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

[84] Theodor Bernhardi, Versuch einer Kritik der Gründe, die für grosses und kleines Grundeigentum angeführt werden (St. Petersburg: Kaiserliche Akademie der Wissenschaften, 1849), pp. 87, 91.

[85] "Die Arbeit wird hier gleichsam als ein Product gedacht." Ibid., p. 161.

[86] Ibid., p. 101.

[87] Ibid., pp. 195–196.

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

[88] Kapital , op. cit., p. 209.

[89] Kapital , op. cit., pp. 208–209. Marx objected to the rhetorical notion that capitalists did not play by the rules of the game or that their profit was a kind of illicit "deduction" from the worker: "The capitalist, having paid the worker the real price of his labor power , has the good right—that is, the right in terms of this mode of production—to the surplus value." Karl Marx and Friedrich Engels, Marx-Engels Werke (Berlin: Dietz Verlag, 1962), Volume 19, p. 359.

[90] Kapital , op. cit., p. 208.

"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

[91] Zur Kritik der Lehre vom Arbeitslohn: Ein volkswirtschaftlicher Versuch (Erlangen: Ferdinand Enke, 1861), p. 45.

[92] Ibid., pp. 47, 54.

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

[93] Ernest Mandel, The Formation of the Economic Thought of Karl Marx (New York: Monthly Review Press, 1971), p. 83; Claudio Napoleoni, Smith Ricardo Marx (Oxford: Basil Blackwell, 1975), p. 99.

[94] Allen Oakley, The Making of Marx's Critical Theory (London: Routledge & Kegan Paul, 1983), p. 65.

[95] Projektgruppe Entwicklung des Marxschen Systems, Der 4. Band des "Kapital"? (Berlin: Verlag für das Studium der Arbeiterbewegung, 1975), pp. vi–vii. Even after publication of the first book of Kapital , Marx still envisaged a separate volume on the history of theory. Roman Rosdolsky, Zur Entstehungsgeschichte des Marxschen "Kapital," Volume One (Frankfurt: Europäische Verlagsanstalt, 1968), p. 27.

[96] Karl Marx and Friedrich Engels, Marx-Engels Werke , Volume 32 (Berlin: Dietz Verlag, 1965), p. 11.

[97] Engels recounts Marx's discovery of the extraction of surplus value in the Preface to the second volume of Kapital. There Engels describes Marx's breakthrough as "a thunderbolt that struck out of a clear blue sky." Das Kapital , op. cit., 1989, p. 21. Marx in 1847 cited Proudhon's contention that only labor's potential has value as a commodity, but he dismissed it as unintelligible. Karl Marx, The Poverty of Philosophy (New York: International Publishers, 1963 [1847]), p. 58.

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

[98] Emphasis added. Letter of Marx to Engels, January 8, 1868, in Karl Marx and Friedrich Engels, Marx-Engels Werke , Volume 32 (Berlin: Dietz Verlag, 1965), p. 11. "This," Marx added, "is actually the whole secret of the critical view."

[99] Grundrisse , op. cit. The remainder were French, American, and Italian.

[100] Karl Marx, Exzerpte und Notizen (Berlin: Dietz Verlag, 1986), pp. 47–55. Johann Heinrich von Thünen, a Prussian author whom Marx indicates he read, approximated Marx's definition of the cost of labor power. Thünen rejected as imprecise the notion that the cost of maintaining the working population determined minimum wage levels. He believed that the cost of reproducing the worker's "capacity to labor" provided a clearer analysis of the determination of various levels of wages. Yet Marx's references to Thünen, as to other German writers, are not intended to clarify the use of labor power in the capitalist labor process. Das Kapital , op. cit., 1980, Volume One, p. 649; Thünen, op. cit., p. 82. Marx also cites Roscher and Rau. Theorien über den Mehrwert (Stuttgart: J. H. W. Dietz, 1919), Volume Three, pp. 219, 224; Marx-Engels Werke , op. cit., Volume 19, p. 367.

[101] Das Kapital , op. cit., 1980, Volume One, pp. 21, 22.

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-

[102] Draft of an article on Friedrich List's book, in Collected Works (London: Lawrence and Wishart, 1975–1978), Volume 4, p. 274. In Kapital Marx offered a more subtle explanation for German backwardness in matters of economic theory. There he claimed that the prior economic development and maturation of class struggle in Britain provided an example to Germany that deprived the German bourgeoisie of an opportunity to pursue economic theory without vulgar defenses of the capitalist order. Kapital , op. cit., 1980, pp. 21–22.

[103] Grundrisse, op. cit., p. 185. He repeats the imprecise reference when he says, "Labor, which is sold to capital as a use value, is a good with exchange value for the worker, which he wants to receive" (p. 214; see also pp. 178, 183).

[104] See, for instance, ibid., p. 566. "As a use value the labor capacity [Arbeitsvermögen ] is realized only in the activity of the labor itself, just in the same way as a bottle of wine, which is purchased, is not realized as a use value until the drinking" (p. 946). "The labor capacity [Arbeitsvermögen ] appears to the free laborer  . . . as his property" (pp. 368–369).

[105] To be sure, Marx, like German economists of his time, does use the plural term Arbeitskräfte , literally, "labor powers," to refer to the supply of workers at large in a society. See, for example, Grundrisse , op. cit., p. 408. But neither the singular nor the plural form is used to explicate the purchase and use of labor at the point of production.

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-

[106] "Umrisse zu einer Kritik der Nationaloekonomie," in Marx/Engels Gesamtausgabe (Berlin: Marx-Engels Verlag, 1930), Series One, Volume Two, pp. 393, 396, 403.

[107] Das Kapital , op. cit., pp. 562, 564.

[108] "Einleitung zu Karl Marx' 'Lohnarbeit und Kapital' (Ausgabe 1891)," in Karl Marx and Friedrich Engels, Marx-Engels Werke , Volume 22 (Berlin: Dietz Verlag, 1963), p. 203; Engels's letter of March 4, 1891 to Adolph Sorge, in Karl Marx and Friedrich Engels, Marx-Engels Werke , Volume 38 (Berlin: Dietz Verlag, 1968), p. 45.

[109] Ernest Mandel shows that Marx's mature theory of exploitation in the capitalist labor process, known so well from Kapital , appears first in the Grundrisse even when Marx clumsily uses the indistinct term labor. Op. cit., p. 84 note. Roman Rosdolsky's analysis of the intellectual genesis of Kapital reaches the same conclusion. Op. cit., p. 230 and Chapter Twelve.

[110] In the Preface to Zur Kritik der politischen Ökonomie , Marx says that he was motivated to examine the play of material interests in historical development in part due to the polemic he started in the Rheinische Zeitung against the condition of the Moselle peasantry. Marx recalled the survival of the use of land in common among peasants near Trier. Cited in Heinz Monz, Karl Marx: Grundlagen der Entwicklung zu Leben und Werk (Trier: NCO-Verlag Neu, 1973), p. 370. "Right in my own neighborhood, on the Hunsrück , the ancient German system survived until just a few years ago." Letter of March, 1868, in Marx and Engels, Marx-Engels Werke , Volume 32 (Berlin: Dietz Verlag, 1974), p. 51.

[111] Marx's unpublished "Economic and Philosophic Manuscripts of 1844" said that in the employment relation "the workers are forced to offer their person and their power  . . . for a price." Marx/Engels Gesamtausgabe , op. cit., Series One, Volume Three, p. 51.

[112] Das Kapital , op. cit., pp. 12–15.

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