Marx-Engels Correspondence 1890

Engels to Conrad Schmidt
In Berlin

London, October 27 1890

Source: New International, Vol.1 No.3, September-October 1934, pp.81-85;
Translated: Sidney Hook;
Transcribed: by Einde O’Callaghan in 2006.

The letters to Schmidt, Starkenburg and Bloch were first brought to light by Eduard Bernstein in his Documente des Socialismus in 1902. They were first translated into English by Sidney Hook as an appendix to his Towards an Understanding of Karl Marx. New International are indebted to the author and his publishers, The John Day Co., for their kind permission to reprint the letters. With one exception, the foot-notes are from the German edition edited by Dr. Hermann Duncker. By arrangement, we have made certain minor emendations in the translation on the basis of the original text.

London, October 27, 1890.

Dear Schmidt:

SEIZE the first free moment to write you. I think you would be well advised to accept the position at Zurich. [1] You can always learn considerably about economic matters there, especially if you bear in mind that Zurich is still only a third-rate money and speculation market, and that, consequently, the effects which make themselves felt there are weakened, and indeed deliberately falsified by double and triple-fold refraction. But one acquires a practical knowledge of the business and is compelled to follow first-hand market reports from London, New York, Paris, Berlin, Vienna – and the world market is then revealed in its reflected form as money and security market. Of the economic, political and other reflections the same thing is true as of the images in the human eye. They all pass through a convex lens and therefore appear upside down, standing on their head. Only the nervous system is lacking to set them right on their feet again. The money-market expert sees the movement of industry and the world market only in the inverted reflection of the money and security market, and takes the effect for the cause. I saw that take place as far back as the Forties in Manchester. The London market reports were absolutely useless as a guide to the development of industry and its periodic maxima and minima because m’lords wanted to explain everything as arising from the crises in the money market which were, after all, only symptoms. Behind the matter at that time was the desire to explain away the fact that industrial crises arose out of temporary overproduction; in addition there was a bias which invited distortion. This last is now irrelevant – once for all, at least for us; besides it is a fact, that the money market can also have its own crises, in which direct industrial disturbances play only a subordinate role or none whatever. In this connection there is still much to be ascertained and investigated especially in the last twenty years.

Wherever there is a division of labor on a social scale, there will also be found the growing independence of workers in relation to each other. Production is in the last instance the decisive factor. However, as soon as the commercial exchange of commodities separates itself from actual production it follows a movement which, although as a whole still dominated by production, in turn obeys in its particular details and within the sphere of its general dependence, its own laws. These flow from the nature of the new factor involved. This movement has its own phases and reacts in turn upon the course of production. The discovery of America resulted from the hunger for money, which had already driven the Portuguese to Africa (cf. Soetbeer’s Edelmetall-Produktion), because the tremendous expansion of European industry in the fourteenth and fifteenth centuries together with the corresponding commercial activity demanded more means of exchange than Germany – the great silver country from 1450 to 1550 – could provide. The conquest of India by the Portuguese, Dutch, and English from 1500 to 1800 was undertaken for the sake of imports from India. At that time no one thought of exports. And yet what colossal counter-effects these discoveries and conquests which were determined purely by interests of trade, had upon exports to those countries and upon the development of large scale industry. The same is true for the money market. Just as soon as dealing in money is separated from commodity exchange, it acquires a development of its own, special laws determined by its particular nature, and its own phases. Yet they all take place within the given limits and conditions of production and commodity exchange. Where dealing in money is extended in the course of its further evolution to include securities that are not merely government consols but industrials and railroad stocks, and thereby wins direct control over a phase of the production which as a whole controls it, the reaction of the money market upon production becomes all the stronger and more complicated. The investment bankers are the owners of railroads, mines, steel mills, etc. These means of production take on a double aspect: business has to be run now with an eye to the interests of direct production, and now with an eye to the needs of the stock-holders in so far as they are money lenders. The crassest illustration of this is furnished by the activities of the North American railroads which depend completely, upon the immediate market operations of a Jay Gould, Vanderbilt and others – operations that are totally foreign to the road in question and its interests as a common carrier. And even here in England we have witnessed decades of struggle between different railway companies in competitive territories in which an enormous amount of money went up in smoke not in the interest of production and communication but solely because of a rivalry whose main function was to make possible market operations of the wealthy stock-holders.

In these few intimations of my conception of the relation between production and commodity exchange, and of both to the money market, I have already answered in essence your questions concerning historical materialism in general. The matter can most easily be grasped from the standpoint of the division of labor. Society gives rise to certain public functions which it cannot dispense with. The people who are delegated to perform them constitute a new branch of the division of labor within society. They acquire therewith special interests in opposition even to those who have designated them; make themselves independent of them, and the state is here. And now the same thing takes place as in commodity exchange and later in money exchange: while the new independent power must, on the whole, submit to the movement of production, in turn it also reacts, by virtue of its immanent, i.e., its once transmitted but gradually developed relative independence, upon the conditions and course of production. There is a reciprocity between two unequal forces; on the one side, the economic movement; on the other, the new political power which strives for the greatest possible independence and which having once arisen is endowed with its own movement. The economic movement, upon the whole, asserts itself but it is affected by the reaction of the relatively independent political movement which it itself had set up. This political movement is on the one hand the state power, on the other, the opposition which comes to life at the same time with it. Just as the money market reflects, on the whole, with the qualifications indicated, the movement of the industrial market, but naturally in an inverted fashion, so there is reflected in the struggle between government and opposition, the struggle between already existing and contending classes but again in an inverted form, no longer direct but indirect, not as a class struggle but as a struggle for political principles. So inverted is this reflection that it required thousands of years to discover what was behind it.

The reaction of the state power upon economic development can take a three-fold form. It can run in the same direction, and then the tempo of development becomes accelerated; it can buck up against that development in which case today in every large nation the state power is sure to go to smash for good; or it can block economic development along some directions and lay down its path along others. This last case is ultimately reducible to one of either of the foregoing two. It is clear that in the second and third cases the political power can do great damage to the course of economic development and result in a great waste of energy and materials.

We must add to the above the case of conquest and brutal destruction of economic resources in which under certain circumstances it was possible in the past for a local or national economic development to be completely destroyed. Today cases of this kind usually produce opposite effects, at least among the large nations. Often it is the conquered who in the long run wins more economically, politically and morally than the conqueror.

The same is true for law. Just as soon as the necessity arises for the new division of labor which creates professional jurists, another new independent domain is opened which, for all its dependence upon production and trade in general, still possesses a special capacity to react upon these fields. In a modern state, law must not only correspond to the general economic situation and be its expression; it must also be its coherently unified expression, free from glaring internal inconsistencies. In order to achieve this, the fidelity with which the law reflects economic conditions constantly diminishes. This is all the truer, the more rarely it happens, that the legal code expresses the harsh, unrelieved and naked fact of class rule. For that contradicts the very “concept of law”. The pure and consistent jural concept of the revolutionary bourgeoisie of 1792-96 already appears falsified in many respects in the Code Napoleon. And in so far as it is incorporated it is subject to daily modifications of all kinds because of the growing power of the proletariat. That doesn’t prevent the Code Napoleon from serving as a legal model for new codifications of law in all parts of the world. The course of “legal development” consists, in large part, first in the attempt to erect an harmonious system of law by eliminating the contradictions flowing from the direct translation of economic relations into jural propositions; and then in the fact that the influence and compulsion exerted by the further economic development keeps on upsetting the system and plunging it into new contradictions. (I speak here for the time being only of civil law.)

The reflection of economic relations as principles of law is necessarily also an inverted one. The process takes place without the participants becoming conscious of it. The jurist imagines that he is operating with a priori propositions, while the latter are after all only reflections of the economic process. And so everything remains standing on its head. This inverted reflex so long as it is not recognized for what it is constitutes what we call ideological conceptions. That it is able to exert a reactive influence on the economic basis and within certain limits to modify it, seems to me to be self-evident. The foundations of the law of inheritance, corresponding stages in the development of the family being presupposed, are economic. Nonetheless it would be very hard to prove that, e.g., the absolute freedom of testamentary disposition in England, and the strongly restricted right in France. in all particulars have only economic causes. Yet both methods react in a very significant way upon the economic system in that they influence the distribution of wealth.

And now as concerns those ideological realms which tower still higher in the clouds – religion, philosophy, etc. – they all possess from pre-historical days an already discovered and traditionally accepted fund of – what we would today call idiocy. All of these various mistaken ideas of nature, of the very creation of man, of spirits, magical forces, etc., have as their basis, in the main, negative economic grounds. The primitive economic development of the pre-historical period is supplemented by false ideas of nature, but in places it is often also conditioned and even caused by them. However, even if economic need has been the chief driving force in the advance of natural knowledge, and has become even more so, it would be altogether pedantic to seek economic causes for all this primitive idiocy. The history of science is the history of the gradual elimination of this idiocy, i.e., its replacement by new, but always less absurd, idiocy. The people who supply it belong again to special spheres in the division of labor and imagine that they are working up an independent domain. And in so far as they constitute an independent group within the social division of labor, their products, inclusive of their errors, exerts a counter-acting influence upon the entire social development, even upon the economic. Nonetheless they still remain under the dominant influence of economic development. For example, in philosophy this is easiest to demonstrate for the bourgeois period. Hobbes was the first modern materialist (in the spirit of the eighteenth century) but an absolutist at a time when in the whole of Europe absolute monarchy was enjoying the height of its power and in England had taken up the struggle against the people. Locke was, in religion as in politics, a son of the class-compromise of 1688. The English Deists, and their more consistent followers, the French materialists, were the genuine philosophers of the bourgeoisie – the French, even of the bourgeois revolution. In German philosophy from Kant to Hegel the German philistine makes his way – now positively, now negatively. But as a definite domain within the division of labor, the philosophy of every age has as its presuppositions a certain intellectual material which it inherits from its predecessors and which is its own point of departure. That is why philosophy can play first violin in economically backward countries: France in the eighteenth century as opposed to England upon whose philosophy her own was based; and later Germany as opposed to both. But in France as in Germany, philosophy, like the general outburst of literary activity of that time, was a result of an economic upswing. The final supremacy of economic development even in these realms is now established but it takes place within the conditions which are set down by the particular realm: in philosophy, e.g., through the effect of economic influences (which in turn exert influence through disguised political, etc., forms) upon the existing philosophical material which our predecessors have handed down. Of itself economics produces no effects here directly; but it determines the kind of change and development the already existing intellectual material receives, and even that, for the most part, indirectly, since it is the political, jural and moral reflexes which exercize the greatest direct influence upon philosophy.

I have said what is necessary about religion in the last section on Feuerbach.

If Barth imagines that we deny all and every retroaction of the political, etc., reflexes of the economic movement upon that movement itself, he is simply contending against windmills. He ought at least take a glance at Marx’s Eighteenth Brumaire, which almost restricts itself to the treatment of the special role that political struggles and events play, naturally within the sphere of their general dependence upon economic conditions; or in Capital, e.g., the section on the working day, where legislation, which certainly is a political act, operates so decisively; or the section on the history of the bourgeoisie (Chap.24). Or else, why are we struggling for the political dictatorship of the proletariat, if political power has no economic effects? Force (i.e., the state power) is also an economic power!

But I have no time at present to criticize the book. The third volume must first come out, and besides I believe that, for example, even Bernstein can do the job quite well.

What all these gentlemen lack is dialectics. All they ever see is cause here, effect there. They do not at all see that this is a bare abstraction; that in the real world such metaphysical polar opposites exist only in crises; that the whole great process develops itself in the form of reciprocal action, to be sure of very unequal forces, in which the economic movement is far and away the strongest, most primary and decisive. They do not see that here nothing is absolute and everything relative. For them Hegel has never existed. Yours, etc.



1. Conrad Schmidt had written Engels that he intended to take over the commercial section of a Zurich newspaper. – H.D.