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VIII. Capital and Surplus Value (Conclusion)

(Duehring having said that the term surplus value merely signifies in ordinary language, rent, profit and interest, Engels still further explains)

We have already seen that Marx does not say that the surplus product of the industrial capitalist, of which he is the first owner, is always exchanged for its value, as Herr Duehring points out. Marx plainly says that trade profit only constitutes a portion of the surplus value and under the foregoing conditions this is only possible if the factory proprietor sells his product under value to the trader and thus parts with a portion of the booty. Marx' contention rationally put is How is surplus value transformed into its subordinate forms, profit, interest, trade-profits, ground rents etc.? and this question Marx undertakes to answer in the third volume of Capital. But since Herr Duehring cannot wait long enough for the second volume to appear he has in the meantime to take a close look at the first volume. He thereupon reads that the immanent laws of capitalistic production, the course of the development of capitalism, realise themselves as the necessary laws of competition and thus are brought to the consciousness of the individual capitalists as dominant motives. That therefore a scientific analysis of competition is only possible when the real nature of capital is grasped, just as the apparent movement of heavenly bodies can only be understood by apprehending their real movement, and not merely those movements which are perceptible to the senses. So Marx shows how a certain law, the law of value, appears under given conditions in the competitive system and makes evident its impelling force. Herr Duehring might have understood that competition plays an important role in the distribution of surplus values, and, after sufficient thought, might have grasped at least the outlines of the transformation of surplus value into its subordinate forms from the examples given in the first volume.

Herr Duehring finds competition to be the stumbling block in the way of his comprehension. He cannot understand how competing entrepreneurs can manage to sell the entire product of labor including the surplus product for so much more than the natural cost of production. Here again that "force" of his which, in his estimation, is the very evil thing, comes into play. According to Marx, the surplus product does not have any cost of production, it is the part of the product which costs the capitalist nothing. If the entrepreneurs were to sell the surplus product at its real cost of production they would have to give it away. Is it not a fact that the competing entrepreneurs really sell the product of labor every day at its natural cost of production? According to Herr Duehring the cost of production consists "in the expenditure of labor or force and therefore in the last analysis must be measured by cost of maintenance," and therefore, in present day society, is to be estimated at the cost of the raw material, instruments of labor and actual wages paid in distinction to taxation, profit and compulsory raising of prices. It is well recognised that in modern society the competing entrepreneurs do not sell their wares at the natural cost of production but calculate on a profit and generally get it. This question which Herr Duehring fancies will level the walls of Marxism as the blast of Joshua did those of Jericho is a question which the economic doctrines of Duehring have to meet also.

"Capitalistic property," he says, "has no practical value and only realises itself because it implies the exercise of indirect power over man. The testimony to the existence of this force is capitalistic profit, and the amount of this latter depends upon the extent and intensity of the power of 'force.'… Capitalistic profit is a political and social institution which manifests itself very strongly as competition. The entrepreneurs take their stand on this relation and each one of them maintains his position. A certain amount of profit is a necessity of the dominant economic condition."

We know quite well that the entrepreneurs are in a position to sell the products of labor at a cost above the natural cost of production. Surely Herr Duehring does not think so meanly of his public as to hold the position that profit on capital stands above competition as the King of Prussia used to stand above the law. The proceeding by which the King of Prussia reached his position of superiority to the law we all know, the methods by which profit has come to be mightier than competition is just what Herr Duehring has to explain and what he stubbornly refuses to explain. It is no argument when he says that the entrepreneurs trade from this position and each one of them maintains his own place. If we take him at his word, how is it possible for a number of people each to be able to trade only on certain terms and yet each one of them to keep his position? The gildmen of the Middle Ages and the French nobility of 1789 operated from a decidedly superior position, and yet they came to grief. The Prussian army at Jena occupied an advantageous position and yet it had to abandon it and surrender piecemeal. It is not enough to tell us that a certain measure of profit is a necessary concomitant of domination in the economic sphere, it is necessary to tell us why. We do not get a step further by the statement of Duehring. "Capitalistic superiority is inseparable from landlordism. A portion of the peasantry is transformed in the cities into factory hands and in the final analysis into factory material. Profit appears as another form of rent." This is a mere assertion and only repeats what should have been explained and proved. We can come to no other conclusion, then, except that Herr Duehring does not like to tackle the answer to his own question how the capitalists are in a position to sell products of labor for more than the natural cost of production, in short Herr Duehring shirks an explanation of profit. He takes the only path open to him, a short cut, and simply declares that profit is the product of "force." This has been stated by Herr Duehring in his economic theory under the statement "force distributes." That is all very well; but the question still persists what does force distribute? There must be something to distribute otherwise force cannot distribute it. The profit which the competing capitalists pocket is something actual and tangible. Force may take but it cannot create. And if Herr Duehring still obstinately persists in his statement that "force" takes the profits for the entrepreneurs he is as silent as the grave as to whence it takes it. Where there is nothing the Kaiser, as all other "force," ceases to operate. From nothing comes nothing, particularly nothing in the shape of profits. If capitalistic private property has not practical actuality, and cannot realize itself, except by the exercise of indirect force over men, the question still persists, in the first place, how did the capitalist government come into possession of this "force" and in the second place how has this force been transformed into profits, and in the third place where does it get these profits?

(The remainder of this section is merely further elaboration of this idea with more caustic satire at the expense of the antagonist of Engels.)

IX. Natural Economic Laws – Ground Rent

(In this chapter Engels proceeds to examine what Herr Duehring called the "fundamental laws" of his theory of economic science.)

Law No. I. "The productivity of economic instruments, natural resources and human force are capable of being increased by invention and discovery."

We are amazed. Herr Duehring treats us like that joke of Moliere on the parvenu who was informed that he had talked prose all his life without being aware of it. That inventions and discoveries increase the productive force of labor in many cases (but in many cases not, as the patent records everywhere show) we have been for a long time aware.

Law No. II. "Division of Labor. The formation of branches of work and the splitting up of activities increases the productivity of labor."

As far as this is true it is a mere commonplace since the time of Adam Smith. How far it is true will appear in the third division of this work.

Law No. III. "Distance and transportation are the most important causes of the advance or hindrance of the organization of productive forces."

Law No. IV. "The industrial state has incomparably greater capacity for population than the agricultural state."

Law No. V. "In economics only material interests count."

These are the natural laws on which Herr Duehring founds his new economics. He remains true to his philosophic methods.

(Hereupon Engels proceeds to the discussion of Duehring's opinions on ground-rent.)

Herr Duehring defines ground-rent as "that income which the landowner as such derives from ground and land." The economic idea of ground-rent, which Herr Duehring undertakes to explain to us, is transformed right away into the juristic concept so that we are no further than at first. He compares the leasing of a piece of land with the loan of capital to an entrepreneur but finds, as is so often the case, that the comparison will not hold. Then he says "to pursue the analogy the profit which remains to the lessee after the payment of ground-rent, answers to that portion of the profit on capital which remains to the entrepreneur who operates with borrowed capital after the interest on the borrowed capital has been paid."

(To these arguments Engels replies:)

The theory of ground-rent is a special English economic matter, and this of necessity because only in England does a mode of production exist by which rent is separated from profit and interest. In England there prevail the greater landlordism and the greater agriculture. The individual landlords lease their lands in great farms to lessees who are able to cultivate them in a capitalistic fashion and do not, like our peasants, work with their own hands, but employ laborers just like capitalistic entrepreneurs. We have here then the three classes of bourgeois society, and the income which each receives – the private landlord in the form of ground-rent, the capitalist in that of profit and the laborer in the form of wages. No English economist has ever regarded the profit of the lessee as Herr Duehring does and still less would he have to explain that the profit of the lessee is what it indubitably is, profit on capital. In England there is no use to discuss this question for the question as well as its answer are obvious from the facts and, since the time of Adam Smith, there has been no doubt at all about it.

The case in which the lessee cultivates his own land, as the rule in Germany, for the profit of the ground landlord does not make any difference in this respect. If the landlord cultivates the land for his own profit and furnishes the capital he puts the profit on capital in his pocket as well as the ground-rent for it cannot be otherwise under existing conditions. And if Herr Duehring thinks that rent is something different when the lessee cultivates the land for himself it is not so and only shows his ignorance of the matter.

For example: —

"The revenue derived from labor is called wages; that derived from stock by the person who manages or employs it is called profit. The revenue which proceeds from land is called rent and belongs altogether to the landlord. The revenue of the farmer is derived partly from his labor and partly from his stock… When those three different sorts of labor belong to different persons they are readily distinguished, but when they belong to the same they are sometimes confounded with one another at least in common language. A gentleman who farms part of his own estate, after paying the expenses of cultivation, should gain both the rent of the landlord and the profit of the farmer. He is apt to denominate, however, his whole gain, profit, and thus confounds rent with profit, at least in common language. The greater part of our North American and West Indian planters are in this situation. They farm, the greater part of them, their own estates, and accordingly we seldom hear of the rent of a plantation but frequently of its profit… A gardener who cultivates his own garden with his own hands, unites in his own person the three different characters of landlord, farmer, and laborer. His produce, therefore, should pay him the rent of the first, the profit of the second and the wages of the third. The whole, however, is commonly considered as the wages of his labor. Both rent and profit are in this case confounded with wages."

This passage is in the sixth chapter of the first book of Adam Smith. The case of the landholder who tills his own land has been examined a hundred years ago and the doubts which perplex Herr Duehring so much are caused entirely by his own ignorance.

X. With Respect to the "Critical History"

This which is the concluding portion of the Second Division of the work and which deals with Herr Duehring's estimates of economic writers is omitted as being of too limited and polemic a character for general interest.

PART III
CHAPTER IX
SOCIALISM

The first two chapters of this Division, which deal respectively with the historical and the theoretical sides of Socialism, are omitted. They have been already translated. The well known pamphlet "Socialism, Utopian and Scientific" contains both of them. The second has also been translated by R.C.K. Ensor and published in his "Modern Socialism."

Production

For him (Herr Duehring) socialism is by no means a necessary product of economic development, and, still less, a development of the purely economic conditions of the present day. He knows better than that. His socialism is a final truth of the last instance, it is "the natural system of society." He finds its root in a "universal system of justice." And if he cannot take notice of the existing conditions which are the product of the sinful history of man up to the present time in order to improve them that is so much the worse, we must look upon it as a misfortune for the true principles of justice. Herr Duehring forms his socialism as he does everything else on the basis of his two famous men. Instead of these two marionnetes, as heretofore, playing the game of lord and slave they are converted to that of equality and justice and the Duehring socialism is already founded.

Clearly in the view of Herr Duehring the periodic industrial crises have by no means the same significance as we must attribute to them. According to Herr Duehring they are only occasional departures from normality and furnish a splendid motive for the institution of a properly regulated system.

(Duehring attributes crises to underconsumption; to which Engels replies:)

It is unfortunately true that the underconsumption of the masses and the limitation of the expenditures of the great majority to the necessities of life and the reproduction thereof is not by any means a new phenomenon. It has existed as long as the appropriating and the plundered classes have existed. Even in those historic periods where the condition of the masses was exceptionally prosperous, as in England in the fifteenth century, there was underconsumption; men were very far from having their entire yearly product at their own disposal. Although underconsumption has been a constant historical phenomenon for a thousand years, the general break down in trade, due to overproduction, has appeared, for the first time, within the last fifteen years. Yet the vulgar political economy of Herr Duehring attempts to explain the new phenomenon, not by means of the new factor of overproduction, but by means of the exceedingly old factor of underconsumption. It is just as if one were to try and explain a change in the relation of two mathematical quantities, one of which is constant and the other variable, not from the fact that the variable quantity has varied, but that the constant has remained constant. The underconsumption of the masses is a necessary condition of all forms of society in which robbers and robbed exist, and therefore of the capitalist system. But it is the capitalist system which first brings about the economic crisis. Underconsumption is a prerequisite of crises and plays a very conspicuous role in them, but it has no more to do with the economic crisis of the present day than it had with the former absence of such crises.

In every society in which production has developed naturally, to which class that of to-day belongs, the producers do not master the means of production but the means of production dominate the producers.

In such a society every new leverage of production is converted into a new means of subduing the producers beneath the means of production. This was the cause of that instrument of production, the mightiest up to the time of the introduction of the greater industry, the division of labor. The first great division of labor, the separation of the city and country, doomed the inhabitants of the rural districts to a thousand years of stupidity and the people of the towns to be the slaves of their own handiwork. It denied the chance of intellectual development to the one and of physical development to the other. If the peasant had his land and the town dweller his handiwork, it is just as true to say that the land had the peasant and the handiwork the townsman. As far as there was a division of labor there was also a division of man. The rise of one single fact slaughtered all former intellectual and bodily capacities. This annexation of man grew in proportion as the division of labor developed and reached its culmination in manufacture. Manufacture distributes production into its separate operations, makes one of these operations the function of the individual worker, and imprisons the worker for his whole life to a given function and to a given tool. "It forces the workingman to become an abnormality, since it makes him concentrate his efforts on detail at the expense of the sacrifice of a world of forces and capacities… The individual himself becomes subdivided, he is transformed into the automatic tool of the division of labor" (Marx). This tool in many cases finds its perfection in the literal crippling of the worker, body and soul. The machinery of the greater industry degrades the workingman from a machine to being the mere appendage of a machine. "From the lifelong specialization of looking after a machine there comes the lifelong specialization of serving a part of a machine. The abuse of machinery transforms the worker from childhood into a portion of a part of a machine" (Marx). And not only the workingman but the classes which indirectly or directly plunder the workingman are also themselves involved in the division of labor and become the slaves of their own tools. The spiritually-barren bourgeois is the slave of his own capital and his own profit-getting, the jurist is dominated by his ossified notions of justice which rule him as a self-contained force; the "refined classes" are dominated by the local limitations and prejudices, by their own physical and spiritual astigmatism, by their specialised education and their lifelong bondage to this specialty, even though the specialty be doing nothing.

The Utopists were thoroughly aware of the effects of the division of labor, of the effect on the one hand of crippling the worker and on the other of crippling the work, the unavoidable result of the lifelong, monotonous repetition of one and the same act. The rise of the antagonism between town and country was regarded by Fourier as well as Owen as the beginning of the rise of the old division of labor. According to both of them the population should be divided into groups of from six hundred to three thousand each, distributed over the country. Each group has an enormous house in the midst of its territory and the housekeeping is done in common. Fourier occasionally speaks of towns but these only consist of four or five of the big communal houses in close proximity to each other. By both of them the work of society is divided into agriculture and industry. According to Fourier, handwork and machine manufacture were both included in the latter while Owen made the great industry play the most important part, and the steam engine and machinery performed the work of the community. But both in agriculture and manufacture the two writers named gave the greatest possible variety of occupation to individuals, and accordingly the education of the young provided for the most universal technical training. Both of them think that there will be a universal development of the human race as a result of a universal practical participation in practical work, and that work will recover its old attractiveness, which has been lost as a result of the division of labor, by virtue of this variety and the shortening of the time expended upon it.

Just as far as society obtains the domination of the social means of production in order to organize them socially it abolishes the existing servitude of man to his own means of production. Society cannot be free without every member of society being free. The old methods of production must be completely revolutionized and the old form of the division of labor must be done away with above all. In its place an organization of production will have to be made in which, on the one hand, no single individual will be able to shift his share in productive labor, in providing the essentials of human existence, upon another, and on the other hand productive labor instead of being a means of slavery will be a means towards human freedom, in that it offers an opportunity to everyone to develop his full powers, physical and intellectual, in every direction and to exercise them so that it makes a pleasure out of a burden.

This is no longer at the present time a phantasy, a pious wish. Owing to the present development of the powers of production, production has proceeded far enough, provided that society endows itself with the possession of the social forces and abolishes the checks and impediments, as well as the waste of products and productive forces, which springs from the capitalistic methods, to make a general reduction of labor time, to an amount, small as compared with present day ideas.

The abolition of the old method of division of labor is not an advance which would not be possible except at the expense of the productivity of labor, quite otherwise. It is a condition of production which has come about spontaneously through the great industry. "The machine industry does away with the necessity of constantly distributing groups of workmen at the different machines by keeping the worker constantly at the same task. Since the total product of the factory, proceeds not from the worker but from the machine, a continual changing about of individuals could not exist, without an interruption of the labor-process. Finally the speed with which work at the machine is learnt even by children does away with the necessity of training a distinct class of workmen exclusively as machine laborers." But while the capitalistic method of use of machinery does away with the old limited particularity of labor, and, in spite of the fact, that technique is rendered superfluous, machinery itself rebels against the anachronism. The technical basis of the greater industry is revolutionary. "Through machinery, chemical processes and other methods, the functions of the working class and the social labor process are revolutionized along with the technical basis of production. The division of labor is also revolutionized and masses of capital and labor are hurled incontinently from one branch of industry to another. The nature of the greater industry demands mobility of labor, a fluidity of functions and a complete adaptibility on the part of the laborers. We have seen how this absolute contradiction shows itself in the continual sacrifice of the working class, the most complete waste of labor force, and the dominance of social anarchy. But if the mobility of labor now appears to be a law of nature beyond human control which realizes itself, in spite of all obstacles, it also becomes a matter of life and death for the greater industry, owing to its catastrophic character, to recognise the mobility of labor and hence the greatest possible adaptibility of the working class, as a universal law of social production, and to accommodate circumstances to its normal development. It becomes a question of life and death for the greater industry to keep an enormous number of people on the edge of starvation always in reserve, in order that they may be able to be placed at the disposal of the needs of capital as these vary."

While the greater industry has taught us how to transform molecular movement into mass movement in order to fulfill technical needs, it has, in the same measure, freed industrial production from local limits. Water power was local, steam power is free. If water power belongs to the country, steam power is by no means limited to the town. It is capitalistic practice which causes concentration into cities and which makes manufacturing towns of manufacturing villages. But thereby at the same time it undermines the essentials of its own motive force. The first requisite of the steam engine and a prime requisite of all branches of motive power is a sufficient quantity of pure water. The factory town transforms all water into evil smelling sewage. Therefore, in proportion as the concentration into cities is the foundation of capitalistic production, each individual capitalist tries to get away from the towns which have been necessarily produced to the motive forces of the country. This process may be individually observed in the textile districts of Lancashire and Yorkshire. The greater industry creates new towns in the course of its progress from the town to the country. The same phenomenon was to be observed in the districts of the metal industry where somewhat different causes produce identical results.

The capitalistic character of the greater industry is responsible for this aimless blundering and these new contradictions. Only a society which organizes its industrial forces according to a single great harmonious plan, can permit industry to settle itself in such a manner throughout the land as to secure its own development and the retention and development of the most important elements of production.

The abolition of the antagonism between town and country is now not only possible, it has become an absolute necessity for industrial production itself. It has also become a necessity for agricultural production, and is, above all, essential to the maintenance of the public health. Only through the amalgamation of city and country can the present poisoning of air, water, and localities, be put at an end and the waste filth of the cities be used for the cultivation of vegetation rather than the spreading of disease.

The capitalistic industry has made itself relatively independent of local limitations for its raw materials. The textile industry works with imported raw materials for the most part. Spanish iron ores are worked up in England and Germany, and South American copper ores in England. Every coal field supplies a yearly increasing number of places beyond its own confines. The whole coast of Europe has steam engines driven by English and, occasionally German and Belgian, coal. A society freed from the limits of capitalistic production could make still further advances. While it makes a sort of all round skilled producers, who are acquainted with the scientific requirements of general industrial production, and by whom every new succession of branches of production is completely developed from beginning to end, it creates a new productive force which undertakes the transportation of a superabundance of raw material or fuel.

The abolition of the separation between town and country is no Utopia, it is an essential condition of the proportionate distribution of the greater industry throughout the country. Civilization has left us a number of large cities, as an inheritance, which it will take much time and trouble to abolish. But they must and will be done away with, however much time and trouble it may take. Whatever fate may be in store for the German nation, Bismarck may have the proud consciousness that his dearest wish, the downfall of the great city, will be fulfilled.

It is easy to see that the revolutionary elements which will abolish the old division of labor together with the separation of town and country and will revolutionize production as a whole are already in embryo in the methods of production of the modern great industry and their unfolding is only hindered by the capitalistic methods of production of to-day. But to see all this, it is necessary to have a broader outlook than the mere limitations of the Prussian Code, the country where schnapps and beet sugar are the staple industries, and you have to study industrial crises by way of the book-trade. (This is a sneer at one of Duehring's illustrations: Ed.) One has to understand the history and the present manifestations of the greater industry particularly in that land where it has its home and where it has had its classic development. It must not be imagined that modern scientific socialism can be done away with by the specific Prussian Socialism of Herr Duehring.

Distribution

We have seen that Duehring's economics depend upon the statement that the capitalistic method of production is good enough and can be kept up, but that the capitalistic method of distribution is bad and must be done away with. We now discover that the "sociality" of Herr Duehring is merely the imaginary putting into force of this statement. In fact it appears that Herr Duehring has nothing to declare respecting the method of production as such in a capitalistic society, and that he will maintain the old division of labor in all its essential features. So he has hardly a word to say about production in his social state. Production is too dangerous a ground for him to tread on. On the other hand, in his estimation, distribution is not bound up with production but can be settled by an act of the will.