Capital, vol. II (Karl Marx)

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Focusing on the circulation of capital and the process of capitalist reproduction, Marx delves into the complexities of capitalist dynamics, exploring topics such as the circuit of capital, the role of credit and finance, and the tendency of the rate of profit to decline

Capital, vol. II
AuthorKarl Marx
First published1885 (posthumous)
SourceMarxists Internet Archive
AudiobookYouTube Playlist


Preface to the First Edition

It was no easy task to put the second book of Capital in shape for publication, and do it in a way that on the one hand would make it a connected and as far as possible complete work, and on the other would represent exclusively the work of its author, not of its editor. The great number of available, mostly fragmentary, texts worked on added to the difficulties of this task. At best one single manuscript (No. IV) had been revised throughout and made ready for press. But the greater part had become obsolete through subsequent revision. The bulk of the material was not finally polished, in point of language, although in substance it was for the greater part fully worked out. The language was that in which Marx used to make his extracts: careless style full of colloquialisms, often containing coarsely humorous expressions and phrases interspersed with English and French technical terms or with whole sentences and even pages of English. Thoughts were jotted down as they developed in the brain of the author. Some parts of the argument would be fully treated, others of equal importance only indicated. Factual material for illustration would be collected, but barely arranged, much less worked out. At conclusions of chapters, in the author’s anxiety to get to the next, there would often be only a few disjointed sentences to mark the further development here left incomplete. And finally there was the well-known handwriting which the author himself was sometimes unable to decipher.

I have contented myself with reproducing these manuscripts as literally as possible, changing the style only in places where Marx would have changed it himself and interpolating explanatory sentences or connecting statements only where this was absolutely necessary, and where, besides, the meaning was clear beyond any doubt. Sentences whose interpretation was susceptible of the slightest doubt were preferably copied word for word. The passages which I have remodelled or interpolated cover barely ten pages in print and concern only matters of form.

The mere enumeration of the manuscript material left by Marx for Book II proves the unparalleled conscientiousness and strict self-criticism with which he endeavoured to elaborate his great economic discoveries to the point of utmost completion before he published them. This self-criticism rarely permitted him to adapt his presentation of the subject, in content as well as in form, to his ever widening horizon, the result of incessant study. The above material consists of the following:

First, a manuscript entitled Zur Kritik der politischen Oekonomie, containing 1,472 quarto pages in 23 notebooks, written in August 1861 to June 1863. It is the continuation of a work of the same title, the first part of which appeared in Berlin, in 1859. It treats, on pages 1-220 (Notebooks I-V) and again on pages 1,159-1,472 (Notebooks XIX-XXIII), of the subjects examined in Book I of Capital, from the transformation of money into capital to the end, and is the first extant draft there of. Pages 973-1,158 (Notebooks XVI-XVIII) deal with capital and profit, rate of profit, merchant’s capital and money-capital, that is to say with subjects which later were developed in the manuscript for Book III. The themes treated in Book II and very many of those which are treated later, in Book III, are not yet arranged separately. They are treated in passing, to be specific, in the section which makes up the main body of the manuscript, viz., pages 220-972 (Notebooks VI-XV), entitled “Theories of Surplus-Value.” This section contains a detailed critical history of the pith and marrow of Political Economy, the theory of surplus-value and develops parallel with it, in polemics against predecessors, most of the points later investigated separately and in their logical connection in the manuscript for Books II and III. After eliminating the numerous passages covered by Books II and III, I intend to publish the critical part of this manuscript as Capital, Book IV. This manuscript, valuable though it is, could be used only very little in the present edition of Book II.

The manuscript chronologically following next is that of Book III. It was written, at least the greater part of it, in 1864 and 1865. Only after this manuscript had been completed in its essential parts did Marx undertake the elaboration of Book I which was published in 1867. I am now getting this manuscript of Book III in shape for press.

The following period — after the publication of Book I — is represented by a collection of four folio manuscripts for Book II, numbered I-IV by Marx himself. Manuscript I (150 pages), presumably written in 1865 or 1867, is the first separate, but more or less fragmentary, elaboration of Book II as now arranged. Here too nothing could be used. Manuscript III is partly a compilation of quotations and references to the notebooks containing Marx’s extracts, most of them relating to Part I of Book II, partly elaborations of particular points, especially a critique of Adam Smith’s propositions on fixed and circulating capital and the source of profit; furthermore an exposition of the relation of the rate of surplus-value to the rate of profit, which belongs in Book III. Little that was new could be garnered from the references, while the elaborations for volumes II and III were superseded by subsequent revisions and had also to be discarded for the greater part.

Manuscript IV is an elaboration, ready for press, of Part I and the first chapters of Part II of Book II, and has been used where suitable. Although it was found that this manuscript had been written earlier than Manuscript II, yet, being far more finished in form, it could be used with advantage for the corresponding part of this book. All that was needed was a few addenda from Manuscript II. The latter is the only somewhat complete elaboration of Book II and dates from the year 1870. The notes for the final editing, which I shall mention immediately, say explicitly: “The second elaboration must be used as the basis.”

There was another intermission after 1870, due mainly to Marx’s ill health. Marx employed this time in his customary way, by studying agronomics, rural relations in America and, especially, Russia, the money-market and banking, and finally natural sciences such as geology and physiology. Independent mathematical studies also figure prominently in the numerous extract notebooks of this period. In the beginning of 1877 he had recovered sufficiently to resume his main work. Dating back to the end of March 1877 there are references and notes from the above-named four manuscripts intended as the basis of a new elaboration of Book II, the beginning of which is represented by Manuscript V (56 folio pages). It comprises the first four chapters and is still little worked out. Essential points are treated in footnotes. The material is rather collected than sifted, but it is the last complete presentation of this, the most important section of Part I.

A first attempt to prepare from it a manuscript ready for press was made in Manuscript VI (after October 1877 and before July 1878), embracing only 17 quarto pages, the greater part of the first chapter. A second and last attempt was made in Manuscript VII, “July 2, 1878,” only 7 folio pages.

About this time Marx seems to have realised that be would never be able to finish the elaboration of the second and third books in a manner satisfactory to himself unless a complete revolution in his health took place. Indeed, manuscripts V-VIII show far too frequent traces of an intense struggle against depressing ill health. The most difficult bit of Part I had been worked over in Manuscript V. The remainder of Part I and all of Part II, with the exception of Chapter XVII, presented no great theoretical difficulties. But Part III, dealing with the reproduction and circulation of social capital, seemed to him to be very much in need of revision; for Manuscript II had first treated reproduction without taking into consideration money-circulation, which is instrumental in effecting it, and then gone over the same question again, but with money-circulation taken into account. This was to be eliminated and the whole part to be reconstructed in such a way as to conform to the author’s enlarged horizon. Thus Manuscript VIII came into existence, a notebook containing only 70 quarto pages. But the vast amount of matter Marx was able to compress into this space is clearly demonstrated on comparing that manuscript with Part III, in print, after leaving out the pieces inserted from Manuscript II.

This manuscript is likewise merely a preliminary treatment of the subject, its main object having been to ascertain and develop the points of view newly acquired in comparison with Manuscript II, with those points ignored about which there was nothing new to say. An essential portion of Chapter XVII, Part II, which anyhow is more or less relevant to Part III, was once more reworked and expanded. The logical sequence is frequently interrupted, the treatment of the subject gappy in places and very fragmentary, especially the conclusion. But what Marx intended to say on the subject is said there, somehow or other.

This is the material for Book II, out of which I was supposed “to make something,” as Marx remarked to his daughter Eleanor shortly before his death. I have construed this task in its narrowest meaning. So far as this was at all possible, I have confined my work to the mere selection of a text from the available variants. I always based my work on the last available edited manuscript, comparing this with the preceding ones. Only the first and third parts offered any real difficulties, i.e., of more than a mere technical nature, and these were indeed considerable. I have endeavoured to solve them exclusively in the spirit of the author.

I have translated quotations in the text whenever they are cited in confirmation of facts or when, as in passages from Adam Smith, the original is available to everyone who wants to go thoroughly into the matter. This was impossible only in Chapter X, because there it is precisely the English text that is criticised. The quotations from Book I are paged according to its second edition, the last one to appear in Marx’s lifetime.

For Book III, only the following materials are available, apart from the first elaboration in manuscript form of Zur Kritik, from the above-mentioned parts of Manuscript III, and from a few occasional short notes scattered through various extract notebooks: The folio manuscript of 1864-65, referred to previously, which is about as fully worked out as Manuscript II of Book II; furthermore, a notebook dated 1875: The Relation of the Rate of Surplus-Value to the Rate of Profit, which treats the subject mathematically (in equations). The preparation of this Book for publication is proceeding rapidly. So far as I am able to judge up to now, it will present mainly technical difficulties, with the exception of a few but very important sections.

I consider this an opportune place to refute a certain charge which has been raised against Marx, first in only whispers, sporadically, but more recently, after his death, proclaimed an established fact by German Socialists of the Chair and of the State and by their hangers-on. It is claimed that Marx plagiarised the work of Rodbertus. I have already stated elsewhere [1] what was most urgent in this regard, but not until now have I been able to adduce conclusive proof.

As far as I know this charge was made for the first time in R. Meyer’s Emancipationskampf des vierten Standes, p. 43:

“It can be proved that Marx has gathered the greater part of his critique from these publications” — meaning the works of Rodbertus dating back to the last half of the thirties.

I may well assume, until further evidence is produced, that the “whole proof” of this assertion consists in Rodbertus having assured Herr Meyer that this was so.

In 1879 Rodbertus himself appears on the scene and writes the following to J. Zeller (Zeitschrift für die gesammte Staatswissenschaft, Tübingen, 1879, p. 219), with reference to his work Zur Erkenntniss unsrer staatswirtschaftlichen Zustände, 1842:

“You will find that this” (the line of thought developed in it) “has been very nicely used ... by Marx, without, however, giving me credit for it.”

The posthumous publisher of Rodbertus’s works, Th. Kozak, repeats his insinuation without further ceremony. (Das Kapital von Rodbertus. Berlin, 1884, Introduction, p. XV.)

Finally in the Briefe und Sozialpolitische Aufsätze von Dr. Rodbertus-Jagetzow, published by R. Meyer in 1881, Rodbertus says point-blank:

“To-day I find I have been robbed by Schäffle and Marx without having my name mentioned.” (Letter No. 60, p..134.)

And in another place, Rodbertus’s claim assumes a more definite form:

“In my third social letter I have shown virtually in the same way as Marx, only more briefly and clearly, what the source of the surplus-value of the capitalist is.” (Letter No. 48, p. 111.)

Marx had never heard anything about any of these charges of plagiarism. In his copy of the Emancipationskampf only that part had been cut open which related to the International. The remaining pages were not opened until I cut them myself after his death. He never looked at the Tübingen Zeitschrift. The Briefe, etc., to R. Meyer likewise remained unknown to him, and I did not learn of the passage referring to the “robbery” until Dr. Meyer himself was good enough to call my attention to it in 1884. However, Marx was familiar with letter No. 48. Dr. Meyer had been so kind as to present the original to the youngest daughter of Marx. When some of the mysterious whispering about the secret source of his criticism having to be sought in Rodbertus reached the ear of Marx, he showed me that letter with the remark that here he had at last authentic information as to what Rodbertus himself claimed; if that was all Rodbertus asserted he, Marx, had no objection, and he could well afford to let Rodbertus enjoy the pleasure of considering his own version the briefer and clearer one. In fact, Marx considered the matter settled by this letter of Rodbertus.

He could so all the more since I know for certain that he was not in the least acquainted with the literary activity of Rodbertus until about 1859, when his own critique of Political Economy had been completed, not only in its fundamental outlines, but also in its more important details. Marx began his economic studies in Paris, in 1843, starting with the great Englishmen and Frenchmen. Of German economists he knew only Rau and List, and he did not want any more of them. Neither Marx nor I heard a word of Rodbertus’s existence until we had to criticise, in the Neue Rheinische Zeitung, 1848, the speeches he made as Berlin Deputy and his actions as Minister. We were both so ignorant that we had to ask the Rhenish deputies who this Rodbertus was that had become a Minister so suddenly. But these deputies too could not tell us anything about the economic writings of Rodbertus. That on the other hand Marx had known very well already at that time, without the help of Rodbertus, not only whence but also how “the surplus-value of the capitalist” came into existence is proved by his Poverty of Philosophy, 1847, and by his lectures on wage-labour and capital, delivered in Brussels the same year and published in Nos. 264-69 of the Neue Rheinische Zeitung, in 1849. It was only in 1859, through Lassalle, that Marx learned of the existence of a certain economist named Rodbertus and thereupon Marx looked up the “third social letter” in the British Museum.

These were the actual circumstances. And now let us see what there is to the content, of which Marx is charged with “robbing” Rodbertus. Says Rodbertus:

“In my third social letter I have shown in the same way as Marx, only more briefly and clearly, what the source of the surplus-value of the capitalist is.”

This, then, is the crux of the matter: The theory of surplus-value. And indeed, it would be difficult to say what else there is in Marx that Rodbertus might claim as his property. Thus Rodbertus declares here he is the real originator of the theory of surplus-value and that Marx robbed him of it.

And what has the third social letter to say in regard to the origin of surplus-value? Simply this: That “rent,” his term which lumps together ground-rent and profit, does not arise from an “addition of value” to the value of a commodity, but

“from a deduction of value from wages; in other words, because wages represent only a part of the value of a product,”

and if labour is sufficiently productive

“wages need not be equal to the natural exchange-value of the product of labour in order to leave enough of this value for the replacing of capital (!) and for rent.”

We are not informed however what sort of a “natural exchange-value” of a product it is that leaves nothing for the “replacing of capital,” consequently, for the replacement of raw material and the wear and tear of tools.

It is our good fortune to be able to state what impression was produced on Marx by this stupendous discovery of Rodbertus. In the manuscript Zur Kritik, notebook X, pp. 445 et seqq. we find a “Digression. Herr Rodbertus. A New Ground-Rent Theory.” This is the only point of view from which Marx there looks upon the third social letter. The Rodbertian theory of surplus-value in general is dismissed with the ironical remark: “Mr. Rodbertus first analyses the slate of affairs in a country where property in land and property in capital are not separated and then arrives at the important conclusion that rent (by which he means the entire surplus-value) is only equal to the unpaid labour or to the quantity of products in which this labour is expressed.”

Capitalistic man has been producing surplus-value for several hundred years and has gradually arrived at the point of pondering over its origin. The view first propounded grew directly out of commercial practice: surplus-value arises out of an addition to the value of the product. This idea was current among the mercantilists. But James Steuart already realised that in that case the one would necessarily lose what the other would gain. Nevertheless, this view persisted for a long time afterwards, especially among the Socialists. But it was thrust out of classical science by Adam Smith.

He says in the Wealth of Nations, Vol. I, Ch. VI:

“As soon as stock has accumulated in the hands of particular persons, some of them will naturally employ it in setting to work industrious people, whom they will supply with materials and subsistence, in order to make a profit by the sale of their work, or by what their labour adds to the value of the materials.... The value which the workmen add to the materials, therefore, resolves itself in this case into two parts, of which the one pays their wages, the other the profits of their employer upon the whole stock of materials and wages which he advanced.”

And a little further on he says:

“As soon as the land of ally country has all become private property, the landlords, like all other men, love to reap where they never sowed, and demand a rent even for its natural produce....” The labourer “...must give up to the landlord a portion of what his labour either collects or produces. This portion, or, what comes to the same thing, the price of this portion, constitutes the rent of land.”

Marx comments on this passage in the above-named manuscript Zur Kritik, etc., p. 253: “Thus Adam Smith conceives surplus-value — that is, surplus-labour, the excess of labour performed and realised in the commodity over and above the paid labour, the labour which has received its equivalent in the wages — as the general category, of which profit in the strict sense and rent of land are merely branches.”

Adam Smith says furthermore (Vol. I, Ch. VIII):

“As soon as land becomes private property, the landlord demands a share of almost all the produce which the labourer can either raise or collect from it. His rent makes the first deduction from the produce of the labour which is employed upon land. It seldom happens that the person who tills the ground has the wherewithal to maintain himself till he reaps the harvest. His maintenance is generally advanced to him from the stock of a master, the farmer who employs him, and who would have no interest to employ him, unless he was to share in the produce of his labour, or unless his stock was to be replaced to him with a profit. This profit makes a second deduction from the produce of the labour which is employed upon land. The produce of almost all other labour is liable to the like deduction of profit. In all arts and manufactures the greater part of the workmen stand in need of a master to advance them the materials of their work, and their wages and maintenance till it be completed. He shares in the produce of their labour, or in the value which it adds to the materials upon which it is bestowed; and in this share consists his profit.”

Marx’s comment (Manuscript, p. 256): “Here therefore Adam Smith in plain terms describes rent and profit on capital as mere deductions from the workman’s product or the value of his product, which is equal to the quantity of labour added by him to the material. This deduction however, as Adam Smith has himself previously explained, can only consist of that part of the labour which the workman adds to the materials, over and above the quantity of labour which only pays his wages, or which only provides an equivalent for his wages; that is, the surplus-labour, the unpaid part of his labour.”

Thus even Adam Smith knew “the source of the surplus-value of the capitalist,” and furthermore also of that of the landlord. Marx acknowledged this as early as 1861, while Rodbertus and the swarming mass of his admirers, who grew like mushrooms under the warm summer showers of state socialism, seem to have forgotten all about that.

“Nevertheless,” Marx continues, “he [Adam Smith] does not distinguish surplus-value as such as a category on its own, distinct from the specific forms it assumes in profit and rent. This is the source of much error and inadequacy in his inquiry, and of even more in the work of Ricardo.”

This statement fits Rodbertus to a T. His “rent” is simply the sum of ground-rent and profit. He builds up an entirely erroneous theory of ground-rent, and he accepts profit without any examination of it, just as he finds it among his predecessors.

Marx’s surplus-value, on the contrary, represents the general form of the sum of values appropriated without any equivalent by the owners of the means of production, and this form splits into the distinct, converted forms of profit and ground-rent in accordance with very peculiar laws which Marx was the first to discover. These laws will be expounded in Book III. We shall see there that many intermediate links are required to arrive from an understanding of surplus-value in general at an understanding of its transformation into profit and ground-rent; in other words at an understanding of the laws of the distribution of surplus-value within the capitalist class.

Ricardo goes considerably further than Adam Smith. He bases his conception of surplus-value on a new theory of value contained in embryo in Adam Smith, but generally forgotten when it comes to applying it. This theory of value became the starting-point of all subsequent economic science. From the determination of the value of commodities by the quantity of labour embodied in them he derives the distribution, between the labourers and capitalists, of the quantity of value added by labour to the raw materials, and the division of this value into wages and profit (i.e., here surplus-value). He shows that the value of the commodities remains the same no matter what may be the proportion of these two parts, a law which he holds has but few exceptions. He even establishes a few fundamental laws, although couched in too general terms, on the mutual relations of wages and surplus-value (taken in the form of profit) (Marx, Das Kapital, Buch I, Kap. XV, A), and shows that ground-rent is a surplus over and above profit, which under certain circumstances does not accrue.

In none of these points did Rodbertus go beyond Ricardo. He either remained wholly unfamiliar with the internal contradictions of the Ricardian theory which caused the downfall of that school, or they only misled him into raising utopian demands (his Zur Erkenntnis, etc., p. 130) instead of inducing him to find economic solutions.

But the Ricardian theory of value and surplus-value did not have to wait for Rodbertus’s Zur Erkenntnis in order to be utilised for socialist purposes. On page 609 of the first volume (Das Kapital, 2nd ed.) we find the following quotation, “The possessors of surplus-produce or capital,” taken from a pamphlet entitled The Source and Remedy of the National Difficulties. A Letter to Lord John Russell, London, 1821. In this pamphlet of 40 pages, the importance of which should have been noted if only on account of the one expression “surplus-produce or capital,” and which Marx saved from falling into oblivion, we read the following statements:

“...whatever may be due to the capitalist” (from the standpoint of the capitalist) “he can only receive the surplus-labour of the labourer; for the labourer must live” (p. 23).

But how the labourer lives and hence how much the surplus-labour appropriated by the capitalist can amount to are very relative things.

“... if capital does not decrease in value as it increases in amount, the capitalists will exact from the labourers the produce of every hour’s labour beyond what it is possible for the labourer to subsist on the capitalist may ... eventually say to the labourer, ‘You shan’t eat bread ... because it is possible to subsist on beet root and potatoes.’ And to this point have we come!” (Pp. 23-24.) “Why, if the labourer can be brought to feed on potatoes instead of bread, it is indisputably true that more can be exacted from his labour; that is to say, if when he fed on bread, he was obliged to retain for the maintenance of himself and family the labour of Monday and Tuesday, he will, on potatoes, require only the half of Monday; and the remaining half of Monday and the whole of Tuesday are available either for the service of the state or the capitalist.” (p. 26.) “It is admitted that the interest paid to the capitalists, whether in the nature of rents, interests on money, or profits of trade, is paid out of the labour of others.” (p. 23.)

Here we have exactly the same idea of “rent” as Rodbertus has, except that “interest” is used instead of “rent.”

Marx makes the following comment (manuscript Zur Kritik, p. 852): “This little known pamphlet — published at a time when the ‘incredible cobbler’ MacCulloch began to be talked about — represents an essential advance over Ricardo. It directly designates surplus-value, or ‘profit’ in the language of Ricardo (often also surplus-produce), or interest, as the author of this pamphlet calls it, as surplus-labour, the labour which the labourer performs gratuitously, which he performs in excess of that quantity of labour by which the value of his labour-power is replaced, i.e., an equivalent of his wages is produced. It was no more important to reduce value to labour than to reduce surplus-value, represented by a surplus-produce, to surplus-labour. This has already been stated by Adam Smith and forms a main factor in Ricardo’s analysis. But they did not say so nor fix it anywhere in absolute form.” We read furthermore, on page 859 of the manuscript: “Moreover, the author is a prisoner of the economic categories as they have come down to him. Just as the confounding of surplus-value and profit misleads Ricardo into unpleasant contradictions, so this author fares no better by baptising surplus-value with the name of ‘interest of capital.’ True, he advances beyond Ricardo by having been the first to reduce all surplus-value to surplus-labour. Furthermore, while calling surplus-value ‘interest of capital,’ he emphasises at the same time that by this term he means the general form of surplus-labour as distinguished from its special forms: rent, interest on money, and profit of enterprise. And yet he picks the name of one of these special forms, interest, for the general form. And this sufficed to cause his relapse into economic slang.”

This last passage fits Rodbertus like a glove. He, too, is a prisoner of the economic categories as they have come down to him. He, too, applies to surplus-value the name of one of its converted sub-forms, rent, and makes it quite indefinite at that. The result of these two mistakes is that he relapses into economic slang, that he does not follow up his advance over Ricardo critically, and that instead he is misled into using his unfinished theory, even before it got rid of its egg-shell, as the basis for a utopia with which, as always, he comes too late. The pamphlet appeared in 1821 and anticipated completely Rodbertus’s “rent” of 1842.

Our pamphlet is but the farthest outpost of an entire literature which in the twenties turned the Ricardian theory of value and surplus-value against capitalist production in the interest of the proletariat, fought the bourgeoisie with its own weapons. The entire communism of Owen, so far as it engages in polemics on economic questions, is based on Ricardo. Apart from him, there are still numerous other writers, some of whom Marx quoted as early as 1847 against Proudhon (Misère de la Philosophie, p. 49), such as Edmonds, Thompson, Hodgskin, etc., etc., “and four more pages of etceteras.” I select the following at random from among this multitude of writings: An Inquiry into the Principles of the Distribution of Wealth, Most Conducive to Human Happiness, by William Thompson; a new edition, London, 1850. This work, written in 1822, first appeared in 1824. Here likewise the wealth appropriated by the non-producing classes is described everywhere as a deduction from the product of the labourer and rather strong words are used. The author says:

“The constant effort of what has been called society, has been to deceive and induce, to terrify and compel, the productive labourer to work for the smallest possible portion of the produce of his own labour” (P. 28). “Why not give him the whole absolute produce of his labour?” (P. 32.) “This amount of compensation, exacted by capitalists from the productive labourers, under the name of rent or profits, is claimed for the use of land or other articles... For all the physical materials on which, or by means of which, his productive powers can be made available, being in the hands of others with interests opposed to his, and their consent being a necessary preliminary to any exertion on his part, is he not, and must he not always remain, at the mercy of these capitalists for whatever portion of the fruits of his own labour they may think proper to leave at his disposal in compensation for his toils?” (p. 125.) “... in proportion to the amount of products withheld, whether called profits, or taxes, or theft” (p. 126), etc.

I must admit that I do not write these lines without a certain mortification. I will not make so much of the fact that the anti-capitalist literature of England of the twenties and thirties is so totally unknown in Germany, in spite of Marx’s direct references to it even in his Poverty of Philosophy, and his repeated quotations from it, as for instance the pamphlet of 1821, Ravenstone, Hodgskin, etc., in Volume I of Capital. But it is proof of the grave deterioration of official Political Economy that not only the Literatus vulgaris, who clings desperately to the coattails of Rodbertus and “really has not learned anything,” but also the officially and ceremoniously installed professor, who “boasts of his erudition,” has forgotten his classical Political Economy to such an extent that he seriously charges Marx with having purloined things from Rodbertus which may be found even in Adam Smith and Ricardo.

But what is there new in Marx’s utterances on surplus-value? How is it that Marx’s theory of surplus-value struck home like a thunderbolt out of a clear sky, and that in all civilised countries, while the theories of all his socialist predecessors, Rodbertus included, vanished without having produced any effect?

The history of chemistry offers an illustration which explains this.

We know that late in the past century the phlogistic theory still prevailed. It assumed that combustion consisted essentially in this: that a certain hypothetical substance, an absolute combustible named phlogiston, separated from the burning body. This theory sufficed to explain most of the chemical phenomena then known, although it had to be considerably strained in some cases. But in 1774 Priestley produced a certain kind of air

“which he found to be so pure, or so free from phlogiston, that common air seemed adulterated in comparison with it.”

He called it “dephlogisticated air.” Shortly after him Scheele obtained the same kind of air in Sweden and demonstrated its existence in the atmosphere. He also found that this kind of air disappeared whenever some body was burned in it or in ordinary air and therefore he called it “fire-air.”

“From these facts he drew the conclusion that the combination arising from the union of phlogiston with one of the components of the atmosphere” (that is to say, from combustion) “was nothing but fire or heat which escaped through the glass.” [2]

Priestley and Scheele had produced oxygen without knowing what they had laid their hands on. They “remained prisoners of the” phlogistic “categories as they came down to them.” The element which was destined to upset all phlogistic views and to revolutionise chemistry remained barren in their hands. But Priestley had immediately communicated his discovery to Lavoisier in Paris, and Lavoisier, by means of this discovery, now analysed the entire phlogistic chemistry and came to the conclusion that this new kind of air was a new chemical element, and that combustion was not a case of the mysterious phlogiston departing from the burning body, but of this new element combining with that body. Thus he was the first to place all chemistry, which in its phlogistic form had stood on its head, squarely on its feet. And although he did not produce oxygen simultaneously and independently of the other two, as he claimed later on, he nevertheless is the real discoverer of oxygen vis-à-vis the others who had only produced it without knowing what they had produced.

Marx stands in the same relation to his predecessors in the theory of surplus-value as Lavoisier stood to Priestley and Scheele. The existence of that part of the value of products which we now call surplus-value had been ascertained long before Marx. It had also been stated with more or less precision what it consisted of, namely, of the product of the labour for which its appropriator had not given any equivalent. But one did not get any further. Some — the classical bourgeois economists — investigated at most the proportion in which the product of labour was divided between the labourer and the owner of the means of production. Others — the Socialists — found that this division was unjust and looked for utopian means of abolishing this injustice. They all remained prisoners of the economic categories as they had come down to them.

Now Marx appeared upon the scene. And he took a view directly opposite to that of all his predecessors. What they had regarded as a solution, he considered but a problem. He saw that he had to deal neither with dephlogisticated air nor with fire-air, but with oxygen — that here it was not simply a matter of stating an economic fact or of pointing out the conflict between this fact and eternal justice and true morality, but of explaining a fact which was destined to revolutionise all economics, and which offered to him who knew how to use it the key to an understanding of all capitalist production. With this fact as his starting-point he examined all the economic categories which he found at hand, just as Lavoisier proceeding from oxygen had examined the categories of phlogistic chemistry which he found at hand. In order to understand what surplus-value was, Marx had to find out what value was. He had to criticise above all the Ricardian theory of value. Hence he analysed labour’s value-producing property and was the first to ascertain what labour it was that produced value, and why and how it did so. He found that value was nothing but congealed labour of this kind, and this is a point which Rodbertus never grasped to his dying day. Marx then investigated the relation of commodities to money and demonstrated how and why, thanks to the property of value immanent in commodities, commodities and commodity-exchange must engender the opposition of commodity and money. His theory of money, founded on this basis, is the first exhaustive one and has been tacitly accepted everywhere. He analysed the transformation of money into capital and demonstrated that this transformation is based on the purchase and sale of labour-power. By substituting labour-power, the value-producing property, for labour he solved with one stroke one of the difficulties which brought about the downfall of the Ricardian school, viz., the impossibility of harmonising the mutual exchange of capital and labour with the Ricardian law that value is determined by labour. By establishing the distinction of capital into constant and variable he was enabled to trace the real course of the process of the formation of surplus-value in its minutest details and thus to explain it, a feat which none of his predecessors had accomplished. Consequently he established a distinction inside of capital itself with which neither Rodbertus nor the bourgeois economists knew in the least what to do, but which furnishes the key for the solution of the most complicated economic problems, as is strikingly proved again by Book II and will be proved still more by Book III. He analysed surplus-value further and found its two forms, absolute and relative surplus-value. And he showed that they had played a different, and each time a decisive role, in the historical development of capitalist production. On the basis of this surplus-value he developed the first rational theory of wages we have, and for the first time drew up an outline of the history of capitalist accumulation and an exposition of its historical tendency.

And Rodbertus? After he has read all that, he — like the tendentious economist he always is — regards it as “an assault on society,” finds that he himself has said much more briefly and clearly what surplus-value evolves from, and finally declares that all this does indeed apply to “the present form of capital,” that is to say to capital as it exists historically, but not to the “conception of capital,” namely the utopian idea which Herr Rodbertus has of capital. Just like old Priestly, who swore by phlogiston to the end of his days and refused to have anything to do with oxygen. The only thing is that Priestly had actually produced oxygen first, while Rodbertus had merely rediscovered a commonplace in his surplus-value, or rather his “rent,” and that Marx, unlike Lavoisier, disdained to claim that he was the first to discover the fact of the existence of surplus-value.

The other economic feats performed by Rodbertus are on about the same plane. His elaboration of surplus-value into a utopia has already been unintentionally criticised by Marx in his Poverty of Philosophy. What else may be said about it I have said in my preface to the German edition of that work. Rodbertus’s explanation of commercial crises as outgrowths of the underconsumption of the working-class may already be found in Sismondi’s Nouveaux Principes de l’Économie Politique, Book IV, Ch. IV. [3] However, Sismondi always had the world-market in mind, while Rodbertus’s horizon does not extend beyond the Prussian border. His speculations as to whether wages are derived from capital or income belong to the domain of scholasticism and are definitely settled in Part III of this second book of Capital. His theory of rent has remained his exclusive property and may rest in peace until the manuscript of Marx criticising it is published. Finally his suggestions for the emancipation of the old Prussian landed property from the oppression of capital are also entirely utopian; for they evade the only practical question raised in this connection, viz.: How can the old Prussian landed junker have a yearly income of, say, 20,000 marks and a yearly expenditure of, say, 30,000 marks, without running into debt?

The Ricardian school suffered shipwreck about the year 1830 on the rock of surplus-value. And what this school could not solve remained still more insoluble for its successor, Vulgar Economy. The two points which caused its failure were these:

1. Labour is the measure of value. However, living labour in its exchange with capital has a lower value than materialised labour for which it is exchanged. Wages, the value of a definite quantity of living labour, are always less than the value of the product begotten by this same quantity of living labour or in which this quantity is embodied. The question is indeed insoluble, if put in this form. It has been correctly formulated by Marx and thereby been answered. It is not labour which has a value. As an activity which creates values it can no more have any special value than gravity can have any special weight, heat any special temperature, electricity any special strength of current. It is not labour which is bought and sold as a commodity, but labour-power. As soon as labour-power becomes a commodity, its value is determined by the labour embodied in this commodity as a social product. This value is equal to the labour socially necessary for the production and reproduction of this commodity. Hence the purchase and sale of labour-power on the basis of its value thus defined does not at all contradict the economic law of value.

2. According to the Ricardian law of value, two capitals employing equal quantities of equally paid living labour all other conditions being equal, produce commodities of equal value and likewise surplus-value, or profit, of equal quantity in equal periods of time. But if they employ unequal quantities of living labour, they cannot produce equal surplus-values, or, as the Ricardians say, equal profits. Now in reality the opposite takes place. In actual fact, equal capitals, regardless of how much or how little living labour is employed by them, produce equal average profits in equal times. Here there is therefore a contradiction of the law of value which had been noticed by Ricardo himself, but which his school also was unable to reconcile. Rodbertus likewise could not but note this contradiction. But instead of resolving it, he made it one of the starting-points of his utopia. (Zur Erkenntnis, p. 131.) Marx had resolved this contradiction already in the manuscript of his Zur Kritik. According to the plan of Capital, this solution will be provided in Book III. Months will pass before that will be published. Hence those economists who claim to have discovered in Rodbertus the secret source and a superior predecessor of Marx have now an opportunity to demonstrate what the economics of a Rodbertus can accomplish. If they can show in which way an equal average rate of profit can and must come about, not only without a violation of the law of value, but on the very basis of it, I am willing to discuss the matter further with them. In the meantime they had better make haste. The brilliant investigations of the present Book II and their entirely new results in fields hitherto almost untrod are merely introductory to the contents of Book III, which develops the final conclusions of Marx’s analysis of the process of social reproduction on a capitalist basis. When this Book III appears, little mention will be made of the economist called Rodbertus.

The second and third books of Capital were to be dedicated as Marx had stated repeatedly, to his wife.

Frederick Engels

London, on Marx’s birthday, May 5, 1885

Preface to the Second Edition