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 inaccesible in the forties as it may be now. If, all the same, it always
remained unknown to Rodbertus, that is to be ascribed solely to his Prussian
local bigotry. He is the actual founder of specifically Prussian socialism
and is now at last recognised as such.

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

“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