Rosa Luxemburg

[1]For a totally different interpretation see Sweezy; The Theory of Capitalist Development, chap. xi, Section 9.

[2]See p. 166.

[3]Cf. the quotation from Capital, vol. iii, p. 331.

[4]See p. 132.

[5]See p. 135.

[6]See p. 130.

[7]Exchanges between industries, however, must take place at ‘prices of production’ not at values. See below, p. 15, note.

[8]See p. 113.

[9]See p. 361.

[10]See p. 134.

[11]Later it is assumed that real wages can be depressed by taxation (p. 455).

[12]See p. 116.

[13]See p. 85.

[14]See p. 355.

[15]See p. 76, note 355.

[16]See p. 79.

[17]In the numerical example quoted in chap. vi. (p. 117.) the rate of profit is much higher in Department II than in I. Marx has made the rate of exploitation equal in the two departments, and the ratio of constant to variable capital higher in Department I. This is evidently an oversight. The two departments must trade with each other at market prices, not in terms of value. Therefore s₁ must represent the profits accruing to Department I, not a proportion (half in the example) of the value generated in Department I. ^s₁/_v1 should exceed ^s₂/_v2 to an extent corresponding to the higher organic composition of capital in Department I. The point is interesting, as it shows that when off guard Marx forgot that he could make prices proportional to values only when the organic composition of capital is the same in all industries.

[18]See p. 129.

[19]See p. 130.

[20]Since, in this model, the organic composition of capital is the same in the two departments, prices correspond to values.

[21]Of total gross output, ²/₃ is replacement of constant capital; surplus is ¹/₆ of gross output, and of surplus half is saved; thus savings are ¹/₁₂ of gross output; of saving ⁴/₅ is added to constant capital; thus ¹/₁₅ of gross output is added to constant capital. The output of Department I is therefore ²/₃+ ¹/₁₅ or ¹¹/₁₅ of total gross output. Similarly, the output of Department II is ⁴/₁₅ of total gross output.

[22]This model bears a strong family resemblance to Mr. Harrod’s ‘Warranted rate of growth’. Towards a Dynamic Economics, lecture III.

[23]See p. 119.

[24]See p. 125.

[25]See p. 128.

[26]See p. 91.

[27]See p. 115.

[28]See p. 102. The phrase ‘zahlungsfÄhige nachfrage’, translated ‘effective demand’, is not the effective demand of Keynes (roughly, current expenditure) but appears often to mean demand for new capital, or, perhaps, prospective future demand for goods to be produced by new capital.

[29]This assumption is made explicit later (p. 342).

[30]See pp. 131 et seq.

[31]See Sweezy, loc. cit.

[32]See p. 40.

[33]See p. 303.

[34]See p. 258.

[35]This point is, however, later admitted (p. 337).

[36]See p. 252.

[37]See p. 259. Marx himself failed to get this point clear. Cf. my Essay on Marxian Economics, chap. v.

[38]Cf. Kalecki, Essays in the Theory of Economic Fluctuations, pp. 14 et seq.

[39]See p. 323.

[40]See p. 314. Marx did not find himself in this dilemma because he held that there is a fundamental ‘contradiction’ in capitalism which shows itself in a strong tendency for the rate of profit on capital to fall as technical progress takes place. But Rosa Luxemburg sees that the tendency to a falling rate of profit is automatically checked and may even be reversed if real-wage rates are constant (p. 338).

[41]See p. 217, note.

[42]One passage suggests that she sees the problem, but thinks it irrelevant to the real issue (p. 342).

[43]See p. 338.

[44]See p. 337.

[45]In this model the rate of exploitation is different in the two departments. This means that the numbers represent money value, not value.

[46]Rosa Luxemburg seems to regard this process as impossible, but for what reason is by no means clear (p. 341).

[47]See p. 352.

[48]See p. 352.

[49]See p. 358.

[50]See p. 370.

[51]See p. 428.

[52]See p. 435.

[53]See p. 421.

[54]See p. 455.

[55]See p. 387.

[56]Hicks, Value and Capital, p. 302, note. Mr. Hicks himself, however, regards the increase in population as the mainspring.

[57]Cf. A Survey of Contemporary Economics (ed. Ellis), p. 63.

[58]‘If production be capitalistic in form, so, too, will be reproduction’ (Capital, vol. i, p. 578).

[59]Surplus value in our exposition is identical with profit. This is true for production as a whole, which alone is of account in our further observations. For the time being, we shall not deal with the further division of surplus value into its component parts: profit of enterprise, interest, and rent, as this subdivision is immaterial to the problem of reproduction.

[60]‘Quesnay’s Tableau Économique shows ... how the result of national production in a certain year, amounting to some definite value, is distributed by means of the circulation in such a way, that ... reproduction can take place.... The innumerable individual acts of circulation are at once viewed in their characteristic social mass movement—the circulation between great social classes distinguished by their economic function’ (Capital, vol. ii, p. 414).

[61]Cf. Analyse du Tableau Économique, in Journal de l’Agriculture, du Commerce et des Finances, by Dupont (1766), pp. 305 ff. in Oncken’s edition of Œuvres de F. Quesnay. Quesnay remarks explicitly that circulation as he describes it is based upon two conditions: unhampered trade, and a system of taxation applying only to rent: ‘Yet these facts have indispensable conditions; that the freedom of commerce sustains the sale of products at a good price, ... and moreover, that the farmer need not pay any other direct or indirect charges but this income, part of which, say two sevenths, must form the revenue of the Sovereign’ (op. cit., p. 311).

[62]Adam Smith, An Enquiry into the Nature and Causes of the Wealth of Nations (ed. MacCulloch, Edinburgh London, 1828), vol. i, pp. 86-8.

[63]Op. cit., vol. ii, pp. 17-18.

[64]Ibid., pp. 18-19.

[65]Ibid., p. 23.

[66]As to the concept of ‘national capital’ specific to Rodbertus, see below, Section II.

[67]J. B. Say, A Treatise on Political Economy (transl. by C. R. Prinsep, vol. ii, London, 1821); pp. 75-7.

[68]Attention must be drawn to the fact that Mirabeau in his Explications on the Tableau Économique explicitly mentions the fixed capital of the unproductive class: ‘The primary advances of this class, for the establishment of manufactures, for instruments, machines, mills, smithies (ironworks) and other factories ... (amount to) 2,000 million livres’ (Tableau Économique avec ses Explications, 1760, p. 82). In his confusing sketch of the Tableau itself, Mirabeau, too, fails to take this fixed capital of the sterile class into account.

[69]Smith accordingly arrives at this general formulation: ‘The value which the workmen add to the materials, therefore, resolves itself in this case into two parts, of which the one pays their wages, the other the profits of their employer upon the whole stock of materials and wages which he advanced’ (op. cit., vol. i, p. 83). Further, in Book II, chap. 8, on industrial labour in particular: ‘The labour of a manufacturer adds generally to the value of the materials which he works upon, that of his own maintenance and of his master’s profit. The labour of a menial servant, on the contrary, adds to the value of nothing. Though the manufacturer has his wages advanced to him by his master, he in reality costs him no expense, the value of those wages being generally restored, together with a profit, in the improved value of the subject upon which his labour is bestowed’ (op. cit., vol. ii, pp. 93-4).

[70]‘The labourers ... therefore, employed in agriculture, not only occasion, like the workmen in manufactures, the reproduction of a value equal to their own consumption, or to the capital which employs them, together with its owner’s profit, but of a much greater value. Over and above the capital of the farmer and all its profits, they regularly occasion the reproduction of the rent of the landlord’ (ibid., p. 149).

[71]Ibid., pp. 97-8. Yet already in the following sentence Smith converts capital completely into wages, that is variable capital: ‘That part of the annual produce of the land and labour of any country which replaces a capital, never is immediately employed to maintain any but productive hands. It pays the wages of productive labour only. That which is immediately destined for constituting a revenue, either as profit or as rent, may maintain indifferently either productive or unproductive hands’ (ibid., p. 98).

[72]Ibid., p. 19.

[73]Smith, op. cit., vol. ii, pp. 19-20.

[74]Ibid., vol. i, pp. 21-2.

[75]Ibid., p. 22.

[76]Ibid.

[77]An Enquiry into the Nature and Causes of the Wealth of Nations, vol. i, p. 19.

[78]Theorien Über den Mehrwert (Stuttgart, 1905), vol. i, pp. 179-252.

[79]Capital, vol. ii, p. 435.

[80]Smith, op. cit., vol. ii, p. 148.

[81]Ibid., p. 149.

[82]Op. cit., vol. i, pp. 86-7.

[83]In this connection, we have disregarded the contrary conception which also runs through the work of Smith. According to that, the price of the commodity cannot be resolved into v+ s, though the value of commodities consists in v+ s. This distinction, however, is more important with regard to Smith’s theory of value than in the present context where we are mainly interested in his formula v+ s.

[84]For the sake of simplicity, we shall follow general usage and speak here and in the following of annual production, though this term, strictly speaking, applies in general to agriculture only. The periods of industrial production, or of the turnover of capitals, need not coincide with calendar years.

[85]The distinction between intellectual and material labour need not involve special categories of the population in a planned society, based on common ownership of the means of production. It will always find expression in the existence of a certain number of spiritual leaders who must be materially maintained. The same individuals may exercise these various functions at different times.

[86]Capital, vol. ii, p. 459.

[87]Capital, vol. ii, pp. 544-7. Cf. also p. 202 on the necessity of enlarged reproduction under the aspect of a reserve fund.

[88]Marx’s italics.

[89]Theorien Über den Mehrwert, vol. ii, part 2, p. 248.

[90]In his seventh note to the Tableau Économique, following up his arguments against the mercantilist theory of money as identical with wealth, Quesnay says: ‘The bulk of money in a nation cannot increase unless this reproduction itself increases; otherwise, an increase in the bulk of money would inevitably be prejudicial to the annual production of wealth.... Therefore we must not judge the opulence of states on the basis of a greater or smaller quantity of money: thus a stock of money, equal to the income of the landowners, is deemed much more than enough for an agricultural nation where the circulation proceeds in a regular manner, and where commerce takes place in confidence and full liberty’ (Analyse du Tableau Économique, ed. Oncken, pp. 324-5).

[91]Marx (Capital, vol. ii, p. 482) takes the money spent directly by the capitalists of Department II as the starting point of this act of exchange. As Engels rightly says in his footnote, this does not affect the final result of circulation, but the assumption is not the correct condition of circulation within society. Marx himself has given a better exposition in Capital, vol. ii, pp. 461-2.

[92]Capital, vol. ii, p. 548.

[93]Capital, vol. ii, p. 550.

[94]Ibid., p. 551.

[95]Ibid., p. 572.

[96]‘The premise of simple reproduction, that I(v+ s) is equal to IIc, is irreconcilable with capitalist production, although this does not exclude the possibility that a certain year in an industrial cycle of ten or eleven years may not show a smaller total production than the preceding year, so that there would not have been even a simple reproduction, compared to the preceding year. Indeed, considering the natural growth of population per year, simple reproduction could take place only in so far as a correspondingly larger number of unproductive servants would partake of the 1,500 representing the aggregate surplus-product. But accumulation of capital, actual capitalist production, would be impossible under such circumstances’ (Capital, vol. ii, p. 608).

[97]Ricardo, Principles, chap. viii, ‘On Taxes’. MacCulloch’s edition of Ricardo’s Works, p. 87, note. (Reference not given in original.)

[98]‘The specifically capitalist mode of production, the development of the productive power of labour corresponding to it, and the change thence resulting in the organic composition of capital, do not merely keep pace with the advance of accumulation, or with the growth of social wealth. They develop at a much quicker rate, because mere accumulation, the absolute increase of the total social capital, is accompanied by the centralisation of the individual capitals of which that total is made up; and because the change in the technological composition of the additional capital goes hand in hand with a similar change in the technological composition of the original capital. With the advance of accumulation, therefore, the proportion of constant to variable capital changes. If it was originally say 1: 1, it now becomes successively 2: 1, 3: 1, 4: 1, 5: 1, 7: 1, etc., so that, as the capital increases, instead of ¹/₂ of its total value, only ¹/₃, ¹/₄, ¹/₅, ¹/₆, ¹/₈, etc., is transformed into labour-power, and, on the other hand, ²/₃, ³/₄, ⁴/₅, ⁵/₆, ⁷/₈ into means of production. Since the demand for labour is determined not by the amount of capital as a whole, but by its variable constituent alone, that demand falls progressively with the increase of the total capital, instead of, as previously assumed, rising in proportion to it. It falls relatively to the magnitude of the total capital, and at an accelerated rate, as this magnitude increases. With the growth of the total capital, its variable constituent or the labour incorporated in it, also does increase, but in a constantly diminishing proportion. The intermediate pauses are shortened, in which accumulation works as simple extension of production, on a given technical basis. It is not merely that an accelerated accumulation of total capital, accelerated in a constantly growing progression, is needed to absorb an additional number of labourers, or even, on account of the constant metamorphosis of old capital, to keep employed those already functioning. In its turn, this increasing accumulation and centralisation becomes a source of new changes in the composition of capital, of a more accelerated diminution of its variable, as compared with its constant constituent’ (Capital, vol. i, pp. 642-3).

[99]‘The course characteristic of modern industry, viz., a decennial cycle (interrupted by smaller oscillations), of periods of average activity, production at high pressure, crisis and stagnation, depends on the constant formation, the greater or less absorption, and the re-formation of the industrial reserve army or surplus population. In their turn, the varying phases of the industrial cycle recruit the surplus population, and become one of the most energetic agents of its reproduction’ (ibid., pp. 646-7).

[100]Capital, vol. i. pp. 593-4.

[101]Ibid., p. 594.

[102]Op. cit., vol. ii, pp. 596-601.

[103]Capital, vol. ii, pp. 598-9.

[104]Ibid., p. 599.

[105]Capital, vol. ii, pp. 600-1.

[106]Surplus consumption.

[107]Capital, vol. ii, p. 429.

[108]Ibid., pp. 531-2.

[109]Op. cit., vol. i, p. 594, note 1.

[110]Ibid., p. 594.

[111]Here we can leave out of account instances of products capable in part of entering the process of production without any exchange, such as coal in the mines. Within capitalist production as a whole such cases are rare (cf. Marx, Theorien ..., vol. ii, part 2, pp. 255 ff.).

[112]Capital, vol. ii, p. 503.

[113]Capital, vol. ii, p. 571.

[114]Ibid., p. 572.

[115]Ibid., pp. 573-4.

[116]Capital, vol. ii, p. 375.

[117]Ibid., pp. 575-6.

[118]Capital, vol. ii, pp. 579-81.

[119]Ibid., p. 581.

[120]Capital, vol. ii, pp. 583-4.

[121]Ibid., p. 584.

[122]Capital, vol. ii, p. 585.

[123]Ibid., pp. 586-7.

[124]Ibid., pp. 588-9.

[125]Capital, vol. ii, pp. 590-1.

[126]Ibid., p. 593.

[127]Capital, vol. ii, p. 594.

[128]Ibid., p. 595.

[129]Ibid., p. 595.

[130]Ibid., p. 596.

[131]Ibid., p. 601.

[132]Capital, vol. ii, p. 610.

[133]Capital, vol. ii, p. 572.

[134]Capital, vol. ii, pp. 380-1.

[135]Ibid., p. 381.

[136]Capital, vol. ii, pp. 381-3.

[137]Ibid., p. 383.

[138]Capital, vol. ii, pp. 384-5.

[139]Ibid., p. 385.

[140]Capital, vol. ii, p. 387.

[141]Ibid., p. 397.

[142]Ibid., p. 397.

[143]Ibid., pp. 397-8.

[144]Capital, vol. ii, p. 401.

[145]Capital, vol. ii, pp. 8 ff.

[146]Cf. e.g. Capital, vol. ii, pp. 430, 522, and 529.

[147]In the review of an essay on Observations on the injurious Consequences of the Restrictions upon Foreign Commerce, by a Member of the late Parliament, London, 1820 (Edinburgh Review, vol. lxvi, pp. 331 ff.). This interesting document, from which the following extracts are taken, an essay with a Free Trade bias, paints the general position of the workers in England in the most dismal colours. It gives the facts as follows: ‘The manufacturing classes in Great Britain ... have been suddenly reduced from affluence and prosperity to the extreme of poverty and misery. In one of the debates in the late Session of Parliament, it was stated that the wages of weavers of Glasgow and its vicinity which, when highest, had averaged about 25s. or 27s. a week, had been reduced in 1816 to 10s.; and in 1819 to the wretched pittance of 5-6s. or 6s. They have not since been materially augmented.’ In Lancashire, according to the same evidence, the direct weekly wage of the weavers was from 6s. to 12s. a week for 15 hours’ labour a day, whilst half-starved children worked 12 to 16 hours a day for 2s. or 3s. a week. Distress in Yorkshire was, if possible, even greater. As to the address by the frame-work knitters of Nottingham, the author says that he himself investigated conditions and had come to the conclusion that the declarations of the workers ‘were not in the slightest degree exaggerated’.

[148]Ibid., p. 334.

[149]Paris, 1827.

[150]Preface to the second edition. Translation by M. Mignet, in Political Economy and the Philosophy of Government (London, 1847), pp. 114 ff.

[151]Nouveaux Principes ... (2nd ed.), vol. i, p. 79.

[152]Nouveaux Principes ... (2nd ed.), vol. i, p. xv.

[153]Ibid., p. 92.

[154]Ibid., pp. 111-12.

[155]Ibid., p. 335.

[156]Op. cit., vol. ii, p. 435.

[157]Ibid., p. 463.

[158]Op. cit., vol. i, p. xiii (pp. 120-1 of Mignet’s translation).

[159]Nouveaux Principes ... (2nd ed.), vol. i, p. 84.

[160]Ibid., p. 85.

[161]Ibid., p. 86.

[162]Ibid., pp. 86-7.

[163]Nouveaux Principes ..., vol. i, p. 87.

[164]Ibid., pp. 87-8.

[165]Ibid., pp. 88-9.

[166]Nouveaux Principes ..., vol. i, pp. 108-9.

[167]Ibid., pp. 93-4.

[168]Ibid., p. 95.

[169]Nouveaux Principes ..., vol. i, pp. 95-6.

[170]Ibid., pp. 104-5.

[171]Ibid., p. 105.

[172]Ibid., pp. 105-6.

[173]Ibid., pp. 113, 120.

[174]Nouveaux Principes ..., vol. i, p. 121.

[175]Vladimir Ilyich [Lenin], Economic Studies and Essays, St. Petersburg, 1899.

[176]The article in the Edinburgh Review was really directed against Owen, sharply attacking on 24 pages of print the latter’s four treatises: (1) ‘A New View of Society, or Essays on the formation of Human Character’, (2) ‘Observations on the Effects of the Manufacturing System’, (3) ‘Two Memorials on Behalf of the Working Classes, Presented to the Governments of America and Europe’, and finally (4) ‘Three Tracts’ and ‘An Account of Public Proceedings relative to the Employment of the Poor’. ‘Anonymous’ here attempts a detailed proof that Owen’s reformist ideas by no means get down to the real causes of the misery of the English proletariat, these causes being: the transition to the cultivation of barren land (Ricardo’s theory of ground rent!), the corn laws and high taxation pressing upon farmer and manufacturer alike. Free trade and laissez-faire thus is his alpha and omega. Given unrestricted accumulation, all increase in production will create for itself an increase in demand. Owen is accused of ‘profound ignorance’ as regards Say and James Mill.—‘In his reasonings, as well as in his plans, Mr. Owen shows himself profoundly ignorant of all the laws which regulate the production and distribution of wealth.’—From Owen, the author proceeds to Sismondi and formulates the point of contention as follows: ‘He [Owen] conceives that when competition is unchecked by any artificial regulations, and industry permitted to flow in its natural channels, the use of machinery may increase the supply of the several articles of wealth beyond the demand for them, and by creating an excess of all commodities, throw the working classes out of employment. This is the position which we hold to be fundamentally erroneous; and as it is strongly insisted on by the celebrated M. de Sismondi in his Nouveaux Principes d’Économie Politique, we must entreat the indulgence of our readers while we endeavour to point out its fallacy, and to demonstrate, that the power of consuming necessarily increases with every increase in the power of producing’ (Edinburgh Review, Oct. 1819, p. 470).

[177]The original title is: Examen de cette question: Le pouvoir de consommer s’accroÎt-il toujours dans la sociÉtÉ avec le pouvoir de produire? We have not been able to obtain a copy of Rossi’s Annales, but the essay as a whole was incorporated by Sismondi in the second edition of his Nouveaux Principes.

[178]At the time of writing, Sismondi was still in the dark as to the identity of ‘Anonymous’ in the Edinburgh Review.

[179]Sismondi, op. cit., vol. ii, pp. 376-8.

[180]MacCulloch, loc. cit., p. 470.

[181]Incidentally, Sismondi’s Leipsic Book Fair, as a microcosm of the capitalist world, has staged a come-back after 55 years—in Eugen Duehring’s ‘system’. Engels, in his devastating criticism of that unfortunate ‘universal genius’ adduces this idea as proof that Duehring, by attempting to elucidate a real industrial crisis by means of an imaginary one on the Leipsic Book Fair, a storm at sea by a storm in a teacup, has shown himself a ‘real German literatus’. But, as in many other instances exposed by Engels, the great thinker has simply borrowed here from someone else on the sly.

[182]Sismondi, op. cit., vol. ii, pp. 381-2.

[183]MacCulloch, loc. cit., p. 470.

[184]Sismondi, op. cit, vol. ii, p. 384.

[185]MacCulloch, loc. cit., p. 471.

[186]Sismondi, op. cit., vol. ii, pp. 394-5.

[187]Ibid., pp. 396-7.

[188]Ibid., pp. 397-8.

[189]MacCulloch, loc. cit., pp. 471-2.

[190]Sismondi, op. cit., vol. ii, pp. 400-1.

[191]Sismondi, op. cit., vol. ii, p. 401.

[192]Ibid., pp. 405-6.

[193]It is typical that on his election to Parliament in 1819, when he already enjoyed the highest reputation on account of his economic writings, Ricardo wrote to a friend: ‘You will have seen that I have taken my seat in the House of Commons. I fear I shall be of little use there. I have twice attempted to speak but I proceeded in the most embarrassed manner, and I have no hope of conquering the alarm with which I am assailed the moment I hear the sound of my own voice’ (Letters of D. Ricardo to J. R. MacCulloch, N.Y., 1895, pp. 23-4). Such diffidence was quite unknown to the gasbag MacCulloch.

[194]Nouveaux Principes ..., book iv, chap. vii.

[195]Ibid., book vii, chap. vii.

[196]D. Ricardo, On the Principles of Political Economy and Taxation (3rd edition, London, 1821), p. 474.

[197]Ibid., p. 478.

[198]This essay, Sur la Balance des Consommations avec les Productions, is reprinted in the second edition of Nouveaux Principes, vol. ii, pp. 408 ff. Sismondi tells us about this discussion: ‘M. Ricardo, whose recent death has been a profound bereavement not only to his friends and family but to all those whom he enlightened by his brilliance, all those whom he inspired by his lofty sentiments, stayed for some days in Geneva in the last year of his life. We discussed in two or three sessions this fundamental question on which we disagreed. To this enquiry he brought the urbanity, the good faith, the love of truth which distinguished him, and a clarity which his disciples themselves had not heard, accustomed as they were to the efforts of abstract thought he demanded in the lecture room.’

[199]Ricardo. op. cit., p. 339.

[200]Sismondi, op. cit., vol. ii, p. 361.

[201]Nouveaux Principes ..., book iv, chap, iv: ‘Comment la Richesse commerciale suit l’Accroissement du Revenu’ (vol. i, p. 115).

[202]Sismondi, op. cit., vol. ii, p. 412.

[203]Ibid., p. 416.

[204]Ibid., p. 424.

[205]Ibid., p. 417.

[206]Sismondi, op. cit., vol. ii, pp. 425-6.

[207]Ibid., p. 429.

[208]Ibid., pp. 434-5.

[209]Thus, if Tugan Baranovski, championing Say-Ricardo’s views, tells us about the controversy between Sismondi and Ricardo (Studies on the Theory and History of Commercial Crises in England, p. 176), that Sismondi was compelled ‘to acknowledge as correct the doctrine he had attacked and to concede his opponent all that is necessary’; that Sismondi himself ‘had abandoned his own theory which still finds so many adherents’, and that ‘the victory in this controversy lies with Ricardo’, this shows a lack of discrimination—to put it mildly—such as is practically unheard-of in a work of serious scientific pretensions.

[210]‘L’argent ne remplit qu’un office passager dans ce double Échange. Les Échanges terminÉs, il se trouve qu’on a payÉ des produits avec des produits. En consÉquence, quand une nation a trop de produits dans un genre, le moyen de les Écouler est d’en crÉer d’un autre genre’ (J. B. Say, TraitÉ d’Économie Politique, Paris, 1803, vol. i, p. 154).

[211]In fact, here again, Say’s only achievement lies in having given a pompous and dogmatic form to an idea that others had expressed before him. As Bergmann points out, in his Theory of Crises (Stuttgart, 1895), the work of Josiah Tucker (1752), Turgot’s annotations to the French pamphlets, the writings of Quesnay, Dupont de Nemours, and of others contain quite similar observations on a natural balance, or even identity, between demand and supply. Yet the miserable Say, as Marx once called him, claims credit as the evangelist of harmony for the great discovery of the ‘thÉorie des dÉbouchÉs’, modestly comparing his own work to the discovery of the principles of thermo-dynamics, of the lever, and of the inclined plane. In the preface and table of contents, e.g. to the 6th edition of his TraitÉ (1841, pp. 51, 616) he says: ‘The theory of exchange and of vents, such as it is developed in this work, will transform world politics.’ The same point of view is also expounded by James Mill in his ‘Commerce Defended’ of 1808, and it is he whom Marx calls the real father of the doctrine of a natural equilibrium between production and demand.

[212]Say in Revue EncyclopÉdique, vol. 23, July 1824, pp. 20 f.

[213]Nouveaux Principes ..., vol. i, p. 117.

[214]Say, loc. cit., p. 21.

[215]Say, loc. cit., p. 29. Say indicts Sismondi as the arch-enemy of bourgeois society in the following ranting peroration: ‘It is against the modern organisation of society, an organisation which, by despoiling the working man of all property save his hands, gives him no security in the face of a competition directed towards his detriment. What! Society despoils the working man because it ensures to every kind of entrepreneur free disposition over his capital, that is to say his property! I repeat: there is nothing more dangerous than views conducive to a regulation of the employment of property’ for ‘hands and faculties ... are also property’ (ibid., p. 30).

[216]Sismondi, op. cit., pp. 462-3.

[217]Ibid., p. 331.

[218]Sismondi, op. cit., p. 432-3.

[219]Ibid., p. 449.

[220]Ibid., p. 448.

[221]Marx, in his history of the opposition to Ricardo’s school and its dissolution, makes only brief mention of Sismondi, explaining: ‘I leave Sismondi out of this historical account, because the criticism of his views belongs to a part with which I can deal only after this treatise, the actual movement of capital (competition and credit)’ (Theorien Über den Mehrwert, vol. iii, p. 52). Later on, however, in connection with Malthus, he also deals with Sismondi in a passage that, on the whole, is comprehensive: ‘Sismondi is profoundly aware of the self-contradiction of capitalist production; he feels that its forms, its productive conditions, spur on an untrammelled development of the productive forces and of wealth on the one hand, yet that these conditions, on the other, are only relative; that their contradictions of value-in-use and value-in-exchange, of commodity and money, of sale and purchase, of production and consumption, of capital and wage-labour, and so on, take on ever larger dimensions, along with the forward strides of the productive forces. In particular, he feels the fundamental conflict: here the untrammelled development of productive power and of a wealth which, at the same time, consists in commodities, must be monetised; and there the basis—restriction of the mass of producers to the necessary means of subsistence. He therefore does not, like Ricardo, conceive of the crises as merely incidental, but as essential, as eruptions of the immanent conflicts on ever grander scale and at determinate periods. Which faces him with the dilemma: is the state to put restrictions on the productive forces to adapt them to the productive conditions, or upon the productive conditions to adapt them to the productive forces? Frequently he has recourse to the past, becomes laudator temporis acti, and seeks to master the contradictions by a different regulation of income relative to capital, or of distribution relative to production, quite failing to grasp that the relations of distribution are nothing but the relations of production sub alia specie. He has a perfect picture of the contradictions immanent in bourgeois production, yet he does not understand them, and therefore fails also to understand the process of their disintegration. (And indeed, how could he, seeing this production was still in the making?—R.L.) And yet, his view is in fact grounded in the premonition that new forms of appropriating wealth must answer to the productive forces, developed in the womb of capitalist production, to the material and social conditions of creating this wealth; that the bourgeois forms of appropriation are but transitory and contradictory, wealth existing always with contrary aspects and presenting itself at once as its opposite. Wealth is ever based on the premises of poverty, and can develop only by developing poverty’ (ibid., p. 55).

In The Poverty of Philosophy, Marx opposes Sismondi to Proudhon in sundry passages, yet about the man himself he only remarks tersely: ‘Those, who, like Sismondi, wish to return to the true proportions of production, while preserving the present basis of society, are reactionary, since, to be consistent, they must also wish to bring back all the other conditions of industry of former times’ (The Poverty of Philosophy, London, 1936, p. 57). Two short references to Sismondi are in On the Critique of Political Economy: once he is ranked, as the last classic of bourgeois economics in France, with Ricard in England; in another passage emphasis is laid on the fact that Sismondi, contrary to Ricardo, underlined the specifically social character of labour that creates value.—In the Communist Manifesto, finally, Sismondi is mentioned as the head of the petty-bourgeois school.

[222]Nouveaux Principes ..., vol. ii, p. 409.

[223]Cf. Marx, Theorien Über den Mehrwert, vol. iii, pp. 1-29, which gives a detailed analysis of Malthus’ theory of value and profits.

[224]Dedicated to James Mill and published in 1827.

[225]James Mill, Elements of Political Economy (3rd edition, London, 1826), pp. 239-40.

[226]Malthus. Definitions in Political Economy (London, 1827), p. 51.

[227]Ibid., p. 64.

[228]Malthus, Definitions in Political Economy (London, 1827), pp. 53-4.

[229]Ibid., pp. 62-3.

[230]Die Forderungen der arbeitenden Klassen.

[231]Die Handelskrisen und die Hypothekennot der Grundbesitzer.

[232]Zur Erkenntnis unserer staatswirtschaftlichen ZustÄnde.

[233]Über die Grundrente in sozialer Beziehung.

[234]Die Tauschgesellschaft.

[235]Soziale Briefe.

[236]Rodbertus quotes v. Kirchmann’s arguments explicitly and in great detail. But according to his editors, no complete copy of Demokratische BlÄtter with the original essay is obtainable.

[237]To v. Kirchmann, in 1880.

[238]Dr. Carl Rodbertus-Jagetzow, Schriften (Berlin, 1899), vol. iii, pp. 172-4, 184.

[239]Op. cit., vol. ii, pp. 104 f.

[240]Op. cit., vol. i, p. 99.

[241]Ibid., p. 173.

[242]Ibid., p. 176.

[243]Op. cit., vol. ii, p. 65.

[244]Schriften, vol. i, pp. 182-4.

[245]Ibid., pp. 182-4.

[246]Ibid., p. 72.

[247]Schriften, vol. iii, pp. 110-11.

[248]Ibid., p. 108.

[249]Op. cit., vol. i, p. 62.

[250]Schriften, vol. iv, p. 226.

[251]In Towards the Understanding of Our Politico-Economic Conditions, part ii, n. 1.

[252]In On Commercial Crises and the Mortgage Problem of the Landowners, quoted above (op. cit., vol. iii, p. 186).

[253]Op. cit., vol. iv, p. 233. It is interesting to note in this connection how Rodbertus appears in practice as an extremely sober and realistically-minded prophet of capitalist colonial policy, in the manner of the present-day ‘Pan-Germans’, his moral ranting about the unhappy fate of the working classes notwithstanding. In a footnote to the above quotation, he writes: ‘We can go on to glance briefly at the importance of the opening up of Asia, in particular of China and Japan, the richest markets in the world, and also of the maintenance of English rule in India. It is to defer the solution of the social problem.’ (The eloquent avenger of the exploited ingenuously discloses the means by which the profiteering exploiters can continue ‘their stupid and criminal error’, their ‘flagrant injustice’ for as long as possible.) ‘For the solution of this problem, the present lacks in unselfishness and moral resolution no less than in intelligence.’ (Rodbertus’ philosophical resignation is unparalleled!) ‘Economic advantage cannot, admittedly, constitute a legal title to intervention by force, but on the other hand, a strict application of modern natural and international law to all the nations of the world, whatever their state of civilisation, is quite impracticable.’ (A comparison with Dorine’s words in MoliÈre’s Tartuffe is irresistible: ‘Le ciel dÉfend, de vraie, certains contentements, mais il y a avec lui des accommodements.’)—‘Our international law has grown from a civilisation of Christian ethics, and since all law is based upon reciprocity, it can only provide the standard for relations between nations of the same civilisation. If it is applied beyond these limits, it is sentiment rather than natural and international law and the Indian atrocities should have cured us of it. Christian Europe should rather partake of the spirit which made the Greeks and the Romans regard all the other peoples of the world as barbarians. The younger European nations might then regain the drive for making world history which impelled the Ancients to spread their native civilisation over the countries of the globe. They would reconquer Asia for world history by joint action. Such common purpose and action would in turn stimulate the greatest social progress, a firm foundation of peace in Europe, a reduction of armies, a colonisation of Asia in the ancient Roman style—in other words, a genuine solidarity of interests in all walks of social life.’ The vision of capitalist colonial expansion inspires the prophet of the exploited and oppressed to almost poetical flights, all the more remarkable for coming at a time when a civilisation of Christian ethics accomplished such glorious exploits as the Opium Wars against China and the Indian atrocities—that is to say, the atrocities committed by the British in their bloody suppression of the Indian Mutiny.—In his second Letter on Social Problems, in 1850, Rodbertus had expressed the conviction that if society lacks the ‘moral resolution’ necessary to solve the social question, in other words, to change the distribution of wealth, history would be forced to ‘use the whip of revolution against it’ (op. cit., vol. ii, p. 83). Eight years later, however, the stalwart Prussian prefers to crack the whip of a colonial policy of Christian ethics over the natives of the colonial countries. It is, of course, what one might expect of the ‘original founder of scientific socialism in Germany’ that he should also be a warm supporter of militarism, and his phrase about the ‘reduction of armies’ is but poetic licence in his verbal fireworks. In his essay On the Understanding of the Social Question he explains that the ‘entire national tax burden is perpetually gravitating towards the bottom, sometimes in form of higher prices for wage goods, and sometimes in form of lower money wages’. In this connection, he considers conscription ‘under the aspect of a charge on the state’, explaining that ‘as far as the working classes are concerned, it is nothing like a tax but rather a confiscation of their entire income for many years’. He adds immediately: ‘To avoid misunderstanding I would point out that I am a staunch supporter of our present military constitution (i.e. the military constitution of counter-revolutionary Prussia)—although it may be oppressive to the working classes and demand great financial sacrifices from the propertied classes’ (op. cit., vol. iii, p. 34). That does not even sound like a lion’s roar!

[254]Schriften, vol. iii, p. 182.

[255]Published already in 1845.

[256]Schriften, vol. iv, p. 231.

[257]Schriften, vol. iii, p. 176.

[258]Op. cit., vol. i, pp. 53, 57.

[259]Schriften, vol. i, p. 206.

[260]Ibid., vol. i, p. 19.

[261]Op. cit., vol. ii, p. 110.

[262]Ibid., p. 144.

[263]Schriften, vol. ii, p. 146.

[264]Ibid., p. 155.

[265]Ibid., p. 223.

[266]Schriften, vol. ii, p. 226.

[267]Ibid., p. 156.

[268]Schriften, vol. i, p. 40.

[269]Op. cit., vol. ii, p. 25.

[270]Schriften, vol. i, p. 250.

[271]Ibid., p. 295. Rodbertus reiterates during a lifetime the ideas he had evolved as early as 1842 in his Towards the Understanding of Our Politico-Economic Conditions. ‘Under present conditions, we have, however, gone so far as to consider not only the wage of labour part of the costs of the goods, but also rents and capital profits. We must therefore refute this opinion in detail. It has a twofold foundation: (a) a wrong conception of capital which counts the wage of labour as part of the capital just like materials and tools, while it is on the same level as rent and profit; (b) a confusion of the costs of the commodity and the advances of the entrepreneur or the costs of the enterprise’ (Towards the Understanding of Our Politico-Economic Conditions, Neubrandenburg & Friedland, G. Barnovitz, 1842, p. 14).

[272]Schriften, vol. i, p. 304. Just so already in Towards the Understanding of Our Politico-Economic Conditions, ‘We must distinguish between capital in its narrow or proper sense, and the fund of enterprise, or capital in a wider sense. The former comprises the actual reserves in tools and materials, the latter the fund necessary for running an enterprise under present conditions of division of labour. The former is capital absolutely necessary to production, and the latter achieves such relative necessity only by force of present conditions. Hence only the former is capital in the strict and proper meaning of the term; this alone is completely congruent with the concept of national capital’ (ibid., pp. 23-4).

[273]Schriften, vol. i, p. 292.

[274]Op. cit., vol. ii, p. 136.

[275]Ibid., p. 225.

[276]A memorial of the worst kind, by the way, was that of the editors who published his works after his death. These learned gentlemen, Messrs. Wagner, Kozak, Moritz Wuertz & Co., quarrelled in the prefaces to his posthumous writings like a rough crowd of ill-mannered servants in an antechamber, fighting out publicly their petty personal feuds and jealousies, and slanging one another. They did not even bother in common decency to establish the dates for the individual manuscripts they had found. To take an instance, it needed Mehring to observe that the oldest manuscript of Rodbertus that had been found was not published in 1837, as laid down autocratically by Prof. Wagner, but in 1839 at the earliest, since it refers in its opening paragraphs to historical events connected with the Chartist movement belonging, as a professor of economics really ought to know, in the year 1839. In Professor Wagner’s introduction to Rodbertus we are constantly bored by his pomposity, his harping on the ‘excessive demands on his time’; in any case Wagner addresses himself solely to his learned colleagues and talks above the heads of the common crowd; he passes over in silence, as befits a great man, Mehring’s elegant correction before the assembled experts. Just as silently, Professor Diehl altered the date of 1837 to 1839 in the HandwÖrterbuch der Staatswissenschaften, without a word to say when and by whom he had been thus enlightened.

But the final touch is provided by the ‘popular’, ‘new and inexpensive’ edition of Puttkamer and Muehlbrecht (1899). Some of the quarrelling editors collaborated on it but still continue their disputes in the introductions. Wagner’s former vol. ii has become vol. i in this edition, yet Wagner still refers to vol. ii in the introduction to vol. i. The first Letter on Social Problems is placed in vol. iii, the second and third in vol. ii and the fourth in vol. i. The order of the Letters on Social Problems, of the Controversies, of the parts of Towards the Understanding ..., chronological and logical sequence, the dates of publication and of writing are hopelessly mixed up, making a chaos more impenetrable than the stratification of the soil after repeated volcanic eruptions. 1837 is maintained as the date of Rodbertus’ earliest MS., probably out of respect to Professor Wagner—and this in 1899, although Mehring’s rectification had been made in 1894. If we compare this with Marx’s literary heritage in Mehring’s and Kautsky’s edition, published by Dietz, we see how such apparently superficial matters but reflect deeper connections: one kind of care for the scientific heritage of the authority of the class-conscious proletariat, and quite another in which the official experts of the bourgeoisie squander the heritage of a man who, in their own self-interested legends, had been a first-rate genius. Suum cuique—had this not been the motto of Rodbertus?

[277]An essay in Patriotic Memoirs, May 1883.

[278]An essay in the review Russian Thought, September 1889.

[279]A book published in 1893.

[280]A book published in 1895.

[281]Patriotic Memoirs, vol. v: ‘A Contemporary Survey’, p. 4.

[282]Ibid., p. 10.

[283]Patriotic Memoirs, vol. v: ‘A Contemporary Survey’, p. 14.

[284]Outlines of Economic Theory (St. Petersburg, 1895), pp. 157 ff.

[285]‘Militarism and Capitalism’ in Russian Thought (1889), vol. ix, p. 78.

[286]‘Militarism and Capitalism’ in Russian Thought (1889), vol. ix, p. 80.

[287]Ibid., p. 83. Cf. Outlines, p. 196.

[288]Cf. Outlines of Our Social Economy, in particular pp. 202-5, 338-41.

[289]Vladimir Ilyich [Lenin] has given detailed proof of the striking similarity between the position of the Russian ‘populists’ and the views of Sismondi in his essay On the Characteristics of Economic Romanticism (1897).

[290]Outlines of Our Social Economy, p. 322. Friedrich Engels appraises the Russian situation differently. He repeatedly tries to convince Nikolayon that Russia cannot avoid a high industrial development, and that her sufferings are nothing but the typical capitalist contradictions. Thus he writes on September 22, 1892: ‘I therefore hold that at present industrial production necessarily implies big industry, making use of steam power, electricity, mechanical looms and frames, and lastly the manufacture of the machines themselves by mechanical means. From the moment that railways are introduced in Russia, recourse to all these extremely modern means of production becomes inevitable. It is necessary that you should be able to mend and repair your engines, coaches, railways and the like, but to do this cheaply, you must also be in a position to make at home the things needing repair. As soon as the technique of war has become a branch of industry (armour-plated cruisers, modern artillery, machine guns, steel bullets, smokeless gun powder, etc.) a big industry that is indispensable for the production of such items has become a political necessity for you as well. All these items cannot be made without a highly developed metal industry which on its part cannot develop unless there is a corresponding development of all other branches of production, textiles in particular’ (Marx-Engels to Nikolayon, St. Petersburg, 1908, p. 75). And further in the same letter: ‘So long as Russian industry depends on the home market alone, it can only satisfy the internal demand. The latter, however, can grow but slowly, and it seems to me that under present conditions of life in Russia it is even bound to decrease, since it is one of the unavoidable consequences of high industrial development that it destroys its own home market by the same process which served to create it: by destroying the bases of the peasants’ domestic industry. Yet peasants cannot live without such a domestic industry. They are ruined as peasants, their purchasing power is reduced to a minimum, and unless they grow new roots in new conditions of life, unless they become proletarians, they will only represent a very small market for the newly arising plants and factories.

‘Capitalist production is a phase of economic transition, full of inherent contradictions which only develop and become visible to the extent that capitalist production develops. The tendency of simultaneously creating and destroying a market is just one of these contradictions. Another is the hopeless situation that will ensue, all the sooner in a country like Russia which lacks external markets than in countries more or less fit to compete in the open world market. These latter can find some means of relief in this seemingly hopeless situation by heroic measures of commercial policy, that is to say by forcibly opening up new markets. China is the most recent market to be opened up for English commerce, and it proved adequate for a temporary revival of prosperity. That is why English capital is so insistent on railroad building in China. Yet railways in China mean the destruction of the entire foundation of China’s small rural enterprises and her domestic industry. In this case, there is not even a native big industry developed to compensate for this evil to some extent, and hundreds of millions will consequently find it impossible to make a living at all. The result will be mass emigration, such as the world has never yet seen, and America, Asia and Europe will be flooded with the detested Chinese. This new competitor on the labour market will compete with American, Australian and European labour at the level of what the Chinese consider a satisfactory standard of living, which is well known to be the lowest in the whole world. Well then, if the whole system of production in Europe has not been revolutionised by then, that will be the time to start this revolution’ (ibid., p. 79).

Engels, though he followed Russian developments with attention and keen interest, persistently refused to take an active part in the Russian dispute. In his letter of November 24, 1894, i.e. shortly before his death, he expressed himself as follows: ‘My Russian friends almost daily and weekly bombard me with requests to come forward with my objections to Russian books and reviews which not only misinterpret but even misquote the sayings of our author (Marx). My friends assure me that my intervention would suffice to put matters right. Yet I invariably and firmly refuse all such proposals because I cannot afford to become involved with a dispute held in a foreign country, in a tongue which I, at least, cannot read as easily and freely as the more familiar W. European languages, and in a literature which is at best accessible to me only in fortuitous glimpses of some fragments, and which I cannot pursue anything like systematically enough in all its stages and details without neglecting my real and serious work. There are people everywhere who, once they have taken up a certain stand, are not ashamed to have recourse to misinterpreting the thoughts of others and to all kinds of dishonest manipulations for their own ends, and if that is what has happened to our author, I am afraid they will not deal more kindly with me, so that in the end I shall be compelled to interfere in the dispute, first to defend others, and then in my own defence’ (ibid., p. 90).

[291]We might mention that the surviving champions of ‘populist’ pessimism, and Vorontsov in particular, to the last remained loyal to their views, in spite of all that happened in Russia—a fact that does more credit to their character than to their intelligence. Referring to the 1900 and 1902 crises, Vorontsov wrote in 1902: ‘The doctrinaire dogma of the Neo-Marxists rapidly loses its power over people’s minds. That the newest successes of the individualists are ephemeral has obviously dawned even on their official advocates.... In the first decade of the twentieth century, we come back to the same views about economic development in Russia that had been the legacy of the 1870’s’ (Cf. the review Political Economics, October 1902, quoted by A. Finn Yenotayevski in The Contemporary Economy of Russia 1890-1910, St. Petersburg, 1911, p. 2.) Even to-day, then, this last of the ‘populist’ Mohicans deduces the ‘ephemeral character’, not of his own theory, but of economic reality. What of the saying of BarrÈre: ‘Il n’y a que les morts qui ne reviennent pas’.

[292]Published in Sozialdemokratisches Zentralblatt, vol. iii, No. 1.

[293]Critical Comments on the Problem of Economic Development in Russia.

[294]Op. cit., p. 251.

[295]Ibid., p. 255.

[296]Ibid., p. 252.

[297]Ibid., p. 260. ‘There can be no doubt that Struve’s attempt to refute what he calls the pessimist outlook on the analogy of the U.S.A. is fallacious. He says that Russia can overcome the evil consequences of the most recent capitalism just as easily as the U.S.A. But what he forgets is that the U.S.A. from the first represent a new bourgeois state, that they were founded by a petty bourgeoisie and by peasants who had fled from European feudalism to set up a purely bourgeois society. In Russia, on the other hand, we have a primitive communist foundation, a society of gentes, as it were, in the pre-civilised stage which, though it is already disintegrating, still serves as a material basis upon which the capitalist revolution (for it is in fact a social revolution) can take place and become effective. In America, a monetary economy had been stabilised more than a century ago, whereas a natural economy had until recently prevailed in Russia. It should be obvious therefore that this revolution in Russia is bound to be much more ruthless and violent, and accompanied by immensely more suffering than in America’ (Engels to Nikolayon, October 17, 1893, Letters ..., p. 85).

[298]Critical Comments ..., p. 284.

[299]Professor Schmoller, amongst others, clearly reveals the reactionary aspect of the ‘Three Empire Theory’ (viz. Great Britain, Russia and the U.S.A.) evolved by the German professors. In his handbook of commercial policy (Handelspolitische SÄkularbetrachtung), the venerable scholar dolefully frowns upon ‘neo-mercantilism’, that is to say upon the imperialist designs of the three arch-villains. ‘In the interests of a higher intellectual, moral and aesthetic civilisation and social progress’ he demands a strong German navy and a European Customs Union. ‘Out of the economic tension of the world there arises the prime duty for Germany to create for herself a strong navy, so as to be prepared for battle in the case of need, and to be desirable as an ally to the World Powers’—which latter, however, Professor Schmoller says elsewhere, he does not wish to blame for again taking the path of large-scale colonial expansion. ‘She neither can nor ought to pursue a policy of conquest like the Three World Powers, but she must be able, if necessary, to break a foreign blockade of the North Sea in order to protect her own colonies and her vast commerce, and she must be able to offer the same security to the states with whom she forms an alliance. It is the task of the Three-Partite Union (Germany, Austro-Hungary, and Italy) to co-operate with France towards imposing some restraint, desirable for the preservation of all other states, on the over-aggressive policy of the Three World Powers which constitutes a threat to all smaller states, and to ensure moderation in conquests, in colonial acquisitions, in the immoderate and unilateral policy of protective tariffs, in the exploitation and maltreatment of all weaker elements. The objectives of all higher intellectual, moral and aesthetic civilisation and of social progress depend on the fact that the globe should not be divided up among Three World Empires in the twentieth century, that these Three Empires should not establish a brutal neo-mercantilism’ (Die Wandlungen der EuropÄischen Handelspolitik des 19. Jahrhunderts, ‘Changes in the European Commercial Policy During the 19th Century’, in Jahrb. fÜr Gesetzgebung, Verwaltung und Volkswirtschaft, vol. xxiv, p. 381).

[300]S. Bulgakov, On the Markets of Capitalist Production. A Study in Theory (Moscow, 1897), p. 15.

[301]Ibid., p. 32, footnote.

[302]Ibid., p. 27.

[303]Ibid., pp. 2-3.

[304]On the Markets of Capitalist Production, pp. 50, 55.

[305]On the Markets of Capitalist Production, p. 132 ff.

[306]Ibid., p. 20.

[307]Bulgakov’s italics.

[308]Capital, vol. iii, p. 387.

[309]Bulgakov, op. cit., p. 161.

[310]Ibid., p. 167.

[311]Bulgakov, op. cit., p. 210 (our italics).

[312]Ibid., p. 199.

[313]K. Buecher; The Rise of National Economy (Die Entstehung der Volkswirtschaft), 5th edition, p. 147. Professor Sombart’s theory is the most recent contribution in this field. He argues that we are not moving towards an international economy but rather farther and farther away from it. ‘I maintain, on the contrary, that commercial relations to-day do not form a stronger but rather a weaker link between the civilised nations, in relation to their economy as a whole. Individual economy takes not more but rather less account of the world market than it did a hundred or fifty years ago. At least ... it would be wrong to assume that the relative importance of international relations with regard to modern political economy is increasing. The opposite is the case.’ Sombart scornfully rejects the assumption of a progressive international division of labour, of a growing need for outside markets owing to an inelastic home demand. He in his turn is convinced that ‘the individual national economies will develop into ever more perfect microcosms and that the importance of the home market will increasingly surpass that of the world market for all branches of industry’ (Die Deutsche Volkswirtschaft im 19. Jahrhundert, 2nd edition, 1909, pp. 399-420). This devastating discovery admittedly hinges on a full acceptance of the Professor’s peculiar conception which, for some reasons, only considers those as ‘exporting countries’ who pay for their imports with a surplus of agricultural products over and above their own needs, who pay ‘with the soil’. In this scheme Russia, Rumania, the U.S.A. and the Argentine are, but Germany, England and Belgium are not, ‘exporting countries’. Since capitalist development will sooner or later also claim the surplus of agricultural products for the home demand in Russia and the U.S.A., it is evident that there will be fewer and fewer ‘exporting countries’ in the world—international economy will vanish.—Another of Sombart’s discoveries is that great capitalist ‘non-exporting’ countries increasingly obtain ‘free’ imports in form of interest on exported capital—but the capital exports as well as exports of industrial commodities are of absolutely no account to Professor Sombart. ‘In the course of time we shall probably get to a point where we import without exporting’ (p. 422). Modern, sensational, and precious!

[314]Bulgakov, op. cit., p. 132.

[315]Ibid., p. 236. A quite uncompromising version of the same view is given by V. Ilyin [Lenin]: ‘The romanticists (as he calls the sceptics) argue as follows: the capitalists cannot consume the surplus value; therefore they must dispose of it abroad. I ask: Do the capitalists perhaps give away their products to foreigners for nothing, throw it into the sea, maybe? If they sell it, it means that they obtain an equivalent. If they export certain goods, it means that they import others’ (Economic Studies and Essays, p. 2). As a matter of fact, his explanation of the part played by external commerce in capitalist production is far more correct than that of Struve and Bulgakov.

[316]Studies on the Theory and History of Commercial Crises in England (Jena, 1901) and Theoretical Foundations of Marxism (1905).

[317]Studies on the Theory and History ..., p. 23.

[318]Ibid., p. 34.

[319]Ibid., p. 333.

[320]Ibid., p. 191.

[321]Ibid., p. 231, italics in the original.

[322]Ibid., p. 305.

[323]Studies on the Theory and History ..., p. 191

[324]Ibid., p. 27.

[325]Studies on the Theory and History ..., p. 58.

[326]V. Ilyin [Lenin] ‘Studies and Essays in Economics’ (Oekonomische Studien und Artikel. Zur Charakterisierung des Ökonomischen Romantizismus, St. Petersburg, 1899), p. 20.—Incidentally, the same author is responsible for the statement that enlarged reproduction begins only with capitalism. It quite escapes him that under conditions of simple reproduction, which he takes to be the rule for all pre-capitalist modes of production, we should probably never have advanced beyond the stage of the paleolithic scraper.

[327]Die Neue Zeit, vol. xx, part 2, Krisentheorien, p. 116. Kautsky’s mathematical demonstration to Tugan Baranovski that consumption is bound to grow, and ‘in the precise ratio as the bulk of producer goods in terms of value’, calls for two comments: first, like Marx, Kautsky paid no attention to the progress in the productivity of labour so that consumption appears to have a relatively larger volume than it would in fact have. Secondly, the increase in consumption to which Kautsky here refers is only a consequence, a result of enlarged reproduction, it is neither its basis nor its aim; it is mainly due to the growth of the variable capital, the continual employment of additional workers. The upkeep of these workers, however, neither is nor ought to be the object of the expansion of reproduction—no more, for that matter, than the increasing personal consumption of the capitalist class. Kautsky’s argument no doubt refutes Tugan Baranovski’s pet notion: the whimsy to construe enlarged reproduction with an absolute decrease in consumption. But for all that, he does not get anywhere near the fundamental problem, the relations between production and consumption under the aspect of the reproductive process, though we are told in another passage of the same work: ‘With the capitalists growing richer, and the workers they exploit increasing in numbers, they constitute between them a market for the consumer goods produced by capitalist big industry which expands continually, yet it does not grow as rapidly as the accumulation of capital and the productivity of labour, and must therefore remain inadequate.’ An additional market is required for these consumer goods, a market outside their own province, among those occupational groups and nations whose mode of production is not yet capitalistic. This market is found and also widens increasingly, but the expansion is again too slow, since the additional market is not nearly so elastic and capable of expansion as the capitalist productive process. As soon as capitalist production has developed to the big industry stage, as in England already in the first quarter of the nineteenth century, it is capable of expanding by leaps and bounds so as soon to out-distance all expansions of the market. Every period of prosperity subsequent to a considerable extension of the market is thus from the outset doomed to an early end—the inevitable crisis. This, in brief, is the theory of crises established by Marx, and, as far as we can see, generally accepted by the “orthodox” Marxists’ (ibid., p. 80). Kautsky, however, is not interested in harmonising this conception of the realisation of the aggregate product with Marx’s diagram of enlarged reproduction, perhaps because, as our quotation also shows, he deals with the problem solely from the aspect of crises, regarding, in other words, the social product as a more or less homogeneous bulk of goods and ignoring the fact that it is differentiated in the reproductive process.

L. Bouding seems to come closer to the crucial point. In his brilliant review on Tugan Baranovski he gives the following formulation: ‘With a single exception to be considered below, the existence of a surplus product in capitalist countries does not put a spoke in the wheel of production, not because production will be distributed more efficiently among the various spheres, or because the manufacture of machinery will replace that of cotton goods. The reason is rather that, capitalist development having begun sooner in some countries than in others, and because even to-day there are still some countries that have no developed capitalism, the capitalist countries in truth have at their disposal an outside market in which they can get rid of their products which they cannot consume themselves, no matter whether these are cotton or iron goods. We would by no means deny that it is significant if iron goods replace cotton goods as the main products of the principal capitalist countries. On the contrary, this change is of paramount importance, but its implications are rather different from those ascribed to it by Tugan Baranovski. It indicates the beginning of the end of capitalism. So long as the capitalist countries exported commodities for the purpose of consumption, there was still a hope for capitalism in these countries, and the question did not arise how much and how long the non-capitalist outside world would be able to absorb capitalist commodities. The growing share of machinery at the cost of consumer goods in what is exported from the main capitalist countries shows that areas which were formerly free of capitalism, and therefore served as a dumping-ground for its surplus products, are now drawn into the whirlpool of capitalism. It shows that, since they are developing a capitalism of their own, they can by themselves produce the consumer goods they need. At present they still require machinery produced by capitalist methods since they are only in the initial stages of capitalist development. But all too soon they will need them no longer. Just as they now make their own cotton and other consumer goods, they will in future produce their own iron ware. Then they will not only cease to absorb the surplus produce of the essentially capitalist countries, but they will themselves produce surplus products which they can place only with difficulty’ (Die Neue Zeit, vol. xxv, part 1, Mathematische Formeln gegen Karl Marx, p. 604). Bouding here broaches an important aspect of the general relations pertaining to the development of international capitalism. Further, as a logical consequence, he comes to the question of imperialism but unfortunately he finally puts the wrong kind of edge on his acute analysis by considering the whole of militarist production together with the system of exporting international capital to non-capitalist countries under the heading of ‘reckless expenditure’.—We must say in parenthesis that Bouding, just like Kautsky, holds that the law of a quicker growth in the means-of-production department relative to the means-of-subsistence department is a delusion of Tugan Baranovski’s.

[328]‘Apart from natural conditions, such as fertility of the soil, etc., and from the skill of independent and isolated producers (shown rather qualitatively in the genus than quantitatively in the mass of their products), the degree of productivity of labour, in a capitalist society, is expressed in the relative extent of the means of production that one labourer, during a given time, with the same tension of labour-power, turns into products. The mass of means of production which he thus transforms, increases with the productiveness of his labour. But those means of production play a double part. The increase of some is a consequence, that of the others a condition of the increasing productivity of labour. E.g., with the division of labour in manufacture, and with the use of machinery, more raw material is worked up in the same time and, therefore, a greater mass of raw material and auxiliary substances enter into the labour-process. That is the consequence of the increasing productivity of labour. On the other hand, the mass of machinery, beasts of burden, mineral manures, drainpipes, etc., is a condition of the increasing productivity of labour. So also is it with the means of production concentrated in buildings, furnaces, means of transport, etc. But whether condition or consequence, the growing extent of the means of production, as compared with the labour-power incorporated with them, is an expression of the growing productiveness of labour. The increase of the latter appears, therefore, in the diminution of the mass of labour in proportion to the mass of means of production moved by it, or in the diminution of the subjective factor of the labour-process as compared with the objective factor’ (Capital, vol. i, pp. 635-6). And yet another passage: ‘We have seen previously, that with the development of the productivity of labour, and therefore with the development of the capitalist mode of production, which develops the socially productive power of labour more than all previous modes of production, there is a steady increase of the mass of means of production, which are permanently embodied in the productive process as instruments of labour and perform their function in it for a longer or shorter time at repeated intervals (buildings, machinery, etc.); also, that this increase is at the same time the premise and result of the development of the productivity of social labour. It is especially capitalist production, which is characterised by relative as well as absolute growth of this sort of wealth’ (Capital, vol. i, chap. xxiii, 2). ‘The material forms of existence of constant capital, the means of production, do not consist merely of such instruments of labour, but also of raw material in various stages of finished and of auxiliary substances. With the enlargement of the scale of production and the increase in the productivity of labour by co-operation, division of labour, machinery, etc., the mass of raw materials and auxiliary substances used in the daily process of reproduction, grows likewise’ (Capital, vol. ii, p. 160).

[329]Struve says in the preface to the collection of his Russian essays (published in 1901): ‘In 1894, when the author published his “Critical Comments on the Problem of Economic Development in Russia”, he inclined in philosophy towards positivism, in sociology and economics towards outspoken, though by no means orthodox, Marxism. Since then, the author no longer sees the whole truth in positivism and Marxism which is grounded in it (!), they no longer fully determine his view of the world. Malignant dogmatism which not only browbeats those who think differently, but spies upon their morals and psychology, regards such work as a mere “Epicurean instability of mind”. It cannot understand that criticism in its own right is to the living and thinking individual one of the most valuable rights. The author does not intend to renounce this right, though he might constantly be in danger of being indicted for “instability”’ (Miscellany, St. Petersburg, 1901).

[330]Bulgakov, op. cit., p. 252.

[331]Tugan Baranovski, Studies on the Theory and History ..., p. 229.

[332]Capital, vol. i, pp. 593-4.

[333]Ibid., p. 594, note 1.

[334]Op. cit., vol. ii, p. 384.

[335]Ibid., pp. 400-1.

[336]Ibid., p. 488.

[337]Capital, vol. iii, p. 568.

[338]Theorien ..., vol. ii, part 2, ‘The Accumulation of Capital and Crises’, p. 263.

[339]‘It is never the original thinkers who draw the absurd conclusions. They leave that to the Says and MacCullochs’ (Capital, vol. ii, p. 451).—And—we might add—to the Tugan Baranovskis.

[340]The figures result from the difference between the amounts of constant capital in Department I under conditions of technical progress, and under Marx’s stable conditions.

[341]Theorien Über den Mehrwert, vol. ii, part 2, p. 252.

[342]Capital, vol. iii, p. 285 ff.

[343]Theorien ..., vol. ii, part 2, p. 305.

[344]Capital, vol. iii, p. 359.

[345]‘If capital and the productivity of labour advance and the standard of capitalist production in general is on a higher level of development, then there is a correspondingly greater mass of commodities passing through the market from production to individual and industrial consumption, greater certainty that each particular capital will find the conditions for its reproduction available in the market’ (Theorien ..., vol. ii, part 2, p. 251).

[346]Theorien ..., vol. ii, part 2, p. 250: Akkumulation von Kapital und Krisen. (The Accumulation of Capital and the Crises.) Marx’s italics.

[347]The following figures plainly show the importance of the cotton industry for English exports:

In 1893, cotton exports to the amount of £64,000,000 made up 23 per cent, and iron and other metal exports not quite 17 per cent, of the total export of manufactured goods, amounting to £277,000,000 in all.

In 1898, cotton exports to the amount of £65,000,000 made up 28 per cent, and metal exports 22 per cent, of the total export of manufactured goods, amounting to £233,400,000 in all.

In comparison, the figures for the German Empire show the following result: In 1898, cotton exports to the amount of £11,595,000 made up 5·75 per cent of the total exports, amounting to £200,500,000. 5,250,000,000 yards of cotton bales were exported in 1898, 2,250,000,000 of them to India (E. JaffÉ: Die englische Baumwollindustrie und die Organisation des Exporthandels. Schmoller’s JahrbÜcher, vol. xxiv, p. 1033).

In 1908, British exports of cotton yarn alone amounted to £13,100,000 (Statist. Jahrb. fÜr das Deutsche Reich, 1910).

[348]One-fifth of German aniline dyes, and one-half of her indigo, goes to countries such as China, Japan, British India, Egypt, Asiatic Turkey, Brazil, and Mexico.

[349]Capital, vol. i, pp. 615-16.

[350]The English Blue Book on the practices of the Peruvian Amazon Company, Ltd., in Putumayo, has recently revealed that in the free republic of Peru and without the political form of colonial supremacy, international capital can, to all intents and purposes, enslave the natives, so that it may appropriate the means of production of the primitive countries by exploitation on the greatest scale. Since 1900, this company, financed by English and foreign capitalists, has thrown upon the London market approximately 4,000 tons of Putumayo rubber. During this time, 30,000 natives were killed and most of the 10,000 survivors were crippled by beatings.

[351]Capital, vol. i, p. 594. Similarly in another passage: ‘One part of the surplus value, of the surplus means of subsistence produced, must then be converted into variable capital for the purpose of purchasing new labour. This can only be done if the number of workers grows or if their working time is prolonged.... This, however, cannot be considered a ready measure for accumulation. The working population can increase if formerly unproductive workers are transformed into productive ones, or if parts of the population who previously performed no work, such as women, children and paupers, are drawn into the process of production. Here, however, we shall ignore this aspect. Lastly, the working population can increase through an absolute increase in population. If accumulation is to proceed steadily and continuously, it must be grounded in an absolute growth of the population, though this may decline in comparison with the capital employed. An expanding population appears as the basis of accumulation conceived as a steady process. An indispensable condition for this is an average wage which is adequate not only to the reproduction of the working population but permits its continual increase’ (Theorien Über den Mehrwert, vol. ii, part 2, in the chapter on ‘Transformation of Revenue Into Capital’ (Verwandlung von Revenue in Kapital), p. 243).

[352]Capital, vol. i, pp. 642 ff.

[353]A table published in the United States shortly before the War of Secession contained the following data about the value of the annual production of the Slave States and the number of slaves employed—for the greatest part on cotton plantations: