Critique of Political Economy 1859 on Superphysics

Preface

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I examine the system of bourgeois economy in terms of capital, landed property, wage-labour; the State, foreign trade, world market.

The economic conditions of existence of the 3 great classes into which modern bourgeois society is divided are analysed under the first three headings; the interconnection of the other three headings is self-evident.

Production, Consumption, Distribution, Exchange (Circulation)

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Appendix I

PRODUCTION

(a) To begin with, the question under discussion is material production.

The Commodity

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The wealth of bourgeois society presents itself as an immense accumulation of commodities.

Its unit is a single commodity.

Every commodity, however, has a twofold aspect:

Use-value
Exchange-value.

The English economists define a commodity as “any thing necessary, useful or pleasant in life,” an object of human wants, a means of existence in the widest sense of the term.

The Commodity

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Review by Frederick Engels

I The Germans have long since shown that in all spheres of science they are equal, and in most of them superior, to other civilised nations. Only one branch of science, political economy, had no German name among its foremost scholars. The reason is obvious. Political economy is the theoretical analysis of modern bourgeois society and therefore presupposes developed bourgeois conditions, conditions which for centuries, following the wars in the wake of the Reformation and the peasant wars and especially the Thirty Years’ War, could not establish themselves in Germany. The separation of the Netherlands from the Empire removed Germany from the international trade routes and restricted her industrial development from the very beginning to the pettiest scale. While the Germans painfully and slowly recovered from the devastations of the civil wars, while they used up their store of civic energy, which had never been very large, in futile struggle against the customs barriers and absurd commercial regulations which every petty princeling and imperial baron inflicted upon the industry of his subjects, while the imperial cities with their craft-guild practices and patrician spirit went to ruin — Holland, England and France meanwhile conquered the leading positions in international trade, established one colony after another and brought manufactory production to the height of its development, until finally England, with the aid of steam power, which made her coal and iron deposits valuable, headed modern bourgeois development. But political economy could not arise in Germany so long as a struggle had still to be waged against so preposterously antiquated remnants of the Middle Ages as those which hampered the bourgeois development of her material forces until 1830. Only the establishment of the Customs Union enabled the Germans to comprehend political economy at all. It was indeed at this time that English and French economic works began to be imported for the benefit of the German middle class. Men of learning and bureaucrats soon got hold of the imported material and treated it in a way which does little credit to the “German intellect.” The literary efforts of a hotchpotch of chevaliers d’industrie, traders, schoolmasters and bureaucrats produced a bunch of German economic publications which as regards triteness, banality, frivolity, verbosity and plagiarism are equalled only by the German novel. Among people pursuing practical objectives there arose first the protectionist school of the industrialists, whose chief spokesman, List, is still the best that German bourgeois political economy has produced although his celebrated work is entirely copied from the Frenchman Ferrier, the theoretical creator of the Continental System. In opposition to this trend the free-trade school was formed in the forties by merchants from the Baltic provinces, who fumblingly repeated the arguments of the English Free Traders with childlike, but not disinterested, faith. Finally, among the schoolmasters and bureaucrats who had to handle the theoretical aspects there were uncritical and desiccated collectors of herbaria, like Herr Rau, pseudo-clever speculators who translated foreign propositions into undigested Hegelian language like Herr Stein, or gleaners with literary pretensions in the field of so-called history of civilisation, like Herr Riehl. The upshot of all this was cameralistics, an eclectic economic sauce covering a hotchpotch of sundry trivialities, of the sort a junior civil servant might find useful to remember during his final examination.

Concrete Labour

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Abstract labour is the source of exchange-value.

But all the previous observations are concerned with concrete labour as the source of material wealth, with labour that produces use-values.

Since the use-value of the commodity is postulated, the specific utility and the definite usefulness of the labour expended on it is also postulated;

Historical Notes on the Analysis of Commodities

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The decisive outcome of the research carried on for over a century and a half by classical political economy, beginning with William Petty in Britain and Boisguillebert [1] in France, and ending with Ricardo in Britain and Sismondi in France, is an analysis of the aspects of the commodity into two forms of labour – use-value is reduced to concrete labour or purposive productive activity, exchange-value to labour-time or homogeneous social labour.

Money Or Simple Circulation

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Gladstone:

spoke in a parliamentary debate on Sir Robert Peel’s Bank Act of 1844 and 1845
observed that:
- even love has not turned more Britons into fools than has meditation upon the nature of money
- the Dutch, on the other hand, possessed a divine sense for money speculation from time immemorial, have never lost their senses in speculation about money.

The commodity is the origin of money.

Theories of the Standard of Money

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Commodities are only nominally converted in the form of prices into gold and hence gold is only nominally transformed into money led to the doctrine of the nominal standard of money.

Medium of Exchange

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The establishing of prices lets commodities acquire the form that lets them enter circulation.

This circulation exposes the contradictions latent in the exchange of commodities.

The real exchange of commodities is the social metabolic process.

The Circulation of Money

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In the first instance real circulation consists of a mass of random purchases and sales taking place simultaneously. In both purchase and sale commodities and money confront each other in the same way; the seller represents the commodity, the buyer the money.

Money

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Money as distinguished from coin is the result of the circuit C—M—C and constitutes the starting point of the circuit M—C—M, that is the exchange of money for commodities so as to exchange commodities for money.

Money

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b. Means of Payment

Non circulating money are:

Suspended coin

This is the temporary transformation of coins into money, reflects the fact that in a certain sphere of circulation, the second term of C—M—C, that is M—C the purchase, must break up into a series of successive purchases.

The Precious Metals

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At first the process of bourgeois production takes possession of metallic currency as an existing and ready-made instrument, which, although it has been gradually reorganised, in its basic structure has nevertheless been retained. The question why gold and silver, and not other commodities, are used as the material of money lies outside the confines of the bourgeois system. We shall therefore do no more than summarise the most important aspects.

Theories of the Medium of Circulation and of Money

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Just as in the sixteenth and seventeenth centuries, when modern bourgeois society was in its infancy, nations and princes were driven by a general desire for money to embark on crusades to distant lands in quest of the golden grail, so the first interpreters of the modern world, the originators of the Monetary System – the Mercantile System is merely a variant of it – declared that gold and silver, i.e., money, alone constitutes wealth.

Ricardo

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Most English writers of that period confuse the circulation of bank-notes, which is determined by entirely different laws, with the circulation of value-tokens or of government bonds which are legal tender.