ENGELS TO CONRAD SCHMIDT*”” 
London, 12 March 1895 

41 Regent’s Park Road, N. W. 

Dear Schmidt, 

I have before me your two letters of the 13" of November last and of the 
Ist of this month. Let me begin with the most recent, No. 2. 

So far as Fireman is concerned, you had better leave well alone. ** Lexis 
had simply posed the question **° as you did in Zs/X(c+v). He is the only one 
to have gone a step further along the right road in as much as he classified 
the progression s/(c’+v’) + s”/(c”+v”) + s’"/(c?‘+v’”) ... etc., set out by you 
and divided it, according to the varying composition of capital, into groups of 
the branches of production between which equalisation only comes about as 
a result of competition. The fact that this was the next important step will be 
evident to you from Marx’s own text in which, up to that point, the process is 
exactly the same. Fireman’s mistake was to break off here and rest on his 
laurels, which is why he necessarily remained unnoticed until the book’ itself 
came out.—But there’s no need for you to worry. You have every reason to 
be content. After all, you discovered for yourself why it is that the rate of 
profit tends to fall and how commercial profit is created—and discovered, 
not just two thirds as did Fireman the rate of profit, but the whole bally thing. 

Your letter, I think, sheds some light on why you allowed yourself to be 
side-tracked when it came to the rate of profit. In it I find you lapsing into 
detail in just the same way, and for this I blame the eclectic method of 
philosophising endemic at German universities since 1848, a method which 
loses sight of the whole, and all too often goes astray by indulging in almost 
endless and unprofitable speculation on minutiae. Now it so happens that 
your earlier studies of classical philosophy revolved primarily around Kant, 
and Kant was more or less compelled by the then state of philosophising in 
Germany and by his own antipathy to Wolf’s pedantic Leibnizianism to 
make what appeared to be formal concessions to Wolfian speculation. It is 
thus I explain your tendency, also apparent from your epistolatory digression 
on the law of value, to become engrossed in minutiae; hence your occasional 
failure, or so it seems to me, to see the wood for the trees, which is why you 
reduce the law of value to a fiction, a necessary fiction, in much the same 
way as Kant reduced the existence of God to a postulate of practical reason. 

Your objections to the law of value apply to a// concepts regarded from 
the standpoint of reality. The identity of thinking and being, to use a 
Hegelian expression, corresponds in all respects to your example of the circle 
and the polygon. In other words, the concept of an object and its reality run 
side by side like two asymptotes which, though constantly 

“Vol. IL | of Capital 

converging, will never meet. The difference between the two is the selfsame 
difference which is responsible for the fact that the concept is not 
immediately and ipso facto reality and reality is not immediately its own 
concept. Because a concept is by its nature essentially a concept, hence does 
not ipso facto and prima facie" correspond to the reality from which it has 
had first to be abstracted, that concept is always something more than a 
fiction, unless you declare all reasoned conclusions to be fictive on the 
grounds that they correspond to reality only in a very circuitous way and 
even then only approximately, like converging asymptotes. 

Is it otherwise with the general rate of profit? At no time is it more than an 
approximation. Should it ever prove to be absolutely identical in two 
separate undertakings and should both achieve exactly the same rate of profit 
in a given year, it would be purely fortuitous; in reality rates of profit vary 
from business to business and year to year, according to circumstances, while 
the general rate exists only as the average achieved by a large number of 
businesses over a succession of years. If, however, we were to insist that the 
rate of profit—say, 14.876934... be exactly the same down to the last decimal 
point in every business every year, on pain of being reduced to a fiction, we 
should be grossly mistaking the nature of the rate of profit and of economic 
laws generally—they none of them have any reality save as an 
approximation, a tendency, an average, but not as immediate reality. This is 
due partly to the fact that their action is frustrated by the simultaneous action 
of other laws, but also to some extent by their nature as concepts. 

Or take the law of wages, the realisation of the value of the power of 
labour, a value which is only, and even then not always, realised as an av- 
erage and varies from locality to locality, indeed from branch to branch, 
according to the standard of living customary in each. Or ground rent, which 
represents the surplus profit, in excess of the general rate, arising from a 
monopolisation of a natural force. Here, too, real surplus profit and real rent 
do not by any means automatically correspond, but do so only approximately 
and on an average. 

Exactly the same thing applies to the law of value and the distribution of 
surplus value through the rate of profit. 

1. Both come closest to full realisation only in as much as capitalist 
production has everywhere been fully implemented, i.e. society has been 

* self-evidently 

reduced to modern classes of landowners, capitalists (industrialists and 
traders) and workers, all intermediate stages having been eliminated. That 
has not yet happened even in England nor will it ever happen—we shouldn’t 
let things get to that pitch. 

2. Profit, including rent, has a number of constituents: 

a) profit from sharp practice which you discount in your algebraic sum; 

b) profit from an increase in value of stocks (e.g. what is left of the 
previous harvest when the next one fails). In theory this ought also to 
equalise out, so long as it has not already been discounted by a fall in the 
value of other commodities, for either the capitalist buyer’s contribution 
must be equal to the seller’s gain, or else, where means of subsistence for 
workers are concerned, wages must eventually rise. The most significant of 
these rises in value are, however, not /asting ones, hence equalisation takes 
place only over an average of years and in very incomplete form and, as is 
well known, at the expense of the workers; they produce more surplus value 
because their labour power is not paid for in full; 

c) the total amount of surplus value from which, however, we must again 
deduct that portion that is presented to the buyer, especially at times of crisis 
when overproduction is reduced to its true content of socially necessary 
labour. 

From this it necessarily follows that the total profit and the total surplus 
value can correspond only approximately. If, however, you also consider that 
neither the total surplus value nor the total capital are constant quantities but 
variables which change from day to day, then any correspondence between 
the rate of profit and Xs/X(c+v), other than an approximate progression, and 
any coincidence of the total price and total value other than one which 
constantly tends towards, and yet as constantly tends away from, unity, will 
be seen to be a sheer impossibility. In other words, the unity of concept and 
phenomenon turns out to be an essentially endless process, and so indeed it 
is, in this case as in every other. 

Has feudalism, then, ever corresponded to its concept? Having begun in 
the Kingdom of the Western Franks, >’ been further developed in Normandy 
by the Norwegian invaders, and taken a stage further in England and the 
south of Italy by the Norman French, it came closest to its concept—in the 
ephemeral Kingdom of Jerusalem, a relic of which, the Assises de Jérusalem, >*** 
the most classical expression of the feudal order. Was that order a fiction 
merely because it was in Palestine alone that it achieved a short-lived exis- 

tence in fully classical form—and even then largely on paper? 

Or are the concepts that prevail in the natural sciences fictive because they 
by no means always correspond to reality? From the moment we accept the 
theory of evolution, all our concepts of organic life correspond only 
approximately to reality. Otherwise there would be no change; if the day 
should ever come when concept and reality coincide completely in the 
organic world, evolution will cease. The concept ‘fish’ embraces life under 
water and breathing through gills; how is it possible to evolve from fish to 
amphibian without infringing that concept? And infringed it has been; we 
know of a whole number of fish whose air-bladders have evolved into lungs 
and which are thus able to breathe air. How is it possible to evolve from 
oviparous reptile to viviparous mammal without bringing one or both 
concepts into conflict with reality? And in fact we have, in the monotremata, 
an entire sub-class of oviparous mammals—in Manchester in 1843, I saw the 
eggs of a duck-billed platypus and, in my narrow-minded arrogance, cast 
scorn on the folly of supposing that a mammal could lay eggs, and now it has 
been proven! So do not treat the concept of value in the same manner as has 
obliged me to proffer my belated apologies to the duck-billed platypus! 

In Sombart’s otherwise excellent article on Volume II P I have also found 
a similar tendency to emasculate the theory of value; evidently he, too, had 
hoped to find a rather different solution. '° 

Your article in the Centralblatt, however, is first-rate,” and your dem- 
onstration—by quantitative determination—of the specific differences 
between Marx’s theory of the rate of profit and that of the earliest political 
economists, is very well done. In his wisdom, the illustrious Loria sees 
Volume II I as nothing less than an abandonment of the theory of value,“ and 
thus your article is a cut-and-dried reply. There are now two more interested 
parties, Labriola in Rome, and Lafargue, the latter having joined battle with 
Loria in the Critica Sociale. **’ If, therefore, you could send a copy to Prof. 
Antonio Labriola, Corso Vittorio Emmanuele 251, Rome, he would do his 
best to get an Italian translation of it published; and a second copy to Paul 
Lafargue, Le Perreux, Seine, France, would give the 

“ W. Sombart, ‘Zur Kritik der 6konomischen Systems von Karl Marx’. In: Archiv für soziale 
Gesetzgebung und Statistik, Bd. 7, H. 4. -? See this volume, p. 461 -° C. Schmidt, ‘Der dritte 
Band des Kapital’. In: Sozialpolitisches Centralblatt, 25. Februar 1895 - “ A. Loria, ‘L’opera 
postuma di Carlo Marx.’ In: Nuova Antologia, Anno XXX, fascicolo II I, 1 febbraio 1895 

latter the support he needs; he would also mention your name. I have written 
to both of them about this, “° saying that your article supplies a ready-made 
answer on the main issue. Please let me know if you are unable to supply the 
copies. 

With this, however, I must close, for otherwise I shall never be done. 
Kindest regards, 

Yours, 
F. Engels 
Sozialistische Monatshefte, 
No. 24, 1920 Published in English in full 
for the first time 
213