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The New International, September 1944

W.H. Emmett

Marx’s Alleged Self-Contradiction

Professor Bohm-Bawerk’s Absurd Error


From The New International, Vol. X No. 9, September 1944, pp. 297–301 & 304.
Transcribed & marked up by Einde O’Callaghan for ETOL.


We are happy to present to our readers this article on an aspect of Marx’s teachings by the distinguished Marxian scholar and teacher, W.H. Emmett. Some of our readers will remember the Australian Marxist as the author of the Marxian Economic Handbook, which was published many years ago in this country by International Publishers and served as a basic textbook in the education of numerous students of scientific socialist economics. We hope to publish other contributions by W.H. Emmett in future issues of our review. – Editor

It will be quite in order first to tell how the following article came to be written. Some years ago a friend, who considered himself to be a staunch Marxist, deploringly remarked to the writer how unfortunate it was that Marx’s third volume should have contradicted his first volume. With inward astonishment, I assured him that such an idea was quite absurd and that it was utterly untrue. The mere assurance, however, availed him nothing; and the self-supposed Marxist (withal a very earnest Labourite) remained quite convinced that Marx really had contradicted himself. Therefore, almost word for word, the answer as herein presented was written for publication in the local [Australian] Militant. But that paper was then on its last issues and was very soon to close down; whilst my misguided friends also passed out suddenly and never had a chance to see what had been written in answer to his honest error.

For the convenience of any readers who may wish to check up on the quotations from Vol. I of Marx’s Capital, which follow on below, the tabulation of page references appended [see page 304] gives all the corresponding pages in three separate English editions of that book, namely, the 1902 (Swan, Sonnenschein), 1906 (Chas. Kerr & Co.), and 1928 (Geo. Allen & Unwin) editions.

The Contention of Professor Bohm Bawerk

There is a supposition, absurd and widespread, to the effect that, in Vol. III of Capital, Karl Marx contradicts his first volume of that work. Though grievously mischievous, however, this idea is nothing more than absurd error. Moreover, this absurd error only rests upon another error which is equally absurd. It is ridiculously supposed that Marx, in his Vol. I, declares capitalism to be a regular commercial exchange of equivalent values.

The biggest sinner in this regard was Professor Bohm Bawerk, one-time Austrian Minister of Finance and honorary professor of political economy at the University of Vienna. He contended that Marx, in Vol. I, teaches the regular exchange of equivalents in commerce and that in Vol. III Marx had to contradict the first volume in this respect. But most probably the professor’s bourgeois wish was father to his capitalistic “thought.” However that may be, he worked up this fantastic nonsense into a book of 221 pages, and entitled it Karl Marx and the Close of His System.

The burden of Bohm Bawerk’s book consists in the enlargement and display of the alleged “contradiction.” He misrepresents Marx as making a “wrong” start, as closing his eyes to the “facts of real life,” as shutting out from his work the “disturbing real world,” and as teaching the commercial exchange of equivalents, consistently throughout “the middle parts” of his work, to the final “contradiction in Chapter X of Vol. III.

By “the middle parts,” Bohm Bawerk means the greater part of Marx’s Vol. I (that is, from what Bawerk untruthfully calls the “wrong” start, to the end at page 800), then throughout the whole six hundred and odd pages of Vol. II and also through the first quarter of Vol. III (to the so-called “unfortunate tenth chapter”).

In reality, it is Professor Bohm Bawerk who makes the “wrong” start. On the third page of his Introduction, page 23, he inserts a gross and grotesque fabrication. This is to the effect that, according to Marx, commodities must exchange in proportion to the quantity of labor which they contain; that is, that Marx presents market exchanges as necessarily being exchanges of value for equal value. As long as ever economic science is to endure, this dastardly untruth will indelibly disgrace both the rash professor and his wretched book. The early passage, containing this untruthful declaration, reads as follows: “Marx had taught that the whole value of commodities was based on the labor embodied in them, and that by virtue of this ‘law of value’ they must exchange in proportion to the quantity of labor which they contain.” (page 23, from the eighth line to the fourteenth)

In the first place, Marx never said that value is based on labor. Instead of that, he showed that value really consists of labor, and that the labor itself (necessarily embodied in a commodity by its production) is what constitutes the value. The rest of that little passage is disgraceful rubbish. It simply is not true. Marx nowhere says that commodities either must, or do, exchange in proportion to their embodied labor. In other words, Marx does not anywhere say that in commerce equivalents have to be exchanged, nor that they do exchange. And Marx made NO “wrong” start; neither did he ignore “facts of real life,” nor yet was his work ever detached from the “disturbing real world.”

Marx on Exchange of General Values and Prices

Let us now notice some real teaching of Marx on exchange of general values and prices. On pages 755–6 (Swann, Sonnenschein edition), Marx quotes Robert Somers at some length on the deer forests of Scotland. Amongst other matters appears the following item: “The huntsman who wants a deer forest limits his offers by no other calculation than the extent of his purse ...” By which is clearly indicated, not any exchange of equivalents, but the payment of “fancy prices” for the deer forest.

As early as page 7, when analyzing the character of value, Marx declares that “Jacob doubts whether gold has ever been paid for at its full value. This applies,” he continues, “still more to diamonds. According to Eschwege, the total produce of the Brazilian diamond mines for the eighty years, ending in 1823, had not realized the price of one and a half years’ average produce of the sugar and coffee plantations of the same country, although the diamonds cost much more labor, and therefore represented more value.” Distinctly, this is not declaring the exchange of equivalents; and this is at the “start,” this passage is in the very first section, of the first chapter, of Marx’s Vol. I. (see page 9, Allen & Unwin edition)

On page 150 (A.U.), Marx quotes G. Opdyke in a footnote: “Under the rule of invariable equivalents, commerce would be impossible.” In another footnote on the same page Marx takes a passage from his friend Engels, which reads: “Underlying the difference between real value and exchange value is the fact that the value of a thing is different from that of what in commerce passes by the name of equivalent, which means that such an equivalent is no equivalent at all.” Dealing with conversion of commodities into money (exemplified in every sale), Marx teaches: that if the conversion “takes place at all, if the commodity is not absolutely unsaleable, the desired change of form always occurs, although the price realized may be abnormally above or below the value”. (page 86, A.U.) ere there is no declared exchange of equivalents.

Speaking of the “Concept of Relative Surplus Value,” and referring to improved means of production, Marx tells us: “The law that value is determined by labor time, the law which had exerted its sway over the capitalist who introduced the new method of production by making him sell his commodities for less than their social value, exerts its sway over his rivals in the form of a coercive law of competition, and constrains them to adopt the new method of production.” (page 332, A.U.)

Price as Exponent of Commodity Value

Referring to price as the quantitative exponent of a commodity’s value being also exponent of its exchange ratio, Marx tells us on page 78 (A.U.) that “it does not follow that the exponent of this exchange ratio is necessarily the exponent of the magnitude of’ the commodity’s value. If “circumstances allow of this price [of two pounds sterling worth of wheat] being raised to three pounds, or enforce its reduction to one pound, then, although one pound and three pounds may be too small or too great to express properly the magnitude of the value of the wheat, nevertheless they are its prices ...”

Later on, in the same paragraph, he tells us: “the possibility of a divergence of price from magnitude of value is inherent in the price form. This is not a defect, for, on the contrary, it admirably adapts the price form to a method of production whose inherent laws can only secure expression as the average results of apparently lawless irregularities that compensate one another.” No declared exchange of equivalents here.

In his next following paragraph, Marx writes: “Things which in and by themselves are not commodities, such as conscience, honor, etc., can be put up for sale by their owners, and can thus, through their price, acquire the commodity form. Hence a thing can have a price without having value” (page 79). This is not declaring any exchange of equivalents.

There are innumerable other passages in Marx’s Vol. I of Capital which more or less directly refer to disparity between values in exchange. But in most cases their presentation would be somewhat cumbrous for the purpose of present writing.

If the reader should interpolate that Marx, on many occasions, definitely did assume the exchange of equivalents, I would ask: Why shouldn’t he? Scientific assumptions are very commonly used as bases of reasoning. Why should Marx be denied the common use of scientific procedure, scientific assumption? Furthermore, it is either dishonest or very foolish to suppose Marx, by such assumptions, ever to be asserting those things which are therein assumed. If, for the sake of some argument, we assumed that Bohm Bawerk was perfectly truthful, we should be very far from asserting or declaring such a thing. And if Marx had ever meant us to understand that equivalents really do commonly exchange in every-day commercial life, he would never have bothered himself merely to assume such equivalent exchanges; once for all, he would simply have declared them. Of course!

We may now notice an early part of Marx’s Vol. I, where he variously and oppositely assumes the exchange of unequal values.

On page 138 (Swan, Sonnenschein edition), Marx writes: “... In its normal form, the circulation of commodities demands the exchange of equivalents. But in actual practice, the process does not retain its normal form. Let us, therefore, assume an exchange of non-equivalents.” Again, on the same page: “Suppose then ... the seller is enabled to sell his commodities above their value ...” Still again, on the following page: “Let us make the opposite assumption, that the buyer has the privilege of purchasing commodities under their value.” (page 139, S.S.)

It is ridiculously untrue about Marx consistently teaching the market exchange of equivalents – or even teaching it at all. He very effectively taught the very opposite.

Neither is it true that Marx avoided “the disturbing real world,” as Bohm Bawerk mendaciously pretends on his page 167. Nor did Marx ever delay “to open his eyes to the facts of real life,” as impudently postulated on Bawerk’s page 169. Marx even had his eyes open to such disturbing “facts” as “vulgar economists”; and he even gave to them this very appropriate name.

Wages and the Value of Labor Power

One of the most important facts of life in this “disturbing world” is labor power. About the value and price of which labor power, Karl Marx had quite a lot to say. Let us here notice some words of Marx’s regarding exchange of wages for the value of labor power.

“The minimum limit of the value of labor power is determined by the value of the commodities without the daily supply of which the laborer cannot renew his vital energy, consequently by the value of those means of subsistence that are physically indispensable. If the price of labor power fall to this minimum, it falls below its value, since under such circumstances it can be maintained and developed only in a crippled state. But the value of every commodity is determined by the labor time requisite to turn it out so as to be of normal quality.” (pages 151–2, S.S. edition)

Instead of consistently teaching the exchange of equivalents, we may see Marx in his Vol. I freely recognizing and teaching the common exchange of non-equivalents. Which in place of the alleged “contradiction” is what Marx, in his Vol. III, exactly corroborated.

On page 327 of Vol. I (A.U.), Marx refers to the habitual disparity between value of labor power and its price. He points out that a certain “result would only be secured by forcing the worker’s wages down below the value of his labor power.” And he further says: “Notwithstanding the important part the method [forcing down wages] plays in the actual movement in wages ...” etc. Marx here is telling us incidentally that forcing down wages below the value of labor power plays an important pan in actual movements of wages. Again referring to this feature on page 659, Marx proceeds: “In the chapters on the production of surplus value it was constantly presupposed that the wages of labor are at least equal to the value of labor power. The forcible reduction of wages below this value plays, however, in practice, too important a part for us to pass over the matter without consideration. In fact, such a forcing down of wages serves, within certain limits, to transform part of the worker’s fund of necessary consumption into a fund for the accumulation of capital.” (pages 659–60, A.U.) Further on, in the next paragraph, he says: “But if workers could live on air, they could not be bought at any price. It follows that the purchase of the workers for nothing at all is a limit, in the mathematical sense of the term, never attainable, though we can always get closer and closer to it. The persistent tendency of capital is to approach nearer to this zero limit.” Marx is here recognizing “facts of real life.” Dealing with “the British agricultural proletariat” in a footnote, Marx quotes Dr. Richard Price on comparative prices of day labor and provisions: “The nominal price of day labor is at present [1805] no more than about four times, or at most five times, higher than it was in the year 1514. But the price of corn is seven times and of flesh meat and raiment about fifteen times higher. So far, therefore, has the price of labor been even from advancing in proportion to the increase in the expenses of living, that it does not appear that it bears now half the proportion to those expenses that it did bear.” (Page 745, A.U.) Instead of exchanging the equivalents, Marx here shows the laborers giving ever more and more in exchange for proportionately less and less.

Non-Equivalents in Exchange

On page 662 (A.U.) we read that “At the end of the eighteenth century and during the first decade of the nineteenth, the English farmers and landlords enforced the absolute minimum of wages by paying the agricultural laborers less than the minimum as actual wages and making up the balance in the form of parish relief.” And then Marx tells us how, before the House of Lords Committee of Inquiry in 1814, a farmer named Bennett was asked the question: “Has any portion of the value of daily labor been made up to the laborers out of the poor rate?” And his answer was: “Yes, it has; the weekly income of every family is made up to the gallon loaf (8 lbs. 11 ozs.) and 3 pence per head! ... The gallon loaf per week is what we suppose sufficient for the maintenance of every person in the family for the week; and the 3 pence is for clothes, and if the parish think proper to find clothes, the 3 pence is deducted. This practice goes through all the western part of Wiltshire, and I believe throughout the country.” Here Marx shows non-equivalents to be in exchange so abominably that some of the vile shortage is habitually made up in so-called “charity.”

Dealing with machinery and large-scale industry, Marx writes: “That portion of the working class which machinery has thus transformed into superfluous population ... either goes to the wall ... or else floods all the more easily accessible branches of industry, glutting the labor market, and consequently reducing the price of labor power below its value.” (page 461, A.U.) So the non-equivalent small value of low wages, Marx teaches, thereby exchanges for the bigger value in labor power.

Near the top of page 506, speaking of the straw-plaiting industries, Marx tells us: “Wages in the above industries, pitiful as they are (rarely do children in the straw-plaiting schools receive as much as 3 shillings) are depressed, as far as real wages are concerned, by the widespread prevalence of the truck system, which is especially rife in the lace-making districts.” A little further on, he says: “The great production of surplus value in such branches of work [scattered handicrafts and domestic industries], together with the progressive cheapening of the articles they produce have been in the past and are now mainly due to the lowness of the wages paid in them (wages hardly sufficient for a bare subsistence) in conjunction with working hours extended to the maximum that is humanly possible.” (page 508) No equivalent exchanges depicted here, but only good value in labor-power exchanging for grievously low wages.

The same sort of treatment was meted out to the agricultural proletariat. Marx quotes Dr. Julian Hunter, who wrote: “The cost of the hind [name for the agricultural laborer] is fixed at the lowest possible amount on which he can live.” (page 751, A.U.) Marx had previously noted, on page 725, a “privation” on the part of the capitalist, who deprived “himself of the privilege of paying a sufficient wage, a wage such as his ‘hands’ need for the barest subsistence!”

Assumption and Reality

For scientific reasons Marx often assumed the capitalist to be paying for labor power at its value. But assuredly he never taught us that the capitalist really did, always and fully, pay such value for equivalent value.

Marx shows how useful it is for capitalists to have “poor” people around at their beck and call. Instead of “closing his eyes,” he quotes John Bellers as follows: “And as the laborers make men rich, so die more laborers there will be the more rich men ... the labor of the poor being the mines of the rich.” He quotes also Bernard de Mandeville: “It would be easier, where property is well secured, to live without money than without poor; for who would do the work? ... As they [the poor] ought to be kept from starving, so they should receive nothing worth saving ...” Further on: “but it is the interest of all rich nations that the greatest part of the poor should almost never be idle, and yet continually spend what they get. ... Those that get their living by their daily labor ... have nothing to stir them up to be serviceable but their wants which it is prudence to relieve, but folly to cure.” (pages 627–8, S.S.)

Marx points out a special bit of the “disturbing real world” at the foot of page 214 (A.U.). He there asks and answers a question: “Why do such men as Roscher try to account for the origin of surplus-value in terms which are nothing more than a recapitulation of the capitalists’ more or less plausible excuses for the expropriation of surplus value? In part it is because these writers are genuinely ignorant; but in part it is because they are apologists, because they shrink from a scientific analysis of value and surplus value, being afraid lest they should arrive at a result which might be extremely distasteful to constituted authority.”

Instead of Marx closing his eyes to reality, it is “vulgar economists” like Roscher and Bohm Bawerk himself who do this. And it would be capitalistically inexpedient for them not to do so. With good reason, these capitalistic scribes dread the economic facts of real capitalistic life. Instead of imitating them, however, Marx tells us: “The truth is that these bourgeois economists were warned by a sound instinct that to probe top deeply into the burning question of the origin of surplus value would be extremely dangerous.” (page 560, A.U.)

Not only are these capitalist apologists “genuinely ignorant”; it is dangerous also for the workers to be any better informed. Instead of dodging the “disturbing real world,” Marx quotes J. Geddes, a glass manufacturer, who said: “As far as I can see, the greater amount of education which a part of the working class has enjoyed for some years past [this was in 1865] is an evil. It is dangerous, because it makes them independent.” (page 400, footnote, S.S.) Marx also quotes Mandeville (whom he characterized as “an honest, clear-headed man”) to the effect that “To make the society [which of course consists partly of non-workers] happy and people easier under the meanest circumstances, it is requisite that great numbers of them should be ignorant as well as poor.” (page 628, S.S.) G. Ortes, the Venetian monk, is also quoted by Marx: “In the economy of a nation, advantages and evils always balance one another; the abundance of wealth with some people is always equal to the want of it with others; the great riches of a small number are always accompanied by the absolute privation of the first necessaries of life for many others. The wealth of a nation corresponds with its population, and its misery corresponds with its wealth. Diligence in some compels idleness in others. The poor and idle are a necessary consequence of the rich and active.” (page 662, S.S.) On the same page, Marx makes an extract from Parson Townsend: “Legal constraint [to labor] is attended with too much trouble, violence and noise ... whereas hunger is not only a peaceable, silent, unremitted pressure, but as the most natural motive to industry and labor, it calls forth the most powerful exertions,” etc. Here Marx is not showing any exchange of equivalents; he is only showing a miserable and poverty-stricken existence in exchange for producing riches and luxuries for the idlers!

Average Commercial Prices and Commodity Prices

Now, finally, we may take in two Marxian peeps at an even broader view of the matter, not merely of commercial prices but even of average commercial prices.

It is sometimes supposed that Marx regards average prices as the equivalents of the commodity values. Such, however, is not the case. The idea that “in the long run” prices tally exactly with the values, has no place in the economics of Marx. In a footnote (page 218, A.U.), we read a passage of Marx’s thus: “The calculations in the text are intended merely as illustrations, and in them, therefore, it is assumed that prices are equal to values. In Book Three, we shall learn that even in the case of average prices no such simple assumption can be made.” Which is to say that even average prices are not really equal to the values, as will be shown by Marx in his Vol. III.

Again toward the close of the second section (of Part II in his Vol. I) entitled Contradictions in the General Formula for Capital, Marx proceeds:

“We have ... come to a double result.

“The transformation of money into capital is to be explained on the basis of the laws immanent in the exchange of commodities, is to be explained in such a way that the starting point is an exchange of equivalents.”

At this point Marx has a lengthy footnote, from which the writer culls the following:

“The foregoing explanations will have enabled the reader to understand that this statement only means that the formation of capital must be possible even if the price of a commodity is equal to the value of the commodity. The formation of capital cannot be explained out of a deviation of the prices of commodities from their values ... The continual oscillations in market prices, their rise and their fall, cancel one another, reducing themselves to an average price which constitutes their hidden rule. Average prices are the guiding star of the merchant or the industrialist in every undertaking that requires time. He knows that, when a sufficiently long period of time is taken into consideration, commodities are not sold either above or below their price, but are sold at an average price. Were it to his interest to consider the matter disinterestedly, he would formulate the problem of the creation of capital in the following terms: How can we account for the origin of capital on the supposition that prices are regulated by an average price: this in the last resort, meaning that they are regulated by the value of the commodities? I say ‘in the last resort’ because average prices do not ... directly coincide with the value of commodities.” (page 153, A.U.)

Not only does Marx never say, in any of his economic work, that in reality individual market exchanges must be, or are, those of equivalents; but openly and most distinctly, as we amply see above, he definitely and unmistakably declares that even “average prices do not directly coincide with values.”

Why Only Volume One Is Quoted

All the foregoing excerpts are taken from Marx’s Vol. I, and no quotation has been made from his Vol. III. There is a special reason for this. Volume I has been alleged to contain certain misstatements, and these had afterwards therefore to be “contradicted” by Vol. III. For it was wrongly contended that, in his first volume, Marx taught the regular business exchange of equivalent values. Accordingly, the character of Vol. I, so to speak, was in question. Accordingly, too, it is quite proper that this Vol. I should be allowed to speak for itself, by means of its positive expressions upon the relative feature.

Under cover of the price form, with exchanges of “money for the money’s worth,” it is easy for capitalist exchanges to pass as those of equivalents. As a common everyday fact, the capitalist always claims to be giving at least “value for value” in his business, in both his buying and his selling – particularly, both in buying labor-power and in selling labor’s products. But do we see Marx taking this capitalistic and common pretense for granted? Certainly we do not; although we see him assuming the capitalist claim to be true (even as truthfulness might conceivably be momentarily assumed on the part of Bohm Bawerk), just for the sake of argument. What is here more important, however, we see Marx, in his first volume, teaching the very thing which (in this “disturbing real world”) we had been falsely told he only “admitted” in his Vol. III, namely, the common, everyday commercial exchange of non-equivalents.

Therefore, the so-called “contradiction” between Marx’s first and third volumes, invented perhaps by Bohm Bawerk, is nothing more than grotesque and malicious fabrication. There is no such Marxian “contradiction.” Instead of which, between the three volumes of Marx’s Capital, regarding values and prices and much else besides, there is only constant agreement and constant co-ordinate consistency and scientifically superb corroboration.

Sydney, Australia

W.H. Emmett

(For quotations in W.H. Emmett’s article)


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