The Poverty of Philosophy
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 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
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.
Engels' 1892 Introduction
For the second edition I have only to remark that the name wrongly written Hopkins in the French text (on page 45) has been replaced by the correct name Hodgskin and that in the same place the date of the work of William Thompson has been corrected to 1824. It is to be hoped that this will appease the bibiliographical conscience of Professor Anton Menger.
Frederick Engels London, March 29, 1892
The Antithesis of Use Value and Exchange Value
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.