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\title{The Poverty of Philosophy}
\date{1847}
\author{Karl Marx}
\subtitle{Answer to \emph{The Philosophy of Poverty} by M. Proudhon}






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\section{Introduction to this Version}


This 1847 book was published in Paris and Brussels, where Marx was living as an exile from 1843 until 1849. It was originally written in French as an answer to the economic and philosophical arguments of French anarchist Pierre-Joseph Proudhon (1809-1865) set forth in his 1846 book \emph{\href{http://usa.anarchistlibraries.net/library/pierre-joseph-proudhon-system-of-economical-contradictions-or-the-philosophy-of-poverty}{The System of Economic Contradictions, or The Philosophy of Poverty}}. Proudhon was a theoretician that wrote extensively on the relationship between the individual and the state. He believed in an orderly society, but argued that the state represented an illegitimate concentration of official violence that effectively undercut any effort to build a just society. Rejecting all political action as a form of class collaboration, Proudhon argued instead that the working class could achieve its salvation through economic action alone; abstention from politics was advocated with a view to the ultimate eradication of the existing state and its political apparatus.


Marx had left Germany following the repression of the newspaper he edited, the \emph{Rheinische Zeitung}, by the government of Prussia early in 1843. He went to Paris, where he lived from October 1843 until December 1845. It was there that he first met Proudhon, who was already a well known radical writer. Despite an appeal being made as a prospective French collaborator, Proudhon declined to participate in the ill-fated Deutsch-französische Jahrbücher project with which Marx was closely associated. Although contact between the two was limited, Marx read Proudhon’s writings at this time, discussions of which may be found in his work of the period, including the book written against Bruno Bauer, \emph{The Holy Family} (1845), in which Marx lent critical support to some of the ideas of Proudhon against competing ideas of Bauer.


Marx was particularly attracted to the comprehensive nature of Proudhon’s writings up until 1845 and the latter’s willingness to make larger connections from smaller observations. Marx’s praise of Proudhon was not limitless, however, as he felt Proudhon did not fully grasp the way in which wages and money, for example, were themselves forms of private property. He read Proudhon’s book late in 1846 and responded strongly and negatively, authoring a lengthy letter to his Russian correspondent P.V. Annenkov on December 28, 1846 with a detailed exposition of his views that became the core of his 1847 book. He began working on a book-length formal reply the following January, completing the work in the spring and going to press in April 1847. \emph{The Poverty of Philosophy} was regarded by the political circle around Marx, organised as the Communist League, as a key part of their contemporary program, delineating the views of the League from those espoused by Proudhon and his followers.


Marx started work on this book in January 1847, as can be judged from Engel’s letter to Marx on January 15, 1847. By the begining of April 1847, Marx’s work was completed in the main and had gone to the press. On June 15, 1847 he wrote a short foreward.


Published in Paris and Brussels in 1847, the book was not republished in full during Marx’s lifetime. Excerpts from section five of Chapter Two appeared in different years, mostly between 1872 — 1875 in papers such as \emph{La Emancipacion}, \emph{Der Volksstaat}, \emph{Soical-Demokrat}, and others. In 1880 Marx attempted to publish the \emph{Poverty of Philosophy} in the French socialist newspaper \emph{L’Égalité}, the organ of the French Workers’ Party, but only the foreword and section one of Chapter One were published.


This translation is from the original 1847 French edition. It has been updated to also include the changes\Slash{}corrections Marx made in the copy of the book he presented to N. Utina in 1876, as well as the corrections made by Frederick Engels in the second French edition and the German editions of 1885 and 1892. The first English edition of this work was published in 1900 by Twentieth Century Press.


Note: italics in quotations are as a rule Marx’s. Also, references added in brackets correspond to the same edition Marx used.

\section{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.


\emph{Karl Marx}
\forcelinebreak \emph{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 \emph{super-socialism}. (See Proudhon, \emph{Philosophy of Poverty}, Prologue, p.III, line 20.)

\section{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 \emph{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 \emph{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.\footnote{Marx wrote the statement about the break with \emph{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 \emph{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 \emph{Barmer Zeitung} and \emph{Elberfelder Zeitung} on February 26. Schweitzer was forced to publish this statement in \emph{Der Social Demokrat}, No. 29, March 3, 1865.}


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.\footnote{The reference is to Engels’ Preface to the first German edition of Vol. II of Marx’s \emph{Capital}, which Engels completed on May 5, 1885.} Suffice it to note here that when Rodbertus accuses Marx of having “plundered” him and of having “freely used in his \emph{Capital} without quoting him” his work \emph{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 \emph{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” \emph{before} Proudhon; but here again it is true he erroneously flatters himself with being the \emph{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: \emph{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 \emph{Principles},



\begin{quote}


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)



\end{quote}


These two propositions had ever since 1821 been utilised in England for socialist conclusions\footnote{See the anonymous pamphlet: \emph{The Source and Remedy of the National Difficulties, deduced from principles of political economy, in a letter to Lord John Russell}, London, 1821. \protect\endgraf \protect\endgraf For more details about the pamphlet see Engels’ Preface to Vol. II of Marx’s \emph{Capital}.}, 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 \emph{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.



\begin{quote}


“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 \emph{equalitarian} (i.e. socialist) application of Ricardian theory. We could quote for M. Proudhon: Hodgskin, \emph{Political Economy}, 1827; William Thompson, \emph{An Inquiry into the Principles of the Distribution of Wealth Most Conducive to Human Happiness}, 1824; T. R. Edmonds, \emph{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 \dots{} in his remarkable work, \emph{Labour’s Wrongs and Labour’s Remedy}, Leeds, 1839.”



\end{quote}


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 \emph{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):



\begin{quote}


“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.”



\end{quote}


On this there was the following note:



\begin{quote}


“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.”



\end{quote}


In the same note there was a reference to Marx’s \emph{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 \emph{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 \emph{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\footnote{Engels is referring to the second edition of Ricardo’s book \emph{On the Principles of Political Economy, and Taxation}, London, 1819, pp. 32–46, where the author divided the text into sections.}) 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.\footnote{The reference is to the people who took part in publishing the literary legacy of Rodbertus-Jagetzow, in particular his work \emph{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.}


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



\begin{quote}


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



\end{quote}


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,\footnote{Engels is referring to the preface to K. Rodbertus-Jagetzow’s work, \emph{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.”} 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 \emph{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:



\begin{quote}


“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 \emph{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 \emph{the sum total of available value} must \emph{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 \emph{necessarily coincide with the available value, all claims will be satisfied and the liquidation correctly brought about”}


(pp. 166–67).



\end{quote}


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 \emph{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.\footnoteB{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.} 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., \emph{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.\footnote{§ 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.} 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’ \emph{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 \emph{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.



\bigskip


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.\footnote{The second French edition of \emph{The Poverty of Philosophy}, which was being prepared by Marx’s daughter Laura Lafargue, appeared in Paris only after Engels’ death, in 1896.}


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


Also added as a supplement to this edition are:



\begin{quote}


1) a passage from Marx’s work \emph{A Contribution to the Critique of Political Economy}, Berlin, 1859, dealing with the \emph{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 \emph{Misère.}



\end{quote}


\emph{London, October 23, 1884}
\forcelinebreak \emph{Frederick Engels}

\section{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
\forcelinebreak London, March 29, 1892

\chapter{Chapter One: A Scientific Discovery}

\section{1. The Antithesis of Use Value and Exchange Value}



\begin{quote}


“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\dots{} How does use value become exchange value?\dots{} 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)



\end{quote}


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 “\emph{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 \emph{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 “\emph{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 “\emph{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:



\begin{quote}


“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\dots{}


“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\dots{}


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



\end{quote}


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



\begin{quote}


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.



\end{quote}


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.



\begin{quote}


SISMONDI:


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


(\emph{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.”


(\emph{Recherches sur la nature et l’origine}
\forcelinebreak \emph{de la richesse publique}; translated by
\forcelinebreak Langentie de Lavaisse, Paris 1808 [p.33])



\end{quote}


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.



\begin{quote}


“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, \emph{Principles de l’économie politique}
\forcelinebreak translated by Constancio, annotations by J. B. Say.
\forcelinebreak Paris 1835; Volume II, chapter \emph{Sur la valeur et les richesses})



\end{quote}


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.



\begin{quote}


“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)



\end{quote}


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, \emph{History of Commerce}.) [A. Anderson, \emph{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 \emph{supply} and exchange value with \emph{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 \emph{utility} (use value, supply), on the other side, \emph{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?



\begin{quote}


“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.”



\end{quote}


M. Proudhon goes on to develop this antithesis.



\begin{quote}


“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)



\end{quote}


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



\begin{quote}


“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)



\end{quote}


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 (\emph{Cours d’economie politique}, Paris 1823, pp.48 and 49).


According to him, \emph{needs} are the things for which we feel the need; \emph{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:



\begin{quote}


“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]



\end{quote}


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.



\begin{quote}


“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)



\end{quote}


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, \emph{one} producer and \emph{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.

\section{2. Constituted Value or Synthetic Value}


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


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


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


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



\begin{quote}


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


[I 66]



\end{quote}


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



\begin{quote}


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


(Vol.I, p.68)



\end{quote}


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



\begin{quote}


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


(Vol.I, p.3, \emph{Principles de l’economie}
\forcelinebreak \emph{politique, etc.}, translated from the
\forcelinebreak English by F.S. Constancio, Paris 1835)



\end{quote}



\begin{quote}


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


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



\end{quote}



\begin{quote}


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


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



\end{quote}



\begin{quote}


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


(Vol.I, pp.5)



\end{quote}


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



\begin{quote}


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


(Vol.I, p.8)



\end{quote}



\begin{quote}


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


(Vol.I, p.8)



\end{quote}


Ricardo goes on to reproach Smith:



\begin{quote}


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


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



\end{quote}


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



\begin{quote}


“Economy in the use of labor never fails to reduce the relative value\footnoteB{Ricardo, as is well known, determines the value of a commodity by the quantity of labor necessary for its production. Owing, however, to the prevailing form of exchange in every mode of production based on production of commodities, including therefore the capitalist mode of production, this value is not expressed directly in quantities of labor but in quantities of some other commodity. The value of a commodity expressed in a quantity of some other commodity (whether money or not) is termed by Ricardo its relative value. [Note by Engels to 1885 German edition]} of a commodity, whether the saving be in the labor necessary to the manufacture of the commodity itself, or in that necessary to the formation of the capital, by the aid of which it is produced.”


(Vol.I, p.28)



\end{quote}



\begin{quote}


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


(Vol.I, p.28)



\end{quote}



\begin{quote}


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


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



\end{quote}



\begin{quote}


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


(Vol.II, p.253)



\end{quote}


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



\begin{quote}


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


(Vol.II, p.259)



\end{quote}


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


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


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



\begin{quote}


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


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



\end{quote}


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


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



\begin{quote}


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


(Ricardo, Vol.II, p.253)



\end{quote}


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


To sum up: Labor, being itself a commodity, is measured as such by the labor time needed to produce the labor-commodity. And what is needed to produce this labor-commodity? Just enough labor time to produce the objects indispensable to the constant maintenance of labor, that is, to keep the worker alive and in a condition to propagate his race. The natural price of labor is no other than the wage minimum.\footnoteB{The thesis that the “natural,” i.e., normal, price of labor power coincides with the wage minimum, i.e., with the equivalent in value of the means of subsistence absolutely indispensable for the life and procreation of the worker, was first put forward by me in \emph{\href{https://www.marxists.org/archive/marx/works/1844/df-jahrbucher/outlines.htm}{Sketches for a Critique of Political Economy}} (\href{https://www.marxists.org/archive/marx/works/1844/df-jahrbucher/index.htm}{Deutsch-Franzosische Jahrbucher}, Paris 1844) and in \emph{\href{https://www.marxists.org/archive/marx/works/1845/condition-working-class/index.htm}{The Condition of the Working Class in England in 1844}}. As seen here, Marx at that time accepted the thesis. Lassalle took it over from both of us. Although, however, in reality wages have a constant tendency to approach the minimum, the above thesis is nevertheless incorrect. The fact that labor is regularly and on the average paid below its value cannot alter its value. In \emph{Capital}, Marx has put the above thesis right (Section on \href{https://www.marxists.org/archive/marx/works/1867-c1/ch06.htm}{Buying and Selling of Labor Power}) and also (Chapter 25: \href{https://www.marxists.org/archive/marx/works/1867-c1/ch25.htm}{The General Law of Capitalist Accumulation}) analyzed the circumstances which permit capitalist production to depress the price of labor power more and more below its value. [Note by Engels to 1885 German edition]} If the current rate of wages rises above this natural price, it is precisely because the law of value put as a principle by M. Proudhon happens to be counterbalanced by the consequences of the varying relations of supply and demand. But the minimum wage is nonetheless the centre towards which the current rates of wages gravitate.


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


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


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


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


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


Let us go further.


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


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


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


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


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


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


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


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


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



\begin{quote}


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



\end{quote}


Let us go still further.



\begin{quote}


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



\end{quote}


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


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



\begin{quote}


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


“By a sort of ellipsis one speaks of the value of labor\dots{}


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


[I 61]



\end{quote}



\begin{quote}


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


(Proudhon, I, 188)



\end{quote}


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


Labor\footnote{In the copy Marx presented to N. Utina in 1876 after this word “labor” Marx adds “labor power”; this addition is found in the 1896 French edition.}, inasmuch as it is bought and sold, is a commodity like any other commodity, and has, in consequence, an exchange value. But the value of labor, or labor as a commodity, produces as little as the value of wheat, or wheat as a commodity, serves as food.


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


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


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


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


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


Et propter vitam vivendi perdere causas!


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



\begin{quote}


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



\end{quote}


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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



\begin{quote}


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


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


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



\end{quote}


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


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


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



\begin{quote}


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


(Vol.II, p.59)



\end{quote}


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



\begin{quote}


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


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


(\emph{Etudes, etc.}, Vol.II, p.267)



\end{quote}


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


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


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


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


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


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


Let us hear what old Boisguillebert says:



\begin{quote}


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


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


(\emph{Dissertation sur la nature des richesses},
\forcelinebreak Daire’s ed. [pp.405 and 408])


[Boisguillebert’s work is quoted from the symposium
\forcelinebreak \emph{Economistes-financiers du XVIII siecle}. Prefaced
\forcelinebreak by a historical sketch on each author and accompanied
\forcelinebreak by commentaries and explanatory notes by Eugene Daire;
\forcelinebreak Paris 1843.]



\end{quote}


Let us listen also to a modern economist:



\begin{quote}


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


“The equivalent must be guaranteed\dots{}


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


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


(W. Atkinson, \emph{Principles of Political Economy},
\forcelinebreak London 1840, pp.170–95)



\end{quote}


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


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


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


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


Thus, one or the other:



\begin{quote}


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



\end{quote}


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


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


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


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


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



\begin{quote}


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


(Bray, pp.17 and 41)



\end{quote}



\begin{quote}


“It is labor alone which bestows value\dots{}


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


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


(Bray, pp.33, 36 and 37)



\end{quote}



\begin{quote}


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


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


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


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


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


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



\end{quote}



\begin{quote}


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


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


(Bray, pp.51 and 52)



\end{quote}



\begin{quote}


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


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


(Bray, pp.53–55)



\end{quote}



\begin{quote}


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


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


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


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


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


(Bray, pp.67, 88, 89, 94, 109–10)



\end{quote}


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



\begin{quote}


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


(Bray, p.134)



\end{quote}



\begin{quote}


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


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


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


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


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


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


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



\end{quote}


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


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


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


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


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


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


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


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


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


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


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


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


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


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


Mr. Bray does not see that this equalitarian relation, this corrective ideal that he would like to apply to the world, is itself nothing but the reflection of the actual world; and that therefore it is totally impossible to reconstitute society on the basis of what is merely an embellished shadow of it. In proportion as this shadow takes on substance again, we perceive that this substance, far from being the transfiguration dreamt of, is the actual body of existing society.\footnoteB{Mr. Bray’s theory, like all theories, has found supporters who have allowed themselves to be deluded by appearances. Equitable labor-exchange bazaars have been set up in London, Sheffield, Leeds and many other towns in England. These bazaars have all ended in scandalous failures after having absorbed considerable capital. The taste for them has gone for ever. You are warned, M. Proudhon! [Note by Marx] \protect\endgraf \protect\endgraf It is known that Proudhon did not take this warning to heart. In 1849 he himself made an attempt with a new Exchange Bank in Paris. The bank, however, failed before it had got going properly: a court case against Proudhon had to serve to cover its collapse. [Note by Engels, 1885 German Edition]}

\section{3. Application of the Law of the Proportionality of Value}

\subsection{A) Money}



\begin{quote}


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


[Vol, I p. 80]



\end{quote}


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


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


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


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



\begin{quote}


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


[Vol. I, pp. 68–69]



\end{quote}


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


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


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



\begin{quote}


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


[Vol. I, p. 69]



\end{quote}


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



\begin{quote}


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


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



\end{quote}


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


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


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


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


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


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



\begin{quote}


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


[Vol. I, p. 69]



\end{quote}


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


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


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


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



\begin{quote}


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


(Voltaire, \emph{Systeme de Law})


[Marx quotes a chapter from Voltaire’s \emph{Historie de}
\forcelinebreak \emph{parlement}. It is entitled “France in the Period of the
\forcelinebreak Regency and Law’s System.”]



\end{quote}


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



\begin{quote}


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


[Vol. I, pp. 70–71]



\end{quote}


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


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


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


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


M. Proudhon continues:



\begin{quote}


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


[Vol. I, p. 71]



\end{quote}


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


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


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



\begin{quote}


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



\end{quote}


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



\begin{quote}


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


(Ricardo, loc. cit. [pp.206–07])



\end{quote}


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



\begin{quote}


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


[The reference is to Say’s note on the French edition
\forcelinebreak of Ricardo’s book, Vol.II, pp.206–07]



\end{quote}


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


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



\begin{quote}


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


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


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


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



\end{quote}


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



\begin{quote}


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


(Economistes financiers du dix-huitieme
\forcelinebreak siecle, Daire edition, p.422)



\end{quote}


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

\subsection{B) Surplus labour}



\begin{quote}


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


(Proudhon, Vol.I, p.81)



\end{quote}


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


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



\begin{quote}


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


(\emph{Encyclopedia Metropolitana or Universal Dictionary of}
\forcelinebreak \emph{Knowledge}, Vol.IV, Article “Political Economy”, by [N. W.]
\forcelinebreak Senior, London, 1836. Regarding the phrase under discussion,
\forcelinebreak see also J. St. Mill: \emph{Essays on Some Unsettled Questions}
\forcelinebreak \emph{of Political Economy}, London 1844, and Tooke: \emph{A History of}
\forcelinebreak \emph{Prices, etc.}, London 1838.) [Full reference is Th. Tooke,
\forcelinebreak \emph{A History of Prices, and of the State of the Circulation,}
\forcelinebreak \emph{from 1793 to 1837}, Vols.I-II, London, 1838]



\end{quote}


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



\begin{quote}


“An axiom generally admitted by economists is that all labour must leave a surplus. In my opinion this proposition is universally and absolutely true: it is the corollary of the law of proportion, which may be regarded as the summary of the whole of economic science. But, if the economists will permit me to say so, the principle that all labour must leave a surplus is meaningless according to their theory, and is not susceptible of any demonstration.”


(Proudhon [3Vol. I, p. 73])



\end{quote}


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



\begin{quote}


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


(Th. Cooper, \emph{Lectures on the Elements of}
\forcelinebreak \emph{Political Economy}, Columbia, 1826)


[The first edition of the book was published
\forcelinebreak in Colombia in 1826. A second, enlarged
\forcelinebreak edition appeared in London in 1831.]



\end{quote}



\begin{quote}


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


[Vol. I, p. 75]



\end{quote}


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



\begin{quote}


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


(T.Sadler, \emph{The Law of Population}, London 1830)
\forcelinebreak [Vol. I, pp. 83 and 84]



\end{quote}


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



\begin{quote}


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


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



\end{quote}


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


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



\begin{quote}


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



\end{quote}


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



\begin{quote}


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



\end{quote}


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



\begin{quote}


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



\end{quote}


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


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



\begin{quote}


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



\end{quote}


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



\begin{quote}


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


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



\end{quote}


Lauderdale, in his turn, says:



\begin{quote}


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


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


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


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



\end{quote}


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


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



\begin{quote}


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


[Vol. I, p. 77]



\end{quote}


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



\begin{quote}


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


[Vol. I, pp. 77–78]



\end{quote}


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



\begin{quote}


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



\end{quote}


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



\begin{quote}


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


[Vol. I, pp. 79–80]



\end{quote}


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


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


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


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


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


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



\begin{quote}


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


[Vol. I, p. 80]



\end{quote}


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


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


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



\begin{quote}


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


[Vol. I, p. 80]



\end{quote}

\chapter{Chapter Two: The Metaphysics of Political Economy}

\section{1. The Method}


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


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


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


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


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

\subsection{First Observation}



\begin{quote}


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


(Proudhon, Vol. I, p. 146)



\end{quote}


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


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


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


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


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


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


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


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



\begin{quote}


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


(\emph{Logic}, Vol. III [p. 29])



\end{quote}


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


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


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


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


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


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


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

\subsection{Second Observation}


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


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


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


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


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


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

\subsection{Third Observation}


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


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


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


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

\subsection{Fourth Observation}


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


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


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


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


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


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


Without slavery North America, the most progressive of countries, would be transformed into a patriarchal country. Wipe North America off the map of the world, and you will have anarchy – the complete decay of modern commerce and civilization. Cause slavery to disappear and you will have wiped America off the map of nations.\footnoteB{This was perfectly correct for the year 1847. At that time the world trade of the United States was limited mainly to import of immigrants and industrial products, and export of cotton and tobacco, i.e., of the products of southern slave labour. The Northern States produced mainly corn and meat for the slave states. It was only when the North produced corn and meat for export and also became an industrial country, and when the American cotton monopoly had to face powerful competition, in India, Egypt, Brazil, etc., that the abolition of slavery became possible. And even then this led to the ruin of the South, which did not succeed in replacing the open Negro slavery by the disguised slavery of Indian and Chinese coolies, F.E. \protect\endgraf [Note by Frederick Engels, to the 1885 German Edition. For more information, see Marx and Engels on the \href{https://www.marxists.org/archive/marx/works/1861/us-civil-war/index.htm}{American Civil War}]}


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


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


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


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


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


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


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


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

\subsection{Fifth Observation}



\begin{quote}


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


(Proudhon, Vol. II, p. 97)



\end{quote}


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


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


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


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


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


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


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

\subsection{Sixth Observation}


Let us take the crossroad with M. Proudhon.


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



\begin{quote}


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


(Vol. II, p. 102)



\end{quote}


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


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


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


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


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



\begin{quote}


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


(Vol. I p. 133)



\end{quote}


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


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


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


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


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


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


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


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

\subsection{Seventh and Last Observation}


Economists have a singular method of procedure. There are only two kinds of institutions for them, artificial and natural. The institutions of feudalism are artificial institutions, those of the bourgeoisie are natural institutions. In this, they resemble the theologians, who likewise establish two kinds of religion. Every religion which is not theirs is an invention of men, while their own is an emanation from God. When the economists say that present-day relations – the relations of bourgeois production – are natural, they imply that these are the relations in which wealth is created and productive forces developed in conformity with the laws of nature. These relations therefore are themselves natural laws independent of the influence of time. They are eternal laws which must always govern society. Thus, there has been history, but there is no longer any. There has been history, since there were the institutions of feudalism, and in these institutions of feudalism we find quite different relations of production from those of bourgeois society, which the economists try to pass off as natural and as such, eternal.


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


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


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


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


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


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


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


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


The \emph{philanthropic} school is the humanitarian school carried to perfection. It denies the necessity of antagonism; it wants to turn all men into bourgeois; it wants to realize theory in so far as it is distinguished from practice and contains no antagonism. It goes without saying that, in theory, it is easy to make an abstraction of the contradictions that are met with at every moment in actual reality. This theory would therefore become idealized reality. The philanthropists, then, want to retain the categories which express bourgeois relations, without the antagonism which constitutes them and is inseparable from them. They think they are seriously fighting bourgeois practice, and they are more bourgeois than the others. \href{\%20}{\texttt{ }}


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


Let us return to M. Proudhon.


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


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


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

\section{2. Division of labour and Machinery}


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

\bigskip
\noindent
 \begin{minipage}[t]{\textwidth}
\begin{tabularx}{\textwidth}{|X|X|}
\hline
\relax  \emph{Good side of the division of labour}  &  “Considered in its essence, the division of labour is the manner in which \emph{equality} of conditions and intelligence is realized.”  \\
\hline
\end{tabularx}
\end{minipage}
\bigskip


\noindent (Tome I, p. 93.) \textbar{}

\bigskip
\noindent
 \begin{minipage}[t]{\textwidth}
\begin{tabularx}{\textwidth}{|X|X|}
\hline
\relax   &    \\
\relax  \emph{Bad side of the division of labour}  &  “The division of labour has become for us an instrument of poverty.”\forcelinebreak (Tome I, p. 94.)\forcelinebreak \forcelinebreak “labour, by \emph{dividing itself according to the law} which is peculiar to it, and which is the primary condition of its fruitfulness, ends in the negation of its aims and destroys itself.”\forcelinebreak (Tome I, p. 94.)   \\
\relax   &    \\
\relax  \emph{Problem to be solved}  &  To find the “recomposition which wipes out the drawbacks of the division, while retaining its useful effects.”\forcelinebreak (Tome I, p. 97.)   \\
\hline
\end{tabularx}
\end{minipage}
\bigskip


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


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



\begin{quote}


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


[Vol. I, pp. 95–96]



\end{quote}


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



\begin{quote}


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


[Vol. I, p. 20]



\end{quote}


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


But let us listen to Lemontey; \emph{Suum cuique}.



\begin{quote}


“M. J. B. Say has done me the honour of adopting in his excellent treatise on political economy the principle that I brought to light in this fragment on the moral influence of the division of labour. The somewhat frivolous title of my book\footnote{Lemonley alludes to his book: \emph{Raison, folie, chacun son mot; petit cours de morale mis à la portée des vieux enfants (Reason, Folly, to Each His Own Word; a Short Course in Morality Within the Mental Reach of Old Children),} Paris, 1801.} doubtless prevented him from citing me. It is only to this motive that I can attribute the silence of a writer too rich in his own stock to disavow so modest a load.”


(Lemontey, \emph{Oeuvres completes},
\forcelinebreak Vol. I, p. 245, Paris 1840)



\end{quote}


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



\begin{quote}


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


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


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


(A. Ferguson, \emph{An Essay on the History of Civil}
\forcelinebreak \emph{Society , Edinburgh 1783 [Vol. II, pp. 108, 109, 110])}



\end{quote}


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


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


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



\begin{quote}


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


(Proudhon, Vol.I, p.94)



\end{quote}


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


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



\begin{quote}


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


[Vol. I, pp. 97–98]



\end{quote}


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


This is the substance of it:


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


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


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


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


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


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



\begin{quote}


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


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



\end{quote}


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


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



\begin{quote}


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


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


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


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


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



\end{quote}


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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



\begin{quote}


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


“The main difficulty did not, to my apprehension, lie so much in the invention of a proper self-acting mechanism\dots{} as in training human beings to renounce their desultory habits of work, and to identify themselves with the unvarying regularity of the complex automaton. But to devise and administer a successful code of factory discipline, suited to the necessities of factory diligence, was the Herculean enterprise, the noble achievement of Awkright.”


[Vol. I, pp. 21–22, 23]



\end{quote}


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


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



\begin{quote}


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


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


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


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


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


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


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


(Andre Ure, \emph{Philosophie des manufactures ou economie industrielle}, Vol.I, Chap. 1 [pp. 34–35])



\end{quote}


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



\begin{quote}


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



\end{quote}


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


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


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

\section{3. Competition and Monopoly}

\bigskip
\noindent
 \begin{minipage}[t]{\textwidth}
\begin{tabularx}{\textwidth}{|X|X|}
\hline
\relax  \emph{Good side of competition}  &  “Competition is as essential to labour as division\dots{} It is necessary \dots{} for the \emph{advent of equality}.” [I 186, 188]   \\
\relax   &    \\
\relax  \emph{Bad side of competition}  &  “The principle is the negation of itself. Its most certain result is to ruin those whom it drags in its train.” [I 185]   \\
\relax   &    \\
\relax  \emph{General reflection}  &  “The \emph{drawbacks} which follow in its wake, just as the good it provides\dots{} both flow logically from the principle.” [I 185–86]   \\
\relax   &    \\
\relax  \emph{Problem to be solved}  &  “To seek the principle of \emph{accommodation}, which must be derived from a law superior to liberty itself.” [I 185]\forcelinebreak \forcelinebreak “There can, therefore, be no question here of destroying competition, a thing as impossible to destroy as liberty; we have only to find its equilibrium, I would be ready to say its \emph{police}.” [I 223]   \\
\hline
\end{tabularx}
\end{minipage}
\bigskip


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



\begin{quote}


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


[I 187]



\end{quote}


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


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


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


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



\begin{quote}


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


[I 189]



\end{quote}


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


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


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


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



\begin{quote}


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


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


[I 191, 192]



\end{quote}


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


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


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


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



\begin{quote}


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


[I 223]



\end{quote}


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


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


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


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


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


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


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


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


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


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



\begin{quote}


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


[I 235]



\end{quote}


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



\begin{quote}


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


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


[I 236, 237]



\end{quote}


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


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


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


\emph{Thesis}: Feudal monopoly, before competition.


\emph{Antithesis}: Competition.


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


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


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


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


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


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



\begin{quote}


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


[I 284, 285]



\end{quote}


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


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


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



\begin{quote}


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


[II 190–91]



\end{quote}


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


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

\section{4. Property or Ground Rent}


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


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


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



\begin{quote}


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


(Vol. II, p. 265)



\end{quote}


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



\begin{quote}


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


(Vol. II, p. 269)



\end{quote}


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



\begin{quote}


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



\end{quote}


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


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



\begin{quote}


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


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


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


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


[Vol. II, pp. 270–272]



\end{quote}


All this tumult of words may be reduced firstly to this: Ricardo says that the excess of the price of agricultural products over their cost of production, including the ordinary profit and interest on the capital, gives the measure of the rent. M. Proudhon does better. He makes the landowner intervene, like a \emph{Deus ex machina}, and snatch from the \emph{colonus} all the surplus of his production over the cost of production. He makes use of the intervention of the landowner to explain property, of the intervention of the rent-receiver to explain rent. He answers the problem by formulating the same problem and adding an extra syllable.\footnote{In the original manuscript, Marx makes a play on words in the French: turning “propriété” (property) into “proprietaire” (landowner) and “rente” (rent) into “rentier” (rent-reciever).}


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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



\begin{quote}


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


[Vol. II, p. 271]



\end{quote}


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


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


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


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


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



\begin{quote}


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


(Vol. II, p. 265)



\end{quote}


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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

\section{5. Strikes and Combinations of Workers}



\begin{quote}


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


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


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



\end{quote}


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


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


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


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


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


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



\begin{quote}


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


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


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



\end{quote}


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


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


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


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



\begin{quote}


“A workers’ strike is illegal, and it is not only the Penal Code that says so, it is the economic system, the necessity of the established order\dots{}


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


(Vol. I, pp. 334 and 335)



\end{quote}


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


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


Thus the article of the Penal Code proves at the most that modern industry and competition were not yet well developed under the Constituent Assembly and under the Empire.\footnote{The laws in operation at that time in France – the so-called Le Chapelier law adopted in 1791 during the revolution by the Constituent Assembly and the criminal code elaborated under the Napoleonic Empire – forbade the workers to form labour unions or to go on strike. The prohibition of trade unions was abolished in France in 1884.}


Economists and socialists\footnoteB{That is, the Socialists of that time: the Fourierists in France, the Owenites in England. \emph{F.E.} [– Engels note to the German edition, 1885]} are in agreement on one point: the condemnation of \emph{combination}. Only they have different motives for their act of condemnation.


The economists say to workers:



\begin{quote}


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



\end{quote}


The socialists say to the workers:



\begin{quote}


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



\end{quote}


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


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


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


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


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


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


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


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


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


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


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


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


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


The condition for the emancipation of the working class is the abolition of every class, just as the condition for the liberation of the third estate, of the bourgeois order, was the abolition of all estates and all orders.\footnoteB{Estates here in the historical sense of the estates of feudalism, estates with definite and limited privileges. The revolution of the bourgeoisie abolished the estates and their privileges. Bourgeois society knows only \emph{classes}. It was, therefore, absolutely in contradiction with history to describe the proletariat as the “fourth estate.” [– Engels, 1885 German edition.]}


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


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


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


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



\begin{quote}


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


[From the novel \emph{Jean Siska} by George Sand:
\forcelinebreak 
“Combat or Death: bloody struggle or extinction. It is thus that the question is inexorably put.”]



\end{quote}

\chapter{Appendix: A Review by Iain McKay}


This year (2017) marks the 170\textsuperscript{th} anniversary of the publication of Karl Marx’s \emph{The Poverty of Philosophy}, written in “reply” to Pierre-Joseph Proudhon’s \emph{System of Economic Contradictions} published the year before. The book’s title is a play on the subtitle of Proudhon’s two volumes (“or, the Philosophy of Poverty”) and for Trotskyist Ernest Mandel “the prototype of that sort of implacable polemical writing which has often inspired the pens of Marx’s followers”. (\emph{The formation of the economic thought of Karl Marx} [London: N.L.B., 1971], 53)


Given its age and stature, some may wonder why bother to review it? There are two reasons why this is no esoteric act.


First, it has played a key role in how the French anarchist is viewed. So, from an anarchist perspective, it is useful to see whether the criticism is valid or not – particularly given that much of the “conventional wisdom” about Proudhon can be traced to it.


Second, it allows radicals today to re-evaluate Proudhon’s ideas and their relevance. As Kropotkin suggested, it is a “work which, of course, lost none of its considerable merit on account of Marx’s malignant pamphlet”. (\emph{Direct Struggle Against Capital} [Edinburgh\Slash{}Oakland\Slash{}Baltimore: AK Press, 2014], 214)

\section{The Method of Marx’s \emph{Poverty}}


This is a work which is very difficult to review. Not only do you need to have also read Proudhon’s work, Marx’s usually fails to reference his quotes which makes comparing what he suggests Proudhon argued to what he wrote difficult. It would take a book in itself to address all of Marx’s claims and so we will concentrate on a few of the most important and indicative ones but before addressing these, a few general points.


First, Marx wilfully ignores Proudhon’s use of irony. For example, he makes much play of Proudhon’s use of the expression “eternal justice.” Yet Proudhon uses it twice in his two volumes and both times in an ironic fashion. Marx uses it four times – once in a quote which he attributes to Proudhon (“cries M. Proudhon”) but which he simply made-up. Interestingly, the editors of the \emph{Marx-Engels Collected Works} removed the quotation marks which existed in the 1847 original. Why? Seeking to make the definitive edition, they sought to reference all Marx’s quotes and as this was an invention on his part they had little option. This illustrates two aspects of Marx’s method – selective quoting and pure invention.


Second, Marx repeatedly invokes authority in lieu of genuine debate. Indeed, he does it so often it seems more about proving how many books he has read rather than contributing to the argument. Often the authors are quoted without indicating whether Marx agreed with them or, indeed, whether their opinions actually matter – quoting someone who is wrong does not do your case any good. Similarly, his book is full of quotes from other authors but whose actual relevance is often null as Proudhon did not argue the point Marx is refuting by them. Still, this does allow Marx to give himself the appearance of a learned critique. For example, after noting how Proudhon “personifies society” he then states that “Proudhon reproaches the economists with not having understood the personality of this collective being” before having the “pleasure in confronting him with [\dots{}] an American economist, who accuses the economists of just the opposite.” Marx does not bother to indicate whether this work of Thomas Cooper (today he is better known, if known at all, as a successionist politician than an economist) is worth accepting or not. Does it rank, for example, with Cooper’s defence of the use of slaves in certain areas of the Americas “which incapacitates a white from labouring” (\emph{Lectures on the Elements of Political Economy} [Columbia: Doyle E. Sweeny, 1826], 95–6)? Whether it is or not is ultimately an irrelevance for Proudhon did not in fact suggest what Marx attributes to him: “To the true economist, society is a living being\dots{}” (\emph{Système des contradictions économiques} [Paris: Guillaumin, 1846] I: 74).


Third, Marx’s reply is often self-contradictory. This is to be expected with Marx’s mud-flinging approach – while some of it will stick, it can hardly be expected to be consistent. The most obvious example is on Proudhon’s position on competition: in the first chapter his attacks on Proudhon’s “Constituted Value” are premised on the (false) assertion that “there is no more competition” while in chapter two he attacks Proudhon for “defending the eternal necessity of competition”.


Fourth, Marx is keen to portray Proudhon as yet another utopian seeking to create a perfect system. Yet the “system” of Proudhon’s title is \emph{capitalism} and Proudhon spends the bulk of the book critiquing it. Discussion of what should replace capitalism is fleeting and based on looking at the tendencies within capitalism which point beyond it. This explains his opposition to the \emph{actual} utopian socialists who simply denounce capitalism while inventing ideal systems to replace it. It “is important, then, that we should resume the study of economic facts and practices, discover their meaning, and formulate their philosophy” for the “error of socialism has consisted hitherto in perpetuating religious reverie by launching forward into a fantastic future instead of seizing the reality which is crushing it.” He rejects “offering \emph{a priori} arguments as solutions of the formidable problems of the organisation of labour and the distribution of wealth” in favour of “interrogat[ing] political economy as the depositary of the secret thoughts of humanity” for “to unfold the system of economical contradictions is to lay the foundations of universal association; to show how the products of collective labour \emph{come out} of society is to explain how it will be possible to make them \emph{return} to it; to exhibit the genesis of the problems of production and distribution is to prepare the way for their solution.” (\emph{Système} I: 89, 92)


Fifth, while for Proudhon civilisation “aims to constitute the value of products and organise labour”, Marx distorts the former and ignores the latter. Thus the reader of his “reply” would be unaware of Proudhon’s discussion of the associations which would replace wage-labour (and so end labour as a commodity). In these members “straightway enjoy the rights and prerogatives of associates and even managers”, “have a deliberative voice in the council” and so are “a solution based upon equality – in other words, the organisation of labour, which involves the negation of political economy and the end of property.” Hence “the socialisation of capital and property” for “it is necessary that [\dots{}] all appropriated wealth again become collective wealth, that the capital taken from society returns to society” for “there is supremacy and dependence” between the worker and the capitalist and “capital introduces into society an inevitable feudalism”. (\emph{Système} II: 204; I: 272–8, 217, 88; II: 168) Unlike the utopian socialists, he rejected the idea of organising labour and instead argued that labour would organise itself


Still, ignoring this allows Marx to suggest in all seriousness that Proudhon “[t]o save his system, he consents to sacrifice its basis” for “he forgets that his whole system rests on labour as a commodity”! Perhaps this lack of discussion of a key aspect of Proudhon’s ideas may be less surprising when we realise that, as one Marxist summarises, “Marx’s picture of life and organisation in the first stage of communism is very incomplete. There is no discussion of such obviously important developments as workers’ control. We can only guess how much power workers enjoy in their enterprises”. (Bertell Ollman, \emph{Social and Sexual Revolution} [Montreal: Black Rose Books, 1978], 65–6) History suggests that we do not have to guess.


More could be written about the overall nature of Marx’s “reply” but it becomes obvious when we address specific subjects. To avoid repeating ourselves, we turn to a few illustrative examples.

\section{Constituted Value}


The “conventional wisdom” is that Proudhon advocated labour-notes, the pricing of commodities by the time (hours and minutes) taken to produce them. This notion has its source in Marx’s “reply” and he spends some time mocking it and showing its flaws. Yet he does not present any evidence that Proudhon advocates such an idea – and ignores much which clearly shows he did not.


Marx states that “[v]alue (marketable value) is the corner-stone of the economic structure. ‘Constituted’ value is the corner-stone of the system of economic contradictions.” Yet the “system of economic contradictions” is capitalism and, for Proudhon, the market (value) is not identical to it. Marx begins with a false dichotomy.


He then describes Proudhon’s “own invention” which he “has discovered in political economy”, namely that the “constituted value of a product is purely and simply the value which is constituted by the labour time incorporated in it.” Marx contrasts Ricardo who “takes his starting point from present-day society to demonstrate to us how it constitutes value” to Proudhon whom, he claims, “takes constituted value as his starting point to construct a new social world with the aid of this value”. The former is “the scientific interpretation of actual economic life” while the latter is “the utopian interpretation of Ricardo’s theory”. It is utopian because Proudhon thinks that “marketable value [should be] determined \emph{a priori} by labour time” resulting in “the sale of a given product at the price of its cost of production”:



\begin{quote}


“Suppose for a moment that there is no more competition and consequently no longer any means to ascertain the minimum of labour necessary for the production of a commodity; what will happen? It will suffice to spend six hours’ work on the production of an object, in order to have the right, according to M. Proudhon, to demand in exchange six times as much as the one who has taken only one hour to produce the same object.”



\end{quote}


Marx then – with copious quotes from Ricardo – shows that the price (market value) must differ from the value (labour-time) in order for a commodity’s supply and demand to finally approximate by means of competition:



\begin{quote}


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



\end{quote}


This applies to labour: “Is your hour’s labour worth mine? That is a question which is decided by competition.” Proudhon, however, “inverts the order of things” and goes from “measuring the relative value of a product by the quantity of labour embodied in it” in order that “supply and demand will infallibly balance one another” and also “takes for granted the equivalence of the working days of different workers” in order to “arrive at equal payment for the workers”.


What is striking about this critique – beyond its admittedly amusing use of withering scorn – is the complete lack of supporting evidence. The reason is simple as Proudhon’s “Constituted Value” is \emph{precisely} the “constituting movement” Marx describes. To show this we need simply do what Marx failed to do – quote Proudhon.


Rather than Ricardo’s “exchange value” being the market value of a good, Proudhon suggests that there are three elements to value – useful value (\emph{valeur utile}), exchangeable value (\emph{valeur échangeable}) and constituted value (\emph{valeur constituée}). The first is what the buyer prices the good (rooted in utility), the second is what the seller prices the good (rooted in costs) and the third is the price agreed between the two. (\emph{Système} I: 48) It is competition which drives the latter towards the labour cost of the commodity:



\begin{quote}


“Competition is necessary to the constitution of value, that is, to the very principle of distribution, and consequently to the advent of equality. As long as a product is supplied only by a single manufacturer, its real value remains a mystery, either through the producer’s misrepresentation or through his neglect or inability to reduce the cost of production to its utmost limit. [\dots{}] an exact knowledge of value [\dots{}] can be discovered only by competition, not at all by communistic institutions or by popular decree.” (\emph{Système} I: 188–9)



\end{quote}


Rather that proclaim that goods must be priced at their labour-time cost, his constituted value explains how market price is \emph{regulated} by cost (ultimately labour) and this was “the centre around which useful and exchangeable value oscillate”, the “absolute, unchangeable law which regulates economic disturbances” for “whoever says \emph{oscillation} necessarily supposes a mean direction toward which value’s centre of gravity continually tends”. (\emph{Système} I: 62, 23) This was inherently dynamic:



\begin{quote}


“The idea of value socially constituted [\dots{}] serves to explain [\dots{}] how, by a series of oscillations between supply and demand, the value of every product constantly seeks a level with cost and with the needs of consumption, and consequently tends to establish itself in a fixed and positive manner” (\emph{Système} I: 87)



\end{quote}


So rather than there being “no more competition” as Marx asserts, Proudhon was very clear that work “differs in quantity and quality with the producer” and that “competition between workers” was “a necessity” and every utopia “ever imagined [\dots{}] cannot escape this law”. (\emph{Système} I: 55, 189). He explicitly opposed the idea of pronouncing \emph{a priori} prices (and pricing by labour-time cannot be anything else):



\begin{quote}


“Suppose for a moment that all producers should sell at a fixed price: there would be some who, producing at less cost and in better quality, would get much, while others would get nothing. [\dots{}] Do you wish [\dots{}] to limit production strictly to the necessary amount? That would be a violation of liberty: for, in depriving me of the power of choice, you condemn me to pay the highest price; you destroy competition, the sole guarantee of cheapness” (\emph{Système} I: 40–1)



\end{quote}


What of Marx’s other claims? Proudhon never argued that workers should exchanging according to \emph{time} rather “\emph{[p]roducts are bought only with products”} and notes that “[i]n economic science, we have said after Adam Smith, the point of view from which all values are compared is labour; as for the unit of measure, that adopted in France is the FRANC.” A worker’s income would reflect the price achieved on the market for “all wages [will] be equal to product”. (\emph{Système} I: 246, 67–8, 305) There would be social equality (no classes, only workers) but not equality of income for that depended on labour and competition:



\begin{quote}


“Ensure that for each of us well-being results exclusively from labour, so that the measure of work becomes the exact measure of well-being, and that the product of labour is like a second and incorruptible conscience, whose testimony punishes or rewards each man’s actions, according to merit or demerit.” (\emph{Système} II: 383)



\end{quote}


Is Proudhon’s term “\emph{valeur constituée}” and related discussion, as Marx suggest, less clear than Ricardo’s? Perhaps – but then Ricardo is not critiquing the workings of capitalism by exposing its contradictions. But disliking flowery language is hardly a firm basis for a critique – but it would be more accurate than the one Marx provides:



\begin{quote}


“Proudhon’s idea has often been contrasted with Robert Owen’s labour notes, and with the scheme prepared by Mr Bray [\dots{}] Proudhon’s circulating notes have nothing in common with the labour notes described by these writers. The circulating notes represent commercial goods produced for the purpose of private exchange. Prices are freely fixed by buyer and seller, and they bear no relation to the labour time, as is the case with the labour notes. The final result, doubtless, was expected to be the same. Proudhon hoped that in this way the price of goods [\dots{}] would equal cost of production. This result was to be obtained indirectly.” (Charles Gide and Charles Rist, \emph{A History of Economic Doctrines} [London: Harrap, 1948], 322–3)



\end{quote}


Finally, we must note that Marx’s attempts to suggest that Proudhon had plagiarised Ricardo (for suggesting, correctly, that – in context, \emph{French} – economists had opposed the labour theory of value for “the last 40 years”) while, simultaneously, “he talks about him, he talks at length about him, he keeps coming back to him, and concludes by calling his system ‘trash.’” Yet Proudhon is extremely complementary about Ricardo and lists him amongst the few economists whose works have “most to be commended”. (\emph{Système} I: 146) He does dismiss (\emph{Système} II: 138) Ricardo’s ideas on banking and money with the word “nonsense” (\emph{absurdité} rather than \emph{fatras} as Marx invents) but then Marx later also dismisses Ricardo’s “erroneous theory of money”. (\emph{Theories of Surplus Value} [London: Lawrence \& Wishart, 1969] II: 164)


Proudhon, rightly and like Ricardo, notes “the honour of first mention belong[s] to Adam Smith, \emph{Remuneration is in proportion not to USE VALUES which the producer brings to the market but TO THE WORK INCORPORATED in these use values}” His theory of value “is not a revelation that we pretend to offer to the world, or a novelty that we bring into science” for it “is, as we might prove easily by innumerable quotations, a common idea running through the works on political economy” and rejected “pretensions to originality”. This applies to how value is constituted and rather than “labour-notes” it “is determined in society by a series of oscillations between supply and demand” (\emph{Système} II: 84; I: 52; II: 209) Ironically, Marxists later appropriated Proudhon’s term – “the law of value” (\emph{Système} I: 60) – to summarise how the market price of goods oscillates around their prices of production (labour cost).


So rather than attack Proudhon for not going beyond the market (for the products of labour), Marx invents the notion of an “utopian interpretation of Ricardo’s theory” and so both misses a fruitful line of critique and wastes his reader’s time with \emph{absurdité}.

\section{Money}


Marx’s attack on Proudhon’s “Constituted Value” extends into a discussion of his views on money. This is significant for it shows how wrong Marx’s assertions about “labour notes” were and the shoddiness of his method for here Marx inflicts an invention onto his readers, namely the tampering of quotations. He asserts that “Proudhon has not yet exhausted all the so-called economic reasons” for the use of gold as money for there “is one of sovereign, irresistible force” and quotes him as follows:



\begin{quote}


“Money is born of sovereign consecration: the sovereigns take possession of gold and silver and affix their seal to them.” (« C’est de la consécration souveraine naît la monnaie : les souverains s’en emparent et y apposent leur sceau. »)



\end{quote}


From these damning words Marx proclaims “the whim of sovereigns is for M. Proudhon the highest reason in political economy.” This shows his poverty for “one must be destitute of all historical knowledge not to know that it is the sovereigns who in all ages have been subject to economic conditions, but they have never dictated laws to them. Legislation, whether political or civil, never does more than proclaim, express in words, the will of economic relations.” Marx fails to provide a page reference for Proudhon’s words, presumably because of what Proudhon \emph{actually} wrote:



\begin{quote}


“Little by little the sovereigns took possession of them and affixed their seal to them: and of this sovereign consecration was born money (« Peu à peu les souverains s’en emparent et y apposent leur sceau : et de cette consécration souveraine naît la monnaie »). (\emph{Système} I: 69)



\end{quote}


We can see why Marx changes Proudhon’s words, for Proudhon’s sketch of how money developed is the same as his: “In the patriarchal period, gold and silver were still bartered and exchanged in ingots but even then they showed a visible tendency to become dominant and received a marked degree of preference. Little by little the sovereigns took possession of them and affixed their seal to them: and of this sovereign consecration was born money, that is, the commodity par excellence”. (\emph{Système} I: 69) Nor must we forget that come 1867 the “business of coining, like the establishing of a standard measure of prices, is an attribute proper to the State.” (Marx, \emph{Capital} [London, Penguin Books, 1976] I: 221–2)


Proudhon’s discussion of money is also noteworthy due to what it says about his views on “Constituted Value.” Proudhon started by stating that gold and silver “were the first commodities to have their value constituted.” (\emph{Système} I: 69) Marx quotes this passage yet he made no attempt to reconcile it with his earlier proclamation that Proudhon’s “constituted value” was labour-notes. He does not because he could not – for to do so would be to suggest that Proudhon thought gold and silver were \emph{currently} priced in terms of hours worked to produce them, an obvious nonsense.


So rather than a system of labour-time pricing, Proudhon’s “constitution of value” is simply the recognition that because all goods are “a representative of labour” this meant that they “can be exchanged for some other” and can become exchangeable like money for “the monetisation of gold and silver” was “the consecration of the law of proportionality, the first act in the constitution of values”. The aim was to ensure that “all products of labour must be submitted to a proportional measure which makes all of them equally exchangeable” for up to now “this attribute of absolute exchangeability” was given just “to a special product [i.e., gold and silver], which shall become the type and model of all others.” (\emph{Système} I: 68–73)


If the too short discussion of money in chapter two Proudhon’s work was not enough, he also raises it in the chapter on credit (\emph{Système} II: 109–111) and concludes that “the price stipulated and accepted for sold goods can become currency in the form of a bill of exchange.” Likewise in the chapter on international trade, which argued for “all values” to be “determined and constituted like money” and for “each good” to be “immediately and without loss, accepted in exchange for another”. This was because “[m]oney, as we said in chapter II, is a variable value, but CONSTITUTED” and so “these goods remain the only one acceptable in payment, the suzerain of all the others, one whose value, by a temporary but real privilege [\dots{}], is socially and regularly determined in its oscillations [\dots{}] Until, by a radical reform in the industrial organisation, all produced values have been constituted and determined like currency [\dots{}] money preserves its royalty, and it is of it alone which one can say that to accumulate wealth is to accumulate power.” In short: “ensure that all goods are equivalent to money.” (\emph{Système} II: 141, 27, 32, 50–1)


This did not stop Marx ignoring that this was obviously the case by asserting “for M. Proudhon [gold and silver are] the example \emph{par excellence} of the application of value constituted\dots{} by labour time.” Needless to say, he does not quote Proudhon stating that gold and silver were currently priced\dots{} in the hours and minutes they had taken to produce.


Marx ends by proclaiming that gold and silver “are always proportional because, alone of all commodities, they serve as money, the universal agent of exchange, whatever their quantity in relation to the sum total of wealth.” Which was Proudhon’s whole point. This is so obvious that Marx cannot help but contradict what came before by noting that this idea of all goods “attain[ing] the status of money is not new” and can be found “in the writings of Boisguillebert, one of the oldest of French economists” and so we apparently see “that the first illusions of the bourgeoisie are also their last.”


Sadly, Proudhon never claimed to be saying anything original and asserting ideas to be “illusions” is not the same as proving it.

\section{Surplus of Labour}


Marx’s discussion of Proudhon’s “surplus of labour” both hits the target and misses the point. The hit is minor, namely a mathematical error which – presumably because it is an actual point rather than an invention – Marx milks for far more than its worth. He misses the point because he ignores Proudhon’s actual theory of how exploitation \emph{occurs in production} as a result of wage-labour in favour of asserting exploitation is rooted in exchange \emph{as such}.


Proudhon’s mathematical error was made in relation to showing that “labour must leave a surplus for each producer”. It is made in the context of Proudhon invoking “Prometheus,” the personification of society, an admittedly over-egged and unclear analogy to show, as he put it elsewhere, “in society the profits of speculation are equal to the losses”. Regardless of Marx’s mockery, Proudhon does so not to deny the reality of class society but rather to expose it for he discusses how this surplus does not enrich the worker for while in theory “by the progress of collective industry, each individual day’s labour yields a greater and greater product, and while, by necessary consequence, the worker, receiving the same salary, must grow ever richer, there exist in society classes which \emph{thrive} and classes which \emph{perish”.} (\emph{Système} II: 87; I: 50, 80) However, he does not explain in that discussion how this happens. Instead, his theory must be constructed from his analysis of the contradictions of specific elements of capitalism (machinery, monopoly, property, etc.).


\emph{First}, labour did not have a value but what it created did and so labour produces value only as \emph{active} labour engaged in the production process:



\begin{quote}


“Labour is said to have value, not as merchandise itself, but in view of the values supposed to be contained in it potentially. The value of labour is a figurative expression, an anticipation of effect from cause [\dots{}] it becomes a reality through its product. When, therefore, we say: This man’s labour is worth five francs per day, it is as if we should say: The daily product of this man’s labour is worth five francs” (\emph{Système} I: 61)



\end{quote}


\emph{Second}, capitalism is marked by private property in the means of production and this creates an institutional inequality between the working class and the owning class (landlords and capitalists). Any equality between the two “was bound to disappear through the advantageous position of the master and the dependence of the wage-workers. In vain does the law assure to each the right of enterprise, as well as the faculty to labour alone and sell one’s products directly” for “the object of the workshop [is] to annihilate isolated labour. [\dots{}] When an establishment has had the time to grow, enlarge its foundations, ballast itself with capital, and assure itself customers, what can the worker who has only his arms do against a power so superior?” Those without property, “within whose reach competition never comes, are hirelings of the competitors” as “competition cannot by itself become the common condition” because “[b]y the formation of the company [\dots{}] competition is an exceptional matter, a privilege”. (\emph{Système} I: 163–4, 213)


\emph{Third}, this inequality of conditions means that workers have no access to the means of production and so they “have sold their arms and parted with their liberty” to those who own them. (\emph{Système} I: 267) Capitalism’s defining feature was not markets or exchange (which predate it) but rather labour as a commodity:



\begin{quote}


“The period through which we are now passing — that of machinery — is distinguished by a special characteristic: WAGE-LABOUR.



\end{quote}



\begin{quote}


“Wage-labour stems from the use of machinery – that is, [\dots{}] from the economic fiction by which capital becomes an agent of production. [\dots{}] The first, the simplest, the most powerful of machines is the \emph{workshop}. [\dots{}] The machine, or the workshop, after having degraded the worker by giving him a master, completes his degeneracy by reducing him from the rank of artisan to that of common labourer. [\dots{}] Machinery plays the leading role in industry, man is secondary: all the genius displayed by labour tends to the degradation of the proletariat. [\dots{}]



\end{quote}



\begin{quote}


“With machinery and the workshop, divine right – that is, the principle of authority – makes its entrance into political economy. Capital, Mastership [\dots{}] such are, in economic language, the various names of [\dots{}] Power, Authority, Sovereignty [\dots{}] the workshop with its hierarchical organisation, and machinery [\dots{}] serv[es] exclusively the interests of the least numerous, the least industrious, and the wealthiest class” (\emph{Système} I: 161–6)



\end{quote}


\emph{Fourth}, the workers labour under the control of their bosses and so “they have executed with their hands what the thought of the employers had conceived”. (\emph{Système} I: 267) Property produces despotism in production:



\begin{quote}


“Thus, property, which should make us free, makes us prisoners. What am I saying? It degrades us, by making us servants and tyrants to one another.



\end{quote}



\begin{quote}


“Do you know what it is to be a wage-worker? To work under a master, watchful of his prejudices even more than of his orders [\dots{}] Not to have any thought of your own, to study without ceasing the thought of others, to know no stimulus except your daily bread, and the fear of losing your job!



\end{quote}



\begin{quote}


“The wage-worker is a man to whom the proprietor who hires his services gives this speech: What you have to do does not concern you at all: you do not control it, you do not answer for it. Every observation is forbidden to you; there is no profit for you to hope for except from your wage, no risk to run, no blame to fear.” (\emph{Système} II: 295)



\end{quote}


\emph{Fifth}, the employer keeps the product of the workers’ labour:



\begin{quote}


“Here, then, is the proposition which the speculator makes to those who he wishes to collaborate with: I guarantee to you [the worker] in perpetuity the distribution [\emph{placement}] of your products, if you will accept me as purchaser or intermediary [\dots{}] the entrepreneur will have more opportunity for selling, since, producing cheaply, he can lower his price; finally his profits will be larger because of the mass of the investments.” (\emph{Système} I: 162)



\end{quote}


\emph{Sixth}, this allows capitalists to appropriate the difference between what workers create and what they receive in wages. The “co-operation of numerous workers” produces “an effect of collective power” and so “the question is to ascertain whether the amount of individual wages paid by the entrepreneur is equivalent to th[is] collective effect”. The answer is no: it goes to the boss “gratuitously” for he “has paid nothing for that immense power which results from the union of workers” but rather “has paid as many times one day’s wage as he has employed workers – which is not at all the same thing.” He “allots to himself the benefit of the collective power” which “is usurpation on his part” and so the axiom “\emph{[e]very product is worth what it costs}” is “violated”. (\emph{Système} I: 266)


Exploitation occurred in production as the employer appropriated the collective force and surplus of labour of the wage-workers embodied within the products they create for them:



\begin{quote}


“I have proven, in dealing with value, that every labour must leave a surplus; so that in supposing the consumption of the labourer to be always the same, his labour should create, on top of his subsistence, a capital always greater. Under the regime of property, the surplus of labour, essentially collective, passes entirely [\dots{}] to the proprietor: now, between that disguised appropriation and the fraudulent usurpation of a communal good, where is the difference?



\end{quote}



\begin{quote}


“The consequence of that usurpation is that the worker, whose share of the collective product is constantly confiscated by the entrepreneur, is always on his uppers, while the capitalist is always in profit [\dots{}] political economy, that upholds and advocates that regime, is the theory of theft.” (\emph{Système} II: 315)



\end{quote}


So in “this system of interlocked monopolies” the worker “is no longer anything more than a serf” to whom “the holder of the instruments of production seems to say [\dots{}]: You will work as long as your labour leaves me a surplus”. This explains “the reason why wealth and poverty are correlative, inseparable, not only in idea, but in fact; this is the reason why they exist concurrently [\dots{}] the wage-worker [\dots{}] finds that, though promised [\dots{}] hundred, he has really been given but seventy-five.” This results in a system that ensures that “the subordinated worker should lose, together with his legitimate salary [i.e., his product], even the exercise of the industry which supported him”. (\emph{Système} II: 54; I: 258–9, 366)


In short: “PROPERTY IS THEFT” (\emph{Système} II: 234)


Marx ignores all this and instead invokes the authority of Ricardo to dispute Proudhon’s basis as well as suggesting that it is exchange – \emph{not wage labour} – that is the problem: “relative value, measured by labour time, is inevitably the formula of the present enslavement of the worker”.


He starts by arguing that the egalitarian consequences Proudhon “deduces from Ricardo’s doctrine are based on a fundamental error. He confounds the value of commodities measured by the quantity of labour embodied in them with the value of commodities measured by ‘the value of labour.’” Ricardo “exposes this error” in Smith’s work while Proudhon “goes one better than Adam Smith in error by identifying the two things which the latter had merely put in juxtaposition.”


To see the flaw in Marx’s argument, we need simply quote an authority Marx should recognise, his later self:



\begin{quote}


“It is Adam Smith’s great merit that [\dots{}] where he passes from simple commodity exchange and its law of value to exchange between materialised and living labour, to exchange between capital and wage-labour [\dots{}] he feels some flaw has emerged. He senses that somehow [\dots{}] in the actual result the law is suspended: more labour is exchanged for less labour (from the labourer’s standpoint)” (\emph{Theories of Surplus Value} I: 87)



\end{quote}


Thus “fundamental error” becomes “great merit”! If, for later-Marx, “Ricardo simply answers that this is how matters are in capitalist production. Not only does he fail to solve the problem; he does not even realise its existence in Adam Smith’s work” (\emph{Theories of Surplus Value} II: 396–7) then the same can be said of younger-Marx.


In short, when “all workers are producers of commodities” the “value of labour is therefore equal to the value of the product of labour.” Thus is because “as owners of commodities” the “quantity of social labour which they command is therefore equal to the quantity of labour contained in the commodity with which they themselves make the purchase.” It only changes in “the exchange between materialised labour and living labour, between capitalist and worker”. (\emph{Theories of Surplus Value} I: 71–2, 77) In other words, wage-labour.


So rather than Proudhon “confus[ing] the two measures, measure by the labour time needed for the production of a commodity and measure by the value of the labour” and thinking “a certain quantity of labour embodied in a product is equivalent to the worker’s payment,” the opposite is the case under capitalism. This can be seen from the passage Marx selectively quotes as evidence for his claim: “‘Any man’s labour,’ he says, ‘can buy the value it contains.’” In fact, Proudhon is taunting the bourgeois economists:



\begin{quote}


“Why do not the economists, if they believe, as they appear to, that the labour of each should leave a surplus, use all their influence in spreading this truth, so simple and so luminous: Each man’s labour can buy only the value which it contains, and this value is proportional to the services of all other workers?” (\emph{Système} I: 81)



\end{quote}


One of the aims of Proudhon’s book was to show why \emph{under capitalism this was not the case}. He showed how wage-labour allowed the exploitation of labour. Marx in 1847 had no theory of exploitation \emph{within production}. “Neither \emph{The Poverty of Philosophy} nor the \emph{Communist Manifesto}, nor \emph{Wage Labour and Capital}”, Mandel admits (81), “contain the idea of surplus-value.” Marx limits himself to appealing to the authority of Ricardo and suggesting that working class slavery is the result of commodity production rather than wage-labour. Both positions he later came to recognise were wrong. Worse, Marx in 1847 mocks the theory of exploitation he published twenty years later:



\begin{quote}


“Marx made some disparaging remarks about this passage [that Labour ‘is a thing vague and indeterminate by nature, but defined qualitatively by its object, that is to say, it becomes a reality by the product’] even though Proudhon here anticipated an idea that Marx was to develop as one of the key elements in the concept of \emph{labour power}, viz. that \emph{as a commodity}, labour produces nothing and it exists independently of and prior to the exercise of its potential to produce value as \emph{active} labour [namely, ‘Human labour power in its fluid state, or human labour, creates value but is not in itself value. It becomes value in its coagulated state, in objective form.’ (\emph{Capital} I: 142)]” (Alan Oakley, \emph{Marx’s Critique of Political Economy} [London: Routledge \& Kegan Paul, 1984] 1: 118)



\end{quote}


Marx seems unaware of the specific class foundations of capitalism and rather than root exploitation in wage-labour he places it in exchange which produces exploitation of one class by another – \emph{even if no classes exist}. For “[i]ndividual exchange corresponds also to a definite mode of production which itself corresponds to class antagonism. There is thus no individual exchange without the antagonism of classes” and “social relations based on class antagonism” are “not relations between individual and individual, but between worker and capitalist, between farmer and landlord, etc.” Yet in Proudhon’s alternative, there are no capitalists or landlords, just workers and as Marx later suggested: “if one eliminates the capitalists, the means of production cease to be \emph{capital.}” (\emph{Theories of Surplus Value} III: 296)


So Marx is like the bourgeois economist who “confounds the most disparate things, association and wage-labour, usury and partnership”. (\emph{Système} II: 46) It takes him until 1867 to recognise that the “historical conditions of [capital’s] existence are by no means given with the mere circulation of money and commodities. It arises only when the owner of the means of production and subsistence finds the free worker available on the market, as the seller of his own labour-power.” (\emph{Capital} I: 264) But by then he had come to the same analysis as Proudhon had when he tried to belittle him twenty years previously.

\section{The Poverty of Marx’s Method}


We have addressed a few of Marx’s attacks on Proudhon from the first chapter of his book and shown their fundamentally dishonest and often self-contradictory nature. Proudhon rarely argued what Marx proclaimed he did and so the bulk of his book is simply irrelevant to a critique of Proudhon. This applies to the Marx’s discussion of Proudhon’s methodology in the second chapter which he proclaimed as pure idealism:



\begin{quote}


“But the moment we cease to pursue the historical movement of production relations, of which the categories are but the theoretical expression, the moment we want to see in these categories no more than ideas, spontaneous thoughts, independent of real relations, we are forced to attribute the origin of these thoughts to the movement of pure reason.”



\end{quote}


Proudhon sought a model of capitalism. Using the categories of political economy, he builds an analysis of capitalism by discussing these categories, exploring their contradictions (both internal and comparing their theory with reality) and adding them one to the other to build a more realistic model.


Marx takes umbrage at this, arguing that “only drawback to this method is that when he comes to examine a single one of these phases, M. Proudhon cannot explain it without having recourse to all the other relations of society; which relations, however, he has not yet made his dialectic movement engender. When, after that, M. Proudhon, by means of pure reason, proceeds to give birth to these other phases, he treats them as if they were new-born babes. He forgets that they are of the same age as the first.” So, for Marx in 1847, we must discuss every aspect of capitalism and their histories all at the same time. That this is a near to impossible task Marx inflicts on Proudhon should be obvious but not to him. The burden that this method imposes on the writer is immense and so perhaps it is unsurprising that while Marx had been trying to write a book on capitalism since the mid-1840s he would not – until he embraced Proudhon’s method of using categories to organise it. He summarised his new perspective in “The Method of Political Economy” subsequently published in the \emph{Grundrisse} ([London: Penguin Books, 1973], 100–8). As one Marxist academic notes:



\begin{quote}


“To avoid limiting the cognitive process to a mere repetition of the stages of what had happened in history, it was necessary to use a process of abstraction, and therefore categories that allowed for the interpretation of society in all its complexity. [\dots{}] For Marx [in 1857], it was not necessary to reconstruct the historical genesis of every economic relationship in order to understand society and then give an adequate description of it.” (Marcello Musto, \emph{Foundations of the critique of political economy 150 years later} [London and New York: Routledge, 2008], 21–2)



\end{quote}


Yet in 1847 he lambasts Proudhon as an idealist for doing precisely that. Marx argues – seriously! – that “in the final abstraction” when we create “a logical category” and “we abstract thus from every subject all the alleged accidents” then “the only substance left is the logical category”. For this reason Proudhon is an idealist who – like Hegel – thinks ideas create reality. Yet Proudhon continually links the need to base any model on empirical reality. He does reject pure empiricism because he is aware that a “fact” needs to be \emph{interpreted} and so “facts are not matter [\dots{}] but visible manifestations of invisible ideas” and “the value of facts is measured by the idea which they represent.” While rejecting pure empiricism, “it is impossible to accuse us of spiritualism, idealism or mysticism” for the idea “does not exist, as long as it is not reflected” in facts. So ideas as based on facts – as Proudhon noted as regards Hegel “we have glimpsed quite quickly that even its author had only been able to construct that logic by constantly mixing in experience and taking from it his materials. All his formulas followed observation, but never preceded it” (\emph{Système} I: 134; II: 220–1) But generalising from empirical reality – “we abstract thus from every subject all the alleged accidents” – does not mean idealism as later-Marx acknowledges:



\begin{quote}


“If prices actually differ from value, we must first reduce the former to the latter, i.e. disregard this situation as an accidental one in order to observe the phenomenon [\dots{}] and to prevent our observations from being interfered with by disturbing incidental circumstances which are irrelevant to the actual course of the process.” (\emph{Capital} I: 269)



\end{quote}


Let us step back and consider what Marx is claiming in 1847, namely that Proudhon thinks that economic relations are immutable – unchanging ideas – and existed as long as people have (“we shall concede further that these laws, principles and categories had, since the beginning of time, slumbered ‘in the impersonal reason of humanity.’”). In other words, that value, division of labour, machines, competition all existed as categories – in their present form, moreover – long before humans actually laboured, exchanged, built machines, etc.


Ignoring the question of why Marx thought his readers would believe this nonsense about Proudhon, it is useful to consider how did Marx arrive at such an obviously stupid assertion. Let us follow his chain of reasoning.


First, Proudhon analyses the capitalist economy and builds a series of categories. Second, a category is a generalisation, an abstraction – and so an idea. Third, Proudhon is quoted as “not giving a history according to the order in time, but according to the sequence of ideas. Economic phases or categories are in their manifestation sometimes contemporary, sometimes inverted”. (\emph{Système} I: 145) Fourth, Marx concludes that when Proudhon writes of categories manifesting themselves he means that the ideas manifest themselves.


It is easy to see how Marx is misled – or seeks to mislead his reader – for when Proudhon writes that the categories “are in their manifestation sometimes contemporary, sometimes inverted” he is not talking about the abstractions used to build his model but rather the actual facts upon which his abstractions are based. Marx’s feigns to proclaim in all honesty that Proudhon thinks the ideas produce the facts when, in reality, Proudhon is at pains to stress that his model and its abstractions are rooted in observation, the analysis of experience. As his marginal note on his copy of \emph{The Poverty of Philosophy} states:



\begin{quote}


“Have I ever said that PRINCIPLES are anything other than the intellectual representation, not the generative cause, of facts?”



\end{quote}


Marx confuses a means of presentation with idealism. Proudhon creates an abstract model of capitalism by taking specific aspects (categories) of that system in isolation in order to draw out their contradictions. He builds up his model by adding more categories and applying the same analysis. In this way he makes his model more reflective of reality but, it is important to stress, he never forgets \emph{that it is a model}, an abstraction – “we attain knowledge only by a \emph{sort of scaffolding} of our ideas. But truth in itself is independent of these dialectical symbols and freed from the combinations of our minds.” Nor does he forget while “in the theory they [the categories] are distinct and consecutive” in reality “all these things are inseparable and simultaneous”. (\emph{Système} II: 97, 250–1) Yet Marx quotes Proudhon on his “scaffolding” and proclaims he is “reduced to saying that the order in which he gives the economic categories is no longer the order in which they engender one another”! Talk about (wilfully?) missing the point.


We cannot address everything Marx proclaims against Proudhon. Suffice to say, this chapter draws the bulk of Proudhon’s ire in his marginal notes – a combination of outrage (“lie”, “slander”, “Prattle”) and incredulity (“Does Marx have the pretentiousness to claim all of this as his own, in opposition to something contrary which I am supposed to have said?”, “But all that it is me!”, “Plagiarism of my first chapter”, “What! \emph{Come on now}! But the preceding pages are copies of my own”). It is easy to see why when the works are compared. However, we will address three aspects of Marx’s critique before turning to two illustrative examples.


First, Marx proclaims that by using the categories of capitalism to analyse capitalism means to fail to recognise that “the ideas, these categories, are as little eternal as the relations they express” and are in fact “\emph{historical and transitory products}”. As if Proudhon were not aware that “the radical vice of political economy, consists, in general terms, in affirming as a definitive state a transitory condition – namely, the division of society into patricians and proletarians” and that “in its present form, the organisation [of labour] is inadequate and transitory” (\emph{Système} I: 26, 14) So much for Proudhon “borrows from the economists the necessity of eternal relations”!


Second, Marx proclaims that “Providence is the locomotive which makes the whole of M. Proudhon’s economic baggage move better than his pure and volatized reason” to which he has “devoted [\dots{}] a whole chapter” but as George Sorel noted, it is “obvious that Marx must have read this chapter very superficially (if at all), for Proudhon rejected [it] as clearly as possible”. (\emph{The Illusions of Progress} [California: University of California, 1973], 141) A Catholic scholar also shows more comprehension skills than Marx and summarised Proudhon’s actual position (“Against the ‘Myth of Providence’”), namely as a critique of those economists who invoked it for “it was Property in particular which called upon Providence to consolidate its interests.” (Henri du Lubac, \emph{The Un-Marxian Socialist} [New York: Octagon Books, 1978], 185). Did Marx really fail to see sarcasm and irony when it is literally in front of his face?


Third, in 1847 Proudhon is attacked for producing an abstract analysis of capitalism rather than writing a history book yet in \emph{Capital} Marx fails to produce the work he demanded of Proudhon twenty years previously. Instead he produces an abstract analysis of capitalism based on exploring the contradictions of the various categories of capitalism, as Proudhon was denounced for doing in 1847. Then abstraction by definition meant idealism, now it was the case that “[i]n the analysis of economic forms neither microscopes nor chemical reagents are of assistance. The power of abstraction must replace them both” (\emph{Capital} I: 90)


Still, we must acknowledge that Marx realised what he had demanded in 1847 – the simultaneous discussion of every category of capitalism and their histories – was near impossible. We need not bother too much with Marx’s attempt to portray Proudhon as an idealist like Hegel for he later rejected his opposition to this methodology:



\begin{quote}


“Marx here tackles differently the thorny question of the order to be assigned to the economic categories. He had already addressed it in \emph{The Poverty of Philosophy}, where, in opposition to Proudhon’s wish to follow not ‘history in accordance with the order of events, but in accordance with the succession of ideas’, he had criticized the idea of ‘constructing the world by the movement of thought’. Thus in 1847, in his polemic with the logical-dialectical method employed by Proudhon and Hegel, Marx had preferred a rigorously historical sequence. But ten years later, in the ‘Introduction’ [in the \emph{Grundrisse}], his position changed: he rejected the criterion of chronological succession for the scientific categories, in favour of a logical method with historical-empirical checks [\dots{}] setting out the categories in a precise logical order and the working of real history do not coincide with each other [\dots{}]



\end{quote}



\begin{quote}


“Marx, then, arrived at his own synthesis by diverging from the empiricism of the early economists, which yielded a dissolution of concrete elements into abstract definitions; from the method of the classical economists, which reduced thought about reality to reality itself; from philosophical idealism [\dots{}] which he accused of giving thought the capacity to produce the concrete [\dots{}] and, finally, from his own conviction in \emph{The Poverty of Philosophy} that he was essentially following ‘the march of history’” (Musto, 20–1)



\end{quote}


So any claim that Marx’s book is still of use – if we can ignore the distortions – because of its method fails as this was soon rejected. We now know the answer Proudhon’s marginal note: “So tell me, how will you set about speaking in turn on matters of Pol[itical] Econ[omy]?”

\section{The Division of Labour and Machinery}


Marx seeks to apply his methodology by first berating Proudhon for abstracting and generalising on the division of labour and so “hav[ing] no need to study the numerous influences which give the division of labour a definitive character in every epoch.” However, not providing a detailed historical account for every society and its corresponding division of labour is hardly a valid criticism given both its impossibility and its irrelevance to developing a critique of capitalism. Suffice to say, come 1867 and the publication of \emph{Capital}, such a study urged twenty-years before is nowhere to be found.


Marx then states that for Proudhon “J. B. Say was the \emph{first} to recognise ‘that in the division of labour the same cause that produces the good engenders the bad.’” Marx provides no page number so making it harder to discover what Proudhon actually wrote:



\begin{quote}


“Say goes so far as to recognise that in the division of labour the same cause which produces the good engenders the evil”. (\emph{Système} I: 96)



\end{quote}


As for Marx’s reference to Lemontey to refute something Proudhon did not write, it comes as no surprise to discover Proudhon writing how “[m]ore than thirty years ago, Lemontey, developing a remark of Smith, exposed the demoralising and homicidal influence of the division of labour. What has been the reply; what investigations have been made; what remedies proposed; has the question even been understood?” And as for mentioning Sismondi to refute Proudhon’s comment that “all economists have insisted far more on the advantages than on the drawbacks of the division of labour,” well he was hardly a typical economist and is the exception that proves the rule. (\emph{Système} I: 121, 95)


After a weak start, Marx’s critique gets worse. He denounces Proudhon for not showing “the drawbacks of the division of labour in general, of the division of labour as a category” and instead criticising the harmful effects of it under capitalism. No, rather than understand the dynamics of capitalism – where “it is necessary that the poor should perish to secure the proprietor his fortune” (\emph{Système} I: 97) – Marx thinks we need to study all of history! Yet this example shows the limitations of his demand. He proclaims “it is slapping history in the face to want to begin by the division of labour in general, in order to get subsequently to a specific instrument of production, machinery” for he later does precisely that by arguing that the “workshop, the product of division of labour in manufacture, produced in its turn – machines.” (\emph{Capital} I: 490–1) as well as repeating Proudhon’s schema of division of labour leading to machinery in chapters 14 (“The Division of Labour and Manufacture”) and 15 (“Machinery and Large-Scale Industry”) not to mention elsewhere: “machinery, by and large, arose [\dots{}] through the division of labour”. (\emph{The Grundrisse}, 704)


Marx berates Proudhon for not understanding that the “machine is a unification of the instruments of labour, and by no means a combination of different operations for the worker himself” yet for Proudhon “the machine is the division of labour” and “division almost always and almost necessarily supposes the use of machines.” He thinks that Proudhon is providing a history when he is showing the economists how under capitalism “machines promised us an increase of wealth” while “at the same time endowing us with an increase of poverty” and they “promised us liberty” but “have brought us slavery.” (\emph{Système} II: 250–1; I: 160) Ironically, Marx in \emph{Capital} also eschews the actual history he denounced Proudhon for ignoring:



\begin{quote}


“Why this free worker confronts him in the sphere of circulation is a question which does not interest the owner of money [\dots{}] And for the present it interests us just as little. We confine ourselves to the fact theoretically, as he does practically.” (\emph{Capital} I: 273)



\end{quote}


Marx’s irrelevant lecturing about history in 1847 does show the dangers of replacing economic analysis with historical commentary as new research can overturn previous conclusions. So twenty years after denouncing Proudhon for not recognising that history itself showed that there was “not one single example” of it being sufficient “to assemble” all “the different branches of one and the same craft” to form a workshop, Marx admitted that manufacturing originated “[b]y the assembling together in one workshop, under the control of a single capitalist, of workers belonging to various independent handicrafts”. (\emph{Capital} I: 455)


And talking of history, it must be noted that Marx wasted his reader’s time attacking Proudhon for ignoring how the “automatic workshop opened its career with acts which were anything but philanthropic” by being used by employers against their workers – for Proudhon did not. (\emph{Système} I: 150–2) Similarly, after suggesting Proudhon eulogises machinery and its uses, Marx ends by proclaiming he “has not gone further than the petty-bourgeois ideal” and seeks “to take us back to the journeyman or, at most, to the master craftsman of the Middle Ages” based on a discussion of something – “synthetic labour” – which Proudhon does \emph{not} specify but \emph{explicitly rejects} (\emph{Système} I: 127–8) what Marx claims he meant, namely the worker “successfully [making] all 12 parts” of a product. Nor did Proudhon reject the use and necessity of modern machinery:



\begin{quote}


“Sismondi, like all men of patriarchal ideas, would like the division of labour, with machinery and manufactures, to be abandoned, and each family to return to the system of primitive indivision – that is, to \emph{each one by himself, each one for himself}, in the most literal meaning of the words. That would be to retrograde; it is impossible.” (\emph{Système} I: 167)



\end{quote}


In short, Marx attacks Proudhon for both being completely uncritical about modern machinery and its uses \emph{and} wishing to get rid of it to return to the Middle Ages. The facts are otherwise for it is important to remember that while he did suggest that machinery “is the \emph{antithesis} of the division of labour, the \emph{synthesis} restoring unity to divided labour.” but is this only \emph{potentially}. If groups of workers controlled their workplaces then, surely, they would introduce machinery which improves their working life? It is this potential for machinery which Proudhon eulogies in the first section of the chapter on Machinery while the second section shows how this is turned into its opposite under capitalism and so “far from freeing humanity, securing its leisure” mechanical progress has “no other effect than to multiply labour”, “make the chains of serfdom heavier” and “deepen the abyss which separates the class that commands and enjoys from the class that obeys and suffers.” (\emph{Système}, I: 170)

\section{The State and Taxation}


Our last example starts with Marx presenting a heavily edited – with no indication of this editing – unreferenced quote as support for how Proudhon achieved “the dialectical transition to the taxes which come after monopoly” and “talks to us about the social genius which” creates and uses taxation with “no other object in view than that of destroying the bourgeois by taxes, whereas taxes are the very means of giving the bourgeois the wherewithal to preserve themselves as the ruling class”. He then summarises:



\begin{quote}


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



\end{quote}


Marx does not inform his reader of what Proudhon immediately states after the passage he almost quotes:



\begin{quote}


“We have to prove that society could neither think better nor act worse [\dots{}] Every measure of general police, every administrative and commercial regulation, like every law of taxation, is at bottom but one of the innumerable articles of this ancient bargain, ever violated and ever renewed, between the patriciate and the proletariat.” (\emph{Système} I: 285)



\end{quote}


Marx, then, quasi-quotes Proudhon completely out of context to attribute ideas which are the complete opposite of his actual position. The rest of Proudhon’s chapter explains how “analysis and the facts demonstrate [\dots{}] the tax upon monopoly, instead of being paid by those who possess, is paid almost entirely by those who do not possess” and “the tax on provisions agitates and tortures the poor proletarian in a thousand ways”. To “conduct this offensive and defensive war against the proletariat a public force was indispensable: the executive power grew out of the necessities of civil legislation, administration, and justice.” (\emph{Système} I: 296, 317, 356)


The comments Marx quasi-quotes is Proudhon \emph{recounting how taxation is presented} not what he believes it actually is. They reflect how Adam Smith recounts various expenses of the State and how they are “for the general benefit of the whole society.” (\emph{The Wealth of Nations}, [Chicago: University of Chicago, 1976] Volume II, 339). Likewise, John Locke suggested that the liberal social contract was advantageous to even the servant class. Proudhon, in contrast, is very clear on the class nature of the State:



\begin{quote}


“Such is the war that you have to sustain: a war of labour against capital; a war of liberty against authority; a war of the producer against the non-producer; a war of equality against privilege. [\dots{}] Now, to combat and reduce power, to put it in its proper place in society, it is of no use to change the holders of power or introduce some variation into its workings: an agricultural and industrial combination must be found by means of which power, today the ruler of society, shall become its slave. [\dots{}] Thus power, the instrument of collective might, created in society to serve as a mediator between labour and privilege, finds itself inevitably enchained to capital and directed against the proletariat. No political reform can solve this contradiction [\dots{}] The problem before the labouring classes, then, consists, not in capturing, but in subduing both power and monopoly – that is, in generating from the bowels of the people, from the depths of labour, a greater authority, a more potent fact, which shall envelop capital and the State and subjugate them.” (\emph{Système} I: 362–4)



\end{quote}


Significantly, Proudhon argues that the State cannot be captured by the working class and used as an instrument for emancipation. Marx, in contrast, continued to have illusions that universal suffrage gave the working class political power and so the State could be used to transform society. History has shown that Proudhon was correct.


Marx ends his comments by proclaiming that “[t]his brief summary will suffice to give the reader a true idea of M. Proudhon’s lucubrations on the police or on taxes, the balance of trade, credit, communism, and population. We defy the most indulgent criticism to treat these chapters seriously.” Given how Marx distorts Proudhon’s ideas by selectively quoting a few ironic comments and completely ignoring the rest of the chapter on the State, in reality this “brief summary” simply gives the reader “a true idea” of Marx’s so-called “reply.” We defy the most sycophantic Marxist to compare what Proudhon actually wrote to what Marx claimed he did and take Marx’s so-called critique seriously.

\section{Marx’s Alternative}


Given the pains he takes to mock Proudhon, we must quickly discuss Marx’s alternative to both capitalism and the (brief outlines of) market socialism Proudhon presents, central planning:



\begin{quote}


“One hour of Peter’s labour exchanges for one hour of Paul’s labour. That is Mr. Bray’s fundamental axiom. [\dots{}] Thus, if all the members of society are supposed to be actual workers, the exchange of equal quantities of hours of labour is possible only on condition that the number of hours to be spent on material production is agreed on before hand. But such an agreement negates individual exchange. [\dots{}] What is today the result of capital and the competition of workers among themselves will be tomorrow [\dots{}] an actual agreement based upon the relation between the sum of productive forces and the sum of existing needs.”



\end{quote}


Marx generalises from the example of two men producing two commodities to the whole of society within an actual economy. This is undoubtedly because such an “agreement” is easier to visualise for the former than the latter:



\begin{quote}


“a simple problem involving 2 objectives and 2 variants will have 4 solutions. With 5 objectives and 3 variations we already have 243 solutions. With 500 objectives and 10 variants (still a very simple economic planning problem) the number of solutions is 10500 (i.e., a ‘1’ followed by 500 zeros). This is much more than the number of atoms in the entire universe”. (Geoff Hodgson, \emph{The Democratic Economy} [Harmondsworth: Penguin books, 1984], 170–1)



\end{quote}


So “an actual agreement” may take some time to create and perhaps unsurprisingly how it can be reached in any real economy of millions of people and millions of products is not discussed by Marx here – \emph{or anywhere else.} As one Marxist (apparently without the slightest trace of embarrassment) admits:



\begin{quote}


“In deciding how much of any given article to produce, the planners have to strike a balance between social need, available labour-time and the existing means of production. Although Marx recognises that demand is elastic he never doubts that his proletarian planners – whose actual planning mechanisms are never discussed – will make the right equations.” (Ollman, 63)



\end{quote}


The alert reader may wonder why Marx refers to a “Mr. Bray” rather than Proudhon in all this. This is because Marx, without evidence, accuses Proudhon of plagiarising the ideas of the British Ricardian Socialists, specifically John Bray in whom “we think that we have discovered [\dots{}] the key to the past, present and future works of M. Proudhon”. Yet Bray was an advocate of central planning, \emph{not} market socialism, as shown by a passage Marx himself quotes:



\begin{quote}


“By means of general and local boards of trade, and the directors attached to each individual company, the quantities of the various commodities required for consumption – the relative value of each in regard to each other – the number of hands required in various trades and descriptions of labour – and all other matters connected with production and distribution, could in a short time be as easily determined for a nation as for an individual company under the present arrangements” (J.F. Bray, \emph{Labour’s Wrongs and Labour’s Remedy} [Leeds: David Green, 1839], 162)



\end{quote}


An individual company does \emph{not} allocate labour and products within it by means of the market but rather conscious allocation – planning. Marx himself admitted as much:



\begin{quote}


“If one took as a model the division of labour in a modern workshop, in order to apply it to a whole society, the society best organised for the production of wealth would undoubtedly be that which had a single chief employer, distributing tasks to different members of the community according to a previously fixed rule [\dots{}] inside the modern workshop the division of labour is meticulously regulated by the authority of the employer”



\end{quote}


That Bray advocated central planning is confirmed by other passages that Marx failed to quote. So “[o]n the surface Bray’s solution,” notes Noel W. Thompson, “would seem to have laid the basis for some kind of market socialism. However, a closer reading of \emph{Labour’s Wrongs} shows that his intention was to abolish the market and replace the motive force of competition by the conscious, rational, economic planning and decision-making of central and local authorities.” (\emph{The Market and Its Critics} [London: Routledge, 1988], 110) Bray was clear: “Competition could have no existence in a change like this”. (158)


So Proudhon is denounced by Marx for defending the necessity of competition \emph{and} also equated to someone who aims for its elimination.


This is hardly the only contradiction for Marx’s “reply in a few words” to Bray’s scheme simply repeats Bray’s own words against him (luckily for Marx Bray was “still little known” in Germany as in France). Worse, Marx’s system is even sketchier than Bray’s:



\begin{quote}


“Bray was aware of the need to acquire systematically the information on which to base decisions of those who managed the means of production, though [\dots{}] Bray suffered from an inability to see and a failure to confront the magnitude of the task. Thus, for example, the problem of managing a socialist economy was likened to that of overseeing an ‘individual enterprise’; a naïve suggestion which could only have been born out of an ignorance of the complex functions which the market performed and which would therefore have to be fulfilled by the central and local boards which Bray proposed.



\end{quote}



\begin{quote}


“However, leaving aside the problem of acquiring the information upon which informed economic decisions could be based, there remained the problem of how that information, once gathered, could best be used. On what basis and by reference to what criteria would calculation proceed. [\dots{}] Bray spirited away the problems he has set himself.” (Thompson, 111)



\end{quote}


The same can be said as regard Marx and his few lines of alternative to Proudhon’s market socialism. Similarly, Marx singularly failed to appreciate that turning the world into a single workplace under a single economic authority would produce not the freedom of socialism but the tyranny of state-capitalism. Proudhon, in contrast, would not have been surprised by the Soviet Union and its new class system based on the bureaucracy.

\section{Conclusion}


Comparing Marx’s “reply” to what Proudhon actually wrote, it is hard to take the former seriously. Once the various distortions and inventions are corrected, little remains. Proudhon was right to suggest Marx’s work was “a tissue of crudities, slanders, falsifications, and plagiarism.” (\emph{Correspondance} [Paris: Lacroix, 1875] II: 267–8) Worse, Marx himself twenty years later embraces in \emph{Capital} most of the positions he attacks Proudhon for holding in 1847.


More – much more – could be written but to do justice to all the distortions Marx inflicts on his readers would take a book in itself. We hope we have shown that rather than a masterpiece of polemical writing, Marx’s “reply” to Proudhon is a shoddy piece of work. For nothing is below Marx in his attempt to belittle and destroy Proudhon – up to, and including, inventing and tampering with quotes, selective quoting, false attribution and repeating Proudhon’s own ideas as if they were his own.


The dishonesty of \emph{The Poverty of Philosophy} has distorted our view of Proudhon’s ideas and the time is long overdue for a revaluation of Proudhon and his contributions to anarchism and the wider socialist movement. This does not mean that Marx does not, occasionally, presents a valid point – most obviously, Proudhon’s opposition to strikes was wrong as subsequent anarchists recognised – it is just that these are frustratingly few in the midst of so much distortion. So, yes, Proudhon’s mutualism – a form of market socialism based on worker-run co-operatives – does need to be critiqued but Marx’s book is simply not that work.

\section{Further Reading}


My article “Proudhon’s constituted value and the myth of labour notes” (\emph{Anarchist Studies} 25: 1) discusses many of the issues raised in this review in more detail. I discuss Proudhon and Marx in an appendix to my introduction for \emph{Property is Theft! A Pierre-Joseph Proudhon Anthology} (Edinburgh\Slash{}Oakland\Slash{}Baltimore: AK Press, 2011) In addition, its extracts from Proudhon’s \emph{System of Economic Contradictions} have numerous footnotes contrasting what he argued to what Marx claimed he wrote.


Finally, I must mention by debt to René Berthier’s excellent Proudhon and German philosophy


\hairline

% Footnotes

\emph{Background:} Engels’ letters written between August and October 1884 show that he did a great deal of work in preparing Marx’s \emph{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 \emph{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.

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The Ted K Archive





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Karl Marx

The Poverty of Philosophy

Answer to \emph{The Philosophy of Poverty} by M. Proudhon

1847


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