, but in the absolute relation, by which it is value. Let us now turn to Bailey. His book has only one positive merit that he was the first to give a more accurate definition of the measure of value, that is, in fact, of one of the functions of money, or money in a particular, determinate form. In order to measure the value of commodities to establish an external measure of value it is not necessary that the value of the commodity in terms of which the other commodities are measured, should be invariable. (It must on the contrary be variable, as I have shown in the first part, because the measure of value is, and must be, a commodity since otherwise it would have no immanent measure in common with other commodities.) If, for example, the value of money changes, it changes to an equal degree in relation to all other commodities. Their relative values are therefore expressed in it just as correctly as if the value of money had remained unchanged. The problem of finding an invariable measure of value is thereby eliminated. But this problem itself (the interest in comparing the value of commodities in different historical periods, is, indeed, not an economic interest as such, [but] an academic interest) arose out of a misunderstanding and conceals a much more profound and important question. Invariable measure of value signifies primarily a measure of value which is itself of invariable value, and consequently, since value itself is a predicate of the commodity, a commodity of invariable value. For example, if gold and silver or corn, or labour, were such commodities, then it would be possible to establish, by comparison with them, the rate at which other commodities are exchanged for them, that is, to measure exactly the variations in the values of these other commodities by their prices in gold, silver, or corn, or their relation to wages. Stated in this way, the problem therefore presupposes from the outset that in the measure of value we are dealing simply with the commodity in which the values of all other commodities are expressed, whether it be the commodity by which they are really represented i.e., money, the commodity which functions as money or a commodity which, because its value remains invariable, would function as the money in terms of which the theoretician makes his calculations. It thus becomes evident that in this context it is in any case a question only of a kind of money which as the measure of value either theoretically or practically would itself not be subject to changes in value. But for commodities to express their exchange-value independently in money, in a third commodity, the exclusive commodity, the values of commodities must already be presupposed. Now the point is merely to compare them quantitatively. A homogeneity which makes them the same makes them values which as values makes them qualitatively equal, is already presupposed in order that their value and their differences in value can be represented in this way. For example, if all commodities express their value in gold, then this expression in gold, their gold price, their equation with gold, is an equation on the basis of which it is possible to elucidate and compute their value relation to one another, for they are now expressed as different quantities of gold and in this way the commodities are represented in their prices, ||820| as comparable magnitudes of the same common denominator. But in order to be represented in this way, the commodities must already be identical as values. Otherwise it would be impossible to solve the problem of expressing the value of each commodity in gold, if commodity and gold or any two commodities as values were not representations of the same substance, capable of being expressed in one another. In other words, this presupposition is already implicit in the problem itself. Commodities are already presumed as values, as values distinct from their use-values, before the question of representing this value in a special commodity can arise. In order that two quantities of different use-values can be equated as equivalents, it is already presumed that they are equal to a third, that they are qualitatively equal and only constitute different quantitative expressions of this qualitative equality. The problem of an invariable measure of value was simply a spurious name for the quest for the concept, the nature, of value itself, the definition of which could not be another value, and consequently could not be subject to variations as value. This was labour-time, social labour, as it presents itself specifically in commodity production. A quantity of labour has no value, is not a commodity, but is that which transforms commodities into values, it is their common substance; as manifestations of it commodities are qualitatively equal and only quantitatively different. They [appear] as expressions of definite quantities of social labour-time. Let us assume that gold has an invariable value. If the value of all commodities were then expressed in gold one could measure variations in the values of commodities by their gold prices. But in order to express the value of commodities in gold, commodities and gold must be identical as values. Gold and commodities can only be considered to be identical as definite quantitative expressions of this value, as definite magnitudes of value. The invariable value of gold and the variable value of the other commodities would not prevent them, as value, from being the same, [Consisting of] the same substance. Before the invariable value of gold can help us to make a step forward, the value of commodities must first be expressed, assessed, in gold that is, gold and commodities must be represented as equivalents, as expressions of the same substance. {In order that the commodities may be measured according to the quantity of labour embodied in them and the measure of the quantity of labour is time the different kinds of labour contained in the different commodities must be reduced to uniform, simple labour, average labour, ordinary, unskilled labour. Only then can the amount of labour embodied in them be measured according to a common measure, according to time. The labour must be qualitatively equal so that its differences become merely quantitative, merely differences of magnitude. This reduction to simple, average labour is not, however, the only determinant of the quality of this labour to which as a unity the values of the commodities are reduced. That the quantity of labour embodied in a commodity is the quantity socially necessary for its production the labour-time being thus necessary labour-time is a definition which concerns only the magnitude of value. But the labour which constitutes the substance of value is not only uniform, simple, average labour; it is the labour of a private individual represented in a definite product. However, the product as value must be the embodiment of social labour and, as such, be directly convertible from one use-value into all others. (The particular use-value in which labour is directly represented is irrelevant so that it can be converted from one form into another.) Thus the labour of individuals has to be directly represented as its opposite, social labour; this transformed labour is, as its immediate opposite, abstract, general labour, which is therefore represented in a general equivalent, only by its alienation does individual labour manifest itself as its opposite. The commodity, however, must have this general expression before it is alienated. This necessity to express individual labour as general labour is equivalent to the necessity of expressing a commodity as money. The commodity receives this expression insofar as the money serves as a measure and expresses the value of the commodity in its price. It is only through sale, through its real transformation into money, that the commodity acquires its adequate expression as exchange-value. The first transformation is merely a theoretical process, the second is a real one. ||821| Thus, in considering the existence of the commodity as money, it is not only necessary to emphasise that in money commodities acquire a definite measure of their value since all commodities express their value in the use-value of the same commodity but that they all become manifestations of social, abstract, general labour; and as such they all possess the same form, they all appear as the direct incarnation of social labour and as such they all act as social labour, that is to say, they can be directly exchanged for all other commodities in proportion to the size of their value; whereas in the hands of the people whose commodities have been transformed into money, they exist not as exchange-value in the form of a particular use-value, but as use-value (gold, for example) which merely represents exchange-value. A commodity may be sold either below or above its value. This is purely a matter of the magnitude of its value. But whenever a commodity is sold, transformed into money, its exchange-value acquires an independent existence, separate from its use-value. The commodity now exists only as a certain quantity of social labour-time, and it proves that it is such by being directly exchangeable for any commodity whatsoever and convertible (in proportion to its magnitude) into any use-value whatsoever. This point must not be overlooked in relation to money any more than the formal transformation undergone by the labour a commodity contains as its element of value. But an examination of money of that absolute exchangeability which the commodity possesses as money, of its absolute effectiveness as exchange-value which has nothing to do with the magnitude of value shows that it is not quantitatively, but qualitatively determined and that as a result of the very process through which the commodity itself passes, its exchange-value becomes independent, and is really represented as a separate aspect alongside its use-value as it is already nominally in its price. This shows, therefore, that the verbal observer understands as little of the value and the nature of money as Bailey, since both regard the independent existence of value as a scholastic invention of economists. This independent existence becomes even more evident in capital, which, in one of its aspects, can be called value in process and since value only exists independently in money, it can accordingly be called money in process, as it goes through a series of processes in which it preserves itself, departs from itself, and returns to itself increased in volume. It goes without saying that the paradox of reality is also reflected in paradoxes of speech which are at variance with common sense and with what vulgarians mean and believe they are talking of. The contradictions which arise from the fact that on the basis of commodity production the labour of the individual presents itself as general social labour, and the relations of people as relations between things and as things these contradictions are innate in the subject-matter, not in its verbal expressions.} Ricardo often gives the impression, and sometimes indeed writes, as if the quantity of labour is the solution to the false, or falsely conceived problem of an invariable measure of value in the same way as corn, money, wages, etc., were previously considered and advanced as panaceas of this kind, In Ricardo s work this false impression arises because for him the decisive task is the definition of the magnitude of value. Because of this he does not understand the specific form in which labour is an element of value, and fails in particular to grasp that the labour of the individual must present itself as abstract general labour and, in this form, as social labour. Therefore he has not understood that the development of money is connected with the nature of value and with the determination of this value by labour-time. Bailey s book has rendered a good service insofar as the objections he raises help to clear up the confusion between measure of value expressed in money as a commodity along with other commodities, and the immanent measure and substance of value. But if he had analysed money as a measure of value , not only as a quantitative measure but as a qualitative transformation of commodities, he would have arrived at a correct analysis of value. Instead of this, he contents himself with a mere superficial consideration of the external measure of value which already presupposes value and remains rooted in a purely frivolous approach to the question. ||822| There are, however, occasional passages in Ricardo in which he directly emphasises that the quantity of labour embodied in a commodity constitutes the immanent measure of the magnitude of its value, of the differences in the amount of its value, only because labour is the factor the different commodities have in common, which constitutes their uniformity, their substance, the intrinsic foundation of their value. The thing however he failed to investigate is the specific form in which labour plays that role. All commodities can be reduced to labour as their common element. What Ricardo does not investigate is the specific form in which labour manifests itself as the common element of commodities. That is why he does not understand money. That is why in his work the transformation of commodities into money appears to be something merely formal, which does not penetrate deeply into the very essence of capitalist production. He says however: only because labour is the common factor of commodities, only because they are all mere manifestations of the same common element, of labour, is labour their measure. It is their measure only because it forms their substance as values. Ricardo does not sufficiently differentiate between labour insofar as it is represented in use-values or in exchange-value. Labour as the foundation of value is not any particular labour, with particular qualities. Ricardo continuously confuses the labour which is represented in use-value and that which is represented in exchange-value. It is true that the latter species of labour is only the former species expressed in an abstract form. By real value, Ricardo, in the passage cited above, understands the commodity as the embodiment of a definite amount of labour-time. By relative value, he understands the labour-time the commodity contains expressed in the use-values of other commodities. Now to Bailey. Bailey clings to the form in which the exchange-value of the commodity as commodity appears, manifests itself. It manifests itself in a general form when it is expressed in the use-value of a third commodity, in which all other commodities likewise express their value a commodity which serves as money that is, in the money price of the commodity. It manifests itself in a particular form when the exchange-value of any particular commodity is expressed in the use-value of any other, that is, as the corn price, cotton price, etc. In actual fact, the exchange-value of the commodity always appears, manifests itself with regard to other commodities, only in the quantitative relationship in which they exchange. The individual commodity as such cannot express general labour-time, or it can only express it in its equation with the commodity which constitutes money, in its money price. But then the value of commodity A is always expressed in a certain quantity of the use-value of the commodity which functions as money. This is how matters appear directly. And Bailey clings to this. The most superficial form of exchange-value, that is the quantitative relationship in which commodities exchange with one another, constitutes, according to Bailey, their value. The advance from the surface to the core of the problem is not permitted. He even forgets the simple consideration that if y yards of linen equal x lbs. of straw, this [implies] a parity between two unequal things linen and straw making them equal magnitudes. This existence of theirs as things that are equal must surely be different ||823| from their existence as straw and linen. It is not as straw and linen that they are equated, but as equivalents. The one side of the equation must, therefore, express the same value as the other. The value of straw and linen must, therefore, be neither straw nor linen, but something common to both and different from both commodities considered as straw and linen. What is it? He does not answer this question. Instead, he wanders off into all the categories of political economy in order to repeat the same monotonous litany over and over again, namely, that value is the exchange relation of commodities and consequently is not anything different from this relation. His entire wisdom is, in fact, contained in this passage. If value is nothing but power of purchasing (a very fine definition since purchasing presupposes not only value, but the representation of value as money ), it denotes , etc. However let us first clear away from Bailey s proposition the absurdities which have been smuggled in. Purchasing means transforming money into commodities. Money already presupposes value and the development of value. Consequently, out with the expression purchasing first of all. Otherwise we are explaining value by value. Instead of purchasing we must say exchanging against other objects . It is quite superfluous to say that there must be something to purchase . If the object was to be consumed by its producers as a use-value, if it was not merely a means of appropriating other objects, not a commodity , then obviously there could be no question of value. First, it is a matter of objects. But then the relation in which two objects stand to each other is transformed into the relation in which two objects stand to each other as exchangeable commodities . After all, the objects stand only in relation of exchange or as exchangeable objects to each other. That is why they are commodities , which is something different from objects . On the other hand, the relation of exchangeable commodities is either nonsense, since not exchangeable objects are not commodities, or Mr. Bailey has beaten himself. The objects are not to be exchanged in any arbitrary proportion, but are to be exchanged as commodities, that is, they are to stand to one another as exchangeable commodities, that is, as objects each of which has a value, and which are to be exchanged with one another in proportion to their equivalence. Bailey thereby admits that the rate at which they are exchanged, that is, the power of each of the commodities to purchase the other, is determined by its value, but this value however is not determined by this power, which is merely a corollary. If we strip the passage of everything that is wrong, nonsensical or smuggled in, then it will read like this. But wait: we must dispose of yet another snare and piece of nonsense. We have two sorts of expression. An object s power of exchanging, etc. (since the term purchasing is unjustified and makes no sense without the concept of money), and the relation in which an object exchanges with others. If power is to be regarded as something different from relation , then one ought not to say that power of exchanging is merely the relation , etc. If it is meant to be the same thing, then it is confusing to describe the same thing with two different expressions which have nothing in common with each other. The relation of a thing to another is a relation of the two things and cannot be said to belong to either. Power of a thing, on the contrary, is something intrinsic to the thing, although this, its intrinsic quality, may only ||824| manifest itself in its relation to other things. For instance, power of attraction is a power of the thing itself although that power is latent so long as there are no things to attract. Here an attempt is made to represent the value of the object as something intrinsic to it, and yet as something merely existing as a relation . That is why Bailey uses first the word power and then the word relation . Accurately expressed it would read as follows: Nobody will contest this tautology. What follows from it, by the way, is that the value of an object denotes nothing . For example, 1 lb. of coffee=4 lbs. of cotton. What then is the value of 1 lb. of coffee? 4 lbs. of cotton. And of 4 lbs. of cotton? 1 lb. of coffee, Since the value of 1 lb. of coffee is 4 lbs. of cotton, and, on the other hand, the value of 4 lbs. of cotton is 1 lb. of coffee, then it is clear that the value of 1 lb. of coffee is 1 lb. of coffee (since 4 lbs. of cotton=1 lb. of coffee), a=b, b=a, hence a=a. What arises from this explanation is, therefore, that the value of a use-value is equal to a [certain] quantity of the same use-value. Consequently, the value of 1 lb. of coffee is nothing else than 1 lb. of coffee. If 1 lb. of coffee=4 lbs. of cotton, then it is clear that 1 lb. of coffee > 3 lbs. of cotton and 1 lb. of coffee < 5 lbs. of cotton. To say that 1 lb. of coffee > 3 lbs. of cotton and < 5 lbs. of cotton, expresses a relation between coffee and cotton just as well as saying that 1 lb. of coffee=4 lbs. of cotton. The symbol = does not express any more of a relation than does the symbol > or the symbol <, but simply a different relation. Why is it then precisely the relation represented by the sign of equality, by =, which expresses the value of the coffee in cotton and that of the cotton in coffee? Or is this sign of equality the result of the fact that these two amounts exchange for one another at all? Does this sign = merely express the fact of exchange? It cannot be denied that if coffee exchanges for cotton in any proportion whatever, they are exchanged for one another, and if the mere fact of their exchange constitutes the relation between the commodities, then the value of the coffee is equally well expressed in cotton whether it exchanges for 2, 3, 4 or 5 lbs. of cotton. But what is then the word relation supposed to mean? Coffee in itself has no intrinsic positive quality which determines the rate at which it exchanges for cotton. It is not a relation which is determined by any kind of determinant intrinsic to coffee and separate from real exchange. What is then the purpose of the word relation ? What is the relation? The quantity of cotton against which a quantity of coffee is exchanged. Then one could not speak of a relation in which it exchanges but only of a relation in which it is or has been exchanged. For if the relation were determined before the exchange, then the exchange would be determined by the relation and not the relation by the exchange. We must therefore drop the relation as signifying something which stands over and above the coffee and the cotton and is distinct from them. [Thus the passage from Bailey cited above takes the following form:] As a commodity, a commodity can only express its value in other commodities, since general labour-time does not exist for it as a commodity. [Bailey believes that] if the value of one commodity is expressed in another commodity, the value of one commodity is nothing apart from this equation with another commodity. Bailey flaunts this piece of wisdom tirelessly and all the more tiresomely. As he conceives it, it is a tautology, for he says [in essence]: If the value of any commodity is nothing but its exchange relation with another commodity, it is nothing apart from this relation. He reveals his philosophical profundity in the following passage: If[p] a thing is distant from another, the distance is in fact a relation between the one thing and the other; but at the same time, the distance is something different from this relation between the two things. It is a dimension of space, it is a certain length which may as well express the distance of two other things besides those compared. But this is not all. If we speak of the distance as a relation between two things, we presuppose something intrinsic , some property of the things themselves, which enables them to be distant from each other. What is the distance between the syllable A and a table? The question would be nonsensical. In speaking of the distance of two things, we speak of their difference in space. Thus we suppose both of them to be contained in space, to be points of space. Thus we equalise them as being both existences of space, and only after having them equalised sub specie spatii[q] we distinguish them as different points of space. To belong to space is their unity.* But what is this unity of objects exchanged against each other? This exchange is not a relation which exists between them as natural things. It is likewise not a relation which they bear as natural things to human needs, for it is not the degree of their utility that determines the quantities in which they exchange. What is therefore their identity, which enables them to be exchanged in certain proportions for one another? As what do they become exchangeable? In fact, in all this Bailey merely follows the author of the Verbal Observations. This again simply means that the expression of the value of one commodity in another commodity can only change as such an expression. And the expression as such presupposes not one but two commodities. Mr. Bailey is of the opinion that if one were to consider only two commodities in exchange with one another one would automatically discover the mere relativity of value, in his sense. The fool. As if it were not just as necessary to say, in connection with [two] commodities which exchange with one another two products which are related to one another as commodities in what they are identical, as it would be in the case of a thousand. For that matter, if only two products existed, the products would never become commodities, and consequently the exchange-value of commodities would never evolve either. The necessity for the labour in product I to manifest itself as social labour would not arise. Because the product is not produced as an immediate object of consumption for the producers, but only as a bearer of value, as a claim, so to speak, to a certain quantity of all materialised social labour, all products as values are compelled to assume a form of existence distinct from their existence as use-values, And it is this development of the labour embodied in them as social labour, it is the development of their value, which determines the formation of money, the necessity for commodities to represent themselves in respect of one another as money which means merely as independent forms of existence of exchange-value and they can only do this by setting apart one commodity from the mass of commodities, and all of them measuring their values in the use-value of this excluded commodity, thereby directly transforming the labour embodied in this exclusive commodity into general, social labour. Mr. Bailey, with his queer way of thinking which only grasps the surface appearance of things, concludes on the contrary: Only because, besides commodities, money exists, and we are so used to regarding the value of commodities not in their relation to one another but as a relation to a third, as ||826| a third relation distinct from the direct relation, is the concept of value evolved and consequently value is transformed from the merely quantitative relation in which commodities are exchanged for one another into something independent of this relation (and this, he thinks, transforms the value of commodities into something absolute, into a scholastic entity existing in isolation from the commodities). According to Bailey, it is not the determination of the product as value which leads to the establishment of money and which expresses itself in money, but it is the existence of money which leads to the fiction of the concept of value. Historically it is quite correct that the search for value is at first based on money, the visible expression of commodities as value, and that consequently the search for the definition of value is (wrongly) represented as a search for a commodity of invariable value , or for a commodity which is an invariable measure of value . Since Mr. Bailey now demonstrates that money as an external measure of value and expression of value has fulfilled its purpose, even though it has a variable value, he thinks he has done away with the question of the concept of value which is not affected by the variability of the magnitudes of value of commodities and that in fact it is no longer necessary to attribute any meaning at all to value. Because the representation of the value of a commodity in money in a third, exclusive commodity does not exclude variation in the value of this third commodity, because the problem of an invariable measure of value disappears, the problem of the determination of value itself disappears. Bailey carries on this insipid rigmarole for hundreds of pages, with great self-satisfaction. The following passages, in which he constantly repeats the same thing, are, in part, illicitly copied from the Verbal Disputes . (As impossible as it is to designate or express a thought except by a quantity of syllables. Hence Bailey concludes that a thought is syllables.) We can see why it is so important for Bailey to limit value to two commodities, to understand it as the relation between two commodities, But a difficulty now arises: (what is in this context the purpose of the relation ||827| of exchange ? Why not its exchange ? But at the same time exchange is intended to express a definite relation, not merely the fact of exchange, Hence value is equal to relation in exchange) Here we have it. Value equals price. There is no difference between them. And there is no intrinsic difference between money price and any other expression of price, although it is the money price and not the cloth price, etc., which expresses the nominal value, the general value of the commodity. But although the commodity has a thousand different kinds of value, or a thousand different prices, as many kinds of value as there are commodities in existence, all these thousand expressions always express the same value. The best proof of this is that all these different expressions are equivalents which not only can replace one another in this expression, but do replace one another in exchange itself. This relation of the commodity, with the price of which we are concerned, is expressed in a thousand different relations in exchange to all the different commodities and yet always expresses the same relation. Thus this relation, which remains the same, is distinct from its thousand different expressions, or value is different from price, and the prices are only expressions of value: money price is its general expression, other prices are particular expressions. It is not even this simple conclusion that Bailey arrives at. In this context Ricardo is not a fictionist but Bailey is a fetishist in that he conceives value, though not as a property of the individual object (considered in isolation), but as a relation of objects to one another, while it is only a representation in objects, an objective expression, of a relation between men, a social relation, the relationship of men to their reciprocal productive activity. [Bailey says the following about the value of labour.] This is a justified criticism of Ricardo s mistake of making capital exchange directly with labour instead of with labour-power. It is the same objection which we have already come across in another form.[s] Nothing else. Bailey s comparison cannot be applied to labour-power. It is not cloth, but an organic product such as mutton, that he ought to compare with living lab our-power. Apart from the labour involved in tending live-stock and that required for the production of their food, the labour required for their production is not to be understood as meaning the labour which they themselves perform in the act of consumption, the act of eating, drinking, in short, the appropriation of those products or means of subsistence. It is just the same with labour-power. [What does] the labour required for its production consist of? Apart from the labour involved in developing a person s labour power, his education, his apprenticeship and this hardly arises in relation to unskilled labour its reproduction costs no labour apart from that involved in the reproduction of the means of subsistence which the labourer consumes. The appropriation of these means of subsistence is not labour . ||828| Any more than the labour contained in the cloth, in addition to the labour of the weaver and the labour which is contained in the wool, the dye-stuff, etc., comprises the chemical or physical action of the wool in absorbing the dye-stuff, etc., an action which corresponds to the appropriation of the means of subsistence by the worker or the cattle. Bailey then seeks to invalidate Ricardo s law that the value of labour and profit stand in inverse proportion to one another. He seeks, moreover, to invalidate that part of it which is correct. Like Ricardo, he identifies surplus-value with profit. He does not mention the one possible exception to this law, namely, when the working-day is lengthened and workers and capitalists share equally in that prolongation, but even then, since the value of the working power will be consumed more quickly in fewer years the surplus-value rises at the expense of the working-man s life, and his working power depreciates in comparison with the surplus-value it yields to the capitalist. Bailey s reasoning is most superficial. Its starting-point is his conception of value. The value of the commodity is the expression of its value in a certain quantity of other values in use (the use-value of other commodities). The value of labour is thus equal to the quantity of other commodities (use-values) for which it is exchanged. (The real problem, how it is possible to express the value in exchange of A in the value in use of B does not even occur to him.) So long, therefore, as the worker receives the same quantity of commodities, the value of labour remains unchanged, because, as before, it is expressed in the same quantity of other useful things. Profit, on the other hand, expresses a relation to capital, or else to the total product. The portion received by the worker can, however, remain the same although the proportion received by the capitalist rises if the productivity of labour increases. It is not clear why, in dealing with capital, we suddenly come to a proportion and of what use this proportion is supposed to be to the capitalist, since the value of what he receives is determined not by the proportion, but by its expression in other commodities . The point he makes here has, in fact, already been mentioned by Malthus.[t] Wages are equal to a quantity of use-values. Profit, on the other hand, is (but Bailey must avoid saying so) a relation of value. If I measure wages according to use-value and profit according to exchange-value, it is quite evident that neither an inverse nor any other kind of relation exists between them, because I should then be comparing incommensurable magnitudes, things which have nothing in common. But what Bailey says here about the value of labour applies according to his principle to the value of every other commodity as well. It is nothing but a certain quantity of other things exchanged against it. If I receive 20 lbs. of twist for 1, then [according to this theory] the value of the 1 always remains the same, and will therefore be always paid, although the labour required to produce 1 lb. of twist can on one occasion be double that required on another. The most ordinary merchant does not believe that he is getting the same value for his 1 when he receives 1 quarter of wheat for it in a period of famine and the same amount in a period of glut. But the concept of value ends here. And there remains only the unexplained and inexplicable fact that a quantity of A is exchanged against a quantity of B in an arbitrary proportion. And whatever that proportion may be it is an equivalent. Even Bailey s formula, the value of A expressed in B, thus becomes quite meaningless. If the value of A is expressed in B, the same value is supposed to be expressed, at one time in A, and at another time in B, so that, when it is expressed in B, the value of A remains the same as it was before. But according to Bailey there is no value of A that could be expressed in B, because neither A nor B have a value apart from that expression. The value of A expressed in B must be something quite different from the value of A in C, as different as B and C are. It is not the same value, identical in both expressions, but there are two relations of A which have nothing in common with each other, and of which it would be nonsense to say that they are equivalent expressions.[u] ||829| a rise or fall of labour implies an increase or decrease in the quantity of the commodity given in exchange for it (op. cit., p. 62). Nonsense! [From Bailey s standpoint] there can be no rise or fall in the value of labour, nor in the value of any other thing. For one A I get today 3 Bs, tomorrow 6 Bs and the day after tomorrow 2 Bs. But [according to Bailey] in all these cases the value of A is nothing but the quantity of B for which it has been exchanged. It was 3 Bs, it is now 6 Bs. How can its value be said to have risen or fallen? The A expressed in 3 Bs had a different value from that expressed in 6 Bs or 2 Bs. But then it is not the identical A which at the identical time has been exchanged for 3 or 2 or 6 Bs. The identical A at the identical time has always been expressed in the same quantity of B. It is only with regard to different moments of time that it could be said the value of A had changed. But it is only with contemporaneous commodities that A can be exchanged, and it is only the fact (not even the mere possibility of exchange) of exchange with other commodities which makes [according to Bailey] A a value. It is only the actual relation in exchange which constitutes its value; and the actual relation in exchange can of course only take place for the same A at the identical time. Bailey therefore declares the comparison of commodity values at different periods to be nonsense. But at the same time he should also have declared the rise or fall of value which is impossible if there is no comparison between the value of a commodity at one time and its value at another time to be nonsense and consequently, also, the rise or fall in the value of labour . (Thus when corn becomes dearer, the value of labour falls because less corn is exchanged for it. On the other hand, if cloth becomes cheaper at the same time, the value of labour rises simultaneously, because more cloth can be exchanged for it. Thus the value of labour both rises and falls at the same time and the two expressions of its value in corn and in cloth are not identical, not equivalent, because its increased value cannot be equal to its reduced value.) (Accordingly it can also be said of every other commodity that a rise in its value does not imply a fall in the value of the other commodity with which it exchanges, nay, may even imply a rise in value on the other side. For instance, supposing the same labour which produced 1 quarter of corn, now produces 3 quarters. The 3 quarters cost 1, as the one quarter did before. If 2 quarters are now exchanged for 1, the value of money has risen, because it is expressed in 2 quarters instead of one. Thus the purchaser of corn gets a greater value for his money. But the seller who sells for 1 what has cost him only 2/3 [of 1] gains 1/3. And thus the value of his corn has risen at the same time that the money price of corn has fallen.) (And so would the 3/4 of the produce accruing to the labourer, if estimated in labour.) (and that given to the labourers would command the labour of 6 men) (Likewise the 225 quarters falling to the 6 men would still command 6 men and no more.) (Why does the almighty Bailey then forbid Ricardo to estimate the portion of the men, as well as that of the capitalist, in labour, and compare their mutual value as expressed in labour?) (How can he speak of the value of profits and an increase in their value, if profit does not denote an article which can be exchanged against other articles (see above) and, consequently, denotes no value ? And, on the other hand, is a rise in the proportion which went to the capitalist possible without a fall in the proportion that goes to the labourer?) (And is this increase in the power of the capitalist to appropriate the labour of others not exactly identical with the decrease in the power of the labourer to appropriate his own labour?) (This is just what Ricardo says. The proportion of both cannot increase, and if the portion of both increases, it cannot increase in the same proportion, as otherwise portion and proportion would be identical. The proportion of the one cannot increase without that of the other decreasing. However, that Mr. Bailey calls the portion of the labourer value of wages , and the proportion [of the capitalist] value of profits , in other words, that the same commodity has two values for him, one in the hands of the labourer, and the other in the hands of the capitalist, is nonsense of his own.) (because here we understand by value a certain quantity of articles) (because here we understand by value the same articles not estimated by their quantity, but by the labour worked up in them) (that is, because of the absurd use of two measures, in the one case articles, in the other case the value of the same articles) This absurd argument against Ricardo is quite ||831| futile since he merely declares that the value of the two portions must rise and fall in inverse proportion to one another. It merely amounts to a repetition by Bailey of his proposition that value is the quantity of articles exchanged for an article. In dealing with profit he was bound to find himself in an embarrassing position. For here, the value of capital is compared with the value of the product. Here he seeks refuge in taking value to mean the value of an article estimated in labour (in the Malthusian manner). Consequently, as has been stated, value can neither rise nor fall, for this always involves comparing the value of a commodity at one time with its value at another. A commodity cannot be sold below its value any more than above it, for its value is what it is sold for. Value and market price are identical. In fact one cannot speak either of contemporary commodities, or of present values, but only of past ones. What is the value of 1 quarter of wheat? The 1 for which it was sold yesterday. For its value is only what one gets in exchange for it, and as long as it is not exchanged, its relation to money is only imaginary. But as soon as the exchange has been transacted, we have 1 instead of the quarter of wheat and we can no longer speak of the value of the quarter of wheat. In comparing values at different periods, Bailey has in mind merely academic researches into the different values of commodities, for example in the eighteenth and the sixteenth centuries. There the difficulty arises from the fact that the same monetary expression of value owing to the vicissitudes of the value of money itself denotes different values [at different times]. The difficulty here lies in reducing the money price to value. But what a fool he is! Is it not a fact that, in the process of circulation or the process of reproduction of capital, the value of one period is constantly compared with that of another period, an operation upon which production itself is based? Mr. Bailey does not understand at all what the expressions to determine the value of commodities by labour-time or by the value of labour mean. He simply does not understand the difference. The determination of the value of commodities by the value of another commodity (and insofar as they are determined by the value of labour , they are determined by another commodity; for value of labour presupposes labour as a commodity) and its determination by a third entity, which has neither value nor is itself a commodity, but is the substance of value, and that which turns products into commodities, are for Bailey identical. In the first case, it is a question of a measure of the value of commodities, that is, in fact, of money, of a commodity in which the other commodities express their value. In order that this can happen, the values of the commodities must already be presupposed. The commodity which measures as well as that to be measured must have a third element in common. In the second case, this identity itself is first established; later it is expressed in the price, either money price or any other price. Bailey identifies the invariable measure of value with the search for an immanent measure of value, that is, the concept of value itself. So long as the two are confused it is even a reasonable instinct which leads to the search for an invariable measure of value . Variability is precisely the characteristic of value. The term invariable expresses the fact that the immanent measure of value must not itself be a commodity, a value, but rather something which constitutes value and which is therefore also the immanent measure of value. Bailey demonstrates ||832| that commodity values can find a monetary expression and that, if the value relation of commodities is given, all commodities can express their value in one commodity, although the value of this commodity may change. But it nevertheless always remains the same for the other commodities at a given time, since it changes simultaneously in relation to all of them. From this he concludes that no value relation between commodities is necessary nor is there any need to look for one. Because he finds it reflected in the monetary expression, he does not need to understand how this expression becomes possible, how it is determined, and what in fact it expresses. These remarks, in general, apply to Bailey as they do to Malthus, since he believes that one is concerned with the same question, on the same plane, whether one makes quantity of labour or value of labour the measure of value. In the latter case, one presupposes the values whose measure is being sought, that is to say, their external measure, their representation as value. In the first case one investigates the genesis and immanent nature of value itself. In the second, the development of the commodity into money or the form which exchange-value acquires in the process of the exchange of commodities. In the first, we are concerned with value, independent of this representation, or rather antecedent to this representation. Bailey has this in common with the other fools: to determine the value of commodities means to find their monetary expression, an external measure of their value. They say, however, impelled by an instinctive thought, that this measure then must have invariable value, and must itself therefore stand outside the category of value, whereas Bailey says that one does not need to understand it, since one does in fact find the expression of value in practice, and this expression itself has and can have variable value without prejudice to its function. In particular, he himself has informed us that 100, 200 or 300 quarters can be the product of the labour of 6 men, that is, of the same quantity of labour, whereas value of labour only means for him the portion of the 100, 200 or 300 quarters which the 6 men receive. This could be 50, 60 or 70 quarters per man. The quantity of labour and the value of the same quantity of labour are therefore, according to Bailey himself, very different expressions. And how can it be the same if the value is expressed first in one thing and then in something essentially different? If the same labour which formerly produced 3 quarters of corn now produces 1 quarter, while the same labour which formerly produced 20 yards of cloth (or 3 quarters of corn) still produces 20 yards, then, reckoned according to labour-time, 1 quarter of corn is now equal to 20 yards of cloth, or 20 yards of cloth to 1 quarter of corn, and 3 quarters of corn equal 60 yards of cloth instead of 20. Thus the values of the quarter of corn and the yard of linen have been altered relatively. But they have by no means been altered according to the value of labour, for 1 quarter of corn and 20 yards of cloth remain the same use-values as before. And it is possible that 1 quarter of corn does not command a larger quantity of labour than before. If we take a single commodity, then Bailey s assertion makes no sense whatever. If the labour-time required for the production of shoes decreases and now only one-tenth of the labour-time formerly required is necessary, then the value of shoes drops to one-tenth of the former value; and this also holds true when the shoes are compared with, or expressed in, other commodities, provided the labour required for their production has remained the same or has not decreased at the same rate. Nevertheless, the value of labour for example the daily wage in shoemaking as well as in all other industries may have remained the same; or it may even have increased. Less labour is contained in the individual shoe, hence also less paid labour. But when one speaks of the value of labour, one does not mean that for one hour s labour, i.e., for a smaller quantity of labour, less is paid than for a greater quantity. Bailey s proposition could have meaning only in relation to the total product of capital. Suppose 200 pairs of shoes are the product of the same capital (and the same labour) which formerly produced 100 pairs. In this case, the value of the 200 pairs is the same as [previously] that of 100 pairs. And it could be said that the 200 pairs of shoes are to 1,000 yards of linen (say the product of 200 of capital) as the value of the labour set in motion by the two amounts of capital. In what sense? In the sense in which it would also apply ||833| to the relation of the individual shoe to the single yard of linen? The value of labour is the part of the labour-time contained in a commodity which the worker himself appropriates; it is the part of the product in which the labour-time which belongs to the worker himself is embodied. If the entire value of a commodity is reduced to paid and unpaid labour-time and if the rate of unpaid to paid labour is the same, that is, if surplus-value constitutes the same proportion of total value in all commodities then it is clear that if the ratio of one commodity to another is proportional to the total quantity of labour they contain, they must also represent equal proportionate parts of these total quantities of labour, and their ratio must therefore also be as that of the paid labour-time in one commodity to the paid labour-time in the other. C [commodity]: C =TLT (total labour-time [embodied in C]) to TLT (total labour-time [embodied in C ]). TLT/x= the paid labour-time in C, and TLT /x= the paid labour-time in C , since it is presupposed that the paid labour-time in both commodities constitutes the same proportional part of the total labour-time. C:C =TLT : TLT TLT : TLT = TLT/x:TLT /x therefore C : C =TLT/x : TLT /x or the commodities are to one another as the quantities of paid labour-time contained in them, that is, as the values of the labour contained in them. The value of labour is then, however, not determined in the way Bailey would like, but by the labour-time [contained in the commodity]. Further, disregarding the conversion of values into prices of production and considering only the values themselves, capitals consist of different proportions of variable and constant capital. Hence, as far as values are concerned, the surplus-values are not equal, or the paid labour does not form the same proportion of the total labour advanced. In general, wages or values of labour would here be indices of the values of commodities, not as values, not insofar as wages rise or fall, but insofar as the quantity of paid labour represented by wages contained in a commodity would be an index of the total quantity of the labour contained in the corresponding commodities. In a word, the point is that, if the values of commodities are to one another as LT to LT (the amounts of labour-time contained in them), then their ratio is likewise as LT/x to LT /x, i.e., the amounts of paid labour-time embodied in them, if the proportion of the paid labour-time to the unpaid is the same in all commodities, that is, if the paid labour-time is always equal to the total labour-time, whatever this may be, divided by x. But the if does not correspond to the real state of affairs. Supposing that the workers in different industries work the same amount of surplus labour-time, the relation of paid to actually employed labour-time is nevertheless different in different industries, because the ratio of immediate labour employed to accumulated labour employed is different. [Let us take two capitals consisting] for example, the one of 50v [variable] and 50c [constant] and the other of 10v and 90c. In both cases, let the unpaid labour amount to one-tenth. [The value of] the first commodity would accordingly be 105, [of] the second 101. The paid labour-time would be equal to one-half of the labour advanced in the first case, and only to one-tenth in the second. ||834|Bailey says: In this last phrase, Bailey stumbles unconsciously on a real objection to Ricardo, who directly identifies profit with surplus-value and values with cost-prices. Correctly stated, it is-if the commodities are sold at their value, they yield unequal profits, for then profit is equal to the surplus-value embodied in them. And this is correct. But this objection does not refer to the theory of value, but to a blunder of Ricardo s in applying this theory. How little Bailey himself, in the above passage, can have correctly understood the problem, is shown in the following statement: Ricardo on the other hand maintains that labour may rise and fall in value without affecting the value of the commodity. This is obviously a very different proposition from the other, and depends in fact on the falsity of the other, or on the contrary proposition (loc. cit., p. 81). The fool himself previously asserted that the result of the same labour may be 100, 200 or 300 quarters [of corn]. This determines the relation of a quarter to other commodities irrespective of the changing value of labour, that is, irrespective of how much of the 100, 200 or 300 quarters falls to the labourer himself. The fool would have shown some consistency if he had said: the values of labour may rise or fall, nevertheless the values of commodities are as the values of labour, because according to a false assumption the rise or fall of wages is general, and the value of wages always forms the same proportionate part of the total quantity of labour employed. [Bailey says:] <Indeed not! but it has much to do with first finding the value, before expressing it; finding in what way the values in use, so different from each other, fall under the common category and denomination of value, so that the value of one commodity may be expressed in the other> <If the values of different commodities are expressed in the same third commodity, however variable its value may be, it is of course very easy to compare these expressions, which already have a common denomination.> <the difficulty consists in equating A with a portion of B; and this is only possible if there exists a common element for A and B, or if A and B are different representations of the same element. If all commodities are to be expressed in gold, or money, the difficulty remains the same. There must be an element common to gold and to each of the other commodities> But how [is it possible] to express A in B or C? In order to express them in each other, or, what amounts to the same thing, to treat them as equivalent expressions of the same unity, A, B, C must all be considered as something different from what they are as things, as products, as values in use. A=4 B. Then the value of A is expressed in 4 B, and the value of 4 B in A, so that both sides express the same. They are equivalents. They are both equal expressions of value. It would be the same if they were unequal ones or A greater than 4 B, A smaller than 4 B. In all these cases they are, insofar ||835| as they are values, only different or equal in quantity, but they are always quantities of the same quality. The difficulty is to find this quality. <for example, in order to compare a triangle with any of the other polygons it is only necessary to transform the latter into triangles, to express them in triangles. But to do this the triangle and the polygon are in fact supposed to be something identical, different figures of the same thing space> We have the fellow here. We find the values measured, expressed in the prices. We can therefore [asserts Bailey] content ourselves with not knowing what value is. He confuses the development of the measure of value into money and further the development of money as the standard of price with the discovery of the concept of value itself in its development as the immanent measure of commodities in exchange. He is right in thinking that this money need not be a commodity of invariable value; from this he concludes that no separate determination of value independent of the commodity itself is necessary. As soon as the value of commodities, as the element they have in common, is given, the measurement of their relative value and the expression of this value coincide. But we can never arrive at the expression so long as we do not find the common factor, which is different from the immediate existence of the commodities. This is shown by the very example he gives, the distance between A and B.[v] When one speaks of their distance one already presupposes that they are points (or lines) in space. Having been reduced to points, and points of the same line, their distance may be expressed in inches, or feet, etc. The element the two commodities A and B have in common is, at first sight, their exchangeability. They are exchangeable objects. As exchangeable objects they are magnitudes of the same denomination. But this their existence as exchangeable objects must be different from their existence as values in use. What is it? Money is already a representation of value, and presupposes it. As the standard of price money, for its part, already presupposes the (hypothetical) transformation of the commodity into money. If the values of all commodities are represented in money prices, then one can compare them, they are in fact already compared. But for the value to be represented as price, the value of commodities must have been expressed previously as money. Money is merely the form in which the value of commodities appears in the process of circulation. But how can one express x cotton in y money? This question resolves itself into this how is it at all possible to express one commodity in another, or how to present commodities as equivalents? Only the elaboration of value, independent of the representation of one commodity in another, provides the answer. It is a mistake that the relation of value can exist between commodities at different periods, which is in the nature of the case impossible; and if no relation exists there can be no measurement of it (op. cit., p. 113). We have already had the same nonsense before.[w] The relation of value between commodities at different periods already exists when money acts as means of payment. The whole circulation process is a perpetual comparison of values of commodities at different periods. Money has this function to perform as means of payment and as treasure. All this is simply copied from the verbal observer and in fact the secret of the whole nonsense oozes out in the following phrase which has also convinced me that the Verbal Observations,[y] which were very carefully concealed by Bailey, were used by him in the manner of a plagiarist. ||836| Riches are the attribute of men, value is the attribute of commodities. A man or a community is rich; a pearl or a diamond is valuable (op. cit., p. 165). A pearl or a diamond is valuable as a pearl or a diamond, that is, by their qualities, as values in use for men, that is, as riches. But there is nothing in a pearl or a diamond by which a relation of exchange between them is given, etc. Bailey now becomes a profound philosopher: Difference between labour as cause and measure, and in general between cause and measure of value (op. cit., p. 170 et seq.).[z] There is, in actual fact, a very significant difference (which Bailey does not notice) between measure (in the sense of money) and cause of value . The cause of value transforms use-values into value. The external measure of value already presupposes the existence of value. For example, gold can only measure the value of cotton if gold and cotton as values possess a common factor which is different from both. The cause of value is the substance of value and hence also its immanent measure. This in fact means nothing more than: the cause of the value of a commodity or of the fact that two commodities are equivalent are the circumstances which cause the seller, or perhaps both the buyer and the seller, to consider something to be the value or the equivalent of a commodity. The circumstances which determine the value of a commodity are by no means further elucidated by being described as circumstances which influence the mind of those engaging in exchange, as circumstances which, as such, likewise exist (or perhaps they do not, or perhaps they are incorrectly conceived) in the consciousness of those engaging in exchange. These same circumstances (independent of the mind, but influencing it), which compel the producers to sell their products as commodities circumstances which differentiate one form of social production from another provide their products with an exchange-value which (also in their mind) is independent of their use-value. Their mind , their consciousness, may be completely ignorant of, unaware of the existence of, what in fact determines the value of their products or their products as values. They are placed in relationships which determine their thinking but they may not know it. Anyone can use money as money without necessarily understanding what money is. Economic categories are reflected in the mind in a very distorted fashion. He [Bailey] transfers the problem into the sphere of consciousness, because his theory has got stuck. Instead of explaining what he himself understands by value (or cause of value ) Bailey tells us that it is something which buyers and sellers imagine in the act of exchange. In fact, however, the following considerations are the basis of the would-be philosophical proposition. 1) The market price is determined by various circumstances which express themselves in the relation of demand and supply and which, as such, influence the mind of the operators on the market. This is a very important discovery! 2) In connection with the conversion of commodity values into cost-prices, various circumstances are taken into account which as reasons for compensation influence the mind or are reflected in the mind. All these reasons for compensation, however, affect only the mind of the capitalist as capitalist and stem from the nature of capitalist production itself, and not from the subjective notions of buyers and sellers. In their mind they exist rather as self-evident eternal truths . Like his predecessors, Bailey catches hold of Ricardo s confusion of values and cost-prices in order to prove that value is not determined by labour, because cost-prices are deviations from values. Although this is quite correct in relation to Ricardo s identification [of values with cost-prices], it is incorrect as far as the question itself is concerned. In this context, Bailey quotes first from Ricardo himself about the change in the relative values of ||837| commodities in consequence of a rise in the value of labour. He quotes further the effect of time (different times of production though the labour-time remains unchanged), the same case which aroused scruples in Mill.[aa] He does not notice the real general contradiction the very existence of an average rate of profit, despite the different composition of capital [in different industries], its different times of circulation, etc. He simply repeats the particular forms in which the contradiction appears, and which Ricardo himself and his followers had already noticed. Here he merely echoes what has been previously said but does not advance criticism a step forward. He emphasises further that the costs of production are the main cause of value , and therefore the main element in value. However, he stresses correctly as was done [by other writers] after Ricardo that the concept of production costs itself varies. He himself in the last analysis expresses his agreement with Torrens that value is determined by the capital advanced, which is correct in relation to cost-prices but meaningless if it is not evolved on the basis of value itself, that is, if the value of a commodity is to be derived from a more developed relationship, the value of capital, and not the other way round. His last objection is this: The value of commodities cannot be measured by labour-time if the labour-time in one trade is not the same as in the others, so that the commodity in which, for example, 12 hours of an engineer s labour is embodied has perhaps twice the value of the commodity in which 12 hours of the labour of an agricultural labourer is embodied. What this amounts to is the following: A simple working-day, for example, is not a measure of value if there are other working-days which, compared with days of simple labour, have the effect of composite working-days. Ricardo showed that this fact does not prevent the measurement of commodities by labour-time if the relation between unskilled and skilled labour is given. He has indeed not described how this relation develops and is determined. This belongs to the definition of wages, and, in the last analysis, can be reduced to the different values of labour power itself, that is, its varying production costs (determined by labour-time). The passages in which Bailey expresses what has been summarised above are: (This is the factor which determines Torrens s views. The labour which the capitalist employs, costs him nothing apart from the capital he lays out in wages.) [Bailey raises the following objections] to the determination of the value of commodities simply by the quantity of labour contained in them: With reference to 2: Take any two commodities of equal value, A and B, one produced by fixed capital and the other by labour, without the intervention of machinery; and suppose, that without any change whatever in the fixed capital or the quantity of labour, there should happen to be a rise in the value of labour; according to Mr. Ricardo s own showing, A and B would be instantly altered in their relation to each other; that is, they would become unequal in value (pp. 215-16). Finally Mr. Bailey remarks, and this is the only new contribution he makes in this respect: This remark is correct. But monopoly does not concern us here, where we are dealing with two things only, value and cost-price. It is clear that the conversion of value into cost-price works in two ways. First, the profit which is added to the capital advanced may be either above or below the surplus-value which is contained in the commodity itself, that is, it may represent more or less unpaid labour than the commodity itself contains. This applies to the variable part of capital and its reproduction in the commodity. But apart from this, the cost-price of constant capital or of the commodities which enter into the value of the newly produced commodity as raw materials, auxiliary materials and machinery [or] labour conditions may likewise be either above or below its value. Thus the commodity comprises a portion of the price which differs from value, and this portion is independent of the quantity of labour newly added, or of the labour whereby these conditions of production with given cost-prices are transformed into a new product. It is clear that what applies to the difference between the cost-price and the value of the commodity as such as a result of the production process likewise applies to the commodity insofar as, in the form of constant capital, it becomes an ingredient, a pre-condition, of the production process. Variable capital, whatever difference between value and cost-price it may contain, is replaced by a certain quantity of labour which forms a constituent part of the value of the new commodity, irrespective of whether its price expresses its value correctly or stands above or below the value. On the other hand, the difference between cost-price and value, insofar as it enters into the price of the new commodity independently of its own production process, is incorporated into the value of the new commodity as an antecedent element. The difference between the cost-price and the value of the commodity is thus brought about in two ways: by the difference between the cost-price and the values of commodities which constitute the pre-conditions of the process of production of the new commodity; by the difference between the surplus-value which is really added to the conditions of production and the profit which is calculated [on the capital advanced]. But every commodity which enters into another commodity as constant capital, itself emerges as the result, the product, of another production process. And so the commodity appears alternately as a pre-condition for the production of other commodities and as the result of a process in which the existence of other commodities is the pre-condition for its own production. In agriculture (cattle-breeding), the same commodity appears at one point of time as a product and at another as a condition of production. This important deviation of cost-prices from values brought about by capitalist production does not alter the fact that cost-prices continue to be determined by values. ||840| McCulloch, the vulgariser of Ricardian political economy and simultaneously the most pitiful embodiment of its decline. He vulgarises not only Ricardo but also James Mill. He is moreover a vulgar economist in everything and an apologist for the existing state of affairs. His only fear, driven to ridiculous extremes, is the tendency of profit to fall; he is perfectly contented with the position of the workers, and in general, with all the contradictions of bourgeois economy which weigh heavily upon the working class. Here everything is green. He even knows that In this question he deviates from Ricardo, and in his later writings, he also becomes very mealy-mouthed about the landowners. But his whole tender anxiety is reserved for the poor capitalists, in view of the tendency of the rate of profit to fall. Mr. McCulloch, unlike other exponents of science, seems to look not for characteristic differences, but only for resemblances; and proceeding upon this principle, he is led to confound material with immaterial objects; productive with unproductive labour; capital with revenue; the food of the labourer with the labourer himself; production with consumption; and labour with profits [cc] (T. R. Malthus, Definitions in Political Economy, London, 1827, pp. 69-70). McCulloch says [in a note] on page 221 of his Principles of Political Economy: This is a brilliant example of the methods used by this arch-humbug of a Scotsman. The arguments of Malthus, Bailey, etc., compel him to differentiate between real value and exchangeable or relative value. But he does so, basically, in the way he finds the difference dealt with by Ricardo. Real value means the commodity examined with regard to the labour required for its production; relative value implies the consideration of the proportions of different commodities which can be produced in the same amount of time, which are consequently equivalents, and the value of one of which can therefore be expressed in the quantity of use-value of the other which costs the same amount of labour-time. The relative value of commodities, in this Ricardian sense, is only another expression for their real value and means nothing more than that the commodities exchange with one another in proportion to the labour-time embodied in them, in other words, that the labour-time embodied in both is equal. If, therefore, the market price of a commodity is equal to its exchange-value (as is the case when supply and demand are in equilibrium), then the commodity bought contains as much labour as that which is sold. It merely realises its exchange-value, or it is only sold at its exchange-value when one receives the same amount of labour in exchange for it as one hands over. McCulloch relates all this, correctly repeating what has already been said. But he goes too far here since the Malthusian definition of exchange-value the quantity of wage-labour which a commodity commands already sticks in his throat. He therefore defines relative value as the quantity of labour, or of any other commodity, for which it (a commodity) will exchange . Ricardo, in dealing with relative value, always speaks only of commodities and does not include labour, since in the exchange of commodities a profit is only realised because in the exchange between commodity and labour unequal quantities of labour are exchanged. By putting the main emphasis right at the beginning of his book on the fact that the determination of the value ||841| of a commodity by the labour-time embodied in it differs immensely from the determination of this value by the quantity of labour which it can buy, Ricardo, on the one hand, establishes the difference between the quantity of labour contained in a commodity and the quantity of labour which it commands. On the other hand, he excludes the exchange of commodity and labour from the relative value of a commodity. For if a commodity is exchanged for a commodity, equal quantities of labour are exchanged; but if a commodity is exchanged for labour, unequal quantities of labour are exchanged, and capitalist production rests on the inequality of this exchange. Ricardo does not explain how this exception fits in with the concept of value. This is the reason for the arguments amongst his followers. But his instinct is sound when he makes the exception. (In actual fact, there is no exception; it exists only in his formulation.) Thus McCulloch goes farther than Ricardo and is apparently more consistent than he. There is no flaw in his system; it is all of a piece. Whether a commodity is exchanged for a commodity or for labour, this ratio of exchange is the relative value of the commodity. And if the commodities exchanged are sold at their value (i.e., if demand and supply coincide), this relative value is always the expression of the real value. That is, there are equal quantities of labour at both poles of the exchange. Thus in the ordinary state of things a commodity only exchanges for a quantity of wage-labour equal to the quantity of labour contained in it. The workman receives in wages just as much materialised labour as he gives back to capital in the form of immediate labour. With this the source of surplus-value disappears and the whole Ricardian theory collapses. Thus Mr. McCulloch first destroys it under the appearance of making it more consistent. And what next? He then flits shamelessly from Ricardo to Malthus, according to whom the value of a commodity is determined by the quantity of labour which it buys and which must always be greater than that which the commodity itself contains. The only difference is that in Malthus this is plainly stated to be what it is, opposition to Ricardo, and Mr. McCulloch adopts this opposite viewpoint after he has adopted the Ricardian formula with an apparent consistency (that is, with the consistency of incogitancy) which destroys the whole sense of the Ricardian theory. McCulloch therefore does not understand the essential kernel of Ricardo s teaching how profit is realised because commodities exchange at their value and abandons it. Since exchangeable value which in the ordinary state of the market is, according to McCulloch, equal to the real value but in point of fact is always greater, since profit is based on this surplus (a fine contradiction and a fine discourse based on a point of fact ) is the quantity of labour, or of any other commodity , for which the commodity is exchanged, hence what applies to labour applies to any other commodity . This means that the commodity is not only exchanged for a greater amount of immediate labour than it itself contains, but for more materialised labour in the other commodities than it itself contains; in other words, profit is profit upon expropriation and with this we are back again amongst the Mercantilists. Malthus draws this conclusion. With McCulloch this conclusion follows naturally but with the pretence that this constitutes an elaboration of the Ricardian system. And this total decline of the Ricardian system into twaddle a decline which prides itself on being its most consistent exposition has been accepted by the mob, especially by the mob on the Continent (with Herr Roscher naturally amongst them), as the conclusion of the Ricardian system carried too far, to its extreme limit; they thus believe Mr. McCulloch that the Ricardian mode of coughing and spitting , which he uses to conceal his helpless, thoughtless and unprincipled eclecticism, is in fact a scientific attempt to set forth Ricardo s system consistently. McCulloch is simply a man who wanted to turn Ricardian economics to his own advantage an aim in which he succeeded in a most remarkable degree. In the same way Say used Smith, but Say at least made a contribution by bringing Smith s theories into a certain formal order and, apart from misconceptions, he occasionally also ventured to advance theoretical objections. Since McCulloch first obtained a professorial chair in London on account of Ricardian economics, in the beginning he had to come forward as a Ricardian and especially to participate in the struggle against the landlords. As soon as he had obtained a foothold and climbed to a position on Ricardo s shoulders, ||842| his main effort was directed to expounding political economy, especially Ricardian economics, within the framework of Whiggism and to eliminate all conclusions which were distasteful to the Whigs. His last works on money, taxes, etc., are mere pleas on behalf of the Whig Cabinet of the day. In this way the man secured lucrative jobs. His statistical writings are merely catch-penny efforts. The incogitant decline and vulgarisation of the theory likewise reveal the fellow himself as a vulgarian, a matter to which we shall have to return before we have done with that speculating Scotsman. In 1828 McCulloch published Smith s Wealth of Nations, and the fourth volume of this edition contains his own notes and dissertations in which, to pad out the volume, he reprints in part some mediocre essays which he had published previously, e.g., on entail , and which have absolutely nothing to do with the matter, and in part, his lectures on the history of political economy repeated almost verbatim; he himself says that he largely draws upon them ; in part, however, he tries in his own way to assimilate the new ideas advanced in the interim by Mill and by Ricardo s opponents. In his Principles of Political Economy, Mr. McCulloch presents us with nothing more than a copy of his notes and dissertations which he had already copied from his earlier scattered manuscripts . But things turned out slightly worse in the Principles, for inconsistencies are of less importance in notes than in an allegedly methodical treatment. Thus the passages quoted above, though they are, in part, taken verbatim from the notes , look rather less inconsistent in these notes than they do in the Principles. <In addition the Principles contain plagiarisms of Mill amplified by absurd illustrations, and reprints of articles on corn trade, etc., which he has repeatedly published, maybe verbatim, under twenty different titles in different periodicals, often even in the same periodical at different periods.> In the above-mentioned Volume IV of his edition of Adam Smith (London, 1828), Mac says (he repeats the same thing word for word in his Principles of Political Economy but without making the distinctions which he still felt to be necessary in the notes ): Let us start at the end. If the capitalist did not get back more labour than the amount he advances in wages, he would lend without receiving a profit . What has to be explained is how profit is possible if commodities (labour or other commodities) are exchanged at their value. And the answer is that no profit would be possible if equivalents were exchanged. It is assumed, first of all, that capitalist and worker exchange . And then, in order to explain profit, it is assumed that they do not exchange, but that one of the parties lends (i.e., gives commodities) and the other borrows, that is, pays only after he has received the commodities. In other words, in order to explain profit, it is said that the capitalist secures no interest if he makes no profit. This is [putting] the thing wrongly. The commodities in which the capitalist pays wages and the commodities which he gets back as a result of the labour, are different use-values. He does not therefore receive back what he advanced, any more than he does when he exchanges one commodity for another. Whether he buys another commodity, or whether he buys the specific [commodity] labour which produces the other commodity for him, amounts to the same. For the use-value he advances he receives back another use-value, as happens in all exchanges of commodities. If, on the other hand, one pays attention only to the value of the commodity, then it is no longer a contradiction to exchange a given quantity of labour already performed for the same quantity of labour to be performed (although the capitalist in fact pays only after the labour has been performed), nor is it a contradiction to exchange a quantity of labour performed for the same quantity of labour performed. This latter is an insipid tautology. The first part of the passage implies that the labour to be performed will be embodied in a use-value different from that in which the labour performed is embodied. In this case there is thus a difference [between the objects to be exchanged] and, consequently, a motive for exchange arising out of the relationship itself, but this is not so in the other case, since A only exchanges for A insofar as in this exchange it is a matter of the quantity of labour. This is why Mr. Mac has recourse to the motive. The motive of the capitalist is to receive back a greater quantity of labour than he advances. Profit is here explained by the fact that the capitalist has the motive to make profit . But the same thing can be said about the sale of goods by the merchant and about every sale of commodities not for consumption but for gain. The seller has no motive to exchange a quantity of performed labour for the same quantity of performed labour. His motive is to get in return more performed labour than he gives away. Hence he must get more performed labour in the form of money or commodities than he gives away in the form of a commodity or of money. He must, therefore, buy cheaper than he sells, and sell dearer than he has bought. Profit upon alienation is thus explained, not by the fact that it corresponds to the law of value, but by declaring that buyers and sellers have no motive for buying and selling in accordance with the law of value. This is Mac s first sublime discovery, it fits beautifully into the Ricardian system, which seeks to show how the law of value asserts itself despite the motives of seller and buyer. ||844| For the rest, Mac s presentation in the notes differs from the one in the Principles only in the following: In the Principles he makes a distinction between real value and relative value and says that both are equal under ordinary circumstances but in point of fact they cannot be equal if there is to be a profit. He therefore says merely that the fact contradicts the principle . In the notes he distinguishes three sorts of value: real value , the relative value of a commodity in its exchange with other commodities, and the relative value of a commodity exchanged with labour. The relative value of a commodity in its exchange with another commodity is its real value expressed in another commodity, or in an equivalent . On the other hand, its relative value in exchange with labour is its real value expressed in another real value that is greater than itself. That means, its value is the exchange with a greater value, with a non-equivalent. If it were exchanged for an equivalent in labour, then there would be no profit. The value of a commodity in its exchange with labour is a greater value. Problem: The Ricardian definition of value conflicts with the exchange of commodities with labour. Mac s solution: In the exchange of a commodity with labour the law of value does not exist, but its contrary. Otherwise profit could not be explained. Profit for him, the Ricardian, is to be explained by the law of value. Solution: The law of value (in this case) is profit. In point of fact Mac only reiterates what the opponents of the Ricardian theory say, namely, that there would be no profit if the law of value applied to exchange between capital and labour. Consequently, they say, the Ricardian theory of value is invalid. He [McCulloch] says that in this case, which he must explain by the Ricardian law, the law does not exist and that in this case value means something else. From this it is obvious how little he understands of the Ricardian law. Otherwise he would have had to say that profit arising in exchange between commodities which are exchanged in proportion to the labour-time [embodied in them], is due to the fact that unpaid labour is contained in the commodities. In other words, the unequal exchange between capital and labour explains the exchange of commodities at their value and the profit which is realised in the course of this exchange. Instead of this he says: Commodities which contain the same amount of labour-time command the same amount of surplus labour, which is not contained in them. He believes that in this way he has reconciled Ricardo s propositions with those of Malthus, by establishing an identity between the determination of the value of commodities by labour-time and the determination of the value of commodities by their command over labour. But what does it mean when he says that commodities which contain the same amount of labour-time command the same amount of surplus labour in addition to the labour contained in them? It means nothing more than that a commodity in which a definite amount of labour-time is embodied commands a definite quantity of surplus labour [that is, more labour] than it itself contains. That this applies not only to commodity A, in which x hours of labour-time are embodied, but also to commodity B, in which x hours of labour-time are likewise embodied, follows by definition from the Malthusian formula itself. The contradiction is therefore solved by Mac in this way: If the Ricardian theory of value were really a valid one, then profit, and consequently capital and capitalist production, would be impossible. This is exactly what Ricardo s opponents assert. And this is what Mac answers them, how he refutes them. And in so doing, he does not notice the beauty of an explanation of exchangeable value in [exchange with] labour which amounts to saying that value is exchange for something which has no value. ||845| After Mr. Mac has thus abandoned the basis of Ricardian political economy, he proceeds even further and destroys the basis of this basis. The first difficulty in the Ricardian system was [to present] the exchange of capital and labour so that it corresponded to the law of value . The second difficulty was that capitals of equal magnitude, no matter what their organic composition, yield equal profits or the general rate of profit. This is indeed the unrecognised problem of how values are converted into cost-prices. The difficulty arose because capitals of equal magnitude, but of unequal composition it is immaterial whether the unequal composition is due to the capitals containing unequal proportions of constant and variable capital, or of fixed and circulating capital, or to the unequal period of circulation of the capitals set in motion unequal quantities of immediate labour, and therefore unequal quantities of unpaid labour; consequently they cannot appropriate equal quantities of surplus-value or surplus product in the process of production. Hence they cannot yield equal profit if profit is nothing but the surplus-value calculated on the value of the whole capital advanced. If, how-ever, the surplus-value were something different from (unpaid) labour, then labour could after all not be the foundation and measure of the value of commodities. The difficulties arising in this context were discovered by Ricardo himself (although not in their general form) and set forth by him as exceptions to the law of value. Malthus used these exceptions to throw the whole law overboard on the grounds that the exceptions constituted the rule. Torrens, who also criticised Ricardo, indicated the problem at any rate when he said that capitals of equal size set unequal quantities of labour in motion, and nevertheless produce commodities of equal values , hence value cannot be determined by labour. Ditto Bailey, etc. Mill for his part accepted the exceptions noted by Ricardo as exceptions, and he had no scruples about them except with regard to one single form. One particular cause of the equalisation of the profits of the capitalists he found incompatible with the law. It was the following. Certain commodities remain in the process of production (for example, wine in the cellar) without any labour being applied to them; there is a period during which they are subject to certain natural processes (for example, prolonged breaks in labour occur in agriculture and in tanning before certain new chemicals are applied these cases are not mentioned by Mill). These periods are nevertheless considered as profit-yielding. The period of time during which the commodity is not being worked on by labour [is regarded] as labour-time (the same thing in general applies where a longer period of circulation time is involved). Mill lied his way so to speak out of the difficulty by saying that one can consider the time in which the wine, for example, is in the cellar as a period when it is soaking up labour, although according to the assumption this is, in point of fact, not the case. Otherwise one would have to say that time creates profit and [according to Mill] time as such is sound and fury . McCulloch uses this balderdash of Mill as a starting-point, or rather he reproduces it in his customary affected, plagiarist manner in a general form in which the latent nonsense becomes apparent and the last vestiges of the Ricardian system, as of all economic thinking whatsoever, are happily discarded. On closer consideration, all the difficulties mentioned above resolve themselves into the following difficulty. That part of capital which enters into the production process in the form of commodities, i.e., as raw materials or tools, does not add more value to the product than it possessed before production. For it only has value insofar as it is embodied labour and the labour contained in it is in no way altered by its entry into the production process. It is to such an extent independent of the production process into which it enters and dependent on the socially determined labour required for its own production that its own value changes when more labour or less labour than it itself contains is required for its reproduction. As value, this part of capital therefore enters unchanged into the production process and emerges from it unchanged. Insofar as it really enters into the production process and is changed, this change affects only its use-value, i.e., it undergoes a change as use-value. And all operations undergone by the raw material or carried out by the instrument of labour are merely processes to which they are submitted as specific kinds of raw material, etc., and particular tools (spindles, etc.), processes which affect their use-value, but which, as processes, have nothing to do with their exchange-value. Exchange-value is maintained in this ||846| change. That is all. It is different with that part of capital which is exchanged against labour-power. The use-value of labour-power is labour, the element which produces exchange-value. Since the labour provided by labour-power in industrial consumption is greater than the labour which is required for the reproduction of the labour-power, i.e., it provides more than an equivalent of the wages the worker receives, the value which the capitalist receives from the worker in exchange is greater than the price he pays for this labour. It follows from this that, if equal rates of exploitation are assumed, of two capitals of equal size, that which sets less living labour in motion whether this is due to the fact that the proportion of variable capital is less from the start, or to the fact that it has a [longer] period of circulation or period of production during which it is not exchanged against labour, does not come into contact with it, does not absorb it will produce less surplus-value, and, in general, commodities of less value. How then can the values created be equal and the surplus-values proportional to the capital advanced? Ricardo was unable to answer this question because, put in this way, it is absurd since, in fact, neither equal values nor [equal] surplus-values are produced. Ricardo, however, did not understand the genesis of the general rate of profit nor, consequently, the transformation of values into cost-prices which differ specifically from them. Mac, however, eliminates the difficulty by basing himself on Mill s insipid evasion . One gets round the inconvenience by talking out of existence by means of a phrase the characteristic difference out of which it arose. This is the characteristic difference: The use-value of labour-power is labour; it consequently produces exchange-value. The use-value of the other commodities is use-value as distinct from exchange-value, therefore no change which this use-value undergoes can change the predetermined exchange-value. McCulloch gets round the difficulty by calling the use-values of commodities exchange-value, and the operations in which they are involved as use-values, the services they render as use-values in production labour. For after all, in ordinary life we speak of labouring animals, working machines, and even say poetically that the iron works in the furnace, or works under the blows of the hammer. It even screams. And nothing is easier than to prove that every operation is labour, for labour is an operation. In the same way one can prove that everything material experiences sensation, for everything which experiences sensation is material. And this does not by any means apply [solely] to instruments of labour. It is in the nature of things that this applies equally to raw materials. Wool undergoes a physical action or operation when it is dyed. In general, nothing can be acted upon physically, mechanically, chemically, etc., in order to bring about any desirable result without the thing itself reacting. It cannot therefore be worked upon without itself working. Thus all commodities which enter into the production process bring about an increase in value not only by retaining their own value, but by creating new value, because they work and are not merely materialised labour. In this way, all the difficulties are naturally eliminated. In reality, this is merely a paraphrase, a new name for Say s productive services of capital , productive services of land , etc., which Ricardo attacked continuously and against which Mac strange to say himself polemises in the same dissertation or note where he pompously presents his discovery, borrowed from Mill and embellished still further. In criticising Say, McCulloch makes lavish use of recollected passages from Ricardo and remembers that these productive services are in fact only the attributes displayed by things as use-values in the production process. But naturally, all this is changed when he calls these productive services by the sacramental name of labour . ||847| After Mac has happily transformed commodities into workers, it goes without saying that these workers also draw wages and that, in addition to the value they possess as accumulated labour , they must be paid wages for their operations or action . These wages of the commodities are pocketed by the capitalists per procurationem; they are wages of accumulated labour alias profit. And this [according to McCulloch] is proof that equal profit on equal capitals, whether they set large or small amounts of labour in motion, follows directly from the determination of value by labour-time. The most extraordinary thing about all this, as we have already noted, is the way Mac, at the very moment when he is basing himself on Mill and appropriating Say, hurls Ricardian phrases against Say. How literally he copies Say except that where Say speaks of action, he [McCulloch] calls this action labour can best be seen from the following passages from Ricardo where the latter is criticising Say. Like all economists worth naming, [including] Adam Smith (although in a fit of humour he once called the ox a productive labourer), Ricardo emphasises that labour as human activity, even more, as socially determined human activity, is the sole source of value. It is precisely through the consistency with which he treats the value of commodities as merely representing socially determined labour, that Ricardo differs from the other economists. All these economists understand more or less clearly, but Ricardo more clearly than the others, that the exchange-value of things is a mere expression, a specific social form, of the productive activity of men, something entirely different from things and their use as things, whether in industrial or in non-industrial consumption. For them, value is, in fact, simply an objectively expressed relation of the productive activity of men, of the different types of labour to one another. When he argues against Say, Ricardo explicitly quotes the words of Destutt de Tracy, as expressing his own views. Thus commodities, things in general, have value only because they represent human ||848| labour, not insofar as they are things in themselves, but insofar as they are incarnations of social labour. And yet some persons have had the temerity to say that the miserable Mac has taken Ricardo to extremes, he who, in his incogitant efforts to utilise the Ricardian theory eclectically along with those opposed to it, identifies its basic principle and that of all political economy labour itself as human activity and as socially determined human activity with the physical action, etc., which commodities possess as use-values, as things. He who abandons the very concept of labour itself! Rendered insolent by Mill s evasion , he plagiarises Say while arguing against him with Ricardian phrases and copies precisely those phrases of Say which Ricardo in Chapter 20 of his book, entitled Value and Riches , attacks as being fundamentally opposed to his own ideas and those of Smith. (Roscher naturally repeats that Mac has carried Ricardo to extremes.) Mac, however, is sillier than Say, who does not call the action of fire, machinery, etc., labour. And more inconsistent. While Say attributes the creation of value to wind, fire, etc., Mac considers that only those use-values, things, which can be monopolised create value, as if it were possible to utilise the wind, or steam, or water as motive power without the possession of windmills, steam-driven machinery or water-wheels! As if those who own, monopolise, the things, whose possession alone enables them to employ the natural agents, did not also monopolise the natural agents. I can have as much air, water, etc., as I like. But I possess them as productive agents only if I have the commodities, the things, by the use of which these agents will operate as such. Thus Mac is even lower than Say. This vulgarisation of Ricardo represents the most complete and most frivolous decline of Ricardo s theory. As if what is done by cotton, wool, iron or machinery, were not also done gratuitously . The machine costs money, but the operation of the machine is not paid for. No use-value of any kind of commodity costs anything after its exchange-value has been paid. In arguing against Say, Ricardo emphasises precisely that the action of the machine, for example, costs just as little as that of wind and water. Thus Mac has not understood the most elementary propositions of Ricardo. But the sly dog thinks: if the use-value of cotton, machinery, etc., costs nothing, is not paid for apart from its exchange-value, then, on the other hand, this use-value is sold by those who use cotton, machinery, etc. They sell what costs them nothing. ||849| The brutal thoughtlessness of this fellow is evident, for after accepting Say s principle , he sets forth rent with great emphasis, plagiarising extensively from Ricardo. Land is a and its natural, vegetative action or labour , its productive power, consequently has value, and rent is thus ascribed to the productive power of land, as is done by the Physiocrats. This is an outstanding example of Mac s way of vulgarising Ricardo. On the one hand, he copies Ricardo s arguments, which only make sense if they are based on the Ricardian assumptions, and on the other hand, he takes from others the direct negation of these assumptions (with the reservation that he uses his nomenclature or makes some small changes in the propositions). He should have said: Rent is the wages of land pocketed by the landowner. In other words: the value of the product depends on the value of the capital laid out. This is the problem to be solved. The formulation of the problem is, according to Mac, obviously the solution of it. But since the machine, for example, performs a greater piece of work than the men displaced by it, it is even more obvious that the product of the machine will not fall but rise in value compared with the value of the product of the men who perform the same work . Since the machine can produce 10,000 units of work where a man can only produce one, and every unit has the same value, the product of the machine should be 10,000 times as dear as that of man . Moreover, in his anxiety to distinguish himself from Say by stating that value is produced not by the action of natural agents but only by the action of monopolised agents, or agents produced by labour, Mac gets into difficulties and falls back on Ricardian phrases. For example, the labour of the wind produces the desired effect on the ship (produces a change in it). Here, all of a sudden, grinding is viewed as adding value to the corn insofar only as capital the produce of previous labour is wasted in the act of grinding. That is, it is not due to the millstone working , but to the fact that along with the waste of the millstone, the value contained in it, the labour embodied in it, is also wasted . After these pretty arguments, Mac sums up the wisdom (borrowed from Mill and Say) in which he brings the concept of value into harmony with all kinds of contradictory phenomena, in the following way: Hence labour ||850| is to be understood as meaning the labour of man, then his accumulated labour, and finally, the practical application, that is, the physical, etc., properties of use-values evolved in (industrial) consumption. Apart from these properties, use-value means nothing at all. Use-value operates only in consumption. Consequently, by the exchange-value of the products of labour, we [are to] understand the use-value of these products, for this use-value consists only in its action, or, as Mac calls it, labour , in consumption, regardless of whether this is industrial consumption or not. However, the types of operation , action , or labour of use-values, as well as their physical measures, are as varied as the use-values themselves. But what is the unity, the measure by means of which we compare them? This is established by the general word labour which is substituted for these quite different applications of use-values, after labour itself has been reduced to the words operation or action . Thus, with the identification of use-value and exchange-value ends this vulgarisation of Ricardo, which we must therefore consider as the last and most sordid expression of the decline of the Ricardian school as such. that is, for the wages paid to commodities for the services they render as use-values in production. In addition, these wages of accumulated labour have their own mysterious connotation as far as Mr. McCulloch is concerned. We have already mentioned that, apart from his plagiarism of Ricardo, Mill, Malthus and Say, which constitutes the real basis of his writings, he himself continually reprints and sells his accumulated labour under various titles, always largely drawing upon writings for which he has been paid before. This method of drawing the wages of accumulated labour was discussed at great length as early as 1826 in a special work, and what has not McCulloch done since then from 1826 to 1862 with regard to drawing wages for accumulated labour! (This miserable phrase has also been adopted by Roscher in his role of Thucydides.) The book referred to is called: Some illustrations of Mr. McCulloch s Principles of Political Economy, Edinburgh, 1826, by Mordecai Mullion. It traces how our chevalier d industrie made a name for himself. Nine-tenths of his work is copied from Adam Smith, Ricardo and others, the remaining tenth being culled repeatedly from his own accumulated labour which he repeats most shamelessly and contemptibly. Mullion shows, for example, not only that McCulloch sold the same articles to The Edinburgh Review and The Scotsman and the Encyclopaedia Britannica as his own dissertations and as new works, but also that he published the same articles word for word and with only a few transpositions and under new titles in different issues of The Edinburgh Review over the years. In this respect Mullion says the following about this most incredible cobbler , this most Economical of all Economists : No wonder he believes in the wages of accumulated labour. Mr. McCulloch s fame illustrates the power of fraudulent baseness. ||850a| In order to perceive how McCulloch exploits some of Ricardo s propositions to give himself airs, see, inter alia, The Edinburgh Review for March 1824, where this friend of the wages of accumulated labour gives vent to a veritable jeremiad about the fall in the rate of profit. (This claptrap is called Considerations on the Accumulation of Capital .) There was no need for Mr. Mac to distress himself over the fact that land gets better wages than iron, bricks, etc. The cause must be that it labours harder. |XIV-850a|| ||XV-925| <Even a blind sow sometimes finds an acorn and so does McCulloch in the following passages. But even this, as he presents it, is only an inconsistency, since he does not distinguish surplus-value from profit. Secondly, it is again one of his thoughtless, eclectic acts of plagiarism. According to fellows like Torrens, for whom value is determined by capital and the same applies to Bailey profit is proportionate to the capital advanced. Unlike Ricardo, they do not consider that profit and surplus-value are identical concepts, but only because they have no need whatsoever to explain profit on the basis of value, since they regard the visible form of surplus-value profit as the relation of surplus-value to the capital advanced as the original form and, in fact, they merely trans-late the apparent form into words. The passages in Mac s work, who is (1) a Ricardian and (2) plagiarises Ricardo s opponents without attempting to reconcile [the conflicting ideas] read: Ricardo s law [that a rise in profits can be brought about in no other way than by a fall in wages, and a fall in profits only by a rise in wages] is only true in those cases in which the productiveness of industry remains constant [ii] (J. R. McCulloch, The Principles of Political Economy, London, 1825, p. 373), that is, the productiveness of the industry which produces constant capital. Even in this case, as Mac also notes, one can say that wages have fallen relatively as compared with the product, because profits have risen. (But in this case it is the rise in profits which Is the cause of the fall in wages.) This calculation, however, rests on the incorrect method of calculating wages as a share in the product, and, as we saw previously, Mr. John Stuart Mill seeks to generalise the Ricardian law in this sophistical manner.> |XV-925|| ||XIV-850a| Wakefield s real contribution to the understanding of capital has already been dealt with in the previous section on the Conversion of Surplus-Value into Capital. Here we shall only deal with what is directly relevant to the topic . Thus, according to Wakefield, profit would be inexplicable if wages corresponded to the value of labour. In Vol. II of his edition of Adam Smith s work Wakefield remarks: In this case, profit is called rent, just as it is called interest when, for example, as in India, the worker (although nominally independent) works with advances he receives from the capitalist and has to hand over all the surplus produce to the capitalist. Patrick lames Stirling, The Philosophy of Trade etc., Edinburgh, 1846. ||851|The same author informs us: When the values of commodities are exchanged with one another according to their production costs, the value of these commodities may be said to be at par (p. 18).[oo] Thus if demand and supply of labour correspond with one another, then labour would be sold at its value (whatever Stirling may understand by value). And if demand and supply of the commodities in which the labour is worked up do correspond, then the commodities would be sold at their production costs, by which Stirling understands the value of labour. The price of the commodity would then be equal to the value of the labour worked up in it. And the price of labour would be on a par with its own value. The price of the commodity would therefore be equal to the price of the labour worked up in it. Consequently there would be no profit or surplus. Stirling explains profit, or the surplus, in this way. The supply of labour in relation to the demand for it must be greater than the supply of commodities in which the labour is worked up is in relation to the demand for them. The matter must be so arranged that the commodity is sold at a higher price than that paid for the labour contained in it. This is what Mr. Stirling calls explaining the phenomenon of the surplus, whereas it is, in fact, nothing but a paraphrase of what is supposed to be explained. If we go into it further, then there are only three possibilities. The price of labour is on a par with value, that is, the demand for and supply of labour balance, the price of labour is equal to the value of labour. In these circumstances, the commodities must be sold above their value, or things must be arranged in such a way that the supply is below the demand. This is pure profit upon alienation , except that the condition is stated under which it is possible. Or the demand for labour is greater than the supply and the price [of labour] is higher than its value. In these circumstances, the capitalist has paid the worker more than the value of the commodity, and the buyer must then pay the capitalist a twofold surplus first to replace the amount he [the capitalist] has already paid to the worker and then his profit. Or the price of labour is below its value and the supply of labour above the demand for it. The surplus would then arise from the fact that labour is paid below its value and is sold [embodied in commodities] at its value or, at least, above its price. If one strips this of all nonsense, then Stirling s surplus is [here] due to the fact that labour is bought by the capitalist below its value and is sold again above its price in the form of commodities. The other cases, divested of their ridiculous form according to which the producer has to arrange matters in such a way that he is able to sell his commodity above its value, or above the par of value mean nothing but that the market price of a commodity rises above its value, if the demand for it is greater than the supply. This is certainly not a new discovery and explains one sort of surplus which never caused Ricardo or anyone else the slightest difficulty. |XIV-851|| ||VII-319| In the booklet mentioned above, which, in fact, contains all that is original in Mr. John Stuart Mill s writings about political economy (in contrast to his bulky compendium), he says in Essay IV On Profits, and Interest : This in itself is quite wrong, because the employed labour and the wages paid are by no means identical. On the contrary, the employed labour is equal to the sum of wages and profit. To replace capital means to replace the labour for which the capitalist pays (wages) and the labour for which he does not pay but which he nevertheless sells (profit). Mr. Mill is here confusing employed labour and that portion of the employed labour which is paid for by the capitalist who employs it. This confusion is itself no recommendation for his understanding of the Ricardian theory, which he claims to teach. Incidentally, it should be noted in relation to constant capital that though each part of it can be reduced to previous labour and therefore one can imagine that at some time it represented profit or wages or both, but once it exists as constant capital, one part of it for example, seeds, etc. can no longer be transformed into profit or wages. Mill does not distinguish surplus-value from profit. He therefore declares that the rate of profit (and this is correct for the surplus-value which has already been transformed into profit) is equal to the ratio of the price of the product to the price of its means of production (labour included). (See pp. 92-93.) At the same time he seeks to deduce the laws governing the rate of profit directly from the Ricardian law, in which Ricardo confuses surplus-value and profit, land to prove] that profits depend upon wages; rising as wages fall, and falling as wages rise [p.94]. Mr. Mill himself is not quite clear about the question which he seeks to answer. We will therefore formulate his question briefly before we hear his answer. The rate of profit is the ratio of surplus-value to the total amount of the capital advanced (constant and variable capital taken together) while surplus-value itself is the excess of the quantity of labour performed by the labourer over the quantity of labour which is advanced him as wages; that is, surplus-value is considered only in relation to the variable capital, or to the capital which is laid out in wages, not in relation to the whole capital. Thus the rate of surplus-value and the rate of profit are two different rates, although profit is only surplus-value considered from a particular point of view. It is correct to say with regard to the rate of surplus-value that it exclusively depends upon wages; rising as wages fall, and falling as wages rise . (But it would be wrong with regard to the total amount of surplus-value, for this depends not only on the rate at which the surplus labour of the individual worker is appropriated but likewise on the number of workers exploited at the same time.) Since the rate of profit is the ratio of surplus-value to the total amount of capital advanced, it is naturally affected and determined by the fall or rise of surplus-value, and hence, by the rise or fall of wages, but in addition to this, the rate of profit includes factors ||320| which are independent of it and not directly reducible to it. Mr. John Stuart Mill, who, on the one hand, directly identifies profit and surplus-value, like Ricardo, and, on the other hand (moved by considerations concerning the polemic against the anti-Ricardians), does not conceive the rate of profit in the Ricardian sense, but in its real sense, as the ratio of surplus-value to the total value of the capital advanced (variable capital plus constant capital), goes to great lengths to prove that the rate of profit is determined directly by the law which determines surplus-value and can be simply reduced to the fact that the smaller the portion of the working-day in which the worker works for himself, the greater the portion going to the capitalist, and vice versa. We will now observe his torment, the worst part of which is that he is not sure which problem he really wants to solve. If he had formulated the problem correctly, it would have been impossible for him to solve it wrongly in this way. He says, then: We are naturally always working on the assumption here that the price of a commodity is equal to its value. It is on this basis that Mr. Mill himself carries on the investigation. Profit, in the passages quoted, appears first of all to bear a very strong resemblance to profit upon alienation, but let us proceed. Nothing is more wrong than to say that (if it is sold at its value) an article is the produce of the same quantity of labour as before and at the same time that by some circumstance or other the cost of production of the article can be diminished. <Unless it is in the sense I first advanced, i.e., when I distinguished between the [real] production cost of the article and the production cost to the capitalist, since he does not pay a part of the production costs. In this case, it is indeed true that the capitalist makes his profit out of the unpaid surplus labour of his own workers just as he may also make it by under-paying the capitalist who supplies him with his constant capital, that is, by not paying this capitalist for a part of the sur-plus labour embodied in the commodity and not paid for by this capitalist (and which precisely for that reason constitutes his profit). This amounts to the fact that he always pays for the commodity less than its value. The rate of profit (that is, the ratio of surplus-value to the total value of the capital advanced) can increase either because the quantity of capital [goods] advanced by the capitalist becomes objectively cheaper (due to the increased productivity of labour in those spheres of production which produce constant capital) or because it be-comes subjectively cheaper for the buyer, since he pays for the goods at less than their value. For him, it is then always the result of a smaller quantity of labour.> ||321| What Mill says first of all, is that the constant capital of the capitalist who manufactures the last commodity resolves not into wages alone, but also into profit. His line of reasoning is as follows: If it were resolvable into wages alone, then profit would be the surplus accruing to the last capitalist after he has reimbursed himself for all wages paid <and the whole (paid) costs of the product could be reduced to wages>, which would constitute the whole of the capital advanced. The total value of the capital advanced would be equal to the total value of the wages embodied in the product. Profit would be the surplus over this. And since the rate of profit is equal to the ratio of this surplus to the total value of the capital advanced, then the rate of profit would obviously rise and fall in proportion to the total value of the capital advanced, that is, in proportion to the value of wages, the aggregate of which constitutes the capital advanced. <This objection is, in fact, silly, if we consider the general relation of profits and wages. Mr. Mill needed only to put on one side that part of the whole product which is resolvable into profit (irrespective of whether it is paid to the last or to the previous capitalists, the co-functionaries in the production of the commodity) and then put that part which resolves into wages on the other, and the amount of profit would still be equal to the surplus over the total amount of wages, and it could be asserted that the Ricardian inverse ratio applied directly to the rate of profit. It is not true, however, that the whole of the capital advanced can be resolved into profit and wages.> But the capital advanced does not resolve itself into wages alone, but also into profits advanced. Profit therefore is a surplus not only over and above the wages advanced, but also over the profits advanced. The rate of profit is therefore determined not only by the surplus over wages, but by the last capitalist s surplus over the total sum of wages plus profits, the sum of which, according to this assumption, constitutes the whole of the capital advanced. Hence this rate can obviously be altered not only as a result of a rise or fall in wages, but also as a result of a rise or fall in profit. And if we disregarded the changes in the rate of profit arising from the rise or fall in wages, that is, if we assumed as is done innumerable times in practice that the value of the wages, in other words, the costs of their production, the labour-time embodied in them, remained the same, remained unchanged, then, following the path outlined by Mr. Mill, we would arrive at the pretty law that the rise or fall in the rate of profit depends on the rise or fall of profit. This is in fact very true. If we assume that no portion of the previous producers profit was a mere surcharge profit upon alienation as James Stuart says, then every economy in one portion of profit (so long as it is not achieved by the latter producer swindling the previous one, that is, by not paying him for the whole of the value contained in his commodity) is an economy in the quantity of labour required for the production of the commodity. (Here we disregard the profit paid, for instance, for that time during the period of production, etc., when the capital lies idle.) For example, if two days were required to bring raw materials coal, for instance from the pit to the factory, and now only one day is required, then there is an economy of one day s work, but this applies as much to that part of it which resolves into wages as to that which resolves into profit. After Mr. Mill has made it clear to himself that the rate of surplus of the last capitalist, or the rate of profit in general, depends not only on the direct ratio of wages to profits, but on the ratio of the last profit, or the profit on every particular capital, to the whole value of the capital advanced, which is equal to the variable capital (that laid out in wages) plus the constant capital that, in other words, ||322| the rate of profit is determined not only by the ratio of profit to the part of capital laid out in wages, that is, not only by the cost of production or the value of wages, he continues: Although it is false, it is nevertheless true. The illustration which he now gives can serve as a classical example of the way in which economists use illustrations, and it is all the more astonishing since its author has also written a book about the science of logic. Now[qq] supposing that the amount of labour required remained the same, but as a result of some discovery no fixed capital and seed were needed. Whereas previously the outlay of 120 quarters was required to obtain a product of 180 quarters, now an outlay of only 100 quarters is necessary to achieve this result. With regard to this wonderful illustration, we note first of all that, as a result of a discovery, corn is supposed to be produced without seeds (raw materials) and without fixed capital; that is, without raw materials and without tools, by means of mere manual labour, out of air, water and earth. This ||323| absurd presupposition contains nothing but the assumption that a product can be produced without constant capital, that is, simply by means of newly applied labour. In this case, what he set out to prove has of course been proved, namely, that profit and surplus-value are identical, and consequently that the rate of profit depends solely on the ratio of surplus labour to necessary labour. The difficulty arose precisely from the fact that the rate of surplus-value and the rate of profit are two different things because there exists a ratio of surplus-value to the constant part of capital and this ratio we call the rate of profit. Thus if we assume constant capital to be zero, we solve the difficulty arising from the existence of constant capital by abstracting from the existence of this constant capital. Or we solve the difficulty by assuming that it does not exist. Pro batum est.[uu] Let us now arrange the problem, or Mill s illustration of the problem, correctly. According to the first assumption we have: It is assumed in this example that the labour which is added to the constant capital amounts to 120 quarters and that, since every quarter represents the wages of a working-day (or of a year s labour, which is merely a working-day of 365 working-days), the 180 quarters contain only 60 working-days, 30 of which account for the wages of the workers and 30 constitute profit. We thus assume in fact that one working-day is embodied in 2 quarters and that consequently the 60 working-days of the 60 workmen are embodied in 120 quarters, 60 of which constitute their wages and 60 constitute the profit. In other words, the worker works one half of the working-day for himself, to make up his wages, and one half for the capitalist, thus producing the capitalist s surplus-value. The rate of surplus-value is therefore 100 per cent and not 50 per cent. On the other hand, since the variable capital constitutes only half of the total capital advanced, the rate of profit is not 60 quarters to 60 quarters, that is, not 100 per cent, but 60 quarters to 120 quarters and therefore only 50 per cent. If the constant part of the capital had equalled zero, then the whole of the capital advanced would have consisted of only 60 quarters, i.e., only of the capital advanced in wages, equalling 30 working-days; in this case, profit and surplus-value, and therefore also their rates, would be identical. Profit would then amount to 100 per cent and not 50 per cent; 2 quarters of corn would be the product of one working-day, and 120 quarters the product of 60 working-days, even though one quarter of corn would only be the wages of one working-day and 60 quarters the wages of 60 working-days. In other words, the worker would only receive half, 50 per cent, of his product, while the capitalist would receive twice as much 100% calculated on his outlay. What is the position with regard to the constant capital, the 60 quarters? These were likewise the product of 30 working days, and if it is assumed with regard to this constant capital that the elements which went into its production are so made up that one-third consists of constant capital and two-thirds of newly added labour, and that the [rate of] surplus-value and the rate of profit are also the same as before, we get the following calculation: Here again the rate of profit would be 50 per cent and the rate of surplus-value 100 per cent. The total product would be ||324| the product of 30 working-days, 10 of which however (equalling 20 quarters) would represent the pre-existing labour (the constant capital) and 20 working-days the newly added labour of 20 workers, each of whom would only receive half his product as wages. Two quarters would be the product of one man s labour as in the previous case, although, again as previously, one quarter would represent the wages of one man s labour and one quarter the capitalist s profit, the capitalist thus appropriating half of the man s labour. The 60 quarters which the last capitalist producer makes as surplus-value mean a rate of profit of 50 per cent, because these 60 quarters of surplus-value are calculated not only on the 60 quarters advanced in wages but also on the 60 quarters expended in seed and fixed capital, which together amount to 120 quarters . If Mill calculates that the capitalist who produces the seed and the fixed capital a total of 60 quarters makes a profit of 50 per cent, if he assumes further that the constant and variable capital enter into the product in the same proportion as in the case of the production of the 180 quarters, then it will be correct to say that the profit equals 20 quarters, wages 20 quarters and the constant capital 20 quarters. Since wages equal one quarter [a day], then 60 quarters contain 30 working-days in the same way as 120 quarters contain 60 working-days. But what does Mill say? In the case of the first capitalist, who employed 60 workers, each of whom he paid one quarter per day as wages (so that he paid out 60 quarters in wages), and laid out 60 quarters in constant capital, the 60 working-days resulted in 120 quarters, of which, however, the workers only received 60 in wages; in other words, wages amounted to only half the product of the labour of 60 men. Thus the 60 quarters of constant capital were only equal to the product of the labour of 30 men; if they consisted only of profit and wages, then wages would amount to 30 quarters and profit to 30 quarters, thus wages would equal the labour of 15 men and profit as well. But the profit amounted to only 50 per cent, since it is assumed that of the 30 days embodied in the 60 quarters, 10 represent pre-existing labour (constant capital) and only 10 are allocated to wages. Thus, 10 days are embodied in constant capital, 20 are newly added working-days, of which, however, the workers only work 10 for themselves, the other 10 being for the capitalist. But Mr. Mill asserts that these 60 quarters are the product of 40 men, while just previously he said that 120 quarters were the product of 60 men. In the latter case, one quarter contains half a working-day (although it is the wages paid for a whole working-day); in the former, 3/4 of a quarter would equal half a working-day, whereas the one-third of the product (i.e., the 60 quarters) which is laid out in constant capital has just as much value, that is, it contains just as much labour-time, as any other third part of the product. If Mr. Mill desired to convert the constant capital of 60 quarters wholly into wages and profit, then this would not make the slightest difference as far as the quantity of labour-time embodied in it is concerned. It would still be 30 working-days as before, but now, since there would be no constant capital to replace, profit and surplus-value would coincide. Thus, profit would amount to 100 per cent, not to 50 per cent as previously. Surplus-value also amounted to 100 per cent in the previous case, but the profit was only 50 per cent precisely because constant capital entered into the calculation. We have here, therefore, a doubly false manoeuvre on the part of Mr. Mill. In the case of the first 180 quarters, the difficulty consisted in the fact that surplus-value and profit did not coincide, because the 60 quarters surplus-value had to be calculated not only on 60 quarters (that part of the total product which represented wages) but ||325| on 120 quarters, i.e., 60 quarters constant capital plus 60 quarters wages. Surplus-value therefore amounted to 100 per cent, and profit only to 50 per cent. With regard to the 60 quarters which constituted constant capital, Mr. Mill disposes of this difficulty by assuming that, in this case, the whole product is divided between capitalist and worker, i.e., that no constant capital is required to produce the constant capital, that is, the 60 quarters consisting of seed and tools. The circumstance which had to be explained in the case of capital I, is assumed to have disappeared in the case of capital II, and in this way the problem ceases to exist. But secondly, after he has assumed that the value of the 60 quarters which constitute the constant capital of capital I contains only [immediate] labour, but no pre-existing labour, no constant capital, that profit and surplus-value therefore coincide, and consequently also the rate of profit and the rate of surplus-value, that no difference exists between them, he then assumes, on the contrary, that just as in the case of capital I, a difference between them does exist, and that therefore the profit is only 50 per cent as in the case of capital I. If a third of the product of capital I had not consisted of constant capital, then profit would have been the same as surplus-value; the whole product consisted of only 120 quarters, equal to 60 working-days, 30 of which (equal to 60 quarters) are appropriated by the workers and 30 (equal to 60 quarters) by the capitalist. The rate of profit was the same as the rate of surplus-value, that is, 100 per cent. It was 50 per cent because the 60 quarters of surplus-value were not calculated on 60 quarters (wages) but on 120 quarters (wages, seed and fixed capital). In the case of capital II, he assumes that it contains no constant capital. He also assumes that wages remain the same in both cases a quarter [of corn]. But he nevertheless assumes that profit and surplus-value are different, that profit amounts only to 50 per cent, although surplus-value amounts to 100 per cent. In actual fact he assumes that the 60 quarters, one-third of the total product, contain more labour-time than another third of the total product; he assumes that these 60 quarters are the product of 40 working-days while the other 120 quarters were the product of only 60. In actual fact, however, there peeps out the old delusion of profit upon alienation, which has nothing whatever to do with the labour-time contained in the product and likewise nothing to do with the Ricardian definition of value. For he [Mill] assumes that the wages a man receives for working for a day are equal to what he produces in a working-day, i.e., that they contain as much labour-time as he works. If 40 quarters are paid out in wages, and if the profit amounts to 20 quarters, then the 40 quarters embody 40 working-days. The payment for the 40 working-days is equal to the product of the 40 working-days. If 50 per cent profit, or 20 quarters, is made on 60 quarters, it follows that 40 quarters are the product of the labour of 40 men, for, according to the assumption, 40 quarters constitute wages and each man receives one quarter per day. But in that case where do the other 20 quarters come from? The 40 men work 40 working-days because they receive 40 quarters. A quarter is therefore the product of one working-day. The product of 40 working-days is consequently 40 quarters, and not a bushel more. Where, then, do the 20 quarters which make up the profit come from? The old delusion of profit upon alienation, of a merely nominal price increase on the product over and above its value, is behind all this. But here it is quite absurd and impossible, because the value is not represented in money but in a part of the product itself. Nothing is easier than to imagine that if 40 quarters of grain are the product of 40 workers,- each one of whom receives one quarter per day or per year, they therefore receive the whole of their product as wages, and if one quarter of grain in terms of money is 3, 40 quarters are therefore 120 the capitalist sells these 40 quarters for 180 and makes 60, i.e., 50 per cent profit, equal to 20 quarters. But this notion is reduced to absurdity if out of 40 quarters which have been produced in 40 working-days and for which he pays 40 quarters the capitalist sells 60 quarters. He has in his possession only 40 quarters, but he sells 60 quarters, 20 quarters more than he has to sell. ||326| Thus first of all Mill proves the Ricardian law, that is, the false Ricardian law, which confuses surplus-value and profit, by means of the following convenient assumptions: 1) he assumes that the capitalist who produces constant capital does not himself in his turn need constant capital, and thus he assumes out of existence the whole difficulty which is posed by constant capital; 2) he assumes that, although the capitalist does not [need] constant capital, the difference between surplus-value and profit caused by constant capital nevertheless continues to exist although no constant capital exists; 3) he assumes that a capitalist who produces 40 quarters of wheat can sell 60 quarters, because his total product is sold as constant capital to another capitalist, whose constant capital equals 60 quarters, and because capitalist No. II makes a profit of 50 per cent on these 60 quarters. This latter absurdity resolves itself into the notion of profit upon alienation, which appears here so absurd only because the profit is supposed to stem not from the nominal value expressed in money, but from a part of the product which has been sold. Thus, Mr. Mill, in seeking to defend Ricardo, has abandoned his basic concepts and fallen far behind Ricardo, Adam Smith and the Physiocrats. His first defence of Ricardo s teachings therefore consists in his abandoning them from the outset, namely, abandoning the basic principle that profit is only a part of the value of the commodity, i.e., merely that part of the labour-time embodied in the commodity which the capitalist sells in his product although he has not paid the worker for it. Mill makes the capitalist pay the worker for the whole of his working-day and still derive a profit. Let us see how he proceeds. He does away with the need for seed and agricultural implements in the production of corn by means of an invention, that is, he does away with the need for constant capital in the case of the last capitalist in the same way as he abandoned seed and fixed capital in the case of the producer of the first 60 quarters. Now he ought to have argued as follows: Capitalist No. I does not now need to lay out 60 quarters in seed and fixed capital, for we have stated that his constant capital equals zero. He therefore has to lay out only 60 quarters for the wages of 60 workers who work 60 working-days. The product of these 60 working-days amounts to 120 quarters. The workers receive only 60 quarters. The capitalist therefore makes 60 quarters profit, i.e., 100 per cent. His rate of profit is exactly equal to the rate of surplus-value, that is, it is exactly equal [to the ratio] of the labour-time the workers [worked for themselves to the labour-time they] worked not for themselves, but for the capitalist. They worked 60 days. They produced 120 quarters, they received 60 quarters in wages. They thus received the product of 30 working-days as wages, although they worked 60 days. The quantity of labour-time which 2 quarters cost is still equal to one working-day. The working-day for which the capitalist pays is still equal to one quarter, i.e., it is equal to half the working-day worked. The product has fallen by a third, from 180 quarters to 120 quarters, but the profit has nevertheless risen by 50 per cent, namely, from 50 per cent to 100 per cent. Why? Of the total of 180 quarters, a third merely replaced constant capital, it did not therefore constitute a part of either profit or wages. On the other hand, the 60 quarters, or the 30 working-days during which the workers produced or worked for the capitalist, were calculated not on the 60 quarters spent on wages, that is, the 30 days during which they worked for themselves, but on the 120 quarters, i.e., the 60 working-days, which were expended on wages, seed and fixed capital. Thus, although out of the total of 60 days they worked 30 days for themselves and 30 for the capitalist, and although a capital outlay of 60 quarters on wages yielded 120 quarters to the capitalist, his rate of profit was not 100 per cent, but only 50 per cent, because it was calculated differently, in the one case on 2 60 and in the other on 60. The surplus-value ||327| was the same, but the rate of profit was different. But how does Mill tackle the problem? He does not assume that the capitalist [who, as a result of an invention, spends nothing on constant capital] with an outlay of 60 quarters obtains 120 quarters (30 out of 60 working-days), but that he now employs 100 men who produce 180 quarters for him, always on the supposition that the wage for one working-day is one quarter of wheat. The calculation is therefore as follows: This means that the capitalist makes a profit of 80 per cent. Profit is here equal to surplus-value. Therefore the rate of surplus-value is likewise only 80 per cent. Previously it was 100 per cent, i.e., 20 per cent higher. Thus we have the phenomenon that the rate of profit has risen by 30 per cent while the rate of surplus-value has fallen by 20 per cent. If the capitalist had only expended 60 quarters on wages as he did previously, we would have the following calculation: But 60 quarters previously yielded 60 quarters [of surplus-value] (that means it has fallen by 20 per cent). Or to put it another way, previously: Thus the surplus-value has fallen by 20 per cent, from 100 to 80 (we must take 100 as the basis of the calculation in both [cases]). (60:48=100:80; 60:48=10:8; 60:48=5:4; 4 60=240 and 48 5 =240.) Further, let us consider the labour-time or the value of a quarter. Previously, 2 quarters were equal to one working-day, or one quarter was equal to half a working-day or 9/18 of a man s labour. As against this, 180 quarters are now the product of 100 working-days, one quarter is therefore the product of 100/180 or 10/18 of a working-day. That is, the product has become dearer by 1/18 of a working-day, or the labour has become less productive, since previously a man required 9/18 of a working-day to produce a quarter, whereas now he requires 10/18 of a working-day. The rate of profit has risen although the surplus-value has fallen and, consequently, the productivity of labour has fallen or the real value, the cost of production, of wages has risen by 1/18 or by 5 5/9 per cent. 180 quarters were previously the product of 90 working-days (1 quarter, 90/180, equals half a working-day or 9/18 of a working-day). Now they are the product of 100 working-days (1 quarter = 100/180=10/18 of a working-day). Let us assume that the working-day lasts 12 hours, i.e., 60 12 or 720 minutes. ||328| One-eighteenth part of a working-day, that is, 720/18 therefore amounts to 40 minutes. In the first case, the worker gives the capitalist 9/18 or half of these 720 minutes, that is, 360 minutes. 60 workers will therefore give him 360 60 minutes. In the second case, the worker gives the capitalist only 8/18, that is, 320 minutes out of the 720. But the first capitalist employs 60 men and therefore obtains 360 60 minutes. The second employs 100 men and therefore obtains 100 320, 32,000 minutes. The first gets 360 60, 21,600 minutes. Thus the second capitalist makes a larger profit than the first because 100 workers at 320 minutes a day amounts to more than 60 [workers] at 360 minutes. His profit is bigger only because he employs 40 more men, but he obtains relatively less from each worker. He has a higher profit, although the rate of surplus-value has declined, that is, the productivity of labour has declined, the production costs of real wages have therefore risen, in other words, the quantity of labour embodied in them has risen. But Mr. Mill wanted to prove the exact opposite. Assuming that Capitalist No. I, who has not discovered how to produce corn without seed or fixed capital, likewise uses 100 working-days (like capitalist No. II), whereas he only uses 90 days in the above calculation. He must therefore use 10 more working-days, 3 1/3 of which are accounted for by his constant capital (seed and fixed capital) and 3 1/3 by wages. The product of these 10 working-days on the basis of the old level of production would be 20 quarters, 6 2/3 quarters of which, however, would replace constant capital,[vv] while 12 4/3 quarters would be the product of 6 2/3 working-days. Of this, wages would take 6 2/3 quarters and surplus-value 6 2/3 quarters. We would thus arrive at the following calculation: He makes a profit of 33 1/3 working-days on the total product of 100 working-days. Or 66 2/3 quarters on 200 quarters. Or, if We calculate the capital he lays out in quarters, he makes a profit of 66 2/3 quarters on 133 1/3 quarters (the product of 66 2/3 working-days), whereas capitalist No. II makes a profit of 80 quarters on an outlay of 100 quarters. Thus, the profit of the second capitalist is greater than that of the first. Since the first capitalist produces 200 quarters in the same labour-time that it takes the second to produce 180, for the first capitalist one quarter is equal to half a working-day and for the second capitalist one quarter is equal to 10/18 or 5/9 of a working-day, that is, it contains 1/18 more labour-time and would consequently be dearer, and the first capitalist would drive the second out of business. The latter would have to give up his discovery and accommodate himself to using seed and fixed capital in corn production, as before. Let us assume that the profit of capitalist I amounted to 60 quarters on an outlay of 120 quarters, or to 50 per cent (the same as 66 2/3 quarters on 133 1/3 quarters). The profit of capitalist II amounted to 80 quarters on 100 quarters, or to 80 per cent. The profit of the second capitalist compared to that of the first is 80:50, or 8:5, or 1 : 5/8. As against this, the surplus-value of the second capitalist compared to that of the first is: 80 : 100, or 8 : 10, or 1 : 10/8, or 1 : 1 2/8, or 1 1/4. The rate of profit of the second capitalist is 30 per cent higher than that of the first. The surplus-value of the second capitalist is 20 per cent smaller than that of the first. The second capitalist employs 66 2/3 per cent more workers, while the first one appropriates only 1/8, or 12 1/2 per cent, more labour in a single day. ||329| Mr. Mill has therefore proved that capitalist No. I who uses a total of 90 days, 1/3 of which [is embodied] in constant capital (seed, machinery, etc.), and employs 60 workers whom, however, he pays only [the product of] 30 days produces one quarter of corn in half a clay or in 9/18 of a day; so that in 90 working-days he produces 180 quarters, 60 quarters of which represent the 30 working-days contained in the constant capital, 60 quarters the wages for 60 working-days or the product of 30 working-days, and 60 quarters the surplus-value (or the product of 30 working-days). The [rate of] surplus-value of this capitalist is 100 per cent, his [rate of] profit is 50 per cent, for the 60 quarters of surplus-value are not calculated on the 60 quarters of the capital laid out in wages, but on 120 quarters, i.e., both parts of capital (that is, variable capital plus constant capital). He has proved further that capitalist No. II, who uses 100 working-days and lays out nothing in constant capital (by virtue of his discovery), produces 180 quarters, one quarter is therefore equal to 10/18 of a day, i.e., it is 1/18 of a day (40 minutes) dearer than that of No. I. His labour is 1/18 less productive. Since the worker receives a daily wage of one quarter, as he did previously, his wages have risen by 1/18 in real value, that is, in the labour-time required for their production. Although the production cost of wages has now risen by 1/18 and the total product is smaller in relation to labour-time, and the surplus-value produced by him amounts only to 80 per cent, whereas that of No. I was 100 per cent, his rate of profit is 80 per cent, while that of the first was 50. Why? Because, although the cost of wages has risen for capitalist No. II, he employs more labour, and because the rate of surplus-value is equal to the rate of profit in the case of No. II, since his surplus-value is calculated only on the capital laid out in wages, the constant capital amounting to zero. But Mill wanted on the contrary to prove that the rise in the rate of profit was due to a reduction in the production cost of wages according to the Ricardian law. We have seen that this rise took place despite the increase in the production cost of wages, that, consequently, the Ricardian law is false if profit and surplus-value are directly identified with one another, and the rate of profit is understood as the ratio of surplus-value or gross profit (which is equal to the surplus-value) to the total value of the capital advanced. Mr. Mill continues: Mr. Mill forgets that in the first case, the outlay of 120 quarters represents an outlay of 60 working-days. And that in the second case, the outlay of 100 quarters represents an outlay of 55 6/9 working-days (that is, a quarter equals 9/18 of a working-day in the first case and 10/18 in the second). (Pardon me! The 180 quarters were previously the result of 90 working-days. Now they are the result of 100.) (Pardon me! It was previously the produce of 9/18 of a man s labour.) (Pardon me! Firstly, now a quarter of corn is indeed the produce of 10/18 of a working-day, whereas previously it was the produce of 9/18; it therefore costs 1/18 of a day more labour; and secondly, whether the quarter costs 9/18 or 10/18 of his working-day, the remuneration of an individual worker should never be confused with the product of his labour; since it is always only a part of that product.) Stop! First of all it is wrong, as has been ||330| emphasised repeatedly, to say that one quarter previously cost 10/18 of the working-day. It only cost 9/18. It would be even more wrong (if a gradation in absolute falsehood were possible) if there were added to these 9/18 of a working-day the conjunction of reimbursement of profit, amounting to one-fifth more . In 90 working-days (taking constant and variable capital together) 180 quarters are produced. 180 quarters are equal to 90 working-days. One quarter equals 90/180, which equals 9/18, which equals one half of a working-day. Consequently, no conjunction whatsoever is added to these 9/18 of a working-day, or to the half of a working-day which a quarter costs in case No. I. We here discover the real delusion which is the centre around which the whole of this nonsense revolves. Mill first of all made a fool of himself by supposing that, if 120 quarters are the product of 60 days of labour, and this product is equally divided between the 60 labourers and the capitalist, the 60 quarters which represent the constant capital could be the product of 40 days of labour. They could only be the product of 30 days, in whatever proportion the capitalist and the labourers producing the 60 quarters might happen to share in them. But let us proceed. In order to make the delusion quite clear, let us assume that not one-third, i.e., 20 quarters of the 60 quarters of constant capital, would be converted into profit, but the whole amount of the 60 quarters. We can make this assumption all the more readily since it is not in our interest, but in Mill s, and simplifies the problem. Moreover it is easier to believe that the capitalist who produces 60 quarters of constant capital, discovers that 30 workers, who produce 60 quarters or an equivalent value in 30 days, can be made to work for nothing, without being paid any wages at all (as happens in the case of statute labour), than to believe in the ability of Mill s capitalist to produce 180 quarters of corn without seed or fixed capital, simply by means of a discovery . Let us therefore assume that the 60 quarters contain only the profit of capitalist II, the producer of constant capital for capitalist I, since capitalist II has the product of 30 working-days to sell without having paid a single farthing to the 30 workers, each of whom worked one day. Would it then be correct to say that these 60 quarters, which can be entirely resolved into profit, enter into the production cost of wages on the part of capitalist I, in conjunction with the labour-time worked by these workers? Of course, the capitalist and the workers in case No. 1 could not produce 120 quarters or even one single quarter without the 60 quarters which constitute constant capital and which are resolvable into profit only. These are conditions of production necessary for them, and conditions of production, moreover, which have to be paid for. Thus the 60 quarters were necessary to produce 180. 60 of these 180 quarters replace the 60 quarters [constant capital]. Their 120 quarters the product of 60 working-days are not affected by this. If they had been able to produce the 120 quarters without the 60, then their product, the product of the 60 working-days, would have been the same, but the total product would have been smaller, precisely because the 60 pre-existing quarters would not have been reproduced. The capitalist s rate of profit would have been greater because his production costs would not have included the expenditure on, or the cost of, the means of production which enable him to make a surplus-value of 60 quarters. The absolute amount of profit would have been the same 60 quarters. These 60 quarters, however, would have required an outlay of only 60 quarters. Now they require an outlay of 120. This outlay on constant capital therefore enters into the production costs of the capitalist, but not into the production costs of wages. Let us assume that capitalist III, also without paying his workers, can produce 60 quarters in 15 working-days [instead of 30] by means of some discovery , partly because he uses better machines, and so on. This capitalist III would drive capitalist II out of the market and secure the custom of capitalist I. The capitalist s outlay would now have fallen ||331| from 60 to 45 working-days. The workers would still require 60 working-days to transform the 60 quarters into 180. And they would need 30 working-days in order to produce their wages. For them one quarter would be equal to half a working-day. But the 180 quarters would only cost the capitalist an outlay of 45 working-days instead of 60. Since however it would be absurd to suggest that corn under the name of seed costs less labour-time than it does under the name of corn pure and simple, we would have to assume that in the case of the first 60 quarters, seed corn costs just as much as it did previously, but that less seed is necessary, or that the fixed capital which forms part of the value of the 60 quarters has become cheaper. Let us write down the results so far obtained from the analysis of Mill s illustration . First, it has emerged that: Supposing that the 120 quarters were produced without any constant capital and were the product of 60 working-days as they were previously, whereas formerly, the 180 quarters, 60 quarters of which were constant capital, were the product of 90 working-days. In this case, the capital of 60 quarters laid out in wages, equal to 30 working-days but commanding 60 working-days, would produce the same product as formerly, namely, 120 quarters. The value of the product would likewise remain unchanged, that is, one quarter would be equal to half a working-day. Previously the product was equal to 180 instead of 120 as at present; but the 60 additional quarters represented only the labour-time embodied in the constant capital. The cost of production of wages has thus remained unchanged, and the wages themselves in terms of both use-value and exchange-value have also remained unchanged one quarter being equal to half a working-day. Surplus-value would similarly remain unchanged, namely, 60 quarters for 60 quarters, or half a working-day for half a working-day. The rate of surplus-value in both cases was 100 per cent. Nevertheless the rate of profit was only 50 per cent in the first case, while it is now 100 per cent. Simply because 60 : 60=100 per cent, while 60 : 120=50 per cent. The increase in the rate of profit, in this case, is not [due] to any change in the production cost of wages, but merely to the fact that constant capital has been assumed to be zero. The position is similar when the value of constant capital diminishes, and with it the value of the capital advanced; that is, the proportion of surplus-value to capital increases, and this proportion is the rate of profit. To obtain the rate of profit surplus-value is not only calculated on that part of capital which really increases and creates surplus-value, namely, the part laid out in wages, but also on the value of the raw materials and machinery whose value only reappears in the product. It is calculated moreover on the value of the whole of the machinery, not only on the part which really enters into the process of creating value, i.e., the part whose wear and tear has to be replaced, but also on that part which enters only into the labour process. Secondly, in the second example it was assumed that capital I yields 180 quarters, equal to 90 working-days, so that 60 quarters (30 working-days) represent constant capital; 60 quarters are variable capital (representing 60 working-days, for 30 of which the workers are paid); thus wages amount to 60 quarters (30 working-days) and surplus-value to 60 quarters (30 working-days on the other hand, the product of capital II represents 100 working-days although it likewise comes to 180 quarters, 100 quarters of which are wages, and 80 surplus-value. In this case, the whole of the capital advanced is laid out in wages. Here constant capital is at zero; the real value of wages has risen although the use-value the workers receive has remained the same one quarter; but a quarter is now equal to 10/18 of a working-day whereas previously it was only worth 9/18. The [rate of] surplus-value has declined from 100 per cent to 80 per cent, that is, by 1/5 or by 20 per cent. The rate of profit has increased from 50 per cent to 80 per cent, that is, by 3/5 or by 60 per cent. In this case, therefore, the real production cost of wages has not simply remained unchanged, but has risen. Labour has become less productive and consequently the surplus labour has diminished. And yet the rate of profit has risen. Why? First of all, because in this case there is no constant capital and the rate of profit is consequently equal to the rate of surplus-value. In all cases where capital is not exclusively laid out on wages an almost impossible contingency in capitalist production the rate of profit must be smaller than the rate of surplus-value and it must be smaller in the same proportion as the total value of the capital advanced is greater than the value of the part of the capital laid out in wages. Secondly, [the rate of profit has risen because] capitalist II employs a considerably greater number of workers than capitalist I, thus more than counterbalancing the difference in the productivity of the labour they respectively employ. Thirdly, from one point of view, the cases outlined under the headings firstly and secondly are a conclusive proof that variations in the rate of profit can take place quite independently of the cost of production of wages. For under the heading firstly it was demonstrated that the rate of profit can rise although the cost of production of labour remains the same. Under secondly it was demonstrated that the rate of profit for capital II compared with that for capital I rises although the productivity of labour declines, in other words, although the production cost of wages rises. This case therefore proves ||VIII-332| that if, on the other hand, we compare capital I with capital II, the rate of profit falls although the rate of surplus-value rises, the productivity of labour increases and consequently the production costs of wages fall. They amount to only 9/18 of a working-day [per quarter] for capital I, whereas for capital II they amount to 10/18 of a working-day; but despite this, the rate of profit is 60 per cent higher in the case of capital II than in the case of capital I. In all these cases, not only are variations in the rates of profit not determined by variations in the production costs of wages, but they take place in the same proportions. Here it must be noted that it does not follow from this that the movement of one is the cause of movement of the other (for example, that the rate of profit does not fall because the production costs of wages fall, or that it does not rise because the production costs of wages rise), but only that different circumstances paralyse the opposite movements. Nevertheless, the Ricardian law that variations in the rate of profit take place in the opposite direction to variations in wages, that one rises because the other falls, and vice versa, is false. This law applies only to the rate of surplus-value. At the same time, there exists however a necessary connection (although not always) in the fact that the rate of profit and the value of wages rise and fall not in the opposite but in the same direction. More manual labour is employed where the labour is less productive. More constant capital is applied where the labour is more productive. Thus in this context the same circumstances which bring about an increase or a decline in the rate of surplus-value, must as a consequence bring about a decline or an increase in the rate of profit [i.e., a movement] in the opposite direction. But we shall now outline the case as Mill himself conceived it, although he did not formulate it correctly. This will at the same time clarify the real meaning of his talk about the profits advanced by the capitalist. Despite any kind of discovery and any possible conjunction , the example cannot be left in the form in which Mill puts it forward, because it contains absolute contradictions and absurdities and the various presuppositions he makes cancel one another out. Of the 180 quarters, 60 quarters (seed and fixed capital) are supposed to consist of 20 quarters for profit and 40 quarters [wages] for 40 working-days, so that if the 20 quarters profit are omitted, the 40 working-days still remain. According to this presupposition, the workers therefore receive the whole product for their labour, and consequently it is absolutely impossible to see where the 20 quarters profit and their value come from. If it is assumed that they are merely nominal additions to the price, if they do not constitute labour-time appropriated by the capitalist, their omission would be just as profitable as if 20 quarters wages for workers who had not done any work were included in the 60 quarters. Furthermore, the 60 quarters here simply express the value of the constant capital. They are however supposed to be the product of 40 working-days. On the other hand, it is assumed that the remaining 120 quarters are the product of 60 working-days. But here working-days must be understood as equal average labour. The assumption is therefore absurd. Thus one must assume, firstly, that in the 180 quarters only 90 working-days are embodied and in the 60 quarters, that is, the value of the constant capital, only 30 working-days. The assumption that the profit amounting to 20 quarters or to 10 working-days can be omitted, is once again absurd. For it must then be assumed that the 30 workers employed in the production of constant capital, although not working for a capitalist, are nevertheless so obliging that they are content to pay themselves wages which only amount to half their labour-time, and not to reckon the other half in their commodity. In a word, that that they sell their working-day 50 per cent below its value. Hence this assumption too is absurd. But let us assume that capitalist I, instead of buying his constant capital from capitalist II and then working it up, combines both the production and the working up of constant capital in his own undertaking. He thus supplies seed, agricultural implements, etc., to himself. Let us likewise ignore the discovery which makes seed and fixed capital unnecessary. Supposing that he expends 20 quarters (equal to 10 working-days) on constant capital (for the production of his constant capital) and 10 quarters on wages for 10 working-days, of which the workers work 5 days for nothing, the calculation would then be as follows: ||333| The actual production costs of wages have remained the same, and consequently the productivity of labour too. The total product has remained the same, that is, 180 quarters, and the value of the 180 quarters has also remained unchanged. The rate of surplus-value has remained the same 80 quarters over 80 quarters. The total amount or quantity of surplus-value has risen from 60 quarters to 80 quarters, that is, by 20 quarters. The capital advanced has fallen from 120 to 100 quarters. Previously, 60 quarters were made on 120 quarters, or a rate of profit of 50 per cent. Now 80 quarters are made on 100 quarters, or a rate of profit of 80 per cent. The total value of the capital advanced has fallen from 120 quarters by 20 quarters and the rate of profit has risen from 50 per cent to 80 per cent. The profit itself, irrespective of its rate, now amounts to 80 quarters, whereas previously it was 60 quarters, that is, it has risen by 20 quarters, or as much as the amount (not the rate) of the surplus-value. Thus there has been no change here, no variation in the production costs of real wages. The rise in the rate of profit is due: Firstly, to the fact that although the rate of surplus-value has not risen, the total amount has increased from 60 quarters to 80 quarters, that is, by a third; and it has risen by a third, by 33 1/3 per cent, because the capitalist now employs 80 workers and not 60 as previously, that is, he exploits a third or 33 1/3 per cent more living labour; and obtains the same rate of surplus-value from the 80 workers he now employs as previously when he employed only 60 workers. Secondly. While the absolute magnitude of surplus-value (that is, the total profit) has risen by 33 1/3 per cent, i.e., from 60 to 80 quarters, the rate of profit has risen from 50 per cent to 80 per cent, by 30, that is, by 3/5 (since 1/5 of 50 is 10, and 3/5 30), i.e., by 60 per cent. That is to say, the value of the capital laid out has fallen from 120 [quarters] to 100, although the value of the part of capital laid out in wages has risen from 60 to 80 quarters (from 30 to 40 working-days). This part of the capital has increased by 10 working-days (20 quarters). On the other hand, the constant portion of capital has decreased from 60 to 20 quarters (from 30 working-days to 10), that is, by 20 working-days. If we subtract the 10 working-days by which the part of capital laid out in wages has increased, then the total capital expended decreases by 10 working-days (20 quarters). Previously, it amounted to 120 quarters (60 working-days). Now it amounts to only 100 quarters (50 working-days). It has therefore decreased by a sixth, that is, by 16 2/3 per cent. Incidentally, this whole variation in the rate of profit is only an illusion, only a transfer from one account book to another. Capitalist I has 80 quarters profit instead of 60 quarters, that is, an additional profit of 20 quarters. This, however, is the exact amount of profit that the producer of constant capital made previously and which he has now lost because capitalist I, instead of buying his constant capital, now produces it himself, that is, instead of ||334| paying capitalist II the surplus-value of 20 quarters (10 working-days) which the producer [of constant capital] obtained from the 20 workers employed by him, capitalist I now keeps it for himself. 80 quarters profit is made on 180 quarters as previously, the only difference being that previously it was divided between two people. The rate of profit appears to be bigger, because previously capitalist I regarded the 60 quarters as constant capital only, which in fact they were for him; he therefore disregarded the profit accruing to the producer of constant capital. The rate of profit has not altered, any more than the surplus-value or any factor of production, including the productivity of labour. Previously, the capital laid out by the producer [of constant capital] amounted to 40 quarters (20 working-days); that [variable capital] laid out by capitalist I amounted to 60 quarters (30 working-days), making a total of 100 quarters (50 working-days), and the profit of the first capitalist came to 20 quarters, that of the other to 60, together 80 quarters (40 working-days). The whole product amounting to 90 working-days (180 quarters) yielded 80 quarters profit on 100 laid out in wages and constant capital. For society, the revenue deriving from the profit has remained the same as before, and so has the ratio of surplus-value to wages. The difference arises from the fact that, when the capitalist enters the commodity market as a buyer, he is simply a commodity owner. He has to pay the full value of a commodity, the whole of the labour-time embodied in it, irrespective of the proportions in which the fruits of the labour-time were divided or are divided between the capitalist and the worker. If, on the other hand, he enters the labour market as a buyer, he buys in actual fact more labour than he pays for. If, therefore, he produces his raw materials and machinery himself instead of buying them, he himself appropriates the surplus labour he would otherwise have had to pay out to the seller of the raw materials and machinery. It certainly makes a difference to the individual capitalist although not to the rate of profit, whether he himself derives a profit or pays it out to someone else. (In calculating the reduction in the rate of profit as a result of the growth of constant capital, the social average is always taken as the basis, that is, the aggregate amount of constant capital employed by society at a particular moment and the proportion of this amount to the amount of capital laid out directly in wages.) But this point of view is seldom decisive and can seldom be decisive even for the individual capitalist with regard to such complex enterprises which do occur, for example, when the capitalist is at the same time engaged in spinning and weaving, making his own bricks, etc. What is decisive here is the real saving in production costs, through saving of time on transport, savings on buildings, on heating, on power, etc., greater control over the quality of the raw materials, etc. If he himself decided to manufacture the machines he required, he would then produce them on a small scale like a small producer who works to supply his own needs or the individual needs of a few customers, and the machines would cost him more than they would if he bought them from a machine manufacturer who produced them for the market. Or if he wished at the same time to spin and to weave and to make machines not only for himself, but also for the market, he would require a greater amount of capital, which he could probably invest to greater advantage (division of labour) in his own enterprise. This point of view can only apply when he provides for himself a market sufficient to enable him to produce his constant capital himself on an advantageous scale. His own demand must be large enough to achieve this. In this case, even if his work is less productive than that of the proper producers of constant capital, he appropriates a share of the surplus labour for which he would otherwise have to pay another capitalist. It can be seen that this has nothing to do with the rate of profit. If as in the example cited by Mill 90 working-days and 80 workers were involved previously, then nothing is saved from the production costs by the fact that the surplus labour of 40 days (or 80 quarters) contained in the product is now pocketed by one capitalist instead of by two, as was the case previously. The 20 quarters profit (10 working-days) simply disappears from one account book in order to appear again in another. This saving on previous profit, if it does not coincide with a saving in labour-time and thus with a saving in wages, is therefore a pure delusion. ||335| Fourthly, there remains the case in which the value of constant capital decreases as a result of the increased productivity of labour, and it remains for us to investigate whether or not, and to what extent, this case is related to the real production cost of wages or to the value of labour. The question is, therefore, to what extent a real change in the value of constant capital causes at the same time a variation in the ratio of profit to wages. The value of constant capital, its production costs, can remain constant, yet more or less of it can be embodied in the product. Even if its value is assumed to be constant, the constant capital will increase in the measure that the productivity of labour and production on a large scale develop. Variations in the relative amount of constant capital employed while the production costs of the constant capital remain stable or rise variations which all affect the rate of profit are excluded in advance from this investigation. Furthermore, all branches of production whose products do not enter directly or indirectly into the consumption of the workers are likewise excluded. But variations in the real rate of profit (that is, the ratio of the surplus-value really produced in these branches of industry to the capital expended) in these branches of industry affect the general rate of profit, which arises as a result of the levelling of profits, just as much as variations in the rate of profit in branches of industry whose products enter directly or indirectly into the consumption of the workers. The question moreover must be reduced to the following: How can a change in the value of constant capital retrospectively affect the surplus-value? For once surplus-value is assumed as given, the ratio of surplus to necessary labour is given, and therefore also the value of wages, i.e., their production cost. In these circumstances, no change in the value of constant capital can have any effect on the value of wages, any more than on the ratio of surplus labour to necessary labour, although it must always affect the rate of profit, the cost of production of the surplus-value for the capitalist, and in certain circumstances, namely, when the product enters into the consumption of the worker, it affects the quantity of use-values into which wages are resolved, although it does not affect the exchange-value of wages. Let us assume that wages are given, and that, for example, in a cotton factory they come to 10 working hours and surplus-value to 2 working hours. The price of raw cotton falls by half as a result of a good harvest. The same quantity of cotton which previously cost the manufacturer 100, now costs him only 50. The same amount of cotton requires just the same amount of spinning and weaving as it did before. With an expenditure of 50 for cotton, the capitalist can now acquire as much surplus labour as he did previously with an expenditure of 100, or, should he continue to spend 100 on cotton, he will now receive, for the same amount of money as he spent before, a quantity of cotton from which he will be able to acquire twice the amount of surplus labour. In both cases, the rate of surplus-value, that is, the ratio of surplus-value to wages, will be the same, but in the second case the amount of surplus-value will rise, since twice as much labour will be employed at the same rate of surplus labour. The rate of profit will rise in both cases, although there has been no change in the production cost of wages. It will rise because, to obtain the rate of profit, the surplus-value is calculated on the production costs of the capitalist, that is, on the total value of the capital he expends, and this has fallen. He now needs a smaller outlay in order to produce the same amount of surplus-value. In the second case, not only the rate but also the amount of profit will rise, because surplus-value itself has risen as a consequence of the increased employment of labour, without this increase resulting in an additional cost for raw material. Here again, increases in the rate and the amount of profit will take place without any kind of change in the value of labour. Suppose on the other hand that cotton doubles in value as a result of a bad harvest so that the same amount of cotton ||336| which formerly cost 100 now costs 200. In this case, the rate of profit will fall at all events, but in certain circumstances, the amount or absolute magnitude of profit may fall as well. If the capitalist employs the same number of workers, who do the same amount of work as they did before, under exactly the same conditions as before, the rate of profit will fall, although the ratio of surplus labour to necessary labour, and therefore the rate and the yield of surplus-value, will remain the same. The rate of profit falls because the production costs of surplus-value have risen, i.e., the capitalist has to spend 100 more on raw material in order to appropriate the same amount of other people s labour-time as before. However, if the capitalist is now forced to allocate a part of the money which he formerly spent on wages to buying cotton, e.g., to spend 150 on cotton, of which sum 50 formerly went on wages, then the rate and the amount of profit fall, the amount decreases because less labour is being employed, even though the rate of surplus-value remains the same. The result would be the same if, owing to a bad harvest, there were not enough cotton available to absorb the same amount of living labour as formerly. In both cases, the amount and the rate of profit would fall, although the value of labour would remain the same; in other words, the rate of surplus-value or the quantity of unpaid labour which the capitalist receives in relation to the labour for which he pays wages, remains unchanged. Thus, when the rate of surplus-value, that is, when the value of labour, remains unchanged, a change in the value of constant capital must produce a change in the rate of profit and may be accompanied by a change in the total amount of profit. On the other hand, as far as the worker is concerned: If the value of cotton, and therefore the value of the product into which it enters, falls, he still receives the same amount of wages, equal to 10 hours of labour. But he can now buy the cotton goods which he himself uses more cheaply, and can therefore spend part of the money he previously spent on cotton goods on other things. It is only in this proportion that the necessities of life available to him increase in quantity, that is, in the proportion in which he saves money on the price of cotton goods. For apart from this, he now receives no more for a greater quantity of cotton goods than he did previously for a smaller quantity. Other goods have risen in the same proportion as cotton goods have fallen. In short, a greater quantity of cotton goods now has no more value than the smaller quantity had previously. In this case, therefore, the value of wages would remain the same, but it would represent a greater quantity of other commodities (use-values). Nevertheless, the rate of profit would rise although, given the same circumstances, the rate of surplus-value could not rise. The opposite is the case when cotton becomes dearer. If the worker is employed for the same amount of time and still receives a wage equal to 10 hours as he did previously, the value of his labour would remain the same, but its use-value would fall insofar as the worker himself is a consumer of cotton goods. In this case, the use-value of wages would fail, its value, however, would remain unchanged, although the rate of profit would also fall. Thus, whereas surplus-value and (real) wages always fall and rise in inverse ratio (with the exception of the case where the worker participates in the [yield of the] absolute lengthening of his working-day; but when this happens, the worker uses up his labour-power all the more quickly), it is possible for the rate of profit to rise or fall in the first case although the value of wages remains the same and their use-value increases, in the second case although the value of wages remains the same, while their use-value falls. Consequently, a rise in the rate of profit resulting from a fall in the value of constant capital, has no direct connection whatever with any kind of variation in the real value of wages (that is, in the labour-time contained in the wages). If we assume, as in the above case, that cotton falls in value by 50 per cent, then nothing could be more incorrect than to say either that the production costs of wages have fallen or that, if the worker is paid in cotton goods and receives the same value as he did previously, that is, if he receives a greater amount of cotton goods than he did previously (since although 10 hours, for example, still equals 10sh., I can buy more cotton goods for 10sh. than I could before, because the value of raw cotton has fallen), the rate of profit would remain the same. The rate of surplus-value remains the same, but the ||337| rate of profit rises. The production costs of the product fall, because an element of the product its raw material now costs less labour-time than previously. The production costs of wages remain the same as before, since the worker works the same amount of labour-time for himself and the same for the capitalist as he did before. (The production costs of wages do not depend however on the labour-time which the means of production used by the worker cost, but on the time he works in order to reproduce his wages. According to Mr. Mill, the production costs of a worker s wages would be greater if, for example, he worked up copper instead of iron, or flax instead of cotton; and they would be greater if be sowed flax seed rather than cotton seed, or if he worked with an expensive machine rather than with no machine at all, but simply with tools.) The production costs of profit would fall because the aggregate value, the total amount of the capital advanced in order to produce the surplus-value would fall. The cost of surplus-value is never greater than the cost of the part of capital spent on wages. On the other hand, the cost of profit is equal to the total cost of the capital advanced in order to create this surplus-value. It is therefore determined not only by the value of the portion of capital which is spent on wages and which creates the surplus-value, but also by the value of the elements of capital necessary to bring into action the one part of capital which is exchanged against living labour. Mr. Mill confuses the production costs of profit with the production costs of surplus-value, that is, he confuses profit and surplus-value. This analysis shows the importance of the cheapness or dearness of raw materials for the industry which works them up (not to speak of the relative cheapening of machinery*), even assuming that the market price is equal to the value of the commodity, that is, that the market price of the commodity falls in exactly the same ratio as do the raw materials embodied in it. Colonel Torrens is therefore correct when he says with regard to England: In relation to a country in the condition of England, the importance of a foreign market must be measured not by the quantity of finished goods which it receives, but by the quantity of the elements of reproduction which it returns (R. Torrens, A Letter to [the Right Honourable] Sir Robert Feet on the Condition of England etc., second ed., London, 1843, p. 275). <The way Torrens seeks to prove this, however, is bad. The usual talk about supply and demand. According to him it would appear that if, for example, English capital which manufactures cotton goods grows more rapidly than capital which grows cotton, in the United States for instance, then the price of cotton rises and then, he says: That is to say, while the price of the raw material is rising due to the growing demand from England, the price of cotton fabrics, raised by the rising price of the raw material, will fall; we can indeed observe at the present time (spring 1862), for instance, that cotton twist is scarcely more expensive than raw cotton and woven cotton hardly any dearer than yarn. Torrens, however, assumes that there is an adequate supply of cotton, though at a rather high price, available for consumption by English industry. The price of cotton rises above its value. Consequently, if cotton fabrics are sold at their value, this is only possible provided the cotton-grower secures more surplus-value from the total product than is his due, by actually taking part of the surplus-value due to the cotton manufacturer. The latter cannot replace this portion by raising the price, because demand would fall if prices rose. On the contrary, his profit may decline even more as a consequence of falling demand than it does as a consequence of the cotton-grower s surcharge. The demand for raw materials raw cotton, for example is regulated annually not only by the effective demand existing at a given moment, but by the average demand throughout the year, that is, not only by the demand from the mills that are working at the time, but by this demand increased by the number of mills which, experience shows, will start operating during the course of the coming year, that is, by the relative increase in the number of mills taking place during the year, or by the surplus demand ||338| corresponding to this relative increase. Conversely, if the price of cotton, etc., should fall, e.g., as a result of an especially good harvest, then in most cases the price falls below its value, again through the law of demand and supply. The rate of profit and possibly, as we saw above, the total amount of profit increases, consequently, not only in the proportion in which it would have increased had the cotton which has become cheaper been sold at its value; but it increases because the finished article has not become cheaper in the total proportion in which the cotton-grower sold his raw cotton below its value, that is, because the manufacturer has pocketed part of the surplus-value due to the cotton-grower. This does not diminish the demand for his product, since its price falls in any case due to the decrease in the value of cotton. However, its price does not fall as much as the price of raw cot-ton falls below its own value. In addition, demand increases at such times because the workers are fully employed and receive full wages, so that they themselves act as consumers on a significant scale, consumers of their own product. In cases in which the price of the raw material declines, not as a result of a permanent or continuous fall in its average production costs but because of either an especially good or an especially bad year (weather conditions), the workers wages do not fall, the demand for labour, however, grows. The effect produced by this demand is not merely proportionate to its growth. On the contrary, when the product suddenly becomes dearer, on the one hand many workers are dismissed, and on the other hand the manufacturer seeks to recoup his loss by reducing wages below their normal level. Thus the normal demand on the part of the workers declines, intensifying the now general decline in demand, and worsening the effect this has on the market price of the product.> It was mainly his (Ricardian) conception of the division of the product between worker and capitalist which led Mill to the idea that changes in the value of constant capital alter the value of labour or the production costs of labour; for example, that a fall in the value of the constant capital advanced results in a decline in the value of labour, in its production costs, and therefore also in wages. The value of yarn falls as a result of a decrease in the value of the raw material raw cotton, for example. Its costs of production decline: the amount of labour-time embodied in it is reduced. If, for example, a pound of cotton twist were the product of one man working a twelve-hour day, and if the value of the cotton contained in this twist fell, then the value of the pound of twist would fall in the precise degree that the cotton required for spinning fell. For example, [the price of] one pound of No. 40 Mule yarn 2nd quality was 1s. on May 22nd, 1861. It was 11d. on May 22nd, 1858 (11 6/8d. in actual fact, since its price did not fall to the same extent as that of raw cotton). But in the first case a pound of fair raw cotton cost 8d. (8 1/8d. in actual fact) and 7d. (7 3/8d. in actual fact) in the second. In these cases, the value of the yarn fell in exactly the same degree as the value of cotton, its raw material. Consequently, says Mill, the amount of labour remains the same as it was previously; if it was 12 hours, the product is the result of the same 12 hours of labour. But there was 1d. less worth of the pre-existing labour in the second case than in the first. The labour [-time] is the same, but the production costs of labour have been reduced (by 1d.). Now although one pound of cotton twist as twist, as a use-value, remains the product of 12 hours labour as it was previously, the value of the pound of twist is neither now, nor was it previously, the product of 12 hours work by the spinner. The value of the raw cotton, which in the first case amounted to two-thirds of 1s., i.e., 8d., was not the product of the spinner; in the second case, two-thirds of 11d., that is, 7d., was not his product. In the first case the remaining 4d, is the product of 12 working hours, and just the same amount 4d. is the product in the second. In both cases, his labour adds only a third to the value of the twist. Thus, in the first case, only 1/3 lb. of twist out of 1 lb. of yarn was the product of the spinner (disregarding machinery) and it was the same in the second case. The worker and the capitalist have only 4d. to divide between them, the same as previously, that is, 1/3 lb. of twist. If the worker buys cotton twist with the 4d., he will receive a greater quantity of it in the second case than in the first, now however a bigger quantity of twist is worth the same as a smaller quantity of twist was previously. But the division of the 4d. between worker and capitalist remains the same. If the time worked by the worker to reproduce or produce his wages is 10 hours, his surplus labour amounts to 2 hours, as it did previously. He receives 5/6 of 4d, or of 1/3 lb. of cotton twist as he did previously and the capitalist receives 1/6. Therefore no change ||339| has taken place in respect of the division of the product, of the cotton twist. None the less, the rate of profit has risen, because the value of the raw material has fallen and, consequently, the ratio of surplus-value to the total capital advanced, that is, to the production costs of the capitalist, has increased. If, for the sake of simplification, we abstract from the machines, etc., then the two cases stand as follows: Thus the rate of profit has risen although the value of labour has remained the same and the use-value of the labour as expressed in cotton twist has risen. The rate of profit has risen without any kind of variation in the labour-time which the worker appropriates for himself, solely because the value of the cotton, and consequently the total value of the production costs of the capitalist, has fallen. 2 2/3 farthings on 11d. 4/3 farthings expenditure is naturally less than 2 2/3 farthings on 10d. 4/3 farthings expenditure. In the light of what has been said above, the fallaciousness of the following passages with which Mill concludes his illustration becomes clear, Thus according to Mill s illustration, Ricardo s view is strictly true if low wages (or the production costs of wages in general) are taken to mean not only the opposite of what he said they mean, but if they are taken to mean absolute nonsense, namely, that the production costs of wages are taken to mean not that portion of the working-day which the worker works to replace his wages, but also the production costs of the raw material he works up and the machinery he uses, that is, labour-time which he has not expended at all neither for himself nor for the capitalist. Fifthly. Now comes the real question: How far can a change in the value of constant capital affect the surplus-value? If we say that the value of the average daily wage is equal to 10 hours or, what amounts to the same thing, that from the working-day of, let us say, 12 hours which the worker labours, 10 hours are required in order to produce and replace his wages, and that only the time he works over and above this is unpaid labour-time in which he produces values which the capitalist ||340| receives without having paid for them; this means nothing more than that 10 hours of labour are embodied in the total quantity of means of subsistence which the worker consumes. These 10 hours of labour are expressed in a certain sum of money with which he buys the food. The value of commodities however is determined by the labour-time embodied in them, irrespective of whether this labour-time is embodied in the raw material, the machinery used up, or the labour newly added by the worker to the raw material by means of the machinery. Thus, if there were to be a constant (not temporary) change in the value of the raw material or of the machinery which enter into this commodity a change brought about by a change in the productivity of labour which produces this raw material and this machinery, in short, the constant capital embodied in this commodity and if, as a result, more or less labour-time were required in order to produce this part of the commodity, the commodity itself would consequently be dearer or cheaper (provided both the productivity of the labour which transforms the raw material into the commodity and the length of the working-day remained unchanged). This would lead either to a rise or to a fall in the production costs, i.e., the value, of labour-power; in other words, if previously out of the 12 hours the worker worked 10 hours for himself, he must now work 11 hours, or, in the opposite case, only 9 hours for himself. In the first case, his labour for the capitalist, i.e., the surplus-value, would have declined by half, from two hours to one; in the second case it would have risen by half, from two hours to three. In this latter case, the rate of profit and the total profit of the capitalist would rise, the former because the value of constant capital would have fallen, and both because the rate of surplus-value (and its amount in absolute figures) would have increased. This is the only way in which a change in the value of constant capital can affect the value of labour, the production cost of wages, or the division of the working-day between capitalist and worker, hence also the surplus-value. However, this simply means that for the capitalist who, for example, spins cotton, the necessary labour-time of his own workers is determined not only by the productivity of labour in the spinning industry, but likewise by the productivity of labour in the production of cotton, of machinery, etc., just as it is also determined by the productivity in all branches of industry whose products although they do not enter as constant capital, that is, either as raw material or as machinery, etc., into his product (a product which, it is assumed, enters into the consumption of the worker), into the yarn constitute a part of the circulating capital which is expended in wages, that is, by the productivity in the industries producing food, etc. What appears as the product in one industry appears as raw material or instrument of labour in another; the constant capital of one industry thus consists of the products of another industry; in the latter it does not constitute constant capital, but is the result of the production process within this branch. To the individual capitalist it makes a great deal of difference whether the increased productivity of labour (and therefore also the fall in the value of labour-power) takes place within his own branch of industry or amongst those which supply his industry with constant capital. For the capitalist class, for capital as a whole, it is all the same. Thus this case <in which a fall (or a rise) in the value of constant capital is not due to the fact that the industry employing this constant capital produces on a large scale, but to the fact that the production costs of constant capital itself have changed> concurs with the laws elaborated for surplus-value. When in general we speak about profit or rate of profit, then surplus-value is supposed to be given. The influences therefore which determine surplus-value have all operated. This is the presupposition. Sixthly. In addition, one could have set forth how the ratio of constant capital to variable capital and hence the rate of profit is altered by a particular form of surplus-value. Namely, by the lengthening of the working-day beyond its normal limits. ||341| This results in the diminution of the relative value of the constant capital or of the proportionate part of value which it constitutes in the total value of the product. But we will leave this till Chapter III where the greater part of what has been dealt with here really belongs. Mr. Mill, basing himself on his brilliant illustration, advances the general (Ricardian) proposition: On the contrary, one should say: The rate of profit (and this is what Mr. Mill is talking about) depends exclusively on the cost of production of wages only in one single case. And this is when the rate of surplus-value and the rate of profit are identical. But this can only occur if the whole of the capital advanced is laid out directly in wages, so that no constant capital, be it raw material, machinery, factory buildings, etc., enters into the product, or that the raw material, etc., insofar as it does enter, is not the product of labour and costs nothing a case which is virtually impossible in capitalist production. Only in this case are the variations in the rate of profit identical with the variations in the rate of surplus-value, or, what amounts to the same thing, with the variations in the production costs of wages. In general however (and this also includes the exceptional case mentioned above) the rate of profit is equal to the ratio of surplus-value to the total value of the capital advanced. If we call the surplus-value S, and the value of the capital advanced C, then profit works out at S: C or S/C. This ratio is determined not only by the size of S <and all the factors which determine the production cost of wages enter into the determination of S> but also by the size of C. But C, the total value of the capital advanced, consists of the constant capital, c, and the variable capital, v (laid out in wages). The rate of profit is therefore S : (v+c)=S: C. But S itself, the surplus-value, is determined not only by its own rate, i.e., by the ratio of surplus labour to necessary labour, in other words, by the division of the working-day between capital and labour, that is, its division into paid and unpaid labour-time. The quantity of surplus-value, i.e., the total amount of surplus-value, is likewise determined by the number of working-days which capital exploits simultaneously. And, for a particular capital, the amount of labour-time employed at a definite rate of unpaid labour depends on the time in which the product remains in the actual production process without labour being applied or without the same amount of labour as was required formerly (for example, wine before it has matured, corn once it has been sown, skins and other materials which are subjected to chemical treatment for a certain period, etc.), as well as on the length of time involved in the circulation of the commodity, the length of time required for the metamorphosis of the commodity, that is, the interval between its completion as a product and its reproduction as a commodity. How many days can be worked simultaneously (if the value of wages, and therefore the rate of surplus-value, is given) depends in general on the amount of capital expended on wages. But on the whole, the factors mentioned above modify the total amount of living labour-time which a capital of a given size can employ during a definite period during a year, for example. These circumstances determine the absolute amount of labour-time which a given capital can employ. This does not, however, alter the fact that surplus-value is determined exclusively by its own rate multiplied by the number of days worked simultaneously. These circumstances only determine the operation of the last factor, the amount of labour-time employed. The rate of surplus-value is equal to the ratio of surplus labour in one working-day, that is, it is equal to the surplus-value yielded by a single working-day. For example, if the working-day is 12 hours and the surplus labour 2 hours, then these 2 hours constitute 1/6 of the total labour-time of 12 hours; but we must calculate them on the necessary labour (or on the wages paid for it, they represent the same quantity of labour-time in materialised form); [therefore it is] 1/5 (1/5 of 10 hours=2 hours) (1/5=20 per cent). In this case the amount of surplus-value (yielded in a single day) is determined entirely by the rate. If the capitalist operates on the scale of 100 such ||342| days, then the surplus-value (its total amount) will be 200 labour hours. The rate has remained the same 200 hours for 1,000 hours of necessary labour will give 1/5, or 20 per cent. If the rate of surplus-value is given, its amount depends entirely on the number of workers employed, that is, on the total amount of capital expended on wages, variable capital. If the number of workers employed is given, that is, the amount of capital laid out in wages, the variable capital, then the amount of surplus-value depends entirely on its rate, that is, on the ratio of surplus labour to necessary labour, on the production costs of wages, on the division of the working-day between capitalist and worker. If 100 workers (working 12 hours a day) provide me with 200 labour hours, then the total amount of surplus-value will be 200, the rate 1/5 of a [paid] working-day, or 2 hours. And the surplus-value comes to 2 hours multiplied by 100 [=200]. If 50 workers provide me with 200 labour hours, then the total amount of the surplus-value is 200 hours; the rate is 2/5 of a (paid) working-day, that is, 4 hours. And the surplus-value amounts to 4 hours multiplied by 50 =200. Since the total amount of surplus-value is equal to the product of its rate and the number of working-days, it can remain the same although the factors change in an inverse ratio. The rate of surplus-value is always expressed in the ratio of surplus-value to variable capital. For variable capital is equal to the total amount of the paid labour-time; surplus-value is equal to the total amount of unpaid labour-time. Thus the ratio of surplus-value to variable capital always expresses the ratio of the unpaid part of the working-day to the paid part. For example, in the case mentioned previously, let the wage for 10 hours be 1 thaler, where 1 thaler represents a quantity of silver which contains 10 hours of labour. 100 working-days are consequently paid for with 100 thaler. Now if the surplus-value amounts to 20 thaler, the rate is 20/100, or 1/5, or 20 per cent. Or what amounts to the same thing, the capitalist receives 2 hours for every 10 working hours (equal to 1 thaler); for 100x10 working hours, that is, 1,000 hours, he receives 200 hours or 20 thaler. Thus, although the rate of surplus-value is determined exclusively by the ratio of surplus labour-time to necessary time, in other words, by the corresponding part of the working-day which the worker requires to produce his wages, that is, by the production cost of wages, the amount of surplus-value is moreover determined by the number of working-days, by the total quantity of labour-time which is employed at this definite rate of surplus-value, that is, by the total amount of capital expended on wages (if the rate of surplus-value is given). But since profit is the ratio, not of the rate of surplus-value, but of the total amount of surplus-value to the total value of the capital advanced, then clearly its rate is determined not only by the rate, but also by the total amount of surplus-value, an amount which depends on the compound ratio of the rate and the number of workingdays, on the amount of capital expended on wages and the production costs of wages. If the rate of surplus-value is given, then its amount depends exclusively on the amount of capital advanced (laid out in wages). Now the average wage is the same, in other words, it is assumed that workers in all branches of industry receive a wage of 10 hours, for example. (In those branches of industry where wages are higher than the average, this, from our point of view and for the matter under consideration, would amount to the capitalist employing a greater number of unskilled workers.) Thus, if it is assumed that the surplus labour is equal, and this means that the entire normal working-day is equal (the inequalities cancel one another out in part since one hour of skilled labour, for example, is equal to two hours of unskilled labour), ||343| then the amount of the surplus-value depends entirely on the amount of capital expended [on wages]. It can therefore be said that the amounts of surplus-value are proportional to the amounts of capital laid out (in wages). This does not, however, apply to profit, since profit [expresses] the ratio of surplus-value to the total value of the capital expended, and the portion which capitals of equal size lay out in wages, or the ratio of variable capital to the total capital, can be and is very different. The amount of profit as regards the different capitals here depends on the ratio between the variable capital and the total capital, that is, on v/c+v. Thus, if the rate of surplus-value is given, and it is always expressed by s/v, by the ratio of surplus-value to variable capital, then the rate of profit is determined entirely by the ratio of variable capital to the total capital. The rate of profit is thus determined, firstly, by the rate of surplus-value, that is, by the ratio of unpaid labour to paid labour; and it changes, rises or falls (insofar as this action is not rendered ineffectual by movements of the other determining factors), with changes in the rate of surplus-value. This, however, rises or falls in direct proportion to the productivity of labour and in inverse proportion to the value of labour, that is, to the production costs of wages or the quantity of necessary labour. Secondly, however, the rate of profit is determined by the ratio of variable capital to the total capital, by v/c+v. The total amount of surplus-value, where its rate is given, depends of course only on the size of the variable capital, which, on the assumption made, is determined by, or simply expresses, the number of working-days worked simultaneously, that is, the total amount of labour-time employed. But the rate of profit depends on the ratio of this absolute magnitude of surplus-value, which is determined by the variable capital, to the total capital, that is, on the ratio between variable capital and total capital, on v/c+v. Since S, surplus-value, has been assumed as given in calculating the rate of profit, and therefore v is likewise assumed as given, any variations occurring in can be due only to variations in c, that is, in constant capital. For if v is given, the sum c+v, equal to C, can only change if c changes and the ratio v/c+v or v/C changes with changes in the sum. If v=100, c=400, then v+c=500 and v/v+c = 100/500= 1/5 = 20 per cent. Therefore, if the rate of surplus-value came to 5/10 or 1/2, [the amount of surplus-value] would be 50. But since the variable capital is only equal to 1/5 the total capital, the profit is therefore a half of a fifth, that is, one-tenth [of the total capital] and, in fact, 1/10 of 500, which is 50, that is, 10 per cent. The ratio v/c+v changes with every change in c, but naturally not by the same numerical quantity. If we assume that v and c amount originally to 10 each, that is to say, that the total capital consists of half variable and half constant capital, then v/v+c = 10/10+10 =10/20=1/2. If the rate of surplus-value is 1/2 of v, then it is equal to 1/4 of C. In other words, if the surplus-value is 50 per cent, then in this case, where the variable capital is C/2, the rate of profit comes to 25 per cent. If we now assume that the constant capital is doubled, i.e., it increases from 10 to 20 then v/c+v = 10/20+10 = 10/30 = 1/3. (The rate of surplus-value, 1/2 of 10, would now be 1/2 of 1/3 of C, that is, 1/6 of 30, that is, 5. Thus 1/2 of 10=5, 5calculated on 10 is 50 per cent, 5 calculated on 30 is 16 2/3 per cent. On the other hand, 5 calculated on 20 was 1/4, that is 25 per cent.) The constant capital has doubled, that is, it has increased from 10 to 20. But the sum c+v has only increased by half namely, from 20 to 30. The constant capital has increased by 100 per cent, the sum c+v only by 50 per cent. The ratio v/c+v originally 10/20, has fallen to 10/30, that is, from a half to a third, that is, from 3/6 to 2/6. Thus it has fallen by only 1/6, where- as the constant capital has been doubled. How the growth or decline in the constant capital affects the ratio v/c+v depends evidently on the proportion in which c and v originally constitutee parts of the whole capital C (consisting of c+v). ||344| The constant capital (that is, its value) can firstly rise(or fall) although the amounts of raw material, machinery, etc., employed, remain the same. In this case therefore, the variations in constant capital are not determined by the conditions of production prevailing in the industrial process into which it enters as constant capital, but are independent of them. Whatever the causes bringing about the change in value may be, they always influence the rate of profit. In this case, the same amount of raw material, machinery, etc., has more or less value than it did previously, because more or less labour-time was required to produce them. The variations, then, are determined by the conditions production of the processes from which the component parts of constant capital emerge as products. We have already[yy] examined how this affects the rate of profit. As far as the rate of profit is concerned, whether in a particular industry constant capital, raw material, for example, rises or falls in value because its own production has become dearer, etc., amounts to the same thing as if in some branch of industry (or even in the same branch) more expensive raw material were used for the production of one type of commodity than for that of another type, while the outlay on wages remained unchanged. When there is equal expenditure on wage-labour, but the raw material worked up by one kind of capital (corn, for example) is dearer than the raw material worked up by another (oats, for example) (or, for that matter, silver and copper, etc., or wool and cotton, etc.), the rate of profit for the two capitals must be in inverse proportion to the dearness of the raw material. Thus, if on the average the same profit is made in both branches of industry, then this is only possible because the surplus-value is shared between the capitalists, not in accordance with the ratio of surplus-value which each capitalist produces in his own particular sphere of production but in relation to the size of the capital they employ. This can happen in two ways. A, who works up the cheaper material, sells his commodity at its real value; he thereby also pockets the surplus-value he himself has produced. The price of his commodity is equal to its value. B, who works up dearer material, sells his commodity above its value and charges as much in his price [in order that his commodity should yield a corresponding profit] as if he had been working up a cheaper material. If A and B exchange their products, then it is the same for A as if he had included a smaller amount of surplus-value in the price of his commodity than it actually contains. Or as if both A and B had from the very beginning charged a rate of profit commensurate with the size of the capital invested, that is, had divided the joint surplus-value between them on the basis of the amount of the capital they had invested. And this is what the term general rate of profit denotes. Naturally this equalisation does not take place when the constant element in a particular capital such as raw materials, for example, falls or rises temporarily under the influence of the seasons, etc. Although the extraordinary profits made by the cotton-spinners, for example, in years of especially good cotton crops, undoubtedly lead to an influx of new capital into this branch of industry and give rise to the building of a large number of new factories and of textile machinery. If a bad year for cotton ensues, then the loss [because of the sudden rise in the price of cotton] will be all the greater. Secondly, the production costs of machinery, raw materials, in short of constant capital, remain the same, but larger amounts of them may be required; their value therefore grows in proportion to the growing amount used as a result of the changed conditions of production in the processes in which those elements enter as means of production. In this case, as in the previous example, the increase in the value of constant capital results of course in a fall in the rate of profit. On the other hand however, these variations in the conditions of production themselves indicate that labour has become more productive and thus that the rate of surplus-value has risen. For more raw material is now being consumed by the same amount of living labour only because it can now work up the same amount in less time, and more machinery is now being used only because the cost of machinery is smaller than the cost of the labour it replaces. Thus it is a question here of making up to a certain extent the fall in the rate of profit by increasing the rate of surplus-value and therefore also the total amount of surplus-value. Finally, the two factors responsible for the change in value can operate together in very different combinations. For example, ||345| the average value of raw cotton has fallen, but simultaneously the value of the amount of cotton which can be worked up in a certain time, has increased even more. [Or] the value of cotton has risen, and so has the value of the total amount of it which can be worked up in a given time. Machinery with increased productive capacity has become dearer in absolute terms, but has become cheapen in relation to its efficiency, and so forth. It has been assumed hitherto that the variable capital remains unchanged. Variable capital, however, can also decline not only relatively but absolutely, as for example in agriculture; that is, it can decline not only relative to the size of the constant capital. Alternatively, variable capital can increase absolutely. In this case, however, it is the same as if it remained unchanged, insofar as the constant capital grows in a greater or in the same ratio the reasons mentioned above. If the constant capital remains unchanged, then any rise or fall of it in relation to the variable capital is accounted for only by a relative rise or fall of the constant capital due to an absolute fall or rise of the amount of variable capital. If the variable capital remains unchanged, then every rise or fall in the constant capital can be explained only by its own absolute rise or fall. If variations take place in both variable and constant capital simultaneously, then after deducting the variations which are identical in both, the result is the same as if one had remained unchanged while the other had risen or fallen. Once the rate of profit is given, the amount of profit depends on the size of the capital employed. A large capital with a low rate of profit yields a larger profit than a small capital with a high rate of profit. So much for this digression. Apart from this, only the two following passages from John Stuart Mill require comment: Strictly speaking, he here confuses capital with the material elements of which it is constituted. However, the passage is valuable for those who do the same thing and who nevertheless assert that capital has productive power. Of course, here too the matter is only stated correctly insofar as the production of value is considered. After all, nature also produces insofar as it is only a question of use-values. Here capital is conceived correctly as a production relation. |VIII-345|| ||XIV-851| In a previous notebook I have traced in detail how Mill violently attempts to derive Ricardo s law of the rate of profit (in inverse proportion to wages) directly from the law of value without distinguishing between surplus-value and profit. This whole account of the Ricardian school shows that it declines at two points. 1) Exchange between capital and labour corresponding to the law of value. 2) Elaboration of the general rate of profit. Identification of surplus-value and profit. Failure to understand the relation between values and cost-prices. * ||XV-887| <The following has to be added with regard to Bailey s insipidity. When he says that A is distant from B, he does not thereby compare them with one another, equalise them, but separates them in space. They do not occupy the same space. Nevertheless he still declares that both are spatial things and are differentiated in virtue of being things which belong in space. He therefore makes them equal in advance, gives them the same unity. However, here it is a question of equation. If I say that the area of the triangle A is equal to that of the parallelogram B, this means not only that the area of the triangle is expressed in the parallelogram and that of the parallelogram in the triangle, but it means that if the height of the triangle is equal to h and the base equal to b, then A=h b/2, a property which belongs to it itself just as it is a property of the parallelogram that it is likewise equal to h b/2. As areas, the triangle and the parallelogram are here declared to be equal, to be equivalents, although as a triangle and a parallelogram they are different. In order to equate these different things with one another, each must represent the same common element regardless of the other. If geometry, like the political economy of Mr. Bailey, contented itself with saying that the equality of the triangle and of the parallelogram means that the triangle is expressed in the parallelogram, and the parallelogram in the triangle, it would be of little value.> |XV-887|| * By relative cheapening of machinery, I mean that the absolute value of the amount of machinery employed increases, but that it does not increase in the same proportion as the mass and efficiency of the machinery. [a] See this volume, pp. 30-32. Ed. [b] See this volume, pp. 14 and 29-31. Ed. [c] See this volume, p. 58. Ed. [d] In the manuscript, proportion . Ed. [e] The manuscript has time can do nothing . Ed. [f] The manuscript has add to value instead of create value . Ed. [g] In the manuscript, Mr. Mill . Ed. [h] This and the other passages taken by Marx from Parisot s translation of Mill s work are quoted in this volume from James Mill, Elements of Political Economy, London, 1824. These quotations are marked Parisot and the French text Marx used can be found in the Appendix of this volume. Ed. [i] This passage taken by Marx from Pr vost s translation of McCulloch s book A Discourse on the Rise, Progress, Peculiar Objects, and Importance of Political Economy, is quoted here from the English original, p. 71. Ed. [j] See this volume, pp. 99-100. Ed. [k] The manuscript has state . Ed. [l] Marx wrote most of this and of the two following paragraphs in English. Ed. [m] The manuscript has his . Ed. [n] See this volume, p. 111. Ed. [o] Marx wrote this paragraph and the one following the passage quoted almost entirely in English. Ed. [p] Marx wrote this paragraph in English Ed. [q] Under the aspect of space. Ed. [r] Marx here sums up Bailey s argument in his own words. Ed. [s] See this volume, pp. 110-11. Ed. [t] See this volume, p. 34. Ed. [u] Marx wrote most of this paragraph and the one following the quotation in English. Ed. [v] See this volume, p. 143. Ed. [w] See this volume, pp. 150 and 153-54. Ed. [x] In the manuscript, this reads: there is for it no function to perform . Ed. [y] See this volume, p. 129. Ed. [z] Marx here summarises the ideas developed by Bailey in Chapter X of his book. Ed. [aa] See this volume, pp. 85-88. Ed. [bb] Instead of this part of the sentence Marx wrote in the manuscript: The three types of commodities cannot be entirely distinguished from one another. Ed. [cc] The beginning of this paragraph up to for resemblances is Marx s summary of Malthus s views on McCulloch. The rest is a direct quotation. Ed. [dd] Instead of real and exchangeable , the manuscript has real and relative or exchangeable value . Ed. [ee] Marx mentions p. 211 and p. 225. Ed. [ff] Instead of required for the production of any commodity , the manuscript has expended in its appropriation or production . Ed. [gg] The manuscript has a . Ed. [hh] This passage from McCulloch which Marx quotes from Pr vost s translation is quoted here from The Edinburgh Review, Vol. XL, March-July 1824. Ed. [ii] The manuscript has stationary instead of constant . Ed. [jj] The manuscript has to the wages . Ed. [kk] In this sentence, which is written in German, Marx summarises the ideas set forth by McCulloch on pp. 373-74. Ed. [ll] The manuscript has But the . Ed. [mm] The manuscript has So a . Ed. [nn] Instead of constitutes the profits , the manuscript has constitutes the profit or surplus which Ricardo cannot explain on the basis of his theory . Ed. [oo] Marx here is summarising a paragraph printed on p, 18 of Stirling s book. Ed. [pp] This sentence and the one preceding it are a summary by Marx of Mill s arguments on this page. Ed. [qq] This and the following sentence are a compression by Marx of Mill s ideas, which are spread over several paragraphs in his book. Ed. [rr] The manuscript has For a . Ed. [ss] The manuscript has plus . Ed. [tt] The manuscript has is therefore strictly true . Ed. [uu] It is proved. Ed. [vv] The manuscript has fixed capital . Ed. [ww] The manuscript has For a . Ed. [xx] The manuscript has plus . Ed. [yy] See this volume, pp.218-25. Ed. [zz] The manuscript has machinery . Ed. [aaa] The manuscript has is nothing but instead of can only mean . Ed.

Economic Manuscripts: Theories of Surplus-Value, Chapter 20

https://www.marxists.org/archive/marx/works/1863/theories-surplus-value/ch20.htm

||852| During the Ricardian period of political economy its antithesis, communism (Owen) and socialism (Fourier, St. Simon, the latter only in his first beginnings), [comes] also [into being]. According to our plan we are here concerned only with that opposition, which takes as its starting-point the premises of the economists. It will be seen from the works which we quote that in fact they all derive from the Ricardian form. The Source and Remedy of the National Difficulties, [deduced from Principles of Political Economy, in] a Letter to Lord John Russell, London, 1821. (anonymous). This scarcely known pamphlet (about 40 pages) [which appeared] at a time when McCulloch, this incredible cobbler , began to make a stir, contains an important advance on Ricardo. It bluntly describes surplus-value or profit , as Ricardo calls it (often also surplus produce ), or interest , as the author of the pamphlet terms it as surplus labour , the labour which the worker performs gratis, the labour he performs over and above the quantity of labour by which the value of his labour-power is replaced, i.e., by which he produces an equivalent for his wages. Important as it was to reduce value to labour, it was equally important [to present] surplus-value, which manifests itself in surplus product, as surplus labour. This was in fact already stated by Adam Smith and constitutes one of the main elements in Ricardo s argumentation. But nowhere did he clearly express it and record it in an absolute form. Whereas the only concern of Ricardo and others is to understand the conditions of capitalist production, and to assert them as the absolute forms of production, the pamphlet and the other works of this kind to be mentioned seize on the mysteries of capitalist production which have been brought to light in order to combat the latter from the standpoint of the industrial proletariat. [We read in the pamphlet:] To be sure, these conditions of life, the minimum on which the worker can live, and consequently also the quantity of surplus labour which can be squeezed out of him, are relative magnitudes. Here profit, etc., is reduced directly to appropriation of the labour-time for which the worker receives no equivalent. Rent, money interest, industrial profit, are thus merely different forms of interest of capital , which again is reduced to the surplus labour of the labourer . This surplus labour takes the form of surplus produce. The capitalist is the owner of the surplus labour or of the surplus produce. The surplus produce is capital. And, immediately after this he says: The author says, in a quite different sense from the whining Ricardians: And in reference to Ricardo: ||853| If the value of capital, that is, the interest of capital, i.e., the surplus labour which it commands, which it appropriates, did not decrease when the amount of capital increases, the [accumulation of] interest from interest would follow in geometrical progression, and just as, calculated in money (see Price), this presupposes an impossible accumulation (rate of accumulation), so, reduced to its real element labour, it would swallow up not only the surplus labour, but also the necessary labour as being due to capital. (We shall return to Price s fantasy in the section on Revenue and its Sources.) But it is not clear to him how the value of capital decreases. He himself says, when dealing with Ricardo, that this recurs because wages rise when capital accumulates more rapidly than the population grows, or because the value of wages (not the quantity) increases when the population grows more rapidly than capital accumulates (or even if population increases simultaneously) as a result of decreasing productivity of agriculture. But how does he explain it? He does not accept the latter alternative; he assumes that wages are reduced more and more to the minimum possible. [A reduction of interest on capital] can only take place, he says, because the portion of capital which is exchanged for living labour declines relatively, although the worker is exploited more than, or just as much as, before. In any case, it is a step forward that the nonsense about the geometrical progression of interest is reduced to its true sense, that is, nonsense.* There are, by the way, according to the pamphleteer, two methods which, in spite of the growth of surplus product or surplus labour, prevent capital from being forced to give a greater share of its plunder back to the workers. The first is the conversion of surplus product into fixed capital, which prevents the labour fund or the part of the product consumed by the worker from necessarily increasing with the accumulation of capital. The second is foreign trade, which enables the capitalist to exchange the surplus product for foreign luxury articles and thus to consume it himself, In this way, even that part of the product which exists as necessaries may quite well increase without the need for it to be returned to the worker in the form of a proportionate increase in wages. It should be noted that the first method which is only effective for a time and then neutralises its own effect (at least as regards the fixed capital consisting of machinery, etc., which itself is used in the production of necessaries) implies the transformation of surplus product into capital, whereas the second method implies consumption of an ever-increasing portion of the surplus product by the capitalists increasing consumption on the part of the capitalists and not the reconversion of surplus product into capital. If the same surplus product were to remain in the form in which it immediately exists, a greater part of it would have to be exchanged with the workers as variable capital. The result would be an increase in wages and a reduction in the amount of absolute or relative surplus-value. Here is the real secret of the necessity for increasing consumption by the rich , advocated by Malthus, in order that the part of the product which is exchanged for labour and converted into capital, should have great value, yield large profits, absorb a large amount of surplus labour. He does not however propose that the industrial capitalists themselves should increase their consumption, but [allots] this function to landlords, sinecurists, etc., because the urge for accumulation and the urge for expenditure, if united in the same person, would play tricks on each other. It is here also that the erroneousness of the view of Barton, Ricardo, and others stands out. Wages are not determined by that portion of the total product that is either consumed as, or can be converted into, variable capital, but by that part of it which is actually converted into variable capital. A part can be consumed by retainers even in its natural form, another can be consumed in the shape of luxury products by means of foreign trade, etc. Our pamphleteer overlooks two things: As a result of the introduction of machinery, a mass of workers is constantly being thrown out of employment, a section of the population is thus made redundant; the surplus product therefore finds fresh labour for which it can be exchanged without any increase in population and without any need to extend the absolute working-time. Let us assume that 500 workers were employed previously, whereas now there are 300 workers, who perform relatively more surplus labour. The other 200 can be employed by the surplus product as soon as it has increased sufficiently. One portion of the old [variable] capital is converted into fixed capital, the other gives employment to fewer workers but extracts from them more surplus-value in relation to their number and in particular also more surplus product. The remaining 200 are material created for the purpose of capitalising additional surplus product. ||853a| The transformation of necessaries into luxuries by means of foreign trade, as interpreted in the pamphlet, is important in itself: 1) because it puts an end to the nonsensical idea that wages depend on the amount of necessaries produced, as if these necessaries had to be consumed in this form by the producers or even by the whole body of people engaged in production, in other words that they must be transformed again into variable capital or circulating capital , as it is termed by Barton and Ricardo; 2) because it determines the whole social pattern of backward nations for example, the slave-holding states in the United States of North America (see Cairnes) or Poland, etc. (as was already understood by old B sch, unless he stole the idea from Steuart) which are associated with a world market based on capitalist production. No matter how large the surplus product they extract from the surplus labour of their slaves in the simple form of cotton or corn, they can adhere to this simple, undifferentiated labour because foreign trade enables them [to convert] these simple products into any kind of use-value. The assertion that the portion of the annual product which must be expended as wages depends on the size of the circulating capital, is equal to the assertion that, when a large part of the product consists of buildings , houses for workers are built in large numbers relative to the size of the working population, and that consequently the workers must live in cheap and well-built houses because the supply of houses increases more quickly than the demand for them. It is correct, on the other hand, that, if the surplus product is large and the greater part of it is to be employed as capital, then there must be an increase in the demand for labour and therefore also in that part of the surplus product which is exchanged for wages (provided large numbers of workers did not have to be thrown out of work in order to obtain a surplus product of this size). At all events, it is not the absolute size of the surplus product (in whatever form it may exist, even that of necessaries) which necessarily requires it to be expended as variable capital and which consequently causes an increase in wages, but it is the desire to capitalise which results in a large part of the surplus product being laid out in variable capital and this would consequently make wages grow with the accumulation of capital if machinery did not constantly make [a section of] the population redundant and if an ever greater portion of capital (in particular as a result of foreign trade) were not exchanged for capital, not for labour. The portion of surplus product which is already produced directly in a form in which it can only serve as capital, and that portion of it which acquires this form as a result of foreign trade, grow more rapidly than the portion which must be exchanged against immediate labour. The proposition that wages depend on existing capital and that therefore a rapid accumulation of capital is the sole means by which wages are made to rise, amounts to this: On the one hand, to a tautology, if we disregard the form in which the conditions of labour exist as capital. How rapidly the number of workers can be increased without worsening their living conditions depends on the productivity of labour which a given number of workers perform. The more raw materials, tools and means of subsistence they produce, the greater the means at their disposal not only to bring up their children so long as these cannot work themselves, but to realise the labour of the new, growing generation, and consequently to make the growth of production keep up with, and even outdo, the growth of population, since with the growth of the population, the [workers ] skill increases, division of labour grows, the possibility [for using] machinery grows, constant capital grows, in short, the productivity of labour grows. While the growth of population depends on the productivity of labour, the productivity of labour depends on the growth of population. It is a case of reciprocity. But this, expressed in capitalist terms, signifies that the means of subsistence of the working population depend on the productivity of capital, on the largest possible portion of their product confronting them as a force which commands their labour. Ricardo himself expresses the matter correctly I mean the tautology when he makes wages depend on the productivity of capital, and the latter de-pendent on the productivity of labour.[d] That labour depends on the growth of capital signifies nothing more than, on the one hand, the tautology ||854| that the increase in the means of subsistence and the means of employment of the population depends on the productivity of the population s own labour and, secondly, expressed in capitalist terms, that it depends on the fact that the population s own product confronts them as alien property and that as a consequence their own productivity confronts them as the productivity of the things which they create. In practice this means that the worker must appropriate the smallest possible part of his product in order that the largest possible part of it may confront him as capital; he must surrender as much as possible to the capitalist gratis, in order that the latter s means for purchasing his labour with what has been taken away from the worker without compensation may increase as much as possible. In this case it can happen that, if the capitalist has made the worker work a great deal for nothing, he may then, in exchange for what he has received for nothing, allow the worker to do a little less work for nothing. However, since this prevents the achievement of what is aimed at, namely, accumulation of capital as rapidly as possible, the worker must live in such circumstances that this reduction in the amount of labour he performs for nothing is in turn counteracted by a growth of the working population, either relatively as a result of the use of machinery, or absolutely as a result of early marriage. (It is the same relationship which is derided by the Ricardians when the Malthusians preach it between landlords and capitalists.) The workers must relinquish the largest possible part of their product to the capitalist without receiving anything in return, so as, when conditions are more favourable, to buy back with new labour a part of the product so relinquished. However, since the conditions for the favourable change are at the same time counteracted by this favourable change, it can only be temporary and must turn again into its own opposite. 3) What applies to the transformation of necessaries into luxuries by means of foreign trade, applies in general to luxury production, whose unlimited diversification and expansion depends, however, on foreign trade. Although the workers engaged in luxury production produce capital for their employers, their product, in the form in which it exists, cannot be transformed into capital, either constant or variable capital. Luxury products, apart from those which are sent abroad to be exchanged for necessaries which enter into variable capital either in whole or in part, simply constitute surplus labour and [moreover] surplus labour which is immediately in the shape of surplus products which the rich consume as revenue. But they do not represent only the surplus labour of the workers who produce them. On the average, these perform the same surplus labour as the workers in other branches of industry. But in the same way as one-third of the product, which contains a third of the surplus labour, can be considered as the embodiment of this surplus labour, and the remaining two-thirds as reproduction of the capital advanced, so the surplus labour of the producers of those necessaries which constitute the wages of the producers of luxuries can also be considered as the necessary labour of the work-in g class as a whole. Their surplus labour consists 1) of that part of the necessaries which is consumed by the capitalists and their retainers; and 2) of the total amount of luxuries. With regard to the individual capitalist or a particular branch of industry the matter appears quite different. For the capitalist, one part of the luxuries created by him represents merely an equivalent for the capital laid out. If too large a part of surplus labour is embodied directly in luxuries, then clearly, accumulation and the rate of reproduction will stagnate, because too small a part is reconverted into capital. If too small a part [of surplus labour] is embodied in luxuries, then the accumulation of capital (that is, of that part of the surplus product which can in kind serve as capital again) will proceed more rapidly than increase in population, and the rate of profit will fall, unless a foreign market for necessaries exists. In the exchange between capital and revenue I have regarded wages, too, as revenue and have merely examined the relationship of constant capital to revenue. The fact that the revenue of the worker is at the same time variable capital is important only insofar as in the accumulation of capital the formation of new capital the surplus consisting of means of subsistence (necessaries) in the possession of the capitalist producing them can be exchanged directly for the surplus consisting of raw materials or machinery in the possession of the capitalist producing constant capital. Here one form of revenue is exchanged for the other, ||855| and, once the exchange is effected, the revenue of A is converted into the constant capital of B and the revenue of B into the variable capital of A. In considering this circulation, reproduction and manner of replacement of the different capitals, etc., one must first of all disregard foreign trade. Secondly, it is necessary to distinguish between the two aspects of the phenomenon: 1) Reproduction on the existing scale, 2) Reproduction on an extended scale, or accumulation; transformation of revenue into capital. With regard to 1. I have shown: That what the producers of necessaries have to replace is 1) their constant capital, 2) their variable capital. The part of their product in excess of these two constitutes the surplus product, the material existence of surplus-value, which in its turn only represents surplus labour. Variable capital, that part of their product which represents it, is made up of wages, the revenue of the workers. This part already exists here in the natural form in which it serves as variable capital once again. With this part, the equivalent reproduced by the worker, the labour of the worker is bought once again. This is the exchange of capital for immediate labour. The worker receives this part in the form of money with which he buys back his own product, or other products of the same category. This is the exchange of the different portions of the variable part of capital for one another after the worker has in the form of money received an assignment to his quota. This is exchange of one part of newly added labour for another part within the same category (necessaries). The part of the surplus product (newly added labour) consumed by the capitalists (who produce necessaries) themselves, is either consumed by them in kind or they exchange one type of surplus product existing in consumable form against another type. This is exchange of revenue for revenue, both of them consisting of newly added labour. We cannot really speak of exchange between revenue and capital in the above transaction. Capital (necessaries) is exchanged against labour (labour-power). This is therefore not an exchange of revenue for capital. It is true that as soon as the worker receives his wages, he consumes them. But what he exchanges for capital is not his revenue, but his labour. The third part [of the product of the producer of necessaries which constitutes] constant capital is exchanged for a part of the product of those manufacturers who produce constant capital; namely, for that part which represents newly added labour. This consists of an equivalent for the wages (that is, of variable capital) and of the surplus product, the surplus-value, the revenue of the capitalists which exists in a form in which it can only be consumed industrially and not individually. On the one hand, this is therefore exchange of the variable capital of these producers for a part of the necessaries which constitute the constant capital [of the producers of necessaries]. In fact they exchange a part of their product which constitutes variable capital but exists in the form of constant capital, for a part of the product of those manufacturers who produce necessaries, a part which constitutes constant capital but exists in the form of variable capital. Here newly added labour is exchanged for constant capital. On the other hand, that part of the product which represents surplus product but exists in the form of constant capital is exchanged for a portion of necessaries which represents constant capital for its producers. Here revenue is exchanged for capital. The revenue of the capitalists who produce constant capital is exchanged for necessaries and replaces the constant capital of the capitalists who produce necessaries. Finally, a part of the product of the capitalists who produce constant capital, namely, that part which itself represents constant capital, is replaced partly in kind, partly through barter (concealed by money) between the producers of constant capital. It is assumed in all this that the scale of reproduction is the same as the original scale of production. If we enquire what part of the total annual product is made up of newly added labour, then the calculation is quite simple. A. Consumable articles [for individual consumption. These] consist of three parts. [Firstly,] the revenue of the capitalist which equals the surplus labour added during the year. Secondly, wages, i.e., variable capital, which is equal to the newly added labour by which the workers have reproduced their wages. Finally, the third part, raw materials, machinery, etc. This is constant capital, that part of the value of the product which is only retained, not produced. That is, it is not labour newly added during the course of the year. ||856| If we call constant capital [in this category] c', variable capital v', and surplus product, the revenue r', then this category consists of [c' and v'+r']: c' (which constitutes a part of the product) is merely retained value and does not consist of newly added labour; on the other hand, v'+r' consist of labour newly added during the course of the year. The total product [of the category A] (or its value) Pa after deduction of c', therefore, consists of newly added labour. Thus the product of category A, namely: Pa c', is equal to the labour newly added during the course of the year. B. Articles for industrial consumption. Here also v''+r'' are made up of newly added labour. But not c'', the constant capital which operates in this sphere. But v''+r''=c' for which they are exchanged. c' is transformed into variable capital and revenue for B. On the other hand, v'' and r'' are transformed into c', into constant capital for A. The product of the category [B, that is] Pb. Pb c'' is equal to the labour newly added during the course of the year. But Pb-c''=c', for the whole product of Pb after deduction of c'', the constant capital employed in this category, is exchanged for c'. After v''+r'' have been exchanged for c', the matter can be presented as follows: Pa consists solely of newly added labour, the product of which is divided between profits and wages, that is, it constitutes the equivalent of necessary labour and the equivalent of surplus labour. For the v''+r'' which now replace c' are equal to the newly added labour in category B. Thus the whole product Pa not only its surplus product, but also its variable capital and its constant capital consists of the products of labour newly added during the course of the year. On the other hand, Pb can be regarded in such a way that it does not represent any part of the newly added labour, but merely old labour which is retained, For its part c'' does not represent newly added labour. Neither does the part c' which it has received in exchange for v''+r'', for this c' represents the constant capital laid out in A, and not newly added labour. The whole part of the annual product which, as variable capital, constitutes the revenue of the workers and as surplus product constitutes the consumption fund of the capitalist, therefore consists of newly added labour, whereas the remaining part of the product, which represents constant capital, consists merely of old labour which has been retained and simply replaces constant capital. Consequently, just as it is correct to say that the whole portion of the annual product which is consumed as revenue, wages and profits (together with the branches of profit, rent, interest, etc., as well as the wages of the unproductive labourers) consists of newly added labour, so it is false to assert that the total annual product resolves itself into revenue, wages and profits and thus merely into portions of newly added labour. A part of the annual product resolves itself into constant capital, which regarded as value does not comprise newly added labour and, as regards use does not form part of either wages or profits. Its value represents accumulated labour in the real sense of the word, and its use-value, the utilisation of this accumulated past labour. On the other hand, it is equally correct that the labour added during the year is not represented entirely by that part of the product which constitutes wages and profits. For these wages and profits also buy services, that is, labour which does not enter into the product of which wages and profit form [a part]. These services are labour which is used up in the consumption of the product and does not enter into its immediate production. ||857| With regard to 2. It is a different matter with regard to accumulation, transformation of revenue into capital, reproduction on an extended scale, insofar as this latter does not simply result from more productive employment of the old capital. Here the whole new capital consists of newly added labour, that is, of surplus labour in the form of profit, etc. But although it is correct that here the entire element in new production arises from and consists of newly added labour which is a part of the surplus labour of the labourers it is wrong to assume, as the economists do, that, when it is converted into capital, it constitutes only variable capital, that is, wages. Let us suppose for example that a part of the surplus product of the farmer is exchanged for a part of the surplus product of the machine manufacturer. It is then possible that the latter will convert the corn into variable capital and employ more workers, directly or indirectly. On the other hand, the farmer has converted a part of his surplus product into constant capital, and it is possible that, as a result of this conversion, he will discharge some of his old workers instead of taking on new ones. The farmer may cultivate more land. In this case, a part of his corn will be converted not into wages, but into constant capital, etc. It is precisely accumulation which reveals clearly that everything i.e., revenue, variable capital and constant capital is nothing but appropriated alien labour; and that both the means of labour with which the worker works, and the equivalent he receives for his labour, consist of labour performed by the worker and appropriated by the capitalist, who has not given any equivalent for it. [The same applies] even to original accumulation. Let us assume that I have saved 500 from my wages. In fact, therefore, this Sum represents not only accumulated labour but, in contrast to the accumulated labour of the capitalist, my own labour accumulated by me and for me. I convert the 500 into capital, buy raw material, etc., and take on workers. Profit is, say, 20 per cent, that is, 100 a year. In five years I shall have eaten up my capital in the form of revenue (provided new accumulation does not continuously take place and the 100 [profit] is consumed). In the sixth year, my capital of 500 itself consists of other people s labour appropriated without any equivalent. If, on the other hand, I had always accumulated half of the profit made, the process [of eating up my original capital] would have been slower, for I would not have consumed so much, and [the process of appropriating other people s labour] more rapid. My capital will have been almost doubled in eight years although I have consumed more than my original capital. The capital of 972 does not contain a single farthing of paid labour or of labour for which I have returned any kind of equivalent. I have consumed my entire original capital in the form of revenue, that is, I have received an equivalent for it, which I have consumed. The new capital consists solely of the appropriated labour of other people. In considering surplus-value as such, the original form of the product, hence of the surplus product, is of no consequence. It becomes important when considering the actual process of reproduction, partly in order to understand its forms, and partly in order to grasp the influence of luxury production, etc., on reproduction. Here is another example of how use-value as such acquires economic significance. ||858|| Now to return to our pamphlet. <This is the answer to Say s assertion that we do not produce too much, but they produce too little. Their power to produce is not necessarily equal to our power to produce.> One sees that he accepts Ricardo s teaching on foreign trade. In Ricardo s work its only purpose is to support his theory of value or to demonstrate that his views on foreign trade are not at variance with it. But the pamphlet stresses that it is not only national labour, but also national surplus labour which is embodied in the outcome of foreign trade. If surplus labour or surplus-value were represented only in the national surplus product, then the increase of value for the sake of value and therefore the exaction of surplus labour would be restricted by the limited, narrow circle of use-values in which the value of the [national] labour would be represented. But it is foreign trade which develops its [the surplus product s] real nature as value by developing the labour embodied in it as social labour which manifests itself in an unlimited range of different use-values, and this in fact gives meaning to abstract wealth. But it is only foreign trade, the development of the market to a world market, which causes money to develop into world money and abstract labour into social labour. Abstract wealth, value, money, hence abstract labour, develop in the measure that concrete labour becomes a totality of different modes of labour embracing the world market. Capitalist production rests on the value or the transformation of the labour embodied in the product into social labour. But this is only [possible] on the basis of foreign trade and of the world market. This is at once the pre-condition and the result of capitalist production. ||859| The pamphlet is no theoretical treatise. [It is a] protest against the false reasons given by the economists for the distress and the national difficulties of the times. It does not, consequently, make the claim that its conception of surplus-value as surplus labour carries with it a general criticism of the entire system of economic categories, nor can this be expected of it. The author stands rather on Ricardian ground and is only consistent in stating one of the consequences inherent in the system itself and he advances it in the interests of the working class against capital. For the rest, the author remains a captive of the economic categories as he finds them. Just as in the case of Ricardo the confusion of surplus-value with profit leads to undesirable contradictions, so in his case the fact that he christens surplus-value the interest of capital. To be sure, he is in advance of Ricardo in that he first of all reduces all surplus-value to surplus labour, and when he calls surplus-value interest of capital, he at the same time emphasises that by this he understands the general form of surplus labour in contrast to its special forms rent, interest of money and industrial profit. He thus distinguishes the general form of surplus labour or surplus-value from their particular forms, something which neither Ricardo nor Adam Smith [does], at least not consciously or consistently. But on the other hand, he applies the name of one of these particular forms interest to the general form. And this suffices to make him relapse into economic slang. This passage reminds one of Carey. But with him it is not the labourer who uses capital, but capital which uses the labourer. Since by interest he understands surplus labour in any form, the matter of the remedy of our national difficulties amounts to an increase in wages; for the reduction of interest means a reduction of surplus labour. However, what he really means is that in the exchange of capital for labour the appropriation of alien labour should be reduced or that the worker should appropriate more of his own labour and capital less. Reduction of surplus labour can mean two things: Less work should be performed over and above the time which is necessary to reproduce the labour-power, that is, to create an equivalent for wages; or, less of the total quantity of labour should assume the form of surplus labour, that is, the form of time worked gratis for the capitalist; therefore less of the product in which labour manifests itself should take the form of surplus product; in other words, the worker should receive more of his own product and less of it should go to the capitalist. The author is not quite clear about this himself, as can be seen from the following passage which is really the last word in this matter as far as the pamphlet is concerned: A[h] nation is really rich only if no interest is paid for the use of capital; when only six hours instead of twelve hours are worked Wealth is disposable time, and nothing more (loc. cit., p. 6). Since what is understood by interest here is profit, rent, interest in short, all the forms of surplus-value and since, according to the author himself, capital is nothing but the produce of labour, i.e., accumulated labour which is able to exact in exchange for itself not only an equal quantity of labour, but surplus labour, according to him the phrase: capital bears no interest, therefore means that capital ||860| does not exist. The product is not transformed into capital. No surplus product and no surplus labour exist. Only then is a nation really rich. This can mean however: There is no product and no labour over and above the product and the labour required for the reproduction of the workers. Or, they [the workers] themselves appropriate this surplus either of the product or of the labour. That the author does not simply mean the latter is, however, clear from the fact that the words no interest is paid for the use of capital are juxtaposed to the proposition that a nation is really rich when only six hours not twelve hours are worked[i]; wealth is disposable time, and nothing more . This can now mean: If everybody has to work, if the contradiction between those who have to work too much and those who are idlers disappears and this would in any case be the result of capital ceasing to exist, of the product ceasing to provide a title to alien surplus labour and if, in addition, the development of the productive forces brought about by capitalism is taken into account, society will produce the necessary abundance in six hours, [producing] more than it does now in twelve, and, moreover, all will have six hours of disposable time , that is, real wealth; time which will not be absorbed in direct productive labour, but will be available for enjoyment, for leisure, thus giving scope for free activity and development, Time is scope for the development of man s faculties, etc. The economists themselves justify the slave-labour of the wage-labourers by saying that it creates leisure, free time for others, for another section of society and thereby also for the society of wage-labourers. Or it can also mean: The workers now work six hours more than the time (now) required for their own reproduction. (This can hardly be the author s view, since he describes what they use now as an in human minimum.) If capital ceases to exist, then the workers will work for six hours only and the idlers will have to work the same amount of time. The material wealth of all would thus be depressed to the level of the workers. But all would have disposable time, that is, free time for their development. The author himself is obviously not clear about this. Nevertheless, there remains the fine statement: A nation is really rich when six hours instead of twelve hours are worked. Wealth is disposable time, and nothing more. Ricardo himself, in the chapter entitled Value and Riches, Their Distinctive Properties , also says that real wealth consists in producing the greatest possible amount of values in use having the least possible [exchange-] value. This means, in other words, that the greatest possible abundance of material wealth is created in the shortest possible labour-time. Here also, the disposable time and the enjoyment of that which is produced in the labour-time of others, appear as the real wealth, but like everything in capitalist production and consequently in its interpreters it appears in the form of a contradiction. In Ricardo s work the contradiction between riches and value later appears in the form that the net product should be as large as possible in relation to the gross product, which again, in this contradictory form, amounts to saying that those classes in society whose time is only partly or not at all absorbed in material production although they enjoy its fruits, should be as numerous as possible in comparison with those classes whose time is totally absorbed in material production and whose consumption is, as a consequence, a mere item in production costs, a mere condition for their existence as beasts of burden. There is always the wish that the smallest possible portion of society should be doomed to the slavery of labour, to forced labour. This is the utmost that can be accomplished from the capitalist standpoint. The author puts an end to this. Labour-time, even if exchange-value is eliminated, always remains the creative substance of wealth and the measure of the cost of its production. But free time, disposable time, is wealth itself, partly for the enjoyment of the product, partly for free activity which unlike labour is not dominated by the pressure of an extraneous purpose which must be fulfilled, and the fulfilment of which is regarded as a natural necessity or a social duty, according to one s inclination. It is self-evident that if labour-time is reduced to a normal length and, furthermore, labour is no longer performed for someone else, but for myself, and, at the same time, the social contradictions between master and men, etc., being abolished, it acquires a quite different, a free character, it becomes real social labour, and finally the basis of disposable time the labour of a man who has also disposable time, must be of a much higher quality than that of the beast of burden. ||861| Piercy Ravenstone, M. A., Thoughts on the Funding System, and its Effects, London, 1824. A most remarkable work. The author of The Source and Remedy of the National Difficulties discussed above understands surplus-value in its original form, i.e., that of Surplus labour. Consequently his attention is mainly centred on the extent of labour-time. In particular, the conception of surplus labour or [surplus-] value in its absolute form; the extension of labour-time beyond that required for the reproduction of the labourer himself, not the reduction of necessary labour as a result of the development of the productive power of labour. The reduction of this necessary labour is the principal aspect examined by Ricardo, but in the way it is carried out in capitalist production, namely, as a means for extending the amount of labour-time accruing to capital. This pamphlet, on the contrary, declares that the final aim is the reduction of the producers labour-time and the cessation of labour for the possessor of surplus produce. Ravenstone seems to assume the working-day as given. Hence, what he is particularly interested in just as was also the author of the pamphlet previously discussed, so that the theoretical questions only crop up incidentally is relative surplus-value or the surplus product (which accrues to capital) as a result of the development of the productive power of labour. As is usual with those who adopt this standpoint, surplus labour is conceived here more in the form of surplus product, whereas in the previous [pamphlet], surplus product is conceived more in the form of surplus labour. The opposition evoked by the Ricardian theory on the basis of its own assumptions has the following characteristic feature. To the same extent as political economy developed and this development finds its most trenchant expression in Ricardo, as far as fundamental principles are concerned it presented labour as the sole element of value and the only creator of use-values, and the development of the productive forces as the only real means for increasing wealth; the greatest possible development of the productive power of labour as the economic basis of society. This is, in fact, the foundation of capitalist production. Ricardo s work, in particular, which demonstrates that the law of value is not invalidated either by landed property or by capitalist accumulation, etc., is, in reality, only concerned with eliminating all contradictions or phenomena which appear to run counter to this conception. But in the same measure as it is understood that labour is the sole source of exchange-value and the active source of use-value, capital is likewise conceived by the same economists, in particular by Ricardo (and even more by Torrens, Malthus, Bailey, and others after him), as the regulator of production, the source of wealth and the aim of production, whereas labour is regarded as wage-labour, whose representative and real instrument is inevitably a pauper (to which Malthus s theory of population contributed), a mere production cost and instrument of production dependent on a minimum wage and forced to drop even below this minimum as soon as the existing quantity of labour is superfluous for capital. In this contradiction, political economy merely expressed the essence of capitalist production or, if you like, of wage-labour, of labour alienated from itself, which stands confronted by the wealth it has created as alien wealth, by its own productive power as the productive power of its product, by its enrichment as its own impoverishment and by its social power as the power of society. But this definite, specific, historical form of social labour which is exemplified in capitalist production is proclaimed by these economists as the general, eternal form, as a natural phenomenon, and these relations of production as the absolutely (not historically) necessary, natural and reasonable relations of social labour. Their thoughts being entirely confined within the bounds of capitalist production, they assert that the contradictory form in which social labour manifests itself there, is just as necessary as labour itself freed from this contradiction. Since in the self-same breath they proclaim on the one hand, labour as such (for them, labour is synonymous with wage-labour) and on the other, capital as such that is the poverty of the workers and the wealth of the idlers to be the sole source of wealth, they are perpetually involved in absolute contradictions without being in the slightest degree aware of them. (Sismondi was epoch-making in political economy because he had an inkling of this contradiction.) Ricardo s phrase labour or capital reveals in a most striking fashion both the contradiction inherent in the terms and the na vety with which they are stated to be identical. Since the same real development which provided bourgeois political economy with this striking theoretical expression, unfolded the real contradictions contained in it, especially the contradiction between the growing wealth of the English nation and the growing misery of the workers, and since moreover these contradictions are given a theoretically compelling if unconscious expression in the Ricardian theory, etc., it was natural for those thinkers ||XV-862| who rallied to the side of the proletariat to seize on this contradiction, for which they found the theoretical ground already prepared. Labour is the sole source of exchange-value and the only active creator of use-value. This is what you say. On the other hand, you say that capital is everything, and the worker is nothing or a mere production cost of capital. You have refuted yourselves. Capital is nothing but defrauding of the worker. Labour is everything. This, in fact, is the ultimate meaning of all the writings which defend the interests of the proletariat from the Ricardian standpoint basing themselves on his assumptions. Just as little as he [Ricardo] understands the identity of capital and labour in his own system, do they understand the contradiction they describe. That is why the most important among them Hodgskin, for example accept all the economic pre-conditions of capitalist production as eternal forms and only desire to eliminate capital, which is both the basis and necessary consequence [of these preconditions]. Ravenstone s main idea is as follows: The development of the productive power of labour creates capital or property, in other words a surplus product for idlers , non-workers; and indeed the more the productive power of labour develops, the more it produces this, its parasitical excrescence which sucks it dry. Whether the title to this surplus product, or the power to appropriate the product of other people s labour, accrues to the non-worker because he already possesses wealth, or because he possesses land, landed property, does not affect the case. Both are capital, that is, mastery over the product of other people s labour. For Ravenstone property is merely appropriation of the products of other people s labour and this is only possible insofar as and in the degree that productive industry develops. By productive industry Ravenstone understands industry which produces necessaries. Unproductive industry, the industry of consumption, is a consequence of the development of capital, or property. Ravenstone appears ascetic like the author of the pamphlet discussed above.[j] In this respect he himself remains a captive of the notions set forth by the economists. Without capital, without property, the necessaries of the workers would be produced in abundance, but there would be no luxury industry. Or it can also be said that Ravenstone, like the author of the pamphlet discussed above, understands or at least in fact admits the historical necessity of capital; since capital, according to the author of the pamphlet, produces surplus labour over and above the labour strictly necessary for the maintenance [of the worker] and at the same time leads to the creation of machinery (what he calls fixed capital) and gives rise to foreign trade, the world market, in order to utilise the surplus product filched from the workers partly to increase productive power, partly to give this surplus product the most diverse forms of use-value far removed from those required by necessity. Similarly, according to Ravenstone, no conveniences, no machinery, no luxury products would be produced without capital and property, neither would the development of the natural sciences have taken place, nor the literary and artistic productions which owe their existence to leisure, nor the urge of the wealthy to receive an equivalent for their surplus product from the non-workers. Ravenstone and the pamphleteer do not say this in justification of capital, but simply seize on it as a point of attack because all this is done in opposition to [the interest of] the workers and not for them. But in fact they thus admit that this is a result of capitalist production, which is therefore a historical form of social development, even though it stands in contradiction to that part of the population which constitutes the basis of that whole development, In this respect they share the narrow-mindedness of the economists (although from a diametrically opposite position) for they confuse the contradictory form of this development with its content. The latter wish to perpetuate the contradiction on account of its results. The former are determined to sacrifice the fruits which have developed within the antagonistic form, in order to get rid of the contradiction. This distinguishes their opposition to [bourgeois] political economy from that of contemporary people like Owen; likewise from that of Sismondi, who harks back to antiquated forms of the contradiction in order to be rid of it in its acute form. [Ravenstone writes:] It is the wants of the poor which constitute his (the rich man s) wealth When all were equal, none would labour for another. The necessaries of life would be overabundant whilst its comforts were entirely wanting (op. cit., p. 10). <With regard to rent he says (not quite correctly, for it is precisely here that it is necessary to explain why rent accrues to the landlord and not to the farmer, the industrial capitalist) what applies to surplus-value in general, insofar as it develops as a result of the increase in the productivity of labour. Note. An original piece of work. Its real subject is the modern system of national debt, as its title indicates. Amongst other things he says: [See Labour Defended against the Claims of Capital, Hodgskin 1825.] Labour Defended against the Claims of Capital; or, the Unproductiveness of Capital Proved, By a Labourer, London, 1825. (With reference to the Present Combinations amongst Journeymen.) Thomas Hodgskin, Popular Political Economy. Four Lectures delivered at the London Mechanics Institution, London, 1827. The anonymous first work is also by Hodgskin. Whereas the pamphlets mentioned previously and a series of similar ones have disappeared without trace, these writings, especially the first one, made a considerable stir and are still regarded as belonging to the most important works of English political economy (see John Lalor, Money and Morals, London, 1852). We shall consider each of these works in turn. Labour Defended etc. As the title indicates, the author wishes to prove the unproductiveness of capital . Ricardo does not assert that capital is productive of value. It only adds its own value to the product, and its own value depends on the labour-time required for its reproduction. It only has value as accumulated labour (or rather ||864|, materialised labour) and it only adds this its value to the product in which it is embodied. It is true that he is inconsistent when discussing the general rate of profit. But this is precisely the contradiction which his opponents attacked. As far as the productivity of capital in relation to use-value is concerned, this is construed by Smith, Ricardo and others, and by political economists in general, as meaning nothing else than that products of previous useful work serve anew as means of production, as objects of labour, instruments of labour and means of subsistence for the workers. The objective conditions of labour do not face the worker, as in the primitive stages, as mere natural objects (as such, they are never capital), but as natural objects already transformed by human activity. But in this sense the word capital is quite superfluous and meaningless. Wheat is nourishing not because it is capital but because it is wheat. The use-value of wool derives from the fact that it is wool, not capital. In the same way, the action of steam-powered machinery has nothing in common with its existence as capital. It would do the same work if it were not capital and if it belonged, not to the factory owner, but to the workers. All these things serve in the real labour process because of the relationship which exists between them as use-values not as exchange-values and still less as capital and the labour which sets them in motion. Their productivity in the real labour process, or rather the productivity of the labour materialised in them, is due to their nature as objective conditions of real labour and not to their social existence as alienated, independent conditions which confront the worker and are embodied in the capitalist, the master over living labour. It is as wealth, as Hopkins (not our Hodgskin) rightly says, and not as net wealth, as product and not as net product, that they are here consumed and used. It is true that the particular social form of these things in relation to labour and their real determinateness as factors of the labour process are as confused and inseparably interwoven with one another in the minds of the economists as they are in the mind of the capitalist. Nevertheless, as soon as they analyse the labour process, they are compelled to abandon the term capital completely and to speak of material of labour, means of labour, and means of subsistence. But the determinate form of the product as material, instrument and means of subsistence of the worker expresses nothing but the relationship of these objective conditions to labour; labour itself appears as the activity which dominates them. It says however nothing at all about [the relationship of] labour and capital, only about the relationship of the purposeful activity of men to their own products in the process of reproduction. They neither cease to be products of labour nor mere objects which are at the disposal of labour. They merely express the relationship in which labour appropriates the objective world which it has created itself, at any rate in this form; but they do not by any means express any other domination of these things over labour, apart from the fact that activity must be appropriate to the material, otherwise it would not be purposeful activity, labour. One can only speak of the productivity of capital if one regards it as the embodiment of definite social relations of production. But if it is conceived in this way, then the historically transitory character of this relationship becomes at once evident, and the general recognition of this fact is incompatible with the continued existence of this relationship, which itself creates the means for its abolition. But the economists do not regard it [capital] as such a relationship because they cannot admit its relative character, and do not understand it either. They simply express in theoretical terms the notions of the practical men who are engrossed in capitalist production, dominated by it and interested in it. In his polemic [with the bourgeois economists], Hodgskin himself starts out from a standpoint which is economically narrow-minded. Insofar as they [the economists] define capital as an eternal production relation, they reduce it to the general relations of labour to its material conditions, relations which are common to all modes of production and do not express the specific nature of capital. Insofar as they hold that capital produces value , the best of them and [especially] Ricardo, admit that it does not produce any value which it has not received and constantly continues to receive from labour, since the value of a product is determined by the labour-time necessary to reproduce it, that is, its value is the result of living, present labour and not of past labour. And as Ricardo emphasises, increase in the productivity of labour is marked by the continuous devaluation of the products of past labour. On the other hand, the economists continually mix up the definite, specific form in which these things constitute capital with their nature as things and as simple elements of every labour process. The mystification contained in capital as employer of labour is not explained by them, but it is constantly expressed by them unconsciously, for it is inseparable from the material aspect of capital. ||867| The first pamphlet[m] draws the correct conclusions from Ricardo and reduces surplus-value to surplus labour. This is in contrast to Ricardo s opponents and followers who continue to adhere to his confusion of surplus-value with profit. In opposition to them, the second pamphlet[n] defines relative surplus-value more exactly as being dependent on the level of development of the productive power of labour. Ricardo says the same thing, but he avoids the conclusion drawn by the second pamphlet [that by Ravenstone], namely, that the increase in the productive power of labour only increases capital, the wealth of others which dominates labour. Finally, the third pamphlet[o] bursts forth with the general statement, which is the inevitable consequence of Ricardo s presentation that capital is unproductive. This is in contrast to Torrens, Malthus and others, who, taking one aspect of the Ricardian theory as their point of departure, turn Ricardo s statement that labour is the creator of value into the opposite that capital is the creator of value. The pamphlet, moreover, disputes the statement which recurs in all of them, from Smith to Malthus, especially in the latter where it is elevated into an absolute dogma (ditto in the case of James Mill) that labour is absolutely dependent on the amount of capital available, as this is the condition of its existence. Pamphlet No. 1 ends with the statement: According to Hodgskin, circulating capital is nothing but the juxtaposition of the different kinds of social labour (coexisting labour) and accumulation is nothing but the amassing of the productive powers of social labour, so that the accumulation of the skill and knowledge (scientific power) of the workers themselves is the chief form of accumulation, and infinitely more important than the accumulation which goes hand in hand with it and merely represents it of the existing objective conditions of this accumulated activity. These objective conditions are only nominally accumulated and must be constantly produced anew and consumed anew. These are simply further elaborations of Galiani s thesis: The whole objective world, the world of commodities , vanishes here as a mere aspect, as the merely passing activity, constantly performed anew, of socially producing men. Compare this idealism with the crude, material fetishism into which the Ricardian theory develops in the writings of this incredible cobbler , McCulloch, where not only the difference between man and animal disappears but even the difference between a living organism and an inanimate object. And then let them say that as against the lofty idealism of bourgeois political economy, the proletarian opposition has been preaching a crude materialism directed exclusively towards the satisfaction of coarse appetites. In his investigations into the productivity of capital, Hodgskin is remiss in that he does not distinguish between how far it is a question of producing use-values or exchange-values. Further but this has historical justification he takes capital as it is defined by the economists. On the one hand (insofar as it operates in the real process of production) as a merely physical condition of labour, and therefore of importance only as a material element of labour, and (in the process of the production of value) nothing more than the quantity of labour measured by time, that is, nothing different from this quantity of labour itself. On the other hand, although in fact, insofar as it appears in the real process of production, it is a mere name for, and re-christening of, labour itself, it is represented as the power dominating and engendering labour, as the basis of the productivity of labour and as wealth alien to labour. And this without any intermediate links. This is how he found it. And he counterposes the real aspect of economic development to this bourgeois humbug. In accordance with the tradition he found prevailing among the economists, he distinguishes between circulating and fixed capital; circulating capital moreover is described as that part which mainly consists of, or is used as, means of subsistence for the workers. It is maintained that division of labour is a consequence of previous accumulation of capital . But the effects attributed to a stock of commodities, under the name of circulating capital, are caused by coexisting labour (op. cit., pp. 8, 9). Faced with the crude conception of the economists, it is quite correct to say that circulating capital is only the name for a stock of certain commodities . Since the economists have not analysed the specific social relationship which is represented in the metamorphosis of commodities, they can understand only the material aspect of circulating capital. All the differentiations in capital arising from the circulation process ||868| in fact the circulation process itself are actually nothing but the metamorphosis of commodities (determined by their relationship to wage-labour as capital) as an aspect of the reproduction process. Division of labour is, in one sense, nothing but coexisting labour, that is, the coexistence of different kinds of labour which are represented in different kinds of products or rather commodities. The division of labour in the capitalist sense, as the breaking down of the particular labour which produces a definite commodity into a series of simple and coordinated operations divided up amongst different workers, presupposes the division of labour within society outside the workshop, as separation of occupations. On the other hand, it [division of labour] increases it [separation of occupations]. The product is increasingly produced as a commodity in the strict sense of the word, its exchange-value becomes the more independent of its immediate existence as use-value in other words its production becomes more and more independent of its consumption by the producers and of its existence as use-value for the producers the more one-sided it itself becomes, and the greater the variety of commodities for which it is exchanged, the greater the kinds of use-values in which its exchange-value is expressed, and the larger the market for it becomes. The more this happens, the more the product can be produced as a commodity; therefore also on an increasingly large scale. The producer s indifference to the use-value of his product is expressed quantitatively in the amounts in which he produces it, which bear no relation to his own consumption needs, even when he is at the same time a consumer of his own product. The division of labour within the workshop is one of the methods used in this mass production and consequently in the production of the product [as a commodity]. Thus the division of labour within the workshop is based on the division of occupations in society. The size of the market has two aspects. First, the mass of consumers, their numbers. But secondly, also, the number of occupations which are independent of one another. The latter is possible without the former. For example, when spinning and weaving become divorced from domestic industry and agriculture, all those engaged in agriculture become a market for spinners and weavers. They likewise [form markets] for one another as a consequence of the separation of their occupations. What the division of labour in society presupposes above all, is that the different kinds of labour have become independent of one another in such a way that their products confront one another as commodities and must be exchanged, that is, undergo the metamorphosis of commodities and stand in relation to one another as commodities. (This is why in the Middle Ages, the towns prohibited the spread of as many professions as possible to the countryside, not merely for the purpose of preventing competition the only aspect seen by Adam Smith but in order to create markets for themselves.) On the other hand, the proper development of the division of labour presupposes a certain density of population. The development of the division of labour in the workshop depends even more on this density of population. This latter division is, to a certain extent, a pre-condition for the former and in turn intensifies it still further. It does this by splitting formerly correlated occupations into separate and independent ones, also by differentiating and increasing the indirect preliminary work they require; and as a result of the increase in both production and the population and the freeing of capital and labour it creates new wants and new modes of satisfying them. Therefore when Hodgskin says division of labour is the effect not of a stock of Commodities called circulating capital but of coexisting labour , it would be tautologous if in this context he understood by division of labour the separation of trades. It would only mean that division of labour is the cause or the effect of the division of labour. He can therefore only mean that division of labour within the workshop depends on the separation of occupations, the social division of labour, and is, in a certain sense, its effect. It is not a stock of commodities which gives rise to this separation of occupations and with it the division of labour in the workshop, but it is the separation of occupations (and division of labour) that is manifested in the stock of commodities, or rather in the fact that a stock of products becomes a stock of commodities. (The properties, the characteristic features of the capitalist mode of production and therefore of capital itself insofar as it expresses a definite relation of the producers to one another and to their products, are inevitably always described by the economists as the properties of the objects.) ||869| If, however, previous accumulation of capital is being discussed from an economic standpoint (see Turgot, Smith, etc.) as a condition for the division of labour, then what is understood by this is the previous concentration of a stock of commodities as capital in the possession of the buyer of labour, since the kind of co-operation characteristic of the division of labour presupposes a conglomeration of workers consequently, accumulation of the means of subsistence necessary for them while they are working increased productivity of labour consequently, increase in the amount of raw materials, tools and auxiliary materials which must be available in order that labour proceeds continuously, since it constantly requires large amounts of these things in short, of the objective conditions of production on a large scale. Here, accumulation of capital cannot mean increase in the amount of means of subsistence, raw materials and instruments of labour as a condition for the division of labour, for insofar as the accumulation of capital is taken to mean this, it is a consequence of the division of labour, not its pre-condition. Similarly, accumulation of capital cannot here mean that means of subsistence for the workers must be available in general before new necessaries are reproduced, or that products of their labour must constitute the raw material and means of labour for the new production which they carry out. For this is the pre-condition of labour in general and was just as true before the development of the division of labour as it is after it. On the one hand: if we consider the material element of accumulation, it means nothing more than that the division of labour requires the concentration of means of subsistence and means of labour at particular points, whereas formerly these were scattered and dispersed as long as the workers in individual trades which could not have been very numerous under these conditions themselves carried out all the manifold and consecutive operations required for the production of one or more products. Not an increase in absolute terms is presupposed, but concentration, the gathering together of more at a given point, and of relatively more [means of labour] compared with the numbers of workers brought together there. More flax, for example, [is used] by the workers in manufacture (in proportion to their numbers) than the relative amount of flax required in proportion to all the peasants both men and women who used to spin flax as a sideline. Hence, conglomeration of workers, concentration of raw materials, instruments, and means of subsistence. On the other hand: if we consider the historical foundation on which this process develops, from which manufacture arises, the industrial mode of production whose characteristic feature is the division of labour, then this concentration can only take place in the form that these workers are assembled together as wage-workers, that is, as workers who must sell their labour-power because their conditions of labour confront them as alien property, as an independent, alien force. This implies that these conditions of labour confront them as capital; in other words, these means of subsistence and means of labour (or, what amounts to the same thing, the disposal of them through the intermediary of money) are in the hands of individual owners of money or of commodities, who, as a result, become capitalists. The loss of the conditions of labour by the workers is expressed in the fact that these conditions become independent as capital or as things at the disposal of the capitalists. Thus primitive accumulation, as I have already shown, means nothing but the separation of labour and the worker from the conditions of labour, which confront him as independent forces. The course of history shows that this separation is a factor in social development. Once capital exists, the capitalist mode of production itself evolves in such a way that it maintains and reproduces this separation on a constantly increasing scale until the historical reversal takes place. It is not the ownership of money which makes the capitalist a capitalist. For money to be transformed into capital, the prerequisites for capitalist production must exist, whose first historical presupposition is that separation. The separation, and therefore the existence of the means of labour as capital, is given in capitalist production; this separation which constantly reproduces itself and expands, is the foundation of production. Accumulation by means of the reconversion of profit, or surplus product, into capital now becomes a continuous process as a result of which the increased products of labour which are at the same time its objective conditions, conditions of reproduction, continuously confront labour as capital, i.e., as forces personified in the capitalist which are alienated from Labour and dominate it. Consequently, it becomes a specific function of the capitalist to accumulate, that is, to reconvert a part of the surplus product into conditions of labour. And the stupid economist concludes from this that if this operation did not proceed in this contradictory, specific way, it could not take place at all. Reproduction on an extended scale is inseparably connected in his mind with accumulation, the capitalist form of this reproduction. ||870| Accumulation merely presents as a continuous process what in primitive accumulation appears as a distinct historical process, as the process of the emergence of capital and as a transition from one mode of production to another. The economists, caught as they are in the toils of the notions proper to the agents of the capitalist mode of production, advance a double quid pro quo, each side of which depends on the other. On the one hand, they transform capital from a relationship into a thing, a stock of commodities (already forgetting that commodities themselves are not things) which, insofar as they serve as conditions of production for new labour, are called capital and, with regard to their mode of reproduction, are called circulating capital. On the other hand, they transform things into capital, that is, they consider the social relationship which is represented in them and through them as an attribute which belongs to the thing as such as soon as it enters as an element into the labour process or the technological process. [On the one hand,] the concentration in the hands of non-workers of raw materials and of the disposition over the means of subsistence, i.e., the powers dominating labour, the preliminary condition for the division of labour (later on, the division of labour increases not only concentration, but also the amount [available for] concentration by increasing the productivity of labour), in other words the preliminary accumulation of capital as the condition for the division of labour therefore means for them the augmentation or concentration (they do not differentiate between the two) of means of subsistence and means of labour. On the other hand, these necessaries and means of labour would not operate as objective conditions of production if these things did not possess the attribute of being capital, if the product of labour, the condition of labour, did not absorb labour itself; [if] past labour did not absorb living labour, and if these things did not belong to them selves or by proxy to the capitalist instead of to the worker. As if the division of labour was not just as possible if its conditions belonged to the associated workers (although historically it could not at first appear in this form, but can only achieve it as a result of capitalist production) and were regarded by the latter as their own products and the material elements of their own activity, which they are by their very nature. Furthermore, because in the capitalist mode of production capital appropriates the surplus product of the worker, consequently, because it has appropriated the products of labour and these now confront the worker in the form of capital, it is clear that the conversion of the surplus product into conditions of labour can only be initiated by the capitalist and only in the form that he turns the products of labour which he has appropriated without any equivalent into means of production of new labour performed without receiving an equivalent. Consequently, the extension of reproduction appears as the transformation of profit into capital and as a saving by the capitalist who, instead of consuming the surplus product which he has acquired gratis, converts it anew into a means of exploitation, but is able to do this only insofar as he converts the surplus product again into productive capital; this entails the conversion of surplus product into means of labour. As a result, the economists conclude that the surplus product cannot serve as an element of new production if it has not been transformed previously from the product of the worker into the property of his employer in order to serve as capital once again and to repeat the old process of exploitation. The more inferior economists add to this the idea of hoarding and the accumulation of treasure. Even the better ones Ricardo, for example transfer the notion of renunciation from the hoarder to the capitalist. The economists do not conceive capital as a relation. They cannot do so without at the same time conceiving it as a historically transitory, i.e., a relative not an absolute form of production. Hodgskin himself does not share this concept. Insofar as it justifies capital it does not justify its justification by the economists, but on the contrary refutes it. Thus Hodgskin is not concerned in all this. As far as matters stood between him and the economists, the kind of polemic he had to wage seemed to be mapped out beforehand and quite simple. To put it simply, he had to vindicate the one aspect which the economists elaborate scientifically against the fetishistic conception they accept without thinking, na vely and unconsciously from the capitalist way of looking at things. The utilisation of the products of previous labour, of labour in general, as materials, tools, means of subsistence, is necessary if the worker wants to use his products for new production. This particular mode of consumption of his products is productive. But what on earth has this kind of utilisation, this mode of consumption of his product, to do with the domination of his product over him, with its existence as capital, with the concentration ||870a| in the hands of individual capitalists of the right to dispose of raw materials and means of subsistence and the exclusion of the workers from ownership of their products? What has it to do with the fact that first of all they have to hand over their product gratis to a third party in order to buy it back again with their own labour and, what is more, they have to give him more labour in exchange than is contained in the product and thus have to create more surplus product for him? Past labour exists here in two forms. [In one] as product, use-value. The process of production requires that the workers consume one portion of this product [as means of subsistence, and use] another portion as raw materials and instruments of labour. This applies also to the technological process and merely demonstrates the relations that have to exist in industrial production between the workers and the products of their own labour, their own products, in order to turn them into means of production. Or, [past labour exists as] value. This only shows that the value of their new product represents not only their present, but also their past labour, and that by increasing it they retain the old value, because they increase it. The claim put forward by the capitalist has nothing to do with this process as such. It is true that he has appropriated the products of labour, of past labour, and that he therefore possesses a means for acquiring new products and living labour. This, however, is precisely the kind of procedure against which protests are made. The preliminary concentration and accumulation necessary for the division of labour must not take the form of accumulation of capital. It does not follow that because this [concentration] is necessary, the capitalist must inevitably have the disposal of the conditions of labour of today created by the labour of yesterday. If accumulation of capital is supposed to be nothing but accumulated labour, it by no means implies that accumulation of other people s labour has to take place. Hodgskin however does not follow this simple path, and at first this seems strange. In his polemic against the productivity of capital, to begin with, against circulating and then even more, against fixed capital, he seems to oppose or to reject the importance of past labour, or of its product for the reproduction process as a condition of new labour. From this follows the importance of past labour embodied in products for labour as present [q] Why this change? Since the economists identify past labour with capital past labour being understood in this case not only in the sense of concrete labour embodied in the product, but also in the sense of social labour, materialised labour-time it is understandable that they, the Pindars of capital, emphasise the objective elements of production and overestimate their importance as against the subjective element, living, immediate labour. For them, labour only becomes efficacious when it becomes capital and confronts itself, the passive element confronting its active counterpart. The producer is therefore controlled by the product, the subject by the object, labour which is being embodied by labour embodied in an object, etc. In all these conceptions, past labour appears not merely as an objective factor of living labour, subsumed by it, but vice versa; not as an element of the power of living labour, but as a power over this labour. The economists ascribe a false importance to the material factors of labour compared with labour itself in order to have also a technological justification for the specific social form, i.e., the capitalist form, in which the relationship of labour to the conditions of labour is turned upside-down, so that it is not the worker who makes use of the conditions of labour, but the conditions of labour which make use of the worker. It is for this reason that Hodgskin asserts on the contrary that this physical factor, that is, the entire material wealth, is quite unimportant compared with the living process of production and that, in fact, this wealth has no value in itself, but only insofar as it is a factor in the living production process. In doing so, he underestimates somewhat the value which the labour of the past has for the labour of the present, but in opposing economic fetishism this is quite all right. If in capitalist production hence in political economy, its theoretical expression past labour were met with only as a pedestal etc. created by labour itself, then such a controversial issue would not have arisen. It only exists because in the real life of capitalist production, as well as in its theory, materialised labour appears as a contradiction to itself, to living labour. In exactly the same way in religious reasoning, the product of thought not only claims but exercises domination over thought itself. |870a|| . ||865| The proposition means first of all: the simultaneous coexistence of living labour brings about a large part of the effects which are attributed to the product of previous labour called circulating capital. For example, a part of circulating capital consists of the stock of means of subsistence which the capitalist is supposed to have stored up to support the labourer while working. The formation of a reserve stock is by no means a feature peculiar to capitalist production although, since under it production and consumption are greater than ever before, the amount of commodities on the market the amount of commodities in the sphere of circulation is likewise greater than ever before. Here memories of hoarding, of accumulation of treasure by hoarders are still discernible. The consumption fund must be disregarded first of all because we are speaking here of capital and of industrial production. What has reached the sphere of individual consumption, whether it is consumed more quickly or more slowly, has ceased to be capital. (Although it can be partly reconverted into capital, for instance, houses, parks, crockery.) Because of moths, even of clothing only a very small stock is ever prepared, compared to the general consumption (loc. cit., p. 11). ||866| Circulating capital is created only for consumption; while fixed capital is made, not to be consumed, but to aid the labourer in producing those things which are to be consumed (loc. cit., p. 19). Thus first of all: {The part of capital which consists of instruments and materials of labour is as commodities already created always a pre-condition in each particular branch of production. It is impossible to spin cotton which has not yet been produced, to operate spindles which have yet to be manufactured, or to burn coal which has not yet been brought up from the mine. These always enter the [production] process as forms of existence of previous labour. Existing labour thus depends on antecedent labour and not only on coexisting labour, although this antecedent labour, whether in the form of means of labour or materials of labour, can only be of any use (productive use) when it is in contact with living labour as a material element of it. Only as an element of industrial consumption, i.e., consumption by labour. But when considering circulation and the reproduction process, we have seen that it is only possible to reproduce the commodity after it is finished and converted into money, because simultaneously all its elements have been produced and reproduced by means of coexisting labour. A twofold progression takes place in production. Cotton, for example, advances from one phase of production to another. It is produced first of all as raw material, then it is subjected to a number of operations until it is fit to be exported or, if it is further worked up in the same country, it is handed over to a spinner. It then goes on from the spinner to the weaver and from the weaver to the bleacher, dyer, finisher, and thence to various workshops where it is worked up for definite uses, i.e., articles of clothing, bed-linen, etc. Finally it leaves the last producer for the consumer and enters into individual consumption if it does not enter into industrial consumption as means (not material) of labour. But whether it is to be consumed industrially or individually, it has acquired its final form as use-value. What emerges from one sphere of production as a product enters another as a condition of production, and in this way, goes through many successive phases until it receives its last finish as use-value. Here previous labour appears continually as the condition for existing labour. Simultaneously, however, while the product is advancing in this way from one phase to another, while it is undergoing this real metamorphosis, production is being carried on at every stage. While the weaver spins the yarn, the spinner is simultaneously spinning cotton, and fresh quantities of raw cotton are in the process of production. Since the continuous, constantly repeated process of production is, at the same time, a process of reproduction, it is therefore equally dependent on the coexisting labour which produces the various phases of the product simultaneously, while the product is passing through metamorphosis from one phase to another. [Raw] cotton, yarn, fabric, are not only produced one after the other and from one another, but they are produced and reproduced simultaneously, alongside one another. What appears as the effect of antecedent labour, if one considers the production process of the individual commodity, presents itself at the same time as the effect of coexisting labour, if one considers the reproduction process of the commodity, that is, if one considers this production process in its continuous motion and in the entirety of its conditions, and not merely an isolated action or a limited part of it. There exists not only a cycle comprising various phases, but all the phases of the commodity are simultaneously produced in the various spheres and branches of production. If the same peasant just plants flax, then spins it, then weaves it, these operations are performed in succession, but not simultaneously as the mode of production based on the division of labour within society presupposes. No matter what phase of the production process of an individual commodity is considered, the antecedent labour only acquires significance as a result of the living labour which it provides with the necessary conditions of production. On the other hand, however, these conditions of production without which living labour cannot realise itself always appear as the result of antecedent labour. Thus the co-operating labour of the contributing branches of labour always appears as a passive factor and, as such a passive factor, it is a pre-condition. The economists emphasise this aspect. In production and circulation, on the other hand, the mediating social labour on which the [production] process of the commodity in each particular phase depends and by which it is determined, appears as present, coexisting, contemporaneous labour. The early forms of the commodity and its successive or completed forms are produced simultaneously. Unless this happened it would not be possible, after it has undergone its real metamorphosis, to reconvert it from money into its conditions of existence. ||870b| A commodity is thus the product of antecedent labour only insofar as it is the product of contemporaneous living labour. From the capitalist point of view, therefore, all material wealth appears only as a fleeting aspect of the flow of production as a whole, which includes the process of circulation.} Hodgskin examines only one of the constituent parts of circulating capital. One part of circulating capital is however continuously converted into fixed capital and auxiliary materials and only the other part is converted into articles of consumption. Moreover, even that part of circulating capital which is ultimately transformed into commodities intended for individual consumption always exists, alongside the final form in which it emerges from the finishing phase as end product, simultaneously in the earlier phases of production in its rudimentary forms as raw material or semi-manufactured goods, removed in various degrees from the final form of the product in which it cannot as yet enter into consumption. The problem Hodgskin is concerned with is: what is the relation of the present labour performed by the worker for the capitalist to the labour embodied in his articles of consumption, the labour contained in those articles on which his wages are spent, which, in actual fact, are the use-values of which variable capital consists? It is admitted that the worker cannot labour without finding these articles ready for consumption. And that is why the economists say that circulating capital the previous labour, commodities already created which the capitalist has stored up is the condition for labour and, amongst other things, also the condition for the division of labour. When the conditions of production, and especially circulating capital in Hodgskin s sense of the term, are being discussed, it is usual to declare that the capitalist must have accumulated the food which the worker has to consume before his new commodity is finished, that is, while he works, while the commodity he produces is only in statu nascendi.[s] This is shot through with the notion that the capitalist either gathers things like a hoarder or that he stores up a supply of food like the bees their honey. This however is merely a modus loquendi.[t] First of all, we are not speaking here of the shopkeepers who sell means of subsistence. These must naturally have a full stock in trade. Their stores, shops, etc. are simply reservoirs in which the various commodities are stored once they are ready for circulation. This kind of storing is merely an interim period in which the commodity remains until it leaves the sphere of circulation and enters that of consumption. It is its mode of existence as a commodity on the market. Strictly speaking, as a commodity it exists only in this form. It does not affect the matter whether, instead of being in the possession of the first seller (the producer), the commodity is in the possession of the third or fourth and finally passes into the possession of the seller who sells it to the real consumer. It merely means that, in the intermediate stage, exchange of capital (really of capital plus profit, for the producer sells not only the capital in the commodity but also the profit made on the capital) for capital is taking place, and in the last stage exchange of capital for revenue (provided the commodity is intended not for industrial but for individual consumption, as is assumed here). The commodity which is a finished use-value and marketable, enters the market as a commodity, in the phase of circulation; all commodities enter this phase when they undergo their first metamorphosis, the transformation into money. If this is called storing up then it means nothing more than circulation or the existence of commodities as commodities. This kind of storing is exactly the opposite of treasure-hoarding, the aim of which is to retain commodities permanently in the form in which they are capable of entering into circulation, and it achieves this only by withdrawing commodities in the form of money from circulation. If production, and therefore also consumption, is varied and on a mass scale, then a greater quantity of the most diverse commodities will be found continually at this stopping place, at this intermediate station, in a word, in circulation or on the market. Regarded from the standpoint of quantity, storing on a large scale in this context means nothing more than production and consumption on a large scale. The stop made by the commodities, their sojourn at this stage of the process, their presence on the market instead of in the mill or in a private house (as articles of consumption) or in the shop or the store of the shopkeeper, is only ||871| a tiny fraction of time in their life-process. The immobile, independent existence of this world of commodities, of things, is only illusory. The station is always full, but always full of different travellers. The same commodities (commodities of the same kind) are constantly produced anew in the sphere of production, available on the market and absorbed in consumption. Not the identical commodities, but commodities of the same type, can always be found in these three stages simultaneously. If the intermediate stage is prolonged so that the commodities which emerge anew from the sphere of production find the market still occupied by the old ones, then it becomes overcrowded, a stoppage occurs, the market is glutted, the commodities decline in value, there is over-production. Where, therefore, the intermediate stage of circulation acquires independent existence so that the flow of the stream is not merely slowed down, where the existence of the commodities in the circulation phase appears as storing up, then this is not brought about by a free act on the part of the producer, it is not an aim or an immanent aspect of production, any more than the flow of blood to the head leading to apoplexy is an immanent aspect of the circulation of the blood. Capital as commodity capital (and this is the form in which it appears in the circulation phase, on the market) must not become stationary, it must only constitute a pause in the movement. Otherwise the reproduction process is interrupted and the whole mechanism is thrown into confusion. This materialised wealth which is concentrated at a few points is and can only be very small in comparison to the continuous stream of production and consumption. Wealth, therefore, according to Smith, is the annual reproduction. It is not, that is to say, something out of the dim past. It is always something which emerges from yesterday. lf, on the other hand, reproduction were to stagnate due to some disturbances or others, then the stores etc. would soon empty, there would be shortages and it would soon be evident that the permanency which the existing wealth appears to possess, is only the permanency of its being replaced, of its reproduction, that it is a continuous materialisation of social labour. The movement C M C also takes place in the transactions of the shopkeeper. Insofar as he makes a profit , it is a matter which does not concern us here. He sells goods and buys the same goods (the same type of goods) over again. He sells them to the consumer and buys them again from the producer. Here the same (type of) commodity is converted perpetually into money and money back again continuously into the same commodity. This movement, however, simply represents continuous reproduction, continuous production and consumption, for reproduction includes consumption. (The commodity must be sold, must reach the sphere of consumption in order that it can be reproduced.) It must be accepted as a use-value. (For C M for the seller is M C for the buyer, that is, the conversion of money into a commodity as use-value.) The reproduction process, since it is a unity of circulation and production, includes consumption, which is itself an aspect of circulation. Consumption is itself both an aspect and a condition of the reproduction process. If one considers the process in its entirety, the shopkeeper, in fact, pays the producer of the commodities with the same sum of money as the consumer pays him when he buys from him. He represents the consumer in his dealings with the producer and the producer in his dealings with the consumer. He is both seller and buyer of the same commodity. The money with which he pays is, in fact, considered from a purely formal standpoint, the final metamorphosis of the consumer s commodity. The latter transforms his money into the commodity as a use-value. The passing of the money into the shopkeeper s hands thus signifies the consumption of the commodity or, considered formally, the transition of the commodity from circulation into consumption. Insofar as he buys again from the producer with the money, this constitutes the first metamorphosis of the producer s commodity and signifies the transition of the commodity into the intermediate stage, where it remains as a commodity in the sphere of circulation. C M C, insofar as it concerns the transformation of the commodity into the consumer s money and the transformation back again of the money, whose owner is now the shopkeeper, into the same commodity (a commodity of the same kind), expresses merely the constant passing over of commodities into consumption, for the vacuum left by the commodity reaching the sphere of consumption must be filled by the commodity emerging from the production process and now entering this stage. ||872| The period during which the commodity stays in circulation and is replaced by new commodities naturally depends also on the length of time in which the commodities remain in the production sphere, that is, on the duration of their reproduction time, and varies in accordance with their different length. For example, the reproduction of corn requires a year. The corn harvested in the autumn, for example, of 1862 (insofar as it is not used again for seed) must suffice for the whole coming year until autumn 1863. It is thrown all at once into circulation (it is already in circulation when it is placed in the farmers granaries) and absorbed in the various reservoirs of circulation storehouses, corn merchants, millers, etc. These reservoirs serve as channels both for the commodities issuing from production and those going to the consumer. As long as the commodities remain in one of them, they are commodities and are therefore on the market, in circulation. They are withdrawn only piecemeal, in small quantities, by the annual consumption. The replacement, the stream of new commodities which are to displace them, arrives only in the following year. Thus these reservoirs are only depleted gradually, in the measure that their replacements move forward. If there is a surplus and if the new harvest is above the average, then a stoppage takes place. The space which these particular commodities were to have occupied in the market is overstocked. In order to permit the whole quantity to find a place on the market, the price of the commodities is reduced, and this causes them to move again. If the total quantity of use-values is too large, they accommodate themselves to the space they have to occupy by a reduction of their prices. If the quantity is too small, it is expanded by an increase of their prices. On the other hand, commodities which quickly deteriorate as use-values remain only for a very short time in the reservoirs of circulation. The period of time during which they have to be converted into money and reproduced, is prescribed by the nature of their use-value which, if it is not consumed daily or almost daily, is spoilt and consequently ceases to be a commodity. For exchange-value along with its basis, use-value, disappears provided the disappearance of use-value is not itself an act of production. In general, it is clear that although in absolute terms the quantity of the commodities which have been stored up in the reservoirs of circulation increases as a result of the development of industry, because production and consumption increase, this same quantity represents a decrease in comparison with the total annual production and consumption. The transition of commodities from circulation to consumption takes place more rapidly. And for the following reasons. The speed of reproduction increases: 1) When the commodity passes rapidly through its various production phases, that is, when each production phase of the production process is reduced in length; this is due to the fact that the labour-time necessary to produce the commodity in each one of its forms is reduced, this is a result, therefore, of the development of the division of labour, use of machinery, application of chemical processes, etc. <The development of chemistry makes it possible to speed up the transition of commodities from one state of aggregation to another, their combination with other material which, for instance, occurs in dyeing, their separation from [other] substances as in bleaching; in short, both [modifications in] the form of the same substance (its state of aggregation) as well as changes to be brought about in the substance, are artificially accelerated quite apart from the fact, that for vegetative and organic reproduction, plants, animals, etc., are supplied with cheaper substances, that is, substances which cost less labour-time.> 2) Partly as a result of the combination of various branches of industry, that is, the establishment of centres of production for particular industrial branches, [partly] through the development of means of communication, the commodity proceeds rapidly from one phase to another; in other words, the interim period, the interval during which the commodity remains in the intermediate station between one production phase and another is reduced, that is, the transition from one phase of production to another is shortened. 3) This whole development the shortening both of the various phases of the production process and of the transition from one phase to another presupposes production on a large scale, mass production and, at the same time, production based on a large amount of constant capital, especially fixed capital; [it requires] therefore a continuous flow of production. But not in the sense in which we have earlier considered the flow, that is, not as the closing of and overlapping of the separate production phases, but in the sense that there are no deliberate breaks in production. These occur as long as work is done to order, as in ||873| the handicrafts, and continue even in manufacture properly so-called (insofar as this has not been reshaped by large-scale industry). In modern industry, however, work is carried out on the scale allowed by the capital. This process does not wait on demand, but is a function of capital. Capital works on the same scale continuously (if one disregards accumulation or expansion) and constantly develops and extends the productive forces. Production is therefore not only rapid, so that the commodity quickly acquires the form in which it is suitable for circulation, but it is continuous. Production here appears only as constant reproduction and at the same time it takes place on a mass scale. Thus if the commodities remain in the circulation reservoirs for a long time if they accumulate there then they will soon glut them as a result of the speed with which the waves of production follow one another and the huge amount of goods which they deposit continuously in the reservoirs. It is in this sense that Corbet, for example, says the market is always overstocked. But the same circumstances which produce this speed and mass scale of reproduction likewise reduce the necessity for the accumulation of commodities in the reservoirs. In part insofar as it is concerned with industrial consumption this is already implied by the close succession of the production phases which the commodity itself or its ingredients have to undergo. If coal is produced daily on a mass scale and brought to the manufacturer s door by railways, steamships, etc., he does not need to have a stock of coal, or at most only a very small one; or, what amounts to the same thing, if a merchant acts as an intermediary, he only needs to keep a small amount of stock over and above the amount he sells daily and which is daily delivered to him. The same applies to yarn, iron, etc. But apart from industrial consumption, in which the stock of commodities (that is, the stock of the ingredients of commodities) must decline in this way, the shopkeeper likewise enjoys the benefits of the speed of communications first of all, and secondly, the certainty of a continuous and rapid renewal and delivery. Although his stock of commodities may grow in size, each element of it will remain in his reservoir, in a state of transition, for a shorter period of time. In relation to the total amount of commodities which he sells, that is, in relation to the scale of both production and consumption, the stock of commodities which he accumulates and keeps in store, will be small. It is different in the less developed stages of production where reproduction proceeds slowly where therefore more commodities must remain in the circulation reservoirs the means of transport are slow, the communications difficult and, as a consequence, the renewal of stock can be interrupted and a great deal of time elapses as a result between the emptying and the refilling of the reservoir that is, the renewal of the stock in hand. The position is then similar to that of products whose reproduction takes place yearly or half-yearly, in short in more or less prolonged periods of time, owing to the nature of their use-values. <For example, cotton is an illustration of how transport and communications affect the emptying of the reservoir. Since ships continually ply between Liverpool and the United States speed of communications is one factor, continuity another all the cotton supply is not shipped at once. It comes on to the market gradually (the producer likewise does not want to flood the market all at once). It lies at the docks in Liverpool, that is, already in a kind of circulation reservoir, but not in such quantities in relation to the total consumption of the article as would be required if the ship from America arrived only once or twice a year, after a journey of six months. The cotton manufacturer in Manchester and other places stocks his warehouse roughly in accordance with his immediate consumption needs, since the electric telegraph and the railway make the transfer from Liverpool to Manchester possible at a moment s notice.> Special filling of the reservoirs insofar as this is not due to the overstocking of the market, which can happen much more easily in these circumstances than under archaically slow conditions occurs only for speculative reasons and merely in exceptional cases because of a real or suspected fall or rise of prices. Regarding this relative decline in stock, that is, the commodities which are in circulation, compared with the amount of production and consumption, see Lalor, The Economist, Corbet (give the corresponding quotations ||874| after Hodgskin). Sismondi wrongly saw something lamentable in all this (his writings to be looked up as well). (On the other hand, there is indeed a continuous extension of the market and in the degree that the interval of time decreases in which the commodity remains on the market, its flow in space increases, that is, the market expands spatially, and the periphery in relation to the centre, the production sphere of the commodity, is circumscribed by a constantly extending radius.) The fact that consumption lives from hand to mouth, changes its linen and its coat as rapidly as it does its opinions and does not wear the same coat ten years running, etc. is connected with the speed of reproduction, or is another expression of it. To an increasing extent consumption even of articles where this is not demanded by the nature of their use-value takes place almost simultaneously with production and becomes therefore more and more dependent on the present, coexisting labour (since it is, in fact, exchange of coexisting labour). This takes place in the same degree in which past labour becomes an ever more important factor of production, even though this past itself is after all a very recent and only relative one. (The following example demonstrates how closely the keeping of a stock is linked with deficiencies of production. As long as it is difficult to keep cattle throughout the winter, there is no fresh meat in winter. As soon as stock-farming is able to overcome this difficulty, the stock previously made up of substitutes for fresh meat pickled or smoked varieties ceases of itself.) The product only becomes a commodity where it enters into circulation. The production of goods as commodities, hence circulation, expands enormously as a result of capitalist production for the following reasons: 1. Production takes place on a large scale, the quantity, the huge amounts produced, therefore, do not stand in any kind of quantitative relationship to the producer s needs [of his own product]; in fact it is pure chance whether he consumes any, even a small part of his own product. He only consumes his own product on a mass scale where he produces some of the ingredients of his own capital. On the other hand, in the earlier stages [of economic development] only those products which exceed the amount required by the producer himself become commodities or, at any rate, this is mainly the case. 2. The narrow range of goods produced [stands] in inverse ratio to the increased variety of needs. This is due to previously combined branches of production becoming increasingly separated and independent in short, to increasing division of labour within society a contributing factor is the establishment of new branches of production and the increasing variety of commodities produced. ([To be inserted] at the end, after Hodgskin, also Wakefield about this.) This increased variety and differentiation of commodities arises in two ways. The different phases of one and the same product, as well as the auxiliary operations (that is, the labour connected with various constituent parts, etc.) are separated and become different branches of production, independent of one another; or various phases of one product become different commodities. But secondly, owing to labour and capital (or labour and surplus product) becoming free; on the other hand, to the discovery of new practical applications of the same use-value, either because new needs arise as a result of the modification of No. 1 (for example, the need for more rapid and universal means of transport and communication arising with the application of steam in industry) and therefore new means of satisfying them, or new possibilities of utilising the same use-value are discovered, or new substances or new methods (plastic-galvanisation, for instance) for treating well-known substance in different ways. All this amounts to the following: successive phases or states of one product are converted into separate commodities. New products or new values in use are created and become commodities. 3. Transformation of the majority of the population who formerly consumed a mass of products in naturalibus[u] into wage-workers. 4. Transformation of the tenant farmer into an industrial capitalist <and with it the conversion of rent into money rent and generally of all payments in kind (taxes, etc., rent) into money payments>. In general industrial exploitation of the land with the result that it is no longer confined to its own muck-heap as previously, but that both its chemical and mechanical conditions of production even seeds, fertilisers, cattle, etc. are subjected to the process of exchange. 5. Mobilisation of a mass of previously inalienable possessions by conversion into commodities and the creation of forms of property which only exist in negotiable papers. On the one hand, alienation of landed property (the lack of property of the masses causes them, for example, to regard the dwelling in which they live as a commodity). [On the other hand,] railway shares, in short, all kinds of shares. ||875| Back again to Hodgskin now. It is obvious that by storing up [means of subsistence] for the workers by the capitalists one cannot understand that commodities which are passing from production into consumption are in the circulation reservoirs, in the circulation system, on the market. This would mean that the products circulate for the benefit of the worker and become commodities for his sake; and that in general, the production of products as commodities is undertaken for his sake. The worker shares with every other [commodity owner the need] to transform the commodity he sells which in actual fact, though not in form, is his labour at first into money in order to convert the money back again into commodities which he can consume. It is perfectly obvious that [no] division of labour (insofar as it is based on commodity production), [no] wage-labour and, in general, no capitalist production can take place without commodities whether they be means of consumption or means of production being available on the market; that this kind of production is impossible without commodity circulation, without the commodities spending a period of time in the circulation reservoir. For the product is a commodity in the strict sense of the word only within the framework of circulation. It is as true for the worker as for anybody else that he must find his means of subsistence in the form of commodities. The worker, moreover, does not confront the shopkeeper as a worker confronts a capitalist, but as money confronts the commodity, as a buyer faces the seller. There is no relationship of wage-labour to capital here, except of course, where the shopkeeper is dealing with his own workers. But even they, insofar as they buy things from him, do not confront him as workers. They confront him as workers only insofar as he buys from them. Let us therefore leave this circulation agent. But as far as the industrial capitalist is concerned, his stock, his accumulation, consists of: [First] his fixed capital, i.e., buildings, machinery, etc., which the worker does not consume or, insofar as he does consume them, does so through labour, and thus consumes them industrially for the capitalist, and although they are means of labour they are not means of subsistence for him. Secondly, his raw materials and auxiliary materials, the stock of which, insofar as it does not enter directly into production, declines, as we have seen. This likewise does not consist of means of subsistence for the workers. This accumulation by the capitalist for the workers means nothing more than that he does the worker the favour of depriving the latter of his conditions of labour and converting the means of his labour (which are themselves merely the transformed product of his labour) into means for the exploitation of labour. In any case, the worker, while he uses the machines and the raw materials, does not live on them. Thirdly, the commodities, which he keeps in the storehouse or warehouse before they enter into circulation. These are products of labour, not means of subsistence stored in order to maintain labour during the course of production. Thus the accumulation of means of subsistence by the capitalist for the worker means merely that he must possess enough money in order to pay wages with which the worker withdraws the articles of consumption he needs from the circulation reservoir (and, if we consider the [working] class as a whole, with which he buys back part of his own product). This money, however, is simply the transformed form of the commodity which the worker has sold and handed over. In this sense, the means of subsistence are stored up for him in the same way as they are stored up for his capitalist, who likewise buys consumption goods etc. with money (the transformed form of the same commodity). This money may be a mere token of value, it therefore does not have to be a representation of previous labour but, in the hands of whoever possesses it, simply expresses the realised price not of past labour (or previously [sold] commodities) but of the contemporaneous labour or commodities which he sells. [Money has] merely a formal existence. Or since in previous modes of production the worker also had to eat and consume during the course of production irrespective of the period of time required for the production of his product storing up may mean that the worker must first of all transform the product of his labour into the product of the capitalist, into capital, in order to receive back a portion of it in the form of money, in lieu of payment. ||876| What interests Hodgskin about this whole process (with regard to the process as such it is indeed a matter of indifference whether the worker receives the product of contemporaneous or previous labour, just as it does not matter whether he receives the product of his own previous labour or the product of labour performed simultaneously in a different branch) is this: A great part, [or] the greatest part of the products consumed daily by the worker which he must consume whether his own product is finished or not represent by no means stored up labour of bygone time. On the contrary he uses to a large extent products of labour performed the same day or during the same week in which the worker produces his own commodity. For example, bread, meat, beer, milk, newspapers, etc. Hodgskin could also have added that they are partly the products of future labour, for the worker who buys an overcoat with what he has saved out of six months wages buys one which has only been made at the end of the six months, etc. (We have seen that the whole of production presupposes simultaneous reproduction of the required constituent parts and products in their different forms as raw materials, semi-manufactured goods, etc. But all fixed capital presupposes future labour for its reproduction and for the reproduction of its equivalent, without which it cannot be reproduced.) Hodgskin says that during the course of the year the worker must rely to some degree on previous labour (because of the nature of the production of corn, vegetable raw materials, etc.). <This does not apply to a house, for example. As regards use-values which, by their nature, only wear out slowly, are not consumed at once, but gradually used up, it is not due to any action specially devised for the benefit of the workers that these products of previous labour are available on the market . The worker also used to have a dwelling before the capitalist piled up deadly stink-holes for him. (See Laing on this.)> (Apart from the enormous mass of day-to-day needs which are of decisive importance especially to the worker. Who at best, can only satisfy his everyday needs, we have seen that, in general, consumption becomes more and more contemporaneous with production, and therefore, if one considers society as a whole, consumption depends more and more on simultaneous production, or rather on the products of simultaneous production.) But when operations extend over several years, the worker must depend on his own production, on the simultaneous and future producers of other commodities. The worker always has to find his means of subsistence in the form of commodities on the market (the services he buys are ipso facto only brought into being at the moment they are bought); as far as he is concerned they must therefore be the products of antecedent labour, that is of labour which is antecedent to their existence as products but which is by no means antecedent to his own labour with whose price he buys these products. They can be and mostly are contemporaneous products, especially for those who live from hand to mouth. Taking it all in all the storing up of means of subsistence for the workers by the capitalists comes to this. 1) Commodity production presupposes that articles of consumption which one does not produce oneself are available on the market as commodities, or that in general, commodities are produced as commodities. 2) The majority of the commodities consumed by the worker in the final form in which they confront him as commodities, are in fact products of simultaneous labour (they are therefore by no means stored up by the capitalist). 3) In capitalist production, the means of labour and the means of subsistence produced by the worker himself confront him as capital, the one as constant, the other as variable capital; these, the worker s conditions of production, appear as the property of the capitalist; their transfer from the worker to the capitalist and the partial return of the worker s product to the worker, or of the value of his product to the worker, is called the storing up of circulating capital for the worker. These means of subsistence which the worker must always consume before his product is finished, become circulating capital because he [the worker], instead of buying them direct or paying for them with the value either of his past or of his future product ||877|, must first of all receive a draft (money) on it; a draft moreover which the capitalist is entitled to issue only thanks to the worker s past, present or future product. Hodgskin is concerned here with demonstrating the dependence of the worker on the coexisting labour of other workers as against his dependence on previous labour, 1) in order to do away with the phrase about storing up ; 2) because present labour confronts capital, whereas the economists always consider previous labour as such to be capital, that is, an alienated and independent form of labour which is hostile to labour itself. To grasp the all-round significance of contemporaneous labour as against previous labour is however in itself a very important achievement. Hodgskin thus arrives at the following: Capital is either a mere name and pretext or it does not express a thing; the social relation of the labour of one person to the coexisting labour of another, and the consequences, the effects of this relationship, are ascribed to the things which make up so-called circulating capital. Despite the fact that the commodity exists as money, its realisation in use-values depends on contemporaneous labour. ([The labour performed in] the course of a year is itself contemporaneous [labour].) Only a small portion of the commodities entering into direct consumption are the product of more than one year s labour and when they are such as cattle etc., they require renewed labour every year. All operations requiring more than a year depend on continuous annual production. Money however gives everyone command over the labour of some men , over the labour contained in their commodities as well as over the reproduction of this labour, and to that extent therefore over labour itself. What is really stored up , not however as a dead mass but as something living, is the skill of the worker, the level of development of labour. <It is true, however, that the stage of the development of the productivity of labour which exists at any particular time and serves as the starting-point, comprises not only the skill and capacity of the worker, but likewise the material means which this labour has created and which it daily renews. (Hodgskin does not emphasise this because, in opposing the crude views of the economists, it is important for him to lay the stress on the subject so to speak, on the subjective in the subject in contrast to the object.)> This is really the primary factor, the point of departure and it is the result of a process of development. Accumulation in this context means assimilation, continual preservation and at the same time transformation of what has already been handed over and realised. In this way Darwin makes accumulation through inheritance the driving principle in the formation of all organic things, of plants and animals; thus the various organisms themselves are formed as a result of accumulation and are only inventions , gradually accumulated inventions of living beings. But this is not the only prerequisite of production. Such a prerequisite in the case of animals and plants is external nature, that is both inorganic nature and their relationship with other animals and plants. Man, who produces in society, likewise faces an already modified nature (and in particular natural factors which have been transformed into means of his own activity) and definite relations existing between the producers. This accumulation is in part the result of the historical process, in part, as far as the individual worker is concerned, transmission of skill. Hodgskin says that as far as the majority of the workers are concerned, circulating capital plays no part in this accumulation. He has demonstrated that the stock of commodities (means of subsistence) prepared is always small in comparison with the total amount of consumption and production. On the other hand, the degree of skill of the existing population is always the pre-condition of production as a whole; it is therefore the principal accumulation of wealth and the most important result of antecedent labour; its form of existence, however, is living labour itself. With regard to the assertion of the economists that the number of workers (and therefore the well-being or poverty of the existing working population) depends on the amount of circulating capital available, Hodgskin comments correctly, as follows: What is attributed to circulating capital, to a stock of commodities, is the effect of coexisting labour . In other words, Hodgskin says that the effects of a certain social form of labour are ascribed to objects, to the products of labour; the relationship itself is imagined to exist in material form. We have already seen that this is a characteristic of labour based on commodity production, on exchange-value, and this quid pro quo is revealed in the commodity, in money (Hodgskin does not see this), and to a still higher degree in capital. The effects of things as materialised aspects of the labour process are attributed to them in capital, in their personification, their independence in respect of labour. They would cease to have these effects if they were to cease to confront labour in this alienated form. The capitalist, as capitalist, is simply the personification of capital, that creation of labour endowed with its own will and personality which stands in opposition to labour. Hodgskin regards this as a pure subjective illusion which conceals the deceit and the interests of the exploiting classes. He does not see that the way of looking at things arises out of the actual relationship itself; the latter is not an expression of the former, but vice versa. In the same way, English socialists say We need capital, but not the capitalists . But if one eliminates the capitalists, the means of production cease to be capital. <The Verbal Observer , Bailey, and others remark that value , valeur express a property of things. In fact the terms originally express nothing but the use-value of things for people, those qualities which make them useful or agreeable etc. to people. It is in the nature of things that value , valeur , Wert can have no other etymological origin. Use-value expresses the natural relationship between things and men, in fact the existence of things for men. Exchange-value, as the result of the social development which created it, was later superimposed on the word value, which was synonymous with use-value. It [exchange-value] is the social existence of things. The value of a thing is, in fact, its own virtus[w], while its exchange-value is quite independent of its material qualities. Hodgskin now turns to fixed capital. It is productive power which has been produced and, in its development in large-scale industry, it is an instrument which social labour has created. As far as fixed capital is concerned: Here at last, the nature of capital is understood correctly. For example, if the profit were always accumulated, a capital of 100 at 10 per cent would amount to something like 673, or since a little more or less makes no difference here say 700, in 20 years. Thus the capital will have multiplied itself sevenfold over a period of 20 years. According to this yardstick, if only simple interest were paid, it would have to be 30 per cent per annum instead of 10 per cent, that is, three times as much profit, and the more we increase the number of years that elapse, the more the rate of interest or the rate of profit calculated at simple interest per annum will increase, and this increase is the more rapid, the larger the capital becomes. In fact, however, capitalist accumulation is nothing but the reconversion of interest into capital (since interest and profit for our purpose, i.e., for the purpose of our calculation, are identical). Thus it is compound interest. First there is a capital of 100; it yields 10 per cent profit (or interest). This is added to the capital which is now 110. This now becomes the capital. The interest on this amount is therefore not simply interest on a capital of 100 but interest on 100 capital plus 10 interest. That is compound interest. Thus, at the end of the second year, we have (100 capital + 10 interest) +10 interest+1 interest=(100 capital+ 10 interest)+11 interest=121. This is the capital at the beginning of the third year. In the third year we get (100 capital+10 interest)+11 interest+ 121/10 interest, so that at the end of it the capital is 1331/10 ||880| We have: etc. *The sign indicates interest on interest. In other words, more than half the capital is made up of interest in the ninth year and the portion of capital consisting of interest thus increases in geometrical progression. We have seen that over 20 years, capital increased sevenfold, whereas, even according to the most extreme assumption of Malthus, the population can only double itself every twenty-five years. But let us assume that it doubles itself in twenty years, and therefore the working population as well. Taking one year with another, the interest would have to be 30 per cent three times greater than it is. If one assumes, however, that the rate of exploitation remained unchanged, in 20 years the doubled population would only be able to produce twice as much labour as it did previously (and [the new generation] would be unfit for work during a considerable part of these 20 years, scarcely during half this period would it be able to work, in spite of the employment of children); it would therefore produce only twice as much surplus labour, but not three times as much. The rate of profit (and consequently the rate of interest) is determined: 1) If the rate of exploitation is assumed to be constant by the number of workers in employment, by the absolute mass of workers employed, that is, by the growth of the population. Although this number increases, its ratio to the total amount of capital employed declines with the accumulation of capital and with industrial development (consequently the rate of profit declines if the rate of exploitation remains the same). Likewise the population does not by any means [increase] in the same geometrical progression as the computed compound interest. The growth of the population at a given stage of industrial development is the explanation for the increase in the amount of surplus-value and of profit, but also for the fall in the rate of profit. 2) [By] the absolute length of the normal working-day, that is, by increasing the rate of surplus-value. Thus the rate of profit can increase as a result of the extension of labour-time beyond the normal working-day. However, this has its physical and by and large its social limits. That in the same measure as workers set more capital in motion, the same capital commands more absolute labour-time ||881| is out of the question. 3) If the normal working-day remains the same, surplus labour can be increased relatively by reducing the necessary labour-time and reducing the prices of the necessaries which the worker consumes, in comparison with the development of the productive power of labour. But this very development of productive power reduces variable capital relative to constant. It is physically impossible that the surplus labour-time of, say, two men who displace twenty, can, by any conceivable increase of the absolute or relative [surplus] labour-time, equal that of the twenty. If each of the twenty men only work 2 hours of surplus labour a day, the total will be 40 hours of surplus labour, whereas the total life span of the two men amounts only to 48 hours in one day. The value of labour-power does not fall in the same degree as the productivity of labour or of capital increases. This increase in productive power likewise increases the ratio between constant and variable capital in all branches of industry which do not produce necessaries (either directly or indirectly) without giving rise to any kind of alteration in the value of labour. The development of productive power is not even. It is in the nature of capitalist production that it develops industry more rapidly than agriculture. This is not due to the nature of the land, but to the fact that, in order to be exploited really in accordance with its nature, land requires different social relations. Capitalist production turns towards the land only after its influence has exhausted it and after it has devastated its natural qualities. An additional factor is that, as a consequence of landownership, agricultural products are expensive compared with other commodities, because they are sold at their value and are not reduced to their cost-price. They form, however, the principal constituent of the necessaries. Furthermore, if one-tenth of the land is dearer to exploit than the other nine-tenths, these latter are likewise hit artificially by this relative barrenness, as a result of the law of competition. The rate of profit would in fact have to grow if it is to remain constant while accumulation of capital is taking place. The same worker as long as capital yields 10 of surplus labour must, as soon as interest accumulates on interest and thus increases the capital employed, produce threefold, fourfold, fivefold in progression of compound interest, which is nonsense. The amount of capital which the worker sets in motion, and whose value is maintained and reproduced by his labour, is something quite different from the value which he adds, and therefore from the surplus-value. If the amount of capital is 1,000 and the labour added equals 100, then the capital reproduced amounts to 1,100. If the capital is 100 and the labour added is 20, then the capital reproduced is 120. The rate of profit in the first case is 10 per cent and in the second, it is 20 per cent. Nevertheless, more can be accumulated from 100 than from 20. Thus the flow of capital or its accumulation continues (apart from the reduction in its value as a result of the increase in productive power) in proportion to the force it already possesses, but not in proportion to the size of the rate of profit. This explains that accumulation its amount may increase in spite of a falling rate of profit, apart from the fact that, while productivity rises, a larger portion of the revenue can be accumulated, even when the rate of profit declines, than when there is a higher rate of profit together with lower productivity. A high rate of profit insofar as it is based on a high rate of surplus-value is possible if very long hours are worked, although the labour is unproductive. It is possible because the workers needs, and therefore the minimum wage, are small, although the labour is unproductive. The lack of energy with which the labour is performed will correspond to the low level of the minimum wage. Capital is accumulated slowly in both cases despite the high rate of profit. The population is stagnant and the labour-time which the product costs is high, although the wages received by the workers are small. ||882| I have explained the decline in the rate of profit in spite of the fact that the rate of surplus-value remains the same or even rises, by the decrease of the variable capital in relation to the constant, that is, of the living, present labour in relation to the past labour which is employed and reproduced. Hodgskin and the man who wrote The Source and Remedy of the National Difficulties explain it by the fact that it is impossible for the worker to fulfil the demands of capital which accumulates like compound interest. In its general sense, this amounts to the same thing. If I say that, as capital accumulates, the rate of profit declines because constant capital increases in relation to variable capital, it means that, disregarding the specific form of the different portions of capital, the capital employed increases in relation to the labour employed. [The rate of] profit falls not because the worker is exploited less, but because altogether less labour is employed in relation to the capital employed. For example, let us assume that the ratio of variable to constant capital is 1:1. Then, if the total capital amounts to 1,000, c [constant capital] will be 500, and v [variable capital] likewise 500. If the rate of surplus-value is 50 per cent, then 50 per cent of 500 is 50 5, or 250. Thus the rate of profit on 1,000 yields a profit of 250, or 250/1,000 or 25/100 or 1/4 which is 25 per cent. If the total capital is 1,000 and if c equals 750 and v 250, then at 50 per cent [the rate of surplus-value] 250 will yield 125. But 125/1,000 comes to 1/8, or 121/2 per cent. But in comparison with the first case [less] living labour is employed in the second case. If we assume that the annual wage of the worker is 25, then in the first case 500 [wages] will employ 20 workers; in the second case 250 wages will employ 10 workers. The same capital [ 1,000] employs 20 workers in one case and only 10 in the other. In the first case, the ratio of total capital to the number of working-days is as 1,000:20; in the second as 1,000:10. In the first case, for each of the 20 workers 50 capital (constant and variable) is used (for 20 50=500 2=1,000). In the second case, the capital employed per individual worker is 100 (for 100 10=1,000). Nevertheless, in both cases, the capital which is allocated to wages is, pro rata, the same. The formula I have given provides a new ground for explaining why, with accumulation, less workers are employed by the same amount of capital or, what amounts to the same thing, why a greater amount of capital has to be used for the same amount of labour. It comes to the same thing if I say that one worker is employed for a capital outlay of 50 in the one case, and one worker for a capital outlay of 100 in the other, that therefore only half the number of workers is employed by a capital of 50; in other words, if I say that in one case there is one worker for 50 capital and only half a worker for 50 capital in the other, or if I say that in one case 50 capital is used by one worker and in the other case 50x2 capital is used by one worker. This latter formula is the one used by Hodgskin and others. According to them, accumulation means in general the demand for compound interest; in other words, that more capital is expended on one worker and that he has therefore to produce more surplus labour proportionally to the amount of capital expended on him. Since the capital expended on him increases at the same rate as compound interest, but on the other hand, his labour-time has very definite limits which even relatively no [development of the] productive powers can reduce in accordance with the demands of this compound interest a sort of balance is constantly struck . Simple profit remains the same, or rather it grows. (This is in fact the surplus labour or surplus-value.) But as the result of the accumulation of capital it is compound interest which is disguised in the form of simple interest. ||883| It is clear furthermore that if compound interest equals accumulation, then, apart from the absolute limits of accumulation, the growth of this interest depends on the extent, the intensity, etc., of the accumulation process itself, that is, on the mode of production. Otherwise compound interest is nothing but appropriation of the Capital (property) of others in the form of interest as was the case in Rome and in general with usurers. Hodgskin s view is as follows: Originally 50 capital, for example, falls to the share of one worker, on which he produces, let us say, a profit of 25. Later, as a result of the conversion of a part of the interest into capital and of the fact that this process repeats itself again and again, a capital of 200 is allocated to the worker. If the entire interest of 50 per cent received per annum was always capitalised, the process would be complete in less than four years. Just as the worker produced [a profit of] 25 on [a capital of] 50, he is now expected to produce [a profit of] 100 on a capital of 200, or four times as much. But that is impossible. To do that either the worker would have to work four times as long, that is, 48 hours a day if he worked 12 hours previously, or the value of labour would have to fall by 75 per cent as a result of increased productivity of labour. If the working-day is 12 hours, 25 the [annual] wage, and the worker produces 25 profit [per annum], then he has to work as much for the capitalist as he does for himself. That is for 6 hours or half the working-day. In order to produce 100, he would have to work 4 6 hours for the capitalist in a 12-hour working-day which is nonsense. Let us assume that the working-day is lengthened to 15 hours, then the worker still cannot produce 24 hours work in 15 hours. And still less can he work for 30 hours, which is what would be necessary, since [he would have to work] 24 hours for the capitalist and 6 for himself. If he worked the whole of his working-time for the capitalist, he would be able to produce only 50; he would only double the amount of interest, that is, he would produce 50 profit on a capital of 200, whereas he produced 25 for 50 capital. The rate of profit is 50 per cent in the second case and 25 per cent in the first. But even this is impossible, since the worker must live. No matter how much productive power increases, if, as in the above example, the value of 12 hours is 75, then that of 24 hours adds up to 2 75, or 150. And since the worker must live, he can never produce 150 profit, still less 200. His surplus labour is always a part of his working-day, from which it does not at all follow, as Mr. Rodbertus thinks, that profit can never reach 100 per cent. It can never be 100 per cent if it is calculated on the working-day as a whole (for it is itself included in it). But it can most certainly be 100 per cent in relation to that part of the working-day which is paid for. Let us take the above example of 50 per cent. Here the profit, half a working-day, is equal whole [product]. ||884| If the worker worked three-quarters day for the capitalist then: [calculated on a capital] of 100 Let us examine this a little more closely and see what is implied by the view that [the rate of] profit falls because, in consequence of progressive accumulation, it does not constitute simple profit (consequently the rate of exploitation of the worker does not decline but, as Hodgskin says, increases) but compound profit and it is impossible for labour to keep pace with the demands of compound interest. It has to be noted first of all that this has to be defined in more detail if it is to make any sense at all. Regarded as a product of accumulation (that is, of the appropriation of surplus labour) and this approach is necessary if one considers reproduction as a whole all capital is made up of profit (or of interest, if this word is considered to be synonymous with profit and not with interest in the strict sense). If the rate of profit is 10 per cent, then this is compound interest , compound profit. And it would be impossible to see how 10 to 100 could in economic terms differ from 11 to 110. So what emerges is that simple profit too is impossible, or at least that simple profit must also decline, because, in fact, simple profit is made up in exactly the same way as compound profit. If one narrows the problem, that is, considers solely interest-bearing capital, then compound interest would swallow up profit and more than profit; and the fact that the producer (capitalist or not) has to pay the lender compound interest means that sooner or later, in addition to profit he has to pay him part of his capital as well. Thus it should be noted first of all that Hodgskin s view only has meaning if it is assumed that capital grows more rapidly than population, that is, than the working population. (Even this latter is a relative growth. It is in the nature of capitalism to overwork one section of the working population while it turns another into paupers.) If the population grows at the same rate as capital, then there is no reason whatsoever why I should not be able to extract from 8x workers with 800 the [same rate of] surplus labour that I can extract from x workers with 100. ||885| Eight times 100 C makes no greater demand on 8 times x workers than 100 C on x workers. Thus Hodgskin s argument becomes groundless. (In reality, things turn out differently. Even if the population grows at the same rate as capital, capitalist development nevertheless results in one part of the population being made redundant, because constant capital develops at the expense of variable capital.) (This is directed against Malthus. True, production would not be checked, but the rate of profit would. These cynical propositions stating that a mass of commodities commands labour , reflect the same cynicism which finds expression in Malthus s explanation of value[dd]; command of the commodity over labour is very good and is absolutely characteristic of the nature of capital.) The same author makes the following correct observation directed against West: Hodgskin s proposition, therefore, has meaning only if, as a result of the process of accumulation, more capital is set in motion by the same workers, or if the capital grows in relation to labour. That is, if, for example, the capital was 100 and becomes 110 by accumulation, and if the same worker who produced a surplus-value of 10, is to produce a surplus-value of 11, corresponding to the growth of capital, i.e., compound interest. So that it is not simply the same capital he set in motion previously which, after its reproduction, is to yield the same profit (simple profit) but this capital has been increased by his surplus labour [so that] he has to provide surplus labour for the original capital (or its value) and also for his own accumulated (i.e. capitalised) surplus labour. And since this capital increases every year, the same worker would constantly have to furnish more labour. It is however only [under the following conditions] possible for more capital to be applied per worker: First. If the productive power of labour remains the same, then this is only possible if the worker prolongs his working-time absolutely, i.e., for example, if he works 15 hours instead of 12 hours, or if he works more intensively and performs 15 hours labour in 12 hours, does 5 hours labour in 4 hours or 1 hour s labour in 4/5 of an hour. Since he reproduces his means of subsistence in a definite number of hours, then, in this case, three hours of labour are won for the capitalist in the same way as if the productive power of labour had been increased, while, in fact, it is labour which has been increased, not its productive power. If the intensification of labour were to become general, then the value of commodities would fall in proportion to the reduced labour-time which they cost. The degree of intensity would become the average [intensity of labour], its natural quality. If, however ||886| , this only occurs in particular spheres, then it amounts to more complex labour, simple labour raised to a higher power. Less than an hour of more intensive labour then counts as much and creates as much value [as an hour of] the more extensive labour. For example, in the above case, 4/5 of an hour [produces] as much as 5/5, or an hour. Both the extension of labour-time and the increase of labour through its greater intensification by means of the compression of the pores of Labour as it were, have their limits (although the London bakers, for example, regularly work 17 hours [a day] if not more), very definite, physical, limitations, and it is when encountering these that compound interest composite profit ceases. Within these limitations the following applies: If the capitalist pays nothing for the extension or intensification of labour, then his surplus-value (his profit as well, provided there is no change in the value of the constant capital, for we assume that the mode of production remains the same) and, in accordance with the proviso, his profit increases more rapidly than his capital. He pays no necessary labour for the capital which has been added. If he pays for the surplus labour at the same rate as previously, then the growth of the surplus-value is proportionate to the increase in capital. The profit grows more rapidly. For there is a more rapid turnover of fixed capital, while the more intensive use of the machinery does not cause the wear and tear to increase at the same rate. There is a reduction of expenditure on fixed capital, for less machinery, workshops etc. are required for 100 workers who work longer hours than for 200 workers employed simultaneously. Likewise fewer overseers, etc. (This gives rise to a most satisfactory situation for the capitalist, who is able to expand or contract his production without hindrance, in accordance with the market conditions. In addition, his power grows, since that portion of labour which is over-employed, has its counterpart in an unemployed or semi-employed reserve army, so that competition amongst the workers increases.) Although there is in this case no change in the purely numerical ratio between necessary labour and surplus labour this is however the only case where both can simultaneously increase in the same proportion the exploitation of labour has nevertheless grown, both by means of an extension of the working-day and by its intensification (condensation) provided the working-day is not shortened at the same time (as with the 10 Hours Bill). The period for which the worker is fit to work is reduced and his labour-power is exhausted in a much greater measure than his wages increase and he becomes even more of a work machine. But disregarding the latter aspect, if he lives for 20 years working a normal working-day and only 15 years when his working-day is extended and intensified, then he sells the value of his labour-power in 15 years in the latter case and in 20 years in the former. In one case it has to be replaced in 15 years, in the other, in 20 years. A value of 100 which lasts for 20 years is replaced if 5 per cent is paid on it annually, for 5 20=100. A value of 100 which lasts 15 years is replaced if 610/15 or 62/3 per cent is paid on it annually. But in the given case, the worker receives for 3 hours of additional labour only an amount equivalent to the daily value of his labour calculated over 20 years. Assuming that he works 8 hours necessary labour and 4 hours surplus labour, then he receives two-thirds of each hour for 12 2/3=8 And in the same way he receives 2 out of the 3 hours over-time that he works. Or two-thirds of each hour. But this is only the value of his hourly labour-power on the assumption that it will last for 20 years. If he uses it up in 15 years, its value [per hour] increases. Anticipation of the future real anticipation occurs in the production of wealth only in relation to the worker and to the land. The future can indeed be anticipated and ruined in both cases by premature over-exertion and exhaustion, and by the disturbance of the balance between expenditure and income. In capitalist production this happens to both the worker and the land. As far as so-called anticipation is concerned, in relation to the national debt for example, Ravenstone remarks with justice: ||887| In pretending to stave off the expenses of the present hour to a future day, in contending that you can burthen posterity to supply the wants of the existing generation, they in reality assert the monstrous proposition[ff] that you can consume what does not yet exist, that you can feed on provisions before their seeds have been sown in the earth (Piercy Ravenstone, [Thoughts on the Funding System, and Its Effects, London, 1824], p. 8.) It is different in the case of the worker and the land. What is expended here exists as [gg] and the life span of this is shortened as a result of accelerated expenditure. Finally, if the capitalist is forced to pay more for over-time than for normal working-time, then, according to the facts outlined above, this is by no means an increase in wages, but only compensation for the increased value of over-time and in reality over-time pay is rarely sufficient to cover this. In fact, in order to pay for the increased wear and tear of the labour-power, when over-time is worked, a higher rate ought to be paid for every working hour not merely for the additional hours. Thus there is in any case an increased exploitation of labour. At the same time, as a result of the accumulation of capital, a reduction in surplus-value takes place at all events and also a decline in the rate of profit, insofar as this is not counteracted by saving on constant capital. |887|| ||887| This is therefore a situation where, in consequence of the accumulation of capital of the appearance of compound profit the rate of profit must decline. If on a capital of 300 (the original amount) the rate of profit was 10 per cent (that is profit came to 30), and if for an additional 100 it is 6 per cent, then profit is 36 for 400. Thus on the whole it is 9 for 100. And the rate of profit has fallen from 10 per cent to 9 per cent. But, as has been stated, on this basis (if the productivity of labour remains the same) not only must the profit on additional capital fall, hut at a certain point it must cease altogether, thus the whole accumulation based on this compound profit would be stopped. In this case, the decline in profit is linked with increased exploitation of labour and the cessation of profit at a certain point is not due to the worker or someone else receiving the whole product of his labour, hut to the fact that it is physically impossible to work over and above a certain amount of labour-time or to increase the intensity of labour beyond a certain degree. Secondly. The only other case, where, with the number of workers remaining constant, more capital is applied per worker, and therefore the additional capital can be laid out and used for the increased exploitation of the same number ||888| of workers, occurs when the productivity of labour increases, i.e. the method of production is changed. This presupposes a change in the organic ratio between constant and variable capital. In other words, the increase in the capital in relation to labour is here identical with the increase of constant capital as compared with variable capital and, in general, with the amount of living labour employed. This is where Hodgskin s view merges with the general law which I have outlined. The surplus-value, i.e. the exploitation of the worker, increases, but, at the same time, the rate of profit falls because the variable capital declines as against the constant capital, because in general, the amount of living labour falls relatively in comparison with the amount of capital which sets it in motion. A larger portion of the annual product of labour is appropriated by the capitalist under the signboard of capital, and a smaller portion under the signboard of profit. <Hence the phantasy of the Rev. Thomas Chalmers to the effect that the smaller the amount of the annual product laid out by the capitalists as capital, the larger the profit they pocket. The Established Church then comes to their assistance and sees to it that a large part of the surplus product is consumed instead of being capitalised. The miserable priest confuses cause with effect. Moreover, with a smaller rate [of profit] the amount of profit increases as the size of the capital laid out grows. In addition, the quantity of use-value which this smaller proportion represents, increases. At the same time, however, this leads to the centralisation of capital, since the conditions of production now demand the application of capital on a mass scale. It brings about the swallowing up of the smaller capitalists by the bigger ones and the decapitalisation of the former. This is once again, only in a different form, the separation of the conditions of labour from labour (for there is still a great deal of self-employment amongst the smaller capitalists; in general the labour done by the capitalist stands in inverse proportion to the size of his capital, that is, to the degree in which he is a capitalist. This process would soon bring capitalist production to a head if it were not for the fact that, alongside the centripetal forces, counteracting tendencies exist, which continuously exert a decentralising influence; this need not be described here, for it belongs to the chapter dealing with the competition of capitals). It is this separation which constitutes the concept of capital and of primitive accumulation, which then appears as a continual process in the accumulation of capital and here finally takes the form of the centralisation of already existing capitals in a few hands and of many being divested of capital.> The fact that the (proportionally) declining quantity of labour is not fully offset by increased productivity, or that the ratio of surplus labour to the capital expended does not increase at the same rate as the relative amount of labour employed declines, is due partly to the fact that the development of the productive power of labour reduces the value of labour, the necessary labour, only in certain capital investment spheres, and that, even in these spheres, it does not develop uniformly, and that factors exist which nullify this effect; for example, the workers themselves, although they cannot prevent reductions in (real) wages, will not permit them to be reduced to the absolute minimum; on the contrary, they achieve a certain quantitative participation in the general growth of wealth. But this growth of surplus labour too is relative, [and is only possible] within certain limits. In order to make this growth correspond to the demands of compound interest, the necessary labour-time in this case would have to be reduced to zero in the same way as [the surplus labour-time] had to be extended endlessly in the case considered previously. The rise and fall in the rate of profit insofar as it is determined by the rise or fall of wages resulting from the conditions of demand and supply [in the labour market], or caused by the temporary rise or fall in the prices of necessaries compared with those of luxuries, as a result of the changes in demand and supply and the rise or fall in wages to which this leads has as little to do with the general law of ||889| the rise or fall in the profit rate as the rise or fall in the market prices of commodities has to do with the determination of value in general. This has to be analysed in the chapter on the real movement of wages. If the conditions of demand and supply are favourable to the workers and wages rise, then it is possible (but by no means certain) that the prices of certain necessaries, especially food, will rise correspondingly for a time. The author of the Inquiry into Those Principles etc. rightly remarks in this connection: He then correctly expresses the Ricardian view as follows: Hodgskin and the author of The Source and Remedy etc. since they explain the fall of profits by the impossibility of living labour to fulfil the demands of compound interest, and although they do not analyse this, are much nearer the truth than Smith and Ricardo, who explain the fall of profits by the rise in wages, one of them, [by the rise in] real and nominal wages, the other [by the rise in] nominal wages, with rather a decrease of real wages. Hodgskin and all the other proletarian opponents have enough common sense to emphasise the fact that the proportional number of those who live on profit has increased with the development of capital. Now a few concluding passages from Hodgskin s Labour Defended etc. The treatment of the exchange-value of the product, hence of the labour embodied in the commodity, as social labour. (This is the result of capitalist production.) <This passage has to be quoted, and in doing so [it is necessary to emphasise] that it is only on the basis of capitalism that commodity production or the production of products as commodities becomes all-embracing and affects the nature of the products themselves.> Finally Hodgskin writes about the relation of capital [and labour]: The capitalist mode of production disappears with the form of alienation which the various aspects of social labour bear to one another and which is represented in capital. This is the conclusion arrived at by Hodgskin. The primitive accumulation of capital. Includes the centralisation of the conditions of labour. It means that the conditions of labour acquire an independent existence in relation to the worker and to labour itself. This historical act is the historical genesis of capital, the historical process of separation which transforms the conditions of labour into capital and labour into wage-labour. This provides the basis for capitalist production. Accumulation of capital on the basis of capital itself, and therefore also on the basis of the relationship of capital and wage-labour, reproduces the separation and the independent existence of material wealth as against labour on an ever increasing scale. Concentration of capital. Accumulation of large amounts of capital by the destruction of the smaller capitals. Attraction. Decapitalisation of the intermediate links between capital and labour. This is only the last degree and the final form of the process which transforms the conditions of labour into capital, then reproduces capital and the separate capitals on a larger scale and finally separates from their owners the various capitals which have come. into existence at many points of society, and centralises them in the hands of big capitalists. It is in this extreme form of the contradiction and conflict that production even though in alienated form is transformed into social production. There is social labour, and in the real labour process the instruments of production are used in common. As functionaries of the process which at the same time accelerates this social production and thereby also the development of the productive forces, the capitalists become superfluous in the measure that they, on behalf of society, enjoy the usufruct and that they become overbearing as owners of this social wealth and commanders of social labour. Their position is similar to that of the feudal lords whose exactions in the measure that their services became superfluous with the rise of bourgeois society, became mere outdated and inappropriate privileges and who therefore rushed headlong to destruction. |XV-890|| ||XVIII-1084| Thomas Hodgskin, Popular Political Economy. Four Lectures delivered at the London Mechanics Institution, London, 1827. Regarding the influence of money on the expansion of wealth, Hodgskin remarks correctly: With regard to the accumulation of capital, Hodgskin advances roughly the same ideas as those contained in his first book. Nevertheless for the sake of completeness we will reproduce the main passages. <In other words, production is assisted by the instrument, but not by the title which A holds to the instrument, i.e. not by the circumstance that the instrument is owned by a non-labourer.> With regard to his polemic against the danger of forcing capital out of the country [loc. cit., p. 253], and against the interest of capital as a necessary stimulus for [the development of] industry, or concerning the savings theory, see IX, 47. To be included in the chapter on the vulgar economists. |XIII-670a| [Hodgskin,] The Natural and Artificial Right of Property Contrasted, London, 1832. |X-441| J. F. Bray, Labour s Wrongs and Labour s Remedy, etc., Leeds, 1839. Bray declares that his purpose is: Bray also shows in his work that: <In fact, the fellows argue in the following way: Accumulated products of labour, i.e., products not consumed, lighten labour and make it more productive. As a consequence, the fruits of this lightening and so on must go not to labour itself but to accumulation. Consequently, it is not accumulation which must be the property of labour but labour must be the property of accumulation [that is, it must be the property 1 of its own products. Consequently, the worker must not accumulate for himself but for someone else, and the accumulation must confront him as capital. For the economists, the material element of capital is so integrated with its social form as capital with its antagonistic character as the product of labour dominating labour that they cannot write a single sentence without contradicting themselves.> Cf. the list of Gregory King etc. [a] In the manuscript i.e. instead of that is to say . Ed. [b] In the manuscript Consequently, if instead of If then . Ed. [c] In the manuscript But this is instead of that it is . Ed. * ||XV-862a| Because surplus-value and surplus labour are identical, a qualitative limit is set to the accumulation of capital, [it is determined by] the total working-day (the period in the 24 hours during which labour-power can be active), the given stage of development of the productive forces and the population, which limits the total number of working-days that can be utilised simultaneously at a given time. If, on the contrary, surplus yield is understood in the abstract form of interest, that is, as the proportion in which capital increases itself by means of a mythical sleight of hand , then the limit is purely quantitative and it is absolutely impossible to see why capital does not daily add to itself interest as capital every morning, thus creating interest on interest in infinite progression. |XV-862a|| [d] See Theories of Surplus-Value, Part II, pp. 541-42 and this volume, pp. 114-15. Ed. [e] In the manuscript for . Ed. [f] Instead of this surplus labour must , the manuscript has This surplus labour, that is an even larger amount, must . Ed. [g] Instead of which is the same thing , the manuscript has which comes to the same thing . Ed. [h] The following sentence is Marx s paraphrase (written in German) of the ideas the author sets forth in the pamphlet. Ed. [i] The first part of the sentence up to the words: are worked is not a quotation but a paraphrase by Marx (in German). Ed. [j] The Source and Remedy of the National Difficulties, deduced from Principles of Political Economy, etc. Ed. [k] In the manuscript The Ed. [l] In the manuscript The entire war against the French Revolution instead of the history of the last thirty years . Ed. [m] The Source and Remedy of the National Difficulties, published anonymously. Ed. [n] Ravenstone, Thoughts on the Funding System, and its Effects. Ed. [o] Labour Defended against the Claims of Capital; or, the Unproductiveness of Capital Proved, which Hodgskin published anonymously. Ed. [p] In the manuscript Wealth is nothing but disposable time . Ed. [q] Activity. Ed. [r] In the manuscript this reads: The conviction of the worker employed by the cotton spinner Ed. [s] In the nascent state. Ed. [t] A mode of expression, a figure of speech. Ed. [u] In kind, in this context it means: within the framework of a natural economy. Ed. [v] This is not a quotation from Chav e but a free summary of some of his ideas. Ed. [w] Virtue. Ed. [x] To surround with a wall, to fortify, to defend. Ed. [y] To be strong, vigorous. Ed. [z] Wall. Ed. [aa] Rule, govern, control. Ed. [bb] In the manuscript the vast utility of the steam-engine does . Ed. [cc] In the manuscript the . Ed. [dd] See this volume, pp. 16-17 and 31-32. Ed. [ee] In the manuscript The Author of An Essay on the Application of Capital to Land says . Ed. [ff] Instead of the phrase: they in reality assert the monstrous proposition Marx wrote in the manuscript in German: they assert the absurd proposition. Ed. [gg] Power Ed. [hh] In the manuscript The capitalist is the oppressive middleman between the different labourers. If he is put out of view . Ed. [ii] The words up to rapidly represent Marx s own synopsis of Hodgskin s argument and have been translated here from the German. The rest of the sentence is quoted directly from Hodgskin. Ed. [jj] Marx paraphrases this proposition of Hodgskin in German (apart from the words retail trade and quantity ) and his rendering has been translated here. Ed. [kk] This part of the quotation is slightly condensed and partly translated into German in the manuscript; rendered in English it reads: If one considers for example fixed capital, the most favourable position for the idea of capital aiding production, three classes of circumstances are to be distinguished under which [the results of] accumulation of capital are very different. 1. When it is made and used by the same person. It is obvious [that] . Ed. [ll] In the manuscript when instead of if it be . Ed. [mm] In the manuscript they instead of both may . Ed. [nn] In the manuscript is .-Ed. [oo] In the manuscript and .-Ed. [pp] In the manuscript wages do not facilitate production, like instruments . Ed. [qq] In the manuscript consists of promises to pay . Ed. [rr] In the manuscript The invention and employment of paper-money has revealed that capital is by no means something saved . Ed. [ss] In the manuscript one could suppose . Ed. [tt] In the manuscript people . Ed. [uu] In the manuscript As the population increases. Ed. [vv] In the manuscript must be . Ed. [ww] Marx here summarises Bray s ideas and presents them in German. Ed. [xx] In the manuscript forces . Ed. [yy] Instead of we may estimate the entire maintenance of the 25 millions of people to be worth , in the manuscript We assume that their maintenance is . Ed. [zz] In the manuscript the two sentences, which are translated into German, are condensed to read as follows: Of the five million men who at present assist in production some work only five hours a day, others fifteen. Ed. [aaa] In the manuscript But . Ed. [bbb] In the manuscript Add to this . Ed.

Economic Manuscripts: Theories of Surplus-Value, Chapter 21

https://www.marxists.org/archive/marx/works/1863/theories-surplus-value/ch21.htm

||XVIII-086| Ramsay, George (of Trinity College, Cambridge), An Essay on the Distribution of Wealth, Edinburgh, 1836. With Ramsay we return again to the political economists. <In order to find a place for commercial capital, he calls it the transport of commodities from one place to another (op. cit., p. 19). He thus confuses trade with the carrying industry.> Ramsay s chief contribution: First: That he does in fact make the distinction between constant and variable capital. True, this occurs in such a manner, that the distinction between fixed and circulating capital which he takes from the circulation process is the only one which he nominally retains, but he defines fixed capital in such a way that it includes all the elements of constant capital. He therefore regards as fixed capital not only machinery and instruments, buildings in which labour is carried on or in which the results of labour are stored, draught and breeding animals, but also all raw materials (semi-manufactures, etc.) the seed of the agriculturist, and the raw material of the manufacturer (op. cit., p. 22). Moreover manure of all kinds, fences for agriculture, and the fuel consumed in manufactories (loc. cit., p. 23) are fixed capital. It can be seen therefore that by circulating capital he understands nothing ||1087| but that part of capital which constitutes wages, and by fixed capital, that part which constitutes the objective conditions means and materials of labour. The mistake here, however, is the identification of this division of capital, which is directly derived from the production process, with the distinction which arises from the circulation process. This is due to his adherence to the economic tradition. On the other hand, Ramsay again confuses the purely material element of the fixed capital thus defined with its existence as capital . Circulating capital (i.e., variable capital) does not enter into the real labour process, but what does enter, is living labour, which is bought with circulating capital, and which replaces it. What enters in addition into the labour process is constant capital, that is, labour embodied in the objective conditions of labour, in the materials and means of labour. Ramsay therefore writes: What is really expended in the production of a commodity are raw materials, machinery, etc., and the living labour which sets them in motion. In other words: the labour materialised in the conditions of labour materials and means of labour which we call fixed capital , and the living labour, in short, embodied, materialised labour and living labour, are necessary conditions of production, elements of the national wealth. On the other hand, [according to Ramsay], it is a mere convenience due to the deplorable poverty of the mass of the people that the means of subsistence of the workers at all assume the form of circulating capital . Labour is a condition of production, but wage-labour is not, and neither, therefore, is it necessary that the workers means of subsistence confront them as capital , as an advance by the capitalist . What Ramsay overlooks is that if the means of subsistence of the workers did not confront them as capital (as circulating capital , as he calls it), neither would the objective conditions of labour confront them as capital , as fixed capital , as he calls it. Ramsay attempts in earnest, and not merely in words as the other economists do, to reduce capital to a portion of the national wealth, employed, or meant to be employed, in favouring reproduction (op. cit., p. 21); he therefore declares wage-labour and consequently capital that is the social form which the means of reproduction assume on the basis of wage-labour to be unimportant and due merely to the poverty of the mass of the people. Thus we have arrived at the point where political economy itself on the basis of its analysis declares the capitalist form of production, and consequently capital, to be not an absolute, but merely an accidental , historical condition of production. Ramsay s analysis, however, does not go far enough to draw the correct conclusions from his premises, from the new definition which he has given to capital in the immediate production process. Ramsay comes indeed close to the correct definition of surplus-value. This means, therefore, that the capitalist exchanges less materialised labour for more living labour and that this surplus of unpaid living labour constitutes the excess of the value of the product over the value of the capital consumed in its production, in other words, the surplus-value (profit, etc.). If the amount of labour for which the capitalist pays wages were equal to the amount which he receives back from the worker in the product, then the value of the product would be no greater than that of the capital and there would be no profit. Although Ramsay is very close here to the real origin of surplus-value, he is nevertheless too bound up in the tradition of the economists not to begin immediately straying again along false paths. First of all, the way he explains this exchange between variable capital ||1088| and labour is ambiguous. If he had been quite clear about this, then further misunderstanding would have been impossible. He says: Under what circumstances can the product of 100 men buy [the labour of] 150 men? If the wages received by a worker for 12 hours labour were equal to the value of 12 hours labour, then only one working-day could be bought back with the product of his labour and only 100 working-days with the product of 100 working-days. But if the value of the daily product of his labour is equal to 12 labour hours and the value of the daily wage he receives is equal to 8 labour hours, then 1 1/2 working-days or the labour of 1/2 men can be paid for, bought back, for the value of his daily product. And 100 (1+1/2 men or working-days) = 100+50 or 150 men can be employed with the product of 100 working-days. Thus, the condition in which the product of 100 men sets 150 in motion is that each of the 100 men and, in general, every worker, spends half as much time working gratis for the capitalist as he works for himself, or that he spends a third of the working-day working gratis. Ramsay does not make this clear. The ambiguity appears in the conclusion: Therefore the product at the end of the year, will, in this case, be the result of the labour of 150 men [loc. cit., p. 50]. It will indeed be the result of the labour of 150 men in the same way as the product of 100 men was the result of the labour of 100 men. The ambiguity (and certainly the lack of clarity, more or less derived from Malthus) is to be found in this: It appears as if the profit arises merely from the fact that 150 men are now employed instead of 100. Just as if the profit derived from the 150 workers arose from the fact that 225 workers can now be set in motion by the product of the 150 [in the ratio of] 100:150= 150:225 [or] 20:30=30:45 [or] 4:6=6:9. But that is not the point. The labour which the 100 men supply amounts to x, if x equals their total working-day. The wages they receive will then equal 2/3x. Hence the value of their product equals x, the value of their wages equals x 1/3x, and the surplus-value made on them is 1/3x. If the entire product of the labour of 100 men is again laid out in wages, then 150 men can be employed with it and their product will be equal to the wages of 225 men. The labour-time of 100 men is the labour-time of 100 men. But the labour they are paid for is the product of 66 2/3 men, that is, only 2/3 of the value embodied in their product. The ambiguity [arises] because it appears as if the 100 men or the 100 working-days (it makes no difference whether they are days calculated over a year or separate days) produce 150 working-days a product embodying the value of 150 working-days; while, conversely, the value of 100 working-days suffices to pay for 150 working-days. If the capitalist continues to employ 100 men as he did previously, then his profit remains the same. He will continue to pay the 100 men a product equal to the labour-time of 66 2/3 men and pocket the rest as he did before. If, on the other hand, he bays out the whole product of the 100 men in wages once again, then he accumulates and appropriates a new amount of surplus labour equal to 50 working-days instead of only 33 1/3 as he did previously. It is immediately apparent that Ramsay is not clear on the point, since he once again advances against the determination of value by labour-time the otherwise inexplicable phenomenon that the rates of profit are equal for capitals which exploit different masses of labour-power. It shows rather that capital regulates average prices independently of the value of the particular product and that it exchanges commodities not according to their value, but in such a way that one employment of capital should not be less ||1089| lucrative than others . Since empty tradition is more powerful in political economy than in any other science, Ramsay does not fail either to reproduce the wine in the cellar [g] argument which has been notorious since the time of [James] Mill. And he therefore concludes that capital is a source of value independent of labour (op. cit., p. 55), whereas the most he would have been justified in concluding was that the surplus-value realised by capital in a particular branch of production does not depend on the quantity of labour employed by that particular capital. |1089|| ||1090| This false conception of Ramsay s in this case is all the more surprising since, on the one hand, he grasps the natural basis, so to speak, of surplus-value, and, on the other hand, he affirms with regard to one instance that the distribution of surplus-value its equalisation to the general rate of profit does not increase the surplus-value itself. [Ramsay says firstly:] < Perpetuating the race of labourers ||1091| is a fine result of capitalist production. Of course, if labour only sufficed to reproduce the conditions of labour and to keep the workers alive, no surplus would be possible, hence no profit and no capital. But that nature has nothing whatever to do with it and that the race of labourers perpetuates itself despite this surplus and that the surplus assumes the form of profit and on this basis, the race of capitalists perpetuates itself has been admitted by Ramsay himself since he declares that circulating capital , by which he means wages, wage-labour, is not an essential condition of production, but is due merely to the deplorable poverty of the mass of the people . He does not draw the conclusion that it is capitalist production which perpetuates this deplorable poverty , although he admits it when he says that it perpetuates the race of labourers and leaves them only as much as is necessary for that perpetuation. In the sense indicated above it can be said that surplus-value etc. rests on a natural law, that is, on the productivity of human labour in its exchange with nature. But Ramsay himself states that a source of surplus-value is the absolute lengthening of labour-time (p. 102) as well as the increased productivity of labour brought about by industry.> Secondly, with regard to the equalisation of the rate of profit as a result of the rise in prices in some branches caused by increases in wages, Ramsay observes: The rise in prices in some branches of industry resulting from increases in wages by no means exempted the master-capitalists from suffering in their profits, nor even at all diminished their total loss, but only served to distribute it more equally among the different orders composing that body (op. cit., p. 163). And if the capitalist whose wine is the product of 100 men (Ramsay s example) sells it for the same price as a capitalist whose commodity is the product of 150 men, in order that the employment [of capital] in question should not be less lucrative than others [p. 43], then it is clear that thereby the surplus-value embodied in the wine and in the other commodity is not increased, but only distributed equally between different orders of capitalists |1091||. ||1089| He also brings up again Ricardo s exceptions [to the determination of value by labour-time]. These latter will have to be discussed in that part of our text where we speak of the conversion of value into price of production. That is, very briefly, as follows. Provided that in the different branches of production the length of the working day (insofar as this is not compensated by the intensity of labour, the unpleasantness of the work, etc.) is the same, or rather the surplus labour is the same [as well as] the rate of exploitation, the rate of surplus-value can change only if wages rise or fall. Such variations in the rate of surplus-value, like the rise or fall in wages, will affect the production prices of commodities in different ways according to the organic composition of capital. Capital in which the variable part is large compared to the constant part, would acquire more surplus labour as a result of a fall in wages and would appropriate less surplus labour as a result of a rise in wages than capital with a larger proportion of the constant part to the variable part. A rise or fall in wages would therefore have opposite effects on the rate of profit in the two branches or on the general rate of profit. In order to maintain the general rate of profit, if wages rise, the prices of the first kind of commodities will rise, and those of the second kind will fall. (Either type of capital will of course be directly affected by variations in wages only in proportion to the greater or less quantity of living labour it employs in comparison with the total capital expended.) Conversely, if wages fall, the prices of the first kind of commodities will fall and those of the second kind will rise. Strictly speaking, all this hardly belongs to the discussion of the original conversion of values into production prices and the original establishment of the general rate of profit, since it is much more a question of how a general rise or fall in wages will affect production prices regulated by the general rate of profit. This problem has even less to do with the difference between fixed and circulating capital. Bankers and merchants employ almost exclusively circulating capital and hardly any variable capital; that is, they lay out relatively small amounts of capital on living labour. Contrariwise, a mine-owner employs incomparably more fixed capital than a capitalist engaged in tailoring. But it is very questionable whether he employs relatively as much living labour. It is merely because Ricardo advanced this special, relatively insignificant case as the only instance of a divergence between production price and value (or, as he incorrectly put it, [as] an exception to the determination of value by labour-time) and presented it in the form of a difference between fixed and circulating capital, that this blunder and in an incorrect form at that has survived as an important dogma in all subsequent political economy. (The mine-owner should be counterposed not to the tailor but to the banker and the merchant.) [Ramsay writes:] Here Ramsay confuses two things. The amount of fixed capital embodied in the daily product is not the product of the day s labour of the worker; in other words, this portion of the value of the product represented by a portion of the product in kind is not the product of this day s labour. On the other hand, profit is indeed a deduction from the daily product of the worker or from the value of this daily product. Although Ramsay has not clearly elaborated the nature of surplus-value and although in particular he remains firmly rooted in the old prejudices with regard to the relation of value and production price and the conversion of surplus-value into average profit, he has on the other hand drawn another, correct ||1090| conclusion from his conception of fixed and circulating capital. Before coming to this, [here is another passage about value ]: By this he means that profit, and therefore also the production price, must be in proportion [to the total capital employed] whereas the value obviously cannot be altered by that part of the capital which does not enter into the value of the product. [Ramsay drew the following conclusion from his conception of fixed and circulating capital.] With the advance of society (i.e., of capitalist production) the fixed portion of capital increases at the expense of the circulating capital, i.e., that laid out in labour. Therefore the demand for labour declines relatively as wealth increases or capital is accumulated. In manufacture, the evils which the development of the productive forces generate for the workers are temporary, but reappear constantly. In agriculture, they are continuous, especially in connection with the conversion of arable land into pasture. The general result is: with the advance of society, i.e., with the development of capital, here with that of national wealth, the condition of the workers is affected less and less by this development, in other words, it worsens relatively in the same ratio as the general wealth increases, i.e., as capital is accumulated, or, what amounts to the same thing, as the scale of reproduction increases. One can see that it is a far cry from this conclusion to the naive conceptions of Adam Smith or the apologetics of vulgar political economy. For Adam Smith, the accumulation of capital is identical with growing demand for labour, continual rise of wages, and consequently with a fall of profits. In his time, the demand for labour did in fact grow at least in the same proportion in which capital was accumulated, because manufacture still predominated at that time and large-scale industry was only in its infancy. [Ramsay says:] <here again the wrong assumption creeps in that an increase of necessaries in general and increase of that portion of necessaries intended for the workers are the same thing> And for the following reasons. [Firstly:] The capitalists who use the new machinery obtain extraordinary profits; consequently their capacity to save and to increase their capital grows. A portion of this is also used as circulating capital. Secondly, the price of the manufactured commodities falls in proportion to the diminished cost of production; thus the consumers save, and this facilitates the accumulation of capital, a portion of which may find its way to the manufacturing industry in question. Thirdly: the fall in the price of these products increases the demand for them. ||1091| Ramsay remarks correctly: (This is quite right: labour, and not paid labour or wages, must be considered as an element of value.) Ramsay describes the real reproduction process correctly: <this is a false abstraction. The nation does not exist, or exists only as the capitalist class, and the whole class operates in exactly the same way as the individual capitalist. The two methods of approach differ from one another only in that one clings to and isolates use-value, the other exchange-value> <The nation too if it is not supposed to be identical with the body of capitalists can so far compare value with value. It can calculate the total labour-time which it has to expend to replace the used-up part of its constant capital and the part of the product consumed individually, and the time of labour spent in producing a surplus designed to enlarge the scale of reproduction.> <This difference too disappears in fact in the process of reproduction as a whole. The capitalist always pays out of the finished commodity, that is to say, out of the commodity finished by the labourer yesterday he pays his wages tomorrow, or in point of fact, he gives him, in the form of wages, only an assignation of products to be finished in future or almost produced, i.e., finally produced by the time they are bought. The advance disappears as a mere illusion in reproduction, i.e., in the continuity of the process of production.> <This is likewise true in a national point of view . His profit always depends on what he himself pays for the product, whether finished or not, when he pays wages.> Ramsay has the merit, firstly, that he contradicts the false notion current since Adam Smith of the value of the whole product dissolving into revenue under different names; secondly, that he defines the rate of profit in two ways, [once] by the rate of wages, i.e., the rate of surplus-value, and a second time, by the value of the constant capital. But he transgresses in the opposite direction to Ricardo. Ricardo arbitrarily seeks to equalise the rate of profit and the rate of surplus-value. On the other hand, the twofold determination of the rate of profit 1) by the rate of surplus-value (hence by the rate of wages) and 2) by the ratio of this surplus-value to the total capital advanced, that is, in fact determined by the ratio of the constant capital to the total capital is irrationally presented by Ramsay as two parallel circumstances which determine the rate of profit. He does not grasp the transformation which surplus-value undergoes before it becomes profit. Whereas therefore Ricardo arbitrarily seeks to reduce the rate of profit to the rate of surplus-value in order to work out the theory of value consistently, Ramsay seeks to reduce surplus-value to profit. We shall see later that the way he describes the influence of the value of constant capital on the rate of profit is very inadequate, and even incorrect. [Ramsay writes:] In other words, therefore, the rate of profit depends on the excess of the value of the product over the sum of circulating and fixed capital; hence on the proportion which, firstly, the circulating capital, and, secondly, the fixed capital bear to the value of the whole produce. If we know where this surplus comes from, then the whole matter is very simple. But if we only know that the profit depends on the ratio of the surplus to these outlays, then we can acquire the most inaccurate notions about the origin of this surplus, for example we can, like Ramsay, imagine that it originates in part in fixed (constant) capital. With regard to the tenant farmer, for example: Let us assume that the harvest amounts to 100 quarters and the seed corn to 20, that is, a fifth of the harvest. Let us assume further that the harvest is doubled the following year (with the expenditure of the same amount of labour) and now comes to 200 quarters. If the scale of production remains the same, then the amount of seed corn remains 20 quarters as previously, but this is now only one-tenth of the harvest. One has to take into account however that the value of the 100 quarters [previously harvested] is equal to that of the 200 quarters [now obtained], therefore one quarter of the first harvest is equal to two quarters of the second. 80 quarters remain over in the first case, 180 in the second. Since wages are irrelevant to the present problem, which concerns the influence that a change in the value of constant capital exerts on the rate of profit, let us assume that the value of wages remains unchanged. Then, if wages were 20 quarters in the first case, they are 40 in the second. Finally, let us assume that the value of the other ingredients of constant capital which the farmer does not reproduce in kind amounted to 20 quarters in the first case and therefore to 40 in the second. We now have the following calculation: 1) The product amounts to 100 quarters. The seed corn to 20 quarters. The other elements of constant capital come to 20 quarters, wages to 20 quarters, profit to 40 quarters. 2) The product amounts to 200 quarters. The seed corn to 20 quarters. The other elements of constant capital come to 40 quarters, wages to 40 quarters and profit to 100 quarters; i.e., its value is equal to 50 quarters in the first case. There would therefore be a surplus profit of 10 quarters [in the second case]. Thus not [only] the rate of profit, but also the amount of profit, would have increased here, as a result of a change in the value of constant capital. Although wages remained the same in both 1 and 2, the ratio of profit to wages, that is, the rate of surplus-value, would have risen. But this is only an illusion. The profit would consist firstly of 80 quarters, equal to 40 quarters in case 1, and the ratio to wages would remain the same; secondly, [in case] 2, of 20 quarters, equal only to 10 quarters in the first case, which would have been converted into revenue from constant capital. But is this calculation correct? We must assume that the result in the second case was due to a successful harvest which came about although work was carried on in the same conditions as prevailed in the first case. In order to clarify the matter, let us assume that 1 quarter equals 2 in the first case. This means that for the harvest which has yielded him 200 quarters, the farmer has laid out: 20 quarters for seed corn (or 40), 20 quarters for other elements of constant capital (or 40), 20 quarters for wages (or 40). A total of 120, and the product amounts to 200 quarters. In the first case he likewise laid out only 120 (60 quarters) and the product amounting to 100 quarters was worth 200. The profit remaining was 80, or 40 quarters. Since the 200 quarters [in case 2] are the product of the same amount of labour [as the 100 quarters in case 1], then once again they are likewise equal to only 200. Thus, only 80 profit remains, which is now, however, equal to 140 quarters. Consequently, a quarter now [costs the farmer] only 4/7 and not 1. In other words, the value of a quarter has fallen from 2 to 4/7, that is, by 13/7, and not from to , that is, by a half as we assumed above in [case] 2 as opposed to [case] 1. The farmer s total product amounts to 200 quarters, that is, 200. But 120 out of this 200 replaces the 60 quarters which he has expended, each one of which cost him 2. There thus remains a profit of 80 which is equal to the remaining 140 quarters. How does this happen? The quarter is now worth 1, but each of the 60 quarters expended in production cost 2. They cost the farmer as much as if he had expended 120 of the new quarters. The remaining 140 quarters are worth 80, or no more than the remaining 40 were worth previously. It is true that he sells each of the 200 quarters for 1 (if he sells his total product) and receives 200 for them. But of the 200 quarters, 60 have cost him 2 each, the remaining quarters therefore only yield him 4/7 each. If he now again lays out 20 quarters [for seed] (equal to 10 [if one reckons 10s. for a quarter]), 40 quarters for wages (equal to 20), and 40 quarters for the other elements of constant capital (equal to 20), that is, a total of 100 quarters instead of 60 as previously and he harvests 180 quarters, then these 180 quarters have not the same value as did the 100 previously [if one reckons 1 for a quarter]. True, he has employed as much living labour as he did previously, and consequently the ||1094| value of the variable capital has remained the same and so has the value of the surplus product. But he has laid out less materialised labour, since the 20 quarters, which were worth 20 previously, are now worth only 10. The account will therefore work out as follows: In the first case the product comes to 100 qrs., or 100. In the second case the product comes to 180 qrs., or 90. Nevertheless the rate of profit would have risen [despite the fall in the value of the product], for in the first case the return on an outlay of 60 was 40 and in the second it was 40 for an outlay of 50. In the first case it amounted to 66 2/3 per cent, in the second to 80 per cent. Anyhow, the rise in the rate of profit is not due to the value remaining unchanged, as Ramsay supposes. Since one part of the labour expended, i.e., the part contained in the constant capital (in seeds in this case), has diminished, the value of the product falls if production continues on the same scale, just as the value of 100 lbs. of twist falls if the cotton it is made of becomes cheaper. But the ratio of variable to constant capital increases (without the value of the variable capital increasing). In other words, the ratio of the total capital outlay declines in relation to the surplus. Hence the rate of profit rises. If what Ramsay says were correct, if the value remained the same, then the profit, the amount of profit, and consequently also the rate of profit, would rise. There can be no question of a rise merely in the rate of profit. The question [of the influence of a change in the value of constant capital on the rate of profit] is not however disposed of for the special case [where a part of the constant capital is replaced in kind]. In agriculture this special case takes the following form. A certain amount of seed corn at the old price of the product figures in the harvest, this part is incorporated in the harvest in kind. The other expenses are defrayed by the sale of the corn at its old price. The old outlay yields a product which is twice as big as before. Thus, in the above-mentioned case, for example, where 20 quarters are used as seed corn (equal to 40) and the other outlays amount to 40 quarters, equalling 80, the harvest yields 200 quarters and not, as the previous harvest, 100 quarters (worth 200), of which 40 quarters, equalling 80, were profit on an outlay of 60 quarters costing 120. The outlay in connection with this second harvest is absolutely the same as it was in the first 60 quarters, the value of which is 120, but instead of a surplus of 40 quarters, the surplus is now 140 quarters. The surplus in kind has in this case increased considerably. But because the labour expended is the same in both cases, the 200 quarters have no greater value than did the 100, that is, 200. In other words the value of the quarter has fallen from 2 to 1. But since there was a surplus of 140 quarters, it seemed that it had to come to 140, for one quarter is worth just as much as any other. The matter would be simplified if we considered it first of all without regard to the reproduction process, that is if we assumed that the tenant farmer was withdrawing from the business and selling his whole product. Then he would indeed have to sell 120 quarters to recover his outlay of 120 (to reimburse himself). In this way he would recover his capital outlay. Thus a surplus of 80 quarters would remain, and not of 140, and since these 80 quarters are equal to 80, they are worth in absolute terms as much as the surplus in the first case. In the course of the reproduction process, however, the matter is altered to a certain extent. For the farmer replaces the 20 quarters of seed corn in kind out of his own product. [As far as their value is concerned] they are replaced by 40 quarters in the [new] product. But in the reproduction process he only needs to replace them with 20 quarters in kind, as was the case previously. The rest of his expenditure [expressed in quarters] increases in the same ratio as the quarter is devalued (provided wages do not fall). To replace the remaining portion of constant capital, the farmer now needs 40 quarters and not 20 as previously, and to replace wages he also needs 40 quarters instead of 20. Altogether he must now lay out 100 quarters, compared to 60 quarters previously; but he need not lay out 120 quarters, the amount corresponding to the depreciation of the corn, because the 20 quarters used [as seed] which were worth 40, are replaced by 20 [quarters] (since in this context only their use-value matters) which are worth 20. So evidently he has made a gain ||1095| of these 20 qrs., now worth 20. His surplus is therefore not 80 but 100, not 80 qrs., but 100. (Expressed in quarters of the old value, not 40 quarters but 50.) This is an unquestionable fact, and if the market price does not fall as a result of abundance, the farmer can sell 20 quarters more at the new value, thus gaining 20. In the course of reproduction, moreover, the farmer obtains this surplus of 20 on the same outlay, because labour has become more productive without the rate of surplus-value having risen or the workers having performed more surplus labour than previously or having received a smaller portion of the reproduced part of the product (which represents living labour). On the contrary, it is assumed that in the reproduction process the worker receives 40 quarters, whereas he received only 20 previously. This then is a rather peculiar phenomenon. It does not occur without reproduction, but it takes place in connection with it and it takes place [moreover] because the farmer replaces a part of his advances in kind. Not only the rate of profit could increase in this case, but the amount of profit as well. (With regard to the reproduction process itself, the farmer can either carry on on the old scale, in which case the price of the product will fall if he again obtains as good a harvest, because a portion of the constant capital has cost less, but the rate of profit will rise; or the farmer can increase the scale of production, sow more with the same outlay, and then both the rate of profit and the amount of profit will rise.) Let us [now] consider the manufacturer. Let us assume that he has laid out 100 in cotton twist and made a profit of 20. The product therefore amounts to 120. It is assumed that 80 out of the outlay of 100 has been paid for cotton. If the price of cotton falls by half, he will now need to spend only 40 on the cotton and 20 on the rest, that is 60 in all (instead of 100) and the profit will be 20 as previously, the total product will amount to 80 (if he does not increase the scale of his production). 40 thus remains in his pocket. He can either spend it or invest it as additional capital. If he invests it, he will lay out [an additional] 26 2/3 on cotton and 13 1/2 on labour, etc., on the new scale. The profit [will amount to] 13 1/3. The total product will now be 60+40+33 1/3, or 133 1/3. Thus it is not the fact that the farmer replaces his seed corn in kind which is the key, for the manufacturer buys his cotton and does not replace it out of his own product. What this phenomenon amounts to is this: release of a portion of the capital previously tied up in constant capital, or the conversion of a portion of the capital into revenue. If exactly the same amount of capital is laid out in the reproduction process as previously, then it is the same as if additional capital had been employed on the old scale of production. This is therefore a kind of accumulation which arises from the increased productivity of those branches of industry which supply the productive ingredients of capital. However, such a fall in the [price of] raw materials, if due to the seasons, is counteracted by unfavourable seasons, in which the prices of raw materials rise. The capital released in this way in one or several seasons is, therefore, to a certain extent, reserve capital for the other seasons. For instance, the manufacturer whose [fixed capital] turns over once every twelve years, must arrange things in such a way that he can continue to produce at least on the same scale throughout the twelve years. One has therefore to take into account that the prices [of the raw materials] he has to replace fluctuate and even themselves out to a certain extent over a long period of years. A rise in prices of the ingredients [of constant capital] has the opposite effect to a fall of the prices. (We are leaving variable capital out of account here, although if wages fall, less variable capital in terms of value will need to be laid out, and if they rise more.) If production is to be continued on the old scale, then a greater outlay of capital is necessary. Therefore, apart from a fall in the rate of profit, extra capital must be employed or a part of the revenue must be converted into capital, although it will not have the effect of additional capital. Accumulation has taken place in the one case although the value of the capital advanced has remained the same (but its material elements have been increased). The rate of creating surplus-value increases, and the absolute magnitude of profit increases, because the effect is the same as if additional capital had been advanced on the old scale. Accumulation has taken place in the other case insofar as the value of the capital advanced, i.e., that part of the value of the total output which functions as capital, has increased, But the material elements have not been increased. The rate of profit falls. (The amount of profit only falls if either a different number of workers is employed or if their wages rise as well.) This phenomenon of the conversion of capital into revenue should be noted, because it creates the illusion that the amount of profit grows (or in the opposite case decreases) independently of the amount of surplus-value. We have seen that, under ||1096| certain circumstances, a part of rent can be explained by this phenomenon. In the way mentioned above (that is, if the remaining 20 quarters worth 20 are not used immediately to extend the scale of production, i.e., if they are not accumulated), a money capital of 20 is set free. This is an example of how redundant money capital can be extracted from the reproduction process although the aggregate value of commodities remains the same, namely, by a portion of the capital which existed previously in the form of fixed (constant) capital being converted into money capital. How little the above phenomenon [conversion of a portion of the capital into revenue] has to do with Ramsay s determination of the rate of profit, becomes clear if one considers the case of a farmer (or manufacturer) who enters business under the new conditions of production. Formerly he needed 120 to enter the business: 40 to buy 20 quarters of seeds, 40 to buy the other ingredients of constant capital, and 40 to pay wages. And his profit was 80. 80 on 120 is equal to 8 on 12, or 2 on 3, or 66 2/3 per cent. He now has to advance 20 to buy 20 quarters of seed, 40 as previously [to buy the other elements of constant capital], 40 to pay wages, so that his outlay of capital amounts to 100. His profit is 80, that is, 80 per cent. The amount of profit has remained the same, but the rate of profit has increased by 20 per cent. Thus one can see that the fall in the value of seed (or of the price which has to be paid to replace the seed) has in itself nothing to do with the increase in [the amount of] profit, but implies merely an increase in the rate of profit. Moreover, the farmer in the one case or the manufacturer in the other will not consider that he has obtained a larger profit, but that a portion of the capital previously tied up in production has been freed. And his view will be based on the following simple calculation. Previously, the amount of capital advanced in production was 120; now it is 100, and 20 is now in the hands of the farmer as free capital, money which can be invested in any way he likes. But in either case the capital amounts to 120 only, its size has therefore not been increased. The fact, however, that a sixth of the capital has been divested of the form in which it is inseparable from the production process does indeed have the same effect as an additional investment of capital. Ramsay has not got to the bottom of this matter because he has not at all clearly worked out the relationship between value, surplus-value and profit. Ramsay correctly expounds to what extent machinery, etc., insofar as it affects variable capital, influences profit and the rate of profit. That is to say, he shows that this influence results from the depreciation of labour-power, the increase of relative surplus labour or, if the production process is considered as a whole, also the reduction of the part of the gross return which goes to replace wages. <It is assumed that in fact, taking the wear and tear of the machinery into account, twice the quantity costs no more than half did previously. If this is not the case, the value of the commodity falls, but not in proportion to its quantity. Its quantity may double and, whereas the value of the aggregate product rises, the value of a unit of the commodity, may drop only from 2 to 1 1/4, etc., instead of from 2 to 1.> A fall [or rise] in the value of the elements of constant capital affects the rate of profit by altering the ratio of surplus-value to the total capital outlay. A fall (or rise) in wages, on the other hand, affects the rate of profit by influencing the rate of surplus-value directly. Supposing for example, that, in the above-mentioned case, the price of the seed (assuming the farmer grows flax) remains the same, that is, 40 (20 quarters) and the rest of the constant capital costs 40 (20 quarters) as before, but that wages that is, wages for the same number of workers fall from 40 to 20 (from 20 quarters to 10 quarters). In this case, the total value, which is equal to the wages plus surplus-value, remains unchanged. Since the number of workers remains the same, their labour is embodied in a value of 40+ 80, i.e., 120, as it was previously. But from this 120, 20 now goes to the workers and the surplus-value now amounts to 100. <It is assumed that no improvements have taken place which affect the number of labourers employed in this branch.> The capital advanced is now 100 instead of 120 just as in the case where the value of the seed fell by half. But the profit is now 100, i.e., 100 per cent, whereas in the other case, where the capital advanced was likewise reduced from 120 to 100, it was 80 per cent. And as in that other case 20, or a sixth of the capital ||1097|, is set free. But in the former case, the surplus-value remained unchanged 80 (and since 40 was paid as wages, [the rate of surplus-value] was 200 per cent). In the latter case, the surplus-value rises to 100 (and, since wages now come to 20, [the rate of surplus-value increases] to 500 per cent). In this case, not only has the rate of profit risen but the profit itself, because the rate of surplus-value has risen and consequently the surplus-value itself. This differentiates this case from the other, something which Ramsay does not grasp. This always takes place when the increase in profit is not nullified by a corresponding reduction in the rate of profit resulting from a simultaneous change in the value of constant capital. In the above-mentioned case for example, the capital outlay is 120 and the profit 80, that is, 66 2/3 per cent. In the present case, the capital outlay is 100 and the profit 100, which works out at 100 per cent. If, however, the capital outlay had risen from 100 to 150 as a result of a change in the price of constant capital, then the profit which has increased from 80 to 100 would only give a rate of 66 2/3 per cent. [Ramsay continues] First of all, a portion of the luxuries can be used as one of the elements of constant capital. Grapes, for example, in [the production of] wine, gold in luxury articles, diamonds in glass cutting, etc. But Ramsay excludes this case insofar as he says: commodities which do not enter into fixed capital. In that case, however, the concluding sentence Such are luxuries of all kinds , is incorrect. However, productivity in the luxury industries can only increase in the same way as it does in all others either because natural resources such as the land, mines, etc., from which the raw materials for the luxury industries are procured, become more productive, or new, more productive sources are discovered; or again by application of the division of labour, or, especially, by the use of machinery (or of better tools) and of natural forces. <The improvement of tools, as well as the production of more specialised ones, belongs to the division of labour.> ( One should not forget chemical processes.) Let us now assume that the production time for luxuries is reduced due to machinery (or chemical processes), that less labour is required to produce them. This cannot have the slightest influence on wages, on the value of labour-power, since these articles do not enter into the consumption of the workers (at least never into that part of their consumption which determines the value of their labour-power). (It can influence the market price of labour, if workers are thrown onto the streets as a result of these developments and the supply of labour-power is thereby increased.) Increased productivity in the luxury industries, therefore, has no influence on the rate of surplus-value nor, consequently, on the rate of profit insofar as this is determined by the rate of surplus-value. Nevertheless, it can influence the rate of profit insofar as it affects either the amount of surplus-value or the ratio of variable capital to constant capital and to the total capital. If for example, [in the production of luxury articles] machinery makes it possible to employ 10 workers where 20 were previously employed, then, indeed the rate of surplus-value is not modified in any way. The cheapening of luxury articles does not enable the worker to live more cheaply. He requires the same amount of labour-time to reproduce his labour-power as he did previously. <In practice, therefore, the manufacturer of luxury articles seeks to depress the wages of labour below its value, [below] its minimum. This he is able to do because of the relative surplus population engendered by increasing productivity in other branches of industry, for example among knitters. Or as likewise happens in these branches he seeks to extend the absolute labour-time, thus, in fact, producing absolute surplus-value. It is correct, however, that productivity in the luxury industries cannot reduce the value of labour-power, it cannot produce any relative surplus-value and, in general, cannot produce that form of surplus-value which results from the growing productivity of industry as such.> The amount of surplus-value is determined in two ways. [First,] by the rate of surplus-value, that is, the surplus labour (absolute or relative) of the individual workers. Secondly, by the number of workers simultaneously employed. Insofar therefore as increasing productivity in the luxury industry reduces the number of workers which a certain quantity of capital employs, it reduced the amount of surplus-value, hence all other circumstances remaining unchanged, it reduces also the rate of profit. The same thing occurs if the number of workers is reduced, or remains the same, but the capital laid out on machinery and raw materials is increased; in other words, it occurs wherever there is any diminution in the ratio of variable capital to the total capital which [according to our assumption] is not balanced or partially offset by a reduction in wages. But since the rate of profit in this sphere ||1098| enters into the equalisation process of the general rate of profit just as much as that in any other sphere, increased productivity in the luxury industry would, in the case under consideration, bring about a fall in the general rate of profit. Conversely: If the increased productivity in the luxury industry was [due to improvements carried out not in that industry itself, but] in those branches of industry which provide it with constant capital, then the rate of profit would rise in the luxury industry. <Surplus-value (that is, its size, its quantity, its total amount) is determined by the rate of surplus-value multiplied by the number of workers employed. Certain circumstances may affect both factors simultaneously either in the same direction or in opposite directions, or they may affect only one of the factors. Apart from the absolute lengthening of the working-day, increased productivity in the luxury industry can affect only the number [of workers employed]. The inevitable consequence therefore is a reduction in the amount of surplus-value and hence in the rate of profit, even if no increase in constant capital takes place. If the constant capital increases, however, a reduced amount of surplus-value is calculated on an increased total capital.> Ramsay comes closer to a correct understanding of the rate of profit than the others. The shortcomings too are therefore more conspicuous in his exposition. He brings out all the factors involved, but he does it one-sidedly and therefore incorrectly. Ramsay sums up his view of profit in the following passage: <here this must mean the quantity of necessaries, etc., which the worker receives, irrespective of the price of the commodities which that quantity comprises>. He rightly reproaches Ricardo (although Ramsay s own presentation is also inadequate): <It can already be noted in the first description of accumulation, i.e., of the conversion of surplus-value into capital, that the entire surplus labour takes the form of capital (constant and variable) and of surplus labour (profit, interest, rent). For this conversion reveals that surplus labour itself assumes the form of capital and that the unpaid labour of the worker confronts him as the totality of the objective conditions of labour. In this form it confronts him as alien property with the result that the capital which is antecedent to his labour, appears to be independent of it. [It appears] as a ready-made value of a given magnitude, whose value the worker merely has to augment. It is never the product of his past labour (nor any circumstances which, independently of the particular labour process into which the past labour of his enters, affect or increase its value) which, or the replacement of which, appears as exploitation, but it is always merely the manner and the rate in which his present labour is exploited. As long as the individual capitalist continues to operate on the same scale of production (or on an expanding one), the replacement of capital appears as an operation which does not affect the worker, since, if the means of production belonged to the worker, he would likewise have to replace them out of the gross product in order to continue reproduction on the same scale or on an expanded scale (and the latter too is necessary because of the natural increase of population). But this affects the worker in three respects. 1) The perpetuation of the means of production as property alien to him, as capital, perpetuates his condition as wage-worker and hence his fate of always having to work part of his labour-time for a third person for nothing. 2) The extension of these means of production, alias accumulation of capital, increases the extent and the size of the classes who live on the surplus labour of the worker; it worsens his position relatively by augmenting the relative wealth of the capitalist and his co-partners, by further increasing his relative surplus labour through the division of labour, etc., and reduces that part of the gross product which is used to pay wages; finally, since the conditions of labour confront the individual worker in an ever more gigantic form and increasingly as social forces, the chance of his taking possession of them himself as is the case in small-scale industry, disappears.> ||1099| Ramsay uses the term gross profit for what I call simply profit. He divides this gross profit into net profit (interest) and profit of enterprise (industrial profit).* Ramsay, like Ricardo, takes issue with Adam Smith on the question of the fall in the general rate of profit. Refuting Smith, he writes: The following passage is directed against Malthus: The last sentence expresses the true gist of Ricardo s proposition. The rate of profit can fall independently of the competition between capital and labour, but this is the only kind of competition which can bring about its decrease. Ramsay himself, however, does not advance any reasons why the general rate of profit has a tendency to fall. The only thing he says and which is correct is that the rate of interest can fall quite independently of the rate of gross profits in a given country, namely: Ramsay says the following about the rate of net profit (interest): ||1100| Apart from the circumstance mentioned earlier, Ramsay says rightly: Speaking of the industrial capitalist, whom he calls the master-capitalist, Ramsay remarks: Industrial profit. (Labour of superintendence.) What Ramsay writes about industrial profit (and especially, about the labour of superintendence) is on the whole the most reasonable part of his book, although part of his demonstration is borrowed from Storch. The exploitation of labour costs labour. Insofar as the labour performed by the industrial capitalist is rendered necessary only because of the contradiction between capital and labour, it enters into the cost of his overseers (the industrial non-commissioned officers) and is already included in the category of wages in the same way as costs caused by the slave overseer and his whip are included in the production costs of the slave-owner. These costs, like the greater part of the trading expenses, belong to the incidental expenses of capitalist production. As far as the general rate of profit is concerned, the labour of the capitalists arising from their competition with one another and their attempts to ruin one another counts just as little as the greater or lesser skill of one industrial capitalist compared to another in extracting the largest amount of surplus labour from his workers for the smallest expenditure and making the best use of this extracted surplus labour in the process of circulation. These matters should be dealt with in the analysis of the competition of capitals. Such an analysis deals in general with the struggle of the capitalists and their effort to acquire the greatest possible amount of surplus labour and it is concerned only with the division of the surplus labour amongst the different individual capitalists, and not with the origin of surplus labour or its general extent. All that remains for the labour of superintendence is the general function of organising the division of labour and the cooperation of certain individuals. This labour is fully taken into account in the wages of the general manager in the larger capitalist enterprises. It has already been deducted from the general rate of profit. The best practical proof of this is provided by the co-operative factories set up by the English workers, for these, despite the higher rate of interest they have to pay, yield profits higher than average, although the wages of the general manager, which are naturally determined by the market price for this kind of labour, are deducted. The industrial capitalists who are their own general managers save one item of the production costs, pay wages to themselves, and consequently receive a rate of profit above the average. If this assertion of the apologists [that profit of enterprise constitutes wages for the labour of superintendence] were taken literally tomorrow, and the profit of the industrial capitalist limited to the wages of management and direction, then capitalist production, the appropriation of the surplus labour of others and its transformation into capital would come to an end the day after tomorrow. However, if we consider this [payment of the] labour of superintendence as wages concealed in the general rate of profit, then the law established by Ramsay and others applies, namely, that while profit (industrial profit as well as gross profit [including interest]) is proportional to the amount of capital invested, this portion of the profit stands in inverse ratio to the size of the capital, it is infinitesimally small in the ease of large capital and enormously large where the capital is small, i.e., where the capitalist production is purely nominal. Whereas the small capitalist, who does almost all the work himself, seems to obtain a very high rate of profit in proportion to his capital, what happens in fact is that, if he does not employ a few workers whose surplus labour he appropriates, he actually makes no profit at all and his enterprise is only nominally a capitalist one. (whether he is engaged in industry or in commerce). What distinguishes him from the wage-worker is that, because of his nominal capital he is indeed the master and owner of his own conditions of labour and consequently has no master over him; ||1101| and hence he appropriates his whole labour-time himself instead of it being appropriated by someone else. What appears to be profit here, is merely the excess [of his income] over ordinary wages, an excess which results from the fact that he appropriates his own surplus labour. However, this phenomenon belongs exclusively to those spheres which have not as yet been really conquered by the capitalist mode of production. [Ramsay says:] As regards point 2, it is quite irrelevant here. Corbet (and Ramsay himself) has stated that the insurance which covers the risk only distributes the losses of the capitalists uniformly or distributes them more generally amongst the whole class. The profits of the insurance companies that is, of the capitals which are employed in the business of insurance, and take over this distribution must be deducted from these uniformly distributed losses. These companies receive a part of the surplus-value in the same way as mercantile or moneyed capitalists do, without participating in its direct production. This is a question of the distribution of the surplus-value amongst the different sorts of capitalists and of the deductions which are consequently made from [the surplus-value accruing to] the individual capitalists. It has nothing to do either with the nature or with the magnitude of the surplus. The worker obviously cannot provide any more than his surplus labour. He cannot make an additional payment to the capitalist so that the latter may insure the fruits of this surplus labour against loss. At most one could say that, even apart from capitalist production, the producers themselves might have certain expenses, that is, they would have to spend a part of their labour, or of the products of their labour in order to insure their products, their wealth, or the elements of their wealth, against accidents, etc. Instead of each capitalist insuring himself, it is safer as well as cheaper for him if one section of capital is entrusted with this job. Insurance is paid out of a portion of surplus-value, its protection and distribution between the capitalists has nothing to do with its origin and magnitude. What is left is 1) the salary and 2) the surplus gains, as Ramsay calls that part of surplus-value which falls to the industrial capitalist as opposed to the interest-grabber and which, consequently, is determined by the ratio of interest to industrial profit; the two parts into which the surplus-value accruing to capital (in contrast to landed property) is divided. As far as 1), the salary, is concerned, it is first of all self-evident that in capitalist production, the function of capital as lord over labour falls to the capitalist, or a clerk or a representative paid by him. Even this function would disappear together with the capitalist mode of production, insofar as it does not arise from the nature of co-operative labour but from the domination of the conditions of labour over labour itself. Ramsay himself however sweeps away this element or reduces it to such an extent that it is not worth speaking of. The third part [of the profits of enterprise], the surplus gains, includes [compensation for] risks which are only possible risks, nothing but the possibility of losing the gains and the capital it in fact however takes the form of insurance and therefore of a share which certain capitals in a particular branch receive in the total surplus-value. In other words, this means nothing more than that the salaries of masters stand in inverse ratio to the size of the capital. The larger the scale on which the capital operates, the more capitalist the mode of production, the more negligible is the element of industrial profit which is reducible to salary, and the more clearly appears the real character of industrial profit, namely, that it is a part of the surplus gains, i.e., of surplus-value, i.e., of unpaid surplus labour. The whole contradiction between industrial profit and interest only has meaning as a contradiction between the rentier and the industrial capitalist, but it has not the slightest bearing on the relationship of the worker to capital, the nature of capital, or the origin of the profit capital yields. With regard to rent not derived from corn, Ramsay says: ||1102| Ramsay has already said[uu] and repeats in the final chapter that But he does not draw the obvious conclusion that by denying that wage-labour and capital laid out in wages are essential, the necessity for capitalist production in general is denied and the conditions of labour consequently cease to confront the workers as capital or, to use Ramsay s term, as fixed capital . One part of the conditions of labour appears as fixed capital only because the other part appears as circulating capital. But once capitalist production is presupposed as a fact, Ramsay declares that wages and gross profits of capital (industrial profit or, as he calls it, profit of enterprise included) are necessary forms of revenue (loc. cit., pp. 478, 475). These are naturally the two forms of revenue which, in their simplicity and generality, indeed epitomise the essence of the capitalist mode of production and of the two classes on which it is based. On the other hand, Ramsay declares that rent, in other words landed property, is a superfluous form of capitalist production (l.c., p. 472), but forgets that it is a necessary product of this mode of production. The same applies to his statement that the net profit of capital , that is, interest, is not a necessary form. Here Ramsay again forgets what he has said himself, namely that, as a necessary consequence of the development of capital, a constantly growing class of rentiers comes into being.[xx] Naturally. Without profit, no capital and without capital, no capitalist production. Thus, the conclusion at which Ramsay arrives is, on the one hand, that the capitalist mode of production based on wage-labour is not really a necessary, i.e., not an absolute form of social production (which Ramsay himself expresses only in a rather limited form by stating that circulating capital and wages [would be] superfluous if the mass of the people were not so poor that they had to receive their share of the product in advance, before it was completed). On the other hand, he concludes that interest (in contrast to industrial profit) and rent (that is the form of landed property created by capitalist production itself) are superfetations which are not essential to capitalist production and of which it can rid itself. If this bourgeois ideal were actually realisable, the only result would be that the whole of the surplus-value would go to the industrial capitalist directly, and society would be reduced (economically) to the simple contradiction between capital and wage-labour, a simplification which would indeed accelerate the dissolution of this mode of production. |1102|| ||1102| <In the Morning Star (December 1, 1862), a manufacturer moans: If one disregards the value and considers the gross produce in kind, it is clear that after the replacement of the constant capital and the capital laid out in wages, that portion of the product which remains constitutes the surplus-value. From this however has to be deducted a portion for rent and the gains of the agents, merchants or dealers, all of whom, whether they use capital of their own or not, also share in that part of the gross product which constitutes surplus-value. All these therefore are deductions for the manufacturer. His profit itself is subdivided into industrial profit and interest if he has borrowed capital.> <With regard to differential rent: The work of the labourer working on more fertile soil is more productive than that of a man working on less fertile soil. If, therefore, he were to be paid in kind, he would receive a smaller share of the gross product than the labourer working on less fertile soil. Or, what amounts to the same thing, his relative surplus labour would be greater than that of the other labourer, although he worked the same number of hours per day. But the value of the wage of the one is equal to that of the other. Hence the profit of his employer is no greater [than that of the other employer]. The surplus-value contained in the additional amount of his product, the greater relative productivity of his labour, or the differential surplus labour performed by him, is pocketed by the landlord.> |1102|| * ||1130| (The reason Mr. Senior whose Outline appeared at approximately the same time as Ramsay s Essay on the Distribution of Wealth, in which batter work the division of profit into profit of enterprise and into net profits of capital or interest (Chapter IV) is dealt with at length is supposed to have discovered this division, which was already known in 1821 and 1822, can be explained only by the fact that Senior a mere apologist of the existing order and consequently a vulgar economist is very congenial to Herr Roscher.) |1130|| [a] The manuscript has Production would be just as great. Ed. [b] The manuscript has This proves . Ed. [c] The manuscript has of . Ed. [d] Marx translated the first part of this passage and condensed it to: or will people assert . Ed. [e] The manuscript has was . Ed. [f] In the manuscript will employ 150 men . Ed. [g] See this volume, pp. 86, 87, 177, 229. Ed. [h] Instead of profits owe their existence to a , the manuscript has: The source of profits is the . Ed. [i] In the manuscript master-capitalists . Ed. [j] The manuscript has viz. Ed. [k] The manuscript has The demand for labour . Ed. [l] The manuscript has amount of circulating capital alone . Ed. [m] The manuscript has With the progress of civilisation . Ed. [n] The manuscript has The demand for labour will not therefore generally increase as capital augments, at least not in the same proportion. Ed. [o] The manuscript has manufactures . Ed. [p] The manuscript has the machinery . Ed. [q] Instead of But the change of all others most fatal , the manuscript has the most fatal . Ed. [r] Instead of labour not what is paid for it, ought to be reckoned as , the manuscript has Only labour, not wages, not what is paid for it is . Ed. [s] The manuscript has when . Ed. [t] The manuscript has does not constitute . Ed. [u] The manuscript has How is it possible to compare . Ed. [v] The first part of the passage starting with As regards and ending with because is a free summary (mainly in German), not a quotation. Ed. [w] The manuscript has his . Ed. [x] The manuscript has though they, nationally speaking, are not . Ed. [y] The manuscript has It is certain . Ed. [z] That is, diminishing the part of the gross product which is required to replace the fixed capital. Ed. [aa] This paragraph and part of the next are summaries (in German) by Marx of the ideas developed by Ramsay. Ed. [bb] This paragraph and the one after the next beginning with the words: the manufacturer benefits are not a quotation, but a paraphrase by Marx of the ideas expressed by Ramsay on pp. 168-69 of his book. They are written in German but interspersed with many English words and phrases. Ed. [cc] The manuscript has The rate of profit in individual cases is therefore determined by the following causes . Ed. [dd] The manuscript has the articles of first . Ed. [ee] The manuscript has the . Ed. [ff] The manuscript has Ricardo forgets that the whole product is divided not only between wages and profits, but that a part of it is also necessary for replacing fixed capital. Ed. [gg] This is not a quotation but Marx s rendering (mainly in German) of the ideas developed by Ramsay on pp. 179-80 of his book. Ed. [hh] Instead of Could we suppose it , the manuscript has If it were . Ed. [ii] The manuscript has These two classes . Ed. [jj] Instead of Thus it comes to pass, that , the manuscript has Therefore . Ed. [kk] The manuscript has poor countries . Ed. [ll] The manuscript has it depends . Ed. [mm] The manuscript has separated into interest and industrial profit . Ed. [nn] The manuscript has borrowers of capital. This competition is influenced, but not entirely . Ed. [oo] This sentence is a paraphrase of Ramsay by Marx. Ed. [pp] The manuscript has We cannot consider. Ed. [qq] The manuscript has The industrial capitalist is the general distributor of the revenue; he pays . Ed. [rr] This is Marx s summing up of the arguments advanced by Ramsay. Ed. [ss] The manuscript has the . Ed. [tt] The manuscript has the larger the capital, the larger the proportion of the surplus gains . Ed. [uu] See this volume, p. 327. Ed. [vv] The manuscript has neither . Ed. [ww] This is in part Marx s paraphrase of Ramsay s argument. Ed. [xx] See this volume, p. 354. Ed.

Economic Manuscripts: Theories of Surplus-Value, Chapter 22

https://www.marxists.org/archive/marx/works/1863/theories-surplus-value/ch22.htm

||1102| Cherbuliez, Richesse au pauvret , Paris, 1841 (Reprint of the Geneva edition) [published under the title Riche ou pauvre]. (It is questionable whether we should specially include this fellow in this group [of economists] since most of what he writes is based on Sismondi, or whether we should on occasion insert his pertinent remarks in the form of quotations. |1102|| ||1103| Capital, says Cherbuliez, consists of the raw materials, the tools, the means of subsistence (op. cit., p. 16). There is no difference between a capital and any other part of wealth. It is only the way in which it is employed which determines whether a thing becomes capital, that is, if it is employed in a production as raw material, as tools, or as means of subsistence (loc. cit., p. 18). This is the standard way of reducing capital to the material elements in which it presents itself in the labour process, i.e., means of production and means of subsistence. The latter category, moreover, is not accurate since, though means of subsistence are indeed a condition for the producer, a prerequisite enabling him to exist during production, they themselves do not enter into the labour process, into which nothing enters but the object of labour, the means of production and labour itself. Thus the objective factors of the labour process which are common to all forms of production are here called capital, although the means of subsistence (in which wages are already included) tacitly implies the capitalist form of these conditions of production. Cherbuliez, like Ramsay, [assumes] that the means of subsistence which Ramsay calls circulating capital diminish (relatively, at any rate, to the total amount of capital and absolutely insofar as machinery continually throws workers out of employment). But both he and Ramsay appear to think that there is an inevitable reduction in the amount of means of subsistence, of necessaries, which can be employed as productive capital. But this is by no means the case. In this context, people always confuse that part of the gross product which replaces capital and is employed as capital, with that part which represents the surplus product. The means of subsistence decrease because a large portion of capital, that is, the part of the gross product employed as capital, is reproduced as constant capital instead of as variable capital. A larger portion of the surplus product, consisting of means of subsistence, is consumed by unproductive workers or idlers or exchanged for luxuries. That s all. True, the fact that a constantly smaller part of the total capital is converted into variable capital can also be expressed in other ways. The part of capital which consists of variable capital is equal to that part of the total product which the worker himself appropriates, produces for himself. Therefore, the smaller this part is the smaller accordingly is the portion of the total number of workers which is required to reproduce it (just as in the case of the individual worker, who works correspondingly less labour-time for himself). The total product, like the total labour of the workers, falls into two parts. One part the workers produce for themselves; the other part, they produce for the capitalist. Just as the [labour-] time of the individual worker can be divided into two parts, so can the [labour-] time of the whole working class. If the surplus labour is equal to half a day, it is the same as if half the working class produces means of subsistence for the working class and the other half produces raw materials, machinery and finished products for the capitalists, partly as producers and partly as consumers. It is ridiculous that Cherbuliez and Ramsay believe that the part of the gross product which can be consumed by the workers and can enter into their consumption in kind has been reduced of necessity or reduced at all. Only that part has been reduced which is consumed in this form and therefore as variable capital. On the other hand, a larger portion is eaten up by servants, soldiers, etc., or exported and exchanged for more sumptuous means of subsistence. The only important thing in both Ramsay and Cherbuliez is that they counterpose constant and variable capital and do not confine themselves to the distinction between fixed and circulating capital derived from circulation. For Cherbuliez counterposes that part of capital which goes on means of subsistence to that which consists of raw materials, auxiliary materials and means of labour, i.e., instruments, machines. Although two constituent elements of constant capital raw material and auxiliary material belong to circulating capital as far as the mode of circulation is concerned. The important thing in variations in the constituent elements of capital is not that relatively more workers are occupied in the production of raw materials and machinery than in that of direct means of subsistence this concerns only the division of labour but the proportion of the product which has to be used to replace past labour (i.e., to replace constant capital) to that which has to be used to pay living labour. The larger the scale of capitalist production, and hence the greater the accumulation of capital the greater is the share in the value of the product falling to the machinery and raw material of which the capital employed in the production of machinery and raw material consists. A correspondingly larger portion of the product must therefore be returned to production either in kind or by the producers of constant capital exchanging some of their products amongst themselves. The part of the product which belongs to production becomes larger, and the part which represents living, newly added labour becomes relatively smaller. Although, this part grows in terms of commodities use-values the development described is synonymous with increased productivity of labour. But the portion of this part which the worker receives falls relatively all the more. And the same process gives rise to a continuous relative redundancy of the working population. ||1104| <It is an incontrovertible fact that, as capitalist production develops, the portion of capital invested in machinery and raw materials grows, and the portion laid out in wages declines. This is the only question with which both Ramsay and Cherbuliez are concerned. For us, however, the main thing is: does this fact explain the decline in the rate of profit? (A decline, incidentally, which is far smaller than it is said to be.) Here it is not simply a question of the quantitative ratio but of the value ratio. If one worker can spin as much cotton as 100 [workers spun previously], then the supply of raw material must be increased a hundredfold, and this is moreover brought about only by the spinning-machine which enables one worker to control 100 spindles. But if simultaneously, one worker produces as much cotton as 100 workers did previously and one worker produces a spinning-machine whereas previously he produced only a spindle, then the ratio of value remains the same, that is, the labour expended in the spinning, [in the production of] the cotton and the spinning-machine remains the same as that expended previously in spinning, the cotton and the spindle. As far as the machinery is concerned, its cost is not as great as that of the labour it displaces, although the spinning-machine is much more expensive than the spindle. The individual capitalist who owns a spinning-machine must possess a greater amount of capital than the individual spinner who buys a spinning-wheel. But the spinning-machine is cheaper than the spinning-wheel in relation to the number of workers it employs. Otherwise it would not have displaced the spinning-wheel. The place of the spinner is taken by a capitalist. But the capital which the former laid out on the spinning-wheel was larger relative to the size of the product, than that which the capitalist lays out on the spinning-machine.> The increasing productivity of labour (insofar as it is connected with machinery) is identical with the decreasing number of workers relatively to the number and extent of the machinery employed. Instead of a simple and cheap instrument a collection of such instruments (even though they are modified) is used, and to that collection has to be added the whole part of the machinery which consists of the moving and transmitting parts; and also the materials used (like coal, etc.) to produce the motive power (such as steam). Finally, the buildings. If one worker is in charge of 1,800 spindles instead of driving a spinning-wheel, it would be quite ridiculous to ask why these 1,800 spindles are not as cheap as the single spinning-wheel. The productivity in this case is brought about precisely by the amount of capital employed as machinery. The ratio of the wear and tear of the machinery affects only the commodity; the worker confronts the total amount of machinery and similarly the value of the capital laid out in labour confronts the value of the capital laid out in machinery. There can be no doubt that machinery becomes cheaper, and this for two reasons: The application of machinery to the production of raw materials from which the machinery is made. The application of machinery in the transformation of these materials into machinery. In saying this, we already say two things. Firstly, that in both these branches, compared with the instruments required in the manufacturing industry, the value of the capital laid out in machinery also grows as compared with that laid out in wages. Secondly, what becomes cheaper is the individual machine and its component parts, but a system of machinery develops; the tool is not simply replaced by a single machine, but by a whole system, and the tools which perhaps played the major part previously, the needle for example (in the case of a stocking-loom or a similar machine), are now assembled in thousands. Each individual machine confronting the worker is in itself a colossal assembly of instruments which he formerly used singly, e.g. 1,800 spindles instead of one. But in addition, the machine contains elements which the old instrument did not have. Despite the cheapening of individual elements, the price of the whole aggregate increases enormously and the [increase in] productivity consists in the continuous expansion of the machinery. Further, one factor in the cheapening of machinery apart from that of its elements, is the cheapening of the source of the motive power (the steam-boiler, for example) and of the transmission mechanism. Economy of power. But this results precisely from the fact that to an increasing extent the same motor can drive a larger system of machines. The motor becomes relatively cheaper (or its cost does not grow in the same ratio as the increase in the size of the system in which it is employed; the motor becomes more expensive as its power grows, but not in the same degree in which it grows); even when its cost increases absolutely, it declines relatively. This is therefore a new and important motive, quite apart from the price of the individual machine, for increasing the capital that is laid out in machinery and confronts labour. One element the increasing speed of machinery increases productivity enormously but it does not affect the value of the machinery itself in any way. It is therefore self-evident or a tautological proposition that the increasing productivity of labour caused by machinery corresponds to increased value of the machinery relative to the amount of labour employed (consequently to the value of labour, the variable capital). ||1105| All circumstances which result in the use of machinery leading to a reduction in the price of commodities can be attributed, firstly, to a decrease in the amount of labour embodied in each individual commodity, secondly, however, to a decrease in the wear and tear of the machinery whose value enters into the individual commodity. The less rapid the wear and tear of the machinery, the less labour is required for its reproduction. This therefore increases the amount and the value of the capital existing as machinery as compared with that existing in labour. Only the question of raw material therefore remains to be dealt with. It is obvious that the quantity of raw material must increase proportionally with the productivity of labour; that is, the amount of raw material must be proportionate to that of labour. This relationship is closer than it appears. Let us assume, for example, that 10,000 lbs. of cotton are consumed weekly. Calculating 50 weeks to the year, this would amount to 10,000 50, that is, 500,000 lbs. Let us also assume that the amount paid out in wages is 5,000 over the year. And if a pound of cotton is assumed to cost 6d. this comes to 250,000 shillings or 12,500. Let us assume that the capital turns over 5 times during the year. This means that in the course of a fifth of a year, 100,000 pounds of raw material cotton is used, equal to a value of 2,500. And 1,000 goes on wages in the same fifth of a year. This is more than a third of the value of the capital laid out on the cotton. This does not alter the ratio. If the value of the cotton amounts to 10,000 every fifth of a year and that of the labour to 1,000, then it amounts to one-tenth. (If one considers the product of the whole year, 50,000 on one side and 5,000 on the other it is also one-tenth.) <The value of a commodity, as far as machinery is concerned, is determined by the wear and tear of the machinery, that is, solely by the value of the machinery insofar as it enters into the process of the formation of value, in other words, insofar as it is used up in the labour process. Profit, on the contrary, is determined (leaving raw materials out of account) by the value of the whole of the machinery which enters into the labour process irrespective of the degree to which it is used up. Profit must therefore decline as the total amount of labour employed declines compared with the part of capital laid out in machinery. It does not decline in the same proportion because surplus labour increases.> One may ask with regard to raw material: If, for example, productivity in spinning increases tenfold, that is, a single worker spins as much as ten did previously, why should not one Negro produce ten times as much cotton as ten did previously, that is, why should the value ratio not remain the same? The spinner uses ten times as much cotton in the same time, but the Negro produces ten times as much cotton in the same time. The ten times larger amount of cotton therefore costs no more than a tenth of this amount cost previously. This means that despite the increase in the amount of the raw material, its value ratio to variable capital remains the same. In fact it was only the large fall in the price of cotton which enabled the cotton industry to develop in the way it did.* The dearer the material (gold and silver, for example) the less are machinery and the division of labour applied in transforming it into articles of luxury. This is because too much capital has been advanced for the raw materials and the demand for these products is limited owing to the expensive raw materials. To this it is quite easy to answer that some kinds of raw materials, such as wool, silk, leather, are produced by animal organic processes, while cotton, linen, etc., are produced by vegetable organic processes and capitalist production has not yet succeeded, and never will succeed in mastering these processes in the same way as it has mastered purely mechanical or inorganic chemical processes. Raw materials such as skins, etc., and other animal products become dearer partly because the insipid law of rent increases the value of these products as civilisation advances. As far as coal and metal (wood) are concerned, they become much cheaper with the advance of production; this will however become more difficult as mines are exhausted, etc. <While it can be said with regard to corn-rent and mine-rent that they do not increase the value of the product (only its market price) but are rather the expression of the value of the product (the excess of its value over the production price), there is, on the other hand, no doubt that animal rent, house rent, etc., are not consequences but causes of the increasing values of these things.> The cheapening of raw materials, and of auxiliary materials; etc., checks but does not cancel the growth in the value of this part of capital. It checks it to the degree that it brings about a fall in profit. This rubbish is herewith disposed of |1105|| . ||1105| <In considering profit, surplus-value is assumed as given. And only the variations in constant capital and their influence on the rate of profit are considered. There is only one way in which surplus-value directly affects constant capital, namely through absolute surplus labour, lengthening of the working-day, as a result of which the relative value of constant capital is reduced. Relative surplus labour where the working-day remains unaltered (apart from the greater intensification of labour) in-creases the value ratio of profit to total capital by increasing the surplus itself. Absolute surplus labour-time reduces the cost of constant capital relatively.> ||1106| Let us return to Cherbuliez. The formulas he uses for the rate of profit are either mathematical expressions for profit as it is commonly understood, without involving any kind of law, or they are quite wrong, although he has an inkling of the matter, approaches close to it. <In point of fact, profit is the relationship of the surplus-value of the product to the value of the total capital outlay regardless of the differences in its elements. But the surplus-value is itself determined by the size of the variable capital and the rate at which it produces surplus-value, and the ratio of this surplus-value to the total capital is again determined by the ratio of the variable to the constant capital and also by changes in the value of constant capital.> Cherbuliez first states correctly that profit is determined by the value of the product in relation to the different elements of productive capital. Then he flies off suddenly to the product itself, to the total amount of products. But the amount of products may increase without its value increasing. Secondly, a comparison between the amount of the product and the quantity of products of which the capital used up and not used up consisted, can at best only be made in the way Ramsay does, by comparing the aggregate national product with the constituent elements expended in kind during its production.[a] But as regards capital, the form taken by the product is different from its ingredients in every sphere of production (even in those branches of industry in which, as in agriculture, one part of the product is used in kind as a production element of the product). Why does Cherbuliez stray on to this false path? Because, despite his vague idea that the organic composition of capital is decisive for the rate of profit, he in no way uses the contradiction between variable capital and the other part of capital in order to explain surplus-value which, like value itself, he does not explain at all. He has not shown how surplus-value arises and therefore has recourse to surplus product, i.e., to use-value. Although all surplus-value takes the form of surplus product, surplus product as such does not represent surplus-value. <A product may contain no surplus-value, as, for example, in the case of a peasant who owns his own implements as well as his own land and only works exactly the same amount of time as any wage-worker does to reproduce his own wages, say six hours. In a good year, he might produce twice as much [as usual]. But the value would remain the same. There would be no surplus-value, although there would be surplus product.> In itself it was already a mistake on the part of Cherbuliez to represent variable capital in the passive and purely material form of means of subsistence, that is, as use-value, a form which it obtains in the hands of the workers. If, on the other hand, he had considered it in the form in which it actually appears, namely, as money (as the form in which exchange-value, i.e., a certain amount of social labour-time as such, exists), then [he would have seen that] for the capitalist it represents the labour which he exchanges for it (and, as a result of this exchange of materialised labour for living labour, the variable capital would be set in motion and would grow); variable capital in the shape of labour but not if it is regarded as means of subsistence becomes an element of productive capital. Means of subsistence, on the other hand, are the use-value, the material existence of the variable capital when it becomes the revenue of the worker. Variable capital regarded as means of subsistence is, therefore, just as passive an element as both the other parts of capital which Cherbuliez describes as passive .* The same distortion of views prevents him from elaborating the rate of profit out of the relationship of this active element to the passive element, and from showing that it declines as society advances. Cherbuliez in fact reaches no other conclusion but that the means of subsistence ||1107| decline as a consequence of the development of productivity while the working population grows, that is, as a result of the redundant population, wages are consequently pushed down below their value. None of his explanations are based on the exchange of [equal] values or the payment of labour-power at its value and profit thus actually appears to be a deduction from wages (although he doesn t say so). This deduction may indeed occasionally constitute a part of real profits, but it can never serve as the foundation for the elaboration of the category of profit. Let us first of all reduce the first proposition to its correct formulation. This is the primary (usual) form in which profit appears and it is likewise the form in which it appears in the consciousness of capitalists. In other words, [profit is] the excess of the value of the product gained during a definite period of time over the value of the capital expended. Or the excess of the value of the product over the cost-price of the product. Even the definite period of time in Cherbuliez s statement appears like a bolt from the blue, since he has not dealt with the circulation process of capital. The first proposition, therefore, is nothing but the usual definition of profit, of the immediate form in which it appears. The second proposition: Paraphrased again, it would read thus: The only purpose of this is the surreptitious introduction of the completely unproven and, in the way it is formulated, quite false proposition (for it already presupposes equalisation to the general rate of profit) that the amount of profit depends on the amount of capital employed. But an apparent causal nexus is to be introduced because the growth in the total amount of products is proportionate to the capital employed and not to the capital used up . Let us take this sentence in both its formulations that in which it is written and that in which it ought to have been written. In this context and in accordance with the conclusion which it is intended to serve as intermediate clause it should be written as follows: Here, evidently, surplus-value is to be evolved on the basis of the fact that the excess of the capital employed over that used up creates the excess value of the products. But the capital which is not used up (machinery, etc.) retains its value (for the fact that it is not used up means precisely that its value has not been used up); it retains the same value after the conclusion of the production process as it had before this process started. If any change in value has taken place, it can only have happened in that part of the capital which has been used up, and which therefore entered into the process of the formation of value. In point of fact it is also wrong to say that, for example, a capital of which a third is not used up and two-thirds are used up in production, would inevitably yield a higher profit than one in which two-thirds are not used up and one-third is used up, provided the rate of exploitation is the same (and disregarding the equalisation of the rate of profit). For obviously, the second capital contains more machinery, etc., and other elements of constant capital, while the first capital contains less of these elements and sets more living labour in motion, and therefore produces more surplus labour as well. If we take the proposition as formulated by Cherbuliez himself, then it must be said first that it is of no use to him, because the amount of products or the amount of use-values as such by no means determines either the value or the surplus-value or the profit. But what is behind all this? A part of constant capital consisting of machinery, etc., enters into the labour process without entering into the formation of value, it helps to increase the volume of products without adding anything to its value. (For insofar as its wear and tear adds value to the product, it belongs to the capital used up and not to the capital employed as opposed to that used up.) But, by itself, this unconsumed part of constant capital does not bring about a growth in the amount of products. It helps to produce a greater output in a given labour-time. Therefore, if only the same amount of labour-time were expended as is contained in the means of subsistence, the same amount of products would be produced. The excess of products is therefore due to a change which takes place in this part of the capital used up and not to the excess of the capital employed over that consumed (assuming that it is not a matter of branches of industry in which as in agriculture the volume of products is, or can be, independent of the amount of capital laid out, [because] the productivity of labour is, in part, dependent on uncontrollable natural conditions). If however he considers constant capital used up or otherwise as independent of the labour-time, independent of the change in the variable capital which takes place in the realisation process, then he might just as well say: For the increase of products is physically identical with the growth of this part of capital. In agriculture on the other hand (and likewise in the extractive industries), where only a small proportion of the capital invested is not [annually] used up (i.e., constant capital) and a relatively large proportion of capital is used up (as wages for example), the amount of products, provided the land is fairly fertile, can be much larger than in the advanced countries where the ratio of capital invested to capital used up is infinitely greater. The second proposition thus amounts to an attempt to bring in surreptitiously surplus-value (the indispensable basis of profit). [Cherbuliez s conclusion:] Previously, profit ought to have been explained. But nothing emerged except a definition of it which merely states the form in which it appears, i.e., the fact that profit is equal to the excess of the value of the total product over the cost-price of the product or over the value of the capital used up, which is the vulgar definition of profit. Now the rate of profit ought to be explained. But once again nothing emerges except the vulgar definition. The rate of profit is equal to the ratio of profit to the total capital, or, what amounts to the same thing, it is equal to the ratio of the excess of the value of the product over its cost-price to the total capital advanced for production. The distorted conception and bungling application of the approximately correct distinction between the elements of capital, and the vague idea that profit and rate of profit are directly connected with the ratio of these elements to one another, only lead to a repetition of the generally known phrases in a rather doctrinaire fashion, in fact merely to a statement that profit and rate of profit exist without, however, anything being said about their nature. The matter is not improved by the fact that Cherbuliez expresses his doctrinaire formulae in algebraic language: Which means nothing more than that the rate of profit equals the ratio of profit to capital and that profit equals the excess of the value of the product over its cost-price. In general, when Cherbuliez speaks about consumed and unconsumed capital he has at the back of his mind the difference between fixed and circulating capital, and not the distinction which he himself has drawn, namely, that between the different types of capital based on the production process. Surplus-value is antecedent to circulation and no matter how much the differences arising out of circulation affect the rate of profit, they have nothing to do with the origin of profit. Here the reason for the decline in the rate of profit is touched on, but in view of the preceding distortions, it can only lead to confusion and contradictions which cancel each other out. First the amount of capital consumed grows but the amount of products grows even more rapidly (i.e., the excess of the value of the products over their cost-price in this case), for it grows in proportion to the capital invested and this grows more rapidly than the capital consumed. Why the fixed capital grows more rapidly than the mass of raw materials, for example, is not explained anywhere. But never mind, the amount of profit grows in proportion to the capital invested, to the total capital, but ||1109|| the rate of profit is nevertheless supposed to fall, because the total capital grows more rapidly than the mass of products or rather than the amount of profit. First the amount of profit grows at a rate at least as great as that at which the total amount of the capital invested grows, and then the rate of profit falls, because the total amount of capital invested grows more rapidly than the amount of profit. First P-c grows at least proportionally to C, and then P-c/C falls, because C increases even more rapidly than P-c, which increases at least as rapidly as C. If we throw aside all this confusion, then all that remains is the tautology that P-c/C can fall again although P-c increases, that is, that the rate of profit can fall although profit increases when the rate falls. The rate of profit simply signifies the ratio of P-c to C, [and this ratio declines] when capital increases more rapidly than the amount of profit. Thus the final pearl of wisdom is that the rate of profit can fall, that is, the ratio of an increasing amount of profit to capital can fall when the capital increases more rapidly than the amount of profit, or if the amount of profit, despite the absolute growth, declines relatively in comparison with the capital. This is nothing but a different expression for the decline in the rate of profit. But that this phenomenon is within the bounds of possibility, and even its existence, has never been called to question. The sole point at issue was precisely to explain the cause of this phenomenon, and Cherbuliez explains the decline in the rate of profit, the decline in the amount of profit in relation to the total capital, by the relative increase in the amount of profit which is at least proportionate to the growth of the capital. He obviously surmises that the mass of living labour employed declines relatively to past labour, although it increases absolutely, and that therefore the rate of profit must decline. But he never arrives at a clear understanding. The closer one comes to the threshold of understanding, the more distorted the statements become, unless the threshold is actually crossed and [the greater is] the illusion of having crossed it. On the other hand, what he says about the equalisation of the general rate of profit is very much to the point. |1109|| ||1109| After the deduction of rent, what remains of the amount of profit, that is, of the excess of products over the capital consumed, is divided between the capitalist producers in proportion to the capital each has invested, whereas the portion of the product which corresponds to the capital used up and is intended to replace it, is divided in proportion with the capital actually used up. This dual law of division comes about as a result of competition, which tends to equalise the advantages of the different investments of capital. Finally, this dual law of division determines the respective values and prices of the different kinds of products (loc. cit., pp. 71-72). This is very good. Only the concluding words are wrong, namely, that the formation of the general rate of profit determines the values and prices (it should be prices of production) of commodities. On the contrary, the determination of the value is the primary factor, antecedent to the rate of profit and to the establishment of production prices. How can any kind of division of the amount of profit , i.e., of the surplus-value ||1110| which is itself only a part of the total value of commodities determine the amount of profit , that is, the surplus-value, that is, the value of the commodities? This is only correct if, by relative values of commodities, one means their production prices, The whole lopsidedness of Cherbuliez s presentation arises from the fact that he does not examine the origin and the laws of value and surplus-value independently. In other respects, he describes the relation between wage-labour and capital more or less correctly. People who neither receive anything by devolution (legal transfer, inheritance, etc.), nor have any possessions they can exchange, can[b] obtain what they need only by offering their labour to the capitalist. They only acquire the right to the things which are allocated to them as the price of labour, but they have no right to the product of their labour, nor to the value which they have added (op. cit., pp. 55-56). By exchanging his labour for a certain volume of means of subsistence, the worker completely renounces all right to the other portions of capital The distribution of these products remains the same as it was previously; it is not modified in any way by the above-mentioned convention. The products continue to belong exclusively to the capitalist who has provided the raw materials and the means of subsistence. This is an inescapable sequence of the law of appropriation, the fundamental principle of which was, conversely, the exclusive right of every worker to the product of his labour (p. 58). This fundamental principle, according to Cherbuliez, is as follows: Cherbuliez does not understand nor does he explain how the law of commodities, according to which commodities are equivalents and exchange with one another in proportion to their value, i.e., to the labour-time embodied in them, unexpectedly leads to the result that on the contrary capitalist production and only on the basis of capitalist production is it essential for the product to be produced as a commodity depends on the fact that one portion of labour is appropriated without exchange. He only senses that a transformation has suddenly taken place. This fundamental principle is a pure fiction. It arises from the surface appearance of commodity circulation. Commodities are exchanged with one another according to their value, that is, according to the labour embodied in them. Individuals confront one another only as commodity owners and can therefore only acquire other individuals commodities by alienating their own. It therefore appears as if they exchanged only their own labour since the exchange of commodities which contain other people s labour, insofar as they themselves were not acquired by the individuals in exchange for their own commodities, presupposes different relations between people than those of [simple] commodity owners, of buyers d of sellers. In capitalist production this appearance, which its surface displays, disappears. What does not disappear, however, is the illusion that originally men confront one another only as commodity owners and that, consequently, a person is only a property owner insofar as he is a worker. As has been stated, this originally is a delusion arising from the surface appearance of capitalist production and has never existed historically. In general, man (isolated or social) always comes on to the stage as a property owner before he appears as a worker, even if the property is only what he procures for himself from nature (or what he as a member of the family, tribe, communal organisation, procures partly from nature, partly from the means of production which have already been produced in common). And as soon as the first animal state is left behind, man s property in nature is mediated by his existence as a member of a communal body, family, tribe, etc., by his relationship to other men, which determines his relationship to nature. The propertyless labourer as a fundamental principle is rather a creature of civilisation and, on the historical scale, of capitalist production . This is a law of expropriation not of appropriation , at least not simply of appropriation in the way Cherbuliez imagines it, but a kind of appropriation which corresponds to a definite, specific mode of production. |1110|| ||1111| Cherbuliez says: But this applies not only to the products, but also to labour. Raw materials, etc., and instruments belong to the capitalist. They are the converted form of his money. On the other hand, when he has bought labour-power or the daily (say 12 hours) use of labour-power, with a sum of money equal to the product of six hours of labour, then the labour of 12 hours belongs to him; it is appropriated by him before it is carried out. The process of production itself turns labour into capital. But this transformation is an act which takes place later than its appropriation. The products are converted into capital, physically converted insofar as in the process of production they function as conditions of labour, conditions of production, objects and instruments of labour, and formally converted insofar as not only their value is perpetuated but as they become means for absorbing labour and surplus labour, insofar as they actually function as absorbers of labour. ||1112| On the other hand: the labour-power appropriated before the [production] process is turned directly into capital in the course of the process by being converted into the conditions of labour and into surplus-value, [since] as a result of its embodiment in the product, it not only preserves the constant capital but replaces the variable capital and adds surplus-value. |1112|| [Cherbuliez writes:] ||1110| Every accumulation of wealth provides the means for accelerating further accumulation (op. cit., p. 29). {Ricardo s view (derived from Smith) that all accumulation can be reduced to expenditure on wages, would be incorrect even if no accumulation in kind took place which is the case, for example, when the farmer sows more seed, the stock-breeder increases his stock of cattle for breeding or for fattening, the owner of engineering works uses part of his surplus-value in the form of machine tools and even if all producers who produce the elements of some part of capital did not over-produce regularly, counting on the fact of annual accumulation, i.e., the expansion of the general scale of production. Moreover, the peasant can exchange part of his surplus corn with the stock-breeder, who may convert this corn into variable capital while the peasant converts his corn into constant capital [by means of this exchange]. The flax-grower ||1111| sells part of his surplus product to the spinner, who converts it into constant capital. With this money the flax-grower can buy tools and the tool-maker can then buy iron, etc., so that all these elements are turned directly into constant capital. But disregarding all this, let us assume that a manufacturer of machines wants to convert an additional capital of 1,000 into elements of production. He will of course lay out part of it on wages, say 200. But he buys iron, coal, etc., with the remaining 800. Let us assume that this iron, coal, etc., has first to be produced. Then, if the iron or coal producers either have no excess (accumulated) stocks of their commodities, and likewise have no additional machinery and are unable to buy it immediately (for in this case too constant capital would be exchanged for constant capital), they can only produce the required iron and coal if they work their old machinery longer. As a result, they would have to replace it more rapidly, but a part of its value would enter into the new product. Irrespective of this, however, the iron manufacturer needs more coal in any case and must therefore transform at least part of his share in the 800 into constant capital. Both coal and iron producers sell their wares in such a way that they contain unpaid surplus labour. And if this amounts to a quarter, then this alone means that 200 out of the 800 is not converted into wages, not to mention the part which has to make good the wear and tear of the old machinery. The surplus consists always of the articles produced by the particular capital, i.e., coal, iron, etc. Part of the surplus is converted directly into constant capital when the producers whose commodities serve as elements of production for other producers exchange these commodities with one another. That part of the surplus value, however, which is exchanged against the products of those who produce means of subsistence and replaces the constant capital in these branches, provides the necessary variable capital. The producers of means of subsistence that can no longer enter as elements into their production (except as variable capital) acquire additional constant capital through the same process which provides the other producers with additional variable capital. The following features distinguish reproduction insofar as it constitutes accumulation from simple reproduction. Firstly: Both the constant and variable elements of production which are accumulated consist of newly added labour. They are not used as revenue, although they arise from profit. They consist of profit or surplus labour, whereas in the case of simple reproduction part of the product represents past labour (i.e., in this context, labour which has not been performed in the current year). Secondly: If the labour-time in certain branches is lengthened, that is, if no additional instruments or machines are employed, the new product must indeed, to a certain extent, pay for the more rapid wear and tear of the old [tools or machines], and this accelerated consumption of the old constant capital is likewise an aspect of accumulation. Thirdly: As a result of the additional money capital which arises in the process of [extended] reproduction partly through the freeing of capital, partly through the conversion of part of the product into money, partly because, as a result of the money collected by the producer, the demand for other [commodities], e.g., [those offered by the] sellers of luxury goods, is reduced the systematic replacement of the elements [of production] is by no means a necessity, as it is in the case of simple reproduction. With the additional money anyone can buy or command products, although the producer from whom the purchase is made may neither expend his revenue on the product of the purchaser nor replace his capital with it}. <Additional capital (constant or variable) must appear in the form of money capital on one side, even if this only exists in the form of outstanding claims, whenever it is not balanced by a corresponding addition on the other side.> For the rest, Cherbuliez presents a remarkable amalgam of Sismondian and Ricardian contradictory views. |1111|| ||1112| Sismondian. In this situation, the increase in productive capital does not necessarily bead to an increase in the amount of means of subsistence intended to constitute the price of labour; it can be accompanied at beast for a time by an absolute diminution of this element of capital, and consequently by a reduction in the price of labour (loc. cit., p. 63). <This is Sismondian; the effect on the wage level is the only aspect considered by Cherbuliez. This problem does not arise at all in an investigation where labour is always supposed to be paid at its value and the fluctuations of the market price of labour above or below that point (the value [of labour]) are not taken into consideration.> The ratio between the different elements of productive capital is determined in two ways: First: By the organic composition of productive capital. By this we mean the technological composition. With a given productivity of labour, which can be taken as constant so long as no change occurs, the amount of raw material and means of labour, that is, the amount of constant capital in terms of its material elements which corresponds to a definite quantity of living labour (paid or unpaid), that is, to the material elements of variable capital, is determined in every sphere of production. If the proportion of the materialised labour to the living labour employed is small, then the portion of the product that represents living labour will be large regardless of how this portion is divided between capitalist and worker. If the reverse is the case, the portion will be small. With a given rate of exploitation of labour, the surplus labour too will be large in the former case and small in the latter. This can only change as a result of a change in the mode of production which alters the technological relationship between the two parts of capital. Even in this case, the absolute amount of living labour employed by the capital which uses a greater proportion of constant capital may be equal or even larger if capitals of different size are compared. But it must be smaller relatively. For capitals of the same size, or calculated in proportion to the total capital 100 for example it must be smaller both relatively and absolutely. All changes arising from the development (not the decline) of the productive power of labour, reduce that part of the product which represents living labour, that is, they reduce variable capital. Regarding capital invested in different branches of production ||1113| , one can say [that these changes] reduce the variable capital absolutely in those branches which have reached a higher level of production, since wages are assumed to be equal. So much with regard to the changes arising from changes in the mode of production. Secondly, however, if one assumes that the organic composition of capitals is given and likewise the differences which arise from the differences in their organic composition, then the value ratio can change although the technological composition remains the same. What can happen is: a) a change in the value of constant capital; b) a change in the value of the variable capital; c) a change in both, in equal or unequal proportions. a) If the technological composition remains the same and a change in the value of constant capital takes place, its value will either fall or rise. If it falls, and only the same amount of living labour is employed as previously, i.e., if the scale or level of production remains the same, if, for example, 100 men are employed as previously, then in physical terms, the same amount of raw material and means of labour is required as previously. But the surplus labour bears a greater proportion to the total capital advanced. The rate of profit rises. In the opposite case it declines. In the former case, for the capitals already employed in that sphere (not those newly invested in it after the change of value in the elements of constant capital has taken place), the total sum of the capital employed diminishes, that is, some portion of the capital is set free, although production continues to be carried on on the same scale; or the capital thus liberated is again employed in the same sphere of production and has then the same effect as an accumulation of capital. The scale of production is enlarged, and the absolute amount of surplus labour is increased proportionally. With a given method of production, every accumulation of capital results in an increase in the total amount of surplus-value whatever the rate of surplus-value may be. Conversely, if the value of the elements of constant capital increases, then either the scale of production (hence the mass of the total capital advanced) must increase to employ the same quantity of labour (the same variable capital the value of which has remained unchanged) as before; and then although the absolute amount of surplus-value and the rate of surplus-value remains the same, its proportion to the total capital advanced decreases, and hence the rate of profit falls. Or the scale of production and the total capital advanced is not enlarged, then in all circumstances, the variable capital must decrease. If the same sum as previously is laid out in constant capital, it now represents a smaller amount of material elements and since the technological conditions remain the same, less labour will be employed. The total capital advanced therefore decreases by [an amount corresponding to] the labour dismissed; the total value of the capital advanced thus decreases, but a greater proportion of the diminished capital is laid out in constant capital (in terms of value). The surplus-value decreases absolutely, because less labour is employed, and the ratio of the remaining surplus-value to the total capital advanced falls, because variable capital bears a smaller proportion to constant capital. On the other hand, if the same total capital is employed as before the reduced value of the variable capital (representing a smaller quantity of labour, living labour, employed), being counterbalanced by the increased value of the constant capital; the one being diminished in the same proportion as the other is augmented, then the absolute quantity of surplus-value falls; because less labour is employed, and at the same time, the proportion of this surplus-value to the total capital advanced falls. Thus the rate of profit falls for two reasons, the diminution in the amount of surplus labour, and the decreasing proportion of that surplus labour to the total capital advanced. In the first case where (with decreasing value of the elements of constant capital) the rate of profit rises in all circumstances, the scale of production must be extended if the amount of profit is to increase. Let us assume that the capital is 600 half constant, half variable. If the constant capital were to lose half its value, it would only amount to 150, although the variable capital would remain 300. The total capital employed would be only 450, 150 being freed. If the 150 are added to the capital again, then 100 of the 150 will now be laid out in variable capital. ||1114| Thus the scale of production is expanded and more labour employed, if the same capital continues to be used in the production process. In the opposite case, where with rising value of the elements of constant capital the rate of profit falls in all circumstances, the scale of production, and therefore the capital advanced, must be increased if the amount of profit is not to decrease and the amount of labour employed (and therefore surplus-value) is to remain the same. If this is not done, if only the old or less than the old capital is employed, then not only does the rate of profit decline, but also the amount of profit. The rate of surplus-value remains unchanged in both cases; it changes, however, if any change in the technological composition of capital takes place: it increases if the constant capital increases (because labour is then more productive) and declines when it falls (because labour is then less productive). b) If there is any change in the value of variable capital independent of the organic composition, it can only occur because of a fall or a rise in the price of means of subsistence that are not produced in the sphere of production under consideration but enter into it as commodities from outside. If the value of variable capital falls, it nevertheless represents the same amount of living labour as before. The same quantity of labour merely costs less. If therefore the scale of production remains the same (since the value of constant capital is unchanged), then the part of the total capital used for the purchase of labour is diminished. Less capital needs to be laid out in order to pay the same number of workers. Thus, in this case, if the scale of production remains the same, the amount of capital laid out diminishes. The rate of profit increases, and this for two reasons. The [amount of] surplus-value has increased; the ratio of living labour to materialised labour has remained the same, but the increased surplus-value correlates with a smaller total capital. If, on the other hand, the capital freed is again invested, then this amounts to accumulation. If the value of the variable capital increases, then a greater total capital must also be laid out in order to employ the same number of workers as before, because the value of the constant capital remains the same and that of the variable capital has risen. The amount of labour remains the same, but a smaller part of it is surplus labour, and this smaller part corresponds to a larger capital. This takes place when the scale of production remains the same, while the value of the total capital increases. If the value of the total capital does not increase, the scale of production must be reduced. The amount of labour declines and a smaller portion of this reduced amount constitutes surplus labour, which, too, bears a smaller proportion to the total capital advanced. The organic changes and those brought about by changes of value can have a similar effect on the rate of profit in certain circumstances. They differ however in the following way. If the latter are not due simply to fluctuations of market prices and are therefore not temporary, they are invariably caused by an organic change in the spheres that provide the elements of constant or of variable capital. [c)] It is not necessary here to examine case 3 in detail. In the case of capitals of equal size or if the calculation is based on equal amounts of the total capital, 100, for example the organic composition may be the same in different spheres of production, but the value ratio of the primary component parts of constant and variable capital may be different according to the different values of the amount of instruments and raw materials used. For example, copper instead of iron, iron instead of lead, wool instead of cotton, etc. On the other hand, is it possible for the organic composition to be different if the value ratio remains the same? If the organic composition is the same, the relative amounts which constitute constant capital and living labour are the same per 100. The quantitative proportions are the same. The value of the constant capital may be the same, although the relative amounts of labour set in motion are different. If the machinery or raw materials are dearer (or cheaper), less labour, for example, may be required, but in this case the value of the variable capital is also relatively smaller or vice versa. ||1115| Let us take A and B. c and v are the component parts (in terms of value) of A, and c and v those of B (again in terms of value). If c :v is equal to c:v then c v equals v c. Consequently likewise c /c equals v /v. Since the value ratios [of constant to variable capital] are equal, only the following variations are possible. If in one sphere more surplus labour is carried out than in another sphere, <for example, night work is impossible in agriculture, and although the individual agricultural labourer can be over-worked, nevertheless the total amount of labour which can be expended on a given area of land is limited by the object being produced (corn), whereas in a factory of a given size the amount produced depends ( [c]) on the hours of labour worked that is to say, it is due to the different kinds of production that more surplus labour can be employed in one sphere at a given level of production than in another> then, even if the value ratio of constant and variable capital is the same, the amount of labour employed in proportion to the total capital will nevertheless be different. Or, let us assume that the raw material is dearer and labour (of greater skill) is dearer, in the same proportion. In this case [capitalist] A employs 5 workers, where [capitalist] B employs 25, and they cost him 100 as much as the 25 workers, because their labour is dearer (their surplus labour is therefore also worth more). These 5 workers work up 100 lbs. of raw material, y, worth 500 and B s workers work up 1,000 lbs. of raw material, x, worth 500, because the raw material is dearer and the productive power of the workers is less highly developed in the case of A. The value ratio here 100 v to 500 c is he same in both cases, but the organic composition is different. The value ratio is the same: The value of constant capital in A is the same as in B, and proportionately A lays out the same amount of capital in, wages as B. But the quantity of his products will be smaller. Although he employs the same absolute quantity of labour as B, he uses more relatively, because his constant capital is dearer. He processes less raw material, etc., in the same time, but this smaller quantity costs him as much as the larger quantity processed by B. The value ratio in this case is the same, the organic composition is different. In the other case the value ratio being assumed to be the same, this can occur only if the amounts of the surplus labour are different or if the value of the different kinds of labour are different. The organic composition can be taken to mean the following: Different ratios in which it is necessary to expend constant capital in the different spheres of production in order to absorb the same amount of labour. The combination of the same amount of labour with the object of labour requires either that both more raw material and more machinery are used in one case than in the other, or that more of only one of these is used. {Where the ratios between fixed and circulating capital are very different, those between constant and variable capital can be the same, consequently the surplus-value can be the same although the values produced annually must be different. Let us assume that in the coal industry where no raw materials are used (apart from auxiliary materials), the fixed capital constitutes half the total capital and variable capital the other half. Let us assume that in tailoring the fixed capital is zero (as in the previous case we disregard auxiliary materials), that the raw materials constitute half and the variable capital the other half of the total capital. Given the same degree of exploitation of labour, both will realise the same amount of surplus-value, since both employ the same amount of labour in proportion to capital, i.e., per 100. But let us assume that fixed capital in the coal industry turns over once every 10 years while there is no difference in the rate of turnover of circulating capital in both cases. At the end of the year (we will assume that the variable capital turns over once a year in both cases) the tailor s capital will have produced va1ues amounting to 150 if the surplus-value is 50. The coal producer, on the other hand, will have produced values amounting to 105 at the end of the first year (consisting of 5 for fixed capital, 50 for variable and 50 for surplus labour). As in the case of the tailor, the total value of his product plus the fixed capital will amount to 150, that is, the product, 105, plus 45 for the remaining fixed capital. The production of different magnitudes of value therefore does not preclude the production of the same amount of surplus-value. In the second year, the fixed capital of the coal producer would amount to 45, variable capital to 50 and surplus-value to 50, that is, the capital advanced would be 95 and the profit would be 50. The rate of profit would have risen, because the value of the fixed ||1116| capital would have declined by one tenth as a result of wear and tear during the first year. Thus there can be no doubt that in the case of all capitals employing a great deal of fixed capital provided the scale of production remains unchanged the rate of profit must rise in proportion as the value of the machinery, the fixed capital, declines annually, because wear and tear has already been taken into account. If the coal producer sells his coal at the same price throughout the ten years, then his rate of profit must be higher in the second year than it was in the first and so forth. Or one would have to assume that the maintenance work, etc., stands in direct proportion to the depreciation, so that the total sum advanced annually under the heading of fixed capital remains the same. This extra profit may be equalised also as a result of the fact that apart from wear and tear the value of fixed capital alls in the course of time, because it has to compete with new, more recently invented, better machinery. On the other hand this rising rate of profit, which results naturally from wear and tear, makes it possible for the declining value of the fixed capital to compete with newer, better machinery, the full value of which has still to be taken into account. Finally, the coal producer sold his coal more cheaply [at the end of the second year], on the basis of the following calculation: 50 on 100 means 50 per cent profit, 50 per cent on 95 comes to 47 1/2; if therefore he sold the same quantity of coal [not for 105 but] for 102 1/2 then he would have sold it more cheaply than the man whose machinery, for example, began to operate only in the current year. Large installations of fixed capital presuppose possession of large amounts of capital. And since these big owners of capital dominate the market, it appears that only for this reason their enterprises yield surplus profit (rent). In the case of agriculture, this rent derives from working relatively fertile land, but here we are dealing with a case where relatively cheaper machinery is utilised.} <A large number of instances which are adduced in connection with the relation of fixed to circulating capital, refer to the difference between variable and constant capital. First of all, the proportion of constant to variable capital can be the same although the proportion of fixed to circulating capital is different. Secondly, in the case of constant and variable capital it is a question of the primary division of capital between living and materialised labour, not of the modification of this relationship by the circulation process or the influence of this latter on reproduction. It is clear first of all that the difference between fixed and circulating capital can affect surplus-value (apart from the differences in the mass of living labour employed, i.e., differences which are related to the ratio of variable to constant capital) only insofar as it affects the turnover of the total capital. It is therefore necessary to investigate how the turnover affects surplus-value. Two factors are obviously closely connected with it: 1) surplus-value cannot be accumulated, reconverted into capital, so rapidly (so often); 2) the capital advanced must increase both to continue to employ the same number of workers, etc., and because the advances of money which the capitalist makes to himself to cover his own consumption costs must extend over a longer period. These factors are important in connection with profit. Here, however, it is, to begin, with, only necessary to examine how they affect surplus-value. One must moreover always clearly distinguish between these two factors.> <Everything which increases the capital outlay without proportionally increasing the surplus-value, reduces the rate of profit even if the surplus-value remains the same; the opposite is the case with everything which reduces the outlay. Insofar, therefore, as a large amount of fixed capital in proportion to circulating capital or different turnover periods of capital affects the size of the capital outlay, it affects the rate of profit even if it does not at all affect the surplus-value.> <The rate of profit is not simply the surplus-value calculated on the capital advanced, but the mass of surplus-value realised within a given period, that is, in a definite period of circulation. Insofar as the difference between fixed and circulating capital affects the mass of surplus-value which a particular capital yields within a given period, it affects the rate of profit. Two aspects must be taken into consideration: firstly, the difference in the size of the capital advanced (relative to the surplus-value realised) and secondly, the difference in the length of time for which these advances have to be made before they are returned with a surplus.> ||1117| {The reproduction time, or rather, the number of reproductions taking place in a definite period of time, is substantially affected by two circumstances. 1)The product remains longer in the sphere of production, in the strict sense of the term. It is possible firstly that, in order to be produced, one product requires a longer period of time than another; it may require a larger part of a year, a whole year or even more than a year.(The latter is the case for example with buildings, in stock-breeding and the production of certain luxuries.) In this case, the product continually absorbs labour often a great deal of labour is absorbed (for instance by luxury articles and buildings) in relation to the constant capital the amount depending on the composition of the productive capital, its division into constant and variable capital. Thus in the measure as the time required for the production of the commodity increases and the labour process continues uniformly, a continuous absorption of labour and of surplus labour takes place. This happens for example with cattle or buildings if the latter require more than a year s work. The product can enter the sphere of circulation, that is, it can be sold, be thrown on the market, only when the work is completed. The surplus labour expended in the first year is embodied with the rest of the labour in the unfinished product of the first year. It is neither greater nor smaller than in other branches of production where constant and variable capital are used in the same proportions. But the value of the product cannot be realised, that is, in the sense that it cannot be converted into money, and neither can the surplus-value. The latter cannot therefore be accumulated as capital nor used for consumption. The capital advanced, and also the surplus-value, serve, so to speak, as foundations for further production. They are a precondition for it and enter, to some extent, as semi-finished products, or, in one way or another, as raw material into the production process of the second year. Let us assume that the capital is 500, labour 100 and surplus-value 50, so that the capital advanced in production amounts to 550 plus 500 which is advanced in the second year. The surplus-value is again 50. The value of the product is therefore 1,100, of which 100 is surplus-value. In this case, the surplus-value is the same as if the capital had been reproduced in the first year and 500 had been invested again in the second year. In each year the variable capital employed is 100 and the surplus-value 50. But the rate of profit is different. In the first year it is 50/500, or 10 per cent. But in the second year the capital outlay amounts to 550 plus 500, that is, 1,050, and a tenth of this is 105. If one adds the same rate of profit, then the value of the product comes to: 550 in the first year; 550+ 500+ 55 + 50= 1,155 in the second year. At the end of the second year, the value of the product is 1,155. Otherwise it would have been only 1,100. In this case, the profit is greater than the surplus-value produced, for this only amounts to 100. If one includes the consumption costs which the capitalist has to advance over two years, then the capital laid out is even greater in proportion to the surplus-value. On the other hand, it is true that the entire surplus-value gained in the first year has been converted into capital in the second. Furthermore, the capital laid out in wages is greater, because the 100 is not reproduced at the end of the first year, so that in the second year 200 must be advanced for the same labour for which 100 would have been sufficient if it had been reproduced in the first year. Secondly. After the labour process has been completed, the product must continue to remain in the production sphere in order to undergo natural processes which require either no labour or relatively quite insignificant amounts of it, like wine in the cellar. Only when this period has elapsed can the capital be reproduced. It is obvious that in this case quite irrespective of what the ratio of variable to constant capital may have been, the effect is the same as if more constant and less variable capital had been laid out. The surplus labour, as well as the total amount of labour employed during a de finite period of time, is smaller. If the rate of profit is the same, this is due to equalisation, not to the amount of surplus-value produced in this sphere. More capital must be advanced beforehand to maintain the reproduction process the continuity of production. And for this very reason the surplus-value declines in proportion to the capital advanced. Thirdly. Interruptions in the labour process while the product is in the production process, as in agriculture or in processes such as tanning, etc., where chemical processes involve intervals before the product can proceed from one stage to the next, higher one. If in such cases, the interval is reduced by chemical discoveries, the productivity of labour rises, the surplus-value is increased and materialised labour has to be advanced for a shorter period of time. In all these cases, the surplus-value is smaller and the capital outlay larger. 2) The same thing happens if the rate of turnover of the circulating capital is lower than the average because of distant markets, In this case, too, the capital outlay is greater, the surplus-value smaller and its proportion to the capital advanced is also smaller.} <In the latter case [the capital] is retained longer in the circulation sphere, in the former case, in the production sphere.> ||1118| {Let us assume that the capital advanced in some branch or other of the transport industry is 1,000 fixed capital 500, which will be worn out in five years. The variable capital, which amounts to 500, turns over four times during the year. The annual value of the product will thus be 100 + 2,000 + 100, if the [annual] rate of surplus-value is 20 per cent, a total of 2,200. On the other hand, let us assume that in a branch of tailoring the constant capital, which consists only of circulating capital since fixed capital is assumed to be zero, amounts to 500 and the variable capital to 500, surplus-value is 100. [The capital] turns over four times a year. Then the (annual) value of the product will be 4(500+500)+100, that is, 4,100. The surplus-value is the same in both cases. In the last-mentioned case, the entire capital turns over four times a year or once a quarter. Of the other capital 600 turn over in the course of a year [of which 500 turn over four times], therefore 500 + 100/4 = 525 in a quarter of a year. That is, 175 in a month, 350 in two months, and 1,400 in eight months. The whole capital requires 5 5/7 months in order to turn over. It turns over only 21/10 times a year. Now it will be said that in order to make a profit of 10 per cent, less is added per quarter on a value of 1,000 in the case of the first capital than in that of the other. But here it is not a question of addition. One makes more surplus-value on the capital used up but not on the capital employed. The difference here arises from the surplus-value, not from the addition of profit. The difference here lies in the value not in the surplus-value. In both cases the variable capital amounting to 500 turns over four times in a year. Both capitals yield a surplus-value of 100 in a year, the [annual] rate of surplus-value amounts to 20 per cent. But 25 in a quarter, therefore a higher percentage? 25 on 500 each quarter is 5 per cent a quarter, that is, 20 per cent per annum. The first [capitalist] turns over half his capital 4 times a year and only a fifth of the remaining half once during the year. A half of four times is twice. Thus he turns his capital over 2 1/10 times during the year. The entire capital of the second capitalist turns over four times a year. But this makes absolutely no difference to the surplus-value. If the second capitalist continues the reproduction process uninterruptedly, then he must constantly convert 500 into raw materials, etc., and must always use 500 for labour, while the other capitalist likewise uses 500 for labour and has invested the remaining 500 once and for all (that is, for five years) in such a form that he does not need to reconvert it again. This applies however only when the ratio of variable to constant capital is the same [in both capitals] despite the difference between fixed and circulating capital. If in both cases, one half consists of constant and the other half of variable capital, then it is only possible for one half [in one case] to consist of fixed capital if the circulating constant capital amounts to zero, and [in the other case], one half can consist of circulating constant capital only if the fixed capital amounts to zero. Although the circulating constant capital can amount to zero, as in the extractive and transport industries where, however, the auxiliary materials rather than the raw materials constitute the circulating constant capital, the fixed capital can never be zero (except in banking, etc.). This is however immaterial so long as the ratio of constant capital to variable capital is the same in both cases, even though in one case there may be more fixed and less circulating constant capital than in the other, or vice versa. The only difference here is the time of reproduction required by one half of the capital and by the total capital. One capitalist must invest a capital of 500 for five years before it is returned to him, the other, for a quarter of a year or a whole year. The ability to dispose of the capital is different. The amount advanced is the same but the time for which it is advanced is different. This difference does not concern us here. When one considers the total capital outlay, surplus-value and profit are the same 100 in the first year on the 1,000 advanced. In the second year, it is rather the fixed capital that has a higher rate of profit, since the variable capital has remained the same, whereas the value of the fixed capital has declined. The capitalist only advances 400 fixed and 500 variable capital in the second year and receives a profit of 100 as he did before. But 100 on 900 amounts to 11 1/9 per cent, while the other capitalist, if he continues to reproduce his capital, advances 1,000 as he did previously and makes a profit of 100, that is, 10 per cent. The position is different, of course, if, along with the fixed capital, the constant capital as a whole increases as compared with the variable, or if altogether more capital must be advanced in order to set the same amount of labour in motion. In the case discussed above, the question is not how often the total capital is returned or how large the advance is, but how often that portion is returned which is sufficient to set the same amount of productive labour in motion as that used in the other instance, in order to renew the process of production. However, if in the case cited above, the fixed capital were [not 500 but ] 1,000 and the circulating capital only 500 [as previously], then matters would be different. This, however, would not be due to the fact that it is fixed capital. For if the circulating part of the constant capital in the second case were to amount to 1,000 instead of 500 (because of the dearness of raw materials, for example), then the result would be the same. Because in the first examples [of the two cases] the larger the fixed capital, the greater the relative size of the capital outlay as a whole to the variable capital, these two factors are often confused. Moreover, the whole business of the turnover was in fact originally derived from merchant capital, where it is determined by different laws. In the case of merchant capital, as I have demonstrated, the rate of profit is indeed determined by the average number of turnovers, regardless of the composition of this type of capital which, incidentally, consists mainly of circulating capital. For in the case of merchant capital, profit is determined by the general rate of profit.} ||1119| <(The point is this. If the fixed capital equals x, and it turns over only once every 15 years, then 1/15 of it is turned over in a single year, but likewise only 1/15 needs to be replaced each year. It would make no difference at all if it were replaced 15 times in a year. Its mass would still be the same as before. The product would only become dearer as a result. But it is more difficult to dispose of it and the risk of depreciation is greater than if the same amount of capital were advanced in the form of circulating capital. But this does not affect the surplus [-value] in any way, although it does enter into the capitalists calculation of the rate of profit since this risk is included in the calculation of the depreciation. As far as the other part of capital is concerned, let us assume that the circulating part of constant capital raw materials and auxiliary materials amounts to 25,000 a year and wages to 5,000. If it were returned only once during the year 30,000 would have to be advanced during the whole year, and if the surplus-value were at the rate of 100 per cent it would amount to 5,000, and profit at the end of the year would be 5,000 on 30,000, or 16 2/3 per cent. If, on the other hand, [the capital turns over] five times during the year, then a capital outlay of only 5,000 for constant circulating capital and 1,000 for wages will be sufficient. Profit will be l ,000, and for five-fifths of a year 5,000. But this surplus-value is made on a capital of 6,000, because more than this amount is never advanced. Profit would therefore be 5,000 on 6,000, or 5/6, five times as much [as previously], that is, 83 1/3 per cent. (Disregarding fixed capital.) There is thus a very considerable difference in the rate of profit because, in fact, labour worth 5,000 is bought with a capital of 1,000 and raw materials, etc., worth 25,000 with a capital of 5,000. If the amounts of capital were equal in these cases of different rates of turnover, then only 6,000 need have been advanced in the first case, that is only 500 a month, five-sixths of which would have consisted of constant capital and one-sixth of variable capital. This sixth would amount to 83 1/3, on which surplus-value at 100 per cent would be 83 1/3, and this would amount in a year to (83+1/3)12 = 12/3(or 4)+996= 1,000. But 1,000 on 6,000=16 2/3 per cent.> To return to Cherbuliez. [The following is] Sismondian: On the other hand: ||1120| Whatever advantages a rapid growth in social wealth may bring to the wage-workers, it does not cure the causes of their poverty They continue to be deprived of all rights to capital and are consequently obliged to sell their labour and to renounce all claims to the products of their labour (loc. cit., p. 68). This is the principal error of the law of appropriation The evil lies in this absolute lack of any bond between the wage-worker and the capital which is set in motion by his industry (p. 69). This last phrase about bond is written in the typical Sismondian manner and is quite silly to boot. About the normal man [who is] equated with capitalist, etc., see op. cit., pp. 74 to 76. About the concentration of capitals and the elimination of the smaller capitalists (l.c., pp. 85-88). [On the other hand] Cherbuliez shares: 1). [James] Mill s view that all taxes should be imposed only on rent (p. 128), but since it is impossible to impose a tax which is levied only on rent and affects nothing but rent , since it is difficult to separate profit from rent and impossible when the landowner is himself the cultivator, Cherbuliez proceeds to 2). the real conclusion of the Ricardian theory: But how does this Ricardian conclusion agree with the pious Sismondian wish to place bonds on capital and capitalist production? How does it agree with the lamentation: * ||1105| < If tomorrow the price of cotton were to drop by 90 per cent, the spinning industry would develop even more rapidly the day after tomorrow.> |1105|| [a] See this volume, p. 337. Ed. * ||1110| On page 59, Cherbuliez calls raw materials and machinery, etc., the two passive elements of capital in contrast to the means of subsistence. |1110|| [b] In this phrase Marx summarises (in German) a lengthy paragraph from Riche ou pauvre and then quotes from the book. Ed. [c] Potentially. Ed. [d] The manuscript has 1). the greater productivity . Ed. [e] The manuscript has 2). the . Ed.

Economic Manuscripts: Theories of Surplus-Value, Chapter 23

https://www.marxists.org/archive/marx/works/1863/theories-surplus-value/ch23.htm

Even this first work on rent is distinguished by what has been lacking in all English economists since Sir James Steuart, namely, a sense of the historical differences in modes of production. (Such a correct distinction of historical forms generally speaking is not contradicted by the very important archaeological, philological and historical blunders attributed to Jones. See, for example, The Edinburgh Review, Vol. LIV, Article IV. He found that the modern economists after Ricardo define rent as surplus profit, a definition which presupposes that the farmer is a capitalist (or a farming capitalist who exploits the land), who expects average profit on the capital which he invests in this particular sphere, and that agriculture itself has been subordinated to the capitalist mode of production. In short, landed property is conceived only in its modern bourgeois form, that is, in the modified form which it has been given by capital, the dominant relation of production in society. Jones by no means shares the illusion that capital has been in existence since the beginning of the world. His views on the origin of rent in general are summarised in the following passages: Jones traces rent throughout all its changes, from its crudest form, performance of labour services, to modern farmer s rent. He finds that everywhere a specific form of rent, i.e., of landed property, corresponds to a definite form of labour and of the conditions of labour. Thus, labour rents or serf rents, the change from labour rent to produce rent, metayer rents, ryot rents, etc., are examined in turn, a development the details of which do not concern us here. In all previous forms, it is the landed proprietor, not the capitalist, who directly appropriates the surplus labour of other people. Rent (as the Physiocrats conceive it by reminiscence [of feudal conditions]) appears historically (and still on the largest scale among the Asiatic peoples) as the general form of surplus labour, of labour performed without payment in return. The appropriation of this surplus labour is here not mediated by exchange, as is the case in capitalist society, but its basis is the forcible domination of one section of society over the other. (There is, accordingly, direct slavery, serfdom or political dependence.) Since we are only considering landed property here insofar as an understanding of it contributes to an understanding of capital, we shall leave Jones s analysis and proceed directly to his result which distinguishes him from, and shows his superiority over, all his predecessors. But first a few incidental remarks. In discussing forced labour and the forms of serfdom (or slavery) which correspond to it more or less ||1122| , Jones unconsciously emphasises the two forms to which all surplus-value (surplus labour) can be reduced. It is characteristic that, in general, real forced labour displays in the most brutal form, most clearly the essential features of wage-labour. Under these conditions <where there is serf labour> rent can only be increased either by the more skilful and effective utilisation of the labour of the tenantry <relative surplus labour>, this however is hampered by the inability of the proprietors to advance the science of agriculture, or by an increase in the total quantity of the labour exacted, and in this case, while the lands of the proprietors will be better tilled, those of the serfs, from which labour has been withdrawn, all the Worse.[a] (Op. cit., Chapter II.) What distinguishes this book on rent by Jones from his Syllabus to be mentioned in section 2 is this: in the first work he proceeds from the various forms of landed property as a given fact; in the second, from the Various forms of labour to which they correspond. Jones also shows how different stages in the development of the productive power of social labour correspond to these different production relations. Serf-labour (just as slave-labour) has this in common with wage-labour, in respect of rent, that the latter is paid in labour not in products, still less in money. As far as metayer rent is concerned the advance of stock by the proprietor, and the abandonment of the management of cultivation to the actual laborers, indicate[b] the continued absence of an intermediate class of capitalists (op. cit., p. 74). We now come finally to the point which is of decisive interest to us here farmers rents. It is here that Jones s superiority is most striking, for he shows that what Ricardo and others regard as the eternal form of landed property, is its bourgeois form, which, after all, only develops, firstly, when landed property has ceased to be the dominant relation in production and, consequently, in society; secondly, when agriculture itself is carried on in a capitalist way, which presupposes the development of large-scale industry (at least of manufacture) in the towns. Jones shows that rent in the Ricardian sense only exists in a ||1123| society the basis of which is the capitalist mode of production. As a consequence of the transformation of rent into surplus profit, the direct influence of landed property on wages ceases, which, in other words, merely means that the landed proprietor ceases to be the direct appropriator of surplus labour, this role being now assumed by the capitalist. The relative size of the rent affects only the division of surplus-value between capitalist and proprietor, not the exaction of that surplus labour itself. This conclusion in fact emerges from Jones s analysis, though it is not explicitly stated. Jones marks a substantial advance on Ricardo, in his historical explanation as well as in the economic details. We shall follow his theory step by step. Blunders, of course, occur. In the following passages, Jones correctly explains the historical and economic conditions under which rent is equivalent to surplus profit, that is the expression of modern landed property. The capitalist mode of production begins with manufacture and only later subjugates agriculture. <And only with this power can there be any question of equalisation of agricultural and industrial profit.> As we shall see later, Jones does not really explain how surplus profit arises, or rather, he explains it only in Ricardian fashion, i.e., by the difference in the degrees of natural fertility of different soils. We shall see what is involved by these different causes. First of all they all presuppose that rent consists of surplus profit; and then there is not the slightest doubt that the first cause to which Ricardo alludes only once and then only incidentally, is correct. When the capital employed in agriculture increases, the amount of rent increases as well, even though the price of corn, etc., does not rise and no other change whatever takes place. It is clear that, in this case, the price of land rises, although corn prices do not and no change whatever takes place in them. Jones declares rent on the worst soil to be monopoly price. He therefore restricts the real source of rent either to monopoly price (in the same way as Buchanan, Sismondi, Hopkins, and others) if it is absolute rent (not arising from differences in the fertility of the different kinds of soil) or to differential rent (in the Ricardian sense). <As regards absolute rent, let us take a gold mine. We assume that the capital employed is 100, the average profit 10, rent 10, and that half the capital consists of constant capital (in this case, machinery and auxiliary materials) and half of variable capital. The 50 of constant capital means nothing more than that it contains the same amount of labour-time as ||1124| is embodied in 50 worth of gold. That part of the product which is worth 50 therefore replaces this constant capital. If the rest of the product is worth 70 and if 50 workers are set to work with the 50 of variable capital (assuming a working-day of 12 hours), then the labour of these 50 workers must be expressed in 70 worth of gold, of which 50 goes to pay wages and 20 represents unpaid labour. The value of the products of all capitals of the same composition will then be 120; the product will then consist of 50c and 70, [the 70] corresponding to 50 working-days, that is, 50v plus 20s. A capital of 100, utilising more constant capital and a smaller number of workers, would produce a product of less value. However, all ordinary industrial capitals, although the value of their products would, in these circumstances, amount to 120, would only sell them at their production price of 110. But in the case of the gold mine, this is impossible quite apart from the ownership of land, because in this case the value is expressed in the product in kind. A rent of 10 would therefore of necessity arise.> <This applies to absolute rent as well as to differential rent.> It is one of Jones s merits, that he is the first who clearly brings out the fact that once rent has come into being, its growth will on the whole <provided no revolution in the mode of production takes place> result from the increase of agricultural capital, that is, of capital employed on land. This may be the case not only if prices remain the same but even when they fall below their former level. ||1125| In opposition to the view that productivity [in agriculture] gradually diminishes, Jones remarks: Rent will double, triple and quadruple, and so on, if the capital invested in the old band is doubled, tripled, quadrupled,[k] without a diminished return, and without altering the relative fertility of the soils cultivated p. 204). This is therefore the first point on which Jones is in advance of Ricardo. Once rent exists, it may increase as a result of the mere increase in the amount of capital employed on the land, irrespective of any change either in the relative fertility of the soils, or in the returns yielded by the successive doses of capital employed, or any alteration whatever in the price of agricultural produce. Jones s next point is this: <Here Jones overlooks the fact that conversely, an increasing disparity, even when the whole agricultural capital is more productively employed, must and will increase the amount of the differential rent. On the other hand, a diminution in the differences of the fertility of the various soils must diminish differential rent, i.e., rent arising from those differences. By taking away the cause you take away the effect. Nevertheless, rent (apart from absolute rent) may increase, but in that case only in consequence of an in crease of the agricultural capital employed.> (This means nothing more than that the employment of additional capital adds to the differences of relative fertility, and, in that way, to differential rent.) This law works out simply as follows: The difference between the terms is doubled in 2 and quadrupled in 3. The sum of the differences is likewise doubled in 2 and quadrupled in 3. This therefore is the second law. The first law (applied by Jones only to differential rent) is that the amount of rent increases with the increase of the amount of capital employed. If rent is 5 for 100, then it is 10 for 200. ||1126| The second law. All other circumstances remaining the same, and the proportional difference between the capitals employed on different soils remaining the same, the amount of that difference, and hence the amount of the aggregate rent or the sum of those differences increases, as the absolute quantity of that difference resulting from the increase of the capitals employed increases. Hence the second law is: the amount of differential rent increases in proportion as the differences of the products increase when the relative fertility remains the same, but capital employed on the different soils is increased uniformly. Further: If 100 be employed on classes A, B and C, with a produce of 110, 115, 120, and subsequently 200, with returns of 220, 228 and 235, the relative differences of the products will have diminished, and the soils will have approximated in fertility; still the difference of the amounts of their products will be increased from 5 and 10 to 8 and 15, and rents will have risen accordingly. Improvements, therefore, which tend to approximate the degrees of fertility of the cultivated soils, may very well raise rents, and that without the co-operation of any other cause (loc. cit., p.208). With regard to Ricardo s view that improvements may cause rents to fall , it is only necessary to remember the slowly progressive manner in which agricultural improvements are practically discovered, completed, and spread (p. 211). <This last passage is only of practical interest and does not affect the problem as such, but refers only to the fact that improvements do not proceed so rapidly as to considerably augment supply in regard to demand and thus to reduce market prices.> Originally we have: The capital employed in each class amounts to 100; the product to 110, 115, 120. The difference amounts to 5+10=15. As a result of improvements made, twice as much capital is employed, that is, 200 instead of 100 in each of the classes a, b and c. But the capital has a different effect in the different classes and the products yielded are 220 (that is, double that of a), 228 and 235. Thus: 200 capital is employed in each class. The products amount to 220, 228 and 235. The difference amounts to 8+ 15=23. But the rate of difference has been reduced. 5:10 (i.e., [the ratio of the differences] b-a [to a] in the first case)=1/2 and 10:10=1, whereas 8:20 is only 8/20 or 2/5 and 15:20= 15/20 or 3/4. The rate of difference has declined but its amount has increased. This does not, however, constitute a new law, but only shows that the increase of capital employed leads to an increase in rent as in the first law, although the increase in a, b and c is not proportional to their original differences of fertility. If prices were to fall as a consequence of this increased fertility (which is however [relatively] diminished fertility for b and c, for otherwise their product would have to be 230 and 240 respectively), it would by no means be necessary for the rent to rise or even to remain stationary. ||1127| As a consequence, a sequel, of the second law, a further application of it can be considered: The third law if improvements in the efficiency of the capital employed in cultivation increase the surplus profits realised on particular spots of land, they increase rent. The following passages (together with the earlier ones) refer to this. <This, however, can only refer to improvements which relate directly to the fertility of the soil as, for instance, manures, rotation of crops, etc.> <Jones very correctly declares that a fall in profits does not prove decreasing efficiency of agricultural industry. But he himself explains most inadequately how such a fall can come about. [According to him] either the amount produced or its division between labourers and capitalists may change. Jones has as yet not the faintest notion of the real law of declining rate of profit. This is the reason for the incorrect law which he elaborates: Jones correctly grasps that a relative increase [in the value] of agricultural produce as compared to [that of] industrial produce may take place in the progress of society although in point of fact, agriculture is progressing absolutely. But this does not explain the positive rise in the money prices of raw produce, unless a fall in the value of gold takes place which in manufacture is balanced and more than balanced by a still greater fall in the [value of] commodities produced, while in agriculture it is not balanced in this way. This may happen, even ||1128| if no general fall in the value of gold (money) takes place, but when a particular nation, for instance, buys more money with a day s work than the competing nations do. Jones explains his reasons for not believing that in England the Ricardian law operates, the abstract possibility of which he does admit however. (This last statement is not quite correct. It is possible that a greater portion of indirect labour is employed i.e., more commodities provided by industry and commerce enter the agricultural process, without increasing the gross product proportionally, and without the employment of more immediate labour. There may be even less employed.) (This last development, just as the decline in the rate of profit, is due to the increase in that part of the product which replaces constant capital. At the same time, rent can increase in both amount and value.) Jones calls constant capital auxiliary capital . The first important point in this passage is that, with the increase in capital, the auxiliary capital increases in comparison to the variable capital, in other words, that the latter declines relatively in comparison with the constant capital. The fact that the annual returns decline in proportion to the capital advanced if there is an increase in that part of the auxiliary capital which consists of fixed capital, that is, if its turnover period extends over several years its value only entering into the product annually in the form of depreciation is not a phenomenon peculiar to agriculture, but a general one. Although, in industry, the raw material worked up during the year increases even more rapidly than the size of the fixed capital. Compare, for example, the amount of raw cotton which a spinning-jenny consumes weekly or annually with that used up by a spinning-wheel. But suppose, for example, that in (large-scale) tailoring the same amount of raw material in terms of value is worked up (although not the same physical amount, the raw material being dearer than that used in spinning), then the annual return in tailoring will be considerably larger than in spinning, because a greater part of the (fixed) capital laid out in the latter only enters into the product as annual depreciation. The value of the annual return in agriculture (where what one can regard as the raw material, the seed, does not increase in the same proportion as the other elements of constant capital, especially fixed capital) is naturally smaller if the capital increases as a result of an increase in the constant capital only and not in the variable. For the variable capital must be entirely replaced in the product, the other [constant capital] only insofar as it is consumed annually. If it is assumed that the price of grain is given, when a quarter is equal to l0s., 220 quarters are required to replace a capital of 100 at a profit of 10 per cent, whereas only 60 quarters ( 30) are required to replace a wear and tear amounting to 20 and a profit of 10. A smaller absolute return yields the same profit (as is the case in industry in similar circumstances). Jones s reasoning, however, contains several fallacies. First of all, it cannot be asserted (on the assumptions made) that the productive powers of the soil have increased. They have increased in comparison with the labour employed directly, but not compared with the total capital employed. All that can be said is that less gross produce is necessary in order to yield the same net produce, i.e., the same profit as before. ||1130| Further, the increase in the farmer s revenue in comparison to that of the labourers, is important in this special sphere insofar as here the part of the total product which constitutes profit increases, and goes on increasing, relatively to that part which goes to the labourers. As a result, the wealth and influence of the farming capitalist as compared to his labourers undoubtedly grow and expand. But Jones seems to make the following calculation: 10 on 100 is 1/10. 20 on 120 (i.e., 100 expended in labour and 20 depreciation) is 1/6 and the 20 is 1/5 of the sum paid out to the workers, etc. But nothing is more fallacious than that, generally speaking, the rate of profit can increase while the amount of capital laid out on labour declines. Exactly the opposite takes place. Proportionally less surplus-value is produced, and the rate of profit therefore falls. As regards the farmer specifically (and also each particular enterprise taken in isolation) the rate of profit may remain the same whether he employs three workers or six workers with a capital of 200. The fact that rent is equal to surplus profit, i.e., to the excess over and above the average profit, presupposes not only that agriculture is formally subordinated to capitalist production, but also that equalisation of rates of profit takes place in the various spheres of production, specifically also between agriculture and industry. If this is not the case rent (like profit) may be equal to the surplus over wages. It may even represent a part of profit or be a deduction from wages. Richard Jones, An Introductory Lecture on Political Economy, delivered at King s College, London, 27th February, 1833. To which is added a Syllabus of a Course of Lectures on the Wages of Labor, London, 1833. [In the Introductory Lecture, Jones says: ] ||1130| By labour fund Jones understands: The main point (the term labor fund probably comes from Malthus?) in Jones s work is that the whole economic structure of society revolves around the form of labour, in other words, the form in which the worker appropriates his means of subsistence, or that part of his product upon which he lives. This labour fund has various forms and capital is merely one of them, it is a form which arises rather late in the historical development. It is only in Richard Jones s work that the important differentiation between labour that is paid out of capital and labour paid directly out of revenue made by Adam Smith receives the full elaboration of which it is capable and becomes a major key for understanding the various economic formations of society. And with it disappears the absurd notion that, because in capital the worker s revenue first takes the form of something appropriated, alias saved, by the capitalist, this signifies more than a formal difference. Capital, that is, accumulated wealth employed for the purpose of obtaining profit is the great agent, the motive power which causes the changes that take place in this economic conformation.[v] The Syllabus of a Course of Lectures on the Wages of Labor differs from the book on rent in this: the book examines the different forms of landed property to which different social forms of labour correspond. In the Syllabus, these different forms of labour are the point of departure and both the different forms of landed property and capital are regarded as their offspring. The determinate social form of the worker s labour corresponds to the form which the conditions of labour that is, in particular, the land, nature, since this relationship embraces all others assume in respect of the worker. But the former is in fact merely the objective expression of the latter. We shall see, therefore, that the different forms of the labour fund correspond to the different ways in which the worker confronts his own conditions of production. The manner in which he appropriates his product (or part of it) depends on his relations to his conditions of production. The Labor Fund, says Jones, may be divided into three classes. To point 1. the wages of laboring cultivators, or occupying peasants Laboring[z] cultivators, or peasants, may be divided into three groups[aa] hereditary occupiers, proprietors, tenants. The tenants may be subdivided into[bb] serfs, me layers, cottiers; the last peculiar to Ireland. Something which may be called rent, or something which may be called profit, is often[cc] mixed up with the revenues of peasant cultivators of all classes; but when their subsistence is essentially dependent on the reward of their manual labor , they come within the limits of our present inquiry [dd] (p. 46). ) Hereditary occupiers, who are laboring cultivators; ||1132| ancient Greece, modern Asia, more especially India (p. 46). ) [peasant] proprietors France, Germany, America, Australia state of Ancient Palestine . ) cottiers (pp. 46-48). The characteristic feature of these groups is that the worker reproduces the labour fund for himself. It is not transformed into capital. Just as the worker directly produces the labour fund, so he appropriates it directly, although his surplus labour may be appropriated either wholly or in part by him himself or may be appropriated entirely by other classes, depending on the particular form which his relation to his conditions of production assumes. It is entirely due to economic prejudice that Jones describes this category as wage-labourers. Nothing which characterises wage-labourers exists amongst them. It is a pretty bourgeois economic fancy that, because that part of the product which the worker appropriates to himself under capitalism appears as wages, the part of his product which the worker himself consumes must be wages. With regard to point 2. The laborers so maintained are now limited in England to[ee] menial servants, soldiers sailors, and a few artizans working on their own account, and paid out of the incomes of their employers. Over a considerable portion of the earth this branch of the General Labor Fund maintains nearly the whole of the non-agricultural laborers Former prevalence of this Fund in England. Warwick the king-maker. The English gentry. Present prevalence in the East. Mechanics, menials. Large bodies of troops so maintained. Consequences of the concentration of this Fund throughout Asia in the hands of the sovereign. Sudden rise of cities; sudden desertion. Samarcand; Candahar, and others (pp. 48-49). Jones overlooks two main forms: the Asiatic communal system with its unity of agriculture and industry. And secondly, the urban craft guild system of the Middle Ages, [which] also [existed] partially in the Ancient World. With regard to point 3. Capital should never be confounded with the General Labor Fund of the world of which a large proportion consists of revenues All branches of a nation s revenues contribute to the accumulations by which capital is formed. They contribute in different proportions in different countries and different stages of society. When wages and rents contribute the most (p. 50). Because surplus labour is converted into capital (instead of being exchanged directly as revenue for labour), capital seems to appear as something saved out of revenue. Jones considers it mainly from this point of view. And in the progress of society the great mass of capital does, in fact, consist of revenue reconverted in this way. But in the capitalist mode of production the original labour fund itself likewise appears as something saved by the capitalist. The reproduced labour fund does not remain in the possession of the worker as in case 1), but appears as the property of the capitalist and confronts the worker as the property of someone else. And this point is not elaborated by Jones. What Jones has to say about the rate of profits and its influence on accumulation in the Course [of Lectures] is rather inadequate: <What Jones does not understand is how, as a result of the may increase, the rate of profits sinks because the quantities of capital employed relatively to the numbers of the population have increased . But he approaches close to the correct view.> Where the rate of profit is high (apart from cases where, as in North America, there is capitalist production on the one hand and, on the other hand, the value of all agricultural produce is low) it is generally due to the fact that capital consists mainly of variable capital, that is, direct labour predominates. Assume a capital of 100, of which 1/5 is variable capital. And assume further that the surplus labour amounts to a third of a working-day. In this case, profit would amount to 10 per cent. Assume [on the other hand] that 4/5 of the capital consists of variable capital and that surplus labour amounts to 1/6 of the working-day. In this case, profit would amount to 16 per cent. [Jones speaks of] ||1157| Richard Jones sums up correctly in the following passage: |1157|| ||1157| The total amount of capital may remain the same and a change (decline especially) may take place in the variable capital. A change in the proportion between the two constituent parts of capital does not necessarily involve a change in the size of the total [capital]. An increase in the total capital, on the other hand, may be accompanied not only by a relative, but by an absolute diminution of variable capital and is always connected with violent fluctuations in the variable capital and consequently with fluctuations in the amount of employment . |1157|| [Later on in the Syllabus, Jones writes: ] ||1133| Periods of gradual transition of the laborers from dependence on one fund to dependence on another Transfer of the laboring cultivators to the pay of capitalists Transfer of non-agricultural classes to the employ of capitalists (pp. 52-53). What Jones calls transfer here, is what I call primitive accumulation . This is merely a formal difference. It is also in contradiction to the absurd notion of savings . Slavery: Slaves may be divided into pastoral predial domestic slaves of a mixed character, between predial and domestic We find them[ff] as cultivating peasants; as menials or artisans, maintained from the incomes of the rich; as laborers maintained from capital (p. 59). But so long as slavery is predominant, the capital relationship can only be sporadic and subordinate, never dominant. [Jones writes in the Text-book of Lectures on the Political Economy of Nations:] This is, therefore, according to Jones, the difference between a tool and machinery. The former provides the worker with means for employing the power he possesses to a greater mechanical advantage, the latter provides an increase of motive force. (?) Profit is therefore by no means the only source from which capital is formed or augmented: it is even an unimportant source of accumulation, compared with wages and rents, in the earlier stages of society[hh] (p. 20). According to this, capital is a part of the wealth which constitutes revenue, the part which is expended not as revenue but for the purpose of producing profit. Profit is already a form of surplus-value which specifically presupposes capital. If the capitalist mode of production, i.e., capital, is postulated, then the explanation is correct; in other words, if one postulates what has to be explained. But here Jones means all revenue spent, not as revenue, but with the aim of enrichment, that is, productively. Two aspects are, however, important in this context. First: To a certain extent accumulation of wealth takes place in all stages of economic development, that is, partly an expansion of the scale of production and partly, the accumulation of treasure, etc. As long as wages and rents predominate that is, according to what was said earlier, as long as the greater part of the surplus labour and surplus product which does not accrue to the worker himself, goes to the landowner (the State in Asia) and, on the other hand, the worker reproduces his labour fund himself, i.e., he not only produces his own wages himself, but pays them to himself, usually, moreover, (almost always in that state of society) he is also able to appropriate at least a part of his surplus labour and his surplus product in this state of society, wages and rent are the main sources of accumulation as well. (In these circumstances profit is restricted to merchants, etc.) Only when the capitalist mode of production has become predominant, when it does not merely exist sporadically, but has subordinated to itself the mode of production of society; when in fact the capitalist directly appropriates the whole surplus labour and surplus product in the first instance, although he has to hand over portions of it to the landowner, etc. only then does profit become the principal source of capital, of accumulation, of wealth saved from revenue and used with a view to profit. This at the same time presupposes (as is implicit in the domination of the capitalist mode of production) that a considerable advance in the power of national industry has actually taken place . Jones thus answers those asses who imagine that no accumulation can take place without the profit yielded by capital or who justify profit by saying that the capitalist makes a sacrifice in order to save from his revenue for productive purposes, by pointing out that in this particular (capitalist) mode of production the function of accumulating devolves principally on the capitalist whereas, in previous modes of production, it was the labourer himself and, in part, the landlord who played the chief roles in this process and profit played hardly any part in it. Naturally the function [of accumulating] always devolves on those, 1) who pocket the surplus-value and, 2) among those who pocket the surplus-value in particular on the person who also acts as agent in the production process itself. By saying, therefore, ||1135| that profit is justified by the fact that the capitalist saves his capital out of profit and that he fulfils the function of accumulating, one merely says that the capitalist mode of production is justified because it exists this, however, applies equally to the modes of production which preceded it and those which will succeed it. If one says that otherwise accumulation would be impossible, then one forgets that this particular method of accumulation through the agency of the capitalist has come into existence at a certain historical stage and is moving towards the historical date when it will cease to exist. Secondly, once so much accumulated wealth has been concentrated in the hands of capitalists per fas et nefas[ii] that they can dominate production, then the greater part of existing capital after a certain lapse of time can be considered as having been derived only from profit (revenue), that is, from capitalised surplus-value. A point which Jones does not sufficiently emphasise, and which he really only implies tacitly, is this: If the labouring producer pays himself his own wages and if his product does not at first assume the shape of other people s revenue from which savings are made and then paid back by these people to the labourer, it is necessary that the labourer be in possession of his conditions of production (as property owner, or tenant, or hereditary occupier, etc.). In order that his wages and consequently the labour fund can confront him as alien capital, these conditions of production must have been lost to him and have assumed the shape of alien property. Only after his conditions of production together with his labour fund have been wrested from him and when, as capital, they are rendered independent in relation to him, does the further process begin, which is not concerned with the mere reproduction of these original conditions of production, but with their further development so that both the conditions of production and the labour fund confront the labourer as something saved from other people s revenue in order to be converted into capital. By losing possession of his conditions of production, and hence, of his labour fund, the labourer also loses the function of accumulating, and every addition he makes to wealth appears in the shape of other people s revenue which must first be saved by these people, that is to say, it must not be spent as revenue, if it is to perform the functions of capital and labour fund for the labourer. Since Jones himself describes a state of affairs in which things have not yet reached this stage and where unity prevails, he certainly should have described this separation as the real generation process of capital. Once this separation exists, this process does indeed take place and it continues and extends, since the surplus labour of the worker always confronts him as the revenue of others, through the saving of which alone wealth can be accumulated and the scale of production extended. The reconversion of revenue into capital. If capital (i.e., the separation of the conditions of production from the labourer) is the source of profit (i.e., of the fact that surplus labour appears as the revenue of capital and not of labour) then profit becomes the source of capital, of new capital formation, i.e., of the fact that the additional conditions of production confront the worker as capital, as a means for maintaining him as a worker and of appropriating his surplus labour anew. The original unity between the worker and the conditions of production <abstracting from slavery, where the labourer himself belongs to the objective conditions of production> has two main forms: the Asiatic communal system (primitive communism) and small-scale agriculture based on the family (and linked with domestic industry) in one form or another. Both are embryonic forms and both are equally unfitted to develop labour as social labour and the productive power of social labour. Hence the necessity for the separation, for the rupture, for the antithesis of labour and property (by which property in the conditions of production is to be understood). The most extreme form of this rupture, and the one in which the productive forces of social labour are also most powerfully developed, is capital. The original unity can be reestablished only on the material foundation which capital creates and by means of the revolutions which, in the process of this creation, the working class and the whole society undergo. Another point which Jones does not sufficiently emphasise is this: Revenue which is exchanged as such against labour if it is not the revenue of a labourer who works himself and employs an additional workman is the revenue of the landowner, itself derived from the rent which the labourer pays him, and which the landlord does not entirely consume in kind, either by himself or together with his menials and retainers, but a part of which he uses to buy the products or services of additional workmen and so on. This always presupposes the first relationship. ||1136| <In the same way as part of the profit is classified as interest, even if the industrial capitalist employs only his own capital, because this form [of revenue] has a separate mode of existence, so, given the capitalist mode of production, even if the labourer who does not employ any other labourers owns his means of production, they are regarded as capital and the part of his own labour realised by him over and above the ordinary wage appears to be profit yielded by his capital. He himself is then divided up into different economic categories. As his own workman, he gets his wages, and as capitalist, he gets his profits. This observation belongs to the chapter Revenue and Its Sources .> What distinguishes Jones from the other economists (except perhaps Sismondi) is that he emphasises that the essential feature of capital is its socially determined form, and that he reduces the whole difference between the capitalist and other modes of production to this distinct form. It is that labour is directly converted into capital and that, on the other hand, this capital buys labour not for the sake of its use-value, but in order to increase its own value, to create surplus-value (i.e., a larger amount of exchange-value) and to use it with a view to profit . This shows, however, at the same time that the saving of revenue in order to convert it into capital and accumulation are distinguished from other methods only through the form in which wealth is devoted to the maintenance of labour. The agricultural labourers in England and Holland who receive wages which are advanced by capital produce their wages themselves just like the French peasant or the self-supporting Russian serf. If the production process is considered in its continuity, then the capitalist advances the labourer as wages today only a part of the product which the labourer produced yesterday. Thus the difference [between the capitalist and other modes of production] does not lie in the fact that, in one case, the labourer produces his own wages and in the other case he does not produce them. The difference lies in the fact that [in one case] his product appears as wages; that in this case, the worker s product (i.e., the part of the product produced by the worker which makes up the labour fund) 1) appears as the revenue of others; 2) that then, however, it is not expended as revenue, and not spent on labour by means of which revenue is directly consumed, but, 3) that it confronts the worker as capital which returns to him this portion of the product, in exchange not merely for an equivalent but for more labour than the product he receives contains. Thus his product appears in the first place as revenue of others, secondly, as something which is saved from revenue in order to be employed in the purchase of labour with a view to profit; in other words it is employed as capital. And this process in which his own product confronts him as capital, is what is described as the labour fund, which has gone through a previous process of saving , which has undergone a process of accumulation prior to being converted into the labourer s means of subsistence, exists in another shape (here it is expressly stated that merely a change of form takes place) than that of a stock for their (the labourers ) immediate consumption . The whole difference lies in the transformation which the labour fund produced by the worker undergoes before it comes back to him in the form of wages. In the case of peasants or independent artisans, it therefore never assumes the form of wages . ||1137| Saving and accumulation as far as the labour fund is concerned are mere names here for the transformations which the worker s product undergoes. The labourer working on his own account consumes his product just like the wage-labourer, or rather, the latter does so just like the former. But in the case of the wage-earner, his product appears to be something saved or accumulated from the revenue of someone else, i.e., from the revenue of the capitalist. In fact, however, it is this process that makes it possible for the capitalist to save or accumulate the labourer s surplus labour for his own purposes, and this is the reason why Jones places such great emphasis on the fact that, in non-capitalist modes of production, accumulation does not arise from profit, but from wages, in other words, from the income of the self-supporting cultivator or the artisan who exchanges his labour directly for revenue (otherwise how could the middle class have arisen out of the latter?) and from the rent of the landlord. But for the labour fund to undergo these transformations, the conditions of production must confront the labourer as capital, which is not the case in the other modes of production. The expansion of wealth does not appear to be due to the labourer in the latter case [the capitalist mode of production ], but to the saving of profit, the reconversion of surplus-value into capital, in the same way as the labour fund itself (before its expansion as a result of new accumulation) confronts the labourer as capital. Two cardinal facts about capitalist production: [First,] concentration of the means of production in a few hands so that they no longer appear as the immediate property of the individual labourer, but as factors of social production, even though in the first instance they appear as the property of the non-working capitalists, who are their trustees in bourgeois society and enjoy all the fruits of this trusteeship. Second: Organisation of labour itself as social labour brought about by co-operation, division of labour and the linking of labour with the results of social domination over natural forces. In both these ways, capitalist production eliminates private property and private labour, even though as yet in antagonistic forms. The main difference between productive and unproductive labour noted by Adam Smith, is that the former is exchanged directly for capital and the latter for revenue and the full meaning of this difference emerges first in Jones. His work shows that the first kind of labour is characteristic of the capitalist mode of production, and the second where it is predominant belongs to earlier modes of production, and, where it merely plays a subordinate role, is restricted (or ought to be restricted) to spheres which are not directly concerned with the production of wealth. (In the note on page 35, he says: ||1138| Capital, or accumulated stock, after performing various other functions in the production of wealth, only takes up late that of advancing to the labourer his wages (p. 79). In the last sentence on page 79, capital is indeed described as a relation , not merely as accumulated stock but as a quite definite relation of production. The stock cannot take up the function of advancing wages . Jones, moreover, emphasises that it is the basic form of capital the form which gives the whole process of social production its distinctive character, dominates it, leads to a quite new development of the productive forces of social labour, and revolutionises all social and political relationships that confronts wage-labour, and pays wages. He emphasises that before capital performs this function, which is of decisive importance, it fulfils other functions and, appears in other, subordinate and historically earlier forms, but that its power in all its functions only develops fully when it steps forth as industrial capital. On the other hand, in the third lecture On the gradual manner in which capital or capitalists <there s the rub in this or ; accumulated stock becomes capital only because of this personification> undertake successive functions in the production of wealth , Jones does not indicate what the previous functions are. They can indeed only be those of capital engaged in commerce or banking. But although Jones comes so close to the correct concept and even expresses it in a certain fashion, nevertheless, being an economist, he is so enmeshed in bourgeois fetishism that not even the devil could be certain that he does not mean that accumulated stock as such, can perform different functions. The sentence: is the most complete expression of the contradiction; on the one hand, it expresses a correct historical conception of capital, but, on the other hand, a shadow is cast over it by the narrow-minded notion of the economist that stock as such is capital. Hence the accumulated stock becomes a person who performs the function of advancing wages to men. Jones is still rooted in economic prejudice when he solves [the problem], a solution becomes necessary as soon as the capitalist mode of production is regarded as a determinate historical category and no longer as an eternal natural relation of production. One can see what a great leap forward there was from Ramsay to Jones. Ramsay regards precisely that function of capital which makes it capital the advancing of wages as accidental, due only to the poverty of the people, and irrelevant to the production process as such. In this narrow circumscribed manner, Ramsay denies the necessity for the capitalist mode of production. Jones, on the other hand, <strange that they were both priests of the Established Church. The ministers of the English Church seem to think more than their continental brethren> demonstrates that it is precisely this function that makes capital capital and gives rise to the most characteristic features of the capitalist mode of production. He shows how this form occurs only at a certain level of development of the productive forces and that it then creates an entirely new material basis. Consequently, however, his comprehension of the fact that this form can be superseded and of the merely transitory historical necessity for this form, is quite different from that of Ramsay and more profound. He by no means regards capitalist relations as eternal. ||1139| Here Jones states quite explicitly that capital and the capitalist mode of production are to be accepted merely as a transitional phase in the development of social production, a phase which, if one considers the development of the productive forces of social labour, constitutes a gigantic advance on all preceding forms, but which is by no means the end result; on the contrary, the necessity of its destruction is contained in the antagonism between owners of accumulated wealth and the actual labourers . Jones was a professor of political economy at Haileybury and the successor to Malthus. One can see here how the real science of political economy ends by regarding the bourgeois production relations as merely historical ones, leading to higher relations in which the antagonism on which they are based is resolved. By analysing them political economy breaks down the apparently mutually independent forms in which wealth appears. This analysis (even in Ricardo s works) goes so far that: 1) The independent, material form of wealth disappears and wealth is shown to be simply the activity of men. Everything which is not the result of human activity, of labour, is nature and, as such, is not social wealth. The phantom of the world of goods fades away and it is seen to be simply a continually disappearing and continually reproduced objectivisation of human labour. All solid material wealth is only transitory materialisation of social labour, crystallisation of the production process whose measure is time, the measure of a movement itself. 2) The manifold forms in which the various component parts of wealth are distributed amongst different sections of society lose their apparent independence. Interest is merely a part of profit, rent is merely surplus profit. Both are consequently merged in profit, which itself can be reduced to surplus-value, that is, to unpaid labour. The value of the commodity itself, however, can only be reduced to labour-time. The Ricardian school reaches the point where it rejects one of the forms of appropriation of this surplus-value landed property (rent) as useless, insofar as it is pocketed by private individuals. It rejects the idea that the landowner can play a part in capitalist production. The antithesis is thus reduced to that between capitalist and wage-labourer. This relationship, however, is regarded by the Ricardian school as given, as a natural law, on which the production process itself is based. The later economists go one step further and, like Jones, admit only the historical justification for this relationship. But from the moment that the bourgeois mode of production and the conditions of production and distribution which correspond to it are recognised as historical, the delusion of regarding them as natural laws of production vanishes and the prospect opens up of a new society, [a new] economic social formation, to which capitalism is only the transition. |1139|| ||1139| We still have to consider a number of things in Jones s work. 1) In what way, in particular, the capitalist mode of production the advancing of wages by capital alters the form and the productive forces. 2) His observations regarding accumulation and the rate of profit. But, first of all, another point has to be emphasised. This refers to the non-agricultural labourers, whose earnings previously came direct from the revenue of the landowners, etc. Whereas previously they exchanged their labour (or the product of their labour) directly for that revenue, the capitalist exchanges the product of their labour collected and concentrated in his hands for that revenue, in other words, revenue is transformed into, exchanged for capital, in that it constitutes the returns on capital. Instead of being direct returns for labour, it constitutes direct returns for the capital that employs the labourers. |1140|| ||1144| After describing capital as a specific relation of production, the essence of which is that accumulated wealth takes over the function of advancing wages, and the labour fund itself appears as wealth saved from revenue and used with a view to profit , Jones outlines the changes in the development of the productive forces characteristic of this mode of production. How the (economic) relations and consequently the social, moral and political state of nations changes with the change in the material powers of production, is very well explained. He describes the influence of the capitalist form of production on the development of the productive forces in the following way. But before coming to this, a few passages connected with those already quoted. Although the civil rights of the labourers do not affect their economical position , their economical position does affect their civil rights. Wage-labour on a national scale and consequently, the capitalist mode of production as well is only possible where the workers are personally free. It is based on the personal freedom of the workers. Jones quite correctly reduces Smith s productive and nonproductive labour to its essence capitalist and non-capitalist labour by correctly applying the distinction made by Smith between labourers paid by capital and those paid out of revenue. Jones himself, however, apparently understands by productive and unproductive labour, labour which enters into the production of material [wealth] and that which does not. This follows from the passage quoted, where he speaks of the productive labourers who depend on revenue expended to maintain them [p. 52]. Further: The distinction made between the labourers who live on capital and those who live on revenue is concerned with the form of labour. It expresses the whole difference between capitalist and non-capitalist modes of production. On the other hand, the terms productive and unproductive labourers in the narrow sense [are concerned with] labour which enters into the production of commodities (production here embraces all operations which the commodity has to undergo from the first producer to the consumer) no matter what kind of labour is applied, whether it is manual labour or not ([including] scientific labour), and labour which does not enter into, and whose aim and purpose is not, the production of commodities. This difference must be kept in mind and the fact that all other sorts of activity influence material production and vice versa in no way affects the necessity for making this distinction. ||1146| We now come to the development of the productive forces by the capitalist mode of production. [Jones writes:] [With regard to the passages quoted] Firstly. The transition from labourers who perform casual services making clothes, coats, trousers, etc., in the landowner s house to workers employed by capital, is already very well described by Turgot. Second. Although continuity certainly distinguishes capitalist labour from the form described by Jones, it does not distinguish capitalist labour from slave production carried on on a large scale. Third. It is incorrect to describe the increased amount of labour brought about by its long duration and continuity as an increase in productive power or the power of labour. This [occurs] only insofar as the continuity augments the personal skill of the labourers. By [increased] power, we understand the greater productivity of a given quantity of labour employed, not any change in the quantity employed. The latter belongs rather to the formal subordination of labour to capital and it only evolves fully with the development of fixed capital. (We shall deal with this soon.) Jones correctly emphasises the fact that the capitalist regards labour as his property, no part of which must be wasted. With regard to labour which is maintained directly by revenue, this is a matter of the use-value of labour only. ||1147| Furthermore, Jones correctly emphasises that the continuous labour of the non-agricultural labourers lasting from morning to night is by no means something which arises spontaneously, but is itself a product of economic development. In contrast to the Asiatic form and to the Western form of labour (prevailing in former times, partly even today) in the countryside, the urban labour of the Middle Ages already constitutes a great advance and serves as a preparatory school for the capitalist mode of production, as regards the continuity and steadiness of labour. <About this continuity of labour: In the same work: < [Jones says further:] See Dr. Bernier, who compares the Indian towns to army camps. This is due to the form of landed property which exists in Asia.> We now proceed from the continuity to the division of labour, [the development of] knowledge, use of machinery, etc. [Jones writes:] <He therefore means by this term the part of constant capital which is not made up of raw material.> ||1149| First, with regard to the statement that the inventions, or appliances or contrivances must be of such a kind, that the productive powers of labour may be increased; and increased to an extent which will make it,[mm] in addition to the wealth it before produced, reproduce the additional auxiliary capital used, as fast as it is destroyed , or reproduce the additional capital in the lime it wastes away . This means nothing more than that the wear and tear is replaced as it takes place, or, that on the average the additional capital is replaced in the same period during which it is consumed. A portion of the value of the product, or, what amounts to the same thing, a portion of the product, must replace the consumed auxiliary capital, and, at such a rate that if, in a given period of time, it is wholly consumed, it is reproduced wholly, or that a new capital of the same kind takes the place of the capital used up. But what is the condition for this? The productivity of labour must rise to such an extent through the application of the additional auxiliary capital that a part of the product can be deducted to replace this component part either in kind or by exchange. The reproduction of the auxiliary capital takes place if the productivity is so great, in other words, if the increased amount of output produced during the working-day of the same length is such that a unit of a particular commodity is cheaper than a unit produced by the former method, although the aggregate price of the total output covers (for example) the annual depreciation of the machinery, that is, the amount of depreciation calculated per unit of the commodity is insignificant. If the part which replaces the depreciation, and secondly the part which replaces the value of raw material, are deducted from the total product, then there remains a part which pays for the wages and a part which covers the profit and even yields more surplus-value although the price [per unit] remains the same as it was previously. An increase in the product could take place without fulfilling this condition. If, for example, the numbers of pounds of twist were to increase tenfold (instead of a hundredfold, etc.) and if the value of the wear and tear of the machinery which has to be added to the price were to drop from one-sixth to one-tenth, then the twist spun by machinery would be dearer than that produced by spindle. If an additional 100 of capital in the form of guano were used in agriculture and if this guano had to be replaced in a year, and if the value of a quarter (produced by the old method) were 2, then 50 additional quarters would have to be produced merely to replace the depreciation. And without this the guano could not be used (profit is here disregarded). Jones s remark that the additional capital must be reproduced (of course from the sale of the product or in kind), in the time it wastes away simply means that the commodity must replace the wear and tear embodied in it. In order to begin production anew, all the value elements contained in the commodity must be replaced by the time when its reproduction is to begin again. In agriculture, this reproduction time is given as a result of natural conditions, and the period of time in which the wear and tear must be replaced is given, in exactly the same way as the time in which all the other value elements of grain, for example, have to be replaced. In order that the reproduction process can begin, i.e., that the renewal of the real process of production can take place, the commodity must pass through the process of circulation, that is, the commodity must be sold (insofar as it is not replaced in kind, like the seeds) and the money for which it is sold converted into elements of production again. In the case of grain and other agricultural products, there are certain specific periods for this reproduction dictated by the seasons, that is, extreme limits, definite limits are set to the duration of the process of circulation. Second: Such definite limits to the circulation process arise in general from the nature of commodities as use-values. All commodities deteriorate sooner or later, although the extreme limit of their existence varies. If they are not consumed by people (either in the production process or individually), then they are consumed by elemental natural forces. They decay, and finally they disintegrate. If their use-value is destroyed, then their exchange-value goes down the drain and that puts an end to their reproduction. The final limits of their circulation time are therefore determined by the natural times and periods of reproduction proper to them as use-values. Third: In order that the production process of the commodities may be continuous, ||1150| that is, so that one part of capital may be continuously in the production process and the other continuously in the process of circulation, very varied divisions of capital must take place, in accordance with the natural limits of the periods of reproduction, or the limits [of existence] of the different use-values, or the different spheres of operation of capital. Fourth: This applies to all the value elements of the commodity simultaneously. But, in the case of commodities in the production of which a great deal of fixed capital is employed, there is, in addition to the limits which their own use-values impose on the circulation process, another determining factor, namely, the use-value of fixed capital. It wastes away in a certain time and, therefore, must be reproduced in a given period. Let us assume, for example, that a ship lasts ten years, or a spinning-machine twelve. The freight carried during the ten years, or the twist sold during the twelve years, must be sufficient for a new ship to replace the old one after ten years and for a new spinning-machine to replace the old one after twelve. If the fixed capital is used up in six months, then the product must be returned from circulation in this period. Besides the natural mortality periods for commodities as use-values periods which vary greatly amongst different use-values and besides the requirements of the continuity of the production process, which set even more varied final limits to the circulation time, according to whether the commodities must remain in the production sphere or can remain in the circulation sphere for a longer or shorter period of time, a third factor is thus added, namely, the different mortality periods, and therefore different requirements of reproduction, of the auxiliary capital used in the production of commodities. Jones declares that the second condition [for the use of auxiliary capital] is the profit which the auxiliary capital must produce, and this is the conditio sine qua non for all capitalist production, regardless of the particular form in which the capital is employed. Nowhere does Jones explain how he conceives the genesis of this profit. But since he merely derives it from labour, and the profit yielded by the auxiliary capital simply from the increased efficiency of the labour of the workmen, it must consist of absolute or relative surplus labour. It arises in general from the fact that after deducting the part of the product which either in kind or by exchange replaces the constituent parts of capital which consist either of raw materials or of means of production, the capitalist, firstly, pays wages from the remainder of the product, and secondly, appropriates a part of it as surplus product, which he either sells or consumes in kind. (This latter is not a significant factor in capitalist production and occurs only in a few exceptional cases, when the capitalist directly produces necessary means of subsistence.) This surplus product, however, just as the other parts of the product, consists of the workers materialised labour, but labour which is not paid for; this product of labour is appropriated by the capitalist without any equivalent. What is new in Jones s presentation is that the increase in the auxiliary capital over and above a certain level is contingent on an increase of knowledge. Jones declares that the necessary conditions are: 1) the means to save the additional capital, 2) the will to save it, 3) some inventions by means of which the productive power of labour is increased sufficiently to produce the additional capital and to produce a profit on it. What is necessary above all is that there should be a surplus product, either in kind or converted into money. In the production of cotton, for example, the planters in America (like those in India at the present time) were able to plant large areas, but did not have the means for converting the raw cotton into cotton by means of cleaning at the right time. Part of the cotton rotted in the fields. This kind of thing was ended by the invention of the cotton gin. Part of the product is now converted into cotton gin. But the cotton gin does not merely replace its own cost; it also increases the surplus product. New markets have the same effect; for instance, furthering the conversion of skins into money (likewise improved transport). Each new machine which consumes coal is a means for converting surplus product existing in the shape of coal into capital. The conversion of a part of the surplus product into auxiliary capital can take place in two ways: [firstly,] increase in the auxiliary capital already in existence, that is, its reproduction on a larger scale; [secondly,] discovery of new use-values or of a new use for well-known use-values, and new inventions of machinery or of motive power leading to the creation of new kinds of auxiliary capital. In this context, extension of knowledge is obviously one of the conditions for increasing the auxiliary capital or, what amounts to the same thing, for the conversion of surplus product or surplus money (foreign trade is important in this connection) into additional auxiliary capital. For example, the telegraph opens up a whole new field for the investment of auxiliary capital, so do the railways, etc., and so does the whole gutta-percha and India rubber production. ||1151| This point about the extension of knowledge is important. Consequently, accumulation does not have to set new labour in motion, it may simply direct the labour previously employed into new channels. For example, the same machine workshop which previously made hand-looms now makes power-looms, and some of the weavers are taken over by [mills using] the changed methods of production while the others are thrown on to the street. When a machine replaces labour, it always demands less new labour (for its own production) than it replaces. Perhaps the old labour is simply given a new direction. In any case, labour is freed, which after a greater or lesser amount of trials and tribulations may be used in other ways. The human material for a new sphere of production is thus provided. As far as the direct freeing of capital is concerned, it is not the capital which buys the machine which becomes free, because it is invested in it. And even assuming that the machine is cheaper than the amount of wages it replaces, more raw material, etc., will be required. If the workers now dismissed previously cost 500 and the new machine costs 500 too, then the capitalist previously had an outlay of 500 every year, whereas the machine may perhaps last ten years, so that in fact he now has an outlay of only 50 a year. But what at any rate becomes free (after deducting the [expenditure for] the larger number of workers employed in the manufacture of the machine and in auxiliary matters connected with it, such as coal [production], etc.) is the capital which constituted the income of the [dismissed] workers or that employed in the production of commodities which these workers bought with their wages. This continues to exist as it did previously. If workers are simply replaced as motive power without [the machinery] itself being substantially altered, for example, if wind or water [now operate the machinery] where this was done previously [by workers], two lots of capital are freed, the capital previously spent on paying the workers and the capital for which their money income was exchanged. This is an example used by Ricardo. But one part of the product previously converted into wages is now always reproduced as auxiliary capital. A large part of the labour previously used directly in the production of means of subsistence is now used in the production of auxiliary capital. This too is in contradiction to Adam Smith s view, according to which the accumulation of capital is synonymous with the employment of more productive labour. Apart from the examples considered above, the result may be merely a change in the application of labour and a withdrawal of labour from the direct production of means of subsistence and its transfer to the production of means of production, railways, bridges, machinery, canals and so on. <How important the existing amount of means of production and the existing scale of production are for accumulation [is described in the following]: ||1152| With development, machinery becomes cheaper, partly relatively in comparison with its power and partly absolutely; at the same time, however, a massive concentration of machinery takes place in the workshop, so that its value increases in proportion to the living labour employed, although the value of its individual components declines: The driving force the machine which produces the motive power becomes cheaper as the machinery which transmits the power and the machine which the power operates, are improved, as friction is reduced, etc. [Jones says further:] <In England herself: Capitalist production leads to separation of science from labour and at the same time to the use of science in material production. With regard to rent, Jones remarks correctly: Rent, in the modern sense of the term, which depends entirely on profit, presupposes: This mobility of capital and labour is, in general, the real prerequisite for establishing the average rate of profit. It presupposes indifference to the specific form of labour. In reality friction takes place (at the expense of the working class) between the one-sided character which the division of labour and machinery impose on labour-power on the one hand, while on the other hand, it confronts capital <which is thereby differentiated from its undeveloped form in craft-build industry> merely as the living potentiality of any type of labour in general, which is given this or that direction according to the profit that can be made in this or that sphere of production, so that different masses of labour are transferable from one sphere to another. In Asia, etc., the body of the population consists of labouring peasants; systems of cultivation imperfectly developed, ||1153| afford long intervals of leisure. As the peasant produces his own food he also produces most of the other primary necessities which he consumes his dress, his implements, his furniture, even his buildings: for there is in his class little division of occupations. The fashions and habits of such a people do not change; they are handed down from parents to children; there is nothing to alter or disturb them (p. 97). On the other hand, the capitalist mode of production, whose characteristic features are mobility of capital and labour and continual revolutions in the methods of production, and therefore in the relations of production and commerce and the way of life, leads to great mobility in the habits, modes of thinking, etc., of the people. Compare the following with the above-quoted passage about the intervals of leisure and the imperfectly developed systems of cultivation . 1. Where a steam engine is employed on a farm; it forms part of a system which employs most labourers in agriculture, and is in all cases [associated] with a reduction [in the number] of horses[pp] ( On the Forces used in Agriculture . A Paper read by Mr. John C. Morton at the Society of Arts on December 7, 1859). 2. the difference of time required to complete the products of agriculture, and of other species of labour, is the main cause of the great dependence of the agriculturists. They cannot bring their commodities to market in less time than a year. For that whole period they are obliged to borrow of the shoemaker, the tailor, the smith, the wheelwright, and the various other labourers, whose products they cannot dispense with, but which[qq] are completed in a few days or weeks. Owing to this natural circumstance, and owing to the more rapid increase of the wealth produced by other labour than that of agriculture, the monopolizers of all the land, though they have also monopolized legislation, have not been able to save[rr] themselves and their servants, the farmers, from becoming the most dependent class of men in the community (Thomas Hodgskin, Popular Political Economy, London, 1827, p. 147, note). The capitalist differs from capital in that he must live, and therefore must consume part of the surplus-value as revenue, daily and hourly. Thus, the longer the period of production before the capitalist can bring his commodity to market, or the longer the period of time before he receives the proceeds from the sale of his commodities, the longer he must live either on credit during the intervening time a matter we are not discussing here or the larger must be the stock of money in his possession which he can expend as revenue. He must advance his own revenue for a longer period. His capital must be larger. He is obliged to leave a part of it always unused, as a consumption fund. <In small-scale farming, therefore, domestic industry is combined with agriculture; supplies for the year, etc.> We now come to Jones s teaching on accumulation. His original contribution so far has been that it is by no means necessary for accumulation to arise from profit; and secondly, that the accumulation of auxiliary capital depends upon the advance of knowledge. He limits the latter to the discovery of new mechanical appliances, motive forces, etc. But it is true in general. For example, if corn is used as raw material in the preparation of spirits, then a new source of accumulation is opened up, because the surplus product may be converted into new forms, satisfy new wants and enter as a productive element into a new sphere of production. The same applies if starch, etc., is prepared from corn. The sphere of exchange of these particular commodities and of all commodities is thereby expanded. The same takes place when coal is used for lighting, etc. Foreign trade, too, is of course an important factor in the process of accumulation, because it tends to increase the variety of use-values and the volume of commodities. What Jones says first of all is concerned with the, connection between accumulation and the rate of profit. (He is by no means very clear about the origin of the latter.) Adam Smith says: ||1154| Though that part of the revenue of the inhabitants which is derived from the profits of stock is always much greater in rich, than in poor, countries, it is because the stock is much greater; in proportion to the stock, the profits are generally much less (Adam Smith, Wealth of Nations, Vol. II, Chapter 3 [quoted by Richard Jones in the Text-book of Lectures, p. 21, note]). Apart from the primary sources of accumulation, there are derivative ones, such as, for example, the owners of the national debt, officials, etc.[ss] All this is fine and good. It is quite correct that the amounts accumulated by no means depend solely on the rate of profit, but on the rate of profit multiplied by the capital employed, that is, just as much on the size of the capital advanced. If we call the capital employed C, and the rate of profit r, then accumulation will be Cr, and it is clear that this product can increase if C grows more quickly than r declines. And this is indeed a fact derived from observation. But this does not explain the cause, the raison d tre of this fact. Jones himself came very near to it when he made the observation that the auxiliary capital continuously increases relatively to the working population by which it is put into motion. Insofar as the decline in [the rate of] profit is due to the cause mentioned by Ricardo the rise of rent the ratio of the total surplus-value to the capital employed remains unchanged. But one part of it rent increases, at the expense of the other part i.e., of profit; this leaves the proportion of the total surplus-value, of which profit, interest and rent are only categories, [to the total capital] unchanged. Thus, in fact, Ricardo denies the phenomenon itself. On the other hand, the mere decline in the rate of interest proves nothing in itself, just as its rise proves nothing, although it does indeed always indicate the minimum rate below which profit cannot fall. For profit must always be higher than the average rate of interest. ||1155| Apart from the terror which the law of the declining rate of profit inspires in the economists, its most important corollary is the presupposition of a constantly increasing concentration of capitals, that is, a constantly increasing decapitalisation of the smaller capitalists. This, on the whole, is the result of all laws of capitalist production. And if we strip this fact of the contradictory character which, on the basis of capitalist production, is typical of it, what does this fact, this trend towards centralisation, indicate? Only that production loses its private character and becomes a social process, not formally in the sense that all production subject to exchange is social because of the absolute dependence of the producers on one another and the necessity for presenting their labour as abstract social labour ( [by means of] money) but in actual fact. For the means of production are employed as communal, social means of production and therefore not [determined] by [the fact that they are] the property of an individual, but by their relation to production, and the labour likewise is performed on a social scale. A separate section in Jones s work is headed On the causes which determine the inclination to accumulate . [He mentions the following]: All these five causes, in fact, boil down to this that accumulation depends on the stage of the capitalist mode of production reached by a particular nation. To begin with No. 2. Where capitalist production exists in a developed form, profit constitutes the chief source of accumulation, that is, the capitalists have concentrated the greater part of the national revenue in their hands and even a section of the landowners seeks to capitalise [their revenue]. No. 3. Security (in the legal and police sense) increases in proportion to the degree to which the capitalists secure control of the State administration. No. 4. As capital develops, the spheres of production increase on the one hand, and, on the other hand, the organisation of credit [develops] in order to collect every farthing in the hands of the money-lenders (hankers). No. 5. In capitalist production, the improvement of one s position depends solely on money, and everyone can delude himself into believing that he can become a Rothschild. There remains No. 1. All people do not have the same predisposition towards capitalist production. Some primitive peoples, such as the Turks, have neither the temperament nor the inclination for it. But these are exceptions. The development of capitalist production creates an average level of bourgeois society and therefore an average level of temperament and disposition amongst the most varied peoples. It is as truly cosmopolitan as Christianity. This is why Christianity is likewise the special religion of capital. In both it is only men who count. One man in the abstract is worth just as much or as little as the next man. In the one case, all depends on whether or not he has faith, in the other, on whether or not he has credit. In addition, however, in the one case, predestination has to be added, and in the other case, the accident of whether or not a man is born with a silver spoon in his mouth. The source of surplus-value and primitive rent: These primitive rents are the first social form in which surplus-value is represented, and this is the obscure conception which forms the foundation of the theory of the Physiocrats. Both absolute and relative surplus-value have this in common that they presuppose a certain level of the productive power of labour. If the entire working-day (available labour-time) of a man (any man) were only sufficient to feed himself (and at best his family as well), then there would be no surplus labour, surplus-value and surplus produce. This prerequisite of a certain level of productivity is based on the natural productiveness of land and water, the natural sources of wealth. It is different in different countries, etc. Needs are simple and crude in early times and the minimum produce required for the maintenance of the producers themselves is consequently small, and so is the surplus product. On the other hand, the number of people who live off the surplus product in those circumstances is likewise very small, so that they receive the sum total of the small amounts of surplus product obtained from a relatively large number of producers. The basis for absolute surplus-value that is, the real precondition for its existence is the natural fertility of the land, of nature, whereas relative surplus-value depends on the development of the social productive forces. And with this we finish with Jones. |XVIII-1156|| [a] Marx is not quoting here but paraphrasing. mainly in German a paragraph from p.61 of Jones s book. Ed. [b] The manuscript has shows . Ed. [c] The manuscript has proceeds entirely from . Ed. [d]Marx here paraphrases (in German) the idea developed by Jones on p. 143 of his book. Ed. [e] The manuscript has All these forms . Ed. [f] The manuscript has system . Ed. [g] The manuscript has the . Ed. [h] The manuscript has For example . Ed. [i] The manuscript has This is possible in larger countries too . Ed. [j] In the manuscript this part of the sentenc is condensed and reads: When prices rise steeply more. Ed. [k]The first part of the sentence up to quadrupled is not a quotation but Marx s paraphrase of the passage. Ed. [l] In the manuscript, of . Ed. [m] The manuscript has Thus the . Ed. [n] The manuscript has are . Ed. [o] The manuscript has decrease . Ed. [p] The manuscript has and vice versa instead of or a fall of wages not compensated by a rise in the rate of profits . Ed. [q] The manuscript has without instead of and this from a cause quite distinct from . Ed. [r] In the manuscript, land . Ed. [s] In the manuscript, thus the increase . Ed. [t] In the manuscript, trebled and so on. Ed. [u] In the manuscript, Even among the Western European nations we still find. Ed. [v] This is a summary by Marx, in his own words (mostly in English), of a much longer passage on pages 16-17 of Jones s book. Ed. [w] Instead of the first part of the sentence, in the manuscript Among all nations . Ed. [x] In the manuscript, Here in England not only the . Ed. [y] In the manuscript, depend on . Ed. [z] In the manuscript, these laboring . Ed. [aa] Instead of may be divided into three groups , in the manuscript are . Ed. [bb] Instead of may be subdivided into , in the manuscript are . Ed. [cc]The first part of this sentence is shortened by Marx and reads in the manuscript Something resembling rent or profit is often. Ed. [dd] In the manuscript, they may be regarded as wage-labourers . Ed. [ee] In the manuscript the first part of the sentence reads In England limited to . Ed. [ff] In the manuscript, slaves . Ed [gg] This part of the sentence is summarised by Marx. Ed. [hh] This paragraph represents a summary by Marx of the ideas outlined by Jones on p. 20 of his book. It is written almost entirely in English. Ed. [ii] By fair means or foul. Ed. [jj] In the manuscript, nation. Ed. [kk] In the manuscript, the capitalist . Ed. [ll] In the manuscript, this . Ed. [mm] In the manuscript, the productive powers of labour are increased to such an extent as to make it . Ed. [nn] This and the following quotation were taken by Marx from the French edition of A. Ure s work. Ed. [oo] In the manuscript, to another . Ed. [pp] This is not a quotation, but a summary of a passage from Morton s paper, which was published in the Journal of the Society of Arts, December 9, 1859, pp. 53-61. Ed. [qq] In the manuscript, whose products they need, and which . Ed. [rr] In the manuscript, are unable to save . Ed. [ss] This last sentence is a summary by Marx of an idea outlined by Jones on p. 23 of his book. Ed.

Economic Manuscripts: Theories of Surplus-Value, Chapter 24

https://www.marxists.org/archive/marx/works/1863/theories-surplus-value/ch24.htm

In the Ricardian period of Political Economy there arises the opposition to it, namely, Communism (Owen) and Socialism (Fourier and Saint-Simon). The latter are still in their swaddling clothes. According to our plan of work we have to deal only with the opposition which springs from the propositions of the economists .... In the same measure as Political Economy grew into a science -- and this growth, as far as its principles are concerned, finds its clearest expression in Ricardo -- it came to regard Labour as the only element of value and the only creator of use-value, and the growth of the productive forces of labour as the only means of a real increase of wealth; the greatest possible development of the productive forces of labour as the economic basis of society. This is indeed the basis of capitalist production. Ricardo s book, by demonstrating the force of the law of value in relation to rent, capitalist accumulation, & c., is really devoted to the removal of all contradictions, or to an elucidation of all phenomena which appear as contradiction to the law of value. But in the same measure as labour comes to be regarded as the only source of exchange value and the active agent of use value, the economists, and particularly Ricardo (and more so Torrens, Malthus, Bailey, & c.), make capital the regulator of production, while labour is in their eyes merely wage-labour, the agent and instrument of which is necessarily a pauper; and this conception is reinforced by the population theory of Malthus. The labourer is but one of the items in the cost of production, whose existence depends on a minimum wage, and who may even sink below the minimum as soon as, from the point of view of capital, he appears as a redundant mass. In this contradiction, Political Economy merely expresses the essence of capitalist production or, if you like, of wage-labour of labour which disowns its own creation, which looks upon the wealth it produces as the wealth of others, which regards its own productive capacity as that of the product (capital), and its own social power as the power of society. And this specific, historical, transient form of social labour the economists regard as the general and only form, as something inevitable; and those conditions of production they pronounce to be the absolutely (not historically) necessary -- the natural and reasonable conditions of the productive work of society. Hopelessly closed in by the horizon of capitalist production, the economists declare the antagonistic form in which the productive work of society appears to-day to be as necessary as social productive service itself when freed from all antagonism. By declaring, on the one hand, labour to be absolute, because they identify wage-labour with social labour, and on the other hand, capital to be absolute, that is, by pronouncing in the same breath the poverty of labour and the wealth of non-labour as the only source of wealth, they are permanently entangled in absolute contradictions, without having the slightest idea of it. Sismondi, by getting an inkling of it, is epoch-making in the history of political economy. However, it was inevitable that the same real evolution, to which the economists gave theoretical expression, would likewise bring the real antagonistic forces to the surface, particularly through the contrast between the growing wealth of the nation and the growing misery of the workers. And as, furthermore, these contradictions found in Ricardo s work a theoretically striking, though unconscious, expression it was but natural that the intellects who took the side of the proletariat would get hold of the contradiction which theory had prepared for them. You say, the latter argued with the economists, that labour is the only source of exchange value and the only active creator of use value, and yet you say, too, that capital is everything and labour nothing or merely a part of the cost of production. You have contradicted yourselves. Capital is nothing but robbery of labour. Labour is everything. This is indeed the last word of all those writings which defend the interests of labour from the standpoint of Ricardo s theories. But as little as Ricardo understood the meaning of his identification of capital and labour do those proletarian defenders understand the contradiction which they point out; therefore it happens that the most prominent among them, such as Hodgskin, for instance, accept all prerequisites of capitalist production as eternal forms and but desire to eliminate capital, at once the basis and the necessary consequence.

Economic Manuscripts: Post-Ricardian Social Criticism by Karl Marx 1863

https://www.marxists.org/archive/marx/works/1863/theories-surplus-value/post-ricardian.htm

Theories of Surplus-Value was written by Marx between January 1862 and July 1863. This work is part of the voluminous manuscript of 1861-63, entitled by Marx Zur Kritik der Politischen Oekonomie (A Contribution to the Critique of Political Economy) and written by him as the immediate sequel to the first part of A Contribution to the Critique of Political Economy published in 1859. The 1861-63 manuscript consists of 23 notebooks (the pages numbered consecutively from 1 to 1472) running to some 200 printed sheets in length: it is the first systematically worked out draft though still only rough and incomplete of all four volumes of Capital. Theories of Surplus-Value forms the longest (about 110 printed sheets) and most fully elaborated part of this manuscript and is the first and only draft of the fourth, concluding volume of Capital . Marx called this volume, as distinguished from the three theoretical volumes, the historical, historico-critical, or historico-literary part of his work. Marx began to write Theories of Surplus-Value within the framework of the original plan of his Critique of Political Economy as he had projected in 1858-62. On the basis of what Marx says of the structure of his work in his introduction to the first part of A Contribution to the Critique of Political Economy, in his letters of 1858-62 and in the 1861-63 manuscript itself, this plan can be presented in the following schematic form: PLAN OF THE CRITIQUE OF POLITICAL ECONOMY AS PROJECTED BY MARX IN 1858-62 [[The scheme s form has been adapted for the Web edition.]] It can be seen from this plan that Theories of Surplus-Value was originally conceived by Marx as a historical excursus to that section of his theoretical study of capital in general which was devoted to the problem of the production process of capital. This historical excursus was to conclude the section on the production process of capital, in the same way as in the first part of A Contribution to the Critique of Political Economy the chapter on commodities was concluded by the historical excursus On the History of the Theory of Commodities and the chapter on money by the historical excursus Theories of the Medium of Circulation and of Money . That was Marx s original plan. But in the process of working it out the historical excursus on theories of surplus-value went far beyond the limits of this plan. The subject-matter of the theories to be investigated and criticised by Marx itself demanded an extension of the limits of the inquiry. The critical analysis of the views of bourgeois economists on surplus-value was unavoidably interwoven for Marx with the analysis of their ideas of profit; and in so far as these ideas were bound up with erroneous conceptions of ground-rent, it was necessary also to examine the theory of rent -and so on. On the other hand, in order to make the criticism of erroneous theories comprehensive and exhaustive, Marx counterposed to them one or another positive part of the new economic theory created by Marx himself -a theory that represents the greatest revolutionary transformation in the whole of economic science. To grasp fully the character of the material and structure of Theories of Surplus-Value it is necessary to bear in mind also the following. At the time when Marx began his work on the Theories, of the theoretical parts of Capital only the first The Production Process of Capital had been more or less worked out in writing, and even that not fully (this question is examined in the first five notebooks of the 1861-63 manuscript). The second and third parts to be more exact, certain sections of them existed only in the form of preliminary sketches in the manuscript of 1857-58. In writing the historical part, therefore, Marx could not simply make reference to certain pages of his theoretical work, but was obliged to undertake a positive elaboration of those theoretical questions which came up in the critical analysis of all previous political economy. All this led to the historical excursus Theories of Surplus-Value assuming immense proportions. In the voluminous manuscript of 1861-63 the historical, or historico-critical, part fills notebooks VI to XV inclusive, plus XVIII, and a number of separate historical essays in notebooks XX to XXIII. The main text of Theories of Surplus-Value is contained in notebooks VI to XV and XVIII, written in the period from January 1862 to January 1863 inclusive. The table of contents compiled by Marx and written on the covers of notebooks VI to XV refers also to this text. This table of contents is of great importance for an understanding of the general structure of Marx s work, its component parts and its plan. In the present edition it is printed at the very beginning of the first part (pp. 37-39). The historico-critical essays and notes contained in the last notebooks of the manuscript, and written in the spring and summer of 1863, are supplementary to the main text. In the course of his work on Theories of Surplus-Value the range of problems examined by Marx was constantly extending. And in the end this led Marx to the idea that it was necessary to separate off the whole of the historico-critical material to form a special, fourth volume of Capital. In the process of Marx s work on Capital the decisive significance of the division into three parts (1. The Production Process of Capital, 2. The Circulation Process of Capital, 3. The Unity of the Two) which Marx originally had in mind only for the section Capital in General , became more and more apparent. This division into three parts proved to be so important and so profound that gradually even those subjects which, according to the original plan, were not among the complex of questions allocated by Marx to the section Capital in General , came to be included in it (for example, the competition of capitals, credit, rent). Parallel with this process of working out the three theoretical parts of Capital, which gradually incorporated all the theoretical problems of the political economy of capitalism, Marx became more and more strongly convinced that the historico-critical inquiry should be presented in the form of a separate book as the fourth volume of Capital. About a month after finishing his work on the 1861-63 manuscript Marx (in a letter dated August 15, 1863) wrote to Engels about this manuscript of his: I look at this compilation now and see how I have had to turn everything upside-down and how I had to create even the historical part out of material of which some was quite unknown . By the historical part Marx meant the Theories of Surplus-Value, which he was therefore already considering as a separate, special part of his work; whereas as late as January 1863 he was proposing to distribute this historico-critical material among the theoretical sections of his inquiry into Capital in General , as is evident from the plans he drew up for the first and the third parts of Capital (see pp. 414-16 of the present volume). Marx s intention to carry through a critical examination of the history of political economy, starting from the middle of the seventeenth century, is shown by his detailed historico-critical essay on Petty, contained in notebook XXII of the manuscript, written in May 1863; it has the characteristic heading Historical: Petty . This essay, which has no internal connection with either the preceding or following text, was clearly intended by Marx for the historico-critical part of his work. Petty s views on value, wages, rent, the price of land, interest, etc., are analysed in the essay. Such a wide treatment of Petty s economic views shows that already in May 1863 Marx had conceived the idea which four years later (April 30, 1867) he explicitly set out in a letter to Siegfried Meyer, when he wrote regarding the structure of his Capital: Volume I comprises the Process of Capitalist Production Volume II gives the continuation and conclusion of the theories, Volume III the history of political economy from the middle of the seventeenth century (Marx at that time proposed to issue the second and third books of Capital in one volume). We find the first direct reference to the fourth, historico-literary , book of Capital in Marx s letter to Engels of July 31, 1865. Marx wrote to Engels about how he is getting on with his Capital: There are still three chapters to write in order to complete the theoretical part (the first three books). Then there is still the fourth book, the historico-literary one, to write, which is relatively the easiest part to me as all the problems have been solved in the first three books and this last is therefore more of a repetition in historical form. Here the question may arise why Marx says that he still has to write the fourth book of Capital, although in the letter of August 15, 1863 quoted above he speaks of the historical part as of something already written. The difference in the formulations of 1863 and of 1865 is to be explained by the fact that in the intervening period, in the course of 1864-65, Marx recast and rewrote all three theoretical parts of his work, but the fourth part the historico-literary was still in the original form as it had been written in 1862-63, and therefore had to be worked over again in conformity with his re-editing of the first three volumes of Capital. From Marx s letter of November 3, 1877 to Siegmund Schott it appears that Marx also later on regarded the historical part of Capital as in some degree already written. In this letter Marx says of his work on Capital: In fact I myself began Capital, precisely in the reverse order (beginning with the third historical part) from that in which it is presented to the public, with the qualification, however, that the first volume, which was the last to be taken in hand, was prepared for the press straightway while the two others still remained in the raw form that every inquiry originally assumes. Here the historical part is called the third for the reason that Marx, as already mentioned, intended to issue the second and third books of Capital in one volume, as Volume 11, and the fourth book, History of the Theory , as the third volume. These statements by Marx entitle us to regard Theories of Surplus-Value (with the supplementary historical sketches and notes from notebooks XX-XXIII) as the original and only draft of the fourth book or fourth volume of Capital. Engels and Lenin called Theories of Surplus-Value the fourth volume of Capital. For these reasons, the words Volume IV of Capital have, in the present volume, been added in round brackets to the title Theories of Surplus-Value given by Marx in his 1861-63 manuscript. Engels first refers to the manuscript Theories of Surplus-Value in his letters to Kautsky of February 16, and March 24, 1884. In the second letter Engels sends word of the agreement reached with Meissner, the publisher of Capital, as to the sequence in which the second and then the third book of Capital, and Theories of Surplus-Value as the concluding part of the whole work, were to be published. In his letter to Bernstein, written in August 1884, Engels speaks in greater detail of this concluding part of Capital. Here we find: History of the Theory , between ourselves, is in the main written. The manuscript of A Contribution to the Critique of Political Economy contains, as I believe I showed you here, about 500 quarto pages of Theories of Surplus-Value, in which it is true there is a good deal to be cut out, as since then it has been worked up in a different way, but there is still enough. Engels s preface (dated May 5, 1885) to Volume II of Capital gives the most detailed information about the manuscript Theories of Surplus-Value and the form in which Engels intended to publish it. He points out that Theories of Surplus-Value makes up the main body of the lengthy manuscript A Contribution to the Critique of Political Economy, written in 1861-63, and continues: This section contains a detailed critical history of the pith and marrow of Political Economy, the theory of surplus-value, and develops parallel with it, in polemics against predecessors, most of the points later investigated separately and in their logical connection in the manuscript for Books II and III. After eliminating the numerous passages covered by Books II and III I intend to publish the critical part of this manuscript as Capital, Book IV. Valuable as this manuscript is, it could not be used for the present edition of Book II. In his letters of the late eighties and early nineties Engels repeatedly mentions his intention of proceeding with the preparation of the fourth volume, Theories of Surplus-Value, after the publication of Volume III of Capital. He however already speaks far less categorically about eliminating the theoretical passages contained in the manuscript of the Theories. The last mention by Engels of the manuscript Theories of Surplus-Value is in his letter to Stephan Bauer dated April 10, 1895. As this letter shows, Engels was still hoping in 1895 that he would succeed in publishing this work of Marx s. But Engels did not manage to prepare the concluding volume of Capital for the printer; he died barely four months after this letter was written. From Engels s statements quoted above it is clear that he attributed great importance to the manuscript Theories of Surplus-Value, and regarded it as Volume IV of Capital. But it is also evident that in 1884-85 Engels intended to remove from the text of this manuscript numerous passages covered by Books II and III . Here the question naturally comes up: what should be our attitude with regard to this proposal or intention of Engels? Only Engels, the great companion and comrade-in-arms of Marx, and in a certain sense the co-author of Capital, could have removed from the manuscript Theories of Surplus-Value a whole series of passages. In order that the parts of the manuscript that remained after the elimination of these passages should not appear as disconnected fragments, it would have been necessary to work them over to a considerable extent and to link them together with specially written interpolations. And only Engels had the right to work over Marx s text in such a way. There is one more reason in favour of keeping in the text of Theories of Surplus-Value the numerous passages mentioned above. Engels s intention to cut out these passages was only his original intention, formed before he had begun a detailed study of the manuscript Theories of Surplus-Value. And we know from Engels s preface to Volume III of Capital that, in the course of his actual work on the preparation of Marx s manuscripts for the printer, he sometimes revised his original intentions and plans. Thus, Engels originally wanted to recast Part V of Volume III of Capital, as this part of Marx s manuscript was still in unfinished form. Engels says in his preface that he had tried at least three times to make a fundamental recasting of this part, but in the end abandoned this idea and decided to confine himself to as orderly an arrangement of available matter as possible, and to making only the most indispensable additions . By analogy with this, it may be presumed that if Engels had actually come to prepare the manuscript Theories of Surplus-Value for the press, he would have kept the theoretical digressions contained in it. This presumption is all the more probable because among the digressions are some in which Marx presents very important theoretical analyses, essentially supplementing the exposition, for example, in Volume III of Capital particularly the section on rent. Lenin had an extremely high regard for the theoretical analyses contained in the manuscript Theories of Surplus-Value. He often referred in his writings to Theories of Surplus-Value, expressing equally great esteem for both the historico-critical and the purely theoretical content of this work of Marx. He valued particularly highly the sections in which Marx developed his own views on the nature of rent (see V. I. Lenin, The Agrarian Question and the Critics of Marx , Eng. ed., Moscow, 1954, pp. 29 and 158; The Agrarian Programme of Social-Democracy in the First Russian Revolution, 1905-1907, Eng. ed., Moscow, 1954, pp. 101, 140, 143). Lenin refers to Marx s remarkable passages in his Theories of Surplus-Value, where the revolutionary significance in the bourgeois-democratic sense of land nationalisation is explained with particular clarity (The Proletarian Revolution and the Renegade Kautsky, Eng. ed., Moscow, 1952, p. 152; see The Agrarian Programme of Social-Democracy in the First Russian Revolution, 1905-1907, Eng. ed., Moscow, 1954, pp. 145, 175-76; Works, 4th Russ. ed., Vol. 15, p. 148, and Vol. 16, p. 104, etc.). He cited from Theories of Surplus-Value Marx s principal theses on absolute rent, and stated that they confirmed the correctness of his own treatment of this problem made some years before the publication of the Theories, in his work The Agrarian Question and the Critics- of Marx (see Eng. ed., Moscow, 1954, p. 29). Theories of Surplus-Value was first published by Kautsky in 1905-10, and since then has been more than once republished in this Kautsky edition both in German and in other languages; it has been published several times in Russian. The Kautsky edition has many radical defects. Setting out from the totally false assumption that the manuscript Theories of Surplus-Value was devoid of any harmonious plan and was something of a chaos , Kautsky subjected it to an arbitrary adaptation , revising the most important principles of revolutionary Marxism. First of all Kautsky crudely violated the arrangement of the material set forth by Marx in the table of contents which he compiled and in fact adhered to in his work. Kautsky completely ignored this table of contents in preparing his edition, and did not even include it in the book. The material in Marx s manuscript is arranged consistently and in definite logical sequence. Analysing the attempts of bourgeois economists to resolve the basic problems of political economy, Marx reveals the class limitations that characterised even classical bourgeois political economy, the inability of the bourgeois economists to provide any internally consistent and scientifically grounded solution of the questions they dealt with, and above all of the central problem-the problem of surplus-value. Marx s manuscript reveals that the development of bourgeois political economy was a process full of contradictions; thus in examining the theories of Smith and Ricardo, Marx shows that in certain respects they brought science forward in comparison with the Physiocrats, but in other respects they repeated the mistakes of the Physiocrats and even took a step backwards. Kautsky distorted this deeply dialectical survey of Marx; he tried to subordinate the whole material of the manuscript to an external, purely chronological sequence, and to present the course of development of bourgeois political economy as a smooth evolutionary process. Following his chronological plan, Kautsky placed at the very beginning of his edition not the characterisation of the views of James Steuart, which in Marx s manuscript forms the introduction to the chapter on the Physiocrats, but four short fragments (on Petty, D Avenant, North and Locke, Hume and Massie), taken for the most part from notebooks XX and XXII. Kautsky mechanically transferred these fragments (as also certain others) to the first chapter of the first volume, and by so doing jumbled together the connected exposition of notebooks VI-XVIII (from James Steuart to Richard Jones) with the supplementary essays in notebooks XX-XXIII. In Marx s manuscript the analysis of Quesnay s theory on the reproduction and circulation of the total capital came after the analysis of Smith s theories; in the Kautsky edition this part of the manuscript precedes the chapter on Smith, and is given in a form rehashed by Kautsky, who arbitrarily removed nine tenths of this section from the main text and put it into an appendix printed in small type and wedged into the main text. Kautsky also put the theoretical digressions in which Marx sets out his own view of the reproduction of the social capital into a separate appendix printed in small type and inserted in the text of the book. Kautsky tore them out from various places in the manuscript, grossly violating the inner connection between the historico-critical and the theoretical studies of Marx. Kautsky was also responsible for obvious departures from the arrangement of the material given in Marx s manuscript, in the second volume of his edition. Marx began this part of the manuscript with a critique of Rodbertus s theory of rent; the Kautsky edition starts with the chapter Surplus-Value and Profit , dealing with Ricardo, and the critique of Rodbertus s theory comes only after this chapter. In Marx s manuscript the analysis of Ricardo s views on surplus-value and on the process of the changing rate of profit is placed after the critique of the Ricardian theory of rent; in the Kautsky edition it is in the chapter Surplus-Value and Profit which begins the volume. Here also Kautsky, by departing from the sequence of the material in the manuscript, obscures important points of principle in Marx s work, in particular, Marx s idea that Ricardo s errors in the theory of rent had left their stamp on the Ricardian doctrine of profit. As a result of all these arbitrary rearrangements which he made in the manuscript, problems that are organically connected are torn apart in the Kautsky edition. For example, the chapter Ricardo s Theory of Profit in Marx s manuscript contains a critique of Ricardo s views on the process of the formation of the average rate of profit and of his views on the causes of its fall. In the Kautsky edition these two parts of one and the same chapter of Marx s manuscript are separated from each other by 350 pages of the text. All the material in the manuscript is given by Kautsky in a form which obscures the questions of the class struggle, and the deep connection between economic theories and the social and political environment in which they are developed. Thus for example, in the second volume of the Kautsky edition there is a section headed by Kautsky Anderson and Malthus. Roscher . In the corresponding passage of the manuscript Marx shows that Anderson s views on rent were distorted by Malthus in the interest of the most reactionary elements of the ruling classes, while Ricardo s conclusions were directed against the landowning aristocracy. After this, Marx dwells on the vulgar economist Roscher, who crudely distorted the whole history of the question. The clear, politically sharp content of this section of the manuscript, which is a model of profound class analysis of the history of political economy, has been unsystematically lumped together by Kautsky under one general and quite colourless title which is a mere enumeration of names. This type of editorial titling is extremely characteristic of the Kautsky edition. Almost all the titles which Kautsky furnished for the chapters and paragraphs of his edition bear an objectivist, neutral character. This applies, for example, to titles such as: Adam Smith and the Concept of Productive Labour , Ricardo s Conception of Value , Ricardo s Idea of Surplus-Value , The Rate of Profit , Value and Surplus-Value , Variable Capital and Accumulation , and so on. Kautsky s titles have nowhere set off Smith s two different definitions of value, the twofold nature of Smith s views on the relations between value and revenue, Ricardo s inability to connect the law of the average rate of profit with the law of value, etc., which Marx had brought to light. In his titling Kautsky also glosses over the vulgar element in the views of Smith and Ricardo: and he supplies the chapters on Ramsay, Cherbuliez and Richard Jones with titles calculated to give the reader the entirely false impression that some elements of Marxist political economy were to be found already in the works of these bourgeois economists. Kautsky s distortions and revisions of Marx s text are shown in their crudest and most overt form in the numerous cuts that he made. Kautsky omitted, in his edition, not only individual words and sentences, but also whole passages, some of which fill three, four or more pages of the manuscript, in Marx s compact writing. Among the parts of the manuscript Kautsky omitted there is even a whole chapter, which appears in Marx s table of contents under the title: Bray as Adversary of the Economists . Kautsky also omitted, among many others, the passage in the manuscript in which Marx speaks of the economic preconditions of the absolute impoverishment of the working class under capitalism. Having started on the path of falsification, the revisionist Kautsky, who denied the absolute impoverishment of the working class, did not hesitate to conceal from the reader Marx s arguments on this important question, of principle. In editing Marx s manuscript, Kautsky tried to tone down the annihilating criticism to which Marx subjected the views of the bourgeois economists, and to substitute decorous sleek expressions for the angry, passionate, caustic language used by Marx in his merciless criticism of the apologists of the bourgeoisie. Thus Kautsky in all passages removed from Marx s characterisation of bourgeois economists such epithets as asses , dogs , canaille . Finally, characteristic of the entire Kautsky edition are the numerous and sometimes extremely crude mistakes in deciphering the text of the manuscript, inaccurate and in a number of cases obviously incorrect translations of English and French expressions occurring in the text, arbitrary editorial interpolations inconsistent with the movement of Marx s thought, the absolutely impermissible substitution of some of Marx s terms by others, and so on. The complete disregard of Marx s table of contents, the arbitrary and incorrect arrangement of the manuscript material, the objectivist titles which avoid the class essence of the conceptions criticised by Marx, the obscuring of the fundamental antithesis between Marx s economic teaching and the whole bourgeois political economy, the removal of a number of passages containing important theses of revolutionary Marxism, from which Kautsky more and more departed all this suggests that what we have here is not only gross violations of the elementary requirements of a scientific edition, but also the direct falsification of Marxism. The present edition contains in full both the main text of Theories of Surplus-Value to which the table of contents compiled by Marx refers and which gives a connected exposition of the history of the theory from James Steuart to Richard Jones and the digressions supplementing this main text which are in notebooks V, XV, XX, XXI, XXII and XXIII. These supplementary sections are put in the form of appendices, in order not to interfere with the sequence of the exposition given in the main text. The length of all this material (about 110 printed sheets) makes it necessary to divide the book into three parts. The appendices are distributed among these three parts in such a way that each part concludes with those supplementary digressions and notes which directly refer to its contents. The arrangement of the main text follows exactly the table of contents which Marx compiled. Only those few changes which Marx himself indicated have been made in the order of the text in some of the manuscript books. Thus, for example, in notebook VII Marx, in dealing with Smith s conception of productive labour, and referring in this connection to the vulgarisation of Smith s views by Germain Garnier, makes a long digression about John Stuart Mill. This begins with these words: Before dealing with Garnier, something incidentally here [by way of a digression] on the above-mentioned Mill junior. What is to be said here really belongs later in this section, where the Ricardian theory of surplus-value is to be discussed; therefore not here, where we are still concerned with Adam Smith. In accordance with this indication and with the table of contents of notebook XIV, later compiled by Marx, the excursus on John Stuart Mill has been placed in the present edition in the third part of Theories, in the chapter on the decline of the Ricardian school, where Marx allocates a special section to John Stuart Mill. Another example of transposition: notebook X contains a short chapter on the English socialist Bray (pp. 441-44 of the manuscript); in the later compiled plan of the contents of the last chapters of Theories of Surplus-Value (on the cover of notebook XIV) Marx however assigned the section Bray as Adversary of the Economists to the chapter Adversaries of the Economists ; following this indication by Marx, in the present edition pages 441-44 have also been transferred to the third part of the work. The division of the text into chapters follows Marx s directions in the table of contents he compiled and in various places in the manuscript itself. For the titles given to the separate parts of the manuscript, use has been made of (1) the titles from Marx s table of contents; (2) the titles from Marx s draft plans for Parts I and III of Capital, which have reference to certain sections of the manuscript of Theories; (3) the few headings in the text of Theories itself. All these taken together, however, form only a comparatively small part of the titles that had to be provided for the sections and subsections of the manuscript. The rest of the titles -the majority -have been drawn up by the editors on the basis of the text of corresponding parts of the manuscript, with the fullest possible use of Marx s own terminology and formulations. The titles given by the editors as in general all that the editors are responsible for have been put in square brackets, so that they can be easily distinguished from titles given by Marx. Obvious slips of the pen occurring in the manuscript have been corrected as a rule without being expressly mentioned in footnotes. A few obvious slips of the pen in the text of notebooks VI and X were corrected by Engels s own hand, in the manuscript itself. Specific terms used by Marx in the 1861-63 manuscript are explained in notes. The titles of books cited and mentioned by Marx are given in the text of this edition in the language of the original. In spite of the fact that Theories of Surplus-Value was left in a form that had not prepared for the press, this work gives a connected and complete picture of that History of the Theory which Marx intended to form the final, fourth volume of Capital. In it Marx sets forth the whole course of evolution of bourgeois political economy from the time of its birth up to its grave , as vulgar political economy was called by Marx. As already mentioned, in the present edition all the material of Theories of Surplus-Value and the supplementary sections relating to it have been divided into three parts. The content of the manuscript itself determines the way in which the material is divided. The first part consists of seven chapters of the main text (notebooks VI-X) and thirteen supplementary sections. This part is devoted in the main to a critical analysis of the views of the Physiocrats (chapters II and VI) and of Adam Smith (chapters III and IV). Chapter I ( Sir James Steuart ), characterising Steuart s hopeless attempt to give a rational form to the monetary and mercantile system, serves as an introduction to the analysis of Physiocratic theory. By contrasting the Physiocrats with Steuart Marx was able to bring out more sharply the role of the Physiocrats and their significance in the development of political economy namely, that they transferred the origin of surplus-value from the sphere of circulation to the sphere of production. Analysing the economic views of the Physiocrats, Marx shows the contradictions in their system, the dual nature of their conception of surplus-value, which is presented in their works sometimes as a pure gift of nature, at other times as the result of the special productivity of agricultural labour appropriated by the owner of the land. It is this that gives the key to an understanding of the further evolution of the Physiocratic school. Marx shows the battle of ideas within this school, and traces the vulgarisation of Physiocratic theory by its epigones. His analysis of the ideological struggle within the Physiocratic school is inseparably linked with his characterisation of the class essence of the Physiocrats views. Marx also reveals the contradictions and inconsistencies in the treatment of the most important economic categories in Adam Smith s theory (Chapter III). Subjecting Smith s theory to a critical analysis, Marx brings out the vulgar element it contains. This contrast between the scientific and the vulgar element in Smith s doctrine provides the necessary basis for understanding the further evolution of bourgeois political economy, which, as Marx shows, took on a more and more vulgar character as the class struggle between the proletariat and the bourgeoisie grew sharper. In Chapter III, in connection with the criticism of Smith s dogma which resolves the entire value of the social product into revenue, Marx gives a theoretical analysis of the reproduction of the total social capital, and deals particularly fully with the problem of the replacement of constant capital. In addition to its general theoretical significance, this excursus (the longest of the theoretical digressions in the first part) is of great importance also because it shows how Marx arrived at his theory of the two departments of social production. Chapter IV deals with Smith s views on productive and unproductive labour. Along with this it gives an analysis of the struggle that flared up in connection with Smith s views, and describes the vulgarisation of bourgeois political economy in handling the question of productive and unproductive labour. Marx traces the process of vulgarisation not only of Smith s views on this question, but also of the views of the Physiocrats. Many of the vulgar conceptions here criticised by Marx are widely held also in contemporary bourgeois political economy, which has degenerated into open apologetics of capitalism. Chapter VI ( Quesnay s Tableau conomique ) takes us back to the Physiocrats. There was good reason for this arrangement of the material. Though Adam Smith s theory, as Marx s comprehensive analysis shows, represented as a whole a considerable step forward in the development of bourgeois political economy, in his analysis of the process of reproduction Smith takes a step backwards in comparison with the Physiocrats. Marx s arrangement of the material indicates the zigzag course of development of classical bourgeois political economy, its forward movement in the treatment of particular questions and its backward movement in the treatment of others. Two short chapters on Necker and Linguet give an analysis of two early attempts to portray the antagonistic nature of the two classes under capitalism. The appendices to Part I contain the historico-critical essays and notes from notebooks V, XX, XXI, XXII, XXIII and the cover of XIII. Appendices 1-7 contain characterisations of the economic views of Hobbes, Petty, Locke, North, Berkeley, Hume and Massie. In these views Marx discerns the rudiments of the labour theory of value, and of the doctrine of capital and of interest. Appendices 8-10 give supplementary material on the Physiocratic school. Appendix 11 contains a critique of the apologetic conception of the productiveness of all trades a conception that is widespread in contemporary bourgeois political economy. Appendix 12 is a lengthy theoretical essay from notebook XXI of the manuscript, in which Marx elaborates his own view which is the only scientific view of the problems of productive and unproductive labour. This theoretical essay as it were draws the general conclusions from the historico-critical analysis of the problem of productive labour given by Marx in the lengthy Chapter IV of the main text. Finally, we print in Appendix 13 the draft plans for Parts I and III of Capital. They are very important for an understanding of the history of how Capital took shape; moreover, they contain formulations of certain themes which relate to its historico-critical part. In the second part of Theories of Surplus-Value (chapters VIII-XVIII, notebooks X-XIII) the critical analysis of Ricardo s doctrine holds the central place. Along with this there is an analysis of Adam Smith s theory of cost-price and of rent. In his analysis of Ricardo s system, Marx shows that it contains a number of faulty premises which owed their origin to Smith. In this connection, Marx subjects the corresponding views of Smith to special scrutiny. In conformity with the arrangement of the material in Marx s manuscript, the second part begins with the lengthy excursus dealing with Rodbertus s theory of rent (Chapter VIII). The fact that the concept of absolute rent was altogether missing in Ricardo s theory of rent constituted in Marx s view its principal defect. Marx therefore prefaces his analysis of Ricardo s theory with an extensive examination of Rodbertus s attempts to develop this concept. In this connection, Marx substantiates his own theory of absolute rent. The second excursus (Chapter IX) is a compressed historical sketch of the development of views on differential rent. Marx here lays bare the class roots of the various theories on this question. In addition, Marx gives in this chapter a profound analysis of the basic premises of the theory of rent, and reveals the close connection between the theory of rent and the theory of value, showing how errors in the theory of value lead to erroneous conclusions in the theory of rent. These two digressions in this way prepare the ground for the thorough-going analysis of Ricardo s theory contained in chapters X-XVIII. While stressing Ricardo s great theoretical merits, Marx at the same time underlines the defects of his method in principle Ricardo s inability to link the law of the average rate of profit with the law of value, the presence of vulgar elements in his theory of profit, his confusion of the process of formation of market value with the process of equalisation of the average rate of profit, his confusion of the laws of surplus-value with the laws of profit, and so on. All these defects, as Marx shows, are also evident in Ricardo s theory of rent. Criticising this theory, Marx develops his own theory of rent, embracing both the theory of absolute rent and the theory of differential rent. Chapters XV, XVI and XVII contain a critical analysis of Ricardo s views on surplus-value, profit and accumulation. In Chapter XVII Marx counterposes the genuinely scientific understanding of crises as a necessary outcome of the internal contradictions of capitalism to Ricardo s mistaken views regarding the nature of crises. Chapter XVIII is a critique of Ricardo s views on the question of gross and net revenue, and also of his views on the economic consequences of the introduction of machinery. Thus the critical analysis of Ricardo s doctrine which Marx makes in the second part of Theories of Surplus-Value embraces all aspects of Ricardo s system, showing his scientific merits and at the same time bringing out the theoretical errors and class limitations of his views. Marx s short supplementary notes, written on the covers of notebooks XI and XIII, are given as appendices to Part II. They contain brief observations by Marx on particular historical questions connected with the theory of capital and of rent. Part III of Theories of Surplus-Value (chapters XIX-XXIV, notebooks XIII-XV and XVIII) deals in the main with the dissolution of the Ricardian school and the economic views of the English socialists whom Marx spoke of as the proletarian opposition based on Ricardo . In Parts I and II Marx demonstrated how bourgeois political economy was vulgarised in relation only to particular questions; in Part III, however, he shows how, with the sharpening of the class struggle between the bourgeoisie and the proletariat, the process of vulgarisation lays hold of the very foundations of political economy, its initial principles, its essential categories. In the lengthy chapter on Malthus (Chapter XIX) Marx exposes the absurdity and profoundly reactionary character of the Malthusian defence of extravagance by the unproductive classes which he glorifies as a means of avoiding overproduction. In this chapter, as in other places in his work, Marx brands Malthus as a shameless sycophant of the ruling classes , who falsified science in the interests of the landed aristocracy and the most reactionary elements of the bourgeoisie. Marx shows that Ricardo s successors also took a step backward on the basic questions of political economy; they in fact more and more openly renounced all the valuable elements in Ricardo s system (Chapter XX). He points to the denial by Torrens that the labour theory of value is applicable to capitalist economy, and shows that James Mill returned to the vulgar conception of supply and demand in the question of wages. Marx exposes the return to this conception also in the case of Wakefield and Stirling. This process of dissolution of the Ricardian school reaches its completion with McCulloch, whose cynical apologetics for the capitalist mode of production were most closely linked with unscrupulous eclecticism in the sphere of theory. Marx shows that the distortion of the concept of labour by McCulloch, who extended it to natural processes, meant in fact the complete abandonment of the labour theory of value. Marx detects deeply reactionary features also in the polemical essays against Ricardo written by English bourgeois economists of the 1820s, in their denial of the objective character of the laws of political economy, their confusion of value with price, and their abandonment of even the category of value. In Chapter XXI Marx analyses the economic views put forward by the proletarian opposition based on Ricardo (Havenstone, Hodgskin and others). Their merit, Marx points out, was that they strongly emphasised the capitalist exploitation of the workers, their view that profit, rent and interest were the surplus-labour of the workers, their polemics against the apologetic theory that capital was productive and against the conception that the capitalists accumulated means of subsistence for the workers. Along with this, Marx traced the theoretical errors in the economic views of the socialist adherents of Ricardo: their underestimation of the significance of materialised, past labour; their incorrect idea of the process of reproduction in capitalist society; their lack of comprehension of the inner connection between the fetishisation of capital and the real relations which of necessity give birth to this fetishisation, and so on. Marx shows that these socialist adherents of Ricardo were unable to pass beyond the bourgeois premises of Ricardo s theory, to reconstruct its very foundations. Chapters XXII, XXIII and XXIV are devoted to a critical analysis of the ideas of Ramsay, Cherbuliez and Richard Jones. Marx notes that they attempt to differentiate between constant and variable capital and that in this connection they conjecture on the significance of the organic composition of capital. In his critical analysis of their views Marx shows how the limits of their bourgeois horizon made it impossible for these economists to develop the germs of correct ideas which in their minds were combined with vulgar conceptions of capital and the rate of profit. The main text of Theories of Surplus-Value ends with the analysis of the views of Jones. In the plan or table of contents written by Marx on the cover of notebook XIV, after the chapter Richard Jones come the words (End of this Part 5) (see p. 38 of the present volume). There is a long appendix to Part III of Theories of Surplus-Value, entitled Revenue and Its Sources. Vulgar Political Economy . The main theme of this section, which fills the second half of notebook XV, is the problem of revenue and its sources. But along with this Marx also lays bare the class and gnosiological roots of vulgar political economy, which clings to the outward semblance of the fetishised forms of revenue and its sources, and builds on them its apologetic theories . Marx brings out the essential difference between classical and vulgar political economy. In passing, Marx criticises also the economic views of representatives of vulgar socialism. This section, therefore, although written by Marx not so much from the historical as from the theoretical point of view, bears a direct relation to the historico-critical studies in Part III of Theories of Surplus-Value, and so must be included in it as an appendix to Part III. Later on Marx wrote that the last, historico-critical volume of Capital would contain a special and comprehensive chapter on the representatives of vulgar political economy (see Marx s letter to Kugelmann, July 11, 1868). Marx formulated the essential conclusions from his deep and comprehensive analysis of the history of bourgeois political economy, in concise and generalised form, in the Afterward to the second edition of Volume I of Capital (January 1873): In so far as it is bourgeois Political Economy can remain a science only so long as the class struggle is latent or manifests itself only in isolated phenomena. He wrote of classical bourgeois political economy in England that it belongs to the period in which the class struggle was as yet undeveloped . With the development of the class struggle between the bourgeoisie and the proletariat the character of bourgeois political economy undergoes a sharp change. From the time of the conquest of political power by the bourgeoisie in France and England the class struggle, practically as well as theoretically, took on more and more outspoken and threatening forms. It sounded the knell of scientific bourgeois economy In place of disinterested inquiries, there were hired prize-fighters; in place of genuine scientific research, the bad conscience and the evil intent of apologetic . Against the background of this general degradation of bourgeois political economy the figures of a few economists stood out, who tried, as Marx says, to harmonise the political economy of capital with the claims, no longer to be ignored, of the proletariat . Such an attempt to reconcile the irreconcilable was made by John Stuart Mill. Marx notes the complete hopelessness of such attempts, which remained wholly within the bounds of bourgeois political economy and bore witness to its decay and bankruptcy. In this connection Marx strongly emphasises the outstanding significance of the great Russian scholar and critic N. G. Chernyshevsky, who in his Outlines of Political Economy According to Mill, as Marx says, has thrown the light of a master mind on the bankruptcy of bourgeois political economy. Chernyshevsky wrote his critical analysis of John Stuart Mill s book in 1860-61, that is, almost at the same time as Marx was at work on his Theories. Through all of Chernyshevsky s writings runs the idea of the need to create a new political economy, which, as opposed to former political economy which he characterised as the theory of the capitalists , he called quite explicitly the theory of the working people . To create a new, genuinely scientific political economy, involving a radical revolutionary upheaval in economic science, was possible only for the leader and teacher of the revolutionary proletariat Karl Marx. And only Marx, constructing the magnificent edifice of Capital on radically new principles, could build up that scientific history of all bourgeois political economy which he presented in the historico-critical part of his work of genius Theories of Surplus-Value. In the imperialist epoch all the contradictions of the capitalist system reach their greatest intensity, and the class struggle grows extremely sharp. This is reflected in the most acute form also in the economic fabrications of the latest apologists of capitalism. In their efforts to defend the decaying social system of the exploiters which is doomed to destruction, contemporary bourgeois economists and the pseudo-socialists who echo their views cling fast to the most reactionary of the vulgar conceptions which were put forward by their predecessors in the pre-monopoly epoch of capitalism and were subjected to annihilating criticism in Marx s Theories of Surplus-Value. Thus in contemporary bourgeois literature the old hackneyed thesis, that every increase in wages leads inevitably to higher prices, still runs its course. This thesis, the vulgar and antiscientific nature of which Marx emphasised again and again in Theories of Surplus-Value, is now used to justify the bourgeoisie s attack on the living standards of the working class. Contemporary bourgeois economists (as for example Keynes, who made a sensation with his anti-crisis projects, and his followers) shamelessly repeat the reactionary idea of Malthus, exposed by Marx, of the salutary role of the unlimited growth of unproductive consumption as a means to fight economic crises. Praise for wasteful unproductive consumption in the conditions of today sounds particularly ominous: it brings to the fore that form of unproductive consumption which is linked with the preparation of a new world war and which consumes an ever-growing share of the budgets of capitalist states. Present-day bourgeois literature, especially American, preaches in every way the theory , that only increased armaments orders, and in the final account war itself, can avert economic crises of overproduction. Malthus s population theory routed by Marx in Theories of Surplus-Value and in other works is also used to justify imperialist wars. Contemporary American and British Malthusians, (for example, Vogt in the U.S.A. and Huxley in England) preach the cannibal doctrine that only a war of annihilation can establish the appropriate balance between the number of people on the earth and the means of subsistence at their disposal. They declare that a high death-rate is a salutary factor for civilisation, and hold up as an example to all nations those countries where the death-rate reaches particularly high proportions. In fashioning their reactionary anti-scientific conceptions bourgeois economists of today rely on the outworn theories, long since exposed by Marxism, of the old vulgar political economy fabricated in the first half of the nineteenth century. They also reject the labour theory of value, and strive to replace it with vulgar theories of utility, demand and supply, costs of production, and so on. They also take their stand on the famous trinitarian formula , according to which rent is determined by nature, interest by capital, and wages by labour. Like all preachers of a general harmony in capitalist society who preceded them, they too deny the inevitability of capitalist crises, which are the necessary outcome of the internal contradictions of capitalism. In Theories of Surplus-Value Marx subjected all these apologist subterfuges of vulgar political economy to devastating criticism. This great work of Marx has for that reason outstanding importance not only for understanding the history of bourgeois political economy, but also for the struggle against the present-day representatives of bourgeois reaction, who try to revive long-routed pseudo-scientific conceptions in order to use them in their dirty trade of justifying and defending the inhuman system of imperialism, that last stage of the capitalist system which has outlived its time.

Economic Manuscripts: Theories of Surplus-Value, Preface by Institute of Marxism-Leninism

https://www.marxists.org/archive/marx/works/1863/theories-surplus-value/preface.htm

It is a great fact that the misery of the working masses has not diminished from 1848 to 1864, and yet this period is unrivaled for the development of its industry and the growth of its commerce. In 1850 a moderate organ of the British middle class, of more than average information, predicted that if the exports and imports of England were to rise 50 per cent, English pauperism would sink to zero. Alas! On April 7, 1864, the Chancellor of the Exchequer delighted his parliamentary audience by the statement that the total import and export of England had grown in 1863 to 443,955,000 pounds! That astonishing sum about three times the trade of the comparatively recent epoch of 1843! With all that, he was eloquent upon poverty . Think, he exclaimed, of those who are on the border of that region, upon wages... not increased ; upon human life... in nine cases out of ten but a struggle of existence! He did not speak of the people of Ireland, gradually replaced by machinery in the north and by sheepwalks in the south, though even the sheep in that unhappy country are decreasing, it is true, not at so rapid a rate as the men. He did not repeat what then had been just betrayed by the highest representation of the upper ten thousand in a sudden fit of terror. When garrote panic had reached a certain height the House of Lords caused an inquiry to be made into, and a report to be published upon, transportation and penal servitude. Out came the murder in the bulky Blue Book of 1863 and proved it was, by official facts and figures, that the worst of the convicted criminals, the penal serfs of England and Scotland, toiled much less and fared far better than the agricultural laborers of England and Scotland. But this was not all. When, consequent upon the Civil War in America, the operatives of Lancashire and Cheshire were thrown upon the streets, the same House of Lords sent to the manufacturing districts a physician commissioned to investigate into the smallest possible amount of carbon and nitrogen, to be administered in the cheapest and plainest form, which on an average might just suffice to avert starvation diseases . Dr. Smith, the medical deputy, ascertained that 28,000 grains of carbon and 1,330 grains of nitrogen were the weekly allowance that would keep an average adult... just over the level of starvation diseases, and he found furthermore that quantity pretty nearly to agree with the scanty nourishment to which the pressure of extreme distress had actually reduced the cotton operatives (1). But now mark! The same learned doctor was later on again deputed by the medical officer of the Privy Council to enquire into the nourishment of the poorer laboring classes. The results of his research are embodied in the Sixth Report on Public Health , published by order of Parliament in the course of the present year. What did the doctor discover? That the silk weavers, the needlewomen, the kid glovers, the stock weavers, and so forth, received on an average, not even the distress pittance of the cotton operatives, not even the amount of carbon and nitrogen just sufficient to avert starvation diseases . The report brings out the strange and rather unexpected fact: Such are the official statements published by order of Parliament in 1864, during the millennium of free trade, at a time when the Chancellor of the Exchequer told the House of Commons that Upon these official congratulations jars the dry remark of the official Public Health Report: Dazzled by the Progress of the Nation statistics dancing before his eyes, the Chancellor of the Exchequer exclaims in wild ecstasy: If you want to know under what conditions of broken health, tainted morals, and mental ruin that intoxicating augmentation of wealth and power... entirely confined to classes of property was, and is, being produced by the classes of labor, look to the picture hung up in the last Public Health Report of the workshops of tailors, printers, and dressmakers! Compare the Report of the Children s Employment Commission of 1863, where it states, for instance, that Glance at Mr. Tremenheere s Blue Book of the Grievances Complained of by the Journeymen Bakers ! And who has not shuddered at the paradoxic made by the inspectors of factories, and illustrated by the Registrar General, that the Lancashire operatives, while put upon the distress pittance of food, were actually improving in health, because of their temporary exclusion by the cotton famine from the cotton factory, and the mortality of the children was decreasing, because their mothers were now at last allowed to give them, instead of Godrey s cordial, their own breasts. Again, reverse the medal! The income and property tax returns laid before the House of Commons on July 20, 1864, teach us that the persons with yearly incomes valued by the tax gatherer of 50,000 pounds and upwards had, from April 5, 1862, to April 5, 1863, been joined by a dozen and one, their number having increased in that single year from 67 to 80. The same returns disclose the fact that about 3,000 persons divide among themselves a yearly income of about 25,000,000 pounds sterling, rather more than the total revenue doled out annually to the whole mass of the agricultural laborers of England and Wales. Open the census of 1861 and you will find that the number of male landed proprietors of England and Wales has decreased from 16,934 in 1851 to 15,066 in 1861, so that the concentration of land had grown in 10 years 11 per cent. If the concentration of the soil of the country in a few hands proceeds at the same rate, the land question will become singularly simplified, as it had become in the Roman Empire when Nero grinned at the discovery that half of the province of Africa was owned by six gentlemen. We have dwelt so long upon these facts so astonishing to be almost incredible because England heads the Europe of commerce and industry. It will be remembered that some months ago one of the refugee sons of Louis Philippe publicly congratulated the English agricultural laborer on the superiority of his lot over that of his less florid comrade on the other side of the Channel. Indeed, with local colors changed, and on a scale somewhat contracted, the English facts reproduce themselves in all the industrious and progressive countries of the Continent. In all of them there has taken place, since 1848, an unheard-of development of industry, and an unheard-of expansion of imports and exports. In all of them, as in England, a minority of the working classes got their real wages somewhat advanced; while in most cases the monetary rise of wages denoted no more a real access of comforts than the inmate of the metropolitan poorhouse or orphan asylum, for instance, was in the least benefited by his first necessaries costing 9 15s. 8d. in 1861 against 7 7s. 4d. in 1852. Everywhere the great mass of the working classes were sinking down to a lower depth, at the same rate at least that those above them were rising in the social scale. In all countries of Europe it has now become a truth demonstrable to every unprejudiced mind, and only decried by those whose interest it is to hedge other people in a fool s paradise, that no improvement of machinery, no appliance of science to production, no contrivances of communication, no new colonies, no emigration, no opening of markets, no free trade, not all these things put together, will do away with the miseries of the industrious masses; but that, on the present false base, every fresh development of the productive powers of labor must tend to deepen social contrasts and point social antagonisms. Death of starvation rose almost to the rank of an institution, during this intoxicating epoch of economical progress, in the metropolis of the British empire. That epoch is marked in the annals of the world by the quickened return, the widening compass, and the deadlier effects of the social pest called a commercial and industrial crisis. After the failure of the Revolution of 1848, all party organizations and party journals of the working classes were, on the Continent, crushed by the iron hand of force, the most advanced sons of labor fled in despair to the transatlantic republic, and the short-lived dreams of emancipation vanished before an epoch of industrial fever, moral marasm, and political reaction. The defeat of the continental working classes, partly owed to the diplomacy of the English government, acting then as now in fraternal solidarity with the Cabinet of St. Petersburg, soon spread its contagious effects to this side of the Channel. While the rout of their continental brethren unmanned the English working classes, and broke their faith in their own cause, it restored to the landlord and the money lord their somewhat shaken confidence. They insolently withdrew concessions already advertised. The discoveries of new gold lands led to an immense exodus, leaving an irreparable void in the ranks of the British proletariat. Others of its formerly active members were caught by the temporary bribe of greater work and wages, and turned into political blacks . All the efforts made at keeping up, of remodeling, the Chartist movement failed signally; the press organs of the working class died one by one of the apathy of the masses, and in point of fact never before seemed the English working class so thoroughly reconciled to a state of political nullity. If, then, there had been no solidarity of action between the British and the continental working classes, there was, at all events, a solidarity of defeat. And yet the period passed since the Revolutions of 1848 has not been without its compensating features. We shall here only point to two great factors. After a 30 years struggle, fought with almost admirable perseverance, the English working classes, improving a momentaneous split between the landlords and money lords, succeeded in carrying the Ten Hours Bill. The immense physical, moral, and intellectual benefits hence accruing to the factory operatives, half-yearly chronicled in the reports of the inspectors of factories, are now acknowledged on all sides. Most of the continental governments had to accept the English Factory Act in more or less modified forms, and the English Parliament itself is every year compelled to enlarge its sphere of action. But besides its practical import, there was something else to exalt the marvelous success of this workingmen s measure. Through their most notorious organs of science, such as Dr. Ure, Professor Senior, and other sages of that stamp, the middle class had predicted, and to their heart s content proved, that any legal restriction of the hours of labor must sound the death knell of British industry, which, vampirelike, could but live by sucking blood, and children s blood, too. In olden times, child murder was a mysterious rite of the religion of Moloch, but it was practiced on some very solemn occassions only, once a year perhaps, and then Moloch had no exclusive bias for the children of the poor. This struggle about the legal restriction of the hours of labor raged the more fiercely since, apart from frightened avarice, it told indeed upon the great contest between the blind rule of the supply and demand laws which form the political economy of the middle class, and social production controlled by social foresight, which forms the political economy of the working class. Hence the Ten Hours Bill was not only a great practical success; it was the victory of a principle; it was the first time that in broad daylight the political economy of the middle class succumbed to the political economy of the working class. But there was in store a still greater victory of the political economy of labor over the political economy of property. We speak of the co-operative movement, especially the co-operative factories raised by the unassisted efforts of a few bold hands . The value of these great social experiments cannot be overrated. By deed instead of by argument, they have shown that production on a large scale, and in accord with the behests of modern science, may be carried on without the existence of a class of masters employing a class of hands; that to bear fruit, the means of labor need not be monopolized as a means of dominion over, and of extortion against, the laboring man himself; and that, like slave labor, like serf labor, hired labor is but a transitory and inferior form, destined to disappear before associated labor plying its toil with a willing hand, a ready mind, and a joyous heart. In England, the seeds of the co-operative system were sown by Robert Owen; the workingmen s experiments tried on the Continent were, in fact, the practical upshot of the theories, not invented, but loudly proclaimed, in 1848. At the same time the experience of the period from 1848 to 1864 has proved beyond doubt that, however, excellent in principle and however useful in practice, co-operative labor, if kept within the narrow circle of the casual efforts of private workmen, will never be able to arrest the growth in geometrical progression of monopoly, to free the masses, nor even to perceptibly lighten the burden of their miseries. It is perhaps for this very reason that plausible noblemen, philanthropic middle-class spouters, and even keep political economists have all at once turned nauseously complimentary to the very co-operative labor system they had vainly tried to nip in the bud by deriding it as the utopia of the dreamer, or stigmatizing it as the sacrilege of the socialist. To save the industrious masses, co-operative labor ought to be developed to national dimensions, and, consequently, to be fostered by national means. Yet the lords of the land and the lords of capital will always use their political privileges for the defense and perpetuation of their economic monopolies. So far from promoting, they will continue to lay every possible impediment in the way of the emancipation of labor. Remember the sneer with which, last session, Lord Palmerston put down the advocated of the Irish Tenants Right Bill. The House of Commons, cried he, is a house of landed proprietors. To conquer political power has, therefore, become the great duty of the working classes. They seem to have comprehended this, for in England, Germany, Italy, and France, there have taken place simultaneous revivals, and simultaneous efforts are being made at the political organization of the workingmen s party. One element of success they possess numbers; but numbers weigh in the balance only if united by combination and led by knowledge. Past experience has shown how disregard of that bond of brotherhood which ought to exist between the workmen of different countries, and incite them to stand firmly by each other in all their struggles for emancipation, will be chastised by the common discomfiture of their incoherent efforts. This thought prompted the workingmen of different countries assembled on September 28, 1864, in public meeting at St. Martin s Hall, to found the International Association. Another conviction swayed that meeting. If the emancipation of the working classes requires their fraternal concurrence, how are they to fulfill that great mission with a foreign policy in pursuit of criminal designs, playing upon national prejudices, and squandering in piratical wars the people s blood and treasure? It was not the wisdom of the ruling classes, but the heroic resistance to their criminal folly by the working classes of England, that saved the west of Europe from plunging headlong into an infamous crusade for the perpetuation and propagation of slavery on the other side of the Atlantic. The shameless approval, mock sympathy, or idiotic indifference with which the upper classes of Europe have witnessed the mountain fortress of the Caucasus falling a prey to, and heroic Poland being assassinated by, Russia: the immense and unresisted encroachments of that barbarous power, whose head is in St. Petersburg, and whose hands are in every cabinet of Europe, have taught the working classes the duty to master themselves the mysteries of international politics; to watch the diplomatic acts of their respective governments; to counteract them, if necessary, by all means in their power; when unable to prevent, to combine in simultaneous denunciations, and to vindicate the simple laws or morals and justice, which ought to govern the relations of private individuals, as the rules paramount of the intercourse of nations. The fight for such a foreign policy forms part of the general struggle for the emancipation of the working classes. Proletarians of all countries, unite!

Inaugural Address of the International Working Men's Association

https://www.marxists.org/archive/marx/works/1864/10/27.htm

As evidence that the pompous vanity of Herr Karl Blind occasionally propels Herr Karl Blind beyond the bounds of pure comedy, you make mention of my work against Vogt. From Blind's reply you and your readers must draw the conclusion that the accusations made in that work against Herr Karl Blind have been settled by "statements from all concerned". In actual fact since the appearance of my work, that is for four years, the otherwise so prolific Herr Karl Blind has never once dared to "return to the old dispute" with so much as a word, much less with "statements from all concerned". On the contrary, Herr Karl Blind has been content to remain branded an "infamous liar" (see pp. 66, 67 of my work). Herr Karl Blind has repeatedly declared in public that he did not know by whom the leaflet against Vogt had been cast into the world, that "he had absolutely no part in the affair", etc. In addition, Herr Karl Blind published a statement by the printer Fidelio Hollinger, flanked by another statement by the compositor Wiehe, to the effect that the leaflet had neither been printed in Hollinger's printing-shop nor had it emanated from Herr Karl Blind. In my work against Vogt may be found the affidavits (statements made under oath) of the compositor V gele and of Wiehe himself made before the Bow Street Magistrates Court, London, proving that the same Herr Karl Blind wrote the manuscript of the leaflet, had it printed by Hollinger, personally corrected the proofs, fabricated a false certificate to refute these facts, and deviously obtained the signature of the compositor Wiehe for this false certificate by proffering promises of money from Hollinger, and future gratitude on his own part, and finally sent this false document fabricated by himself, along with the signature he himself had dishonestly obtained, to the Augsburg Allgemeine and other German newspapers as morally outraged evidence of my "malicious invention". Thus publicly pilloried, Herr Karl Blind kept silent. Why? Because (see p. 69 of my work) he could only refute the affidavits by me by means of counter-affidavits, but he found himself "under the grave jurisdiction of England", where "felony is no joining matter". In the aforementioned letter to your newspaper there are also some strange statements about Herr Karl Blind's American industriousness. In order to clear up this point allow me to cite an extract from a letter from J. Weydemeyer that arrived here a few days ago. You will recall that J. Weydemeyer used to edit the Neue Deutsche Zeitung in Frankfurt along with O. Luning, and was always one of the most stalwart champions of the German workers' party. Shortly after the outbreak of the American Civil War he entered the ranks of the Federals. Summoned by Fremont to St. Louis, he served initially as a captain in the Engineer Corps there, then as lieutenant-colonel in an artillery regiment, and when Missouri was again recently threatened with enemy invasion, he was suddenly given the task of organising the 41st Missouri Volunteer Regiment, which he now commands with the rank of colonel. Weydemeyer writes from St. Louis, the capital of Missouri, where his regiment is stationed, as follows: A comparison of the two versions of Blind's clumsy handiwork would show how the same Herr Karl Blind, while protesting in Frankfurt and London with a respectable, republican, Cato-like woeful countenance, simultaneously gives free rein in far-off St. Louis to the most malicious idiocy and the vilest impudence. A comparison of the two versions of the "Protest", for which there is no space here, would also result in a new amusing contribution to the method of fabricating letters, circulars, leaflets, protests, provisos, defences, proclamations, appeals, and other similar head-shakingly solemn Blindian political recipes, from which there is as little chance of escaping as from Mr. Holloway's pills or Mr. Hoff's malt extract. Nothing could be further from my mind than to seek to explain a man such as Lassalle and the real tendency of his agitation to a grotesque Mazzini-Scapin with nothing behind him but his own shadow. On the contrary, I am convinced that Herr Karl Blind is only fulfilling the calling imposed on him by nature and by Aesop in stepping behind the dead lion. Karl Marx 1, Modena Villas Maitland Park November 28, 1864 1, Modena Villas, Maitland Park, Haverstock Hill, London I have sent the same statement in the same form as a letter to the Stuttgart Beobachter to some Prussian newspapers for publication, and will also arrange for it to be reproduced in a German newspaper here so that responsibility for it rests solely with me.

The International Workingmen's Association, Letter to the Beobachter

https://www.marxists.org/archive/marx/works/1864/11/28.htm

This piece of medieval peasant war takes place in the S der Harde (harde means judicial district) north of Aarhus in Jutland. The Thing, the assembled court of the district, handled questions of taxation and administration, as well as court matters. The song shows how the rising nobility confronted the edelings, i.e. the free peasants, and also how the peasants put an end to the nobility s arrogance. In a country like Germany, where the propertied class includes as much feudal nobility as bourgeoisie, and the proletariat includes as many agricultural labourers as industrial workers, if not more the zestful old peasant song will be eminently apposite.

Herr Tidmann (1865)

https://www.marxists.org/archive/marx/works/1864/12/27.htm

This circular course taken by our presentation, on the one hand, corresponds to the historical development of capital, one of the conditions for the emergence of which is the exchange of commodities trade in commodities; but this condition itself is formed on the basis provided by a number of different stages of production which all have in common a situation in which capitalist production either does not as yet exist at all or exists only sporadically. On the other hand, the exchange of commodities in its full development and the form of the commodity as the universally necessary social form of the product first emerge as a result of the capitalist mode of production. If, in contrast, we consider societies where capitalist production is fully developed, the commodity appears there as both the constant elementary presupposition of capital and, on the other hand, as the direct result of the capitalist production process. Both commodities and money are the elementary presuppositions of capital, but they only develop into capital under certain conditions. Capital formation cannot occur except on the basis of the circulation of commodities (which includes the circulation of money), hence at an already given stage of development of trade in which the latter has achieved a certain extension. The production and circulation of commodities, however, do not conversely presuppose the capitalist mode of production for their existence; on the contrary, as I have already demonstrated, they also exist in pre-bourgeois social formations . They are the historical presupposition of the capitalist mode of production. On the other hand, however, it is only on the basis of capitalist production that the commodity becomes the general form of the product, that every product must take on the commodity form, that sale and purchase seize control not only of the surplus of production but of its very substance, and that the various conditions of production themselves emerge in their totality as commodities which go into the production process from circulation. Hence if the commodity appears on the one hand as the presupposition for the formation of capital, the commodity also appears, on the other hand, as essentially the product and result of the capitalist production process, in so far as it is the universal elementary form of the product. At earlier stages of production, products assume the commodity form in part. Capital, in contrast, necessarily produces its product as a commodity. [Sismondi] Therefore, to the degree that capitalist production, i.e. capital, develops, the general laws developed with regard to the commodity for example, the laws concerning value are also realised in the different forms of money circulation. Here, it is apparent how even economic categories which belong to earlier epochs of production take on a specifically different, historical, character on the basis of the capitalist mode of production. The conversion of money, which is itself only a converted form of the commodity, into capital only takes place once labour capacity has been converted into a commodity for the worker himself; hence once the category of commodity trade has taken control of a sphere which was previously excluded from it, or only sporadically included in it. Only when the working population has ceased either to form part of the objective conditions of labour, or to enter the market as a producer of commodities, selling its labour itself or more precisely its labour capacity instead of the product of its labour, does production become the production of commodities to its complete extent, over the whole of its length and breadth. Only then are all products converted into commodities, and only then do the objective conditions of each individual sphere of production enter into production as commodities themselves. Only on the basis of capitalist production does the commodity in fact become the universal elementary form of wealth. If, e.g., capital has not yet taken control of agriculture, a large part of the product is still produced directly as means of subsistence, not as commodities; a large part of the working population will not yet have been converted into wage labourers, nor will a large part of the conditions of labour have been converted into capital. This implies that the developed division of labour, as it appears accidentally within society, and the capitalist division of labour within the workshop, condition and produce each other. For the commodity as the necessary form of the product, and therefore the alienation of the product as the necessary form of its appropriation, imply a fully developed division of social labour, while on the other hand it is only on the basis of capitalist production, hence also of the capitalist division of labour within the workshop, that. all products necessarily assume the commodity form, and all producers are therefore necessarily commodity producers. It is therefore only with the coming of capitalist production that use value is first generally mediated through exchange value. From this point of view the form in which the conditions of production themselves enter into the labour process is also entirely irrelevant. E.g. it is a matter of indifference whether they only give up their value to the product gradually, as in the case of a part of the constant capital, machinery, etc., or enter into it materially, as with the raw material; whether, as in the case of the seed in agriculture, a part of the product is directly re-employed by the producer himself as a means of labour, or is first sold and then converted afresh into a means of labour. Whatever their role as use values in the production process, all the means of labour that have been produced now function at the same time as elements in the valorisation process. To the extent that they are not converted into real money, they are converted into money of account, they are treated as exchange values, and the value element they add to the product in one way or another is precisely calculated. In the same measure as e.g. agriculture becomes a branch of industry carried on in the capitalist fashion as capitalist production settles itself down in the country in the same measure as agriculture produces for the market, produces commodities articles for sale and not for its own direct consumption, in that measure does it calculate its expenditure, treat each item of it as a commodity (whether it buys from another or from itself, i.e. from production), and therefore to the extent that the commodity is treated as independent exchange value as money. Therefore since wheat, hay, cattle, seed of all kinds, etc., are sold as commodities and without being sold they do not count as products at all they enter into production as commodities, or, respectively, as money. The conditions of production, the elements of products, naturally become commodities in the same measure as the products do for they are identical with the products and in so far as the valorisation process comes into consideration they are calculated in the independent form of exchange value, as monetary magnitudes. The direct production process is here always and inseparably a labour process and a valorisation process just as the product is a unity of use value and exchange value, i.e. a commodity. Leaving aside this formal aspect, we can say that in the same measure as e.g. the farmer s purchases of what he has to lay out expand, so also does the trade in seed, in manure, in breeding cattle, etc. whereas he sells his income. Thus for the individual farmer these conditions of production also pass in actuality out of circulation and enter into his production process; circulation becomes in effect the presupposition of his production, since the conditions of production increasingly become commodities really bought (or purchasable). In any case, for him they are already commodities, as articles, means of labour, which form at the same time parts of the value of his capital. (Hence if he returns them in natura to production he reckons them as having been sold to him qua the producer.) And indeed this develops in the same proportion as the capitalist mode of production develops in agriculture; hence in proportion as it is carried on increasingly in a factory-like fashion. The character of the commodity as the universally necessary form of the product, as the specific peculiarity of the capitalist mode of production, is palpably demonstrated in the large scale of production, the one-sidedness and the massive nature of the product brought about with the development of capitalist production. This mode of production imposes on the product a character which is social and is firmly bound up with the social context, while making its direct relation as use value to the satisfaction of the producer s needs appear, in contrast, as something wholly accidental, irrelevant and inessential. This mass product must be realised as exchange value, it must pass through the metamorphosis of the commodity, not only as a necessity for the subsistence of the producer who produces as a capitalist, but also as a necessity for the renewal and continuity of the production process itself. And this is why it passes into the sphere of trade. Its buyer is not the direct consumer but the merchant, who effects the metamorphosis of the commodity as a business in its own right. [Sismondi] The product finally develops its character as a commodity, and hence its character as exchange value, because under capitalist production the number of different spheres of production, hence the spheres of the product s exchangeability, are constantly multiplied. [We proceed from the commodity, this specific social form of the product, as the basis and the presupposition of capitalist production. We take the individual product into our hands and analyse the formal determinations it contains as a commodity, which mark it out as a commodity. Before capitalist production, a large part of the products was not produced as commodities, not to serve as commodities; while, conversely, a large part of the products which entered production did not do so as commodities, did not enter the production process as commodities. The conversion of products into commodities only occurs at individual points, is limited only to the surplus of production, or only to individual spheres of production (the products of manufacture), etc. The whole range of products neither enters into the process as articles of trade, nor does it emerge from it as such. [see the French work of about 1752 in which it is asserted that corn was never regarded as an article of trade in France before . ] Nevertheless, commodity circulation, and money circulation within certain limits, hence a certain degree of development of trade, are the presupposition, the starting point of capital formation and the capitalist mode of production. It is as such a presupposition that we treat the commodity, since we proceed from it as the simplest element in capitalist production. On the other hand, the commodity is the product, the result of capitalist production. What appears first as its element is later revealed to be its own product. Only on the basis of capitalist production does the commodity become the universal form of the product, and the more this production develops, the more do all the ingredients of production enter into the production process as commodities.] The commodity as it emerges from capitalist production is determined differently from the commodity as it was at the starting point, as the element, the presupposition, of capitalist production. We started with the individual commodity as an independent article in which a specific quantity of labour time was objectified, and which therefore had an exchange value of a given magnitude. Henceforth the commodity appears in a dual determination: We saw earlier that the commodity must acquire a double mode of existence in order to be made fit for circulation. Not only must it confront the buyer as an article with particular useful qualities, as a particular use value which satisfies particular needs, whether of individual or of productive consumption. Its exchange value must have acquired a form different and distinct from its use value, independent of it, although only notionally. It must appear as the unity of use value and exchange value, but at the same time it must appear as this duality. Its exchange value acquires this independent form, a form entirely independent of its use value, as the pure existence of materialised social labour time, in its price, that expression in which exchange value is expressed as exchange value, i.e. as money; and indeed it is expressed in this way in money of account. There are in fact individual commodities, as for example railways, large buildings, etc., which are on the one hand so continuous in their nature, and on the other hand so extensive, that the entire product of the capital advanced appears as one single commodity. In this field, therefore, the law demonstrated in relation to single commodities would apply, namely that their price is nothing but their value expressed in money. The total value of the capital + the surplus value would be contained in the single commodity, and could be expressed in money of account. The price determination of a commodity of this kind would not differ from that given earlier for the single commodity, because here the total product of the capital would really be present as a single commodity. It is therefore unnecessary to discuss this point any further. The majority of commodities, however, are discrete in nature (and even the continuous ones can in most cases be treated notionally as discrete magnitudes), i.e., considered as amounts of a given article, they are divisible according to the measures customarily applied to them as specific use values, e.g. a quarters of wheat, b centners of coffee, c yards of linen, x dozens of knives in this case the individual commodity itself counts as the unit of measurement, etc. We now have to look at the total product of the capital, which can always be considered as a single commodity, whatever its scale, and whether it is discrete or continuous; it can be considered as a single use value, and its exchange value therefore also appears in the total price as the expression of the total value of this total product. When the valorisation process was examined, it was shown that a part of the constant capital advanced, such as buildings, machines, etc., gives up to the product only the specific quantities of value it loses in the labour process as means of labour, and that it never enters into the product materially, in the form of its own use value. It was also shown that it continues to serve in the labour process over a long period, and that the part of the value that it gives up over a particular period of time to the product produced during that period can be estimated according to the ratio between that particular period and the total period during which it is used up as a means of labour, thereby losing its total value and transferring its total value to the product. E.g. if it serves for 10 years, a calculation of the average will show that it gives up 1/10 of its value to the product in one year, and adds 1/10 of its value to the annual product of the capital. In so far as this part of the constant capital continues to serve as a means of labour, after disposing of a given quantity of products, and to represent a definite value, according to the average estimate indicated above, it does not enter into the formation of the value of the products that have been disposed of. In general, its total value is only a determinant of the value of the products disposed of, the products for the production of which it has already served, in so far as the value given up by it during a particular period of time is estimated as an aliquot part of its total value, determined by the ratio between the period of time during which it has served and given up a part of its value and the total period of time during which it serves and gives up its total value to the product. For the rest, the value it continues to have does not come into consideration when the value of the amount of commodities already disposed of is estimated. It can therefore be set at nothing in relation to this amount. Or, and this comes to the same thing, the matter can be regarded, for the sake of simplification, for the present purpose, as if the total capital, including the part of the constant capital which only enters completely into the product over long periods of production, were entirely contained, dissolved, in the product of the total capital which we are about to consider. Let us assume that the total product = 1,200 yards of linen. Let the capital advanced be = 100, of which 80 represents constant capital, and 20 variable capital, and let the rate of surplus value be = 100%, so that the worker works half the working day for himself, and the other half for the capitalist, without receiving payment. In this case, the surplus value that has been produced = 20, and the total value of the 1,200 yards = 120, 80 of which represents value added by the constant capital, and 40 newly added labour. Half of the latter replaces the wage, the other half represents surplus labour or forms surplus value. Since the elements of capitalist production, only excepting the newly added labour, already enter into the production process as commodities, hence with specific prices, the value added by the constant capital is already given as a price, e.g. in the above example it is 80 for flax, machines, etc. But as regards the newly added labour, if the wage determined by the necessary means of subsistence = 20, and the surplus labour is of the same amount as the paid labour, it must be expressed in a price of 40, since the value in which the [newly] added labour is expressed depends on its quantity but not by any means on the situation in which it is paid. The total price of the 1,200 yards produced by the capital of 100 therefore = 120. How in this case is the value of the individual commodity to be determined, here the value of a yard of linen? Evidently by dividing the total price of the total product by the number of individual products as they result from a division of the product into aliquot parts according to measurements which are given. The total price of the product must be divided by the number of products; there use value provides the yardstick, hence in this case it is 120/1,200 yards. This gives a price of 2s. for the individual yard of linen. If the yard which serves as the measure of the linen is now further developed as a yardstick, by subdividing it into smaller aliquot portions, this will make it possible to go further, and to determine the price of half a yard, and so on. Thus the price of the individual commodity is determined by calculating its use value as an aliquot part of the total product and its price as a corresponding aliquot part of the total value brought forth by the capital. We have seen that in accordance with the different levels of productivity or productive power of labour the same labour time will be expressed in very diverse amounts of produce, or an exchange value of equal magnitude will be expressed in entirely different quantities of use value. In the case under consideration, assume that the productivity of linen weaving increases fourfold. The constant capital, flax, machines, etc., that was set in motion by the labour expressed in 40 was = 80. If the productivity of weaving labour were to increase fourfold, it would set in motion 4 times as much constant capital; thus 320 s worth of flax, etc. And the number of yards would increase fourfold, it would grow from 1,200 to 4,800. The newly added weaving labour, however, would continue to be expressed in 40, since the quantity of labour would have remained unchanged. The total price of the 4,800 yards therefore now = 360, and the price of a single yard = 360 /4,800 Yards = 1 1/2 s. The price of at single would have fallen by 1/4, from 2s., or 24d., to 1 1/2 s. or 18d., because the constant capital contained in the yard would have absorbed 1/4 less additional living labour during its conversion into linen, or the same quantity of weaving labour would have been distributed over a greater quantity of product. Even so, our present purpose is still better served if we take an example in which the total capital advanced remains the same, but the productive power of labour is expressed in very diverse quantities of the same use value, e.g. wheat, merely as a result of natural conditions, e.g. seasonable or unseasonable weather. Let us assume that the quantity of labour spent upon an acre of land, e.g. in the production of wheat, is expressed in 7, of which 4 is newly added labour, and 3 represents labour already objectified in constant capital. Let 2 of the 4 be wages and 2 surplus labour, in line with the ratio already presupposed of surplus labour / necessary labour = 100/100. But let the crop vary according to the variations in the seasons. [J. Arbuthnot, An Inquiry into the Connection etc. By a Farmer, London, 1773, p. 108.] The value or the price of the total product of the capital of 5 advanced for 1 acre always remains the same here, 7, since the amount of objectified and newly added living labour advanced remains constant. But this same labour is expressed in very different numbers of quarters, and the single quarter, the same aliquot part of the total product, therefore has very diverse prices. This variation in the prices of the individual commodities produced with the same capital does not however lead to any change at all in the rate of surplus value, in the ratio of surplus value to variable capital, or in the proportion in which the total working day is divided into paid and unpaid labour. The total value in which the newly added labour is expressed remains the same, because the same quantity of living labour as before is added to the constant capital, and the proportion between the surplus value and the wage, or between the paid and the unpaid labour, remains the same whether the yard, owing to differences in the productivity of labour, costs 2s. or 1 1/2 s. What has altered in regard to the individual yard is the total quantity of weaving labour added to it; but the proportion in which this total quantity is divided into paid and unpaid labour remains the same for each aliquot part whether larger or smaller of this total quantity which is contained in the individual yard. Similarly, under the given presupposition, in the second case with a decline in the productivity of labour a rise in the price of the quarter [of wheat], the fact that the newly added labour is distributed over fewer quarters, with a greater quantity of newly added labour therefore falling to the share of the individual quarter, would make absolutely no difference to the proportion in which this larger or smaller quantity of labour absorbed by the individual quarter is divided between paid and unpaid labour. Nor does it make any difference, either to the total surplus value the capital has produced, or to the aliquot part of the surplus value contained in the value of the individual quarter, in relation to the value newly added to it. If under the given presuppositions more living labour is added to a specific quantity of the means of labour, more paid and more unpaid labour is added to it in identical proportions; if less living labour is added, less paid and less unpaid labour is added, again in identical proportions, but the ratio between these two components of the newly added labour remains unchanged. Leaving aside a number of distorting influences, which it is not relevant to consider for the present purpose, it is the tendency and the result of the capitalist mode of production continuously to raise the productivity of labour, hence continuously to increase the amount of the means of production converted into products with the same additional labour, continuously to distribute the newly added labour over a greater quantity of products, so to speak, and therefore to reduce the price of the individual commodity, or to cheapen commodity prices in general. But in and for itself this cheapening of commodity prices involves absolutely no change, either in the amount of surplus value produced by the same variable capital, or in the proportional division of the newly added labour contained in the individual commodity into paid and unpaid, or in the rate of surplus value realised in the individual commodity. If the conversion of a specific quantity of flax, spindles, etc., into a yard of linen absorbs less of the weaver s labour than before, this does not in the least alter the proportional division of this greater or lesser amount of labour into paid and unpaid. The absolute quantity of living labour added afresh to a given quantity of already objectified labour does not affect the proportion in which this amount, which can be larger or smaller according to the particular commodity, is divided into paid and unpaid labour. In spite of the variation in commodity prices arising out of a variation in the productive power of labour, i.e. a reduction in these commodity prices and a cheapening of the commodity, the proportion between paid and unpaid labour, and altogether the rate of surplus value realised by capital, may therefore remain constant. If a variation occurs, not in the productive power of the labour newly added to the means of labour, but in the productive power of the labour that creates the means of labour, the price of which will accordingly rise or fall, it is equally clear that the variation thus effected in the prices of the commodities would not alter the unchanging division of the additional living labour contained in them into. paid and unpaid labour. Conversely. If variation in the prices of commodities does not exclude a constant rate of surplus value, an unchanging division of the additional labour into paid and unpaid, constancy in the prices of commodities does not exclude variation in the rate of surplus value, changes in the proportional division of the newly added labour into paid and unpaid. In order to simplify matters let us assume that, in the branch of labour under discussion, no variation takes place in the productive power of any of the labour contained in it hence in the above case, for example, there is no variation in the productivity of weaving labour or the labour that provides the flax, the spindles, etc. On the above assumption, 80 is laid out in constant capital, 20 in variable capital. This 20 is supposed to express the 20 days (e.g. weekdays) of 20 weavers. According to our presupposition, they produced 40, hence worked half a day for themselves and half a day for the capitalist. But it is further posited that the working day was = 10 hours, and is now extended to 12, so that the surplus labour is increased by 2 hours per man. The total working day would have grown by 1/5, from 10 hours to 12. Since 10:12 = 16 2/3:20, no more than 16 2/3 weavers would now be necessary to set in motion the same constant capital of 80, hence to produce 1,200 yards of linen. (For 20 men working 10 hours account for a total of 200 hours, and 16 2/3 men working 12 hours also account for 200 hours.) Or, if we keep the 20 workers as before, they will now add 240 hours of labour instead of the previous 200 hours. And since the value of 200 hours per day per week is expressed in 40, the value of 240 hours per day per week would be expressed in 48. But since the productive power of labour, etc., has remained the same, and since there are 80 of constant capital for 40 [of variable], there would be 96 of constant capital for 48 [of variable]. The capital advanced would therefore amount to 116, and the commodity, value produced by it would = 144. But since 120 = 1,200 yards, 128 = 1,280 yards. A single yard would therefore cost 128 / 1,280 = 1/10 = 2s. The price of the single yard would be unchanged, because it would still cost the same total quantity of weaving labour newly added and labour objectified in the means of labour. The surplus value contained in each yard, however, would have grown. Previously there was 20 of surplus value for 1,200 yards, hence 4d. for one yard ( 20 /1,200 = ( 2/120 = 1/60 = 1/3 s. = 4d.). Now there is 28 [of surplus value] for 1,280 yards, [and one yard] now [contains] 5 1/4d. [of surplus value], since 5 1/4d. x 1,280 = 28, which is the actual total of the surplus value contained in the 1,280 yards. Similarly, the additional 8 of surplus value are = 80 yards (at 2s. per yard), and in fact the number of yards has risen from 1,200 to 1,280. Here, then, the price of the commodity remains the same; the productive power of labour remains the same. The amount of capital laid out in wages remains the same. Nevertheless, the total amount of surplus value rises from 20 to 28, or by 8, which is 2/5 of 20; since 8x 5/2 = 40/2 = 20, it has risen by 40%. This is the percentage by which the total surplus value has grown. But as far as the rate of surplus value is concerned, it was originally 100% and is now 140%. These blasted figures can be corrected later. For the moment it is enough to say that surplus value grows where commodity prices remain constant because the same amount of variable capital sets in motion more labour, and therefore produces not only more commodities of the same price, but more commodities containing more unpaid labour. The correct calculation is shown in the following comparison. But first certain additional prefatory remarks need to be made: If 20 v originally = 20 ten-hour days (which one can multiply by 6 to arrive at weeks, without changing matters) and if the working day = 10 hours, the total amount of labour = 200 hours. If the day is prolonged from 10 to 12 hours (and surplus labour from 5 to 7) the total labour of the 20 = 240 hours. If 200 hours of labour are represented in 40, 240 are represented in 48. If 200 hours set a constant capital of 80 in motion, 240 will set in motion a capital of 96. If 200 hours produce 1,200 yards, 240 hours, in contrast, will produce 1,440 yards. And now the comparison follows: Let us now assume the opposite, that the working day remains the same, = 10 hours, but that as a result of an increase in the productivity of labour, an increase which takes place not in the constant capital that employs the weaving labour, nor in this labour itself, but rather in other branches of industry, the products of which enter into the wage, necessary labour is reduced from 5 to 4 hours. Then the workers would work 6 hours for the capitalist instead of 5 as before, and 4 for themselves instead of 5. The ratio of surplus labour to necessary labour was 5:5 = 100/100, 100%; but now it is 6:4 = 150:100 = 150%. 20 men continue to be employed for 10 hours, = 200 hours [altogether]; they continue to set in motion the same constant capital of 80. The value of the total product continues to be 120, the number of yards = 1,200, the price of the yard = 2s. The reason is that nothing at all has changed in the prices of production. The total product (in value) of 1 [worker] was 2, and of 20 was 40. But if at 5 hours a day the week = 20, 4 = 16, and he buys the same quantity of means of subsistence with the 16 as previously [with 20]. The 20 men, who now only perform 4 hours of necessary labour, are paid 16 instead of 20, as previously. Variable capital has fallen from 20 to 16, but continues to set in motion the same absolute quantity of labour. However, this quantity is now divided differently. Previously 1/2 was paid, 1/2 unpaid. Now 4 hours of the 10 are paid and 6 unpaid, hence 2/5 paid and 3/5 unpaid; in other words the ratio is now 6:4 instead of 5:5; thus the rate of surplus value is 150% instead of 100%. The rate of surplus value has risen by 50%. There would be 3 1/3 d. of paid and 4 4/5 d. of unpaid weaving labour in each yard; this is 24/5 : 16/5, or 24:16, as above. We should therefore have: It will be noted here that the total amount of surplus value is only 24, not 28 as in II. But if in III the same amount of variable capital (20) were to be laid out, the total amount of labour employed would have risen, since it remains the same if a variable capital of 16 is laid out. In fact it would have risen by 1/4, since 20 is more than 16. There would have been a rise in the total quantity of labour employed, not just in the proportion of surplus labour to paid labour. Since 16 yields 40 at this new rate, 20 yields 50, 30 of which is surplus value. If 40 = 200 hours, 50 = 250 hours. And if 200 set in motion 80c, 250 hours set in motion 100c. Finally, if 200 hours produce 1,200 yards, 250 hours produce 1,500. The calculation would be as follows: It should in general be noted that if, as a result of a fall in wages (which is a result here of an increase in productive power), less variable capital is needed to employ the same amount of labour, this amount of labour is employed with a greater advantage for capital, in that the paid part of this amount falls in comparison with the unpaid part. Furthermore, if the capitalist continues to lay out the same amount of variable capital, he makes a twofold gain, because he not only achieves a higher rate of surplus value on the same total quantity, but exploits a greater quantity of labour at this higher rate of surplus value, *although his variable capital has not increased in magnitude.* We have therefore seen that: 1) the rate and quantity of surplus value may remain constant with changing commodity prices; 2) the rate and quantity of surplus value may vary with constant commodity prices. As was developed in our examination of the production of surplus value, commodity prices as such only influence surplus value in so far as they enter into the reproduction costs of labour capacity, thereby affecting the latter s own value; this effect may over short periods be cancelled out by countervailing influences. It follows from 1) that the fall in commodity prices which arises from the development of the productive power of labour, the resultant cheapening of commodities leaving aside the group of commodities which make labour capacity itself cheaper when they become cheaper (just as, inversely, their increased dearness makes labour capacity more expensive) admittedly implies that less labour is materialised in the individual commodities, or that the same labour is represented by a greater quantity of commodities, for which reason a smaller aliquot part of the labour falls to the share of each individual commodity, but it does not in itself imply any change in the proportional division of the labour contained in each individual commodity into paid and unpaid. The two laws developed here are universally valid for all commodities, including therefore those that do not enter directly or indirectly into the reproduction of labour capacity, and the prices of which are therefore irrelevant to the determination of the value of labour capacity itself, whether they have risen or fallen. It follows from 2) see remarks ad III) and IIIa) that although the commodity prices remain the same, and the productive power of the living labour employed directly in the branch of production which results in the commodity remains the same, the rate and the amount of surplus value may rise. [It would have been equally possible to demonstrate the obverse of this phenomenon, namely that prices may fall either if the total working day is reduced, or if the necessary labour time increases owing to an increase in the prices of other commodities, while the working day remains constant.] This is the case because a variable capital of a given magnitude may employ very unequal quantities of labour of a given productive power (and the prices of the commodities remain the same as long as the productive power of labour does not alter) or a variable capital of varying magnitude employs equal quantities of labour of a given productive power. In short, a variable capital of a given magnitude of value does not by any means always set in motion the same amount of living labour, and therefore, in so far as it is regarded as a mere symbol for the quantities of labour it sets in motion, it is a symbol of variable magnitude. This last remark ad 2) and law No. 2 shows how the commodity as a product of capital, as an aliquot constituent of capital, and as a repository of capital which has valorised itself and therefore contains an aliquot part of the surplus value created by capital, must be considered differently from the way we viewed it previously, at the beginning of our examination of the individual, independent commodity.' (When we speak of the prices of commodities, we always assume that the overall price of the mass of commodities produced by capital = the overall value of this mass of commodities, and therefore that the price of the aliquot part, of the individual commodity, = the aliquot part of that overall value. Price here is in general only the monetary expression of value. Prices as distinct from values are not as yet present at all in our treatment of the question.) We have seen that capitalist production is the production of surplus value, and as such (in accumulation) it is at the same time the production of capital and the production and reproduction of the whole capital-relation on an ever more extensive scale. Surplus value, however, is only produced as a part of the commodity s value, just as it is then expressed in a specific quantity of a commodity or in surplus produce. Only as a producer of commodities does capital produce surplus value and reproduce itself. Therefore what we have again to concern ourselves with next is the commodity as its direct product. As we have seen, however, commodities are incomplete results from the point of view of their form (according to their format economic determination). They have to pass through certain changes of form they must re-enter the process of exchange, in which they undergo these changes of form before they can again function as wealth, whether in the form of money or as use values. We therefore have now to examine the commodity more closely as the immediate result of the capitalist production process, and following that the further processes it has to pass through.)] (Commodities are the elements of capitalist production, and they are its product; they are the form in which capital reappears at the end of the production process.) The individual commodity as the product of capital, in fact as the elementary constituent of reproduced and valorised capital displays the difference between it and the individual commodity from which we started out as the presupposition of capital formation, the commodity considered in its independence. One point of difference apart from the point considered previously, relating to the determination of the price is that when the commodity is sold at its price the value of the capital advanced to produce it is not realised, still less the surplus value created by that capital. Indeed, considered merely as the repositories of capital, not only materially, as parts of the use value of which the capital consists, but also as repositories of the value of which the capital consists, commodities can be sold at the price which corresponds to their value and nevertheless be sold below their value as products of capital and as constituents of the overall product in which the capital that has been valorised exists initially. In the example above, a capital of 100 was reproduced in 1,200 yards of linen, at a price of 120. In view of our earlier discussion, where we had c = 80, v = 20, s = 20., we can express matters like this: the 80 of constant capital is represented by 800 yards, or 2/3 of the overall product, the 20 of variable capital, or wages, is represented by 200 yards, or 1/6 of the overall product, and the 20 of surplus value is similarly represented by 200 yards, or a further 1/6 of the overall product. If now 800 yards, for example, rather than 1 yard, were sold at their price, = 80, and if the other 2 parts [of the product] could not be sold, the original capital value of 100 would only be reproduced to an extent of 4/5. The 800 yards, in their capacity as repositories of the total capital of 100, i.e. as the sole actual product of this total capital, would be sold below their value, in fact 1/3 below their value, since the value of the overall product = 120, and 80 = only 2/3 of the overall product. The missing value, 40, is equal to the remaining third of that product. The 800 yards mentioned above could also be sold above their value, if we look at them in isolation, and they would then nevertheless be sold at their value as repositories of the total capital, if, for example, they were themselves sold at 90, and the remaining 400 yards were sold at only 30. But here we shall disregard entirely the sale of separate portions of the overall quantity of commodities above or below their value, since according to our original presupposition commodities are lit general sold at their value. What is involved here is not only the sale of the commodity at its value, as in the case of the independent commodity, but its sale as repository of the capital advanced for its production and therefore its sale at its value (price) as an aliquot part of the capital s overall product. If only 800 out of this overall product of 1,200 yards = 120 are sold, the 800 do not represent 2/3 aliquot parts of the total value, but the total value itself; they therefore represent a value of 120 and not one of 80, and the individual commodity is not = 80/800 = 8/80 = 4 /40 = 2/20 = 2s., but = 120/800 = 12/80 = 3/20 = 3s. According to this, the individual commodity would be sold 50% too dear, if it were sold at 3s. instead of two. The individual commodity, as an aliquot part of the total value produced, must be sold at its price, and therefore must be sold as an aliquot part of the overall product being sold. It must be sold, not as an independent commodity, but as e.g. 1/1,200 of the overall product, as the complement, therefore, of the other 1,199/1,200. What is important is that the individual commodity should be sold at its price x the number which is its denominator as an aliquot part [of the overall product]. [Needless to say, the result of this is that with the development of capitalist production and the cheapening of the commodity corresponding to that development the quantity of commodities grows, the number of commodities that have to be sold grows; hence a constant extension of the market is necessary, is a requirement of the capitalist mode of production. But this point belongs better to the subsequent book.] [This also explains why the capitalist is unable to deliver 1,300 yards at 2s. apiece, whereas he could deliver 1,200 at that price. The reason is that the additional 100 yards might perhaps require an additional provision of constant capital, etc., which could provide an additional production of 1,200 yards at that price but not 100, etc.] From this it can be seen how the commodity as product of capital is distinguished from the individual commodity, treated independently; this distinction will be more and more apparent, and will affect the real price determination of the commodity, etc., in ever increasing measure, the further we trace the course of the capitalist production and circulation process. But the point I want to draw particular. attention to is this: We saw in Chapter II, Section 3, of this First Book how the different value components of the product of capital the value of constant capital, the value of variable capital and surplus value on the one hand are represented, repeat themselves, in their proportional parts in each individual commodity, which itself represents an aliquot part of the total amount of use value that has been produced, as well as an aliquot part of the total amount of value that has been produced; and how on the other hand the overall product can be divided up into certain portions, quotients, of the use value, the article, that has been produced, one part of which represents the value of the constant capital alone, a second part the value of the variable capital alone, and finally the third part the surplus value alone. These two presentations, although they are identical in substance, as shown earlier, are contradictory in their mode of expression. For in the second one the individual commodities which belong to LOT 1, which merely reproduces the value of the constant capital, appear as if they represented labour objectified only before the production process. Hence e.g. the 800 yards = 80 = the value of the constant capital advanced only represent the value of the cotton yarn, oil, coal, machinery, etc., that has been consumed, but not one particle of the value of the newly added weaving labour; whereas viewed as use value every yard of linen contains in addition to the flax, etc., a definite quantity of weaving labour, which has indeed given it the form of linen, and the price of each yard, 2s., contains 16d. as reproduction of the constant capital consumed in it, 4d. for wages, and 4d. for unpaid labour materialised in it. This apparent contradiction the failure to solve which has given rise to fundamental analytical blunders, as we shall see later is at first view just as confusing for the person who only considers the price of the individual commodity as is perhaps the proposition put forward shortly before to the effect that the individual commodity, or a particular portion of the overall product, can be sold at its price below its price; above its price at its price; and even above its price below its price. Proudhon is an example of this confusion (verte). (The price of the yard in the above example is not determined in isolation but as an aliquot part of the overall product.) (Earlier I gave a presentation of what had been developed previously concerning the determination of prices, as follows (certain elements of this should perhaps be inserted into the foregoing discussion): Originally we considered the individual commodity independently, as the result and direct product of a particular quantity of labour. Now it is the result of capital, and the situation alters formally (later on it alters really, in the production prices) in this way: The amount of use values produced represents a quantity of labour which is = the value of the constant capital contained and consumed in the product (the value of the quantity of materialised labour transferred by it to the product) + the quantity of labour received in exchange for the variable capital, part of which replaces the value of the variable capital, the other part forming surplus value. If. the labour time contained in the capital, expressed in money, = 100, 40 of which is variable capital, and if the rate of surplus value = 50%, the total amount of labour contained in the product is represented by 120. Before the commodity can circulate, its exchange value must first be converted into price. Hence if the overall product is not a single continuous item, so that the whole of capital cannot be reproduced in an individual commodity, as e.g. a house, the capital must calculate the price of the individual commodity, i.e. it must express the exchange value of the individual commodity in money of account. The overall value of 120 will now be divided between a larger or smaller number of products according to the varying productivity of labour, and the price of the individual commodity will therefore be in an inverse proportion to the total number of commodities, will represent per piece a larger or smaller aliquot part of the 120. If the overall product = e.g. 60 tons of coal, the 60 tons = 120 = 2 per ton = 120/60; if the product = 75 tons, the ton will = 120/75 = 1 12s.; if the product = 240 tons, the ton will = 120/240 = 12/24 = 1/2, and so on. The price of the individual commodity therefore = the total price of the product / the total number of products, the total price divided by the total number of products, which are measured in the various units of measurement appropriate to the use value of the product. Thus if the price of the individual commodity = the total price of the quantity of commodities (number of tons) produced by the capital of 100 divided by the total number of commodities (here tons), the total price of the overall product, on the other hand, = the price of the individual commodity multiplied by the total number of commodities produced. If the quantity of commodities has risen, owing to a rise in productivity, their number has too, while the price of the individual commodity has fallen. The inverse is the case if productivity has fallen: one factor, the price, will rise, while the other factor, the number, will fall. As long as the amount of labour laid out is the same, it will be expressed in the same total price of 120, whatever proportion of this falls to the account of the individual commodity, with its varying quantities, which vary in proportion to the productivity of labour. If the part of the price which falls to the individual product the aliquot part of the overall value is smaller, owing to the, larger [total] number of products, i.e. owing to the greater productivity of labour, the part of the surplus value that falls to it is also smaller, [i.e.] the aliquot part of the total price in which the surplus value of 20 is expressed, and which attaches to the product, is smaller. But this does not alter the ratio of the part of the price of the individual commodity that expresses surplus value to the part of the price of the commodity that represents wages or paid labour. It was admittedly shown, when we considered the capitalist production process, that, if we disregard any lengthening of the working day, the cheapening of the commodities which determine the value of labour capacity, i.e. enter into the worker s necessary consumption, has a tendency to cheapen labour capacity itself, and therefore simultaneously to reduce the paid part of the labour and to prolong the unpaid part, the overall length of the working day remaining the same. So whereas on the previous presupposition the price of the individual commodity participates in the surplus value in the same proportion as it formed an aliquot part of the overall value, and in the same proportion as it participated in the total price, the part of this price which represents surplus value will now rise, in . spite of the falling price of the product. This is, however, only the case because the surplus value takes up a greater proportional place in the total price of the product, as a result of the increased productivity of labour. The same cause the increased productivity of labour [the reverse would occur with declining productivity] which leads the same quantity of labour, the same value of 120, to be expressed in a greater quantity of products, therefore reduces the price of the individual commodity, lessens the value of labour capacity. Although the price of the individual commodity therefore falls, although the total quantity of labour contained in it falls, and therefore also its value falls, the proportional component of this price which consists of surplus value rises, or, in other words. a greater quantity of unpaid labour is contained in the smaller total quantity of labour contained in the individual commodity, e.g. in a single ton, than previously, where the labour was less productive, the amount of product was smaller, and the price of the individual commodity was higher. Now more unpaid labour is contained in the total price of 120, and therefore in each aliquot part of that 120. It is puzzles of this kind which confuse Proudhon, because he looks only at the price of the individual, independent commodity, and does not view the commodity as the product of the total capital, hence does not consider the proportions in which the overall product with its respective prices is divided conceptually. This is quite correct. In order to make matters clear, let us assume that the worker, l'ouvrier involved here, is the whole working class. The weekly money which the class receives, and with which it has now to buy the means of subsistence, etc., is expended on a mass of commodities of which the price, viewing them individually and all together, contains in addition to a part which = wages, another part, which = surplus value, of which the interest referred to by Proudhon only forms a single part, and perhaps a small proportional part relatively speaking. How then is it possible for the working class, with its weekly income, which only = wages, to buy a quantity of commodities which = wages + surplus value. Since the weekly wage, seen from the point of view of the class as a whole, only = the weekly amount of the means of subsistence, it follows, as night follows day, that the worker is unable to buy the necessary means of subsistence with the sum of money he has received. For the sum of money he has received = the weekly wage, the weekly price of his labour which has been paid to him, while the price of the weekly necessary means of subsistence = the weekly price of the labour contained in them + the price in which the unpaid surplus labour is expressed. Ergo: it is impossible for the worker to be able to buy back what he himself has produced. To live by working , given these presuppositions, is, therefore, implicitly self-contradictory . Proudhon is entirely right, as far as appearances are concerned. But if he were to view the commodity as the product of capital, instead of independently, he would find that the weekly product can be divided into one part, the price of which, = the wage, = the variable capital laid out during the week, contains no surplus value, etc., and another part, the price of which only = the surplus value, etc.; although the price of the commodity includes all these elements, etc. But it is precisely, and only, the first part, which the worker buys back. (Whereby it is irrelevant for the present purpose that he may be, and is, swindled by the picier, [grocer] etc., when buying back.) This is the usual position with Proudhon s apparently deep and inextricable economic paradoxes. They consist in the fact that he expresses the confusion created in his brain by economic phenomena as the law governing these phenomena. (Proudhon s argument is in fact even worse, because implicit in it is the presupposition that the true price of the commodity = the wage contained in it = the quantity of paid labour contained in it, and the surplus value, interest, etc., is only a supplementary charge, arbitrarily made, over and above. the true price of the commodity.) But worse still is the criticism made of him by the vulgar economists. Mr. Forcade for example (the passage should be quoted here not only points out that Proudhon s argument, on the one hand, proves too much, in that the working class would not be able to survive at all on this argument, but also, on the other hand, that he does not go far enough in expressing the paradox, in that the price of the commodities the worker buys includes, in addition to wages + interest, etc., raw material, etc. (in short, it includes the elements of the price of constant capital). Quite correct, Forcade. But what next? He shows that the problem is in fact still more difficult than it is in Proudhon s formulation; and this is a reason for him not to solve it, not even to the extent of Proudhon s presentation, sliding over it instead with a hollow phrase (see No. 1). In fact the good thing about Proudhon s approach is that he frankly expresses the confusion inherent in the economic phenomena, with sophistical self-satisfaction, unlike the vulgar economists, who endeavour to conceal it but are incapable of grasping these questions, laying bare the poverty of their theoretical understanding. Thus Mr. W. Thucydides Roscher describes Proudhon s Qu'est-ce que la propri t ? as confused and confusing . The word confusing expresses the feeling of powerlessness experienced by vulgar political economy when faced with this confusion. It is incapable of solving the contradictions of capitalist production, even in the confused, superficial and sophistical form in which Proudhon formulates and thrusts them upon it. There is nothing left for it to do except appeal from [Proudhon s] sophistry, which it is unable to overcome theoretically, to ordinary common sense, and to point out that things still work out despite all this. A fine consolation for self-styled theorists"! [N.B. The whole of this passage on Proudhon would be better placed in Chapter III of Book II, or even later] With this, the problem presented in Chapter 1 is solved at the same time. If the commodities which form the product of capital are sold at prices determined by their values, hence if the whole capitalist class sells the commodities at their value, each capitalist will realise a surplus value, i.e. he will sell a part of the value of the commodity which has cost him nothing, which he has not paid for. The gain the capitalists make in dealing with each other is thus not attained by reciprocal fraud this can only relate to the case where one snaps up a piece of the surplus value which was destined for another nor is it attained by their selling each other their commodities above their value. It is attained instead by their selling them to each other at their value. This presupposition, that commodities are sold at prices which correspond to their values, also forms the basis of the investigations contained in the next book. The immediate result of the direct capitalist production process, its product, is the commodity. Not only does its price replace the value of the capital advanced, and consumed during the commodity s production, it also, and at the same time, materialises as surplus value, objectifies, the surplus labour consumed during that production. As a commodity, the product of capital must enter into the process of the exchange of commodities, thereby not only entering into the real metabolic process but also at the same time passing through those changes of form we have presented as the metamorphosis of the commodities. In so far as this is merely a matter of formal changes the conversion of these commodities into money, and their reconversion into commodities the process has already been presented in what we called simple circulation the circulation of commodities as such. But these commodities are now at the same time the repositories of capital; they are capital itself, valorised, pregnant with surplus value. And in this connection their circulation, which is now at the same time the reproduction process of capital, implies further determinations, which were alien to commodity circulation when it was considered in abstraction. We have now to consider, therefore, the circulation of commodities as the circulation process of capital. This will be done in the next book.

Economic Manuscripts: Results of the Direct Production Process by Karl Marx 1864

https://www.marxists.org/archive/marx/works/1864/economic/ch01.htm

In so far as capital only steps forth in its elementary forms, as commodity or money, the capitalist steps forth in the character, already known to us, of commodity owner or money owner. But the commodity owner and money owner are no more capitalists for this reason than commodity and money are in themselves capital. just as the latter may be converted into capital only under definite conditions, so the owners of commodities and money are only converted into capitalists under the same conditions. Originally capital stepped forth as money, which needed to be converted into capital, or was only capital dunamei. [potentially] Just as on the one hand the political economists commit the blunder of identifying these elementary forms of. capital commodity and money as such with capital, so on the other hand do they commit the blunder of asserting that capital s mode of existence as a use value the means of labour is as such capital. In its first provisional (so to speak) form as money (as the point of departure for the formation of capital), capital still exists as money alone, hence as a quantity of exchange values in the independent form of exchange value, its monetary expression. But this money has to be valorised. Exchange value has to serve for the creation of more exchange value. The magnitude of value has to grow, i.e. the existing value has not only to maintain itself but to posit an increment, D value, a surplus value, with the result that the given value the given sum of money represents a fluens and the increment a fluxion. We shall return to this independent monetary expression of capital when we consider its circulation process. Here, where we are still only concerned with money as the point of departure of the direct production process, one remark will be sufficient: Capital still exists here only as a given quantity of value, = M (money), in which all use value has been extinguished, hence in the form of money. The magnitude of this quantity of value is limited by the level or quantity of the sum of money which is to be converted into capital. This quantity of value therefore becomes capital through increasing its magnitude, through its conversion into a variable magnitude, through its being, from the outset, a fluens, which has to produce a fluxion. In itself, i.e. according to its determination this sum of money is only capital because it is to be employed, expended, in a way which has as its purpose the magnification of this sum, because it is expended for the purpose of its own magnification. If this appears, with regard to the existing sum of value or money, as its determination its inner driving force, its tendency, so also, with regard to the capitalist i.e. the owner of this sum of money, in whose hands it is to perform this function, it appears as his intention, his purpose. In this originally simple money or value expression of capital (or what is to become capital), an expression in which abstraction is made from any relation to use value, in which this falls aside, all the disturbing interposition and potentially confusing indications of the real production process (commodity production, etc.) fall away, and the characteristic, specific nature of the capitalist production process appears in just as abstract and simple a form. If the original capital is a, quantity of value = x, the purpose is for this x and this is what makes it into capital to become converted into x + Dx, i.e. into a sum of money or a quantity of value = the original quantity of value + an excess amount over and above the original quantity of value, into the given magnitude of money + additional money, into the given value + surplus value. The production of surplus value which implies the preservation of the value originally advanced thus appears as the determining purpose, the driving concern, and the final result of the capitalist production process, as the means whereby the original value is converted into capital. How this is achieved, the real procedure followed in converting x into x + Dx, does not change in any way the purpose and result of the process. x can of course also be converted into x + Dx without the capitalist production process, but [firstly] not under the condition and the presupposition which has been given, namely that the competing members of the society should confront each other as persons who stand vis- -vis each other as commodity owners alone and only enter into contact with each other as such (this excludes slavery, etc.); and, secondly, not under the other condition, namely that the social product is produced as a commodity. (This excludes all forms in which use value is the primary purpose for the direct producers, and in which at most the excess product, etc., is converted into a commodity.) This purpose of the process, the conversion of x into x + Dx, further shows the course the investigation has to take. The expression must be the function of a variable magnitude, or be converted into such during the process. As a given sum of money, x is at the outset a constant magnitude, the increment of which is therefore = 0. It must therefore be converted in the process into another magnitude, which contains a variable element. And what is needed is to discover this component, and at the same time to demonstrate the kind of mediations through which an originally constant magnitude becomes variable. Since a part of x is in turn reconverted into a constant magnitude (this emerges from further consideration of the real production process) namely into the means of labour, because a part of the value of x exists only in the form of particular use values, instead of in its monetary form, a change which does not alter in any way the constant nature of the value magnitude, and indeed does not alter this part in any way, in so far as it is exchange value x is expressed in the process as c (constant magnitude)+v (variable magnitude) = c + v. But the difference, D (c + v) = c + (v + Dv), and, since the difference of c = 0, .it = (v + Dv). What originally appears as Dx is therefore really Dv. And the ratio of this increment of the original magnitude x to the part of x of which it is really the increment must be (Dv = Dx (since Dx = Dv)), Dx/v = Dv/v, which is in fact the formula for the rate of surplus value. Since the total capital C = c + v, of which c is constant and v variable, C can be regarded as a function of v. If v grows by Dv, C becomes = C . One therefore has: 1) C = c + v. 2) C' = c + (v + Dv). If one subtracts equation 1) from equation 2), one obtains the difference C' - C, the increment of C = DC. 3) C' - C = c + v + Dv -c - v = Dv. Hence 4) DC = Dv. One therefore has 3); and therefore 4) DC = Dv. But C' - C = the magnitude by which C has changed, = the increment of C or DC ( = DC), hence 4). Or the increment of the total capital = the increment of the variable part of the capital, so that DC or the change in the constant part of the capital = 0. In this investigation of DC or Dv, therefore, the constant capital must be set = 0, i.e. it must be left out of consideration. The proportion by which v has grown = Dv/v (the rate of surplus value). The proportion by which C has grown = Dv / C = Dv/(c + v) (the rate of profit). The actual, specific function of capital as capital is therefore the production of surplus value, which, it later appears, is nothing but the production of surplus labour, the appropriation of unpaid labour in the real production process, which expresses itself as, is objectified as, surplus value. A further result is that it is necessary for the conversion of x into capital, into x + Dx, that the value or sum of money x should be converted into the factors of the production process, above all into the factors of the real labour process. It is possible in particular branches of industry for a part of the means of production the object of labour to have no value, not to be a commodity, despite being a use value. In this case a part of x is converted solely into means of production, and, in so far as the conversion of x comes into consideration, i.e. the purchase by x of commodities which enter into the labour process, the object of labour [does not figure at all, the operation] is restricted to the purchase of means of production. One factor of the labour process, the object of labour, is here = 0, in so far as its value comes into consideration. But we are considering the matter in its complete form, in which the object of labour too = a commodity. For the cases in which this is not so, this factor, as far as value is concerned, should be set = 0, in order to rectify the calculation. The commodity is a direct unity of use value and exchange value; in the same way, the production process, which is a process of the production of commodities is a direct unity of the labour and valorisation processes. Commodities, i.e. use value and exchange value directly united, emerge from the process as result, as product; similarly, they enter into it as constituent elements. But nothing at all can ever emerge from a production process without first entering into it in the form of the conditions of production. The conversion of the sum of money advanced, the sum of money which is to be valorised and converted into capital, into the factors of the production process is an act of commodity circulation, of the process of exchange, and is reducible to a series of purchases. This act therefore still falls outside the direct production process. It only introduces it, but it is its necessary presupposition, and if we consider, instead of the direct production process, capitalist production in its totality and continuity, this conversion of money into the factors of the production process, the purchase of means of production and labour capacity, itself forms an immanent moment of the process as a whole. If we look now at the shape of capital within the direct production process, capital has, like the simple commodity, the dual shape of use value and exchange value. But further determinations enter in both forms, and these determinations are different from those of the simple commodity viewed independently, they have undergone further development. As far as use value is concerned, first of all, its specific content, its further determination, was completely irrelevant to determining the concept of the commodity. The article which was to be a commodity, and therefore a repository of exchange value, had to satisfy some social need; it therefore had to possess some useful qualities. Voil tout. It is different with the use value of the commodities which perform a function in the production process. The nature of the labour process first dirempts the means of production into object of labour and means of labour, or, determined more precisely, raw material on the one hand, instruments accessory material, etc., on the other. These are determinations of the form of the use value which arise from the very nature of the labour process, and thus use value is determined further in relation to the means of production. The determination of the form of the use value is itself essential here for the development of the economic relation, the economic category. But the use values which enter into the labour process are further divided into two moments and contraries, strictly separated conceptually (in the same way as the objective means of production are divided, as we have just said) on the one hand there are the objective means of production, the objective conditions of production, on the other hand there are the working labour capacities, labour power exerting itself to a given purpose, the subjective condition of production. This is a further determination of the form of capital, in so far as it appears sub specie of use value within the direct production process. In the simple commodity, particular kinds of purposeful labour, spinning, weaving, etc., are incorporated, objectified, in the spun yarn, the woven cloth. The form of the product, appropriate to its purpose, is the sole trace left behind by the purposeful labour which made it, and this trace can itself be extinguished, if the product has a natural form, as do cattle, wheat, etc. Use value appears in the commodity as what is present, what is available; whereas in the labour process it appears only as product. The single commodity is in fact a finished product, the result of the process by which it arose; this process, through which a particular kind of useful labour has been embodied, objectified, in the product, is in fact contained within, and superseded by, the latter. The commodity comes into existence in the production process. It is constantly ejected from the process as product, in such a way that the product itself appears as only a moment of the process. One part of the use value in which capital appears within the production process is living labour capacity itself, but this is labour capacity of a particular specificity corresponding to the particular use value of the means of production, and it is self-activating labour capacity, labour power which expresses itself purposefully, makes the means of production the objective moments of its activity and therefore converts them from the original form of their use value into the new form of the product. Therefore in the labour processes the use values themselves undergo a real conversion process, either of a mechanical, chemical or physical nature. Whereas in the commodity the use value is a given thing with particular qualities, now the use values, things which function as raw material and means of labour, are converted by means of living labour which is active in and through them, living labour which is precisely labour capacity actu, into a use value of a changed shape the product. Thus the shape capital assumes in the labour process, the shape of use value, is now divided into firstly the means of production, conceptually dirempted and related to each other; and secondly the conceptual diremption, which springs from the nature of the labour process, between the objective conditions of labour (the means of production) and the subjective condition of labour, labour capacity acting for a purpose, i.e. labour itself. Thirdly, however, considering the process as a whole, the use value of capital appears here as a process of the production of use value, in which the means of production, according to this specific determination, function as means of production of the purposefully active specific labour capacity corresponding to their particular nature. Or, the whole of the labour process as such appears in the living interaction of its objective and subjective moments as the overall shape of the use value, i.e. the real shape of capital in the production process. The production process of capital, seen from the point of view of reality or seen as a process which by applying useful labour to use values constitutes new use values is above all a real labour process. As such, its moments, its conceptually determined components, are those of the labour process in general, of any labour process, whatever the level of economic development and whatever mode of production forms the basis of this process. Hence, since the real shape of capital, or the shape of the objective use values of which capital consists, its material substratum, is necessarily the shape of the means of production means of labour and object of labour which serve to produce new products; and since, further, these use values are already available (on the market) in the circulation process, in the form of commodities, hence in the possession of the capitalist as a commodity owner, before they begin to function in the labour process in accordance with their specific purpose; hence because capital in so far as it is expressed in objective conditions of labour consists from the point of view of use value of means of production, raw materials, accessory materials and means of labour, tools, buildings, machines, etc., the conclusion is drawn from this that all the means of production are dunamei [potentially] and, in so far as they function as means of production, actu capital. Capital is therefore regarded as a necessary moment of the human labour process in general, irrespective of any historical form this process may assume, and is therefore seen as something eternal, something conditioned by the nature of human labour. Similarly, it is assumed that because the production process of capital in general is a labour process, the labour process as such, the labour process in all social forms, is necessarily a labour process of capital. Capital is thus regarded as a thing, which plays a certain thing-like role, a role appertaining to it as a thing, in the production process. This is the same logic which concludes that because money is gold, gold is in and for itself money, that because wage labour is labour, all labour is necessarily wage labour. An identity is thus proved by concentrating on what is identical in all production processes, as opposed to the specific differences between production processes. Identity is proved by abstracting from difference. We shall return in more detail in the course of this section to this point, which is of decisive importance. For the present, we shall only say this: Firstly: The commodities the capitalist has bought in order to consume them in the production process or labour process as means of production are his property. They are in fact only his money converted into commodities, and his capital exists just as much in them as it did in the money; indeed it exists more intensely, to the extent that they are available in the shape in which they really function as capital, i.e. as means for the creation of value, for the valorisation of value, i.e. for its increase. These means of production are therefore capital. On the other hand, the capitalist has bought labour capacity with the other part of the sum of money he has advanced; he has bought workers, or, as was developed in Chapter IV, it appears that he has bought living labour. This therefore belongs to him just as much as do the objective conditions of the labour process. There is, however, the following specific distinction to be pointed out here: Real labour is what the worker really gives to the capitalist as equivalent for the part of the capital that has been converted into wages, for the purchasing price of labour. It is the expenditure of his life force, the realisation of his productive capacities, his movement, not the capitalist s. Viewed as a personal function, in its reality, labour is the function of the worker and not of the capitalist. Viewed from the point of view of exchange, the worker is what the capitalist receives from him in the labour process, not what the capitalist represents towards him in the same process. This therefore stands in contrast to the way the objective conditions of labour, as capital, and to that extent as the existence of the capitalist, confront the subjective condition of labour, labour itself, or rather the worker who works, within the labour process itself. Thus it comes about that both from the standpoint of the capitalist and from that of the worker the means of production, as existence of capital, as eminently capital, confront labour, hence confront the other element into which the capital advanced has been converted, and therefore appear dunamei as the specific mode of existence of capital outside the production process as well. This development proceeds further, as will be shown, partly through the general nature of the capitalist valorisation process (the role played in this by the means of production as devourers of living labour) and partly through the development of the specifically capitalist mode of production (in which machinery, etc., becomes the real ruler over living labour). Hence where the capitalist production process is the basis the use values in which capital exists in the form of means of production are inseparably welded to the function of those means of production, the character of these things as capital, which is a particular social relation of production; just as to those caught up in this mode of production the product counts as in and for itself a commodity. This is the basis for the fetishism of the political economists. Secondly: The means of production proceed from circulation into the labour process as particular commodities, e.g. as cotton, coal, spindles, etc. They enter in the shape of the use value they possessed as long as they were still circulating as commodities. Having entered the process, they then function with the characteristics appropriate to their use values, with the qualities which belong to them materially as things, e.g. cotton as cotton, etc. But it is different with the part of capital which we call variable, but which is only really converted into the variable part of capital by its exchange for labour capacity. Viewed from the point of view of its real shape, money that part of capital which the capitalist expends for the purchase of labour capacity represents nothing but the means of subsistence available on the market (or thrown onto the market over certain periods) which enter into the worker s individual consumption. Money is only the converted form of these means of subsistence, and the worker converts the money back into means of subsistence as soon as he has received it. Both this conversion and then the consumption of these commodities as use values is a process which has no direct connection with the direct production process, more precisely the labour process; it rather falls outside the latter. One part of the capital, and thereby the capital as a whole, becomes converted into a variable magnitude precisely because what is obtained in the exchange is not money, a constant magnitude of value, nor means of subsistence, similarly constant magnitudes of value, in which the money can be expressed, but rather living labour capacity, an element which creates value and, as a value-creating element, may be larger or smaller, may be expressed as a variable magnitude, and in all circumstances, as a factor in the production process, is a fluid magnitude, in the process of becoming and therefore contained within different limits instead of having become. Now it is true that in reality the consumption of the means of subsistence by the workers may itself be as much implied by the labour process (included by it) as the consumption of mati res instrumentales by machines is e.g. included in the machines, with the result that the worker appears as only an instrument bought by capital, which needs to consume, needs the addition of a certain portion of means of subsistence as its mati res instrumentales so that it may perform its function in the labour process. This occurs to a greater or lesser degree according to the extent and brutality of the exploitation of the worker. However, this phenomenon is not contained conceptually in the capital-relation, not in this narrow sense (we shall examine this matter further in Section 3, on the reproduction of the whole relation). The usual situation is more that the worker consumes his means of subsistence during pauses n the direct labour process, whereas the machine consumes what it requires while functioning. (Animals?) But then again, from the point of view of the whole working class, part of these means of subsistence are consumed by family members who are not yet, or no longer, working. In practice, the difference between a worker and a machine can be reduced to the difference between an animal and a machine, quoad mati res instrumentales and their consumption. But this is not necessarily so, and therefore does not belong among the conceptual determinants of capital. In any case, the part of the capital laid out in wages appears formally as no longer belonging to the capitalist, but rather to the worker, once it has assumed its real shape, the shape of the means of subsistence which enter into the worker s consumption. The use value shape this part of the capital has as a commodity before its entry into the production process as means of subsistence is therefore entirely different from the shape it assumes within that process, which is that of labour power expressing itself in working activity, hence of living labour itself. This part of the capital is therefore specifically distinguished by this from the part available in the shape of means of production, and this is one more reason why under the capitalist mode of production the means of production appear in an eminent sense, in distinction from, and in opposition to, the means of subsistence, as capital in and for themselves. If we disregard points to be developed later, this appearance is dispelled simply by the fact that the form of the use value in which the capital exists at the end of the production process is that of the product, and this product exists in the form of both means of production and means of subsistence; both are therefore equally present as capital, and are therefore also present in opposition to living labour capacity. Let us now proceed to the valorisation process. With regard to exchange value there is once more a distinction between the commodity and the capital involved in the valorisation process. The exchange value of the capital that enters into the production process is smaller than the exchange value of the capital that was thrown onto the market or advanced. For it is only the value of the commodities which enter into the process as means of production i.e. the value of the constant part of the capital that enters into the production process as value. We now have, instead of the value of the variable part of capital, valorisation as a process, with the labour involved constantly realising itself as value, but also flowing beyond the already posited values, proceeding to the creation of new values. As far as the preservation of the old value is concerned, the preservation of the value portion of the constant part [of the capital], this depends on the following: that the value of the means of production which enter into the process should not be greater than is necessary, hence that the commodities of which they consist should only contain, objectified, the labour time socially necessary for the purpose of production. This should be the case e.g. with the buildings, the machinery, etc., and it is the capitalist s business to make sure of this when purchasing these means of production; to make sure that they have the appropriate average quality as use values needed for the formation of the product, whether as raw material or as machinery, etc., hence that they function averagely well, and do not oppose any unusual obstacles to labour, the living factor, e.g. through the quality of the raw material; and, also to be included here, the machinery, etc., employed should not pass on more than the average depreciation to the commodities, etc. All this is the capitalist s affair. But the preservation of the value of the constant capital also depends on its being consumed as far as possible only productively, on its not being squandered, because otherwise, a greater portion of objectified labour would be contained in the product than is socially necessary. This depends in part on the workers themselves, and there the supervision of the capitalist begins. (He can make sure of this by introducing task work, by deductions from wages.) It is necessary, further, that the work should be performed properly, should serve its purpose, that the conversion of the means of production into product should proceed in a methodical fashion, that the use value envisaged as the aim of the process should really emerge in the right form as its result. The capitalist s functions of supervision and [maintaining] discipline enter the picture once again here. It is necessary, finally, that the production process should not be disturbed, or interrupted, and that it really proceed to produce the. product within the time limit imposed by the nature of the labour process and its objective conditions. (Time period.) This depends in part on the continuity of labour, which is a feature of capitalist production. But it also depends in part on external and uncontrollable accidents. To that extent, every production process involves a risk for the values which enter into it; but 1) the values are subject to risk outside the production process as well, and 2) risk is a feature of every production process; it is not peculiar to capital s production process alone. (Capital protects itself against risks by association. The direct producer working with his own means of production is subject to the same risks. This is not peculiar to the capitalist production process. If, in capitalist production, the risks fall upon the capitalist, that is only because he has usurped possession of the means of production.) But now, as far as the living factor of the valorisation process is concerned, 1) the value of the variable capital must be preserved by being replaced, reproduced, i.e. by the addition to the means of production of as large a quantity of labour as the value of the variable capital or of wages amounted to; 2) an increment of its value, a surplus value, must be created, by the objectification in the product of a surplus quantity of labour over and above that contained in the wage, of an additional quantity of labour. Accordingly, the distinction between the use value of the capital advanced, or of the commodities in which it existed, and the use value shape of the capital in the labour process corresponds to the distinction between the exchange value of the capital advanced and the appearance of the exchange value of the capital in the valorisation process. In the former case the means of production, the constant capital, enters into the process in the same use value form as was previously possessed by the commodities of which it consists, whereas the finished use values of which the variable capital consisted are replaced by the living factor of labour power, real labour, valorising itself in new use values. In the latter case, the value of the means of production, the constant capital, enters as such into the valorisation process, whereas the value of the variable capital does not enter into it at all, but is replaced by the value-creating activity of the living factor, an activity which exists as the valorisation process. For the worker s labour time to posit value in proportion to its duration, it must be socially necessary labour time. I.e. the worker must perform the socially normal quantity of purposeful labour within a given time, and the capitalist therefore forces him to ensure that his labour possesses at least the socially normal average degree of intensity. He will try to raise it as much as possible above this minimum, and extract from him over a given period as much labour as possible, for every [increase in the] intensity of labour over the average degree creates surplus value for him. He will also try to prolong the labour process as much as possible beyond the boundary of what has to be worked in order to replace the value of variable capital, of wages. If the intensity of the labour process is given, he will try to increase its duration as much as possible; if the duration is given, he will try to increase its intensity as much as possible. The capitalist compels the worker to give his labour the normal degree of intensity, and where possible a higher degree, and he compels him to prolong his labour process as much as possible beyond the period of time needed to replace his wages. This peculiar character of the capitalist valorisation process gives rise to a further modification of the real shape of capital in the production process, its shape as a use value. Firstly the means of production must be available in a quantity sufficient not only for the absorption of necessary labour, but also for that of surplus labour. Secondly there are changes in the intensity and extension of the real labour process. To be sure, the means of production the worker employs in the real labour process are the property of the capitalist, and, as previously explained, they confront the worker s labour, which is the expression of his own life, as capital. But on the other hand it is the worker who employs the means of production in his labour. In the real labour process, he utilises the means of labour as the conductor of his labour, and the object of labour as the material in which his labour is expressed. It is precisely through this that he converts the means of production into a form of the product appropriate to the purpose. The matter assumes a different aspect if considered from the angle of the valorisation process. It is not the worker who employs the means of production, but the means of production that employ the worker. It is not a matter of living labour being realised in objective labour as its objective organ, but of objective labour being preserved and increased by the absorption of living labour, thereby becoming self-valorising value, capital, and functioning as such. The means of production now appear only as absorbers of the largest possible quantity of living labour. Living labour now appears only as a means for the valorisation and therefore capitalisation of existing values. And, leaving aside our previous analysis, the means of production again appear, precisely for that reason, as minemment the presence of capital vis- -vis living labour, and indeed they now appear as the rule of past, dead labour over living labour. Living labour, precisely in its value-creating function, is constantly incorporated into the valorisation process of objectified labour. Labour, as the exertion, the expenditure of vital forces, is the personal activity of the worker. But as value-creating, as engaged in its own objectification process, the labour of the worker itself becomes a mode of existence of the value of the capital, incorporated into the value of the capital, once he enters into the production process. This power of preserving value and creating new value is therefore capital s power, and the process appears as one of capital s self-valorisation, while the worker who creates the value value alien to him is on the contrary impoverished. This ability of objectified labour to convert itself into capital, i.e. to convert the means of production into means of command over, and exploitation of, living labour, appears under capitalist production as an inherent characteristic of the means of production (and it is indeed dunamei bound up with them on this basis); it appears as inseparable from them, hence as a quality which falls to them as things, as use values, as means of production. They therefore appear to be in and for themselves capital, and capital, which expresses a particular relation of production, a particular social relation, in which the owners of the conditions of production confront living labour capacities within production, therefore appears as a thing, just as value appeared as the quality of a thing and the economic determination of the thing as a commodity appeared as its quality as a thing; and just as the social form assumed by labour in money expressed itself as the qualities of a thing. In fact the rule of the capitalists over the workers is only the rule over the workers themselves of the conditions of labour it, their independence, in the independent position they have taken on vis- -vis the workers (apart from the objective conditions of the production process the means of production the conditions of labour include the objective conditions for the preservation and effective functioning of labour power, i.e. the means of subsistence), although this relation only comes to realisation in the real production process, which, as we have seen, is essentially a process of the production of surplus value, which includes the preservation of the old value; it is a process of the self-valorisation of the capital advanced. In circulation, capitalist and worker only stand vis- -vis each other as sellers of commodities, but owing to the specific polarity of the kinds of commodity they sell to each other, the worker necessarily enters into the production process as a constituent in the use value, the real existence and the value existence of capital, although this relation is first brought to realisation within the production process, and the capitalist, who as a buyer of labour only exists dunamei, first becomes a real capitalist when the worker, who is eventua1iter [ultimately] converted into a wage labourer through the sale of his labour capacity, first really falls under the command of capital in that process. The functions performed by the capitalist are only the functions of capital itself performed with consciousness and will the functions of value valorising itself through the absorption of living labour. The capitalist functions only as capital personified, capital as a person, just as the worker only functions as the personification of labour, which belongs to him as torment, as exertion, while it belongs to the capitalist as the substance that creates and increases wealth; and in fact it appears as such an element incorporated into capital in the production process, as its living, variable, factor. The rule of the capitalist over the worker is therefore the rule of the object over the human, of dead labour over living, of the product over the producer, since in fact the commodities which become means of domination over the worker (but purely as means of the rule of capital itself) are mere results of the production process, the products of the production process. This is exactly the same relation in the sphere of material production, in the real social life process for this is the production process as is represented by religion in the ideological sphere: the inversion of the subject into the object and vice versa. Looked at historically this inversion appears as the point of entry necessary in order to enforce, at the expense of the majority, the creation of wealth as such, i.e. the ruthless productive powers of social labour, which alone can form the material basis for a free human society. It is necessary to pass through this antagonistic form, just as man had first to shape his spiritual forces in a religious form, as powers independent of him. It is the alienation process of his own labour. To that extent, the worker here stands higher than the capitalist from the outset, in that the latter is rooted in that alienation process and finds in it his absolute satisfaction, whereas the worker, as its victim, stands from the outset in a relation of rebellion towards it and perceives it as a process of enslavement. To the extent that the production process is at the same time a real labour process, and the capitalist has to perform the function of supervision and direction in actual production, his activity in fact obtains thereby a specific, manifold content. But the labour process itself only appears as a means to the valorisation process, just as the use value of the product only appears as the vehicle of its exchange value. The self-valorisation of capital the creation of surplus value is therefore the determining, dominating, and overmastering purpose of the capitalist, the absolute driving force and content of his action, in fact only the rationalised drive and purpose of the hoarder. This is an utterly miserable and abstract content, which makes the capitalist appear as just as much under the yoke of the capital-relation as is the worker at the opposite extreme, even if from a different angle. The original relation in which the would-be capitalist buys labour (after Chapter IV we can say this instead of saying labour capacity ) from the worker, in order to capitalise a monetary value, and the worker sells disposition over his labour capacity, sells his labour, in order to eke out his life, is the necessary introduction to and condition of it contains it within itself the relation now developed in the real production process, in which the commodity owner becomes a capitalist, becomes capital personified, and the worker becomes a mere personification of labour for capital. The first relation, in which the two sides appear to confront each other as owners of commodities, is the presupposition for the capitalist production process; similarly, it is also, as we shall see later on, its result and product. But the two acts must accordingly be kept separate from each other. The first belongs to circulation. The second only develops on the basis of the first, in the real production process. The production process is the direct unity of the labour process and the valorisation process, just as its direct result, the commodity, is the direct unity of use value and exchange value. But the labour process is only a means to the valorisation process, and the valorisation process as such is essentially the production of surplus value, i.e. the process of the objectification of unpaid labour. The overall character of the production process is thereby specifically determined. Although we view the production process from two distinct points of view, 1) as a labour process, and 2) as a valorisation process, it is already implied that it is in fact only one single, indivisible labour process. Work is not done twice, once to produce a useful product, a use value, to convert the means of production into products, and the second time to produce value and surplus value, to valorise value. Labour is only added in the particular, concrete, specific form, mode, mode of existence in which it is activity directed towards a purpose, activity which converts the means of production into a particular product, converting, e.g., spindles and cotton into yarn. Only spinning labour, etc., is added, and as it continues it produces more and more yarn. This real labour only posits value in so far as it possesses a normal, definite level of intensity (or, it only counts to the extent that it possesses this), and in so far as this real labour of given intensity is materialised in the product in definite quantities measured by time. If the labour process ceased at the point where the quantity of labour added in the form of spinning, etc., was = the quantity of labour contained in the wage, no surplus value would be produced. Surplus value is therefore also expressed in a surplus product, here as the quantity of yarn which exceeds the quantity the value of which = the value of the wage. The labour process therefore appears as a valorisation process through the fact that the concrete labour added in its course is a quantity of socially necessary labour (by virtue of its intensity), that it is posited as equal to a certain quantity of average social labour; and through the fact that this quantity represents a quantity additional to the amount contained in the wage. It is the quantitative calculation of the particular concrete labour as necessary average social labour, a calculation which corresponds, however, to the real moment, firstly, of the normal intensity of labour (the fact that only the socially necessary amount of labour time is employed for the production of a given quantity of the product) and [secondly,] of the prolongation of the labour process beyond the length of time necessary for the replacement of the value of the variable capital. It follows from our previous discussion that the expression objectified labour , and the antithesis between capital as objectified labour and living labour, are capable of severe misinterpretation. I have already shown previously that the analysis of the commodity in terms of labour by all previous political economists is ambiguous and incomplete. [Without this confusion it would have been altogether impossible for any dispute to arise as to whether nature does not also contribute to the product, in addition to labour. This point concerns concrete labour alone.] It is not sufficient to reduce it to labour ; labour has to be considered in the dual form in which it is on the one hand represented as concrete labour, in the use value of the commodities; and on the other hand calculated as socially necessary labour, in exchange value. From the first point of view, everything depends on its particular use value, its specific character, which impresses on the use value it has created a specific kind of stamp and makes it into one concrete use value in distinction from others, into this specific article. But its particular utility, its specific nature and the kind of thing it is are completely abstracted from when labour enters into calculations as a value-forming element or the commodity is viewed as its objectification. In this case it is undifferentiated, socially necessary, general labour, entirely indifferent towards any particular content, for which reason it receives an expression common to all commodities and only distinguishable in terms of quantity. This is its independent expression as money, the expression of the commodity as price. From the one aspect the thing is expressed in the particular use value of the commodity, in its particular existence as an object, from the other aspect it is expressed in money, whether this exists as actual money, or, in the price of the commodity, as mere money of account. From the one aspect it is exclusively quality that is involved; from the other aspect it is merely the quantity of labour. From the one aspect the distinction between different kinds of concrete labour is expressed in the division of labour; from the other aspect in its monetary expression, which is undifferentiated. Within the production process this distinction confronts us actively. It is no longer made by us, but is a feature of the production process itself. The distinction between objectified labour and living labour is manifested in the real labour process. The means of production, such as cotton and spindles, etc., are products, use values, in which definite useful, concrete kinds of labour, machine-making, cotton growing, etc., are embodied whereas the labour of spinning appears in the process as a kind of labour not only specifically distinct from the kinds of labour contained in the means of production, but also as living labour, labour which is still in process of being realised and which constantly ejects its product from itself, in contrast to the kinds of labour which have already been objectified in their own characteristic products. From this standpoint too, an antithesis emerges between one side, which is the immediate presence of capital, and the other, which is living labour, the direct expenditure of the worker s life. Furthermore, objectified labour steps forth in the labour process as the objective moment, element, in the realisation of living labour. The situation looks entirely different once one considers the valorisation process, the formation and creation of new value. The labour contained here in the means of production is particular quantity of general social labour, and it is therefore expressed in a certain magnitude of value or sum of money, in fact in the price of these means of production. The labour which is added is a particular additional quantity of general social labour, and is expressed as an additional amount of value and sum of money. The labour already contained in the means of production is the same as the newly added labour. The only difference between the two is that the one is objectified in use values, and the other is in the process of carrying out this objectification, the one is past, the other present, the one dead, the other living, the one objectified, in the perfect tense, the other objectifying itself, in the present tense. To the extent that past labour sets living labour to work, it itself becomes a process, it valorises itself, it becomes a fluens that creates a fluxion. This absorption of additional living labour is past labour s process of self-valorisation, its real conversion into capital, into self-valorising value, its conversion from a constant magnitude of value into a variable magnitude of value, value in process. This additional labour can admittedly only be added in the shape of concrete labour, and therefore it can only be added to the means of production in their specific shape as particular use values; moreover, the value contained in these means of production is only preserved by their consumption as means of labour by concrete labour. This is not, however, to deny that the available value, the labour objectified in the means of production, increases above its own quantity, and indeed above the quantity of labour objectified in the variable capital, solely because, and to the degree that, it absorbs living labour, and to the degree that the latter is itself objectified as money, as general social labour. It is therefore eminently in this sense which relates to the valorisation process the actual purpose of capitalist production that capital, as objectified labour (accumulated labour, pre-existent labour and so forth), confronts living labour (immediate labour, etc.) and is counterposed to it by the political economists. Yet they constantly fall into contradiction and ambiguity here even Ricardo because they have not clearly worked out the analysis of the commodity in terms of labour in its dual form. It results from the original process of exchange between capitalist and worker as owners of commodities that only the living factor, labour capacity, enters into the production process as a moment of capital in its real shape. But it is only in the production process itself that objectified labour is converted into capital through the absorption of living labour, and that labour is therefore converted into capital. [Note: The passage entered in pages 96 to 107 under the heading The Direct Production Process belongs here. It should be blended with the foregoing, and each passage should be rectified by reference to the other. Pages 262-64 of this book belong here as well.] This belongs to P. 469.

Economic Manuscripts: Chapter 2: Results of the Direct Production Process

https://www.marxists.org/archive/marx/works/1864/economic/ch02.htm

The capitalist production process is a unity of the labour process and the valorisation process. In order to convert money into capital, it is converted into commodities, which form the factors of the labour process. First, labour capacity must be bought with the money. Then objects must be bought, for without these the labour capacity cannot be consumed, i.e. it cannot work. These objects have no meaning within the labour process except to serve as means of subsistence for labour, use values for labour. In relation to living labour itself they are its material and means; in relation to the product of labour they are the means of its production, with regard to the fact that these means of production are themselves already products, products as means of production of a new product. But these objects do not play this role in the labour process because the capitalist buys them, because they are the converted form of his money, rather the reverse: he buys them because they play this role in the labour process. For the spinning process as such, for example, it is a matter of indifference that the cotton and the spindles represent the money of the capitalist, hence capital, that the money expended is determined as capital. Cotton and spindles become the material and means of labour in the hands of the working spinner alone, and they become these things because he spins, not because he turns cotton belonging to another person into yarn for the same person by spinning with a spindle belonging to the same person. The utilisation or productive consumption of commodities in the labour process does not make them capital, it makes them rather elements in the labour process. In so far as these objective elements of the labour process are bought by the capitalist, they represent his capital. But this is also true of labour. It also represents his capital, for labour belongs to the buyer of labour capacity just as much as do the objective conditions of labour that he has bought. And it is not just the individual elements of the labour process that belong to him; the whole labour process does. Capital, which previously existed in the form of money, now exists in the form of the labour process. Because capital has taken control of the labour process, and the worker therefore works for the capitalist instead of working for himself, the labour process does not for all that change its general nature. Just because money, when converted into capital, is converted into the factors of the labour process, hence necessarily takes on the shape of the material of labour and the means of labour, the material of labour and the means of labour do not by nature become capital, any more than gold and silver by nature become money because money is represented among other things by gold and silver. But the same modern political economists who laugh over the na vet of the Monetary System which, when asked What is money? replies Gold and silver , are not ashamed, when asked What is capital? to reply Capital is cotton . This is precisely what they are saying when they declare that the material and means of labour, the means of production or the products which are employed in further production, in short the objective conditions of labour, are by nature capital, in so far as, and because, they serve through their material characteristics as use values in the labour process. It is in order for other people to add: capital is meat and bread, for although the capitalist buys labour capacity with money, this money in fact only represents the bread, [469b] the meat, in short the means of subsistence of the worker. ["Capital is that part of the wealth of a country which is employed in production, and consists of food, clothing, tools, raw materials, machinery, etc., necessary to give effect to labour"* (Ricardo, 1.c. [On the Principles of Political Economy, and Taxation, p.] 89). *"Capital is a portion of the national wealth, employed or meant to be employed, in favouring reproduction"* (G. Ramsay, 1.c. [An Essay on the Distribution of Wealth, p.] 21). * Capital ... a particular species of wealth ... destined ... to the obtaining of other articles of utility * (Torrens, 1.c. [An Essay on the Production of Wealth, p.] 5). Capital ... produces ... as the means of a new production (Senior, 1.c. [Principes fondamentaux de l' conomie politique..., Paris, 1836], p. 318).a When a fund is devoted to material production, it takes the name of capital (Storch, Cours d' conomie politique, Vol. 1, Paris edition of 1823, [p.] 207).a Capital is that portion of the wealth produced which is destined for reproduction (Rossi, Cours d' conomie Politique. [Annie] 1836-1837, Brussels edition, 1843, p. 364).a Rossi torments himself over the difficult question of whether the raw material can be counted as part of the capital too. One can admittedly make a distinction between capital as material and capital as instrument , but is it (the raw material) really an instrument of production there? Is it not rather an object which is acted upon by the instrument of production? (p. 367).a He does not see that once he has confused capital with its material form of appearance and therefore called the objective conditions of labour simply capital it does not matter that they can be divided as regards labour itself into material and means of labour, for as regards the product they are equally means of production. And he does, in fact, call capital simply means of production a (p. 372). There is no difference between capital and any other part of wealth: a thing only becomes capital by the use that is made of it, that is to say, when it is employed in a productive operation, as raw material, as instrument, or as means of subsistence (Cherbuliez, Riche[sse] ou pauvre[t ], Paris, 1841, p. 18).] A chair with four legs and a velvet cover represents a throne in certain situations; but this chair, a thing that is there for people to sit upon, is not a throne by the nature of its use value. The most essential factor of the labour process is the worker himself, and in the ancient production process this worker was a slave. It does not follow from this that the worker is by nature a slave (although Aristotle is not very far removed from holding this opinion), any more than it follows that spindles and cotton are by their nature capital because they are at present consumed in the labour process by wage labourers. The stupidity of this procedure, whereby a definite social relation of production, which is expressed in things, is taken as the material and natural quality of these things, strikes us forcibly when we open the nearest textbook of political economy, and read on the very first page that the elements of the production process, reduced to their most general form, are land, capital and labour. [See e.g. John St. Mill, Principles of Political Economy, Vol. 1, Book 1] It might just as well be said that they are landed property, knives, scissors, spindles, cotton, corn, in short the material of labour and the means of labour, and wage labour. On one side we name the elements of the labour process enmeshed with the specific social characteristics they possess at a particular historical stage of development; and on the other side we add an element which is attributable to the labour process, independently of all specific social formations, as an eternal process between man and nature in general. [We shall see further on that this illusion of the political economists, by which the appropriation of the labour process by capital is confused with the labour process itself, and the objective elements of the labour process are therefore simply converted into capital, because capital is converted among other things into the objective elements of the labour process that this illusion, which among the classical political economists lasts only as long as they view the capitalist production process exclusively from the point of view of the labour process, and is therefore corrected in their later analysis, arises from the nature of the capitalist production process itself. But it can be stated immediately that this is a very convenient method of demonstrating the eternal character of the capitalist mode of production, or of showing that capital is a permanent natural element of human production in general. Labour is the eternal natural condition for human existence. The labour process is nothing but labour itself, viewed at the instant of its creative functioning. The general moments of the labour process are therefore independent of all particular social developments. The means of labour and the material of labour, a part of which are already the products of previous labour, play their role in every labour process in all epochs and under all circumstances. If 1 therefore attach to them the name of capital in the conviction that semper aliquid haeret , I have proved that the existence of capital is an eternal natural law of human production, and that the Kirghiz who cuts down rushes with a knife he has stolen from a Russian and weaves these rushes together to make a boat is just as much a capitalist as Herr von Rothschild. I might just as well prove that the Greeks and Romans took communion because they drank wine and ate bread, or that the Turks sprinkled themselves every day with Roman Catholic holy water because they washed every day. One finds impertinent and shallow phrase-making of this kind spewed forth with self-satisfied self-importance not only by such people as F. Bastiat, or in the wretched economic tracts of the Society for the Advancement of Useful Knowledge, or in the nursery stories of Mother Martineau, but even [469c] by genuine authorities. Their intention is to prove in this manner the eternal natural necessity for capital; but instead of this, it is rather the opposite that is proved. Capital s necessity even for a particular historical stage of development of the social production process is thereby negated, for the assertion that capital is nothing but the material and means of labour, or that the objective elements of the labour process are by their nature capital, rightly meets with the reply that this proves a need for capital but not for capitalists, or that capital is nothing but a name invented to defraud the masses.] ["We are told that labour cannot move one step without capital that the shovel is just as necessary to a man who digs as is his labour that capital is just as necessary to production as labour itself is. The working man knows all this, for its truth is daily brought home to him; but this mutual dependency between capital and labour has nothing to do with the relative position of the capitalist and the working man; nor does it show that the former should be maintained by the latter. Capital is but so much unconsumed produce; and that which is at this moment in being, exists now independent of, and is in no way identified with, any particular individual or class. And were every capitalist and every rich man in the United Kingdom to be annihilated in one moment, not a single particle of wealth or capital would disappear with them; nor would the nation itself be less wealthy, even to the amount of the farthing. It is the capital, and not the capitalist, that is essential to the operations of the producer; and there is as much difference between the two, as there is between the actual cargo and the bill of lading (J. F. Bray, Labour s Wrongs and Labour s Remedy etc., Leeds, 1839, p. 59). [*"Capital is a sort of cabalistic word like church or state, or any other of those general terms which are invented by those who fleece the rest of mankind to conceal the hand that shears them * (Labour Defended against the Claims of Capital etc., London, 1825, p. 17). The author of this anonymous pamphlet is Th. Hodgskin, one of the most significant modern English political economists. The pamphlet we have cited, the importance of which is still recognised (see e.g. John Lalor, Money and Morals etc., London, 1852), called forth an anonymous reply from Lord Brougham some years after it first appeared, a reply which is as superficial as all the other economic achievements of that notorious windbag. ] This inability to grasp the labour process as independent and yet at the same time as one side of the capitalist production process is still more strikingly evident when Mr. F. Wayland for example informs us that raw material is capital, and that it becomes a product by being treated. Thus leather is the product of the currier and the capital of the shoemaker. To be raw material and to be product are both determinations which a thing possesses in relation to the labour process, and they both have nothing to do with its determination of being capital, although both of them, raw material and product, constitute capital once the labour process has been appropriated by the capitalist. [*"The material which ... we obtain for the purpose of combining it with our own (!) industry, and forming it into a product, is called capital; and, after the labour has been exerted, and the value created, it is called a product. Thus, the same article may be product to one, and capital to another. Leather is the product of the currier, and the capital of the shoemaker * (F. Wayland, 1.c. [The Elements of Political Economy, Boston, 1843], p. 25). (There now follows the above-quoted shit from Proudhon, the citations coming from Gratuit du cr dit. Discussion entre M. Fr. Bastiat et M. Proudhon, Paris, 1850, pp. 179, 180 and 182.)] [Mr. Proudhon has exploited this with his customary depth . Mr. Proudhon stands out by the apparatus of incorrect metaphysics with which he first enters the most conventional and elementary notions into his exploitation fund as capital, subsequently selling them to the public as a high-flown product . The question of how the product is converted into capital is in and for itself nonsense, but the answer is on a level with the question. Mr. Proudhon in fact only informs us of two fairly well-known facts, firstly that products are sometimes worked up as raw material, and secondly that products are at the same time commodities; i.e. possess a value, which before being realised must pass the acid test of the debate between buyer and seller. The same philosopher remarks: He calls the abstract social form subjective , and his subjective abstraction society .] If the political economist, as long as he is looking at the capitalist production process purely from the point of view of the labour process, declares capital to be a mere thing, raw material, instrument, etc., it then again occurs to him that the production process is after all also a valorisation process, and in relation to the valorisation process those things only come into consideration as value. In so far as this value what was immediately beforehand proclaimed a thing is now declared to be a commercial idea . ["Capital is a commercial idea , (Sismondi, tudes etc., Vol. 2, p. 273).] The product of the capitalist production process is neither a mere product (a use value) nor is it a mere commodity, i.e. a product that has an exchange value. The specific product of this process is rather surplus value. The product is commodities which possess more exchange value, i.e. represent more labour, than was advanced to produce them, in the form of money or commodities. The labour process appears in the capitalist production process merely as a means; while the valorisation process, or the production of surplus value, appears as the goal. As soon as the political economist becomes aware of this, capital starts to be defined as wealth which is employed in production in order to make a profit . [*"Capital. That portion of the stock of a country which is kept or employed with a view to profit in the production and distribution of wealth * (T. R. Malthus, Definitions in Political Economy. New Edition etc. BY John Cazenove, London, 1853, p. 10). Capital is that part of wealth which is employed in production and generally for the purpose of obtaining profit * (Th. Chalmers, On Political Economy etc., 2nd ed., Glasgow, 1832] We have seen that the conversion of money into capital can be divided into two independent processes, which belong to quite distinct spheres and exist in isolation from each other. The first process belongs to the sphere of the circulation of commodities and therefore takes place on the commodity market. It is the sale and purchase of labour capacity. The second process is the consumption of the labour capacity that has been purchased, or the production process itself. In the first process, the capitalist and the worker confront each other only as money and commodity owners, and their transaction, like all transactions between buyers and sellers, is an exchange of equivalents. In the second process, the worker appears pro tempore as a living component of capital itself, and the category of exchange is entirely excluded here, since the capitalist has appropriated for himself by purchase all the factors of the production process, material as well as personal, before the start of that process. But although the two processes exist alongside each other independently, they condition each other. The first introduces the second, and the second implements the first. The first process, the sale and purchase of labour capacity, shows us the worker and the capitalist solely as seller and buyer of the commodity. What distinguishes the worker from other sellers of commodities is only the specific nature, the specific use value of the commodity he sells. But the particular use value of the commodities alters absolutely nothing in the determination of the economic form of the transaction, it does not alter the fact that the buyer represents money, and the seller a commodity. Hence in order to prove that the relation between the capitalist and the worker is nothing but a relation between commodity owners who exchange money and commodities with each other for their mutual advantage and by virtue of a free contract, it is sufficient to isolate the first process and keep holding onto its formal character. This simple conjuring trick is hardly witchcraft, but it forms the whole of vulgar political economy s stock of wisdom. We have seen that the capitalist must convert his money not just into labour capacity but into the objective factors of the labour process, the means of production. But if we look at capital as a whole, on one side, i.e. the totality of buyers of labour capacity, on one side, and the totality of sellers of labour capacity, the totality of workers, on the other, we see that the worker is compelled to sell, instead of a commodity, his own labour capacity as a commodity, because he is confronted on the other side by the whole of the means of production, by the whole of the objective conditions of labour, as well as by the whole of the means of subsistence, money, means of production and [469e] means of subsistence as alien property, hence because the worker is confronted by all the objective wealth as the property of the owners of commodities. It is presupposed that he works as a non-owner and that the conditions of his labour confront him as alien property. The fact that capitalist No. I, is a money owner, and buys means of production from capitalist No. II, who owns means of production, while the worker buys means of subsistence from capitalist No. III with money received from capitalist No. I, makes absolutely no change in the circumstance that capitalists Nos. I, II and III are, taken together, in exclusive possession of money, means of production, and means of subsistence. Human beings can only live in so far as they produce their means of subsistence, and they can only produce means of subsistence, in so far as they find themselves in possession of means of production, in possession of the objective conditions of labour. It is therefore apparent from the outset that the worker, who is denuded of the means of production, is denuded of the means of subsistence, just as, conversely, a person who is denuded of means of subsistence will be unable to create any means of production. Hence what stamps money or commodities with the character of capital from the outset, even in the first process before they have actually been converted into capital, is neither their nature as money nor their nature as commodities, nor is it the material use value these commodities have of serving as means of subsistence and means of production, but the circumstance that this money and these commodities, these means of production and subsistence, confront labour capacity which has been denuded of all objective wealth as independent powers, personified in those who own them. The material conditions necessary for the realisation of labour are therefore themselves alienated from the worker, and appear rather as fetishes endowed with a will and a soul of their own, and commodities figure as the buyers of persons. The buyer of labour capacity is only the personification of objectified labour, which gives up part of itself to the worker, in the form of means of subsistence, in order to incorporate living labour capacity into its other part, and through this incorporation to preserve itself as a whole and grow beyond its original measure. It is not a case of the worker buying means of subsistence and means of production, but of the means of subsistence buying the worker, in order to incorporate him into the means of production. The means of subsistence are a particular material form of existence in which capital confronts the worker before he appropriates them through the sale of his labour capacity. But when the production process begins, labour capacity has already been sold, and the means of subsistence have therefore been transferred, at least de jure, into the worker s consumption fund. These means of subsistence do not form an element in the labour process, for apart from working labour capacity the labour process presupposes nothing more than the material and means of labour. The worker must in reality preserve his labour capacity through his means of subsistence, but this private consumption of his, which is at the same time the reproduction of his labour capacity, falls outside the commodity s production process. It is possible in capitalist production for the whole of the worker s disposable time to be in fact absorbed by capital, and hence for the consumption of the means of subsistence in fact to appear as a mere incident of the labour process itself, just as does the consumption of coal by a steam engine, of oil by a wheel or of hay by a horse; or the whole private consumption of a working slave. It is in this sense that e.g. Ricardo (see above, note 127 ) enumerates food and clothing alongside raw materials, tools, etc., as things which give effect to labour and therefore serve as capital in the labour process. But [469f] however things may turn out in fact, when the free worker consumes the means of subsistence they are commodities he has bought. As soon as they pass into his hands, and therefore all the more so as soon as they have been consumed by him, they cease to be capital. They therefore do not constitute any part of the material elements in which capital appears in the direct production process, although they do constitute the material form of existence of the variable capital which figures on the market, within the sphere of circulation, as the buyer of labour capacity. [ This is the correct point which lies at the basis of Rossi s polemic against including the means of subsistence among the components of productive capital. But we shall see in a later chapter how incorrectly he conceives the matter, and the degree of confusion he argues himself into in consequence of this. P. Rossi, Cours d' conomie politique. Annie 1836-1837. In: Cours d' conomie politique, Brussels, 1843] When a capitalist converts 400 thalers out of 500 into means of production and lays out 100 for the purchase of labour capacity, those 100 thalers form his variable capital. With them the workers buy means of subsistence, either from the same capitalist or from others. The 100 thalers are only the monetary form of these means of subsistence, which therefore in fact form the material content of the variable capital. The variable capital no longer exists within the direct production process in the monetary form or the commodity form; it exists in the form of the living labour which it has appropriated by buying labour capacity. And it is only through this conversion bf variable capital into labour that the quantity of value advanced in money or commodities is converted at all into capital. Hence although the sale and purchase of labour capacity, by which the conversion of a part of the capital into variable capital is conditioned, is a process which precedes the direct production process, and is separate from and independent of it, it forms the absolute foundation for the capitalist production process and it forms a moment of this production process itself, when we consider the latter as a whole and not only at the moment of the direct production of commodities. Objective wealth is converted into capital solely because the worker sells his labour capacity in order to live. The objects which are the objective conditions of labour, hence the means of production and the objects which are the objective conditions for the preservation of the worker himself, hence the means of subsistence, only become capital when faced with wage labour. Capital is no more a thing than money is. In capital, as in money, definite social relations of production between persons are expressed as the relations of things to persons, or definite social connections appear as social characteristics belonging naturally to things. As soon as the individuals confront each other as free persons, there is no production of surplus value without a wage system. Without the production of surplus value there is no capitalist production, hence no capital and no capitalist! Capital and wage labour (this is what we call the labour of the worker who sells his own labour capacity) merely express two factors in the same relation. Money cannot become capital without being exchanged for labour capacity as a commodity sold by the worker himself. Labour, on the other hand, can only appear as wage labour when its own objective conditions meet it as egoistical powers, as alien property, value existing for itself and holding fast to itself, in short as capital. So if capital can only consist from the material point of view or from the point of view of the use values in which it exists of the objective conditions of labour itself, these objective conditions must from the formal point of view confront labour as alien, independent powers, as value objectified labour to which living labour is the mere means of its own preservation and expansion. Wage labour, or the wage system, is therefore a necessary social form of labour for capitalist production, just as capital, potentiated value, is a necessary social form which the objective conditions of labour must assume for the labour to be wage labour. Wage labour is therefore a necessary condition for the formation of capital, and it remains the constantly necessary presupposition for capitalist production. So although the first process, the exchange of money for labour capacity, or the sale of labour capacity, does not enter as such into the direct production process, it does in contrast enter into the production of the relation as a whole. [ One can therefore conclude from this what an F. Bastiat understands of the essence of capitalist production when he declares the wage system to be a formality, external to capitalist production and irrelevant to it, and makes the discovery that it is not the form of the remuneration which creates this dependence for him (for the worker) (Harmonies conomiques, Paris, 1851, p. 378). This is a discovery as well as being a misunderstood piece of plagiarism from genuine political economists worthy of the eloquent ignoramus who also discovered, in the same work, hence in 1851, that what is still more decisive and unmistakable is the disappearance of the great industrial crises in England (p. 396).a Although F. Bastiat had decreed the removal of great crises from England in 1851, that country again enjoyed a great crisis in 1857, and only avoided another industrial crisis of previously unimagined extent in 1861 because of the outbreak of the American Civil War; one can read this even in the official reports of the English Chambers of Commerce.] The first process, the sale and purchase of labour capacity, presupposes that the means of production and the means of subsistence have achieved independence vis- -vis the real worker, and therefore presupposes personified means of production and subsistence, which conclude contracts as buyers with the workers as sellers. If we now pass from this process, which occurs in the sphere of circulation, on the commodity market, to the direct production process itself, we find that the latter is above all a labour process. In the labour process the worker enters as worker into a normal, active relation to the means of production, determined by the nature and purpose of the labour itself. He appropriates the means of production and treats them merely as the means and material of his labour. The independent existence of these means of production, to which [469g] they held fast, and their self-willed character, their separation from labour, are now in fact superseded. The objective conditions of labour step forth in their normal unity with labour, as the mere material for, and the organs of, labour s creative functioning. The worker treats the hide he is tanning as merely the object on which his creative activity is exerted, not as capital. He does not tan the capitalist s hide. [ We see further from the explanations of the economist himself that, in the process of production, capital, the result of labour, is immediately transformed again into the substratum, into the material of labour; and that therefore the momentarily postulated separation of capital from labour is immediately superseded by the unity of both (F. Engels, Outlines of a Critique of Political Economy, 1844)] To the extent that the production process is simply a labour process, the worker consumes the means of production in this process simply as means of subsistence of labour. But to the extent that the production process is at the same time a valorisation process, the capitalist consumes the worker s labour capacity in it, or appropriates living labour as the life-blood of capital. The raw material, the object of labour in general, serves only to soak up alien labour, and the instrument of labour serves only as a duct, a conduit, for this process of absorption. Through the incorporation of living labour capacity into the objective components of capital, the latter becomes a monster endowed with life, and begins to function as though it had love in its bosom . [Goethe, Faust, Part I] Since labour creates value solely in a particular useful form, and since every specific useful kind of labour requires material and means of labour which possess a specific use value, [e.g.] spindles and cotton, etc., for the labour of spinning, anvil, hammer and iron for the labour of the smith, and so on, the labour can only be absorbed in so far as capital takes on the shape of the specific means of production required for particular labour processes, and only in this shape can capital absorb living labour. Here, therefore, one sees why the material elements of the labour process are seen as capital on account of their material characteristics by the capitalist, the worker and the political economist, the last-mentioned being capable of thinking of the labour process only as a labour process appropriated by capital. One also sees why the political economist is incapable of separating their material existence, as simply factors of the labour process, from the social quality attaching to them, which makes them into capital. He cannot do this because in reality the same identical labour process which the means of production serve through their material characteristics as mere means of subsistence of labour, converts those means of production into mere means for the absorption of labour. The worker makes use of the means of production in the labour process, considered in isolation. But in the labour process which is at the same time a capitalist production process the means of production make use of the worker, with the result that labour appears only as a means whereby a certain amount of value, hence a certain amount of objectified labour, absorbs living labour in order to preserve and increase itself. Thus the labour process appears as a process of the self-valorisation of objectified labour by means of living labour. [*"Labour is the agency by which capital is made productive of ... profit"* (John Wade, 1.c. [History of the Middle and Working Classes...], p. 161). In bourgeois society, living labour is but a means to increase accumulated labour , Manifest der Kommunistischen Partei, 1848] Capital employs the worker, not the worker capital, and it is only things which employ the worker and therefore, in the shape of the capitalist, possess selfhood, and a consciousness and will of their own, which are capital. [The particular economic character of the means of subsistence, that they buy workers, or the character of the means of production, such as leather and lasts, that they employ journeymen cobblers, this inverted relation between thing and person, hence their capitalist character, is so inseparably bound up with the material character of the elements of production in the system of capitalist production, and therefore in the imagination of the political economists, that Ricardo, for example, despite regarding it as necessary to give a more precise characterisation of the material elements of capital, employs without further reservations or further remarks, as self-evident, the economically correct expressions Capital, or the means of employing labour (hence not means employed by labour but means of employing labour ) (I.C. [On the Principles of Political Economy, and Taxation], p. 92), Quantity of Labour employed by a capital (ibid., p. 419), and The fund which is to employ them (The labourers) (p. 252), etc. How could one have explained to an ancient Greek or Roman such expressions as Though the existing mass of commodities should command less labour than before, etc. (An Inquiry into those Principles, respecting the Nature of Demand etc., p. 60), where the commodity s command over labour is directly referred to? In the present-day German language, too, the capitalist, the personification of the things which take labour, is called the giver of labour [Arbeitsgeber] and the actual worker, who gives labour, is called the taker of labour [Arbeitsnehmer]. In bourgeois society capital is independent and has individuality, while the living person is dependent and has no individuality (Manifest der Kommunistischen Partei, l.c).] In so far as the labour process is merely the means and the real form of the valorisation process, hence in so far as it is a process which consists in the objectification in commodities of a surplus of unpaid labour, surplus value, over and above the labour which was objectified in wages, hence in the production of surplus value, the essential point of this whole process is the exchange of objectified labour with living labour, the exchange of less objectified labour for more living labour. In the process of exchange itself, a quantity of labour objectified in money as a commodity is exchanged for a quantity of labour of equal magnitude, objectified in living labour capacity. [469h] In line with the law of value governing the exchange of commodities, equivalents are exchanged, equal quantities of objectified labour, although one quantity is objectified in a thing, the other in a living person. However, this exchange only introduces the production process, by means of which more labour is in fact obtained in living form than was expended in objectified form. The great merit of classical political economy is therefore that it presented the whole production process as a process of this kind between objectified labour and living labour, and hence it presented capital, as opposed to living labour, solely as objectified labour, i.e. as value which valorises itself by means of living labour. Classical political economy s deficiencies here are firstly that it was incapable of demonstrating how this exchange of more living labour for less objectified labour fits in with the law of the exchange of commodities the determination of the values of commodities by labour time, and secondly, therefore, that it directly lumped together the exchange of a definite quantity of objectified labour for labour capacity in the circulation process with the absorption of living labour in the production process by the objectified labour which is present in the shape of means of production. It lumps together the process of exchange between variable capital and labour capacity with the process of the absorption of living labour by constant capital. This deficiency too arises from classical political economy s capitalist prejudices, because the capitalist himself, who only pays for labour after it has been performed, regards the exchange of a small quantity of objectified labour for a large quantity of living labour as one single unmediated process. Hence if the modern political economist counterposes capital, as objectified labour, to living labour, he understands by objectified labour not the products of labour in the sense in which they possess a use value and are the embodiment of particular useful acts of labour, but in the sense in which they are the material expression of a particular quantity of general social labour, hence are value, money, which valorises itself by appropriating alien living labour. This appropriation is mediated by the exchange . between variable capital and labour capacity, which takes place on the commodity market, but is only completed in the real production process. [Direct labour and objectified labour, present and past labour, living and hoarded labour, etc., are therefore forms in which the political economists express the relation between capital and labour. *"Labour and Capital ... the one immediate labour, ... the other hoarded labour"* (James Mill, Elements of Political Economy, London, 1821, p. 75). *"Antecedent labour (capital) ... present labour"* (E. G. Wakefield, in his edition of Adam Smith [An Inquiry into the Nature and Causes of the Wealth of Nations], Vol. 1, London, 1835, p. 231, note). *"Accumulated labour (capital) ... immediate labour (Torrens, 1.c. [An Essay on the Production of Wealth..., London, 1821], Ch. I p. 31). *"Labour and Capital, that is, accumulated labour"* (Ricardo, 1.c. [On the Principles of Political Economy, and Taxation], p. 499). * The specific advances of the capitalists do not consist of cloth * (or of any use values at all), * but of labour * (Malthus, The Measure of Value etc., London, 1823, p. 17). Just as everyone is forced to consume before he produces, the poor worker finds himself dependent upon the rich man, and can neither live nor work without obtaining from him existing produce and commodities, in exchange for those he promises to produce by his own labour... To make him [i.e. the rich man] consent to this, it was necessary to agree that whenever labour already performed was exchanged for labour yet to be done, the latter would have a higher value than the former (Sismondi, De la richesse commercials, Vol. 1, Geneva, 1803, pp. 36, 37).a Mr. W. Roscher, who evidently has no idea of what the English political economists are saying, and apart from this inopportunely recalls that Senior has baptised capital abstinence , makes the following grammatically acute professorial observation: The school of Ricardo is also accustomed to subsume capital under the concept of labour, as hoarded labour . This is clumsy, because after all (!) the owner of capital has even so (!) done more (!) than merely (!) produce (!) and preserve it (!); namely he has abstained from enjoying it himself, in return for which he demands e.g. interest (W. Roscher, 1.c. [Die Grundlagen der National konomie..., 1858, p. 82]).] The subordination of the labour process to capital does not at first change the real mode of production in any way, and its only practical effect is as follows: the worker comes under the command, the direction, and the overall supervision of the capitalist, only in relation to his labour which belongs to capital, of course. The capitalist takes care that the worker wastes no time, and e.g. produces every hour the product of an hour s labour, employing only the average amount of labour time necessary to produce the product. To the extent that the capital-relation dominates production, and the worker therefore constantly appears on the market as a seller and the capitalist as a buyer, the labour process is itself by and large continuous and not interrupted, as it would be if the worker, as an independent producer of commodities, depended on the sale [469i] of his commodities to individual customers, since the minimum amount of capital must be large enough to employ the worker continuously and wait for the sale of the commodities."') [ * If in the progress of time a change takes place in their economical position"* (i.e. the *workmen s), if they become the workmen of a capitalist who advances their wages beforehand, two things take place. First, they can now labour continuously; and, secondly, an agent is provided, whose office and whose interest it will be, to see that they do labour continuously... Here, then, is an increased continuity in the labour of all this class of persons. They labour daily from morning to night, and are not interrupted by waiting for or seeking the customer... But the continuity of labour, thus made possible, is secured and improved by the superintendence of the capitalist. He has advanced their wages; he is to receive the products of their labour. It is his interest and his privilege to see that they do not labour interruptedly or dilatorily"* (R. Jones, 1.c. [Text-book of Lectures on the Political Economy of Nations.... Hertford, 1852], p. 38 sqq. passim).] Finally, the capitalist compels the worker to prolong the duration of the labour process as far as possible beyond the limits of the labour time necessary for the reproduction of the wage, for this surplus of labour is precisely what provides the capitalist with surplus value. ["An axiom generally admitted by economists is that all labour must leave a surplus. In my opinion this proposition is universally and absolutely true: it is the corollary of the law of proportion (!), which may be regarded as the summary of the whole of economic science. But, if the economists will permit me to say so, the principle that all labour must leave a surplus is meaningless according to their theory, and is not susceptible of any demonstration (Proudhon, [Syst me des contradictions conomiques, ou] Philosophie de la mis re [Vol. I, Paris, 1846, p. 73]). I have shown in my work Mis re de la philosophie. R ponse a la philosophie de la mis re de M. Proudhon, Paris, 1847, pp. 76-9l, that Mr. Proudhon does not have the slightest idea of the nature of this surplus of labour , which is in fact the surplus product in which the surplus labour or unpaid labour of the worker is expressed. Since he finds that all labour in fact produces a surplus of this kind in capitalist production, he endeavours to explain this fact by calling upon some sort of mysterious natural quality in labour, and to escape from his embarrassment by using such sesquepedalia verba [Bombastic, meaningless and long-winded expression] as corollary of the law of proportion , etc. ] Just as the owner of commodities is only interested in the use value of the commodity as the vehicle of its exchange value, so the capitalist is only interested in the labour process as the vehicle and instrument of the valorisation process. Within the production process too in so far as it is a valorisation process the means of production continue to be simply monetary values, for which the particular material shape, the particular use value, in which this exchange value is expressed is a matter of indifference, just as labour itself does not count within the production process as productive activity of a particular useful character, but as the substance that creates value, as social labour in general which is being objectified, and of which the only interesting aspect is its quantity. For capital, therefore, every particular sphere of production counts only as a particular sphere in which money is invested in order to make more money, in order to preserve and increase existing value or to appropriate surplus labour. The labour process is different, and therefore the factors of the labour process are different, in every individual sphere of production. One cannot make any boots with spindles, cotton, and spinners. But the investment of capital in one or the other sphere of production, the division of the total capital of society between the various spheres of production, and finally the degree to which capital migrates from one sphere of production to another, are all determined by the changing proportions in which society requires the products of these particular spheres of production, i.e. the use value of the commodities they produce; for although only the exchange value of a commodity is paid, it is never bought for any other reason than its use value. But capital is in and for itself indifferent towards the specificity of every sphere of production, and where it is invested, how it is invested, and to what extent it passes from one sphere of production into another, or its distribution between the various spheres of production alters, is determined solely by the greater or lesser difficulty experienced in selling the commodities produced by one or the other sphere of production. In reality, this fluidity of capital is slowed down by frictions, which we do not need to consider here any further. But on the one hand, as we shall see later, it creates means of overcoming these frictions, in so far as they arise solely from the nature of the relation of production itself, and on the other hand the development of the mode of production peculiar to capital removes all legal and extra-economic obstacles to its free movement in the various spheres of production. Above all it overturns all the legal or traditional barriers preventing it from buying whatever kind of labour capacity it thinks fit, or appropriating any kind of labour at all at its good pleasure. Furthermore, although labour capacity possesses a particular shape in every particular sphere of production, as the capacity for spinning, shoemaking, blacksmithing, etc., although, in short, every particular sphere of production requires a labour capacity which has developed in a particular direction, a specialised labour capacity, that fluidity of capital, its indifference towards the particular character of the labour [469k] process it is appropriating, presupposes the same fluidity or versatility in labour, hence in the ability of the worker to employ his labour capacity. We shall see that the capitalist mode of production itself creates these economic obstacles to its own tendency, but it removes all legal and extra-economic obstacles to the versatility we are discussing. [* Every man, if not restrained by law, would pass from one employment to another, as the various turns in trade should require"* (Considerations Concerning Taking Off the Bounty on Corn Exported etc., London, 1753, p. 4).] Just as capital, as self-valorising value, is indifferent to the particular material shape in which it appears in the labour process, whether as steam engine, manure heap or silk, so the worker is indifferent to the particular content of his labour. His labour belongs to capital, it is merely the use value of the commodity he has sold, and he has only sold it in order to appropriate to himself money, and, with that money, the means of subsistence. He is only interested. in changes in the kind of labour [needed] because every particular kind of labour demands a different development of labour capacity. While his indifference towards the particular content of his labour does not provide him with the ability to change his labour capacity to order, he shows this indifference by throwing his replacements, the succeeding generation, from one branch of labour to the other according to the requirements of the market. The higher the development of capitalist production in a country, the greater the demand for versatility in labour capacity, the more indifferent the worker is towards the particular content of his labour, and the greater the fluidity of capital s movement from one sphere of production to another. Classical political economy presupposes as axioms the versatility of labour capacity and the fluidity of capital, and justifiably so to the extent that this is the tendency of the capitalist mode of production, which asserts itself ruthlessly despite all obstacles, which are for the most part created by capitalist production itself. In order to present the laws of political economy in their purity, abstraction is made from these frictions, just as in pure mechanics abstraction is made from particular frictions which have to be overcome in each particular case of its application. 144) [Nowhere is the fluidity of capital, the versatility of labour and the indifference of the worker towards the content of his labour more clearly apparent than in the United States of North America. In Europe, and even in England, capitalist production continues to be haunted and falsified by feudal reminiscences. The fact that e.g. baking, shoemaking, etc., are only now starting to be carried on in the capitalist fashion in England, is entirely due to the circumstance that English capital had feudal prejudices about respectability . It was respectable to sell Negroes into slavery, but it wasn t respectable to make sausages, boots or bread. All the machinery which subordinates the disreputable European branches of business to the capitalist mode of production therefore originates from the United States. On the other hand, people are nowhere as indifferent to the kind of labour they perform as in the United States; nowhere else are people so aware that their labour always delivers the same product, money, and nowhere else do people pass with the same nonchalance through the most disparate branches of labour. This Versatility of labour capacity therefore appears here as a completely distinct quality of the free worker in contrast to the working slave, whose labour capacity is fixed, and can only be employed in the locally traditional manner. * Slave labour is eminently defective in point of versatility... if tobacco be cultivated, tobacco becomes the sole staple, and tobacco is produced whatever be the state of the market, and whatever be the condition of the soil * (Cairnes, 1.c., The Slave Power: its Character, Career, and Probable Designs..., London, 1862, pp. 46, 47).] Although the capitalist and the worker only confront each other on the market as buyer, money, and seller, commodity, this relation has from the outset a characteristic coloration owing to the peculiar content of the transaction; the more so, in that the capitalist mode of production presupposes that the presence of both sides on the market in the same antithetical determination is constantly repeated, or is a constant one. If we consider the relation of commodity owners as such on the market, we see the same commodity owner appear alternately as seller and buyer of commodities. The fact that two commodity owners are distinguished from each other as buyers and sellers is only a constantly disappearing difference, in that all alternately play the same roles towards each other in the sphere of circulation. Admittedly, the worker too becomes a buyer, after he has sold his labour capacity, converted it into money, and he is now confronted by the capitalists as mere sellers of commodities. But in his hands the money is only a means of circulation. On the actual commodity market the worker is in fact only distinguished as a buyer from the commodity owner as a seller, just like everyone else who possesses money. But on the labour market it is different: here money always confronts him as the money form of capital, and therefore the money owner confronts him as capital personified, a capitalist, just as for his part the worker confronts the money owner as [469l] merely the personification of labour capacity, and therefore of labour, as a worker. It is not a mere buyer and a mere seller who face each other, it is a capitalist and a worker, who face each other in the sphere of circulation, on the market, as buyer and seller. Their relation as capitalist and worker is the presupposition for their relation as buyer and seller. This is not, as with other sellers of commodities, a relation that arises absolutely from the nature of the commodity itself, such as that no one directly produces products for his own needs, but rather that everyone produces a particular product as a commodity, and then through selling it appropriates the products of others. What we are dealing with here is not the social division of labour and independent position of the different branches of labour vis- -vis each other which makes e.g. the shoemaker into a seller of boots and a buyer of leather or bread. It is rather the division of the associated elements of the production process themselves, and their achievement of an independent position vis- -vis each other, which proceeds as far as their reciprocal personification. This is what makes money, as the general form of objectified labour, into a buyer of labour capacity, of the living source of exchange value and therefore of wealth. Real wealth, which is money, if seen from the point of view of exchange value, and the means of subsistence and the means of production, if seen from the point of view of use value, confronts the worker, the potentiality of wealth, i.e. labour capacity, as one person confronting another person. [469m] Since surplus value is the specific product of the production process, its product is not only the commodity but capital. Labour is converted into capital within the production process. The functioning of labour capacity, i.e. labour, objectifies itself in the production process, and thus becomes value, but since the labour ceases to belong to the worker even before it starts, what is objectified for the worker is the objectification of alien labour, and therefore value independently confronting labour capacity, capital. The product belongs to the capitalist, and it represents capital vis- -vis the worker just as much as the elements of production do. On the other hand, existing value or money only genuinely becomes capital, firstly, by presenting itself as self-valorising value, value in process (and it does present itself as such in that the functioning of labour capacity, labour, takes effect within the production process as energy incorporated into it, and belonging to it), and, secondly, by distinguishing itself as surplus value from itself as value originally pre-posited, which is in turn a result of the objectification of surplus labour. In the production process, labour becomes objectified labour as opposed to living labour capacity, i.e. it becomes capital; a second result of this absorption and appropriation of labour in the production process is that the value pre-posited becomes value in process, and therefore value which creates a surplus value distinct from itself. Only through the conversion of labour into capital during the production process is the pre-posited quantity of value, which was only dunamei capital, realised as actual capital. ["They (the workers) exchange their labour (this should read their labour capacity ) for corn [i.e. the means of subsistence] This becomes their income [i.e. fails to their share as individual consumption] ..,whereas their labour has become capital for their master (Sismondi, Nouveaux principes d' conomie politique ..., Vol. I, p. 90). The workers, giving their labour in exchange, convert it [the product] into capital (1.c., p. 105).] There is one further remark to be made about value or money as objectification of general average social labour: the labour of spinning, for example, may in itself stand above or below the level of average social labour. I.e. a given quantity of spinning labour may be equal to, greater than, or less than, the same quantity of average social labour, e.g. labour time of the same magnitude (length), objectified in a given quantity of money. But if the labour of spinning is performed with the degree of intensity normal in its sphere, hence if the amount of labour employed in yarn manufactured in the course of an hour = the normal quantity of yarn an hour of spinning labour provides on an average under the given social conditions, the labour objectified in the yarn will be socially necessary labour. As such it has a quantitatively determined relation to the average social labour in general which serves as a yardstick, representing accordingly a quantity of the latter, which can be the same, greater or smaller. It therefore itself expresses a definite quantity of average social labour. The labour process becomes the instrument of the valorisation process, of the process of capital s self-valorisation the process of the creation of surplus value. The labour process is subsumed under capital (it is capital s own process) and the capitalist enters the process as its conductor, its director; for him it is at the same time directly a process of the exploitation of alien labour. I call this the formal subsumption of labour under capital. It is the general form of any capitalist production process; but at the same time it is a particular form alongside the developed mode of production which is specifically capitalist because the second involves the first, but the first by no means necessarily involves the second. The production process has become the process of capital itself. It is a process which proceeds with the factors of the labour process into which the capitalist s money has been converted, and which proceeds under his direction, and with the purpose of using money to make more money. When the peasant who previously produced independently for himself becomes a day labourer working for a farmer; when the hierarchical structure valid for the mode of production of the guild type disappears, to be replaced by the simple antithesis between the capitalist and the handicraftsman who is set to work for him as a wage labourer; when the man who was previously a slaveholder employs his former slaves as wage labourers, etc., production processes with a different social determination are thereby converted into the production process of capital. With this, there occur the changes discussed earlier. The previously independent peasant becomes, as a factor in the production process, dependent on the capitalist, who directs that process; his very employment depends on a contract he has concluded in advance as a commodity owner (an owner of labour power) with the capitalist as a money owner. The slave ceases to be an instrument of production belonging to the employer of that instrument. The relation between master and journeyman vanishes. The master stood towards the journeyman in the relation of master of the craft. Now he relates to him merely as the owner of capital, just as the journeyman now only confronts the master as a seller of labour. Before the production process they all confront each other as owners of commodities, having only a monetary relation in common; within the production process, as personified agents of the factors of that process. The capitalist functions as capital , the direct producer as labour , and their relation is determined by labour, as a mere factor in self-valorising capital. Furthermore, the capitalist takes care that the labour possesses the normal level of quality and intensity, and he prolongs the labour process as much as possible, since the amount of surplus value produced by it thereby increases. There is a growth in the continuity of labour when the producers, instead of being dependent as previously on individual customers, no longer have any commodities to sell, but possess a permanent paymaster in the shape of the capitalist. The mystification inherent in the capital-relation also enters the picture. Labour s power of preserving value appears as capital s power of self-preservation, labour s power of creating value appears as capital s power of self-valorisation, and altogether, in line with the concept, objectified labour appears as the employer of living labour. Despite all this, the change indicated does not mean that an essential change takes place from the outset in the real way in which the labour process is carried on, in the real production process. On the contrary, it is in the nature of the matter that where a subsumption of the labour process under capital takes place it occurs on the basis of an existing labour process, which was there before its subsumption under capital, and was formed on the basis of various earlier processes of production and other conditions of production. Capital thus subsumes under itself a given, existing labour process, such as handicraft labour, the mode of agriculture corresponding to small-scale independent peasant farming. If changes take place in these traditional labour processes which have been brought under the command of capital, these modifications can only be the gradual consequences of the subsumption of given, traditional labour processes under capital, which has already occurred. The fact that the labour becomes more intensive, or the duration of the labour process is prolonged, that the labour becomes more continuous and more systematic under the eyes of the interested capitalist, etc., none of these things changes the character of the real labour process itself, the real mode of labour. This therefore forms a great contrast to the specifically capitalist mode of production (labour on a large scale, etc.) which, as has been shown, takes shape as capitalist production progresses, and which revolutionises the kind of labour done and the real mode of the entire labour process, simultaneously with the relations between the various agents of production. It is in order to mark the contrast with the latter mode of the labour process that we call the subsumption of the labour process under capital examined so far which is the subsumption under capital of a mode of labour already developed before the emergence of the capital-relation the formal subsumption of labour under capital. The capital-relation is a relation of compulsion, the aim of which is to extract surplus labour by prolonging labour time it is a relation of compulsion which does not rest on any personal relations of domination and dependence, but simply arises out of the difference in economic functions. This capital-relation as a relation of compulsion is common to both modes of production, but the specifically capitalist mode of production also possesses other ways of extracting surplus value. If, in contrast to this, the basis is an existing mode of labour, hence a given level of development of the productive power of labour and a mode of labour which corresponds to this productive power, surplus value can only be created by prolonging labour time, hence in the manner of absolute surplus value. Therefore, where this is the sole form of production of surplus value, we have the formal subsumption of labour under capital. The general moments of the labour process, as presented in Chapter II thus e.g. the diremption placing the objective conditions of labour the material and means of labour on one side, and the living activity of the worker himself, etc., on the other, are determinations independent of whatever is the historical and specifically the social character of the production process, and they remain equally true for all possible forms of development of the latter; they are in fact the unalterable natural conditions of human labour. This is strikingly demonstrated straight away by the fact that they are valid for human beings working independently, producing, not in an exchange with society, but only in an exchange with nature, such as Robinson. Crusoe, etc. They are therefore in fact absolute determinants of human labour altogether, once human beings have worked their way out of their purely animal character. What from the outset distinguishes the labour process subsumed under capital, even when it is only formally subsumed, and what distinguishes it more and more, even on the basis of the old, traditional mode of labour, is the scale on which it is carried on, hence on the one hand the extent of the means of production advanced, and on the other hand the number of workers under the control of the same employer. What appears as a maximum on the basis of e.g. the handicraft mode of production (e.g. with regard to the number of journeymen) hardly even forms a minimum for the capital-relation. For in fact the latter can hardly enter the picture more than nominally unless the capitalist employs at least enough workers for the surplus value produced by them to be sufficient to serve as income for his own private consumption, and as a fund for accumulation, so that he himself is exempted from direct labour and only works now as a capitalist as the overseer and director of the process, performing as it were the function of capital engaged in its valorisation process and virtually endowed with will and consciousness. And this expansion of the scale of production forms the real basis on which the specifically capitalist mode of production emerges, under otherwise favourable historical circumstances, such as those of the 16th century, although it of course may appear sporadically at isolated points, not as dominating over society, within earlier forms of society. The distinguishing character of the formal subsumption of labour under capital can be made most plain by comparison with situations in which capital already exists in particular subordinate functions, but not yet in its ruling function, the function in which it determines the general form of society, as directly buying labour and directly appropriating the production process. Usurers capital, for example, in so far as it advances raw material, instrument of labour or even both, in the form of money, to the direct producer, as e.g. in India. The immense interest it charges, the interest payments in general it thus extorts from the direct producer, irrespective of their size, are only another name for surplus value. In fact it converts its money into capital by extorting unpaid labour, surplus labour, from the direct producer. But it does not become involved in the production process itself; this continues alongside it in its traditional manner. Usurers capital springs up in part because of the stunted development of this mode of production, and in part it is a means of keeping it stunted, and making it continue to vegetate in the most unfavourable conditions. Here the formal subsumption of labour under capital does not yet take place. Another example is merchants capital, in so far as it gives out orders to a number of direct producers, then collects and sells their products, in which connection it may also advance raw material, etc., or also make monetary advances, etc. This is the form out of which the modern capital-relation in part developed, and it still forms here and there the transition to the capital-relation proper. Here too no formal subsumption of labour under capital has yet taken place. The direct producer continues to be both a seller of commodities and an employer of his own labour. But the transition is already present here to a greater extent than in the relation of usurers capital. Both of these forms, to which we shall return at some later point, are reproduced as parallel and transitional forms within the capitalist mode of production. In Chapter III we exhaustively analysed how the whole real shape of the mode of production changes with the production of relative surplus value [in the case of the individual capitalist, in so far as he seizes the initiative, it is spurred on by the fact that value = the socially necessary labour time objectified in the product, and therefore surplus value begins to be created for him once the individual value of his product stands below its social value, and can as a result be sold above its individual value] and how a specifically capitalist mode of production arises (technologically as well), on the basis of which, and with which, there also begins a simultaneous development of the relations of production corresponding to the capitalist production process relations between the different agents of production, in particular between the capitalist and the wage labourer. The social productive powers of labour, or the productive powers of directly social, socialised (common) labour, are developed through cooperation, through the division of labour within the workshop, the employment of machinery, and in general through the transformation of the production process into a conscious application of the natural sciences, mechanics, chemistry, etc., for particular purposes, technology, etc., as well as by working on a large scale, which corresponds to all these advances, etc. [This socialised labour alone is capable of applying the general products of human development, such as mathematics, etc., to the direct production process, just as, conversely, the development of the sciences presupposes that the material production process has attained a certain level.] This development of the productive power of socialised labour, as opposed to the more or less isolated labour of the individual, etc., and, alongside it, the application of science, that general product of social development, to the direct production process, has the appearance of a productive power of capital, not of labour, or it only appears as a productive power of labour in so far as the latter is identical with capital, and in any case it does not appear as the productive power either of the individual worker or of the workers combined together in the production process. The mystification which lies in the capital-relation in general is now much more developed than it was, or could be, in the case of the merely formal subsumption of labour under capital. On the other hand, the historical significance of capitalist production first emerges here in striking fashion (and specifically), precisely through the transformation of the direct production process itself, and the development of the social productive powers of labour. It was demonstrated in Chapter III that the social character , etc., of the worker s labour confronts him, both notionally and in fact , as not only alien, but hostile and antagonistic, and as objectified and personified in capital. Just as the production of absolute surplus value can be regarded as the material expression of the formal subsumption of labour under capital, so the production of relative surplus value can be regarded as that of the real subsumption of labour under capital. In any case, if each of the two forms of surplus value absolute and relative is considered for itself, in its separate existence and absolute surplus value always precedes relative we can say that two separate forms of the subsumption of labour under capital, or two separate forms of capitalist production, correspond to the two forms of surplus value. The first form of production always constitutes the predecessor of the second, although the second, which is the further developed form, can in turn form the basis for the introduction of the first in new branches of production. Before we proceed any further in considering the real subsumption of labour under capital, the following supplementary remarks are taken from my notebooks. I call the form which rests on absolute surplus value the formal subsumption of labour under capital because it is distinguished only formally from the earlier modes of production on the basis of which it directly originates (is introduced), modes in which either the producers are self-employing, or the direct producers have to provide surplus labour for others. The compulsion exerted there, i.e. the method of extracting surplus labour, is of a different kind. The essential features of formal subsumption are these: 1) the purely money relation between the person who is appropriating the surplus labour and the person who provides it; to the extent that subordination arises, it arises from the particular content of the sale, not from a subordination pre-posited to the sale, which might have placed the producer in a relation other than the money relation (the relation of one commodity owner to another) towards the exploiter of his labour, as a consequence of political conditions, etc. It is only as owner of the conditions of labour that the buyer brings the seller into a condition of economic dependency; it is not any kind of political and socially fixed relation of domination and subordination. 2) Something implied by the first relation for otherwise the worker would not have to sell his labour capacity namely the fact that the objective conditions of his labour (the means of production) and the subjective conditions of his labour (the means of subsistence) confront him as capital, as monopolised by the buyer of his labour capacity. The more completely these conditions of labour confront him as alien. property, the more completely does the relation of capital and wage labour occur formally, hence the formal subsumption of labour under capital, which is the condition and presupposition of its real subsumption. As yet there is no difference in the mode of production itself. The labour process, seen from the technological point of view, continues exactly as it did before, except that now it is a labour process subordinated to capital. Nevertheless, there develops within the production process itself, as previously demonstrated, 1) an economic relation of domination and subordination, in that the consumption of labour capacity is done by the capitalist, and is therefore supervised and directed by him; and 2) a great continuity and intensity of labour and a greater economy in the employment of the conditions of labour, in that every effort is made to ensure that the product only represents socially necessary labour time (or rather, less than. that). This applies both with regard to the living labour employed to produce the product, and with regard to the objectified labour which, as the value of the means of production employed, enters as a constituent element into the value of the product. With the formal subsumption of labour under capital, the compulsion to do surplus labour and therewith on the one hand to create needs and the means to satisfy those needs, and on the other hand to produce in quantities which go beyond the measure of the worker s traditional needs and the creation of free time for development, independently of material production, merely take on a different form from that of earlier modes of production, but it is a form which heightens the continuity and intensity of labour, increases production, is more favourable to the development of variations in labour capacity and accordingly to the differentiation of modes of labour and gaining a living, and finally dissolves the very relation between the owner of the conditions of labour and the worker into a pure relation of purchase and sale, or a money relation, and eliminates from the relation of exploitation all patriarchal, political or even religious admixtures. To be sure, the relation of production itself creates a new relation of domination and subordination (and this also produces political, etc., expressions of itself). The less capitalist production goes beyond the formal relation, the less is the formal relation itself developed, since it presupposes small capitalists alone, who are only marginally distinct from the workers themselves in their training and mode of employment. The difference in the kind of relation of domination and subordination when the mode of production is not yet affected, is most apparent where rural and domestic subsidiary occupations, carried on just for the needs of the family, are transformed into independent capitalist branches of labour. The difference between labour formally subsumed by capital and the previous way of employing labour emerges to the same extent as the growth in the magnitude of the capital employed by the individual capitalist, hence in the number of workers simultaneously employed by him. The capitalist requires a certain minimum amount of capital to be able to stop being a worker himself and to confine himself entirely to the direction of the labour , process and the conduct of trade with the commodities that have been produced. The real subsumption of labour under capital, the capitalist mode of production proper, only takes place when capitalists of a certain importance have directly taken control of production, whether because the merchant becomes an industrial capitalist or because large-scale industrial capitalists have come into existence on the basis of the formal subsumption. [474a] [This note is not related to the last passage but to the preceding one. A free labourer has generally the liberty of changing his master: this liberty distinguishes a slave from a free labourer, as much as an English man-of-war sailor is distinguished from a merchant sailor... The condition of a labourer is superior to that of a slave, because a labourer thinks himself free; and this conviction, however erroneous, has no small influence on the character of a population * (Th. R. Edmonds, Practical Moral and Political Economy, London, 1828, pp. 56-57). The motive which impels a free man to labour is much more violent than the motive impelling a slave: *a free man has to choose between hard labour and starvation * [check this passage], *"a slave between ... and a good whipping (1.c., p. 56). The difference between the conditions of a slave and a labourer under the money system is very inconsiderable; ... the master of the slave understands too well his own interest to weaken his slaves by stinting them in their food; but the master of a free man gives him as little food as possible, because the injury done to the labourer does not fall on himself alone, but on the whole class of masters * (1.c.). In the old world, * to make mankind laborious beyond their wants, to make one part of a state work, to maintain the other part gratuitously,* could only be brought about by slavery, and slavery was therefore introduced universally. *Slavery was then as necessary towards multiplication, as it would now be destructive of it. The reason is plain. If mankind be not forced to labour, they will only labour for themselves; and if they have few wants, there will be few [who] labour. But when states come to be formed and have occasion for idle hands to defend them against the violence of their enemies, food at any rate must be procured for those who don not labour; and as by the supposition, the wants of the labourers are small, a method must be found to increase their labour above the proportion of their wants. For this purpose slavery was calculated... The slaves were forced to labour the soil which fed both them and the idle freemen, as was the case in Sparta; or they filled all the servile places which freemen fill now, and they were likewise employed, as in Greece and in Rome, in supplying with manufactures those whose service was necessary for the state. Here then was a violent method of making mankind laborious in raising food... Men were then forced to labour, because they were slaves to others; men are now forced to labour because they are slaves of their own wants * (J. Steuart, [An Inquiry into the Principles of Political Oecon my .... ] Vol. I, Dublin edition, 1770, pp. 38-40). In the 16th century, says the same Steuart, while on the one hand the lords were dismissing their retainers, the farmers , who were turning themselves into industrial capitalists, were dismissing the idle mouths. Agriculture was converted from a means of subsistence into a trade. The consequence was this: * The withdrawing ... [of] a number of hands from a trifling agriculture forces, in a manner, the husbandmen to work harder; and by hard labour upon a small spot, the same effect is produced as with slight labour upon a great extent * (1.c., p. 105).] If the relation of domination and subordination replaces those of slavery, serfdom, vassalage, patriarchal, etc., relations of subordination, there takes place only a change in their form. The form becomes freer, because the subordination is now only of an objective nature; it is formally speaking voluntary, purely economic. Verte.) Or the relation of domination and subordination in the production process replaces an earlier independence in the production process, as e.g. with all self-sustaining peasants, farmers who only had to pay a rent in kind, whether to the state or to the landlord, with rural-domestic subsidiary industry, or independent handicrafts. Here, therefore, the loss of a previous independence in the production process is the situation, and the relation of domination or subordination is itself the product of the introduction of the capitalist mode of production. Finally, the relation of capitalist and wage labourer can replace the master of the guild type and his journeymen and apprentices, a transition accomplished in part by urban manufacture at its very beginnings. The medieval guild relation, which developed in analogous form in narrow circles in Athens and Rome as well, and was of such decisive importance in Europe for the formation of capitalists on the one hand, and of a free estate of workers on the other, is a limited, not yet adequate, form of the relation of capital and wage labour. There exists here on the one hand the relation of buyer and seller. Wages are paid, and master, journeyman, and apprentice confront each other as free persons. The technological basis of this relation is the handicraft workshop, in which the more or less skilled manipulation of the instrument of labour is the decisive factor of production. Here independent personal labour and therefore its professional development, which requires a longer or shorter period of apprenticeship, determines the result of the labour. The master is admittedly in possession of the conditions of production, the tools of the trade, the material of labour [although the tools may also belong to the journeyman], and the product belongs to him. To that extent he is a capitalist. But as a capitalist he is not a master. He is first and foremost a craftsman himself, and is supposed to be a master of his craft. Within the production process itself he figures as a craftsman as much as do his journeymen, and he is the first to initiate his apprentices into the mysteries of the craft. He has exactly the same relation to his apprentices as a teacher has to his pupils. His relation to apprentices and journeymen is therefore not that of the capitalist as such, but that of the master of a craft, who holds as such a hierarchical position in the corporation, and therefore towards them, which is supposed to rest on his own mastery in the craft. His capital is therefore restricted both in its material form and in the extent of its value; it has not by any means yet attained the free form of capital. It is not a definite quantity of objectified labour, value in general, which can take on this or that form of the conditions of labour, and takes on whatever form it chooses, according to whether it decides to be exchanged for this or that form of living labour, in order to appropriate surplus labour. Only after he has passed through the prescribed stages of apprentice and journeyman, etc., himself produced his masterpiece, can he put money to work in this particular branch of labour, in his own craft, partly by turning it into the objective conditions of the craft, partly by buying journeymen and keeping apprentices. Only in his own craft can he convert his money into capital, i.e. use it not only as the means of his own labour but also as a means of exploiting alien labour. His capital is tied to a particular form of use value, and therefore does not confront his workers as capital. The methods of work he employs are not only acquired by experience but prescribed by guild regulations they count as the necessary methods, and thus from this angle too it is not exchange value but the use value of the labour which appears as the ultimate purpose. The delivery of work of this or that quality does not depend on his own discretion; the whole guild system is rather directed towards the delivery of work of a specific quality. The price of labour is just as little subject to his arbitrary will as the method of work. The restricted form, which prevents his wealth from functioning as capital, is further shown by the fact that. a maximum is in fact prescribed for the extent of the value of his capital. He is not allowed to keep more than a certain number of journeymen, since the guild is supposed to ensure for all masters a proportional share in the receipts of their craft. Finally there is the relation of the master to other masters as a member of the same guild; as such he belongs to a corporation, which has certain communal conditions of production (guild order, etc.), political rights, participation in the city administration, etc. He works to order with the exception of his work for merchants for immediate use value, and so the number of masters is regulated accordingly. He does not confront his workers as a mere merchant. Still less can the merchant convert his money into productive capital; he can only transfer the commodities, he cannot produce them himself. An existence of the estate type the purpose and result of the exploitation of alien labour is here not exchange value as such, not enrichment as such. What is decisive here is the instrument. The raw material is in many branches of labour (e.g. tailoring) delivered to the master himself by his customers. The barrier to production within the whole range of the available consumption is here a law. It is therefore by no means regulated by the barriers of capital itself. In the capitalist relation the barriers disappear along with the politico-social bonds in which capital still moves here, hence not yet appearing as capital. The merely formal conversion of the handicraft trade into a capitalist enterprise, in which case the technological process therefore initially remains the same as before, consists in the removal of all these barriers whereby the relation of domination and subordination also alters. The master is now no longer a capitalist because he is a master, but a master because he is a capitalist. The barrier of his production is no longer conditioned by the barrier of his capital. Capital (money) can be exchanged for any kind of labour at will, and therefore for any conditions of labour too. The capitalist can cease to be a handicraftsman himself. With the sudden expansion of trade, and the resultant demand for commodities from the merchant estate, the guild-type enterprise was driven to go beyond its own barriers, and to turn itself formally into a capitalist enterprise. In comparison with the independent craftsman, who works for stray customers, the continuity [of labour] of the worker, who works for the capitalist, is naturally greater, for his work is not limited by the accidental needs of individual customers, but only by the exploitation requirements of the capital that employs him. In comparison with that of the slave, this work is more productive, because more intensive, for the slave only works under the impulse of external fear, but not for his own existence, which does not belong to him, and yet it is guaranteed. The free worker, in contrast, is driven by his wants. The consciousness (or rather the notion) of free self-determination, of freedom, makes the one a much better worker than the other, as well as the feeling (consciousness) of responsibility bound up with this; for, like every seller of a commodity, he is responsible for the commodity he provides, and he must provide it at a certain quality, if he is not to be swept from the field by other sellers of commodities of the same species. The continuity of the relation between slave and slave holder is preserved by the direct compulsion exerted upon the slave. The free worker, on the other hand, must preserve it himself, since his existence and that of his family depend upon his constantly renewing the sale of his labour capacity to the capitalist. In the case of the slave the minimum wage appears as a constant magnitude, independent of his own labour. In the case of the free worker, the value of his labour capacity, and the average wage corresponding to it, does not present itself as confined within this predestined limit, independent of his own labour and determined by his purely physical needs. The average for the class is more or less constant here, as is the value of all commodities; but it does not exist in this immediate reality for the individual worker, whose wage may stand either above or below this minimum. The price of labour sometimes falls below the value of labour capacity, and sometimes rises above it. Furthermore, there is room for manoeuvre (within narrow limits) for the worker s individuality, as a result of which there are differences in wages, partly between different branches of labour, and partly in the same branch of labour, according to the industriousness, skill, strength, etc., of the worker, and indeed these differences are in part determined by the measure of his own personal performance. Thus the level of the wage appears to vary according to the worker s own labour and its individual quality. This is particularly strongly developed where a piece wage is paid. Although the latter, as we have shown, does not change in any way the general relation between capital and labour, surplus labour and necessary labour, it nevertheless expresses the relation for each individual worker differently, according to the measure of his own personal performance. Great strength or special skills may increase the purchase value of the slave as a person, but this is of no concern to the slave himself. It is different with the free worker, who is himself the proprietor of his labour capacity. The higher value of this labour capacity must be paid to the worker himself, and it is expressed in a higher wage. Great differences in wages are therefore found, according to whether the specific kind of labour requires a more highly developed labour capacity, necessitating greater production costs, or not, and this on the one hand opens up an area of free movement for individual differences, while on the other hand it provides a spur to the development of the individual s own labour capacity. Certain as it is that the mass of labour must consist of more or less unskilled labour, and therefore that the mass of wages must be determined by the value of simple labour capacity, it remains possible for isolated individuals to make their way upwards into higher spheres of labour by particular energy, talent, etc., just as there remains the abstract possibility that this or that worker could himself become a capitalist and an exploiter of alien labour. The slave belongs to a particular master; it is true that the worker must sell himself to capital, but not to a particular capitalist, and thus he has a choice, within a particular sphere, as to who he sells himself to, and can change masters. All these differences in the relation make the activity of the free worker more intensive, more continuous, more agile, and more dexterous than that of the slave, quite apart from the fact that they fit the worker himself to undertake historical actions of an entirely different nature. The slave receives the means of subsistence necessary for his maintenance in a natural form, which is as fixed in kind as in extent in use values. The free worker receives them in the form of money, of exchange value, of the abstract social form of wealth. However much the wage is now in fact nothing but the silver or gold or copper or paper form of the necessary means of subsistence, into which it must constantly be resolved money functioning here as the merely transitory form of exchange value, as mere means of circulation abstract wealth, exchange value, and not a specific traditionally and locally limited use value, still remains for the worker the purpose and result of his labour. It is the worker himself who turns the money into whatever use values he wants, buys the commodities he wants with it, and as an owner of money, as a buyer of commodities, he stands in exactly the same relation to the sellers of commodities as any other buyer. The conditions of his existence and also the limited extent of the value of the money he has acquired naturally compel him to spend it on a rather restricted range of means of subsistence. Nevertheless, some degree of variation is possible here, such as e.g. newspapers, which form part of the necessary means of subsistence of the English urban worker. He can save something, form a hoard. He can also waste his wages on spirits, etc. But in acting this way he acts as a free agent, he must pay his own way; he is himself responsible for the way in which he spends his wages. He learns to master himself, in contrast to the slave, who needs a master. To be sure, this only applies when one considers the transformation of a serf or slave into a free wage labourer. The capitalist relation appears here as a step up the social scale. It is the opposite when an independent peasant or craftsman is transformed into a wage labourer. What a difference there is between the proud yeomanry of England, of whom Shakespeare speaks, and the English agricultural day labourers! Since the purpose of labour is for the wage labourer wages alone, money, a definite quantity of exchange value, in which any specific characteristics of use value have been extinguished, he is completely indifferent to the content of his labour, and therefore to the specific character of his activity. In the guild or caste system, on the other hand, this activity was regarded as the exercise of a vocation, whereas with the slave, as with the beast of burden, it is only a particular kind of activity, of exertion of his labour capacity, imposed on him and handed down from the past. Hence in so far as the division of labour has not made his labour capacity entirely one-sided, the free worker is in principle receptive to, and ready for, any variation in his labour capacity and his working activity which promises better wages (as is indeed demonstrated in the case of the surplus population of the countryside, which constantly transfers to the towns). If the developed worker is more or less incapable of this variation, he still regards it as always open to the next generation, and the emerging generation of workers can always be distributed among, and is constantly at the disposal of, new branches of labour or particularly prosperous branches of labour. In North America, where the development of wage labour has least of all been affected by reminiscences of the old guild system, etc., this variability, this complete indifference to the specific content of labour, this ability to transfer from one branch to another, is shown particularly strongly. Hence the contrast between this variability and the uniform, traditional character of slave labour, which does not vary according to the requirements of production, but rather the reverse, requiring that production should itself be adapted to the mode of labour introduced originally and handed down by tradition, is emphasised by all United States writers as the grand characteristic of the free wage labour of the North as against the slave labour of the South. (See Cairnes.) The constant creation of new kinds of labour, this continuous variation which results in a multiplicity of use values and therefore is also a real development of exchange value this continuing division of labour in the whole of the society first becomes possible with the capitalist mode of production. It begins with the free handicraft guild system, where it does not meet with a barrier in the ossification of each particular branch of the craft itself.] After these supplementary remarks on the formal subsumption of labour under capital we come now to: What is generally characteristic of formal subsumption remains valid in this case too, i.e. the direct subordination to capital of the labour process, in whatever way the latter may be conducted technologically. But on this basis there arises a mode of production the capitalist mode of production which is specific technologically and in other ways, and transforms the real nature of the labour process and its real conditions. Only when this enters the picture does the real subsumption of labour under capital take place. The real subsumption of labour under capital is developed in all the forms which develop relative, as distinct from absolute, surplus value. With the real subsumption of labour under capital there takes place a complete [and a constant, continuous, and repeated a] revolution in the mode of production itself, in the productivity of labour and in the relation between capitalist and worker. In the case of the real subsumption of labour under capital, all the changes in the labour process itself, analysed by us previously, actually take effect. Labour s social powers of production are developed, and with labour on a large scale the application of science and machinery to direct production takes place. On the one hand, the capitalist mode of production, which now takes shape as a mode of production sui generis [in its own right]; changes the shape of material production. On the other hand, this alteration of production s material shape forms the basis for the development of the capital-relation, which in its adequate shape therefore corresponds to a specific level of development of the productive powers of labour. We have already seen that a definite and constantly growing minimum of capital in the hands of the individual capitalist is on the one hand a necessary presupposition, and on the other hand a constant result, of the specifically capitalist mode of production. The capitalist has to be the proprietor or possessor of means of production on a social scale, of an amount of value which has lost any relation to the possible production of the individual or his family. This minimum amount of capital is the greater in any branch of business the more capitalistically it is conducted, the higher the development of the social productivity of labour in it. To the same degree, the capital must increase in value and assume social dimensions; hence it must shed any individual character. The capitalist mode of production develops the productivity of labour, the amount of production, the size of the population, and the size of the surplus population. With tile capital and labour thus released, new branches of business are constantly called into existence, and in these capital can again work on a small scale and again pass through the different developments outlined until these new branches of business are also conducted on a social scale. This is a constant process. At the same time capitalist production tends to conquer all branches of industry it has not yet taken control of, where there is as yet only formal subsumption. Once it has taken control of agriculture, the mining industry, the manufacture of the main materials for clothing, etc., it seizes on the other spheres, where the subsumption is as yet only formal or there are still even independent handicraftsmen. We already noted when considering machinery how its introduction into one branch brings about its introduction into others, and at the same time into other varieties of the same branch. Mechanical spinning, for example, leads to mechanical weaving; mechanical spinning in the cotton industry leads to mechanical spinning in wool, linen., silk, etc. The wider employment of machinery in coal mines, cotton manufactures, etc., made necessary the introduction of the large-scale method of production into machine manufacture itself. Leaving aside the growth in the means of transport required by this mode of production on a large scale, it is on the other hand only the introduction of machinery into machine manufacture itself particularly the cyclical prime motor which has made possible the introduction of steamships and railways, and revolutionised the whole of shipbuilding. Large-scale industry throws as large a mass of human beings into the branches not yet subjected to it, or creates in these branches as large a relative surplus population, as is required for the conversion of handicrafts or of the small, formally capitalist business into a large-scale industry. See in this context the following Tory jeremiad: The material result of capitalist production, apart from the development of the social productive powers of labour, is to raise the quantity of production and to increase and multiply the spheres of production and their subdivisions. Only when this has occurred is the exchange value of the products developed correspondingly the sphere in which they function, or are realised, as exchange value. Admittedly, production for production s sake production as an end in itself already enters the picture with the formal subsumption of labour under capital; it does this as soon as it generally becomes the direct purpose of production to produce as much surplus value, and as large a surplus value, as possible, as soon as, in general, the exchange value of the product becomes the decisive purpose. And yet this tendency, which is immanent in the capital-relation, is first realised in an adequate manner and itself becomes a necessary condition, even technologically when the specifically capitalist mode of production has developed, and with it the real subsumption of labour under capital. We have already analysed the essence of this latter mode of production so exhaustively that we can be very brief here. It is production which is not limited by any predetermining or predetermined barriers set by needs. (Its antagonistic character implies barriers to production, which it constantly wants to go beyond. Hence crises, overproduction, etc.) This is one side, one distinction from the earlier mode of production; the positive side, if you like. The other side is the negative, or antagonistic one: production in opposition to, and without concerning itself about, the producer. The real producer as mere means of production, objective wealth as an end in itself. And therefore the development of this objective wealth in opposition to, and at the cost of, the human individual. The productivity of labour in general = the maximum of product with the minimum of labour, hence the greatest possible cheapening of the commodities. This becomes a law in the capitalist mode of production, independently of the will of the individual capitalist. And this law is only realised because it implies another one, namely that the scale of production is not determined according to given needs but rather the reverse: the number of products is determined by the constantly increasing scale of production, which is prescribed by the mode of production itself. Its purpose is that the individual product, etc., should contain as much unpaid labour as possible, and this is only attained by engaging in production for production s sake. On the one hand this appears as a law, to the extent that the capitalist who produces on too small a scale would embody in his products more than the quantity of labour socially necessary. It therefore appears as the adequate implementation of the law of value, which first develops completely on the basis of the capitalist mode of production. On the other hand, however, it appears as the drive of the individual capitalist, who endeavours to reduce the individual value of his commodity below its socially determined value in order to break through this law, or to cheat it to gain an advantage for himself. What all these forms of production (of relative surplus value) have in common, apart from the increase in the minimum amount of capital required for production, is that the common conditions for the labour of many directly cooperating workers as such permit economies in contrast to the fragmentation of these conditions which occurs with production on a small scale, in that the operation of these common conditions of production does not condition a proportionally equal increase in their mass and their value. Their common, simultaneous use allows their relative value to fall (in relation to the product), however much their absolute value grows.

Economic Manuscripts: Chapter 2: Results of the Direct Production Process

https://www.marxists.org/archive/marx/works/1864/economic/ch02a.htm

Since the direct purpose and the actual product of capitalist production is surplus value, only such labour is productive, and only such an exerter of labour capacity is a productive worker, as directly produces surplus value. Hence only such labour is productive as is consumed directly in the production process for the purpose of valorising capital. From the simple standpoint of the labour process in general, such labour appeared to us to be productive as was realised in a product, or more precisely in a commodity. But from the standpoint of the capitalist production process, this element has to be added to the definition: such labour is productive as directly valorises capital, or produces surplus value, hence is realised, without any equivalent for the worker, for the performer of the labour, in a surplus value, expressed in a surplus produce, hence in an excess increment of commodities for the monopoliser of the means of labour, for the capitalist; only such labour is productive as posits the variable capital, and therefore the total capital, as C + DC = C + Dv. It is therefore labour which directly serves capital as the agency of its self-valorisation, as a means to the production of surplus value. The capitalist labour process does not abolish the general determinations of the labour process. It produces products and commodities. To that extent, such labour remains productive as is objectified in commodities as a unity of use value and exchange value. But the labour process is only a means to capital s valorisation process. Hence such labour is productive as is represented in commodities. But if we consider the individual commodity, such labour is productive as represents unpaid labour in an aliquot part of the commodity, or, if we consider the total product, such labour is productive as represents nothing but unpaid labour in an aliquot part of the total quantity of commodities hence represents a product which costs the capitalist nothing. That worker is productive who performs productive labour, and that labour is productive which directly creates surplus value, i.e. valorises capital. Only the narrow-minded bourgeois, who regards the capitalist form of production as its absolute form, hence as the sole natural form of production, can confuse the question of what are productive labour and productive workers from the standpoint of capital with the question of what productive labour is in general, and can therefore be satisfied with the tautological answer that all that labour is productive which produces, which results in a product, or any kind of use value, which has any result at all. That worker alone is productive whose labour process = the process of the productive consumption of labour capacity the vehicle of the labour by capital or the capitalist. Two things immediately follow from this: Firstly: Since with the development of the real subsumption of labour under capital or the specifically capitalist mode of production it is not the individual worker but rather a socially combined labour capacity that is more and more the real executor of the labour process as a whole, and since the different labour capacities which cooperate together to form the productive machine as a whole contribute in very different ways to the direct process by which the commodity, or, more appropriate here, the product, is formed, one working more with his hands, another more with his brain, one as a manager, engineer. or technician, etc., another as an overlooker, the third directly as a manual worker, or even a mere assistant, more and more of the functions of labour capacity are included under the direct concept of productive labour, and their repositories under the concept of productive workers, workers directly exploited by capital and altogether subordinated to its valorisation and production process. If one considers the total worker constituting the workshop, his combined activity is directly realised materialiter in a total product which is at the same time a total quantity of commodities and in this connection it is a matter of complete indifference whether the function of the individual worker, who is only a constituent element of this total worker, stands close to direct manual labour or is far away from it. But then: The activity of this total labour capacity is its direct productive consumption by capital, i.e. it is capital s process of self-valorisation, the direct production of surplus value, and therefore a point we shall develop further later on the direct conversion of surplus value into capital. Secondly: The more detailed determinations of productive labour follow automatically from the given characteristic features of the capitalist production process. Firstly, in confronting capital or the capitalist, the owner of labour capacity figures as its seller irrationally expressed, as we have seen, as the direct seller of living labour, not of a commodity. He is a wage labourer. This is the first presupposition. Secondly, however, this preliminary process, which belongs to circulation, introduces a stage by which the worker s labour capacity and his labour are directly incorporated into capital s production process as a living factor. Labour capacity itself becomes one of capital s components, its . variable component in fact, which not only preserves in part and reproduces in part the capital values that have been advanced, but at the same time increases them, and therefore converts them into self-valorising value, into capital, for the first time, through the creation of surplus value. This labour directly objectifies itself during the production process as a quantity of value in flux. The first condition may occur without the second. A worker may be a wage labourer, a day labourer, etc. This always takes place, [even] if the second moment is absent. Every productive worker is a wage labourer; but this does not mean that every wage labourer is a productive worker. In all cases where labour is bought in order to be consumed as use value, as a service, and not in order to replace the value of the variable capital as a living factor and to be incorporated into the capitalist production process, this labour is not productive labour, and the wage labourer is not a productive worker. His labour is then consumed on account of its use value, not as positing exchange value, it is consumed unproductively, not productively. The capitalist therefore does not confront labour as a capitalist, as the representative of capital. He exchanges his money for labour as income, not as capital. The consumption of the labour does not constitute M-C-M , but C-M-C (the last symbol represents the labour, or the service itself). Money functions here only as means of circulation, not as capital. The commodities the capitalist buys for his private consumption are not consumed productively, they do not become factors of capital; just as little do the services he buys for his consumption, voluntarily or through compulsion (from the state, etc.), for the sake of their use value. They do not become a factor of capital. They are therefore not productive kinds of labour, and those who perform them are not productive workers. The more production in general develops into the production of commodities, the more does everyone have to become, and want to become, a dealer in commodities a maker of money, whether out of his product, or his services, if the product only exists in the form of services, owing to the way it is naturally constituted. This money making appears as the ultimate purpose of every kind of activity. (See Aristotle [De republica. Libri VIII]) In capitalist production, the production of products as commodities, on the one hand, and the form of labour as wage labour, on the other, become absolute. A large number of functions and activities which were surrounded with a halo, regarded as ends in themselves, and done for nothing or paid for in an indirect way (so that professionals, such as physicians and barristers in England, could not or cannot sue for payment), are on the one hand converted directly into wage labour, however their content or their mode of payment may differ. On the other hand, they become subject that is, the estimation of their value, the price of these various activities, from the prostitute s to the king s, becomes subject to the laws that regulate the price of wage labour. The analysis of this latter point belongs to a special discussion of wage labour and wages, rather than to this section. This phenomenon, that with the development of capitalist production all services are converted into wage labour, and all those who perform these services are converted into wage labourers hence that they have this characteristic in common with productive workers, gives even more grounds for confusing the two in that it is a phenomenon which characterises, and is created by, capitalist production itself. On the other hand, it gives the apologists [of capitalism] an opportunity to convert the productive worker, because he is a wage labourer, into a worker who merely exchanges his services (i.e. his labour as a use value) for money. This makes it easy to pass over in silence the differentia specifica of this productive worker , and of capitalist production as the production of surplus value, as the process of the self-valorisation of capital, which incorporates living labour as merely its AGENCY. A soldier is a wage labourer, a mercenary, but he is not for that reason a productive worker. A further error has two sources. Firstly: Some of the labour which produces commodities in capitalist production is performed in a manner which belongs to earlier modes of production, where the relation of capital and wage labour does not yet exist in practice, and therefore the category of productive and unproductive labour, which corresponds to the capitalist standpoint, is entirely inapplicable., But in accordance with the ruling mode of production even those relations which have not yet been subsumed under it in fact are subsumed under it notionally. The self-employed labourer, for example, is his own wage labourer, and his own means of production confront him in his own mind as capital. As his own capitalist, he employs himself as a wage labourer. Anomalies of this type then offer a favourable field for outpourings of drivel about productive and unproductive labour. Secondly: Certain unproductive kinds of labour may incidentaliter be connected with the production process, and their price may even enter into the price of the commodity, hence the money laid out for them may so far form a part of the capital advanced, and their labour may therefore appear as labour which is exchanged not for income but directly for capital. Let us straight away take the last case, taxes; the price of government services, etc. But this belongs to the faux frais de production, [overhead costs of production] and is a form accidental to the capitalist production process in and for itself, and in no way conditioned by it, or necessary to or immanent in it. If for example all indirect taxes were converted into direct ones, taxes would continue to be paid, but would no longer form a capital advance, rather an expenditure of income. The possibility of this change in the form shows its external character, its indifference to, and contingency for, the capitalist production process. With a change in the form of productive labour, in contrast, the income of capital would dry up and capital itself would cease to exist. Further examples are legal proceedings, contracts, etc. All these relate only to conditions made between the owners of commodities as buyers and sellers of commodities; they have nothing to do with the relation of capital and labour. Those who perform these functions may thereby become the wage labourers of capital; this does not make them productive workers. Productive labour is only an abbreviated expression for the whole relation, and the manner in which labour capacity and labour figure in the capitalist production process. Hence if we speak of productive labour, we speak of socially determined labour, labour which implies a very definite relation between its buyer and its seller. Productive labour is exchanged directly for money as capital, i.e. for money which is in itself capital, has the quality of functioning as capital, and confronts labour capacity as capital. Productive labour is therefore labour which for the worker only reproduces the previously posited value of his labour capacity; but as value-creating activity it valorises capital, and counterposes the values created by labour to the worker himself as capital. The specific relation between objectified and living labour, which makes the former capital, makes the latter productive labour. The specific product of the capitalist production process, surplus value, is only created through exchange with productive labour. What forms its specific use value for capital is not its particular useful character, any more than it is the particular useful qualities of the product in which it is objectified, but its character as the element that creates exchange value (surplus value). The capitalist production process is not merely a process of the production of commodities. It is a process which absorbs unpaid labour, making the means of production into means for the absorption of unpaid labour. It emerges from what has been said so far that to be productive labour is a quality of labour which in and for itself has absolutely nothing to do with the particular content of the labour, its particular usefulness or the specific use value in which it is expressed. Labour with the same content can therefore be both productive and unproductive. Milton, for example, who did Paradise Lost, was an unproductive worker. In contrast to this, the writer who delivers hackwork for his publisher is a productive worker. Milton produced Paradise Lost in the way that a silkworm produces silk, as the expression of his own nature. Later on he sold the product for 5 and to that extent became a dealer in a commodity. But the Leipzig literary proletarian who produces books, e.g. compendia on political economy, at the instructions of his publisher is roughly speaking a productive worker, in so far as his production is subsumed under capital and only takes place for the purpose of the latter s valorisation. A singer who sings like a bird is an unproductive worker. If she sells her singing for money, she is to that extent a wage labourer or a commodity dealer. But the same singer, when engaged by an entrepreneur who has her sing in order to make money, is a productive worker, for she directly produces capital. A schoolmaster who educates others is not a productive worker. But a schoolmaster who is engaged as a wage labourer in an institution along with others, in order through his labour to valorise the money of the entrepreneur of the knowledge-mongering institution, is a productive worker. Yet most of these kinds of work, from the formal point of view, are hardly subsumed formally under capital. They belong rather among the transitional forms. On the whole, the kinds of work which are only enjoyed as services, and yet are capable of being exploited directly in the capitalist way, even though they cannot be converted into products separable from the workers themselves and therefore existing outside them as independent commodities, only constitute infinitesimal magnitudes in comparison with the mass of products under capitalist production. They should therefore be left out of account entirely, and treated only under wage labour, under the category of wage labour which is not at the same time productive labour. The same kind of labour (e.g. gardening, tailoring, etc.) can be performed by the same working man in the service of an industrial capitalist, or of the immediate consumer. In both cases the worker is a wage labourer or a day labourer, but in the first case he is a productive worker, in the second an unproductive one, because in the first case he produces capital, in the second case he does not; because in the first case his labour forms a moment in capital s process of self-valorisation, in the second case it does not. A large part of the annual product, the part consumed as income and no longer re-entering production afresh as a means of production, consists of extremely paltry products (use values), serving to satisfy the most miserable appetites, fancies, etc. But content is entirely irrelevant to whether the labour is determined to be productive or not [although the development of wealth would of course be checked if a disproportionate part were reproduced in this way, instead of being reconverted into means of production and means of subsistence, which enter anew into reproduction, whether that of the commodities or that of the labour capacities themselves which are, in short, consumed productively]. This kind of productive labour produces use values, is objectified in products, which are only destined for unproductive consumption. These products have in reality, as articles, no use value for the reproduction process. [They can only obtain this through an interchange of matter, through an exchange with reproductive use values; but that is only a change of place. Somewhere they must be consumed as unreproductive. Other articles of the same kind which fall into the unproductive consumption process might also in case of necessity again function as capital. A more detailed discussion of this belongs to CHAPTER III of Book II, on the reproduction process. Only one anticipatory remark needs to be made here: It is impossible for conventional political economy to say anything sensible about the barriers to luxury production, from the standpoint of capitalist production itself. But the matter is quite simple if the moments of the reproduction process are properly analysed. If the reproduction process is hindered, or if its progress, in so far as it is already conditioned by the natural increase of the population, is prevented by the disproportionate employment of the kind of productive labour which is expressed in unreproductive articles, with the result that too few necessary means of subsistence, or too few means of production, etc., are reproduced, luxury must be condemned from the standpoint of capitalist production. Apart from that, luxury is an absolute necessity for a mode of production which produces wealth for the non-producers, hence must give wealth the necessary forms in which it can be appropriated by the wealthy simply for their enjoyment.] For the worker himself, this productive labour, like all other labour, is merely a means to the reproduction of his necessary means of subsistence; for the capitalist, to whom the nature of the use value and the character of the concrete labour employed are in themselves matters of complete indifference, it is merely a moyen de battre monnaie, de produire la survalue. [means of coining money, of producing surplus value] (An example: Whether I buy trousers, or I buy cloth and invite a journeyman tailor into my house, paying him for his service (i.e. his tailoring labour), is to me a matter of complete indifference. I buy the trousers from the merchant tailor because they are cheaper that way. In both cases I convert the money I expend into a use value which is to fall to the share of my individual consumption, to satisfy my individual requirements; I do not convert it into capital. The journeyman tailor performs the same service for me, whether he works for me in my house, or under the merchant tailor. But the service rendered by the same journeyman tailor, when employed by a merchant tailor, to that capitalist, consists in the fact that he works for 12 hours and only receives payment for 6, etc. The service he performs for the capitalist therefore consists in his working 6 hours for nothing. The fact that this occurs in the form of the making of trousers only hides the real transaction. As soon as the merchant tailor is able to do so, he endeavours to reconvert the trousers into money, i.e. into a form in which the particular character of the labour of tailoring has disappeared completely, and the service performed is expressed in the fact that one thaler has become two. Service is in general only an expression for the particular use value of labour, in so far as this is useful not as a material object but as an activity. Do ut facias, facio ut facias, facio ut des, do ut desaahere ["I give that you may make , I make that you may make , I make that you may give , I give that you may give contractual formulas in Roman law (Corpus iuris civilis, Digesta XIX, 5.5] these are all entirely indifferent forms of the same relation, whereas in capitalist production the do ut facias expresses a very specific relation between objective wealth and living labour. Hence because the specific relation of labour and capital is not contained at all in this buying of services, being either completely extinguished or not present at all, it is naturally the favourite way for Say, Bastiat and their associates to express the relation of capital and labour.) The worker too buys services with his money, which is a kind of expenditure, but no way to convert money into capital. No one buys medical or legal services as a means of converting the money expended in this way into capital. Many of the services belong to the consumption costs of commodities, as in the case of cooks, etc. The difference between productive and unproductive labour consists merely in whether labour is exchanged for money as money or for money as capital. Where I buy the commodity, as e.g. in the case of the self-employed labourer, artisan, etc., the category does not come into consideration at all, because there is no direct exchange between money and labour of any kind at all, but rather between money and a commodity. (With non-material production, even if it is conducted purely for the purpose of exchange, purely produces commodities, two things are possible: 1) it results in commodities which exist separately from the producer, hence can circulate in the interval between production and consumption as commodities; this applies to books, paintings, and all the products of artistic creation which are distinct from the actual performance of the executant artist. Here capitalist production is applicable on a very restricted scale. In so far as these people do not employ assistants, etc., in the manner of sculptors, they mostly work (if they are not independent) for merchant etc., capital, e.g. for booksellers; this is a relation which itself constitutes merely a form transitional to a mode of production capitalist only in form. The fact that it is precisely in these transitional forms that the exploitation of labour reaches its highest level does not alter the situation at all; 2) the product is inseparable from the act of producing it. Here too there is only a restricted field for the capitalist mode of production, and it can in the nature of things only take place in a few spheres. (I need the doctor, not his errand boy.) In educational institutions, for example, teachers may well be merely wage labourers for the entrepreneur who owns the teaching factory. But similar cases do not need to be considered when dealing with capitalist production as a whole.) The difference between productive and unproductive labour is important as regards accumulation, since one of the conditions for the reconversion of surplus value into capital is that the exchange should be with productive labour alone. The capitalist, as representative of capital engaged in its valorisation process productive capital performs a productive function, which consists precisely in directing and exploiting productive labour. The capitalist class, in contrast to the other consumers of surplus value, who do not stand in a direct and active relation to its production, is the productive class par excellence. [See Ricardo] (As director of the labour process the capitalist can perform productive labour in the sense that his labour is included in the overall labour process which is embodied in the product.) As yet, we are only acquainted with capital within the direct production process. The situation with the other functions of capital and with the agents used by capital to perform these functions can only be examined later. The productive (and therefore also its opposite, the unproductive) character of labour therefore depends on this, that the production of capital is the production of surplus value, and the labour employed by capital is labour that produces surplus value. (This is perhaps better placed in Chapter III of Book III.) Since the purpose of capitalist production (and therefore of productive labour) is not the existence of the producer but the production of surplus value, all necessary labour which produces no surplus labour is superfluous and worthless to capitalist production. The same is true for a nation of capitalists. All gross product which only reproduces the worker, i.e. produces no net product (surplus produce), is just as superfluous as that worker himself [who produces no surplus value]. Or, if certain workers were necessary for the production of net product at a given stage of the development of production, they become superfluous at a more advanced stage of production, which no longer requires them. Or, in other words, only the number of people profitable to capital is necessary. The same is true for a nation of capitalists. Even the philanthropists can have no objection to bring forward against this statement by Ricardo. For it is always better that out of 10 million people only 50% should vegetate as pure production machines for 5 million, than that out of 12 million 7 million, or 58 1/3%, should do so. The circumstance that the purpose of capitalist production is net produce, which in fact merely takes the form of the surplus produce, in which surplus value is expressed, implies that capitalist production is essentially the production of surplus value. This runs counter to e.g. the antiquated point of view, corresponding to earlier modes of production in accordance with which the urban authorities, etc., for example, prohibited the use of inventions in order not to deprive workers of their subsistence, since the worker as such counted as an end in himself, and the livelihood he earned in his station counted as his privilege, which the whole of the old order was concerned to maintain. It also runs counter to the point of view, still tinged with nationalism, of the protectionist system (as opposed to free trade, that industries, etc., should be protected nationally against foreign competition, etc., as being the sources for the existence of a large number of human beings. But it also runs counter to Adam Smith s view that e.g. the investment of capital in agriculture is more productive because the same amount of capital sets more hands to work. For the developed capitalist mode of production, these are all outdated, and untrue, false, notions. A large gross product (as far as the variable part of capital is concerned) in proportion to a small net product is = a small productive power of labour, and therefore of capital. There is nevertheless a whole range of confused conceptions traditionally associated with this distinction between gross and net product. These derive in part from the Physiocrats (see Book IV) and in part from Adam Smith, who continues on occasion to confuse capitalist production with production for the direct producers. If an individual capitalist sends money abroad, where he gets interest at 10%, whereas at home he might be able to employ a large number of surplus people, from the capitalist standpoint he deserves an award for good citizenship, for this virtuous burgher is putting into effect the law that distributes capital within the world market, as also within the confines of a given society, according to the rate of profit provided by each particular sphere of production, and precisely in this way brings the various spheres of production into equilibrium and proportion. (Whether the money is delivered e.g. to the Emperor of Russia for wars against Turkey, etc., is irrelevant.) In acting in this way, the individual capitalist is only following the immanent law and therefore the morality of capital to produce as much surplus value as possible. But these issues have nothing to do with the examination of the direct production process. Furthermore, capitalist production often has non-capitalist production counterposed to it, e.g. agriculture for subsistence, in which hands are employed, is counterposed to agriculture for trade, which provides a much bigger product for the market, and therefore permits a net produce to be extracted in manufacturing from people previously employed in agriculture. This contrast, however, is not a subdivision within the capitalist mode of production itself. On the whole, as we have seen, the law of capitalist production is to increase constant capital as against variable capital and surplus value, the net produce; and secondly to increase the net produce in proportion to the part of the product which replaces variable capital, i.e. wages. At present these 2 things are confused. If the total product is called tide gross product, it increases in capitalist production as against the net product; if the part of the product which can be reduced to wages + net produce is called the gross product, the net product increases as against the gross product. Only in agriculture (through the conversion of tilled fields into pastureland, etc.) does the net product often grow at the expense of the gross product (the total amount of product) as a result of certain characteristics peculiar to rent, which do not belong here. Otherwise, the doctrine that the net product is the final and highest goal of production is only a brutal, but correct expression of the fact that the valorisation of capital, and therefore the creation of surplus value, without any concern for the worker, is the driving force and the essence of capitalist production. The highest ideal of capitalist production corresponding to the relative growth of the net product is the greatest possible reduction in the number of people living on wages, and the greatest possible in crease in the number of people living off the net product. Since living labour is already within the production process incorporated into capital, the social productive powers of labour all present themselves as productive forces; as properties inherent in capital, just as in money the general character of labour, in so far as it functioned to create value, appeared as the property of a thing. This is even more true for the following reasons. 1) Although labour is objectified in the product as something that belongs to the capitalist, it belongs to the individual worker as the expression of labour capacity, as exertion (it is what the worker really pays the capitalist, what he gives him). However the social combination of the individual labour capacities, in which the latter only function as particular organs of the total labour capacity constituting the workshop as a whole, does not belong to the workers, but rather confronts them as a capitalist arrangement; it is inflicted upon them. 2) These social productive powers of labour, or productive powers of social labour, first develop historically with the specifically capitalist mode of production, hence appear as something immanent in the capital-relation and inseparable from it. 3) The objective conditions of labour assume a changed shape with the development of the capitalist mode of production, through the dimensions in which, and the economy with which, they are employed (even leaving aside the form of machinery, etc.). They undergo further development as concentrated means of production, representing social wealth, and their extent and their effect is that of the conditions of production of socially combined labour, this last expression in fact summarising the whole development. Even if we leave aside the combination of labour, the social character of the conditions of labour which includes among other things their form as machinery, and fixed capital in all its forms appears as something entirely autonomous, which exists independently of the worker as a mode of capital s existence, and therefore also as something arranged by the capitalists independently of the workers. Like the social character of their own labour, only even more so, the social character the conditions of production acquire as communal conditions of production of combined labour appears as capitalist as a character possessed by those conditions of production as such, independently of the workers. Ad 3) we should like to add here the following remarks, which in part anticipate what comes later: (Profit, as distinct from surplus value, may rise owing to the economical utilisation of communal conditions of labour. Savings may be made e.g. on building costs, heating, lighting, etc., the value of the prime motor may not grow in the same proportion as its power increases, there may be economies in the prices of raw materials, re-use of waste products, reductions in administration costs, reductions in the cost of storage with production on a larger scale, etc. All this relative cheapening of constant capital combined with an absolute increase in its value rests on the fact that these means of production, means of labour as also material of labour, are employed communally, and this communal utilisation has as its absolute presupposition the communal cooperation of the conglomerated workers; it is itself therefore only the objective expression of the social character of labour, and of the resultant social productive power, just as the particular shape those conditions take, e.g. as machinery, usually rules out their employment except by combined labour. But towards the worker who moves within them they appear as given conditions independent of him, as the shape of capital. The economical use of those conditions (and the resultant increase in profit and cheapening of commodities) therefore also appears as something quite different from the surplus labour of the worker; it appears as the direct deed and accomplishment of the capitalist who functions here altogether as the personification of the social character of labour, of the total workshop as such. Science, the general intellectual product of social development, equally appears here as directly incorporated into capital (the application of science as science, separated from the knowledge and skill of the individual worker, to the material process of production), and the general development of society, because it is exploited by capital against labour, because it acts as a productive power of capital over against labour, appears as the development of capital, and the more so because for the great majority [of workers] the emptying of labour capacity [of all content] proceeds at the same pace.) The capitalist himself only holds power as the personification of capital. (This is why in double-entry book-keeping he constantly figures twice, e.g. as debtor to his own capital.) The productivity of capital consists first of all, when formal subsumption is considered, merely in the compulsion to perform surplus labour; a compulsion that the capitalist mode of production shares with previous modes of production, but exerts in a form more favourable to production. Even from the point of view of the merely formal relation the general form of capitalist production, which has its less developed mode in common with the more developed the means of production, the objective conditions of labour, do not appear as subsumed under the worker; rather, he appears as subsumed under them. Capital employs labour. Even this relation in its simplicity is a personification of things and a reification of persons. But the relation becomes still more complex and apparently more mysterious in that, with the development of the specifically capitalist mode of production, not only do these things these products of labour, both as use values and as exchange values stand on their hind legs vis- -vis the worker and confront him as capital but also the social forms of labour appear as forms of the development of capital, and therefore the productive powers of social labour, thus developed, appear as productive powers of capital. As such social forces they are capitalised vis- -vis labour. In fact, communal unity in cooperation, combination in the division of labour, the application of the forces of nature and science, as well as the products of labour in the shape of machinery, are all things which confront the individual workers as alien, objective, and present in advance, without their assistance, and often against them, independent of them, as mere forms of existence of the means of labour which are independent of them and rule over them, in so far as they are objective; while the intelligence and volition of the total workshop, incarnated in the capitalist or his understrappers (representatives), in so far as the workshop is formed by the combination of the means of labour, confront the workers as functions of capital, which lives in the person of the capitalist. The social forms of their own labour the subjective as well as the objective forms or the form of their own social labour, are relations constituted quite independently of the individual workers; the workers as subsumed under capital become elements of these social constructions, but these social constructions do not belong to them. They therefore confront the workers as shapes of capital itself, as combinations which, unlike their isolated labour capacities, belong to capital, originate from it and are incorporated within it. And this assumes a form which is the more real the more, on the one hand, their labour capacity is itself modified by these forms, so that it becomes powerless when it stands alone, i.e. outside this context of capitalism, and its capacity for independent production is destroyed, while on the other hand the development of machinery causes the conditions of labour to appear as ruling labour technologically too, and at the same time to replace it, suppress it, and render it superfluous in its independent forms. In this process, in which the social characteristics of their labour confront them as capitalised, to a certain extent in the way that e.g. in machinery the visible products of labour appear as ruling over labour the same thing of course takes place for the forces of nature and science, the product of general historical development in its abstract quintessence: they confront the workers as powers of capital. They become in fact separated from the skill and knowledge of the individual worker, and although if we look at them from the point of view of their source they are in turn the product of labour, they appear as incorporated into capital wherever they enter the labour process. The capitalist who employs a machine does not need to understand it (see Ure). But vis- -vis the workers, realised science appears in the machine as capital. And in fact all these applications of science, of the forces of nature and of large masses of products of labour applications based on social labour appear only as means of exploitation of labour, means of appropriating surplus labour, hence, vis- -vis labour, as forces belonging to capital. Capital naturally employs all these means only to exploit labour, but in order to exploit labour, it must employ them in production. And thus the development of the social productive powers of labour and the conditions for this development appear as the work of capital, and not only does the individual worker relate passively to this work, it also takes place in antagonism to him. Capital itself is dual, since it consists of commodities. Exchange value (money), but self-valorising value, value which creates value, grows as value, obtains an increment, through the fact that it is value. This can be reduced to the exchange of a given quantity of objectified labour for a greater quantity of living labour. Use value, and here capital appears according to its particular situation in the labour process. But precisely here it does not just remain material of labour, means of labour to which labour belongs, and which have incorporated labour, but involves also, along with labour, its social combinations and the development of the means of labour which corresponds to these social combinations. Capitalist production first develops the conditions of the labour process on a large scale first develops them separately from the single independent worker developing both its objective and its subjective conditions, but developing them as powers which dominate the individual worker and are alien to him. Thus capital becomes a very mysterious being. The conditions of labour are heaped up vis- -vis the worker as social powers; and in this form they become capitalised. Capital is therefore productive: 1) as the compulsion to do surplus labour. Labour is productive precisely as the performer of this surplus labour, through the difference between the value of labour capacity and its valorisation; 2) as the personification and representative, the reified shape of the social productive powers of labour or the productive powers of social labour. The way in which the law of capitalist production the creation of surplus value, etc. enforces this has already been discussed. It appears as inflicted by the capitalists upon each other and upon the workers hence it in fact appears as a law of capital operating against both capital and labour. The natural social powers of labour do not develop in the valorisation process as such but in the real labour process. They therefore appear as properties which belong to capital as a thing, they appear as its use value. Productive labour as value producing always confronts capital as the labour of isolated workers, whatever social combinations those workers may enter into in the production process. Thus whereas capital represents the social productive power of labour towards the workers, productive labour always represents towards capital only the labour of the isolated workers. We saw in dealing with the accumulation process how past labour, in the form of the forces and conditions of production that have already been produced, raises reproduction, in terms of both use value and exchange value both the amount of value a particular quantity of living labour preserves and the quantity of use values it produces anew and how the moment through which it does this appears as a force immanent in capital, because objectified labour always functions vis- -vis the-worker in capitalised form. The transposition of the social productive powers of labour into material attributes of capital is so strongly rooted in people s minds that the advantages of machinery, of the application of science, inventions, etc., in this alienated form are conceived of as the necessary form, and therefore all these things are regarded as attributes of capital. What serves here as the basis is 1) the form in which the matter appears on the basis of capitalist production, and therefore also in the consciousness of those whose ideas are confined within that mode of production; 2) the historical fact that this development first took place in the capitalist mode of production, as distinct from earlier modes of production, and that the antagonistic character of this development therefore appears to be immanent in it.

Economic Manuscripts: Chapter 2: Results of the Direct Production Process

https://www.marxists.org/archive/marx/works/1864/economic/ch02b.htm

As we have seen, capital is M-C-M , self-valorising value, value that gives birth to value. Initially, the sum of money or of value advanced is only capital dunamei,[potentially] only capital in itself, even after it has been converted into the factors of the labour process means of production, constant capital and into labour capacity, into which the variable capital has been converted. This mere potentiality was even more the case before its conversion into the factors of the real production process. Only within the latter, through the real incorporation of living labour into the objective forms of existence of capital, only through the real absorption of additional labour, is this labour converted into capital; and not only this labour is converted, but the sum of value advanced is converted from possible capital, value earmarked as capital, into effective and actual capital. What took place during the process as a whole? The worker sold the right to dispose of his labour capacity in order to secure the necessary means of subsistence, for a given value, determined by the value of his labour capacity. What, therefore, is the result from his point of view? Simplement and purement [simply and purely] the reproduction of his labour capacity. So what did he give away? He gave value-preserving, value-creating and value-increasing activity, his labour. He therefore comes out of the process as he entered it, if we leave aside the wearing down of his labour power. He emerges as merely subjective labour power, which must pass through the same process again, in order to preserve itself. Capital, in contrast, does not come out of the process as it entered it. It is in the process that it is first converted into actual capital, into self-valorising value. The total product is now the form in which capital exists as realised capital, and as such it again confronts labour as the property of the capitalist, as a power which is independent and has been created by labour itself. Hence the production process was not only its reproduction process, but its process of production as capital. Previously the conditions of production confronted the worker as capital in so far as he found them to be present over against him in independence. Now it is the product of his own labour that he finds confronting him as conditions of production that have been converted into capital. What started as a presupposition is now the result of the production process. Saying that the production process creates capital is only another way of saying that it has created surplus value. But the matter does not rest here. The surplus value is reconverted into additional capital, is manifested in the formation of new capital or capital of greater size. Thus capital has created capital; it has not just realised itself as capital. The accumulation process is itself an immanent moment of the capitalist production process. It includes the creation of new wage labourers who are means to the realisation and augmentation of the existing capital, whether because sections of the population not previously seized on by capitalist production, such as women and children, are now subsumed under it, or because a greater number of workers, resulting from the natural increase of the population, are subjected to it. It emerges from a closer examination that capital itself regulates this production of labour power, the production of the mass of human beings it intends to exploit, in accordance with its requirements for this exploitation. Capital therefore does not just produce capital, it produces a growing mass of workers, the material which alone enables it to function as additional capital. Hence not only does labour produce the conditions of labour on an ever increasing scale as capital, in opposition to itself; capital, for its part, produces on an ever increasing scale the productive wage labourers it requires. Labour produces its conditions of production as capital, and capital produces labour as the means of its realisation as capital, as wage labour. Capitalist production is not only the reproduction of the relation, it is its reproduction on an ever growing scale; and in the same proportion as the social productive power of labour develops, along with the capitalist mode of production, the pile of wealth confronting the worker grows, as wealth ruling over him, as capital, and the world of wealth expands vis- -vis the worker as an alien and dominating world. At the opposite pole, and in the same proportion, the worker s subjective poverty, neediness and dependency develop. The deprivation of the worker and the abundance of capital correspond with each other, they keep in step. At the same time the numbers of the working proletarian these living means for the production of capital, increase. The growth of capital and the increase of the proletariat therefore appear as associated products of the same process, even if they are polar opposites. The relation is not only reproduced, not only produced on an ever more massive scale, it not only creates more workers for itself and constantly seizes upon branches of production previously not subjected to it, it is also reproduced under circumstances which are more and more favourable to one side, the capitalists, and more and more unfavourable to the other, the wage labourers. This was demonstrated in our presentation of the specifically capitalist mode of production. From the point of view of the continuity of the production process, the wage is only the part of the product constantly produced by the worker which is converted into means of subsistence for him, and therefore into the means of preserving and increasing the labour capacities capital requires for its own self-valorisation, for its vital process. This preservation and increase of labour capacities, as the result of the process, therefore itself appears as nothing but the reproduction and extension of capital s own conditions of reproduction and accumulation. (See the Yankee. ) With this there also disappears the superficial appearance the relation originally possessed, that commodity owners with equal rights met each other in circulation, on the commodity market, distinguished from each other, like all other commodity owners only by the material content of their commodities, the particular use value of the commodities they had to sell to each other. Or, this original form of the relation only remains behind as the superficial appearance of the capitalist relation that underlies it. Two aspects need to be distinguished here, through which the reproduction of the relation itself on an ever increasing scale as a result of the capitalist production process is distinguished from the first form, as it on the one hand emerges historically and on the other hand constantly presents itself anew on the surface of developed capitalist society. 1) Firstly, with regard to the initial process which occurs within circulation, the sale and purchase of labour capacity. The capitalist production process is not only the conversion into capital of the value or the commodities the capitalist in part brings to market and in part retains for himself within the labour process; these products converted into capital are not the capitalist s products, they are the worker s. The former repeatedly sells the latter a part of his product the necessary means of subsistence for labour, in order to preserve and increase labour capacity, the buyer himself, and he repeatedly lends him another part of his product, the objective conditions of labour, as a means for the self-valorisation of capital, as capital. While the worker thus reproduces his products as capital, the capitalist reproduces the worker as a wage labourer, and therefore as a seller of his own labour. The relation between mere commodity sellers implies that they exchange their own labour, as incorporated in different use values. The sale and purchase of labour capacity, as the constant result of the capitalist production process, implies that the worker must constantly buy back a part of his own product by selling his living, labour. With this, the superficial appearance of a simple relation between commodity owners fades away. This constant sale and purchase of labour capacity, and the constant confrontation between the worker and the commodity produced by the worker himself, as buyer of his labour capacity and as constant capital, appears only as the form mediating his subjugation to capital, the subjugation of living labour as a mere means to the preservation and increase of the objective labour which has achieved an independent position vis- -vis it. This perpetuation of the relation of capital as buyer and the worker as seller of labour is a form of mediation which is immanent in this mode of production; but it is a form which is only distinct in a formal sense from other, more direct, forms of the enslavement of labour and property in labour on the part of the owner of the conditions of production. It glosses over as a mere money relation the real transaction and the perpetual dependence, which is constantly renewed through this mediation of sale and purchase. Not only are the conditions of this commerce constantly reproduced; in addition to this, what one buys with, and what the other is obliged to sell, is the result of the process. The constant renewal of this relation of sale and purchase only mediates the permanence of the specific relation of dependence, giving it the deceptive semblance of a transaction, a contract, between commodity owners who have equal rights and confront each other equally freely. This initial relation now appears as itself an immanent moment of the domination, produced in capitalist production, of objective labour over living labour. Hence both these groups are mistaken: those who regard wage labour, the sale of labour to capital, and therefore the form of the wage system, as external to capitalist production; it is an essential form of mediation of the capitalist production relation, constantly produced anew by this relation itself; and those who find the essence of the capital-relation in this superficial relation, in this essential formality, this semblance of the capital-relation, and therefore pretend to characterise the relation by subsuming workers and capitalists together under the general relation of commodity owners, thereby engaging in apologetics and extinguishing the differentia specifica of the capital-relation. 2) For the capital-relation to occur at all, a definite historical stage and form of social production is presupposed. Means of communication and production, and needs, have first to develop within an earlier mode of production which go beyond the old relations of production and enforce their transformation into the capital-relation. But they only need to be sufficiently developed to allow the formal subsumption of labour under capital to take place. On the basis of this altered relation, however, specific changes in the mode of production develop, creating new material forces of production, on the basis of which the new mode of production first develops and therewith in fact creates new real conditions for itself. A complete economic revolution thus takes place. On the one hand it creates, for the first time, the real conditions for the domination of capital over labour, completing them, giving them an appropriate form, and on the other hand, in the productive powers of labour developed by it in opposition to the worker, in the conditions of production and relations of communication, it creates the real conditions for a new mode of production, superseding the antagonistic form of the capitalist mode of production, and thus lays the material basis for a newly shaped social life process and therewith a new social formation. This is an essentially different conception from that of the bourgeois political economists, themselves imprisoned in capitalist preconceptions, who are admittedly able to see how production is carried on within the capital-relation, but not how this relation is itself produced, and how at the same time the material conditions for its dissolution are produced within it, thereby removing its historical justification as a necessary form of economic development, of the production of social wealth. In contrast to this, we have seen not only how capital produces, but how it is itself produced, and how it emerges from the production process in a form essentially different from that in which it entered the process. On the one hand it transforms the mode of production; on the other hand this altered shape of the mode of production and this particular stage of the development of the material forces of production is the basis and the condition the presupposition of its own formation. Not only do the objective conditions of the production process appear as its result; their specific social character also appears in this way. The social relations, and therefore the social position, of the agents of production towards each other the relations of production themselves are produced, and are the constantly renewed result of the process . 73) The Colliers. The effects of this dependence of the colliers on the exploiters for their dwellings are shown whenever there is a strike. In November 1863, for example, there was a strike in Durham. The people were evicted in the severest weather, with wives and children, and their furniture, etc., was thrown into the street. What was then important above all was to find shelter during the cold nights. A large proportion of them slept in the open air; some broke into their evacuated dwellings and occupied them during the night. The next day the mine-owners had the doors and windows nailed up and barred, in order to cut off from those who had been ejected the luxury of sleeping on the bare floors of the empty cottages during the freezing nights. The people then resorted to building wooden cabins, and wigwams of turf, but these were again torn down by the owners of the fields. A large number of children died or had their health ruined during this campaign of labour against capital (Reynolds s Newspaper, November 29, 1863 ). 75) Ricardo actually comforts the workers by saying that as a result of the increasing productive power of labour and the increase in the total capital as against the variable component of capital, the portion of surplus value consumed as income will also increase, hence an increased demand for menial servants! (Ricardo, On the Principles of Political Economy, and Taxation, p. 475). 76) * Property ... is essential to preserve the common unskilled Labourer from falling into the condition of a piece of machinery, bought at the minimum market price at which it can be produced, that is at which labourers can be got to exist and propagate their species, to which he is invariably reduced sooner or later, when the interests of capital and labour are quite distinct, and are left to adjust themselves under the sole operation of the law of supply and demand * (Samuel Laing, National Distress, London, 1844, pp. 45-46). 77) Ireland. Emigration. In so far as the real increase or reduction in the working POPULATION during the ten-year industrial cycle can exert a perceptible influence on the labour market, this could only be in England, and we take it as a model, because here the capitalist mode of production is [highly] developed, and does not, unlike on the European continent, operate largely on the basis of a peasant economy which does not correspond to it. Here we can only speak of the impact of capital s need for valorisation on the extension or contraction of emigration. It should first be remarked that the emigration of capital, i.e. the part of the annual income which is invested abroad as capital, particularly in the colonies and in the United States of America, is far larger in proportion to the annual fund for accumulation than the number of emigrants in proportion to the annual increase in population. Some. of these emigrants are in fact merely following capital abroad. Furthermore, the emigration from England, if we consider its main component, the agricultural one, consists for the most part not of workers but of tenant farmers sons, etc. This has so far been more than replaced by immigration from Ireland. The periods of stagnation and crisis, when the pressure to emigrate is at its strongest, are the same periods as those during which more excess capital is sent abroad, and the periods of declining emigration are the same as those of declining emigration of superfluous capital. The absolute proportion between capital employed in the country and labour power is therefore little affected by the fluctuations of emigration. If emigration from England were to take on serious dimensions, in relation to the annual increase of the population, it would lose its position on the world market. The Irish emigration since 1848 has given the lie to all the expectations and prophecies of the. Malthusians. First of all, they had declared an emigration exceeding the increase of population to be an impossibility. The Irish solved that problem despite their poverty. Those who have emigrated send back every year most of the resources needed to finance the emigration of those left behind. Secondly, however, the same gentlemen had made the prophecy that the famine which swept away one million people, and the subsequent exodus, would have the same effect in Ireland as the black death had had in England in the mid-14th century. Precisely the opposite has occurred. Production has fallen more quickly than the population, and the decline in the means of employing the agricultural workers has been quicker too, although their wages are no higher today, taking into account the changes in the price of the means of subsistence, than in 1847. The population has fallen in 15 years from 8 million to approximately 4 1/2 million. To be sure, cattle production has increased to a certain extent, and Lord Dufferin, who wants to convert Ireland into a mere sheep pasture, is quite right to say that the population is still far too high. In the meantime, the Irish have taken not only their bones but themselves to America, and the cry exoriare aliquis ultor [rise some avenger] resounds threateningly on the other side of the Atlantic. If we look at the last two years, 1864 and 1865, we find the following figures for the main crops: (The official Agricultural Statistics, Ireland, Dublin, 1866, p. 4). This does not prevent individual persons from enriching themselves during the rapid ruin of the country as a whole. Thus e.g. 79) Thus e.g. the talk of shifting present burdens onto future generations by means of government debts. A can give B, who lends him commodities either in reality or in appearance, a promissory note on future products, just as indeed there exist poets and musicians of the future. But A and B together never consume an atom of the future product. Every epoch pays for its own wars. A worker, on the other hand, can expend the labour of the three following years in a single year. Although the formation of capital and the capitalist mode of production rest essentially on both the ending of the feudal mode of production and the expropriation of the peasants, handicraftsmen, and in general on the ending of the mode of production which rests on the private property of the direct producer in his conditions of production; although the capitalist mode of production, once it is introduced, develops in the same proportion as that form of private property is done away with, along with the mode of production founded on it, hence to the degree that those direct producers are expropriated in the name of the concentration of capital (centralisation); although that process of expropriation which is later repeated systematically in the clearing of estates, in part introduces; as an act of violence, the capitalist mode of production, both the theory of the capitalist mode of production (political economy, the philosophy of law, etc.) and the capitalist himself in his conception of the matter like to confuse the capitalist s form of property and appropriation, which rests on the appropriation of alien labour in its progress and, essentially, on the expropriation of the direct producer, with the above-mentioned mode of production which on the contrary presupposes the private property of the direct producer in his conditions of production a presupposition under which the capitalist mode of production in agriculture and manufacture, etc., would be impossible and therefore also like to present every attack on the capitalist form of appropriation as an attack on the other kind of property, the property that has been worked for, indeed an attack on all property. Of course they always experience great difficulty in presenting the expropriation of the mass of working people from their property as the vital condition for property which rests on labour. [By the way, private property of that form always implies at least slavery for the members of the family, who are used and exploited to the full by the head of the family.] The general legal conception, from Locke to Ricardo, is therefore that of petty-bourgeois property, while the relations of production they actually describe belong to the capitalist mode of production. What makes this possible is the relation of buyer and seller, which remains the same formally in both forms. With all these writers one finds the following duality: 1) economically they oppose private property resting on labour, and show the advantages of the expropriation of the mass [of workers] and the capitalist mode of production; 2) but ideologically and legally the ideology of private property resting on labour is transferred without further ado to property resting on the expropriation of the direct producer. This is a clear demonstration of what the noble sentiments of feudalism really amounted to!

Economic Manuscripts: Results of the Direct Production Process by Karl Marx 1864

https://www.marxists.org/archive/marx/works/1864/economic/ch03.htm

The text of some other pages of Notebook XXI was fully or partly incorporated by Marx into the following sections of Chapter Six: Supplementary Remarks on the Formal Subsumption of Labour under Capital , The Real Subsumption of Labour under Capital , Gross and Net Product , and Mystification of Capital . The expression proud yeomanry of England is probably a paraphrase of Shakespeare s expressions good yeomen , fight gentlemen of England , and fight boldly yeomen . See Henry V, etc., Act III, Scene 1, and Richard III, Act V, Scene III. 204 A reference to A. Goudar, Les intir ts de la France mal entendus, dons les branches de 1'agriculture, du commerce, de la population, des finances, de la marine, et de l'industrie: Par un citoyen. Vol. 1, Amsterdam, 1757. This work is mentioned in Ch. Smith s book Three Tracts on the Corn-Trade and Corn-Laws, Second edition, London, 1766, of which Marx made a synopsis in Supplementary Notebook B. 205 The price of one yard fell by 1/4 because the aggregate value of the product had trebled (from 120 to 360), while the quantity of the product had increased fourfold (from 1,200 to 4,800 yards). 206 The figure 120 is incorrect, since originally the calculation was 96c + 20v + 28s, which, if calculated per 100 units of advanced capital, gives 83c + 17v + 24s = 124. 207 This refers to the missing part of the Manuscript of 1863-64 and to sections that Marx planned to write for this chapter. 208 A reference to the missing part of the manuscript (cf. Capital, Vol. I, Part III, Chapter IX). 209 A reference to the missing part of the manuscript (cf. Capital, Vol. I, Part IV, Chapter XII). 210 In the preface to the first edition of his book Die erundlagen der National konomie, Wilhelm Roscher described himself as the Thucydides of political economy. 211 A reference to the missing part of the manuscript (cf. Capital, Vol. 1, Part If, Chapter V). 212 Marx reproduced the last three sentences in the first edition of Vol. 1 of Capital as a transition to the questions he deals with in Vol. If (see K. Marx, Das Kapital, Erster Band, Hamburg, 1867), but did not include them in any of the subsequent editions. 213 Fluxion and fluens are concepts of the calculus of fluxions, the earliest form of differential and integral calculus, developed by Newton. He used the term fluens to denote the values of a system which change simultaneously and constantly, depending on time, and the term fluxion to denote the velocity with which the fluens changes. Thus, fluxions are time derivatives of fluenses. 214 Marx apparently means that A (c+v) = Dc + Dv and, since the increment of c is constant, the difference is equal to Dv. 215 The manuscript does not contain Note 1). It was probably to refer the reader to Marx s determination of use value given in A Contribution to the Critique of Political Economy. Part One. 216 Ik reference to the missing part of the manuscript (cf. also Capital, Vol. I, Part VI, Chapter XIX). 217 A reference to the missing part of the manuscript (cf. present edition, Vol. 30, pp. 40-41, and Capital, Vol. 1, Part Ill, Chapter XI). 218 Note 2) is missing from the text of the manuscript. Marx apparently left its number by mistake when he decided to transfer the note to another place. 219 The manuscript does not contain the text of Note 2). 220 A reference to the missing part of the manuscript (cf. present edition, Vol. 28, p. 188; Vol. 32, pp. 35-37, 408-09; Vol. 33, pp. 256-57, 285-86 and Capital, Vol. I, Part II). 221 Page 262 has not reached us. For pp. 263-64 see this volume, pp. 348-50. 222 The text that follows, originally belonging to the missing part of the manuscript, was later incorporated by Marx into Chapter Six, which affected the pagination, pp. 96-107 becoming 469a-469m. A comparison of the text of this section (pp. 469a-469m) with the third chapter of the Manuscript of 1861-63 shows that Marx used the latter as a basis for the text given here. 224 Marx apparently means the Society for Promoting the Diffusion of Useful Knowledge, founded by Henry Broom in Britain in 1827. It sought to achieve its aim by publishing popular and inexpensive books. 225 This work is also mentioned by Thomas Hodgskin himself in his pamphlet The Natural and Artificial Right of Property Contrasted.... London, 1832, pp. 165-66. Marx noted this in his synopsis of Hodgskin s pamphlet (see Supplementary Notebook A, p. 12). 226 This refers to the missing part of the 1863-64 Manuscript (cf. Capital, Vol. I, Part II). 227 This refers to the missing part of the 1863-64 Manuscript (cf. Capital, Vol. I, Part III, Chapter VII). 228 The Civil War in the United States between the economically and socially progressive states of the North and the states of the South, dominated by slave-owners, which lasted from April 1861 to April 1865. The effect the US Civil War had on the economic situation in Britain was analysed in a number of reports issued by the British chambers of commerce and in articles published in The Economist, such as The Board of Trade Return. The Trade with the United States , No. 922, May 4, 1861, pp. 480-81, and, The Difficult Position of English Commerce with Reference to the American Civil War , No. 925, May 18, 1861, pp. 534-35. The Morning Post of May 16, 1864, suggested that the American Civil War had helped Britain to avoid a crisis. Marx examined the problem in the articles The Crisis in England , written on about November 1, 1861, (Die Presse, No. 305, November 6, 1861), and British Commerce , written on November 2, 1861 and published in The New-York Daily Tribune, No. 6440, November 23, 1861. 229 Marx criticises Proudhon s axiom in The Poverty of Philosophy, in the Economic Manuscripts of 1857-58, and in Capital, Vol. I, Part V, Chapter XVI. 230 A reference to the missing part of the manuscript (cf. Capital, Vol. I, Part V, Chapter XVI). 231 A reference to the missing part of the manuscript (cf. present edition, Vol. 30, pp 54-60; Capital, Vol. 1, Part II). 232 A reference to the missing part of the manuscript (cf. Capital, Vol. I, Part IV, Chapter XIII). 233 The quotation that follows was written by Marx on an unnumbered separate sheet. 234 A reference to the missing part of the manuscript (cf. Capital, Vol. I, Part VI, Chapter XXI). 235 A reference to the missing, part of the manuscript (cf. Capital, Vol. I, Part IV, Chapter XV). 236 A reference to the missing part of the manuscript (cf. Capital, Vol. I, Part VII, Chapter XXIV). 237 Marx dealt with the subject at greater length in the Economic Manuscript of 1861-63, first in Theories of Surplus Value as part of his analysis of bourgeois political economy and then in the part of the manuscript devoted to relative surplus value. The conclusions formulated here are largely based on those studies. 238 A reference to the missing part of the manuscript (cf. Capital, Vol. I, Part V, Chapter XVIII). 239 Marx probably means Part III The Law of the Tendency of the Rate of profit to Fall , of Vol. III of Capital. 240 This is, in all probability, Marx s first mention of the fourth book of Capital, On the History of the Theory , which he planned to write. He also refers to Book IV in his letter to Ludwig Kugelmann of October 13, 1866. The fifth section of the Manuscript of 1861-63 Theories of Surplus Value was the first rough draft of the fourth book of Capital. On the views of the Physiocrats see present edition, Vol. 30, pp. 352-76. 241 A reference to the missing part of the manuscript (cf. Capital, Vol. I, Part III). 242 A reference to the missing part of the manuscript (cf. Capital, Vol. I, Part VII, Chapter XXV). 243 A reference to the missing part of the manuscript (cf. Capital, Vol. 1, Part If, Chapter IV). 244 There is no such note in the manuscript. Marx probably has in mind the American economist Carey, who examined the relationship between the growth of population and the growth of capital in his work Principles of Political Economy, Philadelphia, 1837. 245 The following is another draft of the beginning of Chapter Six. 246 Here the manuscript of the third and last section of the chapter breaks off. 247 Marx means the mass Irish emigration to the USA after 1848 (cf. Capital, Vol. I, Part VII, Chapter XXV). 248 Marx means the pandemic of plague that swept Europe in 1347-50. According to some estimates, it took a toll of about 25 million, approximately a quarter of the entire population of Europe at that time (see also Capital, Vol. I, Part VII, Chapter XXV).

Economic Manuscripts: Footnotes: Results of the Direct Production Process

https://www.marxists.org/archive/marx/works/1864/economic/footnote.htm

73) The Colliers. The effects of this dependence of the colliers on the exploiters for their dwellings are shown whenever there is a strike. In November 1863, for example, there was a strike in Durham. The people were evicted in the severest weather, with wives and children, and their furniture, etc., was thrown into the street. What was then important above all was to find shelter during the cold nights. A large proportion of them slept in the open air; some broke into their evacuated dwellings and occupied them during the night. The next day the mine-owners had the doors and windows nailed up and barred, in order to cut off from those who had been ejected the luxury of sleeping on the bare floors of the empty cottages during the freezing nights. The people then resorted to building wooden cabins, and wigwams of turf, but these were again torn down by the owners of the fields. A large number of children died or had their health ruined during this campaign of labour against capital (Reynolds s Newspaper, November 29, 1863 ). 75) Ricardo actually comforts the workers by saying that as a result of the increasing productive power of labour and the increase in the total capital as against the variable component of capital, the portion of surplus value consumed as income will also increase, hence an increased demand for menial servants! (Ricardo, On the Principles of Political Economy, and Taxation, p. 475). 76) * Property ... is essential to preserve the common unskilled Labourer from falling into the condition of a piece of machinery, bought at the minimum market price at which it can be produced, that is at which labourers can be got to exist and propagate their species, to which he is invariably reduced sooner or later, when the interests of capital and labour are quite distinct, and are left to adjust themselves under the sole operation of the law of supply and demand * (Samuel Laing, National Distress, London, 1844, pp. 45-46). 77) Ireland. Emigration. In so far as the real increase or reduction in the working POPULATION during the ten-year industrial cycle can exert a perceptible influence on the labour market, this could only be in England, and we take it as a model, because here the capitalist mode of production is [highly] developed, and does not, unlike on the European continent, operate largely on the basis of a peasant economy which does not correspond to it. Here we can only speak of the impact of capital s need for valorisation on the extension or contraction of emigration. It should first be remarked that the emigration of capital, i.e. the part of the annual income which is invested abroad as capital, particularly in the colonies and in the United States of America, is far larger in proportion to the annual fund for accumulation than the number of emigrants in proportion to the annual increase in population. Some of these emigrants are in fact merely following capital abroad. Furthermore, the emigration from England, if we consider its main component, the agricultural one, consists for the most part not of workers but of tenant farmers sons, etc. This has so far been more than replaced by immigration from Ireland. The periods of stagnation and crisis, when the pressure to emigrate is at its strongest, are the same periods as those during which more excess capital is sent abroad, and the periods of declining emigration are the same as those of declining emigration of superfluous capital. The absolute proportion between capital employed in the country and labour power is therefore little affected by the fluctuations of emigration. If emigration from England were to take on serious dimensions, in relation to the annual increase of the population, it would lose its position on the world market. The Irish emigration since 1848 has given the lie to all the expectations and prophecies of the Malthusians. First of all, they had declared an emigration exceeding the increase of population to be an impossibility. The Irish solved that problem despite their poverty. Those who have emigrated send back every year most of the resources needed to finance the emigration of those left behind. Secondly, however, the same gentlemen had made the prophecy that the famine which swept away one million people, and the subsequent exodus, would have the same effect in Ireland as the black death had had in England in the mid-14th century. Precisely the opposite has occurred. Production has fallen more quickly than the population, and the decline in the means of employing the agricultural workers has been quicker too, although their wages are no higher today, taking into account the changes in the price of the means of subsistence, than in 1847. The population has fallen in 15 years from 8 million to approximately 4 1/2 million. To be sure, cattle production has increased to a certain extent, and Lord Dufferin, who wants to convert Ireland into a mere sheep pasture, is quite right to say that the population is still far too high. In the meantime, the Irish have taken not only their bones but themselves to America, and the cry exoriare aliquis ultor [rise some avenger] resounds threateningly on the other side of the Atlantic. If we look at the last two years, 1864 and 1865, we find the following figures for the main crops: 1864 1865 Decrease qrs qrs Wheat 875,782 826,783 48,999 Oats 7,826,332 7,659,727 166,605 Barley 761,909 732,017 29,892 Bere 15,160 13,989 1,171 1864 1865 Decrease Tons Tons Potatoes 4,312,388 3,865,990 446,398 Turnips 3,467,659 3,301,683 165,976 Flax 64,506 39,561 24,945 (The official Agricultural Statistics, Ireland, Dublin, 1866, p. 4). This does not prevent individual persons from enriching themselves during the rapid ruin of the country as a whole. Thus e.g. 79) Thus e.g. the talk of shifting present burdens onto future generations by means of government debts. A can give B, who lends him commodities either in reality or in appearance, a promissory note on future products, just as indeed there exist poets and musicians of the future. But A and B together never consume an atom of the future product. Every epoch pays for its own wars. A worker, on the other hand, can expend the labour of the three following years in a single year. Although the formation of capital and the capitalist mode of production rest essentially on both the ending of the feudal mode of production and the expropriation of the peasants, handicraftsmen, and in general on the ending of the mode of production which rests on the private property of the direct producer in his conditions of production; although the capitalist mode of production, once it is introduced, develops in the same proportion as that form of private property is done away with, along with the mode of production founded on it, hence to the degree that those direct producers are expropriated in the name of the concentration of capital (centralisation); although that process of expropriation which is later repeated systematically in the clearing of estates, in part introduces; as an act of violence, the capitalist mode of production, both the theory of the capitalist mode of production (political economy, the philosophy of law, etc.) and the capitalist himself in his conception of the matter like to confuse the capitalist s form of property and appropriation, which rests on the appropriation of alien labour in its progress and, essentially, on the expropriation of the direct producer, with the above-mentioned mode of production which on the contrary presupposes the private property of the direct producer in his conditions of production a presupposition under which the capitalist mode of production in agriculture and manufacture, etc., would be impossible and therefore also like to present every attack on the capitalist form of appropriation as an attack on the other kind of property, the property that has been worked for, indeed an attack on all property. Of course they always experience great difficulty in presenting the expropriation of the mass of working people from their property as the vital condition for property which rests on labour. [By the way, private property of that form always implies at least slavery for the members of the family, who are used and exploited to the full by the head of the family.] The general legal conception, from Locke to Ricardo, is therefore that of petty-bourgeois property, while the relations of production they actually describe belong to the capitalist mode of production. What makes this possible is the relation of buyer and seller, which remains the same formally in both forms. With all these writers one finds the following duality: 1) economically they oppose private property resting on labour, and show the advantages of the expropriation of the mass [of workers] and the capitalist mode of production; 2) but ideologically and legally the ideology of private property resting on labour is transferred without further ado to property resting on the expropriation of the direct producer. This is a clear demonstration of what the noble sentiments of feudalism really amounted to!

Economic Manuscripts: Results of the Direct Production Process by Karl Marx 1864

https://www.marxists.org/archive/marx/works/1864/economic/notes.htm

November 4, 1864 London [...] Sometime ago London workers sent an address about Poland to Paris workers and summoned them to common action in this matter. The Parisians on their part sent over a deputations headed by a worker called Tolain, the real workers' candidate at the last election in Paris, a very nice fellow. (His companions too were quite nice lads.) A public meeting in St. Martin's Hall was summoned for Septemeber 28, 1864, by Odger (shoemaker, president of the Council here of all London trade unions and also especially of the Trade Unions Suffrage Agitation Society, which is connected with Bright), and Cremer, mason and secretary of the Masons' Union. (These two organized the big meeting of the trade unions in St. James's Hall for North America, under Bright, ditto the Garibaldi demonstrations.) A certain Le Lubez was sent to ask me if I would take part on behalf of the German workers, and especially if I would supply a German worker to speak at the meeting, etc. I provided them with Eccarius, who came off splendidly, and ditto was present myself as a mute figure on the platform. I knew that this time real "powers" were involved on both the London and Paris sides and therefore decided to waive my usual standing rule to decline any such invitations. (Le Lubez is a young Frenchman, i.e., in his thirties, who has however grown up in Jersey and London, speaks English excellently, and is a very good intermediary between the French and English workers.) (Music teacher and French lessons.) At the meeting, which was packed to suffocation (for there is now evidently a revival of the working classes taking place), Major Wolff (Thurn-Taxis, Garibaldi's adjutant) represented the London Italian Working Men's Society. It was decided to found a "Working Men's Internatinoal Association", the General Council of which should be in London and should act as an "intermediary" between the workers' societies in Germany, Italy, France, and England. Ditto that a Genreal Working Men's Congress should be summoned in Belgium in 1865. A provisional committee was appointed at the meeting: Odger, Cremer, and many others, some of them old Chartists, old Owenits, etc., for England; major Wolff, Fontana, and other Italians for Italy; Le Lubez, etc., for France; Eaccrius and I for Germany. The committee was empowered to coopt as many members as it chose. So far so good. I attended the first meeting of the committee. A subsommittee (including myself) was appointed to draft a declaration of principles and provisional statutes. Being unwell, I was prevented from attending the meeting of the subcommittee and the meeting of the whole committee which followed. In these two meetings which I had missed that of the subcommittee and the subsequent one of the whole committee the following had taken place: Major Wolff had handed in the reglement [statutes] of the Italian Workers' Societies (which possess a central organization but, as later transpired, are really associated benefit societies) to be used for the new association. I saw the stuff later. It was evidently a compilation of Mazzini's, so you alredy know the spirit and phraseology in which the real question, the workers' question, was dealt with. Also how nationalities were shoved in. In addition an old Owenite, Weston now a manufacturer himself, a very amiable and worthy man had drawn up a program of indescribable breadth and full of the most extreme confusion. The subsequent general committee meeting instructed the subcommittee to remodel Weston's program, ditto Wolff's regulations. Wolff himself left in order to attend the Congress of Italian Working Men's Associations in Naples and get them to decide on joining the London Central Association. Another meeting of the subcommittee which I again failed to attend, because I was informed of the rendezvous too late. At this a "declaration of principles" and a new version of Wolff's statutes were put forward by Le Lubez and accepted by the committee for submission to the general committee. The general committee met on October 18. As Eccarius had written me that delay would be dangerous, I appeared and was really frightened when I heard the worthy Le Lubez read out an appallingly wordy, badly written, and utterly undigested preamble, pretending to be a declaration of principles, in which Mazzini could be detected everywhere, the whole thing crusted over with the vaguest tags of French socialism. Added to this, the Italian statutes were taken over in the main, and these, apart from all their other faults, aim at something which is in fact utterly impossible, a sort of central government of the European working classes (with Mazzini in the background, of course). I put up a mild opposition and after a lot of talking backwards and forwards Eccarius proposed that the subcommittee should submit the thing to further "editing". On the other hand the "sentiments" contained in Lubez' declaration were voted for. Two days later, on October 20, Cremer (for the English, Fontana (Italy), and Le Lubez assembled at my house. (Weston was prevented.) Hitherto I had never had the documents (those of Wolff and Le Lubez) in my hand so could not prepare anything, but was firmly determined that if possible not one single line of the stuff should be allowed to stand. In order to gain time I proposed that before we "edited" the preamble we should "discuss" the rules. This took place. It was an hour after midnight by the time the first of forty rules was agreed to. Cremer said (and this was what I had aimed at): We have nothing to put before the committee, which meets on October 25. We must postpone the meeting til November 1. But the subcommittee can get together on October 27 and attempt to reach a definite conclusion. This was agreed to and the "papers" "left behind" for my opinion. I saw that it was impossible to make anything out of the stuff. In order to justify the extremely strange way in which I intended to present the "sentiment" already "voted for", I wrote an Address to the Working Classes (which was not in the original plan: a sort of review of the adventures of the working classes since 1845); on the pretext that everything material was included in the address and that we ought not to repeat the same things three times over, I altered the whole preamble, threw out the declaration of principles, and finally replaced the 40 rules with 10. Insofar as international politics come into the address, I speak of countries, not of nationalities, and denounce Russia, not the lesser nations. My proposals were all accepted by the subcommittee. Only I was obliged to insert two phrases about "duty" and "right" into the preamble to the statutes, ditto "truth, morality, and justice", but these are placed in such a way that they can do no harm. At the meeting of the general committee my address, etc., was agreed to with great enthusiasm (unanimously). The discussion on the method of printing, etc., takes place next Tuesday. Le Lubez has a copy of the address to translated into French and Fontana one to translate into Italian. (For a state there is a weekly paper called the Bee-Hive, edited by Potter the trade unionist, a sort of Moniteur.) I myself am to translate the stuff into German. It was very difficult to frame the thing so that our view [Engels and Marx] should appear in a form acceptable from the present standpoint of the workers' movement. In a few weeks the same people will be holding meetings for the franchise with Bright and Cobden. It will takes time before the re-awakened movement allows the old boldness of speech. It will be necessary to be fortiter in re, suaviter in modo [bold in matter, mild in manner]. As soon as the stuff is printed you will get it.... Yours, K.M.

Letters: The International Workingmen's Association, Marx joins the International

https://www.marxists.org/archive/marx/works/1864/letters/64_11_04-abs.htm

In an earlier issue , while prattling about the newspaper L 'Association, the same Herr M. H. made similar insinuations about the Paris friends of the London Committee. We declare his insinuations to be preposterous slander. For the rest, we are glad to find in this incident confirmation of our conviction that the Paris proletariat is as irreconcilably opposed as ever to Bonapartism in both its forms, the Tuileries form and the form of the Palais-Royal, and never for a moment considered the plan of selling its historical honour (or should we, instead of "its historical honour", say "its historical birthright as bearer of revolution"?) for a mess of pottage. We recommend this example to the German workers. The criticism by Marx and Engels compelled the editors to change the newspaper's tone to some extent. Issue No. 21 of February 12 1865 carried an item by Hess in which he withdrew his assertions. For that reason, Marx and Engels did not insist on the publication of this statement; at the same times, as is seem from Marx's letter to Engels of February 13, 1865, they decided to stop contributing to the newspaper for the time being. Marx and Engels announced their final break with Der Social-Demokrat on February 23. The text of the statement sent to Schweitzer has not survived. It is published here according to the rough manuscript attached to Marx's letter of February 6 to Engels. A passage from the statement was later quoted by Marx in the statement on the reasons for their refusal to contribute to Der Social-Demokrat, published in the latter half of March 1865 in the Berliner Reform and other newspapers. (From the Collected Works)

The International Workingmen's Association, Statement on Der Social-Demokrat

https://www.marxists.org/archive/marx/works/1865/02/06.htm

In attempting a critique of the military situation in question, we can only proceed from the actual condition facing us. As long as present conditions persist in Germany and Europe we cannot expect the Prussian government to act with any other interests in mind than those of Prussia herself. No more can we seriously expect the bourgeois opposition to proceed from any other standpoint than that of its own bourgeois interests. The workers' party, which in all questions at issue between reaction and bourgeoisie stands outside the actual conflict, enjoys the advantage of being able to treat such questions quite cold-bloodedly and impartially. It alone can treat them scientifically, historically, as though they were already in the past, anatomically, as though they were already corpses. In 1850 only the material shortcomings of the system became evident; the whole affair was over before the adverse effects on morale could emerge. The funds the Chambers had approved were used to alleviate the material shortcomings as far as possible. As far as possible; for under no circumstances will it be possible to hold materiel in such a state of readiness as would within 14 days see the called-up reserves and after 14 days the whole of the first levy of the Landwehr fully equipped for battle. It should not be forgotten that while the soldiers of the line represented the recruitment of 3 years at most, the reserve and the first levy together represented 9 years' recruitment, and that for every 3 soldiers of the line in battle order therefore, at least 7 called-up men had to be equipped in 4 weeks. Then came the Italian war of 1859 and with it another general mobilisation. On this occasion too a goodly number of material shortcomings were still evident, but they paled into insignificance beside the adverse effects the system had on morale, which were only uncovered now that the state of mobilisation was prolonged. Undeniably the Landwehr had been neglected; its battalion-cadres for the most part simply did not exist and had first to be built up; of the existing officers many were unfit for service in the field. But even if all this had not been so, the fact still remained that the officers could not be other than quite estranged from their men, particularly regarding their military ability, and that this military ability was in most cases insufficient for battalions with such officers to be sent with confidence against seasoned troops. If the Landwehr officers gave an excellent account of themselves in the Danish war, one should not forget that there is a great difference between a battalion which has 4/5 officers of the line and 1/5 Landwehr officers, and the reverse. But there was a further point that was decisive. As might have been realised beforehand, it became obvious at once that the Landwehr can certainly be used to fight, especially in defence of their own country, but under no circumstances can they be used for a show of force. The Landwehr is a defensive institution which only lends itself to offensive warfare after repelling an invasion, as in 1814 and 1815. A levy consisting for the most part of married men aged from 26 to 32 cannot be stationed idly at the frontiers for months whilst letters from home come in daily telling of the hardship suffered by their wives and children; for the support given to the families of the men called out also proved to be woefully inadequate. Then there was the fact that the men did not know whom they had to fight, the French or the Austrians neither of whom had at that time injured Prussia in any way. How could such troops, demoralised by months of inactivity, be expected to attack highly organised and battle-hardened armies? That a change was inevitable is obvious. In the prevailing circumstances, Prussia's first field army needed to be more strongly organised. How was this achieved? The 36 regiments of conscripted infantry of the Landwehr were allowed to continue in existence for the time being, but were gradually transformed into new regiments of the line. Little by little the cavalry and artillery were also expanded until they achieved equivalent strength to the reinforced infantry; and finally the siege-artillery was detached from the field artillery, which was an improvement in any event, especially for Prussia. In a nutshell, the infantry was doubled and the cavalry and artillery expanded by about one half. In order to maintain this increased standing army, it was proposed to extend the period of service in the line from 5 years to 7 3 years with the colours (in the case of the infantry), 4 in the reserve; on the other hand, liability for the second levy of the Landwehr was to be cut by 4 years; and finally annual recruitment was to be increased from the previous figure of 40,000 to 63,000. In the meantime, the Landwehr was completely neglected. The increased battalions, squadrons and batteries thus decreed corresponded almost exactly to the increase in Prussia's population from 10 million in 1815 to 18 million in 1861; since Prussia's wealth has meanwhile grown faster than her population, and since the other major European states have strengthened their armies to a much greater degree since 1815, such an increase in the number of cadres was undoubtedly not excessive. At the same time, of all the obligations borne by conscripts, the proposal added only to those of the youngest age-groups the liability to serve in the reserve but reduced liability for Landwehr-service for the oldest age-groups by twice as much and in fact almost totally did away with the second levy, the first levy more or less taking over the function the second formerly had. On the other hand, the following objections could be made to the plan: Universal conscription incidentally the sole democratic institution existing in Prussia, albeit only on paper marks such an enormous advance on all previous forms of military organisation that, having once existed, even if its implementation left much to be desired, it cannot again be permanently reversed. An army today must be based on one of the two clearly defined systems: either the recruitment of volunteers which is antiquated and only possible in exceptional cases such as England or universal conscription. All conscriptive systems and ballots 33 are after all no more than very imperfect forms of the latter. The basic idea behind the Prussian law of 1814 is that every citizen who is physically capable of bearing arms thereby has the obligation to do so personally in defence of his country, during his years of military fitness; this basic idea is far superior to the principle of purchasing substitutes which we find in every other country having a conscriptive system, and having existed for fifty years it will undoubtedly not succumb to the bourgeoisie's burning desire for the introduction of the "trade in human flesh", as the French call it. However once we accept that the Prussian military system is founded on universal, compulsory service without substitution, the only way it can be further improved without its own spirit being breached is for its basic principle to be put increasingly into practice. Let us consider how things stand in that respect. 40,000 conscripts for 10 million inhabitants in 1815 makes 4 per thousand. 63,000 conscripts for 18 million inhabitants in 1861 makes 3 1/2 per thousand. This represents a deterioration, although it is an improvement compared with the position prior to 1859 when only 2 2/9 per thousand were conscripted. Merely to restore the 1815 percentage, 72,000 men would have to be conscripted. (We shall see that every year approximately this number of men or more do indeed enter the army.) But is the fighting potential of the Prussian people exhausted if 4 per 1,000 of the population are recruited each year? The Darmstadt Aligemeine Milit r-Zeitung has time and again shown from the statistics of the middle states that in Germany a full half of the young men presenting themselves for recruitment are fit for service. Now according to the Zeitschrift des preussischen statistischen Bureaus (March 1864) the number of young men registering in 1861 was 227,005. This would make 113,500 recruits fit for service each year. Of these we will discount 6,500 as not available or morally incapable, which still leaves us with 107,000. Why do only 63,000 of these, or at most 72,000-75,000 actually serve? In the 1863 session, the Minister for War, von Roon, presented the following analysis of the 1861 levy to the Military Commission of the Assembly: 59,459 men were conscripted. 5,025 enlisted as 3-year volunteers. 14,811 were entitled to serve for one year; as it is common knowledge that the authorities are not so punctilious about the fitness of the one-year volunteers because they cost nothing, we may assume that at least half of them, that is, 7,400, did actually enlist. That is a very low estimate; the class of men who qualify for one-year service in any case consists chiefly of people fit for service; those who are unfit at the outset do not even go to the trouble of qualifying. But let us assume 7,400. By this count a total of 71,884 men entered the army in 1861. Let us take this further. 1,638 men were deferred or exempted as theologians. Why theologians should be too grand to serve is incomprehensible. On the contrary, a year's army service, living in the open air, and contact with the outside world can only benefit them. So without more ado we will recruit them; 1/3 of the total number for the current year, with 3/4 unfit, still leaves 139 men to be included. 18,551 men were rejected for not being of sufficient stature. Note: not rejected for service altogether but "passed to the reserve". Therefore, in the event of war they should serve after all. They are only excused parade-service in peace-time, being insufficiently imposing for that. It is thus admitted that these short men are quite good enough for service, and it is intended to use them even in emergencies. The fact that these short men can be quite good soldiers is demonstrated by the French army, which includes men down to 4 feet 8 inches. We therefore have no hesitation in counting them in with the military resources of the country. The above figure merely includes those who were finally rejected after three musters as being too short; it is thus a number that recurs each year. We will discount half of them as unfit for other reasons and we are then left with 9,275 little fellows whom a capable officer would no doubt soon knock into splendid soldiers. Then we find 6,774 allocated to the Service Corps, not including the men recruited for the Service Corps. The Service Corps is however also part of the army, and there is no evident reason why these men should not spend the short six-month period of service with the Service Corps, which would be of benefit both to them and to the Service Corps. We thus have: Now let us examine those who are unfit. However the whole way in which recruits are medically examined in Prussia has taken a peculiar turn. There were always more recruits than could be enlisted, and yet no one wanted to abandon the appearance of universal conscription. What could have been more convenient than to select the desired number of the best men and to declare the rest unfit on some pretext or other? In these circumstances, which, it should be noted, have obtained in Prussia since 1815 and still obtain today, the concept of unfitness has been extended there quite beyond normal usage, a fact that can best be demonstrated by comparison with the middle states. There, where there is the possibility of buying out and selection by ballot, there was no reason to declare more people unfit than really were unfit. Conditions are the same as in Prussia; in some states, e.g., Saxony, even worse because the percentage of the industrial population is higher there. Now as we have said, it has been demonstrated time and time again in the Allgemeine Milit r-Zeitung that in the middle states fully one half of the men registering for service are fit, and that must also be so in Prussia. As soon as a war breaks out in earnest, the notion of fitness will undergo drastic revision in Prussia, and the authorities. will then discover, too late, to their cost, how many fit men have been allowed to slip away. Now comes the most wonderful part of all. Of the 565,802 men liable for service about whom a decision has to be reached, we find: In order to be quite certain of our position, we shall by the way only take as proven those facts which emerge from Herr von Roon's own statistics: in other words that not counting the one-year volunteers, 85,000 young men can be recruited each year. Now the strength of the present peace-time army is approximately 210,000 men. If the period of service is two years, 85,000 men per year together will make 170,000 men, to which must be added officers, non-commissioned officers and re-enlisted soldiers, some 25,000-35,000 men, making a total of 195,000 to 205,000 men, or 202,000 to 212,000 men including the one-year volunteers. With two-year service for the infantry and foot-artillery (we shall deal with the cavalry later), even taking the government's own figures, the total strength of the reorganised army could be brought up to its full peace-time level. If universal conscription were really implemented, with two-year service there would very probably be 30,000 more men; it would therefore be possible to release some of the men after just 1 or 1 I/2 years, to avoid exceeding the figure of 200,000 to 210,000 men. As a reward for keenness, such early release would be of more use to the army as a whole than an extra six months' service. War-time strength would then be as follows: The reorganisation plan envisages 4 years' annual intake of 63,000 men, which makes 252,000 reservists. 3 years' annual intake of 85,000 men produce 255,000 reservists. This is surely just as good as the reorganisation plan. (As it is here only a question of the relative numbers, it makes no difference that we are here completely ignoring the reduction in the year-groups serving in the reserve.) It is in this that the weakness of the reorganisation plan resides. Whilst in appearance reverting to the original concept of universal conscription, which cannot of course function without a large army-reserve in the form of a Landwehr, it in fact executes an about-turn in the direction of the Franco-Austrian cadre-system, and thereby introduces an element of uncertainty into the Prussian military system which cannot fail to have the direct consequences. The two systems cannot be mixed, one cannot have the advantages of both systems at the same time. It is undeniable and has never been disputed that a cadre-system with a long period of service and liability for immediate mobilisation confers great advantages at the outbreak of war. The men know each other better; even those on leave, and leave is mostly only granted for short periods at a time, regard themselves as soldiers throughout their leave and are constantly ready to be called to the colours at a moment's notice, which the Prussian reservists are certainly not; consequently battalions are necessarily a great deal steadier when they come under fire for the first time. Against this it may be argued that, if one considers this system best one might just as well adopt the English system of ten years' service with the colours; that the French undoubtedly gained far more from their Algerian campaigns and the wars in the Crimea and Italy than from long service; and finally that by this system only some of the men fit to bear arms can be trained, in other words by no means all of the nation's potential is exploited. Furthermore, experience shows that the German soldier readily accustoms himself to being under fire, and three hard-fought and at least partially successful engagements do as much for an otherwise good battalion as a whole year of extra service. For a state such as Prussia the cadre-system is an impossibility. With the cadre-system, Prussia could attain an army of 300,000 to 400,000 men at the very most with a peace-time strength of 200,000 men. But if she is to maintain herself as a Great Power, she requires as many as this simply to move the first field army out, in other words, for any serious war, she needs 500,000 to 600,000 men, including fortress garrisons, reinforcements, etc. If the 18 million Prussians are to put forward in time of war an army approaching the numbers of the 35 million French, 34 million Austrians and 60 million Russians, this can only be done by universal conscription, a short but intensive period of service and a comparatively long period of liability for the Landwehr. With this system inevitably some of the immediate striking-power and even battle-worthiness of the troops at the outbreak of war will have to be sacrificed; the state and its policies will become neutral and defensive in character; but we ought also to remember that the attacking lan of the cadre-system led from Jena to Tilsit and the defensive modesty of the Landwehr system with universal conscription led from the Katzbach to Paris. This therefore means: Either a conscriptive system involving substitution with 7-8 year service, of which about half would be with the colours, and then no subsequent liability for Landwehr service; or alternatively universal conscription with 5 or at the most 6 year service, of which two would be with the colours, and then liability for Landwehr service, as in Prussia or Switzerland. But for the mass of the people first to have the burden of a conscriptive system and then additionally that of the Landwehr system is more than any European nation can take, not even the Turks, who in their military barbarism are still prepared to endure the most. A large number of trained men with short service and long-term liability for recall, or a small number with long service and a short period of liability for recall that is the question; but the choice has to be either one or the other. William Napier, who naturally declares the British soldier to be the best in the world, says in his History of the Peninsular War that after three years' service the British infantryman is fully trained in every respect. Now it should be realised that the elements constituting the British army at the beginning of this century were the lowest from which an army can possibly be formed. The British army today comprises vastly superior elements, but even these are still infinitely worse, both morally and intellectually, than the elements that make up the Prussian army. And is it suggested that what those British officers achieved in three years with such riff-raff should not be attainable in two years in Prussia, where the raw material for recruitment is so exceptionally receptive to education and in some cases already so highly educated, and is at the outset morally sound? It is true that soldiers today have more to learn. But that has never been seriously used as an argument against two-year service. The argument always used has been the cultivation of true military spirit, which is said only to emerge in the third year. If. these gentlemen were to be perfectly honest and if we discount the increased battalion effectiveness which was conceded above, this is far more of a political issue than a military one. True military spirit is intended to prove itself in face of the enemy within rather than abroad. It has never been our experience that the individual Prussian soldier learnt anything in his third year except boredom and how to extort schnaps from the recruits and tell bad jokes about his superiors. If the majority of our officers had served as privates or non-commissioned officers even for a year, this could not possibly have escaped their notice. Experience shows that "true military spirit", insofar as it is a political quality, very rapidly goes to the dogs, never to be revived. Military virtues remain, even after two years' service. Two years' service is thus perfectly adequate to train our soldiers for infantry duty. Since the field-artillery was detached from the siege-artillery, the same is true of the foot-artillery; any individual difficulties that may emerge here can be overcome either by further division of labour, or else by simplification of the field-artillery's equipment, which is desirable in any case. The enrolment of a larger number of re-enlisted soldiers would similarly raise no problems, but it is particularly in the Prussian army that this category of men is most unwelcome if they are not fitted to be non-commissioned officers what a condemnation of long service! Only in the siege-artillery, with their great variety of equipment, and in the engineers, with their multiplicity of trades, which of course can never be kept entirely apart, will intelligent re-enlisted soldiers be valuable and yet a rarity. The mounted artillery will require the same length of service as the cavalry. With regard to the cavalry, men born into the saddle need only a short period of service, whilst for those trained to it long service is indispensable. As we have few men born into the saddle, we undoubtedly need the four-year period of service envisaged by the reorganisation plan. The only form of warfare proper to mounted troops is the massed attack with drawn swords, for the execution of which extreme courage and complete confidence of the men in each other are necessary. The men must therefore know that they can rely on each other and on their commanders. This requires long service. But cavalry is useless if the rider has no confidence in his horse; the man must of course be able to ride, and long service is also necessary for him to be able to ensure control over his horse i.e., more or less any horse which is assigned to him. In this branch of the service, re-enlisted soldiers are highly desirable, and the more like real mercenaries they are, the better, provided they enjoy the trade. We shall be criticised by members of the opposition on the grounds that this would mean a cavalry made up exclusively of mercenaries who would lend themselves to any coup d' tat. We would reply: that may well be. But in present conditions the cavalry will always be reactionary (think of the Baden dragoons in 1849), just as the artillery will always be liberal. That is in the nature of things. A few re-enlisted soldiers more or less will make no difference. And cavalry is useless on the barricades anyway; and it is the barricades in the big cities, and especially the attitude of the infantry and artillery towards them, which nowadays decide the outcome of any coup d' tat. However, besides increasing the number of re-enlisted soldiers, there are also other means of strengthening the striking power and inner cohesion of a short-service army, such as for instance training camps, which the Minister for War, von Roon, himself described as a way of compensating for the reduction in the length of service. Then there is also the rational organisation of training, with regard to which a great deal remains to be done in Prussia The whole superstitious notion that if you have short service it has to be compensated for by exaggerated precision on the parade-ground, "clockwork" drilling and ridiculously high leg-lift "swinging from the hip" to kick nature in the teeth this whole superstitious notion is based on nothing but exaggeration. The Prussian army has repeated this to itself so often that it has finally become an article of faith. What is gained by men thumping their rifles so violently against their shoulders when doing rifle drill that they almost fan over and a most unmilitary shudder, such as is seen in no other army, passes along the whole rank? Finally, improved physical education of youth must be regarded as counter-balancing the reduction in service and in the most fundamental way. But it will then also be necessary to make quite certain that something really is done. It is true that in every village school parallel and horizontal bars have been set up, but our poor schoolmasters have little idea of what to do with them. At least one retired non-commissioned officer qualified as a gymnastics teacher should be placed in every district and given charge of physical education; care should be taken to see that young people at school are taught over a period of time to march in formation, to move as a platoon and as a company, and to understand the appropriate commands. In 6-8 years this will pay abundant dividends there will be more recruits and they will be stronger. In this critique of the reorganisation plan we have, as we said, confined ourselves solely to the military and political facts of the situation as it is. Among them is the assumption that in present circumstances the legal stipulation of two years' service for infantry and foot-artillery was the maximum reduction in the term of service feasible. We are even of the opinion that a state such as Prussia would commit a blunder of the greatest magnitude regardless of which party was in power if it further reduced the normal term of service at the present moment. As long as we have the French army on the one side, the Russian on the other and the possibility of a combined attack by both at the same time, we need troops who will not have to learn the fundamentals of the art of war when they first face the enemy. We therefore totally discount the fantastic notion of a militia army with as it were no term of service at all; for a country of 18 million inhabitants and very exposed frontiers, such an idea is impossible today, and even if circumstances were different, it would not be possible in this form. Taking all this into account: could an Assembly having Prussia's interests at heart accept the basic features of the reorganisation plan? Our opinion, which is based on military and political factors, is that to strengthen the cadres in the manner in which this was done, to increase the peace-time army to 180,000-200,000 men, to relegate the first levy of the Landwehr to the main army reserve or the second field army-cum-fortress garrisons, was acceptable on condition that universal conscription was strictly implemented, that a two-year term of service with the colours, three with the reserve and up to the 36th birthday with the Landwehr, was fixed by law and, finally, that the cadres of the first levy of the Landwehr were re-established. Were these conditions obtainable? Only few people who have followed the debates will deny that this was possible in the "New Era" and perhaps even after that. So what attitude did the bourgeois opposition adopt? There are only two ways in which the bourgeoisie can gain political power for itself. Since it is an army of officers without any soldiers and can only acquire these soldiers from the ranks of the workers, it must either ensure that the workers are its allies, or it must buy political power piecemeal from the powers opposing it from above, in particular from the monarchy. The history of the English and French bourgeoisie shows that there is no other way. But the Prussian bourgeoisie had lost all its enthusiasm and what is more quite without reason for forming a sincere alliance with the workers. In 1848 the German workers' party, then still at a rudimentary stage of development and organisation, was prepared to do the bourgeoisie's work for it at a very modest price, but the latter was more afraid of the slightest independent stirring of the proletariat than it was of the feudal aristocracy and the bureaucracy. Peace bought at the price of servitude appeared more desirable to it than even the mere prospect of a freedom-struggle. From that time on, this holy fear of the workers had become a habit with the bourgeoisie, until finally Herr Schulze-Delitzsch began his savings-box campaign. The purpose of this was to show the workers that there could be no greater happiness for them than to be exploited industrially by the bourgeoisie for the rest of their lives, and even for generations to come, and indeed, that they should themselves contribute to this exploitation by themselves supplementing their income through all manner of industrial associations, thereby enabling the capitalists to reduce their wages. But although no doubt the industrial bourgeoisie is the most uneducated of the classes that constitute the German nation, apart from the junior cavalry officers, such a campaign had from the outset no prospect of lasting success with such an intellectually advanced people as the Germans. The more intelligent of the bourgeoisie themselves could not fail to perceive that nothing could come of this, and the alliance with the workers collapsed once more. Which left bargaining with the government for political power, to be paid for in cash from the pockets of the people, naturally. The bourgeoisie's real power in the state consisted only in the right to approve taxation, and even that was much hedged about with ifs and buts. This, then, is where the lever needed to be applied, and a class so skilled in bargaining could surely not fail to be at an advantage here. But no. The bourgeois opposition in Prussia in complete contrast especially to the classical bourgeoisie of England in the 17th and 18th centuries saw the situation like this: they would bargain for power without paying any money for it. Simply from the bourgeois point of view and taking full account of the circumstances in which the reorganisation of the army was put forward, what policy ought the bourgeois opposition to have adopted now? If it appraised its own strength correctly, it could not have been unaware that having only just risen again from its humiliation at the hands of Manteuffel and indeed without exerting itself to that end in the slightest it was certainly powerless to prevent the plan being put into actual practice, a process which was in fact initiated. It could not be unaware that with every session that passed fruitlessly, the new, actually existing arrangement would be harder to abolish; that with each passing year the government would therefore offer less in exchange for the Chamber's approval. It could not be unaware that it was very far from being able to appoint and dismiss ministers, and that the longer the conflict lasted, therefore, the fewer would be the ministers it faced who would be inclined to compromise. Finally, it could not be unaware that it was above all in its own interest not to push the matter to the extreme. For at that stage in the development of the German workers, a serious conflict with the government could not fail to give rise to an independent workers' movement and thereby in the extreme case present it once again with the dilemma: either an alliance with the workers, but this time under far less favourable conditions than in 1848, or alternatively to go on bended knees before the government and confess: pater, peccavi! ["Father. I have sinned!" Luke 15:21.] The liberal and progressist bourgeoisie ought consequently to have subjected the reorganisation of the army and the necessarily concomitant increase in peace-time strength to a cool and objective examination, in which case they would probably have come to approximately the same conclusions as we ourselves. In so doing they should not have forgotten that after all they could not prevent the provisional introduction of the new system and could only delay its eventual consolidation, as long as the plan contained so many correct and useful elements. Above all therefore they ought to have taken good care not to adopt from the outset a' directly hostile attitude to reorganisation; they ought on the contrary to have used this reorganisation and the finance that needed to be approved for it to obtain for themselves as much reimbursement from the "New Era" as possible, to convert the 9 or 10 million in dew taxation into as much political power for themselves as possible. And there were certainly enough things to be done in that regard! There was all Manteuffel's legislation concerning the press and the right of association; there were all the powers accorded to the police and bureaucracy which had been taken over unchanged from the absolute monarchy; the emasculation of the courts by disputing their competence; the Provincial and District Estates; above all, the way in which the constitution was interpreted under Manteuffel, which needed to be countered by a new constitutional practice; the attrition of local self-government in the towns by the bureaucracy; and a hundred and one other things for which any other bourgeoisie in the same situation would gladly have paid a tax-increase of 1/2 Taler per head of population and all of which they could have obtained if they had proceeded with a modicum of skill. But the bourgeois opposition thought otherwise. As far as freedom of the press, association and assembly were concerned Manteuffel's laws had hit upon precisely that degree of freedom under which the bourgeoisie felt comfortable. It could demonstrate gently against the government without let or hindrance; any increase in freedom would have brought less advantage to it than to the workers, and rather than give the workers freedom for an independent movement, the bourgeoisie preferred to submit to a little more coercion on the part of the government. Precisely the same thing applied to the limitation of the powers enjoyed by the police and bureaucracy. The bourgeoisie believed that with the "New Era" ministry it had already got the better of the bureaucracy, and it approved of this bureaucracy keeping a free hand to deal with the workers. It quite forgot that the bureaucracy was far stronger and more vigorous than any ministry that might be well disposed towards the bourgeoisie. And then it imagined that with the fall of Manteuffel the millennium had arrived for the bourgeoisie and that all that was left to do was to reap the ripe harvest of bourgeois hegemony, without paying a penny for it. But what about all the finance that would have to be approved, when those few years after 1848 had cost so much money, so increased the national debt and raised taxation to such heights? Gentlemen, you are the representatives of the youngest constitutional state in the world, and you do not know that constitutional government is the most expensive form of government in the world? Almost more expensive than Bonapartism even, which apres moi le d luge ["After me the deluge" attributed to Louis XV and Mme. Pompadour] pays off old debts by constantly incurring new ones and thus mortgages a century's resources in ten years? The golden days of limited absolutism, whose memory still haunts you, are gone forever. But what about the clauses in the constitution relating to the continued levying of taxes once they have been approved? Everyone knows how coy the "New Era" was about asking for money. It would not have been a great loss to have included the costs of reorganisation in the budget, in exchange for a cast-iron guarantee of concessions. It was a question of approving new taxation to cover these costs. Here was an opportunity for being miserly, and for that no better ministry could have been hoped for than that of the "New Era". You would have retained the whip-hand insofar as you had previously held it, and you would have won new instruments of power in other areas. But would one not have strengthened reaction if one had doubled the army which is its chief weapon? This is an issue where the progressist bourgeoisie runs into indissoluble conflict with itself. It asks of Prussia that it should play the part of the Piedmont of Germany. This requires a strong army with striking-power. It has a "New Era" ministry which secretly shares the same ideas, the best ministry which in the circumstances it can have. It denies this ministry army reinforcements. Day after day, from morn till night, it talks about nothing but the glory of Prussia, the greatness of Prussia, the growth of Prussia's power; but it denies the Prussian army reinforcements which would only be of the same order as those which the other great powers have themselves introduced since 1814. What is the reason for all this? The reason is that it is afraid these reinforcements might benefit only reaction, might revive the decayed officer-aristocracy and in general give the feudal and bureaucratic-absolutist party the power to inter all constitutional government with a coup d' tat. Admittedly, the progressist bourgeoisie was right not to strengthen reaction, and the army was the surest bastion of reaction. But was there ever a better opportunity to bring the army under the control of the Chamber than this very reorganisation, proposed by the ministry most well-disposed towards the bourgeoisie that Prussia had ever experienced in peaceful times? As soon as the reinforcement of the army had been declared approved on certain conditions, was not this the precise moment in which to try to settle the matter of the cadet-schools, the preferential treatment of the aristocracy and all the other grievances, and to obtain guarantees which would give the officer-corps a more bourgeois character? The "New Era" was clear about one thing only: that the reinforcement of the army had to be pushed through. The devious paths and subterfuges by which it carried reorganisation through proved more than anything its bad conscience and its fear of the deputies. This opportunity needed to be seized with both hands; such a chance for the bourgeoisie could not be expected again in a hundred years. What might not be extracted from this ministry, in point of detail, if the progressist bourgeoisie viewed the situation not as misers but as great speculators! And then what about the practical consequences of reorganisation on the officer-corps itself! Officers had to be found for twice the number of battalions. The. cadet-schools became totally inadequate. There had never been such liberality before in peace-time; lieutenant's commissions were positively offered as bounty to students, probationary lawyers and all educated young men. Anyone seeing the Prussian army again after reorganisation found the officer-corps unrecognisable. We say this not from hearsay but from our own observation. That dialect peculiar to lieutenants had been pushed into the background, the younger officers spoke their natural mother-tongue, they were by no means members of an exclusive caste but more than at any time since 1815 represented all educated classes and all provinces in the state. Here, then, the force of events had enabled this position to be won; it was now just a matter of maintaining and making full use of it. Instead, all this was ignored and talked away by the progressist bourgeoisie, as though all these officers were aristocratic cadets. And yet since 1815 there had never been more bourgeois officers in Prussia than at that very moment. And incidentally we would attribute the gallant conduct of the Prussian officers before the enemy in the Schleswig-Holstein war chiefly to this infusion of new blood. The old class of junior officers by themselves would not have dared to act so often on their own responsibility. In this connection the government is right in saying that reorganisation had an important influence on the "panache" of these successes; in what other respect reorganisation struck terror into the hearts of the Danes is not apparent to us. Finally, the main point: would reinforcement of the peace-time army facilitate a coup d' tat? It is perfectly true that armies are the instrument by which coups d' tat are effected, and that any reinforcement of an army therefore also increases the feasibility of a coup d' tat. But the strength of army required by a great power is not determined by the greater or lesser likelihood of a coup d' tat but by the size of the armies of the other great powers. In for a penny, in for a pound. If one accepts a mandate as a Prussian deputy, if one emblazons the Greatness of Prussia and Her Power in Europe on one's escutcheon, then one must also agree to the means being procured without which there can be no question of Prussia's greatness and power. If these means cannot be procured without facilitating a coup d' tat, so much the worse for these gentlemen of Progress. Had they not conducted themselves in such an absurdly cowardly and clumsy fashion in 1848, the era of coups d' tat would probably have been long past. In the circumstances obtaining, however, they have no choice but finally to accept the reinforcement of the army in one form or another after all and to keep their anxieties about coups d' tat to themselves. However, there are yet other aspects to the matter. Firstly, it would always have been more advisable to negotiate approval of the means for a coup d' tat with a "New Era" ministry than with a ministry headed by Bismarck. Secondly, it is self-evident that every further step towards the real implementation of universal conscription makes the Prussian army a less fitting instrument for a coup d' tat. As soon as the demand for self-government and the necessity of the struggle against all recalcitrant elements had once penetrated the whole mass of the people, even 20-21-year-old young men would inevitably have been caught up in the movement, and even under feudal and absolutist officers, they would necessarily have lent themselves less and less readily to the making of a coup d' tat. The further the political education of the country progresses, the more intractable will become the mood of the called-up conscripts. Even the present struggle between the government and bourgeoisie must already have provided testimony of this. Thirdly, the two-year term of service sufficiently outweighs the increase in the army. To the extent that reinforcement of the army increases the government's material capacity for coups d' tat, to that extent will the two-year term of service lessen its moral capacity to do so. In the third year of service the continual inculcation of absolutist doctrines and the habit of obedience may bear some immediate fruit among the soldiers, and for the duration of their service. In the third year of service, when the individual soldier has scarcely anything more of a military nature to learn, our compulsory conscript already begins somewhat to resemble the long-serving soldier of the Franco-Austrian system. He acquires some of the characteristics of the professional soldier and as such is always far more compliant than the younger soldier. The retirement of the men in their third year of service would undoubtedly compensate for the recruitment of 60,000 to 80,000 extra men, from the point of view of a coup d' tat. But there is yet another point, which is crucial. We would not deny that circumstances might arise we know our bourgeoisie too well for that in which a coup d' tat might nevertheless be possible, even without mobilisation and simply using the standing peace-time army. However that is unlikely. In order to carry out a large-scale coup, it will almost always be necessary to mobilise. And this is what will tip the balance. The Prussian peace-time army may in certain circumstances become a mere tool in the government's hands, for domestic use; the Prussian war-time army would certainly never do so. Anyone who has ever had the opportunity of seeing a battalion first on its peace-time footing and then on a war footing will be familiar with the enormous difference in the whole attitude of the men, in their collective character. The men who had joined the army as little more than boys now return to it as men; they bring with them a fund of self-respect, self-confidence, solidity and character which benefits the whole battalion. The relationship of men to officers and officers to men is at once different. Militarily the battalion is substantially stronger for this, but politically it becomes for absolutist purposes totally untrustworthy. This could be seen even during the entry to Schleswig, where to the great astonishment of English newspaper-correspondents Prussian soldiers everywhere openly took part in political demonstrations and fearlessly expressed their by no means orthodox views. And this result the political decomposition of the mobilised army for absolutist purposes we chiefly owe to the Manteuffel period and to the "Newest" Era. In 1848 the situation was still quite different. And that is in fact one of the most positive aspects of the Prussian military system, both before and after reorganisation: that with this military system Prussia can neither wage an unpopular war nor carry out a coup d' tat which has any prospect of permanence. For even if the peace-time army did allow itself to be used for a small coup d' tat, then the first mobilisation and the first threat of war would suffice to call all these "achievements" in question once more. Without the ratification of the war-time army the heroic deeds of the peace-time army against the "enemy within" would be merely of temporary significance; and the longer this ratification takes, the harder it will be to obtain. Reactionary papers have stated that the "army", as opposed to parliament, truly represents the people. By this they meant of course only the officers. If it should ever happen that the gentlemen of the Krenz-Zeitung were to carry out a coup d' tat, for which they would need the mobilised army, these people's representatives would give them the shock of their lives, they may be sure of that. Ultimately however that is not the main safeguard against a coup d' tat either. That is to be found in the fact that no coup d' tat can enable a government to convene a Chamber which will approve new taxation and loans for it; and that, even if it did manage to find a Chamber willing to do so, no banker in Europe would give it credit on the basis of resolutions passed by such a Chamber. In most European states the position would be different. But it so happens that, since the promises made in 1815-48 and the many futile manoeuvres aimed at raising money from then up until 1848, it is generally accepted that no one may lend Prussia a penny without the legal and unimpeachable approval of the Chamber. Even Herr Raphael von Erlanger, who after all did lend money to the American Confederates, would scarcely entrust cash to a government that had come to power in Prussia through a coup d' tat. Prussia owes this simply and solely to the narrow-mindedness of absolutism. And this is where the strength of the bourgeoisie lies: that if the government gets into financial difficulties which sooner or later it is bound to do it is itself obliged to turn to the bourgeoisie for money, and this time not to the political representatives of the bourgeoisie who are ultimately aware that they exist to provide money, but to the great financiers, who would like a profitable transaction with the government, who measure the creditworthiness of a government by the same token as they would any private individual and are quite indifferent to the question of whether the Prussian state needs more soldiers or less. These gentlemen only discount bills of exchange which bear three signatures, and if one has only been signed by the Upper House, in addition to the government, and riot by the House of Deputies, or by a House of Deputies consisting of puppets, they regard this as unsound practice and decline the deal. It is at this point that the military question ends and the constitutional question begins. It is immaterial by what errors and complications the bourgeois opposition is now forced into the following position: it must fight the military question through to the end, or it will lose the remnants of political power it still possesses. The government has already called in question its whole right to approve budgets. But if the government sooner or later nevertheless has to make its peace with the Chamber, is not the best policy in this situation simply to remain adamant until that moment arrives? Now that the conflict has in fact been taken to these lengths the answer can only be yes. The possibility of coming to an agreement on an acceptable basis with this government is more than doubtful. By overestimating its own strength, the bourgeoisie has got itself into the situation of having to use this military question as a test-case to see whether it is the decisive force in the state or nothing at all. If it wins, it will simultaneously acquire the power of appointing and dismissing ministers, such as the English Lower House possesses. If it is vanquished, it will never again achieve any kind of significance by constitutional means. But no one familiar with our German bourgeoisie will expect such perseverance from it. The courage of the bourgeoisie in political matters is always exactly proportional to the importance that it enjoys in the civil society of the country in question. In Germany the social power of the bourgeoisie is far less than in England and even in France; it has neither allied itself with the old aristocracy as in England, nor destroyed it with the help of the peasants and workers as in France. The feudal aristocracy in Germany is still a power, a power hostile to the bourgeoisie and, what is more, allied to government. Factory industry, the basis of all social power of the modern bourgeoisie, is far less developed in Germany than in France and England, enormous though its progress has been since 1848. The colossal accumulations of capital that frequently occur in individual classes in England and even France are rarer in Germany. This is the reason for the petty-bourgeois character of our bourgeoisie as a whole. The circumstances in which it lives and the range of thought of which it is capable are of a petty kind; is it surprising that its whole mentality is equally petty! How could it be expected to find the courage to fight an issue through to the bitter end? The Prussian bourgeoisie knows very well how dependent it is on the government for its own industrial activity. Concessions 5" and administrative checks weigh down on it like a bad dream. The government can make difficulties for it in any new enterprise, and nowhere more so than in the political sphere! In the course of the dispute over the military question, the bourgeois Chamber can only adopt a negative stance, it is driven purely on to the defensive; meanwhile the government moves over to the attack, interprets the constitution in its own way, disciplines liberal officials, annuls liberal municipal elections, sets all the wheels of bureaucratic power in motion to impress on the bourgeoisie its status as subjects; in fact overruns one line of defence after another and thus conquers for itself a position such as even Manteuffel did not have. Meanwhile the unbudgeted spending of money and levying of taxes quietly continues, and the reorganisation of the army gains new strength with every year of its existence. In short, the prospect of an eventual victory for the bourgeoisie takes on a more revolutionary character with each passing year, and the government's tactical victories in every field, as they multiply day by day, increasingly assume the form of fait accomplis. On top of this there is a workers' movement completely independent of bourgeoisie and government alike, which compels the bourgeoisie either to make the most ominous concessions to the workers, or to face up to having to act without the workers at the decisive moment. Can the Prussian bourgeoisie be expected in these circumstances to have the courage to remain adamant, come what may? It would have to have changed remarkably for the better since 1848 by its own lights and the yearning for compromise which has found expression daily in the sighs of the Party of Progress since the opening of this session, is not an auspicious sign. We fear that on this occasion too the bourgeoisie will have no scruples in betraying its own cause. For its political activity to develop fully, the working class needs a far wider arena than is offered by the separate states of today's, fragmented Germany. Particularism will hamper the free movement of the proletariat, but its existence will never be justified and will never merit serious consideration. The German proletariat will never have any truck with Imperial Constitutions, Prussian hegemonies, tripartite systems and the like, unless it be to sweep them away; it is indifferent to the question of how many soldiers the Prussian state needs in order to prolong its vegetable existence as a great power. Whether reorganisation means some slight increase to the military burden or not, will make little difference to the working class as a class. On the other hand it certainly cannot remain indifferent to the question of whether or not universal conscription is fully implemented. The more workers who are trained in the use of weapons the better. Universal conscription is the necessary and natural corollary of universal suffrage; it puts the voters in the position of being able to enforce their decisions gun in hand against any attempt at a coup d' tat The only aspect of army reorganisation in Prussia which is of interest to the German working class is the increasingly thorough Implementation of universal conscription. More important is the question: what attitude should the workers' party adopt to the ensuing conflict between government and Chamber. The modern worker, the proletarian, is a product of the great industrial revolution which has totally revolutionised the whole mode of production in all civilised countries, first in industry and subsequently in agriculture too, especially in the last hundred years, and as a result of it only two classes are still involved in production: the class of capitalists, who are in possession of the tools of labour, raw materials and means of subsistence, and the class of workers who possess neither the tools of labour, nor raw materials, nor food, but must first buy the latter from the capitalists with their labour. The modern proletarian therefore only has direct dealings with one class of society, which is hostile to him and exploits him: the class of capitalists, the bourgeoisie. In countries where this industrial revolution is complete, as in England, the worker really does have dealings only with capitalists, for even on the land the large tenant-farmer is nothing other than a capitalist; the aristocrat, who merely lives off the rent from his estates, has no points of social contact with the workers at all. It is different in countries where this industrial revolution is only now taking place, such as in Germany. Here there are still numerous social elements which have survived from former feudal and post-feudal conditions, and which, if we may so express ourselves, cloud the solution (medium) that is society and deny the social condition of Germany that simple, clear, classical character which distinguishes England's stage of development. Here, in an atmosphere of daily modernisation, and amongst thoroughly modern capitalists and workers, we find the most wonderful antediluvian fossils alive and active: feudal lords, seignorial courts; country squires, birching, central government officials, local government officials, craft corporations, conflicts of authority, bureaucracy with penal powers, etc. And we find that in the struggle for political power all these living fossils are banding themselves together against the bourgeoisie, whose property makes it the most powerful class of the new epoch and who is demanding that the former should surrender political power to it in the 'name of the new epoch. Apart from the bourgeoisie and the proletariat, the large industry of today also gives rise to a kind of intermediate class between the two, the petty bourgeoisie. This consists partly of the relics of the former semi-medieval burghers and partly of workers who have risen somewhat in the world. Its function consists less in the production than in the distribution of goods; the retail trade is its main activity. Whilst the old burghers were the most stable class in society, the modern petty bourgeoisie is the most changeable; bankruptcy has become one of its institutions. With its slender capital it shares the status of the bourgeoisie, but by the insecurity of its livelihood it shares that of the proletariat. Its political position is as contradictory as its social being; in general however "pure democracy" is its most proper expression. Its political vocation is to encourage the bourgeoisie in its struggle against the relics of the old society and especially against its own weakness and cowardice, and to help win those freedoms freedom of the press, freedom of association and assembly, universal suffrage, local self-government without which, despite its bourgeois character, a timid bourgeoisie can manage passably well but without which the workers can never win their emancipation. In the course of the struggle between the relics of the old antediluvian society and the bourgeoisie, sooner or later the time always comes when both combatants turn to the proletariat and seek its support. This moment usually coincides with the first stirrings of the working class itself. The feudal and bureaucratic representatives of the declining society appeal to the workers to join them in attacking the blood-suckers, the capitalists, the sole foes of the worker; the bourgeoisie make it clear to the workers that they jointly represent the new social era and therefore have a common interest at least with regard to the declining, old form of society. At about this time the working class then gradually becomes aware that it is a class in its own right with its own interests and its own independent future; and that gives rise to the question, which has forced itself upon their attention in England, in France and in Germany successively: what attitude should the workers' party adopt towards the combatants? Above all this will depend on what kind of aims the workers' party, i.e., that part of the working class which has become aware of its common class interests, is striving for in the interests of that class. It seems that the most advanced workers in Germany are demanding the emancipation of the workers from the capitalists by the transfer of state capital to associations of workers, so that production can be organised, without capitalists, for general account; and as a means to the achievement of this end: the conquest of political power by universal direct suffrage. This much is now clear: neither the feudal-bureaucratic party, which for the sake of brevity is customarily referred to as reaction, nor the liberal-radical bourgeois party, will be inclined to concede these demands of their own volition. But the proletariat will become a power from the moment when an independent workers' party is formed, and a power has to be reckoned with. Both warring parties know this and will at the appropriate moment therefore tend to make apparent or real concessions to the workers. From which side can the workers wring the greatest concessions? The mere existence of the bourgeoisie and the proletariat is a thorn in the flesh of the reactionary party. Its power is based on suppressing or at least obstructing present-day social development. Otherwise all the possessing classes will gradually be transformed into capitalists and all the oppressed classes into proletarians, and in the process the reactionary party will disappear of its own accord. To be consistent, reaction will indeed attempt to dispose of the proletariat, however not by proceeding to association but by turning the present-day proletarians back into guild-journeymen or restoring them to a state of complete or semi- peasant serfdom. Is such a restoration in the interest of our proletarians? Do they wish to return to the paternal discipline of the guild-master and "his lordship", if such were possible? Surely not. For it is only when the working class became divorced from all these sham possessions and sham privileges of former times and the naked conflict between capital and labour became apparent that the very existence of a single great working class with common interests, a workers' movement and a workers' party became possible at all. And what is more, it. is simply impossible to turn back the clock of history in this way. The steam-engines, the mechanical spinning and weaving looms, the steam-ploughs and threshing machines, the railways and electric telegraphs and the steam-presses of the present day do not permit such an absurd backward step, on the contrary, they are gradually and remorselessly destroying all the relics of feudal and guild conditions and are reducing all the petty social contradictions surviving from former times to the one contradiction of world-historical significance: that between capital and labour. The bourgeoisie, on the other hand, has no other historical function than to proliferate in every field the aforesaid gigantic forces of production and means of communication in present-day society and intensify them to the utmost; to use their credit institutions to take over the means of production handed down from former times as well, landed property in particular; to operate every branch of production by modern means; to destroy all relics of feudal forms of production and feudal conditions and thus reduce the whole of society to the simple contradiction that exists between a class of capitalists and a class of unpropertied workers. As these contradictions between classes in society are simplified, so the power of the bourgeoisie grows, but at the same time the proletariat's power, class-consciousness and potential for victory grow even more; it is only this increase in the power of the bourgeoisie that gradually enables the proletariat to become the majority, the dominant majority in the state, as it already is in England, but by no means yet in Germany, where in the country peasants of every kind and in the towns small craftsmen and shopkeepers, etc., are still outnumbering it. Hence: every victory by reaction impedes social development and inevitably delays the time when the workers will be victorious. Every victory by the bourgeoisie over reaction on the other hand is at the same time in one sense a victory for the workers, contributes to the final downfall of capitalist rule and brings the moment closer when the workers will defeat the bourgeoisie. Let us compare the position of the German workers' party in 1848 and now. There are in Germany still plenty of veterans-who were involved in the initial stages of founding a German workers' party before '848, and who after the revolution helped develop it for as long as the conditions of the time permitted. They all know the trouble it took, even in those agitated times, to set up a workers' movement, to keep it going and to get rid of reactionary guild-minded elements, and how a few years later the whole movement went back to sleep. If a workers' movement has now sprung up as it were of its own accord, what is the explanation? It is that since 1848 large-scale bourgeois industry has made unprecedented advances in Germany, because it has eliminated a great number of small craftsmen and other intermediaries between worker and capitalist, has brought a great number of workers into direct conflict with the capitalists, and in short has created a significant proletariat where previously one did not exist or did so only on a small scale. This development of industry has made a workers' party and workers' movement a necessity. That is not to say that there may not be times when it appears advisable to reaction to make concessions to the workers. But these concessions are always of a very particular kind. They are never of a political nature. Feudal-bureaucratic reaction will neither extend the franchise nor grant freedom of the press, association and assembly, nor restrict the power of the bureaucracy. The concessions which it does make are always aimed directly against the bourgeoisie, and are such as do not increase the political power of the workers at all. Thus in England the ten-hour law for factory-workers was passed against the wishes of the manufacturers. Thus in Prussia the strict observance of the regulations concerning working hours in the factories which exist at present only on paper and in addition the right of association for workers, etc., could be demanded from the government and possibly obtained. But it is clear that all these concessions on the part of reaction are obtained without anything being offered in return by the workers, and rightly so, for simply by aggravating the bourgeoisie reaction has gained its ends, and the workers owe it no debt of gratitude, nor do they ever express any. But there is another form of reaction which has enjoyed much success in recent times and is becoming highly fashionable in certain circles; 'this is the form nowadays called Bonapartism. Bonapartism is the necessary form of state in a country where the working class, at a high level of its development in the towns but numerically inferior to the small peasants in rural areas, has been defeated in a great revolutionary struggle by the capitalist class, the petty bourgeoisie and the army. When the Parisian workers were defeated in the titanic struggle of June 1848 in France, the bourgeoisie had at the same time totally exhausted itself in this victory. It was aware it could not afford a second such victory. It continued to rule in name, but it was too weak to govern. Control was assumed by the army, the real victor, basing itself on the class from which it preferred to draw its recruits, the small peasants, who wanted peace from the rioters in the towns. The form this rule took was of course military despotism, its natural leader the hereditary heir to the latter, Louis Bonaparte. As far as both workers and capitalists are concerned, Bonapartism is characterised by the fact that it prevents them coming to blows with each other. In other words, it protects the bourgeoisie from any violent attacks by the workers, encourages a little gentle skirmishing between the two classes and furthermore deprives both alike of the faintest trace of political power. No freedom of association, no freedom of assembly, no freedom of the press; universal suffrage under such bureaucratic pressure that election of the opposition is almost impossible; police-control of a kind that had previously been unknown even in police-ridden France. Besides which, sections of the bourgeoisie and of the workers are simply bought; the former by colossal credit-swindles, by which the money of the small capitalists is attracted into the pockets of the big ones; the latter by colossal state construction-schemes which concentrate an artificial, imperial proletariat dependent on the government in the big towns alongside the natural, independent proletariat. Finally, national pride is flattered by apparently heroic wars, which are however always conducted with the approval of the high authorities of Europe against the general scapegoat of the day and only on such conditions as ensure victory from the outset. The most that such a government can do either for the workers or for the bourgeoisie is to allow them to recuperate from the struggle, to allow industry to develop strongly other circumstances being favourable to allow the elements of a new and more violent struggle to evolve therefore, and to allow this struggle to erupt as soon as the need for such recuperation has passed. It would be the absolute height of folly to expect any more for the workers from a government which exists simply and solely for the purpose of holding the workers in check as far as the bourgeoisie is concerned. Let us now turn to the specific issue we have before us. What can reaction in Prussia offer the workers' party? Can this reaction offer the working class a real share of political power? Definitely not. Firstly no reactionary government has ever done so in recent history, either in England or in France. Secondly, the present struggle in Prussia is concerned precisely with whether the government is to unite all real power in itself or to share it with parliament. And the government will certainly not use every means available to it to wrest power from the bourgeoisie, merely to make a present of that power to the proletariat! The feudal aristocracy and the bureaucracy can retain their real power in Prussia even without parliamentary representation. Their traditional position at the court, in the army and in the civil service guarantees them this power. They may even not want any special representation, since after all there can be no question in Prussia nowadays of permanent chambers of the nobility and bureaucracy such as existed under Manteuffel. They would therefore dearly like to consign parliament and all its trappings to oblivion. On the other hand the bourgeoisie and workers can only exercise real, organised, political power through parliamentary representation; and such parliamentary representation is valueless unless it has a voice and a share in making decisions, in other words, unless it holds the "purse-strings". That however is precisely what Bismarck on his own admission is trying to prevent. We ask: is it in the interests of the workers that this parliament should be robbed of all power, this parliament which they themselves hope to enter by winning universal direct suffrage and in which they hope one day to form the majority? Is it in their interests to set all the wheels of agitation in motion in order to enter an assembly whose words ultimately carry no weight? Surely not. But what if the government were to overturn the present electoral law and decree universal direct suffrage? Yes, if! If the government were to carry out such a Bonapartist trick and the workers swallowed it, they would thereby from the start have acknowledged the government's right to suspend universal direct suffrage again by a new edict whenever it thought fit, and what would all this universal direct suffrage be worth then? If the government decreed universal direct suffrage, it would from the outset hedge it about with so many ifs and buts that it would in fact not be universal direct suffrage at all any more. And regarding universal direct suffrage itself, one has only to go to France to realise what tame elections it can give rise to, if one has only a large and ignorant rural population, a well-organised bureaucracy, a well-regimented press, associations sufficiently kept down by the police and no political meetings at all. How many workers' representatives does universal direct suffrage send to the French chamber, then? And yet the French proletariat has the advantage over the German of far greater concentration and longer experience of struggle and organisation. Which brings us to yet another point. In Germany the rural population is twice the size of the urban population, i.e., 2/3 earn their living from agriculture and 1/3 from industry. And since in Germany the big landowner is the rule and the small peasant with his strips the exception, put another way that means: if 1/3 of the workers are at the beck and call of the capitalists, 2/3 are at the beck and call of the feudal lords. Let those who never stop railing at the capitalists but never utter a word in anger against the feudalists take that to heart! 55 The feudalists exploit twice as many workers in Germany as the bourgeoisie; in Germany they are just as directly opposed to the workers as the capitalists. But that is by no means all. The patriarchal economic system estates generates a hereditary dependence on the old feudal of the rural day labourer or cottager on "his lordship" which makes it far more difficult for the agricultural proletarian to enter the urban workers' movement. The clergy, the systematic obscurantism in the country, the bad schooling and the remoteness of the people from the world at large do the rest. The agricultural proletariat is the section of the working class which has most difficulty in understanding its own interests and its own social situation and is the last to do so, in other words, it is the section which remains the longest as an unconscious tool in the hands of the privileged class which is exploiting it. And which class is that? Not the bourgeoisie, in Germany, but the feudal aristocracy. Now even in France, where after all virtually all the peasants are free and own their land and where the feudal aristocracy has long been deprived of all political power, universal suffrage has not put workers into the Chamber but has almost totally excluded them from it. What would be the consequence of universal suffrage in Germany, where the feudal aristocracy is still a real social and political power and where there are two agricultural day labourers for every industrial worker? The battle against feudal and bureaucratic reaction for the two are inseparable in our country is in Germany identical with the struggle for the intellectual and political emancipation of the rural proletariat and until such time as the rural proletariat is also swept along into the movement, the urban proletariat cannot and will not achieve anything at all in Germany and universal direct suffrage will not be a weapon for the proletariat but a snare. Perhaps this exceptionally candid but necessary analysis will encourage the feudalists to espouse the cause of universal direct suffrage. So much the better. Or do we imagine that the government is only stultifying the press, the right of association and the right of assembly, as far as the bourgeois opposition is concerned (if indeed/there is much left to be stultified in present conditions) in order to make a present of a free press and free rights of association and assembly to the workers? Is not the workers' movement in fact calmly continuing on its own untroubled way? But that is precisely the crux of the matter. The government knows, and the bourgeoisie knows too, that the whole German workers' movement today is only tolerated, only survives, for as long as the government chooses. For as long as it serves the government's purpose for this movement to exist and for the bourgeois opposition to be faced with new, independent opponents, thus long Will it tolerate this movement. From the moment that this movement turns the workers into an independent force and thereby becomes a danger to the government, there will be an abrupt end to it all. The whole manner in which the men-of-Progress agitation in the press, associations and assemblies has been put down, should serve as a warning to the workers. The same laws, edicts and measures which were applied in that case, can be applied against them at any time and deal a lethal blow to their agitation; and the will be so applied as soon as this agitation becomes dangerous. It is of the greatest importance that the workers should be clear about this point, and do not fall prey to the same illusion as the bourgeoisie in the "New Era", when they were similarly only tolerated but imagined they were already in the saddle. And if anyone should imagine the present. government would free the press, the right of association and the right of assembly from their present fetters, he is clearly among those to whom there is no point in talking. And unless there is freedom of the press, the right of association and the right of assembly, no workers' movement is possible. The present government in Prussia is not so naive as to be likely to cut its own throat. And if it should ever happen that reaction were to throw a few sham political concessions to the German proletariat as a bait then let us hope the German proletariat will answer with the proud words of the old Lay of Hildebrand: But if the workers' party can expect nothing from reaction except small concessions which will come to it anyway without it needing to go begging for them what then can it expect from the bourgeois opposition? We have seen that the bourgeoisie and the proletariat-are both progeny of a new era and that in their social function both are striving to eliminate the remnants of the bric-a-brac left over from earlier times. It is true that there is a most serious conflict to be settled between them, but this conflict can only be fought out when they are facing each other alone. Only by jettisoning the old lumber can the "decks be cleared for battle" except that this time the battle will be fought not between two ships but on board the one ship, between officers and crew. The bourgeoisie cannot win political power for itself nor give this political power constitutional and legal forms without at the same time putting weapons into the hands of the proletariat. As distinct from the old Estates, distinguished by birth, it must proclaim human rights, as distinct from the guilds, it must proclaim freedom of trade and industry, as distinct from the tutelage of the bureaucracy, it must proclaim freedom and self-government. To be consistent, it must therefore demand universal, direct suffrage, freedom of the press, association and assembly and the suspension of all special laws directed against individual classes of the population. And there is nothing else that the proletariat needs to demand from it. It cannot require that the bourgeoisie should cease to be a bourgeoisie, but it certainly can require that it practices its own principles consistently. But the proletariat will thereby also acquire all the weapons it needs for its ultimate victory. With freedom of the press and the right of assembly and association it will win universal suffrage, and with universal, direct suffrage, in conjunction with the above tools of agitation, it will win everything else. It is therefore in the interests of the workers to support the bourgeoisie in its struggle against all reactionary elements, as long as it remains true to itself. Every gain which the bourgeoisie extracts from reaction, eventually benefits the working class, if that condition is fulfilled. And the German workers were quite correct in their instinctive appreciation of this. Everywhere, in every German state, they have quite rightly voted for the most radical candidates who had any prospect of getting in. But what if the bourgeoisie is untrue to itself and betrays its own class interests, together with the principles these imply? Then there are two paths left to the workers! Either to drive the bourgeoisie on against its will and compel it as far as possible to extend the suffrage, to grant freedom of the press, association and assembly and thereby to create an arena for the proletariat in which it can move freely and organise. This is what the English workers have done since the Reform Bill of 1832 and the French workers since the July Revolution of 1830, furthering their own development and organisation precisely through and with this movement, whose immediate aims were purely bourgeois in nature, more than by any other method. There will always be cases like this, for with its lack of political courage the bourgeoisie everywhere will occasionally be untrue to itself. Or alternatively, the workers might withdraw entirely from the bourgeois movement and leave the bourgeoisie to its fate. This was what happened in England, France and Germany after the failure of the European workers' movement from 1848 to 1850. It can only happen after violent and temporarily fruitless exertions, after which the class needs to rest. It cannot happen when the working class is in a healthy condition, for it would be the equivalent of total political abdication, and a class which is courageous by nature, a class which has nothing to lose and everything to gain, is incapable of that in the long term. Even if the worst came to the worst and the bourgeoisie was to scurry under the skirts of reaction for fear of the workers, and appeal to the power of . those elements hostile to itself for protection against them even then the workers' party would have no choice but, notwithstanding the bourgeoisie, to continue its campaign for bourgeois freedom, freedom of the press and rights of assembly and association which the bourgeoisie had betrayed. Without these freedoms it will be unable to move freely itself; in this struggle it is fighting to establish the environment necessary for its existence, for the air it needs to breathe. We are taking it for granted that in all these eventualities the workers' party will not play the part of a mere appendage to the bourgeoisie but of an independent party quite distinct from it. It will remind the bourgeoisie at every opportunity that the class interests of the workers are directly opposed to those of the; capitalists and that the workers are aware of this. It will retain control of and further develop its own organisation as distinct. from the party organisation of the bourgeoisie, and will only negotiate with the latter as one power with another. In this way it will secure for itself a position commanding respect, educate the individual workers about their class interests and when the next revolutionary storm comes and these storms now recur as regularly as trade crises and equinoctial storms it will be ready to act. The policy of the workers' party in the Prussian constitutional conflict emerges therefore self-evidently:

The International Workingmen's Association, The Prussian Military Question and the German Workers' Party

https://www.marxists.org/archive/marx/works/1865/02/12.htm

Karl Marx and Frederick Engels London and Manchester, February 23, 1865

The International Workingmen's Association, To the editor of the Social-Demokrat

https://www.marxists.org/archive/marx/works/1865/02/23.htm

Frederick Engels

The Prussian Military Question and the German Workers' Party

https://www.marxists.org/archive/marx/works/1865/02/27.htm

On November 11, 1864 Herr v. Schweitzer informed me by letter of the foundation of the Social-Demokrat, organ of the General Association of German Workers and stated at the time, among other things: On November 19, 1864 Herr v. Schweitzer wrote to me: Herr v. Schweitzer went on to ask whether, At the beginning of January 1865, after the confiscation of one of the first issues of the Social-Demokrat, I congratulated Herr v. Schweitzer on this event, adding that he must publicly break with the Ministry. On the news of Proudhon's death he requested an article on Proudhon. I met his wish by return of post, but took this opportunity of characterising now in his own newspaper "even the semblance of compromise with the powers that be" as a contravention of "simple moral sense", and Proudhon's flirtation with Louis Bonaparte after the coup d' tat as "baseness". At the same time Engels sent him a translation of an Old Danish peasant ballad in order, in a marginal note, to impress on the readers of the Social-Demokrat the necessity of struggle against the rural squirearchy. But during the same month of January, I again had to protest against Herr v. Schweitzer's "tactics". He replied on February 4: In the meantime, in No. 21 of the Social-Demokrat, the Paris correspondent had corrected his earlier allegation' and deprived our statement of its immediate pretext. We therefore accepted Herr v. Schweitzer's refusal to print it. But at the same time I wrote to him r that "we would express our opinion in detail elsewhere about the relationship of the workers to the Prussian Government". Finally I made one last attempt to demonstrate to him the wretchedness of his "tactics", however honestly they might be meant, with a practical example, the coalition question. He replied on February 15: Karl Marx London, March 15, 1865

The International Workingmen's Association, Statement regarding the causes of the breach with the Social-Demokrat

https://www.marxists.org/archive/marx/works/1865/03/15.htm

March 17 1865 In the first the author subjects the reorganisation of the Prussian army to the critique of military science. Its main fault he finds in the fact that the reorganisation plan "whilst in appearance reverting to the original concept of universal conscription, which cannot... function without a large army-reserve in the form of a Landwehr, ... in fact executes an about-turn in the direction of the Franco-Austrian cadre-system". The second section sharply criticises the bourgeois opposition's handling of the military question. The author comes to the conclusion:

The International Workingmen's Association, Marx on Engels' pamphlet The Prussian Military Question and the German Workers' Party

https://www.marxists.org/archive/marx/works/1865/03/17.htm

alt-Bommel, March 28, 1865

The International Workingmen's Association, To the editor of the Berliner Reform

https://www.marxists.org/archive/marx/works/1865/03/28.htm

On page 124 of my Herr Vogt I state in a footnote: The "President of Mankind" deigns to add: "Liebknecht," continues Bernhard Becker, "is now systematically working on Countess Hatzfeldt, to whom Marx, too, sends telegrams and letters in order to turn her against the Association." Herr Bernhard Becker imagines that I take the importance he acquired by bequest quite as "systematically" seriously as he does himself! My letters to Countess Hatzfeldt after the death of Lassalle consisted of a message of condolence, of answers to various questions put to me on account of the planned Lassalle brochure and of discussions on a refutation against a libeller of Lassalle that I had been requested to, and subsequently did, undertake. So as to avoid misunderstandings, however, I thought it very much to the point to remind the Countess in a letter of December 22, 1864 that I did not agree with Lassalle's politics. That concluded our correspondence, in which not a syllable was uttered about the Association. The Countess had requested me among other things to let her know by return whether the release of certain portraits for the planned brochure seemed appropriate to me. I replied by telegraph: No! This single telegram is put into the plural by Herr Bernhard Becker, who is no less eminent a grammarian than he is poet and thinker. He relates that I also took part in a campaign directed against him at a later date. The sole step on my part in this all-important affair was this: I had heard from Berlin that Bernhard Becker was being persecuted from a certain quarter because he was not willing to allow the Social-Demokrat and the Association to be misused in order to agitate for the incorporation of Schleswig-Holstein into Prussia. At the same time I had been asked to bring this "intrigue" to the notice of Herr Klings in Solingen, over whom a certain degree of influence was attributed to me on account of some earlier contacts, and Herr Philipp Becker in Geneva, in order to give them due warning. I did both things, the former through a Barmen friend, the latter through my friend Schily in Paris, who was labouring, as I was, under the delusion that something human had happened to the "President of Mankind" and that he had actually behaved decently for once. He now naturally distorts the facts of the matter into the exact opposite -- being a dialectician. The "President of Mankind" is, however, not only an eminent writer, thinker, grammarian and dialectician. He is a pathologist of the first water, to boot. My eighteen-month-old carbuncle complaint, which happened to last six months after Lassalle's death, this blood-red disease he explains as due to "pale envy at Lassalle's greatness". Herr Bernhard Becker's gift for discrimination obviously provides support for his power of reasoning. His association, he boasts, comprised all of "400 men" in its heyday, while our Association shows so little modesty that it already numbers 10,000 members in England alone. It is, in fact, impermissible that anything of this sort should take place behind the back as it were of the "President of Mankind". All in all, and with particular respect to Herr Bernhard Becker's abundance of abilities only briefly suggested by me, one finds that he is hardly justified in his complaints that people have sought to impose too much at once on a man like him; that people have not only forced on him the job of exercising autocratic power as his main field, but also the lesser office of "buying eggs and butter for the house", "on the side". It would seem, however, that a better domestic order could be achieved by re-arranging his dual functions. May his main task in future be the "buying of eggs and butter for the house", and, conversely, let him preside over mankind solely "on the side".

The International Workingmen's Association, The 'President of Mankind'

https://www.marxists.org/archive/marx/works/1865/04/08.htm

Mr. Eccarius (a German worker, Vice-President of the International Working Men's Association) seconded the motion, referring in detail to the share Prussia had taken in the various partitions of Poland. In conclusion he said: The Daily News and a few other "liberal" London dailies omitted this part of the report, being vexed by the triumph of the International Working Men's Association, without whose collaboration, incidentally, the Polish meeting at St. Martin's Hall could not have taken place at all. On behalf of the International Working Men's Association, I request you to print this correction.

The International Workingmen's Association, Correction

https://www.marxists.org/archive/marx/works/1865/04/13.htm

Proudhon s earliest efforts I no longer remember. His school work about the Langue universelle shows how unceremoniously he tackled problems for the solution of which he still lacked the first elements of knowledge. His first work, Qu est-ce que la propri t ?, is undoubtedly his best. It is epoch-making, if not because of the novelty of its content, at least because of the new and audacious way of expressing old ideas. In the works of the French socialists and communists he knew propri t had, of course, been not only criticised in various ways but also abolished in a utopian manner. In this book Proudhon stands in approximately the same relation to Saint-Simon and Fourier as Feuerbach stands to Hegel. Compared with Hegel, Feuerbach is certainly poor. Nevertheless he was epoch-making after Hegel because he laid stress on certain points which were disagreeable to the Christian consciousness but important for the progress of criticism, points which Hegel had left in mystic clair-obscur [semi-obscurity]. In this book of Proudhon s there still prevails, if I may be allowed the expression, a strong muscular style. And its style is in my opinion its chief merit. It is evident that even where he is only reproducing old stuff, Proudhon discovers things in an independent way that what he is saying is new to him and is treated as new. The provocative defiance, which lays hands on the economic holy of holies, the ingenious paradox which made a mock of the ordinary bourgeois understanding, the withering criticism, the bitter irony, and, revealed here and there, a deep and genuine feeling of indignation at the infamy of the existing order, a revolutionary earnestness all these electrified the readers of Qu est-ce que la propri t ? and provided a strong stimulus on its first appearance. In a strictly scientific history of political economy the book would hardly be worth mentioning. But sensational works of this kind have their role to play in the sciences just as much as in the history of the novel. Take, for instance, Malthus s book on Population. Its first edition was nothing but a SENSATIONAL PAMPHLET and plagiarism from beginning to end into the bargain. And yet what a stimulus was produced by this lampoon on the human race! If I had Proudhon s book before me I could easily give a few examples to illustrate his early style. In the passages which he himself regarded as the most important he imitates Kant s treatment of the antinomies Kant was at that time the only German philosopher whose works he had read, in translations and he leaves one with a strong impression that to him, as to Kant, the resolution of the antinomies is something beyond human understanding, i.e., something that remains obscure to him himself. But in spite of all his apparent iconoclasm one already finds in Qu est-ce que la propri t ? the contradiction that Proudhon is criticising society, on the one hand, from the standpoint and with the eyes of a French small-holding peasant (later petit bourgeois) and, on the other, that he measures it with the standards he inherited from the socialists. The deficiency of the book is indicated by its very title. The question is so badly formulated that it cannot be answered correctly. Ancient property relations were superseded by feudal property relations and these by bourgeois property relations. Thus history itself had expressed its criticism upon past property relations. What Proudhon was actually dealing with was modern bourgeois property as it exists today. The question of what this is could have only been answered by a critical analysis of political economy, embracing the totality of these property relations, considering not their legal aspect as relations of volition but their real form, that is, as relations of production. But as Proudhon entangled the whole of these economic relations in the general legal concept of property, la propri t , he could not get beyond the answer which, in a similar work published before 1789, Brissot had already given in the same words: La propri t c est le vol. The upshot is at best that the bourgeois legal conceptions of theft apply equally well to the honest gains of the bourgeois himself. On the other hand, since theft as a forcible violation of property presupposes the existence of property, Proudhon entangled himself in all sorts of fantasies, obscure even to himself, about true bourgeois property. During my stay in Paris in 1844 I came into personal contact with Proudhon. I mention this here because to a certain extent I am also to blame for his SOPHISTICATION : as the English call the adulteration of commercial goods. In the course of lengthy debates often lasting all night, I infected him very much to his detriment with Hegelianism, which, owing to his lack of German, he could not study properly. After my expulsion from Paris Herr Karl Gr n continued what I had begun. As a teacher of German philosophy he also had the advantage over me that he himself understood nothing about it. Shortly before the appearance of Proudhon s second important work, the Philosophie de la mis re, etc., he himself announced this to me in a very detailed letter in which he said, among other things: "J attends votre f rule critique." This criticism, however, soon dropped on him (in my Mis re de la philosophie, etc., Paris, 1847), in a way which ended our friendship for ever. For an estimate of his book, which is in two fat volumes, I must refer you to the refutation I wrote. There I have shown, among other things, how little he had penetrated into the secret of scientific dialectics and how, on the contrary, he shares the illusions of speculative philosophy, for instead of regarding economic categories as the theoretical expression of historical relations of production, corresponding to a particular stage of development in material production, he garbles them into pre-existing eternal ideas, and how in this roundabout way he arrives once more at the standpoint of bourgeois economy. [ When the economists say that present-day relations the relations of bourgeois production are natural, they imply that these are the relations in which wealth is created and productive forces developed in conformity with the laws of nature. These relations therefore are themselves natural laws independent of the influence of time. They are eternal laws which must always govern society. Thus there has been history, but there is no longer any (p. 113 of my work).] I show furthermore how extremely deficient and at times even schoolboyish is his knowledge of political economy which he undertook to criticise, and that he and the utopians are hunting for a so-called science by means of which a formula for the solution of the social question is to be devised a priori, instead of deriving science from a critical knowledge of the historical movement, a movement which itself produces the material conditions of emancipation. My refutation shows in particular that Proudhon s view of exchange-value, the basis of the whole theory, remains confused, incorrect and superficial, and that he even mistakes the utopian interpretation of Ricardo s theory of value for the basis of a new science. With regard to his general point of view I have summarised my conclusions thus: The February Revolution certainly came at a very inconvenient moment for Proudhon, who had irrefutably proved only a few weeks before that the era of revolutions was past for ever. His speech in the National Assembly, however little insight it showed into existing conditions, was worthy of every praise. After the June insurrection it was an act of great courage. In addition it had the fortunate consequence that M. Thiers, by his reply opposing Proudhon s proposals, which was then issued as a special booklet, proved to the whole of Europe what infantile catechism served this intellectual pillar of the French bourgeoisie as a pedestal. Compared with M. Thiers, Proudhon indeed swelled to the size of an antediluvian colossus. Proudhon s discovery of cr dit gratuit and the people s bank (banque du peuple), based upon it, were his last economic deeds. My book A Contribution to the Critique of Political Economy, Part I, Berlin, 1859 (pp. 59-64) contains the proof that the theoretical basis of his idea arises from a misunderstanding of the basic elements of bourgeois political economy, namely of the relation between commodities and money, while the practical superstructure was simply a reproduction of much older and far better developed schemes. That under certain economic and political conditions the credit system can be used to accelerate the emancipation of the working class, just as, for instance, at the beginning of the eighteenth, and again later, at the beginning of the nineteenth century in England, it facilitated the transfer of wealth from one class to another, is quite unquestionable and self-evident. But to regard interest-bearing capital as the main form of capital and to try to make a particular form of the credit system comprising the alleged abolition of interest, the basis for a transformation of society is an out-and-out petty-bourgeois fantasy. This fantasy, further diluted, can therefore actually already be found among the economic spokesmen of the English petty bourgeoisie in the seventeenth century. Proudhon s polemic with Bastiat (1850) about interest-bearing capital is on a far lower level than the Philosophie de la mis re. He succeeds in getting himself beaten even by Bastiat and breaks into burlesque bluster when his opponent drives his blows home. A few years ago Proudhon wrote a prize essay on Taxation, the competition was sponsored, I believe, by the government of Lausanne. Here the last flicker of genius is extinguished. Nothing remains but the petit bourgeois tout pur. So far as Proudhon s political and philosophical writings are concerned they all show the same contradictory, dual character as his economic works. Moreover their value is purely local, confined to France. Nevertheless his attacks on religion, the church, etc., were of great merit locally at a time when the French socialists thought it desirable to show by their religiosity how superior they were to the bourgeois Voltairianism of the eighteenth century and the German godlessness of the nineteenth. Just as Peter the Great defeated Russian barbarism by barbarity, Proudhon did his best to defeat French phrase-mongering by phrases. His work on the Coup d tat, in which he flirts with Louis Bonaparte and, in fact, strives to make him palatable to the French workers, and his last work, written against Poland, in which for the greater glory of the tsar he expresses moronic cynicism, must be described as works not merely bad but base, a baseness, however, which corresponds to the petty-bourgeois point of view. Proudhon has often been compared to Rousseau. Nothing could be more erroneous. He is more like Nicolas Linguet, whose Th orie des loix civiles, by the way, is a very brilliant book. Proudhon had a natural inclination for dialectics. But as he never grasped really scientific dialectics he never got further than sophistry. This is in fact connected with his petty-bourgeois point of view. Like the historian Raumer, the petty bourgeois is made up of on-the-one-hand and on-the-other-hand. This is so in his economic interests and therefore in his politics, religious, scientific and artistic views. And likewise in his morals, IN EVERYTHING. He is a living contradiction. If, like Proudhon, he is in addition an ingenious man, he will soon learn to play with his own contradictions and develop them according to circumstances into striking, ostentatious, now scandalous now brilliant paradoxes. Charlatanism in science and accommodation in politics are inseparable from such a point of view. There remains only one governing motive, the vanity of the subject, and the only question for him, as for all vain people, is the success of the moment, the clat of the day. Thus the simple moral sense, which always kept a Rousseau, for instance, from even the semblance of compromise with the powers that be, is bound to disappear. Posterity will perhaps sum up the latest phase of French development by saying that Louis Bonaparte was its Napoleon and Proudhon its Rousseau-Voltaire. You yourself have now to accept responsibility for having imposed upon me the role of a judge of the dead so soon after this man s death.

Letters: The International Workingmen's Association, To the editor of the Berliner Reform

https://www.marxists.org/archive/marx/works/1865/letters/65_01_24.htm

... What kind of people our Progressives are is shown once more by their conduct in the combination question. (By the way, the Prussian Anti-Combination Law, like all continental laws of this description, takes its origin from the decree of the Constituent Assembly of 14 June 1791, in which the French bourgeois strictly punish anything of the sort, and indeed any kind of workers associations condemning violators to, for instance, a year s loss of civil rights on the pretext that this is a restoration of the guilds and a contravention of constitutional liberty and the rights of man . It is very characteristic of Robespierre that at a time when it was a crime punishable by guillotining to be constitutional in the sense of the Assembly of 1789, all its laws against the workers remained in force.)

Marx-Engels Correspondence 1865

https://www.marxists.org/archive/marx/works/1865/letters/65_01_30.htm

Statement In No 16 of your paper Mr M Hess in Paris casts suspicion on the French members, who are entirely unknown to him, of the Central Council in London of the International Working Men s Association by writing: In an earlier issue, in a chat about the paper L'Association, this same Mr M Hess made a similar insinuation against the Parisian friends of the London Council. We declare that his insinuations are absurd slanders. By the way, we are glad that this incident has confirmed our conviction that the Paris proletariat continues to be irreconcilably opposed to Bonapartism, in both its forms, the form of the Tuileries and the form of the Palais Royal, and that it never contemplated selling its historical honour (or shall we say its historical birth-right as the protagonist of the revolution instead of its historical honour'?) for a mess of pottage. We recommend to the German workers that they follow this example.

Marx-Engels Correspondence 1865

https://www.marxists.org/archive/marx/works/1865/letters/65_02_06.htm

As today is Saturday I imagine you will not be sending off your thing on the same day, in which case there will still be time for these additional proposals for modification: 1) In the passage where you ask what the workers want I should not answer as you do that the workers in Germany, France and England demand so and so. For the answer sounds as if we accepted Itzig s slogans (at least it will be so interpreted). I should say rather somewhat the following: It would seem that the demands put forward at the present moment by the most advanced workers in Germany amount to the following, etc. This does not commit you at all, which is all the better considering that later on you yourself criticise universal suffrage without the requisite conditions. (The word direct moreover would indeed have no sense in England, etc, for example, and is only the opposite of the indirect franchise invented by the Prussians.) The form in which the philistines in Germany conceive state intervention la Lassalle is of such a kind that one must avoid identifying oneself with them in any way . It is much grander (and safer) if you take the philistines at their word and let them say themselves what they want. (I say the philistines, because they are the really argumentative and Lassalleanised section.) 2) I should not say that the movement of 1848-49 failed because the middle class was against direct universal suffrage. On the contrary, the latter was declared an ancient German right by the Frankfurters and it was proclaimed with due formality by the imperial Regent. (I think moreover that as soon as the matter comes to be discussed seriously in Germany, this franchise must be treated as part of the rightfully existing law.) As that is not the place for a longer exposition, I would extricate myself by using the phrase that the middle class at that time preferred peace with slavery to the mere prospect of a struggle with freedom, or something of the sort. As a whole the thing is very good and I am especially tickled by the part where it is shown that the present movement of the philistines exists in fact only by the grace of the police.

Marx-Engels Correspondence 1865

https://www.marxists.org/archive/marx/works/1865/letters/65_02_11.htm

Between whiles, as one cannot always be writing, I am doing some Differential Calculus dx/dy. I have no patience to read anything else. Any other reading always drives me back to my writing-desk. This evening a special session of the International. A good old fellow, an old Owenist, Weston (carpenter) has put forward the two following propositions, which he is continually defending in the Beehive: (1) That a general rise in the rate of wages would be of no use to the workers; (2) That therefore, etc., the trade unions have a harmful effect. If these two propositions, in which he alone in our society believes, were accepted, we should be turned into a joke (so w ren wir Kladderadatsch) both on account of the trade unions here and of the infection of strikes which now prevails on the Continent. On this occasion--as non-members may be admitted to this meeting--he will be supported by a born Englishman, who has written a pamphlet to the same effect. I am of course espected to supply the refutation. I ought really therefore to have worked out my reply for this evening, but thought it more important to write on at my bookt and so shall have to depend upon improvisation. Of course I know beforehand what the two main points are :

Letters: Marx-Engels Correspondence 1865

https://www.marxists.org/archive/marx/works/1865/letters/65_05_20-abs.htm

Another preliminary remark I have to make in regard to Citizen Weston. He has not only proposed to you, but has publicly defended, in the interest of the working class, as he thinks, opinions he knows to be most unpopular with the working class. Such an exhibition of moral courage all of us must highly honour. I hope that, despite the unvarnished style of my paper, at its conclusion he will find me agreeing with what appears to me the just idea lying at the bottom of his theses, which, however, in their present form, I cannot but consider theoretically false and practically dangerous. I shall now at once proceed to the business before us. Now, his first assertion is evidently erroneous. Year after year you will find that the value and mass of production increase, that the productive powers of the national labour increase, and that the amount of money necessary to circulate this increasing production continuously changes. What is true at the end of the year, and for different years compared with each other, is true for every average day of the year. The amount or magnitude of national production changes continuously. It is not a constant but a variable magnitude, and apart from changes in population it must be so, because of the continuous change in the accumulation of capital and the productive powers of labour. It is perfectly true that if a rise in the general rate of wages should take place today, that rise, whatever its ulterior effects might be, would, by itself, not immediately change the amount of production. It would, in the first instance, proceed from the existing state of things. But if before the rise of wages the national production was variable, and not fixed, it will continue to be variable and not fixed after the rise of wages. But suppose the amount of national production to be constant instead of variable. Even then, what our friend Weston considers a logical conclusion would still remain a gratuitous assertion. If I have a given number, say eight, the absolute limits of this number do not prevent its parts from changing their relative limits. If profits were six and wages two, wages might increase to six and profits decrease to two, and still the total amount remain eight. The fixed amount of production would by no means prove the fixed amount of wages. How then does our friend Weston prove this fixity? By asserting it. But even conceding him his assertion, it would cut both ways, while he presses it only in one direction. If the amount of wages is a constant magnitude, then it can be neither increased nor diminished. If then, in enforcing a temporary rise of wages, the working men act foolishly, the capitalists, in enforcing a temporary fall of wages, would act not less foolishly. Our friend Weston does not deny that, under certain circumstances, the working men can enforce a rise of wages, but their amount being naturally fixed, there must follow a reaction. On the other hand, he knows also that the capitalists can enforce a fall of wages, and, indeed, continuously try to enforce it. According to the principle of the constancy of wages, a reaction ought to follow in this case not less than in the former. The working men, therefore, reacting against the attempt at, or the act of, lowering wages, would act rightly. They would, therefore, act rightly in enforcing a rise of wages, because every reaction against the lowering of wages is an action for raising wages. According to Citizen Weston's own principle of the constancy of wages, the working men ought, therefore, under certain circumstances, to combine and struggle for a rise of wages. If he denies this conclusion, he must give up the premise from which it flows. He must not say that the amount of wages is a constant quantity, but that, although it cannot and must not rise, it can and must fall, whenever capital pleases to lower it. If the capitalist pleases to feed you upon potatoes instead of upon meat, and upon oats instead of upon wheat, you must accept his will as a law of political economy, and submit to it. If in one country the rate of wages is higher than in another, in the United States, for example, than in England, you must explain this difference in the rate of wages by a difference between the will of the American capitalist and the will of the English capitalist, a method which would certainly very much simplify, not only the study of economic phenomena, but of all other phenomena. But even then, we might ask, why the will of the American capitalist differs from the will of the English capitalist? And to answer the question you must go beyond the domain of will. A person may tell me that God wills one thing in France, and another thing in England. If I summon him to explain this duality of will, he might have the brass to answer me that God wills to have one will in France and another will in England. But our friend Weston is certainly the last man to make an argument of such a complete negation of all reasoning. The will of the capitalist is certainly to take as much as possible. What we have to do is not to talk about his will, but to enquire into his power, the limits of that power, and the character of those limits. All his reasoning amounted to this: If the working class forces the capitalist class to pay five shillings instead of four shillings in the shape of money wages, the capitalist will return in the shape of commodities four shillings' worth instead of five shillings' worth. The working class would have to pay five shillings for what, before the rise of wages, they bought with four shillings. But why is this the case? Why does the capitalist only return four shillings' worth for five shillings? Because the amount of wages is fixed. By why is it fixed at four shillings' worth of commodities? Why not at three, or two, or any other sum? If the limit of the amount of wages is settled by an economical law, independent alike of the will of the capitalist and the will of the working man, the first thing Citizen Weston had to do was to state that law and prove it. He ought then, moreover, to have proved that the amount of wages actually paid at every given moment always corresponds exactly to the necessary amount of wages, and never deviates from it. If, on the other hand, the given limit of the amount of wages is founded on the mere will of the capitalist, or the limits of his avarice, it is an arbitrary limit. There is nothing necessary in it. It may be changed by the will of the capitalist, and may, therefore, be changed against his will. Citizen Weston illustrated his theory by telling you that a bowl contains a certain quantity of soup, to be eaten by a certain number of persons, an increase in the broadness of the spoons would produce no increase in the amount of soup. He must allow me to find this illustration rather spoony. It reminded me somewhat of the simile employed by Menenius Agrippa. When the Roman plebeians struck against the Roman patricians, the patrician Agrippa told them that the patrician belly fed the plebeian members of the body politic. Agrippa failed to show that you feed the members of one man by filling the belly of another. Citizen Weston, on his part, has forgotten that the bowl from which the workmen eat is filled with the whole produce of national labour, and that what prevents them fetching more out of it is neither the narrowness of the bowl nor the scantiness of its contents, but only the smallness of their spoons. By what contrivance is the capitalist enabled to return four shillings' worth for five shillings? By raising the price of the commodity he sells. Now, does a rise and more generally a change in the prices of commodities, do the prices of commodities themselves, depend on the mere will of the capitalist? Or are, on the contrary, certain circumstances wanted to give effect to that will? If not, the ups and downs, the incessant fluctuations of market prices, become an insoluble riddle. As we suppose that no change whatever has taken place either in the productive powers of labour, or in the amount of capital and labour employed, or in the value of the money wherein the values of products are estimated, but only a change in the rate of wages, how could that rise of wages affect the prices of commodities? Only by affecting the actual proportion between the demand for, and the supply of these commodities. It is perfectly true that, considered as a whole, the working class spends, and must spend, its income upon necessaries. A general rise in the rate of wages would, therefore, produce a rise in the demand for, and consequently in the market prices of necessaries. The capitalists who produce these necessaries would be compensated for the risen wages by the rising market prices of their commodities. But how with the other capitalists who do not produce necessaries? And you must not fancy them a small body. If you consider that two-thirds of the national produce are consumed by one-fifth of the population a member of the House of Commons stated it recently to be but one-seventh of the population you will understand what an immense proportion of the national produce must be produced in the shape of luxuries, or be exchanged for luxuries, and what an immense amount of the necessaries themselves must be wasted upon flunkeys, horses, cats, and so forth, a waste we know from experience to become always much limited with the rising prices of necessaries. Well, what would be the position of those capitalists who do not produce necessaries? For the fall in the rate of profit, consequent upon the general rise of wages, they could not compensate themselves by a rise in the price of their commodities, because the demand for those commodities would not have increased. Their income would have decreased, and from this decreased income they would have to pay more for the same amount of higher-priced necessaries. But this would not be all. As their income had diminished they would have less to spend upon luxuries, and therefore their mutual demand for their respective commodities would diminish. Consequent upon this diminished demand the prices of their commodities would fall. In these branches of industry, therefore, the rate of profit would fall, not only in simple proportion to the general rise in the rate of wages, but in the compound ratio of the general rise of wages, the rise in the prices of necessaries, and the fall in the prices of luxuries. What would be the consequence of this difference in the rates of profit for capitals employed in the different branches of industry? Why, the consequence that generally obtains whenever, from whatever reason, the average rate of profit comes to differ in different spheres of production. Capital and labour would be transferred from the less remunerative to the more remunerative branches; and this process of transfer would go on until the supply in the one department of industry would have risen proportionately to the increased demand, and would have sunk in the other departments according to the decreased demand. This change effected, the general rate of profit would again be equalized in the different branches. As the whole derangement originally arose from a mere change in the proportion of the demand for, and supply of, different commodities, the cause ceasing, the effect would cease, and PRICES would return to their former level and equilibrium. Instead of being limited to some branches of industry, the fall in the rate of profit consequent upon the rise of wages would have become general. According to our supposition, there would have taken place no change in the productive powers of labour, nor in the aggregate amount of production, but that given amount of production would have changed its form. A greater part of the produce would exist in the shape of necessaries, a lesser part in the shape of luxuries, or what comes to the same, a lesser part would be exchanged for foreign luxuries, and be consumed in its original form, or, what again comes to the same, a greater part of the native produce would be exchanged for foreign necessaries instead of for luxuries. The general rise in the rate of wages would, therefore, after a temporary disturbance of market prices, only result in a general fall of the rate of profit without any permanent change in the prices of commodities. If I am told that in the previous argument I assume the whole surplus wages to be spent upon necessaries, I answer that I have made the supposition most advantageous to the opinion of Citizen Weston. If the surplus wages were spent upon articles formerly not entering into the consumption of the working men, the real increase of their purchasing power would need no proof. Being, however, only derived from an advance of wages, that increase of their purchasing power must exactly correspond to the decrease of the purchasing power of the capitalists. The aggregate demand for commodities would, therefore, not increase, but the constituent parts of that demand would change. The increasing demand on the one side would be counterbalanced by the decreasing demand on the other side. Thus the aggregate demand remaining stationary, no change whatever could take place in the market prices of commodities. You arrive, therefore, at this dilemma: Either the surplus wages are equally spent upon all articles of consumption then the expansion of demand on the part of the working class must be compensated by the contraction of demand on the part of the capitalist class or the surplus wages are only spent upon some articles whose market prices will temporarily rise. The consequent rise in the rate of profit in some, and the consequent fall in the rate of profit in other branches of industry will produce a change in the distribution of capital and labour, going on until the supply is brought up to the increased demand in the one department of industry, and brought down to the diminished demand in the other departments of industry. On the one supposition there will occur no change in the prices of commodities. On the other supposition, after some fluctuations of market prices, the exchangeable values of commodities will subside to the former level. On both suppositions the general rise in the rate of wages will ultimately result in nothing else but a general fall in the rate of profit. To stir up your powers of imagination Citizen Weston requested you to think of the difficulties which a general rise of English agricultural wages from nine shillings to eighteen shillings would produce. Think, he exclaimed, of the immense rise in the demand for necessaries, and the consequent fearful rise in their prices! Now, all of you know that the average wages of the American agricultural labourer amount to more than double that of the English agricultural labourer, although the prices of agricultural produce are lower in the United States than in the United Kingdom, although the general relations of capital and labour obtain in the United States the same as in England, and although the annual amount of production is much smaller in the United States than in England. Why, then, does our friend ring this alarm bell? Simply to shift the real question before us. A sudden rise of wages from nine shillings to eighteen shillings would be a sudden rise to the amount of 100 percent. Now, we are not at all discussing the question whether the general rate of wages in England could be suddenly increased by 100 percent. We have nothing at all to do with the magnitude of the rise, which in every practical instance must depend on, and be suited to, given circumstances. We have only to inquire how a general rise in the rate of wages, even if restricted to one percent, will act. Dismissing friend Weston's fancy rise of 100 percent, I propose calling your attention to the real rise of wages that took place in Great Britain from 1849 to 1859. You are all aware of the Ten Hours Bill, or rather Ten-and-a-half Hours Bill, introduced since 1848. This was one of the greatest economical changes we have witnessed. It was a sudden and compulsory rise of wages, not in some local trades, but in the leading industrial branches by which England sways the markets of the world. It was a rise of wages under circumstances singularly unpropitious. Dr. Ure, Professor Senior, and all the other official economical mouthpieces of the middle class, [The aristocracy was the upper class of Great Britain, while the capitalists composed what was known to Marx as the middle class] proved, and I must say upon much stronger grounds than those of our friend Weston, that it would sound the death-knell of English industry. They proved that it not only amounted to a simple rise of wages, but to a rise of wages initiated by, and based upon, a diminution of the quantity of labour employed. They asserted that the twelfth hour you wanted to take from the capitalist was exactly the only hour from which he derived his profit. They threatened a decrease of accumulation, rise of prices, loss of markets, stinting of production, consequent reaction upon wages, ultimate ruin. In fact, they declared Maximillian Robespierre's Maximum Laws to be a small affair compared to it; and they were right in a certain sense. Well, what was the result? A rise in the money wages of the factory operatives, despite the curtailing of the working day, a great increase in the number of factory hands employed, a continuous fall in the prices of their products, a marvellous development in the productive powers of their labour, an unheard-of progressive expansion of the markets for their commodities. In Manchester, at the meeting, in 1860, of the Society for the Advancement of Science, I myself heard Mr. Newman confess that he, Dr. Ure, Senior, and all other official propounders of economical science had been wrong, while the instinct of the people had been right. I mention Mr. W. Newman, not Professor Francis Newman, because he occupies an eminent position in economical science, as the contributor to, and editor of, Mr. Thomas Tooke's History Of Prices, that magnificent work which traces the history of prices from 1793 to 1856. If our friend Weston's fixed idea of a fixed amount of wages, a fixed amount of production, a fixed degree of the productive power of labour, a fixed and permanent will of the capitalist, and all his other fixedness and finality were correct, Professor Senior's woeful forebodings would been right, and Robert Owen, who already in 1816 proclaimed a general limitation of the working day the first preparatory step to the emancipation of the working class, and actually in the teeth of the general prejudice inaugurated it on his own hook in his cotton factory at New Lanark, would have been wrong. In the very same period during which the introduction of the Ten Hours Bill, and the rise of wages consequent upon it, occurred, there took place in Great Britain, for reasons which it would be out of place to enumerate here, a general rise in agricultural wages. Although it is not required for my immediate purpose, in order not to mislead you, I shall make some preliminary remarks. If a man got two shillings weekly wages, and if his wages rose to four shillings, the rate of wages would have risen by 100 per cent. This would seem a very magnificent thing if expressed as a rise in the rate of wages, although the actual amount of wages, four shillings weekly, would still remain a wretchedly small, a starvation pittance. You must not, therefore, allow yourselves to be carried away by the high sounding per cents in rate of wages. You must always ask: What was the original amount? Moreover, you will understand, that if there were ten men receiving each 2s. per week, five men receiving each 5s., and five men receiving 11s. weekly, the twenty men together would receive 100s., or 5, weekly. If then a rise, say by 20 per cent, upon the aggregate sum of their weekly wages took place, there would be an advance from 5 to 6. Taking the average, we might say that the general rate of wages had risen by 20 per cent, although, in fact, the wages of the ten men had remained stationary, the wages of the one lot of five men had risen from 5s. to 6s. only, and the wages of the other lot of five from 55s. to 70s. One half of the men would not have improved at all their position, one quarter would have improved it in an imperceptible degree, and only one quarter would have bettered it really. Still, reckoning by the average, the total amount of the wages of those twenty men would have increased by 25 per cent, and as far as the aggregate capital that employs them, and the prices of the commodities they produce, are concerned, it would be exactly the same as if all of them had equally shared in the average rise of wages. In the case of agricultural labour, the standard wages being very different in the different counties of England and Scotland, the rise affected them very unequally. Lastly, during the period when that rise of wages took place counteracting influences were at work such as the new taxes consequent upon the Russian war, the extensive demolition of the dwelling-houses of the agricultural labourers, and so forth. Having premised so much, I proceed to state that from 1849 to 1859 there took place a rise of about 40 percent in the average rate of the agricultural wages of Great Britain. I could give you ample details in proof of my assertion, but for the present purpose think it sufficient to refer you to the conscientious and critical paper read in 1860 by the late Mr. John C. Morton at the London Society of Arts on The Forces used in Agriculture. Mr. Morton gives the returns, from bills and other authentic documents, which he had collected from about one hundred farmers, residing in twelve Scotch and thirty-five English counties. According to our friend Weston's opinion, and taken together with the simultaneous rise in the wages of the factory operatives, there ought to have occurred a tremendous rise in the prices of agricultural produce during the period 1849 to 1859. But what is the fact? Despite the Russian war, and the consecutive unfavourable harvests from 1854 to 1856, the average price of wheat, which is the leading agricultural produce of England, fell from about 3 Pounds per quarter for the years 1838 to 1848 to about 2 Pounds 10 Shillings per quarter for the years 1849 to 1859. This constitutes a fall in the price of wheat of more than 16 percent simultaneously with an average rise of agricultural wages of 40 percent. During the same period, if we compare its end with its beginning, 1859 with 1849, there was a decrease of official pauperism from 934,419 to 860,470, the difference being 73,949; a very small decrease, I grant, and which in the following years was again lost, but still a decrease. It might be said that, consequent upon the abolition of the Corn Laws, the import of foreign corn was more than doubled during the period from 1849 to 1859, as compared with the period from 1838 to 1848. And what of that? From Citizen Weston's standpoint one would have expected that this sudden, immense, and continuously increasing demand upon foreign markets must have sent up the prices of agricultural produce there to a frightful height, the effect of increased demand remaining the same, whether it comes from without or from within. What was the fact? Apart from some years of failing harvests, during all that period the ruinous fall in the price of corn formed a standing theme of declamation in France; the Americans were again and again compelled to burn their surplus produce; and Russia, if we are to believe Mr. Urquhart, prompted the Civil War in the United States because her agricultural exports were crippled by the Yankee competition in the markets of Europe. Reduced to its abstract form, Citizen Weston's argument would come to this: Every rise in demand occurs always on the basis of a given amount of production. It can, therefore, never increase the supply of the articles demanded, but can only enhance their money prices. Now the most common observation shows than an increased demand will, in some instances, leave the market prices of commodities altogether unchanged, and will, in other instances, cause a temporary rise of market prices followed by an increased supply, followed by a reduction of the prices to their original level, and in many cases below their original level. Whether the rise of demand springs from surplus wages, or from any other cause, does not at all change the conditions of the problem. From Citizen Weston's standpoint the general phenomenon was as difficult to explain as the phenomenon occurring under the exceptional circumstances of a rise of wages. His argument had, therefore, no peculiar bearing whatever upon the subject we treat. It only expressed his perplexity at accounting for the laws by which an increase of demand produces an increase of supply, instead of an ultimate rise of market prices. In your country the mechanism of payments is much more perfected than in any other country of Europe. Thanks to the extent and concentration of the banking system, much less currency is wanted to circulate the same amount of values, and to transact the same or a greater amount of business. For example, as far as wages are concerned, the English factory operative pays his wages weekly to the shopkeeper, who sends them weekly to the banker, who returns them weekly to the manufacturer, who again pays them away to his working men, and so forth. By this contrivance the yearly wages of an operative, say of 52 Pounds, may be paid by one single Sovereign turning round every week in the same circle. Even in England the mechanism is less perfect than in Scotland, and is not everywhere equally perfect; and therefore we find, for example, that in some agricultural districts, much more currency is wanted to circulate a much smaller amount of values. If you cross the Channel you will find that the money wages are much lower than in England, but that they are circulated in Germany, Italy, Switzerland, and France by a much larger amount of currency. The same Sovereign will not be so quickly intercepted by the banker or returned to the industrial capitalist; and, therefore, instead of one Sovereign circulating 52 Pounds yearly, you want, perhaps, three Sovereigns to circulate yearly wages to the amount of 25 Pounds. Thus, by comparing continental countries with England, you will see at once that low money wages may require a much larger currency for their circulation than high money wages, and that this is, in fact, a merely technical point, quite foreign to our subject. According to the best calculations I know, the yearly income of the working class of this country may be estimated at 250,000,000 Pounds. This immense sum is circulated by about three million Pounds. Suppose a rise of wages of fifty per cent to take place. Then, instead of three millions of currency, four and a half millions would be wanted. As a very considerable part of the working-man's daily expenses is laid out in silver and copper, that is to say, in mere tokens, whose relative value to gold is arbitrarily fixed by law, like that of inconvertible money paper, a rise of money wages by fifty per cent would, in the extreme case, require and additional circulation of Sovereigns, say to the amount of one million. One million, now dormant, in the shape of bullion or coin, in the cellars of the Bank of England, or of private bankers would circulate. But even the trifling expense resulting from the additional minting or the additional wear and tear of that million might be spared, and would actually be spared, if any friction should arise from the want of the additional currency. All of you know that the currency of this country is divided into two great departments. One sort, supplied by bank-notes of different descriptions, is used in the transactions between dealers and dealers, and the larger payments from consumers to dealers, while another sort of currency, metallic coin, circulates in the retail trade. Although distinct, these two sorts of currency intermix with each other. Thus gold coin, to a very great extent, circulates even in larger payments for all the odd sums under 5 Pounds. If tomorrow 4 Pound notes, or 3 Pound notes, or 2 Pound notes were issued, the gold filling these channels of circulation would at once be driven out of them, and flow into those channels where they would be needed from the increase of money wages. Thus the additional million required by an advance of wages by fifty per cent would be supplied without the addition of one single Sovereign. The same effect might be produced, without one additional bank-note, by an additional bill circulation, as was the case in Lancashire for a very considerable time. If a general rise in the rate of wages, for example, of 100 per cent, as Citizen Weston supposed it to take place in agricultural wages, would produce a great rise in the prices of necessaries, and, according to his views, require an additional amount of currency not to be procured, a general fall in wages must produce the same effect, on the same scale, in the opposite direction. Well! All of you know that the years 1858 to 1860 were the most prosperous years for the cotton industry, and that peculiarly the year 1860 stands in that respect unrivalled in the annals of commerce, while at the same time all other branches of industry were most flourishing. The wages of the cotton operatives and of all the other working men connected with their trade stood, in 1860, higher than ever before. The American crisis came, and those aggregate wages were suddenly reduced to about one-fourth of their former amount. This would have been in the opposite direction a rise of 400 per cent. If wages rise from five to twenty, we say that they rise by 400 per cent; if they fall from twenty to five, we say that they fall by seventy-five per cent; but the amount of rise in the one and the amount of fall in the other case would be the same, namely, fifteen shillings. This, then, was a sudden change in the rate of wages unprecedented, and at the same time extending over a number of operatives which, if we count all the operatives not only directly engaged in but indirectly dependent upon the cotton trade, was larger by one-half than the number of agricultural labourers. Did the price of wheat fall? It rose from the annual average of 47 shillings 8d per quarter during the three years of 1858-1860 to the annual average of 55 shillings 10d per quarter during the three years 1861-1863. As to the currency, there were coined in the mint in 1861 8,673,323 Pounds, against 3,378,792 Pounds in 1860. That is to say, there were coined 5,294,440 Pounds more in 1861 than in 1860. It is true the bank-note circulation was in 1861 less by 1,319,000 Pounds than in 1860. Take this off. There remains still a surplus of currency for the year 1861, as compared with the prosperity year, 1860, to the amount of 3,975,440 Pounds, or about 4,000,000 Pounds; but the bullion reserve in the Bank of England had simultaneously decreased, not quite to the same, but in an approximating proportion. Compare the year 1862 with 1842. Apart from the immense increase in the value and amount of commodities circulated, in 1862 the capital paid in regular transactions for shares, loans, etc. for the railways in England and Wales amounted alone to 320,000,000 Pounds, a sum that would have appeared fabulous in 1842. Still, the aggregate amounts in currency in 1862 and 1842 were pretty nearly equal, and generally you will find a tendency to a progressive diminution of currency in the face of enormously increasing value, not only of commodities, but of monetary transactions generally. From our friend Weston's standpoint this is an unsolvable riddle. Looking somewhat deeper into this matter, he would have found that, quite apart from wages, and supposing them to be fixed, the value and mass of the commodities to be circulated, and generally the amount of monetary transactions to be settled, vary daily; that the amount of bank-notes issued varies daily; that the amount of payments realized without the intervention of any money, by the instrumentality of bills, cheques, book-credits, clearing houses, varies daily; that, as far as actual metallic currency is required, the proportion between the coin in circulation and the coin and bullion in reserve or sleeping in the cellars of banks varies daily; that the amount of bullion absorbed by the national circulation and the amount being sent abroad for international circulation vary daily. He would have found that this dogma of a fixed currency is a monstrous error, incompatible with our everyday movement. He would have inquired into the laws which enable a currency to adapt itself to circumstances so continually changing, instead of turning his misconception of the laws of currency into an argument against a rise of wages. The uncritical way in which he has treated his subject will become evident from one single remark. He pleads against a rise of wages or against high wages as the result of such a rise. Now, I ask him: What are high wages and what are low wages? Why constitute, for example, five shillings weekly low, and twenty shillings weekly high wages? If five is low as compared with twenty, twenty is still lower as compared with two hundred. If a man was to lecture on the thermometer, and commenced by declaiming on high and low degrees, he would impart no knowledge whatever. He must first tell me how the freezing-point is found out, and how the boiling-point, and how these standard points are settled by natural laws, not by the fancy of the sellers or makers of thermometers. Now, in regard to wages and profits, Citizen Weston has not only failed to deduce such standard points from economical laws, but he has not even felt the necessity to look after them. He satisfied himself with the acceptance of the popular slang terms of low and high as something having a fixed meaning, although it is self-evident that wages can only be said to be high or low as compared with a standard by which to measure their magnitudes. He will be unable to tell me why a certain amount of money is given for a certain amount of labour. If he should answer me, This was settled by the law of supply and demand, I should ask him, in the first instance, by what law supply and demand are themselves regulated. And such an answer would at once put him out of court. The relations between the supply and demand of labour undergo perpetual change, and with them the market prices of labour. If the demand overshoots the supply wages rise; if the supply overshoots the demand wages sink, although it might in such circumstances be necessary to test the real state of demand and supply by a strike, for example, or any other method. But if you accept supply and demand as the law regulating wages, it would be as childish as useless to declaim against a rise of wages, because, according to the supreme law you appeal to, a periodical rise of wages is quite as necessary and legitimate as a periodical fall of wages. If you do not accept supply and demand as the law regulating wages, I again repeat the question, why a certain amount of money is given for a certain amount of labour? But to consider matters more broadly: You would be altogether mistaken in fancying that the value of labour or any other commodity whatever is ultimately fixed by supply and demand. Supply and demand regulate nothing but the temporary fluctuations of market prices. They will explain to you why the market price of a commodity rises above or sinks below its value, but they can never account for the value itself. Suppose supply and demand to equilibrate, or, as the economists call it, to cover each other. Why, the very moment these opposite forces become equal they paralyze each other, and cease to work in the one or other direction. At the moment when supply and demand equilibrate each other, and therefore cease to act, the market price of a commodity coincides with its real value, with the standard price round which its market prices oscillate. In inquiring into the nature of that VALUE, we have therefore nothing at all to do with the temporary effects on market prices of supply and demand. The same holds true of wages and of the prices of all other commodities. I might appeal to practical observation to bear witness against this antiquated and exploded fallacy. I might tell you that the English factory operatives, miners, shipbuilders, and so forth, whose labour is relatively high-priced, undersell by the cheapness of their produce all other nations; while the English agricultural labourer, for example, whose labour is relatively low-priced, is undersold by almost every other nation because of the dearness of his produce. By comparing article with article in the same country, and the commodities of different countries, I might show, apart from some exceptions more apparent than real, that on an average the high-priced labour produces the low-priced, and low priced labour produces the high-priced commodities. This, of course, would not prove that the high price of labour in the one, and its low price in the other instance, are the respective causes of those diametrically opposed effects, but at all events it would prove that the prices of commodities are not ruled by the prices of labour. However, it is quite superfluous for us to employ this empirical method. It might, perhaps, be denied that Citizen Weston has put forward the dogma: The prices of commodities are determined or regulated by wages. In point of fact, he has never formulated it. He said, on the contrary, that profit and rent also form constituent parts of the prices of commodities, because it is out of the prices of commodities that not only the working man's wages, but also the capitalist's profits and the landlord's rents must be paid. But how in his idea are prices formed? First by wages. Then an additional percentage is joined to the price on behalf of the capitalist, and another additional percentage on behalf of the landlord. Suppose the wages of the labour employed in the production of a commodity to be ten. If the rate of profit was 100 per cent, to the wages advanced the capitalist would add ten, and if the rate of rent was also 100 per cent upon the wages, there would be added ten more, and the aggregate price of the commodity would amount to thirty. But such a determination of prices would be simply their determination by wages. If wages in the above case rose to twenty, the price of the commodity would rise to sixty, and so forth. Consequently all the superannuated writers on political economy who propounded the dogma that wages regulate prices, have tried to prove it by treating profit and rent as mere additional percentages upon wages. None of them were, of course, able to reduce the limits of those percentages to any economic law. They seem, on the contrary, to think profits settled by tradition, custom, the will of the capitalist, or by some other equally arbitrary and inexplicable method. If they assert that they are settled by the competition between the capitalists, they say nothing. That competition is sure to equalize the different rates of profit in different trades, or reduce them to one average level, but it can never determine the level itself, or the general rate of profit. What do we mean by saying that the prices of the commodities are determined by wages? Wages being but a name for the price of labour, we mean that the prices of commodities are regulated by the price of labour. As price is exchangeable value and in speaking of value I speak always of exchangeable value is exchangeable value expressed in money, the proposition comes to this, that the value of commodities is determined by the value of labour, or that the value of labour is the general measure of value." But how, then, is the value of labour itself determined? Here we come to a standstill. Of course, we come to a standstill if we try reasoning logically, yet the propounders of that doctrine make short work of logical scruples. Take our friend Weston, for example. First he told us that wages regulate the price of commodities and that consequently when wages rise prices must rise. Then he turned round to show us that a rise of wages will be no good because the prices of commodities had risen, and because wages were indeed measured by the prices of the commodities upon which they are spent. Thus we begin by saying that the value of labour determines the value of commodities, and we wind up by saying that the value of commodities determines the value of labour. Thus we move to and fro in the most vicious circle, and arrive at no conclusion at all. On the whole, it is evident that by making the value of one commodity, say labour, corn, or any other commodity, the general measure and regulator of value, we only shift the difficulty, since we determine one value by another, which on its side wants to be determined. The dogma that wages determine the price of commodities, expressed in its most abstract terms, comes to this, that value is determined by value, and this tautology means that, in fact, we know nothing at all about value. Accepting this premise, all reasoning about the general laws of political economy turns into mere twaddle. It was, therefore, the great merit of Ricardo that in his work on the principles of political economy, published in 1817, he fundamentally destroyed the old popular, and worn-out fallacy that wages determine prices, a fallacy which Adam Smith and his French predecessors had spurned in the really scientific parts of their researches, but which they reproduced in their more exoterical and vulgarizing chapters.

Economic Manuscripts: VALUE, PRICE AND PROFIT

https://www.marxists.org/archive/marx/works/1865/value-price-profit/ch01.htm

At first sight it would seem that the value of a commodity is a thing quite relative, and not to be settled without considering one commodity in its relations to all other commodities. In fact, in speaking of the value, the value in exchange of a commodity, we mean the proportional quantities in which it exchanges with all other commodities. But then arises the question: How are the proportions in which commodities exchange with each other regulated? We know from experience that these proportions vary infinitely. Taking one single commodity, wheat, for instance, we shall find that a quarter of wheat exchanges in almost countless variations of proportion with different commodities. Yet, its value remaining always the same, whether expressed in silk, gold, or any other commodity, it must be something distinct from, and independent of, these different rates of exchange with different articles. It must be possible to express, in a very different form, these various equations with various commodities. Besides, if I say a quarter of wheat exchanges with iron in a certain proportion, or the value of a quarter of wheat is expressed in a certain amount of iron, I say that the value of wheat and its equivalent in iron are equal to some third thing, which is neither wheat nor iron, because I suppose them to express the same magnitude in two different shapes. Either of them, the wheat or the iron, must, therefore, independently of the other, be reducible to this third thing which is their common measure. To elucidate this point I shall recur to a very simple geometrical illustration. In comparing the areas of triangles of all possible forms and magnitudes, or comparing triangles with rectangles, or any other rectilinear figure, how do we proceed? We reduce the area of any triangle whatever to an expression quite different from its visible form. Having found from the nature of the triangle that its area is equal to half the product of its base by its height, we can then compare the different values of all sorts of triangles, and of all rectilinear figures whatever, because all of them may be resolved into a certain number of triangles. The same mode of procedure must obtain with the values of commodities. We must be able to reduce all of them to an expression common to all, and distinguishing them only by the proportions in which they contain that identical measure. As the exchangeable values of commodities are only social functions of those things, and have nothing at all to do with the natural qualities, we must first ask: What is the common social substance of all commodities? It is labour. To produce a commodity a certain amount of labour must be bestowed upon it, or worked up in it. And I say not only labour, but social labour. A man who produces an article for his own immediate use, to consume it himself, creates a product, but not a commodity. As a self-sustaining producer he has nothing to do with society. But to produce a commodity, a man must not only produce an article satisfying some social want, but his labour itself must form part and parcel of the total sum of labour expended by society. It must be subordinate to the division of labour within society. It is nothing without the other divisions of labour, and on its part is required to integrate them. If we consider commodities as values, we consider them exclusively under the single aspect of realized, fixed, or, if you like, crystallized social labour. In this respect they can differ only by representing greater or smaller quantities of labour, as, for example, a greater amount of labour may be worked up in a silken handkerchief than in a brick. But how does one measure quantities of labour? By the time the labour lasts, in measuring the labour by the hour, the day, etc. Of course, to apply this measure, all sorts of labour are reduced to average or simple labour as their unit. We arrive, therefore, at this conclusion. A commodity has a value, because it is a crystallization of social labour. The greatness of its value, or its relative value, depends upon the greater or less amount of that social substance contained in it; that is to say, on the relative mass of labour necessary for its production. The relative values of commodities are, therefore, determined by the respective quantities or amounts of labour, worked up, realized, fixed in them. The correlative quantities of commodities which can be produced in the same time of labour are equal. Or the value of one commodity is to the value of another commodity as the quantity of labour fixed in the one is to the quantity of labour fixed in the other. I suspect that many of you will ask: Does then, indeed, there exist such a vast or any difference whatever, between determining the values of commodities by wages, and determining them by the relative quantities of labour necessary for their production? You must, however, be aware that the reward for labour, and quantity of labour, are quite disparate things. Suppose, for example, equal quantities of labour to be fixed in one quarter of wheat and one ounce of gold. I resort to the example because it was used by Benjamin Franklin in his first Essay published in 1721, and entitled A Modest Enquiry into the Nature and Necessity of a Paper Currency, where he, one of the first, hit upon the true nature of value. Well. We suppose, then, that one quarter of wheat and one ounce of gold are equal values or equivalents, because they are crystallizations of equal amounts of average labour, of so many days' or so many weeks' labour respectively fixed in them. In thus determining the relative values of gold and corn, do we refer in any way whatever to the wages of the agricultural labourer and the miner? Not a bit. We leave it quite indeterminate how their day's or their week's labour was paid, or even whether wage labour was employed at all. If it was, wages may have been very unequal. The labourer whose labour is realized in the quarter of wheat may receive two bushels only, and the labourer employed in mining may receive one-half of the ounce of gold. Or, supposing their wages to be equal, they may deviate in all possible proportions from the values of the commodities produced by them. They may amount to one-fourth, one-fifth, or any other proportional part of the one quarter of corn or the one ounce of gold. Their wages can, of course, not exceed, not be more than the values of the commodities they produced, but they can be less in every possible degree. Their wages will be limited by the values of the products, but the values of their products will not be limited by the wages. And above all, the values, the relative values of corn and gold, for example, will have been settled without any regard whatever to the value of the labour employed, that is to say, to wages. To determine the values of commodities by the relative quantities of labour fixed in them, is, therefore, a thing quite different from the tautological method of determining the values of commodities by the value of labour, or by wages. This point, however, will be further elucidated in the progress of our inquiry. In calculating the exchangeable value of a commodity we must add to the quantity of labour previously worked up in the raw material of the commodity, and the labour bestowed on the implements, tools, machinery, and buildings, with which such labour is assisted. For example, the value of a certain amount of cotton yarn is the crystallization of the quantity of labour added to the cotton during the spinning process, the quantity of labour previously realized in the cotton itself, the quantity of labour realized in the coal, oil, and other auxiliary substances used, the quantity of labour fixed in the steam-engine, the spindles, the factory building, and so forth. Instruments of production properly so-called, such as tools, machinery, buildings, serve again and again for longer or shorter period during repeated processes of production. If they were used up at once, like the raw material, their whole value would at once be transferred to the commodities they assist in producing. But as a spindle, for example, is but gradually used up, an average calculation is made, based upon the average time it lasts, and its average waste or wear and tear during a certain period, say a day. In this way we calculate how much of the value of the spindle is transferred to the yarn daily spin, and how much, therefore, of the total amount of labour realized in a pound of yarn, for example, is due to the quantity of labour previously realized in the spindle. For our present purpose it is not necessary to dwell any longer upon this point. It might seem that if the value of a commodity is determined by the quantity of labour bestowed upon its production, the lazier a man, or the clumsier a man, the more valuable his commodity, because the greater the time of labour required for finishing the commodity. This, however, would be a sad mistake. You will recollect that I used the word social labour, and many points are involved in this qualification of social. In saying that the value of a commodity is determined by the quantity of labour worked up or crystallized in it, we mean the quantity of labour necessary for its production in a given state of society, under certain social average conditions of production, with a given social average intensity, and average skill of the labour employed. When, in England, the power-loom came to compete with the hand-loom, only half the former time of labour was wanted to convert a given amount of yarn into a yard of cotton or cloth. The poor hand-loom weaver now worked seventeen or eighteen hours daily, instead of the nine or ten hours he had worked before. Still the product of twenty hours of his labour represented now only ten social hours of labour, or ten hours of labour socially necessary for the conversion of a certain amount of yarn into textile stuffs. His product of twenty hours had, therefore, no more value than his former product of ten hours. If then the quantity of socially necessary labour realized in commodities regulates their exchangeable values, every increase in the quantity of labour wanted for the production of a commodity must augment its value, as every diminution must lower it. If the respective quantities of labour necessary for the production of the respective commodities remained constant, their relative values also would be constant. But such is not the case. The quantity of labour necessary for the production of a commodity changes continuously with the changes in the productive powers of labour, the more produce is finished in a given time of labour; and the smaller the productive powers of labour, the less produce is finished in the same time. If, for example, in the progress of population it should become necessary to cultivate less fertile soils, the same amount of produce would be only attainable by a greater amount of labour spent, and the value of agricultural produce would consequently rise. On the other hand, if, with the modern means of production, a single spinner converts into yarn, during one working day, many thousand times the amount of cotton which he could have spun during the same time with the spinning wheel, it is evident that every single pound of cotton will absorb many thousand times less of spinning labour than it did before, and consequently, the value added by spinning to every single pound of cotton will be a thousand times less than before. The value of yarn will sink accordingly. Apart from the different natural energies and acquired working abilities of different peoples, the productive powers of labour must principally depend: The values of commodities are directly as the times of labour employed in their production, and are inversely as the productive powers of the labour employed. Having till now only spoken of value, I shall add a few words about price, which is a peculiar form assumed by value. Price, taken by itself, is nothing but the monetary expression of value. The values of all commodities of the country, for example, are expressed in gold prices, while on the Continent they are mainly expressed in silver prices. The value of gold or silver, like that of all other commodities is regulated by the quantity of labour necessary for getting them. You exchange a certain amount of your national products, in which a certain amount of your national labour is crystallized, for the produce of the gold and silver producing countries, in which a certain quantity of their labour is crystallized. It is in this way, in fact by barter, that you learn to express in gold and silver the values of all commodities, that is the respective quantities of labour bestowed upon them. Looking somewhat closer into the monetary expression of value, or what comes to the same, the conversion of value into price, you will find that it is a process by which you give to the values of all commodities an independent and homogeneous form, or by which you express them as quantities of equal social labour. So far as it is but the monetary expression of value, price has been called natural price by Adam Smith, prix necessaire by the French physiocrats. What then is the relation between value and market prices, or between natural prices and market prices? You all know that the market price is the same for all commodities of the same kind, however the conditions of production may differ for the individual producers. The market price expresses only the average amount of social labour necessary, under the average conditions of production, to supply the market with a certain mass of a certain article. It is calculated upon the whole lot of a commodity of a certain description. So far the market price of a commodity coincides with its value. On the other hand, the oscillations of market prices, rising now over, sinking now under the value or natural price, depend upon the fluctuations of supply and demand. The deviations of market prices from values are continual, but as Adam Smith says: I cannot now sift this matter. It suffices to say the if supply and demand equilibrate each other, the market prices of commodities will correspond with their natural prices, that is to say with their values, as determined by the respective quantities of labour required for their production. But supply and demand must constantly tend to equilibrate each other, although they do so only by compensating one fluctuation by another, a rise by a fall, and vice versa. If instead of considering only the daily fluctuations you analyze the movement of market prices for longer periods, as Mr. Tooke, for example, has done in his History of Prices, you will find that the fluctuations of market prices, their deviations from values, their ups and downs, paralyze and compensate each other; so that apart from the effect of monopolies and some other modifications I must now pass by, all descriptions of commodities are, on average, sold at their respective values or natural prices. The average periods during which the fluctuations of market prices compensate each other are different for different kinds of commodities, because with one kind it is easier to adapt supply to demand than with the other. If then, speaking broadly, and embracing somewhat longer periods, all descriptions of commodities sell at their respective values, it is nonsense to suppose that profit, not in individual cases; but that the constant and usual profits of different trades spring from the prices of commodities, or selling them at a price over and above their value. The absurdity of this notion becomes evident if it is generalized. What a man would constantly win as a seller he would constantly lose as a purchaser. It would not do to say that there are men who are buyers without being sellers, or consumers without being producers. What these people pay to the producers, they must first get from them for nothing. If a man first takes your money and afterwards returns that money in buying your commodities, you will never enrich yourselves by selling your commodities too dear to that same man. This sort of transaction might diminish a loss, but would never help in realizing a profit. To explain, therefore, the general nature of profits, you must start from the theorem that, on an average, commodities are sold at their real values, and that profits are derived from selling them at their values, that is, in proportion to the quantity of labour realized in them. If you cannot explain profit upon this supposition, you cannot explain it at all. This seems paradox and contrary to every-day observation. It is also paradox that the earth moves round the sun, and that water consists of two highly inflammable gases. Scientific truth is always paradox, if judged by every-day experience, which catches only the delusive appearance of things. To say that the value of a ten hours working day is equal to ten hours' labour, or the quantity of labour contained in it, would be a tautological and, moreover, a nonsensical expression. Of course, having once found out the true but hidden sense of the expression value of labour, we shall be able to interpret this irrational, and seemingly impossible application of value, in the same way that, having once made sure of the real movement of the celestial bodies, we shall be able to explain their apparent or merely phenomenal movements. What the working man sells is not directly his labour, but his labouring power, the temporary disposal of which he makes over to the capitalist. This is so much the case that I do not know whether by the English Laws, but certainly by some Continental Laws, the maximum time is fixed for which a man is allowed to sell his labouring power. If allowed to do so for any indefinite period whatever, slavery would be immediately restored. Such a sale, if it comprised his lifetime, for example, would make him at once the lifelong slave of his employer. One of the oldest economists and most original philosophers of England Thomas Hobbes has already, in his Leviathan, instinctively hit upon this point overlooked by all his successors. He says: the value or worth of a man is, as in all other things, his price: that is so much as would be given for the use of his power. Proceeding from this basis, we shall be able to determine the value of labour as that of all other commodities. But before doing so, we might ask, how does this strange phenomenon arise, that we find on the market a set of buyers, possessed of land, machinery, raw material, and the means of subsistence, all of them, save land in its crude state, the products of labour, and on the other hand, a set of sellers who have nothing to sell except their labouring power, their working arms and brains? That the one set buys continually in order to make a profit and enrich themselves, while the other set continually sells in order to earn their livelihood? The inquiry into this question would be an inquiry into what the economists call previous or original accumulation, but which ought to be called original expropriation. We should find that this so-called original accumulation means nothing but a series of historical processes, resulting in a decomposition of the original union existing between the labouring Man and his Instruments of Labour. Such an inquiry, however, lies beyond the pale of my present subject. The separation between the Man of Labour and the Instruments of Labour once established, such a state of things will maintain itself and reproduce itself upon a constantly increasing scale, until a new and fundamental revolution in the mode of production should again overturn it, and restore the original union in a new historical form. What, then, is the value of labouring power? Like that of every other commodity, its value is determined by the quantity of labour necessary to produce it. The labouring power of a man exists only in his living individuality. A certain mass of necessaries must be consumed by a man to grow up and maintain his life. But the man, like the machine, will wear out, and must be replaced by another man. Beside the mass of necessaries required for his own maintenance, he wants another amount of necessaries to bring up a certain quota of children that are to replace him on the labour market and to perpetuate the race of labourers. Moreover, to develop his labouring power, and acquire a given skill, another amount of values must be spent. For our purpose it suffices to consider only average labour, the costs of whose education and development are vanishing magnitudes. Still I must seize upon this occasion to state that, as the costs of producing labouring powers of different quality differ, so much differ the values of the labouring powers employed in different trades. The cry for an equality of wages rests, therefore, upon a mistake, is an inane wish never to be fulfilled. It is an offspring of that false and superficial radicalism that accepts premises and tries to evade conclusions. Upon the basis of the wages system the value of labouring power is settled like that of every other commodity; and as different kinds of labouring power have different values, or require different quantities of labour for their production, they must fetch different prices in the labour market. To clamour for equal or even equitable retribution on the basis of the wages system is the same as to clamour for freedom on the basis of the slavery system. What you think just or equitable is out of the question. The question is: What is necessary and unavoidable with a given system of production? After what has been said, it will be seen that the value of labouring power is determined by the value of the necessaries required to produce, develop, maintain, and perpetuate the labouring power. But our man is a wages labourer. He must, therefore, sell his labouring power to a capitalist. If he sells it at 3s. daily, or 18s. weekly, he sells it at its value. Suppose him to be a spinner. If he works six hours daily he will add to the cotton a value of 3s. daily. This value, daily added by him, would be an exact equivalent for the wages, or the price of his labouring power, received daily. But in that case no surplus value or surplus produce whatever would go to the capitalist. Here, then, we come to the rub. In buying the labouring power of the workman, and paying its value, the capitalist, like every other purchaser, has acquired the right to consume or use the commodity bought. You consume or use the labouring power of a man by making him work, as you consume or use a machine by making it run. By buying the daily or weekly value of the labouring power of the workman, the capitalist has, therefore, acquired the right to use or make that labouring power during the whole day or week. The working day or the working week has, of course, certain limits, but those we shall afterwards look more closely at. For the present I want to turn your attention to one decisive point. The value of the labouring power is determined by the quantity of labour necessary to maintain or reproduce it, but the use of that labouring power is only limited by the active energies and physical strength of the labourer. The daily or weekly value of the labouring power is quite distinct from the daily or weekly exercise of that power, the same as the food a horse wants and the time it can carry the horseman are quite distinct. The quantity of labour by which the value of the workman's labouring power is limited forms by no means a limit to the quantity of labour which his labouring power is apt to perform. Take the example of our spinner. We have seen that, to daily reproduce his labouring power, he must daily reproduce a value of three shillings, which he will do by working six hours daily. But this does not disable him from working ten or twelve or more hours a day. But by paying the daily or weekly value of the spinner's labouring power the capitalist has acquired the right of using that labouring power during the whole day or week. He will, therefore, make him work say, daily, twelve hours. Over and above the six hours required to replace his wages, or the value of his labouring power, he will, therefore, have to work six other hours, which I shall call hours of surplus labour, which surplus labour will realize itself in a surplus value and a surplus produce. If our spinner, for example, by his daily labour of six hours, added three shillings' value to the cotton, a value forming an exact equivalent to his wages, he will, in twelve hours, add six shillings' worth to the cotton, and produce a proportional surplus of yarn. As he has sold his labouring power to the capitalist, the whole value of produce created by him belongs to the capitalist, the owner pro tem. of his labouring power. By advancing three shillings, the capitalist will, therefore, realize a value of six shillings, because, advancing a value in which six hours of labour are crystallized, he will receive in return a value in which twelve hours of labour are crystallized. By repeating this same process daily, the capitalist will daily advance three shillings and daily pocket six shillings, one half of which will go to pay wages anew, and the other half of which will form surplus value, for which the capitalist pays no equivalent. It is this sort of exchange between capital and labour upon which capitalistic production, or the wages system, is founded, and which must constantly result in reproducing the working man as a working man, and the capitalist as a capitalist. The rate of surplus value, all other circumstances remaining the same, will depend on the proportion between that part of the working day necessary to reproduce the value of the labouring power and the surplus time or surplus labour performed for the capitalist. It will, therefore, depend on the ratio in which the working day is prolonged over and above that extent, by working which the working man would only reproduce the value of his labouring power, or replace his wages. Firstly. The value or price of the labouring power takes the semblance of the price or value of labour itself, although, strictly speaking, value and price of labour are senseless terms. Secondly. Although one part only of the workman's daily labour is paid, while the other part is unpaid, and while that unpaid or surplus labour constitutes exactly the fund out of which surplus value or profit is formed, it seems as if the aggregate labour was paid labour. This false appearance distinguishes wages labour from other historical forms of labour. On the basis of the wages system even the unpaid labour seems to be paid labour. With the slave, on the contrary, even that part of his labour which is paid appears to be unpaid. Of course, in order to work the slave must live, and one part of his working day goes to replace the value of his own maintenance. But since no bargain is struck between him and his master, and no acts of selling and buying are going on between the two parties, all his labour seems to be given away for nothing. Take, on the other hand, the peasant serf, such as he, I might say, until yesterday existed in the whole of East of Europe. This peasant worked, for example, three days for himself on his own field or the field allotted to him, and the three subsequent days he performed compulsory and gratuitous labour on the estate of his lord. Here, then, the paid and unpaid parts of labour were sensibly separated, separated in time and space; and our Liberals overflowed with moral indignation at the preposterous notion of making a man work for nothing. In point of fact, however, whether a man works three days of the week for himself on his own field and three days for nothing on the estate of his lord, or whether he works in the factory or the workshop six hours daily for himself and six for his employer, comes to the same, although in the latter case the paid and unpaid portions of labour are inseparably mixed up with each other, and the nature of the whole transaction is completely masked by the intervention of a contract and the pay received at the end of the week. The gratuitous labour appears to be voluntarily given in the one instance, and to be compulsory in the other. That makes all the difference. In using the word value of labour, I shall only use it as a popular slang term for value of labouring power." The value of a commodity is determined by the total quantity of labour contained in it. But part of that quantity of labour is realized in a value for which and equivalent has been paid in the form of wages; part of it is realized in a value for which NO equivalent has been paid. Part of the labour contained in the commodity is paid labour; part is unpaid labour. By selling, therefore, the commodity at its value, that is, as the crystallization of the total quantity of labour bestowed upon it, the capitalist must necessarily sell it at a profit. He sells not only what has cost him an equivalent, but he sells also what has cost him nothing, although it has cost his workman labour. The cost of the commodity to the capitalist and its real cost are different things. I repeat, therefore, that normal and average profits are made by selling commodities not above, but at their real values. By what laws this division of the total amount of surplus value amongst the three categories of people is regulated is a question quite foreign to our subject. This much, however, results from what has been stated. Rent, interest, and industrial profit are only different names for different parts of the surplus value of the commodity, or the unpaid labour enclosed in it, and they are equally derived from this source and from this source alone. They are not derived from land as such or from capital as such, but land and capital enable their owners to get their respective shares out of the surplus value extracted by the employing capitalist from the labourer. For the labourer himself it is a matter of subordinate importance whether that surplus value, the result of his surplus labour, or unpaid labour, is altogether pocketed by the employing capitalist, or whether the latter is obliged to pay portions of it, under the name of rent and interest, away to third parties. Suppose the employing capitalist to use only his own capital and to be his own landlord, then the whole surplus value would go into his pocket. It is the employing capitalist who immediately extracts from the labourer this surplus value, whatever part of it he may ultimately be able to keep for himself. Upon this relation, therefore between the employing capitalist and the wages labourer the whole wages system and the whole present system of production hinge. Some of the citizens who took part in our debate were, there, wrong in trying to mince matters, and to treat this fundamental relation between the employing capitalist and the working man as a secondary question, although they were right in stating that, under given circumstances, a rise of prices might affect in very unequal degrees the employing capitalist, the landlord, the moneyed capitalist, and, if you please, the tax-gatherer. Another consequence follows from what has been stated. That part of the value of the commodity which represents only the value of the raw materials, the machinery, in one word, the value of the means of production used up, forms no revenue at all, but replaces only capital. But, apart from this, it is false that the other part of the value of the commodity which forms revenue, or may be spent in the form of wages, profits, rent, interest, is constituted by the value of wages, the value of rent, the value of profits, and so forth. We shall, in the first instance, discard wages, and only treat industrial profits, interest, and rent. We have just seen that the surplus value contained in the commodity, or that part of its value in which unpaid labour is realized, resolves itself into different fractions, bearing three different names. But it would be quite the reverse of the truth to say that its value is composed of, or formed by, the addition of the independent values of these three constituents. If one hour of labour realizes itself in a value of sixpence, if the working day of the labourer comprises twelve hours, if half of this time is unpaid labour, that surplus labour will add to the commodity a surplus value of three shillings, that is of value for which no equivalent has been paid. This surplus value of three shillings constitutes the whole fund which the employing capitalist may divide, in whatever proportions, with the landlord and the money-lender. The value of these three shillings constitutes the limit of the value they have to divide amongst them. But it is not the employing capitalist who adds to the value of the commodity an arbitrary value for his profit, to which another value is added for the landlord, and so forth, so that the addition of these arbitrarily fixed values would constitute the total value. You see, therefore, the fallacy of the popular notion, which confounds the decomposition of a given value into three parts, with the formation of that value by the addition of three independent values, thus converting the aggregate value, from which rent, profit, and interest are derived, into an arbitrary magnitude. If the total profit realized by a capitalist is equal to 100 Pounds, we call this sum, considered as absolute magnitude, the amount of profit. But if we calculate the ratio which those 100 Pounds bear to the capital advanced, we call this relative magnitude, the rate of profit. It is evident that this rate of profit may be expressed in a double way. Suppose 100 Pounds to be the capital advanced in wages. If the surplus value created is also 100 Pounds and this would show us that half the working day of the labourer consists of unpaid labour and if we measured this profit by the value of the capital advanced in wages, we should say that the rate of profit amounted to one hundred percent, because the value advanced would be one hundred and the value realized would be two hundred. If, on the other hand, we should not only consider the capital advanced in wages, but the total capital advanced, say, for example, 500 Pounds, of which 400 Pounds represented the value of raw materials, machinery, and so forth, we should say that the rate of profit amounted only to twenty percent, because the profit of one hundred would be but the fifth part of the total capital advanced. The first mode of expressing the rate of profit is the only one which shows you the real ratio between paid and unpaid labour, the real degree of the exploitation (you must allow me this French word) of labour. The other mode of expression is that in common use, and is, indeed, appropriate for certain purposes. At all events, it is very useful for concealing the degree in which the capitalist extracts gratuitous labour from the workman. In the remarks I have still to make I shall use the word profit for the whole amount of the surplus value extracted by the capitalist without any regard to the division of that surplus value between different parties, and in using the words rate of profit, I shall always measure profits by the value of the capital advanced in wages.

Economic Manuscripts: VALUE, PRICE AND PROFIT

https://www.marxists.org/archive/marx/works/1865/value-price-profit/ch02.htm

Since the capitalist and workman have only to divide this limited value, that is, the value measured by the total labour of the working man, the more the one gets the less will the other get, and vice versa. Whenever a quantity is given, one part of it will increase inversely as the other decreases. If the wages change, profits will change in an opposite direction. If wages fall, profits will rise; and if wages rise, profits will fall. If the working man, on our former supposition, gets three shillings, equal to one half of the value he has created, or if his whole working day consists half of paid, half of unpaid labour, the rate of profit will be 100 percent, because the capitalist would also get three shillings. If the working man receives only two shillings, or works only one third of the whole day for himself, the capitalist will get four shillings, and the rate of profit will be 200 per cent. If the working man receives four shillings, the capitalist will only receive two, and the rate of profit would sink to 50 percent, but all these variations will not affect the value of the commodity. A general rise of wages would, therefore, result in a fall of the general rate of profit, but not affect values. But although the values of commodities, which must ultimately regulate their market prices, are exclusively determined by the total quantities of labour fixed in them, and not by the division of that quantity into paid and unpaid labour, it by no means follows that the values of the single commodities, or lots of commodities, produced during twelve hours, for example, will remain constant. The number or mass of commodities produced in a given time of labour, or by a given quantity of labour, depends upon the productive power of the labour employed, and not upon its extent or length. With one degree of the productive power of spinning labour, for example, a working day of twelve hours may produce twelve pounds of yarn, with a lesser degree of productive power only two pounds. If then twelve hours' average labour were realized in the value of six shillings in the one case, the twelve pounds of yarn would cost six shillings, in the other case the two pounds of yarn would also cost six shillings. One pound of yarn would, therefore, cost sixpence in the one case, and three shillings in the other. The difference of price would result from the difference in the productive powers of labour employed. One hour of labour would be realized in one pound of yarn with the greater productive power, while with the smaller productive power, six hours of labour would be realized in one pound of yarn. The price of a pound of yarn would, in the one instance, be only sixpence, although wages were relatively high and the rate of profit low; it would be three shillings in the other instance, although wages were low and the rate of profit high. This would be so because the price of the pound of yarn is regulated by the total amount of labour worked up in it, and not by the proportional division of that total amount into paid and unpaid labour. The fact I have mentioned before that high-price labour may produce cheap, and low-priced labour may produce dear commodities, loses, therefore, its paradoxical appearance. It is only the expression of the general law that the value of a commodity is regulated by the quantity of labour worked up in it, and the quantity of labour worked up in it depends altogether upon the productive powers of labour employed, and will therefore, vary with every variation in the productivity of labour. If, then, in a given country the value of the daily average necessaries of the labourer represented six hours of labour expressed in three shillings, the labourer would have to work six hours daily to produce an equivalent for this daily maintenance. If the whole working day was twelve hours, the capitalist would pay him the value of his labour by paying him three shillings. Half the working day would be unpaid labour, and the rate of profit would amount to 100 percent. But now suppose that, consequent upon a decrease of productivity, more labour should be wanted to produce, say, the same amount of agricultural produce, so that the price of the average daily necessaries should rise from three to four shillings. In that case the value of labour would rise by one third, or 33 1/3 percent. Eight hours of the working day would be required to produce an equivalent for the daily maintenance of the labourer, according to his old standard of living. The surplus labour would therefore sink from six hours to four, and the rate of profit from 100 to 50 percent. But in insisting upon a rise of wages, the labourer would only insist upon getting the increased value of his labour, like every other seller of a commodity, who, the costs of his commodities having increased, tries to get its increased value paid. If wages did not rise, or not sufficiently rise, to compensate for the increased values of necessaries, the price of labour would sink below the value of labour, and the labourer's standard of life would deteriorate. But a change might also take place in an opposite direction. By virtue of the increased productivity of labour, the same amount of the average daily necessaries might sink from three to two shillings, or only four hours out of the working day, instead of six, be wanted to reproduce an equivalent for the value of the daily necessaries. The working man would now be able to buy with two shillings as many necessaries as he did before with three shillings. Indeed, the value of labour would have sunk, but diminished value would command the same amount of commodities as before. Then profits would rise from three to four shillings, and the rate of profit from 100 to 200 percent. Although the labourer's absolute standard of life would have remained the same, his relative wages, and therewith his relative social position, as compared with that of the capitalist, would have been lowered. If the working man should resist that reduction of relative wages, he would only try to get some share in the increased productive powers of his own labour, and to maintain his former relative position in the social scale. Thus, after the abolition of the Corn Laws, and in flagrant violation of the most solemn pledges given during the anti-corn law agitation, the English factory lords generally reduced wages ten per cent. The resistance of the workmen was at first baffled, but, consequent upon circumstances I cannot now enter upon, the ten per cent lost were afterwards regained. Nothing would have changed except the money names of those values. To say that in such a case the workman ought not to insist upon a proportionate rise of wages, is to say that he must be content to be paid with names, instead of with things. All past history proves that whenever such a depreciation of money occurs, the capitalists are on the alert to seize this opportunity for defrauding the workman. A very large school of political economists assert that, consequent upon the new discoveries of gold lands, the better working of silver mines, and the cheaper supply of quicksilver, the value of precious metals has again depreciated. This would explain the general and simultaneous attempts on the Continent at a rise of wages. During the seventeenth and even the first two thirds of the eighteenth century a ten hours' working day was the normal working day all over England. During the anti-Jacobin war, which was in fact a war waged by the British barons against the British working masses, capital celebrated its bacchanalia, and prolonged the working day from ten to twelve, fourteen, eighteen hours. Malthus, by no means a man whom you would suspect of a maudlin sentimentalism declared in a pamphlet, published about 1815, that if this sort of thing was to go on the life of the nation would be attacked at its very source. A few years before the general introduction of newly-invented machinery, about 1765, a pamphlet appeared in England under the title, An Essay On Trade. The anonymous author, an avowed enemy of the working classes, declaims on the necessity of expanding the limits of the working day. Amongst other means to this end, he proposes working houses, which, he says, ought to be Houses of Terror. And what is the length of the working he prescribes for these Houses of Terror"? Twelve hours, the very same time which in 1832 was declared by capitalists, political economists, and ministers to be not only the existing but the necessary time of labour for a child under twelve years. By selling his labouring power, and he must do so under the present system, the working man makes over to the capitalist the consumption of that power, but within certain rational limits. He sells his labouring power in order to maintain it, apart from its natural wear and tear, but not to destroy it. In selling his labouring power at its daily or weekly value, it is understood that in one day or one week that labouring power shall not be submitted to two days' or two weeks' waste or wear and tear. Take a machine worth 1000 Pounds. If it is used up in ten years it will add to the value of the commodities in whose production it assists 100 Pounds yearly. If it is used up in five years it will add 200 Pounds yearly, or the value of its annual wear and tear is in inverse ratio to the quickness with which it is consumed. But this distinguishes the working man from the machine. Machinery does not wear out exactly in the same ratio in which it is used. Man, on the contrary, decays in a greater ratio than would be visible from the mere numerical addition of work. In their attempts at reducing the working day to its former rational dimensions, or, where they cannot enforce a legal fixation of a normal working day, at checking overwork by a rise of wages, a rise not only in proportion to the surplus time exacted, but in a greater proportion, working men fulfill only a duty to themselves and their race. They only set limits to the tyrannical usurpations of capital. Time is the room of human development. A man who has no free time to dispose of, whose whole lifetime, apart from the mere physical interruptions by sleep, meals, and so forth, is absorbed by his labour for the capitalist, is less than a beast of burden. He is a mere machine for producing Foreign Wealth, broken in body and brutalized in mind. Yet the whole history of modern industry shows that capital, if not checked, will recklessly and ruthlessly work to cast down the whole working class to this utmost state of degradation. In prolonging the working day the capitalist may pay higher wages and still lower the value of labor, if the rise of wages does not correspond to the greater amount of labour extracted, and the quicker decay of the labouring power thus caused. This may be done in another way. Your middle-class statisticians will tell you, for instance, that the average wages of factory families in Lancashire has risen. They forget that instead of the labour of the man, the head of the family, his wife and perhaps three or four children are now thrown under the Juggernaut wheels of capital, and that the rise of the aggregate wages does not correspond to the aggregate surplus labour extracted from the family. Even with given limits of the working day, such as they now exist in all branches of industry subjected to the factory laws, a rise of wages may become necessary, if only to keep up the old standard value of labour. By increasing the intensity of labour, a man may be made to expend as much vital force in one hour as he formerly did in two. This has, to a certain degree, been effected in the trades, placed under the Factory Acts, by the acceleration of machinery, and the greater number of working machines which a single individual has now to superintend. If the increase in the intensity of labour or the mass of labour spent in an hour keeps some fair proportion to the decrease in the extent of the working day, the working man will still be the winner. If this limit is overshot, he loses in one form what he has gained in another, and ten hours of labour may then become as ruinous as twelve hours were before. In checking this tendency of capital, by struggling for a rise of wages corresponding to the rising intensity of labour, the working man only resists the depreciation of his labour and the deterioration of his race. Considering the whole cycle, you will find that one deviation of the market price is being compensated by the other, and that, taking the average of the cycle, the market prices of commodities are regulated by their values. Well! During the phases of sinking market prices and the phases of crisis and stagnation, the working man, if not thrown out of employment altogether, is sure to have his wages lowered. Not to be defrauded, he must, even with such a fall of market prices, debate with the capitalist in what proportional degree a fall of wages has become necessary. If, during the phases of prosperity, when extra profits are made, he did not battle for a rise of wages, he would, taking the average of one industrial cycle, not even receive his average wages, or the value of his labour. It is the utmost height of folly to demand, that while his wages are necessarily affected by the adverse phases of the cycle, he should exclude himself from compensation during the prosperous phases of the cycle. Generally, the values of all commodities are only realized by the compensation of the continuously changing market prices, springing from the continuous fluctuations of demand and supply. On the basis of the present system labour is only a commodity like others. It must, therefore, pass through the same fluctuations to fetch an average price corresponding to its value. It would be absurd to treat it on the one hand as a commodity, and to want on the other hand to exempt it from the laws which regulate the prices of commodities. The slave receives a permanent and fixed amount of maintenance; the wage-labourer does not. He must try to get a rise of wages in the one instance, if only to compensate for a fall of wages in the other. If he resigned himself to accept the will, the dictates of the capitalist as a permanent economical law, he would share in all the miseries of the slave, without the security of the slave. I might answer by a generalization, and say that, as with all other commodities, so with labour, its market price will, in the long run, adapt itself to its value; that, therefore, despite all the ups and downs, and do what he may, the working man will, on an average, only receive the value of his labour, which resolves into the value of his labouring power, which is determined by the value of the necessaries required for its maintenance and reproduction, which value of necessaries finally is regulated by the quantity of labour wanted to produce them. But there are some peculiar features which distinguish the value of the labouring power, or the value of labour, from the values of all other commodities. The value of the labouring power is formed by two elements -- the one merely physical, the other historical or social. Its ultimate limit is determined by the physical element, that is to say, to maintain and reproduce itself, to perpetuate its physical existence, the working class must receive the necessaries absolutely indispensable for living and multiplying. The value of those indispensable necessaries forms, therefore, the ultimate limit of the value of labour. On the other hand, the length of the working day is also limited by ultimate, although very elastic boundaries. Its ultimate limit is given by the physical force of the labouring man. If the daily exhaustion of his vital forces exceeds a certain degree, it cannot be exerted anew, day by day. However, as I said, this limit is very elastic. A quick succession of unhealthy and short-lived generations will keep the labour market as well supplied as a series of vigorous and long-lived generations. Besides this mere physical element, the value of labour is in every country determined by a traditional standard of life. It is not mere physical life, but it is the satisfaction of certain wants springing from the social conditions in which people are placed and reared up. The English standard of life may be reduced to the Irish standard; the standard of life of a German peasant to that of a Livonian peasant. The important part which historical tradition and social habitude play in this respect, you may learn from Mr. Thornton's work on over-population, where he shows that the average wages in different agricultural districts of England still nowadays differ more or less according to the more or less favourable circumstances under which the districts have emerged from the state of serfdom. This historical or social element, entering into the value of labour, may be expanded, or contracted, or altogether extinguished, so that nothing remains but the physical limit. During the time of the anti-Jacobin war, undertaken, as the incorrigible tax-eater and sinecurist, old George Rose, used to say, to save the comforts of our holy religion from the inroads of the French infidels, the honest English farmers, so tenderly handled in a former chapter of ours, depressed the wages of the agricultural labourers even beneath that mere physical minimum, but made up by Poor Laws the remainder necessary for the physical perpetuation of the race. This was a glorious way to convert the wages labourer into a slave, and Shakespeare's proud yeoman into a pauper. By comparing the standard wages or values of labour in different countries, and by comparing them in different historical epochs of the same country, you will find that the value of labour itself is not a fixed but a variable magnitude, even supposing the values of all other commodities to remain constant. A similar comparison would prove that not only the market rates of profit change, but its average rates. But as to profits, there exists no law which determines their minimum. We cannot say what is the ultimate limit of their decrease. And why cannot we fix that limit? Because, although we can fix the minimum of wages, we cannot fix their maximum. We can only say that, the limits of the working day being given, the maximum of profit corresponds to the physical minimum of wages; and that wages being given, the maximum of profit corresponds to such a prolongation of the working day as is compatible with the physical forces of the labourer. The maximum of profit is therefore limited by the physical minimum of wages and the physical maximum of the working day. It is evident that between the two limits of the maximum rate of profit an immense scale of variations is possible. The fixation of its actual degree is only settled by the continuous struggle between capital and labour, the capitalist constantly tending to reduce wages to their physical minimum, and to extend the working day to its physical maximum, while the working man constantly presses in the opposite direction. The matter resolves itself into a question of the respective powers of the combatants. 2. As to the limitation of the working day in England, as in all other countries, it has never been settled except by legislative interference. Without the working men's continuous pressure from without that interference would never have taken place. But at all events, the result was not to be attained by private settlement between the working men and the capitalists. This very necessity of general political action affords the proof that in its merely economical action capital is the stronger side. As to the limits of the value of labour, its actual settlement always depends upon supply and demand, I mean the demand for labour on the part of capital, and the supply of labour by the working men. In colonial countries the law of supply and demand favours the working man. Hence the relatively high standard of wages in the United States. Capital may there try its utmost. It cannot prevent the labour market from being continuously emptied by the continuous conversion of wages labourers into independent, self-sustaining peasants. The position of a wages labourer is for a very large part of the American people but a probational state, which they are sure to leave within a longer or shorter term. To mend this colonial state of things the paternal British Government accepted for some time what is called the modern colonization theory, which consists in putting an artificial high price upon colonial land, in order to prevent the too quick conversion of the wages labourer into the independent peasant. But let us now come to old civilized countries, in which capital domineers over the whole process of production. Take, for example, the rise in England of agricultural wages from 1849 to 1859. What was its consequence? The farmers could not, as our friend Weston would have advised them, raise the value of wheat, nor even its market prices. They had, on the contrary, to submit to their fall. But during these eleven years they introduced machinery of all sorts, adopted more scientific methods, converted part of arable land into pasture, increased the size of farms, and with this the scale of production, and by these and other processes diminishing the demand for labour by increasing its productive power, made the agricultural population again relatively redundant. This is the general method in which a reaction, quicker or slower, of capital against a rise of wages takes place in old, settled countries. Ricardo has justly remarked that machinery is in constant competition with labour, and can often be only introduced when the price of labour has reached a certain height, but the appliance of machinery is but one of the many methods for increasing the productive powers of labour. The very same development which makes common labour relatively redundant simplifies, on the other hand, skilled labour, and thus depreciates it. The same law obtains in another form. With the development of the productive powers of labour the accumulation of capital will be accelerated, even despite a relatively high rate of wages. Hence, one might infer, as Adam Smith, in whose days modern industry was still in its infancy, did infer, that the accelerated accumulation of capital must turn the balance in favour of the working man, by securing a growing demand for his labour. From this same standpoint many contemporary writers have wondered that English capital having grown in that last twenty years so much quicker than English population, wages should not have been more enhanced. But simultaneously with the progress of accumulation there takes place a progressive change in the composition of capital. That part of the aggregate capital which consists of fixed capital, machinery, raw materials, means of production in all possible forms, progressively increases as compared with the other part of capital, which is laid out in wages or in the purchase of labour. This law has been stated in a more or less accurate manner by Mr. Barton, Ricardo, Sismondi, Professor Richard Jones, Professor Ramsey, Cherbuilliez, and others. If the proportion of these two elements of capital was originally one to one, it will, in the progress of industry, become five to one, and so forth. If of a total capital of 600, 300 is laid out in instruments, raw materials, and so forth, and 300 in wages, the total capital wants only to be doubled to create a demand for 600 working men instead of for 300. But if of a capital of 600, 500 is laid out in machinery, materials, and so forth and 100 only in wages, the same capital must increase from 600 to 3,600 in order to create a demand for 600 workmen instead of 300. In the progress of industry the demand for labour keeps, therefore, no pace with the accumulation of capital. It will still increase, but increase in a constantly diminishing ratio as compared with the increase of capital. These few hints will suffice to show that the very development of modern industry must progressively turn the scale in favour of the capitalist against the working man, and that consequently the general tendency of capitalistic production is not to raise, but to sink the average standard of wages, or to push the value of labour more or less to its minimum limit. Such being the tendency of things in this system, is this saying that the working class ought to renounce their resistance against the encroachments of capital, and abandon their attempts at making the best of the occasional chances for their temporary improvement? If they did, they would be degraded to one level mass of broken wretches past salvation. I think I have shown that their struggles for the standard of wages are incidents inseparable from the whole wages system, that in 99 cases out of 100 their efforts at raising wages are only efforts at maintaining the given value of labour, and that the necessity of debating their price with the capitalist is inherent to their condition of having to sell themselves as commodities. By cowardly giving way in their everyday conflict with capital, they would certainly disqualify themselves for the initiating of any larger movement. At the same time, and quite apart from the general servitude involved in the wages system, the working class ought not to exaggerate to themselves the ultimate working of these everyday struggles. They ought not to forget that they are fighting with effects, but not with the causes of those effects; that they are retarding the downward movement, but not changing its direction; that they are applying palliatives, not curing the malady. They ought, therefore, not to be exclusively absorbed in these unavoidable guerilla fights incessantly springing up from the never ceasing encroachments of capital or changes of the market. They ought to understand that, with all the miseries it imposes upon them, the present system simultaneously engenders the material conditions and the social forms necessary for an economical reconstruction of society. Instead of the conservative motto: A fair day's wage for a fair day's work! they ought to inscribe on their banner the revolutionary watchword: Abolition of the wages system!" After this very long and, I fear, tedious exposition, which I was obliged to enter into to do some justice to the subject matter, I shall conclude by proposing the following resolutions:

Economic Manuscripts: VALUE, PRICE AND PROFIT

https://www.marxists.org/archive/marx/works/1865/value-price-profit/ch03.htm

This programme of the foreign policy of the working men of Western and Central Europe has found a unanimous consent among the class to whom it was addressed, with one exception, as we said before. There are among the working men of France a small minority who belong to the school of the late P. J. Proudhon. This school differs in toto from the generality of the advanced and thinking working men; it declares them to be ignorant fools, and maintains, on most points, opinions quite contrary to theirs. This holds good in their foreign policy also. The Proudhonists, sitting in judgment on oppressed Poland, find the verdict of the Staleybridge jury, Serves her right. They admire Russia as the great land of the future, as the most progressive nation upon the face of the earth, at the side of which such a paltry country as the United States is not worthy of being named. They have charged the Council of the International Association with setting up the Bonapartist principle of nationalities, and with declaring that magnanimous Russian people without the pale of civilised Europe; such being a grievous sin against the principles of universal democracy and the fraternity of all nations. These are the charges. Barring the democratic phraseology at the wind-up, they coincide, it will be seen at once verbally and literally with what the extreme Tories of all countries have to say about Poland and Russia. Such charges are not worth refuting; but, as they come from a fraction of the working classes be it ever so small a one, they may render it desirable to state again the case of Poland and Russia, and to vindicate what we may henceforth call the foreign policy of the united working men of Europe. But why do we always name Russia alone in connection with Poland? Have not two German Powers, Austria and Prussia shared in the plunder? Do not they, too, hold parts of Poland in bondage, and, in connection with Russia, do they not work to keep down every national Polish movement? It is well known how hard Austria has struggled to keep out of the Polish business; how long she resisted the plans of Russia and Prussia for the partition. Poland was a natural ally of Austria against Russia. When Russia once became formidable nothing could be more in the interest of Austria than to keep Poland alive between herself and the newly-rising Empire. It was only when Austria saw that Poland s fate was settled, that with or without her, the other two Powers were determined to annihilate her, it was only then that in self-protection she went in for a share of the territory. But as early as 1815 she held out for the restoration of an independent Poland; in 1831 and in 1863 she was ready to go to war for that object, and give up her own share of Poland, provided England and France were prepared to join her. The same during the Crimean war. This is not said in justification of the general policy of the Austrian Government. Austria has shown often enough that to oppress a weaker nation is congenial work to her rulers. But in the case of Poland the instinct of self-preservation was stronger than the desire for new territory or the habits of Government. And this puts Austria out of court for the present. As to Prussia, her share of Poland is too trifling to weigh much in the scale. Her friend and ally, Russia, has managed to ease her of nine-tenths of what she got during the three partitions. But what little is left to her weighs as an incubus upon her. It has chained her to the triumphal car of Russia, it has been the means of enabling her Government, even in 1863 and 64, to practice unchallenged, in Prussian-Poland, those breaches of the law, those infractions of individual liberty, of the right of meeting, of the liberty of the press, which were so soon afterwards to be applied to the rest of the country; it has falsified the whole middle-class Liberal movement which, from fear of risking the loss of a few square miles of land on the eastern frontier, allowed the Government to set all law aside with regard to the Poles. The working men, not only of Prussia, but of all Germany, have a; greater interest than those of any other country in the restoration. Of Poland, and they have shown in every revolutionary movement that they know it. Restoration of Poland, to them, is emancipation of their own country from Russian vassalage. And this, we think, puts Prussia out of court, too. Whenever the working classes of Russia (if there is such a thing in that country, in the sense it IS understood in Western Europe) form a political programme, and that programme contains the liberation of Poland then, but not till then, Russia as a nation will be out of court too, and the. Government of the Czar will remain alone under indictment. By the treaties of 1815 the boundaries of the various States of Europe were drawn merely to suit diplomatic convenience, and especially to suit the convenience of the then strongest continental Power Russia. No account was taken either of the wishes, the interests, or the national diversities of the populations. Thus Poland was divided, Germany was divided, Italy was divided, not to speak of the many smaller nationalities inhabiting south-eastern Europe, and of which few people at that time knew anything. The consequence was that for Poland, Germany, and Italy, the very first step in every political movement was to attempt the restoration of that national unity without which national life was but a shadow. And when, after the suppression of the revolutionary attempts in Italy and Spain, 1821-23, and again, after the revolution of July, 1830, in France, the extreme politicians of the greater part of civilised Europe came into contact with each other, and attempted to work out a kind of common programmer the liberation and unification of the oppressed and subdivided nations became a watchword common to all of them. So it was again in 1848, when the number of oppressed nations was increased by a fresh one, viz., Hungary. There could, indeed, be no two opinions as to the right of every one of the great national subdivisions of Europe to dispose of itself, independently of its neighbours, in all internal matters, so long as it did not encroach upon the liberty of the others. This right was, in fact, one of the fundamental conditions of the internal liberty of all. How could, for instance, Germany aspire to liberty and unity, if at the same time she assisted Austria to keep Italy in bondage, either directly or by her vassals? Why, the total breaking-up of the Austrian monarchy is the very first condition of the unification of Germany, This right of the great national subdivisions of Europe to political independence, acknowledged as it was by the European democracy, could not but find the same acknowledgment with the working classes especially. It was, in fact, nothing more than to recognise in other large national bodies of undoubted vitality the same right of individual national existence which the working men of each separate country claimed for themselves. But this recognition, and the sympathy with these national aspirations, were restricted to the large and well-defined historical nations of Europe; there was Italy, Poland, Germany, Hungary. France, Spain, England, Scandinavia, were neither subdivided nor under foreign control, and therefore but indirectly interested in the matter; and as to Russia, she could only be mentioned as the detainer of an immense amount of stolen property, which would have to be disgorged on the day of reckoning. After the coup d tat of 1851, Louis Napoleon, the Emperor by the grace of God and the national will , had to find a democraticised and popular-sounding name for his foreign policy. What could be better than to inscribe upon his banners the principle of nationalities ? Every nationality to be the arbiter of its own fate every detached fraction of any nationality to be allowed to annex itself to its great mother-country what could be more liberal? Only, mark, there was not, now, any more question of nations, but of nationalities. There is no country in Europe where there are not different nationalities under the same government. The Highland Gaels and the Welsh are undoubtedly of different nationalities to what the English are, although nobody will give to these remnants of peoples long gone by the title of nations, any more than to the Celtic inhabitants of Brittany in France. Moreover, no state boundary coincides with the natural boundary of nationality, that of language. There are plenty of people out of France whose mother tongue is French, same as there are plenty of people of German language out of Germany; and in all probability it will ever remain so. It is a natural consequence of the confused and slow-working historical development through which Europe has passed during the last thousand years, that almost every great nation has parted with some outlying portions of its own body, which have become separated from the national life, and in most cases participated in the national life of some other people; so much so, that they do not wish to rejoin their own main stock. The Germans in Switzerland and Alsace do not desire to be reunited to Germany, any more than the French in Belgium and Switzerland wish to become attached politically to France. And after all, it is no slight advantage that the various nations, as politically constituted, have most of them some foreign elements within themselves, which form connecting links with their neighbours, and vary the otherwise too monotonous uniformity of the national character. Here, then, we perceive the difference between the principle of nationalities and the old democratic and working-class tenet as to the right of the great European nations to separate and independent existence. The principle of nationalities leaves entirely untouched the great question of the right of national existence for the historic peoples of Europe; nay, if it touches it, it is merely to disturb it. The principle of nationalities raises two sorts of questions; first of all, questions of boundary between these great historic peoples; and secondly, questions as to the right to independent national existence of those numerous small relics of peoples which, after having figured for a longer or shorter period on the stage of history, were finally absorbed as integral portions into one or the other of those more powerful nations whose greater vitality enabled them to overcome greater obstacles. The European importance, the vitality of a people is as nothing in the eyes of the principle of nationalities; before it, the Roumans of Wallachia, who never had a history, nor the energy required to have one, are of equal importance to the Italians who have a history of 2,000 years, and an unimpaired national vitality, the Welsh and Manxmen, if they desired it, would have an equal right to independent political existence, absurd though it would be with the English. The whole thing is an absurdity, got up in a popular dress in order to throw dust in shallow people s eyes, and to be used as a convenient phrase, or to be laid aside if the occasion requires it. Shallow as the thing is, it required cleverer brains than Louis Napoleon s to invent it. The principle of nationalities, so far from being a Bonapartist invention to favour a resurrection of Poland is nothing but a Russian invention concocted to destroy Poland. Russia has absorbed the greater part of ancient Poland on the plea of the principle of nationalities, as we shall see hereafter. The idea is more than a hundred years old, and Russia uses it now every day. What is Panslavism but the application, by Russia, and in Russian interest, of the principle of nationalities to the Serbians, Croats Ruthenes, Slovaks, Czechs, and other remnants of bygone Slavonian peoples in Turkey, Hungary, and Germany? Even at this present moment, the Russian Government have agents travelling among the Lapponians in Northern Norway and Sweden, trying to agitate among these nomadic savages the idea of a great Finnic nationality , which is to be restored in the extreme North of Europe, under Russian protection, of course. The cry of anguish of the oppressed Laplanders is raised very loud in the Russian papers not by those same oppressed nomads, but by the Russian agents and indeed it is a frightful oppression, to induce these poor Laplanders to learn the civilised Norwegian or Swedish language, instead of confining themselves to their own barbaric, half Esquimaux idiom! The principle of nationalities, indeed, could be invented in Eastern Europe alone, where the tide of Asiatic invasion, for a thousand years, recurred again and again, and left on the shore those heaps of intermingled ruins of nations which even now the ethnologist can scarcely disentangle, and where the Turk, the Finnic Magyar, the Rouman, the Jew, and about a dozen Slavonic tribes, live intermixed in interminable confusion. That was the ground to work the principle of nationalities, and how Russia has worked it there, we shall see by-and-by in the example of Poland. When the old Polish State was thus being formed by the union with Lithuania, where was then Russia? Under the heel of the Mongolian conqueror, whom the Poles and Germans combined, 150 years before, had driven back east of the Dnieper. It took a long struggle until the Grand Dukes of Moscow finally shook off the Mongol yoke, and set about combining the many different principalities of Great Russia into one State. But this success seems only to have increased their ambition. No sooner had Constantinople fallen to the Turk , than the Moscovite Grand Duke [Ivan III] placed in his coat-of-arms the double-headed eagle of the Byzantine Emperors, thereby setting up his claim as their successor and future avenger; and ever since, it is well known, have the Russians worked to conquer Czaregrad, the town of the Czar, as they call Constantinople in their language. Then, the rich plains of Little Russia excited their lust of annexation; but the Poles were then a strong, and always a brave people, and not only knew how to fight for their own, but also how to retaliate; in the beginning of the seventeenth century they even held Moscow for a few years. The gradual demoralisation of the ruling aristocracy, the want of power to develop a middle class, and the constant wars devastating the country, at last broke the strength of Poland. A country which persisted in maintaining unimpaired the feudal state of society, while all its neighbours progressed, formed a middle class, developed commerce and industry, and created large towns such a country was doomed to ruin. No doubt the aristocracy did ruin Poland, and ruin her thoroughly; and after ruining her, they upbraided each other for having done so, and sold themselves and their country to the foreigner. Polish history, from 1700 to 1772, is nothing but a record of Russian usurpation of dominion in Poland, rendered possible by the corruptibility of the nobles. Russian soldiers were almost constantly occupying the country, and the Kings of Poland, if not willing traitors themselves, were placed more and more under the thumb of the Russian Ambassador. So well had this game succeeded, and so long had it been played, that, when Poland at last was annihilated, there was no outcry at all in Europe, and, indeed, people were astonished at this only, that Russia should have the generosity of giving such a large slice of the territory to Austria and Prussia. The way in which this partition was brought about, is particularly interesting. There was, at that time, already an enlightened public opinion in Europe. Although the Times newspaper had not yet begun to manufacture that article, there was that kind of public opinion which had been created by the immense influence of Diderot, Voltaire, Rousseau, and the other French writers of the eighteenth century. Russia always knew that it is important to have public opinion on one s side, if possible; and Russia took care to have it, too. The Court of Catherine II was made the head-quarters of the enlightened men of the day, especially Frenchmen; the most enlightened principle was professed by the Empress and her Court, and so well did she succeed in deceiving them that Voltaire and many others sang the praise of the Semiramis of the North , and proclaimed Russia the most progressive country in the world, the home of liberal principles, the champion of religious toleration. Religious toleration that was the word wanted to put down Poland. Poland had always been extremely liberal in religious matters; witness the asylum the Jews found there while they were persecuted in all other parts of Europe. The greater portion of the people in the Eastern provinces belonged to the Greek faith, while the Poles proper were Roman Catholics. A considerable portion of these Greek Catholics had been induced, during the sixteenth century, to acknowledge the supremacy of the Pope, and were called United Greeks; but a great many continued true to their old Greek religion in all respects. They were principally the serfs, their noble masters being almost all Roman Catholics, they were Little Russians by nationality. Now, this Russian Government, which did not tolerate at home any other religion but the Greek, and punished apostasy as a crime; which was conquering foreign nations and annexing foreign provinces right and left; and which was at that time engaged in riveting still firmer the fetters of the Russian serf this same Russian Government came soon upon Poland in the name of religious toleration, because Poland was said to oppress the Greek Catholics; in the name of the principle of nationalities, because the inhabitants of these Eastern provinces were Little Russians, and ought, therefore, to be annexed to Great Russia; and in the name of the right of revolution arming the serfs against their masters. Russia is not at all scrupulous in the selection of her means. Talk about a war of class against class as something extremely revolutionary; why, Russia set such a war on foot in Poland nearly 100 years ago, and a fine specimen of a class-war it was, when Russian soldiers and Little Russian serfs went in company to burn down the castles of the Polish lords, merely to prepare Russian annexation, which being once accomplished, the same Russian soldiers put the serfs back again under the yoke of their lords. All this was done in the cause of religious toleration, because the principle of nationalities was not then fashionable in Western Europe. But it was held up before the eyes of the Little Russian peasants at the time, and has played an important part since in Polish affairs. The first and foremost ambition of Russia is the union of all Russian tribes under the Czar, who calls himself the Autocrat of all the Russias (Samodergetz vseckh Rossyiskikh), and among these she includes White and Little Russia. And in order- to prove that her ambition went no further, she took very good care, during the three partitions, to annex none but White and Little Russian provinces; leaving the country inhabited by Poles, and even a portion of Little Russia (Eastern Galicia) to her accomplices. But how do matters stand now? The greater portion of the provinces annexed in 1793 and 1794 by Austria and Prussia are now under Russian dominion, under the name of the Kingdom of Poland, and from time to time hopes are raised among the Poles, that if they will only submit to Russian supremacy, and renounce all claims to the ancient Lithuanian provinces, they may expect a reunion of all other Polish provinces and a restoration of Poland, with the Russian Emperor for a King. And if at the present juncture Prussia and Austria came to blows, it is more than probable that the war will not be, ultimately, for the annexation of Schleswig-Holstein to Prussia, or of Venice to Italy, but rather of Austrian, and at least a portion of Prussian, Poland to Russia. So much for the principle of nationalities in Polish affairs.

The International Workingmen's Association, What have the working classes to do with Poland?

https://www.marxists.org/archive/marx/works/1866/03/24.htm

The following notes are intended to comment impartially, and from a strictly military point of view, upon the current events of the war, and, as far as possible, to point out their probable influence upon impending operations. The locality where the first decisive blows must be struck is the frontier of Saxony and Bohemia. The war in Italy can scarcely lead to any decisive results so long as the Quadrilateral remains untaken, and to take that will be rather a lengthy operation. There may be a good deal of warlike action in Western Germany, but from the strength of the forces engaged, it will be altogether subordinate in its results to the events on the Bohemian frontier. To this neighbourhood, therefore, we shall, for the present, exclusively direct our attention. In order to judge of the strength of the contending armies it will suffice, for all practical purposes, if we take into account the infantry only, keeping in mind, however, that the strength of the Austrian cavalry will be to the Prussian as three to two. The artillery will be, in both armies, in about the same proportion as the infantry, say three guns per 1,000 men. The Prussian infantry consists of 253 battalions of the line, 83 1/2 depot battalions, and 116 battalions of the Landwehr (first levy, containing the men from 27 to 32 years of age). Of these, the depot battalions and Landwehr form the garrisons of the fortresses, and are intended, besides, to act against the smaller German states, while the line is massed in and around Saxony to oppose the Austrian army of the north. Deducting about 15 battalions occupying Schleswig-Holstein, and another 15 battalions--the late garrisons of Rastatt, Mainz, and Frankfurt, now concentrated at Wetzlar--there remain about 220 battalions for the main army. With cavalry and artillery, and such Landwehr as may be drawn from the neighbouring fortresses, this army will contain about 300,000 men, in nine army corps. The Austrian army of the north counts seven army corps, each of which is considerably stronger than a Prussian one. We know very little at present of their composition and organisation, but there is every reason to believe that they form an army of from 320,000 to 350,000 men. Numerical superiority, therefore, seems assured to the Austrians. The Prussian army will be under the command-in-chief of the King--that is to say, of a parade soldier of at best very mediocre capacities, and of weak, but often obstinate, character. He will be surrounded, firstly, by the general staff of the army, under General Moltke, an excellent officer; secondly, by his "private military cabinet", composed of personal favourites; and, thirdly, by such other unattached general officers as he may call to his suite. It is impossible to invent a more efficient system for ensuring defeat at the very headquarters of an army. Here is, at the very beginning, the natural jealousy between the staff of the army and the Cabinet of the King, each of which sections will struggle for supreme influence and will concoct and advocate its own pet plan of operations. This alone would render almost impossible all singleness of purpose, all consistent action. But then come the interminable councils of war, which are unavoidable under such circumstances, and which, in nine cases out of ten, end in the adoption of some half measure--the very worst course in war. The orders of to-day, in such cases, generally contradict those of yesterday, and when matters become complicated or threaten to go wrong, no orders at all are given out, and things take their own course. "Ordre, contre-ordre, desordre," as Napoleon used to say. Nobody is responsible, because the irresponsible King takes all responsibility upon himself, and, therefore, nobody does anything until distinctly ordered to do so. The campaign of 1806 was commanded in a similar way by the father of the present King; the defeat of Jena and Auerstadt, and the destruction of the whole Prussian army within three weeks, was the consequence. There is no reason to suppose that the present King is superior in mettle to his father; and if he has found in Count Bismarck a man whose Political direction he can implicitly follow, there is no man of sufficient standing in the army to take exclusive charge, in a similar way, of military matters. The Austrian army is under the unconditional command of General Benedek, who is an experienced officer and who, at least, knows his mind. The superiority of supreme command is decidedly on the side of the Austrians. The Prussian troops are subdivided into two "armies"; the first, under Prince Frederick Charles, composed of the 1st, 2d, 3d, 4th, 7th, and 8th corps; the second, under the Crown Prince, of the 5th and 6th corps. The Guards, forming the general reserve, will probably join the first army. Now this subdivision not only breaks the unity of command, but it also induces, very often, the two armies to move on two different lines of operation, to make combined movements, to lay their mutual point of junction within the reach of the enemy; in other words, it tends to keep them separated whereas they ought, as much as possible, to keep together. The Prussians in 1806, and the Austrians in 1859, under very similar circumstances, followed the same course, and were beaten. As to the two commanders, the Crown Prince is an unknown magnitude as a soldier; and Prince Frederick Charles certainly did not show himself to be a great commander in the Danish war. The Austrian army has no such subdivision; the commanders of the army corps are placed directly under General Benedek. They, are, therefore, again superior to their opponents as far as the organisation of the army goes. The Prussian soldiers, especially the men of the reserve and such Landwehr men as had to be taken to fill up vacancies in the line (and there are many) go to war against their will; the Austrians, on the contrary, have long wished for a war with Prussia, and await with impatience the order to move. They have, therefore, also the advantage in the morale of the troops. Prussia has had no great war for fifty years; her army is, on the whole, a peace army, with the pedantry and martinetism inherent to all peace armies. No doubt a great deal has been done latterly, especially since 1859, to get rid of this; but the habits of forty years are not so easily eradicated, and a great number of incapable and pedantic men must still be found, particularly in the most important places--those of the field officers. Now the Austrians have been fundamentally cured of this complaint by the war of 1859, and have turned their dearly-bought experience to the very best use. No doubt, in organisation of detail, in adaptation for, and experience in, warfare, the Austrians again are superior to the Prussians. With the exception of the Russians the Prussians are the only troops whose normal formation for fighting is the deep close column. Imagine the eight companies of an English battalion in a quarter-distance column, but two companies instead of one farming the front, so that four rows of two companies each form the column, and you have the "Prussian column of attack". A better target for rifled fire-arms than this could not be imagined, and, since rifled cannon can throw a shell into it at 2,000 yards range, such a formation must render it almost impossible to reach the enemy at all. Let one single shell explode in the midst of this mass, and see whether that battalion is fit for anything afterwards on that day. The Austrians have adopted the loose open column of the French, which is scarcely to be called a column; it is more like two or three lines following each other at 20 or 30 yards distance, and is scarcely, if anything more exposed to losses by artillery than a deployed line. The advantage of tactical formation is, again, on the side of the Austrians. Against all these advantages the Prussians have but two points to set off. Their commissariat is decidedly better, and the troops will therefore be better fed. The Austrian commissariat, like all Austrian Administration, is one den of bribery and peculation scarcely better than in Russia. Even now we hear of the troops being badly and irregularly fed; in the field and in the fortresses it will be worse still, and the Austrian Administration may happen to be a more dangerous enemy to the fortresses in the Quadrilateral than the Italian artillery. The second set-off the Prussians have is their superior armament. Although their rifled artillery is decidedly better than that of the Austrians, this will make very little difference in the open field. The range, trajectory, and accuracy of the Prussian and Austrian rifles will be about on a par; but the Prussians have breech-loaders, and can deliver a steady well-aimed fire in the ranks at least four times in a minute. The immense superiority of this arm has been proved in the Danish war, and there is no doubt the Austrians will experience it in a far higher degree. If they, as it is said Benedek has instructed them to do, will not lose much time with firing, but go at the enemy at once with the bayonet, they will have enormous losses. In the Danish war, the loss of the Prussians was never more than one fourth, sometimes only one tenth, of that of the Danes; and, as a military correspondent of The Times a short time ago very correctly pointed out, the Danes were almost everywhere beaten by a minority of troops actually engaged. Still, in spite of the needle gun, the odds are against the Prussians; and if they refuse to be beaten in the first great battle by the superior leadership, organisation, tactical formation, and morale of the Austrians, and last, not least, by their own commanders, then they must certainly be of a different mettle from that of which a peace army of 50 years' standing may be expected to be.

Notes on the War in Germany

https://www.marxists.org/archive/marx/works/1866/06/20.htm

People begin to grow impatient at the apparent inactivity of the two great armies on the Bohemian frontier. But there are plenty of reasons for this delay. Both the Austrians and the Prussians are perfectly aware of the importance of the impending collision, which may decide the result of the whole campaign. Both are hurrying up to the front whatever men they can lay their hands on; the Austrians from their new formations (the fourth and fifth battalions of the infantry regiments), the Prussians from the Landwehr, which at first was intended for garrison duty only. At the same time, there appears to be on either side an attempt to out-manoeuvre the, opposing army, and to enter upon the campaign under the most favourable strategical conditions. To understand this, we shall have to look at the map and examine the country in which these armies are placed. Taking it for granted that Berlin and Vienna are the normal points of retreat of the two armies, and that therefore the Austrians will aim at the conquest of Berlin and the Prussians at that of Vienna, there are three routes by which they might operate. A large army requires a certain extent of country from the resources of which it has to live on the march, and is compelled, in order to move quick, to march in several columns on as many parallel roads; its front will, therefore, be extended on a line which may vary between, say, sixty and sixteen miles, according to the proximity of the enemy and the distance of the roads from each other. This will have to be kept in mind. The first route would be on the left bank of the Elbe and Moldau, by Leipzig and Prague. It is evident that on this route each of the belligerents would have to cross the river twice, the second time in the face of the enemy. Supposing either army to attempt to turn, by this route, the flank of its opponent, the latter, having the shorter, because straighter road, could still anticipate the turning force on the line of the river, and if successful in repelling it, could march straight upon the enemy's capital. This route, equally disadvantageous to both parties, may therefore be dismissed from consideration. The second route is on the right bank of the Elbe, between it and the Sudetic mountain chain which divides Silesia from Bohemia and Moravia. This is almost on the straight line from Berlin to Vienna; the portion now lying between the two armies is marked out by the railway from Lobau to Pardubitz. This railway passes through that portion of Bohemia which is bounded by the Elbe to the south and west, and the mountains to the north-east. It has plenty of good roads, and if the two armies were to march straight at each other, here would be the point of collision. The third route is that by Breslau, and thence across the Sudetic Chain. This chain, of no considerable elevation, on the Moravian frontier, where it is crossed by several good roads, rises to greater elevation and abruptness in the Riesengebirge, which forms the boundary of Bohemia. Here there are but few roads across; in fact, between Trautenau and Reichenberg, a distance of forty miles, the whole north-eastern portion of the range is not traversed by a single military road. The only road in existence there, that from Hirschberg to the valley of the Ires, stops short at the Austrian frontier. It follows, then, that this whole barrier of forty miles in length, is impassable, at least for a large army, with its innumerable impediments, and that an advance upon or by Breslau must pass the mountains to the south-west of the Riesengebirge. Now, what are the relative positions of the two armies, with regard to their communications, if engaged on this route? The Prussians, by advancing due south from Breslau, lay open their communications with Berlin. The Austrians might, if strong enough to command the almost absolute certainty of victory, leave them to advance as far as the intrenched camp of Olmutz, which would stop them, while they themselves could march upon Berlin, trusting to re-open any temporarily-interrupted communications by a decisive victory; or they might meet the Prussian columns singly as they debouch from the mountains, and, if successful, drive them back upon Glogau and Posen, whereby Berlin and the greater portion of the Prussian states would be at their mercy. Thus an advance by Breslau would be advisable for the Prussians in case of a great numerical superiority only. The Austrians are in a far different position. They have the advantage that the bulk of the monarchy lies south-east of Breslau; that is, in the direct prolongation of a line drawn from Berlin to Breslau. Having fortified the northern bank of the Danube near Vienna, so as to shelter the capital from a surprise, they may, temporarily and even for a length of time, sacrifice their direct communication with Vienna, and draw their supplies of men and stores from Hungary. They can, therefore, with equal safety operate by way of Lobau and by way of Breslau, to the north or to the south of the hills; they have far greater freedom in manoeuvring than their opponents. The Prussians, moreover, have further reasons to be cautious. From the northern frontier of Bohemia, the distance to Berlin is not much more than half of that to Vienna; Berlin is so much more exposed. Vienna is sheltered by the Danube, behind which a beaten army can find protection; by the fortifications erected to the north of that river; and by the intrenched camp of Olmutz, which the Prussians could not pass unnoticed with impunity, if the mass of the Austrian army, after a defeat, were to take up a position there. Berlin has no protection of any kind, except the army in the field. Under these circumstances, and those detailed in our first number, the part destined for the Prussians appears to be clearly marked out as a defensive one. The same series of circumstances, and strong political necessity besides, almost compels Austria to act on the offensive. A single victory may ensure to her great results, while her defeat would not break her power of resistance. The strategical plan of the campaign in its fundamental features is necessarily very simple. Whichever of the two attacks first, he has only this alternative: either a false attack north-west of the Riesengebirge, and the true attack south-east of it, or vice versa. The forty-mile barrier is the decisive feature of the seat of war, and round it the armies must gravitate. We shall hear of fighting at both its extremities, and a very few days afterwards will clear up the direction of the true attack, and probably the fate of the first campaign. Yet, with two such unwieldy armies opposed to each other, we feel inclined to think that the most direct route is the safest, and that the difficulty and danger of moving such large bodies of troops in separate columns on different roads through a difficult mountain country, will almost naturally draw both opposing armies on the route Lobau-Pardubitz. The actual movements which have taken place are as follows:--The Prussians, in the first week of June, massed their army of Saxony along the Saxon frontier, from Zeitz to Gorlitz, and their Silesian army from Hirschberg to Neisse. By the 10th June they drew nearer together, having their right wing on the Elbe near Torgau, and their extreme left near Waldenburg. From the 12th to the 16th, the army of Silesia, now consisting of the 1st, 5th, and 6th corps and the Guards, were again extended to the east, this time as far as Ratibor, that is to say, into the extreme south-eastern corner of Silesia. This looks like a feint, especially the parading of the Guards, which are supposed to be always with the main army. If it be more than a feint, or if measures have not been taken to move these four corps back towards Gorlitz at the shortest notice and in the shortest time, then this massing of more than 120,000 men in a remote corner is a palpable mistake; they may be cut off from all possibility of retreat and certainly from all connection with the remainder of the army. Of the Austrians we know little more than that they were concentrated around Olmutz. The Times correspondent in their camp states that their sixth corps, 40,000 strong, arrived on the 19th from Weisskirchen at Olmutz indicating a movement to the westward. He adds that on the 21st headquarters were to be shifted to Trubau, on the frontier between Moravia and Bohemia. This move would point in the same direction, if it did not look exceedingly like a canard sent on to London with the intention of being thence telegraphed to the Prussian headquarters in order to mislead them. A general who acts with such secrecy as Benedek, and who has such objections to newspaper correspondents, is not likely to inform them on the 19th where his headquarters will be on the 21st, unless he has his reasons for it. Before concluding, we may be allowed to cast a glance at the operations in North-western Germany. The Prussians had more troops here than was at first known. They had 15 battalions disposable in Holstein, 12 in Minden, and 18 in Wetzlar. By rapid Concentric moves, during which the troops showed a quite unexpected capability of supporting forced marches, they took Possession in two days of all the country north of a line from Coblenz to Eisenach, and of every line of communication between the eastern and western provinces of the kingdom. The Hessian troops, about 7,000 strong, managed to escape, but the Hanoverians, 10,000 or 12,000, had their direct line of retreat towards Frankfurt cut off, and already on the 17th the rest of the 7th Prussian army corps, 12 battalions, together with the two Coburg battalions, arrived in Eisenach from the Elbe. Thus the Hanoverians appear to be hemmed in on all sides, and could escape only by a miracle of stupidity on the part of the Prussians. As soon as their fate will be settled, a force of 50 Prussian battalions will be available against the Federal army which Prince Alexander of Darmstadt is forming at Frankfurt, and which will consist of about 23,000 Wurttembergers, 10,000 Darmstadters, 6,000 Nassauers, 13,000 Badeners (only mobilising now), 7,000 Hessians, and 12,000 Austrians, now on the road from Salzburg; in all about 65,000 men, who may be possibly reinforced by from 10,000 to 20,000 Bavarians. About 60,000 men of these are now reported as already concentrated at Frankfurt, and Prince Alexander has ventured upon a forward move by re-occupying Giessen on the 22d. This, however, is of no consequence. The Prussians will not advance against him until they are well concentrated, and then, with 70,000 men of all arms, and their superior armament, they ought to make short work of this motley army.

Notes on the War in Germany

https://www.marxists.org/archive/marx/works/1866/06/25.htm

The first great battle has been fought, not in Bohemia, but in Italy, and the Quadrilateral has again given the Italians a lesson in strategy. The strength of this famous position, as indeed of all fortified positions of any value, consists, not so much in the high defensive capabilities of its four fortresses, but in their being so grouped in a country with strongly-marked military features that the attacking force is almost always induced, and often compelled, to divide itself and attack on two different points, while the defending force can send its whole combined strength against one of these attacks, crush it by superior numbers, and then turn against the other. The Italian army has been induced to commit this fault. The King stood with eleven divisions on the Mincio, while Cialdini with five divisions faced the Lower Po, near Ponte Lagoscuro and Polesella. An Italian division counts 17 battalions of 700 men each; consequently, Victor Emmanuel would have, with cavalry and artillery, at least 120,000 or 125,000 men, and Cialdini about half that number. While the King crossed the Mincio on the 23d, Cialdini was to cross the Lower Po and act upon the rear of the Austrians; but up to the moment we write, no certain news has arrived of this latter movement having been effected. At all events, the 60,000 men whose presence might, and probably would, have turned the scale on Sunday last at Custozza, cannot, so far, have obtained any advantage at all commensurate to the loss of a great battle. The Lake of Garda lies encased between two spurs of the Alps, forming, to the south of it, two clusters of hills, between which the Mincio forces its way towards the lagoons of Mantua. Both of these groups form strong military positions; their slopes towards the south overlook the Lombard plain, and command it within gun-range. They are well known in military history. The western group, between Peschiera and Lonato, was the scene of the battles of Castiglione and Lonato in 1796, and of Solferino in 1859; the eastern group, between Peschiera and Verona, was contested during three days in 1848, and again in the battle of last Sunday. This eastern group of hills slopes down on one side towards the Mincio, where it ends in the plain at Valeggio; on the other side, in a long are, facing south-east, towards the Adige, which it reaches at Bussolengo. It is divided, from north to south, in two about equal portions by a deep ravine, through which flows the rivulet Tione; so that a force advancing from the Mincio will have first to force the passage of the river, and immediately afterwards find itself again arrested by this ravine. On the edge of the slope, facing the plain, and east of the ravine, are the following villages: Custonza, on the southern extremity; further north, in succession, Somma Campagna, Sona, and Santa Giustina. The railway from Peschiera to Verona crosses the hills at Somma Campagna, the high road at Sona. In 1848, after the Piedmontese had taken Peschiera, they blockaded Mantua and extended their army from beyond that place to Rivoli, on the Lake of Garda, their centre occupying the hills in question. On the 23d July Radetzky advanced with seven brigades from Verona, broke through the centre of this overextended line, and occupied the hills himself. On the 24th and 25th the Piedmontese tried to re-take the position, but were decisively beaten on the 25th, and retreated at once through Milan beyond the Ticino. This first battle of Custozza decided the campaign of 1848. The telegrams from the Italian headquarters about last Sunday's battle are rather contradictory; but, with the assistance of those from the other side, we get a pretty clear insight into the circumstances under which it was fought. Victor Emmanuel intended his 1st corps (General Durando, four divisions or 68 battalions), to take up a position between Peschiera and Verona, so as to be able to cover a siege of the former place. This position must, of course, be Sona and Somma Campagna. The 2d corps (General Cucchiari, three divisions or 51 battalions) and 3d corps (General Della Rocca, of the same strength as the second) were to cross the Mincio at the same time, to cover the operations of the 1st. The 1st corps must have crossed near or south of Saliongo, and taken the road of the hills at once; the 2d seems to have crossed at Valeggio, and the 3d at Goito, and advanced in the plain. This took place on Saturday the 23d. The Austrian brigade Pulz, which held the outposts on the Mincio, fell slowly back on Verona; and on Sunday, the anniversary of Solferino, the whole of the Austrian army debouched from Verona to meet the enemy. They appear to have arrived in time to occupy the heights of Sona and Somma Campagna, and the eastern edge of the ravine of the Tione before the Italians. The struggle then would principally be fought for the passage of the ravine. At the southern extremity the two corps in the plain could co-operate with the 1st Italian corps in the hills, and thus Custozza fell into their hands. Gradually the Italians in the plain would advance more and more in the direction of Verona, in order to act upon the Austrian flank and rear, and the Austrians would send troops to meet them. Thus the front lines of the two armies, which were originally facing east and west respectively, would wheel round a quarter circle, the Austrians facing south and the Italians north. But, as the hills retreat from Custozza to the north-east, this flank movement of the Italian 2d and 3d corps could not immediately affect the position of their 1st corps in the hills, because it could not be extended far enough without danger to the flanking troops themselves. Thus the Austrians appear merely to have occupied the 2d and 3d corps by troops sufficient to break their first impetus, while they launched every available man upon the 1st corps, and crushed it by superior numbers. They were perfectly successful; the first corps was repulsed, after a gallant struggle, and at last Custozza was stormed by the Austrians. By this, the Italian right wing advanced east and north-east beyond Custozza, appears to have been seriously endangered; consequently a new struggle for the village took place, during which the lost connection must have been restored, and the Austrian advance from Custozza checked, but the place remained in their hands, and the Italians had to re-cross the Mincio the same night. We give this sketch of the battle, not as a historical account--for which every detail is as yet wanting--but merely as an attempt, map in hand, to reconcile the various telegrams relating to it amongst each other, and with military common sense; and if the telegrams were anything like correct and complete, we feel confident that the general outline of the battle would appear to be not very different from what we have stated. The Austrians lost about 600 prisoners, the Italians 2,000, and a few guns. This shows the battle to have been a defeat, but no disaster. The forces must have been pretty equally matched, although it is very probable that the Austrians had less troops under fire than their opponents. The Italians have every reason to congratulate themselves that they were not driven back into the Mincio; the position of the 1st corps between that river and the ravine, on a strip of land between two and four miles wide, and a superior enemy in front, must have been one of considerable danger. It was undoubtedly a mistake to send the main body of the troops into the plain; while the commanding heights, the decisive points, were neglected; but the greatest mistake was, as we pointed out before, to divide the army, to leave Cialdini with 60,000 men on the Lower Po, and to attack with the remainder alone. Cialdini could have contributed to a victory before Verona, and then, marching back to the Lower Po, have effected his passage much more easily, if this combined manoeuvre was to be insisted upon at all hazards. As it is, he seems no further advanced than on the first day, and may now have to meet stronger forces than hitherto. The Italians ought, by this time, to know that they have a very tough opponent to deal with. At Solferino, Benedek, with 26,000 Austrians, held the whole Piedmontese army of fully double that number at bay for the whole day, until he was ordered to retreat in consequence of the defeat of the other corps by the French. That Piedmontese army was much superior to the present Italian army; it was better schooled, more homogeneous, and better officered. The present army is but of very recent formation and must suffer from all the disadvantages inherent to such; while the Gustrian army of to-day is much superior to that of 1859. National enthusiasm is a capital thing to work upon, but until disciplined and organised, nobody can win battles with it. Even Garibaldi's "thousand" were not a crowd of mere enthusiasts, they were drilled men who had learnt to obey orders and to face powder and shot in 1859. It is to be hoped that the staff of the Italian army, for their own good, will refrain from taking liberties with an army which, if numerically inferior, is intrinsically superior to theirs, and, moreover, holds one of the strongest positions in Europe.

Notes on the War in Germany

https://www.marxists.org/archive/marx/works/1866/06/28.htm

Suppose a young Prussian ensign or comet, under examination for a lieutenancy, to be asked what would be the safest plan for a Prussian army to invade Bohemia? Suppose our young officer were to answer,--"Your best way will be to divide your troops into two about equal bodies, to send one round by the east of the Riesengebirge, the other to the west, and effect their junction in Gitschin." What would the examining officer say to this? He would inform the young gentleman that this plan sinned against the two very first laws of strategy:--Firstly, never to divide your troops so that they cannot support each other, but to keep them well together; and, secondly, in case of an advance on different roads, to effect the junction of the different columns at a point which is not within reach of the enemy; that, therefore, the plan proposed was the very worst of all; that it could only be taken into consideration at all in case Bohemia was quite unoccupied by hostile troops; and that, consequently, an officer proposing such a plan of campaign was not fit to hold even a lieutenant's commission. Yet, this is the very plan which the wise and learned staff of the Prussian army have adopted. It is almost incredible; but it is so. The mistake for which the Italians had to suffer at Custozza, has been again committed by the Prussians, and under circumstances which made it ten-fold worse. The Italians knew at least that, with ten divisions, they would be numerically superior to the enemy. The Prussians must have known that if they kept their nine corps together they would be at best barely on a par, as far as numbers went, with Benedek's eight corps; and that by dividing their troops they exposed the two armies to the almost certain fate of being crushed in succession by superior numbers. It would be completely inexplicable how such a plan could ever be discussed, much less adopted, by a body of such unquestionably capable officers as form the Prussian staff--if it was not for the fact of King William being in chief command. But nobody could possibly expect that the fatal consequences of kings and princes taking high command would come out so soon and so strong. The Prussians are now Sighting, in Bohemia, a life-and-death struggle. If the junction of the two armies at or about Gitschin is prevented, if each of the two, being beaten, has to retire out of Bohemia, and, by retiring, to get further away again from the other then the campaign may be said to be virtually over. Then Benedek may leave the army of the Crown Prince unnoticed while it retires towards Breslau, and follow up, with all his forces, the army of Prince Frederick Charles, which can hardly escape utter destruction. The question is, Will this junction have been prevented? Up to the moment we write we have no news of events later than Friday evening, the 29th. The Prussians, beaten out of Gitschin (the name of the place, in Bohemian, is spelt Jicin) on the 28th by General Edelsheim, claim to have stormed the town again on the 29th, and this is the last information we possess. The junction was not then effected; at least four Austrian and parts of the Saxon army corps had then been engaged against about five or six Prussian corps. The various columns of the army of the Crown Prince, as they descended into the valley on the Bohemian side of the hills, were met by the Austrians at favourable points where the valley, widening out, allowed them to offer a larger front to the Prussian columns, and to attempt to prevent them from deploying; while the Prussians would send troops, wherever practicable, through the lateral valleys, to take their opponents in flank and rear. This is always the case in mountain warfare, and accounts for the great number of prisoners that are always made under such circumstances. On the other side, the armies of Prince Frederick Charles and Herwarth von Bittenfeld appear to have got through the passes almost unopposed; the first engagements took place on the line of the Ires river, that is almost midway between the Starting points of the two armies. It would be idle to try to disentangle and bring into harmony the fearfully contradictory, and often totally unauthenticated, telegrams which have come to hand these last three or four days. The fighting has been necessarily very much chequered in its results: as new forces came up, victory favoured first one and then the other side. Up to Friday, however, the general result appears to have been, so far, in favour of the Prussians. If they maintained themselves in Gitschin, no doubt the junction was effected on Saturday or Sunday, and then their greatest danger would be passed. The final fight for the junction would probably be fought with concentrated masses on both sides, and decide the campaign for some time, at least. If the Prussians were victorious, they would be at once out of all their self-begotten difficulties, but they might have obtained the same, and even greater, advantages without exposing themselves to such unnecessary dangers. The fighting appears to have been very severe. The very first Austrian brigade which met the Prussians in battle, was the "black and yellow" brigade, which, in Schleswig, stormed the Konigsberg, near Oberselk, the day before the evacuation of the Dannevirke. It is called black and yellow after the facings of the two regiments composing it, and was always considered one of the best brigades in the service. They were, however, beaten by the needle-gun, and above 500 men of one of its regiments (Martini) were taken prisoners after they had charged the Prussian lines five times in vain. In a later engagement, the colours of the 3d battalion, of the Deutschmeister regiment were taken. This regiment, recruited in Vienna exclusively, is considered the best in the whole army. Thus the very best troops have been already in action. The Prussians must have behaved splendidly for an old peace army. When war was actually declared, a totally different spirit came over the army, brought on, chiefly, by the clearing-out of the small fry of potentates in the north-west. It gave the troops--rightly or wrongly, we merely register the fact--the idea that they were asked to fight, this time, for the unification of Germany, and the hitherto sullen and sulky men of the reserve and Landwehr then crossed the frontier of Austria with loud cheers. It is owing to this chiefly that they fought so well; but at the same time we must ascribe the greater portion of whatever success they have had to their breech-loaders; and if they ever get out of the difficulties into which their generals so wantonly placed them, they will have to thank the needle-gun for it. The reports as to its immense superiority over the muzzle-loaders are again unanimous. A sergeant from the Martini regiment, taken prisoner, said to the correspondent of the Cologne Gazette: If the Austrians are beaten, it will be not so much General Benedek or General Ramming as General Ramrod who is to blame for the result. In the north-west, the Hanoverians, brought to a sense of their position by a sharp attack from General Manteuffel's advanced guard under General Flies, have surrendered, and thereby 59 Prussian battalions will be at liberty to act against the Federal troops. It was high time, too, that this should be done before Bavaria had completed all her armaments, for otherwise much stronger forces would be required to subdue South-western Germany. Bavaria is notoriously always slow and behindhand with her military arrangements, but when they are complete, she can bring into the field from 60,000 to 80,000 good troops. We may now soon hear of a rapid concentration of Prussians on the Main and of active operations against Prince Alexander of Hesse Darmstadt and his army.

Notes on the War in Germany

https://www.marxists.org/archive/marx/works/1866/07/03.htm

The campaign which the Prussians opened with a signal strategic blunder has been since carried on by them with such a terrible tactical energy that it was brought to a victorious close in exactly eight days. We said in our last note that the only case in which the Prussian plan of invading Bohemia by two armies separated by the Riesengebirge could be justified was that in which Bohemia was unoccupied by hostile troops. The mysterious plan of General Benedek appears to have mainly consisted in creating a situation of that sort. There appear to have been but two Austrian army corps-the 1st (Clam-Gallas) and the 6th (Ramming)--in the north-western corner of Bohemia, where, from the beginning, we expected the decisive actions would be fought. If this was intended to draw the Prussians into a trap, Benedek has succeeded so well that he got caught in it himself. At all events, the Prussian advance on two lines, with from forty to fifty miles of impassable ground between them, towards a point of junction two full marches from the starting points, and within the enemy's lines,--this advance remains a highly dangerous manoeuvre under all circumstances, and one which would have been followed by signal defeat but for Benedek's strange slowness, for the unexpected dash of the Prussian troops, and for their breech-loading rifles. The advance of Prince Frederick Charles took place with three corps (the 3d, 4th, and 2d, the latter in reserve) by Reichenberg, north of a difficult range of hills, on the southern side of which General Herwarth advanced with a corps and a half (the 8th and one division of the 7th). At the same time, the Crown Prince stood, with the 1st, 5th, and 6th corps, and the Guards, in the mountains about Glatz. Thus the army was divided into three columns--one on the right, of 45,000, one in the centre, of 90,000, and one on the left, of 120,000 men--none of which could support either of the others for at least several days. Here, if ever, there was a chance for a general commanding at least an equal number of men to crush his opponents in detail. But nothing appears to have been done. On the 26th Prince Frederick Charles had the first serious engagement, at Turnau, with a brigade of the Ist corps, by which he established his communication with Herwarth; on the 27th, the latter took Munchehgratz, while, of the army of the Crown Prince, a first column, the 5th corps, advanced beyond Nachod, and beat the 6th Austrian corps (Ramming) severely; on the 28th, the only slightly unlucky day for the Prussians, Prince Frederick Charles's advance guard took Gitschin, but was again dislodged by General Edelsheim's cavalry, while the 1st corps of the army of the Crown Prince was checked with some loss at Trautenau by the 10th Austrian corps of Gablenz, and only disengaged by the advance of the Guards towards Eipel, on an intermediate road between the 1st and 5th Prussian corps. On the 29th, Prince Frederick Charles stormed Gitschin, and the army of the Crown Prince totally defeated the 6th, 8th, and 10th Austrian corps. On the 30th, a fresh attempt of Benedek's to re-take Gitschin by the Ist corps and the Saxon army was signally foiled, and the two Prussian armies effected a junction. The Austrian loss represents men to the number of at least a corps and a half, while that of the Prussians is less than one fourth that number. Thus we find that on the 27th there were only two Austrian army corps, of about 33,000 men each, at hand; on the 28th, three; on the 29th, four, and if one Prussian telegram be correct, part of a fifth (the 4th corps); while on the 30th the Saxon army corps only had been able to come up in support. There were, then, two, if not three, corps absent from the contested ground during all that time, while the Prussians brought every man down into Bohemia. In fact, up to the evening of the 29th, the whole of the Austrian troops on the spot were barely superior in numbers to either of the two Prussian armies, and being brought into line successively, the supports arriving after the defeat only of the troops first engaged, the result was disastrous. The 3d army corps (Archduke Ernst), which fought at Custozza, is reported to have been sent to the north by rail immediately after that battle, and is, in some accounts, set down among Benedek's available forces. This corps, which would make the whole force, including the Saxons, nine corps, could not have been up in time for the battles in the latter days of June. The Prussians, whatever the faults of their plan of operations were, made up for them by their rapidity and energy of action. No fault can be found with the operations of either of their two armies. Short, sharp, and decisive were all their blows, and completely successful. Nor did this energy forsake them after the two armies were joined; on they marched, and already on the 3d they met Benedek's combined forces with the whole of theirs, and gave them a last crushing blow. It is hardly possible to suppose that Benedek accepted this battle of his own free will. No doubt the rapid pursuit of the Prussians compelled him to take a strong position with all his army, in order to reform his troops, and to give a day's start to his retiring army train, expecting not to be attacked in force during the day, and to be able to draw off during the night. A man in his position, with four of his corps completely shattered, and after such tremendous losses, cannot have desired, there and then, to deliver a decisive battle, if he could draw off in safety. But the Prussians appear to have compelled him to fight, and the result was the complete rout of the Austrians, who, if the armistice be not granted, will now be trying to make towards Olmutz or Vienna, under the most disadvantageous circumstances, for the slightest out-flanking movement of the Prussians on their right must cut off numerous detachments from the direct road, and drive them into the hills of Glatz, to he made prisoners. The "army of the north", as splendid a host as there was in Europe ten days ago, has ceased to exist. No doubt the needle-gun, with its rapid fire, has done a great part of this. It may be doubted whether without it the junction of the two Prussian armies could have been effected; and it is quite certain that this immense and rapid success could not have been obtained without such superior fire, for the Austrian army is habitually less subject to panic than most European armies. But there were other circumstances co-operating. We have already mentioned the excellent dispositions and unhesitating action of the two Prussian armies, from the moment they entered Bohemia. We may add that they also deviated, in this campaign, from the column system, and brought their masses forward principally in deployed lines, so as to bring every rifle into activity, and to save their men from the fire of artillery. We must acknowledge that the movements both on the march and before the enemy were carried out with an order and punctuality which no man could have expected from an army and administration covered with the rust of fifty years peace. And, finally, all the world must have been surprised at the dash displayed by these young troops in each and every engagement without exception. It is all very well to say the breech-loaders did it, but they are not self-acting, they want stout hearts and strong arms to carry them. The Prussians fought very often against superior numbers, and were almost everywhere the attacking party; the Austrians, therefore, had the choice of ground. And in attacking strong positions and barricaded towns, the advantages of the breech-loader almost disappear; the bayonet has to do the work, and there has been a good deal of it. The cavalry, moreover, acted with the same dash, and with them cold steel and speed of horse are the only weapons in a charge. The French canards of Prussian cavalry lines first peppering their opponents with carbine fire (breech-loading or otherwise) and then rushing at them sword in hand, could only originate among a people whose cavalry has very often been guilty of that trick, and always been punished for it by being borne down by the superior impetus of the charging enemy. There is no mistaking it, the Prussian army has, within a single week, conquered a position as high as ever it held, and may well feel confident now to be able to cope with any opponent. There is no campaign on record where an equally signal success, in an equally short time, and without any noteworthy check, has been obtained, except that campaign of Jena which annihilated the Prussians of that day, and, if we except the defeat of Ligny, the campaign of Waterloo.

Notes on the War in Germany

https://www.marxists.org/archive/marx/works/1866/07/06.htm

The members of the Central Council will of course be elected by Congress (5 of the Provisional Statutes) with power to add to their number. The General Secretary to be chosen by Congress for one year and to be the only paid officer of the Association. We propose 2 for his weekly salary. [The French and German texts add: "The Standing Committee, which is in fact an executive of the Central Council, to be chosen by Congress, the function of any of its member to be defined by the Central Council."] The uniform annual contribution of each individual member of the Association to be one half penny (perhaps one penny). The cost price of cards of membership (carpets) to be charged extra. While calling upon the members of the Association to form benefit societies and connect them by an international link, we leave the initiation of this question (etablissement des societes de secours mutuels. Appoi moral et materiel accorde aux orphelins de l'association [foundation of benefit societies; moral and material assistance to the Association's orphans. -- Ed.]) to the Swiss who originally proposed it at the conference of September last. That in each locality, where branches of our Association exist, the work be immediately commenced, and evidence collected on the different points specified in the subjoined scheme of inquiry. That the Congress invite all workmen of Europe and the United States of America to collaborate in gathering the elements of the statistics of the working class; that reports and evidence be forwarded to the Central Council. That the Central Council elaborate them into a general report, adding the evidence as an appendix. That this report together with its appendix be laid before the next annual Congress, and after having received its sanction, be printed at the expense of the Association. It is needed to restore the health and physical energies of the working class, that is, the great body of every nation, as well as to secure them the possibility of intellectual development, sociable intercourse, social and political action. We propose 8 hours work as the legal limit of the working day. This limitation being generally claimed by the workmen of the United States of America,'40 the vote of the Congress will raise it to the common platform of the working classes all over the world. For the information of continental members, whose experience of factory law is comparatively short-dated, we add that all legal restrictions will fail and be broken through by Capital if the period of the day during which the 8 working hours must be taken, be not fixed. The length of that period ought to be determined by the 8 working hours and the additional pauses for meals. For instance, if the different interruptions for meals amount to one hour, the legal period of the day ought to embrace 9 hours, say from 7 a.m. to 4 p.m., or from 8 a.m. to 5 p.m., etc. Nightwork to be but exceptionally permitted, in trades or branches of trades specified by law. The tendency must be to suppress all nightwork. This paragraph refers only to adult persons, male or female, the latter, however, to be rigorously excluded from all nightwork whatever, and all sort of work hurtful to the delicacy of the sex, or exposing their bodies to poisonous and otherwise deleterious agencies. By adult persons we understand all persons having reached or passed the age of 18 years. However, for the present, we have only to deal with the children and young persons of both sexes divided into three classes, to be treated differently [a]; the first class to range from 9 to 12; the second, from 13 to 15 years; and the third, to comprise the ages of 16 and 17 years. We propose that the employment of the first class in any workshop or housework be legally restricted to two; that of the second, to four; and that of the third, to six hours. For the third class, there must be a break of at least one hour for meals or relaxation. It may be desirable to begin elementary school instruction before the age of 9 years; but we deal here only with the most indispensable antidotes against the tendencies of a social system which degrades the working man into a mere instrument for the accumulation of capital, and transforms parents by their necessities into slave-holders, sellers of their own children. The right of children and juvenile persons must be vindicated. They are unable to act for themselves. It is, therefore, the duty of society to act on their behalf. If the middle and higher classes neglect their duties toward their offspring, it is their own fault. Sharing the privileges of these classes, the child is condemned to suffer from their prejudices. The case of the working class stands quite different. The working man is no free agent. In too many cases, he is even too ignorant to understand the true interest of his child, or the normal conditions of human development. However, the more enlightened part of the working class fully understands that the future of its class, and, therefore, of mankind, altogether depends upon the formation of the rising working generation. They know that, before everything else, the children and juvenile workers must be saved from the crushing effects of the present system. This can only be effected by converting social reason into social force, and, under given circumstances, there exists no other method of doing so, than through general laws, enforced by the power of the state. In enforcing such laws, the working class do not fortify governmental power. On the contrary, they transform that power, now used against them, into their own agency. They effect by a general act what they would vainly attempt by a multitude of isolated individual efforts. Proceeding from this standpoint, we say that no parent and no employer ought to be allowed to use juvenile labour, except when combined with education. By education we understand three things. A gradual and progressive course of mental, gymnastic, and technological training ought to correspond to the classification of the juvenile labourers. The costs of the technological a schools ought to be partly met by the sale of their products. The combination of paid productive labour, mental education bodily exercise and polytechnic training, will raise the working class far above the level of the higher and middle classes. It is self-understood that the employment of all persons from 9 and to 17 years (inclusively) in nightwork and all health-injuring trades must be strictly prohibited by law. Capital is concentrated social force, while the workman has only to dispose of his working force. The contract between capital and labour can therefore never be struck on equitable terms, equitable even in the sense of a society which places the ownership of the material means of life and labour on one side and the vital productive energies on the opposite side. The only social power of the workmen is their number. The force of numbers, however is broken by disunion. The disunion of the workmen is created and perpetuated by their unavoidable competition among themselves. Trades' Unions originally sprang up from the spontaneous attempts of workmen at removing or at least checking that competition, in order to conquer such terms of contract as might raise them at least above the condition of mere slaves. The immediate object of Trades' Unions was therefore confined to everyday necessities, to expediences for the obstruction of the incessant encroachments of capital, in one word, to questions of wages and time of labour. This activity of the Trades' Unions is not only legitimate, it is necessary. It cannot be dispensed with so long as the present system of production lasts. On the contrary, it must be generalised by the formation and the combination of Trades' Unions throughout all countries. On the other hand, unconsciously to themselves, the Trades' Unions were forming centres of organisation of the working class, as the mediaeval municipalities and communes did for the middle class. If the Trades' Unions are required for the guerilla fights between capital and labour, they are still more important as organised agencies for superseding the very system of wages labour and capital rule. Too exclusively bent upon the local and immediate struggles with capital, the Trades' Unions have not yet fully understood their power of acting against the system of wages slavery itself. They therefore kept too much aloof from general social and political movements. Of late, however, they seem to awaken to some sense of their great historical mission, as appears, for instance, from their participation, in England, in the recent political movement, from the enlarged views taken of their function in the United States, and from the following resolution passed at the recent great conference of Trades' delegates at Sheffield: "That this Conference, fully appreciating the efforts made by the International Association to unite in one common bond of brotherhood the working men of all countries, most earnestly recommend to the various societies here represented, the advisability of becoming affiliated to that hody, believing that it is essential to the progress and prosperity of the entire working community." Apart from their original purposes, they must now learn to act deliberately as organising centres of the working class in the broad interest of its complete emancipation. They must aid every social and political movement tending in that direction. Considering themselves and acting as the champions and representatives of the whole working class, they cannot fail to enlist the non-society men into their ranks. They must look carefully after the interests of the worst paid trades, such as the agricultural labourers, rendered powerless [French text has: "incapable of organised resistance"] by exceptional circumstances. They must convince the world at large [French and German texts read: "convince the broad masses of workers"] that their efforts, far from being narrow -- and selfish, aim at the emancipation of the downtrodden millions. Because indirect taxes enhance the prices of commodities, the tradesmen adding to those prices not only the amount of the indirect taxes, but the interest and profit upon the capital advanced in their payment Because indirect taxes conceal from an individual what he is paying to the state, whereas a direct tax is undisguised, unsophisticated, and not to be misunderstood by the meanest capacity. Direct taxation prompts therefore every individual to control the governing powers while indirect taxation destroys all tendency to self-government.

The International Workingmen's Association, Instructions for the Delegates of the Provisional General Council

https://www.marxists.org/archive/marx/works/1866/08/instructions.htm

I shall return to London the day after tomorrow. My doctor exiled me to this seaside place, where indeed my health has greatly improved. But once again more than two months February, March and half of April have been entirely lost and the completion of my book again postponed. It is enough to drive one mad. I was suffering from carbuncles, not furuncles. This time it was dangerous. Of course you are right in saying that dietetic sins are at the bottom of it. I am too much given to working at night, studying by day and writing by night. That, together with all the worries, private and public, and so long as I am working hard the neglect of a regular diet and exercise, etc, is quite enough to disorder the blood. I received Herr Menke s 100 thalers for the International together with your letter. I have not got the addresses of my French friends in Paris here, but if Herr Menke writes to my friend C Kaub (33 Rue des trois Couronnes du Temple) he can introduce him to V Schily (German) and Tolain, Fribourg, etc, members of the Paris Committee. The news from Germany is not very gratifying. Prussia is being pushed by Russia (and Bonaparte), Austria by the latter (following more reluctantly in self-defence). Will our philistines at last realise that without a revolution which removes the Hapsburgs and Hohenzollerns (it is unnecessary to speak of the lesser dung-beetles) there must finally come another Thirty Years War and a new partition of Germany! A movement from the Italian side would help Prussia. But if we consider Austria and Prussia in themselves, it is practically certain that the latter would be at a disadvantage, despite all the D ppel-R nommage. In any case Benedek is a better general than Prince Friedrich Karl. Austria could enforce peace on Prussia single-handed, but not Prussia on Austria. Every Prussian success would be an encouragement to Bonaparte to interfere. While I write these lines to you, Bismarck may have again drawn in his horns. But even that would only postpone the conflict. I think that such a postponement is probable. This German trouble is a piece of extraordinary good luck for Bonaparte. His position is undermined on all sides. But war would give him a new lease of life. Write to me soon, and particularly about German affairs.

Marx-Engels Correspondence 1866

https://www.marxists.org/archive/marx/works/1866/letters/66_04_06a.htm

... So Bismarck has brought off his universal suffrage stroke even though without his Lassalle. It looks as if the German bourgeois will agree to it after some resistance, for Bonapartism is after all the real religion of the modern bourgeoisie. It is becoming more and more clear to me that the bourgeoisie has not the stuff in it to rule directly itself, and that therefore unless there is an oligarchy, as here in England, capable of taking over, for good pay, the management of state and society in the interests of the bourgeoisie, a Bonapartist semi-dictatorship is the normal form. It upholds the big material interests of the bourgeoisie even against the will of the bourgeoisie, but allows the bourgeoisie no share in the government. The dictatorship in its turn is forced against its will to adopt these material interests of the bourgeoisie as its own. So we now get Monsieur Bismarck adopting the programme of the National Association. To carry it out is something quite different, of course, but Bismarck is hardly likely to come to grief through the German middle class. A German who has just returned relates that he has already found many who swallowed this bait; according to Reuter the Karlsruhe people have accepted the business and the profound embarrassment which this affair has caused the K lnische Zeitung clearly indicates the forthcoming turn of events...

Marx-Engels Correspondence 1848

https://www.marxists.org/archive/marx/works/1866/letters/66_04_13.htm

The French, very numerously represented, gave vent to their cordial dislike for the Italians. Moreover the representatives of "young France" (non-workers) came out with the announcement that all nationalities and even nations were "antiquated prejudices." Proudhonised Stirnerism. Everything to be dissolved into little "groups" or "communes" which will in their turn form an "association" but no state. And indeed this "individualisation" of mankind and the corresponding "mutualism" are to proceed while history comes to a stop in all other countries and the whole world waits until the French are ripe for a social revolution. They will then perform the experiment before our eyes, and the rest of the world, overcome by the force of their example, will do the same. Just what Fourier expected of his model phalanstery. Moreover, everyone who encumbers the "social" question with the "superstitions" of the old world is "reactionary." The English laughed very much when I began my speech by saying that our friend Lafargue, etc., who had done away with nationalities, had spoken "French" to us, i.e., a language which nine-tenths of the audience did not understand. I also suggested that by the negation of nationalities he appeared, quite unconsciously, to understand their absorption into the model French nation. For the rest, the line is difficult now because one has equally to oppose the silliness of English pro-Italianism on the one hand and the false polemic of the French on the other, and must specially prevent any demonstration which would involve our Association in a one-sided direction.

Letters: Marx-Engels Correspondence 1866

https://www.marxists.org/archive/marx/works/1866/letters/66_06_20-abs.htm

... The business in Germany seems to me fairly simple now. As soon as Bismarck by using the Prussian army carried out the Little Germany scheme of the bourgeoisie with such colossal success, the development in Germany has so firmly taken this direction that we, like others, must acknowledge the fait accompli, may we like it or not. As to the national side of the affair, Bismarck will in any case establish the Little German Empire in the dimensions intended by the bourgeoisie, that is, including South-West Germany for the phrases about the line of the Main and the optional separate South German Confederacy are no doubt meant for the French, and in the meantime the Prussians are marching on Stuttgart. Moreover, before very long the German provinces of Austria will also fall to this empire, since Austria is now bound to become Hungarian, and the Germans will be the third nationality in the empire even after the Slavs. Politically Bismarck will be compelled to rely on the middle class, whom he needs against the imperial princes. Not at the moment, perhaps, because his prestige and the army are still sufficient. But he will have to give something to the middle class even if only to secure from Parliament the necessary conditions for the central power, and the natural course of the affairs will always force him or his successors to appeal to the middle class again; so that if at present, as is possible, Bismarck does not concede more to the middle class than he actually has to, he will still be driven more and more into their camp. The good side of the affair is that it simplifies the situation; it makes a revolution easier by doing away with the brawls between the petty capital cities and will certainly accelerate developments. After all a German Parliament is something quite different from a Prussian Chamber. The petty states in their totality will be swept into the movement, the worst localising influences will disappear and parties will at last become really national parties instead of merely local ones. The chief disadvantage a very great one is the unavoidable flooding of Germany with Prussianism. Also the temporary separation of German Austria, which will result in an immediate advance of the Slav elements in Bohemia, Moravia and Carinthia. Unfortunately nothing can be done against either of these consequences. In my opinion, therefore, we have to accept the fact, without approving of it, and to use, as far as we can, the greater facilities now bound at any rate to become available for the national organisation and unification of the German proletariat. There was no need for Stumpf to write to me that brother Liebknecht s view on Austria was bound to become increasingly fanatical. It could not possibly be otherwise. He moreover published furious articles, undoubtedly sent from Leipzig, in the Neue Frankfurter Zeitung. Blind s prince-devouring Neue Frankfurter Zeitung went so far as to reproach the Prussians for their disgraceful treatment of the venerable Elector of Hesse , and waxed enthusiastic over the poor blind Guelph! Nothing more has appeared in the Guardian.

Marx-Engels Correspondence 1866

https://www.marxists.org/archive/marx/works/1866/letters/66_07_25.htm

A few lines at once. Dr Jakobi, I have been informed by workers, has become a very good citizen and consequently is not to be troubled in any way with my private affairs. I must see about doing something, but I see that you have tried to do everything in your power, and therefore ask you to consider this affair settled. I do not write for the Commonwealth. Miquel and Co can wait a long time before they become Prussian ministers.

Marx-Engels Correspondence 1866

https://www.marxists.org/archive/marx/works/1866/letters/66_10_25.htm

Eighteen years later, a new revolutionary eruption, or rather, earthquake, shook the whole Continent [the 1847-48 Revolutions]. Even Germany began to move, although it had been kept constantly at Russia's apron strings since the so-called War of Independence. Ever more astonishing was the fact that, of all German cities, Vienna was the first to set up barricades, and to do so with success. This time, for the first time in history, Russia lost its composure. Czar Nicholas no longer turned to the Guard, but published a manifesto to his people in which he complained that the French pestilence had infected even Germany, that it was nearing the borders of the Empire, and that the Revolution in its madness was turning its feverish eyes on Holy Russia. No wonder! he cried out. This Germany, after all, has been for years the refuge of unbelief. The cancer of an infamous philosophy has affected the vital parts of a people that appeared to be so healthy. And he concluded his proclamation with the following appeal to the Germans: "God is with us! Bear it in mind, you heathens, and submit, for God is with us!" Shortly thereafter, he had his faithful servants Nesselrode send a further message to the Germans which dripped with tenderness for this heathenish people [July 6, 1848]. Why this turn? Now the Berliners had not only made a revolution, they had also proclaimed the restoration of Poland, and the Prussian Poles, deceived by the enthusiasm of the people, began to construct military camps in Posen. Hence the flatteries of the Czar. Once again, it was the Polish nation, the immortal knight of Europe, that forced the Mongols to retreat! Only after the Germans, especially the Frankfurt National Assembly, betrayed the Poles did Russia begin to breathe again and gather enough strength to deliver the final blow to the Revolution of 1848 in its last refuge, Hungary. And even there, the last knight to oppose Russia was a Pole -- General Bem. Today, there are still naive people who believe that everything would have been different if Poland had ceased to be "a necessary nation", as a French writer put it, yea, even if Poland were only a mere sentimental memory. You know, however, that neither sentiment nor memory is a salable commodity on the exchange. When the last Russian ukase on the insurrection in the Polish kingdom became known in England, the organ of the leading moneybags [the London Times] advised the Poles to become Muscovites. And why should they not, if only to insure the repayment of the 6 million pounds sterling which the English capitalists had just granted to the Czar? At worst, should Russia seize Constantinople, the Times wrote, England would be allowed to seize Egypt in order to secure the route to the great Indian market! In other words: England may leave Constantinople to Russia only if she receives permission from Russia to dispute France's claim to Egypt. The Muscovites, the Times writes, gladly floats loans in England and pays well. He loves English money. He does indeed. How well he like the English themselves is best described in the Gazette de Moscou [Moscovskye Vedomosti, news daily of ruling classes, from 1756 to 1917] of December, 1851: "No, the turn of perfidious Albion will finally come and we will conclude a treaty with that people only in Calcutta." I ask you, what has changed? Has the danger from the Russia side been lessoned? No. Rather, the delusion of the ruling classes of Europe has reached its pinnacle. Above all, nothing has changed in Russia's policy, as her official historian Karamsin admits. Her methods, her tactics, her maneuvers may change, but the pole star -- world domination -- is immutable. Only a crafty government, ruling over a mass of barbarians, could devise such a plan nowadays. Pozzo di Borgo, the greatest Russian diplomat of modern times, wrote to Alexander I during the Congress of Vienna that Poland was the most important instrument in carrying out Russian intentions for world domination; but it is also an insurmountable obstacle, if the Pole, tired of its unceasing betrayal by Europe, does not become a fearful whip in the hands of the Muscovites. Now, without speaking of the mood of the Polish people, I ask: Has anything taken place that would frustrate Russia's plans or paralyze her actions? I do not have to tell you that her conquests in Asia are making constant progress. I do not have to tell you that the so-called Anglo-French war against Russia delivered the mountain fortress in the Caucasus to the latter and gave her domination over the Black Sea and maritime rights -- something that Catherine II, Paul, and Alexander II had vainly tired to wrest from England. Railroads untie and concentrate her forces once scattered over a wide area. Her material resources in Congress Poland [that chunk of the Kingdom of Poland which went to Russia during the Congress of Vienna, 1814-15], which constitutes her fortified camp in Europe, have increased colossally. The fortresses of Warsaw, Modlin, Ivangorod, points once selected by Napoleon I, dominate the whole length of the Vistula and comprise a formidable base for attacks on the north, west, and south. Pan-Slavic propaganda progresses to the extent that Austria and Turkey have become weakened. And what Pan-Slavic propaganda means you can see from 1848-49, when Hungary was invaded, Vienna ravaged, and Italy pulverized by the Slavs who fought under Jallachich, Windischgratz, and Radetzky. And as if this were not enough, England's crime against Ireland created for Russia a powerful new ally on the other side of the Atlantic. The plan of Russian policy remains unchanged; its means of action have grown considerably since 1848, and until now only one thing has remained beyond its reach -- and Peter the Great touched on this weak point when he said that for conquering the world, the Muscovites lack nothing except souls. The invigorating spirit that Moscow needs will be acquired only with the engorging of the Poles. What will they then have to throw into the scales? This question is being answered from many points of view. A continental European would perhaps answer me that with the emancipation of the peasants, Russia can belong to the family of civilized nations, that German power, recently concentrated in the hand of Prussia, can defy all Asiatic attacks, and that, finally, the social revolution in Western Europe would put an end to the danger of "international conflicts". But an Englishman, who reads only the Times, could answer me that, at worst, if Russia conquers Constantinople, England would annex Egypt and thus secure for itself the route to the great Indian market. In regard to the first -- that is, in the emancipation of the serfs -- the government has freed itself from the obstacles that the nobility could have put in the way of its centralization. It created a wide field for the recruiting of its army, dissolved the community property of the peasants, isolated them, and strengthened their faith in the Czar as a Little Father. It did not free them from Asiatic barbarism, for it takes centuries to build civilization. Every attempt to elevate the moral level of the peasants is considered a crime and punished as such. I only remind you of the temperance unions, which aimed to save the Muscovite from what Feuerbach calls the substance of his religion, namely, alcohol. Whatever one may expect of the peasant emancipation in the future, it is clear in any case that, for the time being, it has enlarged the powers at the disposal of the Czar. We now come to Prussia. Once a vassal of Poland, it has become, under the aegis of Russia and because of the partition of Poland, a power of the first rank. If it lost its Polish booty tomorrow, it would merge into Germany, instead of swallowing it. In order to maintain itself as a separate power in Germany, it has to depend on the Muscovite. The most recent extension of its rule has not loosened this tie at all, but rather made it indissoluble and strengthened its antagonism to France and Austria. At the same time, Russia is the pillar on which the unrestrained role of the Hohenzollern dynasty and its feudal vassals rests. Russia is Prussia's shield against the anger of the people. Hence Prussia is no wall against Russia, but the latter's tool, destined to invade France and conquer Germany. And the social revolution -- what else is it but a class conflict? It is possible that the conflict between workers and capitalists will be less cruel and bloody than the conflict between feudal lords and capitalists in England and France. Let us hope so. But in any case, such a social crisis, even if it could enhance the energies of the people of the West, would, like any other inner conflict, call forth aggression from outside. Thus Russia would again play the role she did during the anti-Jacobin war and the Holy Alliance -- the role of a savior of Order chosen by Providence. It would enlist in its ranks all the privileged classes of Europe. Already, during the February Revolution, it was not only Count Montalembert who had his ear to the ground to hear the hoof beats of the approaching Cossack horses. The Prussian bumpkin-Junkers were not the only ones who, in the representative corporate bodies of Germany, proclaimed the Czar the "Father and Protector". On all the European exchanges shares rose with every Russian victory and fell with every Russian defeat. Thus Europe faces only one alternative: Either Asian barbarism, under the leadership of the Muscovites, will come down on Europe like an avalanche, or Europe must restore Poland and thereby protect itself against Asia with a wall of 20 million heroes, to win time for the consummation of its social transformation.

The International Workingmen's Association, Poland and the Russian Menace

https://www.marxists.org/archive/marx/works/1867/01/22.htm

When the last Ukases on the abolition of Poland became known in this country, the organ of the leading stock-exchanges exhorted the Poles to become Muscovites. Why not, if it was a means of adding to the security of the six million pounds sterling recently lent to the Tsar by the English capitalists? About thirty years ago a revolution broke out in France. It was an event unforeseen by the Providence of St Petersburg, which had just concluded a secret treaty with Charles X to improve the administration and geographic arrangement of Europe. As soon as the sad news arrived the Tsar Nicholas called together the officers of his guard and delivered to them a short warlike harangue, summing up with the words, To your horses, Gentlemen! It was not a vain threat. Paskievitch was sent to Berlin, from which point he was to direct the invasion of France. A few months later everything was ready. The Prussians were supposed to deploy their concentration on the Rhine, the Polish army to enter Prussia and the Muscovites to follow in the rear. But then, as Lafayette said in the Chamber of Deputies, the advance guard turned on the mass of the army the Warsaw uprising saved Europe from a second anti-Jacobin war. Eighteen years later there was another eruption of the revolutionary volcano, or rather an earthquake which shook the entire continent. Even Germany began to stir, in spite of the maternal apron-strings on which Russia had held her since the so-called war of independence. And what was even more astonishing, of all the German cities, Vienna was the first to try its hand at the raising of street-barricades, and with success! This time, perhaps for the first time in history, the Russian lost his nerve. Tsar Nicholas lost no time in haranguing his guards. He published a Manifesto to his people, saying that the French plague had infested even Germany, that it was approaching the frontiers of the Empire and that the Revolution, in its delirium was casting crazed glances at Holy Russia. Nothing astonishing in this, he cried. For years this same Germany had been a ferment of infidelity. The cancer of a sacrilegious philosophy had cut into the vital organs of this people, so healthy in its outward aspect. And he concluded with this message to the Germans: God is with us! Now hear this, infidels, and yield to us, for God is with us! Shortly afterwards, by the instrument of his faithful servant, Nesselrode, he sent the Germans another message, but this one was overflowing with tenderness for this pagan people. Whence came this change? The reason is that the people of Berlin had not only made a revolution, they had proclaimed the restoration of Poland, and the Poles in Prussia, deceived by the popular enthusiasm, were in the process of setting up military camps in Posen. Hence the amiability of the Tsar. Once again it was Poland, the immortal knight of Europe, who kept the Mongol in awe! It was only after the betrayal of the Poles by the Germans, particularly by the German National Assembly in Frankfort, that Russia recovered its force and became strong enough to stab the Revolution of 1848 and its last refuge, Hungary. And even there, the last man to lead a campaign against Russia was a Pole, General Bem. Now there are many people who are naive enough to believe that all that has changed, that Poland has ceased to be a necessary nation , as a French writer called it, and is now only a sentimental memory. And you know that sentiments and memories are not listed on the stock exchange. But I ask you, what is there that has changed? Has the danger diminished? No, only the intellectual blindness of the ruling classes of Europe has reached its zenith. In the first place the policy of Russia is changeless, according to the admission of its official historian, the Muscovite Karamsin. Its methods, its tactics, its manoeuvres may change, but the polar star of its policy world domination is a fixed star. In our times only a civilised government ruling over barbarian masses can hatch out such a plan and execute it. As the greatest Russian diplomat of modern times, Pozzo di Borgo, wrote to Alexander I at the time of the Congress of Vienna, Poland is the great instrument for the execution of Russian designs on the world, but it is also an invincible obstacle to them, until such time as the Poles, worn out by the accumulated betrayals of Europe, become a whip in the hand of the Muscovite. Well, except for the dispositions of the Polish people, has anything intervened to thwart the Russian plans or paralyse its action? I do not need to tell you that the progress of its conquests in Asia has been continuous. I do not need to tell you that the so-called war of England and France against Russia delivered to the latter the mountain fortresses of the Caucasus, control of the Black Sea and maritime rights which Catherine II, Paul and Alexander I had tried in vain to wrest from England. Railroads are uniting and concentrating its forces, scattered over a vast expanse. Its material resources in Congress Poland, where it has entrenched itself in Europe, have increased enormously. The fortifications of Warsaw, Modlin, Ivangorod points chosen by the first Napoleon command the entire course of the Vistula, and constitute a formidable base for attacks to the North, West and South. Panslavist propaganda has had the satisfactory result of weakening Austria and Turkey. And as to the meaning of this Panslavist propaganda, you had a foretaste of it in 1848-49, when Hungary was invaded, Vienna was devastated and Italy crushed by the Slavs fighting under the flags of Jellachich, Windischgraetz and Radetzky. And, in addition to all that, the crimes of England against the Irish have raised a new and powerful ally of Russia on the other side of the Atlantic. The plan of Russian policy remains changeless; its means of action have considerably increased since 1848, but up to now, one thing remains beyond her reach, and Peter the Great touched this weak point when he wrote that in order to conquer the world, the Muscovites needed only souls. Well, the vivifying spirit which Russia needs will be infused into its carcass at the moment when the Poles become Russian subjects. What will you then have to throw into the other tray of the balance? A continental European will perhaps reply that by the emancipation of the serfs, Russia has entered the family of civilised nations, that German power, recently concentrated in Prussian hands, can resist all Asiatic shocks, and finally, that the social revolution in Western Europe will end the danger of international conflicts. An Englishman who reads only The Times will be able to say that, supposing the worst, that is, if Russia seizes Constantinople, England will take possession of Egypt and will thus secure the path to its great market in India. As concerns the first point, the emancipation of the serfs freed the supreme government from obstacles which the nobles were in a position to place in the way of its centralised action. It created a vast reservoir for the recruitment for its army, dissolved the communal property of the Russian peasants, isolated them, and, above all, strengthened their faith in their Autocrat and Pope. It has not disinfected them from their Asiatic barbarity, the creeping heritage of centuries. Any attempt to raise their moral level is punished as a crime. I need remind you only of the official provocations against the temperance societies which tried to wean the Muscovite from what Feuerbach calls the material substance of his religion, namely, vodka. Whatever the future effects may be, for the present the emancipation of the serfs has increased the forces at the Tsar s disposition. Let us pass on to Prussia. Formerly a vassal of Poland, it grew to be a first-rate power only under the auspices of Russia and through the partition of Poland. If Prussia should lose its Polish prey tomorrow, it would sink back into Germany instead of absorbing it. In order to maintain itself as a power distinct from Germany it must lean for support on the Muscovite. Its recent increase of power, far from relaxing the bonds, has made them indissoluble. Besides this increase of power has increased Prussia s antagonism with France and Austria. At the same time Russia is the pillar on which the arbitrary rule of the Hohenzollern dynasty and its feudal tenants rests. It is its safeguard against popular disaffection. Consequently Prussia is not a bulwark against Russia, but its predestined instrument for the invasion of France and the digestion of Germany. As for the social revolution, what does this word mean if not class struggle. It is possible that the struggle between the workers and capitalists will be less fierce and bloody than the struggles between the feudal lords and the capitalists in England and France. Let us hope so. But in any case, although a social crisis of this sort may increase the energies of the Western peoples, it will also, like every internal conflict, call for aggression from without. Once more this conflict will clothe Russia anew with the role it had during the anti-Jacobin war and since the Holy Alliance, that of the pre-destined saviour of order. It will enlist in Russia s ranks all the privileged classes of Europe. Already, during the February Revolution, the Count of Montalembert was not the only one who put his ear to the ground to listen for the distant sound of the hoofs of Cossack horses. The Prussian country bumpkins were not the only ones in the German representative bodies who proclaimed the Tsar their Father Protector . All the stock exchanges of Europe rose with each Russian victory over the Magyars and fell with each Russian defeat. Finally, as to what The Times says let Russia take Constantinople if it does not prevent England from establishing itself in Egypt what does that mean? It means that England will hand over Constantinople to Russia if Russia will permit England to contest France s claim to Egypt. This is the agreeable perspective opened to us by The Times. As for the Russian love of England, fond as it is of British pounds, shillings and pence, it is enough to quote the words of the Moscow Gazette of December 1851: No, perfidious Albion s turn must come, and before long we need not make any more treaties with this people except in Calcutta. There is but one alternative for Europe. Either Asiatic barbarism, under Muscovite direction, will burst around its head like an avalanche, or else it must re-establish Poland, thus putting twenty million heroes between itself and Asia and gaining a breathing spell for the accomplishment of its social regeneration.

Poland's European Mission by Karl Marx 1867

https://www.marxists.org/archive/marx/works/1867/01/22a.htm

Clearing the island of the natives, and stocking it with loyal Englishmen. They succeeded only to plant a landowning aristocracy. English Protestant adventurers (merchants, usurers), who obtained from the English crown the confiscated lands, and gentlemen undertakers who were to plant the ceded estates with native English families. James I. Ulster. (Jacobite plantation, 1609-12.) British undertakers, to stock the confiscated, stolen lands with Irish. Not until 1613 are Irish considered English subjects; previously they were looked upon as outlaws and enemies. The Irish Parliament governed only the Pale. Persecution of Catholics. Elizabeth settled Munster, James I Ulster, but Leinster and Connaught have not yet been purged. Charles I tried to purge Connaught. Cromwell. First national revolt of Ireland, its 2nd Complete Conquest. Partial Re-cal onisation. (1641-60.) Irish Revolution of 1641. August 1649 Cromwell landing Dublin. (Followed by Ireton, Lambert, Fleetwood, Henry Cromwell.) In 1652 the 2nd Complete Conquest of Ireland completed. Division of spoils: the Government itself, the adventurers who had lent 360,000 for the 11 years of war, the officers and soldiers, by the Acts of the English Parliament, 12 August, 1652, and 26 September, l653. Smite the Amalekites of the Irish Nation hip and thigh, and replant the re-devastated land with new colonies of brand-new Puritan English.-Bloodshed, devastation, depopulation of entire counties, removal of their inhabitants to other regions, sale of many Irish into slavery in the West Indies. By engaging in the conquest of Ireland, Cromwell threw the English Republic out the window. Thence the Irish mistrust of the English people s party. The British were then more numerous in Ireland than at any other time. Never higher than 3/11, never lower than 2/11 of the Irish population. 1684. Charles II begins to favour the Catholic interest of Ireland, and to enlist a Catholic army. The Williamite (imported lords) absentees. Cry against absentee landlords since 1692. Similar legislation of England against Irish Cattle. Experiment to coerce the mass of the Irish nation into the Anglican religion. Catholics deprived of vote for members of Parliament. This Penal Code intensified the hold of the Catholic Priesthood upon the Irish people. The poor people fell into habits of indolence. During the palmy days of Protestant ascendancy and Catholic degradation, the Protestants did not encroach upon the Catholics in numbers. English incomers absorbed into the Irish people and Catholicised. The towns founded by the English Irish. No English colony (except Ulster Scotch) but English landowners. The North American Revolution forms the first turning-point in Irish history. 1778. Roman Catholic Relief Bill (passed by the Anglo-Irish Parliament). (Catholics were still excluded from acquiring by purchase, or as tenants, any freeholds interest.) 1779. Free Trade with Great Britain. Almost all restraints put upon Irish industry swept away. 1782. The Penal Code still further released. The Roman Catholics allowed to acquire freehold property for life, or in fee simple, and-to open schools. 1783. Equal rights of the Anglo-Irish Parliament. Winter 1792-93. After the French Government had annexed Belgium and England resolved upon French war, another portion of the Penal Code was released. Irish could become Colonels in Army, elective franchise for Irish Parliament, etc. Rebellion of 1798. Belfast Republicans (Wolfe Tone, Lord Fitzgerald). Irish peasants not ripe. Anglo-Irish House of Commons voted for the Act of Union passed in 1800. By the Legislature and Customs Union of Britain and Ireland closed the struggle between the Anglo-Irish and the English. The colony itself protested against the illegal Act of Union. From 1783 legislative independence of Ireland, shortly after which duties were imposed on various articles of foreign manufacture, avowedly with the intention of enabling some of her people to employ some of their surplus labour, etc. The natural consequence was that Irish manufactures gradually disappeared as the Act of Union came into effect. etc. The linen industry (Ulster) did not compensate for this. Every time Ireland was about to develop industrially, she was crushed and reconverted into a purely agricultural land. After the latest General Census of 1861: Therefore (1861) approximately 4/5 purely agricultural, and actually perhaps 6/7 if market towns are also counted. Ireland is therefore purely agricultural: Land is life (Justice Blackburne). Land became the great object of pursuit. The people had now before them the choice between the occupation of land, at any rent, or starvation. System of rack-renting. The lord of the land was thus enabled to dictate his own terms, and therefore it has been that we have heard of the payment of 5, 6, 8, and even as much as 10 per acre. Enormous rents, low wages, farms of an enormous extent, let by rapacious and indolent proprietors to monopolising land jobbers, to be relet by intermediate oppressors, for five times their value, among the wretched starvers on potatoes and water. State of popular starvation. Corn Laws in England create a monopoly to a certain extent for the export of Irish corn to England. The average export of grain in the first 3 years following the passage of the Act of Union about 300,000 qrs, 1820 over 1 million qrs, 1834 yearly average of 21/2 million qrs. Amount to pay rent to absentees, and interest to mortgagees (1834), over 30 million dollars (or 7 million pounds sterling). Middlemen accumulated fortunes that they would not invest in the improvement of land, and could not, under the system which prostrated manufactures, invest in machinery, etc. All their accumulations were sent therefore to England for investment. An official document published by the British Government shows that the transfers of British securities from England to Ireland, i.e., the investment of Irish capital in England, in the 13 years following the adoption of free trade in 1821, amounted to as many millions of pounds sterling, and thus was Ireland forced to contribute cheap labour and cheap capital to building up the great works of Britain. Many pigs and export of same. 1831-1841. Accretion of Ireland s population from 7,767,401 to 8,175,238 O'Connell. Repeal Movement. Lichfield-House Contract with Whigs. Partial famines. Insurrection Acts, Arms Acts, Coercion Acts. Earlier, repeated cases of partial famine. Now famine was general. This new period was ushered in by the potato blight (1846-47), starvation and the consequent exodus. Over one million die, partly from hunger, partly from diseases, etc. (caused by hunger). In nine years, 1847-55, 1,656,044 left the country. The revolution of the old agricultural system was but a natural result of the barren fields. People fled. (Families clubbed together to send away the youngest and most enterprising.) Hence, of course, the pooling of small leaseholds and substitution of pasturage for crop farming. However, soon circumstances arose whereby this became a conscious and deliberate system. Contributing circumstances that made this systematic: Act of Parliament passed (1847-48) that Irish landlords had to support their own paupers. (The English Pauper Law is extended to Ireland.) Hence, the Irish (especially English) landlords, mostly deep in debt, try to get rid of the people and clear their estates. Absentee Proprietors. (English capitalists, insurance societies, etc., thereby multiplied, equally former middlemen, etc., who wanted to run their farms on modern economic lines.) Eviction of farmers partly by friendly agreement terminating tenure. But much more eviction en masse (forcibly by crowbar brigades, beginning with the destruction of roofs), forcible ejection. (Also used as political retribution.) This has continued since 1847 to this day. (Abercorn, Viceroy of Ireland.) African razzias (razzias of the little African kings). (People driven from the land. The starving population of the towns largely increased.) The tenantry are turned out of the cottages by scores at a time.... Land agents direct the operation. The work is done by a large force of police and soldiery. Under the protection of the latter, the crowbar brigade advances to the devoted township, takes possession of the houses. ... The sun that rose on a village sets on a desert. (Galway Paper, 1852.) (Abercorn.[b]) Let us now see how this system affected the land in Ireland, where conditions are quite different from those in England. 1847-1865 per cent: the exact decrease: oats 16.3, flax 47.9, turnips 36.1, potatoes 50. Some years would show a greater decrease, but on the whole it has been gradual since 1847. Though Ireland exported considerable quantities of wheat in the past, it is now said to be good only for cultivating oats (the yield of which per acre also continuously decreases). In fact: 1866 Ireland shipped out only 13,250 qrs of wheat against 48,589 qrs shipped in (that is, almost fourfold). Meanwhile, it shipped out approximately one million qrs of oats (for 1,201,737). Since the exodus, the land has been underfed and overworked, partly from the injudicious consolidation of farms, and partly because, under the corn-acre system, the farmer in a great measure trusted to his labourers to manure the land for him. Rents and profits (where the farmer is no peasant farmer) may increase, although the produce of the soil decreases. The total produce may diminish, and still greater part of it be converted into surplus produce, falling to the landlord and (great) farmer. And the price of the surplus produce has risen. Hence, sterilisation (gradual) of the land, as in Sicily by the ancient Romans (ditto in Egypt). We shall speak of the livestock, but first about the population. However, emigration alone does not account for the decrease of the population since 1847. This is borne out by the decade of 1851-61. No famine. The population decreased from 6,515,794 to 5,764,543. Absolute decrease: 751,251. Yet emigration in this period claimed over 1,210,000. Hence, there was an accretion of nearly 460,000 during the ten years. Because 751,251 + 460,000 = the number of emigrants = 1,211,251. Emigration claimed almost triple the accretion. The rate of accretion was 0.7 per cent per year, hence considerably lower than the 1.1 per cent of 1831-41. The explanation is very simple. The increase of a population by births must principally depend on the proportion which those between 20 and 35 bear to the rest of the community. Now the proportion of persons between the ages of 20 and 35 in the population of the United Kingdom is about 1:3.98 or 25.06 per cent, while their proportion in the emigration even of the present day is about 1:1.89 or 52.76 per cent. And probably still greater in Ireland. Professor Cliffe Leslie, in the Economist of February 9,1867, says: Partial famines especially in Munster and Connaught. Bankruptcy of shopkeepers is permanent. Market towns, etc., fall to ruin. In 1861 about 3/5 of the area (Ireland s total area: 20,319,924 acres) or 12,000,000 acres was held by 569,844 tenants who worked plots of one up to less than 100 acres, and about 2/5 (8 million acres) by tenants with over 100 and 500 acres and over (31,927 tenants). The process of consolidation in full gear. Ulster. (Cultivation of flax; Scottish Protestant tenants.) The Times, etc., officially congratulates Abercorn as Viceroy on this system. He, too, is one of these devastators. Lord Dufferin: over-population, etc.[c] In sum, it is a question of life and death. Meagher, Hennessy,[d] Irishman.

On the Irish Question by Karl Marx

https://www.marxists.org/archive/marx/works/1867/12/16.htm

Will you see if you can get the following reply inserted in the Zeitung f r Norddeutschland, and if they refuse it, in another Hanoverian paper. It is important for me because I actually intend to go to Germany in a few weeks time. The whole notice smells like Stieber. In a few days I shall send you the official report of the Geneva Congress which is now appearing in serial form, both English and French, in a paper here. The Commonwealth is up to its neck in the reform movement. Its editorship is in very bad hands. At the moment we have reasons for letting it go on as it is, although we could intervene as share-holders. Recently our Society has had all sorts of quarrels with Monsieur Bonaparte. More next time. Please let me know what Liebknecht is doing and where he is.

Marx-Engels Correspondence 1867

https://www.marxists.org/archive/marx/works/1867/letters/67_02_18.htm

Dear Moor, Hurrah! There was no holding back that exclamation when at last I read in black and white that the 1st volume3 is complete and that you intend taking it to Hamburg at once. So that you shall not be short of the nervus rerum, I am sending you enclosed the halves of seven five-pound-notes, 35 in toto, and will despatch the other halves immediately I receive the usual telegram. Do not let the scrawl from B cher it is undoubtedly from him worry you, it is just Prussian police gossip and the scandal-mongering of men of letters, of the same ilk as that recent stuff about the Polish trip. I enclose a note for you to give to Meissner, so that you can also collect my fee. There is no longer even a shadow of doubt about the alliance between Bismarck and the Russians. However, the Russians have never yet had to pay so high a price for their Prussian alliance, they have had to sacrifice their whole traditional policy in Germany and, if this time they were to imagine, as is their wont, that it is only for the moment , they may well be making the very deuce of a blunder. For all the shouting about the Empire, etc., German unity already seems on the point of outgrowing Bismarck and all those Prussians. They will have to press on all the harder in the Orient the Russians, that is , the present favourable conjuncture will surely not endure long. But how great does the financial need have to be and how sluggish must the industrial progress be, s'il y'en a, in Russia, if those fellows are still without a railway to Odessa and Bessarabia, 11 years after the Crimean War, when it would now be worth two armies to them! And so I also believe that the storm will break this year, if everything goes well for the Russians. The Luxemburg affair appears to be taking the same course as with Saarlouis and Landau. Bismarck undoubtedly offered to sell it in 1866, but Louise really does seem to have held back at that time in the hope that he would later get far more as a present. I have positive knowledge that the Prussian Ambassador Bernstorff told the Hanseatic ditto (Geffcken) in London a few days ago that he had received a despatch to the effect that Prussia was not going to give way over the Luxemburg question under any circumstances. This is the same despatch that The Owl refers to as requesting Britain to make representations at The Hague, which are then said to have succeeded in making Holland withdraw from the deal. The point is that in the present situation Bismarck cannot remotely allow the French to annex German territory without making all his achievements appear ridiculous. What is more, that old jackass William has gone and pronounced the words not a single German village and is personally committed. It is, however, as yet by no means certain that the deal may not still come to fruition after all; the K lnische Zeitung is screaming quite hysterically that we really cannot start a war over Luxemburg and that we have no right to it at all; Luxemburg, they say, should no longer be counted part of Germany, etc., so they have never behaved quite so despicably. Bismarck may not be Faust, but he does have his Wagener. The way in which the poor devil translates his Lord and Master into Wagnerese makes you die of laughing. Bismarck recently employed another of his horse-metaphors, and not wanting to be outdone in this either, Wagener ended a speech by trumpeting: Gentlemen, it is time for us to stop riding our hobby-horses and to mount that noble thoroughbred mare GermaniaV Montez Mademoiselle, the Parisians used to say during the Terror. I hope that your carbuncles are more or less mended now and that the journey will help get rid of them entirely. You must put an end to this nonsense this summer. Many regards to the LADIES and Lafargue.

Engels to Marx 4 April 1867

https://www.marxists.org/archive/marx/works/1867/letters/67_04_04.htm

The delay in this letter lays me open to the more or less well-founded suspicion of being a rascally fellow . In extenuation I can but say that I have only been residing in London a few days. Before that I was with Engels in Manchester. But you and your dear wife know me well enough by now to recognise that letter-writing sins are the normal thing with me. All the same I was with you every day. I count my stay in Hanover among the most beautiful and delightful oases in the desert of life. I met with no adventures in Hamburg except that, in spite of all precautions, I made the acquaintance of Herr Wilhelm Marr. He is, as far as his personality is concerned, a Christian edition of Lassalle, of course of much less value. Also, Herr Niemann was playing during the few days which I spent there. But I was too spoilt by the company in Hanover to want to visit the theatre in less pleasant society. So I missed Herr Niemann. propos. Meissner is prepared to print the medical brochure you intend to write. You have only to send him the manuscript and refer to me. As to particulars, you will have to make further arrangements yourself. Except for rather raw weather on the first day, the journey from Hamburg to London was quite pleasant. A few hours before we reached London a German girl, who had already attracted my attention by her military bearing, announced that she intended to travel from London to Weston-Super-Mare that same evening and did not know how, with all her luggage, she was to set about it. The case was made worse by the fact that on the Sabbath helpful hands are lacking in England. She showed me the name of the railway station in London from which she was to travel. Friends had written it down on a card. It was the North Western station, which I too had to pass. So, like a good knight, I offered to put her down at the station. Accepted. And then it occurred to me that Weston-Super-Mare lies South West, while the station which I had to pass and which had been written down for the young girl was North West. I consulted the captain. And it turned out that she had to go from a part of London lying in a totally different direction from where I wished to go. But I had undertaken to do it and had to make bonne mine mauvais jeu. We arrived at two in the afternoon. I took the donna errante to the station, and learnt that her train did not leave until eight in the evening. So I was in for it, and had to kill six hours with Mademoiselle by walking in Hyde Park, visiting ice-cream shops, etc. It turned out that she was called Elizabeth von Puttkammer, a niece of Bismarck, with whom she had just spent a few weeks in Berlin. She had the whole Army List with her, for this family supplies our brave army in abundance with gentlemen of honour and good figure. She was a gay, educated girl, but aristocratic and black white to the tip of her nose. She was not a little astonished to learn that she had fallen into red hands. But I assured her that our rendezvous would pass without bloodshed and saw her off, saine et sauve, from the station. Just think what fodder my conspiracy with Bismarck would give to Blind or other vulgar democrats! Today I sent off the 14th corrected proof sheet. I received most of these while with Engels, who is extraordinarily pleased with them and, with the exception of sheets 2 and 3, found them written in a manner very easy to understand. His verdict set my mind at rest, for I find that, when printed, my things always displease me, especially at first sight. I am sending your dear wife, to whom I ask you to convey my special thanks for her friendly and cordial reception, the photograph of my second daughter Laura, since there are no more of the others left, and new ones will have to be taken. Engels will also have new copies made of his own and Wolff s photograph. He was greatly pleased by your despatches. My best greetings to the Mad mchen , Eleanor is at school, otherwise she would write to her. And now, Adio!

Marx-Engels Correspondence 1867

https://www.marxists.org/archive/marx/works/1867/letters/67_06_10.htm

... At the next Congress in Brussels I shall personally deliver a knock-out blow to these Proudhonist jackasses. I have managed the whole thing diplomatically and did not want to come out personally until my book was published and our Association had struck root. I will moreover give them a hiding in the Official Report of the General Council (despite all their efforts, the Parisian babblers could not prevent our re-election). Meanwhile our Association has made great progress. The wretched Star, which wanted to ignore us entirely, has announced in a leading article published yesterday that we are more important than the Peace Congress. Schulze-Delitzsch was not able to prevent his Workers Association in Berlin from joining us. The scoundrels among the English trade unionists, who thought we went too far , now come running to us. In addition to the Courrier fran ais, the Libert of Girardin, the Si cle, the Mode, the Gazette de France, etc, have printed reports on our Congress. Things are moving. And in the next revolution, which is perhaps nearer than it appears, we (that is, you and I) will have this powerful engine in our hands. Compare this with the results of the operations conducted by Mazzini, etc, during the last thirty years! And moreover without any financial means! Considering the intrigues of the Proudhonists in Paris, the Mazzinis in Italy, the jealous Odgers, Cremers and Potters in London, and the Schulze-Delitzschists and Lassalleans in Germany! We can be very well satisfied...

Marx-Engels Correspondence 1867

https://www.marxists.org/archive/marx/works/1867/letters/67_09_11.htm

D abord best thanks for your two letters. It gives me great pleasure to hear from you as often as your time permits you to write. Only you must not count upon strict reciprocity, because, as it is, my time scarcely suffices for the multifarious correspondence I must keep up on all sides. Before I speak about my book, something immediate, or an immediate something. I am afraid that Borkheim, malgre lui, is on the point of doing me a very bad turn he is having his speech at Geneva printed in four languages, French, German, English and Russian. He has in addition decorated it with a baroque and tasteless introduction, overladen with quotations. Between ourselves and in the interests of the Party I must tell you the whole truth. Borkheim is a capable man, and even an homme d' sprit. But when he takes up the pen oh dear! All tact and taste leave him. And the necessary preliminary knowledge, too. He is like the savages, who think they beautify their faces by tattooing them in screaming colours. Banality and screaming buffoonery always trip him up. Almost every phrase of his instinctively puts on cap and bells. If he were not so thoroughly vain, I could have prevented the publication and made it clear to him how lucky he was that they did not understand him at Geneva, but only a few good points in his speech. On the other hand, I owe him my thanks for the part he took in the Vogt affair and he is my personal friend. In his speech, etc, there are some phrases in which he repeats my opinions in a form suitable to the Kladderadatsch. It will be a very fine game for my enemies (Vogt has already hinted in the Neue Z richer Zeitung that I am the secret author of the speech), instead of attacking my book, to make me responsible for Herr Borkheim, his stupidities and personalities. Should something of that sort happen, you must manage through Warnebold, etc, to get into the papers open to you short articles revealing these tactics and, without insulting Borkheim in any way, say outright that only deliberate malice or the most complete lack of any critical faculty could identify such disparate views. The baroque and confused manner in which our opinions are reflected in Borkheim s head (not when he speaks, but when he writes) naturally offers the common press gang a most welcome pretext for taking the offensive and may even give them the opportunity of indirectly injuring my book. Should the press, however, be silent on the matter, which I can scarcely hope, since Borkheim has sent his offspring with all due care to all the newspapers, do not in any way disturb that solemn silence. Were Borkheim not a personal friend, I would publicly disavow him. You understand my false position and, at the same time, my annoyance. One submits to the public a book worked out with painstaking care (and never perhaps has a work of that kind been written in more difficult circumstances) in order to raise the Party as high as possible and to disarm even the vulgar by the manner of presentation, and, at the same time, a Party member in motley coat and cap and bells thrusts himself to your side on the market and provokes rotten apples and eggs which may hit oneself and the Party! I am very satisfait with your manoeuvres against Vogt at Geneva. I am glad that you like my book. As to your questions: Ernest Jones had to speak to Irishmen in Ireland as a Party man; that is, since large-scale landownership there is identical with England s property in Ireland, he had to speak against large-scale landownership. You should never look for principles in the hustings speeches of English politicians, but only for what is expedient for the immediate purpose. Peonage is the advance of money against future labour. These advances then follow the usual course of usury. The worker not only remains a debtor all his life, that is, the forced labourer of the creditor, but the relation is handed down in the family to later generations, which in fact belong to the creditor. The completion of my second volume depends chiefly upon the success of the first. This is necessary if I am to find a publisher in England and without that my miserable material position will remain so difficult and disturbing, that I shall find neither the time nor the peace for rapid completion. These are of course matters which I do not want Herr Meissner to know. It therefore depends now on the skill and the activity of my Party friends in Germany whether the second volume takes a long or short time to appear. Genuine criticism whether from friend or foe can only be expected in the course of time, for such a comprehensive and to some extent difficult work requires time to read through and digest. But immediate success is the result, not of genuine criticism, but, to put it bluntly, of creating a stir, of beating the drum, which also forces the enemy to speak. To start off it is not very important what is said. Above all no time should be lost. I have sent your last letter to Engels, so that he can let you have the necessary hints. He can write better about my book than I can myself. My warmest greetings to your dear wife. In a few days I shall send her a prescription for reading the book. Keep me au fait with everything that happens in Germany in regard to Volume 1. As Paul Stumpf (Mainz) has written me a letter in which he calls Borkheim s speech my speech, and as at the moment I have no time to write to Stumpf, will you please write and explain to him, recommending silence when Borkheim s pamphlet appears. Between ourselves, Stumpf also becomes a nuisance when he takes up the pen.

Marx-Engels Correspondence 1867

https://www.marxists.org/archive/marx/works/1867/letters/67_10_11.htm

You must not write to Borkheim. Besides it would be useless, since the work has already been announced in the publishers circular and Schabelitz has already brought it out. Moreover, Borkheim himself is now in Bordeaux. Such a letter from you would have no other effect but to make Borkheim my enemy. Ce qui est fait, est fait never mind! As I was in a state of great excitement from working at night, I exaggerated the malignity of the v nement at first. In fact je suis puni par ou j'ai pech ! Actually the idea of the scandal which our friend would make among the respectable philistines at Geneva amused me au premier abord. It is true I did not foresee the publishers fruits. Moreover, I should have realised that in working out his plan Borkheim would naturally overstep the prudent limits I suggested in my letter. The only policy to be pursued now is to be silent, so long as our enemies do not speak, and once they speak and want to make me responsible, to make bad jokes about their being compelled to ascribe Borkheim s pranks to me in order not to have to answer my book. Further, in that event Borkheim must be dealt with benevolently, for after all, apart from his literary vanity, he is capable and well meaning, and good as an homme d'action, as long as he does not get the devil in him. You will have received Engels recipe by now. I am in correspondence with Liebknecht and Becker. By success of the book I mean nothing but its rapid sale, because of the effect that would have in England. The Courier Fran ais (the daily paper which arouses the most attention in Paris now) and the Libert in Brussels have published a French translation of my introduction, together with complimentary preambles. A certain Natzmer in New York has offered himself as English translator. Quod non. Liebknecht s speech in Berlin gives me great pleasure. I sent him some instructions from here. Poor Becker s position is so bad that he is on the point of giving up his entire political and literary activity. How one regrets not being able to help in such circumstances! Greetings to your dear wife and my little friend, for whose portrait I still have to thank you.

Marx-Engels Correspondence 1867

https://www.marxists.org/archive/marx/works/1867/letters/67_10_15.htm

... The trial of the Fenians in Manchester is just what one expected it to be. You will have seen what a row our men have made in the Reform League. I did everything I could to provoke this demonstration of English workers for Fenianism. Greetings I used to think the separation of Ireland from England impossible. I now think it inevitable, although after the separation there may come federation. The way the English are going on is shown by the agricultural statistics for this year, published a few days ago. In addition the form of the evictions. The Irish Viceroy, Lord Abicorn (this is roughly the name) [Marx refers to Lord Abercorn, Lord Lieutenant of Ireland. Ed.] has cleared his estate of thousands within recent weeks by compulsory executions. Among the evicted are well-to-do farmers whose improvements and capital investments are confiscated in this fashion! There is no other Enropean country in which foreign rule takes this i direct form of native expropriation. The Russians only confiscate for political reasons; the Prussians in West Prussia buy out.

Letters: Marx-Engels Correspondence 1867

https://www.marxists.org/archive/marx/works/1867/letters/67_11_02-abs.htm

So yesterday morning the Tories, by the hand of Mr. Colcraft, accomplished the final act of separation between England and Ireland. The only thing that the Fenians still lacked were martyrs. They have been provided with these by Derby and G. Hardy. Only the execution of the three [Michael Larkin, William Allen and Michael O'Brien] has made the liberation of Kelly and Deasy the heroic deed as which it will now be sung to every Irish babe in the cradle in Ireland, England and America. The Irish women will do that just as well as the Polish women. To my knowledge, the only time that anybody has been executed for a similar matter in a civilised country was the case of John Brown at Harpers Ferry. The Fenians could not have wished for a better precedent. The Southerners had at least the decency to treat J. Brown as a rebel, whereas here everything is being done to transform a political attempt into a common crime.

Letters: Marx-Engels Correspondence 1867

https://www.marxists.org/archive/marx/works/1867/letters/67_11_24.htm

...If you have read the journals you will have seen that 1) the Memorial of the International Council for the Fenians was sent to Hardy and that 2) the debate on Fenianism was public (last Tuesday week) and reported in the Times. Reporters of the Dublin Irishman and Nation were also present. I came very late (I ran a temperature for about a fortnight and the fever passed only two days ago) and really did not intend to speak, firstly because of my troublesome physical condition, and secondly because of the ticklish situation. Nevertheless Weston, who was in the chair, tried to force me to, so I moved that the meeting be adjourned. This obliged me to speak last Tuesday. As a matter of fact I had prepared for Tuesday last not a speech but the points of a speech. But the Irish reporters failed to come.... After the opening of the meeting I therefore stated I would yield the floor to Fox on account of the belated hour. Actually, owing to the executions that had taken place in the meantime in Manchester, our subject, Fenianism. was liable to inflame the passions to such heat that I (but not the abstract Fox) would have been forced to hurl revolutionary thunderbolts instead of soberly analysing the state of affairs and the movement as I had intended. The Irish reporters therefore, by staying away and delaying the opening of the meeting, did signal service for me. I don't like to get involved with people like Roberts, Stephens, and the rest. Fox's speech was good, for one thing because it was delivered by an Englishman and for another because it concerned only the political and international aspects. For that very reason however he merely skimmed along the surface of things. The resolution he handed up was absurd and inane. I objected to it and had it referred to the Standing Committee. What the English do not yet know is that since 1846 the economic content and therefore also the political aim of English domination in Ireland have entered into an entirely new phase, and that, precisely because of this, the characteristic features of Fenianism are socialistic tendencies (in a negative sense, directed against the appropriation of the soil) and the fact that it is a movement of the lower orders. What can be more ridiculous than to confuse the barbarities of Elizabeth or Cromwell, who wanted to supplant the Irish by English colonists (in the Roman sense), with the present system, which wants to supplant them by sheep, pigs and oxen! The system of 1801-46 (when evictions were exceptional and occurred mainly in Leinster where the land is especially good for cattle raising) with its rackrents and middlemen, collapsed in 1846. The repeal of the Corn Laws, partly the result of or at any rate hastened by the Irish famine, deprived Ireland of its monopoly of supplying corn to England in normal times. Wool and meat became the slogan, hence conversion of tillage into pasture. Hence from then onwards systematic consolidation of farms. The Encumbered Estates Act, which turned a mass of farmer middlemen who had become rich into landlords, hastened th e process. Clearing of the Estates of Ireland is now the only purpose of English rule in Ireland. The stupid English Government in London knows nothing of course of this immense change since 1846. But the Irish know it. From Meagher's Proclamation (1848) down to the election manifesto of Hennessy (Tory and Urquhartite) (1866), the Irish have expressed their awareness of this in the clearest and most forcible manner. The question now is, what advice shall we give to the English workers? In my opinion they must make the repeal of the Union (in short, the affair of 1783, but in a more democratic form and adapted to the conditions of the present time) an article of their pronunziamento . This is the only legal and therefore only possible form of Irish emancipation which can be embodied in the programme of an English party. Experience must show later whether the merely personal union can continue to subsist between the two countries. I half think it can if it takes place in time. What the Irish need is: 1) Self-government and independence from England. 2) An agrarian revolution. With the best intentions in the world the English cannot accomplish this for them, but they can give them the legal means of accomplishing it for themselves. 3) Protective tariffs against England. Between 1783 and 1801 all branches of Irish industry flourished. The Union, by abolishing the protective tariffs established by the Irish Parliament, destroyed all industrial life in Ireland. The bit of linen industry Is no compensation whatever. The Union of 1801 had just the same effect on Irish industry as the measures for the suppression of the Irish woollen industry, etc., taken by the English Parliament under Anne, George II, and others. Once the Irish are independent, necessity will turn them into protectionists, as it did Canada, Australia, etc. Before I present my views in the Central Council (next Tuesday, this time fortunately without reporters), I should be glad if you gave me your opinion in a few lines. Greetings. Yours,

Letters: Marx-Engels Correspondence 1867

https://www.marxists.org/archive/marx/works/1867/letters/67_11_30-abs.htm

Were there six people of your calibre in Germany, the resistance of the philistine mass and the conspiration de silence of the experts and newspaper crowd would have been so far broken down that at least some serious discussion would have begun. Mais il faut attendre! In these words lies the whole secret of Russian policy. I am enclosing a letter (please return it) from a German-Russian worker (a tanner). Engels remarks, quite rightly, that the autodidactic philosophy pursued by workers themselves has made great progress in the case of this tanner in comparison with the cobbler Jakob B hm; also that only German workers are capable of such cerebral work. Borkheim asked me yesterday who had written the article in the Zukunft (he is a subscriber). It must come from one of our people, since you had sent him a copy of it. I said I did not know. Nota bene! One should not put all one s cards on the table. My most cordial thanks to your dear wife for the trouble she took in copying the letter. You should not exploit her so much for surplus labour . Bucher, as, if I am not mistaken, I have already told you, has himself asked me to be the economic correspondent of the Royal Prussian Staatszeitung. So you see that if I wanted to make use of such sources, I could do so without the mediation of a third person. My illness is the old one nothing dangerous, but troublesome. With best greetings to your dear wife and Fr nzchen.

Marx-Engels Correspondence 1867

https://www.marxists.org/archive/marx/works/1867/letters/67_12_07a.htm

In . . . . . a Bastiatite discovers that I have pinched the definition of the magnitude of value of commodities as being the "socially necessary labour-time" required for their production from F. Bastiat, and in bowdlerised form to boot. I could easily put up with this quid pro quo. For if that Bastiatite No. I finds Bastiat's definition of value and my own to be basically identical, Bastiatite No, II declares almost simultaneously in the Leipzig Literarisches Centralblatt of..............:"............" The sum total of Bastiatite No. I added to Bastiatite No. II would be that the whole army of Bastiatites would have forthwith to transfer to my camp and accept wholesale my exposition on capital. One will understand that it is only after much mental strife that I deny myself the pleasure of such an annexation. The definition of value contained in my work Capital, published in 1867, is to be found two decades earlier in my work attacking Proudhon: Misire de la Philosophie, Paris 1847 (p. 49 seqq). Bastiat's words of wisdom on value did not see the light of day until some years later. I could not therefore have copied from Bastiat, though Bastiat could well have copied from me. However, in fact Bastiat gives absolutely no analysis of value. He only dilates upon empty notions as consoling proof that "the world abounds in great and excellent daily services". It is well known that the German Bastiatites are all national liberals. I shall therefore do them also a "great and excellent service" by pointing out the specifically Prussian origin of Bastiat's store of wisdom. Old Schmalz was in fact a councillor to the Prussian government, if I am not mistaken, even a Prussian privy councillor. In addition he was a Demagogue hunter. In 1818 in Berlin this old Schmalz published a Handbuch der Staatswirthschaftslehre, The French edition of his handbook appeared in 1826 in Paris under the title of Economie politique. The translator, Henri Jouffroy, appeared on the title as "conseiller au service de Prusse". In the following quotation one will find Bastiat's notion of value in its essentials, not only as far as its content is concerned but even as regards its wording:

Economic Manuscripts: Reviews of Volume One of Capital

https://www.marxists.org/archive/marx/works/1867/reviews-capital/bastiat.htm

Whatever one may think of the tendency of the book before us, we believe we may say that it is one of those achievements which do honour to the German spirit. It is indicative that while the author is a Prussian, he is one of the Rhenish Prussians, who until recently liked to describe themselves as "compulsory Prussians" and, moreover, a Prussian who has spent the last few decades far from Prussia, in exile. Prussia itself has long ceased to be a country of any scientific initiative whatsoever, and especially in historical, political or social subjects such an initiative would be impossible there. One could say of it that it represents the Russian rather than the German spirit. As for the book itself, one must distinguish clearly between two very disparate aspects of it: between, firstly its solid, positive expositions and, secondly, the tendential conclusions the author draws from them. The first are to a great extent a direct enrichment of science. The author there treats economic relations with a quite new, materialistic, natural-historic method. In this way he represents money and very expertly traces in detail the various successive forms of industrial production: co-operation, the division of labour and with it manufacture in the narrower sense, and lastly machinery, large-scale industry and the corresponding social combinations and relations which naturally grow one from the other. As for the author's tendencies, we can here, too, discern again a two-fold trend. In so far as he endeavours to show that present-day society, economically considered, is pregnant with another, higher form of society, he merely strives to present as law in the social sphere the same process which Darwin traced in natural history, a process of gradual evolution. Up to now such a gradual transformation has indeed taken place in social relations from antiquity through the Middle Ages to the present; and as far as we know it has never been seriously claimed from any scientific quarters that Adam Smith and Ricardo have said the last word on the future development of present-day society. On the contrary, liberal teaching on progress also includes progress in the social sphere, and it is one of the arrogant paradoxes of so-called socialists to pretend that they alone have a lien on social progress. By contrast to the run-of-the-mill socialists we must recognize it as a merit of Marx that he traces progress where the extremely one-sided development of present-day conditions is accompanied by directly abhorrent consequences, as everywhere in the presentation of the great extremes of wealth and poverty resulting from the factory system as a whole, etc. Just by this critical conception of the subject the author has brought forward--certainly against his will--the strongest arguments against all socialism by the book. It is quite a different matter with the other tendency, the author's subjective conclusions, with the manner in which he represents to himself and others the ultimate result of the present course of social developments. These have nothing to do with what we have called the positive part of the book; nay space permitted we could perhaps show that his subjective whims are refuted by his own objective exposition. If Lassalle's entire socialism consisted in abusing the capitalists and flattering the Prussian rural squires, here we find the diametrical opposite. Herr Marx explicitly proves the historical necessity of the capitalist mode of production, as he calls the present social phase, and equally the superfluous nature of the merely consuming land-holding squirearchy. If Lassalle had big ideas about Bismarck's fitness to introduce the socialist Millennium, Herr Marx refutes his wayward pupil loudly enough. He not only explicitly declares that he will have nothing to do with any "Royal Prussian government socialism", he says straight out on p. 762 ff that the system now prevailing in France and Prussia would shortly bring about the rule of the Russian knout over Europe if it were not stopped in time. Finally, we remark that above we have only been able to consider the main features of this big volume; in detail there is still much that could be said about it, but here we must pass it by. For this purpose there exist enough specialist journals, which will doubtless enter into this most remarkable phenomenon.

Economic Manuscripts: Reviews of Volume One of Capital

https://www.marxists.org/archive/marx/works/1867/reviews-capital/beobachter.htm

As long as there have been capitalists and workers on earth no book has appeared which is of as much importance for the workers as the one before us. The relation between capital and labour, the axis on which our entire present system of society turns, is here treated scientifically for the first time, and at that with a thoroughness and acuity such as was possible only for a German. Valuable as the writings of an Owen, Saint-Simon or Fourier are and will remain--it was reserved for a German first to reach the height from which the whole field of modern social relations can be seen clearly and in full view just as the lower mountain scenery is seen by an observer standing on the top-most peak. Political economy up to now has taught us that labour is the source of all wealth and the measure of all values, so that two objects whose production has cost the same labour time possess the same value and must also be exchanged for each other, since on the average only equal values are exchangeable for one another. At the same time, however, it teaches that there exists a kind of stored-up labour, which it calls capital; that this capital, owing to the auxiliary sources contained in it, raises the productivity of living labour a hundred and a thousandfold, and in return claims a certain compensation which is termed profit or gain. As we all know, this occurs in reality in such a way that the profits of stored-up, dead labour become ever more massive, the capitals of the capitalists become ever more colossal, while the wages of living labour become ever smaller and the mass of the workers living solely on wages becomes ever more numerous and poverty-stricken. How is this contradiction to be solved? How can there remain a profit for the capitalist if the worker receives in compensation the full value of the labour he adds to his product? Yet this ought to be the case, since only equal values are exchanged. On the other hand, how can equal values be exchanged, how can the worker receive the full value of his product, if, as is admitted by many economists, this product is divided between him and the capitalist? Political economy up till now has been helpless in the face of this contradiction, and writes or stutters embarrassed meaningless phrases. Even the previous socialist critics of political economy have not been able to do more than to emphasise the contradiction; no one resolved it, until now at last Marx has traced the process by which this profit arises right to its birthplace and has thereby made everything clear. In tracing the development of capital, Marx starts out from the simple, notoriously obvious fact that the capitalists increase the value of their capital through exchange: they buy commodities for their money and afterwards sell them for more money than they cost them. For example, a capitalist buys cotton for 1,000 talers and resells it for 1,100, thus "earning" 100 talers. This excess of 100 talers over the original capital Marx calls surplus-value. Where does this surplus-value come from? According to the economists' assumption, only equal values are exchanged and in the sphere of abstract theory this, of course, is correct. Hence the purchase of cotton and its resale can just as little yield surplus-value as the exchange of a silver taler for thirty silver groschen and the re-exchange of the small coins for a silver taler, a process by which one becomes neither richer nor poorer. But surplus-value can just as little arise from sellers selling commodities above their value, or purchasers buying them below their value, because each one is in turn buyer and seller and things would therefore again balance. Just as little can it arise from buyers and sellers reciprocally overreaching each other, for this would create no new or surplus-value, but only divide the existing capital differently among the capitalists. In spite of the fact that the capitalist buys the commodities at their value and sells them at their value, he gets more value out than he puts in. How does this happen? The capitalist finds on the commodity market under present social conditions a commodity which has the peculiar property that its use is a source of new value, is a creation of new value, and this commodity is labour-power. What is the value of labour-power? The value of every commodity is measured by the labour required for its production. Labour-power exists in the form of the living worker who requires a definite amount of means of subsistence for his existence as well as for the maintenance of his family, which ensures the continuance of labour-power also after his death. The labour-time necessary for producing these means of subsistence represents, therefore, the value of the labour-power. The capitalist pays for it weekly and purchases thereby the use of one week's labour of the worker. So far messieurs the economists will be pretty well in agreement with us as to the value of labour-power. The capitalist now sets his worker to work. In a certain period of time the worker will have performed as much labour as was represented by his weekly wages. Supposing that the weekly wages of a worker represent three workdays, then, if the worker begins on Monday, he has by Wednesday evening replaced to the capitalist the full value of the wages paid. But does he then stop working? Not at all. The capitalist has bought his week's labour and the worker must go on working during the last three days of the week too. This surplus-labour of the worker, over and above the time necessary to replace his wages, is the source of surplus-value, of profit, of the steadily growing increase of capital. Do not say it is an arbitrary assumption that the worker works off in three days the wages he has received, and works the remaining three days for the capitalist. Whether he takes exactly three days to replace his wages, or two or four, is to be sure quite immaterial here and hence varies according to circumstances; the main point is that the capitalist, besides the labour he pays for, also extracts labour that he does not pay for, and this is no arbitrary assumption, for the day the capitalist were to extract from the worker in the long run only as much labour as he paid him in wages, on that day he would shut down his workshop, since indeed his whole profit would come to nought. Here we have the solution of all those contradictions. The origin of surplus-value (of which the capitalists' profit forms an important part) is now quite clear and natural. The value of the labour-power is paid for, but this value is far smaller than that which the capitalist manages to extract from the labour-power, and it is precisely the difference, the unpaid labour, that constitutes the share of the capitalist, or more accurately, of the capitalist class. For even the profit that the cotton dealer made on his cotton in the above example must consist of unpaid labour, if cotton prices did not rise. The trader must have sold [it] to a cotton manufacturer, who is able to extract a profit for himself from his product besides the 100 talers, and therefore shares with him the unpaid labour he has pocketed. In general it is this unpaid labour which maintains all the non-working members of society. The state and municipal taxes, as far as they affect the capitalist class, as also the rent of the landowners, etc., are paid from it. On it rests the whole existing social system. It would, however, be absurd to assume that unpaid labour arose only under present conditions where production is carried on by capitalists on the one hand and wage-workers on the other. On the contrary, the oppressed class at all times has had to perform unpaid labour. During the whole long period when slavery was the prevailing form of the organisation of labour, the slaves had to perform much more labour than was returned to them in the form of means of subsistence. The same was the case under the rule of serfdom and right up to the abolition of peasant corvee labour; here in fact the difference stands out palpably between the time during which the peasant works for his own maintenance and the surplus-labour for the feudal lord, precisely because the latter is carried out separately from the former. The form has now been changed, but the substance remains and as long as "a part of society possesses the monopoly of the means of production, the labourer, free or not free must add to the working-time necessary for his own maintenance an extra working-time in order to produce the means of subsistence for the owners of the means of production" (Marx, p. 202). [Demokratisches Wochenblatt, No. 13, March 28, 1868] In the previous article we saw that every worker employed by a capitalist performs two kinds of labour: during one part of his working-time he replaces the wages advanced to him by the capitalist, and this part of his labour Marx terms the necessary labour. But afterwards he has to go on working and during that time he produces surplus-value for the capitalist, an important part of which constitutes profit. That part of the labour is called surplus-labour. Let its assume that the worker works three days of the week to replace his wages and three days to produce surplus-value for the capitalist. In other words, it means that, with a twelve-hour working day, he works six hours daily for his wages and six hours for the production of surplus-value. One can get only six days out of the week, and even by including Sunday only seven at the most, but one can extract six, eight, ten, twelve, fifteen or even more hours of work out of every single day. The worker sells the capitalist a working day for his day's wages. But, what is a working day? Eight hours or eighteen? It is in the capitalist's interest to make the working day as long as possible. The longer it is, the more surplus-value it produces. The worker correctly feels that every hour of labour which he performs over and above the replacement of his wages is unjustly taken from him; he learns from bitter personal experience what it means to work excessive hours. The capitalist fights for his profit, the worker for his health, for a few hours of daily rest, to be able to engage in other human activities as well, besides working, sleeping and eating. It may be remarked in passing that it does not depend at all upon the good will of the individual capitalists whether they desire to embark on this struggle or not, since competition compels even the most philanthropic among them to join his colleagues and to fix working hours to be as long as theirs. The struggle for the fixing of the working day has lasted from the first appearance of free workers in the arena of history down to the present day. In various trades various traditional working days prevail; but in reality they are seldom observed. Only where the law fixes the working day and supervises its observance can one really say that there exists a normal working day. And up to now this is the case virtually solely in the factory districts of England. Here the ten-hour working day (ten and a half hours on five days, seven and a half hours on Saturday) has been fixed for all women and for youths of thirteen to eighteen, and since the men cannot work without them, they also come under the ten-hour working day. This law has been won by English factory workers by years of endurance, by the most persistent, stubborn struggle with the factory owners, by freedom of the press, the right of association and assembly, as well as by adroit utilisation of the divisions in the ruling class itself. It has become the palladium of the English workers, it has gradually been extended to all important branches of industry and last year to almost all trades, at least to all those employing women and children. The present work contains most exhaustive material on the history of this legislative regulation of the working day in England. The next North German Imperial Diet" will also have factory regulations to discuss and in connection therewith the regulation of factory labour. We expect that none of the deputies that have been elected by German workers will proceed to discuss this bill without previously making themselves thoroughly conversant with Marx's book. There is much to be achieved here. The divisions within the ruling classes are more favourable to the workers than they ever were in England, because universal suffrage compels the ruling classes to court the favour of the workers. Under these circumstances, four or five representatives of the proletariat are a power, if they know how to use their position, if above all they know what is at issue, which the bourgeois do not know. And for this purpose, Marx's book gives them all the material in ready form. We will pass over a number of further excellent investigations of more theoretical interest and will pause only at the final chapter which deals with the accumulation or amassing of capital. Here it is first shown that the capitalist mode of production, i.e. that inaugurated by capitalists on the one hand and wage-workers on the other, not only continually regenerates capital for the capitalist, but at the same time also continually produces the poverty of the workers; thereby it is provided for a constant regeneration of, on one hand, capitalists who are the owners of all means of subsistence, all raw materials and instruments of labour, and on the other hand, the great mass of the workers, who are quantum of the means of subsistence which at best just suffices to keep them able-bodied and to bring up a new generation of able-bodied proletarians. But capital does not merely reproduce itself: it is continually increased and multiplied--and thereby its power over the propertyless class of workers. And just as it itself is reproduced on an ever greater scale, so the modern capitalist mode of production reproduces the class of propertyless workers also on an ever greater scale, in even greater numbers. "...Accumulation of capital reproduces the capital-relation on a progressive scale, more capitalists or larger capitalists at this pole, more wage-workers at that.... Accumulation of capital is, therefore, increase of the proletariat" (p 600). Since, however, owing to the progress of machinery, owing to improved agriculture, etc., fewer and fewer workers are necessary in order to produce the same quantity of products, since this perfecting, that is, this making the workers superfluous, is more rapid than even the growth of capital, what becomes of this ever-increasing number of workers? They form an industrial reserve army, which, when business is bad or middling, is paid below the value of its labour and is irregularly employed or is left to be cared for by public charity, but which is indispensable to the capitalist class at times when business is especially lively, as is palpably evident in England--but which under all circumstances serves to break the power of resistance of the regularly employed workers and to keep their wages down. "The greater the social wealth ... the greater is the relative surplus-population, or industrial-reserve-army. But the greater this reserve-army in proportion to the active (regularly employed) labour-army, the greater is the mass of a consolidated (permanent) surplus-population, or strata of workers, whose misery is in inverse ratio to its torment of labour. The more extensive, finally, the lazarus-layers of the working class, and the industrial reserve-army, the greater is official pauperism. This is the absolute general law of capitalist accumulation" (p. 631) These, strictly scientifically-proved--and the official economists are taking great care not to make even an attempt at a refutation--are some of the chief laws of the modern, capitalist, social system. But does this tell the whole story? By no means. Marx sharply stresses the bad sides of capitalist production but with equal emphasis clearly proves that this social form was necessary to develop the productive forces of society to a level which will make possible an equal development worthy of human beings for all members of society. All earlier forms of society were too poor for this. Capitalist production is the first to create the wealth and the productive forces necessary for this, but at the same time it also creates, in the numerous and oppressed workers, the social class which is compelled more and more to claim the utilisation of this wealth and these productive forces for the whole of society--instead of their being utilised, as they are today, for a monopolist class.

Economic Manuscripts: Reviews of Volume One of Capital

https://www.marxists.org/archive/marx/works/1867/reviews-capital/dwochenblatt.htm

This book will disappoint many a reader. In certain circles its appearance had been anticipated for years. Here the true secret socialist teaching and panacea was at last to be revealed, and many may have imagined, when at last they saw it announced, that they would now learn what the communist Millennium would actually be like. Anyone who had keenly awaited this pleasure made a great mistake. Indeed, he learns here how things should not be, and this he is told in detail with very outspoken bluntness on 784 pages, and he who has eyes to see will find here the demand for a social revolution clearly enough presented. Here it is not a question of workers' associations with state capital, as with Lassalle of old; here it is a question of abolishing capital altogether. Marx is and remains the same revolutionary he has always been, and in a scientific work he would assuredly be the last to hide his views in this respect. But as for what is going to happen after the social revolution---on that he gives us only very dark hints. We learn that large-scale industry "matures the contradictions and antagonisms of the capitalist form of the production process and thereby at the same time the elements for the formation of a new society and the elements for exploding the old one"," and further that the abolition of the capitalist form of production "restores individual property but on the basis of the acquisitions of the capitalist era: i.e., of co-operation of freeworkers and the common ownership of the land and the means of production produced by labour itself". With this we must rest content, and to judge by the present volume the promised second and third will also tell us little on this interesting point. For the present we must be contented with the "Critique of Political Economy", and there we get into a very wide field indeed. Here, of course, we cannot enter into the scientific consideration of the detailed conclusions presented in this voluminous book, we cannot even briefly repeat the main propositions put forward there. The more or less well-known principles of the socialist theory can all be reduced to the fact that in modern society the worker does not obtain the full value of the product of his labour. This proposition is also the red thread which runs through the present work, but it is made more acutely precise followed more consistently in all its implications, and knitted more closely into the main propositions of political economy or more directly placed in opposition to them than hitherto. This part of the work is distinguished to great advantage from all similar earlier writings we know by its attempt to be strictly scientific, and we see that the author takes seriously not only his own theory but science as a whole. We found particularly striking in this book the author's conception of the propositions of political economy not, as is usual, as eternally valid truths but as the results of certain historical developments. While even the natural sciences are being transformed more and more into historical sciences--compare Laplace's astronomical theory, the whole of geology and the works of Darwin-- political economy has hitherto been just as abstract and universally valid a science as mathematics. Whatever may be the fate of the remaining propositions of this book, we regard it as a lasting merit of Marx to have put an end to this narrow-minded concept. After this work it will no longer be possible to treat slave labour, serf labour and free wage labour, for example, as economically alike, or to apply laws which are valid for modern large-scale industry, conditioned by free competition, without further ado to the conditions of antiquity or the guilds of the Middle Ages, or, when these modern laws do not fit ancient conditions, simply to declare the ancient conditions as heretical. The Germans of all nations have the greatest, nay, even a unique historical sense, and thus it is quite natural that it is again a German who traces the historical connections also in the sphere of political economy.

Economic Manuscripts: Reviews of Volume One of Capital

https://www.marxists.org/archive/marx/works/1867/reviews-capital/dzeitung.htm

Fifty sheets of learned treatise to prove to us that the entire capital of our bankers, merchants, manufacturers and large landowners is nothing but the accumulated and unpaid labour of the working class! We recall that in 1849 the Neue Rheinische Zeitung raised the demand for a "Silesian milliard" in the name of the Silesian peasants. A thousand million talers, it was claimed, were illegally withdrawn from the Silesian peasants alone, to flow into the pockets of the large landowners when serfdom and feudal services were abolished, and this amount was demanded back. But the gentlemen of the Neue Rheinische Zeitung of old are like the late Sibyl with her books: the less they are offered, the more they ask. What are a thousand million talers compared with the colossal amount now demanded back in the name of the working class as a whole--for that is, surely, how we must understand it! If the entire accumulated capital of the propertied classes is nothing but "unpaid labour", it would appear to follow directly that this labour is to be paid later, that is, the entire capital in question is to be transferred to labour. That would indeed raise the question who in particular would be entitled to receive it. But joking apart! However radically socialist the present book is in its approach, however blunt and unsparing on all hands its treatment of people who as a rule are regarded as authorities, we must confess that it is a most scholarly work which has a claim to be regarded as most strictly scientific. The press has already frequently mentioned Marx's intention to sum up the results of his many years' studies in a critique of the whole of political economy to date and thereby to provide the scientific basis for socialist aspirations which neither Fourier nor Proudhon nor even Lassalle had been able to do. This work has already long since and frequently been announced in the press. In 1859 a "first part" appeared at Duncker's in Berlin, which, however, dealt only with matters without immediate practical interest and which therefore caused hardly a stir. The following parts did not appear and the new socialist science seemed destined not to survive its birthpangs. How many jokes were not made about this new revelation which was announced so often and yet never once seemed actually about to appear in public! Well and good, here is at last the "first volume"--fifty sheets as we have said--and nobody can maintain that it does not contain enough and more than enough that is new, bold and audacious and that this is not presented in thoroughly scientific form. This time Marx appeals with his unusual propositions not to the masses but to the men of science. It is up to them to defend their economic theories which are here attacked at their foundations, and give proof that capital is indeed accumulated labour but not accumulated unpaid labour. Lassalle was a practical agitator, and it could suffice to oppose him in practical agitation, in the daily press and at meetings. But here we have a systematic scientific theory, and here the daily press cannot help to decide, here only science can speak the last word. It is to be hoped that people like Roscher, Rau, Max Wirth, etc., will seize the opportunity to defend the up till now generally recognised political economy against this new and certainly not contemptible attack. The social-democratic seed has sprouted among the younger generation and the working population of many a place--through this book it will in any case find plenty of new nourishment.

Economic Manuscripts: Reviews of Volume One of Capital

https://www.marxists.org/archive/marx/works/1867/reviews-capital/ezeitung.htm

Mr. Thomas Tooke, in his inquiries on currency, points out the fact that money, in its function as capital, undergoes a reflux to its point of issue, while this is not the case with money performing the function of mere currency. This distinction (which, however, had been established long before by Sir James Steuart) is used by Mr. Tooke merely as a link in his argumentation against the Currency men and their assertions as to the influence of the issue of paper-money on the prices of commodities. Our author, on the contrary, makes this distinction the starting point of his inquiry into the nature of capital itself, and especially as regards the question: How is money, this independent form of existence of value, converted into capital? All sorts of businessmen--says Turgot--have this in common, that they buy in order to sell; their purchases are an advance which afterwards is returned to them. To buy in order to sell, such is indeed the transaction in which money functions as capital, and which necessitates its return to its point of issue, in contradistinction to selling in order to buy, in which process money may function as currency only. Thus it is seen that the different order in which the acts of selling and buying follow upon each other, impress upon money two different motions of circulation. In order to illustrate these two processes, our author gives the following formulae: To sell in order to buy: a commodity C is exchanged for money M, which is again exchanged for another commodity C; or; C M C. To buy in order to sell: money is exchanged for a commodity and this is again exchanged for money: M C M. The formula C M C represents the simple circulation of commodities, in which money functions as means of circulation, as currency. This formula is analysed in the first chapter of our book which contains a new and very simple theory of value and of money, extremely interesting scientifically, but which we here leave out of consideration as, on the whole, immaterial to what we consider the vital points of Mr. Marx's views on capital. The formula M C M, on the other hand, represents that form of circulation in which money resolves itself into capital. The process of buying in order to sell: M C M, may evidently be resolved into M M; it is an indirect exchange of money against money. Suppose I buy cotton for 1,000.--and sell it for 1,100.--; then, in fine, I have exchanged 1,000 for 1,100, money for money. Now, if this process were always to result in returning to me the same sum of money which I had advanced, it would be absurd. But, whether the merchant, who [had] advanced 1,000, realises 1,100, or 1,000, or even 900 only, his money has gone through a phase essentially different from that of the formula C M C; which formula means, to sell in order to buy, to sell what you do not want in order to be able to buy that what you do want. Let me compare the two formulae. Each process is composed of two phases or acts, and these two acts are identical in both formulae; but there is a great difference between the two processes themselves. In C M C, money is merely the mediator; the Commodity, useful value, forms the starting and the concluding point. In M C M, the commodity is the intermediate link, while money is the beginning and the end. In C M C the money is spent once for all; in M C M it is merely advanced, with the intention to recover it; it returns to its point of issue, and in this we have a first palpable difference between the circulation of money as currency and of money as capital. In the process of selling in order to buy, C M C, the money can return to its point of issue on the condition only that the whole process be repeated, that a fresh quantity of commodity be sold. The reflux, therefore, is independent of the process itself. But in M C M, this reflux is a necessity and intended from the beginning; if it does not take place, there is a hitch somewhere and the process remains incomplete. To sell in order to buy, has for its object the acquisition of useful value; to buy in order to sell, that of exchangeable value. In the formula C M C, the two extremes are, economically speaking, identical. They are both commodities; they are, moreover, of the same quantitative value, for the whole theory of value implies the supposition that, normally, equivalents only are exchanged. At the same time, these two extremes C C are two useful values different in quality, and they are exchanged on that very account.--In the process of M C M, the whole operation, at the first glance, appears meaningless. To exchange 100 for 100, and that by a roundabout process, appears absurd. A sum of money can differ from another sum of money by its quantity only. M C M, therefore, can only have any meaning by the quantitative difference of its extremes. There must be more money drawn out from circulation than had been thrown into it. The cotton bought for 1,000 is sold for 1,100 = 1,000 + 100; the formula representing the process, thus, changes to M C M, in which M'= + DM, M plus an increment. This DM, this increment, Mr. Marx calls surplus-value. The value originally advanced not only maintains itself, it also adds to itself an increment, it begets value, and it is this process which changes money into capital. In the form of circulation C M C, the extremes may, certainly, also differ in value, but such a circumstance would here be perfectly indifferent; the formula does not become absurd if both extremes are equivalents. On the contrary, it is a condition of its normal character that they should be so. The repetition of C M C is limited by circumstances entirely extraneous to the process of exchange itself: by the requirements of consumption. But in M C M, beginning and end are identical as to quality, and by that very fact the motion is, or may be, perpetual. No doubt, M + DM is different in quantity from M; but still it is a mere limited sum of money. If you spend it, it will cease to be capital; if you withdraw it from circulation, it will be a stationary hoard. The inducement once admitted for the process of making value beget value, this inducement exists as much for M' as it existed for M; the motion of capital becomes perpetual and endless, because at the close of each separate transaction its end is no more attained than before. The performance of this endless process transforms the owner of money into a capitalist. Apparently, the formula M C M is applicable to merchants' capital alone. But the manufacturer's capital, too, is money which is exchanged for commodities and re-exchanged for more money. No doubt, in this case, a number of operations intervene between purchase and sale, operations which are performed outside of the sphere of mere circulation; but they do not change anything in the nature of the process. On the other hand, we see the same process in its most abbreviated form in capital lent on interest. Here the formula dwindles down to M M', value which is, so to say, greater than itself. But whence does this increment of M, this surplus-value arise? Our previous inquiries into the nature of commodities, of value, of money, and of circulation itself, not only leave it unexplained, but appear even to exclude any form of circulation which results in such a thing as a surplus-value. The whole difference between the circulation of commodities (C M C) and the circulation of money as capital (M C M) appears to consist in a simple reversion of the process; how should this reversion be capable of producing such a strange result? Moreover: this reversion exists for one only of the three parties to the process. I, as a capitalist, buy a commodity from A, and sell it again to B. A and B appear as mere sellers and buyers of commodities. I myself appear, in buying from A, merely as an owner of money, and in selling to B, as owner of a commodity; but in neither transaction do I appear as a capitalist, as the representative of something which is more than either money or commodity. For A the transaction began with a sale, for B it began with a purchase. If from my point of view there is a reversion of the formula C M C, there is none from theirs. Besides, there is nothing to prevent A from selling his commodity to B without my intervention, and then there would be no occasion for any surplus-value. Suppose A and B buy their respective requirements from each other directly. As far as useful value is concerned they may both be gainers. A may even be able to produce more of his particular commodity than B could produce in the same time, and vice versa, in which case they both would gain. But it is different with regard to value in exchange. In this latter case equal quantities of value are exchanged, whether money serves as the medium or not. Considered in the abstract, that is to say excluding all circumstances which are not deducible from the inherent laws of the simple circulation of commodities, there is in this simple circulation, besides the fact of one useful value being replaced by another, a mere change of form of the commodity. The same value in exchange, the same quantity of social labour fixed in all object, remains in the hands of the owner of the commodity, be it in the shape of this commodity itself, or in that of the money it is sold for, or in that of the second commodity bought for the money. This change of form does not in any way involve any change in the quantity of the value, as little as the exchange of a five pound note for five sovereigns. Inasmuch as there is merely a change in the form of the value in exchange, there must be exchange of equivalents, at least whenever the process takes place in its purity and under normal conditions. Commodities may he sold at prices above or below their values, but if they are, the law of the exchange of commodities is always violated. In its pure and normal form, therefore, the exchange of commodities is not a means of creating surplus-value. Hence arises the error of all economists who attempt to derive surplus-value from the exchange of commodities, such as Condillac. We will, however, suppose that the process does not take place under normal conditions, and that non-equivalents are exchanged. Let every seller, for instance, sell his commodity 10 per cent above its value. Caeteris paribus, everybody loses again as a buyer what he had gained as a seller. It would be exactly the same as if the value of money had fallen 10 per cent. The reverse, with the same effect, would take place if all buyers bought their goods 10 per cent below their value. We do not get an inch nearer to a solution by supposing that every owner of commodities sells them above their value in his quality as a producer, and buys them above their value in his quality as a consumer. The consistent representatives of the delusion that surplus-value arises from a nominal addition to the price of commodities presuppose always the existence of a class which buys without ever selling, which consumes without producing. At this stage of our inquiry, the existence of such a class is as yet inexplicable. But admit it. Whence does that class receive the money with which it keeps buying? Evidently from the producers of commodities--on the strength of no matter what legal or compulsory titles, without exchange. To sell, to such a class, commodities above their value, means nothing but to recover a portion of the money which had been given away gratuitously. Thus the cities of Asia Minor, while paying a tribute to the Romans, recovered part of this money by cheating the Romans in trade; but after all, these cities were the greatest losers of the two. This, then, is no method of creating surplus-value. Let us suppose the case of cheating. A sells to B wine of the value of 40 for corn of the value of 50. A has gained 10 and B has lost 10, but betwixt them, they have only 90 just as before. Value has been transferred but not created. The whole capitalist class of a country cannot, by cheating one another, increase their collective wealth. Therefore: If equivalents are exchanged, there arises no surplus-value, and if non-equivalents are exchanged, there arises no surplus-value either. The circulation of commodities creates no new value. This is the reason why the two oldest and most popular forms of capital, commercial capital and interest-bearing capital, are here left entirely out of consideration. To explain the surplus-value appropriated by these two forms of capital otherwise than as the result of mere cheating, a number of intermediate links are required which are still wanting at this stage of the inquiry. Later on we shall see that they both are secondary forms only and shall also trace the cause why both appear in history long before modern capital. Surplus-value, then, cannot originate from the circulation of commodities. But can it originate outside of it? Outside of it, the owner of a commodity is simply the producer of that commodity, the value of which is established by the amount of his labour contained in it and measured by a fixed social law. This value is expressed in money of account, say, in a price of 10. But this price of 10 is not at the same time a price of 11; this labour contained in the commodity creates value, but no value which begets new value; it can add new value to existing value, but merely by adding new labour. How, then, should the owner of a commodity, outside the sphere of circulation, without coming into contact with other owners of commodities--how should he be able to produce surplus-value, or in other words, to change commodities or money into capital? Capital, then, cannot originate from the circulation of commodities, and no more can it not originate from it. It has to find its source in it, and yet not in it. The change of money into capital has to be explained on the basis of the laws inherent to the exchange of commodities, the exchange of equivalents forming the starting-point. Our owner of money, as yet the mere chrysalis of a capitalist, has to buy his commodities at their value, to sell them at their value, and yet to extract more money from this process than he had invested in it. His development into the capitalist butterfly has to take place within the sphere of the circulation of commodities, and yet not within it. These are the terms of the problem. Hic Rhodus, hic salta [144-45]. And now for the solution: The change in the value of the money, which is to be transformed into capital, cannot take place in that money itself; for, as means of purchase and means of payment, it merely realises the price of the commodity which it buys or pays for, while if it remained in its money-form, without being exchanged, it could never change its value at all. No more can the change arise from the second act of the process, the re-sale of the commodity, because this merely changes the commodity from its natural form into the form of money. The change must take place with the commodity which is bought in the first act M C; but it cannot take place in its value in exchange, because we exchange equivalents; the commodity is bought at its value. The change can only arise from its value in use, that is from the use which is made of it. In order to extract value in exchange from the use of a commodity, our owner of money must have the good luck to discover, within the sphere of circulation, in the market, a commodity, the useful value of which is endowed with the peculiar quality of being a source of exchangeable value, the using-up of which is the realisation of labour and therefore the creation of value. And the owner of money finds, in the market, such a specific commodity. the power to work, the labour-power. By power to work, or labour-power, we understand the sum total of the physical and mental faculties which exist in the living person of a human being and which he puts into motion when he produces useful values. But in order to enable the owner of money to meet the labour-power as a commodity in the market, several conditions have to be fulfilled. In itself, the exchange of commodities does not include any other relations of dependence except such as arise from its own nature. On this supposition, labour-power can appear as a commodity, in the market, so far only as it is offered for sale, or sold, by its own owner, the person whose labour-power it is. In order to enable its owner to sell it as a commodity, he must be able to dispose of it, he must be the free proprietor of his labour-power, of his person. He and the owner of money meet in the market, and transact business, as each other's peers, as free and independent owners of commodities, so far different only, that the one is the buyer and the other the seller. This relation of equality before the law must continue; the owner of the labour-power can, therefore, sell it for a limited time only. If he were to sell it in a lump, once for all, he would sell himself, he would from a free man change into a slave, from an owner of a commodity into a commodity... The second essential condition to enable the money-owner to meet labour-power as a commodity in the market, is this: that the owner of the labour-power, instead of selling commodities in which his labour has been embodied, be compelled to sell this, his labour-power itself, such as it exists in his own personality. No producer can sell commodities different from his own labour-power, unless possessed of means of production, raw materials, instruments of labour, etc. He can make no boots without leather. Moreover, he requires the means of subsistence. Nobody can feed upon future products, upon useful values the production of which he has not yet completed; as on the first day of his appearance on the stage of the world, man is compelled to consume before and while he produces. If his products are produced as commodities, they must be sold after production, and can satisfy his wants after the sale only. The time of production is lengthened by the time required for sale. The change of money into capital, thus, requires that the money-owner meet in the market the free labourer, free in that double sense, that he, as a free person, can dispose of his labour-power; and that, on the other hand, he have no other commodities to sell; that he be entirely unencumbered with, perfectly free from, all the things necessary for putting his labour-power into action. The question why this free labourer meets him in the market, has no interest for the money-owner. For him, the labour-market is only one of the various departments of the general market for commodities. And, for the moment, it has no interest for us either. We stick to the fact theoretically, as he sticks to it practically. One thing, however, is clear. It is not nature which produces, on the one hand, owners of money and of commodities, and on the other, owners of nothing but their own labour-power. This relation does not belong to natural history; nor is it a social relation common to all historical periods. It is evidently the result of a long historical process, the product of a number of economical revolutions, of the destruction of a whole series of older [...] strata of social production. The economical categories which we have previously analysed bear in the same manner the impress of their historical origin. The existence of a product in the form of a commodity involves certain historical conditions. In order to become a commodity, the product must not be produced as the immediate means of subsistence of the producer. Now, if we had inquired: How and under what circumstances do all, or at least the great majority of products adopt the form of commodities?--we should have found that this occurs exclusively on the basis of a specific system of production, the capitalistic mode of production. But this inquiry was entirely foreign to the analysis of commodity. The production and circulation of commodities may take place, while the overwhelming mass of products--produced for immediate domestic self-use--is never changed into commodities; while, thus, the process of social production, in all its breadth and depth, is, as yet, far from being ruled by value in exchange...or, in analysing money, we find that the existence of money presupposes a certain development of the circulation of commodities. The peculiar forms of existence of money, such as the form of simple equivalent, or of means of circulation, means of payment, hoard, or universal money, as either one or the other may prevail, point to very different stages of the process of social production. Still, experience shows that a relatively crude state of the circulation of commodities suffices to produce all these forms. But with capital it is quite different. The historical conditions necessary for its existence are far from being created simultaneously with the mere circulation of commodities and money. Capital can originate when the owner of the means of production and subsistence meets, in the market, the free labourer offering for sale his labour-power, and this one condition implies ages of historical development Thus capital at once heralds itself as a specific epoch of the process of social production. [145-149] We have now to examine this peculiar commodity, the labour-power. It has a value in exchange, as all other commodities; this value is determined in the same way as that of all other commodities: by the time of labour required for its production, which includes reproduction. The value of labour-power is the value of the means of subsistence necessary for the maintenance of its owner in a normal state of fitness for work. These means of subsistence are regulated by climate and other natural conditions, and by a standard historically established in every country. They vary, but for a given country and a given epoch they are also given. Moreover, they include the means of subsistence for the substitutes of worn-out labourers, for their children, so as to enable this peculiar species of owners of a commodity to perpetuate itself. They include, finally, for skilled labour, the expense of education. The minimal limit of the value of labour-power is the value of the physically absolute necessaries of life. If its price falls to this limit, it falls below its value, as the latter involves labour-power of normal, not of inferior quality. The nature of labour makes it evident that labour-power is used after the conclusion of the sale only;--and in all countries with capitalist mode of production, labour is paid after having been performed. Thus everywhere the labourer gives credit to the capitalist. Of the practical consequences of this credit given by the labourer, Mr. Marx gives some interesting examples from Parliamentary papers, for which we refer to the book itself.-- In consuming labour-power, its purchaser produces at once commodities and surplus-value; and in order to examine this, we have to leave the sphere of circulation for that of production. Here we find at once that the process of labour is of a double nature. On the one hand it is the simple process of production of useful value; as such, it can and must exist under all historical forms of social existence; on the other hand, it is this process carried on under the specific conditions of capitalistic production, as before stated. These we have now to inquire into. The process of labour, on a capitalistic basis, has two peculiarities. Firstly, the labourer works under the control of the capitalist who takes care that no waste is made and that no more than the socially indispensable amount of labour is spent upon each individual piece of work. Secondly, the product is the property of the capitalist, the process itself being carried on between two things belonging to him: the labour-power and the means of work. The capitalist does not care for the useful value, except so far as it is the incorporation of exchangeable value, and above all, of surplus-value. His object is to produce a commodity of a value higher than the sum of value invested in its production. How can this be done? Let us take a given commodity, say cotton yarn, and analyse the quantity of labour embodied in it. Suppose that for the production of 10 lbs of yarn we require 10 lbs of cotton, value 10/- (leaving waste out of consideration). There are further required certain means of work, a steam-engine, carding-engines and other machinery, coal, lubricants, etc. To simplify matters, we call all these spindle and suppose that the share of wear and tear, coal, etc., required for spinning 10 lbs of yarn, is represented by 2/-. Thus we have 10/- cotton +2/- spindle=12/-. If 12/- represent the product of 24 working hours or two working days, then the cotton and spindle in the yarn incorporate two days' labour. Now, how much is added in the spinning? We will suppose the value, per diem, of labour-power to be 3/-. and these 3/- to represent the labour of six hours. Further, that six hours are required to spin 10 lbs of yarn by one labourer. In this case 3/- have been added to the product by labour, the value of the 10 lbs yarn is 15/- or 1/6d. per lb. This process is very simple, but it does not result in any surplus-value. Nor can it, as in capitalistic production things are not carried on in this simple way. We supposed the value of labour-power was 3/- per diem and that 6 hours' labour was represented by that sum. But if half-a-day's labour is required to maintain a labourer for 24 hours, there is nothing in that to prevent the same labourer from working a whole day. The exchangeable value of labour-power, and the value which it may produce, are two entirely different quantities, and it was this difference which the capitalist had in his eye when he invested his money in that commodity. That it has the quality of producing useful value, was a mere conditio sine qua non inasmuch as labour must be invested in a useful form in order to produce value. But our capitalist looked beyond that; what attracted him was the specific circumstance that this labour-power is the source of exchangeable value, and of more exchangeable value than is contained in itself. This is the peculiar 'service' which he expects from it. And in doing so, he acts in accordance with the eternal laws of the exchange of commodities. The seller of the labour-power realises its exchangeable, and parts with its useful value. He cannot obtain the one without giving away the other. The useful value of the labour-power, labour itself, no more belongs to its seller, than the useful value of sold oil to an oil-merchant. The capitalist has paid the value per diem of the labour-power; to him, therefore, belongs its use during the day, a day's labour. The circumstance that the maintenance of the labour-power for one day costs half a day's labour only, although this labour-power can be made to work a whole day; that, therefore, the value created by its use during a day, is twice as great as its own daily value--this circumstance is a peculiar piece of good luck for the buyer, but not at all a wrong inflicted upon the seller. The labourer, then, works 12 hours, spins 20 lbs of yarn representing 20/- in cotton, 4/- in spindle, etc., and his labour costs 3/-,--total, 27/-. But if 10 lbs of cotton absorbed 6 hours of labour, 20 lbs of cotton have absorbed 12 hours of labour, equal to 6/-. The 20 lbs of yarn now represent 5 days of labour; 4 in the shape of cotton and spindle, etc., 1 in the shape of spinning labour; the expression, in money, for 5 days' labour, is 30/-; consequently the price of the 20 lbs yarn is 30/-, or 1/6d. per lb. as before. But the sum total of the value of the commodities invested in this process was 27/-. The value of the product has increased beyond the value of the commodities invested in its production by one-ninth. Thus 27/- have been transformed into 30/-. They have produced a surplus-value of 3/-. The trick has, at last, succeeded. Money has been converted into capital. All the conditions of the problem have been solved, and the laws of the exchange of commodities have in no way been violated. Equivalent has been exchanged against equivalent. The capitalist, as purchaser, has paid every commodity at its value: cotton, spindles, etc., labour-power. After which, he did what every buyer of commodities does. He consumed their useful value. The process of consumption of the labour-power, at the same time process of production of the commodity, resulted in a product of 20 lbs of yarn, value 30/-. Our capitalist returns to the market and sells the yarn at 1/6 d. per lb., not a fraction above or below its value, and yet he extracts 3/- more from circulation than he originally invested in it. The whole of this process, the transformation of his money into capital, passes within the sphere of circulation, and at the same time not within it. By the intervention of circulation, because the purchase, in the market, of the labour-power was its indispensable condition. Not within the sphere of circulation, because this merely initiates the process of value begetting value, which is performed in the sphere of production. And thus tout est pour le mieux dans le meilluur des mondes possibles. [174-176] From the demonstration of the mode in which surplus-value is produced, Mr. Marx passes to its analysis. It is evident, from what precedes, that only one portion of the capital invested in any productive undertaking directly contributes to the production of surplus-value, and that is the capital laid out in the purchase of labour-power. This portion only produces new value; the capital invested in machinery, raw material, coal, etc., does indeed re-appear in the value of the product pro tanto, it is maintained and reproduced, but no surplus-value can proceed from it. This induces Mr. Marx to propose a new subdivision of capital into constant capital, that which is merely reproduced--the portion invested in machinery, raw materials and all other accessories to labour;--and variable capital, that which is not only reproduced, but is, at the same time, the direct source of surplus-value--that portion which is invested in the purchase of labour-power, in wages. From this it is clear, that however necessary constant capital may be to the production of surplus-value, yet it does not directly contribute to it; and, moreover, the amount of constant capital invested in any trade has not the slightest influence upon the amount of surplus-value produced in that trade. Consequently, it ought not to be taken into consideration in fixing the rate of surplus-value. That can be determined only by comparing the amount of surplus-value to the amount of capital directly engaged in creating it, that is to say, the amount of variable capital. Mr. Marx, therefore, determines the rate of surplus-value by its proportion to variable capital only: if the daily price of labour be 3/-, and the surplus-value created daily be also 3/-, then he calls the rate of surplus-value 100 per cent. What curious blunders may result from reckoning, according to usual practice, constant capital as an active factor in the production of surplus-value, is shown in an example from Mr. N. W. Senior, when that Oxford professor, noted for his scientific attainments and his beautiful diction, was invited, in 1836, to Manchester, in order to learn political economy there (from the cotton spinners) instead of teaching it in Oxford. -- The working-time in which the labourer reproduces the value of his labour-power, Mr. Marx calls "necessary labour ; the time worked beyond that, and during which surplus-value is produced, he calls "surplus-labour . Necessary labour and surplus-labour combined form the "working day .-- In a working day, the time required for necessary labour is given; but the time employed in surplus-labour is not fixed by any economical law, it may be longer or shorter, within certain limits. It can never be zero, as then the inducement for the capitalist to employ labour would have ceased; nor can the total length of the working day ever attain 24 hours, for physiological reasons. Between a working day of, say, six hours, and one of 24, there are, however, many intermediate stages. The laws of the exchange of commodities demand that the working day have a length not exceeding that which is compatible with the normal wear and tear of the labourer. But what is this normal wear and tear? How many hours of daily labour are compatible with it? Here the opinions of the capitalist and those of the labourer differ widely, and, as there is no higher authority, the question is solved by force. The history of the determination of the length of the working day is the history of a struggle about its limits, between the collective capitalist and the collective labourer, between the two classes of capitalists and working men. Capital, as has been stated before, has not invented surplus-labour. Wherever a portion of society holds the exclusive monopoly of the means of production, there the labourer, slave, serf, or free, has to add, to the labour necessary for his own subsistence, an increment of labour in order to produce the means of subsistence for the owner of the means of production, be that owner an Athenian kalos kaloqos, an Etruscan theocrat, a civis Romanus; a Norman baron, an American slave-owner, a Wallachian boyar, a modern landlord or capitalist. . It is, however, evident that in any form of society where the value in use of the product is more important than its value in exchange, surplus-labour is restrained by the narrower or wider range of social wants; and that under these circumstances there does not exist necessarily a desire for surplus-labour for its own sake. Thus we find that in the classical period surplus-labour in its extremist form, the working to death of people, existed almost exclusively in gold and silver mines, where value in exchange was produced in its independent form of existence: money. But wherever a nation whose production is carried on in the more rudimentary forms of slavery or serfage, lives in the midst of a universal market dominated by capitalist production, and where therefore the sale of its products for exports forms its chief purpose--there to the barbarous infamies of slavery or serfdom are superadded the civilised infamies of over-working. Thus in the Southern States of America slave-labour preserved a moderate and patriarchal character while production was directed to immediate domestic consumption chiefly. But in the same measure as the export of cotton became a vital interest to those states, the over-working of the negro, in some instances even the wearing-out of his life in seven working years, became an element in a calculated and calculating system... Similar with the corvees of the serfs in the Danubian principalities. Here the comparison with capitalist production becomes particularly interesting, because, in the corvee, surplus-labour has an independent, palpable form. Suppose the working day counts six hours of necessary and six hours of surplus-labour; then the labourer furnishes the capitalist with 36 hours of surplus-labour a week. He might as well have worked three days for himself and three days for the capitalist. But this is not at once visible. Surplus-labour and necessary labour are more or less mixed together. I might express the same relation thus, that, in every minute, the labourer works 30 seconds for himself and 30 more for the capitalist. But with the serfs' corvee it is different. The two kinds of labour are separated in space. The labour, which, for instance, a Wallachian peasant performs for himself, he performs on his own field, his surplus-labour for the boyar he performs on the boyar's estate. The two portions of his labour exist independent of each other, surplus-labour, in the shape of corvee, is completely separated from necessary labour. [219-220] We must refrain from quoting the further interesting illustrations from the modern social history of the Danubian principalities, by which Mr. Marx proves the boyars there, aided by Russian intervention, to be quite as clever extractors of surplus-labour as any capitalist employers. But what the Reglement organique, by which Russian General Kisseleff presented the boyars with almost unlimited command over the peasant's labour, expresses positively, the English Factory Acts express negatively. These acts oppose the which the Russian almost unlimited inherent tendency of capital to an unlimited exploitation--we ask pardon for introducing this French term, but there does not exist any English equivalent--of the labour-power, by forcibly putting a limit to the length of the working day by the power of the State, and that a State ruled by landlords and capitalists. Not to speak of the working class movement which was daily gaining greater dimensions, this limitation of factory labour was dictated by the same necessity which brought Peruvian guano on the fields of England. That same blind rapacity which in the one case had exhausted the soil, in the other case had attacked the vitality of the nation at its root. Periodical epidemics here spoke as plainly, as in France and Germany, the necessity for constantly reducing the standard of height for soldiers. To prove the tendency of capital to extend the working day beyond all reasonable limits Mr. Marx quotes amply from the Reports of the Factory Inspectors, of the Children's Employment Commission, the Reports on Public Health and other Parliamentary Papers, and sums up in the following conclusions: "What is a working day? How long is the time during which capital may be allowed to consume the working power on paying for its value per diem? How far may the working day be extended beyond the time necessary for reproducing the working power itself? Capital, as we have seen, replies: the working day counts full 24 hours, excepting those few hours of rest without which the labour-power absolutely refuses to renew its services. It is a matter of course that the labourer during the whole of the live-long day is nothing but labour-power; that ail his disposable time is working-time and belongs to value-begetting capital... But in this madly blind race after surplus-labour, capital outruns not only the moral, but also the purely physical maximum limits of the working day... Capital does not care for the duration of life of the working power... it produces its premature exhaustion and death, it effects the prolongation of the working-time during a given period by shortening the labourer's life. [249-251] But is not this against the interest of capital itself? Has capital, in the long run, not to replace the cost of this excessive wear and tear? That may be the case theoretically. Practically, the organised slave trade in the interior of the Southern States had raised the practice of using up the working power of the slave in seven years to an acknowledged economical principle; practically, the English capitalist relies upon the supply of labourers from the agricultural districts. He sees a constant over-population, that is, an over-population as compared with the capacity of capital to absorb living labour, though this over-population be formed by a constant current of crippled, quickly fading generations of men, pressing upon their successors and plucked before maturity. Certainly, to an uninterested observer, experience would show on the other hand how soon capitalist production, though dating, historically speaking, from yesterday only, has attacked the vital root of national strength, how the degeneration of the industrial population is retarded only by the constant absorption of agricultural elements, and how even these agricultural labourers, in spite of fresh air and that principle of natural selection which is so specially powerful amongst them, have already begun to decline. Capital, which has such capital motives to deny the sufferings of the working classes in the midst of which it exists, capital will be disturbed in its practical activity as little and as much by the prospect of future degeneracy of the human race and of inevitable ultimate depopulation, as by the possible fall of the earth into the sun. In every joint-stock 'limited' swindle, every participator knows that the thunderstorm will come sooner or later, but every one expects that the lightning will fall on the head of his neighbour, after he himself shall have had time to collect the golden rain and store it up safely. Apres moi le deluge! is the battle-cry of every capitalist and of every capitalist nation. Capital, therefore, is reckless of the health and life of the labourer, unless society compels it to act otherwise [...] And, upon the whole, this disregard of the labourer does not depend upon the good or bad will of the individual capitalist. Free competition imposes the immanent laws of capitalist production upon every individual capitalist in the shape of extraneous compulsory laws. [254-255] The determination of the normal working day is the result of many centuries of struggle between employer and labourer. And it is curious to observe the two opposing currents in this struggle. At first, the laws have for their end to compel the labourers to work longer hours; from the first statute of labourers 23rd Edward III (1349) up to the eighteenth century, the ruling classes never succeeded in extorting from the labourer the full amount of possible labour. But with the introduction of steam and modern machinery, the tables were turned. So rapidly did the introduction of the labour of women and children break down all traditional bounds to working hours, that the nineteenth century began with a system of overworking which is unparalleled in the history of the world, and which, as early as 1803, compelled the legislation to enact limitations of working hours. Mr. Marx gives a full account of the history of English factory legislation up to the Workshops Act of 1867, and draws from it these conclusions: 1) Machinery and steam cause overwork, at first, in those branches of industry where they are applied, and legislative restrictions are, therefore, first applied to these branches; but in the sequel we find that this system of overwork has spread also to almost all trades even where no machinery is used, or where the most primitive modes of production continue in existence. (Vide Children's Employment Commission's Reports.) 2) With the introduction of the labour of women and children in the factories, the individual free labourer loses his power of resistance to the encroachments of capital and has to submit unconditionally. Thus he is reduced to collective resistance; the struggle of class against class, of the collective workmen against the collective capitalists begins. If we now look back to the moment when we supposed our free and equal labourer to enter into a contract with the capitalist, we find that, under the process of production, a good many things have changed considerably. That contract, on the part of the labourer, is not a free contract. The daily time during which he is at liberty to sell his working power is the time during which he is compelled to sell it; and it is merely the opposition of the labourers, as a mass, which forcibly obtains the enactment of a public law to prevent them from selling themselves and their children, by a free contract, into death and slavery. In the place of the grandiloquent catalogue of the inalienable rights of man, he has now nothing but the modest Magna Charta of the Factory Act. -- We have next to analyse the rate of surplus-value and its relation to the total quantity of surplus-value produced. In this inquiry, as we have done hitherto, we suppose the value of labour-power to be a determinate constant quantity. Under this supposition, the rate of surplus-value determines at the same time the quantity furnished to the capitalist by a single labourer in a given time. If the value of our labour-power be 3/- a day representing six hours' labour, and the rate of surplus-value be 100 per cent, then the variable capital of 3/i- produces every day a surplus-value of 3/-, or the workman furnishes six hours of surplus-labour every day. Variable capital being the expression in money of all the labour-power employed simultaneously by a capitalist, the sum total of the surplus-value produced by the labour-power is found by multiplying that variable capital by the rate of surplus-value; in other words it is determined by the proportion between the number of working powers simultaneously employed, and the degree of exploitation. Either of these factors may vary, so that the decrease in the one may be compensated by the increase of the other. A variable capital required to employ 100 labourers with a rate of surplus-value of 50 per cent (say 3 hours of daily surplus-labour) will produce no more surplus-value than half that variable capital, employing 50 labourers at a rate of surplus-value of 100 per cent (say six hours of daily surplus-labour). Thus, under certain circumstances and within certain limits, the supply of labour at the command of capital may become independent of the actual supply of labourers. There is, however, an absolute limit to this increase of surplus-value by increasing its rate. Whatever may be the value of labour, whether it be represented by two or by ten hours of necessary labour, the total value of the work performed, day after day, by any labourer, can never attain the value representing 24 hours' labour. In order to obtain equal quantities of surplus-value, variable capital may be replaced by prolongation of the working day within this limit only. This will be an important element in explaining, hereafter, various phenomena arising from the two contradictory tendencies of capital: 1) to reduce the number of labourers employed, i.e. the amount of variable capital, and 2) yet to produce the greatest possible quantity of surplus-labour. It follows further: The value of labour being given, and the rate of surplus-value being equal, the quantities of surplus-value produced by two different capitals are in direct proportion to the quantities of variable capital contained in them. [...] This law flatly contradicts all experience founded upon the appearance of facts. Everybody knows that a cotton spinner who [...] works with a relatively large constant, and a relatively small variable capital, does not, on that account, obtain a lesser ratio of profit than a baker who puts in motion relatively little constant and relatively much variable capital. To solve this apparent contradiction, a good many intermediate links are required, just as, starting from elementary algebra, a great number of intermediate links are required in order to understand that o/o may represent a real quantity. For a given country and a given length of working day, surplus-value can be increased only by increasing the number of labourers, i.e. by an increase of population; this increase forms the mathematical limit for the production of surplus-value by the collective capital of that country. On the other hand, if the number of labourers be determined, this limit is fixed by the possible prolongation of the working day. It will be seen hereafter that this law is valid for that form only of surplus-value which has been hitherto analysed. We find, at this stage of our inquiry, that not every amount of money is capable of being converted into capital; that there is an extreme minimum for it: the cost of a unit of labouring power and of the means of labour necessary to keep it going. Suppose the rate of surplus-value to be 50 per cent, our infant-capitalist would be required to be able to employ two workmen in order to live, himself, as a workman lives. But this would prevent him from saving anything; and the end of capitalist production is not merely preservation, but also and chiefly increase of wealth. To live twice as well as a common labourer, and to retransform one half of the surplus-value produced into capital, he would have to be able to employ eight workmen. He might certainly take his share of the work, along with his workmen, but be would still remain a small master, a hybrid between capitalist and labourer. Now, a certain development of capitalist production renders it necessary that the capitalist should devote the whole of the time during which he acts as a capitalist, as capital personified, to the appropriation and control of other people's labour, and to the sale of its products. The restrictive guilds of the Middle Ages attempted to check the transformation of the small master into a capitalist by fixing a very low maximum to the number of workmen which each was allowed to employ. The owner of money or commodities changes into a real capitalist only then, when he is able to advance, for the purpose of production, a minimum sum far higher than this medieval maximum. Here, just as in the natural sciences, the correctness is proved of the law discovered by Hegel that mere quantitative changes, at a certain point, imply a qualitative difference. [295-296] The minimum amount of value required to change an owner of money or commodities into a capitalist varies for different stages of the development of capitalist production, and for a given stage of development, it varies for different branches of industry. During the process of production detailed above, the relation of capitalist and labourer has changed considerably. First of all, capital has been developed into command of labour, i.e. into command over the labourer himself. Personified capital, the capitalist, takes care that the labourer performs his work regularly, carefully and with the required degree of intensity. Further, capital has been developed into a compulsory relation which obliges the working class to perform more labour than is prescribed by the narrow circle of their own requirements. And as a producer of other people's industry, as an extortioner of surplus-labour and exploiter of labour-power, capital far exceeds in energy, recklessness, and efficiency all former systems of production, though they were based upon direct forced labour. Capital, at first, takes the command of labour under such technological conditions as it finds historically established. It does not, therefore, necessarily at once change the mode of production. The production of surplus-value, in the form hitherto analysed, that is to say by mere prolongation of the working day, appeared independent of every change in the mode of production itself. It was quite as efficient in the primitive baking trade as in modern cotton-spinning. In the process of production considered as a mere process of labour, the relation between the labourer and his means of production is not that of labour and capital, but that of labour and the mere instrument and raw material of productive action. In a tannery, for instance, he treats the skins as a mere object for labour. It is not the capitalists whose skin he tans. But things change as soon as we look upon the process of production as a process of creating surplus-value. The means of production at once change into means of absorbing other people's labour. It is no longer the workman who employs the means of production, it is the means of production which employ the workman. It is not he who consumes them as material elements of his productive action; it is they which consume him as the ferment of their own vital process; and the vital process of capital consists in nothing but its progressive motion as value begetting value. Furnaces and workshops which have to stand idle at night, without absorbing labour, are a pure loss to the capitalist. Therefore furnaces and workshops constitute a 'title upon the night-work of the hands'. (See Reports of Children's Employment Commission, 4th Report, 1865, pages 79 to 85.) The mere change of money into means of production changes the latter into legal and compulsory titles upon other people's labour and surplus-labour. [296-297] There is, however, another form of surplus-value. Arrived at the utmost limit of the working day, another means remains to the capitalist for increasing surplus-labour: by increasing the productivity of labour, by thereby reducing the value of labour, and thus shortening the period of necessary labour. This form of surplus-value will be examined in a second article.

Economic Manuscripts: Reviews of Volume One of Capital

https://www.marxists.org/archive/marx/works/1867/reviews-capital/fortnightly.htm

We must leave it to others to deal with the theoretical and strictly scientific part of this work and criticise the new view the author gives of the origin of capital. But we cannot fail to draw attention to the great mass of most valuable historical and statistical material with which the author at the same time presents us and which almost without exception is taken from the official Commission Reports which have been put before the English Parliament. He is quite right to emphasise the importance of such commissions of inquiry for the study of the internal social conditions of a country. Provided the right people are found for them, they are the best means for a nation to learn to know itself; and Herr Marx is surely not wrong in saying that similar investigations conducted in Germany would lead to results which would definitely horrify us. Before they were introduced, there was not an Englishman either who knew how the poorer classes of his country lived! It stands to reason, moreover, that without such investigations all social legislation will be made with only half the knowledge of facts available and often quite in the dark, as they now say in Bavaria. The so-called "inquiries" and "investigations" of German authorities have not remotely the same value. We know the bureaucratic routine only too well: forms are sent round, one is glad if they are returned filled in some way or another; the information thus supplied is all too often sought precisely among those who are interested in hushing up the truth. Compare with that the investigations of English commissions on working conditions in individual industries, for example. Not only the manufacturers and masters, but also the workers down to the little girls are interviewed, and not only these, but doctors, Justices of the Peace, clergymen, teachers, and moreover anyone who can give any kind of information on the matter. Every question and every answer is taken down in shorthand and printed word for word, and is attached to the whole material on which the commission report with its conclusions and proposals is based. The report and its material at the same time proves in detail whether and how the commissioners have fulfilled their duty and makes things very difficult for individual bias. The details as well as innumerable examples can be read in the above book itself. Here we want only to emphasise the one point, that in England the expansion of the freedom of trade and business has gone hand in hand with the expansion of the legal limitation of the working hours for women and children, and therewith the placing of almost all industries under the supervision of the government. Herr Marx gives us a detailed historical presentation of this development, showing how first, since 1833, spinning and weaving mills were in this way limited to a 12-hour working day; how after a long struggle between manufacturers and workers the working hours were at long last fixed at 10 1/2--6 1/2 for children--and then, beginning in 1850, one industry after another became subject to this factory law. First the cotton printers (already in 1845), then in 1860 the dying and bleaching works, in 1861 the lace and hosiery manufactures, in 1863 the potteries, wallpaper factories, etc., and eventually in 1867 almost all the remaining industries of any importance. One can form a picture of the significance of this last Act of 1867 when one learns that it places no fewer than a million and a half women and children under the protection and the control of the law. We emphasise this point particularly because in this respect things are, alas, bad indeed with us in Germany, and we must thank the author for having dealt with it in such detail and made the facts accessible to the German public for the first time. This will be the view of every friend of humanity, whatever he may think of the theoretical propositions of Herr Marx. Space does not permit us to enter into other valuable materials from the history of industry and agriculture, but we are of the opinion that no one interested in political economy, industry, workers' condition, the history of culture and social legislation, whatever standpoint he may hold, should leave this book unread.

Economic Manuscripts: Reviews of Volume One of Capital

https://www.marxists.org/archive/marx/works/1867/reviews-capital/landeszeitung.htm

Karl Marx: Capital. Critique of political Economy, 1867. Section: "The Working Day" 1) "We started with the supposition that labour-power is bought and sold at its value. Its value, like that of all other commodities, is determined by the working-time necessary to its production. If the production of the average daily means of subsistence of the labourer takes up six hours, he must work, on the average, six hours every day, to produce his daily labour-power, or to reproduce the value received as the result of its sale. The necessary part of his working day amounts to six hours, and is, therefore, caeteris paribus, a given quantity. But with this, the extent of the working day itself is not yet given... One of its parts, certainly, is determined by the working-time required for the continual reproduction of the labourer himself. But its total amount varies with the length or the duration of surplus-labour.... Although the working day is not a fixed, but a fluent quantity, it can, on the other hand, only vary within certain limits" (pp. 198, 199 [214-15]). 2) "The minimum limit" (of the working day) "is, however, not determinable; of course, if we make the surplus-labour=0, we have a minimum limit, i. e., the part of the day which the labourer must necessarily work for his own maintenance. On the basis of the capitalist mode of production, however, this necessary labour can form a part only of his working day; the working day itself can never be reduced to this minimum. On the other hand, the working day has a maximum limit. It cannot be prolonged beyond a certain point. This maximum limit is determined by two things. First, by the physical bounds of labour-power. Within the 24 hours of the natural day a man can expend only a definite quantity of his vital force and the extent of this expenditure of force is a measure for his physically possible working-time. A horse, in like manner, can only work from day to day for 8 hours. During part of the day this force must rest, sleep; during another part the man has to satisfy other physical needs, to feed, wash and clothe himself, etc. Besides these purely physical limitations, the extension of the working day encounters moral ones. The labourer needs time for satisfying his intellectual and social wants, the extent and number of which are determined by the general level of culture... But both these limits" (the physical and moral maximum limits) "are of a very elastic nature, and allow the greatest latitude. So we find working days of 8, 10, 12, 14, 16, 18 hours" (p. 199). Herr v. Hofstetten makes nonsense of the passage he plagiarises. Thus, for example, he lets the maximum limit of the working day be determined by purely physical, and the minimum limit by moral limitations, although he himself has earlier mechanically repeated that the necessary part of the working day, i.e., its absolute minimum limit, is determined by the working-time necessary to maintain the labour-power! 3) On the intensification of labour and the achievement of equal or greater surplus-labour" by the enforced legal restriction of the working day in England see pp, 401-09. 4) "The capitalist maintains his rights as a purchaser when he tries to make the working day as long; as possible, and to make, whenever possible, two working days out of one. On the other hand, the peculiar nature of the commodity sold implies a limit to its consumption by the purchaser, and the labourer maintains his right as seller when he wishes to reduce the working day to a definite normal duration... I will" (he says) "husband my sole wealth, labour-power... The use of my labour-power and the spoliation of it are quite different things... You pay me for one day's labour-power, whilst you that of three days. That against our contract and the law of commodity exchange. I demand, therefore, a working day of normal length, etc. (pp. 202, 201). 5) "The Factory Act of 1850 now in force" (not in England, but in specific industries of the United Kingdom named by Marx) "allows for the average working day of 10 hours... Certain guardians of the law are appointed, Factory Inspectors, directly under the Home Secretary, whose reports are published half-yearly by order of Parliament" (p. 207). ...Limitations of the working day for miners exist in certain States of North America in reality, not just in preparation (p. 244), limitation of the working day in general in France (p. 251), for children in some cantons of Switzerland (p. 251), in Austria (p. 252), in Belgium nothing of the kind (ibid.). The ordinances of Messrs. v. d. Heydt and Manteuffel, etc., would be praiseworthy if they were put into practice (ibid.). "in the United States of North America, every independent movement of the workers was paralysed so long as slavery disfigured a part of the Republic... But out of the death of slavery a new young life at once arose. The first fruit of the Civil War was the eight hours agitation. At the same time the "The International Working Men 's Congress", made the following resolution: "...We propose eight hours work as the legal limit of the working day" (pp.279, 280). In the same manner as Herr v. Hofstetten, the speaker who followed him, Herr Geib of Hamburg, bowdlerised the history of the English factory legislation given by Marx. Both gentlemen take the same care not to divulge the source of their wisdom.

Economic Manuscripts: Reviews of Volume One of Capital

https://www.marxists.org/archive/marx/works/1867/reviews-capital/plagiarism.htm

Universal suffrage has added to our present parliamentary parties a new one, the Social-Democratic Party. At the last elections to the North German imperial Diet it put up its own candidates in most big cities and in all factory districts, and succeeded in getting six or eight representatives elected. Compared with the last but one election it deployed much greater strength and we can therefore assume that, at least for the time being, it is still growing. It would be foolish to continue to treat the existence, activity and doctrines of such a party with genteel silence in a country where universal suffrage has placed the final decision into the hands of the most numerous and poorest classes. However much the few social-democratic parliamentarians may be at loggerheads with each other, we can be sure that all factions of this party will welcome the present book as their theoretical bible, as the armoury from which they will take their most telling arguments. For this reason alone it deserves special attention. But it is also bound to cause a stir by its own content. If Lassalle's main argumentation--and in political economy Lassalle was only a pupil of Marx--was confined to repeating again and again the Ricardo so-called law of wages, we here have before us a work which with undeniably rare scholarship presents the whole relationship of capital and labour in its connection with economic science as a whole, and which makes it its final goal "to reveal the economic law of motion of modern society", and comes, after obviously sincere studies unmistakably conducted with expert knowledge, to the conclusion that the whole "capitalist mode of production" must be abolished. Moreover, we would like to draw particular attention to the fact that, in addition to the conclusions of the work, the author in its course represents a whole series of major points of political economy in quite a new light, and comes in purely scientific questions to results which markedly depart from hitherto current political economy, and which orthodox economists will have to criticise seriously and refute scientifically if they do not wish to see their hitherto current doctrines founder. In the interest of science it is desirable that the polemic on these particular points of political economy in quite a new light, and comes in purely scientific questions to results which markedly depart from hitherto current doctrines founder. In the interest of science it is desirable that the polemic on these particular points should develop very soon in the specialist literature. Marx begins with the presentation of the relationship between commodity and money, the essence of which was already published some time ago in a special work. He then passes on to capital, and here we soon come to the crucial point of the whole work. What is capital? Money which changes into a commodity in order to change from a commodity into more money than the original amount. When I buy cotton for 100 talers and sell this for 110 talers, I establish my 100 talers as capital, self-expanding value. Now the question arises: whence do the ten talers come which I earn in this process, how does it happen that by two simple exchanges 100 talers become 110 talers? For political economy presupposes that in all exchanges equal value is exchanged for equal value. Marx now runs through all possible cases (variations in the price of commodities, etc.) to prove that under the presuppositions assumed by political economy the formation of 10 talers surplus-value from an original sum of 100 talers is impossible. Nevertheless, this process takes place daily, and the economists still owe us an explanation for this. Marx provides the explanation as follows: The riddle can only be solved if we find on the market a commodity of a very peculiar kind, a commodity the use-value of which consists in creating exchange-value. This commodity exists: it is labour-power. The capitalist buys labour-power on the market and makes it work for him so as to sell its product again. We must therefore in the first instance examine labour-power. What is the value of labour-power? According to a well-known law it is the value of the means of subsistence necessary to maintain and reproduce the worker in the manner historically established in the given country and epoch. We assume that the worker's labour-power is paid for at its full value. We assume further that this value is represented in six hours' work a day, or half a working day. But the capitalist claims that he has bought the labour-power for a whole day and makes the worker work 12 hours or more. Hence with 12 hours of work he has acquired the product of six hours working-time without payment. Marx concludes: All surplus-value, whichever way it may be distributed, as capitalist gain, rent, tax, etc., is unpaid labour. The struggle for the length of the working day arises from the interest of the factory owner to gain every day as much unpaid labour as possible and the opposite interest of the worker. Marx describes the course of this struggle in an illustration well worth reading, which fills about a hundred pages, taken from English large-scale industry; in spite of the protest of the factory owner, who was a champion of free trade, this struggle ended last spring in not only all factory industry, but all the small-scale and even domestic industry being brought under the restraints of the factory act which limits the daily work of women and children under 18 years of age--and therewith indirectly also that of men--in the most important industries to at most 10 1/2 hours. He also explains why English industry has not suffered, but on the contrary, gained thereby: since the work of every individual worker became more intense as its duration was shortened. Surplus-value can, however, also be raised by another method than that of extending working-time beyond that needed to produce the necessary means of subsistence or their value. According to our previous assumption, a given working day of, say, 12 hours, contains six hours of necessary work and six hours of work used to produce surplus-value. If by some means we succeed in reducing the necessary working-time to five hours, there remain seven hours during which surplus-value is produced. This can be achieved by shortening the working-time needed to produce the necessary means of subsistence, in other words, by reducing their cost, and this again only by improvements in production. On this point Marx gives again a detailed illustration, examining and describing the three main levers by which these improvements are brought about: 1. co-operation, or the multiplication of the forces which results from the simultaneous and planned working together of many individuals; 2. the division of labour as it was developed in the period of manufacture properly so-called, i.e. up to about 1770; and, lastly, 3. machinery with the aid of which large-scale industry has developed since then. These descriptions are also of great interest, and reveal amazing expert knowledge, up to technical details... We cannot go more deeply into the details of the studies on surplus-value and wages; to avoid misunderstandings we merely remark that wages are less than the total product of labour, as Marx proved by a number of quotations, and which is a fact not unknown to orthodox economics either. We must hope that this book will provide the opportunity for the gentlemen of the orthodox tradition to give us more enlightenment on this really strange point. It is most commendable that all factual examples given by Marx are taken from the best sources, mostly official parliamentary reports. We take this opportunity to support the author's plea made indirectly in the preface: that in Germany, too, working conditions in the various industries should be thoroughly investigated by government commissioners--who, however, should not be biased bureaucrats--and their reports submitted to the Imperial Diet and the public. The first volume concludes with a discourse on the accumulation of capital. Much has already been written on this point, but we must confess that here too there is much given that is new, while the old is presented from new angles. Most original is the attempt to prove that the accumulation of a redundant population of workers goes hand in hand with the concentration and accumulation of capital, and that eventually both make a social revolution on the one hand necessary, on the other possible. Whatever the reader may think of the author's socialist views, we believe to have shown above that he has here before him a work which stands way above the current social-democratic literature of the day. We add that except for the somewhat stark dialectical style on the first 40 pages and in spite of its scientific strictness, the work is very easy to follow and is made most interesting by the author's sarcastic manner of writing which spares no one.

Economic Manuscripts: Reviews of Volume One of Capital

https://www.marxists.org/archive/marx/works/1867/reviews-capital/rzeitung.htm

When we take the above work into consideration we certainly do got do so on account of the specifically socialist tendency which the author openly displays already in the preface. We do so because, apart from this tendency, the work contains scientific expositions and factual material which deserve every consideration. We shall not enter into the scientific part either, since this is far from our purpose, and confine ourselves to the factual matters alone. We do not believe that any work exists--either in German or a foreign language--in which the analytical fundamentals of more recent industrial history from the Middle Ages to the modern day are so clearly and completely summed up as on pages 302-495 of the present book in the three chapters: Co-operation, Manufacture and Large-scale Industry. Every single aspect of industrial progress is here emphasised in its proper place, according to merit, and even if the specific tendency comes through here and there, one must do the author justice for never moulding the facts to suit his theory but, on the contrary, seeking to present his theory as the result of the facts. He takes these facts always from the best sources, and where the latest state of affairs is concerned, from sources which are as authentic as they are at present unknown in Germany: the English Parliamentary Reports. German businessmen who consider their industry not merely from the standpoint of day-to-day business but regard it as an essential link in the whole development of large-scale modern industry in all countries and hence also take an interest in matters not directly concerning their own industry, will here find a copious source of instruction and will thank us for having directed their attention to it. For the time when every trade existed singly and quietly for itself alone has indeed long passed, now they all depend on one another and on the progress being made in distant lands as well as in the closest neighbourhood and on the changing economic situation of the world market. And if, as may well be, the new Customs Union agreements lead to a reduction in the present protective tariffs, all our manufacturers are likely to ask to he made better acquainted with the history of modern industry in general, so as to learn in advance how best to conduct themselves when such changes occur. Higher education, which up to now has saved us Germans again and again, in spite of the political dismemberment, would also in this case be the best weapon we could use against the crude materialism of the English. This leads us to another point. With the new Customs Union legislation the moment may soon arrive when a uniform regulation of the working hours in the factories of the Union states will be demanded by the manufacturers themselves. It would be obviously unfair if in one state the working hours, especially of women and children, were entirely at the discretion of the manufacturer, while in another they were subject to considerable limitations. It will be difficult to avoid coming to an understanding on common regulations in this respect, and the more so if the protective tariffs were actually lowered. In this respect, however, we Germans have greatly insufficient, one could even say, no experience at all, and are entirely dependent on the lessons to be drawn from the legislation of other countries, particularly England, and from its fruits. And here the author has done a great service to German industry by giving the history of English factory legislation and its results in the greatest detail from official documents. (Cf. pp. 207-81 and 399-496, and passim.) This whole aspect of English industrial history is as good as unknown in Germany, and one will be surprised to learn that since a Parliamentary Act of the current year placed no fewer than a million and a half workers under government control, not only almost all industrial but even most of domestic and part of agricultural labour in England are now subjected to the supervision of officials and direct or, indirect time limits. We ask our manufacturers not to be deterred by the tendency of this book from seriously studying particularly this part of it; sooner or later the same question will surely be put before them!

Economic Manuscripts: Reviews of Volume One of Capital

https://www.marxists.org/archive/marx/works/1867/reviews-capital/staats-anzeiger.htm

For every German it is a saddening fact that we, the nation of thinkers, have so far achieved so little in the field of political economy. Our famous men in this line are at best compilers like Rau and Roscher and, where anything original is produced, we have protectionists like List (who, however, is said to have copied a Frenchman) or socialists like Rodbertus and Marx. Our standard political economy actually seems to have set itself the aim of driving into the arms of socialism all who treat the science of political economy seriously. Have we not seen the whole of official economics daring to oppose a Lassalle on the well-known and recognised law on the determination of wages, and leaving it to Lassalle to defend people like Ricardo against Schulze-Delitzsch and others! Alas, it is true that scientifically they could not even cope with Lassalle and, whatever recognition their practical endeavours may have won, had to endure the charge that their entire science consists in watering down a Bastiat's harmonies which gloss over all contradictions and difficulties. Bastiat as an authority and Ricardo disowned that is our official political economy in Germany today! But indeed, how could it be otherwise? Alas, with us political economy is a field in which nobody takes a scientific interest; it is either a breadwinning study for the examinations in cameralistics or an aid to political agitation for which the merest smattering is thought sufficient. Is that the fault of our political dismemberment, our unfortunately still so little developed industry, or our traditional dependence for this branch of science on foreign countries? In these circumstances it is always a pleasure when a book like the above comes to hand, in which the author, indignantly referring the current watered down or, as he aptly terms it, "vulgar political economy" back to its classical models concluding with Ricardo and Sismondi, also takes a critical attitude to the classics, but always endeavours to retain the path of strictly scientific analysis. Marx's earlier writings, in particular the treatise on money published in 1859 by Duncker in Berlin, were already distinguished by a strictly scientific spirit as much as by ruthless criticism, and to our knowledge our entire official political economy has not produced anything to refute them. But if it could not cope with the treatise of those days, how will it fare with the 49 sheets about capital now? Understand us rightly: we do not say that no objections can be made to the conclusions of this book, that Marx has brought forward proofs that are complete; we merely say: We do not believe that among all our political economists one can be found capable of refuting them. The studies made in this book are of the greatest scientific subtlety. We refer in particular to the masterly, dialectical arrangement of the whole, to the manner in which the concept of the commodity is already presented as implying money existing in itself and how capital is developed out of money. We acknowledge that we regard the newly introduced category of surplus-value as an advance; that we do not see what can be objected to the statement that not labour but labour-power appears on the market as a commodity; that we regard as quite in order the correction to Ricardo's law of the rate of profit, that surplus-value must be substituted for profit. We must confess that we are much impressed by the sense of history which pervades the whole book and forbids the author to take the laws of economics for eternal truths, for anything but the formulations of the conditions of existence of certain transitory states of society; we would, alas, look in vain among our official economists for that scholarship and acumen with which the various historical states of society and their conditions of existence are here presented. Studies like that on the economic conditions and laws of slavery, the various forms of serfdom and bondage and the origin of free labour have hitherto remained quite alien to our economic specialists. We would also like to hear the opinion of these gentlemen on the expositions given here of co-operation, division of labour and manufacture, machinery and large-scale industry in their historical and economic connections and effects; at any rate, they could here learn much that is new. And what in particular will they say of the fact which runs counter to all traditional theories of free competition and which is here nevertheless substantiated from official material, namely that in England, the fatherland of free competition, there is almost no industry left in which the daily working hours are not strictly prescribed by government intervention and which is not supervised by factory inspectors? And that nevertheless, not only do the individual industries prosper, in line with the reduction in working hours, but the individual worker also produces more in the shorter hours than he did previously in the longer hours? Alas, we cannot deny that the particularly bitter tone which the author uses against the official German economists is not without justification. They more or less all belong to the "vulgar economists"; they have prostituted their science for the sake of momentary popularity and denied its great classical exponents. They Speak of "harmonies" and wallow in the most banal contradictions. May the severe lesson given them in this book serve to awaken them from their lethargy, to recall to them that political economy is not merely a milchcow providing us with butter but a science demanding serious and zealous application.

Economic Manuscripts: Reviews of Volume One of Capital

https://www.marxists.org/archive/marx/works/1867/reviews-capital/zukunft.htm

The wealth of societies in which capitalist production prevails consists of commodities. A commodity is a thing that has use-value; the latter exists in all forms of society, but in capitalist society, use-value is, in addition, the material depository of exchange-value. Exchange-value presupposes a tertium comparationis by which it is measured; labor, the common social substance of exchange-values, to be precise, the socially necessary labor-time embodied in them. Just as a commodity is something twofold: use-value and exchange-value, so the labour contained in it is two-fold determined: The former produces use-value, the latter exchange-value; only the latter is quantitatively comparable (the differences between skilled and unskilled, composite and simple labour confirm this). Hence, the substance of exchange-value is abstract labour and its magnitude is the measure of time of abstract labour. Now, to consider the form of exchange-value. The value of a commodity in the use-value of another is its relative value. The expression of the equivalence of two commodities is the simple form of relative value. In the above equation, y commodity b is the equivalent. In it, x commodity a acquires it value-form in contrast to its (the commodity's) natural form, while y commodity b acquires, at the same time, the property of direct exchangeability, even in its natural form. Exchange-value is impressed upon the use-value of a commodity by definite historical relations. Hence, the commodity cannot express its exchange-value in its own use-value, but only in the use-value of another commodity. Only in the equation of two concrete products of labour does the property of the concrete labour contained in both come to light as abstract human labour i.e., a commodity cannot be related to the concrete labour contained in itself, as the mere form of realization of abstract labour, but it can be so related to the concrete labour contained in other kinds of commodities. The equation x commodity a = y commodity b necessarily implies that x commodity a can also be expressed in other commodities, thus: This is the expanded relative form of value. Here, x commodity a no longer refers to one, but to all commodities as the mere phenomenal forms of the labour represented in it. But, through simple reversal, it leads to Here, the commodities are given the general relative form of value, in which all of them are abstracted from their use-values and equated to x commodity a as the materialization of abstract labour; x commodity a is the generic form of the equivalent for all other commodities; it is their universal equivalent; the labour materialized in it represents in itself the realization of abstract labour, labour in general. Now, however, Form 3 is not obtained by x commodity a, but by the other commodities, objectively. Hence, a definite commodity must take over for the role for a time, it can change and only in this way does a commodity become a commodity completely. This special commodity, with whose natural form the general equivalent form becomes identified, is money. The difficulty with a commodity is that, like all categories of the capitalist mode of production, it represents a personal relationship under a material wrapping. The producers relate their different kinds of labour to one another as general human labour by relating their products to one another as commodities they cannot accomplish it without this mediation of things. The relation of persons thus appears as the relation of things. For a society in which commodity production prevails, Christianity, particularly Protestantism, is the fitting religion. A commodity proves that it is a commodity in exchange. The owners of two commodities must be willing to exchange their respective commodities and, therefore, to recognise each other as private owners. This legal relation, the form of which is the contract, is only a relation of wills, reflecting the economic relation. Its content is given by the economic relation itself. (P.45 ) A commodity is a use-value for its non-owner, a non-use-value for its owner. Hence, the need for exchange. But, every commodity owner wants to get in exchange specific use-values that he needs, to that extent, the exchange is an individual process. On the other hand, he wants to realise his commodity as value, that is, in any commodity, whether or not his commodity is use-value to the owner of the other commodity. To that extent, the exchange is for him a generally social process. But, one and the same process cannot be simultaneously both individual and generally social for all commodity owners. Every commodity owner considers his own commodity as the universal equivalent, while all other commodities are so many particular equivalents of his own. Since all commodity owners do the same, no commodity is the universal equivalent, and, hence, no commodities posses a general relative form of value, in which they are equated as values and compared as magnitudes of value. Therefore, they do not confront each other at all as commodities, but only as products. (P.47 ) Commodities can be related as values and, hence, as commodities only by comparison with some other commodity as the universal equivalent. But only the social act can make a particular commodity the universal equivalent money. The immanent contradiction in a commodity as the direct unity of use-value and exchange-value, as the product of useful private labour... and as the direct social materialization of abstract human labour this contradiction finds no rest until it results in duplicating the commodity into commodity and money. (P.48 ) Since all other commodities are merely particular equivalents of money, and money is their universal equivalent, they are related to money as particular commodities to the universal commodity. (P.51 ) The process of exchange gives the commodity which it converts into money, not its value, but its value-form. (P.51 ) Fetishism (belief in a supernatural power of objects): a commodity does not seem to become money only because the other commodities all express their values in it, but, conversely, they seem to express their values in it because it is money. Money, as the measure of value, is the necessary phenomenal form of the measure of value immanent in commodities i.e., labour-time. The simple, relative expression of the value of commodities in money, x commodity a = y money, is their price. (P.55 ) The price of a commodity, its money-form, is expressed in imaginary money; hence, money is the measure of values only ideally. (P.57 ) Once the change from value to price is effected, it becomes technically necessary to develop the measure of values further, into the standard of price i.e., a quantity of gold is fixed, by which different quantities of gold are measured. This is quite different from the measure of values, which itself depends upon the value of gold, while the latter is immaterial for the standard of prices. (P.59 [97-98]) Once prices are expressed in accounting names of gold, money serves as money of account. If price, as the exponent of the magnitude of a commodity's value, is the exponent of its exchange ratio with money, it does not follow conversely that the exponent of its exchange ratio with money is necessarily the exponent of the magnitude of its value. Assuming that circumstances permit or compel the sale of a commodity above or below its value, these selling prices do not correspond to its value, but they are none the less prices of the commodity, for they are The possibility, therefore, of quantities incongruity between price and magnitude of value is given in the price-form itself. That is no defect of this form, but on the contrary makes it the adequate form of a mode of production in which the rule can impose itself only as a blindly-acting law of averages of irregularity. The price-form, however, can also harbour a qualitative contradiction, so that price ceases altogether to be an expression of value.... Conscience, honour, etc., can... acquire the form of commodities through their price. (P.61 ) Measurement of values in money, the price-form, implies the necessity of alienation, the ideal pricing implies the actual. Hence, circulation. a. The Metamorphosis of Commodities Simple form: C - M - C. Its material content C = C. Exchange-value is alienated and use-value appropriated. A. First phase: C - M = sale, for which two persons are required, hence the possibility of failure i.e., of sale below value, or even below the cost of production, if the social value of the commodity changes. At the same time, it also make the accomplishment of this transubstantiation quite accidental. (P.67 ) But, considering the phenomenon in its pure form, C - M presupposes that the possessor of the money (unless he is a producer of gold) previously got his money through exchange for other commodities; hence, it is not only conversely M - C for the buyer, but it presupposes that he made a previous sale, etc., so that we have an endless series of purchases and sales. B. The same takes place i the second phase, M - C i.e., purchase, which is, at the same time, a sale for the other party. C. The total process, hence, is a circuit of purchases and sales. The circulation of commodities. This is quite different from the direct exchange of products; first, the individual and local bounds of the direct exchange of products are broken through, and the metabolism of human labour is made possible; on the other hand, here it already appears that the whole process depends upon social relations spontaneous in their growth and independent of the actors. (P.72 ) Simple exchange was extinguished in the one act of exchange, where each exchanges non-use-value for use-value; circulation proceeds indefinitely. (P.73 ) Here the false economic dogma: the circulation of commodities involves a necessary equilibrium of purchases and sales, because every purchase is also a sale, and vice versa which is to say, that every seller also brings his buyer to market with him. The inner unity of the independent processes C - M and M - C moves in external antitheses precisely because of the independence of these processes; and when these dependent processes reach a certain limit of independence, their unity asserts itself in a crisis. Hence, the possibility of the latter is already given here. Being the intermediary in commodity circulation, money is the medium of circulation. b. The Currency of Money Money is the medium by which each individual commodity goes into, and out of, circulation; it always remains therein itself. Hence, although the circulation of money is merely the expression of commodity circulation, the circulation of commodities appears to be the result of money circulation. Since money always remains within the sphere of circulation, the question is: how much money is present in it? The quantity of money in circulation is determined by the sum prices of commodities (money-value remaining the same), and the latter by the quantity of commodities in circulation. Assuming that this quantity of commodities is given, the circulating quantity of money fluctuates with the fluctuations in the price of commodities. Now, since one and the same coin always mediates a number of transactions in succession in a given time, for a given interval of time, we have: Hence, paper money can displace gold money if it is thrown into a saturated circulation. Since the currency of money only reflects the process of commodity circulation, its rapidity reflects that of the change in the form of the commodities, its stagnation, the separation of purchase from sale, the stagnation of social metabolism. The origin of this stagnation cannot, of course, be seen from circulation itself, which puts in evidence only the phenomenon. The philistines attribute it to a deficient quantity of circulating medium. (P.81 ) Ergo: In general, there is a fairly constant average from which appreciable deviations occur almost exclusively as a result of crises. c. Coin. Symbols of Value The standard of prices is fixed by the state, as are also the denomination of the particular piece of gold the coin, and its coining. In the world market, the respective national uniforms are doffed again (Seigniorage is disregarded here), so that coin and bullion differ only in form. But a coin wears away during circulation; gold, as a circulating medium, differs from gold as a standard of prices. The coin becomes more and more a symbol of its official content. Herewith, the latent possibility is given of replacing metallic money by tokens or symbols. Hence: So far as this paper money actually circulates in place of gold money, it is subject to the laws of money circulation. Only the proportion in which paper replaces gold can be the object of a special law, which is: that the issue of paper money is to be limited to the quantity in which the gold represented by it would actually have to circulate. The degree of saturation of circulation fluctuates, but everywhere experience determines a minimum below which it never falls. This minimum can be issued. If more than the minimum is issued, a portion becomes superfluous as soon as the degree of saturation drops to the minimum. In that case, the total amount of paper money within the commodity world still represents only the quantity of gold fixed by that world's immanent laws, and hence alone representable. Thus, if the amount of paper money represents twice the absorbable amount of gold, each piece of paper money is depreciated to half its nominal value. Just as if gold were changed in its function as the measure of prices, in its value. (P.89 ) a. Hoarding With the earliest development of commodity circulation, there develops the need, and the passionate desire, to hold fast the product of C - M, money. From a mere agency of change of matter, this change of form becomes an end in itself. Money petrifies into a hoard; the commodity seller becomes a money hoarder. (P.91 ) This form was dominant precisely in the beginnings of commodity circulation. Asia. With further development of commodity circulation, every producer of commodities must secure for himself the nexus rerum, the social pledge-money. Thus, hoards accumulate everywhere. The development of commodity circulation increases the power of money, the absolutely social form of wealth, always ready for use. (P.92 ) The urge for hoarding is, by nature, boundless. Qualitatively, or with respect to its form, money is unrestricted i.e., the universal representative of material wealth because it is directly convertible into any commodity. But, quantitatively, every actual sum of money is limited and, therefore, of only limited efficacy as a means of purchasing. This contradiction always drives the hoarder back, again and again, to the Sisyphus-like (vain) labour of accumulation. Besides, the accumulation of gold and silver in plate creates both a new market for these metals and a latent source of money. Hoarding serves as a conduit for supplying or withdrawing circulating money with the continuous fluctuations in the degree of saturation of the circulation. (P.95 ) b. Means of Payment With the development of commodity circulation, new conditions appear: the alienation of a commodity can be separated in time from the realization of its price. Commodities require different periods of time for their production; they are produced in different seasons; some must be sent to distant markets, etc. Hence, A can be a seller before B, the buyer, is able to pay. Practice regulates the conditions of payment in this way: A becomes a creditor, B a debtor: money becomes a means of payment. Thus, the relation of creditor and debtor already becomes more antagonistic. (This can also occur independently of commodity circulation e.g., in antiquity and the Middle Ages.) (P.97 ) In this relation, money functions: In the hoard, money was withdrawn from circulation; here, being a means of payment, money enters circulation, but only after the commodity has left it. The indebted buyer sells in order to be able to pay, or he will be put up for auction. Therefore, money now becomes the sale's end in itself through a social necessity arising out of the relations of the very circulation process. (Pp.97-98 ) The lack of simultaneity of purchases and sales, which gives rise to the function of money as a means of payment, at the same time effects an economy of the circulation media, payments being concentrated at a definite place. The virements (remittance by draft from own account to another) in Lyons in the Middle Ages a sort of clearing-house, where only the net balance of the mutual claims is paid. (P.98 ) Insofar as the payments balance one another, money functions only ideally, as money of account or measure of values. Insofar as actual payment has to be made, it does not appear as a circulating medium, as only the vanishing and mediating form of metabolism, but as the individual embodiment of social labour, as the independent existence of exchange-value, as the absolute commodity. This direct contradiction breaks out in that phase of production and commercial crises that is called a monetary crisis. It occurs only where the progressing chain of payments, and an artificial system of settling them, are fully developed. With more general disturbances of this mechanism, no matter what their origin, money changes suddenly and immediately from its merely ideal shape of money of account into hard cash; profane commodities can no longer replace it. (P.99 ) Credit money originates in the function of money as a means of payment; certificates of debt themselves circulate, in turn, to transfer these debts to others. With the system of credit, the function of money as a means of payment again expands; in that capacity, money acquires its own forms of existence, in which it occupies the sphere of large-scale commercial transactions, while coin is largely relegated to the sphere of retail trade. (P.101 [139-40]) At a certain stage and volume of commodity production, the function of money-as-a-means-of-payment spreads beyond the sphere of the circulation of commodities; it becomes the universal commodity of contracts. Rents, taxes, and the like, are transformed from payments in kind into money payments. Cf. France under Louis XIV. (Boisguillebert and Vauban); on the other hand, Asia, Turkey, Japan, etc. (P.102 [140-41]) The development of money into a means of payment necessitates the accumulation of money against the date when payment is due. Hoarding, which, as a distinct form of acquiring riches, vanished as society further developed, again appears as a reserve fund of the means of payment. (P.103 ) c. Universal Money In world trade, the local forms of coin small coinage, and paper money are discarded and only the bullion form of money is valid as universal money. Only in the world market does money function to the full extent as the commodity whose bodily form is at the same time the immediate social incarnation of human labour in the abstract. Its mode of existence becomes adequate to its concept. (Pp.103-04 ; details p.105 )

Economic Manuscripts: Frederick Engels: Synopsis of Capital

https://www.marxists.org/archive/marx/works/1867-c1/1868-syn/ch01.htm

The circulation of commodities is the starting point of capital. Hence, commodity production, commodity circulation, and the latter's developed form, commerce, are always the historical groundwork from which capital arises. The modern history of capital dates from the creation of modern world trade and the world market in the 16th century. (P.106 ) If we consider only the economic forms produced by commodity circulation, we find that its final product is money, and the latter is the first form in which capital appears. Historically, capital invariably confront landed property at first as moneyed wealth, the capital of the merchant and the usurer, and even today all new capital first comes on the stage in the shape of money that by definite processes has to be transformed into capital. Money-as-money and money-as-capital differ, to being with, only in their form of circulation. Alongside C - M - C, the form M - C - M, buying in order to sell, also occurs. Money that describes this form of circulation in its movement becomes capital, is already capital in itself i.e., by its destination. The result of M - C - M is M - M the indirect exchange of money for money. I buy cotton for 100 pounds sterling and sell it for 110; ultimately, I have exchanged 100 for 110, money for money. If this process yielded at its outcome the same money-value that was originally put into it 100 pounds sterling out of 100 it would be absurd. Yet, whether the merchant realizes 100, 110, or merely 50 for his 100 pounds sterling, his money has described a specific movement quite different from that of commodity circulation, C - M - C. From the examination of the differences in form between this movement and C - M - C, the difference in content will also be found. The two phases of the process, taken separately, are the same as in C - M - C. But, there is a great difference in the process as a whole. In C - M - C, money constitutes the intermediary, the commodity the starting point and the finish; in this case, the commodity is the intermediary, with money the starting point and the finish. In C - M - C, the money is spent once and for all; in M - C - M, it is merely advanced, it is to be got back again. It flows back to its starting point. Here, therefore, is already a palpable difference between the circulation of money-as-money and money-as-capital. In C - M - C, money can return to its starting point only through the repetition of the whole process, through the sale of fresh commodities. Hence, the reflux is independent of the process itself. In M - C - M, on the other hand, it is conditioned from the outset by the structure of the process itself, which is incomplete if the return flow fails. (P.110 ) The ultimate object of C - M - C is use-value, that of M - C - M exchange-value itself. In C - M - C, both extremes possess the same definiteness of economic form. Both are commodities, and of equal value. But, at the same time, they are qualitatively different use-values, and the process has social metabolism as its content. In M - C - M, the operation, at first glance, seems tautological, purposeless. To exchange 100 pounds for 100 pounds, and in a roundabout way to boot, seems absurd. One sum of money is distinguishable from another only by its size; M - C - M acquires its meaning, therefore, only through the quantitative difference in the extremes. More money is withdrawn from circulation than has been thrown into it. The cotton bought for 100 is sold, say, for 100 + 10; the process, thus, follows the formula M - C - M', where M' = M + delta-M. [The delta-symbol, actually being a triangle, representing the difference, the change in amount.] This delta-M, this increment, is surplus-value. The value originally advanced not only remains intact in circulation, but adds to itself a surplus-value, expands itself and this movement converts money into capital. In C - M - C, they may also be a difference in the value of the extremes, but it is purely accidental in this form of circulation, and C - M - C does not become absurd when the extremes are equivalent on the contrary, this is rather the necessary conditions for the normal process. The repetition of C - M - C is regulated by an ultimate object outside itself; consumption, the satisfaction of definite needs. In M - C - M, on the other hand, the beginning and the end are the same money and that already makes the movement endless. Granted, M + delta-M differs quantitatively from M, but it, too, is merely a limited sum of money; if it were spent, it would no longer be capital; if it were withdrawn from circulation, it would remain stationary as a hoard. Once the need for expansion of value is given, it sexists for M' as well as for M, and the movement of capital is boundless, because its goal is as much unattained at the end of the process as at the beginning. (Pp.111,112 [149-51]) As the representative of this process, the owner of money becomes a capitalist. If, in commodity circulation, the exchange-value attains at most a form independent of the use-value of commodities, it suddenly manifests itself here as a substance in process, endowed with motion of its own, for which commodity and money are mere forms. More than that, as original value, it is differentiated from itself as surplus-value. It becomes money in process, and as such, capital. (P.116 ) M - C - M' appears, indeed, to be a form peculiar to merchant's capital alone. BUt, industrial capital, too, is money which is converted into commodities, and by the latter's sale reconverted into more money. Acts that take place between purchase and sale, outside the sphere of circulation, effect no change in this. Lastly, in interest-bearing capital, the process appears as M - M' without any intermediary, value that is, as it were, greater than itself. (P.117 ) The form of circulation by which money becomes capital contradicts all previous laws bearing on the nature of commodities, of value, of money and of circulation itself. Can the purely formal differences of inverted order of succession cause this? What is more, this inversion exists only for one of the three transacting persons. As a capitalist, I buy commodities from A and sell them to B. A and B appear merely as simple buyers and sellers of commodities. In both cases, I confront them merely as a simple owner of money or owner of commodities, confronting one as buyer or money, the other as seller or commodity, but neither of them as a capitalist or a representative of something that is more than money or commodity. For A, the transaction began with a sale; for B, it ended with a purchase, hence, just as in commodity circulation. Moreover, if I base the right to surplus-value upon the simple sequence, A could sell to B directly and the chance of surplus-value would be eliminated. Assume that A and B buy commodities from each other directly. As far as use-value is concerned, both may profit; A may even produce more of his commodity than B could produce in the same time, and vice versa, whereby both would profit again. But otherwise with exchange-value. Here, equal values are exchanged for each other, even if money, as the medium of circulation, intervenes. (P.119 [156-58]) Abstractly considered, only a change in form of the commodity takes places in simple commodity circulation, if we except the substitution of one use-value for another. So far, as it involves only a change in form of its exchange-value, it involves the exchange of equivalents, if the phenomenon proceeds in a pure form. Commodities can, indeed, be sold at prices differing from their values, but this would mean a violation of the law of commodity exchange. In its pure form, it is an exchange of equivalents, hence no medium for enriching oneself. (P.120 [158-59]) Hence, the error of all endeavors to derive surplus-value from commodity circulation. Condillac (P.121 ), Newman (P.122 ). But let us assume that the exchange does not take place in a pure form, that non-equivalents are exchanged. Let us assume that each seller sells his commodity at 10 per cent above its value. everything remains the same; what each one gains as a seller, he loses in turn as a buyer. Just as if the value of money had changed by 10 per cent. Likewise, if the buyers bought everything at 10 per cent below value. (P.123 [160-61], Torrens.) The assumption that surplus-value arises from a rise in prices presupposes that a class exists which buys and does not sell i.e., consumers and does not produce, which constantly receives money gratis. To sell commodities above their value to this class means merely to get back, by cheating, part of the money given away gratis. (Asia Minor and Rome.) Yet, the seller always remains the cheated one and cannot grow richer, cannot form surplus-value thereby. Let us take the case of cheating. A sells to B wine worth 40 pounds sterling in exchange for grain worth 50. A has gained 10. But A and B together have only 90. A has 50 and B only 40; value has been transferred but not created. The capitalist class, as a whole, in any country, cannot cheat itself. (P.126 [162-63]) Hence: if equivalents are exchanged, no surplus-value results; and if non-equivalents are exchanged, still no surplus-value results. Commodity circulation creates no new value. That is why the oldest and most popular forms of capital merchant capital and usurers' capital are not considered here. If the expansion of merchant capital is not to be explained by mere cheating, many intermediate factors, lacking here as yet, are required. Even more so for usurers', and interest-bearing, capital. It will later be seen that both are derived forms, and why they occur historically before modern capital. Hence, surplus-value cannot originate in circulation. But outside it? Outside it, the commodity owner is the simple producer of his commodity, the value of which depends upon the quantity of his own labour, contained in it, measured according to a definite social law; this value is expressed in money of account e.g., in a price of 10 pounds. BUt this value is not at the same time a value of 11 pounds; his labour creates values, but not self-expanding values. It can add more value to existing value, but this occurs only through the addition of more labour. Thus, the commodity producer cannot produce surplus-value outside the sphere of circulation, without coming in contact with other commodity owners. Hence, capital must originate in commodity, yet not in it. (P.128 [165-66]) Thus: The change in value of money that is to be converted into capital cannot take place in that money itself, for in buying, it merely realizes the price of the commodity; and on the other hand, as long as it remains money, it does not change the magnitude of its value; and in selling, too, it merely converts the commodity from its bodily form into its money-form. The change must, therefore, take place in the commodity of M - C - M; but not in its exchange-value, since equivalents are exchanged; it can only arise from its use-value as such that is, from its consumption. For that purpose, a commodity is required whose use-value possess the property of being the source of exchange-value and this does exist labour-power. (P.130 ) But, for the owner of money to find labour-power in the market as a commodity, it must be sold by its own possessor that is, it must be free labour-power. Since buyer and seller as contracting parties are both juridically equal persons, labour-power must be sold only temporarily since in a sale, en bloc, the seller no longer remains the seller, but becomes a commodity himself. But then the owner, instead of being able to sell commodities in which his labour is embodied, must rather be in a position where he has to sell his labour-power itself as a commodity. (P.131 [168-69]) For the conversion of his money into capital, therefore, the owner of money must find in the commodity market the free labourer, free in the double sense that as a free man he can dispose of his labour-power as his commodity, and that, on the other hand, he has no other commodities to sell, has no ties, is free of all things necessary for the realization of his labour-power. (P.132 [168-69]) Parenthetically, the relation between money owner and labour-power owner is not a natural one, or a social one common to all ages, but a historical one, the product of many economic revolutions. So, too, do the economic categories considered up to now bear their historical stamp. To become a commodity, a product must no longer be produced as the immediate means of subsistence. The mass of products can assume commodity-form only within a specific mode of production, the capitalist mode, although commodity production and circulation can take place even where the mass of products never become commodities. Likewise, money can exist in all periods that have attained a certain level of commodity circulation; the specific money-forms, from mere equivalent to world money, presuppose various stages of development; nevertheless, a very slightly developed circulation of commodities can give rise to all of them. Capital, on the other hand, arises only under the above condition, and this one condition comprises a world's history. (P.133 [169-70]) Labour-power has an exchange-value which is determined, like that of all other commodities, by the labour-time required for its production, and hence for its reproduction aa well. The value of labour-power is the value of the means of subsistence necessary for the maintenance of its owner that is, his maintenance in a state of normal capacity for work. This depends upon climate, natural conditions, etc., and also on the given historical standard of life in each country and for each particular epoch. Moreover, his maintenance includes the means of subsistence for his substitutes i.e., his children in order that the race of these peculiar commodity owners may perpetuate itself. Furthermore, for skilled labour, the cost of education. (P.135 [170-72]) The minimum limit of the value of labour-power is the value of the physically indispensable means of subsistence. If the price of labour-power falls to this minimum, it falls below its value, since the latter presupposes normal, not stunted, quality of labour-power. (P.135 ) The nature of labour implies that labour-power is consumed only after conclusion of the contract, and, as money is usually the means of payment for such commodities in all countries with the capitalist mode of production, the labour-power is paid for only after it is consumed. everywhere, therefore, the labourer gives credit to the capitalist. (P.137,138 ) The process of consuming labour-power is at the same time the process of producing commodities and surplus-value and this consumption takes place outside the sphere of circulation. (P.140 [175-76])

Economic Manuscripts: Frederick Engels: Synopsis of Capital

https://www.marxists.org/archive/marx/works/1867-c1/1868-syn/ch02.htm

The purchaser of labor-power consumes it by setting its seller to work. This labor-to-produce-commodities at first turns out use-values, and in this property it is independent of the specific relation between capitalist and labourer.... Description of the labor process as such. (Pp.141-49 [177-85]) The labor process, on a capitalist basis, has two peculiarities: But the capitalist does not want the use-value produced for its own sake, but only as the depository of exchange-value, and especially of surplus-value. Labor, under this condition where the commodity was a unity of use-value and exchange-value becomes the unity of the production process and of the process creating value. (P.151 ) Thus, the quantity of labor embodied in the product is to be investigated. Yarn, for example. Let 10 lbs. of cotton be necessary for making it, say, 10 shillings, and instruments of labor whose wear and tear are inevitable in the spinning, here denoted in brief as spindle share say, 2 shilling. Thus, there are 12 shillings' worth of means of production in the product i.e., inasmuch as How much is added to it by the labor of spinning? The labor process is here viewed from an altogether different angle. In the value of the product, the labors of the cotton-planter, of the spindle-maker, etc., and of the spinner, are commensurable, qualitatively equal parts of general, human, necessary value-creating labor, and therefore distinguishable only qualitatively, and for that very reason quantitatively comparable by the length of time, presupposing that it is socially necessary labor-time, for only the latter is value-creating. Assumed the value of a day's labor-power is 3 shillings, and that it represents 6 hours of labor, that 1 2/3 lbs. of yarn are made per hour, hence in 6 hours: 10 lbs. of yarn from 10 lbs. of cotton (as above); then 3 shillings of value have been added in 6 hours, and the value of the product is 15 shillings (10 + 2 + 3 shillings), or a shilling and a half per pound of yarn. But in this case there is no surplus-value. That is of no use to the capitalist. (Vulgar-economic humbug, p.157 ) We assumed that the value of a day's labor-power was 3 shillings, because 1/2 working-day, or 6 hours, is incorporated in it. But the fact that only 1/2 working-day is required to maintain the worker for 24 hours does not in any way prevent him from working a whole day. The value of labor-power, and the value it creates, are two different quantities. Its useful property was only a conditio sine qua non; but what was decisive was the specific use-value of labor-power in being the source of more exchange-value than it has itself. (P.159 ) Hence, the labourer works 12 hours, spins 20 lbs. of cotton worth 20 shillings and 4 shillings' worth of spindles, and his labor costs 3 shillings: total 27 shillings. But, in the product there are embodied: four days' labor in the shape of spindles and cotton, and one day's labor of the spinner, in all five days at 6 shillings totalling 30 shillings' value of product. We have a surplus-value of 3 shillings: money has been converted into capital. (P.160 ) All the conditions of the problem are fulfilled. (Detail p.160 ) As a value-creating process, the labor process becomes a process of producing surplus-value the moment it is prolonged beyond the point where it delivers a simple equivalent for the paid-for value of labor-power. The value-creating process differs from the simple labor process in that the latter is considered qualitatively, and only to the extent that it comprises socially necessary labor-time. (P.161 , details p.162 ) As the unity of labor process and value-creating process, the production process is the production of commodities; as the unity of labor process and the process of producing surplus-value, it is the process of capitalist production of commodities. (P.163 ) Reduction of compound labor to simple labor. (Pp.163-65 [197-98]) The labor process adds new value to the object of labor but, at the same time, it transfers the value of the object of labor to the product, thus preserving it by merely adding new value. This double result is attained in this manner: the specifically useful qualitative character of labor converts one use-value into another use-value and thus preserves value; the value-creating, abstractly general, quantitative character of labor, however, adds value. (P.166 ) E.g. let the productivity of spinning labor multiply sixfold. As useful (qualitative) labor, it preserves in the same time six-times as many instruments of labor. But it adds only the same new value as before i.e., in each pound of yarn, there is only 1/6 of the new value previously added. As value-creating labor, it accomplishes no more than before. (P.167 ) The contrary is true, if the productivity of spinning labor remains the same, but the value of the instruments of labor rises. (P.168 ) The instruments of labor transfer to the product only that value which they lose themselves. (P.169 ) This is the case in differing degree. Coal, lubricants, etc., are consumed completely raw materials take on a new form. Instruments, machinery, etc., transmit value only slowly and by parts and the wear and tear are calculated by experience. (Pp.169-70 ) But the instrument remains continually as a whole in the labor process. Therefore, the same instrument counts as a whole in the labor process, but only partly in the process of producing surplus-value, so that the difference between the two processes is reflected here in material factors. (P.171 ) Conversely, the raw material, which forms waste, enters wholly into the process of producing surplus-value, and only partly into the labor process, since it appears in the product minus the waste. (P.171 ) But, in no case can an instrument of labor transfer more exchange-value than it possessed itself in the labor process it acts only as a use-value and, hence, can give only the exchange-value that it possessed previously. (P.172 [205-06]) This preserving of value is very advantageous to the capitalist, but costs him nothing. (P.173,174 [205,207]) Yet, the preserved value only re-appears, it was already present, and only the labor process adds new value. That is, in capitalist production, surplus-value, the excess of the product's value over the value of the consumed elements of the product (means of production and labor-power). (Pp.175,176 ) Herewith have been described the forms of existence which the original capital value takes on in dropping its money-form, in being converted into factors of the labor process: The capital invested in instruments of labor does not, therefore, alter the magnitude of its value in the production process. We call it CONSTANT capital. The portion invested in labor-power does change its value; it produces: Capital is constant only in relation to the production process specifically given, in which it does not change; it can consist sometimes of more, sometimes of fewer instruments of labor, and the purchased instruments of labor may rise or fall in value, but that does not affect their relationship to the production process. (P.177 [210-11]) Likewise, the percentage in which a given capital is subdivided into constant and variable capital may change, but in any given case, the c remains constant and the v variable. (P.178 ) At the end of the labor process in which v is turned into labor-power, we get 410c + 90v + 90s = 590. Let us assume c consists of 312 raw material, 44 auxiliary material, and 54 wear and tear of machinery in all 410. Let the value of all the machinery be 1,054. If this were entered as a whole, we would get 1,410 for c on both sides of our calculation; the surplus-value would remain 90 as before. (P.179 ) Since the value of c merely re-appears in the product, the value of the product we get differs from the value created in the process; the latter, therefore, equals not c + v + s, but v + s. Hence, the magnitude of c is immaterial to the process of creating surplus-value i.e., c = 0. (P.180 ) This also takes place in practice in commercial accounting e.g., in calculating a country's profit from its industry, imported raw material is deducted. (P.181 ) Cf. Vol.III for the ratio of surplus-value to total capital. Hence: the rate of surplus-value is s:v, in the above case 90:90 = 100%. The labor-time during which the labourer reproduces the value of his labor-power in capitalist or other circumstances is the NECESSARY LABOR; what goes beyond that, producing surplus-value for the capitalist, SURPLUS-LABOR. (Pp.183,184 [215,217]) Surplus-value is congealed surplus-labor, and only the form of extorting the same differentiates the various social formations. Example of the incorrectness of including c pp.185-96 [217-29] (Senior) The sum of the necessary labor and the surplus-labor equals the working-day. The necessary labor-time is given. The surplus-labor is variable but within certain limits. It can never be reduced to nil, since then capitalist production ceases. It can never go as high as 24 hours for physical reasons, and, moreover, the maximum limit is always affected by moral grounds as well. But, these limits are very elastic. The economic demand is that the working-day should be no longer than for normal wear-and-tear of the worker. But what is normal? An antinomy results and only force can decide. Hence, the struggle between the working class and the capitalist class for the normal working-day. (Pp.198-202 [231-35]) Surplus-labor in previous social epochs. As long as the exchange-value is not more important than the use-value, surplus-labor is milder e.g., among the ancients; only where direct exchange-value gold and silver was produced, surplus-labor was terrible. (P.203 ) Likewise, in the slave states of America until the mass production of cotton for export. Likewise, corvee labor e.g., in Rumania. Corvee labor is the best means of comparison with capitalist exploitation, because the former fixes and shows the surplus-labor as a specific labor-time to be performed Reglement organique of Wallachia. (Pp.204-06 [235-36]) The English Factory Acts are negative expression of the greed for surplus-labor, just as the foregoing was its positive expression. THE FACTORY ACTS. That of 1850 (p.207 ). 10.5 hours and 7.5 on Saturdays = 60 hours per week. Mill-owners' profit through evasion. (Pp.208-11 [240-43]) Exploitation in unrestricted, or only later-restricted, branches: These facts prove that capital regards the labourer as nothing else than labor-power, all of whose time is labor-time as far as this is at all possible at a given moment, and that the length of life of labor-power is immaterial to the capitalists. (Pp.236-38 [264-65]) But is this not against the interests of the capitalist? What about the replacement of what is rapidly worn out? The organized slave trade in the interior of the United States has raised the rapid wearing out of slaves to an economic principle, exactly like the supply of labourers from the rural districts in Europe, etc. (P.239 ) Poorhouse supply (labor-power provided by poorhouses). (P.240 ) The capitalist sees only the continuously available surplus-population and wears it out. Whether the race perishes apres moi le deluge. Capital is reckless of the health or length of life of the labourer, unless under compulsion from society... and free competition brings out the inherent laws of capitalist production in the shape of external coercive laws having power over every individual capitalist. (P.243 ) Establishment of a normal working-day the result of centuries of struggle between capitalist and labourer. At the beginning, laws were made to raise working-time; now to lower it. (P.244 ) Only with modern large-scale industry was this, and more, achieved; it broke down all bounds and exploited the workers most shamelessly. The proletariat resisted as soon as it recollected itself. The relay system and its abuse for purposes of evasion. (P.256 ) Large-scale industry, thus, at first creates the need for limiting working-time, but it later found that the same overwork has gradually taken possession of all other branches as well. (P.277 History further shows that the isolated "free" labourer is defenceless against the capitalist and succumbs, especially with the introduction of women's and children's labor, so that it is here that the class struggle develops between the workers and the capitalists. (P.278 ) In France, the 12-hour day law for all ages and branches of work was passed only in 1846, (Cf., however, p.253 , footernote on the French child labor law of 1841, which was really enforced only in 1853, and only in the Department du Nord.) Complete "freedom of labour" in Belgium. The 8-hour movement in America. (P.279 ) Thus, the labourer comes out of the production process quite different than he entered. The labour contract was not the act of a free agent; the time for which he is free to sell his labour-power is the time for which he is forced to sell it, and only the mass opposition of the workers wins for them the passing of a law that shall prevent the workers from selling, by voluntary contract with capital, themselves and their generation into slavery and death. In place of the pompous catalogue of the inalienable rights of man, comes the modest Magna Charta of the Factory Act. (Pp.280,281 ) With the rate, the mass is also given. If the daily value of one labour-power is 3 shillings, and the rate of surplus-value is 100 per cent, its daily mass = 3 shillings, for one labourer. This seems to contradict all facts. For a given society, and a given working-day, surplus-value can be increased only by increasing the number of workers i.e., the population; with a given number of workers, only by lengthening the working-day. This is important, however, only for absolute surplus-value. It now turns out that not every sum of money can be transformed into capital that a minimum exists: the cost price of a single labour-power and of the necessary instruments of labour. In order to be able to live like a worker, the capitalist would have to have two workers, with a rate of surplus-value of 50 per cent, and yet save nothing. Even with eight, he is still a small master. Hence, in the Middle Ages people were forcibly hampered in transformation from craftsmen into capitalists by limitation of the number of journeymen to be employed by one master. The minimum of wealth required to form a real capitalist varies in different periods and branches of business. (P.288 ) Capital has evolved into command over labour, and sees to it that work is done regularly and intensively. Moreover, it compels the workers to do more work than is necessary for their sustenance; and, in pumping out surplus-labour, it surpasses all earlier production systems based upon direct compulsory labour. Capital takes over labour with the given technical conditions, and at first does not change them. Hence, with the production process considered as a labour process, the worker stands in relation to the means of production not as to capital, but as to the means of his own intelligent activity. But, considered as a process of creating surplus-value, otherwise. The means of production become means of absorbing the labour of others. It is no longer the labourer who employs the means of production, but the means of production that employ the labourer. (P.289 ) Instead of being consumed by him... they consume him, as the ferment necessary to their own life-process, and the life-process of capital consists only in its movement as value constantly multiplying itself.... The simple transformation of money into means of production transforms the latter into a title and a right to the labour and surplus-labour of others.

Economic Manuscripts: Frederick Engels: Synopsis of Capital

https://www.marxists.org/archive/marx/works/1867-c1/1868-syn/ch03.htm

For a given working-day, surplus-labour can be increased only by reducing the necessary labour; this can, in turn, be obtained apart from lowering wages below value only by reducing the value of labour, that is, by reducing the price of the necessary means of subsistence. (Pp.291-93 [312-15]) This, in turn, is to be attained only by increasing the productive power of labour, by revolutionizing the mode of production itself. The surplus-value produced by lenthening the working-day is absolute; that produced by shortening the necessary labour-time, is relative surplus-value. (P.295 ) In order to lower the value of labour, the increase in productive power must seize upon those branches of industry whose products determine the value of labour-power ordinary means of subsistence, substitutes for the same, and their raw materials, etc. Proof of how competition makes the increased productive power manifest in a lower commodity price. (Pp.296-99 [316-19]) The value of commodities is in inverse ratio to the productivity of labour as is also the value of labour-power because it depends on the price of commodities. Relative surplus-value, on the contrary, is directly proportional to the productivity of labour. (P.299 ) The capitalists is not interested in the absolute value of commodities, but only in the surplus-value incorporated in them. Realization of surplus-value implies refunding of the value advanced. Since, according to p.299 , the same process of increasing productive power lowers the value of commodities and increases the surplus-value contained in them, it is clear why the capitalist, whose sole concern is the production of exchange-value, continually strives to depress the exchange-value of commodities. (Cf. Quesnay, p.300 ) Hence, in capitalist production, economizing labour through developing productive power by no means aims at shortening the working-day the latter may even be lengthened. We may read, therefore, in economists of the stamp of McCulloch, Ure, Senior, and tutti quanti, on one page that the labourer owes a debt of gratitude to capital for developing the productive forces, and on the next page that he must prove his gratitude by working in future for 15 hours instead of 10. The object of this development of productive forces is only to shorten the necessary labour and to lengthen the labour for the capitalist. According to p.288 , capitalist production requires an individual capital big enough to employ a fairly large number of workers at a time; only when he himself is wholly released from labour does the employer of labour become a full-grown capitalist. The activity of a large number of workers, at the same time, in the same field of work, for the production of the same kind of commodity, under the command of the same capitalist, constitutes, historically and logically, the starting point of capitalist production. (P.302 ) At first, therefore, there is only a quantitative difference compared to the past, when fewer labourers were employed by one employer. But a modification takes place at once. The large number of labourers already guarantees that the employer gets real average labour, which is not the case with the small master, who must pay the average value of labour nonetheless; in the case of small production, the inequalities are compensated for society at large, but not for the individual master. Thus, the law of the production of surplus-value is fully realized for the individual producer only when he produces as a capitalist, and sets many labourers to work at the same time hence, from the outset, average social labour. (Pp.303-04 [322-24]) Moreover: economy in means of production is achieved through large-scale operation alone; less transfer of value to the product by constant capital components arises solely from their joint consumption in the labour process of many workmen. That is how the instruments of labour acquire a social character before the labour process itself does so up to this time, merely similar processes side-by-side. (P.305 ) The economy in the means of production is to be considered here only insofar as it cheapens commodities and, thus, lowers the value of labour. The extent to which it alters the ratio of surplus-value to the total capital advanced (c + v) will not be considered until Book III. This splitting up is quite in keeping with the spirit of capitalist production; since it makes the working conditions confront the worker independently, economy in the means of production appears to be a distinct operation, which does not concern him and has, therefore, no connection with the methods by which the productivity of the labour-power consumed by the capitalist is increased. The form of labour of many persons, methodically working together and alongside one another in the same production process, or in related processes, is called co-operation. (P.306 ) (Concours des forces. Destutt de Tracy.) The sum-total of the mechanical forces of individual workers differs substantially from the potential mechanical force developed when many hands act together at one time in the same undivided operation (lifting weights, etc.). Co-operation, from the very start, creates a productive power that is, in itself, a mass power. Furthermore, in most productive work, mere social contact creates a spirit of emulation which raises the individual efficiency of each, so that 12 workers turn out more work in a joint working-day of 144 hours than 12 workers in 12 distinct working-days, or one worker in 12 successive days. (P.307 ) Although many may be doing the same or similar things, the individual labour of each may still represent a different phase of the labour process (chains of persons passing something along), whereby co-operation again saves labour. Likewise, when a building is started from several sides at once. The combined worker, or collective worker, has hands and eyes before and behind and is, to a certain degree, omnipresent. (P.308 ) In complicated labour processes, co-operation permits the special processes to be distributed and to be done simultaneously, thus shortening the labour-time for manufacturing the whole product. (P.308 ) In many spheres of production, there are critical periods when many workers are needed (harvesting, herring catches, etc.). Here, only co-operation can be of aid. (P.309 ) On the one hand, co-operation extends the field of production and, thus, becomes a necessity for work requiring great spatial continuity of the working arena (drainage, road-building, dam construction, etc.); on the other hand, it contracts the arena by concentrating the workers in one work-place, thus cutting down costs. (P.310 [328-29]) In all these forms, co-operation is the specific productive power of the combined working-day, social productive power of labour. The latter arises from co-operation itself. In systematic joint work with others, the worker sheds his individual limitations and develops the capabilities of his species. Now, wage-labourers cannot co-operate unless the same capitalist employs them simultaneously, pays them and provides them with instruments of labour. Hence, the scale of co-operation depends upon how much capital a capitalist has. The requirement that a certain amount of capital be present to make its owner a capitalist now becomes the material condition for the conversion of the numerous dispersed and independent labour processes into one combined social labour process. In a like manner, capital's command over labour was, up to now, only the formal result of the relation between capitalist and labourer; now it is the necessary prerequisite for the labour process itself; the capitalist represents combination in the labour process. In co-operation, control of the labour process becomes the function of capital, and, as such, it acquires specific characteristics. (P.312 ) In accordance with the aim of capitalist production the greatest possible self-expansion of capital this control is at the same time the function of the greatest possible exploitation of a social labour process, and, hence, involves the inevitable antagonism between exploiter and exploited. Moreover, control of proper utilization of the instruments of labour. Finally, the connection between the various workers' functions lies outside them, in capital, so that their own unity confronts them as the capitalist's authority, as an outside will. Capitalist control is, thus, twofold and in its form despotic. This despotism now evolves its own peculiar forms: the capitalist, just relieved from actual labour himself, now hands over immediate supervision to an organized band of officers and non-coms, who themselves are wage-labourers of capital. In slavery, the economists count these supervision expenses as faux frais; but in capitalist production, they bluntly identify control, so far as it arises from the nature of the social labour process. (Pp.313,314 [332,332]) The leadership of industry becomes the attribute of capital, just as in feudal times the functions of general and judge were attributes of landed property. (P.314 ) The capitalist buys 100 individual labour-powers, and gets, in return, a combined labour-power of 100. He does not pay for the combined labour-power of 100. When the labourers enter the combined labour process, they already cease to belong to themselves; they are incorporated in capital. Thus, the social productive power of labour appears as the productive power immanent in capital. (P.315 ) Examples of co-operation among the ancient Egyptians. (P.316 [333-34]) Primitive co-operation at the beginnings of civilization, among hunting peoples, nomads, or in Indian communities, is based: The sporadic co-operation in antiquity, the Middle Ages, and in modern colonies is based upon direct rule and violence, mostly slavery. Capitalist co-operation, on the contrary, presupposes the free wage-labourer. Historically, it appears in direct opposition to peasant economy and the independent handicrafts (whether in guilds or not), and in this connection, as a historical form peculiar to, and distinguishing, the capitalist production process. It is the first change experienced by the labour process when subjected to capital. Thus, here at once: Co-operation, as considered so far, in its elementary form, coincides with production on a larger scale, but it does not constitute a fixed form characteristic of a particular epoch, of capitalist production, and it still exists today, when capital operates on a large scale without division of labour, or machinery playing an important part. Thus, although co-operation is the basic form of the whole capitalist production, its elementary form appears as a particular form alongside its more developed forms. (P.318 ) Manufacture, the classic form of co-operation based upon division of labour, prevails from about 1550 to 1770. It arises: In both cases, their result is a productive mechanism whose organs are human beings. The work retains a handicraft nature; each detail process through which the product goes must be performable by hand; hence, any really scientific analysis of the production process is excluded. Each individual worker is completely chained to a detail function because of its handicraft nature. (P.321 [338-39]) In this way, labour is saved as compared to the craftsman and this is increased still more by transmission to succeeding generations. Thus, the division of labour in manufacture corresponds to the tendency of former societies to make a trade hereditary. Castes, guilds. (P.322 [339-40]) Subdivision of tools through adaptation to the various partial operations 500 kinds of hammers in Birmingham. (Pp.323-24 ) Manufacture, considered from the standpoint of its total mechanism, has two aspects: either merely mechanical assembly of independent detail products (watch), or a series of related processes in one workshop (needle). In manufacture, each group of workers supplies another with its raw material. Hence, the basic condition is that each group produces a given quantum in a given time; thus, a continuity, regularity, uniformity, and intensity of labour, of quite a different kind are created than in co-operation proper. Thus, here we have the technical law of the production process: that labour be socially necessary labour. (P.329 ) The inequality of the time required for the individual operations makes it necessary that the different groups of workers be of different size and number (in type founding: four founders and two breakers to one rubber). Thus, manufacture sets up a mathematically fixed ratio for the quantitative extent of the several organs of the collective worker, and production can be expanded only by employing an additional multiple of the whole group. Moreover, only after a definite level of production has been reached does it pay to make certain functions independent: supervision, transporting the products from place to place, etc. (Pp.329,330 ) Combination of various manufactures into a united manufacture also occurs but, as yet, it always lacks real technical unity, which arises only with machinery. (P.331 [347-48]) Machines appeared in manufacture at an early date sporadically grain and stamping mills, etc., but only as something subordinate. The chief machinery of manufacture is the combined collective worker, who possesses a much higher degree of perfection than the old individual craft worker, and in whom all the imperfections, such as are often necessarily developed in the detail worker, such as perfection. (P.333 [348-49]) Manufacture evolves differences among these detail workers, skilled and unskilled, and even a complete hierarchy of workers. (P.334 ) Division of labour: The social division of labour also develops from different starting points. Exchange with these foreign communities is, then, one of the chief mens of breaking off the natural association of the community itself through further development of the natural division of labour. (P.336 ) Division of labour in manufacture, thus, presupposes certain degree of development of the social division of labour; on the other hand, it develops the latter further as in the territorial division of labour. (Pp.337,338 [352,353]) For all that, there is always this difference between social division of labour and division of labour in manufacture that the former produces commodities, whereas in the latter the detail worker does not produce commodities. Hence, concentration and organization in the latter, scattering and disorder of competition in the former. (Pp.339,341 [354,356]) Earlier organization of the Indian communities. (Pp.341,342 ) The guild. (Pp.343-44 [358-59]) Whereas in all these there exists division of labour in society, the division of labour in manufacture is a specific creation of the capitalist mode of production. As in co-operation, the functioning working organism is a form of existence of capital in manufacture as well. Hence, the productive power arising from the combination of labours appears to be the productive power of capital. But, whereas co-operation leaves the individual's mode of working on the whole unchanged, manufacture revolutionizes it, cripples the worker; unable to make a product independently, he is now a mere appendage of the capitalist's workshop. The intellectual faculties of labour disappear as far as the many are concerned, to expand in scope for the one. It is a result of the division of labour in manufacture that the labourers are brought face-to-face with the intellectual potencies of the labour process as the property of another and as a ruling power. This process of separation which begins as early as co-operation, and develops in manufacture is completed in modern industry, which separates science as an independent productive force from labour and presses it into the service of capital. (P.346 ) Illustrative quotations. (P.347 [362-63]) Manufacture, in one aspect a definite organization of social labour, is, in another, only a particular method of begetting relative surplus-value. (P.350 ) Historical significance ibidem. Obstacles to the development of manufacture, even during its classical period, are limitations of the number of unskilled workers owning to the predominance of the skilled; limitation of the work of women and children owing to the men's resistance; the insistence on the laws of apprenticeship up to recent times, even where superfluous; continual insubordination of the workers, since the collective worker as yet possesses no framework independent of the workers; emigration of the workers. (Pp.353,354 [367,368]) Besides, manufacture itself was unable to revolutionize the whole of social production, or even merely to dominate it. Its narrow technical basis came into conflict with the production requirement that it had created. The machine became necessary, and manufacture had already learned how to make it. (P.355 ) The revolution in the mode of production, starting in manufacture with labour-power, here starts with the instruments of labour. All fully-developed machinery consists of The industrial revolution of the 18th century started with the working machine. What characterizes it is that the tool in a more or less modified form is transferred from man to the machine, and is worked by the machine under the operation of man. At the outset, it is immaterial whether the motive power is human or a natural one. The specific difference is that man uses only his own organs while the machine can, within certain limits, employ as many tools as demanded. (Spinning-wheel, 1 spindle; jenny, 12 to 18 spindles.) So far, in the spinning-wheel, it is not the treadle, the power, but the spindle that is affected by the industrial revolution at the beginning, man is still motive power and tender at the same time everywhere. The revolution of the working machine, on the contrary, first made the perfecting of the steam-engine a necessity, and then also carried it out. (Pp.359-60 [374-75]; also, pp.361-62 [376-77]) Two kinds of machinery in modern industry: either The natural basis for this is the division of labour in manufacture. But, at once, an essential difference. In manufacture, every detail process had to be adapted to the labourer; this is no longer necessary here the labour process can be objectively dissected into its component parts, which is then left to science, or to experience based upon it, to be mastered by machines. Here, the quantitative ratio of the several groups of workers is repeated as the ratio of the several groups of machines. (Pp.363-66 [378-79]) In both cases, the factory constitutes a big automaton (moreover, perfected to that shape only recently) and this is its adequate form. (P.367 ) And its most perfect form is the machine-building automaton, which abolished the handicraft and manufacture foundation of large-scale industry, and thus first provided the consummate form of machinery. (P.369-72 [384-86]) Connection between the revolutionizing of the various branches, up to the means of communication. (P.371 ) In manufacture, the combination of workers is subjective. Here, there is an objective mechanical production organism, which the worker finds ready at hand, and which can function only through collective labour: the co-operative character of the labour process is now a technical necessity. (P.372 ) The productive forces arising from co-operation and the division of labour cost capital nothing; the natural forces: steam, water, also cost nothing. Neither do the forces discovered by science. But, the latter can be realized only with suitable apparatus, which can be constructed only at great expense; likewise, the working machines cost much more than the old tools. But, these machines have a much longer life and a much greater field of production than the tool; they, therefore, transfer a much smaller portion of value, comparatively, to the product than a tool and, hence, the gratuitous service performed by the machine (which does not reappear in the value of the product) is much greater than in the case of the tool. (Pp.374,375,376 [387,388,390]) Reduction in cost through concentration of production is much greater in modern industry than in manufacture. (P.375 ) The prices of finished goods prove how much the machine has cheapened production, and that the portion of value due to the instruments of labour grows relatively, but declines absolutely. The productivity of the machine is measured by the extent to which it replaces human labour-power. Examples (pp.377-79 [390-92]) Assumed a steam plough takes the place of 150 workers getting and annual wage of 3,000 pounds, this annual wage does not represent all the labour performed by them, but only the necessary labour-power, they also perform surplus-labour, in addition. If the steam plough costs 3,000 pounds, however, that is the expression in money of all the labour embodied in it. Thus, if the machine costs as much as the labour-power it replaces, the human labour embodied in it is always much less than that which it replaces. (P.380 ) As a means of cheapening production, the machine must cost less labour than it replaces. But, for capital, its value must be less than that of the labour-power supplanted by it. Therefore, machines that do not pay in England may pay in America e.g., for stonebreaking. Hence, as a result of certain legal restrictions, machines that formerly did not pay for capital may suddenly make their appearance. (Pp.380-81 [393-94]) Since machinery itself contains the power-driving it, muscular power drops in value. labour of women and children; immediate increase in the number of wage-labourers through the enrolling of members of the family who had not previously worked for wages. Thus, the value of the man's labour-power is spread over the labour-power of the whole family i.e., depreciated. Now, four persons instead of one must perform not only labour, but also surplus-labour for capital that one family may live. Thus, the degree of exploitation is increased together with the material exploitation. (P.383 ) Formerly, the sale and purchase of labour-power was a relation between free persons; now, minors or children are bought; the workers now sells wife and child he becomes a slave-dealer. Examples (pp.384-85 [396-97]) Moral degradation. (P.389 ) Educational clauses and manufacturers' resistance to them. (P.390 [399-400]) The entrance of women and children into the factory finally breaks down the male worker's resistance to the despotism of capital. If machinery shortens the labour-time necessary to produce an object, in the hands of capital it becomes the most powerful weapon for lengthening the working-day far beyond its normal bounds. It creates, on the one hand, new conditions that enable capital to do so, and, on the other, new motives for so doing. Machinery is capable of perpetual motion, and limited only by the weakness and limitation of the assisting human labour-power. The machine that is worn out in 7.5 years, working 20 hours daily, absorbs just as much surplus-labour for the capitalist, but in half the time, as another that is worn out in 15 years working 10 hours daily. (P.393 ) The moral depreciation of the machine by superseding is in this way risked still less. (P.394 [404-05]) Moreover, a large quantity of labour is absorbed without increasing the investments in buildings and machines; thus, not only does surplus-value grow with a lengthened working-day, but the outlay required to obtain it diminishes relatively. This is more important insofar as the proportion of fixed capital greatly predominated as is the case in large-scale industry. (P.395 ) During the first period of machinery, when it possesses a monopoly character, profits are enormous and, hence, the thirst for more, for boundless lengthening of the working-day. With the general introduction of machinery, this monopoly profit vanishes, and the law asserts itself that surplus-value arises, not from the labour supplanted by the machine, but from the labour employed by it that is, from the variable capital. But, under machine production, the latter is necessarily reduced by the large outlays. Thus, there is an inherent contradiction in the capitalist employment of machinery: for a given mass of capital, it increases one factor of surplus-value, its rate, by reducing the other, the number of workers. As soon as the value of a machine-made commodity becomes the regulating social value of that commodity, this contradiction comes to light, and again drives towards lengthening the working-day. (P.397 ) But, at the same time, machinery by setting free supplanted workers, as well as by enrolling women and children produces a surplus working population, which must let capital dictate the law to it. Hence, machinery overthrows all the moral and natural bounds of the working-day. Hence, the paradox that the most powerful means of shortening labour-time is the most infallible means of converting the whole lifetime of the worker and his family into available labour-time for expanding the value of capital. (P.398 ) We have already seen how the social reaction occurs here through the fixing of the normal working-day; on this basis, there now develops the intensification of labour. (P.399 ) At the beginning, with the speeding-up of the machine, the intensity of labour increases simultaneously with the lengthening of labour-time. But, soon the point is reached where the two exclude each other. It is different, however, when labour-time is restricted. Intensity can only grow; in 10 hours, as much work can be done as ordinarily in 12 or more, and now the more intensive working-day counts as raised to a higher power, and labour is measured not merely by its time, but by its intensity. (P.400 ) Thus, in 5 hours of necessary and 5 hours of surplus-labour, the same surplus-value can be attained as in 6 hours of necessary and 6 hours of surplus-labour at lower intensity. (P.400 ) How is labour intensified? In manufacture, it has been proved (Note 159, p.401 [411, footernote 1]), pottery, for instance, etc., that mere shortening of the working-day is sufficient to raise productivity enormously. In machine labour, this was far more doubtful. But, R. Gardner's proof. (Pp.401-02 [411-12]) As soon as the shortened working-day becomes law, the machine becomes a means of squeezing more intensive labour out of the worker, either by greater speed or fewer hands in relation to machine. Examples. (Pp.403-07 [412-16]) Evidence that enrichment and expansion of the factory grew simultaneously therewith. (Pp.407-09 [416-18]) In the factory, the machine takes care of the proper manipulation of the tool; thus, the qualitative differences of labour developed in manufacture are here abolished; labour is levelled-out more and more; at most, difference in age and sex. The division of labour is here a distribution of workers among the specialized machines. Here, division is only between principal workers, who are really employed at the tool, and feeders (this is true only for the self-acting mule, scarcely so for the throttle, and still less for the corrected power loom), in addition supervisors, engineers and stockers, mechanics, joiners, etc., a class only outwardly aggregated to the factory. (Pp.411-12 ) The necessity for adapting the worker to the continuous motion of an automaton requires training from childhood, but by no means that a worker be any longer chained to one detail function all his life, as in manufacture. Change of personnel can take place at the same machine (relay system), and because of the slight effort required to learn, the workers can be shifted from one kind of machine to another. The work of the attendants is either very simple or is taken over more and more by the machine. None the less, at the beginning, manufacture division of labour persists traditionally, and itself becomes a greater weapon for exploitation by capital. The worker becomes a lifelong part of a detail machine. (P.413 [422-23]) All capitalist production, insofar as it is not only a labour process but also a process for expanding the value of capital, has this in common that it is not the worker who employs the instruments of labour, but vice versa the instruments of labour employ the worker; but only through machinery does this perversion acquire technical, palpable reality. Through its conversion into an automaton, the instrument of labour itself confronts the labourer, during the labour process, as capital, as dead labour that dominates and sucks dry the living labour-power. Ditto the intellectual powers of the production process as the power of capital over labour.... The detail skill of the individual, pumped-out machine operator vanishes as a tiny secondary thing alongside science, the tremendous natural forces and social mass labour which are embodied in the machine system. (Pp.414,415 ) Barracks-like discipline of the factory, factory code. (P.416 [423-24]) Material conditions of the factory. (Pp.417-18 [425-27]) This struggle, existing since the origin of the capitalist relationship, first occurs here as a revolt against the machine as the material basis of the capitalist mode of production. Ribbon looms. (P.419 [427-28]) Luddites. (P.420 [428-29]) Only later do the workers distinguish between the material means of production and the social form of their exploitation. In manufacture, the improved division of labour was rather a means of virtually replacing the labourers. (P.421 ) (Digression on agriculture, displacement p.422 .) But, in machinery, the worker is actually displaced; the machine competes with him directly. Hand-loom weavers. (P.423 ) Likewise India. (P.424 ) This effect is permanent, since machinery continually seizes upon new fields of production. The self-dependent and estranged form that capitalist production gives the instrument of labour, as against the labourer, is developed by machinery into a thorough antagonism hence, now the labourer's revolt first against the instrument of labour. (P.424 ) Details of the displacement of workers by machines. (Pp.425,426 [433,435]) The machine as a means of breaking the workers' resistance to capital by displacing them. (Pp.427,428 [435-37]) Liberal economics maintains that the machine, displacing workers, at the same time releases capital that can employ these workers. On the contrary, however, every introduction of machines locks up capital, diminishes its variable and increases its constant components; it can, therefore, merely restrict capital's capacity for employment. In fact and this is what these apologists also mean in this manner, not capital is set free; but the means of subsistence of the displaced workers are set free; the workers are cut off from the means of subsistence, which the apologist expresses by saying that the machine liberates means of subsistence for the workers. (Pp.429-30 [438-39]) This further development (very good for Fortnightly [the magazine for which this synopsis was ostensibly written]) (pp.431.431-32 [439-41]): the antagonism inseparable from the capitalist employment of machinery do not exist for the apologists, because they do not arise out of machinery as such, but out of its capitalist employment. (P.432 ) Expansion of production by machines directly and indirectly, and thus possible increase in number of workers hitherto employed: miners, slaves in cotton states, etc. On the other hand, displacement of Scotch and Irish by sheep to suit the requirements of the woollen factories. (Pp.433,434 [443,444]) Machine production carries the social division of labour much further than manufacture did. (P.435 ) The first result of machinery: increasing surplus-value together with the mass of products in which it is embodied and on which the capitalist class and its hangers-on live, thus increasing the number of capitalists; new luxury wants, together with the means of satisfying them. Luxury production grows. Likewise, means of communication (which, however, absorb only little labour-power in the more developed countries) (evidence p.436 ) finally, the servant class grows, the modern domestic slaves, whose material is supplied by the releasing [of workers]. (P.437 ) Statistics. Economic contradictions. (P.437 ) Possibility of absolute increase in the mass of labour in one branch of business owning to machines, and the modalities of this process. (Pp.439-40 ) Enormous elasticity, capacity for sudden extension of large-scale industry to a high degree of development. (P.441 [450-51]) Reaction upon the countries producing raw materials. Emigration owing to release of workers. International division of labour of the industrial and agricultural countries periodicity of crises and prosperity. (P.442 ) Workers thrown back and forth in this process of expansion. (P.444 ) Historical data on this. (Pp.445-49 [455-59]) Displacement of co-operation and manufacture by machinery (and the intermediate stages, pp.450-51 [459-60]) Also, displacement of establishments not run on factory lines, industry branches in the spirit of large-scale industry domestic industry, an outside department of the factory. (P.452 ) In home industry and modern manufacture, exploitation still more shameless than in the factory proper. (P.453 ) Examples: London print-shops (p.453 [462-63]), book-binding, rag-sorting (p.454 ), brick-making (p.455 [462-63]). Domestic industry: lace-making (pp.457-59 [466-68]), straw plaiting (p.460 [468-69]). Conversion into factory production with achievement of ultimate limit of exploitability: wearing apparel by the sewing-machine (pp.462-66 [470-74]). Speeding-up of this conversion by extension of the compulsory Factory Acts, which put an end to the old routine based upon unlimited exploitation. (P.466 ) Examples: pottery (p.467 [475-76]), lucifer matches (pp.468 ). Furthermore, effect of the Factory Acts upon irregular work, owing to the workers' habits, as well as to seasons and fashions. (P.470 ) Overwork alongside idleness, owing to the seasons, in domestic industry and manufacture. (P.471 [478-79]) Sanitary clauses of the Factory Acts. (P.473 [480-81]) Educational clauses. (P.475 [482-83]) Discharge of workers merely because of age, as soon as they are grown up and no longer fitted for the work, and can no longer live on a child's wages, while at the same time, they have learned no new trade. (P.477 [484-85]) Dissolution of the mysteries, and of the traditional ossification of manufacture and handicraft, by modern industry, which converts the production process into a conscious application of natural forces. Hence, it alone is revolutionary, as against all earlier forms. )P.479 [486-87]) But as a capitalist form, it lets the ossified division of labour persist for the worker, and since it daily revolutionizes the former's basis, it ruins the worker. On the other hand, in this very thing, in this necessary change of activities of one and the same worker lies the requirement of his being as versatile as possible and the possibilities of the social revolution. (Pp.480-81 [487-88]) Need for extending factory legislation to all branches not operated on factory lines. (P.482 ff. [489-ff.]) Act of 1867. (P.485 ) Mines, note. (P.486 ff. [495-503]) Concentrating effect of the Factory Acts; generalization of factory production and thus of the classical form of capitalist production; accentuation of its inherent contradictions, maturing of the elements for overturning the old society, and of the elements for forming the new. (Pp.488-93 [498-503]) Agriculture. Here the release of the workers by machines is even more acute. Replacement of the peasant by the wage-labourer. Destruction of rural domestic manufacture. Accentuation of the antithesis between town and country. Dispersion and weakening of the rural labourers, whereas the urban workers are reduced down to a minimum. At the same time robbing the soil: the acme of the capitalist mode of production is the undermining of the sources of all wealth: the soil and the labourer. (Pp.493-96 [504-07]) [ ... manuscript breaks off here ... ]

Economic Manuscripts: Frederick Engels: Synopsis of Capital

https://www.marxists.org/archive/marx/works/1867-c1/1868-syn/ch04.htm

Now how is the value of a commodity expressed ? Thus how does it acquire a form of appearance of its own ? Through the relation of different commodities. In order correctly to analyse the form contained in such a relation we must proceed from the simplest, most undeveloped shape (Gestalt). The simplest relation of the commodity is obviously its relation to a single other commodity, no matter which one. Hence the relation of two commodities furnishes the simplest value-expression for a commodity. 20 yards of linen = 1 coat or 20 yards of linen are worth 1 coat The secret of the entire value-form (aller Wertform) must be hidden in this simple value-form. Hence its analysis offers the real difficulty. Without analysing the matter more deeply, the following points are clear from the start: Certainly the expression: 20 yards of linen = 1 coat or 20 yards of linen are worth one coat also includes the converse: 1 coat = 20 yards of linen or 1 coat is worth 20 yards of linen . But in doing this I must reverse the equation, in order to express the value of the coat relatively, and once I do this the linen becomes the equivalent instead of the coat. The same commodity therefore cannot make its appearance in the same expression of value at the same time in both forms. Rather, these exclude one another in a polar manner. Let us consider exchange between linen-producer A and coat-producer B. Before they come to terms, A says: 20 yards of linen are worth 2 coats (20 yards of linen = 2 coats), But B responds: 1 coat is worth 22 yards of linen (1 coat = 22 yards of linen). Finally, after they have haggled for a long time they agree: Here both, linen and coat, are at the same time in relative value-form and in equivalent form. But, nota bene, for two different persons and in two different expressions of value, which simply occur (ins Leben treten) at the same time. For A his linen is in relative value-form because for him the initiative proceeds from his commodity and the commodity of the other person, the coat, is in equivalent form. Conversely from the standpoint of B. Thus one and the same commodity never possess, even in this case, the two forms at the same time in the same expression of value. are not at all different. As regards the form, they are not only different but opposed. In expression 1 the value of the linen is expressed relatively. Hence it is in the relative value-form whilst at the same time the value of the coat is expressed as equivalent. Hence it is in the equivalent form. Now if I turn the expression 1 round I obtain expression 2. The commodities change positions and right away the coat is in the relative value-form, the linen in equivalent form. Because they have changed their respective positions in the same expression of value, they have changed value-form (die Wertform gewechselt). Since it is the linen which is to express its value, the initiative proceeds from it. It enters into a relation with the coat, i.e. with some other commodity different from itself. This relation is a relation of equalisation (Gleichsetzung). The basis of the expression 20 yards of linen = 1 coat is in fact: linen = coat, which expressed in words simply means: the commodity-type coat is of the same nature (ist gleicher Natur), the same substance as the linen, a type of commodity different from it . We overlook that for the most part, because attention is absorbed by the quantitative relation, i.e. by the definite proportion, in which the one type of commodity is equated to the other. We forget that the magnitudes of different things are only quantitatively comparable after their reduction to the same unit. Only as expressions of the same unit are magnitudes with the same denominator (gleichnamige) and hence commensurable. In the above expression the linen thus relates to the coat as something of its own kind, or the coat is related to the linen as a thing of the same substance, as the same in essence (Wesensgleiches). The one is therefore quantitatively equated to the other. The coat is only the same as the linen to the extent that both are values. Thus that the linen is related to the coat as to something of its own kind or that the coat as a thing of the same substance is equated to linen, expresses the fact that the coat counts in this relation as value. It is equated to the linen insofar as the latter is value as well. The relation of equality is thus a value-relation, but the value-relation is above all the expression of the value or the existence as value of the commodity which expresses its value. As use-value, or body of the commodity (Warenk rper), the linen is distinguished from the coat. But its existence as value comes to light, is expressed in a relation, in which another commodity-type, the coat, is equated to it or counts as the same in essence. The coat is value only to the extent that it is the expression, in the form of a thing, of the human labour-power expended in its production and thus insofar as it is a jelly of abstract human labour abstract labour, because abstraction is made from the definite useful concrete character of the labour contained in it, human labour, because the labour counts here only as expenditure of human labour-power as such. Thus the linen cannot relate (sich verhalten) to the coat as a thing having value, or cannot be related (bezogen werden) to the coat as value, without relating (bezogen werden) to it as a body whose sole substance consists in human labour. But as value this linen is a jelly of this same human labour. Within this relation the coat as a thing (K rper) thus represents the substances of value which it has in common with linen, i.e. human labour. Within this relation the coat thus counts only as shape of value (Gestalt von Wert), hence also as the form of the value (Wertgestalt) of the linen, as the sensible form of appearance of the value of the linen. Thus by means of the value-relation the value of the commodity is expressed in the use-value of another commodity, i.e. in the body of another commodity different from itself. The 20 yards of linen are, however, not only value as such, i.e. a jelly of human labour, but value of a definite magnitude, i.e. a definite quantity of human labour is objectified in them. In the value relation of the linen to the coat the commodity-type coat is hence not only quantitatively equated to the linen as bodily form of value (Wertk rper) as such, i.e. as embodiment of human labour, but a definite quantity of this bodily form of value, 1 coat, not 1 dozen, etc., insofar as in 1 coat there is hidden precisely as much value-substance of human labour as in 20 yards of linen. Thus through the relative value-expression the value of the commodity acquires, first, a form different from its own use-value. The use-form of this commodity is, e.g. linen. But it possesses its value-form in its relation of equality with the coat. Through this relation of equality the body of another commodity, sensibly different from it, becomes the mirror of its own existence as value (Wertsein), of its own character as value (Wertgestalt). In this way it gains an independent and separate value-form, different from its natural form. But second, as a value of definite magnitude, it is quantitatively measured by the quantitatively definite relation or the proportion in which it is equated to the body of the other commodity. As values all commodities are expressions of the same unit, of human labour, which count equally and are replaceable or substitutable for one another. Hence a commodity is only exchangeable with another commodity insofar as it possesses a form in which it appears as value. A body of the commodity is immediately exchangeable with another commodity insofar as its immediate form i.e. its own bodily or natural form, represents (vorstellt) value with regard to another commodity or counts as value-form (Wertgestalt). This property is possessed by the coat in the value-relation of the linen to the coat. The value of the linen would otherwise not be expressible in the thing which is the coat. Therefore that a commodity has equivalent form at all, means just this. Through its place in the value-expression its own natural form counts as the value-form for another commodity or it possesses the form of immediate exchangeability with another commodity. Therefore it does not need to take on (annehmen) a form different from its immediate natural form in order to appear as value for another commodity, to count as value and to act on it as value (auf sie als Wert zu wirken). That a thing which has the form of a coat is immediately exchangeable with linen, or a thing which has the form of gold is immediately exchangeable with all other commodities this equivalent form of a thing contains absolutely no quantitative definiteness. The opposed erroneous view springs from the following causes: First, the commodity coat , for example, which serves as material for the expression of value of linen is, within such an expression, also always quantitatively definite, like 1 coat and not 12 coats , etc. But why? Because the 20 yards of linen are expressed in their relative value expression of value not only as value as such, but at the same time are measured as a definite quantity of value. But that 1 coat and not 12 coats contains as much labour as 20 yards of linen and hence is equated with 20 yards of linen has absolutely nothing to do with this characteristic property of the commodity-type coat of being immediately exchangeable with the commodity-type linen. Second, if 20 yards of linen as value of a definite magnitude are expressed in 1 coat , then conversely the magnitude of value of 1 coat is also expressed in 20 yards of linen , and thus similarly quantitatively measured, but only indirectly, through reversal of the expression, not insofar as the coat plays the role of the equivalent but rather insofar as it represents its own value relatively in the linen. Third, we can also express the formula 20 yards of linen = 1 coat or 20 yards of linen are worth 1 coat in the following way: 20 yards of linen and 1 coat are equivalents, or both are values of equal magnitude . Here we do not express the value of either of the two commodities in the use-value of the other. Neither of the two commodities is hence set up in equivalent-form. Equivalent means here only something equal in magnitude, both things having been silently reduced in our heads to the abstraction value. The natural form of the commodity becomes the value-form. But, nota bene, this quid pro quo occurs for a commodity B (coat or wheat or iron, etc.) only within the value-relation to it, into which any other commodity A (linen, etc.) enters, and only within this relation. In itself, considered in isolation, the coat, e.g., is only a useful thing, a use-value, just like the linen, and hence its coat-form is only the form of use-value (ist nur Form von Gebrauchswert) or natural form of a definite type of commodity. But since no commodity can relate to itself as equivalent and therefore also cannot make its own natural hide an expression of its own value, it must relate itself to another commodity as equivalent or make the natural hide of the body of another commodity its own value-form. This may be illustrated by the example of a measure, which is predicable of the bodies of commodities as bodies (den Warenk rpern als Warenk rpern zukommt) i.e. as use-values. A sugar-loaf, qua body (weil K rper), is heavy and hence has weight, but one cannot tell the weight of a sugar-loaf by looking or feeling (man kann keinen Zuckerhut seine Schwere ansehn oder anf hlen). Now we take different pieces of iron whose weight has been previously determined. The bodily form of the iron considered in itself is just as little the form of appearance of weight as that of the sugar-loaf. However in order to express the sugar-loaf as heaviness or weight, we put it into a weight-relation with iron. In this relation the iron counts as a body, which represents nothing but heaviness or weight. Hence quantities of iron serve as the measure of the weight of sugar and represent, with regard to the body of sugar, merely the form of heaviness (blosse Schweregestalt), form of appearance of heaviness. Iron plays this role only within the relation in which the sugar, or some other body whose weight is to be found, enters. Were both things not heavy they could not enter into this relation and hence the one could not serve as the expression of the weight of the other. If we throw both on the scale pan, we see in fact that they are, as weight, the same and hence in a definite proportion also of the same weight. Just as here the body of the iron represents, with regard to the sugar-loaf, simply heaviness, so in our expression of value the body of the coat represents, with regard to the linen, simply value. The coat counts in the expression of the value of the linen as the value-body, hence its bodily or natural form as value-form, i.e. therefore as embodiment of undifferentiated human labour, human labour as such (schlechthin). But the labour by which the useful thing which is the coat is made and by which it acquires a definite form, is not abstract human labour, human labour as such, but a definite useful, concrete type of labour the labour of tailoring. The simple relative value-form requires (erheischt) that the value of a commodity, linen, for example, is expressed only in one single other type of commodity. Which the other type of commodity is, is however, for the simple value-form, completely irrelevant. Instead of the commodity-type coat the value of the linen could have been expressed in wheat, or instead of wheat, in iron, etc. But whether in coat, wheat or iron, in every case the equivalent of linen counts as the body of value with regard to the linen, hence as embodiment of human labour as such. And in every case the definite bodily form of the equivalent, whether coat or wheat or iron, remains embodiment not of abstract human labour, but of a definite concrete useful type of labour, be it the labour of tailoring or of farming or of mining. The definite concrete useful labour, which produces the body of the commodity which is the equivalent must therefore, in the expression of value, always necessarily count as a definite form of realisation or form of appearance, i.e. of abstract human labour. The coat, for example, can only count as the body of value, hence as embodiment of human labour as such, in so far as the labour of tailoring counts as a definite form, in which human labour-power is expended or in which abstract human labour is realised. Within the value-relation and the value expression included in it, the abstractly general counts not as a property of the concrete, sensibly real; but on the contrary the sensibly-concrete counts as the mere form of appearance or definite form of realisation of the abstractly general. The labour of tailoring, which, for example, hides in the equivalent coat , does not possess, within the value-expression of the linen, the general property of also being human labour. On the contrary. Being human labour counts as its essence (Wesen), being the labour of tailoring counts only as the form of appearance (Erscheinungsform) or definite form of realisation of this its essence. This quid pro quo is unavoidable because the labour represented in the product of labour only goes to create value insofar as it is undifferentiated human labour, so that the labour objectified in the value of the product is in no way distinguished from the labour objectified in the value of a different product. This inversion (Verkehrung) by which the sensibly-concrete counts only as the form of appearance of the abstractly general and not, on the contrary, the abstractly general as property of the concrete, characterises the expression of value. At the same time, it makes understanding it difficult. If I say: Roman Law and German Law are both laws, that is obvious. But if I say: Law (Das Recht), this abstraction (Abstraktum) realises itself in Roman Law and in German Law, in these concrete laws, the interconnection becoming mystical. Products of labour would not become commodities, were they not products of separate private labours carried on independently of one another. The social interconnection of these private labours exists materially, insofar as they are members of a naturally evolved social division of labour and hence, through their products, satisfy wants of different kinds, in the totality (Gesamtheit) of which the similarly naturally evolved system of social wants (naturw chsiges System der gesellschaftlichen Bed rfnisse) consists. This material social interconnection of private labours carried on independently of one another is however only mediated and hence is realised only through the exchange of their products. The product of private labour hence only has social form insofar as it has value-form and hence the form of exchangeability with other products of labour. It has immediately social form insofar as its own bodily or natural form is at the same time the form of its exchangeability with other commodities or counts as value-form for another commodity (anderer Ware). However, as we have seen, this only takes place for a product of labour when, through the value relation of other commodities to it, it is in equivalent-form or, with respect to other commodities, plays the role of equivalent. The equivalent has immediately social form insofar as it has the form of immediate exchangeability with another commodity, and it has this form of immediate exchangeability insofar as it counts for another commodity as the body of value, hence as equal (als Gleiches). Therefore the definite useful labour contained in it also counts as labour in immediately social form, i.e. as labour which possesses the form of equality with the labour contained in another commodity. A definite, concrete labour like the labour of tailoring can only possess the form of equality with the labour of a different type contained in a commodity of a different kind, for example the linen, insofar as its definite form counts as the expression of something which really constitutes the equality of labours of different sorts or what is equal in those labours. But they are only equal insofar as they are human labour as such, abstract human labour, i.e. expenditure of human labour-power. Thus, as has already been shown, because the definite concrete labour contained in the equivalent counts as the definite form of realisation or form of appearance of abstract human labour, it possesses the form of equality with other labour, and hence, although it is private labour, like all other labour which produces commodities, it is nevertheless labour in immediately social form. Precisely because of this it is represented in a product that is immediately exchangeable with the other commodities. The last two peculiarities of the equivalent-form set out in and become still more comprehensible when we recur to the great theorist (Forscher) who for the first time analysed the value-form, like so many forms of thought, forms of society and forms of nature, and for the most part more happily than his modern successors, I mean Aristotle. Aristotle clearly formulates first of all the fact that the money-form of the commodity is only the further developed shape (Gestalt) of the simple value-form, i.e. of the expression of value of a commodity in any other commodity, for he says: He sees further that the value-relation, in which this expression of value hides, determines, for its part, the fact that the house is qualitatively equated with the bed and that these sensibly different things would not be able to be related to one another as commensurable magnitudes without such essential equality. Exchange , he says, cannot take place without equality, and equality cannot occur without commensurability ( ). But at this he pulls up short and ceases the further analysis of the value-form, But it is in truth impossible ( ) that things of such different sorts should be commensurable , i.e. qualitatively equal. This equalisation can only be something which is alien to the true nature of things, and therefore only a makeshift for practical purposes . [c] Aristotle thus tells us himself just where his further analysis suffers shipwreck, namely, on the lack of the concept of value. What is that which is equal, i.e. the common substance, which the house represents for the bed in the expression of the value of the bed? Such a thing cannot in truth exist , says Aristotle. Why? With respect to the bed the house represents something which is equal (stellt ein Gleiches vor) insofar as it represents what in both, the bed and the house, is really equal. And that is human labour. But the fact that in the form of commodity-values all labours are expressed as equal human labour and hence as counting equally (als gleichgeseltend) could not be read out of the value-form of commodities by Aristotle, because Greek society rested on slave labour and hence had the inequality of people and their labours as a natural basis. The secret of the expression of value, the equality of all labours and the fact that all labours count equally because and insofar as they are human labour as such can only be deciphered when the concept of human equality already possesses the fixity of a popular prejudice. But that is only possible in a society in which the commodity-form is the general form of the product of labour and thus also the relation of people to one another as possessors of commodities is the ruling social relation. The genius of Aristotle shines precisely in the fact that he discovers in the expression of value of commodities a relation of equality. Only the historical limit of the society in which he lived prevents him from finding out what, in truth , this relation of equality consists in. The fact that the products of labour such useful things as coat, linen, wheat, iron, etc. are values, definite magnitudes of value and in general commodities, are properties which naturally pertain to them only in our practical interrelations (in unsrem Verkehr) and not by nature like, for example, the property of being heavy or being warming or nourishing. But within our practical interrelations, these things relate to one another as commodities. They are values, they are measurable as magnitudes of value, and their common property of being values puts them into a value-relation to one another. Now the fact that, for example, 20 yards of linen = 1 coat or 20 yards of linen are worth 1 coat only expresses the fact that: It is a definite social relation of the producers in which they equate (gleichsetzen) their different types of labour as human labour. It is not less a definite social relation of producers, in which they measure the magnitude of their labours by the duration of expenditure of human labour-power. But within our practical interrelations these social characters of their own labours appear to them as social properties pertaining to them by nature, as objective determinations (gegenst ndliche Bestimmungen) of the products of labour themselves, the equality of human labours as a value-property of the products of labour, the measure of the labour by the socially necessary labour-time as the magnitude of value of the products of labour, and finally the social relations of the producers through their labours appear as a value-relation or social relation of these things, the products of labour. Precisely because of this the products of labour appear to them as commodities, sensible-supersensible (sinnlich bersinnliche) or social things. Thus the impression on the optic nerve brought about by the light (Lichteindruck auf den Sehnerv) from something is represented, not as a subjective stimulation of the optic nerve itself, but as the objective form of a thing outside the eye. But in the case of seeing, light from a thing, from the external object, is in fact thrown upon another thing, the eye. It is a physical relation between physical things. As opposed to that the commodity-form and the value-relation of products of labour have absolutely nothing to do with their physical nature and the relations between things which springs from this. It is only the definite social relation of people (der Menschen) itself which here takes on for them the phantasmagoric form of a relation of things. Hence in order to find an analogy for this we must take flight into the cloudy region of the religious world. Here the products of the human head appear as independent figures (Gestalten) endowed with a life of their own and standing in a relation to one another and to people. So it is in the world of commodities with the products of the human hand. This I call the fetishism which clings to the products of labour as soon as they are produced as commodities and which is therefore inseparable from commodity-production. Now this fetish-character emerges more strikingly in the equivalent-form than in the relative value-form. The relative value-form of a commodity is mediated, namely by its relation to another commodity. Through this value-form the value of the commodity is expressed as something completely distinct from its own sensible existence. At the same time it is inherent in this that existence as value (Wertsein) is a relation which is alien to the thing itself and hence that its value-relation to another thing can only be the form of appearance of a social relation hidden behind it. Conversely with the equivalent-form. It consists precisely in the fact that the bodily or natural form of a commodity counts immediately as the social form, as the value-form for another commodity. Therefore, within our practical interrelations, to possess the equivalent-form appears as the social natural property (gesellschaftliche Natureigenschaft) of a thing, as a property pertaining to it by nature, so that hence it appears to be immediately exchangeable with other things just as it exists for the senses (so wie es sinnlich da ist). But because within the value-expression of commodity A the equivalent-form pertains by nature to the commodity B it seems also to belong to the latter by nature outside of this relation. Hence, for example, the riddle (das R tselhafte) of gold, that seems to possess, by nature, apart from its other natural properties, its colour, its specific weight, its non-oxydisability in air, etc., also the equivalent-form, or the social quality of being immediately exchangeable with all other commodities. The expression of value has two poles, relative value-form and equivalent-form. To start with, what concerns the commodity functioning as equivalent is that it counts for another commodity as the shape of value (Wertgestalt), a body in immediately exchangeable form exchange-value. But the commodity whose value is expressed relatively, possesses the form of exchange-value in that: The exchange-value is hence the independent form of appearance of commodity-value. If I say: As a commodity the linen is use-value and exchange-value, this is my judgement about the nature of the commodity gained by analysis. As opposed to this, in the expression 20 yards of linen = 1 coat or 20 yards of linen are worth 1 coat the linen itself says that it 20 yards of linen = 1 coat or 20 yards of linen are worth 1 coat by the form: 20 yards of linen = 2 Pounds Sterling or 20 yards of linen are worth 2 Pounds Sterling then it becomes obvious at first glance that the money-form in nothing but the further development of the simple value-form of the commodity, and therefore of the simple commodity-form of the labour-product. Because the money-form is only the developed commodity-form it obviously springs from the simple commodity-form. Hence as soon as the latter is understood it only remains to consider the series of metamorphoses through which the simple commodity form 20 yards of linen = 1 coat must run in order to take on the shape (Gestalt annehmen) 20 yards of linen = 2 Pounds Sterling . 20 yards of linen = 1 coat or = 10 pounds of tea or = 40 pounds of coffee or = 1 quarter of wheat or = 2 ounces of gold or = ton of iron or = etc. This series of simple relative expressions of value is in its nature constantly extendible or never concludes. For there constantly occur new types of commodities and each new type of commodity forms the material of a new expression of value. 20 yards of linen = 1 coat 20 yards of linen = 10 pounds of tea, etc.. But each of these equations contains, conversely, also the identical equation: 1 coat = 20 yards of linen 10 pounds of tea = 20 yards of linen, etc.. In fact, if the possessor of the linen exchanges his commodity with many other commodities and hence expresses the value of his commodity in a series of other commodities, then necessarily the many other possessors of commodities must also exchange their commodities with linen and hence express the values of their different commodities in the same third commodity, the linen. Therefore, if we reverse the series 20 yards of linen = 1 coat or 10 pounds of tea or = etc. , i.e. if we express the converse relation which is already contained in itself (an sich), implicitly in the series, we obtain: The relative value-form now possesses a completely changed shape. All commodities express their value: Their value-form is simple and common, i.e. general. The linen now counts for the bodies of all the different sorts of commodities as their common and general shape of value. The value-form of a commodity, i.e. the expression of its value in linen, now distinguishes the commodity not only as value from its own existence (Dasein) as a useful object, i.e. from its own natural form, but at the same time relates it as value to all other commodities, to all commodities as equal to it (als ihresgleichen). Hence in this value-form it possesses general social form. Only through this general character does the value-form correspond to the concept of value (entspricht dem Wertbegriff). The value-form had to be a form in which commodities appear for one another as a mere jelly of undifferentiated, homogenous human labour, i.e. as expressions in the form of things of the same labour-substance. This is now attained. For they are all material expressions (Materiatur) of the same labour, of the labour contained in the linen or as the same material expression of labour, namely as linen. Thus they are qualitatively equated. At the same time they are quantitatively compared or represented as definite magnitudes of value for one another (f r einander dargestellt), i.e.: 10 pounds of tea = 20 yards of linen and 40 pounds of coffee = 20 yards of linen Therefore 10 pounds of tea = 40 pounds of coffee. Or in 1 pound of coffee there hides only a quarter as much of the substance of value, labour, as in 1 pound of tea. For all other commodities, although they are products of the most different sorts of labour, the linen counts as the form of appearance of the labours contained in them, hence as the embodiment of homogenous undifferentiated human labour. Weaving this particular concrete type of labour counts now by virtue of the value-relation of the world of commodities to linen as the general and immediately exhaustive form of realisation of abstract human labour, i.e. of the expenditure of human labour-power as such. For precisely this reason the private labour contained in linen also counts as labour which is immediately in general social form or in the form of equality with all other labours. If a commodity thus possesses the general equivalent-form or functions as general equivalent, its natural or bodily form counts as the visible incarnation, the general social chrysalis of all human labour. The simple relative value-form expresses the value of a commodity only in a single other type of commodity, no matter in which. The commodity thus only acquires value-form in distinction from its own use-value form or natural form. Its equivalent also acquires only the singular equivalent-form. The expanded relative value-form expresses the value of a commodity in all other commodities. Hence the latter acquire the form of many particular equivalents or particular equivalent-form. Finally, the world of commodities gives itself a unified, general, relative value-form, by excluding from itself one single type of commodity in which all other commodities express their value in common. Thereby the excluded commodity becomes general equivalent or the equivalent-form becomes the general equivalent-form. Now this polar opposition of the two moments (Momente) of the expression of value develops and hardens (entwickelt und verh rtet sich) in the same measure as the value-form as such is developed or built up (ausgebildet). In form I the two forms already exclude one another, but only formally (formell). According to whether the same equation is read forwards or backwards, each of the two commodities in the extreme positions (Warenextreme) like linen and coat, are similarly now in the relative value-form, now in the equivalent. At this point it still takes some effort to hold fast to the polar opposition. In form II only one type of commodity at a time can totally expand its relative value, i.e. it itself possesses expanded relative value-form only because and insofar as all other commodities are in the equivalent-form with regard to it. Finally, in form III the world of commodities possesses general social relative value-form only because and insofar as all the commodities belonging to it are excluded from the equivalent-form or the form of immediate exchangeability. Conversely, the commodity which is in the general equivalent form or figures as general equivalent is excluded from the unified and hence general relative value-form of the world of commodities. If the linen i.e. any commodity in general equivalent-form were also to participate at the same time in the general relative value-form, then it would have had to have been related to itself as equivalent. We then obtain: 20 yards of linen = 20 yards of linen a tautology in which neither value nor magnitude of value is expressed. In order to express the relative value of the general equivalent, we must reverse form III. It does not possess any relative value-form in common with other commodities; rather, its value expresses itself relatively in the endless series of the bodies of all other commodities. Thus the expanded relative value-form or form II now appears as the specific relative value-form of the commodity which plays the role of the general equivalent. However the mere distinction in form between form II and form III already points to something peculiar, which does not distinguish forms I and II. This is that in the expanded value-form (form II) one commodity excludes all the others in order to express its own value in them. This exclusion can be a purely subjective process, for example a process traced out by the possessor of linen (z.B. ein Prozess des Leinwandbesitzers) who assesses the value of his own commodity in many other commodities. As opposed to this a commodity is in general equivalent-form (form III) only because and insofar as it itself is excluded as equivalent by all other commodities. The exclusion is here an objective (objektiver) process independent of the excluded commodity. Hence in the historical development of the value-form the general equivalent-form may pertain now to this now to that commodity in turn. But a commodity never functions in fact (wirklich) as general equivalent except insofar as its exclusion and hence its equivalent-form is a result of an objective social process. The general value-form is the developed value-form and hence the developed commodity-form. The materially quite different products of labour cannot possess the finished commodity-form, and hence also cannot function in the process of exchange as a commodity, without being represented as expressions in the form of things (dingliche Ausdr che) of the same equal human labour. That means that in order to acquire the finished commodity-form they must acquire the unified general relative value-form. But they can only acquire this unified relative value-form by excluding from its own series a definite type of commodity as general equivalent. And it is only from the moment when this exclusion is definitely limited to a specific type of commodity that the unified relative value-form has won objective stability and general social validity. Now the specific type of commodity with whose natural form the equivalent form coalesces (verw chst) socially becomes the money-commodity or functions as money. Its specific social function and hence its social monopoly becomes the playing of the role of general equivalent within the world of commodities. A definite commodity, gold, has historically conquered this privileged place amongst the commodities which figure in form II as particular equivalents of linen and in form III express commonly (gemeinsam ausdr cken) their relative value in linen. Hence, if we put in form III the commodity gold in the place of the commodity linen, we obtain: 20 yards of linen = 1 coat or x commodity A = y commodity B. Now if we know what use-value and exchange-value are, then we find out that this form I is the simplest, most undeveloped manner of representing any product of labour, like linen for example, as a commodity, i.e. as a unity of the opposites use-value and exchange-value. At the same time we easily find the series of metamorphoses which the simplest commodity-form 20 yards of linen = 1 coat must run through in order to win its finished shape 20 yards of linen = 2 Pounds Sterling i.e. the money-form.

Economic Manuscripts: The Value-Form by Karl Marx

https://www.marxists.org/archive/marx/works/1867-c1/appendix.htm

The wealth of those societies in which the capitalist mode of production prevails, presents itself as an immense accumulation of commodities, its unit being a single commodity. Our investigation must therefore begin with the analysis of a commodity. A commodity is, in the first place, an object outside us, a thing that by its properties satisfies human wants of some sort or another. The nature of such wants, whether, for instance, they spring from the stomach or from fancy, makes no difference. Neither are we here concerned to know how the object satisfies these wants, whether directly as means of subsistence, or indirectly as means of production. Every useful thing, as iron, paper, &c., may be looked at from the two points of view of quality and quantity. It is an assemblage of many properties, and may therefore be of use in various ways. To discover the various uses of things is the work of history. So also is the establishment of socially-recognized standards of measure for the quantities of these useful objects. The diversity of these measures has its origin partly in the diverse nature of the objects to be measured, partly in convention. The utility of a thing makes it a use value. But this utility is not a thing of air. Being limited by the physical properties of the commodity, it has no existence apart from that commodity. A commodity, such as iron, corn, or a diamond, is therefore, so far as it is a material thing, a use value, something useful. This property of a commodity is independent of the amount of labour required to appropriate its useful qualities. When treating of use value, we always assume to be dealing with definite quantities, such as dozens of watches, yards of linen, or tons of iron. The use values of commodities furnish the material for a special study, that of the commercial knowledge of commodities. Use values become a reality only by use or consumption: they also constitute the substance of all wealth, whatever may be the social form of that wealth. In the form of society we are about to consider, they are, in addition, the material depositories of exchange value. Exchange value, at first sight, presents itself as a quantitative relation, as the proportion in which values in use of one sort are exchanged for those of another sort, a relation constantly changing with time and place. Hence exchange value appears to be something accidental and purely relative, and consequently an intrinsic value, i.e., an exchange value that is inseparably connected with, inherent in commodities, seems a contradiction in terms. Let us consider the matter a little more closely. A given commodity, e.g., a quarter of wheat is exchanged for x blacking, y silk, or z gold, &c. in short, for other commodities in the most different proportions. Instead of one exchange value, the wheat has, therefore, a great many. But since x blacking, y silk, or z gold &c., each represents the exchange value of one quarter of wheat, x blacking, y silk, z gold, &c., must, as exchange values, be replaceable by each other, or equal to each other. Therefore, first: the valid exchange values of a given commodity express something equal; secondly, exchange value, generally, is only the mode of expression, the phenomenal form, of something contained in it, yet distinguishable from it. Let us take two commodities, e.g., corn and iron. The proportions in which they are exchangeable, whatever those proportions may be, can always be represented by an equation in which a given quantity of corn is equated to some quantity of iron: e.g., 1 quarter corn = x cwt. iron. What does this equation tell us? It tells us that in two different things in 1 quarter of corn and x cwt. of iron, there exists in equal quantities something common to both. The two things must therefore be equal to a third, which in itself is neither the one nor the other. Each of them, so far as it is exchange value, must therefore be reducible to this third. A simple geometrical illustration will make this clear. In order to calculate and compare the areas of rectilinear figures, we decompose them into triangles. But the area of the triangle itself is expressed by something totally different from its visible figure, namely, by half the product of the base multiplied by the altitude. In the same way the exchange values of commodities must be capable of being expressed in terms of something common to them all, of which thing they represent a greater or less quantity. This common something cannot be either a geometrical, a chemical, or any other natural property of commodities. Such properties claim our attention only in so far as they affect the utility of those commodities, make them use values. But the exchange of commodities is evidently an act characterised by a total abstraction from use value. Then one use value is just as good as another, provided only it be present in sufficient quantity. Or, as old Barbon says, As use values, commodities are, above all, of different qualities, but as exchange values they are merely different quantities, and consequently do not contain an atom of use value. If then we leave out of consideration the use value of commodities, they have only one common property left, that of being products of labour. But even the product of labour itself has undergone a change in our hands. If we make abstraction from its use value, we make abstraction at the same time from the material elements and shapes that make the product a use value; we see in it no longer a table, a house, yarn, or any other useful thing. Its existence as a material thing is put out of sight. Neither can it any longer be regarded as the product of the labour of the joiner, the mason, the spinner, or of any other definite kind of productive labour. Along with the useful qualities of the products themselves, we put out of sight both the useful character of the various kinds of labour embodied in them, and the concrete forms of that labour; there is nothing left but what is common to them all; all are reduced to one and the same sort of labour, human labour in the abstract. Let us now consider the residue of each of these products; it consists of the same unsubstantial reality in each, a mere congelation of homogeneous human labour, of labour power expended without regard to the mode of its expenditure. All that these things now tell us is, that human labour power has been expended in their production, that human labour is embodied in them. When looked at as crystals of this social substance, common to them all, they are Values. We have seen that when commodities are exchanged, their exchange value manifests itself as something totally independent of their use value. But if we abstract from their use value, there remains their Value as defined above. Therefore, the common substance that manifests itself in the exchange value of commodities, whenever they are exchanged, is their value. The progress of our investigation will show that exchange value is the only form in which the value of commodities can manifest itself or be expressed. For the present, however, we have to consider the nature of value independently of this, its form. A use value, or useful article, therefore, has value only because human labour in the abstract has been embodied or materialised in it. How, then, is the magnitude of this value to be measured? Plainly, by the quantity of the value-creating substance, the labour, contained in the article. The quantity of labour, however, is measured by its duration, and labour time in its turn finds its standard in weeks, days, and hours. Some people might think that if the value of a commodity is determined by the quantity of labour spent on it, the more idle and unskilful the labourer, the more valuable would his commodity be, because more time would be required in its production. The labour, however, that forms the substance of value, is homogeneous human labour, expenditure of one uniform labour power. The total labour power of society, which is embodied in the sum total of the values of all commodities produced by that society, counts here as one homogeneous mass of human labour power, composed though it be of innumerable individual units. Each of these units is the same as any other, so far as it has the character of the average labour power of society, and takes effect as such; that is, so far as it requires for producing a commodity, no more time than is needed on an average, no more than is socially necessary. The labour time socially necessary is that required to produce an article under the normal conditions of production, and with the average degree of skill and intensity prevalent at the time. The introduction of power-looms into England probably reduced by one-half the labour required to weave a given quantity of yarn into cloth. The hand-loom weavers, as a matter of fact, continued to require the same time as before; but for all that, the product of one hour of their labour represented after the change only half an hour s social labour, and consequently fell to one-half its former value. We see then that that which determines the magnitude of the value of any article is the amount of labour socially necessary, or the labour time socially necessary for its production. Each individual commodity, in this connexion, is to be considered as an average sample of its class. Commodities, therefore, in which equal quantities of labour are embodied, or which can be produced in the same time, have the same value. The value of one commodity is to the value of any other, as the labour time necessary for the production of the one is to that necessary for the production of the other. As values, all commodities are only definite masses of congealed labour time. The value of a commodity would therefore remain constant, if the labour time required for its production also remained constant. But the latter changes with every variation in the productiveness of labour. This productiveness is determined by various circumstances, amongst others, by the average amount of skill of the workmen, the state of science, and the degree of its practical application, the social organisation of production, the extent and capabilities of the means of production, and by physical conditions. For example, the same amount of labour in favourable seasons is embodied in 8 bushels of corn, and in unfavourable, only in four. The same labour extracts from rich mines more metal than from poor mines. Diamonds are of very rare occurrence on the earth s surface, and hence their discovery costs, on an average, a great deal of labour time. Consequently much labour is represented in a small compass. Jacob doubts whether gold has ever been paid for at its full value. This applies still more to diamonds. According to Eschwege, the total produce of the Brazilian diamond mines for the eighty years, ending in 1823, had not realised the price of one-and-a-half years average produce of the sugar and coffee plantations of the same country, although the diamonds cost much more labour, and therefore represented more value. With richer mines, the same quantity of labour would embody itself in more diamonds, and their value would fall. If we could succeed at a small expenditure of labour, in converting carbon into diamonds, their value might fall below that of bricks. In general, the greater the productiveness of labour, the less is the labour time required for the production of an article, the less is the amount of labour crystallised in that article, and the less is its value; and vice vers , the less the productiveness of labour, the greater is the labour time required for the production of an article, and the greater is its value. The value of a commodity, therefore, varies directly as the quantity, and inversely as the productiveness, of the labour incorporated in it. [A] A thing can be a use value, without having value. This is the case whenever its utility to man is not due to labour. Such are air, virgin soil, natural meadows, &c. A thing can be useful, and the product of human labour, without being a commodity. Whoever directly satisfies his wants with the produce of his own labour, creates, indeed, use values, but not commodities. In order to produce the latter, he must not only produce use values, but use values for others, social use values. (And not only for others, without more. The mediaeval peasant produced quit-rent-corn for his feudal lord and tithe-corn for his parson. But neither the quit-rent-corn nor the tithe-corn became commodities by reason of the fact that they had been produced for others. To become a commodity a product must be transferred to another, whom it will serve as a use value, by means of an exchange.) Lastly nothing can have value, without being an object of utility. If the thing is useless, so is the labour contained in it; the labour does not count as labour, and therefore creates no value. At first sight a commodity presented itself to us as a complex of two things use value and exchange value. Later on, we saw also that labour, too, possesses the same two-fold nature; for, so far as it finds expression in value, it does not possess the same characteristics that belong to it as a creator of use values. I was the first to point out and to examine critically this two-fold nature of the labour contained in commodities. As this point is the pivot on which a clear comprehension of political economy turns, we must go more into detail. Let us take two commodities such as a coat and 10 yards of linen, and let the former be double the value of the latter, so that, if 10 yards of linen = W, the coat = 2W. The coat is a use value that satisfies a particular want. Its existence is the result of a special sort of productive activity, the nature of which is determined by its aim, mode of operation, subject, means, and result. The labour, whose utility is thus represented by the value in use of its product, or which manifests itself by making its product a use value, we call useful labour. In this connection we consider only its useful effect. As the coat and the linen are two qualitatively different use values, so also are the two forms of labour that produce them, tailoring and weaving. Were these two objects not qualitatively different, not produced respectively by labour of different quality, they could not stand to each other in the relation of commodities. Coats are not exchanged for coats, one use value is not exchanged for another of the same kind. To all the different varieties of values in use there correspond as many different kinds of useful labour, classified according to the order, genus, species, and variety to which they belong in the social division of labour. This division of labour is a necessary condition for the production of commodities, but it does not follow, conversely, that the production of commodities is a necessary condition for the division of labour. In the primitive Indian community there is social division of labour, without production of commodities. Or, to take an example nearer home, in every factory the labour is divided according to a system, but this division is not brought about by the operatives mutually exchanging their individual products. Only such products can become commodities with regard to each other, as result from different kinds of labour, each kind being carried on independently and for the account of private individuals. To resume, then: In the use value of each commodity there is contained useful labour, i.e., productive activity of a definite kind and exercised with a definite aim. Use values cannot confront each other as commodities, unless the useful labour embodied in them is qualitatively different in each of them. In a community, the produce of which in general takes the form of commodities, i.e., in a community of commodity producers, this qualitative difference between the useful forms of labour that are carried on independently of individual producers, each on their own account, develops into a complex system, a social division of labour. Anyhow, whether the coat be worn by the tailor or by his customer, in either case it operates as a use value. Nor is the relation between the coat and the labour that produced it altered by the circumstance that tailoring may have become a special trade, an independent branch of the social division of labour. Wherever the want of clothing forced them to it, the human race made clothes for thousands of years, without a single man becoming a tailor. But coats and linen, like every other element of material wealth that is not the spontaneous produce of Nature, must invariably owe their existence to a special productive activity, exercised with a definite aim, an activity that appropriates particular nature-given materials to particular human wants. So far therefore as labour is a creator of use value, is useful labour, it is a necessary condition, independent of all forms of society, for the existence of the human race; it is an eternal nature-imposed necessity, without which there can be no material exchanges between man and Nature, and therefore no life. The use values, coat, linen, &c., i.e., the bodies of commodities, are combinations of two elements matter and labour. If we take away the useful labour expended upon them, a material substratum is always left, which is furnished by Nature without the help of man. The latter can work only as Nature does, that is by changing the form of matter. Nay more, in this work of changing the form he is constantly helped by natural forces. We see, then, that labour is not the only source of material wealth, of use values produced by labour. As William Petty puts it, labour is its father and the earth its mother. Let us now pass from the commodity considered as a use value to the value of commodities. By our assumption, the coat is worth twice as much as the linen. But this is a mere quantitative difference, which for the present does not concern us. We bear in mind, however, that if the value of the coat is double that of 10 yds of linen, 20 yds of linen must have the same value as one coat. So far as they are values, the coat and the linen are things of a like substance, objective expressions of essentially identical labour. But tailoring and weaving are, qualitatively, different kinds of labour. There are, however, states of society in which one and the same man does tailoring and weaving alternately, in which case these two forms of labour are mere modifications of the labour of the same individual, and not special and fixed functions of different persons, just as the coat which our tailor makes one day, and the trousers which he makes another day, imply only a variation in the labour of one and the same individual. Moreover, we see at a glance that, in our capitalist society, a given portion of human labour is, in accordance with the varying demand, at one time supplied in the form of tailoring, at another in the form of weaving. This change may possibly not take place without friction, but take place it must. Productive activity, if we leave out of sight its special form, viz., the useful character of the labour, is nothing but the expenditure of human labour power. Tailoring and weaving, though qualitatively different productive activities, are each a productive expenditure of human brains, nerves, and muscles, and in this sense are human labour. They are but two different modes of expending human labour power. Of course, this labour power, which remains the same under all its modifications, must have attained a certain pitch of development before it can be expended in a multiplicity of modes. But the value of a commodity represents human labour in the abstract, the expenditure of human labour in general. And just as in society, a general or a banker plays a great part, but mere man, on the other hand, a very shabby part, so here with mere human labour. It is the expenditure of simple labour power, i.e., of the labour power which, on an average, apart from any special development, exists in the organism of every ordinary individual. Simple average labour, it is true, varies in character in different countries and at different times, but in a particular society it is given. Skilled labour counts only as simple labour intensified, or rather, as multiplied simple labour, a given quantity of skilled being considered equal to a greater quantity of simple labour. Experience shows that this reduction is constantly being made. A commodity may be the product of the most skilled labour, but its value, by equating it to the product of simple unskilled labour, represents a definite quantity of the latter labour alone. The different proportions in which different sorts of labour are reduced to unskilled labour as their standard, are established by a social process that goes on behind the backs of the producers, and, consequently, appear to be fixed by custom. For simplicity s sake we shall henceforth account every kind of labour to be unskilled, simple labour; by this we do no more than save ourselves the trouble of making the reduction. Just as, therefore, in viewing the coat and linen as values, we abstract from their different use values, so it is with the labour represented by those values: we disregard the difference between its useful forms, weaving and tailoring. As the use values, coat and linen, are combinations of special productive activities with cloth and yarn, while the values, coat and linen, are, on the other hand, mere homogeneous congelations of undifferentiated labour, so the labour embodied in these latter values does not count by virtue of its productive relation to cloth and yarn, but only as being expenditure of human labour power. Tailoring and weaving are necessary factors in the creation of the use values, coat and linen, precisely because these two kinds of labour are of different qualities; but only in so far as abstraction is made from their special qualities, only in so far as both possess the same quality of being human labour, do tailoring and weaving form the substance of the values of the same articles. Coats and linen, however, are not merely values, but values of definite magnitude, and according to our assumption, the coat is worth twice as much as the ten yards of linen. Whence this difference in their values? It is owing to the fact that the linen contains only half as much labour as the coat, and consequently, that in the production of the latter, labour power must have been expended during twice the time necessary for the production of the former. While, therefore, with reference to use value, the labour contained in a commodity counts only qualitatively, with reference to value it counts only quantitatively, and must first be reduced to human labour pure and simple. In the former case, it is a question of How and What, in the latter of How much? How long a time? Since the magnitude of the value of a commodity represents only the quantity of labour embodied in it, it follows that all commodities, when taken in certain proportions, must be equal in value. If the productive power of all the different sorts of useful labour required for the production of a coat remains unchanged, the sum of the values of the coats produced increases with their number. If one coat represents x days labour, two coats represent 2x days labour, and so on. But assume that the duration of the labour necessary for the production of a coat becomes doubled or halved. In the first case one coat is worth as much as two coats were before; in the second case, two coats are only worth as much as one was before, although in both cases one coat renders the same service as before, and the useful labour embodied in it remains of the same quality. But the quantity of labour spent on its production has altered. An increase in the quantity of use values is an increase of material wealth. With two coats two men can be clothed, with one coat only one man. Nevertheless, an increased quantity of material wealth may correspond to a simultaneous fall in the magnitude of its value. This antagonistic movement has its origin in the two-fold character of labour. Productive power has reference, of course, only to labour of some useful concrete form, the efficacy of any special productive activity during a given time being dependent on its productiveness. Useful labour becomes, therefore, a more or less abundant source of products, in proportion to the rise or fall of its productiveness. On the other hand, no change in this productiveness affects the labour represented by value. Since productive power is an attribute of the concrete useful forms of labour, of course it can no longer have any bearing on that labour, so soon as we make abstraction from those concrete useful forms. However then productive power may vary, the same labour, exercised during equal periods of time, always yields equal amounts of value. But it will yield, during equal periods of time, different quantities of values in use; more, if the productive power rise, fewer, if it fall. The same change in productive power, which increases the fruitfulness of labour, and, in consequence, the quantity of use values produced by that labour, will diminish the total value of this increased quantity of use values, provided such change shorten the total labour time necessary for their production; and vice vers . On the one hand all labour is, speaking physiologically, an expenditure of human labour power, and in its character of identical abstract human labour, it creates and forms the value of commodities. On the other hand, all labour is the expenditure of human labour power in a special form and with a definite aim, and in this, its character of concrete useful labour, it produces use values. Commodities come into the world in the shape of use values, articles, or goods, such as iron, linen, corn, &c. This is their plain, homely, bodily form. They are, however, commodities, only because they are something two-fold, both objects of utility, and, at the same time, depositories of value. They manifest themselves therefore as commodities, or have the form of commodities, only in so far as they have two forms, a physical or natural form, and a value form. The reality of the value of commodities differs in this respect from Dame Quickly, that we don t know where to have it. The value of commodities is the very opposite of the coarse materiality of their substance, not an atom of matter enters into its composition. Turn and examine a single commodity, by itself, as we will, yet in so far as it remains an object of value, it seems impossible to grasp it. If, however, we bear in mind that the value of commodities has a purely social reality, and that they acquire this reality only in so far as they are expressions or embodiments of one identical social substance, viz., human labour, it follows as a matter of course, that value can only manifest itself in the social relation of commodity to commodity. In fact we started from exchange value, or the exchange relation of commodities, in order to get at the value that lies hidden behind it. We must now return to this form under which value first appeared to us. Every one knows, if he knows nothing else, that commodities have a value form common to them all, and presenting a marked contrast with the varied bodily forms of their use values. I mean their money form. Here, however, a task is set us, the performance of which has never yet even been attempted by bourgeois economy, the task of tracing the genesis of this money form, of developing the expression of value implied in the value relation of commodities, from its simplest, almost imperceptible outline, to the dazzling money-form. By doing this we shall, at the same time, solve the riddle presented by money. The simplest value-relation is evidently that of one commodity to some one other commodity of a different kind. Hence the relation between the values of two commodities supplies us with the simplest expression of the value of a single commodity. The whole mystery of the form of value lies hidden in this elementary form. Its analysis, therefore, is our real difficulty. Here two different kinds of commodities (in our example the linen and the coat), evidently play two different parts. The linen expresses its value in the coat; the coat serves as the material in which that value is expressed. The former plays an active, the latter a passive, part. The value of the linen is represented as relative value, or appears in relative form. The coat officiates as equivalent, or appears in equivalent form. The relative form and the equivalent form are two intimately connected, mutually dependent and inseparable elements of the expression of value; but, at the same time, are mutually exclusive, antagonistic extremes i.e., poles of the same expression. They are allotted respectively to the two different commodities brought into relation by that expression. It is not possible to express the value of linen in linen. 20 yards of linen = 20 yards of linen is no expression of value. On the contrary, such an equation merely says that 20 yards of linen are nothing else than 20 yards of linen, a definite quantity of the use value linen. The value of the linen can therefore be expressed only relatively i.e., in some other commodity. The relative form of the value of the linen presupposes, therefore, the presence of some other commodity here the coat under the form of an equivalent. On the other hand, the commodity that figures as the equivalent cannot at the same time assume the relative form. That second commodity is not the one whose value is expressed. Its function is merely to serve as the material in which the value of the first commodity is expressed. No doubt, the expression 20 yards of linen = 1 coat, or 20 yards of linen are worth 1 coat, implies the opposite relation. 1 coat = 20 yards of linen, or 1 coat is worth 20 yards of linen. But, in that case, I must reverse the equation, in order to express the value of the coat relatively; and so soon as I do that the linen becomes the equivalent instead of the coat. A single commodity cannot, therefore, simultaneously assume, in the same expression of value, both forms. The very polarity of these forms makes them mutually exclusive. Whether, then, a commodity assumes the relative form, or the opposite equivalent form, depends entirely upon its accidental position in the expression of value that is, upon whether it is the commodity whose value is being expressed or the commodity in which value is being expressed. (a.) The nature and import of this form In order to discover how the elementary expression of the value of a commodity lies hidden in the value relation of two commodities, we must, in the first place, consider the latter entirely apart from its quantitative aspect. The usual mode of procedure is generally the reverse, and in the value relation nothing is seen but the proportion between definite quantities of two different sorts of commodities that are considered equal to each other. It is apt to be forgotten that the magnitudes of different things can be compared quantitatively, only when those magnitudes are expressed in terms of the same unit. It is only as expressions of such a unit that they are of the same denomination, and therefore commensurable. Whether 20 yards of linen = 1 coat or = 20 coats or = x coats that is, whether a given quantity of linen is worth few or many coats, every such statement implies that the linen and coats, as magnitudes of value, are expressions of the same unit, things of the same kind. Linen = coat is the basis of the equation. But the two commodities whose identity of quality is thus assumed, do not play the same part. It is only the value of the linen that is expressed. And how? By its reference to the coat as its equivalent, as something that can be exchanged for it. In this relation the coat is the mode of existence of value, is value embodied, for only as such is it the same as the linen. On the other hand, the linen s own value comes to the front, receives independent expression, for it is only as being value that it is comparable with the coat as a thing of equal value, or exchangeable with the coat. To borrow an illustration from chemistry, butyric acid is a different substance from propyl formate. Yet both are made up of the same chemical substances, carbon (C), hydrogen (H), and oxygen (O), and that, too, in like proportions namely, C4H8O2. If now we equate butyric acid to propyl formate, then, in the first place, propyl formate would be, in this relation, merely a form of existence of C4H8O2; and in the second place, we should be stating that butyric acid also consists of C4H8O2. Therefore, by thus equating the two substances, expression would be given to their chemical composition, while their different physical forms would be neglected. If we say that, as values, commodities are mere congelations of human labour, we reduce them by our analysis, it is true, to the abstraction, value; but we ascribe to this value no form apart from their bodily form. It is otherwise in the value relation of one commodity to another. Here, the one stands forth in its character of value by reason of its relation to the other. By making the coat the equivalent of the linen, we equate the labour embodied in the former to that in the latter. Now, it is true that the tailoring, which makes the coat, is concrete labour of a different sort from the weaving which makes the linen. But the act of equating it to the weaving, reduces the tailoring to that which is really equal in the two kinds of labour, to their common character of human labour. In this roundabout way, then, the fact is expressed, that weaving also, in so far as it weaves value, has nothing to distinguish it from tailoring, and, consequently, is abstract human labour. It is the expression of equivalence between different sorts of commodities that alone brings into relief the specific character of value-creating labour, and this it does by actually reducing the different varieties of labour embodied in the different kinds of commodities to their common quality of human labour in the abstract. There is, however, something else required beyond the expression of the specific character of the labour of which the value of the linen consists. Human labour power in motion, or human labour, creates value, but is not itself value. It becomes value only in its congealed state, when embodied in the form of some object. In order to express the value of the linen as a congelation of human labour, that value must be expressed as having objective existence, as being a something materially different from the linen itself, and yet a something common to the linen and all other commodities. The problem is already solved. When occupying the position of equivalent in the equation of value, the coat ranks qualitatively as the equal of the linen, as something of the same kind, because it is value. In this position it is a thing in which we see nothing but value, or whose palpable bodily form represents value. Yet the coat itself, the body of the commodity, coat, is a mere use value. A coat as such no more tells us it is value, than does the first piece of linen we take hold of. This shows that when placed in value-relation to the linen, the coat signifies more than when out of that relation, just as many a man strutting about in a gorgeous uniform counts for more than when in mufti. In the production of the coat, human labour power, in the shape of tailoring, must have been actually expended. Human labour is therefore accumulated in it. In this aspect the coat is a depository of value, but though worn to a thread, it does not let this fact show through. And as equivalent of the linen in the value equation, it exists under this aspect alone, counts therefore as embodied value, as a body that is value. A, for instance, cannot be your majesty to B, unless at the same time majesty in B s eyes assumes the bodily form of A, and, what is more, with every new father of the people, changes its features, hair, and many other things besides. Hence, in the value equation, in which the coat is the equivalent of the linen, the coat officiates as the form of value. The value of the commodity linen is expressed by the bodily form of the commodity coat, the value of one by the use value of the other. As a use value, the linen is something palpably different from the coat; as value, it is the same as the coat, and now has the appearance of a coat. Thus the linen acquires a value form different from its physical form. The fact that it is value, is made manifest by its equality with the coat, just as the sheep s nature of a Christian is shown in his resemblance to the Lamb of God. We see, then, all that our analysis of the value of commodities has already told us, is told us by the linen itself, so soon as it comes into communication with another commodity, the coat. Only it betrays its thoughts in that language with which alone it is familiar, the language of commodities. In order to tell us that its own value is created by labour in its abstract character of human labour, it says that the coat, in so far as it is worth as much as the linen, and therefore is value, consists of the same labour as the linen. In order to inform us that its sublime reality as value is not the same as its buckram body, it says that value has the appearance of a coat, and consequently that so far as the linen is value, it and the coat are as like as two peas. We may here remark, that the language of commodities has, besides Hebrew, many other more or less correct dialects. The German Wertsein, to be worth, for instance, expresses in a less striking manner than the Romance verbs valere, valer, valoir, that the equating of commodity B to commodity A, is commodity A s own mode of expressing its value. Paris vaut bien une messe. [Paris is certainly worth a mass] By means, therefore, of the value-relation expressed in our equation, the bodily form of commodity B becomes the value form of commodity A, or the body of commodity B acts as a mirror to the value of commodity A. By putting itself in relation with commodity B, as value in propri person , as the matter of which human labour is made up, the commodity A converts the value in use, B, into the substance in which to express its, A s, own value. The value of A, thus expressed in the use value of B, has taken the form of relative value. (b.) Quantitative determination of Relative value Every commodity, whose value it is intended to express, is a useful object of given quantity, as 15 bushels of corn, or 100 lbs of coffee. And a given quantity of any commodity contains a definite quantity of human labour. The value form must therefore not only express value generally, but also value in definite quantity. Therefore, in the value relation of commodity A to commodity B, of the linen to the coat, not only is the latter, as value in general, made the equal in quality of the linen, but a definite quantity of coat (1 coat) is made the equivalent of a definite quantity (20 yards) of linen. The equation, 20 yards of linen = 1 coat, or 20 yards of linen are worth one coat, implies that the same quantity of value substance (congealed labour) is embodied in both; that the two commodities have each cost the same amount of labour or the same quantity of labour time. But the labour time necessary for the production of 20 yards of linen or 1 coat varies with every change in the productiveness of weaving or tailoring. We have now to consider the influence of such changes on the quantitative aspect of the relative expression of value. If we compare the different cases in I and II, we see that the same change of magnitude in relative value may arise from totally opposite causes. Thus, the equation, 20 yards of linen = 1 coat, becomes 20 yards of linen = 2 coats, either, because the value of the linen has doubled, or because the value of the coat has fallen by one-half; and it becomes 20 yards of linen = coat, either, because the value of the linen has fallen by one-half, or because the value of the coat has doubled. Thus real changes in the magnitude of value are neither unequivocally nor exhaustively reflected in their relative expression, that is, in the equation expressing the magnitude of relative value. The relative value of a commodity may vary, although its value remains constant. Its relative value may remain constant, although its value varies; and finally, simultaneous variations in the magnitude of value and in that of its relative expression by no means necessarily correspond in amount. We have seen that commodity A (the linen), by expressing its value in the use value of a commodity differing in kind (the coat), at the same time impresses upon the latter a specific form of value, namely that of the equivalent. The commodity linen manifests its quality of having a value by the fact that the coat, without having assumed a value form different from its bodily form, is equated to the linen. The fact that the latter therefore has a value is expressed by saying that the coat is directly exchangeable with it. Therefore, when we say that a commodity is in the equivalent form, we express the fact that it is directly exchangeable with other commodities. When one commodity, such as a coat, serves as the equivalent of another, such as linen, and coats consequently acquire the characteristic property of being directly exchangeable with linen, we are far from knowing in what proportion the two are exchangeable. The value of the linen being given in magnitude, that proportion depends on the value of the coat. Whether the coat serves as the equivalent and the linen as relative value, or the linen as the equivalent and the coat as relative value, the magnitude of the coat s value is determined, independently of its value form, by the labour time necessary for its production. But whenever the coat assumes in the equation of value, the position of equivalent, its value acquires no quantitative expression; on the contrary, the commodity coat now figures only as a definite quantity of some article. For instance, 40 yards of linen are worth what? 2 coats. Because the commodity coat here plays the part of equivalent, because the use-value coat, as opposed to the linen, figures as an embodiment of value, therefore a definite number of coats suffices to express the definite quantity of value in the linen. Two coats may therefore express the quantity of value of 40 yards of linen, but they can never express the quantity of their own value. A superficial observation of this fact, namely, that in the equation of value, the equivalent figures exclusively as a simple quantity of some article, of some use value, has misled Bailey, as also many others, both before and after him, into seeing, in the expression of value, merely a quantitative relation. The truth being, that when a commodity acts as equivalent, no quantitative determination of its value is expressed. The first peculiarity that strikes us, in considering the form of the equivalent, is this: use value becomes the form of manifestation, the phenomenal form of its opposite, value. The bodily form of the commodity becomes its value form. But, mark well, that this quid pro quo exists in the case of any commodity B, only when some other commodity A enters into a value relation with it, and then only within the limits of this relation. Since no commodity can stand in the relation of equivalent to itself, and thus turn its own bodily shape into the expression of its own value, every commodity is compelled to choose some other commodity for its equivalent, and to accept the use value, that is to say, the bodily shape of that other commodity as the form of its own value. One of the measures that we apply to commodities as material substances, as use values, will serve to illustrate this point. A sugar-loaf being a body, is heavy, and therefore has weight: but we can neither see nor touch this weight. We then take various pieces of iron, whose weight has been determined beforehand. The iron, as iron, is no more the form of manifestation of weight, than is the sugar-loaf. Nevertheless, in order to express the sugar-loaf as so much weight, we put it into a weight-relation with the iron. In this relation, the iron officiates as a body representing nothing but weight. A certain quantity of iron therefore serves as the measure of the weight of the sugar, and represents, in relation to the sugar-loaf, weight embodied, the form of manifestation of weight. This part is played by the iron only within this relation, into which the sugar or any other body, whose weight has to be determined, enters with the iron. Were they not both heavy, they could not enter into this relation, and the one could therefore not serve as the expression of the weight of the other. When we throw both into the scales, we see in reality, that as weight they are both the same, and that, therefore, when taken in proper proportions, they have the same weight. Just as the substance iron, as a measure of weight, represents in relation to the sugar-loaf weight alone, so, in our expression of value, the material object, coat, in relation to the linen, represents value alone. Here, however, the analogy ceases. The iron, in the expression of the weight of the sugar-loaf, represents a natural property common to both bodies, namely their weight; but the coat, in the expression of value of the linen, represents a non-natural property of both, something purely social, namely, their value. Since the relative form of value of a commodity the linen, for example expresses the value of that commodity, as being something wholly different from its substance and properties, as being, for instance, coat-like, we see that this expression itself indicates that some social relation lies at the bottom of it. With the equivalent form it is just the contrary. The very essence of this form is that the material commodity itself the coat just as it is, expresses value, and is endowed with the form of value by Nature itself. Of course this holds good only so long as the value relation exists, in which the coat stands in the position of equivalent to the linen. Since, however, the properties of a thing are not the result of its relations to other things, but only manifest themselves in such relations, the coat seems to be endowed with its equivalent form, its property of being directly exchangeable, just as much by Nature as it is endowed with the property of being heavy, or the capacity to keep us warm. Hence the enigmatical character of the equivalent form which escapes the notice of the bourgeois political economist, until this form, completely developed, confronts him in the shape of money. He then seeks to explain away the mystical character of gold and silver, by substituting for them less dazzling commodities, and by reciting, with ever renewed satisfaction, the catalogue of all possible commodities which at one time or another have played the part of equivalent. He has not the least suspicion that the most simple expression of value, such as 20 yds of linen = 1 coat, already propounds the riddle of the equivalent form for our solution. The body of the commodity that serves as the equivalent, figures as the materialisation of human labour in the abstract, and is at the same time the product of some specifically useful concrete labour. This concrete labour becomes, therefore, the medium for expressing abstract human labour. If on the one hand the coat ranks as nothing but the embodiment of abstract human labour, so, on the other hand, the tailoring which is actually embodied in it, counts as nothing but the form under which that abstract labour is realised. In the expression of value of the linen, the utility of the tailoring consists, not in making clothes, but in making an object, which we at once recognise to be Value, and therefore to be a congelation of labour, but of labour indistinguishable from that realised in the value of the linen. In order to act as such a mirror of value, the labour of tailoring must reflect nothing besides its own abstract quality of being human labour generally. In tailoring, as well as in weaving, human labour power is expended. Both, therefore, possess the general property of being human labour, and may, therefore, in certain cases, such as in the production of value, have to be considered under this aspect alone. There is nothing mysterious in this. But in the expression of value there is a complete turn of the tables. For instance, how is the fact to be expressed that weaving creates the value of the linen, not by virtue of being weaving, as such, but by reason of its general property of being human labour? Simply by opposing to weaving that other particular form of concrete labour (in this instance tailoring), which produces the equivalent of the product of weaving. Just as the coat in its bodily form became a direct expression of value, so now does tailoring, a concrete form of labour, appear as the direct and palpable embodiment of human labour generally. Hence, the second peculiarity of the equivalent form is, that concrete labour becomes the form under which its opposite, abstract human labour, manifests itself. But because this concrete labour, tailoring in our case, ranks as, and is directly identified with, undifferentiated human labour, it also ranks as identical with any other sort of labour, and therefore with that embodied in the linen. Consequently, although, like all other commodity-producing labour, it is the labour of private individuals, yet, at the same time, it ranks as labour directly social in its character. This is the reason why it results in a product directly exchangeable with other commodities. We have then a third peculiarity of the equivalent form, namely, that the labour of private individuals takes the form of its opposite, labour directly social in its form. The two latter peculiarities of the equivalent form will become more intelligible if we go back to the great thinker who was the first to analyse so many forms, whether of thought, society, or Nature, and amongst them also the form of value. I mean Aristotle. In the first place, he clearly enunciates that the money form of commodities is only the further development of the simple form of value i.e., of the expression of the value of one commodity in some other commodity taken at random; for he says: is not to be distinguished from He further sees that the value relation which gives rise to this expression makes it necessary that the house should qualitatively be made the equal of the bed, and that, without such an equalisation, these two clearly different things could not be compared with each other as commensurable quantities. Exchange, he says, cannot take place without equality, and equality not without commensurability. ( ). Here, however, he comes to a stop, and gives up the further analysis of the form of value. It is, however, in reality, impossible ( ), that such unlike things can be commensurable i.e., qualitatively equal. Such an equalisation can only be something foreign to their real nature, consequently only a makeshift for practical purposes. Aristotle therefore, himself, tells us what barred the way to his further analysis; it was the absence of any concept of value. What is that equal something, that common substance, which admits of the value of the beds being expressed by a house? Such a thing, in truth, cannot exist, says Aristotle. And why not? Compared with the beds, the house does represent something equal to them, in so far as it represents what is really equal, both in the beds and the house. And that is human labour. There was, however, an important fact which prevented Aristotle from seeing that, to attribute value to commodities, is merely a mode of expressing all labour as equal human labour, and consequently as labour of equal quality. Greek society was founded upon slavery, and had, therefore, for its natural basis, the inequality of men and of their labour powers. The secret of the expression of value, namely, that all kinds of labour are equal and equivalent, because, and so far as they are human labour in general, cannot be deciphered, until the notion of human equality has already acquired the fixity of a popular prejudice. This, however, is possible only in a society in which the great mass of the produce of labour takes the form of commodities, in which, consequently, the dominant relation between man and man, is that of owners of commodities. The brilliancy of Aristotle s genius is shown by this alone, that he discovered, in the expression of the value of commodities, a relation of equality. The peculiar conditions of the society in which he lived, alone prevented him from discovering what, in truth, was at the bottom of this equality. The elementary form of value of a commodity is contained in the equation, expressing its value relation to another commodity of a different kind, or in its exchange relation to the same. The value of commodity A, is qualitatively expressed, by the fact that commodity B is directly exchangeable with it. Its value is quantitatively expressed by the fact, that a definite quantity of B is exchangeable with a definite quantity of A. In other words, the value of a commodity obtains independent and definite expression, by taking the form of exchange value. When, at the beginning of this chapter, we said, in common parlance, that a commodity is both a use value and an exchange value, we were, accurately speaking, wrong. A commodity is a use value or object of utility, and a value. It manifests itself as this two-fold thing, that it is, as soon as its value assumes an independent form viz., the form of exchange value. It never assumes this form when isolated, but only when placed in a value or exchange relation with another commodity of a different kind. When once we know this, such a mode of expression does no harm; it simply serves as an abbreviation. Our analysis has shown, that the form or expression of the value of a commodity originates in the nature of value, and not that value and its magnitude originate in the mode of their expression as exchange value. This, however, is the delusion as well of the mercantilists and their recent revivers, Ferrier, Ganilh, and others, as also of their antipodes, the modern bagmen of Free-trade, such as Bastiat. The mercantilists lay special stress on the qualitative aspect of the expression of value, and consequently on the equivalent form of commodities, which attains its full perfection in money. The modern hawkers of Free-trade, who must get rid of their article at any price, on the other hand, lay most stress on the quantitative aspect of the relative form of value. For them there consequently exists neither value, nor magnitude of value, anywhere except in its expression by means of the exchange relation of commodities, that is, in the daily list of prices current. Macleod, who has taken upon himself to dress up the confused ideas of Lombard Street in the most learned finery, is a successful cross between the superstitious mercantilists, and the enlightened Free-trade bagmen. A close scrutiny of the expression of the value of A in terms of B, contained in the equation expressing the value relation of A to B, has shown us that, within that relation, the bodily form of A figures only as a use value, the bodily form of B only as the form or aspect of value. The opposition or contrast existing internally in each commodity between use value and value, is, therefore, made evident externally by two commodities being placed in such relation to each other, that the commodity whose value it is sought to express, figures directly as a mere use value, while the commodity in which that value is to be expressed, figures directly as mere exchange value. Hence the elementary form of value of a commodity is the elementary form in which the contrast contained in that commodity, between use value and value, becomes apparent. Every product of labour is, in all states of society, a use value; but it is only at a definite historical epoch in a society s development that such a product becomes a commodity, viz., at the epoch when the labour spent on the production of a useful article becomes expressed as one of the objective qualities of that article, i.e., as its value. It therefore follows that the elementary value form is also the primitive form under which a product of labour appears historically as a commodity, and that the gradual transformation of such products into commodities, proceeds pari passu with the development of the value form. We perceive, at first sight, the deficiencies of the elementary form of value: it is a mere germ, which must undergo a series of metamorphoses before it can ripen into the price form. The expression of the value of commodity A in terms of any other commodity B, merely distinguishes the value from the use value of A, and therefore places A merely in a relation of exchange with a single different commodity, B; but it is still far from expressing A s qualitative equality, and quantitative proportionality, to all commodities. To the elementary relative value form of a commodity, there corresponds the single equivalent form of one other commodity. Thus, in the relative expression of value of the linen, the coat assumes the form of equivalent, or of being directly exchangeable, only in relation to a single commodity, the linen. Nevertheless, the elementary form of value passes by an easy transition into a more complete form. It is true that by means of the elementary form, the value of a commodity A, becomes expressed in terms of one, and only one, other commodity. But that one may be a commodity of any kind, coat, iron, corn, or anything else. Therefore, according as A is placed in relation with one or the other, we get for one and the same commodity, different elementary expressions of value. The number of such possible expressions is limited only by the number of the different kinds of commodities distinct from it. The isolated expression of A s value, is therefore convertible into a series, prolonged to any length, of the different elementary expressions of that value. The value of a single commodity, the linen, for example, is now expressed in terms of numberless other elements of the world of commodities. Every other commodity now becomes a mirror of the linen s value. It is thus, that for the first time, this value shows itself in its true light as a congelation of undifferentiated human labour. For the labour that creates it, now stands expressly revealed, as labour that ranks equally with every other sort of human labour, no matter what its form, whether tailoring, ploughing, mining, &c., and no matter, therefore, whether it is realised in coats, corn, iron, or gold. The linen, by virtue of the form of its value, now stands in a social relation, no longer with only one other kind of commodity, but with the whole world of commodities. As a commodity, it is a citizen of that world. At the same time, the interminable series of value equations implies, that as regards the value of a commodity, it is a matter of indifference under what particular form, or kind, of use value it appears. In the first form, 20 yds of linen = 1 coat, it might, for ought that otherwise appears, be pure accident, that these two commodities are exchangeable in definite quantities. In the second form, on the contrary, we perceive at once the background that determines, and is essentially different from, this accidental appearance. The value of the linen remains unaltered in magnitude, whether expressed in coats, coffee, or iron, or in numberless different commodities, the property of as many different owners. The accidental relation between two individual commodity-owners disappears. It becomes plain, that it is not the exchange of commodities which regulates the magnitude of their value; but, on the contrary, that it is the magnitude of their value which controls their exchange proportions. Each commodity, such as, coat, tea, corn, iron, &c., figures in the expression of value of the linen, as an equivalent, and, consequently, as a thing that is value. The bodily form of each of these commodities figures now as a particular equivalent form, one out of many. In the same way the manifold concrete useful kinds of labour, embodied in these different commodities, rank now as so many different forms of the realisation, or manifestation, of undifferentiated human labour. In the first place, the relative expression of value is incomplete because the series representing it is interminable. The chain of which each equation of value is a link, is liable at any moment to be lengthened by each new kind of commodity that comes into existence and furnishes the material for a fresh expression of value. In the second place, it is a many-coloured mosaic of disparate and independent expressions of value. And lastly, if, as must be the case, the relative value of each commodity in turn, becomes expressed in this expanded form, we get for each of them a relative value form, different in every case, and consisting of an interminable series of expressions of value. The defects of the expanded relative value form are reflected in the corresponding equivalent form. Since the bodily form of each single commodity is one particular equivalent form amongst numberless others, we have, on the whole, nothing but fragmentary equivalent forms, each excluding the others. In the same way, also, the special, concrete, useful kind of labour embodied in each particular equivalent, is presented only as a particular kind of labour, and therefore not as an exhaustive representative of human labour generally. The latter, indeed, gains adequate manifestation in the totality of its manifold, particular, concrete forms. But, in that case, its expression in an infinite series is ever incomplete and deficient in unity. The expanded relative value form is, however, nothing but the sum of the elementary relative expressions or equations of the first kind, such as: Each of these implies the corresponding inverted equation, In fact, when a person exchanges his linen for many other commodities, and thus expresses its value in a series of other commodities, it necessarily follows, that the various owners of the latter exchange them for the linen, and consequently express the value of their various commodities in one and the same third commodity, the linen. If then, we reverse the series, 20 yards of linen = 1 coat or = 10 lbs of tea, etc., that is to say, if we give expression to the converse relation already implied in the series, we get, All commodities now express their value (1) in an elementary form, because in a single commodity; (2) with unity, because in one and the same commodity. This form of value is elementary and the same for all, therefore general. The forms A and B were fit only to express the value of a commodity as something distinct from its use value or material form. The first form, A, furnishes such equations as the following: 1 coat = 20 yards of linen, 10 lbs of tea = a ton of iron. The value of the coat is equated to linen, that of the tea to iron. But to be equated to linen, and again to iron, is to be as different as are linen and iron. This form, it is plain, occurs practically only in the first beginning, when the products of labour are converted into commodities by accidental and occasional exchanges. The second form, B, distinguishes, in a more adequate manner than the first, the value of a commodity from its use value, for the value of the coat is there placed in contrast under all possible shapes with the bodily form of the coat; it is equated to linen, to iron, to tea, in short, to everything else, only not to itself, the coat. On the other hand, any general expression of value common to all is directly excluded; for, in the equation of value of each commodity, all other commodities now appear only under the form of equivalents. The expanded form of value comes into actual existence for the first time so soon as a particular product of labour, such as cattle, is no longer exceptionally, but habitually, exchanged for various other commodities. The third and lastly developed form expresses the values of the whole world of commodities in terms of a single commodity set apart for the purpose, namely, the linen, and thus represents to us their values by means of their equality with linen. The value of every commodity is now, by being equated to linen, not only differentiated from its own use value, but from all other use values generally, and is, by that very fact, expressed as that which is common to all commodities. By this form, commodities are, for the first time, effectively brought into relation with one another as values, or made to appear as exchange values. The two earlier forms either express the value of each commodity in terms of a single commodity of a different kind, or in a series of many such commodities. In both cases, it is, so to say, the special business of each single commodity to find an expression for its value, and this it does without the help of the others. These others, with respect to the former, play the passive parts of equivalents. The general form of value, C, results from the joint action of the whole world of commodities, and from that alone. A commodity can acquire a general expression of its value only by all other commodities, simultaneously with it, expressing their values in the same equivalent; and every new commodity must follow suit. It thus becomes evident that since the existence of commodities as values is purely social, this social existence can be expressed by the totality of their social relations alone, and consequently that the form of their value must be a socially recognised form. All commodities being equated to linen now appear not only as qualitatively equal as values generally, but also as values whose magnitudes are capable of comparison. By expressing the magnitudes of their values in one and the same material, the linen, those magnitudes are also compared with each other. For instance, 10 lbs of tea = 20 yards of linen, and 40 lbs of coffee = 20 yards of linen. Therefore, 10 lbs of tea = 40 lbs of coffee. In other words, there is contained in 1 lb of coffee only one-fourth as much substance of value labour as is contained in 1 lb of tea. The general form of relative value, embracing the whole world of commodities, converts the single commodity that is excluded from the rest, and made to play the part of equivalent here the linen into the universal equivalent. The bodily form of the linen is now the form assumed in common by the values of all commodities; it therefore becomes directly exchangeable with all and every of them. The substance linen becomes the visible incarnation, the social chrysalis state of every kind of human labour. Weaving, which is the labour of certain private individuals producing a particular article, linen, acquires in consequence a social character, the character of equality with all other kinds of labour. The innumerable equations of which the general form of value is composed, equate in turn the labour embodied in the linen to that embodied in every other commodity, and they thus convert weaving into the general form of manifestation of undifferentiated human labour. In this manner the labour realised in the values of commodities is presented not only under its negative aspect, under which abstraction is made from every concrete form and useful property of actual work, but its own positive nature is made to reveal itself expressly. The general value form is the reduction of all kinds of actual labour to their common character of being human labour generally, of being the expenditure of human labour power. The general value form, which represents all products of labour as mere congelations of undifferentiated human labour, shows by its very structure that it is the social resum of the world of commodities. That form consequently makes it indisputably evident that in the world of commodities the character possessed by all labour of being human labour constitutes its specific social character. The degree of development of the relative form of value corresponds to that of the equivalent form. But we must bear in mind that the development of the latter is only the expression and result of the development of the former. The primary or isolated relative form of value of one commodity converts some other commodity into an isolated equivalent. The expanded form of relative value, which is the expression of the value of one commodity in terms of all other commodities, endows those other commodities with the character of particular equivalents differing in kind. And lastly, a particular kind of commodity acquires the character of universal equivalent, because all other commodities make it the material in which they uniformly express their value. The antagonism between the relative form of value and the equivalent form, the two poles of the value form, is developed concurrently with that form itself. The first form, 20 yds of linen = one coat, already contains this antagonism, without as yet fixing it. According as we read this equation forwards or backwards, the parts played by the linen and the coat are different. In the one case the relative value of the linen is expressed in the coat, in the other case the relative value of the coat is expressed in the linen. In this first form of value, therefore, it is difficult to grasp the polar contrast. Form B shows that only one single commodity at a time can completely expand its relative value, and that it acquires this expanded form only because, and in so far as, all other commodities are, with respect to it, equivalents. Here we cannot reverse the equation, as we can the equation 20 yds of linen = 1 coat, without altering its general character, and converting it from the expanded form of value into the general form of value. Finally, the form C gives to the world of commodities a general social relative form of value, because, and in so far as, thereby all commodities, with the exception of one, are excluded from the equivalent form. A single commodity, the linen, appears therefore to have acquired the character of direct exchangeability with every other commodity because, and in so far as, this character is denied to every other commodity. The commodity that figures as universal equivalent, is, on the other hand, excluded from the relative value form. If the linen, or any other commodity serving as universal equivalent, were, at the same time, to share in the relative form of value, it would have to serve as its own equivalent. We should then have 20 yds of linen = 20 yds of linen; this tautology expresses neither value, nor magnitude of value. In order to express the relative value of the universal equivalent, we must rather reverse the form C. This equivalent has no relative form of value in common with other commodities, but its value is relatively expressed by a never ending series of other commodities. Thus, the expanded form of relative value, or form B, now shows itself as the specific form of relative value for the equivalent commodity. The universal equivalent form is a form of value in general. It can, therefore, be assumed by any commodity. On the other hand, if a commodity be found to have assumed the universal equivalent form (form C), this is only because and in so far as it has been excluded from the rest of all other commodities as their equivalent, and that by their own act. And from the moment that this exclusion becomes finally restricted to one particular commodity, from that moment only, the general form of relative value of the world of commodities obtains real consistence and general social validity. The particular commodity, with whose bodily form the equivalent form is thus socially identified, now becomes the money commodity, or serves as money. It becomes the special social function of that commodity, and consequently its social monopoly, to play within the world of commodities the part of the universal equivalent. Amongst the commodities which, in form B, figure as particular equivalents of the linen, and, in form C, express in common their relative values in linen, this foremost place has been attained by one in particular namely, gold. If, then, in form C we replace the linen by gold, we get, In passing from form A to form B, and from the latter to form C, the changes are fundamental. On the other hand, there is no difference between forms C and D, except that, in the latter, gold has assumed the equivalent form in the place of linen. Gold is in form D, what linen was in form C the universal equivalent. The progress consists in this alone, that the character of direct and universal exchangeability in other words, that the universal equivalent form has now, by social custom, become finally identified with the substance, gold. Gold is now money with reference to all other commodities only because it was previously, with reference to them, a simple commodity. Like all other commodities, it was also capable of serving as an equivalent, either as simple equivalent in isolated exchanges, or as particular equivalent by the side of others. Gradually it began to serve, within varying limits, as universal equivalent. So soon as it monopolises this position in the expression of value for the world of commodities, it becomes the money commodity, and then, and not till then, does form D become distinct from form C, and the general form of value become changed into the money form. The elementary expression of the relative value of a single commodity, such as linen, in terms of the commodity, such as gold, that plays the part of money, is the price form of that commodity. The price form of the linen is therefore The difficulty in forming a concept of the money form, consists in clearly comprehending the universal equivalent form, and as a necessary corollary, the general form of value, form C. The latter is deducible from form B, the expanded form of value, the essential component element of which, we saw, is form A, 20 yards of linen = 1 coat or x commodity A = y commodity B. The simple commodity form is therefore the germ of the money form. A commodity appears, at first sight, a very trivial thing, and easily understood. Its analysis shows that it is, in reality, a very queer thing, abounding in metaphysical subtleties and theological niceties. So far as it is a value in use, there is nothing mysterious about it, whether we consider it from the point of view that by its properties it is capable of satisfying human wants, or from the point that those properties are the product of human labour. It is as clear as noon-day, that man, by his industry, changes the forms of the materials furnished by Nature, in such a way as to make them useful to him. The form of wood, for instance, is altered, by making a table out of it. Yet, for all that, the table continues to be that common, every-day thing, wood. But, so soon as it steps forth as a commodity, it is changed into something transcendent. It not only stands with its feet on the ground, but, in relation to all other commodities, it stands on its head, and evolves out of its wooden brain grotesque ideas, far more wonderful than table-turning ever was. [26a] The mystical character of commodities does not originate, therefore, in their use value. Just as little does it proceed from the nature of the determining factors of value. For, in the first place, however varied the useful kinds of labour, or productive activities, may be, it is a physiological fact, that they are functions of the human organism, and that each such function, whatever may be its nature or form, is essentially the expenditure of human brain, nerves, muscles, &c. Secondly, with regard to that which forms the ground-work for the quantitative determination of value, namely, the duration of that expenditure, or the quantity of labour, it is quite clear that there is a palpable difference between its quantity and quality. In all states of society, the labour time that it costs to produce the means of subsistence, must necessarily be an object of interest to mankind, though not of equal interest in different stages of development. And lastly, from the moment that men in any way work for one another, their labour assumes a social form. Whence, then, arises the enigmatical character of the product of labour, so soon as it assumes the form of commodities? Clearly from this form itself. The equality of all sorts of human labour is expressed objectively by their products all being equally values; the measure of the expenditure of labour power by the duration of that expenditure, takes the form of the quantity of value of the products of labour; and finally the mutual relations of the producers, within which the social character of their labour affirms itself, take the form of a social relation between the products. A commodity is therefore a mysterious thing, simply because in it the social character of men s labour appears to them as an objective character stamped upon the product of that labour; because the relation of the producers to the sum total of their own labour is presented to them as a social relation, existing not between themselves, but between the products of their labour. This is the reason why the products of labour become commodities, social things whose qualities are at the same time perceptible and imperceptible by the senses. In the same way the light from an object is perceived by us not as the subjective excitation of our optic nerve, but as the objective form of something outside the eye itself. But, in the act of seeing, there is at all events, an actual passage of light from one thing to another, from the external object to the eye. There is a physical relation between physical things. But it is different with commodities. There, the existence of the things qu commodities, and the value relation between the products of labour which stamps them as commodities, have absolutely no connection with their physical properties and with the material relations arising therefrom. There it is a definite social relation between men, that assumes, in their eyes, the fantastic form of a relation between things. In order, therefore, to find an analogy, we must have recourse to the mist-enveloped regions of the religious world. In that world the productions of the human brain appear as independent beings endowed with life, and entering into relation both with one another and the human race. So it is in the world of commodities with the products of men s hands. This I call the Fetishism which attaches itself to the products of labour, so soon as they are produced as commodities, and which is therefore inseparable from the production of commodities. This Fetishism of commodities has its origin, as the foregoing analysis has already shown, in the peculiar social character of the labour that produces them. As a general rule, articles of utility become commodities, only because they are products of the labour of private individuals or groups of individuals who carry on their work independently of each other. The sum total of the labour of all these private individuals forms the aggregate labour of society. Since the producers do not come into social contact with each other until they exchange their products, the specific social character of each producer s labour does not show itself except in the act of exchange. In other words, the labour of the individual asserts itself as a part of the labour of society, only by means of the relations which the act of exchange establishes directly between the products, and indirectly, through them, between the producers. To the latter, therefore, the relations connecting the labour of one individual with that of the rest appear, not as direct social relations between individuals at work, but as what they really are, material relations between persons and social relations between things. It is only by being exchanged that the products of labour acquire, as values, one uniform social status, distinct from their varied forms of existence as objects of utility. This division of a product into a useful thing and a value becomes practically important, only when exchange has acquired such an extension that useful articles are produced for the purpose of being exchanged, and their character as values has therefore to be taken into account, beforehand, during production. From this moment the labour of the individual producer acquires socially a two-fold character. On the one hand, it must, as a definite useful kind of labour, satisfy a definite social want, and thus hold its place as part and parcel of the collective labour of all, as a branch of a social division of labour that has sprung up spontaneously. On the other hand, it can satisfy the manifold wants of the individual producer himself, only in so far as the mutual exchangeability of all kinds of useful private labour is an established social fact, and therefore the private useful labour of each producer ranks on an equality with that of all others. The equalisation of the most different kinds of labour can be the result only of an abstraction from their inequalities, or of reducing them to their common denominator, viz. expenditure of human labour power or human labour in the abstract. The two-fold social character of the labour of the individual appears to him, when reflected in his brain, only under those forms which are impressed upon that labour in every-day practice by the exchange of products. In this way, the character that his own labour possesses of being socially useful takes the form of the condition, that the product must be not only useful, but useful for others, and the social character that his particular labour has of being the equal of all other particular kinds of labour, takes the form that all the physically different articles that are the products of labour, have one common quality, viz., that of having value. Hence, when we bring the products of our labour into relation with each other as values, it is not because we see in these articles the material receptacles of homogeneous human labour. Quite the contrary: whenever, by an exchange, we equate as values our different products, by that very act, we also equate, as human labour, the different kinds of labour expended upon them. We are not aware of this, nevertheless we do it. Value, therefore, does not stalk about with a label describing what it is. It is value, rather, that converts every product into a social hieroglyphic. Later on, we try to decipher the hieroglyphic, to get behind the secret of our own social products; for to stamp an object of utility as a value, is just as much a social product as language. The recent scientific discovery, that the products of labour, so far as they are values, are but material expressions of the human labour spent in their production, marks, indeed, an epoch in the history of the development of the human race, but, by no means, dissipates the mist through which the social character of labour appears to us to be an objective character of the products themselves. The fact, that in the particular form of production with which we are dealing, viz., the production of commodities, the specific social character of private labour carried on independently, consists in the equality of every kind of that labour, by virtue of its being human labour, which character, therefore, assumes in the product the form of value this fact appears to the producers, notwithstanding the discovery above referred to, to be just as real and final, as the fact, that, after the discovery by science of the component gases of air, the atmosphere itself remained unaltered. What, first of all, practically concerns producers when they make an exchange, is the question, how much of some other product they get for their own? In what proportions the products are exchangeable? When these proportions have, by custom, attained a certain stability, they appear to result from the nature of the products, so that, for instance, one ton of iron and two ounces of gold appear as naturally to be of equal value as a pound of gold and a pound of iron in spite of their different physical and chemical qualities appear to be of equal weight. The character of having value, when once impressed upon products, obtains fixity only by reason of their acting and re-acting upon each other as quantities of value. These quantities vary continually, independently of the will, foresight and action of the producers. To them, their own social action takes the form of the action of objects, which rule the producers instead of being ruled by them. It requires a fully developed production of commodities before, from accumulated experience alone, the scientific conviction springs up, that all the different kinds of private labour, which are carried on independently of each other, and yet as spontaneously developed branches of the social division of labour, are continually being reduced to the quantitative proportions in which society requires them. And why? Because, in the midst of all the accidental and ever fluctuating exchange relations between the products, the labour time socially necessary for their production forcibly asserts itself like an over-riding law of Nature. The law of gravity thus asserts itself when a house falls about our ears. The determination of the magnitude of value by labour time is therefore a secret, hidden under the apparent fluctuations in the relative values of commodities. Its discovery, while removing all appearance of mere accidentality from the determination of the magnitude of the values of products, yet in no way alters the mode in which that determination takes place. Man s reflections on the forms of social life, and consequently, also, his scientific analysis of those forms, take a course directly opposite to that of their actual historical development. He begins, post festum, with the results of the process of development ready to hand before him. The characters that stamp products as commodities, and whose establishment is a necessary preliminary to the circulation of commodities, have already acquired the stability of natural, self-understood forms of social life, before man seeks to decipher, not their historical character, for in his eyes they are immutable, but their meaning. Consequently it was the analysis of the prices of commodities that alone led to the determination of the magnitude of value, and it was the common expression of all commodities in money that alone led to the establishment of their characters as values. It is, however, just this ultimate money form of the world of commodities that actually conceals, instead of disclosing, the social character of private labour, and the social relations between the individual producers. When I state that coats or boots stand in a relation to linen, because it is the universal incarnation of abstract human labour, the absurdity of the statement is self-evident. Nevertheless, when the producers of coats and boots compare those articles with linen, or, what is the same thing, with gold or silver, as the universal equivalent, they express the relation between their own private labour and the collective labour of society in the same absurd form. The categories of bourgeois economy consist of such like forms. They are forms of thought expressing with social validity the conditions and relations of a definite, historically determined mode of production, viz., the production of commodities. The whole mystery of commodities, all the magic and necromancy that surrounds the products of labour as long as they take the form of commodities, vanishes therefore, so soon as we come to other forms of production. Since Robinson Crusoe s experiences are a favourite theme with political economists, let us take a look at him on his island. Moderate though he be, yet some few wants he has to satisfy, and must therefore do a little useful work of various sorts, such as making tools and furniture, taming goats, fishing and hunting. Of his prayers and the like we take no account, since they are a source of pleasure to him, and he looks upon them as so much recreation. In spite of the variety of his work, he knows that his labour, whatever its form, is but the activity of one and the same Robinson, and consequently, that it consists of nothing but different modes of human labour. Necessity itself compels him to apportion his time accurately between his different kinds of work. Whether one kind occupies a greater space in his general activity than another, depends on the difficulties, greater or less as the case may be, to be overcome in attaining the useful effect aimed at. This our friend Robinson soon learns by experience, and having rescued a watch, ledger, and pen and ink from the wreck, commences, like a true-born Briton, to keep a set of books. His stock-book contains a list of the objects of utility that belong to him, of the operations necessary for their production; and lastly, of the labour time that definite quantities of those objects have, on an average, cost him. All the relations between Robinson and the objects that form this wealth of his own creation, are here so simple and clear as to be intelligible without exertion, even to Mr. Sedley Taylor. And yet those relations contain all that is essential to the determination of value. Let us now transport ourselves from Robinson s island bathed in light to the European middle ages shrouded in darkness. Here, instead of the independent man, we find everyone dependent, serfs and lords, vassals and suzerains, laymen and clergy. Personal dependence here characterises the social relations of production just as much as it does the other spheres of life organised on the basis of that production. But for the very reason that personal dependence forms the ground-work of society, there is no necessity for labour and its products to assume a fantastic form different from their reality. They take the shape, in the transactions of society, of services in kind and payments in kind. Here the particular and natural form of labour, and not, as in a society based on production of commodities, its general abstract form is the immediate social form of labour. Compulsory labour is just as properly measured by time, as commodity-producing labour; but every serf knows that what he expends in the service of his lord, is a definite quantity of his own personal labour power. The tithe to be rendered to the priest is more matter of fact than his blessing. No matter, then, what we may think of the parts played by the different classes of people themselves in this society, the social relations between individuals in the performance of their labour, appear at all events as their own mutual personal relations, and are not disguised under the shape of social relations between the products of labour. For an example of labour in common or directly associated labour, we have no occasion to go back to that spontaneously developed form which we find on the threshold of the history of all civilised races. We have one close at hand in the patriarchal industries of a peasant family, that produces corn, cattle, yarn, linen, and clothing for home use. These different articles are, as regards the family, so many products of its labour, but as between themselves, they are not commodities. The different kinds of labour, such as tillage, cattle tending, spinning, weaving and making clothes, which result in the various products, are in themselves, and such as they are, direct social functions, because functions of the family, which, just as much as a society based on the production of commodities, possesses a spontaneously developed system of division of labour. The distribution of the work within the family, and the regulation of the labour time of the several members, depend as well upon differences of age and sex as upon natural conditions varying with the seasons. The labour power of each individual, by its very nature, operates in this case merely as a definite portion of the whole labour power of the family, and therefore, the measure of the expenditure of individual labour power by its duration, appears here by its very nature as a social character of their labour. Let us now picture to ourselves, by way of change, a community of free individuals, carrying on their work with the means of production in common, in which the labour power of all the different individuals is consciously applied as the combined labour power of the community. All the characteristics of Robinson s labour are here repeated, but with this difference, that they are social, instead of individual. Everything produced by him was exclusively the result of his own personal labour, and therefore simply an object of use for himself. The total product of our community is a social product. One portion serves as fresh means of production and remains social. But another portion is consumed by the members as means of subsistence. A distribution of this portion amongst them is consequently necessary. The mode of this distribution will vary with the productive organisation of the community, and the degree of historical development attained by the producers. We will assume, but merely for the sake of a parallel with the production of commodities, that the share of each individual producer in the means of subsistence is determined by his labour time. Labour time would, in that case, play a double part. Its apportionment in accordance with a definite social plan maintains the proper proportion between the different kinds of work to be done and the various wants of the community. On the other hand, it also serves as a measure of the portion of the common labour borne by each individual, and of his share in the part of the total product destined for individual consumption. The social relations of the individual producers, with regard both to their labour and to its products, are in this case perfectly simple and intelligible, and that with regard not only to production but also to distribution. The religious world is but the reflex of the real world.[note] And for a society based upon the production of commodities, in which the producers in general enter into social relations with one another by treating their products as commodities and values, whereby they reduce their individual private labour to the standard of homogeneous human labour for such a society, Christianity with its cultus of abstract man, more especially in its bourgeois developments, Protestantism, Deism, &c., is the most fitting form of religion. In the ancient Asiatic and other ancient modes of production, we find that the conversion of products into commodities, and therefore the conversion of men into producers of commodities, holds a subordinate place, which, however, increases in importance as the primitive communities approach nearer and nearer to their dissolution. Trading nations, properly so called, exist in the ancient world only in its interstices, like the gods of Epicurus in the Intermundia, or like Jews in the pores of Polish society. Those ancient social organisms of production are, as compared with bourgeois society, extremely simple and transparent. But they are founded either on the immature development of man individually, who has not yet severed the umbilical cord that unites him with his fellowmen in a primitive tribal community, or upon direct relations of subjection. They can arise and exist only when the development of the productive power of labour has not risen beyond a low stage, and when, therefore, the social relations within the sphere of material life, between man and man, and between man and Nature, are correspondingly narrow. This narrowness is reflected in the ancient worship of Nature, and in the other elements of the popular religions. The religious reflex of the real world can, in any case, only then finally vanish, when the practical relations of every-day life offer to man none but perfectly intelligible and reasonable relations with regard to his fellowmen and to Nature. The life-process of society, which is based on the process of material production, does not strip off its mystical veil until it is treated as production by freely associated men, and is consciously regulated by them in accordance with a settled plan. This, however, demands for society a certain material ground-work or set of conditions of existence which in their turn are the spontaneous product of a long and painful process of development. Political Economy has indeed analysed, however incompletely, value and its magnitude, and has discovered what lies beneath these forms. But it has never once asked the question why labour is represented by the value of its product and labour time by the magnitude of that value. These formul , which bear it stamped upon them in unmistakable letters that they belong to a state of society, in which the process of production has the mastery over man, instead of being controlled by him, such formul appear to the bourgeois intellect to be as much a self-evident necessity imposed by Nature as productive labour itself. Hence forms of social production that preceded the bourgeois form, are treated by the bourgeoisie in much the same way as the Fathers of the Church treated pre-Christian religions. To what extent some economists are misled by the Fetishism inherent in commodities, or by the objective appearance of the social characteristics of labour, is shown, amongst other ways, by the dull and tedious quarrel over the part played by Nature in the formation of exchange value. Since exchange value is a definite social manner of expressing the amount of labour bestowed upon an object, Nature has no more to do with it, than it has in fixing the course of exchange. The mode of production in which the product takes the form of a commodity, or is produced directly for exchange, is the most general and most embryonic form of bourgeois production. It therefore makes its appearance at an early date in history, though not in the same predominating and characteristic manner as now-a-days. Hence its Fetish character is comparatively easy to be seen through. But when we come to more concrete forms, even this appearance of simplicity vanishes. Whence arose the illusions of the monetary system? To it gold and silver, when serving as money, did not represent a social relation between producers, but were natural objects with strange social properties. And modern economy, which looks down with such disdain on the monetary system, does not its superstition come out as clear as noon-day, whenever it treats of capital? How long is it since economy discarded the physiocratic illusion, that rents grow out of the soil and not out of society? But not to anticipate, we will content ourselves with yet another example relating to the commodity form. Could commodities themselves speak, they would say: Our use value may be a thing that interests men. It is no part of us as objects. What, however, does belong to us as objects, is our value. Our natural intercourse as commodities proves it. In the eyes of each other we are nothing but exchange values. Now listen how those commodities speak through the mouth of the economist. So far no chemist has ever discovered exchange value either in a pearl or a diamond. The economic discoverers of this chemical element, who by-the-bye lay special claim to critical acumen, find however that the use value of objects belongs to them independently of their material properties, while their value, on the other hand, forms a part of them as objects. What confirms them in this view, is the peculiar circumstance that the use value of objects is realised without exchange, by means of a direct relation between the objects and man, while, on the other hand, their value is realised only by exchange, that is, by means of a social process. Who fails here to call to mind our good friend, Dogberry, who informs neighbour Seacoal, that, To be a well-favoured man is the gift of fortune; but reading and writing comes by Nature.

Economic Manuscripts: Capital Vol. I - Chapter One

https://www.marxists.org/archive/marx/works/1867-c1/ch01.htm

It is plain that commodities cannot go to market and make exchanges of their own account. We must, therefore, have recourse to their guardians, who are also their owners. Commodities are things, and therefore without power of resistance against man. If they are wanting in docility he can use force; in other words, he can take possession of them. In order that these objects may enter into relation with each other as commodities, their guardians must place themselves in relation to one another, as persons whose will resides in those objects, and must behave in such a way that each does not appropriate the commodity of the other, and part with his own, except by means of an act done by mutual consent. They must therefore, mutually recognise in each other the rights of private proprietors. This juridical relation, which thus expresses itself in a contract, whether such contract be part of a developed legal system or not, is a relation between two wills, and is but the reflex of the real economic relation between the two. It is this economic relation that determines the subject-matter comprised in each such juridical act. The persons exist for one another merely as representatives of, and, therefore. as owners of, commodities. In the course of our investigation we shall find, in general, that the characters who appear on the economic stage are but the personifications of the economic relations that exist between them. What chiefly distinguishes a commodity from its owner is the fact, that it looks upon every other commodity as but the form of appearance of its own value. A born leveller and a cynic, it is always ready to exchange not only soul, but body, with any and every other commodity, be the same more repulsive than Maritornes herself. The owner makes up for this lack in the commodity of a sense of the concrete, by his own five and more senses. His commodity possesses for himself no immediate use-value. Otherwise, he would not bring it to the market. It has use-value for others; but for himself its only direct use-value is that of being a depository of exchange-value, and, consequently, a means of exchange. Therefore, he makes up his mind to part with it for commodities whose value in use is of service to him. All commodities are non-use-values for their owners, and use-values for their non-owners. Consequently, they must all change hands. But this change of hands is what constitutes their exchange, and the latter puts them in relation with each other as values, and realises them as values. Hence commodities must be realised as values before they can be realised as use-values. On the other hand, they must show that they are use-values before they can be realised as values. For the labour spent upon them counts effectively, only in so far as it is spent in a form that is useful for others. Whether that labour is useful for others, and its product consequently capable of satisfying the wants of others, can be proved only by the act of exchange. Every owner of a commodity wishes to part with it in exchange only for those commodities whose use-value satisfies some want of his. Looked at in this way, exchange is for him simply a private transaction. On the other hand, he desires to realise the value of his commodity, to convert it into any other suitable commodity of equal value, irrespective of whether his own commodity has or has not any use-value for the owner of the other. From this point of view, exchange is for him a social transaction of a general character. But one and the same set of transactions cannot be simultaneously for all owners of commodities both exclusively private and exclusively social and general. Let us look at the matter a little closer. To the owner of a commodity, every other commodity is, in regard to his own, a particular equivalent, and consequently his own commodity is the universal equivalent for all the others. But since this applies to every owner, there is, in fact, no commodity acting as universal equivalent, and the relative value of commodities possesses no general form under which they can be equated as values and have the magnitude of their values compared. So far, therefore, they do not confront each other as commodities, but only as products or use-values. In their difficulties our commodity owners think like Faust: Im Anfang war die Tat. [ In the beginning was the deed. Goethe, Faust.] They therefore acted and transacted before they thought. Instinctively they conform to the laws imposed by the nature of commodities. They cannot bring their commodities into relation as values, and therefore as commodities, except by comparing them with some one other commodity as the universal equivalent. That we saw from the analysis of a commodity. But a particular commodity cannot become the universal equivalent except by a social act. The social action therefore of all other commodities, sets apart the particular commodity in which they all represent their values. Thereby the bodily form of this commodity becomes the form of the socially recognised universal equivalent. To be the universal equivalent, becomes, by this social process, the specific function of the commodity thus excluded by the rest. Thus it becomes money. Illi unum consilium habent et virtutem et potestatem suam bestiae tradunt. Et ne quis possit emere aut vendere, nisi qui habet characterem aut nomen bestiae aut numerum nominis ejus. [ These have one mind, and shall give their power and strength unto the beast. Revelations, 17:13; And that no man might buy or sell, save he that had the mark, or the name of the beast, or the number of his name. Revelations, 13:17.] (Apocalypse.) Money is a crystal formed of necessity in the course of the exchanges, whereby different products of labour are practically equated to one another and thus by practice converted into commodities. The historical progress and extension of exchanges develops the contrast, latent in commodities, between use-value and value. The necessity for giving an external expression to this contrast for the purposes of commercial intercourse, urges on the establishment of an independent form of value, and finds no rest until it is once for all satisfied by the differentiation of commodities into commodities and money. At the same rate, then, as the conversion of products into commodities is being accomplished, so also is the conversion of one special commodity into money. The direct barter of products attains the elementary form of the relative expression of value in one respect, but not in another. That form is x Commodity A = y Commodity B. The form of direct barter is x use-value A = y use-value B. The articles A and B in this case are not as yet commodities, but become so only by the act of barter. The first step made by an object of utility towards acquiring exchange-value is when it forms a non-use-value for its owner, and that happens when it forms a superfluous portion of some article required for his immediate wants. Objects in themselves are external to man, and consequently alienable by him. In order that this alienation may be reciprocal, it is only necessary for men, by a tacit understanding, to treat each other as private owners of those alienable objects, and by implication as independent individuals. But such a state of reciprocal independence has no existence in a primitive society based on property in common, whether such a society takes the form of a patriarchal family, an ancient Indian community, or a Peruvian Inca State. The exchange of commodities, therefore, first begins on the boundaries of such communities, at their points of contact with other similar communities, or with members of the latter. So soon, however, as products once become commodities in the external relations of a community, they also, by reaction, become so in its internal intercourse. The proportions in which they are exchangeable are at first quite a matter of chance. What makes them exchangeable is the mutual desire of their owners to alienate them. Meantime the need for foreign objects of utility gradually establishes itself. The constant repetition of exchange makes it a normal social act. In the course of time, therefore, some portion at least of the products of labour must be produced with a special view to exchange. From that moment the distinction becomes firmly established between the utility of an object for the purposes of consumption, and its utility for the purposes of exchange. Its use-value becomes distinguished from its exchange-value. On the other hand, the quantitative proportion in which the articles are exchangeable, becomes dependent on their production itself. Custom stamps them as values with definite magnitudes. In the direct barter of products, each commodity is directly a means of exchange to its owner, and to all other persons an equivalent, but that only in so far as it has use-value for them. At this stage, therefore, the articles exchanged do not acquire a value-form independent of their own use-value, or of the individual needs of the exchangers. The necessity for a value-form grows with the increasing number and variety of the commodities exchanged. The problem and the means of solution arise simultaneously. Commodity-owners never equate their own commodities to those of others, and exchange them on a large scale, without different kinds of commodities belonging to different owners being exchangeable for, and equated as values to, one and the same special article. Such last-mentioned article, by becoming the equivalent of various other commodities, acquires at once, though within narrow limits, the character of a general social equivalent. This character comes and goes with the momentary social acts that called it into life. In turns and transiently it attaches itself first to this and then to that commodity. But with the development of exchange it fixes itself firmly and exclusively to particular sorts of commodities, and becomes crystallised by assuming the money-form. The particular kind of commodity to which it sticks is at first a matter of accident. Nevertheless there are two circumstances whose influence is decisive. The money-form attaches itself either to the most important articles of exchange from outside, and these in fact are primitive and natural forms in which the exchange-value of home products finds expression; or else it attaches itself to the object of utility that forms, like cattle, the chief portion of indigenous alienable wealth. Nomad races are the first to develop the money-form, because all their worldly goods consist of moveable objects and are therefore directly alienable; and because their mode of life, by continually bringing them into contact with foreign communities, solicits the exchange of products. Man has often made man himself, under the form of slaves, serve as the primitive material of money, but has never used land for that purpose. Such an idea could only spring up in a bourgeois society already well developed. It dates from the last third of the 17th century, and the first attempt to put it in practice on a national scale was made a century afterwards, during the French bourgeois revolution. In proportion as exchange bursts its local bonds, and the value of commodities more and more expands into an embodiment of human labour in the abstract, in the same proportion the character of money attaches itself to commodities that are by Nature fitted to perform the social function of a universal equivalent. Those commodities are the precious metals. The truth of the proposition that, although gold and silver are not by Nature money, money is by Nature gold and silver, is shown by the fitness of the physical properties of these metals for the functions of money. Up to this point, however, we are acquainted only with one function of money, namely, to serve as the form of manifestation of the value of commodities, or as the material in which the magnitudes of their values are socially expressed. An adequate form of manifestation of value, a fit embodiment of abstract, undifferentiated, and therefore equal human labour, that material alone can be whose every sample exhibits the same uniform qualities. On the other hand, since the difference between the magnitudes of value is purely quantitative, the money commodity must be susceptible of merely quantitative differences, must therefore be divisible at will, and equally capable of being reunited. Gold and silver possess these properties by Nature. The use-value of the money-commodity becomes two-fold. In addition to its special use-value as a commodity (gold, for instance, serving to stop teeth, to form the raw material of articles of luxury, &c.), it acquires a formal use-value, originating in its specific social function. Since all commodities are merely particular equivalents of money, the latter being their universal equivalent, they, with regard to the latter as the universal commodity, play the parts of particular commodities. We have seen that the money-form is but the reflex, thrown upon one single commodity, of the value relations between all the rest. That money is a commodity is therefore a new discovery only for those who, when they analyse it, start from its fully developed shape. The act of exchange gives to the commodity converted into money, not its value, but its specific value-form. By confounding these two distinct things some writers have been led to hold that the value of gold and silver is imaginary. The fact that money can, in certain functions, be replaced by mere symbols of itself, gave rise to that other mistaken notion, that it is itself a mere symbol. Nevertheless under this error lurked a presentiment that the money-form of an object is not an inseparable part of that object, but is simply the form under which certain social relations manifest themselves. In this sense every commodity is a symbol, since, in so far as it is value, it is only the material envelope of the human labour spent upon it. But if it be declared that the social characters assumed by objects, or the material forms assumed by the social qualities of labour under the r gime of a definite mode of production, are mere symbols, it is in the same breath also declared that these characteristics are arbitrary fictions sanctioned by the so-called universal consent of mankind. This suited the mode of explanation in favour during the 18th century. Unable to account for the origin of the puzzling forms assumed by social relations between man and man, people sought to denude them of their strange appearance by ascribing to them a conventional origin. It has already been remarked above that the equivalent form of a commodity does not imply the determination of the magnitude of its value. Therefore, although we may be aware that gold is money, and consequently directly exchangeable for all other commodities, yet that fact by no means tells how much 10 lbs., for instance, of gold is worth. Money, like every other commodity, cannot express the magnitude of its value except relatively in other commodities. This value is determined by the labour-time required for its production, and is expressed by the quantity of any other commodity that costs the same amount of labour-time. Such quantitative determination of its relative value takes place at the source of its production by means of barter. When it steps into circulation as money, its value is already given. In the last decades of the 17th century it had already been shown that money is a commodity, but this step marks only the infancy of the analysis. The difficulty lies, not in comprehending that money is a commodity, but in discovering how, why, and by what means a commodity becomes money. We have already seen, from the most elementary expression of value, x commodity A = y commodity B, that the object in which the magnitude of the value of another object is represented, appears to have the equivalent form independently of this relation, as a social property given to it by Nature. We followed up this false appearance to its final establishment, which is complete so soon as the universal equivalent form becomes identified with the bodily form of a particular commodity, and thus crystallised into the money-form. What appears to happen is, not that gold becomes money, in consequence of all other commodities expressing their values in it, but, on the contrary, that all other commodities universally express their values in gold, because it is money. The intermediate steps of the process vanish in the result and leave no trace behind. Commodities find their own value already completely represented, without any initiative on their part, in another commodity existing in company with them. These objects, gold and silver, just as they come out of the bowels of the earth, are forthwith the direct incarnation of all human labour. Hence the magic of money. In the form of society now under consideration, the behaviour of men in the social process of production is purely atomic. Hence their relations to each other in production assume a material character independent of their control and conscious individual action. These facts manifest themselves at first by products as a general rule taking the form of commodities. We have seen how the progressive development of a society of commodity-producers stamps one privileged commodity with the character of money. Hence the riddle presented by money is but the riddle presented by commodities; only it now strikes us in its most glaring form.

Economic Manuscripts: Capital Vol. I - Chapter Two

https://www.marxists.org/archive/marx/works/1867-c1/ch02.htm

Throughout this work, I assume, for the sake of simplicity, gold as the money-commodity. The first chief function of money is to supply commodities with the material for the expression of their values, or to represent their values as magnitudes of the same denomination, qualitatively equal, and quantitatively comparable. It thus serves as a universal measure of value. And only by virtue of this function does gold, the equivalent commodity par excellence, become money. It is not money that renders commodities commensurable. Just the contrary. It is because all commodities, as values, are realised human labour, and therefore commensurable, that their values can be measured by one and the same special commodity, and the latter be converted into the common measure of their values, i.e., into money. Money as a measure of value, is the phenomenal form that must of necessity be assumed by that measure of value which is immanent in commodities, labour-time. The expression of the value of a commodity in gold x commodity A = y money-commodity is its money-form or price. A single equation, such as 1 ton of iron = 2 ounces of gold, now suffices to express the value of the iron in a socially valid manner. There is no longer any need for this equation to figure as a link in the chain of equations that express the values of all other commodities, because the equivalent commodity, gold, now has the character of money. The general form of relative value has resumed its original shape of simple or isolated relative value. On the other hand, the expanded expression of relative value, the endless series of equations, has now become the form peculiar to the relative value of the money-commodity. The series itself, too, is now given, and has social recognition in the prices of actual commodities. We have only to read the quotations of a price-list backwards, to find the magnitude of the value of money expressed in all sorts of commodities. But money itself has no price. In order to put it on an equal footing with all other commodities in this respect, we should be obliged to equate it to itself as its own equivalent. The price or money-form of commodities is, like their form of value generally, a form quite distinct from their palpable bodily form; it is, therefore, a purely ideal or mental form. Although invisible, the value of iron, linen and corn has actual existence in these very articles: it is ideally made perceptible by their equality with gold, a relation that, so to say, exists only in their own heads. Their owner must, therefore, lend them his tongue, or hang a ticket on them, before their prices can be communicated to the outside world. Since the expression of the value of commodities in gold is a merely ideal act, we may use for this purpose imaginary or ideal money. Every trader knows, that he is far from having turned his goods into money, when he has expressed their value in a price or in imaginary money, and that it does not require the least bit of real gold, to estimate in that metal millions of pounds worth of goods. When, therefore, money serves as a measure of value, it is employed only as imaginary or ideal money. This circumstance has given rise to the wildest theories. But, although the money that performs the functions of a measure of value is only ideal money, price depends entirely upon the actual substance that is money. The value, or in other words, the quantity of human labour contained in a ton of iron, is expressed in imagination by such a quantity of the money-commodity as contains the same amount of labour as the iron. According, therefore, as the measure of value is gold, silver, or copper, the value of the ton of iron will be expressed by very different prices, or will be represented by very different quantities of those metals respectively. If, therefore, two different commodities, such as gold and silver, are simultaneously measures of value, all commodities have two prices one a gold-price, the other a silver-price. These exist quietly side by side, so long as the ratio of the value of silver to that of gold remains unchanged, say, at 15:1. Every change in their ratio disturbs the ratio which exists between the gold-prices and the silver-prices of commodities, and thus proves, by facts, that a double standard of value is inconsistent with the functions of a standard. Commodities with definite prices present themselves under the form: a commodity A = x gold; b commodity B = z gold; c commodity C = y gold, &c., where a, b, c, represent definite quantities of the commodities A, B, C and x, z, y, definite quantities of gold. The values of these commodities are, therefore, changed in imagination into so many different quantities of gold. Hence, in spite of the confusing variety of the commodities themselves, their values become magnitudes of the same denomination, gold-magnitudes. They are now capable of being compared with each other and measured, and the want becomes technically felt of comparing them with some fixed quantity of gold as a unit measure. This unit, by subsequent division into aliquot parts, becomes itself the standard or scale. Before they become money, gold, silver, and copper already possess such standard measures in their standards of weight, so that, for example, a pound weight, while serving as the unit, is, on the one hand, divisible into ounces, and, on the other, may be combined to make up hundredweights. It is owing to this that, in all metallic currencies, the names given to the standards of money or of price were originally taken from the pre-existing names of the standards of weight. As measure of Value, and as standard of price, money has two entirely distinct functions to perform. It is the measure of value inasmuch as it is the socially recognised incarnation of human labour; it is the standard of price inasmuch as it is a fixed weight of metal. As the measure of value it serves to convert the values of all the manifold commodities into prices, into imaginary quantities of gold; as the standard of price it measures those quantities of gold. The measure of values measures commodities considered as values; the standard of price measures, on the contrary, quantities of gold by a unit quantity of gold, not the value of one quantity of gold by the weight of another. In order to make gold a standard of price, a certain weight must be fixed upon as the unit. In this case, as in all cases of measuring quantities of the same denomination, the establishment of an unvarying unit of measure is all-important. Hence, the less the unit is subject to variation, so much the better does the standard of price fulfil its office. But only in so far as it is itself a product of labour, and, therefore, potentially variable in value, can gold serve as a measure of value. It is, in the first place, quite clear that a change in the value of gold does not, in any way, affect its function as a standard of price. No matter how this value varies, the proportions between the values of different quantities of the metal remain constant. However great the fall in its value, 12 ounces of gold still have 12 times the value of 1 ounce; and in prices, the only thing considered is the relation between different quantities of gold. Since, on the other hand, no rise or fall in the value of an ounce of gold can alter its weight, no alteration can take place in the weight of its aliquot parts. Thus gold always renders the same service as an invariable standard of price, however much its value may vary. In the second place, a change in the value of gold does not interfere with its functions as a measure of value. The change affects all commodities simultaneously, and, therefore, caeteris paribus, leaves their relative values inter se, unaltered, although those values are now expressed in higher or lower gold-prices. Just as when we estimate the value of any commodity by a definite quantity of the use-value of some other commodity, so in estimating the value of the former in gold, we assume nothing more than that the production of a given quantity of gold costs, at the given period, a given amount of labour. As regards the fluctuations of prices generally, they are subject to the laws of elementary relative value investigated in a former chapter. A general rise in the prices of commodities can result only, either from a rise in their values the value of money remaining constant or from a fall in the value of money, the values of commodities remaining constant. On the other hand, a general fall in prices can result only, either from a fall in the values of commodities the value of money remaining constant or from a rise in the value of money, the values of commodities remaining constant. It therefore by no means follows, that a rise in the value of money necessarily implies a proportional fall in the prices of commodities; or that a fall in the value of money implies a proportional rise in prices. Such change of price holds good only in the case of commodities whose value remains constant. With those, for example, whose value rises, simultaneously with, and proportionally to, that of money, there is no alteration in price. And if their value rise either slower or faster than that of money, the fall or rise in their prices will be determined by the difference between the change in their value and that of money; and so on. Let us now go back to the consideration of the price-form. By degrees there arises a discrepancy between the current money-names of the various weights of the precious metal figuring as money, and the actual weights which those names originally represented. This discrepancy is the result of historical causes, among which the chief are: (1) The importation of foreign money into an imperfectly developed community. This happened in Rome in its early days, where gold and silver coins circulated at first as foreign commodities. The names of these foreign coins never coincide with those of the indigenous weights. (2) As wealth increases, the less precious metal is thrust out by the more precious from its place as a measure of value, copper by silver, silver by gold, however much this order of sequence may be in contradiction with poetical chronology. The word pound, for instance, was the money-name given to an actual pound weight of silver. When gold replaced silver as a measure of value, the same name was applied according to the ratio between the values of silver and gold, to perhaps 1-15th of a pound of gold. The word pound, as a money-name, thus becomes differentiated from the same word as a weight-name. (3) The debasing of money carried on for centuries by kings and princes to such an extent that, of the original weights of the coins, nothing in fact remained but the names. These historical causes convert the separation of the money-name from the weight-name into an established habit with the community. Since the standard of money is on the one hand purely conventional, and must on the other hand find general acceptance, it is in the end regulated by law. A given weight of one of the precious metals, an ounce of gold, for instance, becomes officially divided into aliquot parts, with legally bestowed names, such as pound, dollar, &c. These aliquot parts, which thenceforth serve as units of money, are then subdivided into other aliquot parts with legal names, such as shilling, penny, &c. But, both before and after these divisions are made, a definite weight of metal is the standard of metallic money. The sole alteration consists in the subdivision and denomination. The prices, or quantities of gold, into which the values of commodities are ideally changed, are therefore now expressed in the names of coins, or in the legally valid names of the subdivisions of the gold standard. Hence, instead of saying: A quarter of wheat is worth an ounce of gold; we say, it is worth 3 17s. 10 1/2d. In this way commodities express by their prices how much they are worth, and money serves as money of account whenever it is a question of fixing the value of an article in its money-form. The name of a thing is something distinct from the qualities of that thing. I know nothing of a man, by knowing that his name is Jacob. In the same way with regard to money, every trace of a value-relation disappears in the names pound, dollar, franc, ducat, &c. The confusion caused by attributing a hidden meaning to these cabalistic signs is all the greater, because these money-names express both the values of commodities, and, at the same time, aliquot parts of the weight of the metal that is the standard of money. On the other hand, it is absolutely necessary that value, in order that it may be distinguished from the varied bodily forms of commodities, should assume this material and unmeaning, but, at the same time, purely social form. Price is the money-name of the labour realised in a commodity. Hence the expression of the equivalence of a commodity with the sum of money constituting its price, is a tautology, just as in general the expression of the relative value of a commodity is a statement of the equivalence of two commodities. But although price, being the exponent of the magnitude of a commodity s value, is the exponent of its exchange-ratio with money, it does not follow that the exponent of this exchange-ratio is necessarily the exponent of the magnitude of the commodity s value. Suppose two equal quantities of socially necessary labour to be respectively represented by 1 quarter of wheat and 2 (nearly 1/2 oz. of gold), 2 is the expression in money of the magnitude of the value of the quarter of wheat, or is its price. If now circumstances allow of this price being raised to 3, or compel it to be reduced to 1, then although 1 and 3 may be too small or too great properly to express the magnitude of the wheat s value; nevertheless they are its prices, for they are, in the first place, the form under which its value appears, i.e., money; and in the second place, the exponents of its exchange-ratio with money. If the conditions of production, in other words, if the productive power of labour remain constant, the same amount of social labour-time must, both before and after the change in price, be expended in the reproduction of a quarter of wheat. This circumstance depends, neither on the will of the wheat producer, nor on that of the owners of other commodities. Magnitude of value expresses a relation of social production, it expresses the connexion that necessarily exists between a certain article and the portion of the total labour-time of society required to produce it. As soon as magnitude of value is converted into price, the above necessary relation takes the shape of a more or less accidental exchange-ratio between a single commodity and another, the money-commodity. But this exchange-ratio may express either the real magnitude of that commodity s value, or the quantity of gold deviating from that value, for which, according to circumstances, it may be parted with. The possibility, therefore, of quantitative incongruity between price and magnitude of value, or the deviation of the former from the latter, is inherent in the price-form itself. This is no defect, but, on the contrary, admirably adapts the price-form to a mode of production whose inherent laws impose themselves only as the mean of apparently lawless irregularities that compensate one another. The price-form, however, is not only compatible with the possibility of a quantitative incongruity between magnitude of value and price, i.e., between the former and its expression in money, but it may also conceal a qualitative inconsistency, so much so, that, although money is nothing but the value-form of commodities, price ceases altogether to express value. Objects that in themselves are no commodities, such as conscience, honour, &c., are capable of being offered for sale by their holders, and of thus acquiring, through their price, the form of commodities. Hence an object may have a price without having value. The price in that case is imaginary, like certain quantities in mathematics. On the other hand, the imaginary price-form may sometimes conceal either a direct or indirect real value-relation; for instance, the price of uncultivated land, which is without value, because no human labour has been incorporated in it. Price, like relative value in general, expresses the value of a commodity (e.g., a ton of iron), by stating that a given quantity of the equivalent (e.g., an ounce of gold), is directly exchangeable for iron. But it by no means states the converse, that iron is directly exchangeable for gold. In order, therefore, that a commodity may in practice act effectively as exchange-value, it must quit its bodily shape, must transform itself from mere imaginary into real gold, although to the commodity such transubstantiation may be more difficult than to the Hegelian concept, the transition from necessity to freedom, or to a lobster the casting of his shell, or to Saint Jerome the putting off of the old Adam. Though a commodity may, side by side with its actual form (iron, for instance), take in our imagination the form of gold, yet it cannot at one and the same time actually be both iron and gold. To fix its price, it suffices to equate it to gold in imagination. But to enable it to render to its owner the service of a universal equivalent, it must be actually replaced by gold. If the owner of the iron were to go to the owner of some other commodity offered for exchange, and were to refer him to the price of the iron as proof that it was already money, he would get the same answer as St. Peter gave in heaven to Dante, when the latter recited the creed A price therefore implies both that a commodity is exchangeable for money, and also that it must be so exchanged. On the other hand, gold serves as an ideal measure of value, only because it has already, in the process of exchange, established itself as the money-commodity. Under the ideal measure of values there lurks the hard cash. We saw in a former chapter that the exchange of commodities implies contradictory and mutually exclusive conditions. The differentiation of commodities into commodities and money does not sweep away these inconsistencies, but develops a modus vivendi, a form in which they can exist side by side. This is generally the way in which real contradictions are reconciled. For instance, it is a contradiction to depict one body as constantly falling towards another, and as, at the same time, constantly flying away from it. The ellipse is a form of motion which, while allowing this contradiction to go on, at the same time reconciles it. In so far as exchange is a process, by which commodities are transferred from hands in which they are non-use-values, to hands in which they become use-values, it is a social circulation of matter. The product of one form of useful labour replaces that of another. When once a commodity has found a resting-place, where it can serve as a use-value, it falls out of the sphere of exchange into that of consumption. But the former sphere alone interests us at present. We have, therefore, now to consider exchange from a formal point of view; to investigate the change of form or metamorphosis of commodities which effectuates the social circulation of matter. The comprehension of this change of form is, as a rule, very imperfect. The cause of this imperfection is, apart from indistinct notions of value itself, that every change of form in a commodity results from the exchange of two commodities, an ordinary one and the money-commodity. If we keep in view the material fact alone that a commodity has been exchanged for gold, we overlook the very thing that we ought to observe namely, what has happened to the form of the commodity. We overlook the facts that gold, when a mere commodity, is not money, and that when other commodities express their prices in gold, this gold is but the money-form of those commodities themselves. Commodities, first of all, enter into the process of exchange just as they are. The process then differentiates them into commodities and money, and thus produces an external opposition corresponding to the internal opposition inherent in them, as being at once use-values and values. Commodities as use-values now stand opposed to money as exchange-value. On the other hand, both opposing sides are commodities, unities of use-value and value. But this unity of differences manifests itself at two opposite poles, and at each pole in an opposite way. Being poles they are as necessarily opposite as they are connected. On the one side of the equation we have an ordinary commodity, which is in reality a use-value. Its value is expressed only ideally in its price, by which it is equated to its opponent, the gold, as to the real embodiment of its value. On the other hand, the gold, in its metallic reality, ranks as the embodiment of value, as money. Gold, as gold, is exchange-value itself. As to its use-value, that has only an ideal existence, represented by the series of expressions of relative value in which it stands face to face with all other commodities, the sum of whose uses makes up the sum of the various uses of gold. These antagonistic forms of commodities are the real forms in which the process of their exchange moves and takes place. Let us now accompany the owner of some commodity say, our old friend the weaver of linen to the scene of action, the market. His 20 yards of linen has a definite price, 2. He exchanges it for the 2, and then, like a man of the good old stamp that he is, he parts with the 2 for a family Bible of the same price. The linen, which in his eyes is a mere commodity, a depository of value, he alienates in exchange for gold, which is the linen s value-form, and this form he again parts with for another commodity, the Bible, which is destined to enter his house as an object of utility and of edification to its inmates. The exchange becomes an accomplished fact by two metamorphoses of opposite yet supplementary character the conversion of the commodity into money, and the re-conversion of the money into a commodity. The two phases of this metamorphosis are both of them distinct transactions of the weaver selling, or the exchange of the commodity for money; buying, or the exchange of the money for a commodity; and, the unity of the two acts, selling in order to buy. The result of the whole transaction, as regards the weaver, is this, that instead of being in possession of the linen, he now has the Bible; instead of his original commodity, he now possesses another of the same value but of different utility. In like manner he procures his other means of subsistence and means of production. From his point of view, the whole process effectuates nothing more than the exchange of the product of his labour for the product of some one else s, nothing more than an exchange of products. The exchange of commodities is therefore accompanied by the following changes in their form: The result of the whole process is, so far as concerns the objects themselves, C C, the exchange of one commodity for another, the circulation of materialised social labour. When this result is attained, the process is at an end. The leap taken by value from the body of the commodity, into the body of the gold, is, as I have elsewhere called it, the salto mortale of the commodity. If it falls short, then, although the commodity itself is not harmed, its owner decidedly is. The social division of labour causes his labour to be as one-sided as his wants are many-sided. This is precisely the reason why the product of his labour serves him solely as exchange-value. But it cannot acquire the properties of a socially recognised universal equivalent, except by being converted into money. That money, however, is in some one else s pocket. In order to entice the money out of that pocket, our friend s commodity must, above all things, be a use-value to the owner of the money. For this, it is necessary that the labour expended upon it, be of a kind that is socially useful, of a kind that constitutes a branch of the social division of labour. But division of labour is a system of production which has grown up spontaneously and continues to grow behind the backs of the producers. The commodity to be exchanged may possibly be the product of some new kind of labour, that pretends to satisfy newly arisen requirements, or even to give rise itself to new requirements. A particular operation, though yesterday, perhaps, forming one out of the many operations conducted by one producer in creating a given commodity, may to-day separate itself from this connexion, may establish itself as an independent branch of labour and send its incomplete product to market as an independent commodity. The circumstances may or may not be ripe for such a separation. To-day the product satisfies a social want. Tomorrow the article may, either altogether or partially, be superseded by some other appropriate product. Moreover, although our weaver s labour may be a recognised branch of the social division of labour, yet that fact is by no means sufficient to guarantee the utility of his 20 yards of linen. If the community s want of linen, and such a want has a limit like every other want, should already be saturated by the products of rival weavers, our friend s product is superfluous, redundant, and consequently useless. Although people do not look a gift-horse in the mouth, our friend does not frequent the market for the purpose of making presents. But suppose his product turn out a real use-value, and thereby attracts money? The question arises, how much will it attract? No doubt the answer is already anticipated in the price of the article, in the exponent of the magnitude of its value. We leave out of consideration here any accidental miscalculation of value by our friend, a mistake that is soon rectified in the market. We suppose him to have spent on his product only that amount of labour-time that is on an average socially necessary. The price then, is merely the money-name of the quantity of social labour realised in his commodity. But without the leave, and behind the back, of our weaver, the old-fashioned mode of weaving undergoes a change. The labour-time that yesterday was without doubt socially necessary to the production of a yard of linen, ceases to be so to-day, a fact which the owner of the money is only too eager to prove from the prices quoted by our friend s competitors. Unluckily for him, weavers are not few and far between. Lastly, suppose that every piece of linen in the market contains no more labour-time than is socially necessary. In spite of this, all these pieces taken as a whole, may have had superfluous labour-time spent upon them. If the market cannot stomach the whole quantity at the normal price of 2 shillings a yard, this proves that too great a portion of the total labour of the community has been expended in the form of weaving. The effect is the same as if each individual weaver had expended more labour-time upon his particular product than is socially necessary. Here we may say, with the German proverb: caught together, hung together. All the linen in the market counts but as one article of commerce, of which each piece is only an aliquot part. And as a matter of fact, the value also of each single yard is but the materialised form of the same definite and socially fixed quantity of homogeneous human labour. We see then, commodities are in love with money, but the course of true love never did run smooth. The quantitative division of labour is brought about in exactly the same spontaneous and accidental manner as its qualitative division. The owners of commodities therefore find out, that the same division of labour that turns them into independent private producers, also frees the social process of production and the relations of the individual producers to each other within that process, from all dependence on the will of those producers, and that the seeming mutual independence of the individuals is supplemented by a system of general and mutual dependence through or by means of the products. The division of labour converts the product of labour into a commodity, and thereby makes necessary its further conversion into money. At the same time it also makes the accomplishment of this transubstantiation quite accidental. Here, however, we are only concerned with the phenomenon in its integrity, and we therefore assume its progress to be normal. Moreover, if the conversion take place at all, that is, if the commodity be not absolutely unsaleable, its metamorphosis does take place although the price realised may be abnormally above or below the value. The seller has his commodity replaced by gold, the buyer has his gold replaced by a commodity. The fact which here stares us in the face is, that a commodity and gold, 20 yards of linen and 2, have changed hands and places, in other words, that they have been exchanged. But for what is the commodity exchanged? For the shape assumed by its own value, for the universal equivalent. And for what is the gold exchanged? For a particular form of its own use-value. Why does gold take the form of money face to face with the linen? Because the linen s price of 2, its denomination in money, has already equated the linen to gold in its character of money. A commodity strips off its original commodity-form on being alienated, i.e., on the instant its use-value actually attracts the gold, that before existed only ideally in its price. The realisation of a commodity s price, or of its ideal value-form, is therefore at the same time the realisation of the ideal use-value of money; the conversion of a commodity into money, is the simultaneous conversion of money into a commodity. The apparently single process is in reality a double one. From the pole of the commodity-owner it is a sale, from the opposite pole of the money-owner, it is a purchase. In other words, a sale is a purchase, C M is also M C. Up to this point we have considered men in only one economic capacity, that of owners of commodities, a capacity in which they appropriate the produce of the labour of others, by alienating that of their own labour. Hence, for one commodity-owner to meet with another who has money, it is necessary, either, that the product of the labour of the latter person, the buyer, should be in itself money, should be gold, the material of which money consists, or that his product should already have changed its skin and have stripped off its original form of a useful object. In order that it may play the part of money, gold must of course enter the market at some point or other. This point is to be found at the source of production of the metal, at which place gold is bartered, as the immediate product of labour, for some other product of equal value. From that moment it always represents the realised price of some commodity. Apart from its exchange for other commodities at the source of its production, gold, in whose-so-ever hands it may be, is the transformed shape of some commodity alienated by its owner; it is the product of a sale or of the first metamorphosis C M. Gold, as we saw, became ideal money, or a measure of values, in consequence of all commodities measuring their values by it, and thus contrasting it ideally with their natural shape as useful objects, and making it the shape of their value. It became real money, by the general alienation of commodities, by actually changing places with their natural forms as useful objects, and thus becoming in reality the embodiment of their values. When they assume this money-shape, commodities strip off every trace of their natural use-value, and of the particular kind of labour to which they owe their creation, in order to transform themselves into the uniform, socially recognised incarnation of homogeneous human labour. We cannot tell from the mere look of a piece of money, for what particular commodity it has been exchanged. Under their money-form all commodities look alike. Hence, money may be dirt, although dirt is not money. We will assume that the two gold pieces, in consideration of which our weaver has parted with his linen, are the metamorphosed shape of a quarter of wheat. The sale of the linen, C M, is at the same time its purchase, M C. But the sale is the first act of a process that ends with a transaction of an opposite nature, namely, the purchase of a Bible; the purchase of the linen, on the other hand, ends a movement that began with a transaction of an opposite nature, namely, with the sale of the wheat. C M (linen money), which is the first phase of C M C (linen money Bible), is also M C (money linen), the last phase of another movement C M C (wheat money linen). The first metamorphosis of one commodity, its transformation from a commodity into money, is therefore also invariably the second metamorphosis of some other commodity, the retransformation of the latter from money into a commodity. Because money is the metamorphosed shape of all other commodities, the result of their general alienation, for this reason it is alienable itself without restriction or condition. It reads all prices backwards, and thus, so to say, depicts itself in the bodies of all other commodities, which offer to it the material for the realisation of its own use-value. At the same time the prices, wooing glances cast at money by commodities, define the limits of its convertibility, by pointing to its quantity. Since every commodity, on becoming money, disappears as a commodity, it is impossible to tell from the money itself, how it got into the hands of its possessor, or what article has been changed into it. Non olet, from whatever source it may come. Representing on the one hand a sold commodity, it represents on the other a commodity to be bought. M C, a purchase, is, at the same time, C M, a sale; the concluding metamorphosis of one commodity is the first metamorphosis of another. With regard to our weaver, the life of his commodity ends with the Bible, into which he has reconverted his 2. But suppose the seller of the Bible turns the 2 set free by the weaver into brandy M C, the concluding phase of C M C (linen money Bible), is also C M, the first phase of C M C (Bible money brandy). The producer of a particular commodity has that one article alone to offer; this he sells very often in large quantities, but his many and various wants compel him to split up the price realised, the sum of money set free, into numerous purchases. Hence a sale leads to many purchases of various articles. The concluding metamorphosis of a commodity thus constitutes an aggregation of first metamorphoses of various other commodities. If we now consider the completed metamorphosis of a commodity, as a whole, it appears in the first place, that it is made up of two opposite and complementary movements, C M and M C. These two antithetical transmutations of a commodity are brought about by two antithetical social acts on the part of the owner, and these acts in their turn stamp the character of the economic parts played by him. As the person who makes a sale, he is a seller; as the person who makes a purchase, he is a buyer. But just as, upon every such transmutation of a commodity, its two forms, commodity-form and money-form, exist simultaneously but at opposite poles, so every seller has a buyer opposed to him, and every buyer a seller. While one particular commodity is going through its two transmutations in succession, from a commodity into money and from money into another commodity, the owner of the commodity changes in succession his part from that of seller to that of buyer. These characters of seller and buyer are therefore not permanent, but attach themselves in turns to the various persons engaged in the circulation of commodities. The complete metamorphosis of a commodity, in its simplest form, implies four extremes, and three dramatic personae. First, a commodity comes face to face with money; the latter is the form taken by the value of the former, and exists in all its hard reality, in the pocket of the buyer. A commodity-owner is thus brought into contact with a possessor of money. So soon, now, as the commodity has been changed into money, the money becomes its transient equivalent-form, the use-value of which equivalent-form is to be found in the bodies of other commodities. Money, the final term of the first transmutation, is at the same time the starting-point for the second. The person who is a seller in the first transaction thus becomes a buyer in the second, in which a third commodity-owner appears on the scene as a seller. The two phases, each inverse to the other, that make up the metamorphosis of a commodity constitute together a circular movement, a circuit: commodity-form, stripping off of this form, and return to the commodity-form. No doubt, the commodity appears here under two different aspects. At the starting-point it is not a use-value to its owner; at the finishing point it is. So, too, the money appears in the first phase as a solid crystal of value, a crystal into which the commodity eagerly solidifies, and in the second, dissolves into the mere transient equivalent-form destined to be replaced by a use-value. The two metamorphoses constituting the circuit are at the same time two inverse partial metamorphoses of two other commodities. One and the same commodity, the linen, opens the series of its own metamorphoses, and completes the metamorphosis of another (the wheat). In the first phase or sale, the linen plays these two parts in its own person. But, then, changed into gold, it completes its own second and final metamorphosis, and helps at the same time to accomplish the first metamorphosis of a third commodity. Hence the circuit made by one commodity in the course of its metamorphoses is inextricably mixed up with the circuits of other commodities. The total of all the different circuits constitutes the circulation of commodities. The circulation of commodities differs from the direct exchange of products (barter), not only in form, but in substance. Only consider the course of events. The weaver has, as a matter of fact, exchanged his linen for a Bible, his own commodity for that of some one else. But this is true only so far as he himself is concerned. The seller of the Bible, who prefers something to warm his inside, no more thought of exchanging his Bible for linen than our weaver knew that wheat had been exchanged for his linen. B s commodity replaces that of A, but A and B do not mutually exchange those commodities. It may, of course, happen that A and B make simultaneous purchases, the one from the other; but such exceptional transactions are by no means the necessary result of the general conditions of the circulation of commodities. We see here, on the one hand, how the exchange of commodities breaks through all local and personal bounds inseparable from direct barter, and develops the circulation of the products of social labour; and on the other hand, how it develops a whole network of social relations spontaneous in their growth and entirely beyond the control of the actors. It is only because the farmer has sold his wheat that the weaver is enabled to sell his linen, only because the weaver has sold his linen that our Hotspur is enabled to sell his Bible, and only because the latter has sold the water of everlasting life that the distiller is enabled to sell his eau-de-vie, and so on. The process of circulation, therefore, does not, like direct barter of products, become extinguished upon the use-values changing places and hands. The money does not vanish on dropping out of the circuit of the metamorphosis of a given commodity. It is constantly being precipitated into new places in the arena of circulation vacated by other commodities. In the complete metamorphosis of the linen, for example, linen money Bible, the linen first falls out of circulation, and money steps into its place. Then the Bible falls out of circulation, and again money takes its place. When one commodity replaces another, the money-commodity always sticks to the hands of some third person. Circulation sweats money from every pore. Nothing can be more childish than the dogma, that because every sale is a purchase, and every purchase a sale, therefore the circulation of commodities necessarily implies an equilibrium of sales and purchases. If this means that the number of actual sales is equal to the number of purchases, it is mere tautology. But its real purport is to prove that every seller brings his buyer to market with him. Nothing of the kind. The sale and the purchase constitute one identical act, an exchange between a commodity-owner and an owner of money, between two persons as opposed to each other as the two poles of a magnet. They form two distinct acts, of polar and opposite characters, when performed by one single person. Hence the identity of sale and purchase implies that the commodity is useless, if, on being thrown into the alchemistical retort of circulation, it does not come out again in the shape of money; if, in other words, it cannot be sold by its owner, and therefore be bought by the owner of the money. That identity further implies that the exchange, if it does take place, constitutes a period of rest, an interval, long or short, in the life of the commodity. Since the first metamorphosis of a commodity is at once a sale and a purchase, it is also an independent process in itself. The purchaser has the commodity, the seller has the money, i.e., a commodity ready to go into circulation at any time. No one can sell unless some one else purchases. But no one is forthwith bound to purchase, because he has just sold. Circulation bursts through all restrictions as to time, place, and individuals, imposed by direct barter, and this it effects by splitting up, into the antithesis of a sale and a purchase, the direct identity that in barter does exist between the alienation of one s own and the acquisition of some other man s product. To say that these two independent and antithetical acts have an intrinsic unity, are essentially one, is the same as to say that this intrinsic oneness expresses itself in an external antithesis. If the interval in time between the two complementary phases of the complete metamorphosis of a commodity become too great, if the split between the sale and the purchase become too pronounced, the intimate connexion between them, their oneness, asserts itself by producing a crisis. The antithesis, use-value and value; the contradictions that private labour is bound to manifest itself as direct social labour, that a particularised concrete kind of labour has to pass for abstract human labour; the contradiction between the personification of objects and the representation of persons by things; all these antitheses and contradictions, which are immanent in commodities, assert themselves, and develop their modes of motion, in the antithetical phases of the metamorphosis of a commodity. These modes therefore imply the possibility, and no more than the possibility, of crises. The conversion of this mere possibility into a reality is the result of a long series of relations, that, from our present standpoint of simple circulation, have as yet no existence. The change of form, C M C, by which the circulation of the material products of labour is brought about, requires that a given value in the shape of a commodity shall begin the process, and shall, also in the shape of a commodity, end it. The movement of the commodity is therefore a circuit. On the other hand, the form of this movement precludes a circuit from being made by the money. The result is not the return of the money, but its continued removal further and further away from its starting-point. So long as the seller sticks fast to his money, which is the transformed shape of his commodity, that commodity is still in the first phase of its metamorphosis, and has completed only half its course. But so soon as he completes the process, so soon as he supplements his sale by a purchase, the money again leaves the hands of its possessor. It is true that if the weaver, after buying the Bible, sell more linen, money comes back into his hands. But this return is not owing to the circulation of the first 20 yards of linen; that circulation resulted in the money getting into the hands of the seller of the Bible. The return of money into the hands of the weaver is brought about only by the renewal or repetition of the process of circulation with a fresh commodity, which renewed process ends with the same result as its predecessor did. Hence the movement directly imparted to money by the circulation of commodities takes the form of a constant motion away from its starting-point, of a course from the hands of one commodity-owner into those of another. This course constitutes its currency (cours de la monnaie). The currency of money is the constant and monotonous repetition of the same process. The commodity is always in the hands of the seller; the money, as a means of purchase, always in the hands of the buyer. And money serves as a means of purchase by realising the price of the commodity. This realisation transfers the commodity from the seller to the buyer and removes the money from the hands of the buyer into those of the seller, where it again goes through the same process with another commodity. That this one-sided character of the money s motion arises out of the two-sided character of the commodity s motion, is a circumstance that is veiled over. The very nature of the circulation of commodities begets the opposite appearance. The first metamorphosis of a commodity is visibly, not only the money s movement, but also that of the commodity itself; in the second metamorphosis, on the contrary, the movement appears to us as the movement of the money alone. In the first phase of its circulation the commodity changes place with the money. Thereupon the commodity, under its aspect of a useful object, falls out of circulation into consumption. In its stead we have its value-shape the money. It then goes through the second phase of its circulation, not under its own natural shape, but under the shape of money. The continuity of the movement is therefore kept up by the money alone, and the same movement that as regards the commodity consists of two processes of an antithetical character, is, when considered as the movement of the money, always one and the same process, a continued change of places with ever fresh commodities. Hence the result brought about by the circulation of commodities, namely, the replacing of one commodity by another, takes the appearance of having been effected not by means of the change of form of the commodities but rather by the money acting as a medium of circulation, by an action that circulates commodities, to all appearance motionless in themselves, and transfers them from hands in which they are non-use-values, to hands in which they are use-values; and that in a direction constantly opposed to the direction of the money. The latter is continually withdrawing commodities from circulation and stepping into their places, and in thus way continually moving further and further from its starting-point. Hence although the movement of the money is merely the expression of the circulation of commodities, yet the contrary appears to be the actual fact, and the circulation of commodities seems to be the result of the movement of the money. Again, money functions as a means of circulation only because in it the values of commodities have independent reality. Hence its movement, as the medium of circulation, is, in fact, merely the movement of commodities while changing their forms. This fact must therefore make itself plainly visible in the currency of money. Thus the linen for instance, first of all changes its commodity-form into its money-form. The second term of its first metamorphosis, C M, the money form, then becomes the first term of its final metamorphosis, M C, its re-conversion into the Bible. But each of these two changes of form is accomplished by an exchange between commodity and money, by their reciprocal displacement. The same pieces of coin come into the seller s hand as the alienated form of the commodity and leave it as the absolutely alienable form of the commodity. They are displaced twice. The first metamorphosis of the linen puts these coins into the weaver s pocket, the second draws them out of it. The two inverse changes undergone by the same commodity are reflected in the displacement, twice repeated, but in opposite directions, of the same pieces of coin. If, on the contrary, only one phase of the metamorphosis is gone through, if there are only sales or only purchases, then a given piece of money changes its place only once. Its second change of place always expresses the second metamorphosis of the commodity, its re-conversion from money. The frequent repetition of the displacement of the same coins reflects not only the series of metamorphoses that a single commodity has gone through, but also the intertwining of the innumerable metamorphoses in the world of commodities in general. It is a matter of course, that all this is applicable to the simple circulation of commodities alone, the only form that we are now considering. Every commodity, when it first steps into circulation, and undergoes its first change of form, does so only to fall out of circulation again and to be replaced by other commodities. Money, on the contrary, as the medium of circulation, keeps continually within the sphere of circulation, and moves about in it. The question therefore arises, how much money this sphere constantly absorbs? In a given country there take place every day at the same time, but in different localities, numerous one-sided metamorphoses of commodities, or, in other words, numerous sales and numerous purchases. The commodities are equated beforehand in imagination, by their prices, to definite quantities of money. And since, in the form of circulation now under consideration, money and commodities always come bodily face to face, one at the positive pole of purchase, the other at the negative pole of sale, it is clear that the amount of the means of circulation required, is determined beforehand by the sum of the prices of all these commodities. As a matter of fact, the money in reality represents the quantity or sum of gold ideally expressed beforehand by the sum of the prices of the commodities. The equality of these two sums is therefore self-evident. We know, however, that, the values of commodities remaining constant, their prices vary with the value of gold (the material of money), rising in proportion as it falls, and falling in proportion as it rises. Now if, in consequence of such a rise or fall in the value of gold, the sum of the prices of commodities fall or rise, the quantity of money in currency must fall or rise to the same extent. The change in the quantity of the circulating medium is, in this case, it is true, caused by the money itself, yet not in virtue of its function as a medium of circulation, but of its function as a measure of value. First, the price of the commodities varies inversely as the value of the money, and then the quantity of the medium of circulation varies directly as the price of the commodities. Exactly the same thing would happen if, for instance, instead of the value of gold falling, gold were replaced by silver as the measure of value, or if, instead of the value of silver rising, gold were to thrust silver out from being the measure of value. In the one case, more silver would be current than gold was before; in the other case, less gold would be current than silver was before. In each case the value of the material of money, i.e., the value of the commodity that serves as the measure of value, would have undergone a change, and therefore so, too, would the prices of commodities which express their values in money, and so, too, would the quantity of money current whose function it is to realise those prices. We have already seen, that the sphere of circulation has an opening through which gold (or the material of money generally) enters into it as a commodity with a given value. Hence, when money enters on its functions as a measure of value, when it expresses prices, its value is already determined. If now its value fall, this fact is first evidenced by a change in the prices of those commodities that are directly bartered for the precious metals at the sources of their production. The greater part of all other commodities, especially in the imperfectly developed stages of civil society, will continue for a long time to be estimated by the former antiquated and illusory value of the measure of value. Nevertheless, one commodity infects another through their common value-relation, so that their prices, expressed in gold or in silver, gradually settle down into the proportions determined by their comparative values, until finally the values of all commodities are estimated in terms of the new value of the metal that constitutes money. This process is accompanied by the continued increase in the quantity of the precious metals, an increase caused by their streaming in to replace the articles directly bartered for them at their sources of production. In proportion therefore as commodities in general acquire their true prices, in proportion as their values become estimated according to the fallen value of the precious metal, in the same proportion the quantity of that metal necessary for realising those new prices is provided beforehand. A one-sided observation of the results that followed upon the discovery of fresh supplies of gold and silver, led some economists in the 17th, and particularly in the 18th century, to the false conclusion, that the prices of commodities had gone up in consequence of the increased quantity of gold and silver serving as means of circulation. Henceforth we shall consider the value of gold to be given, as, in fact, it is momentarily, whenever we estimate the price of a commodity. On this supposition then, the quantity of the medium of circulation is determined by the sum of the prices that have to be realised. If now we further suppose the price of each commodity to be given, the sum of the prices clearly depends on the mass of commodities in circulation. It requires but little racking of brains to comprehend that if one quarter of wheat costs 2,100 quarters will cost 200, 200 quarters 400, and so on, that consequently the quantity of money that changes place with the wheat, when sold, must increase with the quantity of that wheat. If the mass of commodities remain constant, the quantity of circulating money varies with the fluctuations in the prices of those commodities. It increases and diminishes because the sum of the prices increases or diminishes in consequence of the change of price. To produce this effect, it is by no means requisite that the prices of all commodities should rise or fall simultaneously. A rise or a fall in the prices of a number of leading articles, is sufficient in the one case to increase, in the other to diminish, the sum of the prices of all commodities, and, therefore, to put more or less money in circulation. Whether the change in the price correspond to an actual change of value in the commodities, or whether it be the result of mere fluctuations in market-prices, the effect on the quantity of the medium of circulation remains the same. Suppose the following articles to be sold or partially metamorphosed simultaneously in different localities: say, one quarter of wheat, 20 yards of linen, one Bible, and 4 gallons of brandy. If the price of each article be 2, and the sum of the prices to be realised be consequently 8, it follows that 8 in money must go into circulation. If, on the other hand, these same articles are links in the following chain of metamorphoses: 1 quarter of wheat 2 20 yards of linen 2 1 Bible 2 4 gallons of brandy 2, a chain that is already well known to us, in that case the 2 cause the different commodities to circulate one after the other, and after realising their prices successively, and therefore the sum of those prices, 8, they come to rest at last in the pocket of the distiller. The 2 thus make four moves. This repeated change of place of the same pieces of money corresponds to the double change in form of the commodities, to their motion in opposite directions through two stages of circulation. and to the interlacing of the metamorphoses of different commodities. These antithetic and complementary phases, of which the process of metamorphosis consists, are gone through, not simultaneously, but successively. Time is therefore required for the completion of the series. Hence the velocity of the currency of money is measured by the number of moves made by a given piece of money in a given time. Suppose the circulation of the 4 articles takes a day. The sum of the prices to be realised in the day is 8, the number of moves of the two pieces of money is four, and the quantity of money circulating is 2. Hence, for a given interval of time during the process of circulation, we have the following relation: the quantity of money functioning as the circulating medium is equal to the sum of the prices of the commodities divided by the number of moves made by coins of the same denomination. This law holds generally. The total circulation of commodities in a given country during a given period is made up on the one hand of numerous isolated and simultaneous partial metamorphoses, sales which are at the same time purchases, in which each coin changes its place only once, or makes only one move; on the other hand, of numerous distinct series of metamorphoses partly running side by side, and partly coalescing with each other, in each of which series each coin makes a number of moves, the number being greater or less according to circumstances. The total number of moves made by all the circulating coins of one denomination being given, we can arrive at the average number of moves made by a single coin of that denomination, or at the average velocity of the currency of money. The quantity of money thrown into the circulation at the beginning of each day is of course determined by the sum of the prices of all the commodities circulating simultaneously side by side. But once in circulation, coins are, so to say, made responsible for one another. If the one increase its velocity, the other either retards its own, or altogether falls out of circulation; for the circulation can absorb only such a quantity of gold as when multiplied by the mean number of moves made by one single coin or element, is equal to the sum of the prices to be realised. Hence if the number of moves made by the separate pieces increase, the total number of those pieces in circulation diminishes. If the number of the moves diminish, the total number of pieces increases. Since the quantity of money capable of being absorbed by the circulation is given for a given mean velocity of currency, all that is necessary in order to abstract a given number of sovereigns from the circulation is to throw the same number of one-pound notes into it, a trick well known to all bankers. Just as the currency of money, generally considered, is but a reflex of the circulation of commodities, or of the antithetical metamorphoses they undergo, so, too, the velocity of that currency reflects the rapidity with which commodities change their forms, the continued interlacing of one series of metamorphoses with another, the hurried social interchange of matter, the rapid disappearance of commodities from the sphere of circulation, and the equally rapid substitution of fresh ones in their places. Hence, in the velocity of the currency we have the fluent unity of the antithetical and complementary phases, the unity of the conversion of the useful aspect of commodities into their value-aspect, and their re-conversion from the latter aspect to the former, or the unity of the two processes of sale and purchase. On the other hand, the retardation of the currency reflects the separation of these two processes into isolated antithetical phases, reflects the stagnation in the change of form, and therefore, in the social interchange of matter. The circulation itself, of course, gives no clue to the origin of this stagnation; it merely puts in evidence the phenomenon itself. The general public, who, simultaneously with the retardation of the currency, see money appear and disappear less frequently at the periphery of circulation, naturally attribute this retardation to a quantitative deficiency in the circulating medium. The total quantity of money functioning during a given period as the circulating medium, is determined, on the one hand, by the sum of the prices of the circulating commodities, and on the other hand, by the rapidity with which the antithetical phases of the metamorphoses follow one another. On this rapidity depends what proportion of the sum of the prices can, on the average, be realised by each single coin. But the sum of the prices of the circulating commodities depends on the quantity, as well as on the prices, of the commodities. These three factors, however, state of prices, quantity of circulating commodities, and velocity of money-currency, are all variable. Hence, the sum of the prices to be realised, and consequently the quantity of the circulating medium depending on that sum, will vary with the numerous variations of these three factors in combination. Of these variations we shall consider those alone that have been the most important in the history of prices. While prices remain constant, the quantity of the circulating medium may increase owing to the number of circulating commodities increasing, or to the velocity of currency decreasing, or to a combination of the two. On the other hand the quantity of the circulating medium may decrease with a decreasing number of commodities, or with an increasing rapidity of their circulation. With a general rise in the prices of commodities, the quantity of the circulating medium will remain constant, provided the number of commodities in circulation decrease proportionally to the increase in their prices, or provided the velocity of currency increase at the same rate as prices rise, the number of commodities in circulation remaining constant. The quantity of the circulating medium may decrease, owing to the number of commodities decreasing more rapidly; or to the velocity of currency increasing more rapidly, than prices rise. With a general fall in the prices of commodities, the quantity of the circulating medium will remain constant, provided the number of commodities increase proportionally to their fall in price, or provided the velocity of currency decrease in the same proportion. The quantity of the circulating medium will increase, provided the number of commodities increase quicker, or the rapidity of circulation decrease quicker, than the prices fall. The variations of the different factors may mutually compensate each other, so that notwithstanding their continued instability, the sum of the prices to be realised and the quantity of money in circulation remain constant; consequently, we find, especially if we take long periods into consideration, that the deviations from the average level, of the quantity of money current in any country, are much smaller than we should at first sight expect, apart of course from excessive perturbations periodically arising from industrial and commercial crises, or less frequently, from fluctuations in the value of money. The law, that the quantity of the circulating medium is determined by the sum of the prices of the commodities circulating, and the average velocity of currency may also be stated as follows: given the sum of the values of commodities, and the average rapidity of their metamorphoses, the quantity of precious metal current as money depends on the value of that precious metal. The erroneous opinion that it is, on the contrary, prices that are determined by the quantity of the circulating medium, and that the latter depends on the quantity of the precious metals in a country; this opinion was based by those who first held it, on the absurd hypothesis that commodities are without a price, and money without a value, when they first enter into circulation, and that, once in the circulation, an aliquot part of the medley of commodities is exchanged for an aliquot part of the heap of precious metals. That money takes the shape of coin, springs from its function as the circulating medium. The weight of gold represented in imagination by the prices or money-names of commodities, must confront those commodities, within the circulation, in the shape of coins or pieces of gold of a given denomination. Coining, like the establishment of a standard of prices, is the business of the State. The different national uniforms worn at home by gold and silver as coins, and doffed again in the market of the world, indicate the separation between the internal or national spheres of the circulation of commodities, and their universal sphere. The only difference, therefore, between coin and bullion, is one of shape, and gold can at any time pass from one form to the other. But no sooner does coin leave the mint, than it immediately finds itself on the high-road to the melting pot. During their currency, coins wear away, some more, others less. Name and substance, nominal weight and real weight, begin their process of separation. Coins of the same denomination become different in value, because they are different in weight. The weight of gold fixed upon as the standard of prices, deviates from the weight that serves as the circulating medium, and the latter thereby ceases any longer to be a real equivalent of the commodities whose prices it realises. The history of coinage during the middle ages and down into the 18th century, records the ever renewed confusion arising from this cause. The natural tendency of circulation to convert coins into a mere semblance of what they profess to be, into a symbol of the weight of metal they are officially supposed to contain, is recognised by modern legislation, which fixes the loss of weight sufficient to demonetise a gold coin, or to make it no longer legal tender. The fact that the currency of coins itself effects a separation between their nominal and their real weight, creating a distinction between them as mere pieces of metal on the one hand, and as coins with a definite function on the other this fact implies the latent possibility of replacing metallic coins by tokens of some other material, by symbols serving the same purposes as coins. The practical difficulties in the way of coining extremely minute quantities of gold or silver, and the circumstance that at first the less precious metal is used as a measure of value instead of the-more precious, copper instead of silver, silver instead of gold, and that the less precious circulates as money until dethroned by the more precious all these facts explain the parts historically played by silver and copper tokens as substitutes for gold coins. Silver and copper tokens take the place of gold in those regions of the circulation where coins pass from hand to hand most rapidly, and are subject to the maximum amount of wear and tear. This occurs where sales and purchases on a very small scale are continually happening. In order to prevent these satellites from establishing themselves permanently in the place of gold, positive enactments determine the extent to which they must be compulsorily received as payment instead of gold. The particular tracks pursued by the different species of coin in currency, run naturally into each other. The tokens keep company with gold, to pay fractional parts of the smallest gold coin; gold is, on the one hand, constantly pouring into retail circulation, and on the other hand is as constantly being thrown out again by being changed into tokens. The weight of metal in the silver and copper tokens is arbitrarily fixed by law. When in currency, they wear away even more rapidly than gold coins. Hence their functions are totally independent of their weight, and consequently of all value. The function of gold as coin becomes completely independent of the metallic value of that gold. Therefore things that are relatively without value, such as paper notes, can serve as coins in its place. This purely symbolic character is to a certain extent masked in metal tokens. In paper money it stands out plainly. In fact, ce n est que le premier pas qui co te. We allude here only to inconvertible paper money issued by the State and having compulsory circulation. It has its immediate origin in the metallic currency. Money based upon credit implies on the other hand conditions, which, from our standpoint of the simple circulation of commodities, are as yet totally unknown to us. But we may affirm this much, that just as true paper money takes its rise in the function of money as the circulating medium, so money based upon credit takes root spontaneously in the function of money as the means of payment. The State puts in circulation bits of paper on which their various denominations, say 1, 5, &c., are printed. In so far as they actually take the place of gold to the same amount, their movement is subject to the laws that regulate the currency of money itself. A law peculiar to the circulation of paper money can spring up only from the proportion in which that paper money represents gold. Such a law exists; stated simply, it is as follows: the issue of paper money must not exceed in amount the gold (or silver as the case may be) which would actually circulate if not replaced by symbols. Now the quantity of gold which the circulation can absorb, constantly fluctuates about a given level. Still, the mass of the circulating medium in a given country never sinks below a certain minimum easily ascertained by actual experience. The fact that this minimum mass continually undergoes changes in its constituent parts, or that the pieces of gold of which it consists are being constantly replaced by fresh ones, causes of course no change either in its amount or in the continuity of its circulation. It can therefore be replaced by paper symbols. If, on the other hand, all the conduits of circulation were to-day filled with paper money to the full extent of their capacity for absorbing money, they might to-morrow be overflowing in consequence of a fluctuation in the circulation of commodities. There would no longer be any standard. If the paper money exceed its proper limit, which is the amount in gold coins of the like denomination that can actually be current, it would, apart from the danger of falling into general disrepute, represent only that quantity of gold, which, in accordance with the laws of the circulation of commodities, is required, and is alone capable of being represented by paper. If the quantity of paper money issued be double what it ought to be, then, as a matter of fact, 1 would be the money-name not of 1/4 of an ounce, but of 1/8 of an ounce of gold. The effect would be the same as if an alteration had taken place in the function of gold as a standard of prices. Those values that were previously expressed by the price of 1 would now be expressed by the price of 2. Paper money is a token representing gold or money. The relation between it and the values of commodities is this, that the latter are ideally expressed in the same quantities of gold that are symbolically represented by the paper. Only in so far as paper money represents gold, which like all other commodities has value, is it a symbol of value. Finally, some one may ask why gold is capable of being replaced by tokens that have no value? But, as we have already seen, it is capable of being so replaced only in so far as it functions exclusively as coin, or as the circulating medium, and as nothing else. Now, money has other functions besides this one, and the isolated function of serving as the mere circulating medium is not necessarily the only one attached to gold coin, although this is the case with those abraded coins that continue to circulate. Each piece of money is a mere coin, or means of circulation, only so long as it actually circulates. But this is just the case with that minimum mass of gold, which is capable of being replaced by paper money. That mass remains constantly within the sphere of circulation, continually functions as a circulating medium, and exists exclusively for that purpose. Its movement therefore represents nothing but the continued alternation of the inverse phases of the metamorphosis C M C, phases in which commodities confront their value-forms, only to disappear again immediately. The independent existence of the exchange-value of a commodity is here a transient apparition, by means of which the commodity is immediately replaced by another commodity. Hence, in this process which continually makes money pass from hand to hand, the mere symbolical existence of money suffices. Its functional existence absorbs, so to say, its material existence. Being a transient and objective reflex of the prices of commodities, it serves only as a symbol of itself, and is therefore capable of being replaced by a token. One thing is, however, requisite; this token must have an objective social validity of its own, and this the paper symbol acquires by its forced currency. This compulsory action of the State can take effect only within that inner sphere of circulation which is coterminous with the territories of the community, but it is also only within that sphere that money completely responds to its function of being the circulating medium, or becomes coin. The commodity that functions as a measure of value, and, either in its own person or by a representative, as the medium of circulation, is money. Gold (or silver) is therefore money. It functions as money, on the one hand, when it has to be present in its own golden person. It is then the money-commodity, neither merely ideal, as in its function of a measure of value, nor capable of being represented, as in its function of circulating medium. On the other hand, it also functions as money, when by virtue of its function, whether that function be performed in person or by representative, it congeals into the sole form of value, the only adequate form of existence of exchange-value, in opposition to use-value, represented by all other commodities. The continual movement in circuits of the two antithetical metamorphoses of commodities, or the never ceasing alternation of sale and purchase, is reflected in the restless currency of money, or in the function that money performs of a perpetuum mobile of circulation. But so soon as the series of metamorphoses is interrupted, so soon as sales are not supplemented by subsequent purchases, money ceases to be mobilised; it is transformed, as Boisguillebert says, from meuble into immeuble, from movable into immovable, from coin into money. With the very earliest development of the circulation of commodities, there is also developed the necessity, and the passionate desire, to hold fast the product of the first metamorphosis. This product is the transformed shape of the commodity, or its gold-chrysalis. Commodities are thus sold not for the purpose of buying others, but in order to replace their commodity-form by their money-form. From being the mere means of effecting the circulation of commodities, this change of form becomes the end and aim. The changed form of the commodity is thus prevented from functioning as its unconditionally alienable form, or as its merely transient money-form. The money becomes petrified into a hoard, and the seller becomes a hoarder of money. In the early stages of the circulation of commodities, it is the surplus use-values alone that are converted into money. Gold and silver thus become of themselves social expressions for superfluity or wealth. This naive form of hoarding becomes perpetuated in those communities in which the traditional mode of production is carried on for the supply of a fixed and limited circle of home wants. It is thus with the people of Asia, and particularly of the East Indies. Vanderlint, who fancies that the prices of commodities in a country are determined by the quantity of gold and silver to be found in it, asks himself why Indian commodities are so cheap. Answer: Because the Hindus bury their money. From 1602 to 1734, he remarks, they buried 150 millions of pounds sterling of silver, which originally came from America to Europe. In the 10 years from 1856 to 1866, England exported to India and China 120,000,000 in silver, which had been received in exchange for Australian gold. Most of the silver exported to China makes its way to India. As the production of commodities further develops, every producer of commodities is compelled to make sure of the nexus rerum or the social pledge. His wants are constantly making themselves felt, and necessitate the continual purchase of other people s commodities, while the production and sale of his own goods require time, and depend upon circumstances. In order then to be able to buy without selling, he must have sold previously without buying. This operation, conducted on a general scale, appears to imply a contradiction. But the precious metals at the sources of their production are directly exchanged for other commodities. And here we have sales (by the owners of commodities) without purchases (by the owners of gold or silver). And subsequent sales, by other producers, unfollowed by purchases, merely bring about the distribution of the newly produced precious metals among all the owners of commodities. In this way, all along the line of exchange, hoards of gold and silver of varied extent are accumulated. With the possibility of holding and storing up exchange-value in the shape of a particular commodity, arises also the greed for gold. Along with the extension of circulation, increases the power of money, that absolutely social form of wealth ever ready for use. Gold is a wonderful thing! Whoever possesses it is lord of all he wants. By means of gold one can even get souls into Paradise. (Columbus in his letter from Jamaica, 1503.) Since gold does not disclose what has been transformed into it, everything, commodity or not, is convertible into gold. Everything becomes saleable and buyable. The circulation becomes the great social retort into which everything is thrown, to come out again as a gold-crystal. Not even are the bones of saints, and still less are more delicate res sacrosanctae, extra commercium hominum able to withstand this alchemy. Just as every qualitative difference between commodities is extinguished in money, so money, on its side, like the radical leveller that it is, does away with all distinctions. [43a] But money itself is a commodity, an external object, capable of becoming the private property of any individual. Thus social power becomes the private power of private persons. The ancients therefore denounced money as subversive of the economic and moral order of things. [43b] Modern society, which, soon after its birth, pulled Plutus by the hair of his head from the bowels of the earth, greets gold as its Holy Grail, as the glittering incarnation of the very principle of its own life. A commodity, in its capacity of a use-value, satisfies a particular want, and is a particular element of material wealth. But the value of a commodity measures the degree of its attraction for all other elements of material wealth, and therefore measures the social wealth of its owner. To a barbarian owner of commodities, and even to a West-European peasant, value is the same as value-form, and therefore to him the increase in his hoard of gold and silver is an increase in value. It is true that the value of money varies, at one time in consequence of a variation in its own value, at another, in consequence of a change in the values of commodities. But this, on the one hand, does not prevent 200 ounces of gold from still containing more value than 100 ounces, nor, on the other hand, does it hinder the actual metallic form of this article from continuing to be the universal equivalent form of all other commodities, and the immediate social incarnation of all human labour. The desire after hoarding is in its very nature unsatiable. In its qualitative aspect, or formally considered, money has no bounds to its efficacy, i.e., it is the universal representative of material wealth, because it is directly convertible into any other commodity. But, at the same time, every actual sum of money is limited in amount, and, therefore, as a means of purchasing, has only a limited efficacy. This antagonism between the quantitative limits of money and its qualitative boundlessness, continually acts as a spur to the hoarder in his Sisyphus-like labour of accumulating. It is with him as it is with a conqueror who sees in every new country annexed, only a new boundary. In order that gold may be held as money, and made to form a hoard, it must be prevented from circulating, or from transforming itself into a means of enjoyment. The hoarder, therefore, makes a sacrifice of the lusts of the flesh to his gold fetish. He acts in earnest up to the Gospel of abstention. On the other hand, he can withdraw from circulation no more than what he has thrown into it in the shape of commodities. The more he produces, the more he is able to sell. Hard work, saving, and avarice are, therefore, his three cardinal virtues, and to sell much and buy little the sum of his political economy. By the side of the gross form of a hoard, we find also its aesthetic form in the possession of gold and silver articles. This grows with the wealth of civil society. Soyons riches ou paraissons riches (Diderot). In this way there is created, on the one hand, a constantly extending market for gold and silver, unconnected with their functions as money, and, on the other hand, a latent source of supply, to which recourse is had principally in times of crisis and social disturbance. Hoarding serves various purposes in the economy of the metallic circulation. Its first function arises out of the conditions to which the currency of gold and silver coins is subject. We have seen how, along with the continual fluctuations in the extent and rapidity of the circulation of commodities and in their prices, the quantity of money current unceasingly ebbs and flows. This mass must, therefore, be capable of expansion and contraction. At one time money must be attracted in order to act as circulating coin, at another, circulating coin must be repelled in order to act again as more or less stagnant money. In order that the mass of money, actually current, may constantly saturate the absorbing power of the circulation, it is necessary that the quantity of gold and silver in a country be greater than the quantity required to function as coin. This condition is fulfilled by money taking the form of hoards. These reserves serve as conduits for the supply or withdrawal of money to or from the circulation, which in this way never overflows its banks. In the simple form of the circulation of commodities hitherto considered, we found a given value always presented to us in a double shape, as a commodity at one pole, as money at the opposite pole. The owners of commodities came therefore into contact as the respective representatives of what were already equivalents. But with the development of circulation, conditions arise under which the alienation of commodities becomes separated, by an interval of time, from the realisation of their prices. It will be sufficient to indicate the most simple of these conditions. One sort of article requires a longer, another a shorter time for its production. Again, the production of different commodities depends on different seasons of the year. One sort of commodity may be born on its own market place, another has to make a long journey to market. Commodity-owner No. 1, may therefore be ready to sell, before No. 2 is ready to buy. When the same transactions are continually repeated between the same persons, the conditions of sale are regulated in accordance with the conditions of production. On the other hand, the use of a given commodity, of a house, for instance, is sold (in common parlance, let) for a definite period. Here, it is only at the end of the term that the buyer has actually received the use-value of the commodity. He therefore buys it before he pays for it. The vendor sells an existing commodity, the purchaser buys as the mere representative of money, or rather of future money. The vendor becomes a creditor, the purchaser becomes a debtor. Since the metamorphosis of commodities, or the development of their value-form, appears here under a new aspect, money also acquires a fresh function; it becomes the means of payment. The character of creditor, or of debtor, results here from the simple circulation. The change in the form of that circulation stamps buyer and seller with this new die. At first, therefore, these new parts are just as transient and alternating as those of seller and buyer, and are in turns played by the same actors. But the opposition is not nearly so pleasant, and is far more capable of crystallisation. The same characters can, however, be assumed independently of the circulation of commodities. The class-struggles of the ancient world took the form chiefly of a contest between debtors and creditors, which in Rome ended in the ruin of the plebeian debtors. They were displaced by slaves. In the middle ages the contest ended with the ruin of the feudal debtors, who lost their political power together with the economic basis on which it was established. Nevertheless, the money relation of debtor and creditor that existed at these two periods reflected only the deeper-lying antagonism between the general economic conditions of existence of the classes in question. Let us return to the circulation of commodities. The appearance of the two equivalents, commodities and money, at the two poles of the process of sale, has ceased to be simultaneous. The money functions now, first as a measure of value in the determination of the price of the commodity sold; the price fixed by the contract measures the obligation of the debtor, or the sum of money that he has to pay at a fixed date. Secondly, it serves as an ideal means of purchase. Although existing only in the promise of the buyer to pay, it causes the commodity to change hands. It is not before the day fixed for payment that the means of payment actually steps into circulation, leaves the hand of the buyer for that of the seller. The circulating medium was transformed into a hoard, because the process stopped short after the first phase, because the converted shape of the commodity, viz., the money, was withdrawn from circulation. The means of payment enters the circulation, but only after the commodity has left it. The money is no longer the means that brings about the process. It only brings it to a close, by stepping in as the absolute form of existence of exchange-value, or as the universal commodity. The seller turned his commodity into money, in order thereby to satisfy some want, the hoarder did the same in order to keep his commodity in its money-shape, and the debtor in order to be able to pay; if he do not pay, his goods will be sold by the sheriff. The value-form of commodities, money, is therefore now the end and aim of a sale, and that owing to a social necessity springing out of the process of circulation itself. The buyer converts money back into commodities before he has turned commodities into money: in other words, he achieves the second metamorphosis of commodities before the first. The seller s commodity circulates, and realises its price, but only in the shape of a legal claim upon money. It is converted into a use-value before it has been converted into money. The completion of its first metamorphosis follows only at a later period. The obligations falling due within a given period, represent the sum of the prices of the commodities, the sale of which gave rise to those obligations. The quantity of gold necessary to realise this sum, depends, in the first instance, on the rapidity of currency of the means of payment. That quantity is conditioned by two circumstances: first the relations between debtors and creditors form a sort of chain, in such a way that A, when he receives money from his debtor B, straightway hands it over to C his creditor, and so on; the second circumstance is the length of the intervals between the different due-days of the obligations. The continuous chain of payments, or retarded first metamorphoses, is essentially different from that interlacing of the series of metamorphoses which we considered on a former page. By the currency of the circulating medium, the connexion between buyers and sellers, is not merely expressed. This connexion is originated by, and exists in, the circulation alone. Contrariwise, the movement of the means of payment expresses a social relation that was in existence long before. The fact that a number of sales take place simultaneously, and side by side, limits the extent to which coin can be replaced by the rapidity of currency. On the other hand, this fact is a new lever in economising the means of payment. In proportion as payments are concentrated at one spot, special institutions and methods are developed for their liquidation. Such in the middle ages were the virements at Lyons. The debts due to A from B, to B from C, to C from A, and so on, have only to be confronted with each other, in order to annul each other to a certain extent like positive and negative quantities. There thus remains only a single balance to pay. The greater the amount of the payments concentrated, the less is this balance relatively to that amount, and the less is the mass of the means of payment in circulation. The function of money as the means of payment implies a contradiction without a terminus medius. In so far as the payments balance one another, money functions only ideally as money of account, as a measure of value. In so far as actual payments have to be made, money does not serve as a circulating medium, as a mere transient agent in the interchange of products, but as the individual incarnation of social labour, as the independent form of existence of exchange-value, as the universal commodity. This contradiction comes to a head in those phases of industrial and commercial crises which are known as monetary crises. Such a crisis occurs only where the ever-lengthening chain of payments, and an artificial system of settling them, has been fully developed. Whenever there is a general and extensive disturbance of this mechanism, no matter what its cause, money becomes suddenly and immediately transformed, from its merely ideal shape of money of account, into hard cash. Profane commodities can no longer replace it. The use-value of commodities becomes valueless, and their value vanishes in the presence of its own independent form. On the eve of the crisis, the bourgeois, with the self-sufficiency that springs from intoxicating prosperity, declares money to be a vain imagination. Commodities alone are money. But now the cry is everywhere: money alone is a commodity! As the hart pants after fresh water, so pants his soul after money, the only wealth. In a crisis, the antithesis between commodities and their value-form, money, becomes heightened into an absolute contradiction. Hence, in such events, the form under which money appears is of no importance. The money famine continues, whether payments have to be made in gold or in credit money such as bank-notes. If we now consider the sum total of the money current during a given period, we shall find that, given the rapidity of currency of the circulating medium and of the means of payment, it is equal to the sum of the prices to be realised, plus the sum of the payments falling due, minus the payments that balance each other, minus finally the number of circuits in which the same piece of coin serves in turn as means of circulation and of payment. Hence, even when prices, rapidity of currency, and the extent of the economy in payments, are given, the quantity of money current and the mass of commodities circulating during a given period, such as a day, no longer correspond. Money that represents commodities long withdrawn from circulation, continues to be current. Commodities circulate, whose equivalent in money will not appear on the scene till some future day. Moreover, the debts contracted each day, and the payments falling due on the same day, are quite incommensurable quantities. Credit-money springs directly out of the function of money as a means of payment. Certificates of the debts owing for the purchased commodities circulate for the purpose of transferring those debts to others. On the other hand, to the same extent as the system of credit is extended, so is the function of money as a means of payment. In that character it takes various forms peculiar to itself under which it makes itself at home in the sphere of great commercial transactions. Gold and silver coin, on the other hand, are mostly relegated to the sphere of retail trade. When the production of commodities has sufficiently extended itself, money begins to serve as the means of payment beyond the sphere of the circulation of commodities. It becomes the commodity that is the universal subject-matter of all contracts. Rents, taxes, and such like payments are transformed from payments in kind into money payments. To what extent this transformation depends upon the general conditions of production, is shown, to take one example, by the fact that the Roman Empire twice failed in its attempt to levy all contributions in money. The unspeakable misery of the French agricultural population under Louis XIV., a misery so eloquently denounced by Boisguillebert, Marshal Vauban, and others, was due not only to the weight of the taxes, but also to the conversion of taxes in kind into money taxes. In Asia, on the other hand, the fact that state taxes are chiefly composed of rents payable in kind, depends on conditions of production that are reproduced with the regularity of natural phenomena. And this mode of payment tends in its turn to maintain the ancient form of production. It is one of the secrets of the conservation of the Ottoman Empire. If the foreign trade, forced upon Japan by Europeans, should lead to the substitution of money rents for rents in kind, it will be all up with the exemplary agriculture of that country. The narrow economic conditions under which that agriculture is carried on, will be swept away. In every country, certain days of the year become by habit recognised settling days for various large and recurrent payments. These dates depend, apart from other revolutions in the wheel of reproduction, on conditions closely connected with the seasons. They also regulate the dates for payments that have no direct connexion with the circulation of commodities such as taxes, rents, and so on. The quantity of money requisite to make the payments, falling due on those dates all over the country, causes periodical, though merely superficial, perturbations in the economy of the medium of payment. From the law of the rapidity of currency of the means of payment, it follows that the quantity of the means of payment required for all periodical payments, whatever their source, is in inverse proportion to the length of their periods. The development of money into a medium of payment makes it necessary to accumulate money against the dates fixed for the payment of the sums owing. While hoarding, as a distinct mode of acquiring riches, vanishes with the progress of civil society, the formation of reserves of the means of payment grows with that progress. When money leaves the home sphere of circulation, it strips off the local garbs which it there assumes, of a standard of prices, of coin, of tokens, and of a symbol of value, and returns to its original form of bullion. In the trade between the markets of the world, the value of commodities is expressed so as to be universally recognised. Hence their independent value-form also, in these cases, confronts them under the shape of universal money. It is only in the markets of the world that money acquires to the full extent the character of the commodity whose bodily form is also the immediate social incarnation of human labour in the abstract. Its real mode of existence in this sphere adequately corresponds to its ideal concept. Within the sphere of home circulation, there can be but one commodity which, by serving as a measure of value, becomes money. In the markets of the world a double measure of value holds sway, gold and silver. Money of the world serves as the universal medium of payment, as the universal means of purchasing, and as the universally recognised embodiment of all wealth. Its function as a means of payment in the settling of international balances is its chief one. Hence the watchword of the mercantilists, balance of trade. Gold and silver serve as international means of purchasing chiefly and necessarily in those periods when the customary equilibrium in the interchange of products between different nations is suddenly disturbed. And lastly, it serves as the universally recognised embodiment of social wealth, whenever the question is not of buying or paying, but of transferring wealth from one country to another, and whenever this transference in the form of commodities is rendered impossible, either by special conjunctures in the markets or by the purpose itself that is intended. Just as every country needs a reserve of money for its home circulation so, too, it requires one for external circulation in the markets of the world. The functions of hoards, therefore, arise in part out of the function of money, as the medium of the home circulation and home payments, and in part out of its function of money of the world. For this latter function, the genuine money-commodity, actual gold and silver, is necessary. On that account, Sir James Steuart, in order to distinguish them from their purely local substitutes, calls gold and silver money of the world. The current of the stream of gold and silver is a double one. On the one hand, it spreads itself from its sources over all the markets of the world, in order to become absorbed, to various extents, into the different national spheres of circulation, to fill the conduits of currency, to replace abraded gold and silver coins, to supply the material of articles of luxury, and to petrify into hoards. This first current is started by the countries that exchange their labour, realised in commodities, for the labour embodied in the precious metals by gold and silver-producing countries. On the other hand, there is a continual flowing backwards and forwards of gold and silver between the different national spheres of circulation, a current whose motion depends on the ceaseless fluctuations in the course of exchange. Countries in which the bourgeois form of production is developed to a certain extent, limit the hoards concentrated in the strong rooms of the banks to the minimum required for the proper performance of their peculiar functions. Whenever these hoards are strikingly above their average level, it is, with some exceptions, an indication of stagnation in the circulation of commodities, of an interruption in the even flow of their metamorphoses.

Economic Manuscripts: Capital Vol. I - Chapter Three

https://www.marxists.org/archive/marx/works/1867-c1/ch03.htm

The circulation of commodities is the starting-point of capital. The production of commodities, their circulation, and that more developed form of their circulation called commerce, these form the historical ground-work from which it rises. The modern history of capital dates from the creation in the 16th century of a world-embracing commerce and a world-embracing market. If we abstract from the material substance of the circulation of commodities, that is, from the exchange of the various use-values, and consider only the economic forms produced by this process of circulation, we find its final result to be money: this final product of the circulation of commodities is the first form in which capital appears. As a matter of history, capital, as opposed to landed property, invariably takes the form at first of money; it appears as moneyed wealth, as the capital of the merchant and of the usurer. But we have no need to refer to the origin of capital in order to discover that the first form of appearance of capital is money. We can see it daily under our very eyes. All new capital, to commence with, comes on the stage, that is, on the market, whether of commodities, labour, or money, even in our days, in the shape of money that by a definite process has to be transformed into capital. The first distinction we notice between money that is money only, and money that is capital, is nothing more than a difference in their form of circulation. The simplest form of the circulation of commodities is C M C, the transformation of commodities into money, and the change of the money back again into commodities; or selling in order to buy. But alongside of this form we find another specifically different form: M C M, the transformation of money into commodities, and the change of commodities back again into money; or buying in order to sell. Money that circulates in the latter manner is thereby transformed into, becomes capital, and is already potentially capital. Now let us examine the circuit M C M a little closer. It consists, like the other, of two antithetical phases. In the first phase, M C, or the purchase, the money is changed into a commodity. In the second phase, C M, or the sale, the commodity is changed back again into money. The combination of these two phases constitutes the single movement whereby money is exchanged for a commodity, and the same commodity is again exchanged for money; whereby a commodity is bought in order to be sold, or, neglecting the distinction in form between buying and selling, whereby a commodity is bought with money, and then money is bought with a commodity. The result, in which the phases of the process vanish, is the exchange of money for money, M M. If I purchase 2,000 lbs. of cotton for 100, and resell the 2,000 lbs. of cotton for 110, I have, in fact, exchanged 100 for 110, money for money. Now it is evident that the circuit M C M would be absurd and without meaning if the intention were to exchange by this means two equal sums of money, 100 for 100. The miser s plan would be far simpler and surer; he sticks to his 100 instead of exposing it to the dangers of circulation. And yet, whether the merchant who has paid 100 for his cotton sells it for 110, or lets it go for 100, or even 50, his money has, at all events, gone through a characteristic and original movement, quite different in kind from that which it goes through in the hands of the peasant who sells corn, and with the money thus set free buys clothes. We have therefore to examine first the distinguishing characteristics of the forms of the circuits M C M and C M C, and in doing this the real difference that underlies the mere difference of form will reveal itself. Let us see, in the first place, what the two forms have in common. Both circuits are resolvable into the same two antithetical phases, C M, a sale, and M C, a purchase. In each of these phases the same material elements - a commodity, and money, and the same economic dramatis personae, a buyer and a seller - confront one another. Each circuit is the unity of the same two antithetical phases, and in each case this unity is brought about by the intervention of three contracting parties, of whom one only sells, another only buys, while the third both buys and sells. What, however, first and foremost distinguishes the circuit C M C from the circuit M C M, is the inverted order of succession of the two phases. The simple circulation of commodities begins with a sale and ends with a purchase, while the circulation of money as capital begins with a purchase and ends with a sale. In the one case both the starting-point and the goal are commodities, in the other they are money. In the first form the movement is brought about by the intervention of money, in the second by that of a commodity. In the circulation C M C, the money is in the end converted into a commodity, that serves as a use-value; it is spent once for all. In the inverted form, M C M, on the contrary, the buyer lays out money in order that, as a seller, he may recover money. By the purchase of his commodity he throws money into circulation, in order to withdraw it again by the sale of the same commodity. He lets the money go, but only with the sly intention of getting it back again. The money, therefore, is not spent, it is merely advanced. In the circuit C M C, the same piece of money changes its place twice. The seller gets it from the buyer and pays it away to another seller. The complete circulation, which begins with the receipt, concludes with the payment, of money for commodities. It is the very contrary in the circuit M C M. Here it is not the piece of money that changes its place twice, but the commodity. The buyer takes it from the hands of the seller and passes it into the hands of another buyer. Just as in the simple circulation of commodities the double change of place of the same piece of money effects its passage from one hand into another, so here the double change of place of the same commodity brings about the reflux of the money to its point of departure. Such reflux is not dependent on the commodity being sold for more than was paid for it. This circumstance influences only the amount of the money that comes back. The reflux itself takes place, so soon as the purchased commodity is resold, in other words, so soon as the circuit M C M is completed. We have here, therefore, a palpable difference between the circulation of money as capital, and its circulation as mere money. The circuit C M C comes completely to an end, so soon as the money brought in by the sale of one commodity is abstracted again by the purchase of another. If, nevertheless, there follows a reflux of money to its starting-point, this can only happen through a renewal or repetition of the operation. If I sell a quarter of corn for 3, and with this 3 buy clothes, the money, so far as I am concerned, is spent and done with. It belongs to the clothes merchant. If I now sell a second quarter of corn, money indeed flows back to me, not however as a sequel to the first transaction, but in consequence of its repetition. The money again leaves me, so soon as I complete this second transaction by a fresh purchase. Therefore, in the circuit C M C, the expenditure of money has nothing to do with its reflux. On the other hand, in M C M, the reflux of the money is conditioned by the very mode of its expenditure. Without this reflux, the operation fails, or the process is interrupted and incomplete, owing to the absence of its complementary and final phase, the sale. The circuit C M C starts with one commodity, and finishes with another, which falls out of circulation and into consumption. Consumption, the satisfaction of wants, in one word, use-value, is its end and aim. The circuit M C M, on the contrary, commences with money and ends with money. Its leading motive, and the goal that attracts it, is therefore mere exchange-value. In the simple circulation of commodities, the two extremes of the circuit have the same economic form. They are both commodities, and commodities of equal value. But they are also use-values differing in their qualities, as, for example, corn and clothes. The exchange of products, of the different materials in which the labour of society is embodied, forms here the basis of the movement. It is otherwise in the circulation M C M, which at first sight appears purposeless, because tautological. Both extremes have the same economic form. They are both money, and therefore are not qualitatively different use-values; for money is but the converted form of commodities, in which their particular use-values vanish. To exchange 100 for cotton, and then this same cotton again for 100, is merely a roundabout way of exchanging money for money, the same for the same, and appears to be an operation just as purposeless as it is absurd. One sum of money is distinguishable from another only by its amount. The character and tendency of the process M C M, is therefore not due to any qualitative difference between its extremes, both being money, but solely to their quantitative difference. More money is withdrawn from circulation at the finish than was thrown into it at the start. The cotton that was bought for 100 is perhaps resold for 100 + 10 or 110. The exact form of this process is therefore M C M , where M = M + M = the original sum advanced, plus an increment. This increment or excess over the original value I call surplus-value. The value originally advanced, therefore, not only remains intact while in circulation, but adds to itself a surplus-value or expands itself. It is this movement that converts it into capital. Of course, it is also possible, that in C M C, the two extremes C C, say corn and clothes, may represent different quantities of value. The farmer may sell his corn above its value, or may buy the clothes at less than their value. He may, on the other hand, be done by the clothes merchant. Yet, in the form of circulation now under consideration, such differences in value are purely accidental. The fact that the corn and the clothes are equivalents, does not deprive the process of all meaning, as it does in M C M. The equivalence of their values is rather a necessary condition to its normal course. The repetition or renewal of the act of selling in order to buy, is kept within bounds by the very object it aims at, namely, consumption or the satisfaction of definite wants, an aim that lies altogether outside the sphere of circulation. But when we buy in order to sell, we, on the contrary, begin and end with the same thing, money, exchange-value; and thereby the movement becomes interminable. No doubt, M becomes M + M, 100 become 110. But when viewed in their qualitative aspect alone, 110 are the same as 100, namely money; and considered quantitatively, 110 is, like 100, a sum of definite and limited value. If now, the 110 be spent as money, they cease to play their part. They are no longer capital. Withdrawn from circulation, they become petrified into a hoard, and though they remained in that state till doomsday, not a single farthing would accrue to them. If, then, the expansion of value is once aimed at, there is just the same inducement to augment the value of the 110 as that of the 100; for both are but limited expressions for exchange-value, and therefore both have the same vocation to approach, by quantitative increase, as near as possible to absolute wealth. Momentarily, indeed, the value originally advanced, the 100 is distinguishable from the surplus-value of 10 that is annexed to it during circulation; but the distinction vanishes immediately. At the end of the process, we do not receive with one hand the original 100, and with the other, the surplus-value of 10. We simply get a value of 110, which is in exactly the same condition and fitness for commencing the expanding process, as the original 100 was. Money ends the movement only to begin it again. Therefore, the final result of every separate circuit, in which a purchase and consequent sale are completed, forms of itself the starting-point of a new circuit. The simple circulation of commodities - selling in order to buy - is a means of carrying out a purpose unconnected with circulation, namely, the appropriation of use-values, the satisfaction of wants. The circulation of money as capital is, on the contrary, an end in itself, for the expansion of value takes place only within this constantly renewed movement. The circulation of capital has therefore no limits. As the conscious representative of this movement, the possessor of money becomes a capitalist. His person, or rather his pocket, is the point from which the money starts and to which it returns. The expansion of value, which is the objective basis or main-spring of the circulation M C M, becomes his subjective aim, and it is only in so far as the appropriation of ever more and more wealth in the abstract becomes the sole motive of his operations, that he functions as a capitalist, that is, as capital personified and endowed with consciousness and a will. Use-values must therefore never be looked upon as the real aim of the capitalist; neither must the profit on any single transaction. The restless never-ending process of profit-making alone is what he aims at. This boundless greed after riches, this passionate chase after exchange-value , is common to the capitalist and the miser; but while the miser is merely a capitalist gone mad, the capitalist is a rational miser. The never-ending augmentation of exchange-value, which the miser strives after, by seeking to save his money from circulation, is attained by the more acute capitalist, by constantly throwing it afresh into circulation. The independent form, i.e., the money-form, which the value of commodities assumes in the case of simple circulation, serves only one purpose, namely, their exchange, and vanishes in the final result of the movement. On the other hand, in the circulation M C M, both the money and the commodity represent only different modes of existence of value itself, the money its general mode, and the commodity its particular, or, so to say, disguised mode. It is constantly changing from one form to the other without thereby becoming lost, and thus assumes an automatically active character. If now we take in turn each of the two different forms which self-expanding value successively assumes in the course of its life, we then arrive at these two propositions: Capital is money: Capital is commodities. In truth, however, value is here the active factor in a process, in which, while constantly assuming the form in turn of money and commodities, it at the same time changes in magnitude, differentiates itself by throwing off surplus-value from itself; the original value, in other words, expands spontaneously. For the movement, in the course of which it adds surplus-value, is its own movement, its expansion, therefore, is automatic expansion. Because it is value, it has acquired the occult quality of being able to add value to itself. It brings forth living offspring, or, at the least, lays golden eggs. Value, therefore, being the active factor in such a process, and assuming at one time the form of money, at another that of commodities, but through all these changes preserving itself and expanding, it requires some independent form, by means of which its identity may at any time be established. And this form it possesses only in the shape of money. It is under the form of money that value begins and ends, and begins again, every act of its own spontaneous generation. It began by being 100, it is now 110, and so on. But the money itself is only one of the two forms of value. Unless it takes the form of some commodity, it does not become capital. There is here no antagonism, as in the case of hoarding, between the money and commodities. The capitalist knows that all commodities, however scurvy they may look, or however badly they may smell, are in faith and in truth money, inwardly circumcised Jews, and what is more, a wonderful means whereby out of money to make more money. In simple circulation, C M C, the value of commodities attained at the most a form independent of their use-values, i.e., the form of money; but that same value now in the circulation M C M, or the circulation of capital, suddenly presents itself as an independent substance, endowed with a motion of its own, passing through a life-process of its own, in which money and commodities are mere forms which it assumes and casts off in turn. Nay, more: instead of simply representing the relations of commodities, it enters now, so to say, into private relations with itself. It differentiates itself as original value from itself as surplus-value; as the father differentiates himself from himself qua the son, yet both are one and of one age: for only by the surplus-value of 10 does the 100 originally advanced become capital, and so soon as this takes place, so soon as the son, and by the son, the father, is begotten, so soon does their difference vanish, and they again become one, 110. Value therefore now becomes value in process, money in process, and, as such, capital. It comes out of circulation, enters into it again, preserves and multiplies itself within its circuit, comes back out of it with expanded bulk, and begins the same round ever afresh. M M , money which begets money, such is the description of Capital from the mouths of its first interpreters, the Mercantilists. Buying in order to sell, or, more accurately, buying in order to sell dearer, M C M , appears certainly to be a form peculiar to one kind of capital alone, namely, merchants capital. But industrial capital too is money, that is changed into commodities, and by the sale of these commodities, is re-converted into more money. The events that take place outside the sphere of circulation, in the interval between the buying and selling, do not affect the form of this movement. Lastly, in the case of interest-bearing capital, the circulation M C M appears abridged. We have its result without the intermediate stage, in the form M M , en style lapidaire so to say, money that is worth more money, value that is greater than itself. M C M is therefore in reality the general formula of capital as it appears prima facie within the sphere of circulation.

Economic Manuscripts: Capital Vol. I - Chapter Four

https://www.marxists.org/archive/marx/works/1867-c1/ch04.htm

The form which circulation takes when money becomes capital, is opposed to all the laws we have hitherto investigated bearing on the nature of commodities, value and money, and even of circulation itself. What distinguishes this form from that of the simple circulation of commodities, is the inverted order of succession of the two antithetical processes, sale and purchase. How can this purely formal distinction between these processes change their character as it were by magic? But that is not all. This inversion has no existence for two out of the three persons who transact business together. As capitalist, I buy commodities from A and sell them again to B, but as a simple owner of commodities, I sell them to B and then purchase fresh ones from A. A and B see no difference between the two sets of transactions. They are merely buyers or sellers. And I on each occasion meet them as a mere owner of either money or commodities, as a buyer or a seller, and, what is more, in both sets of transactions, I am opposed to A only as a buyer and to B only as a seller, to the one only as money, to the other only as commodities, and to neither of them as capital or a capitalist, or as representative of anything that is more than money or commodities, or that can produce any effect beyond what money and commodities can. For me the purchase from A and the sale to B are part of a series. But the connexion between the two acts exists for me alone. A does not trouble himself about my transaction with B, nor does B about my business with A. And if I offered to explain to them the meritorious nature of my action in inverting the order of succession, they would probably point out to me that I was mistaken as to that order of succession, and that the whole transaction, instead of beginning with a purchase and ending with a sale, began, on the contrary, with a sale and was concluded with a purchase. In truth, my first act, the purchase, was from the standpoint of A, a sale, and my second act, the sale, was from the standpoint of B, a purchase. Not content with that, A and B would declare that the whole series was superfluous and nothing but Hokus Pokus; that for the future A would buy direct from B, and B sell direct to A. Thus the whole transaction would be reduced to a single act forming an isolated, non-complemented phase in the ordinary circulation of commodities, a mere sale from A s point of view, and from B s, a mere purchase. The inversion, therefore, of the order of succession, does not take us outside the sphere of the simple circulation of commodities, and we must rather look, whether there is in this simple circulation anything permitting an expansion of the value that enters into circulation, and, consequently, a creation of surplus-value. Let us take the process of circulation in a form under which it presents itself as a simple and direct exchange of commodities. This is always the case when two owners of commodities buy from each other, and on the settling day the amounts mutually owing are equal and cancel each other. The money in this case is money of account and serves to express the value of the commodities by their prices, but is not, itself, in the shape of hard cash, confronted with them. So far as regards use-values, it is clear that both parties may gain some advantage. Both part with goods that, as use-values, are of no service to them, and receive others that they can make use of. And there may also be a further gain. A, who sells wine and buys corn, possibly produces more wine, with given labour-time, than farmer B could, and B on the other hand, more corn than wine-grower A could. A, therefore, may get, for the same exchange-value, more corn, and B more wine, than each would respectively get without any exchange by producing his own corn and wine. With reference, therefore, to use-value, there is good ground for saying that exchange is a transaction by which both sides gain. It is otherwise with exchange-value. A man who has plenty of wine and no corn treats with a man who has plenty of corn and no wine; an exchange takes place between them of corn to the value of 50, for wine of the same value.This act produces no increase of exchange-value either for the one or the other; for each of them already possessed, before the exchange, a value equal to that which he acquired by means of that operation. The result is not altered by introducing money, as a medium of circulation, between the commodities, and making the sale and the purchase two distinct acts. The value of a commodity is expressed in its price before it goes into circulation, and is therefore a precedent condition of circulation, not its result. Abstractedly considered, that is, apart from circumstances not immediately flowing from the laws of the simple circulation of commodities, there is in an exchange nothing (if we except the replacing of one use-value by another) but a metamorphosis, a mere change in the form of the commodity. The same exchange-value, i.e., the same quantity of incorporated social labour, remains throughout in the hands of the owner of the commodity, first in the shape of his own commodity, then in the form of the money for which he exchanged it, and lastly, in the shape of the commodity he buys with that money. This change of form does not imply a change in the magnitude of the value. But the change, which the value of the commodity undergoes in this process, is limited to a change in its money-form. This form exists first as the price of the commodity offered for sale, then as an actual sum of money, which, however, was already expressed in the price, and lastly, as the price of an equivalent commodity. This change of form no more implies, taken alone, a change in the quantity of value, than does the change of a 5 note into sovereigns, half sovereigns and shillings. So far therefore as the circulation of commodities effects a change in the form alone of their values, and is free from disturbing influences, it must be the exchange of equivalents. Little as Vulgar-Economy knows about the nature of value, yet whenever it wishes to consider the phenomena of circulation in their purity, it assumes that supply and demand are equal, which amounts to this, that their effect is nil. If therefore, as regards the use-values exchanged, both buyer and seller may possibly gain something, this is not the case as regards the exchange-values. Here we must rather say, Where equality exists there can be no gain. It is true, commodities may be sold at prices deviating from their values, but these deviations are to be considered as infractions of the laws of the exchange of commodities , which in its normal state is an exchange of equivalents, consequently, no method for increasing value. Hence, we see that behind all attempts to represent the circulation of commodities as a source of surplus-value, there lurks a quid pro quo, a mixing up of use-value and exchange-value. For instance, Condillac says: It is not true that on an exchange of commodities we give value for value. On the contrary, each of the two contracting parties in every case, gives a less for a greater value. ... If we really exchanged equal values, neither party could make a profit. And yet, they both gain, or ought to gain. Why? The value of a thing consists solely in its relation to our wants. What is more to the one is less to the other, and vice vers . ... It is not to be assumed that we offer for sale articles required for our own consumption. ... We wish to part with a useless thing, in order to get one that we need; we want to give less for more. ... It was natural to think that, in an exchange, value was given for value, whenever each of the articles exchanged was of equal value with the same quantity of gold. ... But there is another point to be considered in our calculation. The question is, whether we both exchange something superfluous for something necessary. We see in this passage, how Condillac not only confuses use-value with exchange-value, but in a really childish manner assumes, that in a society, in which the production of commodities is well developed, each producer produces his own means of subsistence, and throws into circulation only the excess over his own requirements. Still, Condillac s argument is frequently used by modern economists, more especially when the point is to show, that the exchange of commodities in its developed form, commerce, is productive of surplus-value. For instance, Commerce ... adds value to products, for the same products in the hands of consumers, are worth more than in the hands of producers, and it may strictly be considered an act of production. But commodities are not paid for twice over, once on account of their use-value, and again on account of their value. And though the use-value of a commodity is more serviceable to the buyer than to the seller, its money-form is more serviceable to the seller. Would he otherwise sell it? We might therefore just as well say that the buyer performs "strictly an act of production, by converting stockings, for example, into money. If commodities, or commodities and money, of equal exchange-value, and consequently equivalents, are exchanged, it is plain that no one abstracts more value from, than he throws into, circulation. There is no creation of surplus-value. And, in its normal form, the circulation of commodities demands the exchange of equivalents. But in actual practice, the process does not retain its normal form. Let us, therefore, assume an exchange of non-equivalents. In any case the market for commodities is only frequented by owners of commodities, and the power which these persons exercise over each other, is no other than the power of their commodities. The material variety of these commodities is the material incentive to the act of exchange, and makes buyers and sellers mutually dependent, because none of them possesses the object of his own wants, and each holds in his hand the object of another s wants. Besides these material differences of their use-values, there is only one other difference between commodities, namely, that between their bodily form and the form into which they are converted by sale, the difference between commodities and money. And consequently the owners of commodities are distinguishable only as sellers, those who own commodities, and buyers, those who own money. Suppose then, that by some inexplicable privilege, the seller is enabled to sell his commodities above their value, what is worth 100 for 110, in which case the price is nominally raised 10%. The seller therefore pockets a surplus-value of 10. But after he has sold he becomes a buyer. A third owner of commodities comes to him now as seller, who in this capacity also enjoys the privilege of selling his commodities 10% too dear. Our friend gained 10 as a seller only to lose it again as a buyer. The net result is, that all owners of commodities sell their goods to one another at 10% above their value, which comes precisely to the same as if they sold them at their true value. Such a general and nominal rise of prices has the same effect as if the values had been expressed in weight of silver instead of in weight of gold. The nominal prices of commodities would rise, but the real relation between their values would remain unchanged. Let us make the opposite assumption, that the buyer has the privilege of purchasing commodities under their value. In this case it is no longer necessary to bear in mind that he in his turn will become a seller. He was so before he became buyer; he had already lost 10% in selling before he gained 10% as buyer. Everything is just as it was. The creation of surplus-value, and therefore the conversion of money into capital, can consequently be explained neither on the assumption that commodities are sold above their value, nor that they are bought below their value. The problem is in no way simplified by introducing irrelevant matters after the manner of Col. Torrens: Effectual demand consists in the power and inclination (!), on the part of consumers, to give for commodities, either by immediate or circuitous barter, some greater portion of ... capital than their production costs. In relation to circulation, producers and consumers meet only as buyers and sellers. To assert that the surplus-value acquired by the producer has its origin in the fact that consumers pay for commodities more than their value, is only to say in other words: The owner of commodities possesses, as a seller, the privilege of selling too dear. The seller has himself produced the commodities or represents their producer, but the buyer has to no less extent produced the commodities represented by his money, or represents their producer. The distinction between them is, that one buys and the other sells. The fact that the owner of the commodities, under the designation of producer, sells them over their value, and under the designation of consumer, pays too much for them, does not carry us a single step further. To be consistent therefore, the upholders of the delusion that surplus-value has its origin in a nominal rise of prices or in the privilege which the seller has of selling too dear, must assume the existence of a class that only buys and does not sell, i.e., only consumes and does not produce. The existence of such a class is inexplicable from the standpoint we have so far reached, viz., that of simple circulation. But let us anticipate. The money with which such a class is constantly making purchases, must constantly flow into their pockets, without any exchange, gratis, by might or right, from the pockets of the commodity-owners themselves. To sell commodities above their value to such a class, is only to crib back again a part of the money previously given to it. The towns of Asia Minor thus paid a yearly money tribute to ancient Rome. With this money Rome purchased from them commodities, and purchased them too dear. The provincials cheated the Romans, and thus got back from their conquerors, in the course of trade, a portion of the tribute. Yet, for all that, the conquered were the really cheated. Their goods were still paid for with their own money. That is not the way to get rich or to create surplus-value. Let us therefore keep within the bounds of exchange where sellers are also buyers, and buyers, sellers. Our difficulty may perhaps have arisen from treating the actors as personifications instead of as individuals. A may be clever enough to get the advantage of B or C without their being able to retaliate. A sells wine worth 40 to B, and obtains from him in exchange corn to the value of 50. A has converted his 40 into 50, has made more money out of less, and has converted his commodities into capital. Let us examine this a little more closely. Before the exchange we had 40 worth of wine in the hands of A, and 50 worth of corn in those of B, a total value of 90. After the exchange we have still the same total value of 90. The value in circulation has not increased by one iota, it is only distributed differently between A and B. What is a loss of value to B is surplus-value to A; what is minus to one is plus to the other. The same change would have taken place, if A, without the formality of an exchange, had directly stolen the 10 from B. The sum of the values in circulation can clearly not be augmented by any change in their distribution, any more than the quantity of the precious metals in a country by a Jew selling a Queen Anne s farthing for a guinea. The capitalist class, as a whole, in any country, cannot over-reach themselves. Turn and twist then as we may, the fact remains unaltered. If equivalents are exchanged, no surplus-value results, and if non-equivalents are exchanged, still no surplus-value. Circulation, or the exchange of commodities, begets no value. The reason is now therefore plain why, in analysing the standard form of capital, the form under which it determines the economic organisation of modern society, we entirely left out of consideration its most popular, and, so to say, antediluvian forms, merchants capital and money-lenders capital. The circuit M-C-M, buying in order to sell dearer, is seen most clearly in genuine merchants capital. But the movement takes place entirely within the sphere of circulation. Since, however, it is impossible, by circulation alone, to account for the conversion of money into capital, for the formation of surplus-value, it would appear, that merchants capital is an impossibility, so long as equivalents are exchanged; that, therefore, it can only have its origin in the two-fold advantage gained, over both the selling and the buying producers, by the merchant who parasitically shoves himself in between them. It is in this sense that Franklin says, war is robbery, commerce is generally cheating. If the transformation of merchants money into capital is to be explained otherwise than by the producers being simply cheated, a long series of intermediate steps would be necessary, which, at present, when the simple circulation of commodities forms our only assumption, are entirely wanting. What we have said with reference to merchants capital, applies still more to money-lenders capital. In merchants capital, the two extremes, the money that is thrown upon the market, and the augmented money that is withdrawn from the market, are at least connected by a purchase and a sale, in other words by the movement of the circulation. In money-lenders capital the form M-C-M is reduced to the two extremes without a mean, M-M , money exchanged for more money, a form that is incompatible with the nature of money, and therefore remains inexplicable from the standpoint of the circulation of commodities. Hence Aristotle: since chrematistic is a double science, one part belonging to commerce, the other to economic, the latter being necessary and praiseworthy, the former based on circulation and with justice disapproved (for it is not based on Nature, but on mutual cheating), therefore the usurer is most rightly hated, because money itself is the source of his gain, and is not used for the purposes for which it was invented. For it originated for the exchange of commodities, but interest makes out of money, more money. Hence its name ([greek: tokos] interest and offspring). For the begotten are like those who beget them. But interest is money of money, so that of all modes of making a living, this is the most contrary to Nature. In the course of our investigation, we shall find that both merchants capital and interest-bearing capital are derivative forms, and at the same time it will become clear, why these two forms appear in the course of history before the modern standard form of capital. We have shown that surplus-value cannot be created by circulation, and, therefore, that in its formation, something must take place in the background, which is not apparent in the circulation itself. But can surplus-value possibly originate anywhere else than in circulation, which is the sum total of all the mutual relations of commodity-owners, as far as they are determined by their commodities? Apart from circulation, the commodity-owner is in relation only with his own commodity. So far as regards value, that relation is limited to this, that the commodity contains a quantity of his own labour, that quantity being measured by a definite social standard. This quantity is expressed by the value of the commodity, and since the value is reckoned in money of account, this quantity is also expressed by the price, which we will suppose to be 10. But his labour is not represented both by the value of the commodity, and by a surplus over that value, not by a price of 10 that is also a price of 11, not by a value that is greater than itself. The commodity owner can, by his labour, create value, but not self-expanding value. He can increase the value of his commodity, by adding fresh labour, and therefore more value to the value in hand, by making, for instance, leather into boots. The same material has now more value, because it contains a greater quantity of labour. The boots have therefore more value than the leather, but the value of the leather remains what it was; it has not expanded itself, has not, during the making of the boots, annexed surplus-value. It is therefore impossible that outside the sphere of circulation, a producer of commodities can, without coming into contact with other commodity-owners, expand value, and consequently convert money or commodities into capital. It is therefore impossible for capital to be produced by circulation, and it is equally impossible for it to originate apart from circulation. It must have its origin both in circulation and yet not in circulation. We have, therefore, got a double result. The conversion of money into capital has to be explained on the basis of the laws that regulate the exchange of commodities, in such a way that the starting-point is the exchange of equivalents. Our friend, Moneybags, who as yet is only an embryo capitalist, must buy his commodities at their value, must sell them at their value, and yet at the end of the process must withdraw more value from circulation than he threw into it at starting. His development into a full-grown capitalist must take place, both within the sphere of circulation and without it. These are the conditions of the problem. Hic Rhodus, hic salta!25]

Economic Manuscripts: Capital Vol. I - Chapter Five

https://www.marxists.org/archive/marx/works/1867-c1/ch05.htm

The change of value that occurs in the case of money intended to be converted into capital, cannot take place in the money itself, since in its function of means of purchase and of payment, it does no more than realise the price of the commodity it buys or pays for; and, as hard cash, it is value petrified, never varying. Just as little can it originate in the second act of circulation, the re-sale of the commodity, which does no more than transform the article from its bodily form back again into its money-form. The change must, therefore, take place in the commodity bought by the first act, M-C, but not in its value, for equivalents are exchanged, and the commodity is paid for at its full value. We are, therefore, forced to the conclusion that the change originates in the use-value, as such, of the commodity, i.e., in its consumption. In order to be able to extract value from the consumption of a commodity, our friend, Moneybags, must be so lucky as to find, within the sphere of circulation, in the market, a commodity, whose use-value possesses the peculiar property of being a source of value, whose actual consumption, therefore, is itself an embodiment of labour, and, consequently, a creation of value. The possessor of money does find on the market such a special commodity in capacity for labour or labour-power. By labour-power or capacity for labour is to be understood the aggregate of those mental and physical capabilities existing in a human being, which he exercises whenever he produces a use-value of any description. But in order that our owner of money may be able to find labour-power offered for sale as a commodity, various conditions must first be fulfilled. The exchange of commodities of itself implies no other relations of dependence than those which result from its own nature. On this assumption, labour-power can appear upon the market as a commodity, only if, and so far as, its possessor, the individual whose labour-power it is, offers it for sale, or sells it, as a commodity. In order that he may be able to do this, he must have it at his disposal, must be the untrammelled owner of his capacity for labour, i.e., of his person. He and the owner of money meet in the market, and deal with each other as on the basis of equal rights, with this difference alone, that one is buyer, the other seller; both, therefore, equal in the eyes of the law. The continuance of this relation demands that the owner of the labour-power should sell it only for a definite period, for if he were to sell it rump and stump, once for all, he would be selling himself, converting himself from a free man into a slave, from an owner of a commodity into a commodity. He must constantly look upon his labour-power as his own property, his own commodity, and this he can only do by placing it at the disposal of the buyer temporarily, for a definite period of time. By this means alone can he avoid renouncing his rights of ownership over it. The second essential condition to the owner of money finding labour-power in the market as a commodity is this that the labourer instead of being in the position to sell commodities in which his labour is incorporated, must be obliged to offer for sale as a commodity that very labour-power, which exists only in his living self. In order that a man may be able to sell commodities other than labour-power, he must of course have the means of production, as raw material, implements, &c. No boots can be made without leather. He requires also the means of subsistence. Nobody not even a musician of the future can live upon future products, or upon use-values in an unfinished state; and ever since the first moment of his appearance on the world s stage, man always has been, and must still be a consumer, both before and while he is producing. In a society where all products assume the form of commodities, these commodities must be sold after they have been produced, it is only after their sale that they can serve in satisfying the requirements of their producer. The time necessary for their sale is superadded to that necessary for their production. For the conversion of his money into capital, therefore, the owner of money must meet in the market with the free labourer, free in the double sense, that as a free man he can dispose of his labour-power as his own commodity, and that on the other hand he has no other commodity for sale, is short of everything necessary for the realisation of his labour-power. The question why this free labourer confronts him in the market, has no interest for the owner of money, who regards the labour-market as a branch of the general market for commodities. And for the present it interests us just as little. We cling to the fact theoretically, as he does practically. One thing, however, is clear Nature does not produce on the one side owners of money or commodities, and on the other men possessing nothing but their own labour-power. This relation has no natural basis, neither is its social basis one that is common to all historical periods. It is clearly the result of a past historical development, the product of many economic revolutions, of the extinction of a whole series of older forms of social production. So, too, the economic categories, already discussed by us, bear the stamp of history. Definite historical conditions are necessary that a product may become a commodity. It must not be produced as the immediate means of subsistence of the producer himself. Had we gone further, and inquired under what circumstances all, or even the majority of products take the form of commodities, we should have found that this can only happen with production of a very specific kind, capitalist production. Such an inquiry, however, would have been foreign to the analysis of commodities. Production and circulation of commodities can take place, although the great mass of the objects produced are intended for the immediate requirements of their producers, are not turned into commodities, and consequently social production is not yet by a long way dominated in its length and breadth by exchange-value. The appearance of products as commodities pre-supposes such a development of the social division of labour, that the separation of use-value from exchange-value, a separation which first begins with barter, must already have been completed. But such a degree of development is common to many forms of society, which in other respects present the most varying historical features. On the other hand, if we consider money, its existence implies a definite stage in the exchange of commodities. The particular functions of money which it performs, either as the mere equivalent of commodities, or as means of circulation, or means of payment, as hoard or as universal money, point, according to the extent and relative preponderance of the one function or the other, to very different stages in the process of social production. Yet we know by experience that a circulation of commodities relatively primitive, suffices for the production of all these forms. Otherwise with capital. The historical conditions of its existence are by no means given with the mere circulation of money and commodities. It can spring into life, only when the owner of the means of production and subsistence meets in the market with the free labourer selling his labour-power. And this one historical condition comprises a world s history. Capital, therefore, announces from its first appearance a new epoch in the process of social production. We must now examine more closely this peculiar commodity, labour-power. Like all others it has a value. How is that value determined? The value of labour-power is determined, as in the case of every other commodity, by the labour-time necessary for the production, and consequently also the reproduction, of this special article. So far as it has value, it represents no more than a definite quantity of the average labour of society incorporated in it. Labour-power exists only as a capacity, or power of the living individual. Its production consequently pre-supposes his existence. Given the individual, the production of labour-power consists in his reproduction of himself or his maintenance. For his maintenance he requires a given quantity of the means of subsistence. Therefore the labour-time requisite for the production of labour-power reduces itself to that necessary for the production of those means of subsistence; in other words, the value of labour-power is the value of the means of subsistence necessary for the maintenance of the labourer. Labour-power, however, becomes a reality only by its exercise; it sets itself in action only by working. But thereby a definite quantity of human muscle, nerve, brain, &c., is wasted, and these require to be restored. This increased expenditure demands a larger income. If the owner of labour-power works to-day, to-morrow he must again be able to repeat the same process in the same conditions as regards health and strength. His means of subsistence must therefore be sufficient to maintain him in his normal state as a labouring individual. His natural wants, such as food, clothing, fuel, and housing, vary according to the climatic and other physical conditions of his country. On the other hand, the number and extent of his so-called necessary wants, as also the modes of satisfying them, are themselves the product of historical development, and depend therefore to a great extent on the degree of civilisation of a country, more particularly on the conditions under which, and consequently on the habits and degree of comfort in which, the class of free labourers has been formed. In contradistinction therefore to the case of other commodities, there enters into the determination of the value of labour-power a historical and moral element. Nevertheless, in a given country, at a given period, the average quantity of the means of subsistence necessary for the labourer is practically known. The owner of labour-power is mortal. If then his appearance in the market is to be continuous, and the continuous conversion of money into capital assumes this, the seller of labour-power must perpetuate himself, in the way that every living individual perpetuates himself, by procreation. The labour-power withdrawn from the market by wear and tear and death, must be continually replaced by, at the very least, an equal amount of fresh labour-power. Hence the sum of the means of subsistence necessary for the production of labour-power must include the means necessary for the labourer s substitutes, i.e., his children, in order that this race of peculiar commodity-owners may perpetuate its appearance in the market. In order to modify the human organism, so that it may acquire skill and handiness in a given branch of industry, and become labour-power of a special kind, a special education or training is requisite, and this, on its part, costs an equivalent in commodities of a greater or less amount. This amount varies according to the more or less complicated character of the labour-power. The expenses of this education (excessively small in the case of ordinary labour-power), enter pro tanto into the total value spent in its production. The value of labour-power resolves itself into the value of a definite quantity of the means of subsistence. It therefore varies with the value of these means or with the quantity of labour requisite for their production. Some of the means of subsistence, such as food and fuel, are consumed daily, and a fresh supply must be provided daily. Others such as clothes and furniture last for longer periods and require to be replaced only at longer intervals. One article must be bought or paid for daily, another weekly, another quarterly, and so on. But in whatever way the sum total of these outlays may be spread over the year, they must be covered by the average income, taking one day with another. If the total of the commodities required daily for the production of labour-power = A, and those required weekly = B, and those required quarterly = C, and so on, the daily average of these commodities = (365A + 52B + 4C + &c) / 365. Suppose that in this mass of commodities requisite for the average day there are embodied 6 hours of social labour, then there is incorporated daily in labour-power half a day s average social labour, in other words, half a day s labour is requisite for the daily production of labour-power. This quantity of labour forms the value of a day s labour-power or the value of the labour-power daily reproduced. If half a day s average social labour is incorporated in three shillings, then three shillings is the price corresponding to the value of a day s labour-power. If its owner therefore offers it for sale at three shillings a day, its selling price is equal to its value, and according to our supposition, our friend Moneybags, who is intent upon converting his three shillings into capital, pays this value. The minimum limit of the value of labour-power is determined by the value of the commodities, without the daily supply of which the labourer cannot renew his vital energy, consequently by the value of those means of subsistence that are physically indispensable. If the price of labour-power fall to this minimum, it falls below its value, since under such circumstances it can be maintained and developed only in a crippled state. But the value of every commodity is determined by the labour-time requisite to turn it out so as to be of normal quality. It is a very cheap sort of sentimentality which declares this method of determining the value of labour-power, a method prescribed by the very nature of the case, to be a brutal method, and which wails with Rossi that, To comprehend capacity for labour (puissance de travail) at the same time that we make abstraction from the means of subsistence of the labourers during the process of production, is to comprehend a phantom ( tre de raison). When we speak of labour, or capacity for labour, we speak at the same time of the labourer and his means of subsistence, of labourer and wages. When we speak of capacity for labour, we do not speak of labour, any more than when we speak of capacity for digestion, we speak of digestion. The latter process requires something more than a good stomach. When we speak of capacity for labour, we do not abstract from the necessary means of subsistence. On the contrary, their value is expressed in its value. If his capacity for labour remains unsold, the labourer derives no benefit from it, but rather he will feel it to be a cruel nature-imposed necessity that this capacity has cost for its production a definite amount of the means of subsistence and that it will continue to do so for its reproduction. He will then agree with Sismondi: that capacity for labour ... is nothing unless it is sold. One consequence of the peculiar nature of labour-power as a commodity is, that its use-value does not, on the conclusion of the contract between the buyer and seller, immediately pass into the hands of the former. Its value, like that of every other commodity, is already fixed before it goes into circulation, since a definite quantity of social labour has been spent upon it; but its use-value consists in the subsequent exercise of its force. The alienation of labour-power and its actual appropriation by the buyer, its employment as a use-value, are separated by an interval of time. But in those cases in which the formal alienation by sale of the use-value of a commodity, is not simultaneous with its actual delivery to the buyer, the money of the latter usually functions as means of payment. In every country in which the capitalist mode of production reigns, it is the custom not to pay for labour-power before it has been exercised for the period fixed by the contract, as for example, the end of each week. In all cases, therefore, the use-value of the labour-power is advanced to the capitalist: the labourer allows the buyer to consume it before he receives payment of the price; he everywhere gives credit to the capitalist. That this credit is no mere fiction, is shown not only by the occasional loss of wages on the bankruptcy of the capitalist, but also by a series of more enduring consequences. Nevertheless, whether money serves as a means of purchase or as a means of payment, this makes no alteration in the nature of the exchange of commodities. The price of the labour-power is fixed by the contract, although it is not realised till later, like the rent of a house. The labour-power is sold, although it is only paid for at a later period. It will, therefore, be useful, for a clear comprehension of the relation of the parties, to assume provisionally, that the possessor of labour-power, on the occasion of each sale, immediately receives the price stipulated to be paid for it. We now know how the value paid by the purchaser to the possessor of this peculiar commodity, labour-power, is determined. The use-value which the former gets in exchange, manifests itself only in the actual utilisation, in the consumption of the labour-power. The money-owner buys everything necessary for this purpose, such as raw material, in the market, and pays for it at its full value. The consumption of labour-power is at one and the same time the production of commodities and of surplus-value. The consumption of labour-power is completed, as in the case of every other commodity, outside the limits of the market or of the sphere of circulation. Accompanied by Mr. Moneybags and by the possessor of labour-power, we therefore take leave for a time of this noisy sphere, where everything takes place on the surface and in view of all men, and follow them both into the hidden abode of production, on whose threshold there stares us in the face No admittance except on business. Here we shall see, not only how capital produces, but how capital is produced. We shall at last force the secret of profit making. This sphere that we are deserting, within whose boundaries the sale and purchase of labour-power goes on, is in fact a very Eden of the innate rights of man. There alone rule Freedom, Equality, Property and Bentham. Freedom, because both buyer and seller of a commodity, say of labour-power, are constrained only by their own free will. They contract as free agents, and the agreement they come to, is but the form in which they give legal expression to their common will. Equality, because each enters into relation with the other, as with a simple owner of commodities, and they exchange equivalent for equivalent. Property, because each disposes only of what is his own. And Bentham, because each looks only to himself. The only force that brings them together and puts them in relation with each other, is the selfishness, the gain and the private interests of each. Each looks to himself only, and no one troubles himself about the rest, and just because they do so, do they all, in accordance with the pre-established harmony of things, or under the auspices of an all-shrewd providence, work together to their mutual advantage, for the common weal and in the interest of all. On leaving this sphere of simple circulation or of exchange of commodities, which furnishes the Free-trader Vulgaris with his views and ideas, and with the standard by which he judges a society based on capital and wages, we think we can perceive a change in the physiognomy of our dramatis personae. He, who before was the money-owner, now strides in front as capitalist; the possessor of labour-power follows as his labourer. The one with an air of importance, smirking, intent on business; the other, timid and holding back, like one who is bringing his own hide to market and has nothing to expect but a hiding.

Economic Manuscripts: Capital Vol. I - Chapter Six

https://www.marxists.org/archive/marx/works/1867-c1/ch06.htm

The capitalist buys labour-power in order to use it; and labour-power in use is labour itself. The purchaser of labour-power consumes it by setting the seller of it to work. By working, the latter becomes actually, what before he only was potentially, labour-power in action, a labourer. In order that his labour may re-appear in a commodity, he must, before all things, expend it on something useful, on something capable of satisfying a want of some sort. Hence, what the capitalist sets the labourer to produce, is a particular use-value, a specified article. The fact that the production of use-values, or goods, is carried on under the control of a capitalist and on his behalf, does not alter the general character of that production. We shall, therefore, in the first place, have to consider the labour-process independently of the particular form it assumes under given social conditions. Labour is, in the first place, a process in which both man and Nature participate, and in which man of his own accord starts, regulates, and controls the material re-actions between himself and Nature. He opposes himself to Nature as one of her own forces, setting in motion arms and legs, head and hands, the natural forces of his body, in order to appropriate Nature s productions in a form adapted to his own wants. By thus acting on the external world and changing it, he at the same time changes his own nature. He develops his slumbering powers and compels them to act in obedience to his sway. We are not now dealing with those primitive instinctive forms of labour that remind us of the mere animal. An immeasurable interval of time separates the state of things in which a man brings his labour-power to market for sale as a commodity, from that state in which human labour was still in its first instinctive stage. We pre-suppose labour in a form that stamps it as exclusively human. A spider conducts operations that resemble those of a weaver, and a bee puts to shame many an architect in the construction of her cells. But what distinguishes the worst architect from the best of bees is this, that the architect raises his structure in imagination before he erects it in reality. At the end of every labour-process, we get a result that already existed in the imagination of the labourer at its commencement. He not only effects a change of form in the material on which he works, but he also realises a purpose of his own that gives the law to his modus operandi, and to which he must subordinate his will. And this subordination is no mere momentary act. Besides the exertion of the bodily organs, the process demands that, during the whole operation, the workman s will be steadily in consonance with his purpose. This means close attention. The less he is attracted by the nature of the work, and the mode in which it is carried on, and the less, therefore, he enjoys it as something which gives play to his bodily and mental powers, the more close his attention is forced to be. The elementary factors of the labour-process are 1, the personal activity of man, i.e., work itself, 2, the subject of that work, and 3, its instruments. The soil (and this, economically speaking, includes water) in the virgin state in which it supplies man with necessaries or the means of subsistence ready to hand, exists independently of him, and is the universal subject of human labour. All those things which labour merely separates from immediate connexion with their environment, are subjects of labour spontaneously provided by Nature. Such are fish which we catch and take from their element, water, timber which we fell in the virgin forest, and ores which we extract from their veins. If, on the other hand, the subject of labour has, so to say, been filtered through previous labour, we call it raw material; such is ore already extracted and ready for washing. All raw material is the subject of labour, but not every subject of labour is raw material: it can only become so, after it has undergone some alteration by means of labour. An instrument of labour is a thing, or a complex of things, which the labourer interposes between himself and the subject of his labour, and which serves as the conductor of his activity. He makes use of the mechanical, physical, and chemical properties of some substances in order to make other substances subservient to his aims. Leaving out of consideration such ready-made means of subsistence as fruits, in gathering which a man s own limbs serve as the instruments of his labour, the first thing of which the labourer possesses himself is not the subject of labour but its instrument. Thus Nature becomes one of the organs of his activity, one that he annexes to his own bodily organs, adding stature to himself in spite of the Bible. As the earth is his original larder, so too it is his original tool house. It supplies him, for instance, with stones for throwing, grinding, pressing, cutting, &c. The earth itself is an instrument of labour, but when used as such in agriculture implies a whole series of other instruments and a comparatively high development of labour. No sooner does labour undergo the least development, than it requires specially prepared instruments. Thus in the oldest caves we find stone implements and weapons. In the earliest period of human history domesticated animals, i.e., animals which have been bred for the purpose, and have undergone modifications by means of labour, play the chief part as instruments of labour along with specially prepared stones, wood, bones, and shells. The use and fabrication of instruments of labour, although existing in the germ among certain species of animals, is specifically characteristic of the human labour-process, and Franklin therefore defines man as a tool-making animal. Relics of bygone instruments of labour possess the same importance for the investigation of extinct economic forms of society, as do fossil bones for the determination of extinct species of animals. It is not the articles made, but how they are made, and by what instruments, that enables us to distinguish different economic epochs. Instruments of labour not only supply a standard of the degree of development to which human labour has attained, but they are also indicators of the social conditions under which that labour is carried on. Among the instruments of labour, those of a mechanical nature, which, taken as a whole, we may call the bone and muscles of production, offer much more decided characteristics of a given epoch of production, than those which, like pipes, tubs, baskets, jars, &c., serve only to hold the materials for labour, which latter class, we may in a general way, call the vascular system of production. The latter first begins to play an important part in the chemical industries. In a wider sense we may include among the instruments of labour, in addition to those things that are used for directly transferring labour to its subject, and which therefore, in one way or another, serve as conductors of activity, all such objects as are necessary for carrying on the labour-process. These do not enter directly into the process, but without them it is either impossible for it to take place at all, or possible only to a partial extent. Once more we find the earth to be a universal instrument of this sort, for it furnishes a locus standi to the labourer and a field of employment for his activity. Among instruments that are the result of previous labour and also belong to this class, we find workshops, canals, roads, and so forth. In the labour-process, therefore, man s activity, with the help of the instruments of labour, effects an alteration, designed from the commencement, in the material worked upon. The process disappears in the product, the latter is a use-value, Nature s material adapted by a change of form to the wants of man. Labour has incorporated itself with its subject: the former is materialised, the latter transformed. That which in the labourer appeared as movement, now appears in the product as a fixed quality without motion. The blacksmith forges and the product is a forging. If we examine the whole process from the point of view of its result, the product, it is plain that both the instruments and the subject of labour, are means of production, and that the labour itself is productive labour. Though a use-value, in the form of a product, issues from the labour-process, yet other use-values, products of previous labour, enter into it as means of production. The same use-value is both the product of a previous process, and a means of production in a later process. Products are therefore not only results, but also essential conditions of labour. With the exception of the extractive industries, in which the material for labour is provided immediately by Nature, such as mining, hunting, fishing, and agriculture (so far as the latter is confined to breaking up virgin soil), all branches of industry manipulate raw material, objects already filtered through labour, already products of labour. Such is seed in agriculture. Animals and plants, which we are accustomed to consider as products of Nature, are in their present form, not only products of, say last year s labour, but the result of a gradual transformation, continued through many generations, under man s superintendence, and by means of his labour. But in the great majority of cases, instruments of labour show even to the most superficial observer, traces of the labour of past ages. Raw material may either form the principal substance of a product, or it may enter into its formation only as an accessory. An accessory may be consumed by the instruments of labour, as coal under a boiler, oil by a wheel, hay by draft-horses, or it may be mixed with the raw material in order to produce some modification thereof, as chlorine into unbleached linen, coal with iron, dye-stuff with wool, or again, it may help to carry on the work itself, as in the case of the materials used for heating and lighting workshops. The distinction between principal substance and accessory vanishes in the true chemical industries, because there none of the raw material re-appears, in its original composition, in the substance of the product. Every object possesses various properties, and is thus capable of being applied to different uses. One and the same product may therefore serve as raw material in very different processes. Corn, for example, is a raw material for millers, starch-manufacturers, distillers, and cattlebreeders. It also enters as raw material into its own production in the shape of seed; coal, too, is at the same time the product of, and a means of production in, coal-mining. Again, a particular product may be used in one and the same process, both as an instrument of labour and as raw material. Take, for instance, the fattening of cattle, where the animal is the raw material, and at the same time an instrument for the production of manure. A product, though ready for immediate consumption, may yet serve as raw material for a further product, as grapes when they become the raw material for wine. On the other hand, labour may give us its product in such a form, that we can use it only as raw material, as is the case with cotton, thread, and yarn. Such a raw material, though itself a product, may have to go through a whole series of different processes: in each of these in turn, it serves, with constantly varying form, as raw material, until the last process of the series leaves it a perfect product, ready for individual consumption, or for use as an instrument of labour. Hence we see, that whether a use-value is to be regarded as raw material, as instrument of labour, or as product, this is determined entirely by its function in the labour-process, by the position it there occupies: as this varies, so does its character. Whenever therefore a product enters as a means of production into a new labour-process, it thereby loses its character of product, and becomes a mere factor in the process. A spinner treats spindles only as implements for spinning, and flax only as the material that he spins. Of course it is impossible to spin without material and spindles; and therefore the existence of these things as products, at the commencement of the spinning operation, must be presumed: but in the process itself, the fact that they are products of previous labour, is a matter of utter indifference; just as in the digestive process, it is of no importance whatever, that bread is the produce of the previous labour of the farmer, the miller, and the baker. On the contrary, it is generally by their imperfections as products, that the means of production in any process assert themselves in their character of products. A blunt knife or weak thread forcibly remind us of Mr. A., the cutler, or Mr. B., the spinner. In the finished product the labour by means of which it has acquired its useful qualities is not palpable, has apparently vanished. A machine which does not serve the purposes of labour, is useless. In addition, it falls a prey to the destructive influence of natural forces. Iron rusts and wood rots. Yarn with which we neither weave nor knit, is cotton wasted. Living labour must seize upon these things and rouse them from their death-sleep, change them from mere possible use-values into real and effective ones. Bathed in the fire of labour, appropriated as part and parcel of labour s organism, and, as it were, made alive for the performance of their functions in the process, they are in truth consumed, but consumed with a purpose, as elementary constituents of new use-values, of new products, ever ready as means of subsistence for individual consumption, or as means of production for some new labour-process. If then, on the one hand, finished products are not only results, but also necessary conditions, of the labour-process, on the other hand, their assumption into that process, their contact with living labour, is the sole means by which they can be made to retain their character of use-values, and be utilised. Labour uses up its material factors, its subject and its instruments, consumes them, and is therefore a process of consumption. Such productive consumption is distinguished from individual consumption by this, that the latter uses up products, as means of subsistence for the living individual; the former, as means whereby alone, labour, the labour-power of the living individual, is enabled to act. The product, therefore, of individual consumption, is the consumer himself; the result of productive consumption, is a product distinct from the consumer. In so far then, as its instruments and subjects are themselves products, labour consumes products in order to create products, or in other words, consumes one set of products by turning them into means of production for another set. But, just as in the beginning, the only participators in the labour-process were man and the earth, which latter exists independently of man, so even now we still employ in the process many means of production, provided directly by Nature, that do not represent any combination of natural substances with human labour. The labour-process, resolved as above into its simple elementary factors, is human action with a view to the production of use-values, appropriation of natural substances to human requirements; it is the necessary condition for effecting exchange of matter between man and Nature; it is the everlasting Nature-imposed condition of human existence, and therefore is independent of every social phase of that existence, or rather, is common to every such phase. It was, therefore, not necessary to represent our labourer in connexion with other labourers; man and his labour on one side, Nature and its materials on the other, sufficed. As the taste of the porridge does not tell you who grew the oats, no more does this simple process tell you of itself what are the social conditions under which it is taking place, whether under the slave-owner s brutal lash, or the anxious eye of the capitalist, whether Cincinnatus carries it on in tilling his modest farm or a savage in killing wild animals with stones. Let us now return to our would-be capitalist. We left him just after he had purchased, in the open market, all the necessary factors of the labour process; its objective factors, the means of production, as well as its subjective factor, labour-power. With the keen eye of an expert, he has selected the means of production and the kind of labour-power best adapted to his particular trade, be it spinning, bootmaking, or any other kind. He then proceeds to consume the commodity, the labour-power that he has just bought, by causing the labourer, the impersonation of that labour-power, to consume the means of production by his labour. The general character of the labour-process is evidently not changed by the fact, that the labourer works for the capitalist instead of for himself; moreover, the particular methods and operations employed in bootmaking or spinning are not immediately changed by the intervention of the capitalist. He must begin by taking the labour-power as he finds it in the market, and consequently be satisfied with labour of such a kind as would be found in the period immediately preceding the rise of capitalists. Changes in the methods of production by the subordination of labour to capital, can take place only at a later period, and therefore will have to be treated of in a later chapter. The labour-process, turned into the process by which the capitalist consumes labour-power, exhibits two characteristic phenomena. First, the labourer works under the control of the capitalist to whom his labour belongs; the capitalist taking good care that the work is done in a proper manner, and that the means of production are used with intelligence, so that there is no unnecessary waste of raw material, and no wear and tear of the implements beyond what is necessarily caused by the work. Secondly, the product is the property of the capitalist and not that of the labourer, its immediate producer. Suppose that a capitalist pays for a day s labour-power at its value; then the right to use that power for a day belongs to him, just as much as the right to use any other commodity, such as a horse that he has hired for the day. To the purchaser of a commodity belongs its use, and the seller of labour-power, by giving his labour, does no more, in reality, than part with the use-value that he has sold. From the instant he steps into the workshop, the use-value of his labour-power, and therefore also its use, which is labour, belongs to the capitalist. By the purchase of labour-power, the capitalist incorporates labour, as a living ferment, with the lifeless constituents of the product. From his point of view, the labour-process is nothing more than the consumption of the commodity purchased, i. e., of labour-power; but this consumption cannot be effected except by supplying the labour-power with the means of production. The labour-process is a process between things that the capitalist has purchased, things that have become his property. The product of this process belongs, therefore, to him, just as much as does the wine which is the product of a process of fermentation completed in his cellar. The product appropriated by the capitalist is a use-value, as yarn, for example, or boots. But, although boots are, in one sense, the basis of all social progress, and our capitalist is a decided progressist, yet he does not manufacture boots for their own sake. Use-value is, by no means, the thing qu on aime pour lui-m me in the production of commodities. Use-values are only produced by capitalists, because, and in so far as, they are the material substratum, the depositories of exchange-value. Our capitalist has two objects in view: in the first place, he wants to produce a use-value that has a value in exchange, that is to say, an article destined to be sold, a commodity; and secondly, he desires to produce a commodity whose value shall be greater than the sum of the values of the commodities used in its production, that is, of the means of production and the labour-power, that he purchased with his good money in the open market. His aim is to produce not only a use-value, but a commodity also; not only use-value, but value; not only value, but at the same time surplus-value. It must be borne in mind, that we are now dealing with the production of commodities, and that, up to this point, we have only considered one aspect of the process. Just as commodities are, at the same time, use-values and values, so the process of producing them must be a labour-process, and at the same time, a process of creating value. Let us now examine production as a creation of value. We know that the value of each commodity is determined by the quantity of labour expended on and materialised in it, by the working-time necessary, under given social conditions, for its production. This rule also holds good in the case of the product that accrued to our capitalist, as the result of the labour-process carried on for him. Assuming this product to be 10 lbs. of yarn, our first step is to calculate the quantity of labour realised in it. For spinning the yarn, raw material is required; suppose in this case 10 lbs. of cotton. We have no need at present to investigate the value of this cotton, for our capitalist has, we will assume, bought it at its full value, say of ten shillings. In this price the labour required for the production of the cotton is already expressed in terms of the average labour of society. We will further assume that the wear and tear of the spindle, which, for our present purpose, may represent all other instruments of labour employed, amounts to the value of 2s. If, then, twenty-four hours labour, or two working-days, are required to produce the quantity of gold represented by twelve shillings, we have here, to begin with, two days labour already incorporated in the yarn. We must not let ourselves be misled by the circumstance that the cotton has taken a new shape while the substance of the spindle has to a certain extent been used up. By the general law of value, if the value of 40 lbs. of yarn = the value of 40 lbs. of cotton + the value of a whole spindle, i. e., if the same working-time is required to produce the commodities on either side of this equation, then 10 lbs. of yarn are an equivalent for 10 lbs. of cotton, together with one-fourth of a spindle. In the case we are considering the same working-time is materialised in the 10 lbs. of yarn on the one hand, and in the 10 lbs. of cotton and the fraction of a spindle on the other. Therefore, whether value appears in cotton, in a spindle, or in yarn, makes no difference in the amount of that value. The spindle and cotton, instead of resting quietly side by side, join together in the process, their forms are altered, and they are turned into yarn; but their value is no more affected by this fact than it would be if they had been simply exchanged for their equivalent in yarn. The labour required for the production of the cotton, the raw material of the yarn, is part of the labour necessary to produce the yarn, and is therefore contained in the yarn. The same applies to the labour embodied in the spindle, without whose wear and tear the cotton could not be spun. Hence, in determining the value of the yarn, or the labour-time required for its production, all the special processes carried on at various times and in different places, which were necessary, first to produce the cotton and the wasted portion of the spindle, and then with the cotton and spindle to spin the yarn, may together be looked on as different and successive phases of one and the same process. The whole of the labour in the yarn is past labour; and it is a matter of no importance that the operations necessary for the production of its constituent elements were carried on at times which, referred to the present, are more remote than the final operation of spinning. If a definite quantity of labour, say thirty days, is requisite to build a house, the total amount of labour incorporated in it is not altered by the fact that the work of the last day is done twenty-nine days later than that of the first. Therefore the labour contained in the raw material and the instruments of labour can be treated just as if it were labour expended in an earlier stage of the spinning process, before the labour of actual spinning commenced. The values of the means of production, i. e., the cotton and the spindle, which values are expressed in the price of twelve shillings, are therefore constituent parts of the value of the yarn, or, in other words, of the value of the product. Two conditions must nevertheless be fulfilled. First, the cotton and spindle must concur in the production of a use-value; they must in the present case become yarn. Value is independent of the particular use-value by which it is borne, but it must be embodied in a use-value of some kind. Secondly, the time occupied in the labour of production must not exceed the time really necessary under the given social conditions of the case. Therefore, if no more than 1 lb. of cotton be requisite to spin 1 lb. of yarn, care must be taken that no more than this weight of cotton is consumed in the production of 1 lb. of yarn; and similarly with regard to the spindle. Though the capitalist have a hobby, and use a gold instead of a steel spindle, yet the only labour that counts for anything in the value of the yarn is that which would be required to produce a steel spindle, because no more is necessary under the given social conditions. We now know what portion of the value of the yarn is owing to the cotton and the spindle. It amounts to twelve shillings or the value of two days work. The next point for our consideration is, what portion of the value of the yarn is added to the cotton by the labour of the spinner. We have now to consider this labour under a very different aspect from that which it had during the labour-process; there, we viewed it solely as that particular kind of human activity which changes cotton into yarn; there, the more the labour was suited to the work, the better the yarn, other circumstances remaining the same. The labour of the spinner was then viewed as specifically different from other kinds of productive labour, different on the one hand in its special aim, viz., spinning, different, on the other hand, in the special character of its operations, in the special nature of its means of production and in the special use-value of its product. For the operation of spinning, cotton and spindles are a necessity, but for making rifled cannon they would be of no use whatever. Here, on the contrary, where we consider the labour of the spinner only so far as it is value-creating, i.e., a source of value, his labour differs in no respect from the labour of the man who bores cannon, or (what here more nearly concerns us), from the labour of the cotton-planter and spindle-maker incorporated in the means of production. It is solely by reason of this identity, that cotton planting, spindle making and spinning, are capable of forming the component parts differing only quantitatively from each other, of one whole, namely, the value of the yarn. Here, we have nothing more to do with the quality, the nature and the specific character of the labour, but merely with its quantity. And this simply requires to be calculated. We proceed upon the assumption that spinning is simple, unskilled labour, the average labour of a given state of society. Hereafter we shall see that the contrary assumption would make no difference. While the labourer is at work, his labour constantly undergoes a transformation: from being motion, it becomes an object without motion; from being the labourer working, it becomes the thing produced. At the end of one hour s spinning, that act is represented by a definite quantity of yarn; in other words, a definite quantity of labour, namely that of one hour, has become embodied in the cotton. We say labour, i.e., the expenditure of his vital force by the spinner, and not spinning labour, because the special work of spinning counts here, only so far as it is the expenditure of labour-power in general, and not in so far as it is the specific work of the spinner. In the process we are now considering it is of extreme importance, that no more time be consumed in the work of transforming the cotton into yarn than is necessary under the given social conditions. If under normal, i.e., average social conditions of production, a pounds of cotton ought to be made into b pounds of yarn by one hour s labour, then a day s labour does not count as 12 hours labour unless 12 a pounds of cotton have been made into 12 b pounds of yarn; for in the creation of value, the time that is socially necessary alone counts. Not only the labour, but also the raw material and the product now appear in quite a new light, very different from that in which we viewed them in the labour-process pure and simple. The raw material serves now merely as an absorbent of a definite quantity of labour. By this absorption it is in fact changed into yarn, because it is spun, because labour-power in the form of spinning is added to it; but the product, the yarn, is now nothing more than a measure of the labour absorbed by the cotton. If in one hour 1 2/3 lbs. of cotton can be spun into 1 2/3 lbs. of yarn, then 10 lbs. of yarn indicate the absorption of 6 hours labour. Definite quantities of product, these quantities being determined by experience, now represent nothing but definite quantities of labour, definite masses of crystallised labour-time. They are nothing more than the materialisation of so many hours or so many days of social labour. We are here no more concerned about the facts, that the labour is the specific work of spinning, that its subject is cotton and its product yarn, than we are about the fact that the subject itself is already a product and therefore raw material. If the spinner, instead of spinning, were working in a coal mine, the subject of his labour, the coal, would be supplied by Nature; nevertheless, a definite quantity of extracted coal, a hundredweight for example, would represent a definite quantity of absorbed labour. We assumed, on the occasion of its sale, that the value of a day s labour-power is three shillings, and that six hours labour is incorporated in that sum; and consequently that this amount of labour is requisite to produce the necessaries of life daily required on an average by the labourer. If now our spinner by working for one hour, can convert 1 2/3 lbs. of cotton into 1 2/3 lbs. of yarn, it follows that in six hours he will convert 10 lbs. of cotton into 10 lbs. of yarn. Hence, during the spinning process, the cotton absorbs six hours labour. The same quantity of labour is also embodied in a piece of gold of the value of three shillings. Consequently by the mere labour of spinning, a value of three shillings is added to the cotton. Let us now consider the total value of the product, the 10 lbs. of yarn. Two and a half days labour has been embodied in it, of which two days were contained in the cotton and in the substance of the spindle worn away, and half a day was absorbed during the process of spinning. This two and a half days labour is also represented by a piece of gold of the value of fifteen shillings. Hence, fifteen shillings is an adequate price for the 10 lbs. of yarn, or the price of one pound is eighteenpence. Our capitalist stares in astonishment. The value of the product is exactly equal to the value of the capital advanced. The value so advanced has not expanded, no surplus-value has been created, and consequently money has not been converted into capital. The price of the yarn is fifteen shillings, and fifteen shillings were spent in the open market upon the constituent elements of the product, or, what amounts to the same thing, upon the factors of the labour-process; ten shillings were paid for the cotton, two shillings for the substance of the spindle worn away, and three shillings for the labour-power. The swollen value of the yarn is of no avail, for it is merely the sum of the values formerly existing in the cotton, the spindle, and the labour-power: out of such a simple addition of existing values, no surplus-value can possibly arise. These separate values are now all concentrated in one thing; but so they were also in the sum of fifteen shillings, before it was split up into three parts, by the purchase of the commodities. There is in reality nothing very strange in this result. The value of one pound of yarn being eighteenpence, if our capitalist buys 10 lbs. of yarn in the market, he must pay fifteen shillings for them. It is clear that, whether a man buys his house ready built, or gets it built for him, in neither case will the mode of acquisition increase the amount of money laid out on the house. Our capitalist, who is at home in his vulgar economy, exclaims: Oh! but I advanced my money for the express purpose of making more money. The way to Hell is paved with good intentions, and he might just as easily have intended to make money, without producing at all. He threatens all sorts of things. He won t be caught napping again. In future he will buy the commodities in the market, instead of manufacturing them himself. But if all his brother capitalists were to do the same, where would he find his commodities in the market? And his money he cannot eat. He tries persuasion. Consider my abstinence; I might have played ducks and drakes with the 15 shillings; but instead of that I consumed it productively, and made yarn with it. Very well, and by way of reward he is now in possession of good yarn instead of a bad conscience; and as for playing the part of a miser, it would never do for him to relapse into such bad ways as that; we have seen before to what results such asceticism leads. Besides, where nothing is, the king has lost his rights; whatever may be the merit of his abstinence, there is nothing wherewith specially to remunerate it, because the value of the product is merely the sum of the values of the commodities that were thrown into the process of production. Let him therefore console himself with the reflection that virtue is its own reward. But no, he becomes importunate. He says: The yarn is of no use to me: I produced it for sale. In that case let him sell it, or, still better, let him for the future produce only things for satisfying his personal wants, a remedy that his physician MacCulloch has already prescribed as infallible against an epidemic of over-production. He now gets obstinate. Can the labourer, he asks, merely with his arms and legs, produce commodities out of nothing? Did I not supply him with the materials, by means of which, and in which alone, his labour could be embodied? And as the greater part of society consists of such ne er-do-wells, have I not rendered society incalculable service by my instruments of production, my cotton and my spindle, and not only society, but the labourer also, whom in addition I have provided with the necessaries of life? And am I to be allowed nothing in return for all this service? Well, but has not the labourer rendered him the equivalent service of changing his cotton and spindle into yarn? Moreover, there is here no question of service. A service is nothing more than the useful effect of a use-value, be it of a commodity, or be it of labour. But here we are dealing with exchange-value. The capitalist paid to the labourer a value of 3 shillings, and the labourer gave him back an exact equivalent in the value of 3 shillings, added by him to the cotton: he gave him value for value. Our friend, up to this time so purse-proud, suddenly assumes the modest demeanour of his own workman, and exclaims: Have I myself not worked? Have I not performed the labour of superintendence and of overlooking the spinner? And does not this labour, too, create value? His overlooker and his manager try to hide their smiles. Meanwhile, after a hearty laugh, he re-assumes his usual mien. Though he chanted to us the whole creed of the economists, in reality, he says, he would not give a brass farthing for it. He leaves this and all such like subterfuges and juggling tricks to the professors of Political Economy, who are paid for it. He himself is a practical man; and though he does not always consider what he says outside his business, yet in his business he knows what he is about. Let us examine the matter more closely. The value of a day s labour-power amounts to 3 shillings, because on our assumption half a day s labour is embodied in that quantity of labour-power, i.e., because the means of subsistence that are daily required for the production of labour-power, cost half a day s labour. But the past labour that is embodied in the labour-power, and the living labour that it can call into action; the daily cost of maintaining it, and its daily expenditure in work, are two totally different things. The former determines the exchange-value of the labour-power, the latter is its use-value. The fact that half a day s labour is necessary to keep the labourer alive during 24 hours, does not in any way prevent him from working a whole day. Therefore, the value of labour-power, and the value which that labour-power creates in the labour-process, are two entirely different magnitudes; and this difference of the two values was what the capitalist had in view, when he was purchasing the labour-power. The useful qualities that labour-power possesses, and by virtue of which it makes yarn or boots, were to him nothing more than a conditio sine qua non; for in order to create value, labour must be expended in a useful manner. What really influenced him was the specific use-value which this commodity possesses of being a source not only of value, but of more value than it has itself. This is the special service that the capitalist expects from labour-power, and in this transaction he acts in accordance with the eternal laws of the exchange of commodities. The seller of labour-power, like the seller of any other commodity, realises its exchange-value, and parts with its use-value. He cannot take the one without giving the other. The use-value of labour-power, or in other words, labour, belongs just as little to its seller, as the use-value of oil after it has been sold belongs to the dealer who has sold it. The owner of the money has paid the value of a day s labour-power; his, therefore, is the use of it for a day; a day s labour belongs to him. The circumstance, that on the one hand the daily sustenance of labour-power costs only half a day s labour, while on the other hand the very same labour-power can work during a whole day, that consequently the value which its use during one day creates, is double what he pays for that use, this circumstance is, without doubt, a piece of good luck for the buyer, but by no means an injury to the seller. Our capitalist foresaw this state of things, and that was the cause of his laughter. The labourer therefore finds, in the workshop, the means of production necessary for working, not only during six, but during twelve hours. Just as during the six hours process our 10 lbs. of cotton absorbed six hours labour, and became 10 lbs. of yarn, so now, 20 lbs. of cotton will absorb 12 hours labour and be changed into 20 lbs. of yarn. Let us now examine the product of this prolonged process. There is now materialised in this 20 lbs. of yarn the labour of five days, of which four days are due to the cotton and the lost steel of the spindle, the remaining day having been absorbed by the cotton during the spinning process. Expressed in gold, the labour of five days is thirty shillings. This is therefore the price of the 20 lbs. of yarn, giving, as before, eighteenpence as the price of a pound. But the sum of the values of the commodities that entered into the process amounts to 27 shillings. The value of the yarn is 30 shillings. Therefore the value of the product is 1/9 greater than the value advanced for its production; 27 shillings have been transformed into 30 shillings; a surplus-value of 3 shillings has been created. The trick has at last succeeded; money has been converted into capital. Every condition of the problem is satisfied, while the laws that regulate the exchange of commodities, have been in no way violated. Equivalent has been exchanged for equivalent. For the capitalist as buyer paid for each commodity, for the cotton, the spindle and the labour-power, its full value. He then did what is done by every purchaser of commodities; he consumed their use-value. The consumption of the labour-power, which was also the process of producing commodities, resulted in 20 lbs. of yarn, having a value of 30 shillings. The capitalist, formerly a buyer, now returns to market as a seller, of commodities. He sells his yarn at eighteenpence a pound, which is its exact value. Yet for all that he withdraws 3 shillings more from circulation than he originally threw into it. This metamorphosis, this conversion of money into capital, takes place both within the sphere of circulation and also outside it; within the circulation, because conditioned by the purchase of the labour-power in the market; outside the circulation, because what is done within it is only a stepping-stone to the production of surplus-value, a process which is entirely confined to the sphere of production. Thus tout est pour le mieux dans le meilleur des mondes possibles. [ Everything is for the best in the best of all possible worlds. Voltaire, Candide] By turning his money into commodities that serve as the material elements of a new product, and as factors in the labour-process, by incorporating living labour with their dead substance, the capitalist at the same time converts value, i.e., past, materialised, and dead labour into capital, into value big with value, a live monster that is fruitful and multiplies. If we now compare the two processes of producing value and of creating surplus-value, we see that the latter is nothing but the continuation of the former beyond a definite point. If on the one hand the process be not carried beyond the point, where the value paid by the capitalist for the labour-power is replaced by an exact equivalent, it is simply a process of producing value; if, on the other hand, it be continued beyond that point, it becomes a process of creating surplus-value. If we proceed further, and compare the process of producing value with the labour-process, pure and simple, we find that the latter consists of the useful labour, the work, that produces use-values. Here we contemplate the labour as producing a particular article; we view it under its qualitative aspect alone, with regard to its end and aim. But viewed as a value-creating process, the same labour-process presents itself under its quantitative aspect alone. Here it is a question merely of the time occupied by the labourer in doing the work; of the period during which the labour-power is usefully expended. Here, the commodities that take part in the process, do not count any longer as necessary adjuncts of labour-power in the production of a definite, useful object. They count merely as depositories of so much absorbed or materialised labour; that labour, whether previously embodied in the means of production, or incorporated in them for the first time during the process by the action of labour-power, counts in either case only according to its duration; it amounts to so many hours or days as the case may be. Moreover, only so much of the time spent in the production of any article is counted, as, under the given social conditions, is necessary. The consequences of this are various. In the first place, it becomes necessary that the labour should be carried on under normal conditions. If a self-acting mule is the implement in general use for spinning, it would be absurd to supply the spinner with a distaff and spinning wheel. The cotton too must not be such rubbish as to cause extra waste in being worked, but must be of suitable quality. Otherwise the spinner would be found to spend more time in producing a pound of yarn than is socially necessary, in which case the excess of time would create neither value nor money. But whether the material factors of the process are of normal quality or not, depends not upon the labourer, but entirely upon the capitalist. Then again, the labour-power itself must be of average efficacy. In the trade in which it is being employed, it must possess the average skill, handiness and quickness prevalent in that trade, and our capitalist took good care to buy labour-power of such normal goodness. This power must be applied with the average amount of exertion and with the usual degree of intensity; and the capitalist is as careful to see that this is done, as that his workmen are not idle for a single moment. He has bought the use of the labour-power for a definite period, and he insists upon his rights. He has no intention of being robbed. Lastly, and for this purpose our friend has a penal code of his own, all wasteful consumption of raw material or instruments of labour is strictly forbidden, because what is so wasted, represents labour superfluously expended, labour that does not count in the product or enter into its value. We now see, that the difference between labour, considered on the one hand as producing utilities, and on the other hand, as creating value, a difference which we discovered by our analysis of a commodity, resolves itself into a distinction between two aspects of the process of production. The process of production, considered on the one hand as the unity of the labour-process and the process of creating value, is production of commodities; considered on the other hand as the unity of the labour-process and the process of producing surplus-value, it is the capitalist process of production, or capitalist production of commodities. We stated, on a previous page, that in the creation of surplus-value it does not in the least matter, whether the labour appropriated by the capitalist be simple unskilled labour of average quality or more complicated skilled labour. All labour of a higher or more complicated character than average labour is expenditure of labour-power of a more costly kind, labour-power whose production has cost more time and labour, and which therefore has a higher value, than unskilled or simple labour-power. This power being higher-value, its consumption is labour of a higher class, labour that creates in equal times proportionally higher values than unskilled labour does. Whatever difference in skill there may be between the labour of a spinner and that of a jeweller, the portion of his labour by which the jeweller merely replaces the value of his own labour-power, does not in any way differ in quality from the additional portion by which he creates surplus-value. In the making of jewellery, just as in spinning, the surplus-value results only from a quantitative excess of labour, from a lengthening-out of one and the same labour-process, in the one case, of the process of making jewels, in the other of the process of making yarn. But on the other hand, in every process of creating value, the reduction of skilled labour to average social labour, e.g., one day of skilled to six days of unskilled labour, is unavoidable. We therefore save ourselves a superfluous operation, and simplify our analysis, by the assumption, that the labour of the workman employed by the capitalist is unskilled average labour.

Economic Manuscripts: Capital Vol. I - Chapter Seven

https://www.marxists.org/archive/marx/works/1867-c1/ch07.htm

The various factors of the labour-process play different parts in forming the value of the product. The labourer adds fresh value to the subject of his labour by expending upon it a given amount of additional labour, no matter what the specific character and utility of that labour may be. On the other hand, the values of the means of production used up in the process are preserved, and present themselves afresh as constituent parts of the value of the product; the values of the cotton and the spindle, for instance, re-appear again in the value of the yarn. The value of the means of production is therefore preserved, by being transferred to the product. This transfer takes place during the conversion of those means into a product, or in other words, during the labour-process. It is brought about by labour; but how? The labourer does not perform two operations at once, one in order to add value to the cotton, the other in order to preserve the value of the means of production, or, what amounts to the same thing, to transfer to the yarn, to the product, the value of the cotton on which he works, and part of the value of the spindle with which he works. But, by the very act of adding new value, he preserves their former values. Since, however, the addition of new value to the subject of his labour, and the preservation of its former value, are two entirely distinct results, produced simultaneously by the labourer, during one operation, it is plain that this two-fold nature of the result can be explained only by the two-fold nature of his labour; at one and the same time, it must in one character create value, and in another character preserve or transfer value. Now, in what manner does every labourer add new labour and consequently new value? Evidently, only by labouring productively in a particular way; the spinner by spinning, the weaver by weaving, the smith by forging. But, while thus incorporating labour generally, that is value, it is by the particular form alone of the labour, by the spinning, the weaving and the forging respectively, that the means of production, the cotton and spindle, the yarn and loom, and the iron and anvil become constituent elements of the product, of a new use-value. Each use-value disappears, but only to re-appear under a new form in a new use-value. Now, we saw, when we were considering the process of creating value, that, if a use-value be effectively consumed in the production of a new use-value, the quantity of labour expended in the production of the consumed article, forms a portion of the quantity of labour necessary to produce the new use-value; this portion is therefore labour transferred from the means of production to the new product. Hence, the labourer preserves the values of the consumed means of production, or transfers them as portions of its value to the product, not by virtue of his additional labour, abstractedly considered, but by virtue of the particular useful character of that labour, by virtue of its special productive form. In so far then as labour is such specific productive activity, in so far as it is spinning, weaving, or forging, it raises, by mere contact, the means of production from the dead, makes them living factors of the labour-process, and combines with them to form the new products. If the special productive labour of the workman were not spinning, he could not convert the cotton into yarn, and therefore could not transfer the values of the cotton and spindle to the yarn. Suppose the same workman were to change his occupation to that of a joiner, he would still by a day s labour add value to the material he works upon. Consequently, we see, first, that the addition of new value takes place not by virtue of his labour being spinning in particular, or joinering in particular, but because it is labour in the abstract, a portion of the total labour of society; and we see next, that the value added is of a given definite amount, not because his labour has a special utility, but because it is exerted for a definite time. On the one hand, then, it is by virtue of its general character, as being expenditure of human labour-power in the abstract, that spinning adds new value to the values of the cotton and the spindle; and on the other hand, it is by virtue of its special character, as being a concrete, useful process, that the same labour of spinning both transfers the values of the means of production to the product, and preserves them in the product. Hence at one and the same time there is produced a two-fold result. By the simple addition of a certain quantity of labour, new value is added, and by the quality of this added labour, the original values of the means of production are preserved in the product. This two-fold effect, resulting from the two-fold character of labour, may be traced in various phenomena. Let us assume, that some invention enables the spinner to spin as much cotton in 6 hours as he was able to spin before in 36 hours. His labour is now six times as effective as it was, for the purposes of useful production. The product of 6 hours work has increased six-fold, from 6 lbs. to 36 lbs. But now the 36 lbs. of cotton absorb only the same amount of labour as formerly did the 6 lbs. One-sixth as much new labour is absorbed by each pound of cotton, and consequently, the value added by the labour to each pound is only one-sixth of what it formerly was. On the other hand, in the product, in the 36 lbs. of yarn, the value transferred from the cotton is six times as great as before. By the 6 hours spinning, the value of the raw material preserved and transferred to the product is six times as great as before, although the new value added by the labour of the spinner to each pound of the very same raw material is one-sixth what it was formerly. This shows that the two properties of labour, by virtue of which it is enabled in one case to preserve value, and in the other to create value, are essentially different. On the one hand, the longer the time necessary to spin a given weight of cotton into yarn, the greater is the new value added to the material; on the other hand, the greater the weight of the cotton spun in a given time, the greater is the value preserved, by being transferred from it to the product. Let us now assume, that the productiveness of the spinner s labour, instead of varying, remains constant, that he therefore requires the same time as he formerly did, to convert one pound of cotton into yarn, but that the exchange-value of the cotton varies, either by rising to six times its former value or falling to one-sixth of that value. In both these cases, the spinner puts the same quantity of labour into a pound of cotton, and therefore adds as much value, as he did before the change in the value: he also produces a given weight of yarn in the same time as he did before. Nevertheless, the value that he transfers from the cotton to the yarn is either one-sixth of what it was before the variation, or, as the case may be, six times as much as before. The same result occurs when the value of the instruments of labour rises or falls, while their useful efficacy in the process remains unaltered. Again, if the technical conditions of the spinning process remain unchanged, and no change of value takes place in the means of production, the spinner continues to consume in equal working-times equal quantities of raw material, and equal quantities of machinery of unvarying value. The value that he preserves in the product is directly proportional to the new value that he adds to the product. In two weeks he incorporates twice as much labour, and therefore twice as much value, as in one week, and during the same time he consumes twice as much material, and wears out twice as much machinery, of double the value in each case: he therefore preserves, in the product of two weeks, twice as much value as in the product of one week. So long as the conditions of production remain the same, the more value the labourer adds by fresh labour, the more value he transfers and preserves; but he does so merely because this addition of new value takes place under conditions that have not varied and are independent of his own labour. Of course, it may be said in one sense, that the labourer preserves old value always in proportion to the quantity of new value that he adds. Whether the value of cotton rise from one shilling to two shillings, or fall to sixpence, the workman invariably preserves in the product of one hour only one half as much value as he preserves in two hours. In like manner, if the productiveness of his own labour varies by rising or falling, he will in one hour spin either more or less cotton, as the case may be, than he did before, and will consequently preserve in the product of one hour, more or less value of cotton; but, all the same, he will preserve by two hours labour twice as much value as he will by one. Value exists only in articles of utility, in objects: we leave out of consideration its purely symbolical representation by tokens. (Man himself, viewed as the impersonation of labour-power, is a natural object, a thing, although a living conscious thing, and labour is the manifestation of this power residing in him.) If therefore an article loses its utility, it also loses its value. The reason why means of production do not lose their value, at the same time that they lose their use-value, is this: they lose in the labour-process the original form of their use-value, only to assume in the product the form of a new use-value. But, however important it may be to value, that it should have some object of utility to embody itself in, yet it is a matter of complete indifference what particular object serves this purpose; this we saw when treating of the metamorphosis of commodities. Hence it follows that in the labour-process the means of production transfer their value to the product only so far as along with their use-value they lose also their exchange-value. They give up to the product that value alone which they themselves lose as means of production. But in this respect the material factors of the labour-process do not all behave alike. The coal burnt under the boiler vanishes without leaving a trace; so, too, the tallow with which the axles of wheels are greased. Dye stuffs and other auxiliary substances also vanish but re-appear as properties of the product. Raw material forms the substance of the product, but only after it has changed its form. Hence raw material and auxiliary substances lose the characteristic form with which they are clothed on entering the labour-process. It is otherwise with the instruments of labour. Tools, machines, workshops, and vessels, are of use in the labour-process, only so long as they retain their original shape, and are ready each morning to renew the process with their shape unchanged. And just as during their lifetime, that is to say, during the continued labour-process in which they serve, they retain their shape independent of the product, so, too, they do after their death. The corpses of machines, tools, workshops, &c., are always separate and distinct from the product they helped to turn out. If we now consider the case of any instrument of labour during the whole period of its service, from the day of its entry into the workshop, till the day of its banishment into the lumber room, we find that during this period its use-value has been completely consumed, and therefore its exchange-value completely transferred to the product. For instance, if a spinning machine lasts for 10 years, it is plain that during that working period its total value is gradually transferred to the product of the 10 years. The lifetime of an instrument of labour, therefore, is spent in the repetition of a greater or less number of similar operations. Its life may be compared with that of a human being. Every day brings a man 24 hours nearer to his grave: but how many days he has still to travel on that road, no man can tell accurately by merely looking at him. This difficulty, however, does not prevent life insurance offices from drawing, by means of the theory of averages, very accurate, and at the same time very profitable conclusions. So it is with the instruments of labour. It is known by experience how long on the average a machine of a particular kind will last. Suppose its use-value in the labour-process to last only six days. Then, on the average, it loses each day one-sixth of its use-value, and therefore parts with one-sixth of its value to the daily product. The wear and tear of all instruments, their daily loss of use-value, and the corresponding quantity of value they part with to the product, are accordingly calculated upon this basis. It is thus strikingly clear, that means of production never transfer more value to the product than they themselves lose during the labour-process by the destruction of their own use-value. If such an instrument has no value to lose, if, in other words, it is not the product of human labour, it transfers no value to the product. It helps to create use-value without contributing to the formation of exchange-value. In this class are included all means of production supplied by Nature without human assistance, such as land, wind, water, metals in situ, and timber in virgin forests. Yet another interesting phenomenon here presents itself. Suppose a machine to be worth 1,000, and to wear out in 1,000 days. Then one thousandth part of the value of the machine is daily transferred to the day s product. At the same time, though with diminishing vitality, the machine as a whole continues to take part in the labour-process. Thus it appears, that one factor of the labour-process, a means of production, continually enters as a whole into that process, while it enters into the process of the formation of value by fractions only. The difference between the two processes is here reflected in their material factors, by the same instrument of production taking part as a whole in the labour-process, while at the same time as an element in the formation of value, it enters only by fractions. On the other hand, a means of production may take part as a whole in the formation of value, while into the labour-process it enters only bit by bit. Suppose that in spinning cotton, the waste for every 115 lbs. used amounts to 15 lbs., which is converted, not into yarn, but into devil s dust. Now, although this 15 lbs. of cotton never becomes a constituent element of the yarn, yet assuming this amount of waste to be normal and inevitable under average conditions of spinning, its value is just as surely transferred to the value of the yarn, as is the value of the 100 lbs. that form the substance of the yarn. The use-value of 15 lbs. of cotton must vanish into dust, before 100 lbs. of yarn can be made. The destruction of this cotton is therefore a necessary condition in the production of the yarn. And because it is a necessary condition, and for no other reason, the value of that cotton is transferred to the product. The same holds good for every kind of refuse resulting from a labour-process, so far at least as such refuse cannot be further employed as a means in the production of new and independent use-values. Such an employment of refuse may be seen in the large machine works at Manchester, where mountains of iron turnings are carted away to the foundry in the evening, in order the next morning to re-appear in the workshops as solid masses of iron. We have seen that the means of production transfer value to the new product, so far only as during the labour-process they lose value in the shape of their old use-value. The maximum loss of value that they can suffer in the process, is plainly limited by the amount of the original value with which they came into the process, or in other words, by the labour-time necessary for their production. Therefore, the means of production can never add more value to the product than they themselves possess independently of the process in which they assist. However useful a given kind of raw material, or a machine, or other means of production may be, though it may cost 150, or, say, 500 days labour, yet it cannot, under any circumstances, add to the value of the product more than 150. Its value is determined not by the labour-process into which it enters as a means of production, but by that out of which it has issued as a product. In the labour-process it only serves as a mere use-value, a thing with useful properties, and could not, therefore, transfer any value to the product, unless it possessed such value previously. While productive labour is changing the means of production into constituent elements of a new product, their value undergoes a metempsychosis. It deserts the consumed body, to occupy the newly created one. But this transmigration takes place, as it were, behind the back of the labourer. He is unable to add new labour, to create new value, without at the same time preserving old values, and this, because the labour he adds must be of a specific useful kind; and he cannot do work of a useful kind, without employing products as the means of production of a new product, and thereby transferring their value to the new product. The property therefore which labour-power in action, living labour, possesses of preserving value, at the same time that it adds it, is a gift of Nature which costs the labourer nothing, but which is very advantageous to the capitalist inasmuch as it preserves the existing value of his capital. So long as trade is good, the capitalist is too much absorbed in money-grubbing to take notice of this gratuitous gift of labour. A violent interruption of the labour-process by a crisis, makes him sensitively aware of it. As regards the means of production, what is really consumed is their use-value, and the consumption of this use-value by labour results in the product. There is no consumption of their value, and it would therefore be inaccurate to say that it is reproduced. It is rather preserved; not by reason of any operation it undergoes itself in the process; but because the article in which it originally exists, vanishes, it is true, but vanishes into some other article. Hence, in the value of the product, there is a reappearance of the value of the means of production, but there is, strictly speaking, no reproduction of that value. That which is produced is a new use-value in which the old exchange-value reappears. It is otherwise with the subjective factor of the labour-process, with labour-power in action. While the labourer, by virtue of his labour being of a specialised kind that has a special object, preserves and transfers to the product the value of the means of production, he at the same time, by the mere act of working, creates each instant an additional or new value. Suppose the process of production to be stopped just when the workman has produced an equivalent for the value of his own labour-power, when, for example, by six hours labour, he has added a value of three shillings. This value is the surplus, of the total value of the product, over the portion of its value that is due to the means of production. It is the only original bit of value formed during this process, the only portion of the value of the product created by this process. Of course, we do not forget that this new value only replaces the money advanced by the capitalist in the purchase of the labour-power, and spent by the labourer on the necessaries of life. With regard to the money spent, the new value is merely a reproduction; but, nevertheless, it is an actual, and not, as in the case of the value of the means of production, only an apparent, reproduction. The substitution of one value for another, is here effected by the creation of new value. We know, however, from what has gone before, that the labour-process may continue beyond the time necessary to reproduce and incorporate in the product a mere equivalent for the value of the labour-power. Instead of the six hours that are sufficient for the latter purpose, the process may continue for twelve hours. The action of labour-power, therefore, not only reproduces its own value, but produces value over and above it. This surplus-value is the difference between the value of the product and the value of the elements consumed in the formation of that product, in other words, of the means of production and the labour-power. By our explanation of the different parts played by the various factors of the labour-process in the formation of the product s value, we have, in fact, disclosed the characters of the different functions allotted to the different elements of capital in the process of expanding its own value. The surplus of the total value of the product, over the sum of the values of its constituent factors, is the surplus of the expanded capital over the capital originally advanced. The means of production on the one hand, labour-power on the other, are merely the different modes of existence which the value of the original capital assumed when from being money it was transformed into the various factors of the labour-process. That part of capital then, which is represented by the means of production, by the raw material, auxiliary material and the instruments of labour does not, in the process of production, undergo any quantitative alteration of value. I therefore call it the constant part of capital, or, more shortly, constant capital. On the other hand, that part of capital, represented by labour-power, does, in the process of production, undergo an alteration of value. It both reproduces the equivalent of its own value, and also produces an excess, a surplus-value, which may itself vary, may be more or less according to circumstances. This part of capital is continually being transformed from a constant into a variable magnitude. I therefore call it the variable part of capital, or, shortly, variable capital. The same elements of capital which, from the point of view of the labour-process, present themselves respectively as the objective and subjective factors, as means of production and labour-power, present themselves, from the point of view of the process of creating surplus-value, as constant and variable capital. The definition of constant capital given above by no means excludes the possibility of a change of value in its elements. Suppose the price of cotton to be one day sixpence a pound, and the next day, in consequence of a failure of the cotton crop, a shilling a pound. Each pound of the cotton bought at sixpence, and worked up after the rise in value, transfers to the product a value of one shilling; and the cotton already spun before the rise, and perhaps circulating in the market as yarn, likewise transfers to the product twice its original value. It is plain, however, that these changes of value are independent of the increment or surplus-value added to the value of the cotton by the spinning itself. If the old cotton had never been spun, it could, after the rise, be resold at a shilling a pound instead of at sixpence. Further, the fewer the processes the cotton has gone through, the more certain is this result. We therefore find that speculators make it a rule when such sudden changes in value occur, to speculate in that material on which the least possible quantity of labour has been spent: to speculate, therefore, in yarn rather than in cloth, in cotton itself, rather than in yarn. The change of value in the case we have been considering, originates, not in the process in which the cotton plays the part of a means of production, and in which it therefore functions as constant capital, but in the process in which the cotton itself is produced. The value of a commodity, it is true, is determined by the quantity of labour contained in it, but this quantity is itself limited by social conditions. If the time socially necessary for the production of any commodity alters and a given weight of cotton represents, after a bad harvest, more labour than after a good one all previously existing commodities of the same class are affected, because they are, as it were, only individuals of the species, and their value at any given time is measured by the labour socially necessary, i.e., by the labour necessary for their production under the then existing social conditions. As the value of the raw material may change, so, too, may that of the instruments of labour, of the machinery, &c., employed in the process; and consequently that portion of the value of the product transferred to it from them, may also change. If in consequence of a new invention, machinery of a particular kind can be produced by a diminished expenditure of labour, the old machinery becomes depreciated more or less, and consequently transfers so much less value to the product. But here again, the change in value originates outside the process in which the machine is acting as a means of production. Once engaged in this process, the machine cannot transfer more value than it possesses apart from the process. Just as a change in the value of the means of production, even after they have commenced to take a part in the labour-process, does not alter their character as constant capital, so, too, a change in the proportion of constant to variable capital does not affect the respective functions of these two kinds of capital. The technical conditions of the labour-process may be revolutionised to such an extent, that where formerly ten men using ten implements of small value worked up a relatively small quantity of raw material, one man may now, with the aid of one expensive machine, work up one hundred times as much raw material. In the latter case we have an enormous increase in the constant capital, that is represented by the total value of the means of production used, and at the same time a great reduction in the variable capital, invested in labour-power. Such a revolution, however, alters only the quantitative relation between the constant and the variable capital, or the proportions in which the total capital is split up into its constant and variable constituents; it has not in the least degree affected the essential difference between the two.

Economic Manuscripts: Capital Vol. I - Chapter Eight

https://www.marxists.org/archive/marx/works/1867-c1/ch08.htm

The surplus-value generated in the process of production by C, the capital advanced, or in other words, the self-expansion of the value of the capital C, presents itself for our consideration, in the first place, as a surplus, as the amount by which the value of the product exceeds the value of its constituent elements. The capital C is made up of two components, one, the sum of money c laid out upon the means of production, and the other, the sum of money v expended upon the labour-power; c represents the portion that has become constant capital, and v the portion that has become variable capital. At first then, C = c + v: for example, if 500 is the capital advanced, its components may be such that the 500 = 410 const. + 90 var. When the process of production is finished, we get a commodity whose value = (c + v) + s, where s is the surplus-value; or taking our former figures, the value of this commodity may be ( 410 const. + 90 var.) + 90 surpl. The original capital has now changed from C to C', from 500 to 590. The difference is s or a surplus-value of 90. Since the value of the constituent elements of the product is equal to the value of the advanced capital, it is mere tautology to say, that the excess of the value of the product over the value of its constituent elements, is equal to the expansion of the capital advanced or to the surplus-value produced. Nevertheless, we must examine this tautology a little more closely. The two things compared are, the value of the product and the value of its constituents consumed in the process of production. Now we have seen how that portion of the constant capital which consists of the instruments of labour, transfers to the production only a fraction of its value, while the remainder of that value continues to reside in those instruments. Since this remainder plays no part in the formation of value, we may at present leave it on one side. To introduce it into the calculation would make no difference. For instance, taking our former example, c = 410: suppose this sum to consist of 312 value of raw material, 44 value of auxiliary material, and 54 value of the machinery worn away in the process; and suppose that the total value of the machinery employed is 1,054. Out of this latter sum, then, we reckon as advanced for the purpose of turning out the product, the sum of 54 alone, which the machinery loses by wear and tear in the process; for this is all it parts with to the product. Now if we also reckon the remaining 1,000, which still continues in the machinery, as transferred to the product, we ought also to reckon it as part of the value advanced, and thus make it appear on both sides of our calculation. We should, in this way, get 1,500 on one side and 1,590 on the other. The difference of these two sums, or the surplus-value, would still be 90. Throughout this Book therefore, by constant capital advanced for the production of value, we always mean, unless the context is repugnant thereto, the value of the means of production actually consumed in the process, and that value alone. This being so, let us return to the formula C = c + v, which we saw was transformed into C' = (c + v) + s, C becoming C'. We know that the value of the constant capital is transferred to, and merely re-appears in the product. The new value actually created in the process, the value produced, or value-product, is therefore not the same as the value of the product; it is not, as it would at first sight appear (c + v) + s or 410 const. + 90 var. + 90 surpl.; but v + s or 90 var. + 90 surpl., not 590 but 180. If c = 0, or in other words, if there were branches of industry in which the capitalist could dispense with all means of production made by previous labour, whether they be raw material, auxiliary material, or instruments of labour, employing only labour-power and materials supplied by Nature, in that case, there would be no constant capital to transfer to the product. This component of the value of the product, i.e., the 410 in our example, would be eliminated, but the sum of 180, the amount of new value created, or the value produced, which contains 90 of surplus-value, would remain just as great as if c represented the highest value imaginable. We should have C = (0 + v) = v or C' the expanded capital = v + s and therefore C' - C = s as before. On the other hand, if s = 0, or in other words, if the labour-power, whose value is advanced in the form of variable capital, were to produce only its equivalent, we should have C = c + v or C' the value of the product = (c + v) + 0 or C = C'. The capital advanced would, in this case, not have expanded its value. From what has gone before, we know that surplus-value is purely the result of a variation in the value of v, of that portion of the capital which is transformed into labour-power; consequently, v + s = v + v', or v plus an increment of v. But the fact that it is v alone that varies, and the conditions of that variation, are obscured by the circumstance that in consequence of the increase in the variable component of the capital, there is also an increase in the sum total of the advanced capital. It was originally 500 and becomes 590. Therefore in order that our investigation may lead to accurate results, we must make abstraction from that portion of the value of the product, in which constant capital alone appears, and consequently must equate the constant capital to zero or make c = 0. This is merely an application of a mathematical rule, employed whenever we operate with constant and variable magnitudes, related to each other by the symbols of addition and subtraction only. A further difficulty is caused by the original form of the variable capital. In our example, C' = 410 const. + 90 var. + 90 surpl.; but 90 is a given and therefore a constant quantity; hence it appears absurd to treat it as variable. But in fact, the term 90 var. is here merely a symbol to show that this value undergoes a process. The portion of the capital invested in the purchase of labour-power is a definite quantity of materialised labour, a constant value like the value of the labour-power purchased. But in the process of production the place of the 90 is taken by the labour-power in action, dead labour is replaced by living labour, something stagnant by something flowing, a constant by a variable. The result is the reproduction of v plus an increment of v. From the point of view then of capitalist production, the whole process appears as the spontaneous variation of the originally constant value, which is transformed into labour-power. Both the process and its result, appear to be owing to this value. If, therefore, such expressions as 90 variable capital, or so much self-expanding value, appear contradictory, this is only because they bring to the surface a contradiction immanent in capitalist production. At first sight it appears a strange proceeding, to equate the constant capital to zero. Yet it is what we do every day. If, for example, we wish to calculate the amount of England s profits from the cotton industry, we first of all deduct the sums paid for cotton to the United States, India, Egypt and other countries; in other words, the value of the capital that merely re-appears in the value of the product, is put = 0. Of course the ratio of surplus-value not only to that portion of the capital from which it immediately springs, and whose change of value it represents, but also to the sum total of the capital advanced is economically of very great importance. We shall, therefore, in the third book, treat of this ratio exhaustively. In order to enable one portion of a capital to expand its value by being converted into labour-power, it is necessary that another portion be converted into means of production. In order that variable capital may perform its function, constant capital must be advanced in proper proportion, a proportion given by the special technical conditions of each labour-process. The circumstance, however, that retorts and other vessels, are necessary to a chemical process, does not compel the chemist to notice them in the result of his analysis. If we look at the means of production, in their relation to the creation of value, and to the variation in the quantity of value, apart from anything else, they appear simply as the material in which labour-power, the value-creator, incorporates itself. Neither the nature, nor the value of this material is of any importance. The only requisite is that there be a sufficient supply to absorb the labour expended in the process of production. That supply once given, the material may rise or fall in value, or even be, as land and the sea, without any value in itself; but this will have no influence on the creation of value or on the variation in the quantity of value. In the first place then we equate the constant capital to zero. The capital advanced is consequently reduced from c + v to v, and instead of the value of the product (c + v) + s we have now the value produced (v + s). Given the new value produced = 180, which sum consequently represents the whole labour expended during the process, then subtracting from it 90 the value of the variable capital, we have remaining 90, the amount of the surplus-value. This sum of 90 or s expresses the absolute quantity of surplus-value produced. The relative quantity produced, or the increase per cent of the variable capital, is determined, it is plain, by the ratio of the surplus-value to the variable capital, or is expressed by s/v. In our example this ratio is 90/90, which gives an increase of 100%. This relative increase in the value of the variable capital, or the relative magnitude of the surplus-value, I call, The rate of surplus-value. We have seen that the labourer, during one portion of the labour-process, produces only the value of his labour-power, that is, the value of his means of subsistence. Now since his work forms part of a system, based on the social division of labour, he does not directly produce the actual necessaries which he himself consumes; he produces instead a particular commodity, yarn for example, whose value is equal to the value of those necessaries or of the money with which they can be bought. The portion of his day s labour devoted to this purpose, will be greater or less, in proportion to the value of the necessaries that he daily requires on an average, or, what amounts to the same thing, in proportion to the labour-time required on an average to produce them. If the value of those necessaries represent on an average the expenditure of six hours labour, the workman must on an average work for six hours to produce that value. If instead of working for the capitalist, he worked independently on his own account, he would, other things being equal, still be obliged to labour for the same number of hours, in order to produce the value of his labour-power, and thereby to gain the means of subsistence necessary for his conservation or continued reproduction. But as we have seen, during that portion of his day s labour in which he produces the value of his labour-power, say three shillings, he produces only an equivalent for the value of his labour-power already advanced by the capitalist; the new value created only replaces the variable capital advanced. It is owing to this fact, that the production of the new value of three shillings takes the semblance of a mere reproduction. That portion of the working-day, then, during which this reproduction takes place, I call necessary labour time, and the labour expended during that time I call necessary labour. Necessary, as regards the labourer, because independent of the particular social form of his labour; necessary, as regards capital, and the world of capitalists, because on the continued existence of the labourer depends their existence also. During the second period of the labour-process, that in which his labour is no longer necessary labour, the workman, it is true, labours, expends labour-power; but his labour, being no longer necessary labour, he creates no value for himself. He creates surplus-value which, for the capitalist, has all the charms of a creation out of nothing. This portion of the working-day, I name surplus labour-time, and to the labour expended during that time, I give the name of surplus-labour. It is every bit as important, for a correct understanding of surplus-value, to conceive it as a mere congelation of surplus labour-time, as nothing but materialised surplus-labour, as it is, for a proper comprehension of value, to conceive it as a mere congelation of so many hours of labour, as nothing but materialised labour. The essential difference between the various economic forms of society, between, for instance, a society based on slave-labour, and one based on wage-labour, lies only in the mode in which this surplus-labour is in each case extracted from the actual producer, the labourer. Since, on the one hand, the values of the variable capital and of the labour-power purchased by that capital are equal, and the value of this labour-power determines the necessary portion of the working-day; and since, on the other hand, the surplus-value is determined by the surplus portion of the working-day, it follows that surplus-value bears the same ratio to variable capital, that surplus-labour does to necessary labour, or in other words, the rate of surplus-value, s/v = (surplus labour)/(necessary labour). Both ratios, s/v and (surplus labour)/(necessary labour), express the same thing in different ways; in the one case by reference to materialised, incorporated labour, in the other by reference to living, fluent labour. The rate of surplus-value is therefore an exact expression for the degree of exploitation of labour-power by capital, or of the labourer by the capitalist. We assumed in our example, that the value of the product = 410 const. + 90 var. + 90 surpl., and that the capital advanced = 500. Since the surplus-value = 90, and the advanced capital = 500, we should, according to the usual way of reckoning, get as the rate of surplus-value (generally confounded with rate of profits) 18%, a rate so low as possibly to cause a pleasant surprise to Mr. Carey and other harmonisers. But in truth, the rate of surplus-value is not equal to s/C or s/(c+v), but to s/v: thus it is not 90/500 but 90/90 or 100%, which is more than five times the apparent degree of exploitation. Although, in the case we have supposed, we are ignorant of the actual length of the working-day, and of the duration in days or weeks of the labour-process, as also of the number of labourers employed, yet the rate of surplus-value s/v accurately discloses to us, by means of its equivalent expression, surplus-labour/necessary labour the relation between the two parts of the working-day. This relation is here one of equality, the rate being 100%. Hence, it is plain, the labourer, in our example, works one half of the day for himself, the other half for the capitalist. The method of calculating the rate of surplus-value is therefore, shortly, as follows. We take the total value of the product and put the constant capital which merely re-appears in it, equal to zero. What remains, is the only value that has, in the process of producing the commodity, been actually created. If the amount of surplus-value be given, we have only to deduct it from this remainder, to find the variable capital. And vice vers , if the latter be given, and we require to find the surplus-value. If both be given, we have only to perform the concluding operation, viz., to calculate s/v, the ratio of the surplus-value to the variable capital. Though the method is so simple, yet it may not be amiss, by means of a few examples, to exercise the reader in the application of the novel principles underlying it. First we will take the case of a spinning mill containing 10,000 mule spindles, spinning No. 32 yarn from American cotton, and producing 1 lb. of yarn weekly per spindle. We assume the waste to be 6%: under these circumstances 10,600 lbs. of cotton are consumed weekly, of which 600 lbs. go to waste. The price of the cotton in April, 1871, was 7 d. per lb.; the raw material therefore costs in round numbers 342. The 10,000 spindles, including preparation-machinery, and motive power, cost, we will assume, 1 per spindle, amounting to a total of 10,000. The wear and tear we put at 10%, or 1,000 yearly = 20 weekly. The rent of the building we suppose to be 300 a year, or 6 a week. Coal consumed (for 100 horse-power indicated, at 4 lbs. of coal per horse-power per hour during 60 hours, and inclusive of that consumed in heating the mill), 11 tons a week at 8s. 6d. a ton, amounts to about 4 a week: gas, 1 a week, oil, &c., 4 a week. Total cost of the above auxiliary materials, 10 weekly. Therefore the constant portion of the value of the week s product is 378. Wages amount to 52 a week. The price of the yarn is 12 d. per. lb. which gives for the value of 10,000 lbs. the sum of 510. The surplus-value is therefore in this case 510 - 430 = 80. We put the constant part of the value of the product = 0, as it plays no part in the creation of value. There remains 132 as the weekly value created, which = 52 var. + 80 surpl. The rate of surplus-value is therefore 80/52 = 153 11/13%. In a working-day of 10 hours with average labour the result is: necessary labour = 3 31/33 hours, and surplus-labour = 6 2/33. One more example. Jacob gives the following calculation for the year 1815. Owing to the previous adjustment of several items it is very imperfect; nevertheless for our purpose it is sufficient. In it he assumes the price of wheat to be 8s. a quarter, and the average yield per acre to be 22 bushels. Assuming that the price of the product is the same as its value, we here find the surplus-value distributed under the various heads of profit, interest, rent, &c. We have nothing to do with these in detail; we simply add them together, and the sum is a surplus-value of 3 11s. 0d. The sum of 3 19s. 0d., paid for seed and manure, is constant capital, and we put it equal to zero. There is left the sum of 3 10s. 0d., which is the variable capital advanced: and we see that a new value of 3 10s. 0d + 3 11s. 0d. has been produced in its place. Therefore s/v = 3 11s. 0d. / 3 10s. 0d., giving a rate of surplus-value of more than 100%. The labourer employs more than one half of his working-day in producing the surplus-value, which different persons, under different pretexts, share amongst themselves. Let us now return to the example by which we were shown how the capitalist converts money into capital. The product of a working-day of 12 hours is 20 lbs. of yarn, having a value of 30s. No less than 8/10ths of this value, or 24s., is due to mere re-appearance in it, of the value of the means of production (20 lbs. of cotton, value 20s., and spindle worn away, 4s.): it is therefore constant capital. The remaining 2/10ths or 6s. is the new value created during the spinning process: of this one half replaces the value of the day s labour-power, or the variable capital, the remaining half constitutes a surplus-value of 3s. The total value then of the 20 lbs. of yarn is made up as follows: Since the whole of this value is contained in the 20 lbs. of yarn produced, it follows that the various component parts of this value, can be represented as being contained respectively in corresponding parts of the product. If the value of 30s. is contained in 20 lbs. of yarn, then 8/10ths of this value, or the 24s. that form its constant part, is contained in 8/10ths of the product or in 16 lbs. of yarn. Of the latter 13 1/3 lbs. represent the value of the raw material, the 20s. worth of cotton spun, and 2 2/3 lbs. represent the 4s. worth of spindle, &c., worn away in the process. Hence the whole of the cotton used up in spinning the 20 lbs. of yarn, is represented by 13 1/3 lbs. of yarn. This latter weight of yarn contains, it is true, by weight, no more than 13 1/3 lbs. of cotton, worth 13 1/3 shillings; but the 6 2/3 shillings additional value contained in it, are the equivalent for the cotton consumed in spinning the remaining 6 2/3 lbs. of yarn. The effect is the same as if these 6 2/3 lbs. of yarn contained no cotton at all, and the whole 20 lbs. of cotton were concentrated in the 13 1/3 lbs. of yarn. The latter weight, on the other hand, does not contain an atom either of the value of the auxiliary materials and implements, or of the value newly created in the process. In the same way, the 2 2/3 lbs. of yarn, in which the 4s., the remainder of the constant capital, is embodied, represents nothing but the value of the auxiliary materials and instruments of labour consumed in producing the 20 lbs. of yarn. We have, therefore, arrived at this result: although eight-tenths of the product, or 16 lbs. of yarn, is, in its character of an article of utility, just as much the fabric of the spinner s labour, as the remainder of the same product, yet when viewed in this connexion, it does not contain, and has not absorbed any labour expended during the process of spinning. It is just as if the cotton had converted itself into yarn, without help; as if the shape it had assumed was mere trickery and deceit: for so soon as our capitalist sells it for 24s., and with the money replaces his means of production, it becomes evident that this 16 lbs. of yarn is nothing more than so much cotton and spindle-waste in disguise. On the other hand, the remaining 2/10ths of the product, or 4 lbs of yarn, represent nothing but the new value of 6s., created during the 12 hours spinning process. All the value transferred to those 4 lbs, from the raw material and instruments of labour consumed, was, so to say, intercepted in order to be incorporated in the 16 lbs. first spun. In this case, it is as if the spinner had spun 4 lbs. of yarn out of air, or, as if he had spun them with the aid of cotton and spindles, that, being the spontaneous gift of Nature, transferred no value to the product. Of this 4 lbs. of yarn, in which the whole of the value newly created during the process, is condensed, one half represents the equivalent for the value of the labour consumed, or the 3s. variable capital, the other half represents the 3s. surplus-value. Since 12 working-hours of the spinner are embodied in 6s., it follows that in yarn of the value of 30s., there must be embodied 60 working-hours. And this quantity of labour-time does in fact exist in the 20 lbs of yarn; for in 8/10ths or 16 lbs there are materialised the 48 hours of labour expended, before the commencement of the spinning process, on the means of production; and in the remaining 2/10ths or 4 lbs there are materialised the 12 hours work done during the process itself. On a former page we saw that the value of the yarn is equal to the sum of the new value created during the production of that yarn plus the value previously existing in the means of production. It has now been shown how the various component parts of the value of the product, parts that differ functionally from each other, may be represented by corresponding proportional parts of the product itself. To split up in this manner the product into different parts, of which one represents only the labour previously spent on the means of production, or the constant capital, another, only the necessary labour spent during the process of production, or the variable capital, and another and last part, only the surplus-labour expended during the same process, or the surplus-value; to do this, is, as will be seen later on from its application to complicated and hitherto unsolved problems, no less important than it is simple. In the preceding investigation we have treated the total product as the final result, ready for use, of a working-day of 12 hours. We can however follow this total product through all the stages of its production; and in this way we shall arrive at the same result as before, if we represent the partial products, given off at the different stages, as functionally different parts of the final or total product. The spinner produces in 12 hours 20 lbs. of yarn, or in 1 hour 1 lbs; consequently he produces in 8 hours 13 lbs., or a partial product equal in value to all the cotton that is spun in a whole day. In like manner the partial product of the next period of 1 hour and 36 minutes, is 2 lbs. of yarn: this represents the value of the instruments of labour that are consumed in 12 hours. In the following hour and 12 minutes, the spinner produces 2 lbs. of yarn worth 3 shillings, a value equal to the whole value he creates in his 6 hours necessary labour. Finally, in the last hour and 12 minutes he produces another 2 lbs. of yarn, whose value is equal to the surplus-value, created by his surplus-labour during half a day. This method of calculation serves the English manufacturer for every-day use; it shows, he will say, that in the first 8 hours, or of the working-day, he gets back the value of his cotton; and so on for the remaining hours. It is also a perfectly correct method: being in fact the first method given above with this difference, that instead of being applied to space, in which the different parts of the completed product lie side by side, it deals with time, in which those parts are successively produced. But it can also be accompanied by very barbarian notions, more especially in the heads of those who are as much interested, practically, in the process of making value beget value, as they are in misunderstanding that process theoretically. Such people may get the notion into their heads, that our spinner, for example, produces or replaces in the first 8 hours of his working-day the value of the cotton; in the following hour and 36 minutes the value of the instruments of labour worn away; in the next hour and 12 minutes the value of the wages; and that he devotes to the production of surplus-value for the manufacturer, only that well known last hour. In this way the poor spinner is made to perform the two-fold miracle not only of producing cotton, spindles, steam-engine, coal, oil, &c., at the same time that he spins with them, but also of turning one working-day into five; for, in the example we are considering, the production of the raw material and instruments of labour demands four working-days of twelve hours each, and their conversion into yarn requires another such day. That the love of lucre induces an easy belief in such miracles, and that sycophant doctrinaires are never wanting to prove them, is vouched for by the following incident of historical celebrity. One fine morning, in the year 1836, Nassau W. Senior, who may be called the bel-esprit of English economists, well known, alike for his economic science, and for his beautiful style, was summoned from Oxford to Manchester, to learn in the latter place, the Political Economy that he taught in the former. The manufacturers elected him as their champion, not only against the newly passed Factory Act, but against the still more menacing Ten-hours agitation. With their usual practical acuteness, they had found out that the learned Professor wanted a good deal of finishing; it was this discovery that caused them to write for him. On his side the Professor has embodied the lecture he received from the Manchester manufacturers, in a pamphlet, entitled: Letters on the Factory Act, as it affects the cotton manufacture. London, 1837. Here we find, amongst others, the following edifying passage: And the Professor calls this an analysis! If, giving credence to the out-cries of the manufacturers, he believed that the workmen spend the best part of the day in the production, i.e., the reproduction or replacement of the value of the buildings, machinery, cotton, coal, &c., then his analysis was superfluous. His answer would simply have been: Gentlemen! if you work your mills for 10 hours instead of 11 , then, other things being equal, the daily consumption of cotton, machinery, &c., will decrease in proportion. You gain just as much as you lose. Your work-people will in future spend one hour and a half less time in reproducing or replacing the capital that has been advanced. If, on the other hand, he did not believe them without further inquiry, but, as being an expert in such matters, deemed an analysis necessary, then he ought, in a question that is concerned exclusively with the relations of net profit to the length of the working-day, before all things to have asked the manufacturers, to be careful not to lump together machinery, workshops, raw material, and labour, but to be good enough to place the constant capital, invested in buildings, machinery, raw material, &c., on one side of the account, and the capital advanced in wages on the other side. If the Professor then found, that in accordance with the calculation of the manufacturers, the workman reproduced or replaced his wages in 2 half-hours, in that case, he should have continued his analysis thus: According to your figures, the workman in the last hour but one produces his wages, and in the last hour your surplus-value or net profit. Now, since in equal periods he produces equal values, the produce of the last hour but one, must have the same value as that of the last hour. Further, it is only while he labours that he produces any value at all, and the amount of his labour is measured by his labour-time. This you say, amounts to 11 hours a day. He employs one portion of these 11 hours, in producing or replacing his wages, and the remaining portion in producing your net profit. Beyond this he does absolutely nothing. But since, on your assumption, his wages, and the surplus-value he yields, are of equal value, it is clear that he produces his wages in 5 hours, and your net profit in the other 5 hours. Again, since the value of the yarn produced in 2 hours, is equal to the sum of the values of his wages and of your net profit, the measure of the value of this yarn must be 11 working-hours, of which 5 hours measure the value of the yarn produced in the last hour but one, and 5 , the value of the yarn produced in the last hour. We now come to a ticklish point; therefore, attention! The last working-hour but one is, like the first, an ordinary working-hour, neither more nor less. How then can the spinner produce in one hour, in the shape of yarn, a value that embodies 5 hours labour? The truth is that he performs no such miracle. The use-value produced by him in one hour, is a definite quantity of yarn. The value of this yarn is measured by 5 working-hours, of which 4 were, without any assistance from him, previously embodied in the means of production, in the cotton, the machinery, and so on; the remaining one hour alone is added by him. Therefore since his wages are produced in 5 hours, and the yarn produced in one hour also contains 5 hours work, there is no witchcraft in the result, that the value created by his 5 hours spinning, is equal to the value of the product spun in one hour. You are altogether on the wrong track, if you think that he loses a single moment of his working-day, in reproducing or replacing the values of the cotton, the machinery, and so on. On the contrary, it is because his labour converts the cotton and spindles into yarn, because he spins, that the values of the cotton and spindles go over to the yarn of their own accord. This result is owing to the quality of his labour, not to its quantity. It is true, he will in one hour transfer to the yarn more value, in the shape of cotton, than he will in half an hour; but that is only because in one hour he spins up more cotton than in half an hour. You see then, your assertion, that the workman produces, in the last hour but one, the value of his wages, and in the last hour your net profit, amounts to no more than this, that in the yarn produced by him in 2 working-hours, whether they are the 2 first or the 2 last hours of the working-day, in that yarn, there are incorporated 11 working-hours, or just a whole day s work, i.e., two hours of his own work and 9 hours of other people s. And my assertion that, in the first 5 hours, he produces his wages, and in the last 5 hours your net profit, amounts only to this, that you pay him for the former, but not for the latter. In speaking of payment of labour, instead of payment of labour-power, I only talk your own slang. Now, gentlemen, if you compare the working-time you pay for, with that which you do not pay for, you will find that they are to one another, as half a day is to half a day; this gives a rate of 100%, and a very pretty percentage it is. Further, there is not the least doubt, that if you make your hands toil for 13 hours, instead of 11 , and, as may be expected from you, treat the work done in that extra one hour and a half, as pure surplus-labour, then the latter will be increased from 5 hours labour to 7 hours labour, and the rate of surplus-value from 100% to 126 2/23%. So that you are altogether too sanguine, in expecting that by such an addition of 1 hours to the working-day, the rate will rise from 100% to 200% and more, in other words that it will be more than doubled. On the other hand man s heart is a wonderful thing, especially when carried in the purse you take too pessimist a view, when you fear, that with a reduction of the hours of labour from 11 to 10, the whole of your net profit will go to the dogs. Not at all. All other conditions remaining the same, the surplus-labour will fall from 5 hours to 4 hours, a period that still gives a very profitable rate of surplus-value, namely 82 14/23%. But this dreadful last hour, about which you have invented more stories than have the millenarians about the day of judgment, is all bosh. If it goes, it will cost neither you, your net profit, nor the boys and girls whom you employ, their purity of mind. Whenever your last hour strikes in earnest, think of the Oxford Professor. And now, gentlemen, farewell, and may we meet again in yonder better world, but not before. Senior invented the battle cry of the last hour in 1836. In the London Economist of the 15th April, 1848, the same cry was again raised by James Wilson, an economic mandarin of high standing: this time in opposition to the 10 hours bill. The portion of the product that represents the surplus-value, (one tenth of the 20 lbs., or 2 lbs. of yarn, in the example given in Sec. 2) we call surplus-produce. Just as the rate of surplus-value is determined by its relation, not to the sum total of the capital, but to its variable part; in like manner, the relative quantity of surplus-produce is determined by the ratio that this produce bears, not to the remaining part of the total product, but to that part of it in which is incorporated the necessary labour. Since the production of surplus-value is the chief end and aim of capitalist production, it is clear, that the greatness of a man s or a nation s wealth should be measured, not by the absolute quantity produced, but by the relative magnitude of the surplus-produce. The sum of the necessary labour and the surplus-labour, i.e., of the periods of time during which the workman replaces the value of his labour-power, and produces the surplus-value, this sum constitutes the actual time during which he works, i.e., the working-day.

Economic Manuscripts: Capital Vol. I - Chapter Nine

https://www.marxists.org/archive/marx/works/1867-c1/ch09.htm

We started with the supposition that labour-power is bought and sold at its value. Its value, like that of all other commodities, is determined by the working-time necessary to its production. If the production of the average daily means of subsistence of the labourer takes up 6 hours, he must work, on the average, 6 hours every day, to produce his daily labour-power, or to reproduce the value received as the result of its sale. The necessary part of his working-day amounts to 6 hours, and is, therefore, caeteris paribus [other things being equal], a given quantity. But with this, the extent of the working-day itself is not yet given. Let us assume that the line A B represents the length of the necessary working-time, say 6 hours. If the labour be prolonged 1, 3, or 6 hours beyond A B, we have 3 other lines: representing 3 different working-days of 7, 9, and 12 hours. The extension B C of the line A B represents the length of the surplus-labour. As the working-day is A B + B C or A C, it varies with the variable quantity B C. Since A B is constant, the ratio of B C to A B can always be calculated. In working-day I, it is 1/6, in working-day II, 3/6, in working day III 6/6 of A B. Since further the ratio (surplus working-time)/(necessary working-time), determines the rate of the surplus-value, the latter is given by the ratio of B -C to A -B. It amounts in the 3 different working-days respectively to 16 2/3, 50 and 100 per cent. On the other hand, the rate of surplus-value alone would not give us the extent of the working-day. If this rate, e.g., were 100 per cent., the working-day might be of 8, 10, 12, or more hours. It would indicate that the 2 constituent parts of the working-day, necessary-labour and surplus-labour time, were equal in extent, but not how long each of these two constituent parts was. The working-day is thus not a constant, but a variable quantity. One of its parts, certainly, is determined by the working-time required for the reproduction of the labour-power of the labourer himself. But its total amount varies with the duration of the surplus-labour. The working-day is, therefore, determinable, but is, per se, indeterminate. Although the working-day is not a fixed, but a fluent quantity, it can, on the other hand, only vary within certain limits. The minimum limit is, however, not determinable; of course, if we make the extension line B C or the surplus-labour = 0, we have a minimum limit, i.e., the part of the day which the labourer must necessarily work for his own maintenance. On the basis of capitalist production, however, this necessary labour can form a part only of the working-day; the working-day itself can never be reduced to this minimum. On the other hand, the working-day has a maximum limit. It cannot be prolonged beyond a certain point. This maximum limit is conditioned by two things. First, by the physical bounds of labour-power. Within the 24 hours of the natural day a man can expend only a definite quantity of his vital force. A horse, in like manner, can only work from day to day, 8 hours. During part of the day this force must rest, sleep; during another part the man has to satisfy other physical needs, to feed, wash, and clothe himself. Besides these purely physical limitations, the extension of the working-day encounters moral ones. The labourer needs time for satisfying his intellectual and social wants, the extent and number of which are conditioned by the general state of social advancement. The variation of the working-day fluctuates, therefore, within physical and social bounds. But both these limiting conditions are of a very elastic nature, and allow the greatest latitude. So we find working-days of 8, 10, 12, 14, 16, 18 hours, i.e., of the most different lengths. The capitalist has bought the labour-power at its day-rate. To him its use-value belongs during one working-day. He has thus acquired the right to make the labourer work for him during one day. But, what is a working-day? At all events, less than a natural day. By how much? The capitalist has his own views of this ultima Thule [the outermost limit], the necessary limit of the working-day. As capitalist, he is only capital personified. His soul is the soul of capital. But capital has one single life impulse, the tendency to create value and surplus-value, to make its constant factor, the means of production, absorb the greatest possible amount of surplus-labour. Capital is dead labour, that, vampire-like, only lives by sucking living labour, and lives the more, the more labour it sucks. The time during which the labourer works, is the time during which the capitalist consumes the labour-power he has purchased of him. If the labourer consumes his disposable time for himself, he robs the capitalist. The capitalist then takes his stand on the law of the exchange of commodities. He, like all other buyers, seeks to get the greatest possible benefit out of the use-value of his commodity. Suddenly the voice of the labourer, which had been stifled in the storm and stress of the process of production, rises: The commodity that I have sold to you differs from the crowd of other commodities, in that its use creates value, and a value greater than its own. That is why you bought it. That which on your side appears a spontaneous expansion of capital, is on mine extra expenditure of labour-power. You and I know on the market only one law, that of the exchange of commodities. And the consumption of the commodity belongs not to the seller who parts with it, but to the buyer, who acquires it. To you, therefore, belongs the use of my daily labour-power. But by means of the price that you pay for it each day, I must be able to reproduce it daily, and to sell it again. Apart from natural exhaustion through age, &c., I must be able on the morrow to work with the same normal amount of force, health and freshness as to-day. You preach to me constantly the gospel of saving and abstinence. Good! I will, like a sensible saving owner, husband my sole wealth, labour-power, and abstain from all foolish waste of it. I will each day spend, set in motion, put into action only as much of it as is compatible with its normal duration, and healthy development. By an unlimited extension of the working-day, you may in one day use up a quantity of labour-power greater than I can restore in three. What you gain in labour I lose in substance. The use of my labour-power and the spoliation of it are quite different things. If the average time that (doing a reasonable amount of work) an average labourer can live, is 30 years, the value of my labour-power, which you pay me from day to day is 1/(365 30) or 1/10950 of its total value. But if you consume it in 10 years, you pay me daily 1/10950 instead of 1/3650 of its total value, i.e., only 1/3 of its daily value, and you rob me, therefore, every day of 2/3 of the value of my commodity. You pay me for one day s labour-power, whilst you use that of 3 days. That is against our contract and the law of exchanges. I demand, therefore, a working-day of normal length, and I demand it without any appeal to your heart, for in money matters sentiment is out of place. You may be a model citizen, perhaps a member of the Society for the Prevention of Cruelty to Animals, and in the odour of sanctity to boot; but the thing that you represent face to face with me has no heart in its breast. That which seems to throb there is my own heart-beating. I demand the normal working-day because I, like every other seller, demand the value of my commodity. We see then, that, apart from extremely elastic bounds, the nature of the exchange of commodities itself imposes no limit to the working-day, no limit to surplus-labour. The capitalist maintains his rights as a purchaser when he tries to make the working-day as long as possible, and to make, whenever possible, two working-days out of one. On the other hand, the peculiar nature of the commodity sold implies a limit to its consumption by the purchaser, and the labourer maintains his right as seller when he wishes to reduce the working-day to one of definite normal duration. There is here, therefore, an antinomy, right against right, both equally bearing the seal of the law of exchanges. Between equal rights force decides. Hence is it that in the history of capitalist production, the determination of what is a working-day, presents itself as the result of a struggle, a struggle between collective capital, i.e., the class of capitalists, and collective labour, i.e., the working-class. Capital has not invented surplus-labour. Wherever a part of society possesses the monopoly of the means of production, the labourer, free or not free, must add to the working-time necessary for his own maintenance an extra working-time in order to produce the means of subsistence for the owners of the means of production, whether this proprietor be the Athenian calo cagaqo [well-to-do man], Etruscan theocrat, civis Romanus [Roman citizen], Norman baron, American slave-owner, Wallachian Boyard, modern landlord or capitalist. It is, however, clear that in any given economic formation of society, where not the exchange-value but the use-value of the product predominates, surplus-labour will be limited by a given set of wants which may be greater or less, and that here no boundless thirst for surplus-labour arises from the nature of the production itself. Hence in antiquity over-work becomes horrible only when the object is to obtain exchange-value in its specific independent money-form; in the production of gold and silver. Compulsory working to death is here the recognised form of over-work. Only read Diodorus Siculus. Still these are exceptions in antiquity. But as soon as people, whose production still moves within the lower forms of slave-labour, corv e-labour, &c., are drawn into the whirlpool of an international market dominated by the capitalistic mode of production, the sale of their products for export becoming their principal interest, the civilised horrors of over-work are grafted on the barbaric horrors of slavery, serfdom, &c. Hence the negro labour in the Southern States of the American Union preserved something of a patriarchal character, so long as production was chiefly directed to immediate local consumption. But in proportion, as the export of cotton became of vital interest to these states, the over-working of the negro and sometimes the using up of his life in 7 years of labour became a factor in a calculated and calculating system. It was no longer a question of obtaining from him a certain quantity of useful products. It was now a question of production of surplus-labour itself: So was it also with the corv e, e.g., in the Danubian Principalities (now Roumania). The comparison of the greed for surplus-labour in the Danubian Principalities with the same greed in English factories has a special interest, because surplus-labour in the corv e has an independent and palpable form. Suppose the working-day consists of 6 hours of necessary labour, and 6 hours of surplus-labour. Then the free labourer gives the capitalist every week 6 x 6 or 36 hours of surplus-labour. It is the same as if he worked 3 days in the week for himself, and 3 days in the week gratis for the capitalist. But this is not evident on the surface. Surplus-labour and necessary labour glide one into the other. I can, therefore, express the same relationship by saying, e.g., that the labourer in every minute works 30 seconds for himself, and 30 for the capitalist, etc. It is otherwise with the corv e. The necessary labour which the Wallachian peasant does for his own maintenance is distinctly marked off from his surplus-labour on behalf of the Boyard. The one he does on his own field, the other on the seignorial estate. Both parts of the labour-time exist, therefore, independently, side by side one with the other. In the corv e the surplus-labour is accurately marked off from the necessary labour. This, however, can make no difference with regard to the quantitative relation of surplus-labour to necessary labour. Three days surplus-labour in the week remain three days that yield no equivalent to the labourer himself, whether it be called corv e or wage-labour. But in the capitalist the greed for surplus-labour appears in the straining after an unlimited extension of the working-day, in the Boyard more simply in a direct hunting after days of corv e. In the Danubian Principalities the corv e was mixed up with rents in kind and other appurtenances of bondage, but it formed the most important tribute paid to the ruling class. Where this was the case, the corv e rarely arose from serfdom; serfdom much more frequently on the other hand took origin from the corv e. This is what took place in the Roumanian provinces. Their original mode of production was based on community of the soil, but not in the Slavonic or Indian form. Part of the land was cultivated in severalty as freehold by the members of the community, another part ager publicus was cultivated by them in common. The products of this common labour served partly as a reserve fund against bad harvests and other accidents, partly as a public store for providing the costs of war, religion, and other common expenses. In course of time military and clerical dignitaries usurped, along with the common land, the labour spent upon it. The labour of the free peasants on their common land was transformed into corv e for the thieves of the common land. This corv e soon developed into a servile relationship existing in point of fact, not in point of law, until Russia, the liberator of the world, made it legal under presence of abolishing serfdom. The code of the corv e, which the Russian General Kisseleff proclaimed in 1831, was of course dictated by the Boyards themselves. Thus Russia conquered with one blow the magnates of the Danubian provinces, and the applause of liberal cretins throughout Europe. According to the R glement organique, as this code of the corv e is called, every Wallachian peasant owes to the so-called landlord, besides a mass of detailed payments in kind: (1), 12 days of general labour; (2), one day of field labour; (3), one day of wood carrying. In all, 14 days in the year. With deep insight into Political Economy, however, the working-day is not taken in its ordinary sense, but as the working-day necessary to the production of an average daily product; and that average daily product is determined in so crafty a way that no Cyclops would be done with it in 24 hours. In dry words, the R glement itself declares with true Russian irony that by 12 working-days one must understand the product of the manual labour of 36 days, by 1 day of field labour 3 days, and by 1 day of wood carrying in like manner three times as much. In all, 42 corv e days. To this had to be added the so-called jobagie, service due to the lord for extraordinary occasions. In proportion to the size of its population, every village has to furnish annually a definite contingent to the jobagie. This additional corv e is estimated at 14 days for each Wallachian peasant. Thus the prescribed corv e amounts to 56 working-days yearly. But the agricultural year in Wallachia numbers in consequence of the severe climate only 210 days, of which 40 for Sundays and holidays, 30 on an average for bad weather, together 70 days, do not count. 140 working-days remain. The ratio of the corv e to the necessary labour 56/84 or 66 2/3 % gives a much smaller rate of surplus-value than that which regulates the labour of the English agricultural or factory labourer. This is, however, only the legally prescribed corv e. And in a spirit yet more liberal than the English Factory Acts, the R glement organique has known how to facilitate its own evasion. After it has made 56 days out of 12, the nominal day s work of each of the 56 corv e days is again so arranged that a portion of it must fall on the ensuing day. In one day, e.g., must be weeded an extent of land, which, for this work, especially in maize plantations, needs twice as much time. The legal day s work for some kinds of agricultural labour is interpretable in such a way that the day begins in May and ends in October. In Moldavia conditions are still harder. If the R glement organique of the Danubian provinces was a positive expression of the greed for surplus-labour which every paragraph legalised, the English Factory Acts are the negative expression of the same greed. These acts curb the passion of capital for a limitless draining of labour-power, by forcibly limiting the working-day by state regulations, made by a state that is ruled by capitalist-and landlord. Apart from the working-class movement that daily grew more threatening, the limiting of factory labour was dictated by the same necessity which spread guano over the English fields. The same blind eagerness for plunder that in the one case exhausted the soil, had, in the other, torn up by the roots the living force of the nation. Periodical epidemics speak on this point as clearly as the diminishing military standard in Germany and France. The Factory Act of 1850 now in force (1867) allows for the average working-day 10 hours, i.e., for the first 5 days 12 hours from 6 a.m. to 6 p.m., including an hour for breakfast, and an hour for dinner, and thus leaving 10 working-hours, and 8 hours for Saturday, from 6 a.m. to 2 p.m., of which an hour is subtracted for breakfast. 60 working-hours are left, 10 for each of the first 5 days, 7 for the last. Certain guardians of these laws are appointed, Factory Inspectors, directly under the Home Secretary, whose reports are published half-yearly, by order of Parliament. They give regular and official statistics of the capitalistic greed for surplus-labour. Let us listen, for a moment, to the Factory Inspectors. Crises during which production is interrupted and the factories work short time, i.e., for only a part of the week, naturally do not affect the tendency to extend the working-day. The less business there is, the more profit has to be made on the business done. The less time spent in work, the more of that time has to be turned into surplus labour-time. Thus the Factory Inspector s report on the period of the crisis from 1857 to 1858: The same phenomenon was reproduced on a smaller scale during the frightful cotton-crises from 1861 to 1865. These small thefts of capital from the labourer s meal and recreation time, the factory inspectors also designate as petty pilferings of minutes, snatching a few minutes, or, as the labourers technically called them, nibbling and cribbling at meal-times. It is evident that in this atmosphere the formation of surplus-value by surplus-labour, is no secret. Nothing is from this point of view more characteristic than the designation of the workers who work full time as full-timers, and the children under 13 who are only allowed to work 6 hours as half-timers. The worker is here nothing more than personified labour-time. All individual distinctions are merged in those of full-timers and half-timers. We have hitherto considered the tendency to the extension of the working-day, the were-wolf s hunger for surplus-labour in a department where the monstrous exactions, not surpassed, says an English bourgeois economist, by the cruelties of the Spaniards to the American red-skins, caused capital at last to be bound by the chains of legal regulations. Now, let us cast a glance at certain branches of production in which the exploitation of labour is either free from fetters to this day, or was so yesterday. The potteries of Staffordshire have, during the last 22 years, been the subject of three parliamentary inquiries. The result is embodied in Mr. Scriven s Report of 1841 to the Children s Employment Commissioners, in the report of Dr. Greenhow of 1860 published by order of the medical officer of the Privy Council (Public Health, 3rd Report, 112-113), lastly, in the report of Mr. Longe of 1862 in the First Report of the Children s Employment Commission, of the 13th June, 1863. For my purpose it is enough to take, from the reports of 1860 and 1863, some depositions of the exploited children themselves. From the children we may form an opinion as to the adults, especially the girls and women, and that in a branch of industry by the side of which cotton-spinning appears an agreeable and healthful occupation. William Wood, 9 years old, was 7 years and 10 months when he began to work. He ran moulds (carried ready-moulded articles into the drying-room, afterwards bringing back the empty mould) from the beginning. He came to work every day in the week at 6 a.m., and left off about 9 p.m. I work till 9 o clock at night six days in the week. I have done so seven or eight weeks. Fernyhough, a boy of ten: Dr. Greenhow states that the average duration of life in the pottery districts of Stoke-on-Trent, and Wolstanton is extraordinarily short. Although in the district of Stoke, only 36.6% and in Wolstanton only 30.4% of the adult male population above 20 are employed in the potteries, among the men of that age in the first district more than half, in the second, nearly 2/5 of the whole deaths are the result of pulmonary diseases among the potters. Dr. Boothroyd, a medical practitioner at Hanley, says: In like manner another doctor, Mr. M Bean: These statements are taken from the report of Dr. Greenhow in 1860. From the report of the Commissioners in 1863, the following: Dr. J. T. Arledge, senior physician of the North Staffordshire Infirmary, says: Mr. Charles Parsons, late house surgeon of the same institution, writes in a letter to Commissioner Longe, amongst other things: The manufacture of lucifer matches dates from 1833, from the discovery of the method of applying phosphorus to the match itself. Since 1845 this manufacture has rapidly developed in England, and has extended especially amongst the thickly populated parts of London as well as in Manchester, Birmingham, Liverpool, Bristol, Norwich, Newcastle and Glasgow. With it has spread the form of lockjaw, which a Vienna physician in 1845 discovered to be a disease peculiar to lucifer-matchmakers. Half the workers are children under thirteen, and young persons under eighteen. The manufacture is on account of its unhealthiness and unpleasantness in such bad odour that only the most miserable part of the labouring class, half-starved widows and so forth, deliver up their children to it, the ragged, half-starved, untaught children. Of the witnesses that Commissioner White examined (1863), 270 were under 18, 50 under 10, 10 only 8, and 5 only 6 years old. A range of the working-day from 12 to 14 or 15 hours, night-labour, irregular meal-times, meals for the most part taken in the very workrooms that are pestilent with phosphorus. Dante would have found the worst horrors of his Inferno surpassed in this manufacture. In the manufacture of paper-hangings the coarser sorts are printed by machine; the finer by hand (block-printing). The most active business months are from the beginning of October to the end of April. During this time the work goes on fast and furious without intermission from 6 a.m. to 10 p.m. or further into the night. J. Leach deposes: Still this same Mr. Smith, who is so extremely devoted to the pluralis majestatis [the Royal we, i.e., speaking on behalf of his subjects], adds with a smile, "Machine-work is not great. So the employers in the block-printing say: Hand labour is more healthy than machine work. On the whole, manufacturers declare with indignation against the proposal to stop the machines at least during meal-times. The report of the Commission opines with na vet that the fear of some leading firms of losing time, i.e., the time for appropriating the labour of others, and thence losing profit is not a sufficient reason for allowing children under 13, and young persons under 18, working 12 to 16 hours per day, to lose their dinner, nor for giving it to them as coal and water are supplied to the steam-engine, soap to wool, oil to the wheel as merely auxiliary material to the instruments of labour, during the process of production itself. No branch of industry in England (we do not take into account the making of bread by machinery recently introduced) has preserved up to the present day a method of production so archaic, so as we see from the poets of the Roman Empire pre-christian, as baking. But capital, as was said earlier, is at first indifferent as to the technical character of the labour-process; it begins by taking it just as it finds it. The incredible adulteration of bread, especially in London, was first revealed by the House of Commons Committee on the adulteration of articles of food (1855-56), and Dr. Hassall s work, Adulterations detected. The consequence of these revelations was the Act of August 6th, 1860, for preventing the adulteration of articles of food and drink, an inoperative law, as it naturally shows the tenderest consideration for every Free-trader who determines by the buying or selling of adulterated commodities to turn an honest penny. The Committee itself formulated more or less na vely its conviction that Free-trade meant essentially trade with adulterated, or as the English ingeniously put it, sophisticated goods. In fact this kind of sophistry knows better than Protagoras how to make white black, and black white, and better than the Eleatics how to demonstrate ad oculos [before your own eyes] that everything is only appearance. At all events the Committee had directed the attention of the public to its daily bread, and therefore to the baking trade. At the same time in public meetings and in petitions to Parliament rose the cry of the London journeymen bakers against their over-work, &c. The cry was so urgent that Mr. H. S. Tremenheere, also a member of the Commission of 1863 several times mentioned, was appointed Royal Commissioner of Inquiry. His report, together with the evidence given, roused not the heart of the public but its stomach. Englishmen, always well up in the Bible, knew well enough that man, unless by elective grace a capitalist, or landlord, or sinecurist, is commanded to eat his bread in the sweat of his brow, but they did not know that he had to eat daily in his bread a certain quantity of human perspiration mixed with the discharge of abscesses, cobwebs, dead black-beetles, and putrid German yeast, without counting alum, sand, and other agreeable mineral ingredients. Without any regard to his holiness, Free-trade, the free baking-trade was therefore placed under the supervision of the State inspectors (Close of the Parliamentary session of 1863), and by the same Act of Parliament, work from 9 in the evening to 5 in the morning was forbidden for journeymen bakers under 18. The last clause speaks volumes as to the over-work in this old-fashioned, homely line of business. Even the bourgeois intellect understands the position of the underselling masters. The unpaid labour of the men was made the source whereby the competition was carried on. And the full-priced baker denounces his underselling competitors to the Commission of Inquiry as thieves of foreign labour and adulterators. The adulteration of bread and the formation of a class of bakers that sells the bread below the full price, date from the beginning of the 18th century, from the time when the corporate character of the trade was lost, and the capitalist in the form of the miller or flour-factor, rises behind the nominal master baker. Thus was laid the foundation of capitalistic production in this trade, of the unlimited extension of the working-day and of night-labour, although the latter only since 1824 gained a serious footing, even in London. After what has just been said, it will be understood that the Report of the Commission classes journeymen bakers among the short-lived labourers, who, having by good luck escaped the normal decimation of the children of the working-class, rarely reach the age of 42. Nevertheless, the baking trade is always overwhelmed with applicants. The sources of the supply of these labour-powers to London are Scotland, the western agricultural districts of England, and Germany. In the years 1858-60, the journeymen bakers in Ireland organised at their own expense great meetings to agitate against night and Sunday work. The public e.g., at the Dublin meeting in May, 1860 took their part with Irish warmth. As a result of this movement, day-labour alone was successfully established in Wexford, Kilkenny, Clonmel, Waterford, &c. The Committee of the English Government, which Government, in Ireland, is armed to the teeth, and generally knows how to show it, remonstrates in mild, though funereal, tones with the implacable master bakers of Dublin, Limerick, Cork, &c.: So far, we have dealt with Ireland. On the other side of the channel, in Scotland, the agricultural labourer, the ploughman, protests against his 13-14 hours work in the most inclement climate, with 4 hours additional work on Sunday (in this land of Sabbatarians!), whilst, at the same time, three railway men are standing before a London coroner s jury a guard, an engine-driver, a signalman. A tremendous railway accident has hurried hundreds of passengers into another world. The negligence of the employee is the cause of the misfortune. They declare with one voice before the jury that ten or twelve years before, their labour only lasted eight hours a-day. During the last five or six years it had been screwed up to 14, 18, and 20 hours, and under a specially severe pressure of holiday-makers, at times of excursion trains, it often lasted for 40 or 50 hours without a break. They were ordinary men, not Cyclops. At a certain point their labour-power failed. Torpor seized them. Their brain ceased to think, their eyes to see. The thoroughly respectable British jurymen answered by a verdict that sent them to the next assizes on a charge of manslaughter, and, in a gentle rider to their verdict, expressed the pious hope that the capitalistic magnates of the railways would, in future, be more extravagant in the purchase of a sufficient quantity of labour-power, and more abstemious, more self-denying, more thrifty, in the draining of paid labour-power. From the motley crowd of labourers of all callings, ages, sexes, that press on us more busily than the souls of the slain on Ulysses, on whom without referring to the Blue books under their arms we see at a glance the mark of over-work, let us take two more figures whose striking contrast proves that before capital all men are alike a milliner and a blacksmith. In the last week of June, 1863, all the London daily papers published a paragraph with the sensational heading, Death from simple over-work. It dealt with the death of the milliner, Mary Anne Walkley, 20 years of age, employed in a highly-respectable dressmaking establishment, exploited by a lady with the pleasant name of Elise. The old, often-told story, was once more recounted. This girl worked, on an average, 16 hours, during the season often 30 hours, without a break, whilst her failing labour-power was revived by occasional supplies of sherry, port, or coffee. It was just now the height of the season. It was necessary to conjure up in the twinkling of an eye the gorgeous dresses for the noble ladies bidden to the ball in honour of the newly-imported Princess of Wales. Mary Anne Walkley had worked without intermission for 26 hours, with 60 other girls, 30 in one room, that only afforded 1/3 of the cubic feet of air required for them. At night, they slept in pairs in one of the stifling holes into which the bedroom was divided by partitions of board. And this was one of the best millinery establishments in London. Mary Anne Walkley fell ill on the Friday, died on Sunday, without, to the astonishment of Madame Elise, having previously completed the work in hand. The doctor, Mr. Keys, called too late to the death-bed, duly bore witness before the coroner s jury that In order to give the doctor a lesson in good manners, the coroner s jury thereupon brought in a verdict that Our white slaves, cried the Morning Star, the organ of the Free-traders, Cobden and Bright, our white slaves, who are toiled into the grave, for the most part silently pine and die. Constant capital, the means of production, considered from the standpoint of the creation of surplus-value, only exist to absorb labour, and with every drop of labour a proportional quantity of surplus-labour. While they fail to do this, their mere existence causes a relative loss to the capitalist, for they represent during the time they lie fallow, a useless advance of capital. And this loss becomes positive and absolute as soon as the intermission of their employment necessitates additional outlay at the recommencement of work. The prolongation of the working-day beyond the limits of the natural day, into the night, only acts as a palliative. It quenches only in a slight degree the vampire thirst for the living blood of labour. To appropriate labour during all the 24 hours of the day is, therefore, the inherent tendency of capitalist production. But as it is physically impossible to exploit the same individual labour-power constantly during the night as well as the day, to overcome this physical hindrance, an alternation becomes necessary between the workpeople whose powers are exhausted by day, and those who are used up by night. This alternation may be effected in various ways; e.g., it may be so arranged that part of the workers are one week employed on day-work, the next week on night-work. It is well known that this relay system, this alternation of two sets of workers, held full sway in the full-blooded youth-time of the English cotton manufacture, and that at the present time it still flourishes, among others, in the cotton spinning of the Moscow district. This 24 hours process of production exists to-day as a system in many of the branches of industry of Great Britain that are still free, in the blast-furnaces, forges, plate-rolling mills, and other metallurgical establishments in England, Wales, and Scotland. The working-time here includes, besides the 24 hours of the 6 working-days, a great part also of the 24 hours of Sunday. The workers consist of men and women, adults and children of both sexes. The ages of the children and young persons run through all intermediate grades, from 8 (in some cases from 6) to 18. In some branches of industry, the girls and women work through the night together with the males. Placing on one side the generally injurious influence of night-labour, the duration of the process of production, unbroken during the 24 hours, offers very welcome opportunities of exceeding the limits of the normal working-day, e.g., in the branches of industry already mentioned, which are of an exceedingly fatiguing nature; the official working-day means for each worker usually 12 hours by night or day. But the over-work beyond this amount is in many cases, to use the words of the English official report, truly fearful. Let us now hear how capital itself regards this 24 hours system. The extreme forms of the system, its abuse in the cruel and incredible extension of the working-day are naturally passed over in silence. Capital only speaks of the system in its normal form. Messrs. Naylor & Vickers, steel manufacturers, who employ between 600 and 700 persons, among whom only 10 per cent are under 18, and of those, only 20 boys under 18 work in night sets, thus express themselves: Mr. J. Ellis, one of the firm of Messrs. John Brown & Co., steel and iron works, employing about 3,000 men and boys, part of whose operations, namely, iron and heavier steel work, goes on night and day by relays, states that in the heavier steel work one or two boys are employed to a score or two men. Their concern employs upwards of 500 boys under 18, of whom about 1/3 or 170 are under the age of 13. With reference to the proposed alteration of the law, Mr. Ellis says: (Messrs. Naylor & Vickers, on the other hand, in conformity with the interest of their business, considered that periodically changed night-labour might possibly do more harm than continual night-labour.) The Cyclops Steel and Iron Works, of Messrs. Cammell & Co., are concocted on the same large scale as those of the above-mentioned John Brown & Co. The managing director had handed in his evidence to the Government Commissioner, Mr. White, in writing. Later he found it convenient to suppress the MS. when it had been returned to him for revision. Mr. White, however, has a good memory. He remembered quite clearly that for the Messrs. Cyclops the forbidding of the night-labour of children and young persons would be impossible, it would be tantamount to stopping their works, and yet their business employs little more than 6% of boys under 18, and less than 1% under 13. On the same subject Mr. E. F. Sanderson, of the firm of Sanderson, Bros., & Co., steel rolling-mills and forges, Attercliffe, says: Mr. Sanderson does not know how much he pays the children, but And why not? Why could not boys learn their handicraft in the day-time? Your reason? In other words, Messrs. Sanderson would have to pay part of the wages of the adult men out of their own pockets instead of by the night-work of the boys. Messrs. Sanderson s profit would thus fall to some extent, and this is the good Sandersonian reason why boys cannot learn their handicraft in the day. In addition to this, it would throw night-labour on those who worked instead of the boys, which they would not be able to stand. The difficulties in fact would be so great that they would very likely lead to the giving up of night-work altogether, and as far as the work itself is concerned, says E. F. Sanderson, this would suit as well, but But Messrs. Sanderson have something else to make besides steel. Steel-making is simply a pretext for surplus-value making. The smelting furnaces, rolling-mills, &c., the buildings, machinery, iron, coal, &c., have something more to do than transform themselves into steel. They are there to absorb surplus-labour, and naturally absorb more in 24 hours than in 12. In fact they give, by grace of God and law, the Sandersons a cheque on the working-time of a certain number of hands for all the 24 hours of the day, and they lose their character as capital, are therefore a pure loss for the Sandersons, as soon as their function of absorbing labour is interrupted. But why should these Sandersons pretend to a privilege not enjoyed by the other capitalists who only work during the day, and whose buildings, machinery, raw material, therefore lie idle during the night? E. F. Sanderson answers in the name of all the Sandersons: What is a working-day? What is the length of time during which capital may consume the labour-power whose daily value it buys? How far may the working-day be extended beyond the working-time necessary for the reproduction of labour-power itself? It has been seen that to these questions capital replies: the working-day contains the full 24 hours, with the deduction of the few hours of repose without which labour-power absolutely refuses its services again. Hence it is self-evident that the labourer is nothing else, his whole life through, than labour-power, that therefore all his disposable time is by nature and law labour-time, to be devoted to the self-expansion of capital. Time for education, for intellectual development, for the fulfilling of social functions and for social intercourse, for the free-play of his bodily and mental activity, even the rest time of Sunday (and that in a country of Sabbatarians!) moonshine! But in its blind unrestrainable passion, its were-wolf hunger for surplus-labour, capital oversteps not only the moral, but even the merely physical maximum bounds of the working-day. It usurps the time for growth, development, and healthy maintenance of the body. It steals the time required for the consumption of fresh air and sunlight. It higgles over a meal-time, incorporating it where possible with the process of production itself, so that food is given to the labourer as to a mere means of production, as coal is supplied to the boiler, grease and oil to the machinery. It reduces the sound sleep needed for the restoration, reparation, refreshment of the bodily powers to just so many hours of torpor as the revival of an organism, absolutely exhausted, renders essential. It is not the normal maintenance of the labour-power which is to determine the limits of the working-day; it is the greatest possible daily expenditure of labour-power, no matter how diseased, compulsory, and painful it may be, which is to determine the limits of the labourers period of repose. Capital cares nothing for the length of life of labour-power. All that concerns it is simply and solely the maximum of labour-power, that can be rendered fluent in a working-day. It attains this end by shortening the extent of the labourer s life, as a greedy farmer snatches increased produce from the soil by robbing it of its fertility. The capitalistic mode of production (essentially the production of surplus-value, the absorption of surplus-labour), produces thus, with the extension of the working-day, not only the deterioration of human labour-power by robbing it of its normal, moral and physical, conditions of development and function. It produces also the premature exhaustion and death of this labour-power itself. It extends the labourer s time of production during a given period by shortening his actual life-time. But the value of the labour-power includes the value of the commodities necessary for the reproduction of the worker, or for the keeping up of the working-class. If then the unnatural extension of the working-day, that capital necessarily strives after in its unmeasured passion for self-expansion, shortens the length of life of the individual labourer, and therefore the duration of his labour-power, the forces used up have to be replaced at a more rapid rate and the sum of the expenses for the reproduction of labour-power will be greater; just as in a machine the part of its value to be reproduced every day is greater the more rapidly the machine is worn out. It would seem therefore that the interest of capital itself points in the direction of a normal working-day. The slave-owner buys his labourer as he buys his horse. If he loses his slave, he loses capital that can only be restored by new outlay in the slave-mart. Mutato nomine de te fabula narratur [It is of you that the story is told Horace]. For slave-trade read labour-market, for Kentucky and Virginia, Ireland and the agricultural districts of England, Scotland, and Wales, for Africa, Germany. We heard how over-work thinned the ranks of the bakers in London. Nevertheless, the London labour-market is always over-stocked with German and other candidates for death in the bakeries. Pottery, as we saw, is one of the shortest-lived industries. Is there any want therefore of potters? Josiah Wedgwood, the inventor of modern pottery, himself originally a common workman, said in 1785 before the House of Commons that the whole trade employed from 15,000 to 20,000 people. In the year 1861 the population alone of the town centres of this industry in Great Britain numbered 101,302. No doubt in certain epochs of feverish activity the labour-market shows significant gaps. In 1834, e.g. But then the manufacturers proposed to the Poor Law Commissioners that they should send the surplus-population of the agricultural districts to the north, with the explanation that the manufacturers would absorb and use it up. The Bury Guardian said, on the completion of the French treaty, that 10,000 additional hands could be absorbed by Lancashire, and that 30,000 or 40,000 will be needed. After the flesh agents and sub-agents had in vain sought through the agricultural districts, What experience shows to the capitalist generally is a constant excess of population, i.e., an excess in relation to the momentary requirements of surplus-labour-absorbing capital, although this excess is made up of generations of human beings stunted, short-lived, swiftly replacing each other, plucked, so to say, before maturity. And, indeed, experience shows to the intelligent observer with what swiftness and grip the capitalist mode of production, dating, historically speaking, only from yesterday, has seized the vital power of the people by the very root shows how the degeneration of the industrial population is only retarded by the constant absorption of primitive and physically uncorrupted elements from the country shows how even the country labourers, in spite of fresh air and the principle of natural selection, that works so powerfully amongst them, and only permits the survival of the strongest, are already beginning to die off. Capital that has such good reasons for denying the sufferings of the legions of workers that surround it, is in practice moved as much and as little by the sight of the coming degradation and final depopulation of the human race, as by the probable fall of the earth into the sun. In every stockjobbing swindle every one knows that some time or other the crash must come, but every one hopes that it may fall on the head of his neighbour, after he himself has caught the shower of gold and placed it in safety. Apr s moi le d luge! [After me, the flood] is the watchword of every capitalist and of every capitalist nation. Hence Capital is reckless of the health or length of life of the labourer, unless under compulsion from society. To the out-cry as to the physical and mental degradation, the premature death, the torture of over-work, it answers: Ought these to trouble us since they increase our profits? But looking at things as a whole, all this does not, indeed, depend on the good or ill will of the individual capitalist. Free competition brings out the inherent laws of capitalist production, in the shape of external coercive laws having power over every individual capitalist. The establishment of a normal working-day is the result of centuries of struggle between capitalist and labourer. The history of this struggle shows two opposed tendencies. Compare, e.g., the English factory legislation of our time with the English labour Statutes from the 14th century to well into the middle of the 18th. Whilst the modern Factory Acts compulsorily shortened the working-day, the earlier statutes tried to lengthen it by compulsion. Of course the pretensions of capital in embryo when, beginning to grow, it secures the right of absorbing a quantum sufficit [sufficient quantity] of surplus-labour, not merely by the force of economic relations, but by the help of the State appear very modest when put face to face with the concessions that, growling and struggling, it has to make in its adult condition. It takes centuries ere the free labourer, thanks to the development of capitalistic production, agrees, i.e., is compelled by social conditions, to sell the whole of his active life, his very capacity for work, for the price of the necessaries of life, his birth-right for a mess of pottage. Hence it is natural that the lengthening of the working-day, which capital, from the middle of the 14th to the end of the 17th century, tries to impose by State-measures on adult labourers, approximately coincides with the shortening of the working-day which, in the second half of the 19th century, has here and there been effected by the State to prevent the coining of children s blood into capital. That which to-day, e.g., in the State of Massachusetts, until recently the freest State of the North-American Republic, has been proclaimed as the statutory limit of the labour of children under 12, was in England, even in the middle of the 17th century, the normal working-day of able-bodied artisans, robust labourers, athletic blacksmiths. The first Statute of Labourers (23 Edward III., 1349) found its immediate pretext (not its cause, for legislation of this kind lasts centuries after the pretext for it has disappeared) in the great plague that decimated the people, so that, as a Tory writer says, The difficulty of getting men to work on reasonable terms (i.e., at a price that left their employers a reasonable quantity of surplus-labour) grew to such a height as to be quite intolerable. Reasonable wages were, therefore, fixed by law as well as the limits of the working-day. The latter point, the only one that here interests us, is repeated in the Statute of 1496 (Henry VII.). The working-day for all artificers and field labourers from March to September ought, according to this statute (which, however, could not be enforced), to last from 5 in the morning to between 7 and 8 in the evening. But the meal-times consist of 1 hour for breakfast, 1 hours for dinner, and an hour for noon-meate, i.e., exactly twice as much as under the factory acts now in force. In winter, work was to last from 5 in the morning until dark, with the same intervals. A statute of Elizabeth of 1562 leaves the length of the working-day for all labourers hired for daily or weekly wage untouched, but aims at limiting the intervals to 2 hours in the summer, or to 2 in the winter. Dinner is only to last 1 hour, and the afternoon-sleep of half an hour is only allowed between the middle of May and the middle of August. For every hour of absence 1d. is to be subtracted from the wage. In practice, however, the conditions were much more favourable to the labourers than in the statute-book. William Petty, the father of Political Economy, and to some extent the founder of Statistics, says in a work that he published in the last third of the 17th century: Was not Dr. Andrew Ure right in crying down the 12 hours bill of 1833 as a retrogression to the times of the dark ages? It is true these regulations contained in the statute mentioned by Petty, apply also to apprentices. But the condition of child-labour, even at the end of the 17th century, is seen from the following complaint: Still, during the greater part of the 18th century, up to the epoch of Modern Industry and machinism, capital in England had not succeeded in seizing for itself, by the payment of the weekly value of labour-power, the whole week of the labourer, with the exception, however, of the agricultural labourers. The fact that they could live for a whole week on the wage of four days, did not appear to the labourers a sufficient reason that they should work the other two days for the capitalist. One party of English economists, in the interest of capital, denounces this obstinacy in the most violent manner, another party defends the labourers. Let us listen, e.g., to the contest between Postlethwayt whose Dictionary of Trade then had the same reputation as the kindred works of MacCulloch and MacGregor to-day, and the author (already quoted) of the Essay on Trade and Commerce. Postlethwayt says among other things: Thereupon the author of the Essay on Trade and Commerce replies: To this end, and for extirpating idleness debauchery and excess, promoting a spirit of industry, lowering the price of labour in our manufactories, and easing the lands of the heavy burden of poor s rates, our faithful Eckart of capital proposes this approved device: to shut up such labourers as become dependent on public support, in a word, paupers, in an ideal workhouse. Such ideal workhouse must be made a House of Terror, and not an asylum for the poor, where they are to be plentifully fed, warmly and decently clothed, and where they do but little work. In this House of Terror, this ideal workhouse, the poor shall work 14 hours in a day, allowing proper time for meals, in such manner that there shall remain 12 hours of neat-labour. Twelve working-hours daily in the Ideal Workhouse, in the House of Terror of 1770! 63 years later, in 1833, when the English Parliament reduced the working-day for children of 13 to 18, in four branches of industry to 12 full hours, the judgment day of English Industry had dawned! In 1852, when Louis Bonaparte sought to secure his position with the bourgeoisie by tampering with the legal working-day, the French working people cried out with one voice the law that limits the working-day to 12 hours is the one good that has remained to us of the legislation of the Republic! At Z rich the work of children over 10, is limited to 12 hours; in Aargau in 1862, the work of children between 13 and 16, was reduced from 12 to 12 hours; in Austria in 1860, for children between 14 and 16, the same reduction was made. What a progress, since 1770! Macaulay would shout with exultation! The House of Terror for paupers of which the capitalistic soul of 1770 only dreamed, was realised a few years later in the shape of a gigantic Workhouse for the industrial worker himself. It is called the Factory. And the ideal this time fades before the reality. After capital had taken centuries in extending the working-day to its normal maximum limit, and then beyond this to the limit of the natural day of 12 hours, there followed on the birth of machinism and modern industry in the last third of the 18th century, a violent encroachment like that of an avalanche in its intensity and extent. All bounds of morals and nature, age and sex, day and night, were broken down. Even the ideas of day and night, of rustic simplicity in the old statutes, became so confused that an English judge, as late as 1860, needed a quite Talmudic sagacity to explain judicially what was day and what was night. Capital celebrated its orgies. As soon as the working-class, stunned at first by the noise and turmoil of the new system of production, recovered, in some measure, its senses, its resistance began, and first in the native land of machinism, in England. For 30 years, however, the concessions conquered by the workpeople were purely nominal. Parliament passed 5 labour Laws between 1802 and 1833, but was shrewd enough not to vote a penny for their carrying out, for the requisite officials, &c. A normal working-day for modern industry only dates from the Factory Act of 1833, which included cotton, wool, flax, and silk factories. Nothing is more characteristic of the spirit of capital than the history of the English Factory Acts from 1833 to 1864. The Act of 1833 declares the ordinary factory working-day to be from half-past five in the morning to half-past eight in the evening and within these limits, a period of 15 hours, it is lawful to employ young persons (i.e., persons between 13 and 18 years of age), at any time of the day, provided no one individual young person should work more than 12 hours in any one day, except in certain cases especially provided for. The 6th section of the Act provided. That there shall be allowed in the course of every day not less than one and a half hours for meals to every such person restricted as hereinbefore provided. The employment of children under 9, with exceptions mentioned later was forbidden; the work of children between 9 and 13 was limited to 8 hours a day, night-work, i.e., according to this Act, work between 8:30 p.m. and 5:30 a.m., was forbidden for all persons between 9 and 18. The law-makers were so far from wishing to trench on the freedom of capital to exploit adult labour-power, or, as they called it, the freedom of labour, that they created a special system in order to prevent the Factory Acts from having a consequence so outrageous. ... Under the name of System of Relays, this plan was therefore carried out, so that, e.g., from 5.30 a.m. until 1.30 in the afternoon, one set of children between 9 and 13, and from 1.30 p.m. to 8.30 in the evening another set were put to, &c. In order to reward the manufacturers for having, in the most barefaced way, ignored all the Acts as to children s labour passed during the last twenty-two years, the pill was yet further gilded for them. Parliament decreed that after March 1st, 1834, no child under 11, after March 1st 1835, no child under 12, and after March 1st, 1836, no child under 13 was to work more than eight hours in a factory. This liberalism, so full of consideration for capital, was the more noteworthy as. Dr. Farre, Sir A. Carlisle, Sir B. Brodie, Sir C. Bell, Mr. Guthrie, &c., in a word, the most distinguished physicians and surgeons in London, had declared in their evidence before the House of Commons, that there was danger in delay. Dr. Farre expressed himself still more coarsely. That same reformed Parliament, which in its delicate consideration for the manufacturers, condemned children under 13, for years to come, to 72 hours of work per week in the Factory Hell, on the other hand, in the Emancipation Act, which also administered freedom drop by drop, forbade the planters, from the outset, to work any negro slave more than 45 hours a week. But in no wise conciliated, capital now began a noisy agitation that went on for several years. It turned chiefly on the age of those who, under the name of children, were limited to 8 hours work, and were subject to a certain amount of compulsory education. According to capitalistic anthropology, the age of childhood ended at 10, or at the outside, at 11. The more nearly the time approached for the coming into full force of the Factory Act, the fatal year 1836, the more wildly raged the mob of manufacturers. They managed, in fact, to intimidate the government to such an extent that in 1835 it proposed to lower the limit of the age of childhood from 13 to 12. In the meantime the pressure from without grew more threatening. Courage failed the House of Commons. It refused to throw children of 13 under the Juggernaut Car of capital for more than 8 hours a day, and the Act of 1833 came into full operation. It remained unaltered until June, 1844. In the ten years during which it regulated factory work, first in part, and then entirely, the official reports of the factory inspectors teem with complaints as to the impossibility of putting the Act into force. As the law of 1833 left it optional with the lords of capital during the 15 hours, from 5.30 a.m. to 8.30 p.m., to make every young person, and every child begin, break off, resume, or end his 12 or 8 hours at any moment they liked, and also permitted them to assign to different persons, different times for meals, these gentlemen soon discovered a new system of relays, by which the labour-horses were not changed at fixed stations, but were constantly re-harnessed at changing stations. We do not pause longer on the beauty of this system, as we shall have to return to it later. But this much is clear at the first glance: that this system annulled the whole Factory Act, not only in the spirit, but in the letter. How could factory inspectors, with this complex bookkeeping in respect to each individual child or young person, enforce the legally determined work-time and the granting of the legal mealtimes? In a great many of the factories, the old brutalities soon blossomed out again unpunished. In an interview with the Home Secretary (1844), the factory inspectors demonstrated the impossibility of any control under the newly invented relay system. In the meantime, however, circumstances had greatly changed. The factory hands, especially since 1838, had made the Ten Hours Bill their economic, as they had made the Charter their political, election-cry. Some of the manufacturers, even, who had managed their factories in conformity with the Act of 1833, overwhelmed Parliament with memorials on the immoral competition of their false brethren whom greater impudence, or more fortunate local circumstances, enabled to break the law. Moreover, however much the individual manufacturer might give the rein to his old lust for gain, the spokesmen and political leaders of the manufacturing class ordered a change of front and of speech towards the workpeople. They had entered upon the contest for the repeal of the Corn Laws, and needed the workers to help them to victory. They promised therefore, not only a double-sized loaf of bread, but the enactment of the Ten Hours Bill in the Free-trade millennium. Thus they still less dared to oppose a measure intended only to make the law of 1833 a reality. Threatened in their holiest interest, the rent of land, the Tories thundered with philanthropic indignation against the nefarious practices of their foes. This was the origin of the additional Factory Act of June 7th, 1844. It came into effect on September 10th, 1844. It places under protection a new category of workers, viz., the women over 18. They were placed in every respect on the same footing as the young persons, their work time limited to twelve hours, their night-labour forbidden, &c. For the first time, legislation saw itself compelled to control directly and officially the labour of adults. In the Factory Report of 1844-1845, it is said with irony: To get rid of the abuses of the spurious relay system, the law established besides others the following important regulations: So that if A, e.g., begins work at 8 in the morning, and B at 10, B s work-day must nevertheless end at the same hour as A s. The time shall be regulated by a public clock, for example, the nearest railway clock, by which the factory clock is to be set. The occupier is to hang up a legible printed notice stating the hours for the beginning and ending of work and the times allowed for the several meals. Children beginning work before 12 noon may not be again employed after I p.m. The afternoon shift must therefore consist of other children than those employed in the morning. Of the hour and a half for meal-times, It has been seen that these minutiae, which, with military uniformity, regulate by stroke of the clock the times, limits, pauses of the work were not at all the products of Parliamentary fancy. They developed gradually out of circumstances as natural laws of the modern mode of production. Their formulation, official recognition, and proclamation by the State, were the result of a long struggle of classes. One of their first consequences was that in practice the working-day of the adult males in factories became subject to the same limitations, since in most processes of production the co-operation of the children. young persons, and women is indispensable. On the whole, therefore, during the period from 1844 to 1847, the 12 hours working-day became general and uniform in all branches of industry under the Factory Act. The manufacturers, however, did not allow this progress without a compensating retrogression. At their instigation the House of Commons reduced the minimum age for exploitable children from 9 to 8, in order to assure that additional supply of factory children which is due to capitalists, according to divine and human law. The years 1846-47 are epoch-making in the economic history of England. The Repeal of the Corn Laws, and of the duties on cotton and other raw material; Free-trade proclaimed as the guiding star of legislation; in a word, the arrival of the millennium. On the other hand, in the same years, the Chartist movement and the 10 hours agitation reached their highest point. They found allies in the Tories panting for revenge. Despite the fanatical opposition of the army of perjured Free-traders, with Bright and Cobden at their head, the Ten Hours Bill, struggled for so long, went through Parliament. The new Factory Act of June 8th, 1847, enacted that on July 1st, 1847, there should be a preliminary shortening of the working-day for young persons (from 13 to 18), and all females to 11 hours, but that on May 1st, 1848, there should be a definite limitation of the working-day to 10 hours. In other respects, the Act only amended and completed the Acts of 1833 and 1844. Capital now entered upon a preliminary campaign in order to hinder the Act from coming into full force on May 1st, 1848. And the workers themselves, under the presence that they had been taught by experience, were to help in the destruction of their own work. The moment was cleverly chosen. The manufacturers tried to aggravate the natural effect of these circumstances by a general reduction of wages by 10%. This was done so to say, to celebrate the inauguration of the new Free-trade era. Then followed a further reduction of 8 1/3% as soon as the working-day was shortened to 11, and a reduction of double that amount as soon as it was finally shortened to 10 hours. Wherever, therefore, circumstances allowed it, a reduction of wages of at least 25% took place. Under such favourably prepared conditions the agitation among the factory workers for the repeal of the Act of 1847 was begun. Neither lies, bribery, nor threats were spared in this attempt. But all was in vain. Concerning the half-dozen petitions in which workpeople were made to complain of their oppression by the Act, the petitioners themselves declared under oral examination, that their signatures had been extorted from them. They felt themselves oppressed, but not exactly by the Factory Act. But if the manufacturers did not succeed in making the workpeople speak as they wished, they themselves shrieked all the louder in press and Parliament in the name of the workpeople. They denounced the Factory Inspectors as a kind of revolutionary commissioners like those of the French National Convention ruthlessly sacrificing the unhappy factory workers to their humanitarian crotchet. This manoeuvre also failed. Factory Inspector Leonard Horner conducted in his own person, and through his sub-inspectors, many examinations of witnesses in the factories of Lancashire. About 70% of the workpeople examined declared in favour of 10 hours, a much smaller percentage in favour of 11, and an altogether insignificant minority for the old 12 hours. Another friendly dodge was to make the adult males work 12 to 15 hours, and then to blazon abroad this fact as the best proof of what the proletariat desired in its heart of hearts. But the ruthless Factory Inspector Leonard Horner was again to the fore. The majority of the over-times declared: The preliminary campaign of capital thus came to grief, and the Ten Hours Act came into force May 1st, 1848. But meanwhile the fiasco of the Chartist party whose leaders were imprisoned, and whose organisation was dismembered, had shaken the confidence of the English working-class in its own strength. Soon after this the June insurrection in Paris and its bloody suppression united, in England as on the Continent, all fractions of the ruling classes, landlords and capitalists, stock-exchange wolves and shop-keepers, Protectionists and Freetraders, government and opposition, priests and freethinkers, young whores and old nuns, under the common cry for the salvation of Property, Religion, the Family and Society. The working-class was everywhere proclaimed, placed under a ban, under a virtual law of suspects. The manufacturers had no need any longer to restrain themselves. They broke out in open revolt not only against the Ten Hours Act, but against the whole of the legislation that since 1833 had aimed at restricting in some measure the free exploitation of labour-power. It was a pro-slavery rebellion in miniature, carried on for over two years with a cynical recklessness, a terrorist energy all the cheaper because the rebel capitalist risked nothing except the skin of his hands. To understand that which follows we must remember that the Factory Acts of 1833, 1844, and 1847 were all three in force so far as the one did not amend the other: that not one of these limited the working-day of the male worker over 18, and that since 1833 the 15 hours from 5.30 a.m. to 8.30 p.m. had remained the legal day, within the limits of which at first the 12, and later the 10 hours labour of young persons and women had to be performed under the prescribed conditions. The manufacturers began by here and there discharging a part of, in many cases half of the young persons and women employed by them, and then, for the adult males, restoring the almost obsolete night-work. The Ten Hours Act, they cried, leaves no other alternative. Their second step dealt with the legal pauses for meals. Let us hear the Factory Inspectors. After these pleasant demonstrations, Capital preluded its revolt by a step which agreed with the letter of the law of 1844, and was therefore legal. The Act of 1844 certainly prohibited the employment after 1 p.m. of such children, from 8 to 13, as had been employed before noon. But it did not regulate in any way the 6 hours work of the children whose work-time began at 12 midday or later. Children of 8 might, if they began work at noon, be employed from 12 to 1, 1 hour; from 2 to 4 in the afternoon, 2 hours; from 5 to 8.30 in the evening, 3 hours; in all, the legal 6 hours. Or better still. In order to make their work coincide with that of the adult male labourers up to 8.30 p.m., the manufacturers only had to give them no work till 2 in the afternoon, they could then keep them in the factory without intermission till 8.30 in the evening. Workmen and factory inspectors protested on hygienic and moral grounds, but Capital answered: In fact, according to statistics laid before the House of Commons on July 26th, 1850, in spite of all protests, on July 15th, 1850, 3,742 children were subjected to this practice in 257 factories. Still, this was not enough. The Lynx eye of Capital discovered that the Act of 1844 did not allow 5 hours work before mid-day without a pause of at least 30 minutes for refreshment, but prescribed nothing of the kind for work after mid-day. Therefore, it claimed and obtained the enjoyment not only of making children of 8 drudge without intermission from 2 to 8.30 p.m., but also of making them hunger during that time. This Shylock-clinging to the letter of the law of 1844, so far as it regulated children s labour, was but to lead up to an open revolt against the same law, so far as it regulated the labour of young persons and women. It will be remembered that the abolition of the false relay system was the chief aim and object of that law. The masters began their revolt with the simple declaration that the sections of the Act of 1844 which prohibited the ad libitum use of young persons and women in such short fractions of the day of 15 hours as the employer chose, were comparatively harmless so long as the work-time was fixed at 12 hours. But under the Ten Hours Act they were a grievous hardship. They informed the inspectors in the coolest manner that they should place themselves above the letter of the law, and re-introduce the old system on their own account. They were acting in the interests of the ill-advised operatives themselves, in order to be able to pay them higher wages. All these shifts naturally were of no avail. The Factory Inspectors appealed to the Law Courts. But soon such a cloud of dust in the way of petitions from the masters overwhelmed the Home Secretary, Sir George Grey, that in a circular of August 5th, 1848, he recommends the inspectors not But what was the good of summoning the capitalists when the Courts in this case the county magistrates Cobbett s Great Unpaid acquitted them? In these tribunals, the masters sat in judgment on themselves An example. One Eskrigge, cotton-spinner, of the firm of Kershaw, Leese, & Co., had laid before the Factory Inspector of his district the scheme of a relay system intended for his mill. Receiving a refusal, he at first kept quiet. A few months later, an individual named Robinson, also a cotton-spinner, and if not his Man Friday, at all events related to Eskrigge, appeared before the borough magistrates of Stockport on a charge of introducing the identical plan of relays invented by Eskrigge. Four Justices sat, among them three cottonspinners, at their head this same inevitable Eskrigge. Eskrigge acquitted Robinson, and now was of opinion that what was right for Robinson was fair for Eskrigge. Supported by his own legal decision, he introduced the system at once into his own factory. Of course, the composition of this tribunal was in itself a violation of the law. The crown lawyers declared the masters interpretation of the Act of 1848 absurd. But the Saviours of Society would not allow themselves to be turned from their purpose. Leonard Horner reports, Already, in December, 1848, Leonard Horner had a list of 65 manufacturers and 29 overlookers who unanimously declared that no system of supervision could, under this relay system, prevent enormous over-work. Now, the same children and young persons were shifted from the spinning-room to the weaving-room, now, during 15 hours, from one factory to another. How was it possible to control a system which, But altogether independently of actual over-work, this so-called relay system was an offspring of capitalistic fantasy, such as Fourier, in his humorous sketches of Courtes Seances, has never surpassed, except that the attraction of labour was changed into the attraction of capital. Look, for example, at those schemes of the masters which the respectable press praised as models of what a reasonable degree of care and method can accomplish. The personnel of the workpeople was sometimes divided into from 12 to 14 categories, which themselves constantly changed and recharged their constituent parts. During the 15 hours of the factory day, capital dragged in the labourer now for 30 minutes, now for an hour, and then pushed him out again, to drag him into the factory and to thrust him out afresh, hounding him hither and thither, in scattered shreds of time, without ever losing hold of him until the full 10 hours work was done. As on the stage, the same persons had to appear in turns in the different scenes of the different acts. But as an actor during the whole course of the play belongs to the stage, so the operatives, during 15 hours, belonged to the factory, without reckoning the time for going and coming. Thus the hours of rest were turned into hours of enforced idleness, which drove the youths to the pot-house, and the girls to the brothel. At every new trick that the capitalist, from day to day, hit upon for keeping his machinery going 12 or 15 hours without increasing the number of his hands, the worker had to swallow his meals now in this fragment of time, now in that. At the time of the 10 hours agitation, the masters cried out that the working mob petitioned in the hope of obtaining 12 hours wages for 10 hours work. Now they reversed the medal. They paid 10 hours wages for 12 or 15 hours lordship over labour-power. This was the gist of the matter, this the masters interpretation of the 10 hours law! These were the same unctuous Free-traders, perspiring with the love of humanity, who for full 10 years, during the Anti-Corn Law agitation, had preached to the operatives, by a reckoning of pounds, shillings, and pence, that with free importation of corn, and with the means possessed by English industry, 10 hours labour would be quite enough to enrich the capitalists. This revolt of capital, after two years was at last crowned with victory by a decision of one of the four highest Courts of Justice in England, the Court of Exchequer, which in a case brought before it on February 8th, 1850, decided that the manufacturers were certainly acting against the sense of the Act of 1844, but that this Act itself contained certain words that rendered it meaningless. By this decision, the Ten Hours Act was abolished. A crowd of masters, who until then had been afraid of using the relay system for young persons and women, now took it up heart and soul. But on this apparently decisive victory of capital, followed at once a revulsion. The workpeople had hitherto offered a passive, although inflexible and unremitting resistance. They now protested in Lancashire and Yorkshire in threatening meetings. The pretended Ten Hours Act was thus simple humbug, parliamentary cheating, had never existed! The Factory Inspectors urgently warned the Government that the antagonism of classes had arrived at an incredible tension. Some of the masters themselves murmured: And the first birthright of capital is equal exploitation of labour-power by all capitalists. Under these circumstances a compromise between masters and men was effected that received the seal of Parliament in the additional Factory Act of August 5th, 1850. The working-day for young persons and women, was raised from 10 to 10 hours for the first five days of the week, and shortened to 7 on the Saturday. The work was to go on between 6 a.m. and 6 p.m., with pauses of not less than 1 hours for meal-times, these meal-times to be allowed at one and the same time for all, and conformably to the conditions of 1844. By this an end was put to the relay system once for all. For children s labour, the Act of 1844 remained in force. One set of masters, this time as before, secured to itself special seigneurial rights over the children of the proletariat. These were the silk manufacturers. In 1833 they had howled out in threatening fashion, if the liberty of working children of any age for 10 hours a day were taken away, it would stop their works. It would be impossible for them to buy a sufficient number of children over 13. They extorted the privilege they desired. The pretext was shown on subsequent investigation to be a deliberate lie. It did not, however, prevent them, during 10 years, from spinning silk 10 hours a day out of the blood of little children who had to be placed upon stools for the performance of their work. The Act of 1844 certainly robbed them of the liberty of employing children under 11 longer than 6 hours a day. But it secured to them, on the other hand, the privilege of working children between 11 and 13, 10 hours a day, and of annulling in their case the education made compulsory for all other factory children. This time the pretext was The children were slaughtered out-and-out for the sake of their delicate fingers, as in Southern Russia the horned cattle for the sake of their hide and tallow. At length, in 1850, the privilege granted in 1844, was limited to the departments of silk-twisting and silk-winding. But here, to make amends to capital bereft of its freedom, the work-time for children from 11 to 13 was raised from 10 to 10 hours. Pretext: Labour in silk mills was lighter than in mills for other fabrics, and less likely in other respects also to be prejudicial to health. Official medical inquiries proved afterwards that, on the contrary, Despite the protests of the Factory Inspector, renewed every 6 months, the mischief continues to this hour. The Act of 1850 changed the 15 hours time from 6 a.m. to 8.30 p.m., into the 12 hours from 6 a.m. to 6 p.m. for young persons and women only. It did not, therefore, affect children who could always be employed for half an hour before and 2 hours after this period, provided the whole of their labour did not exceed 6 hours. Whilst the bill was under discussion, the Factory Inspectors laid before Parliament statistics of the infamous abuses due to this anomaly. To no purpose. In the background lurked the intention of screwing up, during prosperous years, the working-day of adult males to 15 hours by the aid of the children. The experience of the three following years showed that such an attempt must come to grief against the resistance of the adult male operatives. The Act of 1850 was therefore finally completed in 1853 by forbidding the employment of children in the morning before and in the evening after young persons and women. Henceforth with a few exceptions the Factory Act of 1850 regulated the working-day of all workers in the branches of industry that come under it. Since the passing of the first Factory Act half a century had elapsed. Factory legislation for the first time went beyond its original sphere in the Printworks Act of 1845. The displeasure with which capital received this new extravagance speaks through every line of the Act. It limits the working-day for children from 8 to 13, and for women to 16 hours, between 6 a.m. and 10 p.m., without any legal pause for meal-times. It allows males over 13 to be worked at will day and night. It is a Parliamentary abortion. However, the principle had triumphed with its victory in those great branches of industry which form the most characteristic creation of the modern mode of production. Their wonderful development from 1853 to 1860, hand-in-hand with the physical and moral regeneration of the factory workers, struck the most purblind. The masters from whom the legal limitation and regulation had been wrung step by step after a civil war of half a century, themselves referred ostentatiously to the contrast with the branches of exploitation still free. The Pharisees of Political Economy now proclaimed the discernment of the necessity of a legally fixed working-day as a characteristic new discovery of their science. It will be easily understood that after the factory magnates had resigned themselves and become reconciled to the inevitable, the power of resistance of capital gradually weakened, whilst at the same time the power of attack of the working-class grew with the number of its allies in the classes of society not immediately interested in the question. Hence the comparatively rapid advance since 1860. The dye-works and bleach-works all came under the Factory Act of 1850 in 1860; lace and stocking manufactures in 1861. In consequence of the first report of the Commission on the employment of children (1863) the same fate was shared by the manufacturers of all earthenwares (not merely pottery), Lucifer-matches, percussion caps, cartridges, carpets, fustian-cutting, and many processes included under the name of finishing. In the year 1863 bleaching in the open air and baking were placed under special Acts, by which, in the former, the labour of young persons and women during the night-time (from 8 in the evening to 6 in the morning), and in the latter, the employment of journeymen bakers under 18, between 9 in the evening and 5 in the morning were forbidden. We shall return to the later proposals of the same Commission, which threatened to deprive of their freedom all the important branches of English Industry, with the exception of agriculture, mines, and the means of transport. The reader will bear in mind that the production of surplus-value, or the extraction of surplus-labour, is the specific end and aim, the sum and substance, of capitalist production, quite apart from any changes in the mode of production, which may arise from the subordination of labour to capital. He will remember that as far as we have at present gone only the independent labourer, and therefore only the labourer legally qualified to act for himself, enters as a vendor of a commodity into a contract with the capitalist. If, therefore, in our historical sketch, on the one hand, modern industry, on the other, the labour of those who are physically and legally minors, play important parts, the former was to us only a special department, and the latter only a specially striking example of labour exploitation. Without, however, anticipating the subsequent development of our inquiry, from the mere connexion of the historic facts before us it follows: First. The passion of capital for an unlimited and reckless extension of the working-day, is first gratified in the industries earliest revolutionised by water-power, steam, and machinery, in those first creations of the modern mode of production, cotton, wool, flax, and silk spinning, and weaving. The changes in the material mode of production, and the corresponding changes in the social relations of the producers gave rise first to an extravagance beyond all bounds, and then in opposition to this, called forth a control on the part of Society which legally limits, regulates, and makes uniform the working-day and its pauses. This control appears, therefore, during the first half of the nineteenth century simply as exceptional legislation. As soon as this primitive dominion of the new mode of production was conquered, it was found that, in the meantime, not only had many other branches of production been made to adopt the same factory system, but that manufactures with more or less obsolete methods, such as potteries, glass-making, &c., that old-fashioned handicrafts, like baking, and, finally, even that the so-called domestic industries, such as nail-making, had long since fallen as completely under capitalist exploitation as the factories themselves. Legislation was, therefore, compelled to gradually get rid of its exceptional character, or where, as in England, it proceeds after the manner of the Roman Casuists, to declare any house in which work was done to be a factory. Second. The history of the regulation of the working-day in certain branches of production, and the struggle still going on in others in regard to this regulation, prove conclusively that the isolated labourer, the labourer as free vendor of his labour-power, when capitalist production has once attained a certain stage, succumbs without any power of resistance. The creation of a normal working-day is, therefore, the product of a protracted civil war, more or less dissembled, between the capitalist class and the working-class. As the contest takes place in the arena of modern industry, it first breaks out in the home of that industry England. The English factory workers were the champions, not only of the English, but of the modern working-class generally, as their theorists were the first to throw down the gauntlet to the theory of capital. Hence, the philosopher of the Factory, Ure, denounces as an ineffable disgrace to the English working-class that they inscribed the slavery of the Factory Acts on the banner which they bore against capital, manfully striving for perfect freedom of labour. France limps slowly behind England. The February revolution was necessary to bring into the world the 12 hours law, which is much more deficient than its English original. For all that, the French revolutionary method has its special advantages. It once for all commands the same limit to the working-day in all shops and factories without distinction, whilst English legislation reluctantly yields to the pressure of circumstances, now on this point, now on that, and is getting lost in a hopelessly bewildering tangle of contradictory enactments. On the other hand, the French law proclaims as a principle that which in England was only won in the name of children, minors, and women, and has been only recently for the first time claimed as a general right. In the United States of North America, every independent movement of the workers was paralysed so long as slavery disfigured a part of the Republic. Labour cannot emancipate itself in the white skin where in the black it is branded. But out of the death of slavery a new life at once arose. The first fruit of the Civil War was the eight hours agitation, that ran with the seven-leagued boots of the locomotive from the Atlantic to the Pacific, from New England to California. The General Congress of labour at Baltimore (August 16th, 1866) declared: At the same time, the Congress of the International Working Men s Association at Geneva, on the proposition of the London General Council, resolved that the limitation of the working-day is a preliminary condition without which all further attempts at improvement and emancipation must prove abortive... the Congress proposes eight hours as the legal limit of the working-day. Thus the movement of the working-class on both sides of the Atlantic, that had grown instinctively out of the conditions of production themselves, endorsed the words of the English Factory Inspector, R. J. Saunders It must be acknowledged that our labourer comes out of the process of production other than he entered. In the market he stood as owner of the commodity labour-power face to face with other owners of commodities, dealer against dealer. The contract by which he sold to the capitalist his labour-power proved, so to say, in black and white that he disposed of himself freely. The bargain concluded, it is discovered that he was no free agent, that the time for which he is free to sell his labour-power is the time for which he is forced to sell it, that in fact the vampire will not lose its hold on him so long as there is a muscle, a nerve, a drop of blood to be exploited. For protection against the serpent of their agonies, the labourers must put their heads together, and, as a class, compel the passing of a law, an all-powerful social barrier that shall prevent the very workers from selling, by voluntary contract with capital, themselves and their families into slavery and death. In place of the pompous catalogue of the inalienable rights of man comes the modest Magna Charta of a legally limited working-day, which shall make clear when the time which the worker sells is ended, and when his own begins. Quantum mutatus ab illo! [What a great change from that time! Virgil]

Economic Manuscripts: Capital Vol. I - Chapter Ten

https://www.marxists.org/archive/marx/works/1867-c1/ch10.htm

In this chapter, as hitherto, the value of labour-power, and therefore the part of the working day necessary for the reproduction or maintenance of that labour-power, are supposed to be given, constant magnitudes. This premised, with the rate, the mass is at the same time given of the surplus-value that the individual labourer furnishes to the capitalist in a definite period of time. If, e.g., the necessary labour amounts to 6 hours daily, expressed in a quantum of gold = 3 shillings, then 3s. is the daily value of one labour-power or the value of the capital advanced in the buying of one labour-power. If, further, the rate of surplus-value be = 100%, this variable capital of 3s. produces a mass of surplus-value of 3s., or the labourer supplies daily a mass of surplus labour equal to 6 hours. But the variable capital of a capitalist is the expression in money of the total value of all the labour-powers that he employs simultaneously. Its value is, therefore, equal to the average value of one labour-power, multiplied by the number of labour-powers employed. With a given value of labour-power, therefore, the magnitude of the variable capital varies directly as the number of labourers employed simultaneously. If the daily value of one labour-power = 3s., then a capital of 300s. must be advanced in order to exploit daily 100 labour-powers, of n times 3s., in order to exploit daily n labour-powers. In the same way, if a variable capital of 3s., being the daily value of one labour-power, produce a daily surplus-value of 3s., a variable capital of 300s. will produce a daily surplus-value of 300s., and one of n times 3s. a daily surplus-value of n 3s. The mass of the surplus-value produced is therefore equal to the surplus-value which the working day of one labourer supplies multiplied by the number of labourers employed. But as further the mass of surplus-value which a single labourer produces, the value of labour-power being given, is determined by the rate of the surplus-value, this law follows: the mass of the surplus-value produced is equal to the amount of the variable capital advanced, multiplied by the rate of surplus-value, in other words: it is determined by the compound ratio between the number of labour-powers exploited simultaneously by the same capitalist and the degree of exploitation of each individual labour-power. Let the mass of the surplus-value be S, the surplus-value supplied by the individual labourer in the average day s the variable capital daily advanced in the purchase of one individual labour-power v, the sum total of the variable capital V, the value of an average labour-power P, its degree of exploitation (a'/a) (surplus-labour/necessary-labour) and the number of labourers employed n; we have: It is always supposed, not only that the value of an average labour-power is constant, but that the labourers employed by a capitalist are reduced to average labourers. There are exceptional cases in which the surplus-value produced does not increase in proportion to the number of labourers exploited, but then the value of the labour-power does not remain constant. In the production of a definite mass of surplus-value, therefore the decrease of one factor may be compensated by the increase of the other. If the variable capital diminishes, and at the same time the rate of surplus-value increases in the same ratio, the mass of surplus-value produced remains unaltered. If on our earlier assumption the capitalist must advance 300s., in order to exploit 100 labourers a day, and if the rate of surplus-value amounts to 50%, this variable capital of 300s. yields a surplus-value of 150s. or of 100 3 workinghours. If the rate of surplus-value doubles, or the working day, instead of being extended from 6 to 9, is extended from 6 to 12 hours and at the same time variable capital is lessened by half, and reduced to 150s., it yields also a surplus-value of 150s. or 50 6 workinghours. Diminution of the variable capital may therefore be compensated by a proportionate rise in the degree of exploitation of labour-power, or the decrease in the number of the labourers employed by a proportionate extension of the working day. Within certain limits therefore the supply of labour exploitable by capital is independent of the supply of labourers. On the contrary, a fall in the rate of surplus-value leaves unaltered the mass of the surplus-value produced, if the amount of the variable capital, or number of the labourers employed, increases in the same proportion. Nevertheless, the compensation of a decrease in the number of labourers employed, or of the amount of variable capital advanced by a rise in the rate of surplus-value, or by the lengthening of the working-day, has impassable limits. Whatever the value of labour-power may be, whether the workingtime necessary for the maintenance of the labourer is 2 or 10 hours, the total value that a labourer can produce, day in, day out, is always less than the value in which 24 hours of labour are embodied, less than 12s., if 12s. is the money expression for 24 hours of realised labour. In our former assumption, according to which 6 workinghours are daily necessary in order to reproduce the labour-power itself or to replace the value of the capital advanced in its purchase, a variable capital of 1,500s., that employs 500 labourers at a rate of surplus-value of 100% with a 12 hours working day, produces daily a surplus-value of 1,500s. or of 6 500 workinghours. A capital of 300s. that employs 100 labourers a day with a rate of surplus-value of 200% or with a working day of 18 hours, produces only a mass of surplus-value of 600s. or 12 100 workinghours; and its total value-product, the equivalent of the variable capital advanced plus the surplus-value, can, day in, day out, never reach the sum of 1,200s. or 24 100 workinghours. The absolute limit of the average working day this being by nature always less than 24 hours sets an absolute limit to the compensation of a reduction of variable capital by a higher rate of surplus-value, or of the decrease of the number of labourers exploited by a higher degree of exploitation of labour-power. This palpable law is of importance for the clearing up of many phenomena, arising from a tendency (to be worked out later on) of capital to reduce as much as possible the number of labourers employed by it, or its variable constituent transformed into labour-power, in contradiction to its other tendency to produce the greatest possible mass of surplus-value. On the other hand, if the mass of labour-power employed, or the amount of variable capital, increases, but not in proportion to the fall in the rate of surplus-value, the mass of the surplus-value produced, falls. A third law results from the determination, of the mass of the surplus-value produced, by the two factors: rate of surplus-value and amount of variable capital advanced. The rate of surplus-value, or the degree of exploitation of labour-power, and the value of labour-power, or the amount of necessary workingtime being given, it is selfevident that the greater the variable capital, the greater would be the mass of the value produced and of the surplus-value. If the limit of the working-day is given, and also the limit of its necessary constituent, the mass of value and surplus-value that an individual capitalist produces, is clearly exclusively dependent on the mass of labour that he sets in motion. But this, under the conditions supposed above, depends on the mass of labour-power, or the number of labourers whom he exploits, and this number in its turn is determined by the amount of the variable capital advanced. With a given rate of surplus-value, and a given value of labour-power, therefore, the masses of surplus-value produced vary directly as the amounts of the variable capitals advanced. Now we know that the capitalist divides his capital into two parts. One part he lays out in means of production. This is the constant part of his capital. The other part he lays out in living labour-power. This part forms his variable capital. On the basis of the same mode of social production, the division of capital into constant and variable differs in different branches of production, and within the same branch of production, too, this relation changes with changes in the technical conditions and in the social combinations of the processes of production. But in whatever proportion a given capital breaks up into a constant and a variable part, whether the latter is to the former as 1:2 or 1:10 or 1:x, the law just laid down is not affected by this. For, according to our previous analysis, the value of the constant capital reappears in the value of the product, but does not enter into the newly produced value, the newly created value product. To employ 1,000 spinners, more raw material, spindles, &c., are, of course, required, than to employ 100. The value of these additional means of production however may rise, fall, remain unaltered, be large or small; it has no influence on the process of creation of surplus-value by means of the labour-powers that put them in motion. The law demonstrated above now, therefore, takes this form: the masses of value and of surplus-value produced by different capitals the value of labour-power being given and its degree of exploitation being equal vary directly as the amounts of the variable constituents of these capitals, i.e., as their constituents transformed into living labour-power. This law clearly contradicts all experience based on appearance. Everyone knows that a cotton spinner, who, reckoning the percentage on the whole of his applied capital, employs much constant and little variable capital, does not, on account of this, pocket less profit or surplus-value than a baker, who relatively sets in motion much variable and little constant capital. For the solution of this apparent contradiction, many intermediate terms are as yet wanted, as from the standpoint of elementary algebra many intermediate terms are wanted to understand that 0/0 may represent an actual magnitude. Classical economy, although not formulating the law, holds instinctively to it, because it is a necessary consequence of the general law of value. It tries to rescue the law from collision with contradictory phenomena by a violent abstraction. It will be seen later how the school of Ricardo has come to grief over this stumbling block. Vulgar economy which, indeed, has really learnt nothing, here as everywhere sticks to appearances in opposition to the law which regulates and explains them. In opposition to Spinoza, it believes that ignorance is a sufficient reason. The labour which is set in motion by the total capital of a society, day in, day out, may be regarded as a single collective working day. If, e.g., the number of labourers is a million, and the average working-day of a labourer is 10 hours, the social working day consists of ten million hours. With a given length of this working day, whether its limits are fixed physically or socially, the mass of surplus-value can only be increased by increasing the number of labourers, i.e., of the labouring population. The growth of population here forms the mathematical limit to the production of surplus-value by the total social capital. On the contrary, with a given amount of population, this limit is formed by the possible lengthening of the working day. It will, however, be seen in the following chapter that this law only holds for the form of surplus-value dealt with up to the present. From the treatment of the production of surplus-value, so far, it follows that not every sum of money, or of value, is at pleasure transformable into capital. To effect this transformation, in fact, a certain minimum of money or of exchange-value must be presupposed in the hands of the individual possessor of money or commodities. The minimum of variable capital is the cost price of a single labour-power, employed the whole year through, day in, day out, for the production of surplus-value. If this labourer were in possession of his own means of production, and were satisfied to live as a labourer, he need not work beyond the time necessary for the reproduction of his means of subsistence, say 8 hours a day. He would, besides, only require the means of production sufficient for 8 working-hours. The capitalist, on the other hand, who makes him do, besides these 8 hours, say 4 hours surplus-labour, requires an additional sum of money for furnishing the additional means of production. On our supposition, however, he would have to employ two labourers in order to live, on the surplus-value appropriated daily, as well as, and no better than a labourer, i.e., to be able to satisfy his necessary wants. In this case the mere maintenance of life would be the end of his production, not the increase of wealth; but this latter is implied in capitalist production. That he may live only twice as well as an ordinary labourer, and besides turn half of the surplus-value produced into capital, he would have to raise, with the number of labourers, the minimum of the capital advanced 8 times. Of course he can, like his labourer, take to work himself, participate directly in the process of production, but he is then only a hybrid between capitalist and labourer, a small master. A certain stage of capitalist production necessitates that the capitalist be able to devote the whole of the time during which he functions as a capitalist, i.e., as personified capital, to the appropriation and therefore control of the labour of others, and to the selling of the products of this labour. The guilds of the middle ages therefore tried to prevent by force the transformation of the master of a trade into a capitalist, by limiting the number of labourers that could be employed by one master within a very small maximum. The possessor of money or commodities actually turns into a capitalist in such cases only where the minimum sum advanced for production greatly exceeds the maximum of the middle ages. Here, as in natural science, is shown the correctness of the law discovered by Hegel (in his Logic ), that merely quantitative differences beyond a certain point pass into qualitative changes. The minimum of the sum of value that the individual possessor of money or commodities must command, in order to metamorphose himself into a capitalist, changes with the different stages of development of capitalist production, and is at given stages different in different spheres of production, according to their special and technical conditions. Certain spheres of production demand, even at the very outset of capitalist production, a minimum of capital that is not as yet found in the hands of single individuals. This gives rise partly to state subsidies to private persons, as in France in the time of Clobber, and as in many German states up to our own epoch, partly to the formation of societies with legal monopoly for the exploitation of certain branches of industry and commerce, the forerunners of our modern joint stock companies. Within the process of production, as we have seen, capital acquired the command over labour, i.e., over functioning labour-power or the labourer himself. Personified capital, the capitalist takes care that the labourer does his work regularly and with the proper degree of intensity. Capital further developed into a coercive relation, which compels the working class to do more work than the narrow round of its own life-wants prescribes. As a producer of the activity of others, as a pumper-out of surplus labour and exploiter of labour-power, it surpasses in energy, disregard of bounds, recklessness and efficiency, all earlier systems of production based on directly compulsory labour. At first, capital subordinates labour on the basis of the technical conditions in which it historically finds it. It does not, therefore, change immediately the mode of production. The production of surplus-value in the form hitherto considered by us by means of simple extension of the working day, proved, therefore, to be independent of any change in the mode of production itself. It was not less active in the old-fashioned bakeries than in the modern cotton factories. If we consider the process of production from the point of view of the simple labour process, the labourer stands in relation to the means of production, not in their quality as capital, but as the mere means and material of his own intelligent productive activity. In tanning, e.g., he deals with the skins as his simple object of labour. It is not the capitalist whose skin he tans. But it is different as soon as we deal with the process of production from the point of view of the process of creation of surplus-value. The means of production are at once changed into means for the absorption of the labour of others. It is now no longer the labourer that employs the means of production, but the means of production that employ the labourer. Instead of being consumed by him as material elements of his productive activity, they consume him as the ferment necessary to their own life-process, and the life-process of capital consists only in its movement as value constantly expanding, constantly multiplying itself. Furnaces and workshops that stand idle by night, and absorb no living labour, are a mere loss to the capitalist. Hence, furnaces and workshops constitute lawful claims upon the night-labour of the work-people. The simple transformation of money into the material factors of the process of production, into means of production, transforms the latter into a title and a right to the labour and surpluslabour of others. An example will show, in conclusion, how this sophistication, peculiar to and characteristic of capitalist production, this complete inversion of the relation between dead and living labour, between value and the force that creates value, mirrors itself in the consciousness of capitalists. During the revolt of the English factory lords between 1848 and 1850, the head of one of the oldest and most respectable houses in the West of Scotland, Messrs. Carlile Sons & Co., of the linen and cotton thread factory at Paisley, a company which has now existed for about a century, which was in operation in 1752, and four generations of the same family have conducted it ... this very intelligent gentleman then wrote a letter in the Glasgow Daily Mail of April 25th, 1849, with the title, The relay system, in which among other things the following grotesquely na ve passage occurs: Let us now ... see what evils will attend the limiting to 10 hours the working of the factory.... They amount to the most serious damage to the millowner s prospects and property. If he (i.e., his hands ) worked 12 hours before, and is limited to 10, then every 12 machines or spindles in his establishment shrink to 10, and should the works be disposed of, they will be valued only as 10, so that a sixth part would thus be deducted from the value of every factory in the country. To this West of Scotland bourgeois brain, inheriting the accumulated capitalistic qualities of four generations, the value of the means of production, spindles, &c., is so inseparably mixed up with their property, as capital, to expand their own value, and to swallow up daily a definite quantity of the unpaid labour of others, that the head of the firm of Carlile & Co. actually imagines that if he sells his factory, not only will the value of the spindles be paid to him, but, in addition, their power of annexing surplus-value, not only the labour which is embodied in them, and is necessary to the production of spindles of this kind, but also the surpluslabour which they help to pump out daily from the brave Scots of Paisley, and for that very reason he thinks that with the shortening of the working day by 2 hours, the selling-price of 12 spinning machines dwindles to that of 10!

Economic Manuscripts: Capital Vol. I - Chapter Eleven

https://www.marxists.org/archive/marx/works/1867-c1/ch11.htm

That portion of the working day which merely produces an equivalent for the value paid by the capitalist for his labour-power, has, up to this point, been treated by us as a constant magnitude, and such in fact it is, under given conditions of production and at a given stage in the economic development of society. Beyond this, his necessary labour-time, the labourer, we saw, could continue to work for 2, 3, 4, 6, &c., hours. The rate of surplus-value and the length of the working day depended on the magnitude of this prolongation. Though the necessary labour-time was constant, we saw, on the other hand, that the total working day was variable. Now suppose we have a working day whose length, and whose apportionment between necessary labour and surplus-labour, are given. Let the whole line a c, a b c represent, for example, a working day of 12 hours; the portion of a b 10 hours of necessary labour, and the portion b c 2 hours of surplus-labour. How now can the production of surplus-value be increased, i.e., how can the surplus-labour be prolonged, without, or independently of, any prolongation of a c? Although the length of a c is given, b c appears to be capable of prolongation, if not by extension beyond its end c, which is also the end of the working day a c, yet, at all events, by pushing back its starting-point b in the direction of a. Assume that b' b in the line ab'bc is equal to half of b c a b' b c or to one hour s labour-time. If now, in a c, the working day of 12 hours, we move the point b to b', b c becomes b' c; the surplus-labour increases by one half, from 2 hours to 3 hours, although the working day remains as before at 12 hours. This extension of the surplus labour-time from b c to b' c, from 2 hours to 3 hours, is, however, evidently impossible, without a simultaneous contraction of the necessary labour-time from a b into a b', from 10 hours to 9 hours. The prolongation of the surplus-labour would correspond to a shortening of the necessary labour; or a portion of the labour-time previously consumed, in reality, for the labourer s own benefit, would be converted into labour-time for the benefit of the capitalist. There would be an alteration, not in the length of the working day, but in its division into necessary labour-time and surplus labour-time. On the other hand, it is evident that the duration of the surplus-labour is given, when the length of the working day, and the value of labour-power, are given. The value of labour-power, i.e., the labour-time requisite to produce labour-power, determines the labour-time necessary for the reproduction of that value. If one working-hour be embodied in sixpence, and the value of a day s labour-power be five shillings, the labourer must work 10 hours a day, in order to replace the value paid by capital for his labour-power, or to produce an equivalent for the value of his daily necessary means of subsistence. Given the value of these means of subsistence, the value of his labour-power is given; and given the value of his labour-power, the duration of his necessary labour-time is given. The duration of the surplus-labour, however, is arrived at, by subtracting the necessary labour-time from the total working day. Ten hours subtracted from twelve, leave two, and it is not easy to see, how, under the given conditions, the surplus-labour can possibly be prolonged beyond two hours. No doubt, the capitalist can, instead of five shillings, pay the labourer four shillings and sixpence or even less. For the reproduction of this value of four shillings and sixpence, nine hours labour-time would suffice; and consequently three hours of surplus-labour, instead of two, would accrue to the capitalist, and the surplus-value would rise from one shilling to eighteen-pence. This result, however, would be obtained only by lowering the wages of the labourer below the value of his labour-power. With the four shillings and sixpence which he produces in nine hours, he commands one-tenth less of the necessaries of life than before, and consequently the proper reproduction of his labour-power is crippled. The surplus-labour would in this case be prolonged only by an overstepping of its normal limits; its domain would be extended only by a usurpation of part of the domain of necessary labour-time. Despite the important part which this method plays in actual practice, we are excluded from considering it in this place, by our assumption, that all commodities, including labour-power, are bought and sold at their full value. Granted this, it follows that the labour-time necessary for the production of labour-power, or for the reproduction of its value, cannot be lessened by a fall in the labourer s wages below the value of his labour-power, but only by a fall in this value itself. Given the length of the working day, the prolongation of the surplus-labour must of necessity originate in the curtailment of the necessary labour-time; the latter cannot arise from the former. In the example we have taken, it is necessary that the value of labour-power should actually fall by one-tenth, in order that the necessary labour-time may be diminished by one-tenth, i.e., from ten hours to nine, and in order that the surplus labour may consequently be prolonged from two hours to three. Such a fall in the value of labour-power implies, however, that the same necessaries of life which were formerly produced in ten hours, can now be produced in nine hours. But this is impossible without an increase in the productiveness of labour. For example, suppose a shoe-maker, with given tools, makes in one working day of twelve hours, one pair of boots. If he must make two pairs in the same time, the productiveness of his labour must be doubled; and this cannot be done, except by an alteration in his tools or in his mode of working, or in both. Hence, the conditions of production, i.e., his mode of production, and the labour-process itself, must be revolutionised. By increase in the productiveness of labour, we mean, generally, an alteration in the labour-process, of such a kind as to shorten the labour-time socially necessary for the production of a commodity, and to endow a given quantity of labour with the power of producing a greater quantity of use-value. Hitherto in treating of surplus-value, arising from a simple prolongation of the working day, we have assumed the mode of production to be given and invariable. But when surplus-value has to be produced by the conversion of necessary labour into surplus-labour, it by no means suffices for capital to take over the labour-process in the form under which it has been historically handed down, and then simply to prolong the duration of that process. The technical and social conditions of the process, and consequently the very mode of production must be revolutionised, before the productiveness of labour can be increased. By that means alone can the value of labour-power be made to sink, and the portion of the working day necessary for the reproduction of that value, be shortened. The surplus-value produced by prolongation of the working day, I call absolute surplus-value. On the other hand, the surplus-value arising from the curtailment of the necessary labour-time, and from the corresponding alteration in the respective lengths of the two components of the working day, I call relative surplus-value. In order to effect a fall in the value of labour-power, the increase in the productiveness of labour must seize upon those branches of industry whose products determine the value of labour-power, and consequently either belong to the class of customary means of subsistence, or are capable of supplying the place of those means. But the value of a commodity is determined, not only by the quantity of labour which the labourer directly bestows upon that commodity, but also by the labour contained in the means of production. For instance, the value of a pair of boots depends not only on the cobbler s labour, but also on the value of the leather, wax, thread, &c. Hence, a fall in the value of labour-power is also brought about by an increase in the productiveness of labour, and by a corresponding cheapening of commodities in those industries which supply the instruments of labour and the raw material, that form the material elements of the constant capital required for producing the necessaries of life. But an increase in the productiveness of labour in those branches of industry which supply neither the necessaries of life, nor the means of production for such necessaries, leaves the value of labour-power undisturbed. The cheapened commodity, of course, causes only a pro tanto fall in the value of labour-power, a fall proportional to the extent of that commodity s employment in the reproduction of labour-power. Shirts, for instance, are a necessary means of subsistence, but are only one out of many. The totality of the necessaries of life consists, however, of various commodities, each the product of a distinct industry; and the value of each of those commodities enters as a component part into the value of labour-power. This latter value decreases with the decrease of the labour-time necessary for its reproduction; the total decrease being the sum of all the different curtailments of labour-time effected in those various and distinct industries. This general result is treated, here, as if it were the immediate result directly aimed at in each individual case. Whenever an individual capitalist cheapens shirts, for instance, by increasing the productiveness of labour he by no means necessarily aims at reducing the value of labour-power and shortening, pro tanto the necessary labour-time. But it is only in so far as he ultimately contributes to this result, that he assists in raising the general rate of surplus-value. The general and necessary tendencies of capital must be distinguished from their forms of manifestation. It is not our intention to consider, here, the way in which the laws, immanent in capitalist production, manifest themselves in the movements of individual masses of capital, where they assert themselves as coercive laws of competition, and are brought home to the mind and consciousness of the individual capitalist as the directing motives of his operations. But this much is clear; a scientific analysis of competition is not possible, before we have a conception of the inner nature of capital, just as the apparent motions of the heavenly bodies are not intelligible to any but him, who is acquainted with their real motions, motions which are not directly perceptible by the senses. Nevertheless, for the better comprehension of the production of relative surplus-value, we may add the following remarks, in which we assume nothing more than the results we have already obtained. If one hour s labour is embodied in sixpence, a value of six shillings will be produced in a working day of 12 hours. Suppose, that with the prevailing productiveness of labour, 12 articles are produced in these 12 hours. Let the value of the means of production used up in each article be sixpence. Under these circumstances, each article costs one shilling: sixpence for the value of the means of production, and sixpence for the value newly added in working with those means. Now let some one capitalist contrive to double the productiveness of labour, and to produce in the working day of 12 hours, 24 instead of 12 such articles. The value of the means of production remaining the same, the value of each article will fall to ninepence, made up of sixpence for the value of the means of production and threepence for the value newly added by the labour. Despite the doubled productiveness of labour, the day s labour creates, as before, a new value of six shillings and no more, which, however, is now spread over twice as many articles. Of this value each article now has embodied in it 1/24th, instead of 1/12th, threepence instead of sixpence; or, what amounts to the same thing, only half an hour s instead of a whole hour s labour-time, is now added to the means of production while they are being transformed into each article. The individual value of these articles is now below their social value; in other words, they have cost less labour-time than the great bulk of the same article produced under the average social conditions. Each article costs, on an average, one shilling, and represents 2 hours of social labour; but under the altered mode of production it costs only ninepence, or contains only 1 hours labour. The real value of a commodity is, however, not its individual value, but its social value; that is to say, the real value is not measured by the labour-time that the article in each individual case costs the producer, but by the labour-time socially required for its production. If therefore, the capitalist who applies the new method, sells his commodity at its social value of one shilling, he sells it for threepence above its individual value, and thus realises an extra surplus-value of threepence. On the other hand, the working day of 12 hours is, as regards him, now represented by 24 articles instead of 12. Hence, in order to get rid of the product of one working day, the demand must be double what it was, i.e., the market must become twice as extensive. Other things being equal, his commodities can command a more extended market only by a diminution of their prices. He will therefore sell them above their individual but under their social value, say at tenpence each. By this means he still squeezes an extra surplus-value of one penny out of each. This augmentation of surplus-value is pocketed by him, whether his commodities belong or not to the class of necessary means of subsistence that participate in determining the general value of labour-power. Hence, independently of this latter circumstance, there is a motive for each individual capitalist to cheapen his commodities, by increasing the productiveness of labour. Nevertheless, even in this case, the increased production of surplus-value arises from the curtailment of the necessary labour-time, and from the corresponding prolongation of the surplus-labour. Let the necessary labour-time amount to 10 hours, the value of a day s labour-power to five shillings, the surplus labour-time to 2 hours, and the daily surplus-value to one shilling. But the capitalist now produces 24 articles, which he sells at tenpence a-piece, making twenty shillings in all. Since the value of the means of production is twelve shillings, 14 2/5 of these articles merely replace the constant capital advanced. The labour of the 12 hours working day is represented by the remaining 9 3/5 articles. Since the price of the labour-power is five shillings, 6 articles represent the necessary labour-time, and 3 3/5 articles the surplus-labour. The ratio of the necessary labour to the surplus-labour, which under average social conditions was 5:1, is now only 5:3. The same result may be arrived at in the following way. The value of the product of the working day of 12 hours is twenty shillings. Of this sum, twelve shillings belong to the value of the means of production, a value that merely re-appears. There remain eight shillings, which are the expression in money, of the value newly created during the working day. This sum is greater than the sum in which average social labour of the same kind is expressed: twelve hours of the latter labour are expressed by six shillings only. The exceptionally productive labour operates as intensified labour; it creates in equal periods of time greater values than average social labour of the same kind. (See Ch. I. Sect 2. p. 44.) But our capitalist still continues to pay as before only five shillings as the value of a day s labour-power. Hence, instead of 10 hours, the labourer need now work only 7 hours, in order to reproduce this value. His surplus-labour is, therefore, increased by 2 hours, and the surplus-value he produces grows from one, into three shillings. Hence, the capitalist who applies the improved method of production, appropriates to surplus-labour a greater portion of the working day, than the other capitalists in the same trade. He does individually, what the whole body of capitalists engaged in producing relative surplus-value, do collectively. On the other hand, however, this extra surplus-value vanishes, so soon as the new method of production has become general, and has consequently caused the difference between the individual value of the cheapened commodity and its social value to vanish. The law of the determination of value by labour-time, a law which brings under its sway the individual capitalist who applies the new method of production, by compelling him to sell his goods under their social value, this same law, acting as a coercive law of competition, forces his competitors to adopt the new method. The general rate of surplus-value is, therefore, ultimately affected by the whole process, only when the increase in the productiveness of labour, has seized upon those branches of production that are connected with, and has cheapened those commodities that form part of, the necessary means of subsistence, and are therefore elements of the value of labour-power. The value of commodities is in inverse ratio to the productiveness of labour. And so, too, is the value of labour-power, because it depends on the values of commodities. Relative surplus-value is, on the contrary, directly proportional to that productiveness. It rises with rising and falls with falling productiveness. The value of money being assumed to be constant, an average social working day of 12 hours always produces the same new value, six shillings, no matter how this sum may be apportioned between surplus-value and wages. But if, in consequence of increased productiveness, the value of the necessaries of life fall, and the value of a day s labour-power be thereby reduced from five shillings to three, the surplus-value increases from one shilling to three. Ten hours were necessary for the reproduction of the value of the labour-power; now only six are required. Four hours have been set free, and can be annexed to the domain of surplus-labour. Hence there is immanent in capital an inclination and constant tendency, to heighten the productiveness of labour, in order to cheapen commodities, and by such cheapening to cheapen the labourer himself. The value of a commodity is, in itself, of no interest to the capitalist. What alone interests him, is the surplus-value that dwells in it, and is realisable by sale. Realisation of the surplus-value necessarily carries with it the refunding of the value that was advanced. Now, since relative surplus-value increases in direct proportion to the development of the productiveness of labour, while, on the other hand, the value of commodities diminishes in the same proportion; since one and the same process cheapens commodities, and augments the surplus-value contained in them; we have here the solution of the riddle: why does the capitalist, whose sole concern is the production of exchange-value, continually strive to depress the exchange-value of commodities? A riddle with which Quesnay, one of the founders of Political Economy, tormented his opponents, and to which they could give him no answer. The shortening of the working day is, therefore, by no means what is aimed at, in capitalist production, when labour is economised by increasing its productiveness. It is only the shortening of the labour-time, necessary for the production of a definite quantity of commodities, that is aimed at. The fact that the workman, when the productiveness of his labour has been increased, produces, say 10 times as many commodities as before, and thus spends one-tenth as much labour-time on each, by no means prevents him from continuing to work 12 hours as before, nor from producing in those 12 hours 1,200 articles instead of 120. Nay, more, his working day may be prolonged at the same time, so as to make him produce, say 1,400 articles in 14 hours. In the treatises, therefore, of economists of the stamp of MacCulloch, Ure, Senior, and tutti quanti [the like], we may read upon one page, that the labourer owes a debt of gratitude to capital for developing his productiveness, because the necessary labour-time is thereby shortened, and on the next page, that he must prove his gratitude by working in future for 15 hours instead of 10. The object of all development of the productiveness of labour, within the limits of capitalist production, is to shorten that part of the working day, during which the workman must labour for his own benefit, and by that very shortening, to lengthen the other part of the day, during which he is at liberty to work gratis for the capitalist. How far this result is also attainable, without cheapening commodities, will appear from an examination of the particular modes of producing relative surplus-value, to which examination we now proceed.

Economic Manuscripts: Capital Vol. I - Chapter Twelve

https://www.marxists.org/archive/marx/works/1867-c1/ch12.htm

Capitalist production only then really begins, as we have already seen, when each individual capital employs simultaneously a comparatively large number of labourers; when consequently the labour-process is carried on on an extensive scale and yields, relatively, large quantities of products. A greater number of labourers working together, at the same time, in one place (or, if you will, in the same field of labour), in order to produce the same sort of commodity under the mastership of one capitalist, constitutes, both historically and logically, the starting-point of capitalist production. With regard to the mode of production itself, manufacture, in its strict meaning, is hardly to be distinguished, in its earliest stages, from the handicraft trades of the guilds, otherwise than by the greater number of workmen simultaneously employed by one and the same individual capital. The workshop of the medieval master handicraftsman is simply enlarged. At first, therefore, the difference is purely quantitative. We have shown that the surplus-value produced by a given capital is equal to the surplus-value produced by each workman multiplied by the number of workmen simultaneously employed. The number of workmen in itself does nor affect, either the rate of surplus-value, or the degree of exploitation of labour-power. If a working-day of 12 hours be embodied in six shillings, 1,200 such days will be embodied in 1,200 times 6 shillings. In one case 12 1,200 working-hours, and in the other 12 such hours are incorporated in the product. In the production of value a number of workmen rank merely as so many individual workmen; and it therefore makes no difference in the value produced whether the 1,200 men work separately, or united under the control of one capitalist. Nevertheless, within certain limits, a modification takes place. The labour realised in value, is labour of an average social quality; is consequently the expenditure of average labour-power. Any average magnitude, however, is merely the average of a number of separate magnitudes all of one kind, but differing as to quantity. In every industry, each individual labourer, be he Peter or Paul, differs from the average labourer. These individual differences, or errors as they are called in mathematics, compensate one another, and vanish, whenever a certain minimum number of workmen are employed together. The celebrated sophist and sycophant, Edmund Burke, goes so far as to make the following assertion, based on his practical observations as a farmer; viz., that in so small a platoon as that of five farm labourers, all individual differences in the labour vanish, and that consequently any given five adult farm labourers taken together, will in the same time do as much work as any other five. But, however that may be, it is clear, that the collective working-day of a large number of workmen simultaneously employed, divided by the number of these workmen, gives one day of average social labour. For example, let the working-day of each individual be 12 hours. Then the collective working-day of 12 men simultaneously employed, consists of 144 hours; and although the labour of each of the dozen men may deviate more or less from average social labour, each of them requiring a different time for the same operation, yet since the working-day of each is one-twelfth of the collective working-day of 144 hours, it possesses the qualities of an average social working-day. From the point of view, however, of the capitalist who employs these 12 men, the working-day is that of the whole dozen. Each individual man s day is an aliquot part of the collective working-day, no matter whether the 12 men assist one another in their work, or whether the connexion between their operations consists merely in the fact, that the men are all working for the same capitalist. But if the 12 men are employed in six pairs, by as many different small masters, it will be quite a matter of chance, whether each of these masters produces the same value, and consequently whether he realises the general rate of surplus-value. Deviations would occur in individual cases. If one workman required considerably more time for the production of a commodity than is socially necessary, the duration of the necessary labour-time would, in his case, sensibly deviate from the labour-time socially necessary on an average; and consequently his labour would not count as average labour, nor his labour-power as average labour-power. It would either be not saleable at all, or only at something below the average value of labour-power. A fixed minimum of efficiency in all labour is therefore assumed, and we shall see, later on, that capitalist production provides the means of fixing this minimum. Nevertheless, this minimum deviates from the average, although on the other hand the capitalist has to pay the average value of labour-power. Of the six small masters, one would therefore squeeze out more than the average rate of surplus-value, another less. The inequalities would be compensated for the society at large, but not for the individual masters. Thus the laws of the production of value are only fully realised for the individual producer, when he produces as a capitalist, and employs a number of workmen together, whose labour, by its collective nature, is at once stamped as average social labour. Even without an alteration in the system of working, the simultaneous employment of a large number of labourers effects a revolution in the material conditions of the labour-process. The buildings in which they work, the store-houses for the raw material, the implements and utensils used simultaneously or in turns by the workmen; in short, a portion of the means of production, are now consumed in common. On the one hand, the exchange-value of these means of production is not increased; for the exchange-value of a commodity is not raised by its use-value being consumed more thoroughly and to greater advantage. On the other hand, they are used in common, and therefore on a larger scale than before. A room where twenty weavers work at twenty looms must be larger than the room of a single weaver with two assistants. But it costs less labour to build one workshop for twenty persons than to build ten to accommodate two weavers each; thus the value of the means of production that are concentrated for use in common on a large scale does not increase in direct proportion to the expansion and to the increased useful effect of those means. When consumed in common, they give up a smaller part of their value to each single product; partly because the total value they part with is spread over a greater quantity of products, and partly because their value, though absolutely greater, is, having regard to their sphere of action in the process, relatively less than the value of isolated means of production. Owing to this, the value of a part of the constant capital falls, and in proportion to the magnitude of the fall, the total value of the commodity also falls. The effect is the same as if the means of production had cost less. The economy in their application is entirely owing to their being consumed in common by a large number of workmen. Moreover, this character of being necessary conditions of social labour, a character that distinguishes them from the dispersed and relatively more costly means of production of isolated, independent labourers, or small masters, is acquired even when the numerous workmen assembled together do not assist one another, but merely work side by side. A portion of the instruments of labour acquires this social character before the labour-process itself does so. Economy in the use of the means of production has to be considered under two aspects. First, as cheapening commodities, and thereby bringing about a fall in the value of labour-power. Secondly, as altering the ratio of the surplus-value to the total capital advanced, i.e., to the sum of the values of the constant and variable capital. The latter aspect will not be considered until we come to the third book, to which, with the object of treating them in their proper connexion, we also relegate many other points that relate to the present question. The march of our analysis compels this splitting up of the subject-matter, a splitting up that is quite in keeping with the spirit of capitalist production. For since, in this mode of production, the workman finds the instruments of labour existing independently of him as another man s property, economy in their use appears, with regard to him, to be a distinct operation, one that does not concern him, and which, therefore, has no connexion with the methods by which his own personal productiveness is increased. When numerous labourers work together side by side, whether in one and the same process, or in different but connected processes, they are said to co-operate, or to work in co-operation. Just as the offensive power of a squadron of cavalry, or the defensive power of a regiment of infantry is essentially different from the sum of the offensive or defensive powers of the individual cavalry or infantry soldiers taken separately, so the sum total of the mechanical forces exerted by isolated workmen differs from the social force that is developed, when many hands take part simultaneously in one and the same undivided operation, such as raising a heavy weight, turning a winch, or removing an obstacle. In such cases the effect of the combined labour could either not be produced at all by isolated individual labour, or it could only be produced by a great expenditure of time, or on a very dwarfed scale. Not only have we here an increase in the productive power of the individual, by means of co-operation, but the creation of a new power, namely, the collective power of masses. Apart from the new power that arises from the fusion of many forces into one single force, mere social contact begets in most industries an emulation and a stimulation of the animal spirits that heighten the efficiency of each individual workman. Hence it is that a dozen persons working together will, in their collective working-day of 144 hours, produce far more than twelve isolated men each working 12 hours, or than one man who works twelve days in succession. The reason of this is that man is, if not as Aristotle contends, a political, at all events a social animal. Although a number of men may be occupied together at the same time on the same, or the same kind of work, yet the labour of each, as a part of the collective labour, may correspond to a distinct phase of the labour-process, through all whose phases, in consequence of co-operation, the subject of their labour passes with greater speed. For instance, if a dozen masons place themselves in a row, so as to pass stones from the foot of a ladder to its summit, each of them does the same thing; nevertheless, their separate acts form connected parts of one total operation; they are particular phases, which must be gone through by each stone; and the stones are thus carried up quicker by the 24 hands of the row of men than they could be if each man went separately up and down the ladder with his burden. The object is carried over the same distance in a shorter time. Again, a combination of labour occurs whenever a building, for instance, is taken in hand on different sides simultaneously; although here also the co-operating masons are doing the same, or the same kind of work. The 12 masons, in their collective working-day of 144 hours, make much more progress with the building than one mason could make working for 12 days, or 144 hours. The reason is, that a body of men working in concert has hands and eyes both before and behind, and is, to a certain degree, omnipresent. The various parts of the work progress simultaneously. In the above instances we have laid stress upon the point that the men do the same, or the same kind of work, because this, the most simple form of labour in common, plays a great part in co-operation, even in its most fully developed stage. If the work be complicated, then the mere number of the men who co-operate allows of the various operations being apportioned to different hands, and, consequently, of being carried on simultaneously. The time necessary for the completion of the whole work is thereby shortened. In many industries, there are critical periods, determined by the nature of the process, during which certain definite results must be obtained. For instance, if a flock of sheep has to be shorn, or a field of wheat to be cut and harvested, the quantity and quality of the product depends on the work being begun and ended within a certain time. In these cases, the time that ought to be taken by the process is prescribed, just as it is in herring fishing. A single person cannot carve a working-day of more than, say 12 hours, out of the natural day, but 100 men co-operating extend the working-day to 1,200 hours. The shortness of the time allowed for the work is compensated for by the large mass of labour thrown upon the field of production at the decisive moment. The completion of the task within the proper time depends on the simultaneous application of numerous combined working-days; the amount of useful effect depends on the number of labourers; this number, however, is always smaller than the number of isolated labourers required to do the same amount of work in the same period. It is owing to the absence of this kind of co-operation that, in the western part of the United States, quantities of corn, and in those parts of East India where English rule has destroyed the old communities, quantities of cotton, are yearly wasted. On the one hand, co-operation allows of the work being carried on over an extended space; it is consequently imperatively called for in certain undertakings, such as draining, constructing dykes, irrigation works, and the making of canals, roads and railways. On the other hand, while extending the scale of production, it renders possible a relative contraction of the arena. This contraction of arena simultaneous with, and arising from, extension of scale, whereby a number of useless expenses are cut down, is owing to the conglomeration of labourers, to the aggregation of various processes, and to the concentration of the means of production. The combined working-day produces, relatively to an equal sum of isolated working-days, a greater quantity of use-values, and, consequently, diminishes the labour-time necessary for the production of a given useful effect. Whether the combined working-day, in a given case, acquires this increased productive power, because it heightens the mechanical force of labour, or extends its sphere of action over a greater space, or contracts the field of production relatively to the scale of production, or at the critical moment sets large masses of labour to work, or excites emulation between individuals and raises their animal spirits, or impresses on the similar operations carried on by a number of men the stamp of continuity and many-sidedness, or performs simultaneously different operations, or economises the means of production by use in common, or lends to individual labour the character of average social labour whichever of these be the cause of the increase, the special productive power of the combined working-day is, under all circumstances, the social productive power of labour, or the productive power of social labour. This power is due to co-operation itself. When the labourer co-operates systematically with others, he strips off the fetters of his individuality, and develops the capabilities of his species. As a general rule, labourers cannot co-operate without being brought together: their assemblage in one place is a necessary condition of their co-operation. Hence wage-labourers cannot co-operate, unless they are employed simultaneously by the same capital, the same capitalist, and unless therefore their labour-powers are bought simultaneously by him. The total value of these labour-powers, or the amount of the wages of these labourers for a day, or a week, as the case may be, must be ready in the pocket of the capitalist, before the workmen are assembled for the process of production. The payment of 300 workmen at once, though only for one day, requires a greater outlay of capital, than does the payment of a smaller number of men, week by week, during a whole year. Hence the number of the labourers that co-operate, or the scale of co-operation, depends, in the first instance, on the amount of capital that the individual capitalist can spare for the purchase of labour-power; in other words, on the extent to which a single capitalist has command over the means of subsistence of a number of labourers. And as with the variable, so it is with the constant capital. For example, the outlay on raw material is 30 times as great, for the capitalist who employs 300 men, as it is for each of the 30 capitalists who employ 10 men. The value and quantity of the instruments of labour used in common do not, it is true, increase at the same rate as the number of workmen, but they do increase very considerably. Hence, concentration of large masses of the means of production in the hands of individual capitalists, is a material condition for the co-operation of wage-labourers, and the extent of the co-operation or the scale of production, depends on the extent of this concentration. We saw in a former chapter, that a certain minimum amount of capital was necessary, in order that the number of labourers simultaneously employed, and, consequently, the amount of surplus-value produced, might suffice to liberate the employer himself from manual labour, to convert him from a small master into a capitalist, and thus formally to establish capitalist production. We now see that a certain minimum amount is a necessary condition for the conversion of numerous isolated and independent processes into one combined social process. We also saw that at first, the subjection of labour to capital was only a formal result of the fact, that the labourer, instead of working for himself, works for and consequently under the capitalist. By the co-operation of numerous wage-labourers, the sway of capital develops into a requisite for carrying on the labour-process itself, into a real requisite of production. That a capitalist should command on the field of production, is now as indispensable as that a general should command on the field of battle. All combined labour on a large scale requires, more or less, a directing authority, in order to secure the harmonious working of the individual activities, and to perform the general functions that have their origin in the action of the combined organism, as distinguished from the action of its separate organs. A single violin player is his own conductor; an orchestra requires a separate one. The work of directing, superintending, and adjusting, becomes one of the functions of capital, from the moment that the labour under the control of capital, becomes co-operative. Once a function of capital, it acquires special characteristics. The directing motive, the end and aim of capitalist production, is to extract the greatest possible amount of surplus-value, and consequently to exploit labour-power to the greatest possible extent. As the number of the co-operating labourers increases, so too does their resistance to the domination of capital, and with it, the necessity for capital to overcome this resistance by counterpressure. The control exercised by the capitalist is not only a special function, due to the nature of the social labour-process, and peculiar to that process, but it is, at the same time, a function of the exploitation of a social labour-process, and is consequently rooted in the unavoidable antagonism between the exploiter and the living and labouring raw material he exploits. Again, in proportion to the increasing mass of the means of production, now no longer the property of the labourer, but of the capitalist, the necessity increases for some effective control over the proper application of those means. Moreover, the co-operation of wage labourers is entirely brought about by the capital that employs them. Their union into one single productive body and the establishment of a connexion between their individual functions, are matters foreign and external to them, are not their own act, but the act of the capital that brings and keeps them together. Hence the connexion existing between their various labours appears to them, ideally, in the shape of a preconceived plan of the capitalist, and practically in the shape of the authority of the same capitalist, in the shape of the powerful will of another, who subjects their activity to his aims. If, then, the control of the capitalist is in substance two-fold by reason of the two-fold nature of the process of production itself, which, on the one hand, is a social process for producing use-values, on the other, a process for creating surplus-value in form that control is despotic. As co-operation extends its scale, this despotism takes forms peculiar to itself. Just as at first the capitalist is relieved from actual labour so soon as his capital has reached that minimum amount with which capitalist production, as such, begins, so now, he hands over the work of direct and constant supervision of the individual workmen, and groups of workmen, to a special kind of wage-labourer. An industrial army of workmen, under the command of a capitalist, requires, like a real army, officers (managers), and sergeants (foremen, overlookers), who, while the work is being done, command in the name of the capitalist. The work of supervision becomes their established and exclusive function. When comparing the mode of production of isolated peasants and artisans with production by slave-labour, the political economist counts this labour of superintendence among the faux frais of production. But, when considering the capitalist mode of production, he, on the contrary, treats the work of control made necessary by the co-operative character of the labour-process as identical with the different work of control, necessitated by the capitalist character of that process and the antagonism of interests between capitalist and labourer. It is not because he is a leader of industry that a man is a capitalist; on the contrary, he is a leader of industry because he is a capitalist. The leadership of industry is an attribute of capital, just as in feudal times the functions of general and judge, were attributes of landed property. The labourer is the owner of his labour-power until he has done bargaining for its sale with the capitalist; and he can sell no more than what he has i.e., his individual, isolated labour-power. This state of things is in no way altered by the fact that the capitalist, instead of buying the labour-power of one man, buys that of 100, and enters into separate contracts with 100 unconnected men instead of with one. He is at liberty to set the 100 men to work, without letting them co-operate. He pays them the value of 100 independent labour-powers, but he does not pay for the combined labour-power of the hundred. Being independent of each other, the labourers are isolated persons, who enter into relations with the capitalist, but not with one another. This co-operation begins only with the labour-process, but they have then ceased to belong to themselves. On entering that process, they become incorporated with capital. As co-operators, as members of a working organism, they are but special modes of existence of capital. Hence, the productive power developed by the labourer when working in co-operation, is the productive power of capital. This power is developed gratuitously, whenever the workmen are placed under given conditions, and it is capital that places them under such conditions. Because this power costs capital nothing, and because, on the other hand, the labourer himself does not develop it before his labour belongs to capital, it appears as a power with which capital is endowed by Nature a productive power that is immanent in capital. The colossal effects of simple co-operation are to be seen in the gigantic structures of the ancient Asiatics, Egyptians, Etruscans, &c. This power of Asiatic and Egyptian kings, Etruscan theocrats, &c., has in modern society been transferred to the capitalist, whether he be an isolated, or as in joint-stock companies, a collective capitalist. Co-operation, such as we find it at the dawn of human development, among races who live by the chase, or, say, in the agriculture of Indian communities, is based, on the one hand, on ownership in common of the means of production, and on the other hand, on the fact, that in those cases, each individual has no more torn himself off from the navel-string of his tribe or community, than each bee has freed itself from connexion with the hive. Such co-operation is distinguished from capitalistic co-operation by both of the above characteristics. The sporadic application of co-operation on a large scale in ancient times, in the middle ages, and in modern colonies, reposes on relations of dominion and servitude, principally on slavery. The capitalistic form, on the contrary, pre-supposes from first to last, the free wage-labourer, who sells his labour-power to capital. Historically, however, this form is developed in opposition to peasant agriculture and to the carrying on of independent handicrafts whether in guilds or not. From the standpoint of these, capitalistic co-operation does not manifest itself as a particular historical form of co-operation, but co-operation itself appears to be a historical form peculiar to, and specifically distinguishing, the capitalist process of production. Just as the social productive power of labour that is developed by co-operation, appears to be the productive power of capital, so co-operation itself, contrasted with the process of production carried on by isolated independent labourers, or even by small employers, appears to be a specific form of the capitalist process of production. It is the first change experienced by the actual labour-process, when subjected to capital. This change takes place spontaneously. The simultaneous employment of a large number of wage-labourers, in one and the same process, which is a necessary condition of this change, also forms the starting-point of capitalist production. This point coincides with the birth of capital itself. If then, on the one hand, the capitalist mode of production presents itself to us historically, as a necessary condition to the transformation of the labour-process into a social process, so, on the other hand, this social form of the labour-process presents itself, as a method employed by capital for the more profitable exploitation of labour, by increasing that labour s productiveness. In the elementary form, under which we have hitherto viewed it, co-operation is a necessary concomitant of all production on a large scale, but it does not, in itself, represent a fixed form characteristic of a particular epoch in the development of the capitalist mode of production. At the most it appears to do so, and that only approximately, in the handicraft-like beginnings of manufacture, and in that kind of agriculture on a large scale, which corresponds to the epoch of manufacture, and is distinguished from peasant agriculture, mainly by the number of the labourers simultaneously employed, and by the mass of the means of production concentrated for their use. Simple co-operation is always the prevailing form, in those branches of production in which capital operates on a large scale, and division of labour and machinery play but a subordinate part. Co-operation ever constitutes the fundamental form of the capitalist mode of production, nevertheless the elementary form of co-operation continues to subsist as a particular form of capitalist production side by side with the more developed forms of that mode of production.

Economic Manuscripts: Capital Vol. I - Chapter Thirteen

https://www.marxists.org/archive/marx/works/1867-c1/ch13.htm

That co-operation which is based on division of labour, assumes its typical form in manufacture, and is the prevalent characteristic form of the capitalist process of production throughout the manufacturing period properly so called. That period, roughly speaking, extends from the middle of the 16th to the last third of the 18th century. Manufacture takes its rise in two ways: (1.) By the assemblage, in one workshop under the control of a single capitalist, of labourers belonging to various independent handicrafts, but through whose hands a given article must pass on its way to completion. A carriage, for example, was formerly the product of the labour of a great number of independent artificers, such as wheelwrights, harness-makers, tailors, locksmiths, upholsterers, turners, fringe-makers, glaziers, painters, polishers, gilders, &c. In the manufacture of carriages, however, all these different artificers are assembled in one building where they work into one another s hands. It is true that a carriage cannot be gilt before it has been made. But if a number of carriages are being made simultaneously, some may be in the hands of the gilders while others are going through an earlier process. So far, we are still in the domain of simple co-operation, which finds its materials ready to hand in the shape of men and things. But very soon an important change takes place. The tailor, the locksmith, and the other artificers, being now exclusively occupied in carriage-making, each gradually loses, through want of practice, the ability to carry on, to its full extent, his old handicraft. But, on the other hand, his activity now confined in one groove, assumes the form best adapted to the narrowed sphere of action. At first, carriage manufacture is a combination of various independent handicrafts. By degrees, it becomes the splitting up of carriage-making into its various detail processes, each of which crystallises into the exclusive function of a particular workman, the manufacture, as a whole, being carried on by the men in conjunction. In the same way, cloth manufacture, as also a whole series of other manufactures, arose by combining different handicrafts together under the control of a single capitalist. (2.) Manufacture also arises in a way exactly the reverse of this namely, by one capitalist employing simultaneously in one workshop a number of artificers, who all do the same, or the same kind of work, such as making paper, type, or needles. This is co-operation in its most elementary form. Each of these artificers (with the help, perhaps, of one or two apprentices), makes the entire commodity, and he consequently performs in succession all the operations necessary for its production. He still works in his old handicraft-like way. But very soon external circumstances cause a different use to be made of the concentration of the workmen on one spot, and of the simultaneousness of their work. An increased quantity of the article has perhaps to be delivered within a given time. The work is therefore re-distributed. Instead of each man being allowed to perform all the various operations in succession, these operations are changed into disconnected, isolated ones, carried on side by side; each is assigned to a different artificer, and the whole of them together are performed simultaneously by the co-operating workmen. This accidental repartition gets repeated, develops advantages of its own, and gradually ossifies into a systematic division of labour. The commodity, from being the individual product of an independent artificer, becomes the social product of a union of artificers, each of whom performs one, and only one, of the constituent partial operations. The same operations which, in the case of a papermaker belonging to a German Guild, merged one into the other as the successive acts of one artificer, became in the Dutch paper manufacture so many partial operations carried on side by side by numerous co-operating labourers. The needlemaker of the Nuremberg Guild was the cornerstone on which the English needle manufacture was raised. But while in Nuremberg that single artificer performed a series of perhaps 20 operations one after another, in England it was not long before there were 20 needlemakers side by side, each performing one alone of those 20 operations, and in consequence of further experience, each of those 20 operations was again split up, isolated, and made the exclusive function of a separate workman. The mode in which manufacture arises, its growth out of handicrafts, is therefore two-fold. On the one hand, it arises from the union of various independent handicrafts, which become stripped of their independence and specialised to such an extent as to be reduced to mere supplementary partial processes in the production of one particular commodity. On the other hand, it arises from the co-operation of artificers of one handicraft; it splits up that particular handicraft into its various detail operations, isolating, and making these operations independent of one another up to the point where each becomes the exclusive function of a particular labourer. On the one hand, therefore, manufacture either introduces division of labour into a process of production, or further develops that division; on the other hand, it unites together handicrafts that were formerly separate. But whatever may have been its particular starting-point, its final form is invariably the same a productive mechanism whose parts are human beings. For a proper understanding of the division of labour in manufacture, it is essential that the following points be firmly grasped. First, the decomposition of a process of production into its various successive steps coincides, here, strictly with the resolution of a handicraft into its successive manual operations. Whether complex or simple, each operation has to be done by hand, retains the character of a handicraft, and is therefore dependent on the strength, skill, quickness, and sureness, of the individual workman in handling his tools. The handicraft continues to be the basis. This narrow technical basis excludes a really scientific analysis of any definite process of industrial production, since it is still a condition that each detail process gone through by the product must be capable of being done by hand and of forming, in its way, a separate handicraft. It is just because handicraft skill continues, in this way, to be the foundation of the process of production, that each workman becomes exclusively assigned to a partial function, and that for the rest of his life, his labour-power is turned into the organ of this detail function. Secondly, this division of labour is a particular sort of co-operation, and many of its advantages[*] spring from the general character of co-operation, and not from this particular form of it. If we now go more into detail, it is, in the first place, clear that a labourer who all his life performs one and the same simple operation, converts his whole body into the automatic, specialised implement of that operation. Consequently, he takes less time in doing it, than the artificer who performs a whole series of operations in succession. But the collective labourer, who constitutes the living mechanism of manufacture, is made up solely of such specialised detail labourers. Hence, in comparison with the independent handicraft, more is produced in a given time, or the productive power of labour is increased. Moreover, when once this fractional work is established as the exclusive function of one person, the methods it employs become perfected. The workman s continued repetition of the same simple act, and the concentration of his attention on it, teach him by experience how to attain the desired effect with the minimum of exertion. But since there are always several generations of labourers living at one time, and working together at the manufacture of a given article, the technical skill, the tricks of the trade thus acquired, become established, and are accumulated and handed down. Manufacture, in fact, produces the skill of the detail labourer, by reproducing, and systematically driving to an extreme within the workshop, the naturally developed differentiation of trades which it found ready to hand in society at large. On the other hand, the conversion of fractional work into the life-calling of one man, corresponds to the tendency shown by earlier societies, to make trades hereditary; either to petrify them into castes, or whenever definite historical conditions beget in the individual a tendency to vary in a manner incompatible with the nature of castes, to ossify them into guilds. Castes and guilds arise from the action of the same natural law, that regulates the differentiation of plants and animals into species and varieties, except that, when a certain degree of development has been reached, the heredity of castes and the exclusiveness of guilds are ordained as a law of society. It is only the special skill accumulated from generation to generation, and transmitted from father to son, that gives to the Hindu, as it does to the spider, this proficiency. And yet the work of such a Hindu weaver is very complicated, compared with that of a manufacturing labourer. An artificer, who performs one after another the various fractional operations in the production of a finished article, must at one time change his place, at another his tools. The transition from one operation to another interrupts the flow of his labour, and creates, so to say, gaps in his working-day. These gaps close up so soon as he is tied to one and the same operation all day long; they vanish in proportion as the changes in his work diminish. The resulting increased productive power is owing either to an increased expenditure of labour-power in a given time i.e., to increased intensity of labour or to a decrease in the amount of labour-power unproductively consumed. The extra expenditure of power, demanded by every transition from rest to motion, is made up for by prolonging the duration of the normal velocity when once acquired. On the other hand, constant labour of one uniform kind disturbs the intensity and flow of a man s animal spirits, which find recreation and delight in mere change of activity. The productiveness of labour depends not only on the proficiency of the workman, but on the perfection of his tools. Tools of the same kind, such as knives, drills, gimlets, hammers, &c., may be employed in different processes; and the same tool may serve various purposes in a single process. But so soon as the different operations of a labour-process are disconnected the one from the other, and each fractional operation acquires in the hands of the detail labourer a suitable and peculiar form, alterations become necessary in the implements that previously served more than one purpose. The direction taken by this change is determined by the difficulties experienced in consequence of the unchanged form of the implement. Manufacture is characterised by the differentiation of the instruments of labour a differentiation whereby implements of a given sort acquire fixed shapes, adapted to each particular application, and by the specialisation of those instruments, giving to each special implement its full play only in the hands of a specific detail labourer. In Birmingham alone 500 varieties of hammers are produced, and not only is each adapted to one particular process, but several varieties often serve exclusively for the different operations in one and the same process. The manufacturing period simplifies, improves, and multiplies the implements of labour, by adapting them to the exclusively special functions of each detail labourer. It thus creates at the same time one of the material conditions for the existence of machinery, which consists of a combination of simple instruments. The detail labourer and his implements are the simplest elements of manufacture. Let us now turn to its aspect as a whole. The organisation of manufacture has two fundamental forms which, in spite of occasional blending, are essentially different in kind, and, moreover, play very distinct parts in the subsequent transformation of manufacture into modern industry carried on by machinery. This double character arises from the nature of the article produced. This article either results from the mere mechanical fitting together of partial products made independently, or owes its completed shape to a series of connected processes and manipulations. A locomotive, for instance, consists of more than 5,000 independent parts. It cannot, however, serve as an example of the first kind of genuine manufacture, for it is a structure produced by modern mechanical industry. But a watch can; and William Petty used it to illustrate the division of labour in manufacture. Formerly the individual work of a Nuremberg artificer, the watch has been transformed into the social product of an immense number of detail labourers, such as mainspring makers, dial makers, spiral spring makers, jewelled hole makers, ruby lever makers, hand makers, case makers, screw makers, gilders, with numerous subdivisions, such as wheel makers (brass and steel separate), pin makers, movement makers, acheveur de pignon (fixes the wheels on the axles, polishes the facets, &c.), pivot makers, planteur de finissage (puts the wheels and springs in the works), finisseur de barillet (cuts teeth in the wheels, makes the holes of the right size, &c.), escapement makers, cylinder makers for cylinder escapements, escapement wheel makers, balance wheel makers, raquette makers (apparatus for regulating the watch), the planteur d chappement (escapement maker proper); then the repasseur de barillet (finishes the box for the spring, &c.), steel polishers, wheel polishers, screw polishers, figure painters, dial enamellers (melt the enamel on the copper), fabricant de pendants (makes the ring by which the case is hung), finisseur de charni re (puts the brass hinge in the cover, &c.), faiseur de secret (puts in the springs that open the case), graveur, ciseleur, polisseur de bo te, &c., &c., and last of all the repasseur, who fits together the whole watch and hands it over in a going state. Only a few parts of the watch pass through several hands; and all these membra disjecta come together for the first time in the hand that binds them into one mechanical whole. This external relation between the finished product, and its various and diverse elements makes it, as well in this case as in the case of all similar finished articles, a matter of chance whether the detail labourers are brought together in one workshop or not. The detail operations may further be carried on like so many independent handicrafts, as they are in the Cantons of Vaud and Neufch tel; while in Geneva there exist large watch manufactories where the detail labourers directly co-operate under the control of a single capitalist. And even in the latter case the dial, the springs, and the case, are seldom made in the factory itself. To carry on the trade as a manufacture, with concentration of workmen, is, in the watch trade, profitable only under exceptional conditions, because competition is greater between the labourers who desire to work at home, and because the splitting up of the work into a number of heterogeneous processes, permits but little use of the instruments of labour in common, and the capitalist, by scattering the work, saves the outlay on workshops, &c. Nevertheless the position of this detail labourer who, though he works at home, does so for a capitalist (manufacturer, tablisseur), is very different from that of the independent artificer, who works for his own customers. The second kind of manufacture, its perfected form, produces articles that go through connected phases of development, through a series of processes step by step, like the wire in the manufacture of needles, which passes through the hands of 72 and sometimes even 92 different detail workmen. In so far as such a manufacture, when first started, combines scattered handicrafts, it lessens the space by which the various phases of production are separated from each other. The time taken in passing from one stage to another is shortened, so is the labour that effectuates this passage. In comparison with a handicraft, productive power is gained, and this gain is owing to the general co-operative character of manufacture. On the other hand, division of labour, which is the distinguishing principle of manufacture, requires the isolation of the various stages of production and their independence of each other. The establishment and maintenance of a connexion between the isolated functions necessitates the incessant transport of the article from one hand to another, and from one process to another. From the standpoint of modern mechanical industry, this necessity stands forth as a characteristic and costly disadvantage, and one that is immanent in the principle of manufacture. If we confine our attention to some particular lot of raw materials, of rags, for instance, in paper manufacture, or of wire in needle manufacture, we perceive that it passes in succession through a series of stages in the hands of the various detail workmen until completion. On the other hand, if we look at the workshop as a whole, we see the raw material in all the stages of its production at the same time. The collective labourer, with one set of his many hands armed with one kind of tools, draws the wire, with another set, armed with different tools, he, at the same time, straightens it, with another, he cuts it, with another, points it, and so on. The different detail processes, which were successive in time, have become simultaneous, go on side by side in space. Hence, production of a greater quantum of finished commodities in a given time. This simultaneity, it is true, is due to the general co-operative form of the process as a whole; but Manufacture not only finds the conditions for co-operation ready to hand, it also, to some extent, creates them by the sub-division of handicraft labour. On the other hand, it accomplishes this social organisation of the labour-process only by riveting each labourer to a single fractional detail. Since the fractional product of each detail labourer is, at the same time, only a particular stage in the development of one and the same finished article, each labourer, or each group of labourers, prepares the raw material for another labourer or group. The result of the labour of the one is the starting-point for the labour of the other. The one workman therefore gives occupation directly to the other. The labour-time necessary in each partial process, for attaining the desired effect, is learnt by experience; and the mechanism of Manufacture, as a whole, is based on the assumption that a given result will be obtained in a given time. It is only on this assumption that the various supplementary labour-processes can proceed uninterruptedly, simultaneously, and side by side. It is clear that this direct dependence of the operations, and therefore of the labourers, on each other, compels each one of them to spend on his work no more than the necessary time, and thus a continuity, uniformity, regularity, order, and even intensity of labour, of quite a different kind, is begotten than is to be found in an independent handicraft or even in simple co-operation. The rule, that the labour-time expended on a commodity should not exceed that which is socially necessary for its production, appears, in the production of commodities generally, to be established by the mere effect of competition; since, to express ourselves superficially, each single producer is obliged to sell his commodity at its market-price. In Manufacture, on the contrary, the turning out of a given quantum of product in a given time is a technical law of the process of production itself. Different operations take, however, unequal periods, and yield therefore, in equal times unequal quantities of fractional products. If, therefore, the same labourer has, day after day, to perform the same operation, there must be a different number of labourers for each operation; for instance, in type manufacture, there are four founders and two breakers to one rubber: the founder casts 2,000 type an hour, the breaker breaks up 4,000, and the rubber polishes 8,000. Here we have again the principle of co-operation in its simplest form, the simultaneous employment of many doing the same thing; only now, this principle is the expression of an organic relation. The division of labour, as carried out in Manufacture, not only simplifies and multiplies the qualitatively different parts of the social collective labourer, but also creates a fixed mathematical relation or ratio which regulates the quantitative extent of those parts i.e., the relative number of labourers, or the relative size of the group of labourers, for each detail operation. It develops, along with the qualitative sub-division of the social labour-process, a quantitative rule and proportionality for that process. When once the most fitting proportion has been experimentally established for the numbers of the detail labourers in the various groups when producing on a given scale, that scale can be extended only by employing a multiple of each particular group. There is this to boot, that the same individual can do certain kinds of work just as well on a large as on a small scale; for instance, the labour of superintendence, the carriage of the fractional product from one stage to the next, &c. The isolation of such functions, their allotment to a particular labourer, does not become advantageous till after an increase in the number of labourers employed; but this increase must affect every group proportionally. The isolated group of labourers to whom any particular detail function is assigned, is made up of homogeneous elements, and is one of the constituent parts of the total mechanism. In many manufactures, however, the group itself is an organised body of labour, the total mechanism being a repetition or multiplication of these elementary organisms. Take, for instance, the manufacture of glass bottles. It may be resolved into three essentially different stages. First, the preliminary stage, consisting of the preparation of the components of the glass, mixing the sand and lime, &c., and melting them into a fluid mass of glass. Various detail labourers are employed in this first stage, as also in the final one of removing the bottles from the drying furnace, sorting and packing them, &c. In the middle, between these two stages, comes the glass melting proper, the manipulation of the fluid mass. At each mouth of the furnace, there works a group, called the hole, consisting of one bottlemaker or finisher, one blower, one gatherer, one putter-up or whetter-off, and one taker-in. These five detail workers are so many special organs of a single working organism that acts only as a whole, and therefore can operate only by the direct co-operation of the whole five. The whole body is paralysed if but one of its members be wanting. But a glass furnace has several openings (in England from 4 to 6), each of which contains an earthenware melting-pot full of molten glass, and employs a similar five-membered group of workers. The organisation of each group is based on division of labour, but the bond between the different groups is simple co-operation, which, by using in common one of the means of production, the furnace, causes it to be more economically consumed. Such a furnace, with its 4-6 groups, constitutes a glass house; and a glass manufactory comprises a number of such glass houses, together with the apparatus and workmen requisite for the preparatory and final stages. Finally, just as Manufacture arises in part from the combination of various handicrafts, so, too, it develops into a combination of various manufactures. The larger English glass manufacturers, for instance, make their own earthenware melting-pots, because, on the quality of these depends, to a great extent, the success or failure of the process. The manufacture of one of the means of production is here united with that of the product. On the other hand, the manufacture of the product may be united with other manufactures, of which that product is the raw material, or with the products of which it is itself subsequently mixed. Thus, we find the manufacture of flint glass combined with that of glass cutting and brass founding; the latter for the metal settings of various articles of glass. The various manufactures so combined form more or less separate departments of a larger manufacture, but are at the same time independent processes, each with its own division of labour. In spite of the many advantages offered by this combination of manufactures, it never grows into a complete technical system on its own foundation. That happens only on its transformation into an industry carried on by machinery. Early in the manufacturing period, the principle of lessening the necessary labour-time in the production of commodities, was accepted and formulated: and the use of machines, especially for certain simple first processes that have to be conducted on a very large scale, and with the application of great force, sprang up here and there. Thus, at an early period in paper manufacture, the tearing up of the rags was done by paper-mills; and in metal works, the pounding of the ores was effected by stamping mills. The Roman Empire had handed down the elementary form of all machinery in the water-wheel. The handicraft period bequeathed to us the great inventions of the compass, of gunpowder, of type-printing, and of the automatic clock. But, on the whole, machinery played that subordinate part which Adam Smith assigns to it in comparison with division of labour. The sporadic use of machinery in the 17th century was of the greatest importance, because it supplied the great mathematicians of that time with a practical basis and stimulant to the creation of the science of mechanics. The collective labourer, formed by the combination of a number of detail labourers, is the machinery specially characteristic of the manufacturing period. The various operations that are performed in turns by the producer of a commodity, and coalesce one with another during the progress of production, lay claim to him in various ways. In one operation he must exert more strength, in another more skill, in another more attention; and the same individual does not possess all these qualities in an equal degree. After Manufacture has once separated, made independent, and isolated the various operations, the labourers are divided, classified, and grouped according to their predominating qualities. If their natural endowments are, on the one hand, the foundation on which the division of labour is built up, on the other hand, Manufacture, once introduced, develops in them new powers that are by nature fitted only for limited and special functions. The collective labourer now possesses, in an equal degree of excellence, all the qualities requisite for production, and expends them in the most economical manner, by exclusively employing all his organs, consisting of particular labourers, or groups of labourers, in performing their special functions. The one-sidedness and the deficiencies of the detail labourer become perfections when he is a part of the collective labourer. The habit of doing only one thing converts him into a never failing instrument, while his connexion with the whole mechanism compels him to work with the regularity of the parts of a machine. Since the collective labourer has functions, both simple and complex, both high and low, his members, the individual labour-powers, require different degrees of training, and must therefore have different values. Manufacture, therefore, develops a hierarchy of labour-powers, to which there corresponds a scale of wages. If, on the one hand, the individual labourers are appropriated and annexed for life by a limited function; on the other hand, the various operations of the hierarchy are parcelled out among the labourers according to both their natural and their acquired capabilities. Every process of production, however, requires certain simple manipulations, which every man is capable of doing. They too are now severed from their connexion with the more pregnant moments of activity, and ossified into exclusive functions of specially appointed labourers. Hence, Manufacture begets, in every handicraft that it seizes upon, a class of so-called unskilled labourers, a class which handicraft industry strictly excluded. If it develops a one-sided speciality into a perfection, at the expense of the whole of a man s working capacity, it also begins to make a speciality of the absence of all development. Alongside of the hierarchic gradation there steps the simple separation of the labourers into skilled and unskilled. For the latter, the cost of apprenticeship vanishes; for the former, it diminishes, compared with that of artificers, in consequence of the functions being simplified. In both cases the value of labour-power falls. An exception to this law holds good whenever the decomposition of the labour-process begets new and comprehensive functions, that either had no place at all, or only a very modest one, in handicrafts. The fall in the value of labour-power, caused by the disappearance or diminution of the expenses of apprenticeship, implies a direct increase of surplus-value for the benefit of capital; for everything that shortens the necessary labour-time required for the reproduction of labour-power, extends the domain of surplus-labour. We first considered the origin of Manufacture, then its simple elements, then the detail labourer and his implements, and finally, the totality of the mechanism. We shall now lightly touch upon the relation between the division of labour in manufacture, and the social division of labour, which forms the foundation of all production of commodities. If we keep labour alone in view, we may designate the separation of social production into its main divisions or genera viz., agriculture, industries, &c., as division of labour in general, and the splitting up of these families into species and sub-species, as division of labour in particular, and the division of labour within the workshop as division of labour in singular or in detail. Division of labour in a society, and the corresponding tying down of individuals to a particular calling, develops itself, just as does the division of labour in manufacture, from opposite starting-points. Within a family, and after further development within a tribe, there springs up naturally a division of labour, caused by differences of sex and age, a division that is consequently based on a purely physiological foundation, which division enlarges its materials by the expansion of the community, by the increase of population, and more especially, by the conflicts between different tribes, and the subjugation of one tribe by another. On the other hand, as I have before remarked, the exchange of products springs up at the points where different families, tribes, communities, come in contact; for, in the beginning of civilisation, it is not private individuals but families, tribes, &c., that meet on an independent footing. Different communities find different means of production, and different means of subsistence in their natural environment. Hence, their modes of production, and of living, and their products are different. It is this spontaneously developed difference which, when different communities come in contact, calls forth the mutual exchange of products, and the consequent gradual conversion of those products into commodities. Exchange does not create the differences between the spheres of production, but brings what are already different into relation, and thus converts them into more or less inter-dependent branches of the collective production of an enlarged society. In the latter case, the social division of labour arises from the exchange between spheres of production, that are originally distinct and independent of one another. In the former, where the physiological division of labour is the starting-point, the particular organs of a compact whole grow loose, and break off, principally owing to the exchange of commodities with foreign communities, and then isolate themselves so far, that the sole bond, still connecting the various kinds of work, is the exchange of the products as commodities. In the one case, it is the making dependent what was before independent; in the other case, the making independent what was before dependent. The foundation of every division of labour that is well developed, and brought about by the exchange of commodities, is the separation between town and country. It may be said, that the whole economic history of society is summed up in the movement of this antithesis. We pass it over, however, for the present. Just as a certain number of simultaneously employed labourers are the material pre-requisites for division of labour in manufacture, so are the number and density of the population, which here correspond to the agglomeration in one workshop, a necessary condition for the division of labour in society. Nevertheless, this density is more or less relative. A relatively thinly populated country, with well-developed means of communication, has a denser population than a more numerously populated country, with badly-developed means of communication; and in this sense the Northern States of the American Union, for instance, are more thickly populated than India. Since the production and the circulation of commodities are the general pre-requisites of the capitalist mode of production, division of labour in manufacture demands, that division of labour in society at large should previously have attained a certain degree of development. Inversely, the former division reacts upon and develops and multiplies the latter. Simultaneously, with the differentiation of the instruments of labour, the industries that produce these instruments, become more and more differentiated. If the manufacturing system seize upon an industry, which, previously, was carried on in connexion with others, either as a chief or as a subordinate industry, and by one producer, these industries immediately separate their connexion, and become independent. If it seize upon a particular stage in the production of a commodity, the other stages of its production become converted into so many independent industries. It has already been stated, that where the finished article consists merely of a number of parts fitted together, the detail operations may re-establish themselves as genuine and separate handicrafts. In order to carry out more perfectly the division of labour in manufacture, a single branch of production is, according to the varieties of its raw material, or the various forms that one and the same raw material may assume, split up into numerous, and to some extent, entirely new manufactures. Accordingly, in France alone, in the first half of the 18th century, over 100 different kinds of silk stuffs were woven, and, in Avignon, it was law, that every apprentice should devote himself to only one sort of fabrication, and should not learn the preparation of several kinds of stuff at once. The territorial division of labour, which confines special branches of production to special districts of a country, acquires fresh stimulus from the manufacturing system, which exploits every special advantage. The Colonial system and the opening out of the markets of the world, both of which are included in the general conditions of existence of the manufacturing period, furnish rich material for developing the division of labour in society. It is not the place, here, to go on to show how division of labour seizes upon, not only the economic, but every other sphere of society, and everywhere lays the foundation of that all engrossing system of specialising and sorting men, that development in a man of one single faculty at the expense of all other faculties, which caused A. Ferguson, the master of Adam Smith, to exclaim: We make a nation of Helots, and have no free citizens. But, in spite of the numerous analogies and links connecting them, division of labour in the interior of a society, and that in the interior of a workshop, differ not only in degree, but also in kind. The analogy appears most indisputable where there is an invisible bond uniting the various branches of trade. For instance the cattle-breeder produces hides, the tanner makes the hides into leather, and the shoemaker, the leather into boots. Here the thing produced by each of them is but a step towards the final form, which is the product of all their labours combined. There are, besides, all the various industries that supply the cattle-breeder, the tanner, and the shoemaker with the means of production. Now it is quite possible to imagine, with Adam Smith, that the difference between the above social division of labour, and the division in manufacture, is merely subjective, exists merely for the observer, who, in a manufacture, can see with one glance, all the numerous operations being performed on one spot, while in the instance given above, the spreading out of the work over great areas, and the great number of people employed in each branch of labour, obscure the connexion. But what is it that forms the bond between the independent labours of the cattle-breeder, the tanner, and the shoemaker? It is the fact that their respective products are commodities. What, on the other hand, characterises division of labour in manufactures? The fact that the detail labourer produces no commodities. It is only the common product of all the detail labourers that becomes a commodity. Division of labour in society is brought about by the purchase and sale of the products of different branches of industry, while the connexion between the detail operations in a workshop, is due to the sale of the labour-power of several workmen to one capitalist, who applies it as combined labour-power. The division of labour in the workshop implies concentration of the means of production in the hands of one capitalist; the division of labour in society implies their dispersion among many independent producers of commodities. While within the workshop, the iron law of proportionality subjects definite numbers of workmen to definite functions, in the society outside the workshop, chance and caprice have full play in distributing the producers and their means of production among the various branches of industry. The different spheres of production, it is true, constantly tend to an equilibrium: for, on the one hand, while each producer of a commodity is bound to produce a use-value, to satisfy a particular social want, and while the extent of these wants differs quantitatively, still there exists an inner relation which settles their proportions into a regular system, and that system one of spontaneous growth; and, on the other hand, the law of the value of commodities ultimately determines how much of its disposable working-time society can expend on each particular class of commodities. But this constant tendency to equilibrium, of the various spheres of production, is exercised, only in the shape of a reaction against the constant upsetting of this equilibrium. The a priori system on which the division of labour, within the workshop, is regularly carried out, becomes in the division of labour within the society, an a posteriori, nature-imposed necessity, controlling the lawless caprice of the producers, and perceptible in the barometrical fluctuations of the market-prices. Division of labour within the workshop implies the undisputed authority of the capitalist over men, that are but parts of a mechanism that belongs to him. The division of labour within the society brings into contact independent commodity-producers, who acknowledge no other authority but that of competition, of the coercion exerted by the pressure of their mutual interests; just as in the animal kingdom, the bellum omnium contra omnes [war of all against all Hobbes] more or less preserves the conditions of existence of every species. The same bourgeois mind which praises division of labour in the workshop, life-long annexation of the labourer to a partial operation, and his complete subjection to capital, as being an organisation of labour that increases its productiveness that same bourgeois mind denounces with equal vigour every conscious attempt to socially control and regulate the process of production, as an inroad upon such sacred things as the rights of property, freedom and unrestricted play for the bent of the individual capitalist. It is very characteristic that the enthusiastic apologists of the factory system have nothing more damning to urge against a general organisation of the labour of society, than that it would turn all society into one immense factory. If, in a society with capitalist production, anarchy in the social division of labour and despotism in that of the workshop are mutual conditions the one of the other, we find, on the contrary, in those earlier forms of society in which the separation of trades has been spontaneously developed, then crystallised, and finally made permanent by law, on the one hand, a specimen of the organisation of the labour of society, in accordance with an approved and authoritative plan, and on the other, the entire exclusion of division of labour in the workshop, or at all events a mere dwarflike or sporadic and accidental development of the same. Those small and extremely ancient Indian communities, some of which have continued down to this day, are based on possession in common of the land, on the blending of agriculture and handicrafts, and on an unalterable division of labour, which serves, whenever a new community is started, as a plan and scheme ready cut and dried. Occupying areas of from 100 up to several thousand acres, each forms a compact whole producing all it requires. The chief part of the products is destined for direct use by the community itself, and does not take the form of a commodity. Hence, production here is independent of that division of labour brought about, in Indian society as a whole, by means of the exchange of commodities. It is the surplus alone that becomes a commodity, and a portion of even that, not until it has reached the hands of the State, into whose hands from time immemorial a certain quantity of these products has found its way in the shape of rent in kind. The constitution of these communities varies in different parts of India. In those of the simplest form, the land is tilled in common, and the produce divided among the members. At the same time, spinning and weaving are carried on in each family as subsidiary industries. Side by side with the masses thus occupied with one and the same work, we find the chief inhabitant, who is judge, police, and tax-gatherer in one; the book-keeper, who keeps the accounts of the tillage and registers everything relating thereto; another official, who prosecutes criminals, protects strangers travelling through and escorts them to the next village; the boundary man, who guards the boundaries against neighbouring communities; the water-overseer, who distributes the water from the common tanks for irrigation; the Brahmin, who conducts the religious services; the schoolmaster, who on the sand teaches the children reading and writing; the calendar-Brahmin, or astrologer, who makes known the lucky or unlucky days for seed-time and harvest, and for every other kind of agricultural work; a smith and a carpenter, who make and repair all the agricultural implements; the potter, who makes all the pottery of the village; the barber, the washerman, who washes clothes, the silversmith, here and there the poet, who in some communities replaces the silversmith, in others the schoolmaster. This dozen of individuals is maintained at the expense of the whole community. If the population increases, a new community is founded, on the pattern of the old one, on unoccupied land. The whole mechanism discloses a systematic division of labour; but a division like that in manufactures is impossible, since the smith and the carpenter, &c., find an unchanging market, and at the most there occur, according to the sizes of the villages, two or three of each, instead of one. The law that regulates the division of labour in the community acts with the irresistible authority of a law of Nature, at the same time that each individual artificer, the smith, the carpenter, and so on, conducts in his workshop all the operations of his handicraft in the traditional way, but independently, and without recognising any authority over him. The simplicity of the organisation for production in these self-sufficing communities that constantly reproduce themselves in the same form, and when accidentally destroyed, spring up again on the spot and with the same name this simplicity supplies the key to the secret of the unchangeableness of Asiatic societies, an unchangeableness in such striking contrast with the constant dissolution and refounding of Asiatic States, and the never-ceasing changes of dynasty. The structure of the economic elements of society remains untouched by the storm-clouds of the political sky. The rules of the guilds, as I have said before, by limiting most strictly the number of apprentices and journeymen that a single master could employ, prevented him from becoming a capitalist. Moreover, he could not employ his journeymen in many other handicrafts than the one in which he was a master. The guilds zealously repelled every encroachment by the capital of merchants, the only form of free capital with which they came in contact. A merchant could buy every kind of commodity, but labour as a commodity he could not buy. He existed only on sufferance, as a dealer in the products of the handicrafts. If circumstances called for a further division of labour, the existing guilds split themselves up into varieties, or founded new guilds by the side of the old ones; all this, however, without concentrating various handicrafts in a single workshop. Hence, the guild organisation, however much it may have contributed by separating, isolating, and perfecting the handicrafts, to create the material conditions for the existence of manufacture, excluded division of labour in the workshop. On the whole, the labourer and his means of production remained closely united, like the snail with its shell, and thus there was wanting the principal basis of manufacture, the separation of the labourer from his means of production, and the conversion of these means into capital. While division of labour in society at large, whether such division be brought about or not by exchange of commodities, is common to economic formations of society the most diverse, division of labour in the workshop, as practised by manufacture, is a special creation of the capitalist mode of production alone. An increased number of labourers under the control of one capitalist is the natural starting-point, as well of co-operation generally, as of manufacture in particular. But the division of labour in manufacture makes this increase in the number of workmen a technical necessity. The minimum number that any given capitalist is bound to employ is here prescribed by the previously established division of labour. On the other hand, the advantages of further division are obtainable only by adding to the number of workmen, and this can be done only by adding multiples of the various detail groups. But an increase in the variable component of the capital employed necessitates an increase in its constant component, too, in the workshops, implements, &c., and, in particular, in the raw material, the call for which grows quicker than the number of workmen. The quantity of it consumed in a given time, by a given amount of labour, increases in the same ratio as does the productive power of that labour in consequence of its division. Hence, it is a law, based on the very nature of manufacture, that the minimum amount of capital, which is bound to be in the hands of each capitalist, must keep increasing; in other words, that the transformation into capital of the social means of production and subsistence must keep extending. In manufacture, as well as in simple co-operation, the collective working organism is a form of existence of capital. The mechanism that is made up of numerous individual detail labourers belongs to the capitalist. Hence, the productive power resulting from a combination of labours appears to be the productive power of capital. Manufacture proper not only subjects the previously independent workman to the discipline and command of capital, but, in addition, creates a hierarchic gradation of the workmen themselves. While simple co-operation leaves the mode of working by the individual for the most part unchanged, manufacture thoroughly revolutionises it, and seizes labour-power by its very roots. It converts the labourer into a crippled monstrosity, by forcing his detail dexterity at the expense of a world of productive capabilities and instincts; just as in the States of La Plata they butcher a whole beast for the sake of his hide or his tallow. Not only is the detail work distributed to the different individuals, but the individual himself is made the automatic motor of a fractional operation, and the absurd fable of Menenius Agrippa, which makes man a mere fragment of his own body, becomes realised. If, at first, the workman sells his labour-power to capital, because the material means of producing a commodity fail him, now his very labour-power refuses its services unless it has been sold to capital. Its functions can be exercised only in an environment that exists in the workshop of the capitalist after the sale. By nature unfitted to make anything independently, the manufacturing labourer develops productive activity as a mere appendage of the capitalist s workshop. As the chosen people bore in their features the sign manual of Jehovah, so division of labour brands the manufacturing workman as the property of capital. The knowledge, the judgement, and the will, which, though in ever so small a degree, are practised by the independent peasant or handicraftsman, in the same way as the savage makes the whole art of war consist in the exercise of his personal cunning these faculties are now required only for the workshop as a whole. Intelligence in production expands in one direction, because it vanishes in many others. What is lost by the detail labourers, is concentrated in the capital that employs them. It is a result of the division of labour in manufactures, that the labourer is brought face to face with the intellectual potencies of the material process of production, as the property of another, and as a ruling power. This separation begins in simple co-operation, where the capitalist represents to the single workman, the oneness and the will of the associated labour. It is developed in manufacture which cuts down the labourer into a detail labourer. It is completed in modern industry, which makes science a productive force distinct from labour and presses it into the service of capital. In manufacture, in order to make the collective labourer, and through him capital, rich in social productive power, each labourer must be made poor in individual productive powers. As a matter of fact, some few manufacturers in the middle of the 18th century preferred, for certain operations that were trade secrets, to employ half-idiotic persons. After describing the stupidity of the detail labourer he goes on: For preventing the complete deterioration of the great mass of the people by division of labour, A. Smith recommends education of the people by the State, but prudently, and in homeopathic doses. G. Garnier, his French translator and commentator, who, under the first French Empire, quite naturally developed into a senator, quite as naturally opposes him on this point. Education of the masses, he urges, violates the first law of the division of labour, and with it Some crippling of body and mind is inseparable even from division of labour in society as a whole. Since, however, manufacture carries this social separation of branches of labour much further, and also, by its peculiar division, attacks the individual at the very roots of his life, it is the first to afford the materials for, and to give a start to, industrial pathology. Co-operation based on division of labour, in other words, manufacture, commences as a spontaneous formation. So soon as it attains some consistence and extension, it becomes the recognised methodical and systematic form of capitalist production. History shows how the division of labour peculiar to manufacture, strictly so called, acquires the best adapted form at first by experience, as it were behind the backs of the actors, and then, like the guild handicrafts, strives to hold fast that form when once found, and here and there succeeds in keeping it for centuries. Any alteration in this form, except in trivial matters, is solely owing to a revolution in the instruments of labour. Modern manufacture wherever it arises I do not here allude to modern industry based on machinery either finds the disjecta membra poetae ready to hand, and only waiting to be collected together, as is the case in the manufacture of clothes in large towns, or it can easily apply the principle of division, simply by exclusively assigning the various operations of a handicraft (such as book-binding) to particular men. In such cases, a week s experience is enough to determine the proportion between the numbers of the hands necessary for the various functions. By decomposition of handicrafts, by specialisation of the instruments of labour, by the formation of detail labourers, and by grouping and combining the latter into a single mechanism, division of labour in manufacture creates a qualitative gradation, and a quantitative proportion in the social process of production; it consequently creates a definite organisation of the labour of society, and thereby develops at the same time new productive forces in the society. In its specific capitalist form and under the given conditions, it could take no other form than a capitalistic one manufacture is but a particular method of begetting relative surplus-value, or of augmenting at the expense of the labourer the self-expansion of capital usually called social wealth, Wealth of Nations, &c. It increases the social productive power of labour, not only for the benefit of the capitalist instead of for that of the labourer, but it does this by crippling the individual labourers. It creates new conditions for the lordship of capital over labour. If, therefore, on the one hand, it presents itself historically as a progress and as a necessary phase in the economic development of society, on the other hand, it is a refined and civilised method of exploitation. Political Economy, which as an independent science, first sprang into being during the period of manufacture, views the social division of labour only from the standpoint of manufacture, and sees in it only the means of producing more commodities with a given quantity of labour, and, consequently, of cheapening commodities and hurrying on the accumulation of capital. In most striking contrast with this accentuation of quantity and exchange-value, is the attitude of the writers of classical antiquity, who hold exclusively by quality and use-value. In consequence of the separation of the social branches of production, commodities are better made, the various bents and talents of men select a suitable field, and without some restraint no important results can be obtained anywhere. Hence both product and producer are improved by division of labour. If the growth of the quantity produced is occasionally mentioned, this is only done with reference to the greater abundance of use-values. There is not a word alluding to exchange-value or to the cheapening of commodities. This aspect, from the standpoint of use-value alone, is taken as well by Plato, who treats division of labour as the foundation on which the division of society into classes is based, as by Xenophon, who with characteristic bourgeois instinct, approaches more nearly to division of labour within the workshop. Plato s Republic, in so far as division of labour is treated in it, as the formative principle of the State, is merely the Athenian idealisation of the Egyptian system of castes, Egypt having served as the model of an industrial country to many of his contemporaries also, amongst others to Isocrates, and it continued to have this importance to the Greeks of the Roman Empire. During the manufacturing period proper, i.e., the period during which manufacture is the predominant form taken by capitalist production, many obstacles are opposed to the full development of the peculiar tendencies of manufacture. Although manufacture creates, as we have already seen, a simple separation of the labourers into skilled and unskilled, simultaneously with their hierarchic arrangement in classes, yet the number of the unskilled labourers, owing to the preponderating influence of the skilled, remains very limited. Although it adapts the detail operations to the various degrees of maturity, strength, and development of the living instruments of labour, thus conducing to exploitation of women and children, yet this tendency as a whole is wrecked on the habits and the resistance of the male labourers. Although the splitting up of handicrafts lowers the cost of forming the workman, and thereby lowers his value, yet for the more difficult detail work, a longer apprenticeship is necessary, and, even where it would be superfluous, is jealously insisted upon by the workmen. In England, for instance, we find the laws of apprenticeship, with their seven years probation, in full force down to the end of the manufacturing period; and they are not thrown on one side till the advent of Modern Industry. Since handicraft skill is the foundation of manufacture, and since the mechanism of manufacture as a whole possesses no framework, apart from the labourers themselves, capital is constantly compelled to wrestle with the insubordination of the workmen. Hence throughout the whole manufacturing period there runs the complaint of want of discipline among the workmen. And had we not the testimony of contemporary writers, the simple facts, that during the period between the 16th century and the epoch of Modern Industry, capital failed to become the master of the whole disposable working-time of the manufacturing labourers, that manufactures are short-lived, and change their locality from one country to another with the emigrating or immigrating workmen, these facts would speak volumes. Order must in one way or another be established, exclaims in 1770 the oft-cited author of the Essay on Trade and Commerce. Order, re-echoes Dr. Andrew Ure 66 years later, Order was wanting in manufacture based on the scholastic dogma of division of labour, and Arkwright created order. At the same time manufacture was unable, either to seize upon the production of society to its full extent, or to revolutionise that production to its very core. It towered up as an economic work of art, on the broad foundation of the town handicrafts, and of the rural domestic industries. At a given stage in its development, the narrow technical basis on which manufacture rested, came into conflict with requirements of production that were created by manufacture itself. One of its most finished creations was the workshop for the production of the instruments of labour themselves, including especially the complicated mechanical apparatus then already employed. This workshop, the product of the division of labour in manufacture, produced in its turn machines. It is they that sweep away the handicraftsman s work as the regulating principle of social production. Thus, on the one hand, the technical reason for the life-long annexation of the workman to a detail function is removed. On the other hand, the fetters that this same principle laid on the dominion of capital, fall away.

Economic Manuscripts: Capital Vol. I - Chapter Fourteen

https://www.marxists.org/archive/marx/works/1867-c1/ch14.htm

John Stuart Mill says in his Principles of Political Economy": That is, however, by no means the aim of the capitalistic application of machinery. Like every other increase in the productiveness of labour, machinery is intended to cheapen commodities, and, by shortening that portion of the working-day, in which the labourer works for himself, to lengthen the other portion that he gives, without an equivalent, to the capitalist. In short, it is a means for producing surplus-value. In manufacture, the revolution in the mode of production begins with the labour-power, in modern industry it begins with the instruments of labour. Our first inquiry then is, how the instruments of labour are converted from tools into machines, or what is the difference between a machine and the implements of a handicraft? We are only concerned here with striking and general characteristics; for epochs in the history of society are no more separated from each other by hard and fast lines of demarcation, than are geological epochs. Mathematicians and mechanicians, and in this they are followed by a few English economists, call a tool a simple machine, and a machine a complex tool. They see no essential difference between them, and even give the name of machine to the simple mechanical powers, the lever, the inclined plane, the screw, the wedge, &c. As a matter of fact, every machine is a combination of those simple powers, no matter how they may be disguised. From the economic standpoint this explanation is worth nothing, because the historical element is wanting. Another explanation of the difference between tool and machine is that in the case of a tool, man is the motive power, while the motive power of a machine is something different from man, as, for instance, an animal, water, wind, and so on. According to this, a plough drawn by oxen, which is a contrivance common to the most different epochs, would be a machine, while Claussen s circular loom, which, worked by a single labourer, weaves 96,000 picks per minute, would be a mere tool. Nay, this very loom, though a tool when worked by hand, would, if worked by steam, be a machine. And since the application of animal power is one of man s earliest inventions, production by machinery would have preceded production by handicrafts. When in 1735, John Wyatt brought out his spinning machine, and began the industrial revolution of the 18th century, not a word did he say about an ass driving it instead of a man, and yet this part fell to the ass. He described it as a machine to spin without fingers. All fully developed machinery consists of three essentially different parts, the motor mechanism, the transmitting mechanism, and finally the tool or working machine. The motor mechanism is that which puts the whole in motion. It either generates its own motive power, like the steam-engine, the caloric engine, the electromagnetic machine, &c., or it receives its impulse from some already existing natural force, like the water-wheel from a head of water, the wind-mill from wind, &c. The transmitting mechanism, composed of fly-wheels, shafting, toothed wheels, pullies, straps, ropes, bands, pinions, and gearing of the most varied kinds, regulates the motion, changes its form where necessary, as for instance, from linear to circular, and divides and distributes it among the working machines. These two first parts of the whole mechanism are there, solely for putting the working machines in motion, by means of which motion the subject of labour is seized upon and modified as desired. The tool or working machine is that part of the machinery with which the industrial revolution of the 18th century started. And to this day it constantly serves as such a starting-point, whenever a handicraft, or a manufacture, is turned into an industry carried on by machinery. On a closer examination of the working machine proper, we find in it, as a general rule, though often, no doubt, under very altered forms, the apparatus and tools used by the handicraftsman or manufacturing workman; with this difference, that instead of being human implements, they are the implements of a mechanism, or mechanical implements. Either the entire machine is only a more or less altered mechanical edition of the old handicraft tool, as, for instance, the power-loom, or the working parts fitted in the frame of the machine are old acquaintances, as spindles are in a mule, needles in a stocking-loom, saws in a sawing-machine, and knives in a chopping machine. The distinction between these tools and the body proper of the machine, exists from their very birth; for they continue for the most part to be produced by handicraft, or by manufacture, and are afterwards fitted into the body of the machine, which is the product of machinery. The machine proper is therefore a mechanism that, after being set in motion, performs with its tools the same operations that were formerly done by the workman with similar tools. Whether the motive power is derived from man, or from some other machine, makes no difference in this respect. From the moment that the tool proper is taken from man, and fitted into a mechanism, a machine takes the place of a mere implement. The difference strikes one at once, even in those cases where man himself continues to be the prime mover. The number of implements that he himself can use simultaneously, is limited by the number of his own natural instruments of production, by the number of his bodily organs. In Germany, they tried at first to make one spinner work two spinning-wheels, that is, to work simultaneously with both hands and both feet. This was too difficult. Later, a treddle spinning-wheel with two spindles was invented, but adepts in spinning, who could spin two threads at once, were almost as scarce as two-headed men. The Jenny, on the other hand, even at its very birth, spun with 12-18 spindles, and the stocking-loom knits with many thousand needles at once. The number of tools that a machine can bring into play simultaneously, is from the very first emancipated from the organic limits that hedge in the tools of a handicraftsman. In many manual implements the distinction between man as mere motive power, and man as the workman or operator properly so called, is brought into striking contrast. For instance, the foot is merely the prime mover of the spinning-wheel, while the hand, working with the spindle, and drawing and twisting, performs the real operation of spinning. It is this last part of the handicraftsman s implement that is first seized upon by the industrial revolution, leaving to the workman, in addition to his new labour of watching the machine with his eyes and correcting its mistakes with his hands, the merely mechanical part of being the moving power. On the other hand, implements, in regard to which man has always acted as a simple motive power, as, for instance, by turning the crank of a mill, by pumping, by moving up and down the arm of a bellows, by pounding with a mortar, &c., such implements soon call for the application of animals, water and wind as motive powers. Here and there, long before the period of manufacture, and also, to some extent, during that period, these implements pass over into machines, but without creating any revolution in the mode of production. It becomes evident, in the period of modern industry, that these implements, even under their form of manual tools, are already machines. For instance, the pumps with which the Dutch, in 1836-7, emptied the Lake of Harlem, were constructed on the principle of ordinary pumps; the only difference being, that their pistons were driven by cyclopean steam-engines, instead of by men. The common and very imperfect bellows of the blacksmith is, in England, occasionally converted into a blowing-engine, by connecting its arm with a steam-engine. The steam-engine itself, such as it was at its invention, during the manufacturing period at the close of the 17th century, and such as it continued to be down to 1780, did not give rise to any industrial revolution. It was, on the contrary, the invention of machines that made a revolution in the form of steam-engines necessary. As soon as man, instead of working with an implement on the subject of his labour, becomes merely the motive power of an implement-machine, it is a mere accident that motive power takes the disguise of human muscle; and it may equally well take the form of wind, water or steam. Of course, this does not prevent such a change of form from producing great technical alterations in the mechanism that was originally constructed to be driven by man alone. Now-a-days, all machines that have their way to make, such as sewing-machines, bread-making machines, &c., are, unless from their very nature their use on a small scale is excluded, constructed to be driven both by human and by purely mechanical motive power. The machine, which is the starting-point of the industrial revolution, supersedes the workman, who handles a single tool, by a mechanism operating with a number of similar tools, and set in motion by a single motive power, whatever the form of that power may be. Here we have the machine, but only as an elementary factor of production by machinery. Increase in the size of the machine, and in the number of its working tools, calls for a more massive mechanism to drive it; and this mechanism requires, in order to overcome its resistance, a mightier moving power than that of man, apart from the fact that man is a very imperfect instrument for producing uniform continued motion. But assuming that he is acting simply as a motor, that a machine has taken the place of his tool, it is evident that he can be replaced by natural forces. Of all the great motors handed down from the manufacturing period, horse-power is the worst, partly because a horse has a head of his own, partly because he is costly, and the extent to which he is applicable in factories is very restricted. Nevertheless the horse was extensively used during the infancy of modern industry. This is proved, as well by the complaints of contemporary agriculturists, as by the term horse-power, which has survived to this day as an expression for mechanical force. Wind was too inconstant and uncontrollable, and besides, in England, the birthplace of modern industry, the use of water power preponderated even during the manufacturing period. In the 17th century attempts had already been made to turn two pairs of millstones with a single water-wheel. But the increased size of the gearing was too much for the water power, which had now become insufficient, and this was one of the circumstances that led to a more accurate investigation of the laws of friction. In the same way the irregularity caused by the motive power in mills that were put in motion by pushing and pulling a lever, led to the theory, and the application, of the fly-wheel, which afterwards plays so important a part in modern industry. In this way, during the manufacturing period, were developed the first scientific and technical elements of Modern Mechanical Industry. Arkwright s throstle spinning mill was from the very first turned by water. But for all that, the use of water, as the predominant motive power, was beset with difficulties. It could not be increased at will, it failed at certain seasons of the year, and, above all, it was essentially local. Not till the invention of Watt s second and so-called double-acting steam-engine, was a prime mover found, that begot its own force by the consumption of coal and water, whose power was entirely under man s control, that was mobile and a means of locomotion, that was urban and not, like the waterwheel, rural, that permitted production to be concentrated in towns instead of, like the water-wheels, being scattered up and down the country, that was of universal technical application, and, relatively speaking, little affected in its choice of residence by local circumstances. The greatness of Watt s genius showed itself in the specification of the patent that he took out in April, 1784. In that specification his steam-engine is described, not as an invention for a specific purpose, but as an agent universally applicable in Mechanical Industry. In it he points out applications, many of which, as for instance, the steam-hammer, were not introduced till half a century later. Nevertheless he doubted the use of steam-engines in navigation. His successors, Boulton and Watt, sent to the exhibition of 1851 steam-engines of colossal size for ocean steamers. As soon as tools had been converted from being manual implements of man into implements of a mechanical apparatus, of a machine, the motive mechanism also acquired an independent form, entirely emancipated from the restraints of human strength. Thereupon the individual machine, that we have hitherto been considering, sinks into a mere factor in production by machinery. One motive mechanism was now able to drive many machines at once. The motive mechanism grows with the number of the machines that are turned simultaneously, and the transmitting mechanism becomes a wide-spreading apparatus. We now proceed to distinguish the co-operation of a number of machines of one kind from a complex system of machinery. In the one case, the product is entirely made by a single machine, which performs all the various operations previously done by one handicraftsman with his tool; as, for instance, by a weaver with his loom; or by several handicraftsman successively, either separately or as members of a system of Manufacture. For example, in the manufacture of envelopes, one man folded the paper with the folder, another laid on the gum, a third turned the flap over, on which the device is impressed, a fourth embossed the device, and so on; and for each of these operations the envelope had to change hands. One single envelope machine now performs all these operations at once, and makes more than 3,000 envelopes in an hour. In the London exhibition of 1862, there was an American machine for making paper cornets. It cut the paper, pasted, folded, and finished 300 in a minute. Here, the whole process, which, when carried on as Manufacture, was split up into, and carried out by, a series of operations, is completed by a single machine, working a combination of various tools. Now, whether such a machine be merely a reproduction of a complicated manual implement, or a combination of various simple implements specialised by Manufacture, in either case, in the factory, i.e., in the workshop in which machinery alone is used, we meet again with simple co-operation; and, leaving the workman out of consideration for the moment, this co-operation presents itself to us, in the first instance, as the conglomeration in one place of similar and simultaneously acting machines. Thus, a weaving factory is constituted of a number of power-looms, working side by side, and a sewing factory of a number of sewing-machines all in the same building. But there is here a technical oneness in the whole system, owing to all the machines receiving their impulse simultaneously, and in an equal degree, from the pulsations of the common prime mover, by the intermediary of the transmitting mechanism; and this mechanism, to a certain extent, is also common to them all, since only particular ramifications of it branch off to each machine. Just as a number of tools, then, form the organs of a machine, so a number of machines of one kind constitute the organs of the motive mechanism. A real machinery system, however, does not take the place of these independent machines, until the subject of labour goes through a connected series of detail processes, that are carried out by a chain of machines of various kinds, the one supplementing the other. Here we have again the co-operation by division of labour that characterises Manufacture; only now, it is a combination of detail machines. The special tools of the various detail workmen, such as those of the beaters, cambers, spinners, &c., in the woollen manufacture, are now transformed into the tools of specialised machines, each machine constituting a special organ, with a special function, in the system. In those branches of industry in which the machinery system is first introduced, Manufacture itself furnishes, in a general way, the natural basis for the division, and consequent organisation, of the process of production. Nevertheless an essential difference at once manifests itself. In Manufacture it is the workmen who, with their manual implements, must, either singly or in groups, carry on each particular detail process. If, on the one hand, the workman becomes adapted to the process, on the other, the process was previously made suitable to the workman. This subjective principle of the division of labour no longer exists in production by machinery. Here, the process as a whole is examined objectively, in itself, that is to say, without regard to the question of its execution by human hands, it is analysed into its constituent phases; and the problem, how to execute each detail process, and bind them all into a whole, is solved by the aid of machines, chemistry, &c. But, of course, in this case also, theory must be perfected by accumulated experience on a large scale. Each detail machine supplies raw material to the machine next in order; and since they are all working at the same time, the product is always going through the various stages of its fabrication, and is also constantly in a state of transition, from one phase to another. Just as in Manufacture, the direct co-operation of the detail labourers establishes a numerical proportion between the special groups, so in an organised system of machinery, where one detail machine is constantly kept employed by another, a fixed relation is established between their numbers, their size, and their speed. The collective machine, now an organised system of various kinds of single machines, and of groups of single machines, becomes more and more perfect, the more the process as a whole becomes a continuous one, i.e., the less the raw material is interrupted in its passage from its first phase to its last; in other words, the more its passage from one phase to another is effected, not by the hand of man, but by the machinery itself. In Manufacture the isolation of each detail process is a condition imposed by the nature of division of labour, but in the fully developed factory the continuity of those processes is, on the contrary, imperative. A system of machinery, whether it reposes on the mere co-operation of similar machines, as in weaving, or on a combination of different machines, as in spinning, constitutes in itself a huge automaton, whenever it is driven by a self-acting prime mover. But although the factory as a whole be driven by its steam-engine, yet either some of the individual machines may require the aid of the workman for some of their movements (such aid was necessary for the running in of the mule carriage, before the invention of the self-acting mule, and is still necessary in fine-spinning mills); or, to enable a machine to do its work, certain parts of it may require to be handled by the workman like a manual tool; this was the case in machine-makers workshops, before the conversion of the slide rest into a self-actor. As soon as a machine executes, without man s help, all the movements requisite to elaborate the raw material, needing only attendance from him, we have an automatic system of machinery, and one that is susceptible of constant improvement in its details. Such improvements as the apparatus that stops a drawing frame, whenever a sliver breaks, and the self-acting stop, that stops the power-loom so soon as the shuttle bobbin is emptied of weft, are quite modern inventions. As an example, both of continuity of production, and of the carrying out of the automatic principle, we may take a modern paper mill. In the paper industry generally, we may advantageously study in detail not only the distinctions between modes of production based on different means of production, but also the connexion of the social conditions of production with those modes: for the old German paper-making furnishes us with a sample of handicraft production; that of Holland in the 17th and of France in the 18th century with a sample of manufacturing in the strict sense; and that of modern England with a sample of automatic fabrication of this article. Besides these, there still exist, in India and China, two distinct antique Asiatic forms of the same industry. An organised system of machines, to which motion is communicated by the transmitting mechanism from a central automaton, is the most developed form of production by machinery. Here we have, in the place of the isolated machine, a mechanical monster whose body fills whole factories, and whose demon power, at first veiled under the slow and measured motions of his giant limbs, at length breaks out into the fast and furious whirl of his countless working organs. There were mules and steam-engines before there were any labourers, whose exclusive occupation it was to make mules and steam-engines; just as men wore clothes before there were such people as tailors. The inventions of Vaucanson, Arkwright, Watt, and others, were, however, practicable, only because those inventors found, ready to hand, a considerable number of skilled mechanical workmen, placed at their disposal by the manufacturing period. Some of these workmen were independent handicraftsman of various trades, others were grouped together in manufactures, in which, as before-mentioned, division of labour was strictly carried out. As inventions increased in number, and the demand for the newly discovered machines grew larger, the machine-making industry split up, more and more, into numerous independent branches, and division of labour in these manufactures was more and more developed. Here, then, we see in Manufacture the immediate technical foundation of modern industry. Manufacture produced the machinery, by means of which modern industry abolished the handicraft and manufacturing systems in those spheres of production that it first seized upon. The factory system was therefore raised, in the natural course of things, on an inadequate foundation. When the system attained to a certain degree of development, it had to root up this ready-made foundation, which in the meantime had been elaborated on the old lines, and to build up for itself a basis that should correspond to its methods of production. Just as the individual machine retains a dwarfish character, so long as it is worked by the power of man alone, and just as no system of machinery could be properly developed before the steam-engine took the place of the earlier motive powers, animals, wind, and even water; so, too, modern industry was crippled in its complete development, so long as its characteristic instrument of production, the machine, owed its existence to personal strength and personal skill, and depended on the muscular development, the keenness of sight, and the cunning of hand, with which the detail workmen in manufactures, and the manual labourers in handicrafts, wielded their dwarfish implements. Thus, apart from the dearness of the machines made in this way, a circumstance that is ever present to the mind of the capitalist, the expansion of industries carried on by means of machinery, and the invasion by machinery of fresh branches of production, were dependent on the growth of a class of workmen, who, owing to the almost artistic nature of their employment, could increase their numbers only gradually, and not by leaps and bounds. But besides this, at a certain stage of its development, modern industry became technologically incompatible with the basis furnished for it by handicraft and Manufacture. The increasing size of the prime movers, of the transmitting mechanism, and of the machines proper, the greater complication, multiformity and regularity of the details of these machines, as they more and more departed from the model of those originally made by manual labour, and acquired a form, untrammelled except by the conditions under which they worked, the perfecting of the automatic system, and the use, every day more unavoidable, of a more refractory material, such as iron instead of wood the solution of all these problems, which sprang up by the force of circumstances, everywhere met with a stumbling-block in the personal restrictions, which even the collective labourer of Manufacture could not break through, except to a limited extent. Such machines as the modern hydraulic press, the modern power-loom, and the modern carding engine, could never have been furnished by Manufacture. A radical change in the mode of production in one sphere of industry involves a similar change in other spheres. This happens at first in such branches of industry as are connected together by being separate phases of a process, and yet are isolated by the social division of labour, in such a way, that each of them produces an independent commodity. Thus spinning by machinery made weaving by machinery a necessity, and both together made the mechanical and chemical revolution that took place in bleaching, printing, and dyeing, imperative. So too, on the other hand, the revolution in cotton-spinning called forth the invention of the gin, for separating the seeds from the cotton fibre; it was only by means of this invention, that the production of cotton became possible on the enormous scale at present required. But more especially, the revolution in the modes of production of industry and agriculture made necessary a revolution in the general conditions of the social process of production, i.e., in the means of communication and of transport. In a society whose pivot, to use an expression of Fourier, was agriculture on a small scale, with its subsidiary domestic industries, and the urban handicrafts, the means of communication and transport were so utterly inadequate to the productive requirements of the manufacturing period, with its extended division of social labour, its concentration of the instruments of labour, and of the workmen, and its colonial markets, that they became in fact revolutionised. In the same way the means of communication and transport handed down from the manufacturing period soon became unbearable trammels on modern industry, with its feverish haste of production, its enormous extent, its constant flinging of capital and labour from one sphere of production into another, and its newly-created connexions with the markets of the whole world. Hence, apart from the radical changes introduced in the construction of sailing vessels, the means of communication and transport became gradually adapted to the modes of production of mechanical industry, by the creation of a system of river steamers, railways, ocean steamers, and telegraphs. But the huge masses of iron that had now to be forged, to be welded, to be cut, to be bored, and to be shaped, demanded, on their part, cyclopean machines, for the construction of which the methods of the manufacturing period were utterly inadequate. Modern industry had therefore itself to take in hand the machine, its characteristic instrument of production, and to construct machines by machines. It was not till it did this, that it built up for itself a fitting technical foundation, and stood on its own feet. Machinery, simultaneously with the increasing use of it, in the first decades of this century, appropriated, by degrees, the fabrication of machines proper. But it was only during the decade preceding 1866, that the construction of railways and ocean steamers on a stupendous scale called into existence the cyclopean machines now employed in the construction of prime movers. The most essential condition to the production of machines by machines was a prime mover capable of exerting any amount of force, and yet under perfect control. Such a condition was already supplied by the steam-engine. But at the same time it was necessary to produce the geometrically accurate straight lines, planes, circles, cylinders, cones, and spheres, required in the detail parts of the machines. This problem Henry Maudsley solved in the first decade of this century by the invention of the slide rest, a tool that was soon made automatic, and in a modified form was applied to other constructive machines besides the lathe, for which it was originally intended. This mechanical appliance replaces, not some particular tool, but the hand itself, which produces a given form by holding and guiding the cutting tool along the iron or other material operated upon. Thus it became possible to produce the forms of the individual parts of machinery If we now fix our attention on that portion of the machinery employed in the construction of machines, which constitutes the operating tool, we find the manual implements re-appearing, but on a cyclopean scale. The operating part of the boring machine is an immense drill driven by a steam-engine; without this machine, on the other hand, the cylinders of large steam-engines and of hydraulic presses could not be made. The mechanical lathe is only a cyclopean reproduction of the ordinary foot-lathe; the planing machine, an iron carpenter, that works on iron with the same tools that the human carpenter employs on wood; the instrument that, on the London wharves, cuts the veneers, is a gigantic razor; the tool of the shearing machine, which shears iron as easily as a tailor s scissors cut cloth, is a monster pair of scissors; and the steam-hammer works with an ordinary hammer head, but of such a weight that not Thor himself could wield it. These steam-hammers are an invention of Nasmyth, and there is one that weighs over 6 tons and strikes with a vertical fall of 7 feet, on an anvil weighing 36 tons. It is mere child s-play for it to crush a block of granite into powder, yet it is no less capable of driving, with a succession of light taps, a nail into a piece of soft wood. The implements of labour, in the form of machinery, necessitate the substitution of natural forces for human force, and the conscious application of science, instead of rule of thumb. In Manufacture, the organisation of the social labour-process is purely subjective; it is a combination of detail labourers; in its machinery system, modern industry has a productive organism that is purely objective, in which the labourer becomes a mere appendage to an already existing material condition of production. In simple co-operation, and even in that founded on division of labour, the suppression of the isolated, by the collective, workman still appears to be more or less accidental. Machinery, with a few exceptions to be mentioned later, operates only by means of associated labour, or labour in common. Hence the co-operative character of the labour-process is, in the latter case, a technical necessity dictated by the instrument of labour itself. We saw that the productive forces resulting from co-operation and division of labour cost capital nothing. They are natural forces of social labour. So also physical forces, like steam, water, &c., when appropriated to productive processes, cost nothing. But just as a man requires lungs to breathe with, so he requires something that is work of man s hand, in order to consume physical forces productively. A water-wheel is necessary to exploit the force of water, and a steam-engine to exploit the elasticity of steam. Once discovered, the law of the deviation of the magnetic needle in the field of an electric current, or the law of the magnetisation of iron, around which an electric current circulates, cost never a penny. But the exploitation of these laws for the purposes of telegraphy, &c., necessitates a costly and extensive apparatus. The tool, as we have seen, is not exterminated by the machine. From being a dwarf implement of the human organism, it expands and multiplies into the implement of a mechanism created by man. Capital now sets the labourer to work, not with a manual tool, but with a machine which itself handles the tools. Although, therefore, it is clear at the first glance that, by incorporating both stupendous physical forces, and the natural sciences, with the process of production, modern industry raises the productiveness of labour to an extraordinary degree, it is by no means equally clear, that this increased productive force is not, on the other hand, purchased by an increased expenditure of labour. Machinery, like every other component of constant capital, creates no new value, but yields up its own value to the product that it serves to beget. In so far as the machine has value, and, in consequence, parts with value to the product, it forms an element in the value of that product. Instead of being cheapened, the product is made dearer in proportion to the value of the machine. And it is clear as noon-day, that machines and systems of machinery, the characteristic instruments of labour of Modern Industry, are incomparably more loaded with value than the implements used in handicrafts and manufactures. In the first place, it must be observed that the machinery, while always entering as a whole into the labour-process, enters into the value-begetting process only by bits. It never adds more value than it loses, on an average, by wear and tear. Hence there is a great difference between the value of a machine, and the value transferred in a given time by that machine to the product. The longer the life of the machine in the labour-process, the greater is that difference. It is true, no doubt, as we have already seen, that every instrument of labour enters as a whole into the labour-process, and only piece-meal, proportionally to its average daily loss by wear and tear, into the value-begetting process. But this difference between the instrument as a whole and its daily wear and tear, is much greater in a machine than in a tool, because the machine, being made from more durable material, has a longer life; because its employment, being regulated by strictly scientific laws, allows of greater economy in the wear and tear of its parts, and in the materials it consumes; and lastly, because its field of production is incomparably larger than that of a tool. After making allowance, both in the case of the machine and of the tool, for their average daily cost, that is for the value they transmit to the product by their average daily wear and tear, and for their consumption of auxiliary substance, such as oil, coal, and so on, they each do their work gratuitously, just like the forces furnished by Nature without the help of man. The greater the productive power of the machinery compared with that of the tool, the greater is the extent of its gratuitous service compared with that of the tool. In modern industry man succeeded for the first time in making the product of his past labour work on a large scale gratuitously, like the forces of Nature. In treating of Co-operation and Manufacture, it was shown that certain general factors of production, such as buildings, are, in comparison with the scattered means of production of the isolated workman, economised by being consumed in common, and that they therefore make the product cheaper. In a system of machinery, not only is the framework of the machine consumed in common by its numerous operating implements, but the prime mover, together with a part of the transmitting mechanism, is consumed in common by the numerous operative machines. Given the difference between the value of the machinery, and the value transferred by it in a day to the product, the extent to which this latter value makes the product dearer, depends in the first instance, upon the size of the product; so to say, upon its area. Mr. Baynes, of Blackburn, in a lecture published in 1858, estimates that In the first case, it is the day s produce of 450 mule spindles, in the second, of 200 throstle spindles, in the third, of 15 power-looms, over which the daily cost of one horse-power, and the wear and tear of the machinery set in motion by that power, are spread; so that only a very minute value is transferred by such wear and tear to a pound of yarn or a yard of cloth. The same is the case with the steam-hammer mentioned above. Since its daily wear and tear, its coal-consumption, &c., are spread over the stupendous masses of iron hammered by it in a day, only a small value is added to a hundred weight of iron; but that value would be very great, if the cyclopean instrument were employed in driving in nails. Given a machine s capacity for work, that is, the number of its operating tools, or, where it is a question of force, their mass, the amount of its product will depend on the velocity of its working parts, on the speed, for instance, of the spindles, or on the number of blows given by the hammer in a minute. Many of these colossal hammers strike seventy times in a minute, and Ryder s patent machine for forging spindles with small hammers gives as many as 700 strokes per minute. Given the rate at which machinery transfers its value to the product, the amount of value so transferred depends on the total value of the machinery. The less labour it contains, the less value it imparts to the product. The less value it gives up, so much the more productive it is, and so much the more its services approximate to those of natural forces. But the production of machinery by machinery lessens its value relatively to its extension and efficacy. An analysis and comparison of the prices of commodities produced by handicrafts or manufactures, and of the prices of the same commodities produced by machinery, shows generally, that, in the product of machinery, the value due to the instruments of labour increases relatively, but decreases absolutely. In other words, its absolute amount decreases, but its amount, relatively to the total value of the product, of a pound of yarn, for instance, increases. It is evident that whenever it costs as much labour to produce a machine as is saved by the employment of that machine, there is nothing but a transposition of labour; consequently the total labour required to produce a commodity is not lessened or the productiveness of labour is not increased. It is clear, however, that the difference between the labour a machine costs, and the labour it saves, in other words, that the degree of its productiveness does not depend on the difference between its own value and the value of the implement it replaces. As long as the labour spent on a machine, and consequently the portion of its value added to the product, remains smaller than the value added by the workman to the product with his tool, there is always a difference of labour saved in favour of the machine. The productiveness of a machine is therefore measured by the human labour-power it replaces. According to Mr. Baynes, 2 operatives are required for the 450 mule spindles, inclusive of preparation machinery, that are driven by one-horse power; each self-acting mule spindle, working ten hours, produces 13 ounces of yarn (average number of thickness); consequently 2 operatives spin weekly 365 5/8 lbs. of yarn. Hence, leaving waste on one side, 366 lbs. of cotton absorb, during their conversion into yarn, only 150 hours labour, or fifteen days labour of ten hours each. But with a spinning-wheel, supposing the hand-spinner to produce thirteen ounces of yarn in sixty hours, the same weight of cotton would absorb 2,700 days labour of ten hours each, or 27,000 hours labour. Where blockprinting, the old method of printing calico by hand, has been superseded by machine printing, a single machine prints, with the aid of one man or boy, as much calico of four colours in one hour, as it formerly took 200 men to do. Before Eli Whitney invented the cotton gin in 1793, the separation of the seed from a pound of cotton cost an average day s labour. By means of his invention one negress was enabled to clean 100 lbs. daily; and since then, the efficacy of the gin has been considerably increased. A pound of cotton wool, previously costing 50 cents to produce, included after that invention more unpaid labour, and was consequently sold with greater profit, at 10 cents. In India they employ for separating the wool from the seed, an instrument, half machine, half tool, called a churka; with this one man and a woman can clean 28 lbs. daily. With the churka invented some years ago by Dr. Forbes, one man and a boy produce 250 lbs. daily. If oxen, steam, or water, be used for driving it, only a few boys and girls as feeders are required. Sixteen of these machines driven by oxen do as much work in a day as formerly 750 people did on an average. As already stated, a steam-plough does as much work in one hour at a cost of three-pence, as 66 men at a cost of 15 shillings. I return to this example in order to clear up an erroneous notion. The 15 shillings are by no means the expression in money of all the labour expended in one hour by the 66 men. If the ratio of surplus-labour to necessary labour were 100%, these 66 men would produce in one hour a value of 30 shillings, although their wages, 15 shillings, represent only their labour for half an hour. Suppose, then, a machine cost as much as the wages for a year of the 150 men it displaces, say 3,000; this 3,000 is by no means the expression in money of the labour added to the object produced by these 150 men before the introduction of the machine, but only of that portion of their year s labour which was expended for themselves and represented by their wages. On the other hand, the 3,000, the money-value of the machine, expresses all the labour expended on its production, no matter in what proportion this labour constitutes wages for the workman, and surplus-value for the capitalist. Therefore, though a machine cost as much as the labour-power displaced by it costs, yet the labour materialised in it is even then much less than the living labour it replaces. The use of machinery for the exclusive purpose of cheapening the product, is limited in this way, that less labour must be expended in producing the machinery than is displaced by the employment of that machinery. For the capitalist, however, this use is still more limited. Instead of paying for the labour, he only pays the value of the labour-power employed; therefore, the limit to his using a machine is fixed by the difference between the value of the machine and the value of the labour-power replaced by it. Since the division of the day s work into necessary and surplus-labour differs in different countries, and even in the same country at different periods, or in different branches of industry; and further, since the actual wage of the labourer at one time sinks below the value of his labour-power, at another rises above it, it is possible for the difference between the price of the machinery and the price of the labour-power replaced by that machinery to vary very much, although the difference between the quantity of labour requisite to produce the machine and the total quantity replaced by it, remain constant. But it is the former difference alone that determines the cost, to the capitalist, of producing a commodity, and, through the pressure of competition, influences his action. Hence the invention now-a-days of machines in England that are employed only in North America; just as in the sixteenth and seventeenth centuries, machines were invented in Germany to be used only in Holland, and just as many a French invention of the eighteenth century was exploited in England alone. In the older countries, machinery, when employed in some branches of industry, creates such a redundancy of labour in other branches that in these latter the fall of wages below the value of labour-power impedes the use of machinery, and, from the standpoint of the capitalist, whose profit comes, not from a diminution of the labour employed, but of the labour paid for, renders that use superfluous and often impossible. In some branches of the woollen manufacture in England the employment of children has during recent years been considerably diminished, and in some cases has been entirely abolished. Why? Because the Factory Acts made two sets of children necessary, one working six hours, the other four, or each working five hours. But the parents refused to sell the half-timers cheaper than the full-timers. Hence the substitution of machinery for the half-timers. Before the labour of women and of children under 10 years of age was forbidden in mines, capitalists considered the employment of naked women and girls, often in company with men, so far sanctioned by their moral code, and especially by their ledgers, that it was only after the passing of the Act that they had recourse to machinery. The Yankees have invented a stone-breaking machine. The English do not make use of it, because the wretch who does this work gets paid for such a small portion of his labour, that machinery would increase the cost of production to the capitalist. In England women are still occasionally used instead of horses for hauling canal boats, because the labour required to produce horses and machines is an accurately known quantity, while that required to maintain the women of the surplus-population is below all calculation. Hence nowhere do we find a more shameful squandering of human labour-power for the most despicable purposes than in England, the land of machinery. The starting-point of modern industry is, as we have shown, the revolution in the instruments of labour, and this revolution attains its most highly developed form in the organised system of machinery in a factory. Before we inquire how human material is incorporated with this objective organism, let us consider some general effects of this revolution on the labourer himself. In so far as machinery dispenses with muscular power, it becomes a means of employing labourers of slight muscular strength, and those whose bodily development is incomplete, but whose limbs are all the more supple. The labour of women and children was, therefore, the first thing sought for by capitalists who used machinery. That mighty substitute for labour and labourers was forthwith changed into a means for increasing the number of wage-labourers by enrolling, under the direct sway of capital, every member of the workman s family, without distinction of age or sex. Compulsory work for the capitalist usurped the place, not only of the children s play, but also of free labour at home within moderate limits for the support of the family. The value of labour-power was determined, not only by the labour-time necessary to maintain the individual adult labourer, but also by that necessary to maintain his family. Machinery, by throwing every member of that family on to the labour-market, spreads the value of the man s labour-power over his whole family. It thus depreciates his labour-power. To purchase the labour-power of a family of four workers may, perhaps, cost more than it formerly did to purchase the labour-power of the head of the family, but, in return, four days labour takes the place of one, and their price falls in proportion to the excess of the surplus-labour of four over the surplus-labour of one. In order that the family may live, four people must now, not only labour, but expend surplus-labour for the capitalist. Thus we see, that machinery, while augmenting the human material that forms the principal object of capital s exploiting power, at the same time raises the degree of exploitation. Machinery also revolutionises out and out the contract between the labourer and the capitalist, which formally fixes their mutual relations. Taking the exchange of commodities as our basis, our first assumption was that capitalist and labourer met as free persons, as independent owners of commodities; the one possessing money and means of production, the other labour-power. But now the capitalist buys children and young persons under age. Previously, the workman sold his own labour-power, which he disposed of nominally as a free agent. Now he sells wife and child. He has become a slave-dealer. The demand for children s labour often resembles in form the inquiries for negro slaves, such as were formerly to be read among the advertisements in American journals. The phrase what can pass for 13 years, has reference to the fact, that by the Factory Act, children under 13 years may work only 6 hours. A surgeon officially appointed must certify their age. The manufacturer, therefore, asks for children who look as if they were already 13 years old. The decrease, often by leaps and bounds in the number of children under 13 years employed in factories, a decrease that is shown in an astonishing manner by the English statistics of the last 20 years, was for the most part, according to the evidence of the factory inspectors themselves, the work of the certifying surgeons, who overstated the age of the children, agreeably to the capitalist s greed for exploitation, and the sordid trafficking needs of the parents. In the notorious district of Bethnal Green, a public market is held every Monday and Tuesday morning, where children of both sexes from 9 years of age upwards, hire themselves out to the silk manufacturers. "The usual terms are 1s. 8d. a week (this belongs to the parents) and 2d. for myself and tea. The contract is binding only for the week. The scene and language while this market is going on are quite disgraceful. It has also occurred in England, that women have taken children from the workhouse and let any one have them out for 2s. 6d. a week. In spite of legislation, the number of boys sold in Great Britain by their parents to act as live chimney-sweeping machines (although there exist plenty of machines to replace them) exceeds 2,000. The revolution effected by machinery in the juridical relations between the buyer and the seller of labour-power, causing the transaction as a whole to lose the appearance of a contract between free persons, afforded the English Parliament an excuse, founded on juridical principles, for the interference of the state with factories. Whenever the law limits the labour of children to 6 hours in industries not before interfered with, the complaints of the manufacturers are always renewed. They allege that numbers of the parents withdraw their children from the industry brought under the Act, in order to sell them where freedom of labour still rules, i.e., where children under 13 years are compelled to work like grown-up people, and therefore can be got rid of at a higher price. But since capital is by nature a leveller, since it exacts in every sphere of production equality in the conditions of the exploitation of labour, the limitation by law of children s labour, in one branch of industry, becomes the cause of its limitation in others. We have already alluded to the physical deterioration as well of the children and young-persons as of the women, whom machinery, first directly in the factories that shoot up on its basis, and then indirectly in all the remaining branches of industry, subjects to the exploitation of capital. In this place, therefore, we dwell only on one point, the enormous mortality, during the first few years of their life, of the children of the operatives. In sixteen of the registration districts into which England is divided, there are, for every 100,000 children alive under the age of one year, only 9,000 deaths in a year on an average (in one district only 7,047); in 24 districts the deaths are over 10,000, but under 11,000; in 39 districts, over 11,000, but under 12,000; in 48 districts over 12,000, but under 13,000; in 22 districts over 20,000; in 25 districts over 21,000; in 17 over 22,000; in 11 over 23,000; in Hoo, Wolverhampton, Ashton-under-Lyne, and Preston, over 24,000; in Nottingham, Stockport, and Bradford, over 25,000; in Wisbeach, 16,000; and in Manchester, 26,125. As was shown by an official medical inquiry in the year 1861, the high death-rates are, apart from local causes, principally due to the employment of the mothers away from their homes, and to the neglect and maltreatment, consequent on her absence, such as, amongst others, insufficient nourishment, unsuitable food, and dosing with opiates; besides this, there arises an unnatural estrangement between mother and child, and as a consequence intentional starving and poisoning of the children. In those agricultural districts, where a minimum in the employment of women exists, the death-rate is on the other hand very low. The Inquiry Commission of 1861 led, however, to the unexpected result, that in some purely agricultural districts bordering on the North Sea, the death-rate of children under one year old almost equalled that of the worst factory districts. Dr. Julian Hunter was therefore commissioned to investigate this phenomenon on the spot. His report is incorporated with the Sixth Report on Public Health. Up to that time it was supposed, that the children were decimated by malaria, and other diseases peculiar to low-lying and marshy districts. But the inquiry showed the very opposite, namely, that the same cause which drove away malaria, the conversion of the land, from a morass in winter and a scanty pasture in summer, into fruitful corn land, created the exceptional death-rate of the infants. The 70 medical men, whom Dr. Hunter examined in that district, were wonderfully in accord on this point. In fact, the revolution in the mode of cultivation had led to the introduction of the industrial system. Every phenomenon of the factory districts is here reproduced, including, but to a greater extent, ill-disguised infanticide, and dosing children with opiates. Happy indeed, exclaims Mr. Baker, the factory inspector, in his official report, happy indeed will it be for the manufacturing districts of England, when every married woman having a family is prohibited from working in any textile works at all. The moral degradation caused by the capitalistic exploitation of women and children has been so exhaustively depicted by F. Engels in his Lage der Arbeitenden Klasse Englands, and other writers, that I need only mention the subject in this place. But the intellectual desolation artificially produced by converting immature human beings into mere machines for the fabrication of surplus-value, a state of mind clearly distinguishable from that natural ignorance which keeps the mind fallow without destroying its capacity for development, its natural fertility, this desolation finally compelled even the English Parliament to make elementary education a compulsory condition to the productive employment of children under 14 years, in every industry subject to the Factory Acts. The spirit of capitalist production stands out clearly in the ludicrous wording of the so-called education clauses in the Factory Acts, in the absence of an administrative machinery, an absence that again makes the compulsion illusory, in the opposition of the manufacturers themselves to these education clauses, and in the tricks and dodges they put in practice for evading them. Previous to the passing of the amended Factory Act, 1844, it happened, not unfrequently, that the certificates of attendance at school were signed by the schoolmaster or schoolmistress with a cross, as they themselves were unable to write. The inspectors, when the Bill of 1844 was in preparation, did not fail to represent the disgraceful state of the places called schools, certificates from which they were obliged to admit as a compliance with the laws, but they were successful only in obtaining thus much, that since the passing of the Act of 1845, Sir John Kincaid, factory inspector for Scotland, relates experiences of the same kind. In Scotland the manufacturers try all they can to do without the children that are obliged to attend school. Horribly grotesque does this appear in print works, which are regulated by a special Act. By that Act, By the excessive addition of women and children to the ranks of the workers, machinery at last breaks down the resistance which the male operatives in the manufacturing period continued to oppose to the despotism of capital. If machinery be the most powerful means for increasing the productiveness of labour i.e., for shortening the working-time required in the production of a commodity, it becomes in the hands of capital the most powerful means, in those industries first invaded by it, for lengthening the working-day beyond all bounds set by human nature. It creates, on the one hand, new conditions by which capital is enabled to give free scope to this its constant tendency, and on the other hand, new motives with which to whet capital s appetite for the labour of others. In the first place, in the form of machinery, the implements of labour become automatic, things moving and working independent of the workman. They are thenceforth an industrial perpetuum mobile, that would go on producing forever, did it not meet with certain natural obstructions in the weak bodies and the strong wills of its human attendants. The automaton, as capital, and because it is capital, is endowed, in the person of the capitalist, with intelligence and will; it is therefore animated by the longing to reduce to a minimum the resistance offered by that repellent yet elastic natural barrier, man. This resistance is moreover lessened by the apparent lightness of machine work, and by the more pliant and docile character of the women and children employed on it. The productiveness of machinery is, as we saw, inversely proportional to the value transferred by it to the product. The longer the life of the machine, the greater is the mass of the products over which the value transmitted by the machine is spread, and the less is the portion of that value added to each single commodity. The active lifetime of a machine is, however, clearly dependent on the length of the working-day, or on the duration of the daily labour-process multiplied by the number of days for which the process is carried on. The wear and tear of a machine is not exactly proportional to its working-time. And even if it were so, a machine working 16 hours daily for 7 years, covers as long a working period as, and transmits to the total product no more value than, the same machine would if it worked only 8 hours daily for 15 years. But in the first case the value of the machine would be reproduced twice as quickly as in the latter, and the capitalist would, by this use of the machine, absorb in 7 years as much surplus-value as in the second case he would in 15. The material wear and tear of a machine is of two kinds. The one arises from use, as coins wear away by circulating, the other from non-use, as a sword rusts when left in its scabbard. The latter kind is due to the elements. The former is more or less directly proportional, the latter to a certain extent inversely proportional, to the use of the machine. But in addition to the material wear and tear, a machine also undergoes, what we may call a moral depreciation. It loses exchange-value, either by machines of the same sort being produced cheaper than it, or by better machines entering into competition with it. In both cases, be the machine ever so young and full of life, its value is no longer determined by the labour actually materialised in it, but by the labour-time requisite to reproduce either it or the better machine. It has, therefore, lost value more or less. The shorter the period taken to reproduce its total value, the less is the danger of moral depreciation; and the longer the working-day, the shorter is that period. When machinery is first introduced into an industry, new methods of reproducing it more cheaply follow blow upon blow, and so do improvements, that not only affect individual parts and details of the machine, but its entire build. It is, therefore, in the early days of the life of machinery that this special incentive to the prolongation of the working-day makes itself felt most acutely. Given the length of the working-day, all other circumstances remaining the same, the exploitation of double the number of workmen demands, not only a doubling of that part of constant capital which is invested in machinery and buildings, but also of that part which is laid out in raw material and auxiliary substances. The lengthening of the working-day, on the other hand, allows of production on an extended scale without any alteration in the amount of capital laid out on machinery and buildings. Not only is there, therefore, an increase of surplus-value, but the outlay necessary to obtain it diminishes. It is true that this takes place, more or less, with every lengthening of the working-day; but in the case under consideration, the change is more marked, because the capital converted into the instruments of labour preponderates to a greater degree. The development of the factory system fixes a constantly increasing portion of the capital in a form, in which, on the one hand, its value is capable of continual self-expansion, and in which, on the other hand, it loses both use-value and exchange-value whenever it loses contact with living labour. When a labourer, said Mr. Ashworth, a cotton magnate, to Professor Nassau W. Senior, lays down his spade, he renders useless, for that period, a capital worth eighteen-pence. When one of our people leaves the mill, he renders useless a capital that has cost 100,000. Only fancy! making useless for a single moment, a capital that has cost 100,000! It is, in truth, monstrous, that a single one of our people should ever leave the factory! The increased use of machinery, as Senior after the instruction he received from Ashworth clearly perceives, makes a constantly increasing lengthening of the working-day desirable. Machinery produces relative surplus-value; not only by directly depreciating the value of labour-power, and by indirectly cheapening the same through cheapening the commodities that enter into its reproduction, but also, when it is first introduced sporadically into an industry, by converting the labour employed by the owner of that machinery, into labour of a higher degree and greater efficacy, by raising the social value of the article produced above its individual value, and thus enabling the capitalist to replace the value of a day s labour-power by a smaller portion of the value of a day s product. During this transition period, when the use of machinery is a sort of monopoly, the profits are therefore exceptional, and the capitalist endeavours to exploit thoroughly the sunny time of this his first love, by prolonging the working-day as much as possible. The magnitude of the profit whets his appetite for more profit. As the use of machinery becomes more general in a particular industry, the social value of the product sinks down to its individual value, and the law that surplus-value does not arise from the labour-power that has been replaced by the machinery, but from the labour-power actually employed in working with the machinery, asserts itself. Surplus-value arises from variable capital alone, and we saw that the amount of surplus-value depends on two factors, viz., the rate of surplus-value and the number of the workmen simultaneously employed. Given the length of the working-day, the rate of surplus-value is determined by the relative duration of the necessary labour and of the surplus-labour in a day. The number of the labourers simultaneously employed depends, on its side, on the ratio of the variable to the constant capital. Now, however much the use of machinery may increase the surplus-labour at the expense of the necessary labour by heightening the productiveness of labour, it is clear that it attains this result, only by diminishing the number of workmen employed by a given amount of capital. It converts what was formerly variable capital, invested in labour-power, into machinery which, being constant capital, does not produce surplus-value. It is impossible, for instance, to squeeze as much surplus-value out of 2 as out of 24 labourers. If each of these 24 men gives only one hour of surplus-labour in 12, the 24 men give together 24 hours of surplus-labour, while 24 hours is the total labour of the two men. Hence, the application of machinery to the production of surplus-value implies a contradiction which is immanent in it, since of the two factors of the surplus-value created by a given amount of capital, one, the rate of surplus-value, cannot be increased, except by diminishing the other, the number of workmen. This contradiction comes to light, as soon as by the general employment of machinery in a given industry, the value of the machine-produced commodity regulates the value of all commodities of the same sort; and it is this contradiction, that in its turn, drives the capitalist, without his being conscious of the fact, to excessive lengthening of the working-day, in order that he may compensate the decrease in the relative number of labourers exploited, by an increase not only of the relative, but of the absolute surplus-labour. If, then, the capitalistic employment of machinery, on the one hand, supplies new and powerful motives to an excessive lengthening of the working-day, and radically changes, as well the methods of labour, as also the character of the social working organism, in such a manner as to break down all opposition to this tendency, on the other hand it produces, partly by opening out to the capitalist new strata of the working-class, previously inaccessible to him, partly by setting free the labourers it supplants, a surplus working population, which is compelled to submit to the dictation of capital. Hence that remarkable phenomenon in the history of modern industry, that machinery sweeps away every moral and natural restriction on the length of the working-day. Hence, too, the economic paradox, that the most powerful instrument for shortening labour-time, becomes the most unfailing means for placing every moment of the labourer s time and that of his family, at the disposal of the capitalist for the purpose of expanding the value of his capital. If, dreamed Aristotle, the greatest thinker of antiquity, if every tool, when summoned, or even of its own accord, could do the work that befits it, just as the creations of Daedalus moved of themselves, or the tripods of Hephaestos went of their own accord to their sacred work, if the weavers shuttles were to weave of themselves, then there would be no need either of apprentices for the master workers, or of slaves for the lords. And Antipatros, a Greek poet of the time of Cicero, hailed the invention of the water-wheel for grinding corn, an invention that is the elementary form of all machinery, as the giver of freedom to female slaves, and the bringer back of the golden age. Oh! those heathens! They understood, as the learned Bastiat, and before him the still wiser MacCulloch have discovered, nothing of Political Economy and Christianity. They did not, for example, comprehend that machinery is the surest means of lengthening the working-day. They perhaps excused the slavery of one on the ground that it was a means to the full development of another. But to preach slavery of the masses, in order that a few crude and half-educated parvenus, might become eminent spinners, extensive sausage-makers, and influential shoe-black dealers, to do this, they lacked the bump of Christianity. The immoderate lengthening of the working-day, produced by machinery in the hands of capital, leads to a reaction on the part of society, the very sources of whose life are menaced; and, thence, to a normal working-day whose length is fixed by law. Thenceforth a phenomenon that we have already met with, namely, the intensification of labour, develops into great importance. Our analysis of absolute surplus-value had reference primarily to the extension or duration of the labour, its intensity being assumed as given. We now proceed to consider the substitution of a more intensified labour for labour of more extensive duration, and the degree of the former. It is self-evident, that in proportion as the use of machinery spreads, and the experience of a special class of workmen habituated to machinery accumulates, the rapidity and intensity of labour increase as a natural consequence. Thus in England, during half a century, lengthening of the working-day went hand in hand with increasing intensity of factory labour. Nevertheless the reader will clearly see, that where we have labour, not carried on by fits and starts, but repeated day after day with unvarying uniformity, a point must inevitably be reached, where extension of the working-day and intensity of the labour mutually exclude one another, in such a way that lengthening of the working-day becomes compatible only with a lower degree of intensity, and a higher degree of intensity, only with a shortening of the working-day. So soon as the gradually surging revolt of the working-class compelled Parliament to shorten compulsorily the hours of labour, and to begin by imposing a normal working-day on factories proper, so soon consequently as an increased production of surplus-value by the prolongation of the working-day was once for all put a stop to, from that moment capital threw itself with all its might into the production of relative surplus-value, by hastening on the further improvement of machinery. At the same time a change took place in the nature of relative surplus-value. Generally speaking, the mode of producing relative surplus-value consists in raising the productive power of the workman, so as to enable him to produce more in a given time with the same expenditure of labour. Labour-time continues to transmit as before the same value to the total product, but this unchanged amount of exchange-value is spread over more use-value; hence the value of each single commodity sinks. Otherwise, however, so soon as the compulsory shortening of the hours of labour takes place. The immense impetus it gives the development of productive power, and to economy in the means of production, imposes on the workman increased expenditure of labour in a given time, heightened tension of labour-power, and closer filling up of the pores of the working-day, or condensation of labour to a degree that is attainable only within the limits of the shortened working-day. This condensation of a greater mass of labour into a given period thenceforward counts for what it really is, a greater quantity of labour. In addition to a measure of its extension, i.e., duration, labour now acquires a measure of its intensity or of the degree of its condensation or density. The denser hour of the ten hours working-day contains more labour, i.e., expended labour-power than the more porous hour of the twelve hours working-day. The product therefore of one of the former hours has as much or more value than has the product of 1 1/5 of the latter hours. Apart from the increased yield of relative surplus-value through the heightened productiveness of labour, the same mass of value is now produced for the capitalist say by 3 1/3 hours of surplus-labour, and 6 2/3 hours of necessary labour, as was previously produced by four hours of surplus-labour and eight hours of necessary labour. We now come to the question: How is the labour intensified? The first effect of shortening the working-day results from the self-evident law, that the efficiency of labour-power is in an inverse ratio to the duration of its expenditure. Hence, within certain limits what is lost by shortening the duration is gained by the increasing tension of labour-power. That the workman moreover really does expend more labour-power, is ensured by the mode in which the capitalist pays him. In those industries, such as potteries, where machinery plays little or no part, the introduction of the Factory Acts has strikingly shown that the mere shortening of the working-day increases to a wonderful degree the regularity, uniformity, order, continuity, and energy of the labour. It seemed, however, doubtful whether this effect was produced in the factory proper, where the dependence of the workman on the continuous and uniform motion of the machinery had already created the strictest discipline. Hence, when in 1844 the reduction of the working-day to less than twelve hours was being debated, the masters almost unanimously declared This assertion was contradicted by experiments. Mr. Robert Gardner reduced the hours of labour in his two large factories at Preston, on and after the 20th April, 1844, from twelve to eleven hours a day. The result of about a year s working was that the same amount of product for the same cost was received, and the workpeople as a whole earned in eleven hours as much wages as they did before in twelve. I pass over the experiments made in the spinning and carding rooms, because they were accompanied by an increase of 2% in the speed of the machines. But in the weaving department, where, moreover, many sorts of figured fancy articles were woven, there was not the slightest alteration in the conditions of the work. The result was: From 6th January to 20th April, 1844, with a twelve hours day, average weekly wages of each hand 10s. 1 d., from 20th April to 29th June, 1844, with day of eleven hours, average weekly wages 10s. 3 d. Here we have more produced in eleven hours than previously in twelve, and entirely in consequence of more steady application and economy of time by the workpeople. While they got the same wages and gained one hour of spare time, the capitalist got the same amount produced and saved the cost of coal, gas, and other such items, for one hour. Similar experiments, and with the like success, were carried out in the mills of Messrs. Horrocks and Jacson. The shortening of the hours of labour creates, to begin with, the subjective conditions for the condensation of labour, by enabling the workman to exert more strength in a given time. So soon as that shortening becomes compulsory, machinery becomes in the hands of capital the objective means, systematically employed for squeezing out more labour in a given time. This is effected in two ways: by increasing the speed of the machinery, and by giving the workman more machinery to tent. Improved construction of the machinery is necessary, partly because without it greater pressure cannot be put on the workman, and partly because the shortened hours of labour force the capitalist to exercise the strictest watch over the cost of production. The improvements in the steam-engine have increased the piston speed, and at the same time have made it possible, by means of a greater economy of power, to drive with the same or even a smaller consumption of coal more machinery with the same engine. The improvements in the transmitting mechanism have lessened friction, and, what so strikingly distinguishes modern from the older machinery, have reduced the diameter and weight of the shafting to a constantly decreasing minimum. Finally, the improvements in the operative machines have, while reducing their size, increased their speed and efficiency, as in the modern power-loom; or, while increasing the size of their framework, have also increased the extent and number of their working parts, as in spinning-mules, or have added to the speed of these working parts by imperceptible alterations of detail, such as those which ten years ago increased the speed of the spindles in self-acting mules by one-fifth. The reduction of the working-day to 12 hours dates in England from 1832. In 1836 a manufacturer stated: In the year 1844, Lord Ashley, now Lord Shaftesbury, made in the House of Commons the following statements, supported by documentary evidence: In the face of this remarkable intensity of labour which had already been reached in 1844 under the Twelve Hours Act, there appeared to be a justification for the assertion made at that time by the English manufacturers, that any further progress in that direction was impossible, and therefore that every further reduction of the hours of labour meant a lessened production. The apparent correctness of their reasons will be best shown by the following contemporary statement by Leonard Horner, the factory inspector, their ever watchful censor. We now come to the period that follows the introduction of the Ten Hours Act in 1847 into the English cotton, woollen, silk, and flax mills. James Nasmyth, the eminent civil engineer of Patricroft, near Manchester, explained in a letter to Leonard Horner, written in 1852, the nature of the improvements in the steam-engine that had been made between the years 1848 and 1852. After remarking that the horse-power of steam-engines, being always estimated in the official returns according to the power of similar engines in 1828, is only nominal, and can serve only as an index of their real power, he goes on to say: One fact is sufficient to show how greatly the wealth of the manufacturers increased along with the more intense exploitation of labour-power. From 1838 to 1850, the average proportional increase in English cotton and other factories was 32%, while from 1850 to 1856 it amounted to 86%. But however great the progress of English industry had been during the 8 years from 1848 to 1856 under the influence of a working-day of 10 hours, it way far surpassed during the next period of 6 years from 1856 to 1862. In silk factories, for instance, there were in 1856, spindles 1,093,799; in 1862, 1,388,544; in 1856, looms 9,260; in 1862, 10,709. But the number of operatives was, in 1856, 56,131; in 1862, 52,429. The increase in the spindles was therefore 26.9% and in the looms 15.6%, while the number of the operatives decreased 7%. In the year 1850 there were employed in worsted mills 875,830 spindles; in 1856, 1,324,549 (increase 51.2%), and in 1862, 1,289,172 (decrease 2.7%). But if we deduct the doubling spindles that figure in the numbers for 1856, but not in those for 1862, it will be found that after 1856 the number of spindles remained nearly stationary. On the other hand, after 1850, the speed of the spindles and looms was in many cases doubled. The number of power-looms in worsted mills was, in 1850, 32,617; in 1856, 38,956; in 1862, 43,048. The number of the operatives was, in 1850, 79,737; in 1856, 87,794; in 1862, 86,063; included in these, however, the children under 14 years of age were, in 1850, 9,956; in 1856, 11,228; in 1862, 13,178. In spite, therefore, of the greatly increased number of looms in 1862, compared with 1856, the total number of the workpeople employed decreased, and that of the children exploited increased. On the 27th April, 1863, Mr. Ferrand said in the House of Commons: Although, therefore, the Factory Inspectors unceasingly and with justice, commend the results of the Acts of 1844 and 1850, yet they admit that the shortening of the hours of labour has already called forth such an intensification of the labour as is injurious to the health of the workman and to his capacity for work. There cannot be the slightest doubt that the tendency that urges capital, so soon as a prolongation of the hours of labour is once for all forbidden, to compensate itself, by a systematic heightening of the intensity of labour, and to convert every improvement in machinery into a more perfect means of exhausting the workman, must soon lead to a state of things in which a reduction of the hours of labour will again be inevitable. On the other hand, the rapid advance of English industry between 1848 and the present time, under the influence of a day of 10 hours, surpasses the advance made between 1833 and 1847, when the day was 12 hours long, by far more than the latter surpasses the advance made during the half century after the first introduction of the factory system, when the working-day was without limits. At the commencement of this chapter we considered that which we may call the body of the factory, i.e., machinery organised into a system. We there saw how machinery, by annexing the labour of women and children, augments the number of human beings who form the material for capitalistic exploitation, how it confiscates the whole of the workman s disposable time, by immoderate extension of the hours of labour, and how finally its progress, which allows of enormous increase of production in shorter and shorter periods, serves as a means of systematically getting more work done in a shorter time, or of exploiting labour-power more intensely. We now turn to the factory as a whole, and that in its most perfect form. Dr. Ure, the Pindar of the automatic factory, describes it, on the one hand, as These two descriptions are far from being identical. In one, the collective labourer, or social body of labour, appears as the dominant subject, and the mechanical automaton as the object; in the other, the automaton itself is the subject, and the workmen are merely conscious organs, co-ordinate with the unconscious organs of the automaton, and together with them, subordinated to the central moving-power. The first description is applicable to every possible employment of machinery on a large scale, the second is characteristic of its use by capital, and therefore of the modern factory system. Ure prefers therefore, to describe the central machine, from which the motion comes, not only as an automaton, but as an autocrat. In these spacious halls the benignant power of steam summons around him his myriads of willing menials. Along with the tool, the skill of the workman in handling it passes over to the machine. The capabilities of the tool are emancipated from the restraints that are inseparable from human labour-power. Thereby the technical foundation on which is based the division of labour in Manufacture, is swept away. Hence, in the place of the hierarchy of specialised workmen that characterises manufacture, there steps, in the automatic factory, a tendency to equalise and reduce to one and the same level every kind of work that has to be done by the minders of the machines; in the place of the artificially produced differentiations of the detail workmen, step the natural differences of age and sex. So far as division of labour re-appears in the factory, it is primarily a distribution of the workmen among the specialised machines; and of masses of workmen, not however organised into groups, among the various departments of the factory, in each of which they work at a number of similar machines placed together; their co-operation, therefore, is only simple. The organised group, peculiar to manufacture, is replaced by the connexion between the head workman and his few assistants. The essential division is, into workmen who are actually employed on the machines (among whom are included a few who look after the engine), and into mere attendants (almost exclusively children) of these workmen. Among the attendants are reckoned more or less all Feeders who supply the machines with the material to be worked. In addition to these two principal classes, there is a numerically unimportant class of persons, whose occupation it is to look after the whole of the machinery and repair it from time to time; such as engineers, mechanics, joiners, &c. This is a superior class of workmen, some of them scientifically educated, others brought up to a trade; it is distinct from the factory operative class, and merely aggregated to it. This division of labour is purely technical. To work at a machine, the workman should be taught from childhood, in order that he may learn to adapt his own movements to the uniform and unceasing motion of an automaton. When the machinery, as a whole, forms a system of manifold machines, working simultaneously and in concert, the co-operation based upon it, requires the distribution of various groups of workmen among the different kinds of machines. But the employment of machinery does away with the necessity of crystallising this distribution after the manner of Manufacture, by the constant annexation of a particular man to a particular function. Since the motion of the whole system does not proceed from the workman, but from the machinery, a change of persons can take place at any time without an interruption of the work. The most striking proof of this is afforded by the relays system, put into operation by the manufacturers during their revolt from 1848-1850. Lastly, the quickness with which machine work is learnt by young people, does away with the necessity of bringing up for exclusive employment by machinery, a special class of operatives. With regard to the work of the mere attendants, it can, to some extent, be replaced in the mill by machines, and owing to its extreme simplicity, it allows of a rapid and constant change of the individuals burdened with this drudgery. Although then, technically speaking, the old system of division of labour is thrown overboard by machinery, it hangs on in the factory, as a traditional habit handed down from Manufacture, and is afterwards systematically re-moulded and established in a more hideous form by capital, as a means of exploiting labour-power. The life-long speciality of handling one and the same tool, now becomes the life-long speciality of serving one and the same machine. Machinery is put to a wrong use, with the object of transforming the workman, from his very childhood, into a part of a detail-machine. In this way, not only are the expenses of his reproduction considerably lessened, but at the same time his helpless dependence upon the factory as a whole, and therefore upon the capitalist, is rendered complete. Here as everywhere else, we must distinguish between the increased productiveness due to the development of the social process of production, and that due to the capitalist exploitation of that process. In handicrafts and manufacture, the workman makes use of a tool, in the factory, the machine makes use of him. There the movements of the instrument of labour proceed from him, here it is the movements of the machine that he must follow. In manufacture the workmen are parts of a living mechanism. In the factory we have a lifeless mechanism independent of the workman, who becomes its mere living appendage. At the same time that factory work exhausts the nervous system to the uttermost, it does away with the many-sided play of the muscles, and confiscates every atom of freedom, both in bodily and intellectual activity. The lightening of the labour, even, becomes a sort of torture, since the machine does not free the labourer from work, but deprives the work of all interest. Every kind of capitalist production, in so far as it is not only a labour-process, but also a process of creating surplus-value, has this in common, that it is not the workman that employs the instruments of labour, but the instruments of labour that employ the workman. But it is only in the factory system that this inversion for the first time acquires technical and palpable reality. By means of its conversion into an automaton, the instrument of labour confronts the labourer, during the labour-process, in the shape of capital, of dead labour, that dominates, and pumps dry, living labour-power. The separation of the intellectual powers of production from the manual labour, and the conversion of those powers into the might of capital over labour, is, as we have already shown, finally completed by modern industry erected on the foundation of machinery. The special skill of each individual insignificant factory operative vanishes as an infinitesimal quantity before the science, the gigantic physical forces, and the mass of labour that are embodied in the factory mechanism and, together with that mechanism, constitute the power of the master. This master, therefore, in whose brain the machinery and his monopoly of it are inseparably united, whenever he falls out with his hands, contemptuously tells them: The technical subordination of the workman to the uniform motion of the instruments of labour, and the peculiar composition of the body of workpeople, consisting as it does of individuals of both sexes and of all ages, give rise to a barrack discipline, which is elaborated into a complete system in the factory, and which fully develops the before mentioned labour of overlooking, thereby dividing the workpeople into operatives and overlookers, into private soldiers and sergeants of an industrial army. The main difficulty [in the automatic factory] ... lay ... above all in training human beings to renounce their desultory habits of work, and to identify themselves with the unvarying regularity of the complex automaton. To devise and administer a successful code of factory discipline, suited to the necessities of factory diligence, was the Herculean enterprise, the noble achievement of Arkwright! Even at the present day, when the system is perfectly organised and its labour lightened to the utmost, it is found nearly impossible to convert persons past the age of puberty, into useful factory hands. The factory code in which capital formulates, like a private legislator, and at his own good will, his autocracy over his workpeople, unaccompanied by that division of responsibility, in other matters so much approved of by the bourgeoisie, and unaccompanied by the still more approved representative system, this code is but the capitalistic caricature of that social regulation of the labour-process which becomes requisite in co-operation on a great scale, and in the employment in common, of instruments of labour and especially of machinery. The place of the slave-driver s lash is taken by the overlooker s book of penalties. All punishments naturally resolve themselves into fines and deductions from wages, and the law-giving talent of the factory Lycurgus so arranges matters, that a violation of his laws is, if possible, more profitable to him than the keeping of them. We shall here merely allude to the material conditions under which factory labour is carried on. Every organ of sense is injured in an equal degree by artificial elevation of the temperature, by the dust-laden atmosphere, by the deafening noise, not to mention danger to life and limb among the thickly crowded machinery, which, with the regularity of the seasons, issues its list of the killed and wounded in the industrial battle. Economy of the social means of production, matured and forced as in a hothouse by the factory system, is turned, in the hands of capital, into systematic robbery of what is necessary for the life of the workman while he is at work, robbery of space, light, air, and of protection to his person against the dangerous and unwholesome accompaniments of the productive process, not to mention the robbery of appliances for the comfort of the workman. Is Fourier wrong when he calls factories tempered bagnos"? The contest between the capitalist and the wage-labourer dates back to the very origin of capital. It raged on throughout the whole manufacturing period. But only since the introduction of machinery has the workman fought against the instrument of labour itself, the material embodiment of capital. He revolts against this particular form of the means of production, as being the material basis of the capitalist mode of production. In the 17th century nearly all Europe experienced revolts of the workpeople against the ribbon-loom, a machine for weaving ribbons and trimmings, called in Germany Bandm hle, Schnurm hle, and M hlenstuhl. These machines were invented in Germany. Abb Lancellotti, in a work that appeared in Venice in 1636, but which was written in 1579, says as follows: In Leyden, this machine was not used till 1629; there the riots of the ribbon-weavers at length compelled the Town Council to prohibit it. After making various decrees more or less prohibitive against this loom in 1632, 1639, &c., the States General of Holland at length permitted it to be used, under certain conditions, by the decree of the 15th December, 1661. It was also prohibited in Cologne in 1676, at the same time that its introduction into England was causing disturbances among the workpeople. By an imperial Edict of 19th Feb., 1685, its use was forbidden throughout all Germany. In Hamburg it was burnt in public by order of the Senate. The Emperor Charles VI., on 9th Feb., 1719, renewed the edict of 1685, and not till 1765 was its use openly allowed in the Electorate of Saxony. This machine, which shook Europe to its foundations, was in fact the precursor of the mule and the power-loom, and of the industrial revolution of the 18th century. It enabled a totally inexperienced boy, to set the whole loom with all its shuttles in motion, by simply moving a rod backwards and forwards, and in its improved form produced from 40 to 50 pieces at once. About 1630, a wind-sawmill, erected near London by a Dutchman, succumbed to the excesses of the populace. Even as late as the beginning of the 18th century, sawmills driven by water overcame the opposition of the people, supported as it was by Parliament, only with great difficulty. No sooner had Everet in 1758 erected the first wool-shearing machine that was driven by water-power, than it was set on fire by 100,000 people who had been thrown out of work. Fifty thousand workpeople, who had previously lived by carding wool, petitioned Parliament against Arkwright s scribbling mills and carding engines. The enormous destruction of machinery that occurred in the English manufacturing districts during the first 15 years of this century, chiefly caused by the employment of the power-loom, and known as the Luddite movement, gave the anti-Jacobin governments of a Sidmouth, a Castlereagh, and the like, a pretext for the most reactionary and forcible measures. It took both time and experience before the workpeople learnt to distinguish between machinery and its employment by capital, and to direct their attacks, not against the material instruments of production, but against the mode in which they are used. The contests about wages in Manufacture, pre-suppose manufacture, and are in no sense directed against its existence. The opposition against the establishment of new manufactures, proceeds from the guilds and privileged towns, not from the workpeople. Hence the writers of the manufacturing period treat the division of labour chiefly as a means of virtually supplying a deficiency of labourers, and not as a means of actually displacing those in work. This distinction is self-evident. If it be said that 100 millions of people would be required in England to spin with the old spinning-wheel the cotton that is now spun with mules by 500,000 people, this does not mean that the mules took the place of those millions who never existed. It means only this, that many millions of workpeople would be required to replace the spinning machinery. If, on the other hand, we say, that in England the power-loom threw 800,000 weavers on the streets, we do not refer to existing machinery, that would have to be replaced by a definite number of workpeople, but to a number of weavers in existence who were actually replaced or displaced by the looms. During the manufacturing period, handicraft labour, altered though it was by division of labour, was yet the basis. The demands of the new colonial markets could not be satisfied owing to the relatively small number of town operatives handed down from the middle ages, and the manufactures proper opened out new fields of production to the rural population, driven from the land by the dissolution of the feudal system. At that time, therefore, division of labour and co-operation in the workshops, were viewed more from the positive aspect, that they made the workpeople more productive. Long before the period of modern industry, co-operation and the concentration of the instruments of labour in the hands of a few, gave rise, in numerous countries where these methods were applied in agriculture, to great, sudden and forcible revolutions in the modes of production, and consequentially, in the conditions of existence, and the means of employment of the rural populations. But this contest at first takes place more between the large and the small landed proprietors, than between capital and wage labour; on the other hand, when the labourers are displaced by the instruments of labour, by sheep, horses, &c., in this case force is directly resorted to in the first instance as the prelude to the industrial revolution. The labourers are first driven from the land, and then come the sheep. Land grabbing on a great scale, such as was perpetrated in England, is the first step in creating a field for the establishment of agriculture on a great scale. Hence this subversion of agriculture puts on, at first, more the appearance of a political revolution. The instrument of labour, when it takes the form of a machine, immediately becomes a competitor of the workman himself. The self-expansion of capital by means of machinery is thenceforward directly proportional to the number of the workpeople, whose means of livelihood have been destroyed by that machinery. The whole system of capitalist production is based on the fact that the workman sells his labour-power as a commodity. Division of labour specialises this labour-power, by reducing it to skill in handling a particular tool. So soon as the handling of this tool becomes the work of a machine, then, with the use-value, the exchange-value too, of the workman s labour-power vanishes; the workman becomes unsaleable, like paper money thrown out of currency by legal enactment. That portion of the working-class, thus by machinery rendered superfluous, i.e., no longer immediately necessary for the self-expansion of capital, either goes to the wall in the unequal contest of the old handicrafts and manufactures with machinery, or else floods all the more easily accessible branches of industry, swamps the labour-market, and sinks the price of labour-power below its value. It is impressed upon the workpeople, as a great consolation, first, that their sufferings are only temporary ( a temporary inconvenience"), secondly, that machinery acquires the mastery over the whole of a given field of production, only by degrees, so that the extent and intensity of its destructive effect is diminished. The first consolation neutralises the second. When machinery seizes on an industry by degrees, it produces chronic misery among the operatives who compete with it. Where the transition is rapid, the effect is acute and felt by great masses. History discloses no tragedy more horrible than the gradual extinction of the English hand-loom weavers, an extinction that was spread over several decades, and finally sealed in 1838. Many of them died of starvation, many with families vegetated for a long time on 2 d. a day. On the other hand, the English cotton machinery produced an acute effect in India. The Governor General reported 1834-35: No doubt, in turning them out of this temporal world, the machinery caused them no more than a temporary inconvenience. For the rest, since machinery is continually seizing upon new fields of production, its temporary effect is really permanent. Hence, the character of independence and estrangement which the capitalist mode of production as a whole gives to the instruments of labour and to the product, as against the workman, is developed by means of machinery into a thorough antagonism. Therefore, it is with the advent of machinery, that the workman for the first time brutally revolts against the instruments of labour. The instrument of labour strikes down the labourer. This direct antagonism between the two comes out most strongly, whenever newly introduced machinery competes with handicrafts or manufactures, handed down from former times. But even in modern industry the continual improvement of machinery, and the development of the automatic system, has an analogous effect. The extraordinary power of expansion of the factory system owing to accumulated practical experience, to the mechanical means at hand, and to constant technical progress, was proved to us by the giant strides of that system under the pressure of a shortened working-day. But who, in 1860, the Zenith year of the English cotton industry, would have dreamt of the galloping improvements in machinery, and the corresponding displacement of working people, called into being during the following 3 years, under the stimulus of the American Civil War? A couple of examples from the Reports of the Inspectors of Factories will suffice on this point. A Manchester manufacturer states: Another spinning-mill is estimated to effect a saving of labour of 10%. The Messrs. Gilmour, spinners at Manchester, state: In our blowing-room department we consider our expense with new machinery is fully one-third less in wages and hands ... in the jack-frame and drawing-frame room, about one-third less in expense, and likewise one-third less in hands; in the spinning room about one-third less in expenses. But this is not all; when our yarn goes to the manufacturers, it is so much better by the application of our new machinery, that they will produce a greater quantity of cloth, and cheaper than from the yarn produced by old machinery. Mr. Redgrave further remarks in the same Report: The following table shows the total result of the mechanical improvements in the English cotton industry due to the American Civil War. Hence, between 1861 and 1868, 338 cotton factories disappeared, in other words more productive machinery on a larger scale was concentrated in the hands of a smaller number of capitalists. The number of power-looms decreased by 20,663; but since their product increased in the same period, an improved loom must have yielded more than an old one. Lastly the number of spindles increased by 1,612,541, while the number of operatives decreased by 50,505. The temporary misery inflicted on the workpeople by the cotton-crisis, was heightened, and from being temporary made permanent, by the rapid and persistent progress of machinery. But machinery not only acts as a competitor who gets the better of the workman, and is constantly on the point of making him superfluous. It is also a power inimical to him, and as such capital proclaims it from the roof tops and as such makes use of it. It is the most powerful weapon for repressing strikes, those periodical revolts of the working-class against the autocracy of capital. According to Gaskell, the steam-engine was from the very first an antagonist of human power, an antagonist that enabled the capitalist to tread under foot the growing claims of the workmen, who threatened the newly born factory system with a crisis. It would be possible to write quite a history of the inventions, made since 1830, for the sole purpose of supplying capital with weapons against the revolts of the working-class. At the head of these in importance, stands the self-acting mule, because it opened up a new epoch in the automatic system. Nasmyth, the inventor of the steam-hammer, gives the following evidence before the Trades Union Commission, with regard to the improvements made by him in machinery and introduced in consequence of the wide-spread and long strikes of the engineers in 1851. Ure says of a machine used in calico printing: Speaking of an invention for dressing warps: With regard to the invention of the self-acting mule, he says: Although Ure s work appeared 30 years ago, at a time when the factory system was comparatively but little developed, it still perfectly expresses the spirit of the factory, not only by its undisguised cynicism, but also by the na vet with which it blurts out the stupid contradictions of the capitalist brain. For instance, after propounding the doctrine stated above, that capital, with the aid of science taken into its pay, always reduces the refractory hand of labour to docility, he grows indignant because After preaching a long sermon to show how advantageous the rapid development of machinery is to the working-classes, he warns them, that by their obstinacy and their strikes they hasten that development. A few pages before he states the contrary. On the other hand, this same dispenser of consolation defends the lowness of the children s wages on the ground that it prevents parents from sending their children at too early an age into the factory. The whole of his book is a vindication of a working-day of unrestricted length; that Parliament should forbid children of 13 years to be exhausted by working 12 hours a day, reminds his liberal soul of the darkest days of the Middle Ages. This does not prevent him from calling upon the factory operatives to thank Providence, who by means of machinery has given them the leisure to think of their immortal interests. James Mill, MacCulloch, Torrens, Senior, John Stuart Mill, and a whole series besides, of bourgeois political economists, insist that all machinery that displaces workmen, simultaneously and necessarily sets free an amount of capital adequate to employ the same identical workmen. Suppose a capitalist to employ 100 workmen, at 30 a year each, in a carpet factory. The variable capital annually laid out amounts, therefore, to 3,000. Suppose, also, that he discharges 50 of his workmen, and employs the remaining 50 with machinery that costs him 1,500. To simplify matters, we take no account of buildings, coal, &c. Further suppose that the raw material annually consumed costs 3,000, both before and after the change. Is any capital set free by this metamorphosis? Before the change, the total sum of 6,000 consisted half of constant, and half of variable capital. After the change it consists of 4,500 constant ( 3,000 raw material and 1,500 machinery), and 1,500 variable capital. The variable capital, instead of being one half, is only one quarter, of the total capital. Instead of being set free, a part of the capital is here locked up in such a way as to cease to be exchanged against labour-power: variable has been changed into constant capital. Other things remaining unchanged, the capital of 6,000, can, in future, employ no more than 50 men. With each improvement in the machinery, it will employ fewer. If the newly introduced machinery had cost less than did the labour-power and implements displaced by it, if, for instance, instead of costing 1,500, it had cost only 1,000, a variable capital of 1,000 would have been converted into constant capital, and locked up; and a capital of 500 would have been set free. The latter sum, supposing wages unchanged, would form a fund sufficient to employ about 16 out of the 50 men discharged; nay, less than 16, for, in order to be employed as capital, a part of this 500 must now become constant capital, thus leaving only the remainder to be laid out in labour-power. But, suppose, besides, that the making of the new machinery affords employment to a greater number of mechanics, can that be called compensation to the carpet-makers, thrown on the streets? At the best, its construction employs fewer men than its employment displaces. The sum of 1,500 that formerly represented the wages of the discharged carpet-makers, now represents in the shape of machinery: (1) the value of the means of production used in the construction of that machinery, (2) the wages of the mechanics employed in its construction, and (3) the surplus-value falling to the share of their master. Further, the machinery need not be renewed till it is worn out. Hence, in order to keep the increased number of mechanics in constant employment, one carpet manufacturer after another must displace workmen by machines. As a matter of fact the apologists do not mean this sort of setting free. They have in their minds the means of subsistence of the liberated work-people. It cannot be denied, in the above instance, that the machinery not only liberates 50 men, thus placing them at others disposal, but, at the same time, it withdraws from their consumption, and sets free, means of subsistence to the value of 1,500. The simple fact, by no means a new one, that machinery cuts off the workmen from their means of subsistence is, therefore, in economic parlance tantamount to this, that machinery liberates means of subsistence for the workman, or converts those means into capital for his employment. The mode of expression, you see, is everything. Nominibus mollire licet mala. This theory implies that the 1,500 worth of means of subsistence was capital that was being expanded by the labour of the 50 men discharged. That, consequently, this capital falls out of employment so soon as they commence their forced holidays, and never rests till it has found a fresh investment, where it can again be productively consumed by these same 50 men. That sooner or later, therefore, the capital and the workmen must come together again, and that, then, the compensation is complete. That the sufferings of the workmen displaced by machinery are therefore as transient as are the riches of this world. In relation to the discharged workmen, the 1,500 worth of means of subsistence never was capital. What really confronted them as capital, was the sum of 1,500, afterwards laid out in machinery. On looking closer it will be seen that this sum represented part of the carpets produced in a year by the 50 discharged men, which part they received as wages from their employer in money instead of in kind. With the carpets in the form of money, they bought means of subsistence to the value of 1,500. These means, therefore, were to them, not capital, but commodities, and they, as regards these commodities, were not wage-labourers, but buyers. The circumstance that they were freed by the machinery, from the means of purchase, changed them from buyers into non-buyers. Hence a lessened demand for those commodities voil tout. If this diminution be not compensated by an increase from some other quarter, the market price of the commodities falls. If this state of things lasts for some time, and extends, there follows a discharge of workmen employed in the production of these commodities. Some of the capital that was previously devoted to production of necessary means of subsistence, has to become reproduced in another form. While prices fall, and capital is being displaced, the labourers employed in the production of necessary means of subsistence are in their turn freed from a part of their wages. Instead, therefore, of proving that, when machinery frees the workman from his means of subsistence, it simultaneously converts those means into capital for his further employment, our apologists, with their cut-and-dried law of supply and demand, prove, on the contrary, that machinery throws workmen on the streets, not only in that branch of production in which it is introduced, but also in those branches in which it is not introduced. The real facts, which are travestied by the optimism of economists, are as follows: The labourers, when driven out of the workshop by the machinery, are thrown upon the labour market, and there add to the number of workmen at the disposal of the capitalists. In Part VII of this book it will be seen that this effect of machinery, which, as we have seen, is represented to be a compensation to the working class, is on the contrary a most frightful scourge. For the present I will only say this: The labourers that are thrown out of work in any branch of industry, can no doubt seek for employment in some other branch. If they find it, and thus renew the bond between them and the means of subsistence, this takes place only by the intermediary of a new and additional capital that is seeking investment; not at all by the intermediary of the capital that formerly employed them and was afterwards converted into machinery. And even should they find employment, what a poor look-out is theirs! Crippled as they are by division of labour, these poor devils are worth so little outside their old trade, that they cannot find admission into any industries, except a few of inferior kind, that are over-supplied with underpaid workmen. Further, every branch of industry attracts each year a new stream of men, who furnish a contingent from which to fill up vacancies, and to draw a supply for expansion. So soon as machinery sets free a part of the workmen employed in a given branch of industry, the reserve men are also diverted into new channels of employment, and become absorbed in other branches; meanwhile the original victims, during the period of transition, for the most part starve and perish. It is an undoubted fact that machinery, as such, is not responsible for setting free the workman from the means of subsistence. It cheapens and increases production in that branch which it seizes on, and at first makes no change in the mass of the means of subsistence produced in other branches. Hence, after its introduction, the society possesses as much, if not more, of the necessaries of life than before, for the labourers thrown out of work; and that quite apart from the enormous share of the annual produce wasted by the non-workers. And this is the point relied on by our apologists! The contradictions and antagonisms inseparable from the capitalist employment of machinery, do not exist, they say, since they do not arise out of machinery, as such, but out of its capitalist employment! Since therefore machinery, considered alone, shortens the hours of labour, but, when in the service of capital, lengthens them; since in itself it lightens labour, but when employed by capital, heightens the intensity of labour; since in itself it is a victory of man over the forces of Nature, but in the hands of capital, makes man the slave of those forces; since in itself it increases the wealth of the producers, but in the hands of capital, makes them paupers for all these reasons and others besides, says the bourgeois economist without more ado, it is clear as noon-day that all these contradictions are a mere semblance of the reality, and that, as a matter of fact, they have neither an actual nor a theoretical existence. Thus he saves himself from all further puzzling of the brain, and what is more, implicitly declares his opponent to be stupid enough to contend against, not the capitalistic employment of machinery, but machinery itself. No doubt he is far from denying that temporary inconvenience may result from the capitalist use of machinery. But where is the medal without its reverse! Any employment of machinery, except by capital, is to him an impossibility. Exploitation of the workman by the machine is therefore, with him, identical with exploitation of the machine by the workman. Whoever, therefore, exposes the real state of things in the capitalistic employment of machinery, is against its employment in any way, and is an enemy of social progress! Exactly the reasoning of the celebrated Bill Sykes. Gentlemen of the jury, no doubt the throat of this commercial traveller has been cut. But that is not my fault, it is the fault of the knife. Must we, for such a temporary inconvenience, abolish the use of the knife? Only consider! where would agriculture and trade be without the knife? Is it not as salutary in surgery, as it is knowing in anatomy? And in addition a willing help at the festive board? If you abolish the knife you hurl us back into the depths of barbarism. Although machinery necessarily throws men out of work in those industries into which it is introduced, yet it may, notwithstanding this, bring about an increase of employment in other industries. This effect, however, has nothing in common with the so-called theory of compensation. Since every article produced by a machine is cheaper than a similar article produced by hand, we deduce the following infallible law: If the total quantity of the article produced by machinery, be equal to the total quantity of the article previously produced by a handicraft or by manufacture, and now made by machinery, then the total labour expended is diminished. The new labour spent on the instruments of labour, on the machinery, on the coal, and so on, must necessarily be less than the labour displaced by the use of the machinery; otherwise the product of the machine would be as dear, or dearer, than the product of the manual labour. But, as a matter of fact, the total quantity of the article produced by machinery with a diminished number of workmen, instead of remaining equal to, by far exceeds the total quantity of the hand-made article that has been displaced. Suppose that 400,000 yards of cloth have been produced on power-looms by fewer weavers than could weave 100,000 yards by hand. In the quadrupled product there lies four times as much raw material. Hence the production of raw material must be quadrupled. But as regards the instruments of labour, such as buildings, coal, machinery, and so on, it is different; the limit up to which the additional labour required for their production can increase, varies with the difference between the quantity of the machine-made article, and the quantity of the same article that the same number of workmen could make by hand. Hence, as the use of machinery extends in a given industry, the immediate effect is to increase production in the other industries that furnish the first with means of production. How far employment is thereby found for an increased number of men, depends, given the length of the working-day and the intensity of labour, on the composition of the capital employed, i.e., on the ratio of its constant to its variable component. This ratio, in its turn, varies considerably with the extent to which machinery has already seized on, or is then seizing on, those trades. The number of the men condemned to work in coal and metal mines increased enormously owing to the progress of the English factory system; but during the last few decades this increase of number has been less rapid, owing to the use of new machinery in mining. A new type of workman springs into life along with the machine, namely, its maker. We have already learnt that machinery has possessed itself even of this branch of production on a scale that grows greater every day. As to raw material, there is not the least doubt that the rapid strides of cotton spinning, not only pushed on with tropical luxuriance the growth of cotton in the United States, and with it the African slave trade, but also made the breeding of slaves the chief business of the border slave-states. When, in 1790, the first census of slaves was taken in the United States, their number was 697,000; in 1861 it had nearly reached four millions. On the other hand, it is no less certain that the rise of the English woollen factories, together with the gradual conversion of arable land into sheep pasture, brought, about the superfluity of agricultural labourers that led to their being driven in masses into the towns. Ireland, having during the last twenty years reduced its population by nearly one half, is at this moment undergoing the process of still further reducing the number of its inhabitants, so as exactly to suit the requirements of its landlords and of the English woollen manufacturers. When machinery is applied to any of the preliminary or intermediate stages through which the subject of labour has to pass on its way to completion, there is an increased yield of material in those stages, and simultaneously an increased demand for labour in the handicrafts or manufactures supplied by the produce of the machines. Spinning by machinery, for example, supplied yarn so cheaply and so abundantly that the hand-loom weavers were, at first, able to work full time without increased outlay. Their earnings accordingly rose. Hence a flow of people into the cotton-weaving trade, till at length the 800,000 weavers, called into existence by the Jenny, the throstle and the mule, were overwhelmed by the power-loom. So also, owing to the abundance of clothing materials produced by machinery, the number of tailors, seamstresses and needlewomen, went on increasing until the appearance of the sewing-machine. In proportion as machinery, with the aid of a relatively small number of workpeople, increases the mass of raw materials, intermediate products, instruments of labour, &c., the working-up of these raw materials and intermediate products becomes split up into numberless branches; social production increases in diversity. The factory system carries the social division of labour immeasurably further than does manufacture, for it increases the productiveness of the industries it seizes upon, in a far higher degree. The immediate result of machinery is to augment surplus-value and the mass of products in which surplus-value is embodied. And, as the substances consumed by the capitalists and their dependents become more plentiful, so too do these orders of society. Their growing wealth, and the relatively diminished number of workmen required to produce the necessaries of life beget, simultaneously with the rise of new and luxurious wants, the means of satisfying those wants. A larger portion of the produce of society is changed into surplus-produce, and a larger part of the surplus-produce is supplied for consumption in a multiplicity of refined shapes. In other words, the production of luxuries increases. The refined and varied forms of the products are also due to new relations with the markets of the world, relations that are created by modern industry. Not only are greater quantities of foreign articles of luxury exchanged for home products, but a greater mass of foreign raw materials, ingredients, and intermediate products, are used as means of production in the home industries. Owing to these relations with the markets of the world, the demand for labour increases in the carrying trades, which split up into numerous varieties. The increase of the means of production and subsistence, accompanied by a relative diminution in the number of labourers, causes an increased demand for labour in making canals, docks, tunnels, bridges, and so on, works that can only bear fruit in the far future. Entirely new branches of production, creating new fields of labour, are also formed, as the direct result either of machinery or of the general industrial changes brought about by it. But the place occupied by these branches in the general production is, even in the most developed countries, far from important. The number of labourers that find employment in them is directly proportional to the demand, created by those industries, for the crudest form of manual labour. The chief industries of this kind are, at present, gas-works, telegraphs, photography, steam navigation, and railways. According to the census of 1861 for England and Wales, we find in the gas industry (gas-works, production of mechanical apparatus, servants of the gas companies, &c), 15,211 persons; in telegraphy, 2,399; in photography, 2,366; steam navigation, 3,570; and in railways, 70,599, of whom the unskilled navvies, more or less permanently employed, and the whole administrative and commercial staff, make up about 28,000. The total number of persons, therefore, employed in these five new industries amounts to 94,145. Lastly, the extraordinary productiveness of modern industry, accompanied as it is by both a more extensive and a more intense exploitation of labour-power in all other spheres of production, allows of the unproductive employment of a larger and larger part of the working-class, and the consequent reproduction, on a constantly extending scale, of the ancient domestic slaves under the name of a servant class, including men-servants, women-servants, lackeys, &c. According to the census of 1861, the population of England and Wales was 20,066,244; of these, 9,776,259 males, and 10,289,965 females. If we deduct from this population all who are too old or too young for work, all unproductive women, young persons and children, the ideological classes, such as government officials, priests, lawyers, soldiers, &c.; further, all who have no occupation but to consume the labour of others in the form of rent, interest, &c.; and, lastly, paupers, vagabonds, and criminals, there remain in round numbers eight millions of the two sexes of every age, including in that number every capitalist who is in any way engaged in industry, commerce, or finance. Among these 8 millions are: All the persons employed in textile factories and in mines, taken together, number 1,208,442; those employed in textile factories and metal industries, taken together, number 1,039,605; in both cases less than the number of modern domestic slaves. What a splendid result of the capitalist exploitation of machinery! All political economists of any standing admit that the introduction of new machinery has a baneful effect on the workmen in the old handicrafts and manufactures with which this machinery at first competes. Almost all of them bemoan the slavery of the factory operative. And what is the great trump-card that they play? That machinery, after the horrors of the period of introduction and development have subsided, instead of diminishing, in the long run increases the number of the slaves of labour! Yes, Political Economy revels in the hideous theory, hideous to every philanthropist who believes in the eternal Nature-ordained necessity for capitalist production, that after a period of growth and transition, even its crowning success, the factory system based on machinery, grinds down more workpeople than on its first introduction it throws on the streets. It is true that in some cases, as we saw from instances of English worsted and silk factories, an extraordinary extension of the factory system may, at a certain stage of its development, be accompanied not only by a relative, but by an absolute decrease in the number of operatives employed. In the year 1860, when a special census of all the factories in the United Kingdom was taken by order of Parliament, the factories in those parts of Lancashire, Cheshire, and Yorkshire, included in the district of Mr. Baker, the factory inspector, numbered 652; 570 of these contained 85,622 power-looms, 6,819,146 spindles (exclusive of doubling spindles), employed 27,439 horse-power (steam), and 1,390 (water), and 94,119 persons. In the year 1865, the same factories contained, looms 95,163, spindles 7,025,031, had a steam-power of 28,925 horses, and a water-power of 1,445 horses, and employed 88,913 persons. Between 1860 and 1865, therefore, the increase in looms was 11%, in spindles 3%, and in engine-power 3%, while the number of persons employed decreased 5 %. Between 1852 and 1862, considerable extension of the English woollen manufacture took place, while the number of hands employed in it remained almost stationary, In certain cases, the increase in the number of hands employed is only apparent; that is, it is not due to the extension of the factories already established, but to the gradual annexation of connected trades; for instance, the increase in power-looms, and in the hands employed by them between 1838 and 1856, was, in the cotton trade, simply owing to the extension of this branch of industry; but in the other trades to the application of steam-power to the carpet-loom, to the ribbon-loom, and to the linen-loom, which previously had been worked by the power of men. Hence the increase of the hands in these latter trades was merely a symptom of a diminution in the total number employed. Finally, we have considered this question entirely apart from the fact, that everywhere, except in the metal industries, young persons (under 18), and women and children form the preponderating element in the class of factory hands. Nevertheless, in spite of the mass of hands actually displaced and virtually replaced by machinery, we can understand how the factory operatives, through the building of more mills and the extension of old ones in a given industry, may become more numerous than the manufacturing workmen and handicraftsman that have been displaced. Suppose, for example, that in the old mode of production, a capital of 500 is employed weekly, two-fifths being constant and three-fifths variable capital, i.e., 200 being laid out in means of production, and 300, say 1 per man, in labour-power. On the introduction of machinery the composition of this capital becomes altered. We will suppose it to consist of four-fifths constant and one-fifth variable, which means that only 100 is now laid out in labour-power. Consequently, two-thirds of the workmen are discharged. If now the business extends, and the total capital employed grows to 1,500 under unchanged conditions, the number of operatives employed will increase to 300, just as many as before the introduction of the machinery. If the capital further grows to 2,000, 400 men will be employed, or one-third more than under the old system. Their numbers have, in point of fact, increased by 100, but relatively, i.e., in proportion to the total capital advanced, they have diminished by 800, for the 2,000 capital would, in the old state of things, have employed 1,200 instead of 400 men. Hence, a relative decrease in the number of hands is consistent with an actual increase. We assumed above that while the total capital increases, its composition remains the same, because the conditions of production remain constant. But we have already seen that, with every advance in the use of machinery, the constant component of capital, that part which consists of machinery, raw material, &c., increases, while the variable component, the part laid out in labour-power, decreases. We also know that in no other system of production is improvement so continuous, and the composition of the capital employed so constantly changing as in the factory system. These changes are, however, continually interrupted by periods of rest, during which there is a mere quantitative extension of the factories on the existing technical basis. During such periods the operatives increase in number. Thus, in 1835, the total number of operatives in the cotton, woollen, worsted, flax, and silk factories of the United Kingdom was only 354,684; while in 1861 the number of the power-loom weavers alone (of both sexes and of all ages, from eight years upwards), amounted to 230,654. Certainly, this growth appears less important when we consider that in 1838 the hand-loom weavers with their families still numbered 800,000, not to mention those thrown out of work in Asia, and on the Continent of Europe. In the few remarks I have still to make on this point, I shall refer to some actually existing relations, the existence of which our theoretical investigation has not yet disclosed. So long as, in a given branch of industry, the factory system extends itself at the expense of the old handicrafts or of manufacture, the result is as sure as is the result of an encounter between an army furnished with breach-loaders, and one armed with bows and arrows. This first period, during which machinery conquers its field of action, is of decisive importance owing to the extraordinary profits that it helps to produce. These profits not only form a source of accelerated accumulation, but also attract into the favoured sphere of production a large part of the additional social capital that is being constantly created, and is ever on the look-out for new investments. The special advantages of this first period of fast and furious activity are felt in every branch of production that machinery invades. So soon, however, as the factory system has gained a certain breadth of footing and a definite degree of maturity, and, especially, so soon as its technical basis, machinery, is itself produced by machinery; so soon as coal mining and iron mining, the metal industries, and the means of transport have been revolutionised; so soon, in short, as the general conditions requisite for production by the modern industrial system have been established, this mode of production acquires an elasticity, a capacity for sudden extension by leaps and bounds that finds no hindrance except in the supply of raw material and in the disposal of the produce. On the one hand, the immediate effect of machinery is to increase the supply of raw material in the same way, for example, as the cotton gin augmented the production of cotton. On the other hand, the cheapness of the articles produced by machinery, and the improved means of transport and communication furnish the weapons for conquering foreign markets. By ruining handicraft production in other countries, machinery forcibly converts them into fields for the supply of its raw material. In this way East India was compelled to produce cotton, wool, hemp, jute, and indigo for Great Britain. By constantly making a part of the hands supernumerary, modern industry, in all countries where it has taken root, gives a spur to emigration and to the colonisation of foreign lands, which are thereby converted into settlements for growing the raw material of the mother country; just as Australia, for example, was converted into a colony for growing wool. A new and international division of labour, a division suited to the requirements of the chief centres of modern industry springs up, and converts one part of the globe into a chiefly agricultural field of production, for supplying the other part which remains a chiefly industrial field. This revolution hangs together with radical changes in agriculture which we need not here further inquire into. On the motion of Mr. Gladstone, the House of Commons ordered, on the 17th February, 1867, a return of the total quantities of grain, corn, and flour, of all sorts, imported into, and exported from, the United Kingdom, between the years 1831 and 1866. I give below a summary of the result. The flour is given in quarters of corn. (See the Table on p. 426.) The enormous power, inherent in the factory system, of expanding by jumps, and the dependence of that system on the markets of the world, necessarily beget feverish production, followed by over-filling of the markets, whereupon contraction of the markets brings on crippling of production. The life of modern industry becomes a series of periods of moderate activity, prosperity, over-production, crisis and stagnation. The uncertainty and instability to which machinery subjects the employment, and consequently the conditions of existence, of the operatives become normal, owing to these periodic changes of the industrial cycle. Except in the periods of prosperity, there rages between the capitalists the most furious combat for the share of each in the markets. This share is directly proportional to the cheapness of the product. Besides the rivalry that this struggle begets in the application of improved machinery for replacing labour-power, and of new methods of production, there also comes a time in every industrial cycle, when a forcible reduction of wages beneath the value of labour-power, is attempted for the purpose of cheapening commodities. A necessary condition, therefore, to the growth of the number of factory hands, is a proportionally much more rapid growth of the amount of capital invested in mills. This growth, however, is conditioned by the ebb and flow of the industrial cycle. It is, besides, constantly interrupted by the technical progress that at one time virtually supplies the place of new workmen, at another, actually displaces old ones. This qualitative change in mechanical industry continually discharges hands from the factory, or shuts its doors against the fresh stream of recruits, while the purely quantitative extension of the factories absorbs not only the men thrown out of work, but also fresh contingents. The workpeople are thus continually both repelled and attracted, hustled from pillar to post, while, at the same time, constant changes take place in the sex, age, and skill of the levies. The lot of the factory operatives will be best depicted by taking a rapid survey of the course of the English cotton industry. From 1770 to 1815 this trade was depressed or stagnant for 5 years only. During this period of 45 years the English manufacturers had a monopoly of machinery and of the markets of the world. From 1815 to 1821 depression; 1822 and 1823 prosperity; 1824 abolition of the laws against Trades Unions, great extension of factories everywhere; 1825 crisis; 1826 great misery and riots among the factory operatives; 1827 slight improvement; 1828 great increase in power-looms, and in exports; 1829 exports, especially to India, surpass all former years; 1830 glutted markets, great distress; 1831 to 1833 continued depression, the monopoly of the trade with India and China withdrawn from the East India Company; 1834 great increase of factories and machinery, shortness of hands. The new poor law furthers the migration of agricultural labourers into the factory districts. The country districts swept of children. White slave trade; 1835 great prosperity, contemporaneous starvation of the hand-loom weavers; 1836 great prosperity; 1837 and 1838 depression and crisis; 1839 revival; 1840 great depression, riots, calling out of the military; 1841 and 1842 frightful suffering among the factory operatives; 1842 the manufacturers lock the hands out of the factories in order to enforce the repeal of the Corn Laws. The operatives stream in thousands into the towns of Lancashire and Yorkshire, are driven back by the military, and their leaders brought to trial at Lancaster; 1843 great misery; 1844 revival; 1845 great prosperity; 1846 continued improvement at first, then reaction. Repeal of the Corn Laws; 1847 crisis, general reduction of wages by 10 and more per cent. in honour of the big loaf"; 1848 continued depression; Manchester under military protection; 1849 revival; 1850 prosperity; 1851 falling prices, low wages, frequent strikes; 1852 improvement begins, strikes continue, the manufacturers threaten to import foreign hands; 1853 increasing exports. Strike for 8 months, and great misery at Preston; 1854 prosperity, glutted markets; 1855 news of failures stream in from the United States, Canada, and the Eastern markets; 1856 great prosperity; 1857 crisis; 1858 improvement; 1859 great prosperity, increase in factories; 1860 Zenith of the English cotton trade, the Indian, Australian, and other markets so glutted with goods that even in 1863 they had not absorbed the whole lot; the French Treaty of Commerce, enormous growth of factories and machinery; 1861 prosperity continues for a time, reaction, the American Civil War, cotton famine: 1862 to 1863 complete collapse. The history of the cotton famine is too characteristic to dispense with dwelling upon it for a moment. From the indications as to the condition of the markets of the world in 1860 and 1861, we see that the cotton famine came in the nick of time for the manufacturers, and was to some extent advantageous to them, a fact that was acknowledged in the reports of the Manchester Chamber of Commerce, proclaimed in Parliament by Palmerston and Derby, and confirmed by events. No doubt, among the 2,887 cotton mills in the United Kingdom in 1861, there were many of small size. According to the report of Mr. A. Redgrave, out of the 2,109 mills included in his district, 392, or 19% employed less than ten horse-power each; 345, or 16% employed 10 H. P., and less than 20 H. P.; while 1,372 employed upwards of 20 H. P. The majority of the small mills were weaving sheds, built during the period of prosperity after 1858, for the most part by speculators, of whom one supplied the yarn, another the machinery, a third the buildings, and were worked by men who had been overlookers, or by other persons of small means. These small manufacturers mostly went to the wall. The same fate would have overtaken them in the commercial crisis that was staved off only by the cotton famine. Although they formed one-third of the total number of manufacturers, yet their mills absorbed a much smaller part of the capital invested in the cotton trade. As to the extent of the stoppage, it appears from authentic estimates, that in October 1862, 60.3% of the spindles, and 58% of the looms were standing. This refers to the cotton trade as a whole, and, of course, requires considerable modification for individual districts. Only very few mills worked full time (60 hours a week), the remainder worked at intervals. Even in those few cases where full time was worked, and at the customary rate of piece-wage, the weekly wages of the operatives necessarily shrank, owing to good cotton being replaced by bad, Sea Island by Egyptian (in fine spinning mills), American and Egyptian by Surat, and pure cotton by mixings of waste and Surat. The shorter fibre of the Surat cotton and its dirty condition, the greater fragility of the thread, the substitution of all sorts of heavy ingredients for flour in sizing the warps, all these lessened the speed of the machinery, or the number of the looms that could be superintended by one weaver, increased the labour caused by defects in the machinery, and reduced the piece-wage by reducing the mass of the product turned off. Where Surat cotton was used, the loss to the operatives when on full time, amounted to 20, 30, and more per cent. But besides this, the majority of the manufacturers reduced the rate of piece-wage by 5, 7 , and 10 per cent. We can therefore conceive the situation of those hands who were employed for only 3, 3 or 4 days a week, or for only 6 hours a day. Even in 1863, after a comparative improvement had set in, the weekly wages of spinners and of weavers were 3s. 4d., 3s. 10d., 4s. 6d. and 5s. 1d. Even in this miserable state of things, however, the inventive spirit of the master never stood still, but was exercised in making deductions from wages. These were to some extent inflicted as a penalty for defects in the finished article that were really due to his bad cotton and to his unsuitable machinery. Moreover, where the manufacturer owned the cottages of the workpeople, he paid himself his rents by deducting the amount from these miserable wages. Mr. Redgrave tells us of self-acting minders (operatives who manage a pair of self-acting mules) Even when working short time the rent was frequently deducted from the wages of the operatives. No wonder that in some parts of Lancashire a kind of famine fever broke out. But more characteristic than all this, was, the revolution that took place in the process of production at the expense of the workpeople. Experimenta in corpore vili, like those of anatomists on frogs, were formally made. These experiments were not made solely at the expense of the workman s means of subsistence. His five senses also had to pay the penalty. In the Report of Inspectors of Factories for 30th April, 1864, we read as follows: But the workpeople had to suffer, not only from the experiments of the manufacturers inside the mills, and of the municipalities outside, not only from reduced wages and absence of work, from want and from charity, and from the eulogistic speeches of lords and commons. We find then, in the first 45 years of the English cotton trade, from 1770 to 1815, only 5 years of crisis and stagnation; but this was the period of monopoly. The second period from 1815 to 1863 counts, during its 48 years, only 20 years of revival and prosperity against 28 of depression and stagnation. Between 1815 and 1830 the competition with the continent of Europe and with the United States sets in. After 1833, the extension of the Asiatic markets is enforced by destruction of the human race (the wholesale extinction of Indian hand-loom weavers). After the repeal of the Corn Laws, from 1846 to 1863, there are 8 years of moderate activity and prosperity against 9 years of depression and stagnation. The condition of the adult male operatives, even during the years of prosperity, may be judged from the note subjoined. We have seen how machinery does away with co-operation based on handicrafts, and with manufacture based on the division of handicraft labour. An example of the first sort is the mowing-machine; it replaces co-operation between mowers. A striking example of the second kind, is the needle-making machine. According to Adam Smith, 10 men, in his day, made in co-operation, over 48,000 needles a-day. On the other hand, a single needle-machine makes 145,000 in a working-day of 11 hours. One woman or one girl superintends four such machines, and so produces near upon 600,000 needles in a day, and upwards of 3,000,000 in a week. A single machine, when it takes the place of co-operation or of manufacture, may itself serve as the basis of an industry of a handicraft character. Still, such a return to handicrafts is but a transition to the factory system, which, as a rule, makes its appearance so soon as the human muscles are replaced, for the purpose of driving the machines, by a mechanical motive power, such as steam or water. Here and there, but in any case only for a time, an industry may be carried on, on a small scale, by means of mechanical power. This is effected by hiring steam-power, as is done in some of the Birmingham trades, or by the use of small caloric-engines, as in some branches of weaving. In the Coventry silk weaving industry the experiment of cottage factories was tried. In the centre of a square surrounded by rows of cottages, an engine-house was built and the engine connected by shafts with the looms in the cottages. In all cases the power was hired at so much per loom. The rent was payable weekly, whether the looms worked or not. Each cottage held from 2 to 6 looms; some belonged to the weaver, some were bought on credit, some were hired. The struggle between these cottage factories and the factory proper, lasted over 12 years. It ended with the complete ruin of the 300 cottage factories. Wherever the nature of the process did not involve production on a large scale, the new industries that have sprung up in the last few decades, such as envelope making, steel-pen making, &c., have, as a general rule, first passed through the handicraft stage, and then the manufacturing stage, as short phases of transition to the factory stage. The transition is very difficult in those cases where the production of the article by manufacture consists, not of a series of graduated processes, but of a great number of disconnected ones. This circumstance formed a great hindrance to the establishment of steel-pen factories. Nevertheless, about 15 years ago, a machine was invented that automatically performed 6 separate operations at once. The first steel-pens were supplied by the handicraft system, in the year 1820, at 7 4s. the gross; in 1830 they-were supplied by manufacture at 8s., and today the factory system supplies them to the trade at from 2 to 6d. the gross. Along with the development of the factory system and of the revolution in agriculture that accompanies it, production in all the other branches of industry not only extends, but alters its character. The principle, carried out in the factory system, of analysing the process of production into its constituent phases, and of solving the problems thus proposed by the application of mechanics, of chemistry, and of the whole range of the natural sciences, becomes the determining principle everywhere. Hence, machinery squeezes itself into the manufacturing industries first for one detail process, then for another. Thus the solid crystal of their organisation, based on the old division of labour, becomes dissolved, and makes way for constant changes. Independently of this, a radical change takes place in the composition of the collective labourer, a change of the persons working in combination. In contrast with the manufacturing period, the division of labour is thenceforth based, wherever possible, on the employment of women, of children of all ages, and of unskilled labourers, in one word, on cheap labour, as it is characteristically called in England. This is the case not only with all production on a large scale, whether employing machinery or not, but also with the so-called domestic industry, whether carried on in the houses of the workpeople or in small workshops. This modern so-called domestic industry has nothing, except the name, in common with the old-fashioned domestic industry, the existence of which pre-supposes independent urban handicrafts, independent peasant farming, and above all, a dwelling-house for the labourer and his family. That old-fashioned industry has now been converted into an outside department of the factory, the manufactory, or the warehouse. Besides the factory operatives, the manufacturing workmen and the handicraftsman, whom it concentrates in large masses at one spot, and directly commands, capital also sets in motion, by means, of invisible threads, another army; that of the workers in the domestic industries, who dwell in the large towns and are also scattered over the face of the country. An example: The shirt factory of Messrs. Tillie at Londonderry, which employs 1,000 operatives in the factory itself, and 9,000 people spread up and down the country and working in their own houses. The exploitation of cheap and immature labour-power is carried out in a more shameless manner in modern Manufacture than in the factory proper. This is because the technical foundation of the factory system, namely, the substitution of machines for muscular power, and the light character of the labour, is almost entirely absent in Manufacture, and at the same time women and over-young children are subjected, in a most unconscionable way, to the influence of poisonous or injurious substances. This exploitation is more shameless in the so-called domestic industry than in manufactures, and that because the power of resistance in the labourers decreases with their dissemination; because a whole series of plundering parasites insinuate themselves between the employer and the workman; because a domestic industry has always to compete either with the factory system, or with manufacturing in the same branch of production; because poverty robs the workman of the conditions most essential to his labour, of space, light and ventilation; because employment becomes more and more irregular; and, finally, because in these the last resorts of the masses made redundant by modern industry and Agriculture, competition for work attains its maximum. Economy in the means of production, first systematically carried out in the factory system, and there, from the very beginning, coincident with the most reckless squandering of labour-power, and robbery of the conditions normally requisite for labour this economy now shows its antagonistic and murderous side more and more in a given branch of industry, the less the social productive power of labour and the technical basis for a combination of processes are developed in that branch. I now proceed, by a few examples, to illustrate the principles laid down above. As a matter of fact, the reader is already familiar with numerous instances given in the chapter on the working-day. In the hardware manufactures of Birmingham and the neighbourhood, there are employed, mostly in very heavy work, 30,000 children and young persons, besides 10,000 women. There they are to be seen in the unwholesome brass-foundries, button factories, enamelling, galvanising, and lackering works. Owing to the excessive labour of their workpeople, both adult and non-adult, certain London houses where newspapers and books are printed, have got the ill-omened name of slaughterhouses. Similar excesses are practised in book-binding, where the victims are chiefly women, girls, and children; young persons have to do heavy work in rope-walks and night-work in salt mines, candle manufactories, and chemical works; young people are worked to death at turning the looms in silk weaving, when it is not carried on by machinery. One of the most shameful, the most dirty, and the worst paid kinds of labour, and one on which women and young girls are by preference employed, is the sorting of rags. It is well known that Great Britain, apart from its own immense store of rags, is the emporium for the rag trade of the whole world. They flow in from Japan, from the most remote States of South America, and from the Canary Islands. But the chief sources of their supply are Germany, France, Russia, Italy, Egypt, Turkey, Belgium, and Holland. They are used for manure, for making bedflocks, for shoddy, and they serve as the raw material of paper. The rag-sorters are the medium for the spread of small-pox and other infectious diseases, and they themselves are the first victims. A classical example of over-work, of hard and inappropriate labour, and of its brutalising effects on the workman from his childhood upwards, is afforded not only by coal-mining and miners generally, but also by tile and brick making, in which industry the recently invented machinery is, in England, used only here and there. Between May and September the work lasts from 5 in the morning till 8 in the evening, and where the drying is done in the open air, it often lasts from 4 in the morning till 9 in the evening. Work from 5 in the morning till 7 in the evening is considered reduced and moderate. Both boys and girls of 6 and even of 4 years of age are employed. They work for the same number of hours, often longer, than the adults. The work is hard and the summer heat increases the exhaustion. In a certain tile-field at Mosley, e.g., a young woman, 24 years of age, was in the habit of making 2,000 tiles a day, with the assistance of 2 little girls, who carried the clay for her, and stacked the tiles. These girls carried daily 10 tons up the slippery sides of the clay pits, from a depth of 30 feet, and then for a distance of 210 feet. That excessive insobriety is prevalent from childhood upwards among the whole of this class, is only natural. As to the manner, in which capital effects an economy in the requisites of labour, in modern Manufacture (in which I include all workshops of larger size, except factories proper), official and most ample material bearing on it is to be found in the Public Health Reports IV. (1863) and VI. (1864). The description of the workshops, more especially those of the London printers and tailors, surpasses the most loathsome phantasies of our romance writers. The effect on the health of the workpeople is self-evident. Dr. Simon, the chief medical officer of the Privy Council and the official editor of the Public Health Reports, says: In illustration of the way in which the workrooms influence the state of health Dr. Simon gives the following table of mortality. I now come to the so-called domestic industry. In order to get an idea of the horrors of this sphere, in which capital conducts its exploitation in the background of modern mechanical industry, one must go to the apparently quite idyllic trade of nail-making, carried on in a few remote villages of England. In this place, however, it will be enough to give a few examples from those branches of the lace-making and straw-plaiting industries that are not yet carried on by the aid of machinery, and that as yet do not compete with branches carried on in factories or in manufactories. Of the 150,000 persons employed in England in the production of lace, about 10,000 fall under the authority of the Factory Act, 1861. Almost the whole of the remaining 140,000 are women, young persons, and children of both sexes, the male sex, however, being weakly represented. The state of health of this cheap material for exploitation will be seen from the following table, computed by Dr. Trueman, physician to the Nottingham General Dispensary. Out of 686 female patients who were lace-makers, most of them between the ages of 17 and 24, the number of consumptive ones were: This progress in the rate of consumption ought to suffice for the most optimist of progressists, and for the biggest hawker of lies among the Free-trade bagmen of Germany. The Factory Act of 1861 regulates the actual making of the lace, so far as it is done by machinery, and this is the rule in England. The branches that we are now about to examine, solely with regard to those of the workpeople who work at home, and not those who work in manufactories or warehouses, fall into two divisions, viz. (1), finishing; (2), mending. The former gives the finishing touches to the machine-made lace, and includes numerous sub-divisions. The lace finishing is done either in what are called mistresses houses, or by women in their own houses, with or without the help of their children. The women who keep the mistresses houses are themselves poor. The workroom is in a private house. The mistresses take orders from manufacturers, or from warehousemen, and employ as many women, girls, and young children as the size of their rooms and the fluctuating demand of the business will allow. The number of the workwomen employed in these workrooms varies from 20 to 40 in some, and from 10 to 20 in others. The average age at which the children commence work is six years, but in many cases it is below five. The usual working-hours are from 8 in the morning till eight in the evening, with 1 hours for meals, which are taken at irregular intervals, and often in the foul workrooms. When business is brisk, the labour frequently lasts from 8 or even 6 o clock in the morning till 10, 11, or 12 o clock at night. In English barracks the regulation space allotted to each soldier is 500-600 cubic feet, and in the military hospitals 1,200 cubic feet. But in those finishing sties there are but 67 to 100 cubic feet to each person. At the same time the oxygen of the air is consumed by gas-lights. In order to keep the lace clean, and although the floor is tiled or gagged, the children are often compelled, even in winter, to pull off their shoes. The long stick is used by the mistresses as a stimulant more and more as the working hours are prolonged. When women and their children work at home, which now-a-days means in a hired room, often in a garret, the state of things is, if possible, still worse. This sort of work is given out within a circle of 80 miles radius from Nottingham. On leaving the warehouses at 9 or 10 o clock at night, the children are often given a bundle of lace to take home with them and finish. The Pharisee of a capitalist represented by one of his servants, accompanies this action, of course, with the unctuous phrase: That s for mother, yet he knows well enough that the poor children must sit up and help. Pillow lace-making is chiefly carried on in England in two agricultural districts; one, the Honiton lace district, extending from 20 to 30 miles along the south coast of Devonshire, and including a few places in North Devon; the other comprising a great part of the counties of Buckingham, Bedford, and Northampton, and also the adjoining portions of Oxfordshire and Huntingdonshire. The cottages of the agricultural labourers are the places where the work is usually carried on. Many manufacturers employ upwards of 3,000 of these lace-makers, who are chiefly children and young persons of the female sex exclusively. The state of things described as incidental to lace finishing is here repeated, save that instead of the mistresses houses, we find what are called lace-schools, kept by poor women in their cottages. From their fifth year and often earlier, until their twelfth or fifteenth year, the children work in these schools; during the first year the very young ones work from four to eight hours, and later on, from six in the morning till eight and ten o clock at night. Where lace-making ends in the counties of Buckingham and Bedford, straw-plaiting begins, and extends over a large part of Hertfordshire and the westerly and northerly parts of Essex. In 1861, there were 40,043 persons employed in straw-plaiting and straw-hat making; of these 3,815 were males of all ages, the rest females, of whom 14,913, including about 7,000 children, were under 20 years of age. In the place of the lace-schools we find here the straw-plait schools. The children commence their instruction in straw-plaiting generally in their 4th, often between their 3rd and 4th year. Education, of course, they get none. The children themselves call the elementary schools, natural schools, to distinguish them from these blood-sucking institutions, in which they are kept at work simply to get through the task, generally 30 yards daily, prescribed by their half-starved mothers. These same mothers often make them work at home, after school is over, till 10, 11, and 12 o clock at night. The straw cuts their mouths, with which they constantly moisten it, and their fingers. Dr. Ballard gives it as the general opinion of the whole body of medical officers in London, that 300 cubic feet is the minimum space proper for each person in a bedroom or workroom. But in the straw-plait schools space is more sparingly allotted than in the lace-schools, 12 2/3, 17, 18 and below 22 cubic feet for each person. Thus do the children enjoy life till the age of 12 or 14. The wretched half-starved parents think of nothing but getting as much as possible out of their children. The latter, as soon as they are grown up, do not care a farthing, and naturally so, for their parents, and leave them. And the native land of these model families is the pattern Christian country for Europe; so says at least Count Montalembert, certainly a competent authority on Christianity! Wages in the above industries, miserable as they are (the maximum wages of a child in the straw-plait schools rising in rare cases to 3 shillings), are reduced far below their nominal amount by the prevalence of the truck system everywhere, but especially in the lace districts. The cheapening of labour-power, by sheer abuse of the labour of women and children, by sheer robbery of every normal condition requisite for working and living, and by the sheer brutality of overwork and night-work, meets at last with natural obstacles that cannot be overstepped. So also, when based on these methods, do the cheapening of commodities and capitalist exploitation in general. So soon as this point is at last reached and it takes many years the hour has struck for the introduction of machinery, and for the thenceforth rapid conversion of the scattered domestic industries and also of manufactures into factory industries. An example, on the most colossal scale, of this movement is afforded by the production of wearing apparel. This industry, according to the classification of the Children s Employment Commission, comprises straw-hat makers, ladies -hat makers, cap-makers, tailors, milliners and dressmakers, shirt-makers, corset-makers, glove-makers, shoemakers, besides many minor branches, such as the making of neck-ties, collars, &c. In 1861, the number of females employed in these industries, in England and Wales, amounted to 586,299, of these 115,242 at the least were under 20, and 16,650. under 15 years of age. The number of these workwomen in the United Kingdom in 1861, was 750,334. The number of males employed in England and Wales, in hat-making, shoemaking, glove-making and tailoring was 437,969; of these 14,964 under 15 years, 89,285 between 15 and 20, and 333,117 over 20 years. Many of the smaller branches are not included in these figures. But take the figures as they stand; we then have for England and Wales alone, according to the census of 1861, a total of 1,024,277 persons, about as many as are absorbed by agriculture and cattle breeding. We begin to understand what becomes of the immense quantities of goods conjured up by the magic of machinery, and of the enormous masses of workpeople, which that machinery sets free. The production of wearing apparel is carried on partly in manufactories in whose workrooms there is but a reproduction of that division of labour, the membra disjecta of which were found ready to hand; partly by small master-handicraftsmen; these, however, do not, as formerly, work for individual consumers, but for manufactories and warehouses, and to such an extent that often whole towns and stretches of country carry on certain branches, such as shoemaking, as a speciality; finally, on a very great scale by the so-called domestic workers, who form an external department of the manufactories, warehouses, and even of the workshops of the smaller masters. The raw material, &c., is supplied by mechanical industry, the mass of cheap human material (taillable merci et mis ricorde) is composed of the individuals liberated by mechanical industry and improved agriculture. The manufactures of this class owed their origin chiefly to the capitalist s need of having at hand an army ready equipped to meet any increase of demand. These manufactures, nevertheless, allowed the scattered handicrafts and domestic industries to continue to exist as a broad foundation. The great production of surplus-value in these branches of labour, and the progressive cheapening of their articles, were and are chiefly due to the minimum wages paid, no more than requisite for a miserable vegetation, and to the extension of working-time up to the maximum endurable by the human organism. It was in fact by the cheapness of the human sweat and the human blood, which were converted into commodities, that the markets were constantly being extended, and continue daily to be extended; more especially was this the case with England s colonial markets, where, besides, English tastes and habits prevail. At last the critical point was reached. The basis of the old method, sheer brutality in the exploitation of the workpeople, accompanied more or less by a systematic division of labour, no longer sufficed for the extending markets and for the still more rapidly extending competition of the capitalists. The hour struck for the advent of machinery. The decisively revolutionary machine, the machine which attacks in an equal degree the whole of the numberless branches of this sphere of production, dressmaking, tailoring, shoemaking, sewing, hat-making, and many others, is the sewing-machine. Its immediate effect on the workpeople is like that of all machinery, which, since the rise of modern industry, has seized upon new branches of trade. Children of too tender an age are sent adrift. The wage of the machine hands rises compared with that of the house-workers, many of whom belong to the poorest of the poor. That of the better situated handicraftsman, with whom the machine competes, sinks. The new machine hands are exclusively girls and young women. With the help of mechanical force, they destroy the monopoly that male labour had of the heavier work, and they drive off from the lighter work numbers of old women and very young children. The overpowering competition crushes the weakest of the manual labourers. The fearful increase in death from starvation during the last 10 years in London runs parallel with the extension of machine sewing. The new workwomen turn the machines by hand and foot, or by hand alone, sometimes sitting, sometimes standing, according to the weight, size, and special make of the machine, and expend a great deal of labour-power. Their occupation is unwholesome, owing to the long hours, although in most cases they are not so long as under the old system. Wherever the sewing-machine locates itself in narrow and already over-crowded workrooms, it adds to the unwholesome influences. The revolution in the industrial methods which is the necessary result of the revolution in the instruments of production, is effected by a medley of transition forms. These forms vary according to the extent to which the sewing-machine has become prevalent in one branch, of industry or the other, to the time during which it has been in operation, to the previous condition of the workpeople, to the preponderance of manufacture, of handicrafts or of domestic industry, to the rent of the workrooms, &c. In dressmaking, for instance, where the labour for the most part was already organised, chiefly by simple co-operation, the sewing-machine at first formed merely a new factor in that manufacturing industry. In tailoring, shirtmaking, shoemaking, &c., all the forms are intermingled. Here the factory system proper. There middlemen receive the raw material from the capitalist en chef, and group around their sewing-machines, in chambers and garrets, from 10 to 50 or more workwomen. Finally, as is always the case with machinery when not organised into a system, and when it can also be used in dwarfish proportions, handicraftsman and domestic workers, along with their families, or with a little extra labour from without, make use of their own sewing-machines. The system actually prevalent in England is, that the capitalist concentrates a large number of machines on his premises, and then distributes the produce of those machines for further manipulation amongst the domestic workers. The variety of the transition forms, however, does not conceal the tendency to conversion into the factory system proper. This tendency is nurtured by the very nature of the sewing-machine, the manifold uses of which push on the concentration, under one roof, and one management, of previously separated branches of a trade. It is also favoured by the circumstance that preparatory needlework, and certain other operations, are most conveniently done on the premises where the machine is at work; as well as by the inevitable expropriation of the hand sewers, and of the domestic workers who work with their own machines. This fate has already in part overtaken them. The constantly increasing amount of capital invested in sewing-machines, gives the spur to the production of, and gluts the markets with, machine-made articles, thereby giving the signal to the domestic workers for the sale of their machines. The overproduction of sewing-machines themselves, causes their producers, in bad want of a sale, to let them out for so much a week, thus crushing by their deadly competition the small owners of machines. Constant changes in the construction of the machines, and their ever-increasing cheapness, depreciate day by day the older makes, and allow of their being sold in great numbers, at absurd prices, to large capitalists, who alone can thus employ them at a profit. Finally, the substitution of the steam-engine for man gives in this, as in all similar revolutions, the finishing blow. At first, the use of steam power meets with mere technical difficulties, such as unsteadiness in the machines, difficulty in controlling their speed, rapid wear and tear of the lighter machines, &c., all of which are soon overcome by experience. If, on the one hand, the concentration of many machines in large manufactories leads to the use of steam power, on the other hand, the competition of steam with human muscles hastens on the concentration of workpeople and machines in large factories. Thus England is at present experiencing, not only in the colossal industry of making wearing apparel, but in most of the other trades mentioned above, the conversion of manufacture, of handicrafts, and of domestic work into the factory system, after each of those forms of production, totally changed and disorganised under the influence of modern industry, has long ago reproduced, and even overdone, all the horrors of the factory system, without participating in any of the elements of social progress it contains. This industrial revolution which takes place spontaneously, is artificially helped on by the extension of the Factory Acts to all industries in which women, young persons and children are employed. The compulsory regulation of the working-day as regards its length, pauses, beginning and end, the system of relays of children, the exclusion of all children under a certain age, &c., necessitate on the one hand more machinery and the substitution of steam as a motive power in the place of muscles. On the other hand, in order to make up for the loss of time, an expansion occurs of the means of production used in common, of the furnaces, buildings, &c., in one word, greater concentration of the means of production and a correspondingly greater concourse of workpeople. The chief objection, repeatedly and passionately urged on behalf of each manufacture threatened with the Factory Act, is in fact this, that in order to continue the business on the old scale a greater outlay of capital will be necessary. But as regards labour in the so-called domestic industries and the intermediate forms between them and Manufacture, so soon as limits are put to the working-day and to the employment of children, those industries go to the wall. Unlimited exploitation of cheap labour-power is the sole foundation of their power to compete. One of the essential conditions for the existence of the factory system, especially when the length of the working-day is fixed, is certainty in the result, i.e., the production in a given time of a given quantity of commodities, or of a given useful effect. The statutory pauses in the working-day, moreover, imply the assumption that periodical and sudden cessation of the work does no harm to the article undergoing the process of production. This certainty in the result, and this possibility of interrupting the work are, of course, easier to be attained in the purely mechanical industries than in those in which chemical and physical processes play a part; as, for instance, in the earthenware trade, in bleaching, dyeing, baking, and in most of the metal industries. Wherever there is a workingday without restriction as to length, wherever there is night-work and unrestricted waste of human life, there the slightest obstacle presented by the nature of the work to a change for the better is soon looked upon as an everlasting barrier erected by Nature. No poison kills vermin with more certainty than the Factory Act removes such everlasting barriers. No one made a greater outcry over impossibilities than our friends the earthenware manufacturers. In 1864, however, they were brought under the Act, and within sixteen months every impossibility had vanished. In spite of every prophecy, the cost-price of earthenware did not rise, but the quantity produced did, and to such an extent that the export for the twelve months, ending December, 1865, exceeded in value by 138,628 the average of the preceding three years. In the manufacture of matches it was thought to be an indispensable requirement, that boys, even while bolting their dinner, should go on dipping the matches in melted phosphorus, the poisonous vapour from which rose into their faces. The Factory Act (1864) made the saving of time a necessity, and so forced into existence a dipping machine, the vapour from which could not come in contact with the workers. So, at the present time, in those branches of the lace manufacture not yet subject to the Factory Act, it is maintained that the meal-times cannot be regular owing to the different periods required by the various kinds of lace for drying, which periods vary from three minutes up to an hour and more. To this the Children s Employment Commissioners answer: Hardly had the Act been passed when our friends the manufacturers found out: It is evident that the English legislature, which certainly no one will venture to reproach with being overdosed with genius, has been led by experience to the conclusion that a simple compulsory law is sufficient to enact away all the so-called impediments, opposed by the nature of the process, to the restriction and regulation of the working-day. Hence, on the introduction of the Factory Act into a given industry, a period varying from six to eighteen months is fixed within which it is incumbent on the manufacturers to remove all technical impediments to the working of the Act. Mirabeau s Impossible! ne me dites jamais ce b te de mot! is particularly applicable to modern technology. But though the Factory Acts thus artificially ripen the material elements necessary for the conversion of the manufacturing system into the factory system, yet at the same time, owing to the necessity they impose for greater outlay of capital, they hasten on the decline of the small masters, and the concentration of capital. Besides the purely technical impediments that are removable by technical means, the irregular habits of the workpeople themselves obstruct the regulation of the hours of labour. This is especially the case where piece-wage predominates, and where loss of time in one part of the day or week can be made good by subsequent over-time, or by night-work, a process which brutalises the adult workman, and ruins his wife and children. Although this absence of regularity in the expenditure of labour-power is a natural and rude reaction against the tedium of monotonous drudgery, it originates, also, to a much greater degree from anarchy in production, anarchy that in its turn pre-supposes unbridled exploitation of labour-power by the capitalist. Besides the general periodic changes of the industrial cycle, and the special fluctuations in the markets to which each industry is subject, we may also reckon what is called the season, dependent either on the periodicity of favourable seasons of the year for navigation; or on fashion, and the sudden placing of large orders that have to be executed in the shortest possible time. The habit of giving such orders becomes more frequent with the extension of railways and telegraphs. In those factories and manufactories that are not yet subject to the Factory Acts, the most fearful over-work prevails periodically during what is called the season, in consequence of sudden orders. In the outside department of the factory, of the manufactory, and of the warehouse, the so-called domestic workers, whose employment is at the best irregular, are entirely dependent for their raw material and their orders on the caprice of the capitalist, who, in this industry, is not hampered by any regard for depreciation of his buildings and machinery, and risks nothing by a stoppage of work, but the skin of the worker himself. Here then he sets himself systematically to work to form an industrial reserve force that shall be ready at a moment s notice; during one part of the year he decimates this force by the most inhuman toil, during the other part, he lets it starve for want of work. In the same way as technical impediments, so, too, those usages which have grown with the growth of trade were and still are proclaimed by interested capitalists as obstacles due to the nature of the work. This was a favourite cry of the cotton lords at the time they were first threatened with the Factory Acts. Although their industry more than any other depends on navigation, yet experience has given them the lie. Since then, every pretended obstruction to business has been treated by the Factory inspectors as a mere sham. The thoroughly conscientious investigations of the Children s Employment Commission prove that the effect of the regulation of the hours of work, in some industries, was to spread the mass of labour previously employed more evenly over the whole year [208a] that this regulation was the first rational bridle on the murderous, meaningless caprices of fashion, [208b] caprices that consort so badly with the system of modern industry; that the development of ocean navigation and of the means of communication generally, has swept away the technical basis on which season-work was really supported, and that all other so-called unconquerable difficulties vanish before larger buildings, additional machinery, increase in the number of workpeople employed, and the alterations caused by all these in the mode of conducting the wholesale trade. But for all that, capital never becomes reconciled to such changes and this is admitted over and over again by its own representatives except under the pressure of a General Act of Parliament for the compulsory regulation of the hours of labour. Factory legislation, that first conscious and methodical reaction of society against the spontaneously developed form of the process of production, is, as we have seen, just as much the necessary product of modern industry as cotton yarn, self-actors, and the electric telegraph. Before passing to the consideration of the extension of that legislation in England, we shall shortly notice certain clauses contained in the Factory Acts, and not relating to the hours of work. Apart from their wording, which makes it easy for the capitalist to evade them, the sanitary clauses are extremely meagre, and, in fact, limited to provisions for whitewashing the walls, for insuring cleanliness in some other matters, for ventilation, and for protection against dangerous machinery. In the third book we shall return again to the fanatical opposition of the masters to those clauses which imposed upon them a slight expenditure on appliances for protecting the limbs of their workpeople, an opposition that throws a fresh and glaring light on the Free-trade dogma, according to which, in a society with conflicting interests, each individual necessarily furthers the common weal by seeking nothing but his own personal advantage! One example is enough. The reader knows that during the last 20 years, the flax industry has very much extended, and that, with that extension, the number of scutching mills in Ireland has increased. In 1864 there were in that country 1,800 of these mills. Regularly in autumn and winter women and young persons, the wives, sons, and daughters of the neighbouring small farmers, a class of people totally unaccustomed to machinery, are taken from field labour to feed the rollers of the scutching mills with flax. The accidents, both as regards number and kind, are wholly unexampled in the history of machinery. In one scutching mill, at Kildinan, near Cork, there occurred between 1852 and 1856, six fatal accidents and sixty mutilations; every one of which might have been prevented by the simplest appliances, at the cost of a few shillings. Dr. W. White, the certifying surgeon for factories at Downpatrick, states in his official report, dated the 15th December, 1865: What could possibly show better the character of the capitalist mode of production, than the necessity that exists for forcing upon it, by Acts of Parliament, the simplest appliances for maintaining cleanliness and health? In the potteries the Factory Act of 1864 has whitewashed and cleansed upwards of 200 workshops, after a period of abstinence from any such cleaning, in many cases of 20 years, and in some, entirely, (this is the abstinence of the capitalist!) in which were employed 27,800 artisans, hitherto breathing through protracted days and often nights of labour, a mephitic atmosphere, and which rendered an otherwise comparatively innocuous occupation, pregnant with disease and death. The Act has improved the ventilation very much. At the same time, this portion of the Act strikingly shows that the capitalist mode of production, owing to its very nature, excludes all rational improvement beyond a certain point. It has been stated over and over again that the English doctors are unanimous in declaring that where the work is continuous, 500 cubic feet is the very least space that should be allowed for each person. Now, if the Factory Acts, owing to their compulsory provisions, indirectly hasten on the conversion of small workshops into factories, thus indirectly attacking the proprietary rights of the smaller capitalists, and assuring a monopoly to the great ones, so, if it were made obligatory to provide the proper space for each workman in every workshop, thousands of small employers would, at one full swoop, be expropriated directly! The very root of the capitalist mode of production, i.e., the self-expansion of all capital, large or small, by means of the free purchase and consumption of labour-power, would be attacked. Factory legislation is therefore brought to a deadlock before these 500 cubic feet of breathing space. The sanitary officers, the industrial inquiry commissioners, the factory inspectors, all harp, over and over again, upon the necessity for those 500 cubic feet, and upon the impossibility of wringing them out of capital. They thus, in fact, declare that consumption and other lung diseases among the workpeople are necessary conditions to the existence of capital. Paltry as the education clauses of the Act appear on the whole, yet they proclaim elementary education to be an indispensable condition to the employment of children. The success of those clauses proved for the first time the possibility of combining education and gymnastics with manual labour, and, consequently, of combining manual labour with education and gymnastics. The factory inspectors soon found out by questioning the schoolmasters, that the factory children, although receiving only one half the education of the regular day scholars, yet learnt quite as much and often more. Further information on this point will be found in Senior s speech at the Social Science Congress at Edinburgh in 1863. He there shows, amongst other things, how the monotonous and uselessly long school hours of the children of the upper and middle classes, uselessly add to the labour of the teacher, while he not only fruitlessly but absolutely injuriously, wastes the time, health, and energy of the children. From the Factory system budded, as Robert Owen has shown us in detail, the germ of the education of the future, an education that will, in the case of every child over a given age, combine productive labour with instruction and gymnastics, not only as one of the methods of adding to the efficiency of production, but as the only method of producing fully developed human beings. Modern industry, as we have seen, sweeps away by technical means the manufacturing division of labour, under which each man is bound hand and foot for life to a single detail-operation. At the same time, the capitalistic form of that industry reproduces this same division of labour in a still more monstrous shape; in the factory proper, by converting the workman into a living appendage of the machine; and everywhere outside the Factory, partly by the sporadic use of machinery and machine workers, partly by re-establishing the division of labour on a fresh basis by the general introduction of the labour of women and children, and of cheap unskilled labour. The antagonism between the manufacturing division of labour and the methods of modern industry makes itself forcibly felt. It manifests itself, amongst other ways, in the frightful fact that a great part of the children employed in modern factories and manufactures, are from their earliest years riveted to the most simple manipulations, and exploited for years, without being taught a single sort of work that would afterwards make them of use, even in the same manufactory or factory. In the English letter-press printing trade, for example, there existed formerly a system, corresponding to that in the old manufactures and handicrafts, of advancing the apprentices from easy to more and more difficult work. They went through a course of teaching till they were finished printers. To be able to read and write was for every one of them a requirement of their trade. All this was changed by the printing machine. It employs two sorts of labourers, one grown up, renters, the other, boys mostly from 11 to 17 years of age whose sole business is either to spread the sheets of paper under the machine, or to take from it the printed sheets. They perform this weary task, in London especially, for 14, 15, and 16 hours at a stretch, during several days in the week, and frequently for 36 hours, with only 2 hours rest for meals and sleep. A great part of them cannot read, and they are, as a rule, utter savages and very extraordinary creatures. As soon as they get too old for such child s work, that is about 17 at the latest, they are discharged from the printing establishments. They become recruits of crime. Several attempts to procure them employment elsewhere, were rendered of no avail by their ignorance and brutality, and by their mental and bodily degradation. As with the division of labour in the interior of the manufacturing workshops, so it is with the division of labour in the interior of society. So long as handicraft and manufacture form the general groundwork of social production, the subjection of the producer to one branch exclusively, the breaking up of the multifariousness of his employment, is a necessary step in the development. On that groundwork each separate branch of production acquires empirically the form that is technically suited to it, slowly perfects it, and, so soon as a given degree of maturity has been reached, rapidly crystallises that form. The only thing, that here and there causes a change, besides new raw material supplied by commerce, is the gradual alteration of the instruments of labour. But their form, too, once definitely settled by experience, petrifies, as is proved by their being in many cases handed down in the same form by one generation to another during thousands of years. A characteristic feature is, that, even down into the eighteenth century, the different trades were called mysteries (myst res); into their secrets none but those duly initiated could penetrate. modern industry rent the veil that concealed from men their own social process of production, and that turned the various, spontaneously divided branches of production into so many riddles, not only to outsiders, but even to the initiated. The principle which it pursued, of resolving each process into its constituent movements, without any regard to their possible execution by the hand of man, created the new modern science of technology. The varied, apparently unconnected, and petrified forms of the industrial processes now resolved themselves into so many conscious and systematic applications of natural science to the attainment of given useful effects. Technology also discovered the few main fundamental forms of motion, which, despite the diversity of the instruments used, are necessarily taken by every productive action of the human body; just as the science of mechanics sees in the most complicated machinery nothing but the continual repetition of the simple mechanical powers. Modern industry never looks upon and treats the existing form of a process as final. The technical basis of that industry is therefore revolutionary, while all earlier modes of production were essentially conservative. By means of machinery, chemical processes and other methods, it is continually causing changes not only in the technical basis of production, but also in the functions of the labourer, and in the social combinations of the labour-process. At the same time, it thereby also revolutionises the division of labour within the society, and incessantly launches masses of capital and of workpeople from one branch of production to another. But if modern industry, by its very nature, therefore necessitates variation of labour, fluency of function, universal mobility of the labourer, on the other hand, in its capitalistic form, it reproduces the old division of labour with its ossified particularisations. We have seen how this absolute contradiction between the technical necessities of modern industry, and the social character inherent in its capitalistic form, dispels all fixity and security in the situation of the labourer; how it constantly threatens, by taking away the instruments of labour, to snatch from his hands his means of subsistence, and, by suppressing his detail-function, to make him superfluous, we have seen, too, how this antagonism vents its rage in the creation of that monstrosity, an industrial reserve army, kept in misery in order to be always at the disposal of capital; in the incessant human sacrifices from among the working-class, in the most reckless squandering of labour-power and in the devastation caused by a social anarchy which turns every economic progress into a social calamity. This is the negative side. But if, on the one hand, variation of work at present imposes itself after the manner of an overpowering natural law, and with the blindly destructive action of a natural law that meets with resistance at all points, modern industry, on the other hand, through its catastrophes imposes the necessity of recognising, as a fundamental law of production, variation of work, consequently fitness of the labourer for varied work, consequently the greatest possible development of his varied aptitudes. It becomes a question of life and death for society to adapt the mode of production to the normal functioning of this law. Modern Industry, indeed, compels society, under penalty of death, to replace the detail-worker of to-day, grappled by life-long repetition of one and the same trivial operation, and thus reduced to the mere fragment of a man, by the fully developed individual, fit for a variety of labours, ready to face any change of production, and to whom the different social functions he performs, are but so many modes of giving free scope to his own natural and acquired powers. One step already spontaneously taken towards effecting this revolution is the establishment of technical and agricultural schools, and of coles d enseignement professionnel, in which the children of the working-men receive some little instruction in technology and in the practical handling of the various implements of labour. Though the Factory Act, that first and meagre concession wrung from capital, is limited to combining elementary education with work in the factory, there can be no doubt that when the working-class comes into power, as inevitably it must, technical instruction, both theoretical and practical, will take its proper place in the working-class schools. There is also no doubt that such revolutionary ferments, the final result of which is the abolition of the old division of labour, are diametrically opposed to the capitalistic form of production, and to the economic status of the labourer corresponding to that form. But the historical development of the antagonisms, immanent in a given form of production, is the only way in which that form of production can be dissolved and a new form established. Ne sutor ultra crepidam this nec plus ultra of handicraft wisdom became sheer nonsense, from the moment the watchmaker Watt invented the steam-engine, the barber Arkwright, the throstle, and the working-jeweller, Fulton, the steamship. So long as Factory legislation is confined to regulating the labour in factories, manufactories, &c., it is regarded as a mere interference with the exploiting rights of capital. But when it comes to regulating the so-called home-labour, it is immediately viewed as a direct attack on the patria potestas, on parental authority. The tender-hearted English Parliament long affected to shrink from taking this step. The force of facts, however, compelled it at last to acknowledge that modern industry, in overturning the economic foundation on which was based the traditional family, and the family labour corresponding to it, had also unloosened all traditional family ties. The rights of the children had to be proclaimed. The final report of the Ch. Empl. Comm. of 1866, states: It was not, however, the misuse of parental authority that created the capitalistic exploitation, whether direct or indirect, of children s labour; but, on the contrary, it was the capitalistic mode of exploitation which, by sweeping away the economic basis of parental authority, made its exercise degenerate into a mischievous misuse of power. However terrible and disgusting the dissolution, under the capitalist system, of the old family ties may appear, nevertheless, modern industry, by assigning as it does an important part in the process of production, outside the domestic sphere, to women, to young persons, and to children of both sexes, creates a new economic foundation for a higher form of the family and of the relations between the sexes. It is, of course, just as absurd to hold the Teutonic-Christian form of the family to be absolute and final as it would be to apply that character to the ancient Roman, the ancient Greek, or the Eastern forms which, moreover, taken together form a series in historical development. Moreover, it is obvious that the fact of the collective working group being composed of individuals of both sexes and all ages, must necessarily, under suitable conditions, become a source of humane development; although in its spontaneously developed, brutal, capitalistic form, where the labourer exists for the process of production, and not the process of production for the labourer, that fact is a pestiferous source of corruption and slavery. The necessity for a generalisation of the Factory Acts, for transforming them from an exceptional law relating to mechanical spinning and weaving those first creations of machinery into a law affecting social production as a whole, arose, as we have seen, from the mode in which modern industry was historically developed. In the rear of that industry, the traditional form of manufacture, of handicraft, and of domestic industry, is entirely revolutionised; manufactures are constantly passing into the factory system, and handicrafts into manufactures; and lastly, the spheres of handicraft and of the domestic industries become, in a, comparatively speaking, wonderfully short time, dens of misery in which capitalistic exploitation obtains free play for the wildest excesses. There are two circumstances that finally turn the scale: first, the constantly recurring experience that capital, so soon as it finds itself subject to legal control at one point, compensates itself all the more recklessly at other points; secondly, the cry of the capitalists for equality in the conditions of competition, i.e., for equal restrain on all exploitation of labour. On this point let us listen to two heart-broken cries. Messrs. Cooksley of Bristol, nail and chain, &c., manufacturers, spontaneously introduced the regulations of the Factory Act into their business. Mr. J. Simpson (paper box and bagmaker, London) states before the commissioners of the Ch. Empl. Comm.: Summarising, the Ch. Empl. Comm. says: In its final report the Commission proposes to subject to the Factory Act more than 1,400,000 children, young persons, and women, of which number about one half are exploited in small industries and by the so-called home-work. It says, The Tory Cabinet announced in the Speech from the Throne, on February 5, 1867, that it had framed the proposals of the Industrial Commission of Inquiry into Bills. To get that far, another twenty years of experimentum in corpore vili had been required. Already in 1840 a Parliamentary Commission of Inquiry on the labour of children had been appointed. Its Report, in 1842, unfolded, in the words of Nassau W. Senior, The social conditions having undergone a change, Parliament could not venture to shelve the demands of the Commission of 1862, as it had done those of the Commission of 1840. Hence in 1864, when the Commission had not yet published more than a part of its reports, the earthenware industries (including the potteries), makers of paperhangings, matches, cartridges, and caps, and fustian cutters were made subject to the Acts in force in the textile industries. In the Speech from the Throne, on 5th February, 1867, the Tory Cabinet of the day announced the introduction of Bills, founded on the final recommendations of the Commission, which had completed its labours in 1866. On the 15th August, 1867, the Factory Acts Extension Act, and on the 21st August, the Workshops Regulation Act received the Royal Assent; the former Act having reference to large industries, the latter to small. The former applies to blast-furnaces, iron and copper mills, foundries, machine shops, metal manufactories, gutta-percha works, paper mills, glass-works, tobacco manufactories, letter-press printing (including newspapers), book-binding, in short to all industrial establishments of the above kind, in which 50 individuals or more are occupied simultaneously, and for not less than 100 days during the year. To give an idea of the extent of the sphere embraced by the Workshops Regulation Act in its application, we cite from its interpretation clause, the following passages: Clause 7, which imposes a penalty for employment of children, young persons, and women, contrary to the provisions of the Act, subjects to fines, not only the occupier of the workshop, whether parent or not, but even The Factory Acts Extension Act, which affects the large establishments, derogates from the Factory Act by a crowd of vicious exceptions and cowardly compromises with the masters. The Workshops Regulation Act, wretched in all its details, remained a dead letter in the hands of the municipal and local authorities who were charged with its execution. When, in 1871, Parliament withdrew from them this power, in order to confer it on the Factory Inspectors, to whose province it thus added by a single stroke more than one hundred thousand workshops, and three hundred brickworks, care was taken at the same time not to add more than eight assistants to their already undermanned staff. What strikes us, then, in the English legislation of 1867, is, on the one hand, the necessity imposed on the parliament of the ruling classes, of adopting in principle measures so extraordinary, and on so great a scale, against the excesses of capitalistic exploitation; and on the other hand, the hesitation, the repugnance, and the bad faith, with which it lent itself to the task of carrying those measures into practice. The Inquiry Commission of 1862 also proposed a new regulation of the mining industry, an industry distinguished from others by the exceptional characteristic that the interests of landlord and capitalist there join hands. The antagonism of these two interests had been favourable to Factory legislation, while on the other hand the absence of that antagonism is sufficient to explain the delays and chicanery of the legislation on mines. The Inquiry Commission of 1840 had made revelations so terrible, so shocking, and creating such a scandal all over Europe, that to salve its conscience Parliament passed the Mining Act of 1842, in which it limited itself to forbidding the employment underground in mines of children under 10 years of age and females. Then another Act, The Mines Inspecting Act of 1860, provides that mines shall be inspected by public officers nominated specially for that purpose, and that boys between the ages of 10 and 12 years shall not be employed, unless they have a school certificate, or go to school for a certain number of hours. This Act was a complete dead letter owing to the ridiculously small number of inspectors, the meagreness of their powers, and other causes that will become apparent as we proceed. One of the most recent Blue books on mines is the Report from the Select Committee on Mines, together with &c. Evidence, 23rd July, 1866. This Report is the work of a Parliamentary Committee selected from members of the House of Commons, and authorised to summon and examine witnesses. It is a thick folio volume in which the Report itself occupies only five lines to this effect; that the committee has nothing to say, and that more witnesses must be examined! The mode of examining the witnesses reminds one of the cross-examination of witnesses in English courts of justice, where the advocate tries, by means of impudent, unexpected, equivocal and involved questions, put without connexion, to intimidate, surprise, and confound the witness, and to give a forced meaning to the answers extorted from him. In this inquiry the members of the committee themselves are the cross-examiners, and among them are to be found both mine-owners and mine exploiters; the witnesses are mostly working coal miners. The whole farce is too characteristic of the spirit of capital, not to call for a few extracts from this Report. For the sake of conciseness I have classified them. I may also add that every question and its answer are numbered in the English Blue books. 1. Employment in mines of boys of 10 years and upwards. In the mines the work, inclusive of going and returning, usually lasts 14 or 15 hours, sometimes even from 3, 4 and 5 o clock a.m., till 5 and 6 o clock p.m. (n. 6, 452, 83). The adults work in two shifts, of eight hours each; but there is no alternation with the boys, on account of the expense (n. 80, 203, 204). The younger boys are chiefly employed in opening and shutting the ventilating doors in the various parts of the mine; the older ones are employed on heavier work, in carrying coal, &c. (n. 122, 739, 1747). They work these long hours underground until their 18th or 22nd year, when they are put to miner s work proper (n. 161). Children and young persons are at present worse treated, and harder worked than at any previous period (n. 1663-1667). The miners demand almost unanimously an act of Parliament prohibiting the employment in mines of children under 14. And now Hussey Vivian (himself an exploiter of mines) asks: II. Education. The working miners want a law for the compulsory education of their children, as in factories. They declare the clauses of the Act of 1860, which require a school certificate to be obtained before employing boys of 10 and 12 years of age, to be quite illusory. The examination of the witnesses on this subject is truly droll. III. Employment of women. Since 1842 women are no more employed underground, but are occupied on the surface in loading the coal, &c., in drawing the tubs to the canals and railway waggons, in sorting, &c. Their numbers have considerably increased during the last three or four years. (n. 1727.) They are mostly the wives, daughters, and widows of the working miners, and their ages range from 12 to 50 or 60 years. (ns. 645, 1779.) IV. Coroner s inquests. V. False weights and measures. The workmen demand to be paid weekly instead of fortnightly, and by weight instead of by cubical contents of the tubs; they also demand protection against the use of false weights, &c. (n. 1071.) VI. Inspection of mines. Casualties from explosions are not the only things the workmen suffer from. (n. 234, sqq.) This kind of examination becomes at last too much even for the chairman of the committee, and he interrupts with the observation: A working miner objects to the 17th section of the Act of 1860; he says, Bourgeois examiner, himself a mine-owner: This same bourgeois is not ashamed to put this question: Do you not think that the mine-owner also suffers loss from an explosion? Finally, Are not you workmen in Lancashire able to take care of your own interests without calling in the Government to help you? No. (n. 1042.) In the year 1865 there were 3,217 coal mines in Great Britain, and 12 inspectors. A Yorkshire mine-owner himself calculates (Times, 26th January, 1867), that putting on one side their office work, which absorbs all their time, each mine can be visited but once in ten years by an inspector. No wonder that explosions have increased progressively, both in number and extent (sometimes with a loss of 200-300 men), during the last ten years. These are the beauties of free capitalist production! [This sentence has been added to the English text in conformity with the 4th German edition. Ed.] The very defective Act, passed in 1872, is the first that regulates the hours of labour of the children employed in mines, and makes exploiters and owners, to a certain extent, responsible for so-called accidents. The Royal Commission appointed in 1867 to inquire into the employment in agriculture of children, young persons, and women, has published some very important reports. Several attempts to apply the principles of the Factory Acts, but in a modified form, to agriculture have been made, but have so far resulted in complete failure. All that I wish to draw attention to here is the existence of an irresistible tendency towards the general application of those principles. If the general extension of factory legislation to all trades for the purpose of protecting the working-class both in mind and body has become inevitable, on the other hand, as we have already pointed out, that extension hastens on the general conversion of numerous isolated small industries into a few combined industries carried on upon a large scale; it therefore accelerates the concentration of capital and the exclusive predominance of the factory system. It destroys both the ancient and the transitional forms, behind which the dominion of capital is still in part concealed, and replaces them by the direct and open sway of capital; but thereby it also generalises the direct opposition to this sway. While in each individual workshop it enforces uniformity, regularity, order, and economy, it increases by the immense spur which the limitation and regulation of the working-day give to technical improvement, the anarchy and the catastrophes of capitalist production as a whole, the intensity of labour, and the competition of machinery with the labourer. By the destruction of petty and domestic industries it destroys the last resort of the redundant population, and with it the sole remaining safety-valve of the whole social mechanism. By maturing the material conditions, and the combination on a social scale of the processes of production, it matures the contradictions and antagonisms of the capitalist form of production, and thereby provides, along with the elements for the formation of a new society, the forces for exploding the old one. The revolution called forth by modern industry in agriculture, and in the social relations of agricultural producers, will be investigated later on. In this place, we shall merely indicate a few results by way of anticipation. If the use of machinery in agriculture is for the most part free from the injurious physical effect it has on the factory operative, its action in superseding the labourers is more intense, and finds less resistance, as we shall see later in detail. In the counties of Cambridge and Suffolk, for example, the area of cultivated land has extended very much within the last 20 years (up to 1868), while in the same period the rural population has diminished, not only relatively, but absolutely. In the United States it is as yet only virtually that agricultural machines replace labourers; in other words, they allow of the cultivation by the farmer of a larger surface, but do not actually expel the labourers employed. In 1861 the number of persons occupied in England and Wales in the manufacture of agricultural machines was 1,034, whilst the number of agricultural labourers employed in the use of agricultural machines and steam-engines did not exceed 1,205. In the sphere of agriculture, modern industry has a more revolutionary effect than elsewhere, for this reason, that it annihilates the peasant, that bulwark of the old society, and replaces him by the wage-labourer. Thus the desire for social changes, and the class antagonisms are brought to the same level in the country as in the towns. The irrational, old-fashioned methods of agriculture are replaced by scientific ones. Capitalist production completely tears asunder the old bond of union which held together agriculture and manufacture in their infancy. But at the same time it creates the material conditions for a higher synthesis in the future, viz., the union of agriculture and industry on the basis of the more perfected forms they have each acquired during their temporary separation. Capitalist production, by collecting the population in great centres, and causing an ever-increasing preponderance of town population, on the one hand concentrates the historical motive power of society; on the other hand, it disturbs the circulation of matter between man and the soil, i.e., prevents the return to the soil of its elements consumed by man in the form of food and clothing; it therefore violates the conditions necessary to lasting fertility of the soil. By this action it destroys at the same time the health of the town labourer and the intellectual life of the rural labourer. But while upsetting the naturally grown conditions for the maintenance of that circulation of matter, it imperiously calls for its restoration as a system, as a regulating law of social production, and under a form appropriate to the full development of the human race. In agriculture as in manufacture, the transformation of production under the sway of capital, means, at the same time, the martyrdom of the producer; the instrument of labour becomes the means of enslaving, exploiting, and impoverishing the labourer; the social combination and organisation of labour-processes is turned into an organised mode of crushing out the workman s individual vitality, freedom, and independence. The dispersion of the rural labourers over larger areas breaks their power of resistance while concentration increases that of the town operatives. In modern agriculture, as in the urban industries, the increased productiveness and quantity of the labour set in motion are bought at the cost of laying waste and consuming by disease labour-power itself. Moreover, all progress in capitalistic agriculture is a progress in the art, not only of robbing the labourer, but of robbing the soil; all progress in increasing the fertility of the soil for a given time, is a progress towards ruining the lasting sources of that fertility. The more a country starts its development on the foundation of modern industry, like the United States, for example, the more rapid is this process of destruction. Capitalist production, therefore, develops technology, and the combining together of various processes into a social whole, only by sapping the original sources of all wealth the soil and the labourer.

Economic Manuscripts: Capital Vol. I — Chapter Fifteen

https://www.marxists.org/archive/marx/works/1867-c1/ch15.htm

In considering the labour-process, we began (see Chapter VII.) by treating it in the abstract, apart from its historical forms, as a process between man and Nature. We there stated, If we examine the whole labour-process, from the point of view of its result, it is plain that both the instruments and the subject of labour are means of production, and that the labour itself is productive labour. And in Note 2, same page, we further added: This method of determining, from the standpoint of the labour-process alone, what is productive labour, is by no means directly applicable to the case of the capitalist process of production. We now proceed to the further development of this subject. So far as the labour-process is purely individual, one and the same labourer unites in himself all the functions, that later on become separated. When an individual appropriates natural objects for his livelihood, no one controls him but himself. Afterwards he is controlled by others. A single man cannot operate upon Nature without calling his own muscles into play under the control of his own brain. As in the natural body head and hand wait upon each other, so the labour-process unites the labour of the hand with that of the head. Later on they part company and even become deadly foes. The product ceases to be the direct product of the individual, and becomes a social product, produced in common by a collective labourer, i.e., by a combination of workmen, each of whom takes only a part, greater or less, in the manipulation of the subject of their labour. As the co-operative character of the labour-process becomes more and more marked, so, as a necessary consequence, does our notion of productive labour, and of its agent the productive labourer, become extended. In order to labour productively, it is no longer necessary for you to do manual work yourself; enough, if you are an organ of the collective labourer, and perform one of its subordinate functions. The first definition given above of productive labour, a definition deduced from the very nature of the production of material objects, still remains correct for the collective labourer, considered as a whole. But it no longer holds good for each member taken individually. On the other hand, however, our notion of productive labour becomes narrowed. Capitalist production is not merely the production of commodities, it is essentially the production of surplus-value. The labourer produces, not for himself, but for capital. It no longer suffices, therefore, that he should simply produce. He must produce surplus-value. That labourer alone is productive, who produces surplus-value for the capitalist, and thus works for the self-expansion of capital. If we may take an example from outside the sphere of production of material objects, a schoolmaster is a productive labourer when, in addition to belabouring the heads of his scholars, he works like a horse to enrich the school proprietor. That the latter has laid out his capital in a teaching factory, instead of in a sausage factory, does not alter the relation. Hence the notion of a productive labourer implies not merely a relation between work and useful effect, between labourer and product of labour, but also a specific, social relation of production, a relation that has sprung up historically and stamps the labourer as the direct means of creating surplus-value. To be a productive labourer is, therefore, not a piece of luck, but a misfortune. In Book IV, which treats of the history of the theory, it will be more clearly seen, that the production of surplus-value has at all times been made, by classical political economists, the distinguishing characteristic of the productive labourer. Hence their definition of a productive labourer changes with their comprehension of the nature of surplus-value. Thus the Physiocrats insist that only agricultural labour is productive, since that alone, they say, yields a surplus-value. And they say so because, with them, surplus-value has no existence except in the form of rent. The prolongation of the working-day beyond the point at which the labourer would have produced just an equivalent for the value of his labour-power, and the appropriation of that surplus-labour by capital, this is production of absolute surplus-value. It forms the general groundwork of the capitalist system, and the starting-point for the production of relative surplus-value. The latter presupposes that the working-day is already divided into two parts, necessary labour, and surplus-labour. In order to prolong the surplus-labour, the necessary labour is shortened by methods whereby the equivalent for the wages is produced in less time. The production of absolute surplus-value turns exclusively upon the length of the working-day; the production of relative surplus-value, revolutionises out and out the technical processes of labour, and the composition of society. It therefore presupposes a specific mode, the capitalist mode of production, a mode which, along with its methods, means, and conditions, arises and develops itself spontaneously on the foundation afforded by the formal subjection of labour to capital. In the course of this development, the formal subjection is replaced by the real subjection of labour to capital. It will suffice merely to refer to certain intermediate forms, in which surplus-labour is not extorted by direct compulsion from the producer, nor the producer himself yet formally subjected to capital. In such forms capital has not yet acquired the direct control of the labour-process. By the side of independent producers who carry on their handicrafts and agriculture in the traditional old-fashioned way, there stands the usurer or the merchant, with his usurer s capital or merchant s capital, feeding on them like a parasite. The predominance, in a society, of this form of exploitation excludes the capitalist mode of production; to which mode, however, this form may serve as a transition, as it did towards the close of the Middle Ages. Finally, as is shown by modern domestic industry, some intermediate forms are here and there reproduced in the background of Modern Industry, though their physiognomy is totally changed. If, on the one hand, the mere formal subjection of labour to capital suffices for the production of absolute surplus-value, if, e.g., it is sufficient that handicraftsmen who previously worked on their own account, or as apprentices of a master, should become wage labourers under the direct control of a capitalist; so, on the other hand, we have seen, how the methods of producing relative surplus-value, are, at the same time, methods of producing absolute surplus-value. Nay, more, the excessive prolongation of the working-day turned out to be the peculiar product of Modern Industry. Generally speaking, the specifically capitalist mode of production ceases to be a mere means of producing relative surplus-value, so soon as that mode has conquered an entire branch of production; and still more so, so soon as it has conquered all the important branches. It then becomes the general, socially predominant form of production. As a special method of producing relative surplus-value, it remains effective only, first, in so far as it seizes upon industries that previously were only formally subject to capital, that is, so far as it is propagandist; secondly, in so far as the industries that have been taken over by it, continue to be revolutionised by changes in the methods of production. From one standpoint, any distinction between absolute and relative surplus-value appears illusory. Relative surplus-value is absolute, since it compels the absolute prolongation of the working-day beyond the labour-time necessary to the existence of the labourer himself. Absolute surplus-value is relative, since it makes necessary such a development of the productiveness of labour, as will allow of the necessary labour-time being confined to a portion of the working-day. But if we keep in mind the behaviour of surplus-value, this appearance of identity vanishes. Once the capitalist mode of production is established and become general, the difference between absolute and relative surplus-value makes itself felt, whenever there is a question of raising the rate of surplus-value. Assuming that labour-power is paid for at its value, we are confronted by this alternative: given the productiveness of labour and its normal intensity, the rate of surplus-value can be raised only by the actual prolongation of the working-day; on the other hand, given the length of the working-day, that rise can be effected only by a change in the relative magnitudes of the components of the working-day, viz., necessary labour and surplus-labour; a change which, if the wages are not to fall below the value of labour-power, presupposes a change either in the productiveness or in the intensity of the labour. If the labourer wants all his time to produce the necessary means of subsistence for himself and his race, he has no time left in which to work gratis for others. Without a certain degree of productiveness in his labour, he has no such superfluous time at his disposal; without such superfluous time, no surplus-labour, and therefore no capitalists, no slave-owners, no feudal lords, in one word, no class of large proprietors. Thus we may say that surplus-value rests on a natural basis; but this is permissible only in the very general sense, that there is no natural obstacle absolutely preventing one man from disburdening himself of the labour requisite for his own existence, and burdening another with it, any more, for instance, than unconquerable natural obstacle prevent one man from eating the flesh of another. No mystical ideas must in any way be connected, as sometimes happens, with this historically developed productiveness of labour. It is only after men have raised themselves above the rank of animals, when therefore their labour has been to some extent socialised, that a state of things arises in which the surplus-labour of the one becomes a condition of existence for the other. At the dawn of civilisation the productiveness acquired by labour is small, but so too are the wants which develop with and by the means of satisfying them. Further, at that early period, the portion of society that lives on the labour of others is infinitely small compared with the mass of direct producers. Along with the progress in the productiveness of labour, that small portion of society increases both absolutely and relatively. Besides, capital with its accompanying relations springs up from an economic soil that is the product of a long process of development. The productiveness of labour that serves as its foundation and starting-point, is a gift, not of nature, but of a history embracing thousands of centuries. Apart from the degree of development, greater or less, in the form of social production, the productiveness of labour is fettered by physical conditions. These are all referable to the constitution of man himself (race, &c.), and to surrounding nature. The external physical conditions fall into two great economic classes, (1) Natural wealth in means of subsistence, i.e., a fruitful soil, waters teeming with fish, &c., and (2), natural wealth in the instruments of labour, such as waterfalls, navigable rivers, wood, metal, coal, &c. At the dawn of civilisation, it is the first class that turns the scale; at a higher stage of development, it is the second. Compare, for example, England with India, or in ancient times, Athens and Corinth with the shores of the Black Sea. The fewer the number of natural wants imperatively calling for satisfaction, and the greater the natural fertility of the soil and the favourableness of the climate, so much less is the labour-time necessary for the maintenance and reproduction of the producer. So much greater therefore can be the excess of his labours for others over his labour for himself. Diodorus long ago remarked this in relation to the ancient Egyptians. Nevertheless the grand structures of ancient Egypt are less due to the extent of its population than to the large proportion of it that was freely disposable. Just as the individual labourer can do more surplus-labour in proportion as his necessary labour-time is less, so with regard to the working population. The smaller the part of it which is required for the production of the necessary means of subsistence, so much the greater is the part that can be set to do other work. Capitalist production once assumed, then, all other circumstances remaining the same, and given the length of the working day, the quantity of surplus-labour will vary with the physical conditions of labour, especially with the fertility of the soil. But it by no means follows from this that the most fruitful soil is the most fitted for the growth of the capitalist mode of production. This mode is based on the dominion of man over nature. Where nature is too lavish, she keeps him in hand, like a child in leading-strings. She does not impose upon him any necessity to develop himself. It is not the tropics with their luxuriant vegetation, but the temperate zone, that is the mother-country of capital. It is not the mere fertility of the soil, but the differentiation of the soil, the variety of its natural products, the changes of the seasons, which form the physical basis for the social division of labour, and which, by changes in the natural surroundings, spur man on to the multiplication of his wants, his capabilities, his means and modes of labour. It is the necessity of bringing a natural force under the control of society, of economising, of appropriating or subduing it on a large scale by the work of man s hand, that first plays the decisive part in the history of industry. Examples are, the irrigation works in Egypt, Lombardy, Holland, or in India and Persia where irrigation by means of artificial canals, not only supplies the soil with the water indispensable to it, but also carries down to it, in the shape of sediment from the hills, mineral fertilisers. The secret of the flourishing state of industry in Spain and Sicily under the dominion of the Arabs lay in their irrigation works. Favourable natural conditions alone, give us only the possibility, never the reality, of surplus-labour, nor, consequently, of surplus-value and a surplus-product. The result of difference in the natural conditions of labour is this, that the same quantity of labour satisfies, in different countries, a different mass of requirements, consequently, that under circumstances in other respects analogous, the necessary labour-time is different. These conditions affect surplus-labour only as natural limits, i.e., by fixing the points at which labour for others can begin. In proportion as industry advances, these natural limits recede. In the midst of our West European society, where the labourer purchases the right to work for his own livelihood only by paying for it in surplus-labour, the idea easily takes root that it is an inherent quality of human labour to furnish a surplus-product. But consider, for example, an inhabitant of the eastern islands of the Asiatic Archipelago, where sago grows wild in the forests. Suppose now such an eastern bread-cutter requires 12 working hours a week for the satisfaction of all his wants. Nature s direct gift to him is plenty of leisure time. Before he can apply this leisure time productively for himself, a whole series of historical events is required; before he spends it in surplus-labour for strangers, compulsion is necessary. If capitalist production were introduced, the honest fellow would perhaps have to work six days a week, in order to appropriate to himself the product of one working day. The bounty of Nature does not explain why he would then have to work 6 days a week, or why he must furnish 5 days of surplus-labour. It explains only why his necessary labour-time would be limited to one day a week. But in no case would his surplus-product arise from some occult quality inherent in human labour. Thus, not only does the historically developed social productiveness of labour, but also its natural productiveness, appear to be productiveness of the capital with which that labour is incorporated. Ricardo never concerns himself about the origin of surplus-value. He treats it as a thing inherent in the capitalist mode of production, which mode, in his eyes, is the natural form of social production. Whenever he discusses the productiveness of labour, he seeks in it, not the cause of surplus-value, but the cause that determines the magnitude of that value. On the other hand, his school has openly proclaimed the productiveness of labour to be the originating cause of profit (read: Surplus-value). This at all events is a progress as against the mercantilists who, on their side, derived the excess of the price over the cost of production of the product, from the act of exchange, from the product being sold above its value. Nevertheless, Ricardo s school simply shirked the problem, they did not solve it. In fact these bourgeois economists instinctively saw, and rightly so, that it is very dangerous to stir too deeply the burning question of the origin of surplus-value. But what are we to think of John Stuart Mill, who, half a century after Ricardo, solemnly claims superiority over the mercantilists, by clumsily repeating the wretched evasions of Ricardo s earliest vulgarisers? Mill says: So far, nothing but the old story; but Mill wishing to add something of his own, proceeds: He here confounds the duration of labour-time with the duration of its products. According to this view, a baker whose product lasts only a day, could never extract from his workpeople the same profit, as a machine maker whose products endure for 20 years and more. Of course it is very true, that if a bird s nest did not last longer than the time it takes in building, birds would have to do without nests. This fundamental truth once established, Mill establishes his own superiority over the mercantilists. For Mill then, exchange, buying and selling, those general conditions of capitalist production, are but an incident, and there would always be profits even without the purchase and sale of labour-power! Then follows a splendid example of Mill s method of handling the different historical forms of social production. Strange optical illusion to see everywhere a state of things which as yet exists only exceptionally on our earth. But let us finish Mill is willing to concede, Mill might have gone further and have added, that the labourer who advances to himself not only the necessaries of life but also the means of production, is in reality nothing but his own wage-labourer. He might also have said that the American peasant proprietor is but a serf who does enforced labour for himself instead of for his lord. After thus proving clearly, that even if capitalist production had no existence, still it would always exist, Mill is consistent enough to show, on the contrary, that it has no existence, even when it does exist. In reality, the labourer advances his labour gratuitously to the capitalist during, say one week, in order to receive the market price at the end of the week, &c., and it is this which, according to Mill, transforms him into a capitalist. On the level plain, simple mounds look like hills; and the imbecile flatness of the present bourgeoisie is to be measured by the altitude of its great intellects.

Economic Manuscripts: Capital Vol. I — Chapter Sixteen

https://www.marxists.org/archive/marx/works/1867-c1/ch16.htm

The value of labour-power is determined by the value of the necessaries of life habitually required by the average labourer. The quantity of these necessaries is known at any given epoch of a given society, and can therefore be treated as a constant magnitude. What changes, is the value of this quantity. There are, besides, two other factors that enter into the determination of the value of labour-power. One, the expenses of developing that power, which expenses vary with the mode of production; the other, its natural diversity, the difference between the labour-power of men and women, of children and adults. The employment of these different sorts of labour-power, an employment which is, in its turn, made necessary by the mode of production, makes a great difference in the cost of maintaining the family of the labourer, and in the value of the labour-power of the adult male. Both these factors, however, are excluded in the following investigation. I assume (1) that commodities are sold at their value; (2) that the price of labour-power rises occasionally above its value, but never sinks below it. On this assumption we have seen that the relative magnitudes of surplus-value and of price of labour-power are determined by three circumstances; (1) the length of the working-day, or the extensive magnitude of labour; (2) the normal intensity of labour, its intensive magnitude, whereby a given quantity of labour is expended in a given time; (3) the productiveness of labour, whereby the same quantum of labour yields, in a given time, a greater or less quantum of product, dependent on the degree of development in the conditions of production. Very different combinations are clearly possible, according as one of the three factors is constant and two variable, or two constant and one variable, or lastly, all three simultaneously variable. And the number of these combinations is augmented by the fact that, when these factors simultaneously vary, the amount and direction of their respective variations may differ. In what follows the chief combinations alone are considered. On these assumptions the value of labour-power, and the magnitude of surplus-value, are determined by three laws. (1.) A working day of given length always creates the same amount of value, no matter how the productiveness of labour, and, with it, the mass of the product, and the price of each single commodity produced, may vary. If the value created by a working-day of 12 hours be, say, six shillings, then, although the mass of the articles produced varies with the productiveness of labour, the only result is that the value represented by six shillings is spread over a greater or less number of articles. (2.) Surplus-value and the value of labour-power vary in opposite directions. A variation in the productiveness of labour, its increase or diminution, causes a variation in the opposite direction in the value of labour-power, and in the same direction in surplus-value. The value created by a working day of 12 hours is a constant quantity, say, six shillings. This constant quantity is the sum of the surplus-value plus the value of the labour-power, which latter value the labourer replaces by an equivalent. It is self-evident, that if a constant quantity consists of two parts, neither of them can increase without the other diminishing. Let the two parts at starting be equal; 3 shillings value of labour-power, 3 shillings surplus-value. Then the value of the labour-power cannot rise from three shillings to four, without the surplus-value falling from three shillings to two; and the surplus-value cannot rise from three shillings to four, without the value of labour-power falling from three shillings to two. Under these circumstances, therefore, no change can take place in the absolute magnitude, either of the surplus-value, or of the value of labour-power, without a simultaneous change in their relative magnitudes, i.e., relatively to each other. It is impossible for them to rise or fall simultaneously. Further, the value of labour-power cannot fall, and consequently surplus-value cannot rise, without a rise in the productiveness of labour. For instance, in the above case, the value of the labour-power cannot sink from three shillings to two, unless an increase in the productiveness of labour makes it possible to produce in 4 hours the same quantity of necessaries as previously required 6 hours to produce. On the other hand, the value of the labour-power cannot rise from three shillings to four, without a decrease in the productiveness of labour, whereby eight hours become requisite to produce the same quantity of necessaries, for the production of which six hours previously sufficed. It follows from this, that an increase in the productiveness of labour causes a fall in the value of labour-power and a consequent rise in surplus-value, while, on the other hand, a decrease in such productiveness causes a rise in the value of labour-power, and a fall in surplus-value. In formulating this law, Ricardo overlooked one circumstance; although a change in the magnitude of the surplus-value or surplus-labour causes a change in the opposite direction in the magnitude of the value of labour-power, or in the quantity of necessary labour, it by no means follows that they vary in the same proportion. They do increase or diminish by the same quantity. But their proportional increase or diminution depends on their original magnitudes before the change in the productiveness of labour took place. If the value of the labour-power be 4 shillings, or the necessary labour time 8 hours, and the surplus-value be 2 shillings, or the surplus-labour 4 hours, and if, in consequence of an increase in the productiveness of labour, the value of the labour-power fall to 3 shillings, or the necessary labour to 6 hours, the surplus-value will rise to 3 shillings, or the surplus-labour to 6 hours. The same quantity, 1 shilling or 2 hours, is added in one case and subtracted in the other. But the proportional change of magnitude is different in each case. While the value of the labour-power falls from 4 shillings to 3, i.e., by 1/4 or 25%, the surplus-value rises from 2 shillings to 3, i.e., by 1/2 or 50%. It therefore follows that the proportional increase or diminution in surplus-value, consequent on a given change in the productiveness of labour, depends on the original magnitude of that portion of the working day which embodies itself in surplus-value; the smaller that portion, the greater is the proportional change; the greater that portion, the less is the proportional change. (3.) Increase or diminution in surplus-value is always consequent on, and never the cause of, the corresponding diminution or increase in the value of labour-power. Since the working-day is constant in magnitude, and is represented by a value of constant magnitude, since, to every variation in the magnitude of surplus-value, there corresponds an inverse variation in the value of labour-power, and since the value of labour-power cannot change, except in consequence of a change in the productiveness of labour, it clearly follows, under these conditions, that every change of magnitude in surplus-value arises from an inverse change of magnitude in the value of labour-power. If, then, as we have already seen, there can be no change of absolute magnitude in the value of labour-power, and in surplus-value, unaccompanied by a change in their relative magnitudes, so now it follows that no change in their relative magnitudes is possible, without a previous change in the absolute magnitude of the value of labour-power. According to the third law, a change in the magnitude of surplus-value, presupposes a movement in the value of labour-power, which movement is brought about by a variation in the productiveness of labour. The limit of this change is given by the altered value of labour-power. Nevertheless, even when circumstances allow the law to operate, subsidiary movements may occur. For example: if in consequence of the increased productiveness of labour, the value of labour-power falls from 4 shillings to 3, or the necessary labour time from 8 hours to 6, the price of labour-power may possibly not fall below 3s. 8d., 3s. 6d., or 3s. 2d., and the surplus-value consequently not rise above 3s. 4d., 3s. 6d., or 3s. 10d. The amount of this fall, the lowest limit of which is 3 shillings (the new value of labour-power), depends on the relative weight, which the pressure of capital on the one side, and the resistance of the labourer on the other, throws into the scale. The value of labour-power is determined by the value of a given quantity of necessaries. It is the value and not the mass of these necessaries that varies with the productiveness of labour. It is, however, possible that, owing to an increase of productiveness, both the labourer and the capitalist may simultaneously be able to appropriate a greater quantity of these necessaries, without any change in the price of labour-power or in surplus-value. If the value of labour-power be 3 shillings, and the necessary labour time amount to 6 hours, if the surplus-value likewise be 3 shillings, and the surplus-labour 6 hours, then if the productiveness of labour were doubled without altering the ratio of necessary labour to surplus-labour, there would be no change of magnitude in surplus-value and price of labour-power. The only result would be that each of them would represent twice as many use-values as before; these use-values being twice as cheap as before. Although labour-power would be unchanged in price, it would be above its value. If, however, the price of labour-power had fallen, not to 1s. 6d., the lowest possible point consistent with its new value, but to 2s. 10d. or 2s. 6d., still this lower price would represent an increased mass of necessaries. In this way it is possible with an increasing productiveness of labour, for the price of labour-power to keep on falling, and yet this fall to be accompanied by a constant growth in the mass of the labourer's means of subsistence. But even in such case, the fall in the value of labour-power would cause a corresponding rise of surplus-value, and thus the abyss between the labourer's position and that of the capitalist would keep widening. Ricardo was the first who accurately formulated the three laws we have above stated. But he falls into the following errors: (1) he looks upon the special conditions under which these laws hold good as the general and sole conditions of capitalist production. He knows no change, either in the length of the working-day, or in the intensity of labour; consequently with him there can be only one variable factor, viz., the productiveness of labour; (2), and this error vitiates his analysis much more than (1), he has not, any more than have the other economists, investigated surplus-value as such, i.e., independently of its particular forms, such as profit, rent, &c. He therefore confounds together the laws of the rate of surplus-value and the laws of the rate of profit. The rate of profit is, as we have already said, the ratio of the surplus-value to the total capital advanced; the rate of surplus-value is the ratio of the surplus-value to the variable part of that capital. Assume that a capital C of 500 is made up of raw material, instruments of labour, &c. (c) to the amount of 400; and of wages (v) to the amount of 100; and further, that the surplus-value (s) = 100. Then we have rate of surplus-value s/v = 100/ 100 = 100%. But the rate of profit s/c = 100/ 500 = 20%. It is, besides, obvious that the rate of profit may depend on circumstances that in no way affect the rate of surplus-value. I shall show in Book III. that, with a given rate of surplus-value, we may have any number of rates of profit, and that various rates of surplus-value may, under given conditions, express themselves in a single rate of profit. Increased intensity of labour means increased expenditure of labour in a given time. Hence a working-day of more intense labour is embodied in more products than is one of less intense labour, the length of each day being the same. Increased productiveness of labour also, it is true, will supply more products in a given working-day. But in this latter case, the value of each single product falls, for it costs less labour than before; in the former case, that value remains unchanged, for each article costs the same labour as before. Here we have an increase in the number of products, unaccompanied by a fall in their individual prices: as their number increases, so does the sum of their prices. But in the case of increased productiveness, a given value is spread over a greater mass of products. Hence the length of the working-day being constant, a day's labour of increased intensity will be incorporated in an increased value, and, the value of money remaining unchanged, in more money. The value created varies with the extent to which the intensity of labour deviates from its normal intensity in the society. A given working-day, therefore, no longer creates a constant, but a variable value; in a day of 12 hours of ordinary intensity, the value created is, say 6 shillings, but with increased intensity, the value created may be 7, 8, or more shillings. It is clear that, if the value created by a day's labour increases from, say, 6 to 8 shillings then the two parts into which this value is divided, viz., price of labour-power and surplus-value, may both of them increase simultaneously, and either equally or unequally. They may both simultaneously increase from 3 shillings to 4. Here, the rise in the price of labour-power does not necessarily imply that the price has risen above the value of labour-power. On the contrary, the rise in price may be accompanied by a fall in value. This occurs whenever the rise in the price of labour-power does not compensate for its increased wear and tear. We know that, with transitory exceptions, a change in the productiveness of labour does not cause any change in the value of labour-power, nor consequently in the magnitude of surplus-value, unless the products of the industries affected are articles habitually consumed by the labourers. In the present case this condition no longer applies. For when the variation is either in the duration or in the intensity of labour, there is always a corresponding change in the magnitude of the value created, independently of the nature of the article in which that value is embodied. If the intensity of labour were to increase simultaneously and equally in every branch of industry, then the new and higher degree of intensity would become the normal degree for the society, and would therefore cease to be taken account of. But still, even then, the intensity of labour would be different in different countries, and would modify the international application of the law of value. The more intense working-day of one nation would be represented by a greater sum of money than would the less intense day of another nation. The working-day may vary in two ways. It may be made either longer or shorter. From our present data, and within the limits of the assumptions made on p. 487 [v. 35 MECW p. 520] we obtain the following laws: (1.) The working-day creates a greater or less amount of value in proportion to its length thus, a variable and not a constant quantity of value. (2.) Every change in the relation between the magnitudes of surplus-value and of the value of labour-power arises from a change in the absolute magnitude of the surplus-labour, and consequently of the surplus-value. (3.) The absolute value of labour-power can change only in consequence of the reaction exercised by the prolongation of surplus-labour upon the wear and tear of labour-power. Every change in this absolute value is therefore the effect, but never the cause, of a change in the magnitude of surplus-value. We begin with the case in which the working-day is shortened. (1.) A shortening of the working-day under the conditions given above, leaves the value of labour-power, and with it, the necessary labour time, unaltered. It reduces the surplus-labour and surplus-value. Along with the absolute magnitude of the latter, its relative magnitude also falls, i.e., its magnitude relatively to the value of labour-power whose magnitude remains unaltered. Only by lowering the price of labour-power below its value could the capitalist save himself harmless. All the usual arguments against the shortening of the working-day, assume that it takes place under the conditions we have here supposed to exist; but in reality the very contrary is the case: a change in the productiveness and intensity of labour either precedes, or immediately follows, a shortening of the working-day. (2.) Lengthening of the working-day. Let the necessary labour time be 6 hours, or the value of labour-power 3 shillings; also let the surplus-labour be 6 hours or the surplus-value 3 shillings. The whole working-day then amounts to 12 hours and is embodied in a value of 6 shillings. If, now, the working-day be lengthened by 2 hours and the price of labour-power remain unaltered, the surplus-value increases both absolutely and relatively. Although there is no absolute change in the value of labour-power, it suffers a relative fall. Under the conditions assumed in 1. there could not be a change of relative magnitude in the value of labour-power without a change in its absolute magnitude. Here, on the contrary, the change of relative magnitude in the value of labour-power is the result of the change of absolute magnitude in surplus-value. Since the value in which a day's labour is embodied, increases with the length of that day, it is evident that the surplus-value and the price of labour-power may simultaneously increase, either by equal or unequal quantities. This simultaneous increase is therefore possible in two cases, one, the actual lengthening of the working-day, the other, an increase in the intensity of labour unaccompanied by such lengthening. When the working-day is prolonged, the price of labour-power may fall below its value, although that price be nominally unchanged or even rise. The value of a day's labour-power is, as will be remembered, estimated from its normal average duration, or from the normal duration of life among the labourers, and from corresponding normal transformations of organised bodily matter into motion, in conformity with the nature of man. Up to a certain point, the increased wear and tear of labour-power, inseparable from a lengthened working-day, may be compensated by higher wages. But beyond this point the wear and tear increases in geometrical progression, and every condition suitable for the normal reproduction and functioning of labour-power is suppressed. The price of labour-power and the degree of its exploitation cease to be commensurable quantities. It is obvious that a large number of combinations are here possible. Any two of the factors may vary and the third remain constant, or all three may vary at once. They may vary either in the same or in different degrees, in the same or in opposite directions, with the result that the variations counteract one another, either wholly or in part. Nevertheless the analysis of every possible case is easy in view of the results given in I., II., and III. The effect of every possible combination may be found by treating each factor in turn as variable, and the other two constant for the time being. We shall, therefore, notice, and that briefly, but two important cases. In speaking of diminishing productiveness of labour, we here refer to diminution in those industries whose products determine the value of labour-power; such a diminution, for example, as results from decreasing fertility of the soil, and from the corresponding dearness of its products. Take the working-day at 12 hours and the value created by it at 6 shillings, of which one half replaces the value of the labour-power, the other forms the surplus-value. Suppose, in consequence of the increased dearness of the products of the soil, that the value of labour-power rises from 3 shillings to 4, and therefore the necessary labour time from 6 hours to 8. If there be no change in the length of the working-day, the surplus-labour would fall from 6 hours to 4, the surplus-value from 3 shillings to 2. If the day be lengthened by 2 hours, i.e., from 12 hours to 14, the surplus-labour remains at 6 hours, the surplus-value at 3 shillings [note], but the surplus-value decreases compared with the value of labour-power, as measured by the necessary labour time. If the day be lengthened by 4 hours, viz., from 12 hours to 16, the proportional magnitudes of surplus-value and value of labour-power, of surplus-labour and necessary labour, continue unchanged, but the absolute magnitude of surplus-value rises from 3 shillings to 4, that of the surplus-labour from 6 hours to 8, an increment of 33 1/3%. Therefore, with diminishing productiveness of labour and a simultaneous lengthening of the working-day, the absolute magnitude of surplus-value may continue unaltered, at the same time that its relative magnitude diminishes; its relative magnitude may continue unchanged, at the same time that its absolute magnitude increases; and, provided the lengthening of the day be sufficient, both may increase. In the period between 1799 and 1815 the increasing price of provisions led in England to a nominal rise in wages, although the real wages, expressed in the necessaries of life, fell. From this fact West and Ricardo drew the conclusion, that the diminution in the productiveness of agricultural labour had brought about a fall in the rate of surplus-value, and they made this assumption of a fact that existed only in their imaginations, the starting-point of important investigations into the relative magnitudes of wages, profits, and rent. But, as a matter of fact, surplus-value had at that time, thanks to the increased intensity of labour, and to the prolongation of the working-day, increased both in absolute and relative magnitude. This was the period in which the right to prolong the hours of labour to an outrageous extent was established; the period that was especially characterised by an accelerated accumulation of capital here, by pauperism there. Increased productiveness and greater intensity of labour, both have a like effect. They both augment the mass of articles produced in a given time. Both, therefore, shorten that portion of the working-day which the labourer needs to produce his means of subsistence or their equivalent. The minimum length of the working-day is fixed by this necessary but contractile portion of it. If the whole working-day were to shrink to the length of this portion, surplus-labour would vanish, a consummation utterly impossible under the r gime of capital. Only by suppressing the capitalist form of production could the length of the working-day be reduced to the necessary labour time. But, even in that case, the latter would extend its limits. On the one hand, because the notion of means of subsistence would considerably expand, and the labourer would lay claim to an altogether different standard of life. On the other hand, because a part of what is now surplus-labour, would then count as necessary labour; I mean the labour of forming a fund for reserve and accumulation. The more the productiveness of labour increases, the more can the working-day be shortened; and the more the working-day is shortened, the more can the intensity of labour increase. From a social point of view, the productiveness increases in the same ratio as the economy of labour, which, in its turn, includes not only economy of the means of production, but also the avoidance of all useless labour. The capitalist mode of production, while on the one hand, enforcing economy in each individual business, on the other hand, begets, by its anarchical system of competition, the most outrageous squandering of labour-power and of the social means of production, not to mention the creation of a vast number of employments, at present indispensable, but in themselves superfluous. The intensity and productiveness of labour being given, the time which society is bound to devote to material production is shorter, and as a consequence, the time at its disposal for the free development, intellectual and social, of the individual is greater, in proportion as the work is more and more evenly divided among all the able-bodied members of society, and as a particular class is more and more deprived of the power to shift the natural burden of labour from its own shoulders to those of another layer of society. In this direction, the shortening of the working-day finds at last a limit in the generalisation of labour. In capitalist society spare time is acquired for one class by converting the whole life-time of the masses into labour time.

Economic Manuscripts: Capital Vol. I - Chapter Seventeen

https://www.marxists.org/archive/marx/works/1867-c1/ch17.htm

We have seen that the rate of surplus-value is represented by the following formulae: The two first of these formulae represent, as a ratio of values, that which, in the third, is represented as a ratio of the times during which those values are produced. These formulae, supplementary the one to the other, are rigorously definite and correct. We therefore find them substantially, but not consciously, worked out in classical Political Economy. There we meet with the following derivative formulae. One and the same ratio is here expressed as a ratio of labour-times, of the values in which those labour-times are embodied, and of the products in which those values exist. It is of course understood that, by Value of the Product, is meant only the value newly created in a working-day, the constant part of the value of the product being excluded. In all of these formulae (II.), the actual degree of exploitation of labour, or the rate of surplus-value, is falsely expressed. Let the working-day be 12 hours. Then, making the same assumptions as in former instances, the real degree of exploitation of labour will be represented in the following proportions. 6 hours surplus-labour=Surplus-value of 3 sh.= 100% 6 hours necessary labourVariable Capital of 3 sh. From formulae II. we get very differently, These derivative formulae express, in reality, only the proportion in which the working-day, or the value produced by it, is divided between capitalist and labourer. If they are to be treated as direct expressions of the degree of self-expansion of capital, the following erroneous law would hold good: Surplus-labour or surplus-value can never reach 100%. Since the surplus-labour is only an aliquot part of the working-day, or since surplus-value is only an aliquot part of the value created, the surplus-labour must necessarily be always less than the working-day, or the surplus-value always less than the total value created. In order, however, to attain the ratio of 100:100 they must be equal. In order that the surplus-labour may absorb the whole day (i.e., an average day of any week or year), the necessary labour must sink to zero. But if the necessary labour vanish, so too does the surplus-labour, since it is only a function of the former. The ratio Surplus-labourorSurplus-value Working-dayValue created The favorite method of treating the working-day as constant in magnitude became, through the use of formulae II., a fixed usage, because in them surplus-labour is always compared with a working-day of given length. The same holds good when the repartition of the value produced is exclusively kept in sight. The working-day that has already been realized in given value, must necessarily be a day of given length. The habit of representing surplus-value and value of labour-power as fractions of the value created a habit that originates in the capitalist mode of production itself, and whose import will hereafter be disclosed conceals the very transaction that characterizes capital, namely the exchange of variable capital for living labour-power, and the consequent exclusion of the labourer from the product. Instead of the real fact, we have false semblance of an association, in which labourer and capitalist divide the product in proportion to the different elements which they respectively contribute towards its formation. Moreover, the formulae II. can at any time be reconverted into formulae I. If, for instance, we have Surplus-labour of 6 hours Working-day of 12 hours There is a third formula which I have occasionally already anticipated; it is After the investigations we have given above, it is no longer possible to be misled, by the formula Unpaid labour, Paid labour The capitalist pays the value, so far as price coincides with value, of the labour-power, and receives in exchange the disposal of the living labour-power itself. His usufruct is spread over two periods. During one the labourer produces a value that is only equal to the value of his labour-power; he produces its equivalent. Thus the capitalist receives in return for his advance of the price of the labour-power, a product ready made in the market. During the other period, the period of surplus-labour, the usufruct of the labour-power creates a value for the capitalist, that costs him no equivalent. This expenditure of labour-power comes to him gratis. In this sense it is that surplus-labour can be called unpaid labour. Capital, therefore, is not only, as Adam Smith says, the command over labour. It is essentially the command over unpaid labour. All surplus-value, whatever particular form (profit, interest, or rent), it may subsequently crystallize into, is in substance the materialization of unpaid labour. The secret of the self-expansion of capital resolves itself into having the disposal of a definite quantity of other people s unpaid labour.

Economic Manuscripts: Capital Vol. I - Chapter Eighteen

https://www.marxists.org/archive/marx/works/1867-c1/ch18.htm

On the surface of bourgeois society the wage of the labourer appears as the price of labour, a certain quantity of money that is paid for a certain quantity of labour. Thus people speak of the value of labour and call its expression in money its necessary or natural price. On the other hand they speak of the market-prices of labour, i.e., prices oscillating above or below its natural price. But what is the value of a commodity? The objective form of the social labour expended in its production. And how do we measure the quantity of this value? By the quantity of the labour contained in it. How then is the value, e.g., of a 12 hour working-day to be determined? By the 12 working-hours contained in a working-day of 12 hours, which is an absurd tautology. In order to be sold as a commodity in the market, labour must at all events exist before it is sold. But, could the labourer give it an independent objective existence, he would sell a commodity and not labour. Apart from these contradictions, a direct exchange of money, i.e., of realized labour, with living labour would either do away with the law of value which only begins to develop itself freely on the basis of capitalist production, or do away with capitalist production itself, which rests directly on wage-labour. The working-day of 12 hours embodies itself, e.g., in a money-value of 6s. Either equivalents are exchanged, and then the labourer receives 6s, for 12 hours labour; the price of his labour would be equal to the price of his product. In this case he produces no surplus-value for the buyer of his labour, the 6s. are not transformed into capital, the basis of capitalist production vanishes. But it is on this very basis that he sells his labour and that his labour is wage-labour. Or else he receives for 12 hours labour less than 6s., i.e., less than 12 hours labour. Twelve hours labour are exchanged against 10, 6, &c., hours labour. This equalization of unequal quantities not merely does away with the determination of value. Such a self-destructive contradiction cannot be in any way even enunciated or formulated as a law. It is of no avail to deduce the exchange of more labour against less, from their difference of form, the one being realized, the other living. This is the more absurd as the value of a commodity is determined not by the quantity of labour actually realized in it, but by the quantity of living labour necessary for its production. A commodity represents, say, 6 working-hours. If an invention is made by which it can be produced in 3 hours, the value, even of the commodity already produced, falls by half. It represents now 3 hours of social labour instead of the 6 formerly necessary. It is the quantity of labour required for its production, not the realized form of that labour, by which the amount of the value of a commodity is determined. That which comes directly face to face with the possessor of money on the market, is in fact not labour, but the labourer. What the latter sells is his labour-power. As soon as his labour actually begins, it has already ceased to belong to him; it can therefore no longer be sold by him. Labour is the substance, and the immanent measure of value, but has itself no value. In the expression value of labour, the idea of value is not only completely obliterated, but actually reversed. It is an expression as imaginary as the value of the earth. These imaginary expressions, arise, however, from the relations of production themselves. They are categories for the phenomenal forms of essential relations. That in their appearance things often represent themselves in inverted form is pretty well known in every science except Political Economy. Classical Political Economy borrowed from every-day life the category price of labour without further criticism, and then simply asked the question, how is this price determined? It soon recognized that the change in the relations of demand and supply explained in regard to the price of labour, as of all other commodities, nothing except its changes i.e., the oscillations of the market-price above or below a certain mean. If demand and supply balance, the oscillation of prices ceases, all other conditions remaining the same. But then demand and supply also cease to explain anything. The price of labour, at the moment when demand and supply are in equilibrium, is its natural price, determined independently of the relation of demand and supply. And how this price is determined is just the question. Or a larger period of oscillations in the market-price is taken, e.g., a year, and they are found to cancel one the other, leaving a mean average quantity, a relatively constant magnitude. This had naturally to be determined otherwise than by its own compensating variations. This price which always finally predominates over the accidental market-prices of labour and regulates them, this necessary price (Physiocrats) or natural price of labour (Adam Smith) can, as with all other commodities, be nothing else than its value expressed in money. In this way Political Economy expected to penetrate athwart the accidental prices of labour, to the value of labour. As with other commodities, this value was determined by the cost of production. But what is the cost of production of the labourer, i.e., the cost of producing or reproducing the labourer himself? This question unconsciously substituted itself in Political Economy for the original one; for the search after the cost of production of labour as such turned in a circle and never left the spot. What economists therefore call value of labour, is in fact the value of labour-power, as it exists in the personality of the labourer, which is as different from its function, labour, as a machine is from the work it performs. Occupied with the difference between the market-price of labour and its so-called value, with the relation of this value to the rate of profit, and to the values of the commodities produced by means of labour, &c., they never discovered that the course of the analysis had led not only from the market-prices of labour to its presumed value, but had led to the resolution of this value of labour itself into the value of labour-power. Classical economy never arrived at a consciousness of the results of its own analysis; it accepted uncritically the categories value of labour, natural price of labour, &c., as final and as adequate expressions for the value-relation under consideration, and was thus led, as will be seen later, into inextricable confusion and contradiction, while it offered to the vulgar economists a secure basis of operations for their shallowness, which on principle worships appearances only. Let us next see how value (and price) of labour-power, present themselves in this transformed condition as wages. We know that the daily value of labour-power is calculated upon a certain length of the labourer s life, to which, again, corresponds a certain length of working-day. Assume the habitual working-day as 12 hours, the daily value of labour-power as 3s., the expression in money of a value that embodies 6 hours of labour. If the labourer receives 3s., then he receives the value of his labour-power functioning through 12 hours. If, now, this value of a day s labour-power is expressed as the value of a day s labour itself, we have the formula: Twelve hours labour has a value of 3s. The value of labour-power thus determines the value of labour, or, expressed in money, its necessary price. If, on the other hand, the price of labour-power differs from its value, in like manner the price of labour differs from its so-called value. As the value of labour is only an irrational expression for the value of labour-power, it follows, of course, that the value of labour must always be less than the value it produces, for the capitalist always makes labour-power work longer than is necessary for the reproduction of its own value. In the above example, the value of the labour-power that functions through 12 hours is 3s., a value for the reproduction of which 6 hours are required. The value which the labour-power produces is, on the other hand, 6s., because it, in fact, functions during 12 hours, and the value it produces depends, not on its own value, but on the length of time it is in action. Thus, we have a result absurd at first sight that labour which creates a value of 6s. possesses a value of 3s. We see, further: The value of 3s. by which a part only of the working-day i.e., 6 hours labour-is paid for, appears as the value or price of the whole working-day of 12 hours, which thus includes 6 hours unpaid for. The wage form thus extinguishes every trace of the division of the working-day into necessary labour and surplus-labour, into paid and unpaid labour. All labour appears as paid labour. In the corv e, the labour of the worker for himself, and his compulsory labour for his lord, differ in space and time in the clearest possible way. In slave labour, even that part of the working-day in which the slave is only replacing the value of his own means of existence, in which, therefore, in fact, he works for himself alone, appears as labour for his master. All the slave s labour appears as unpaid labour. In wage labour, on the contrary, even surplus-labour, or unpaid labour, appears as paid. There the property-relation conceals the labour of the slave for himself; here the money-relation conceals the unrequited labour of the wage labourer. Hence, we may understand the decisive importance of the transformation of value and price of labour-power into the form of wages, or into the value and price of labour itself. This phenomenal form, which makes the actual relation invisible, and, indeed, shows the direct opposite of that relation, forms the basis of all the juridical notions of both labourer and capitalist, of all the mystifications of the capitalistic mode of production, of all its illusions as to liberty, of all the apologetic shifts of the vulgar economists. If history took a long time to get at the bottom of the mystery of wages, nothing, on the other hand, is more easy to understand than the necessity, the raison d etre, of this phenomenon. The exchange between capital and labour at first presents itself to the mind in the same guise as the buying and selling of all other commodities. The buyer gives a certain sum of money, the seller an article of a nature different from money. The jurist s consciousness recognizes in this, at most, a material difference, expressed in the juridically equivalent formula: Do ut des, do ut facias, facio ut des, facio ut facias. Furthermore, exchange-value and use-value, being intrinsically incommensurable magnitudes, the expressions value of labour, price of labour, do not seem more irrational than the expressions value of cotton, price of cotton. Moreover, the labourer is paid after he has given his labour. In its function of means of payment, money realizes subsequently the value or price of the article supplied i.e., in this particular case, the value or price of the labour supplied. Finally, the use-value supplied by the labourer to the capitalist is not, in fact, his labour-power, but its function, some definite useful labour, the work of tailoring, shoemaking, spinning, &c. That this same labour is, on the other hand, the universal value-creating element, and thus possesses a property by which it differs from all other commodities, is beyond the cognizance of the ordinary mind. Let us put ourselves in the place of the labourer who receives for 12 hours labour, say the value produced by 6 hours labour, say 3s. For him, in fact, his 12 hours labour is the means of buying the 3s. The value of his labour-power may vary, with the value of his usual means of subsistence, from 3 to 4 shillings, or from 3 to 2 shillings; or, if the value of his labour-power remains constant, its price may, in consequence of changing relations of demand and supply, rise to 4s. or fall to 2s. He always gives 12 hours of labour. Every change in the amount of the equivalent that he receives appears to him, therefore, necessarily as a change in the value or price of his 12 hours work. This circumstance misled Adam Smith, who treated the working-day as a constant quantity, to the assertion that the value of labour is constant, although the value of the means of subsistence may vary, and the same working-day, therefore, may represent itself in more or less money for the labourer. Let us consider, on the other hand, the capitalist. He wishes to receive as much labour as possible for as little money as possible. Practically, therefore, the only thing that interests him is the difference between the price of labour-power and the value which its function creates. But, then, he tries to buy all commodities as cheaply as possible, and always accounts for his profit by simple cheating, by buying under, and selling over the value. Hence, he never comes to see that, if such a thing as the value of labour really existed, and he really paid this value, no capital would exist, his money would not be turned into capital. Moreover, the actual movement of wages presents phenomena which seem to prove that not the value of labour-power is paid, but the value of its function, of labour itself. We may reduce these phenomena to two great classes: 1.) Change of wages with the changing length of the working-day. One might as well conclude that not the value of a machine is paid, but that of its working, because it costs more to hire a machine for a week than for a day. 2.) The individual difference in the wages of different labourers who do the same kind of work. We find this individual difference, but are not deceived by it, in the system of slavery, where, frankly and openly, without any circumlocution, labour-power itself is sold. Only, in the slave system, the advantage of a labour-power above the average, and the disadvantage of a labour-power below the average, affects the slave-owner; in the wage-labour system, it affects the labourer himself, because his labour-power is, in the one case, sold by himself, in the other, by a third person. For the rest, in respect to the phenomenal form, value and price of labour, or wages, as contrasted with the essential relation manifested therein, viz., the value and price of labour-power, the same difference holds that holds in respect to all phenomena and their hidden substratum. The former appear directly and spontaneously as current modes of thought; the latter must first be discovered by science. Classical Political Economy nearly touches the true relation of things, without, however, consciously formulating it. This it cannot, so long as it sticks in its bourgeois skin.

Economic Manuscripts: Capital Vol. I - Chapter Nineteen

https://www.marxists.org/archive/marx/works/1867-c1/ch19.htm