Capital: A Critique of Political Economy, Vol. I. The Process of Capitalist Production
By Karl Marx
One of Econlib’s aims is to put online the most significant works in the history of economic thought, and there can be no doubting the significance of Marx’s influence on both economic theory in the late 19th century and on the creation of Marxist states in the 20th century. From the time of the emergence of modern socialism in the 1840s (especially in France and Germany), free market economists have criticised socialist theory and it is thus useful to place that criticism in its intellectual context, namely beside the main work of one of its leading theorists,
Karl Marx.In 1848, when Europe was wracked by a series of revolutions in which both liberals and socialists participated and which both lost out to the forces of conservative monarchism or Bonapartism,
John Stuart Mill published his
Principles of Political Economy. The chapter on Property shows how important Mill thought it was to confront the socialist challenge to classical liberal economic theory. In hindsight it might appear that Mill was too accommodating to socialist criticism, but I would argue that in fact he offered a reasonable framework for comparing the two systems of thought, which the events of the late 20th century have finally brought to a conclusion which was not possible in his lifetime. Mill states in
Book II Chapter I “Of Property” that a fair comparison of the free market and socialism would compare both the ideal of liberalism with that of socialism, as well as the practice of liberalism versus the practice of socialism. In 1848 the ideals of both were becoming better known (and there were some aspects of the ideal of socialism which Mill found intriguing) but the practice of each was still not conclusive. Mill correctly observed that in 1848 no European society had yet created a society fully based upon private property and free exchange and any future socialist experiment on a state-wide basis was many decades in the future. After the experiments in Marxist central planning with the Bolshevik Revolution in 1917, the Chinese Communists in 1949, and numerous other Marxist states in the post-1945 period, there can be no doubt that the reservations Mill had about the practicality of fully-functioning socialism were completely borne out by historical events. What Mill could never have imagined, the slaughter of tens of millions of people in an effort to make socialism work, has ended for good any argument concerning the Marxist form of socialism.Econlib now offers online two important defences of the socialist ideal, Karl Marx’s three volume work on
Capital and the
collection of essays on Fabian socialism edited by George Bernard Shaw. These can be read in the light of the criticism they provoked among defenders of individual liberty and the free market: Eugen Richter’s anti-Marxist
Pictures of the Socialistic Future, Thomas Mackay’s
2 volume collection of essays rebutting Fabian socialism,
Ludwig von Mises post-1917 critique of
Socialism. One should not forget that
Frederic Bastiat was active during the rise of socialism in France during the 1840s and that many of his essays are aimed at rebutting the socialists of his day. The same is true for Gustave de Molinari and the other authors of the
Dictionnaire d’economie politique (1852). Several key articles on communism and socialism from the
Dictionnaire are translated and reprinted in Lalor’s
Cyclopedia.For further reading on Marx’s
Capital see David L. Prychitko’s essay
“The Nature and Significance of Marx’s
Capital: A Critique of Political Economy“.For further readings on socialism see the following entries in the
Concise Encyclopedia of Economics:
Poor Law Commissioners’ Report of 1834,
edited by Nassau W. Senior, et al.
March 1, 2004
Frederick Engels, Ernest Untermann, eds. Samuel Moore, Edward Aveling, trans.
First Pub. Date
Chicago: Charles H. Kerr and Co.
First published in German. Revised and Amplified According to the Fourth German Edition by Ernest Untermann Das Kapital, based on the 4th edition.
The text of this edition is in the public domain. Picture of Marx courtesy of The Warren J. Samuels Portrait Collection at Duke University.
- Editors Note to the First American Edition, by Ernest Untermann
- Authors Prefaces to the First and Second Editions, by Karl Marx
- Editors Prefaces, by Frederick Engels
- Part I, Chapter 1
- Part I, Chapter 2
- Part I, Chapter 3
- Part II, Chapter 4
- Part II, Chapter 5
- Part II, Chapter 6
- Part III, Chapter 7
- Part III, Chapter 8
- Part III, Chapter 9
- Part III, Chapter 10
- Part III, Chapter 11
- Part IV, Chapter 12
- Part IV, Chapter 13
- Part IV, Chapter 14
- Part IV, Chapter 15
- Part V, Chapter 16
- Part V, Chapter 17
- Part V, Chapter 18
- Part VI, Chapter 19
- Part VI, Chapter 20
- Part VI, Chapter 21
- Part VI, Chapter 22
- Part VII, Introduction
- Part VII, Chapter 23
- Part VII, Chapter 24
- Part VII, Chapter 25
- Part VIII, Chapter 26
- Part VIII, Chapter 27
- Part VIII, Chapter 28
- Part VIII, Chapter 29
- Part VIII, Chapter 30
- Part VIII, Chapter 31
- Part VIII, Chapter 32
- Part VIII, Chapter 33
- Works and Authors
IN considering the labour-process, we began (see Chapter VII.) by treating it in the abstract, apart from its historical forms, as a process between man and nature. We there stated, p. 201: “If we examine the whole labour-process, from the point of view of its result, it is plain that both the instruments and the subject of labour are means of production, and that the labour itself is productive labour.” And in Note 2, same page, we further added: “This method of determining, from the standpoint of the labour-process alone, what is productive labour, is by no means directly applicable to the case of the capitalist process of production.” We now proceed to the further development of this subject.
So far as the labour-process is purely individual, one and the same labourer unites in himself all the functions, that later on become separated. When an individual appropriates natural objects for his livelihood, no one controls him but himself. Afterwards he is controlled by others. A single man cannot operate upon nature without calling his own muscles into play under the control of his own brain. As in the natural body head and hand wait upon each other, so the labour-process unites the labour of the hand with that of the head. Later on they part company and even become deadly foes. The product
ceases to be the direct product of the individual, and becomes a social product, produced in common by a collective labourer,
i.e., by a combination of workmen, each of whom takes only a part, greater or less, in the manipulation of the subject of their labour. As the co-operative character of the labour-process becomes more and more marked, so, as a necessary consequence, does our notion of productive labour, and of its agent the productive labourer, become extended. In order to labour productively, it is no longer necessary for you to do manual work yourself; enough, if you are an organ of the collective labourer, and perform one of its subordinate functions. The first definition given above of productive labour, a definition deduced from the very nature of the production of material objects, still remains correct for the collective labourer, considered as a whole. But it no longer holds good for each member taken individually.
On the other hand, however, our notion of productive labour becomes narrowed. Capitalist production is not merely the production of commodities, it is essentially the production of surplus-value. The labourer produces, not for himself, but for capital. It no longer suffices, therefore, that he should simply produce. He must produce surplus-value. That labourer alone is productive, who produces surplus-value for the capitalist, and thus works for the self-expansion of capital. If we may take an example from outside the sphere of production of material objects, a schoolmaster is a productive labourer, when, in addition to belabouring the heads of his scholars, he works like a horse to enrich the school proprietor. That the latter has laid out his capital in a teaching factory, instead of in a sausage factory, does not alter the relation. Hence the notion of a productive labourer implies not merely a relation between work and useful effect, between labourer and product of labour, but also a specific, social relation of production, a relation that has sprung up historically and stamps the labourer as the direct means of creating surplus-value. To be a productive labourer is, therefore, not a piece of luck, but a misfortune. In Book IV. which treats of the history of the theory, it will be more clearly seen, that the production of surplus-value has
at all times been made, by classical political economists, the distinguishing characteristic of the productive labourer. Hence their definition of a productive labourer changes with their comprehension of the nature of surplus-value. Thus the Physiocrats insist that only agricultural labour is productive, since that alone, they say, yields a surplus-value. And they say so because, with them, surplus-value has no existence except in the form of rent.
The prolongation of the working day beyond the point at which the labourer would have produced just an equivalent for the value of his labour-power, and the appropriation of that surplus-labour by capital, this is production of absolute surplus-value. It forms the general groundwork of the capitalist system, and the starting point for the production of relative surplus-value. The latter presupposes that the working day is already divided into two parts, necessary labour, and surplus-labour. In order to prolong the surplus-labour, the necessary labour is shortened by methods whereby the equivalent for the wages is produced in less time. The production of absolute surplus-value turns exclusively upon the length of the working day; the production of relative surplus-value, revolutionises out and out the technical processes of labour, and the composition of society. It therefore presupposes a specific mode, the capitalist mode of production, a mode which, along with its methods, means, and conditions, arises and developes itself spontaneously on the foundation afforded by the formal subjection of labour to capital. In the course of this development, the formal subjection is replaced by the real subjection of labour to capital.
It will suffice merely to refer to certain intermediate forms, in which surplus-labour is not extorted by direct compulsion from the producer, nor the producer himself yet formally subjected to capital. In such forms capital has not yet acquired the direct control of the labour-process. By the side of independent producers who carry on their handicrafts and agriculture in the traditional old-fashioned way, there stands the usurer or the merchant, with his usurer’s capital or merchant’s capital, feeding on them like a parasite. The predominance, in
a society, of this form of exploitation excludes the capitalist mode of production; to which mode, however, this form may serve as a transition, as it did towards the close of the Middle Ages. Finally, as is shown by modern “domestic industry,” some intermediate forms are here and there reproduced in the background of Modern Industry, though their physiognomy is totally changed.
If, on the one hand, the mere formal subjection of labour to capital suffices for the production of absolute surplus-value, if,
e.g., it is sufficient that handicraftsmen who previously worked on their own account, or as apprentices of a master, should become wage labourers under the direct control of a capitalist; so, on the other hand, we have seen, how the methods of producing relative surplus-value, are, at the same time, methods of producing absolute surplus-value. Nay, more, the excessive prolongation of the working day turned out to be the peculiar product of Modern Industry. Generally speaking, the specifically capitalist mode of production ceases to be a mere means of producing relative surplus-value, so soon as that mode has conquered an entire branch of production; and still more so, so soon as it has conquered all the important branches. It then becomes the general, socially predominant form of production. As a special method of producing relative surplus-value, it remains effective only, first, in so far as it seizes upon industries that previously were only formally subject to capital, that is, so far as it is propagandist; secondly, in so far as the industries that have been taken over by it, continue to be revolutionized by changes in the methods of production.
From one standpoint, any distinction between absolute and relative surplus-value appears illusory. Relative surplus-value is absolute, since it compels the absolute prolongation of the working day beyond the labour-time necessary to the existence of the labourer himself. Absolute surplus-value is relative, since it makes necessary such a development of the productiveness of labour, as will allow of the necessary labour-time being confined to a portion of the working day. But if we keep in mind the behaviour of surplus-value, this appearance of identity vanishes. Once the capitalist mode of production
established and become general, the difference between absolute and relative surplus-value makes itself felt, whenever there is a question of raising the rate of surplus-value. Assuming that labour-power is paid for at its value, we are confronted by this alternative: given the productiveness of labour and its normal intensity, the rate of surplus-value can be raised only by the actual prolongation of the working day; on the other hand, given the length of the working day, that rise can be effected only by a change in the relative magnitudes of the components of the working day, viz., necessary labour and surplus-labour; a change, which, if the wages are not to fall below the value of labour-power, presupposes a change either in the productiveness or in the intensity of the labour.
If the labourer wants all his time to produce the necessary means of subsistence for himself and his race, he has no time left in which to work gratis for others. Without a certain degree of productiveness in his labour, he has no such superfluous time at his disposal; without such superfluous time, no surplus-labour, and therefore no capitalists, no slave-owners, no feudal lords, in one word, no class of large proprietors.
Thus we may say that surplus-value rests on a natural basis; but this is permissible only in the very general sense, that there is no natural obstacle absolutely preventing one man from disburdening himself of the labour requisite for his own existence, and burdening another with it, any more, for instance, than unconquerable natural obstacles prevent one man from eating the flesh of another.
*2 No mystical ideas must in any way be connected, as sometimes happens, with this historically developed productiveness of labour. It is only after men have raised themselves above the rank of animals, when therefore their labour has been to some extent socialised, that a state of things arises in which the surplus-labour of the one becomes a condition of existence for the other. At the
dawn of civilisation the productiveness acquired by labour is small, but so too are the wants which develop with and by the means of satisfying them. Further, at that early period, the portion of society that lives on the labour of others is infinitely small compared with the mass of direct producers. Along with the progress in the productiveness of labour, that small portion of society increases both absolutely and relatively.
*3 Besides, capital with its accompanying relations springs up from an economic soil that is the product of a long process of development. The productiveness of labour that serves as its foundation and starting point, is a gift, not of nature, but of a history embracing thousands of centuries.
Apart from the degree of development, greater or less, in the form of social production, the productiveness of labour is fettered by physical conditions. These are all referable to the constitution of man himself (race, &c.), and to surrounding nature. The external physical conditions fall into two great economical classes, (1) Natural wealth in means of subsistence,
i.e., a fruitful soil, waters teeming with fish, &c., and (2), natural wealth in the instruments of labour, such as waterfalls, navigable rivers, wood, metal, coal, &c. At the dawn of civilisation, it is the first class that turns the scale; at a higher stage of development, it is the second. Compare, for example, England with India, or in ancient times, Athens and Corinth with the shores of the Black Sea.
The fewer the number of natural wants imperatively calling for satisfaction, and the greater the natural fertility of the soil and the favourableness of the climate, so much less is the the producer. So much greater therefore can be the excess of labour-time necessary for the maintenance and reproduction of his labour for others over his labour for himself. Diodorus long ago remarked this in relation to the ancient Egyptians. “It is altogether incredible how little trouble and expense the bringing up of their children causes them. They cook for them the first simple food at hand; they also give them the
lower part of the papyrus stem to eat, so far as it can be roasted in the fire, and the roots and stalks of marsh plants, some raw, some boiled and roasted. Most of the children go without shoes and unclothed, for the air is so mild. Hence a child, until he is grown up, costs his parents not more, on the whole, than twenty drachmas. It is this, chiefly, which explains why the population of Egypt is so numerous, and, therefore, why so many great works can be undertaken.”
*4 Nevertheless the grand structures of ancient Egypt are less due to the extent of its population than to the large proportion of it that was freely disposable. Just as the individual labourer can do more surplus-labour in proportion as his necessary labour-time is less, so with regard to the working population. The smaller the part of it which is required for the production of the necessary means of subsistence, so much the greater is the part that can be set to do other work.
Capitalist production once assumed, then, all other circumstances remaining the same, and given the length of the working day, the quantity of surplus-labour will vary with the physical conditions of labour, especially with the fertility of the soil. But it by no means follows from this that the most fruitful soil is the most fitted for the growth of the capitalist mode of production. This mode is based on the dominion of man over nature. Where nature is too lavish, she “keeps him in hand, like a child in leading-strings.” She does not impose upon him any necessity to develop himself.
*5 It is not the tropics with their luxuriant vegetation, but the temperate zone, that is the mother country of capital. It is not the mere fertility of the soil, but the differentiation of the soil, the
variety of its natural products, the changes of the seasons, which form the physical basis for the social division of labour, and which, by changes in the natural surroundings, spur man on to the multiplication of his wants, his capabilities, his means and modes of labour. It is the necessity of bringing a natural force under the control of society, of economising, of appropriating or subduing it on a large scale by the work of man’s hand, that first plays the decisive part in the history of industry. Examples are, the irrigation works in Egypt,
*6 Lombardy, Holland, or India and Persia where irrigation by means of artificial canals, not only supplies the soil with the water indispensable to it, but also carries down to it, in the shape of sediment from the hills, mineral fertilizers. The secret of the flourishing state of industry in Spain and Sicily under the dominion of the Arabs lay in their irrigation works.
Favourable natural conditions alone, gave us only the possibility, never the reality, of surplus-labour, nor, consequently, of surplus-value and a surplus-product. The result of difference in the natural conditions of labour is this, that the same quantity of labour satisfies, in different countries, a different mass of requirements,
*8 consequently, that under circumstances
in other respects analogous, the necessary labour-time is different. These conditions affect surplus-labour only as natural limits,
i.e., by fixing the points at which labour for others can begin. In proportion as industry advances, these natural limits recede. In the midst of our West European society, where the labourer purchases the right to work for his own livelihood only by paying for it in surplus-labour, the idea easily takes root that it is an inherent quality of human labour to furnish a surplus-product.
*9 But consider, for example, an inhabitant of the eastern islands of the Asiatic Archipelago, where sago grows wild in the forests. “When the inhabitants have convinced themselves, by boring a hole in the tree, that the pith is ripe, the trunk is cut down and divided into several pieces, the pith is extracted, mixed with water and filtered: it is then quite fit for use as sago. One tree commonly yields 300 lbs., and occasionally 500 to 600 lbs. There, then, people go into the forests, and cut bread for themselves, just as with us they cut firewood.”
*10 Suppose now such an eastern bread-cutter requires 12 working hours a week for the satisfaction of all his wants. Nature’s direct gift to him is plenty of leisure time. Before he can apply this leisure time productively for himself, a whole series of historical events is required; before he spends it in surplus-labour for strangers, compulsion is necessary. If capitalist production were introduced, the honest fellow would perhaps have to work six days a week, in order to appropriate to himself the product of one working day. The bounty of Nature does not explain why he would then have to work 6 days a week, or why he must furnish 5 days of surplus-labour. It explains only why his necessary labour-time would be limited to one day a week. But in no case would his surplus-product arise from some occult quality inherent in human labour.
Ricardo never concerns himself about the origin of surplus-value. He treats it as a thing inherent in the capitalist mode of production, which mode, in his eyes, is the natural form of social production. Whenever he discusses the productiveness of labour, he seeks in it, not the cause of surplus-value, but the cause that determines the magnitude of that value. On the other hand, his school has openly proclaimed the productiveness of labour to be the originating cause of profit (read: Surplus-value). This at all events is a progress as against the mercantilists who, on their side, derived the excess of the price over the cost of production of the product, from the act of exchange, from the product being sold above its value. Nevertheless, Ricardo’s school simply shirked the problem, they did not solve it. In fact these bourgeois economists instinctively saw, and rightly so, that it is very dangerous to stir too deeply the burning question of the origin of surplus-value. But what are we to think of John Stuart Mill, who, half a century after Ricardo, solemnly claims superiority over the mercantilists, by clumsily repeating the wretched evasions of Ricardo’s earliest vulgarisers?
Mill says: “The cause of profit is that labour produces more than is required for its support.” So far, nothing but the old story; but Mill wishing to add something of his own, proceeds: “To vary the form of the theorem; the reason why capital yields a profit, is because food, clothing, materials and tools, last longer than the time which was required to produce them.” He here confounds the duration of labour-time with the duration of its products. According to this view, a baker whose product lasts only a day, could never extract from his workpeople the same profit, as a machine maker whose products endures for 20 years and more. Of course it is very true, that if a bird’s nest did not last longer than the time it takes in building, birds would have to do without nests.
This fundamental truth once established, Mill establishes his own superiority over the mercantilists. “We thus see,” he proceeds, “that profit arises, not from the incident of exchange, but from the productive power of labour; and the general profit of the country is always what the productive
power of labour makes it, whether any exchange takes place or not. If there were no division of employments, there would be no buying or selling, but there would still be profit.” For Mill then, exchange, buying and selling, those general conditions of capitalist production, are but an incident, and there would always be profits even without the purchase and sale of labour-power!
“If,” he continues, “the labourers of the country collectively produce twenty per cent more than their wages, profits will be twenty per cent, whatever prices may or may not be.” This is, on the one hand, a rare bit of tautology; for if labourers produce a surplus-value of 20% for the capitalist, his profit will be to the total wages of the labourers as 20: 100. On the other hand, it is absolutely false to say that “profits will be 20%.” They will always be less, because they are calculated upon the
sum total of the capital advanced. If, for example, the capitalist have advanced £500, of which £400 is laid out in means of production and £100 in wages, and if the rate of surplus-value be 20%, the rate of profit will be 20:500,
i.e., 4% and not 20%.
Then follows a splendid example of Mill’s method of handling the different historical forms of social production: “I assume, throughout, the state of things which, where the labourers and capitalists are separate classes, prevails, with few exceptions, universally; namely, that the capitalist advances the whole expenses, including the entire remuneration of the labourer.” Strange optical illusion to see everywhere a state of things which as yet exist only exceptionally on our earth. But let us finish—Mill is willing to concede, “that he should do so is not a matter of inherent necessity.” On the contrary: “the labourer might wait, until the production is complete, for all that part of his wages which exceeds mere necessaries; and even for the whole, if he has funds in hand sufficient for his temporary support. But in the latter case, the labourer is to that extent really a capitalist in the concern, by supplying a portion of the funds necessary for carrying it on.” Mill might have gone further and have added, that the labourer who advances to himself not only the
necessaries of life but also the means of production, is in reality nothing but his own wage-labourer. He might also have said that the American peasant proprietor is but a serf who does enforced labour for himself instead of for his lord.
After thus proving clearly, that even if capitalist production had no existence, still it would always exist, Mill is consistent enough to show, on the contrary, that it has no existence, even when it does exist. “And even in the former case” (when the workman is a wage labourer to whom the capitalist advances all the necessaries of life, he the labourer), “may be looked upon in the same light,”
i.e., as a capitalist, “since, contributing his labour at less than the market price, (!) he may be regarded as lending the difference (?) to his employer and receiving it back with interest, &c.”
*11 In reality, the labourer advances his labour gratuitously to the capitalist during, say one week, in order to receive the market price at the end of the week, &c., and it is this which, according to Mill, transforms him into a capitalist. On the level plain, simple mounds look like hills; and the imbecile flatness of the present bourgeoisie is to be measured by the altitude of its great intellects.
Part V, Chapter XVII.