First Published: 1887
Source: Pall Mall Gazette, May 6th 1887, p5
Transcription: Steve Palmer
Copyleft: Internet Archive(marxists.org) 2009. Permission is granted to copy and/or distribute this document under the terms of the Creative Commons License.
Most opportunely there is given to the English readers this year, under the most authoritative auspices, a translation of the great textbook of modern socialism. It is a portion only of the complete work of Karl Marx which is now published; but it is the portion on which his fame rests, and which has served as the intellectual arsenal of the Socialist movement. On the Continent we are told, Marx's Capital is often called "the Bible of the Working Class". This arrogant title so characteristic of the temper and pretensions of Marx and his school does not appear to have any great warrant in fact. But the work is eminently fitted to become the Bible of the revolutionary socialists. In its defects, as well as in its strongest qualities, it may be taken as the type of the revolutionary mode of thought. We find in it great literary power, together with surprising scientific weakness, keen and wide observation of facts disfigured by the grossest partiality and unfairness, un bounded egotism and contempt for opponents, coupled with a genuine sympathy for the suffering and oppressed. The man who has once satisfied himself as to the value of Marx's Capital need trouble himself no further with theoretic socialism. He can reserve his energies for the more useful task of working out practical reforms. The work abounds in repetitions, and then is not very philosophically arranged; but, speaking roughly, we can distinguish in the work three principal enquiries. We have first a theory of value, on which is founded a theory of profit and of the accumulation of capital. Then we have a description of the state of the working classes under the system of capitalistic, or large-scale industry. And, underlying the whole work, but more particularly in its closing at chapters, we have a doctrine of social transformation. It will be convenient, as far as possible, to deal with each of these enquiries separately.
If it is difficult to treat Marxist theory of value at once briefly and fairly, the fault is not the critic. The theory will not bear the searching test of condensation. Its argument is only saved from flagrant absurdities by innumerable inconsistencies, masked under a cloud of words and expressed in a pseudo-metaphysical terminology. Marx is very fond of quoting Sir James Stuart. We never take up Marx's theory of value without being reminded of a quaint passage in that meritorious writer"Q. Why does the doctrine of money appear so intricate? Ans. Because it is perplexed by jargon." Dropping the jargon, the essence of the theory is as follows:- Things which are the subject of exchange and valuation must have some common elements, otherwise they would not be commensurable. That element cannot be found in their uses, which are as diverse as the things themselves. It is, therefore, due to the labour which they embody-abstract social labour. Labour, therefore, alone creates value. Again in exchange, the values which change hands are always equal. How, then, can exchange give rise to profit? It could not do so but for the fact that one of the things bought and sold - namely labour - is of such a character that though it is always bought at the value of its cost of subsistence, it is able to produce more, sometimes much more, then this cost. Thus we have a margin, out of which, in various ways specified, "capital" extracts a profit, which is a robbery of labour and a source of accumulation. Further it is clearly implied that the reward of labour having nothing to do with its a efficiency or the advance of the industrial arts, but depending upon the cost of its subsistence, Labour has no share in the progress of society, but is doomed to perpetual penury. This is the famous "iron law" of capitalist it production, borrowed without acknowledgement by [from? SP] Lassalle, and better known in connection with his brilliant propaganda.
It is high time that it should be distinctly stated that this "theory" is nothing more than an elaborate attempt to disguise a petitio principii [assuming the conclusion - SP]. The first proposition that value is only congealed labour is partly based upon a misunderstanding of Ricardo, which ought to have been impossible to a man of Marx's general mental power; and partly rests on the syllogism stated above, an argument which has been refuté sans replique [indisputably refuted - SP] by the Rev. P.H. Wicksteed with unnecessary patience in Today October 1884. Utilities possess value, when they are scarce, no matter what may be the cause or cure of the scarcity. In this all economists agree, although they have followed different methods in their analysis of scarcity. Not a single proposition of this analysis, as it may be found in the works of writers like Jevons, Mr Marshall, and Dr Sidgwick, is shaken by Marxist criticism. His theory of exchange profit is childishly weak. It is obvious that the profit on exchange, or the dealers commission, is included in the equal values exchanged. The service of the dealer is counted by all economists as one of the elements in expense of production. Marx might retort that the dealer renders no service. That is Marx's opinion. Theories have to investigate facts. The fact is that the dealer services are paid for, and form part of price. As to the origin of the "profit" (Marx always jumbles together employer and capitalist) a sufficient explanation of one element in it is that the community finds it worthwhile to pay interest on capital. The other element is the result of the system, believed to be socially advantageous, by which industry is directed by private individuals. Marx disagrees with the accepted view on both points. But in his theory he should have dealt with facts. And it is surprising when we come to the question of opinion how little he has contributed in the way of substantial argument towards refuting the generally received views. On the really important issue, whether interest is or is not justifiable, Marx has nothing more solid to offer than rhetorical sneers at the phrase of Senior, according to which interest is a reward abstinence.
Marx's famous "iron law" rests upon an equivocation of the most palpable kind. The economists had pointed out that under the influence of competition there was a tendency for wages to adjust themselves to what they called the customary standard of comfort. Ricardo, whose theory often suffers from undue generalisation of some of the salient facts of his time, sometimes substituted for this expression the term necessaries of life, which represented the standard of comfort most common in his day. Marx erects an imaginary law upon the confusion. So thoroughly ambiguous is his language that the very same term Gewohnheits-mussigen, which is translated by necessaires in the French edition, appears as "customary". In the English edition(p.304) though a few lines further on that phrase again changes to "necessaries of life". Such ambiguity on an absolutely vital matter is poor work, from a scientific point of view; but the political convenience of this is obvious. When faced by the stubborn facts that the position of the working classes has steadily improved, and that they have made vast savings, Marx falls back on the orthodox standard-of-comfort doctrine. When he wishes to denounce capitalists, we hear no more of the standard of comfort. Labour is doomed by inexorable law to work for bare subsistence.
It is plain that if we start from the proposition that nothing but Labour occasions value, less than 800 pages of dialectic and denunciation will easily bring us to the conclusion that profit is robbery, or indeed to any other conclusion we want, according as we define labour in the sense of personal service or in the Trafalgar-square sense of manual exertion. Marx merely runs through the gamut of the various meanings of labour according as he desires to harmonise his theory with the facts, or with his notion of what the facts ought to be. There is only one of the much despised bourgeois economists whose logical weaknesses at all comparable to that of Marx. Bastiat, like Marx, had assumed a faulty definition of value the main propositions be he desired to prove. But Bastiat was a Frenchman, and his failure was so charmingly lucid that it will always play a useful part in economic instruction. No one will say this of the come across ambiguities of Karl Marx.
 Capital, A Critical Analysis of Capitalist Production by Karl Marx. Translated from the third German edition by Samuel Moore and Edward Aveling and edited by Frederick Engels (London, Swan Sonnenschein, Lowery and Co., Paternoster Square. 1887)
 [W. Stanley Jevons - the economist famous for proving that sunspots are responsible for crises. He also developed a marginal utility theory of value in his Theory of Political Economy, first published in 1871, where he asserted that "labour is never the cause of value". When invited to defend his theory of value publicly against Hyndman's criticism, he famously funked the opportunity. He was also a racist: "Persons of an energetic disposition feel labour less painful than they otherwise would, and, if they happen to be endowed with various and acute sensibilities, their desire of further acquisition never ceases. A man of lower race, a negro for instance, enjoys possession less, and loathes labour more; his exertions, therefore, soon stop. A poor savage would be content to gather the almost gratuitous fruits of nature, if they were sufficient to give sustenance; it is only physical want that drives him to exertion." Theory of Political Economy, (5th edition, New York, 1965), pp182-183. SP]
 [Alfred Marshall, subsequently Professor Economics at Cambridge University. His Principles of Economics used to be the 'Bible', as Foxwell might put it, of neo-classical vulgar economy. It is an astonishing work, oozing race theory from every pore and riddled with anxiety about 'degeneration' of the human race. Eg. "on the Pacific Slope, there were at one time just grounds for fearing that all but highly skilled work would be left to the Chinese; and that the white men would live in an artificial way in which a family became a great expense. In this case Chinese lives would have been substituted for American, and the average quality of the human race would have been lowered."(Principles, 8th edition, IV.V.23n73). Or, "conquering races generally incorporated the women of the conquered; they often carried with them many slaves of both sexes during their migrations, and slaves were less likely than freemen to be killed in battle or to adopt a monastic life. In consequence nearly every race had much servile, that is mixed blood in it: and as the share of servile blood was largest in the industrial classes, a race history of industrial habits seems impossible." (Ibid,.IV.V.7 n65) We also meet the clever but cunning and slippery money-dealing Jew: Ricardo's "aversion to inductions and his delight in abstract reasonings are due, not to his English education, but, as Bagehot points out, to his Semitic origin. Nearly every branch of the Semitic race has had some special genius for dealing with abstractions, and several of them have had a bias towards the abstract calculations connected with the trade of money dealing, and its modern developments; and Ricardo's power of threading his way without slip through intricate paths to new and unexpected results has never been surpassed. But it is difficult even[!!! SP] for an Englishman to follow his track" (Appendix B.19 n44). It is completely fitting that this book should have served as the economics textbook of the English ruling class during their period of imperial domination. Perish the thought that the theories of Marx (who was, after all, of 'the Semitic race') should be superior to this member of the master-race! SP.]
 [Sidgwick, too, had concerns for the relationship between 'inferior' and 'superior' races, though he seems to have been more optimistic than Marshall about the influence good 'tutelage' could have on 'inferior races'. Marshall described him as his "spiritual mother and father." SP]