In this penultimate chapter of Anti-Dühring Engels takes on Dühring's notions of how the social product will be distributed under his "socialitarian" system: Anti-Dühring, Part Three, Chapter IV. The first thing to recall from the previous discussion on "production" is that Dühring finds nothing wrong with the mode of production under capitalism and the system of communes under which he organizes society will keep this mode of operation. The real evil to be overcome is in the mode of distribution. Little did Engels foresee that future "socialists" from the Marxist tradition would be playing around with such concepts for years to come (which he called "social alchemizing") under the rubric of "market socialism."
Dühring treats distribution independently of production. Once the social product has been produced, and this is accomplished by the necessary operative laws of capitalist production, the product can be distributed by an act of will so that "universal justice" is done. This can be done because in the commune everyone must labor and consume based on all forms of labor being considered as of equal value. This system will obtain both within the commune and between the communes. Furthermore, exchange value will be linked to the value of the precious metals. This system will be an improvement over the "foggy notions" of thinkers such as Marx.
Let's see just how this "universal justice" actually is brought about. Following Engels, lets take a model commune of 100 workers working an eight hour day and making $100 worth of commodities each or a total of $10,000 worth of goodies. Say they work 250 days a year for a yearly product of $2,500,000. According to Dühring's system "universal justice" requires that each worker get paid the exact value of his labor which would be 250 times $100 or $25,000 a year. The commune pays out the entire value that it creates so, as Engels says, at the end of a year, or a hundred years, "the commune is no richer than at the beginning." There is no accumulation possible in this system. Individuals can accumulate wealth for a worker can always deprive himself and not spend all of his money in a given time period, but society cannot accumulate wealth for any economic expansion or to carry out any kind of social programs.
This is not the only problem with Dühring's commune. The fact that workers are all paid the same means a single worker will actually have more income for savings than a worker with a large family to take care of. Rich and poor will gradually reappear and eventually all the problems of a capitalist society. This tendency cannot be stopped by rules and regulations as Dühring's "universal justice" demands that the workers can dispose of their wages as they wish. And as money is the "social incarnation" of human labor and operates by the laws of capitalist economics in the commune as well as the surrounding world, all of Dühring's regulations to control it "are just as powerless against it as they are against the multiplication table or the chemical composition of water."
Dühring's system breaks down because he, not Marx and other socialists, is under the control of "foggy notions." Dühring just doesn't understand the basic operating conditions of the capitalist system. He wasn't the only one in Engel's day who claimed to be able to explain economics without really understanding what was going on-- the phenomenon is just as rampant today in the 21st century as it was in the 19th. Therefore at this point in his polemic against Dühring, Engels takes a timeout to give his readers a brief summary of Economics 101.
The capitalist economy is based on commodity production and the only value recognized by capitalism is the value of commodities, according to Engels. To say that any given commodity has a value is to say four things about it. 1. That it has a use value-- it serves some socially useful function. 2. That it has been privately produced [this is a simple model of capitalism, not a mixed economy or state capitalism]. 3. It is a product of individual labor but "unconsciously and involuntarily" it also is a social product containing human labor in general which is measured through exchange. 4. The value of the social labor contained in it is measured by some other commodity. Engels gives the example a clock having the same value as a certain quantity of cloth-- say "fifty shillings."
This only means that it took the same amount of socially necessary labor time to make the clock as to make the cloth. Since we don't live in a barter society a special commodity has developed which is used to measure the relative values of all the other commodities to each other-- this is money.
The term "relative" value is important. We cannot determine the "absolute value" of every commodity-- i.e., calculate the exact value of the labor power used to create it. This is because of the complexity of the capitalist system and the variations of the cost of labor and labor time from factory to factory and location to location. All these different factors average out over time and commodities begin to reflect their relative values, the relative rate of socially necessary labor time needed to create them, by having their worth expressed in terms of money. Prices are reflections of relative value not absolute value and can fluctuate wildly around the actual value of commodities-- but over time they come to reflect the actual values that underlie them but in a relative manner.
Engels gives an analogy from the chemistry of his day. He says that the absolute atomic weights of the elements were unknown so scientists used hydrogen as 1 and expressed the relative atomic weights of the other elements as multiples of hydrogen. This is analogous to elevating "gold [or whatever is used as money] to the level of the absolute commodity, the general equivalent of all other commodities" and using it to measure the relative value of human (social) labor contained in them.
The term "social labor" is important to understand. It is not raw individual labor that determines the value of a commodity. It is rather the amount of labor that in a given society is necessary to produce different commodities that gives them their values-- the socially necessary labor time. At least this is "value" as expressed in a capitalist society. In a communist society "value" will not be so expressed. A communist society will have a planned economy and workers will know the value of the labor power they will devote to the production of the products needed by society. "Money" will not be necessary to measure this value. Engels notes that "all that would be left, in a communist society, of the politico-economic concept of value" is the knowledge by the workers/planners "of the useful effects and expenditure of labour on making decisions concerning production."
The notion of "value" is the hallmark of a commodity based economy and, Engels says, it "contains the germ, not only of money, but also of all the more developed forms of the production and exchange of commodities." The fact that this exchange takes place by means of money, and considering the complexity of production (i.e., that in some fields more or less of the socially necessary labor may be involved) "admits of the possibility that the exchange may never take place altogether, or at least may not realize the correct value." This is especially true of the commodity labor-power which, as with all commodities, has its value determined by the socially necessary labor time it takes to produce it and can also be forced into service for longer periods of time than is socially necessary for its reproduction.
Once money has been invented within a primarily commodity producing society we will see its "first and most essential effect" which is the commodification of all aspects of society in which soon all social relations begin to be converted into money relations based on individual private interests. Engels mentions the dissolution of the common tillage system among Indian peasants and the same amongst the Russian peasants and their village communes. Inspired by Marx we might say "Privatize, Privatize, that is the Gospel and the Church!"
Now back to Dühring and his ilk. We cannot meaningfully talk about the "value of labor" and how to see that the worker gets his "full value" as Dühring does in discussing his system of communes. When you measure the value of commodities by the labor they contain you cannot then talk about the value of labor in the same way. Engels says it is the same with weight. We can measure the heaviness of commodities by their weight but we cannot talk about the heaviness of weight. What Dühring and others do is try to measure the "value" of labor by the products it makes (it should actually be measured by time) and then they think the function of socialism is to see to it that "the full proceeds of labour" are given to the workman. But this means the whole value of what the working class creates is returned to the workers in terms of each individual getting back all the value he has created.
This will of course leave nothing for the capitalists. What it overlooks is that "the most progressive function of society" is accumulation. This is why Marxists, by the way, tout the General Consumption Fund (GCF). The individual workers do not get back 100% of the value they have created. The "state" or whatever social arrangement that replaces it, takes a portion of the created value and puts into the GCF which then disperses it to society as a whole (rent and food subsidies, medical care, education, maintenance and replacement of machinery, etc.) The working class does get back the value it creates but collectively as well as individually. The Dühringean system would stagnate and fall apart-- it is economic nonsense.
Finally, Engels points out that the law of value is "the fundamental law" of commodity production and so of capitalism "the highest form" of commodity production. The law of value dictates that commodities created by equal social labor are equal to each other-- i.e., mutually exchangeable. In our day, as in Engels', the only way this law can operate under capitalism is "as a blindly operating law of nature inherent in things and relations and independent of the will or actions of the producers."
It is just this law that Dühring is appealing to when he dreams of creating communes where equal labor is exchanged for equal labor based on his "universal principle of justice." He thinks it possible to keep capitalist economic relations but to abolish the abuses that such relations lead to. In this he completely resembles Proudhon who also wanted to "abolish the real consequences of the law of value by means of fantastic ones."
Engels ends his chapter by comparing Dühring's search for a new society based on his notions of just distributions to Don Quixote's search for Mambrino's helmet which turns up only the old barber's basin.