## Foreword

M. Proudhon has the misfortune of being peculiarly
misunderstood in Europe. In France, he has the right to be a bad economist,
because he is reputed to be a good German philosopher. In Germany, he has
the right to be a bad philosopher, because he is reputed to be one of the
ablest French economists. Being both German and economist at the same time,
we desire to protest against this double error.

The reader will understand that in this thankless task we have
often had to abandon our criticism of M. Proudhon in order to criticize
German philosophy, and at the same time to give some observations on political
economy.

Karl Marx

Brussels, June 15, 1847

M. Proudhon's work is not just a treatise on political economy, an ordinary
book; it is a bible. "Mysteries", "Secrets Wrested from the Bosom of God",
"Revelations" – it lacks nothing. But as prophets are discussed nowadays
more conscientiously than profane writers, the reader must resign himself
to going with us through the arid and gloomy eruditions of "Genesis", in
order to ascend later, with M. Proudhon, into the ethereal and fertile
realm of super-socialism. (See Proudhon, Philosophy of Poverty, Prologue,
p.III, line 20.)

## Preface to the First German Edition

The present work was produced in the winter of
1846-47, at a time when Marx had cleared up for himself the basic features
of his new historical and economic outlook. Proudhon’s Système
des contradictions économiques, ou Philosophie de la misère,
which had just appeared, gave him the opportunity to develop these basic
features, setting them against the views of a man who, from then on, was
to occupy the most important place among living French socialists. Since
the time in Paris when the two of them had often spent whole nights discussing
economic questions, their paths had increasingly diverged: Proudhon’s book
proved that there was already an unbridgeable gulf between them. To ignore
it was at that time impossible, and so Marx put on record the irreparable
rupture in this reply of his.

Marx’s general opinion of Proudhon is to be found in the article which appeared in the Berlin Social-Demokrat
Nos 16, 17 and 18 for 1865. It was the only article Marx wrote for that
paper; Herr von Schweitzer’s attempts to guide it along feudal and government
lines, which became evident soon afterwards, compelled us to publicly terminate
our collaboration after only a few weeks. [1]

For Germany, the present work has at this precise moment a significance
which Marx himself never imagined. How could he have known that, in trouncing
Proudhon, he was hitting Rodbertus, the idol of the careerists of today,
who was unknown to him even by name at that time?

This is not the place to deal with relations between Marx and
Rodbertus; an opportunity for that is sure to present itself to me very
soon. [2] Suffice it to note here that when Rodbertus
accuses Marx of having “plundered” him and of having “freely used in his
Capital without quoting him” his work Zur Erkenntnis, he
allows himself to indulge in an act of slander which is only explicable
by the irksomeness of unrecognised genius and by his remarkable ignorance
of things taking place outside Prussia, and especially of socialist and
economic literature. Neither these charges, nor the above-mentioned work
by Rodbertus ever came to Marx’s sight; all he knew of Rodbertus was the
three Sociale Briefe and even these certainly not before 1858 or
1859.

With greater reason Rodbertus asserts in these letters that he
had already discovered “Proudhon’s constituted value” before Proudhon;
but here again it is true he erroneously flatters himself with being the
first discoverer. In any case, he is thus one of the targets of
criticism in the present work, and this compels me to deal briefly with
his “fundamental” piece: Zur Erkenntnis unsrer staatswirthschaftlichen
Zustände, 1842, insofar as this brings forth anticipations of
Proudhon as well as the communism of Weitling likewise (again unconsciously)
contained in it.

Insofar as modern socialism, no matter of what tendency, starts
out from bourgeois political economy, it almost without exception takes
up the Ricardian theory of value. The two propositions which Ricardo proclaimed
in 1817 right at the beginning of his Principles,

1) that the value
of any commodity is purely and solely determined by the quantity of labour
required for its production, and

2) that the product of the entire social
labour is divided among the three classes: landowners (rent), capitalists
(profit) and workers (wages)

These two propositions had ever since 1821
been utilised in England for socialist conclusions [3],
and in part with such pointedness and resolution that this literature,
which had then almost been forgotten and was to a large extent only rediscovered
by Marx, remained unsurpassed until the appearance of Capital. About
this another time. If, therefore, in 1842 Rodbertus for his part drew socialist
conclusions from the above propositions, that was certainly a very considerable
step forward for a German at that time, but it could rank as a new discovery
only for Germany at best. That such an application of the Ricardian theory
was far from new was proved by Marx against Proudhon, who suffered from
a similar conceit.

"Anyone who is in any way familiar with the trend of political
economy in England cannot fail to know that almost all the socialists in
that country have, at different periods, proposed the equalitarian
(i.e. socialist) application of Ricardian theory. We could quote for M.
Proudhon: Hodgskin, Political Economy, 1827; William Thompson, An
Inquiry into the Principles of the Distribution of Wealth Most Conducive
to Human Happiness, 1824; T. R. Edmonds, Practical Moral and Political
Economy, 1828, etc., etc., and four pages more of etc. We shall content
ourselves with listening to an English Communist, Mr. Bray ... in his remarkable
work, Labour’s Wrongs and Labour’s Remedy, Leeds, 1839.”

And the
quotations given here from Bray on their own put an end to a good part
of the priority claimed by Rodbertus.

At that time Marx had never yet entered the reading room of the
British Museum. Apart from the libraries of Paris and Brussels, apart from
my books and extracts, he had only examined such books as were obtainable
in Manchester during a six-week journey to England we made together in
the summer of 1845. The literature in question was, therefore, by no means
so inaccessible in the forties as it may be now. If, all the same, it always
remained unknown to Rodbertus, that is to be ascribed solely to his Prussian
local bigotry. He is the actual founder of specifically Prussian socialism
and is now at last recognised as such.

However, even in his beloved Prussia, Rodbertus was not to remain
undisturbed. In 1859, Marx’s A Contribution to the Critique of Political
Economy, Part I, was published in Berlin. Therein, among the economists’
objections to Ricardo, the following was put forward as the second objection
(p. 40):

“If the exchange value of a product equals the labour time contained
in the product, then the exchange value of a working day is equal to the
product it yields, in other words, wages must be equal to the product of
labour. But in fact the opposite is true."

On this there was the following
note:

“This objection, which was advanced against Ricardo by economists,
was later taken up by socialists. Assuming that the formula was theoretically
sound, they alleged that practice stood in conflict with the theory and
demanded that bourgeois society should draw the practical conclusions supposedly
arising from its theoretical principles. In this way at least English socialists
turned Ricardo’s formula of exchange value against political economy."

In the same note there was a reference to Marx’s Misère de la
philosophie, which was then obtainable in all the bookshops.

Rodbertus, therefore, had sufficient opportunity of convincing
himself whether his discoveries of 1842 were really new. Instead he proclaims
them again and again and regards them as so incomparable that it never
occurs to him that Marx might have drawn his conclusions from Ricardo independently,
just as well as Rodbertus himself. Absolutely impossible! Marx had “plundered"
him – the man whom the same Marx had offered every opportunity to convince
himself how long before both of them these conclusions, at least in the
crude form which they still have in the case of Rodbertus, had previously
been enunciated in England!

The simplest socialist application of the Ricardian theory is
indeed that given above. It has led in many cases to insights into the
origin and nature of surplus value which go far beyond Ricardo, as in the
case of Rodbertus among others. Quite apart from the fact that on this
matter he nowhere presents anything which has not already been said at
least as well, before him, his presentation suffers like those of his predecessors
from the fact that he adopts, uncritically and without examining their
content, economic categories – labour, capital, value, etc. – in the
crude form, clinging to their external appearance, in which they were handed
down to him by the economists. He thereby not only cuts himself off from
all further development – in contrast to Marx who was the first to make
something of these propositions so often repeated for the last sixty-four
years – but, as will be shown, he opens for himself the road leading straight
to utopia.

The above application of the Ricardian theory that the entire
social product belongs to the workers as their product, because
they are the sole real producers, leads directly to communism. But, as
Marx indeed indicates in the above-quoted passage, it is incorrect in formal
economic terms, for it is simply an application of morality to economics.
According to the laws of bourgeois economics, the greatest part of the
product does not belong to the workers who have produced it. If
we now say: that is unjust, that ought not to be so, then that has nothing
immediately to do with economics. We are merely saying that this economic
fact is in contradiction to our sense of morality. Marx, therefore, never
based his communist demands upon this, but upon the inevitable collapse
of the capitalist mode of production which is daily taking place before
our eyes to an ever growing degree; he says only that surplus value consists
of unpaid labour, which is a simple fact. But what in economic terms may
be formally incorrect, may all the same be correct from the point of view
of world history. If mass moral consciousness declares an economic fact
to be unjust, as it did at one time in the case of slavery and statute
labour, that is proof that the fact itself has outlived its day, that other
economic facts have made their appearance due to which the former has become
unbearable and untenable. Therefore, a very true economic content may be
concealed behind the formal economic incorrectness. This is not the place
to deal more closely with the significance and history of the theory of
surplus value.

At the same time other conclusions can be drawn, and have been
drawn, from the Ricardian theory of value. The value of commodities is
determined by the labour required for their production. But now it turns
out that in this imperfect world commodities are sold sometimes above,
sometimes below their value, and indeed not only as a result of ups and
downs in competition. The rate of profit tends just as much to balance
out at the same level for all capitalists as the price of commodities does
to become reduced to the labour value by agency of supply and demand. But
the rate of profit is calculated on the total capital invested in an industrial
business. Since now the annual products in two different branches of industry
may incorporate equal quantities of labour, and, consequently, may represent
equal values and also wages may be at an equal level in both, while the
capital advanced in one branch may be, and often is, twice or three times
as great as in the other, consequently the Ricardian law of value, as Ricardo
himself discovered, comes into contradiction here with the law of the equal
rate of profit. If the products of both branches of industry are sold at
their values, the rates of profit cannot be equal; if, however, the rates
of profit are equal, then the products of the two branches of industry
cannot always be sold at their values. Thus, we have here a contradiction,
the antinomy of two economic laws, the practical resolution of which takes
place according to Ricardo (Chapter I, Section 4 and 5 [4])
as a rule in favour of the rate of profit at the cost of value.

But the Ricardian definition of value, in spite of its ominous
characteristics, has a feature which makes it dear to the heart of the
honest bourgeois. It appeals with irresistible force to his sense of justice.
Justice and equality of rights are the cornerstones on which the bourgeois
of the eighteenth and nineteenth centuries would like to erect his social
edifice over the ruins of feudal injustice, inequality and privilege. And
the determination of value of commodities by labour and the free exchange
of the products of labour, taking place according to this measure of value
between commodity owners with equal rights, these are, as Marx has already
proved, the real foundations on which the whole political, juridical and
philosophical ideology of the modern bourgeoisie has been built. Once it
is recognised that labour is the measure of value of a commodity, the better
feelings of the honest bourgeois cannot but be deeply wounded by the wickedness
of a world which, while recognising the basic law of justice in name, still
in fact appears at every moment to set it aside without compunction. And
the petty bourgeois especially, whose honest labour – even if it is only
that of his workmen and apprentices – is daily more and more depreciated
in value by the competition of large-scale production and machinery, this
small-scale producer especially must long for a society in which the exchange
of products according to their labour value is at last a complete and invariable
truth. In other words, he must long for a society in which a single law
of commodity production prevails exclusively and in full, but in which
the conditions are abolished in which it can prevail at all, viz., the
other laws of commodity production and, later, of capitalist production.

How deeply this utopia has struck roots in the way of thinking
of the modern petty bourgeois – real or ideal – is proved by the fact
that it was systematically developed by John Gray back in 1831, that it
was tried in practice and theoretically propagated in England in the thirties,
that it was proclaimed as the latest truth by Rodbertus in Germany in 1842
and by Proudhon in France in 1846, that it was again proclaimed by Rodbertus
as late as 1871 as the solution to the social question and, as, so to say,
his social testament, and that in 1884 it again finds adherents among the
horde of careerists who in the name of Rodbertus set out to exploit Prussian
state socialism. [5]

The critique of this utopia has been so exhaustively furnished by Marx
both against Proudhon and against Gray (see the appendix to this work)
that I can confine myself here to a few remarks on the form of substantiating
and depicting it peculiar to Rodbertus.

As already noted, Rodbertus adopts the traditional definitions
of economic concepts entirely in the form in which they have come down
to him from the economists. He does not make the slightest attempt to investigate
them. Value is for him

"the valuation of one thing against others according to quantity, this
valuation being conceived as measure"

This, to put it mildly, extremely slovenly definition gives us at the best
an idea of what value approximately looks like, but says absolutely nothing
of what it is. Since this, however, is all that Rodbertus is able to tell
us about value, it is understandable that he looks for a measure of value
located outside value. After thirty pages in which he mixes up use value
and exchange value in higgledy-piggledy fashion with that power of abstract
thought so infinitely admired by Herr Adolf Wagner, [6]
he arrives at the conclusion that there is no real measure of value and
that one has to make do with a substitute measure. Labour could serve as
such but only if products of an equal quantity of labour were always exchanged
against products of an equal quantity of labour whether this “is already
the case of itself, or whether precautionary measures are adopted” to ensure
that it is. Consequently value and labour remain without any sort of material
connection in spite of the fact that the whole first chapter is taken up
to expound to us that commodities “cost labour” and nothing but labour,
and why this is so.

Labour, again, is taken uncritically in the form in which it occurs
among the economists. And not even that. For, although there is a reference
in a couple of words to differences in intensity of labour, labour is still
put forward quite generally as something which “costs", hence as something
which measures value, quite irrespective of whether it is expended under
normal average social conditions or not. Whether the producers take ten
days, or only one, to make products which could be made in one day; whether
they employ the best or the worst tools; whether they expend their labour
time in the production of socially necessary articles and in the socially
required quantity, or whether they make quite undesired articles or desired
articles in quantities above or below demand – about all this there is
not a word: labour is labour, the product of equal labour must be exchanged
against the product of equal labour. Rodbertus, who is otherwise always
ready, whether rightly or not, to adopt the national standpoint and to
survey the relations of individual producers from the high watchtower of
general social considerations, is anxious to avoid doing so here. And this,
indeed, solely because from the very first line of his book he makes directly
for the utopia of labour money, and because any investigation of labour
seen from its property of creating value would be bound to put insuperable
obstacles in his way. His instinct was here considerably stronger than
his power of abstract thought which, by the by, is revealed in Rodbertus
only by the most concrete absence of ideas.

The transition to utopia is now made in the turn of a hand. The
"measures", which ensure exchange of commodities according to labour value
as the invariable rule, cause no difficulty. The other utopians of this
tendency, from Gray to Proudhon, rack their brains to invent social institutions
which would achieve this aim. They attempt at least to solve the economic
question in an economic way through the action of the owners themselves
who exchange the commodities. For Rodbertus it is much easier. As a good
Prussian he appeals to the state: a decree of the state authority orders
the reform.

In this way then, value is happily “constituted", but by no means
the priority in this constitution as claimed by Rodbertus. On the contrary,
Gray as well as Bray – among many others – before Rodbertus, at length
and frequently ad nauseam, repeated this idea, viz. the pious desire
for measures by means of which products would always and under all circumstances
be exchanged only at their labour value.

After the state has thus constituted value – at least for a part
of the products, for Rodbertus is also modest – it issues its labour paper
money, and gives advances therefrom to the industrial capitalists, with
which the latter pay the workers, whereupon the workers buy the products
with the labour paper money they have received, and so cause the paper
money to flow back to its starting point. How very beautifully this is
effected, one must hear from Rodbertus himself:

“In regard to the second condition, the necessary measure that the
value certified in the note should be actually present in circulation is
realised in that only the person who actually delivers a product receives
a note, on which is accurately recorded the quantity of labour by which
the product was produced, Whoever delivers a product of two days’ labour
receives a note marked ‘two days’. By the strict observance of this rule
in the issue of notes, the second condition too would necessarily be fulfilled.
For according to our supposition the real value of the goods always coincides
with the quantity of labour which their production has cost and this quantity
of labour is measured by the usual units of time, and therefore someone
who hands in a product on which two days’ labour has been expended and
receives a certificate for two days, has received, certified or assigned
to him neither more nor less value than that which he has in fact supplied.
Further, since only the person who has actually put a product into
circulation receives such a certificate, it is also certain that the value
marked on the note is available for the satisfaction of society. However
extensive we imagine the circle of division of labour to be, if this rule
is strictly followed the sum total of available value must be
exactly equal to the sum total of certified value. Since, however,
the sum total of certified value is exactly equal to the sum total of value
assigned, the latter must necessarily coincide with the available value,
all claims will be satisfied and the liquidation correctly brought about"

(pp. 166-67).

If Rodbertus has hitherto always had the misfortune to arrive too late
with his new discoveries, this time at least he has the merit of one
sort of originality: none of his rivals has dared to express the stupidity
of the labour money utopia in this childishly naive, transparent, I might
say truly Pomeranian, form. Since for every paper certificate a corresponding
object of value has been delivered, and no object of value is supplied
except in return for a corresponding paper certificate, the sum total of
paper certificates must always be covered by the sum total of objects of
value. The calculation works out without the smallest remainder, it is
correct down to a second of labour time, and no governmental chief revenue
office accountant, however many years of faithful service he may have behind
him, could prove the slightest error in calculation. What more could one
want?

In present-day capitalist society each industrial capitalist produces
off his own bat what, how and as much as he likes. The social demand, however,
remains an unknown magnitude to him, both in regard to quality, the kind
of objects required, and in regard to quantity. That which today cannot
be supplied quickly enough, may tomorrow be offered far in excess of the
demand. Nevertheless, demand is finally satisfied in one way or another,
good or bad, and, taken as a whole, production is ultimately geared towards
the objects required. How is this evening-out of the contradiction effected?
By competition. And how does competition bring about this solution? Simply
by depreciating below their labour value those commodities which by their
kind or amount are useless for immediate social requirements, and by making
the producers feel, through this roundabout means, that they have produced
either absolutely useless articles or ostensibly useful articles in unusable,
superfluous quantity. Two things follow from this:

First, continual deviations of the prices of commodities from
their values are the necessary condition in and through which the value
of the commodities as such can come into existence. Only through the fluctuations
of competition, and consequently of commodity prices, does the law of value
of commodity production assert itself and the determination of the value
of the commodity by the socially necessary labour time become a reality.
That thereby the form of manifestation of value, the price, as a rule looks
somewhat different from the value which it manifests, is a fate which value
shares with most social relations. A king usually looks quite different
from the monarchy which he represents. To desire, in a society of producers
who exchange their commodities, to establish the determination of value
by labour time, by forbidding competition to establish this determination
of value through pressure on prices in the only way it can be established,
is therefore merely to prove that, at least in this sphere, one has adopted
the usual utopian disdain of economic laws.

Secondly, competition, by bringing into operation the law of value
of commodity production in a society of producers who exchange their commodities,
precisely thereby brings about the only organisation and arrangement of
social production which is possible in the circumstances. Only through
the undervaluation or overvaluation of products is it forcibly brought
home to the individual commodity producers what society requires or does
not require and in what amounts. But it is precisely this sole regulator
that the utopia advocated by Rodbertus among others wishes to abolish.
And if we then ask what guarantee we have that necessary quantity and not
more of each product will be produced, that we shall not go hungry in regard
to corn and meat while we are choked in beet sugar and drowned in potato
spirit, that we shall not lack trousers to cover our nakedness while trouser
buttons flood us by the million – Rodbertus triumphantly shows us his
splendid calculation, according to which the correct certificate has been
handed out for every superfluous pound of sugar, for every unsold barrel
of spirit, for every unusable trouser button, a calculation which “works
out” exactly, and according to which “all claims will be satisfied and
the liquidation correctly brought about.” And anyone who does not believe
this can apply to governmental chief revenue office accountant X in Pomerania
who has checked the calculation and found it correct, and who, as one who
has never yet been caught lacking with the accounts, is thoroughly trustworthy.

And now consider the naiveté with which Rodbertus would
abolish industrial and commercial crises by means of his utopia. As soon
as the production of commodities has assumed world market dimensions, the
evening-out between the individual producers who produce for private account
and the market for which they produce, which in respect of quantity and
quality of demand is more or less unknown to them, is established by means
of a storm on the world market, by a commercial crisis. [*1]
If now competition is to be forbidden to make the individual producers
aware, by a rise or fall in prices, how the world market stands, then they
are completely blindfolded. To institute the production of commodities
in such a fashion that the producers can no longer learn anything about
the state of the market for which they are producing – that indeed is
a cure for the crisis disease which could make Dr. Eisenbart envious of
Rodbertus.

It is now comprehensible why Rodbertus determines the value of
commodities simply by “labour” and at most allows for different degrees
of intensity of labour. If he had investigated by what means and how labour
creates value and therefore also determines and measures it, he would have
arrived at socially necessary labour, necessary for the individual product,
both in relation to other products of the same kind and also in relation
to society’s total demand. He would thereby have been confronted with the
question as to how the adjustment of the production of separate commodity
producers to the total social demand takes place, and his whole utopia
would thereby have been made impossible. This time he preferred in fact
to “make an abstraction", namely of precisely that which mattered.

Now at last we come to the point where Rodbertus really offers
us something new; something which distinguishes him from all his numerous
fellow supporters of the labour money exchange economy. They all demand
this exchange organisation for the purpose of abolishing the exploitation
of wage labour by capital. Every producer is to receive the full labour
value of his product. On this they all agree, from Gray to Proudhon. Not
at all, says Rodbertus. Wage labour and its exploitation remain.

In the first place, in no conceivable condition of society can
the worker receive the full value of his product for consumption. A series
of economically unproductive but necessary functions have to be met from
the fund produced, and consequently also the persons connected with them
maintained. This is only correct so long as the present-day division of
labour applies. In a society in which general productive labour is obligatory,
which is also “conceivable” after all, this ceases to apply. But the need
for a social reserve and accumulation fund would remain and consequently
even in that case, the workers, i.e., all, would remain in possession
and enjoyment of their total product, but each separate worker would not
enjoy the “full returns of his labour". Nor has the maintenance of economically
unproductive functions at the expense of the labour product been overlooked
by the other labour money utopians. But they leave the workers to tax themselves
for this purpose in the usual democratic way, while Rodbertus, whose whole
social reform of 1842 is geared to the Prussian state of that time, refers
the whole matter to the decision of the bureaucracy, which determines from
above the share of the worker in his own product and graciously permits
him to have it.

In the second place, however, rent and profit are also to continue
undiminished. For the landowners and industrial capitalists also exercise
certain socially useful or even necessary functions, even if economically
unproductive ones, and they receive in the shape of rent and profit a sort
of pay on that account – a conception which was, it will be recalled,
not new even in 1842. Actually they get at present far too much for the
little that they do, and badly at that, but Rodbertus has need, at least
for the next five hundred years, of a privileged class, and so the present
rate of surplus value, to express myself correctly, is to remain in existence
but is not to be allowed to be increased. This present rate of surplus
value Rodbertus takes to be 200 per cent, that is to say, for twelve hours
of labour daily the worker is to receive a certificate not for twelve hours
but only for four, and the value produced in the remaining eight hours
is to be divided between landowner and capitalist. Rodbertus’ labour certificates,
therefore, are a direct lie. Again, one must be a Pomeranian manor owner
in order to imagine that a working class would put up with working twelve
hours in order to receive a certificate for four hours of labour. If the
hocus-pocus of capitalist production is translated into this naïve
language, in which it appears as naked robbery, it is made impossible.
Every certificate given to a worker would be a direct instigation to rebellion
and would come under § 110 of the German Imperial Criminal Code. [7]
One need never have seen any other proletariat than the day-labourer proletariat,
still actually in semi-serfdom, of a Pomeranian manor where the rod and
the whip reign supreme, and where all the beautiful women in the village
belong to his lordship’s harem, in order to imagine one can treat the workers
in such a shamefaced manner. But, after all, our conservatives are our
greatest revolutionaries.

If, however, our workers are sufficiently docile to be taken in
that they have in reality only worked four hours during a whole twelve
hours of hard work, they are, as a reward, to be guaranteed that for all
eternity their share in their own product will never fall below a third.
That is indeed pie in the sky of the most infantile kind and not worth
wasting a word over. Insofar, therefore, as there is anything novel in
the labour money exchange utopia of Rodbertus, this novelty is simply childish
and far below the achievements of his numerous comrades both before and
after him.

For the time when Rodbertus’ Zur Erkenntnis, etc., appeared,
it was certainly an important book. His development of Ricardo’s theory
of value in that one direction was a very promising beginning. Even if
it was new only for him and for Germany, still as a whole, it stands on
a par with the achievements of the better ones among his English predecessors.
But it was only a beginning, from which a real gain for theory could be
achieved only by further thorough and critical work. But he cut himself
off from further development by also tackling the development of Ricardo’s
theory from the very beginning in the second direction, in the direction
of utopia. Thereby he surrendered the first condition of all criticism
– freedom from bias. He worked on towards a goal fixed in advance, he
became a Tendenzökonom. Once imprisoned by his utopia, he cut
himself off from all possibility of scientific advance. From 1842 up to
his death, he went round in circles, always repeating the same ideas which
he had already expressed or suggested in his first work, feeling himself
unappreciated, finding himself plundered, where there was nothing to plunder,
and finally refusing, not without intention, to recognise that in essence
he had only rediscovered what had already been discovered long before.

In a few places the translation departs from the printed French original.
This is due to handwritten alterations by Marx, which will also be inserted
in the new French edition that is now being prepared. [8]

It is hardly necessary to point out that the terminology used
in this work does not entirely coincide with that in Capital. Thus
this work still speaks of labour as a commodity, of the purchase
and sale of labour, instead of labour power.

Also added as a supplement to this edition are:

1) a passage from Marx’s work A Contribution to the Critique
of Political Economy, Berlin, 1859, dealing with the first labour
money exchange utopia of John Gray, and

2) a translation of Marx’s speech
on free trade in Brussels (1848), which belongs to the same period of
the author’s development as the Misère.

London, October 23, 1884

Frederick Engels

Footnotes

Background: Engels’ letters written between
August and October 1884 show that he did a great deal of work in preparing
Marx’s Poverty of Philosophy for publication in German. (The book
was written and published in French in 1847 and was not republished in
full during Marx’s lifetime.) Engels edited the translation made by Eduard
Bernstein and Karl Kautsky and supplied a number of notes to it.

The first German edition of Marx’s book appeared in the second
half of January 1885 and, a little earlier, at the beginning of January,
Engels published his Preface in the magazine Die Neue Zeit under
the title “Marx und Rodbertus". It was also included in the second German
edition of the book which appeared in 1892 with a special preface written
by Engels.

[1] Marx wrote the statement about the
break with Der Social-Demokrat on February 18, 1865 and sent it
to Engels, who fully endorsed it and returned it to Marx with his signature;
on February 23, 1865 Marx sent the statement to the editors of the newspaper.
This was occasioned by Schweitzer’s series of articles Das Ministerium
Bismarck in which he expressed overt support for Bismarck’s policy
of unifying Germany under Prussian supremacy. Marx took measures to make
Schweitzer publish the statement. It was published in many papers, among
them the Barmer Zeitung and Elberfelder Zeitung on February
26. Schweitzer was forced to publish this statement in Der Social Demokrat,
No. 29, March 3, 1865.

[2] The reference is to Engels’ Preface
to the first German edition of Vol. II of Marx’s Capital, which
Engels completed on May 5, 1885.

[3] See the anonymous pamphlet: The
Source and Remedy of the National Difficulties, deduced from principles
of political economy, in a letter to Lord John Russell, London, 1821.

For more details about the pamphlet see Engels’ Preface to Vol.
II of Marx’s Capital.

[4] Engels is referring to the second
edition of Ricardo’s book On the Principles of Political Economy, and
Taxation, London, 1819, pp. 32-46, where the author divided the text
into sections.

[5] The reference is to the people who
took part in publishing the literary legacy of Rodbertus-Jagetzow, in particular
his work Das Kapital. Vierter socialer Brief an von Kirchmann, Berlin,
1884; the publisher of this work and the author of the introduction to
it was Theophil Kozak; the preface was written by the German vulgar economist
Adolf Wagner.

[6] Engels is referring to the preface
to K. Rodbertus-Jagetzow’s work, Das Kapital. Vierter socialer Brief
an von Kirchmann, Berlin, 1884, pp. VII-VIII, in which Adolf Wagner
wrote: “Rodbertus evinces here such a power of abstract thinking as is
possessed only by the greatest masters."

[7] § 110 of the German Imperial
Criminal Code promulgated in 1871 stipulated a fine of up to 600 marks
or imprisonment for a term of up to 2 years for a public appeal in writing
to disobey the laws and decrees operating in the German Empire.

[8] The second French edition of The
Poverty of Philosophy, which was being prepared by Marx’s daughter
Laura Lafargue, appeared in Paris only after Engels’ death, in 1896.

[*1] At least this was the case until recently.
Since England’s monopoly of the world market is being increasingly shattered
by the participation of France, Germany and, above all, of America in world
trade, a new form of evening-out appears to come into operation. The period
of general prosperity preceding the crisis still fails to appear. If it
should remain absent altogether, then chronic stagnation must necessarily
become the normal condition of modern industry, with only insignificant
fluctuations.

## Chapter One: A Scientific Discovery

### 1. The Antithesis of Use Value and Exchange Value

“The capacity for all products, whether natural or industrial, to contribute
to man’s subsistence is specifically termed use value; their capacity to
be given in exchange for one another, exchange value.... How does use value
become exchange value?... The genesis of the idea of (exchange) value has
not been noted by economists with sufficient care. It is necessary, therefore,
for us to dwell upon it. Since a very large number of the things I need
occur in nature only in moderate quantities, or even not at all, I am forced
to assist in the production of what I lack. And as I cannot set my hand
to so many things, I shall propose to other men, my collaborators in various
functions, to cede to me a part of their products in exchange for mine."

(Proudhon, Vol. I, Chap.II)

M. Proudhon undertakes to explain to us first
of all the double nature of value, the “distinction in value,” the process
by which use value is transformed into exchange value. It is necessary
for us to dwell with M. Proudhon upon this act of transubstantiation. The
following is how this act is accomplished, according to our author.

A very large number of products are not to be found in nature,
they are products of industry. If man’s needs go beyond nature’s spontaneous
production, he is forced to have recourse to industrial production. What
is this industry in M. Proudhon’s view? What is its origin? A single individual,
feeling the need for a very great number of things, “cannot set his hand
to so many things.” So many things to produce presuppose at once more than
one man’s hand helping to produce them. Now, the moment you postulate more
than one hand helping in production, you at once presuppose a whole production
based on the division of labour. Thus need, as M. Proudhon presupposes it,
itself presupposes the whole division of labour. In presupposing the division
of labour, you get exchange, and, consequently, exchange value. One might
as well have presupposed exchange value from the very beginning.

But M. Proudhon prefers to go the roundabout way. Let us follow
him in all his detours, which always bring him back to his starting point.

In order to emerge from the condition in which everyone produces
in isolation and to arrive at exchange, “I turn to my collaborators in
various functions,” says M. Proudhon. I, myself, then, have collaborators,
all with different function. And yet, for all that, I and all the others,
always according to M. Proudhon’s supposition, have got no farther than
the solitary and hardly social position of the Robinsons. The collaborators
and the various functions, the division of labour and the exchange it implies,
are already at hand.

To sum up: I have certain needs which are founded on the division
of labour and on exchange. In presupposing these needs, M. Proudhon has
thus presupposed exchange, exchange value, the very thing of which he purposes
to “note the genesis with more care than other economists.”

M. Proudhon might just as well have inverted the order of things,
without in any way affecting the accuracy of his conclusions. To explain
exchange value, we must have exchange. To explain exchange, we must have
the division of labour. To explain the division of labour, we must have needs
which render necessary the division of labour. To explain these needs, we
must “presuppose” them, which is not to deny them – contrary to the first
axiom in M. Proudhon’s prologue: “To presuppose God is to deny him.” (Prologue,
p.1)

How does M. Proudhon, who assumes the division of labour as the
known, manage to explain exchange value, which for him is always the unknown?

“A man” sets out to “propose to other men, his collaborators in
various functions,” that they establish exchange, and make a distinction
between ordinary value and exchange value. In accepting this proposed distinction,
the collaborators have left M. Proudhon no other “care” than that of recording
the fact, or marking, of “noting” in his treatise on political economy
“the genesis of the idea of value.” But he has still to explain to us the
“genesis” of this proposal, to tell us finally how this single individual,
this Robinson [Crusoe], suddenly had the idea of making “to his collaborators”
a proposal of the type known and how these collaborators accepted it without
the slightest protest.

M. Proudhon does not enter into these genealogical details. He
merely places a sort of historical stamp upon the fact of exchange, by
presenting it in the form of a motion, made by a third party, that exchange
be established.

That is a sample of the “historical and descriptive method” of
M. Proudhon, who professes a superb disdain for the “historical and descriptive
methods” of the Adam Smiths and Ricardos.

Exchange has a history of its own. It has passed through different
phases. There was a time, as in the Middle Ages, when only the superfluous,
the excess of production over consumption, was exchanged.

There was again a time, when not only the superfluous, but all
products, all industrial existence, had passed into commerce, when the
whole of production depended on exchange. How are we to explain this second
phase of exchange – marketable value at its second power?

M. Proudhon would have a reply ready-made: Assume that a man has
“proposed to other men, his collaborators in various functions,” to raise
marketable value to its second power.

Finally, there came a time when everything that men had considered
as inalienable became an object of exchange, of traffic and could be alienated.
This is the time when the very things which till then had been communicated,
but never exchanged; given, but never sold; acquired, but never bought
– virtue, love, conviction, knowledge, conscience, etc. – when everything,
in short, passed into commerce. It is the time of general corruption, of
universal venality, or, to speak in terms of political economy, the time
when everything, moral or physical, having become a marketable value, is
brought to the market to be assessed at its truest value.

How, again, can we explain this new and last phase of exchange
– marketable value at its third power?

M. Proudhon would have a reply ready-made: Assume that a person
has “proposed to other persons, his collaborators in various functions,”
to make a marketable value out of virtue, love, etc., to raise exchange
value to its third and last power.

We see that M. Proudhon’s “historical and descriptive method"
is applicable to everything, it answers everything, explains everything.
If it is a question above all of explaining historically “the genesis of
an economic idea,” it postulates a man who proposes to other men, “his
collaborators in various functions,” that they perform this act of genesis
and that is the end of it.

We shall hereafter accept the “genesis” of exchange value as an
accomplished act; it now remains only to expound the relation between exchange
value and use value. Let us hear what M. Proudhon has to say:

“Economists have very well brought out the double character of value,
but what they have not pointed out with the same precision is its contradictory
nature; this is where our criticism begins. ...

“It is a small thing to have drawn attention to this surprising
contrast between use value and exchange value, in which economists have
been wont to see only something very simple: we must show that this alleged
simplicity conceals a profound mystery into which it is our duty to penetrate....

“In technical terms, use value and exchange value stand in inverse
ratio to each other."

If we have thoroughly grasped M. Proudhon’s thought the following are the
four points which he sets out to establish:

1. Use value and exchange value form a “surprising contrast,” they are in
opposition to each other.

2. Use value and exchange value are in inverse ratio, in contradiction, to
each other.

3. Economists have neither observed nor recognized either the opposition or
the contradiction.

4. M. Proudhon’s criticism begins at the end.

We, too, shall begin at the end, and, in order to clear the economists
from M. Proudhon’s accusations, we shall let two sufficiently well-known
economists speak for themselves.

SISMONDI:

“It is the opposition between use value and exchange value to
which commerce has reduced everything, etc.”

(Etudes, Volume II, p.162, Brussels edition)

LAUDERDALE:

“In proportion as the riches of individuals are increased by an
augmentation of the value of any commodity, the wealth of the society is
generally diminished; and in proportion as the mass of individual riches
is diminished, by the diminution of the value of any commodity, its opulence
is generally increased.”

(Recherches sur la nature et l’origine

de la richesse publique; translated by

Langentie de Lavaisse, Paris 1808 [p.33])

Sismondi founded on the opposition between use value and exchange value
his principal doctrine, according to which diminution in revenue is proportional
to the increase in production.

Lauderdale founded his system on the inverse ratio of the two
kinds of value, and his doctrine was indeed so popular in Ricardo’s time
that the latter could speak of it as of something generally known.

“It is through confounding the ideas of value and wealth, or riches
that it has been asserted, that by diminishing the quantity of commodities,
that is to say, of the necessaries, conveniences, and enjoyments of human
life, riches may be increased.”

(Ricardo, Principles de l’économie politique

translated by Constancio, annotations by J. B. Say.

Paris 1835; Volume II, chapter Sur la valeur et les richesses)

We have just seen that the economists before M. Proudhon had “drawn attention"
to the profound mystery of opposition and contradiction. Let us now see
how M. Proudhon explains this mystery after the economists.

The exchange value of a product falls as the supply increases,
the demand remaining the same; in other words, the more abundant a product
is relatively to the demand, the lower is its exchange value, or price.
Vice versa: The weaker the supply relatively to the demand, the higher
rises the exchange value or the price of the product supplied: in other
words, the greater the scarcity in the products supplied, relatively to
the demand, the higher the prices. The exchange value of a product depends
upon its abundance or its scarcity; but always in relation to the demand.
Take a product that is more than scarce, unique of its kind if you will:
this unique product will be more than abundant, it will be superfluous,
if there is no demand for it. On the other hand, take a product multiplied
into millions, it will always be scarce if it does not satisfy the demand,
that is, if there is too great a demand for it.

These are what we should almost call truisms, yet we have had
to repeat them here in order to render M. Proudhon’s mysteries comprehensible.

“So that, following up the principle to its ultimate consequences,
one would come to the conclusion, the most logical in the world, that the
things whose use is indispensable and whose quantity is unlimited should
be had for nothing, and those whose utility is nil and whose scarcity is
extreme should be of incalculable worth. To cap the difficulty, these extremes
are impossible in practice: on the one hand, no human product could ever
be unlimited in magnitude; on the other, even the scarcest things must
perforce be useful to a certain degree, otherwise they would be quite valueless.
Use value and exchange value are thus inexorably bound up with each other,
although by their nature they continually tend to be mutually exclusive.”

(Volume I, p. 39)

What caps M. Proudhon’s difficulty? That he has simply forgotten about
demand, and that a thing can be scarce or abundant only in so far as it
is in demand. The moment he leaves out demand, he identifies exchange value
with scarcity and use value with abundance. In reality, in saying that
things “whose utility is nil and scarcity extreme are of incalculable worth,”
he is simply declaring that exchange value is merely scarcity. “Scarcity
extreme and utility nil” means pure scarcity. “Incalculable worth” is the
maximum of exchange value, it is pure exchange value. He equates these
two terms. Therefore exchange value and scarcity are equivalent terms.
In arriving at these alleged “extreme consequences,” M. Proudhon has in
fact carried to the extreme, not the things, but the terms which express
them, and, in so doing, he shows proficiency in rhetoric rather than in
logic. He merely rediscovers his first hypotheses in all their nakedness,
when he thinks he has discovered new consequences. Thanks to the same procedure
he succeeds in identifying use value with pure abundance.

After having equated exchange value and scarcity, use value and
abundance, M. Proudhon is quite astonished not to find use value in scarcity
and exchange value, nor exchange value in abundance and use value; and
seeing that these extremes are impossible in practice, he can do nothing
but believe in mystery. Incalculable worth exists for him, because buyers
do not exist, and he will never find any buyers, so long as he leaves out
demand.

On the other hand, M. Proudhon’s abundance seems to be something
spontaneous. He completely forgets that there are people who produce it,
and that it is to their interest never to lose sight of demand. Otherwise,
how could M. Proudhon have said that things which are very useful must
have a very low price, or even cost nothing? On the contrary, he should
have concluded that abundance, the production of very useful things, should
be restricted if their price, their exchange value is to be raised.

The old vine-growers of France in petitioning for a law to forbid
the planting of new vines; the Dutch in burning Asiatic spices, in uprooting
clove trees in the Moluccas, were simply trying to reduce abundance in
order to raise exchange value. During the whole of the Middle Ages this
same principle was acted upon, in limiting by laws the number of journeymen
a single master could employ and the number of implements he could use.
(See Anderson, History of Commerce.) [A. Anderson,
An Historical and Chronological Deduction of the Origin of Commerce
from the Earliest Accounts to the Present Time. First edition appeared
in London in 1764. p. 33]

After having represented abundance as use value and scarcity as
exchange value – nothing indeed is easier than to prove that abundance
and scarcity are in inverse ratio – M. Proudhon identifies use value with
supply and exchange value with demand. To make the antithesis
even more clear-cut, he substitutes a new term, putting “estimation value”
instead of exchange value. The battle has now shifted its ground, and we
have on one side utility (use value, supply), on the other side,
estimation (exchange value, demand).

Who is to reconcile these two contradictory forces? What is to
be done to bring them into harmony with each other? Is it possible to find
in them even a single point of comparison?

“Certainly,” cries M. Proudhon, “there is one – free will. The price
resulting from this battle between supply and demand, between utility and
estimation will not be the expression of eternal justice."

M. Proudhon goes on to develop this antithesis.

“In my capacity as a free buyer, I am judge of my needs, judge of the
desirability of an object, judge of the price I am willing to pay for it.
On the other hand, in your capacity as a free producer, you are master
of the means of execution, and in consequence, you have the power to reduce
your expenses."

(Volume I, p. 41)

And as demand, or exchange value, is identical with estimation, M. Proudhon
is led to say:

“It is proved that it is man’s free will that gives rise to the opposition
between use value and exchange value. How can this opposition be removed,
so long as free will exists? And how can the latter be sacrificed without
sacrificing mankind?"

(Volume I, p. 41)

Thus there is no possible way out. There is a struggle between two as it
were incommensurable powers, between utility and estimation, between the
free buyer and the free producer.

Let us look at things a little more closely.

Supply does not represent exclusively utility, demand does not
represent exclusively estimation. Does not the demander also supply a certain
product or the token representing all products – viz., money; and as supplier,
does he not represent, according to M. Proudhon, utility or use value?

Again, does not the supplier also demand a certain product or
the token representing all product – viz., money? And does he not thus
become the representative of estimation, of estimation value or of exchange
value?

Demand is at the same time a supply, supply is at the same time
a demand. Thus M. Proudhon’s antithesis, in simply identifying supply and
demand, the one with utility, the other with estimation, is based only
on a futile abstraction.

What M. Proudhon calls use value is called estimation value by
other economists, and with just as much right. We shall quote only Storch
(Cours d’economie politique, Paris 1823, pp.48 and 49).

According to him, needs are the things for which we feel
the need; values are things to which we attribute value. Most things
have value only because they satisfy needs engendered by estimation. The
estimation of our needs may change; therefore the utility of things, which
expresses only the relation of these things to our needs, may also change.
Natural needs themselves are continually changing. Indeed, what could be
more varied than the objects which form the staple food of different peoples!

The conflict does not take place between utility and estimation;
it takes place between the marketable value demanded by the supplier and
the marketable value supplied by the demander. The exchange value of the
product is each time the resultant of these contradictory appreciations.

In final analysis, supply and demand bring together production
and consumption, but production and consumption based on individual exchanges.

The product supplied is not useful in itself. It is the consumer
who determines its utility. And even when its quality of being useful is
admitted, it does not exclusively represent utility. In the course of production,
it has been exchanged for all the costs of production, such as raw materials,
wages of workers, etc., all of which are marketable values. The product,
therefore, represents, in the eyes of the producer, a sum total of marketable
values. What he supplies is not only a useful object, but also and above
all a marketable value.

As to demand, it will only be effective on condition that it has
means of exchange at its disposal. These means are themselves products,
marketable value.

In supply and demand, then, we find on the one hand a product
which has cost marketable values, and the need to sell; on the other, means
which have cost marketable values, and the desire to buy.

M. Proudhon opposes the free buyer to the free producer. To the
one and to the other he attributes purely metaphysical qualities. It is
this that makes him say:

“It is proved that it is man’s free will that gives rise to the opposition
between use value and exchange value.”

[Volume I, p. 41]

The producer, the moment he produces in a society founded on the division
of labour and on exchange (and that is M. Proudhon’s hypothesis), is forced
to sell. M. Proudhon makes the producer master of the means of production;
but he will agree with us that his means of production do not depend on
free will. Moreover, many of these means of production are products which
he gets from the outside, and in modern production he is not even free
to produce the amount he wants. The actual degree of development of the
productive forces compels him to produce on such or such a scale.

The consumer is no freer than the producer. His judgment depends
on his means and his needs. Both of these are determined by his social
position, which itself depends on the whole social organisation. True,
the worker who buys potatoes and the kept woman who buys lace both follow
their respective judgments. But the difference in their judgements is explained
by the difference in the positions which they occupy in the world, and
which themselves are the product of social organisation.

Is the entire system of needs on estimation or on the whole organisation
of production? Most often, needs arise directly from production or from
a state of affairs based on production. Thus, to choose another example,
does not the need for lawyers suppose a given civil law which is but the
expression of a certain development of property, that is to say, of production?

It is not enough for M. Proudhon to have eliminated the elements
just mentioned from the relation of supply and demand. He carries abstraction
to the furthest limits when he fuses all producers into one single producer,
all consumers into one single consumer, and sets up a struggle between
these two chimerical personages. But in the real world, things happen otherwise.
The competition among the suppliers and the competition among the demanders
form a necessary part of the struggle between buyers and sellers, of which
marketable value is the result.

After having eliminated competition and the cost of production,
M. Proudhon can at his ease reduce the formula of supply and demand to
an absurdity.

“Supply and demand,” he says, “are merely two ceremonial forms that
serve to bring use value and exchange value face to face, and to lead to
their reconciliation. They are the two electric poles which, when connected,
must produce the phenomenon of affinity called exchange."

(Volume I, pp.49 and 50)

One might as well say that exchange is merely a “ceremonial form” for introducing
the consumer to the object of consumption. One might as well say that all
economic relations are “ceremonial forms” serving immediate consumption
as go-betweens. Supply and demand are neither more nor less relations of
a given production than are individual exchanges.

What, then, does all M. Proudhon’s dialectic consist in? In the
substitition for use value and exchange value, for supply and demand, of
abstract and contradictory notions like scarcity and abundance, utility
and estimation, one producer and one consumer, both of them
knights of free will.

And what was he aiming at?

At arranging for himself a means of introducing later on one of
the elements he had set aside, the cost of production, as the synthesis
of use value and exchange value. And it is thus that in his eyes the cost
of production constitutes synthetic value or constituted value.

### 2. Constituted Value or Synthetic Value

Value (marketable value) is the corner-stone
of the economic structure. “Constituted” value is the corner-stone of
the system of economic contradictions.

What then is this “constituted value” which is all M. Proudhon
has discovered in political economy?

Once utility is admitted, labor is the source of all value. The
measure of labor is time. The relative value of products is determined
by the labor time required for their production. Price is the monetary
expression of the relative value of a product. Finally, the constituted
value of a product is purely and simply the value which is constituted
by the labor time incorporated in it.

Just as Adam Smith discovered the division of labor, so he, M.
Proudhon, claims to have discovered “constituted value.” This is not exactly
“something unheard of,” but then it must be admitted that there is nothing
unheard of in any discovery of economic science. M. Proudhon, who fully appreciates
the importance of his own invention, seeks nevertheless to
tone down the merit therefore “in order to reassure the reader to as his
claims to originality, and to win over minds whose timidity renders them
little favorable to new ideas.” But in apportioning the contribution made
by each of his predecessors to the understanding of value, he is forced
to confess openly that the largest portion, the lion’s share, of the merit
falls to himself.

“The synthetic idea of value had been vaguely perceived by Adam Smith....
But with Adam Smith the idea of value was entirely intuitive. Now, society
does not change its habits merely on the strength of intuitions: its decisions
are made only on the authority of facts. The antinomy had to be stated
more palpably and more clearly: J.B. Say was its chief interpreter."

[I 66]

Here, in a nutshell, is the history of the discovery of synthetic value:
Adam Smith – vague intuition; J. B. Say – antinomy; M. Proudhon – constituting
and “constituted” truth. And let there be no mistake about it: all the
other economists, from Say to Proudhon, have merely been trudging along
in the rut of antimony.

“It is incredible that for the last 40 years so many men of sense should
have fumed and fretted at such a simple idea. But no, values are compared
without there being any point of comparison between them and with no unit
of measurements; this, rather than embrace the revolutionary theory of
equality, is what the economists of the 19th century are resolved to uphold
against all comers. What will posterity say about it?"

(Vol.I, p.68)

Posterity, so abruptly invoked, will begin by getting muddled over the
chronology. It is bound to ask itself: are not Ricardo and his school economists
of the 19th century? Ricardo’s system, putting as a principle that “the
relative value of commodities corresponds exclusively to their production",
dates from 1817. Ricardo is the head of a whole school dominant in England
since the Restoration. [The Restoration began after the termination
of the Napoleonic wars and the restoration of the Bourbon dynasty in France
in 1815.] The Ricardian doctrine summarizes severely, remorselessly, the
whole of the English bourgeoisie. “What will posterity say about it?” It
will not say that M. Proudhon did not know Ricardo, for he talks about
him, he talks at length about him, he keeps coming back to him, and concludes
by calling his system “trash". If ever posterity does interfere, it will
say perhaps that M. Proudhon, afraid of offending his readers’ Anglophobia,
preferred to make himself the responsible editor of Ricardo’s ideas. In
any case, it will think it very naive that M. Proudhon should give as a
"revolutionary theory of the future” what Ricardo expounded scientifically
as the theory of present-day society, of bourgeois society, and that he
should thus take for the solution of the antinomy between utility and exchange
value what Ricardo and his school presented long before him as the scientific
formula of one single side of this antinomy, that of exchange value. But
let us leave posterity alone once and for all, and confront M. Proudhon
with his predecessor Ricardo. Here are some extracts from this author which
summarize his doctrine on value:

“Utility then is not the measure of exchangeable value, although it
is absolutely essential to it."

(Vol.I, p.3, Principles de l’economie

politique, etc., translated from the

English by F.S. Constancio, Paris 1835)

“Possessing utility, commodities derive their exchangeable value from
two sources: from their scarcity, and from the quantity of labor required
to obtain them. There are some commodities, the value of which is determined
by their scarcity alone. No labor can increase the quantity of such goods,
and therefore their value cannot be lowered by an increased supply. Some
rare statues and pictures, scarce books... are all of this description.
Their value... varies with the varying wealth and inclinations of those
who are desirous to possess them."

(Vol.I, pp.4 and 5, l. c.)

“These commodities, however, form a very small part of the mass of
commodities daily exchanged in the market. By far the greatest part of
these goods which are the objects of desire, are procured by labor; and
they may be multiplied, not in one country alone, but in many, almost without
any assignable limit, if we are disposed to bestow the labor necessary
to obtain them.”

(Vol.I, pp.5, l. c.)

“In speaking then of commodities, of their exchangeable value, and
of the laws which regulate their relative prices, we mean always such commodities
only as can be increased in quantity by the exertion of human industry,
and on the production of which competition operates without restraint.”

(Vol.I, pp.5)

Ricardo quotes Adam Smith, who, according to him, “so accurately defined
the original source of exchangeable value” (Adam Smith, Wealth of Nations,
Book I, Chap 5 [An Inquiry into the Nature and Causes
of the Wealth of Nations, first edition appearing in London, 1776]),
and he adds:

“That this (i.e., labor time) is really the foundation of the exchangeable
value of all things, excepting those which cannot be increased by human
industry, is a doctrine of the utmost importance in political economy;
for from no source do so many errors, and so much difference of opinion
in that science proceed, as from the vague ideas which are attached to
the word value.”

(Vol.I, p.8)

“If the quantity of labor realized in commodities regulate their exchangeable
value, every increase of the quantity of labor must augment the value of
that commodity on which it is exercised, as every diminution must lower
it.”

(Vol.I, p.8)

Ricardo goes on to reproach Smith:

1. With having “himself erected another standard measure of value” than labor.
“Sometimes he speaks of corn, at other times of labor, as a standard measure;
not the quantity of labor bestowed on the production of any object, but
the quantity it can command in the market.” (Vol.I, pp.9 and 10)

2. With having “admitted the principle without qualification and at the same
time restricted its application to that early and rude state of society,
which precedes both the accumulation of stock and the appropriation of
land.” (Vol.I, p.21)

Ricardo sets out to prove that the ownership of land, that is, ground rent,
cannot change the relative value of commodities and that the accumulation
of capital has only a passing and fluctuation effect on the relative values
determined by the comparative quantity of labor expended on their production.
In support of this thesis, he gives his famous theory of ground rent, analyses
capital, and ultimately finds nothing in it but accumulated labor. Then
he develops a whole theory of wages and profits, and proves that wages
and profits rise and fall in inverse ratio to each other, without affecting
the relative value of the product. He does not neglect the influence that
the accumulation of capital and its different aspects (fixed capital and
circulating capital), as also the rate of wages, can have on the proportional
value of products. In fact, they are the chief problems with which Ricardo
is concerned.

“Economy in the use of labor never fails to reduce the relative value
[*1] of a commodity, whether the saving be in the labor
necessary to the manufacture of the commodity itself, or in that necessary
to the formation of the capital, by the aid of which it is produced."

(Vol.I, p.28)

“Under such circumstance the value of the deer, the produce of the
hunter’s day’s labor, would be exactly equal to the value of the fish,
the produce of the fisherman’s day’s labor. The comparative value of the
fish and the game would be entirely regulated by the quantity of labor
realized in each, whatever might be the quantity of production, or however
high or low general wages or profits might be.”

(Vol.I, p.28)

“In making labor the foundation of the value of commodities and the
comparative quantity of labor which is necessary to their production, the
rule which determines the respective quantities of goods which shall be
given in exchange for each other, we must not be supposed to deny the accidental
and temporary deviations of the actual or market price of commodities from
this, their primary and natural price.”

(Vol.I, p.105, l. c.)

“It is the cost of production which must ultimately regulate the price
of commodities, and not, as has been often said, the proportion between
supply and demand.”

(Vol.II, p.253)

Lord Lauderdale had developed the variations of exchange value according
to the law of supply and demand, or of scarcity and abundance relatively
to demand. In his opinion the value of a thing can increase when its quantity
decreases or when the demand for it increases; it can decrease owing to
an increase of its quantity or owing to the decrease in demand. Thus the
value of a thing can change through eight different causes, namely, four
causes that apply to money or to any other commodity which serves as a
measure of its value. Here is Ricardo’s refutation:

“Commodities which are monopolized, either by an individual, or by
a company, vary according to the law which Lord Laudersdale has laid down:
they fall in proportion as the sellers augment their quantity, and rise
in proportion to the eagerness of the buyers to purchase them; their price
has no necessary connexion with their natural value; but the prices of
commodities, which are subject to competition, and whose quantity may be
increased in any moderate degree, will ultimately depend, not on the state
of demand and supply, but on the increased or diminished cost of their
production.”

(Vol.II, p.259)

We shall leave it to the reader to make the comparison between this simple,
clear, precise language of Ricardo’s and M. Proudhon’s rhetorical attempts
to arrive at the determination of relative value by labor time.

Ricardo shows us the real movement of bourgeois production, which
constitutes value. M. Proudhon, leaving the real movement out of account,
“fumes and frets” in order to invent new processes and to achieve the reorganization
of the world on a would-be new formula, which formula is no more than the
theoretical expression of the real movement which exists and which is so
well described by Ricardo. Ricardo takes his starting point from present-day
society to demonstrate to us how it constitutes value – M. Proudhon takes
constituted value as his starting point to construct a new social world
with the aid of this value. For him, M. Proudhon, constituted value must
move around and become once more the constituting factor in a world already
completely constituted according to this mode of evaluation. The determination
of value by labor time, is, for Ricardo, the law of exchange value; for
M. Proudhon. it is the synthesis of use value and exchange value. Ricardo’s
theory of values is the scientific interpretation of actual economic life;
M. Proudhon’s theory of values is the utopian interpretation of Ricardo’s
theory. Ricardo establishes the truth of his formula by deriving it from
all economic relations, and by explaining in this way all phenomena, even
those like ground rent, accumulation of capital and the relation of wages
to profits, which at first sight seems to contradict it; it is precisely
that which makes his doctrine a scientific system: M. Proudhon, who has
rediscovered this formula of Ricardo’s by means of quite arbitrary hypotheses,
is forced thereafter to seek out isolated economic facts which he twists
and falsifies to pass them off as examples, already existing applications,
beginning of realization of his regenerating idea. (See our S.3. Application of Constituted Value)

Now let us pass on to the conclusions M. Proudhon draws from value
constituted (by labor time).

- A certain quantity of labor is equivalent to the product created by this
same quantity of labor.

- Each day’s labor is worth as much as another day’s labor; that is to say,
if the quantities are equal, one man’s labor is worth as much as another
man’s labor: there is no qualitative difference. With the same quantity
of work, one man’s product can be given in exchange for another man’s product.
All men are wage workers getting equal pay for an equal time of work. Perfect
equality rules the exchanges.

Are these conclusions the strict, natural consequences of value “constituted"
or determined by labor time?

If the relative value of a commodity is determined by the quantity
of labor required to produce it, it follows naturally that the relative
value of labor, or wages, is likewise determined by the quantity of labor
needed to produce the wages. Wages, that is, the relative value or the
price of labor, are thus determined by the labor time needed to produce
all that is necessary for the maintenance of the worker.

"Diminish the cost of production of hats, and their price will ultimately
fall to their own new natural price, although the demand should be doubled,
trebled, or quadrupled. Diminish the cost of subsistence of men, by diminishing
the natural price of food and clothing, by which life is sustained, and
wages will ultimately fall, notwithstanding the demand for laborers may
very greatly increase."

(Ricardo, Vol.II, p.253)

Doubtless, Ricardo’s language is as cynical as can be. To put the cost
of manufacture of hats and the cost of maintenance of men on the same plane
is to turn men into hats. But do not make an outcry at the cynicism of
it. The cynicism is in the facts and not in the words which express the
facts. French writers like M.M. Droz, Blanqui, Rossi and others take an
innocent satisfaction in proving their superiority over the English economists,
by seeking to observe the etiquette of a “humanitarian” phraseology; if
they reproach Ricardo and his school for their cynical language, it is
because it annoys them to see economic relations exposed in all their crudity,
to see the mysteries of the bourgeoisie unmasked.

To sum up: Labor, being itself a commodity, is measured as such
by the labor time needed to produce the labor-commodity. And what is needed
to produce this labor-commodity? Just enough labor time to produce the
objects indispensable to the constant maintenance of labor, that is, to
keep the worker alive and in a condition to propagate his race. The natural
price of labor is no other than the wage minimum. [*2]
If the current rate of wages rises above this natural price, it is precisely
because the law of value put as a principle by M. Proudhon happens to be
counterbalanced by the consequences of the varying relations of supply
and demand. But the minimum wage is nonetheless the centre towards which
the current rates of wages gravitate.

Thus relative value, measured by labor time, is inevitably the
formula of the present enslavement of the worker, instead of being, as
M. Proudhon would have it, the “revolutionary theory” of the emancipation
of the proletariat.

Let us now see to what extent the application of labor time as
a measure of value is incompatible with the existing class antagonism and
the unequal distribution of the product between the immediate worker and
the owner of accumulated labor.

Let us take a particular product: broadcloth, which has required
the same quantity of labor as the linen.

If there is an exchange of these two products, there is an exchange
of equal quantities of labor. In exchanging these equal quantities of labor
time, one does not change the reciprocal position of the producers, any
more than one changes anything in the situation of the workers and manufacturers
among themselves. To say that this exchange of products measured by labor
time results in an equality of payment for all the producers is to suppose
that equality of participation in the product existed before the exchange.
When the exchange of broadcloth for linen has been accomplished, the producers
of broadcloth will share in the linen in a proportion equal to that in
which they previously shared in the broadcloth.

M. Proudhon’s illusion is brought about by his taking for a consequence
what could be at most but a gratuitous supposition.

Let us go further.

Does labor time, as the measure of value, suppose at least that
the days are equivalent, and that one man’s day is worth as much as another’s?
No.

Let us suppose for a moment that a jeweller’s day is equivalent
to three days of a weaver; the fact remains that any change in the value
of jewels relative to that of woven materials, unless it be the transitory
result of the fluctuations of supply and demand, must have as its cause
a reduction or an increase in the labor time expended in the production
of one or the other. If three working days of different workers be related
to one another in the ratio of 1:2:3, then every change in the relative
value of their products will be a change in this same proportion of 1:2:3.
Thus values can be measured by labor time, in spite of the inequality of
value of different working days; but to apply such a measure we must have
a comparative scale of the different working days: it is competition that
sets up this scale.

Is your hour’s labor worth mine? That is a question which is decided
by competition.

Competition, according to an American economist, determines how
many days of simple labor are contained in one day’s compound labor. Does
not this reduction of days of compound labor to days of simple labor suppose
that simple labor is itself taken as a measure of value? If the mere quantity
of labor functions as a measure of value regardless of quality, it presupposes
that simple labor has become the pivot of industry. It presupposes that
labor has been equalized by the subordination of man to the machine or
by the extreme division of labor; that men are effaced by their labor;
that the pendulum of the clock has become as accurate a measure of the
relative activity of two workers as it is of the speed of two locomotives.
Therefore, we should not say that one man’s hour is worth another man’s
hour, but rather that one man during an hour is worth just as much as another
man during an hour. Time is everything, man is nothing; he is, at the most,
time’s carcase. Quality no longer matters. Quantity alone decides everything;
hour for hour, day for day; but this equalizing of labor is not by any
means the work of M. Proudhon’s eternal justice; it is purely and simply
a fact of modern industry.

In the automatic workshop, one worker’s labor is scarely distinguishable
in any way from another worker’s labor: workers can only be distinguished
one from another by the length of time they take for their work. Nevertheless,
this quantitative difference becomes, from a certain point of view, qualitative,
in that the time they take for their work depends partly on purely material
causes, such as physical constitution, age and sex; partly on purely negative
moral causes, such as patience, imperturbability, diligence. In short,
if there is a difference of quality in the labor of different workers,
it is at most a quality of the last kind, which is far from being a distinctive
speciality. This is what the state of affairs in modern industry amounts
to in the last analysis. It is upon this equality, already realized in
automatic labor, that M. Proudhon wields his smoothing-plane of “equalization,”
which he means to establish universally in “time to come!”

All the “equalitarian” consequences which M. Proudhon deduces
from Ricardo's doctrine are based on a fundamental error. He confounds
the value of commodities measured by the quantity of labor embodied in
them with the value of commodities measured by “the value of labor.” If
these two ways of measuring the value of commodities were equivalent, it
could be said indifferently that the relative value of any commodity is
measured by the quantity of labor embodied in it; or that it is measured
by the quantity of labor it can buy; or again that it is measured by the
quantity of labor which can acquire it. But this is far from being so.
The value of labor can no more serve as a measure of value than the value
of any other commodity. A few examples will suffice to explain still better
what we have just stated.

If a quarter of corn cost two days' labor instead of one, it
would have twice its original value; but it would not set in operation
double the quantity of labor, because it would contain no more nutritive
matter than before. Thus the value of the corn, measured by the quantity
of labor used to produce it, would have doubled; but measured either by
the quantity of labor it can buy or the quantity of labor with which it
can be bought, it would be far from having doubled. On the other hand,
if the same labor produced twice as many clothes as before, their relative
value would fall by half; but, nevertheless, this double quantity of clothing
would not thereby be reduced to disposing over only half the quantity of
labor, nor could the same labor command the double quantity of clothing;
for half the clothes would still go on rendering the worker the same service
as before.

Thus it is going against economic facts to determine the relative
value of commodities by the value of labor. It is moving in a vicious circle,
it is to determine relative value by a relative value which itself needs
to be determined.

It is beyond doubt that M. Proudhon confuses the two measures,
measure by the labor time needed for the production of a commodity and
measure by the value of the labor. “Any man's labor,” he says, “can buy
the value it represents.” Thus, according to him, a certain quantity of
labor embodied in a product is equivalent to the worker's payment, that
is, to the value of labor. It is the same reasoning that makes him confuse
cost of production with wages.

“What are wages? They are the cost price of corn, etc., the integral
price of all things.”

Let us go still further.

“Wages are the proportionality of the elements which compose wealth.”
What are wages? They are the value of labor.

Adam Smith takes as the measure of value, now the time of labor needed
for the production of a commodity, now the value of labor. Ricardo exposes
this error by showing clearly the disparity of these two ways of measuring.
M. Proudhon goes one better than Adam Smith in error by identifying the
two things which the latter had merely put in juxtaposition.

It is in order to find the proper proportion in which workers
should share in the products, or, in other words, to determine the relative
value of labor, that M. Proudhon seeks a measure for the relative value
of commodities. To find out the measure for the relative value of commodities he
can think of nothing better than to give as the equivalent of a certain
quantity of labor the sum total of the products it has created, which is
as good as supposing that the whole of society consists merely of workers
who receive their own produce as wages. In the second place, he takes for
granted the equivalence of the working days of different workers. In short,
he seeks the measure of the relative value of commodities in order to arrive at equal payment for the workers, and he takes the equality of wages as an already established fact, in order to go off on the search for the relative value of commodities. What admirable dialectics!

“Say and the economists after him have observed that labor being itself
subject to valuation, being a commodity like any other commodity, it is
moving in a vicious circle to treat it as the principle and the determining
cause of value. In so doing, these economists, if they will allow me to
say so, show a prodigious carelessness. Labor is said to have value not
as a commodity itself, but in view of the values which it is supposed potentially
to contain. The value of labor is a figurative expression, an anticipation
of the cause for the effect. It is a fiction of the same stamp as the productivity
of capital. Labor produces, capital has value....

“By a sort of ellipsis one speaks of the value of labor....

“Labor like liberty... is a thing vague and indeterminate by nature,
but defined qualitatively by its object, that is to say, it becomes a reality
by the product.”

[I 61]

“But is there any need to dwell on this? The moment the economist (read
M. Proudhon) changes the name of things, vera rerum vocabula [the true
name of things], he is implicitly confessing his impotence and proclaiming
himself not privy to the cause."

(Proudhon, I, 188)

We have seen that M. Proudhon makes the value of labor the “determining
cause” of the value of products to such an extent that for him wages, the
official name for the “value of labor,” form the integral price of all
things: that is why Say's objection troubles him. In labor as a commodity,
which is a grim reality, he sees nothing but a grammatical ellipsis. Thus
the whole of existing society, founded on labor as a commodity, is henceforth
founded on a poetic licence, a figurative expression. If society wants
to “eliminate all the drawbacks” that assail it, well, let it eliminate
all the ill-sounding terms, change the language; and to this end it has
only to apply to the Academy for a new edition of its dictionary. After
all that we have just seen, it is easy for us to understand why M. Proudhon,
in a work on political economy, has to enter upon long dissertations on
etymology and other parts of grammar. Thus he is still learnedly discussing
the antiquated derivation of servus [a slave, servant] from servare [To preserve]. These philological
dissertations have a deep meaning, an esoteric meaning – they form an
essential part of M. Proudhon's argument.

Labor [3], inasmuch as it is bought and sold,
is a commodity like any other commodity, and has, in consequence, an exchange
value. But the value of labor, or labor as a commodity, produces as little
as the value of wheat, or wheat as a commodity, serves as food.

Labor “is worth” more or less, according to whether food commodities
are more or less dear, whether the supply and demand of hands exist to
such or such a degree, etc., etc.

Labor is not a “vague thing"; it is always some definite labor,
it is never labor in general that is bought and sold. It is not only labor
that is qualitatively defined by the object; but also the object which
is determined by the specific quality of labor.

Labor, in so far as it is bought and sold, is itself a commodity.
Why is it bought? “Because of the values it is supposed potentially to
contain.” But if a certain thing is said to be a commodity, there is no
longer any question as to the reason why it is bought, that is, as to the
utility to be derived from it, the application to be made of it. It is
a commodity as an object of traffic. All M. Proudhon's arguments are limited
to this: labor is not bought as an immediate object of consumption. No,
it is bought as an instrument of production, as a machine would be bought.
As a commodity, labor has no value and does not produce. M. Proudhon might
just as well have said that there is no such thing as a commodity, since
every commodity is obtained merely for some utilitarian purpose, and never
as a commodity in itself.

In measuring the value of commodities by labor, M. Proudhon vaguely
glimpses the impossibility of excluding labor from this same measure, in
so far as labor has a value, as labor is a commodity. He has a misgiving
that it is turning the wage minimum into the natural and normal price of
immediate labor, that it is accepting the existing state of society. So,
to get away from this fatal consequence, he faces about and asserts that
labor is not a commodity, that it cannot have value. He forgets that he
himself has taken the value of labor as a measure, he forgets that his
whole system rests on labor as a commodity, on labor which is bartered,
bought, sold, exchanged for produce, etc., on labor, in fact, which is
an immediate source of income for the worker. He forgets everything.

To save his system, he consents to sacrifice its basis.

Et propter vitam vivendi perdere causas!

We now come to a new definition of “constituted value.”

“Value is the proportional relation of the products which constitute
wealth.”

Let us note in the first place that the single phrase “relative or exchange
value” implies the idea of some relation in which products are exchanged
reciprocally. By giving the name “proportional relation” to this relation,
no change is made in the relative value, except in the expression. Neither
the depreciation nor the enhancement of the value of a product destroys
its quality of being in some “proportional relation” with the other products
which constitute wealth.

Why then this new term, which introduces no new idea?

“Proportional relation” suggests many other economic relations,
such as proportionality in production, the true proportion between supply
and demand, etc., and M. Proudhon is thinking of all that when he formulates
this didactic paraphrase of marketable value.

In the first place, the relative value of products being determined
by the comparative amount of labor used in the production of each of them,
proportional relations, applied to this special case, stand for the respective
quota of products which can be manufactured in a given time, and which
in consequence are given in exchange for one another.

Let us see what advantage M. Proudhon draws from this proportional
relation.

Everyone knows that when supply and demand are evenly balanced,
the relative value of any product is accurately determined by the quantity
of labor embodied in it, that is to say, that this relative value expresses
the proportional relation precisely in the sense we have just attached
to it. M. Proudhon inverts the order of things. Begin, he says, by measuring
the relative value of a product by the quantity of labor embodied in it,
and supply and demand will infallibly balance one another. Production will
correspond to consumption, the product will always be exchangeable. Its
current price will express exactly its true value. Instead of saying like
everyone else: when the weather is fine, a lot of people are to be seen
going out for a walk. M. Proudhon makes his people go out for a walk in
order to be able to ensure them fine weather.

What M. Proudhon gives as the consequence of marketable value
determined a priori by labor time could be justified only by a law couched
more or less in the following terms:

Products will in future be exchanged in the exact ratio of the
labor time they have cost. Whatever may be the proportion of supply to
demand, the exchange of commodities will always be made as if they had
been produced proportionately to the demand. Let M. Proudhon take it upon
himself to formulate and lay down such a law, and we shall relieve him
of the necessity of giving proofs. If, on the other hand, he insists on
justifying his theory, not as a legislator, but as an economist, he will
have to prove that the time needed to create a commodity indicates exactly
the degree of its utility and marks its proportional relation to the demand,
and in consequence, to the total amount of wealth. In this case, if a product
is sold at a price equal to its cost of production, supply and demand will
always be evenly balanced; for the cost of production is supposed to express
the true relation between supply and demand.

Actually, M. Proudhon sets out to prove that labor time needed
to create a product indicates its true proportional relation to needs,
so that the things whose production costs the least time are the most immediately
useful, and so on, step by step. The mere production of a luxury object
proves at once, according to this doctrine, that society has spare time
which allows it to satisfy a need for luxury.

M. Proudhon finds the very proof of his thesis in the observation
that the most useful things cost the least time to produce, that society
always begins with the easiest industries and successively “starts on the
production of objects which cost more labor time and which correspond to
a higher order of needs.”

M. Proudhon borrows from M. Dunoyer the example of extractive
industry – fruit-gathering, pasturage, hunting, fishing, etc. – which
is the simplest, the least costly of industries, and the one by which man
began “the first day of his second creation.” The first day of his first
creation is recorded in Genesis, which shows God as the world's first manufacturer.

Things happen in quite a different way from what M. Proudhon imagines.
The very moment civilization begins, production begins to be founded on
the antagonism of orders, estates, classes, and finally on the antagonism
of accumulated labor and actual labor. No antagonism, no progress. This
is the law that civilization has followed up to our days. Till now the
productive forces have been developed by virtue of this system of class
antagonisms. To say now that, because all the needs of all the workers
were satisfied, men could devote themselves to the creation of products
of a higher order – to more complicated industries – would be to leave
class antagonism out of account and turn all historical development upside
down. It is like saying that because, under the Roman emperors, muraena
were fattened in artificial fishponds, therefore there was enough to feed
abundantly the whole Roman population. Actually, on the contrary, the Roman
people had not enough to buy bread with, while the Roman aristocrats had
slaves enough to throw as fodder to the muraena.

The price of food has almost continuously risen, while the price
of manufactured and luxury goods has almost continuously fallen. Take the
agricultural industry itself; the most indispensable objects, like corn,
meat, etc., rise in price, while cotton, sugar, coffee, etc., fall in a
surprising proportion. And even among comestibles proper, the luxury articles,
like artichokes, asparagus, etc., are today relatively cheaper than foodstuffs
of prime necessity. In our age, the superfluous is easier to produce than
the necessary. Finally, at different historical epochs, the reciprocal
price relations are not only different, but opposed to one another. In
the whole of the Middle Ages, agricultural products were relatively cheaper
than manufactured products; in modern times they are in inverse ratio.
Does this mean that the utility of agricultural products has diminished
since the Middle Ages?

The use of products is determined by the social conditions in
which the consumers find themselves placed, and these conditions themselves
are based on class antagonism.

Cotton, potatoes and spirits are objects of the most common use.
Potatoes have engendered scrofula; cotton has to a great extent driven
out flax and wool, although wool and flax are, in many cases, of greater
utility, if only from the point of view of hygiene; finally, spirits have
got the upper hand of beer and wine, although spirits used as an alimentary
substance are everywhere recognized to be poison. For a whole century,
governments struggled in vain against the European opium; economics prevailed,
and dictated its orders to consumption.

Why are cotton, potatoes and spirits the pivots of bourgeois society?
Because the least amount of labor is needed to produce them, and, consequently,
they have the lowest price. Why does the minimum price determine the maximum
consumption? Is it by any chance because of the absolute utility of these
objects, their intrinsic utility, their utility insomuch as they correspond,
in the most useful manner, in the needs of the worker as a man, and not
to the man as a worker? No, it is because in a society founded on poverty
the poorest products have the fatal prerogative of being used by the greatest
number.

To say now that because the least costly things are in greater
use, they must be of greater utility, is saying that the wide use of spirits,
because of their low cost of production, is the most conclusive proof of
their utility; it is telling the proletarian that potatoes are more wholesome
for him than meat; it is accepting the present state of affairs; it is,
in short, making an apology, with M. Proudhon, for a society without understanding
it.

In a future society, in which class antagonism will have ceased,
in which there will no longer be any classes, use will no longer be determined
by the minimum time of production; but the time of production devoted to
different articles will be determined by the degree of their social utility.

To return to M. Proudhon's thesis: the moment the labor time necessary
for the production of an article ceases to be the expression of its degree
of utility, the exchange value of this same article, determined beforehand
by the labor time embodied in it, becomes quite usable to regulate the
true relation of supply to demand, that is, the proportional relation in
the sense M. Proudhon at the moment attributes to it.

It is not the sale of a given product at the price of its cost
of production that constitutes the “proportional relation” of supply to
demand, or the proportional quota of this product relatively to the sum
total of production; it is the variations in supply and demand that show
the producer what amount of a given commodity he must produce in order
to receive in exchange at least the cost of production. And as these variations
are continually occurring, there is also a continual movement of withdrawl
and application of capital in the different branches of industry.

“It is only in consequence of such variations that capital is apportioned
precisely, in the requisite abundance and no more, to the production of
the different commodities which happen to be in demand. With the rise or
fall of price, profits are elevated above, or depressed below their general
level, and capital is either encouraged to enter into, or is warned to
depart from, the particular employment in which the variation has taken
place.”

“When we look at the markets of a large town, and observe how
regularly they are supplied both with home and foreign commodities, in
the quantity in which they are required, under all the circumstances of
varying demand, arising from the caprice of taste, or a change in the amount
of population, without often producing either the effects of a glut from
a too abundant supply, or an enormously high price from the supply being
unequal to the demand, we must confess that the principle which apportions
capital to each trade in the precise amount that is required, is more active
than is generally supposed.”

(Ricardo, Vol.I, pp.105 and 108)

If M. Proudhon admits that the value of products is determined by labor
time, he should equally admit that it is the fluctuating movement alone
that in society founded on individual exchanges make labor the measure
of value. There is no ready-made constituted “proportional relation,” but
only a constituting movement.

We have just seen in what sense it is correct to speak of “proportion”
as of a consequence of value determined by labor time. We shall see now
how this measure by time, called by M. Proudhon the “law of proportion,”
becomes transformed into a law of disproportion.

Every new invention that enables the production in one hour of
that which has hitherto been produced in two hours depreciates all similar
products on the market. Competition forces the producer to sell the product
of two hours as cheaply as the product of one hour. Competition carries
into effect the law according to which the relative value of a product
is determined by the labor time needed to produce it. Labor time serving
as the measure of marketable value becomes in this way the law of the continual
depreciation of labor. We will say more. There will be depreciation not
only of the commodities brought into the market, but also of the instruments
of production and of whole plants. This fact was already pointed out by
Ricardo when he said:

“By constantly increasing the facility of production, we constantly
diminish the value of some of the commodities before produced.”

(Vol.II, p.59)

Sismondi goes further. He sees in this “value constituted” by labor time,
the source of all the contradictions of modern industry and commerce.

“Mercantile value,” he says, “is always determined in the long run
by the quantity of labor needed to obtain the thing evaluated: it is not
what it has actually cost, but what it would cost in the future with, perhaps,
perfected means; and this quantity, although difficult to evaluate, is
always faithfully established by competition....

“It is on this basis that the demand of the seller as well as
the supply of the buyer is reckoned. The former will perhaps declare that
the thing has cost him 10 days' labor; but if the latter realizes that
it can henceforth be produced with eight days' labor, in the event of competition
proving this to the two contracting parties, the value will be reduced,
and the market price fixed at eight days only. Of course, each of the parties
believes that the thing is useful, that it is desired, that without desire
there would be no sale; but the fixing of the price has nothing to do with
utility."

(Etudes, etc., Vol.II, p.267)

It is important to emphasize the point that what determines value is not
the time taken to produce a thing, but the minimum time it could possibly
be produced in, and the minimum is ascertained by competition. Suppose
for a moment that there is no more competition and consequently no longer
any means to ascertain the minimum of labor necessary for the production
of a commodity; what will happen? It will suffice to spend six hours' work on
the production of an object, in order to have the right, according to M.
Proudhon, to demand in exchange six times as much as the one who has taken
only one hour to produce the same object.

Instead of a “proportional relation,” we have a disproportional
relation, at any rate if we insist on sticking to relations, good or bad.

The continual depreciation of labor is only one side, one consequence
of the evaluation of commodities by labor time. The excessive raising of
prices, overproduction and many other features of industrial anarchy have
their explanation in this mode of evaluation.

But does labor time used as a measure of value give rise at least
to the proportional variety of products that so delights M. Proudhon?

On the contrary, monopoly in all its monotony follows in its wake
and invades the world of products, just as to everybody's knowledge monopoly
invades the world of the instruments of production. It is only in a few
branches of industry, like the cotton industry, that very rapid progress
can be made. The natural consequence of this progress is that the products
of cotton manufacture, for instance, fall rapidly in price: but as the
price of cotton goes down, the price of flax will be replaced by cotton.
In this way, flax has been driven out of almost the whole of North America.
And we have obtained, instead of the proportional variety of products,
the dominance of cotton.

What is left of this “proportional relation"? Nothing but the
pious wish of an honest man who would like commodities to be produced in
proportions which would permit of their being sold at an honest price.
In all ages good-natured bourgeois and philanthropic economists have taken
pleasure in expressing this innocent wish.

Let us hear what old Boisguillebert says:

“The price of commodities,” he says, “must always be proportionate;
for it is such mutual understanding alone that can enable them to exist
together so as to give themselves to one another at any moment (here is
M. Proudhon's continual exchangeability) and reciprocally give birth to
one another. ...

"As wealth, then, is nothing but this continual intercourse between
man and man, craft and craft, etc., it is a frightful blindness to go looking
for the cause of misery elsewhere than in the cessation of such traffic
brought about by a disturbance of proportion in prices."

(Dissertation sur la nature des richesses,

Daire's ed. [pp.405 and 408])

[Boisguillebert's work is quoted from the symposium

Economistes-financiers du XVIII siecle. Prefaced

by a historical sketch on each author and accompanied

by commentaries and explanatory notes by Eugene Daire;

Paris 1843.]

Let us listen also to a modern economist:

“The great law as necessary to be affixed to production, that is, the
law of proportion, which alone can preserve the continuity of value....

“The equivalent must be guaranteed....

“All nations have attempted, at various periods of their history,
by instituting numerous commercial regulations and restrictions, to effect,
in some degree, the object here explained....

“But the natural and inherent selfishness of man... has urged him
to break down all such regulations. Proportionate Production is the realization
of the entire truth of the Science of Social Economy."

(W. Atkinson, Principles of Political Economy,

London 1840, pp.170-95)

Fuit Troja. [Troy is no more.] This true proportion between supply
and demand, which is beginning once more to be the object of so many wishes,
ceased long ago to exist. It has passed into the stage of senility. It
was possible only at a time when the means of production were limited,
when the movement of exchange took place within very restricted bounds.
With the birth of large-scale industry this true proportion had to come
to an end, and production is inevitably compelled to pass in continuous
succession through vicissitudes of prosperity, depression, crisis, stagnation,
renewed prosperity, and so on.

Those who, like Sismondi, wish to return to the true proportion
of production, while preserving the present basis of society, are reactionary,
since, to be consistent, they must also wish to bring back all the other
conditions of industry of former times.

What kept production in true, or more or less true, proportions?
It was demand that dominated supply, that preceded it. Production followed
close on the heels of consumption. Large-scale industry, forced by the
very instruments at its disposal to produce on an ever-increasing scale,
can no longer wait for demand. Production precedes consumption, supply
compels demands.

In existing society, in industry based on individual exchange,
anarchy of production, which is the source of so much misery, is at the
same time the source of all progress.

Thus, one or the other:

Either you want the true proportions of past centuries with present-day
means of production, in which case you are both reactionary and utopian.

Or you want progress without anarchy: in which case, in order
to preserve the productive forces, you must abandon individual exchange.

Individual exchange is suited only to the small-scale industry of past
centuries with its corollary of “true proportion,” or else to large-scale
industry with all its train of misery and anarchy.

After all, the determination of value by labor time – the formula
M. Proudhon gives us as the regenerating formula of the future – is therefore
merely the scientific expression of the economic relations of present-day
society, as was clearly and precisely demonstrated by Ricardo long before
M. Proudhon.

But does the “equalitarian” application of this formula at least
belong to M. Proudhon? Was he the first to think of reforming society by
transforming all men into actual workers exchanging equal amounts of labor?
Is it really for him to reproach the Communists – these people devoid
of all knowledge of political economy, these “obstinately foolish men,”
these “paradise dreamers” – with not having found, before him, this “solution
of the problem of the proletariat”?

Anyone who is in any way familiar with the trend of political
economy in England cannot fail to know that almost all the Socialists in
that country have, at different periods, proposed the equalitarian application
of the Ricardian theory. We quote for M. Proudhon: Hodgskin, Political
Economy, 1827; William Thompson, An Inquiry into the Principles
of the Distribution of Wealth Most Conducive to Human Happiness, 1824;
T. R. Edmonds, Practical Moral and Political Economy, 1828 [18],
etc., etc., and four pages more of etc. We shall content ourselves with
listening to an English Communist, Mr. Bray. We shall give the decisive
passages in his remarkable work, Labor's Wrongs and Labor's Remedy,
Leeds, 1839, and we shall dwell some time upon it, firstly, because Mr.
Bray is still little known in France, and secondly, because we think that
we have discovered in him the key to the past, present and future works
of M. Proudhon.

“The only way to arrive at truth is to go at once to First Principles....
Let us... go at once to the source from whence governments themselves have
arisen.... By thus going to the origin of the thing, we shall find that
every form of government, and every social and governmental wrong, owes
its rise to the existing social system – to the institution of property
as it at present exists – and that, therefore, if we would end our wrongs
and our miseries at once and for ever, the present arrangements of society
must be totally subverted.... By thus fighting them upon their own ground,
and with their own weapons, we shall avoid that senseless clatter respecting
‘visionaries' and ‘theorists', with which they are so ready to assail all
who dare move one step from that beaten track which ‘by authority', has
been pronounced to be the right one. Before the conclusions arrived at
by such a course of proceeding can be overthrown, the economists must unsay
or disprove those established truths and principles on which their own
arguments are founded."

(Bray, pp.17 and 41)

“It is labor alone which bestows value....

“Every man has an undoubted right to all that his honest labor
can procure him. When he thus appropriates the fruits of his labor, he
commits no injustice upon any other human being; for he interferes with
no other man's right of doing the same with the produce of his labor....

“All these ideas of superior and inferior – of master and man
– may be traced to the neglect of First Principles, and to the consequent
rise of inequality of possessions; and such ideas will never be subverted,
so long as this inequality is maintained. Men have hitherto blindly hoped
to remedy the present unnatural state of things... by destroying existing
inequality; but it will be shortly seen... that misgovernment is not a
cause, but a consequence – that it is not the creator, but the created
– that is is the offspring of inequality of possessions; and that the
inequality of possessions is inseparably connected with our present social
system.”

(Bray, pp.33, 36 and 37)

“Not only are the greatest advantages, but strict justice also, on
the side of a system of equality.... Every man is a link, in the chain
of effects – the beginning of which is but an idea, and the end, perhaps,
the production of a piece of cloth. Thus, although we may entertain different
feelings towards the several parties, it does not follow that one should
be better paid for his labor than another. The inventor will ever receive,
in addition to his just pecuniary reward, that which genius only can obtain
from us – the tribune of our admiration....

“From the very nature of labor and exchange, strict justice not
only requires that all exchangers should be mutually, but that they should
likewise be equally, benefited. Men have only two things which they can
exchange with each other, namely, labor, and the produce of labor....

“If a just system of exchanges were acted upon, the value of articles
would be determined by the entire cost of production; and equal values
should always exchange for equal values. If, for instance, it takes a hatter
one day to make a hat, and a shoemaker the same time to make a pair of
shoes – supposing the material used by each to be of the same value –
and they exchange these articles with each other, they are not only mutually
but equally benefited: the advantage derived by either party cannot be
a disadvantage to the other, as each has given the same amount of labor,
and the materials made use of by each were of equal value. But if the hatter
should obtain two pair of shoes for one hat – time and value of material
being as before – the exchange would clearly be an unjust one. The hatter
would defraud the shoemaker of one day's labor; and were the former to
act thus in all his exchanges, he would receive, for the labor of half
a year, the product of some other person's whole year. We have heretofore
acted upon no other than this most unjust system of exchanges – the workmen
have given the capitalist the labor of a whole year, in exchange for the
value of only half a year – and from this, and not from the assumed inequality
of bodily and mental powers in individuals, has arisen the inequality of
wealth and power which at present exists around us. It is an inevitable
condition inequality of exchanges – of buying at one price and selling
at another – that capitalists shall continue to be capitalists, and working
men to be working men – the one a class of tyrants and the other a class
of slaves – to eternity....

“The whole transaction, therefore, plainly shews that the capitalists
and proprietors do no more than give the working man, for his labor of
one week, a part of the wealth which they obtained from him the week before!
– which amounts to giving him nothing for something....

“The whole transaction, therefore, between the producer and the
capitalist is a palpable deception, a mere farce: it is, in fact, in thousands
of instances, no other than a barefaced though legalized robbery."

(Bray, pp.45, 48, 49 and 50)

“... the gain of the employer will never cease to be the loss of the
employed – until the exchanges between the parties are equal; and exchanges
never can be equal while society is divided into capitalists and producers
– the last living upon their labor and the first bloating upon the profit
of that labor.

“It is plain that, establish whatever form
of government we will... we may talk of morality and brotherly love...
no reciprocity can exist where there are unequal exchanges. Inequality
of exchanges, as being the cause of inequality of possessions, is the secret
enemy that devours us."

(Bray, pp.51 and 52)

“It has been deduced, also, from a consideration of the intention and
end of society, not only that all men should labor, and thereby become
exchangers, but that equal values should always exchange for equal values
– and that, as the gain of one man ought never to be the loss of another,
value should be determined by cost of production. But we have seen, that,
under the present arrangements of society... the gain of the capitalist
and the rich man is always the loss of the workman – that this result
will invariably take place, and the poor man be left entirely at the mercy
of the rich man, under any and every form of government, so long as there
is inequality of exchanges – and that equality of exchanges can be ensured
only under social arrangements in which labor is universal....

“If exchanges were equal, would the wealth of the present capitalists
gradually go from them to the working classes.”

(Bray, pp.53-55)

“So long as this system of unequal exchanges is tolerated, the producers
will be almost as poor and as ignorant and as hardworked as they are at
present, even if every governmental burthen be swept away and all taxes
be abolished... nothing but a total change of this system – an equality
of labor and exchanges – can alter this state of rights....

“The producers have but to make an effort – and by them must
every effort for their own redemption be made – and their chains will
be snapped asunder forever....

“As an end, the political equality is there a failure, as a means,
also, it is there a failure.

“Where equal exchanges are maintained, the gain of one man cannot
be the loss of another; for every exchange is then simply a transfer, and
not a sacrifice of labor and wealth. Thus, although under a social system
based on equal exchanges, a parsimonious man may become rich, his wealth
will be no more than the accumulated produce of his own labor. He may exchange
his wealth, or he may give it to others... but a rich man cannot continue
wealthy for any length of time after he has ceased to labor. Under equality
of exchanges, wealth cannot have, as it now has, a procreative and apparently
self-generating power, such as replenishes all waste from consumption;
for, unless it be renewed by labor, wealth, when once consumed, is given
up for ever. That which is now called profit and interest cannot exist
as such in connection with equality of exchanges; for producer and distributor
would be alike remunerated, and the sum total of their labor would determine
the value of the article created and brought to the hands of the consumer....

“The principle of equal exchanges, therefore, must from its very
nature ensure universal labor."

(Bray, pp.67, 88, 89, 94, 109-10)

After having refuted the objections of the economists to communism, Mr.
Bray goes on to say:

“If, then a changed character be essential to the success of the social
system of community in its most perfect form – and if, likewise, the present
system affords no circumstances and no facilities for effecting the requisite
change of character and preparing man for the higher and better state desired
– it is evident that these things must necessarily remain as they are....
or else some preparatory step must be discovered and made use of – some
movement partaking partly of the present and partly of the desired system
– some intermediate resting place, to which society may go with all its
faults and its follies, and from which it may move forward, imbued with
those qualities and attributes without which the system of community and
equality cannot as such have existence.”

(Bray, p.134)

“The whole movement would require only co-operation in its simplest
form.... Cost of production would in every instance determine value; and
equal values would always exchange for equal values. If one person worked
a whole week, and another worked only half a week, the first would receive
double the remuneration of the last; but this extra pay of the one would
not be at the expense of the other, nor would the loss incurred by the
last man fall in any way upon the first. Each person would exchange the
wages he individually received for commodities of the same value as his
respective wages; and in no case could the gain of one man or one trade
be a loss to another man or another trade. The labor of every individual
would alone determine his gains of his losses....

“... By means of general and local boards of trade... the quantities
of the various commodities required for consumption – the relative value
of each in regard to each other – the number of hands required in various
trades and descriptions of labor – and all other matters connected with
production and distribution, could in a short time be as easily determined
for a nation as for an individual company under the present arrangements....

“As individuals compose families, and families towns, under the
existing system, so likewise would they after the joint-stock change had
been effected. The present distribution of people in towns and villages,
bad as it is, would not be directly interfered with....

“Under this joint-stock system, the same as under that now existing,
every individual would be at liberty to accumulate as much as he pleased,
and to enjoy such accumulations when and where he might think proper....

“The great productive section of the community... is divided into
an indefinite number of smaller sections, all working, producing and exchanging
their products on a footing of the most perfect equality....

“And the joint-stock modification (which is nothing but a concession
to present-day society in order to obtain communism), by being so constituted
as to admit of individual property in productions in connection with a
common property in productive powers – making every individual dependent
on his own exertions, and at the same time allowing him an equal participation
in every advantage afforded by nature and art – is fitted to take society
as it is, and to prepare the way for other and better changes."

(Bray, pp.158, 160, 162, 168 and 194)

We now only need to reply in a few words to Mr. Bray who without us and
in spite of us had managed to supplant M. Proudhon, except that Mr. Bray,
far from claiming the last word on behalf of humanity, proposes merely
measures which he thinks good for a period of transition between existing
society and a community regime.

One hour of Peter's labor exchanges for one hour of Paul's labor.
That is Mr. Bray's fundamental axiom.

Let us suppose Peter has 12 hours' labor before him, and Paul
only six. Peter will consequently have six hours' labor left over. What
will he do with these six hours' labor?

Either he will do nothing with them – in which case he will have
worked six hours for nothing; or else he will remain idle for another six
hours to get even; or else, as a last resource, he will give these six
hours' labor, which he has no use for, to Paul into the bargain.

What in the end will Peter have earned more than Paul? Some hours
of labor? No! He will have gained only hours of leisure; he will be forced
to play the loafer for six hours. And in order that this new right to loaf
might be not only relished but sought after in the new society, this society
would have to find in idleness its highest bliss, and to look upon labor
as a heavy shackle from which it must break free at all costs.

And indeed, to return to our example, if only these hours of leisure
that Peter had gained in excess of Paul were really a gain! Not in the
least. Paul, beginning by working only six hours, attains by steady and
regular work a result that Peter secures only by beginning with an excess
of work. Everyone will want to be Paul, there will be a competition to
occupy Paul's position, a competition in idleness.

Well, then! What has the exchange of equal quantities of labor
brought us? Overproduction, depreciation, excess of labor followed by unemployment;
in short, economic relations such as we see in present-day society, minus
the competition of labor.

No! We are wrong! These is still an expedient which may save this
new society of Peters and Pauls. Peter will consume by himself the product
of the six hours' labor which he has left. But from the moment he has no
longer to exchange because he has produced, he has no need to produce for
exchange; and the whole hypothesis of a society founded on the exchange
and division of labor will fall to the ground. Equality of exchange will
have been saved by the simple fact that exchange will have ceased to be:
Paul and Peter would arrive at the position of Robinson.

Thus, if all the members of society are supposed to be actual
workers, the exchange of equal quantities of hours of labor is possible
only on condition that the number of hours to be spent on material production
is agreed on before hand. But such an agreement negates individual exchange.

We still come to the same result, if we take as our starting point
not the distribution of the products created but the act of production.
In large-scale industry, Peter is not free to fix for himself the time
of his labor, for Peter's labor is nothing without the co-operation of
all the Peters and all the Pauls who make up the workshop. This explains
very well the dogged resistance which the English factory owners put up
to the Ten Hours' Bill. They knew only too well that a two-hours' reduction
of labor granted to women and children would carry
with it an equal reduction of working hours for adult men. It is in the
nature of large-scale industry that working hours should be equal for all.
What is today the result of capital and the competition of workers among
themselves will be tomorrow, if you sever the relation between labor and
capital, an actual agreement based upon the relation between the sum of
productive forces and the sum of existing needs.

But such an agreement is a condemnation of individual exchange,
and we are back again at our first conclusion!

In principle, there is no exchange of products – but there is
the exchange of the labor which co-operated in production. The mode of
exchange of products depends upon the mode of exchange of the productive
forces. In general, the form of exchange of products corresponds to the
form of production. Change the latter, and the former will change in consequence.
Thus in the history of society we see that the mode of exchanging products
is regulated by the mode of producing them. Individual exchange corresponds
also to a definite mode of production which itself corresponds to class
antagonism. There is thus no individual exchange without the antagonism
of classes.

But the respectable conscience refuses to see this obvious fact.
So long as one is a bourgeois, one cannot but see in this relation of antagonism
a relation of harmony and eternal justice, which allows no one to gain
at the expense of another. For the bourgeois, individual exchange can exist
without any antagonism of classes. For him, these are two quite unconnected
things. Individual exchange, as the bourgeois conceives it, is far from
resembling individual exchange as it actually exists in practice.

Mr. Bray turns the illusion of the respectable bourgeois into
an ideal he would like to attain. In a purified individual exchange, freed
from all the elements of antagonism he finds in it, he sees an “equalitarian"
relation which he would like society to adopt generally.

Mr. Bray does not see that this equalitarian relation, this corrective
ideal that he would like to apply to the world, is itself nothing but the
reflection of the actual world; and that therefore it is totally impossible
to reconstitute society on the basis of what is merely an embellished shadow
of it. In proportion as this shadow takes on substance again, we perceive
that this substance, far from being the transfiguration dreamt of, is the
actual body of existing society. [*3]

Footnotes

[*1]
Ricardo, as is well known, determines the value of a commodity by the quantity
of labor necessary for its production. Owing, however, to the prevailing
form of exchange in every mode of production based on production of commodities,
including therefore the capitalist mode of production, this value is not
expressed directly in quantities of labor but in quantities of some other
commodity. The value of a commodity expressed in a quantity of some other
commodity (whether money or not) is termed by Ricardo its relative value. [Note by Engels to 1885 German edition]

[*2]
The thesis that the “natural,” i.e., normal, price of labor
power coincides with the wage minimum, i.e., with the equivalent in value
of the means of subsistence absolutely indispensable for the life and procreation
of the worker, was first put forward by me in Sketches for a Critique
of Political Economy (Deutsch-Franzosische Jahrbucher , Paris 1844) and in The Condition of the Working Class in England
in 1844. As seen here, Marx at that time accepted the thesis. Lassalle
took it over from both of us. Although, however, in reality wages have
a constant tendency to approach the minimum, the above thesis is nevertheless
incorrect. The fact that labor is regularly and on the average paid below
its value cannot alter its value. In Capital, Marx has put the above
thesis right (Section on Buying and Selling of Labor Power) and also (Chapter
25: The General Law of Capitalist Accumulation) analyzed the circumstances
which permit capitalist production to depress the price of labor power
more and more below its value.[Note by Engels to 1885 German edition]

In the copy Marx presented to N. Utina
in 1876 after this word “labor” Marx adds “labor power"; this addition
is found in the 1896 French edition.

[*3]
Mr. Bray's theory,
like all theories, has found supporters who have allowed themselves to
be deluded by appearances. Equitable labor-exchange bazaars have been set
up in London, Sheffield, Leeds and many other towns in England. These bazaars
have all ended in scandalous failures after having absorbed considerable
capital. The taste for them has gone for ever. You are warned, M. Proudhon!
[Note by Marx]

It is known
that Proudhon did not take this warning to heart. In 1849 he himself made
an attempt with a new Exchange Bank in Paris. The bank, however, failed
before it had got going properly: a court case against Proudhon had to
serve to cover its collapse. [Note by Engels, 1885 German Edition]

### 3. Application of the Law of the Proportionality of Value

A) Money

“Gold and silver were the first commodities to have their value constituted."

[Vol, I p. 80]

Thus, gold and silver are the first applications of
“value constituted” ... by M. Proudhon. And as M. Proudhon constitutes
the value of products determining it by the comparative amount of labour
embodied in them, the only thing he had to do was to prove that variations
in the value of gold and silver are always explained by variations in the
labour time taken to produce them. M. Proudhon has no intention of doing
so. He speaks of gold and silver not as commodities, but as money.

His only logic, if logic it be, consists in juggling with the
capacity of gold and silver to be used as money for the benefit of all
the commodities which have the property of being evaluated by labour time.
Decidedly there is more naïveté than malice in this jugglery.

A useful product, once it has been evaluated by the labour time
needed to produce it, is always acceptable in exchange; witness, cries
M. Proudhon, gold and silver, which exist in my desired conditions of “exchangeability"!
Gold and silver, then, are value which has reached a state of constitution:
they are the incorporation of M. Proudhon's idea. He could not have been
happier in his choice of an example. Gold and silver, apart from their
capacity of being commodities, evaluated like other commodities, in labour
time, have also the capacity of being the universal agents of exchange,
of being money. By now considering gold and silver as an application of
“value constituted” by labour time, nothing is easier than to prove that
all commodities whose value is constituted by labour time will always be
exchangeable, will be money.

A very simple question occurs to M. Proudhon. Why have gold and
silver the privilege of typifying “constituted value”?

“The special function which usage has devolved upon the precious metal,
that of serving as a medium for trade, is purely conventional, and any
other commodity could, less conveniently perhaps, but just as reliably,
fulfil this function. Economists recognize this, and cite more than one
example. What then is the reason for this universal preference for metals
as money? And what is the explanation of this specialization of the function
of money – which has no analogy in political economy?... Is it possible
to reconstruct the series from which money seems to have broken away, and
hence to trace it back to its true principle?”

[Vol. I, pp. 68-69]

Straight away, by formulating the question in these terms, M. Proudhon
has presupposed the existence of money. The first question he should
have asked himself was, why, in exchanges as they are actually constituted,
it has been necessary to individualize exchangeable value, so to speak,
by the creation of a special agent of exchange. Money is not a thing, it
is a social relation. Why is the money relation a production relation like
any other economic relation, such as the division of labour, etc.? If M.
Proudhon had properly taken account of this relation, he would not have
seen in money an exception, an element detached from a series unknown or
needing reconstruction.

He would have realised, on the contrary, that this relation is
a link, and, as such, closely connected with a whole chain of other economic
relations; that this relation corresponds to a definite mode of production
neither more nor less than does individual exchange. What does he do? He
starts off by detaching money from the actual mode of production as a whole,
and then makes it the first member of an imaginary series, of a series
to be reconstructed.

Once the necessity for a specific agency of exchange, that is,
for money, has been recognized, all that remains to be explained is why
this particular function has developed upon gold and silver rather than
upon any commodity. This is a secondary question, which is explained not
by the chain of production relations, but by the specific qualities inherent
in gold and silver as substances. If all this has made economists for once
"go outside the domains of their own science, to dabble in physics, mechanics,
history and so on,” as M. Proudhon reproaches them with doing, they have
merely done what they were compelled to do. The question was no longer
within the domain of political economy.

“What no economist,” says M. Proudhon, “has either seen or understood
is the economic reason which has determined, in favour of the precious metals,
the favor they enjoy.”

[Vol. I, p. 69]

This economic reason which nobody – with good ground indeed – has seen
or understood, M. Proudhon has seen, understood and bequeathed to posterity.

“What nobody else has noticed is that, of all commodities, gold and
silver were the first to have their value attain constitution. In the patriarchal
period, gold and silver were still bartered and exchanged in ingots but
even then they showed a visible tendency to become dominant and received
a marked degree of preference. Little by little the sovereigns took possession
of them and affixed their seal to them: and of this sovereign consecration
was born money, that is, the commodity par excellence. which, notwithstanding
all the shocks of commerce, retains a definite proportional value and makes
itself accepted for all payments....

“The distinguishing character of gold and silver is due, I repeat,
to the fact that, thanks to their metallic properties, to the difficulties
of their production, and above all to the intervention of state authority,
they early won stability and authenticity as commodities.”

To say that, of all commodities, gold and silver were the first to have
their value constituted, is to say, after all that has gone before, that
gold and silver were the first to attain the status of money. This is M.
Proudhon's great revelation, this is the truth that none had discovered
before him.

If, by these words, M. Proudhon means that of all commodities,
gold and silver are the ones whose time of production was known the earliest,
this would be yet another of the suppositions with which he is so ready
to regale his readers. If we wished to harp on this patriarchal erudition,
we would inform M. Proudhon that it was the time needed to produce objects
of prime necessity, such as iron, etc., which was the first to be known.
We shall spare him Adam Smith's classic bow.

But, after all that, how can M. Proudhon go on talking about the
constitution of a value, since a value is never constituted by itself?
It is constituted, not by the time needed to produce it by itself, but
in relation to the quota of each and every other product which can be created
in the same time. Thus the constitution of the value of gold and silver
presupposes an already completed constitution of a number of other products.

It is then not the commodity that has attained, in gold and silver,
the status of “constituted value,” it is M. Proudhon's “constituted value”
that has attained, in gold and silver, the status of money.

Let us now make a closer examination of these “economic reasons”
which, according to M. Proudhon, have bestowed upon gold and silver the
advantage of being raised to the status of money sooner than other products,
thanks to their having passed through the constitutive phase of value.

These economic reasons are: the “visible tendency to become dominant,”
the “marked preferences” even in the “patriarchal period,” and other circumlocutions
about the actual fact – which increase the difficulty, since they multiply
the fact by multiplying the incidents which M. Proudhon brings in to explain
the fact. M. Proudhon has not yet exhausted all the so-called economic
reasons. Here is one of sovereign, irresistible force:

“Money is born of sovereign consecration: the sovereigns take possession
of gold and silver and affix their seal to them.”

[Vol. I, p. 69]

Thus, the whim of sovereigns is for M. Proudhon the highest reason in political
economy.

Truly, one must be destitute of all historical knowledge not to
know that it is the sovereigns who in all ages have been subject to economic
conditions, but they have never dictated laws to them. Legislation, whether
political or civil, never does more than proclaim, express in words, the
will of economic relations.

Was it the sovereign who took possession of gold and silver to
make them the universal agents of exchange by affixing his seal to them?
Or was it not, rather, these universal agents of exchange which took possession
of the sovereign and forced him to affix his seal to them and thus give
them a political consecration?

The impress which was and is still given to money is not that
of its value but of its weight. The stability and authenticity M. Proudhon
speaks of apply only to the standard of the money ; and this standard indicates
how much metallic matter there is in a coined piece of money.

“The sole intrinsic value of a silver mark,” says Voltaire, with his
habitual good sense, “is a mark of silver, half a pound weighing eight
ounces. The weight and the standard alone form this intrinsic value.”

(Voltaire, Systeme de Law)

[Marx quotes a chapter from Voltaire's Historie de

parlement. It is entitled “France in the Period of the

Regency and Law's System.” ]

But the question: how much is an ounce of gold or silver worth, remains
nonetheless. If a cashmere from the Grand Colbert stores bore the
trademark pure wool, this trademark would not tell you the value of the
cashmere. There would still remain the question: how much is wool worth?

“Philip I, King of France,” says M. Proudhon, “mixes with Charlemagne's
gold pound a third of alloy, imagining that, having the monopoly of the
manufacture of money, he could do what is done by every tradesman who has the monopoly
of a product. What was actually this debasement of the currency from which
Philip and his successors have been so much blamed? It was perfectly sound
reasoning from the point of view of commercial practice, but very unsound
economic science, viz., to suppose that, as supply and demand regulate
value, it is possible, either by producing an artificial scarcity or by
monopolizing manufacture, to increase the estimation and consequently the
value of things; and that this is true of gold and silver as of corn, wine,
oil or tobacco. But Philip's fraud was no sooner suspected than his money
was reduced to its true value, and he himself lost what he had thought
to gain from his subjects. The same thing has happened as a result of every
similar attempt.”

[Vol. I, pp. 70-71]

It has been proved times without number that, if a prince takes into his
head to debase the currency, it is he who loses. What he gains once at
the first issue he loses every time the falsified coinage returns to him
in the form of taxes, etc. But Philip and his successors were able to protect
themselves more or less against this loss, for, once the debased coinage
was put into circulation, they hastened to order a general re-minting of
money on the old footing.

And besides, if Philip I had really reasoned like M. Proudhon,
he would not have reasoned well “from the commercial point of view.” Neither
Philip I nor M. Proudhon displays any mercantile genius in imagining that
it is possible to alter the value of gold as well as that of every other
commodity merely because their value is determined by the relation between
supply and demand.

If King Philip had decreed that one quarter of corn was in future
to be called two quarters of wheat, he would have been a swindler. He would
have deceived all the rentiers, all the people who were entitled to receive
100 quarters of corn. He would have been the cause of all these people
receiving only 50 quarters of corn; he would have had to pay only 50.
But in commerce 100 such quarters would never have been worth more than
50. By changing the name we do not change the thing. The quantity of corn,
whither supplied or demanded, will be neither decreased nor increased by
this mere change of name. Thus, the relation between supply and demand
being just the same in spite of this change of name, the price of corn
will undergo no real change. When we speak of the supply and demand of
things, we do not speak of the supply and demand of the name of things.
Philip I was not a maker of gold and silver, as M. Proudhon says; he was
a maker of names for coins. Pass off your French cashmeres as Asiatic cashmeres,
and you may deceive a buyer or two; but once the fraud becomes known, your
so-called Asiatic cashmeres will drop to the price of French cashmeres.
When he put a false label on gold and silver, King Philip could deceive
only so long as the fraud was not known. Like any other shopkeeper, he
deceived his customers by a false description of his wares, which could
not last for long. He was bound sooner or later to suffer the rigour of
commercial laws. Is this what M. Proudhon wanted to prove? No. According
to him, it is from the sovereign and not from commerce that money gets
its value. And what has he really proved? That commerce is more sovereign
than the sovereign. Let the sovereign decree that one mark shall in future
be two marks, commerce will keep on saying that these two marks are worth
no more than one mark was formerly.

But, for all that, the question of value determined by the quantity
of labour has not been advanced a step. It still remains to be decided whether
the value of these two marks (which have become what one mark was once)
is determined by the cost of production or by the law of supply and demand.

M. Proudhon continues: “It should even be borne in mind that if, instead
of debasing the currency, it had been in the king's power to double its
bulk, the exchange value of gold and silver would immediately have dropped
by half, always from reasons of proportion and equilibrium.”

[(Vol. I, p. 71]

If this opinion, which M. Proudhon shares with the other economists, is
valid, it argues in favor of the latter's doctrine of supply and demand,
and in no way in favor of M. Proudhon's proportionality. For, whatever
the quantity of labour embodied in the doubled bulk of gold and silver,
its value would have dropped by half, the demand having remained the same
and the supply having doubled. Or can it be, by any chance, that the “law
of proportionality” would have become confused this time with the so much
disdained law of supply and demand? This true proportion of M. Proudhon's
is indeed so elastic, is capable of so many variations, combinations and
permutations, that it might well coincide for once with the relation between
supply and demand.

To make “every commodity acceptable in exchange, if not in practice
then at least by right,” on the basis of the role of gold and silver is,
then, to misunderstand this role. Gold and silver are acceptable by law
only because they are acceptable in practice; and they are acceptable in
practice because the present organization of production needs a universal
medium of exchange. Law is only the official recognition of fact.

We have seen that the example of money as an application of value
which has attained constitution was chosen by M. Proudhon only to smuggle
through his whole doctrine of exchangeability, that is to say, to prove
that every commodity assessed by its cost of production must attain the
status of money. All this would be very fine, were it not for the awkward
fact that precisely gold and silver, as money, are of all commodities the
only ones not determined by their cost of production; and this is so true
that in circulation they can be replaced by paper. So long as there is
a certain proportion observed between the requirements of circulation and
the amount of money issued, be it paper, gold, platinum, or copper money,
there can be no question of a proportion to be observed between the intrinsic
value (cost of production) and the nominal value of money. Doubtless, in
international trade, money is determined, like any other commodity, by
labour time. But it is also true that gold and silver in international trade
are means of exchange as products and not as money. In other words, they
lose this characteristic of “stability and authenticity,” of “sovereign
consecration,” which, for M. Proudhon, forms their specific characteristic.
Ricardo understood the truth so well that, after basing his whole system
on value determined by labour time, and after saying:

“Gold and silver, like all other commodities, are valuable only in
proportion to the quantity of labour necessary to produce them, and bring
them to market,”

He adds, nevertheless, that the value of money is not determined
by the labour time its substance embodies, but by the law of supply and
demand only.

“Though it [paper money] has no intrinsic value, yet, by limiting its
quantity, its value in exchange is as great as an equal denomination of
coin, or of bullion in that coin. On the same principle, too, namely, by
limitation of its quantity, a debased coin would circulate at the value
it should bear, if it were of the legal weight and fineness, and not at
the value of the quantity of metal which it actually contained. In the
history of the British coinage, we find, accordingly, that the currency
was never depreciated in the same proportion that it was debased; the reason
of which was, that it never was increased in quantity, in proportion to
its diminished intrinsic value.”

(Ricardo, loc. cit. [pp.206-07])

This is what J. B. Say observes on this passage of Ricardo's:

“This example should suffice, I think, to convince the author that
the basis of all value is not the amount of labour needed to make a commodity,
but the need felt for that commodity, balanced by its scarcity.”

[ The reference is to Say's note on the French edition

of Ricardo's book, Vol.II, pp.206-07]

Thus money, which for Ricardo is no longer a value determined by labour
time, and which J. B. Say therefore takes as an example to convince Ricardo
that the other values could not be determined by labour time either, this
money, I say, taken by J. B. Say as an example of a value determined exclusively
by supply and demand, becomes for M. Proudhon the example par excellence
of the application of value constituted... by labour time.

To conclude, if money is not a value “constituted” by labour time,
it is all the less likely that it could have anything in common with M.
Proudhon's true “proportion.” Gold and silver are always exchangeable,
because they have the special function of serving as the universal agent
of exchange, and in no wise because they exist in a quantity proportional
to the sum total of wealth; or, to put it still better, they are always
proportional because, alone of all commodities, they serve as money, the
universal agent of exchange, whatever their quantity in relation to the
sum total of wealth.

“A circulation can never be so abundant as to overflow; for by diminishing
its value, in the same proportion you will increase its quantity, and by
increasing its value, diminish its quantity.”

(Ricardo [Vol. II, p. 205])

“What an imbroglio this political economy is!” cries M. Proudhon. [Vol. I, p. 72]

“Cursed gold!” cries a Communist flippantly [through the mouth
of M. Proudhon]. You might as well say: “Cursed wheat, cursed vines, cursed
sheep! – for just like gold and silver, every commercial value must attain
its strictly exact determination.” [Vol. I, p. 73]

The idea of making sheep and vines attain the status of money
is not new. In France, it belongs to the age of Louis XIV. At that period,
money having begun to establish its omnipotence, the depreciation of all
other commodities was being complained of, and the time when “every commercial
value” might attain its strictly exact determination, the status of money,
was being eagerly invoked. Even in the writings of Boisguillebert, one
of the oldest of French economists, we find:

“Money, then, by the arrival of innumerable competitors in the form
of commodities themselves, re-established in their true values, will be
thrust back again within its natural limits.”

(Economistes financiers du dix-huitieme

siecle, Daire edition, p.422)

One sees that the first illusions of the bourgeoisie are also their last.

B) Surplus labour

“In works on political economy we read this absurd hypothesis: If
the price of everything were doubled.... As if the price of everything
were not the proportion of things – and one could double a proportion,
a relation, a law!”

(Proudhon, Vol.I, p.81)

Economists have fallen into this error through not knowing how to apply
the “law of proportionality” and of “constituted value."

Unfortunately in the very same work by M. Proudhon, Volume I,
p.110, we read the absurd hypothesis that, “if wages rose generally, the
price of every thing else would rise.” Furthermore, if we find the phrase
in question in works on political economy, we also find an explanation
of it.

“When one speaks of the price of all commodities going up or down,
one always excludes some one commodity going up or down. The excluded commodity
is, in general, money or labour."

(Encyclopedia Metropolitana or Universal Dictionary
of

Knowledge, Vol.IV, Article “Political Economy", by [N. W.]

Senior, London, 1836. Regarding the phrase under discussion,

see also J. St. Mill: Essays on Some Unsettled Questions

of Political Economy, London 1844, and Tooke: A History of

Prices, etc., London 1838.) [Full reference is Th. Tooke,

A History of Prices, and of the State of the Circulation,

from 1793 to 1837, Vols.I-II, London, 1838]

Let us pass now to the second application of “constituted value,” and of
other proportions – whose only defect is their lack of proportion. And
let us see whether M. Proudhon is happier here than in the monetarization
of sheep.

“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 [3Vol. I, p. 73])

To prove that all labour must leave a surplus, M. Proudhon personifies society;
he turns it into a person, Society – a society which is not by any means
a society of persons, since it has its law apart, which have nothing in
common with the persons of which society is composed, and its “own intelligence,”
which is not the intelligence of common men, but an intelligence devoid
of common sense. M. Proudhon reproaches the economists with not having
understood the personality of this collective being. We have pleasure in
confronting him with the following passage from an American economist,
who accuses the economists of just the opposite:

“The moral entity – the grammatical being called a nation, has been
clothed in attributes that have no real existence except in the imagination
of those who metamorphose a word into a thing.... This has given rise to
many difficulties and to some deplorable misunderstanding in political
economy.”

(Th. Cooper, Lectures on the Elements of

Political Economy, Columbia, 1826)

[The first edition of the book was published

in Colombia in 1826. A second, enlarged

edition appeared in London in 1831.]

“This principle of surplus labour,” continues M. Proudhon, “is true
of individuals only because it emanates from society, which thus confers
on them the benefit of its own laws."

[Vol. I, p. 75]

Does M. Proudhon mean thereby merely that the production of the social
individual exceeds that of the isolated individual? Is M. Proudhon referring
to this excess of the production of associated individuals over that of
non-associated individuals? If so, we could quote for him a hundred economists
who have expressed this simple truth without any of the mysticism with
which M. Proudhon surrounds himself. This, for example, is what Mr. Sadler
says:

“Combined labour produces results which individual exertion could never
accomplish. As mankind, therefore, multiply in number, the products of
their united industry would greatly exceed the amount of any mere arithmetical
addition calculated on such an increase.... In the mechanical arts, as
well as in pursuits of science, a man may achieve more in a day... than
a solitary... individual could perform in his whole life.... Geometry says...
that the whole is only equal to the sum of all its parts; as applied to
the subject before us, this axiom would be false. Regarding labour, the
great pillar of human existence, it may be said that the entire product
of combined exertion almost infinitely exceeds all which individual and
disconnected efforts could possibly accomplish.”

(T.Sadler, The Law of Population, London 1830)

[Vol. I, pp. 83 and 84]

To return to M. Proudhon. Surplus labour, he says, is explained by the person,
Society. The life of this person is guided by laws, the opposite of those
which govern the activities of man as an individual. He desires to prove
this by “facts.”

“The discovery of an economic process can never provide the inventor
with a profit equal to that which he procures for society.... It has been
remarked that railway enterprises are much less a source of wealth for
the contractors than for the state.... The average cost of transporting
commodities by road is 18 centimes per ton per kilometre, from the collection
of the goods to their delivery. It has been calculated that at this rate
an ordinary railway enterprise would not obtain 10 per cent net profit,
a result approximately equal to that of a road-transport enterprise. But
let us suppose that the speed of rail transport compared with that of road
transport is as 4 is to 1. Since in society time is value itself, the railway
would, prices being equal, present an advantage of 400 per cent over road-transport.
Yet this enormous advantage, very real for society, is far from being realised
in the same proportion for the carrier, who, while bestowing upon society
an extra value of 400 per cent, does not for his own part draw 10 per cent.
To bring the matter home still more pointedly, let us suppose, in fact,
that the railway puts up its rate to 25 centimes, the cost of road transport
remaining at 18: it would instantly lose all its consignments. Senders,
receivers, everybody would return to the van, to the primitive waggon if
necessary. The locomotive would be abandoned. A social advantage of 400
per cent would be sacrificed to a private loss of 35 per cent. The reason
for this is easily grasped: the advantage resulting from the speed of the
railway is entirely social, and each individual participates in it only
in a minute proportion (it must be remembered that at the moment we are
dealing only with the transport of goods), while the loss strikes the consumer
directly and personally. A social profit equal to 400 represents for the
individual, if society is composed only of a million men, four ten-thousandths;
while a loss of 33 per cent for the consumer would suppose a social deficit
of 33 million.

(Proudhon [Vol. I, p. 75, 76])

Now, we may even overlook the fact that M. Proudhon expresses a quadrupled
speed as 400 per cent of the original speed; but that he should bring into
relation the percentage of speed and the percentage of profit and establish
a proportion between two relations which, although measured separately
by percentages, are nevertheless incommensurate with each other, is to
establish a proportion between the percentages without reference to denominations.

Percentages are always percentages, 10 per cent and 400 per cent
are commensurable; they are to each other as 10 is to 400. Therefore, concludes
M. Proudhon, a profit of 10 per cent is worth 40 times less than a quadrupled
speed. To save appearances, he says that, for society, time is money. This
error arises from his recollecting vaguely that there is a connection between
labour value and labour time, and he hastens to identify labour time with
transport time; that is, he identifies the few firemen, drivers and others,
whose labour time is actually transport time, with the whole of society.
Thus at one blow, speed has become capital, and in this case he is fully
right in saying: “A profit of 400 per cent will be sacrificed to a loss
of 35 per cent.” After establishing this strange proposition as a mathematician,
he gives us the explanation of it as an economist.

“A social profit equal to 400 represents for the individual, in a society
of only a million men, four ten-thousandths.”

Agreed; but we are dealing not with 400, but with 400 per cent, and a profit
of 400 per cent represents for the individual 400 per cent, neither more
nor less. Whatever be the capital, the dividends will always be in the
ratio of 400 per cent. What does M. Proudhon do? He takes percentages for
capital, and, as if he were afraid of his confusion not being manifest
enough, “pointed” enough, he continues:

“A loss of 33 per cent for the consumer would suppose a social deficit
of 33 million.”

A loss of 33 per cent for the consumer remains a loss of 33 per cent for
a million consumers. How then can M. Proudhon say pertinently that the
social deficit in the case of a 33 per cent loss amounts to 33 million,
when he knows neither the social capital nor even the capital of a single
one of the persons concerned? Thus it was not enough for M. Proudhon to
have confused capital with percentage; he surpasses himself by identifying
the capital sunk in an enterprise with the number of interested parties.

“To bring the matter home still more pointedly let us suppose
in fact” a given capital. A social profit of 400 per cent divided among
a million participants, each of them interested to the extent of 1 franc,
would give 4 francs profit per head – and not 0.0004, as M. Proudhon alleges.
Likewise a loss of 33 per cent for each of the participants represents
a social deficit of 330,000 francs and not of 33 million (100:33 = 1,000,000:330,000).

M. Proudhon, preoccupied with his theory of the person, Society,
forgets to divide by 100, which entails a loss of 330,000 francs; but 4
francs profit per head make 4 million francs profit for society. There
remains for society a net profit of 3,670,000 francs. This accurate calculation
proves precisely the contrary of what M. Proudhon wanted to prove: namely,
that the profits and losses of society are not in inverse ratio to the
profits and losses of individuals.

Having rectified these simple errors of pure calculation, let
us take a look at the consequences which we would arrive at, if we admitted
this relation between speed and capital in the case of railways, as M.
Proudhon gives it – minus the mistakes in calculation. Let us suppose
that a transport four times as rapid costs four times as much; this transport
would not yield less profit than cartage, which is four times slower and
costs a quarter the amount. Thus, if cartage takes 18 centimes, rail transport
could take 72 centimes. This would be, according to “the rigor of mathematics,”
the consequence of M. Proudhon's suppositions – always minus his mistakes
in calculation. But here he is all of a sudden telling us that if, instead
of 72 centimes, rail transport takes only 25, it would instantly lose all
its consignments. Decidedly we should have to go back to the van, to the
primitive waggon even. Only, if we have any advice to give M. Proudhon,
it is not to forget, in his Programme of the Progressive Association,
to divide by 100. But, alas! it is scarcely to be hoped that our advice
will be listened to, for M. Proudhon is so delighted with his “progressive
association,” that he cries most emphatically:

“I have already shown in Chapter II, by the solution of the antinomy
of value, that the advantage of every useful discovery is incomparably
less for the inventor, whatever he may do, than for society. I have carried
the demonstration in regard to this point in the rigor of mathematics!”

Let us return to the fiction of the person, Society, a fiction which has
no other aim than that of proving this simple truth – that a new invention
which enables a given amount of labour to produce a greater number of commodities,
lowers the marketable value of the product. Society, then, makes a profit,
not by obtaining more exchange values, but by obtaining more commodities
for the same value. As for the inventor, competition makes his profit fall
successively to the general level of profits. Has M. Proudhon proved this
proposition as he wanted to? No. This does not prevent him from reproaching
the economists with failure to prove it. To prove to him on the contrary
that they have proved it, we shall cite only Ricardo and Lauderdale
– Ricardo, the head of the school which determines value by labour time,
and Lauderdale, one of the most uncompromising defenders of the determination
of value by supply and demand. Both have expounded the same proposition:

“By constantly increasing the facility of production, we constantly
diminish the value of some of the commodities before produced, though by
the same means we not only add to the national riches, but also to the
power of future production.... As soon as by the aid of machinery, or by
the knowledge of natural philosophy, you oblige natural agents to do the
work which was before done by man, the exchangeable value of such work
falls accordingly. If 10 men turned a corn mill, and it be discovered that
by the assistance of wind, or of water, the labour of these 10 men may be
spared, the flour which is the produce partly of the work performed by
the mill, would immediately fall in value, in proportion to the quantity
of labour saved; and the society would be richer by the commodities which
the labour of the 10 men could produce, the funds destined for their maintenance
being in no degree impaired."

(Ricardo [Ricardo, Vol. II, p. 59])

Lauderdale, in his turn, says:

In every instance where capital is so employed as to produce a profit,
it uniformly arises, either – from its supplanting a portion of labour,
which would otherwise be performed by the hand of man; or – from its performing
a portion of labour, which is beyond the reach of the personal exertion
of man to accomplish. The small profit which the proprietors of machinery
generally acquire, when compared with the wages of labour, which the machine
supplants, may perhaps create a suspicion of the rectitude of this opinion.
Some fire-engines, for instance, draw more water from a coalpit in one
day than could be conveyed on the shoulder of 300 men, even assisted by
the machinery of buckets; and a fire-engine undoubtedly performs its labour
at a much smaller expense than the amount of the wages of those whose labour
it thus supplants. This is, in truth, the case with all machinery. All
machines must execute the labour that was antecedently performed at a cheaper
rate than it could be done by the hand of man....

If such a privilege is given for the invention of a machine, which
performs, by the labour of one man, a quantity of work that used to take
the labour of four; as the possession of the exclusive privilege prevents
any competition in doing the work, but what proceeds from the labour of
the workmen, their wages, as long as the patent continues, must obviously
form the measure of the patentee's charge; that is to secure employment,
he has only to charge a little less than the wages of the labour which the
machine supplants. But when the patent expires, other machines of the same
nature are brought into competition; and then his charge must be regulated
on the same principle as every other, according to the abundance of machines....

The profit of capital employed..., though it arises from supplanting
labour, comes to be regulated, not by the value of the labour it supplants
but, as in all other cases, by the competition among the proprietors of
capital that presents itself for performing the duty, and the demand for
it.

[Pp. 119, 123, 124, 125, 134]

Finally, then, so long as the profit is greater than in other industries,
capital will be thrown into the new industry until the rate of profit falls
to the general level.

We have just seen that the example of the railway was scarcely
suited to throw any light on his fiction of the person, Society. Nevertheless,
M. Proudhon boldly resumes his discourse:

“With these points cleared up, nothing is easier than to explain how
labour must leave a surplus for each producer.”

[Vol. I, p. 77]

What now follows belongs to classical antiquity. It is a poetical narrative
intended to refresh the reader after the fatigue which the rigor of the
preceding mathematical demonstrations must have caused him. M. Proudhon
gives the person, Society, the name of Prometheus, whose high deeds he
glorifies in these terms:

First of all, Prometheus emerging from the bosom of nature awakens
to life, in a delightful inertia, etc., etc. Prometheus sets to work, and
on this first day, the first day of the second creation, Prometheus' product,
that is, his wealth, his well-being, is equal to 10. On the second day,
Prometheus divides his labour, and his product becomes equal to 100. On
the third day and on each of the following days, Prometheus invents machines,
discovers new utilities in bodies, new forces in nature.... With every
step of his industrial activity, there is an increase in the number of
his products, which marks an enhancement of happiness for him. And since,
after all, to consume is for him to produce, it is clear that every day's
consumption, using up only the product of the day before, leaves a surplus
product for the next day."

[Vol. I, pp. 77-78]

This Prometheus of M. Proudhon's is a queer character, as weak in logic
as in political economy. So long as Prometheus merely teaches us the division
of labour, the application of machinery, the exploitation of natural forces
and scientific power, multiplying the productive forces of men and giving
a surplus compared with the produce of labour in isolation, this new Prometheus
has the misfortune only of coming too late. But the moment Prometheus starts
talking about production and consumption he becomes really ludicrous. To
consume, for him, is to produce; he consumes the next day what he produced
the day before, so that he is always one day in advance; this day in advance
is his “surplus labour.” But, if he consumes the next day what he has produced
the day before, he must, on the first day, which had no day before, have
done two days' work in order to be one day in advance later on. How did
Prometheus earn this surplus on the first day, when there was neither division
of labour, nor machinery, nor even any knowledge of physical forces other
than fire? Thus the question, for all its being carried back “to the first
day of the second creation,” has not advanced a single step forward. This
way of explaining things savours both of Greek and of Hebrew, it is at once
mystical and allegorical. It gives M. Proudhon a perfect right to say:

“I have proved by theory and by facts the principle that all labour
must have a surplus.”

The “facts” are the famous progressive calculation; the theory is the myth
of Prometheus.

“But,” continues M. Proudhon, “this principle, while being as certain
as an arithmetical proposition, is as yet far from being realised by everyone.
Whereas, with the progress of collective industry, every day's individual
labour produces a greater and greater product, and whereas therefore, by
a necessary consequence, the worker with the same wage ought to become
richer every day, there actually exist estates in society which profit
and others which decay.”

[Vol. I, pp. 79-80]

In 1770 the population of the United Kingdom of Great Britain was 15 million,
and the productive population was 3 million. The scientific power of production
equalled a population of about 12 million individuals more. Therefore there
were, altogether, 15 million of productive forces. Thus the productive
power was to the population as 1 is to 1; and the scientific power was
to the manual power as 4 is to 1.

In 1840 the population did not exceed 30 million: the productive
population was 6 million. But the scientific power amounted to 650 million;
that is, it was to the whole population as 21 is to 1, and to manual power
as 108 is to 1.

In English society the working day thus acquired in 70 years a surplus
of 2,700 per cent productivity; that is, in 1840 it produced 27 times as
much as in 1770. According to M. Proudhon, the following question should
be raised: why was not the English worker of 1840 27 times as rich as the
one of 1770? In raising such a question one would naturally be supposing
that the English could have produced this wealth without the historical
conditions in which it was produced, such as: private accumulation of capital,
modern division of labour, automatic workshops, anarchical competition,
the wage system – in short, everything that is based upon class antagonism.
Now, these were precisely the necessary conditions of existence for the
development of productive forces and of surplus labour. Therefore, to obtain
this development of productive forces and this surplus labour, there had
to be classes which profited and classes which decayed.

What then, ultimately, is this Prometheus resuscitated by M. Proudhon?
It is society, social relations based on class antagonism. These relations
are not relations between individual and individual, but between worker
and capitalist, between farmer and landlord, etc. Wipe out these relations
and you annihilate all society, and your Prometheus is nothing but a ghost
without arms or legs; that is, without automatic workshops, without division
of labour – in a word, without everything that you gave him to start with
in order to make him obtain this surplus labour.

If then, in theory, it sufficed to interpret, as M. Proudhon does,
the formula of surplus labour in the equalitarian sense, without taking
into account the actual conditions of production, it should suffice, in
practice, to share out equally among the workers all the wealth at present
acquired, without changing in any way the present conditions of production.
Such a distribution would certainly not assure a high degree of comfort
to the individual participants.

But M. Proudhon is not so pessimistic as one might think. As proportion
is everything for him, he has to see in his fully equipped Prometheus,
that is, in present-day society, the beginnings of a realisation of his
favorite idea.

“But everywhere, too, the progress of wealth, that is, the proportion
of values, is the dominant law; and when economists hold up against the
complaints of the social party the progressive growth of the public wealth,
and the improved conditions of even the most unfortunate classes, they
unwittingly proclaim a truth which is the condemnation of their theories.”

[Vol. I, p. 80]

What is, exactly, collective wealth, public fortune? It is the wealth of
the bourgeoisie – not that of each bourgeois in particular. Well, the
economists have done nothing but show how, in the existing relations of
production, the wealth of the bourgeoisie has grown and must grow still
further. As for the working classes, it still remains a very debatable
question whether their condition has improved as a result of the increase
in so-called public wealth. If economists, in support of their optimism,
cite the example of the English workers employed in the cotton industry,
they see the condition of the latter only in the rare moments of trade
prosperity. These moments of prosperity are to the periods of crisis and
stagnation in the “true proportion” of 3 to 10. But perhaps also, in speaking
of improvement, the economists were thinking of the millions of workers
who had to perish in the East Indies so as to procure for the million and
a half workers employed in England in the same industry three years' prosperity
out of ten.

As for the temporary participation in the increase of public wealth,
that is a different matter. The fact of temporary participation is explained
by the theory of the economists. It is the confirmation of this theory
and not its “condemnation,” as M. Proudhon calls it. If there were anything to be
condemned, it would surely be the system of M. Proudhon, who would reduce
the worker, as we have shown, to the minimum wage, in spite of the increase
of wealth. It is only by reducing the worker to the minimum wage that he
would be able to apply the true proportion of values, of “value constituted”
by labour time. It is because wages, as a result of competition, oscillate
now above, now below, the price of food necessary for the sustenance of
the worker, that he can participate to a certain extent in the development
of collective wealth, and can also perish from want. This is the whole
theory of the economists who have no illusions on the subject.

After his lengthy digressions on railways, on Prometheus, and
on the new society to be reconstituted on “constituted value,” M. Proudhon
collects himself; emotion overpowers him and he cries in fatherly tones:

“I beseech the economists to ask themselves for one moment, in the
silence of their hearts – far from the prejudices that trouble them and
regardless of the employment they are engaged in or hope to obtain, of
the interests they subserve, or the approbation to which they aspire, of
the honors which nurse their vanity – let them say whether before this
day the principle that all labour must leave a surplus appeared to them
with this chain of premises and consequences that we have revealed.”

[Vol. I, p. 80]

## Chapter Two: The Metaphysics of Political Economy

### The Method

Contents:

First Observation

Second Observation

Third Observation

Fourth Observation

Fifth Observation

Sixth Observation

Seventh Observation

Here we are, right in Germany! We shall now have
to talk metaphysics while talking political economy. And in this again
we shall but follow M. Proudhon's “contradictions.” Just now he forced
us to speak English, to become pretty well English ourselves. Now the scene
is changing. M. Proudhon is transporting us to our dear fatherland and
is forcing us, whether we like it or not, to become German again.

If the Englishman transforms men into hats, the German transforms
hats into ideas. The Englishman is Ricardo, rich banker and distinguished
economist; the German is Hegel, simple professor at the University of Berlin.

Louis XV, the last absolute monarch and representative of the
decadence of French royalty, had attached to his person a physician who
was himself France's first economist. This doctor, this economist, represented
the imminent and certain triumph of the French bourgeoisie. Doctor Quesnay
made a science out of political economy; he summarized it in his famous
Tableau économique. Besides the thousand and one commentaries on
this table which have appeared, we possess one by the doctor himself. It
is the “Analysis of the Economic Table,” followed by “seven important observations.”

M. Proudhon is another Dr. Quesnay. He is the Quesnay of the metaphysics
of political economy.

Now metaphysics – indeed all philosophy – can be summed up,
according to Hegel, in method. We must, therefore, try to elucidate the
method of M. Proudhon, which is at least as foggy as the Economic Table.
It is for this reason that we are making seven more or less important observations.
If Dr. Proudhon is not pleased with our observations, well, then, he will
have to become an Abbe Baydeau and give the “explanation of the economico-metaphysical
method” himself.

### First Observation

“We are not giving a history according to the order in time, but according
to the sequence of ideas. Economic phases or categories are in their manifestation
sometimes contemporary, sometimes inverted.... Economic theories have nonetheless
their logical sequence and their serial relation in the understanding:
it is this order that we flatter ourselves to have discovered."

(Proudhon, Vol. I, p. 146)

M. Proudhon most certainly wanted to frighten the French by flinging quasi-Hegelian
phrases at them. So we have to deal with two men: firstly with M. Proudhon,
and then with Hegel. How does M. Proudhon distinguish himself from other
economists? And what part does Hegel play in M. Proudhon's political economy?

Economists express the relations of bourgeois production, the
division of labour, credit, money, etc., as fixed, immutable, eternal categories.
M. Proudhon, who has these ready-made categories before him, wants to explain
to us the act of formation, the genesis of these categories, principles,
laws, ideas, thoughts.

Economists explain how production takes place in the above-mentioned
relations, but what they do not explain is how
these relations themselves are produced, that is, the historical movement
which gave them birth. M. Proudhon, taking these relations for principles,
categories, abstract thoughts, has merely to put into order these thoughts,
which are to be found alphabetically arranged at the end of every treatise
on political economy. The economists' material is the active, energetic
life of man; M. Proudhon's material is the dogmas of the economists. But
the moment we cease to pursue the historical movement of production relations,
of which the categories are but the theoretical expression, the moment
we want to see in these categories no more than ideas, spontaneous thoughts,
independent of real relations, we are forced to attribute the origin of
these thoughts to the movement of pure reason. How does pure, eternal,
impersonal reason give rise to these thoughts? How does it proceed in order
to produce them?

If we had M. Proudhon's intrepidity in the matter of Hegelianism
we should say: it is distinguished in itself from itself. What does this
mean? Impersonal reason, having outside itself neither a base on which
it can pose itself, nor an object to which it can oppose itself, nor a
subject with which it can compose itself, is forced to turn head over heels,
in posing itself, opposing itself and composing itself – position, opposition,
composition. Or, to speak Greek – we have thesis, antithesis and synthesis.
For those who do not know the Hegelian language, we shall give the ritual formula: affirmation, negation and
negation of the negation. That is what language means. It is certainly
not Hebrew (with due apologies to M. Proudhon); but it is the language of
this pure reason, separate from the individual. Instead of the ordinary
individual with his ordinary manner of speaking and thinking we have nothing
but this ordinary manner purely and simply – without the individual.

Is it surprising that everything, in the final abstraction –
for we have here an abstraction, and not an analysis – presents itself
as a logical category? Is it surprising that, if you let drop little by
little all that constitutes the individuality of a house, leaving out first
of all the materials of which it is composed, then the form that distinguishes
it, you end up with nothing but a body; that, if you leave out of account
the limits of this body; you soon have nothing but a space – that if,
finally, you leave out of the account the dimensions of this space, there
is absolutely nothing left but pure quantity, the logical category? If
we abstract thus from every subject all the alleged accidents, animate
or inanimate, men or things, we are right in saying that in the final abstraction,
the only substance left is the logical category. Thus the metaphysicians
who, in making these abstractions, think they are making analyses, and
who, the more they detach themselves from things, imagine themselves to
be getting all the nearer to the point of penetrating to their core –
these metaphysicians in turn are right in saying that things here below
are embroideries of which the logical categories constitute the canvas.
This is what distinguishes the philosopher from the Christian. The Christian,
in spite of logic, has only one incarnation of the Logos; the philosopher
has never finished with incarnations. If all that exists, all that lives
on land, and under water, can be reduced by abstraction to a logical category
– if the whole real world can be drowned thus in a world of abstractions,
in the world of logical categories – who need be astonished at it?

All that exists, all that lives on land and under water, exists
and lives only by some kind of movement. Thus, the movement of history
produces social relations; industrial movement gives us industrial products,
etc.

Just as by means of abstraction we have transformed everything
into a logical category, so one has only to make an abstraction of every
characteristic distinctive of different movements to attain movement in
its abstract condition – purely formal movement, the purely logical formula
of movement. If one finds in logical categories the substance of all things,
one imagines one has found in the logical formula of movement the absolute
method, which not only explains all things, but also implies the movement
of things.

It is of this absolute method that Hegel speaks in these terms:

“Method is the absolute, unique, supreme, infinite force, which no
object can resist; it is the tendency of reason to find itself again, to
recognize itself in every object.”

(Logic, Vol. III [p. 29])

All things being reduced to a logical category, and every movement, every
act of production, to method, it follows naturally that every aggregate
of products and production, of objects and of movement, can be reduced
to a form of applied metaphysics. What Hegel has done for religion, law,
etc., M. Proudhon seeks to do for political economy.

So what is this absolute method? The abstraction of movement.
What is the abstraction of movement? Movement in abstract condition. What
is movement in abstract condition? The purely logical formula of movement
or the movement of pure reason. Wherein does the movement of pure reason
consist? In posing itself, opposing itself, composing itself; in formulating
itself as thesis, antithesis, synthesis; or, yet, in affirming itself,
negating itself, and negating its negation.

How does reason manage to affirm itself, to pose itself in a definite
category? That is the business of reason itself and of its apologists.

But once it has managed to pose itself as a thesis, this thesis,
this thought, opposed to itself, splits up into two contradictory thoughts
– the positive and the negative, the yes and no. The struggle between
these two antagonistic elements comprised in the antithesis constitutes
the dialectical movement. The yes becoming no, the no becoming yes, the
yes becoming both yes and no, the no becoming both no and yes, the contraries
balance, neutralize, paralyze each other. The fusion of these two contradictory
thoughts constitutes a new thought, which is the synthesis of them. This
thought splits up once again into two contradictory thoughts, which in
turn fuse into a new synthesis. Of this travail is born a group of thoughts.
This group of thoughts follows the same dialectic movement as the simple
category, and has a contradictory group as antithesis. Of these two groups
of thoughts is born a new group of thoughts, which is the antithesis of
them.

Just as from the dialectic movement of the simple categories is
born the group, so from the dialectic movement of the groups is born the
series, and from the dialectic movement of the series is born the entire
system.

Apply this method to the categories of political economy and you
have the logic and metaphysics of political economy, or, in other words,
you have the economic categories that everybody knows, translated into
a little-known language which makes them look as if they had never blossomed
forth in an intellect of pure reason; so much do these categories seem
to engender one another, to be linked up and intertwined with one another
by the very working of the dialectic movement. The reader must not get
alarmed at these metaphysics with all their scaffolding of categories,
groups, series, and systems. M. Proudhon, in spite of all the trouble he
has taken to scale the heights of the system of contradictions, has never
been able to raise himself above the first two rungs of simple thesis and
antithesis; and even these he has mounted only twice, and on one of these
two occasions he fell over backwards.

Up to now we have expounded only the dialectics of Hegel. We shall
see later how M. Proudhon has succeeded in reducing it to the meanest proportions.
Thus, for Hegel, all that has happened and is still happening is only just
what is happening in his own mind. Thus the philosophy of history is nothing
but the history of philosophy, of his own philosophy. There is no longer
a “history according to the order in time,” there is only “the sequence
of ideas in the understanding.” He thinks he is constructing the world
by the movement of thought, whereas he is merely reconstructing systematically
and classifying by the absolute method of thoughts which are in the minds
of all.

### Second Observation

Economic categories are only the theoretical expressions, the abstractions
of the social relations of production, M. Proudhon, holding this upside
down like a true philosopher, sees in actual relations nothing but the
incarnation of the principles, of these categories, which were slumbering
– so M. Proudhon the philosopher tells us – in the bosom of the “impersonal
reason of humanity.”

M. Proudhon the economist understands very well that men make
cloth, linen, or silk materials in definite relations of production. But
what he has not understood is that these definite social relations are
just as much produced by men as linen, flax, etc. Social relations are
closely bound up with productive forces. In acquiring new productive forces
men change their mode of production; and in changing their mode of production,
in changing the way of earning their living, they change all their social
relations. The hand-mill gives you society with the feudal lord; the steam-mill,
society with the industrial capitalist.

The same men who establish their social relations in conformity
with the material productivity, produce also principles, ideas, and categories,
in conformity with their social relations.

Thus the ideas, these categories, are as little eternal as the
relations they express. They are historical and transitory products.

There is a continual movement of growth in productive forces,
of destruction in social relations, of formation in ideas; the only immutable
thing is the abstraction of movement – mors immortalis.

[Marx quotes these words from the following passage of Lucretius's
poem On The Nature of Things (Book III, line 869): “mortalem vitam
mors cum immortalis ademit” ("when mortal life has been taken away by immortal death").]

### Third Observation

The production relations of every society form a whole. M. Proudhon
considers economic relations as so many social phases, engendering one
another, resulting one from the other like the antithesis from the thesis,
and realizing in their logical sequence the impersonal reason of humanity.

The only drawback to this method is that when he comes to examine
a single one of these phases, M. Proudhon cannot explain it without having
recourse to all the other relations of society; which relations, however,
he has not yet made his dialectic movement engender. When, after that,
M. Proudhon, by means of pure reason, proceeds to give birth to these other
phases, he treats them as if they were new-born babes. He forgets that
they are of the same age as the first.

Thus, to arrive at the constitution of value, which for him is
the basis of all economic evolutions, he could not do without division
of labour, competition, etc. Yet in the series, in the understanding of M.
Proudhon, in the logical sequence, these relations did not yet exist.

In constructing the edifice of an ideological system by means
of the categories of political economy, the limbs of the social system
are dislocated. The different limbs of society are converted into so many
separate societies, following one upon the other. How, indeed, could the
single logical formula of movement, of sequence, of time, explain the structure
of society, in which all relations coexist simultaneously and support one
another?

### Fourth Observation

Let us see now to what modifications M. Proudhon subjects Hegel's dialectics
when he applies it to political economy.

For him, M. Proudhon, every economic category has two sides –
one good, the other bad. He looks upon these categories as the petty bourgeois
looks upon the great men of history: Napoleon was a great man; he did a
lot of good; he also did a lot of harm.

The good side and the bad side, the advantages and drawbacks,
taken together form for M. Proudhon the contradiction in every economic
category.

The problem to be solved: to keep the good side, while eliminating
the bad.

Slavery is an economic category like any other. Thus it also has
its two sides. Let us leave alone the bad side and talk about the good
side of slavery. Needless to say, we are dealing only with direct slavery,
with Negro slavery in Surinam, in Brazil, in the Southern States of North
America.

Direct slavery is just as much the pivot of bourgeois industry
as machinery, credits, etc. Without slavery you have no cotton; without
cotton you have no modern industry. It is slavery that gave the colonies
their value; it is the colonies that created world trade, and it is world
trade that is the precondition of large-scale industry. Thus slavery is
an economic category of the greatest importance.

Without slavery North America, the most progressive of countries,
would be transformed into a patriarchal country. Wipe North America off
the map of the world, and you will have anarchy – the complete decay of
modern commerce and civilization. Cause slavery to disappear and you will
have wiped America off the map of nations.[*1]

Thus slavery, because it is an economic category, has always existed among
the institutions of the peoples. Modern nations have been able only to
disguise slavery in their own countries, but they have imposed it without
disguise upon the New World.

What would M. Proudhon do to save slavery? He would formulate
the problem thus: preserve the good side of this economic category, eliminate
the bad.

Hegel has no problems to formulate. He has only dialectics. M.
Proudhon has nothing of Hegel's dialectics but the language. For him the
dialectic movement is the dogmatic distinction between good and bad.

Let us for a moment consider M. Proudhon himself as a category.
Let us examine his good and bad side, his advantages and his drawbacks.

If he has the advantage over Hegel of setting problems which he
reserves the right of solving for the greater good of humanity, he has
the drawback of being stricken with sterility when it is a question of
engendering a new category by dialectical birth-throes. What constitutes
dialectical movement is the coexistence of two contradictory sides, their
conflict and their fusion into a new category. The very setting of the
problem of eliminating the bad side cuts short the dialectic movement.
It is not the category which is posed and opposed to itself, by its contradictory
nature, it is M. Proudhon who gets excited, perplexed and frets and fumes
between the two sides of the category.

Caught thus in a blind alley, from which it is difficult to escape
by legal means, M. Proudhon takes a real flying leap which transports him
at one bound into a new category. Then it is that, to his astonished gaze,
is revealed the serial relation in the understanding.

He takes the first category that comes handy and attributes to
it arbitrarily the quality of supplying a remedy for the drawbacks of the
category to be purified. Thus, if we are to believe M. Proudhon, taxes
remedy the drawbacks of monopoly; the balance of trade, the drawbacks of
taxes; landed property, the drawbacks of credit.

By taking the economic categories thus successively, one by one,
and making one the antidote to the other, M. Proudhon manages to make with
this mixture of contradictions and antidotes to contradictions, two volumes
of contradictions, which he rightly entitles: Le Système des contradictions économiques. [The System of Economic Contradictions]

### Fifth Observation

“In the absolute reason all these ideas... are equally simple, and
general.... In fact, we attain knowledge only by a sort of scaffolding
of our ideas. But truth in itself is independent of these dialectical symbols
and freed from the combinations of our minds.”

(Proudhon, Vol. II, p. 97)

Here all of a sudden, by a kind of switch-over of which we now know the
secret, the metaphysics of political economy has become an illusion! Never
has M. Proudhon spoken more truly. Indeed, from the moment the process
of the dialectic movement is reduced to the simple process of opposing
good to bad, and of administering one category as an antidote to another,
the categories are deprived of all spontaneity; the idea “ceases to function";
there is no life left in it. It is no longer posed or decomposed into categories.
The sequence of categories has become a sort of scaffolding. Dialectics
has ceased to be the movement of absolute reason. There is no longer any
dialectics but only, at the most, absolutely pure morality.

When M. Proudhon spoke of the serial relation in understanding, of
the logical sequence of categories, he declared positively that he did
not want to give history according to the order in time, that is, in M.
Proudhon's view, the historical sequence in which the categories have manifested
themselves. Thus for him everything happened in the pure ether of reason.
Everything was to be derived from this ether by means of dialectics. Now
that he has to put this dialectics into practice, his reason is in default.
M. Proudhon's dialectics runs counter to Hegel's dialectics, and now we
have M. Proudhon reduced to saying that the order in which he gives the
economic categories is no longer the order in which they engender one
another. Economic evolutions are no longer the evolutions of reason itself.

What then does M. Proudhon give us? Real history, which is, according
to M. Proudhon's understanding, the sequence in which the categories have
manifested themselves in order of time? No! History as it takes place in
the idea itself? Still less! That is, neither the profane history of categories,
nor their sacred history! What history does he give us then? The history
of his own contradictions. Let us see how they go, and how they drag M.
Proudhon in their train.

Before entering upon this examination, which gives rise to the
sixth important observation, we have yet another, less important observation
to make.

Let us admit with M. Proudhon that real history, history according
to the order in time, is the historical sequence in which ideas, categories
and principles have manifested themselves.

Each principle has had its own century in which to manifest itself.
The principle of authority, for example, had the 11th century, just as
the principle of individualism had the 18th century. In logical sequence,
it was the century that belonged to the principle, and not the principle
which belonged to the century. When, consequently, in order to save principles
as much as to save history, we ask ourselves why a particular principle
was manifested in the 11th century or in the 18th century rather than in
any other, we are necessarily forced to examine minutely what men were
like in the 11th century, what they were like in the 18th, what were their
respective needs, their productive forces, their mode of production, the
raw materials of their production – in short, what were the relations
between man and man which resulted from all these conditions of existence.
To get to the bottom of all these questions – what is this but to draw
up the real, profane history of men in every century and to present these
men as both the authors and the actors of their own drama? But the moment
you present men as the actors and authors of their own history, you arrive
– by detour – at the real starting point, because you have abandoned
those eternal principles of which you spoke at the outset.

M. Proudhon has not even gone far enough along the crossroad which
an ideologist takes to reach the main road of history.

### Sixth Observation

Let us take the crossroad with M. Proudhon.

We shall concede that economic relations, viewed as immutable
laws, eternal principles, ideal categories, existed before active and energetic
men did; we shall concede further that these laws, principles and categories
had, since the beginning of time, slumbered “in the impersonal reason of
humanity.” We have already seen that, with all these changeless and motionless
eternities, there is no history left; there is at most history in the idea,
that is, history reflected in the dialectic movement of pure reason. M.
Proudhon, by saying that, in the dialectic movement ideas are no longer
“differentiated,” has done away with both the shadow of movement and the
movement of shadows, by means of which one could still have created at
least a semblance of history. Instead of that, he imputes to history his
own impotence. He lays the blame on everything, even the French language.

“It is not correct then,” says M. Proudhon, the philosopher, “to say
that something appears, that something is produced: in civilization as
in the universe, everything has existed, has acted, from eternity. This
applies to the whole of social economy.”

(Vol. II, p. 102)

So great is the productive force of the contradictions which function and
which made M. Proudhon function, that, in trying to explain history, he
is forced to deny it; in trying to explain the successive appearance of
social relations, he denies that anything can appear: in trying to explain
production, with all its phases, he questions whether anything can be produced!

Thus, for M. Proudhon, there is no longer any history: no longer
any sequence of ideas. And yet his book still exists; and it is precisely
that book which is, to use his own expression, “history according to the
sequence of ideas.” How shall we find a formula, for M. Proudhon is a man
of formulas, to help him to clear all these contradictions in one leap?

To this end he has invented a new reason, which is neither the
pure and virgin absolute reason, nor the common reason of men living and
acting in different periods, but a reason quite apart – the reason of
the person, Society – of the subject, Humanity – which under the pen
of M. Proudhon figures at times also as “social genius,” “general reason,”
or finally as “human reason.” This reason, decked out under so many names,
betrays itself nevertheless, at every moment, as the individual reason
of M. Proudhon, with its good and its bad side, its antidotes and its problems.

“Human reason does not create truth,” hidden in the depths of
absolute, eternal reason. It can only unveil it. But such truths as it
has unveiled up to now are incomplete, insufficient, and consequently contradictory.
Hence, economic categories, being themselves truths discovered, revealed
by human reason, by social genius, are equally incomplete and contain within
themselves the germ of contradictions. Before M. Proudhon, social genius
saw only the antagonistic elements, and not the synthetic formula, both
hidden simultaneously in absolute reason. Economic relations, which merely
realize on earth these insufficient truths, these incomplete ideas, are
consequently contradictory in themselves, and present two sides, one good,
the other bad.

To find complete truth, the idea, in all its fullness, the synthetic
formula that is to annihilate the contradiction, this is the problem of
social genius. This again is why, in M. Proudhon's illusion, this same
social genius has been harried from one category to another without ever
having been able, despite all its battery of categories, to snatch from
God or from absolute reason, a synthetic formula.

“At first, society (social genius) states a primary fact, puts forward
a hypothesis... a veritable antinomy, whose antagonistic results develop
in the social economy in the same way as its consequences could have been
deduced in the mind; so that industrial movement, following in all things
the deduction of ideas, splits up into two currents, one of useful effects,
the other of subversive results. To bring harmony into the constitution
of this two-side principle, and to solve this antinomy, society gives rise
to a second, which will soon be followed by a third; and progress of social
genius will take place in this manner, until, having exhausted all its
contradictions – I suppose, but it is not proved that there is a limit
to human contradictions – it returns in one leap to all its former positions
and with a single formula solves all its problems.”

(Vol. I p. 133)

Just as the antithesis was before turned into an antidote, so now the thesis
becomes a hypothesis. This change of terms, coming from M. Proudhon, has
no longer anything surprising for us! Human reason, which is anything but
pure, having only incomplete vision, encounters at every step new problems
to be solved. Every new thesis which it discovers in absolute reason and
which is the negation of the first thesis, becomes for it a synthesis,
which it accepts rather naively as the solution of the problem in question.
It is thus that this reason frets and fumes in ever renewing contradictions
until, coming to the end of the contradictions, it perceives that all its
theses and syntheses are merely contradictory hypotheses. In its perplexity,
“human reason, social genius, returns in one leap to all its former positions,
and in a single formula, solves all its problems.” This unique formula,
by the way, constitutes M. Proudhon's true discovery. It is constituted
value.

Hypotheses are made only in view of a certain aim. The aim that
social genius, speaking through the mouth of M. Proudhon, set itself in
the first place, was to eliminate the bad in every economic category, in
order to have nothing left but the good. For it, the good, the supreme
well-being, the real practical aim, is equality. And why did the social
genius aim at equality rather than inequality, fraternity, Catholicism,
or any other principle? Because “humanity has successively realized so
many separate hypotheses only in view of a superior hypothesis,” which
precisely is equality. In other words: because equality is M. Proudhon's
ideal. He imagines that the division of labour, credit, the workshop –
all economic relations – were invented merely for the benefit of equality,
and yet they always ended up by turning against it. Since history and the
fiction of M. Proudhon contradict each other at every step, the latter
concludes that there is a contradiction. If there is a contradiction, it
exists only between his fixed idea and real movement.

Henceforth, the good side of an economic relation is that which
affirms equality; the bad side, that which negates it and affirms inequality.
Every new category is a hypothesis of the social genius to eliminate the
inequality engendered by the preceding hypothesis. In short, equality is
the primordial intention, the mystical tendency, the providential aim
that the social genius has constantly before its eyes as it whirls in the
circle of economic contradictions. Thus, Providence is the locomotive
which makes the whole of M. Proudhon's economic baggage move better than
his pure and volatized reason. He has devoted to Providence a whole chapter,
which follows the one on taxes.

Providence, providential aim, this is the great word used today
to explain the movement of history. In fact, this word explains nothing.
It is at most a rhetorical form, one of the various ways of paraphrasing
facts.

It is a fact that in Scotland landed property acquired a new value
by the development of English industry. This industry opened up new outlets
for wool. In order to produce wool on a large scale, arable land had to
be transformed into pasturage. To effect this transformation, the estates
had to be concentrated. To concentrate the estates, small holdings had
first to be abolished, thousands of tenants had to be driven from their
native soil and a few shepherds in charge of millions of sheep to be installed
in their place. Thus, by successive transformations, landed property in
Scotland has resulted in the driving out of men by sheep. Now say that
the providential aim of the institution of landed property in Scotland
was to have men driven out by sheep, and you will have made providential
history.

Of course, the tendency towards equality belongs to our century.
To say now that all former centuries, with entirely different needs, means
of production, etc., worked providentially for the realization of equality
is, firstly, to substitute the means and the men of our century for the
men and the means of earlier centuries and to misunderstand the historical
movement by which the successive generations transformed the results acquired
by the generations that preceded them. Economists know very well that the
very thing that was for the one a finished product was for the other but
the raw material for new production.

Suppose, as M. Proudhon does, that social genius produced, or
rather improvised, the feudal lords with the providential aim of transforming
the settlers into responsible and equally-placed workers: and you will
have effected a substitution of aims and of persons worthy of the Providence
that instituted landed property in Scotland, in order to give itself the
malicious pleasure of driving out men by sheep.

But since M. Proudhon takes such a tender interest in Providence,
we refer him to the Histoire de l’économie politique of M. de Villeneuve-Bargemont,
who likewise goes in pursuit of a providential aim. This aim, however,
is not equality, but Catholicism.

### Seventh and Last Observation

Economists have a singular method of procedure. There are only two kinds
of institutions for them, artificial and natural. The institutions of feudalism
are artificial institutions, those of the bourgeoisie are natural institutions.
In this, they resemble the theologians, who likewise establish two kinds
of religion. Every religion which is not theirs is an invention of men,
while their own is an emanation from God. 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. There has been history,
since there were the institutions of feudalism, and in these institutions
of feudalism we find quite different relations of production from those
of bourgeois society, which the economists try to pass off as natural and
as such, eternal.

Feudalism also had its proletariat – serfdom, which contained
all the germs of the bourgeoisie. Feudal production also had two antagonistic
elements which are likewise designated by the name of the good side
and the bad side of feudalism, irrespective of the fact that it
is always the bad side that in the end triumphs over the good side. It
is the bad side that produces the movement which makes history, by providing
a struggle. If, during the epoch of the domination of feudalism, the economists,
enthusiastic over the knightly virtues, the beautiful harmony between rights
and duties, the patriarchal life of the towns, the prosperous condition
of domestic industry in the countryside, the development of industry organized
into corporations, guilds and fraternities, in short, everything that constitutes
the good side of feudalism, had set themselves the problem of eliminating
everything that cast a shadow on the picture – serfdom, privileges, anarchy
– what would have happened? All the elements which called forth the struggle
would have been destroyed, and the development of the bourgeoisie nipped
in the bud. One would have set oneself the absurd problem of eliminating
history.

After the triumph of the bourgeoisie, there was no longer any
question of the good or the bad side of feudalism. The bourgeoisie took
possession of the productive forces it had developed under feudalism. All
the old economic forms, the corresponding civil relations, the political
state which was the official expression of the old civil society, were
smashed.

Thus, feudal production, to be judged properly, must be considered
as a mode of production founded on antagonism. It must be shown how wealth
was produced within this antagonism, how the productive forces were developed
at the same time as class antagonisms, how one of the classes, the bad
side, the drawback of society, went on growing until the material conditions
for its emancipation had attained full maturity. Is not this as good as
saying that the mode of production, the relations in which productive forces
are developed, are anything but eternal laws, but that they correspond
to a definite development of men and of their productive forces, and that
a change in men's productive forces necessarily brings about a change in
their relations of production? As the main thing is not to be deprived
of the fruits of civilization, of the acquired productive forces, the traditional
forms in which they were produced must be smashed. From this moment, the
revolutionary class becomes conservative.

The bourgeoisie begins with a proletariat which is itself a relic
of the proletariat of feudal times. In the course of its historical development,
the bourgeoisie necessarily develops its antagonistic character, which
at first is more or less disguised, existing only in a latent state. As
the bourgeoisie develops, there develops in its bosom a new proletariat,
a modern proletariat; there develops a struggle between the proletarian
class and the bourgeoisie class, a struggle which, before being felt, perceived,
appreciated, understood, avowed, and proclaimed aloud by both sides, expresses
itself, to start with, merely in partial and momentary conflicts, in subversive
acts. On the other hand, if all the members of the modern bourgeoisie have
the same interests inasmuch as they form a class as against another class,
they have opposite, antagonistic interests inasmuch as they stand face-to-face
with one another. This opposition of interests results from the economic
conditions of their bourgeois life. From day to day it thus becomes clearer
that the production relations in which the bourgeoisie moves have not a
simple, uniform character, but a dual character; that in the selfsame relations
in which wealth is produced, poverty is also produced; that in the selfsame
relations in which there is a development of the productive forces, there
is also a force producing repression; that these relations produce bourgeois
wealth – i.e., the wealth of the bourgeois class – only by continually
annihilating the wealth of the individual members of this class and by
producing an ever-growing proletariat.

The more the antagonistic character comes to light, the more the
economists, the scientific representatives of bourgeois production, find
themselves in conflict with their own theory; and different schools arise.

We have the fatalist economists, who in their theory are as indifferent
to what they call the drawbacks of bourgeois production as the bourgeois
themselves are in practice to the sufferings of the proletarians who help
them to acquire wealth. In this fatalist school, there are Classics and
Romantics. The Classics, like Adam Smith and Ricardo, represent a bourgeoisie
which, while still struggling with the relics of feudal society, works
only to purge economic relations of feudal taints, to increase the productive
forces and to give a new upsurge to industry and commerce. The proletariat
that takes part in this struggle and is absorbed in this feverish labour
experiences only passing, accidental sufferings, and itself regards them
as such. Economists like Adam Smith and Ricardo, who are the historians
of this epoch, have no other mission than that of showing how wealth is
acquired in bourgeois production relations, of formulating these relations
into categories, into laws, and of showing how superior these laws, these
categories, are for the production of wealth to the laws and categories
of feudal society. Poverty is in their eyes merely the pang which accompanies
every childbirth, in nature as in industry.

The romantics belong to our own age, in which the bourgeoisie
is in direct opposition to the proletariat; in which poverty is engendered
in as great abundance as wealth. The economists now pose as blasé fatalists,
who, from their elevated position, cast a proudly disdainful glance at
the human machines who manufacture wealth. They copy all the developments
given by their predecessors, and the indifference which in the latter was
merely naïveté becomes in them coquetry.

Next comes the humanitarian school, which sympathizes with the
bad side of present-day production relations. It seeks, by way of easing
its conscience, to palliate even if slightly the real contrasts; it sincerely
deplores the distress of the proletariat, the unbridled competition of
the bourgeois among themselves; it counsels the workers to be sober, to
work hard and to have few children; it advises the bourgeois to put a reasoned
ardor into production. The whole theory of this school rests on interminable
distinctions between theory and practice, between principles and results,
between ideas and application, between form and content, between essence
and reality, between right and fact, between the good side and the bad
side.

The philanthropic school is the humanitarian school carried to
perfection. It denies the necessity of antagonism; it wants to turn all
men into bourgeois; it wants to realize theory in so far as it is distinguished
from practice and contains no antagonism. It goes without saying that,
in theory, it is easy to make an abstraction of the contradictions that
are met with at every moment in actual reality. This theory would therefore
become idealized reality. The philanthropists, then, want to retain the
categories which express bourgeois relations, without the antagonism which
constitutes them and is inseparable from them. They think they are seriously
fighting bourgeois practice, and they are more bourgeois than the others.

Just as the economists are the scientific representatives of the
bourgeois class, so the Socialists and Communists are the theoreticians
of the proletarian class. So long as the proletariat is not yet sufficiently
developed to constitute itself as a class, and consequently so long as
the struggle itself of the proletariat with the bourgeoisie has not yet
assumed a political character, and the productive forces are not yet sufficiently
developed in the bosom of the bourgeoisie itself to enable us to catch
a glimpse of the material conditions necessary for the emancipation of
the proletariat and for the formation of a new society, these theoreticians
are merely utopians who, to meet the wants of the oppressed classes, improvise
systems and go in search of a regenerating science. But in the measure
that history moves forward, and with it the struggle of the proletariat
assumes clearer outlines, they no longer need to seek science in their
minds; they have only to take note of what is happening before their eyes
and to become its mouthpiece. So long as they look for science and merely
make systems, so long as they are at the beginning of the struggle, they
see in poverty nothing but poverty, without seeing in it the revolutionary,
subversive side, which will overthrow the old society. From this moment,
science, which is a product of the historical movement, has associated
itself consciously with it, has ceased to be doctrinaire and has become
revolutionary.

Let us return to M. Proudhon.

Every economic relation has a good and a bad side; it is the one
point on which M. Proudhon does not give himself the lie. He sees the good
side expounded by the economists; the bad side he sees denounced by the
Socialists. He borrows from the economists the necessity of eternal relations;
he borrows from the Socialists the illusion of seeing in poverty nothing
but poverty. He is in agreement with both in wanting to fall back upon
the authority of science. Science for him reduces itself to the slender
proportions of a scientific formula; he is the man in search of formulas.
Thus it is that M. Proudhon flatters himself on having given a criticism
of both political economy and communism: he is beneath them both. Beneath
the economists, since, as a philosopher who has at his elbow a magic formula,
he thought he could dispense with going into purely economic details; beneath
the socialists, because he has neither courage enough nor insight enough
to rise, be it even speculatively, above the bourgeois horizon.

He wants to be the synthesis – he is a composite error.

He wants to soar as the man of science above the bourgeois and
proletarians; he is merely the petty bourgeois, continually tossed back
and forth between capital and labour, political economy and communism.

Notes

*1.
This was perfectly correct for the year 1847. At that time the world
trade of the United States was limited mainly to import of immigrants and
industrial products, and export of cotton and tobacco, i.e., of the products
of southern slave labour. The Northern States produced mainly corn and meat
for the slave states. It was only when the North produced corn and meat
for export and also became an industrial country, and when the American
cotton monopoly had to face powerful competition, in India, Egypt, Brazil,
etc., that the abolition of slavery became possible. And even then this
led to the ruin of the South, which did not succeed in replacing the open
Negro slavery by the disguised slavery of Indian and Chinese coolies, F.E.

[Note by Frederick Engels, to the 1885 German Edition. For more information, see Marx and Engels on the American Civil War]

### Division of labour and Machinery

The division of labour, according to M. Proudhon,
opens the series of economic evolutions.

Good side of the division of labour

“Considered in its essence, the
division of labour is the manner
in which equality of conditions
and intelligence is realized.”

(Tome I, p. 93.)

Bad side of the division of labour

“The division of labour has
become for us an instrument of
poverty.”

(Tome I, p. 94.)

“labour, by dividing itself
according to the law which is
peculiar to it, and which is the
primary condition of its fruitfulness, ends
in the negation of its aims and destroys itself.”

(Tome I, p. 94.)

Problem to be solved

To find the “recomposition which wipes
out the drawbacks of the division, while retaining
its useful effects."

(Tome I, p. 97.)

The division of labour is, according to M. Proudhon, an eternal law, a simple,
abstract category. Therefore the abstraction, the idea, the word must suffice
for him to explain the division of labour at different historical epochs.
Castes, corporations, manufacture, large-scale industry, must be explained
by the single word divide. First study carefully the meaning of
"divide", and you will have no need to study the numerous influences which
give the division of labour a definitive character in every epoch.

Certainly, things would be made much too easy if they were reduced
to M. Proudhon’s categories. History does not proceed so categorically.
It took three whole centuries in Germany to establish the first big division
of labour, the separation of the towns from the country. In proportion,
as this one relation of town and country was modified, the whole of society
was modified. To take only this one aspect of the division of labour, you
have the old republics, and you have Christian feudalism; you have old
England with its barons and you have modern England with its cotton lords.
In the 14th and 15th centuries, when there were as yet no colonies, when
America did not yet exist for Europe, when Asia existed only through the
intermediary of Constantinople, when the Mediterranean was the centre of
commercial activity, the division of labour had a very different form, a
very different aspect from that of the 17th century, when the Spanish,
the Portuguese, the Dutch, the English, and the French had colonies established
in all parts of the world. The extent of the market, its physiognomy, give
to the division of labour at different periods a physiognomy, a character,
which it would be difficult to deduce from the single word divide,
from the idea, from the category.

“All economists since Adam Smith,” says M. Proudhon, “have pointed
out the advantages and drawbacks of the law of division, but insist much
more on the first than on the second, because that was more serviceable
for their optimism, and none of them has ever wondered what could be the
drawbacks to a law.... How does the same principle, pursued vigorously
to its consequences, lead to diametrically opposite results? Not one economist
before or since A. Smith has even perceived that here was a problem to
elucidate. Say goes to the length of recognizing that in the division of
labour the same cause that produces the good engenders the bad.”

[Vol. I, pp. 95-96]

Adam Smith goes further than M. Proudhon thinks. He saw clearly that

“the difference of natural talents in different men is, in reality,
much less than we are aware of; and the very different genius which appears
to distinguish men of different professions, when grown up to maturity,
is not so much the cause as the effect of the division of
labour.”

[Vol. I, p. 20]

In principle, a porter differs less from a philosopher than a mastiff from
a greyhound. It is the division of labour which has set a gulf between them.
All this does not prevent M. Proudhon from saying elsewhere that Adam Smith
has not the slightest idea of the drawbacks produced by the division of
labour. It is this again that makes him say that J. B. Say was the first
to recognize “that in the division of labour the same cause that produces
the good engenders the bad.” [Vol. I, p. 96]

But let us listen to Lemontey; Suum cuique.[34]

“M. J. B. Say has done me the honour of adopting in his excellent treatise
on political economy the principle that I brought to light in this fragment
on the moral influence of the division of labour. The somewhat frivolous
title of my book [35] doubtless prevented him from citing me. It is only
to this motive that I can attribute the silence of a writer too rich in
his own stock to disavow so modest a load.”

(Lemontey, Oeuvres completes,

Vol. I, p. 245, Paris 1840)

Let us do him this justice: Lemontey wittily exposed the unpleasant consequences
of the division of labour as it is constituted today, and M. Proudhon found
nothing to add to it. But now that, through the fault of M. Proudhon, we
have been drawn into this question of priority, let us say again, in passing,
that long before M. Lemontey, and 17 years before Adam Smith, who was a
pupil of A. Ferguson, the last-named gave a clear exposition of the subject
in a chapter which deals specifically with the division of labour.

“It may even be doubted, whether the measure of national capacity increases
with the advancement of arts. Many mechanical arts... succeed best under
a total suppression of sentiment and reason; and ignorance is the mother
of industry as well as superstition. Reflection and fancy are subject
to err; but a habit of moving the hand, or the foot, is independent of
either. Manufactures, accordingly, prosper most, where the mind is least
consulted, and where the workshop may, without any great effort of imagination,
be considered as an engine, the parts of which are men....

“The general officer may be a great proficient in the knowledge
of war, while the skill of the soldier is confined to a few motions of
the hand and the foot. The former may have gained what the latter has lost....

“And thinking itself, in this age of separations, may become a
peculiar craft.”

(A. Ferguson, An Essay on the History of Civil

Society , Edinburgh 1783 [Vol. II, pp. 108, 109, 110])

To bring this literary survey to a close, we expressly deny that “all economists
have insisted far more on the advantages than on the drawbacks of the division
of labour.” It suffices to mention Sismondi.

Thus, as far as the advantages of the division of labour are concerned,
M. Proudhon had nothing further to do than to paraphrase the general phrases
known to everybody.

Let us now see how he derives from the division of labour, taken
as a general law, as a category, as a thought, the drawbacks which are
attached to it. How is it that this category, this law implies an unequal
distribution of labour to the detriment of M. Proudhon’s equalitarian system?

“At this solemn hour of the division of labour, the storm winds begin
to blow over humanity. Progress does not take place for all in an equal
and uniform manner.... It begins by taking possession of a small number
of the privileged.... It is this preference for person on the part of progress
that has for so long kept up the belief in the natural and providential
inequality of conditions, has given rise to castes, and hierarchically
constituted all societies.”

(Proudhon, Vol.I, p.94)

The division of labour created castes. Now, castes are the drawbacks of
the division of labour; thus, it is the division of labour that has engendered
the drawbacks. Quod erat demonstrandum. [Which was to be proved.]
Will you go further and ask what made the division of labour create castes.
hierarchical constitutions and privileged persons? M. Proudhon will tell
you: Progress. And what made progress? Limitation. Limitation, for M. Proudhon,
is acceptance of persons on the part of progress.

After philosophy comes history. It is no longer either descriptive
history or dialectical history, it is comparative history. M. Proudhon
establishes a parallel between the present-day printing worker and the
printing worker of the Middle Ages; between the man of letters of today
and the man of letters of the Middle Ages, and he weighs down the balance
on the side of those who belong more or less to the division of labour as
the Middle Ages constituted or transmitted it. He opposes the division
of labour of one historical epoch. Was that what M. Proudhon had to prove?
No. He should have shown us the drawbacks of the division of labour in general,
of the division of labour as a category. Besides, why stress this part of
M. Proudhon’s work, since a little later we shall see him formally retract
all these alleged developments?

“The first effect of fractional labour,” continues M. Proudhon, “after
the depravation of the soul, is the prolongation of the shifts, which
grow in inverse ratio to the sum total of intelligence expended.... But
as the length of the shifts cannot exceed 16 to 18 hours per day, the moment
the compensation cannot be taken out of the time, it will be taken out
of the price, and the wages will diminish.... What is certain, and the
only thing for us to note, is that the universal conscience does not assess
at the same rate the work of a foreman and the labour of a mechanic’s assistant.
It is therefore necessary to reduce the price of the day’s work; so
that the worker, after having been afflicted in his soul by a degrading
function, cannot escape being struck in his body by the meagreness of his
remuneration.”

[Vol. I, pp. 97-98]

We pass over the logical value of these syllogisms, which Kant would call
paralogisms which lead astray.

This is the substance of it:

The division of labour reduces the worker to a degrading function;
to this degrading function corresponds a depraved soul; to the depravation
of the soul is befitting an ever-increasing wage reduction. And to prove
that this reduction is befitting to a depraved soul, M. Proudhon says,
to relieve his conscience, that the universal conscience wills it thus.
Is M. Proudhon’s soul to be reckoned as a part of the universal conscience?

Machinery is, for M. Proudhon, “the logical antithesis
of the division of labour,” and with the help of his dialectics, he begins
by transforming machinery into the workshop.

After presupposing the modern workshop, in order to make poverty
the outcome of the division of labour, M. Proudhon presupposes poverty engendered
by the division of labour, in order to come to the workshop and be able
to represent it as the dialectical negation of that poverty. After striking
the worker morally by a degrading function, physically by the meagreness
of the wage; after putting the worker under the dependence of the foreman,
and debasing his work to the labour of a mechanic’s assistant, he lays the
blame again on the workshop and the machinery for degrading the worker
“by giving him a master,” and he completes his abasement by making him
“sink from the rank of artisan to that of common labourer.” Excellent dialectics!
And if he only stopped there! But no, he has to have a new history of the
division of labour, not any longer to derive the contradictions from it,
but to reconstruct the workshop after his own fashion. To attain this end
he finds himself compelled to forget all he has just said about division.

labour is organized, is divided differently according to the instruments
it disposes over. The hand-mill presupposes a different division of labour
from the steam-mill. Thus, it is slapping history in the face to want to
begin by the division of labour in general, in order to get subsequently
to a specific instrument of production, machinery.

Machinery is no more an economic category than the bullock that
drags the plough. Machinery is merely a productive force. The modern workshop,
which depends on the application of machinery, is a social production relation,
an economic category.

Let us see now how things happen in M. Proudhon’s brilliant imagination.

“In society, the incessant appearance of machinery is the antithesis,
the inverse formula of the division of labour: it is the protest of the
industrial genius against fractional and homicidal labour. What, actually,
is a machine? A way of uniting different portions of labour which had been
separated by the division of labour. Every machine can be defined as a summary
of several operations.... Thus, through the machine there will be a restoration
of the worker.... Machinery, which in political economy places itself in
contradiction to the division of labour, represents synthesis, which in
the human mind is opposed to analysis.... Division merely separated the
different parts of labour, letting each one devote himself to the speciality
which most suited him; the workshop groups the workers according to the
relation of each part to the whole.... It introduces the principle of authority
in labour.... But this is not all; the machine or the workshop, after degrading
the worker by giving him a master, completes his abasement by making him
sink from the rank of artisan to that of common labourer.... The period
we are going through at the moment, that of machinery, is distinguished
by a special characteristic, the wage worker. The wage worker is subsequent
to the division of labour and to exchange.”

[Vol. I, pp. 135, 136, and 161]

Just a simple remark to M. Proudhon. The separation of the different parts
of labour, leaving to each one the opportunity of devoting himself to the
speciality best suited to him – a separation which M. Proudhon dates from
the beginning of the world – exists only in modern industry under the
rule of competition.

M. Proudhon goes on to give us a most “interesting genealogy,”
to show how the workshop arose from the division of labour and the wage
worker from the workshop.

1) He supposes a man who “noticed that by dividing up production into its
different parts and having each one performed by a separate worker,” the
forces of production would be multiplied.

2) This man, “grasping the thread of this idea, tells himself that, by forming
a permanent group of workers selected for the special purpose he sets himself,
he will obtain a more sustained production, etc.” [Vol. I, p. 161]

3) This man makes a proposal to other men, to make them grasp his idea and
the thread of his idea.

4) This man, at the beginning of industry, deals on terms of equality with
his companions who later become his workmen.

5) “One realizes, in fact, that this original equality had rapidly to disappear
in view of the advantageous position of the master and the dependence of
the wage-earner.” [Vol. I, p. 163]

That is another example of M. Proudhon’s historical and descriptive method.

Let us now examine, from the historical and economic point of
view, whether the workshop of the machine really introduced the principle
of authority in society subsequently to the division of labour; whether
it rehabilitated the worker on the one hand, while submitting him to authority
on the other; whether the machine is the recomposition of divided labour,
the synthesis of labour as opposed to its analysis.

Society as a whole has this in common with the interior of a workshop,
that it too has its division of labour. If one took as a model the division
of labour in a modern workshop, in order to apply it to a whole society,
the society best organized for the production of wealth would undoubtedly
be that which had a single chief employer, distributing tasks to different
members of the community according to a previously fixed rule. But this
is by no means the case. While inside the modern workshop the division
of labour is meticulously regulated by the authority of the employer, modern
society has no other rule, no other authority for the distribution of labour
than free competition.

Under the patriarchal system, under the caste system, under the
feudal and corporative system, there was division of labour in the whole
of society according to fixed rules. Were these rules established by a
legislator? No. Originally born of the conditions of material production,
they were raised to the status of laws only much later. In this way, these
different forms of the division of labour became so many bases of social
organization. As for the division in the workshop, it was very little developed
in all these forms of society.

It can even be laid down as a general rule that the less authority
presides over the division of labour inside society, the more the division
of labour develops inside the workshop, and the more it is subjected there
to the authority of a single person. Thus authority in the workshop and
authority in society, in relation to the division of labour, are in inverse
ratio to each other.

The question now is what kind of workshop it is in which the occupations
are very much separated, where each worker’s task is reduced to a very
simple operation, and where the authority, capital, groups and directs
the work. How was this workshop brought into existence? In order to answer
this question, we shall have to examine how manufacturing industry, properly
so-called, has developed. I am speaking here of that industry which is
not yet industry, with its machinery, but which is already no longer the
industry of the artisans of the Middle Ages, nor domestic industry. We
shall not go into great detail: we shall merely give a few main points
to show that history is not to be made with formulas.

One of the most indispensable conditions for the formation of
manufacturing industry was the accumulation of capital, facilitated by
the discovery of America and the import of its precious metals.

It is sufficiently proved that the increase in the means of exchange
resulted in the depreciation of wages and land rents, on the one hand,
and the growth of industrial profits on the other. In other words: to the
extent that the propertied class and the working class, the feudal lords
and the people, sank, to that extent the capitalist class, the bourgeoisie,
rose.

There were yet other circumstances which contributed simultaneously
to the development of manufacturing industry: the increase of commodities
put into circulation from the moment that trade had penetrated to the East
Indies by way of the Cape of Good Hope; the colonial system; the development
of maritime trade.

Another point which has not yet been sufficiently appreciated
in the history of manufacturing industry is the disbanding of the numerous
retinues of feudal lords, whose subordinate ranks became vagrants before
entering the workshop. The creation of the workshop was preceded by an
almost universal vagrancy in the 15th and 16th centuries. The workshop
found, besides, a powerful support in the many peasants who, continually
driven from the country owing to the transformation of the fields into
pastures and to the progress in agriculture which necessitated fewer hands
for the tillage of the soil, went on congregating in the towns during whole
centuries.

The growth of the market, the accumulation of capital, the modification
in the social position of the classes, a large number of persons being
deprived of their sources of income, all these are historical preconditions
for the formation of manufacture. It was not, as M. Proudhon says, friendly
agreements between equals that brought men into the workshop. It was not
even in the bosom of the old guilds that manufacture was born. It was the
merchant that became head of the modern workshop, and not the old guildmaster.
Almost everywhere there was a desperate struggle between manufacture and
crafts.

The accumulation and concentration of instruments and workers
preceded the development of the division of labour inside the workshop.
Manufacture consisted much more in the bringing together of many workers
and many crafts in one place, in one room under the command of one capital,
than in the analysis of labour and the adaptation of a special worker to
a very simple task.

The utility of a workshop consisted much less in the division
of labour as such than in the circumstances that work was done on a much
larger scale, that many unnecessary expenses were saved, etc. At the end
of the 16th and at the beginning of the 17th century, Dutch manufacture
scarcely knew any division of labour.

The development of the division of labour supposes the assemblage
of workers in a workshop. There is not one single example, whether in the
16th or in the 17th century, of the different branches of one and the same
craft being exploited separately to such an extent that it would have sufficed
to assemble them all in one place so as to obtain a complete, ready-made
workshop. But once the men and the instruments had been brought together,
the division of labour, such as it had existed in the form of the guilds,
was reproduced, necessarily reflected inside the workshop.

For M. Proudhon, who sees things upside down, if he sees them
at all, the division of labour, in Adam Smith’s sense, precedes the workshop,
which is a condition of its existence.

Machinery, properly so-called, dates from the end of the 18th
century. Nothing is more absurd than to see in machinery the antithesis
of the division of labour, the synthesis restoring unity to divided
labour.

The machine is a unification of the instruments of labour, and
by no means a combination of different operations for the worker himself.

“When, by the division of labour, each particular operation has been
simplified to the use of a single instrument, the linking up of all these
instruments, set in motion by a single engine, constitutes – a machine.”

(Babbage, Traite sur l’économie des machines [et des
manufactures], Paris 1833 [p.230])

Simple tools; accumulation tools; composite tools; setting in motion of
a composite tool by a single hand engine, by man; setting in motion of
these instruments by natural forces, machines; system of machines having
one motor; system of machines having one automatic motor – this is the
progress of machinery.

The concentration of the instruments of production and the division
of labour are as inseparable one from the other as are, in the political
sphere, the concentration of public authority and the division of private
interests. England, with the concentration of the land, this instrument
of agricultural labour, has at the same time division of agricultural labour
and the application of machinery to the exploitation of the soil. France,
which has the division of the instruments, the small holdings system, has,
in general, neither division of agricultural labour nor application of machinery
to the soil.

For M. Proudhon the concentration of the instruments of labour
is the negation of the division of labour. In reality, we find again the
reverse. As the concentration of instruments develops, the division develops
also, and vice versa. This is why every big mechanical invention is followed
by a greater division of labour, and each increase in the division of labour
gives rise in turn to new mechanical inventions.

We need not recall the fact that the great progress of the division
of labour began in England after the invention of machinery. Thus, the weavers
and spinners were for the most part peasants like those one still meets
in backward countries. The invention of machinery brought about the separation
of manufacturing industry from agricultural industry. The weaver and the
spinner, united but lately in a single family, were separated by the machine.
Thanks to the machine, the spinner can live in England while the weaver
resides in the East Indies. Before the invention of machinery, the industry
of a country was carried on chiefly with raw materials that were the products
of its own soil; in England – wool, in Germany – flax, in France – silks
and flax, in the East Indies and the Levant – cottons, etc. Thanks to
the application of machinery and of steam, the division of labour was about
to assume such dimensions that large-scale industry, detached from the
national soil, depends entirely on the world market, on international exchange,
on an international division of labour. In short – the machine has so great
an influence on the division of labour, that when, in the manufacture of
some object, a means has been found to produce parts of it mechanically,
the manufacture splits up immediately into two works independent of each
other.

Need we speak of the philanthropic and providential aim that M.
Proudhon discovers in the invention and first application of machinery?

When in England the market had become so far developed that manual
labour was no longer adequate, the need for machinery was felt. Then came
the idea of the application of mechanical science, already quite developed
in the 18th century.

The automatic workshop opened its career with acts which were
anything but philanthropic. Children were kept at work at the whip’s end;
they were made an object of traffic and contracts were undertaken with
the orphanages. All the laws on the apprenticeship of workers were repealed,
because, to use M. Proudhon’s phraseology, there was no further need for
synthetic workers. Finally, from 1825 onwards, almost all the new
inventions were the result of collisions between the worker and the employer
who sought at all costs to depreciate the worker’s specialized ability.
After each new strike of any importance, there appeared a new machine.
So little indeed did the worker see in the application of machinery a sort
of rehabilitation, restoration – as M. Proudhon would say – that
in the 18th century he stood out for a very long time against the incipient
domination of the automaton.

“Wyatt,” says Doctor Ure, “invented the series of fluted rollers...
(the spinning fingers usually ascribed to Awkright)....

“The main difficulty did not, to my apprehension, lie so much
in the invention of a proper self-acting mechanism... as in training human
beings to renounce their desultory habits of work, and to identify themselves
with the unvarying regularity of the complex automaton. But 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 Awkright.”

[Vol. I, pp. 21-22, 23]

In short, by the introduction of machinery, the division of labour inside
society has grown up, the task of the worker inside the workshop has been
simplified, capital has been concentrated, human beings have been further
dismembered.

When M. Proudhon wants to be an economist, and to abandon for
a moment the “evolution of ideas in serial relation in the understanding,”
then he goes and draws erudition from Adam Smith, from a time when the
automatic workshop was only just coming into existence. Indeed, what a
difference between the division of labour as it existed in Adam Smith’s
day and as we see it in the automatic workshop! In order to make this properly
understood, we need only quote a few passages from Dr. Ure’s The Philosophy
of Manufactures.

“When Adam Smith wrote his immortal elements of economics, automatic
machinery being hardly known, he was properly led to regard the division
of labour as the grand principle of manufacturing improvement; and he showed,
in the example of pin-making, how each handicraftsman, being thereby enabled
to perfect himself by practice in one point, became a quicker and cheaper
workman. In each branch of manufacture he saw that some parts were, on
that principle, of easy execution, like the cutting of pin wires into uniform
lengths, and some were comparatively difficult, like the formation and
fixation of their heads; and therefore he concluded that to each a workman
of appropriate value and cost was naturally assigned. This appropriation
forms the very essence of the division of labour....

“But what was in Dr. Smith’s time a topic of useful illustration,
cannot now be used without risk of misleading the public mind as to the
right principle of manufacturing industry. In fact, the division, or rather
adaptation of labour to the different talents of men, is little thought
of in factory employment. On the contrary, wherever a process requires
a peculiar dexterity and steadiness of hand, it is withdrawn as soon as
possible from the cunning workman, who is prone to irregularities of many
kinds, and it is placed in charge of a peculiar mechanism, so self-regulating,
that a child may superintend it.

“The principle of the factory system then is, to substitute mechanical
science for hand skill, and the partition of a process into its essential
constituents, for the division or gradation of labour among artisans. On
the handicraft plan, labour more or less skilled, was usually the most expensive
element of production... but on the automatic plan, skilled labour gets
progressively superseded, and will, eventually, be replaced by mere overlookers
of machines.

“By the infirmity of human nature it happens, that the more skilful
the workman, the more self-willed and intractable he is apt to become,
and, of course, the less fit a component of a mechanical system, in which,
by occasional irregularities, he may do great damage to the whole. The
grand object therefore of the modern manufacturer is, through the union
of capital and science, to reduce the task of his workpeople to the exercise
of vigilance and dexterity – faculties, when concentrated to one process,
speedily brought to perfection in the young.

“On the gradation system, a man must serve an apprenticeship of
many years before his hand and eye become skilled enough for certain mechanical
feats; but on the system of decomposing a process into its constituents,
and embodying each part in an automatic machine, a person of common care
and capacity may be entrusted with any of the said elementary parts after
a short probation, and may be transferred from one to another, on any emergency,
at the discretion of the master. Such translations are utterly at variance
with the old practice of the division of labour, which fixed one man to
shaping the head of a pin, another to shaping the head of a pin, and another
to sharpening its point, with the most irksome and spirit-wasting uniformity,
for a whole life....

“But on the equalization plan of self-acting machines, the operative
needs to call his faculties only into agreeable exercise.... As his business
consists in ending the work of a well-regulated mechanism, he can learn
it in a short period; and when he transfers his services, from one machine
to another, he varies his task, and enlarges his views, by thinking on
those general combinations which result from his and his companions’ labours.
Thus, that cramping of the faculties, that narrowing of the mind, that
stunting of the frame, which were ascribed, and not unjustly, by moral
writers, to the division of labour, cannot, in common circumstances, occur
under the equable distribution of industry....

“It is, in fact, the constant aim and tendency of every improvement
in machinery to supersede human labour altogether, or to diminish its cost,
by substituting the industry of women and children for that of men; of
that of ordinary labourers for trained artisans.... This tendency to employ
merely children with watchful eyes and nimble fingers, instead of journeymen
of long experience, shows how the scholastic dogma of the division of labour
into degrees of skill has been exploded by our enlightened manufacturers.”

(Andre Ure, Philosophie des manufactures ou economie
industrielle, Vol.I, Chap. 1 [pp. 34-35])

What characterizes the division of labour inside modern society is that
it engenders specialized functions, specialists, and with them craft-idiocy.

“We are struck with admiration,” says Lemontey, “when we see among
the Ancients the same person distinguishing himself to a high degree as
philosopher, poet, orator, historian, priest, administrator, general of
an army. Our souls are appalled at the sight of so vast a domain. Each
one of us plants his hedge and shuts himself up in his enclosure. I do
not know whether by this parcellation the field is enlarged, but I do know
that man is belittled.”

What characterizes the division of labour in the automatic workshop is that
labour has there completely lost its specialized character. But the moment
every special development stops, the need for universality, the tendency
towards an integral development of the individual begins to be felt. The
automatic workshop wipes out specialists and craft-idiocy.

M. Proudhon, not having understood even this one revolutionary
side of the automatic workshop, takes a step backward and proposes to the
worker that he make not only the 12th part of a pin, but successively all
12 parts of it. The worker would thus arrive at the knowledge and the consciousness
of the pin. This is M. Proudhon’s synthetic labour. Nobody will contest
that to make a movement forward and another movement backward is to make
a synthetic movement.

To sum up, M. Proudhon has not gone further than the petty-bourgeois
ideal. And to realize this ideal, he can think of nothing better than to
take us back to the journeyman or, at most, to the master craftsman of
the Middle Ages. It is enough, he says somewhere in his book, to have created
a masterpiece once in one’s life, to have felt oneself just once to be
a man. Is not this, in form as in content, the masterpiece demanded by
the trade guild of the Middle Ages?

### 3. Competition and Monopoly

Good side of competition

“Competition is as essential to labour as division.... It is necessary ... for the advent of equality.” [I 186, 188]

Bad side of competition

“The principle is the negation of itself. Its most certain result is to ruin those whom it drags in its train.” [I 185]

General reflection

“The drawbacks which follow in its wake, just as the good it provides... both flow logically from the principle.” [I 185-86]

Problem to be solved

“To seek the principle of accommodation, which must be derived from a law superior to liberty itself.” [I 185]

“There can, therefore, be no question here of destroying competition, a thing as impossible to destroy as liberty; we have only to find its equilibrium, I would be ready to say its police.” [I 223]

M. Proudhon begins by defending the eternal necessity
of competition against those who wish to replace it by emulation
[Engels: The Fourierists].

There is no “purposeless emulation,” and as “the object of every passion
is necessarily analogous to the passion itself – a woman for the lover,
power for the ambitious, gold for the miser, a garland for the poet –
the object of industrial emulation is necessarily profit. Emulation is
nothing but competition itself.”

[I 187]

Competition is emulation with a view to profit. Is industrial emulation
necessarily emulation with a view to profit, that is, competition?? M.
Proudhon proves it by affirming it. We have seen that, for him, to affirm
is to prove, just as to suppose is to deny.

If the immediate object of the lover is the woman, the
immediate object of industrial emulation is the product and not the profit.

Competition is not industrial emulation, it is commercial emulation.
In our time industrial emulation exists only in view of commerce. There
are even phases in the economic life of modern nations when everybody is
seized with a sort of craze for making profit without producing. This speculation
craze, which recurs periodically, lays bare the true character of competition,
which seeks to escape the need for industrial emulation.

If you had told an artisan of the 14th century that the privileges
and the whole feudal organization of industry were going to be abrogated
in favor of industrial emulation, called competition, he would have replied
that the privileges of the various corporations, guilds and fraternities
were organized competition. M. Proudhon does not impose upon this when
he affirms that “emulation is nothing but competition itself.”

“Decree that from the first of January 1847, labor and wages shall
be guaranteed to everybody: immediately an immense relaxation will succeed
the high tension of industry.”

[I 189]

Instead of a supposition, an affirmation and a negation, we have now a
decree that M. Proudhon issues purposely to prove the necessity of competition,
its eternity as a category, etc.

If we imagine that decrees are all that is needed to get away
from competition, we shall never get away from it. And if we go so far
as to propose to abolish competition while retaining wages, we shall be
proposing nonsense by royal decree. But nations do not proceed by royal
decree. Before framing such ordinances, they must at least have changed
from top to bottom the conditions of their industrial and political existence,
and consequently their whole manner of being.

M. Proudhon will reply, with his imperturbable assurance, that
it is the hypothesis of “a transformation of our nature without historical
antecedents,” and that he would be right in “excluding is from the discussion,”
we know not in virtue of which ordinance.

M. Proudhon does not know that all history is nothing but a continuous
transformation of human nature.

“Let us stick to the facts. The French Revolution was made for industrial
liberty as much as for political liberty; and although France, in 1789,
had not perceived – let us say it openly – all the consequences of the
principle whose realization it demanded, it was mistaken neither in its
wishes nor in its expectations. Whoever attempts to deny this loses, in
my view, the right to criticism. I will never dispute with an adversary
who puts as principle the spontaneous error of 25 million men....

“Why then, if competition had not been a principle of social economy,
a decree of fate, a necessity of the human soul, why, instead of abolishing
corporations, guilds and brotherhoods, did nobody think rather of repairing
the whole??”

[I 191, 192]

So, since the French of the 18th century abolished corporations, guilds,
and fraternities instead of modifying them, the French of the 19th century
must modify competition instead of abolishing it. Since competition was
established in France in the 18th century as a result of historical needs,
this competition must not be destroyed in the 19th century because of other
historical needs. M. Proudhon, not understanding that the establishment
of competition was bound up with the actual development of the men of the
18th century, makes of competition a necessity of the human soul,
in partibus infidelium [literally, “territory of the infidels”; here,
meaning, “beyond the realm of reality.”] What would he have made of the
great Colbert for the 17th century??

After the revolution comes the present state of affairs. M. Proudhon
equally draws facts from it to show the eternity of competition, by proving
that all industries in which this category is not yet sufficiently developed,
as in agriculture, are in a state of inferiority and decrepitude.

To say that there are industries which have not yet reached the
stage of competition, that others gains are below the level of bourgeois
production, is drivel which gives not the slightest proof of the eternity
of competition.

All M. Proudhon’s logic amounts to is this: competition is a social
relation in which we are now developing our productive forces. To this
truth, he gives no logical development, but only forms, often very well
developed, when he says that competition is industrial emulation, the present-day
mode of freedom, responsibility in labor, constitution of value, a condition
for the advent of equality, a principle of social economy, a decree of
fate, a necessity of the human soul, an inspiration of eternal justice,
liberty in division, division on liberty, an economic category.

“Competition and association support each other. Far from excluding
each other they are not even divergent. Whoever says competition already
supposes a common aim. Competition is therefore not egoism, and the most
deplorable error committed by socialism is to have regarded it as the
overthrow of society.”

[I 223]

Whoever says competition says common aim, and that proves, on the one hand,
that competition is association; on the other, that competition is not
egoism. And whoever says egoism, does he not say common aim?? Every
egoism operates in society and by the fact of society. Hence it presupposes
society, that is to say, common aims, common needs, common means of production,
etc., etc. Is it, then, be mere chance that the competition and association
which the Socialists talk about are not even divergent??

Socialists know well enough that present-day society is founded
on competition. How could they accuse competition of overthrowing present-day
society which they want to overthrow themselves?? And how could they accuse
competition of overthrowing the society to come, in which they see, on
the contrary, the overthrow of competition??

M. Proudhon says, later on, that competition is the opposite
of monopoly, and consequently cannot be the opposite of association.

Feudalism was, from its origins, opposed to patriarchal monarchy;
it was thus not opposed to competition, which was not yet in existence.
Does it follow that competition is not opposed to feudalism??

In actual fact, society, association are denominations
which can be given to every society, to feudal society as well as to bourgeois
society which is association founded on competition. How then can there
be Socialists, who, by the single word association, think they can
refute competition?? And how can M. Proudhon himself wish to defend competition
against socialism by describing competition by the single word association??

All we have just said makes up the beautiful side of competition
as M. Proudhon sees it. Now let us pass on to the ugly side, that is the
negative side, of competition, its drawbacks, its destructive, subversive
elements, its injurious qualities.

There is something dismal about the picture M. Proudhon draws
of it.

Competition engenders misery, it foments civil war, it “changes
natural zones,” mixes up nationalities, causes trouble in families, corrupts
the public conscience, “subverts the notion of equity, of justice,” of
morality, and what is worse, it destroys free, honest trade, and does not
even give in exchange synthetic value, fixed, honest price. It disillusions
everyone, even economists. It pushes things so far as to destroy its very
self.

After all the ill M. Proudhon says of it, can there be for the
relations of bourgeois society, for its principles and its illusions, a
more disintegrating, more destructive element than competition??

It must be carefully noted that competition always becomes the
more destructive for bourgeois relations in proportion as it urges
on a feverish creation of new productive forces, that is, of the material
conditions of a new society. In this respect at least, the bad side of
competition would have its good points.

“Competition as an economic position or phase, considered in its origin,
is the necessary result... of the theory of the reduction of general expenses.”

[I 235]

For M. Proudhon, the circulation of the blood must be a consequence of
Harvey’s theory.

“Monopoly is the inevitable end of competition, which engenders it
by a continual negation of itself. This generation of monopoly is in itself
a justification of it....

“Monopoly is the natural opposite of competition... but as soon
as competition is necessary, it implies the idea of monopoly, since monopoly
is, as it were, the seat of each competing individuality.”

[I 236, 237]

We rejoice with M. Proudhon that he can for once at least properly apply
his formula to thesis and antithesis. Everyone knows that modern monopoly
is engendered by competition itself.

As for the content, M. Proudhon clings to poetic images. Competition
made “of every subdivision of labor a sort of sovereignty in which each
individual stood with his power and his independence.” Monopoly is “the
seat of every competing individuality.” The sovereignty is worth at least
as much as the seat.

M. Proudhon talks of nothing but modern monopoly engendered by
competition. But we all know that competition was engendered by feudal
monopoly. Thus competition was originally the opposite of monopoly and
not monopoly the opposite of competition. So that modern monopoly is not
a simple antithesis, it is on the contrary the true synthesis.

Thesis: Feudal monopoly, before competition.

Antithesis: Competition.

Synthesis: Modern monopoly, which is the negation of feudal monopoly,
in so far as it implies the system of competition, and the negation of
competition in so far as it is monopoly.

Thus modern monopoly, bourgeois monopoly, is synthetic monopoly,
the negation of the negation, the unity of opposites. It is monopoly in
the pure, normal, rational state.

M. Proudhon is in contradiction with his own philosophy when he
turns bourgeois monopoly into monopoly in the crude, primitive, contradictory,
spasmodic state. M. Rossi, whom M. Proudhon quotes several times on the
subject of monopoly, seems to have a better grasp of the synthetic character
of bourgeois monopoly. In his Cours d’economie politique, he distinguishes
between artificial monopolies and natural monopolies. Feudal monopolies,
he says, are artificial, that is, arbitrary; bourgeois monopolies are natural,
that is, rational.

Monopoly is a good thing, reasons M. Proudhon, since it is an
economic category, an emanation “from the impersonal reason of humanity.”
Competition, again, is a good thing since it also is an economic category.
But what is not good is the reality of monopoly and the reality of competition.
What is still worse is that competition and monopoly devour each other.
What is to be done?? Look for the synthesis of these two eternal thoughts,
wrest it from the bosom of God, where is has been deposited from time immemorial.

In practical life we find not only competition, monopoly and the
antagonism between them, but also the synthesis of the two, which is not
a formula, but a movement. Monopoly produces competition, competition produces
monopoly. Monopolists are made from competition; competitors become monopolists.
If the monopolists restrict their mutual competition by means of partial
associations, competition increases among the workers; and the more the
mass of the proletarians grows as against the monopolists of one nation,
the more desperate competition becomes between the monopolists of different
nations. The synthesis is of such a character that monopoly can only maintain
itself by continually entering into the struggle of competition.

To make the dialectical transition to the taxes which come
after monopoly, M. Proudhon talks to us about the social
genius which, after zigzagging intrepidly onward,

“after striding with a jaunty step, without repenting and without
halting, reaches the corner of monopoly, casts backward a melancholy glance,
and, after profound reflection, assails all the objects of production with
taxes, and creates a whole administrative organization, in order that all
employments be given to the proletariat and paid by the men of monopoly.”

[I 284, 285]

What can we say of this genius, which, while fasting, walks about in a
zigzag?? And what can we say of this walking which has no other object
in view than that of destroying the bourgeois by taxes, whereas taxes are
the very means of giving the bourgeois the wherewithal to preserve themselves
as the ruling class??

Merely to give a glimpse of the manner in which M. Proudhon treats
economic details, it suffices to say that, according to him, the tax on
consumption was established with a view to equality, and to relieve the
proletariat.

The tax on consumption has assumed its true development only since
the rise of the bourgeoisie. In the hands of industrial capital, that is,
of sober and economical wealth, which maintains, reproduces, and increases
itself by the direct exploitation of labor, the tax on consumption was
a means of exploiting the frivolous, gay, prodigal wealth of the fine lords
who did nothing but consume, James Steuart clearly developed this original
purpose of the tax on consumption in his Recherches des principes de
l’economie politique, which he published 10 years before Adam Smith.

“Under the pure monarchy, the prince seems jealous, as it were, of
growing wealth, and therefore imposes taxes upon people who are growing
richer. Under the limited government they are calculated chiefly to affect
those who from rich are growing poorer. Thus the monarch imposes a tax
upon industry, where everyone is rated in proportion to the gain he is
supposed to make by his profession. The poll-tax and taille are
likewise proportioned to the supposed opulence of everyone libel to them....
In limited governments, impositions are more generally laid upon consumption.”

[II 190-91]

As for the logical sequence of taxes, of the balance of trade, of
credit – in the understanding of M. Proudhon – we could only remark that
the English bourgeoisie, on attaining its political constitution under
William of Orange, created all at once a new system of taxes, public credit,
and the system of protective duties, as soon as it was in a position freely
to develop its conditions of existence.

This brief summary will suffice to give the reader a true idea
of M. Proudhon’s lubrications on the police or on taxes, the balance of
trade, credit, communism, and population. We defy the most indulgent criticism
to treat these chapters seriously.

### 4. Property or Ground Rent

In each historical epoch, property has developed
differently and under a set of entirely different social relations. Thus
to define bourgeois property is nothing else than to give an exposition
of all the social relations of bourgeois production.

To try to give a definition of property as of an independent relation,
a category apart, an abstract and eternal idea, can be nothing but an illusion
of metaphysics or jurisprudence.

M. Proudhon, while seeming to speak of property in general, deals
only with landed property, with ground rent.

“The origin of rent, as property, is, so to speak, extra-economic:
it rests in psychological and moral considerations which are only very
distantly connected with the production of wealth.”

(Vol. II, p. 265)

So M. Proudhon declares himself incapable of understanding the economic
origin of rent and of property. He admits that this incapacity obliges
him to resort to psychological and moral considerations, which, indeed,
while only distantly connected with the production of wealth, have yet
a very close connection with the narrowness of his historical views. M.
Proudhon affirms that there is something mystical and mysterious
about the origin of property. Now, to see mystery in the origin of property
– that is, to make a mystery of the relation between production itself
and the distribution of the instruments of production – is not this, to
use M. Proudhon’s language, a renunciation of all claims to economic science?

M. Proudhon “confines himself to recalling that at the seventh epoch
of economic evolution – credit – when fiction had caused reality to vanish,
and human activity threatened to lose itself in empty space, it had become
necessary to bind man more closely to nature. Now, rent was the price of
this new contract.”

(Vol. II, p. 269)

L’homme aux quarante écus [1] foresaw a M.
Proudhon of the future:

“Mr. Creator, by your leave: everyone is master in his own world: but
you will never make me believe that the one we live in is made of glass.”

In your world, where credit was a means of losing oneself in empty space,
it is very possible that property became necessary in order to bind man
to nature. In the world of real production, where landed property always
precedes credit, M. Proudhon’s horror vacui [horror of a vacuum] could not exist.

The existence of rent once admitted, whatever its origin, it becomes
a subject of mutually antagonistic negotiations between the farmer and
the landed proprietor. What is the ultimate result of these negotiations,
in other words, what is the average amount of rent? This is what M. Proudhon
says:

“Ricardo’s theory answers this question. In the beginning of society,
when man, new to earth, had before him nothing but huge forests, when the
earth was vast and when industry was beginning to come to life, rent must
have been nil. Land, as yet unformed by labour, was an object of utility;
it was not an exchange value, it was common, not social. Little by little,
the multiplication of families and the progress of agriculture caused the
price of land to make itself felt. Labour came to give the soil its worth;
from this, rent came into being. The more fruit a field yielded with the
same amount of labour, the higher it was valued; hence the tendency of proprietors
was always to arrogate to themselves the whole amount of the fruits of
the soil, less the wages of the farm – that is, less the costs of production.
Thus property followed on the heels of labour to take from it all
the product that exceeded the actual expenses. As the proprietor fulfils
a mystic duty and represents the community as against the colonus,
that farmer is, by the dispensation of Providence, no more than a responsible
labourer, who must account to society for all he reaps above his legitimate
wage. ...

“In essence and by destination, then, rent is an instrument of
distributive justice, one of the thousand means that the genius of economy
employs to attain to equality. It is an immediate land valuation which
is carried out contradictorily by landowners and farmers, without any
possible collusion, in a higher interest, and whose ultimate result must
be to equalize the possession of the land between the exploiters of the
soil and the industrialists....

“It needed no less than this magic of property to snatch from
the colonus the surplus of his product which he cannot help regarding
as his own and of which he considers himself to be exclusively the author.
Rent, or rather property, has broken down agricultural egoism and created
a solidarity that no power, no partition of the land could have brought
into being....

“The moral effect of property having been secured, at present
what remains to be done is to distribute the rent.”

[Vol. II, pp. 270-272]

All this tumult of words may be reduced firstly to this: Ricardo says that
the excess of the price of agricultural products over their cost of production,
including the ordinary profit and interest on the capital, gives the measure
of the rent. M. Proudhon does better. He makes the landowner intervene,
like a Deus ex machina, and snatch from the colonus all the
surplus of his production over the cost of production. He makes use of
the intervention of the landowner to explain property,
of the intervention of the rent-receiver to explain rent.
He answers the problem by formulating the same problem and adding an extra
syllable. [2]

Let us note also that in determining rent by the difference in
fertility of the soil, M. Proudhon assigns a new origin to it, since land,
before being assessed according to different degrees of fertility, “was
not,” in his view, “an exchange value, but was common.” What, then, has
happened to the fiction about rent having come into being through the necessity
of bringing back to the land man who was about to lose himself in the infinity
of empty space?

Now let us free Ricardo’s doctrine from the providential, allegorical,
and mystical phrases in which M. Proudhon has been careful to wrap it.

Rent, in the Ricardian sense, is property in land in its bourgeois
state; that is, feudal property which has become subject to the conditions
of bourgeois production.

We have seen that, according to the Ricardian doctrine, the price
of all objects is determined ultimately by the cost of production, including
the industrial profit; in other words, by the labour time employed. In manufacturing
industry, the price of the product obtained by the minimum of labour regulates
the price of all other commodities of the same kind, seeing that the cheapest
and most productive instruments of production can be multiplied to infinity
and that competition necessarily gives rise to a market price – that is,
a common price for all products of the same kind.

In agricultural industry, on the contrary, it is the price of
the product obtained by the greatest amount of labour which regulates the
price of all products of the same kind. In the first place, one cannot,
as in manufacturing industry, multiply at will the instruments of production
possessing the same degree of productivity, that is, plots of land with
the same degree of fertility. Then, as population increases, land of an
inferior quality begins to be exploited, or new outlays of capital, proportionately
less productive than before, are made upon the same plot of land. In both
cases a greater amount of labour is expended to obtain a proportionately
smaller product. The needs of the population having rendered necessary
this increase of labour, the product of the land whose exploitation is the
more costly has as certain a sale as that of a piece of land whose exploitation
is cheaper. As competition levels the market price, the product of the
better soil will be paid for as dearly as that of the inferior. It is the
excess of the price of the products of the better soil over the cost of
their production that constitutes rent. If one could always have at one’s
disposal plots of land of the same degree of fertility; if one could, as
in manufacturing industry, have recourse continually to cheaper and more
productive machines, or if the subsequent outlays of capital produced as
much as the first, then the price of agricultural products would be determined
by the price of commodities produced by the best instruments of production,
as we have seen with the price of manufactured products. But, from this
moment rent would have disappeared also.

For the Ricardian doctrine – “once the premises granted” – to be generally true,
it is moreover essential that capital should be freely applicable to different
branches of industry; that a strongly developed competition among the capitalists
should have brought profits to an equal level; that the farmer should be
no more than an industrial capitalist claiming for the use of his capital
on the land, a profit equal to that which he would draw from his capital
if it were applied in any kind of manufacture; that agricultural exploitation
should be subjected to the regime of large-scale industry; and finally,
that the landowner himself should aim at nothing beyond the money return.

It may happen, as in Ireland, that rent does not yet exist, although
the letting of land has reached an extreme development there. Rent being
the excess not only over wages, but also over industrial profit, it cannot
exist where the landowner’s revenue is nothing but a mere levy on wages.

Thus, far from converting the exploiter of the land, the farmer,
into a simple labourer, and “snatching from the cultivator the surplus
of his product, which he cannot help regarding as his own,” rent confronts
the landowner, not with the slave, the serf, the payer of tribute, the
wage labourer, but with the industrial capitalist.

Once constituted as ground rent, ground property has in its possession
only the surplus over production costs, which are determined not only by
wages but also by industrial profit. It is therefore from the landowner
that ground rent snatched a part of his income. Thus, there was a big lapse
of time before the feudal farmer was replaced by the industrial capitalist.
In Germany, for example, this transformation began only in the last third
of the 18th century. It is in England alone that this relation between
the industrial capitalist and the landed proprietor has been fully developed.

So long as there was only M. Proudhon’s colonus, there
was no rent. The moment rent exists, the colonus is no longer
the farmer, but the worker, the farmer’s colonus. The abasement
of the labourer, reduced to the role of a simple worker, day labourer, wage-earner,
working for the industrial capitalist; the invention of the industrial
capitalist, exploiting the land like any other factory; the transformation
of the landed proprietor from a petty sovereign into a vulgar usurer; these
are the different relations expressed by rent.

Rent, in the Ricardian sense, is patriarchal agriculture transformed
into commercial industry, industrial capital applied to land, the town
bourgeoisie transplanted into the country. Rent, instead of binding
man to nature, has merely bound the exploitation of the land to competition.
Once established as rent, landed property itself is the result of competition,
since from that time onwards it depends on the market value of agricultural
produce. As rent, landed property is mobilized and becomes an article of
commerce. Rent is possible only from the moment when the development of
urban industry, and the social organization resulting therefrom, force
the landowner to aim solely at cash profits, at the monetary relation of
his agricultural products – in fact to look upon his landed property only
as a machine for coining money. Rent has so completely divorced the landed
proprietor from the soil, from nature, that he has no need even to know
his estates, as is to be seen in England. As for the farmer, the industrial
capitalist and the agricultural worker, they are no more bound to the land
they exploit than are the employer and the worker in the factories to the
cotton and wool they manufacture; they feel an attachment only for the
price of their production, the monetary product. Hence the jeremiads of
the reactionary parties, who offer up all their prayers for the return
of feudalism, of the good old patriarchal life, of the simple manners and
the fine virtues of our forefathers. The subjection of the soil to the
laws which dominate all other industries is and always will be the subject
of interested condolences. Thus it may be said that rent has become the
motive power which has introduced idyll into the movement of history.

Ricardo, after postulating bourgeois production as necessary for
determining rent, applies the conception of rent, nevertheless, to the
landed property of all ages and all countries. This is an error common
to all the economists, who represent the bourgeois relations of production
as eternal categories.

From the providential aim of rent – which is, for M. Proudhon,
the transformation of the colonus into a responsible worker,
he passes to the equalized reward of rent.

Rent, as we have just seen, is constituted by the equal price
of the products of lands of unequal fertility, so that a hectolitre
of corn which has cost 10 francs is sold for 20 francs if the cost of production
rises to 20 francs upon soil of inferior quality.

So long as necessity forces the purchase of all the agricultural
products into the market, the market price is determined by the cost of
the most expensive product. Thus it is this equalization of price, resulting
from competition and not from the different fertilities of the lands, that
secures to the owner of the better soil a rent of 10 francs for every
hectolitre that his tenant sells.

Let us suppose for a moment that the price of corn is determined
by the labour time needed to produce it, and at once the hectolitre of corn
obtained from the better soil will sell at 10 francs, while the hectolitre
of corn obtained on the inferior soil will cost 20 francs. This being admitted,
the average market price will be 15 francs, whereas, according to the law
of competition, it is 20 francs. If the average price were 15 francs, there
would be no occasion for any distribution, whether equalized or otherwise,
for there would be no rent. Rent exists only when one can sell for 20 francs
the hectolitre of corn which has cost the producer 10 francs. M. Proudhon
supposes equality of the market price, with unequal costs of production,
in order to arrive at an equalized sharing out of the product of inequality.

We understand such economists as Mill, Cherbuliez, Hilditch, and
others demanding that rent should be handed over to the state to serve
in place of taxes. That is a frank expression of the hatred the industrial
capitalist bears towards the landed proprietor, who seems to him a useless
thing, an excrescence upon the general body of bourgeois production.

But first to make the price of the hectolitre of corn 20 francs
in order then to make a general distribution of the 10 francs overcharge
levied on the consumer, is indeed enough to make the social genius
pursue its zigzag course mournfully – and knock its head against
some corner.

Rent becomes, under M. Proudhon’s pen, “an immense land valuation,
which is carried out contradictorily by land-owners and farmers... in
a higher interest, and whose ultimate result must be to equalize the possession
of land between exploiters of the soil and the industrialists.”

[Vol. II, p. 271]

For any land valuation based upon rent to be of practical value, the conditions
of present society must not be departed from.

Now, we have shown that the farm rent paid by the farmer to the
landlord expresses the rent with any exactitude only in the countries most
advanced in industry and commerce. And even this rent often includes interest
paid to the landlord on capital incorporated in the land. The location
of the land, the vicinity of towns, and many other circumstances influence
the farm rent and modify the ground rent. These peremptory reasons would
be enough to prove the inaccuracy of a land valuation based on rent.

Thus history, far from supplying, in rent, a ready-made land valuation,
does nothing but change and turn topsy-turvy the land valuations already
made.

Finally, fertility is not so natural a quality as might be thought;
it is closely bound up with the social relations of the time. A piece of
land may be very fertile for corn growing, and yet the market price may
decide the cultivator to turn it into an artificial pastureland and thus
render it infertile.

M. Proudhon has improvised his land valuation, which has not even
the value of an ordinary land valuation, only to give substance to the
providentially equalitarian aim of rent.

“Rent,” continues M. Proudhon, “is the interest paid on a capital which
never perishes, namely – land. And as the capital is capable of no increase
in matter, but only of an indefinite improvement in its use, it comes about
that while the interest or profit on a loan (mutuum) tends to diminish
continually through abundance of capital, rent tends always to increase
through the perfecting of industry, from which results the improvement
in the use of the land.... Such, in its essence, is rent.”

(Vol. II, p. 265)

This time, M. Proudhon sees in rent all the characteristics of interest,
save that it is derived from capital of a specific nature. This capital
is land, an eternal capital, “which is capable of no increase in matter,
but only an indefinite improvement in its use.” In the progressive advance
of civilization, interest has a continual tendency to fall, whilst rent
continually tends to rise. Interest falls because of the abundance of capital;
rent rises owning to the improvements brought about in industry, which
results in an ever better utilization of land.

Such, in its essence, is the opinion of M. Proudhon.

Let us first examine how far it is true to say that rent is interest
on capital.

For the landed proprietor himself, rent represents the interest
on the capital that the land has cost him, or that he would draw from it
if he sold it. But in buying or selling land he only buys or sells rent.
The price he pays to make himself a receiver of rent is regulated by the
rate of interest in general and has nothing to do with actual nature
of rent. The interest on capital invested in land is in general lower
than the interest on capital invested in manufacture or commerce. Thus,
for those who make no distinction between the interest that the land represents
to the owner and the rent itself, the interest on land capital diminishes
still more than does the interest on other capital. But it is not a question
of the purchase or sale price of rent, of the marketable value of rent,
of capitalized rent, it is a question of rent itself.

Farm rent can imply again, apart from rent proper, the interest
on the capital incorporated in the land. In this instance the landlord
receives this part of the farm rent, not as a landlord but as a capitalist;
but this is not the rent proper that we are to deal with.

Land, so long as it is not exploited as a means of production,
is not capital. Land as capital can be increased just as much as all the
other instruments of production. Nothing is added to its matter, to use
M. Proudhon’s language, but the lands which serve as instruments of production
are multiplied. The very fact of applying further outlays of capital to
land already transformed into means of production increases land as capital
without adding anything to land as matter – that is, to the extent of
the land. M. Proudhon’s land as matter is the Earth in its limitation.
As for the eternity he attributes to land, we grant readily it has this
virtue as matter. Land as capital is no more eternal than any other capital.

Gold and silver, which yield interest, are just as lasting and
eternal as land. If the price of gold and silver falls, while that of land
keeps rising, this is certainly not because of its more or less eternal
nature.

Land as capital is fixed capital; but fixed capital gets used
up just as much as circulating capital. Improvements to the land need production
and upkeep; they last only for a time; and this they have in common with
all other improvements used to transform matter into means of production.
If land as capital were eternal, some lands would present a very different
appearance from what they do today, and we should see the Roman Campagna,
Sicily, Palestine, in all the splendour of their former prosperity.

There are even instances when land as capital might disappear,
even though the improvements remain incorporated in the land.

In the first place, this occurs every time rent proper is wiped
out by the competition of new and more fertile soils; secondly, the improvements
which might have been valuable at one time cease to be of value the moment
they become universal owing to the development of agronomy.

The representative of land as capital is not the landlord, but
the farmer. The proceeds yielded by land as capital are interest and industrial
profit, not rent. There are lands which yield such interest and profit
but still yield no rent.

Briefly, land in so far as it yields interest, is land capital,
and as land capital it yields no rent, it is not landed property. Rent
results from the social relations in which the exploitation of the land
takes place. It cannot be a result of the more or less solid, more or less
durable nature of the soil. Rent is a product of society and not of the
soil.

According to M. Proudhon, “improvement in the use of the land”
– a consequence “of the perfecting of industry” – causes the continual
rise in rent. On the contrary, this improvement causes its periodic fall.

Wherein consists, in general, any improvement, whether in agriculture
or in manufacture? In producing more with the same labour; in producing
as much, or even more, with less labour. Thanks to these improvements, the
farmer is spared from using a greater amount of labour for a relatively
smaller product. He has no need, therefore, to resort to inferior soils,
and instalments of capital applied successively to the same soil remain
equally productive.

Thus, these improvements, far from continually raising rent as
M. Proudhon says, become on the contrary so many temporary obstacles preventing
its rise.

The English landowners of the 17th century were so well aware
of this truth, that they opposed the progress of agriculture for fear of
seeing their incomes diminish. (See Petty, an English economist of the
time of Charles II.)

Footnotes

L’homme aux quarante écus: “The Man of Forty Ecus” – the hero of Voltaire’s
story of the same name, a modest, hard-working peasant with an annual income
of 40 ecus; the following passage is quoted from the story.

In the original manuscript, Marx makes a play on words in the French: turning “propriété” (property) into “proprietaire” (landowner)
and “rente” (rent) into “rentier” (rent-receiver).

### Strikes and Combinations of Workers

“Every upward movement in wages can have no other effect than a rise
in the price of corn, wine, etc., that is, the effect of a dearth. For
what are wages? They are the cost price of corn, etc.; they are the integrant
price of everything. We may go even further: wages are the proportion
of the elements composing wealth and consumed reproductively every day
by the mass of the workers. Now, to double wages ... is to attribute to
each one of the producers a greater share than his product, which is contradictory,
and if the rise extends only to a small number of industries, it brings
a general disturbance in exchange; in a word, a dearth....

“It is impossible, I declare, for strikes followed by an increase
in wages not to culminate in a general rise in prices: this is as certain
as that two and two make four.”

(Proudhon, Vol. I, pp. 110 and 111)

We deny all these assertions, except that two and
two make four.

In the first place, there is no general rise in prices.
If the price of everything doubles at the same time as wages, there is
no change in price, the only change is in terms.

Then again, a general rise in wages can never produce a more or
less general rise in the price of goods. Actually, if every industry employed
the same number of workers in relation to fixed capital or to the instruments
used, a general rise in wages would produce a general fall in profits and
the current price of goods would undergo no alteration.

But as the relation of manual labour to fixed capital is not the
same in different industries, all the industries which employ a relatively
greater mass of capital and fewer workers, will be forced sooner or later
to lower the price of their goods. In the opposite case, in which the price
of their goods is not lowered, their profit will rise above the common
rate of profits. Machines are not wage-earners. Therefore, the general
rise in wages will affect less those industries, which, compared with the
others, employ more machines than workers. But as competition always tends
to level the rate of profits, those profits which rise above the average
rate cannot but be transitory. Thus, apart from a few fluctuations, a general
rise in wages will lead, not as M. Proudhon says, to a general increase
in prices, but to a partial fall – that is a fall in the current price
of the goods that are made chiefly with the help of machines.

The rise and fall of profits and wages expresses merely the proportion
in which capitalists and workers share in the product of a day's work,
without influencing in most instances the price of the product. But that
“strikes followed by an increase in wages culminate in a general rise in
prices, in a dearth even” – those are notions which can blossom only in
the brain of a poet who has not been understood.

In England, strikes have regularly given rise to the invention
and application of new machines. Machines were, it may be said, the weapon
employed by the capitalist to quell the revolt of specialized labour. The
self-acting mule, the greatest invention of modern industry, put
out of action the spinners who were in revolt. If combinations and strikes
had no other effect than that of making the efforts of mechanical genius
react against them, they would still exercise an immense influence on the
development of industry.

“I find,” continues M. Proudhon, “in an article published by M. Leon
Faucher... September 1845, that for some time the British workers have
got out the habit of combination, which is assuredly a progress for which
one cannot but congratulate them: but this improvement in the morale
of the workers comes chiefly from their economic education. ‘It is not
on the manufacturers,’ cries a spinning-mill worker at a Bolton meeting,
‘that wages depend. In periods of depression the masters are, so to speak,
merely the whip with which necessity arms itself, and whether they want
to or not, they have to deal blows. The regulative principle is the relation
of supply and demand; and the masters have not this power’ ....

“Well done!” cries M. Proudhon. “These are well-trained workers,
model workers, etc., etc., etc. Such poverty did not exist in Britain;
it will not cross the Channel.”

(Proudhon, Vol. I, pp. 261 and 262)

Of all the towns in England, Bolton is the one in which the radicalism
is the most developed. The Bolton workers are known to be the most revolutionary
of all. At the time of the great agitation in England for the abolition
of the Corn Laws, the English manufacturers thought that they could cope
with the landowners only by thrusting the workers to the fore. But as the
interests of the workers were no less opposed to those of the manufacturers
than the interests of the manufacturers were to those of the landowners,
it was natural that the manufacturers should fare badly in the workers'
meetings. What did the manufacturers do? To save appearances they organized
meetings composed, to a large extent, of foremen, of the small number of
workers who were devoted to them, and of the real friends of trade.
When later on the genuine workers tried, as in Bolton and Manchester, to
take part in these sham demonstrations, in order to protest against them,
they were forbidden admittance on the ground that it was a ticket meeting
– a meeting to which only persons with entrance cards were admitted. Yet
the posters placarded on the walls had announced public meetings. Every
time one of these meetings was held, the manufacturers' newspapers gave
a pompous and detailed account of the speeches made. It goes without saying
that it was the foremen who made these speeches. The London papers reproduced
them word for word. M. Proudhon has the misfortune to take foremen for
ordinary workers, and enjoins them not to cross the Channel.

If in 1844 and 1845 strikes drew less attention than before, it
was because 1844 and 1845 were the first two years of prosperity that British
industry had had since 1837. Nevertheless none of the trades unions
had been dissolved.

Now let us listen to the foremen of Bolton. According to them
manufacturers have no command over wages because they have no command over
the price of products, and they have no command over the price of products
because they have no command over the world market. For this reason, they
wish it to be understood that combinations should not be formed to extort
an increase in wages from the masters. M. Proudhon, on the contrary, forbids
combinations for fear they should be followed by a rise in wages which
would bring with it a general dearth. We have no need to say that on one
point there is an entente cordiale between the foremen and M. Proudhon:
that a rise in wages is equivalent to a rise in the price of products.

But is the fear of a dearth the true cause of M. Proudhon's rancour?
No. Quite simple, he is annoyed with the Bolton foremen because they determine
value by supply and demand and hardly take any account of constituted
value, of value which has passed into the state of constitution, of
the constitution of value, including permanent exchangeability and all
the other proportionalities of relations and relations of proportionality,
with Providence at their side.

“A workers' strike is illegal, and it is not only the Penal Code that
says so, it is the economic system, the necessity of the established order....

“That each worker individually should dispose freely over his
person and his hands, this can be tolerated, but that workers should undertake
by combination to do violence to monopoly, is something society cannot
permit.”

(Vol. I, pp. 334 and 335)

M. Proudhon wants to pass off an article of the Penal Code as a necessary
and general result of bourgeois relations of production.

In England, combination is authorized by an Act of Parliament,
and it is the economic system which has forced Parliament to grant this
legal authorization. In 1825, when, under the Minister Huskisson, Parliament
had to modify the law in order to bring it more and more into line with
the conditions resulting from free competition, it had of necessity to
abolish all laws forbidding combinations of workers. The more modern industry
and competition develop, the more elements there are which call forth and
strengthen combination, and as soon as combination becomes an economic fact,
daily gaining in solidity, it is bound before long to become a legal fact.

Thus the article of the Penal Code proves at the most that modern
industry and competition were not yet well developed under the Constituent
Assembly and under the Empire. [1]

Economists and socialists [*1] are
in agreement on one point: the condemnation of combination. Only
they have different motives for their act of condemnation.

The economists say to workers:

Do not combine. By combination you hinder the regular progress
of industry, you prevent manufacturers from carrying out their orders,
you disturb trade and you precipitate the invasion of machines which, by
rendering your labour in part useless, force you to accept a still lower
wage. Besides, whatever you do, your wages will always be determined by
the relation of hands demanded to hands supplied, and it is an effort as
ridiculous as it is dangerous for you to revolt against the eternal laws
of political economy.

The socialists say to the workers:

Do not combine, because what will you gain by it anyway? A rise
in wages? The economists will prove to you quite clearly that the few ha'pence
you may gain by it for a few moments if you succeed will be followed by
a permanent fall. Skilled calculators will prove to you that it would take
you years merely to recover, through the increase in your wages, the expenses
incurred for the organization and upkeep of the combinations.

And we, as socialists, tell you that, apart from the money question,
you will continue nonetheless to be workers, and the masters will still
continue to be the masters, just as before. So no combination! No politics!
For is not entering into combination engaging in politics?

The economists want the workers to remain in society as it is
constituted and as it has been signed and sealed by them in their manuals.

The socialists want the workers to leave the old society alone,
the better to be able to enter the new society which they have prepared
for them with so much foresight.

In spite of both of them, in spite of manuals and utopias, combination
has not yet ceased for an instant to go forward and grow with the development
and growth of modern industry. It has now reached such a stage, that the
degree to which combination has developed in any country clearly marks
the rank it occupies in the hierarchy of the world market. England, whose
industry has attained the highest degree of development, has the biggest
and best organized combinations.

In England, they have not stopped at partial combinations which
have no other objective than a passing strike, and which disappear with
it. Permanent combinations have been formed, trades unions, which
serve as ramparts for the workers in their struggles with the employers.
And at the present time all these local trades unions find a rallying point
in the National Association of United Trades, the central committee of
which is in London, and which already numbers 80,000 members. The organization of these strikes, combinations, and trades unions went on simultaneously with the political
struggles of the workers, who now constitute a large political party, under
the name of Chartists.

The first attempt of workers to associate among themselves always
takes place in the form of combinations.

Large-scale industry concentrates in one place a crowd of people
unknown to one another. Competition divides their interests. But the maintenance
of wages, this common interest which they have against their boss, unites
them in a common thought of resistance – combination. Thus combination
always has a double aim, that of stopping competition among the workers,
so that they can carry on general competition with the capitalist. If the
first aim of resistance was merely the maintenance of wages, combinations,
at first isolated, constitute themselves into groups as the capitalists
in their turn unite for the purpose of repression, and in the face of always
united capital, the maintenance of the association becomes more necessary
to them than that of wages. This is so true that English economists are
amazed to see the workers sacrifice a good part of their wages in favor
of associations, which, in the eyes of these economists, are established
solely in favor of wages. In this struggle – a veritable civil war –
all the elements necessary for a coming battle unite and develop. Once
it has reached this point, association takes on a political character.

Economic conditions had first transformed the mass of the people
of the country into workers. The combination of capital has created for
this mass a common situation, common interests. This mass is thus already
a class as against capital, but not yet for itself. In the struggle, of
which we have noted only a few phases, this mass becomes united, and constitutes
itself as a class for itself. The interests it defends become class interests.
But the struggle of class against class is a political struggle.

In the bourgeoisie we have two phases to distinguish: that in
which it constituted itself as a class under the regime of feudalism and
absolute monarchy, and that in which, already constituted as a class, it
overthrew feudalism and monarchy to make society into a bourgeois society.
The first of these phases was the longer and necessitated the greater efforts.
This too began by partial combinations against the feudal lords.

Much research has been carried out to trace the different historical
phases that the bourgeoisie has passed through, from the commune up to
its constitution as a class.

But when it is a question of making a precise study of strikes,
combinations and other forms in which the proletarians carry out before
our eyes their organization as a class, some are seized with real fear
and others display a transcendental disdain.

An oppressed class is the vital condition for every society founded
on the antagonism of classes. The emancipation of the oppressed class thus
implies necessarily the creation of a new society. For the oppressed class
to be able to emancipate itself, it is necessary that the productive powers
already acquired and the existing social relations should no longer be
capable of existing side by side. Of all the instruments of production,
the greatest productive power is the revolutionary class itself. The organization
of revolutionary elements as a class supposes the existence of all the
productive forces which could be engendered in the bosom of the old society.

Does this mean that after the fall of the old society there will
be a new class domination culminating in a new political power? No.

The condition for the emancipation of the working class is the
abolition of every class, just as the condition for the liberation of the
third estate, of the bourgeois order, was the abolition of all estates
and all orders. [*2]

The working class, in the course of its development, will substitute
for the old civil society an association which will exclude classes and
their antagonism, and there will be no more political power properly so-called,
since political power is precisely the official expression of antagonism
in civil society.

Meanwhile the antagonism between the proletariat and the bourgeoisie
is a struggle of class against class, a struggle which carried to its highest
expression is a total revolution. Indeed, is it at all surprising that
a society founded on the opposition of classes should culminate in brutal
contradiction, the shock of body against body, as its final denouement?

Do not say that social movement excludes political movement. There
is never a political movement which is not at the same time social.

It is only in an order of things in which there are no more classes
and class antagonisms that social evolutions will cease to be political
revolutions. Till then, on the eve of every general reshuffling of
society, the last word of social science will always be:

“Le combat ou la mort; la lutte sanguinaire ou le neant. C’est ainsi
que la quéstion est invinciblement posée.”

[From the novel Jean Siska by George Sand:

“Combat or Death: bloody struggle or extinction. It is thus that the question is inexorably put.”]

Footnotes

The laws in operation at that time
in France – the so-called Le Chapelier law adopted in 1791 during the
revolution by the Constituent Assembly and the criminal code
elaborated under the Napoleonic Empire – forbade the workers to form labour
unions or to go on strike. The prohibition of trade unions was abolished in France in 1884.

[*1]
That is, the Socialists of that time: the Fourierists in France, the Owenites in England. F.E. [– Engels note to the German edition, 1885]

[*2]
Estates here in the historical sense of the estates of
feudalism, estates with definite and limited privileges. The revolution
of the bourgeoisie abolished the estates and their privileges. Bourgeois
society knows only classes. It was, therefore, absolutely in contradiction
with history to describe the proletariat as the “fourth estate.” [– Engels,
1885 German edition.]