Karl Marx/ The Poverty of Philosophy
Chapter One: A Scientific Discovery
Value (marketable value) is the corner-stone of the economic structure. “Constituted” value is the corner-stone of the system of economic contradictions.
What then is this “constituted value” which is all M. Proudhon has discovered in political economy?
Once utility is admitted, labor is the source of all value. The measure of labor is time. The relative value of products is determined by the labor time required for their production. Price is the monetary expression of the relative value of a product. Finally, the the constituted value of a product is purely and simply the value which is constituted by the labor time incorporated in it.
Just as Adam Smith discovered the division of labor, so he, M. Proudhon, claims to have discovered “constituted value.” This is not exactly “something unheard of,” but then it must be admitted that there is nothing unheard of in any discovery of economic science. M. Proudhon, who fully appreciates the importance of his own invention, seeks nevertheless to tone down the merit therefore “in order to reassure the reader to as his claims to originality, and to win over minds whose timidity renders them little favorable to new ideas.” But in apportioning the contribution made by each of his predecessors to the understanding of value, he is forced to confess openly that the largest portion, the lion’s share, of the merit falls to himself.
“The synthetic idea of value had been vaguely perceived by Adam Smith.... But with Adam Smith the idea of value was entirely intuitive. Now, society does not change its habits merely on the strength of intuitions: its decisions are made only on the authority of facts. The antinomy had to be stated more palpably and more clearly: J.B. Say was its chief interpreter."
Here, in a nutshell, is the history of the discovery of synthetic value: Adam Smith – vague intuition; J. B. Say – antinomy; M. Proudhon – constituting and “constituted” truth. And let there be no mistake about it: all the other economists, from Say to Proudhon, have merely been trudging along in the rut of antimony.
“It is incredible that for the last 40 years so many men of sense should have fumed and fretted at such a simple idea. But no, values are compared without there being any point of comparison between them and with no unit of measurements; this, rather than embrace the revolutionary theory of equality, is what the economists of the 19th century are resolved to uphold against all comers. What will posterity say about it?"
Posterity, so abruptly invoked, will begin by getting muddled over the chronology. It is bound to ask itself: are not Ricardo and his school economists of the 19th century? Ricardo’s system, putting as a principle that “the relative value of commodities corresponds exclusively to their production", dates from 1817. Ricardo is the head of a whole school dominant in England since the Restoration. [The Restoration began after the termination of the Napoleonic wars and the restoration of the Bourbon dynasty in France in 1815.] The Ricardian doctrine summarizes severely, remorselessly, the whole of the English bourgeoisie. “What will posterity say about it?” It will not say that M. Proudhon did not know Ricardo, for he talks about him, he talks at length about him, he keeps coming back to him, and concludes by calling his system “trash". If ever posterity does interfere, it will say perhaps that M. Proudhon, afraid of offending his readers’ Anglophobia, preferred to make himself the responsible editor of Ricardo’s ideas. In any case, it will think it very naive that M. Proudhon should give as a "revolutionary theory of the future” what Ricardo expounded scientifically as the theory of present-day society, of bourgeois society, and that he should thus take for the solution of the antinomy between utility and exchange value what Ricardo and his school presented long before him as the scientific formula of one single side of this antinomy, that of exchange value. But let us leave posterity alone once and for all, and confront M. Proudhon with his predecessor Ricardo. Here are some extracts from this author which summarize his doctrine on value:
“Utility then is not the measure of exchangeable value, although it is absolutely essential to it."
(Vol.I, p.3, Principles de l’economie
politique, etc., translated from the
English by F.S. Constancio, Paris 1835)
“Possessing utility, commodities derive their exchangeable value from two sources: from their scarcity, and from the quantity of labor required to obtain them. There are some commodities, the value of which is determined by their scarcity alone. No labor can increase the quantity of such goods, and therefore their value cannot be lowered by an increased supply. Some rare statues and pictures, scarce books... are all of this description. Their value... varies with the varying wealth and inclinations of those who are desirous to possess them."
(Vol.I, pp.4 and 5, l. c.)
“These commodities, however, form a very small part of the mass of commodities daily exchanged in the market. By far the greatest part of these goods which are the objects of desire, are procured by labor; and they may be multiplied, not in one country alone, but in many, almost without any assignable limit, if we are disposed to bestow the labor necessary to obtain them.”
(Vol.I, pp.5, l. c.)
“In speaking then of commodities, of their exchangeable value, and of the laws which regulate their relative prices, we mean always such commodities only as can be increased in quantity by the exertion of human industry, and on the production of which competition operates without restraint.”
Ricardo quotes Adam Smith, who, according to him, “so accurately defined the original source of exchangeable value” (Adam Smith, Wealth of Nations, Book I, Chap 5 [An Inquiry into the Nature and Causes of the Wealth of Nations, first edition appearing in London, 1776]), and he adds:
“That this (i.e., labor time) is really the foundation of the exchangeable value of all things, excepting those which cannot be increased by human industry, is a doctrine of the utmost importance in political economy; for from no source do so many errors, and so much difference of opinion in that science proceed, as from the vague ideas which are attached to the word value.”
“If the quantity of labor realized in commodities regulate their exchangeable value, every increase of the quantity of labor must augment the value of that commodity on which it is exercised, as every diminution must lower it.”
Ricardo goes on to reproach Smith:
1. With having “himself erected another standard measure of value” than labor. “Sometimes he speaks of corn, at other times of labor, as a standard measure; not the quantity of labor bestowed on the production of any object, but the quantity it can command in the market.” (Vol.I, pp.9 and 10)
2. With having “admitted the principle without qualification and at the same time restricted its application to that early and rude state of society, which precedes both the accumulation of stock and the appropriation of land.” (Vol.I, p.21)
Ricardo sets out to prove that the ownership of land, that is, ground rent, cannot change the relative value of commodities and that the accumulation of capital has only a passing and fluctuation effect on the relative values determined by the comparative quantity of labor expended on their production. In support of this thesis, he gives his famous theory of ground rent, analyses capital, and ultimately finds nothing in it but accumulated labor. Then he develops a whole theory of wages and profits, and proves that wages and profits rise and fall in inverse ratio to each other, without affecting the relative value of the product. He does not neglect the influence that the accumulation of capital and its different aspects (fixed capital and circulating capital), as also the rate of wages, can have on the proportional value of products. In fact, they are the chief problems with which Ricardo is concerned.
“Economy in the use of labor never fails to reduce the relative value [*1] of a commodity, whether the saving be in the labor necessary to the manufacture of the commodity itself, or in that necessary to the formation of the capital, by the aid of which it is produced."
“Under such circumstance the value of the deer, the produce of the hunter’s day’s labor, would be exactly equal to the value of the fish, the produce of the fisherman’s day’s labor. The comparative value of the fish and the game would be entirely regulated by the quantity of labor realized in each, whatever might be the quantity of production, or however high or low general wages or profits might be.”
“In making labor the foundation of the value of commodities and the comparative quantity of labor which is necessary to their production, the rule which determines the respective quantities of goods which shall be given in exchange for each other, we must not be supposed to deny the accidental and temporary deviations of the actual or market price of commodities from this, their primary and natural price.”
(Vol.I, p.105, l. c.)
“It is the cost of production which must ultimately regulate the price of commodities, and not, as has been often said, the proportion between supply and demand.”
Lord Lauderdale had developed the variations of exchange value according to the law of supply and demand, or of scarcity and abundance relatively to demand. In his opinion the value of a thing can increase when its quantity decreases or when the demand for it increases; it can decrease owing to an increase of its quantity or owing to the decrease in demand. Thus the value of a thing can change through eight different causes, namely, four causes that apply to money or to any other commodity which serves as a measure of its value. Here is Ricardo’s refutation:
“Commodities which are monopolized, either by an individual, or by a company, vary according to the law which Lord Laudersdale has laid down: they fall in proportion as the sellers augment their quantity, and rise in proportion to the eagerness of the buyers to purchase them; their price has no necessary connexion with their natural value; but the prices of commodities, which are subject to competition, and whose quantity may be increased in any moderate degree, will ultimately depend, not on the state of demand and supply, but on the increased or diminished cost of their production.”
We shall leave it to the reader to make the comparison between this simple, clear, precise language of Ricardo’s and M. Proudhon’s rhetorical attempts to arrive at the determination of relative value by labor time.
Ricardo shows us the real movement of bourgeois production, which constitutes value. M. Proudhon, leaving the real movement out of account, “fumes and frets” in order to invent new processes and to achieve the reorganization of the world on a would-be new formula, which formula is no more than the theoretical expression of the real movement which exists and which is so well described by Ricardo. Ricardo takes his starting point from present-day society to demonstrate to us how it constitutes value – M. Proudhon takes constituted value as his starting point to construct a new social world with the aid of this value. For him, M. Proudhon, constituted value must move around and become once more the constituting factor in a world already completely constituted according to this mode of evaluation. The determination of value by labor time, is, for Ricardo, the law of exchange value; for M. Proudhon. it is the synthesis of use value and exchange value. Ricardo’s theory of values is the scientific interpretation of actual economic life; M. Proudhon’s theory of values is the utopian interpretation of Ricardo’s theory. Ricardo establishes the truth of his formula by deriving it from all economic relations, and by explaining in this way all phenomena, even those like ground rent, accumulation of capital and the relation of wages to profits, which at first sight seems to contradict it; it is precisely that which makes his doctrine a scientific system: M. Proudhon, who has rediscovered this formula of Ricardo’s by means of quite arbitrary hypotheses, is forced thereafter to seek out isolated economic facts which he twists and falsifies to pass them off as examples, already existing applications, beginning of realization of his regenerating idea. (See our S.3. Application of Constituted Value)
Now let us pass on to the conclusions M. Proudhon draws from value constituted (by labor time).
- A certain quantity of labor is equivalent to the product created by this same quantity of labor.
- Each day’s labor is worth as much as another day’s labor; that is to say, if the quantities are equal, one man’s labor is worth as much as another man’s labor: there is no qualitative difference. With the same quantity of work, one man’s product can be given in exchange for another man’s product. All men are wage workers getting equal pay for an equal time of work. Perfect equality rules the exchanges.
Are these conclusions the strict, natural consequences of value “constituted" or determined by labor time?
If the relative value of a commodity is determined by the quantity of labor required to produce it, it follows naturally that the relative value of labor, or wages, is likewise determined by the quantity of labor needed to produce the wages. Wages, that is, the relative value or the price of labor, are thus determined by the labor time needed to produce all that is necessary for the maintenance of the worker.
"Diminish the cost of production of hats, and their price will ultimately fall to their own new natural price, although the demand should be doubled, trebled, or quadrupled. Diminish the cost of subsistence of men, by diminishing the natural price of food and clothing, by which life is sustained, and wages will ultimately fall, notwithstanding the demand for laborers may very greatly increase."
(Ricardo, Vol.II, p.253)
Doubtless, Ricardo’s language is as cynical as can be. To put the cost of manufacture of hats and the cost of maintenance of men on the same plane is to turn men into hats. But do not make an outcry at the cynicism of it. The cynicism is in the facts and not in the words which express the facts. French writers like M.M. Droz, Blanqui, Rossi and others take an innocent satisfaction in proving their superiority over the English economists, by seeking to observe the etiquette of a “humanitarian” phraseology; if they reproach Ricardo and his school for their cynical language, it is because it annoys them to see economic relations exposed in all their crudity, to see the mysteries of the bourgeoisie unmasked.
To sum up: Labor, being itself a commodity, is measured as such by the labor time needed to produce the labor-commodity. And what is needed to produce this labor-commodity? Just enough labor time to produce the objects indispensable to the constant maintenance of labor, that is, to keep the worker alive and in a condition to propagate his race. The natural price of labor is no other than the wage minimum. [*2] If the current rate of wages rises above this natural price, it is precisely because the law of value put as a principle by M. Proudhon happens to be counterbalanced by the consequences of the varying relations of supply and demand. But the minimum wage is nonetheless the centre towards which the current rates of wages gravitate.
Thus relative value, measured by labor time, is inevitably the formula of the present enslavement of the worker, instead of being, as M. Proudhon would have it, the “revolutionary theory” of the emancipation of the proletariat.
Let us now see to what extent the application of labor time as a measure of value is incompatible with the existing class antagonism and the unequal distribution of the product between the immediate worker and the owner of accumulated labor.
Let us take a particular product: broadcloth, which has required the same quantity of labor as the linen.
If there is an exchange of these two products, there is an exchange of equal quantities of labor. In exchanging these equal quantities of labor time, one does not change the reciprocal position of the producers, any more than one changes anything in the situation of the workers and manufacturers among themselves. To say that this exchange of products measured by labor time results in an equality of payment for all the producers is to suppose that equality of participation in the product existed before the exchange. When the exchange of broadcloth for linen has been accomplished, the producers of broadcloth will share in the linen in a proportion equal to that in which they previously shared in the broadcloth.
M. Proudhon’s illusion is brought about by his taking for a consequence what could be at most but a gratuitous supposition.
Let us go further.
Does labor time, as the measure of value, suppose at least that the days are equivalent, and that one man’s day is worth as much as another’s? No.
Let us suppose for a moment that a jeweller’s day is equivalent to three days of a weaver; the fact remains that any change in the value of jewels relative to that of woven materials, unless it be the transitory result of the fluctuations of supply and demand, must have as its cause a reduction or an increase in the labor time expended in the production of one or the other. If three working days of different workers be related to one another in the ratio of 1:2:3, then every change in the relative value of their products will be a change in this same proportion of 1:2:3. Thus values can be measured by labor time, in spite of the inequality of value of different working days; but to apply such a measure we must have a comparative scale of the different working days: it is competition that sets up this scale.
Is your hour’s labor worth mine? That is a question which is decided by competition.
Competition, according to an American economist, determines how many days of simple labor are contained in one day’s compound labor. Does not this reduction of days of compound labor to days of simple labor suppose that simple labor is itself taken as a measure of value? If the mere quantity of labor functions as a measure of value regardless of quality, it presupposes that simple labor has become the pivot of industry. It presupposes that labor has been equalized by the subordination of man to the machine or by the extreme division of labor; that men are effaced by their labor; that the pendulum of the clock has become as accurate a measure of the relative activity of two workers as it is of the speed of two locomotives. Therefore, we should not say that one man’s hour is worth another man’s hour, but rather that one man during an hour is worth just as much as another man during an hour. Time is everything, man is nothing; he is, at the most, time’s carcase. Quality no longer matters. Quantity alone decides everything; hour for hour, day for day; but this equalizing of labor is not by any means the work of M. Proudhon’s eternal justice; it is purely and simply a fact of modern industry.
In the automatic workshop, one worker’s labor is scarely distinguishable in any way from another worker’s labor: workers can only be distinguished one from another by the length of time they take for their work. Nevertheless, this quantitative difference becomes, from a certain point of view, qualitative, in that the time they take for their work depends partly on purely material causes, such as physical constitution, age and sex; partly on purely negative moral causes, such as patience, imperturbability, diligence. In short, if there is a difference of quality in the labor of different workers, it is at most a quality of the last kind, which is far from being a distinctive speciality. This is what the state of affairs in modern industry amounts to in the last analysis. It is upon this equality, already realized in automatic labor, that M. Proudhon wields his smoothing-plane of “equalization,” which he means to establish universally in “time to come!”
All the “equalitarian” consequences which M. Proudhon deduces from Ricardo's doctrine are based on a fundamental error. He confounds the value of commodities measured by the quantity of labor embodied in them with the value of commodities measured by “the value of labor.” If these two ways of measuring the value of commodities were equivalent, it could be said indifferently that the relative value of any commodity is measured by the quantity of labor embodied in it; or that it is measured by the quantity of labor it can buy; or again that it is measured by the quantity of labor which can acquire it. But this is far from being so. The value of labor can no more serve as a measure of value than the value of any other commodity. A few examples will suffice to explain still better what we have just stated.
If a quarter of corn cost two days' labor instead of one, it would have twice its original value; but it would not set in operation double the quantity of labor, because it would contain no more nutritive matter than before. Thus the value of the corn, measured by the quantity of labor used to produce it, would have doubled; but measured either by the quantity of labor it can buy or the quantity of labor with which it can be bought, it would be far from having doubled. On the other hand, if the same labor produced twice as many clothes as before, their relative value would fall by half; but, nevertheless, this double quantity of clothing would not thereby be reduced to disposing over only half the quantity of labor, nor could the same labor command the double quantity of clothing; for half the clothes would still go on rendering the worker the same service as before.
Thus it is going against economic facts to determine the relative value of commodities by the value of labor. It is moving in a vicious circle, it is to determine relative value by a relative value which itself needs to be determined.
It is beyond doubt that M. Proudhon confuses the two measures, measure by the labor time needed for the production of a commodity and measure by the value of the labor. “Any man's labor,” he says, “can buy the value it represents.” Thus, according to him, a certain quantity of labor embodied in a product is equivalent to the worker's payment, that is, to the value of labor. It is the same reasoning that makes him confuse cost of production with wages.
“What are wages? They are the cost price of corn, etc., the integral price of all things.”
Let us go still further.
“Wages are the proportionality of the elements which compose wealth.” What are wages? They are the value of labor.
Adam Smith takes as the measure of value, now the time of labor needed for the production of a commodity, now the value of labor. Ricardo exposes this error by showing clearly the disparity of these two ways of measuring. M. Proudhon goes one better than Adam Smith in error by identifying the two things which the latter had merely put in juxtaposition.
It is in order to find the proper proportion in which workers should share in the products, or, in other words, to determine the relative value of labor, that M. Proudhon seeks a measure for the relative value of commodities. To find out the measure for the relative value of commodities he can think of nothing better than to give as the equivalent of a certain quantity of labor the sum total of the products it has created, which is as good as supposing that the whole of society consists merely of workers who receive their own produce as wages. In the second place, he takes for granted the equivalence of the working days of different workers. In short, he seeks the measure of the relative value of commoditiesin order to arrive at equal payment for the workers, and he takes the equality of wages as an already established fact, in order to go off on the search for the relative value of commodities. What admirable dialectics!
“Say and the economists after him have observed that labor being itself subject to valuation, being a commodity like any other commodity, it is moving in a vicious circle to treat it as the principle and the determining cause of value. In so doing, these economists, if they will allow me to say so, show a prodigious carelessness. Labor is said to have value not as a commodity itself, but in view of the values which it is supposed potentially to contain. The value of labor is a figurative expression, an anticipation of the cause for the effect. It is a fiction of the same stamp as the productivity of capital. Labor produces, capital has value....
“By a sort of ellipsis one speaks of the value of labor....
“Labor like liberty... is a thing vague and indeterminate by nature, but defined qualitatively by its object, that is to say, it becomes a reality by the product.”
“But is there any need to dwell on this? The moment the economist (read M. Proudhon) changes the name of things, vera rerum vocabula [the true name of things], he is implicitly confessing his impotence and proclaiming himself not privy to the cause."
(Proudhon, I, 188)
We have seen that M. Proudhon makes the value of labor the “determining cause” of the value of products to such an extent that for him wages, the official name for the “value of labor,” form the integral price of all things: that is why Say's objection troubles him. In labor as a commodity, which is a grim reality, he sees nothing but a grammatical ellipsis. Thus the whole of existing society, founded on labor as a commodity, is henceforth founded on a poetic licence, a figurative expression. If society wants to “eliminate all the drawbacks” that assail it, well, let it eliminate all the ill-sounding terms, change the language; and to this end it has only to apply to the Academy for a new edition of its dictionary. After all that we have just seen, it is easy for us to understand why M. Proudhon, in a work on political economy, has to enter upon long dissertations on etymology and other parts of grammar. Thus he is still learnedly discussing the antiquated derivation of servus [a slave, servant] from servare [To preserve]. These philological dissertations have a deep meaning, an esoteric meaning – they form an essential part of M. Proudhon's argument.
Labor , inasmuch as it is bought and sold, is a commodity like any other commodity, and has, in consequence, an exchange value. But the value of labor, or labor as a commodity, produces as little as the value of wheat, or wheat as a commodity, serves as food.
Labor “is worth” more or less, according to whether food commodities are more or less dear, whether the supply and demand of hands exist to such or such a degree, etc., etc.
Labor is not a “vague thing"; it is always some definite labor, it is never labor in general that is bought and sold. It is not only labor that is qualitatively defined by the object; but also the object which is determined by the specific quality of labor.
Labor, in so far as it is bought and sold, is itself a commodity. Why is it bought? “Because of the values it is supposed potentially to contain.” But if a certain thing is said to be a commodity, there is no longer any question as to the reason why it is bought, that is, as to the utility to be derived from it, the application to be made of it. It is a commodity as an object of traffic. All M. Proudhon's arguments are limited to this: labor is not bought as an immediate object of consumption. No, it is bought as an instrument of production, as a machine would be bought. As a commodity, labor has no value and does not produce. M. Proudhon might just as well have said that there is no such thing as a commodity, since every commodity is obtained merely for some utilitarian purpose, and never as a commodity in itself.
In measuring the value of commodities by labor, M. Proudhon vaguely glimpses the impossibility of excluding labor from this same measure, in so far as labor has a value, as labor is a commodity. He has a misgiving that it is turning the wage minimum into the natural and normal price of immediate labor, that it is accepting the existing state of society. So, to get away from this fatal consequence, he faces about and asserts that labor is not a commodity, that it cannot have value. He forgets that he himself has taken the value of labor as a measure, he forgets that his whole system rests on labor as a commodity, on labor which is bartered, bought, sold, exchanged for produce, etc., on labor, in fact, which is an immediate source of income for the worker. He forgets everything.
To save his system, he consents to sacrifice its basis.
Et propter vitam vivendi perdere causas!
We now come to a new definition of “constituted value.”
“Value is the proportional relation of the products which constitute wealth.”
Let us note in the first place that the single phrase “relative or exchange value” implies the idea of some relation in which products are exchanged reciprocally. By giving the name “proportional relation” to this relation, no change is made in the relative value, except in the expression. Neither the depreciation nor the enhancement of the value of a product destroys its quality of being in some “proportional relation” with the other products which constitute wealth.
Why then this new term, which introduces no new idea?
“Proportional relation” suggests many other economic relations, such as proportionality in production, the true proportion between supply and demand, etc., and M. Proudhon is thinking of all that when he formulates this didactic paraphrase of marketable value.
In the first place, the relative value of products being determined by the comparative amount of labor used in the production of each of them, proportional relations, applied to this special case, stand for the respective quota of products which can be manufactured in a given time, and which in consequence are given in exchange for one another.
Let us see what advantage M. Proudhon draws from this proportional relation.
Everyone knows that when supply and demand are evenly balanced, the relative value of any product is accurately determined by the quantity of labor embodied in it, that is to say, that this relative value expresses the proportional relation precisely in the sense we have just attached to it. M. Proudhon inverts the order of things. Begin, he says, by measuring the relative value of a product by the quantity of labor embodied in it, and supply and demand will infallibly balance one another. Production will correspond to consumption, the product will always be exchangeable. Its current price will express exactly its true value. Instead of saying like everyone else: when the weather is fine, a lot of people are to be seen going out for a walk. M. Proudhon makes his people go out for a walk in order to be able to ensure them fine weather.
What M. Proudhon gives as the consequence of marketable value determined a priori by labor time could be justified only by a law couched more or less in the following terms:
Products will in future be exchanged in the exact ratio of the labor time they have cost. Whatever may be the proportion of supply to demand, the exchange of commodities will always be made as if they had been produced proportionately to the demand. Let M. Proudhon take it upon himself to formulate and lay down such a law, and we shall relieve him of the necessity of giving proofs. If, on the other hand, he insists on justifying his theory, not as a legislator, but as an economist, he will have to prove that the time needed to create a commodity indicates exactly the degree of its utility and marks its proportional relation to the demand, and in consequence, to the total amount of wealth. In this case, if a product is sold at a price equal to its cost of production, supply and demand will always be evenly balanced; for the cost of production is supposed to express the true relation between supply and demand.
Actually, M. Proudhon sets out to prove that labor time needed to create a product indicates its true proportional relation to needs, so that the things whose production costs the least time are the most immediately useful, and so on, step by step. The mere production of a luxury object proves at once, according to this doctrine, that society has spare time which allows it to satisfy a need for luxury.
M. Proudhon finds the very proof of his thesis in the observation that the most useful things cost the least time to produce, that society always begins with the easiest industries and successively “starts on the production of objects which cost more labor time and which correspond to a higher order of needs.”
M. Proudhon borrows from M. Dunoyer the example of extractive industry – fruit-gathering, pasturage, hunting, fishing, etc. – which is the simplest, the least costly of industries, and the one by which man began “the first day of his second creation.” The first day of his first creation is recorded in Genesis, which shows God as the world's first manufacturer.
Things happen in quite a different way from what M. Proudhon imagines. The very moment civilization begins, production begins to be founded on the antagonism of orders, estates, classes, and finally on the antagonism of accumulated labor and actual labor. No antagonism, no progress. This is the law that civilization has followed up to our days. Till now the productive forces have been developed by virtue of this system of class antagonisms. To say now that, because all the needs of all the workers were satisfied, men could devote themselves to the creation of products of a higher order – to more complicated industries – would be to leave class antagonism out of account and turn all historical development upside down. It is like saying that because, under the Roman emperors, muraena were fattened in artificial fishponds, therefore there was enough to feed abundantly the whole Roman population. Actually, on the contrary, the Roman people had not enough to buy bread with, while the Roman aristocrats had slaves enough to throw as fodder to the muraena.
The price of food has almost continuously risen, while the price of manufactured and luxury goods has almost continuously fallen. Take the agricultural industry itself; the most indispensable objects, like corn, meat, etc., rise in price, while cotton, sugar, coffee, etc., fall in a surprising proportion. And even among comestibles proper, the luxury articles, like artichokes, asparagus, etc., are today relatively cheaper than foodstuffs of prime necessity. In our age, the superfluous is easier to produce than the necessary. Finally, at different historical epochs, the reciprocal price relations are not only different, but opposed to one another. In the whole of the Middle Ages, agricultural products were relatively cheaper than manufactured products; in modern times they are in inverse ratio. Does this mean that the utility of agricultural products has diminished since the Middle Ages?
The use of products is determined by the social conditions in which the consumers find themselves placed, and these conditions themselves are based on class antagonism.
Cotton, potatoes and spirits are objects of the most common use. Potatoes have engendered scrofula; cotton has to a great extent driven out flax and wool, although wool and flax are, in many cases, of greater utility, if only from the point of view of hygiene; finally, spirits have got the upper hand of beer and wine, although spirits used as an alimentary substance are everywhere recognized to be poison. For a whole century, governments struggled in vain against the European opium; economics prevailed, and dictated its orders to consumption.
Why are cotton, potatoes and spirits the pivots of bourgeois society? Because the least amount of labor is needed to produce them, and, consequently, they have the lowest price. Why does the minimum price determine the maximum consumption? Is it by any chance because of the absolute utility of these objects, their intrinsic utility, their utility insomuch as they correspond, in the most useful manner, in the needs of the worker as a man, and not to the man as a worker? No, it is because in a society founded on poverty the poorest products have the fatal prerogative of being used by the greatest number.
To say now that because the least costly things are in greater use, they must be of greater utility, is saying that the wide use of spirits, because of their low cost of production, is the most conclusive proof of their utility; it is telling the proletarian that potatoes are more wholesome for him than meat; it is accepting the present state of affairs; it is, in short, making an apology, with M. Proudhon, for a society without understanding it.
In a future society, in which class antagonism will have ceased, in which there will no longer be any classes, use will no longer be determined by the minimum time of production; but the time of production devoted to different articles will be determined by the degree of their social utility.
To return to M. Proudhon's thesis: the moment the labor time necessary for the production of an article ceases to be the expression of its degree of utility, the exchange value of this same article, determined beforehand by the labor time embodied in it, becomes quite usable to regulate the true relation of supply to demand, that is, the proportional relation in the sense M. Proudhon at the moment attributes to it.
It is not the sale of a given product at the price of its cost of production that constitutes the “proportional relation” of supply to demand, or the proportional quota of this product relatively to the sum total of production; it is the variations in supply and demand that show the producer what amount of a given commodity he must produce in order to receive in exchange at least the cost of production. And as these variations are continually occurring, there is also a continual movement of withdrawl and application of capital in the different branches of industry.
“It is only in consequence of such variations that capital is apportioned precisely, in the requisite abundance and no more, to the production of the different commodities which happen to be in demand. With the rise or fall of price, profits are elevated above, or depressed below their general level, and capital is either encouraged to enter into, or is warned to depart from, the particular employment in which the variation has taken place.”
“When we look at the markets of a large town, and observe how regularly they are supplied both with home and foreign commodities, in the quantity in which they are required, under all the circumstances of varying demand, arising from the caprice of taste, or a change in the amount of population, without often producing either the effects of a glut from a too abundant supply, or an enormously high price from the supply being unequal to the demand, we must confess that the principle which apportions capital to each trade in the precise amount that is required, is more active than is generally supposed.”
(Ricardo, Vol.I, pp.105 and 108)
If M. Proudhon admits that the value of products is determined by labor time, he should equally admit that it is the fluctuating movement alone that in society founded on individual exchanges make labor the measure of value. There is no ready-made constituted “proportional relation,” but only a constituting movement.
We have just seen in what sense it is correct to speak of “proportion” as of a consequence of value determined by labor time. We shall see now how this measure by time, called by M. Proudhon the “law of proportion,” becomes transformed into a law of disproportion.
Every new invention that enables the production in one hour of that which has hitherto been produced in two hours depreciates all similar products on the market. Competition forces the producer to sell the product of two hours as cheaply as the product of one hour. Competition carries into effect the law according to which the relative value of a product is determined by the labor time needed to produce it. Labor time serving as the measure of marketable value becomes in this way the law of the continual depreciation of labor. We will say more. There will be depreciation not only of the commodities brought into the market, but also of the instruments of production and of whole plants. This fact was already pointed out by Ricardo when he said:
“By constantly increasing the facility of production, we constantly diminish the value of some of the commodities before produced.”
Sismondi goes further. He sees in this “value constituted” by labor time, the source of all the contradictions of modern industry and commerce.
“Mercantile value,” he says, “is always determined in the long run by the quantity of labor needed to obtain the thing evaluated: it is not what it has actually cost, but what it would cost in the future with, perhaps, perfected means; and this quantity, although difficult to evaluate, is always faithfully established by competition....
“It is on this basis that the demand of the seller as well as the supply of the buyer is reckoned. The former will perhaps declare that the thing has cost him 10 days' labor; but if the latter realizes that it can henceforth be produced with eight days' labor, in the event of competition proving this to the two contracting parties, the value will be reduced, and the market price fixed at eight days only. Of course, each of the parties believes that the thing is useful, that it is desired, that without desire there would be no sale; but the fixing of the price has nothing to do with utility."
(Etudes, etc., Vol.II, p.267)
It is important to emphasize the point that what determines value is not the time taken to produce a thing, but the minimum time it could possibly be produced in, and the minimum is ascertained by competition. Suppose for a moment that there is no more competition and consequently no longer any means to ascertain the minimum of labor necessary for the production of a commodity; what will happen? It will suffice to spend six hours' work on the production of an object, in order to have the right, according to M. Proudhon, to demand in exchange six times as much as the one who has taken only one hour to produce the same object.
Instead of a “proportional relation,” we have a disproportional relation, at any rate if we insist on sticking to relations, good or bad.
The continual depreciation of labor is only one side, one consequence of the evaluation of commodities by labor time. The excessive raising of prices, overproduction and many other features of industrial anarchy have their explanation in this mode of evaluation.
But does labor time used as a measure of value give rise at least to the proportional variety of products that so delights M. Proudhon?
On the contrary, monopoly in all its monotony follows in its wake and invades the world of products, just as to everybody's knowledge monopoly invades the world of the instruments of production. It is only in a few branches of industry, like the cotton industry, that very rapid progress can be made. The natural consequence of this progress is that the products of cotton manufacture, for instance, fall rapidly in price: but as the price of cotton goes down, the price of flax will be replaced by cotton. In this way, flax has been driven out of almost the whole of North America. And we have obtained, instead of the proportional variety of products, the dominance of cotton.
What is left of this “proportional relation"? Nothing but the pious wish of an honest man who would like commodities to be produced in proportions which would permit of their being sold at an honest price. In all ages good-natured bourgeois and philanthropic economists have taken pleasure in expressing this innocent wish.
Let us hear what old Boisguillebert says:
“The price of commodities,” he says, “must always be proportionate; for it is such mutual understanding alone that can enable them to exist together so as to give themselves to one another at any moment (here is M. Proudhon's continual exchangeability) and reciprocally give birth to one another. ...
"As wealth, then, is nothing but this continual intercourse between man and man, craft and craft, etc., it is a frightful blindness to go looking for the cause of misery elsewhere than in the cessation of such traffic brought about by a disturbance of proportion in prices."
(Dissertation sur la nature des richesses,
Daire's ed. [pp.405 and 408])
[Boisguillebert's work is quoted from the symposium
Economistes-financiers du XVIII siecle. Prefaced
by a historical sketch on each author and accompanied
by commentaries and explanatory notes by Eugene Daire;
Let us listen also to a modern economist:
“The great law as necessary to be affixed to production, that is, the law of proportion, which alone can preserve the continuity of value....
“The equivalent must be guaranteed....
“All nations have attempted, at various periods of their history, by instituting numerous commercial regulations and restrictions, to effect, in some degree, the object here explained....
“But the natural and inherent selfishness of man... has urged him to break down all such regulations. Proportionate Production is the realization of the entire truth of the Science of Social Economy."
(W. Atkinson, Principles of Political Economy,
London 1840, pp.170-95)
Fuit Troja. [Troy is no more.] This true proportion between supply and demand, which is beginning once more to be the object of so many wishes, ceased long ago to exist. It has passed into the stage of senility. It was possible only at a time when the means of production were limited, when the movement of exchange took place within very restricted bounds. With the birth of large-scale industry this true proportion had to come to an end, and production is inevitably compelled to pass in continuous succession through vicissitudes of prosperity, depression, crisis, stagnation, renewed prosperity, and so on.
Those who, like Sismondi, wish to return to the true proportion of production, while preserving the present basis of society, are reactionary, since, to be consistent, they must also wish to bring back all the other conditions of industry of former times.
What kept production in true, or more or less true, proportions? It was demand that dominated supply, that preceded it. Production followed close on the heels of consumption. Large-scale industry, forced by the very instruments at its disposal to produce on an ever-increasing scale, can no longer wait for demand. Production precedes consumption, supply compels demands.
In existing society, in industry based on individual exchange, anarchy of production, which is the source of so much misery, is at the same time the source of all progress.
Thus, one or the other:
Either you want the true proportions of past centuries with present-day means of production, in which case you are both reactionary and utopian.
Or you want progress without anarchy: in which case, in order to preserve the productive forces, you must abandon individual exchange.
Individual exchange is suited only to the small-scale industry of past centuries with its corollary of “true proportion,” or else to large-scale industry with all its train of misery and anarchy.
After all, the determination of value by labor time – the formula M. Proudhon gives us as the regenerating formula of the future – is therefore merely the scientific expression of the economic relations of present-day society, as was clearly and precisely demonstrated by Ricardo long before M. Proudhon.
But does the “equalitarian” application of this formula at least belong to M. Proudhon? Was he the first to think of reforming society by transforming all men into actual workers exchanging equal amounts of labor? Is it really for him to reproach the Communists – these people devoid of all knowledge of political economy, these “obstinately foolish men,” these “paradise dreamers” – with not having found, before him, this “solution of the problem of the proletariat”?
Anyone who is in any way familiar with the trend of political economy in England cannot fail to know that almost all the Socialists in that country have, at different periods, proposed the equalitarian application of the Ricardian theory. We quote for M. Proudhon: Hodgskin, Political Economy, 1827; William Thompson, An Inquiry into the Principles of the Distribution of Wealth Most Conducive to Human Happiness, 1824; T. R. Edmonds, Practical Moral and Political Economy, 1828 , etc., etc., and four pages more of etc. We shall content ourselves with listening to an English Communist, Mr. Bray. We shall give the decisive passages in his remarkable work, Labor's Wrongs and Labor's Remedy, Leeds, 1839, and we shall dwell some time upon it, firstly, because Mr. Bray is still little known in France, and secondly, because we think that we have discovered in him the key to the past, present and future works of M. Proudhon.
“The only way to arrive at truth is to go at once to First Principles.... Let us... go at once to the source from whence governments themselves have arisen.... By thus going to the origin of the thing, we shall find that every form of government, and every social and governmental wrong, owes its rise to the existing social system – to the institution of property as it at present exists – and that, therefore, if we would end our wrongs and our miseries at once and for ever, the present arrangements of society must be totally subverted.... By thus fighting them upon their own ground, and with their own weapons, we shall avoid that senseless clatter respecting ‘visionaries' and ‘theorists', with which they are so ready to assail all who dare move one step from that beaten track which ‘by authority', has been pronounced to be the right one. Before the conclusions arrived at by such a course of proceeding can be overthrown, the economists must unsay or disprove those established truths and principles on which their own arguments are founded."
(Bray, pp.17 and 41)
“It is labor alone which bestows value....
“Every man has an undoubted right to all that his honest labor can procure him. When he thus appropriates the fruits of his labor, he commits no injustice upon any other human being; for he interferes with no other man's right of doing the same with the produce of his labor....
“All these ideas of superior and inferior – of master and man – may be traced to the neglect of First Principles, and to the consequent rise of inequality of possessions; and such ideas will never be subverted, so long as this inequality is maintained. Men have hitherto blindly hoped to remedy the present unnatural state of things... by destroying existing inequality; but it will be shortly seen... that misgovernment is not a cause, but a consequence – that it is not the creator, but the created – that is is the offspring of inequality of possessions; and that the inequality of possessions is inseparably connected with our present social system.”
(Bray, pp.33, 36 and 37)
“Not only are the greatest advantages, but strict justice also, on the side of a system of equality.... Every man is a link, in the chain of effects – the beginning of which is but an idea, and the end, perhaps, the production of a piece of cloth. Thus, although we may entertain different feelings towards the several parties, it does not follow that one should be better paid for his labor than another. The inventor will ever receive, in addition to his just pecuniary reward, that which genius only can obtain from us – the tribune of our admiration....
“From the very nature of labor and exchange, strict justice not only requires that all exchangers should be mutually, but that they should likewise be equally, benefited. Men have only two things which they can exchange with each other, namely, labor, and the produce of labor....
“If a just system of exchanges were acted upon, the value of articles would be determined by the entire cost of production; and equal values should always exchange for equal values. If, for instance, it takes a hatter one day to make a hat, and a shoemaker the same time to make a pair of shoes – supposing the material used by each to be of the same value – and they exchange these articles with each other, they are not only mutually but equally benefited: the advantage derived by either party cannot be a disadvantage to the other, as each has given the same amount of labor, and the materials made use of by each were of equal value. But if the hatter should obtain two pair of shoes for one hat – time and value of material being as before – the exchange would clearly be an unjust one. The hatter would defraud the shoemaker of one day's labor; and were the former to act thus in all his exchanges, he would receive, for the labor of half a year, the product of some other person's whole year. We have heretofore acted upon no other than this most unjust system of exchanges – the workmen have given the capitalist the labor of a whole year, in exchange for the value of only half a year – and from this, and not from the assumed inequality of bodily and mental powers in individuals, has arisen the inequality of wealth and power which at present exists around us. It is an inevitable condition inequality of exchanges – of buying at one price and selling at another – that capitalists shall continue to be capitalists, and working men to be working men – the one a class of tyrants and the other a class of slaves – to eternity....
“The whole transaction, therefore, plainly shews that the capitalists and proprietors do no more than give the working man, for his labor of one week, a part of the wealth which they obtained from him the week before! – which amounts to giving him nothing for something....
“The whole transaction, therefore, between the producer and the capitalist is a palpable deception, a mere farce: it is, in fact, in thousands of instances, no other than a barefaced though legalized robbery."
(Bray, pp.45, 48, 49 and 50)
“... the gain of the employer will never cease to be the loss of the employed – until the exchanges between the parties are equal; and exchanges never can be equal while society is divided into capitalists and producers – the last living upon their labor and the first bloating upon the profit of that labor.
“It is plain that, establish whatever form of government we will... we may talk of morality and brotherly love... no reciprocity can exist where there are unequal exchanges. Inequality of exchanges, as being the cause of inequality of possessions, is the secret enemy that devours us."
(Bray, pp.51 and 52)
“It has been deduced, also, from a consideration of the intention and end of society, not only that all men should labor, and thereby become exchangers, but that equal values should always exchange for equal values – and that, as the gain of one man ought never to be the loss of another, value should be determined by cost of production. But we have seen, that, under the present arrangements of society... the gain of the capitalist and the rich man is always the loss of the workman – that this result will invariably take place, and the poor man be left entirely at the mercy of the rich man, under any and every form of government, so long as there is inequality of exchanges – and that equality of exchanges can be ensured only under social arrangements in which labor is universal....
“If exchanges were equal, would the wealth of the present capitalists gradually go from them to the working classes.”
“So long as this system of unequal exchanges is tolerated, the producers will be almost as poor and as ignorant and as hardworked as they are at present, even if every governmental burthen be swept away and all taxes be abolished... nothing but a total change of this system – an equality of labor and exchanges – can alter this state of rights....
“The producers have but to make an effort – and by them must every effort for their own redemption be made – and their chains will be snapped asunder forever....
“As an end, the political equality is there a failure, as a means, also, it is there a failure.
“Where equal exchanges are maintained, the gain of one man cannot be the loss of another; for every exchange is then simply a transfer, and not a sacrifice of labor and wealth. Thus, although under a social system based on equal exchanges, a parsimonious man may become rich, his wealth will be no more than the accumulated produce of his own labor. He may exchange his wealth, or he may give it to others... but a rich man cannot continue wealthy for any length of time after he has ceased to labor. Under equality of exchanges, wealth cannot have, as it now has, a procreative and apparently self-generating power, such as replenishes all waste from consumption; for, unless it be renewed by labor, wealth, when once consumed, is given up for ever. That which is now called profit and interest cannot exist as such in connection with equality of exchanges; for producer and distributor would be alike remunerated, and the sum total of their labor would determine the value of the article created and brought to the hands of the consumer....
“The principle of equal exchanges, therefore, must from its very nature ensure universal labor."
(Bray, pp.67, 88, 89, 94, 109-10)
After having refuted the objections of the economists to communism, Mr. Bray goes on to say:
“If, then a changed character be essential to the success of the social system of community in its most perfect form – and if, likewise, the present system affords no circumstances and no facilities for effecting the requisite change of character and preparing man for the higher and better state desired – it is evident that these things must necessarily remain as they are.... or else some preparatory step must be discovered and made use of – some movement partaking partly of the present and partly of the desired system – some intermediate resting place, to which society may go with all its faults and its follies, and from which it may move forward, imbued with those qualities and attributes without which the system of community and equality cannot as such have existence.”
“The whole movement would require only co-operation in its simplest form.... Cost of production would in every instance determine value; and equal values would always exchange for equal values. If one person worked a whole week, and another worked only half a week, the first would receive double the remuneration of the last; but this extra pay of the one would not be at the expense of the other, nor would the loss incurred by the last man fall in any way upon the first. Each person would exchange the wages he individually received for commodities of the same value as his respective wages; and in no case could the gain of one man or one trade be a loss to another man or another trade. The labor of every individual would alone determine his gains of his losses....
“... By means of general and local boards of trade... the quantities of the various commodities required for consumption – the relative value of each in regard to each other – the number of hands required in various trades and descriptions of labor – and all other matters connected with production and distribution, could in a short time be as easily determined for a nation as for an individual company under the present arrangements....
“As individuals compose families, and families towns, under the existing system, so likewise would they after the joint-stock change had been effected. The present distribution of people in towns and villages, bad as it is, would not be directly interfered with....
“Under this joint-stock system, the same as under that now existing, every individual would be at liberty to accumulate as much as he pleased, and to enjoy such accumulations when and where he might think proper....
“The great productive section of the community... is divided into an indefinite number of smaller sections, all working, producing and exchanging their products on a footing of the most perfect equality....
“And the joint-stock modification (which is nothing but a concession to present-day society in order to obtain communism), by being so constituted as to admit of individual property in productions in connection with a common property in productive powers – making every individual dependent on his own exertions, and at the same time allowing him an equal participation in every advantage afforded by nature and art – is fitted to take society as it is, and to prepare the way for other and better changes."
(Bray, pp.158, 160, 162, 168 and 194)
We now only need to reply in a few words to Mr. Bray who without us and in spite of us had managed to supplant M. Proudhon, except that Mr. Bray, far from claiming the last word on behalf of humanity, proposes merely measures which he thinks good for a period of transition between existing society and a community regime.
One hour of Peter's labor exchanges for one hour of Paul's labor. That is Mr. Bray's fundamental axiom.
Let us suppose Peter has 12 hours' labor before him, and Paul only six. Peter will consequently have six hours' labor left over. What will he do with these six hours' labor?
Either he will do nothing with them – in which case he will have worked six hours for nothing; or else he will remain idle for another six hours to get even; or else, as a last resource, he will give these six hours' labor, which he has no use for, to Paul into the bargain.
What in the end will Peter have earned more than Paul? Some hours of labor? No! He will have gained only hours of leisure; he will be forced to play the loafer for six hours. And in order that this new right to loaf might be not only relished but sought after in the new society, this society would have to find in idleness its highest bliss, and to look upon labor as a heavy shackle from which it must break free at all costs.
And indeed, to return to our example, if only these hours of leisure that Peter had gained in excess of Paul were really a gain! Not in the least. Paul, beginning by working only six hours, attains by steady and regular work a result that Peter secures only by beginning with an excess of work. Everyone will want to be Paul, there will be a competition to occupy Paul's position, a competition in idleness.
Well, then! What has the exchange of equal quantities of labor brought us? Overproduction, depreciation, excess of labor followed by unemployment; in short, economic relations such as we see in present-day society, minus the competition of labor.
No! We are wrong! These is still an expedient which may save this new society of Peters and Pauls. Peter will consume by himself the product of the six hours' labor which he has left. But from the moment he has no longer to exchange because he has produced, he has no need to produce for exchange; and the whole hypothesis of a society founded on the exchange and division of labor will fall to the ground. Equality of exchange will have been saved by the simple fact that exchange will have ceased to be: Paul and Peter would arrive at the position of Robinson.
Thus, if all the members of society are supposed to be actual workers, the exchange of equal quantities of hours of labor is possible only on condition that the number of hours to be spent on material production is agreed on before hand. But such an agreement negates individual exchange.
We still come to the same result, if we take as our starting point not the distribution of the products created but the act of production. In large-scale industry, Peter is not free to fix for himself the time of his labor, for Peter's labor is nothing without the co-operation of all the Peters and all the Pauls who make up the workshop. This explains very well the dogged resistance which the English factory owners put up to the Ten Hours' Bill. They knew only too well that a two-hours' reduction of labor granted to women and children would carry with it an equal reduction of working hours for adult men. It is in the nature of large-scale industry that working hours should be equal for all. What is today the result of capital and the competition of workers among themselves will be tomorrow, if you sever the relation between labor and capital, an actual agreement based upon the relation between the sum of productive forces and the sum of existing needs.
But such an agreement is a condemnation of individual exchange, and we are back again at our first conclusion!
In principle, there is no exchange of products – but there is the exchange of the labor which co-operated in production. The mode of exchange of products depends upon the mode of exchange of the productive forces. In general, the form of exchange of products corresponds to the form of production. Change the latter, and the former will change in consequence. Thus in the history of society we see that the mode of exchanging products is regulated by the mode of producing them. Individual exchange corresponds also to a definite mode of production which itself corresponds to class antagonism. There is thus no individual exchange without the antagonism of classes.
But the respectable conscience refuses to see this obvious fact. So long as one is a bourgeois, one cannot but see in this relation of antagonism a relation of harmony and eternal justice, which allows no one to gain at the expense of another. For the bourgeois, individual exchange can exist without any antagonism of classes. For him, these are two quite unconnected things. Individual exchange, as the bourgeois conceives it, is far from resembling individual exchange as it actually exists in practice.
Mr. Bray turns the illusion of the respectable bourgeois into an ideal he would like to attain. In a purified individual exchange, freed from all the elements of antagonism he finds in it, he sees an “equalitarian" relation which he would like society to adopt generally.
Mr. Bray does not see that this equalitarian relation, this corrective ideal that he would like to apply to the world, is itself nothing but the reflection of the actual world; and that therefore it is totally impossible to reconstitute society on the basis of what is merely an embellished shadow of it. In proportion as this shadow takes on substance again, we perceive that this substance, far from being the transfiguration dreamt of, is the actual body of existing society. [*3]
[*1] Ricardo, as is well known, determines the value of a commodity by the quantity of labor necessary for its production. Owing, however, to the prevailing form of exchange in every mode of production based on production of commodities, including therefore the capitalist mode of production, this value is not expressed directly in quantities of labor but in quantities of some other commodity. The value of a commodity expressed in a quantity of some other commodity (whether money or not) is termed by Ricardo its relative value. [Note by Engels to 1885 German edition]
[*2] The thesis that the “natural,” i.e., normal, price of labor power coincides with the wage minimum, i.e., with the equivalent in value of the means of subsistence absolutely indispensable for the life and procreation of the worker, was first put forward by me in Sketches for a Critique of Political Economy (Deutsch-Franzosische Jahrbucher , Paris 1844) and in The Condition of the Working Class in England in 1844. As seen here, Marx at that time excepted the thesis. Lassalle took it over from both of us. Although, however, in reality wages have a constant tendency to approach the minimum, the above thesis is nevertheless incorrect. The fact that labor is regularly and on the average paid below its value cannot alter its value. In Capital, Marx has put the above thesis right (Section on Buying and Selling Labor of Power) and also (Chapter 25: The General Law of Capitalist Accumulation) analyzed the circumstances which permit capitalist production to depress the price of labor power more and more below its value.[Note by Engels to 1885 German edition]
 In the copy Marx presented to N. Utina in 1876 after this word “labor” Marx adds “labor power"; this addition is found in the 1896 French edition.
[*3] Mr. Bray's theory, like all theories, has found supporters who have allowed themselves to be deluded by appearances. Equitable labor-exchange bazaars have been set up in London, Sheffield, Leeds and many other towns in England. These bazaars have all ended in scandalous failures after having absorbed considerable capital. The taste for them has gone for ever. You are warned, M. Proudhon! [Note by Marx]
It is known that Proudhon did not take this warning to heart. In 1849 he himself made an attempt with a new Exchange Bank in Paris. The bank, however, failed before it had got going properly: a court case against Proudhon had to serve to cover its collapse. [Note by Engels, 1885 German Edition]