Notes

THE ACCUMULATION OF CAPITAL

1Karl Marx, Das Kapital, Band I (fourth edition) (Hamburg: Von Otto Meissner, 1890), p. 529. [See Karl Marx, Capital, Vol. 1, translated by Ben Fowkes (New York: Penguin Books, 1976), p. 711. All subsequent references to Vol. 1 of Marx’s Capital are to this English-language edition—the Editors].

2In this exposition, surplus value is taken to be identical with profit, which is the case for total production, which is dealt with below. We also disregard the division of surplus value into its components (profit of enterprise; interest on capital; rent), as this question has no bearing on the problem of reproduction for the time being.

3Karl Marx, Das Kapital, Band 2, second edition (Hamburg: Verlag von Otto Meissner, 1893), p. 332. [Karl Marx, Capital, Vol. 2, translated by David Fernbach (New York: Penguin, 1978), p. 435. All further references to Vol. 2 of Capital are to this English-language edition—the Editors].

4Cf. [Pierre Samuel] Du Pont [de Nemours], “Analyse du Tableau Économique,” in Journal de l’Agriculture, du Commerce et des Finances, (1766), pp. 305 ff., in [Auguste] Oncken’s edition of Œuvres de F. Quesnay (Paris: Francfort, 1888). Quesnay states explicitly that in his account of circulation, the latter presupposes two conditions: free trade, and a system of taxation levied only on rent: “Yet these facts have indispensable conditions; that the freedom of commerce sustains the sale of products at a good price, and moreover, that the farmer need not pay any other direct or indirect charges but this revenue, part of which, say two-sevenths, must form the revenue of the Sovereign” (Ibid., p. 311).

5Adam Smith, Natur und Ursachen des Volkswohlstandes, übersetzung von Wilhelm Loewenthal (Berlin: Staude, 1879), p. 53. [Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations, Vol. 1, edited by R. H. Campbell, A. S. Skinner, and W. B. Todd (Indianapolis, IN: Liberty Fund, 1981) p. 68. All further references to Smith’s Wealth of Nations are to this English-language edition—the Editors.]

6Smith, An Inquiry into the Nature and Causes of the Wealth of Nations, Vol. 1, p. 286.

7Ibid., pp. 286–7.

8Ibid., p. 289.

9On Rodbertus and his specific conception of “national capital,” see Section Two below.

10J. B. Say, A Treatise on Political Economy, Vol. 2, translated by C. R. Prinsep (London: Longman, 1821), pp. 75–7.

11Incidentally, it should be noted that [Victor de Riqueti, Marquis de] Mirabeau explicitly mentions the fixed capital of the unproductive class in his “explications” of the Tableau économique: “The avances primitives of this class, for the establishment of manufactures, for instruments, machines, mills, smithies (ironworks), and other factories … (amount to) 2 billion livres” (Tableau économique avec ses Explications [Paris: Hérissant, 1760], p. 82). In his confusing sketch of the Tableau itself, however, Mirabeau in fact fails to take this fixed capital of the sterile class into account.

12Smith also gives the following general formulation: “The value that 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 that he advanced” (An Inquiry into the Nature and Causes of the Wealth of Nations, Vol. 1, p. 8). Further, in Book 2, Chapter 8, on industrial labor in particular: “The labor of a manufacturer adds generally to the value of the materials that he works upon, that of his own maintenance and of his master’s profit. The labor of a menial servant, on the contrary, adds to the value of nothing. Though the manufacturer has his wages advanced to him by his master, he in reality costs him no expense, the value of those wages being generally restored, together with a profit, in the improved value of the subject upon which his labor is bestowed” (Smith, An Inquiry into the Nature and Causes of the Wealth of Nations, Vol. 1, p. 330).

13“The laborers … therefore, employed in agriculture, not only occasion, like the workmen in manufactures, the reproduction of a value equal to their own consumption, or to the capital that employs them, together with its owner’s profit; but of a much greater value. Over and above the capital of the farmer and all its profits, they regularly occasion the reproduction of the rent of the landlord” (Smith, An Inquiry into the Nature and Causes of the Wealth of Nations, Vol. 1, pp. 363–4).

14Ibid., p. 332. Yet in the following sentence Smith reduces capital to wages, that is to variable capital: “That part of the annual produce of the land and labor of any country that replaces a capital, never is immediately employed to maintain any but productive hands. It pays the wages of productive labor only. That which is immediately destined for constituting a revenue, either as profit or as rent, may maintain indifferently either productive or unproductive hands” (Ibid.).

15Ibid., pp. 286–7.

16Ibid., p. 287.

17Ibid., p. 288.

18Ibid.

19Ibid.

20Ibid., p. 287.

21Karl Marx, Theorien über den Mehrwert, Vol. 1 (Stuttgart: J. H. W. Dietz, 1905), pp. 179–252; Karl Marx, Theorien über den Mehrwert, Erster Teil, in Karl Marx/ Friedrich Engels Werke, Band 26.1, pp. 78–121, 158–68, 190–1, and 202–22. [See Karl Marx, Theories of Surplus Value, in Marx and Engels Collected Works, Vol. 30 (New York: International Publishers, 1988), pp. 411–51; Vol. 31, pp. 7–8, 13–14, 84–94, 113–14, 130–151. All subsequent references to Theories of Surplus Value will be to the current English-language edition as found in the Marx and Engels Collected Works—the Editors.]

22Capital, Vol. 2, p. 451.

23Smith, An Inquiry into the Nature and Causes of the Wealth of Nations, Vol. 1, pp. 363–4.

24Ibid., p. 68.

25Here the contrary conception is disregarded that also crops up intermittently in Smith, whereby the price of commodities cannot be resolved into v + s, and yet their value consists of v + s! This confusion is more important for Smith’s theory of value than in the present context, where it is his formula, v + s, that is of interest.

26For the sake of simplicity, general usage will be followed, with references both here and in what follows to annual production; in actual fact, this time frame applies in general only to agriculture. Industrial periods of production and the turnover of capital do not necessarily coincide with calendar years.

27In a society regulated by planning and based on common ownership of the means of production, the division of labor between intellectual and material labor does not need to correspond to particular categories of the population. Although such a division of labor will always be expressed in the existence of a certain number of intellectually active people who must be materially provided for, these various functions may be carried out in rotation by different individuals.

28“In speaking of the social point of view, i.e. in considering the total social product, which includes both the reproduction of the social capital and individual consumption, it is necessary to avoid falling into the habits of bourgeois economists, as imitated by Proudhon, i.e. to avoid looking at things as if a society based on the capitalist mode of production lost its specific historical and economic character when considered en bloc, as a totality. This is not the case at all. What we have to deal with is the collective capitalist. The total capital appears as the share capital of all individual capitalists together. The joint-stock company has in common with many other joint-stock companies that everyone knows what they put into it, but not what they will get out of it” (Marx, Capital, Vol. 2, p. 509).

29Capital, Vol. 2, p. 473.

30Ibid., pp. 542–5. See p. 256 on the necessity of expanded reproduction from the point of view of the insurance fund in general.

31Theories of Surplus Value, in Marx and Engels Collected Works, Vol. 32 (New York: International Publishers, 1989), p. 113.

32In his seventh observation on the Tableau économique, after his polemic against the Mercantilist theory of money as identical with wealth, Quesnay states the following: “The bulk of money in a nation cannot increase unless this reproduction itself increases; otherwise, an increase in the bulk of money would inevitably be prejudicial to the annual production of wealth … Therefore we must not judge the opulence of states on the basis of a greater or smaller quantity of money: thus a stock of money, equal to the income of the landowners, is deemed much more than enough for an agricultural nation where the circulation proceeds in a regular manner, and where commerce takes place in confidence and full liberty.” (Cf. Quesnay, Analyse du Tableau Économique, [in Œuvres de F. Quesnay], edited by [Auguste] Oncken [Paris: Jules Peelman et Cie, 1888], pp. 324–5).

33Marx (Capital, Vol. 2, p. 491) takes the money spent by the capitalists of Department II as the starting point of this exchange. As Engels rightly points out in his footnote, this does not affect the final result of circulation, but it is not correct to assume that this is a presupposition of social circulation. Marx himself gives a more correct exposition in Capital, Vol. 2, pp. 475–6.

34Capital, Vol. 2, p. 546.

35Ibid., pp. 547–8.

36Ibid., p. 548.

37Ibid., p. 566.

38“The precondition for simple reproduction, that I (v + s) is equal to IIc, is incompatible with capitalist production from the start, although this does not rule out the possibility that in one year of the industrial cycle of ten to eleven years there may be a smaller total production than the preceding, i.e. that even simple reproduction fails to take place in relation to the previous year. Secondly, however, given the natural annual growth of the population, simple reproduction would mean that a proportionately greater number of unproductive servants had to share in the 1,500 that represents the total surplus value. Accumulation of capital, i.e. actual capitalist production, would be impossible in this way” (Capital, Vol. 2, p. 596).

39[David] Ricardo, Principles of Political Economy, Chapter 7, On Taxes. [The Works and Correspondence of David Ricardo, Vol. 1, edited by Piero Sraffa with the collaboration of M. H. Dobb (Indianapolis, IN: Liberty Fund, 2005), p. 151.]

40“The specifically capitalist mode of production, the development of the productive power of labor that corresponds to it, and the change in the organic composition of capital that results from it, are things that do not merely keep pace with the progress of accumulation, or the growth of social wealth. They develop at a much quicker rate, because simple accumulation, or the absolute expansion of the total social capital, is accompanied by the centralization of its individual elements, and because the change in the technological composition of the capital. With the progress of accumulation, therefore, the proportion of constant to variable capital changes. If it was originally say 1:1, it now becomes successively 2:1, 3:1, 4:1, 5:1, 7:1, etc., so that, as the capital grows, instead of ½ its total value, only ⅓, ¼, ⅕, ⅙, ⅛, etc., is turned into labor-power, and on the other hand, ⅔, ¾, ⅘, ⅚, ⅞, into means of production. Since the demand for labor is determined not by the extent of the total capital but by its variable component alone, that demand falls progressively with the growth of the total capital, instead of rising in proportion to it, as was previously assumed. It falls relatively to the magnitude of the total capital, and at an accelerated rate, as this magnitude increases. With the growth of the total capital, its variable constituent, the labor incorporated in it, does admittedly increase, but in a constantly diminishing proportion. The intermediate pauses in which accumulation works as simple extension of production on a given technical basis are shortened. It is not merely that an accelerated accumulation of the total capital, accelerated in a constantly growing progression, is needed to absorb an additional number of workers, or even, on account of the constant metamorphosis of old capital, to keep employed those already performing their functions. This increasing accumulation and centralization also becomes in its turn a source of new changes in the composition of capital, or in other words of an accelerated diminution of its variable component, as compared with its constant one” (Capital, Vol. 1, pp. 781–2).

41“The path characteristically described by modern industry, which takes the form of a decennial cycle (interrupted by smaller oscillations) of periods of average activity, production at high pressure, crises, and stagnation, depends on the constant formation of the industrial reserve army or surplus population. In their turn, the varying phases of the industrial cycle recruit the surplus population, and become one of the most energetic agents of its reproduction” (Ibid., p. 785).

42Capital, Vol. 1, pp. 726–7.

43Ibid., p. 727.

44Capital, Vol. 2, pp. 586–90.

45Ibid., pp. 587–8.

46Ibid., p. 588.

47Ibid., p. 590.

48Capital, Vol. 2, pp. 448–9.

49Ibid., p. 532.

50Capital, Vol. 1, p. 727, Note 2.

51Ibid., p. 727.

52Those cases can be disregarded here in which a part of the product, e.g. coal in the coalmine, can reenter the production process directly without exchange. These are exceptional cases within capitalist production as a whole [See Marx, Theories of Surplus Value, in Marx and Engels Collected Works, Vol. 32, pp. 118–21].

53Capital, Vol. 2, p. 509.

54Ibid., p. 565 (my emphasis—R. L.)

55Ibid., p. 566–7 (my emphasis—R. L).

56Ibid., p. 568.

57Ibid., pp. 568–9.

58Ibid., pp. 572–3.

59Ibid., p. 573.

60Ibid., p. 575.

61Ibid.

62Ibid., p. 576.

63Ibid., pp. 577–8.

64Ibid., pp. 579–80.

65Ibid., p. 581.

66Ibid., p. 583.

67Ibid., p. 584.

68Ibid.

69Ibid.

70Ibid., pp. 584–5.

71Ibid., p. 585.

72Ibid.

73Ibid., p. 585.

74Ibid., p. 590.

75Ibid., p. 598.

76Ibid., p. 566.

77Ibid., p. 405.

78Ibid.

79Ibid., pp. 405–7.

80Ibid., p. 407.

81Ibid., p. 408.

82Ibid., p. 409.

83Ibid., p. 410.

84Ibid., p. 418.

85Ibid., pp. 418–9.

86Ibid., p. 419.

87Ibid., p. 422.

88Ibid.

89Ibid., pp. 84–7.

90See Capital, Vol. 2, pp. 449, 524, 530.

91Edinburgh Review, Vol. LXVI, pp. 331 ff. The excerpt from this interesting document is to be found in a review of an essay entitled “Observations on the Injurious Consequences of the Restrictions upon Foreign Commerce. By a Member of the late Parliament, London, 1820.” This essay, which has a Free Trade bias, paints a bleak portrait of the situation of the workers in the U.K. It cites the following facts: “The manufacturing classes in Great Britain … have been suddenly reduced from affluence and prosperity to the extreme of poverty and misery. In one of the debates in the late Session of Parliament, it was stated that the wages of weavers of Glasgow and its vicinity that, when highest, had averaged about 25s. or 27s. a week, had been reduced in 1816 to 10s.; and in 1819 to the wretched pittance of 5s. 6d. They have not since been materially augmented.” In Lancashire, according to the same evidence, the weekly wage of the weavers varied between 6s. and 12s. a week for a 15-hour working day, while “half-starved” children worked 12 to 16 hours a day for 2s. or 3s. a week. Even greater hardship, if such were possible, was endured in Yorkshire. As to the address by the framework knitters of Nottingham, the author says that he himself had investigated conditions and had come to the conclusion that the declarations of the workers were not in the slightest exaggerated.

92Ibid., p. 334.

93Preface to the second edition. Translation by François-Auguste-Marie-Alexis Mignet, in Political Economy and the Philosophy of Government (London: John Chapman, 1847), pp. 114 ff.

94[Jean-Charles-Léonard Simonde de Sismondi], Nouveaux Principes [d’Economie Politique Ou De La Richesse Dans Ses Rapports Avec La Population (Paris: Delaunay, 1819)], Vol. 1, p. 79. [New Principles of Political Economy, translated by Richard Hyse (New Brunswick, NJ: Transaction Publishers, 1991), p. 75.]

95Ibid., p. xv. [New Principles, p. 13.]

96Ibid., p. 92. [New Principles, p. 83.]

97Ibid., pp. 111–12. [New Principles, p. 95.]

98Ibid., p. 335. [New Principles, p. 565.]

99Sismondi, Nouveaux Principes, Vol. 2, p. 435. [New Principles, p. 629.]

100Ibid., p. 463. [New Principles, p. 647.]

101Sismondi, Nouveaux Principes, Vol. 1, p. xiii (pp. 120–1 of Mignet’s translation). [Sismondi, Political Philosophy and the Philosophy of Government; New Principles, pp. 11–12.]

102Nouveaux Principes, Vol. 1, p. 84. [New Principles, pp. 79–80.]

103Ibid., p. 85. [New Principles, p. 80.]

104Ibid., p. 86. [New Principles, p. 80.]

105Ibid., pp. 86–7. [New Principles, pp. 80–1.]

106Ibid., p. 87. [New Principles, p. 81.]

107Ibid., pp. 87–8. [New Principles, p. 81.]

108Ibid., pp. 88–9. [New Principles, p. 81.]

109Ibid., pp. 108–9. [New Principles, p. 94.]

110Ibid., pp. 93–4. [New Principles, p. 94.]

111Ibid., p. 95. [New Principles, p. 84.]

112Ibid., pp. 95–6. [New Principles, pp. 84–5.]

113Ibid., pp. 104–5. [New Principles, p. 92.]

114Ibid., p. 105. [New Principles, p. 93.]

115Ibid., pp. 105–6. [New Principles, p. 93.]

116Ibid., pp. 113, 120. [New Principles, p. 104.]

117Ibid., p. 121. [New Principles, p. 104.]

118Vladimir Ilyich Lenin, Economic Studies and Essays (1899). [See V. I. Lenin, Collected Works, Vol. 2, edited by George Hanna (Moscow: Progress Publishers, 1963), pp. 133–265, 357–458, 461–89.]

119The article in the Edinburgh Review was in fact directed against Owen. Over twenty-four printed pages, it sharply criticizes four texts by the latter: (1) “A New View of Society, or Essays on the Formation of Human Character,” (2) “Observations on the Effects of the Manufacturing System,” (3) “Two Memorials on Behalf of the Working Classes, Presented to the Governments of America and Europe,” and finally (4) “Three Tracts” and “An Account of Public Proceedings Relative to the Employment of the Poor.” “Anonymous” here attempts to demonstrate exhaustively that Owen’s reformist ideas do not bear the slightest relation to the real causes of the misery of the English proletariat, these causes being the following: the transition to the cultivation of infertile land (Ricardo’s theory of ground rent!); the corn laws; and high taxation pressing upon tenant farmers and manufacturers alike. Free trade and laissez-faire are thus his alpha and omega. Given unrestricted accumulation, each increase in production will engender a corresponding increase in demand. Owen is accused of “profound ignorance” in relation to Say and James Mill. “In his reasonings, as well as in his plans, Mr. Owen shows himself profoundly ignorant of all the laws that regulate the production and distribution of wealth.” The author then proceeds to range Sismondi alongside Owen, and formulates the point of contention as follows: “He [Owen] conceives that when competition is unchecked by any artificial regulations, and industry permitted to flow in its natural channels, the use of machinery may increase the supply of the several articles of wealth beyond the demand for them, and by creating an excess of all commodities, throw the working classes out of employment. This is the position that we hold to be fundamentally erroneous; and as it is strongly insisted on by the celebrated M. de Sismondi in his Nouveaux Principes d’Economic Politique, we must entreat the indulgence of our readers while we endeavor to point out its fallacy, and to demonstrate, that the power of consuming necessarily increases with every increase in the power of producing” (Edinburgh Review, October 1819, p. 470).

120Annales de legislation et de jurisprudence was edited by P. F. Bellot, Dumont, L. Meynier, P. Rossia, and Sismondi and appeared from 1820 to 1822.

121The original title is: “Examen de cette question: Le pouvoir de consommer s’accroîtil toujours dans la société avec le pouvoir de produire?” It has not been possible to obtain a copy of Rossi’s Annales, but the essay as a whole was reproduced by Sismondi in the second edition of his Nouveaux Principes.

122At the time of writing, Sismondi was still in the dark as to the identity of “Anonymous” in the Edinburgh Review.

123Sismondi, Nouveaux Principes, Vol. 2, pp. 376–8. [New Principles, p. 601.]

124McCulloch, “On Mr. Owen’s Plans for Relieving National Distress,” p. 470.

125Incidentally, Sismondi’s Leipzig Book Fair has staged a comeback after fifty-five years as a microcosm of the capitalist world—in Eugen Dühring’s “system.” In his devastating criticism of the latter unfortunate “universal genius,” Engels adduces this idea as proof that Dühring has shown himself to be a “real German literatus” by attempting to elucidate a real industrial crisis by means of an imaginary one at the Leipzig Book Fair—thus explicating a storm at sea by means of a storm in a teacup. Yet, as in many other instances exposed by Engels, the great thinker has simply plagiarized the ideas of others.

126Sismondi, Nouveaux Principes, Vol. 2, pp. 381–2. [New Principles, pp. 602–3.]

127McCulloch, “On Mr. Owen’s Plans for Relieving National Distress,” p. 470.

128Sismondi, Nouveaux Principes, Vol. 2, p. 384. [New Principles, p. 604.]

129McCulloch, “On Mr. Owen’s Plans for Relieving National Distress,” p. 471.

130Sismondi, Nouveaux Principes, Vol. 2, pp. 394–5. [New Principles, p. 608.]

131Ibid., pp. 396–7. [New Principles, p. 609.]

132Ibid., pp. 397–8. [New Principles, p. 609.]

133McCulloch, “On Mr. Owen’s Plans for Relieving National Distress,” pp. 471–2.

134Sismondi, Nouveaux Principes, Vol. 2, pp. 400–1. [New Principles, pp. 610–11.]

135Ibid., p. 401. [New Principles, p. 611.]

136Ibid., pp. 405–6. [New Principles, p. 613.]

137It is characteristic of Ricardo that, on his election to Parliament in 1819, when his economic writings had already earned him a great reputation, he wrote to a friend: “You will have seen that I have taken my seat in the House of Commons. I fear I shall be of little use there. I have twice attempted to speak but I proceeded in the most embarrassed manner, and I have no hope of conquering the alarm with which I am assailed the moment I hear the sound of my own voice” [The Works and Correspondence of David Ricardo, Vol. 7, edited by Piero Sraffa with the collaboration of M. H. Dobb (Indianapolis, IN Liberty Fund, 2005), p. 21.] Such diffidence was entirely foreign to the windbag McCulloch.

138Nouveaux Principes, Book 4, Chapter 7.

139Ibid., Book 7, Chapter 7.

140This essay, “Sur la Balance des Consommations avec les Productions,” is reprinted in the second edition of Nouveaux Principes, Vol. 2, pp. 408 ff; [cf. New Principles, p. 618]. Sismondi comments on these discussions as follows: “M. Ricardo, whose recent death has been a profound bereavement not only to his friends and family but to all those whom he enlightened by his brilliance, all those whom he inspired by his lofty sentiments, stayed for some days in Geneva in the last year of his life. We discussed in two or three sessions this fundamental question on which we disagreed. To this inquiry he brought the urbanity, the good faith, the love of truth that distinguished him, and a clarity that his disciples themselves had not heard, accustomed as they were to the efforts of abstract thought he demanded in the lecture room.”

141Ricardo had elaborated the theory of free trade. The representatives of this school called for so-called free foreign trade, unimpeded by any state policies.

142Sismondi, Nouveaux Principes, Vol. 2, p. 361. [New Principles, p. 276.]

143Sismondi, Nouveaux Principes, Book 4, Chapter 4: “Comment la Richesse commerciale suit l’Accroissement du Revenu” (Vol. 1, p. 355). [Cf. New Principles, p. 273.]

144Sismondi, Nouveaux Principes, Vol. 2, p. 412. [New Principles, pp. 619–20.]

145Ibid., p. 416. [New Principles, pp. 620–1.]

146Ibid., p. 424. [New Principles, p. 624.]

147Ibid., p. 417. [New Principles, p. 621.]

148Ibid., pp. 425–6. [New Principles, pp. 624–5.]

149Ibid., p. 429. [New Principles, p. 626.]

150Ibid., pp. 434–5. [New Principles, pp. 628–9.]

151In these circumstances, the account of the controversy between Sismondi and Ricardo given by that champion of the views of Say and Ricardo, Tugan-Baranovsky (Theorie und Geschichte der Handelskrisen in England, p. 176), displays a levity of judgment—to put it mildly—rarely seen in a work of serious scientific pretensions. Tugan-Baranovsky asserts that Sismondi was compelled “to acknowledge as correct the doctrine he had attacked and to concede his opponent all that is necessary”; he claims that Sismondi himself “had abandoned his own theory that still finds so many adherents”; and finally he declares that “the victory in this controversy lies with Ricardo.”

152“L’argent ne remplit qu’un office passager dans ce double échange. Les échanges terminés, il se trouve qu’on a payé des produits avec des produits. En conséquence, quand une nation a trop de produits dans un genre, le moyen de les écouler est d’en créer d’un autre genre” (J. B. Say, Traité d’Économie Politique, Vol. 1 [Paris: Deterville, 1803], p. 154).

153In fact, all that Say accomplished here once again was to give a pretentious and dogmatic formulation to the thoughts that others had expressed before him. As [Eugene von] Bergmann points out, in his Die Wirtschaftskrisen. Geschichte der nationalökonomischen Krisentheorien (Economic Crises: A History of Economic Crisis Theories) (Stuttgart: Kolhammer, 1895), similar statements on the identity or natural balance between supply and demand are to be found in the work of Josiah Tucker [Elements of Commerce and Theory of Taxes (London: S. R. Publishers, 1755)], in [Anne-Robert-Jacques] Turgot’s annotations to the French edition of Tucker’s pamphlet, in the writings of Quesnay, [Pierre Samuel] Dupont de Nemours, [Oeuvres de Turgot (Paris: A. Belin, 1808–11)] and others. Yet the miserable Say, as Marx once called him, claims credit as the leading harmonist for the great discovery of the “théorie des débouches,” modestly comparing his own work to the discovery of the principles of thermodynamics, of the lever, and of the inclined plane. In the preface and table of contents to the 6th edition of his Traité (1841, pp. 51, 616) he states: “The theory of exchange and of vents, such as it is developed in this work, will transform world politics.” The same standpoint is also elaborated by James Mill in his Commerce Defended of 1808 [London: Simpkin, Marshall & Co.]; Marx refers to the latter as the true father of the theory of the natural equilibrium between production and markets.

154Say, in Revue Encyclopédique, Vol. 23, July 1824, pp. 20 ff.

155“Erkläre mir, Graf Oerindur, diesen Zwiespalt der Natur.” Cf. Adolf Müllner, Die Schuld: Trauerspiel in vier Akten (Leipzig: Adolf Müllner, 1817).

156Sismondi, Nouveaux Principes, Vol. 1, p. 117. [New Principles, p. 103.]

157Say, in Revue Encyclopédique, Vol. 23, July 1824, p. 21.

158Ibid., p. 29. Say indicts Sismondi as the arch-enemy of bourgeois society in the following impassioned diatribe: “It is against the modern organization of society, an organization that, by despoiling the working man of all property save his hands, gives him no security in the face of a competition directed toward his detriment. What! Society despoils the workingman because it ensures to every kind of entrepreneur free disposition over his capital, that is to say his property! I repeat: there is nothing more dangerous than views conducive to a regulation of the employment of property [for] hands and faculties … are also property” (Ibid., p. 30).

159Sismondi, Nouveaux Principes, Vol. 2, pp. 462–3. [New Principles, p. 646.]

160Ibid., p. 331. [New Principles, p. 563.]

161Ibid., pp. 432–3. [New Principles, pp. 627–8.]

162Ibid., p. 449. [New Principles, p. 635.]

163Ibid., p. 448. [New Principles, p. 634.]

164Marx makes only passing references to Sismondi in his history of the opposition to Ricardo’s school and its dissolution. At one point, he states the following: “I exclude Sismondi from my historical survey here because a critique of his views belongs to a part of my work dealing with the real movement of capital (competition and credit) that I can only tackle after I have finished the book” [Theories of Surplus Value, in Marx and Engels Collected Works, Vol. 32, p. 245]. Subsequently, however, in the context of a consideration of Malthus, Marx dedicates a passage to Sismondi that is in the main quite exhaustive: “Sismondi is profoundly conscious of the contradictions in capitalist production; he is aware that, on the one hand, its forms—its production relations—stimulate unrestrained development of the productive power and of wealth; and that, on the other hand, these relations are conditional, that their contradictions of use-value and exchange value, commodity and money, purchase and sale, production and consumption, capital and wage-labor, etc., assume ever-greater dimensions as productive power develops. He is particularly aware of the fundamental contradiction: on the one hand, unrestricted development of the productive power and increase of wealth that, at the same time, consists of commodities and must be turned into cash; on the other hand, the system is based on the fact that the mass of producers is restricted to the necessaries. Hence, according to Sismondi, crises are not accidental, as Ricardo maintains, but essential outbreaks—occurring on a large scale and at definite periods—of the immanent contradictions. He wavers constantly: should the State curb the productive forces to make them adequate to the production relations, or should the production relations be made adequate to the productive forces? He often retreats into the past, becomes a laudator temporis acti, or he seeks to exorcise the contradictions by a different adjustment of revenue in relation to capital, or of distribution in relation to production, not realizing that the relations of distribution are only the relations of production seen sub alia specie. He forcefully criticizes the contradictions of bourgeois production, but does not understand them, and consequently does not understand the process whereby they can be resolved. [How could he, given that this production was still in its formative stages?—R. L.] However, at the bottom of his argument is indeed the inkling that new forms of the appropriation of wealth must correspond to the productive forces and the material and social conditions for the production of wealth that have been developed within capitalist society; that the bourgeois forms are only transitory and contradictory forms, in which wealth attains only an antithetical existence and appears everywhere simultaneously as its opposite. It is wealth that always has poverty as its prerequisite and only develops by developing poverty as well” (Ibid., pp. 247–8).

    In The Poverty of Philosophy, Marx cites Sismondi against Proudhon in several passages, but only in the following sentence does he make any comments relating directly to Sismondi’s position: “Those who, like Sismondi, wish to return to the correct proportion of production, while preserving the present basis of society, are reactionary, since, to be consistent, they must also wish to bring back all the other conditions of industry of former times” [The Poverty of Philosophy in Marx and Engels Collected Works, Vol. 6 (New York: International Publishers, 1976), p. 137]. There are two brief references to Sismondi in A Contribution to the Critique of Political Economy: in one place Marx ranks him as the last classical bourgeois economist in France, paralleling Ricardo in England; in another passage, Marx draws attention to the fact that, unlike Ricardo, Sismondi underlined the specifically social character of value-creating labor [See Marx and Engels Collected Works, Vol. 30 (New York: International Publishers, 1987), pp. 292 and 300–1]. Finally, in the Communist Manifesto, Sismondi is dubbed the head of petty-bourgeois socialism [See Marx and Engels Collected Works, Vol. 7, p. 509].

165Sismondi, Nouveaux Principes, Vol. 2, p. 409. [New Principles, pp. 617–8.]

166Cf. Marx, Theories of Surplus Value [in Marx and Engels Collected Works, Vol. 32, pp. 231–58] for an in-depth analysis of Malthus’ theory of value and profits.

167Thomas Malthus, Definitions in Political Economy (London: John Murray, 1827). [For a more recent edition of Malthus’s work, see Definitions in Political Economy (New York: Kelley and Millman, Inc., 1954]).

168James Mill, Elements of Political Economy, third edition (London: Baldwin Cradock, and Joy, 1826), pp. 239–40. [For a more recent edition of Mill’s work, see Elements of Political Economy (New York: Augustus M. Kelley, 1963).]

169Malthus, Definitions in Political Economy, p. 51.

170Ibid., p. 64.

171Ibid., pp. 53–4.

172“I suppose they are afraid of the imputation of thinking that wealth consists in money. But though it is certainly true that wealth does not consist in money, it is equally true that money is a most powerful agent in the distribution of wealth, and those who, in a country where all exchanges are practically effected by money, continue the attempt to explain the principles of demand and supply, and the variations of wages and profits, by referring chiefly to hats, shoes, corn, suits of clothing, &c., must of necessity fail” (Ibid., p. 60).

173Ibid., pp. 62–3.

174Rodbertus, Die Forderungen der arbeitenden Klassen (The Demands of the Working Classes) [Frankfurt am Main: August Skalweit, 1946].

175Rodbertus, Die Handelskrisen und die Hypothekennot der Grundbesitzer (On Commercial Crises and the Mortgage Problem of the Landowners) [Berlin: F. Schneider, 1858].

176Ibid.

177Rodbertus, Zur Erkenntnis unserer staatswirtschaftlichen Zustände (Toward the Understanding of Our Politico-Economic Conditions) (Neubrandenburg & Friedland: G. Barnovitz, 1842).

178See von Kirchmann, “Über die Grundrente in socialer Beziehung” and Die Tauschgesellschaft, in Demokratische Blätter, No. 25 (April–July 1849).

179Rodbertus, Soziale Briefe an von Kirchmann (Berlin: H. Barr, 1885 [orig. 1850–51]); cf. Rodbertus, Overproduction and Crises (London: S. Sonnenschein, 1898).

180Rodbertus quotes verbatim von Kirchmann’s arguments at great length. According to the former’s editors, however, no complete copy of Demokratische Blätter with the original essay is available.

181To von Kirchmann, in 1880.

182Schriften von Dr. Karl Rodbertus, 4 Volumes (Berlin: Puttkammer and Mühlbrecht, 1899), Vol. 3, pp. 172–4, 184.

183Rodbertus, Schriften, Vol. 2, pp. 104 f.

184Rodbertus, Schriften, Vol. 1, p. 99.

185Ibid., p. 173.

186Ibid., p. 176.

187Rodbertus, Schriften, Vol. 2, p. 65.

188Rodbertus, Schriften, Vol. 1, pp. 182–4.

189Ibid., p. 72.

190Ibid.

191Rodbertus, Schriften, Vol. 4, p. 225.

192Rodbertus, Schriften, Vol. 3, pp. 110–11.

193Ibid., p. 108.

194Rodbertus, Schriften, Vol. 1, p. 62.

195Rodbertus, Schriften, Vol. 4, p. 226.

196In Rodbertus, Zur Erkenntnis unserer staatswirtschaftlichen Zustände, Part 2, note 1.

197In Rodbertus, Die Handelskrisen und die Hypothekennot der Grundbesitzer, quoted above (Vol. 3, p. 186).

198Rodbertus, Schriften, Vol. 4. p. 233. In this context it is interesting to see how Rodbertus, in spite of his ethical bluster over the lot of the unfortunate working class, appears as someone who is in practice able, with great sobriety and realistic thinking, to predict capitalist colonial policy in the sense and spirit of the present-day “Pan-Germans.” In a footnote to the passage quoted above, he writes: “We can go on to glance briefly at the importance of the opening up of Asia, in particular of China and Japan, the richest markets in the world, and also of the maintenance of English rule in India. It is to defer the solution of the social problem.” [The fulminating avenger of the exploited here ingenuously discloses to the beneficiaries of exploitation the means by which they can continue in “their foolish and criminal error,” their “immoral” conception, and their “flagrant injustice” for as long as possible—R. L.] “For the present is characterised just as much by self-interest and a lack of ethical integrity as it is by a lack of insight.” [Rodbertus’s philosophical resignation is unparalleled!—R. L.] “Economic advantage cannot, admittedly, constitute a legal title to intervention by force, but on the other hand, a strict application of modern natural and international law to all the nations of the world, whatever their level of civilization, is quite impracticable.” [The reader is inevitably reminded at this point of Dorine’s words in Molière’s Tartuffe: “Le ciel défend, de vraie, certains contentements, mais il y a avec lui des accommodements.” “Heaven forbids, ‘tis true, some satisfactions; But we find means to make things right with Heaven”—R. L.] “Our international law is the product of a Christian ethical culture, or civilization, and since all law is based upon reciprocity, it can only provide the standard for relations with nations belonging to the same civilization. Its application beyond these limits betrays a sentimentality in relation to natural and international law, and the Indian atrocities should have cured us of it. Christian Europe should rather partake of the spirit that made the Greeks and the Romans regard all the other peoples of the world as barbarians. The world-historical drive that impelled the Ancients to extend their native civilization over the surface of the globe would then be reawakened in the younger European nations. They would reconquer Asia for world history by joint action. Such common purpose and action would in turn foster the greatest social progress, a firm foundation for peace in Europe, a reduction of armies, the colonization of Asia in the ancient Roman style—in other words, a genuine solidarity of interests in all spheres of social life.” This vision of capitalist colonial expansion causes the prophet of the exploited and oppressed to wax lyrical. Such lyricism is all the more exceptional in that it came at a time when “Christian ethical culture” covered itself in glory with exploits such as the Opium Wars against China and the “Indian atrocities”—that is to say, the atrocities committed by the British in their bloody suppression of the Indian (or Sepoy) Mutiny [in 1858]. In his second Letter on Social Problems, in 1850, Rodbertus had argued that if society lacked the “ethical fortitude” necessary to solve the social question, in other words, to alter the distribution of wealth, history would be compelled to “use the whip of revolution against it” (Rodbertus, Schriften, Vol. 2, p. 83). Eight years later, however, the good Prussian prefers to crack the whip of a Christian ethical colonial policy over the indigenous populations of the colonized countries. It is, of course, entirely consistent that the “actual founder of scientific socialism in Germany” should also be a keen supporter of militarism; his words on the “reduction of armies” are mere poetic license amid his bombast. In his essay On the Understanding of the Social Question, he explains that the “entire national tax burden is perpetually gravitating toward the bottom, sometimes in the form of higher prices for wage goods, and sometimes in the form of downward pressure on money wages,” and that, in this regard, conscription is to be considered “under the aspect of a burden on the state,” explaining that “as far as the working classes are concerned, it amounts not so much to a tax but rather a confiscation of their entire revenue over many years.” He immediately adds the following: “To avoid misunderstanding I would point out that I am a staunch supporter of our present military constitution [i.e. the military constitution of counter-revolutionary Prussia—R. L.]—although it may be oppressive to the working classes and demand great financial sacrifices from the propertied classes” (Schriften, Vol. 3, p. 34). Snug is no lion indeed!

199Rodbertus, Schriften, Vol. 3, p. 182.

200Rodbertus, Schriften, Vol. 4, p. 231.

201Rodbertus, Schriften, Vol. 3, p. 176.

202Rodbertus, Schriften, Vol. 1, pp. 53, 57.

203Ibid., p. 206.

204Ibid., p. 19.

205Rodbertus, Schriften, Vol. 2, p. 110.

206Ibid., p. 144.

207Ibid., p. 146.

208Ibid., p. 155.

209Ibid., p. 223.

210Ibid., p. 226.

211Ibid., p. 156.

212Rodbertus, Schriften, Vol. 1, p. 40.

213Rodbertus, Schriften, Vol. 2, p. 25.

214Rodbertus, Schriften, Vol. 1, p. 250.

215Ibid., p. 295. This is another example of how Rodbertus spent his whole life rehashing the ideas he had expressed as early as 1842 in his Zur Erkenntnis unserer staatswirtschaftlichen Zustände: “However, some have gone so far, in relation to present conditions, as to ascribe the costs of the good not only to the wage of labor, but also to rents and capital profits. This view must therefore be comprehensively refuted. It has a twofold foundation: (a) an erroneous conception of capital that counts the wage of labor as capital in the same way it does materials and tools, whereas the wage in fact has the same status as rent and profit; (b) a confusion of the costs of the good and the outlays of the entrepreneur or the costs of the enterprise” (Zur Erkenntnis unserer staatswirtschaftlichen Zustände, p. 14).

216Rodbertus, Schriften, Vol. 1, p. 304. Similarly, Rodbertus had already written the following: “We must distinguish between capital in its narrow or in its wider sense—i.e., the fund of enterprise. The former comprises the actual reserves in tools and materials, the latter the fund necessary for running an enterprise under present conditions of the division of labor. The former is capital absolutely necessary to production, and the latter achieves such relative necessity only by force of present conditions. Hence only the former is capital in the strict and proper meaning of the term; this alone is completely congruent with the concept of national capital” (Ibid., pp. 23–4).

217Rodbertus, Schriften, Vol. 1, p. 292.

218Rodbertus, Schriften, Vol. 2, p. 136.

219Rodbertus, Schriften, Vol. 1, p. 61.

220Incidentally, the worst memorial of all was bestowed upon Rodbertus by the editors who published his work after his death. These learned gentlemen, Professor [Adolph] Wagner, Dr. [Theophil] Kozak, Moritz Wirth, and various others, squabble in their respective prefaces to the volumes of his posthumous writings like a crowd of unruly servants in an antechamber, and use them to give vent to personal tittle-tattle and jealousies and to insult each other in public. They do not even bother to pay Rodbertus the most basic level of respect, omitting to establish the date of composition of the various individual manuscripts that he left. It fell to [Franz] Mehring, for example, to advise them that the oldest manuscript of Rodbertus that had been found did not date from 1837, as Professor Wagner had arbitrarily decided, but from 1839 at the earliest, since its first few lines refer to events associated with the Chartist movement that took place in that year—something that a professor of political economy ought to know. Professor Wagner, who constantly annoys the reader of his prefaces to Rodbertus with his pomposity and harps on about the “excessive demands on his time,” and who addresses himself solely to his learned colleagues over the heads of the masses of ordinary mortals, accepted Mehring’s elegant correction before the assembled academics in silence, like the great man that he was. Professor Diehl likewise simply corrected the date from 1837 to 1839 in the Handwörterbuch der Staatswissenschaften without so much as a word to advise the reader when and by whom he had been thus enlightened.

    Crowning it all is the “popular,” “new and inexpensive edition” [of Rodbertus’s Zur Beleuchtung der socialen Frage] by Puttkamer and Muehlbrecht in 1899, which some of the quarrelling editors peacefully collaborated to produce, except for the fact that they carried their squabbles over into their new prefaces. In this edition, the previous Volume 2 of the Wagnerian edition has now been made Volume 1, but Wagner himself is casually allowed to continue referring to “Volume 2” in the introduction to Volume 3; the first Letter on Social Problems has ended up in Volume 3, the second and third in Volume 2 and the fourth in Volume 1; the sequence of the Letters on Social Problems, of the Controversies, of the parts of Zur Beleuchtung der socialen Frage forms a chaos more impenetrable than the stratification of the Earth’s crust after a series of volcanic eruptions, and the same can be said for the ordering of these volumes, the chronological and logical ordering in general, and the dates of publication and composition; finally, Rodbertus’s earliest manuscript is dated 1837, probably in deference to Professor Wagner, despite the fact that Mehring had drawn attention to the error in 1894, five years before the publication of this new edition!! If a comparison is made with Mehring’s and Kautsky’s posthumous editions of Marx’s writings, published by Dietz, it will be seen how such seemingly external details reflect deeper connections: the care and attention accorded to the scientific heritage of the doyens of the class-conscious proletariat contrasts with the manner in which the official scholars of the bourgeoisie squander the legacy of a man, who according to their own biased narrative was a first-rate genius! We might cite Rodbertus’s own motto here: suum cuique [“to each his own” or “to each what he deserves”].

221An essay in Otechestvennye zapiski (Jottings from Our Native Land), May 1883.

222An essay in the review Russkaya Mysl (Russian Thought), September 1889.

223Vorontsov, in Otechestvennye zapiski, Vol. 5: “A Contemporary Survey,” p. 4.

224Ibid., p. 10.

225Ibid., p. 14.

226Vorontsov, Outlines of Economic Theory (St. Petersburg: 1895), pp. 157 ff.

227Vorontsov, “Militarism and Capitalism” in Russkaya Mysl (1889), Vol. 9, p. 78.

228Ibid., p. 80.

229Ibid., p. 83. Cf. Vorontsov, Outlines of Economic Theory, p. 196.

230Cf. Danielson, Ocherki nashego poreformmenogo obshchestvennogo khoziaistva (Outlines of Our Post-Reform Social Economy) [first published in 1880 in the Russian magazine Slovo (Word)], in particular pp. 202–5, 338–41.

231In his essay “On the Characteristics of Economic Romanticism” (1897), Vladimir Ilyich [Lenin] demonstrates in detail that there is a striking similarity between the position of the Russian “Populists” and Sismondi’s conception. [See V. I. Lenin, Collected Works, Vol. 2, pp. 133–265.]

232Danielson, Ocherki nashego poreformmenogo obshchestvennogo khoziaistva, p. 322. Frederick Engels appraises the situation in Russia differently. He repeatedly tries to explain to Danielson that Russia cannot avoid large-scale industrial development, and that its sufferings are merely the typical contradictions of capitalism. Thus he writes on September 22, 1892: “Now I maintain, that industrial production nowadays means grande industrie, steam, electricity, self-acting mules, power looms, finally machines that produce machinery. From the day Russia introduced railways, the introduction of these modern means of production was a foregone conclusion. You must be able to repair your own locomotives, wagons, railways, and that can only be done cheaply if you are able to construct those things at home, that you intend to repair. From the moment warfare became a branch of the grande industrie (ironclad ships, rifled artillery, quickfiring and repeating cannons, repeating rifles, steel covered bullets, smokeless powder, etc.), la grande industrie, without which all these things cannot be made, became a political necessity. All these things cannot be had without a highly developed metal manufacture. And that manufacture cannot be had without a corresponding development in all other branches of manufacture, especially textiles.” [See Marx and Engels Collected Works, Vol. 49 (New York: International Publishers, 2001), p. 535.] Subsequently in the same letter, Engels states: “So long as Russian manufacture is confined to the home market, its product can only cover home consumption. And that can only slowly increase, and, as it seems to me, ought even to decrease under present Russian conditions. For it is one of the necessary corollaries of grande industrie that it destroys its own home market by the very process by which it creates it. It creates it by destroying the basis of the domestic industry of the peasantry. But without domestic industry the peasantry cannot live. They are ruined as peasants; their purchasing power is reduced to a minimum; and until they, as proletarians, have settled down into new conditions of existence, they will furnish a very poor market for the newly arisen factories.

    “Capitalist production being a transitory economical phase, is full of internal contradictions that develop and become evident in proportion as it develops. This tendency to destroy its own market at the same time it creates it, is one of them. Another one is the insoluble situation to which it leads, and that is developed sooner in a country without a foreign market, like Russia, than in countries that are more or less capable of competing on the open world market. This situation without an apparent issue finds its issue, for the latter countries, in commercial revulsions, in the forcible opening of new markets. But even then the cul-de-sac stares one in the face. Look at England. The last new market that could bring on a temporary revival of prosperity by its being thrown open to English commerce is China. Therefore English capital insists upon constructing Chinese railways. But Chinese railways mean the destruction of the whole basis of Chinese small agriculture and domestic industry, and as there will not even be the counterpoise of a Chinese grande industrie, hundreds of millions of people will be placed in the impossibility of living. The consequence will be a wholesale emigration such as the world has not yet seen, a flooding of America, Asia, and Europe by the hated Chinaman, a competition for work with the American, Australian, and European workman on the basis of the Chinese standard of life, the lowest of all—and if the system of production has not been changed in Europe before that time, it will have to be changed then” (Ibid., pp. 537–8).

    Although he closely followed developments in Russia and showed a keen interest in them, Engels studiously declined to intervene in the Russian dispute. In his letter of November 24, 1894, i.e. shortly before his death, he gives the following explanation: “I am daily and weekly assailed by Russian friends to reply to Russian reviews and books in which the words of our author are not only misinterpreted but misquoted and where they say my interference would suffice to set the matter right. I have constantly declined doing so, because I cannot, without giving up real and serious work, be dragged into controversies going on in a faraway country, in a language that I do not yet read with as much ease as the better known Western languages, and in a literature whereof at best I but see occasional fragments and where it is utterly impossible for me to follow the debate closely and in all its phases and passages. There are people everywhere who, in order to defend a position once taken up by them, do not shrink from any distortion or unfair maneuver; and if this is the case with the writings of our author, I am afraid I should get no better treatment and be compelled, finally, to interfere in the debate, both for other people’s sake and my own” (See Marx and Engels Collected Works, Vol. 50, p. 372).

233Incidentally, the surviving advocates of “Populist” pessimism, and Vorontsov in particular, have remained loyal to their conception to the last, in spite of all that has happened in Russia in the meantime—a fact that says more for their character than for their intelligence. In 1902, Vorontsov wrote the following in reference to the 1900–02 crisis: “The doctrinaire dogma of the Neo-Marxists rapidly loses its power over people’s minds. That the newest successes of the individualists are ephemeral has obviously dawned even on their official advocates … In the first decade of the twentieth century, we come back to the same views about economic development in Russia that had been the legacy of the 1870s.” (Cf. the review Political Economics, October 1902, quoted by A. Finn Yenotayevski in The Contemporary Economy of Russia 1890–1910 [St. Petersburg: 1911], p. 2.) Even today, then, this last of the “Populist” Mohicans deduces the “ephemeral character” of economic reality rather than that of his own theory, and provides a living refutation of Barrère’s dictum: “Il n’y a que les morts qui ne reviennent pas” [Only the dead do not return].

234Published in Sozialdemokratisches Zentralblatt, Vol. 3, No. 1.

235Peter Struve, Kriticheskie zametki k voprosu ob ekonomicheskom razvitii Rossii (Critical Comments on the Problem of Economic Development in Russia) [Moscow: 1894].

236Peter Struve, “On Capitalist Development in Russia,” in Sozialdemokratisches Zentralblatt, Vol. 3, No. 1, p. 251.

237Ibid., p. 255.

238Ibid., p. 252.

239Ibid., p. 260. “Where [Struve] is decidedly wrong, is in comparing the present state of Russia with that of the United States, in order to refute what he calls your pessimistic views of the future. He says the evil consequences of modern capitalism in Russia will be as easily overcome as they are in the United States. There he quite forgets that the United States are modern, bourgeois, from the very origin; that they were founded by petty-bourgeois and peasants who ran away from European feudalism in order to establish a purely bourgeois society. Whereas in Russia, we have a groundwork of a primitive communistic character, a pre-civilization, a society of gentes, crumbling to ruins, it is true, but still serving as the groundwork, the material upon which the capitalistic revolution (for it is a real social revolution) acts and operates. In America, a monetary economy has been fully established for more than a century, in Russia, natural economy was all but exclusively the rule. Therefore it stands to reason that the change, in Russia, must be far more violent, far more incisive, and accompanied by immensely greater sufferings than it can be in America” (Engels to Danielson, October 17, 1893). [See Marx and Engels Collected Works, Vol. 50, p. 213.]

240Struve, Kriticheskie zametki k voprosu ob ekonomicheskom razvitii Rossii, p. 284.

241Professor Schmoller, among others, clearly demonstrates the reactionary dimension of the German professors’ theory of “Three Empires” (viz. Great Britain, Russia, and the U.S.). In his secular treatment of trade policy, the venerable scholar wistfully shakes his head at the “neo-mercantilist” (he means imperialist) designs of the three arch-villains. “In the interests of a higher intellectual, moral, and aesthetic civilization,” and of “social progress,” he demands a strong German navy and a European Customs Union to stand up to England and the U.S. “Out of the economic tension of the world there arises the prime duty for Germany to create for herself a strong navy, so as to be prepared for battle in the case of need, and to be desirable as an ally to the World Powers.” However, as Professor Schmoller says elsewhere, he does not wish to blame these powers for embarking on the path of large-scale colonial expansion once more. “She neither can nor ought to pursue a policy of conquest like the Three World Powers, but she must be able, if necessary, to break a foreign blockade of the North Sea in order to protect her own colonies and her vast commerce, and she must be able to offer the same security to the states with whom she forms an alliance. It is the task of the Three-Partite Union (Germany, Austro-Hungary, and Italy) to cooperate with France toward imposing some restraint, desirable for the preservation of all other states, on the overaggressive policy of the Three World Powers that constitutes a threat to all smaller states, and to ensure moderation in conquests, in colonial acquisitions, in the immoderate and unilateral policy of protective tariffs, in the exploitation and maltreatment of all weaker elements. The objectives of all higher intellectual, moral and aesthetic civilization and of social progress depend on the fact that the globe should not be divided up among Three World Empires in the twentieth century, that these Three Empires should not establish a brutal neo-mercantilism” (Die Wandlungen in der europäischen Handelspolitik des 19 Jahrhunderts: eine Säkularbetrachtung [Changes in European Trade Policy During the 19th Century: A Secular Treatment], in Jahrbuch für Gesetzgebung, Verwaltung und Volkswirtschaft, Vol. 29, p. 381).

242Sergei Bulgakov, O rynkakh pri kapitalisticheskom proizvodstve (On the Markets of Capitalist Production. A Study in Theory) (Moscow: A.G. Kolchugin, 1897), p. 15.

243Ibid., p. 32, footnote.

244Ibid., p. 27.

245Ibid., pp. 2–3.

246Ibid., pp. 50, 55.

247Ibid., pp. 132 ff.

248Ibid., p. 20.

249Bulgakov’s italics.

250Bulgakov, O rynkakh pri kapitalisticheskom proizvodstve, p. 161.

251Ibid., p. 167.

252Ibid., p. 210 (my italics—R. L.).

253Ibid., p. 238.

254Ibid, p. 199.

255Karl Bücher, Die Entstehung der Volkswirtschaft: [Vörtrag und Versuche] (The Emergence of Economies: Lectures and Investigations), fifth edition (Tübingen: H. Laupp, 1906), p. 147. The most recent contribution in this field is that of Professor [Werner] Sombart, according to whom we are not becoming more integrated into the world economy but quite the opposite—we are moving further and further away from it. “I maintain, on the contrary, that the civilized nations are not considerably more, but in fact less interconnected through commercial relations today in relation to their economy as a whole. Individual national economies are not more but rather less integrated into the world market than they were a hundred or fifty years ago. At least … it would be wrong to assume that international trade relations are increasing in relative importance for the modern national economy. The opposite is the case.” Sombart scornfully rejects the assumption of an increasing international division of labor, of a growing need for external markets resulting from the internal market’s inability to expand. For his part, Sombart is convinced that “the individual national economies will become ever more complete microcosms and that the importance of the internal market is increasingly surpassing that of the world market for all branches of industry” (Die Deutsche Volkswirtschaft im Neunzehhte. Jahrhundert [The German National Economy in the Nineteenth Century], second edition (Berlin: Georg Blondi Verlag, 1909), pp. 399–420]. This devastating discovery in fact presupposes an acceptance of the bizarre model that the professor has invented, which, for some unknown reason, considers “exporting countries” to be only those that pay for their imports with their surplus of agricultural products over and above their own needs—i.e. those that pay “with the soil.” In this model, Russia, Romania, the U.S., and Argentina are “exporting countries,” but Germany, the U.K., and Belgium are not. Since, with capitalist development, the surplus of agricultural products will sooner or later be absorbed by the needs of the internal market in Russia and the U.S., too, it is evident that there will be fewer and fewer “exporting countries” in the world, and thus that the international economy will disappear. Another of Sombart’s discoveries is that the great capitalist countries, which are “non-exporting” ones, increasingly obtain “free” imports in the form of interest on exported capital. For Professor Sombart, however, neither capital exports nor exports of industrial commodities count: “In the course of time we shall probably get to a point where we import without exporting” (p. 422). How modern, sensational, and dandy!

256Bulgakov, O rynkakh pri kapitalisticheskom proizvodstve, p. 236. The same view is formulated even more forcefully by Lenin: “The romanticists [as he calls the skeptics] argue as follows: the capitalists cannot consume the surplus value; therefore they must dispose of it abroad. I ask: Do the capitalists perhaps give away their products to foreigners for nothing, throw it into the sea, maybe? If they sell it, it means that they obtain an equivalent. If they export certain goods, it means that they import others” (Ökonomische Studien und Artikel, p. 2). [See V. I. Lenin, Collected Works, Vol. 2, p. 134.] Incidentally, Lenin’s explanation of the role of external trade in capitalist production is far more correct than that of Struve and Bulgakov.

257Theorie und Geschichte der Handelskrisen in England, p. 23. [Studies on the Theory and History of Commercial Crises in England, in Value, Capitalist Dynamics, and Money, Vol. 18, p. 71.]

258Ibid., p. 34. [Studies on the Theory and History of Commercial Crises in England, in Value, Capitalist Dynamics, and Money, Vol. 18, p. 78.]

259Ibid., p. 333.

260Ibid., p. 191.

261Ibid., p. 231, italics in the original. [Studies on the Theory and History of Commercial Crises in England, in Value, Capitalist Dynamics, and Money, Vol. 18, p. 108.]

262Ibid., p. 305. [Studies on the Theory and History of Commercial Crises in England, in Value, Capitalist Dynamics, and Money, Vol. 18, p. 78.]

263Ibid., p. 191.

264Ibid., p. 27. [Studies on the Theory and History of Commercial Crises in England, in Value, Capitalist Dynamics, and Money, Vol. 18, pp. 72–3.]

265Ibid., p. 58.

266V. I. Lenin, Ökonomische Studien und Artikel: Zur Charakterisierung des ökonomischen Romantizismus (St. Petersburg: 1899), p. 20 [my emphasis—R. L.]. [See V. I. Lenin, “A Characterization of Economic Romanticism (Sismondi and Our Native Sismondists),” in Collected Works, Vol. 2, pp. 133–265]. Incidentally, the same author asserts that expanded reproduction begins only with capitalism. He fails to realize that with simple reproduction, which he takes to be the rule for all precapitalist modes of production, we would probably not have advanced beyond the stage of the Paleolithic scraper even today.

267Karl Kautsky, “Krisentheorien,” Die Neue Zeit, Vol. 20, Part 2, p. 116. By extending the schema of expanded reproduction, Kautsky offers an arithmetic proof to Tugan-Baranovsky that consumption must grow, and more specifically “in the precise ratio as the bulk of producer goods in terms of value.” Here two remarks are called for: firstly, like Marx, Kautsky disregards increases in the productivity of labor within the schema, such that consumption appears greater than it would in reality. Secondly, the increase in consumption to which Kautsky refers here is itself the consequence, the result of expanded reproduction, rather than its foundation or its purpose; it is mainly caused by the growth of variable capital, the increasing employment of additional workers. However, the maintenance of these workers cannot be considered to be the purpose or the task of the expansion of reproduction—any more, for that matter, than can the increasing personal consumption of the capitalist class. Kautsky’s argument indeed demolishes Tugan-Baranovsky’s particular caprice, his whim of devising expanded reproduction with an absolute decrease in consumption. By contrast, Kautsky does not engage with the fundamental problem of the relation between production and consumption from the standpoint of the process of reproduction, although he does state the following elsewhere in the same essay: “With the capitalists growing richer, and the workers they exploit increasing in numbers, they constitute between them a market for the consumer goods produced by capitalist big industry that expands continually, yet it does not grow as rapidly as the accumulation of capital and the productivity of labor, and must therefore remain inadequate. An additional market is required for these consumer goods, a market outside their own province among those occupational groups and nations whose mode of production is not yet capitalistic. This market is found and also widens increasingly, but the expansion is again too slow, since the additional market is not nearly so elastic and capable of expansion as the capitalist productive process. As soon as capitalist production has developed to the big industry stage, as in England already in the first quarter of the nineteenth century, it is capable of expanding by leaps and bounds so as soon to out distance all expansions of the market. Every period of prosperity subsequent to a considerable extension of the market is thus from the outset doomed to an early end—the inevitable crisis. This, in brief, is the theory of crises established by Marx, and, as far as we can see, generally accepted by the ‘orthodox’ Marxists” (Ibid., p. 80). Kautsky, however, is not concerned to harmonize this conception of the realization of the total social product with Marx’s schema of expanded reproduction, perhaps because, as the above quotation also shows, he deals with the problem solely from the standpoint of crises, i.e. from the standpoint of the total social product as an undifferentiated mass of commodities and not from the standpoint of its differentiation in the process of reproduction.

    L. Boudin seems to come closer to this last question, giving the following formulation in his brilliant review of Tugan-Baranovsky: “With a single exception to be considered below, the existence of a surplus product in capitalist countries does not put a spoke in the wheel of production, not because production will be distributed more efficiently among the various spheres, or because the manufacture of machinery will replace that of cotton goods. The reason is rather that, capitalist development having begun sooner in some countries than in others, and because even today there are still some countries that have no developed capitalism, the capitalist countries in truth have at their disposal an outside market in which they can get rid of their products that they cannot consume themselves, no matter whether these are cotton or iron goods. We would by no means deny that it is significant if iron goods replace cotton goods as the main products of the principal capitalist countries. On the contrary, this change is of paramount importance, but its implications are rather different from those ascribed to it by Tugan-Baranovsky. It indicates the beginning of the end of capitalism. So long as the capitalist countries exported commodities for the purpose of consumption, there was still a hope for capitalism in these countries, and the question did not arise how much and how long the noncapitalist outside world would be able to absorb capitalist commodities. The growing share of machinery at the cost of consumer goods in what is exported from the main capitalist countries shows that areas that were formerly free of capitalism, and therefore served as a dumping-ground for its surplus products, are now drawn into the whirlpool of capitalism. It shows that, since they are developing a capitalism of their own, they can by themselves produce the consumer goods they need. At present they still require machinery produced by capitalist methods since they are only in the initial stages of capitalist development. But all too soon they will need them no longer. Just as they now make their own cotton and other consumer goods, they will in future produce their own ironware. Then they will not only cease to absorb the surplus produce of the essentially capitalist countries, but they will themselves produce surplus products that they can place only with difficulty” (Boudin, “Mathematische Formeln gegen Karl Marx,” Die Neue Zeit, Vol. 25, Part 1, p. 604). Here, Boudin offers very important perspectives on the major interconnections in the development of international capitalism. Furthermore, in this context he is logically brought on to the question of imperialism. Unfortunately, as he brings his sharp analysis to a climax, he ends up taking a wrong turn by ranging the entire militaristic production and the system of international capital exports to noncapitalist countries under the concept of “reckless expenditure.”—Incidentally, it is worth noting that, like Kautsky, Boudin considers that the law of the more rapid growth of the department of means of production relative to that of the department of means of consumption is a delusion of Tugan-Baranovsky’s.

268“Apart from natural conditions, such as the fertility of the soil, etc., and apart from the skill of independent and isolated producers (shown rather qualitatively in the high standard of their products than quantitatively in their mass), the level of the social productivity of labor is expressed in the relative extent of the means of production that one worker, during a given time, with the same degree of intensity of labor-power, turns into products. The mass of means of production with which he functions in this way increases with the productivity of his labor. But those means of production play a double role. The increase of some is a consequence, that of others is a condition, of the increasing productivity of labor. For example, the consequence of the division of labor (under manufacture) and the application of machinery is that more raw material is worked up in the same time, and therefore a greater mass of raw material and auxiliary substances enters into the labor process. On the other hand, the mass of machinery, beasts of burden, mineral manures, drainpipes, etc., is a condition of the increasing productivity of labor. This is also true of the means of production concentrated in buildings, furnaces, means of transport, etc. But whether condition or consequence, the growing extent of the means of production, as compared with the labor-power incorporated with them, is an expression of the growing productivity of labor. The increase of the latter appears, therefore, in the diminution of the mass of labor in proportion to the mass of means of production moved by it, or in the diminution of the subjective factor of the labor process as compared with the objective factor” (Capital, Vol. 1, p. 773). In another passage: “We have seen above that as the productivity of labor develops, and thus with the development of the capitalist mode of production—which develops the social productivity of labor more than all previous modes of production—the mass of means of production that are incorporated once and for all in the process in the form of means of labor, and function repeatedly in it over a longer or shorter period (buildings, machines, etc.) constantly grows, and that its growth is both premise and effect of the development of the social productive power of labor. The growth of wealth in this form, which is not only absolute but also relative (cf. Volume 1, Chapter 25, 2), is particularly characteristic of the capitalist mode of production. The material forms of existence of the constant capital, however, the means of production, do not consist only of such means of labor, but also of material for labor at the most varied stages of elaboration, as well as ancillary materials. As the scale of production grows, and the productive power of labor grows through cooperation, division of labor, machinery, etc., so does the mass of raw material, ancillaries, etc., that go into the daily reproduction process” (Capital, Vol. 2, pp. 218–9).

269In the preface to a collection of his Russian essays published in 1901, Struve states the following: “In 1894, when the author published his ‘Critical Comments on the Problem of Economic Development in Russia,’ he inclined in philosophy toward positivism, in sociology and economics toward outspoken, though by no means orthodox, Marxism. Since then, the author no longer sees the whole truth in the positivism and Marxism that is grounded in it [!], they no longer fully determine his view of the world. Malignant dogmatism that not only browbeats those who think differently, but spies upon their morals and psychology, regards such work as a mere ‘Epicurean instability of mind.’ It cannot understand that criticism in its own right is to the living and thinking individual one of the most valuable rights. The author does not intend to renounce this right, though he might constantly be in danger of being indicted for ‘instability’” (Struve, Miscellany [St. Petersburg: 1901]).

270Bulgakov, O rynkakh pri kapitalisticheskom proizvodstve, p. 252.

271Tugan-Baranovsky, Theorie und Geschichte der Handelskrisen in England, p. 229. [“Studies on the Theory and the History of Business Crises in England,” in Value, Capitalist Dynamics, and Money, Vol. 18, p. 106.]

272Capital, Vol. 1, pp. 726–7.

273Ibid., p. 727, Note 1.

274Capital, Vol. 2, p. 408.

275Ibid., p. 422.

276Ibid., p. 497.

277Marx, Das Kapital, Band 3, Teil 2 (Hamburg: Verlag von Otto Meissner, 1895), p. 21 [Karl Marx, Capital, Vol. 3, translated by David Fernbach (New York: Penguin, 1981), pp. 614–15. All further references to Vol. 3 of Capital are to this English-language edition—the Editors].

278Capital, Vol. 2, p. 448.

279Theories of Surplus Value, in Marx and Engels Collected Works, Vol. 24, p. 124.

280“It is never the original thinkers who draw the absurd conclusions. They rather leave that for the Says and McCullochs” (Capital, Vol. 2, p. 466). And—we might add—the Tugan-Baranovskys.

281These figures result from the difference between the amounts of constant capital in Department I under our assumption of technical progress, and those given in Marx’s schema.

282Theories of Surplus Value, in Marx and Engels Collected Works, Vol. 32, p. 116.

283Capital, Vol. 3, pp. 351–3.

284Theories of Surplus Value, in Marx and Engels Collected Works, Vol. 32, p. 154.

285Capital, Vol. 3, p. 420.

286“The greater the capital, the more developed the productivity of labor in general, the greater is also the volume of commodities found on the market, in circulation, in transition between production and consumption (individual and general), and the greater the certainty that each particular capital will find its conditions for reproduction readily available on the market.” Theories of Surplus Value, in Marx and Engels Collected Works, Vol. 32, pp. 115–16.

287Theories of Surplus Value, in Marx and Engels Collected Works, Vol. 32, p. 115–6. Marx’s emphasis.

288The importance of the cotton industry for English exports is apparent from the following figures:

    In 1893, cotton exports worth £64 million made up 23%, and iron and other metal exports not quite 17%, of the total export of manufactured goods (£277 million).

    In 1898, cotton exports worth £65 million made up 28%, and metal exports 22%, of the total export of manufactured goods (£233.4 million).

    In comparison, the figures for the German Empire give the following result: In 1898, cotton exports worth £11.595 million made up 5.75% of the total exports (£200.5 million). 5.25 billion yards of cotton bales were exported in 1898, 2.25 billion of them to India (Edgar Jaffé, “Die englische Baumwollindustrie und die Organization des Exporthandels,” Schmoller’s Jahrbücher, Vol. XXIV, p. 1,033).

    In 1908, British exports of cotton yarn alone amounted to £13.1 million (Statististisches Jahrbuch für das Deutsche Reich, 1910).

289For example, one-fifth of German aniline dyes, and one-half of its indigo, goes to countries such as China, Japan, British India, Egypt, Asiatic Turkey, Brazil, and Mexico.

290Capital, Vol. 1, pp. 751–2.

291The recent revelations of the British Blue Book [i.e., official report of Parliament] on the practice of the Peruvian Amazon Company, Ltd. in Putumayo have shown that, on the territory of the free republic of Peru, i.e. even without the political form of colonial domination, international capital is able to bring the indigenous inhabitants into a relation bordering on slavery in order to seize means of production from primitive countries in the most predatory fashion. Since 1900, this company of English and foreign capitalists has deposited approximately 4,000 tons of Putumayo rubber on the London market. During this time, 30,000 indigenous inhabitants were killed and most of the 10,000 survivors were crippled by beatings.

292Capital, Vol. 1, p. 727. Similarly in another passage: “To begin with, a portion of the surplus value (and the corresponding surplus produce in the form of means of subsistence) has to be transformed into variable capital, that is to say, new labor has to be bought with it. This is only possible if the number of laborers grows or if the labor time during which they work is prolonged … But that cannot be regarded as a method of accumulation that can be continuously used. The laboring population can increase, when previous unproductive workers are transformed into productive ones, or sections of the population who did not work previously, such as women and children, or paupers, are drawn into the production process. We leave this latter point out of account here. Finally, together with the growth of the population in general, the laboring population can grow absolutely. If accumulation is to be a steady, continuous process, then this absolute growth in population—although it may be decreasing in relation to the capital employed—is a necessary condition. An increasing population appears to be the basis of accumulation as a continuous process. But this presupposes an average wage that permits not only reproduction of the laboring population but also its constant growth” (Theories of Surplus Value, in Marx and Engels Collected Works, Vol. 32, p. 109–10).

293Capital, Vol. 1, pp. 794–9.

294A table published in the United States shortly before the American Civil War contains the following data on the value of the annual production of the slave states and the number of slaves employed, of which the majority worked on cotton plantations:

Year	Cotton: Dollars	Slaves
1800	5,200,000	893,041
1810	15,100,000	1,191,364
1820	26,300,000	1,543,688
1830	34,100,000	2,009,053
1840	74,600,000	2,487,255
1850	101,800,000	3,197,509
1851	137,300,000	3,200,000

([Algie Martin] Simons, “Klassenkämpfe in der Geschichte Amerikas” [Class Struggles in American History], Die Neue Zeit, [Vol. 28,] No. 7 [1909], p. 39.)

295[James] Bryce, a former English Minister, describes a typical example of such hybrid forms in the South African diamond mines: “The most striking sight at Kimberley, and one unique in the world, is furnished by the two so-called ‘compounds’ in which the natives who work in the mines are housed and confined. They are huge enclosures, unroofed, but covered with a wire netting to prevent anything from being thrown out of them over the walls, and with a subterranean entrance to the adjoining mine. The mine is worked on the system of three eight-hour shifts, so that the workman is never more than eight hours together underground. Round the interior of the wall are built sheds or huts in which the natives live and sleep when not working. A hospital is also provided within the inclosure, as well as a school where the work-people can spend their leisure in learning to read and write. No spirits are sold … Every entrance is strictly guarded, and no visitors, white or native, are permitted, all supplies being obtained from the store within, kept by the company. The De Beers mine compound contained at the time of my visit 2,600 natives, belonging to a great variety of tribes, so that here one could see specimens of the different native types from Natal and Pondoland, in the south, to the shores of Lake Tanganyika in the far north. They come from every quarter, attracted by the high wages, usually eighteen to thirty shillings a week, and remain for three months or more, and occasionally even for longer periods … In the vast oblong compound one sees Zulus from Natal, Fingos, Pondos, Tembus, Basutos, Bechuanas, Gungunhana’s subjects from the Portuguese territories, some few Matabili and Makalaka; and plenty of Zambesi boys from the tribes on both sides of that great river, a living ethnological collection such as can be examined nowhere else in South Africa. Even Bushmen, or at least natives with some Bushman blood in them, are not wanting. They live peaceably together, and amuse themselves in their several ways during their leisure hours. Besides games of chance, we saw a game resembling ‘fox and geese’ played with pebbles on a board; and music was being discoursed on two rude native instruments, the so-called ‘Kaffir piano’ made of pieces of iron of unequal length fastened side by side in a frame, and a still ruder contrivance of hard bits of wood, also of unequal size, which when struck by a stick emit different notes, the first beginning of a tune. A very few were reading or writing letters, the rest busy with their cooking or talking to one another. Some tribes are incessant talkers, and in this strange mixing-pot of black men one may hear a dozen languages spoken as one passes from group to group” (James Bryce, Impressions of South Africa [London: Macmillan, 1897], pp. 242 ff.).

    After several months of work, the Black workers generally leave the mine with the wages they have saved up; they return to their tribes, buy themselves a wife with their money, and resume their traditional way of life. See also in the same volume the most vivid description of the methods used in South Africa to solve the “labor problem.” Here we learn that Black people are forced to work in the mines and plantations of Kimberley, Witwatersrand, Natal, and Matabeleland by stripping them of all land and cattle, i.e. by depriving them of their means of existence, proletarianizing them and also demoralizing them with alcohol. (Later, when they are already within the “enclosure” of capital, spirits, to which they have just become accustomed, are strictly prohibited—the object of exploitation must be kept fit for use.) Finally, they are simply press-ganged into the wage system of capital by means of violence, imprisonment, and the whip.

296A typical example of such relations are those between Germany and Britain.

297In his History of British India, Mill lumps together testimonies from the most varied of sources (Mungo Park, Herodotus, [Comte de] Volney, [José de] Acosta, Garcilasso de la Vega, Abbé Grosier, [Sir John] Barrow, Diodorus, Strabo, and others) in the most indiscriminate and uncritical fashion in order to formulate the proposition that, under primitive conditions, the land belongs always and everywhere to the sovereign. He then proceeds to infer the following for India by analogy: “From these facts only one conclusion can be drawn, that the property of the soil resided in the sovereign; for if it did not reside in him, it will be impossible to show to whom it belonged” (James Mill, History of British India, 4th edition [London: J. Madden, 1840], Vol. 1, p. 311). Mill’s editor, H. H. Wilson who, as Professor of Sanskrit at Oxford University, had a precise knowledge of ancient Indian legal relations, provides an interesting commentary to this classical deduction by the bourgeois economist. Having characterized the author in his preface as a partisan who tailors the whole history of British India in order to justify the theories of [Jeremy] Bentham, and in so doing employs the most dubious means to give “a portrait of the Hindus that in no way resembles the original and almost outrages humanity,” Wilson adds the following footnote: “The greater part of the text and of the notes here is wholly irrelevant. The illustrations drawn from the Mahometan practice, supposing them to be correct, have nothing to do with the laws and rights of the Hindus. They are not, however, even accurate and Mr. Mill’s guides have misled him.” Wilson then contests outright the theory of the sovereign’s right of ownership in land, especially with reference to India (Ibid., p. 305, footnote). Henry Maine also considers that the British inherited their primary claim to ownership of all the land of India from their Muslim predecessors, although, to be sure, he recognizes that this claim is groundless: “The assumption that the English first made was one that they inherited from their Mahometan predecessors. It was that all the soil belonged in absolute property to the sovereign—and that all private property in land existed by his sufferance. The Mahometan theory and the corresponding Mahometan practice had put out of sight the ancient view of the sovereign’s rights that, though it assigned to him a far larger share of the produce of the land than any Western ruler has ever claimed, yet in nowise denied the existence of private property in land” (Village Communities in the East and West, Vol. 2, fifth edition [1890], p. 104). Maksim Kovalevsky, on the other hand, has thoroughly demonstrated that this alleged “Mahometan theory and practice” is merely a myth fabricated by the British: see his excellent study, written in Russian, Obshchinnoe zemlevladenie, prichiny, khod i posledstviia ego razlozheniia (Communal Land Ownership: The Causes, the Process, and the Consequences of its Disintegration) (Moscow: 1879), Part 1. Currently British scholars and, incidentally, their French counterparts, cleave to an analogous legend about China, for example, claiming that all the land there was formerly the property of the Emperor. Cf. the refutation of this legend by Dr. O. Franke, Die Rechtsverhältnisse am Grundeigentum in China (Legalities Relating to Ownership of Land in China) (Leipzig: Dieterich, 1903).

298“The partitions of inheritances and execution for debt levied on land are destroying the communities—this is the formula heard nowadays everywhere in India” (Maine, Village Communities in the East and West, p. 113).

299An example of this typical presentation of British colonial policy is offered by Lord Roberts of Kandahar, for many years the representative of British power in India. He can give no other explanation for the Indian Mutiny [of 1858] than mere “misunderstandings” of the paternalistic intentions of the British rulers: “the alleged unfairness of what was known in India as the land settlement, under which system the right and title of each landholder to his property was examined, and the amount of revenue to be paid by him to the paramount Power, as owner of the soil, was regulated … as peace and order were established, the system of land revenue, which had been enforced in an extremely oppressive and corrupt manner under successive native rulers and dynasties, had to be investigated and revised. With this object in view, surveys were made, and inquiries instituted into the rights of ownership and occupancy, the result being that in many cases it was found that families of position and influence had either appropriated the property of their humbler neighbors, or evaded an assessment proportionate to the value of their estates. Although these inquiries were carried out with the best intentions, they were extremely distasteful to the higher classes, while they failed to conciliate the masses. The ruling families deeply resented our endeavors to introduce an equitable determination of rights and assessment of land revenue … On the other hand, although the agricultural population greatly benefited by our rule, they could not realize the benevolent intentions of a Government that tried to elevate their position and improve their prospects” (Forty One Years in India [London: Macmillan, 1901], p. 233).

300In his Maxims on Government (translated from Persian into English in 1783), Timur states “And I commanded that they should build places of worship, and monasteries in every city; and that they should erect structures for the reception of travelers on the high roads, and that they should make bridges across the rivers. And I commanded that the ruined bridges should be repaired; and that bridges should be constructed over the rivulets, and over the rivers; and that on the roads, at the distance of one stage from each other, Kauruwansarai should be erected; and that guards and watchmen should be stationed on the road, and that in every Kauruwansarai people should be appointed to reside … And I ordained, whoever undertook the cultivation of waste lands, or built an aqueduct, or made a canal, or planted a grove, or restored to culture a deserted district, that in the first year nothing should be taken from him, and that in the second year, whatever the subject voluntarily offered should be received, and that in the third year, duties should be collected according to the regulation” (James Mill, History of British India, Vol. 2, fourth edition, pp. 493, 498).

301Count Warren, De l’État moral de la population indigène. Quoted by Kovalevsky, Obshchinnoe zemlevladenie, prichiny, khod i posledstviia ego razlozheniia (Communal Land Ownership: The Causes, the Process, and the Consequences of its Disintegration), p. 164.

302Historical and Descriptive Account of British India from the Most Remote Period to the Conclusion of the Afghan War by Hugh Murray, James Wilson, R. K. Gretille, Professor Jameson, William Wallace, and Captain [Clarence] Dalrymple (Edinburgh: Oliver & Boyd, 4th edition, 1843), Vol. 2, p. 427. Quoted by Kovalevsky, Obshchinnoe zemlevladenie, prichiny, khod i posledstviia ego razlozheniia (Communal Land Ownership: The Causes, the Process, and the Consequences of its Disintegration), p. 164.

303Victor v. Leyden, “Agrarverfassung und Grundsteuer in Britisch-Ostindien” (Land Tenure and Land Tax in British East India), Jahrbuch für Gesetzgebung, Verwaltung und Volkswirtschaft, Vol. 36, No. 4, p. 1,855.

304“When dying, the father of the family nearly always advises his children to live in unity, according to the example of their elders. This is his last exhortation, his dearest wish” (Adolphe Hanoteau and Aristide Letourneux, “La Kabylie et les Coûtumes Kabyles,” Droit Civil, Vol. 2, 1873, pp. 468–73). Incidentally, the authors deem it appropriate to introduce this striking description of communism within the kinship group with the following remark: “Within the industrious fold of the family association, all are united in a common purpose, all work for the general interest—but no one gives up his freedom or renounces his hereditary rights. In no other nation does the organization approach so closely to equality, being yet so far removed from communism.”

305“We must lose no time in dissolving the family associations, since they are the lever of all opposition against our rule” (Deputy Didier in the National Assembly of 1851).

306Quoted by Kovalevsky, Obshchinnoe zemlevladenie, prichiny, khod i posledstviia ego razlozheniia (Communal Land Ownership: The Causes, the Process, and the Consequences of its Disintegration), p. 217. As is well known, it has become the fashion in France since the Great Revolution to brand all opposition to the government an open or covert defense of feudalism.

307G. Anton, “Neuere Agrarpolitik in Algerien und Tunesien,” Jahrbuch für Gesetzgebung, Verwaltung und Volkswirtschaft (1900), pp. 1,341 ff.

308In his speech to the French Chamber of Deputies of June 20, 1912, M. Albin Rozet, rapporteur for the Commission for the Reform of the “Indigenat” [the system of administrative justice] in Algeria, stated that thousands of Algerians were migrating from the Setif district, and that 1,200 indigenous inhabitants had emigrated from Tlemcen to Syria during the preceding year. One immigrant wrote the following from his new home: “I have now settled in Damascus and am perfectly happy. There are many Algerians here in Syria who, like me, have emigrated. The government has given us land and facilities to cultivate it.” The Algerian government is resisting this emigration by denying passports to prospective emigrants. (Cf. Journal Officiel, June 21, 1912, pp. 1,594 ff.)

30977,379 chests were imported in 1854. There was a subsequent slight decline in imports owing to increased domestic production. Nevertheless, China remains the main purchaser from the Indian plantations. India produced just under 6,400 tons of opium in 1873–74, of which 6,100 tons were sold to the Chinese. India currently still exports 4,800 tons annually, worth some 150 million marks, almost exclusively to China and the Malay Archipelago.

310Quoted by Justus Scheibert, Der Krieg in China, 1900–1901 (Berlin: Weller, 1903), Vol. 2, p. 179.

311Ibid., p. 207.

312An Imperial Edict issued on the third day of the eighth moon in the tenth year of Xianfeng (September 6, 1860) contained the following declaration: “We have never forbidden England and France to trade with China, and for long years there has been peace between them and us. But three years ago the English, for no good cause, invaded our city of Canton, and carried off our officials into captivity. We refrained at that time from taking any retaliatory measures, because we were compelled to recognize that the obstinacy of the Viceroy Yeh had been in some measure a cause of the hostilities. Two years ago, the barbarian Commander [Lord] Elgin came north and we then commanded the Viceroy of Chihli, T’an Ting-hsiang, to look into matters preparatory to negotiations. But the barbarian took advantage of our unreadiness, attacking the Taku forts and pressing on to Tientsin. Being anxious to spare our people the horrors of war, we again refrained from retaliation and ordered Kuei Liang to discuss terms of peace. Notwithstanding the outrageous nature of the barbarians’ demands we subsequently ordered Kuei Liang to proceed to Shanghai in connection with the proposed Treaty of Commerce and even permitted its ratification as earnest of our good faith. In spite of all this, the barbarian leader [James] Bruce again displayed intractability of the most unreasonable kind, and once more appeared off Taku with a squadron of warships in the eighth Moon. Seng Ko Lin Ch’in thereupon attacked him fiercely and compelled him to make a rapid retreat. From all these facts it is clear that China has committed no breach of faith and that the barbarians have been in the wrong. During the present year the barbarian leaders Elgin and [Baptiste Louis] Gros have again appeared off our coasts, but China, unwilling to resort to extreme measures, agreed to their landing and permitted them to come to Peking for the ratification of the Treaty. Who could have believed that all this time the barbarians have been darkly plotting, and that they had brought with them an army of soldiers and artillery with which they attacked the Taku forts from the rear, and, having driven out our forces, advanced upon Tientsin!” Cf. J. O. Bland and E. T. Backhouse, China under the Empress Dowager (London: Hutchinson & Co., 1910), pp. 24–5. See also the chapter entitled “The Flight to Yehol” in the same work.

313The following savory episode in China’s internal history also occurred in the context of these heroic operations by the Europeans to open up China to commodity trade: fresh from looting the Manchu Emperor’s Summer Palace, the “Gordon of China” began a campaign against the rebels of Taiping, and even assumed command of the Imperial armed forces in 1863. It was the British Army, however, that suppressed the uprising. Nonetheless, while a significant number of Europeans, among them a French admiral, gave their lives to preserve China for the Manchu dynasty, the representatives of European commerce seized this opportunity to make money out of these conflicts, supplying arms both to the forces fighting to open up China to trade and to the rebels on whom they waged war. “Moreover, lured by the opportunity for making some money, the worthy merchant supplied both armies with arms and munitions, and since the rebels had greater difficulties in obtaining supplies than the Emperor’s forces and were therefore compelled and prepared to pay higher prices, transactions with them were given priority, thus permitting them to resist not only the troops of their own government, but also those of England and France” (Max von Brandt, 33 Jahre in Ostasien [33 Years in East Asia] [Leipzig: G. Wigand, 1911], Vol. 3, p. 11).

314Dr. O. Franke, Die Rechtsverhältnisse am Grundeigentum in China, p. 82.

315Bland and Backhouse, China under the Empress Dowager, p. 338.

316Ibid., p. 337.

317In China, domestic production has to a great extent persisted until recently even among the bourgeoisie and even in such large and established commercial towns such as Ningbo with its population of 300,000. “Only a generation ago, the family’s shoes, hats, shirts, etc., were made by the women themselves. At that time, it was practically unheard-of for a young woman to buy from a merchant what she could have made with the labor of her own hands” (Dr. Nyok-Ching Tsur, Die gewerblichen Betriebsformen der Stadt Ningpo [Forms of Industry in the Town of Ningpo] [Tübingen: H.. Laupp, 1909], p. 51.

318In the final chapter of the history of the peasant economy, this relation is in fact overturned under the impact of capitalist production. Once the small peasants have been ruined, domestic production frequently becomes the main occupation of the men, who work for capitalists either under the putting-out system or as wage-laborers in the factory, while agricultural production devolves entirely on the women, old people, and children. A typical instance is the small peasant in Württemberg.

319William A. Peffer, The Farmer’s Side. His Troubles and Their Remedy (New York: D. Appleton & Co., 1891), Part 2, “How We Got Here,” Chapter 1, “Changed Conditions of the Farmer,” pp. 56–7. Cf. also A. M. Simmons, The American Farmer, 2nd edition (Chicago: Charles Kerr, 1906), pp. 74 ff.

320“Report of the U.S. Commissioner of Agriculture for the year 1867” (Washington: 1868), quoted in Paul Lafargue, “Getreidebau und Getreidehandel in den Vereinigten Staaten” (Cereal Cultivation and the Grain Trade in the United States), Die Neue Zeit, Vol. 3, No. 12 (1885), p. 344. This essay on grain cultivation and the grain trade in the U.S. was first published in a Russian journal in 1883.

321“The three Revenue Acts of June 30, 1864, practically formed one measure, and that probably the greatest measure of taxation that the world has seen … The Internal Revenue Act was arranged, as Mr. David A. Wells has said, on the principle of the Irishman at Donnybrook Fair: ‘Whenever you see a head, hit it, whenever you see a commodity, tax it.’” F. W. Taussig, The Tariff History of the United States (New York and London: Putnam, 1888), pp. 163–4.

322Taussig, The Tariff History of the United States, pp. 166–7.

323“The necessity of the situation, the critical state of the country, the urgent need of revenue, may have justified this haste, which, it is safe to say, is unexampled in the history of civilized countries” (Taussig, The Tariff History of the United States, p. 168).

324Peffer, The Farmer’s Side, pp. 58 ff.

325Ibid., p. 6. In the mid-1880s, [Max] Sering estimated the cash necessary for a “very modest beginning” of the smallest farm in the northwest at $1,200–1,400 (Sering, Die landwirtschaftliche Konkurrenz Nordamerikas [Agricultural Competition in North America] [Leipzig: Danker und Humblot, 1887, p. 431].

326Paul Lafargue, “Getreidebau und Getreidehandel in den Vereinigten Staaten” (Cereal Cultivation and the Grain Trade in the United States), Die Neue Zeit, Vol. 3, No. 12 (1885), p. 345.

327The Thirteenth Annual Report of the U.S. Commissioner of Labor (Washington: 1899) compiles the following figures detailing the superiority of mechanized over manual labor:

Type of work	Labor time per unit
	Machine		Manual
	hours	minutes	hours	minutes
Planting small corn	—	32.7	10	55
Harvesting and threshing small corn	1	—	46	40
Planting corn	—	37.5	6	15
Cutting corn	3	4.5	5	—
Shelling corn	—	3.6	66	40
Planting cotton	1	3	8	48
Cultivating cotton	12	5	60	—
Mowing grass (scythe v. mower)	1	0.6	7	20
Harvesting and baling hay	11	3.4	35	30
Planting potatoes	1	2.5	15	—
Planting tomatoes	1	4	10	—
Cultivating and harvesting tomatoes	134	5.2	324	20

328Wheat exports from the U.S. to Europe:

Year	Million bushels
1868–69	17.9
1874–75	71.8
1879–80	153.2
1885–86	57.7
1890–91	55.1
1890–1900	101.9

[Franz von] Juraschek, Übersichten der Weltwirtschaft (Berlin: Verlag für Sprach und Handelswissenschaft, 1896), Vol. 7, Part 1, p. 32.

    Simultaneously, the price per bushel wheat loco farm (in cents) fell as follows:

1870–79	105
1880–89	83
1895	51
1896	73
1897	81
1898	58

    After reaching a low point of 58 cents per bushel in 1898, the price of wheat subsequently began to rise again:

1900	62
1901	62
1902	63
1903	78
1904	92

Ibid., p. 18.

    According to the “Monthly Returns on External Trade” (Monatliche Nachweise über den Auswärtigen Handel), in June 1912, the price of wheat (in marks) per 1,000 kg. was:

Berlin	227.82
New York	178.08
Mannheim	247.93
London	170.96
Odessa	173.94
Paris	243.69

329Peffer, The Farmer’s Side, Part 1, “Where We Are,” Chapter 2, “Progress of Agriculture,” pp. 30–1.

330Ibid., p. 4.

331Sering, Die landwirtschaftliche Konkurrenz Nordamerikas, p. 433.

332Peffer, The Farmer’s Side, pp. 34.

333Ibid., pp. 35–6.

334Quoted by Danielson, Outlines of Our Social Economy, p. 224.

335In 1901, 49,199 people entered Canada as immigrants. In 1911, the number of immigrants was more than 300,000, of which 138,000 were British and 134,000 from the U.S. According to a report from Montreal at the end of May 1912, the influx of American farmers continued into the spring of the present year.

336“Travelling in western Canada, I have visited only one farm of less than a thousand acres. According to the census of the Dominion of Canada, in 1881, when the census was taken, no more than 9,077 farmers occupied 2,384,337 acres of land between them; accordingly, the share of an individual (farmer) amounted to no less than 2,047 acres—in no state of the Union is the average anywhere near that” (Sering, Die landwirtschaftliche Konkurrenz Nordamerikas, p. 376). While large-scale farming was not very widespread in Canada in the early 1880s, Sering does describe the “Bell Farm,” owned by a limited company, that comprised no fewer than 22,680 hectares, and was obviously modeled on the pattern of the Dalrymple farm. In the 1880s, Sering, who viewed the prospects of competition from Canada with some skepticism, estimated the “fertile belt” of western Canada at 311,000 square kilometers, or an area three-fifths the size of Germany: he reckoned that only 38.4 million acres of this area were arable land for extensive cultivation, and that, at the most, 15 million acres were prospective wheat land (Sering, Die landwirtschaftliche Konkurrenz Nordamerikas, pp. 337–8). According to the estimates of the Manitoba Free Press in mid-June 1912, 11.2 million acres were sown with spring wheat in Canada this year, compared to 19.2 million acres in the United States. (Cf. Berliner Tageblatt und Handelszeitung, No. 305, June 18, 1912.)

337Sering, Die landwirtschaftliche Konkurrenz Nordamerikas, pp. 361 ff.

338Ernst Schultze, “Das Wirtschaftsleben der Vereinigten Staaten,” Jahrbuch für Gesetzgebung, Verwaltung und Volkswirtschaft, No. 17, 1912, p. 1,724.

339Article 9.

340“Moshesh, the great Basuto leader, to whose courage and statesmanship the Basutos owed their very existence as a people, was still alive at the time, but constant war with the Boers of the Orange Free State had brought him and his followers to the last stage of distress. Two thousand Basuto warriors had been killed, cattle had been carried off, native homes had been broken up and crops destroyed. The tribe was reduced to the position of starving refugees, and nothing could save them but the protection of the British government that they had repeatedly implored” (C. P. Lucas, A Historical Geography of the British Colonies, Part 2, Vol. 4, Geography of South and East Africa (Oxford, UK: Clarendon Press, 1904, p. 39).

341The eastern section of the territory is Mashonaland, where, with the permission of King Lobengula, who claimed it, the British South Africa Company first established themselves. (Lucas, p. 77).

342The railway network (in kilometers).

Year	Europe	America	Asia	Africa	Australia
1840	2,925	4,754	—	—	—
1850	23,405	15,064	—	—	—
1860	51,862	53,935	1,393	455	367
1870	104,914	93,139	8,185	1,786	1,765
1880	168,983	174,666	16,287	4,646	7,847
1890	223,869	331,417	33,724	9,386	18,889
1900	283,878	402,171	60,301	20,114	24,014
1910	333,848	526,382	101,916	36,854	31,014

Accordingly, the increases were as follows (percentages):

Year	Europe	America	Asia	Africa	Australia
1840–50	710	215	—	—	—
1850–60	121	257	—	—	—
1860–70	102	73	486	350	350
1870–80	61	88	99	156	333
1880–90	32	89	107	104	142
1890–1900	27	21	79	114	27

343Tugan-Baranovsky, Theorie und Geschichte der Handelskrisen in England, p. 74.

344Sismondi, Nouveaux Principes, Vol. 1, Book 4, Chapter 4, “Commercial Wealth Follows the Growth of Income,” pp. 368–70. [New Principles, pp. 596–7.]

345A representative of the company producing Fowler’s ploughs, an engineer named [Max] Eyth, gives the following account: “Now there was a feverish exchange of telegrams between Cairo, London, and Leeds.—‘When can Fowler’s deliver 150 steam ploughs?’—Answer: ‘Working to capacity, within one year’—‘Not good enough. Expect unloading Alexandria by spring 150 steam ploughs.’—A.: ‘Impossible.’—The works at that time were barely big enough to turn out three steam ploughs per week. N.B. a machine of this type costs £2,500 so that the order involved £m. 3.75. Isma′il Pasha’s next wire: ‘Quote cost immediate factory expansion. Viceroy willing foot bill.’—You can imagine that Leeds made hay while the sun shone. And in addition, other factories in England and France as well were made to supply steam ploughs. The Alexandria warehouses, where goods destined for the viceregal estates were unloaded, were crammed to the roof with boilers, wheels, drums, wirerope, and all sorts of chests and boxes. The second-rate hostelries of Cairo swarmed with newly qualified steam ploughmen, promoted in a hurry from anvil or share-plough, young hopefuls, fit for anything and nothing, since every steam plough must be manned by at least one expert pioneer of civilization. Wagonloads of this assorted cargo were sent into the interior, just so that the next ship could unload. You cannot imagine in what condition they arrived at their destination, or rather anywhere but their destination. Ten boilers were lying on the banks of the Nile, and the machine to which they belonged was ten miles further. Here was a little heap of wirerope, but you had to travel another twenty hours to find the appropriate pulleys. In one place an Englishman who was to set up the machines squatted desolate and hungry on a pile of French crates, and in another place his mate had taken to native liquor in his despair. Effendis and Katibs, invoking the help of Allah, rushed to and fro between Siut and Alexandria and compiled endless lists of items the names of which they did not even know. And yet, in the end, some of this apparatus was set in motion. In Upper Egypt, the ploughs belched steam—civilization and progress had made another step forward” (Max Eyth, Lebendige Kräfte, 7 Vorträge aus dem Gebiete der Technik, [Berlin: J. Springer, 1908], p. 21).

346Evelyn Baring, Earl of Cromer, Egypt Today (London: Macmillan, 1908), Vol. 1, p. 11.

347Incidentally, the money squeezed out of the Egyptian fellah also accrued to European capital via a diversion through Turkey. The Turkish loans of 1854, 1855, 1871, 1877, and 1886 were based on the Egyptian tribute, which was increased several times and was paid directly into the Bank of England.

348The Times of March 31, 1879 carried the following report: “It is stated by residents in the Delta that the third quarter of the year’s taxation is now collected, and the old methods of collection applied. This sounds strangely by the side of the news that people are starving by the roadside, that great tracts of country are uncultivated, because of the physical burdens, and that the farmers have sold their cattle, the women their finery, and that the usurers are filling the mortgage offices with their bonds, and the courts with their suits of foreclosure” (cited in Theodore Rothstein, Egypt’s Ruin [London: Swan Sonnenschein, 1910], pp. 69–70).

349The correspondent of The Times in Alexandria wrote the following: “This produce consists wholly of taxes paid by the peasants in kind, and when one thinks of the poverty-stricken, overdriven, underpaid fellaheen in their miserable hovels, working late and early to fill the pockets of the creditors, the punctual payment of the coupon ceases to be wholly a subject of gratification” (cited by Rothstein, Egypt’s Ruin, p. 49).

350[Max] Eyth, a prominent agent of capitalist civilization in primitive countries, tellingly concludes his masterly sketch of Egypt, from which the main data have been extracted here, with the following imperialist articles of faith: “What we have learnt from the past also holds true for the future. Europe must and will lay firm hands upon those countries that can no longer keep up with modern conditions on their own, though this will not be possible without all kinds of struggle, when the difference between right and wrong will become blurred, when political and historical justice will often enough mean disaster for millions and their salvation depend upon what is politically wrong. All the world over, the strongest hand will make an end to confusion, and so it will even on the banks of the Nile” (Egypt’s Ruin, p. 247). Just what kind of “order” the British established “on the banks of the Nile” is made clear by Rothstein.

351As early as the beginning of the 1830s, the British administration in India commissioned Colonel [Francis Rawdon] Chesney to investigate the navigability of the River Euphrates in order to establish the shortest possible connection between the Mediterranean and the Persian Gulf and India. After detailed preparations and a preliminary reconnaissance in winter 1831, the expedition proper lasted from 1835 to 1857. British officers and civil servants subsequently investigated and surveyed a wider area in Eastern Mesopotamia. These efforts extended until 1866 without yielding any practical results for the British government. The U.K. later resumed the plan of connecting the Mediterranean with India via the Persian Gulf, though in a different form, i.e. the Tigris railway project. In 1879, [Verney Lovett] Cameron traveled through Mesopotamia on behalf of the British government to study the projected route of the railway (Max Freiherr v. Oppenheim, Vom Mittelmeer zum Persischen Golf durch den Hauran, die Syrische Wüste und Mesopotamien [From the Mediterranean to the Persian Gulf through Hauren, the Syrian Desert and Mesopotamia], Vol. 2 [Berlin: D. Reimer, 1899], pp. 5 and 36).

352Siegmund Schneider, Die Deutsche Bagdadbahn und die projektierte Uberbruckung des Bosporus (The Baghdad Railway amd the Project of Breaking Through to the Bosporus) (Leipzig: L. Weiss, 1900), p. 3.

353Saling, Börsen Jahrbuch: Ein Handbuch für Bankiers under Kapitalisten (Exchanges Yearbook: A Handbook for Bankers and Capitalists), Part 20, 1911/12, p. 211.

354Ibid., pp. 360–1. An engineer from Württemberg by the name of [Wilhelm von] Pressel, who was actively engaged in these transactions in European Turkey as an assistant to Baron von Hirsch, provides the following simple tally for the total subsidies paid by the Turkish government to international capital for the construction of railways in the country:

		Subsidies paid
	Length (km)	(million francs)
The three railway lines in European Turkey	1,889	33.1
Railway network completed in Anatolia by 1899	2,513	53.8
Commissions and other costs paid to the
Administration de la Dette Publique Ottomane
in order to service government guarantees		9.4
	Total	96.3

    It should be noted that these figures refer to the period up to the end of 1899, and that some of the government subsidies were not paid until after this date. By this time, the tithes of no less than 28 of the 74 sandshaks had already been signed over to finance the railway subsidies. With all these subsidies, railways had been built over a grand total of 2,513 km in Anatolia between 1856 and 1900. Cf. W. V. Pressel, Les Chemins de Fer en Turquie d’Asie (Zurich: Institute Orell Fussli, 1900). Incidentally, Pressel, who is an expert in the matter, gives proof of manipulation by the railway companies at Turkey’s expense. He states that the Anatolian Company had initially committed itself to building the Baghdad railway via Ankara under the terms of the 1893 concession. Subsequently, however, it declared that its own plans were impracticable, and it abandoned the government-subsidized Ankara line to its fate in order to initiate work on an alternative route via Konya: “No sooner have the companies succeeded in acquiring the Smyrna–Aydin–Diner line, than they will demand the extension of this line to Konya, and the moment these branch lines are completed, the companies will move heaven and earth to force the goods traffic to use these new routes for which there are no guarantees, and that, more important still, need never share their takings, whereas the other lines must pay part of their surplus to the government, once their gross revenue exceeds a certain amount. In consequence, the government will gain nothing by the Aydin line, and the companies will make millions. The government will foot the bill for practically the entire revenue guarantee for the Kassaba–Angora line, and can never hope to profit by its contracted 25 percent share in the surplus above £600 gross takings” (Ibid., p. 7).

355Charles Moravitz, Die Türkei im Spiegel ihrer Finanzen (Turkey in the Financial Mirror) (Berlin: C. Heymann,1903), p. 84.

356“Incidentally, in this country everything is difficult and complicated. If the government wishes to create a monopoly in cigarette paper or playing cards, France and Austro-Hungary immediately are on the spot to veto the project in the interest of their trade. If the issue is oil, Russia will raise objections, and even the Powers who are least concerned will make their agreement dependent on some other agreement. Turkey’s fate is that of Sancho Panza and his dinner: as soon as the minister of finance wishes to take action on a particular matter, some diplomat gets up and stands in his way, holding up a veto” (Moravitz, Die Türkei im Spiegel ihrer Finanzen, p. 70).

357Nor was this only in Britain. “Even in 1859, a pamphlet, ascribed to Diergardt of Viersen, a factory owner, was disseminated all over Germany, urging that country to secure the East Asian market in good time. It advocated the deployment of military force as the only means for getting commercial advantages from the Japanese and the East Asian nations in general. A German fleet, built with the people’s small savings, had been a youthful dream, long since brought under the hammer by Hannibal Fischer. Though Prussia had a few ships, her naval power was not impressive. But in order to enter into commercial negotiations with East Asia, it was decided to equip a fleet. [Botho] Graf zu Eulenburg, one of the ablest and most prudent Prussian statesmen, was appointed chief of this mission that also had scientific objects. Under most difficult conditions he carried out his commission with great skill, and though the plan to establish contractual relations simultaneously with the Hawaiian Islands had to be abandoned, the mission was otherwise successful. Though the Berlin press of that time knew better, declaring whenever a new difficulty was reported, that it was only to be expected, and denouncing all expenditure on naval demonstrations as a waste of the taxpayers’ money, the ministry of the new era remained steadfast, and the harvest of success was reaped by the ministry that followed” (Walther Lotz, Die Ideen der deutschen Handelspolitik [Berlin: Julius Springer, 1892], p. 80).

358“Official negotiations were shortly entered upon [following preliminary discussions between Michel Chevalier and Richard Cobden on behalf of the French and English governments—R. L.] and were conducted with the greatest secrecy. On January 1, 1860, Napoleon III announced his intentions in a memorandum addressed to M. Fould, the Minister of State. This declaration came like a bolt from the blue. After the events of the past year, the general belief was that no attempt would be made to modify the tariff system before 1861. Feelings ran high, but all the same the treaty was signed on January 23” (Auguste Devers, “La politique commerciale de la France depuis 1860,” Schriften des Vereins für Sozialpolitik, Vol. 51, p. 136).

359The liberalizing reforms of Russian tariffs policy between 1857 and 1868 that finally dismantled the absurd Kankrin system of protective tariffs were both a supplement to, and an expression of, the whole program of reforms that were made necessary by the Crimean War debacle. On an immediate level, however, the reduction in tariffs corresponded to the interests of the Russian landowning aristocracy: both as a consumer of foreign commodities and as a producer of grain for export, it had a vested interest in the lifting of restrictions on trade between Russia and Western Europe. The following is a statement by the champion of agrarian interests, the Free Economic Association: “During the last sixty years, between 1822 and 1882, agriculture, Russia’s largest producer, was brought to a precarious position owing to four great setbacks. These could in every case be directly attributed to excessive tariffs. On the other hand, the thirty-two years between 1845 and 1877 when tariffs were moderate went by without any such emergency, in spite of three foreign wars and one civil war [i.e. the Polish insurrection of 1863—R. L.], every one of which proved a greater or less strain on the financial resources of the state” (Petitions by the Imperial Free Economic Society concerning the Revision of Russia’s Tariffs [St. Petersburg: 1890], p. 148). That the Russian advocates of free trade, or of at least a reduction in protective tariffs, could hardly be considered representatives of the interests of industrial capital, at least until recently, is demonstrated by the fact that the scientific backers of the movement for trade liberalization, the above-mentioned Free Economic Association, was still agitating against protective tariffs in the 1890s on the basis that these constituted a means for the “artificial implantation” of capitalist industry in Russia. Echoing the reactionary “Populists,” the Free Economic Association denounced capitalism as the breeding ground of the modern proletariat, “those masses of shiftless people without home or property who have nothing to lose and have long been in ill repute” (Ibid., p. 191). See also K. Lodyshenski, Istoriia russkogo tamozhennogo tarifa (The History of the Russian Tariff) (St. Petersburg: Balashev, 1886), pp. 239–58.

360Such a conception was also shared by Frederick Engels. In his letter to Danielson dated June 18, 1892, he writes: “English interested writers cannot make it out that their own Free Trade example should be repudiated everywhere, and protective duties set up in return. Of course, they dare not see that this, now almost universal, protective system is a—more or less intelligent and in some cases absolutely stupid—means of self-defense against this very English Free Trade, which brought the English manufacturing monopoly to its greatest height. (Stupid for instance in the case of Germany, which had become a great industrial country under Free Trade and where protection is extended to agricultural produce and raw materials, thus raising the cost of industrial production!) I do not consider this universal recurrence to protection as a mere accident, but as a reaction against the unbearable industrial monopoly of England; the form of this reaction as I said, may be inadequate and even worse, but the historical necessity of such a reaction seems to me clear and evident.” [See Marx and Engels Collected Works, Vol. 49, pp. 441–2.]

361Capital, Vol. 1, p. 926.

362This assumption is in fact made by Dr. [Karl] Renner, for example, and it forms the basis of his treatise on taxation: “The entire value created in the course of one year is made up of these four parts: profit, interest, rent, and wages; and annual taxation, then, can only be levied upon these” (Das arbeitende Volk und die Steuern [Vienna: Brand, 1909]). Although Renner is subsequently reminded of the existence of peasants, he cursorily dismisses them in a single sentence: “A peasant e.g. is simultaneously entrepreneur, worker, and landowner, his agricultural proceeds yield him wage, profit, and rent, all in one.” Obviously, it is an empty abstraction to divide the peasantry among all the categories of capitalist production, and to conceive of the peasant as entrepreneur, wage laborer, and landlord all in one person. The economic particularity of the peasantry—if it is to be treated as an undifferentiated category, as by Renner—consists precisely in the fact that it belongs neither to the class of capitalist entrepreneurs nor to that of the waged proletariat; it does not represent capitalist production at all, but rather simple commodity production.

363It would go beyond the scope of the present study to deal with the question of cartels and trusts as a specific phenomenon of the imperialist phase that occurs on the basis of the internal competitive struggle between individual capitalist groups over the monopolization of the existing spheres of accumulation and the distribution of profit.

364An example is Professor [A.] Manuilov’s rejoinder to Vorontsov, which was much celebrated by his Russian Marxist contemporaries: “In this context, we must distinguish strictly between a group of entrepreneurs producing weapons of war and the capitalist class as a whole. For the manufacturers of guns, rifles, and other war materials, the existence of militarism is no doubt profitable and indispensable. It is indeed quite possible that the abolition of the system of armed peace would spell ruin for Krupp. The point at issue, however, is not a special group of entrepreneurs but the capitalists as a class, capitalist production as a whole.” Manuilov argues that, from this latter standpoint, “if the burden of taxation falls chiefly on the working population, every increase of this burden diminishes the purchasing power of the population and hence the demand for commodities.” This fact is taken as proof that “militarism, under the aspect of armament production, does indeed enrich one group of capitalists, but at the same time it injures all others, spelling gain on the one hand but loss on the other.” See A. Manuilov, “Militarism and Capitalism,” Vesnik Prava (Journal of the Law Society) (St. Petersburg: 1890), No. 1.

365Ultimately, the degeneration of the normal conditions under which labor-power is reproduced will lead to the degeneration of labor-power itself, to the reduction of its average intensity and productivity, thus jeopardizing the very conditions of surplus value production. However, these further consequences, which only make themselves felt by capital after an extended period of time, do not initially carry any weight in its economic calculations; on the other hand, it is true that they give rise to a general intensification of the defensive action taken by wage laborers.

THE ACCUMULATION OF CAPITAL, OR WHAT THE EPIGONES HAVE MADE OUT OF MARX’S THEORY—AN ANTI-CRITIQUE

1One may see an example of this kind of thing in the review of my book by G[ustav] Eckstein in Vorwärts (February 16, 1913). After pompous introductory promises to instruct and educate the reader on the subject of “social need,” he turns out to be pretty much as helpless as a cat chasing its tail, not getting anywhere, and finally he explains that this problem is “by no means simple or easy.” That’s exactly right. A few snotty, derogatory phrases are much simpler and easier.

2Likewise A. Pannekoek in the Bremer Bürgerzeitung of January 19, 1913, writes: “The schema itself gives the answer very simply, for all products find their market there (i.e. on the paper of the Bremer Bürgerzeitung—R. L.). The capitalists and the workers themselves are the consumers … There is, therefore, absolutely no problem to be solved” [cf. Pannekoek, in Discovering Imperialism, p. 683].

3Eckstein states: “The schemas show precisely who buys the products,” and “Comrade Luxemburg has misunderstood completely the nature, aim, and significance of Marx’s models” [cf. Eckstein, in Discovering Imperialism, p. 710].

4Or else we are left with the somewhat oblique [and dubious] consolation provided by the minor “expert” [reviewer of Accumulation of Capital] in the Dresdener Volkszeitung, who after thoroughly destroying my book, explains that capitalism will eventually collapse “because of the falling rate of profit.” One is not too sure exactly how the dear man envisages this—whether the capitalist class will at a certain point commit suicide in despair at the low rate of profit, or whether it will somehow declare that business is so bad that it is simply not worth the trouble, whereupon it will hand the keys over to the proletariat. However that may be, this comfort is unfortunately dispelled by a single sentence of Marx’s, namely the statement that “large capitals will compensate for the fall in the rate of profit by mass production.” Thus there is still some time to pass before capitalism collapses because of the falling rate of profit, roughly until the sun burns out.

5Karl Kautsky, Krisentheorien (Crisis Theory), Die Neue Zeit, Year 20, 1901–2, Vol. 2, No. 31, p. 140.

6Ibid., No. 29, p. 80 (emphasis added—R. L.).

7Ibid., No. 31, p. 141.

8The reviewer in Vorwärts, Eckstein, among all the “experts” has the least understanding of what is actually under discussion. He belongs to that upstart variety (aufgekommener Gattung) of journalists whose rise has accompanied the growth of the working-class press. They can write about anything and everything at any time: Japanese family law, modern biology, the history of socialism, epistemology, ethnography, cultural history, political economy, tactical questions—whatever is needed at the moment. These “universal writers” move about through all the fields of knowledge with unscrupulous self-assurance, for which a serious researcher could frankly envy them. Where they lack understanding of a subject they have “taken over,” they make up for it by becoming harsh and overbearing. Here are just two examples: Eckstein says at one point in his review: “If it is recognized here and now that the author has misunderstood the meaning and purpose of Marx’s presentation, this recognition will be confirmed throughout by the further content of her book. Above all, the technical methodology of Marx’s presentation has remained completely unclear to her. This is shown very plainly as early as page 72 of her book” [cf. Eckstein, Discovering Imperialism, pp. 706–7; see pp. 72–3 of this volume]. I discuss the fact that in his first “schematic presentation,” Marx assigns the production of money to the department that produces means of production. I criticize this in my book and try to show that, since in itself money is not a means of production, this confusion must inevitably result in great difficulties for an exact and accurate presentation [of the process of economic reproduction]. Here Eckstein puts in his two cents’ worth, as follows: “Comrade Luxemburg now complains about Marx including the production of money materials, i.e. gold and silver, in Department I and counting it together with the production of means of production. That is mistaken [she says]. Therefore she adds a third column to those constructed by Marx, which is supposed to represent the production of money materials. [Emphasis added—R. L.] That is certainly permissible. But one is eager to see how the corresponding rearrangement in three columns is going to work out.” Now Eckstein finds himself bitterly disappointed! “In the schema constructed by Comrade Luxemburg the difficulty is—not just very great; it is insuperable … She does not make the slightest effort to clearly present these ‘organic’ entanglements. The very attempt would necessarily have shown her that her model was impossible,” and he continues on, in his gracious manner. Meanwhile, the “model constructed by Comrade Luxemburg” on the indicated page was not “constructed” by me at all—but by Marx! I simply wrote down the figures given in Volume 2 of Capital, p. 446 [of the fourth German edition; cf. Capital, Vol. 2, p. 546], in order to show that, going by Marx’s own data, it is impossible to incorporate the production of money [into Department I], and I introduced the passage where I discussed this with the following explicit statement: “Moreover, a mere glance at the reproduction schema itself reveals the inconsistencies that necessarily follow from the confusion of means of exchange with means of production” [see p. 62 in this volume]. And along comes Eckstein, lays the blame at my door for the schema of Marx’s that I had criticized, scolds me because of this schema, as though I were some stupid little girl, [and claims] that “the technical methodology of these ‘schemata’ (i.e. Marx’s reproduction schemas)” have remained completely unclear to me.

    Another example. Marx constructs his first schematic representation of accumulation in Volume 2 of Capital on page 487 [of the German edition used by Luxemburg; cf. Capital, Vol. 2, p. 586]. In that schematic model he (Marx) allows the capitalists of Department I to always capitalize 50 percent of their surplus, but [he allows] those of the other department to do so however God might choose, without any evident rules, but only on the basis of the demand from Department I. This is an assumption that I seek to criticize as an arbitrary one. And here comes Eckstein again with the following outpouring: “The mistake lies in the very calculations she herself makes, and this shows that she has not grasped the essence of Marx’s schemas. [Emphasis added—R. L.] In particular she believes that the requirement for an equal rate of accumulation lies at the basis of Marx’s schemas; that is, she assumes that, in the two main departments of social production being examined, accumulation always proceeds at an equal rate, that is, that an equal part of the surplus value is [always] turned into capital. But this is an entirely arbitrary assumption that contradicts the facts … In reality there is no such thing as a universally existing rate of accumulation, and even theoretically that would be an impossibility.” [Emphasis is Luxemburg’s; cf. Discovering Imperialism, p. 708.] Here before us (supposedly) there lies “a scarcely believable error by the author (Luxemburg), that shows again that the essence of Marx’s schemas have remained a complete puzzle to her.” (Emphasis added—R. L.) [Eckstein then asserts:] The real law of the equal rate of profit [is] “in total contradiction to the imagined law of equal [rate of] accumulation,” [cf. Discovering Imperialism, p. 709], and thus Eckstein is able to simply demolish me with robust thoroughness, salt and pepper added. If it must be done, then do it all-out. However, five pages later [in Volume 2 of Capital] Marx constructs a second example of his accumulation schema, and indeed [this proved to be] the genuine, fundamental schema with which he then worked exclusively, right down to the end of Volume 2, whereas the first example had been merely a rough try, a preliminary draft [cf. Capital, Vol. 2, pp. 586 and 589]. And in this second, definitive example Marx assumes continually (ständig) the same rate of accumulation, that “imaginary law,” in both departments! This “theoretical impossibility,” this “complete contradiction of the real law of the equal rate of profit,” this sum total of major crimes and offenses is found in Marx’s reproduction schema on page 496 of [the fourth German edition of] Volume 2 of Capital [cf. Capital, Vol. 2, pp. 594–5]. And Marx persists in these sinful errors right down to the last line of Volume 2. Again the flood [of Eckstein’s criticism] pours down the back of the unlucky Karl Marx, it being obvious that for the latter, the “essence” of his own reproduction schemas “remains a complete puzzle” to him. He shares this bad luck, incidentally, not only with me but also with Otto Bauer, who explicitly states the assumption in his schema (the one “totally free of imperfections”) that “the rate of accumulation is equal in both spheres of production.” (See Bauer, Die Neue Zeit, [Year 31, Vol. 1], p. 838 [cf. Discovering Imperialism, p. 723].) That’s what Eckstein’s style of criticism is like. And from a fellow like that, who has never properly read through all of Marx’s Capital, must one allow all sorts of shameless insults to be heaped upon one’s head?! That a “review” of this kind could appear in Vorwärts at all, is an indicative symptom of how greatly the “Austro-Marxist” school of epigonism dominates both central organs of Social Democracy. And I will not let the opportunity pass—if, God willing, I live to see a second edition of my book—to include an Appendix reprinting Eckstein’s review in toto, to preserve this pearl for posterity!

9Pannekoek says, after he has summed up the calculations in his Tables, which also have rapidly increasing constant capital, but an unchanging rate of surplus value: “In a fashion similar to the above, we should also allow for a gradual change in the rate of exploitation.” (See Bremer Bürger-Zeitung, January 1913; [cf. Pannekoek, in Discovering Imperialism, p. 687]). But he, too, leaves to the reader the effort of doing this.

10One minor “expert,” writing in the Dresdner Volkszeitung (January 22, 1913), came up with a wonderful way of solving the problem of accumulation. “Every additional mark that the worker receives,” he instructs me, “creates new capital investment of ten marks or more, so that the struggle of the workers [i.e. for higher wages] … creates a market for surplus value and makes capital accumulation possible in our own country.” What a clever little fellow! (Dieser kleine Gescheite!) Next thing we know, when an “expert” like this gets the notion in his head to write “cockadoodledoo” in the middle of some observations about economics, it is dead certain that this, too, will be published without editorial review as a lead article in an official newspaper of the Social Democratic Party. Indeed, the gentlemen-editors, especially those with academic training, who have their hands full in the meeting rooms and lobbies of parliament, where they keep the wheel of world history turning, have long since come to regard it as an old-fashioned waste of time to settle down on the seat of their pants for a while and read some theoretical books, to help them form judgments of their own about newly arising problems. It is more convenient [bequemer] to shove things like that off onto the first and best scribbler of news items they can find, the kind who stitch together little economic surveys from English, American, and other statistical publications.

11The idea of concluding treaties for international disarmament was included in the “super-imperialism” theory dreamed up by Karl Kautsky, according to which, [imperialism, when] unfolded to its fullest extent, would weaken the contradictions between individual capitalist states, and accordingly the causes of war would disappear, so that these states could peacefully reach agreement on disarmament and arrive at a lasting peace.

12In his review of my book in Vorwärts in February 1913, Eckstein denounced me for advocating a “theory of catastrophes,” simply borrowing his accusations from the verbal treasury of [Wilhelm] Kolb, [Wolfgang] Heine, and [Eduard] David. [Eckstein wrote:] “The practical conclusions fall in with the theoretical assumptions, above all the catastrophe theory, which Comrade Luxemburg has constructed on the basis of her teachings about the necessity [for the capitalists] to find non-capitalist consumers” [cf. Eckstein, in Discovering Imperialism, p. 712]. Now, when the theoreticians of the swamp have made a turn “toward the left,” Eckstein accuses me of the opposite crime, of encouraging the right wing of Social Democracy. With heated zealotry he points out that Lensch, the same Lensch who after the outbreak of World War veered over to the Kolb-Heine-David group, allegedly had at one time taken pleasure in my book and reviewed it favorably in the Leipziger Volkszeitung. Is it not clear that there is a link? Suspicious, highly suspicious! It was “precisely for this reason” that he “allowed himself” to annihilate my book so “thoroughly” in Vorwärts in February 1913. Well now, it just so happens that before the war this same Lensch took even greater pleasure in Marx’s Capital. And in fact, a certain Max Grunwald was for years an inspired interpreter of Marx’s Capital at the Berlin school for workers’ education. Is this not striking proof that Marx’s Capital misleads people straight into raving for the destruction of England and writing birthday articles in honor of [Paul von] Hindenburg? But these clumsy oafs [Boecke] even go beyond Eckstein, laying it on so thick and in such crude fashion that they have ended up completely overdoing it. It is well known that Bismarck often complained about such blind zealotry on the part of his clique of journalistic reptiles.