A broad outline has now been given of the marvellous work which, whatever judgment we may feel it necessary to pass upon the value of the doctrines it enunciates, will remain for all time one of the loftiest summits ever climbed by human thought, one of the imperishable monuments of the creative powers of the human mind. Above all we are impressed and charmed by the magnificent quality of the exposition, in which but one defect can be pointed out, and this was probably imposed by the abnormal conditions under which the author wrote.
We allude to the last chapter, the one that crowns the story of the historic expropriation of the workers with the eloquent example of the colonies. Logically this chapter should precede the penultimate chapter, wherein Marx, from his account of these terrible happenings, casts the horoscope of revolution. It is probable that the inversion was deliberate, for the prophetic call to the proletarian revolution would have been more likely to attract the attention of the censorship had it been placed at the end of the volume.
Apart from this trifling matter, we cannot but admire the shapely pyramidal construction, the harmonious and flowing movement of the book, which, passing from the most subtle disquisitions upon the algebra of value, deals with the complexities of factory life and machine production, plunges into the inferno of workshops and mines and into the infamous stews of unspeakable poverty, to conclude with a description of the tragic expropriation of a suffering population. The work is a masterpiece wherein all is great, all alike incomparable and wonderful—the acuteness of the analysis, the statuesque majesty of the whole, the style vibrant with sorrow or with indignation according as the author is sympathising with the woes of the poor or scourging the villainies of the mighty, the vast learning, and the torrential impetus of passion. There is a stupendous harmony of irreconcilables, so that, as in the mysterious creations of nature, we find an almost inconceivable association of real symmetry with apparent disorder; an association of minute attention to detail with monumental synthesis, an association of mathematics with history, an association of repose with movement; so that in all its fibres the book seems to be the offspring of an unfathomable and transcendental union between superhuman labour and superhuman pain.
Nothing, therefore, is more natural or more readily explicable than the phenomenal success of Capital, a success which has rarely been paralleled in the history of intellectual productions. Translated into almost every language (recently even into Chinese); eagerly read by men of learning no less than by statesmen, by reactionaries as well as by rebels; quoted in parliaments and in meetings of the plebs, from the pulpit and from the platform, in huts and in palaces—it speedily secured a world-wide reputation for its author, making him the idol of the most irreconcilable classes and of the most contrasted stocks. Whereas, in fact, the prophetic announcement of the glorious advent of collective property led to the assembling round Marx of all the common people of the west, who hailed him as avenger, as leader, and as seer of the onward march of the proletariat; in such countries as Russia, where capitalist development was as yet in its infancy, the bourgeois classes sang the praises of the book which announced the historic mission of capitalism, and thus it was that the idol of the western pÉtroleurs became in the far east of Europe the fetich of bankers and manufacturers.
After the first shock of surprise, however, readers turned to the dispassionate analysis of the individual doctrines advocated in the work, and were not slow to bring to light certain gaps and sophisms. To say truth, no sovereign importance can be attributed to any of these criticisms, nor is it necessary to make much of the numerous attacks upon the statistical demonstrations of Capital.
It is undeniable that Marx's thesis of the progressive concentration of wealth into the hands of an ever-diminishing number of owners, and of the correlatively progressive impoverishment of the common people, has not been confirmed. It has indeed been confuted by the most authoritative statistics collected since the publication of the book, for these show that the greater recipients of income increase more than proportionally to the medium and lesser recipients, whereas the number of taxpayers in the lowest grades diminishes, with a proportionate increase in the number of those at a slightly higher level. Further, as far as this last fact is concerned, there can be no doubt that wages have increased of late, so that they not merely rise above the miserable level of bare subsistence specified by Lassalle, but also rise above the level (which is still miserable, though a trifle higher) expressed in the calculations of Marx.
It is, however, needful to add that the Marxist thesis merely points to a general tendency, and does not imply a denial that more or less considerable fluctuations may occur at particular periods. Moreover, the concentration of wealth does not find expression solely in the diminution of the numerical proportion between the greater and the lesser recipients of income, but in addition in a diminution of the ratio between the taxpayers and the population and in an increase in the contrast between the wealth of the recipients of income in various grades. Further, the most authoritative statistics demonstrate a growing diminution in the ratio between the owners and the general population. Again, no one can deny that the contrast between high grade and low grade incomes has of late exhibited an enormous increase; that banking concentration and the sway of the banks over industry (a source of increasing disparity in fortunes) has attained in recent years an intensity which even Marx could not have foreseen; and that, subsequently to the publication of Capital and to the death of its author, the social fauna has been enriched by an economic animal of a species previously unknown, the multimillionaire, whose existence undeniably reveals an unprecedented advance in capitalist concentration.
Nay more, after Marx's death, agrarian and industrial concentration attained preposterous proportions, such as he had never ventured to predict. In the American Union, a single landed estate will embrace territories equal to entire provinces, while industrial capital becomes amassed by milliards in the hands of a few despotic trusts, so that two-thirds of the entire working population are employed by one-twentieth of all the separate enterprises in the country. These statements concern the apex of the social pyramid; but even at the base of that structure the phenomena are far from invalidating the Marxist conception to the extent which many contend. Correlatively with the undeniable rise in wages (which, moreover, has been arrested of late, and has been replaced by a definite movement of retrogression), there has occurred an enormously greater increase in income, and therefore a deterioration in the relative condition of the workers. There has further been manifest an increasing instability of employment, so that unemployment has become more widespread and more frequent, exposing the working classes to impoverishment and incurable degradation.
Marx's other theses, however, are open to more serious objection. Retracing the thread of his demonstrations with special attention to his study of primitive accumulation, no one can deny the absolute authenticity of the facts he narrated. Nor can Marx be blamed for having restricted his historic demonstration to England; though in actual fact the expropriation of the cultivators has been carried out everywhere, openly or tacitly, and everywhere this expropriation has been an initial stage in the foundation of capitalist property. Even Russia, who flattered herself upon her independence of the universal law and upon escaping the fated expropriation of her peasants, Russia, whom Marx himself, as if in a sudden fit of mental aberration, was on the point of excluding from the sphere of his generalisations, has to submit to the invariable rule, and to witness the transformation of her independent peasant proprietors into proletarians.
The constitutional defect of this portion of Marx's book is of a very different character. Although he tells the story of the expropriation of the cultivators, he fails to explain why such expropriation must always take place, he fails to bring this great historical event beneath the sway of a universal economic theory. Now, putting aside the incongruity that a book essentially founded upon logical demonstration should all at once break off that demonstration to turn to a historical disquisition and a simple record of facts, no one has any right to construct a theoretical generalisation upon the bare narration of hard facts without referring these to the general psychological and logical causes which have produced them. It cannot be denied that in this respect Marx's demonstration presents a defect which it is impossible to make good.
Yet more serious criticism may be directed against the theory of the industrial reserve army, the theory wherein Marx attempts to sum up the law of population of the capitalist era. For the theory is wholly based upon the premise that the conversion of wage capital into technical capital is competent to bring about the permanent unemployment of labour, or definitively to reduce the demand for labour. Now this premise will not hold, for technical capital, by promptly increasing the profit of capital, and by lowering the price of the product in the long run, provides for the capitalist, first of all, and subsequently for the consumer, the possibility of fresh savings, and these in the end create a further demand for labour, so that sooner or later there will be a call upon the active services of the workers who are temporarily unemployed. Vain, therefore, is any attempt to make technical capital responsible for the relative excess of population, which technical capital cannot possibly produce, for this phenomenon must be referred to the presence and to the activity of a very different variety of capital, and one not considered by Marx, namely unproductive capital.
But these criticisms, which after all touch no more than points of detail, are mere trifles in comparison with the incurable contradictions in which the author's fundamental theory is involved. In fact, by a vigorous deduction from his premise that the value of commodities is measured by the mass of labour incorporated in them, Marx arrives at the fundamental and logical distinction between constant capital and variable capital. If, however, the value of products be exclusively determined by the mass of labour incorporated in them, it is evident that the capital invested in machinery or in raw material can only transmit to the product a value exactly equal to the quantity of labour contained therein, without adding any surplus, and that it is therefore constant capital; whereas wage capital transmits to the product value equal to all the quantity of labour which it maintains and sets in motion, a quantity which, as we know, exceeds the quantity of labour contained in the capital itself. In other words, wage capital, besides reproducing its own value, furnishes a supplement or a surplus value, and is therefore variable capital. Consequently surplus value arises exclusively from variable capital, and is therefore precisely proportional to the quantity of this capital.
It further ensues that of two undertakings employing equal amounts of aggregate capital, the one which employs a larger proportion of constant capital ought to furnish a profit and a rate of profit lower than that furnished by the other. But free competition among the capitalists enforces an equal rate of profit upon the capitals invested in the various undertakings, and leads to the immediate abandonment of undertakings requiring a greater proportion of constant capital, and to the correlative expansion of the others. There consequently results an increase in the value of the products of the former undertakings, and a diminution in the value of the products of the latter. This process continues until the value of the respective products furnishes an equal rate of profit to the capitals respectively employed in producing them. Value, therefore, though in the first instance it is equivalent to the labour employed in producing the products, necessarily diverges from that standard in the end, and has then an utterly different measure. Thus the theory we are discussing is peremptorily refuted, or is reduced to absurdity.
From the outset Marx is distinctly aware of the existence of this striking contradiction, which emerges in so formidable a manner in the first stage of his investigation; he frankly recognises it, but postpones its solution to the later volumes of his treatise. On the very morrow, indeed, of the publication of the first volume, he ardently set to work once more, and sketched to his friend, in monumental pages, the design of the complete book. Just as St. Augustine was grieved that the duties of his episcopate deprived him of the hours which he would have preferred to devote to the writing of a volume to be the crown of his City of God, so Marx was harassed by the thought of the time which the work of party organisation filched from his scientific labours, and it was solely that he might escape from the absorbing engagements involved in the former task that in the Hague congress of 1872 he proposed the transfer of the International to New York.
But now we unexpectedly reach a "dead point" in the biography of our thinker, for his mental life, otherwise so normal and so brilliant, here suddenly becomes obscured, and is tinged with mystery and enigma. For, on the one hand, Marx clearly affirmed, and showed by his actions, that he definitely wished to devote himself to the completion of his treatise, whereas, on the other hand, it is undeniable that after the publication of the first volume of Capital, he never wrote another line of the book, and that all the posthumous additions to this volume were composed prior to 1867. I do not mean to imply that during subsequent years he gave himself up to inertia or repose, for it was during this period that he wrote all the economic section in Engels' booklet against DÜhring; he learned Russian; he read the agricultural statistics of numerous countries and the reports on poverty in Ireland; he studied the matriarchal system; carried on ingenious discussions with Engels concerning Carey's theory of rent and Bastiat's theory of the cost of reproduction; threw light on the influence of fluctuations in the value of money upon the rate of profit; sketched a mathematical theory of commercial cycles—in a word, his thought-process remained so active that when a certain publisher asked for the right to issue his complete works, he replied, "My works, those which represent my present thought, are not yet written." But the essential work of his life, the work which had been so much cherished and which he again and again turned over in his thoughts, seems, as far as palpable traces are concerned, to have been entirely dismissed from his mind. We thus look on, marvelling and grieved, at the sight of the enfeebled hero withdrawing from the field, what time his banner, whose staff is not yet firmly implanted in the ground, is left as a target for the easy assaults of his emboldened adversaries.
There certainly contributed to this intellectual shipwreck the illnesses and the misfortunes from which Marx suffered during the later years of his life. His health had been gravely undermined by overwork during the composition of the first volume of Capital and during the task of proletarian organisation; trouble from boils alternated with bronchitis, liver disorder, headache, and lumbago. In vain did he seek health in gentler climes, at Ramsgate, Ventnor, Neuenahr, Carlsbad, Algiers, Monte Carlo, Vevey, and other fashionable health resorts. All attempts at cure proving inefficacious, he had at length to settle down once more in London.
In 1881 occurred the death of his wife; while the death of his beautiful daughter Jenny, Longuet's wife, in January, 1883, was, if possible, a yet more cruel blow. Marx never recovered from this last shock; henceforward he was a broken man, the mere shadow of his former self; he passed his time contemplating the portraits of his two dear ones which Engels was to bury with him, and he no longer took any interest in the world around him or in the social tumult of which he was the inspirer and the originator. He died suddenly at two in the afternoon of March 14, 1883, while seated in his study chair. The titanic brain, which had given a new world to humanity, which had broken once for all the spiritual and material bondage of mankind, had ceased to live and to vibrate.
Most distressing of all, he had taken with him to the grave the solution of the formidable enigma which everyone, the vulgar and the thinkers alike, had expected his genius to solve, and which no one else could unravel. It is true that shortly before his death he showed his friend the bulky manuscripts dictated in earlier days relating to the Criticism of Political Economy, suggesting that something might be made of this collection. It is also true that Engels, faithful executor of his divinity's wishes, devoted himself with splendid zeal to the publication of the manuscripts. But alas what delusion was in store for the admirers of the master! What a Russian campaign of disaster organised by enthusiastic lieutenants to the hurt of this Napoleon of thought!
In 1885, two years after the death of Marx, there was published under Engels' supervision a so-called second volume of Capital. But the careless and pedestrian editorship, the long theoretical disquisitions making no appeal to facts for their justification, disquisitions in which the argumentative thread is continually broken, suffice to show that what we have before us is not a book, hardly even a sketch for a book, but a series of casual writings composed for the purposes of study and for personal illumination. Moreover, the work is wholly devoted to uninspiring monetary discussions upon the circulation of capital, to dissertations concerning fixed and circulating capital, the formation of metallic reserves, the circulation of commodity-capital, etc.
Noteworthy, in any case, are the investigations which aim at throwing light on the process in virtue of which there is effected the formation of metallic reserves which remain out of circulation for a longer or shorter period. If, says Marx, a certain commodity requires for its production six months of labour, and cannot be sold until two months after its production has been completed, the capitalist, if he is to continue the work of production during the period in which the commodity remains unsold, has need of additional capital which he could dispense with if the sale could be effected immediately after production. But when, at the close of the circulation period, the capitalist resumes possession of the capital first utilised and realises it in money, he has no immediate need of all this capital, but only of the quantity necessary to make good the additional capital which he has invested, that is to say, a quantity of capital equal to the difference between the primary capital and the supplementary capital; consequently the excess remains at liberty, and goes to constitute and to increase monetary reserves. These reserves are formed in addition, and by an analogous process, on account of the wear of machinery; for the portions of value transmitted by the machines to the product and correlative to the wear of these machines are pent up until the day of the complete destruction of the machines or of their necessary replacement. Thus the difference between the period of production and the period of exchange of the commodities, and the difference between the period of economic redintegration and the period of technical redintegration of the productive machinery, give rise to the formation of monetary or capitalistic reserves, which become in their turn the source of intricate developments and interesting complications.
The book likewise contains a masterly, though wordy and disconnected, account of the circulation of capital. But absolutely nowhere does it touch on or even hint at the theoretical enigma left unsolved in the first volume. Solely in Engels' preface do we find an announcement that the definitive solution will be furnished in a subsequent volume, and a suggestion that in the interim economists engage in a sort of academic debate, and bring forward their respective solutions. There actually took part in this strange competition, with varying success, Conrad Schmidt, LandÉ, Lexis, Skworzoff, Stiebeling, Julius Wolf, Fireman, Lafargue, Soldi, Coletti, Graziadei, and myself. At length, however, in 1894, appeared the third volume, which was to reveal to an impatient world the desired solution.
The solution reduces itself to this. It is true, says Marx, that the value commensurate to labour ends by assigning to the capitals respectively employed as constant and as variable, different rates of profit, and that this is radically incompatible with competition. But it is likewise true that products are not actually sold for their value, but for their price of production, which is equal to the capital consumed plus profit at the ordinary rate on the total capital employed. Certainly if we consider the mass of products sold, we find that their total price is precisely equal to their total value. But this integral value is not distributed among the various products in proportion to the quantity of labour incorporated in them, but in a lesser or greater proportion, according as the products themselves contain a greater or less proportion of the mean between the constant capital and the total capital; that is to say, the products containing a proportion of constant capital superior to the mean are sold at a price above their value in order to eliminate the deficiency of profit due to the preponderance of the capital which does not produce surplus value; whereas the products containing a proportion of constant capital inferior to the mean are sold at a price less than their value so as to eliminate the excess of profit due to the preponderance of the capital that produces surplus value; whilst only the products containing the mean proportion of constant capital and total capital are sold at a price precisely identical with their value.
But it soon becomes apparent that this so-called solution is little more than a play upon words, or, better expressed, little more than a solemn mystification. For when economists endeavour to throw light upon the laws of value, they naturally consider the value at which the commodities are actually sold, and not a fantastical or transcendental value, not a value which neither possesses nor can possess any concrete relationship to facts. It may well be that value as determined by abstract economic theory will not always correspond precisely with value as a concrete fact, for the complexities and the manifold vicissitudes of real life impose obstacles; it may well be, indeed, that to the rigidity of normal value, constituting the type of the relationship of exchange, we ought to counterpose the comparatively transient fluctuations of current value.
But it must be understood that no logical fact should stand in the way of the realisation of normal value, for this, conversely, ought to be derived by logical necessity from fundamental economic premises. Of a value, indeed, which not only is not realised, but is not logically capable of realisation, the economist neither can nor ought to take any account; he should show in what respect, instead of being the expression of what value is, it is the expression of what value is not and cannot be; he should point out the negation of every correct and positive theory of value. Now this value commensurate to labour, value as defined by Marx's theory, not merely has its realisation restricted or modified by the vicissitudes of reality, but further, as Marx himself is constrained to recognise, is not logically capable of realisation, seeing that it would give rise to results incompatible with the most elementary advantage of those who effect the exchange of commodities; consequently, it is not merely an abstraction remote from reality, but is incompatible with reality; not only is it an impossibility in the realm of fact, but further and above all it is a logical impossibility.
Thus, far from effecting the salvation of the threatened doctrine, this alleged solution administers a death-blow, and implies the categorical negation of what it professes to support. For what meaning can there possibly be in this reduction of value to labour, the doctrine dogmatically affirmed in the first volume, to one who already knows that the author is himself calmly prepared to jettison it? Is there any reason for surprise at Marx's hesitation to publish this so-called defence; need we wonder that his hand trembled, that his spirit quailed, before the inexorable act of destruction?
Despite all, however, genius will not be denied, and even this volume contains here and there masterly disquisitions, enriching the science of economics with new and fertile truths. It will be enough, in this connection, to refer to two theories. The first of these, the theory of the decline in the rate of profit, though not free from objection, is none the less inspired and profound. The second is the theory of absolute rent, a brilliant and acute deduction from the Marxist theory of value. This theory, indeed, as we saw just now, leads to the conclusion that value commensurate to labour furnishes an extra profit to the capital which produces commodities requiring for their production an above-average proportion of variable capital. Now, where free competition exists, such extra profit cannot continue, and must necessarily be eliminated by a reduction in the price of the product to a point below its value. But when competition is not fully free, there is no reason why such extra profit should not be permanent. Now agrarian production requires an abnormally high proportion of variable capital, and consequently agricultural produce, when sold for its value, furnishes an extra profit. But since land is a monopolised element, this extra profit can be permanently assigned to the owners of the soil, because there is no effective competition to prevent their continuing to draw it. There thus comes into existence an absolute land rent, in opposition to or in addition to the differential rent of Ricardo's theory. This absolute rent is not due to the varying cost of production in different areas; it is not the exclusive appanage of lands more favourably situated or of lands of better quality; it arises solely from the excess in the value of agrarian produce over its cost of production, and is a general attribute of land per se, in virtue of its quality as a monopolised element. Marx acutely studies the manifold varieties of this rent according as it is rendered in work, in produce, or in money; and with sound and far-reaching intuition he deduces from his theory explanations of the intricate agrarian relationships among the various peoples of the globe.
Nor is this the only gem with which the work is adorned. Very remarkable are the pages upon merchants' capital and moneylenders' capital, on their despotic predominance prior to the inauguration of the capitalist rÉgime, and upon their inevitable dissolution after the advent of that rÉgime. The closing pages, however, seem to breathe a vague weariness, and we find hardly any trace of masterly theoretical discussion of the class struggle, of its origin, of the instruments through which it operates, although this discussion, according to the author's original plan, was to be the monumental crown of the titanic work.
Thus, however fragmentarily, and thanks to the help of lieutenants and of disciples who were not always adequately instructed, the theoretical treatise, at once the pride and the torment of our prophet, at length arrived at completion. But the reader will not forget that to the positive treatment of his subject, Marx always counterposed a historico-critical investigation of the theories of his precursors, and in the more mature design of his work such an exposition was to follow upon the exposition of his own doctrines and to form their apt complement. It remained, therefore, to bring to light this last part of his researches, a duty which was faithfully discharged (after the death of Engels) by Karl Kautsky, with the publication of the History of the Theory of Surplus Value, which appeared in four volumes during the years 1905 to 1910. Substantially, though publishers have preferred to treat it as a work apart, this book is nothing other than the concluding section of Capital, announced in the preface to the first volume, where the author tells of a sequel to be devoted to the history of this theory.
In the posthumous work Marx traces the development of the theory of surplus value through its three essential stages, the prericardian, the Ricardian, and the postricardian. To the first of these phases belong the theories of the physiocratic school, whose essence Marx grasps with marvellous acuteness, maintaining that the theories in question were the doctrinal reflection of the interests of the rising capitalist class, constrained to pretend that its own economic claims were the logical expression of the advantage of the landed and feudalist classes then politically dominant. Particularly noteworthy are the comments on the teaching of Adam Smith. The second volume contains a searching criticism of the Ricardian system, and above all of Ricardo's theories of value and of profit. In the third section Marx passes judgment on the theories of Ricardo's successors, Malthus, Senior, and John Stuart Mill, for these writers, says Marx, follow the setting sun of bourgeois economic science, follow that science to its now inevitable doom.
It was a fixed idea with Marx that the theoretical analysis of capitalist relationships had secured its fullest and most adequate expression in the pages of Ricardo; he believed that Ricardo had supplied the ultimate synthesis possible on these lines; that any further progress of economic science in its bourgeois trappings had become impossible; that its decline amid contradictions and perversions was inevitable; and that economics could only be renewed and reborn when the disintegrated vesture of bourgeois economic relationships had been completely thrown aside to give place to a definitive and superior social form. It is scarcely necessary to point to the sophisms and the arbitrary assumptions upon which this concept is based; but it must be admitted that the poverty, deficiency, and incurable vanity of current economic science increasingly tend to give the theory an awkward semblance of truth.
