Cyril Smith 1997

Friedrich Engels and Marx’s critique of political economy

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First Published: in Capital & Class No. 62 (Summer 1997): 123-142 ISSN: 0309-8168 Number: 03846996 Copyright: Copyright Conference of Socialist Economists 1997.

Engels’ Outlines of a Critique of Political Economy (1843) was the starting point for the major work of Marx for the next four decades, and yet in all of his later writings purporting to represent Marx’s views, Engels never gets to grips with those aspects which Marx himself regarded as essential. Since Engels’ writings have had such an influence on late readings of Capital, acknowledging this can help us to see what Marx was trying to do.

IT HAS OFTEN BEEN ALLEGED that Friedrich Engels played a major role in falsifying the ideas of Karl Marx.[1] Just as often, the accusation has been denied. Usually the dispute has centred on the questions of ‘dialectics of nature’, and ‘the materialist conception of history’. This article will not discuss these matters directly, but will focus on the way Engels understood Marx’s attitude towards political economy.

Several authors have discussed this topic, examining the agreements and differences of Marx and Engels on questions of method, of dialectic, of their attitude to Hegel and of the relation between logical and historical development. Conclusions drawn range from the complete identification of Marx and Engels,[2] to the accusation that Engels deliberately deceived his readers about Marx’s thought.[3] In a recent paper, Chris Arthur (1996) has carefully reviewed this literature.

I believe that the reason for these controversies is not so much the different ways in which Engels’ own work has been interpreted, but that the Marxist tradition has fundamentally misunderstood what Marx was trying to do in his life-long critique of political economy. I shall argue that, even after all these years, Marx’s fundamental insights have not really been grasped, and that, despite all his devotion to Marx’s chief work, this misunderstanding actually begins with Engels himself.

Marx’s critique of political economy was not a proposal for a new, ‘socialist economics’ – for Marx, socialism implied the withering away of economics. Nor was it a ‘critique of capitalism’. I think that ‘criticising’ a social order is a bit like criticising the weather. (As Mark Twain complained, everybody grumbles, but nobody seems to do anything about it.) In any case, Marx never used the word ‘capitalism’.

As he explained, his critique is directed primarily against the categories of political economy, that is, against economics as such:

The work we are discussing is a Critique of Economic Categories or, if you like, the system of bourgeois economy in a critical description. (Marx to Lassalle 22/2/1858 in Marx and Engels, 1983: 51).

(When Marx spoke of ‘the system of bourgeois economy’, he always meant the science of political economy.)

For Marx, classical political economy, utopian socialism and the Hegelian system represented the attempts of the greatest bourgeois thinkers to grasp the nature of modern society. Their categories and methods of thought gave the highest theoretical expression to the contradictions of bourgeois social relations. Essentially, all of these contradictions, including the struggle between capital and the proletariat, express a more fundamental one: that between humanity-self-creation, selfconsciousness, sociality-and inhumanity-whatever blocks and perverts these. What economics took for granted as ‘natural’ and ‘rational’, Marx saw as the inhuman and irrational shell inside which human life was imprisoned. Marx’s critique is inseparable from its struggle to smash this shell.

Marx characterised the ‘classical political economists’ as those who, ‘since the time of W Petty have examined the real internal framework [innern Zusammenhang = inner coherence] of bourgeois relations of production’ (Marx, 1976 Vol.I/l: 174-5). As he wrote in a well-known letter:

Once insight into the connectedness has been gained, all theoretical belief in the permanent necessity of existing conditions collapses before the practical collapse. (Marx to Kugelmann 11/7/1868, in Marx and Engels, 1983:149).

But we all live inside these relations, so how can we get hold of this ‘insight into connectedness’? The critique of political economy was Marx’s answer to this question.

There was only one standpoint from which this critique could be made, that of ‘human society and social humanity’. Political economy could not grasp the true nature of society, because its standpoint was ‘contemplative materialism’, ‘the contemplation of single individuals in civil society.’ (Marx and Engels, 1975 Vol.V Theses on Feuerbach: 5). In examining the work of the classical political economists, Marx was investigating a social illness. It was like his attitude to religion: it could not be cured by correcting some logical errors, but only by overthrowing the social order whose contradictions they expressed. His critique opened the way for ‘revolutionary practice’, in which ‘human activity or self-change’ could be seen to coincide with ‘the changing of circumstances’ (ibid.).

The Marxist tradition convinced itself that Marx was a ‘dialectical materialist’. (He himself never actually used such a phrase.) However it is interpreted, I no longer think that this formula can be made to fit Marx’s revolutionary view of social development. You could not understand a way of life separately from those forms of consciousness which hold it all together, which arise from that form of society and make it appear ‘natural’ to those who live in it. The greatest philosophers and political thinkers tried to systematise this ordinary consciousness. That was how political economy, when it was still a science, studied the heart of the capital relation, its ‘inner coherence’, and that was why Marx spent forty years on its critique.

Political economy took the upside-down forms within which the inhumanity of bourgeois relations seemed ‘natural’ to ordinary consciousness, and tried to make them into a coherent system. But because these forms were essentially a denial of humanity, this attempt could not succeed. Just as the exchange relation itself was crazy [verruckt],[4] so were the categories of the very best political economy. (‘Vulgar economists’ were absolutely no use for Marx’s purposes.) Through the essential inconsistencies in this science, Marx sought to reveal the contradictions of those social forms. The critique of this bourgeois science thus showed that the ‘integument’ could be broken through by the socialist revolution, to open the way for a life ‘worthy of our human nature’ (Marx, 1978 Vol.III: 959).

Adam Smith and David Ricardo thought they had discovered the way that the labour of free individuals determined the relative prices at which they exchanged the products of their labour, and thus governed the relations between them. Marx took these categories, like value and labour, apart. He found the basis of all the oppression and exploitation of his time-and ours-in fragmented social relations governed by the exchange of private property. In opposition to the political economists, Marx investigated value, not as mere quantity, but as an interconnected series of forms, whose content was the alienated, inhuman relations between human beings.

Whether 20 yards of linen = 1 coat, or = 20 coats or = x coats... it is always implied ... that the linen and the coat as magnitudes of value, are ... things of the same nature. Linen = coat is the basis of the equation. (Marx, 1978 Vol.l: 141).

This was the foundation of the money form, which all economists assume as ‘natural’, something ‘everybody knows’, and which Marx derived as part of a series of mystifying social shapes.

For Smith and Ricardo, labour was a simple thing to grasp. Marx, however, showed how, when it produced a commodity for sale on the market, labour had a two-fold character. It was concrete and abstract at the same time. Labour was concrete in so far as it created objects of use, but in creating values it was abstract, impersonal, inhuman. That is why-and this idea eluded even Ricardo-it was expressed as pure quantity, as labour-time. Then Marx could go on to distinguish between the activity, labour, and the commodity, labour-power.

Value, an ‘unsubstantial reality’, was a relation between producers whose lives were linked only by the exchange of the products of their labour. This link simultaneously separated them as if they were isolated, abstract human atoms. The lives of abstract individuals were governed by these objects, not the objects by their humanity.

In the misty realms of religion, the products of the human brain appear as autonomous figures.... So it is in the world of commodities with the products of men’s hands. (ibid: 165).

Now we must ask to what extent did Engels see what Marx was about? As is well known, it was Engels who pointed the way for Marx’s study of political economy, even before their lifelong collaboration had begun. This was late in 1843, when he sent Marx his Outlines of a Critique of Political Economy for publication in the first and only issue of the journal Deutsch-Französische Jahrbücher.[5] It began like this:

Political economy came into being as a natural result of the expansion of trade, and with its appearance elementary, unscientific huckstering was replaced by a developed system of licensed fraud, an entire science of enrichment. This political economy or science of enrichment born of the merchants’ mutual envy and greed, bears on its brow the mark of the most detestable selfishness. (Marx and Engels, 1975 Vol.3: 418).

Forty years later, Engels wrote, in Anti-Dühring:

Political economy, in the widest sense, is the science of the laws governing the production and exchange of the material means of subsistence in human society. (Engels, 1959: 203).

The opposition between these two statements is striking.

In 1843, Engels’ dazzling article had sketched many of the themes which Marx elaborated in the course of the next four decades. For example, this was the first time anyone had divined the profound relation between economics and religion, so vital for Marx’s later work:

The mercantile system still had a certain artless Catholic candour and did not in the least conceal the immoral nature of trade.... Public opinion had not yet become humanised. Why, therefore, conceal things which resulted from the inhuman, hostile nature of trade itself? But when the economic Luther, Adam Smith, criticised past economics things had changed considerably. ... Protestant hypocrisy took the place of Catholic candour. (ibid: 422).

The antitheses between use-value and exchange-value, and between value and price, are presented with the same aggression: The economist who lives by antitheses has also of course a double value-abstract or real value and exchange-value. (ibid: 424).

The so-called equivalent is the price of the thing, and if the economist were honest, he would employ this term for ‘value in exchange’. But he still has to keep up some sort of pretence that price is somehow bound up with value, lest the immorality of trade become too obvious. (ibid: 427).

Engels’ treatments of labour and of rent contain the germs of Marx’s later work on these topics. His scathing comments on Malthus’ theory of population were many times echoed by Marx:

Am I to go on any longer elaborating this vile, infamous theory, this hideous blasphemy against nature and mankind? ... Here at last we have the immorality of the economist brought to its highest pitch. (ibid: 437).

Speaking of the conflict between the mercantile system and ‘modern economics’, Engels declares:

only that view which rises above the opposition of the two systems, which criticises the premises common to them both and proceeds from a purely human, universal basis, can assign to both their proper position. (ibid: 421).

Marx never ceased to admire this brilliant work. In 1843, he wrote a summary of the article for himself (ibid: 375-6). He soon embarked on his own study of political economy, which absorbed the greater part of his time and energy for the rest of his life. In 1859, tracing the course of these studies, Marx made special mention of Engels’ ‘brilliant essay on the critique of economic categories’ (Marx, 1971: 22). In Capital, Volume I, he quotes from it five times.[6]

Early in 1844, Marx read James Mill’s Elements of Political Economy, and his comments show how he developed the ideas of Engels’ Outlines:

It is seen that political economy defines the estranged form of social intercourse as the essential and original form corresponding to man’s nature. Political economy-like the real process-starts out from the relation of man to man as that of property owner to property owner. (Marx and Engels, 1975 Vol.3: 217).

The Manuscripts which Marx worked on during 1844 took these ideas further:

Political economy knows the worker only as a working animal – as a beast reduced to the strictest bodily needs. (ibid: 242). Political economy starts with the fact of private property; it does not explain it to us. (ibid: 270).

Estrangement is manifested not only in the fact that my means of life belong to someone else, that what I desire is the inaccessible possession of another, but also in the fact that everything is itself something different from itself-that my activity is something else, and that finally (and this applies also to the capitalist), all is under the sway of inhuman power. (ibid: 314).

So Marx’s collaboration with Engels was founded upon the critical assessment of economic science-that is, not just the work of this or that economist but the idea of political economy as such. In the summer of 1844, when they had both settled in Paris, their first joint work began. One of the tasks of The Holy Family, or Critique of Critical Criticism. Against Bruno Bauer and Co is simultaneously to defend Proudhon against his Young Hegelian critics, and to criticise the inadequacy of his attitude to political economy. Many passages recall Engels’ Outlines. For example:

As the criticism of any science is necessarily influenced by the premises of the science it is fighting against, so Proudhon’s treatise Qu’est-ce que la propriete? is the criticism of political economy from the standpoint of political economy. ... Proudhon’s treatise will therefore be scientifically superseded by a criticism of political economy, including Proudhon’s conception of political economy. This work became possible only owing to the work of Proudhon himself... All treatises on political economy take private property for granted. (Marx and Engels, 1975 Vol.IV: 31-2).

Accepting the relationships of private property as human and rational, political economy operates in permanent contradiction to its basic premise, private property, a contradiction analogous to that of the theologian who continually gives a human interpretation to religious conceptions, and by that very fact comes into constant conflict with his basic premise, the superhuman character of religion. (ibid.).

The economic crisis of 1857 drove Marx into frenzied work on his critique. His letters to Engels describe his excitement at the discoveries he was making. In return, Engels sent him accounts of the effects of the crisis in Manchester, as well as many vital explanations of current commercial and industrial practice. By April 1858, Marx could send to Manchester a short summary of the first part of his work. Engels’ reply shows what changes fourteen years had brought in his thinking:

I have been very busy studying the abstract of the first half booklet, for it is a very abstract abstract indeed, as cannot be avoided in a short space, and I often followed the dialectical transitions with difficulty, since I have become most unused to any abstract reasoning. (Engels to Marx, 9/4/1858, in Marx and Engels, 1983: 61).

At no time did Engels comment on the discoveries which Marx regarded as his most fundamental.

When A Contribution to the Critique of Political Economy appeared in 1859, Engels wrote a review for Das Volk, Part II of which talks about Marx’s ‘method’ and its relation to that of Hegel.

The purpose of a work like the one under review cannot simply be desultory criticism of separate sections of political economy or the discussion of one or another economic issue in isolation. On the contrary, it is from the beginning designed to give a systematic resume of the whole complex of political economy and a coherent elaboration of the laws governing bourgeois production and bourgeois exchange. This elaboration is at the same time a comprehensive critique of economic literature, for economists are nothing but interpreters of and apologists for these laws. (Marx, 1971: 222).

Does this really explain the meaning of ‘critique’? I don’t think so.

Engels proceeds to condemn the inanities of Hegel’s successors, and to eulogise Hegel himself. But, beyond a statement about ‘the exceptional historical sense underlying Hegel’s manner of reasoning’, he never attempts to give any account of what Hegel was trying to do. He states that Marx had made a critique of ‘the Hegelian method’. He commends Marx’s employment of the ‘dialectical method’ in a new, materialist, form-but does not say why he did it. He then comes as close as he ever did to the idea which Marx was to call ‘the fetishism of commodities’:

Here is at once an example of a peculiar fact, which pervades the whole economy, and has produced serious confusion in the minds of bourgeois economists-economics is not concerned with things, but with relations between persons, and in the final instance, between classes; these relations however are always bound to things and appear as things. Although a few economists had an inkling of this connection in isolated instances, Marx was the first to reveal its significance for the entire economy thus making the most difficult problems so simple and dear that even bourgeois economists will now be able to grasp them. (ibid: 226).

(Read after almost a century and a half, this last phrase now seems a little optimistic.)

Of course, whatever his difficulties in grasping what Marx was doing, Engels was far closer to this understanding than anyone else. For instance, Marx reported to his friend that ‘Herr Liebknecht explained to Biskamp that “no book had ever disappointed him so much,” and Biskamp himself told me he could not see “what it was for.”’ (Marx to Engels 22/7/1859, in Marx and Engels, 1983: 69).

As Marx began work on what was to be Volume I of Capital, every step of the road is reported in the correspondence between London and Manchester. But the division of labour between them is most marked. Marx requested his friend’s help on detailed examples about the treatment of industrial workers, about the introduction of spinning machines, about the way that new machines are paid for in capitalist manufacture and on his opinion of Quesnay’s Tableau Economique. But Engels’ replies never seem to touch on the fundamental issues.

As he sent back the page-proofs, Engels was sometimes critical of Marx’s way of presenting his results.

Sheet 2 seems to contain a somewhat noticeable hint of carbuncles; but that cannot be changed now, and I do not think that you should do anything about it in the addenda, for the philistines are in any case not used to this form of abstract thought, and will certainly not allow the form of value to torment them. At most, the knowledge gained here could be supported by more historical examples, to make the test of history on it, so to speak, although you have already said the necessary; but you have so much material on this that you could certainly write a good appendix to give the philistines proof, by historical means, of the necessity of the formation of money and the complementary processes. (Engels to Marx 16/6/1867, in Marx and Engels, 1983: 103).

I shall return later to Engels’ ideas about ‘proof by historical means’. Here I just want to point out how he pushed Marx towards playing down his hard-won theoretical conquests in favour of more ‘accessible’ results. A letter from Marx to Engels shows the effect this had on Chapter 1 of Capital:

As for the exposition of the form of value, I have followed your advice and also not followed it in order to behave dialectically here as well. That is: I have 1.) written an appendix in which I present the same question as simply as possible and as pedagogically as possible, and 2). divided every statement of the argument into sections etc., with separate headings, as you suggested. ...The question is too decisive in the context of the whole book. (Marx to Engels 22/6/1867, in Marx and Engels, 1983:104).

In his letter of June 27, Marx gives Engels a summary of this appendix, ‘The Form of Value’, as it was to appear in the First Edition. When Marx came to prepare the French Edition, and the Second German Edition of 1873, he restored something like the original shape of Chapter 1, Section 3, but he also made major changes. In the First Edition, the appendix expounds four ‘peculiarities of the equivalent form’, the fourth of these being that ‘the fetishism of the commodity-form is more striking in the equivalent form than in the relative form’. In its later version, the re-united Chapter 1 contains an entire Section 4, entitled ‘The Fetish-character of the Commodity and its Secret’.

There is a long tradition of evading the difficult issues embodied in Chapter 1 of Capital, the very material to which Marx devoted so much effort, and which he described as ‘decisive’. That is how people came, in direct opposition to Marx’s aims, to talk and write about something they called ‘Marxian economics’, founded on ‘Marx’s labour theory of value’. Engels’ misunderstandings played a large part in this distortion.

Chapter 1 introduces three ideas, on which, Marx told Engels, the whole of his work rests:

1) the two-fold character of labour;

2) the development of the forms of value;

3) the fetish-character of the commodity.

Remarkably, Engels hardly seems to have referred to any of them, ever. As far as I can discover, all of Engels’ many subsequent writings on political economy, including his published works and his correspondence, were devoted either to the question of the origin of surplus value, to the quantitative determination of price, or to technical descriptions of the workings of capital.

But how, without Marx’s critical account of value, is it possible to grasp surplus value? What is the meaning of the labour/labour-power distinction, without the twofold character of labour? Without the notion of abstract labour forming the substance of value, the nature of the universal equivalent, money, its power in bourgeois society, and its transformation into capital, remain mysteries. Without seeing how the forms of value arise ‘behind the backs’ of the individuals of bourgeois society, we remain in the grip of the false understanding of money as eternally necessary. Unless the fetish-character of commodity and money are clear, the transformation of money into capital, and the ways that humans are treated as if they were things and things as subjects, are incomprehensible.

The ideas of Chapter 1 contain the essential foundation for Marx’s conviction that the production and exchange of property could be separated, that is, that a truly human society was possible. The concept of fetishism underlies every part of Capital. It is especially important in grasping categories like constant and variable capital, or absolute and relative surplus value. Volume III includes several uses of the idea and the term. For example, in Chapter 24: ‘In interest-bearing capital, the capital relationship reaches its most superficial and fetishised form’ (Marx, 1978 Vol.III: 515). And the end of Volume III, Part VII, is entirely concerned with the fetishised thinking of the capitalist and his spokesperson, the vulgar economist.

Soon after its publication, Engels began, at Marx’s behest, to prepare a synopsis of Volume I of Capital (Engels, 1956). (He appears to have given up after the Chapter on machinery.) Of its forty-five pages, just two are devoted to Chapter 1. Of these, one paragraph states the distinction between abstract and concrete labour, without comment; the forms of value get a few schematic paragraphs; fetishism receives a single bald sentence.

Fetishism (belief in a supernatural power of objects): a commodity does not seem to become money only because the other commodities all express their values in it, but conversely, they seem to express their values in it because it is money. (ibid: 54).

Engels’ reviews of Capital, written in the same period, concentrate entirely on the origin of surplus value as ‘unpaid labour’.

The most important of Engels’ writings on political economy are the chapters of Anti-Dühring devoted to the subject, that is, Part II. (We can exclude Chapter X, From the Critical History: that was contributed by Marx.) Again, Engels concentrates on expounding what he thought was Marx’s notion of surplus value. We have already quoted the beginning of this Section, about ‘the science of the laws governing the production and exchange of the material means of subsistence in human society.’ A few pages later, Engels admits that political economy, however, as the science of the conditions and forms under which the various human societies have produced and exchanged and on this basis have distributed their products-political economy in this wider sense has still to be brought into being. Such economic science as we possess up to the present is limited almost exclusively to the genesis and development of the capitalist mode of production. (Engels, 1959: 207-8).

What has such a theoretical science of ‘production and exchange’ got to do with Marx’s critique of political economy? If you start by viewing bourgeois political economy as an instance of a wider science of human economic life in general, you end up with the illusion that Marx was also contributing to such a science. As Marx stressed: ‘When we speak of production, we always have in mind production at a definite stage of social development, production by social individuals’ (Marx and Engels,1975: 23).

It is also important to note the way that Engels keeps referring to ‘production and exchange’, as if they formed a single concept. Of course, he knows that ‘production and exchange are two different functions. Production may occur without exchange...’ But his ideal ‘science of the laws governing production and exchange’ considers them as a unit. Yet Marx’s notion of communism is founded on discovering within bourgeois society the human potential for production without the exchange of privately-owned products.

Engels returns to political-economic matters near the end of Anti-Dühring, (Part III, ‘Socialism’, Chapter IV, ‘Distribution’). Here, he briefly recapitulates the ideas of value and use-value, the development of money and the distinction between labour and labour-power. However, none of this is connected with a critique of political economy. There is no doubt that, for supporters and critics of Marx alike, these passages in Anti-Dühring have remained a major source of interpretation of Capital, on a level with Engels’ Preface to Volume III.

After Marx died in 1883, Engels’ main task, on which he spent the rest of his life, was the preparation of Marx’s manuscripts for publication as Volumes II and III of Capital. He also brought out the Third Edition of Volume I, (1883), an English translation (1886) and the Fourth Edition (1890).

When Volume II appeared in 1885, Engels devoted most of the Preface to a defence of Marx against the accusation that he had plagiarised the work of JK Rodbertus. In the previous year, Engels had contributed a Preface to a German edition of The Poverty of Philosophy, covering similar material. In 1891, Engels issued a German edition of Wage-Labour and Capital. He devoted the Preface almost entirely to the distinction between labour and labour power, and amended the text of the pamphlet itself to take account of Marx’s later terminology on this point. There is no mention of the twofold character of labour, the forms of value or of fetishism.

Volume III was not completed until 1894. The delay was partly due to Engels’ failing eyesight, but also to the need to add a great deal of material of his own. Despite the richness of the content of Volume III, Engels’ Preface is all about the socalled ‘transformation problem’: how can you derive prices of production from values, in such a way that different capitals would yield the same rate of profit, even when their ratios of constant to variable capital differed. It helped to focus the reader’s attention on the purely quantitative aspects of Marx’s work, rather than on its critical, that is, its communist core. Since then, of course, the topic has been almost entirely obscured under a blanket of algebra and (fairly elementary) calculus. In this Preface, as part of the reason for the long delay in publication of Volume III, Engels mentions his responsibility for the English translation of Volume I. This translation, carried out by Sam Moore and Edward Aveling, is appalling, sometimes stating the direct opposite of what Marx had intended. Later ‘new’ translations often faithfully reproduce the errors of that first one.

I give one example. At a crucial point in the discussion of the forms of value in Chapter 1, Section 3, Marx summarises the three ‘peculiarities of the equivalent form’. The third of these is that

private labour becomes the form of its exact opposite, immediately social labour. [Privatarbeit zur Form ihres Gegenteils wird, zu Arbeit in unmittlebar gesellschaftlicher Form. (Karl Marx, Werke, Band 23: 73.)]

This appears in all English translations of Capital as

private labour takes the form of its opposite, labour in its directly social form. (Fowkes translation: 151.)[7]

The implication, that in bourgeois society labour is ‘directly social’, contradicts everything Marx aimed to achieve. His central argument aims to show how, under the domination of money, social labour appears broken up into the form of isolated ‘private labours’.

Engels also allowed the English translation of Volume I to receive a misleading title: The Process of Capitalist Production. Marx had subtitled Volume I: Der Produktionsprozess des Kapitals, [The Production-process of Capital]. The distinction is important. Marx’s book is not primarily about the way things are made under a system of production called ‘capitalism’. It is about the way that the social relation, capital, produces and reproduces itself, in opposition to the wishes and intentions of those who live under its power. When Engels issued Volume III, he added a subtitle on similar lines: Der Gesamtprozess der Kapitalistischen Produktion, [The Process of Capitalist Production as a Whole]. Once again, the subject matter is made to appear as a process of production which happens to be capitalist.

In 1992, Marx’s manuscript of 1863-67 appeared in a volume of the Marx-Engels Gesamtausgabe. Here is the basis for Engels’ production which we know as Volume III of Capital. Marx had headed it Die Gestaltungen des Gesamtprozesses, [the shapes of the complete process], and Marx is concerned with the production process of capital as a whole. Work to examine the differences between Marx’s original manuscript and Engels’ edition of it, now in progress, may throw considerable further light on the contrast between Engels’ conception of what Marx was attempting and Marx’s actual project.[8]

Engels’ last work on political economy was to write two articles about Volume III of Capital, to be published in Kautsky’s journal Neue Zeit. (They are usually printed as supplements to Volume III.) Of the second of these, ‘On the Stock Exchange’, only an outline was completed, but the first, ‘Law of Value and Rate of profit’, was finished before he died. It contains a passage in which Engels tries to implement that method of ‘proof, by historical means’, which, in the letter of June 16, 1867, quoted above, he had urged Marx to employ in expounding the development of money in Volume I. This, in my opinion, indicates a major misunderstanding by Engels of what Marx was doing.

Engels hangs his historical essay on a single paragraph of Marx’s, included in his edition of Volume III, Chapter 10, ‘The Equalisation of the General Rate of Profit through Competition. Market Prices and Market Values. Surplus Profit.’ Marx has discussed how a general rate of profit is formed, equalising profit rates on capitals with different compositions, (ie, different proportions between constant and variable capital). Surplus value moves between the different capitals, through the formation of ‘prices of production’, competition and the flow of capital from industry to industry constantly adjusting the individual profit rates. Marx includes a reference to those conditions in which the means of production belong to the worker, and this condition is to be found, in both the ancient and the modern world, among peasant proprietors and handicraftsmen who work for themselves. Under such conditions, it is also quite apposite [sachgemass] to view the values of commodities not only as theoretically prior to the prices of production, but also as historically prior to them. (Marx, 1978 Vol.III: 277-8).

Engels hangs on to these few lines of Marx no less than eleven pages of his own (ibid. Vol.III: 1034-45). These give an account of Marx’s arguments about the form-movement from commodities, to money, to capital, to the formation of an average rate of profit, as if this were a sequence of stages in the history of society. Engels concludes:

Marx’s law of value applies universally, as much as any economic laws do apply, for the entire period of simple commodity production, ie. up to the time at which this undergoes a modification by the onset of the capitalist form of production.... Thus the Marxian law of value has a universal economic validity for an era lasting from the beginning of the exchange that transforms products into commodities down to the fifteenth century of our epoch... a period of some five to seven millennia. (ibid. Vol.III: 1037).

It is remarkable how directly this conclusion drawn by Marx’s closest collaborator contradicts clear statements of Marx himself. Certainly, Marx made deep studies of the historical development of commodities, money and capital. But these must be seen as illustrations of his logical analyses, not explanations or ‘proofs’ of them. To take the most obvious example:

The wealth of bourgeois society, at first sight, presents itself as an immense [ungeheurig = ‘monstrous’] accumulation of commodities. (Marx, 1971: 27).

That is how A Contribution... begins, and it is quoted in the first sentence of Capital. The discussion of commodities and value refers directly to bourgeois society, not to pre-capitalist conditions. In any case, Marx never wrote about ‘simple commodity production’ at all (see Arthur, 1996).

Later in the same chapter of A Contribution..., Marx specifically takes up the tendency of Adam Smith to regard later economic forms as interfering with commodities pure and simple:

Although Adam determines the value of commodities by the labour time contained in them, he then nevertheless transfers this determination of value in actual fact to pre-Adamian times. ... The value of commodities was measured by labour time in the PARADISE LOST of the bourgeoisie, where people did not confront one another as capitalists, wage workers, landowners, tenant farmers, usurers and so on, but simply as persons who produced commodities and exchanged them. (Marx, 1971: 59).

When Marx was drafting what he thought would be the next part of A Contribution..., (he gave up this ‘Urtext’ and started again with Capital), he explains a similar idea:

Since the examination of the more concrete economic relationships than those represented by the simple circulation of commodities seems to bring out laws contradicting [the said law of appropriation], all the classical economists, including Ricardo, may like to allow this view, springing as it does from the bourgeois society itself, the right to be called a universal law, but banish its strict reality to the golden age when no property existed as yet. ... That would produce the strange result that the truth about the bourgeois society’s law of appropriation would have to be transferred to a time when this society itself did not as yet exist... (Marx and Engels, 1975 Vol.XXIX: 463).

In the Introduction to Grundrisse, Marx deals carefully with the relation between his critical account of bourgeois political economy, and the actual historical development.

Capital is the economic power that dominates everything in bourgeois society. It must form both the point of departure and the conclusion and must be analysed before landed property. After each has been considered separately, their interconnection must be examined. It would therefore be inexpedient and wrong to present the economic categories successively in the order in which they played the determining role in history. Their order of succession is determined rather by their mutual relation in modern bourgeois society, and this is quite the reverse of what appears to be their natural relation or correspond to the sequence of historical development. (Marx and Engels, 1975 Grundrisse: MECW v. 28. p.44).

And later on in Grundrisse:

Our method indicates the point at which historical analysis must be introduced, or at which bourgeois economy as a mere historical form of the production process points beyond itself towards earlier historical modes of production. To present the laws of the bourgeois economy, it is not necessary to write the real history of the production relations. (MECW v. 28. p. 388-9).

(However, it seems certain that Engels never looked at Grundrisse, nor at the 1844 Manuscripts.)

No merely empirical account can get beneath the fetishised surface of society. For what Marx set out to do was to reveal the possibilities for a truly human society hidden beneath the inhuman cover. This was the task, the critique of political economy, from the standpoint of human society or socialised humanity, to which he devoted forty years. It still remains incomplete.[9]

Of course it would be wrong to deny the powerful contribution of Engels to the working out and popularisation of Marx’s ideas. I believe that the re-appropriation of those ideas at their deepest level is today vital for understanding of the world’s problems. So the knowledge that Engels’ understanding of these most fundamental principles were severely limited is very important if we are to rediscover Marx’s insights.

Acknowledgment

The author wishes to thank the CSE referees for their comments on an earlier draft of this article.

Notes

1. In Smith, 1996a, I tried to absolve Engels from such charges, but in this article I amend my previous view. See ibid: 74 et seq., for a more detailed account of the significance of Marx’s critique, and Chapter 4 for my view of Marx’s conception of science. For my understanding of the relation between Marx’s view of political economy and Hegel, see Smith,1996b.

2. For instance, Meek,1967.

3. For instance, Levine,1975,1984.

4. Capital, Volume I, Chapter 1, (Marx, 1976, p 169), translates verruckte as ‘absurd’.

5. See Carver, 1983a, and Claeys, 1984. Claeys show how far Engels’ ideas in 1843 were influenced by the Owenites.

6. Capital Volume I, (Marx,1976): 168, 253, 267, 787,1007.

7. The only English version I know which renders this vital phrase correctly is in Albert Dragstedt’s translation of Chapter I of the First Edition, in Value: Studies by Marx, New Park, 1976: 57. An Appendix to Smith, 1996b, entitled: ‘Some adventures in mistranslation’, gives some other examples.

8. I know of two international conferences of Marx-scholars which have so far discussed this question, one was in Tokyo in November 1994. The other, held in Bergamo a month later, is reported in Marxian Economics: A Centenary Appraisal. Edited by R Bellofiore. MacMillan (2 Volumes), (to appear 1997). Papers on this and related questions are to be found in Engels’ Druckfassung versus Marx’ Manuskripte zum III Buch des ‘Kapital’, edited by C-E Vollgraf, Richard Sperl and Rolf Hecker, Argument-Verlag,1995. See also Heinrich,1996.

9. It would be interesting to contrast Engels’ view on history with Hegel’s attack on the ‘Historical School of Law’, notably Savigny. (See Philosophy of Right, para 3.) I am sure that Marx would have approved of Hegel’s views on this issue. (See Marx’s article ‘The Philosophical Manifesto of the Historical School of Law’, in Marx and Engels,1975 Vol.I: 203-10. )

References

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Carver, Terrell (1983a). ‘Marx-and Engels’ Outlines of a critique of political economy’ in History of Political Thought, Vol.IV, No. 2: 357-65.

Carver, Terrell (1984b). Marx and Engels: The Intellectual Relationship. Harvester/Wheatsheaf

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Marx, K. & F. Engels (1975-). Karl Marx/Friedrich Engels Collected Works, (50 volumes). Lawrence & Wishart, London.

Marx, K. & F. Engels. (1983). Letters on ‘Capital’. New Park, London.

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