B U R E A U   O F   P U B L I C   S E C R E T S



by Karl Korsch



1. Marxism and Political Economy
2. From Political Economy to “Economics”
3. From Political Economy to Marxian Critique of Political Economy
4. Scientific versus Philosophical Criticism of Political Economy
5. Two Aspects of Revolutionary Materialism in Marx’s Economic Theory
6. Economic Theory of Capital
7. The Fetishism of Commodities
8. The “Social Contract”
9. The Law of Value
10. Common Misunderstandings of the Marxian Doctrine of Value and Surplus Value
11. Ultimate Aims of Marx’s Critique of Political Economy



Chapter 1

Marxism and Political Economy

Marx’s materialistic investigation of bourgeois society is based from the very beginning on a recognition of the cardinal importance of Political Economy. While but a few weeks before, he had written to his bourgeois-democratic friend Ruge, the characteristic words that the critic of modern society may start from “any given form of theoretical and practical consciousness” and that more especially the “political State” expresses within its form all social struggles, needs, and truths sub specie rei publicae, he now definitely transcended that intermediate stage of his materialistic moulding process by the conclusion that “the anatomy of civil society must be sought for in Political Economy.” Nor was this merely an advance toward a better method of scientific investigation. The theoretical transition to Political Economy coincided with a practical transition from the Jacobinic bourgeois revolution, which had aimed at solving the social problems and needs of the working classes sub specie rei publicae, to the independent action of the modern proletariat, which is resolved to seek for the specific roots of its oppression and for the specific path to its emancipation in Political Economy. “The economic emancipation of the working class,” say the Rules of the Working Men’s International Association drawn up twenty years later by Marx, “is the great end to which every political movement is subordinated as a means.”

The theoretical programme of the youthful Marx, to “seek for the anatomy of civil society in Political Economy,” does not, however, mean a simple acceptance of the accomplished results of the preceding period of economic science. Political Economy was, historically, the new science of the bourgeoisie, brought forth by the rising industrial class in its revolutionary fight against feudalism. Now, in a new historical epoch, that revolutionary struggle has come to an end. The bourgeois class rules, both politically and economically, in present-day society. Thus, Political Economy, dealing with the material foundation of the existing bourgeois State, is for the proletariat first and foremost an enemy country. Nor does it lose this character by the fact that parts of the ground held by its outposts are being occupied by the theoretical vanguard of the proletariat. The first task for the representatives of the new revolutionary class in this field is, therefore, to reconnoitre the enemy’s position.

In striking contrast to the illusions cherished by many socialists in their time and up to the present day, Marx and Engels never accepted the idea that this same economic science which the proletarian class inherited from the bourgeoisie, could now, by a mere elimination of its inherent bourgeois bias and a consistent working out of its own premises, be transformed into a theoretical weapon for the proletarian revolution. Wherever such an opinion was expressed by the first socialist Ricardians of 1820-30, by the Owenists, or by Proudhon, Rodbertus, and Lassalle, they declared it an “economically false theory,” an idealistic application of morality to economics and in its practical consequence a reactionary Utopia. They pointed out that the equality-idea resulting from the epoch of bourgeois “commodity-production” and expressed in the economic “law of value” is still bourgeois in its character. It is therefore only ideologically incompatible with the exploitation of the working class through capital, but not in actual practice. The socialist Ricardians imagined that they could attack the economists on their own ground and with their own weapons. On the basis of the economic principle that “it is Labour alone which bestows value,” they wanted to transform all men into actual workers exchanging equal quantities of labour. To one of the best of them, Bray, Marx replied that “ce rapport égalitaire, cet idéal correctif qu’il voudrait appliquer au monde, n’est lui-même que le reflet du monde actuel, et qu’il est par conséquent totalement impossible de reconstituer la société sur une base qui n’en est qu’une ombre embellie. À mesure que l’ombre redevient corps, on s’aperçoit que ce corps, loin d’en être la transfiguration rêvée, est le corps actuel de la société.” Instead of deriving demands of socialism and communism, in an idealistic and Utopian manner, from the laws of bourgeois economics, Marx and Engels formulated the materialistic conclusion that “according to the laws of bourgeois economics, the larger part of the product does not belong to the workers who have produced it.” In order to obviate this state of affairs one must not apply a different interpretation to bourgeois economics but rather, through a real change in society, bring about a practical situation in which those economic laws will cease to hold good and thus the science of economics will become void of contents and ultimately vanish altogether.

Political Economy then, according to Marx, is a bourgeois science. This applies even to Marx’s own contributions to the further development of its main doctrines. Marx fought to the end against the mistaken idea that his economic analysis of Value applied to any other than bourgeois conditions. Even the Marxian doctrine of Value and Surplus Value is only the final outgrowth of a conceptual process which, in content, had been almost completed by the classical bourgeois economists. Friedrich Engels, immediately after Marx’s death, made it quite clear, and the posthumous publications from Marx’s papers exhaustively proved, that Marx at no time in his life countenanced the opinion that the new contents of his socialist and communist theory could be derived, as a mere logical consequence, from the utterly bourgeois theories of Quesnay, Smith, and Ricardo.

How then are we to understand the leading part which, in spite of all this, Political Economy played in the genesis of Marx’s theory of society, and maintained through all its subsequent developments? This in itself shows again the superiority of the materialistic standpoint. Marx kept aloof from that superficiality by which many revolutionary theorists in his time and today imagined that by a mere theoretical effort, wishful thinking, or a simple “change of heart” they could ignore such objective facts as those investigated by economic science — the very fundamentals of all existing social relations. The modern working class in its independent social movement inevitably starts from the historical results of the bourgeois revolutionary movement. At the same time this bourgeoisie and the new mode of production it brought forth, its State and all its other institutions and ideas, are the very antagonist from whom the proletariat must completely separate its own action and whom it must ultimately conquer in a decisive battle. So must the proletariat, in evolving its own revolutionary thought, start from the results achieved by bourgeois economic investigation. It cannot skip over, in its own materialistic theory, the definite forms of economic science existing historically in the present epoch any more than it can neglect, in its revolutionary practice, the existence of the modern capitalistic mode of production. Only by means of a practical and theoretical action persistently continued for a considerable time through several intermediate phases, can the proletariat carry through the necessary change in the existing conditions of material production and thereby ultimately surpass the social forms of consciousness which are at present bound up with those conditions.

Long before he applied this consequence of his materialistic principle to economic science, Marx had applied it to philosophical thought in the battles waged in the forties between the various groups of young Hegelians, on the question of the impact of “philosophy” (i.e., Hegelian philosophy) on the imminent political revolution. He had opposed the attitude of the philosophical party which derived the revolution immediately from the principles of philosophy just as much as he had opposed that of the anti-philosophical party which turned its back on philosophy. Just as he had done in his previous criticism of philosophy, so now in his criticism of Political Economy, Marx seemed to call out to the socialistic Ricardians, etc., who wished to derive socialism from bourgeois economics: “You cannot realize Political Economy (in practice) without doing away with it (by theoretical action)”; and to the “pure” historians, “pure” sociologists, “pure” revolutionary activists, who ignored all economics, “You cannot do away with Political Economy (by practical action) without realizing it (in theory).”



Chapter 2

From Political Economy to “Economics”

Classical Political Economy, as distinct from the adulterations of the “vulgar” economists of the 19th century and from the more recent attempts at an entirely new start, originated historically as an integral part of the new science of civil society, created by the bourgeoisie in its revolutionary struggle to establish this very society. It formed a realistic complement to the great philosophical, political, juridical, moral, aesthetic, and psychological upheaval, through which during the period of the so-called “Enlightenment” the ideological representatives of the rising bourgeois class first expressed the new bourgeois consciousness which corresponded to the change in the real conditions. Even in its purely theoretical form, the new science of Political Economy during this early period, as well as in the first great systems of the Physiocrats, was bound up with the whole of the new bourgeois social science in a natural and ingenuous unity. It is true that Adam Smith separated his economic Inquiry into the Nature and Causes of the Wealth of Nations from the “general principles of law and government, and of the different revolutions they have undergone in the different ages and periods of society,” as discussed in his academical lectures, just as he had already split another part from that bulky whole in his earlier Theory of Moral Sentiments. Yet in his economic work he embraced once more, along with the fundamental economic relations, the whole of the new political and social conditions arising from the development of industry, exchange of commodities, and the division of labour within the new bourgeois order of society. Even in the work of Ricardo, in which the classical epoch of Political Economy reaches its close, this “organic” connection between Political Economy and the whole of society is preserved. At the same time, it can be said that the system of Ricardo which, as a true “anatomy” of civil society, formally restricts itself to an ingenious dissection of the material foundations — the skeleton, as it were, of the social body — shows the first symptoms of an impending disintegration. Still more does the subsequent theoretical development of bourgeois economics reveal the inevitable results of the change which during the ensuing period was to strip the bourgeois “production-relations” more and more of their original positive functions as incomparable stimulators and encouragers of the productive forces inherent in the new, industrial society.

This historical process, through which the hitherto progressive forms of the bourgeois production-relations were finally transformed into so many fetters, has since, in spite of temporary interruptions, asserted itself with ever increasing strength. It finds its economic expression in those periodically recurring dislocations of all existing proportions of capitalist production which, since their earliest characteristic occurrence in the first modern economic crisis of the year 1825, have assumed ever greater dimensions and ever more acute forms during the whole of the following century, challenging at their culminating points the whole existence of bourgeois society. There is no need to deal in this connection with the manner in which the curve of “social unrest” during the last hundred years continuously reflected the course of economic development, if not exactly at each point yet in its entire movement. The only point to be discussed here is the difference which prevails between the repercussions on the labour movement of the periodic business cycle, and those more permanent alterations within the whole economic system of modern society which have been described by recent explorers as a “structural change.” While the recurring phases of the “normal” industrial cycle are followed by corresponding ups-and-downs in class warfare, there is no such “cyclical” rhythm discoverable in the underlying secular movement. In spite of the intervening longer periods of an apparently undisturbed upswing and prosperity brought about by the temporary defeats, iron-handed oppression, and effective crushing of all existing workers’ organizations, the proletarian struggle against the existing capitalist order of society has grown from its first elementary beginnings to embrace ever greater numbers, and to assume ever more efficient, more conscious, and more threatening forms. It has become a veritable war between the oppressing and the oppressed classes, a war conducted on many fronts simultaneously, which sometimes breaks out in open revolts. The first World War, 1914-18, and the first wave of the proletarian world revolution released by the war, challenged the very premises on which during the “restful” intervals of this restless development, the bourgeois economists, and in their wake the moderate socialists, had based their “historical refutation of the Marxian prognoses.” The first shock was followed by even stronger charges. The protracted economic crisis and the new series of wars and civil wars terminating the short-lived momentous upswing which had resulted during the 20’s from the first apparent recovery of post-war capitalist equilibrium, reflected once more the utter absence of cohesive forces within the present economic system, and finally refuted the illusions by which the economic optimists had conjured up for themselves a complete abolition of crises in “organized capitalism,” and of all class oppositions and class struggles in the “democratic” or, more recently, in the “totalitarian State.” Even such things as machinery and money, formerly so undoubtedly good and useful, have been robbed of their virtue as forces productive of social wealth and turned into forces destructive of social existence. The political and intellectual superstructure of society follows the change in its material conditions. The democratic forms of the State, the liberal ideas of the ascending phase of capitalist commodity production, have everywhere begun to totter. One after another of the safety-valves of the economic and political system is suspended. Emergency and martial law are the rule of common law. War and civil war on a world-wide scale have become the “normal” form of existence of present-day society.

A minor consequence of this universal destruction of the positive social function of bourgeois production-relations manifests itself in the gradual decay of the encyclopaedic spirit which had been so conspicuous during that earlier period when Political Economy embraced the whole of the social progress of the community. It is only from a formal point of view that Ricardo’s economic system can be regarded as an advance on that of Adam Smith. While Smith had worked out his ideas on an epic scale and, little troubled by logical contradictions, developed the subject matter of Political Economy to a vast totality, Ricardo logically subordinated the whole of the bourgeois system to a unique principle, tracing back all its economic laws to the definition of value in terms of labour-time. The theoretical satisfaction offered in Ricardo’s Principles (and more especially in its first two chapters which, as is demonstrated by Marx, virtually contain the whole book) by their originality, unity of the basic view, simplicity, concentration, profundity, novelty, and pithiness, is purchased at the expense of a loss of substance foreshadowing an impending emaciation. The generality aimed at by Ricardo is only the generality of scientific form; there is nowhere in his work, as there had been in that of Smith, the urge of a wider political aim. Its historical function consisted in summing up the great positive achievements of the classical period of bourgeois economic science and in the formal conclusion of an actually completed epoch.

While thus in Ricardo the turn to formalism was historically necessary and, thereby, theoretically justified, the progressive formalistic anaemia of the later period brought none of the great theoretical advantages of which the sceptics and the cynics of present-day “pure” Economics are so proud. They are so convinced of their superiority over the “unscientific” methods applied by the classical economists that they even accept without demur the reproach that their new theoretical science has become a mere plaything, purged of any political significance and of any possibility of application. Following the example of some modern mathematicians, logicians, and physicists, but without in any other respect keeping pace with the achievements of those real sciences, they want to carry on, in a field which cannot otherwise boast of any particular purity, the business of “pure” science, not for any useful purpose but merely “for the greater glory of God.”

The actual outcome of this later development of Political Economy was a gradual decay. At the same rate as under the impact of the changed conditions of bourgeois production, bourgeois economic theory abandoned its original comprehensive social tendency, it abandoned also its formal scientific qualities, its impartiality, its logic, and fecundity. “From the year 1830 dates the finally decisive crisis.” Henceforth any genuine development of Political Economy was precluded by the real historic development of bourgeois society.

Marxism restored, consciously and on a higher level, the connection between Political Economy and social science which had spontaneously and unconsciously evolved with the bourgeois classicists at an earlier stage. Only for this reason had the science of Political Economy any interest, only thus did it assume its important place in the whole of the Marxian social research. For this reason alone, it appears absurd that so many people should rack their brains to find out why Marx never paid the slightest attention to that “new departure” which, since the middle of the 19th century, is assumed to have been made by an altogether new economic science based on subjective value and the theory of so-called “marginal” utility. Marx did take cognizance of every new word, true or false, which was contributed to any economic question during his lifetime, even by the least important Epigone of classical Political Economy. His adherence to the classicists did not make him neglect the work of another school which, to a certain extent, preceded the theorists of “marginal value” in an attempt to reconstruct economic research by stressing “subjective” value (value in use) rather than classical “objective” value (value in exchange). He did not shrink, though he sighed under the burden, from the task of refuting the many inconsistencies of the leaders of the so-called “kathedersozialistische” school, from Rodbertus to Adolf Wagner. His apparent neglect of the new questions raised by the theorists of marginal utility sprang from an entirely different source. By the very principle of his socio-economic research, Marx was not interested in the thoughts of people who, though still calling their science “Economics,” did not have anything in common with that research into the material foundations of society which had formed had formed the theme of classical Political Economy, any more than he would have been interested in some other auxiliary inquiry into a group of natural and technical facts not particularly important for the historical change of society. An economic doctrine indifferent to its social implications aroused the attention of Marx only when in spite of its purely “theoretical” concern, it afterwards did serve to draw practical application from its purely theoretical contents, and thus, like Duehring’s “socialist” doctrine in the 70’s, found supporters within the ranks of the workers’ movement. This, however, did not take place with the theory of marginal utility until some years after Marx’s death when, in Engels’s phrase, G. B. Shaw and his followers endeavoured to base a plausible kind of “vulgar” socialism upon “Jevons’s and Menger’s use-value and marginal-utility theory,” in order “to build on this rock the Fabian church of the future.” That is why Marx in all his comprehensive criticism of traditional economic theory never considered the theory of marginal utility while, on the other hand, Friedrich Engels, when editing the third volume of Capital, bestowed a critical after-thought upon this newest theoretical attempt, if only in that somewhat curt and deprecatory remark.



Chapter 3

From Political Economy to Marxian Critique of Political Economy

As the revolutionary bourgeoisie had enlightened itself as to the principles of the new industrial society in the new science of Political Economy, so did the proletarian class assert its revolutionary aims in the Critique of Political Economy. This is not a critique of single results of bourgeois economics from within. It is, fundamentally, a critique of the very premises of Political Economy based upon the new standpoint of a social class which, theoretically as well as practically, goes beyond bourgeois economy. It investigates the tendencies inherent in capitalist commodity production which in the course of their further development produce the necessary basis for the economic, political, and ideological struggle of the proletarian class, and which will ultimately overthrow the bourgeois mode of production and advance to the higher production-relations of a socialistic and communistic society.

The Marxian “critique” is not the first appearance of a genuine principle of criticism as a driving force in the development of economic science. Already in the earlier phases of Political Economy the Mercantile system had been criticised by the Physiocrats, the Physiocrats by Adam Smith, and Adam Smith by Ricardo. Nor was that earlier economic criticism a matter of pure theory. Each new phase of the theoretical development implied a new phase in the real historical development of the capitalistic mode of production. There was no clear distinction; in fact, every historical phase was in itself a criticism of the preceding phase. For all that, the actual historical and theoretical “subject” of economic science remained unchanged through all these stages. The bourgeois class in its revolutionary struggle against the obsolete forms of feudal production, could not, and did not, distinguish its particular interests as a class from its general interest in the whole of historical progress. Even after the defeat of feudalism, it could still for a considerable time quite honestly regard itself as promoting the general welfare of society. During this phase Political Economy was even striving to cooperate, with the utmost impartiality, in the solution of the new economic problems emerging from the increasingly unsatisfactory conditions of the real people, that is, the actually working section of the as yet undivided industrial society.

That state of things was profoundly changed by the new historical development which set in with the economic crisis of 1825 and with the great political changes of 1830. Henceforward, the new conditions established within bourgeois society no longer permitted an impartial analysis of the economic principles underlying those conditions. A strictly scientific investigation of social development was possible only from the standpoint of that class whose task in history is to transcend the narrow bourgeois horizon and, ultimately, to do away with classes altogether.

The theoretical system of Ricardo marks the turning point.

The complete impartiality of the genuine scientific investigator which appears everywhere in the work of Ricardo, had seemed miraculous already to his contemporaries. “Mr. Ricardo seemed to have dropped from another planet,” said Lord Brougham. With faultless clarity, this English banker of the beginning of the 19th century, who nowhere goes beyond the boundaries of the bourgeoisie, presented in his system the inherent disharmonies as well as the harmonious and progressive features of the bourgeois mode of production; more particularly he revealed the inevitable opposition arising between the two industrial classes. He declared from the outset that the principal problem in Political Economy is to state the proportions in which the whole produce of society is allotted to each of the three social classes: the proprietors of land, the owners of capital, and the propertyless labourers. Thus “the contrast of class interests, of wages and profits, of profit and rent,” became indeed, as was later stated by Marx, the very “pivot” of Ricardo’s economic investigation.

The position of Ricardo in the history of economic science is precisely analogous to that occupied by Hegel in philosophical thought, just as in a preceding phase the economics of Adam Smith had corresponded to the philosophy of Kant. This analogous historical position appears most clearly in Ricardo’s important contribution to what we have described in an earlier chapter as the “bourgeois self-criticism.” The scientific criticism of the existing capitalistic system, which pervades the economic system of Ricardo, surpasses the occasional comments of the earlier economists on the unpleasant sides of the new bourgeois conditions even more than the earlier philosophical critics had been surpassed by Hegel. While in dealing with Hegel we had to disregard the mystifying form of his statements in order to find out his realistic advance on his predecessors, the superiority of Ricardo’s criticism over that of his forerunners is clear like day. His critical statements not only surpass all previous criticism in their sweeping power of generalization and in the irresistible logic of their reasoning. A more decisive difference appears in their very premises, namely, in the fact that they rest no longer on that naïve faith in the fundamental perfection or the unlimited perfectibility of the new world order, which had prevailed among the economists of the preceding period quite as much as among the philosophers.

Political Economy in its first period had been optimistic and confident to the extent that along with the blessings of the new bourgeois mode of production it could afford to acknowledge their purchase price. “Not for a single moment did it deceive itself as to the birth pains of wealth, but what is the use of crying over historical necessity?” Even for Adam Smith it had still been fairly easy, in his great inquiry into the best possible ways to raise the general wealth of society, to regard the interests of the “inferior order” of the wage-labourers as well as those of the two “superior orders” (profit and rent). He had even endeavoured to oppose the tendency of the newly arrived bourgeoisie to monopolize for itself the advantages won in a common battle and to bring definitely to the front the neglected interests of the common man. He did not thereby endanger, but rather tightened the apparent unity of the two industrial classes which were at that time still busy conquering the last surviving prerogatives of the landed aristocracy. A different situation was faced by Ricardo when in a supplementary chapter added to the third edition of his Principles he did not uphold the favourable view on the effects of machinery which he had expressed in the preceding chapters of his work but which in the meantime had been proved to him by Sismondi to be erroneous both in fact and in theory. While he had then emphasized the “general good” which must of necessity be brought about by “these mute agents which are always the produce of much less labour than that which they displace,” he now carefully re-examined his earlier position. A more realistic consideration of the “influence of machinery on the interests of the different classes of society” led him to the conclusion that

the opinion entertained by the labouring class, that the employment of machinery is frequently detrimental to their interests, is not founded on prejudice and error, but is conformable to the correct principles of Political Economy.

No wonder that the later pseudoscientific apologists of capitalism should denounce him on this count as the Father of Communism. Said a leading American economist in 1848:

The system of Mr. Ricardo is one of discord . . . it tends to foster enmity between classes and nations . . . His book is the right textbook for the demagogue who aims at power through agrarianism, war, and plunder.

All post-Ricardian developments of Political Economy testify to the fact that the historical struggle waged between the progressive industrial class and the obstructive forces of feudal oppression had now been finally superseded by a new revolutionary conflict arising within bourgeois society between the two hitherto united classes produced by modern industry itself — bourgeoisie and proletariat.

The first of the various schools to work out the scientific results of classical Political Economy under the changed historical conditions of the 19th century sprang up immediately after Ricardo’s death. From this school started the attempt with which we have dealt above, to use the Ricardian theory as a weapon against the existing economic system of society and thus to derive anti-bourgeois conclusions from bourgeois principles. But in the main the spokesmen of this new school contented themselves with celebrating the victory of the Ricardian principles over all pre-Ricardian economics in a series of splendid tournaments which were for the most part displayed in scattered review-articles, occasional papers, and pamphlets and were, after long oblivion, rediscovered and recognized in their historical importance, mainly by the endeavours of Marx. This last polemical intermezzo preceding the final collapse of the fighting spirit in bourgeois economic theory — a skirmish resembling, as Marx said, the “Sturm und Drang” period of economic science that had raged in France after Dr. Quesnay’s death, but not more than “Indian summer reminds us of the spring” — covered roughly the decade 1820 to 1830. After that it dragged on in ever weaker manifestations to the Repeal of the Corn Laws in England in 1846 and to the outbreak of a new revolution on the continent in 1848-49.

Another tendency of post-Ricardian economics is represented by a school of pseudoscientific writers who flattened, diluted, and gradually entirely dispersed the theoretical results reaped from the work of classical economists. The theoretical contents of the prolific writings of this school are most aptly, if somewhat cruelly, described by Marx as a mere “vulgarization” of the scientific achievements of Political Economy. The “vulgar” successors of the great classical economists have, indeed, not added any new contribution to that genuine work of discovery by which their scientific predecessors had discerned the inner relations of the modern bourgeois mode of production and thus brought forward the necessary premises for its genetic presentation. Scientific analysis was everywhere replaced by mere conceptual reflection. That simple reproduction of the given external conditions, which for the classicists had been merely one of the constituents of their theory — its “vulgar” element — was now finally set up as a separate existence. Yet this was not the lowest point reached in the gradual decay of a formerly vigorous and vital science. A still more complete loss of scientific character was seen, when later, along with the further development of the real oppositions inherent in the life of bourgeois society, economic science itself split in mutually opposing parts. Bourgeois economists, when no longer confronted with their own internal dissensions, but with a group of socialistic dissenters opposing them from without, promptly threw over all semblance of unbiassed theoretical research. From a mere neglect of the progressive tasks of true science, they turned to a conscious defence of existing bourgeois conditions against the impending socialistic menace embodied in the writings of Sismondi, Owen, Fourier, Saint-Simon. The more the stern outlines of the class strife asserted themselves in the actual development of capitalist society, the more the economists applied themselves to a misrepresentation and, ultimately, to an entire negation of these new historical tendencies. At each further step in the unavoidable development of “class” and “class discord” within reality, they strengthened their desperate efforts to keep these embarrassing topics entirely out of their theoretical picture. They even endeavoured to purge the classical concepts of any such impurities wherever they had already been introduced into economic theory by their great scientific predecessors. Thus bourgeois economists became even incapable of a faithful registration of external facts. By the combined effect of all these self-established obstructions, the “vulgarized” economic theory of the 19th century became poorer and poorer in theoretical content. There is, however, a difference between the earlier stage when, for instance, Say had “vulgarized” Adam Smith, and the latter stage when MacCulloch, Bastiat, and others had “vulgarized” Ricardo. In the earlier phase the “vulgarizers” had found their material as yet unfinished, and thus had been compelled to contribute, though in a diminishing degree, to the solving of real economic problems. In the later phase they dropped all independent theoretical effort and occupied themselves with a mere plagiarizing of the doctrines of Ricardo and with an arguing away of the unpleasant aspects.

The deductions which the socialist Ricardians had been unable to draw, and which the “vulgar” economists had deliberately dodged, were formulated fifty years later by a new school of economic research. The true conclusions of classical Political Economy were drawn by Marx. The “critical” tradition of the classical epoch of Political Economy was revived by the Marxian “Critique” of Political Economy in Capital. This new criticism, however, was more than a transition from a given phase to a further developed phase of economic science. It implied a change of the class which henceforth was to be the historical as well as the theoretical “subject” of all Political Economy. While previous criticisms had for their practical aim a further “development” of the bourgeois mode of production, the Marxian criticism aims at its complete overthrow. “Critique” of Political Economy, then, is the theory of an impending revolution.

Not only Marx and Engels, but all revolutionary Hegelians of the 40’s and 50’s of the last century, had used the word “critique” in this large historical sense. The terminology fell into complete oblivion during the sad period of decline which set in after the collapse of the Chartist movement and the triumph of the counter-revolution in the whole of Europe consequent upon the defeat of the Paris proletariat in June, 1848. Thus a complete abandonment of all revolutionary “critical” tendencies in theory coincided with the abandonment of the last residues of a practical revolutionary tendency. Marx and Engels were the only ones who rescued from oblivion both the practical and the theoretical aspects of a truly revolutionary “critique.”



Chapter 4

Scientific versus Philosophical Criticism of Political Economy

Marx’s approach to Political Economy was from the outset that of a critical and revolutionary student of society rather than that of an economist. Yet a long period was still required before, from the first discovery of Political Economy as an “anatomy of civil society” through a series of intermediate phases, he arrived at his final scientific and materialistic investigation and critique of the whole complex of ideas and facts constituting the historical existence of “Political Economy.”

Marx was already an outspoken revolutionary and even a proletarian socialist at the time when he regarded a really developed “Political Economy” as it existed in England and France as being in itself revolutionary progress, and practically identified the aims of Political Economy with the aims of socialism. He contrasted this modern form of relating industry to the State, or the “world of wealth” to the “world of politics,” with the reactionary form in which that “main problem of modern times” had then begun to occupy the attention of the Germans. “While the problem in France and England is worded Political Economy, or wealth controlled by society, in Germany it is termed National Economy, or nationality controlled by private property.” If we apply to Marx the terms which he, but a short time later, was to apply to a similar standpoint, we may say that during this short first period Marx had criticized politics only from the standpoint of economics, but had not yet extended his revolutionary criticism to the economic basis itself; or that up to now he had merely “criticized Political Economy from the standpoint of Political Economy.”

By the time when he had raised this objection to his first socialist antagonist, Proudhon, Marx himself had adopted an altogether different standpoint which utterly transcended all economic science in an apparently final manner. His economico-philosophical manuscripts dating from this second period, and the economic fragments inserted in a mainly philosophical work written at the same time, anticipated all the critical and revolutionary conclusions which were later embodied in Capital. Yet this new critical insight was couched in a highly philosophical language and appeared much more as a materialistic continuation of the old philosophical struggles among the different Hegelian schools than as a scientific criticism of the contents and premises of Political Economy. Instead of dealing directly with the theories and concepts of the great classical economists, Marx dealt rather with the idealistic, that is, insufficient reconstruction and criticism which these concepts had in the meantime found in the philosophy of Hegel and of the right and left Hegelians of the 1830’s and 40’s. For example, he disposed of the socio-economic phenomenon which he was later to solve in a rational way in his critical exposure of the “Fetishism of Commodities,” by a reference to the then most fashionable Hegelian term of “human self-alienation.” He summed up his criticism of Proudhon in the sentence: “Proudhon conquers economic alienation only within the bounds of economic alienation.” In the same manner his criticism of other fundamental economic phenomena started from the assumption that “Hegel takes the position of modern Political Economy” and that, therefore, a materialistic exposure of the idealistic shortcomings of Hegel’s philosophical criticism of the economic terms is equivalent to a final refutation of Political Economy itself.

Marx began to free himself from the remaining vestiges of his former philosophical creed by a comprehensive criticism of all post-Hegelian philosophy. In this he was joined by Engels. As a first result of their life-long cooperation, which after some more or less frustrated earlier attempts was now really beginning, Marx and Engels during the next two years worked out in detail the contrast prevailing between their own materialistic and scientific views and the various ideological standpoints represented by their former friends among the left Hegelians (Feuerbach, Bruno Bauer, Stirner) and by the philosophical belles-lettres of the “German” or “true” socialists. Thus, they finally broke with what Marx later called their “former philosophical conscience.” From this thoroughly changed standpoint Marx now cruelly criticized the somewhat bewildering manner in which his former philosophical criticism of Political Economy in the meantime had been further worked out by Proudhon. He showed that Proudhon did not treat the economic categories as theoretical expressions of historical conditions, corresponding to a definite stage in the development of material production, but as “pre-existing eternal ideas,” and thus ultimately fell back on the standpoint of bourgeois economics. Such criticism of Proudhon’s philosophical mystification of economic concepts was undoubtedly justified. But Marx’s new anti-philosophical tendency was now so strong that, instead of supplanting Proudhon’s bad philosophy by a better and more scientific criticism of Political Economy, he rather confronted Proudhon’s unscientific criticism with the science of Political Economy itself, i.e., with Ricardo’s theory of value. Thus he no longer reproached Proudhon for not having passed critically beyond the narrow bounds of economic science. He now reproached him for sharing, as an economist, the “illusions of speculative philosophy” and for not yet having entered the realm of a really scientific Political Economy.

Only with the next stage of this long and somewhat circuitous development do we reach the period, during which Marx finally worked out his own critical economic theory which is, at the same time, the basic part of his materialistic theory of the historical development of society and of the proletarian revolution. The first mature fruit of this new stage is contained in the masterly lectures which Marx delivered to the German Workers’ Educational Association at Brussels in 1847 and later published, in a revised form, in his own revolutionary paper during the 1848 revolution. Outline and contents reveal that we have here the first fragmentary statement of that comprehensive exposition of the “economic conditions underlying all present-day class wars and national struggles,” which, later, after being further worked out and many times entirely recast was to appear as Das Kapital. The most conspicuous difference is that Marx in the earlier work does not yet start from the analysis of “commodities” in general but from a particular kind of commodity — wage-labour, and from the opposition between the two main classes of modern capitalistic society which directly springs from the appearance of that commodity. We find, moreover, in this first scientific exposition the striking description (pivotal for all subsequent developments and unsurpassed, in trenchant power, even by Marx’s own later formulae) of “capital” itself, which is defined as not being a relation between men and nature, but as a relation between man and men based on a relation between man and nature — a specific historic form of a social relation arising and decaying with the rise and decay of modern industrial or “capitalistic society.”

The working out of this first scientific exposition of Marx’s revolutionary criticism of Political Economy was interrupted by the outbreak of the February Revolution, just as in a later period of world history, Lenin’s presentation of “The Marxian Doctrine of the State and the Task of the Proletariat in the Revolution” was interrupted by a situation calling for the performance of that very task.

After the final defeat of the abortive European revolution of 1848-49, Marx made the most of the long years of involuntary leisure which were forced upon him as an exile in London, by making “an entirely fresh start” in his economic studies. The ultimate form of his materialistic theory, which resulted from that new and prolonged period of economic and social research, is at the same time Political Economy and a criticism of Political Economy. It works out the classical system of bourgeois economy and ultimately transcends all phases and forms of bourgeois economy. It shows the most general ideas and principles of Political Economy to be mere fetishes disguising actual social relations, prevailing between individuals and classes within a definite historical epoch of the socio-economic formation.



Chapter 5

Two Aspects of Revolutionary Materialism in Marx’s Economic Theory

There appears in the successive phases of Marx’s theory, besides the main line of a continuous growth of the critical revolutionary standpoint, another line of development which, to a certain extent, runs contrary to the first. Hand in hand with increasing stress on a strictly materialistic and scientific approach, goes a greater emphasis on economic theory itself, as against a mere critical attack on its philosophical, historical, and practical premises. It seems as if Marx during the further study of the vast unexhausted material accumulated during the classical epoch of Political Economy that he found heaped up in the vaults of the British Museum, was more and more strongly impressed by the lasting significance which the scientific results of classical Political Economy were bound to have for the new revolutionary class, for a really materialistic theory of bourgeois society, and for a practicable way to its revolutionary overthrow. Just as the tremendous depression and stagnation following the defeat of the Paris workers in 1848 had imposed upon the materialistic investigator a long period of leisure for his ever-expanding, ever-deepening economic studies, so at the same time many revolutionary impulses within the actual workers’ movement were forcibly repressed in their genuine practical function. A new stage of development seemed to be opened for Capitalism with the discoveries of gold in California and Australia — discoveries which attracted the most active members of the working class and thus further paralyzed even the faintest attempts at recovery within the European revolutionary movement. All those historical changes were reflected in the later development of Marx’s revolutionary theory. The social revolution of the proletariat was now mainly represented as a necessary development of society, during which capitalistic production by the working of an inevitable economic law brings forth its negation with the inexorability of a natural process. He did not for this reason commit himself to the so-called fatalist tendency “discovered” over and over again in some of Marx’s phrases by the later bourgeois critics and by their supporters within the labour movement. A closer investigation reveals that even in that gloomiest period, both of the proletarian movement and of his own career, Marx kept himself far away from any fatalism. Still, it is a definitely changed pattern of revolutionary action which was henceforward sketched out by the materialistic theory for the historical movement of the workers’ class. The question as to whether that change resulted in a strengthening or a weakening of the revolutionary movement can only be answered by taking into account the historical circumstances prevailing at the time, or rather, through the entire historical period. We merely note that the new phase of Marx’s revolutionary science and the increased importance which was now assigned to economic theory within its frame, arose from a particular historical situation and suggested a form of behaviour adapted to that particular situation. Marx’s materialistic theory, grounded on firm economic foundations, seemed to point out a new way to the workers, who had now passed the period of their first Utopian enthusiasm and spontaneous aggressive activity. Though this new way might not ensure a quick and easy advance to victory, nor even a direct approach to decisive battles, yet in comparison with the meagre chances of the earlier period, it afforded a distinctly better opportunity, nay even a practical certainty of success.

This element of disillusionment and dearly-bought sobriety which is inherent in the later phases of Marx’s “materialism” and is largely responsible for the tremendous effect which Marxism was to exert upon the workers’ movement during the ensuing historical period, was produced by the historical conditions of the 50’s. It is, at the same time, both historically and theoretically connected with another and much more general chain of historical events. The proletarian revolution of the 19th century, which so far had found its most powerful and most conspicuous theoretical expression in the revolutionary materialism of Marx, appears, under a secular aspect, as being itself a mere second phase within the whole of the modern revolutionary movement. Thus it shares, to a certain extent, the more general “disenchantment” which after the conclusion of the great French Revolution was first proclaimed by the early French theorists of the counter-revolution and Romanticists. This idea of disenchantment has, in fact, exerted a considerable influence upon Marx mainly through Hegel, and has thus directly entered into the “materialistic” Marxian theory of the modern workers’ movement. Nay, more, we may go still further back and find within the materialistic theory of the proletarian revolution some traces of the revolutionary tradition of the Jacobinic Convention of 1792-94. This particular phase of the French revolution which was afterwards exalted over and over again by Marx, Engels, and Lenin as a model of the highest political sagacity and energy, had, likewise, been a “second” and sobered phase in contrast to the exuberant and illusionary phase of 1789-92.

On all these grounds the Marxian materialistic and economic theory bears the specific characteristics of a theory of the second phase of the proletarian revolution, and has actually made its first entrance in all countries where it became the dominant revolutionary theory at the very time when an analogous historical situation had arisen in that particular country. Even in Russia, where revolutionary Marxism was to make world history by a first great victory of its principle, similar historical circumstances accompanied its reception. The revolutionary social democratic, i.e., “Marxist,” principle was inaugurated in Russia since 1883, according to the testimony of the best authority on the subject, mainly by a pamphlet of Plechanov which, under the heading Socialism and Political Struggle, endeavoured to “open up a new way for the defeated revolutionary movement through which it could secure for its cause a certain, if not immediate, victory.” Instead of following by a conscious and violent action the model set by the preceding generation of Russian revolutionaries, it was to rely on the socio-economic process of development which would “slowly but unavoidably undermine the old régime” and through which the Russian working class “in an historical development proceeding just as inexorably as the development of capitalism itself,” would finally “deal the death blow to Russian absolutism” and would then “join, as an equal member, the ranks of the international proletarian army.”

In a similar way, Marx and Engels themselves upon several occasions expressed the idea that the different degrees of “maturity,” or the preparedness of the workers’ movement in various capitalistic countries to accept the Marxian materialistic theory, more or less depended upon the experience gained by each section of the workers concerned during a preceding phase of Utopian illusions and immediate revolutionary attempts. This assumption of two definite phases, one “Utopian,” the other “scientific,” through which every modern labour movement must pass in its historical development, was finally stated by Friedrich Engels in his well-known pamphlet on The development of Socialism from a Utopia to a Science. Since its first appearance in France, in 1880, this pamphlet was spread under this and under various other titles in large editions throughout the world and became as significant for the various Social-Democratic Movements preceding the World War, as have been, for other historical phases of the modern workers’ movement, The Communist Manifesto of 1848, Marx’s Address and Rules of the Working Men’s International Association of 1864, and Lenin’s pamphlet on State and Revolution of 1917.

Whatever the reasons, there is no doubt that Marx, during his later development, linked himself more and more closely with the scientific results of classical Political Economy. The Marxian “Critique” as contained in the second and third books of Capital (which after his death were edited by Engels), and even in the first book edited by Marx himself, not infrequently gives the unwary reader the impression of being no longer directed against the whole of the preceding bourgeois economic science, but only against those superficial and apologetic forms into which the truly scientific statements and concepts of the great classical thinkers had degenerated with the post-classical or “vulgar” economists. Yet this is by no means the real significance of Marx’s economic and social theory. It is easy to clear up some ambiguous statements by reference to those sections of the first Chapter of Capital in which Marx stated with the utmost precision the difference between his critical economic theory and the doctrines presented by even the greatest and most advanced thinkers of the classical epoch of bourgeois Political Economy.



Chapter 6

Economic Theory of Capital

In our presentation of the economic theory of Capital, we shall confine ourselves to one or two results of the Marxian teaching, extremely abstract in appearance, which include, in our opinion, the revolutionary kernel of the Marxian theory and thus constitutes its fundamental and epoch-making importance. It is this, in fact, which explains why the teaching of Marx has gained and retained, for almost a century, the active support of millions of revolutionary workers in all parts of the world, and which even today forces from the most bitter opponents of the proletarian class movement an unwilling tribute, in that they announce as the aim of their reactionary and counter-revolutionary endeavours — War against Marxism.

Marx himself, in a letter which he wrote to Engels soon after the appearance of Capital, designated as the “three fundamentally new elements” of his book, the following:

(1) that in contrast to all earlier economics which from the outset had dealt with the detached fragments of surplus value in their fixed forms of Rent, Profit, Interest, as given entities, he first treated the general form of Surplus Value, in which all those elements are still comprehended in an undivided unity like the uncrystallized components in a chemical solution;

(2) that, without exception, economists had missed the simple fact that if a commodity is the sum of the “value in use” and the “value in exchange,” the labour entailed in the production of the commodity must possess the same twofold character, while the mere analysis for “labour sans phrase,” as in Smith, Ricardo, etc., must inevitably stumble upon something inexplicable. This is indeed the whole secret of the critical conception;

(3) that for the first time wages are shown to be an irrational manifestation of some other relation hidden behind them.

All these innovations are of decisive importance with regard to the ultimate aim of the Marxist theory, the critical transformation of economics into a direct historical and social science dealing with the development of material production and of the class struggle. That goal, however, is not reached by an immediate disintegration of economics as a particular form of knowledge but by a further theoretical development which brings into relief the inherent contradiction between the economic categories and principles and the actual facts which had hitherto been presented in their guise. While Marx seems merely to proceed with the work begun by the great bourgeois economists, his further development of their theories is guided in every case by a definite critical purpose. A more refined, more comprehensive, more thorough, and more consistent analysis serves to advance the traditional economic concepts and theorems to that point where the practical reality behind them, i.e., their historical and social contents become tangible and subject to a critical attack.

Thus the Marxian definition of value in terms of labour differs from the classical definition not by its conceptual form but rather by a closer connection with the underlying social conditions. Similarly, the advance made by the famous Marxian doctrine of surplus value, as stated by Marx himself, is new only because of the more comprehensive synthesis, by which he reduced to a common denominator the various phenomena of profit, interest, and rent as described by the classical economists. Nor does the new Marxian definition of wages, not as the “price of labour” but as the price of labour-power, amount to a major scientific discovery since the best classic writers, and, indeed, Marx himself in his earlier period had already applied the former term in exactly the same sense which was later more fully expressed by the more elaborate description. Both these apparent technicalities and, in fact, the whole of the Marxian improvements upon classical economic theory are important, not for their purely formal advance over the classical concepts, but for their definite transfer of economic thought from the field of the exchange of commodities and of the legal and moral conceptions of “right” and “wrong” originating therein to the field of material production taken in its full social significance. For example, the economic concept of a surplus value existing in the form of goods and money and competed for by its rival claimants is now transformed into the concept of a surplus labour performed by the real workers in the workshop under the social domination exerted upon them by the capitalist owner of the workshop. Furthermore, the “free labour contract” of the modern wage labourer is, by an apparent change of terminology only, now revealed as a real sale of the labour-power of the wage-labourer to the capitalist in return for wages, and thus as a social oppression and exploitation of the labouring class persisting within an assumedly “free” and democratically ruled society.

Marx begins the further theoretical development of the economic categories at the point where classical political economists had ended, i.e., with an analysis of “value” based on the distinction of a “value in use” and “value in exchange,” and with the reduction of “value” to “labour.” These two scientific discoveries of the last stage of bourgeois classical economics, of which, as they were then represented, the one was bound to remain entirely sterile, and the other led only to a one-sided and formalistic further development, were used by Marx to work out his new concept of “commodity-producing labour” which was henceforth to serve as a pivot for a new understanding of the whole conceptual system of Political Economy.

The distinction between use-value and exchange-value, in the abstract form in which it had been made by the bourgeois economists, (and had, in fact, already been applied by Aristotle to the commodity production of Antique Society) did not provide any useful starting-point for a materialistic investigation of bourgeois commodity production as a particular social form. It was insufficient also for theoretical reasons. The concept of use value was only perfunctorily mentioned by them as a presupposition of exchange value, and exchange value alone was treated as a real economic category.

With Marx, as we have seen in a former chapter, use value is not defined as a use value in general, but as the use value of a commodity. This use value inherent in the commodities produced in modern capitalistic society is, however, not merely an extra-economic presupposition of their “value.” It is an element of the value, and itself is an economic category. The mere fact that a thing has utility for any human being, does not yet give us the economic definition of value. Not until the thing has social utility (i.e., utility “for other persons”) does the economic definition of use value apply.

Just as the use value of the commodity is economically defined as a “social use value” (use value “for others”), so is the specifically useful labour which goes into the production of this commodity defined economically as a “social labour” (labour “for others”). Thus, Marx’s “commodity-producing labour” appears as a social labour in a twofold sense. It has, in common with labour in other stages of the historical development of production, the general social character of being a “specifically useful labour,” which goes to the production of a definite kind of social use value. It has, on the other hand, the specific historical character of being a “generally social labour,” which goes to the production of a definite quantity of exchange value. The capacity of social labour to produce definite things useful to human beings (a general condition of the Circulation of Matter going on between Man and Nature) appears in the use value of its product. Its capacity for the production of a value and a surplus value for the capitalist (a particular characteristic of labour which derives from the particular form of the social organization of the labour process under the conditions of the capitalistic mode of production within the present historical epoch) appears in the exchange value of its product. The fusion of the two social characteristics of commodity-producing labour appears in the “value form” of the product of labour, or the “form of commodity.”

Only thus critically modified, is the theory of labour value a suitable starting-point for an economic theory in which labour is considered not merely formally and in one of its aspects but in its full material realization. The earlier bourgeois economists when speaking of labour as a source of wealth, had likewise thought of “labour” in terms of the various forms of real work, though they did so only for the reason that their economic categories were as yet undeveloped, and still in the process of separation from their original material contents, vague and indeterminate. Thus, the Mercantilists, the Physiocrats, etc., successfully declared the true source of wealth to lie in the labour expended in the export industries, trade and shipping, in agricultural labour, etc. Even with Adam Smith, who from the different branches of labour definitely advanced to the general form of commodity-producing labour, we find that concrete aspect retained, along with the new and more formalistic definition which is also expressed in his system and was later to become the exclusive definition of value in the work of Ricardo, and by which labour is defined as an abstract and merely quantitative entity. This same abstract form of labour, which he correctly defined as exchange-value producing labour, he at the same time, irrationally enough, declared to be the only source not only of value (exchange value) but also of the material wealth of the community, or use value.

This doctrine which still obstinately persists in “vulgar” socialism, and which is unjustly imputed to scientific socialism by its bourgeois critics, is according to Marx economically false. In so far as “labour” is regarded in its specific character as useful labour, and, in the same way, “wealth” its material form as an object of utility, labour is not the only source of wealth. (If this were so, it would be difficult to explain why in present-day capitalistic society just those persons are poor who hitherto have had that unique source of wealth at their exclusive disposal, and even more difficult to account for the fact that they remain unemployed and poor, instead of producing wealth by their labour.) But it is just here, in the very inconsistency of his economic theory, that a remembrance of the concrete reality of human labour lingers in the mind of Adam Smith. In praising the creative power of “labour” he was not thinking so much of the forced labour of the modern wage-labourer, which appears in the value of the commodities and produces capitalistic profit, as of the general natural necessity of human labour, which produces things useful and beautiful. Likewise, his naïve glorification of the “division of labour” achieved in these “great manufactures,” by which he understood the whole of modern capitalist production, does not so much refer to the extremely imperfect form of present-day capitalistic division of labour (arising through commodity production and exchange) as to the general form of human labour vaguely fused with it in his theoretical exposition. “Adam Smith’s contradictions,” said Marx later, “are significant in so far as they contain problems which he indeed does not solve, but which he reveals just by contradicting himself.”

In the further development from Smith to Ricardo, Political Economy becomes more consistent — and one-sided. Even now, bourgeois economists do not deny that there are two characters inherent in the commodity, use value and exchange value. But they deal only with “value of exchange” as the true economic value. While immersed in their “economic” definition of “value” in terms of labour, they appear to have quite lost sight of the other aspect of labour which had, at least unconsciously, been taken into consideration by the older economists, that is, of labour as a specifically useful activity, which brings forth as its product a definitely useful object (a use value). “Political Economy,” said Marx, “nowhere explicitly and consciously distinguishes between labour represented in value and the same labour so far as it is represented in the use value of its product.”

Marx has reintroduced in a new form real, concrete labour into Political Economy. He deals with “labour” not in the indefinite, ambiguous, and vacillating form as it had appeared in the writings of the older bourgeois economists; not as the labour of the commodity-producer, or as the materially and formally free labour of the independent master craftsman, who had control over his own material means of production, and who exchanged the product of his labour in the form of a commodity for another kind of commodity, or the product of another form of an equally free and independent labour. Marx deals with labour in its present unambiguous, and definite, form of labour producing a commodity for another person, i.e., of labour formally paid to its full value but actually exploited; formally free, actually enslaved; formally the independent labour of an isolated worker, actually collective labour performed by proletarian wage-labourers who are separated from the material means of production and to whom their own tools and the social character of their own labour — that is, the productive power of what would be under otherwise similar conditions the produce of an isolated worker, now increased a thousandfold by the social division of labour — stand opposed in the form of capital. Political Economy is now no longer a science of commodities, and a science of labour only indirectly, and in an abstract and one-sided manner. It becomes a direct science of social labour, of the productive forces of that labour, of their development and afterwards their enslavement by the fixed forms of the production-relations prevailing in present-day bourgeois society and, finally, of the emancipation of the productive forces in present society by the revolutionary action of the proletarian class. A glance at the first volume of Marx’s Capital will suffice to convince us of the completely changed character of this science of economics.

From the very beginning the meticulous analysis of the most general economic categories (“Commodity,” “Money,” and “Transformation of Money into Capital”) in the first chapters of Marx’s work, adheres only in appearance to “that turbulent sphere of the exchange of commodities which is taking place on the surface of commodity-producing society, open and visible to all.” In truth, from the opening sentence to the final conclusion, the Marxian analysis serves to make us look through those highly abstract and sophisticated categories of the bourgeois economists, to disclose their “fetish character,” and to demonstrate the specific social character of bourgeois commodity production lying behind them. It becomes highly transparent while dealing, in its later parts, with the sale and purchase of a commodity of a very special composition, labour-power. It finally passes from the realm of commodity-exchange into another sphere entirely, the “hidden haunts of production, on whose threshold we are faced with the inscription: No admittance except on business.” From now on the labour process, or what is according to Marx but another name for the same thing, the process of material production, both in its material and historical aspects, constitutes the subject matter of the economic theory of Capital. That applies not only to chapters 5, 8, 11, 12, 13, etc., which are especially devoted to the analysis of labour and, which, quantitatively, make up half of the first volume but, as revealed by a closer examination, to the whole book. Just as Leviathan is but the nominal title of Hobbes’s political work, so Capital is only nominally the subject of Marx’s new economic theory. Its real theme is labour both in its present-day economic form of subjugation by capital and in its development, through the revolutionary struggle of the proletariat, to a new directly social and socialist condition.



Chapter 7

The Fetishism of Commodities

Political Economy, which considered bourgeois commodity production as the final achievement, valid for all time, of a rational and natural system of economic order, had reduced all economic concepts to value, and all economic laws to the law of value. It had defined the exchange value of commodities which appears in the purchase and sale of the products of labour as a given “quantity of value,” independent of the particular kind of utility or “use value” of the several commodities, and dependent only on the labour-time expended on their production. Notwithstanding an often conflicting outside appearance it adhered to the essential truth of this definition.

Bourgeois economics did not, however, get beyond that formal concept. Even the best and most consistent among its exponents who were fully aware of its objective economic contents and had not mistaken “value” for an arbitrary term (as superficial thinkers had done even then), had taken the circumstance that relative quantities of labour are represented in the value-relations of its products, and thus labour in value, as an evident fact not requiring any further investigation.

A further generalization of the categories which had been regarded by bourgeois economists as the ultimate generalization of their science became possible only when the narrow horizon of bourgeois economic science was left behind by a new scientific advance, which was based on the changed viewpoint of the revolutionary proletarian class. According to Marx, the most general category within the realm of economics is no longer “value” or the “quantity of value,” but the value form of the product of labour or the form of commodity itself.

Even this fundamental form of the bourgeois mode of production is a “general form” only from the standpoint of a merely “economic” science (and it represents, indeed, an extreme limit of the generalization which is possible from that restricted standpoint). It is at the same time, from the more advanced viewpoint of the Marxian Critique of Political Economy, on the contrary, a specific mark by which the bourgeois mode of production is distinguished from other historical forms as a particular form of social production. The transition from the one concept to the other, which is implied in the whole of Marx’s economic work, is explicitly made in that final paragraph of the first chapter of the first volume of Capital, so important for the stand taken by Marx against all bourgeois economics, which bears the rather mysterious title of The Fetish-character of the Commodity and its Secret.

The “fetish-character” of the commodity, reduced to its simplest form, consists in the fact that man’s handiwork assumes a peculiar quality which influences in a fundamental way the actual behaviour of the persons concerned. It does not wield that remarkable power (as the earlier economists had believed) by an eternal law of nature, yet it is endowed with such power under the particular social conditions prevailing in the present epoch of society. Whence arises this mysterious character of external things which is described by political economists as their “value,” and which attaches itself to the products of labour as soon as they are no longer produced directly for use but for sale as “commodities”? The value of a commodity does not arise either from its physical qualities or from its specific utility, nor even from any specific qualities belonging to the labour involved in its production. The value relations appearing in the exchange of the products of labour as “commodities” are essentially not relations between things, but merely an imaginary expression of an underlying social relation between the human beings who cooperate in their production. Bourgeois society is just that particular form of the social life of man in which the most basic relations established between human beings in the social production of their lives become known to them only after the event, and even then only in the reversed form of relations between things. By depending in their conscious actions upon such imaginary concepts, the members of modern “civilized” society are really, like the savage by his fetish, controlled by the work of their hands. Commodities and, in a still more conspicuous form, the particular kind of commodity which serves as a general medium of exchange, namely, money, and all further forms of capitalistic commodity production derived from those basic forms, such as capital, wage-labour, etc., are examples of that fetish form assumed by the social production-relations of the present epoch. What Marx here terms the Fetishism of the World of Commodities is only a scientific expression for the same thing that he had described earlier, in his Hegel-Feuerbach period, as “human self-alienation” and which had, indeed, formed the real foundation for this particular calamity which befalls the Hegelian “idea” at a definite stage of its speculative development.

Marx had, however, emphasized as early as this, the real economic and social facts underlying that Hegelian philosophical term. Much more clearly than Feuerbach and the other philosophizing Hegelians he had recognized that the various forms in which that philosophical category enters into present-day society — as “property, capital, money, wage-labour, etc.” are by no means a kind of self-created “idealistic figment of our imagination.” On the contrary, all those “alienated forms” actually exist in present society as “very practical, very material things.” For example, the fact that one of the worst cases of that “self-alienation of humanity” appears in present-day bourgeois society as the contrast of the haves and the have-nots is by no means the outcome of a mere conceptual or spiritual process. “Not having is the most desperate spiritualism, an entire negation of the reality of the human being, a very positive having, a having of hunger, of cold, of sickness, of crimes, of debasement, of imbecility, of all forms of inhumanity and abnormality.” And in striking contrast to the “idealistic” dialectics of Hegel who had endeavoured to annihilate the existing self-alienation of man in society merely by an imaginary philosophical annihilation of the objective form, in which it is reflected within the human mind, Marx denounced the utter insufficiency of a mere effort of thought to handle the real forms of that self-alienation which exist in the present-day bourgeois order of society and of which the “alienated” concepts of the bourgeois economists are only an outward expression. It is, for this purpose, above all necessary to abolish, by the practical effort of a social act, its underlying real conditions. Marx had also called by name the social force which was to perform that revolutionary action: “the communist workers in the workshops of Manchester and Lyons” and the “associations” founded by them.

The later Marxian criticism of the “fetish-character” inherent in the commodity “labour-power” and, indeed, in all “economic” categories differs from that earlier criticism of the economic “self-alienation” mainly by its scientific and no more philosophical form.

Modern capitalistic production both historically and theoretically rests on the separation of the real producers from their material means of production. Thus it is but a juridical illusion that the workers either as individuals or as members of an amalgamated group of labour-power owners freely dispose of their property. The common assumptions underlying the “fetishistic” concept of an individual, and even of a collective, “bargaining” with regard to the commodity “labour power” are still derived entirely from the dreamland of the free and equal individuals united within a self-governed society. The propertyless wage labourers selling through a “free labour contract,” their individual labour powers for a certain time to a capitalistic “entrepreneur” are, as a class, from the outset and for ever a common property of the possessing class which alone has the real means of labour at its disposal.

It is, therefore, only one part of the truth that was revealed by Marx in the Communist Manifesto when he said that the bourgeoisie had “resolved personal worth into exchange value,” and thus replaced the veiled forms of exploitation applied by the “pious, chivalrous, ecstatic, and sentimental middle ages” by an altogether unveiled exploitation. The bourgeoisie replaced an exploitation embroidered with religious and political illusion, by a new and more refined system of concealed exploitation. Whereas in medieval society even the utterly material tasks of production were performed under the spiritual disguise of “faith” and of an “allegiance” due by the “servant” to his “master,” in the new era of “Free Trade,” conversely, the continuing exploitation and oppression of the labourers is hidden under the pretext of the “economic necessities of production.” The scientific method of concealing this state of affairs is called Political Economy.

From the critical exposure of the fetishism inherent in the commodity “labour-power” there was but one step to the discovery of the most general form of the “economic” delusion appearing in the “commodity” itself. Just as the classical economists had derived all other terms of their science from the “value” appearing in the exchange of commodities, so Marx now traced back the delusive character of all other economic categories to the fetish-character of the “commodity.” Though even now that most obvious and direct form of the “self-alienation of the human being” which occurs in the relation between wage-labour and capital, keeps its decisive importance for the practical attack on the existing order of society, the fetishism of the commodity labour-power is at this stage for theoretical purposes regarded as a mere derivative form of the more general fetishism which is contained in commodity itself.

Thus the Marxian criticism of the existing order is transformed from a particular attack on the class character into a universal attack on the fundamental deficiency of the capitalistic mode of production and the structure of society based upon it. By revealing all economic categories to be mere fragments of one great fetish did Marx ultimately transcend all preceding forms and phases of economic and social theory. Political Economy itself had in its later development rectified such primitive misconceptions as that by which the adherents of the so-called “monetary system” had regarded money, in the form of gold and silver, as a product of nature, endowed with some peculiar social qualities, or the physiocratic illusion that rent grows out of the earth, not out of society. It had at its highest point of development theoretically interpreted “interest” and “rent” as mere fractions of the industrial “profit.” However, even the most advanced classical economists remained under the spell of that same fetish which they had already practically dissolved by their own theoretical analysis, or fell back into it, because they had never succeeded in extending their critical analysis to that general fundamental form which appears in the value-form of the labour products and in the form of commodity itself. The great theoretical art of classical Political Economy here met its his historical barrier. “The value form of the labour product is the most abstract but also the most general form of the bourgeois mode of production which is thereby historically characterized as a particular kind of social production. By misconceiving it as an eternal and natural form, he will overlook the particular character of the value form and thus also that of the commodity form, which appears further developed as money form, capital form, etc.” Marx was the first to represent that fundamental character of the bourgeois mode of production as the particular historical stage of material production, whose characteristic social form is reflected reversedly, in a “fetishistic” manner, both in the practical concepts of the ordinary man of business and in the scientific reflection of that “normal” bourgeois consciousness — Political Economy. Thus the theoretical exposure of “the fetish character of the commodity and its secret” is not only the kernel of the Marxian Critique of Political Economy, but, at the same time the quintessence of the economic theory of Capital and the most explicit and most exact definition of the theoretical and historical standpoint of the whole materialistic science of society.

The theoretical disclosure of the fetishistic appearance of commodity production has a tremendous importance for the practical struggle carried on by those who are oppressed in present-day society and who as a class are rebelling against this oppression. In view of the “good intentions” and scrap of paper proclamations constantly repeated by the official spokesmen of present-day economics and politics that “the worker shall no more be regarded as being a mere article of commerce,” the very statement of the existing fact that under present conditions the worker is and remains an article of commerce, becomes an open rebellion against the paramount interest of the ruling class in keeping intact both the fetishistic disguise and the underlying actual conditions. It forcibly re-establishes the responsibility of the ruling bourgeois class for all the waste and hideousness which by the “fetishistic” device of bourgeois economics had been shifted from the realm of human action to the so-called immutable, nature-ordained relations between things. For this reason alone, any theoretical tendency aiming at an unbiassed criticism of the prevailing economic categories, and the corresponding practical tendency to change the social system of which they are an ideological expression, is opposed from the outset by the overwhelming power of the classes privileged by the present social order and interested in its maintenance. The ultimate destruction of capitalistic commodity-fetishism by a direct social organization of labour, becomes the task of the revolutionary proletarian class struggle. A theoretical expression of this class struggle and, at the same time, one of its tools, is the revolutionary Critique of Political Economy.



Chapter 8

The “Social Contract”

Marx’s criticism of the fetish character of commodity production inaugurates a new epoch in the development of social science. First and foremost, the concept of “civil society,” that is, of the sum and aggregate of the material conditions prevailing in the new commodity-producing society, could not be worked out in its full social significance by the ideological protagonists of the revolutionary bourgeoisie as long as the fundamental economic relations of the new form of society were disguised as mere relations of things. Moreover, the concept of “civil society” which had been initiated at an early time by such forerunners as Ibn Khaldoun, the Arab, in the 14th century and after a temporary eclipse was revived by Vico, the Italian, and “the English and French of the 18th century,” had suffered from a considerable vagueness and ambiguity as to the limits between the newly discovered sphere of “civil society” on the one hand, and the traditional sphere of “political society” or the State on the other hand. While the bourgeois theorists were quite able to distinguish their “civil society” from the old feudal form of the State, they confused and identified it with the new political institutions and ideas of the bourgeois State. Instead of limiting the term of civil society to the basic relations springing immediately from the (old or new) economic conditions, they used both terms rather indiscriminately as one comprehensive name for the whole of the new social relationships which had now at last been agreed upon by the human individuals through the conclusion of the “social contract,” be it that this contract was reached in full harmony and complete freedom (as the more superficial exponents of the new theory had it) or that, after the more realistic concepts of Hobbes, Rousseau, and Hegel, it was forced upon an unwilling opposite party after a mortal struggle according to the right of the strongest.

Marx’s materialistic description of the social nature of the relations which are “reversely” expressed in the categories of Political Economy as relations between things, has a similar significance for the proletarian movement of the present epoch as Rousseau’s theory of the “social contract” had for the bourgeois revolution of the preceding historical epoch. The unmasking of the fetish character of the commodity contains the rational and empirical solution of a problem which the social theorists of the 18th century had not even set themselves and which such later bourgeois schools as the romanticists, the historical school, the adepts of the “organic” theory of the State, and Hegel had approached in a more or less mystical way. At first sight, there seems to be no great difference between Marx’s demonstration of the “secret” contained in the “form of the commodity” and the manner in which Hegel had dealt with the apparent mystery of the fact that history, made by men, follows a plan not conceived by men. Just as Hegel had said that “in world history out of the actions of men comes something quite different from what they intend and directly know and will; they realize their interests, but something further is achieved thereby which is internally comprised in it, but of which they were not conscious nor did they aim at it,” so Marx dwells on the contradiction that men in exchanging the products of their labour as commodities and in ultimately producing them for no other purpose than that of such exchange, just thereby achieve that qualitative and quantitative social division of labour which afterwards appears to them as an external thing in the definite value-relations of the commodities exchanged or in the value-form of the commodity. “They don’t know it, but they do it.” He emphasizes the paradox still more by the often repeated statement that the utter absurdity pertaining to the fetish categories of Political Economy is only an unavoidable outward appearance of an equally fundamental absurdity underlying the real capitalist mode of production and that thus, in the economic value relations of the commodities, the social relations of isolated commodity producers appear to them as “what they really are.”

However, all these paradoxes are for Marx, otherwise than for Hegel, only a means by which he compels the reader who is still under the spell of the traditional bourgeois concepts to look at such a palpable and everyday thing as a commodity as containing anything like a “secret” at all. The uncovering of this “secret” is not reached by Hegelian wizardry but by a rational and empirical analysis of a historically existing phenomenon and of the real social facts underlying its appearance. For the prophets of the 18th century, Quesnay, Smith, and Ricardo, the “natural” starting point of all social life was the free individual as he just emerged from the feudal bonds of the Middle Ages and from the close connection with physical and geographical conditions by which he had been hampered in the earlier epochs of his development. The new concept of society starts from the specific social connection which for the single individual living and acting in this society is given from the outset as a quasi-external fact independent from his knowledge and purpose. From the bourgeois point of view, the individual citizen thinks of the “economic” things and forces as of something entering into his private life from without. He uses them as instruments for his subjective ends and, on the other hand, is restrained by them to a certain extent, in his otherwise free-willed actions. According to the new concept, individual men with all their actions and sufferings move, from the outset, in definite social circumstances arising from a given stage in the development of material production. These social circumstances and their historical developments, though set by human beings themselves in their united action, are nevertheless for the individuals concerned given just as irrevocably and as “objectively”, as is, according to Hegel, the philosophical “idea” appearing in history or, according to a still more ancient and respectable theory, God the Almighty appearing in the flesh. Yet they are no longer regarded by Marx as a superhuman authority like the Absolute Reason which, according to Hegel’s description, is “as cunning as it is powerful” and which lets men “wear one another out in the pursuit of their own ends” and thus, without direct interference, nevertheless “attains her own purpose only.” This concept of Hegel’s was, after all, nothing else than an idealization of the bourgeois concept of the benefits derived from free competition. Avoiding to Marx’s critical principle, the contradiction in question results, on the contrary, from a deficiency in the present capitalist regulation of social production compared with that higher form which is today no more a mere matter of imagination, but an objective historical development and a real goal gradually approached by the workers in their revolutionary class struggle. It is writ large on the face of the formulae of Political Economy that they “belong to a type of social organization in which the production process controls men, not yet men the production process.”

Such high ideals of bourgeois society as that of the free, self-determining individual, freedom and equality of all citizens in the exercise of their political rights, and equality of all in the eyes of the law, are now seen to be nothing but correlative concepts to the Fetishism of the Commodity, drawn from the existing system of exchange. All these far-flung additions to the basic form of the commodity-fetish which for a time had served as stimulators of material progress are today but ideological expressions of a particular type of production-relations that have degenerated into mere fetters of the further development of the productive forces of society. The great illusion of our epoch that capitalistic society is a society consisting of free and self-determining individuals can only be maintained by keeping the people unconscious of the real contents of those basic relations of the existing social order which by the fetishistic device of the economists had been disguised as objective and unchangeable conditions of all social life. Only by representing the real social relations between the classes of the capitalists and the wage labourers as an inevitable result of the free and unhampered “sale” of the commodity “labour power” to the owner of the capital, is it possible in this society to speak of freedom and equality. “The bourgeois law,” said Anatole France, “forbids with the same majesty both the rich and the poor to sleep under the bridge.”



Chapter 9

The Law of Value

The social organization of labour which is hidden under the apparent value relations of commodities, is achieved in the bourgeois mode of production without the will and knowledge of the individual commodity producers. Bourgeois commodity production is, therefore, at the same time a private and a social, a regulated and an unregulated (“anarchic”) production. It seems as if by an undisclosed decree of “God” “Providence,” “Fortune” or “Conjunction,” it were laid down beforehand what kinds and what quantities of socially useful things should be produced in every branch of production. But the individual capitalist “producer” learns only subsequently — through the saleable or unsaleable quality of his commodity, through the price vacillations of the market, through bankruptcy and crisis — if and how far he has acted in accordance with that unknown rule, the economic “plan” of capitalistic reason. Bourgeois economists have over and over again referred in poetical metaphors to this inscrutable mystery of their own social existence. Just as Adam Smith spoke of an “invisible hand” which leads the individual trader to promote an end which was no part of his intention so other economists before and after him referred to the “play of free competition,” to the “automatism of the market,” or to a “law of value,” which would apply to the movements of production and circulation of commodities in the same way as the law of gravity applies to the movements of physical bodies. In fact, the concept of an entirely automatic regulation of the whole industrial production brought about by the mere exchange of commodities among entirely isolated commodity producers on a national and a cosmopolitan scale was not more than an “ideal type” even in those earlier periods when it first struck the eyes of the bourgeois classical economists. It was never fully realized in actual capitalistic production.

Nevertheless, there is in bourgeois commodity production an unwritten law which rules the production and exchange of labour products as commodities. But this is by no means an unchangeable law of nature; it is a “social law” which resembles a genuine physical law only in its apparent independence from our conscious volition and purpose. Like any other social rule, it holds good only under definite circumstances and for a definite historical period. Marx in dealing with the “so-called Primitive Accumulation of Capital” showed what enormous effort was needed to give birth to this fundamental law of the modern bourgeois mode of production and the other “eternal” laws connected with it. He exposed the series of more or less forgotten sanguinary and violent acts by which in real history the actual foundations of those so-called natural laws have been brought into existence. (The expropriation of the workers from their material means of production forms the basis of the whole process.) Marx has likewise shown in detail that even in a completely developed commodity production the law of value does not apply in the sure and efficient manner of a genuine natural law or of a generally accepted Providence, but is realized only by a succession of frictions, vacillations, losses, crises, and breakdowns. He says that “in the haphazard and continually fluctuating relations of exchange between the various products of labour, the labour time socially necessary for their production forcibly asserts itself as a regulating natural law just as the law of gravity does when the house collapses over our heads.”

With all these deficiencies, the law of value is the only form of social organization of production which exists today and is, indeed, the only kind of “social planning” which conforms to the principles of modern competitive or commodity-producing society. It belongs to the ironical whims of History that just that self-contradictory belief in a “consciously planned commodity production” which lies at the bottom of the first Utopian schemes of a “National Bank,” at which “any member of the community might lodge any kind of produce and take out of it an equal value of whatever it may contain,” and which was afterwards voiced in various forms by the successive schools of “social reformers,” has been adopted today by the official spokesmen of the bourgeois class. But though this illusion is as old as capitalism itself and obstinately persists in spite of theoretical arguments and in spite of the breakdown of all projects brought forward for its realization, it is unsound both from the orthodox principle of bourgeois economic science and from the materialistic viewpoint of Marxism. It is interesting only as an ideological reflex of the deep-rooted contradictions inherent in the very principle of capitalistic commodity production.

Such difference as there is between the earlier epoch when the progressive Free Traders regarded every “interference” of a State — not yet entirely their own — as an oppressive disturbance, and the present phase when even some of the most “orthodox” economists have turned from self-help to State subvention, does in no way indicate a gradual conquest of the animal-like “struggle for existence,” prevailing among the isolated commodity producers of early bourgeois society, by the growing collective reason of all capitalists grouped together and organized in the “State” and in the more or less authentic institutions of a so-called “Public Opinion.” There is thus only a difference of degree between the more or less numerous “interventions” of the early bourgeois State into the “free play of competition,” and the increasingly rapid succession of ever more intrusive measures, by which today everywhere in the old and in the “new,” in the fascist and in the still democratically governed capitalistic countries, an apparently new attempt is made to “control,” to “correct,” or to “steer” the existing economic system. Such measures serve at the utmost to weaken temporarily or even merely to disguise some of the most obstructive results of capitalistic production. Instead of ousting the planlessness resulting from the fetish-form of commodity-production, they merely stampede the unique form, in which production had been heretofore “planned” within capitalistic society, and utterly destroy the only “organization of labour” possible under capitalism.

This increasing destruction of its own foundations is forced upon present-day capitalism by an objective development of its inherent tendencies. It is produced by the ever-increasing accumulation and concentration of capital; by the growing monopolist tendencies of the big industrial and financial combines; by the increasing appeal to the State to rescue “the community at large” from the dangers brought about by the impending collapses of hitherto proud and tax-evading private enterprises; and by hyper-ultra-super-dreadnought demands for subsidy raised by the various direct and indirect producers of armaments encroaching ever more on the field formerly occupied by the activities of the less directly war-producing industries. In trying to escape from the periodical crises which threaten more and more the existence of bourgeois society, and in a desperate attempt to overcome the existing acute crisis of the whole capitalist system, the bourgeoisie is compelled, by continually fresh and deeper “interferences” with the inner laws of its own mode of production, and continually greater changes in its own social and political organization, to prepare more violent and more universal crises and at the same time, to diminish the means of overcoming future crises. In organizing peace it prepares for war.

The futility of any attempt to deal with “competition’s waste” within the existing forms of production and distribution becomes even more evident when we proceed from the elementary form of the “commodity” to the further developed form of “the worker transformed into a commodity,” or from the general historical character of bourgeois production to its inherent class character.

Just as the Utopian Exchange-Banks, Labour Certificates, and other endeavours to organize commodity production are repeated in the half-hearted “planning schemes” of the frightened economists and “socially minded” big capitalists today, so the first unwieldy attempts of the insurrectionary workers of Paris to wrest from the “revolutionary” government of 1848 some form of realization of the workers’ “right to work” are echoed in the various measures by which the democratic and fascist countries try to dispose of the increasing menace of Unemployment by a more or less compulsory organization of the labour market. And just as in the first case Marxism answered the capitalist “planners” that the only organization conformable to commodity production is the law of value, so sober materialistic criticism of the schemes to supplant the glaring insufficiency of the free “labour market” by some form of public regulation must start from the premise that the transformation of the workers into a saleable commodity is but a necessary complement of that other “transformation” on which all modern capitalistic production rests both historically and in its actual existence — the transformation of the workers’ tools and products into the non-workers’ “capital.” In fact, the most “benevolent” attempts to deal with the modern plague of mass unemployment have hitherto invariably led to an utter failure. There is more an apparent than a real progress in the new deals offered to the growing numbers of the unemployed by their capitalistic rulers today, as against those now almost forgotten times when the only cure foreseen by the most “philanthropic” spokesmen of the bourgeoisie was the Workhouse. Now as then, the final result of the endeavours to exterminate both the old form in which unemployment periodically recurred in the industrial cycle, and the new “structural,” “technological,” “chronic” form in which it has come to stay, is one or another disguised form of that compulsory service whose real character is revealed in the Labour Camps and Concentration Camps of National Socialist Germany.” Behind these “normal” remedies offered in times of peace there stands, as ultima ratio, the mass-employment offered by a new war, and already partially anticipated by a hitherto unheard-of extension of the direct and indirect armament industries both in the fascist countries and in democratic Britain and pacifistic U.S.A. The best form of “Public Works” under capitalistic conditions, as was most aptly remarked by a critic of Roosevelt’s New Deal, is always War itself which over all other measures to “create work” has the incomparable advantage that it will never cause an undesirable glut of the market because it destroys the commodities it produces simultaneously with their production and, incidentally, destroys a considerable portion of the “excessive” workers themselves.

The positive importance of all attempts made on the basis of the existing capitalistic conditions to create a so-called (lucus a non lucendo!) “organized capitalism” lies in another field entirely from that presumed by its ideological promoters — the “planning school” of modern capitalistic economics. The feverish endeavours to supplement the defects of “free” capitalistic commodity production confirm the gravity of those defects and thus inadvertently reveal the fettering character of the existing capitalistic production-relations. They put into sharper relief the incongruence between an ever more efficient organization of production within the single workshop or private capitalistic trust and the “organic disorganization” prevailing throughout capitalistic production. The futile schemes to keep in “normal” proportions the increasing mass of unemployment and pauperism illustrate once more the capitalistic “law of population” first enunciated by Fourier and later scientifically demonstrated by Marx that within the capitalistic system all methods for raising the social productivity of labour coincide with an extension of the relative surplus population, or the industrial reserve army kept at the disposal of capitalistic industry as a potential supply of labour power for the rapid increases of population in times of prosperity and for the full utilization of the existing capacities of production in war.

There is, furthermore, a considerable difference between the same measures when offered by the capitalists in distress and when thrust upon them by the conscious action of the workers themselves. That difference may, at first, not be a difference in the purely economic contents. Yet it is a difference of social significance. “The right to work taken in its bourgeois sense,” said Marx with reference to the struggles of the Paris workers in 1848, “is a contradiction in terms, an impotent pious intention; but behind the right to work there stands the control of capital, and behind the control of capital the appropriation of the means of production by the associated working class, that is, the abolition of wage labour, of capital, and their mutual dependence. Behind the ‘right to work’ stood the insurrection of June.” Finally, a few of the new developments which are today featured as achievements of the “planning idea” may serve to work out within the narrow bounds of the capitalist production-relations some of the formal elements which, after the overthrow of the existing mode of production, will be totally stripped of the residues of their capitalistic origin and thus usefully applied in building up a really cooperative and socialistic commonwealth.

For the time being there remains, along with the imperfect social organization of material production in the structure of the present bourgeois society, also the “reversed” form in which the social relations of men are now reflected as mere relations of things. There remain unchanged, even in the newest “as good as Socialism” models of a planned and steered State-Capitalism, and there will remain so long as the products of labour are produced as commodities, all the fetish-categories of bourgeois economics: commodity, money, capital, wage-labour, increasing and decreasing total value of production and of export, profit-making capacity of industries, credits, etc., in short, all that which Marx in his philosophic phase called “human self-alienation,” and in his scientific phase, “fetishism of commodity production.” In spite of appearances such a system of production is not in the last analysis governed by a collective will of the associated workers but by the blind necessities of a fetishistic “Law of Value.”

The apparent Fetish Character of the Commodity and with it the apparent validity of a fetishistic Law of Value, will not disappear — nor will the economic crises and depressions and the various forms of periodical and chronic mass unemployment, wars and civil wars cease to plague the modern “Civilized World,” till the present mode of commodity production is entirely destroyed and human labour organized in a direct socialistic mode of production. “For this, however, a material groundwork is required, or a set of material conditions which are themselves the spontaneous outgrowth of a long and painful process of development.”



Chapter 10

Common Misunderstandings of the Marxian Doctrine
of Value and Surplus Value

The idea that there is an equality inherent in all kinds of labour, by which economists are entitled to regard qualitatively different kinds of labour such as the labour performed by the spinner, the weaver, the blacksmith, or the farm-hand, as quantitatively different portions of a total quantity of general “labour” is so little the discovery of a natural condition underlying the production and exchange of commodities, that this “equality” is, on the contrary, brought into existence by the social fact that under the conditions prevailing in present-day capitalist “commodity production” all labour products are produced as commodities for such exchange. In fact, this “equality” appears nowhere else than in the “value” of the commodities so produced and exchanged. The full development of the economic theory of labour value coincided with a stage of the historical development, when human labour had long ceased to be, as it were, “organically” connected with either the individual or with small productive communities and henceforth under the new bourgeois banner of Freedom of Trade, every particular kind of labour was treated as equivalent to every other particular kind of labour. It was just the advent of those particular historical conditions that was expressed by the classical economists when they traced back in an ever more consistent manner the “value” appearing in the exchange of commodities to the quantities of labour incorporated therein, though most of them actually believed that they had thus disclosed a truly “natural” law applying to every reasonable productive society formed by human beings when they have reached their age of maturity and enlightenment. There is, in spite of this vague idea of a “natural” equality lingering in the minds of some early bourgeois economists, no validity whatever in the naïve objection which now for almost a century has been raised against the objective theory of value by pointing to the real inequality of the various kinds of labour. Those well-meaning defenders of Marxism who, on the other hand, attempt to correct the apparent “flaw” in the Marxian doctrine of labour value by actually trying to represent the useful labour in every particular labour product as a strictly measurable quantity, merely present the sad picture of one who holds a sieve beneath the billy-goat while another keeps busy to milk him. According to Marx’s critical teaching, the natural difference of the various kinds of productive human labour is by no means wiped out by the fact (unquestionable in itself) that a major part of the differences in rank, presumably existing between many kinds of labour in present-day bourgeois society, rest on “mere illusions, or, to say the least, on differences, which have long ceased to be real and continue only by a social tradition.” The particular kinds of labour performed in the production of the various useful things are, according to Marx, by their very nature different, and just this difference is a necessary premise for the exchange of the labour products and the social division of labour brought about by it. Only on the basis of a qualitative division of labour arising spontaneously from the variety of social needs and the variety of kinds of useful labour performed to meet those needs, arises, by a further development, a possibility that this qualitative difference, for the purpose of an ever wider exchange, may gradually yield its place to the merely quantitative differences which the various kinds of labour possess as so many portions of the total quantity of the social labour expended in the production of all products consumed (or otherwise disposed of) at a given time within a given society. It is just this condition which has been first expressed theoretically by the “law of value” as formulated by the classical economists. Those minor followers in the wake of the great scientific founders of Political Economy, no longer accustomed to such audacity of scientific thought, who have later pathetically bewailed the “violent abstraction” by which the classical economists and Marxism, in tracing back the value relations of commodities to the amounts of labour incorporated therein, have “equated the unequal,” must be reminded of the fact that this “violent abstraction” does not result from the theoretical definitions of economic science, but from the real character of capitalist commodity production. The commodity is a born leveller. Over against this, it appears as a relatively unimportant fault in the construction of existing capitalist society that the theoretical principle of exchange of equal quantities of labour is no longer strictly realized in each single case but only, perhaps, on a rough average.

Contrary to all adverse opinions prevailing in one or the other camp, it was never the intention of Marx to descend, from the general idea of value as expounded in the first volume of Capital, by means of ever closer determinants to that direct determination of the price of commodities, for which at a later time Walras and Pareto set up their delusive systems of n millions of equations into which we need only introduce the required n millions of constants, to calculate with mathematical accuracy the price of a definite individual commodity at a given time. It was a catastrophical misunderstanding of Marx’s economic theory when, after the appearance of the second and third volumes of Capital, the whole dogmatic dispute between the bourgeois critics of Marx and the orthodox Marxists centred round the question whether, and in what sense, the transformation of the “values” of the commodities into “production prices,” by means of the intermediary concept of an “average rate of profits,” is consistent with the general definition of “value” in the first volume. As shown by the MSS. and by the correspondence which were later published it was long before the appearance of the first volume that Marx had finally laid down the principle that the “production prices” of commodities produced by capitals of various organic constitution can no longer be identical with their “values” as determined by the “law of value,” either in individual cases or on the average, but are only a compound result of that main factor along with a series of other factors. The particular importance of the law of value within Marx’s theory, then, has nothing to do with a direct fixation of prices of commodities by their value. It would be nearer the truth to say that the working of this law appears in the general development of the prices of commodities, in which the continuous depreciation in value of the commodities, effected by the ever-increasing productivity of social labour consequent upon the further accumulation of capital, constitutes the decisive factor. The ultimate meaning of this law as shown in its working by Marx in all three volumes of Capital does not consist, however, in supplying a theoretical basis for the practical calculation of the businessman seeking his private advantage, or for the economico-political measures taken by the bourgeois statesman concerned with the general maintenance and furtherance of the capitalist surplus-making machinery. The final scientific purpose of the Marxian theory is rather to reveal “the economic law of motion of modern society” and that means at the same time the law of its historical development. Even more clearly was this expressed by the Marxist Lenin when he said that “the direct purpose of a Marxist investigation consists in the disclosure of all forms of the antagonism and exploitation existing in present-day capitalist society in order to aid the proletariat to do away with them.”

Similarly, the doctrine of surplus value which is usually regarded as the more particularly socialist section of Marx’s economic theory is not either a simple economic exercise in calculation which serves to check a fraudulent statement of value received and expended by capital in its dealing with the workers, or a moral lesson drawn from economics for the purpose of reclaiming from capital the diverted portion of the “full product of the worker’s labour.” The Marxian doctrine, as an economic theory, starts rather from the opposite principle that the industrial capitalist under “normal” conditions acquires the labour power of the wage labourers by means of a respectable and businesslike bargain, whereby the labourer receives the full equivalent of the “commodity” sold by him, that is, of the “labour power” incorporated in himself. The advantage gained by the capitalist in this business derives not from economics but from his privileged social position as the monopolist owner of the material means of production which permits him to exploit for the production of commodities in his workshop the specific use value of a labour power which he has purchased at its economic “value” (exchange value). Between the value of the new commodities produced by the use of the labour power in the workshop, and the prices paid for this labour to its sellers, there is, according to Marx, no economic or other rationally determinable relation whatever. The measure of value produced by the workers in the shape of their labor products over and above the equivalent of their wages, i.e., the mass of “surplus labour” expended by them in producing this “surplus value”; and the quantitative relation between this surplus labour and the necessary labour, i.e., the “rate of surplus value” or the “rate of exploitation” holding good for a particular country do not result from any exact economic calculation. They result from a battle between social classes which assumes sharper and sharper forms just because no objective limits are set for the increase of the rate and mass of the surplus value under the conditions of an ever-increasing accumulation of capital at one pole, and the simultaneous accumulation of misery at the opposite pole of society.



Chapter 11

Ultimate Aims of Marx’s Critique of Political Economy

Political Economy is, through the Marxian criticism, deprived of its extravagant claims and referred back to its historical and social context. It is transformed (and this is the “Copernican turn” of the Marxian Critique of Political Economy) from an absolute and timeless science into one which is historically and socially conditioned. According to Marx, Political Economy is a bourgeois science which springs from the particular historical form of the bourgeois mode of production and is its ideological supplement. From this critical conception of Political Economy results a thorough change in the mode of validity of all its categories and propositions. On the one hand, because of the fetish character which attaches itself to all economic categories beginning with the fundamental categories of commodity and of money, these categories do not apply to any real and directly given object; the presumed “objects” of economics are themselves nothing but materially disguised expressions for the definite relations into which men enter among themselves, in the social production of their means of existence. On the other hand, the economic categories, in spite of their fetish character, or perhaps just because of it, represent the necessary form in which that particular historical and historically transitory state of an “imperfect sociality,” which is characteristic of the bourgeois production relations, is reflected in the social consciousness of this epoch. They are, as Marx said, “socially valid and, therefore, objective thought-forms which apply to the production-relations peculiar to this one historically determined mode of social production, to wit, commodity production.” They are, as will be further shown in the third part of this book, inseparably connected with the real existence of the bourgeois mode of production and the “social laws” which hold good for this particular epoch of society. As long as that material foundation of the existing bourgeois society is only attacked and shaken, but not completely overthrown, through the revolutionary proletarian struggle, also the socially entrenched thought-forms of the bourgeois epoch can only be criticized and not definitely superseded by the revolutionary theory of the proletariat. The critique of Political Economy, which Marx began in Capital, can therefore only be completed by proletarian revolution, i.e., by a real change of the present bourgeois mode of production and of the forms of consciousness pertaining to it. It is only after the full accomplishment of this revolution that, in the further development of the Communist society, all “fetishism of commodity production” and the whole “fetishistic” science of Political Economy will be finally merged into a direct social theory and practice of the associated producers.

Until that time, the terms and propositions by which Political Economy had expressed the scientific results of its investigation into the material foundations of the present order of society, in a manner befitting its period in spite of their fetish form, remain valid even for that materialistic science by which Marx and his followers have criticized the standpoint of bourgeois economy from the new historical and theoretical standpoint of a new social class. Notwithstanding his revolutionary criticism of all preceding Political Economy, Marx remained, in his theoretical work, first and foremost, an economic investigator. He did not dissipate economics in history, sociology, and in the Utopias but, on the contrary, he condensed the general and indefinite form of the traditional historical and social studies into a materialistic investigation of their economic foundations. He was less and less disposed, the farther he went in his exact scientific analysis of the bourgeois mode of production, to leave aside that exceedingly important material, available in the results of classic bourgeois economy, and which only needs further logical development and critical utilization. Nor did he want to leave it to the minor disciples of the great classical economists, who misinterpreted it for the purpose of a social apology for the existing capitalist system.

This positive attitude of Marx towards economic science is evident in his relation to all other standpoints which were represented within bourgeois and, to a certain extent, also within socialist science at his time.

Marx stood, in spite of his historical criticism of the “eternal laws of nature” of traditional Political Economy, in a much sharper contrast to the so-called “Historical School” which, by its dispersal of all definite economic concepts, represented nothing but a self-destruction and abdication of economics as a science.

Similarly, already in his first philosophical period, he had opposed the ideological manner in which such writers as Bruno Bauer, Stirner and Feuerbach had considered all human “self-alienation” as a mere philosophical category. He had emphasized the fact that the actual “self-alienation” of the wage labourer who sells his own labour power to the capitalistic owner of the means of production cannot be abolished by a mere process of thought, but only by a social action. In the same realistic mood he dismissed with contempt, in his later period, that superficial “sociological” theory which, in contrast to the “economic realism” of the classicists, “regarded value as nothing more than a conventional form, or, rather, as the ghost of such a form.” (We may add in passing that this brief remark which Marx seventy years ago bestowed on the views held at that time by a few remaining supporters of a “restored Mercantile system” is still very pertinent, and perhaps particularly so today, as a criticism of the theoretical suggestions and practical schemes disseminated by the modern “money theorists” and “credit reformers,” who likewise look upon commodity prices and more particularly upon “money” as arbitrary, conventional, and manageable forms.) While Marx and Engels had no quarrel with such practical exponents of revolutionary force as Blanqui, they pointed at every possible opportunity to the scientific emptiness of so-called sociological “theories of violence.” They were not deceived by the clamorous ways of those would-be “progressive” and even half “socialistically-minded” people who, candidly unconscious of the real motive force of historical development and deliberately ignoring all economics with the possible exception of a few general and unchangeable economic “laws of nature,” endeavoured to trace the existing forms of production, of class relationship and other disagreeable facts to pure force, politics, etc., in order to appeal from such “brute” forms of violence to the organizing power of reason, of justice, of humanity, or similar classless immaterialities. Marx and Engels, as against such “sociological” despisers of economics, always affirmed their allegiance to the deeper and richer historical knowledge of bourgeois society which is contained in the economic concept of “value” and in the analyses based on it by the bourgeois classicists.

Finally, Marx, whose “materialistic” and scientific socialism arose in direct contrast to the “doctrinary” and “Utopian” socialism of the preceding phase of the workers’ movement, remained throughout his life a sworn enemy of all merely “imaginary” constructions to a degree that already on this ground the tenets of economic science which in spite of their formal deficiencies are at least based on definite historical and social facts, were for him of an incomparably greater significance than any future type existing as yet only in the thought of an individual reformer.

This holds good even for the rare cases where Marx himself in the course of his exposition endeavoured to elucidate his theoretical standpoint by confronting the present-day capitalistic commodity production with some other, past historical or possible future, forms of social production. It applies above all to four short paragraphs of the section dealing with the “Fetish Character of the Commodity and its Secret” in which Marx, to dispel “all the mystery of the world of commodities, all the enchantment and bewitchment which befog the products of labour in a system based on commodity production,” calls up successively four different social modes of production: that of Robinson Crusoe (the lonely islander), the feudal mode of production of the Middle Ages, the patriarchial management of a peasant family working on the land, and, finally, “for a change,” an association of free men who work with common means of production and consciously expend their many individual labour powers as a combined social labour power. Similarly, the detailed description of one of those ancient small Indian communities in which “there is a social division of labour, but the products of labour do not become commodities,” is not of any particular significance for the economic theory of Capital, though it is more important with regard to the broader aspects of the materialistic theory of history and society. In the particular context in which it appears within the exposition of Marx’s fundamental economic concepts in Capital, it serves only as a supplementary historical illustration of the theoretical contrast between the division of labour inside the workshop and the division of labour in society as a whole.

The main theoretical purpose of all such “quasi-historical” comparisons is the same which is served, in another way, by Marx’s favourite comparison of the economic “fetishism of the commodity” with the “reflection of the real world in religion.” Just as a real criticism of religion must not content itself with finding out, through scientific analysis, the earthly kernel of the foggy forms of the religious phantasms, so a criticism of the economic categories is imperfect as long as it restricts itself to a disclosure of the actual material conditions underlying their apparent “fetishistic” form. Materialistic criticism of religion is aware of the fact that the ideological reflection of the real world in religion cannot be totally dissolved until the practical conditions of every day offer to the human beings concerned a continuous display of perfectly intelligible and reasonable relations both between man and nature and between men and men. Similarly, the life process of society, i.e. material production does not strip off its mystical veil until it is transformed into the result of the conscious and self-controlled activities of freely associated men. Till then a scientific critique of Political Economy must supplement its theoretical analysis of the fetish form of the economic categories by a positive understanding of their transitory historical necessity and rationality, and must utilize the real knowledge contained therein for a materialistic investigation of the social development going on within the present historical epoch.

Only in some passages of Capital did Marx replace the economic categories hitherto applied in the presentation of his theory by a direct historical description of the bourgeois mode of production and the real conflict of the social classes concealed behind the two economic categories “capital” and “wage-labour.” Here belong, for instance, two passages in the eighth chapter of the first volume where Marx winds up a detailed discussion of the economically undetermined and indeterminable limits of the working day by the statement that “the regulation of the working day is, in real history, the outcome of a protracted civil war between the capitalist class and the working class,” and calls upon the workers “to put their heads together for protection against the worm gnawing at their vitals and, by united action as a class, to compel the passing of a law which will put in place of the pompous catalogue of the ‘inalienable man’ the modest Magna Charta of a legally limited working day that shall at length make it clear when the time which the worker sells is ended, and when his own begins.”

Here belong many other not very bulky, but significant passages leading up to the famous investigation of the “So-Called Primitive Accumulation” which, together with the immediately following analysis of Modern Colonization finally concludes the case of Socialism against Capitalism as presented by Marx in his theory.

Marx has in the preceding chapters fully described the economic nature of the existing mode of production. He has gone through the economic analysis of value and labour, of surplus value and surplus labour, of reproduction, of the accumulation both of the individual capital and of the sum total of the capitals available in a given society. When thus all has been said that can be said about the origin of capital in terms of economic science, there still remains an unsolved residue in form of the question, “Whence came the first capital?” Whence arose, before all capitalistic production, the first capitalistic relation between an exploiting capitalist and the exploited wage-labourers? Whence descended the Vampire that preys upon the toiling masses of modern society and will not loose its hold “so long as there is a muscle, a nerve, a drop of blood to be exploited?” This question — unanswered by the bourgeois economists and, indeed, unanswerable economically — has already been repeatedly examined by Marx in the foregoing exposition. It is now taken up again to be treated no longer as an economic question at all. Instead, the problem is grimly and thoroughly cleared up in a direct historical investigation and solved by a practical rather than a theoretical conclusion. The “Historical Tendency of Capitalistic Accumulation,” as illustrated by the classic example of the capitalist production in England, leads to a result which, if it emanates with “the inevitability of a process of nature” from the objective development of capitalism itself, yet requires a practical social act to set it free. “The last hour of capitalistic private property strikes. The expropriators are expropriated.” A similar line of argument prevails throughout the remaining parts of Marx’s work. Just as the first book of Capital actually leads up to the outbreak of the proletarian revolution, so the whole of the Marxian theory as presented in the three books of Capital, was meant to result in the historical event of the revolutionary class war.

But even at these extreme points where the revolutionary principle is definitely laid open in Capital, Marx did not entirely abandon economic theory. He merely revealed in a more outspoken manner the historical and social barrier which was already reflected in the “fetish-character” of the economic categories and on account of which an uncritical adoption of those categories was excluded from the new socialistic theory from the outset. Some end and border problems of Political Economy which were now first discovered from the new standpoint of the proletarian class, so far transcended the horizon of the bourgeois economist that they could no longer be approached, much less solved within the realm of the economic science. The categories by which the classical economists had elucidated the material foundations of the then arising bourgeois society, were scientifically sufficient for the time. With certain critical amendments, they represent even now, within limited fields and for short periods of time, a valuable instrument for the scientific analysis of definite sections of the bourgeois mode of production. However, they prove to be unsuitable for a more extensive investigation which embraces the total historical development of bourgeois commodity production, including its origin and decay, and its revolutionary transition to a direct social organization of production. They are, as Marx and Engels emphasized in their later period, even more unsuitable for a comprehensive materialistic history of human society, looking backwards to primaeval times and forwards to the fully developed Communist Society.


Part II of Karl Korsch’s Karl Marx (1938).

Contents and Introduction
Part I
Part III




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