6—
The Fused and Uneven Recognition of Markets in Germany

Every serf knows that what he expends in the service of his lord is a definite quantity of his own personal labor power.
Karl Marx, Das Kapital

Germany's passage to a capitalist regime differed from Britain's not only in speed and deliberateness but in the conjuncture of institutional changes that helped define the significance of the transition for economic agents. In Britain an extensive free intercourse in manufactured products and a market discourse emerged before "labor power"—if we may use the term here as an analytic category rather than as one recognized by the agents—acquired its specification as a commodity. In Germany, the lifting of statutes that restricted the trade of finished products coincided in many industrial sectors with the shift to the formally free sale of labor power. In contrast to cultural development in Britain, in Germany market discourse included labor power itself from the start. This difference did not suffice to create the definition of labor as a commodity that prevailed in Germany, but it presents the initial fork in the road to be explored. This chapter pursues three dividing points for the German case rather than the single temporal disjuncture which illuminated cultural development in Britain.

Apart from the simultaneous creation of formal markets in merchandise and labor, two additional circumstances fixed the background for German producers to find a cultural destination: the survival of feudal definitions of labor service in the countryside, and the continued corporate organization of artisanal work by the guilds. Marx and Engels contended that these survivals deprived the German economy of a crystalline capitalist form, by comparison with the pure classical model of Britain.^[1] It was on Britain, of

course, that they fastened their keenest theoretic attention. But if economic change follows a manifest logic, cultural development is the history of the uncanny. The unique articulation of free commercial practices and corporate restraints in the German labor market during the early nineteenth century gave rise to an understanding of the labor transaction which was perhaps more penetrating than that invented by producers in the British setting. At the very least, the German economic agents' appreciation of labor paralleled the key insights Marx developed in his theoretic analysis of the capitalist labor process. The amalgam of formal market intercourse with corporate regulation in Germany did not obscure the essence of the capitalist labor process, but it contributed to a breakthrough in understanding. Marx imagined that capitalist Britain revealed the image of Germany's own future,^[2] but who could have dreamed that the less-developed country could show to Britain, the more developed, the image of Britain's true workings?

Corporate Regulation

Was the transition to a liberal commercial order truly less complete in Germany than in Britain, as Marx and Engels claimed? The story of the shift to a juridically free market society in Britain depends upon imperceptible trends; in Germany, where change in the economic constitution was consciously orchestrated from above, it pivots to a greater degree on discrete events. The westernmost regions of Germany entered the era of free commercialism between 1798 and 1810, when the French invaders abolished the guilds and issued the decrees needed to remake economic life in the occupied provinces and towns in their own image of liberty.^[3] Official change in the framework of commerce took place very dramatically in Prussia, too, where the government's decrees in 1810 and 1811 attempted to abolish the corporate regulation of trade and occupations almost overnight.^[4] Other German states moved more slowly than Prussia. But during the first half of the nineteenth century each of them in a series of grand steps removed legal barriers to trade and to the unhampered exercise of occupations.

It is easy to exaggerate the suffocation of intercourse prior to these reforms for the sake of creating more vivid contrasts in business life before versus after their promulgation. The most recent historical research has more realistically emphasized the gradual de facto weakening of guild and merchant privileges over many decades. From a cross-national perspective, however, a crucial finding remains: throughout the eighteenth century, enough of the industry and exchange of Germany transpired within corporate institutions to prevent the market from appearing as a force with laws of its own. Although exceptions abounded, guild regulations in the towns assigned specific lines of products to each type of craftsman. Such rules were effective enough that they prevented small masters from switching to new lines of handiwork in response to consumer demands.^[5] Of course the statutes controlled not just the manufacture of goods but their conveyance.^[6] Before 1787, guild artisans in Prussia were generally prevented from marketing their wares outside their home towns;^[7] and even after this date, the protective laws enacted for many localities excluded import of craft goods from neighboring towns and regions.^[8] Putting-out merchants in Prussia and Saxony were required to get special approval to sell their goods to the public, rather than to authorized guild merchants who attempted to arrogate the important distribution outlets.^[9] A blanket of regulation enveloped the pro-

curement of raw materials as well. In Prussia, Saxony, and other regions, guild masters had either a monopoly on the purchase of wool or the legal right to purchase it before other traders.^[10]

Restrictions on the sale of labor prior to the reforms appeared no less comprehensive. In Prussia, Frederick the Great fixed wages for craft and common labor.^[11] In several of the German states, authorities ensured that the use of labor did not fluctuate: they forbade both the sudden firing of home workers and severe cutbacks in piece rates.^[12] Home workers could not always vend the products of their industry as they wished, as if they were entrepreneurs. Instead, workers such as spinners, whose product represented an input for weavers, were required to sell their goods to the local weavers' guild.^[13] In turn weavers in many regions were required to sell their finished cloth to an authorized entrepreneur or to a local merchant guild, which often had a monopoly on the distribution of the product.^[14] In Württemberg the master weavers who had to sell their goods at fixed prices to a

chartered merchant company protested in 1753 about their dependence. In a petition to the ducal authorities, they complained that officialdom's regulations deprived the small master "of what he could otherwise realize from the ware, so that he stands in severe personal servitude  . . . in which he can earn nothing for his own account and for his family."^[15] By comparison with Britain, state controls in Germany established an adverse setting during the eighteenth century for idealizing small manufacturers as independent producers whose products were exchanged in accordance with the labor they contained.^[16]

The guild and mercantile constraints proved least effective in the countryside, where competition from unauthorized producers, above all in the textile branch, had by the end of the eighteenth century eroded the guild members' monopolies on manufacture in many parts of Germany.^[17] Yet

the independent producers in the countryside were not automatically freed of requirements to sell to chartered traders; moreover, in some instances they were officially forbidden to compete with urban producers.^[18] In Silesia, new legislation in 1788 required country weavers to bring their products to authorized traders for inspection and pricing.^[19] Until the introduction of freedom of trade in the countryside at the close of the eighteenth century, officials in many regions viewed the putting-out system as ancillary to the essential enterprise of agriculture.^[20] Entrepreneurs organized their networks according to the privileges granted by mercantilist officials rather than by considerations of transport and resources.^[21] Only the Napoleonic invasions and the Prussian response initiated the reforms that cleared away such thickets of official control and gave clear institutional form to the strengthening current of market development in the rural outlands.^[22]

The reception of the Wealth of Nations in Germany serves as a barometer for the country's economic climate. German was the first foreign language in which Smith's opus was published. The initial volume of its

translation appeared in Leipzig in 1776, the year of the English publication in London.^[23] At this early juncture, however, German critics overlooked its substantive innovations and emphasized instead its incidental similarities to the doctrines of French physiocrats, such as the assumption that agricultural rents rise with prosperity.^[24] Smith's ideas were not rejected—they were uncomprehended.^[25] For us, the categories Smith used may seem commonsensical and "life-like." But German translators and scholarly reviewers of Smith's work found the main arguments perplexing. "The original is extremely difficult," an early reviewer said, "and the language, by reason of the technical and juridical expressions, difficult and obscure."^[26] A translator confessed that he had had to read the book several times over to make sense of it.^[27] The German interpreters' attempts to rephrase Smith's expressions illustrates one source of difficulty.^[28] The first German translations showed some reluctance to conceive of labor as an abstract category. Where Smith referred to "the demand for labor," his interpreters rendered it as "demand for laboring

hands" or "demand for workers."^[29] Smith endowed the category itself with life, whereas German expositors resisted the detachment of the category from concrete persons. These early exegetes, unaccustomed to the reified form of labor as a commodity, thought of labor only as visible work.^[30]

The German publishers of the Wealth of Nations could not find a significant audience for their intellectual merchandise until the revolutionary market perspective entailed by commercial liberty was introduced.^[31] They had not long to wait. The Prussian edict of 1810 made the purchase of a license the only requirement for conducting any form of enterprise anywhere in the state. In 1811 authorities abolished the regulation of wages and lifted requirements that craft entrepreneurs join a guild.^[32] These expedients, and the similar ones that followed in the other German states, abruptly revised the conditions for conceiving of transfers of goods and services.^[33]

The Recognition of Labor as a Commodity

In Germany, reflection on market society included from the outset production based on the purchase of labor through the wage contract. It began not just with liberty of trade in manufactures, as in Britain, but with the full regime of capitalism, in keeping with the simultaneous creation of formal markets in wares and in labor power.^[34] German economists who interpreted the emergence of industrial liberalism in the first decades of the nineteenth century appropriated many of Smith's insights but resold them by casting the role of labor to conform with the genesis of wage labor in Germany.^[35] Long before the extensive development of the factory system in their coun-

try, German observers of the market were occupied with a distinctive apparition of labor as a commodity which eventually emerged on the factory shop floor itself.

A survey of market theories in Britain can sight the pinnacles of Smith and Ricardo, but the terrain in Germany shows few towering peaks. If German economists of the period did not cast a long shadow, they still serve as indicators of the rise of contrasting economic assumptions. One of the first notable German treatises that presented an alternative to the British appreciation of labor came from the pen of Ludwig Jakob, a professor of philosophy at the University of Halle.^[36] In a work published in 1805, Jakob adopted Smith's formulation of the labor theory of value, but already with modification. Smith, he noted perceptively, mistakenly identified the wage for labor with the quantity of labor delivered.^[37] "It is not what the worker receives for his labor that forms the measure of exchange value," he wrote in the 1825 edition, "but what it has cost him in the expenditure of power."^[38] Jakob was ready to consider the value of a good as determined by the expenditure of labor upon it, apart from the cost of the labor or from its embodiment in the product. In his view, labor did not identify the real values which inhere in the goods; it approximated the outcomes of trading between individuals due to individuals' strategizing.^[39]

Jakob's work reveals the transcription of British terms for labor and work into the German field of meanings. When the Germans first transmitted Smith's wondrous ideas into their own language, their translators had had to improvise in two ways: they resorted to the adoption of several words not ordinarily used in German, and they attached more restricted meanings to current words.^[40] The word work , however, they did not transcribe. It was not that they merged it with their word for labor (Arbeit ) or that they tried out

a simple surrogate. They wrote around it. When Smith said, "There may be more labour in an hours hard work than in two hours easy business," the German translator rendered it something like this: "There may be more labor [Arbeit ] in one hour's difficult manifestation of power [angestrengten Kraftäusserung einer Stunde ] than in two hours' easy business."^[41] Jakob adopted this mode of expression for the work activity as part of his system. In British thinking, work could appear in a system of political economy because it became abstract labor only when examined from the perspective of the later moment of exchange. In Jakob's picture, however, the work activity itself, from the beginning of the process, is seen as abstract labor because it is the expression of a general power. This point of origin, rather than the exchange process, makes heterogeneous kinds of work comparable as abstract labor. Jakob referred to labor as the activation of a latent capacity, defining it as "the activation of human power" and measuring its quantity by "the sacrifice of power."^[42]

The difference in Jakob's approach was not only a matter of vocabulary. In his discussion of the employment relation Jakob says that the worker does not merely sell his labor—as Smith, looking at the output, would have expressed it—but "hires out his diligence [Fleiss ]" to the capitalist or landowner.^[43] Jakob's refusal to identify "labor" with a material product showed up as well in the contrast he drew between the functions of factory owners and of landowners. "The whole difference [between them]," he said, "comes down to the simple fact that the landowner is master of external nature, the factory owner master of internal nature."^[44] Whereas the landowner made his profit through his control of the goods of the earth, the factory owner made his profit through his control of indispensable human labor. If Jakob had thematized the difference between these economic agents by drawing the conventional distinction between land and capital, as happened in British economics, this would have directed attention to differences in the material resources under their command. He emphasized instead the factory owner's disposal over human powers, which he saw as a "nonmaterial" good of an entirely different dimension.

Before long, others used this alternative concept of labor as a commodity to articulate a real theoretic break. Johann Lotz, a contemporary of Jakob's, rejected labor as a measure of the values of goods in the market. In 1811 he emphasized that "the products of labor are always different from the labor itself.  . . . Labor," he declared, "is something purely immaterial." The distinction between use value and exchange value, a pairing the British could imagine applying only to finished commodities, he extended to the labor potential hired by the employer. "Viewed as a productive power," Lotz concluded, "it [labor] is always a capacity, a good of high value, but only of use value, not of exchange value."^[45] He reasoned that labor could not be used to compare products because the worker's personal expenditure of effort was an immeasurable subjective experience.^[46] Lotz's inference, though crudely psychological, betrays the assumption that the value of labor had to be compared at its moment of origin in the production process or not at all. Wilhelm Roscher, in his classic history of German economic theory, completed in 1874, ranked Lotz's rejection of "real" values standing behind prices as an important contribution to the evolution of the country's "national economic grammar."^[47] For emphasis on the concrete moment of using labor power led German scholars in the first half of the nineteenth century to abandon Smith's faith that labor establishes a metric for product values.

The insight that labor was conveyed to the employer in the form of a capacity became commonplace in the writings of later German economists. Hans Mangoldt, an economist who after midcentury became particularly well known for his analysis of entrepreneurs' organization of the production process, said that "the wage is the compensation for the use of one's personal labor power that has been entrusted to another person."^[48] He referred to hiring labor as "acquiring the disposition over another person's labor power," a phrase which, in keeping with Mangoldt's approach, highlighted the entrepreneur's consumption of a potential.^[49] Friedrich Hermann,

a major expounder of German business economics, distinguished between labor power, the commodity of "the highest-use value," and labor, "the main component of most goods."^[50] The Germans' separation of labor from its product was a prerequisite for talking about the "use value" of labor at all. The British could not have theorized about the use value of labor purchased by an employer, because this would have required them to treat the power behind the activity as the actual thing that could be bought and "used" by the employer.

The distinction between labor and labor power which emerged in the Germans' lofty treatises paralleled the development of popular economic thinking in their country. Workers' descriptions of employment highlighted the renting of their labor capacity. For example, Die Verbrüderung , the newspaper of the workers' associations during the revolutions of 1848, complained that workers "chained to the power of capital have to hire out their physical or mental powers."^[51] In a petition submitted to authorities in 1850, the weavers from a town near Potsdam called employers of wage labor "renters of labor power."^[52] The language of formal remonstrance was no different from that of everyday expression, for a textile worker interviewed by the police in 1858 for having left his job described wage labor as "renting yourself out."^[53] The assumption that workers put their person in the hands of their employer formed part of the popular understanding of the vending of labor as a commodity.^[54]

The evolution of everyday concepts in economic life can be traced through the introduction of new terms into the German language. The translations of Adam Smith for popular consumption at the beginning of the century lacked the term Arbeitskraft ("labor power") to translate the employer's purchase of labor, as well as the plural, Arbeitskräfte , to refer to the work force at large.^[55] These terms did not appear in dictionaries of the time.^[56] Yet by 1854, when the Brothers Grimm released their German dictionary, they included an entry for Arbeitskraft. They did not define it, but they illustrated its usage: "One views a person with his labor power as a commodity, whose price rises and falls with the level of supply and demand."^[57] The Grimms' example emphasizes that the term is linked to the commodification of labor and did not represent a locution, inherited from the precapitalist era, that highlighted merely a person's natural potential or concrete ability to work.^[58] What is more, their explanation specified that the commodity inheres in the person of the seller: the producers themselves, not simply their wares, are inserted into the marketplace. The Grimms' compilation, written to codify the national language, scarcely represents a source that can be faulted for its inclusion of arcane vocabulary. To the contrary, scholars have criticized the work for its admission only of commonplace words.^[59]

The public's adoption of the term labor power in the first decades of the nineteenth century indicates that the Germans, in contrast to the British, felt a need to mark the workers' contribution in the employment relation by a term more precise than the existing terms for labor available

in their language.^[60] May we say that thought impressed itself on language, not language on thought? No lexical or semantic obstacles blocked a similar course of development in Britain. Indeed, the British already applied market terms to human qualities by referring to such intangibles as popular "favor" and "opinion" as commodities, since they represented assets that could bring monetary gain.^[61] By the nineteenth century the Germans had forgotten lexical resources which they might have employed to designate the contrast between materialized labor and the execution of work. In the period of Middle High German some writers had used the terms Werk and Arbeit to distinguish between the product of labor and the activity.^[62] But in modern German this distinction was no longer sharp enough to enable people to take over the simple word Arbeit to signify the disposal of a person's labor power in the market.^[63] The economic agents had to start anew.

The German invention of a fresh term rather than rearranging the connotations of an old one was in keeping, perhaps, with the more thoroughgoing break that the simultaneous transition to formal markets in finished articles and in labor power in Germany entailed. Workers themselves used the term Arbeitskraft for the commodification of labor. A workers' newspaper published in Chemnitz in the revolutionary days of 1848 said that if property relations were not governed by the market, the workers' "property, labor power" could not be assigned a value.^[64] Wurm's German dictionary, published in 1858, emphasized the context of market relations when it asserted that the term Arbeitskraft refers "especially to the strength of the commercial worker himself." Wurm also offered a forceful example of usage: "The rich factory masters, who exploit the material labor power of the

people."^[65] German society did not wait for Marx to use labor power to describe the extraction of profit; it surfaced in the vernacular beforehand and became commonplace during the revolution of 1848.^[66]

The coining of the new term Arbeitskraft , its conscious linkage with the new market regime, and the timing of its appearance show that the difference in British and German expressions was not just a matter of linguistic form, of superficial words used to refer to the execution of work in any economic context. It represented a genuine difference in concepts of employment viewed under a capitalist regime. Where labor was not discussed in the context of commercial relations, other terms could be called to service. In Germany, an alternative locution, Menschenkraft , referred to the contribution of labor that was not necessarily exchanged as a commodity in the market. For example, a Saxony business journal said that good soil, fine weather, and "human power" (Menschenkräfte ) went into growing raw materials.^[67] The German labor movement during the revolution of 1848 used the general term labor to refer to the workers' contribution to society, but the term Arbeitskraft to describe the use of labor in production.^[68]

The innovative nomenclature for labor as a commodity appeared in the writings of factory directors and other capitalist entrepreneurs concurrently with its appearance in the popular media. On the eve of the revolution of 1848, employers defined the jobless in terms that specified exactly what the subordinates were trying to sell: they were people who "cannot valorize their labor power."^[69] Similarly, in 1861 a Saxony newspaper described unemployed wage workers as persons who "let their labor power lie fallow."^[70] In the German textile trade the expression labor power appeared in the 1860s in the earliest technical guides to the establishment of a mill.^[71] Employers and workers moved toward the locution at the same juncture in history, neither ahead of the other.^[72] Despite all the differences between them, both groups responded to a shared societal condition, the regulation of social relations through formally free commerce in human work activity.

The basic difference in the way German and British economic agents conceived of the transmission of labor influenced their views of labor's contribution to national wealth and to employers' profits. Adam Smith created a divide between manufacturing labor, which he designated productive because it was fixed in a product, and services, which he called unfruitful because they did not terminate in a durable good.^[73] Ricardo excluded serv-

ices from his model altogether. But in the early German reviews of the Wealth of Nations , including the very first, in 1777, German commentators took issue with Smith's separation of productive labor from the delivery of a service.^[74] Friedrich Hermann, the theorist who built a new renown for German political economy, illustrated in 1832 the German method for equating the two: whether hiring workers or servants, an employer offers money in return for disposition over labor capacity. "The pay of the master [Brodherr ] goes to the worker, of course; but in return," Hermann reasoned, "the activity [Tätigkeit ] of the worker comes under the authority [Gewalt ] of the employer."^[75] In the second edition of this book, Hermann said, "We will no longer distinguish rigorously between service and labor."^[76] Hermann could carry out this merger of the two categories because he thought that in both instances the worker sold control over the execution of the activity rather than transferring materialized labor.^[77]

British economists defined the efficiency of labor in terms of the employer's ability to obtain produce from his workers at a certain price.^[78] German economists, by contrast, defined it in terms of the difference between the use value of labor and its exchange value, that is, in terms of the distinct process of converting labor power to an output. The distinction allowed them to see that the production carried out by "labor" could be worth more than the price the employer [Lohnherr ] had paid for the right to use the "labor." For example, Karl Heinrich Rau, the eminent synthesizer of economic ideas during the 1820s, thought that although labor was not a "material good," it was something from which the employer could acquire unequal amounts of value depending on how he used it.^[79] In the case of personal services, Rau said, labor "usually is to be had for a price which stands far under its value."^[80] Rau contended here that labor's price in the market could stand below what the employer could get out of the use value of the labor. Such a proposition the British economists could not have entertained, since they did not look at the use made of labor but only at labor's exchange via finished commodities. Rau's own way of interposing a separate

moment for labor's utilization also entailed a theoretical loss, however. In contrast to the British, Rau declined to put forward any important propositions about the relation between wages and the exchange value of the goods produced.^[81]

The Germans' conception of the work activity opened up wider possibilities for envisioning the source of the employer's profit. British economists saw labor as a kind of intervening variable that allowed the capitalist to expand his capital. It operated as a requisite that allowed the investment to yield profit, not as an independent source of that profit. The German economists, by contrast, saw the purchase of labor as potentially realizing a profit quite apart from the earnings on the capital invested. Hans Mangoldt, for instance, argued that the employer made a profit not only by putting his capital to work and not only by acquiring part of the worker's produce in return for the use of the capital stock; he also made a profit by renting labor. The employer engages labor, Mangoldt said, only if he "is in a position to turn the hired labor into a value greater than he has to pay for it himself."^[82] Roscher believed that workers got less pay for the same output if they sold their labor to an employer rather than directly to consumers in the form of either a product or a service.^[83] In the German tradition, the use of labor in the production process, leaving aside the return on capital invested, generated surplus value.

The German economists not only developed their ideas with reference to the British, but they also offered penetrating textual comparisons between the British concept of labor and their own. Theodor Bernhardi, writing in 1847, thought that part of the difference grew out of the infelicities of the English language. The word production , he said, had a "double sense" in classical English political economy. It referred to the mathematical function of adding units together to yield a result. This described the process of adding together the market prices of inputs to raise the exchange value of a good. The term could also refer, however, to the physical process of creating a good. By using the word production in both these senses, he said, Smith and Ricardo avoided considering labor from the distinct vantage points of commercial exchange value and concrete use

value and overlooked divergences between them.^[84] Smith, Bernhardi said, theorized labor only from its appearance in the realm of exchange, so that "labor is immediately conceived as a product."^[85] He cited instances from the Wealth of Nations where Smith collapsed the process of production into that of exchange by equating the price of labor with the quantity of labor delivered. He objected in particular to Smith's argument that "labour was the first price, the original purchase-money, that was paid for all things."^[86] To Bernhardi, this formulation inappropriately turned every producer into a merchant: the employment of natural materials was equated with a commercial exchange. Bernhardi found it incredible that British political economy neither anticipated German innovations nor incorporated them after the fact. "How could reflection on the matter not lead to the distinction between the price of labor and its value?" he concluded. "It seems almost inconceivable that, based on this point, an entire revolution of the whole doctrine did not come about."^[87]

Readers in the twentieth century can nod their heads in assent, for they know that Bernhardi foretold the precise route by which classical political economy would finally be subverted. As the inheritors of this historical process, we believe that the perpetrator was another scholar of German origin—Karl Marx. How does the prior evolution of German economic doctrines in the first half of the nineteenth century illuminate the emergence of Marx's seditious theory? Marx did not arrive at his insights purely by applying the force of logic upon British sources. Nor did he knowingly draw upon the traditions of German economic doctrine. History transpires in a more complex and surprising fashion. The answer not only demonstrates how Marx's analysis of labor and profit emerged but helps us recover the historical processes by which the popular concept of labor as a commodity appeared in Germany.

Marx's Replication of Economic Theory in Germany

In Kapital Marx offered an original permutation of economic ideas which had been laid out in advance on both sides of the channel. He combined the

British view of circulation with the German view of production. To lay out the terms of the merger, Marx's analysis in Kapital of the transactions capitalists made in the sphere of circulation, those by which they purchased inputs (including labor power) and disposed of outputs, proceeded according to the hallowed laws of the exchange of equal values and equal quantities of labor. In his account of the generation of profit Marx reaffirms that on the market "equivalent has been exchanged for equivalent."^[88] This is the British view of circulation. Yet Marx argued that, looking at the production process as a concrete activity, the laws that govern the trade of exchange values no longer applied. "The seller of labour power, like the seller of any other commodity," Marx wrote, "indeed realizes its exchange value and parts with its use value.  . . . The circumstance that  . . . the very same labor power can work during a whole day, that consequently the value which its use during one day creates, is double what he pays for that use—this circumstance is, without doubt, a piece of good luck for the buyer, but by no means an injury to the seller."^[89] This insight represents the longstanding German view of the use of labor as a commodity in production. Up to this point Marx followed a trail laid by forgotten predecessors.

Marx completed a narrower innovation. He made a contribution by identifying the double character of labor in its role as a commodity—its determinate exchange value—and in its concrete use as the means for generating a surplus for employers. The purchaser of labor manages to turn a profit only by taking advantage of the use value of the labor in the production process. If the owner at this moment properly uses this labor power, it can yield goods with more exchange value than the exchange value of the labor. (The exchange value of labor power Marx defined as the substantial cost, or amount of labor, needed to maintain the employee's ability to work.) The commodity of labor power is unique because it represents "a source not only of value but of more value than it has itself. This is the specific service that the capitalist expects from it."^[90] To sum up, the two critical insights which led Marx to this analysis of the source of surplus value in the production process and which appear in earlier German texts were the following: that the owner purchased only

"labor power," and that the concepts of "use value" and of "exchange value" can be extended from inert wares to this peculiar human commodity.

Marx's interlacing of German ideas of production with British suppositions of circulation was original but not singular. It represented an intellectual outcome that may have already been in the cards. Karl Roesler published a parallel solution in 1861, six years before the first edition of Kapital appeared in the bookstores. He highlighted the dual character of what he termed "labor power" by entitling one chapter of his work "The Use Value of Labor" and the next "The Exchange Value of Labor." He declared that workers' wages depended upon the expense they incurred to develop and reproduce their work capacity:^[91]

One must hold on to the fundamental principle that in the process of exchange, including the labor market, values are traded only against like values. Without this rule the amount of use value  . . . would determine the amount of value for the sale of labor power and every relation with the general system of other exchanges sundered. If the free resources in the earth, in the air, or wherever they may find themselves cannot be considered in the measurement of exchange value, and thus in the price [of a good], so it is not to be seen why this is not also or possibly the case with human labor power.  . . . The use value of labor has no influence on the formation of its price.^[92]

Roesler retained the classical principle governing equal exchange in the market while acknowledging that the employer could thereby receive a bonus in unpaid use value of the labor power. This acute insight anticipated Marx's analysis of the double character of labor as a commodity in the market and in the production process. Roesler diverged from Marx principally in supposing that capital could make an independent contribution to the exchange value of goods. For this reason, he did not arrive at the conclusion that all profit derived ultimately from the employment of labor. In its explanation of the extraction of surplus value, as in other ways, Marx's contribution remained unique.

Historians of economic theory have often envisioned their task as one of tracing a lineage or sequence of ideas among the known "greats," from

Smith to Ricardo to Marx. Within this overall plan of succession, they have, to be sure, identified the discontinuities that Marx introduced into the British line of development. But they have treated this change in the analysis of the valorization of labor as the fortuitous consequence of Marx's genius.^[93] To those unfamiliar with German economics Marx's pair of insights into labor might well seem to have come to him in an inspired dream. His voluminous notes and citations reinforce this view, and rightly so. Marx wrote exegetically as a matter of principle. From his perspective, the economic ideas of previous thinkers did not just offer examples of the play of logic, they expressed, sometimes indirectly, the essential social forces and forms of consciousness at work in prior stages of history. By developing his ideas through reflection upon earlier economists, he could join his thought to the central processes of social development.^[94] Accordingly, when Marx set out to write Kapital —subtitled, of course, a critique of reigning views of political economy—he conceived a history of theories of surplus value as an integral part of the project.^[95] Most of the theorems he presents in publications or drafts comment upon spirited formulations by other philosophers or pen-pushers. Yet the analysis of the double character of labor power—the undertaking he considered to be his single greatest contribution to the analysis of capitalist production^[96] —surfaces in his notebooks and drafts, not to mention in Kapital itself, as an invention without precedent, an intellectual creation de novo.^[97] And so it seemed to him.

Marx, the well-read man of letters, steeped in both the high and vulgar analyses of his day, was in all likelihood unacquainted with formulations of

labor as a commodity among elite German economists. The value theorems of bourgeois political economy became his central preoccupation only after he fled to Britain. From there he innocently claimed in 1868 that "The economists without exception have missed the simple point that, if the commodity is a duality of use-value and exchange value, the labor represented in the commodity must also possess a double-character."^[98] In his rough draft, Grundrisse , where he presents a full-scale version of the theory of exploitation at the point of production that later surfaced in Kapital itself, Marx cites more than one hundred and fifty economic commentators or economic historians. Of these, only fifteen were of German origin, whereas more than ninety came from Britain.^[99] Where Marx makes reference to German economic thinkers in this draft and in earlier notebooks, he restricts himself almost entirely to monetary and currency theory or to the surface history of trade and industry.^[100]

The neglect was deliberate. In Marx's view, the economically most progressive country could not fail to invent the most advanced economic thought. Conversely, Germany's deficient economic development "ruled out any original contribution to 'bourgeois' political economy." In the Preface to the second German edition of Kapital , he said, "Just as in the classical age of bourgeois political economy, so in the age of its decline, the Germans remained mere schoolboys, parroters, and hangers-on—petty retailers for the foreign-owned wholesale business."^[101] Marx arrived at this judgment by axiomatic deduction well before he launched his intensive study of economics. As early as 1845—that is, before he had begun his formal-analytic essays on economic theory—he had decided that the late appearance of the German bourgeoisie made it "impossible" for representatives of this class to better

the political economy expounded in more advanced countries.^[102] Marx's subsequent disregard of German sources may seem inexplicable. Only adherence to a powerful theory—in this case, about the social generation of meritable ideas—could have so narrowed his sight.

The retarded evolution of Marx's vocabulary corroborates the supposition that he developed his distinction between labor and labor power independently of the German economists. In the Grundrisse Marx makes use of the concept but not the term labor power. For example, in some passages he focuses his attention upon the "use value" of what he indifferently terms labor. He writes, "The worker exchanges his commodity, labor, the use value, which like all other commodities, also has a price [an exchange value]."^[103] In sentences such as this one, for example, Marx could not refer to the use value of labor without implicitly meaning labor power. In a few sections of this draft where the explanation of the generation of surplus value at the point of production is formally identical to that in the renowned final version, Kapital , Marx contrives to use instead an unfamiliar scholastic compound, Arbeitsvermögen ("labor capacity"), to define labor's commodity form.^[104] We have here an extraordinary manifestation of intellectual ignorance: the term Arbeitskraft ("labor power"), the indispensable talisman of conventional Marxist economics, is wholly absent from the Grundrisse even when Marx makes technical use of the concept,^[105] whereas we know that this very locution had already gained currency among German economists as an expression highlighting the difference between the use and exchange values of labor in the capitalist labor process. Engels used Arbeitskraft as early as 1843, though without analytic significance or consis-

tency, in the first essay either he or Marx wrote on economic method.^[106] Marx himself later attached great importance to the proper use of terminology about labor to mark what he saw as a momentous revolution, of his making, inaugurated by understanding the purchase and use of Arbeitskraft.^[107] In hindsight Engels realized that Marx's published analyses of the production process before Kapital were absolutely misleading because they used the ambiguous term labor.^[108] If Marx had borrowed the conceptual distinction between labor and labor power from German economists, he would have used Arbeitskraft in the Grundrisse.^[109]

In the historical unfolding of economic theory, Marx enters the story as a German not because he imparts the legacy of traditional German political economy; rather, his texts reproduce German social experience.^[110] How else could he have conceived by separate and independent reflection the same definition of labor as that of the liberal German economists?^[111] In his Foreword to the English edition of Kapital , Marx introduced himself as a German. "We," the Germans, he told the English readers, "suffer not only from the development of capitalist production but also from the incompleteness of its development. Alongside of modern evils, a whole series of inherited evils oppress us, arising from the passive survival of anachronistic modes of production."^[112] Marx's analysis of the commodity of labor came to him as an inspired vision, but the apparition was historically determined: it con-

jured in basic outline the peculiarities of German economic development. We have only to follow its lead.

The Guilds' Residual Control Over the Supply of Labor

If the simultaneous emergence of free trade in goods and in labor power in Germany represented a necessary step for the commodification of labor in the cultural form of "labor power," it did not comprise a sufficient condition. After all, judged by this sole criterion, French producers entered the modern world of liberal commercialism by the same door. Yet, as we will see, they reached a different concept of labor as a commodity from that of the Germans. A single contingency is inadequate even for the German case alone. It must be remembered that when freedom of occupation was introduced in Germany, the urban work force consisted primarily of artisanal manufacturers and included many small masters working on their own account. Did they not stand in the same position as the independent tradesmen who typified the sale of materialized labor in Britain? Could they not have evolved the same assumptions about the exchange of labor as a commodity as the British? To stipulate the historical forces that were sufficient to guide the cultural construction of "labor power" in Germany requires a more discriminating analysis of the ensemble of urban and rural institutions of work during the initial decades of liberal commercialism.

Let us turn to the cities. Among thinkers as diverse as Adam Smith and Paul Sweezy, the towns in Europe have been viewed as the nodal points from which capitalist development emanated. In Germany the urban centers with concentrations of artisanal enterprise had once acted as a force for change by sponsoring the growth of mercantile trade. But during the nineteenth century they shrank from the construction of a laissez-faire regime and resigned from a leading role in the development of labor as a commodity.

The introduction of freedom of occupation in Prussia may have destroyed the town guilds' legal monopolies, but it did not obliterate the guilds themselves. They retained many functions in Prussia: they continued to supervise the recruitment and training of apprentices; they retained the right to certify trainees;^[113] they still required that masters pass qualifying examinations in

order to become accepted as full members in the corporation;^[114] and they continued to administer workers' insurance funds.^[115] Saxony and the southern German states obtained a similar result, for they refused to enforce the guilds' legal monopolies but also declined to abolish the guilds' claims to the allocation of labor.^[116] In some German towns craft guilds were to reassert control over workers by controlling their placement in jobs. The guilds issued employment books to workers which documented the holders' training and conduct.^[117] Outside Prussia, the guilds generally had more widespread controls: they could regulate access to craft work by imposing residence requirements for licensing and by subjecting new practitioners to severe examination.^[118] To be sure, the guilds no longer had clear statutory power to shut down the businesses of interlopers. But, as corporate associations, to the end of the nineteenth century they maintained regulations for the protection and advancement of their trades and for the supervision of labor.^[119]

Guild influence was probably weakest in the Rhineland. During the French occupation, the left bank of the Rhine, incorporated into France, had its corporations abolished altogether. After the ejection of the French, however, this zone rejoined the main path of business development as it was being followed in other parts of Germany. In many trades, the artisans in the Rhineland conjured the guild affiliations back from the dead. The Diet of the Rhine province even appealed to the Prussian king in 1826 and 1833 for a partial lifting of freedom of trade and occupation.^[120] The craftspeople

failed in their attempts to restore the old constitution of business with production monopolies, but they succeeded in reinstating the condition that only members of the craft associations could hire apprentices.^[121]

Guild membership in Germany remained a sign of social status which complicated the terms by which producers conceived the employment relation for craft production. Christiane Eisenberg's inquiries into the legacy of the guilds in Germany have disclosed that corporate designations of status blunted the adoption of terms descriptive of capitalist relations of production. The locutions employer (Arbeitgeber , literally, "giver of work") and employee (Arbeitnehmer ) were slow to replace the guild terms master (Meister ) and journeyman (Geselle ). Where the new words appeared to prevail, their usage was sometimes confused with the old: independent producers with guild certification as masters but with no assistants were classified inconsistently as "employers."^[122] In contrast to experience in Britain, "no uniform expression developed for the group of independent producers working on their own account."^[123] Economic agents in Britain called the producers in this group "free tradesmen" or "undertakers."^[124] But in Germany, the public and the craftsmen themselves imposed linguistic distinctions from the guild system upon producers who shared the same market positions. For example, in the mid-nineteenth century they described these independent producers as journeymen working on their own (selbständige Gesellen ) or as masters working without assistants (Alleinmeister ).^[125] Rather than adopting a terminology based on the exchange of products by independent market actors, as in Britain, the Germans used guild designations that drew upon the prior status distinction between masters and jour-

neymen.^[126] Social forms inherited from the guild system were not modified to conform with the capitalist employment relation, but cross-cut capitalist definitions.^[127]

During the revolution of 1848–1849, petitions for the recall of commercial liberty came from small textile masters in all portions of Germany. In Leipzig the craft masters wrote an appeal denouncing free trade as a pernicious "French" principle.^[128] "Unrestricted commercial freedom," the artisans of Korschenbroich in the lower Rhineland told the government in 1849, "is the origin of all evil."^[129] Every craft worker had a different home remedy for the exotic illness. Some guild petitioners wanted to prohibit merchants from buying goods manufactured by artisanal producers. They would have allowed peddlers to sell machine-made products but not hand-made ones—an eloquent indicator of the way craftspeople divided the world of production in two.^[130] Craft masters in the textile trade also attempted to prevent the rise of nonguild undertakings by allowing only guild masters to oversee the work of journeymen.^[131] Opposition to free trade came not just

from producers in the cities. The operators of rural putting-out systems wanted to restrict entry into the trade as a way of ensuring high-quality workmanship.^[132]

The opposition to free trade did not disappear after the revolution was finally suppressed. To the end of their days, members of some of the urban crafts in Germany remained antagonistic to the emergence of liberal commercialism.^[133] During the 1850s the weaving guilds continued to send petitions asking the Saxon ministry of the interior to prohibit liberty of trade in their products.^[134] For artisans, the development of an unbridled market did not represent a natural progression in contrast to which regulation appeared as an exceptional constraint: as late as 1860, some craft workers saw free business as an artificial invention dreamed up by essayists. "Freedom of trade is a child of the press," the Magistrat of Conitz wrote in 1860, "supported by people and judgments that have little insight into the essence of craft work."^[135]

In Britain, the cultural commodification of labor took place when artisanal work still enjoyed a vigorous youth. In the eyes of seventeenth-century British observers, small manufacture represented one of the most dynamic sectors of the economy.^[136] Given the prolonged suppression of market institutions for wage work in Britain, the exchange of merchandise by independent producers in this branch could provide the context for the commodification of labor as it was objectified in a ware. In Germany, by comparison, the introduction of a formal market in labor power and of

market discourse coincided with the middle age and deteriorating health of craft enterprise.^[137] It accompanied a secular debasement in the conditions of craft labor and a decline in its remuneration. Urban craft work tended to define itself as an opponent of free intercourse in labor rather than, as in Britain, a promoter of its growth within trade-union limits.^[138]

The diverging usage of the term artisan in German and English illustrates the role of craft work in the cultural commodification of labor in the two countries. In the course of the nineteenth century the German term for artisan, Handwerker , came increasingly to refer to self-employed persons outside of large enterprises. It implicitly excluded wage laborers.^[139] In Britain, by comparison, the term artisan was increasingly used to refer to skilled workers who earned wages in the employ of others. It was applied to the aristocracy of wage laborers, including those in the factory. Unlike the German word, the English term was not shunted to the periphery of capitalist relations of employment but was central to the definition of wage labor. The fates of the terms worker and Werker also illustrate a divergence in the application of words that derived originally from the world of craft work but were extended to the industrial-capitalist economy. In both languages the term originally applied to those in craft and shop work.^[140] In English the term came to refer to the entirety of wage earners, marking the centrality of small manufacture for the definition of commercial labor. In German

usage, the term Werker remained confined to the original context of handicraft production, marking the failure of craft work to provide the template for conceiving of capitalist wage labor. The generic term for worker that prevailed in Germany, Arbeiter , came from another domain, that of the serfs on feudal estates.^[141]

The urban crafts in Germany did not provide the context for the development of market thinking; instead, the crucible for the cultural specification of labor's commodity form was large enterprise relying upon supervised labor, that is, the manufactory.^[142] The employment regulations of Prussia and the other German states had long placed the manufactory and the artisanal workshop in separate worlds. During the eighteenth century, the Prussian state exempted manufactories on a case-by-case basis from the requirement that production of a line of goods rely only upon workers belonging to the guild responsible for that branch of industry. In 1794 Prussia finally arrived at a general rule: manufactories could hire whomever they pleased, including nonguild members and women.^[143] In Saxony as well, by the eighteenth century chartered factories were exempt from guild regulations on the use of labor.^[144] The German states recognized that the guilds restrained economic development, yet they remained unwilling to abolish them outright, for under the supervision of the masters they provided ready-made organizations for assisting authorities' surveillance and tutelage over workers.^[145] Once segmented by state regulation, the two worlds of work, manufactories with unregulated labor and guild craft shops, were never reunited.^[146]

Prussia and the other German states continued their dual-track policy during the first decades of the nineteenth century. While they allowed guilds to maintain de facto control over labor in traditional workshops, official labor codes all but disappeared from the new and promising sector of large enterprise.^[147] Of course, the owners of the prosperous new factories considered their workers to be servants and supposed that the labor laws pertaining to the employment of house servants extended by implication to factory employees. But in Prussia, as elsewhere, these owners found that officials refused to extend the provisions of the laws for servants to factory workers.^[148] In the initial decades after the Prussian commercial reforms of 1810–1811, the police also declined to forcibly return workers who had abandoned their employment without notice.^[149] To collect compensation from miscreant workers, Prussian factory owners had to take the tedious step of filing claim for damages in court.^[150] Prussia, supposedly the land of heavy-handed state supervision, had a consistently laissez-faire policy toward labor contracts during the introduction of liberal commercialism.^[151] Enforcing a web of labor regulations in the factories, Prussian officials declared in 1817, "would reduce the natural freedom of people to dispose over their time and talents in the manner that seems most advantageous."^[152]

Prussia set a standard for regulation elsewhere. In Saxony, where industrial growth enjoyed an early start, the industrial association reported in 1835 that "a condition of virtual lawlessness" had developed in labor relations.^[153] The Saxon state did not issue rules for labor contracts for nonguild factory workers until the 1850s.^[154] More remarkable are the steps that authorities there took to prevent town administrators from supplementing those general guidelines with additional disciplinary procedures for workers who left without notice or who damaged machinery. In Saxony provincial officials repeatedly intervened to prevent town administrators from officially sanctioning the employment codes drawn up by factory owners and their Chambers of Commerce.^[155] Employers in other regions, too, complained of lack of legal enforcement of employment rules in their mills and shops. "Whereas in other countries the law already regulates labor time, factory ordinances, and rules," the Magdeburg newspaper observed in 1850, "nothing similar occurs with us."^[156]

The laissez-faire regime under which factory workers and employers in Germany were left to specify the labor transaction offers a powerful contrast with the fettering of wage labor at the dawn of liberal commercialism in Britain. There, we know, the law in force during the shift to a formal market made labor an exceptional good that employers could requisition by fiat. The law treated the laborer as the holder of an ascribed status rather than as the occupant of a role created through personal contract. In Germany, wage labor outside the guild system was founded on a more thoroughgoing break with the restrictions of the past than was true in Britain.^[157]

In this respect the Germans proved themselves more liberal than the British at similar stages in the institutionalization of free exchange and commercialization of social life. Yet the maintenance of corporate organization of work in artisanal undertakings in Germany excluded this sector from a pioneering role in cultural change. The result was a profound division between large, innovative enterprise and small, traditional concerns.^[158] As Wolfram Fischer has observed, industrial policy in Germany "discouraged the transformation of the group of conservative artisans into a stratum of modernizing entrepreneurs and helped bifurcate the face of the economy into a static adherence to old forms and a dynamic, unlimited advance."^[159]

The historical divide between traditional craft work and the commercialized manufactories in Germany found its theoretical expression in Marx's reflections. Marx excluded urban craft production from his interpretation of the genesis of capitalist relations of production. To be sure, it represented an early island of free labor within feudal society. Despite a propitious start, however, it remained unsuited for the eventual development of capitalist wage labor. "Although urban artisanal production rests essentially upon trade and the creation of exchange values," he acknowledged, "the direct, main purpose of this production is the subsistence of the artisan and of the craft master."^[160] Marx assumed that the urban artisans, under the aegis of the guilds, fought successfully against the attempts of merchant capitalists to govern the production process.^[161] In Kapital he emphasized the limits the guilds placed on the size of work-

shops and division of labor in the production process: "The merchant could buy every kind of commodity, with the exception of labor as a commodity. He was tolerated only as a distributor of the artisanal products."^[162] The appropriation of materialized labor did not, in Marx's opinion, constitute the purchase of labor as a commodity.^[163]

To turn labor into a commodity, from Marx's point of view the capitalist had to take command of the production process in order to control the conditions under which labor power was converted into a product. The creation of a market in manufactures does not suffice to commodify labor; legal restrictions on both trade and the use of labor in production had to disappear. This theoretical supposition recapitulated the invention of the market in German history, where the commercialization of exchange in manufactures and the lifting of legal constraints on the use of labor in production were fused. Britain provided the historical laboratory for a model of capitalist development in Kapital , but the perspective imposed on Britain came from Germany. By the time internal monopolies on trade in manufactures had decayed in Britain, so had the power of the British guilds.^[164] By 1689 only a quarter of the towns in England had guilds with a semblance of organization, let alone ones capable of enforcing business prerogatives.^[165] They had lost the ability to impose statutory limits on the size of workshops and the division of labor. Marx's supposition that the urban crafts never allowed labor to crystallize as a commodity badly mis-

judges British experience but fits Germany closely.^[166] What appears here in Kapital as "theory" represents in fact the displaced historical experience of Germany.

Since Marx excluded urban crafts work from the development of capitalist relations of production, his attention was drawn to centralized manufacture in the countryside: "The original historical form in which capital appeared, first sporadically and locally, next to the old ways of production but gradually undermining them everywhere, was not yet the factory, but Manufacture proper."^[167] Historians in our day have emphasized that rural domestic industry based on the putting-out system occupied a larger portion of the work force than did centralized manufacture. David Landes has surmised that Marx's exaggerated estimation of the manufactory's importance stemmed from its role on the Continent as a state-subsidized disseminator of technical knowledge.^[168] Marx's accentuation of the manufactory's significance may also have derived from his theorization of social relations at the point of production. Workers in these large undertakings, in contrast to those in the guild-controlled shops, were separated from the tools of manufacture, and the conversion of their labor into a product was subordinated to management decree. To Marx's eye, these workers were the first to sell labor power per se in the emerging capitalist order. The prominence Marx gave to the manufactories was intended to accord, not with their quantitative share of employment, but with their importance as a site of the inception of the social categories of wage labor and capital.

The insight that labor itself became a commodity only when workers were supervised by the owners of large enterprises had become a common-place observation in bourgeois German economics before it surfaced in Kapital. J. C. Glaser, a philistine commentator from Berlin, had adduced such an argument in 1858. He claimed that

So long as a worker is self-employed and either consumes for his own use the products he created with his labor or exchanges them for others that he can consume, then the wage of labor is the prod-

uct itself.  . . . As soon as the division of labor [in production] is introduced and the individual no longer owns the capital to support his work and therefore no longer works for himself, but for others  . . . labor power is rented in return for compensation.^[169]

Glaser, in contrast to most economists in Britain, made an explicit contrast in his theory between the selling of mere articles and the offering of labor as a commodity in centralized factories with a division of responsibility. Like Marx, he called labor itself a commodity and applied the term labor power only when certain historically specific social relations obtained at the point of production. In addition, however, Glaser took care to say that workers did not sell but merely "rented" their labor power. This marks an understanding of labor power as something lodged in the person of the worker and reveals an understanding of an essential similarity between wage labor and serfdom or slavery. No wonder Glaser chose his words so carefully at this point to demarcate wage labor.^[170]

In Britain, economic agents in the nineteenth century supposed that capitalist relations of labor were exemplified in the small craft shop as well as in the factory; in Germany, by contrast, both employers and workers usually focused upon employment in a centralized factory as the exemplary form of wage labor. During the early phases of mechanization in the German textile industry, the very term Lohnarbeiter , "wage worker," connoted those who worked in a factory.^[171] Remuneration in the factory also acquired a name different from that used in the craft shop. During the 1840s, workers of all sorts in the factories, as opposed to those in outside artisanal shops, were paid what were called "day wages" (Tagelohn ), as if they were day laborers. This emphasized the diurnal sale of labor power per se, even if the exact amount of the compensation was based on piece rates.^[172] In the textile trade, handweavers in trade associations gave their colleagues who entered the factories the contemptuous label of Tagelöhner , "day laborer."^[173] Employers adopted the same lan-

guage, singling out the factory operative as the true wage laborer. "The so-called day laborers," declared an industry journal in 1861, represented "the worker in the narrowest sense of the term."^[174] Conversely, journeymen weavers contended that merely by virtue of the fact that they worked outside the factory system, they were not wage laborers.^[175] In Britain, the commodification of labor appeared as a process separate from its impoundment in centralized, mechanized production under the supervision of the owner; in Germany, language testified to the conjunction of the two concepts.

The German view of employment as the purchase of "labor power" made the exercise of authority over the execution of work—that is, the purchase of labor's "use value"—an integral part of the process of securing a surplus from workers. This perspective unified the relations of appropriation and domination. When capitalists purchased "labor power," their receipt of profit depended on how successfully they converted labor capacity into labor. Without control of the production process, the employer did not appropriate a surplus. Profit may have been realized through exchange in the market, but it was generated and appropriated in production. There the buyers and sellers of labor as a commodity necessarily entered into relations of domination and subordination. Accordingly, Marx's theory ruled out the possibility of a social formation based on the exchange by independent commodity producers of labor as a commodity.^[176]

The unique survival in Germany of corporate labor associations in craft work thus represents the second decisive condition for the development of the German specification of labor as a commodity. The resistance of German guilds to the introduction of liberal commercialism confined them to the margins of cultural development in the commercial economy. Their contribution to the cultural construction of labor was primarily negative. The restriction of the unbridled training and employment of labor to manufacture outside the guild system during the first decades of liberal commercialism in Germany meant that new branches of manufacture and the factory could play a pioneering role in the cultural construction of labor's commodity form. The factory provided a suitable setting for highlighting the supervision of labor and the appropriation of the "use value" of labor in the production process. If the immediate circumstances of production offer material for interpretation, however, they cannot impress themselves automatically upon the social imagination to produce a "corresponding" image of themselves. There is no single concept of labor that conforms most naturally to factory conditions. Instead, German producers drew upon cultural precedents to construct their definition of "labor power."

The Feudal Contribution

In Britain feudal tenures had been abolished and agrarian producers separated from the land before the government ceased regulating wages and before labor was formally founded upon contract rather than compulsion. In Germany, by contrast, feudal tenures and compulsory labor dues persisted in the countryside while the state created liberty of occupation and the formally free negotiation of wages for the factories and putting-out shops. This conjunction allowed feudal agricultural labor in Germany to supply a vivid template for the appropriation of labor in the factory during the transition to liberal commercialism.^[177] Whereas the contribution of the guilds was negative, that of feudal relations of work in agriculture was positive: they offered a model for the employment of labor on which economic agents could draw to define the labor transaction under the emerging capitalist relations of production.

The original feudalism of the Middle Ages had been founded on the coercive extraction of dues in labor. By the eighteenth century, of course, much of the tribute in labor services in Germany had been commuted to rents in kind or to money rents. This process followed separate tempos in localities from eastern to western Germany. Landowners who had converted most of the obligatory labor services to rents prior to 1810 did not as a rule manage estates of their own where they engaged wage labor.^[178] In a word, they did not support the rise of an alternative definition of the labor transaction based on commercial agriculture. Although the offering of labor tribute to seignors had a diminished economic significance in many regions of the country by the early nineteenth century, it remained the principal model for the employment of agricultural labor to accumulate surplus.^[179] In comparison to development in Britain, in Germany the introduction of freedom of occupation and of formally unconstrained market determination of wages in shops and factories began before—or in a few areas, barely coincided with—the complete abolition of dues in agricultural labor. We must examine the course of agrarian reform in each of Germany's key regions to show that despite enormous variation within Germany, this represented a general cross-national difference.

For historical analyses of the transformation of feudal relations in Germany, the Prussian heartlands have long served as the locus classicus. Until the reforms of the nineteenth century, most agricultural production here, east of the Elbe, was carried out on large estates with serf labor. Even the minority of peasants who were already legally free were required to give a labor tithe to the lord of their land in return for the use of a holding. Only in 1807, on the very eve of the introduction of freedom of trade, were the serfs themselves freed by law. Even then, many peasants did not satisfy the

provisions that in principle would have allowed them to redeem their dues in labor. Indeed, when the German cities experienced the heady days of revolution in 1848, the bulk of the Prussian peasantry still were compelled to deliver a quota of labor tribute.^[180] No wonder the entry for Arbeit in the German dictionary published in Berlin in 1860 included a feudal illustration of the term's meaning. This compendium, edited by a member of the Society for the Study of Modern Languages in Berlin, listed "going to do compulsory labor at the estate" as an illustration of the word's typical use.^[181] At the start of the industrial age, agricultural workers in the east were still bound in feudal relations of work that emphasized the lord's authority over their labor service.^[182]

In Saxony, destined to become one of Germany's most heavily industrialized regions, the seignors prior to the era of reform managed only part of their holdings as personal estates.^[183] The remaining land had already come into possession of small peasant cultivators who owed the lords money rents as well as labor services. When the value of the money payments depreciated after 1815, however, the lords succeeded in intensifying their subordinates' labor obligations.^[184] Not until 1832 did the Saxony government establish a framework for cultivators to release themselves from labor tribute by indemnifying their lords. The peasants who met the eligibility requirements could redeem their obligations by making payments in installments over a span of twenty-five years. When textile mills had become an accepted sight in the Saxony countryside and the mechanized factory an important matter in economic discussions, most of the peasants had not yet paid off their

feudal obligation to labor.^[185] The outposts of factory development were surrounded by a sea of agricultural workers bound by compulsory labor from another era.

As a mechanism for extracting surplus from the agricultural producers, labor dues had less importance in western and southern Germany than in the east. But there were many exceptions to this rule. In some western and central regions, including Paderborn, Hannover, Brunswick, and Magdeburg, feudal rent in the form of labor services absorbed a large portion of the peasantry's workdays.^[186] In the districts of Duisburg and Essen, near the centers of industrial expansion, some peasants were still attempting to release themselves from labor dues in the revolution of 1848.^[187] In southern Germany the governments of Baden and Württemberg did not earn their liberal reputations for the agricultural reforms they introduced. Only in 1831 did Baden make labor obligations convertible to money payments.^[188] In Württemberg small cultivators continued to deliver labor services until the revolution of 1848. The compensation they paid their lords to abolish labor dues was much greater than they paid for release from other fees and rents.^[189] Even outside the Prussian heartlands, labor tribute played a role in defining the use of labor in the early nineteenth century

Prior to the French invasion, tithes in labor no doubt had less significance in the Rhineland than in other regions of the country. In this area above all, peasants could not be evicted from their holdings.^[190] Most of the services the peasants had once rendered in return for use of the soil had been converted to money rents or to levies on the harvest.^[191] The producers came close to enjoying a system of pure land rental.^[192]

How, then, could historians conclude that in the Rhineland's system of agriculture prior to the French invasions "medieval survivals certainly still had a wide scope"?^[193] One answer is that as a modest supplement to agricultural rents, some days of compulsory labor were still rendered in much of the Rhineland.^[194] In rare instances, the obligatory service was rendered in the landowners' small manufactories.^[195] Even if the landholders did not rely upon tribute in labor for their economic sustenance, the required services still played an important role in defining farmers' subservience to land-owners, as the seignors' reactions to proposed reforms demonstrated. After the French invasion, landholders in western Germany opposed the elimination of labor dues, because they believed they would suffer a "decline of prestige through the future loss of subordinate persons."^[196]

Seignors believed that the procurement of labor through dues served as a model of authority relations. Even after some of them began to fathom the inefficiency that accompanied unpaid, coerced labor, they contended that its disciplinary effect was indispensable.^[197] Johann Georg Fleischer had put this relation of domination into words in 1775, when he wrote that the dues were "service or labor for the lord" and were "owed as the obligation of a subordinate."^[198] For another reason, too, tribute in labor had a significance apart from the bare number of days of work delivered: it could be demanded during the critical harvest period, when the dependent farmer's time was most valuable to himself as well as to the seignor.

The survival of feudal labor services in German agriculture supports the assumption that the labor transaction was based on the offering of a labor potential rather than on the delivery of a product. At the beginning of the nineteenth century, when employers and state administrators first tried to imagine the conversion of dues in labor to a market equivalent, they rejected the view that the dues could be equated with an article of labor. As one adviser, Karl Dietrich Hüllmann, expressed it in 1803, the value of the product delivered could vary, whereas "labor is to be compared only with labor."^[199] Hüllmann recommended that landowners replace labor dues with variable money rents indexed by the current price of common day labor. With the funds thereby collected, lords could command the same amount of labor power in the market as they had received by feudal claim. Like others, Hüllmann equated labor dues with the command of living service. Economic theorists put this in a more explicit and commercial form. For example, Fleischer argued in 1775 that the compulsory labor services delivered to the lords represented "active capital,"^[200] a living potential that could be used in a way that inert capital could not.

The slow reshaping of the social relations of work in German agriculture in accord with a liberal market regime highlighted the difference between the use value of labor and its price. Commentators observed that the lords extracted far less labor in a day from a vassal than from a free worker.

Fleischer, for example, estimated that the use value of day labor obtained from an unfree subordinate was only half that of a common wage earner; but if both were free laborers in the market, he said, their labor time would have the same exchange value.^[201] The conversion of feudal to capitalist institutions of work encouraged German thinkers to determine the distinct moment of converting a labor potential into labor.

Feudal relations of work offered a model for capitalist relations in the eyes of the workers themselves. The recollections of Adam Heuss illustrate their reactions during the critical period of transition. Heuss, born in 1780, worked for a small hand smith in Nürnberg who suffered from a decline in business. He published his observations on this matter in 1845, in a text that was autobiographical in tone and not intentionally political:

In our age of mighty advance it has perhaps been supposed that it is advantageous to have these tradable wares manufactured in factories with machines. This case probably would follow closely the example of the Mecklenburger estate lords [Gutsherren ] who released their subject peasants and turned them into day laborers; in this case the necessity of standing up to competition forces the businessman to do this, but truly the people's well-being has gained nothing through this advance.^[202]

In Heuss's account, the appearance of wage labor is conjoined with the rise of mechanized factory production, a typical appreciation based on the German path to a market regime.^[203] For him, the transition from compulsory labor dues to officially free labor served as a model for the transition from small craft shops to the factory. Heuss's text, focused on private affairs, was not composed for the sake of public dialogue or condemnation. The change from feudalism to capitalism was in his eyes purely formal: it did not alter the substance of employment. He testified to the transfer of feudal models of employment to the factory.

From the early days of factory labor in Germany during the 1830s, popular journals described the unwilling entry of workers into the factory as a

continuation of forced labor under the feudal system.^[204] During the revolutions of 1848 and 1849, the workers' newspaper Die Verbrüderung restated this judgment. It declared that there was no essential difference between feudal labor dues and "the labor that is demanded from the manual worker today." In both situations, it explained, the worker is compelled to work for his subsistence.^[205] Colloquial language also testified to the comparison of industrial and feudal relations of work: during the 1830s, the term Fröhnerlohn , the subsistence of the forced laborer, was transferred from agriculture to industry.^[206]

The comparison of feudal with capitalist employment relations remained a standard theme into the late nineteenth century. At an assembly of factory laborers and cloth makers in Bautzen in 1873, a speaker for the union movement said that "the serf of the Middle Ages was in a better position than the modern free worker, for the free worker has no means for acquiring the tools for work and thus becomes a vassal of the employer [Brotherr ]."^[207] Joseph Dietzgen, a tanner and early interpreter of Marx's investigation of the capitalist labor process, used the dependent servant's obligation to deliver labor to the lord of the property as a model for the wage laborer's delivery of labor to the capitalist. "Those who are working must do compulsory labor to create a product for the owners," he wrote in 1873, "which in twenty years equals the full value of the invested capital."^[208]

The long survival of feudal relations of work in Germany influenced the development of an understanding of the capitalist employment relation among elite economists as well. Many German economists saw the offering of feudal labor services as a forerunner to the sale of services by means of the wage contract.^[209] Ludwig Jakob was among those who expressed in clear form the carryover of feudal assumptions about labor to the wage contract. In a prize essay on free and servile labor, published in 1814, Jakob said that with wage labor, "the master does not have anything to do with forcing serfs into his service; rather, he selects among persons who seek to rent themselves [sich vermieten ]."^[210] The formulation that free workers compete to "rent themselves" establishes an analogy, suggesting that as serfs confer their person permanently, so wage laborers offer their person to the employer temporarily. Textile workers adopted the same expression. When they looked for work, they said they wanted to "rent themselves."^[211]

German economists may have taken liberal commercialism as the foundation for their codifications of economic thought, but they composed their works with many a backward glance at feudal relations of work. Economists such as Jakob, Rau, and Hermann emphasized that labor could be employed most productively if workers received compensation for extra effort and if they remained "free" to bargain for wages that compensated them for their accomplishments.^[212] This looks liberal enough, but the writers were not so inured to capitalist relations as to take the officially free labor contract for granted. For the German economists, to say that workers sold their "labor" did not adequately distinguish between feudal and market relations, because

selling one's "labor," in their eyes, could also mean that one bound one's whole person with a feudal obligation to labor.^[213] The concept of "labor power," by contrast, identified clearly the commodity the worker sold as something that inhered in the individual but could be separated analytically from the worker's person. At the same time, it maintained the idea that workers sold their labor as if it were a service and a resource rather than as if it were materialized in finished articles, as in Britain.^[214] The German thinkers did not contrast the person of the worker and the delivered product, as their British counterparts did, to distinguish the commitment of the whole person to labor from the sale of labor as a commodity; rather, the Germans made a distinction between the disposition over the whole person of the worker and the temporary command over the individual's labor capacity.^[215] It is telling that even people of business in Germany emphasized that the wage was "the equivalent for rented human labor power."^[216] Unlike the British, the Germans did not interpose a product between workers and employers but instead established an immediate relation between the two parties by retaining the concept of employment as the offering of a capacity.

Marx called attention in Kapital to the continuity between the concepts that ruled the delivery of labor under feudalism and those that operated, in disguised form, in the capitalist factory. In the Middle Ages, Marx claimed, "Every serf knows that what he expends in the service of his master is a definite quantity of his own personal labor power."^[217] In the feudal period, "the social relations between individuals in the performance of their labour appear at all events as their own mutual personal relations and are not disguised under the shape of social relations between things, the labor products. "^[218] Under the feudal system, the relations of appropriation and domination were fused in experience. When Marx applied feudal common sense

about the delivery of labor to unmask capitalist nonsense, theory recapitulated history.^[219] For Marx's acquaintance with feudal relations in Germany gave him the historical vantage point needed to use the notion of labor power in a critique of the view of materialized labor that governed British economic thought. Marx, like his contemporaries, emphasized the unusual coincidence in Germany of capitalist relations in the factory with feudal relations in agriculture.^[220] The musty German past thereby divulged underlying truths about the fresh British future.

The distinctive content of the German specification of labor as a commodity drew in several ways upon the procurement of labor in feudal relations of agriculture. As in the delivery of labor tithes, so in the selling of labor power in a market the German definition of the transaction emphasized the delivery of labor as a service potential, the employer's authority over the use of the labor, and the challenge of converting the use value of labor into a result. Adelung's dictionary of 1793 highlighted the offering of the worker's own person as a tool to another in its definition of an Arbeitsmann ("workman") as someone who "in everyday life lets himself be used for manual labor."^[221] The feudal emphasis on the transfer of labor as a potential at the disposal of a superior was to echo inside the walls of the mechanized factory: at the beginning of the twentieth century, the employment contract was not yet termed a "labor relation" in the German business code but a "service relation."^[222]

Even after the ancient system of extracting dues in labor was put to rest, other components of feudalism in agricultural work refused a timely burial. Their spirit animated labor law in the German countryside until the revolution of 1918. Up to that year, more than three dozen special ordinances, many dating back to the eighteenth century, condemned the agricultural wage laborer to harsh servitude. For violation of contract, these laborers were still liable to gross physical punishment, imprisonment, and forcible transport by the police.^[223] The bondage of agricultural workers to regulations outside those of a free mutual contract differs sharply from German

officials' deliberate protection of uncoercive agreements in factories at the dawn of the liberal commercial era. This extreme disjuncture in the pace of liberalization between the factory yard and the landed estate gave German producers an unusual vantage point. They could define the commodity of labor in terms of the underlying similarities between feudal and capitalist work regimes, systems whose principles appeared discordant to countries that had not experienced this coincidence of regimes of labor.

Three Conditions for the Cultural Outcome

This chapter has uncovered three major conditions guiding the construction of labor's commodity form in Germany: the simultaneous creation of juridically free markets in merchandise and wage labor in manufacturing, the prolonged supervision of labor in the urban crafts by guilds, and the compressed transition (amounting in a few regions to a genuine overlap) between the rendering of feudal dues in labor and the offering of labor for a wage in factory manufacture. The presentation has not treated these elements as additive factors; it has assigned them separate locations in an explanatory framework that shows how each established negative limits on the result or positively selected it. The conjoint introduction of formally free trade in manufactures and labor power gave German producers the opportunity of inventing labor's commodity form during the initial period in which market thinking emerged. In Britain the suppression of wage labor during the equivalent phase of the institutionalization of free commercial exchange blocked the discovery of labor as a commodity in the guise of "labor power." The two remaining conditions were still necessary to turn the possible into the actual in Germany. They enabled economic agents to transfer the assumptions surrounding the procurement of labor under feudalism to the labor transaction in the capitalist factory. It is only fitting that the word Arbeit , which in capitalist Germany came to designate labor in general, originally referred exclusively to agricultural services rendered by serfs.

To outline the historical origins of the contrasting commodity forms assumed by labor in Germany and Britain, this chapter has unraveled the lost connections between European economic practices lodged in the past and the Marxist analysis of the capitalist labor process debated in the present. We have seen how the categories Marx used to capture the generic logic of capitalist exploitation were unwittingly drawn from the culturally

specific concepts used in nineteenth-century German industrial life. The German producers had the pivotal concept of labor power ready to hand. But the parallels are more ample than that. The logical structure of Marx's theory of capitalist production—its exclusion, on analytic grounds, of independent artisanal producers from capitalist relations, its fundamental exemplification of supervised labor in large manufactories—telescopes and freezes the historically unique development of industrial capitalism in Germany.

As is well known, Marx was acutely aware that the concept of labor as a general factor of production arose only with the unhampered circulation of workers among occupations in a capitalist order. He described the historical development of the appreciation of labor as a commodity in his methodological reflections upon his critique of political economy:

The abstraction of labor in general is not only the intellectual reflection of a concrete totality of kinds of labor. The indifference towards the exact kind of labor corresponds to a form of society in which individuals can transfer with ease from one kind of work to another and the exact type of work is a matter of chance for them, and hence of indifference. Here labor has become a general means for the creation of wealth, not as a category of thought, but in reality.  . . . Such a state of affairs is at its most developed in the modern form of existence of bourgeois society—in the United States. Here, then, for the first time, the point of departure of modern economics, namely, the abstraction of the category labor , labor as such, labor pure and simple, becomes true in practice.^[224]

Marx uses the concept of labor as a commodity not only as an economic but as a social category; it delineates both the systemic laws of capitalism and the culturally specific lifeworld of the producers in bourgeois society. But if Marx brilliantly historicized and humanized a concept that other economists had taken as a gift from on high, at the same time he continued to postulate a single commodity form for labor in all developed capitalist regimes. When he conducted his own interpretive analysis of the causal laws of commodity exchange enunciated by bourgeois economists before him, he still treated capitalism as a general system that stood outside of himself. He failed to reflect upon his own national location within the movement of history and the process by which his experience came to incorporate na-

tional specificities of development. He investigated what was hidden from his life experience, not what was hidden in it.

The delineation of the three forks in German development led us to the commodification of labor in the form of "labor power," but it left several questions unresolved. What destination does a country reach if it experiences the creation of officially free markets in merchandise and labor simultaneously but lacks the other conditions that prevailed in Germany? Are there other forms in which labor can be molded as a commodity apart from those cast in Germany and Britain? We address these questions in the next chapter.