Friday, January 28, 2011


Thomas Riggins

In chapters seven and eight of part two of Anti-Dühring ("Capital and Surplus Value"), Engels continues his role as Marx's bulldog. Again, Herr Dühring has gone too far in his criticisms of Marx and must be put in his place by sounder judgment and sharper intellect. Dühring has claimed Marx says that "capital is born of money" and the birth pangs took place at the "opening of the sixteenth century." Dühring calls Marx's ideas a mixture of history and logic which have become "bastards of historical and logical fantasy."

This upsets Engels to no end who himself responds that Dühring has "a crude and inept manner of expressing himself. Marx's real statement on this subject is found in Das Kapital vol 1, part 2, chapter 4 "The General Formula For Capital" where he writes: "As a matter of history, capital, as opposed to landed property invariably takes the form at first of money; it appears as moneyed wealth, as the capital of the merchant and of the usurer. But we have no need to refer to the origin of capital in order to discover that the first form of the appearance of capital is money. We can see it daily under our very eyes. All new capital to commence with, comes on the stage, that is, on the market, whether as commodities, labour, or money, even in our days, in the shape of money that by a definite process has to be transformed into capital."

But how does this transformation take place. Capital is used to invest to make more money and more capital. So how do I turn money into capital? Engels says when I take my own commodities to market I sell them to get money to buy things I need to live on. This is simple exchange. The capitalist goes to market to buy things he does not need to live on; he buys them in order to sell them for what he paid plus a profit-- and increment in money. "Marx calls this increment

But where does it come from? Capitalism results in an increase in the values in circulation so it can't come from cheating (that would effect the distribution not the amount of values) nor
from buying under or selling above the values of the commodities because the sum of values still remains the same. Yet capitalists do accumulate riches by selling dearer than they have bought."This problem," Engels says,"must be solved, and it must be solved in a PURELY ECONOMIC way, excluding all cheating and the intervention of any force-- the problem being: how is it possible constantly to sell dearer than one has bought, even on the hypothesis that equal values are always exchanged for equal values?"

The most important contribution of Marx to economic thought was the solution to this problem; Engels calls it "epoch-making." Here is the solution as presented by Engels. The increment doesn't take place in the money itself, nor in the price of the commodity sold (at this stage we are dealing with the exchange of equivalents: price = value, later we see how they can
differ). But something does change in the bought commodity--not its exchange VALUE but its USE-VALUE. The increment takes place during the commodity's consumption; and not just any commodity, but a very specific one.

Here is what Marx says about this from Das Kapital vol 1, chapter vi "The Buying and Selling of Labour Power": "In order to be able to extract value from the consumption of a commodity, our friend, Moneybags, must be so lucky as to find, within the sphere of circulation, in the market, a commodity, whose use-value, whose actual consumption, therefore, is itself an embodiment of labour, and, consequently, a creation of value. The possessor of money does find on the market such a special commodity in capacity for labour or labour-power."

But how is the value of labour-power determined? Again Marx: "The value of labour-power is determined, as in the case of every other commodity, by the labour-time necessary for the production, and consequently also the reproduction, of this special article. So far as it has value, it represents no more than a definite quantity of the average labour of society incorporated in it. Labour-power exists only as a capacity, or power of the living individual. Its production consequently pre-supposes his existence. Given the individual, the production of labour-power consists in his reproduction of himself or his maintenance. For his maintenance he requires a given quantity of the means of subsistence. Therefore the labour-time requisite for the production of labour-power reduces itself to that necessary for the production of those means of subsistence; in other words, the value of labour-power is the value of the means of subsistence necessary for the maintenance of the labourer."

This also includes the cost of raising a family of little baby laborers to take his place in the next generation. Suppose a worker could produce in six hours the value of goodies he needs to live on and Moneybags gives the worker the full value of his labor power. The goodies cost
$60 and that is what the capitalist gives the worker, paying him $10 an hour. The worker has also made $60 worth of goodies for the capitalist. An even exchange-- no increment for the capitalist.

What to do? The capitalist will hire the worker for $5 an hour for 12 hours. This is what free labor and the labor market are all about. After 12 hours the worker gets his agreed upon wage, buys his $60 of goodies and goes home. The capitalist however has been left with $60 from the first 6 hours AND $60 from the last 6 hours of the worker's toil. He sells the first $60 worth of goodies and gets his money back-- and sells the surplus $60 of goodies and makes a profit; a profit he did not work for but that he expropriates from the surplus value created by the worker. And this, Engels says, is how the "trick has been performed. Surplus-value has been produced; money has been converted into capital." Marx has thus demonstrated how surplus-plus value is created and has revealed "the core around which the whole existing social order has crystallized."

Now, under capitalism there is a "prerequisite" without which the capitalist can not get his hands on surplus-value and that is he must go to market and hire a FREE LABOURER. That is, a worker who can sell his labour power as a commodity and it is the only commodity he can sell. This is the condition working people have found themselves in since the end of the fifteenth century and the disintegration of the feudal order. Marx says "It is clearly the result of a past historical development." Marx and Engels appeared after this transitional period had been underway for about 400 years and we are two centuries further on than they. The present great world wide capitalist depression may or maynot be the "final conflict" which will mark the disintegration of capitalism and the arrival of the socialist order but as Marxists we must always be open to that possibility and continue to hold down the fort.

What is the upshot of all of Dühring's criticism of Marx and his proposed explanation of how capitalism works? Well, we need not go over all of Dühring's arguments and bombast against Marx. Suffice it to say that Engels concludes that Dühring actually steals his ideas from Marx, puts them forth in his own words and style and attacks Marx to cover up his theft; as Engels puts it Dühring "commits a clumsy plagiarism of Marx."

Just what, then, is the difference in Dühring's conception of capital and Marx's? For Marx every class dominated mode of production sweats surplus labour out of the productive class-- be they slaves, serfs, or modern workers (wage slaves). But it is only when, under a regime based on commodity production for a market, when the means of production employ surplus labour in the form of surplus value, that we have capitalism. This is a specific historical stage in the evolution of production. Dühring says any system that uses "surplus labour in any form" produces capital. He thus blurs the distinctions between different modes of production and makes capital an eternal law of nature with regard to economic activity.

What is more, for Dühring surplus value becomes simply the earnings of capital and is equivalent to profit. Whereas Marx makes it very clear in volume one of Das Kapital that surplus value should NOT be confused with profit. Dühring appears to only credit the capitalist in his role as a manufacturer as generating profit (surplus value.) Since Dühring claims to be explaining what Marx believes, Engels points out that Dühring should have paid more attention to what Marx ACTUALLY wrote. The profit made by the MERCHANT, Marx clearly says, is also a part of surplus value and the merchant can make a profit only because the industrial or manufacturing capitalist sells his product to him BELOW its full value "and thus relinquishes to him a part of the booty."

There are other subforms of surplus value besides manufacture's and merchant's profit, e.g., interest and ground-rent. But the explanations of these subdivisions will have to await volumes two and three of capital: only the outlines are being laid down in volume one. The complete explanation awaits "a scientific analysis of competition" and we can't make that analysis until the real inner nature, the essence, of capital is revealed in volume one. Engels gives as an analogy the understanding we have of the seeming motions of the planets which is based on knowledge of their real motions "which are not directly perceptible to the senses." [Empiricists take note!] Nevertheless, Marx gives us enough information in volume one to at least grasp in broad outline the subforms of surplus value to be dealt with in the later volumes.

It is because he doesn't know how competition works and also doesn't understand what Marx has said about it in volume one of Das Kapital, that Herr Dühring can't figure out how capitalists get back all that they have put out plus the surplus product at prices way above "the natural outlays of production." Where does this profit come from? He can't answer this question so he flees from the field of economics to that of politics and claims that the capitalist imposes a surcharge on his products by means of force. But Engels says FORCE can seize wealth but cannot produce it. Not only that, but Dühring leaves unexplained the ORIGIN of force itself. Dühringian economics gets us nowhere.

But all is not lost for Herr Dühring. His research finally leads him to some correct answers, although his distinctive way of expressing himself is not as clear as we might wish. Engels provides two quotes from Dühring that are on the right track. "IN EVERY CASE THE NET PROCEEDS OBTAINED BY THE UTILIZATION OF LABOUR-POWER CONSTITUTE THE INCOME OF THE MASTER...." And:"The characteristic feature of earnings of capital is that they are AN APPROPRIATION OF THE MOST IMPORTANT PART OF THE PROCEEDS OF LABOUR-POWER."

What, Engels asks, is the INCOME OF THE MASTER but the surplus product the worker makes after the deduction for wages? What is THE MOST IMPORTANT PART OF THE PROCEEDS OF LABOUR-POWER but that part which comes after the worker has created the value of his own maintenance-- i.e., surplus value? So where did Herr Dühring finally get a clue to the correct explanation of the relation between capital and surplus value? He got it, Engels says by "in his own style, DIRECTLY COPYING from CAPITAL"[i.e., volume one of Das Kapital]. So much for Herr Dühring's alternative theory of economics.

Wednesday, January 12, 2011


Thomas Riggins

In Chapter Six ('Simple and Compound Labour') of Part Two of his classic work Anti-Dühring, Frederick Engels addresses a charge made by the German professor Eugen Dühring to the effect that in his work Das Kapital Marx has made a major blunder which amounts to a socially dangerous heresy regarding socialism. What could this heresy be?

Dühring says that Marx's theory of value is only the common theory that all values are the result of labour and measured by labour-time. But Marx sheds no light on the difference between skilled and unskilled labour. In fact Marx is wrong when he tries to explain the difference by saying one person's labour can be worth more than another's because it has more average labour-time compounded within it. See below where Engels says Marx has no such conception regarding the "worth" of labour.

Dühring says that all labour-time is of absolutely equal value but one worker can have another's labour-time hidden within his own. For example, when I use a hammer made by another to do my work. The reason Marx can't see this, and actually thinks, one person's labour may be worth more than another's is his prejudice against giving the same value to the labour-time of a porter and to that of an architect. He also refers to Marx's theory as hazy lucubrations.

Engels tells us that the wrath of Dühring has been brought forth by a passage in Das Kapital (it is found in section two of Chapter One of Vol. 1) in which Marx distinguishes between skilled and unskilled labour. It runs as follows: "But the value of a commodity represents human labour in the abstract, the expenditure of human labour in general. And just as in society, a general or a banker plays a great part, but mere man, on the other hand, a very shabby part, so here with mere human labour. It is the expenditure of simple labour power, i.e., of the labour power which, on an average, apart from any special development, exists in the organism of every ordinary individual. Simple average labour, it is true, varies in character in different countries and at different times, but in a particular society it is given. Skilled labour counts only as simple labour intensified, or rather, as multiplied simple labour, a given quantity of skilled being considered equal to a greater quantity of simple labour. Experience shows that this reduction is constantly being made. A commodity may be the product of the most skilled labour, but its value, by equating it to the product of simple unskilled labour, represents a definite quantity of the latter labour alone. The different proportions in which different sorts of labour are reduced to unskilled labour as their standard, are established by a social process that goes on behind the backs of the producers, and, consequently, appear to be fixed by custom. For simplicity’s sake we shall henceforth account every kind of labour to be unskilled, simple labour; by this we do no more than save ourselves the trouble of making the reduction."

The main thing to notice is that Marx is talking about measuring the value of commodities that their producers exchange with one another in a simple society of commodity production. There is no such thing as "absolute value" involved and Marx is only setting up his definitions and categories in this first chapter of Das Kapital. Here he only states the relation between simple and compound labour, or skilled and unskilled labour. Engels remarks that this process of reducing skilled to unskilled labour in order to quantify it as a measure of value, at this point, "can only be stated but not as yet explained." Dühring is jumping the gun.

Not only that, but, Engels maintains, labour itself can have no value because value "is nothing
else than the expression of the socially necessary human labour materialized in an object." Labour is the measure of value and speaking of the value of labour is like speaking of the weight of heaviness. Here Engels remarks on Dühring's "brazenness" in his assertion earlier that Marx thought the labour time of one person was more valuable than that of another and that labour has a value. It was Marx "who first demonstrated that labour CAN have NO value, and why it cannot" [it is the measure of value not value itself].

This notion of Marx's is very important for socialism, Engel insists, as it is crucial for the socialist goal of liberating labour power "from its status as a COMMODITY." It is also the clue to the view, unlike Dühring's that distribution and production are completely separate departments within capitalism, that distribution will be geared to the interests of production and that production itself will be governed, reciprocally, "by a mode of distribution which allows ALL members of society to develop, maintain and exercise their capacities with maximum universality."

Dühring is simply wrong if he thinks every worker creates the same amount of value in the same amount of time. One worker works faster, another slower, one has more skill, another less, that is why an average has to be arrived at which is the basis of the notion of "socially necessary labour time." This is also why the slogan "Equal wages for equal labour time" is really a bit utopian. Unions of course demand equal hourly wages for all workers in the the same job grade because of the difficultly of measuring the value that each worker actually creates. Now that some unions have agreed to a two tier wage system even they are tacitily admitting the impracticability of "Equal wages for equal labour time." Anyway women and minorities and nonunionists have often been paid less for the same labour time. This results in a tendency for union wages to decline, as we now see happening. If working people only understood the socialist model of economics they would never tolerate the treatment doled out to them by the owning class.

How will the distinction between unskilled (simple) and skilled (compound) labour be handled under socialism? Engels says that under private production the costs of training a worker to become a skilled worker is paid for by private individuals and so they reap the rewards. A trained slave sells for more money and a skilled worker gets a higher wage.

However, under socialism the cost of training is borne by society [or the state]. The worker therefore has no right to higher pay for the extra values he creates. The extra value is reaped by society and used for general social purposes (education, medical care, food subsidies, the fire department, etc). This explains why medical doctors in socialist societies are seen as underpaid. They are not. The state paid for their skill and they work for fair wages, not having astronomical debts to pay off to private lenders, etc. Another slogan bites the dust here as it is not possible to adhere to it in either capitalism or socialism and that is the worker's demand that they should get "the full proceeds of labour." Under socialism the full preceeds of labour are collectively distributed throughout society on the basics of social needs. It is only in this sense that the workers can receive the "full" proceeds of their labour.

Monday, January 3, 2011

Engels on the Theory of Value

Thomas Riggins

Engels discusses the origin of the Marxist theory of value in Part II, Chapter V of his 1878 book Anti-Dühring confuting the views of the self styled "socialist" German professor Eugen Dühring. He does this by first taking issue with Dühring's faulty views and then presenting what he takes to be the correct, Marxist, outlook.

Dühring holds, in the first place, that the primary lesson of political economy is that the rule of wealth (and those who control it)throughout all world history is to be understood, in his words, as "economic power over men and things." Engels rejects this opinion for two reasons. First, the wealth associated with the ancient tribal and village societies at the basis of civilization was in no way created my "domination over men." These were cooperative non- class societies. Second, when we do come to more advanced class riven societies the wealth they created was more the domination over things that were then used to dominate men. Through out history we see "that wealth dominates men exclusively by means of the things which it has at its disposal."

The reason Dühring has explained wealth as primarily the domination over men is that he wishes to remove the discussion of exploitation from the realm of economics to that morality in order to resuscitate a version of Proudhon's "Property is theft" slogan. Dühring has divided the production of wealth into two great divisions; one of PRODUCTION and the other of DISTRIBUTION.
The production of wealth that is domination over things is GOOD but the wealth produced by domination over men is unjust and BAD.

Dühring's ideas applied to present day capitalism amount to the following: the capitalist system's production of wealth is fine and good and can be preserved, but the capitalist system's method of distribution is evil and bad and must be abolished. Engel's says views like this, that we can keep the capitalist mode of production and at the same time create a different and just mode of distribution, are "nonsense" and are expounded by people who have never grasped "the connection between production and distribution."

Dühring, having explained the origin of wealth, now turns to the subject of VALUE, and explains to us what "value" is. The value of a thing is, he says "the price or any other equivalent name, for example wages." The idea that Price = Value = Wages is absurd according to Engels.

So, what we have to find out is what value is and how it is determined. Dühring continues with a longer bombastic discussion of value and finally arrives at the conclusion that something's value depends on the labor time it takes to make it. He says: "The extent to which we invest our own energy into them (things) is the immediate determining cause of the existence of value in general and of a particular magnitude of it."

This is pretty pitiful as, Engels points out, this was already known, in the general way Dühring puts it, long before his (Dühring's) own time. And besides that, it is wrong in the way Dühring expresses it. It is not just your own energy-- you have to make something with a USE VALUE and you have take into consideration the SOCIALLY NECESSARY labor time it takes to make something.

But Dühring's theory gets worse. Besides the labor it contains there is another factor determining "value" and that is the fact another group of men besides the workers intervene and demand payment for the access to nature and the tools necessary for labor. This is done by force, "sword in hand," and amounts to an increase in the price of commodities and their value so that this group can collect its money. Dühring says this amounts to a "tax surcharge" imposed by force [added to the orignal or 'real' value].

Engels makes short work of this theory. If this is how prices are really set and value determined then what we have is, in effect, monopoly pricing. There are only two ways this could work. First all the sellers are jacking up the prices of their products. So as sellers they are reaping the profits of their "tax surcharge." But since all the products undergo this increase, the sellers, when they are buyers, also have to pay it and the surcharge cancels out. Engels says in this case "the prices have changed nominally but in reality -- in their mutual relationship -- have remained the same" and Dühring's forced increase in value is an 'illusion'."

The second way of explaining the increase in value is the "tax surcharge" actually represents real value that the men with "swords in hand" are getting-- namely they are getting value added to their products in the form of the unpaid labor of the working people. And this is just Marx's "theory of SURPLUS-VALUE." So Dühring's explanation of the creation of value is either an illusion or it is Marx's theory, a theory which Dühring rejects.

At least Dühring thinks he rejects it. His own theory, however, is just a "slovenly and confused" version of the theory of value proposed by David Ricardo and improved by Marx. Marx says: "The value of commodities is determined by the socially necessary general human labour embodied in them and this in turn is measured by its duration. Labour is the measure of all values, but labour itself has no value."

Dühring is trying to revive a really outmoded view that the value a commodity has is determined by the PRODUCTION OUTLAYS one of which, WAGES, measures what Dühring calls the "expenditure of energy" of the workers. This accounts for the production value of a commodity. The rest of the "value" is the "surcharge" added by the capitalist.

The view that wages = value = price [putting the "surcharge" aside] has been outmoded since the days of David Ricardo, Marx's immediate predecessor. Engels points out this view coexisted in Adam Smith with the view that labour time was the determinant of value but no one following scientific principles uses it now. However, there are still some who try to explain value this way [as true then as in 2010] for it is "the shallowest sycophants of the existing capitalist order of society who preach the determination of value by wages..." and who even say the capitalist's profits are themselves his wages-- i.e., "the wages of abstinence", of risk, management, etc. This is the kind of vulgar economics upon which Dühring founds his socialism.

Let's look at the real beginning of human society. At some time in the distant past primitive groups of ancient humans scrabbled about in bands spending most of their time in search of food. This conditioned lasted for untold generations from the time of our separation from the common ancestor we shared with the chimpanzees-- about five million years ago. Sometime in the last ten to twenty thousand years in our own species some groups (Engel's says "families") began to collect or create more food and useful instruments than they needed for day to day survival. A surplus of subsistence was created beyond the costs of maintaining the population and the surplus even was able to grow to the point of a creating a "social production and reserve fund."

The creation of this fund was a revolutionary historical development and the beginning of all human progress from then until now. However in "history, up to the present, this fund has been the possession of a privileged class, on which also devolved, along with this possession, political supremacy and intellectual leadership." Today, as in the past, this fund is a social fund made up of "the total mass of raw materials, instruments of production and means of subsistence." Every war imperialist or guerrilla, revolt, revolution, peasant uprising, worker's strike and election is a struggle over the control of this fund between those who control (or wish to control) it and those who make it. Socialism will exist when this fund is controlled by those who actually create it-- the productive portion the society-- the working people-- and it has become THE COMMON PROPERTY OF SOCIETY.

Today this fund, in almost every country in the world, rests in the hands of the capitalist class. This would be impossible if value was determined by wages. In that case the workers would get back in wages the value they created and there would be no capitalist exploitation.

It is, however, the quantity of socially necessary labour expended, not wages that determines value. The workers create more value for the capitalist than he pays out in wages and this fact f explains the origin of the profit on capital. It was Marx who discovered that these profits were merely a part, along with other kinds of appropriation, of the surplus value created by the workers. It is our duty as Marxists to educate the working people about these facts. One the workers are aware of the true origin of THE WEALTH OF NATIONS they will take steps to end their own exploitation and in so doing the exploitation of humanity in general.