The Story of a Great Discovery, Vygodsky, 1965

Chapter 1

The theoretical luggage with which Marx arrived in London. in August 1849. The Poverty of Philosophy and Wage-Labour and Capital- the nucleus of his economic theory and the point of departure for further research. The theory of value and surplus-value of the classical bourgeois economists and their fundamental shortcomings. Marx's application of the materialist conception of history to political economy. Why the study of the subject-matter had to begin again "right from the start".

Standpoint for observing bourgeois society

Expelled from Paris, Marx arrived in London at the end of August 1849 and lived there for the rest of his life. In the middle of September he was joined by his wife and children from Paris and Frederick Engels also came during the first half of November. This was the start of a new period in Marx's theoretical activities, the period of the 1850's.

This new period can only be understood and comprehended when it is considered together with the preceding period of the 1840's with which it is inseparably associated.

As regards the science of economics, the greatest achievements of the 1840's were Marx's The Poverty of Philosophy, published in1847 in Paris and Brussels, and his lectures on Wage-Labour and Capital, held in December 1847 at the German Workingmen's Club of Brussels and printed as a series of leading articles in the Neue Rheinische Zeitung in April 1849.

In these works and on the basis of his materialist concept of history, Marx began to work out his theory of economics in detail. At the same time, he included in this his critique of the bourgeois economists.

In The Poverty of Philosophy, Marx exposed the fundamental methodological faults of the entire system of bourgeois political economy - its ahistorical character, its endeavours to represent the economic laws of capitalism as eternal laws of Nature. "Economists express the relations of bourgeois production ... as fixed, immutable, eternal categories ... Economists explain how production takes place in the above-mentioned relations, but what they do not explain is how these relations themselves are produced,. that is, the historical movement which gave them birth."[1]

As a result of his historical approach to social relations, Marx formulated in The Poverty of Philosophy one of the most important theses of his economic doctrine: The relations of production are not, as is the opinion of bourgeois economists, relations between things but relations between people with reference to things. This view of the relations of production enabled Marx to overcome the ahistorical character and empiricism of bourgeois economists.

In The Poverty of Philosophy, Marx clarified the real position of Smith and Ricardo in the history of the science of economics and showed that Proudhon's theory of economics, which was claimed to be the last word in political economy, was a step back in comparison with Smith and Ricardo. "Ricardo's theory of value is the scientific interpretation of actual economic life; M. Proudhon's theory of value is the utopian interpretation of Ricardo's theory."[2]

An idea of the qualitative advance achieved by Marx in his appreciation of the nature of the capitalist mode of production is conveyed by his critical commentaries on Ricardo's On the Principles of Political Economy in 1844. In these commentaries, Marx still rejected Ricardo's theory of labour-value from an incorrect standpoint.[3] In his Outlines of a Critique of Political Economy, Engels likewise attacked the labour-value theory. He wrote that "The difference between real value and exchange value is based on the fact - namely; that the value of a thing differs from the so-called equivalent given for it in trade; i.e., that this equivalent is not an equivalent."[4] Marx later made the following comment at this point: "Engels is trying to explain the difference between exchange-value and price by (postulating) that trade is impossible when goods are exchanged on the basis of their value."[5] Marx had dealt with this error in all its aspects in 1847. In The Poverty of Philosophy, he outlined, as it were, the point of departure for the next investigations in political economy. Above all, a critical analysis had to be made of the theories of Smith and Ricardo and the investigation of English economic conditions in general had to be- begun since the English bourgeoisie "is itself the type of the modern bourgeoisie ".[6] This important thesis resulted. from the concept of the economic social formation, it signified a practical aspect of this concept, and in the letter to Engels of 2nd April 1851 Marx quite specifically refers to the English economists A. Smith and D. Ricardo as marking the pinnacle of bourgeois economics.[7]

In The Poverty of Philosophy Marx had already shown that the production relations of mankind arc part of political economics and that the economic categories express these production relations.[8]

Of fundamental significance in this connection was the statement of the primacy of social production, of production relations forming a single entity with the productive forces as compared with the other social relations: "The mode of exchange of products depends upon the mode of exchange of the productive forces Thus in the history of society we see that the mode of exchanging products is regulated by the mode of producing them."[9]

The question -which must now be raised is to what extent did Marx work out his own theories of value and surplus-value in The Poverty of Philosophy and Wage-Labour and Capital. But before this is attempted, it is still necessary to examine the value and surplus-value theories of the classical bourgeois economists. This will enable us to draw a clear comparison between the content of the two works by Marx and the conclusions which had already been arrived at by Smith and Ricardo.

A detailed review of bourgeois political economy is given in the four volumes of Capital and in A Contribution to the Critique of Political Economy. Only the conclusions to which Marx came in his analysis of bourgeois political economy are set out here.

The greatest merit of the standard authors of bourgeois political economy was their effort "to grasp the inner connection", to comprehend "the inner connection in contrast to the multiplicity of outward forms"[10]. This is evident above all in the fact that they postulated the theory of labour-value.

Even the bare statement that human labour is the source of value was an epoch-making event in the history of political economy. From the example of the English economist W. Petty, Marx showed, however, "that recognition of labour as the source of material wealth by no means precludes misapprehension of the specific social form in which labour constitutes the source of exchange value".[11] This misapprehension, though, is characteristic to a greater or lesser extent of all bourgeois economists. It follows from the apologetic concept of bourgeois. political economy which regards the capitalist mode of production as an eternal natural form of production.

The most important condition for comprehending the specific historical character of value-creating labour is in distinguishing both in labour itself and also in its product between the material content (useful activity, labour in a specific, tangible form and use-value as the product of his labour) andthe social form (expenditure of human labour in general, no matter in what specific form, and value as the product of this labour).

But classic bourgeois political economy was only beginning to understand the dual character of labour and the product of labour in capitalist society. "The decisive outcome of the research carried on for over a century and a half by classical political economy ... is an analysis of the aspects of the commodity into two forms of labour ..."[12]The bourgeois economists, however, were not able to make a consistent distinction between use-value and value, between concrete and abstract labour, and even when this distinction emerged in their considerations they were usually unaware of it and it remained an isolated phenomenon.

The identification of use-value and value by bourgeois political economy expresses its own peculiar fetishism. This fetishism, in turn, is a consequence of the objective fact that the relations of production in the capitalist mode of production necessarily assume the form of a relation between things. For the bourgeois economists, wrote Marx, "the material element of capital is integrated with the social form as capital ".[13]

In this analysis of bourgeois political economy, Marx carefully investigated all the elements of a scientific understanding of the dual character of labour and its product in capitalist society which were to be found in the standard authors (in Ricardo especially) and through which the labour-value theory of the classical economists could at all become the source for Marx's theory of value. Marx remarked on the twentieth chapter of Ricardo's "On the Principles of Political Economy and Taxation" that it is "nothing but an investigation of the difference between use-value and exchange-value".[14] In another place, he writes that "Like all economists worth naming, (including) Adam Smith ..., Ricardo emphasises that labour as human activity, even more as socially determined human activity, is the sole source of value."[15] Marx notes here the factual distinction of the dual character of labour in Ricardo,

These comments by Marx should not be understood as if the discovery of the twofold character of labour was not his merit but was due to Ricardo, for instance, or other bourgeois economists. To use his own words, Marx distinguished that which Ricardo himself had not distinguished. (This applies not only to the theory of value but also to the theory of surplus-value of the standard authors of bourgeois political economy.) But apart from this Ricardo in his investigation of the 'separation' of value from use-value did not appreciate either the qualitative contradiction between them and thus between concrete and abstract labour.

By and large, Ricardo restricted himself to determining the magnitude of labour by labour-time and Marx, from the `father' of French classical political economy, Boisguillebert, showed "... that it is possible to regard labour-time as the measure of the value of commodities, while confusing the labour which is materialized in the exchange-value of commodities and measured in time-units with the direct physical activity of individuals…"[16] Ricardo did not understand the most important aspect of the theory of labour-value - the special character of labour which creates value.

The special qualitative nature of labour which produces value is that in capitalist society all labour which is social labour is a link in the system of social production, in the system of the social division of labour, but is not a direct link. On the contrary, under the conditions of private ownership of the means of production, it is directly private labour. Private labour can only express its social nature by abstraction from the concrete form of labour which produces a certain use-value, only by representation as abstract labour, as part of the totality of social labour. Concrete private labour is thus reduced to abstract social labour since the product of concrete labour is realized, i.e., is turned into money. Use-value therefore appears as the product of abstract labour, as value.

Ricardo did not perceive this specific character of social labour in capitalism since he considered the capitalist mode of production as the natural form of all production. This is why he also missed the special characteristic possessed by labour precisely in a capitalist society.

"Ricardo does not sufficiently differentiate between labour insofar as it is represented in use-value or in exchange-value."[17] The inability of Ricardo to provide a correct explanation of the nature of money also follows from this. The fact that Ricardo in his theory confuses abstract and concrete labour allowed vulgar economists to regard use-value and value as completely identical. "Thus, with the identification of use-value and exchange-value ends this vulgarisation of Ricardo…"[18] wrote Marx.

Consequently, the theory of the twofold character of labour could not be substantiated from the position of bourgeois political economy because this necessitated overcoming the bourgeois viewpoint and comprehending the specific historical nature of the capitalist mode of production.

In the theory of labour-value, this is manifested by the inability of bourgeois economists to draw an exact distinction between labour which produces use-value and labour which produces value. "It is true that the latter species of labour is only the former species expressed in an abstract form."[19] This abstraction remained incomplete in the classical economists and there also followed from this their inability to find a complete division between labour and its product, to separate the commodity form of the product as the result of abstract labour from the use-value of the product as the result of concrete labour.

The standard authors of bourgeois political economy attempted to explain the exploitation of labour by capital on the basis of the theory of labour-value. Their principal contribution to the elaboration of the theory of surplus-value was that they attributed surplus value to surplus labour. "Important as it was", wrote. Marx, "to reduce value to labour, it was equally important to (present) surplus value, which manifests itself in surplus- product, as surplus labour. This was in fact already stated by Adam Smith and constitutes one of the main elements in Ricardo's argumentation. But nowhere did he clearly express it and record it in an absolute form."[20]

Understanding surplus value as surplus labour meant explaining its origin from the exploitation of the working class and, in particular, from appropriation by the capitalists of the unpaid labour of the proletarians. In this connection, Ricardo wrote that "... if the reward of the labourer were always in proportion to what he produced, the quantity of labour bestowed on a commodity, and the quantity of labour which that commodity would purchase, would be equal ... but they are not equal ..."[21] Here (in the language of bourgeois political economy) it is found that the total newly-created value of the labour-product is greater than the part of the value which the worker receives. Thus it is stated in fact that the unpaid labour of the worker is the source of surplus value.

But Ricardo stops at this point. Taking the theory of labour-value to its logical conclusion means expanding it to surplus value as well, deriving surplus-value from value and explaining capitalist exploitation and the appropriation of unpaid labour on the basis of the law of value. Bourgeois political economy was not able to solve this problem.

The bourgeois economists formulated the problem of explaining surplus-value on the basis of the law of value as the problem of the exchange of labour for capital or the exchange of a larger amount of living labour for a smaller amount of materialized labour.

There are weighty reasons for this formulation. In capitalism, the exchange between labour and capital (between living and materialized labour) is the basic relation of production, the main form of the `exchange of activities'. "Materialized labour and living labour are the two factors on the contraposition of which capitalist production is based."[22] Under the conditions of the simple exchange of commodities where the actual producer appears as the owner of product of his labour, the quantum of living labour involved in the exchange is equal to the quantum of materialized labour. One could also speak here of the selling of labour which would mean the selling of the labour-product. In capitalism, the worker is separated from the conditions of labour and thus neither labour (on the contrary, in the production process the conditions of labour 'use' the worker) nor the labour-product are his property.

On the commodity market, the capitalist is confronted not by labour but by the worker who sells the only thing he has to sell, namely his labour‑power, his capacity for work. The exchange between labour and capital is thus arranged by the selling of labour-power. "It is likewise impossible to pass directly from labour to capital, that is, from the different races of man directly to the banker or from Nature to the steam engine."[23]

This necessary intermediate member in the exchange between labour and capital was not identified by bourgeois political economy. It was not in a position to do this because the fact of the selling of labour-power results from the specific features of capitalist production-relations since the capitalist, as the owner of the labour conditions, is faced on the commodity market by the doubly 'free' worker who `freely' disposes of his labour-power and is `free' from means of production. The transition to the capitalist mode of production is characterized by the fact that labour-power is changed into a commodity.

As a consequence of their bourgeois limitations, neither Ricardo nor the other bourgeois economists perceived this special aspect of the capitalist mode of production. They did not perceive it because they regarded capitalism as the natural form of all production. Smith was more keenly aware of the specific historical nature of bourgeois society and realized that capitalism, in contrast to a simple commodity economy in which equivalents were ex-, changed, is based on unequal exchange. This also misled Smith into denying the effectiveness of the law of value in capitalism.

The inability to proceed from labour to labour-power as the commodity sold also followed from the rough-and-ready empiricism which is particularly characteristic of bourgeois political economy. Indeed, on the surface of capitalist society it is not labour-power but labour which appears as a commodity and the wages of labour are represented as the price of labour.[24] This empiricism of bourgeois political economy is also reflected in the fact that it confused surplus-value and profit, that it certainly understood surplus-value as a general category of the capitalist mode of production (this circumstance was covered by the classical authors when they attributed surplus-value - even if this was in the form of profit - to the unpaid surplus labour of the worker) but did not investigate it as a special category in addition to the categories of profit, rent and interest. This alone made it impossible for the bourgeois economists to explain the origin of surplus-value.

Indeed, the equating of surplus-value with profit (average profit) misled the bourgeois economists into identifying the law of surplus-value with the law which states that profit is proportional to the magnitude of the capital advanced - in other words, misled them into regarding value and price of production as the same. In this identity, the surplus-value appears to be derived from the whole of the capital advanced, as an addition to the price of production but not as a result of the unpaid labour of the worker. This reflects the "lack of theoretical understanding for the comprehension of the differences in form of the economic relations ..." which without exception is characteristic of all bourgeois economists and their clumsy "seizure of and interest in material which is empirically available ".[25]

Furthermore, the analysis of labour-power as a commodity assumes that the two factors of the commodity as such - use-value mid value - and the dual character of commodity-producing labour have been correctly understood.

The category `labour-power as a commodity' presupposes that an exact distinction is drawn between its value and its use-value, that it is understood that the capitalist, as with every purchase, buys the use-value of this commodity and pays for its value; that it is clear that the use-value of this specific commodity has nothing to do with its exchange-value but is itself the energy which creates the exchange-value ".[26] And this newly-created value is greater than the value of the actual labour-power as a commodity. The difference between the value which has been created by the use of labour-power as a commodity and the value of the labour-power itself represents the surplus-value. Thus Marx, by distinguishing between the use-value and the value of the labour-power as a commodity, was able to explain the surplus-value in accordance with the law of value.

The realization of the dual character of the labour which produces commodities also enabled, Marx to explain the capitalist production process which forms the unity of the labour-process (concrete labour) and the process of creating surplus-value (as the result of the expenditure of abstract labour under capitalist conditions). This also permitted an explanation of the circumstance so disastrous for bourgeois political economy that the value of the total social product includes not only the living labour expended (v + s) but also expenditure of past materialized labour (c). Marx showed that "this twofold nature of the result can be explained only by the two-fold nature of his (the worker's) labour. ".[27] In its quality of concrete labour, the same labour transfers the value of the means of production consumed to the product whilst as abstract labour it produces new value.

By reason of this distinction between abstract and concrete labour, it was also possible to reveal the fundamentally different functions of the constant and variable components of capital in the production of surplus value. Marx wrote "Therefore in order that our investigation may lead to accurate results, we must make abstraction from that portion of the value of the product, in which constant capital alone appears.'[28]

Thus the basic shortcomings of the theory of labour-value elaborated by the standard authors of bourgeois political economy meant that right from the start they were not in a position to solve the cardinal problems of the theory of surplus-value.

Since the bourgeois economists consider surplus value as something existing from the very beginning which is characteristic of the capitalist mode of production in a perfectly natural way, they make it impossible to distinguish in any way between absolute and relative surplus value and thus to analyse the emergence and development of surplus value. Ricardo proceeded immediately from a given commodity value which surpasses the 'value of labour'. The difference between the two constitutes surplus-value. Ricardo was interested exclusively in the magnitude of this difference. Without discovering the origin of surplus-value and without analysing absolute surplus value, he passed directly to the consideration of the change in the magnitude of the surplus-value but only examined relative surplus-value. For him, the development of the productive forces of labour only signified an increase in relative surplus-value.

To be able to investigate absolute surplus-value, however, it was necessary to proceed not from the result of production nor from a given commodity-value corresponding a priori to the surplus-value but from the capitalist production process as the unity of the labour process and of the process creating surplus-value.

The worker spends one part of the working day in reproducing the value of his labour-power (necessary working time) and, during the rest of his working time, he produces surplus-value. From this point of view, the development of the productive forces appears primarily as a condition for the existence of surplus-value and only then as a factor in its multiplication.

We have described the characteristics of bourgeois political economy and have compared it with the fundamental theses of Marx's theories of value and surplus-value. We will now turn our attention to The Poverty of Philosophy and Wage-Labour and Capital to ascertain which of these theses can already be found in these books.

Careful study of The Poverty of Philosophy reveals that Marx already at this time had fully identified the position of the theory of surplus-value in the political economy of bourgeois society: "Ricardo's theory of value is the scientific interpretation of actual economic life ..."[29] Generally speaking, Marx still based his views here on Ricardo's theory of value. From this standpoint, he vigorously opposed Proudhon and his predecessors in The Poverty of Philosophy.

In The Poverty of Philosophy, Marx quotes many lines from Ricardo's Principles which summarize Ricardo's theory of value and he does this without any critical comment. All the basic definitions of value listed by Marx correspond to the definitions given by Ricardo. Thus Marx says "...that what determines value is not the time taken to produce a thing but the minimum time it could possibly be produced in …"[30]. Value is characterized here as the product of the labour necessary. But this definition of value can also be found in one of the quotations from Ricardo used by Marx: "In making labour the foundation of the value of commodities and the comparative quantity of labour which isnecessary to their production, the rule which determines the respective quantities of goods which shall be given in exchange for each other ..."[31] In The Poverty of Philosophy, Marx also speaks of the loss of value as a result of technical progress yet even herehe stresses that "This fact was already pointed out by Ricardo ..."[32]

The Poverty of Philosophystill lacks the fundamental definition of value which distinguishes Marx's theory of labour-value from Ricardo's labour-value theory - the definition of value by the expenditure of that socially necessary labour whose social nature is only proved by the fact that it is sold in the process of exchange. In other words, the concept of abstract labour as labour which creates value is still missing in The Poverty of Philosophy.

Just as he subscribed to the basic viewpoint of Ricardo's theory of value, Marx also accepted the latter's theory of money. In The Poverty of Philosophy, Marx's thinking is still based on the quantity theory of money which regards money solely as a means of circulation. In a letter to Engels of 25th February 1859, Marx himself refers to this.[33] In The Poverty of Philosophy, he still wrote "that precisely gold and silver, as money, are of all commodities the only ones not determined by their cost of production; and this isso true that in circulation they can be replaced by paper."[34] Later, in his Contribution to the Critique of Political Economy, he makes a detailed criticism of the quantity theory of money.

However, it must be noted that already in The Poverty of Philosophy Marx had raised the question of the necessity of money in a mode of production which isbased on individual exchange of labour-products. At the same time, Marx stressed that the problem which concerned Proudhon - why it is precisely gold and silver which perform the functions of money - is "a .secondary question, which is explained not by the chain of production relations, but by the specific qualities inherent in gold and silver as substances ".[35]

Marx had certainly raised the question of the necessity of money in a commodity economy but did not yet provide an answer to it in The Poverty of Philosophy (the theory of value had to be first worked out for this). He only stressed that money follows necessarily from the overall system of the production relations of bourgeois society and that money corresponds to the capitalist mode of production.

Like Ricardo, Marx took as his starting point the fact that, the whole of modern society is based on labour as a commodity, i.e., on wage-labour. He argued here against Proudhon who asserted that labour could have no value. But, in the way that Proudhon looked at the fact, this assertion was utopian in character since it totally avoided the necessity of distinguishing between labour and labour-power. It was rather the case that Proudhon contested the fact of wage-labour and declared this basic fact of capitalist reality to be absurd. This polemic thus referred to the specific character of the modern order of society[36].

When Marx in The Poverty of Philosophy criticized the reactionary and utopian position of Proudhon, like Ricardo he considered wage-labour as a fact, without noticing any contradiction of the law of value in the exchange between labour and capital. This is why one cannot at all agree with the assertion of D. L Rosenberg who writes that "The theory of surplus-value was not yet formulated in `The Poverty of Philosophy'. However, its foundation was already laid with the new concept of ' labour as a commodity'. It is true that Marx still speaks of the ' value of labour' but he had already discovered the particular quality of this specific commodity : namely, that it produces value which is greater than its intrinsic value. Furthermore, Marx showed that the capitalist appropriates this surplus in the form of profit without violating the law of value."[37]

In the light of all that which has now been said, there can be scarcely any question of a new concept of labour as a commodity' in The Poverty of Philosophy. As regards the circumstance that 'labour as a commodity' produces a value which is greater than its intrinsic value, this had already been perceived by Smith and Ricardo. Marx wrote that Smith had "recognized the true origin .of surplus value ".[38]

But neither Smith nor Ricardo were able to show that the surplus-value produced by 'labour as a commodity' and appropriated in the shape of profit by the capitalist is produced and appropriated in accordance with the law of value. Indeed, at first sight, the surplus of value contradicts the law of value but in reality it is in agreement with the exchange of equivalents. Neither in The Poverty of Philosophy nor in Wage-Labour and Capital did Marx provide evidence of this either although in the latter book he was on the point of solving the problem of the 'exchange between wage-labour and capital on the basis of the law of value'.

In Wage-Labour and Capital, Marx concentrated his attention on an analysis of `labour as a commodity' and the relations between capital and wage-labour. He criticizes the bourgeois political economy which regards capital not as a social relation but as accumulated labour, as a specific quantity of raw materials, instruments of labour and means of subsistence. Marx stresses that capital is a production-relation of bourgeois society. A certain sum of commodities only becomes capital when exchanged for direct, living labour. Through this exchange, this sum maintains and increases itself as a power which belongs to one part of society.

"The existence of a class which possesses nothing but the ability to work is a necessary presupposition of capital." As a result of the exchange between capital and wage-labour, the capitalist acquires labour, "... the creative force ... by which the worker ... also gives to the accumulative labour a greater value than it previously possessed."[39]

We can conclude here that Marx - for the time being still in the terminology of bourgeois political economy - considers that the most important characteristic of labour-power as a commodity is its use-value, which consists in the ability of the worker to produce a value which is greater than the value of his labour-power. Marx is very close at this point to solving the problem of exchange between wage-labour and capital. But the actual solution is still missing and again we cannot share D. I. Rosenberg's view when he writes that "the essentials of the theory of surplus-value" can be found in Wage-Labour and Capital. "It is shown here that it is precisely on the basis of the law of value and not at all as a consequence of its violation that ... the profit of capital (surplus-value) is achieved."[40] Marx still had to do all this and, to be able to do it, he had to elaborate, above all, his theory of value: he had to identify the two-fold character of commodities, including labour-power as a commodity, and the two-fold character of commodity-producing labour.

The 1840's are an important stage in the development of Marx's theory of economics. In an assessment of the results arrived at by the classical bourgeois economists in the determination of the laws of bourgeois society, Marx wrote that "Classical Political Economy nearly touches the true relation of things, without, however, consciously formulating it. This it cannot do so long as it sticks in its bourgeois skin."[41] It was left to Marx to make the conscious formulation of the "true relation of things". For this Marx and Engels had to elaborate, above all, the dialectical and materialist conception of history.

In his works of the 1840's, Marx worked out the necessary conditions and also individual elements of his future theories of value and surplus-value which had to be extended and taken further before they could form a coherent theory of economics. But the leap from the bourgeois to the Marxist approach to the exchange between labour and capital which was to characterize the revolutionary transformation of political economy was not made here. In his studies at the end of the 1840's, Marx was approaching this point and was so close to it that Engels considered that The Poverty of Philosophy and Wage-Labour and Capital indicate this.

"That on the other hand Marx had known very well already at that time, ... not only whence but also how `the surplus-value of the capitalist' came into existence isproved by his Poverty of Philosophy, 1847, and by his lectures on wage-labour and capital."[42] Despite this, Marx still needed ten years (1847-1857) before he actually made this leap and was able to revolutionize political economy. Later, Marx himself said of The Poverty of Philosophy "that it contains the germs of the theories developed in ' Capital' after 20 years' work "[43].

We have attempted to give a serious answer to the question raised at the beginning of the chapter - what was the theoretical luggage with which Marx arrived in London in August 1849? This answer also indicates why an examination of the subject-matter had to start from scratch. In the Preface to A Contribution to the Critique of Political Economy, Marx wrote that "The enormous amount of material relating to the history of political economy assembled in the British Museum, the fact that London is a convenient vantage point for the observation of bourgeois society, and finally the new stage of development which this society seemed to have entered with the discovery of gold in California and Australia, induced me to start again from the very beginning and to work carefully through the new material."[44] These remarks require some explanation.

The investigation of the history of political economy always formed a. basic part of the economic studies of Marx and was an important means of determining capitalist reality. Engels wrote the following words about this: "Since in the course of history, as in its literary reflection, the evolution proceeds by and large from the simplest to the more complex relations, the historical development of political economy constituted a natural due, which the critique could take as a point of departure ..."[45]

In Paris, between 1844 and 1845, Marx studied bourgeois political economy and took excerpts from the works of eight bourgeois economists on which he wrote critical notes.[46] Between 1845 and 1847, he carried on this work in Brussels and Manchester and extended considerably the range of the sources he used for his studies.[47]

In 1849, Marx came to London-where he had the opportunity to work in the library of the British Museum and to make a systematic study of the history of-political economy in general and of English political economy in particular. English classical political economy (William Petty, Adam -Smith, David Ricardo) was the ultimate in bourgeois political thinking which is also why it became one of the sources of Marxism. It is consequently not astonishing that soon after his arrival in London Marx began an extremely thorough study of the history of political economy.

The period in London was also fruitful for- the development of Marx's theory of economics because London at that time was the uncontested centre of the capitalist world. At that period, the fate of capitalism was decided in England. "If, therefore, the crises first produce revolutions on the Continent, the foundation for these is, nevertheless, always laid in England ...", Marx wrote in 1850. "On the other hand, the degree to which the Continental revolutions react on England is at the same time the thermometer on which is indicated how far these revolutions really call in question the bourgeois conditions of life, or how far they only hit their political formations."[48]

The need to continue and extend the investigations of economic matters was also dictated by the struggle which Marx and Engels waged for the foundation of a revolutionary theory of the working class and for the foundation of scientific socialism. The defeat of the revolution of 1848/49 led to the banning of the Neue Rheinische Zeitung, the only newspaper which at that time represented the standpoint of the working class. The last edition, printed in red, was published on 19th May 1849. Its editors, addressing the workers of Cologne, said of themselves: "Their last word will always and everywhere be: The Emancipation of the Working Class ".[49]

Following, his arrival in London, Marx's first efforts were devoted to establishing a new publication as a continuation of the Neue Rheinische Zeitung. This publication was the Neue Rheinische Zeitung. Politisch-ökonomische Revue. This journal was edited in London and printed in Hamburg. In the six issues which appeared between March and November 1850, Marx carried out the task which he had formulated in the 'Announcement' - "... to explain the period of the revolution through which we have passed, the character of the parties involved in this and the social relations which occasion the existence and the struggle of these parties". Marx considered that the particular advantage of a journal as compared with a newspaper was that it permitted "a detailed and scientific examination of the economic relations which form the foundation of the entire political movement."[50]

This very important remark enables us to conclude that Marx had set himself the task of further developing his theory of economics immediately after moving to London, although the intensive work in this field only began later, in 1850. In his Preface to A Contribution to the Critique of Political Economy (January 1859), Marx wrote that "The publication of the Neue Rheinische Zeitung in 1848 and 1849 and subsequent events cut short my economic studies; which I could only resume in London in 1850."[51]

In. the Politisch-ökonomischeRevue, Marx provided brilliant examples of how the materialist conception of history he had evolved could be applied to the analysis of concrete historical events. The first issue of the journal, contained the first instalment of his outstanding work "The Class Struggles in France 1848-1850" which, as Engels said, was Marx's first attempt "to demonstrate the inner causal connection in the course of a development which extended over some years, a development as critical, for the whole ofEurope, as it was typical; that is, in accordance with the conception of the author, to trace political events back to the effects of what are, in the last resort, economic causes."[52]

In this work and also in the three significant international Revues that he wrote in association with Engels, Marx set himself the task of explaining the defeat of the revolution of 1848/49. The petty-bourgeois democrats asserted that "the revolution had failed because of the ambitious jealousy of the individual leaders and the antagonistic opinions of the various teachers of the people."[53] Marx and Engels termed this opinion "an extremely vulgar Philistine view" and presented their appreciation of the revolution. In accordance with the principles of the materialist conception of history which they had developed earlier, Marx and Engels showed that revolution is the result of the contradictions between the productive forces and the production relations of bourgeois society. "A revolution such as this is only possible when these two factors, the modern productive forces and the bourgeois forms of production are at variance with each other." The economic crisis is the expression of this contradiction between productive forces and productive relations. From this, it was concluded that "A new revolution is only possible following a new crisis. But it is just as certain as this is."[54]

These conclusions were completely contrary to the views of the petty-bourgeois socialists such as Proudhon who dreamed of bringing about the socialist transformation of society by the introduction of an economic policy directed towards the forcible retardation of capitalist development, i.e. by reformist methods. In contrast to petty-bourgeois socialism which Marx and Engels characterize as utopian and doctrinaire, scientific or revolutionary socialism is "... the class dictatorship of the proletariat as the inevitable transit point to the abolition of class differences generally, to the abolition of all the production relations on which they rest, to the abolition of all the social relations that correspond to these relations of production, to the revolutionizing of all the ideas that result from these social connections."[55]

Marx and Engels considered the struggle against petty-bourgeois socialism, this 'false brother' of scientific socialism, to be a matter of first-rank importance. Marx's works from the 1840's and The Poverty of Philosophy in 'particular indicate, however, that at first in this struggle he was still obliged to rely on classical bourgeois economics to a significant degree. This circumstance is considered here as one of the major driving forces in the continuation of Marx's works on economics, but of course it was not the only factor in this.

The most important conclusion resulting from the materialist conception of history evolved by Marx and Engels was the realization that the socialist revolution is the, inevitable consequence of the development of the economic contradictions of capitalist society.

From this it also followed that Marx had to direct most of his attention to investigating the economic law of motion governing bourgeois society. Bourgeois political economy had not discovered this law. It could not even get on the track of this law since it did not consider the bourgeois mode of production in its movement and development but regarded it as something fixed, eternally true and unchangeable. But in the 1840's Marx had not yet discovered this law either. All these factors called for a thorough investigation of the capitalist mode of production. In addition to this, Marx was also obliged to devote serious thought to some new phenomena in the economics of capitalism.

In their analysis of the reasons for the defeat of the revolution of 1848/49, Marx and Engels directed attention to the discovery of gold in California in 1848. "It can be predicted already, after scarcely eighteen months," wrote Marx and Engels in February 1850, "that this discovery will have much more splendid results than even the discovery of America".[56] Marx and Engels meant the upswing in the development of the productive forces which was associated necessarily with the discovery of new gold deposits.

In November 1850 they wrote that "The discovery of the Californian gold-mines set the crown on American prosperity. At an earlier date than any other European journal ... we have already drawn attention to the importance of this discovery and its unavoidable consequences for the whole of world trade. This importance does not lie in the increase in gold through the newly-discovered mines although even this increase in the means of exchange will not at all be without a favourable influence on general trade. It lies in the spur which the mineral wealth of California gave to capital on the world market, in the activity which characterized the entire West Coast of America and the East Coast of Asia, in the new market which was created in California and in all countries affected by the influence of California".[57]

Thus at the beginning of the 1850's intensive studies in the sphere of political economics had become a sheer necessity for Marx. His stay in London offered very favourable conditions for this and he immediately began to use them.


[1] K. Marx, The Poverty of Philosophy, Foreign Languages Publishing House, Moscow 1956, p116/117.

[2] Ibid, p54.

[3] K. Marx/F. Engels, Historisch-kritische Gesamtausgabe (MEGA), Erste Abteilung. Ed. 3, Marx-Engels-Verlag, Berlin 1932, p. 502, 494.

[4] F. Engels, Outlines of a Critique of Political Economy, in: K. Marx, Economic and Philosophic Manuscripts of 1844, Appendix, Moscow 1959, p. 187

[5] Manuscript of 1861/63 Heft I, p.12.

[6] K, Marx, The Poverty of Philosophy, 1.c., p. 48.

[7] Cf. K. Marx, letter to Engels of 2 April 1851, in: K. Marx/F. Engels, Werke, Bd. 27, Dietz Verlag, Berlin 1963, p. 228.

[8] Cf. K. Marx, The Poverty of Philosophy, 1.c., p. 90, 113/114.

[9] Ibid., p; 86.

[10] Cf. K. Marx, Theories of Surplus-Value, Part III, Progress Publishers, Moscow 1971, p. 500.

[11] K. Marx, A Contribution to the Critique of Political Economy, Progress Publishers, Moscow 1970, p. 54.

[12] Ibid., p. 52.

[13] K. Marx, Theories of Surplus-Value, Part III, 1.c., p. 332.

[14] K. Marx, Theorien über den Mehrwert, 2. Teil, Dietz Verlag, Berlin 1962, p. 158.

[15] K. Marx, Theories of Surplus-Value, Part III, 1.c., p. 181.

[16] K. Marx, A Contribution to the Critique of Political Economy, 1. c., p. 55.

[17] K. Marx, Theories of Surplus-Value, Part III, l.c., p. 131.

[18] Ibid., p. 185.

[19] Ibid., p. 138.

[20] Ibid., p. 238/239.

[21] D. Ricardo, On the Principles of Political Economy and Taxation, in: The Works and Correspondence of David Ricardo, Vol. 1, Cambridge, At the University Press 1953, p. 14.

[22] K. Marx, Theorien über den Mehrwert, II. Teil, l.c., p. 142.

[23] K. Marx, Grundrisse der Kritik der politischen Ökonomie, Dietz Verlag, Berlin 1953, p. 170.

[24] In Chapter 13 of the first volume of Capital. Marx investigates the circumstances which produce such irrational forms of bourgeois society as "labour as a commodity", "value of labour", etc.

[25] K. Marx, Theorien über den Mehrwert, I. Teil, Dietz Verlag, Berlin 1956, p. 55.

[26] Ibid., p. 54.

[27] Marx, Capital, Vol. I, Foreign Languages Publishing House, Moscow 1959, p. 199.

[28] Ibid., p. 214.

[29] K. Marx, The Poverty of Philosophy, l.c., p. 54.

[30] Ibid., p. 73.

[31] Ibid., p. 52.

[32] Ibid., p. 72.

[33] Cf. K. Marx, letter to Engels of 25 February 1859, in: K. Marx/F. Engels, Werke, Bd. 29, p. 404.

[34] K. Marx, The Poverty of Philosophy, l.c., p. 97.

[35] Ibid., p. 90.

[36] Cf. ibid., p. 64.

[37] D. I. Rosenberg. Die Entwicklung der ökonomischen Lehre von Marx and Engels in den vierziger Jahren des 19. Jahrhunderts, Dietz Verlag, Berlin 1958, p. 304.

[38] K. Marx, Theorien über den Mehrwert, 1. Teil, l.c., p. 45.

[39] K. Marx, Wage-Labour and Capital, Martin Lawrence Ltd., London 1932, p. 31.

[40] D. I. Rosenberg, l.c., p. 328.

[41] K. Marx, Capital, Vol. l.c., p. 542.

[42] Engels, Foreword to Vol. 2 of Capital, in K. Marx/F. Engels, Werke, Bd. 24, Dietz Verlag, Berlin 1963, p. 15

[43] K. Marx, on "Misère de la philosophie", in: K. Marx/F. Engels, Werke, Bd. 19, Berlin 1962, p. 229.

[44] K. Marx. A Contribution to the Critique of Political Economy, l.c., p. 31.

[45] F. Engels, ibid., p. 225.

[46] Cf. K. Marx/F. Engels, Historisch-kritische Gesamtausgabe (MEGA), Erste Abteilung, Bd. 3,

p. 409 ff. (These excerpts and Marx's critical notes are discussed by D. I. Rosenberg in his book "Die Entwicklung der Ökonomischen Lehre von Marx uind Engels in den vierziger Jahren des 19. Jaluitunderts` , Dietz Verlag, Berlin 1958.)

[47] Cf. K. Marx/F. Engels, Historisch-kritische Cesamtausgabe (MEGA), Erste Abteilung, Bd. 6, Marx-Engels-Verlag, Berlin 1932, p. 507 ff.

[48] K. Marx, The Class Struggles in France 1848-50, Selected Works Vol_ 2. Lawrence & Wishart p. 298/299.

[49] Marx/F. Engels, article from the Neue Rheinische Zeitung. ibid_, p. 37.

[50] K. Marx/F. Engels, Announcement of the " Neue Rheinische Zeitung. Politisch-ökonomische Revue", in: K. Marx/F. Engels, Werke, Bd. 7. p. 5.

[51] K. Marx, A Contribution to the Critique of Political Economy, Preface, l.c., p. 22.

[52] K. Marx, Selected Works, Vol. 2, 1.c., p. 170.

[53] K. Marx/F. Engels, Revue, May to October 1850, in: K. Marx/F. Engels, Werke, Bd. 7, p. 400.

[54] Ibid., p..440.

[55] K. Marx, Selected Works, Vol. 2, Lawrence & Wishart, London 1945, p. 289.

[56] K. Marx/E. Engels, Revue, Jan./Feb. 1850, in: K. Marx/F. Engels, Werke, Bd. 7, p. 220.

[57] K. Marx/F. Engels, Revue, Mai bis Oktober 1850, l.c., p. 435.