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   Chapter 32 MILITARISM AS A PROVINCE OF ACCUMULATION

The Accumulation of Capital By Rosa Luxemburg Characters: 165160

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Militarism fulfils a quite definite function in the history of capital, accompanying as it does every historical phase of accumulation. It plays a decisive part in the first stages of European capitalism, in the period of the so-called 'primitive accumulation', as a means of conquering the New World and the spice-producing countries of India. Later, it is employed to subject the modern colonies, to destroy the social organisations of primitive societies so that their means of production may be appropriated, forcibly to introduce commodity trade in countries where the social structure had been unfavourable to it, and to turn the natives into a proletariat by compelling them to work for wages in the colonies. It is responsible for the creation and expansion of spheres of interest for European capital in non-European regions, for extorting railway concessions in backward countries, and for enforcing the claims of European capital as international lender. Finally, militarism is a weapon in the competitive struggle between capitalist countries for areas of non-capitalist civilisation.

In addition, militarism has yet another important function. From the purely economic point of view, it is a pre-eminent means for the realisation of surplus value; it is in itself a province of accumulation. In examining the question who should count as a buyer for the mass of products containing the capitalised surplus value, we have again and again refused to consider the state and its organs as consumers. Since their income is derivative, they were all taken to belong to the special category of those who live on the surplus value (or partly on the wage of labour), together with the liberal professions and the various parasites of present-day society ('king, professor, prostitute, mercenary'). But this interpretation will only do on two assumptions: first, if we take it, in accordance with Marx's diagram, that the state has no other sources of taxation than capitalist surplus value and wages,[420] and secondly, if we regard the state and its organs as consumers pure and simple. If the issue turns on the personal consumption of the state organs (as also of the 'mercenary') the point is that consumption is partly transferred from the working class to the hangers-on of the capitalist class, in so far as the workers foot the bill.

Let us assume for a moment that the indirect taxes extorted from the workers, which mean a curtailment of their consumption, are used entirely to pay the salaries of the state officials and to provision the regular army. There will then be no change in the reproduction of social capital as a whole. Both Departments II and I remain constant because society as a whole still demands the same kind of products and in the same quantities. Only v as the commodity of 'labour power' has changed in value in relation to the products of Department II, i.e. in relation to the means of subsistence. This v, the same amount of money representing labour power, is now exchanged for a smaller amount of means of subsistence. What happens to the products of Department II which are then left over? Instead of the workers, the state officials and the regular army now receive them. The organs of the capitalist state take over the workers' consumption on the same scale exactly. Although the conditions of reproduction have remained stable, there has been a redistribution of the total product. Part of the products of Department II, originally intended entirely for the consumption of the workers as equivalent for v, is now allocated to the hangers-on of the capitalist class for consumption. From the point of view of social reproduction, it is as if the relative surplus value had in the first place been larger by a certain amount which is added on to the consumption of the capitalist class and its hangers-on.

So far the crude exploitation, by the mechanism of indirect taxation, of the working class for the support of the capitalist state's officials amounts merely to an increase of the surplus value, of that part of it, that is to say, which is consumed. The difference is that this further splitting off of surplus value from variable capital only comes later, after the exchange between capital and labour has been accomplished. But the consumption by the organs of the capitalist state has no bearing on the realisation of capitalised surplus value, because the additional surplus value for this consumption-even though it comes about at the workers' expense-is created afterwards. On the other hand, if the workers did not pay for the greater part of the state officials' upkeep, the capitalists themselves would have to bear the entire cost of it. A corresponding portion of their surplus value would have to be assigned directly to keeping the organs of their class-rule, either at the expense of production which would have to be curtailed accordingly, or, which is more probable, it would come from the surplus value intended for their consumption. The capitalists would have to capitalise on a smaller scale because of having to contribute more towards the immediate preservation of their own class. In so far as they shift onto the working class (and also the representatives of simple commodity production, such as peasants and artisans) the principal charge of their hangers-on, the capitalists have a larger portion of surplus value available for capitalisation. But as yet no opportunities for such capitalisation have come into being, no new market, that is to say, for the surplus value that has become available, in which it could produce and realise new commodities. But when the monies concentrated in the exchequer by taxation are used for the production of armaments, the picture is changed.

With indirect taxation and high protective tariffs, the bill of militarism is footed mainly by the working class and the peasants. The two kinds of taxation must be considered separately. From an economic point of view, it amounts to the following, as far as the working class is concerned: provided that wages are not raised to make up for the higher price of foodstuffs-which is at present the fate of the greatest part of the working class, including even the minority that is organised in trade unions, owing to the pressure of cartels and employers' organisations[421] -indirect taxation means that part of the purchasing power of the working class is transferred to the state. Now as before the variable capital, as a fixed amount of money, will put in motion an appropriate quantity of living labour, that is to say it serves to employ the appropriate quantity of constant capital in production and to produce the corresponding amount of surplus value. As soon as capital has completed this cycle, it is divided between the working class and the state: the workers surrender the state part of the money they received as wages. Capital has wholly appropriated the former variable capital in its material form, as labour power, but the working class retains only part of the variable capital in the form of money, the state claiming the rest. And this invariably happens after capital has run its cycle between capitalist and worker; it takes place, as it were, behind the back of capital, at no point impinging direct on the vital stages of the circulation of capital and the production of surplus value, so that it is no immediate concern of the latter. But all the same it does affect the conditions for the reproduction of capital as a whole. The transfer of some of the purchasing power from the working class to the state entails a proportionate decrease in the consumption of means of subsistence by the working class. For capital as a whole, it means producing a smaller quantity of consumer goods for the working class, provided that both variable capital (in the form of money and as labour power) and the mass of appropriated surplus value remain constant, so that the workers get a smaller share of the aggregate product. In the process of reproduction of the entire capital, then, means of subsistence will be produced in amounts smaller than the value of the variable capital, because of the shift in the ratio between the value of the variable capital and the quantity of means of subsistence in which it is realised, with the money wages of labour remaining constant, according to our premise, or at any rate not rising sufficiently to offset the increase in the price of foodstuffs. This increase represents the level of indirect taxation.

How will the material relations of reproduction be adjusted? When fewer means of subsistence are needed for the renewal of labour power, a corresponding amount of constant capital and living labour becomes available which can now be used for producing other commodities in response to a new effective demand arising within society. It arises from the side of the state which has appropriated, by way of tax legislation, the part wanting of the workers' purchasing power. This time, however, the state does not demand means of subsistence (after all that has already been said under the heading of 'third persons', we shall here ignore the demand for means of subsistence for state officials which is also satisfied out of taxes) but it requires a special kind of product, namely the militarist weapons of war on land and at sea.

Again we take Marx's second diagram of accumulation as the basis for investigating the ensuing changes in social reproduction:

I. 5,000c + 1,000v + 1,000s = 7,000 means of production

II. 1,430c + 285v + 285s = 2,000 means of subsistence

Now let us suppose that, owing to indirect taxation and the consequent increase in the price of means of subsistence, the working class as a whole reduces consumption by, say, a 100 value units of the real wages. As before, the workers receive 1,000v + 285v = 1,285v in money, but for this money they only get means of subsistence to the value of 1185. The 100 units which represent the tax increase in the price of foodstuffs go to the state which receives in addition military taxes from the peasants, etc., to the value of 150 units, bringing the total up to 250. This total constitutes a new demand-the demand for armaments. At present, however, we are only interested in the 100 units taken from the workers' wages. This demand for armaments to the value of 100 must be satisfied by the creation of an appropriate branch of production which requires a constant capital of 71·5 and a variable capital of 14·25, assuming the average organic composition outlined in Marx's diagram.

71·5c + 14·25v + 14·25s = 100 weapons of war

This new branch of production further requires that 71·5 means of production be produced and about 13 means of subsistence, because, of course, the real wages of the workers are also less by about one-thirteenth.

You could counter by saying that the profit accruing to capital from this new expansion of demand is merely on paper, because the cut in the actual consumption of the working class will inevitably result in a corresponding curtailment of the means of subsistence produced. It will take the following form for Department II:

71·5c + 14·25v + 14·25s = 100

In addition, Department I will also have to contract accordingly, so that, owing to the decreasing consumption of the working class, the equations for both departments will be:

I. 4,949c + 989·75v + 989·75s = 6,928·5

II. 1,358·5c + 270·75v + 270·75s = 1,900

If, by the mediation of the state, the same 100 units now call forth armament production of an equal volume with a corresponding fillip to the production of producer goods, this is at first sight only an extraneous change in the material forms of social production: instead of a quantity of means of subsistence a quantity of armaments is now being produced. Capital has won with the left hand only what it has lost with the right. Or we might say that the large number of capitalists producing means of subsistence have lost the effective demand in favour of a small group of big armament manufacturers.

But this picture is only valid for individual capital. Here it makes no difference indeed whether production engages in one sphere of activity or another. As far as the individual capitalist is concerned, there are no departments of total production such as the diagram distinguishes. There are only commodities and buyers, and it is completely immaterial to him whether he produces instruments of life or instruments of death, corned beef or armour plating.

Opponents of militarism frequently appeal to this point of view to show that military supplies as an economic investment for capital merely put profit taken from one capitalist into the pocket of another.[422] On the other hand, capital and its advocates try to overpersuade the working class to this point of view by talking them into the belief that indirect taxes and the demand of the state would only bring about a change in the material form of reproduction; instead of other commodities cruisers and guns would be produced which would give the workers as good a living, if not a better one.

One glance at the diagram shows how little truth there is in this argument as far as the workers are concerned. To make comparison easier, we will suppose the armament factories to employ just as many workers as were employed before in the production of means of subsistence for the working class. 1,285 units will then be paid out as wages, but now they will only buy 1,185's worth of means of subsistence.

All this looks different from the perspective of capital as a whole. For this the 100 at the disposal of the state, which represent the demand for armaments, constitute a new market. Originally this money was variable capital and as such it has done its job, it has been exchanged for living labour which produced the surplus value. But then the circulation of the variable capital was stopped short, this money was split off, and it now appears as a new purchasing power in the possession of the state. It has been created by sleight of hand, as it were, but still it has the same effects as a newly opened market. Of course for the time being capital is debarred from selling 100 units of consumer goods for the working class, and the individual capitalist considers the worker just as good a consumer and buyer of commodities as anyone else, another capitalist, the state, the peasant, foreign countries, etc. But let us not forget that for capital as a whole the upkeep of the working class is only a necessary evil, only a means towards the real end of production: the creation and realisation of surplus value. If it were possible to extort surplus value without giving labour an equal measure of means of subsistence, it would be all the better for business. To begin with indirect taxation has the same effects as if-the price of foodstuffs remaining constant-the capitalists had succeeded in depressing wages by a hundred units without detracting from the work performed, seeing that a lower output of consumer goods is equally the inevitable result of continuous wage cuts. If wages are cut heavily, capital does not worry about having to produce fewer means of subsistence for the workers, in fact it delights in this practice at every opportunity; similarly, capital as a whole does not mind if the effective demand of the working class for means of subsistence is curtailed because of indirect taxation which is not compensated by a rise in wages. This may seem strange because in the latter case the balance of the variable capital goes to the exchequer, while with a direct wage cut it remains in the capitalists' pockets and-commodity prices remaining equal-increases the relative surplus value. But a continuous and universal reduction of money wages can only be carried through on rare occasions, especially if trade union organisation is highly developed. There are strong social and political barriers to this fond aspiration of capital. Depression of the real wage by means of indirect taxation, on the other hand, can be carried through promptly, smoothly and universally, and it usually takes time for protests to be heard; and besides, the opposition is confined to the political field and has no immediate economic repercussions. The subsequent restriction in the production of means of subsistence does not represent a loss of markets for capital as a whole but rather a saving in the costs of producing surplus value. Surplus value is never realised by producing means of subsistence for the workers-however necessary this may be, as the reproduction of living labour, for the production of surplus value.

But to come back to our example:

I. 5,000c + 1,000v + 1,000s = 7,000 means of production

II. 1,430c + 285v + 285v = 2,000 means of subsistence

At first it looks as if Department II were also creating and realising surplus value in the process of producing means of subsistence for the workers, and Department I by producing the requisite means of production. But if we take the social product as a whole, the illusion disappears. The equation is in that case:

6,430c + 1,285v + 1,285s = 9,000

Now, if the means of subsistence for the workers are cut by 100 units, the corresponding contraction of both departments will give us the following equations:

I. 4,949c + 989·75v + 989·75s = 6,928·5

II. 1,358·5c + 270·75v + 270·75s = 1,900

and for the social product as a whole:

6,307·5c + 1,260·5v + 1,260·5s = 8,828·5

This looks like a general decrease in both the total volume of production and in the production of surplus value-but only if we contemplate just the abstract quantities of value in the composition of the total product; it does not hold good for the material composition thereof. Looking closer, we find that nothing but the upkeep of labour is in effect decreased. Fewer means of subsistence and production are now being made, no doubt, but then, they had had no other function save to maintain workers. The social product is smaller and less capital is now employed-but then, the object of capitalist production is not simply to employ as much capital as possible, but to produce as much surplus value as possible. Capital has only decreased because a smaller amount is sufficient for maintaining the workers. If the total cost of maintaining the workers employed in the society came to 1,285 units in the first instance, the present decrease of the social product by 171·5-the difference of (9,000-8,828·5)-comes off this maintenance charge, and there is a consequent change in the composition of the social product:

6,430c + 1,113·5v + 1,285s = 8,828·5

Constant capital and surplus value remain unchanged, and only the variable capital, paid labour, has diminished. Or-in case there are doubts about constant capital being unaffected-we may further allow for the event that, as would happen in actual practice, concomitant with the decrease in means of subsistence for the workers there will be a corresponding cut in the constant capital. The equation for the social product as a whole would then be:

6,307·5c + 1,236v + 1,285s = 8,828·5

In spite of the smaller social product, there is no change in the surplus value in either case, and it is only the cost of maintaining the workers that has fallen.

Put it this way: the value of the aggregate social product may be defined as consisting of three parts, the total constant capital of the society, its total variable capital, and its total surplus value, of which the first set of products contains no additional labour, and the second and third no means of production. As regards their material form, all these products come into being in the given period of production-though in point of value the constant capital had been produced in a previous period and is merely being transferred to new products. On this basis, we can also divide all the workers employed into three mutually exclusive categories: those who produce the aggregate constant capital of the society, those who provide the upkeep for all the workers, and finally those who create the entire surplus value for the capitalist class.

If, then, the workers' consumption is curtailed, only workers in the second category will lose their jobs. Ex hypothesi, these workers had never created surplus value for capital, and in consequence their dismissal is therefore no loss from the capitalist's point of view but a gain, since it decreases the cost of producing surplus value.

The demand of the state which arises at the same time has the lure of a new and attractive sphere for realising the surplus value. Some of the money circulating as variable capital breaks free of this cycle and in the state treasury it represents a new demand. For the technique of taxation, of course, the order of events is rather different, since the amount of the indirect taxes is actually advanced to the state by capital and is merely being refunded to the capitalists by the sale of their commodities, as part of their price. But economically speaking, it makes no difference. The crucial point is that the quantity of money with the function of variable capital should first mediate the exchange between capital and labour power. Later, when there is an exchange between workers and capitalists as buyers and sellers of commodities respectively, this money will change hands and accrue to the state as taxes. This money, which capital has set circulating, first fulfils its primary function in the exchange with labour power, but subsequently, by mediation of the state, it begins an entirely new career. As a new purchasing power, belonging with neither labour nor capital, it becomes interested in new products, in a special branch of production which does not cater for either the capitalists or the working class, and thus it offers capital new opportunities for creating and realising surplus value. When we were formerly taking it for granted that the indirect taxes extorted from the workers are used for paying the officials and for provisioning the army, we found the 'saving' in the consumption of the working class to mean that the workers rather than the capitalists were made to pay for the personal consumption of the hangers-on of the capitalist class and the tools of their class-rule. This charge devolved from the surplus value to the variable capital, and a corresponding amount of the surplus value became available for purposes of capitalisation. Now we see how the taxes extorted from the workers afford capital a new opportunity for accumulation when they are used for armament manufacture.

On the basis of indirect taxation, militarism in practice works both ways. By lowering the normal standard of living for the working class, it ensures both that capital should be able to maintain a regular army, the organ of capitalist rule, and that it may tap an impressive field for further accumulation.[423]

We have still to examine the second source of the state's purchasing power referred to in our example, the 150 units out of the total 250 invested in armaments. They differ essentially from the hundred units considered above in that they are not supplied by the workers but by the petty bourgeoisie, i.e. the artisans and peasants. (In this connection, we can ignore the comparatively small tax-contribution of the capitalist class itself.)

The money accruing to the state as taxes from the peasant masses-as our generic term for all non-proletarian consumers-was not originally advanced by capital and has not split off from capital in circulation. In the hand of the peasant it is the equivalent of goods that have been realised, the exchange value of simple commodity production. The state now gets part of the purchasing power of the non-capitalist consumers, purchasing power, that is to say, which is already free to realise the surplus value for capitalist accumulation. Now the question arises, whether economic changes will result for capital, and if so, of what nature, from diverting the purchasing power of such strata to the state for militarist purposes. It almost looks as if we had come up against yet another shift in the material form of reproduction. Capital will now produce an equivalent of war materials for the state instead of producing large quantities of means of production and subsistence for peasant consumers. But in fact the changes go deeper. First and foremost, the state can use the mechanism of taxation to mobilise much larger amounts of purchasing power from the non-capitalist consumers than they would ordinarily spend on their own consumption.

Indeed the modern system of taxation itself is largely responsible for forcing commodity economy on the peasants. Under pressure of taxes, the peasant must turn more and more of his produce into commodities, and at the same time he must buy more and more. Taxation presses the produce of peasant economy into circulation and compels the peasants to become buyers of capitalist products. Finally, on a basis of commodity production in the peasant style, the system of taxation lures more purchasing power from peasant economy than would otherwise become active.

What would normally have been hoarded by the peasants and the lower middle classes until it has grown big enough to invest in savings banks and other banks is now set free to constitute an effective demand and an opportunity for investment. Further the multitude of individual and insignificant demands for a whole range of commodities, which will become effective at different times and which might often be met just as well by simple commodity production, is now replaced by a comprehensive and homogeneous demand of the state. And the satisfaction of this demand presupposes a big industry of the highest order. It requires the most favourable conditions for the production of surplus value and for accumulation. In the form of government contracts for army supplies the scattered purchasing power of the consumers is concentrated in large quantities and, free of the vagaries and subjective fluctuations of personal consumption, it achieves an almost automatic regularity and rhythmic growth. Capital itself ultimately controls this automatic and rhythmic movement of militarist production through the legislature and a press whose function is to mould so-called 'public opinion'. That is why this particular province of capitalist accumulation at first seems capable of infinite expansion. All other attempts to expand markets and set up operational bases for capital largely depend on historical, social and political factors beyond the control of capital, whereas production for militarism represents a province whose regular and progressive expansion seems primarily determined by capital itself.

In this way capital turns historical necessity into a virtue: the ever fiercer competition in the capitalist world itself provides a field for accumulation of the first magnitude. Capital increasingly employs militarism for implementing a foreign and colonial policy to get hold of the means of production and labour power of non-capitalist countries and societies. This same militarism works in a like manner in the capitalist countries to divert purchasing power away from the non-capitalist strata. The representatives of simple commodity production and the working class are affected alike in this way. At their expense, the accumulation of capital is raised to the highest power, by robbing the one of their productive forces and by depressing the other's standard of living. Needless to say, after a certain stage the conditions for the accumulation of capital both at home and abroad turn into their very opposite-they become conditions for the decline of capitalism.

The more ruthlessly capital sets about the destruction of non-capitalist strata at home and in the outside world, the more it lowers the standard of living for the workers as a whole, the greater also is the change in the day-to-day history of capital. It becomes a string of political and social disasters and convulsions, and under these conditions, punctuated by periodical economic catastrophes or crises, accumulation can go on no longer.

But even before this natural economic impasse of capital's own creating is properly reached it becomes a necessity for the international working class to revolt against the rule of capital.

Capitalism is the first mode of economy with the weapon of propaganda, a mode which tends to engulf the entire globe and to stamp out all other economies, tolerating no rival at its side. Yet at the same time it is also the first mode of economy which is unable to exist by itself, which needs other economic systems as a medium and soil. Although it strives to become universal, and, indeed, on account of this its tendency, it must break down-because it is immanently incapable of becoming a universal form of production. In its living history it is a contradiction in itself, and its movement of accumulation provides a solution to the conflict and aggravates it at the same time. At a certain stage of development there will be no other way out than the application of socialist principles. The aim of socialism is not accumulation but the satisfaction of toiling humanity's wants by developing the productive forces of the entire globe. And so we find that socialism is by its very nature an harmonious and universal system of economy.

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FOOTNOTES:

[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 'zahlungsf?hige 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 ?uvres 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'accro?t-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 Zust?nde.

[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 Bl?tter 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 Handw?rterbuch 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 S?kularbetrachtung), 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 a

rises 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 Europ?ischen 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 ?konomischen 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:

Year Cotton:

Dollars Slaves

1800 5,200,000 893,041

1810 15,000,000 1,191,364

1820 26,300,000 1,543,688

1830 34,100,000 2,009,053

1840 74,600,000 2,487,255

1850 101,800,000 3,197,509

1851 137,300,000 3,200,000

(Simons, 'Class Struggles in American History'. Supplement to Neue Zeit (Klassenk?mpfe in der Geschichte Amerikas. Erg?nzungsheft der 'Neuen Zeit'), Nr. 7, p. 39.)

[354]Bryce, a former English Minister, describes a model pattern of such hybrid forms in the South African diamond mines: 'The most striking sight at Kimberley, and one unique in the world, is furnished by the two so-called "compounds" in which the natives who work in the mines are housed and confined. They are huge inclosures, unroofed, but covered with a wire netting to prevent anything from being thrown out of them over the walls, and with a subterranean entrance to the adjoining mine. The mine is worked on the system of three eight-hour shifts, so that the workman is never more than eight hours together underground. Round the interior of the wall are built sheds or huts in which the natives live and sleep when not working. A hospital is also provided within the inclosure, as well as a school where the work-people can spend their leisure in learning to read and write. No spirits are sold.... Every entrance is strictly guarded, and no visitors, white or native, are permitted, all supplies being obtained from the store within, kept by the company. The De Beers mine compound contained at the time of my visit 2,600 natives, belonging to a great variety of tribes, so that here one could see specimens of the different native types from Natal and Pondoland, in the south, to the shores of Lake Tanganyika in the far north. They come from every quarter, attracted by the high wages, usually eighteen to thirty shillings a week, and remain for three months or more, and occasionally even for longer periods.... In the vast oblong compound one sees Zulus from Natal, Fingos, Pondos, Tembus, Basutos, Bechuanas, Gungunhana's subjects from the Portuguese territories, some few Matabili and Makalaka; and plenty of Zambesi boys from the tribes on both sides of that great river, a living ethnological collection such as can be examined nowhere else in South Africa. Even Bushmen, or at least natives with some Bushman blood in them, are not wanting. They live peaceably together, and amuse themselves in their several ways during their leisure hours. Besides games of chance, we saw a game resembling "fox and geese" played with pebbles on a board; and music was being discoursed on two rude native instruments, the so-called "Kaffir piano" made of pieces of iron of unequal length fastened side by side in a frame, and a still ruder contrivance of hard bits of wood, also of unequal size, which when struck by a stick emit different notes, the first beginning of a tune. A very few were reading or writing letters, the rest busy with their cooking or talking to one another. Some tribes are incessant talkers, and in this strange mixing-pot of black men one may hear a dozen languages spoken as one passes from group to group' (James Bryce, Impressions of South Africa, London, 1897, pp. 242 ff.).

After several months of work, the negro as a rule leaves the mine with the wages he has saved up. He returns to his tribe, buying a wife with his money, and lives again his traditional life. Cf. also in the same book the most lively description of the methods used in South Africa to solve the 'labour-problem'. Here we are told that the negroes are compelled to work in the mines and plantations of Kimberley, Witwatersrand, Natal, Matabeleland, by stripping them of all land and cattle, i.e. depriving them of their means of existence, by making them into proletarians and also demoralising them with alcohol. (Later, when they are already within the 'enclosure' of capital, spirits, to which they have just been accustomed, are strictly prohibited-the object of exploitation must be kept fit for use.) Finally, they are simply pressed into the wage system of capital by force, by imprisonment, and flogging.

[355]The relations between Germany and England provide a typical example.

[356]Mill, in his History of British India, substantiates the thesis that under primitive conditions the land belongs always and everywhere to the sovereign, on evidence collected at random and quite indiscriminately from the most varied sources (Mungo Park, Herodotus, Volney, Acosta, Garcilasso de la Vega, Abbé Grosier, Barrow, Diodorus, Strabo and others). Applying this thesis to India, he goes on to say: 'From these facts only one conclusion can be drawn, that the property of the soil resided in the sovereign; for if it did not reside in him, it will be impossible to show to whom it belonged' (James Mill, History of British India (4th edition, 1840), vol. i, p. 311). Mill's editor, H. H. Wilson who, as Professor of Sanskrit at Oxford University, was thoroughly versed in the legal relations of Ancient India, gives an interesting commentary to this classical deduction. Already in his preface he characterises the author as a partisan who has juggled with the whole history of British India in order to justify the theories of Mr. Bentham and who, with this end, has used the most dubious means for his portrait of the Hindus which in no way resembles the original and almost outrages humanity. He appends the following footnote to our quotation: 'The greater part of the text and of the notes here is wholly irrelevant. The illustrations drawn from the Mahometan practice, supposing them to be correct, have nothing to do with the laws and rights of the Hindus. They are not, however, even accurate and Mr. Mill's guides have misled him.' Wilson then contests outright the theory of the sovereign's right of ownership in land, especially with reference to India. (Ibid., p. 305, footnote.) Henry Maine, too, is of the opinion that the British attempted to derive their claim to Indian land from the Mahometans in the first place, and he recognises this claim to be completely unjustified. 'The assumption which the English first made was one which they inherited from their Mahometan predecessors. It was that all the soil belonged in absolute property to the sovereign,-and that all private property in land existed by his sufferance. The Mahometan theory and the corresponding Mahometan practice had put out of sight the ancient view of the sovereign's rights which, though it assigned to him a far larger share of the produce of the land than any Western ruler has ever claimed, yet in nowise denied the existence of private property in land' (Village Communities in the East and West (5th edition, vol. 2, 1890), p. 104). Maxim Kovalevski, on the other hand, has proved thoroughly that this alleged 'Mahometan theory and practice' is an exclusively British legend. (Cf. his excellent study, written in Russian, On the Causes, the Development and the Consequences of the Disintegration of Communal Ownership of Land (Moscow, 1879), part i.) Incidentally, British experts and their French colleagues at the time of writing maintain an analogous legend about China, for example, asserting that all the land there had been the Emperor's property. (Cf. the refutation of this legend by Dr. O. Franke, Die Rechtsverh?ltnisse am Grundeigentum in China, 1903.)

[357]'The partitions of inheritances and execution for debt levied on land are destroying the communities-this is the formula heard nowadays everywhere in India' (Henry Maine, op. cit., p. 113).

[358]This view of British colonial policy, expounded e.g. by Lord Roberts of Kandahar (for many years a representative of British power in India) is typical. He can give no other explanation for the Sepoy Mutiny than mere 'misunderstandings' of the paternal intentions of the British rulers. '... the alleged unfairness of what was known in India as the land settlement, under which system the right and title of each landholder to his property was examined, and the amount of revenue to be paid by him to the paramount Power, as owner of the soil, was regulated ... as peace and order were established, the system of land revenue, which had been enforced in an extremely oppressive and corrupt manner under successive Native Rulers and dynasties, had to be investigated and revised. With this object in view, surveys were made, and inquiries instituted into the rights of ownership and occupancy, the result being that in many cases it was found that families of position and influence had either appropriated the property of their humbler neighbours, or evaded an assessment proportionate to the value of their estates. Although these inquiries were carried out with the best intentions, they were extremely distasteful to the higher classes, while they failed to conciliate the masses. The ruling families deeply resented our endeavours to introduce an equitable determination of rights and assessment of land revenue.... On the other hand, although the agricultural population greatly benefited by our rule, they could not realise the benevolent intentions of a Government which tried to elevate their position and improve their prospects' (Forty One Years in India, London, 1901, p. 233).

[359]In his Maxims on Government (translated from the Persian into English in 1783), Timur says: 'And I commanded that they should build places of worship, and monasteries in every city; and that they should erect structures for the reception of travellers on the high roads, and that they should make bridges across the rivers.

'And I commanded that the ruined bridges should be repaired; and that bridges should be constructed over the rivulets, and over the rivers; and that on the roads, at the distance of one stage from each other, Kauruwansarai should be erected; and that guards and watchmen should be stationed on the road, and that in every Kauruwansarai people should be appointed to reside....

'And I ordained, whoever undertook the cultivation of waste lands, or built an aqueduct, or made a canal, or planted a grove, or restored to culture a deserted district, that in the first year nothing should be taken from him, and that in the second year, whatever the subject voluntarily offered should be received, and that in the third year, duties should be collected according to the regulation' (James Mill, op. cit., vol. ii, pp. 493, 498).

[360]Count Warren, De l'état moral de la population indigène. Quoted by Kovalevski, op. cit., p. 164.

[361]Historical and Descriptive Account of British India from the most remote period to the conclusion of the Afghan war by Hugh Murray, James Wilson, Greville, Professor Jameson, William Wallace and Captain Dalrymple (Edinburgh, 4th edition, 1843), vol. ii, p. 427. Quoted by Kovalevski, op. cit.

[362]Victor v. Leyden, Agrarverfassung und Grundsteuer in Britisch Ostindien. Jahrb. f. Ges., Verw. u. Volksw., vol. xxxvi, no. 4, p. 1855.

[363]'When dying, the father of the family nearly always advises his children to live in unity, according to the example of their elders. This is his last exhortation, his dearest wish' (A. Hanotaux et A. Letournaux, La Kabylie et les Co?tumes Kabyles, vol. ii, 1873, 'Droit Civil', pp. 468-73). The authors, by the way, appraised this impressive description of communism in the clan with this peculiar sentence: 'Within the industrious fold of the family association, all are united in a common purpose, all work for the general interest-but no one gives up his freedom or renounces his hereditary rights. In no other nation does the organisation approach so closely to equality, being yet so far removed from communism.'

[364]'We must lose no time in dissolving the family associations, since they are the lever of all opposition against our rule' (Deputy Didier in the National Assembly of 1851).

[365]Quoted by Kovalevski, op. cit., p. 217. Since the Great Revolution, of course, it had become the fashion in France to dub all opposition to the government an open or covert defence of feudalism.

[366]G. Anton, Neuere Agrarpolitik in Algerien und Tunesien. Jahrb. f. Gesetzgebung, Verwaltung und Volkswirtschaft (1900), pp. 1341 ff.

[367]On June 20, 1912, M. Albin Rozet, on behalf of the Commission for the Reform of the 'Indigenat' (Administrative Justice) in Algeria, stated in his speech to the French Chamber of Deputies that thousands of Algerians were migrating from the Setif district, and that 1,200 natives had emigrated from Tlemcen during the last year, their destination being Syria. One immigrant wrote from his new home: 'I have now settled in Damascus and am perfectly happy. There are many Algerians here in Syria who, like me, have emigrated. The government has given us land and facilities to cultivate it.' The Algerian government combats this exodus-by denying passports to prospective emigrants. (Cf. Journal Officiel, June 21, 1912, pp. 1594 ff.)

[368]77,379 chests were imported in 1854. Later, the imports somewhat declined, owing to increased home production. Nevertheless, China remained the chief buyer. India produced just under 6,400,000 tons of opium in 1873/4, of which 6,100,000 tons were sold to the Chinese. To-day [1912] India still exports 4,800,000 tons, value £7,500,000,000, almost exclusively to China and the Malay Archipelago.

[369]Quoted by J. Scheibert, Der Krieg in China (1903), vol. 2, p. 179.

[370]Scheibert, op. cit., p. 207.

[371]An Imperial Edict issued on the third day of the eighth moon in the tenth year of Hsien-Feng (6/9/1860) said amongst other things: 'We have never forbidden England and France to trade with China, and for long years there has been peace between them and us. But three years ago the English, for no good cause, invaded our city of Canton, and carried off our officials into captivity. We refrained at that time from taking any retaliatory measures, because we were compelled to recognise that the obstinacy of the Viceroy Yeh had been in some measure a cause of the hostilities. Two years ago, the barbarian Commander Elgin came north and we then commanded the Viceroy of Chihli, T'an Ting-hsiang, to look into matters preparatory to negotiations. But the barbarian took advantage of our unreadiness, attacking the Taku forts and pressing on to Tientsin. Being anxious to spare our people the horrors of war, we again refrained from retaliation and ordered Kuei Liang to discuss terms of peace. Notwithstanding the outrageous nature of the barbarians' demands we subsequently ordered Kuei Liang to proceed to Shanghai in connection with the proposed Treaty of Commerce and even permitted its ratification as earnest of our good faith.

'In spite of all this, the barbarian leader Bruce again displayed intractability of the most unreasonable kind, and once more appeared off Taku with a squadron of warships in the eighth Moon. Seng Ko Lin Ch'in thereupon attacked him fiercely and compelled him to make a rapid retreat. From all these facts it is clear that China has committed no breach of faith and that the barbarians have been in the wrong. During the present year the barbarian leaders Elgin and Gros have again appeared off our coasts, but China, unwilling to resort to extreme measures, agreed to their landing and permitted them to come to Peking for the ratification of the Treaty.

'Who could have believed that all this time the barbarians have been darkly plotting, and that they had brought with them an army of soldiers and artillery with which they attacked the Taku forts from the rear, and, having driven out our forces, advanced upon Tientsin!' (I. O. Bland and E. T. Blackhouse, China under the Empress Dowager (London, 1910), pp. 24-5. Cf. also in this work the entire chapter, 'The Flight to Yehol'.)

[372]These European exploits to make China receptive to commodity exchange, provide the setting for a charming episode of China's internal history: Straight from looting the Manchu Emperor's Summer Palace, the 'Gordon of China' went on a campaign against the rebels of Taiping. In 1863 he even took over command of the Imperial fighting forces. In fact, the suppression of the revolt was the work of the British army. But while a considerable number of Europeans, among them a French admiral, gave their lives to preserve China for the Manchu dynasty, the representatives of European commerce were eagerly grasping this opportunity to make capital out of these fights, supplying arms both to their own champions and to the rebels who went to war against them. 'Moreover, the worthy merchant was tempted, by the opportunity for making some money, to supply both armies with arms and munitions, and since the rebels had greater difficulties in obtaining supplies than the Emperor's men and were therefore compelled and prepared to pay higher prices, they were given priority and could thus resist not only the troops of their own government, but also those of England and France' (M. v. Brandt, 33 Jahre in Ostasien, 1911, vol. iii, China, p. 11).

[373]Dr. O. Franke, Die Rechtsverh?ltnisse am Grundeigentum in China (Leipzig, 1903), p. 82.

[374]Bland and Blackhouse, op. cit., p. 338.

[375]Ibid., p. 337.

[376]Until recently, in China the domestic industries were widely practised even by the bourgeoisie and in such large and ancient towns as Ningpo with its 300,000 inhabitants. 'Only a generation ago, the family's shoes, hats, shirts, etc., were made by the women themselves. At that time, it was practically unheard-of for a young woman to buy from a merchant what she could have made with the labour of her own hands' (Dr. Nyok-Ching Tsur, 'Forms of Industry in the Town of Ningpo' (Die gewerblichen Betriebsformen der Stadt Ningpo), Tuebingen, 1909, p. 51).

[377]Admittedly, this relation is reversed in the last stages of the history of peasant economy when capitalist production has made its full impact. Once the small peasants are ruined, the entire work of farming frequently devolves on the women, old people and children, while the men are made to work for their living for capitalist entrepreneurs in the domestic industries or as wage-slaves in the factories. A typical instance is the small peasant in Wuerttemberg.

[378]W. A. Peffer, The Farmer's Side. His Troubles and Their Remedy (New York, 1891), Part ii, 'How We Got Here', chap. i, 'Changed Conditions of the Farmer', pp. 56-7. Cf. also A. M. Simmons, The American Farmer (2nd edition, Chicago, 1906), pp. 74 ff.

[379]Report of the U.S.A. Commissioner of Agriculture for the year 1867 (Washington, 1868). Quoted by Lafargue: Getreidebau und Getreidehandel in den Vereinigten Staaten in Die Neue Zeit (1885), p. 344. This essay on grain cultivation and the grain trade in the U.S.A. was first published in a Russian periodical in 1883.

[380]'The three Revenue Acts of June 30, 1864, practically formed one measure, and that probably the greatest measure of taxation which the world has seen.... The Internal Revenue Act was arranged, as Mr. David A. Wells has said, on the principle of the Irishman at Donnybrook Fair: "whenever you see a head, hit it, whenever you see a commodity, tax it"' (F. W. Taussig, The Tariff History of the United States (New York-London, 1888), pp. 163-4).

[381]Ibid., pp. 166-7.

[382]'The necessity of the situation, the critical state of the country, the urgent need of revenue, may have justified this haste, which, it is safe to say, is unexampled in the history of civilised countries' (Taussig, op. cit., p. 168).

[383]Peffer, op. cit., pp. 58 ff.

[384]Ibid., p. 6.

[385]'Agricultural Competition in North America' (Die landwirtschaftliche Konkurrenz Nordamerikas) Leipzig, 1887, p. 431.

[386]Lafargue, op. cit., p. 345.

[387]The Thirteenth Annual Report of the Commissioner of Labour (Washington, 1899) tables the advantages of machinery methods over hand methods so far achieved as follows:

Type of work Labour time per unit

Machine Hand

hrs. min. hrs. min.

Planting small corn - 32·7 10 55

Harvesting and threshing small corn 1 - 46 40

Planting corn - 37·5 6 15

Cutting corn 3 4·5 5 -

Shelling corn - 3·6 66 40

Planting cotton 1 3 8 48

Cultivating cotton 12 5 60 -

Mowing grass (scythe v. mower) 1 0·6 7 20

Harvesting and baling hay 11 3·4 35 30

Planting potatoes 1 2·5 15 -

Planting tomatoes 1 4 10 -

Cultivating and harvesting tomatoes 134 5·2 324 20

[388]Wheat exports from the Union to Europe:

Year Million bushels Year Million bushels

1868-9 17·9 1885-6 57·7

1874-5 71·8 1890-1 55·1

1879-80 153·2 1899-1900 101·9

(Juraschek's Uebersichten der Weltwirtschaft, vol. vii, part i, p. 32).

Simultaneously, the price per bushel wheat loco farm (in cents) declined as follows:

1870-9 105 1896 73

1880-9 83 1897 81

1895 51 1898 58

Since 1899, when it had reached the low level of 58 cents per bushel, the price is moving up again:

1900 62 1903 78

1901 62 1904 92

1902 63

(Ibid., p. 18).

According to the 'Monthly Returns on External Trade' (Monatliche Nachweise über den Ausw?rtigen Handel), the price (in marks) per 1,000 kg., was in June 1912:

Berlin 227·82 London 170·96

New York 178·08 Odessa 173·94

Mannheim 247·93 Paris 243·69

[389]Peffer, op. cit., part i, 'Where We Are', chap, ii, 'Progress of Agriculture', pp. 30-1.

[390]Ibid., p. 4.

[391]Sering, op. cit., p. 433.

[392]Peffer, op. cit., pp. 34 f.

[393]Quoted by Nikolayon, op. cit., p. 224.

[394]49,199 people immigrated to Canada in 1902. In 1912, the number of immigrants was more than 400,000-138,000 of them British, and 134,000 American. According to a report from Montreal, the influx of American farmers continued into the spring of the present year [1912].

[395]'Travelling in the West of Canada, I have visited only one farm of less than a thousand acres. According to the census of the Dominion of Canada, in 1881, when the census was taken, no more than 9,077 farmers occupied 2,384,337 acres of land between them; accordingly, the share of an individual (farmer) amounted to no less than 2,047 acres-in no state of the Union is the average anywhere near that' (Sering, op. cit., p. 376). In the early eighties, farming on a large scale was admittedly not very widely spread in Canada. But already in 1887, Sering describes the 'Bell Farm', owned by a limited company, which comprised no fewer than 56,700 acres, and was obviously modelled on the pattern of the Dalrymple farm. In the eighties, Sering, who regarded the prospects of Canadian competition with some scepticism, put the 'fertile belt' of Western Canada at three-fifths of the entire acreage of Germany, and estimated that actually only 38,400,000 acres of this were arable land, and no more than 15,000,000 acres at best were prospective wheat land (Sering, op. cit., pp. 337-8). The Manitoba Free Press in June 1912, worked out that in summer, 1912, 11,200,000 acres were sown with spring wheat in Canada, as against 19,200,000 acres under spring wheat in the United States. (Cf. Berliner Tageblatt, Handelszeitung, No. 305, June 18, 1912.)

[396]Sering, op. cit., pp. 361 ff.

[397]Ernst Schultze, 'Das Wirtschaftsleben der Vereinigten Staaten', Jahrb. f. Gesetzg., Verw. u. Volkswirtschaft 1912, no. 17, p. 1724.

[398]Article 9.

[399]'Moshesh, the great Basuto leader, to whose courage and statesmanship the Basutos owed their very existence as a people, was still alive at the time, but constant war with the Boers of the Orange Free State had brought him and his followers to the last stage of distress. Two thousand Basuto warriors had been killed, cattle had been carried off, native homes had been broken up and crops destroyed. The tribe was reduced to the position of starving refugees, and nothing could save them but the protection of the British government which they had repeatedly implored' (C. P. Lucas, A Historical Geography of the British Colonies, part ii, vol. iv (Geography of South and East Africa), Oxford, 1904, p. 39).

[400]'The Eastern section of the territory is Mashonaland where, with the permission of King Lobengula, who claimed it, the British South Africa Company first established themselves' (ibid., p. 72).

[401]The Permanent Way (in kilometres).

Year Europe America Asia Africa Australia

1840 2,925 4,754 - - -

1850 23,405 16,064 - - -

1860 51,862 53,955 1,393 455 376

1870 104,914 93,193 8,185 1,786 1,765

1880 168,983 174,666 16,287 4,646 7,847

1890 223,869 331,417 33,724 9,386 18,889

1900 283,878 402,171 60,301 20,114 24,014

1910 333,848 526,382 101,916 36,854 31,014

Accordingly, the increase was as follows:

% % % % %

1840/50 710 215 - - -

1860/70 102 73 486 350 350

1870/80 61 88 99 156 333

1880/90 32 89 107 104 142

1890/1900 27 21 79 114 27

[402]Tugan Baranovski, Studies on the Theory and History of Commercial Crises in England, p. 74.

[403]Sismondi, Nouveaux Principes ..., vol. i, book iv, chap. iv: 'Commercial Wealth Follows the Growth of Income', pp. 368-70.

[404]Engineer Eyth, a representative of Fowler's, tells us: 'Now there was a feverish exchange of telegrams between Cairo, London and Leeds.-"When can Fowler's deliver 150 steam ploughs?"-Answer: "Working to capacity, within one year."-"Not good enough. Expect unloading Alexandria by spring 150 steam ploughs."-A.: "Impossible."-The works at that time were barely big enough to turn out 3 steam ploughs per week. N.B. a machine of this type costs £2,500 so that the order involved £m. 3·75. Ismail Pasha's next wire: "Quote cost immediate factory expansion. Viceroy willing foot bill.""-You can imagine that Leeds made hay while the sun shone. And in addition, other factories in England and France as well were made to supply steam ploughs. The Alexandria warehouses, where goods destined for the vice-regal estates were unloaded, were crammed to the roof with boilers, wheels, drums, wire-rope and all sorts of chests and boxes. The second-rate hostelries of Cairo swarmed with newly qualified steam ploughmen, promoted in a hurry from anvil or share-plough, young hopefuls, fit for anything and nothing, since every steam plough must be manned by at least one expert pioneer of civilisation. Wagonloads of this assorted cargo were sent into the interior, just so that the next ship could unload. You cannot imagine in what condition they arrived at their destination, or rather anywhere but their destination. Ten boilers were lying on the banks of the Nile, and the machine to which they belonged was ten miles further. Here was a little heap of wire-rope, but you had to travel another 20 hours to find the appropriate pulleys. In one place an Englishman who was to set up the machines squatted desolate and hungry on a pile of French crates, and in another place his mate had taken to native liquor in his despair. Effendis and Katibs, invoking the help of Allah, rushed to and fro between Siut and Alexandria and compiled endless lists of items the names of which they did not even know. And yet, in the end, some of this apparatus was set in motion. In Upper Egypt, the ploughs belched steam-civilisation and progress had made another step forward' (Lebendige Kr?fte, 7 Vortr?ge aus dem Gebiete der Technik, Berlin, 1908, p. 21).

[405]Cf. Evelyn Baring, Earl of Cromer, Egypt Today (London, 1908), vol. i, p. 11.

[406]Incidentally, the money wrested from the Egyptian fellah further fell, by way of Turkey, to European capital. The Turkish loans of 1854, 1855, 1871, 1877 and 1886 were based on the contributions from Egypt which were increased several times and paid direct into the Bank of England.

[407]'It is stated by residents in the Delta', reports The Times of March 31, 1879, 'that the third quarter of the year's taxation is now collected, and the old methods of collection applied. This sounds strangely by the side of the news that people are starving by the roadside, that great tracts of country are uncultivated, because of the physical burdens, and that the farmers have sold their cattle, the women their finery, and that the usurers are filling the mortgage offices with their bonds, and the courts with their suits of foreclosure' (quoted by Th. Rothstein, Egypt's Ruin, 1910, pp. 69-70).

[408]'This produce', wrote the correspondent of The Times from Alexandria, 'consists wholly of taxes paid by the peasants in kind, and when one thinks of the poverty-stricken, overdriven, under-paid fellaheen in their miserable hovels, working late and early to fill the pockets of the creditors, the punctual payment of the coupon ceases to be wholly a subject of gratification' (quoted by Rothstein, op. cit., p. 49).

[409]Eyth, an outstanding exponent of capitalist civilisation in the primitive countries, characteristically concludes his masterly sketch on Egypt, from which we have taken the main data, with the following imperialist articles of faith: 'What we have learnt from the past also holds true for the future. Europe must and will lay firm hands upon those countries which can no longer keep up with modern conditions on their own, though this will not be possible without all kinds of struggle, when the difference between right and wrong will become blurred, when political and historical justice will often enough mean disaster for millions and their salvation depend upon what is politically wrong. All the world over, the strongest hand will make an end to confusion, and so it will even on the banks of the Nile' (op. cit., p. 247). Rothstein has made it clear enough what kind of 'order' the British created 'on the banks of the Nile'.

[410]Already in the early twenties of the last century, the Anglo-Indian government commissioned Colonel Chesney to investigate the navigability of the River Euphrates in order to establish the shortest possible connection between the Mediterranean and the Persian Gulf, resp. India. After detailed preparations and a preliminary reconnaissance in winter 1831, the expedition proper set out in 1835/7. In due course, British staff and officials investigated and surveyed a wider area in Eastern Mesopotamia. These efforts dragged on until 1866 without any useful results for the British government. But at a later date Great Britain returned to the plan of connecting the Mediterranean with India by way of the Gulf of Persia, though in a different form, i.e. the Tigris railway project. In 1879, Cameron travelled through Mesopotamia for the British government to study the lie of the land for the projected railway (Max Freiherr v. Oppenheim, Vom Mittelmeer zum Persischen Golf durch den Hauran, die Syrische Wüste und Mesopotamien, vol. ii, pp. 5 and 36).

[411]S. Schneider, Die Deutsche Bagdadbahn (1900), p. 3.

[412]Saling, B?rsenjahrbuch 1911/12, p. 2211.

[413]Saling, op. cit., pp. 360-1. Engineer Pressel of Wuerttemberg, who as assistant to Baron v. Hirsch was actively engaged in these transactions in European Turkey, neatly accounts for the total grants towards railway-building in Turkey which European capital wrested from the Turkish government:

Length in km. Paid guarantee in francs

3 lines in European Turkey 1888·8 33,099,352

Turkish permanent way in Asia completed before 1900 2313·2 53,811,538

Commissions and other costs connected with the guaranteed railway grants paid to the A.D.P.O. 9,351,209

Total 96,262,099

All this refers only to the period before 1899; not until that date were the revenue grants paid in part. The tithes of no less than 28 out of the 74 sandshaks in Asiatic Turkey had been pledged for the revenue grants, and with these grants, between 1856 and 1900, a grand total of 1,576 miles of rails had been laid down in Asiatic Turkey. Pressel, the expert, by the way gives an instance of the underhand methods employed by the railway company at Turkish expense; he states that under the 1893 agreement the Anatolian company promised to run the railway to Baghdad via Angora, but later decided that this plan of theirs would not work and, having qualified for the guarantee, left the line to its fate and got busy with another route via Konya. 'No sooner have the companies succeeded in acquiring the Smyrna-Aydin-Diner line, than they will demand the extension of this line to Konya, and the moment these branch lines are completed, the companies will move heaven and earth to force the goods traffic to use these new routes for which there are no guarantees, and which, more important still, need never share their takings, whereas the other lines must pay part of their surplus to the government, once their gross revenue exceeds a certain amount. In consequence, the government will gain nothing by the Aydin line, and the companies will make millions. The government will foot the bill for practically the entire revenue guarantee for the Kassaba-Angora line, and can never hope to profit by its contracted 25 per cent share in the surplus above £600 gross takings' (W. V. Pressel, Les Chemins de Fer en Turquie d'Asie (Zurich, 1900), p. 7).

[414]Charles Moravitz, Die Türkei im Spiegel ihrer Finanzen (1903), p. 84.

[415]'Incidentally, in this country everything is difficult and complicated. If the government wishes to create a monopoly in cigarette paper or playing cards, France and Austro-Hungary immediately are on the spot to veto the project in the interest of their trade. If the issue is oil, Russia will raise objections, and even the Powers who are least concerned will make their agreement dependent on some other agreement. Turkey's fate is that of Sancho Panza and his dinner: as soon as the minister of finance wishes to do anything, some diplomat gets up, interrupts him and throws a veto in his teeth' (Moravitz, op. cit., p. 70).

[416]And not only in England. 'Even in 1859, a pamphlet, ascribed to Diergardt of Viersen, a factory owner, was disseminated all over Germany, urging that country to make sure of the East-Asiatic markets in good time. It advocated the display of military force as the only means for getting commercial advantages from the Japanese and the Eastern Asiatic nations in general. A German fleet, built with the people's small savings, had been a youthful dream, long since brought under the hammer by Hannibal Fischer. Though Prussia had a few ships, her naval power was not impressive. But in order to enter into commercial negotiations with Eastern Asia, it was decided to equip a ship. Graf zu Eulenburg, one of the ablest and most prudent Prussian statesmen, was appointed chief of this mission which also had scientific objects. Under most difficult conditions he carried out his commission with great skill, and though the plan for simultaneous negotiations with the Hawaiian islands had to be given up, the mission was otherwise successful. Though the Berlin press of that time knew better, declaring whenever a new difficulty was reported, that it was only to be expected, and denouncing all expenditure on naval demonstrations as a waste of the taxpayers' money, the ministry of the new era remained steadfast, and the harvest of success was reaped by the ministry that followed' (W. Lotz, Die Ideen der deutschen Handelspolitik, p. 80).

[417]Following on the preliminary discussion between Michel Chevalier and Richard Cobden on behalf of the French and English governments, 'official negotiations were shortly entered upon and were conducted with the greatest secrecy. On January 1, 1860, Napoleon III announced his intentions in a memorandum addressed to M. Fould, the Minister of State. This declaration came like a bolt from the blue. After the events of the past year, the general belief was that no attempt would be made to modify the tariff system before 1861. Feelings ran high, but all the same the treaty was signed on January 23' (Auguste Devers, La politique commerciale de la France depuis 1860. Schriften des Vereins für Sozialpolitik, vol. 51, p. 136).

[418]Between 1857 and 1868, the revision along liberal lines of the Russian tariffs and the ultimate writing-off of the insane system of kantrin with regard to protective tariffs were a manifestation and corollary of the progressive reforms which the disastrous Crimean wars had made inevitable. But the reduction of customs duties reflected the concern of the landowning gentry who, both as consumers of foreign goods and as producers of grain for export, were interested in unrestricted commerce between Russia and Western Europe. The champion of agrarian interests, the 'Free Economic Association' stated: 'During the last sixty years, between 1822 and 1882, agriculture, Russia's largest producer, was brought to a precarious position owing to four great setbacks. These could in every case be directly attributed to excessive tariffs. On the other hand, the thirty-two years between 1845 and 1877 when tariffs were moderate went by without any such emergency, in spite of three foreign wars and one civil war [meaning the Polish insurrection of 1863-R. L.], every one of which proved a greater or less strain on the financial resources of the state' (Memorandum of the Imperial Free Economic Association on Revising Russian Tariffs (St. Petersburg, 1890), p. 148). As late as the nineties, then, the scientific spokesman of the Free Trade Movement, the said 'Free Economic Association', had to agitate against protective tariffs as a 'contrivance to transplant' capitalist industry to Russia. In a reactionary 'populist' spirit, it denounced capitalism as a breeding ground for the modern proletariat, 'those masses of shiftless people without home or property who have nothing to lose and have long been in ill repute' (p. 191). This is proof enough that until most recent times the Russian champions of Free Trade, or at least of moderate tariffs, did not to any appreciable extent represent the interests of industrial capital. Cf. also K. Lodyshenski: The History of the Russian Tariffs (St. Petersburg, 1886), pp. 239-58.

[419]This is also the opinion of F. Engels. In one of his letters to Nikolayon, on June 18, 1892, he writes: 'English authors, blinded by their patriotic interests, completely fail to grasp why the whole world so stubbornly rejects England's example of free trade and adopts in its place the principle of protective tariffs. Of course, they simply dare not admit even to themselves that the system of protective tariffs, by now almost universal, is merely a defensive measure against English free trade which was instrumental in perfecting England's industrial monopoly. Such a defence policy may be more or less reasonable-in some cases it is downright stupid, as for instance in Germany who under the system of free trade had become a great industrial power and now imposes protective tariffs on agricultural products and raw materials, thus increasing the cost of her industrial production. In my view this universal reversion to protective tariffs is not a mere accident but the reaction against England's intolerable industrial monopoly. The form which this reaction takes, as I said before, may be wrong, inadequate and even worse, but its historical necessity seems to me quite clear and obvious' (Letters of Karl Marx and Frederick Engels to Nikolayon (St. Petersburg, 1908), p. 71).

[420]Dr. Renner indeed makes this assumption the basis of his treatise on taxation. 'Every particle of value created in the course of one year is made up of these four parts: profit, interest, rent, and wages; and annual taxation, then, can only be levied upon these' (Das arbeitende Volk und die Steuern, Vienna, 1909). Though Renner immediately goes on to mention peasants, he cursorily dismisses them in a single sentence: 'A peasant e.g. is simultaneously entrepreneur, worker, and landowner, his agricultural proceeds yield him wage, profit, and rent, all in one.' Obviously, it is an empty abstraction to apply simultaneously all the categories of capitalist production to the peasantry, to conceive of the peasant as entrepreneur, wage labourer and landlord all in one person. If, like Renner, we want to put the peasant into a single category, his peculiarity for economics lies in the very fact that he belongs neither to the class of capitalist entrepreneurs nor to that of the wage proletariat, that he is not a representative of capitalism at all but of simple commodity production.

[421]It would go beyond the scope of the present treatise to deal with cartels and trusts as specific phenomena of the imperialist phase. They are due to the internal competitive struggle between individual capitalist groups for a monopoly of the existing spheres for accumulation and for the distribution of profits.

[422]In a reply to Vorontsov, Professor Manuilov, for example, wrote what was then greatly praised by the Russian Marxists: 'In this context, we must distinguish strictly between a group of entrepreneurs producing weapons of war and the capitalist class as a whole. For the manufacturers of guns, rifles and other war materials, the existence of militarism is no doubt profitable and indispensable. It is indeed quite possible that the abolition of the system of armed peace would spell ruin for Krupp. The point at issue, however, is not a special group of entrepreneurs but the capitalists as a class, capitalist production as a whole.' In this connection, however, it should be noted that 'if the burden of taxation falls chiefly on the working population, every increase of this burden diminishes the purchasing power of the population and hence the demand for commodities'. This fact is taken as proof that militarism, under the aspect of armament production, does indeed 'enrich one group of capitalists, but at the same time it injures all others, spelling gain on the one hand but loss on the other' (Vesnik Prava, Journal of the Law Society (St. Petersburg, 1890), no. 1, 'Militarism and Capitalism').

[423]Ultimately, the deterioration of the normal conditions under which labour power is renewed will bring about a deterioration of labour itself, it will diminish the average efficiency and productivity of labour, and thus jeopardise the conditions for the production of surplus value. But capital will not feel these results for a long time, and so they do not immediately enter into its economic calculations, except in so far as they bring about more drastic defensive measures of the wage labourers in general.

INDEX

Abstinence, 43, 102, 108, 118, 150, 235, 240, 280, 334

Accumulation, its impossibility respective unrestricted possibility 23, 188f., 198ff., 216, 237, 268, 303, 311, 325

- primitive, 161, 272, 364, 369f., 454

Africa, 352, 363f., 382, 386;

South, 411ff., 420, 451

Algeria, under French rule, 371, 377ff.;

under Turkish rule, 378

Allard, General, 381

America, 290, 352, 420, 422, 428;

United States of, 173, 293ff., 297, 307f., 357f., 362f., 379, 396, 398, 402, 404f., 409ff., 424ff., 432;

States of South, 420, 422ff.

American Civil War (War of Secession), 357f., 363, 396, 398f., 402, 424f., 430

Anton, G., 385

Arabs, 377, 380, 382ff.

Asia, 247, 290, 420ff., 443ff., 450

Australia, 420, 426f.

Baring, E., Earl of Cromer, 434

Barter, 213, 215f., 222, 229

Bastiat-Schultze, F., 238, 268

Bentham, J., 372

Bergmann, 211

Bismarck, 448

Blackhouse, E. T., 392, 394

Blanc, L., 227

Bland, L. O., 392, 394

Blanqui, 227

Boer Republics, 411, 414ff.

- War, 415

Bouding, 319f.

Brandt, M. V., 392

Bright, 447

Brissot, 265

Bruce, General, 391

Bryce, J., 363, 412

Buecher, Prof., 307f.

Bulgakov, 275, 298-310, 311, 313, 315, 317, 320, 324ff.

Cabet, 227

Cameron, 439

Canada, 408f.

Capital and income (Marx), 108;

(Rodbertus), 262ff.;

(Say), 56;

(Sismondi), 179ff., 215, 423;

(Adam Smith), 53f., 58ff., 74ff., 83

- circulating, 37, 57ff., 64, 74ff., 83, 85f., 156f., 166, 183ff., 259, 354

- constant, 13f., 18f., 22f., 38, 44, 51, 53, 64, 72f., 83, 85f., 88, 94f., 97, 100ff., 109ff., 123ff., 137, 141, 143, 147, 149, 153, 156ff., 187ff., 200, 208, 236, 256, 258, 298f., 302, 304f., 336f., 339, 344, 354ff., 359, 361, 365f., 458, 463

- - definition of, 37, 72, 76f.

- fixed, 19, 50, 53, 57ff., 74ff., 83, 85ff., 111, 140, 147, 158, 166, 184ff., 259, 341, 354

- national (per se), 54, 263

- productive, 43f., 97, 140, 148f., 157, 163, 420

- total social, 31, 49f., 53f., 59, 65, 79, 83, 86, 88, 96f., 101, 103, 107f., 110, 118, 147, 156, 169, 180, 341, 349f.

- variable, 14, 18f., 22, 38, 44, 74f., 85, 94ff., 99, 101, 105, 109ff., 114ff., 123, 125ff., 134, 137, 151ff., 156, 159, 161, 182f., 185ff., 207, 209, 234, 253, 256, 258, 302, 306, 334, 336, 344, 346, 350, 354f., 357, 359ff., 365f., 428, 457f., 460, 463f.;

definition, 37, 77;

in relation to surplus value, 252, 258, 337;

in relation to constant capital, 111, 303, 317, 321, 337, 339f.

Cavour, 449

Chartist movement, 227, 267

Chernishevski, 273

Chesney, Colonel, 439

Chevalier, M., 448

China, 41, 247, 289, 353, 373, 386ff., 419, 428;

Dowager Empress of, 392ff.

Class antagonism, 181

- rule, 78, 452, 456, 464

- society, 41

Cobden, R., 447f.

Colonial policy, 185, 247, 363f., 369ff., 419, 425, 451f., 454, 466

- - English in India, 88, 247, 371, 374f., 383

- - French in North Africa, 371, 380, 382

Commodity economy, see Economy

- Exchange, 81f., 85, 93f., 97ff., 118, 129f., 193f., 233, 270, 386, 428, 438, 443, 452, 454

- surplus, 195ff., 276-83

Communism, 263, 369, 378, 384

Compensation, theory of, 203

Competition, 21, 23, 40, 46, 48, 191, 202, 205, 207, 209, 230, 242, 259, 283, 297, 332, 342, 344, 368, 416, 419, 446, 450, 457, 466;

'peaceful -', 386, 452

Contradictions latent in capitalism, 202, 218, 227f., 239, 271, 286ff.

Corn Laws, 231

Corvée, 33, 39, 42, 84, 369, 395

Crises, 14, 35f., 41, 46, 103f., 173, 176f., 191, 194, 199, 201ff., 211, 213, 216, 218, 222, 227f., 232, 235ff., 244ff., 261, 268, 272, 274, 281f., 286, 298, 305, 312ff., 318f., 323f., 332, 342, 346f., 419, 422, 424, 426, 428, 467

Crusoe, Robinson, 179, 182, 185, 261ff.

Dalrymple, Oliver, 403f., 409

Declining wage rate, 20f., 229, 241, 244, 250f., 253, 258f.

Delamarre, Abbé, 393

Demand and supply (production), 36, 46, 133, 192f., 195, 200, 206, 212, 220ff., 230f., 242, 248, 324

- effective, 20, 34, 39, 131, 134, 155, 164f., 193f., 286, 329, 458, 461, 465f.

Devers, A., 448

Dialectical approach, 69, 205, 209, 265, 366

Diehl, Prof., 228f., 256, 266f.

Division of Labour, 79, 104, 128f., 148, 193, 233, 278, 297, 307f., 319, 321f.

Duehring, 194

East India Company, 375f., 386f., 411

Economics, bourgeois, 31, 49, 51, 68f., 106, 108, 112, 137, 170, 173f., 177, 179, 181, 189f., 209, 215, 218, 244, 268, 271, 279f., 295, 310, 325f.;

classical, 35, 57, 65, 67ff., 105, 108f., 179, 188f., 200, 203, 208, 210, 216, 227ff., 237, 238-252, 254, 256, 258, 266, 279, 325, 383, 446;

vulgar, 35f., 81, 108, 177, 211f., 320

Economy, commodity, 368ff., 386-394, 402, 417, 419f., 427f., 449, 465

- natural, 42, 255, 293, 368-385, 386, 402, 415, 417, 419, 427, 443

- peasant, handicrafts and domestic industries, 41, 289, 296, 358, 369, 374, 395-418, 435, 438, 444f., 465

- rural, 272

Egypt, 41, 201f., 353, 358, 425, 429ff., 450f.

Elgin, Lord, 391f.

Engels, Friedrich, 95, 102, 154, 166, 168, 194, 228, 241, 250, 275, 288ff., 294, 449f.

England, 173ff., 191, 218f., 227ff., 241, 245, 277, 286, 293, 297, 307f., 313, 316, 318, 352, 357, 366f., 391, 393, 410, 412, 420ff., 447ff.

English cotton industry, 297, 342, 352, 357f., 362, 422

Exploitation, 17, 21ff., 46, 73f., 108, 116, 181ff., 196, 220, 228, 241, 247, 255, 334, 343f., 358ff., 364, 374, 386, 428, 445, 451, 456

Eyth, Engineer, 431, 437

Family Associations, 374, 377, 380f.

Feudal system, 210, 293, 365, 368f., 381f.

Foreign trade, 136, 205f., 236, 246, 282, 297, 306, 309, 313, 350;

see also market

Fowler's Works, 431

France, 174, 177, 191, 214, 218, 227, 291, 296, 379, 391, 393, 420f., 431f., 445, 448ff.

Franke, O., 373, 393

Free Trade, 205, 238, 242, 447ff.

General public (grand public), 135, 295, 298

Germany, 173, 271, 296f., 308, 366f., 420ff., 427, 442, 448ff.

Gold, production of, 99ff., 141, 154, 301f.

Great Britain, see England

Gros, 392

Hangers-on of the capitalist class, cf. also Third persons, 14, 81f., 112, 134f., 222f., 295, 332f., 350, 420, 454ff., 464

Hanotaux, A., 378

Hansen, 26

Harmony, doctrine of, 173, 177, 200, 203f., 211ff., 228f., 238, 271, 305, 325f., 446f.

Harrod, 19

Hermann, 243

Herodotus, 88f., 372

Hertzen, 273

Hicks, 28

Hobson, 21, 314

Ilyin, V., 189, 275, 287, 303, 309, 317, 320

Imperialism, 28, 320, 368, 416ff., 421, 445f., 452

India, 41f., 72, 88, 247, 286, 308, 352f., 365, 371ff., 380, 387, 425, 428, 454

Indian famine, 376, 382

- mutiny, 247, 374

Industrial reserve army, 15, 108, 111, 361

Intelligentsia, 273ff.

Ismail Pasha, 33, 431ff., 438

Issayev, Prof., 275

Italy, 173, 449ff.

Japan, 247, 353

Kablukov, Prof., 275

Kaffir, 411ff.

- Wars, 411, 413

Kalecki, 23

Kant, I., 326

Kareyev, 274

Kautsky, K., 228, 267, 318ff.

Keynes, Lord, 20f., 26

Kirchmann, v., 227-37, 238, 244, 248, 250, 252f., 260f., 266, 268, 309f., 351, 366

Kovalevski, M., 373, 375f., 384

Labour, abstract and concrete, 67ff., 72, 105

- intellectual and material, 77

- paid and unpaid, 37ff., 55, 62, 65ff., 71, 73, 75, 98, 322f., 343

- past and present, 66f., 70, 75, 80, 88f.

- problem, 363f.

Labour, progressive productivity of, its capitalist and general social expression, 258, 321f., 335f., 349, 357

Lafargue, 399, 404

Laissez-faire, 173, 238, 274

Lassalle, F., 228

Lavrov, P., 274

Lenin, Vladimir Ilyich, see Ilyin

Letournaux, A., 378

Lexis, 266

Leyden, V. v., 377

List, F., 307

Livingstone, Dr., 411

Loans, international, 387, 419-45, 451f.

Lodyshenski, K., 449

Lotz, W., 448

Lucas, C. P., 414

Luxury goods, 81, 102, 163, 197ff., 208, 235ff., 260, 277

MacCulloch, J. R., 177, 189, 191-202, 203, 206f., 211, 220, 222, 229, 233, 264, 335

Maine, Sir Henry, 373f.

Malthus, 24, 181, 211, 217, 219-23, 229, 298, 305, 309, 350

Manuilov, Prof., 275, 460

Market, internal and external, 236, 246, 277f., 283ff., 292, 294f., 299, 306ff., 316

- concept revised, 366

- problem of, 229f., 235, 277, 284, 289, 312ff., 345ff.

Marx, K., 13f., 16ff., 31, 36f., 43, 49, 51, 54, 60, 62ff., 76-92, 95, 99ff., 120-38, 139-54, 155ff., 189, 203, 205, 212, 215, 217f., 220, 223, 228, 233, 241, 243f., 255f., 258, 264, 268, 274f., 281f., 287, 295, 298-310, 311f., 316ff., 320, 324f., 329ff., 348, 350f., 357, 359ff., 417;

his diagram of capitalist reproduction, 84, 97, 99ff., 104, 113, 118f., 127, 274, 298-310, 311, 417, 428, 455;

his diagram of enlarged reproduction, 120-138, 304f., 313ff., 318, 323f., 329-47, 348, 353f., 359, 361, 417, 458ff.;

his diagram of simple reproduction, 76, 92, 103, 107, 112, 114, 173, 264, 299, 351, 361, 418

Marxism, 272ff., 310, 326;

'legalist', 275, 292, 294, 303, 305f., 317, 323, 324-6460;

'orthodox', 318

Mehemet Ali, 429, 435

Mehring, F., 228, 266f.

Mikhailovski, Prof., 274

Militarism, 27, 248, 276, 282, 298, 309, 350, 371, 439, 454-67

Mill, James, 191, 212, 220ff., 372f., 375, 383

Mill, John Stuart, 279

Money, as form of pure value, 38f., 43f., 76, 140

- circulation, 20, 50, 93-106, 139ff., 148, 193, 213, 300ff., 324

- sources, 144ff., 151ff., 156, 158ff., 300ff.

Monroe, President, 402

Moravitz, C., 443, 445

Most Favoured Nations Clause, 448

Napoleon Bonaparte, 173

Napoleon III, 431, 448

Negroes, 362ff., 411ff.

Neo-Marxists, 291

Neo-Mercantilism, 296

Nikolayon, 275, 284-91, 292f., 299, 309, 351, 366, 408

Non-capitalist strata necessary for accumulation, 319f., 351ff., 357, 359, 361ff., 368, 386, 416, 427, 429, 446, 450, 452, 466

Nyok Ching Tsur, Dr., 395

Obshchina, 273, 288, 290

Opium Wars, 27, 247, 387, 391, 393, 447

Oppenheim, M. v., 439

Ort, 231f., 248, 252

Over-production, 91, 104, 149, 195, 199f., 213, 221, 235, 250, 252, 254, 279, 281f., 298, 324, 342

Owen, Robert, 174f., 191, 240

Palikao, Count, 392

Pan-Germans, 247

Peasantry, 27;

their expropriation, 288, 296, 362, 364, 369, 374f.

Peel, Sir Robert, 245

Peffer, Senator, 396, 398, 400f., 406f.

Physiocrats, 31, 49, 51, 56f., 62, 68, 71, 106, 233

Planned economy, 78f., 103f., 128ff., 195, 248, 312, 323

Plekhanov, Prof., 272, 275

Population increase, 15, 41, 78, 91, 107, 133f., 239, 360f., 371

Populism, 272ff., 283, 286ff., 303, 306, 309, 317, 325, 351

Positivism, 326

Pressel, Engineer, 441f.

Primitive social organisations, 32, 39, 41f., 72, 362, 368ff., 377, 415, 428, 454

Private enterprise, 79, 103, 248

Production, and consumption, 45f., 204, 211, 218, 244, 253, 260, 304f., 324, 326, 343, 349

- for social requirements, 37, 42, 129, 133, 139, 220, 260, 285, 304f., 316

- its two departments, 16, 18f., 23, 25, 83ff., 95ff., 99, 102, 114ff., 123ff., 127ff., 137, 233, 299, 323, 334, 336, 339ff., 353, 355, 417, 434

- capitalist, as creation of surplus value, 37ff., 42, 78, 84, 107, 343, 367, 427

- - as end in itself, 311, 316f., 320, 333, 346

- - its universal domination, 216f., 331, 333, 348, 351, 353, 361, 365, 410, 417, 467

Productive consumption, 236f., 316

Profit, of enterprise, 38, 232, 234

- motive, 34, 305, 322f.

Profit, rate, 17, 23f., 79f., 167;

(declining) 259, 320, 326, 338, 343f., 367

Progress, 28, 79, 89, 130f., 204, 216, 245, 249, 258f., 274, 296, 320, 323, 339

Property, ownership, 214, 248f., 265, 380f., 413

- communal, 77, 248, 289, 379, 381

- in land, 256, 262, 264f., 370

- - vested in Sovereign, 372f., 380f.

- private, 196, 240, 322, 378, 380, 382ff.

Proudhon, 137, 227, 241, 264f.

Punjab Alienation Act, 376

Quesnay, 31, 48ff., 57, 62, 104f., 211

Railway construction, 289, 353, 398, 402, 409, 419ff., 425ff., 439, 445

Renner, K., 455

Rent, 38, 50ff., 57ff., 64, 68, 135, 181, 254f., 257, 266

Rentier, 223, 254

Reproduction, enlarged, 13, 40ff., 80, 89ff., 102, 107-19, 151, 155, 169, 184, 197, 209, 268, 300, 303, 312, 317f., 329, 335, 339f., 351, 353, 355, 429

- simple, 13, 15, 19, 41, 48, 98, 102, 104, 107f., 112f., 115, 127f., 130, 139, 143ff., 155f., 160ff., 165, 169, 187, 190, 197, 199f., 298, 300, 302, 312, 317, 329, 334, 338, 348, 351, 354

- transition from simple to enlarged, 123, 144f., 147, 150, 162f., 318;

see also Marx

Rhodes, Cecil, 413f., 416

Ricardo, D., 53f., 57, 62, 67f., 105f., 109f., 179, 181, 189, 191, 194ff., 203-10, 211, 215ff., 229f., 232f., 237, 240f., 243ff., 248, 254, 257, 261, 266, 268, 271, 279ff., 305, 324f., 345f., 350, 366, 383, 447

'Right to Work', 227, 229f.

Roberts of Kandahar, Lord, 374

Rodbertus, 22f., 54, 227ff., 237, 238-51, 252-68, 271, 274, 281f., 351

Rothstein, Th., 436ff.

Rozet, A., 385

Rusk, Secretary, 406

Russia, 167, 173, 271f., 275ff., 283f., 287ff., 297, 308, 326, 357, 419ff., 445, 449f., 452

St. Simon, 191

Said Pasha, 433ff.

Saling, 441

Saving, 17f., 20ff., 22f., 27, 163, 236f., 239, 260f., 265f.

Say, J. B., 53ff., 62f., 177ff., 189, 191, 204, 206, 210, 211-18, 219f., 222, 229ff., 237, 248, 254, 257, 264, 266, 268, 279, 305, 324f., 335, 366

Schaeffle, Prof., 293, 295, 307, 424

Scheibert, J., 388, 390

Schmoller, Prof., 293, 295ff.

Schneider, S., 440

Schultze, E., 410

Sering, 401, 407, 409f.

Severance of labour power from the means of production, 181, 210, 402

- of agriculture and trade (industry), 369, 395f.

Simmons, A. M., 398

Simons, 363

Sismondi, 24, 35, 53, 115, 173-90, 191-202, 203-10, 211-18, 219f., 222f., 227ff., 237, 240, 245, 248ff., 256, 260, 264, 268, 271, 274, 281f., 287f., 292, 309, 312, 317, 342, 350ff., 365f., 423ff.

Skvortsov, Prof., 275

Slavery, 33, 39, 72f., 84, 161, 209f., 241, 243, 255f., 359, 363, 369, 379, 400, 412, 432

Slavophiles, 273, 276

Smith, Adam, 36, 48, 50ff., 83, 105f., 108ff., 166, 169, 180, 185, 187ff., 191, 210f., 215, 228, 230f., 233, 256f., 260ff., 264, 266, 271, 346, 351, 383

Socialism, 228f., 266, 274, 325f., 467;

English, 244;

Utopian, 217;

and Marx's analysis, 131

Sombart, Prof., 308

Spheres of interest, 445, 447, 452

State as consumer, 223, 454ff., 458, 460, 463, 466

Struve, Peter v., 275, 292-97, 298, 307, 309ff., 325f., 350

Suez Canal, 33, 430f., 433, 435ff.

Surplus value, 14, 18f., 38, 62, 78, 109ff., 128, 135, 139, 141, 185ff., 199, 207, 220, 234f., 253, 255ff., 265ff., 298, 301f., 310, 317, 332ff., 342f., 350, 353f., 357f., 365ff., 454, 456, 463, 466;

its capitalisation, 108, 112ff., 132, 136, 140, 142, 146f., 151f., 163, 165, 170, 184, 188, 196, 198, 237, 330f., 338, 340f., 345, 355, 357, 359f., 367, 417, 421, 428, 446, 451, 456, 464;

its consumption, 159ff., 169, 197, 254, 298, 303, 348, 354;

'destruction', 281f., 310, 344;

definition, 37f., 77;

realisation, 98ff., 132, 139, 142, 155ff., 165, 170, 200, 205ff., 278, 292f., 300, 303, 309f., 329, 341f., 346, 351, 355, 359, 365, 386, 417, 419, 421, 426, 428f., 442, 444, 451, 454, 461f.;

contradiction between its production and realisation, 345, 365

Sweezy, 13, 21

Tariffs, protective, 231, 297, 399, 446-53, 456

Taussig, 399f.

Taxation, 369, 373f., 379, 381, 383, 394, 396, 399, 435ff., 443, 455, 458, 464f.;

indirect, 455ff., 460f., 463f.

Tax collector, 372f., 443f.

'Third Persons', 135, 159, 292-7, 298, 305, 348, 350, 458

'Three World Empires', 292-7

Timur (Tamerlane), 375

Tooke, 156

Trade Unions, 271, 461

Tucker, Josiah, 211

Tugan Baranovski, Prof., 23, 210, 275, 303, 305f., 310, 311-23, 324ff., 330, 335f., 346, 366, 422ff.

Turkey, 353, 385, 419, 425f., 436, 439, 442, 445

Unemployment, 177, 208, 240, 282

Usury, 373, 377, 381, 383f.

Utopianism, 249, 262, 264, 268, 288, 291

Value, problem of pure, 35f.

- Marx's theory of, 66, 68, 105, 281

- Ricardo's theory of, 68, 105

- Rodbertus' theory of, 240ff., 256, 259

Value, Adam Smith's theory of, 62, 64ff., 105f.

- relationships and material points of view, 81f., 105, 112, 264, 336, 354, 417

Victoria, Queen, 393

Violence, 371, 446, 452

Vorontsov, V., 24, 274f., 276-83, 287, 291ff., 299, 303, 309f., 350, 366, 460

Wagner, Prof., 256, 266f., 293, 295, 297, 307

Warren, Count, 375

Wilson, H. H., 372f.

Wilson, James, 376

World (international) Commerce, 205, 307f., 359

World Market, 200, 202, 205, 296f., 308

Zadruga, 378

[Transcriber's notes:

List of errors:

Page 20 "stook" changed to "stock" ("requires an increase in the stock")

Page 31 "Quesney" changed to "Quesnay" ("of this problem: one by Quesney,")

Page 121 missing "(" added ("(800v + 25v + 55v)")

Pages 175 and 192 "E" replaced with "é" ("Nouveaux Principes d'économie Politique")

Page 220 Footnote reference to 224 altered from original 9, assumed to be 2

Page 227 "simulated" changed to "stimulated" ("the working class had stimulated Sismondi's opposition")

Page 255 "irelevant" changed to "irrelevant" ("irrelevant to the productive process,")

Page 275 "." changed to "," ("One of the two champions of the 'populist' movement,")

Page 275 second "." added as in "V. V." ("Vorontsov, known in Russia mainly under the nom de plume V. V.,")

Page 293 "'" added ("open whether these 'third persons'")

Page 293 """ changed to "'" ("entirely on the basis of the home market.'")

Page 300 Two instances of "formulae" changed to "formul?"

Page 340 space added to betweenthe ("determined by the relations between the two departments")

Page 354 "producduction" changed to "production" ("the sphere of capitalist production,")

page 379 "57,500,000,000 acres" changed to "57,000,000 acres" [based on the German text "23.000.000 Hektar" converted to acres and rounded]

Page 381 "assocations" changed to "associations" ("of accelerating the process of dissolving the family associations")

Page 434 "." removed after "per cent" ("an annual charge of 9 per cent")

Page 441 "Alleppo" changed to "Aleppo" ("vilayets Aydin, Baghdad, Mossul, Diarbekir, Ursa and Aleppo")

Page 474 "," changed to ";" ("443, 455, 458, 464f.;")

Footnote 180 missing "." added to "470." ("MacCulloch, loc. cit., p. 470.")

Footnote 213 "Noveaux" changed to "Nouveaux" ("Nouveaux Principes ..., vol. i, p. 117.")

Footnote 233 "socialer" changed to "sozialer" ("über die Grundrente in sozialer Beziehung.")

Footnote 239 "f," changed to "f." ("Op. cit., vol. ii, pp. 104 f.")

Footnote 260 missing "." added to "Ibid.," ("Ibid., vol. i, p. 19.")]

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